aberdeen-newindia.co.uk
Aberdeen New India
Investment Trust PLC
Annual Report 31 March 2022
Seeking world-class, well governed companies at the heart of India’s growth
Bagmane Tech Park in Bangalore is a
software technology park equipped with
modern facilities in a lake setting.
Aberdeen New India Investment Trust PLC 1
“There are plenty of reasons to be upbeat
about India’s long-term outlook.”
Hasan Askari, Chairman
“We have taken steps to reposition and
refresh the portfolio with a focus on
improving near-term performance ”
Kristy Fong and James Thom
Investment Manager
2 Aberdeen New India Investment Trust PLC
Why Aberdeen New India Investment Trust PLC ?
Diversification
Single country funds offer
diversification benefits at
times when alternative
investments are highly
sought after.
Aspiration
India has a young, aspirational
population, which is expected
to become the largest in the
world by the 2030s.
Solar power
India has committed to
meeting half of its energy
needs from renewable sources
by 2030 and is the world’s
leading supplier of solar power
equipment.
Experience
abrdn has been investing in
India since 1990 and is one of
the largest foreign investors in
the country.
Engagement
abrdn’s investment team
regularly engages with
current and potential
investments.
Commitment
abrdn emphasises
Environmental, Social and
Governance (ESG) principles
in its investment process.
Why abrdn?
Exporting talent
India’s giant tech services
sector is helping global
companies go digital and
cloud-ready.
Building India
Urbanisation and an
infrastructure boom is set to
benefit property developers
and producers of materials
such as cement.
Global reach
India has a growing number of
international companies.
India is highly rated in the
World Bank’s ranking by
“ease of doing business”.
Aberdeen New India Investment Trust PLC 3
Share price total return
A
Net asset value total return
A
+3.7% +11.2%
2021 +65.6% 2021 +52.7%
Ongoing charges ratio
A
MSCI India Index total return
B
1.06% +23.9%
2021 1.16% 2021 +59.1%
Discount to net asset value
A
19.4%
2021 13.6%
A
Alternative Performance Measure (see pages 87 and 88).
B
Sterling adjusted.
Net asset value per Ordinary share Mid-market price per Ordinary share
At 31 March – pence At 31 March – pence
490.0
531.9
411.4
627.1
697.3
2018 2019 2020 2021 2022
426.0
461.0
328.0
542.0
562.0
2018 2019 2020 2021 2022
Performance Hi
g
hli
g
hts
4 Aberdeen New India Investment Trust PLC
Overview
Performance Highlights 3
Financial Highlights and Financial Calendar 5
Strategic Report
Chairman’s Statement 8
Investment Manager’s Review 12
Overview of Strategy 15
Promoting the Success of the Company 21
Performance 23
Portfolio
Ten Largest Investments 28
Portfolio 29
Sector Analysis 31
Currency Analysis 32
Our Investment Manager’s ESG Process 33
abrdn’s ESG Engagement 34
Investment Case Studies 38
Governance
Board of Directors 42
Directors’ Report 45
Audit Committee’s Report 52
Directors’ Remuneration Report 55
Statement of Directors’ responsibilities in respect of the
Annual Report and financial statements 58
Independent Auditor’s Report to the Members of
Aberdeen New India Investment Trust PLC 59
Financial Statements
Statement of Comprehensive Income 66
Statement of Financial Position 67
Statement of Changes in Equity 68
Statement of Cash Flows 69
Notes to the Financial Statements 70
Alternative Performance Measures 87
Alternative Investment Fund Managers Directive
Disclosures (unaudited) 89
Corporate Information
Information about the Manager 91
Investor Information 93
General
Notice of Annual General Meeting 97
Glossary of Terms 102
Contact Addresses 105
Contents
Aberdeen New India Investment Trust PLC 5
Financial Highlights
31 March 2022 31 March 2021 % change
Equity shareholders’ funds (net assets) £403,995,000 £366,106,000 +10.3
Market capitalisation £325,607,000 £316,448,000 +2.9
Share price (mid market) 562.00p 542.00p +3.7
Net asset value per Ordinary share 697.30p 627.05p +11.2
Discount to net asset value
A
19.4% 13.6%
Net gearing
A
5.5% 5.8%
Total return per share 69.64p 216.25p
Operating costs
Ongoing charges ratio
A
1.06% 1.16%
A
Considered to be an Alternative Performance Measure. See pages 87 and 88 for further information.
Financial Calendar
Financial year end
31 March 2022
Annual General Meeting
28 September 2022
Expected announcement of results for year
ended 31 March 2023
June 2023
Financial Hi
g
hli
g
hts and Financial Calendar
6 Aberdeen New India Investment Trust PLC
Strategic
Report
India is an enormous country with
tremendous consumer spending power and
a highly digitalised economy. Favourable
demographics, including a younger
population and an expanding middle class,
and relative stability make for a solid long-
term growth story.
Paytm is a holding owned by the Company.
Aberdeen New India Investment Trust PLC 7
8 Aberdeen New India Investment Trust PLC
Dear Shareholder,
Overview
For the year ended 31 March 2022 (the “Year”), your
Company’s net asset value (“NAV”) increased by 11.2% in
total return terms. By comparison, the Company’s
Benchmark (see Glossary on page 102) rose by 23.9% in
sterling total return terms. Accompanied by a widening of
the Company’s discount from 13.6% to 19.4% as at 31
March 2022, the Company’s share price total return was
only 3.7% for the Year.
The positive performance of Indian equities masked the
challenging conditions that the country endured over the
Year. At the start, India was facing a devastating health
crisis due to Covid-19, before signs of recovery emerged
in the economy as large swathes of the country re-
opened. Unfortunately, market volatility held back the
portfolio’s absolute return in the second half as the conflict
in Ukraine sent energy and commodity prices surging. Not
only did this hurt India, as a net energy importer, but it also
meant that positive stock fundamentals were largely
ignored.
Against this backdrop, cyclical and value stocks
outperformed their quality peers that are favoured by
your Manager. The portfolio’s financial holdings, including
HDFC Bank and Kotak Mahindra Bank, had a disappointing
run, as they lagged the higher-growth companies in the
broader market. Not holding energy as well as metals and
mining companies negatively affected performance in
the second half of the Year. It is worthwhile highlighting
that your Manager’s investment style, which focuses on
quality companies, often lags in bull markets and
outperforms in down markets, which has held back the
Company’s performance over the past two years.
Nonetheless, your Manager has taken steps to reposition
and refresh the portfolio with a focus on improving near-
term performance. The Manager’s Report on pages 12 to
14 provides further details on how the portfolio performed
and how the Manager is adapting to changing market
dynamics and finding opportunities where valuations
appear to have been overly downgraded.
At the start of the Year, India struggled with a Covid-19
wave resulting in daily cases reportedly exceeding
400,000 at the peak. The nation’s healthcare system was
pushed to the brink and, unfortunately, the crisis extracted
a heavy human toll. Thankfully more than 60% of the
population has some protection against the disease now
while medical facilities now have an adequate supply of
beds and oxygen. When the third wave of infection arrived
in January 2022, associated with the Omicron variant,
economic activity in India continued without any
significant hindrance. A rebound in factory activity,
industrial production growth and higher levels of goods
and services tax collections pointed to a path of recovery
to pre-Covid levels.
One encouraging development emerged in the real
estate sector. Following a lengthy downturn, India’s
housing market has been signalling a recovery, with
homes becoming more affordable, which resulted in
gains for the Company’s holdings in Prestige Estates and
Godrej Properties.
Other sectors contributing to the Company’s solid
absolute performance included information technology
and healthcare, with the former represented by Mphasis
and Infosys and the latter by Fortis Healthcare which
profited from the vaccine roll-out (see the case studies on
pages 38 and 39).
The major development during the second half of the
Year was Russia’s invasion of Ukraine: the two countries
supply a host of vital commodities to the world, ranging
from wheat to barley and copper to nickel. Fears of
disruption sent prices of those commodities and
associated products soaring, alongside oil, stoking global
inflation fears. While India is almost self-sufficient in its
food supply, it is a net importer of oil and elevated energy
prices are gradually adding to the country’s import bills.
Higher input costs, related to rising commodity prices, are
affecting margins for the portfolio’s quality holdings in the
consumer sector such as Hindustan Unilever. Several of
these consumer companies have turned cautious in their
outlook, flagging expected slowdowns in the volume of
fast-moving consumer goods as Indian households
prioritise essentials. In light of higher-for-longer
commodity prices, your Manager has taken another look
at the energy and metals and mining sectors, and towards
the end of the Year, purchased a low-cost aluminium and
copper stock, Hindalco Industries
.
Chairman’s Statement
Aberdeen New India Investment Trust PLC 9
The Year also saw the Company investing in several e-
commerce stocks, including FSM E-Commerce (“Nykaa”)
and Zomato, as well as diversifying into smaller cap
opportunities such as leading health insurer Star Health
and Allied Insurance and affordable housing provider
Aptus Value Housing Finance.
Another notable event during the Year was a shift in India’s
stance in its climate goal commitments. After years of
avoiding making a firm commitment in terms of carbon
reduction targets, India has publicly pledged to achieve
net zero emissions by 2070. It plans to source 50% of its
energy requirements from renewable sources by 2030,
which bodes well for the further development of
alternative sources of power. The portfolio already has
exposure to quality names that are destined to play an
integral role in India’s shift towards green energy in the
coming decades. One example is the Power Grid
Corporation of India, the country’s largest electric power
transmission utility.
Proposed introduction of conditional
tender offer
The Board announced on 24 March 2022 its intended
introduction of a five-yearly performance-related
conditional tender offer (the “Conditional Tender Offer”).
The Board remains concerned about the relative
underperformance of the Company’s net asset value
(“NAV”) recently, as compared to its Benchmark.
Following discussions with the Manager, the Board has
decided that, should the adjusted NAV total return
underperform the Company’s Benchmark over the five
year period from 1 April 2022 (the “Assessment Period”),
then shareholders will be offered the opportunity to realise
up to 25 per cent of their investment for cash at a level
close to NAV. Five years has been chosen as this best
corresponds with the Manager’s typical investment
time horizon.
