abrdnnewindia.co.uk
abrdn New India
Investment Trust plc
Annual Report 31 March 2024
Seeking world-class, well governed companies at the heart of India’s growth
The Company invests in Power Grid
Corporation of India, which expects to
benefit from the country’s rural
electrification programme.
abrdn New India Investment Trust plc 1
“India’s prospects are bright. The economy
is the fastest-growing among its peers.”
Michael Hughes, Chairman
“The key to taking advantage of this
market’s promise is picking quality stocks,
backed by fundamental research, which
aligns well with how we invest.”
Kristy Fong and James Thom
Investment Manager
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2 abrdn New India Investment Trust plc
Why invest in India?
Aspiration
India’s population is the largest in
the world with an expanding
middle class which will drive
consumption growth
Building India
Urbanisation and
infrastructure
development have multiplier
effects for job creation and the
wider economy
Renewables
India has committed to
meeting half of its energy
needs from renewable
sources by 2030
, thereby
reducing its dependence on
import
ed fuels
Robust financial strength
and sustainable
competitive advantage
Indian companies meeting a
‘quality’ threshold are included in
the portfolio, displaying both
strong financial
characteristics
and a consistent competitive
advantage in attractive industries
or sectors
Quality Management
The management of the best
companies in India is world
-class
and
understands the importance
of
good governance to drive the
best outcomes for investors and
other stakeholders
. Quality of
management is a key attribute
sought in portfolio companies
Return of growth stocks
As interest rates peak globally
over the medium term,
investors will seek out growth
stocks which are set to benefit
from this
. The portfolio’s focus
on those Indian companies with
the desire and capacity to
expand will drive performance
Why invest in abrdn New India Investment Trust plc?
Digitalisation
India
has made immense
progress in digital investments,
which will underpin its rise to be
one of the largest global
economies by the middle of
this century
Exporting talent
India’s giant tech service
s sector,
built on a highly educated and
diligent workforce, drives the
export of services by helping
global companies keep pace
with the fast
-changing tech
innovation landscape
Domestic opportunities
Global businesses are investing
in and shifting production to,
India, drawn by a wealth of
incentives and opportunities
abrdn New India Investment Trust plc 3
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Financial Highlights
31 March 2024
31 March 2023
% change
Equity shareholders’ funds (net assets)
£427,054,000
£357,919,000
+19.3
Market capitalisation
£339,744,000
£285,747,000
+18.9
Share price (mid market)
652.00p
512.00p
+27.3
Net asset value per Ordinary share
A
819.56p
641.32p
+27.8
Discount to net asset value
A
20.4%
20.2%
Net gearing
A
4.1%
5.8%
Total return per share
168.85p
(60.00p)
Operating costs
Ongoing charges ratio
A
1.00%
1.09%
A
Considered to be an Alternative Performance Measure. See pages 78 and 79 for further information on the one year percentage return.
Performance (total return, in Sterling terms)
1 year
3 year
5 year
10 year
% return
% return
% return
% return
Share price
A
+27.3
+20.3
+41.8
+190.4
Net asset value per Ordinary share
A
+27.8
+30.7
+54.4
+211.6
Adjusted net asset value per Ordinary share
A
+31.9
N/A
N/A
N/A
MSCI India Index (sterling adjusted)
+34.4
+56.6
+81.0
+238.2
A
Considered to be an Alternative Performance Measure. See page 80 for further information on the 1 year % return.
Source: abrdn plc, Morningstar & Lipper.
Financial Highlights and Performance
4 abrdn New India Investment Trust plc
Overview
Financial Highlights and Performance 3
Strategic Report
Chairman’s Statement 6
Investment Manager’s Report 9
Investment Case Studies 11
Overview of Strategy 13
Promoting the Success of the Company 19
Performance 21
Portfolio
Top Ten Investments 23
Portfolio 24
Sector Analysis and Sector Allocation 26
Currency Analysis 27
Governance
Board of Directors 30
Directors’ Report 32
Statement of Corporate Governance 39
Audit Committee’s Report 40
Directors’ Remuneration Report 44
Statement of Directors’ responsibilities in respect of the
Annual Report and financial statements 47
Independent Auditor’s Report to the Members of abrdn
New India Investment Trust plc 48
Financial Statements
Statement of Comprehensive Income 55
Statement of Financial Position 56
Statement of Changes in Equity 57
Statement of Cash Flows 58
Notes to the Financial Statements 59
Alternative Performance Measures 78
Alternative Investment Fund Managers Directive
Disclosures (unaudited) 81
Corporate Information
Information about the Investment Manager 83
Our Investment Manager’s Responsible Investment
Process 85
abrdn’s ESG Engagement 86
Investor Information 90
General
Notice of Annual General Meeting 94
Glossary of Terms 99
Additional Shareholder Information 101
Contents
abrdn New India Investment Trust plc 5
Strategic
Report
The Company invests in KEI Industries,
a manufacturer and distributor of
cables and wiring across India.
6 abrdn New India Investment Trust plc
Dear Shareholder
In the Half-Yearly Report, I highlighted how India’s
impressive performance continued to defy a global
environment rife with volatility. Since then, the country’s
upward trajectory has persisted – its stock market
continues to be one of the best performing markets while
the economy is the fastest-growing among its peers.
In order for the Company to take best advantage of these
positive markets, the Board has embarked on a number of
initiatives over the year ended 31 March 2024:
· encouraging the Manager to more proactively consider
mid-cap stocks representing a greater proportion of the
portfolio, while still preserving its investment philosophy
with its focus on quality and growth characteristics. In
response, the Board has noted that the Manager has
extended its analyst coverage, with deeper knowledge
of the mid-cap sector;
· supporting the Manager in taking more active positions
in stocks in which it has the most conviction; and
· at the AGM in September 2023, putting forward a
resolution to permit the Company to invest up to 10% of
net assets into pre-IPO investments, which was
overwhelmingly supported and, as a result, the Manager
will pursue opportunities where feasible.
Alongside these developments, the Board initiated a
higher level of share buy-backs when necessary, and
sought the more regular update of the Company’s
website (www.abrdnnewindia.co.uk), featuring additional
webcasts and articles on India as the nation holds a
general election involving over 1 billion voters.
The Board expects shareholders to benefit from these
developments in due course, against a background also
of a lower management fee implemented from
April 2023 onwards.
Overview
India’s prospects are bright and the current buoyant
mood on the ground is in sharp contrast to the prevailing
global sentiment of caution and uncertainty. The
economy is expanding at an annual rate above 7%,
playing catch-up after a period of sub-par growth before
the pandemic. This accelerating growth story is backed by
encouraging macroeconomic trends, including a real
estate boom, a robust infrastructure capex cycle and
manageable levels of inflation. Interest rates appear to
have peaked for now, barring any unexpected shocks to
the economy, as the Reserve Bank of India has not
announced any policy moves since February 2023.
The rise in public spending to fund critical infrastructure
projects – such as building more roads, railways and ports
– has been a crucial spur to economic development in
recent years, providing a solid foundation for sustainable
growth. These projects have been designed to both
create new jobs and encourage the revival of a private
capex cycle which is now in its early stages and will help to
sustain growth in the economy and in corporate earnings.
As outlined in the Government’s Interim Budget, India
plans to spend another US$134 billion (£107 billion) on
infrastructure alongside a renewed focus on long-term
reforms. This is welcome news for India’s capex-sensitive
sectors such as capital goods and building materials
where your Manager has re-positioned the portfolio by
introducing new, high-quality names and adding to
existing holdings.
The recent election result was a surprise and is discussed in
more detail in the Investment Manager’s Report on page 9.
Performance
Over the year ended 31 March 2024, the Company’s net
asset value (“NAV”) rose 27.8% in sterling terms (total
return), marking a sharp turnaround from the previous 12
months. The Company’s share price was up 27.3% while
the discount to NAV of 20.4% was almost unchanged from
that at March 2023. I am pleased that the Company has
delivered strong absolute returns, albeit the riskier MSCI
India Index (the “Benchmark”) outperformed, rising 34.4%
in total return terms.
The Manager is working hard to improve performance
both in absolute and relative terms and is confident that
the underlying fundamentals of the portfolio remain
sound, and our holdings continue to report healthy
earnings progression.
Looking at your Company’s performance during the year
in more detail, the largest positive contribution to relative
performance came from property. The portfolio has a
large exposure to this sector, compared to the
Benchmark, as India is undergoing a long overdue
recovery in residential property sales, and the long-term
prospects remain bright. It is pleasing to note that your
Manager’s decision to proactively pivot the portfolio
towards industrial names and likely beneficiaries of large-
scale public spending is starting to pay off.
Two other key developments influenced portfolio returns.
Firstly, a liquidity deficit in the Indian banking system at the
start of 2024 prompted concerns among investors over
near-term loan growth and margin pressure for lenders.
This affected the share price performance of HDFC Bank,
which remained weak. The other issue has been the
Chairman’s Statement
abrdn New India Investment Trust plc 7
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
uneven recovery in consumption where urban demand
has returned strongly while rural consumption remains
relatively soft. This development weighed on the
Company’s core consumer staples holding – Hindustan
Unilever. Our expectation is that there is room for both
fiscal and monetary policy support by the Government to
resolve these issues, noting the overall health of the
banking sector remains strong. While HDFC Bank and
Hindustan Unilever disappointed due to these challenges,
they both remain high-quality businesses that are
intrinsically linked to India’s future prosperity.
The Board and I continue to have faith in the Company’s
long-term growth potential. Your Manager is adapting the
portfolio to market conditions while considering new ideas
that will benefit from positive structural trends. Further
detail on the drivers of performance and changes made
to the portfolio during the year may be found in the
Investment Manager’s Report on pages 9 and 10.
Manager Change
After involvement with the Company for nearly 20 years,
Kristy Fong is stepping down as Co-Investment Manager
in September 2024. James Thom becomes the lead
Investment Manager, assisted by Rita Tahilramani. The
Board thanks Kristy for her stewardship of the Company’s
investment portfolio and wishes her well.
Conditional tender offer
In March 2022 the Board announced the introduction of a
five-yearly performance-related conditional tender offer.
The Board was concerned about the relative
underperformance of the Company’s NAV, as compared
to its Benchmark. Following discussions with the
Investment Manager, the Board decided that, should the
Company’s NAV total return underperform the
Company’s Benchmark over the five-year period from 1
April 2022, then shareholders should be offered the
opportunity to realise up to 25 per cent of their investment
for cash at a level close to NAV. For these purposes, the
Company’s NAV per share is adjusted for Indian capital
gains tax (the “Adjusted NAV”) to enable a like-for-like
comparison with the Benchmark.
The Board keeps the Company’s performance under
review and, over the first two years of the measurement
period from 1 April 2022 to 31 March 2024, the Adjusted
NAV total return was 20.7% versus the Benchmark’s total
return of 26.4% (please see the Alternative Performance
Measures on page 80 for further information).
Discount and Share Buybacks
The Board continues to monitor actively the discount of
the Ordinary share price to the NAV per Ordinary share
and pursues a policy of selective buybacks of shares
where to do so, in the opinion of the Board, is in the best
interests of shareholders, while also having regard to the
overall size of the Company.
Over the year ended 31 March 2024, the Company
bought back into treasury 3,702,011 (2023 - 2,127,206)
Ordinary shares, representing 6.6% (2023 – 3.7%) of the
issued share capital (excluding treasury shares) at the
start of the year, a considerable step up in buyback
activity. At 31 March 2024, there were 52,107,910 (2023 -
55,809,921) shares in issue with voting rights and an
additional 6,962,230 (2023 - 3,260,219) shares held in
treasury. Between the year end and 13 June 2024, the
latest practicable date prior to approval of this Report, a
further 564,198 shares were bought back into treasury
resulting in 51,543,712 shares in issue with voting shares
and 7,526,428 shares held in treasury.
The Board believes that a combination of stronger long-
term investment performance and effective marketing
should increase demand for the Company’s shares and
reduce the discount to NAV at which they trade, over time.
Gearing
As at 31 March 2024, £26 million (2023 - £30m) had been
drawn from the £30m bank loan provided by Royal Bank
of Scotland International, which resulted in net gearing of
4.1% (2023 – 5.8%). During the year, this gearing had a
positive impact on returns, though the Board and
Manager are conscious of the increased interest cost of
gearing, so keep the level of gearing under regular review.
The ability to gear is one of the advantages of the closed
ended company structure and your Manager continues
to seek opportunities to deploy this facility for the benefit
of shareholders.
Impact of Indian Capital Gains Tax
The Company, along with other investment vehicles, is
subject to both short and long term capital gains taxes in
India on the growth in value of its investment portfolio,
which become payable when underlying investments are
sold and profits crystallised. Where investments are
valued at a profit, but not yet sold, the Company must
accrue for the potential capital gains tax payable, which
amounted to £19.4 million (2023 - £11.1 million) at
31 March 2024, equivalent to a reduction in the NAV
per share of 37.2p or 4.5% at 31 March 2024
(2023 – 20.0p or 3.1%).
8 abrdn New India Investment Trust plc
Shareholder Engagement
The Board encourages shareholders to visit the
Company’s website (www.abrdnnewindia.co.uk) for the
latest information and monthly factsheets as well as
accessing podcasts and thought-leadership and macro
research articles published by the Manager.
Annual General Meeting
The Company’s AGM will be held at 18 Bishops Square,
London E1 6EG at 12.30pm on Friday 20 September 2024.
The AGM provides shareholders with an opportunity to ask
any questions that they may have of either the Board or
the Investment Manager. Voting on the resolutions to be
put to shareholders will be conducted by way of a poll and
those attending are encouraged to bring with them a
letter of corporate representation in respect of their
ownership of shares in the Company.
I look forward to meeting as many of you as possible over
refreshments which will follow the AGM. Shareholders,
whether attending the AGM or not, are encouraged to
submit questions for the Board and/or Investment
Manager, in advance, by email to new.india@abrdn.com.
Online Shareholder Presentation
In order to encourage and promote interaction and
engagement with the Company’s shareholders, the
Company is holding an interactive Online Shareholder
Presentation (the “Presentation”) at 11.00am on Thursday
12 September 2024, to cater for those shareholders who
may be unable to attend the AGM. During the
Presentation, shareholders will receive a short introduction
from the Chairman and portfolio update from the
Investment Manager, followed by an interactive question
and answer session. The Presentation is being held ahead
of the AGM in order to allow shareholders to submit their
proxy votes prior to the meeting. Further information on
how to register for the Presentation may be found on the
Company’s website (www.abrdnnewindia.co.uk).
Update
I am pleased to report that your Company has performed
extremely well since the year end with total returns for the
NAV of 14.7% compared to 6.0% for the Benchmark from
31 March 2024 to 10 June 2024 (the latest practicable
date prior to approval of this Report).
Outlook
India’s economy is the fastest-growing among its peers
and the country offers favourable demographics: a large,
relatively young population and a growing middle class.
Indian corporations are becoming more sophisticated,
with many competing at an international level. Economic
conditions remain buoyant with supportive policymaking
from the Government and Reserve Bank of India, while the
capex cycle and infrastructure spending should help to
sustain momentum. Indian companies are also benefitting
as multinational corporations diversify their supply chains
to reduce their reliance on China. From a global
perspective, India enjoys more geopolitical stability
compared to other emerging market countries with
tensions between the United States and China
remaining high.
Investing in India, however, means accepting market
volatility, particularly as high growth rates in corporate
earnings come with high valuations. This is particularly true
in small and mid-cap stocks; these do not form the core of
our portfolio although they are included in it to ensure that
shareholders benefit over the medium-to-longer term.
Your Board is confident that your Manager has assembled
a portfolio of high-quality, resilient companies that possess
strong balance sheets and can profit from pricing power
at each stage of the economic cycle.
Michael Hughes
Chairman
13 June 2024
Chairman’s Statement
Continued
abrdn New India Investment Trust plc 9
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
In the year ended 31 March 2024, the Company’s net asset
value (“NAV”) total return rose 27.8%, compared to an 8%
decline in the previous year. A substantial part of that
negative return was clawed back by sticking to our long-term
quality investment philosophy and by repositioning the
portfolio towards structurally attractive segments that are
now paying off. However, the Company was not able to keep
pace with the MSCI India Index, which rose 34.4%. We explain
the reasons below.
Market review
As the Chairman describes on pages 6 and 7, the Indian
market had a strong run throughout most of the year,
underpinned by a robust domestic economy and an enviable
growth trajectory. Retail inflation has remained steady at just
over 5%, while the Reserve Bank of India has not increased
interest rates since February 2023. The estimated GDP
growth rate for the full financial year was projected at 7.6%,
surpassing the previous year’s figure of 7%, leading to India
holding to its position as the world’s fastest-growing major
economy. We did see some pullback in the market this year,
particularly in the small-and-mid (“SMID”) cap space. After
outperforming Indian large-caps last year, SMID companies
corrected in March 2024 when the Indian securities regulator
increased scrutiny towards domestic mutual funds due to
rising valuations. We had been very selective in adding SMID
names to the portfolio, preferring companies with good
earnings visibility and a track record of delivering on growth.
At the time of writing, India’s 2024 general election has just
concluded, and the outcome came as a big surprise to the
market. Polls had predicted that Prime Minister Narendra
Modi and his party would comfortably win enough seats in the
lower house of parliament to form a government on their
own. Instead, Modi’s Bharatiya Janata Party (BJP) failed to
secure a majority. This has forced Modi and the BJP into a
coalition government for the first time in his career. Modi’s
bargaining power within this alliance is likely to be reduced,
with a possibility of ministries reshuffling and some of them
being given to the non-BJP leaders. As a result, we will need to
keep a close watch on Cabinet formation and capital
allocation in the FY25 budget.
Thinking about the implications for policymaking, we view
BJP's broad agenda around infrastructure, manufacturing,
and technology is likely to continue, and would create
structural tailwinds for the economy. New big bang reforms,
however, are unlikely to come from a coalition government.
Instead, we could see measures favouring populist agendas
take precedence whilst there could be some moderation in
capital expenditure. Job creation and tackling the rural
economy could also take the spotlight.
The Company's quality focus and positioning in several
defensive sectors such as IT Services, Consumer Staples, and,
to some extent, Banking and Insurance, should provide
resilience to the portfolio through the current market
turbulence. Our conviction in our India holdings remains
strong, re-enforced by recent trips and meetings with
company management teams. Valuation dips could present
buying opportunities.
Performance review
The strongest returns came from the holdings in property as
well as from infrastructure and capital expenditure (capex)
beneficiaries in utilities and industrials sectors. Our consumer,
financials, and energy stocks, however, lagged the market’s
rally. Real estate was the biggest performance driver, with our
exposures benefitting from structural trends as well as the SMID
rally seen throughout most of 2023. Property developers Godrej
Properties (see the case study on page 12) and Prestige Estates
were the top stock contributors, reporting strong pre-sales
numbers for their new housing projects. India is undergoing a
long overdue recovery in residential property sales and the
future prospects for the overall sector remain bright.
We were pleased to see that our repositioning towards
industrial names and capex proxies has paid off. India has
ramped up public capex by building more roads, railways,
ports and similar projects to create additional jobs and revive
private capex. Our holdings that benefited from this step-up
in capital spending include ABB India as well as Power Grid
Corporation of India. Power Grid has raised its capex
guidance as its development pipeline and earnings visibility
remain robust. Meanwhile, our telco exposure in Bharti Airtel
(see the case study on page 11) did well amid ongoing
industry consolidation, and on expectations of a new tariff
hike after the elections.
Some of our IPO names that were depressed in the previous
year, due to the growth-to-value rotation in the market, have
started to demonstrate positive performance. This includes
affordable housing company Aptus Value Housing Finance
and online insurance
platform, PB Fintech.
Looking at where the Company has fallen short, HDFC Bank
and Hindustan Unilever have both disappointed in growth and,
therefore, in relative share price performance. HDFC Bank will
now take longer to deliver integration cost savings following
its merger with mortgage lender HDFC, in a tighter liquidity
environment. A sluggish rural economy has acted as a brake
on Hindustan Unilever’s growth. While we continue to believe
in the medium-term investment theses for both stocks, we
have partially cut these holdings to release funds for several
of our new ideas discussed below.
In the energy sector, our holding in Aegis Logistics
did well but
trailed its peers – mostly public sector companies – which we
tend to avoid owning in the portfolio. Index heavyweight
Reliance Industries lagged in 2023 but saw a recovery in its
Investment Manager’s Report
10 abrdn New India Investment Trust plc
share price in 2024. We do not hold the company due
to reservations around capital allocation and
governance standards.
Finally, within consumer discretionary, our auto holdings
performed well but underperformed some of their peers. Not
holding online delivery company Zomato also affected relative
performance. While we are aware that we are lightly exposed
here, this sector is seeing increasingly stretched valuations, and
we believe it is necessary to tread with caution.
Overall, the underlying fundamentals of our portfolio remain
sound, and our companies continue to report healthy
earnings growth, mostly in line with expectations.
Portfolio Activity
During the year, we actively repositioned the portfolio to
maximise potential returns. Key changes included scaling up
the exposure to investment themes that we found attractive,
provided we could find stocks that met our quality criteria
from a bottom-up perspective in these sectors. These
structurally attractive themes include: premiumisation,
property upcycle, and infrastructure and capex beneficiaries.
We also added some high-quality names based on stock-
specific factors that were largely independent of more top-
down themes.
Within consumer, we introduced a new SMID-cap addition in
the automotive sector, Uno Minda, which provides auto
components to four-wheeler and two-wheeler OEMs. In real
estate, we added
Phoenix Mills, which operates high quality
shopping malls in top-tier and state capital cities with a good
pipeline of new assets expected over the next few years. It is
also a premium consumption play as India’s disposable
income slowly tracks higher alongside growth.
In Industrials, we introduced Siemens India, the Indian arm of
the German multi-national, as well as a SMID-cap name, Apar
Industries. We also added Havells India, a proxy to the
electrical and consumer durable sector, and building material
company Pidilite, an indirect beneficiary of the housing cycle
and home improvement trend. In Software & Services, we
scaled back our position given the sector’s vulnerability to a
slow-down in the core US market and a subsequent
contraction in IT spend. However, we have also taken
advantage of the price falls across the sector and added a
new mid-cap name, Coforge, which provides niche IT services
with deep domain expertise.
While financials remains our largest portfolio weight by
sector, we broadened our mix of stock holdings. We added to
NBFCs (non-bank finance companies) by initiating
Cholamandalam Investment and Finance
that has a long
growth runway and has operating levers to mitigate against
rate headwinds
. We also introduced KFin Technologies, a
fast-growing player in the Mutual fund Registrar and Transfer
Agency duopoly, benefitting from structural growth trends
such as wealth accumulation in India. These were funded by
reducing our banking exposure, primarily with the exit of
Kotak Mahindra Bank.
Lastly, we also exited lower conviction holdings Asian Paints
and Renew Energy Global to fund some of the new ideas.
Outlook
India is the world’s fastest-growing major economy, backed
by a resilient macro backdrop that includes a real estate
boom, strong consumer sentiment in urban areas, and a
robust infrastructure capex cycle.
The growth story is underpinned largely by supportive policies
from the central government as well as a decade of painful,
but necessary economic reforms. The groundwork laid by
these sweeping reforms has put India on a positive economic
trajectory. We are also seeing early signs of a private capex
revival. This can potentially continue to sustain both economic
momentum and corporate earnings growth.
India still faces some near-term risks, most of which are
external, including potentially higher global energy prices and
a slowdown in the world economy. As a net oil importer,
recent developments in the Middle East remain a potential
source of concern as any escalation will push oil prices higher.
As the Chairman noted earlier, valuation is also a perpetual
risk – given its recent outperformance, India has become a
consensus trade, with valuations becoming stretched,
especially in small and mid-caps. The key to taking
advantage of this market’s promise is bottom-up stock
picking that is backed by fundamental research, which aligns
well with how we invest.
The Company’s downside is well-protected given our quality
focus, and our defensive holdings are in a good position in
case of profit taking. Furthermore, any correction in the
market would be an opportunity to add to the holdings. The
consistency of earnings growth of the portfolio remains
healthy and individual company fundamentals, such as
pricing power, strong balance sheets and the ability to sustain
margins, remain solid.
Kristy Fong and James Thom
Investment Manager
13 June 2024
Investment Manager’s Report
Continued
abrdn New India Investment Trust plc 11
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Bharti Airtel – the most financially disciplined
player in a consolidating telecom market
Bharti Airtel offers mobile, voice, data and cloud-based
solutions to over 500 million customers in 17 countries
across Asia and Africa. It is India’s largest integrated
telecom solutions provider to the retail and enterprise
markets, and also the No.2 mobile operator in Africa, after
South Africa’s MTN Group.
We believe that Airtel is the most commercial and
financially disciplined service provider in an Indian telecom
landscape that has undergone significant market repair.
The market has consolidated down from close to 12
companies just five to six years ago to less than a handful
of players today, in what is now effectively a duopoly
between Jio and Airtel.
Thanks to the market repair, Airtel turned free cash flow
(FCF) positive for the first time in 2022. The company has
also demonstrated its ability to raise capital, with a rights
issue of up to 210 billion rupees (£2 billion) in September
2021 and most of the proceeds yet to be used. Airtel’s
capex will also start to taper off as its rural expansion
slows, easing the funding needs and potentially improving
the FCF outlook, which could lead the company to
consider paying down debt or even paying dividends.
Most recently, the company also listed its Bharti Hexacom
subsidiary, the group’s first IPO in over a decade.
While Airtel continues to deliver consistent growth across
all its businesses with an industry leading average revenue
per user (ARPU), its return on capital employed (ROCE),
however, remains low at 9.4% [1]. The management
indicated that tariff repair was critical to ensure the
industry’s health, and it was confident that tariffs would
rise over the next two years. This would also help raise
its ROCE.
The market’s structural dynamics are in Airtel’s favour. The
market remains underpenetrated, with mobile
penetration standing at 69% as of FY22, indicating room
for organic growth. Mobile spend as a percentage of GDP
is low at 0.95% in FY22, which is much lower compared to
other ASEAN markets at 1.2-1.8% [2].
