REG - Ashoka India Equity - Annual Financial Report
09/10/2025 07:00
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RNS Number : 6361C Ashoka India Equity Investment Tst 09 October 2025
LEI: 213800KX5ZS1NGAR2J89
ASHOKA INDIA EQUITY INVESTMENT TRUST PLC
ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2025
Ashoka India Equity Investment Trust plc (the "Company") hereby submits its
annual report and financial statements for the year ended 30 June 2025 as
required by the Financial Conduct Authority's Disclosure Guidance and
Transparency Rule 4.1.
The Company's annual report and financial statements for the year ended 30
June 2025 is being published in hard copy format and an electronic copy will
shortly be available to download from the Company's website at
www.ashokaindiaequity.com (http://www.ashokaindiaequity.com) . It will also be
made available to the public at the Company's registered office, 46-48 James
Street, London W1U 1EZ.
The Company's annual report and financial statements has been uploaded to the
Financial Conduct Authority's National Storage Mechanism and is available for
inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
Enquiries:
NSM Funds (UK) Limited
ashoka@nsm.group (mailto:ashoka@nsm.group)
HIGHLIGHTS
· The Company has delivered a total NAV return
outperforming its benchmark index for the year ended 30 June 2025 by 6.4%
delivering -0.2%, compared to -6.6% for the MSCI India IMI.
· Over a five-year period to 30 June 2025, the Company's
NAV increased by 167.8% against the index rise of 123.6% and since launch in
July 2018, assets have grown from £46 million to £450 million and the
Company was promoted to the FTSE250 Index in June 2025.
· To capitalise on India's structural growth story, which
remains very much intact driven by favourable demographics, digital
transformation and manufacturing reforms, the Company is proposing to increase
the limit on investment in unquoted companies to 15%.
· The Investment Adviser believes India is at the cusp of
realising its true economic potential with young demographics, superior
corporate profitability and megatrends of digitalisation and formalisation
emerging as the structural drivers of the India growth story.
· The Indian market is still relatively under-researched,
and opportunities are present across the large, mid and small cap and private
company spectrum, placing it as one of the most promising economies over the
medium term and making it a highly compelling investment proposition.
Investment Objective, Financial Information and Performance Summary
Investment Objective
The investment objective of the Company is to achieve long-term capital
appreciation, mainly through investments in securities listed in India and
listed securities of companies with a significant presence in India.
Financial information
As at 30 June 2025 As at 30 June 2024
Net asset value ("NAV") per Ordinary Share (cum income) 278.9p 279.3p
Ordinary Share price 281.5p 284.0p
Ordinary Share price premium to NAV(1) 0.9% 1.70%
Net assets £476.2million £435.4million
Performance summary
For the For the
Year ended Year ended
30 June 2025 30 June 2024
%(2,3) %(3)
Share price total return per Ordinary Share(1) -0.9% 35.90%
NAV total return per Ordinary Share(1) -0.2% 35.50%
MSCI India Investable Market Index ('IMI') total return (sterling terms)(2,3) -6.6% 37.70%
1 These are Alternative Performance Measures.
2 Total returns in sterling for the year ended 30 June 2025 and 2024.
3 Source: Ashoka WhiteOak Capital Pte. Ltd.
Alternative Performance Measures ("APMs")
The disclosures as indicated in the footnote above represent the Company's
APMs.
Chairman's Statement
Welcome to the seventh annual results of Ashoka India Equity Investment Trust
plc for the year ended 30 June 2025.
First, the very good news. Since launch in July 2018, the Company's assets
have grown from c.£46 million to approximately £450 million thanks to a
combination of outstanding performance and growth from share issuance. On
behalf of the Board, I am pleased to confirm that, as a result, Ashoka India
Equity Investment Trust plc was promoted to the FTSE250 Index on 23 June
2025. This is a remarkable achievement and the Board is duly proud of the
outstanding and consistent performance of both the Investment Manager and the
Investment Adviser and heartily congratulates Prashant Khemka and Ayush
Abhijeet, the Company's lead investment managers.
As announced on 5 August 2025, I am delighted to confirm that Hiren Dasani, an
experienced, senior investor, has joined Ashoka WhiteOak Capital Partners as
Chief Investment Officer of Emerging Markets and will act as co-portfolio
manager of this Company alongside Prashant and Ayush with immediate effect.
However, the less good news is for me to be disappointed to write this
statement at a period when the geopolitical pressures across the world have
not lessened since this time last year. My "heroic assumptions" for a more
peaceful world were misplaced; Russia continues to bombard Ukraine in an
unrelenting mission to subsume that sovereign nation back into the old Soviet
Union and tensions in the Middle East have increased as Israel widens the
scope of the conflict. To add to this, the possibility of disruption in global
trade as a result of tariffs imposed by President Trump on US imports is a
further unwanted distraction. As I have written many times before, these
conditions are hardly conducive for investment managers to perform at their
best but it does appear that, overall, markets are continuing to take the
ceaseless negative newsflow in their stride and show resolute reluctance to go
down.
India is a case in point, positioned as it is as a long-term trading ally of
Russia whilst, at the same time, pursuing the seemingly unstoppable aim of
economic growth, both domestically and abroad. However, in the year under
review, the Company's benchmark index, the MSCI India IMI, (in sterling) fell
by 6.6% showing that even such a fast-growing economy is not immune from
market forces.
Performance
Last year I mentioned that your Board is only too well aware of how impressive
performance has been since launch in 2018, both in relative and absolute
terms, and spends a fair amount of time wondering about "bumps in the road
ahead". It's fair to say that the volatility during the last year caused heads
to be scratched but remarkably, given the conditions I have outlined, the
investment team has again managed to outperform the benchmark index for the
year to 30 June 2025, recording a small negative net asset value (NAV) return
of 0.2% in sterling terms, an outperformance of 6.4%.
It is also worth recording that over the five-year period to 30 June 2025, in
sterling terms, the Company's NAV increased by 167.8% against the index rise
of 123.6%; since launch in 2018, the numbers are 184.6% versus 106.8%, a
highly satisfactory result for our long-term shareholders.
As is made clear in the Investment Manager's Report that follows, India is
currently exposed to potential US tariffs and affected by a degree of economic
uncertainty worldwide. As the US is India's largest export market, it is hoped
that the first issue will soon be resolved and that both will have only a
short-term impact. However, since the end of the Company's 2025 financial
year, both the NAV and share price have weakened a little; as at 6 October
2025, the latest practicable date before publication of this Report, the NAV
was 270.5p and the share price 263.0p, a discount of 2.8%.
Share Issuance
As an investment destination for UK-based shareholders, India constitutes a
very small percentage of the total, still being considered a single-country,
emerging market. To an extent, this status may protect the Company from the
worst of short-term trading volatility caused by extraneous events and it also
suggests that, on occasional weakness, new investors are attracted to the
Company by its impressive performance record and existing shareholders show
willingness to increase exposure. As a result, the Company continued to
respond to demand and issued new shares at a small premium to the prevailing
net asset value. In total, 14,849,496 new shares were issued during the year
under review, raising a total of £42.2 million.
Since year end, issuance has continued and, as at the date of this Report,
there were 171,491,893 shares in issue.
Revenue and Dividends
The Company's principal objective is to provide returns through long-term
capital appreciation, with income being a secondary consideration. Therefore,
shareholders should not expect that the Company will pay an annual dividend,
under normal circumstances. Whilst the portfolio does generate a small amount
of income, this is used to defray running costs. However, the Company has been
generating revenue almost by default during the year under review as the
portfolio's investee companies distribute available and excess cash to their
shareholders. As a result, this will be the first year that the Company pays
a dividend in order to comply with rules governing investment trust status.
Added to reserves retained in previous years, this dividend amounts to 0.5p
per share and will be paid on 31 October 2025 to shareholders on the register
as at 10 October 2025. At this early stage, it remains unclear whether this
will now become an annual event.
Redemption Facility
The Company has a redemption facility through which shareholders are entitled
to request the redemption of all or part of their holding of Ordinary Shares
on an annual basis. The Redemption Point for the Ordinary Shares this year is
30 September 2025.
As announced on 4 September 2025, the total number of ordinary shares in
respect of which valid redemption requests were received for this Redemption
Point was 2,549,082. All of the Ordinary Shares will be redeemed by the
Company. All shareholders who validly applied to have shares redeemed will
receive a redemption price of 267.19p per share. It is expected that dispatch
of payments in respect of the valid redemption requests will be made on or
before 13 October 2025.
Performance Fee
Even considering the slightly negative number for the year under review, the
Company's investment performance has been outstanding since launch in 2018 and
returns from investing in the Company, an actively-managed investment company
specialising in Indian equities across the market cap spectrum, have been
compelling.
To remind shareholders of the Company's fee arrangements, no annual management
fee is paid; the Investment Manager, Acorn Asset Management Ltd, is
remunerated solely by means of a performance fee based on the level of
performance relative to the Company's benchmark index, the MSCI India IMI,
over discrete three-year periods. The first such period ended on 30 June 2021,
the second on 30 June 2024 and we are now one third into the measurement
period that runs from 1 July 2024 to 30 June 2027. It is for this latest
period that a performance fee is being accrued to the Investment Manager and
this currently amounts to £16.0 million. Full details of the performance fee
can be found in the Directors' Report section of this Annual Report. I remind
shareholders that any performance fee is fully accrued in the daily NAV
calculation.
For the current year and beyond, a very modest amendment to the Investment
Management Agreement has been made. This is purely a technical wording
adjustment clarifying the performance fee payment between the Company and the
Investment Manager which does not alter the essence of the arrangement and is
not considered material.
The Company's portfolio is actively managed and seeks an excess return
relative to its benchmark index (known as "alpha"). This investment style may
lead to occasional greater volatility than the benchmark index but has
produced outstanding returns for shareholders since inception. The Board
remains fully supportive of this investment approach and remuneration
structure.
OPERATIONAL DEVELOPMENTS AND GOVERNANCE
During the year, we completed the transition of Company Secretary and
Administrator responsibilities to NSM Funds (UK) Limited, effective 1 January
2025, thus reuniting with experienced senior personnel who oversaw the launch
of this Company in 2018.
The Board has continued to engage with shareholders and undertook an
externally-facilitated evaluation in 2025 to ensure we remain committed to
maintaining high standards of governance, oversight and accountability.
Annual General Meeting
The Company will hold its Annual General Meeting on 10 December 2025 at the
offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M 7SH
starting at 11am. An on-line presentation will be given by the Investment
Manager and the Board will be delighted to see all shareholders who are able
to attend.