In order to align the Company’s continuation vote with the
Assessment Period for the Conditional Tender Offer, the
Board proposes to move from the Company’s current
cycle of annual continuation votes to five-yearly
continuation votes (together with the Conditional Tender
Offer, the “Proposals”). While there is no formal
requirement for shareholders to vote on the introduction
of the five-yearly Conditional Tender Offer, shareholders’
approval is required to amend the Company’s articles of
association in order to replace the annual continuation
vote with a continuation vote at least every five years and,
accordingly a resolution will be put to shareholders at the
next AGM. The Proposals are subject to the passing, at the
AGM on 28 September 2022, of ordinary Resolution 8, as
the Company’s annual continuation vote, and special
Resolution 12, in connection with the change to the articles
of association. In addition, any Conditional Tender Offer
will be subject to the passing of the five-yearly
continuation vote.
Board
The Board was pleased to announce the appointment of
David Simpson as a Director of the Company with effect
from 1 November 2021 following a search conducted by
an independent recruitment consultancy. David is involved
in India in his capacity as a non-executive director of ITC
Limited (”ITC”), a major listed Indian company. ITC has a
diversified presence in FMCG, hotels, packaging, specialty
paper and agri-business. ITC represented 2.3% of the
Company’s net assets at 31 March 2022. David has
agreed that he will recuse himself from all discussions
regarding ITC to avoid any potential conflict of interest.
The Company also announced, with effect from 1 August
2022, the appointment of Andrew Robson as a Director of
the Company, also undertaken by an independent
recruitment consultancy. Andrew is a Chartered
Accountant with expertise in investment banking, as a
finance director, and brings to the Company considerable
investment trust experience. The other Directors are
delighted to welcome Andrew to the Board and very
much look forward to working with him.
Stephen White will be retiring from the Board at the
conclusion of the AGM after serving nine years as a
Director, including nearly all of his tenure as Chairman of
the Audit Committee. The other Directors would like to
thank Stephen for his considerable contribution to the
Company, including the particular experience he brought
as an investment professional to the Board’s deliberations.
Andrew will succeed Stephen as Audit Committee
Chairman following the AGM.
After serving as a Director of the Company since 2012 and
as Chairman for eight years, I shall also be stepping down
from the Board of the Company at the AGM. My
successor as Chairman is Michael Hughes while David
Simpson replaces Michael as Senior Independent Director.
Gearing
As at 31 March 2022, the full £30 million had been drawn of
the total available bank loan facility provided by Royal
Bank of Scotland International (London Branch) (31
March 2021 - £24m), which resulted in net gearing of 5.5%,
as compared to 5.8% at 31 March 2021. 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.
10 Aberdeen New India Investment Trust PLC
Discount and Share Buybacks
The Board continues to monitor actively the discount of
the Ordinary share price to the NAV per Ordinary share
(including income) 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, as global markets became more unsettled, the
discount to NAV widened from 13.6% to 19.4% as at
31 March 2022.
The Company bought back into treasury 448,201 (2021 -
335,653) Ordinary shares, resulting in 57,937,127 shares in
issue with voting shares and an additional 1,133,013
shares held in treasury at 31 March 2022. Between the
year end and the date of this Report a further 360,030
shares were bought back into treasury resulting in
57,577,097 shares in issue with voting shares and 1,493,043
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.
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 £14.5m (2021 - £13.6m) at 31 March 2022,
equivalent to a reduction in the NAV per share of 25.1p
or 3.5%.
Continuation of the Company
Your Board considers that the Company’s investment
objective remains relevant and appropriate and, in view of
its longer term performance record, recommends that
Shareholders vote in favour of Ordinary resolution 8 at
the AGM, to allow the Company to continue as an
investment trust.
Annual General Meeting
In a return to the familiar format before the onset of
Covid-19, the AGM will be held in person at 12.30pm in
Bow Bells House, 1 Bread Street, London EC4M 9HH on
Wednesday 28 September 2022. The AGM provides
shareholders with an opportunity to ask any questions that
they may have of either the Board or the Manager. 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 Manager, in
advance, by email to new.india@abrdn.com.
Outlook
Even before Covid-19 reached its borders, India’s growth
outlook had been muted as the country slowly adapted to
new structural reforms. At the moment, I am encouraged
by India’s ability to bring the pandemic under control and
the government’s longer term commitment to guide the
country towards a US$5 trillion economy, making it an
economic powerhouse of the future.
There are some areas that still merit caution. Firstly, India’s
large informal economy, which has borne the brunt of the
Covid-19 and economic crises since 2020, is taking longer
to rebound and secondly, overall unemployment remains
high. I am confident that the situation will improve from
hereon as the Indian economy continues to enjoy broad
policy support from the government. Economists are
expecting the country’s growth trajectory to remain
one of the fastest among major economies in the
coming years.
Importantly, in May 2022, for the first time in two years, the
Reserve Bank of India increased interest rates to combat
soaring consumer prices, particularly for food and fuel,
with inflation at an 18 month high and India no longer as
isolated as it was from the effects of higher global prices.
Indian households face a challenge to stretch their
budgets further as food price inflation is expected to
persist due to higher transportation costs, supply-side
bottlenecks and weakness in the jobs market.
However, there are plenty of reasons to be upbeat about
India’s long-term outlook. It is an enormous country with
tremendous consumer spending power and a highly
digitalised economy. Favourable demographics, including
a younger population and an expanding middle class, and
relative stability make for a solid long-term growth story.
Your Manager continues to look for good quality, well-
managed companies that are going to benefit from
India’s economic expansion and prosperity.
Chairman’s Statement
Continued
Aberdeen New India Investment Trust PLC 11
India remains a magnet for international companies stuck
in low-growth markets of their own. A considerable
degree of India’s economic growth is a consequence of
the commitment by these companies to the country. The
list is long and illustrious but in recent years, all has not
been sweetness and light. The shifting regulatory
landscape is a constant reminder of the quixotic
approach to regulation that Indian administrations have
engaged in. But of greater concern is growing evidence of
bias on the part of the current administration to support
domestic players to the exclusion of international
investors. The current takeover of Holcim’s Indian
operations by JSW Steel is billed as ‘Modi’s bias towards
nationalistic companies’. Nationalism may be part of Mr
Modi’s domestic playbook but has no place in a world of
free trade and investment and has to be contrary to
India’s hopes of becoming a credible player in a
global context.
Envoi
It has been a great privilege for me to serve on the Board
of this Company for ten years, and as Chairman for eight.
It is universally accepted that the directors of a public
company are there to act in the best interests of the
shareholders. It is also true that this is easier said than
done. But it is my hope that shareholders will look back
over the past decade and recognise that the Board has
sought consistently to promote and protect the interests
of its shareholders. A complete recital of the measures
instituted is not necessary but it is worth recording that a
performance linked incentive fee was removed as early
as 2014 on the basis that the Manager was paid
adequately enough to outperform. Two reductions in
management fee followed, a scheme of share buybacks
was begun and as reported above, a periodic
performance-related tender has been negotiated.
It is my hope that shareholders will take comfort from
these developments; safeguarding their interests is, and
will remain, a priority for this Board.
Hasan Askari
Chairman
30 June 2022
12 Aberdeen New India Investment Trust PLC
The Company’s net asset value (“NAV”) total return was
11.2% in sterling terms over the year ended 31 March 2022
(the “Year”), compared with the Benchmark’s total return
of 23.9%. In absolute terms, both the Benchmark and your
Company finished ahead of the wider emerging markets
asset class over the Year as Indian shares demonstrated
resilience in an increasingly volatile environment.
However, although your Company’s NAV gained over the
Year, the underperformance relative to the Benchmark is
disappointing. Such performance reflects the Company’s
long-term quality focus. Unlike the broader Indian market,
our portfolio companies, in aggregate, have historically
delivered consistent double-digit earnings growth. Their
environmental, social and governance (ESG) metrics are
also superior versus those comprising the Benchmark.
However, quality investing, as a style, often lags in bull
market conditions and outperforms in down markets. This
was evident from your Company’s performance over the
pandemic-hit period. The Company demonstrated
resilience during the down market in the year ending
March 2020. However, it lagged in the subsequent two
double-digit bull markets in the years ending March 2021
and March 2022, as quality fell out of favour amid bullish
market conditions and investors rotated into value stocks
and commodities. With market conditions becoming
more volatile this year, we believe quality stocks will return
to favour and our companies will deliver attractive risk-
adjusted returns over time.
Market and Performance review
It was a Year of two halves for Indian equities. Over the first
six months, Indian equities displayed remarkable resilience
despite a massive surge in Covid-19 cases due to the
emergence of the Delta variant. The outbreak slowed the
momentum of the country’s economic recovery and
dampened consumer sentiment severely, but the Indian
government resisted another countrywide lockdown such
as the one in 2020. Instead, it implemented targeted
mobility restrictions, which helped to cushion the impact of
the second wave. In this environment, the Indian stock
market outpaced most of its emerging and developed
market peers, building on the steep rally in 2020. Steady
corporate earnings further supported sentiment as
companies adapted to the resurgence of Covid-19 cases.
The Company’s NAV gained 20.3% during this first-half
period. Real estate was the best-performing sector thanks
to the housing turnaround, and your Company benefited
from the positions in property developers Godrej
Properties, Prestige Estates and, indirectly, for Piramal
Enterprises, which has a housing finance business. India
has experienced a sharp decline in home sales and
residential construction over the past few years, but a
combination of affordable home prices, favourable
mortgage rates, rising incomes and stamp duty rebates in
some states propelled a wider housing recovery.
Elsewhere, technology company Mphasis did well on the
back of record deal wins and bumper earnings, as the
sector benefited from healthy demand for cloud
migration and business transformation needs. Mphasis
carried that momentum into the second half and was the
top contributor to performance for the Year. We hold
these companies because their businesses are closely
aligned with India’s growth story, and we expect them to
outperform in the longer term.
Your Company’s total return, however, did not keep pace
with the Benchmark’s total return of 23.9% over the Year.