As smartphones become more affordable and
subscribers migrate to 5G, the uptake of data services is
increasing; for Airtel, data services are growing rapidly and
the group expects this trend to be sustainable [3]. The
other key growth area is in home broadband services,
which is doing well with healthy subscriber additions and
improving ARPU, supported by the rollout of its high-speed
Xstream AirFiber network across the country.
On the sustainability front, the group continues to make
progress on its ESG agenda. Airtel has committed to
reduce absolute Scope 1 and 2 greenhouse gas emissions
by 50.2% by FY 2030-31 from the base year of FY 2020-21.
It has also committed to reducing absolute Scope 3 GHG
emissions by 42% over the same time frame.
[1] Bharti Airtel Limited – Media Release February 05, 2024
[2] abrdn research
[3] Bharti Airtel Limited – Integrated Report and Annual Financial Statements 2022-23
Investment Case Studies
12 abrdn New India Investment Trust plc
Godrej Properties – reputable high-quality
real estate developer in India
Set up in 1897, the Godrej Group has its roots in India's
independence and Swadeshi movement [1]. Its founder,
Ardeshir Godrej, a lawyer-turned-serial entrepreneur,
failed with a few ventures before he found success with a
locks business [2]. The group has since grown into one
with annual revenue of about US$6 billion earned from
consumer goods, real estate, appliances, agriculture and
other areas, and it is still controlled by the Godrej family –
one of the most eminent industrial families in India with
admirable track record of treating minority shareholders
fairly over the decades. That is why we have felt
comfortable investing in several of their listed entities over
the years, including its primary property vehicle Godrej
Properties Limited (“GPL”), which was established in 1990
and listed in 2010. The group considers real estate as a key
growth area among its businesses. GPL is the country’s
largest developer by number of homes sold in FY23. It has
delivered close to 41 million sq ft of real estate since FY18,
and it is developing landmark projects in 12 cities across
India covering over 18.58 million sq m [3].
GPL’s solid execution has led to the developer being
ranked as the most trusted real estate brand in the 2019
Brand Trust report. This also reflects its reputation and
how it stands out from its peers in overall quality. Its other
advantages include an asset-light and capital efficient
development model, and good access to capital with the
lowest bank funding rates across the sector. The
company appears to be at an inflection point with
improving fundamentals, and we expect steadily
improving presales, profitability and cash flows over the
next few years.
More broadly, we view GPL as well positioned to benefit
from the domestic real estate industry’s up-cycle. The
industry’s longer-term outlook remains bright, supported
by an aspirational population, rising urbanisation and
incomes, and favourable regulatory changes. Aside from
the reform of the Real Estate (Regulation and
Development) Act in India, that has led to a more
regulated industry and greater protection for home
buyers, schemes like the Pradhan Mantri Awas Yojana and
Rajiv Awas Yojana have incentivised developers to venture
into the affordable housing segment, fostering
accessibility and affordability for the population.
The developer is also a leader on the sustainability front. It
has been included among the global sustainability leaders
in the Dow Jones Sustainability Indices list and has been
ranked no.1 globally for three consecutive years in 2020,
2021 and 2022 by the Global Real Estate Sustainability
benchmark (GRESB). MSCI has also given an ESG rating of
BB to GPL, citing its green building efforts. As of the third
quarter of FY23-24, 96% of GPL’s portfolio is certified
under credible external green building rating systems like
IGBC and GRIHA [3]. In addition, the company is water
positive and carbon neutral for Scope 1 and Scope 2
greenhouse gas emissions, and it is strengthening its
efforts to include Scope 3 emissions through its supplier
engagement programme.
[1] Swadeshi movement - Wikipedia
[2] About Godrej Properties | Best Real Estate Companies in India
[3] Godrej Properties 3QFY2024 Results Presentation
Investment Case Studies
Continued
abrdn New India Investment Trust plc 13
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Business Model
The business of the Company is that of an investment
company which continues to qualify as an investment
trust for UK capital gains tax purposes. The Directors do
not envisage any change either to this model or to the
Company’s activities in the foreseeable future.
Investment Objective
The Company aims to provide shareholders with long
term capital appreciation by investment in companies
which are incorporated in India, or which derive significant
revenue or profit from India, with dividend yield from the
Company being of secondary importance.
Investment Policy
The Company invests primarily in Indian equity securities.
Delivering the Investment Policy
At the AGM on 27 September 2023, shareholders
approved a new investment policy, involving amendments
to Risk Diversification; the sections under Gearing;
Currency, Hedging Policy and Derivatives; and, Investment
Restrictions are unchanged. The former investment policy,
in place until 27 September 2023, may be found on page
12 of the Annual Report for the year ended 31 March 2023.
The Company’s current investment policy is as follows:
Risk Diversification
The investment policy is flexible, enabling it to invest in all
types of securities, including equities, debt and convertible
securities in companies listed on the Indian stock
exchanges or which are listed on other international
exchanges, and which derive significant revenue or profit
from India. The Company may, where appropriate, invest
in open-ended collective investment schemes and
closed-end funds which invest in India and are listed on
the Indian stock exchanges. The Company is free to invest
in any particular market segment or geographical region
of India or in small, mid or large capitalisation companies.
The Company may invest up to 10% of its NAV in
unquoted companies in aggregate, measured at the time
of each investment.
The Company’s portfolio will typically comprise in the
region of 25 to 50 holdings, but with due consideration
given to spreading investment risk. No individual issuer is
expected normally to represent a greater weight in the
portfolio than the higher of (i) 10% of the Company’s net
assets or (ii) the individual issuer’s weight in the MSCI India
Index (in sterling terms) plus 2%, both as measured at the
time of each investment, although there is a maximum
permitted exposure to a single issuer of 20% of the
Company’s net assets at all times.
Gearing
The Company is permitted to borrow up to 25% of its net
assets (measured when new borrowings are incurred). It
is intended that this power should be used to leverage the
Company’s portfolio in order to enhance returns when
and to the extent that it is considered appropriate to
do so. Under normal circumstances, over the longer term
and in tandem with the rising value of the Company’s
investments, gearing is expected to improve returns.
The Company’s gearing is essentially structural in nature
but, in addition, may be used for specific opportunities
or circumstances. The Directors take care to ensure
that borrowing covenants permit flexibility of
investment policy.
Currency, Hedging Policy and Derivatives
The Company’s financial statements are maintained in
Sterling while, because of its investment focus, nearly all of
its portfolio investments are denominated and quoted in
the Indian Rupee. Although it is not the Company’s present
intention to do so, the Company may, where appropriate
and economic to do so, employ a policy of hedging
against fluctuations in the rate of exchange between
Sterling and other currencies in which its investments are
denominated. Cash balances are held in such currency or
currencies as the Manager considers appropriate,
although it is expected that this would primarily be Sterling.
Although the Company does not employ derivatives
presently, it may do so, if appropriate, to enhance portfolio
returns (of a capital or income nature) and for efficient
portfolio management, that is, to reduce, transfer or
eliminate risk in its investments, including protection
against currency risks, or to gain exposure to a
specific market.
Investment Restrictions
It is the investment policy of the Company to invest no
more than 15% of its gross assets in other listed investment
companies (including listed investment trusts). The
Company held no investments in other listed investment
companies during the year ended 31 March 2024.
Benchmark
The Company’s Benchmark is the MSCI India Index
(Sterling-adjusted). The Board also considers the Adjusted
NAV (see Glossary on page 99) in relation to the
conditional tender offer announced in March 2022.
Overview of Strategy
14 abrdn New India Investment Trust plc
Key Performance Indicators
At each Board meeting, the Directors consider a number of performance measures to assess the Company’s success in
achieving its objective. The main Key Performance Indicators (“KPIs”) identified by the Board in relation to the Company,
which are considered at each Board meeting, are as follows:
KPI
Description
Performance of NAV and share price
compared to the Benchmark
The Board considers the Company’s NAV return, the Adjusted NAV return and share price
return, all relative to the Benchmark, to be the best indicator of performance over time.
The figures for this year and for the past three, five and ten years are set out on page 3 for
the NAV return and share price total return while a graph showing NAV and share price
total return performance against the Benchmark over the past five years is shown on
page 21.
Discount to NAV
The discount at which the Company’s share price trades relative to the NAV per share is
monitored by the Board. A graph showing the discount over the last five years is shown on
page 21.
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 on page 3.
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” on page 15). In addition, the Audit
Committee considers the implications for the Company’s investment portfolio of a changing climate. The Board
assesses this emerging risk as it develops, including how investor sentiment is evolving towards climate risk within
investment portfolios, and will consider how the Company may mitigate this risk, and other emerging risks, if and when
they become material. The Board is also conscious of the development of Artificial Intelligence (“AI”), which may have a
potentially positive or negative impact at Company, sector and country level.
In all other respects, the Company’s principal risks and uncertainties have not changed materially since the date of the
previous Annual Report and are not expected to change materially for the current financial year.
An explanation of other risks relating to the Company’s investment activities, specifically market price, interest rate,
liquidity and credit risk, and a note of how these risks are managed, is contained in Note 17 to the financial statements.
Overview of Strategy
Continued
abrdn New India Investment Trust plc 15
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Description
Mitigating Action
Strategic risk – inappropriate business strategy leads to lack of
demand for the Company’s shares, leading to its shares trading
at a persistent and anomalous discount to its Net Asset Value
The Board reviews its strategy and investment mandate annually
in the context of developments in markets and taking account of
investor feedback.
Market risk
– falls in the prices of securities issued by Indian
companies, which may be caused by company-specific issues
or may be determined by local and international economic,
political, social, and financial factors, including pandemics,
natural disasters (arising from climate change or otherwise) or
geo-political conflicts.
The Investment Manager seeks to reduce market risk by investing
in a wide variety of companies with strong balance sheets and the
ability to generate increased earnings. In addition, investments are
made in diversified sectors in order to reduce the risk of a single
large exposure. The Investment Manager believes that
diversification should be looked at in absolute terms rather than
relative to the Benchmark. The performance of the portfolio
relative to the Benchmark and the underlying stock and sector
weightings in the portfolio against their Benchmark weightings are
monitored closely by the Board.
Poor investment performance – poor investment performance
leads to loss of asset value in comparison to the benchmark
and/or the peer group, and, over time, can lead to a widening of
the discount to NAV at which the Company’s shares trade.
The investment performance of the Manager is reviewed at each
Board meeting and compared to the benchmark and the peer
group. Exposure to a range of risk factors is also reviewed.
Discount
– factors which affect the discount to NAV at which the
Ordinary shares of the Company trade. These may include the
popularity of the investment objective of the Company, the
popularity of investment trust shares in general, the investment
performance of the Company, and the ease with which the
Company’s Ordinary shares can be traded on the London Stock
Exchange.
The Board keeps under review the discount and undertakes
selective buyback of shares where to do so would be in the best
interests of shareholders, balanced against reducing the overall
size of the Company. Any shares bought back are held in treasury.
Single country risk – the Company invests in companies which
are incorporated in, or derive significant revenue or profit from, a
single country – India. Investing in a single country, which is also
an emerging market, is generally a higher risk strategy than
investing more widely, or in developed markets. There is likely to
be greater political and regulatory risk, and the standards of
disclosures and corporate governance may be less developed
than in developed markets. In addition, there may be specific
internal political and social issues, or wider geo-political issues,
which could lead to social upheaval, unrest, or conflict.
These events may lead to falls in equity markets, and also
adverse foreign currency movements.
The Company’s exposure to India is an integral part of its
investment strategy. Risk can be mitigated, to a degree, by the
monitoring of emerging risks, and by appropriate actions in
relation to portfolio construction, liquidity and gearing.
The Board is kept informed of political, regulatory and tax issues
affecting the portfolio.
The Board monitors the Rupee/Sterling exchange rate and
reviews the currency impacts on both capital and income
regularly, although the Company did not hedge its foreign
currency exposure during the year.
Supplier risk – The Company is dependent on the services
provided by third parties, and in particular the Manager and
Depositary. Failure by third parties to carry out their obligations
to the Company, or reputational issues or inadequate
succession arrangements, could disrupt the level of service
provided. In particular, the insolvency of the depositary or
custodian or sub-custodian, or a shortfall in the assets held by
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.
16 abrdn New India Investment Trust plc
Overview of Strategy
Continued
Description
Mitigating Action
that depositary, custodian or sub-custodian arising from fraud,
operational errors or settlement difficulties resulting in a loss of
assets owned by the Company.
Financial and regulatory
– the financial risks associated with the
portfolio could result in losses to the Company. In addition, failure
to comply with relevant regulation (including the Companies
Act, the Financial Services and Markets Act, the Alternative
Investment Fund Managers Directive, accounting standards,
investment trust regulations and the Listing Rules, Disclosure
Guidance and Transparency Rules and Prospectus Rules) may
have an adverse impact on the Company.
Any change in the Company’s tax status or in taxation legislation
either in India or in the UK (including the tax treatment of
dividends, capital gains or other investment income received by
the Company) could affect the value of the investments held by
the Company and the Company’s ability to provide returns to
shareholders or alter the post-tax returns to shareholders.
In particular, the calculation of Indian capital gains tax which
may be due can be complex and is dependent on the
interpretation of the legislation, which may result in an under- or
over-provision being made.
The financial risks associated with the Company include market
risk, liquidity risk and credit risk, all of which are mitigated by the
Manager. Further details of the steps taken to mitigate the
financial risks associated with the portfolio are set out in Note 17 to
the financial statements.
The Board is responsible for ensuring the Company’s compliance
with applicable regulations. Monitoring of this compliance, and
regular reporting to the Board thereon, has been delegated to the
Manager. The Board receives updates from the Manager and AIC
briefings concerning industry changes. From time to time, the
Company also employs external advisers covering specific areas
of compliance.
In particular, the Board receives reports from the Manager
covering investment movements, the level and type of forecast
income and expenditure and the amount of proposed dividends
with a view to ensuring that the Company continues to qualify as
an investment trust under Chapter 4 of Part 24 of the Corporation
Tax Act 2010. A breach of these regulations would mean that the
Company is no longer exempt from UK capital gains tax on profits
realised from the sale of its investments.
The Indian capital gains tax provision is calculated by an
independent third party and reviewed at least half-yearly by the
Audit Committee.
Gearing – while the use of gearing should enhance the total
return on the Ordinary shares where the return on the
Company’s underlying assets is rising and exceeds the cost of
borrowing, it will have the opposite effect where the underlying
return is less than the cost of borrowing, further reducing the
total return on the Ordinary shares. A significant fall in the value
of the Company’s investment portfolio could result in a breach
of bank covenants and trigger demands for early repayment.
The Board is responsible for determining the gearing strategy for
the Company, with day-to-day gearing decisions being made by
the Investment Manager. Borrowings are short term in nature and
particular care is taken to ensure that any bank covenants permit
maximum flexibility of investment policy. The Board has agreed
certain gearing restrictions with the Manager and reviews
compliance with these guidelines at each Board meeting.
Loan agreements are entered into following review by the
Company’s lawyers.
Unlisted securities
– the Company may invest in unlisted
securities, which may not be readily realisable, and may be
more difficult to value in the absence of a quoted price. There
may be less available information and less regulation in respect
of disclosures and corporate governance.
At 31 March 2024, there were no unlisted investments in the
portfolio. The Manager is currently seeking the necessary
regulatory permissions to make unlisted investments in India.
Once obtained, the Manager will conduct appropriate due
diligence in respect of any unlisted investments. Valuation will be
assessed by an independent third party and reviewed at least
half-yearly by the Audit Committee.
abrdn New India Investment Trust plc 17
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Promoting the Company
The Board recognises the importance of updating existing
investors as well as promoting the Company to
prospective investors, with the aim of improving liquidity in
the Company’s shares and reducing the discount at which
they trade, thereby enhancing value. Communicating the
long-term attractions of the Company is key.
The Board seeks to achieve this through subscription to,
and participation in, the promotional programme run by
abrdn on behalf of the investment companies under
its management.
The Company’s financial contribution to the programme is
matched by abrdn. abrdn’s promotional activities team
reports quarterly to the Board giving analysis of the
promotional activities as well as updates on the
shareholder register and any changes in the composition
of that register.
The Company further supports the Manager’s investor
relations programme which involves regional roadshows
as well as promotional and public relations campaigns.
Board Diversity and Succession
The Board recognises the importance of having a range
of skilled, experienced individuals with the right knowledge
represented on the Board in order to allow the Board to
fulfil its obligations. The Board also recognises the benefits,
and is committed to, the principle of diversity in its
recruitment of new Board members. The Board will
continue to ensure that all appointments are made on the
basis of merit against the specification prepared for each
appointment and will search widely when recruiting any
new Director with a view to maximising diversity.
Consequently, the Company does not consider it
appropriate to set specific diversity targets. At 31 March
2024, there were three male Directors and one female
Director on the Board.
The Board has agreed a policy whereby no Director,
including the Chairman, shall serve for longer than the
ninth AGM after the date of their initial date of
appointment as a Director unless in relation to
exceptional circumstances.
Environmental, Social and Human
Rights Issues
The Company has no employees as it is managed by
abrdn Fund Managers Limited and there are therefore no
disclosures to be made in respect of employees. The
Company’s responsible investment policy is outlined on
page 15 while the Manager’s ESG engagement is set out
on pages 85 to 89.
Due to the nature of the Company’s business, being a
company that does not offer goods and services to
customers, the Board considers that it is not within the
scope of the Modern Slavery Act 2015 because it has no
turnover. The Company is therefore not required to make
a slavery and human trafficking statement.
Notwithstanding this, the Board considers the Company’s
supply chains, dealing predominantly with professional
advisers and service providers in the financial services
industry, to be low risk in relation to this matter.
Global Greenhouse Gas Emissions and
Streamlined Energy and Carbon Reporting
(“SECR”)
All of the Company’s activities are outsourced to third
parties. The Company therefore has no greenhouse gas
emissions to report from the operations of its business, nor
does it have responsibility for any other emissions
producing sources under the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations
2013. For the same reason as set out above, the
Company considers itself to be a low energy user under
the SECR regulations and therefore is not required to
disclose energy and carbon information.
Task Force for Climate-related Financial
Disclosures (“TCFD”)
Under Listing Rule 15.4.29(R), the Company, as a closed
ended investment company, is exempt from complying
with the Task Force on Climate-related Financial
Disclosures (“TCFD”).
Whilst TCFD is currently not applicable to the Company,
the Manager has produced a product level report on the
Company in accordance with the FCA’s rules and
guidance regarding the disclosure of climate-related
financial information consistent with TCFD
Recommendations and Recommended Disclosures.
These disclosures are intended to help meet the
information needs of market participants, including
institutional clients and consumers of financial products, in
relation to the climate-related impact and risks of the
18 abrdn New India Investment Trust plc
Manager’s TCFD in-scope business. The product level
report on the Company is available on the Manager’s
website at: invtrusts.co.uk.
Viability Statement
The Company does not have a fixed period strategic plan,
but the Board does formally consider risks and strategy on
at least an annual basis. The Board regards the Company,
with no fixed life, as a long-term investment vehicle, but for
the purposes of this viability statement has decided that a
period of three years is an appropriate period over which
to report. The Board considers that this period reflects a
balance between looking out over a medium-term
horizon and the inherent uncertainties of looking out
further than three years.
Taking into account the Company’s current position and
the potential impact of its principal risks and uncertainties,
the Directors have a reasonable expectation that the
Company will be able to continue in operation and meet
its liabilities as they fall due for a period of three years from
the date of this Report.
In forming this expectation, the Directors looked to
the following:
· the Company’s assets consist, substantially, of a
portfolio of readily realisable quoted securities, where
the Directors monitor the liquidity of each holding as well
as reviewing the outcome of testing undertaken by the
Manager in which the portfolio is subject to adverse
market scenarios;
· the principal risks and uncertainties detailed on pages
14 to 16 and the steps taken to mitigate these, and
noting the strategic and performance risks (page 15)
are considered to be the most significant for the
Company;
· a significant proportion of the expenses are proportional
to the Company’s NAV and will reduce if the NAV falls;
· the Directors regularly review the Company’s level of
gearing, including 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 August 2025 of the Company’s
£30m loan the Company will enter into negotiations with
its bankers. If acceptable terms are available from the
existing bankers, or any alternative, the Company would
expect to continue to access borrowings. However,
should these terms not be forthcoming, any outstanding
borrowing would be repaid through the proceeds of
equity sales.
Accordingly, taking into account the Company’s current
position and the potential impact of its principal risks and
uncertainties, the Board has a reasonable expectation
that the Company will be able to continue in operation
and meet its liabilities as they fall due for a period of three
years from the date of this report. In making this
assessment, the Board undertook stress testing of the
Company’s forecast revenue account as well as scenario
analysis in relation to a significant reduction in the liquidity
of the underlying investment portfolio.
Duration
The Company does not have a fixed life but, further to a
change in the Articles of Association approved by
shareholders at the AGM on 28 September 2022, an
ordinary resolution to continue the Company is put to
shareholders at every fifth AGM. The next continuation
resolution will be put to shareholders at the AGM in 2027.
Likely Future Developments
The Board expects the Company to continue to pursue its
investment objective and accepts that this may involve
divergence from the Benchmark. The companies which
make up the investment portfolio are considered by the
Investment Manager to demonstrate resilience and to
offer opportunities for investors to benefit from the
development of the broader Indian economy. Further
information on the outlook and future developments of
the Company may be found in the Chairman’s Statement
on page 8 and in the Investment Manager’s Report on
pages 9 and 10.
Michael Hughes
Chairman
13 June 2024
Overview of Strategy
Continued
abrdn New India Investment Trust plc 19
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
The Purpose of the Company and Role
of the Board
The Board is required to report on how it has discharged
its duties and responsibilities under section 172 of the
Companies Act 2006. Under this legislation, the Directors
have a duty to promote the success of the Company for
the benefit of its members as a whole, taking into account
the likely long-term consequences of decisions, the need
to foster relationships with the Company’s stakeholders
and the impact of the Company’s operations on
the environment.
The purpose of the Company is to act as a vehicle to
provide, over time, attractive financial returns to its
shareholders. Investment trusts, such as the Company, are
long-term investment vehicles and are typically externally
managed, have no employees, and are overseen by an
independent non-executive board of directors.
During the year, the Board comprised four independent
non-executive Directors with a broad range of skills and
experience across all major functions that affect the
Company. The Board retains responsibility for taking all
decisions relating to the Company’s investment objective
and policy, gearing, corporate governance and strategy,
and for monitoring the performance of the Company’s
service providers.
The Board’s philosophy is that the Company should
operate in a transparent culture where all parties are
provided with respect as well as the opportunity to offer
practical challenge and participate in positive debate
which is focused on the aim of achieving the expectations
of shareholders and other stakeholders alike. The Board
expects the Manager to act as a responsible steward of
the Company’s investments (see pages 85 to 89 for
further information). Further information on the Manager’s
responsible investing may be found at:
www.abrdn.com/en-gb/seeing-things-differently
How the Board Engages with Stakeholders
The Company’s main stakeholders are its Shareholders,
the Manager, Investee Companies, Service Providers, Debt
Providers and the Environment and Community. The
Board considers its stakeholders at Board meetings
and receives feedback on the Manager’s interactions
with them.
Stakeholder
How the Board Engages
Shareholders The Company’s shareholders are key stakeholders and the Board places great importance on
communication with them. The Board welcomes all shareholders’ views and aims to act fairly between all
shareholders. The Chairman, Manager and Company’s broker regularly meet with current and prospective
shareholders to discuss performance and shareholder feedback is discussed by the Directors at Board
meetings. In addition, the Chairman meets with major shareholders in the absence of representatives of the
Manager, as necessary.
Regular updates are provided to shareholders through the Annual Report, Half Yearly Report, Manager’s
monthly factsheets, Company announcements, including daily net asset value announcements, and the
Company’s website. In normal years, the Company’s Annual General Meeting provides a forum, both formal
and informal, for shareholders to meet and discuss issues with the Directors and Manager.
Manager
The Investment Manager’s Report on pages 9 and 10 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 and further details are provided on page 35.
Promoting the Success of the Company
20 abrdn New India Investment Trust plc
Stakeholder
How the Board Engages
Investee Companies Responsibility for actively monitoring the activities of portfolio companies has been delegated by the Board
to the Manager which has sub-delegated that authority to the Investment Manager.
The Board has also given discretionary powers to the Investment Manager to exercise voting rights on
resolutions proposed by the investee companies within the Company’s portfolio. The Investment Manager
reports to the Board on a quarterly basis on stewardship (including voting) issues.
Through engagement and exercising voting rights, the Investment Manager actively works with portfolio
companies to improve corporate standards, transparency and accountability, and report thereon to the
Board.
Service Providers
The Board seeks to maintain constructive relationships with the Company’s suppliers either directly or
through the Manager with regular communications and meetings.
The Audit Committee conducts an annual review of the performance, terms and conditions of the
Company’s key service providers to ensure they are performing in line with Board expectations and
providing value for money.
Debt Providers
On behalf of the Board, the Manager maintains a constructive working relationship with Royal Bank of
Scotland International Limited (London Branch), part of NatWest Group plc, the provider of the Company’s
£30m multi-currency loan facility, ensuring compliance with its loan covenants and arranging for regular
updates for the lender on the Company’s business activities, where requested.
Environment and
Community
The Board and Manager are committed to investing in a responsible manner and the Investment Manager
integrates Environmental, Social and Governance (“ESG”) considerations into its research and analysis as
part of the investment decision-making process. Further information on the Manager’s ESG engagement,
with case studies from the investment portfolio, may be found on pages 85 to 89.