Outlook
More of the same only better I think is an appropriate way to describe the
future for this Company. Long-term shareholders are only too well aware of the
outstanding returns that have been produced and, as global news outlets
constantly report and I bang on about at every opportunity, the economic
growth prospects for the powerhouse of the Indian economy remain intact even
after a relatively lacklustre year compared to recent times.
The threats are well known: geopolitical tensions worsening rather than
abating; tariff wars interrupting global trade affecting Indian exports;
over-expansion exuberance in the domestic market; China regaining its poise -
the list goes on.
What I think has not changed, however, and is unlikely to, is the appetite
within India to succeed, both domestically and on the global stage. This
extends from Government initiatives through the already-affluent middle
classes and on to the burgeoning new entrepreneurial class of business leaders
who see the opportunities opening up in front of them and who have available
to them a willing, very able and educated workforce. As mentioned before, the
vast majority of this intelligent cohort speaks good English, the lingua
franca of the global commercial world and an imperative as a tool to escape
domestic boundaries. The investable opportunities presenting themselves to our
investment management teams continue to grow as India's economy develops and
these new enterprises emerge.
India's structural growth story remains very much intact driven by favourable
demographics, digital transformation and manufacturing reforms. To fully
capitalise on these opportunities, the Company may now invest up to 12% of its
gross assets (at the time of investment) in unquoted companies. Following
detailed discussions with the Investment Manager, the Board has agreed to a
final increase in this limit to 15% of gross assets (at the time of
investment), subject to approval by shareholders at this year's AGM. Your
Board is wholly supportive of the Investment Manager's proprietary method of
approaching investment decisions, of adhering to best-practice corporate
governance standards and of finding early access to tomorrow's success stories
and firmly believes that allowing the investment teams to have adequate
flexibility is likely to yield the best return for shareholders over the
longer term.
My optimistic nature remains intact although it has taken a bit of a bruising
as the geopolitical situation remains a tinderbox. To compensate, I still find
it difficult to imagine a near-future world that doesn't have India as a
principal driver of economic growth. President Trump is an acquired taste, of
that there is no doubt, but on certain levels it is difficult to argue against
his position on the imbalance of global trade over several decades. Whether or
not an agreed tariff system will correct this inequality is up for debate but
the readiness of most countries to negotiate suggests that it might.
Should I be foolish enough to hope that Trump can also pull off his declared
intention of ending two wars? My (uneasy) prediction is that tensions in the
Middle East will abate, but never go away completely, and that Putin will
fight on. I really hope to open next year's statement with an acknowledgement
of how wrong I was on this second point.
As ever, my sincere thanks for being a shareholder in the Company and, to end
on a positive note, India remains an extremely attractive destination for
investors and I think this is even more so over coming years, possibly
decades. The Company has a talented team at the helm, and behind the scenes
analysing potential investments, and is, in your Board's view, positioned
better than any to exploit investment opportunities as they arise. Ashoka
WhiteOak Capital Partners have established deserved reputations in India for
being high quality investors and I firmly believe this will translate into
continued excellent, long-term returns for our shareholders.
ANDREW WATKINS
Chairman
8 October 2025
Investment Manager's Report
Performance Review
During the year ended 30 June 2025, the Company's total NAV return
outperformed the benchmark index by 6.4% delivering -0.2%, compared to -6.6%
for the MSCI India IMI (in sterling terms)*. Since 31 July 2018 (the date post
IPO when the Company was fully invested), the Company has delivered 88.3% of
net cumulative outperformance, with a 180.8% absolute return compared to the
benchmark return of 92.5%, both in sterling terms. Strong stock selection
especially in mid and small caps has been a tailwind.
* Shareholders should note that the MSCI India IMI Index (sterling terms) does
not deduct taxes, unlike active and passive funds, such as the Company.
Key contributors & detractors for the year ended 30 June 2025
Portfolio
Ending Portfolio
Weight Total Return
Contributors (%) (%)*
OneSource Specialty Pharma 4.1 +55.6
Bharti Airtel 4.0 +25.5
Cholamandalam Financial Holdings 1.7 +33.7
========= =========
Portfolio
Ending Portfolio
Weight Total Return
Detractors (%) (%)
Varun Beverages 0.0 -27.2
Tata Consultancy Services 1.8 -17.9
Grindwell Norton 0.3 -43.0
========= =========
* Source data: FactSet.
Contributors
OneSource Specialty Pharma Ltd., a specialty-focused Contract Development and
Manufacturing Organisation ("CDMO") with capabilities in biologics, complex
injectables, and drug-device combinations, outperformed following a strong
operating result for the period December 2024 - March 2025, which was also its
first profitable quarter since listing. The turnaround was driven by a
favourable product mix, operational efficiencies, and successful integration
of acquired entities, leading to cross-selling opportunities and cost
synergies. The management has outlined a US$100 million capex plan for the new
fiscal year while maintaining stronger debt service ability and targeting to
become debt-free over the next few years. These developments have also
contributed to a rerating of the stock, reflecting investor confidence in the
company's growth trajectory.
Bharti Airtel is the leading telecom company in India with presence across
wireless, fixed broadband, enterprise and Direct-To-Home TV broadcast
services. The company also operates wireless and mobile money operations in
several African markets. The company is well-positioned to benefit from
improving industry structure and pricing outlook within the Indian wireless
market. Execution remains strong across all business lines, underpinned by a
disciplined approach to capital allocation and a focus on sustainable returns.
Following the recent industry-wide tariff hike, Bharti Airtel has consistently
outperformed peers across key operating metrics, reflecting both its
high-quality subscriber base and sustained operational excellence.
Cholamandalam Financial Holdings is a holding company owned by the Murugappa
Group, with a stake in two fast-growing and well-run businesses: (1) ~44%
stake in Cholamandalam Investment and Finance Company ("CIFC") and (2) 60%
stake in Chola MS General Insurance. CIFC primarily operates in vehicle
finance, home equity, and affordable home loan categories, and its strength
lies in its ability to underwrite and collect dues from customers in rural and
semi-urban markets, where income streams are relatively less predictable.
CIFC's operating performance in recent quarters has been solid, and the
company has also made progress in three new lending segments. Cholamandalam
Fin. Holdings largely derives its value from CIFC, where the operating
performance has been better than the previous year as utilisation rates seem
to have bottomed out, and the management guided for an improving trajectory of
asset quality. Additionally, the monetary easing by the central bank is
expected to reduce the cost of funds and enhance the margin profile for a
fixed-rate lender such as CIFC, which has been a key driver of the stock's
recent performance.
Detractors
Varun beverages Ltd ("VBL") is one of the largest bottlers for the global
brand PepsiCo, with which it has been associated since the 1990s. The company
serves as PepsiCo's exclusive bottling partner across most regions in India,
accounting for over 90% of the brand's volumes in the country. This scale and
long-standing relationship position VBL as a critical strategic partner within
PepsiCo's global franchise network. The company produces and distributes a
wide range of carbonated soft drinks, non-carbonated drinks and packaged
water, sold under the trademarks owned by PepsiCo. On the back of its strong
execution capabilities, extensive infrastructure rollouts, and sustained
market development initiatives, Varun Beverages Ltd. (VBL) has significantly
expanded PepsiCo's retail presence across India and select international
markets. The company's operations now span 14 countries, including India, Sri
Lanka, and Nepal in the Indian subcontinent, as well as 11 countries across
Africa, underscoring its position as a key growth partner for PepsiCo in
emerging markets. Through backward integration the company has also
established facilities for production of preforms, crowns, plastic closures,
corrugated boxes, and shrink-wrap films to ensure operational efficiencies and
high-quality standards. Over the last few years, VBL's energy drink "Sting"
has grown exponentially, hence accelerating its growth and margins. However,
the stock's underperformance has been most likely on account of slower than
expected growth in a few quarters due to early onset of monsoon and rising
competitive intensity.
Tata Consultancy Services ("TCS") is India's largest IT services company. It
has a strong global presence especially in key markets of North America and
Europe, along with a high-quality customer portfolio. TCS operates across
seven major verticals: (a) banking, financial services and insurance, (b)
retail & consumer packaged goods, (c) manufacturing, (d) life sciences,
(e) hi-tech, (f) telecom, and (g) other niche markets. TCS has proven over
long periods of time its ability to execute large multi-service, multi-geo
transformation deals across segments like Infrastructure, online applications
and Business Process Outsourcing, on the back of its wide set of capabilities.
The company has one of the lowest attrition rates in the industry, leading to
better preservation of its institutional knowledge. While TCS has the most
resilient business models, and one of the best execution engines within the IT
services industry globally, the stock underperformed amid a challenging macro
environment with demand uncertainty in North America.
Grindwell Norton ("GWN") pioneered the manufacturing of grinding wheels in
India in 1941 and became the first majority-owned subsidiary of French major
Saint-Gobain in India in 1996. GWN's businesses include abrasives, ceramics,
and plastics (including silicon carbide, performance ceramics and
refractories, and performance plastics), as well as a captive IT development
centre. The company has significantly increased its capital expenditure
(capex) over the last three financial years in order to capture market share
across segments globally. The stock witnessed a correction on account of
weaker-than-expected operating performance in the abrasives segment, driven by
intensified competition from imports, along with subdued growth in the
ceramics segment arising from both moderating export demand and softer
domestic consumption.
Investment Outlook
The calendar year so far has been marked by a volatile global macroeconomic
environment, shaped by persistent geopolitical tensions, uneven monetary
policy actions across major economies, and fluctuating commodity prices.
Adding to these pressures, trade tariff-related uncertainty has disrupted
global supply chains and clouded the outlook for cross-border trade, further
weighing on business confidence and dampening global growth momentum.
However, amid these global headwinds, economies such as India have
continued to display relative resilience. Supported by benign macroeconomic
conditions, including moderating inflation and a favourable policy
environment, India has been able to sustain one of the strongest growth
trajectories among major economies despite the volatile external backdrop.
While India has experienced a cyclical slowdown over the last year, recent
high frequency indicators suggest that the deceleration may already be
bottoming out. Real GDP growth accelerated to 7.8% in the first quarter of the
2026 financial year (vs. 7.4% in fourth quarter of the 2025 financial year).