We held a more cautious view on the devastating
pandemic effects on the Indian economy and maintained
our bias towards defensive quality names in the consumer
staples sector, namely Hindustan Unilever, which we hold in
high regard given its solid balance sheet, distribution scale
and unrivalled portfolio of brands. Instead, cyclical steel
stocks, which we do not hold, outperformed on the back of
China’s removal of steel export rebates and price hikes.
Likewise in the financials sector, your Company’s core
bank holdings – HDFC, HDFC Bank and Kotak Mahindra –
lagged lenders that delivered faster growth. We prefer
banks that have a proven track record in lending. With
their strong, low-cost deposit franchise and digital
capabilities, we believe that our bank holdings will
continue to deliver steady growth and returns over
different cycles.
The largest stock detractor over the first half was Aegis
Logistics. Following a good run, shares of the oil and gas
logistics provider retreated when its liquefied petroleum
gas terminal business was hampered by cyclones and
Covid-19 disruptions delayed its growth projects. That
said, these one-off events should not affect longer-term
demand trends.
In the latter half of the Year, markets turned volatile on
inflation worries, which were exacerbated in the final
months by spiralling commodity prices due to the Russia-
Ukraine conflict. Earlier gains in the domestic equity
market were pared by uncertainties over India’s heavy
reliance on oil and certain commodities. Indian equities
ended the second half of the Year flat as beneficiaries of
energy and commodity inflation mitigated share price
corrections elsewhere. Against this backdrop, your
Company recorded negative returns for the period, and
this contributed to the bulk of the underperformance over
the Year. We outline the reasons for the
underperformance in the second half below.
Investment Mana
g
er’s Review
Aberdeen New India Investment Trust PLC 13
First, your Company has always preferred businesses that
are underpinned by long-term structural growth over
those that are subject to boom-bust cycles and/or are
beholden to government policies. As such, the Company
has an underweight to energy as well as metals and
mining stocks, which performed well in the commodity-
led inflationary environment. On the flip side, companies
such as Hindustan Unilever and UltraTech Cement
corrected on the back of margin concerns. However, we
note that both companies have demonstrated pricing
power and reported better-than-expected earnings after
the review period.
Second, your Company believes in investing in companies
backed by reputable promoter groups with a track record
of delivering value to all shareholders. The Company does
not hold energy and telecommunications conglomerate
Reliance Industries and the Adani group of companies. We
have been monitoring Reliance Industries’ efforts in
deleveraging and transformation towards building a
digital ecosystem and a clean energy play. However, we
continue to prefer Bharti Airtel and Power Grid Corporation
of India, which share similar growth drivers, and delivered
higher shareholder returns of 10% and 22%, respectively,
in the second half, outperforming Reliance Industries’ gain
of 5%. The telecommunications industry in India is today
effectively a duopoly between Reliance Jio and Bharti
Airtel, with a weak third player, Vodafone India. Bharti
Airtel, in our view, has a superior franchise and has been
delivering better earnings and returns on the back of
market share gains and tariff hikes. Power Grid, which
operates the country’s national electricity grid and
transmits about half of the electricity that is used
domestically, 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 transition
targets for the electricity sector.
Also hurting relative performance was the lack of
exposure to the Adani group of companies, including solar
power developer Adani Green Energy, whose share price
surged due to the company’s small free float – and not, we
believe, because of its fundamentals. We have not seen
such a meteoric rise in the share prices of our renewable
names, but we believe shareholders will be rewarded in
time. ReNew Energy, our newly added holding, generates
electricity from a mix of wind, solar and, more recently,
hydro power. We believe that ReNew has both scale and
clarity around its pipeline and is fully funded for its
capacity build-out. Management has also shown
discipline in bidding at renewable energy auctions.
Third, India was not immune to the rotation from growth to
value stocks amid growing expectations for central banks
to raise interest rates. We participated in a number of
initial public offerings (IPOs) last year as these are
attractive and differentiated business models that have a
long growth runway, given that internet penetration is still
at a nascent stage in India. We were mindful about
valuations and took initial toehold positions with a view of
adding on weakness. There were initial successes such as
Zomato and FSN E-Commerce (Nykaa), while fintech
players like Paytm and online insurance platform PB
Fintech (Policybazaar) have been under pressure since
listing. With the subsequent market volatility, we took the
opportunity to build up our position in Nykaa where we
have higher conviction. On the other hand, we exited
Paytm shortly due to rising regulatory concerns and
continued executive turnover that weakened the
investment thesis underpinning our purchase.
Separately, on the ESG front, we continued to regularly
engage with the companies held within your Company’s
portfolio to drive improvements on various issues. Over the
Year, we engaged with Godrej Properties and Prestige
Estates and were impressed by the quality of
management. We spoke with Godrej Properties about
improving its board independence and discussed how the
company could improve its MSCI ESG score. Similarly, we
encouraged Prestige Estates to improve its annual ESG
disclosures by aligning management incentives with the
company's performance.
Finally, a noteworthy event subsequent to the end of the
Year was the announcement of a merger of HDFC Bank
with HDFC through a share swap. The merged bank will be
more than twice the size of India’s next largest private
bank, creating a financial giant in one of Asia’s fastest-
growing countries. This transformational event comes at a
time when their share prices have lagged the market
despite the companies delivering consistent results. The
merger is earnings, book value and capital accretive, and
has minimal integration risks. As shareholders of both
HDFC and HDFC Bank, we are highly supportive of the
merger and are pleased that the boards and
management teams have taken such a significant step
that should boost shareholder value.
14 Aberdeen New India Investment Trust PLC
Strategy and Outlook
Looking ahead, we remain confident in our long-term
quality approach. The core of the portfolio continues to be
built around the highest quality stocks. That said, we have
taken steps to reposition the portfolio to reflect the
changing macro environment and where we see
attractive future opportunities such as renewable energy
and technology/internet as discussed above.
Over the past 12 months, we reduced our exposure to the
consumer staples sector by exiting lower conviction
holdings such as Jyothy Labs and Godrej Consumer. In
addition, we divested Gujarat Gas as rising input costs,
most notably in liquefied natural gas, will likely put
significant pressure on the company’s margins.
Conversely, we introduced Hindalco Industries, a vertically
integrated, low-cost aluminium and copper play. As a
global leader in automotive and can-aluminium sheets,
Hindalco is a clear beneficiary of the rising trend towards
lighter automotive weights for electric vehicles and can
better support lower emissions. It also stands to benefit
from a greater push for the use of recyclable materials.
At the same time, we adjusted the mix of holdings within
the financials sector to include ICICI Bank. In our view, the
lender has proven, on a fundamental basis, that it is firmly
back on a growth footing with its new management team,
sensible risk management and innovative digital
capability. This was funded with the sale of Axis Bank.
Within the insurance sector, we exited ICICI Prudential and
participated in the IPOs of leading health insurer
Star
Health and Allied Insurance and South India-based
affordable housing company
Aptus Value Housing Finance.
Elsewhere, we initiated Vijaya Diagnostic Centre, a
dominant player in the south of India that operates in a
highly fragmented market. Against this, we tidied up lower
conviction holdings Biocon, Bosch and Shree Cement.
Market conditions globally have become more volatile this
year. India is not immune to the turmoil. Policymakers have
the unenviable task of managing commodity-led inflation
without compromising the country’s economic recovery
from the Covid-19 crisis. The Reserve Bank of India revised
its initial dovish stance after the end of the Year and, in
May, raised its policy repo rate by 40 basis points to 4.4%.
Rising commodity prices and higher interest rates may
hinder earnings growth momentum, which could lead to
market wobbles, given that Indian equities are trading at a
premium. In these times of uncertainties, we expect our
portfolio holdings to demonstrate earnings and balance
sheet resilience relative to their peers. We remain
confident that our companies will deliver attractive risk-
adjusted returns over the long term.
Kristy Fong and James Thom
Investment Manager
30 June 2022
Investment Mana
g
er’s Review
Continued
Aberdeen New India Investment Trust PLC 15
Business Model
The business of the Company is that of an investment
company which continues to qualify as an investment
trust for UK capital gains tax purposes. The Directors do
not envisage any change either to this model or to the
Company’s activities in the foreseeable future.
Investment Objective
The Company aims to provide shareholders with long
term capital appreciation by investment in companies
which are incorporated in India, or which derive significant
revenue or profit from India, with dividend yield from the
Company being of secondary importance.
Investment Policy
The Company invests primarily in Indian equity securities.
Delivering the Investment Policy
Risk Diversification
The Company’s 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 also, 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’s portfolio will typically comprise in the
region of 25 to 50 holdings, but with due consideration
given to spreading investment risk.
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. Gearing is used in relation to 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, many of
the Company’s investments are denominated and quoted
in currencies other than Sterling, including, in particular,
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 2022.
Benchmark
The Company’s Benchmark is the MSCI India Index
(Sterling-adjusted).
Overview of Strate
g
y
16 Aberdeen 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 and share price return, 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 23 and a graph showing
NAV and share price total return performance against the Benchmark over the past five
years is shown on page 25.
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 24.
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 on page 5.
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: aberdeen-newindia.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 which it considers is likely to become
more relevant for the Company in the future, 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, any other emerging
risks, if and when they become material.
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 Strate
g
y
Continued
Aberdeen New India Investment Trust PLC 17
Description Mitigating Action
Market risk - falls in the prices of securities issued by Indian
companies, which may themselves be determined by local and
international economic, political and financial factors and
management actions.
The Investment Manager seeks to reduce market risk by investing
in a wide variety of companies with strong balance sheets and the
earnings power to pay increasing dividends. 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.
Foreign exchange - adverse movements in the exchange rate
between Sterling and the Rupee, as well as between other
currencies, affecting the overall value of the portfolio.
The Board monitors the Rupee/Sterling exchange rate and
reviews the currency impacts on both capital and income at each
meeting, although the Company did not hedge its foreign
currency exposure during the year.
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 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 does consider the
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.
