abrdn New India Investment Trust
plc
LEI -
549300D2AW66WYEVKF02
Annual Report 31 March
2024
Seeking world-class, well governed
companies at the heart of India's growth
abrdnnewindia.co.uk
"India's prospects are bright. The
economy is the fastest-growing among its peers."
Michael Hughes, Chairman
"The key to taking advantage of
this market's promise is picking quality stocks, backed by
fundamental research, which aligns well with how we
invest."
Kristy Fong and James Thom
Investment Manager
Why invest in India?
Aspiration
India's population is the largest
in the world with an expanding middle class which will drive
consumption growth
Building India
Urbanisation and infrastructure
development have multiplier effects for job creation and the wider
economy
Renewables
India has committed to meeting half
of its energy needs from renewable sources by 2030, thereby
reducing its dependence on imported fuels
Domestic opportunities
Global businesses are investing in
and shifting production to, India, drawn by a wealth of incentives
and opportunities
Exporting talent
India's giant tech service sector,
built on a highly educated and diligent workforce, drives the
export of services by helping global companies keep pace with the
fast-changing tech innovation landscape
Digitalisation
India has made immense progress in
digital investments, which will underpin its rise to be one of the
largest global economies by the middle of this century
Why invest in abrdn New India
Investment Trust plc?
Robust financial strength and
sustainable competitive advantage
Indian companies meeting a
'quality' threshold are included in the portfolio, displaying both
strong financial characteristics and a consistent competitive
advantage in attractive industries or sectors
Quality Management
The management of the best
companies in India is world-class and understands the importance of
good governance to drive the best outcomes for investors and other
stakeholders. Quality of management is a key attribute sought in
portfolio companies
Return of growth stocks
As interest rates peak globally
over the medium term, investors will seek out growth stocks which
are set to benefit from this. The portfolio's focus on those Indian
companies with the desire and capacity to expand will drive
performance
Financial Highlights and Performance
Financial Highlights
​
|
31
March 2024
|
31
March 2023
|
%
change
|
Equity shareholders' funds (net
assets)
|
£427,054,000
|
£357,919,000
|
+19.3
|
Market capitalisation
|
£339,744,000
|
£285,747,000
|
+18.9
|
Share price (mid
market)
|
652.00p
|
512.00p
|
+27.3
|
Net asset value per Ordinary
shareA
|
819.56p
|
641.32p
|
+27.8
|
Discount to net asset
valueA
|
20.4%
|
20.2%
|
​
|
Net gearingA
|
4.1%
|
5.8%
|
​
|
​
|
​
|
​
|
​
|
Total return per share
|
168.85p
|
(60.00p)
|
​
|
​
|
​
|
​
|
​
|
Operating costs
|
​
|
​
|
​
|
Ongoing charges
ratioA
|
1.00%
|
1.09%
|
​
|
A Considered to be an
Alternative Performance Measure. Further information on the one
year percentage return may be found in Alternative Performance
Measures. ​ ​ ​
|
Performance (total return, in Sterling
terms)
​
|
1
year
|
3
year
|
5
year
|
10
year
|
​
|
%
return
|
%
return
|
%
return
|
%
return
|
Share priceA
|
+27.3
|
+20.3
|
+41.8
|
+190.4
|
Net asset value per Ordinary
shareA
|
+27.8
|
+30.7
|
+54.4
|
+211.6
|
Adjusted net asset value per
Ordinary shareA
|
+31.9
|
N/A
|
N/A
|
N/A
|
MSCI India Index (sterling
adjusted)
|
+34.4
|
+56.6
|
+81.0
|
+238.2
|
A Considered to be an
Alternative Performance Measure. ​ ​ ​ ​
|
Source: abrdn plc, Morningstar
& Lipper. ​ ​ ​ ​
|
STRATEGIC REPORT
Chairman's Statement
Dear Shareholder
In the Half-Yearly Report, I highlighted how
India's impressive performance continued to defy a global
environment rife with volatility. Since then, the country's upward
trajectory has persisted - its stock market continues to be one of
the best performing markets while the economy is the
fastest-growing among its peers.
In order for the Company to take best advantage
of these positive markets, the Board has embarked on a number of
initiatives over the year ended 31 March 2024:
· encouraging
the Manager to more proactively consider mid-cap stocks
representing a greater proportion of the portfolio, while still
preserving its investment philosophy with its focus on quality and
growth characteristics. In response, the Board has noted that
the Manager has extended its analyst coverage, with deeper
knowledge of the mid-cap sector;
· supporting
the Manager in taking more active positions in stocks in which it
has the most conviction; and
· at the AGM in
September 2023, putting forward a resolution to permit the Company
to invest up to 10% of net assets into pre-IPO investments, which
was overwhelmingly supported and, as a result, the Manager will
pursue opportunities where feasible.
Alongside these developments, the Board
initiated a higher level of share buy-backs when necessary, and
sought the more regular update of the Company's website
(www.abrdnnewindia.co.uk),
featuring additional webcasts and articles on India as the nation
holds a general election involving over 1 billion
voters.
The Board expects shareholders to benefit from
these developments in due course, against a background also of a
lower management fee implemented from April 2023
onwards.
Overview
India's prospects are bright and the current buoyant
mood on the ground is in sharp contrast to the prevailing global
sentiment of caution and uncertainty. The economy is expanding at
an annual rate above 7%, playing catch-up after a period of sub-par
growth before the pandemic. This accelerating growth story is
backed by encouraging macroeconomic trends, including a real estate
boom, a robust infrastructure capex cycle and manageable levels of
inflation. Interest rates appear to have peaked for now, barring
any unexpected shocks to the economy, as the Reserve Bank of India
has not announced any policy moves since February 2023.
The rise in public spending to fund critical
infrastructure projects - such as building more roads, railways and
ports - has been a crucial spur to economic development in recent
years, providing a solid foundation for sustainable growth. These
projects have been designed to both create new jobs and encourage
the revival of a private capex cycle which is now in its early
stages and will help to sustain growth in the economy and in
corporate earnings. As outlined in the Government's Interim Budget,
India plans to spend another US$134 billion (£107 billion) on
infrastructure alongside a renewed focus on long-term reforms. This
is welcome news for India's capex-sensitive sectors such as capital
goods and building materials where your Manager has re-positioned
the portfolio by introducing new, high-quality names and adding to
existing holdings.
The recent election result was a surprise and is
discussed in more detail in the Investment Manager's Report.
Performance
Over the year ended 31 March 2024, the Company's
net asset value ("NAV") rose 27.8% in sterling terms (total
return), marking a sharp turnaround from the previous 12 months.
The Company's share price was up 27.3% while the discount to NAV of
20.4% was almost unchanged from that at March 2023. I am pleased
that the Company has delivered strong absolute returns, albeit the
riskier MSCI India Index (the "Benchmark") outperformed, rising
34.4% in total return terms.
The Manager is working hard to improve
performance both in absolute and relative terms and is confident
that the underlying fundamentals of the portfolio remain sound, and
our holdings continue to report healthy earnings
progression.
Looking at your Company's performance during the year
in more detail, the largest positive contribution to relative
performance came from property. The portfolio has a large exposure
to this sector, compared to the Benchmark, as India is undergoing a
long overdue recovery in residential property sales, and the
long-term prospects remain bright. It is pleasing to note that your
Manager's decision to proactively pivot the portfolio towards
industrial names and likely beneficiaries of large-scale public
spending is starting to pay off.
Two other key developments influenced portfolio
returns. Firstly, a liquidity deficit in the Indian banking system
at the start of 2024 prompted concerns among investors over
near-term loan growth and margin pressure for lenders. This
affected the share price performance of HDFC Bank, which remained weak. The
other issue has been the uneven recovery in consumption where urban
demand has returned strongly while rural consumption remains
relatively soft. This development weighed on the Company's core
consumer staples holding - Hindustan Unilever. Our
expectation is that there is room for both fiscal and monetary
policy support by the Government to resolve these issues, noting
the overall health of the banking sector remains strong.
While HDFC Bank and Hindustan Unilever disappointed due to these
challenges, they both remain high-quality businesses that are
intrinsically linked to India's future prosperity.
The Board and I continue to have faith in the
Company's long-term growth potential. Your Manager is adapting the
portfolio to market conditions while considering new ideas that
will benefit from positive structural trends. Further detail on the
drivers of performance and changes made to the portfolio during the
year may be found in the Investment Manager's Report.
Manager Change
After involvement with the Company for nearly 20
years, Kristy Fong is stepping down as Co-Investment Manager in
September 2024. James Thom becomes the lead Investment Manager,
assisted by Rita Tahilramani. The Board thanks Kristy for her
stewardship of the Company's investment portfolio and wishes her
well.
Conditional tender
offer
In March 2022 the Board announced the introduction of
a five-yearly performance-related conditional tender offer. The
Board was concerned about the relative underperformance of the
Company's NAV, as compared to its Benchmark. Following discussions
with the Investment Manager, the Board decided that, should the
Company's NAV total return underperform the Company's Benchmark
over the five-year period from 1 April 2022, then shareholders
should be offered the opportunity to realise up to 25
per cent of their investment for cash at a level close to NAV. For
these purposes, the Company's NAV per share is adjusted for Indian
capital gains tax (the "Adjusted NAV") to enable a like-for-like
comparison with the Benchmark.
The Board keeps the Company's performance under review
and, over the first two years of the measurement period from 1
April 2022 to 31 March 2024, the Adjusted NAV total return was
20.7% versus the Benchmark's total return of 26.4% (please see the
Alternative Performance Measures for further information).
Discount and Share
Buybacks
The Board continues to monitor actively the
discount of the Ordinary share price to the NAV per Ordinary share
and pursues a policy of selective buybacks of shares where to do
so, in the opinion of the Board, is in the best interests of
shareholders, while also having regard to the overall size of the
Company.
Over the year ended 31 March 2024, the Company
bought back into treasury 3,702,011 (2023 - 2,127,206) Ordinary
shares, representing 6.6% (2023 - 3.7%) of the issued share capital
(excluding treasury shares) at the start of the year, a
considerable step up in buyback activity. At 31 March 2024, there
were 52,107,910 (2023 - 55,809,921) shares in issue with voting
rights and an additional 6,962,230 (2023 - 3,260,219) shares held
in treasury. Between the year end and 13 June 2024, the latest
practicable date prior to approval of this Report, a further
564,198 shares were bought back into treasury resulting in
51,543,712 shares in issue with voting shares and 7,526,428 shares
held in treasury.
The Board believes that a combination of
stronger long-term investment performance and effective marketing
should increase demand for the Company's shares and reduce the
discount to NAV at which they trade, over time.
Gearing
As at 31 March 2024, £26 million (2023 - £30m)
had been drawn from the £30m bank loan provided by Royal Bank of
Scotland International, which resulted in net gearing of 4.1% (2023
- 5.8%). During the year, this gearing had a positive impact on
returns, though the Board and Manager are conscious of the
increased interest cost of gearing, so keep the level of gearing
under regular review. The ability to gear is one of the advantages
of the closed ended company structure and your Manager continues to
seek opportunities to deploy this facility for the benefit of
shareholders.
Impact of Indian Capital Gains
Tax
The Company, along with other investment
vehicles, is subject to both short and long term capital gains
taxes in India on the growth in value of its investment portfolio,
which become payable when underlying investments are sold and
profits crystallised. Where investments are valued at a profit, but
not yet sold, the Company must accrue for the potential capital
gains tax payable, which amounted to £19.4 million (2023 - £11.1
million) at 31 March 2024, equivalent to a reduction in the NAV per
share of 37.2p or 4.5% at 31 March 2024 (2023 - 20.0p or
3.1%).
Shareholder Engagement
The Board encourages shareholders to visit the
Company's website (www.abrdnnewindia.co.uk) for the latest information
and monthly factsheets as well as accessing podcasts and
thought-leadership and macro research articles published by the
Manager.
Annual General Meeting
The Company's AGM will be held at 18 Bishops
Square, London E1 6EG at 12.30pm on Friday 20 September 2024. The
AGM provides shareholders with an opportunity to ask any questions
that they may have of either the Board or the Investment Manager.
Voting on the resolutions to be put to shareholders will be
conducted by way of a poll and those attending are encouraged to
bring with them a letter of corporate representation in respect of
their ownership of shares in the Company.
I look forward to meeting as many of you as
possible over refreshments which will follow the AGM. Shareholders,
whether attending the AGM or not, are encouraged to submit
questions for the Board and/or Investment Manager, in advance, by
email to new.india@abrdn.com.
Online Shareholder
Presentation
In order to encourage and promote interaction
and engagement with the Company's shareholders, the Company is
holding an interactive Online Shareholder Presentation (the
"Presentation") at 11.00am on Thursday 12 September 2024, to cater
for those shareholders who may be unable to attend the AGM. During
the Presentation, shareholders will receive a short introduction
from the Chairman and portfolio update from the Investment Manager,
followed by an interactive question and answer session. The
Presentation is being held ahead of the AGM in order to allow
shareholders to submit their proxy votes prior to the meeting.
Further information on how to register for the Presentation may be
found on the Company's website.
Update
I am pleased to report that your Company has
performed extremely well since the year end with total returns for
the NAV of 14.7% compared to 6.0% for the Benchmark from 31 March
2024 to 10 June 2024 (the latest practicable date prior to approval
of this Report).
Outlook
India's economy is the fastest-growing among its
peers and the country offers favourable demographics: a large,
relatively young population and a growing middle class. Indian
corporations are becoming more sophisticated, with many competing
at an international level. Economic conditions remain buoyant with
supportive policymaking from the Government and Reserve Bank of
India, while the capex cycle and infrastructure spending should
help to sustain momentum. Indian companies are also benefitting as
multinational corporations diversify their supply chains to reduce
their reliance on China. From a global perspective, India enjoys
more geopolitical stability compared to other emerging market
countries with tensions between the United States and China
remaining high.
Investing in India, however, means accepting
market volatility, particularly as high growth rates in corporate
earnings come with high valuations. This is particularly true in
small and mid-cap stocks; these do not form the core of our
portfolio although they are included in it to ensure that
shareholders benefit over the medium-to-longer term.
Your Board is confident that your Manager has
assembled a portfolio of high-quality, resilient companies that
possess strong balance sheets and can profit from pricing power at
each stage of the economic cycle.
Michael Hughes
Chairman
13 June 2024
Investment Manager's Report
In the year ended 31 March 2024,
the Company's net asset value ("NAV") total return rose 27.8%,
compared to an 8% decline in the previous year. A substantial part
of that negative return was clawed back by sticking to our
long-term quality investment philosophy and by repositioning the
portfolio towards structurally attractive segments that are now
paying off. However, the Company was not able to keep pace with the
MSCI India Index, which rose 34.4%. We explain the reasons
below.
Market review
As the Chairman describes in his
Statement, the Indian market had a strong run throughout most of
the year, underpinned by a robust domestic economy and an enviable
growth trajectory. Retail inflation has remained steady at just
over 5%, while the Reserve Bank of India has not increased interest
rates since February 2023. The estimated GDP growth rate for the
full financial year was projected at 7.6%, surpassing the previous
year's figure of 7%, leading to India holding to its position as
the world's fastest-growing major economy. We did see some pullback
in the market this year, particularly in the small-and-mid ("SMID")
cap space. After outperforming Indian large-caps last year, SMID
companies corrected in March 2024 when the Indian securities
regulator increased scrutiny towards domestic mutual funds due to
rising valuations. We had been very selective in adding SMID names
to the portfolio, preferring companies with good earnings
visibility and a track record of delivering on
growth.
At the time of writing, India's
2024 general election has just concluded, and the outcome came as a
big surprise to the market. Polls had predicted that Prime Minister
Narendra Modi and his party would comfortably win enough seats in
the lower house of parliament to form a government on their own.
Instead, Modi's Bharatiya Janata Party (BJP) failed to secure a
majority. This has forced Modi and the BJP into a coalition
government for the first time in his career. Modi's bargaining
power within this alliance is likely to be reduced, with a
possibility of ministries reshuffling and some of them being given
to the non-BJP leaders. As a result, we will need to keep a close
watch on Cabinet formation and capital allocation in the FY25
budget.
Thinking about the implications
for policymaking, we view BJP's broad agenda around infrastructure,
manufacturing, and technology is likely to continue, and would
create structural tailwinds for the economy. New big bang reforms,
however, are unlikely to come from a coalition government. Instead,
we could see measures favouring populist agendas take precedence
whilst there could be some moderation in capital expenditure. Job
creation and tackling the rural economy could also take the
spotlight.
The Company's quality focus and
positioning in several defensive sectors such as IT Services,
Consumer Staples, and, to some extent, Banking and Insurance,
should provide resilience to the portfolio through the current
market turbulence. Our conviction in our India holdings remains
strong, re-enforced by recent trips and meetings with company
management teams. Valuation dips could present buying
opportunities.
Performance review
The strongest returns came from
the holdings in property as well as from infrastructure and capital
expenditure (capex) beneficiaries in utilities and industrials
sectors. Our consumer, financials, and energy stocks, however,
lagged the market's rally. Real estate was the biggest performance
driver, with our exposures benefitting from structural trends as
well as the SMID rally seen throughout most of 2023. Property
developers Godrej Properties
(see the case study below) and
Prestige Estates were
the top stock contributors, reporting strong pre-sales numbers for
their new housing projects. India is undergoing a long overdue
recovery in residential property sales and the future prospects for
the overall sector remain bright.
We were pleased to see that our
repositioning towards industrial names and capex proxies has paid
off. India has ramped up public capex by building more roads,
railways, ports and similar projects to create additional jobs and
revive private capex. Our holdings that benefited from this step-up
in capital spending include ABB
India as well as Power Grid Corporation of India. Power Grid has raised its capex guidance as its development
pipeline and earnings visibility remain robust. Meanwhile, our
telco exposure in Bharti Airtel
(see the case study below) did well amid ongoing
industry consolidation, and on expectations of a new tariff hike
after the elections.
Some of our IPO names that were
depressed in the previous year, due to the growth-to-value rotation
in the market, have started to demonstrate positive performance.
This includes affordable housing company Aptus Value Housing Finance and
online insurance platform, PB
Fintech.
Looking at where the Company has
fallen short, HDFC Bank
and Hindustan
Unilever have both disappointed in growth
and, therefore, in relative share price performance. HDFC Bank will
now take longer to deliver integration cost savings following its
merger with mortgage lender HDFC, in a tighter liquidity
environment. A sluggish rural economy has acted as a brake on
Hindustan Unilever's growth. While we continue to believe in the
medium-term investment theses for both stocks, we have partially
cut these holdings to release funds for several of our new ideas
discussed below.
In the energy sector, our holding
in Aegis Logistics did well but trailed its peers - mostly public sector
companies - which we tend to avoid owning in the portfolio. Index
heavyweight Reliance Industries lagged in 2023 but saw a recovery
in its share price in 2024. We do not hold the company due to
reservations around capital allocation and governance
standards.
Finally, within consumer
discretionary, our auto holdings performed well but underperformed
some of their peers. Not holding online delivery company Zomato
also affected relative performance. While we are aware that we are
lightly exposed here, this sector is seeing increasingly stretched
valuations, and we believe it is necessary to tread with
caution.
Overall, the underlying
fundamentals of our portfolio remain sound, and our companies
continue to report healthy earnings growth, mostly in line with
expectations.
Portfolio Activity
During the year, we actively
repositioned the portfolio to maximise potential returns. Key
changes included scaling up the exposure to investment themes that
we found attractive, provided we could find stocks that met our
quality criteria from a bottom-up perspective in these sectors.
These structurally attractive themes include: premiumisation,
property upcycle, and infrastructure and capex beneficiaries. We
also added some high-quality names based on stock-specific factors
that were largely independent of more top-down themes.
Within consumer, we introduced a
new SMID-cap addition in the automotive sector, Uno Minda, which provides auto
components to four-wheeler and two-wheeler OEMs. In real estate, we
added Phoenix Mills, which operates high quality shopping malls in top-tier and
state capital cities with a good pipeline of new assets expected
over the next few years. It is also a premium consumption play as
India's disposable income slowly tracks higher alongside
growth.
In Industrials, we
introduced Siemens India,
the Indian arm of the German multi-national, as
well as a SMID-cap name, Apar
Industries. We also added
Havells India, a proxy
to the electrical and consumer durable sector, and building
material company Pidilite, an indirect beneficiary of
the housing cycle and home improvement trend. In Software &
Services, we scaled back our position given the sector's
vulnerability to a slow-down in the core US market and a subsequent
contraction in IT spend. However, we have also taken advantage of
the price falls across the sector and added a new mid-cap
name, Coforge,
which provides niche IT services with deep domain
expertise.
While financials remains our
largest portfolio weight by sector, we broadened our mix of stock
holdings. We added to NBFCs (non-bank finance companies) by
initiating Cholamandalam Investment and
Finance that has a long growth runway and
has operating levers to mitigate against rate headwinds. We also introduced
KFin Technologies, a
fast-growing player in the Mutual fund Registrar and Transfer
Agency duopoly, benefitting from structural growth trends such as
wealth accumulation in India. These were funded by reducing our
banking exposure, primarily with the exit of Kotak Mahindra
Bank.