The expansion was broad-based, with investment gross fixed capital formation
growth at 7.8%, private consumption growth at 7.0% and government consumption
growth sharply up at 7.4% on a low base in the first quarter of the 2025
financial year due to election-related slowdown in spending. On the positive
side, it is likely that the recently announced Goods and Services Tax cuts,
the upcoming festive season and strong trends in rural demand will provide a
fillip to domestic demand. Moreover, a favourable monsoon season is expected
to support rural incomes and consumption, providing an additional tailwind for
demand recovery in the coming quarters. From a monetary policy perspective,
there is still room for continued easing with inflation expected at 3% for the
2026 financial year end. On balance, India is among the very few economies in
the world that possess the full complement of appropriate market conditions
backed by pro-reform government policies that aim to deliver sustainable
growth over the long term.
Near-term, the imposition of tariffs has understandably generated concerns
regarding potential effects on economic growth. Since the beginning of August
2025, President Trump has announced a 25% tariff on India, along with a 25%
penalty, which is linked to India's energy trade with Russia. It is likely
that this set of tariff announcements is an opening salvo in a trade
negotiation process and ultimately tariffs could settle down at more
reasonable levels, in-line with those applied to other trading partners
(c.15-25%). However, it is worth highlighting that India remains a largely
domestically driven economy, with relatively low trade intensity compared to
other emerging markets. Exports to the US (US$87 billion in the 2025
financial year) represent approximately 2% of India's GDP. India's principal
export categories to the US comprise electronics, gems and jewellery, textiles
and pharmaceutical products. At present, both electronics and pharma exports
remain exempt from tariffs. Beyond merchandise exports, India's largest export
to the US is software services, estimated at c.US$100 billion. Importantly,
these remain outside the scope of tariff discussions, as the US continues to
run a trade surplus in services. From an equity market perspective, the direct
impact of tariffs could be more muted than believed, considering less than
2.0% of MSCI India IMI revenue is subject to tariff risk, in our estimates.
That said, a prolonged tariff war involving India represents a key downside
risk offsetting some of the gains from policy support and improving domestic
consumption.
Amid tariff-related uncertainty, India's strong macroeconomic fundamentals
have been reinforced by S&P's recent upgrade of India's sovereign credit
rating from 'BBB-' to 'BBB'. This action follows S&P's adjustment of
India's outlook to positive in May 2024. The upgrade is attributed to three
main factors: improved fiscal management through higher-quality government
spending, strong economic growth, and stable monetary policy.
With a workforce of nearly 600 million, the need to create enough high
productive jobs to benefit from the demographic dividend would remain India's
key challenge in the long term. To boost productivity, the government has
undertaken a large number of supply-side measures over the last decade,
including (1) labour reforms, (2) reduction in corporate tax rates, (3)
bankruptcy reforms, (4) strengthening financial and corporate balance sheets,
and, (5) incentives for domestic manufacturing through Production Linked
Incentive scheme, among others. These efforts have contributed to a steady
rise in manufacturing gross value added, particularly in new-age sectors such
as electronics. Continued policy support provides India with strong tailwinds
to further scale up manufacturing in multiple sunrise industries, even against
the backdrop of near-term tariff-related uncertainties. At the same time,
India has also achieved a considerable degree of success in leveraging its
skilled workforce to increase its services exports.
India's diversified corporate landscape and steadily improving return
ratios reinforce its position as one of the most attractive emerging markets
for capturing sustained equity outperformance. Also noteworthy has been the
corporate deleveraging and cleaning up of banks' balance sheets with a marked
decline in non-performing loans over the last decade. Near-term tariff-related
headwinds notwithstanding, Indian manufacturing is poised to play an
increasingly important role in global supply chains. Leading multinationals
such as Apple and Samsung continue to expand their production footprint in the
country, reinforcing India's emergence as a strategic hub within the global
manufacturing and supply chain ecosystem. Furthermore, India's services
exports - led by IT services and Global Capability Centers
("GCC") - continue to grow steadily, providing a key cushion to the external
sector. Moreover, unlike some of its other large EM peers, India's economy is
inherently much more consumption-oriented than investment driven, and the
thrust of policymaking in recent years has been towards capacity building
which is likely to ensure that economic growth is sustainable and broad-based
and not propelled by a rise in leverage.
The Investment Adviser believes that India is at the cusp of realising its
true economic potential with young demographics, superior corporate
profitability and megatrends of digitalisation and formalisation emerging as
the structural drivers of the India growth story. Additionally, the most
attractive aspect of investing in India is what we see as the outsized alpha
opportunity that the market presents compared to any other equity market
globally, particularly as the Indian market is still relatively
under-researched. Such alpha opportunities are present across the large, mid,
and small cap spectrum. All these factors place India as one of the most
promising economies over the medium term and make for a highly compelling
investment proposition.
Backed by the well-resourced team of the Investment Adviser, Ashoka India
Equity Investment Trust plc is well positioned to capitalise, from a bottom-up
perspective, on the investment opportunities on offer within the Indian
equities space.
ACORN ASSET MANAGEMENT LTD
Investment Manager
8 October 2025
Top Ten Holdings
Percentage
of net
Value assets
As at 30 June 2025 Sector (£'000) (%)
ICICI Bank Financials 21,020 4.4
Onesource Specialty Pharma Healthcare 20,885 4.4
Bharti Airtel Communication Services 20,360 4.3
Bajaj Finserv Financials 13,760 2.9
Manjushree Technopack Industrials 13,438 2.8
HDFC Bank Financials 12,328 2.6
Computer Age Management Services Industrials 11,823 2.5
Eternal Consumer Discretionary 11,524 2.4
Info Edge Communication Services 10,846 2.3
Bharat Electronics Industrials 10,515 2.2
---------------
Top ten holdings 30.8
---------------
Other holdings 70.6
---------------
Total holdings 101.4
=========
Capital gains tax provision plus cash and other assets/liabilities (1.4)
---------------
Total 100.0
=========
Investment Policy, Results and Key Performance Indicators
INVESTMENT POLICY
The Company shall invest primarily in securities listed on any recognised
stock exchange in India and securities of companies with a Significant
Presence in India that are listed on stock exchanges outside India. The
Company may also invest up to 12% of Gross Assets (calculated at the time of
investment) in unquoted companies with a Significant Presence in India.
A company has a "Significant Presence in India" if, at the time of investment,
it has its registered office or principal place of business in India, or
exercises a material part of its economic activities in India.
The Company shall primarily invest in equities and equity-related securities
(including preference shares, convertible unsecured loan stock, rights,
warrants and other similar securities). The Company may also, in pursuance of
the investment objective:
• hold publicly traded and privately placed debt instruments
(including bonds, notes and debentures);
• hold cash and cash equivalents including money market
liquid/debt mutual funds;
• hold equity-linked derivative instruments (including options and
futures on indices and individual securities);
• hedge against directional risk using index futures and/or cash;
• hold participation notes; and
• invest in index funds, listed funds and exchange traded funds.
Notwithstanding the above, the Company does not intend to utilise derivatives
or other financial instruments to take short positions, nor to increase the
Company's gearing in excess of the limit set out in the borrowing policy, and
any restrictions set out in this investment policy shall apply equally to
exposure through derivatives.
The Company will invest no more than 15% of Gross Assets in any single
holding or in the securities of any one issuer (calculated at the time of
investment) and will typically invest no more than 40% of Gross Assets in
any single sector (calculated at the time of investment).
The Company is not restricted to investing in the constituent companies of any
benchmark. It is expected that the Company's portfolio will comprise a minimum
of 50 investments.
In order to comply with the UK Listing Rules, the Company will not invest
more than 10% of Gross Assets in other listed closed-ended investment funds,
except that this restriction shall not apply to investments in listed
closed-ended investment funds which themselves have stated investment policies
to invest no more than 15% of their gross assets in other listed closed-ended
investment funds. Additionally, in any event the Company will itself not
invest more than 15% of its Gross Assets in other investment companies or
investment trusts which are listed on the Official List.
The Company does not expect to take controlling interests in investee
companies and will at all times invest and manage the portfolio in a manner
consistent with spreading investment risk and in accordance with the FPI
Regulations and applicable law.
It is expected that the Company's investments will predominantly be exposed to
non-sterling currencies (principally Indian rupees) in terms of their revenues
and profits. The base currency of the Company is Sterling, which creates a
potential currency exposure. Whilst the Company retains the flexibility to do
so, it is expected in the normal course that this potential currency exposure
will not be hedged using any sort of foreign currency transactions, forward
transactions or derivative instruments.
No material change will be made to the investment policy without the
approval of Shareholders by ordinary resolution. As stated in the Chairman's
Statement, the Board has agreed to a final increase from 12% to 15% in the
Company's limit to invest in gross assets (calculated at the time of
investment) in unquoted companies with a Significant Presence in India. An
ordinary resolution has been put forward for approval by shareholders at this
year's AGM.
Borrowing policy
The Company may deploy gearing to seek to enhance long-term capital growth
and for the purposes of capital flexibility and efficient portfolio
management. The Company may be geared through bank borrowings, the use of
derivative instruments that have the effect of gearing the Company's
portfolio, and any such other methods as the Board may determine. Gearing will
not exceed 20% of Net Asset Value at the time of drawdown of the relevant
borrowings or entering into the relevant transaction, as appropriate.
Asset allocation at year end
The breakdown of the top ten holdings and the industrial classification of the
portfolio at the Company's year-end are shown on in the Top Ten Holdings
section of this Annual Report.
Dividend policy
The Board intends to manage the Company's affairs to achieve Shareholder
returns through capital growth rather than income. Therefore, it should not be
expected that the Company will pay an annual dividend.
Regulation 19 of the Investment Trust (Approved Company) (Tax) Regulations
2011 provides that, subject to certain exceptions, an investment trust may not
retain more than 15% of its income in respect of each accounting period.
Accordingly, the Company may declare an annual dividend from time to time for
the purpose of seeking to maintain its status as an investment trust.
Results and dividend
The Company's revenue surplus after tax for the year amounted to £675,000 (30
June 2024: revenue surplus of £308,000). The Company made a capital loss
after tax of £1,728,000 (30 June 2024: capital surplus of £96,345,000).
Therefore, the total loss after tax for the Company was £1,053,000 (30 June
2024: surplus of £96,653,000).
The Board has declared an interim dividend of 0.5p per Ordinary Share in
respect of the year ended 30 June 2025 in accordance with the Company's
Dividend policy as outlined in above paragraph.
Key performance indicators
The Board measures the Company's success in attaining its investment objective
by reference to the following KPIs:
(i) Achievement of NAV and share price growth over the long term
The Board monitors both the NAV and share price performance and compares them
with the MSCI India IMI (in sterling terms). A review of performance is
undertaken at each quarterly Board meeting and the reasons for relative under
and over performance against various comparators is discussed. The Company's
NAV and share price total returns for the year to 30 June 2025 were -0.2% and
-0.9% (30 June 2024: 35.5% and 35.9%) respectively compared to a total return
of -6.6% (30 June 2024: 37.7%) for the MSCI India IMI (in sterling terms).