Depositary - insolvency of the depositary or custodian or sub-
custodian, or a shortfall in the assets held by that depositary,
custodian or sub-custodian arising from fraud, operational
errors or settlement difficulties resulting in a loss of assets owned
by the Company.
The depositary, BNP Paribas Securities Services London Branch,
presents to the Board at least annually on the Company’s
compliance with the Alternative Investment Fund Managers
Directive (“AIFMD”). The Manager separately monitors the
activities of the depositary and reports to the Board on any
exceptions arising.
Financial and regulatory - the financial risks associated with the
portfolio could result in losses to the Company. In addition, failure
to comply with relevant regulation (including the Companies
Act, the Financial Services and Markets Act, the Alternative
Investment Fund Managers Directive, accounting standards,
investment trust regulations and the Listing Rules, Disclosure
Guidance and Transparency Rules and Prospectus Rules) may
have an adverse impact on the Company.
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.
18 Aberdeen New India Investment Trust PLC
Description Mitigating Action
Financial and regulatory (continued) 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 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.
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.
Promoting the Company
The Board recognises the importance of promoting the
Company to prospective investors both for improving
liquidity and enhancing the value and rating of the
Company’s shares. The Board seeks to achieve this
through subscription to, and participation in, the
promotional programme run by abrdn on behalf of all 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 purpose of the programme is both to communicate
effectively with existing shareholders and to gain new
shareholders with the aim of improving liquidity and
enhancing the value and rating of the Company’s shares
by reducing the discount at which they trade.
Communicating the long-term attractions of the
Company is key and therefore the Company also
supports abrdn investor relations programme which
involves regional roadshows, 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
2022, there were four 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
Overview of Strate
g
y
Continued
Aberdeen New India Investment Trust PLC 19
Environmental, Social and Human
Rights Issues
The Company has no employees as it is managed by
Aberdeen Standard 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 49 while the Manager’s ESG
engagement is set out on pages 33 to 37.
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.
Duration
The Company does not have a fixed life but ordinary
resolution 8, to continue the Company, will be put to
shareholders at the AGM. If special resolution 12, to
change the Company’s Articles of Association, is
approved, the continuation vote will be put to
shareholders next at the AGM in 2027 and at every fifth
AGM thereafter.
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
16 to 18 and the steps taken to mitigate these;
· a significant proportion of the expenses are proportional
to the Company’s NAV and will reduce if the NAV falls;
· the Directors regularly review the Company’s level of
gearing, including the financial modelling undertaken by
the Manager to establish what level of reduction in the
Company’s NAV would require to occur in order to
cause a breach in the covenants attached to the
Company’s £30m loan facility;
· the Company’s third party suppliers continuing to deliver
services to the Company in accordance with the
underlying agreements and not experiencing significant
operational difficulties in respect of the services
provided to the Company, although, if required,
alternative suppliers could be engaged to provide these
services at limited notice; and
· in advance of expiry in August 2022 of the Company’s
£30m loan the Company has entered 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.
In particular, the Board recognises that this assessment
makes the assumption that resolution 8, to continue the
Company, is passed at the AGM on 28 September 2022
as it has been previously. If special resolution 12, to change
the Company’s Articles of Association, is approved at the
AGM, the continuation vote will be put to shareholders
next at the AGM in 2027.
20 Aberdeen New India Investment Trust PLC
Accordingly, 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
making this assessment, the Board has considered in
particular the risk of a large economic shock, a continuing
period of significant stock market volatility, a significant
reduction in the liquidity of the portfolio or changes in
investor sentiment, and how these factors might affect the
Company’s prospects and viability in the future.
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 pages 8 to 11 and in the Investment Manager’s Report
on pages 12 to 14.
Hasan Askari,
Chairman
30 June 2022
Overview of Strate
g
y
Continued
Aberdeen New India Investment Trust PLC 21
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 (the “s172 Statement”). Under
section 172, 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 was comprised of either four of
five independent non-executive Directors with a broad
range of skills and experience across all major functions
that affect the Company. The Board retains responsibility
for taking all decisions relating to the Company’s
investment objective and policy, gearing, corporate
governance and strategy, and for monitoring the
performance of the Company’s service providers.
The Board’s philosophy is that the Company should
operate in a transparent culture where all parties are
provided with respect as well as the opportunity to offer
practical challenge and participate in positive debate
which is focused on the aim of achieving the expectations
of shareholders and other stakeholders alike. The Board
expects the Manager to act as a responsible steward of
the Company’s investments (see pages 33 to 37 for
further information). The Manager’s approach to
responsible investing may be found at
https://www.abrdn.com/en/responsible-investing
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 Its 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 Directors,
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
Directors meet with major shareholders in the absence of representatives of the Manager.
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 12 to 14 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 48.
Promotin
g
the Success of the Company
22 Aberdeen 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 Manager reports on a
quarterly basis on stewardship (including voting) issues.
Through engagement and exercising voting rights, the Investment Manager actively works with companies
to improve corporate standards, transparency and accountability.
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 33 to 39.
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 2022.
Proposed Conditional Tender Offer
The Board announced on 24 March 2022 its intended
introduction of a five-yearly performance-related
conditional tender offer; further information may be found
in the Chairman’s Statement on page 9.
Board
The Board, via the Nomination Committee, considered the
need to ensure continuity of governance in view of the
retirement of two Directors at the AGM in September
2022. During the year ended 31 March 2022, in order to
provide continuity, David Simpson was appointed as a
Director while, after the year end, Andrew Robson was
appointed a Director. In terms of leadership, Michael
Hughes, with six years’ experience as a Director, will
succeed Hasan Askari as Chairman of the Company.
Share buybacks
During the year the Company bought back into treasury
448,201 shares, providing a small accretion to the NAV per
share and a degree of liquidity to the market at times
when the discount to the NAV per share had widened
unusually. It is the view of the Board that this policy is in the
interest of all shareholders. The Board reached this
decision following its strategic review and decided that
continuing with limited share buybacks would be in
shareholders’ best interests.
Promotin
g
the Success of the Company
Continued
Aberdeen New India Investment Trust PLC 23
Performance (total return, in Sterling terms)
1 year 3 year 5 year 10 year
% return % return % return % return
Share price
A
+3.7 +22.2 +27.6 +153.7
Net asset value per Ordinary share
A
+11.2 +31.3 +43.2 +186.4
MSCI India Index (sterling adjusted) +23.9 +43.2 +61.7 +179.9
A
Considered to be an Alternative Performance Measure. See page 88 for further information.
Source: abrdn plc, Morningstar & Lipper.
Ten Year Financial Record
Year to 31 March 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Total income (£’000)
A
2,414 376 341 374 3,104 3,318 3,602 5,185 4,517 5,059
Per share (p)
Net revenue return/(loss) 0.20 (0.36) (0.39) (1.06) (0.28) (0.71) (0.35) 2.08 0.19 (0.28)
Dividends
B
n/a n/a n/a n/a n/a n/a n/a 1.00 n/a n/a
Total return/(loss) 24.75 (5.16) 121.94 (23.42) 125.81 2.12 41.90 (120.34) 216.25 69.64
Net asset value per share (p)
Basic 268.71 263.55 385.49 362.07 487.88 490.00 531.90 411.41 627.05 697.30
Shareholders’ funds (£’000) 158,726 155,680 227,708 213,874 288,190 289,444 314,196 241,583 366,106 403,995
A
Year 2013 reflects the consolidated amounts of the Company and its Subsidiary, years 2014 to 2022 reflects amounts relating to the Company only following the application of
IFRS 10 ‘Consolidated Financial Statements’ including the Amendments, ‘Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)(Investment Entity Amendments). 2017
reflects the transfer of securities to the Company from its Subsidiary.
B
2020 dividend represents 0.22p per share paid from revenue reserves and 0.78p per share paid from capital reserves.
Performance
24 Aberdeen New India Investment Trust PLC
Share Price Discount to NAV
Ten years ended 31 March 2022
-25%
-20%
-15%
-10%
-5%
0%
31/03/12 31/03/13 31/0 3/14 31/03/15 31/03/16 31/0 3/17 31/03/18 31/0 3/ 19 31/03/20 31/0 3/ 21 31/03/22
Performance
Continued
Aberdeen New India Investment Trust PLC 25
Total Returns of NAV and Share Price versus Benchmark total return
Ten years ended 31 March 2022 (rebased to 100 at 31 March 2012)
75
100
125
150
175
200
225
250
275
300
325
31/03/12 31/03/13 31/0 3/ 14 31/0 3/15 31 /03/16 31/0 3/17 31/03/18 31/03/ 19 31/03/ 20 31/03/21 31/0 3/22
Share Price NAV Benchmark
26 Aberdeen New India Investment Trust PLC
Portfolio
Aberdeen New India Investment Trust PLC 27
While the management of the Company’s
investments is not undertaken with any
specific instructions to exclude certain asset
types or classes, the Investment Manager
integrates environmental, social and
governance (“ESG”) considerations into the
research of each investee company as part
of the investment process.
28 Aberdeen New India Investment Trust PLC
As at 31 March 2022
Infosys
Housing Development Finance Corporation
One of India’s premier software
developers, it continues to impress with
its strong management, solid balance
sheet and sustainable business model.
A steady, well-managed financial
services conglomerate with leading
positions in mortgage finance, retail
banking, life insurance and asset
management, supported by a broad
distribution network, efficient cost
structure and balance sheet quality.
Tata Consultancy Services
ICICI Bank
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.
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.
Bharti Airtel
Hindustan Unilever
The leading telecom service provider
with a pan-India reach and
sophisticated customer base with higher
average mobile spending.
The largest fast-moving consumer goods
company (FMCG) in India, with an
unrivalled portfolio of brands, an
extensive distribution network
nationwide, and a long and successful
operational track record in the country.
Power Grid Corporation of India
Ultratech Cement
Forming the backbone of India’s
electricity infrastructure. It plans and
manages the national grid network,
along with several regional ones, and
transmits about half of the electricity
that is used domestically.
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 has given UltraTech a
cost advantage.
HDFC Bank
Kotak Mahindra Bank
Known to have the best retail banking
franchise in India, with a high quality
wholesale portfolio, solid underwriting
standards and a progressive digital
stance further strengthening its
competitive edge.