Lastly, we also exited lower
conviction holdings Asian Paints and Renew Energy Global to fund
some of the new ideas.
Outlook
India is the world's
fastest-growing major economy, backed by a resilient macro backdrop
that includes a real estate boom, strong consumer sentiment in
urban areas, and a robust infrastructure capex cycle.
The growth story is underpinned
largely by supportive policies from the central government as well
as a decade of painful, but necessary economic reforms. The
groundwork laid by these sweeping reforms has put India on a
positive economic trajectory. We are also seeing early signs of a
private capex revival. This can potentially continue to sustain
both economic momentum and corporate earnings growth.
India still faces some near-term
risks, most of which are external, including potentially higher
global energy prices and a slowdown in the world economy. As a net
oil importer, recent developments in the Middle East remain a
potential source of concern as any escalation will push oil prices
higher. As the Chairman noted earlier, valuation is also a
perpetual risk - given its recent outperformance, India has become
a consensus trade, with valuations becoming stretched, especially
in small and mid-caps. The key to taking advantage of this market's
promise is bottom-up stock picking that is backed by fundamental
research, which aligns well with how we invest.
The Company's downside is
well-protected given our quality focus, and our defensive holdings
are in a good position in case of profit taking. Furthermore,
any correction in the market would be an opportunity to add to the
holdings. The consistency of earnings growth of the portfolio
remains healthy and individual company fundamentals, such as
pricing power, strong balance sheets and the ability to sustain
margins, remain solid.
Kristy Fong and James
Thom
Investment Manager
13 June 2024
Investment Case Studies
Bharti Airtel - the most
financially disciplined player in a consolidating telecom
market
Bharti Airtel offers mobile, voice, data and
cloud-based solutions to over 500 million customers in 17 countries
across Asia and Africa. It is India's largest integrated telecom
solutions provider to the retail and enterprise markets, and also
the No.2 mobile operator in Africa, after South Africa's MTN
Group.
We believe that Airtel is the most commercial
and financially disciplined service provider in an Indian telecom
landscape that has undergone significant market repair. The market
has consolidated down from close to 12 companies just five to six
years ago to less than a handful of players today, in what is now
effectively a duopoly between Jio and Airtel.
Thanks to the market repair, Airtel turned free
cash flow (FCF) positive for the first time in 2022. The company
has also demonstrated its ability to raise capital, with a rights
issue of up to 210 billion rupees (£2 billion) in September 2021
and most of the proceeds yet to be used. Airtel's capex will also
start to taper off as its rural expansion slows, easing the funding
needs and potentially improving the FCF outlook, which could lead
the company to consider paying down debt or even paying dividends.
Most recently, the company also listed its Bharti Hexacom
subsidiary, the group's first IPO in over a decade.
While Airtel continues to deliver consistent
growth across all its businesses with an industry leading average
revenue per user (ARPU), its return on capital employed (ROCE),
however, remains low at 9.4% [1]. The management indicated that
tariff repair was critical to ensure the industry's health, and it
was confident that tariffs would rise over the next two years. This
would also help raise
its ROCE.
The market's structural dynamics are in Airtel's
favour. The market remains underpenetrated, with mobile penetration
standing at 69% as of FY22, indicating room for organic growth.
Mobile spend as a percentage of GDP is low at 0.95% in FY22, which
is much lower compared to other ASEAN markets at 1.2-1.8%
[2].
As smartphones become more affordable and
subscribers migrate to 5G, the uptake of data services is
increasing; for Airtel, data services are growing rapidly and the
group expects this trend to be sustainable [3]. The other key
growth area is in home broadband services, which is doing well with
healthy subscriber additions and improving ARPU, supported by the
rollout of its high-speed Xstream AirFiber network across the
country.
On the sustainability front, the group continues
to make progress on its ESG agenda. Airtel has committed to reduce
absolute Scope 1 and 2 greenhouse gas emissions by 50.2% by FY
2030-31 from the base year of FY 2020-21. It has also committed to
reducing absolute Scope 3 GHG emissions by 42% over the same time
frame.
[1] Bharti Airtel Limited - Media
Release February 05, 2024
[2] abrdn research
[3] Bharti Airtel Limited -
Integrated Report and Annual Financial Statements
2022-23
Godrej Properties - reputable
high-quality real estate developer in India
Set up in 1897, the Godrej Group has its roots
in India's independence and Swadeshi movement [1]. Its founder,
Ardeshir Godrej, a lawyer-turned-serial entrepreneur, failed with a
few ventures before he found success with a locks business [2]. The
group has since grown into one with annual revenue of about US$6
billion earned from consumer goods, real estate, appliances,
agriculture and other areas, and it is still controlled by the
Godrej family - one of the most eminent industrial families in
India with admirable track record of treating minority shareholders
fairly over the decades. That is why we have felt comfortable
investing in several of their listed entities over the years,
including its primary property vehicle Godrej Properties Limited
("GPL"), which was established in 1990 and listed in 2010. The
group considers real estate as a key growth area among its
businesses. GPL is the country's largest developer by number of
homes sold in FY23. It has delivered close to 41 million sq ft of
real estate since FY18, and it is developing landmark projects in
12 cities across India covering over 18.58 million sq m
[3].
GPL's solid execution has led to the developer
being ranked as the most trusted real estate brand in the 2019
Brand Trust report. This also reflects its reputation and how it
stands out from its peers in overall quality. Its other advantages
include an asset-light and capital efficient development model, and
good access to capital with the lowest bank funding rates across
the sector. The company appears to be at an inflection point with
improving fundamentals, and we expect steadily improving presales,
profitability and cash flows over the next few years.
More broadly, we view GPL as well positioned to
benefit from the domestic real estate industry's up-cycle. The
industry's longer-term outlook remains bright, supported by an
aspirational population, rising urbanisation and incomes, and
favourable regulatory changes. Aside from the reform of the Real
Estate (Regulation and Development) Act in India, that has led to a
more regulated industry and greater protection for home buyers,
schemes like the Pradhan Mantri Awas Yojana and Rajiv Awas Yojana
have incentivised developers to venture into the affordable housing
segment, fostering accessibility and affordability for the
population.
The developer is also a leader on the
sustainability front. It has been included among the global
sustainability leaders in the Dow Jones Sustainability Indices list
and has been ranked no.1 globally for three consecutive years in
2020, 2021 and 2022 by the Global Real Estate Sustainability
benchmark (GRESB). MSCI has also given an ESG rating of BB to GPL,
citing its green building efforts. As of the third quarter of
FY23-24, 96% of GPL's portfolio is certified under credible
external green building rating systems like IGBC and GRIHA [3]. In
addition, the company is water positive and carbon neutral for
Scope 1 and Scope 2 greenhouse gas emissions, and it is
strengthening its efforts to include Scope 3 emissions through its
supplier engagement programme.
[1] Swadeshi movement -
Wikipedia
[2] About Godrej Properties | Best
Real Estate Companies in India
[3] Godrej Properties 3QFY2024
Results Presentation
Overview of Strategy
Business Model
The business of the Company is that of an
investment company which continues to qualify as an investment
trust for UK capital gains tax purposes. The Directors do not
envisage any change either to this model or to the Company's
activities in the foreseeable future.
Investment Objective
The Company aims to provide shareholders with
long term capital appreciation by investment in companies which are
incorporated in India, or which derive significant revenue or
profit from India, with dividend yield from the Company being of
secondary importance.
Investment Policy
The Company invests primarily in Indian equity
securities.
Delivering the Investment
Policy
At the AGM on 27 September 2023, shareholders
approved a new investment policy, involving amendments to
Risk Diversification; the sections
under Gearing;
Currency, Hedging Policy and
Derivatives; and Investment
Restrictions are unchanged. The former investment
policy, in place until 27 September 2023, may be found on page 12
of the Annual Report for the year ended 31 March 2023.
The Company's current investment policy is as
follows:
Risk Diversification
The investment policy is flexible, enabling it
to invest in all types of securities, including equities, debt and
convertible securities in companies listed on the Indian stock
exchanges or which are listed on other international exchanges, and
which derive significant revenue or profit from India. The Company
may, where appropriate, invest in open-ended collective investment
schemes and closed-end funds which invest in India and are listed
on the Indian stock exchanges. The Company is free to invest in any
particular market segment or geographical region of India or in
small, mid or large capitalisation companies. The Company may
invest up to 10% of its NAV in unquoted companies in aggregate,
measured at the time of each investment.
The Company's portfolio will typically comprise
in the region of 25 to 50 holdings, but with due consideration
given to spreading investment risk. No individual issuer is
expected normally to represent a greater weight in the portfolio
than the higher of (i) 10% of the Company's net assets or (ii) the
individual issuer's weight in the MSCI India Index (in sterling
terms) plus 2%, both as measured at the time of each investment,
although there is a maximum permitted exposure to a single issuer
of 20% of the Company's net assets at all times.
Gearing
The Company is permitted to borrow up to 25% of
its net assets (measured when new borrowings are incurred). It is
intended that this power should be used to leverage the Company's
portfolio in order to enhance returns when and to the extent that
it is considered appropriate to do so. Under normal circumstances,
over the longer term and in tandem with the rising value of the
Company's investments, gearing is expected to improve
returns.
The Company's gearing is essentially structural
in nature but, in addition, may be used for specific opportunities
or circumstances. The Directors take care to ensure that borrowing
covenants permit flexibility of investment policy.
Currency, Hedging Policy and
Derivatives
The Company's financial statements are
maintained in Sterling while, because of its investment focus,
nearly all of its portfolio investments are denominated and quoted
in the Indian Rupee. Although it is not the Company's present
intention to do so, the Company may, where appropriate and economic
to do so, employ a policy of hedging against fluctuations in the
rate of exchange between Sterling and other currencies in which its
investments are denominated. Cash balances are held in such
currency or currencies as the Manager considers appropriate,
although it is expected that this would primarily be
Sterling.
Although the Company does not employ derivatives
presently, it may do so, if appropriate, to enhance portfolio
returns (of a capital or income nature) and for efficient portfolio
management, that is, to reduce, transfer or eliminate risk in its
investments, including protection against currency risks, or to
gain exposure to a
specific market.
Investment Restrictions
It is the investment policy of the Company to
invest no more than 15% of its gross assets in other listed
investment companies (including listed investment trusts). The
Company held no investments in other listed investment companies
during the year ended 31 March 2024.
Benchmark
The Company's Benchmark is the MSCI India
Index (Sterling-adjusted). The Board also considers the Adjusted
NAV in relation to the conditional tender offer announced in March
2022.
Key Performance
Indicators
At each Board meeting, the Directors consider a
number of performance measures to assess the Company's success in
achieving its objective. The main Key Performance Indicators
("KPIs") identified by the Board in relation to the Company, which
are considered at each Board meeting, are as follows:
KPI
|
Description
|
Performance of NAV and share price
compared to the Benchmark
|
The Board considers the Company's
NAV return, the Adjusted NAV return and share price return, all
relative to the Benchmark, to be the best indicator of performance
over time. The figures for this year and for the past three, five
and ten years are set out on page 3 of the Annual Report for the
NAV return and share price total return while a graph showing NAV
and share price total return performance against the Benchmark over
the past five years is shown on page 21 of the Annual
Report.
|
Discount to NAV
|
The discount at which the
Company's share price trades relative to the NAV per share is
monitored by the Board. A graph showing the discount over the last
five years is shown on page 21 of the Annual Report.
|
Ongoing charges
|
The Board regularly monitors the
operating costs of the Company and the ongoing charges for this
year and the previous year are disclosed in Financial Highlights
and Performance above.
|
Principal Risks and
Uncertainties
There are a number of risks which, if realised,
could have a material adverse effect on the Company and its
financial position, performance and prospects. The Board has
carried out a robust assessment of these risks, including emerging
risks, which include those that would threaten its business model,
future performance and solvency. The principal risks associated
with an investment in the Company's shares are published monthly in
the Company's factsheet which is available from the Company's
website: abrdnnewindia.co.uk.
The principal risks and uncertainties, and
emerging risks, faced by the Company are reviewed annually by the
Audit Committee in the form of a detailed risk matrix and heat map
and they are described in the table below, together with any
mitigating actions. In addition, the Board has identified, as an
emerging risk, the general escalation of geo-political risk
globally. This may have implications for investors in India (see
"Single Country Risk"). In addition, the Audit Committee considers
the implications for the Company's investment portfolio of a
changing climate. The Board assesses this emerging risk as it
develops, including how investor sentiment is evolving towards
climate risk within investment portfolios, and will consider how
the Company may mitigate this risk, and other emerging risks, if
and when they become material. The Board is also conscious of the
development of Artificial Intelligence ("AI"), which may have a
potentially positive or negative impact at Company, sector and
country level.
In all other respects, the Company's principal
risks and uncertainties have not changed materially since the date
of the previous Annual Report and are not expected to change
materially for the current financial year.
An explanation of other risks relating to the
Company's investment activities, specifically market price,
interest rate, liquidity and credit risk, and a note of how these
risks are managed, is contained in Note 17 to the financial
statements.
Description
|
Mitigating Action
|
Strategic risk - inappropriate business strategy leads to lack of demand for
the Company's shares, leading to its shares trading at a persistent
and anomalous discount to its Net Asset Value
|
The Board reviews its strategy and
investment mandate annually in the context of developments in
markets and taking account of investor feedback.
|
Market risk - falls in the prices of securities issued by Indian
companies, which may be caused by company-specific issues or may be
determined by local and international economic, political, social,
and financial factors, including pandemics, natural disasters
(arising from climate change or otherwise) or geo-political
conflicts.
|
The Investment Manager seeks to
reduce market risk by investing in a wide variety of companies with
strong balance sheets and the ability to generate increased
earnings. In addition, investments are made in diversified sectors
in order to reduce the risk of a single large exposure. The
Investment Manager believes that diversification should be looked
at in absolute terms rather than relative to the Benchmark. The
performance of the portfolio relative to the Benchmark and the
underlying stock and sector weightings in the portfolio against
their Benchmark weightings are monitored closely by the
Board.
|
Poor investment performance
- poor investment performance leads to loss of
asset value in comparison to the benchmark and/or the peer group,
and, over time, can lead to a widening of the discount to NAV at
which the Company's shares trade.
|
The investment performance of the
Manager is reviewed at each Board meeting and compared to the
benchmark and the peer group. Exposure to a range of risk factors
is also reviewed.
|
Discount - factors which affect the discount to NAV at which the
Ordinary shares of the Company trade. These may include the
popularity of the investment objective of the Company, the
popularity of investment trust shares in general, the investment
performance of the Company, and the ease with which the Company's
Ordinary shares can be traded on the London Stock
Exchange.
|
The Board keeps under review the
discount and undertakes selective buyback of shares where to do so
would be in the best interests of shareholders, balanced against
reducing the overall size of the Company. Any shares bought back
are held in treasury.
|
Single country risk
- the Company invests in companies which are
incorporated in, or derive significant revenue or profit from, a
single country - India. Investing in a single country, which is
also an emerging market, is generally a higher risk strategy than
investing more widely, or in developed markets. There is likely to
be greater political and regulatory risk, and the standards of
disclosures and corporate governance may be less developed than in
developed markets. In addition, there may be specific internal
political and social issues, or wider geo-political issues, which
could lead to social upheaval, unrest, or conflict.
These events may lead to falls in
equity markets, and also adverse foreign currency
movements.
|
The Company's exposure to India is
an integral part of its investment strategy. Risk can be mitigated,
to a degree, by the monitoring of emerging risks, and by
appropriate actions in relation to portfolio construction,
liquidity and gearing.
The Board is kept informed of
political, regulatory and tax issues affecting the
portfolio.
The Board monitors the
Rupee/Sterling exchange rate and reviews the currency impacts on
both capital and income regularly, although the Company did not
hedge its foreign currency exposure during the year.
|
Supplier risk - The Company is dependent on the services provided by third
parties, and in particular the Manager and Depositary. Failure by
third parties to carry out their obligations to the Company, or
reputational issues or inadequate succession arrangements, could
disrupt the level of service provided. In particular, the
insolvency of the depositary or custodian or sub-custodian, or a
shortfall in the assets held by that depositary, custodian or
sub-custodian arising from fraud, operational errors or settlement
difficulties resulting in a loss of assets owned by the
Company.
|
The Board reviews the overall
performance of the Manager and all other key service providers on a
regular basis. In particular, the Depositary, BNP Paribas Trust
Corporation UK Limited, presents to the Board at least annually on
the Company's compliance with the Alternative Investment Fund
Managers Directive ("AIFMD"). The Manager separately monitors the
activities of the depositary and reports to the Board on any
exceptions arising.
|
Financial and regulatory
- the financial risks associated with the
portfolio could result in losses to the Company. In addition,
failure to comply with relevant regulation (including the Companies
Act, the Financial Services and Markets Act, the Alternative
Investment Fund Managers Directive, accounting standards,
investment trust regulations and the Listing Rules, Disclosure
Guidance and Transparency Rules and Prospectus Rules) may have an
adverse impact on the Company.
Any change in the Company's tax
status or in taxation legislation either in India or in the UK
(including the tax treatment of dividends, capital gains or other
investment income received by the Company) could affect the value
of the investments held by the Company and the Company's ability to
provide returns to shareholders or alter the post-tax returns to
shareholders.
In particular, the calculation of
Indian capital gains tax which may be due can be complex and is
dependent on the interpretation of the legislation, which may
result in an under- or over-provision being made.
|
The financial risks associated with
the Company include market risk, liquidity risk and credit risk,
all of which are mitigated by the Manager. Further details of the
steps taken to mitigate the financial risks associated with the
portfolio are set out in Note 17 to the financial
statements.
The Board is responsible for
ensuring the Company's compliance with applicable regulations.
Monitoring of this compliance, and regular reporting to the Board
thereon, has been delegated to the Manager. The Board receives
updates from the Manager and AIC briefings concerning industry
changes. From time to time, the Company also employs external
advisers covering specific areas of compliance.
In particular, the Board receives
reports from the Manager covering investment movements, the level
and type of forecast income and expenditure and the amount of
proposed dividends with a view to ensuring that the Company
continues to qualify as an investment trust under Chapter 4 of Part
24 of the Corporation Tax Act 2010. A breach of these regulations
would mean that the Company is no longer exempt from UK capital
gains tax on profits realised from the sale of its
investments.
The Indian capital gains tax
provision is calculated by an independent third party and reviewed
at least half-yearly by the Audit Committee.
|
Gearing -
while the use of gearing should enhance the total return on the
Ordinary shares where the return on the Company's underlying assets
is rising and exceeds the cost of borrowing, it will have the
opposite effect where the underlying return is less than the cost
of borrowing, further reducing the total return on the Ordinary
shares. A significant fall in the value of the Company's investment
portfolio could result in a breach of bank covenants and trigger
demands for early repayment.
|
The Board is responsible for
determining the gearing strategy for the Company, with day-to-day
gearing decisions being made by the Investment Manager. Borrowings
are short term in nature and particular care is taken to ensure
that any bank covenants permit maximum flexibility of investment
policy. The Board has agreed certain gearing restrictions with the
Manager and reviews compliance with these guidelines at each Board
meeting.
Loan agreements are entered into following review by the Company's
lawyers.
|
Unlisted securities
- the Company may invest in unlisted securities,
which may not be readily realisable, and may be more difficult to
value in the absence of a quoted price. There may be less available
information and less regulation in respect of disclosures and
corporate governance.
|
At 31 March 2024, there were no
unlisted investments in the portfolio. The Manager is currently
seeking the necessary regulatory permissions to make unlisted
investments in India. Once obtained, the Manager will conduct
appropriate due diligence in respect of any unlisted investments.
Valuation will be assessed by an independent third party and
reviewed at least half-yearly by the Audit Committee.
|
Promoting the Company
The Board recognises the importance of updating
existing investors as well as promoting the Company to prospective
investors, with the aim of improving liquidity in the Company's
shares and reducing the discount at which they trade, thereby
enhancing value. Communicating the long-term attractions of the
Company is key.
The Board seeks to achieve this through
subscription to, and participation in, the promotional programme
run by abrdn on behalf of the investment companies under its
management.
The Company's financial contribution to the
programme is matched by abrdn. abrdn's promotional activities team
reports quarterly to the Board giving analysis of the promotional
activities as well as updates on the shareholder register and any
changes in the composition of that register.
The Company further supports the Manager's
investor relations programme which involves regional roadshows as
well as promotional and public relations
campaigns.
Board Diversity and
Succession
The Board recognises the importance of having a
range of skilled, experienced individuals with the right knowledge
represented on the Board in order to allow the Board to fulfil its
obligations. The Board also recognises the benefits, and is
committed to, the principle of diversity in its recruitment of new
Board members. The Board will continue to ensure that all
appointments are made on the basis of merit against the
specification prepared for each appointment and will search widely
when recruiting any new Director with a view to maximising
diversity. Consequently, the Company does not consider it
appropriate to set specific diversity targets. At 31 March 2024,
there were three male Directors and one female Director on the
Board.
The Board has agreed a policy whereby no
Director, including the Chairman, shall serve for longer than the
ninth AGM after the date of their initial date of appointment as a
Director unless in relation to exceptional
circumstances.