The Chairman's statement incorporates a review of the highlights during the
year. The Investment Manager's Report highlights investments made during the
year and how performance has been achieved.
(ii) Performance of premium or discount of share price to NAV that is
comparable to its peers
Company's Broker monitors the premium or discount on an ongoing basis and
keeps the Board updated as and when appropriate. At quarterly Board meetings
the Board reviews the premium or discount in the period since the previous
meeting in comparison with other investment trusts within the AIC India/Indian
Subcontinent sector. The Company has a redemption facility through which
Shareholders will be entitled to request the redemption of all or part of
their holding of Ordinary Shares on an annual basis. The Company's shares
traded at a premium of 0.9% on 30 June 2025 (30 June 2024: premium of 1.7%).
(iii) Maintenance of a comparable level of ongoing charges (excluding
performance fee)
The Board receives monthly management accounts which contain an analysis of
expenditure, and these are formally reviewed at quarterly Board meetings. The
Management Engagement Committee formally reviews the fees payable to the
Company's main service providers on an annual basis. The Board reviews the
ongoing charges on a quarterly basis and considers these to be reasonable in
comparison to other investment trusts within the AIC India/Indian Subcontinent
sector.
Based on the Company's average net assets during the year ended 30 June 2025,
the Company's ongoing charges figure calculated in accordance with the AIC
methodology was 0.2% (30 June 2024: 0.5%).
Risk and Risk Management
Principal and emerging risks and uncertainties
The Board is responsible for the management of risks faced by the Company and
delegates the review process of this to the Audit Committee (the "Committee").
The Committee carries out, at least annually, a robust assessment of principal
and emerging risks and uncertainties and monitors the risks on an ongoing
basis. The last review was carried out in October 2025. The Committee has a
dynamic risk register and heat map in place to help identify key risks in the
business and oversee the effectiveness of internal controls and processes,
providing a visual reflection of the Company's identified principal and
emerging risks. The Committee considers both the impact and the probability of
each risk occurring and ensures appropriate controls are in place to reduce
risk to an acceptable level.
The Board has carried out a robust assessment of the principal and emerging
risks facing the Company, including those that would threaten its business
model, future performance, solvency or liquidity. As part of this assessment,
the Committee received updates from the Investment Manager, the Investment
Adviser, the Company Secretary and other service providers. The Committee
considered a number of emerging risks that could potentially impact the
Company's ability to meet its strategic objectives. Risks such as trade
tariffs or armed conflicts were considered and not seen as new principal or
emerging risks but those that exacerbate existing risks and have been
incorporated accordingly in the table below.
The following table provides a summary of the Board's assessment of the
Company's principal risks as well as an explanation of how these are being
managed or mitigated. The "Trend" column on the right highlights at a glance
the Board's assessment of any increases or decreases in risk during the year
after mitigation and management. The arrows show the risks as increased,
decreased or unchanged.
Description Mitigation Trend
Economic, market and geopoltical risks
Changes in general economic and market conditions in India including, for The Investment Adviser has a proven and extensive track record with a focus on unchanged
example, interest rates, cost increase, rates of inflation, industry good corporate governance and continuously monitor the position and report
conditions, competition, tax laws, and other factors could substantially and regularly to the Board on market developments.
adversely affect the Company's prospects.
India is to a degree protected from global economic downdrafts and increases
Weak economic and market conditions in Europe and the US may lead to foreign in world inflation as it is a relatively closed economy and not as vulnerable
disinvestment in Indian equities (the "flight to quality"). to high and rising energy prices as in the past. In addition, India is not
saddled with the debt problems of Europe and the US and the currency should
Political developments globally might materially affect the ability of the therefore remain stable or appreciate against the currencies of its main
Company to achieve its investment objective. Factors such as armed conflicts, trading partners.
sanctions and trade tariffs could impact market volatility and sentiment.
Whilst not immune from disrupted global trade, including those recently caused
by US tariff policies, India may benefit from a change of supply lines from
China in particular.
The Company does not have any direct or indirect exposure to conflict prone
regions in Europe or the Middle East. The Board addresses geopolitical risks
through regular challenge of the Investment Adviser and continues to monitor
these issues as they arise.
Sectoral diversification
Concentration of investments in any one sector may result in greater The Company's investment policy states that no single holding will represent unchanged
volatility in the value of the Company's investments and consequently its NAV more than 15% of the Company's Gross Assets and no more than 40% of Gross
and may materially and adversely affect the performance of the Company and Assets will be invested in any single sector (calculated at the time of
returns to Shareholders. investment).
The investment policy allows a minimum of 50 investments to be held in the
portfolio to assist with diversification. The Investment Adviser seeks to
invest in high quality companies with strong balance sheets and sustainable
business models.
The Board measures the Company's performance for reference purposes against
the MSCI India IMI (in sterling terms). The Board also monitors performance
relative to the Company's peer group over a range of periods, taking into
account the differing investment policies and objectives.
Operational risks
The Board has contractually delegated to external agencies the management of Each of the contracts with the Company's key service providers were entered unchanged
the investment portfolio, the custodial services (which include the into after full and proper consideration of the quality and cost of services
safeguarding of the assets), the registration services and the accounting and offered, including the financial control systems in operation in so far as
company secretarial services. they relate to the affairs of the Company. All of the key service providers
are subject to ongoing oversight by the Management Engagement Committee and
The Company is reliant upon the performance of its key third party service their services are reviewed on an annual basis. The Board monitors key
providers for its executive function. Failure by any service provider to carry personnel risks as part of its oversight of the Investment Manager and the
out its obligations to the Company in accordance with the terms of its Investment Adviser and seeks assurance of appropriate succession planning and
appointment could have a material adverse effect on the operation of the the adoption of a team based approach to mitigate this risk. The Company's key
Company. service providers report periodically to the Board on their control procedures
including those in respect of cyber security risks.
Cyber security risks could lead to breaches of confidentiality, loss of data
records and the inability to make investment decisions. The growing use of
artificial intelligence has increased the risk from cyber crime.
Regulatory risks
Breaches of Section 1158 of the Corporation Tax Act could result in loss of The Company has contracted out relevant services to appropriately qualified unchanged
investment trust status. Loss of investment trust status would lead to the professionals. The Investment Manager and the Company Secretary report on
Company being subject to tax on any gains on the disposal of its investments. regulatory matters to the Board on a quarterly basis. The assessment of
Breaches of the Financial Conduct Authority ("FCA")'s rules applicable to regulatory risks forms part of the Board's risk assessment programme.
listed entities could result in financial penalties or suspension of trading
of the Company's shares on the London Stock Exchange ("LSE"). Breaches of the The Board reviews compliance and internal controls reports provided by its
Companies Act 2006, The Alternative Investment Fund Managers' Directive, service providers, as well as the Company's financial statements and revenue
Accounting Standards, The UK Listing Rules, Disclosure Guidance and forecasts.
Transparency Rules, Prospectus Rules or other regulations with which the
Company is required to comply could result in financial penalties or legal Shareholder documents and announcements, including the Company's published
proceedings against the Company or its Directors. Failure of the Investment half yearly and annual reports and financial statements, are subject to
Manager to meet its regulatory obligations could have adverse consequences on stringent review processes.
the Company.
The Company Secretary presents a quarterly report on changes in the regulatory
environment, including AIC updates, and how changes have been addressed.
Financial risks
The Company's investment activities expose it to a variety of financial risks The investment policy states that while the Company retains the flexibility to unchanged
which include foreign currency risk and interest rate risk. do so, it is expected in the normal course of business that currency exposure
will not be hedged. The Company does not currently have any borrowings,
therefore is not exposed to interest rate risk. The Company's financial risks
are disclosed in note 15 to the financial statements.
ESG and Climate Change
The Company could suffer as a result of increased investor demand for products The Investment Adviser considers various factors when evaluating potential unchanged
which promote ESG investments. investments, including environmental, social and governance ("ESG") and
climate change.
Climate change and climate change policies may lead to additional costs and
risks for portfolio companies. The Investment Adviser has implemented an ESG Policy which ensures integration
of ESG methodology into the investment process, with a strong focus on all
these areas.
The Investment Adviser is a signatory to the UN Principles for Responsible
Investment and integrates these principles into its investment approach. In
addition, the Investment Adviser uses its own proprietary internal framework,
ABLExTM, for ESG risk assessment. The Investment Adviser closely monitors
businesses which have a greater exposure to climate change related risks and
their progress towards a low-carbon transition.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report and Accounts in
accordance with applicable laws and regulations.
The Companies Act 2006 (the "company law") requires the Directors to prepare
financial statements for each financial year. Under that law the Directors
have elected to prepare the Company financial statements in accordance with
UK-adopted international accounting standards.
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 during and as at the end of the year. In preparing
these financial statements, the Directors are required to:
• select suitable accounting policies and then apply them
consistently;
• make judgements and estimates, which are reasonable and prudent;
• present information including accounting policies and additional
disclosures as required to ensure the report is presented in a manner that
provides relevant, reliable, comparable and understandable information;
• state whether applicable UK-adopted international accounting
standards have been followed, subject to any material departures disclosed and
explained in the financial statements; and
• prepare the financial statements on a going concern basis unless
it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and which disclose
with reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the accounts comply with the Companies Act 2006.
They are also responsible for safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The accounts are published on the Company's website at
https://ashokaindiaequity.com, which is maintained by the Investment Manager.
The work carried out by the auditors does not involve consideration of the
maintenance and integrity of this website and, accordingly, the auditors
accept no responsibility for any changes that have occurred to the accounts
since being initially presented on the website. Legislation in the United
Kingdom governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
DIRECTORS' CONFIRMATION STATEMENT
The Directors each confirm to the best of their knowledge that:
(a) the financial statements, prepared in accordance with UK-adopted
international accounting standards give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company as required
by DTR 4.1.12R; and
(b) this Annual Report comprising the Strategic Report and Governance
Statements includes a fair review of the development and performance of the
business and position of the Company, together with a description of the
principal and emerging risks that it faces as required by DTR 4.1.8R and DTR
4.1.9R.
Having taken advice from the Audit Committee, the Directors consider that the
Annual Report and financial statements taken as a whole is fair, balanced and
understandable and provides the information necessary for Shareholders to
assess the Company's performance, business model and strategy.