A full-service private-sector bank in India
that has good asset quality and a
relatively low level of non-performing
loans compared to many of its peers. It is
well positioned in an industry that offers
higher growth than most markets in
Asia, given the low level of
financial penetration.
Ten Lar
g
est Investments
Aberdeen New India Investment Trust PLC 29
As at 31 March 2022
Valuation Total assets
2022 2022
Company Industry £’000 %
Infosys Information Technology 48,301 11.1
Housing Development Finance Corporation Financials 38,570 8.9
Tata Consultancy Services Information Technology 32,056 7.4
ICICI Bank Financials 28,179 6.5
Bharti Airtel
A
Communication Services 21,758 5.0
Hindustan Unilever Consumer Staples 20,965 4.8
Power Grid Corporation of India Utilities 16,062 3.7
Ultratech Cement Materials 14,452 3.3
HDFC Bank Financials 13,319 3.1
Kotak Mahindra Bank Financials 12,815 3.0
Ten largest investments 246,477 56.8
MphasiS Information Technology 12,806 2.9
SBI Life Insurance Financials 12,131 2.8
Maruti Suzuki India Consumer Discretionary 11,966 2.8
Piramal Enterprises Financials 11,580 2.7
Container Corporation of India Industrials 11,353 2.6
Asian Paints Materials 11,253 2.6
Larsen & Toubro Industrials 11,229 2.6
ITC Consumer Staples 10,007 2.3
Fortis Healthcare Healthcare 9,490 2.2
Prestige Estates Projects Real Estate 8,011 1.8
Top twenty investments 356,303 82.1
Affle India Communication Services 8,003 1.8
Nestlé India Consumer Staples 6,410 1.5
Aegis Logistics Energy 6,392 1.5
Syngene International Healthcare 6,364 1.5
Crompton Greaves Consumer Electricals Consumer Discretionary 6,326 1.5
Godrej Properties Real Estate 5,871 1.4
Vijaya Diagnostic Centre Healthcare 5,686 1.3
FSN E-Commerce Ventures Consumer Discretionary 5,149 1.2
Renew Energy Energy 4,637 1.1
PB Fintech Financials 4,556 1.0
Top thirty investments 415,697 95.9
Portfolio
30 Aberdeen New India Investment Trust PLC
Portfolio
Continued
As at 31 March 2022
Valuation Total assets
2022 2022
Company Industry £’000 %
Sanofi India Healthcare 4,434 1.0
Info Edge Communication Services 4,361 1.0
Azure Power Utilities 4,094 0.9
Hindalco Industries Materials 3,035 0.7
Star Health & Allied Insurance Financials 2,865 0.7
Aptus Value Housing Finance Financials 2,323 0.5
Zomato Information Technology 2,178 0.5
Godrej Agrovet Consumer Staples 894 0.2
Total investments 439,881 101.4
Net current liabilities (before deducting prior charges)
B
(5,886) (1.4)
Total assets
B
433,995 100.0
A
Current year represents equity holding both fully paid and partly paid
B
Excluding loan balances.
Unless otherwise stated, investments are in common stock.
Aberdeen New India Investment Trust PLC 31
Sector Breakdown
As at 31 March 2022
28.7%
21.7%
8.7%
7.8%
6.5%
5.9%
5.3%
5.1%
4.6%
3.2%
2.5%
Financials
Information Technology
Consumer Staples
Communication Services
Materials
Healthcare
Consumer Discretionary
Industrials
Utilities
Real Estate
Energy
0% 5% 10% 15% 20% 25% 30%
Financials
Information Technology
Consumer Staples
Communication Services
Materials
Healthcare
Consumer Discretionary
Industrials
Utilities
Real Estate
Energy
2022
2021
Sector Analysis
32 Aberdeen New India Investment Trust PLC
Indian Rupee/Sterling Currency Movement
Year to 31 March 2022
99
100
101
102
103
104
105
31/03/ 21 30/04/21 31/05/21 30/06/21 31/07/21 31/08/21 30/09/21 31/10/21 30/11/21 31/12/21 31/01/22 28/02/ 22 31/03/ 22
Currency Analysis
Aberdeen New India Investment Trust PLC 33
The Investment Manager believes that a company’s ability
to sustainably generate returns for investors depends on
the management of its environmental impact, its
consideration of the interests of society and stakeholders,
and on the way 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 Mana
g
er’s ESG Process
34 Aberdeen New India Investment Trust PLC
How the Investment Manager embeds ESG into its Investment Process
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
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 En
g
a
g
ement
Aberdeen New India Investment Trust PLC 35
At the last review reported to the Board, 47.4% 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 50.0% of the companies were
rated as ‘Average’. A generally positive momentum has been witnessed from companies in the portfolio in terms of ESG,
in terms of 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 six monthly updates with regards these metrics which will be published on the Company website
when available, 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.
36 Aberdeen 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 En
g
a
g
ement
Continued
Aberdeen New India Investment Trust PLC 37
Our Engagement Activity
We regularly engage with companies we invest in. The
following chart shows the engagements that have
included ESG topics. Over the period we met with 17
portfolio companies on ESG topics and had 32
engagements with them. This does not include positions
we have moved out of or are considering. These are the
themes that we have engaged on:
Climate
Environment
Labour Management,
Diversity & Inclusion
Human Rights &
Stakeholders
Corporate Behaviour
Corporate Governance
Our Voting Activity
Voting Summary Total
How many meetings were you eligible to vote? 70
How many meetings did you vote at? 68
How many resolutions were you eligible to vote on? 626
What % of resolutions did you vote on for which you
were eligible?
98.6%
Of the resolutions on which you voted, what % did
you vote with management?
95.9%
Of the resolutions on which you voted, what % did
you vote against management?
3.4%
Of the resolutions on which you voted, what % did
you abstain from voting?
0.6%
In what % of meetings, for which you did vote, did
you vote at least once against management?
22.1%
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.
38 Aberdeen New India Investment Trust PLC
Fortis Healthcare
Creating a world-class healthcare delivery system in India
For years, India’s healthcare sector was placed down the
pecking order when it came to allocating resources. In
recent years, however, it has been expanding significantly
due to growing demand for medical services,
consultations and medical tourism. The industry has grown
at a compound annual growth rate of around 22% in
recent years, and in 2022, government estimates project it
will reach over $370 billion. In terms of revenue and
employment, healthcare is now one of the largest sectors
of the Indian economy.
As India’s middle class expands, there will be a growing
demand for both preventative and premium quality
healthcare. Higher proportion of lifestyle-related health
issues, such as cholesterol, high blood pressure, obesity,
poor diet and alcohol consumption will lead to greater
demand for specialised care services. Furthermore, Covid-
19 has changed long-term attitudes towards personal
health monitoring and medical check-ups.
Such trends augur well for Fortis Healthcare (pictured),
one of the country’s largest integrated healthcare services
providers, operating the second-biggest hospital chain by
revenue. The network comprises 36 healthcare facilities
with about 4,000 operational beds across India, with a
greater presence in North Indian cities. Fortis also has a
diagnostics business with labs all over the country. Both
operations are positioned as premium services, allowing
Fortis to tap into India’s widening aspirational
demographic.
For a long time, Fortis had failed to meet our corporate
governance criteria. Our views changed in 2019 when
Malaysian healthcare giant IHH took a 31% stake in the
company and injected much-needed capital to shore up
the company’s balance sheet and overhaul its board of
directors. We have been encouraged by how things have
progressed under new CEO Ashutosh Raghuvanshi, a
cardiac surgeon turned management leader who joined
Fortis from Narayana Health, a hospital chain famous for
having some of the lowest cost levels in the world and
hyper-efficient processes.
Following a tumultuous period of corporate governance
crisis involving the company’s previous promoters,
Raghuvanshi’s impressive track record bolsters confidence
in his ability to continue turning the business around. Under
his leadership, operational efficiency and margins have
improved as the new management implemented a
dynamic cost-cutting program as a first step to nurse the
company back to health. Fortis weathered the Covid crisis
relatively well, without needing to undertake drastic
measures to manage costs as many non-urgent surgeries
were being postponed.
We remain positive on Fortis’ long-term prospects. The
healthcare sector has ample opportunities for growth in a
supportive policy environment where the government
continues to strengthen India’s healthcare infrastructure.
Fortis has a well-established brand reputation in the
industry that affords it better bargaining power to procure
equipment, drugs and supplies. The company also owns
assets in prime locations within India’s major cities where
the government is releasing fewer plots of lands for new
hospitals, which gives Fortis a first-mover advantage in
some locations.
Kristy Fong and James Thom
Investment Manager
30 June 2022
Investment Case Studies
Aberdeen New India Investment Trust PLC 39
Infosys
From humble beginnings to one of India’s top IT
services names
Infosys was founded in 1981 with a capital of just US$250.
Over the past four decades, as India became a hub for
tech talent, Infosys grew into one of the country’s leading
household names, providing technology consulting and
software services to corporate clients across the world.
Today, it employs over 300,000 people globally and
generates over US$16 billion of revenues a year.
Despite its size and scale, Infosys has over the years
successfully navigated the ever-changing technology
landscape with remarkable nimbleness, benefiting from
the trend towards digital transformation and migration to
the cloud. In recent years, the company has taken market
share from its peers, driven by its investments in digital
capabilities, as well as its strength in delivery, recruitment
and training. It has been delivering comparatively stronger
growth, and beating its own revenue guidance for the past
three years.
Today, Infosys is among the top three players in the
industry, with attractive margins, deep industry knowledge
and expertise in a competitive, fragmented market. The
group has solid financials and a superior cash generation
ability, and it is led by highly capable and experienced
management. In fact, the size of its new contract wins has
steadily increased over the past three years.
The Covid-19 pandemic accelerated demand for IT
services as companies scrambled to implement remote
working environments to ensure business continuity,
migrating more systems to the cloud and accelerating
digital solutions. Infosys was a key beneficiary of this,
gaining market share, announcing large new deal wins
and expanding its margins, making the stock among the
top performers for the Trust over the period. Looking
ahead, we expect double-digit earnings growth for Infosys
despite an increasingly uncertain environment.