Specific Examples of Stakeholder
Consideration During the Year
While the importance of giving due consideration to the
Company’s stakeholders is not new, and is considered as
part of every Board decision, the Directors were
particularly mindful of stakeholder considerations during
the following decisions undertaken during the year ended
31 March 2024.
Share buybacks
During the year the Company bought back into treasury
3.7 million shares, providing a small accretion to the NAV
per share and a degree of liquidity to the market. The
discount at which the Company’s share price sits as
compared to its NAV per share was wider than the historic
average and the Board has instructed a step-up in share
buyback activity. It is the view of the Board that this policy
is in the interest of all shareholders.
Online shareholder presentation
The Company held an online shareholder presentation
on 14 September 2023 to encourage and promote
interaction and engagement with the Company’s
shareholders.
During the presentation, shareholders received updates
from the Chairman and Investment Manager and were
then able to participate in an interactive question and
answer session.
As explained in the Chairman’s Statement on page 8, the
Board is holding another Online Shareholder Presentation
at 11.00am on 12 September 2024. The event is being held
ahead of the AGM in order to allow shareholders to submit
their proxy votes prior to the AGM.
Promoting the Success of the Company
Continued
abrdn New India Investment Trust plc 21
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Ten Year Financial Record
Year to 31 March
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Total income (£’000)
341
374
3,104
3,318
3,602
5,185
4,517
5,059
6,123
4,903
Per share (p)
Net revenue (loss)/return
(0.39)
(1.06)
(0.28)
(0.71)
(0.35)
2.08
0.19
(0.28)
(0.59)
(3.77)
Dividends
A
n/a
n/a
n/a
n/a
n/a
1.00
n/a
n/a
n/a
n/a
Total return/(loss)
121.94
(23.42)
125.81
2.12
41.90
(120.34)
216.25
69.64
(60.00)
168.85
Net asset value per share (p)
Basic
385.49
362.07
487.88
490.00
531.90
411.41
627.05
697.30
641.32
819.56
Shareholders’ funds (£’000)
227,708
213,874
288,190
289,444
314,196
241,583
366,106
403,995
357,919
427,054
A
2020 dividend represents 0.22p per share paid from revenue reserves and 0.78p per share paid from capital reserves.
Share Price Discount to NAV
Ten years ended 31 March 2024
-25%
-20%
-15%
-10%
-5%
0%
31/03/2014
31/03/2016
31/03/2018
31/03/2020
31/03/2022 31/03/2024
Total Returns of NAV and Share Price versus Benchmark total return
Ten years ended 31 March 2024 (rebased to 100 at 31 March 2014)
100
150
200
250
300
350
31/03/2014 31/03/2016 31/03/2018 31/03/2020 31/03/2022 31/03/2024
NAV Shar e Pri ce Benchmark
Performance
22 abrdn New India Investment Trust plc
Portfolio
A new stock purchased by the Company during
the year was Phoenix Mills, a leading retail-led
developer and operator across India with quality
shopping malls in top-tier and state capital cities,
which is seeking to take advantage of rising
consumer consumption.
abrdn New India Investment Trust plc 23
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
As at 31 March 2024
8.1%
ICICI Bank
5.6%
HDFC Bank
ICICI Bank has been delivering superior
growth and returns improvement without
compromising on asset quality. It has
leveraged on its scale as well as retail and
digital franchise to grow in mortgages and
also growing off a low base in business
banking and SMEs.
HDFC Bank is India’s leading private sector
bank that now has a complete suite of retail
banking products after the merger with HDFC,
India’s leading provider of mortgage finance.
The bank has solid underwriting standards
and a progressive digital stance, further
strengthening its competitive edge.
5.6%
Bharti Airtel
4.9%
Infosys
Bharti Airtel remains the leading telecom
service provider with a pan-India reach and
sophisticated customer base with higher
average mobile spending.
One of India’s best software developers, it
continues to impress with its strong
management, solid balance sheet and
sustainable business model.
4.7%
Power Grid Corporation of India
4.6%
Ultratech Cement
Power Grid Corporation of India forms the
backbone of India’s electricity infrastructure. It
is poised to play a key role in the growth of
renewable energy delivery to the grid over the
next few decades as the government plans
ambitious renewable targets for the electricity
sector.
A clear industry leader in India’s cement
industry, backed by strong brand recognition,
a good distribution and sales network and
solid product quality. Its focus on cost
efficiency and an improving energy mix have
given UltraTech a cost advantage.
4.1%
SBI Life Insurance
3.8%
Aegis Logistics
Among the leading domestic life insurers, SBI
Life’s competitive edge comes from a wide
reach of SBI branches, highly productive
agents, a low cost ratio and a reputable SBI
brand.
A strong and conservative player in India's gas
and liquids logistics sector, with a first mover
advantage in key ports and a fair amount of
capacity expansion to come. Its storage and
logistics segment is benefitting from the
burgeoning flow of chemicals and fuels across
the country. In addition, the government’s
push for the adoption of cleaner energy has
boosted its liquefied natural gas business.
3.8%
Tata Consultancy Services
3.8%
Hindustan Unilever
A top-class Indian IT services provider with the
most consistent execution and lowest attrition
rates. It is a long-term compounder with a
decent outlook for revenue growth and order
wins over the medium term.
The largest fast-moving consumer goods
company (FMCG) in India, with an unrivalled
portfolio of brands, an extensive nationwide
distribution network, and a long and successful
operational track record in the country.
Top Ten Investments
24 abrdn New India Investment Trust plc
As at 31 March 2024
Valuation
Total assets
AB
2024
2024
Company
Industry
£’000
%
ICICI Bank
Financials
36,682
8.1
HDFC Bank
Financials
25,250
5.6
Bharti Airtel
Communication Services
25,234
5.6
Infosys
Information Technology
22,465
4.9
Power Grid Corporation of India
Utilities
21,141
4.7
Ultratech Cement
Materials
20,845
4.6
SBI Life Insurance
Financials
18,720
4.1
Aegis Logistics
Energy
17,484
3.8
Tata Consultancy Services
Information Technology
17,202
3.8
Hindustan Unilever
Consumer Staples
17,098
3.8
Ten largest investments
222,121
49.0
Prestige Estates Projects
Real Estate
16,710
3.7
Godrej Properties
Real Estate
14,415
3.2
Axis Bank
Financials
13,997
3.1
Mahindra & Mahindra
Consumer Discretionary
13,737
3.1
Maruti Suzuki India
Consumer Discretionary
11,445
2.5
Titan
Consumer Discretionary
11,076
2.5
KEI Industries
Industrials
10,789
2.4
ABB India
Industrials
10,566
2.3
PB Fintech
Financials
10,514
2.3
Cholamandalam Investment and Finance
Financials
9,633
2.1
Top twenty investments
345,003
76.2
Nestlé India
Consumer Staples
9,425
2.1
J.B. Chemicals & Pharmaceuticals
Healthcare
9,290
2.0
Vijaya Diagnostic Centre
Healthcare
8,960
2.0
KFIN Technologies
Financials
7,889
1.7
Tata Consumer Products
Consumer Staples
7,755
1.7
Siemens
Industrials
7,473
1.6
Pidilite Industries
Materials
7,265
1.6
Havells India
Industrials
7,118
1.6
Fortis Healthcare
Healthcare
6,899
1.5
Hindalco Industries
Materials
6,693
1.5
Top thirty investments
423,770
93.5
Portfolio
abrdn New India Investment Trust plc 25
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
As at 31 March 2024
Valuation
Total assets
AB
2024
2024
Company
Industry
£’000
%
Aptus Value Housing Finance
Financials
6,547
1.5
Info Edge
Communication Services
5,528
1.2
APAR Industries
Industrials
5,436
1.2
Container Corporation of India
Industrials
5,431
1.2
Affle India
Communication Services
4,427
1.0
Syngene International
Healthcare
4,404
1.0
Coromandel International
Materials
3,008
0.7
Phoenix Mills
Real Estate
2,485
0.5
UNO Minda
Consumer Discretionary
2,476
0.5
Coforge
Information Technology
2,110
0.5
Top forty investments
465,622
102.8
Global Health India
Healthcare
167
–
Total investments
465,789
102.8
Net liabilities (before deducting prior charges)
A
(12,782)
(2.8)
Total assets
AB
453,007
100.0
A
Excluding loan balances.
B
Including net liabilities.
Unless otherwise stated, investments are in common stock.
26 abrdn New India Investment Trust plc
Sector Breakdown
As at 31 March 2024
0% 5% 10% 15% 20%
25%
30% 35%
Financials
Industrials
Information Technology
Consumer Discretionary
Materials
Communication Services
Consumer Staples
Real Estate
Healthcare
Utilities
Energy
2024
2023
Sector Allocation
27.7%
10.1%
9.0%
8.3%
8.1%
7.5%
7.4%
7.2%
6.4%
4.5%
3.8%
Financials
Industrials
Information Technology
Consumer Discretionary
Materials
Communication Services
Consumer Staples
Real Estate
Healthcare
Utilities
Energy
Sector allocation
Sector Analysis and Sector Allocation
abrdn New India Investment Trust plc 27
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Indian Rupee/Sterling Currency Movement
Year ended 31 March 2024
100
102
104
106
108
31/03/23 31/05/23 31/07/23 30/09/23 30/11/23 31/01/24 31/03/24
Currency Analysis
28 abrdn New India Investment Trust plc
Governance
abrdn New India Investment Trust plc 29
30 abrdn New India Investment Trust plc
Michael Hughes
Independent Non-Executive Chairman and
Chairman of the Nomination Committee
Experience
Currently, an investment consultant to a family office, an
asset management company, and a national charity,
Michael was formerly a Director of Baring Asset
Management Limited from 1998, and Chief Investment
Officer from 2000, until his retirement in 2007. Prior to this,
he was a Managing Director of Barclays Capital
(previously BZW) and Chairman of the Board of pension
trustees. Before 'Big Bang' he was a Partner at
stockbrokers de Zoete and Bevan.
Length of service
Appointed a Director on 7 September 2016 and Chairman
on 28 September 2022.
Contribution
The Nomination Committee has reviewed the contribution
of Michael Hughes, in light of his proposed re-election as a
Director at the forthcoming AGM, and has concluded that
he has continued to chair the Company expertly, fostering
a collaborative spirit between the Board and Manager
while ensuring that meetings remain focussed on the key
areas of stakeholder relevance.
All other public company directorships:
None
David Simpson
Senior Independent Non-Executive Director
Experience
Initially qualified as a solicitor before following a career in
corporate finance, which included seven years with
Barclays de Zoete Wedd and 15 years with KPMG, latterly
as global head of mergers and acquisitions, David has
worked with numerous major corporates, listed
companies, private equity, charitable and public bodies.
His interest in India derives from his previous career and
from his former role as a non-executive director of ITC
Limited, a major listed Indian company.
Length of service
Appointed a Director on 1 November 2021 and Senior
Independent Director on 28 September 2022.
Contribution
The Nomination Committee has reviewed the contribution
of David Simpson, in light of his proposed re-election as a
Director at the forthcoming AGM, and has concluded that
he continues to provide to the Board significant
investment insight and knowledge of the investment trust
sector, including his discharge of the additional
responsibilities as Senior Independent Director.
All other public company directorships:
Ecofin Global Utilities and Infrastructure Trust plc
(Chairman) and M&G Credit Income Investment
Trust plc (Chairman).
Board of Directors
abrdn New India Investment Trust plc 31
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Andrew Robson
Independent Non-Executive Director and
Chairman of the Audit Committee
Experience
A qualified Chartered Accountant, with a background in
investment banking and as a finance director, Andrew
was a director of Robert Fleming & Co Limited and SG
Hambros and finance director at eFinancialGroup Limited
and the National Gallery. He has been a non-executive
director of Baillie Gifford China Growth Trust PLC, JP
Morgan Smaller Companies Investment Trust plc, Shires
Income plc, Mobeus Income & Growth 4 PLC and British
Empire Securities & General Trust plc.
Length of service
Appointed a Director on 1 August 2022 and Chairman of
the Audit Committee on 28 September 2022.
Contribution
The Nomination Committee has reviewed the contribution
of Andrew Robson and has concluded that he chairs the
Audit Committee expertly as well as providing to the
Board significant investment insight and knowledge of the
investment trust sector.
All other public company directorships:
BlackRock Energy and Resources Income Trust PLC and
JPMorgan European Growth & Income plc.
Rebecca Donaldson
Independent Non-Executive Director and Chairman of the
Management Engagement Committee
Experience
Over the last thirty years, Rebecca has led the
development of global marketing, communications and
investor relations solutions for a broad range of
investment companies, most recently as Head of
Marketing Services at Insight Investments and previously
with BMO Global Asset Management, Fidelity Worldwide
Investments, Dexion Capital plc (now Fidante Partners)
and UBS Global Asset Management AG.
Length of service
Appointed a Director on 1 September 2020 and Chairman
of the Management Engagement Committee on 28
September 2022.
Contribution
The Nomination Committee has reviewed the contribution
of Rebecca Donaldson in light of her proposed re-election
as a Director at the forthcoming AGM and has concluded
that her strong digital marketing expertise continues to
underpin the Company’s commitment to improve its
promotion to both existing and potential shareholders.
All other public company directorships:
None
32 abrdn New India Investment Trust plc
The Directors present their Report and the audited
Financial Statements of the Company for the year ended
31 March 2024, taking account of any events between the
year end and the date of approval of this Report.
Results
The Company’s results, including its performance for the
year against its Key Performance Indicators (“KPIs”), may
be found on pages 6 and 14.
Investment Trust Status and ISA Compliance
The Company is registered as a public limited company in
England & Wales under registration number 02902424
and has been accepted by HM Revenue & Customs as an
investment trust for accounting periods beginning on or
after 1 April 2012, subject to the Company continuing to
meet the eligibility conditions of s1158 of the Corporation
Tax Act 2010 (as amended) and S.I. 2011/2099. In the
opinion of the Directors, the Company’s affairs have been
conducted in a manner to satisfy these conditions to
enable it to continue to qualify as an investment trust for
the year ended 31 March 2024. The Company intends to
manage its affairs so that its shares will be qualifying
investments for the stocks and shares component of an
Individual Savings Account (“ISA”).
Capital Structure
During the year ended 31 March 2024 the Company
bought back into treasury 3,702,011 (2023 – 2,127,206)
Ordinary shares. This was equivalent to 6.6% of the
Company’s issued share capital (excluding treasury
shares) at 1 April 2023 (2022 – 3.7%). As at 31 March 2024,
the Company's issued share capital consisted of 52,107,910
Ordinary shares (2023 – 55,809,921 Ordinary shares) with
voting rights, each share holding one voting right in the
event of a poll, and an additional 6,962,230 (2023 -
3,260,219) Ordinary shares in treasury, with no voting rights
or entitlement to receive dividends. Between 1 April 2024
and 13 June 2024 as the latest practicable date prior to
approval of this Report, an additional 564,198 Ordinary
shares were bought back resulting in the Company’s issued
share capital consisting of 51,543,712 Ordinary shares and
an additional 7,526,428 shares in treasury.
Ordinary shareholders are entitled to vote on all
resolutions which are proposed at general meetings of the
Company. The Ordinary shares carry a right to receive
dividends. On a winding up, after meeting the liabilities of
the Company, the surplus assets will be paid to Ordinary
shareholders in proportion to their shareholdings. There
are no restrictions on the transfer of Ordinary shares in the
Company other than certain restrictions which may from
time to time be imposed by law and regulation.
Manager and Company Secretaries
The Company has appointed the Manager (see Glossary
on page 99) 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 (see
Glossary on page 99) by way of a group delegation
agreement in place between the Manager and
Investment Manager. In addition, the Manager has sub-
delegated administrative and secretarial services to
abrdn Holdings Limited and promotional activities to
abrdn Investments Limited.
Under the terms of the management agreement (“MA”),
with effect from 1 April 2023, annual investment
management fees are calculated as 0.80% of the
Company’s net assets up to £300m and 0.60% of net
assets above £300m.
Until 31 March 2023, annual investment management fees
were calculated and charged on the same basis as above,
other than the rate was 0.85% of the Company’s net
assets up to £350m and 0.70% of net assets above £350m.
There is a rebate for any fees received in respect of any
investments by the Company in investment vehicles
managed by abrdn. The MA is terminable by either party
on not less than six months' notice. In the event of
termination on less than the agreed notice period,
compensation is payable to the Manager in lieu of the
unexpired notice period.
The fees, and other expenses, payable to abrdn during the
year ended 31 March 2024 are disclosed in Notes 4 and 5
to the Financial Statements. The investment management
fees are chargeable 100% to revenue.
Corporate Governance
The Company is committed to high standards of
corporate governance and its Statement of Corporate
Governance is set out on page 39.
Directors
The Board consisted of a non-executive Chairman and
three non-executive Directors, all of whom served
throughout the year under review. The Senior
Independent Director was David Simpson, the Chairman
of the Audit Committee was Andrew Robson and the
Chairman of the Management Engagement Committee
was Rebecca Donaldson.
Directors’ Report
abrdn New India Investment Trust plc 33
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Board Diversity
The Board recognises the importance of having a range
of skilled, experienced individuals with the right knowledge
represented on the Board in order to allow it to fulfil its
obligations. The Board also recognises the benefits and is
supportive of the principle of diversity in its recruitment of
new Board members. The Board will not display any bias
for age, gender, race, sexual orientation, religion, ethnic or
national origins, socio-economic background or disability
in considering the appointment of its Directors.
The Board will continue to ensure that all appointments
are made on the basis of merit against the specification
prepared for each appointment. In doing so, the Board will
take account of the three targets set out in the FCA’s
Listing Rules, which are set out in the tables below.
The Board has resolved that the Company’s year end
date is the most appropriate date for disclosure purposes.
The following information has been provided by each
Director through the completion of questionnaires. There
have been no changes since the year end as at the date
of approval of this Report.
Table for reporting on gender as at 31 March 2024
Number of Board
members
Percentage of the
Board
Number of senior
positions on the
Board
(CEO, CFO, Chair
and SID
Number in
executive
management
Percentage of
executive
management
Men
3
75%
2
n/a
(note 3)
n/a
(note 3)
Women
1
25% (note 1)
-
Not specified/prefer not to say
-
-
-
Table for reporting on ethnic background as at 31 March 2024
Number of Board
members
Percentage of the
Board
Number of senior
positions on the
Board
(CEO, CFO, Chair
and SID
Number in
executive
management
Percentage of
executive
management
White British or other White
(including minority-white groups)
4 100% 100%
n/a
(note 3)
n/a
(note 3)
Minority ethnic
-
0% (note 2)
Not specified/prefer not to say
-
0%
-
1. Does not meet the target that at least 40% of Directors are women as set out in FCA Lising Rule R 9.8.6R (9)(a)(i)
2. Does not meet the target that at least one Director is from a minority ethnic background as set out in FCA Listing Rule 9.8.6R
(9)(a)(iii)
3. This column is not applicable as the Company is externally managed and does not have any executive staff, specifically it
has neither a CEO nor CFO. The Company considers that the roles of Chairman of the Board, Senior Independent Director
and Chairs of the Board Committees are senior board positions. Rebecca Donaldson chairs the Management Engagement
Committee and therefore the Board considers that, accordingly, the Company effectively meets the requirement that at
least one of the senior board positions is held by a woman.
34 abrdn New India Investment Trust plc
As shown in the above tables, the Company has not as yet
met the targets set out in the FCA’s Listing Rules 9.8.6R
(9)(a)(i) and LR 9.8.6R (9)(a)(iii). The Board considers its
normal size of four Directors to be appropriate for an
investment trust, and retirement of each Director at the
AGM following the ninth anniversary of their appointment
to be an appropriate individual tenure.
While the targets for diversity are inevitably more
challenging to achieve for a smaller board with infrequent
appointment opportunities, the Board is fully supportive of
the principles behind the targets and these will be
carefully considered in all future appointments. The
biographical details of the Directors are included on pages
30 and 31 and the most recent Board appointment was in
August 2022.
Chairman and Senior Independent Directors
The Chairman is responsible for providing effective
leadership to the Board, by setting the tone of the
Company, demonstrating objective judgement and
promoting a culture of openness and debate. The
Chairman facilitates the effective contribution and
encourages active engagement by each Director. In
conjunction with the Company Secretary, the Chairman
ensures that Directors receive accurate, timely and clear
information to assist them with effective decision-making.
The Chairman acts upon the results of the Board
evaluation process by recognising strengths and
addressing any weaknesses and also ensures that the
Board engages with major shareholders and that all
Directors understand shareholder views.
The Senior Independent Director acts as a sounding board
for the Chairman and acts as an intermediary for other
directors, when necessary. Working closely with the
Nomination Committee, the Senior Independent Director
takes responsibility for an orderly succession process for
the Chairman and leads the annual appraisal of the
Chairman’s performance. The Senior Independent
Director is also available to shareholders to discuss any
concerns they may have.
The names, biographies and contribution of each of the
Directors are shown on pages 30 and 31 and indicate their
range of experience as well as length of service. Each
Director has the requisite high level and range of business
and financial experience which enables the Board to
provide clear and effective leadership and proper
stewardship of the Company.
Michael Hughes, Rebecca Donaldson, David Simpson and
Andrew Robson, each being eligible, retire and offer
themselves for individual re-election as Directors of
the Company.
The Board as a whole believes that each Director remains
independent of the Manager and free of any relationship
which could materially interfere with the exercise of his or
her independent judgement on issues of strategy,
performance, resources and standards of conduct and
confirms that, following formal performance evaluations,
the individuals’ performance continues to be effective and
demonstrates commitment to the role.
The Directors attended scheduled Board and Committee
meetings during the year ended 31 March 2024 as
follows (with their eligibility to attend the relevant
meeting in brackets):
Director
Board and
Committee
Meetings
Audit
Committee
Meetings
Management
Engagement
Committee
Meetings
Nomination
Committee
Meetings
Michael
Hughes
7 (7)
3 (3)
1 (1)
2 (2)
David
Simpson
7 (7)
3 (3)
1 (1)
2 (2)
Andrew
Robson
7 (7)
3 (3)
1 (1)
2 (2)
Rebecca
Donaldson
7 (7)
3 (3)
1 (1)
2 (2)
The Board has adopted a policy that all Directors,
including the Chairman, shall not serve for more than nine
years from the date of their initial date of appointment as
a Director of the Company unless in relation to
exceptional circumstances.
The Board therefore has no hesitation in recommending,
at the next AGM, the individual re-elections of Michael
Hughes, Rebecca Donaldson, David Simpson and Andrew
Robson as Directors of the Company.
Directors' Insurances and Indemnities
The Company maintains insurance in respect of Directors’
and Officers’ liabilities in relation to their acts on behalf of
the Company. Furthermore, each Director of the
Company is entitled to be indemnified out of the assets of
the Company to the extent permitted by law against all
costs, charges, losses, expenses and liabilities incurred by
them in the actual or purported execution and/or
discharge of their duties and/or the exercise or purported
exercise of their powers and/or otherwise in relation to or
Directors’ Report
Continued
abrdn New India Investment Trust plc 35
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
in connection with their duties, powers or office. These
rights are included in the Articles of Association of the
Company and the Company has granted deeds of
indemnities to each Director on this basis.
Management of Conflicts of Interest and
Anti-Bribery Policy
The Board has a procedure in place to deal with a
situation where a Director has a conflict of interest. As part
of this process, the Directors prepare a list of other
positions held and all other conflict situations that may
need to be authorised either in relation to the Director
concerned or his/her connected persons. The Board
considers each Director’s situation and decides whether
to approve any conflict, taking into consideration what is in
the best interests of the Company and whether the
Director’s ability to act in accordance with his/her wider
duties is affected. Each Director is required to notify the
Company Secretaries of any potential, or actual, conflict
situations which will need authorising by the Board.
Authorisations given by the Board are reviewed at each
Board meeting.
No Director has a service contract with the Company
although Directors are issued with letters of appointment
upon taking up office. Other than the deeds of indemnity
referred to above, there were no contracts with the
Company during, or at the end of the year, in which any
Director was interested.
The Board takes a zero-tolerance approach to bribery
and has adopted appropriate procedures designed to
prevent bribery. abrdn also takes a zero-tolerance
approach and has its own detailed policy and procedures
in place to prevent bribery and corruption.
In relation to the corporate offence of failing to prevent tax
evasion, it is the Company’s policy to conduct all business in
an honest and ethical manner. The Company takes a zero-
tolerance approach to facilitation of tax evasion whether
under UK law or under the law of any foreign country and is
committed to acting professionally, fairly and with integrity
in all its business dealings and relationships.
Board Committees
The Directors have appointed a number of Committees as
set out below. Copies of each Committee’s terms of
reference, which define its responsibilities and duties, are
available on the Company’s website or from the
Company Secretaries, on request.
Audit Committee
The Audit Committee’s Report is on pages 40 to 43.
Management Engagement Committee
The Board has established a Management Engagement
Committee comprising all of the Directors, which was
chaired throughout the year by Rebecca Donaldson.
The Committee is responsible for reviewing matters
concerning the management agreement which exists
between the Company and the Manager together with
the promotional activities programme operated by the
Manager to which the Company contributes. The terms
and conditions of the Manager’s appointment, including
an evaluation of performance and fees, are reviewed
annually and were last considered at the meeting of the
Committee in November 2023.
In monitoring the performance of the Manager, the
Committee considers the investment approach and
investment record of the Manager over shorter and
longer-term periods, taking into account the Company’s
performance against the Benchmark and peer group
funds. The Committee also reviews the management
processes, risk control mechanisms and promotional
activities of the Manager.
The Committee considers the continuing appointment of
the Manager, on the terms agreed, to be in the interests of
the shareholders because it believes that the abrdn has
the investment management, promotional and
associated secretarial and administrative skills
required for the effective and successful operation
of the Company.
Nomination Committee
The Board has established a Nomination Committee,
comprising all of the Directors, which was chaired by
Michael Hughes during the year. The Committee is
responsible for undertaking an annual evaluation of the
Board as well as longer term succession planning and,
when appropriate, oversight of appointments to the
Board.