FOR AND ON BEHALF OF THE BOARD
ANDREW WATKINS
Chairman
8 October 2025
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
For the year ended For the year ended
30 June 2025 30 June 2024
Revenue Capital Total Revenue Capital Total
Note £'000 £'000 £'000 £'000 £'000 £'000
Gains on investments 4 - 27,199 27,199 - 114,999 114,999
Losses on currency movements - (2,204) (2,204) - (3,405) (3,405)
--------------- --------------- --------------- --------------- --------------- ---------------
Net investment gains - 24,995 24,995 - 111,594 111,594
Income 5 3,011 - 3,011 2,196 - 2,196
--------------- --------------- --------------- --------------- --------------- ---------------
Total income 3,011 24,995 28,006 2,196 111,594 113,790
Performance fees 7 (957) (14,997) (15,954) (139) 302 163
Operating expenses 8 (1,007) - (1,007) (1,533) - (1,533)
--------------- --------------- --------------- --------------- --------------- ---------------
Operating profit before taxation 1,047 9,998 11,045 524 111,896 112,420
Taxation 9 (372) (11,726) (12,098) (216) (15,551) (15,767)
--------------- --------------- --------------- --------------- --------------- ---------------
(Loss)/profit for the year 675 (1,728) (1,053) 308 96,345 96,653
--------------- --------------- --------------- --------------- --------------- ---------------
Earnings per Ordinary Share 10 0.41p (1.05)p (0.64)p 0.25p 76.99p 77.24p
========= ========= ========= ========= ========= =========
There is no other comprehensive income and therefore the 'Profit/(loss) for
the period' is the total comprehensive income for the year ended 30 June 2025.
The total column of the above statement is the profit and loss account of the
Company. The supplementary revenue and capital columns, including the earnings
per Ordinary Shares, are prepared under guidance from the Association of
Investment Companies.
All revenue and capital items in the above statement derive from continuing
operations.
The notes below form an integral part of these financial statements.
STATEMENT OF FINANCIAL POSITION
As at As at
30 June 30 June
2025 2024
Note £'000 £'000
Non-current assets
Investments held at fair value through profit or loss 4 482,867 451,026
--------------- ---------------
Current assets
Cash and cash equivalents 27,374 5,677
Dividend receivable 201 307
Other receivables 110 156
--------------- ---------------
27,685 6,140
--------------- ---------------
Total assets 510,552 457,166
========= =========
Current liabilities
Purchases for future settlement - (1,534)
Other payables 6 (349) (735)
Performance fee payable 7 - (2,301)
Non-current liabilities
Performance fee payable 7 (15,954) -
Capital gains tax provision 9 (18,094) (17,157)
--------------- ---------------
Total liabilities (34,397) (21,727)
========= =========
Net assets 476,155 435,439
========= =========
Equity
Share capital 12 1,720 1,572
Share premium account 248,415 206,794
Special distributable reserve 13 44,276 44,276
Capital reserve 180,753 182,481
Revenue reserve 991 316
--------------- ---------------
Total equity 476,155 435,439
========= =========
Net asset value per Ordinary Share 14 278.9p 279.3p
========= =========
Approved by the Board of Directors on 8 October 2025 and signed on its behalf
by:
ANDREW WATKINS
Director
Ashoka India Equity Investment Trust plc incorporated in England and Wales
with registered number 11356069.
The notes below form an integral part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2025
Share Special
Share premium distributable Capital Revenue
Capital account reserve reserve reserve Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Opening balance as at 1,572 206,794 44,276 182,481 316 435,439
1 July 2024
Profit /(loss) for the year - - - (1,728) 675 (1,053)
Issue of Ordinary Shares 12 148 42,070 - - - 42,218
Share issue costs - (449) - - - (449)
--------------- --------------- --------------- --------------- --------------- ---------------
Closing balance as at
30 June 2025 1,720 248,415 44,276 180,753 991 476,155
========= ========= ========= ========= ========= =========
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2024
Share Special
Share premium distributable Capital Revenue
Capital account reserve reserve reserve Total
Notes £'000 £'000 £'000 £'000 £'000 £'000
Opening balance as at 1,128 101,003 44,276 86,136 8 232,551
1 July 2023
Profit for the year - - - 96,345 308 96,653
Issue of Ordinary Shares 12 431 107,077 - - - 107,508
Share issue costs - (1,286) - - - (1,286)
Management Shares 12 13 - - - - 13
--------------- --------------- --------------- --------------- --------------- ---------------
Closing balance as at
30 June 2024 1,572 206,794 44,276 182,481 316 435,439
========= ========= ========= ========= ========= =========
The Company's distributable reserves consist of the special distributable
reserve, revenue reserve and capital reserve attributable to realised profit.
The notes below form an integral part of these financial statements.
STATEMENT OF CASH FLOWS
For the year For the year
ended ended
30 June 2025 30 June 2024
Note £'000 £'000
Cash flows from operating activities
Operating profit before taxation 11,045 112,420
Taxation paid (11,161) (6,323)
Decrease/(increase) in receivables 152 (9)
Increase in payables 13,267 52
Adjustment for gains on investments 4 (27,161) (114,999)
--------------- ---------------
Net cash flow used in operating activities (13,858) (8,859)
--------------- ---------------
Cash flows from investing activities
Purchase of investments (264,317) (276,302)
Sale of investments 258,103 178,114
--------------- ---------------
Net cash flow used in investing activities (6,214) (98,188)
--------------- ---------------
Cash flows from financing activities
Proceeds from issue of Ordinary Shares 12 42,218 107,508
Proceeds from Management Shares issued - 13
Share issue costs (449) (1,286)
--------------- ---------------
Net cash flow from financing activities 41,769 106,235
--------------- ---------------
Increase/(decrease) in cash and cash equivalents 21,697 (812)
--------------- ---------------
Cash and cash equivalents at start of year 5,677 6,489
--------------- ---------------
Cash and cash equivalents at end of year 27,374 5,677
========= =========
The notes below form an integral part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. REPORTING ENTITY
Ashoka India Equity Investment Trust plc is a closed-ended investment company,
registered in England and Wales on 11 May 2018. The Company's registered
office is 4th Floor 46-48 James Street, London, England, W1U 1EZ. Business
operations commenced on 6 July 2018 when the Company's Ordinary Shares were
admitted to trading on the LSE. The financial statements of the Company are
presented for the year from 1 July 2024 to 30 June 2025.
The Company primarily invests in securities listed on any stock exchange in
India and can invest in the securities of companies with a significant
presence in India that are listed on stock exchanges outside India.
2. BASIS OF PREPARATION
Statement of compliance
These financial statements have been prepared in accordance with applicable
law and the UK-adopted international accounting standards. The financial
statements have been prepared on a historical cost basis, except for the
measurement at fair value of investments.
When presentational guidance set out in the Statement of Recommended Practice
("SORP") for Investment Companies issued by the Association of Investment
Companies ("the AIC") in July 2022 is consistent with the requirements of
IFRS, the Directors have sought to prepare the financial statements on a basis
compliant with the recommendations of the SORP.
In preparing these Financial Statements the Directors have considered the
impact of climate change risk as a Principal and emerging risk. In line with
the UK-adopted international accounting standards, investments are valued at
fair value, being primarily quoted prices for investments in active markets at
the balance sheet date, and therefore reflect market participant's view of
climate change risk. Unlisted investments, valued by reference to appropriate
valuation techniques (see note 3), similarly reflect market participants' view
of climate change risk.
Going concern
The Directors have concluded that there is a reasonable expectation that the
Company will have adequate liquidity and cash balances to meet its
liabilities, including those from the Company's annual redemption facility, as
they fall due and continue in operational existence for the foreseeable future
and continue as a going concern for the period to 31 December 2026. As such
the Directors have adopted the going concern basis in preparing the financial
statements.
Use of estimates and judgements
The preparation of the financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates. The resulting
accounting estimates and assumptions will, by definition, seldom equal the
related actual results.
Estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period in which the
estimates are revised and in any future periods affected.
The Indian capital gains tax provision represents an estimate of the amount of
tax payable by the Company. Tax amounts payable may differ from this provision
depending on when the Company disposes of investments. The current provision
for Indian capital gains tax is calculated based on the long-term or
short-term nature of the investments and the applicable tax rate at the year
end. Currently, the short-term tax rate is 20% and the long-term tax rate is
12.5% (30 June 2024: 15% and 10% respectively). The estimated tax charge is
subject to regular review including a consideration of the likely period of
ownership, tax rates and market valuation movements.
As disclosed in the statement of financial position, the Company made a
capital gains tax provision as at 30 June 2025 of £18,094,000 (30 June 2024:
£17,157,000) in respect of unrealised gains on investments held.
The key estimate in the financial statements is the determination of the fair
value of the unlisted investments by the Investment Manager for consideration
by the Directors. This estimate is key as it significantly impacts the
valuation of the unlisted investments at the year end. The fair valuation
process involves estimation using subjective inputs that are unobservable (for
which market data is unavailable). The key inputs considered in the valuation
are described in note 15.
Fair value estimates are cross-checked to alternative estimation methods where
possible to improve the robustness of the estimates. The risk of an over or
under estimation of fair values is greater when methodologies are applied
using more subjective inputs.
Basis of measurement
The financial statements have been prepared on the historical cost basis
except for financial instruments at fair value through profit or loss, which
are measured at fair value.
The Company's investments are denominated in Indian rupees. However, the
Company's shares are issued in sterling and the majority of its investors are
UK based. The Company's expenses and dividends are also paid in sterling.
Therefore, the financial statements are presented in sterling, which is the
Company's functional currency. All financial information has been rounded to
the nearest thousand pounds.
3. ACCOUNTING POLICIES
(a) Investments
Listed investments
Changes in the fair value of investments held at fair value through profit or
loss and gains or losses on disposal are included in the capital column of the
Statement of Comprehensive Income within "Gains on investments".
Investments are derecognised on the trade date of their disposal, which is the
point where the Company transfers substantially all the risks and rewards of
the ownership of the financial asset. Any dividend declared between the
disposal trade and settlement date is not attributable to the Company.
Transaction costs directly attributable to the acquisition of investments at
fair value through profit or loss are recognised under gains/(losses) on
investments.
Unlisted investments
The Investment Manager's unlisted investment valuation policy applies
techniques consistent with the IPEV Guidelines.
The techniques applied are predominantly market-based approaches or discounted
cash flows where appropriate forecasts can be done. The market-based
approaches available under IPEV Guidelines are set out below and are followed
by an explanation of how they are applied to the Company's unlisted portfolio:
- Multiples; and
- Industry Valuation Benchmarks.