Environmental, Social and Human
Rights Issues
The Company has no employees as it is managed by
abrdn Fund Managers Limited and there are therefore no disclosures
to be made in respect of employees. The Company's responsible
investment policy is outlined above.
Due to the nature of the Company's business,
being a company that does not offer goods and services to
customers, the Board considers that it is not within the scope of
the Modern Slavery Act 2015 because it has no turnover. The Company
is therefore not required to make a slavery and human trafficking
statement.
Notwithstanding this, the Board considers the
Company's supply chains, dealing predominantly with professional
advisers and service providers in the financial services industry,
to be low risk in relation to this matter.
Global Greenhouse Gas Emissions
and Streamlined Energy and Carbon Reporting ("SECR")
All of the Company's activities are outsourced
to third parties. The Company therefore has no greenhouse gas
emissions to report from the operations of its business, nor does
it have responsibility for any other emissions producing sources
under the Companies Act 2006 (Strategic Report and Directors'
Reports) Regulations 2013. For the same reason as set out
above, the Company considers itself to be a low energy user under
the SECR regulations and therefore is not required to disclose
energy and carbon information.
Task Force for Climate-Related
financial Disclosures ("TCFD")
Under Listing Rule 15.4.29(R), the Company, as
a closed ended investment company, is exempt from complying with
the Task Force on Climate-related Financial Disclosures
("TCFD").
Whilst TCFD is currently not applicable to the
Company, the Manager has produced a product level report on the
Company in accordance with the FCA's rules and guidance regarding
the disclosure of climate-related financial information consistent
with TCFD Recommendations and Recommended Disclosures. These
disclosures are intended to help meet the information needs of
market participants, including institutional clients and consumers
of financial products, in relation to the climate-related impact
and risks of the Manager's TCFD in-scope business. The product
level report on the Company is available on the Manager's website
at: invtrusts.co.uk.
Viability Statement
The Company does not have a fixed period
strategic plan, but the Board does formally consider risks and
strategy on at least an annual basis. The Board regards the
Company, with no fixed life, as a long-term investment vehicle, but
for the purposes of this viability statement has decided that a
period of three years is an appropriate period over which to
report. The Board considers that this period reflects a balance
between looking out over a medium-term horizon and the inherent
uncertainties of looking out further than three years.
Taking into account the Company's current
position and the potential impact of its principal risks and
uncertainties, the Directors have a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due for a period of three years from the
date of this Report.
In forming this expectation, the Directors
looked to the following:
· the Company's
assets consist, substantially, of a portfolio of readily realisable
quoted securities, where the Directors monitor the liquidity of
each holding as well as reviewing the outcome of testing undertaken
by the Manager in which the portfolio is subject to adverse market
scenarios;
· the principal
risks and uncertainties outlined above and the steps taken to
mitigate these, and noting the strategic and performance risks are
considered to be the most significant for the Company;
· a significant
proportion of the expenses are proportional to the Company's NAV
and will reduce if the NAV falls;
· the Directors
regularly review the Company's level of gearing, including the
financial modelling undertaken by the Manager to establish what
level of reduction in the Company's NAV would require to occur in
order to cause a breach in the covenants attached to the Company's
£30m loan facility;
· the Company's
third-party suppliers continuing to deliver services to the Company
in accordance with the underlying agreements and not experiencing
significant operational difficulties in respect of the services
provided to the Company, although, if required, alternative
suppliers could be engaged to provide these services at limited
notice; and
· in advance of
expiry in August 2025 of the Company's £30m loan the Company will
enter into negotiations with its bankers. If acceptable terms are
available from the existing bankers, or any alternative, the
Company would expect to continue to access borrowings. However,
should these terms not be forthcoming, any outstanding borrowing
would be repaid through the proceeds of equity sales.
Accordingly, taking into account the Company's
current position and the potential impact of its principal risks
and uncertainties, the Board has a reasonable expectation that the
Company will be able to continue in operation and meet its
liabilities as they fall due for a period of three years from the
date of this report. In making this assessment, the Board undertook
stress testing of the Company's forecast revenue account as well as
scenario analysis in relation to a significant reduction in the
liquidity of the underlying investment portfolio.
Duration
The Company does not have a fixed life but,
further to a change in the Articles of Association approved by
shareholders at the AGM on 28 September 2022, an ordinary
resolution to continue the Company is put to shareholders at every
fifth AGM. The next continuation resolution will be put to
shareholders at the AGM in 2027.
Likely Future
Developments
The Board expects the Company to continue to
pursue its investment objective and accepts that this may involve
divergence from the Benchmark. The companies which make up the
investment portfolio are considered by the Investment Manager to
demonstrate resilience and to offer opportunities for investors to
benefit from the development of the broader Indian economy. Further
information on the outlook and future developments of the Company
may be found in the Chairman's Statement and in the Investment
Manager's Report.
Michael Hughes
Chairman
13 June 2024
Promoting the Success of the Company
The Purpose of the Company and
Role of the Board
The Board is required to report on how it has
discharged its duties and responsibilities under section 172 of the
Companies Act 2006. Under this legislation, the Directors have a
duty to promote the success of the Company for the benefit of its
members as a whole, taking into account the likely long-term
consequences of decisions, the need to foster relationships with
the Company's stakeholders and the impact of the Company's
operations on the environment.
The purpose of the Company is to act as a
vehicle to provide, over time, attractive financial returns to its
shareholders. Investment trusts, such as the Company, are long-term
investment vehicles and are typically externally managed, have no
employees, and are overseen by an independent non-executive board
of directors.
During the year, the Board comprised four
independent non-executive Directors with a broad range of skills
and experience across all major functions that affect the Company.
The Board retains responsibility for taking all decisions relating
to the Company's investment objective and policy, gearing,
corporate governance and strategy, and for monitoring the
performance of the Company's service providers.
The Board's philosophy is that the Company
should operate in a transparent culture where all parties are
provided with respect as well as the opportunity to offer practical
challenge and participate in positive debate which is focused on
the aim of achieving the expectations of shareholders and other
stakeholders alike. The Board expects the Manager to act as a
responsible steward of the Company's investments. Further
information on the Manager's responsible investing may be found
at: www.abrdn.com/en-gb/seeing-things-differently
How the Board Engages with
Stakeholders
The Company's main stakeholders are its
Shareholders, the Manager, Investee Companies, Service Providers,
Debt Providers and the Environment and Community. The Board
considers its stakeholders at Board meetings
and receives feedback on the Manager's interactions
with them.
Stakeholder
|
How the Board Engages
|
Shareholders
|
The Company's shareholders are key
stakeholders and the Board places great importance on communication
with them. The Board welcomes all shareholders' views and aims to
act fairly between all shareholders. The Chairman, Manager and
Company's broker regularly meet with current and prospective
shareholders to discuss performance and shareholder feedback is
discussed by the Directors at Board meetings. In addition, the
Chairman meets with major shareholders in the absence of
representatives of the Manager, as necessary.
Regular updates are provided to
shareholders through the Annual Report, Half Yearly Report,
Manager's monthly factsheets, Company announcements, including
daily net asset value announcements, and the Company's
website. In normal years, the Company's Annual General
Meeting provides a forum, both formal and informal, for
shareholders to meet and discuss issues with the Directors and
Manager.
|
Manager
|
The Investment Manager's Report
details the key investment decisions taken during the year. The
Investment Manager has continued to manage the Company's assets in
accordance with the mandate provided by shareholders, with the
oversight of the Board.
The Board regularly reviews the
Company's performance against its investment objective and the
Board undertakes an annual strategy review to ensure that the
Company is positioned well for the future delivery of its objective
for its stakeholders. The Board receives presentations from the
Investment Manager at every Board meeting to help it to exercise
effective oversight of the Investment Manager and the Company's
strategy. The Board, through the Management Engagement Committee,
formally reviews the performance of the Manager at least
annually.
|
Investee Companies
|
Responsibility for actively
monitoring the activities of portfolio companies has been delegated
by the Board to the Manager which has sub-delegated that authority
to the Investment Manager.
The Board has also given
discretionary powers to the Investment Manager to exercise voting
rights on resolutions proposed by the investee companies within the
Company's portfolio. The Investment Manager reports to the
Board on a quarterly basis on stewardship (including voting)
issues.
Through engagement and exercising
voting rights, the Investment Manager actively works with portfolio
companies to improve corporate standards, transparency and
accountability, and report thereon to the Board.
|
Service Providers
|
The Board seeks to maintain
constructive relationships with the Company's suppliers either
directly or through the Manager with regular communications and
meetings.
The Audit Committee conducts an
annual review of the performance, terms and conditions of the
Company's key service providers to ensure they are performing in
line with Board expectations and providing value for
money.
|
Debt Providers
|
On behalf of the Board, the
Manager maintains a constructive working relationship with Royal
Bank of Scotland International Limited (London Branch), part of
NatWest Group plc, the provider of the Company's £30m
multi-currency loan facility, ensuring compliance with its loan
covenants and arranging for regular updates for the lender on the
Company's business activities, where requested.
|
Environment and
Community
|
The Board and Manager are
committed to investing in a responsible manner and the Investment
Manager integrates Environmental, Social and Governance ("ESG")
considerations into its research and analysis as part of the
investment decision-making process.
|
Specific Examples of Stakeholder
Consideration During the Year
While the importance of giving due consideration
to the Company's stakeholders is not new, and is considered as part
of every Board decision, the Directors were particularly mindful of
stakeholder considerations during the following decisions
undertaken during the year ended 31 March 2024.
Share buybacks
During the year the Company bought back into
treasury 3.7 million shares, providing a small accretion to the NAV
per share and a degree of liquidity to the market. The
discount at which the Company's share price sits as compared to its
NAV per share was wider than the historic average and the Board has
instructed a step-up in share buyback activity. It is
the view of the Board that this policy is in the interest of all
shareholders.
Online shareholder
presentation
The Company held an online shareholder
presentation on 14 September 2023 to encourage and promote
interaction and engagement with the Company's
shareholders,
During the presentation, shareholders received
updates from the Chairman and Investment Manager and were then able
to participate in an interactive question and answer
session.
As explained in the Chairman's Statement, the
Board is holding another Online Shareholder Presentation at 11am on
12 September 2024. The event is being held ahead of the AGM in
order to allow shareholders to submit their proxy votes prior to
the AGM.
Performance
Ten Year Financial Record
Year to 31 March
|
2015
|
2016
|
2017
|
2018
|
2019
|
2020
|
2021
|
2022
|
2023
|
2024
|
Total income (£'000)
|
341
|
374
|
3,104
|
3,318
|
3,602
|
5,185
|
4,517
|
5,059
|
6,123
|
4,903
|
Per share (p)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Net revenue
(loss)/return
|
(0.39)
|
(1.06)
|
(0.28)
|
(0.71)
|
(0.35)
|
2.08
|
0.19
|
(0.28)
|
(0.59)
|
(3.77)
|
DividendsA
|
n/a
|
n/a
|
n/a
|
n/a
|
n/a
|
1.00
|
n/a
|
n/a
|
n/a
|
n/a
|
Total return/(loss)
|
121.94
|
(23.42)
|
125.81
|
2.12
|
41.90
|
(120.34)
|
216.25
|
69.64
|
(60.00)
|
168.85
|
Net asset value per share
(p)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Basic
|
385.49
|
362.07
|
487.88
|
490.00
|
531.90
|
411.41
|
627.05
|
697.30
|
641.32
|
819.56
|
Shareholders' funds
(£'000)
|
227,708
|
213,874
|
288,190
|
289,444
|
314,196
|
241,583
|
366,106
|
403,995
|
357,919
|
427,054
|
A 2020 dividend
represents 0.22p per share paid from revenue reserves and 0.78p per
share paid from capital reserves. ​
​ ​ ​ ​ ​ ​ ​ ​ ​
|
Top Ten Investments
As at 31 March 2024
8.1%
|
ICICI Bank
|
​
|
5.6%
|
HDFC Bank
|
ICICI Bank has been delivering
superior growth and returns improvement without compromising on
asset quality. It has leveraged on its scale as well as retail and
digital franchise to grow in mortgages and also growing off a low
base in business banking and SMEs.
|
​
|
HDFC Bank is India's leading
private sector bank that now has a complete suite of retail banking
products after the merger with HDFC, India's leading provider of
mortgage finance. The bank has solid underwriting standards and a
progressive digital stance, further strengthening its competitive
edge.
|
​
|
​
|
​
|
​
|
​
|
5.6%
|
Bharti Airtel
|
​
|
4.9%
|
Infosys
|
Bharti Airtel remains the leading
telecom service provider with a pan-India reach and sophisticated
customer base with higher average mobile spending.
|
​
|
One of India's best software
developers, it continues to impress with its strong management,
solid balance sheet and sustainable business model.
|
​
|
​
|
​
|
​
|
​
|
4.7%
|
Power Grid Corporation of
India
|
​
|
4.6%
|
Ultratech Cement
|
Power Grid Corporation of India
forms the backbone of India's electricity infrastructure. It is
poised to play a key role in the growth of renewable energy
delivery to the grid over the next few decades as the government
plans ambitious renewable targets for the electricity
sector.
|
​
|
A clear industry leader in India's
cement industry, backed by strong brand recognition, a good
distribution and sales network and solid product quality. Its focus
on cost efficiency and an improving energy mix have given UltraTech
a cost advantage.
|
​
|
​
|
​
|
​
|
​
|
4.1%
|
SBI Life Insurance
|
​
|
3.8%
|
Aegis Logistics
|
Among the leading domestic life
insurers, SBI Life's competitive edge comes from a wide reach of
SBI branches, highly productive agents, a low cost ratio and a
reputable SBI brand.
|
​
|
A strong and conservative player
in India's gas and liquids logistics sector, with a first mover
advantage in key ports and a fair amount of capacity expansion to
come. Its storage and logistics segment is benefitting from the
burgeoning flow of chemicals and fuels across the country. In
addition, the government's push for the adoption of cleaner energy
has boosted its liquefied natural gas business.
|
​
|
​
|
​
|
​
|
​
|
3.8%
|
Tata Consultancy
Services
|
​
|
3.8%
|
Hindustan Unilever
|
A top-class Indian IT services
provider with the most consistent execution and lowest attrition
rates. It is a long-term compounder with a decent outlook for
revenue growth and order wins over the medium term.
|
​
|
The largest fast-moving consumer
goods company (FMCG) in India, with an unrivalled portfolio of
brands, an extensive nationwide distribution network, and a long
and successful operational track record in the country.
|
Portfolio
As at 31 March
2024 ​ ​ ​
|
​
|
​
|
Valuation
|
Total
assets
|
​
|
​
|
2024
|
2024
|
Company
|
Industry
|
£'000
|
%
|
ICICI Bank
|
Financials
|
36,682
|
8.1
|
HDFC Bank
|
Financials
|
25,250
|
5.6
|
Bharti Airtel
|
Communication Services
|
25,234
|
5.6
|
Infosys
|
Information Technology
|
22,465
|
4.9
|
Power Grid Corporation of
India
|
Utilities
|
21,141
|
4.7
|
Ultratech Cement
|
Materials
|
20,845
|
4.6
|
SBI Life Insurance
|
Financials
|
18,720
|
4.1
|
Aegis Logistics
|
Energy
|
17,484
|
3.8
|
Tata Consultancy
Services
|
Information Technology
|
17,202
|
3.8
|
Hindustan Unilever
|
Consumer Staples
|
17,098
|
3.8
|
Ten largest investments
|
​
|
222,121
|
49.0
|
Prestige Estates
Projects
|
Real Estate
|
16,710
|
3.7
|
Godrej Properties
|
Real Estate
|
14,415
|
3.2
|
Axis Bank
|
Financials
|
13,997
|
3.1
|
Mahindra & Mahindra
|
Consumer Discretionary
|
13,737
|
3.1
|
Maruti Suzuki India
|
Consumer Discretionary
|
11,445
|
2.5
|
Titan
|
Consumer Discretionary
|
11,076
|
2.5
|
KEI Industries
|
Industrials
|
10,789
|
2.4
|
ABB India
|
Industrials
|
10,566
|
2.3
|
PB Fintech
|
Financials
|
10,514
|
2.3
|
Cholamandalam Investment and
Finance
|
Financials
|
9,633
|
2.1
|
Top twenty investments
|
​
|
345,003
|
76.2
|
Nestlé India
|
Consumer Staples
|
9,425
|
2.1
|
J.B. Chemicals &
Pharmaceuticals
|
Healthcare
|
9,290
|
2.0
|
Vijaya Diagnostic
Centre
|
Healthcare
|
8,960
|
2.0
|
KFIN Technologies
|
Financials
|
7,889
|
1.7
|
Tata Consumer Products
|
Consumer Staples
|
7,755
|
1.7
|
Siemens
|
Industrials
|
7,473
|
1.6
|
Pidilite Industries
|
Materials
|
7,265
|
1.6
|
Havells India
|
Industrials
|
7,118
|
1.6
|
Fortis Healthcare
|
Healthcare
|
6,899
|
1.5
|
Hindalco Industries
|
Materials
|
6,693
|
1.5
|
Top thirty investments
|
​
|
423,770
|
93.5
|
Aptus Value Housing
Finance
|
Financials
|
6,547
|
1.5
|
Info Edge
|
Communication Services
|
5,528
|
1.2
|
APAR Industries
|
Industrials
|
5,436
|
1.2
|
Container Corporation of
India
|
Industrials
|
5,431
|
1.2
|
Affle India
|
Communication Services
|
4,427
|
1.0
|
Syngene International
|
Healthcare
|
4,404
|
1.0
|
Coromandel
International
|
Materials
|
3,008
|
0.7
|
Phoenix Mills
|
Real Estate
|
2,485
|
0.5
|
UNO Minda
|
Consumer Discretionary
|
2,476
|
0.5
|
Coforge
|
Information Technology
|
2,110
|
0.5
|
Top forty investments
|
​
|
465,622
|
102.8
|
Global Health India
|
Healthcare
|
167
|
-
|
Total investments
|
​
|
465,789
|
102.8
|
Net liabilities (before deducting
prior charges)A
|
​
|
(12,782)
|
(2.8)
|
Total
assetsA,B
|
​
|
453,007
|
100.0
|
A Excluding loan
balances
B Including net liabilities. ​
​ ​
|
Unless otherwise stated,
investments are in common stock. ​ ​ ​
|
Sector Analysis
Sector Breakdown
As at 31 March 2024
|
Percentage
|
Financials
|
27.7
|
Industrials
|
10.1
|
Information Technology
|
9.0
|
Consumer Discretionary
|
8.3
|
Materials
|
8.1
|
Communication Services
|
7.5
|
Consumer Staples
|
7.4
|
Real Estate
|
7.2
|
Healthcare
|
6.4
|
Utilities
|
4.5
|
Energy
|
3.8
|
|
100.0
|
Directors' Report
The Directors present their Report and the
audited Financial Statements of the Company for the year ended 31
March 2024, taking account of any events between the year end and
the date of approval of this Report.
Results
The Company's results, including its performance
for the year against its Key Performance Indicators ("KPIs"), may
be found above.
Investment Trust Status and ISA
Compliance
The Company is registered as a public limited
company in England & Wales under registration number 02902424
and has been accepted by HM Revenue & Customs as an investment
trust for accounting periods beginning on or after 1 April 2012,
subject to the Company continuing to meet the eligibility
conditions of s1158 of the Corporation Tax Act 2010 (as amended)
and S.I. 2011/2099. In the opinion of the Directors, the Company's
affairs have been conducted in a manner to satisfy these conditions
to enable it to continue to qualify as an investment trust for the
year ended 31 March 2024. The Company intends to manage its affairs
so that its shares will be qualifying investments for the stocks
and shares component of an Individual Savings Account
("ISA").
Capital Structure
During the year ended 31 March 2024 the Company
bought back into treasury 3,702,011 (2023 - 2,127,206) Ordinary
shares. This was equivalent to 6.6% of the Company's issued share
capital (excluding treasury shares) at 1 April 2023 (2022 - 3.7%).
As at 31 March 2024, the Company's issued share capital consisted
of 52,107,910 Ordinary shares (2023 - 55,809,921 Ordinary shares)
with voting rights, each share holding one voting right in the
event of a poll, and an additional 6,962,230 (2023 - 3,260,219)
Ordinary shares in treasury, with no voting rights or entitlement
to receive dividends. Between 1 April 2024 and 13 June 2024
as the latest practicable date prior to approval of this Report, an
additional 564,198 Ordinary shares were bought back resulting in
the Company's issued share capital consisting of 51,543,712
Ordinary shares and an additional 7,526,428 shares in
treasury.
Ordinary shareholders are entitled to vote on
all resolutions which are proposed at general meetings of the
Company. The Ordinary shares carry a right to receive dividends. On
a winding up, after meeting the liabilities of the Company, the
surplus assets will be paid to Ordinary shareholders in proportion
to their shareholdings. There are no restrictions on the transfer
of Ordinary shares in the Company other than certain restrictions
which may from time to time be imposed by law and
regulation.