The Company engaged Lintstock Ltd, an independent
external service provider which has no other connection
to the Company, to undertake a board evaluation in
March 2024. Assisted by Lintstock Ltd, the Board assessed
that it had in place the appropriate balance of skills,
experience, length of service and knowledge of the
Company, while also recognising the advantages of
diversity. David Simpson, as the Senior Independent
Director, provided feedback to the Chairman.
As the Company has no employees and the Board is
comprised wholly of non-executive directors and, given
the size and nature of the Company, the Board has not
36 abrdn New India Investment Trust plc
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 on
pages 47 and 53.
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 on pages 14 to 16 and the
financial risks in Note 17 to the financial statements and
have reviewed income forecasts detailing revenue and
expenses for at least 12 months from the date of this
Report. Accordingly, the Directors believe that, the
Company has adequate financial resources to continue in
operational existence for the foreseeable future and for at
least 12 months from the date of this Report.
In August 2022, the Company entered into a three-year,
£30 million revolving credit facility (the “Facility”) with Royal
Bank of Scotland International Limited (London Branch),
part of NatWest Group plc, of which £26 million was drawn
down at 31 March 2024 (2023 - £30 million). The Board
has set limits for borrowing and regularly reviews the level
of any gearing and compliance with banking covenants. In
advance of expiry of the Facility in 2025, the Company will
enter negotiations with its bankers. If acceptable terms
are available from the existing bankers, or any alternative,
the Company would expect to continue to access a
facility. However, should these terms not be forthcoming,
any outstanding borrowing would be repaid through the
proceeds of equity sales.
The results of stress testing prepared by the Manager,
which models a sharp decline in market levels and
income, demonstrated that the Company had the ability
to raise sufficient funds so as to both pay expenses and
remain within its debt covenants, and to continue to meet
its liabilities as they fall due for at least 12 months from the
date of this Report.
Responsible Investment
The Board is aware of its duty to act in the interests of the
Company. The Board acknowledges that there are risks
associated with investment in companies which fail to
conduct business in a socially responsible manner.
Responsibility for actively monitoring the sustainability
investing activities of portfolio companies has been
delegated by the Board to the Manager which has sub-
delegated that authority to the Investment Manager.
Further information may be found at:
www.abrdn.com/en-gb/seeing-things-differently
Relations with Shareholders
The Directors place great importance on communication
with shareholders. The Annual Report is widely distributed
to other parties who have an interest in the Company’s
performance. Shareholders and investors may obtain up-
to-date information on the Company through its website,
abrdnnewindia.co.uk, or via the abrdn’s Customer Services
Department. The Company responds to letters from
shareholders on a wide range of issues (see Additional
Shareholder Information on page 101).
The Board’s policy is to communicate directly with
shareholders and their representative bodies without the
involvement of the management group (either the
Company Secretaries or abrdn) in situations where direct
communication is required and representatives from the
Board offer to meet with major shareholders on an annual
basis in order to gauge their views.
Directors’ Report
Continued
abrdn New India Investment Trust plc 37
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
In addition, members of the Board may accompany
the Manager when undertaking meetings with
institutional shareholders.
The Company Secretaries only act on behalf of the Board,
not the Manager, and there is no filtering of
communication. At each Board meeting the Board
receives full details of any communication from
shareholders to which the Chairman responds, as
appropriate, on behalf of the Board.
The Notice of AGM included within the Annual Report is
normally sent out at least 20 working days in advance of
the meeting. All shareholders have the opportunity to put
questions to the Board and Manager prior to the
Company’s AGM.
Substantial Interests
The Company had been notified of the following share
interests above 3% in the Company as at 31 March 2024:
Shareholder
Number of
shares held
% held
City of London Investment
Management
7,188,048
13.8
Lazard Asset Management
6,999,713
13.4
Clients of Interactive Investor
(execution only)
5,554,376
10.7
Clients of abrdn
5,157,120
9.9
Clients of Hargreaves Lansdown
(execution only)
4,215,017
8.1
Allspring Global Investments
3,139,451
6.0
1607 Capital Partners
2,137,877
4.1
The above interests at 31 March 2024 were unchanged at
the date of approval of this Report other than in relation to
clients of abrdn, which advised the Company on 19 April
2024 of a holding of 5,188,120 shares, equivalent to 10.0%
of the Company’s shares in issue (excluding treasury
shares) and City of London Investment Management,
which advised the Company on 28 May 2024 of a holding
of 7,232,938 shares, equivalent to 14.0% of the Company’s
shares in issue (excluding treasury shares).
Annual General Meeting
The AGM will be held on 20 September 2024 and the
Notice of AGM and related notes may be found on pages
94 to 98. Resolutions relating to the following items will be
proposed at the AGM as special business.
Share Repurchases (Resolution 8)
At the AGM held on 27 September 2023, shareholders
approved the renewal of the authority for the Company to
repurchase its Ordinary shares.
The principal aim of a share buy back facility is to reduce
the volatility in the discount. In addition, the purchase of
shares, when they are trading at a discount, should result
in an increase in the NAV per share for the remaining
shareholders. This authority, if conferred, will only be
exercised if to do so would result in an increase in the NAV
per share for the remaining shareholders, and if it is in the
best interests of shareholders generally. Any purchase of
shares will be made within guidelines established from
time to time by the Board. It is proposed to seek
shareholder authority to renew this facility for another
year at the AGM. Under the Listing Rules, the maximum
price that may be paid on the exercise of this authority
must not exceed the higher of: (i) 105% of the average of
the middle market quotations for the shares over the five
business days immediately preceding the date of
purchase; and (ii) the higher of the last independent trade
and the highest current independent bid on the trading
venue where the purchase is carried out. The minimum
price which may be paid is 25p per share. Shares which
are purchased under this authority will either be cancelled
or held as treasury shares.
Renewal of the authority to buy back shares is sought at
the AGM as the Board considers that this mechanism has
assisted in lowering the volatility of the discount reflected
in the Company’s share price and is also accretive, in NAV
terms, for continuing shareholders. Special resolution 8 in
the Notice of AGM will, if passed, renew the authority to
purchase in the market a maximum of 14.99% of shares in
issue as at 13 June 2024, being the nearest practicable
date to the approval of this Report (equivalent to
approximately 7.7 million Ordinary shares). Such authority
will expire on the date of the AGM in 2025 or on 30
September 2025, whichever is earlier. This means in effect
that the authority will have to be renewed at the next
AGM, or earlier, if the authority has been exhausted.
38 abrdn New India Investment Trust plc
Issue of Shares (Resolutions 9 and 10)
Ordinary resolution 9 in the Notice of AGM will, if passed,
renew the authority to allot unissued share capital up to an
aggregate of 10%, equivalent to approximately 5.1 million
Ordinary shares, of the Company’s existing issued share
capital, excluding treasury shares, as at 13 June 2024,
being the nearest practicable date to the approval of this
Report). Such authority will expire on the date of the AGM
in 2025 or on 30 September 2025, whichever is earlier,
which means that the authority will have to be renewed at
the next AGM or, earlier, if the authority has
been exhausted.
When shares are to be allotted for cash, the Companies
Act 2006 (the “Act”) provides that existing shareholders
have pre-emption rights and that the new shares must be
offered first to such shareholders in proportion to their
existing holding of shares. However, shareholders can, by
Special resolution, authorise the Directors to allot shares
otherwise than by a pro rata issue to existing shareholders.
Special resolution 10 will, if passed, give the Directors
power to allot for cash equity securities up to 10%
(equivalent to approximately 5.1 million Ordinary shares),
of the Company’s existing issued share capital as at the
date of 13 June 2024, being the latest practicable date
prior to the approval of this Report), as if Section 561(1) of
the Act did not apply. This is the same nominal amount of
share capital which the Directors are seeking the authority
to allot pursuant to resolution 9. This authority will expire on
the date of the AGM in 2025 or on 30 September 2025,
whichever is earlier, which means that the authority will
have to be renewed at the next AGM or, earlier, if the
authority has been exhausted. This authority will not be
used in connection with a rights issue by the Company.
The Company is permitted to buy back and hold shares in
treasury and then sell them at a later date for cash, rather
than cancelling them. The Treasury Share Regulations
require such sale to be on a pre-emptive, pro rata, basis to
existing shareholders unless shareholders agree by
Special resolution to disapply such pre-emption rights.
Accordingly, in addition to giving the Directors power to
allot unissued Ordinary share capital on a non pre-
emptive basis, resolution 10, if passed, will give the
Directors authority to sell Ordinary shares from treasury
on a non pre-emptive basis. No dividends may be paid on
any shares held in treasury and no voting rights will attach
to such shares. The benefit of the ability to hold treasury
shares is that such shares may be resold.
This should give the Company greater flexibility in
managing its share capital and improve liquidity in its
shares. The Board would only expect to issue new
Ordinary shares or sell Ordinary shares from treasury at a
price per Ordinary share which represented a premium to
the NAV per share. It is also the intention of the Board that
sales from treasury would only take place when the Board
believes that to do so would assist in the provision of
liquidity to the market.
The Directors intend to use the authorities given by
resolutions 9 and 10 to allot shares, or sell shares from
treasury, and disapply pre-emption rights only in
circumstances where this will be clearly beneficial to
shareholders as a whole. The issue proceeds would be
available for investment in line with the Company’s
investment policy.
Recommendation
The Board considers all of the Resolutions to be put to
shareholders at the AGM to be in the best interests of the
Company and its members as a whole and are likely to
promote the success of the Company for the benefit of its
members as a whole. Accordingly, the Board unanimously
recommends that shareholders should vote in favour of
the resolutions to be proposed at the Annual General
Meeting, as they intend to do in respect of their own
shareholdings, amounting to 20,446 Ordinary shares.
Additional Information
Where not provided elsewhere in the Directors' Report, the
following provides the additional information required to
be disclosed by The Large and Medium-sized Companies
and Groups (Accounts and Reports) Regulations 2008.
The Company is not aware of any significant agreements
to which it is a party, apart from the management
agreement, that take effect, alter or terminate upon a
change of control of the Company following a takeover.
Other than the management agreement with the
Manager, further details of which are set out on page 32,
the Company is not aware of any contractual or other
agreements which are essential to its business which
might reasonably be expected to have to been disclosed
in the Directors' Report.
The financial risk management objectives and policies
arising from its financial instruments and the exposure of
the Company to risk are disclosed in Note 17 to the
Financial Statements.
Michael Hughes,
Chairman
13 June 2024
Directors’ Report
Continued
abrdn New India Investment Trust plc 39
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
abrdn New India Investment Trust plc (the “Company”) is
committed to high standards of corporate governance.
The Board is accountable to the Company’s shareholders
for good governance and this statement describes how
the Company has applied the principles identified in the
UK Corporate Governance Code as published in July 2018
(the “UK Code”), which is available on the Financial
Reporting Council’s (the “FRC”) website: frc.org.uk and is
applicable for the Company’s Year.
The Board has also considered the principles and
provisions of the AIC Code of Corporate Governance as
published in February 2019 (the “AIC Code”). The AIC
Code addresses the principles and provisions set out in the
UK Code, as well as setting out additional provisions on
issues that are of specific relevance to the Company. The
AIC Code is available on the AIC’s website: theaic.co.uk.
The Board considers that reporting against the principles
and provisions of the AIC Code, which has been endorsed
by the FRC, provides more relevant information to
shareholders.
The Board confirms that, during the year ended 31 March
2024, the Company has complied with the provisions of
the AIC Code, and the relevant provisions of the UK Code,
except for those provisions relating to:
· the composition of the Audit Committee (AIC Code
provision 29): the other Directors consider that it is
appropriate for the Chairman of the Board to be a
member of, but not chair, the Audit Committee, due to
the Board’s small size, the lack of any perceived conflict
of interest, and because the other Directors believe that
Michael Hughes was independent on appointment and
continues to be independent; and
· the establishment of a remuneration committee (AIC
Code 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 on pages 35 and 36 and on
page 40 in respect of the Audit Committee;
· the Board’s policy on diversity and information on Board
diversity is on page 33;
· the Company’s approach to internal controls and risk
management is detailed on page 41;
· the contractual arrangements with the Manager are set
out on page 32 while details of the annual assessment of
the Manager may be found on page 35;
· the Company’s capital structure and voting rights are
summarised on page 32;
· the substantial interests disclosed in the Company’s
shares are listed on page 37;
· the rules concerning the appointment and replacement
of Directors are contained in the Company’s Articles of
Association and are summarised on page 44. 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 on pages 37 and 38.
Michael Hughes,
Chairman
13 June 2024
Statement of Corporate Governance
40 abrdn New India Investment Trust plc
The Audit Committee presents its Report for the year
ended 31 March 2024.
Committee Composition
The Directors have appointed an Audit Committee (the
“Committee”) consisting of the whole Board, which was
chaired by Andrew Robson throughout the year.
The other members of the Committee consider that it is
appropriate for the Chairman of the Board to be a
member of, but not chair, the Committee. The Chairman
of the Board possesses significant financial experience
which the other Committee members consider to be
valuable. The Board is small and, if the Chairman of the
Board were to be excluded, the Committee would
comprise only three Directors which may lead to quorum
issues if decisions are required at short notice. In addition,
the other Committee members are satisfied that there is
no conflict of interest arising and value the input of the
Chairman of the Board to the Committee’s deliberations.
The Directors have satisfied themselves both that at least
one of the Committee’s members has recent and relevant
financial experience (Andrew Robson is a member of the
Institute of Chartered Accountants in England and Wales),
and that the Committee as a whole possesses
competence relevant to the investment trust sector.
Role of the Audit Committee
The principal function of the Committee is to assist the
Board in relation to the reporting of financial information,
the review of financial controls and the management
of risk.
The Committee meets not less than twice each year, in
line with the cycle of annual and half-yearly reports, which
is considered by the Directors to be a frequency
appropriate to the size and complexity of the Company.
The Committee has defined terms of reference which are
reviewed and re-assessed for their adequacy on an
annual basis. Copies of the terms of reference are
available from the Company's website or from the
Company Secretaries, on request.
In summary, the Committee’s main functions are:
· to review and monitor the internal control systems and
risk management systems (including review of non-
financial risks) on which the Company is reliant;
· to consider annually whether there is a need for the
Company to have its own internal audit function;
· to review and monitor the integrity of the half-yearly
report and annual financial statements of the Company;
· to review, and report to the Board on, the significant
financial reporting issues and judgements made in
connection with the preparation of the Company’s
financial statements, half-yearly reports,
announcements and related formal statements;
· to review the content of the Annual Report and advise
the Board on whether, taken as a whole, it is fair,
balanced and understandable and provides the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy;
· to meet with the Auditor to review their proposed audit
programme of work and the findings of the Auditor. The
Committee shall also use this as an opportunity to
assess the effectiveness of the audit process;
· to develop and implement policy on the engagement of
the Auditor to supply non-audit services. During the year
under review, no non-audit services were provided to
the Company by KPMG LLP. All non-audit services must
be approved in advance by the Committee and will be
reviewed in light of statutory requirements to maintain
the Auditor’s independence;
· to review a statement from the Manager detailing the
arrangements in place within abrdn whereby its staff
may, in confidence, escalate concerns about possible
improprieties in matters of financial reporting or other
matters (whistleblowing);
· to review and approve the remuneration and terms of
engagement of the Auditor;
· to monitor and review annually the Auditor’s
independence, objectivity, effectiveness, resources and
qualification;
· to monitor the requirement for rotation of the Auditor
and to oversee any tender for the external audit of the
Company;
· to keep under review the appointment of the Auditor
and to recommend to the Board and shareholders the
reappointment of the existing auditor or, if appropriate,
the appointment of a new Auditor; and
· to evaluate its own performance each year, in relation
to discharging its main functions, by means of a section
devoted to the Committee within the Directors’ annual
self-evaluation.
Audit Committee’s Report
abrdn New India Investment Trust plc 41
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Activities during the Year
The Committee met on three occasions during the year to
consider the Annual Report, the Half-Yearly Report and
the Company’s system of risk management and internal
control. Reports from abrdn’s internal audit, business risk
and compliance departments were considered by the
Committee at these meetings.
Review of Internal Controls Systems and Risk
Management
The Board is ultimately responsible for the Company’s
system of internal control and risk management and for
reviewing its effectiveness. The Committee confirms that
there is a robust process for identifying, evaluating and
managing the Company's significant business and
operational risks, that it was in place for the year ended 31
March 2024 and up to the date of approval of this Annual
Report, that it is regularly reviewed by the Board and
accords with the FRC guidance on internal controls.
The principal risks and uncertainties facing the Company
are identified on pages 14 to 16 of this Report.
The design, implementation and maintenance of controls
and procedures to safeguard the assets of the Company
and, to manage its affairs properly, extends to operational
and compliance controls and risk management. This
includes controls over financial reporting risks related to
the preparation of the Annual Report, which are
delegated to the Manager as part of the Management
Agreement (“MA”) and the Committee receives regular
reports from the Manager as to how these controls
are operating.
Internal control and risk management systems are
monitored and supported by the Manager’s business risk
and compliance functions which undertake periodic
examination of business processes, including compliance
with the terms of the MA, and ensures that any
recommendations to improve controls are implemented.
Risk is considered in the context of the FRC and the UK
Code guidance and includes financial, regulatory, market,
operational and reputational risk. Risks are identified and
documented through a risk heat-map, which is a pictorial
representation of the risks faced by the Company, after
taking account of any mitigating controls to minimise
the risk, ranked in order of likelihood and impact on
the Company.
The key components designed to provide effective risk
management and internal control are outlined below:
· the Manager prepares forecasts and management
accounts which allow the Board to assess the
Company’s activities and review its performance; the
emphasis is on obtaining the relevant degree of
assurance and not merely reporting by exception;
· the Board and Manager have agreed clearly-defined
investment criteria, specified levels of authority and
exposure limits. Reports on these issues, including
performance statistics and investment valuations, are
regularly submitted to the Board, and there are
meetings with the Manger and Investment Manager
as appropriate;
· as a matter of course, the Manager’s compliance
department continually reviews the Manager’s
operations; and
· written agreements are in place which specifically
define the roles and responsibilities of the Manager and
other third-party service providers.
The Committee has considered the need for an internal
audit function but, due to the delegation of certain
business functions to the Manager, has decided to place
reliance on abrdn’s systems and internal audit procedures,
including the ISAE3402 Report, a global assurance
standard for reporting on internal controls for service
organisations, commissioned by the Manager’s
immediate parent company, abrdn. At its May 2024
meeting, the Committee carried out an annual
assessment of risk management and internal controls for
the year ended 31 March 2024 by considering
documentation from the Manager, including the internal
audit and compliance functions, and taking account of
events since 31 March 2024.
The system of internal control and risk management is
designed to meet the Company’s particular needs and
the risks to which it is exposed. Accordingly, this system is
designed to manage, rather than eliminate, the risk of
failure to achieve business objectives and, by its nature,
can only provide reasonable, and not absolute, assurance
against misstatement and loss.
42 abrdn New India Investment Trust plc
External Agencies
The Board has contractually delegated to external
agencies, including the Manager and other service
providers, certain services: the management of the
investment portfolio, the depositary services (which
include the custody and safeguarding of the assets), the
share registration services and the day-to-day
accounting and company secretarial requirements. Each
of these contracts was entered into after full and proper
consideration by the Board of the quality and cost of
services offered in so far as they relate to the affairs of the
Company. The Committee receives and considers reports
from each service provider, including the Manager, on a
regular basis. In addition, ad hoc reports and information
are supplied to the Board as requested.
Significant Financial Reporting Issues
addressed
During its review of the Company’s financial statements
for the year ended 31 March 2024, the Committee
identified one potentially significant financial reporting risk
facing the Company which is unchanged from the prior
year, namely valuation and existence of investments, as
well as several additional risks, which also reflected the
Auditor’s assessment of the principal financial statement
risks affecting the Company as part of the Auditor’s
planning and reporting of the year end audit.
Valuation and Existence of Investments
The valuation of investments is undertaken in accordance
with the accounting policies, disclosed in Notes 2(a) and
2(g) to the financial statements. With reference to the IFRS
13 fair value hierarchy, all of the Company’s investments
at 31 March 2024 were categorised as Level 1 as they are
considered liquid and quoted in active markets. The
portfolio is reviewed and verified by the Manager on a
regular basis and management accounts including a full
portfolio listing are prepared each month and circulated
to the Board. BNP Paribas Trust Corporation UK Limited
(the “Depositary”) has been appointed as depositary to
safeguard the assets of the Company. The Depositary
checks the consistency and accuracy of its records on a
monthly basis and reports its findings to the Manager.
Separately, the investment portfolio is reconciled regularly
by the Manager.
Other issues addressed
As well as fraud risk and corporate governance and
disclosures, the other accounting area of financial
reporting particularly considered by the Committee was
compliance with Sections 1158 and 1159 of the
Corporation Tax Act 2010. Approval of the Company as
an investment trust under those sections for financial
years commencing on or after 1 April 2012 has been
obtained and ongoing compliance with the eligibility
criteria is monitored on a regular basis by the Manager
and reported to the Directors.
In addition the Committee conducted its annual review of
the Auditor (see below) and oversaw the transition to a
new senior statutory auditor. The Committee also
reviewed and discussed with the Manager and Auditor,
certain issues in relation to the calculation of Indian capital
gains tax.
Review of Auditor
The Committee has reviewed, and considered
appropriate, the effectiveness of the Auditor including:
· Independence - the Auditor discusses with the
Committee, at least annually, the steps it takes to ensure
its independence and objectivity and makes the
Committee aware of any potential issues, explaining all
relevant safeguards;
· Quality of audit work - including the ability to resolve
issues in a timely manner (identified issues are
satisfactorily and promptly resolved), its
communications/presentation of outputs (the
explanation of the audit plan, any deviations from it and
the subsequent audit findings are comprehensive and
comprehensible), and working relationship with
management (the Auditor has an effective working
relationship with the Manager). The Committee was
satisfied that the Independent Auditor demonstrated an
appropriate level of scepticism of the Manager’s
judgement – an example was the interpretation of
Indian capital gains tax legislation, where the Manager
had pursed a prudent approach; and
· Quality of people and service - including continuity and
succession plans (the audit team is made up of
sufficient, suitably experienced staff with provision
made for knowledge of the investment trust sector and
retention on rotation of the senior statutory auditor).
Audit Committee’s Report
Continued
abrdn New India Investment Trust plc 43
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Tenure and Reappointment of KPMG
LLP as Auditor
KPMG has expressed its willingness to be reappointed
auditor to the Company. Resolution 7, which is to be put to
shareholders at the forthcoming AGM, proposes the
reappointment of KPMG as Independent Auditor of the
Company, and also seeks authorisation for the Directors
to fix KPMG’s remuneration for the year to 31 March 2025.
Listed companies are required to tender the external audit
at least every ten years and change audit firm at least
every twenty years. The Committee last undertook an
audit tender process in 2016 when KPMG LLP was
appointed as auditor in respect of financial years ended
on or after 31 March 2017. The Company is required to
tender the external audit no later than for the year ending
31 March 2027. In accordance with professional and
regulatory standards, the audit director responsible for the
audit is rotated at least every five years in order to protect
independence and objectivity and to provide fresh
challenge to the business. The year ended 31 March 2024
is the first year for which Carla Cassidy has served as the
senior statutory auditor.
Andrew Robson
Chairman of the Audit Committee
13 June 2024
44 abrdn New India Investment Trust plc
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 on pages 48 to 53.
The Directors’ Remuneration Policy and level of Directors’
remuneration are determined by the Nomination
Committee, which was chaired by Michael Hughes
throughout the year, and comprises all of the Directors.
The Remuneration Policy is reviewed by the Nomination
Committee on an annual basis.
Remuneration Policy
The Board’s policy is that the remuneration of non-
executive Directors should be sufficient to attract
Directors of the quality required to run the Company
successfully. The remuneration should also reflect the
nature of the Directors’ duties, responsibilities and the
value of their time spent and be fair and comparable
to that of other investment trusts that are similar in
size and have a similar capital structures and
investment objectives.
Appointment
· The Company only intends to appoint non-executive
Directors.
· All the Directors are non-executive appointed under the
terms of Letters of Appointment.
· Directors must retire and be subject to election, at the
first AGM after their appointment, and re-election at
least every three years thereafter, although the Board
has approved a policy of annual re-election.
· New appointments to the Board will be placed on the
fee applicable to all Directors at the time of
appointment.
· No incentive or introductory fees will be paid to
encourage a Directorship.
· The Directors are not eligible for bonuses, pension
benefits, share options, long term incentive schemes or
other benefits.
· Directors are entitled to reimbursement of out-of-
pocket expenses incurred in connection with the
performance of their duties, including travel expenses.
· The Company indemnifies its Directors for all costs,
charges, losses, expenses and liabilities which may be
incurred in the discharge of their duties.
Performance, Service Contracts,
Compensation and Loss of Office
· The Directors’ remuneration is not subject to any
performance-related fee.
· No Director has a service contract.
· No Director was interested in contracts with the
Company during the period or subsequently.
· The terms of appointment provide that a Director may
be removed without notice.
· Compensation will not be due upon leaving office.
· No Director is entitled to any other monetary payment
or to any assets of the Company.
Statement of Voting at General Meeting
At the Company’s last AGM, held on 27 September 2023,
shareholders approved the Directors’ Remuneration
Report (other than the Directors’ Remuneration Policy) in
respect of the year ended 31 March 2023 and the
following proxy votes were received on the Resolution: For
– 32,556,143 votes (99.8%); Against – 55,146 votes (0.2%);
and Withheld – 28,109 votes.
The fact that the Remuneration Policy is subject to a
binding vote at every third AGM does not imply any
change on the part of the Company. The principles
remain the same as for previous years. There have been
no changes to the Directors’ Remuneration Policy during
the period of this Report nor are there any proposals for
the foreseeable future.
Directors’ Remuneration Report
abrdn New India Investment Trust plc 45
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
This part of the Remuneration Report provides details of
the Company’s Remuneration Policy for Directors of the
Company. This policy takes into consideration the
principles of the UK Corporate Governance Code. No
shareholder views were sought in setting the
Remuneration Policy although any comments received
from shareholders would be considered on an ongoing
basis. As the Company has no employees and the Board
is comprised wholly of non-executive Directors and, given
the size and nature of the Company, the Board has not
established a separate Remuneration Committee during
the year under review. The Nomination Committee is
responsible for determining Directors’ remuneration.