The nature of the unlisted portfolio currently will influence the valuation
technique applied. The valuation approach recognises that, as stated in the
IPEV Guidelines, the price of a recent investment, if resulting from an
orderly transaction, generally represents fair value as at the transaction
date and may be an appropriate starting point for estimating fair value at
subsequent measurement dates. However, consideration is given to the facts and
circumstances as at the subsequent measurement date, including changes in the
market or performance of the investee company. Milestone analysis is used
where appropriate to incorporate the operational progress of the investee
company into the valuation. Additionally, the background to the transaction
must be considered. As a result, various Multiples-based techniques are
employed to assess the valuations particularly in those companies with
established revenues. Discounted cash flows are used where appropriate. An
absence of relevant industry peers may preclude the application of the
industry valuation benchmarks technique. All valuations are cross-checked for
reasonableness by employing relevant alternative techniques.
(b) Foreign currency
Transactions in currencies other than pounds sterling are recorded at the
rates of exchange prevailing on the dates of the transactions. At the date of
each Statement of Financial Position, monetary assets and liabilities that are
denominated in foreign currencies are retranslated at the rates prevailing on
that date. Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at
the date when the fair value was determined. Gains and losses arising on
retranslation are included in the Statement of Comprehensive Income within the
revenue or capital column depending on the nature of the underlying item.
Foreign exchange movements on investments are included in the Statement of
Comprehensive Income within "Losses on currency movements".
(c) Income from investments
Dividend income from shares is accounted for on the basis of ex-dividend
dates. Overseas income is grossed up at the appropriate rate of tax.
Special dividends are assessed on their individual merits and may be credited
to the Statement of Comprehensive Income as a capital item if considered to be
closely linked to reconstructions of the investee company or other capital
transactions. All other investment income is credited to the Statement of
Comprehensive Income as a revenue item.
Interest on fixed income instruments is accounted on an accrual basis.
(d) Capital reserves
Profits or losses arising on the sale of investments and changes in fair value
arising upon the revaluation of investments are credited or charged to the
capital column of the Statement of Comprehensive Income and allocated to the
Capital reserve.
The Company's redemption facility is subject to approval by the Board and as
such the redemption facility does not represent a contractual obligation on
the Company and the shares are accordingly classified as equity.
(e) Expenses
All expenses are accounted for on an accrual basis. Expenses are recognised
through the Statement of Comprehensive Income as revenue items. Performance
fees payable are allocated in accordance with the AIC guidance where that part
of the Performance fee directly attributable to the revenue performance of the
Company is allocated to revenue and shown in the revenue column of the
Statement of Comprehensive Income, and the part that is directly attributable
to the capital performance of the Company's investments is allocated to
capital and shown in the capital column of the Statement of Comprehensive
Income. For further details on the performance fee, see note 7.
No other management fees are payable by the Company.
(f) Cash and cash equivalents
Cash comprises cash at hand and demand deposits. For purposes of the statement
of cash flows, cash equivalents, including bank overdrafts, are short-term,
highly liquid investments that are readily convertible to known amounts of
cash, are subject to insignificant risks of changes in value, and are held for
the purpose of meeting short-term cash commitments rather than for investment
or other purposes.
(g) Taxation
Irrecoverable taxation on dividends is recognised on an accrual's basis in the
Statement of Comprehensive Income. Indian tax rates for dividends with
ex-dividend dates post 1 April 2020 are subject to 20% withholding tax. See
note 9 for further details.
The tax charges on Indian capital gains taxes are shown in the Statement of
Comprehensive Income, recognised on an accrual basis. The Company is not
subject to UK capital gains tax.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit and is accounted for using the statement of financial position
liability method. Deferred tax liabilities are recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which
deductible temporary differences can be utilised. Investment trusts which have
approval as such under Section 1158 of the Corporation Tax Act 2010 are not
liable for taxation on capital gains.
(h) Adoption of new IFRS standards
A number of new standards, amendments to standards and interpretations are
effective for the annual periods beginning on or after 1 January 2024. None of
these have a material impact on the measurement of the amounts recognised in
the financial statements of the Company.
i) New standards and amendments issued but not yet effective
The relevant new and amended standards and interpretations that are issued,
but not yet effective, up to the date of issuance of the Company's financial
statements are disclosed below. These standards are not expected to have a
material impact on the entity in future reporting periods and on foreseeable
future transactions.
Amendments to IAS 21: Lack of Exchangeability
In January 2024, the IASB issued amendments to IAS 21 to provide guidance on
determining the exchange rate when there is a lack of exchangeability. These
amendments are effective for annual reporting periods beginning on or after 1
January 2025.
Amendments to IFRS 9 and IFRS 7: Contracts Referencing Nature-dependent
Electricity
In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7 to provide
guidance on the classification and measurement of contracts referencing
nature-dependent electricity. These amendments are effective for annual
reporting periods beginning on or after 1 January 2026.
IFRS 18 Presentation and Disclosure in Financial Statements
In April 2024, the IASB published IFRS 18, including new requirements for
presentation and disclosure in the financial statements with a focus on the
income statement. IFRS 18 will not impact the recognition or measurement of
items in the financial statements, but it might change what an entity reports
as its operating profit or loss. IFRS 18 will be effective for annual
reporting periods on or after 1 January 2027, with earlier application
permitted.
IFRS 19: Subsidiaries without Public Accountability - Disclosures
IFRS 19: Subsidiaries without Public Accountability - Disclosures In April
2024, the IASB issued IFRS 19, which provides disclosure requirements for
subsidiaries without public accountability. IFRS 19 is effective for annual
reporting periods beginning on or after 1 January 2027, with earlier
application permitted.
Amendments to IFRS 9 and IFRS 7- Amendments to the Classification and
Measurement of Financial Instruments
In May 2024, the IASB published Amendments to IFRS 9 and IFRS 7 - Amendments
to the Classification and Measurement of Financial instruments. The Amendments
will be effective for annual reporting periods beginning on or after 1 January
2026, with earlier application permitted.
4. INVESTMENTS HELD AT FAIR VALUE THROUGH PROFIT OR LOSS
(a) Investments held at fair value through profit or loss
As at As at
30 June 2025 30 June 2024
£'000 £'000
Quoted investments in India 450,591 448,412
Unquoted investments in India 32,276 2,614
--------------- ---------------
Closing valuation 482,867 451,026
========= =========
(b) Movements in valuation
As at As at
30 June 2025 30 June 2024
£'000 £'000
Opening valuation 451,026 236,764
Opening unrealised gains on investments (121,134) (56,724)
--------------- ---------------
Opening book cost 329,892 180,040
Additions, at cost 262,282 276,533
Disposals, at cost (201,150) (126,681)
--------------- ---------------
Closing book cost 391,024 329,892
Revaluation of investments 91,843 121,134
--------------- ---------------
Closing valuation 482,867 451,026
========= =========
Transaction costs on investment purchases for the year ended 30 June 2025
amounted to £501,000 (30 June 2024: £520,000) and on investment sales for
the financial year to 30 June 2025 amounted to £384,000 (30 June 2024:
£347,000). As at year end £32.7 million (30 June 2024: £27.2 million) of
investments were subject to lock in periods.
(c) Gains/(losses) on investments
For the For the
Year ended Year ended
30 June 2025 30 June 2024
£'000 £'000
Realised gains on disposal of investments 57,337 51,433
Transaction costs (885) (867)
Movement in unrealised gains on investments held (29,291) 64,410
Movement in unrealised gains on futures held 38 23
--------------- ---------------
Total gains on investments 27,199 114,999
========= =========
Under IFRS 13 'Fair Value Measurement', an entity is required to classify
investments using a fair value hierarchy that reflects the significance of the
inputs used in making the measurement decision.
The following shows the analysis of financial assets recognised at fair value
based on:
Level 1
Quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date.
Level 2
Inputs other than quoted prices included within level 1 that are observable
for the asset or liability, either directly or indirectly.
Level 3
Unobservable inputs for the asset or liability.
The classification of the Company's investments held at fair value is detailed
in the table below:
As at 30 June 2025 As at 30 June 2024
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Investments at fair value through
profit and loss
- Quoted investments in India 450,591 - - 450,591 448,412 - - 448,412
- Unquoted investments in India - - 32,276 32,276 - - 2,614 2,614
--------------- --------------- --------------- --------------- --------------- --------------- --------------- ---------------
450,591 - 32,276 482,867 448,412 - 2,614 451,026
========= ========= ========= ========= ========= ========= ========= =========
The movement on the Level 3 unquoted investments during the period is shown
below:
As at As at
30 June 2025 30 June 2024
£'000 £'000
Opening balance 2,614 3,461
Additions during the year 29,087 -
Disposals during the year - (1,569)
Conversion from level 3 to level 1 investments - -
Total gains for the year recognised in profit or loss 575 722
Foreign exchange movements - -
--------------- ---------------
Closing balance 32,276 2,614
========= =========
As at year end, the Company had six unquoted investments; Veeda Clinical
Research Ltd 680,790 shares, Simpolo Vitrified Private Ltd 156,000 shares,
Ellenbarrie Industrial Gases Ltd 1,426,266 shares, Manjushree Technopack Ltd
9,285,297 shares, Sudeep Pharma Ltd 622,543 shares and Sambhv Steel Tubes Ltd
2,056,600 shares .
Unquoted investments are valued by the Investment Manager in accordance with
the International Private Equity and Venture Capital Valuation Guidelines 2022
("IPEV") guidelines which are consistent with IFRS. The Investment Manager
applies techniques consistent with the IPEV.
Financial assets and liabilities are held at fair value in the financial
statements with the exception of short-term assets and liabilities where their
carrying value approximates to fair value.
5. INCOME
For the For the
year ended year ended
30 June 2025 30 June 2024
£'000 £'000
Income from investments:
Overseas dividends 2,299 1,951
Overseas income - REIT 662 239
Other income:
Bank interest Income 50 6
--------------- ---------------
Total income 3,011 2,196
========= =========
6. OTHER PAYABLES
As at As at
30 June 2025 30 June 2024
£'000 £'000
Accrued expenses 349 735
--------------- ---------------
Total other payables 349 735
========= =========
7. PERFORMANCE FEE
For the year ended 30 June 2025 For the year ended 30 June 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Performance fees expenses 957 14,997 15,954 139 (302) (163)
========= ========= ========= ========= ========= =========
The Investment Manager does not receive a fixed management fee in respect of
its portfolio management services to the Company. The Investment Manager will
become entitled to a performance fee subject to the Company delivering excess
returns versus the MSCI India IMI Index (in sterling terms) in the medium
term. The performance fee is measured over periods of three years (Performance
Period) with this Performance Period ending on 30 June 2027. The performance
fee in any Performance Period shall be capped at 12% of the time weighted
average adjusted net assets during the relevant Performance Period. The
Investment Management Agreement was updated during the year to clarify that
under its terms, the Investment Manager has the optionality to receive the
performance fee in cash. However, the Investment Manager has given written
confirmation of their intention not to exercise this election and to receive
any performance fee in Ordinary Shares.