Manager and Company
Secretaries
The Company has appointed the Manager as its
alternative investment fund manager, to provide investment
management, risk management, promotional activities and
administration and company secretarial services to the Company. The
Company's portfolio is managed by the Investment Manager by way of
a group delegation agreement in place between the Manager and
Investment Manager. In addition, the Manager has sub-delegated
administrative and secretarial services to abrdn Holdings Limited
and promotional activities to abrdn Investments Limited.
Under the terms of the management agreement
("MA"), with effect from 1 April 2023, annual investment management
fees are calculated as 0.8% of the Company's net assets up to £300m
and 0.6% of net assets above £300m.
Until 31 March 2023, annual investment
management fees were calculated and charged on the same basis as
above, other than the rate was 0.85% of the Company's net assets up
to £350m and 0.70% of net assets above £350m.
There is a rebate for any fees received in
respect of any investments by the Company in investment vehicles
managed by abrdn. The MA is terminable by either party on not less
than six months' notice. In the event of termination on less than
the agreed notice period, compensation is payable to the Manager in
lieu of the unexpired notice period.
The fees, and other expenses, payable to abrdn
during the year ended 31 March 2024 are disclosed in Notes 4 and 5
to the Financial Statements. The investment management fees are
chargeable 100% to revenue.
Corporate Governance
The Company is committed to high standards of
corporate governance and its Statement of Corporate Governance is
set out below.
Directors
The Board consisted of a non-executive Chairman
and three non-executive Directors, all of whom served throughout
the year under review. The Senior Independent Director was David
Simpson, the Chairman of the Audit Committee was Andrew Robson and
the Chairman of the Management Engagement Committee was Rebecca
Donaldson.
Board Diversity
The Board recognises the importance of having a
range of skilled, experienced individuals with the right knowledge
represented on the Board in order to allow it to fulfil its
obligations. The Board also recognises the benefits and is
supportive of the principle of diversity in its recruitment of new
Board members. The Board will not display any bias for age, gender,
race, sexual orientation, religion, ethnic or national origins,
socio-economic background or disability in considering the
appointment of its Directors.
The Board will continue to ensure that all
appointments are made on the basis of merit against the
specification prepared for each appointment. In doing so, the Board
will take account of the three targets set out in the FCA's Listing
Rules, which are set out in the tables below.
The Board has resolved that the Company's year
end date is the most appropriate date for disclosure purposes. The
following information has been provided by each Director through
the completion of questionnaires. There have been no changes since
the year end as at the date of approval of this Report.
Table for reporting on gender as
at 31 March 2024
|
Number
of Board members
|
Percentage of the Board
|
Number
of senior positions on the Board
(CEO,
CFO, Chair and SID
|
Number
in executive management
|
Percentage of executive management
|
Men
|
3
|
75%
|
2
|
n/a
(note
3)
|
n/a
(note
3)
|
Women
|
1
|
25%
(note 1)
|
-
|
Not specified/prefer not to
say
|
-
|
-
|
-
|
Table for reporting on ethnic
background as at 31 March 2024
|
Number
of Board members
|
Percentage of the Board
|
Number
of senior positions on the Board
(CEO,
CFO, Chair and SID
|
Number
in executive management
|
Percentage of executive management
|
White British or other White
(including minority-white groups)
|
4
|
100%
|
100%
|
n/a
(note
3)
|
n/a
(note
3)
|
|
Minority ethnic
|
-
|
0%
(note 2)
|
|
|
Not specified/prefer not to
say
|
-
|
0%
|
-
|
|
1.
Does not meet the target that at least 40% of Directors are women
as set out in FCA Lising Rule R 9.8.6R (9)(a)(i)
2.
Does not meet the target that at least one Director is from a
minority ethnic background as set out in FCA Listing Rule 9.8.6R
(9)(a)(iii)
3.
This column is not applicable as the Company is externally managed
and does not have any executive staff, specifically it has neither
a CEO nor CFO. The Company considers that the roles of Chairman of
the Board, Senior Independent Director and Chairs of the Board
Committees are senior board positions. Rebecca Donaldson chairs the
Management Engagement Committee and therefore the Board considers
that, accordingly, the Company effectively meets the requirement
that at least one of the senior board positions is held by a
woman.
|
As shown in the above tables, the Company has
not as yet met the targets set out in the FCA's Listing Rules
9.8.6R (9)(a)(i) and LR 9.8.6R (9)(a)(iii). The Board considers its
normal size of four Directors to be appropriate for an investment
trust, and retirement of each Director at the AGM following the
ninth anniversary of their appointment to be an appropriate
individual tenure.
While the targets for diversity are inevitably
more challenging to achieve for a smaller board with infrequent
appointment opportunities, the Board is fully supportive of the
principles behind the targets and these will be carefully
considered in all future appointments. The biographical details of
the Directors are included on the Company's website and the
most recent Board appointment was in August 2022.
Chairman and Senior Independent
Directors
The Chairman is responsible for providing
effective leadership to the Board, by setting the tone of the
Company, demonstrating objective judgement and promoting a culture
of openness and debate. The Chairman facilitates the effective
contribution and encourages active engagement by each Director. In
conjunction with the Company Secretary, the Chairman ensures that
Directors receive accurate, timely and clear information to assist
them with effective decision-making. The Chairman acts upon the
results of the Board evaluation process by recognising strengths
and addressing any weaknesses and also ensures that the Board
engages with major shareholders and that all Directors understand
shareholder views.
The Senior Independent Director acts as a
sounding board for the Chairman and acts as an intermediary for
other directors, when necessary. Working closely with the
Nomination Committee, the Senior Independent Director takes
responsibility for an orderly succession process for the Chairman
and leads the annual appraisal of the Chairman's performance. The
Senior Independent Director is also available to shareholders to
discuss any concerns they may have.
The names, biographies and contribution of each
of the Directors are shown on the Company's website and indicate
their range of experience as well as length of service. Each
Director has the requisite high level and range of business and
financial experience which enables the Board to provide clear and
effective leadership and proper stewardship of the
Company.
Michael Hughes, Rebecca Donaldson, David Simpson
and Andrew Robson, each being eligible, retire and offer themselves
for individual re-election as Directors of the Company.
The Board as a whole believes that each Director
remains independent of the Manager and free of any relationship
which could materially interfere with the exercise of his or her
independent judgement on issues of strategy, performance, resources
and standards of conduct and confirms that, following formal
performance evaluations, the individuals' performance continues to
be effective and demonstrates commitment to the role.
The Directors attended scheduled Board and
Committee meetings during the year ended 31 March 2024 as follows
(with their eligibility to attend the relevant meeting in
brackets):
Director
|
Board
and Committee Meetings
|
Audit
Committee Meetings
|
Management Engagement Committee Meetings
|
Nomination
Committee Meetings
|
Michael Hughes
|
7
(7)
|
3
(3)
|
1
(1)
|
2
(2)
|
David Simpson
|
7
(7)
|
3
(3)
|
1
(1)
|
2
(2)
|
Andrew Robson
|
7
(7)
|
3
(3)
|
1
(1)
|
2
(2)
|
Rebecca Donaldson
|
7
(7)
|
3
(3)
|
1
(1)
|
2
(2)
|
|
The Board has adopted a policy that all
Directors, including the Chairman, shall not serve for more than
nine years from the date of their initial date of appointment as a
Director of the Company unless in relation to exceptional
circumstances.
The Board therefore has no hesitation in
recommending, at the next AGM, the individual re-elections of
Michael Hughes, Rebecca Donaldson, David Simpson and Andrew Robson
as Directors of the Company.
Directors' Insurances and
Indemnities
The Company maintains insurance in respect of
Directors' and Officers' liabilities in relation to their acts on
behalf of the Company. Furthermore, each Director of the Company is
entitled to be indemnified out of the assets of the Company to the
extent permitted by law against all costs, charges, losses,
expenses and liabilities incurred by them in the actual or
purported execution and/or discharge of their duties and/or the
exercise or purported exercise of their powers and/or otherwise in
relation to or in connection with their duties, powers or office.
These rights are included in the Articles of Association of the
Company and the Company has granted deeds of indemnities to each
Director on this basis.
Management of Conflicts of
Interest and Anti-Bribery Policy
The Board has a procedure in place to deal with
a situation where a Director has a conflict of interest. As part of
this process, the Directors prepare a list of other positions held
and all other conflict situations that may need to be authorised
either in relation to the Director concerned or his/her connected
persons. The Board considers each Director's situation and decides
whether to approve any conflict, taking into consideration what is
in the best interests of the Company and whether the Director's
ability to act in accordance with his/her wider duties is affected.
Each Director is required to notify the Company Secretaries of any
potential, or actual, conflict situations which will need
authorising by the Board. Authorisations given by the Board are
reviewed at each Board meeting.
No Director has a service contract with the
Company although Directors are issued with letters of appointment
upon taking up office. Other than the deeds of indemnity referred
to above, there were no contracts with the Company during, or at
the end of the year, in which any Director was
interested.
The Board takes a zero-tolerance approach to
bribery and has adopted appropriate procedures designed to prevent
bribery. abrdn also takes a zero-tolerance approach and has its own
detailed policy and procedures in place to prevent bribery and
corruption.
In relation to the corporate offence
of failing to prevent tax evasion, it is the Company's policy to
conduct all business in an honest and ethical manner. The Company
takes a zero-tolerance approach to facilitation of tax evasion
whether under UK law or under the law of any foreign country and is
committed to acting professionally, fairly and with integrity in
all its business dealings and relationships.
Board Committees
The Directors have appointed a number of
Committees as set out below. Copies of each Committee's terms of
reference, which define its responsibilities and duties, are
available on the Company's website or from the Company Secretaries,
on request.
Audit Committee
The Audit Committee's Report may be found
below.
Management Engagement
Committee
The Board has established a Management
Engagement Committee comprising all of the Directors, which was
chaired throughout the year by Rebecca Donaldson.
The Committee is responsible for reviewing
matters concerning the management agreement which exists between
the Company and the Manager together with the promotional
activities programme operated by the Manager to which the Company
contributes. The terms and conditions of the Manager's appointment,
including an evaluation of performance and fees, are reviewed
annually and were last considered at the meeting of the Committee
in November 2023.
In monitoring the performance of the Manager,
the Committee considers the investment approach and investment
record of the Manager over shorter and longer-term periods, taking
into account the Company's performance against the Benchmark and
peer group funds. The Committee also reviews the management
processes, risk control mechanisms and promotional activities of
the Manager.
The Committee considers the continuing
appointment of the Manager, on the terms agreed, to be in the
interests of the shareholders because it believes that the abrdn
has the investment management, promotional and associated
secretarial and administrative skills required for the effective
and successful operation of the Company.
Nomination Committee
The Board has established a Nomination
Committee, comprising all of the Directors, which was chaired by
Michael Hughes during the year. The Committee is responsible for
undertaking an annual evaluation of the Board as well as longer
term succession planning and, when appropriate, oversight of
appointments to the Board.
The Company engaged Lintstock Ltd, an
independent external service provider which has no other connection
to the Company, to undertake a board evaluation in March
2024. Assisted by Lintstock Ltd, the Board assessed that it
had in place the appropriate balance of skills, experience, length
of service and knowledge of the Company, while also recognising the
advantages of diversity. David Simpson, as the Senior Independent
Director, provided feedback to the Chairman.
As the Company has no employees and the Board is
comprised wholly of non-executive directors and, given the size and
nature of the Company, the Board has not established a separate
remuneration committee and Directors' fees are determined by the
Nomination Committee.
Accountability and
Audit
The responsibilities of the Directors and the
Auditor, in connection with the financial statements, appear below
and in the report of the Auditor in the Annual Report.
The Directors who held office at the date of
approval of this Directors' Report confirm that, so far as they are
each aware, there is no relevant audit information of which the
Company's Auditor is unaware, and each Director has taken all the
steps that he or she could reasonably be expected to have taken as
a Director in order to make himself or herself aware of any
relevant audit information and to establish that the Company's
Auditor is aware of that information. Additionally, there have been
no important events since the year end which warrant
disclosure.
The Directors review, as applicable, the level
of non-audit services provided by the Auditor, together with the
Auditor's procedures in connection with the provision of such
services. No non-audit services were provided by the auditor during
the year or to the date of this Report. The Directors remain
satisfied that the Auditor is objective and independent.
Going Concern
In accordance with the Financial Reporting
Council's guidance on Going Concern and Liquidity Risk, the
Directors have reviewed the Company's ability to continue as a
going concern. The Company's assets consist substantially of a
portfolio of quoted securities which in most circumstances are
realisable within a short timescale. The Directors are mindful of
the principal risks and uncertainties disclosed above and the
financial risks in Note 17 to the financial statements and have
reviewed income forecasts detailing revenue and expenses for at
least 12 months from the date of this Report. Accordingly, the
Directors believe that, the Company has adequate financial
resources to continue in operational existence for the foreseeable
future and for at least 12 months from the date of this
Report.
In August 2022, the Company entered into a
three-year, £30 million revolving credit facility (the "Facility")
with Royal Bank of Scotland International Limited (London Branch),
part of NatWest Group plc, of which £26 million was drawn down at
31 March 2024 (2023 - £30 million). The Board has set limits for
borrowing and regularly reviews the level of any gearing and
compliance with banking covenants. In advance of expiry of the
Facility in 2025, the Company will enter negotiations with its
bankers. If acceptable terms are available from the existing
bankers, or any alternative, the Company would expect to continue
to access a facility. However, should these terms not be
forthcoming, any outstanding borrowing would be repaid through the
proceeds of equity sales.
The results of stress testing prepared by the
Manager, which models a sharp decline in market levels and income,
demonstrated that the Company had the ability to raise sufficient
funds so as to both pay expenses and remain within its debt
covenants, and to continue to meet its liabilities as they fall due
for at least 12 months from the date of this Report.
Responsible Investment
The Board is aware of its duty to act in the
interests of the Company. The Board acknowledges that there are
risks associated with investment in companies which fail to conduct
business in a socially responsible manner. Responsibility for
actively monitoring the sustainability investing activities of
portfolio companies has been delegated by the Board to the Manager
which has sub-delegated that authority to the Investment Manager.
Further information may be found at: www.abrdn.com/en-gb/seeing-things-differently
Relations with
Shareholders
The Directors place great importance on
communication with shareholders. The Annual Report is widely
distributed to other parties who have an interest in the Company's
performance. Shareholders and investors may obtain up-to-date
information on the Company through its website, abrdnnewindia.co.uk, or via the abrdn's Customer
Services Department. The Company responds to letters from
shareholders on a wide range of issues.
The Board's policy is to communicate directly
with shareholders and their representative bodies without the
involvement of the management group (either the Company Secretaries
or abrdn) in situations where direct communication is required and
representatives from the Board offer to meet with major
shareholders on an annual basis in order to gauge their
views.
In addition, members of the Board may accompany
the Manager when undertaking meetings with institutional
shareholders.
The Company Secretaries only act on behalf of
the Board, not the Manager, and there is no filtering of
communication. At each Board meeting the Board receives full
details of any communication from shareholders to which the
Chairman responds, as appropriate, on behalf of the
Board.
The Notice of AGM included within the Annual
Report is normally sent out at least 20 working days in advance of
the meeting. All shareholders have the opportunity to put questions
to the Board and Manager prior to the Company's AGM.
Substantial Interests
The Company had been notified of the following
share interests above 3% in the Company as at 31 March
2024:
Shareholder
|
Number
of shares held
|
%
held
|
City of London Investment
Management
|
7,188,048
|
13.8
|
Lazard Asset Management
|
6,999,713
|
13.4
|
Clients of Interactive Investor
(execution only)
|
5,554,376
|
10.7
|
Clients of abrdn
|
5,157,120
|
9.9
|
Clients of Hargreaves Lansdown
(execution only)
|
4,215,017
|
8.1
|
Allspring Global
Investments
|
3,139,451
|
6.0
|
1607 Capital Partners
|
2,137,877
|
4.1
|
The above interests at 31 March 2024 were
unchanged at the date of approval of this Report other than in
relation to clients of abrdn, which advised the Company on 19 April
2024 of a holding of 5,188,120 shares, equivalent to 10.0% of the
Company's shares in issue (excluding treasury shares) and City of
London Investment Management, which advised the Company on 28 May
2024 of a holding of 7,232,938 shares, equivalent to 14.0% of the
Company's shares in issue (excluding treasury shares).
Annual General Meeting
The AGM will be held on 20 September 2024 and
the Notice of AGM and related notes may be found in the Annual
Report. Resolutions relating to the following items will be
proposed at the AGM as special business.
Share Repurchases (Resolution
8)
At the AGM held on 27 September 2023,
shareholders approved the renewal of the authority for the Company
to repurchase its Ordinary shares.
The principal aim of a share buy back facility
is to reduce the volatility in the discount. In addition, the
purchase of shares, when they are trading at a discount, should
result in an increase in the NAV per share for the remaining
shareholders. This authority, if conferred, will only be exercised
if to do so would result in an increase in the NAV per share for
the remaining shareholders, and if it is in the best interests of
shareholders generally. Any purchase of shares will be made within
guidelines established from time to time by the Board. It is
proposed to seek shareholder authority to renew this facility for
another year at the AGM. Under the Listing Rules, the maximum price
that may be paid on the exercise of this authority must not exceed
the higher of: (i) 105% of the average of the middle market
quotations for the shares over the five business days immediately
preceding the date of purchase; and (ii) the higher of the last
independent trade and the highest current independent bid on the
trading venue where the purchase is carried out. The minimum price
which may be paid is 25p per share. Shares which are purchased
under this authority will either be cancelled or held as treasury
shares.
Renewal of the authority to buy back shares is
sought at the AGM as the Board considers that this mechanism has
assisted in lowering the volatility of the discount reflected in
the Company's share price and is also accretive, in NAV terms, for
continuing shareholders. Special resolution 8 in the Notice of AGM
will, if passed, renew the authority to purchase in the market a
maximum of 14.99% of shares in issue as at 13 June 2024, being the
nearest practicable date to the approval of this Report (equivalent
to approximately 7.7 million Ordinary shares). Such authority will
expire on the date of the AGM in 2025 or on 30 September 2025,
whichever is earlier. This means in effect that the authority will
have to be renewed at the next AGM, or earlier, if the authority
has been exhausted.
Issue of Shares (Resolutions 9 and
10)
Ordinary resolution 9 in the Notice of AGM will,
if passed, renew the authority to allot unissued share capital up
to an aggregate of 10%, equivalent to approximately 5.1 million
Ordinary shares, of the Company's existing issued share capital,
excluding treasury shares, as at 13 June 2024, being the nearest
practicable date to the approval of this Report). Such authority
will expire on the date of the AGM in 2025 or on 30 September 2025,
whichever is earlier, which means that the authority will have to
be renewed at the next AGM or, earlier, if the authority has
been exhausted.
When shares are to be allotted for cash, the
Companies Act 2006 (the "Act") provides that existing shareholders
have pre-emption rights and that the new shares must be offered
first to such shareholders in proportion to their existing holding
of shares. However, shareholders can, by Special resolution,
authorise the Directors to allot shares otherwise than by a pro
rata issue to existing shareholders. Special resolution 10 will, if
passed, give the Directors power to allot for cash equity
securities up to 10% (equivalent to approximately 5.1 million
Ordinary shares), of the Company's existing issued share capital as
at the date of 13 June 2024, being the latest practicable date
prior to the approval of this Report), as if Section 561(1) of the
Act did not apply. This is the same nominal amount of share capital
which the Directors are seeking the authority to allot pursuant to
resolution 9.
This authority will expire on the date of the
AGM in 2025 or on 30 September 2025, whichever is earlier, which
means that the authority will have to be renewed at the next AGM
or, earlier, if the authority has been exhausted. This authority
will not be used in connection with a rights issue by the
Company.
The Directors intend to use the authorities
given by resolutions 9 and 10 to allot shares, or sell shares from
treasury, and disapply pre-emption rights only in circumstances
where this will be clearly beneficial to shareholders as a whole.
The issue proceeds would be available for investment in line with
the Company's investment policy.
The Company is permitted to buy back and hold
shares in treasury and then sell them at a later date for cash,
rather than cancelling them. The Treasury Share Regulations require
such sale to be on a pre-emptive, pro rata, basis to existing
shareholders unless shareholders agree by Special resolution to
disapply such pre-emption rights. Accordingly, in addition to
giving the Directors power to allot unissued Ordinary share capital
on a non pre-emptive basis, resolution 10, if passed, will give the
Directors authority to sell Ordinary shares from treasury on a non
pre-emptive basis. No dividends may be paid on any shares held in
treasury and no voting rights will attach to such shares. The
benefit of the ability to hold treasury shares is that such shares
may be resold.
This should give the Company greater flexibility
in managing its share capital and improve liquidity in its shares.
The Board would only expect to issue new Ordinary shares or sell
Ordinary shares from treasury at a price per Ordinary share which
represented a premium to the NAV per share. It is also the
intention of the Board that sales from treasury would only take
place when the Board believes that to do so would assist in the
provision of liquidity to the market.
Recommendation
The Board considers all of the Resolutions to be
put to shareholders at the AGM to be in the best interests of the
Company and its members as a whole and are likely to promote the
success of the Company for the benefit of its members as a whole.
Accordingly, the Board unanimously recommends that shareholders
should vote in favour of the resolutions to be proposed at the
Annual General Meeting, as they intend to do in respect of their
own shareholdings, amounting to 20,446 Ordinary shares.