The Directors’ Remuneration Policy was approved by
shareholders at the AGM on 27 September 2023.
Implementation Report
The Directors are non-executive and the limit on their
aggregate annual fees is set at £200,000 within the
Company’s Articles of Association. This limit may only be
amended by shareholder resolution and a resolution to
increase the limit from £150,000 was last approved by
shareholders at the AGM in 2018.
Review of Directors’ Fees
The levels of fees for the year and the preceding year are
set out in the table below.
Year ended
31 March 2024
£
31 March 2023
£
Chairman
40,000
38,000
Chairman of Audit
Committee
34,500
33,000
Director
30,000
29,000
The Nomination Committee carried out a review of
Directors’ annual fees during the year and concluded that
there should be no change for the year to 31 March 2025.
There are no further fees to disclose as the Company has
no employees, chief executive or executive directors.
Spend on Pay
As the Company has no employees, the Directors do not
consider it appropriate to present a table comparing
remuneration paid to employees with distributions to
shareholders. The fees paid to Directors are shown
in the table below.
Company Performance
During the year the Board carried out a review of
investment performance. The graph shows the share
price total return (assuming all dividends are reinvested)
to Ordinary shareholders compared to the total return
from the Benchmark for the ten-year period to 31 March
2024 (rebased to 100 at 31 March 2014). This Benchmark
was selected for comparison purposes as it is used by the
Board for investment performance measurement.
100
150
200
250
300
350
2014 2015
2016 2017
2018 2019 2020 2021 2022 2023 2024
Share Price
Index
Fees Payable (Audited)
The Directors who served in the year received the fees, as
set out in the table below, which excluded employers’
National Insurance contributions.
Year ended
Year ended
31 March 2024
31 March 2023
Director
£
£
Michael Hughes
A
40,000
33,803
David Simpson
30,000
29,000
Andrew Robson
B
34,500
21,355
Rebecca Donaldson
30,000
29,000
Hasan Askari
C
n/a
19,036
Stephen White
C
n/a
16,317
Total
134,500
148,511
A
Appointed as Chairman on 28 September 2022.
B
Appointed as a Director on 1 August 2022 and Chairman of the Audit Committee on
28 September 2022.
C
Retired as a Director on 28 September 2022.
Fees are pro-rated where a change takes place during a
financial year. There were no payments to third parties
from the fees referred to in the table above.
46 abrdn New India Investment Trust plc
Directors’ Interests in the Company (Audited)
The Directors are not required to have a shareholding in
the Company. The Directors (including their connected
persons) at 31 March 2024 and 31 March 2023 had no
interest in the share capital of the Company other than
those interests, all of which are beneficial, in the table
below, which were also unchanged as at the date of
this Report:
31 March 2024
31 March 2023
Ord. 25p
Ord. 25p
Michael Hughes
8,115
8,115
David Simpson
3,860
3,860
Andrew Robson
4,000
4,000
Rebecca Donaldson
4,471
4,471
Annual Percentage Change in Directors’
Remuneration (Audited)
The table below sets out the annual percentage change in
Directors’ fees for the past year.
Year
ended
31
March
2024
%
Year
ended
31
March
2023
%
Year
ended
31
March
2022
%
Year
ended
31
March
2021
%
Michael Hughes
A
18.3
22.9
1.9
1.9
David Simpson
B
3.4
153.1
n/a
n/a
Andrew Robson
C
61.6
n/a
n/a
n/a
Rebecca
Donaldson
D
3.5 5.5 74.6 n/a
Hasan Askari
E
n/a
-47.8
1.4
1.4
Stephen White
E
n/a
-46.5
1.7
1.7
Rachel Beagles
F
n/a
n/a
n/a
-51.0
A
Appointed as a Director on 7 September 2026 and Chairman on 28 September
2022.
B
Appointed as a Director on 1 November 2021 and Senior Independent Director
on 28 September 2022.
C
Appointed as a Director on 1 August 2022 and Chairman of the Audit
Committee on 28 September 2022.
D
Appointed as a Director on 1 September 2020.
E
Retired as a Director on 28 September 2022.
F
Retired as a Director on 23 September 2020.
Annual Statement
On behalf of the Board and in accordance with Part 2 of
Schedule 8 of the Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment)
Regulations 2013, the Board confirms that the above
Report on Remuneration Policy and Remuneration
Implementation summarises, as applicable, for the year
ended 31 March 2024:
· the major decisions on Directors’ remuneration;
· any substantial changes relating to Directors’
remuneration made during the year; and
· the context in which the changes occurred and in which
decisions have been taken.
Michael Hughes,
Chairman
13 June 2024
Directors’ Remuneration Report
Continued
abrdn New India Investment Trust plc 47
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law they
have elected to prepare the financial statements in
accordance with UK-adopted international accounting
standards and applicable law.
Under company law the Directors must not approve the
financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of its profit or loss for that period. In
preparing these financial statements, the Directors are
required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and estimates that are reasonable,
relevant and reliable;
· state whether they have been prepared in accordance
with UK adopted international accounting standards;
· assess the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to
going concern; and
· use the going concern basis of accounting unless they
either intend to liquidate the Company or to cease
operations or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and explain
the Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the
Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They
are responsible for such internal control as they determine
is necessary to enable the preparation of financial
statements that are free from material misstatement,
whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open
to them to safeguard the assets of the Company and to
prevent and detect fraud and other irregularities.
Under applicable law and regulations, the Directors are
also responsible for preparing a Strategic Report,
Directors’ Report, Directors’ Remuneration Report and
Corporate Governance Statement that complies with that
law and those regulations.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website but not for the
content of any information included on the website that
has been prepared or issued by third parties. Legislation in
the UK governing the preparation and dissemination of
financial statements may differ from legislation in
other jurisdictions.
In accordance with Disclosure Guidance and
Transparency Rule 4.1.14R, the financial statements will
form part of the annual financial report prepared using
the single electronic reporting format under the TD ESEF
Regulation. The auditor's report on these financial
statements provides no assurance over the ESEF format.
Responsibility Statement of the Directors in respect of the
Annual Financial Report
We confirm that to the best of our knowledge:
· the financial statements, prepared in accordance with
the applicable set of accounting standards, give a true
and fair view of the assets, liabilities, financial position
and profit or loss of the Company; and
· the strategic report includes a fair review of the
development and performance of the business and the
position of the issuer, together with a description of the
principal risks and uncertainties that they face.
We consider the annual report and accounts, taken as a
whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy.
For and on behalf of the Board
Michael Hughes,
Chairman
13 June 2024
Statement of Directors’ responsibilities in respect of the
Annual Report and financial statements
48 abrdn New India Investment Trust plc
1 Our opinion is unmodified
We have audited the financial statements of abrdn New
India Investment Trust plc (“the Company”) for the year
ended 31 March 2024 which comprise the Statement of
Comprehensive Income, Statement of Financial Position,
Statement of Changes in Equity, Statement of Cash Flows,
and the related notes, including the accounting policies in
note 1.
In our opinion the financial statements:
· give a true and fair view of the state of Company’s
affairs as at 31 March 2024 and of its profits for the year
then ended;
· have been properly prepared in accordance with UK-
adopted international accounting standards; and
· have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities are described below. We believe
that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on
6 September 2016. The period of total uninterrupted
engagement is for the eight financial years ended 31
March 2024. We have fulfilled our ethical responsibilities
under, and we remain independent of the Company in
accordance with, UK ethical requirements including the
FRC Ethical Standard as applied to listed public interest
entities. No non-audit services prohibited by that standard
were provided.
Overview
Materiality:
£4.3m (2023: £4m)
Financial statements as a whole
0.9% (2023: 1.0%) of Total Assets
Key audit matter
vs 2023
Recurring risk
Carrying amount of quoted investments
2 Key audit matters: our assessment of risks
of material misstatement
Key audit matters are those matters that, in our
professional judgement, were of most significance in the
audit of the financial statements and include the most
significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including
those which had the greatest effect on: the overall audit
strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. We
summarise below the key audit matter (unchanged from
2023), in arriving at our audit opinion above, together with
our key audit procedures to address this matter and, as
required for public interest entities, our results from those
procedures. This matter was addressed, and our results
are based on procedures undertaken, in the context of,
and solely for the purpose of, our audit of the financial
statements as a whole, and in forming our opinion thereon,
and consequently are incidental to that opinion, and we
do not provide a separate opinion on this matter.
Independent Auditor’s Report to the Members of
abrdn New India Investment Trust plc
abrdn New India Investment Trust plc 49
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
The risk
Our response
Carrying amount of quoted
investments
£465.8m (2023: £391.4m)
Refer to page 42 (Audit
Committee Report), page 61
(accounting policy) and pages
67 and 68 (financial disclosures).
Low risk, high value
The Company’s portfolio of level 1 quoted
investments makes up 98.1% (2023: 97.3%) of the
Company’s total assets (by value) and is one of the
key drivers of results. We do not consider these
investments to be at a high risk of significant
misstatement, or to be subject to a significant level
of judgement because they comprise liquid,
quoted investments. However, due to their
materiality in the context of the financial
statements as a whole, they are considered to be
the areas which had the greatest effect on our
overall audit strategy and allocation of resources in
planning and completing our audit.
We performed the detailed tests below rather
than seeking to rely on the Company’s controls,
because the nature of the balance is such that we
would expect to obtain audit evidence primarily
through the detailed procedures below.
Our procedures included:
· Tests of detail: Agreeing the valuation of 100% of
level 1 quoted investments in the portfolio to
externally quoted prices; and
· Enquiry of Depositary: Agreeing 100% of level 1
quoted investment holdings in the portfolio to
independently received third party
confirmations from the investment Depositary.
· Our results: We found the carrying amount
of quoted investments to be acceptable
(2023: acceptable).
3 Our application of materiality and an
overview of the scope of our audit
Materiality for the financial statements as a whole was set
at £4.3m (2023: £4m), determined with reference to a
benchmark of total assets, of which it represents 0.9%
(2023: 1.0%).
In line with our audit methodology, our procedures on
individual account balances and disclosures were
performed to a lower threshold, performance materiality,
so as to reduce to an acceptable level the risk that
individually immaterial misstatements in individual
account balances add up to a material amount across the
financial statements as a whole. Performance materiality
was set at 75% (2023: 75%) of materiality for the financial
statements as a whole, which equates to £3.2m (2023:
£3.0m). We applied this percentage in our determination
of performance materiality because we did not identify
any factors indicating an elevated level of risk.
We agreed to report to the Audit Committee any
corrected or uncorrected identified misstatements
exceeding £217,000 (2023: £201,000), in addition to other
identified misstatements that warranted reporting on
qualitative grounds.
Our audit of the Company was undertaken to the
materiality level specified above and was performed by a
single audit team.
The scope of the audit work performed was fully
substantive as we did not rely upon the Company’s
internal control over financial reporting.
50 abrdn New India Investment Trust plc
4 Going concern
The Directors have prepared the financial statements on
the going concern basis as they do not intend to liquidate
the Company or to cease its operations, and as they have
concluded that the Company’s financial position means
that this is realistic. They have also concluded that there
are no material uncertainties that could have cast
significant doubt over its ability to continue as a going
concern for at least a year from the date of approval of
the financial statements (“the going concern period”).
We used our knowledge of the Company, its industry, and
the general economic environment to identify the
inherent risks to its business model and analysed how
those risks might affect the Company’s financial
resources or ability to continue operations over the going
concern period. The risks that we considered most likely to
adversely affect the Company’s available financial
resources and metrics relevant to debt covenants over
this period were:
· The impact of a significant reduction in the valuation of
investments and the implications for the Company’s
debt covenants;
· The liquidity of the investment portfolio and its ability to
meet the liabilities of the Company as and when they fall
due; and
· The operational resilience of key service organisations.
We considered whether these risks could plausibly affect
the liquidity or covenant compliance in the going concern
period by assessing the degree of downside assumption
that, individually and collectively, could result in a liquidity
issue, taking into account the Company’s current and
projected cash and liquid investment position.
We considered whether the going concern disclosure in
note 2(a) to the financial statements gives a full and
accurate description of the Directors’ assessment of going
concern, including the identified risks, dependencies, and
related sensitivities.
Our conclusions based on this work:
· we consider that the Directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate;
· we have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty
related to events or conditions that, individually or
collectively, may cast significant doubt on the
Company's ability to continue as a going concern for the
going concern period;
· we have nothing material to add or draw attention to in
relation to the Directors’ statement in Note 2 (a) to the
financial statements on the use of the going concern
basis of accounting with no material uncertainties that
may cast significant doubt over the Company’s use of
that basis for the going concern period, and we found
the going concern disclosure in note 2 (a) to be
acceptable; and
· the related statement under the Listing Rules set out on
page 36 and is materially consistent with the financial
statements and our audit knowledge.
However, as we cannot predict all future events or
conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that
were reasonable at the time they were made, the above
conclusions are not a guarantee that the Company will
continue in operation.
5 Fraud and breaches of laws and
regulations – ability to detect
Identifying and responding to risks of material misstatement
due to fraud
To identify risks of material misstatement due to fraud
(“fraud risks”) we assessed events or conditions that could
indicate an incentive or pressure to commit fraud or
provide an opportunity to commit fraud. Our risk
assessment procedures included:
· Enquiring of Directors as to the Company’s high-level
policies and procedures to prevent and detect fraud, as
well as whether they have knowledge of any actual,
suspected or alleged fraud;
· Assessing the segregation of duties in place between
the Directors, the Administrator and the Company’s
Investment Manager; and
· Reading Board and Audit Committee minutes.
We communicated identified fraud risks throughout the
audit team and remained alert to any indications of fraud
throughout the audit.
As required by auditing standards, we perform
procedures to address the risk of management override
of controls, in particular to the risk that management may
be in a position to make inappropriate accounting entries.
We evaluated the design and implementation of the
relevant controls over journal entries and other
adjustments and made inquiries of the Administrator
about inappropriate or unusual activity relating to the
processing of journal entries and other adjustments.
Independent Auditor’s Report to the Members of
abrdn New India Investment Trust plc
Continued
abrdn New India Investment Trust plc 51
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Based on these procedures, we selected journal entries
for testing, which included material post-closing
journal entries.
On this audit we do not believe there is fraud risk related to
revenue recognition because the revenue is non-
judgemental and straightforward, with limited opportunity
for manipulation. We did not identify any significant
unusual transactions or additional fraud risks.
Identifying and responding to risks of material misstatement
related to compliance with laws and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and
sector experience and through discussion with the
Directors, the Investment Manager and the Administrator
(as required by auditing standards) and discussed with
the Directors the policies and procedures regarding
compliance with laws and regulations. As the Company is
regulated, our assessment of risks involved gaining an
understanding of the control environment including the
entity’s procedures for complying with regulatory
requirements. The potential effect of these laws
and regulations on the financial statements
varies considerably.
Firstly, the Company is subject to laws and regulations that
directly affect the financial statements including financial
reporting legislation (including related companies
legislation), distributable profits legislation, and its
qualification as an Investment Trust under UK taxation
legislation, any breach of which could lead to the
Company losing various deductions and exemptions from
UK corporation tax, and we assessed the extent of
compliance with these laws and regulations as part of our
procedures on the related financial statement items.
Secondly, the Company is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in
the financial statements, for instance through the
imposition of fines or litigation. We identified the following
areas as those most likely to have such an effect: money
laundering, data protection, bribery and corruption
legislation and certain aspects of company legislation
recognising the financial and regulated nature of the
Company’s activities and its legal form. Auditing standards
limit the required audit procedures to identify non-
compliance with these laws and regulations to enquiry of
the Directors and the Administrator and inspection of
regulatory and legal correspondence, if any. Therefore, if
a breach of operational regulations is not disclosed to us
or evident from relevant correspondence, an audit will not
detect that breach.
Context of the ability of the audit to detect fraud or
breaches of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some
material misstatements in the financial statements, even
though we have properly planned and performed our
audit in accordance with auditing standards. For example,
the further removed non-compliance with laws and
regulations is from the events and transactions reflected
in the financial statements, the less likely the inherently
limited procedures required by auditing standards would
identify it.
In addition, as with any audit, there remained a higher risk
of non-detection of fraud, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the
override of internal controls. Our audit procedures are
designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and
cannot be expected to detect non-compliance with all
laws and regulations
6 We have nothing to report on the other
information in the Annual Report
The Directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does
not cover the other information and, accordingly, we do
not express an audit opinion or, except as explicitly stated
below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial
statements audit work, the information therein is
materially misstated or inconsistent with the financial
statements or our audit knowledge. Based solely on that
work we have not identified material misstatements in the
other information.
Strategic report and Directors’ report
Based solely on our work on the other information:
· we have not identified material misstatements in the
Strategic Report and the Directors’ Report;
· in our opinion the information given in those reports for
the financial year is consistent with the financial
statements; and
· in our opinion those reports have been prepared in
accordance with the Companies Act 2006.
52 abrdn New India Investment Trust plc
Directors’ Remuneration Report
In our opinion the part of the Directors’ Remuneration
Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Disclosures of emerging and principal risks and
longer-term viability
We are required to perform procedures to identify
whether there is a material inconsistency between the
Directors’ disclosures in respect of emerging and principal
risks and the viability statement, and the financial
statements and our audit knowledge.
Based on those procedures, we have nothing material to
add or draw attention to in relation to:
· the Directors’ confirmation within the Viability Statement
(on page 18) that they have carried out a robust
assessment of the emerging and principal risks facing
the Company, including those that would threaten its
business model, future performance, solvency and
liquidity;
· the Principal risks and uncertainties disclosures
describing these risks and how emerging risks are
identified, and explaining how they are being managed
and mitigated; and
· the Directors’ explanation in the viability statement of
how they have assessed the prospects of the Company,
over what period they have done so and why they
considered that period to be appropriate, and their
statement as to whether they have a reasonable
expectation that the Company will be able to continue
in operation and meet its liabilities as they fall due over
the period of their assessment, including any related
disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Viability Statement, set
out on page 18, under the Listing Rules. Based on the
above procedures, we have concluded that the above
disclosures are materially consistent with the financial
statements and our audit knowledge.
Our work is limited to assessing these matters in the
context of only the knowledge acquired during our
financial statements audit. As we cannot predict all future
events or conditions and as subsequent events may result
in outcomes that are inconsistent with judgments that
were reasonable at the time they were made, the
absence of anything to report on these statements is not a
guarantee as to the Company’s longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify
whether there is a material inconsistency between the
directors’ corporate governance disclosures and the
financial statements and our audit knowledge.
Based on those procedures, we have concluded that each
of the following is materially consistent with the financial
statements and our audit knowledge:
· the Directors’ statement that they consider that the
annual report and financial statements taken as a whole
is fair, balanced and understandable, and provides the
information necessary for shareholders to assess the
Company’s position and performance, business model
and strategy;
· the section of the annual report describing the work of
the Audit Committee, including the significant issues that
the audit committee considered in relation to the
financial statements, and how these issues were
addressed; and
· the section of the annual report that describes the
review of the effectiveness of the Company’s risk
management and internal control systems.
We are required to review the part of the Corporate
Governance Statement relating to the Company’s
compliance with the provisions of the UK Corporate
Governance Code specified by the Listing Rules for our
review. We have nothing to report in this respect.
7 We have nothing to report on the other
matters on which we are required to report
by exception
Under the Companies Act 2006, we are required to report
to you if, in our opinion:
· adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
· the financial statements and the part of the Directors’
Remuneration Report to be audited are not in
agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified
by law are not made; or
· we have not received all the information and
explanations we require for our audit.
We have nothing to report in these respects.
Independent Auditor’s Report to the Members of
abrdn New India Investment Trust plc
Continued
abrdn New India Investment Trust plc 53
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
8 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page
47, the Directors are responsible for: the preparation of the
financial statements including being satisfied that they
give a true and fair view; 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; assessing the
Company’s ability to continue as a going concern,
disclosing, as applicable, matters related to going
concern; and using 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.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and
to issue our opinion in an auditor’s report. Reasonable
assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with
ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of the
financial statements.
A fuller description of our responsibilities is provided on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities.
The Company will be including these financial statements
in an annual financial report prepared using the single
electronic reporting format specified in the TD ESEF
Regulation. This auditor’s report provides no assurance
over whether the annual financial report has been
prepared in accordance with that format.
9 The purpose of our audit work and to
whom we owe our responsibilities
This report is made solely to the Company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company
and the Company’s members, as a body, for our audit
work, for this report, or for the opinions we have formed.
Carla Cassidy (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
LONDON
E14 5GL
13 June 2024
54 abrdn New India Investment Trust plc
Financial
Statements
abrdn New India Investment Trust plc 55
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Year ended
Year ended
31 March 2024
31 March 2023
Revenue
Capital
Revenue
Capital
return
return
Total
return
return
Total
Notes
£’000
£’000
£’000
£’000
£’000
£’000
Income
Income from investments
3
4,722
-
4,722
5,725
302
6,027
Interest
3
181
-
181
96
-
96
Gains/(losses) on investments held at fair value
through profit or loss
10(a)
-
106,805
106,805
-
(35,669)
(35,669)
Currency losses
-
(403)
(403)
-
(432)
(432)
4,903
106,402
111,305
5,821
(35,799)
(29,978)
Expenses
Investment management fees
4
(2,964)
-
(2,964)
(3,284)
-
(3,284)
Administrative expenses
5
(957)
-
(957)
(1,028)
-
(1,028)
(3,921)
-
(3,921)
(4,312)
-
(4,312)
Profit/(loss) before finance costs and taxation
982
106,402
107,384
1,509
(35,799)
(34,290)
Finance costs
6
(2,544)
-
(2,544)
(1,309)
-
(1,309)
(Loss)/profit before taxation
(1,562)
106,402
104,840
200
(35,799)
(35,599)
Taxation
7
(472)
(13,346)
(13,818)
(537)
1,870
1,333
(Loss)/profit for the year
(2,034)
93,056
91,022
(337)
(33,929)
(34,266)
(Loss)/return per Ordinary share (pence)
9
(3.77)
172.62
168.85
(0.59)
(59.41)
(60.00)
The Company does not have any income or expense that is not included in “(Loss)/profit for the year”, and therefore this represents
the “Total comprehensive income for the year”, as defined in IAS 1 (revised).
All of the (loss)/profit and total comprehensive income is attributable to the equity holders of the Company. There are no non-
controlling interests.
The total column of this statement represents the Statement of Comprehensive Income of the Company, prepared in accordance
with UK-adopted International Accounting Standards. The revenue and capital columns are supplementary to this and are prepared
under guidance published by the Association of Investment Companies (see Note 2 to the Financial Statements).
All items in the above statement derive from continuing operations.
The accompanying notes are an integral part of these financial statements.
Statement of Comprehensive Income
56 abrdn New India Investment Trust plc
As at
As at
31 March 2024
31 March 2023
Notes
£’000
£’000
Non-current assets
Investments held at fair value through profit or loss
10
465,789
391,371
Current assets
Cash at bank
6,452
7,178
Other receivables
11
2,403
3,715
8,855
10,893
Current liabilities
Bank loan
12(a)
(25,953)
(29,918)
Other payables
12(b)
(2,231)
(3,279)
(28,184)
(33,197)
Net current liabilities
(19,329)
(22,304)
Non-current liabilities
Deferred tax liability on Indian capital gains
13
(19,406)
(11,148)
Net assets
427,054
357,919
Share capital and reserves
Ordinary share capital
14
14,768
14,768
Share premium account
25,406
25,406
Capital redemption reserve
4,484
4,484
Capital reserve
384,824
313,655
Revenue reserve
(2,428)
(394)
Equity shareholders’ funds
427,054
357,919
Net asset value per Ordinary share (pence)
16
819.56
641.32
The financial statements were approved by the Board of Directors and authorised for issue on 13 June 2024 and were signed on its
behalf by:
Michael Hughes
Chairman
The accompanying notes are an integral part of these financial statements.
Statement of Financial Position
abrdn New India Investment Trust plc 57
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Year ended 31 March 2024
Share
Capital
Share
premium
redemption
Capital
Revenue
capital
account
reserve
reserve
reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
Balance at 1 April 2023
14,768
25,406
4,484
313,655
(394)
357,919
Net gain/(loss) after taxation
-
-
-
93,056
(2,034)
91,022
Buyback of share capital to treasury
-
-
-
(21,887)
-
(21,887)
Balance at 31 March 2024
14,768
25,406
4,484
384,824
(2,428)
427,054
Year ended 31 March 2023
Share
Capital
Share
premium
Special
redemption
Capital
Revenue
capital
account
reserve
reserve
reserve
reserve
Total
£’000
£’000
£’000
£’000
£’000
£’000
£’000
Balance at 1 April 2022
14,768
25,406
9,932
4,484
349,462
(57)
403,995
Net loss after taxation
-
-
-
-
(33,929)
(337)
(34,266)
Buyback of share capital to treasury
-
-
(9,932)
-
(1,878)
-
(11,810)
Balance at 31 March 2023
14,768
25,406
-
4,484
313,655
(394)
357,919
The accompanying notes are an integral part of these financial statements.
Statement of Changes in Equity
58 abrdn New India Investment Trust plc
Year ended
Year ended
31 March 2024
31 March 2023
Notes
£’000
£’000
Cash flows from operating activities
Dividend income received
4,722
4,817
Interest income received
(4)
(16)
Investment management fee paid
(3,203)
(3,057)
Other cash (expenses)/receipts
(970)
692
Cash inflow from operations
545
2,436
Interest paid
(2,248)
(1,189)
Net cash (outflow)/inflow from operating activities
(1,703)
1,247
Cash flows from investing activities
Purchases of investments
(96,207)
(100,451)
Sales of investments
128,508
109,314
Indian capital gains tax paid on sales
(5,088)
(678)
Net cash inflow from investing activities
27,213
8,185
Cash flows from financing activities
Buyback of shares
(21,792)
(11,489)
Repayment of loan
(4,000)
–
Costs associated with loan
(41)
(105)
Net cash outflow from financing activities
(25,833)
(11,594)
Net decrease in cash and cash equivalents
(323)
(2,162)
Cash and cash equivalents at the start of the year
7,178
9,772
Effect of foreign exchange rate changes
(403)
(432)
Cash and cash equivalents at the end of the year
17
6,452
7,178
The accompanying notes are an integral part of these financial statements.