The performance fee is calculated at a rate of 30% of the excess returns
between adjusted NAV per share on the last day of the performance period and
the MSCI India IMI Index (in sterling terms) over the performance period,
adjusted for the weighted average number of Ordinary Shares in issue during
the performance period. The Performance Fee in respect of each Performance
Period will be paid at the end of the three year period.
The performance fee is allocated in accordance with the AIC guidance where
that part of the Performance fee directly attributable to the revenue
performance of the Company (6%) is allocated to revenue and shown in the
revenue column of the Statement of Comprehensive Income, and the part that is
directly attributable to the capital performance of the Company's investments
(94%) is allocated to capital and shown in the capital column of the Statement
of Comprehensive Income.
As at 30 June 2025, there was a £15,954,000 provision for the performance fee
liability to the Investment Manager for the one year performance period (30
June 2024: £2,301,000 for the previous full three year period).
8. OPERATING EXPENSES
For the For the
year ended year ended
30 June 2025 30 June 2024
£'000 £'000
Administration & secretarial fees 298 232
Auditor's remuneration - Statutory audit fee* 75 60
Broker fees 41 40
Custody services 95 48
Directors' fees 152 128
Tax compliance and advice 61 119
Marketing and public relations 58 497
Registrar fees 26 37
Legal Fees 59 133
Regulatory fees 35 18
Other expenses** 107 221
--------------- ---------------
Total 1,007 1,533
========= =========
* Auditor's remuneration excludes VAT.
** Other expenses include Employers National Insurance
Contribution, LSE, KID fees, Distribution fees, other license fees, bank
charges and other miscellaneous fees.
9. TAXATION
(a) Analysis of charge in the year:
For the year ended 30 June 2025 For the year ended 30 June 2024
Revenue Capital Total Revenue Capital Total
£'000 £'000 £'000 £'000 £'000 £'000
Capital gains tax provision - 937 937 - 9,444 9,444
Capital gains expense - 10,789 10,789 - 6,107 6,107
Indian withholding tax 372 - 372 216 - 216
--------------- --------------- --------------- --------------- --------------- ---------------
Total tax charge for the year 372 11,726 12,098 216 15,551 15,767
========= ========= ========= ========= ========= =========
The Company is liable to Indian capital gains tax under Section 115 AD of the
Indian Income Tax Act 1961. A tax provision on Indian capital gains is
calculated based on the long term (securities held more than one year) or
short term (securities held less than one year) nature of the investments and
the applicable tax rate at the period end. The short-term tax rates are 20%
and the long term tax rates are 12.5% (30 June 2024: 15% and 10%
respectively).
(b) Factors affecting the tax charge for the year:
The standard UK corporation tax rate as at the period is 25% (30 June 2024:
25%). The tax charge differs from the charge resulting from applying the
standard rate of UK corporation tax for an investment trust company. The
differences are explained below:
For the For the
Year ended Year ended
30 June 2025 30 June 2024
£'000 £'000
Operating profit before taxation 11,045 112,420
UK Corporation tax at 25% (2024: 25%) 2,761 28,105
Effects of:
Indian capital gains tax charge 11,726 15,551
Gains on investments not taxable (6,249) (27,899)
Overseas dividends not taxable (740) (548)
Other income not taxable (12) (2)
Unutilised management expenses 4,240 344
Indian withholding tax 372 216
--------------- ---------------
Total tax charge for the year 12,098 15,767
========= =========
The Company is not liable to UK Corporation tax on capital gains due to its
status as an investment trust. The Company has an unrecognised deferred UK
Corporation tax asset of £8,034,000 (30 June 2024: £3,806,000) based on the
UK corporation tax rate of 25% (2024: 25%). This asset has accumulated because
deductible expenses exceeded taxable income for the year ended 30 June 2025.
No asset has been recognised in the accounts because, given the composition of
the Company's portfolio, it is unlikely that this asset will be utilised in
the foreseeable future.
(c) Movements on the capital gains tax provision for the year
The capital gains tax provision represents an estimate of the amount of tax
provisionally payable by the Company on direct investment in Indian equities.
It is calculated based on the long term or short term nature of the
investments and the unrealised gain thereon at the applicable tax rate at the
year end. As of 30 June 2025, the Company made a capital gains tax provision
of £18,094,000 (30 June 2024: £17,157,000) in respect of unrealised gains on
investments held.
10. EARNINGS PER ORDINARY SHARE
For the year ended 30 June 2025 For the year ended 30 June 2024
Revenue Capital Total Revenue Capital Total
(Loss)/Profit for the year (£'000) 675 (1,728) (1,053) 308 96,345 96,653
Earnings per Ordinary Share 0.41p (1.05)p (0.64)p 0.25p 76.99p 77.24p
========= ========= ========= ========= ========= =========
Earnings per Ordinary Share is based on the loss for the year of £1,053,000
(30 June 2024: profit £96,653,000) attributable to the weighted average
number of Ordinary Shares in issue during the year ended 30 June 2025 of
164,187,886 (30 June 2024: 125,146,964).
11. DIVIDEND
(a) Dividends paid during the year
The Company's objective is to provide shareholder returns through capital
growth with income being a secondary consideration. It should not be expected
that the Company will pay a significant annual dividend, but the Board intends
to declare such annual dividends as are necessary to maintain the Company's UK
investment trust status. The Board has declared a dividend of 0.5p per
Ordinary Share in respect of the year ended 30 June 2025 in accordance with
the Company's Dividend policy. No dividends were paid during the year to 30
June 2025 (2024: nil).
(b) Dividends payable in respect of the financial year, which is the basis on
which the requirements of s1158-1159 of the Corporation Tax Act 2010 are
considered
For the year ended For the year ended
30 June 2025 30 June 2024
Rate £'000 Rate £'000
Proposed dividend for the year 0.5p 857 - -
========== ========== ========== ==========
12. SHARE CAPITAL
As at 30 June 2025 As at 30 June 2024
No. of shares £'000 No. of shares £'000
Allotted, issued and fully paid:
Redeemable Ordinary Shares of 1p each ('Ordinary Shares') 170,741,893 1,707 155,892,397 1,559
---------------- ---------------- ---------------- ----------------
Non-Redeemable Shares of £1.00 each ('Management Shares') 50,000 13 50,000 13
---------------- ---------------- ---------------- ----------------
Total 170,791,893 1,720 155,942,397 1,572
========== ========== ========== ==========
Ordinary Shares
On incorporation, the issued share capital of the Company was 1 Ordinary Share
of £0.01.
During the year ended 30 June 2025, 14,849,496 Ordinary Shares (30 June 2024:
43,084,585) were issued, with aggregate gross proceeds of £42,218,000 (30
June 2024: £107,508,000).
Since the year end, a further 750,000 Ordinary Shares have been issued, with
aggregate gross proceeds of £2,143,950. As at the date of this report, the
total number of Ordinary Shares in issue is 171, 491, 893 (30 June 2024:
155,892,397).
The Ordinary Shares have attached to them full voting, dividend and capital
distribution rights. They confer rights of redemption. The Company's special
distributable reserve may also be used for share repurchases, both into
treasury or for cancellation.
Management shares
In addition to the above, on incorporation the Company issued 50,000
Management Shares of nominal value of £1.00 each.
The holder of the Management Shares undertook to pay or procure payment of
one quarter of the nominal value of each Management share on or before the
fifth anniversary of the date of issue of the Management Shares. During the
year, the Management Shares were transferred to WhiteOak Capital Management
(UK) Limited having previously been held by an associate of the Investment
Manager.
The Management Shares do not carry a right to attend or vote at general
meetings of the Company unless no other shares are in issue at that time. The
Management Shares have been treated as equity in accordance with IFRS.
13. SPECIAL DISTRIBUTABLE RESERVE
As indicated in the Company's prospectus dated 19 June 2018, following
admission of the Company's Ordinary Shares to trading on the LSE, the
Directors applied to the Court and obtained a judgement on 4 December 2018 to
cancel the amount standing to the credit of the share premium account of the
Company. The amount of the share premium account cancelled and credited to a
special distributable reserve was £44,275,898. This reserve may also be used
to fund dividend/distribution payments.
14. NET ASSETS PER ORDINARY SHARE
Net assets per ordinary share as at 30 June 2025 of 278.9p (30 June 2024:
279.3p) is calculated based on £476,155,000 (30 June 2024: £435,439,000) of
net assets of the Company attributable to the 170,741,893 (30 June 2024:
155,892,397) Ordinary Shares in issue as at 30 June 2025.
15. FINANCIAL INSTRUMENTS AND CAPITAL DISCLOSURES
(i) Market risks
The Company is subject to a number of market risks in relation to economic
conditions in India. Further details on these risks and the management of
these risks are included in the Strategic report.
The Company's financial assets and liabilities comprised:
As at 30 June 2025 As at 30 June 2024
Interest Non-interest Interest Non-interest
bearing bearing Total bearing bearing Total
£'000 £'000 £'000 £'000 £'000 £'000
Investments - 482,867 482,867 - 451,026 451,026
--------------- --------------- --------------- --------------- --------------- ---------------
Total investment - 482,867 482,867 - 451,026 451,026
--------------- --------------- --------------- --------------- --------------- ---------------
Cash and cash equivalent 762 26,612 27,374 1,032 4,645 5,677
Short-term debtors - 311 311 - 463 463
Short-term creditors - (349) (349) - (4,570) (4,570)
Long-term creditors - (34,048) (34,048) - (17,157) (17,157)
--------------- --------------- --------------- --------------- --------------- ---------------
Other net assets 762 (7,474) (6,712) 1,032 (16,619) (15,587)
--------------- --------------- --------------- --------------- --------------- ---------------
Total financial assets and liabilities 762 476,155 476,155 1,032 434,407 435,439
========= ========= ========= ========= ========= =========
Market price risk sensitivity
The effect on the portfolio of a 10% increase or decrease in market prices
would have resulted in an increase or decrease of £48,286,700 (30 June 2024:
£45,102,600) in the investments held at fair value through profit or loss at
the period end date, which is equivalent to 10.1% (30 June 2024: 10.4%) of the
net assets attributable to equity holders. This analysis assumes that all
other variables remain constant.