Infosys also has excellent environmental, social and
governance (ESG) credentials in an industry with growth
tailwinds, as evidenced by its A rating from MSCI. The
group has underlined the importance of ESG as an
evaluation criterion for its deal wins.
As part of its ESG Vision 2030
framework, the company
has set clear targets around carbon emissions, clean tech
opportunities and diversity. For example, Infosys has been
carbon neutral since 2020. Focusing on workforce
diversity, robust governance practices and human capital
development, Infosys plans to extend digital skills to over
10 million people and increase the percentage of women
in its workforce to at least 45%.
On corporate governance, due to the fragmented
ownership structure of the firm, the lack of a controlling
shareholder better aligns management and promoter
group to minority investors. Infosys also has more
independent representation on its board, including an
independent lead director, which can potentially provide
more objective oversight of management.
Kristy Fong and James Thom
Investment Manager
30 June 2022
40 Aberdeen New India Investment Trust PLC
Governance
Aberdeen New India Investment Trust PLC 41
The Directors, all of whom are non-executive
and independent of the Manager, supervise
the management of Aberdeen New India
Investment Trust PLC and represent the
interests of shareholders.
42 Aberdeen New India Investment Trust PLC
Hasan Askari
Independent Non-Executive Chairman and
Chairman of the Nomination Committee
Experience
Formerly an investment banker, from 1975, initially with SG
Warburg & Co. Ltd. (now UBS Ltd.) and subsequently with
JP Morgan Chase Investment Bank in Hong Kong and
Barclays Capital (previously BZW) in Tokyo and London.
Formerly at Old Mutual plc, London as a member of the
Executive Committee responsible for the United Kingdom
and Europe and later, for Asia-Pacific.
Length of service:
Nine years; appointed a Director on 21 September 2012
and Chairman on 11 September 2014.
Contribution:
The Nomination Committee has reviewed the contribution
of Hasan Askari 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.
Last re-elected to the Board:
2021
All other public company directorships:
None
Michael Hughes
Senior Independent Non-Executive Director and
Chairman of the Management Engagement Committee
Experience
Currently, an investment consultant to a family office, an
asset management company, and a national charity. He
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:
Five years; appointed a Director on 7 September 2016.
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 continues to provide to the Board significant
investment insight and knowledge of the investment trust
sector.
Last re-elected to the Board:
2021
All other public company directorships:
None
Board of Directors
Aberdeen New India Investment Trust PLC 43
Stephen White
Independent Non-Executive Director and
Chairman of the Audit Committee
Experience
A former investment manager, he has more than 35 years'
experience of managing investment portfolios, most
notably twenty years as Head of European Equities at F&C
Asset Management, where he was also manager of F&C
Eurotrust plc and deputy manager of the F&C Investment
Trust plc, and ten years as Head of European and US
Equities at British Steel Pension Fund. He qualified as a
Chartered Accountant at PwC before starting a career in
investment management.
Length of service:
Eight years; appointed a Director on 26 September
2013 and Chairman of the Audit Committee on
11 September 2014.
Contribution:
The Nomination Committee has reviewed the contribution
of Stephen White and has concluded that he has
continued to chair the Audit Committee expertly
throughout the year as well as providing to the Board
significant investment insight and knowledge of the
investment trust sector.
Last re-elected to the Board:
2021
All other public company directorships:
BlackRock Frontiers Investment Trust PLC, Polar Capital
Technology Trust plc and Brown Advisory US Smaller
Companies PLC (Chairman)
Rebecca Donaldson
Independent Non-Executive Director
Experience
Over the last twenty-eight years, she has led the
development of global marketing, communications and
investor relations solutions for a broad range of
investment companies, most recently as Head of Channel
Marketing, EMEA at BMO Global Asset Management, and
previously with Fidelity Worldwide Investments, Dexion
Capital plc (now Fidante Partners) and UBS Global Asset
Management AG.
Length of service:
Two years; appointed a Director on 1 September 2020.
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.
Last re-elected to the Board:
2021
All other public company directorships:
None
44 Aberdeen New India Investment Trust PLC
David Simpson
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, he 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 current role as a non-executive director of ITC
Limited, a major listed Indian company.
Length of service:
7 months; appointed a Director on 1 November 2021.
Contribution:
The Nomination Committee has reviewed the contribution
of David Simpson in light of his proposed election as a
Director at the forthcoming AGM and has concluded that
his experience of business in India, coupled with his
financial expertise, is an asset to the Company.
Last re-elected to the Board:
Not applicable; due for election to the Board by
shareholders at the AGM on 28 September 2022.
All other public company directorships:
Ecofin Global Utilities and Infrastructure Trust plc
(Chairman) and M&G Credit Income Investment
Trust plc (Chairman).
Andrew Robson
Independent Non-Executive Director
Experience
A qualified Chartered Accountant, with a background in
investment banking and as a finance director, he 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
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 with effect from 1 August 2022.
Contribution:
N/A
Last re-elected to the Board:
N/A
All other public company directorships:
BlackRock Energy and Resources Income Trust PLC and
Baillie Gifford China Growth Trust PLC (formerly Witan
Pacific Investment Trust plc).
Board of Directors
Continued
Aberdeen New India Investment Trust PLC 45
The Directors present their Report and the audited
Financial Statements of the Company for the year ended
31 March 2022, 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 page 16.
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 2022. 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 2022 the Company
bought back into treasury 448,201 Ordinary shares (2021–
335,653 Ordinary shares). As at 31 March 2022, the
Company's issued share capital consisted of 57,937,127
Ordinary shares (2021 – 58,385,328 Ordinary shares) with
voting rights, each share holding one voting right in the
event of a poll, and an additional 1,133,013 Ordinary
shares in treasury, with no voting rights or entitlement to
receive dividends. Between 1 April 2022 and the date of
approval of this Report an additional 360,030 Ordinary
shares were bought back resulting in the Company’s
issued share capital consisting of 57,577,097 Ordinary
shares and an additional 1,493,043 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 102) 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 102) 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
Aberdeen Asset Management PLC and promotional
activities to Aberdeen Asset Managers Limited (“AAML”).
Under the terms of the management agreement (“MA”),
investment management fees payable to the Manager
have been calculated and charged on the following basis
throughout the year ended 31 March 2022: a monthly fee,
payable in arrears, calculated at an annual rate of 0.85%
of the Company’s net assets up to £350m and 0.70%
above net assets of £350m and is otherwise calculated on
the same basis as previously. Prior to 1 April 2021, the fee
was calculated on the same basis other than the rate was
0.9% of the Company’s net assets up to £350m and 0.75%
above net assets of £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 2022 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 the highest standards of
corporate governance. The Board is accountable to the
Company’s shareholders for good governance and, as
required by the Listing Rules of the FCA, this statement
describes how the Company applies the Main Principles
identified in the UK Corporate Governance Code
published in July 2018 (the "UK Code") and which is
applicable for the Company’s year ended 31 March 2022.
The UK Code is available on the Financial Reporting
Council's (the “FRC”) website: frc.org.uk.
The Board has also considered the AIC Code of Corporate
Governance as published in February 2019 (the “AIC
Code”) which addresses all the principles and
recommendations set out in the UK Code, as well as
setting out additional guidance on issues which are of
specific relevance to investment trusts. The AIC Code is
available on the AIC’s website: theaic.co.uk.
Directors’ Report
46 Aberdeen New India Investment Trust PLC
The Board considers that reporting against the principles
and recommendations of the AIC Code, and by reference
to the AIC Guide (which incorporates the UK Code), will
provide better information to shareholders. The Board
confirms that, during the year, the Company complied
with the recommendations of the AIC Code and the
relevant provisions of the UK Code, except as set
out below:
The AIC Code and UK Code include provisions relating to
· the Board’s policy on the tenure of the Chairman (AIC
Code provision 24 and UK Code provision 19); further
information may be found on page 47 regarding the
tenure of Hasan Askari, as the Company’s Chairman;
· the composition of the Audit Committee (AIC Code
provision 29 and UK Code provision 24): 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 Hasan Askari continues
to be independent; and
· the establishment of a remuneration committee (AIC
Code provision 37 and UK Code provision 32): 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.
The full text of the Company’s Statement of Corporate
Governance can be found on its website:
aberdeen-newindia.co.uk.
Directors
The Board consists of a non-executive Chairman and four
non-executive Directors who served throughout the year
under review, other than David Simpson who joined the
Board on 1 November 2021. The Senior Independent
Director is Michael Hughes.
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 and biographies of each of the Directors are
shown on pages 42 to 44 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.
The Directors attended scheduled Board and Committee
meetings during the year ended 31 March 2022 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
Hasan
Askari
8 (8) 3 (3) 1 (1) 1 (1)
Michael
Hughes
8 (8) 3 (3) 1 (1) 2 (2)
Stephen
White
9 (9) 3 (3) 1 (1) 2 (2)
Rebecca
Donaldson
7 (7) 3 (3) 1 (1) 2 (2)
David
Simpson
A
3 (3) 2 (2) 1 (1) 1 (1)
A
Appointed as a Director on 1 November 2021.
Hasan Askari and Stephen White are not standing for re-
election as Directors and will retire from the Board at the
conclusion of the AGM on 28 September 2022. Michael
Hughes will succeed Hasan Askari as Chairman of the
Company while David Simpson will succeed Michael
Hughes as Senior Independent Director. Subsequent to the
year end, Andrew Robson was appointed a Director of the
Company with effect from 1 August 2022, and will
Directors’ Report
Continued
Aberdeen New India Investment Trust PLC 47
succeed Stephen White as Chairman of the Audit
Committee at the conclusion of the AGML
Michael Hughes and Rebecca Donaldson, each being
eligible, retire and offer themselves for re-election as
Directors of the Company. David Simpson and Andrew
Robson, each being eligible, retire and offer themselves for
election as a Director.