Additional Information
Where not provided elsewhere in the Directors'
Report, the following provides the additional information required
to be disclosed by The Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008.
The Company is not aware of any significant
agreements to which it is a party, apart from the management
agreement, that take effect, alter or terminate upon a change of
control of the Company following a takeover. Other than the
management agreement with the Manager, the Company is not aware of
any contractual or other agreements which are essential to its
business which might reasonably be expected to have to been
disclosed in the Directors' Report.
The financial risk management objectives and
policies arising from its financial instruments and the exposure of
the Company to risk are disclosed in Note 17 to the Financial
Statements.
Michael Hughes,
Chairman
13 June 2024
Statement of Corporate Governance
abrdn New India Investment Trust plc (the
"Company") is committed to high standards of corporate governance.
The Board is accountable to the Company's shareholders for good
governance and this statement describes how the Company has applied
the principles identified in the UK Corporate Governance Code as
published in July 2018 (the "UK Code"), which is available on the
Financial Reporting Council's (the "FRC") website:
frc.org.uk and is applicable for the
Company's Year.
The Board has also considered the principles and
provisions of the AIC Code of Corporate Governance as published in
February 2019 (the "AIC Code"). The AIC Code addresses the
principles and provisions set out in the UK Code, as well as
setting out additional provisions on issues that are of specific
relevance to the Company. The AIC Code is available on the AIC's
website: theaic.co.uk.
The Board considers that reporting against the
principles and provisions of the AIC Code, which has been endorsed
by the FRC, provides more relevant information to
shareholders.
The Board confirms that, during the year ended
31 March 2024, the Company has complied with the provisions of the
AIC Code, and the relevant provisions of the UK Code, except for
those provisions relating to:
· the
composition of the Audit Committee (AIC Code provision 29): the
other Directors consider that it is appropriate for the Chairman of
the Board to be a member of, but not chair, the Audit Committee,
due to the Board's small size, the lack of any perceived conflict
of interest, and because the other Directors believe that Michael
Hughes was independent on appointment and continues to be
independent; and
· the
establishment of a remuneration committee (AIC Code provisions 37):
for the reasons set out in the AIC Code the Board considers that
this provision is not relevant to the position of the Company,
being an externally managed investment company. In particular, all
of the Company's day-to-day management and administrative functions
are outsourced to third parties. As a result, the Company has no
executive directors, employees or internal operations. The Company
has therefore not reported further in respect of this
provision.
Further information on how the Company has
applied the AIC Code, the UK Code, the Companies Act 2006 and
the FCA's DTR 7.2.6 can be found in the Annual Report as
follows:
· the
composition and operation of the Board and its Committees are
detailed in the Directors' Report and in the Audit Committee's
report;
· the Board's
policy on diversity and information on Board diversity is in the
Directors' Report;
· the Company's
approach to internal control and risk management is included in the
Audit Committee's Report;
· the
contractual arrangements with the Manager and details of the annual
assessment of the Manager may be found in the Directors'
Report
· the Company's
capital structure and voting rights are summarised in the
Directors' Report;
· the
substantial interests disclosed in the Company's shares are listed
in the Directors' Report;
· the rules
concerning the appointment and replacement of Directors are
contained in the Company's Articles of Association and are
summarised in the Directors' Report. There are no agreements
between the Company and its Directors concerning compensation for
loss of office; and
· the powers to
issue or buy back the Company's ordinary shares, which are sought
annually, and any amendments to the Company's Articles of
Association require a special resolution (75% majority) to be
passed by shareholders and information on these resolutions may be
found in the Directors' Report.
Michael Hughes,
Chairman
13 June 2024
Audit Committee's Report
The Audit Committee presents its Report for the
year ended 31 March 2024.
Committee Composition
The Directors have appointed an Audit Committee
(the "Committee") consisting of the whole Board, which was chaired
by Andrew Robson throughout the year.
The other members of the Committee consider that
it is appropriate for the Chairman of the Board to be a member of,
but not chair, the Committee. The Chairman of the Board possesses
significant financial experience which the other Committee members
consider to be valuable. The Board is small and, if the Chairman of
the Board were to be excluded, the Committee would comprise only
three Directors which may lead to quorum issues if decisions are
required at short notice. In addition, the other Committee members
are satisfied that there is no conflict of interest arising and
value the input of the Chairman of the Board to the Committee's
deliberations.
The Directors have satisfied themselves both
that at least one of the Committee's members has recent and
relevant financial experience (Andrew Robson is a member of the
Institute of Chartered Accountants in England and Wales), and that
the Committee as a whole possesses competence relevant to the
investment trust sector.
Role of the Audit
Committee
The principal function of the Committee is to
assist the Board in relation to the reporting of financial
information, the review of financial controls and the
management
of risk.
The Committee meets not less than twice each
year, in line with the cycle of annual and half-yearly reports,
which is considered by the Directors to be a frequency appropriate
to the size and complexity of the Company. The Committee has
defined terms of reference which are reviewed and re-assessed for
their adequacy on an annual basis. Copies of the terms of reference
are available from the Company's website or from the Company
Secretaries, on request.
In summary, the Committee's main functions
are:
· to review and
monitor the internal control systems and risk management systems
(including review of non-financial risks) on which the Company is
reliant;
· to consider
annually whether there is a need for the Company to have its own
internal audit function;
· to review and
monitor the integrity of the half-yearly report and annual
financial statements of the Company;
· to review,
and report to the Board on, the significant financial reporting
issues and judgements made in connection with the preparation of
the Company's financial statements, half-yearly reports,
announcements and related formal statements;
· to review the
content of the Annual Report and advise the Board on whether, taken
as a whole, it is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company's
position and performance, business model and strategy;
· to meet with
the Auditor to review their proposed audit programme of work and
the findings of the Auditor. The Committee shall also use this as
an opportunity to assess the effectiveness of the audit
process;
· to develop
and implement policy on the engagement of the Auditor to supply
non-audit services. During the year under review, no non-audit
services were provided to the Company by KPMG LLP. All non-audit
services must be approved in advance by the Committee and will be
reviewed in light of statutory requirements to maintain the
Auditor's independence;
· to review a
statement from the Manager detailing the arrangements in place
within abrdn whereby its staff may, in confidence, escalate
concerns about possible improprieties in matters of financial
reporting or other matters (whistleblowing);
· to review and
approve the remuneration and terms of engagement of the
Auditor;
· to monitor
and review annually the Auditor's independence, objectivity,
effectiveness, resources and qualification;
· to monitor
the requirement for rotation of the Auditor and to oversee any
tender for the external audit of the Company;
· to keep under
review the appointment of the Auditor and to recommend to the Board
and shareholders the reappointment of the existing auditor or, if
appropriate, the appointment of a new Auditor; and
· to evaluate
its own performance each year, in relation to discharging its main
functions, by means of a section devoted to the Committee within
the Directors' annual self-evaluation.
Activities during the
Year
The Committee met on three occasions during the
year to consider the Annual Report, the Half-Yearly Report and the
Company's system of risk management and internal control. Reports
from abrdn's internal audit, business risk and compliance
departments were considered by the Committee at these
meetings.
Review of Internal Controls Systems
and Risk Management
The Board is ultimately responsible for the
Company's system of internal control and risk management and for
reviewing its effectiveness. The Committee confirms that there is a
robust process for identifying, evaluating and managing the
Company's significant business and operational risks, that it was
in place for the year ended 31 March 2024 and up to the date of
approval of this Annual Report, that it is regularly reviewed by
the Board and accords with the FRC guidance on internal
controls.
The principal risks and uncertainties facing the
Company are identified in the Strategic Report.
The design, implementation and maintenance of
controls and procedures to safeguard the assets of the Company and,
to manage its affairs properly, extends to operational and
compliance controls and risk management. This includes controls
over financial reporting risks related to the preparation of the
Annual Report, which are delegated to the Manager as part of the
Management Agreement ("MA") and the Committee receives regular
reports from the Manager as to how these controls
are operating.
Internal control and risk management systems are
monitored and supported by the Manager's business risk and
compliance functions which undertake periodic examination of
business processes, including compliance with the terms of the MA,
and ensures that any recommendations to improve controls are
implemented.
Risk is considered in the context of the FRC and
the UK Code guidance and includes financial, regulatory, market,
operational and reputational risk. Risks are identified and
documented through a risk heat-map, which is a pictorial
representation of the risks faced by the Company, after taking
account of any mitigating controls to minimise
the risk, ranked in order of likelihood and impact on the
Company.
The key components designed to provide effective
risk management and internal control are outlined below:
· the Manager
prepares forecasts and management accounts which allow the Board to
assess the Company's activities and review its performance; the
emphasis is on obtaining the relevant degree of assurance and not
merely reporting by exception;
· the Board and
Manager have agreed clearly-defined investment criteria, specified
levels of authority and exposure limits. Reports on these issues,
including performance statistics and investment valuations, are
regularly submitted to the Board, and there are meetings with the
Manger and Investment Manager as appropriate;
· as a matter
of course, the Manager's compliance department continually reviews
the Manager's operations; and
· written
agreements are in place which specifically define the roles and
responsibilities of the Manager and other third-party service
providers.
The Committee has considered the need for an
internal audit function but, due to the delegation of certain
business functions to the Manager, has decided to place reliance on
abrdn's systems and internal audit procedures, including the
ISAE3402 Report, a global assurance standard for reporting on
internal controls for service organisations, commissioned by the
Manager's immediate parent company, abrdn. At its May 2024 meeting,
the Committee carried out an annual assessment of risk management
and internal controls for the year ended 31 March 2024 by
considering documentation from the Manager, including the internal
audit and compliance functions, and taking account of events since
31 March 2024.
The system of internal control and risk
management is designed to meet the Company's particular needs and
the risks to which it is exposed. Accordingly, this system is
designed to manage, rather than eliminate, the risk of failure to
achieve business objectives and, by its nature, can only provide
reasonable, and not absolute, assurance against misstatement and
loss.
External Agencies
The Board has contractually delegated to
external agencies, including the Manager and other service
providers, certain services: the management of the investment
portfolio, the depositary services (which include the custody and
safeguarding of the assets), the share registration services and
the day-to-day accounting and company secretarial requirements.
Each of these contracts was entered into after full and proper
consideration by the Board of the quality and cost of services
offered in so far as they relate to the affairs of the Company. The
Committee receives and considers reports from each service
provider, including the Manager, on a regular basis. In addition,
ad hoc reports and information are supplied to the Board as
requested.
Significant Financial Reporting
Issues addressed
During its review of the Company's financial
statements for the year ended 31 March 2024, the Committee
identified one potentially significant financial reporting risk
facing the Company which is unchanged from the prior year, namely
valuation and existence of investments, as well as several
additional risks, which also reflected the Auditor's assessment of
the principal financial statement risks affecting the Company as
part of the Auditor's planning and reporting of the year end
audit.
Valuation and Existence of
Investments
The valuation of investments is undertaken in
accordance with the accounting policies, disclosed in Notes 2(a)
and 2(g) to the financial statements. With reference to the IFRS 13
fair value hierarchy, all of the Company's investments at 31 March
2024 were categorised as Level 1 as they are considered liquid and
quoted in active markets. The portfolio is reviewed and verified by
the Manager on a regular basis and management accounts including a
full portfolio listing are prepared each month and circulated to
the Board. BNP Paribas Trust Corporation UK Limited (the
"Depositary") has been appointed as depositary to safeguard the
assets of the Company. The Depositary checks the consistency and
accuracy of its records on a monthly basis and reports its findings
to the Manager. Separately, the investment portfolio is
reconciled regularly by the Manager.
Other issues addressed
As well as fraud risk and corporate governance
and disclosures, the other accounting area of financial reporting
particularly considered by the Committee was compliance with
Sections 1158 and 1159 of the Corporation Tax Act 2010.
Approval of the Company as an investment trust under those sections
for financial years commencing on or after 1 April 2012 has been
obtained and ongoing compliance with the eligibility criteria is
monitored on a regular basis by the Manager and reported to the
Directors.
In addition the Committee conducted its annual
review of the Auditor (see below) and oversaw the transition to a
new senior statutory auditor. The Committee also reviewed and
discussed with the Manager and Auditor, certain issues in relation
to the calculation of Indian capital gains tax.
Review of Auditor
The Committee has reviewed, and considered
appropriate, the effectiveness of the Auditor including:
· Independence - the Auditor discusses with the
Committee, at least annually, the steps it takes to ensure its
independence and objectivity and makes the Committee aware of any
potential issues, explaining all relevant safeguards;
· Quality of audit work - including the ability to
resolve issues in a timely manner (identified issues are
satisfactorily and promptly resolved), its
communications/presentation of outputs (the explanation of the
audit plan, any deviations from it and the subsequent audit
findings are comprehensive and comprehensible), and working
relationship with management (the Auditor has an effective working
relationship with the Manager). The Committee was satisfied that
the Independent Auditor demonstrated an appropriate level of
scepticism of the Manager's judgement - an example was the
interpretation of Indian capital gains tax legislation, where the
Manager had pursed a prudent approach; and
· Quality of people and service - including
continuity and succession plans (the audit team is made up of
sufficient, suitably experienced staff with provision made for
knowledge of the investment trust sector and retention on rotation
of the senior statutory auditor).
Tenure and Reappointment of KPMG
LLP as Auditor
KPMG has expressed its willingness to be
reappointed auditor to the Company. Resolution 7, which is to be
put to shareholders at the forthcoming AGM, proposes the
reappointment of KPMG as Independent Auditor of the Company, and
also seeks authorisation for the Directors to fix KPMG's
remuneration for the year to 31 March 2025.
Listed companies are required to tender the
external audit at least every ten years and change audit firm at
least every twenty years. The Committee last undertook an audit
tender process in 2016 when KPMG LLP was appointed as auditor in
respect of financial years ended on or after 31 March 2017. The
Company is required to tender the external audit no later than for
the year ending 31 March 2027. In accordance with professional and
regulatory standards, the audit director responsible for the audit
is rotated at least every five years in order to protect
independence and objectivity and to provide fresh challenge to the
business. The year ended 31 March 2024 is the first year for which
Carla Cassidy has served as the senior statutory
auditor.
Andrew Robson
Chairman of the Audit Committee
13 June 2024
Directors' Remuneration Report
This Directors' Remuneration Report comprises
three parts:
1. a Remuneration Policy,
which is subject to a binding shareholder vote every three years -
was most recently approved by shareholders at the AGM on 27
September 2023 where the votes for the relevant resolution, on a
poll, were: For - 32,556,121 votes (99.8%); Against - 55,148 votes
(0.2%); and Withheld - 28,130 votes. The Remuneration Policy will
be put to shareholders again at the AGM in 2026;
2. an annual Implementation
Report, which is subject to an advisory vote; and
3. an Annual
Statement.
The law requires the Company's Auditor to audit
certain of the disclosures provided. Where disclosures have been
audited, they are indicated as such. The Auditor's opinion is
included in their report.
The Directors' Remuneration Policy and level of
Directors' remuneration are determined by the Nomination Committee,
which was chaired by Michael Hughes throughout the year, and
comprises all of the Directors. The Remuneration Policy is reviewed
by the Nomination Committee on an annual basis.
Remuneration Policy
The Board's policy is that the remuneration of
non-executive Directors should be sufficient to attract Directors
of the quality required to run the Company successfully. The
remuneration should also reflect the nature of the Directors'
duties, responsibilities and the value of their time spent and be
fair and comparable to that of other investment trusts that are
similar in size and have a similar capital structures and
investment objectives.
Appointment
· The Company
only intends to appoint non-executive Directors.
· All the
Directors are non-executive appointed under the terms of Letters of
Appointment.
· Directors
must retire and be subject to election, at the first AGM after
their appointment, and re-election at least every three years
thereafter, although the Board has approved a policy of annual
re-election.
· New
appointments to the Board will be placed on the fee applicable to
all Directors at the time of appointment.
· No incentive
or introductory fees will be paid to encourage a
Directorship.
· The Directors
are not eligible for bonuses, pension benefits, share options, long
term incentive schemes or other benefits.
· Directors are
entitled to reimbursement of out-of-pocket expenses incurred in
connection with the performance of their duties, including travel
expenses.
· The Company
indemnifies its Directors for all costs, charges, losses, expenses
and liabilities which may be incurred in the discharge of their
duties.
Performance, Service Contracts,
Compensation and Loss of Office
· The
Directors' remuneration is not subject to any performance-related
fee.
· No Director
has a service contract.
· No Director
was interested in contracts with the Company during the period or
subsequently.
· The terms of
appointment provide that a Director may be removed without
notice.
· Compensation
will not be due upon leaving office.
· No Director
is entitled to any other monetary payment or to any assets of the
Company.
Statement of Voting at General
Meeting
At the Company's last AGM, held on 27 September
2023, shareholders approved the Directors' Remuneration Report
(other than the Directors' Remuneration Policy) in respect of the
year ended 31 March 2023 and the following proxy votes were
received on the Resolution: For - 32,556,143 votes (99.8%); Against
- 55,146 votes (0.2%); and Withheld - 28,109 votes.
The fact that the Remuneration Policy is subject
to a binding vote at every third AGM does not imply any change on
the part of the Company. The principles remain the same as for
previous years. There have been no changes to the Directors'
Remuneration Policy during the period of this Report nor are there
any proposals for the foreseeable future.
This part of the Remuneration Report provides
details of the Company's Remuneration Policy for Directors of the
Company. This policy takes into consideration the principles of the
UK Corporate Governance Code. No shareholder views were sought in
setting the Remuneration Policy although any comments received from
shareholders would be considered on an ongoing basis. As the
Company has no employees and the Board is comprised wholly of
non-executive Directors and, given the size and nature of the
Company, the Board has not established a separate Remuneration
Committee during the year under review. The Nomination Committee is
responsible for determining Directors' remuneration.
The Directors' Remuneration Policy was approved
by shareholders at the AGM on 27 September 2023.
Implementation Report
The Directors are non-executive and the limit on
their aggregate annual fees is set at £200,000 within the Company's
Articles of Association. This limit may only be amended by
shareholder resolution and a resolution to increase the limit from
£150,000 was last approved by shareholders at the AGM in
2018.
Review of Directors'
Fees
The levels of fees for the year and the
preceding year are set out in the table below.
Year ended
|
31
March 2024
£
|
31
March 2023
£
|
Chairman
|
40,000
|
38,000
|
Chairman of Audit
Committee
|
34,500
|
33,000
|
Director
|
30,000
|
29,000
|
The Nomination Committee carried out a review
of Directors' annual fees during the year and concluded that there
should be no change for the year to 31 March 2025. There are no
further fees to disclose as the Company has no employees, chief
executive or executive directors.
Spend on Pay
As the Company has no employees, the Directors
do not consider it appropriate to present a table comparing
remuneration paid to employees with distributions to shareholders.
The fees paid to Directors are shown in the table below.
Company Performance
During the year the Board carried out a review
of investment performance. The graph shows the share price total
return (assuming all dividends are reinvested) to Ordinary
shareholders compared to the total return from the Benchmark for
the ten-year period to 31 March 2024 (rebased to 100 at 31 March
2014). This Benchmark was selected for comparison purposes as it is
used by the Board for investment performance
measurement.
Fees Payable (Audited)
The Directors who served in the year received
the fees, as set out in the table below, which excluded employers'
National Insurance contributions.
|
Year
ended
|
Year
ended
|
|
31
March 2024
|
31
March 2023
|
Director
|
£
|
£
|
Michael Hughes
A
|
40,000
|
33,803
|
David Simpson
|
30,000
|
29,000
|
Andrew Robson
B
|
34,500
|
21,355
|
Rebecca Donaldson
|
30,000
|
29,000
|
Hasan Askari
C
|
n/a
|
19,036
|
Stephen White
C
|
n/a
|
16,317
|
Total
|
134,500
|
148,511
|
A Appointed as Chairman on 28 September 2022.
B Appointed as a Director on 1 August 2022 and Chairman of the
Audit Committee on September 2022.
|
C Retired as a Director on 28 September 2022.
|
Fees are pro-rated where a change takes place
during a financial year. There were no payments to third parties
from the fees referred to in the table above.
Directors' Interests in the
Company (Audited)
The Directors are not required to have a
shareholding in the Company. The Directors (including their
connected persons) at 31 March 2024 and 31 March 2023 had no
interest in the share capital of the Company other than those
interests, all of which are beneficial, in the table below, which
were also unchanged as at the date of this Report:
|
31
March 2024
|
31
March 2023
|
|
Ord.
25p
|
Ord.