The Company's portfolio of unlisted level 3 investments is not necessarily
affected by market performance, however the valuations may be affected by the
performance of the underlying securities in line with the valuation criteria
in note 15.
The unlisted securities sensitivity analysis recognises that the valuation
methodologies employed involve different levels of subjectivity in their
inputs. The valuations as at 30 June 2025 were primarily driven by the
weighted average of Discounted Cash Flow (DCF), Market movement and Index and
Peer Group valuations.
A. Manjushree Technopack
Valuation Fair Key variable Variable Price Negative
Technique Value Input Input impact impact
of investments sensitivity
£000 (%) £000 £000
Average of 13,438 For purposes of the sensitivity Discount rate used in +4,664 -1,555
1) Discounted Cash table it has been determined that Discounted cash flow
Flow discounted cash flow is the
2) Market Movement appropriate method to illustrate a
based on Index and sensitivity for.
2) Market movement
of peers
B. Simpolo Vitrified Private
Valuation Fair Key variable Variable Price Negative
Technique Value Input Input impact impact
of investments sensitivity
£000 (%) £000 £000
Average of 6,337 For purposes of the sensitivity Discount rate used in +2,555 -810
1) Discounted Cash table it has been determined that Discounted cash flow
Flow discounted cash flow is the
2) Market Movement appropriate method to illustrate a
based on Index and sensitivity for.
2) Market movement
of peers
C. Ellenbarrie Industrial Gases
Valuation Fair Key variable Variable Price Negative
Technique Value Input Input impact impact
of investments sensitivity
£000 (%) £000 £000
Average of 5,245 For purposes of the sensitivity Discount rate used in +448 -419
1) Discounted Cash table it has been determined that Discounted cash flow
Flow discounted cash flow is the
2) Market Movement appropriate method to illustrate a
based on Index and sensitivity for.
2) Market movement
of peers
D. Sudeep Pharma
Valuation Fair Key variable Variable Price Negative
Technique Value Input Input impact impact
of investments sensitivity
£000 (%) £000 £000
Cost price of last 2,980 Price of latest transaction n/a n/a n/a
transaction deemed fair value
E. Veeda Clinical Research
Valuation Fair Key variable Variable Price Negative
Technique Value Input Input impact impact
of investments sensitivity
£000 (%) £000 £000
Average of 2,811 For purposes of the sensitivity Discount rate used in +448 -191
1) Discounted Cash table it has been determined that Discounted cash flow
Flow discounted cash flow is the
2) Market Movement appropriate method to illustrate a
based on Index and sensitivity for.
2) Market movement
of peers
F. Sambhv Steel Tubes
Valuation Fair Key variable Variable Price Negative
Technique Value Input Input impact impact
of investments sensitivity
£000 (%) £000 £000
Initial Public Offering 1,436 Confirmed price of IPO on n/a n/a n/a
price 2 July 2025
Key variable inputs
The variable inputs applicable to each broad category of valuation basis will
vary dependent on the particular circumstances of each unlisted company
valuation. An explanation of each of the key variable inputs is provided below
and includes an indication of the range in value for each input, where
relevant.
Expected future cash flows and equity discount rate/WACC
The expected future cash flows are calculated using the aggregate future
operating revenue based on growth in existing and new products resulting from
the investment's ongoing capex and expansion plans. Equity discount rate/WACC
is calculated at 15.8% (2024: 16.7%).
Selection of Index used
The selection of index is assessed based on the market comparable index to the
Company. MSCI India IMI (in sterling terms) and S&P BSE 500 were the
indices used as the basis for the market movement-based valuation.
Selection of comparable companies
The selection of comparable companies is assessed individually for each
investment at the point of investment, and the relevance of the comparable
companies is continually evaluated at each valuation. The key criteria used in
selecting appropriate comparable companies are the industry sector in which
they operate and the geography of the company's operations.
Application of valuation basis
Each investment is assessed and the valuation basis applied will vary
depending on the circumstances of each investment. For those investments where
a trading multiples approach can be taken, the methodology will factor in
revenue, earnings or net assets as appropriate for the investment. Discounted
cash flows will be considered where appropriate forecasts are available. The
valuation will also consider any recent transactions, where appropriate.
Estimated sustainable earnings and cash flows
The selection of sustainable revenue or earnings and cash flows will depend on
whether the company is sustainably profitable or not, and where it is not then
sustainable revenues will be used in the valuation. The valuation approach
will typically assess companies based on the last 12 months of revenue or
earnings, as they are the most recent available and therefore viewed as the
most reliable. Where a company has reliably forecasted earnings previously or
there is a change in circumstance at the business which will impact earnings
going forward, then forward estimated revenue or earnings may be used instead.
Application of liquidity discount
A liquidity discount may be applied either through the calibration of a
valuation against the most recent transaction, or by application of a specific
discount.
(ii) Liquidity risks
There is a risk that the Company's holdings may not be able to be realised at
reasonable prices in a reasonable timeframe. Portfolio by maturity at the year
end are shown below:
30 June 2025 30 June 2024
% %
Within one to seven days 85.0 87.3
Between seven days to one month 8.3 8.3
Between one and three months 0.4 1.3
Greater than three months 6.3 3.1
--------------- ---------------
Total 100.0 100.0
========= =========
Management of liquidity risks
The Company has a diversified portfolio. The liquidity of the portfolio is
reviewed regularly by the Investment Manager and the Board.
(iii) Currency risks
Although the Company's performance is measured in sterling, a high proportion
of the Company's assets are denominated in Indian rupees. Change in the
exchange rate between sterling and Indian rupees may lead to a depreciation of
the value of the Company's assets as expressed in sterling and may reduce the
returns to the Company from its investments.
Currency sensitivity
The below table shows the foreign currency profile of the Company.
Foreign currency risk profile
As at 30 June 2025 As at 30 June 2024
Net Total Net Total
Investment monetary currency Investment monetary currency
exposure exposure exposure exposure exposure exposure
Investments £'000 £'000 £'000 £'000 £'000 £'000
Indian Rupees 467,025 (4,638) 462,387 434,256 2,413 436,669
US Dollar 15,843 803 16,646 16,770 1,154 17,924
--------------- --------------- --------------- --------------- --------------- ---------------
Total investment 482,868 (3,835) 479,033 451,026 3,567 454,593
========= ========= ========= ========= ========= =========
Based on the financial assets and liabilities at 30 June 2025 and all other
variables remaining constant, if sterling had weakened/strengthened against
the Indian rupee by 10%, the impact on the Company's net assets at 30 June
2025 would have been an increase/(decrease) in fair value as follows:
30 June 2025 30 June 2024
Increase in Decrease in Increase in Decrease in
Fair Value Fair Value Fair Value Fair Value
£'000 £'000 £'000 £'000
Indian Rupees 46,239 (46,239) 43,426 (43,426)
Swedish Krona - - - -
US Dollar 1,665 (1,665) 1,677 (1,677)
========= ========= ========= =========
Management of currency risks
The Company's Investment Manager monitors the currency risk of the Company's
portfolio on a regular basis. Foreign currency exposure is regularly reported
to the Board by the Investment Manager.
The Board does not intend to hedge currency risk using any sort of foreign
currency transactions, forward transactions or derivative instruments.
(iv) Credit risks
Credit risk is the risk that the issuer of a financial instrument will fail to
fulfil an obligation or commitment that it has entered into with the Company.
Cash and other assets are held by the custodian.
Management of credit risks
The Company has appointed Kotak Mahindra Bank Limited (Kotak) as its
depositary. The credit rating of Kotak was reviewed at the time of appointment
and will be reviewed on a regular basis by the Investment Manager and the
Board.
The Investment Manager monitors the Company's exposure to its counterparties
on a regular basis and trades in equities are performed on a delivery versus
payment basis. Impairment assessment based on an expected credit loss model is
not considered material to the Company.
At 30 June 2025, the Depository held £467,086,000 (30 June 2024:
£451,026,000) in respect of quoted and unquoted investments, with
£15,781,000 held with SBM Bank (Mauritius). £13,191,000 in respect of cash
was held by the Depository (30 June 2024: £5,677,000) with £13,421,000 held
with RBS Bank and £709,000 held with HSBC Bank.
(v) Capital management policies and procedures
The Company considers its capital to consist of its share capital of Ordinary
Shares of 1p each, Management Shares of £1 each, and reserves totalling
£476,155,000 (30 June 2024: £435,439,000).
The Company is not subject to any externally imposed capital requirements.
The Investment Manager and the Company's Broker monitor the demand for the
Company's shares and the Directors review the position at Board meetings.
16. RELATED PARTY TRANSACTIONS
The amount accrued in respect of the Performance fees due to the Investment
Manager for the current Performance period is disclosed in Note 7.
The Investment Adviser provides Investment Advisory services to the Investment
Manager and no fees are paid to them from the Company.
From 1 July 2024 Directors fees are payable at an annual rate of £48,000 to
the Chairman, £40,000 to the Chair of the Audit Committee, and £32,000 to
the other Directors.
The Directors had the following shareholdings in the Company, all of which are
beneficially owned.
As at As at
30 June 2025 30 June 2024
Andrew Watkins 94,425 94,425
Jamie Skinner 100,933 100,933
Rita Dhut 81,733 81,733
Dr Jerome Booth 85,522 85,522
========= =========
17. POST BALANCE SHEET EVENTS
There have been no significant events since the year end which would require
revision of the figures or disclosure in the Financial Statements.
Financial information
This announcement does not constitute the Company's statutory accounts. The
financial information is derived from the statutory accounts, which will be
delivered to the registrar of companies and will be put forward for approval
at the Company's Annual General Meeting. The auditors have reported on the
accounts for the year ended 30 June 2024 and the year ended 30 June 2025,
their reports were unqualified and did not include a statement under Section
498(2) or (3) of the Companies Act 2006.
The Annual Report for the year ended 30 June 2025 was approved on 8 October
2025.
Annual General Meeting
Notice is hereby given that the Annual General Meeting of Ashoka India Equity
Investment Trust plc will be held at the offices of Stephenson Harwood LLP, 1
Finsbury Circus, London EC2M 7SH on 10 December 2025 at 11am.
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incorporated into, or forms part of, this announcement.
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