Statement of Cash Flows
abrdn New India Investment Trust plc 59
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
1.
Principal activity
The principal activity of the Company is that of an investment trust company within the meaning of Section 1158 of the
Corporation Tax Act 2010 (“s1158”).
2.
Accounting policies
(a)
Basis of preparation. The accounting policies which follow set out those policies which apply in preparing the financial
statements for the year ended 31 March 2024.
The financial statements have been prepared in accordance with UK-adopted international accounting standards
(“IFRS”). The Company adopted all of the IFRS which took effect during the year.
The financial statements have also been prepared in accordance with the Companies Act 2006 and the Statement of
Recommended Practice (SORP), “Financial Statements of Investment Trust Companies and Venture Capital Trusts,”
issued in July 2022.
The Directors have reviewed the Company’s ability to continue as a going concern. The Company’s assets consist
substantially of a portfolio of quoted securities which in most circumstances are realisable within a short timescale. The
Directors are mindful of the principal risks and uncertainties disclosed on pages 14 to 16 and the financial risks
disclosed in Note 17 to the financial statements and have reviewed cashflow forecasts detailing revenue and
expenses for at least 12 months from the date of this Report. Accordingly, the Directors believe that the Company has
adequate financial resources to continue in operational existence for at least 12 months from the date of this Report.
In August 2022, the Company entered into a three–year, £30 million revolving credit facility (the “Facility”) with Royal
Bank of Scotland International Limited (London Branch), part of NatWest Group plc, of which £26m was drawn down
at 31 March 2024 (2023 – £30m). The Board has set limits for borrowing and regularly reviews the level of any gearing
and compliance with banking covenants.
The results of stress testing prepared by the Manager, which models a sharp decline in market levels and income,
demonstrated that the Company has the ability to raise sufficient funds so as to both pay expenses and remain within
its debt covenants.
Having taken these factors into account, the Directors believe that the Company has adequate resources to continue
in operational existence and has the ability to meet its financial obligations as they fall due for a period of at least
twelve months from the date of approval of this Report. For these reasons, the Company continues to adopt the going
concern basis of accounting in preparing the financial statements.
Significant estimates and judgements. The preparation of financial statements in conformity with IFRS requires the use
of certain critical accounting estimates which requires management to exercise its judgement in the process of
applying the accounting policies. The Directors do not believe that any accounting judgements or estimates have
been applied to these financial statements that have a significant risk of causing material adjustment to the carrying
amount of assets and liabilities within the next financial year. The Company considers the selection of Sterling as its
functional currency to be a key judgement.
Functional currency. The Company’s investments are made in Indian Rupee and US Dollar, however the Board
considers the Company’s functional currency to be Sterling. In arriving at this conclusion, the Board considered that the
shares of the Company are listed on the London Stock Exchange, it is regulated in the United Kingdom, principally
having its shareholder base in the United Kingdom and also pays expenses in Sterling, as it would dividends, where
declared by the Company.
Notes to the Financial Statements
For the year ended
31 March 2024
60 abrdn New India Investment Trust plc
New and amended accounting standards and interpretations. The Company applied certain Standards and
Amendments, which are effective for annual periods beginning on or after 1 January 2023. The adoption of these
Standards and Amendments did not have a material impact on the financial results of the Company. The nature is
described below:
– IAS 1 Amendments (Disclosure of Accounting Policies)
– IAS 8 Amendments (Definition of Accounting Estimates)
– IAS 12 Amendments (Deferred Tax related to Assets and Liabilities arising from a Single Transaction)
– IAS 12 Amendments (Deferred Tax and OECD Pillar 2 Taxes)
At the date of authorisation of these financial statements, the following amendments to Standards and Interpretations
were assessed to be relevant and are all effective for annual periods beginning on or after 1 January 2024 and
thereafter;
– IAS 1 Amendments (Classification of Liabilities as Current or Non-Current)
– IAS 1 Amendments (Disclosure of Non-current Liabilities with Covenants)
The Company intends to adopt the Standards and Interpretations in the reporting period when they become effective
and the Board does not anticipate that the adoption of these Standards and Interpretations in future periods will
materially impact the Company’s financial results in the period of initial application although there may be revised
presentations to the Financial Statements and additional disclosures.
(b)
Presentation of Statement of Comprehensive Income. In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the AIC, supplementary information which analyses the
Statement of Comprehensive Income between items of a revenue and capital nature has been presented in the
Statement of Comprehensive Income.
(c)
Segmental reporting. The Board has considered the requirements of IFRS 8 ‘Operating Segments’ and is of the view
that the Company is engaged in a single segment business, which is one of investing in Indian quoted equities and that
therefore the Company has only a single operating segment. The Board of Directors, as a whole, has been identified as
constituting the chief operating decision maker of the Company. The key measure of performance used by the Board
to assess the Company’s performance is the total return on the Company’s net asset value, as calculated under IFRS,
and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained
in the financial statements.
(d) Income. Dividends receivable on equity shares are recognised in the Statement of Comprehensive Income on the ex-
dividend date, and gross of any applicable withholding tax. Dividends receivable on equity shares where no ex-
dividend date is quoted are brought into account when the Company’s right to receive payment is established. Special
dividends are credited to capital or revenue, according to their circumstances. Where a company has elected to
receive dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is
recognised in the Statement of Comprehensive Income. Provision is made for any dividends not expected to be
received. Interest receivable from cash and short-term deposits is accrued to the end of the financial year.
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 61
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
(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.
62 abrdn New India Investment Trust plc
(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.
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 63
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
3.
Income
2024
2023
£’000
£’000
Income from investments
Overseas dividends
4,722
6,027
Overseas dividends
4,722
6,027
Other income
Deposit interest
172
93
Other interest
9
3
181
96
Total income
4,903
6,123
4.
Investment management fees
2024
2023
£’000
£’000
Investment management fees
2,964
3,284
The Company has an agreement with the Manager for the provision of management and secretarial services.
During the year, the management fee was payable monthly in arrears and was based on an annual amount of 0.8% up to
£300 million and 0.6% thereafter of the Company’s net assets (2023 – based on an amount of 0.85% up to £350 million and
0.7% thereafter of the Company’s net assets), valued monthly. The management agreement is terminable by either the
Company or the Manager on six months’ notice. The amount payable in respect of the Company for the year was
£2,964,000 (2023 – £3,284,000) and the balance due to the Manager at the year end was £520,000 (2023 – £759,000). All
investment management fees are charged 100% to the revenue column of the Statement of Comprehensive Income.
64 abrdn New India Investment Trust plc
5.
Administrative expenses
2024
2023
£’000
£’000
Directors’ fees
135
148
Promotional activities
190
176
Auditor’s remuneration:
- fees payable for the audit of the Company’s annual financial statements
70
60
Legal and advisory fees
59
68
Custodian and overseas agents’ charges 319 311
Depositary fees
39
40
Other
145
225
957
1,028
The Manager supports the Company with promotional activities through its participation in the abrdn Investment Trust
Share Plan and ISA. The total fees paid and payable under the agreement during the year were £190,000 (2023 - £176,000)
and £98,000 (2023 - £46,000) was due to the Manager at the year end.
The only fees paid to KPMG LLP by the Company are the audit fees of £70,000 (2023 - £60,000). The amounts disclosed
above for Auditor’s remuneration are all shown net of VAT.
6.
Finance costs
2024
2023
£’000
£’000
In relation to bank loans
2,544
1,309
Finance costs are charged 100% to revenue as disclosed in the accounting policies.
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 65
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
7.
Taxation
2024
2023
Revenue
Capital
Total
Revenue
Capital
Total
£’000
£’000
£’000
£’000
£’000
£’000
(a)
Analysis of charge for the year
Indian capital gains tax charge on sales
–
5,088
5,088
–
936
936
Under provision of Indian capital gains tax
charged on sales for prior year
–
–
–
–
577
577
Overseas taxation
472
–
472
537
–
537
Total current tax charge for the year
472
5,088
5,560
537
1,513
2,050
Movement in deferred tax liability on Indian
capital gains
– 8,258 8,258 – (3,383) (3,383)
Total tax charge/(credit) for the year
472
13,346
13,818
537
(1,870)
(1,333)
The Company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. The
Company has recognised a deferred tax liability of £19,406,000 (2023 – £11,148,000) on capital gains which may arise
if Indian investments are sold.
On 1 April 2020, the Indian Government withdrew an exemption from withholding tax on dividend income. Dividends
are received net of 20% withholding tax and an excess charge of 4%. A further surcharge of either 2% or 5% is applied
if the receipt exceeds a certain threshold. Of this total charge, 10% of the withholding tax is irrecoverable with the
remainder being offset against the deferred tax liability on Indian capital gains in the first instance where there are
capital gains during the year or if not then it is shown in the Statement of Financial Position as an asset due for reclaim.
66 abrdn New India Investment Trust plc
(b)
Factors affecting the tax charge for the year. The tax charged for the year can be reconciled to the profit/(loss) per
the Statement of Comprehensive Income as follows:
2024
2023
Revenue
Capital
Total
Revenue
Capital
Total
£’000
£’000
£’000
£’000
£’000
£’000
(Loss)/profit before tax
(1,562)
106,402
104,840
200
(35,799)
(35,599)
UK corporation tax on profit at the standard
rate of 25% (2023 – 19%)
(391) 26,601 26,210 38 (6,802) (6,764)
Effects of:
(Gains)/losses on investments held at fair
value through profit or loss not taxable not
subject to UK corporation tax
– (26,702) (26,702) – 6,720 6,720
Currency losses not taxable
–
101
101
–
82
82
Deferred tax not recognised in respect of tax
losses
1,474 – 1,474
1,047
–
1,047
Corporate interest restriction
93
–
93
–
–
–
Expenses not deductible for tax purposes
4
–
4
3
–
3
Indian capital gains tax charged on sales
–
5,088
5,088
–
936
936
Under provision of Indian capital gains tax
charged on sales for prior year
–
–
–
–
577
577
Movement in deferred tax liability on Indian
capital gains
–
8,258
8,258
–
(3,383)
(3,383)
Irrecoverable overseas withholding tax
472
–
472
537
–
537
Non-taxable dividend income
(1,180)
–
(1,180)
(1,088)
–
(1,088)
Total tax charge/(credit)
472
13,346
13,818
537
(1,870)
(1,333)
–
(c) At 31 March 2024, the Company had surplus management expenses and loan relationship debits of £39,202,000
(2023 – £33,305,000) with a tax value of £9,801,000 (2023 – £8,326,000) based on enacted tax rates, in respect of
which a deferred tax asset has not been recognised. No deferred tax asset has been recognised because the
Company is not expected to generate taxable income in the future in excess of the deductible expenses of those
future periods. Therefore, it is unlikely that the Company will generate future taxable revenue that would enable the
existing tax losses to be utilised.
8.
Ordinary dividends on equity shares
After the payment of operational expenses, there was no revenue available for distribution by way of dividend for the year
ended 31 March 2024 (2023 - £nil).
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 67
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
9.
(Loss)/return per Ordinary share
2024
2023
Revenue
Capital
Total
Revenue
Capital
Total
Net (loss)/profit for the year (£’000)
(2,034)
93,056
91,022
(337)
(33,929)
(34,266)
Weighted average number of Ordinary
shares in issue
53,907,480
57,105,465
(Loss)/return per Ordinary share (pence)
(3.77)
172.62
168.85
(0.59)
(59.41)
(60.00)
10.
Investments held at fair value through profit or loss
2024
2023
(a)
Valuation
£’000
£’000
Opening book cost
296,380
293,858
Opening investment holdings fair value gains
94,991
146,023
Opening valuation
391,371
439,881
Movements in the year:
Purchases
95,183
99,528
Sales - proceeds
(127,570)
(112,369)
Gains/(losses) on investments
106,805
(35,669)
Closing valuation
465,789
391,371
2024
2023
£’000
£’000
Closing book cost
302,906
296,380
Closing investment holdings fair value gains
162,883
94,991
Closing valuation
465,789
391,371
The Company generated £127,570,000 (2023 - £112,369,000) from investments sold in the period. The book cost of
these investments when they were purchased was £88,658,000 (2023 - £97,005,000). These investments have been
revalued over time and until they were sold any unrealised gains/losses were included in the fair value of the
investments.
68 abrdn New India Investment Trust plc
(b)
Transaction costs. During the year, expenses were incurred in acquiring or disposing of investments classified as fair
value through profit or loss. These have been expensed through the capital column of the Statement of Comprehensive
Income, and are included within gains/(losses) on investments at fair value through profit or loss in the Statement of
Comprehensive Income. The total costs were as follows:
2024
2023
£’000
£’000
Purchases
165
166
Sales
178
173
343
339
The above transaction costs are calculated in line with the AIC SORP. The transaction costs in the Company’s
Key Information Document provided by the Manager are calculated on a different basis and in line with the
PRIIPs regulations.
11.
Other receivables
2024
2023
£’000
£’000
Amounts due from brokers
2,328
3,266
Recoverable tax on Indian dividends
-
393
Prepayments and accrued income
75
56
2,403
3,715
None of the above amounts are past their due date or impaired (2023 - nil).
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 69
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
12.
Current liabilities
2024
2023
(a)
Bank loan
£’000
£’000
Loans repayable within one year
25,953
29,918
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). £26 million was drawn down at 31 March 2024 (31 March 2023 – £30
million) at an all–in interest rate of 8.7873% until 2 April 2024 (2023 – 7.777% until 3 April 2023). 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. At the date of this Report the Company had drawn down £26 million at an all-in
interest rate of 8.80% until 5 August 2024.
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.
2024
2023
(b)
Other payables
£’000
£’000
Amounts due to brokers
29
1,053
Amounts due to brokers relating to buybacks to treasury
453
365
Other creditors
1,749
1,861
2,231
3,279
13.
Non-current liabilities
2024
2023
£’000
£’000
Deferred tax liability on Indian capital gains
19,406
11,148
70 abrdn New India Investment Trust plc
14.
Ordinary share capital
2024
2023
Number
£’000
Number
£’000
Authorised
200,000,000
50,000
200,000,000
50,000
Issued and fully paid
Ordinary shares of 25p each
52,107,910
13,028
55,809,921
13,953
Held in treasury:
Ordinary shares of 25p each
6,962,230
1,740
3,260,219
815
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 3,702,011 (2023 – 2,127,206) Ordinary shares of 25p each were repurchased by the Company at a total cost,
including transaction costs, of £21,778,000 (2023 – £11,810,000). All of the shares were placed in treasury. Shares held in
treasury represent 11.79% (2023 – 5.52%) 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
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)
Net
Currency
Cash
Non-cash
2022
differences
flows
movements
2023
£’000
£’000
£’000
£’000
£’000
Cash and short term deposits
9,772
(432)
(2,162)
–
7,178
Debt due within one year
(30,000)
–
–
82
(29,918)
(20,228)
(432)
(2,162)
82
(22,740)
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.
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 71
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
16.
Net asset value per Ordinary share
The net asset value per Ordinary share is based on a net asset value of £427,054,000 (2023 - £357,919,000) and on
52,107,910 (2023 - 55,809,921) Ordinary shares, being the number of Ordinary shares in issue at the year end, excluding
shares held in treasury.
17.
Financial instruments
Risk management. The Company’s investment activities expose it to various types of financial risk associated with the
financial instruments and markets in which it invests. The Company’s financial instruments comprise securities and other
investments, cash balances and debtors and creditors that arise directly from its operations; for example, in respect of sales
and purchases awaiting settlement, and debtors for accrued income.
The Board has delegated the risk management function to the Manager under the terms of its management agreement
with the Manager (further details of which are included under note 4). The Board regularly reviews and agrees policies for
managing each of the key financial risks identified with the Manager. The types of risk and the Manager’s approach to the
management of each type of risk, are summarised below. Such approach has been applied throughout the year and has not
changed since the previous accounting period. The numerical disclosures exclude short-term debtors and creditors on the
grounds of their materiality.
Risk management framework. The directors of the Manager collectively assume responsibility for the Manager’s obligations
under the AIFMD including reviewing investment performance and monitoring the Company’s risk profile during the year.
The Manager is a fully integrated member of abrdn, which provides a variety of services and support to the Manager in the
conduct of its business activities, including in the oversight of the risk management framework for the Company. The
Manager has delegated the day to day administration of the investment policy to the Investment manager, which is
responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in its
pre-investment disclosures to investors (details of which can be found on the Company’s website). The Manager has
retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational
risk for the Company.
The Manager conducts its risk oversight function through the operation of the abrdn’s risk management processes and
systems which are embedded within the abrdn’s operations. abrdn’s Risk Division supports management in the identification
and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk,
Market Risk and Risk Management. The team is headed up by abrdn’s Chief Risk Officer, who reports to the CEO of the Group.
The Risk Division achieves its objective through embedding the Risk Management Framework throughout the organisation
using abrdn’s operational risk management system (“SHIELD”).
abrdn’s Internal Audit Department is independent of the Risk Division and reports directly to the abrdn’s CEO and to the Audit
Committee of abrdn’s Board of Directors. The Internal Audit Department is responsible for providing an independent
assessment of the abrdn’s control environment.
abrdn’s corporate governance structure is supported by several committees to assist the board of directors of abrdn, its
subsidiaries and the Company to fulfil their roles and responsibilities. abrdn’s Risk Division is represented on all committees,
with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on
the functioning of those committees are described on the committees’ terms of reference.
Market risk. The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of
changes in market prices. This market risk comprises three elements – interest rate risk, foreign currency risk and other
price risk.
72 abrdn New India Investment Trust plc
Interest rate risk. The interest rate risk profile of the portfolio of the Company’s financial assets and liabilities, excluding equity
holdings which are all non-interest bearing, at the Statement of Financial Position date was as follows:
Weighted average
Weighted
period for which
average
Fixed
Floating
rate is fixed
interest rate
rate
rate
At 31 March 2024
Years
%
£’000
£’000
Assets
Sterling
–
3.69
–
6,032
US Dollars
–
–
–
8
Indian Rupee
–
–
–
412
–
6,452
Weighted average
Weighted
period for which
average
Fixed
Floating
rate is fixed
interest rate
rate
rate
Years
%
£’000
£’000
Liabilities
Bank loan – £26,000,000
0.17
8.79
25,953
–
Weighted average
Weighted
period for which
average
Fixed
Floating
rate is fixed
interest rate
rate
rate
At 31 March 2023
Years
%
£’000
£’000
Assets
Sterling
–
3.18
–
7,139
US Dollars
–
–
–
8
Indian Rupee
–
–
–
31
–
7,178
Weighted average
Weighted
period for which
average
Fixed
Floating
rate is fixed
interest rate
rate
rate
Years
%
£’000
£’000
Liabilities
Bank loan – £30,000,000
0.16
3.43
29,918
–
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 73
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
The weighted average interest rate is based on the current yield of each asset, weighted by its market value. The weighted
average interest rate on bank loans is based on the interest rate payable, weighted by the total value of the loans. The
maturity date of the Company’s loans is shown in note 12.
The floating rate assets consist of cash deposits on call earning interest at prevailing market rates.
The Company’s equity portfolio and short-term debtors and creditors (excluding bank loans) have been excluded from the
above tables.
Management of the risk. The possible effects on fair value and cash flows that could arise as a result of changes in interest
rates are taken into account when making investment and borrowing decisions.
Interest rate sensitivity. The sensitivity analyses below have been determined based on the exposure to interest rates for both
derivative and non-derivative instruments at the Statement of Financial Position date and the stipulated change taking place
at the beginning of the financial year and held constant throughout the reporting period in the case of instruments that have
floating rates.
The rate of interest on the loan is the percentage rate per annum which is the aggregate of the applicable margin, adjusted
SONIA rate and mandatory cost if any.
If interest rates had been 100 basis points higher or lower (based on current parameter used by Manager’s Investment Risk
Department on risk assessment) and all other variables were held constant, the Company’s revenue return for the year
ended 31 March 2024 would have decreased/increased by £182,000 (2023 – decrease/increase £199,000). This is mainly
attributable to the Company’s exposure to interest rates on its floating rate cash balances and bank loans. These figures
have been calculated based on cash positions and bank loans at each year end.
In the opinion of the Directors, the above sensitivity analyses are not representative of the year as a whole, since the level of
exposure changes frequently as part of the interest rate risk management process used to meet the Company’s objectives.
The risk parameters used will also fluctuate depending on the current market perception.
Foreign currency risk. The Company’s total return and net assets can be significantly affected by currency translation
movements as the majority of the Company’s assets and income are denominated in currencies other than Sterling, which is
the Company’s functional currency.
Management of the risk. It is not the Company’s policy to hedge this risk but it reserves the right to do so, to the extent possible.
The revenue account is subject to currency fluctuation arising on dividends paid in foreign currencies. The Company does
not hedge this currency risk.
Foreign currency exposure by currency of denomination:
2024
2023
Net
Total
Net
Total
Overseas
monetary
currency
Overseas
monetary
currency
investments
assets
exposure
investments
assets
exposure
£’000
£’000
£’000
£’000
£’000
£’000
US Dollar
–
8
8
5,474
8
5,482
Indian Rupee
465,789
2,711
468,500
385,897
2,260
388,157
465,789
2,719
468,508
391,371
2,268
393,639
74 abrdn New India Investment Trust plc
Foreign currency sensitivity. The following tables show the impact to a 10% increase and a 10% decrease in Sterling against
the foreign currency in which the Company has exposure.
If Sterling were to strengthen by 10%, there would be following impact:
2024
2023
Equity
A
Equity
A
£’000
£’000
US Dollar
(1)
(498)
Indian Rupee
(42,591)
(35,287)
(42,592)
(35,785)
If Sterling were to weaken by 10%, there would be following impact:
2024
2023
Equity
A
Equity
A
£’000
£’000
US Dollar
1
609
Indian Rupee
52,056
43,129
52,057
43,738
A
Represents total current exposure to other currencies as defined on page 73.
The prior year comparatives have been updated to reflect the current year presentation.
Price risk. Price risks (ie, changes in market prices other than those arising from interest rate or currency risk) may affect the
value of the quoted investments.
Management of the risk. It is the Board’s policy to hold an appropriate spread of investments in the portfolio in order to reduce
the risk arising from factors specific to a sector. Both the allocation of assets and the stock selection process act to reduce
market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets
regularly in order to review investment strategy. The investments held by the Company are all listed on the Bombay
(Mumbai) Stock Exchange and/or The Indian National Stock Exchange.
Price risk sensitivity. If market prices at the Statement of Financial Position date had been 15% higher or lower (which the
Directors consider to be a reasonable potential change in market prices) while all other variables remained constant, the
return attributable to Ordinary shareholders for the year ended 31 March 2024 would have increased /(decreased) by
£69,868,000 (2023 – increased/(decreased) by £58,706,000) and capital reserves would have increased /(decreased) by
the same amount.
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 75
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with
financial liabilities.
Management of the risk. The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions
and reviews these on a regular basis. Borrowings comprise a £30 million revolving multi-currency credit facility, which
expires on 5 August 2025. Other payables are settled within one year. Details of borrowings and other payables at 31 March
2024 are shown in note 12.
Liquidity risk is not considered to be significant as the Company’s assets comprise mainly readily realisable securities, which
can be sold to meet funding commitments if necessary. Short-term flexibility is achieved through the use of the loan facility,
details of which can be found in note 12. Details of the Board’s policy on gearing are shown in the interest rate risk section of
this note.
Liquidity risk exposure. The Company has a £30 million uncommitted multicurrency revolving loan facility, of which
£26,000,000 (2023 – £30,000,000) was drawn down at the year end. Other payables amounted to £2,231,000
(2023 – £3,279,000).
Credit risk. This is failure of the counterparty to a transaction to discharge its obligations under that transaction, which could
result in the Company suffering a loss.
Management of the risk
. The risk is actively managed as follows:
–
investment transactions are carried out with a number of brokers, whose credit standing is reviewed periodically by
the Manager, and limits are set on the amount that may be due from any one broker;
–
the risk of counterparty exposure due to failed trades causing a loss to the Company is mitigated by the review of failed
trade reports by the Manager on a daily basis. In addition, both stock and cash reconciliations to custodians’ records
are performed on a daily basis by the Manager to ensure discrepancies are investigated on a timely basis. The
Manager’s Compliance department carries out periodic reviews of the Custodian’s operations and reports its findings
to the Manager’s Risk Management Committee and to the Board of the Company. This review will also include checks
on the maintenance and security of investments held; and
– cash is held only with reputable banks whose credit ratings are monitored on a regular basis.
None of the Company’s financial assets are secured by collateral or other credit enhancements (2023 – none).
Credit risk exposure. In summary, compared to the amounts included in the Statement of Financial Position, the maximum
exposure to credit risk at 31 March was as follows:
2024
2023
Statement of
Statement of
Financial
Maximum
Financial
Maximum
Position
Exposure
Position
Exposure
£’000
£’000
£’000
£’000
Current assets
Loans and receivables
2,403
2,403
3,715
3,715
Cash at bank and in hand
6,452
6,452
7,178
7,178
8,855
8,855
10,893
10,893
76 abrdn New India Investment Trust plc
The exposure noted in the above table is not representative of the exposure across the year as a whole.
None of the Company’s financial assets are past due or impaired (2023 – none).
Fair values of financial assets and financial liabilities. The fair value of bank loans are represented in the table below;
2024
2023
£’000
£’000
Bank loan
25,953
29,918
Investments held at fair value through profit or loss are valued at their quoted bid prices which equate to their fair values.
