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