David Simpson is a non-executive director of ITC Limited
(”ITC”), a major listed Indian company. ITC has a diversified
presence in FMCG, hotels, packaging, specialty paper and
agri-business and represented 2.3% of the Company’s
total portfolio as at 31 March 2022. David Simpson has
agreed that he will recuse himself from all discussions
regarding ITC to avoid any potential conflict of interest.
Accordingly, the Board as a whole believes that each
Director remains independent of the AIFM 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
individual contribution of each Director is set out on pages
42 to 44.
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 ninth anniversary of Hasan Askari’s term as a Director
was 21 September 2021. As set out in the Annual Report
for the year ended 31 March 2022, the other Directors, led
by Michael Hughes as Senior Independent Director,
determined that it was in the best interests of
shareholders that Hasan Askari continue as Chairman
until the AGM on 28 September 2022, in order to oversee
the recruitment of two new Directors.
The Board therefore has no hesitation in recommending,
at the next AGM, the individual elections of David Simpson
and Andrew Robson and the individual re-elections of
Michael Hughes and Rebecca Donaldson as Directors of
the Company.
All appointments to the Board of Directors are considered
by the Board as a whole. The Board’s overriding priority in
appointing new Directors is to identify the candidate with
the optimal range of skills and experience to complement
the existing Directors. The Board also recognises the
benefits, and is committed to, the principle of diversity in its
recruitment of new Directors.
Directors' Insurances and Indemnities
The Company maintains insurance in respect of Directors’
and Officers’ liabilities in relation to their acts on behalf of
the Company. Furthermore, each Director of the
Company is entitled to be indemnified out of the assets of
the Company to the extent permitted by law against all
costs, charges, losses, expenses and liabilities incurred by
them in the actual or purported execution and/or
discharge of their duties and/or the exercise or purported
exercise of their powers and/or otherwise in relation to or
in connection with their duties, powers or office. These
rights are included in the Articles of Association of the
Company and the Company has granted deeds of
indemnities to each Director on this basis.
Management of Conflicts of Interest and
Anti-Bribery Policy
The Board has a procedure in place to deal with a
situation where a Director has a conflict of interest. As part
of this process, the Directors prepare a list of other
positions held and all other conflict situations that may
need to be authorised either in relation to the Director
concerned or his/her connected persons. The Board
considers each Director’s situation and decides whether
to approve any conflict, taking into consideration what is in
the best interests of the Company and whether the
Director’s ability to act in accordance with his/her wider
duties is affected. Each Director is required to notify the
Company Secretaries of any potential, or actual, conflict
situations which will need authorising by the Board.
Authorisations given by the Board are reviewed at each
Board meeting.
No Director has a service contract with the Company
although Directors are issued with letters of appointment
upon taking up office. Other than the deeds of indemnity
referred to above, there were no contracts with the
Company during, or at the end of the year, in which any
Director was interested.
The Board takes a zero tolerance approach to bribery
and has adopted appropriate procedures designed to
prevent bribery. abrdn also takes a zero tolerance
approach and has its own detailed policy and procedures
in place to prevent bribery and corruption.
In relation to the corporate offence of failing to prevent tax
evasion, it is the Company’s policy to conduct all business
in an honest and ethical manner. The Company takes a
zero-tolerance approach to facilitation of tax evasion
whether under UK law or under the law of any foreign
country and is committed to acting professionally, fairly
and with integrity in all its business dealings and
relationships.
48 Aberdeen New India Investment Trust PLC
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 52 to 54.
Management Engagement Committee
The Board has established a Management Engagement
Committee comprising all of the Directors, which was
chaired throughout the year by Michael Hughes.
The Committee is responsible for reviewing matters
concerning the MA 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 2021.
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
throughout the year by Hasan Askari. 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 2021. 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. Details of the individual contribution made by
each Director may be found on pages 42 to 44.
In April 2022, the Board facilitated a self-assessment
evaluation which was collated and discussed by the
Chairman with other Directors. The Senior Independent
Director provided feedback to the Chairman.
As the Company has no employees and the Board is
comprised wholly of non-executive directors and, given
the size and nature of the Company, the Board has not
established a separate remuneration committee and
Directors’ fees are determined by the Nomination
Committee. In line with best practice in corporate
governance, Hasan Askari did not chair the Committee in
relation to his own succession. Chaired by Stephen White,
the Committee approved the appointment of Michael
Hughes as Chairman of the Company with effect from the
conclusion of the AGM on 28 September 2022.
Accountability and Audit
The responsibilities of the Directors and the Auditor, in
connection with the financial statements, appear on
pages 58 and 63.
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
Directors’ Report
Continued
Aberdeen New India Investment Trust PLC 49
and uncertainties disclosed on pages 16 to 18 and in Note
17 to the financial statements and have reviewed income
forecasts detailing revenue and expenses; 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.
This is also based on the assumption that ordinary
resolution 8, that the Company continues as an
investment trust, which will be proposed at the AGM of the
Company on 28 September 2022, is passed by
shareholders as it has been in the years since it was put in
place. The Directors consult annually with major
shareholders and, as at the date of approval of this
Report, had no reason to believe that this assumption
was incorrect.
In July 2020, the Company entered into a two year, £30
million revolving credit facility (the “Facility”) with Royal
Bank of Scotland International Limited (London Branch),
part of NatWest Group plc, of which £30m was drawn
down at 31 March 2022 (2021 - £30m). on 30 June 2022,
the Company agreed to extend the Facility to 5 August
2022. 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
August 2022, the Company has entered 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 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.
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 AIFM which has sub-
delegated that authority to the Manager. Further
information may be found at:
abrdn.com/en/asieurope/responsible-investing
Substantial Interests
The Company had been notified of the following share
interests above 3% in the Company as at 31 March 2022:
Shareholder
Number of
shares held % held
Clients of abrdn 11,144,048 19.2
Lazard Asset Management 9,040,332 15.6
City of London Investment
Management 6,859,351 11.8
Clients of Hargreaves Lansdown
(execution only) 4,162,456 7.2
Interactive Investor (execution only) 3,410,085 5.9
abrdn retail plans 2,455,254 4.2
The above interests at 31 March 2022 were unchanged
other than, in relation to Lazard Asset Management, which
advised the Company on 5 May 2022 of a holding of
6,418,621 shares, equivalent to 11.1% of the Company’s
shares in issue (excluding treasury shares) and, in relation
to clients of abrdn, which advised the Company on 15
June 2022 of a holding of 8,519,024 shares, equivalent to
14.8% of the Company’s shares in issue (excluding
treasury shares) and, in relation to City of London
Investment Management, which advised the Company on
16 June 2022 of a holding of 7,179,947 shares, equivalent
to 12.5% of the Company’s share in issue (excluding
treasury shares).
Relations with Shareholders
The Directors place great importance on communication
with shareholders. The Annual Report is widely distributed
to other parties who have an interest in the Company’s
performance. Shareholders and investors may obtain up-
to-date information on the Company through its website,
aberdeen-newindia.co.uk, or via the abrdn’s Customer
Services Department. The Company responds to letters
from shareholders on a wide range of issues (see Contact
Addresses on page 105).
The Board’s policy is to communicate directly with
shareholders and their representative bodies without the
involvement of the management group (either the
Company Secretaries or abrdn) in situations where direct
communication is required and representatives from the
Board offer to meet with major shareholders on an annual
basis in order to gauge their views.
In addition, members of the Board may accompany
the Manager when undertaking meetings with
institutional shareholders.
50 Aberdeen New India Investment Trust PLC
The Company Secretaries only act on behalf of the Board,
not the Manager, and there is no filtering of
communication. At each Board meeting the Board
receives full details of any communication from
shareholders to which the Chairman responds, as
appropriate, on behalf of the Board.
The Notice of AGM included within the Annual Report is
normally sent out at least 20 working days in advance of
the meeting. All shareholders have the opportunity to put
questions to the Board and Manager prior to the
Company’s AGM.
Annual General Meeting
The AGM will be held on 28 September 2022 and the AGM
Notice and related notes may be found on pages 97 to
101. Resolutions relating to the following items will be
proposed at the AGM as special business.
Continuation of the Company (Resolution 8)
In accordance with Article 166 of the Articles of
Association of the Company approved by shareholders on
23 September 2020, the Directors are required to propose
an Ordinary resolution at each AGM that the Company
continue as an investment trust. Accordingly, the Directors
are proposing, as ordinary resolution 8, that the Company
continue as an investment trust and recommend that
shareholders support the continuation of the Company.
Share Repurchases (Resolution 9)
At the AGM held on 9 September 2021, 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 9 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 30 June 2022, being the nearest practicable
date to the approval of this Report (equivalent to
approximately 8.6 million Ordinary shares). Such authority
will expire on the date of the AGM in 2023 or on 30
September 2023, whichever is earlier. This means in effect
that the authority will have to be renewed at the next
AGM, or earlier, if the authority has been exhausted.
Issue of Shares (Resolutions 10 and 11)
Ordinary resolution 10 in the Notice of AGM will, if passed,
renew the authority to allot unissued share capital up to an
aggregate of 5%, equivalent to approximately 2.9 million
Ordinary shares, of the Company’s existing issued share
capital, excluding treasury shares, as at 30 June 2022,
being the nearest practicable date to the approval of this
Report). Such authority will expire on the date of the AGM
in 2023 or on 30 September 2023, 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 11 will, if passed, give the Directors
power to allot for cash equity securities up to 5%
(equivalent to approximately 2.9 million Ordinary shares),
of the Company’s existing issued share capital as at 30
June 2022, being the nearest practicable date 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 10.
This authority will expire on the date of the AGM in 2023 or
on 30 September 2023, whichever is earlier, which means
that the authority will have to be renewed at the next AGM
or, earlier, if the authority has been exhausted. This
authority will not be used in connection with a rights issue
by the Company.
The Directors intend to use the authorities given by
resolutions 10 and 11 to allot shares, or sell shares from
treasury, and disapply pre-emption rights only in
circumstances where this will be clearly beneficial to
shareholders as a whole. The issue proceeds would be
available for investment in line with the Company’s
investment policy.