The fair value and the carrying value of the bank loan in the Statement of Financial Position are the same at £25,953,000 as
at 31 March 2024 (2023 – £29,918,000) due to its short-term nature.
The Directors are of the opinion that the other financial assets and liabilities carried at amortised cost equates to their
fair value.
18.
Capital management policies and procedures
The Company’s capital management objectives are:
–
to ensure that the Company will be able to continue as a going concern; and
–
to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital
and debt. The policy is that debt should not exceed 25% of net assets.
The Board, with the assistance of the Manager monitors and reviews the broad structure of the Company’s capital on an
ongoing basis. This review includes:
–
the planned level of gearing, which includes taking account of the Manager’s views on the market;
–
the opportunity to buy back equity shares for cancellation or holding in treasury, which takes account of the difference
between the net asset value per share and the share price (ie the level of share price discount or premium);
–
the opportunity for new issues of equity shares; and
– the extent to which any revenue in excess of that which is required to be distributed should be retained.
The Company’s objectives, policies and processes for managing capital are unchanged from the preceding
accounting period.
19.
Fair value hierarchy
IFRS 13 ‘Fair Value Measurement’ requires an entity to classify fair value measurements using a fair value hierarchy that
reflects the subjectivity of the inputs used in making measurements. The fair value hierarchy has the following levels:
Level 1: quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2: valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable; and
Notes to the Financial Statements
Continued
abrdn New India Investment Trust plc 77
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Level 3: valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable.
The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value
hierarchy at the Statement of Financial Position date are as follows:
Level 1
Level 2
Level 3
Total
As at 31 March 2024
Note
£’000
£’000
£’000
£’000
Financial assets at fair value through profit or loss
Quoted equities
a)
465,789
–
–
465,789
Net fair value
465,789
–
–
465,789
Level 1
Level 2
Level 3
Total
As at 31 March 2023
Note
£’000
£’000
£’000
£’000
Financial assets at fair value through profit or loss
Quoted equities
a)
391,371
–
–
391,371
Net fair value
391,371
–
–
391,371
a)
Quoted equities. The fair value of the Company’s investments in quoted equities has been determined by reference to
their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on
recognised stock exchanges.
20.
Controlling party
In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate
controlling party.
21.
Related party transactions
Directors’ fees and interests. Fees payable during the year to the Directors and their interests in shares of the Company are
disclosed within the Directors’ Remuneration Report on page 46.
22.
Transactions with the Manager
The Company has an agreement with abrdn Fund Managers Limited for the provision of management, secretarial,
accounting and administration services and for the carrying out of promotional activities in relation to the Company. Details
of transactions during the year and balances outstanding at the year end are disclosed in notes 4 and 5.
23.
Subsequent events
Subsequent to the year end, the Company’s NAV has increased as a result of an increase in stockmarket
values of the portfolio investments. At the date of this Report the latest unaudited NAV per share was 935.74p
as at the close of business on 12 June 2024, an increase of 14.2% compared the NAV per share of 819.56p at
the year end.
78 abrdn New India Investment Trust plc
Alternative performance measures are numerical measures of the Company’s current, historical or future performance, financial
position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company’s
applicable financial framework includes IFRS and the AIC SORP. The Directors assess the Company’s performance against a range of
criteria which are viewed as particularly relevant for closed-end investment companies.
Adjusted net asset value per Ordinary share
A
This performance measure is used to provide a like for like comparison with the Company’s Benchmark for the purposes of the
potential five-yearly performance-related conditional tender offer announced on 24 March 2022, which was first in effect from 1 April
2022 and is therefore not applicable to earlier reporting periods. Further details on the conditional tender may be found in the
Chairman’s Statement on page 7.
2024
2023
Net assets attributable (£’000)
427,054
357,919
Accumulated Indian CGT charge since 1 April 2022 (£’000)
11,476
(1,870)
Net assets attributable excluding Indian CGT charge (£’000)
438,530
356,049
Number of Ordinary shares in issue
52,107,910
55,809,921
Adjusted net asset value per Ordinary share
A
841.58p
637.97p
A
Adjusted NAV is the Company’s NAV after adding back all Indian capital gains tax paid or accrued since 1 April 2022 in respect of realised and unrealised gains made on
investments.
Discount to net asset value per Ordinary share
The discount is the amount by which the share price is lower than the net asset value per share with debt at par value, expressed as a
percentage of the net asset value.
2024
2023
NAV per Ordinary share
a
819.56p
641.32p
Share price
b
652.00p
512.00p
Discount
(a-b)/a
20.4%
20.2%
Alternative Performance Measures
abrdn New India Investment Trust plc 79
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Net gearing
Net gearing measures the total borrowings less cash and cash equivalents divided by shareholders’ funds, expressed as a
percentage. Under AIC reporting guidance cash and cash equivalents includes amounts due to and from brokers at the year end.
2024
2023
Borrowings (£’000)
a
25,953
29,918
Cash (£’000)
b
6,452
7,178
Amounts due to brokers (£’000)
c
482
1,418
Amounts due from brokers (£’000)
d
2,328
3,266
Shareholders’ funds (£’000)
e
427,054
357,919
Net gearing
(a-b+c-d)/e
4.1%
5.8%
Ongoing charges ratio
The ongoing charges ratio has been calculated in accordance with guidance issued by the AIC as the total of investment
management fees and administrative expenses are expressed as a percentage of the average net asset values with debt at par
value throughout the year.
2024
2023
Investment management fees (£’000)
2,964
3,284
Administrative expenses (£’000)
957
1,028
Less: non-recurring charges
A
(£’000)
–
(27)
Ongoing charges (£’000)
3,921
4,285
Average net assets (£’000)
391,393
394,420
Ongoing charges ratio
1.00%
1.09%
A
Professional fees unlikely to recur.
The ongoing charges ratio provided in the Company’s Key Information Document is calculated in line with the PRIIPs regulations which
includes amongst other things, the cost of borrowings and transaction costs.
80 abrdn New India Investment Trust plc
Total return
NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking
into account both capital returns and dividends paid to shareholders. Share price and NAV total returns are monitored against open-
ended and closed-ended competitors, and the Benchmark, respectively. Adjusted NAV is the Company’s NAV after adding back all
Indian capital gains tax paid or accrued since 1 April 2022 in respect of realised or unrealised gains made on investments.
Share
Year ended 31 March 2024
NAV
Adjusted NAV
Price
Opening at 1 April 2023
a
641.32p
637.97p
512.00p
Closing at 31 March 2024
b
819.56p
841.58p
652.00p
Price movements
c=(b/a)-1
27.8%
31.9%
27.3%
Dividend reinvestment
A
d
N/A
N/A
N/A
Total return
c+d
+27.8%
+31.9%
+27.3%
Share
Year ended 31 March 2023
NAV
Adjusted NAV
Price
Opening at 1 April 2022
a
697.30p
697.30p
562.00p
Closing at 31 March 2023
b
641.32p
637.97p
512.00p
Price movements
c=(b/a)-1
–8.0%
–8.5%
–8.9%
Dividend reinvestment
A
d
N/A
N/A
N/A
Total return
c+d
–8.0%
–8.5%
–8.9%
Share
Two years ended 31 March 2024
NAV
Adjusted NAV
Price
Opening at 1 April 2022
a
697.30p
697.30p
562.00p
Closing at 31 March 2024
b
819.56p
841.58p
652.00p
Price movements
c=(b/a)-1
+17.5%
+20.7%
+16.0%
Dividend reinvestment
A
d
N/A
N/A
N/A
Total return
c+d
+17.5%
+20.7%
+16.0%
A
NAV total return involves investing the net dividend in the NAV of the Company with debt at par value on the date on which that dividend goes ex-dividend. Share price total
return involves reinvesting the net dividend in the share price of the Company on the date on which that dividend goes ex-dividend.
Alternative Performance Measures
Continued
abrdn New India Investment Trust plc 81
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
abrdn Fund Managers Limited and the Company are required to make certain disclosures available to investors in
accordance with the Alternative Investment Fund Managers Directive (“AIFMD”). Those disclosures that are required to
be made pre-investment are included within a pre-investment disclosure document (“PIDD”) which can be found on the
Company’s website: abrdnnewindia.co.uk.
There have been no material changes to the disclosures contained within the PIDD since its publication in June 2024.
The periodic disclosures as required under the AIFMD to investors are made below:
· information on the investment strategy, geographic and sector investment focus and principal stock exposures is
included in the Strategic Report;
· none of the Company’s assets are subject to special arrangements arising from their illiquid nature;
· the Strategic Report on pages 6 to 21, Note 17 to the Financial Statements and the PIDD, together set out the risk profile
and risk management systems in place. There have been no changes to the risk management systems in place in the
period under review and no breaches of any of the risk limits set, with no breach expected;
· there are no new arrangements for managing the liquidity of the Company or any material changes to the liquidity
management systems and procedures employed by the Manager;
· all authorised Alternative Investment Fund Managers are required to comply with the AIFMD Remuneration Code. In
accordance with the Remuneration Code, the Manager’s remuneration policy is available from the Company
Secretaries on request (see Additional Shareholder Information on page 101) and the remuneration disclosures in
respect of the Manager’s reporting period ended 31 December 2023 are available from its website at: abrdn.com.
Leverage
The table below sets out the current maximum permitted limit and actual level of leverage for the Company.
Gross Method
Commitment Method
Maximum level of leverage
2.50:1
2.00:1
Actual level at 31 March 2024
1.15:1
1.17:1
There have been no breaches of the maximum level during the period and no changes to the maximum level of
leverage employed by the Company. There is no right of re-use of collateral or any guarantees granted under the
leveraging arrangement. Changes to the information contained either within this Annual Report or the PIDD in relation to
any special arrangements in place, the maximum level of leverage which the Manager may employ on behalf of the
Company; the right of use of collateral or any guarantee granted under any leveraging arrangement; or any change to
the position in relation to any discharge of liability by the Depositary will be notified via a regulatory news service without
undue delay in accordance with the AIFMD.
The information on this page has been approved for the purposes of Section 21 of the Financial Services and Markets Act
2000 (as amended by the Financial Services Act 2012) by abrdn Fund Managers Limited which is authorised and
regulated by the Financial Conduct Authority in the United Kingdom.
Alternative Investment Fund Managers Directive
Disclosures (unaudited)
82 abrdn New India Investment Trust plc
Corporate
Information
The Company’s Investment
Manager is a subsidiary of abrdn.
Assets under the management
and administration of abrdn were
£508 billion at 31 March 2024.
Architectural details of the white columns of
Mumbai International Airport, which serves a
metropolitan population of over 20 million residents.
abrdn New India Investment Trust plc 83
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
The Manager, authorised and regulated by the Financial Conduct Authority, has been appointed as alternative investment
fund manager to the Company. The Manager has delegated portfolio management to the Investment Manager.
The Manager and Investment Manager are subsidiaries of abrdn, a global asset manager with its headquarters in
Edinburgh and operations in financial capitals and important regional centres throughout the world.
abrdn managed or administered over £508 billion (as at 31 December 2023) in assets for a range of clients, including
individuals and institutions, through mutual and segregated funds.
The Investment Team
Kristy Fong
Senior Investment Director
Chartered Financial Analyst, B.Acc from Nanyang Technological University
(Singapore). Before joining the Investment Manager in 2004 Kristy worked
as an analyst at UOB Kay Hian Pte Ltd.
Rita Tahilramani
Investment Manager
PGDBM from NL Dalmia (Mumbai), BE (Computers) from KJ Somaiya,
Mumbai university. Joined the Investment Manager in 2023 after five years
at Invesco Asset Management (India) as analyst covering the Indian
consumer and industrial sectors.
Pruksa Iamthongthong
Senior Investment Director
CFA® charterholder, BA in Business Administration, Chulalongkorn
University, Thailand. Joined the Investment Manager in 2007.
James Thom
Senior Investment Director
MBA, Insead; MA, Johns Hopkins University; BSc, University College, London.
Previously with Actis, the emerging markets private equity firm. Joined the
Investment Manager in 2010.
Flavia Cheong
Head of Equities - Asia Pacific ex Japan
Masters in Economics from University of Auckland. Previously with
Investment Company of the People’s Republic of China and Development
Bank of Singapore. Started investment career in 1987. Joined the
Investment Manager in 1996.
Information about the Investment Manager
84 abrdn New India Investment Trust plc
The Investment Process
Philosophy and Style
The Investment Manager will not invest in a company
without first having met its management team. Having
invested in a company, the Investment Manager typically
meets the management team twice a year. Over the
years, the Investment Manager's fund managers have
visited many thousands of companies, and more than
1,000 meetings are held annually with companies'
management teams.
Portfolios are managed by the Investment Manager on a
team basis, with individual fund managers doing their own
research and analysis. Each asset class has a model
portfolio that contains the team's best ideas for that asset
class and forms the basis for constructing individual
portfolios focused on that asset class.
The Investment Manager’s investment process
concentrates on a company’s business strategy,
management, financial strength, ownership structure and
corporate governance seeking companies that it can
invest in for the long term. This quality test means that
there are stocks in the Benchmark universe that will not be
considered for investment due to a lack of transparency
or poor corporate governance. The investment process
also takes account of responsible investment,
encompassing an assessment of environmental, social
and governance factors.
Risk Controls
The Investment Manager seeks to minimise risk by its in
depth research. Divergence from an index is not seen as
risk – the Investment Manager views, as one example, risk
to be associated with investment in poorly run, expensive
companies that are not fully understood. In fact, where risk
parameters are expressed in index relative terms, asset –
including sector – allocation constitutes a significant
constraint on stock selection. Hence diversification of
stocks provides the Investment Manager’s main control.
abrdn’s performance and investment risk unit
independently monitors portfolio positions and reports
monthly. As well as attributing performance it also
produces statistical analysis, which is used by the
Investment Manager primarily to check the portfolio is
behaving as expected, not as a predictive tool.
Information about the Investment Manager
Continued
abrdn New India Investment Trust plc 85
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
The Investment Manager believes that a company’s ability
to generate sustainable returns for investors depends on
the management of its environmental impact, its
consideration of the interests of society and stakeholders,
and on the manner in which it is governed. By putting ESG
factors at the heart of its investment process, the
Investment Manager aims to generate better outcomes
for the Company’s shareholders. The three factors can be
considered as follows:
· Environmental factors relate to how a company
conducts itself with regard to environmental
conservation and sustainability. Types of environmental
risks and opportunities include a company’s energy
consumption, waste disposal, land development and
carbon footprint, among others.
· Social factors pertain to a company’s relationship with its
employees and vendors. Risks and opportunities can
include (but are not limited to) a company’s initiatives on
employee health and well-being, and how supplier
relationships align with corporate values.
· Corporate governance factors can include the
corporate decision-making structure, independence of
board members, the treatment of minority
shareholders, executive compensation and political
contributions, among others.
At the investment stage, ESG factors and analysis can
help to frame where best to invest by considering
material risks and opportunities alongside other financial
metrics. Due diligence can ascertain whether such risks
are being adequately managed, and whether the
market has understood and priced them accordingly.
The Investment Manager is an active investor, voting at
shareholder meetings in a deliberate manner, working
with companies to drive positive change, and engaging
with policymakers on ESG and stewardship matters.
Furthermore, with respect to the Company, the Board
has supported the Investment Manager in actively
choosing, in future, not to invest in tobacco companies
nor investing in companies directly exposed to
controversial weapons.
There are three core principles which underpin the Investment Manager’s investment approach (shown below) and the time
it dedicates to ESG analysis as part of its overall fundamental equity research process:
Our Investment Manager’s Responsible
Investment Process
86 abrdn New India Investment Trust plc
How the Investment Manager embeds ESG into its Investment Process
01 Investment Insight
02 Active Ownership
03 Risk & Monitoring
04 Our People
High quality fundamental and
first hand research
Assessment of ESG for all
stocks under coverage
Engage and vote with aim of
improving financial resilience
and investment performance
Raise standards in companies
and industries we invest in, and
help drive best practice
Combine in
-
house and external
scoring to inform view
Active tracking of fund holdings
against ESG objectives
Over 130 equity professionals,
and 40+ central & on
-desk
ESG specialists across
the world
Can we measure it?
There are elements of ESG that can be quantified, for example the diversity of a board, the carbon footprint of a
company, and the level of employee turnover. While diversity can be monitored, measuring inclusion is more of a
challenge. Although it is possible to measure the level of staff turnover, it is more challenging to quantify corporate
culture. Relying on calculable metrics alone would potentially lead to misleading insights. As active managers,
quantitative and qualitative assessments are blended to better understand the ESG performance of a company.
The Investment Manager’s analysts consider such factors in a systematic and globally applied approach to assess and
compare companies consistently on their ESG credentials, both regionally and against their peer group. Some of the key
questions asked of companies include:
· How material are ESG issues for this company, and how are they being addressed?
· What is the quality of this company’s governance, ownership structure and management?
· Are incentives and key performance indicators aligned with the company’s strategy and the interests of shareholders?
The questions asked differ from company to company; the type of questions poised to a bank would be quite different
from those of a semiconductor manufacturing firm.
The ESG Scoring System
Having considered the regional universe and peer group in which a company operates, the Investment Manager
allocates it an ESG score between one and five. This is applied across every stock covered globally. Examples of each
category and a small sample of the criteria used are detailed below:
1. Best in class
2. Leader
3. Average
4. Below average
5. Laggard
ESG considerations are
a material part of the
company’s core
business strategy
Excellent disclosure
Makes opportunities
from strong ESG risk
management
ESG considerations
not market leading
Disclosure is good, but
not best in class
Governance is
generally very good
ESG risks are considered
as a part of principal
business
Disclosure in line with
regulatory requirements
Governance is generally
good but some minor
concerns
Evidence of some
financially material
controversies
Poor governance or
limited oversight of key
ESG issues
Some issues in treating
minority shareholders
poorly
Many financially
material controversies
Severe governance
concerns
Poor treatment of
minority shareholders
abrdn’s ESG Engagement
abrdn New India Investment Trust plc 87
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
At the last review reported to the Board, covering the six months ended 31 December 2023, 65% of the companies in the
portfolio were rated under the Investment Manager’s scoring system as ‘Leaders’, reflecting the portfolio's focus on
quality, while 34% of the companies were rated as ‘Average’. A generally positive momentum has been witnessed from
companies in the portfolio in terms of ESG, in covering both practices and disclosure, and it was pleasing to note that the
second half of the year saw a number of upgrades to company scores following extensive engagement by the
Investment Manager. More generally, engagements in India continue to focus on environmental impact and climate
change, as well as resource intensity, cybersecurity, board dynamics and independent directors. The portfolio did not
hold any companies rated as either ‘Below Average’ or’ Laggard’.
While the Investment Manager seeks to encourage better disclosure and ESG considerations by companies, it will
not always necessarily exclude one if improvements are expected. Overall, the Company supports an approach seeking
to target:
· an aggregate portfolio ESG rating that is better than, or equal to, the benchmark measured by the MSCI ESG rating
(CCC-AAA) based on the weighted average of each company’s MSCI ESG rating;
· a Carbon Intensity that is at least 10% lower than the benchmark, as measured by the abrdn Carbon Footprint Tool
(which uses Trucost data for Scope 1 & 2 emissions). This tool enables analysis of company, sector, and the overall
portfolio’s carbon footprint.
The Board receives regular updates with regards to these metrics which are published on the Company website and,
while not guaranteed, there is an aim that the Investment Manager’s investment process will deliver against these
targets at the same time as delivering long term growth.
Climate Change
Climate change is one of the most significant challenges of the 21st century and has big implications for investors.
The energy transition is underway in many parts of the world, and policy changes, falling costs of renewable energy,
and a change in public perception are happening at a rapid pace. Assessing the risks and opportunities of climate
change is a core part of the investment process. In particular, the Investment Manager considers:
Transition risks and opportunities
Governments could take robust climate change mitigation actions to reduce emissions and transition to a
low-carbon economy. This is reflected in targets, policies and regulation and can have a considerable impact on
high-emitting companies.
Physical risks and opportunities
Insufficient climate change mitigation action will lead to more severe and frequent physical damage. This results in
financial implications, including damage to crops and infrastructure, and the need for physical adaptation such
as flood defences.
The Investment Manager has aligned its approach with that advocated by the investor agenda of the Principles for
Responsible Investment (PRI) – a United Nations-supported initiative to promote responsible investment as a way of
enhancing returns and better managing risk.
88 abrdn New India Investment Trust plc
PRI provides an intellectual framework to steer the massive transition of financial capital towards low-carbon
opportunities. It also encourages fund managers to demonstrate climate action across four areas: investments;
corporate engagement; investor disclosure; and policy advocacy, as explained below:
To assist in the analysis, the Investment Manager has developed a proprietary climate scenario analysis tool. Climate
scenario analysis involves modelling the impact on financial assets of a range of pathways (for both physical climate
change and the transition to a low carbon economy) under plausible assumptions for future policy and technological
change. This allows the Investment Manager to explore the impact of climate change on portfolios and to inform
investment decisions.
Importance of Engagement
The Investment Manager is committed to regular, ongoing engagement with the companies in which it invests, to help to
maintain and enhance their ESG standards into the future.
As part of the investment process, the Investment Manager undertakes a significant number of company meetings each
year on behalf of the Company. Your Company is supported by on-desk ESG analysts, as well as a well-resourced
specialist ESG Investment team. These meetings provide an opportunity to discuss various relevant ESG issues including
board composition, remuneration, audit, climate change, labour issues, human rights, bribery and corruption.
Companies are strongly encouraged to set clear targets or key performance indicators on all material ESG risks.
abrdn’s ESG Engagement
Continued
abrdn New India Investment Trust plc 89
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Our Engagement Activity
The Investment Manager regularly engages with
companies we invest in. The following chart shows the
engagements that have included ESG topics. Over the six
months ended 31 December 2023, the Investment
Manager met with 13 portfolio companies on ESG topics
and had 23 engagements with them. This does not include
positions that have been sold or are under consideration
for sale. These are the themes that the Investment
Manager has engaged on:
22
20
15
14
29
Climate
Environment
Labour Management,
Diversity & Inclusion
Corporate Behaviour
Corporate
Governance
Our Voting Activity
Voting Summary
Total
How many meetings were you eligible to vote?
75
How many meetings did you vote at?
75
How many resolutions were you eligible to vote on?
352
What % of resolutions did you vote on for which you
were eligible?
100.0%
Of the resolutions on which you voted, what % did
you vote with management?
91.8%
Of the resolutions on which you voted, what % did
you vote against management?
6.0%
Of the resolutions on which you voted, what % did
you abstain from voting?
2.3%
In what % of meetings, for which you did vote, did
you vote at least once against management?
13.3%
Note: the time period referenced in the above table is 12 months
ESG engagements are conducted with consideration of the 10 principles of the United Nations Global Compact, and
companies are expected to meet fundamental responsibilities in the areas of human rights, labour, the environment and
anti-corruption.
This engagement is not limited to a company’s management team. It can include many other stakeholders such as non-
government agencies, industry and regulatory bodies, as well as activists and the company’s customers and clients.
While the Investment Manager focuses on investing in quality companies, the investment team is aware that in some
cases Asian companies can lag those in Western Europe in terms of ESG. This is perhaps more true of emerging Asia
than developed Asia. In investing across Asia, the Investment Manager focuses on companies and management teams
exhibiting desirable behavioural traits and characteristics (for example, a track record of fair treatment of minority
shareholders, thoughtful capital allocation and return) rather than a strict focus on structures (for example, relating to
board composition). Subsequent to an investment, the Investment Manager engages energetically with companies to
improve and enhance ESG, aiming to encourage companies to implement processes and practises that will protect and
enhance shareholder value. The Investment Manager has a long track record of such constructive engagement,
drawing on investment experiences globally to bring these insights to the Company’s holdings.
90 abrdn New India Investment Trust plc
Investors may receive information about the
Company via email by registering at the foot
of the homepage of the website:
abrdnnewindia.co.uk
The website also includes current and previous Annual
and Half-Yearly Reports, performance data, the latest
monthly factsheet issued by the Manager, together with
links to the Company’s share price and recent London
Stock Exchange announcements.
If you have any general questions about the Company,
the Manager or performance, please send an email to
new.india@abrdn.com or write to:
abrdn New India Investment Trust plc
1 George Street
Edinburgh EH2 2LL
Information about the Company, and other investment
companies managed by the Manager, may also be found
on social media, as follows:
Twitter: @abrdnTrusts
LinkedIn: abrdn Investment Trusts
Alternative Investment Fund Managers
Directive (“AIFMD”) and Pre-Investment
Disclosure Document (“PIDD”)
The Company has appointed the Manager as its
alternative investment fund manager and BNP Paribas
London Branch (formerly BNP Paribas Trust Corporation
UK Limited, until 31 May 2024) as its depositary, under the
Alternative Investment Fund Managers Directive
(“AIFMD”).
The AIFMD requires the Manager, as the alternative
investment fund manager of abrdn New India Investment
Trust plc, to make available to investors certain
information prior to such investors’ investment in the
Company. Details of the leverage and risk policies which
the Company is required to have in place under AIFMD are
published in the Company’s Pre-Investment Disclosure
Document (“PIDD”) which can be found on its website:
abrdnnewindia.co.uk. The periodic disclosures required to
be made by the Manager under the AIFMD are set out on
page 81.
Benchmark
The Company’s Benchmark is the MSCI India Index
(Sterling-adjusted).
Investor Warning: Be alert to share
fraud and boiler room scams
abrdn has been contacted by investors informing us that
they have received telephone calls and emails from
people who have offered to buy their investment
company shares, purporting to work for abrdn or for third
party firms. abrdn has also been notified of emails
claiming that certain investment companies under our
management have issued claims in the courts against
individuals. These may be scams which attempt to gain
your personal information with which to commit identity
fraud or could be ‘boiler room’ scams where a payment
from you is required to release the supposed payment for
your shares. These callers/senders do not work for abrdn
and any third party making such offers/claims has no link
with abrdn.
abrdn does not ‘cold-call’ investors in this way. If you
have any doubt over the veracity of a caller, do not
offer any personal information, end the call and
contact the Company using the details in Additional
Shareholder Information.