25p
|
Michael Hughes
|
8,115
|
8,115
|
David Simpson
|
3,860
|
3,860
|
Andrew Robson
|
4,000
|
4,000
|
Rebecca Donaldson
|
4,471
|
4,471
|
Annual Percentage Change in
Directors 'Remuneration (Audited)
The table below sets out the annual percentage
change in Directors' fees for the past year.
|
Year
ended
31
March
2024
%
|
Year
ended
31
March
2023
%
|
Year
ended
31
March
2022
%
|
Year
ended 31 March
2021
%
|
Michael Hughes
A
|
18.3
|
22.9
|
1.9
|
1.9
|
David Simpson
B
|
3.4
|
153.1
|
n/a
|
n/a
|
Andrew Robson
C
|
61.6
|
n/a
|
n/a
|
n/a
|
Rebecca Donaldson
D
|
3.5
|
5.5
|
74.6
|
n/a
|
Hasan Askari
E
|
n/a
|
-47.8
|
1.4
|
1.4
|
Stephen White
E
|
n/a
|
-46.5
|
1.7
|
1.7
|
Rachel Beagles
F
|
n/a
|
n/a
|
n/a
|
-51.0
|
A Appointed as a Director on 7 September 2026 and Chairman on
28 September 2022.
B Appointed as a Director on 1 November 2021 and Senior
Independent Director on 28 September 2022.
C Appointed as a Director on 1 August 2022 and Chairman of the
Audit Committee on 28 September 2022.
D Appointed as a Director on 1 September 2020.
E Retired as a Director on 28 September 2022.
F Retired as a Director on 23 September 2020.
|
Annual Statement
On behalf of the Board and in accordance with
Part 2 of Schedule 8 of the Large and Medium-sized Companies and
Groups (Accounts and Reports) (Amendment) Regulations 2013, the
Board confirms that the above Report on Remuneration Policy and
Remuneration Implementation summarises, as applicable, for the year
ended 31 March 2024:
· the major
decisions on Directors' remuneration;
· any
substantial changes relating to Directors' remuneration made during
the year; and
· the context
in which the changes occurred and in which decisions have been
taken.
Michael Hughes,
Chairman
13 June 2024
Statement of Directors' responsibilities in respect of
the Annual Report and financial statements
The Directors are responsible for preparing the
Annual Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year. Under that law
they have elected to prepare the financial statements in accordance
with UK-adopted international accounting standards and applicable
law.
Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Company and of
its profit or loss for that period. In preparing these
financial statements, the Directors are required
to:
· select
suitable accounting policies and then apply them
consistently;
· make
judgements and estimates that are reasonable, relevant and
reliable;
· state whether
they have been prepared in accordance with UK adopted international
accounting standards;
· assess the
Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern; and
· use the going
concern basis of accounting unless they either intend to liquidate
the Company or to cease operations or have no realistic alternative
but to do so.
The Directors are responsible for keeping
adequate accounting records that are sufficient to show and explain
the Company's transactions and disclose with reasonable accuracy at
any time the financial position of the Company and enable them to
ensure that its financial statements comply with the Companies Act
2006. They are responsible for such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to
fraud or error, and have general responsibility for taking such
steps as are reasonably open to them to safeguard the assets of the
Company and to prevent and detect fraud and other
irregularities.
Under applicable law and regulations, the
Directors are also responsible for preparing a Strategic Report,
Directors' Report, Directors' Remuneration Report and Corporate
Governance Statement that complies with that law and those
regulations.
The Directors are responsible for the
maintenance and integrity of the corporate and financial
information included on the Company's website but not for the
content of any information included on the website that has been
prepared or issued by third parties. Legislation in the UK
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and
Transparency Rule 4.1.14R, the financial statements will form part
of the annual financial report prepared using the single electronic
reporting format under the TD ESEF Regulation. The auditor's report
on these financial statements provides no assurance over the ESEF
format.
Responsibility Statement of the
Directors in respect of the Annual Financial Report
We confirm that to the best of our
knowledge:
· the financial
statements, prepared in accordance with the applicable set of
accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company;
and
· the strategic
report includes a fair review of the development and performance of
the business and the position of the issuer, together with a
description of the principal risks and uncertainties that they
face.
We consider the annual report and accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Company's
position and performance, business model and strategy.
For and on behalf of the Board
Michael Hughes,
Chairman
13 June 2024
Statement of Comprehensive Income
​
|
​
|
Year
ended ​ ​
|
Year
ended ​ ​
|
​
|
​
|
31
March 2024 ​ ​
|
31
March 2023 ​ ​
|
​
|
​
|
Revenue
|
Capital
|
​
|
Revenue
|
Capital
|
​
|
​
|
​
|
return
|
return
|
Total
|
return
|
return
|
Total
|
​
|
Notes
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Income
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Income from investments
|
3
|
4,722
|
-
|
4,722
|
5,725
|
302
|
6,027
|
Interest
|
3
|
181
|
-
|
181
|
96
|
-
|
96
|
Gains/(losses) on investments held
at fair value through profit or loss
|
10(a)
|
-
|
106,805
|
106,805
|
-
|
(35,669)
|
(35,669)
|
Currency losses
|
​
|
-
|
(403)
|
(403)
|
-
|
(432)
|
(432)
|
​
|
​
|
4,903
|
106,402
|
111,305
|
5,821
|
(35,799)
|
(29,978)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Expenses
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Investment management
fees
|
4
|
(2,964)
|
-
|
(2,964)
|
(3,284)
|
-
|
(3,284)
|
Administrative expenses
|
5
|
(957)
|
-
|
(957)
|
(1,028)
|
-
|
(1,028)
|
​
|
​
|
(3,921)
|
-
|
(3,921)
|
(4,312)
|
-
|
(4,312)
|
Profit/(loss) before finance costs
and taxation
|
​
|
982
|
106,402
|
107,384
|
1,509
|
(35,799)
|
(34,290)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Finance costs
|
6
|
(2,544)
|
-
|
(2,544)
|
(1,309)
|
-
|
(1,309)
|
(Loss)/profit before
taxation
|
​
|
(1,562)
|
106,402
|
104,840
|
200
|
(35,799)
|
(35,599)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Taxation
|
7
|
(472)
|
(13,346)
|
(13,818)
|
(537)
|
1,870
|
1,333
|
(Loss)/profit for the
year
|
​
|
(2,034)
|
93,056
|
91,022
|
(337)
|
(33,929)
|
(34,266)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
(Loss)/return per Ordinary share
(pence)
|
9
|
(3.77)
|
172.62
|
168.85
|
(0.59)
|
(59.41)
|
(60.00)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
The Company does not have any income
or expense that is not included in "(Loss)/profit for the year",
and therefore this represents the "Total comprehensive income for
the year", as defined in IAS 1 (revised). ​ ​ ​ ​ ​ ​ ​
|
All of the (loss)/profit and total
comprehensive income is attributable to the equity holders of the
Company. There are no non-controlling interests.
​ ​ ​ ​ ​ ​ ​
|
The total column of this statement
represents the Statement of Comprehensive Income of the Company,
prepared in accordance with UK-adopted International Accounting
Standards. The revenue and capital columns are supplementary to
this and are prepared under guidance published by the Association
of Investment Companies (see Note 2 to the Financial
Statements). ​ ​ ​ ​ ​ ​ ​
|
All items in the above statement
derive from continuing operations. ​ ​ ​ ​ ​ ​ ​
|
The accompanying notes are an
integral part of these financial statements. ​ ​ ​ ​ ​ ​ ​
|
Statement of Financial Position
​
|
​
|
As
at
|
As
at
|
​
|
​
|
31
March 2024
|
31
March 2023
|
​
|
Notes
|
£'000
|
£'000
|
Non-current assets
|
​
|
​
|
​
|
Investments held at fair value
through profit or loss
|
10
|
465,789
|
391,371
|
​
|
​
|
​
|
​
|
Current assets
|
​
|
​
|
​
|
Cash at bank
|
​
|
6,452
|
7,178
|
Other receivables
|
11
|
2,403
|
3,715
|
​
|
​
|
8,855
|
10,893
|
​
|
​
|
​
|
​
|
Current liabilities
|
​
|
​
|
​
|
Bank loan
|
12(a)
|
(25,953)
|
(29,918)
|
Other payables
|
12(b)
|
(2,231)
|
(3,279)
|
​
|
​
|
(28,184)
|
(33,197)
|
Net current liabilities
|
​
|
(19,329)
|
(22,304)
|
​
|
​
|
​
|
​
|
Non-current liabilities
|
​
|
​
|
​
|
Deferred tax liability on Indian
capital gains
|
13
|
(19,406)
|
(11,148)
|
Net assets
|
​
|
427,054
|
357,919
|
​
|
​
|
​
|
​
|
Share capital and
reserves
|
​
|
​
|
​
|
Ordinary share capital
|
14
|
14,768
|
14,768
|
Share premium account
|
​
|
25,406
|
25,406
|
Capital redemption
reserve
|
​
|
4,484
|
4,484
|
Capital reserve
|
​
|
384,824
|
313,655
|
Revenue reserve
|
​
|
(2,428)
|
(394)
|
Equity shareholders'
funds
|
​
|
427,054
|
357,919
|
​
|
​
|
​
|
​
|
Net asset value per Ordinary share
(pence)
|
16
|
819.56
|
641.32
|
​
|
​
|
​
|
​
|
The financial statements were
approved by the Board of Directors and authorised for issue on 13
June 2024 and were signed on its behalf by: ​ ​ ​
|
Michael Hughes
|
​
|
​
|
​
|
Chairman
|
​
|
​
|
​
|
The accompanying notes are an
integral part of these financial statements. ​ ​ ​
|
Statement of Changes in Equity
Year ended 31 March
2024 ​ ​ ​ ​ ​ ​ ​
|
​
|
​
|
​
|
Share
|
Capital
|
​
|
​
|
​
|
​
|
​
|
Share
|
premium
|
redemption
|
Capital
|
Revenue
|
​
|
​
|
​
|
capital
|
account
|
reserve
|
reserve
|
reserve
|
Total
|
​
|
​
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Balance at 1 April 2023
|
​
|
14,768
|
25,406
|
4,484
|
313,655
|
(394)
|
357,919
|
Net gain/(loss) after
taxation
|
​
|
-
|
-
|
-
|
93,056
|
(2,034)
|
91,022
|
Buyback of share capital to
treasury
|
​
|
-
|
-
|
-
|
(21,887)
|
-
|
(21,887)
|
Balance at 31 March
2024
|
​
|
14,768
|
25,406
|
4,484
|
384,824
|
(2,428)
|
427,054
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Year ended 31 March 2023
​ ​ ​ ​ ​ ​ ​
|
​
|
​
|
Share
|
​
|
Capital
|
​
|
​
|
​
|
​
|
Share
|
premium
|
Special
|
redemption
|
Capital
|
Revenue
|
​
|
​
|
capital
|
account
|
reserve
|
reserve
|
reserve
|
reserve
|
Total
|
​
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
Balance at 1 April 2022
|
14,768
|
25,406
|
9,932
|
4,484
|
349,462
|
(57)
|
403,995
|
Net loss after taxation
|
-
|
-
|
-
|
-
|
(33,929)
|
(337)
|
(34,266)
|
Buyback of share capital to
treasury
|
-
|
-
|
(9,932)
|
-
|
(1,878)
|
-
|
(11,810)
|
Balance at 31 March
2023
|
14,768
|
25,406
|
-
|
4,484
|
313,655
|
(394)
|
357,919
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
The accompanying notes are an
integral part of these financial statements. ​ ​ ​ ​ ​ ​ ​
|
Statement of Cash Flows
​
|
​
|
Year
ended
|
Year
ended
|
​
|
​
|
31
March 2024
|
31
March 2023
|
​
|
Notes
|
£'000
|
£'000
|
Cash flows from operating
activities
|
​
|
​
|
​
|
Dividend income
received
|
​
|
4,722
|
4,817
|
Interest income
received
|
​
|
(4)
|
(16)
|
Investment management fee
paid
|
​
|
(3,203)
|
(3,057)
|
Other cash
(expenses)/receipts
|
​
|
(970)
|
692
|
Cash inflow from
operations
|
​
|
545
|
2,436
|
Interest paid
|
​
|
(2,248)
|
(1,189)
|
Net cash (outflow)/inflow from
operating activities
|
​
|
(1,703)
|
1,247
|
​
|
​
|
​
|
​
|
Cash flows from investing
activities
|
​
|
​
|
​
|
Purchases of
investments
|
​
|
(96,207)
|
(100,451)
|
Sales of investments
|
​
|
128,508
|
109,314
|
Indian capital gains tax paid on
sales
|
​
|
(5,088)
|
(678)
|
Net cash inflow from investing
activities
|
​
|
27,213
|
8,185
|
​
|
​
|
​
|
​
|
Cash flows from financing
activities
|
​
|
​
|
​
|
Buyback of shares
|
​
|
(21,792)
|
(11,489)
|
Repayment of loan
|
​
|
(4,000)
|
-
|
Costs associated with
loan
|
​
|
(41)
|
(105)
|
Net cash outflow from financing
activities
|
​
|
(25,833)
|
(11,594)
|
Net decrease in cash and cash
equivalents
|
​
|
(323)
|
(2,162)
|
Cash and cash equivalents at the
start of the year
|
​
|
7,178
|
9,772
|
Effect of foreign exchange rate
changes
|
​
|
(403)
|
(432)
|
Cash and cash equivalents at the
end of the year
|
17
|
6,452
|
7,178
|
​
|
​
|
​
|
​
|
The accompanying notes are an
integral part of these financial statements. ​ ​ ​
|
Notes to the Financial Statements
For the year ended 31 March 2024
1.
|
Principal activity
|
​
|
The principal activity of the
Company is that of an investment trust company within the meaning
of Section 1158 of the Corporation Tax Act 2010
("s1158").
|
2.
|
Accounting policies
​
|
​
|
(a)
|
Basis of preparation.
The accounting policies which follow set out
those policies which apply in preparing the financial statements
for the year ended 31 March 2024.
|
​
|
​
|
The financial statements have been
prepared in accordance with UK-adopted international accounting
standards ("IFRS"). The Company adopted all of the IFRS which took
effect during the year.
|
​
|
​
|
The financial statements have also
been prepared in accordance with the Companies Act 2006 and the
Statement of Recommended Practice (SORP), "Financial Statements of
Investment Trust Companies and Venture Capital Trusts," issued in
July 2022.
|
​
|
​
|
The Directors have reviewed the
Company's ability to continue as a going concern. The Company's
assets consist substantially of a portfolio of quoted securities
which in most circumstances are realisable within a short
timescale. The Directors are mindful of the principal risks and
uncertainties disclosed in the Strategic Report and the financial
risks disclosed in Note 17 to the financial statements and have
reviewed cashflow forecasts detailing revenue and expenses for at
least 12 months from the date of this Report. Accordingly, the
Directors believe that the Company has adequate financial resources
to continue in operational existence for at least 12 months from
the date of this Report.
|
​
|
​
|
In August 2022, the Company entered
into a three-year, £30 million revolving credit facility (the
"Facility") with Royal Bank of Scotland International Limited
(London Branch), part of NatWest Group plc, of which £26m was drawn
down at 31 March 2024 (2023 - £30m). The Board has set limits for
borrowing and regularly reviews the level of any gearing and
compliance with banking covenants.
|
​
|
​
|
The results of stress testing
prepared by the Manager, which models a sharp decline in market
levels and income, demonstrated that the Company has the ability to
raise sufficient funds so as to both pay expenses and remain within
its debt covenants.
|
​
|
​
|
Having taken these factors into
account, the Directors believe that the Company has adequate
resources to continue in operational existence and has the ability
to meet its financial obligations as they fall due for a period of
at least twelve months from the date of approval of this Report.
For these reasons, the Company continues to adopt the going concern
basis of accounting in preparing the financial
statements.
|
​
|
​
|
Significant estimates and
judgements. The preparation of financial
statements in conformity with IFRS requires the use of certain
critical accounting estimates which requires management to exercise
its judgement in the process of applying the accounting policies.
The Directors do not believe that any accounting judgements or
estimates have been applied to these financial statements that have
a significant risk of causing material adjustment to the carrying
amount of assets and liabilities within the next financial year.
The Company considers the selection of Sterling as its functional
currency to be a key judgement.
|
​
|
​
|
Functional
currency. The Company's investments are
made in Indian Rupee and US Dollar, however the Board considers the
Company's functional currency to be Sterling. In arriving at this
conclusion, the Board considered that the shares of the Company are
listed on the London Stock Exchange, it is regulated in the United
Kingdom, principally having its shareholder base in the United
Kingdom and also pays expenses in Sterling, as it would dividends,
where declared by the Company.
|
​
|
​
|
New and amended accounting standards
and interpretations. The Company applied
certain Standards and Amendments, which are effective for annual
periods beginning on or after 1 January 2023. The adoption of these
Standards and Amendments did not have a material impact on the
financial results of the Company. The nature is described
below:
|
​
|
​
|
- IAS 1 Amendments (Disclosure of
Accounting Policies)
|
​
|
​
|
- IAS 8 Amendments (Definition of
Accounting Estimates)
|
​
|
​
|
- IAS 12 Amendments (Deferred Tax
related to Assets and Liabilities arising from a Single
Transaction)
|
​
|
​
|
- IAS 12 Amendments (Deferred Tax
and OECD Pillar 2 Taxes)
|
​
|
​
|
At the date of authorisation of
these financial statements, the following amendments to Standards
and Interpretations were assessed to be relevant and are all
effective for annual periods beginning on or after 1 January 2024
and thereafter;
|
​
|
​
|
- IAS 1 Amendments (Classification
of Liabilities as Current or Non-Current)
|
​
|
​
|
- IAS 1 Amendments (Disclosure of
Non-current Liabilities with Covenants)
|
​
|
​
|
The Company intends to adopt the
Standards and Interpretations in the reporting period when they
become effective and the Board does not anticipate that the
adoption of these Standards and Interpretations in future periods
will materially impact the Company's financial results in the
period of initial application although there may be revised
presentations to the Financial Statements and additional
disclosures.
|
​
|
(b)
|
Presentation of Statement of
Comprehensive Income. In order to better
reflect the activities of an investment trust company and in
accordance with guidance issued by the AIC, supplementary
information which analyses the Statement of Comprehensive Income
between items of a revenue and capital nature has been presented in
the Statement of Comprehensive Income.
|
​
|
(c)
|
Segmental
reporting. The Board has considered the
requirements of IFRS 8 'Operating Segments' and is of the view that
the Company is engaged in a single segment business, which is one
of investing in Indian quoted equities and that therefore the
Company has only a single operating segment. The Board of
Directors, as a whole, has been identified as constituting the
chief operating decision maker of the Company. The key measure of
performance used by the Board to assess the Company's performance
is the total return on the Company's net asset value, as calculated
under IFRS, and therefore no reconciliation is required between the
measure of profit or loss used by the Board and that contained in
the financial statements.
|
​
|
(d)
|
Income. Dividends receivable on equity
shares are recognised in the Statement of Comprehensive Income on
the ex-dividend date, and gross of any applicable withholding tax.
Dividends receivable on equity shares where no ex-dividend date is
quoted are brought into account when the Company's right to receive
payment is established. Special dividends are credited to capital
or revenue, according to their circumstances. Where a company has
elected to receive dividends in the form of additional shares
rather than in cash, the amount of the cash dividend foregone is
recognised in the Statement of Comprehensive Income. Provision is
made for any dividends not expected to be received. Interest
receivable from cash and short-term deposits is accrued to the end
of the financial year.
|
​
|
(e)
|
Expenses and interest
payable. All expenses, with the exception
of interest expenses, which are recognised using the effective
interest method, are accounted for on an accruals basis. Expenses
are charged to the revenue column of the Statement of Comprehensive
Income except as follows: ​
|
​
|
​
|
-
|
expenses which are
incidental to the acquisition or disposal of an investment are
charged to the capital column of the Statement of Comprehensive
Income and separately identified and disclosed in note 10 (b);
and
|
​
|
​
|
-
|
expenses are charged to the
capital column of the Statement of Comprehensive Income where a
connection with the maintenance or enhancement of the value of the
investments can be demonstrated.
|
​
|
(f)
|
Taxation. The tax expense represents the sum of the tax currently
payable and deferred tax. Tax payable is based on the taxable
profit for the year. Taxable profit differs from profit before tax
as reported in the Statement of Comprehensive Income because it
excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable
or deductible. The Company's liability for current tax is
calculated using tax rates that have been enacted or substantively
enacted by the Statement of Financial Position date.
​
|
​
|
​
|
Deferred tax. Deferred tax is recognised in respect of all temporary
differences at the Statement of Financial Position date, where
transactions or events that result in an obligation to pay more tax
in the future or right to pay less tax in the future have occurred
at the Statement of Financial Position date. This is subject to
deferred tax assets only being recognised if it is considered more
likely than not that there will be suitable profits from which the
future reversal of the temporary differences can be deducted.
Deferred tax assets and liabilities are measured at the rates
applicable to the legal jurisdictions in which they arise, using
enacted tax rates that are expected to apply at the date the
deferred tax position is unwound. ​
|
​
|
(g)
|
Investments. Investments have been designated upon initial recognition as
fair value through profit or loss. Investments are recognised and
de-recognised at trade date where a purchase or sale is under a
contract whose terms require delivery within the timeframe
established by the market concerned, and are measured initially at
fair value. Subsequent to initial recognition, investments are
recognised at fair value through profit or loss.