The Financial Conduct Authority provides advice with
respect to share fraud and boiler room scams:
fca.org.uk/consumers/scams
Shareholder Enquiries
For queries regarding shareholdings, lost certificates,
dividend payments, registered details and related
matters, shareholders holding their shares directly in the
Company are advised to contact the Registrar,
Computershare Investor Services PLC (see Additional
Shareholder Information on page 101). Changes of
address must be notified to the Registrar in writing.
Suitability for Retail/NMPI Status
The Company’s securities are intended for investors
primarily in the UK (including retail investors), professionally-
advised private clients and institutional investors who are
seeking long term capital appreciation from investment in
companies which are incorporated in India or which derive
significant revenue or profit from India, with dividend yield
being of secondary importance, via an investment
company, and who understand and are willing to accept
the risks of exposure to equities within a single emerging
country fund. Investors should consider consulting a
financial adviser who specialises in advising on the
acquisition of shares and other securities before acquiring
shares. Investors should be capable of evaluating the risks
and merits of such an investment and should have sufficient
resources to bear any loss that may result.
Investor Information
abrdn New India Investment Trust plc 91
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
The Company currently conducts its affairs so that the
securities issued by the Company can be recommended
by a financial adviser to ordinary retail investors in
accordance with the Financial Conduct Authority’s rules in
relation to non-mainstream pooled investments (“NMPIs”)
and intends to continue to do so for the foreseeable future.
The Company’s securities are excluded from the Financial
Conduct Authority’s restrictions which apply to NMPIs
because they are securities issued by an investment trust.
Key Information Document (“KID”)
The KID relating to the Company can be found under
‘Key Documents’ in the ‘Literature’ section of the
Company’s website.
How to Invest in the Company and other
abrdn-managed investment trusts
A range of leading investment platforms and share
dealing services let you buy and sell abrdn-managed
investment trusts including the shares of the Company.
Many of these platforms operate on an ‘execution-only’
basis. This means they can carry out your instruction to
buy or sell a particular investment trust. But they may not
be able to advise on suitable investments for you. If you
require advice, please speak to a qualified financial
adviser (see below).
Closure of the abrdn Investment Trust
Savings Plans and transfer to interactive
investor
In June 2023, abrdn notified existing investors in the
abrdn Investment Trust ISA, Share Plan and Investment
Plan for Children (the “Plans”) that these would close in
December 2023.
All investors with a holding or cash balance in the Plans at
that date will transfer to interactive investor (“ii”). ii
communicated with planholders in late November 2023 to
set up account security to ensure that investors were able
to continue to access their holdings via ii following the
closure of the Plans.
Please contact ii for any ongoing support with your ii
account on 0345 646 1366, or +44 113 346 2309 if you are
calling from outside the UK. Lines are open 8.00am to
5.00pm Monday to Friday. Alternatively you can access
the ii website at www.ii.co.uk/abrdn-welcome.
Flexibility
Many investment platform providers will allow you to buy
and hold abrdn Investment Trust shares within an
Individual Savings Account (ISA), Junior ISA or Self Invested
Personal Pension (SIPP), all of which have potential tax
advantages. Most will also allow you to invest on both a
lump sum and regular savings basis.
Costs and service
It is important to choose the right platform for your needs,
so take time to research what each platform offers before
you make your decision, as well as considering charges.
When it comes to charges, some platforms have flat fee
structures while others levy percentage-based charges.
Typically, you will also pay a fee every time you buy and
sell shares, so you need to bear in mind these transaction
costs if you are trading frequently. There may also be
additional charges for ISA and SIPP investments.
Can I exercise my voting rights if I hold my
shares through an investment platform?
Yes, you should be able to exercise your right to vote by
contacting your platform provider. Procedures differ, but
some platforms will automatically alert you when new
statutory documents are available and then allow you to
vote online. Others will require you to contact them to
vote. Your chosen platform provider will provide
further guidance.
Getting advice
abrdn recommends that you seek financial advice prior to
making an investment decision. If you do not currently
have a financial adviser, details of authorised financial
advisers in your area can be found at pimfa.co.uk or
unbiased.co.uk (see below). You will pay a fee for
advisory services.
92 abrdn New India Investment Trust plc
Platform providers
Platforms featuring the Company, as well as other abrdn-
managed investment trusts, include:
· AJ Bell:
www.ajbell.co.uk/markets/investment-trusts
· Barclays Smart Investor:
www.barclays.co.uk/smart-investor
· Charles Stanley Direct:
www.charles-stanley-direct.co.uk
· Fidelity: www.fidelity.co.uk
· Halifax: www.halifax.co.uk/investing
· Hargreaves Lansdown:
www.hl.co.uk/shares/investment-trusts
· interactive investor (owned by abrdn):
www.ii.co.uk/investment-trusts
The companies above are shown for illustrative purposes
only. Other platform providers are available. The links
above direct you to external websites operated by each
platform provider. abrdn is not responsible for the content
and information on these third-party sites, apart from
interactive investor, which is owned by abrdn.
Discretionary Private Client Stockbrokers
If you have a large sum to invest, you may wish to contact
a discretionary private client stockbroker. They can
manage your entire portfolio of shares and will advise you
on your investments. To find a private client stockbroker
visit The Personal Investment Management & Financial
Advice Association at: pimfa.co.uk.
Financial Advisers
To find an adviser who recommends on investment trusts,
visit: unbiased.co.uk
Regulation of Stockbrokers
Before approaching a stockbroker, always check that
they are regulated by the Financial Conduct Authority:
Tel: 0800 111 6768 or at
at https://register.fca.org.uk
Email: consumerqueries@fca.org.uk
Note
Please remember that past performance is not a guide to
the future. Stock market and currency movements may
cause the value of shares and the income from them to
fall as well as rise and investors may not get back the
amount they originally invested.
As with all equity investments, the value of investment
trusts purchased will immediately be reduced by the
difference between the buying and selling prices of the
shares, the market maker’s spread.
Investors should further bear in mind that the value of
any tax relief will depend on the individual circumstances
of the investor and that tax rates and reliefs, as well as
the tax treatment of ISAs, may be changed by
future legislation.
The information on pages 90 to 92 has been approved for
the purposes of Section 21 of the Financial Services and
Markets Act 2000 (as amended by the Financial Services
Act 2012) by abrdn Investments Limited which is
authorised and regulated by the Financial
Conduct Authority.
Investor Information
Continued
abrdn New India Investment Trust plc 93
General
A new stock purchased during the year
was Uno Minda, which supplies auto
components to motorbikes and cars,
and now includes a new suite of
products for electric vehicles.
94 abrdn New India Investment Trust plc
Notice is hereby given that the Annual General Meeting of abrdn New India Investment Trust plc will be held at the offices
of abrdn plc at 18 Bishops Square, London E1 6EG at 12.30pm on 20 September 2024 for the following purposes:
Ordinary Business
As ordinary business to consider and, if thought fit, pass the following Resolutions 1 to 7 inclusive, as Ordinary Resolutions:
1. To receive and adopt the Directors’ and Auditor’s Reports and adopt the Financial Statements for the year ended
31 March 2024.
2. To receive and adopt the Directors’ Remuneration Report for the year ended 31 March 2024 (other than the
Directors’ Remuneration Policy).
3. To re-elect David Simpson as a Director of the Company.
4. To re-elect Andrew Robson as a Director of the Company.
5. To re-elect Rebecca Donaldson as a Director of the Company.
6. To re-elect Michael Hughes as a Director of the Company.
7. To reappoint KPMG LLP as Independent Auditor of the Company and to authorise the Directors to determine their
remuneration for the year to 31 March 2025.
Special Business
As special business to consider and, if thought fit, pass the following Resolutions in the case of Resolutions 8 and 10 as
Special Resolutions and Resolution 9 as an Ordinary Resolution:
Authority to Make Market Purchases of Shares
8. THAT, the Directors of the Company be and are hereby generally and unconditionally authorised in accordance
with Section 701 of the Companies Act 2006 (the “Act”), but without prejudice to the exercise of any such authority
prior to the date of this resolution, to make market purchases (within the meaning of Section 693(4) of the Act) of
Ordinary shares of 25p each in the capital of the Company (“Ordinary shares”), and to cancel or hold these Ordinary
shares in treasury provided that:-
i. the maximum aggregate number of Ordinary shares hereby authorised to be purchased shall be an aggregate
of 7,726,402 Ordinary shares, being 14.99% of the issued Ordinary share capital of the Company (excluding
treasury shares) as at the date of approval of this notice;
ii. the minimum price which may be paid for an Ordinary share is 25p (exclusive of expenses);
iii. the maximum price (exclusive of expenses) which may be paid for an Ordinary share shall be not more than the
higher of (i) 5% above the average market values of the shares taken from the Daily Official List of the London
Stock Exchange for the 5 business days before the purchase is made or that stipulated by Article 5(1) of the
Commission Regulation (EC) No. 2273/2003 and, (ii) the higher of the price of the last independent trade and
the highest current independent bid on the trading venue where the purchase is carried out; and
iv. unless renewed, the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of
the Company in 2025 or on 30 September 2025, whichever is earlier, save that the Company may, prior to such
expiry, enter into a contract to purchase Ordinary shares which will or may be completed or executed wholly or
partly after the expiration of such authority and may make a purchase of Ordinary shares pursuant to any
such contract:
Notice of Annual General Meeting
abrdn New India Investment Trust plc 95
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
Authority to Allot Shares
9. THAT, in substitution for any existing authority under Section 551 of the Companies Act 2006 (the “Act”), but without
prejudice to the exercise of any such authority prior to the date of this resolution, the Directors be and they are
hereby generally and unconditionally authorised, in accordance with Section 551 of the Companies Act 2006, to
allot equity securities (within the meaning of the Section 551 of the Act) up to an aggregate nominal amount of
£1,288,592 (representing approximately 10% of the Company's issued Ordinary share capital as at the date of
approval of this notice) during the period commencing on the date of the passing of this resolution and expiring at
the conclusion of the Annual General Meeting of the Company in 2025 or on 30 September 2025, whichever is
earlier, but so that this authority shall allow the Company to make, before the expiry of this authority, offers or
agreements which would or might require relevant securities to be allotted after such expiry and notwithstanding
such expiry, the Directors may allot relevant securities in pursuance of any such offers or agreements.
Disapplication of Pre-emption Rights
10. THAT, subject to the passing of Resolution 9 above (“the Section 551 resolution”) and in substitution for any existing
authority under Sections 570 and 573 of the Companies Act 2006 (the “Act”) but without prejudice to the exercise of
any such authority prior to the date of this resolution, the Directors of the Company be and are hereby generally and
unconditionally authorised in accordance with Sections 570 and 573 of the Act to allot equity securities (within the
meaning of Section 560 of the Act) either pursuant to the Section 551 resolution or by way of a sale of treasury
shares, in each case for cash as if Section 561(1) of the Act did not apply to such allotment, provided that this power
shall be limited to the allotment of equity securities:
i. (otherwise than pursuant to sub-paragraph (ii) below) up to an aggregate nominal amount of £1,288,592
(representing approximately 10% of the Company's issued Ordinary share capital, excluding treasury shares, as
at the date of approval of this notice);
ii. in connection with or the subject of an offer or invitation, open for acceptance for a period fixed by the Directors,
to holders of Ordinary shares and such other equity securities of the Company as the Directors may determine
on the register of members on a fixed record date in proportion (as nearly as may be) to their respective
holdings of such securities, (but subject to such exclusions, limits or restrictions or other arrangements as the
Directors of the Company may consider necessary or appropriate to deal with treasury shares, fractional
entitlements, record dates or legal, regulatory or practical problems in or under the laws of, or requirements of,
any regulatory body or any stock exchange in any territory or otherwise howsoever); and
iii. at a price per Ordinary share which represents a premium to the prevailing NAV per Ordinary share from time
to time (as determined by the Directors and excluding treasury shares).
Such power shall expire at the conclusion of the Annual General Meeting of the Company in 2025 or on 30
September 2025, whichever is earlier, but so that this power shall enable the Company to make an offer or
agreement before such expiry which would or might require equity securities to be allotted after such expiry and the
Directors of the Company may allot equity securities in pursuance of any such offer or agreement as if such expiry
had not occurred.
By order of the Board
abrdn Holdings Limited
Company Secretary
Registered Office
280 Bishopsgate
London EC2M 4AG
13 June 2024
96 abrdn New India Investment Trust plc
Notes
i. A shareholder entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend,
speak and vote instead of him/her or on his/her behalf at the Meeting. A proxy need not be a shareholder. The
shareholder may appoint more than one proxy, provided that each proxy is appointed to attend, speak and
vote in respect of a different share or shares. If you wish your proxy to speak on your behalf at the meeting, you
will need to appoint your own choice of proxy (not the Chairman of the meeting) and give instructions directly to
them. Appointing a proxy will not prevent a shareholder from attending in person and voting at the meeting. A
proxy form which may be used to make such appointment and give proxy instructions accompanies this notice.
If you do not have a proxy form and believe that you should, or if you would like to appoint more than one proxy,
please contact the Company's Registrars, Computershare Investor Services PLC, on 0370 707 1153. In the case
of joint holders, the vote of the first named in the register of members of the Company who tenders a vote,
whether in person or by proxy, shall be accepted to the exclusion of the votes of other joint holders.
ii. To be valid, the appointment of a proxy, and the original or duly certified copy of the power of attorney or other
authority, if any, under which it is signed or authenticated, should be sent to the Company’s Registrars,
Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZY so as to arrive not less
than 48 hours (excluding non-working days) before the time fixed for the Meeting.
iii. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only
those shareholders registered in the register of members of the Company not later than 6.30pm on the date
two days (excluding non-working days) before the time fixed for the meeting (or, if the meeting is adjourned,
registered in the register of members not later than 6.30pm on the date two days (excluding non-working days)
before the time fixed for the adjourned meeting) shall be entitled to attend or vote at the meeting in respect of
the number of Ordinary shares registered in their name at that time. In each case, changes to entries on the
register of members of the Company after that time shall be disregarded in determining the rights of any
person to attend or vote at the meeting.
iv. Any shareholder holding 3% or more of the total voting rights of the Company who appoints a person other than
the Chairman of the meeting as their proxy will need to ensure that both he or she and their proxy comply with
their respective disclosure obligations under the UK Disclosure Guidance and Transparency Rules.
v. CREST members who wish to appoint a proxy or proxies by utilising the CREST electronic proxy appointment
service may do so for the meeting and any adjournment(s) thereof by utilising the procedures described in the
CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members
who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate action on their behalf.
vi. In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a
“CREST Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited's
(“EUI”) specifications and must contain the information required for such instructions, as described in the CREST
Manual. The message must be transmitted so as to be received by the issuer's agent (3RA50) no later than 48
hours before the time of the meeting or any adjournment. For this purpose, the time of receipt will be taken to be
the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which
the issuer's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
vii. CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI
does not make available special procedures in CREST for any particular messages. Normal system timings and
limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the
CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored
member or has appointed a voting service provider(s), to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the
CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST
sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual
concerning practical limitations of the CREST system and timings.
Notice of Annual General Meeting
Continued
abrdn New India Investment Trust plc 97
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
viii. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
ix. In order to facilitate voting by corporate representatives at the Meeting, arrangements will be put in place at the
meeting so that (i) if a corporate shareholder has appointed the Chairman of the meeting as its corporate
representative to vote on a poll in accordance with the directions of all of the other corporate representatives
for that shareholder at the meeting then, on a poll, those corporate representatives will give voting directions to
the Chairman and the Chairman will vote (or withhold a vote) as corporate representative in accordance with
those directions; and (ii) if more than one corporate representative for the same corporate shareholder attends
the meeting but the corporate shareholder has not appointed the Chairman of the meeting as its corporate
representative, a designated corporate representative will be nominated from those corporate representatives
who attend, who will vote on a poll, and the other corporate representatives will give voting directions to that
designated corporate representative. Corporate shareholders are referred to the guidance issued by the
Institute of Chartered Secretaries and Administrators on proxies and corporate representatives (icsa.org.uk), for
further details of this procedure. The guidance includes a sample form of representation letter if the Chairman is
being appointed as described in (i) above.
x. A person to whom this notice is sent who is a person nominated under Section 146 of the Companies Act 2006 to
enjoy information rights (a "Nominated Person") may, under an agreement between him/her and the
shareholder by whom he/she was nominated, have a right to be appointed (or to have someone else
appointed) as a proxy for the Meeting. If a Nominated Person has no such proxy appointment right or does not
wish to exercise it, he/she may, under any such agreement, have a right to give instructions to the shareholder
as to the exercise of voting rights. The statements of the rights of members in relation to the appointment of
proxies in Notes (i) and (ii) above do not apply to a Nominated Person. The rights described in those Notes can
only be exercised by registered members of the Company.
xi. The terms of appointment of the Directors of the Company are available for inspection on any day (except
Saturdays, Sundays and bank holidays) from the date of this notice of until the date of the meeting during usual
business hours at the registered office of the Company and will, on the date of the Meeting, be available for
inspection at the venue of the Meeting for 15 minutes prior to, and at, the Meeting.
xii. Shareholders are advised that, unless otherwise stated, any telephone number, website or email address which
may be set out in this notice of Annual General Meeting or in any related documents (including the proxy form)
is not to be used for the purposes of serving information or documents on, or otherwise communicating with, the
Company for any purposes other than those expressly stated.
xiii. Following the Meeting, the results of the voting at the meeting and the numbers of proxy votes cast for and
against and the number of votes actively withheld in respect of each of the resolutions will be announced via a
Regulatory Information Service and placed on the Company’s website: abrdnnewindia.co.uk
xiv. Further information regarding the meeting is available from: abrdnnewindia.co.uk
xv. Under Section 338 of the Companies Act 2006, members may require the Company to give to members of the
Company entitled to receive this notice of meeting, notice of a resolution which may properly be moved and is
intended to be moved at the meeting. Under Section 338A of that Act, members may request the Company to
include in the business to be dealt with at the meeting any matter (other than a proposed resolution) which may
properly be included in the business.
98 abrdn New India Investment Trust plc
xvi. It is possible that, pursuant to requests made by members of the Company under Section 527 of the Companies
Act 2006, the Company may be required to publish on a website a statement setting out any matter relating to:
(i) the audit of the Company’s accounts (including the auditor’s report and the conduct of the audit) that are to
be laid before the meeting: or (ii) any circumstances connected with an auditor of the Company ceasing to hold
office since the previous meeting at which annual accounts and reports were laid in accordance with Section
437 of the Companies Act 2006. The Company may not require the members requesting any such website
publication to pay its expenses in complying with Sections 527 or 528 of the Companies Act 2006. Where the
Company is required to place a statement on a website under Section 527 of the Companies Act 2006, it must
forward the statement to the Company’s auditor not later than the time when it makes the statement available
on the website. The business which may be dealt with at the meeting includes any statement that the Company
has been required under Section 527 of the Companies Act 2006 to publish on a website.
xvii. As at 13 June 2024 (being the last practicable date prior to publication of this notice) the Company’s issued
share capital comprised 51,543,712 Ordinary shares of 25p each with voting rights and 7,526,428 shares in
treasury. Each Ordinary share carries the right to one vote at a general meeting of the Company. Accordingly,
the total number of voting rights in the Company was 51,543,712 as at 13 June 2024.
xviii. If the law or Government guidance so requires at the time of the meeting, the Chairman will limit, in his sole
discretion, the number of individuals in physical attendance at the meeting in order to ensure the safety of those
attending the meeting.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the action you should take, you are
recommended to seek your own financial advice from your stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under
the Financial Services and Markets Act 2000 (as amended by the Financial Services Act 2012) if you are in the United Kingdom or, if not, from another
appropriately authorised financial adviser. If you have sold or otherwise transferred all your Ordinary shares in abrdn New India Investment Trust plc, please
forward this document, together with any accompanying documents, immediately to the purchaser or transferee, or to the stockbroker, bank or agent
through whom the sale or transfer was effected for onward transmission.
Notice of Annual General Meeting
Continued
abrdn New India Investment Trust plc 99
Strategic Report
Governance
Overview
General Portfolio
Corporate
Information
Financial Statements
abrdn
abrdn plc, which is a company whose shares are admitted
to listing on the London Stock Exchange.
AIC
The Association of Investment Companies.
Alternative Investment Fund Managers
Directive or AIFMD
The Alternative Investment Fund Managers Directive is
European legislation which created a European-wide
framework for regulating managers of alternative
investment funds. It is designed to regulate any fund which
is not a UCITS fund and which is managed and/or
marketed in the EU. The Company has been designated
as an alternative investment fund which is subject to the
Alternative Investment Fund Managers Directive.
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.
Benchmark
MSCI India Index (sterling adjusted).
Company
abrdn New India Investment Trust plc (formerly Aberdeen
New India Investment Trust PLC, until 31 March 2023).
Discount
The amount by which the market price per share of an
investment trust is lower than the NAV per share. The
discount is normally expressed as a percentage of the
NAV per share.
Investment Manager
abrdn Asia Limited, a wholly owned subsidiary of abrdn.
Manager
abrdn Fund Managers Limited, a wholly owned subsidiary
of abrdn, has been appointed as the alternative
investment fund manager of the Company. The
Manager is authorised and regulated by the Financial
Conduct Authority.
Leverage
For the purposes of the Alternative Investment Fund
Managers Directive, leverage is any method which
increases the Company’s exposure, including the
borrowing of cash and the use of derivatives. It is
expressed as a ratio between the Company’s exposure
and its NAV and can be calculated on a gross and a
commitment method. Under the gross method, exposure
represents the sum of the Company’s positions after the
deduction of Sterling cash balances, without taking into
account any hedging and netting arrangements. Under
the commitment method, exposure is calculated without
the deduction of Sterling cash balances and after
certain hedging and netting positions are offset
against each other.
Net Asset Value/NAV/Adjusted NAV
The value of total assets less liabilities. Liabilities for this
purpose include current and long-term liabilities. The net
asset value divided by the number of shares presently in
issue produces the basic net asset value per share.
The Adjusted NAV is the Company’s NAV after adding
back all Indian capital gains tax paid or accrued in respect
of realised and unrealised gains made on investments.
Net Gearing/(Cash)
Net gearing/(cash) is calculated by dividing total assets
(as defined below) less cash or cash equivalents by
shareholders’ funds expressed as a percentage. This is in
accordance with the AIC guidance “Gearing Disclosures
post RDR”.
Ongoing Charges
Ratio of expenses as a percentage of average daily
shareholders’ funds calculated as per the AIC’s industry
standard method.
Premium
The amount by which the market price per share of an
investment trust exceeds the NAV per share. The premium
is normally expressed as a percentage of the NAV
per share.
Price/Earnings or PE Ratio
The ratio is calculated by dividing the middle-market price
per share by the earnings per share. The calculation
assumes no change in earnings but in practice the
multiple reflects the stock market’s view of a company’s
prospects and profit growth potential.
Glossary of Terms
100 abrdn New India Investment Trust plc
Prior Charges
The name given to all borrowings including debentures,
loan and short term loans and overdrafts that are to be
used for investment purposes, reciprocal foreign currency
loans, currency facilities to the extent that they are drawn
down, index-linked securities, and all types of preference
or preferred capital and the income shares of split capital
trusts, irrespective of the time until repayment.
Total Assets
Total assets as per the balance sheet less current liabilities
and the deferred tax liability on Indian capital (before
deducting prior charges as defined above).
Total Return
NAV total return involves investing the dividend in the NAV
of the Company on the date on which that dividend goes
ex-dividend. Share price total return involves reinvesting
the dividend in the share price of the Company on the
date on which that dividend goes ex-dividend.
Glossary of Terms
Continued
abrdn New India Investment Trust plc 101
Directors
Michael Hughes (Chairman)
David Simpson (Senior Independent Director)
Andrew Robson (Chairman of the Audit Committee)
Rebecca Donaldson (Chairman of the Management
Engagement Committee)
Company Secretaries
abrdn Holdings Limited
1 George Street
Edinburgh EH2 2LL
Registered Office and Company Number
280 Bishopsgate London EC2M 4AG
Registered in England & Wales under company
number 02902424
Website
abrdnnewindia.co.uk
Points of Contact
The Chairman or Company Secretaries at the
Registered Office of the Company.
Email: new.india@abrdn.com
Legal Entity Identifier
549300D2AW66WYEVKF02
United States Internal Revenue Service
FATCA Registration Number (“GIIN”)
U2I09D.99999.SL.826
abrdn Social Media Accounts
Twitter: @abrdnTrusts
LinkedIn: abrdn Investment Trusts; abrdn New India
Investment Trust plc
Alternative Investment Fund Manager
abrdn Fund Managers Limited
280 Bishopsgate
London EC2M 4AG
Authorised and regulated by the Financial Conduct
Authority
Investment Manager
abrdn Asia Limited
7 Straits View
#23-04 East Tower
Marina One
Singapore 018936
Registrars (for direct shareholders)
Computershare Investor Services PLC
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: 0370 707 1153
(Lines are open Monday to Friday from 8.30am – 5.30pm,
excluding public holidays in England & Wales. Charges for
‘03’ numbers are determined by the caller’s service
provider. Calls may be recorded and monitored randomly
for security and training purposes.)
Website: uk.computershare.com/investor
E-mail is available via the website
Independent Auditor
KPMG LLP
15 Canada Square
London E14 5GL
Depositary
BNP Paribas London Branch (formerly BNP Paribas Trust
Corporation UK Limited until 31 May 2024)
10 Harewood Avenue
London NW1 6AA
Stockbrokers
Winterflood Securities Limited
The Atrium Building
Cannon Bridge
25 Dowgate Hill
London EC4R 2GA
Additional Shareholder Information
For more information visit abrdnnewindia.co.uk
abrdn.com