​
|
​
|
​
|
The Company classifies its
investments based on their contractual cash flow characteristics
and the Company's business model for managing the assets. The
business model, which is the determining feature, is such that the
portfolio of investments is managed, and performance and risk is
evaluated, on a fair value basis. The Manager is also compensated
based on the fair value of the Company's assets. Consequently, all
investments are measured at fair value through profit or
loss. ​
|
​
|
​
|
Investments are recognised and
de-recognised at trade date where a purchase or sale is under a
contract whose terms require delivery within the timeframe
established by the market concerned, and are measured at fair
value. For listed investments, this is deemed to be bid market
prices or closing prices on a recognised stock exchange.
​
|
​
|
​
|
Gains and losses arising from the
changes in fair value are included in net profit or loss for the
period as a capital item. Transaction costs are treated as a
capital cost. ​
|
​
|
(h)
|
Cash and cash equivalents.
Cash comprises cash in hand and at banks and
short-term deposits. Cash equivalents are short-term, highly-liquid
investments that are readily convertible to known amounts of cash,
and that are subject to an insignificant risk of changes in
value.
|
​
|
(i)
|
Other receivables.
The Company has adopted the classification and
measurement provisions of IFRS 9 'Financial Instruments' as other
receivables are held to collect contractual cash flows and give
rise to cash flows representing solely payments of principal and
interest. As such they are measured at amortised cost. Other
receivables held by the Company do not carry any interest, they
have been assessed as not having any expected credit losses over
their lifetime due to their short-term nature and low credit
risk.
|
​
|
(j)
|
Other payables. The Company has adopted the classification and measurement
provisions of IFRS 9 'Financial Instruments'. Other payables are
non-interest bearing and are stated at amortised cost.
|
​
|
(k)
|
Borrowings. Bank loans are initially recognised at cost, being the fair
value of the consideration received, net of any issue expenses.
Subsequently, they are measured at amortised cost using the
effective interest method. Finance charges are accounted for on an
accruals basis using the effective interest rate method and are
charged 100% to revenue.
|
​
|
(l)
|
Nature and purpose of
reserves
|
​
|
​
|
Called-up share capital.
The Ordinary share capital on the Statement of
Financial Position relates to the number of shares in issue and in
treasury. Only when the shares are cancelled, either from treasury
or directly, is a transfer made to the capital redemption reserve.
This reserve is not distributable.
|
​
|
​
|
Share premium account.
The balance classified as share premium includes
the premium above nominal value from the proceeds on issue of any
equity share capital comprising Ordinary shares of 25p. This
reserve is not distributable.
|
​
|
​
|
Capital redemption reserve.
The capital redemption reserve arose when
Ordinary shares were redeemed, and subsequently cancelled by the
Company, at which point an amount equal to the par value of the
Ordinary share capital was transferred from the Ordinary share
capital to the capital redemption reserve. This reserve is not
distributable.
|
​
|
​
|
Capital reserve. This reserve reflects any gains or losses on investments
realised in the period along with any increases and decreases in
the fair value of investments held that have been recognised in the
Statement of Comprehensive Income. The part of this reserve
represented by realised capital gains is available for distribution
by way of dividend. Subsequent to the special reserve being
extinguished, the capital reserve has been used to fund the share
buy-backs by the Company.
|
​
|
​
|
Revenue reserve. This reserve reflects all income and costs which are
recognised in the revenue column of the Statement of Comprehensive
Income. The revenue reserve is distributable by way of
dividend.
|
​
|
(m)
|
Foreign currency.
Overseas monetary assets and liabilities are
converted into Sterling at the rate of exchange ruling at the
Statement of Financial Position date. Transactions during the year
involving foreign currencies are converted at the rate of exchange
ruling at the transaction date. Any gain or loss arising from a
change in exchange rates subsequent to the date of the transaction
is included as an exchange gain or loss and recognised in the
Statement of Comprehensive Income.
|
3.
|
Income
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
£'000
|
£'000
|
​
|
Income from investments
|
​
|
​
|
​
|
Overseas dividends
|
4,722
|
6,027
|
​
|
Overseas dividends
|
4,722
|
6,027
|
​
|
​
|
​
|
​
|
​
|
Other income
|
​
|
​
|
​
|
Deposit interest
|
172
|
93
|
​
|
Other interest
|
9
|
3
|
​
|
​
|
181
|
96
|
​
|
Total income
|
4,903
|
6,123
|
4.
|
Investment management
fees
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
£'000
|
£'000
|
​
|
Investment management
fees
|
2,964
|
3,284
|
​
|
​
|
​
|
​
|
​
|
The Company has an agreement with
the Manager for the provision of management and secretarial
services. ​ ​
|
​
|
During the year, the management
fee was payable monthly in arrears and was based on an annual
amount of 0.8% up to £300 million and 0.6% thereafter of the
Company's net assets (2023 - based on an amount of 0.85% up to £350
million and 0.7% thereafter of the Company's net assets), valued
monthly. The management agreement is terminable by either the
Company or the Manager on six months' notice. The amount payable in
respect of the Company for the year was £2,964,000 (2023 -
£3,284,000) and the balance due to the Manager at the year end was
£520,000 (2023 - £759,000). All investment management fees are
charged 100% to the revenue column of the Statement of
Comprehensive Income. ​
​
|
5.
|
Administrative expenses
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
£'000
|
£'000
|
​
|
Directors' fees
|
135
|
148
|
​
|
Promotional activities
|
190
|
176
|
​
|
Auditor's remuneration:
|
​
|
​
|
​
|
- fees payable for the audit of
the Company's annual financial statements
|
70
|
60
|
​
|
Legal and advisory fees
|
59
|
68
|
​
|
Custodian and overseas agents'
charges
|
319
|
311
|
​
|
Depositary fees
|
39
|
40
|
​
|
Other
|
145
|
225
|
​
|
​
|
957
|
1,028
|
​
|
​
|
​
|
​
|
​
|
The Manager supports the Company
with promotional activities through its participation in the abrdn
Investment Trust Share Plan and ISA. The total fees paid and
payable under the agreement during the year were £190,000 (2023 -
£176,000) and £98,000 (2023 - £46,000) was due to the Manager at
the year end. ​ ​
|
​
|
The only fees paid to KPMG LLP by
the Company are the audit fees of £70,000 (2023 - £60,000). The
amounts disclosed above for Auditor's remuneration are all shown
net of VAT. ​ ​
|
6.
|
Finance costs
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
£'000
|
£'000
|
​
|
In relation to bank
loans
|
2,544
|
1,309
|
​
|
​
|
​
|
​
|
​
|
Finance costs are charged 100% to
revenue as disclosed in the accounting policies.
​ ​
|
7.
|
Taxation ​ ​ ​ ​ ​ ​ ​
|
​
|
​
|
​
|
2024 ​ ​
|
2023 ​ ​
|
​
|
​
|
​
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
​
|
​
|
​
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
​
|
(a)
|
Analysis of charge for the
year
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Indian capital gains tax charge on
sales
|
-
|
5,088
|
5,088
|
-
|
936
|
936
|
​
|
​
|
Under provision of Indian capital
gains tax charged on sales for prior year
|
-
|
-
|
-
|
-
|
577
|
577
|
​
|
​
|
Overseas taxation
|
472
|
-
|
472
|
537
|
-
|
537
|
​
|
​
|
Total current tax charge for the
year
|
472
|
5,088
|
5,560
|
537
|
1,513
|
2,050
|
​
|
​
|
Movement in deferred tax liability
on Indian capital gains
|
-
|
8,258
|
8,258
|
-
|
(3,383)
|
(3,383)
|
​
|
​
|
Total tax charge/(credit) for the
year
|
472
|
13,346
|
13,818
|
537
|
(1,870)
|
(1,333)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
The Company is liable to Indian
capital gains tax under Section 115 AD of the Indian Income Tax Act
1961. The Company has recognised a deferred tax liability of
£19,406,000 (2023 - £11,148,000) on capital gains which may arise
if Indian investments are sold. ​
​ ​ ​ ​ ​
|
​
|
​
|
On 1 April 2020, the Indian
Government withdrew an exemption from withholding tax on dividend
income. Dividends are received net of 20% withholding tax and an
excess charge of 4%. A further surcharge of either 2% or 5% is
applied if the receipt exceeds a certain threshold. Of this total
charge, 10% of the withholding tax is irrecoverable with the
remainder being offset against the deferred tax liability on Indian
capital gains in the first instance where there are capital gains
during the year or if not then it is shown in the Statement of
Financial Position as an asset due for reclaim. ​ ​ ​ ​ ​ ​
|
​
|
(b)
|
Factors affecting the tax charge
for the year. The tax charged for the year
can be reconciled to the profit/(loss) per the Statement of
Comprehensive Income as follows: ​
​ ​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024 ​ ​
|
2023 ​ ​
|
​
|
​
|
​
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
​
|
​
|
​
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
​
|
​
|
(Loss)/profit before
tax
|
(1,562)
|
106,402
|
104,840
|
200
|
(35,799)
|
(35,599)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
UK corporation tax on profit at
the standard rate of 25% (2023 - 19%)
|
(391)
|
26,601
|
26,210
|
38
|
(6,802)
|
(6,764)
|
​
|
​
|
Effects of:
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
(Gains)/losses on investments held
at fair value through profit or loss not taxable not subject to UK
corporation tax
|
-
|
(26,702)
|
(26,702)
|
-
|
6,720
|
6,720
|
​
|
​
|
Currency losses not
taxable
|
-
|
101
|
101
|
-
|
82
|
82
|
​
|
​
|
Deferred tax not recognised in
respect of tax losses
|
1,474
|
-
|
1,474
|
1,047
|
-
|
1,047
|
​
|
​
|
Corporate interest
restriction
|
93
|
-
|
93
|
-
|
-
|
-
|
​
|
​
|
Expenses not deductible for tax
purposes
|
4
|
-
|
4
|
3
|
-
|
3
|
​
|
​
|
Indian capital gains tax charged
on sales
|
-
|
5,088
|
5,088
|
-
|
936
|
936
|
​
|
​
|
Under provision of Indian capital
gains tax charged on sales for prior year
|
-
|
-
|
-
|
-
|
577
|
577
|
​
|
​
|
Movement in deferred tax liability
on Indian capital gains
|
-
|
8,258
|
8,258
|
-
|
(3,383)
|
(3,383)
|
​
|
​
|
Irrecoverable overseas withholding
tax
|
472
|
-
|
472
|
537
|
-
|
537
|
​
|
​
|
Non-taxable dividend
income
|
(1,180)
|
-
|
(1,180)
|
(1,088)
|
-
|
(1,088)
|
​
|
​
|
Total tax
charge/(credit)
|
472
|
13,346
|
13,818
|
537
|
(1,870)
|
(1,333)
|
​
|
​
|
​
|
​
|
-
|
​
|
​
|
​
|
​
|
​
|
(c)
|
At 31 March 2024, the Company had
surplus management expenses and loan relationship debits of
£39,202,000 (2023 - £33,305,000) with a tax value of £9,801,000
(2023 - £8,326,000) based on enacted tax rates, in respect of which
a deferred tax asset has not been recognised. No deferred tax asset
has been recognised because the Company is not expected to generate
taxable income in the future in excess of the deductible expenses
of those future periods. Therefore, it is unlikely that the Company
will generate future taxable revenue that would enable the existing
tax losses to be utilised. ​
​ ​ ​ ​ ​
|
8.
|
Ordinary dividends on equity
shares
|
​
|
After the payment of operational
expenses, there was no revenue available for distribution by way of
dividend for the year ended 31 March 2024 (2023 - £nil).
|
9.
|
(Loss)/return per Ordinary
share ​ ​
​ ​ ​ ​
|
​
|
​
|
​
|
2024
|
​
|
​
|
2023
|
​
|
​
|
​
|
Revenue
|
Capital
|
Total
|
Revenue
|
Capital
|
Total
|
​
|
Net (loss)/profit for the year
(£'000)
|
(2,034)
|
93,056
|
91,022
|
(337)
|
(33,929)
|
(34,266)
|
​
|
Weighted average number of
Ordinary shares in issue
|
​
|
​
|
53,907,480
|
​
|
​
|
57,105,465
|
​
|
(Loss)/return per Ordinary share
(pence)
|
(3.77)
|
172.62
|
168.85
|
(0.59)
|
(59.41)
|
(60.00)
|
10.
|
Investments held at fair value
through profit or loss ​
​ ​ ​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
|
(a)
|
Valuation
|
​
|
£'000
|
£'000
|
​
|
​
|
Opening book cost
|
​
|
296,380
|
293,858
|
​
|
​
|
Opening investment holdings fair
value gains
|
​
|
94,991
|
146,023
|
​
|
​
|
Opening valuation
|
​
|
391,371
|
439,881
|
​
|
​
|
Movements in the year:
|
​
|
​
|
​
|
​
|
​
|
Purchases
|
​
|
95,183
|
99,528
|
​
|
​
|
Sales - proceeds
|
​
|
(127,570)
|
(112,369)
|
​
|
​
|
Gains/(losses) on
investments
|
​
|
106,805
|
(35,669)
|
​
|
​
|
Closing valuation
|
​
|
465,789
|
391,371
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
​
|
​
|
£'000
|
£'000
|
​
|
​
|
Closing book cost
|
​
|
302,906
|
296,380
|
​
|
​
|
Closing investment holdings fair
value gains
|
​
|
162,883
|
94,991
|
​
|
​
|
Closing valuation
|
​
|
465,789
|
391,371
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
The Company generated £127,570,000
(2023 - £112,369,000) from investments sold in the period. The book
cost of these investments when they were purchased was £88,658,000
(2023 - £97,005,000). These investments have been revalued over
time and until they were sold any unrealised gains/losses were
included in the fair value of the investments. ​ ​ ​
|
​
|
(b)
|
Transaction costs.
During the year, expenses were incurred in
acquiring or disposing of investments classified as fair value
through profit or loss. These have been expensed through the
capital column of the Statement of Comprehensive Income, and are
included within gains/(losses) on investments at fair value through
profit or loss in the Statement of Comprehensive Income. The total
costs were as follows: ​
​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
​
|
​
|
£'000
|
£'000
|
​
|
​
|
Purchases
|
​
|
165
|
166
|
​
|
​
|
Sales
|
​
|
178
|
173
|
​
|
​
|
​
|
​
|
343
|
339
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
The above transaction costs are
calculated in line with the AIC SORP. The transaction costs in the
Company's Key Information Document provided by the Manager are
calculated on a different basis and in line with the PRIIPs
regulations. ​ ​ ​
|
|
|
|
|
|
|
|
| |
11.
|
Other receivables
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
£'000
|
£'000
|
​
|
Amounts due from
brokers
|
2,328
|
3,266
|
​
|
Recoverable tax on Indian
dividends
|
-
|
393
|
​
|
Prepayments and accrued
income
|
75
|
56
|
​
|
​
|
2,403
|
3,715
|
​
|
​
|
​
|
​
|
​
|
None of the above amounts are past
their due date or impaired (2023 - nil). ​ ​
|
16.
|
Net asset value per Ordinary
share
|
​
|
The net asset value per Ordinary
share is based on a net asset value of £427,054,000 (2023 -
£357,919,000) and on 52,107,910 (2023 - 55,809,921) Ordinary
shares, being the number of Ordinary shares in issue at the year
end, excluding shares held in treasury.
|
17.
|
Financial instruments
|
​
|
​
|
​
|
​
|
​
|
Risk management.
The Company's investment activities expose it to
various types of financial risk associated with the financial
instruments and markets in which it invests. The Company's
financial instruments comprise securities and other investments,
cash balances and debtors and creditors that arise directly from
its operations; for example, in respect of sales and purchases
awaiting settlement, and debtors for accrued income.
​ ​ ​ ​
|
​
|
The Board has delegated the risk
management function to the Manager under the terms of its
management agreement with the Manager (further details of which are
included under note 4). The Board regularly reviews and agrees
policies for managing each of the key financial risks identified
with the Manager. The types of risk and the Manager's approach to
the management of each type of risk, are summarised below. Such
approach has been applied throughout the year and has not changed
since the previous accounting period. The numerical disclosures
exclude short-term debtors and creditors on the grounds of their
materiality. ​ ​ ​ ​
|
​
|
Risk management
framework. The directors of the Manager
collectively assume responsibility for the Manager's obligations
under the AIFMD including reviewing investment performance and
monitoring the Company's risk profile during the year.
​ ​ ​ ​
|
​
|
The Manager is a fully integrated
member of abrdn, which provides a variety of services and support
to the Manager in the conduct of its business activities, including
in the oversight of the risk management framework for the Company.
The Manager has delegated the day to day administration of the
investment policy to the Investment manager, which is responsible
for ensuring that the Company is managed within the terms of its
investment guidelines and the limits set out in its pre-investment
disclosures to investors (details of which can be found on the
Company's website). The Manager has retained responsibility for
monitoring and oversight of investment performance, product risk
and regulatory and operational risk for the Company.
​ ​ ​ ​
|
​
|
The Manager conducts its risk
oversight function through the operation of the abrdn's risk
management processes and systems which are embedded within the
abrdn's operations. abrdn's Risk Division supports management in
the identification and mitigation of risks and provides independent
monitoring of the business. The Division includes Compliance,
Business Risk, Market Risk and Risk Management. The team is headed
up by abrdn's Chief Risk Officer, who reports to the CEO of the
Group. The Risk Division achieves its objective through embedding
the Risk Management Framework throughout the organisation using
abrdn's operational risk management system ("SHIELD").
​ ​ ​ ​
|
​
|
abrdn's Internal Audit Department
is independent of the Risk Division and reports directly to the
abrdn's CEO and to the Audit Committee of abrdn's Board of
Directors. The Internal Audit Department is responsible for
providing an independent assessment of the abrdn's control
environment. ​ ​ ​ ​
|
​
|
abrdn's corporate governance
structure is supported by several committees to assist the board of
directors of abrdn, its subsidiaries and the Company to fulfil
their roles and responsibilities. abrdn's Risk Division is
represented on all committees, with the exception of those
committees that deal with investment recommendations. The specific
goals and guidelines on the functioning of those committees are
described on the committees' terms of reference.
​ ​ ​ ​
|
​
|
Market risk. The fair value or future cash flows of a financial
instrument held by the Company may fluctuate because of changes in
market prices. This market risk comprises three elements - interest
rate risk, foreign currency risk and other price risk.
​ ​ ​ ​
|
​
|
Interest rate risk.
The interest rate risk profile of the portfolio
of the Company's financial assets and liabilities, excluding equity
holdings which are all non-interest bearing, at the Statement of
Financial Position date was as follows: ​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Weighted average
|
Weighted
|
​
|
​
|
​
|
​
|
period
for which
|
average
|
Fixed
|
Floating
|
​
|
​
|
rate is
fixed
|
interest rate
|
rate
|
rate
|
​
|
At 31 March 2024
|
Years
|
%
|
£'000
|
£'000
|
​
|
Assets
|
​
|
​
|
​
|
​
|
​
|
Sterling
|
-
|
3.69
|
-
|
6,032
|
​
|
US Dollars
|
-
|
-
|
-
|
8
|
​
|
Indian Rupee
|
-
|
-
|
-
|
412
|
​
|
​
|
​
|
​
|
-
|
6,452
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Weighted average
|
Weighted
|
​
|
​
|
​
|
​
|
period
for which
|
average
|
Fixed
|
Floating
|
​
|
​
|
rate is
fixed
|
interest rate
|
rate
|
rate
|
​
|
​
|
Years
|
%
|
£'000
|
£'000
|
​
|
Liabilities
|
​
|
​
|
​
|
​
|
​
|
Bank loan - £26,000,000
|
0.17
|
8.79
|
25,953
|
-
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Weighted average
|
Weighted
|
​
|
​
|
​
|
​
|
period
for which
|
average
|
Fixed
|
Floating
|
​
|
​
|
rate is
fixed
|
interest rate
|
rate
|
rate
|
​
|
At 31 March 2023
|
Years
|
%
|
£'000
|
£'000
|
​
|
Assets
|
​
|
​
|
​
|
​
|
​
|
Sterling
|
-
|
3.18
|
-
|
7,139
|
​
|
US Dollars
|
-
|
-
|
-
|
8
|
​
|
Indian Rupee
|
-
|
-
|
-
|
31
|
​
|
​
|
​
|
​
|
-
|
7,178
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Weighted average
|
Weighted
|
​
|
​
|
​
|
​
|
period
for which
|
average
|
Fixed
|
Floating
|
​
|
​
|
rate is
fixed
|
interest rate
|
rate
|
rate
|
​
|
​
|
Years
|
%
|
£'000
|
£'000
|
​
|
Liabilities
|
​
|
​
|
​
|
​
|
​
|
Bank loan - £30,000,000
|
0.16
|
3.43
|
29,918
|
-
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
The weighted average interest rate
is based on the current yield of each asset, weighted by its market
value. The weighted average interest rate on bank loans is based on
the interest rate payable, weighted by the total value of the
loans. The maturity date of the Company's loans is shown in note
12. ​ ​
​ ​
|
​
|
The floating rate assets consist
of cash deposits on call earning interest at prevailing market
rates. ​ ​
​ ​
|
​
|
The Company's equity portfolio and
short-term debtors and creditors (excluding bank loans) have been
excluded from the above tables. ​
​ ​ ​
|
​
|
Management of the
risk. The possible effects on fair value
and cash flows that could arise as a result of changes in interest
rates are taken into account when making investment and borrowing
decisions. ​ ​ ​ ​
|
​
|
Interest rate sensitivity.
The sensitivity analyses below have been
determined based on the exposure to interest rates for both
derivative and non-derivative instruments at the Statement of
Financial Position date and the stipulated change taking place at
the beginning of the financial year and held constant throughout
the reporting period in the case of instruments that have floating
rates. ​ ​
​ ​ ​ ​
|
​
|
The rate of interest on the loan is
the percentage rate per annum which is the aggregate of the
applicable margin, adjusted SONIA rate and mandatory cost if
any. ​ ​
​ ​ ​ ​
|
​
|
If interest rates had been 100 basis
points higher or lower (based on current parameter used by
Manager's Investment Risk Department on risk assessment) and all
other variables were held constant, the Company's revenue return
for the year ended 31 March 2024 would have decreased/increased by
£182,000 (2023 - decrease/increase £199,000). This is mainly
attributable to the Company's exposure to interest rates on its
floating rate cash balances and bank loans. These figures have been
calculated based on cash positions and bank loans at each year
end. ​ ​
​ ​ ​ ​
|
​
|
In the opinion of the Directors, the
above sensitivity analyses are not representative of the year as a
whole, since the level of exposure changes frequently as part of
the interest rate risk management process used to meet the
Company's objectives. The risk parameters used will also fluctuate
depending on the current market perception. ​ ​ ​ ​ ​ ​
|
​
|
Foreign currency risk.
The Company's total return and net assets can be
significantly affected by currency translation movements as the
majority of the Company's assets and income are denominated in
currencies other than Sterling, which is the Company's functional
currency. ​ ​ ​ ​ ​ ​
|
​
|
Management of the risk.
It is not the Company's policy to hedge this risk
but it reserves the right to do so, to the extent possible.
​ ​ ​ ​ ​ ​
|
​
|
The revenue account is subject to
currency fluctuation arising on dividends paid in foreign
currencies. The Company does not hedge this currency risk.
​ ​ ​ ​ ​ ​
|
​
|
Foreign currency exposure by
currency of denomination: ​
​ ​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024 ​ ​
|
2023 ​ ​
|
​
|
​
|
​
|
Net
|
Total
|
​
|
Net
|
Total
|
​
|
​
|
Overseas
|
monetary
|
currency
|
Overseas
|
monetary
|
currency
|
​
|
​
|
investments
|
assets
|
exposure
|
investments
|
assets
|
exposure
|
​
|
​
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
​
|
US Dollar
|
-
|
8
|
8
|
5,474
|
8
|
5,482
|
​
|
Indian Rupee
|
465,789
|
2,711
|
468,500
|
385,897
|
31
|
385,928
|
​
|
​
|
465,789
|
2,719
|
468,508
|
391,371
|
39
|
391,410
|
​
|
Foreign currency
sensitivity. The following tables show the
impact to a 10% increase and a 10% decrease in Sterling against the
foreign currency in which the Company has exposure.
​ ​ ​ ​ ​ ​
|
​
|
If Sterling were to strengthen by
10%, there would be following impact; ​ ​ ​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
​
|
​
|
​
|
​
|
EquityA
|
EquityA
|
​
|
​
|
​
|
​
|
​
|
​
|
£'000
|
£'000
|
​
|
US Dollar
|
​
|
​
|
​
|
​
|
(1)
|
(498)
|
​
|
Indian Rupee
|
​
|
​
|
​
|
​
|
(42,591)
|
(35,287)
|
​
|
​
|
​
|
​
|
​
|
​
|
(42,592)
|
(35,785)
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
If Sterling were to weaken by 10%,
there would be following impact; ​
​ ​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
​
|
​
|
​
|
​
|
EquityA
|
EquityA
|
​
|
​
|
​
|
​
|
​
|
​
|
£'000
|
£'000
|
​
|
US Dollar
|
​
|
​
|
​
|
​
|
1
|
609
|
​
|
Indian Rupee
|
​
|
​
|
​
|
​
|
52,056
|
43,129
|
​
|
​
|
​
|
​
|
​
|
​
|
52,057
|
43,738
|
​
|
A Represents equity
exposure to relevant currencies. ​
​ ​ ​ ​ ​
|
​
|
The prior year comparatives have been updated
to reflect the current year presentation. ​ ​ ​
​ ​ ​
​
​
​
​
|
​
|
​
|
Price risk.
Price risks (ie, changes in market prices other than those arising
from interest rate or currency risk) may affect the value of the
quoted investments. ​ ​ ​ ​ ​ ​
|
​
|
Management of the
risk. It is the Board's policy to hold an
appropriate spread of investments in the portfolio in order to
reduce the risk arising from factors specific to a sector. Both the
allocation of assets and the stock selection process act to reduce
market risk. The Manager actively monitors market prices throughout
the year and reports to the Board, which meets regularly in order
to review investment strategy. The investments held by the Company
are all listed on the Bombay (Mumbai) Stock Exchange and/or The
Indian National Stock Exchange. ​
​ ​ ​ ​ ​
|
​
|
Price risk
sensitivity. If market prices at the
Statement of Financial Position date had been 15% higher or lower
(which the Directors consider to be a reasonable potential change
in market prices) while all other variables remained constant, the
return attributable to Ordinary shareholders for the year ended 31
March 2024 would have increased /(decreased) by £69,868,000 (2023 -
increased/(decreased) by £58,706,000) and capital reserves would
have increased /(decreased) by the same amount. ​ ​ ​ ​ ​ ​
|
|
|
|
|
|
|
|
| |
​
|
Liquidity risk. This is the risk that the Company will encounter difficulty
in meeting obligations associated with financial
liabilities. ​ ​ ​ ​ ​
|
​
|
Management of the
risk. The Board imposes borrowing limits
to ensure gearing levels are appropriate to market conditions and
reviews these on a regular basis. Borrowings comprise a £30 million
revolving multi-currency credit facility, which expires on 5 August
2025. Other payables are settled within one year. Details of
borrowings and other payables at 31 March 2024 are shown in note
12. ​ ​
​ ​ ​
|
​
|
Liquidity risk is not considered to
be significant as the Company's assets comprise mainly readily
realisable securities, which can be sold to meet funding
commitments if necessary. Short-term flexibility is achieved
through the use of the loan facility, details of which can be found
in note 12. Details of the Board's policy on gearing are shown in
the interest rate risk section of this note. ​ ​ ​ ​ ​
|
​
|
Liquidity risk
exposure. The Company has a £30 million
uncommitted multicurrency revolving loan facility, of which
£26,000,000 (2023 - £30,000,000) was drawn down at the year end.
Other payables amounted to £2,231,000 (2023 - £3,279,000).
​ ​ ​ ​ ​
|
​
|
Credit risk. This is failure of the counterparty to a transaction to
discharge its obligations under that transaction, which could
result in the Company suffering a loss. ​ ​ ​ ​ ​
|
​
|
Management of the risk.
The risk is actively managed as follows:
​ ​ ​ ​ ​
|
​
|
-
|
investment transactions are
carried out with a number of brokers, whose credit standing is
reviewed periodically by the Manager, and limits are set on the
amount that may be due from any one broker; ​ ​ ​ ​
|
​
|
-
|
the risk of counterparty exposure
due to failed trades causing a loss to the Company is mitigated by
the review of failed trade reports by the Manager on a daily basis.
In addition, both stock and cash reconciliations to custodians'
records are performed on a daily basis by the Manager to ensure
discrepancies are investigated on a timely basis. The Manager's
Compliance department carries out periodic reviews of the
Custodian's operations and reports its findings to the Manager's
Risk Management Committee and to the Board of the Company. This
review will also include checks on the maintenance and security of
investments held; and ​ ​ ​ ​
|
​
|
-
|
cash is held only with reputable
banks whose credit ratings are monitored on a regular basis.
​ ​ ​ ​
|
​
|
None of the Company's financial
assets are secured by collateral or other credit enhancements (2023
- none). ​ ​ ​ ​ ​
|
​
|
Credit risk
exposure. In summary, compared to the
amounts included in the Statement of Financial Position, the
maximum exposure to credit risk at 31 March was as follows:
​ ​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024 ​
|
2023 ​
|
​
|
​
|
​
|
Statement of
|
​
|
Statement of
|
​
|
​
|
​
|
​
|
Financial
|
Maximum
|
Financial
|
Maximum
|
​
|
​
|
​
|
Position
|
Exposure
|
Position
|
Exposure
|
​
|
​
|
​
|
£'000
|
£'000
|
£'000
|
£'000
|
​
|
Current assets
|
​
|
​
|
​
|
​
|
​
|
​
|
Loans and receivables
|
​
|
2,403
|
2,403
|
3,715
|
3,715
|
​
|
Cash at bank and in
hand
|
​
|
6,452
|
6,452
|
7,178
|
7,178
|
​
|
​
|
​
|
8,855
|
8,855
|
10,893
|
10,893
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
The exposure noted in the above
table is not representative of the exposure across the year as a
whole. ​ ​
​ ​ ​
|
​
|
None of the Company's financial
assets are past due or impaired (2023 - none). ​ ​ ​ ​ ​
|
​
|
Fair values of financial assets
and financial liabilities. The fair value of bank loans are
represented in the table below; ​
​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
​
|
​
|
​
|
​
|
​
|
£'000
|
£'000
|
​
|
Bank loan
|
​
|
​
|
​
|
25,953
|
29,918
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Investments held at fair value
through profit or loss are valued at their quoted bid prices which
equate to their fair values. ​
​ ​ ​ ​
|
​
|
The fair value and the carrying
value of the bank loan in the Statement of Financial Position are
the same at £25,953,000 as at 31 March 2024 (2023 - £29,918,000)
due to its short-term nature. ​
​ ​ ​ ​
|
​
|
The Directors are of the opinion
that the other financial assets and liabilities carried at
amortised cost equates to their fair value. ​ ​ ​ ​ ​
|
|
|
|
|
|
|
| |
18.
|
Capital management policies and
procedures
|
​
|
​
|
The Company's capital management
objectives are:
|
​
|
​
|
-
|
to ensure that the Company will be
able to continue as a going concern; and
|
​
|
-
|
to maximise the income and capital
return to its equity shareholders through an appropriate balance of
equity capital and debt. The policy is that debt should not exceed
25% of net assets.
|
​
|
The Board, with the assistance of
the Manager monitors and reviews the broad structure of the
Company's capital on an ongoing basis. This review includes:
​
|
​
|
-
|
the planned level of gearing,
which includes taking account of the Manager's views on the
market;
|
​
|
-
|
the opportunity to buy back equity
shares for cancellation or holding in treasury, which takes account
of the difference between the net asset value per share and the
share price (ie the level of share price discount or
premium);
|
​
|
-
|
the opportunity for new issues of
equity shares; and
|
​
|
-
|
the extent to which any revenue in
excess of that which is required to be distributed should be
retained.
|
​
|
The Company's objectives, policies
and processes for managing capital are unchanged from the preceding
accounting period. ​
|
|
|
| |
19.
|
Fair value hierarchy
​ ​ ​ ​ ​ ​
|
​
|
IFRS 13 'Fair Value Measurement'
requires an entity to classify fair value measurements using a fair
value hierarchy that reflects the subjectivity of the inputs used
in making measurements. The fair value hierarchy has the following
levels: ​ ​ ​ ​ ​ ​
|
​
|
Level 1:
quoted (unadjusted) market prices in active markets for identical
assets or liabilities; ​
​ ​ ​ ​ ​
|
​
|
Level 2:
valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable; and ​ ​ ​ ​ ​ ​
|
​
|
Level 3: valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable.
​ ​ ​ ​ ​ ​
|
​
|
The financial assets and
liabilities measured at fair value in the Statement of Financial
Position are grouped into the fair value hierarchy at the Statement
of Financial Position date are as follows: ​ ​ ​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Level
1
|
Level
2
|
Level
3
|
Total
|
​
|
As at 31 March 2024
|
​
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
​
|
Financial assets at fair value
through profit or loss
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Quoted equities
|
​
|
a)
|
465,789
|
-
|
-
|
465,789
|
​
|
Net fair value
|
​
|
​
|
465,789
|
-
|
-
|
465,789
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Level
1
|
Level
2
|
Level
3
|
Total
|
​
|
As at 31 March 2023
|
​
|
Note
|
£'000
|
£'000
|
£'000
|
£'000
|
​
|
Financial assets at fair value
through profit or loss
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Quoted equities
|
​
|
a)
|
391,371
|
-
|
-
|
391,371
|
​
|
Net fair value
|
​
|
​
|
391,371
|
-
|
-
|
391,371
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
a)
|
Quoted equities.
The fair value of the Company's investments in
quoted equities has been determined by reference to their quoted
bid prices at the reporting date. Quoted equities included in Fair
Value Level 1 are actively traded on recognised stock
exchanges. ​ ​ ​ ​ ​
|
|
|
|
|
|
|
|
| |
20.
|
Controlling party
|
​
|
In the opinion of the Directors on
the basis of shareholdings advised to them, the Company has no
immediate or ultimate controlling party.
|
21.
|
Related party
transactions
|
​
|
Directors' fees and interests.
Fees payable during the year to the Directors and their interests
in shares of the Company are disclosed within the Directors'
Remuneration Report.
|
22.
|
Transactions with the
Manager
|
​
|
The Company has an agreement with
abrdn Fund Managers Limited for the provision of management,
secretarial, accounting and administration services and for the
carrying out of promotional activities in relation to the Company.
Details of transactions during the year and balances outstanding at
the year end are disclosed in notes 4 and 5.
|
23.
|
Subsequent events
|
​
|
Subsequent to the year end, the Company's NAV
has increased as a result of an increase in stockmarket values of
the portfolio investments. At the date of this Report the latest
unaudited NAV per share was 935.74p as at the close of business on
12 June 2024, an increase of 14.2% compared the NAV per share of
819.56p at the year end.
|
Alternative Performance Measures
Alternative performance measures
are numerical measures of the Company's current, historical or
future performance, financial position or cash flows, other than
financial measures defined or specified in the applicable financial
framework. The Company's applicable financial framework includes
IFRS and the AIC SORP. The Directors assess the Company's
performance against a range of criteria which are viewed as
particularly relevant for closed-end investment
companies. ​ ​ ​ ​
|
Adjusted net asset value per
Ordinary shareA ​
​ ​ ​
|
This performance measure is used
to provide a like for like comparison with the Company's Benchmark
for the purposes of the potential five-yearly performance-related
conditional tender offer announced on 24 March 2022, which was
first in effect from 1 April 2022 and is therefore not applicable
to earlier reporting periods. Further details on the conditional
tender may be found in the Chairman's Statement.
​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
Net assets attributable
(£'000)
|
​
|
​
|
427,054
|
357,919
|
Accumulated Indian CGT charge
since 1 April 2022 (£'000)
|
​
|
​
|
11,476
|
(1,870)
|
Net assets attributable excluding
Indian CGT charge (£'000)
|
​
|
​
|
438,530
|
356,049
|
Number of Ordinary shares in
issue
|
​
|
​
|
52,107,910
|
55,809,921
|
Adjusted net asset value per
Ordinary shareA
|
​
|
​
|
841.58p
|
637.97p
|
A Adjusted NAV is the
Company's NAV after adding back all Indian capital gains tax paid
or accrued since 1 April 2022 in respect of realised and unrealised
gains made on investments. ​
​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
Discount to net asset value per
Ordinary share ​ ​ ​ ​
|
The discount is the amount by
which the share price is lower than the net asset value per share
with debt at par value, expressed as a percentage of the net asset
value. ​ ​
​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
NAV per Ordinary share
|
​
|
a
|
819.56p
|
641.32p
|
Share price
|
​
|
b
|
652.00p
|
512.00p
|
Discount
|
​
|
(a-b)/a
|
20.4%
|
20.2%
|
​
|
​
|
​
|
​
|
​
|
Net gearing ​ ​ ​ ​
|
Net gearing measures the total
borrowings less cash and cash equivalents divided by shareholders'
funds, expressed as a percentage. Under AIC reporting guidance cash
and cash equivalents includes amounts due to and from brokers at
the year end. ​ ​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
Borrowings (£'000)
|
​
|
a
|
25,953
|
29,918
|
Cash (£'000)
|
​
|
b
|
6,452
|
7,178
|
Amounts due to brokers
(£'000)
|
​
|
c
|
482
|
1,418
|
Amounts due from brokers
(£'000)
|
​
|
d
|
2,328
|
3,266
|
Shareholders' funds
(£'000)
|
​
|
e
|
427,054
|
357,919
|
Net gearing
|
​
|
(a-b+c-d)/e
|
4.1%
|
5.8%
|
​
|
​
|
​
|
​
|
​
|
Ongoing charges ratio
|
​
|
​
|
​
|
​
|
The ongoing charges ratio has been
calculated in accordance with guidance issued by the AIC as the
total of investment management fees and administrative expenses are
expressed as a percentage of the average net asset values with debt
at par value throughout the year. ​
​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
2024
|
2023
|
Investment management fees
(£'000)
|
​
|
​
|
2,964
|
3,284
|
Administrative expenses
(£'000)
|
​
|
​
|
957
|
1,028
|
Less: non-recurring
chargesA (£'000)
|
​
|
​
|
-
|
(27)
|
Ongoing charges (£'000)
|
​
|
​
|
3,921
|
4,285
|
Average net assets
(£'000)
|
​
|
​
|
391,393
|
394,420
|
Ongoing charges ratio
|
​
|
​
|
1.00%
|
1.09%
|
A Professional fees
unlikely to recur.
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
The ongoing charges ratio provided
in the Company's Key Information Document is calculated in line
with the PRIIPs regulations which includes amongst other things,
the cost of borrowings and transaction costs. ​ ​ ​ ​
|
Total return
|
​
|
​
|
​
|
​
|
NAV and share price total returns
show how the NAV and share price has performed over a period of
time in percentage terms, taking into account both capital returns
and dividends paid to shareholders. Share price and NAV total
returns are monitored against open-ended and closed-ended
competitors, and the Benchmark, respectively. Adjusted NAV is the
Company's NAV after adding back all Indian capital gains tax paid
or accrued since 1 April 2022 in respect of realised or unrealised
gains made on investments. ​
​ ​ ​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Share
|
Year ended 31 March
2024
|
​
|
NAV
|
Adjusted NAV
|
Price
|
Opening at 1 April 2023
|
a
|
641.32p
|
637.97p
|
512.00p
|
Closing at 31 March
2024
|
b
|
819.56p
|
841.58p
|
652.00p
|
Price movements
|
c=(b/a)-1
|
27.8%
|
31.9%
|
27.3%
|
Dividend
reinvestmentA
|
d
|
N/A
|
N/A
|
N/A
|
Total return
|
c+d
|
+27.8%
|
+31.9%
|
+27.3%
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
​
|
Share
|
Year ended 31 March
2023
|
​
|
NAV
|
Adjusted NAV
|
Price
|
Opening at 1 April 2022
|
a
|
697.30p
|
697.30p
|
562.00p
|
Closing at 31 March
2023
|
b
|
641.32p
|
637.97p
|
512.00p
|
Price movements
|
c=(b/a)-1
|
-8.0%
|
-8.5%
|
-8.9%
|
Dividend
reinvestmentA
|
d
|
N/A
|
N/A
|
N/A
|
Total return
|
c+d
|
-8.0%
|
-8.5%
|
-8.9%
|
​​​​​
|
​​​​​
|
​
|
​
|
​
|
​
|
Share
|
Two years ended 31 March
2024 ​
|
NAV
|
Adjusted NAV
|
Price
|
Opening at 1 April 2022
|
a
|
697.30p
|
697.30p
|
562.00p
|
Closing at 31 March
2024
|
b
|
819.56p
|
841.58p
|
652.00p
|
Price movements
|
c=(b/a)-1
|
+17.5%
|
+20.7%
|
+16.0%
|
Dividend
reinvestmentA
|
d
|
N/A
|
N/A
|
N/A
|
Total return
|
c+d
|
+17.5%
|
+20.7%
|
+16.0%
|
A NAV total return
involves investing the net dividend in the NAV of the Company with
debt at par value on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting the net
dividend in the share price of the Company on the date on which
that dividend goes ex-dividend. ​ ​ ​ ​
|
|
|
|
|
|
|
|
|
| |
The financial information set out
above does not constitute the Company's statutory accounts for the
years ended 31 March 2024 or 2023 but is derived from those
accounts. Statutory accounts for 2023 have been delivered to the
registrar of companies. The auditor has reported on those accounts;
their reports were (i) unqualified, (ii) did not include a
reference to any matters to which the auditor drew attention by way
of emphasis without qualifying their report and (iii) did not
contain a statement under section 498 (2) or (3) of the Companies
Act 2006.
The statutory accounts for the
financial year ended 31 March 2024 have been approved by the Board
and audited and will be filed with the Registrar of Companies in
due course.
The Company's AGM will be held at
18 Bishops Square, London E1 6EG at 12.30pm on Friday 20 September
2024.
The Annual Report will be posted
to shareholders in July 2024. Further copies may be ordered from
the Manager's website: www.invtrusts.co.uk.
On behalf of the Board
abrdn Holdings Limited
Secretaries
13 June 2024
END