The Company is permitted to buy back and hold shares in
treasury and then sell them at a later date for cash, rather
than cancelling them. The Treasury Share Regulations
require such sale to be on a pre-emptive, pro rata, basis to
existing shareholders unless shareholders agree by
Directors’ Report
Continued
Aberdeen New India Investment Trust PLC 51
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 11, 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.
Articles of Association (Resolution 12)
Resolution 12 proposes to amend the Company’s Articles
of Association (the “Articles”) in light of the announcement
made by the Company on 24 March 2022 in relation to the
proposed introduction of a five-yearly performance
related conditional tender offer. Further detail on the
proposed conditional tender offer is contained in the
Chairman's Statement on page 9.
In order to align the Company's continuation vote with the
assessment period for the proposed conditional tender
offer, the Company proposes to amend article 166
(Duration of the Company) to replace the Company’s
current cycle of annual continuation votes with five-yearly
continuation votes, to coincide with the year of
assessment of the Company's performance for the
purpose of the conditional tender offer.
While there is no formal requirement for shareholders to
vote on the introduction of the proposed conditional
tender offer, shareholders’ approval by way of special
resolution is required for this amendment to the Articles.
As noted above under Continuation of the Company, the
current annual continuation vote will take place, as
normal, at the AGM on 28 September 2022. If the
continuation vote is not passed by shareholders at the
AGM, neither the proposed conditional tender offer nor
the proposed amendment to the Articles will be
implemented.
Similarly, the proposed conditional tender offer will only be
introduced if this year's continuation vote and resolution
12 for amendment to the Articles are both passed at
the AGM.
If shareholders vote in favour of these proposals, any
conditional tender offer that is triggered at the conclusion
of the five-yearly Assessment Period will be subject to the
passing of the five-yearly continuation vote. The first
Assessment Period would run from 1 April 2022 to 31
March 2027 and the first five-yearly continuation vote
would take place at the AGM later in 2027.
Resolution 12 proposes one further amendment to the
Articles: to delete Article 173. Article 173 was added
following the enactment of the Companies Act 2006 (the
Act). It drew into the Articles provisions which prior to the
Act would have been contained in the Company's
memorandum of association, including the Company's
name. Article 173 has been superseded by changes in
company law since, including the provision allowing UK
companies flexibility to change their name in the manner
permitted by their articles of association, as now reflected
in Article 170 which permits the Company to change its
name by directors' resolution. The Company is proposing
to remove Article 173 to eliminate any potential
inconsistency.
The Articles, as proposed to be amended, together with a
version showing amendments from the current Articles,
will be available for inspection under 'Key Literature' on the
Company’s website, aberdeen-newindia.co.uk, and on the
national storage mechanism from the date of the
publication of the Annual Report until the close of the AGM,
and will also be available for inspection at the venue of
the Company's AGM from 15 minutes before and during
the AGM.
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 33,276 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 MA, that take effect,
alter or terminate upon a change of control of the
Company following a takeover. Other than the MA with
the Manager, further details of which are set out on page
45, 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.
Hasan Askari,
Chairman
30 June 2022
52 Aberdeen New India Investment Trust PLC
The Audit Committee presents its Report for the year
ended 31 March 2022.
Committee Composition
The Directors have appointed an Audit Committee (the
“Committee”) consisting of the whole Board, which was
chaired throughout the year by Stephen White. The other
Directors consider that it is appropriate for Hasan Askari
(as Chairman of the Board) to be a member of, but not
chair, the Committee, due to the Board’s small size, the
lack of any perceived conflict of interest, and because
the other Directors believe that Hasan Askari continues to
be independent.
The Directors have satisfied themselves both that at least
one of the Committee’s members has recent and relevant
financial experience, Stephen White 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 AIFM detailing the
arrangements in place within abrdn whereby its staff
may, in confidence, escalate concerns about possible
improprieties in matters of financial reporting or other
matters (whistleblowing);
· to review and approve the remuneration and terms of
engagement of the Auditor;
· to monitor and review annually the Auditor’s
independence, objectivity, effectiveness, resources and
qualification;
· to monitor the requirement for rotation of the Auditor
and to oversee any tender for the external audit of the
Company;
· to keep under review the appointment of the Auditor
and to recommend to the Board and shareholders the
reappointment of the existing auditor or, if appropriate,
the appointment of a new Auditor; and
· to evaluate its own performance each year, in relation
to discharging its main functions, by means of a section
devoted to the Committee within the Directors’ annual
self-evaluation.
Activities during the Year
The Committee met on three occasions during the year to
consider the Annual Report, the Half-Yearly Report and
the Company’s system of risk management and internal
control. Reports from abrdn’s internal audit, business risk
and compliance departments were considered by the
Committee at these meetings.
Audit Committee’s Report
Aberdeen New India Investment Trust PLC 53
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 2022 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 16 to 18 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 AIFM and Investment Manager
as appropriate;
· as a matter of course, the AIFM’s compliance
department continually reviews the AIFM’s operations;
and
· written agreements are in place which specifically
define the roles and responsibilities of the AIFM 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 AIFM’s immediate
parent company, abrdn. At its June 2022 meeting, the
Committee carried out an annual assessment of risk
management and internal controls for the year ended 31
March 2022 by considering documentation from the AIFM,
including the internal audit and compliance functions, and
taking account of events since 31 March 2022.
The system of internal control and risk management is
designed to meet the Company’s particular needs and
the risks to which it is exposed. Accordingly, this system is
designed to manage, rather than eliminate, the risk of
failure to achieve business objectives and, by its nature,
can only provide reasonable, and not absolute, assurance
against misstatement and loss.
External Agencies
The Board has contractually delegated to external
agencies, including the Manager and other service
providers, certain services: the management of the
investment portfolio, the depositary services (which
include the custody and safeguarding of the assets), the
share registration services and the day-to-day
accounting and company secretarial requirements. Each
of these contracts was entered into after full and proper
consideration by the Board of the quality and cost of
services offered in so far as they relate to the affairs of the
Company. The Board 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
54 Aberdeen New India Investment Trust PLC
Financial Reporting and Significant Issues
During its review of the Company’s financial statements
for the year ended 31 March 2022, 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 2022 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 Securities Services, London
Branch (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 Financial Reporting Issues
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.
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); and
· Quality of people and service - including continuity and
succession plans (the audit team is made up of
sufficient, suitably experienced staff with provision
made for knowledge of the investment trust sector and
retention on rotation of the senior statutory auditor).
Tenure and Reappointment of KPMG
LLP as Auditor
KPMG has expressed its willingness to be reappointed
auditor to the Company. Resolution 7, which is to be put to
shareholders at the forthcoming AGM, proposes the
reappointment of KPMG as Independent Auditor of the
Company, and also seeks authorisation for the Directors
to fix KPMG’s remuneration for the year to 31 March 2023.
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 2022
is the fourth year for which the present audit director from
KPMG LLP, Gary Fensom, has served as the senior
statutory auditor.
Stephen White,
Chairman of the Audit Committee
30 June 2022
Audit Committee’s Report
Continued
Aberdeen New India Investment Trust PLC 55
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 23
September 2020 where the proxy votes for the
relevant resolution were: For – 34.8m votes (99.7%);
Discretionary – 18,900 votes (0.1%); Against – 69,596
votes (0.2%); and Withheld – 80,801 votes. The
Remuneration Policy will be put to shareholders again
at the AGM in 2023;
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 59 to 63.
The Directors’ Remuneration Policy and level of Directors’
remuneration are determined by the Nomination
Committee, which is chaired by Hasan Askari 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 re-imbursement 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 9 September 2021,
shareholders approved the Directors’ Remuneration
Report (other than the Directors’ Remuneration Policy) in
respect of the year ended 31 March 2021 and the
following proxy votes were received on the Resolution: For
– 36.2m votes (99.7%); Discretionary – 22,600 votes (0.1%);
Against – 63,645 votes (0.1%); and Withheld – 58,041 votes.
The fact that the Remuneration Policy is subject to a
binding vote at every third AGM does not imply any
change on the part of the Company. The principles
remain the same as for previous years. There have been
no changes to the Directors’ Remuneration Policy during
the period of this Report nor are there any proposals for
the foreseeable future.
This part of the Remuneration Report provides details of
the Company’s Remuneration Policy for Directors of the
Company. This policy takes into consideration the
principles of the UK Corporate Governance Code. No
shareholder views were sought in setting the
Remuneration Policy although any comments received
from shareholders would be considered on an ongoing
basis. As the Company has no employees and the Board
is comprised wholly of non-executive Directors and, given
the size and nature of the Company, the Board has not
established a separate Remuneration Committee during
the year under review. The Nomination Committee is
responsible for determining Directors’ remuneration.
Directors’ Remuneration Report
56 Aberdeen New India Investment Trust PLC
The Directors’ Remuneration Policy was approved by
shareholders at the AGM on 23 September 2020.
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 2022
£
31 March 2021
£
Chairman 36,500 36,000
Chairman of Audit Committee 30,500 30,000
Director 27,500 27,000
The Nomination Committee carried out a review of
Directors’ annual fees during the year, including assessing
the prevailing inflation rate and the increased time
required by the Company to devote to regulatory matters,
and concluded that these should change, with effect from
1 April 2022, to the following fees per annum: £38,000
(Chairman), £33,000 (Audit Committee Chairman) and
£29,000 for each other Director. There are no further fees
to disclose as the Company has no employees, chief
executive or executive directors.
Spend on Pay
As the Company has no employees, the Directors do not
consider it appropriate to present a table comparing
remuneration paid to employees with distributions to
shareholders. The fees paid to Directors are shown
in the table.
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
2022 (rebased to 100 at 31 March 2012). This Benchmark
was selected for comparison purposes as it is used by the
Board for investment performance measurement.
100
150
200
250
300
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
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 2022 31 March 2021
Director £ £
Hasan Askari 36,500 36,000
Michael Hughes 27,500 27,000
Stephen White 30,500 30,000
Rebecca Donaldson
A
27,500 15,750
David Simpson
B
11,458 n/a
Rachel Beagles
C
n/a 12,975
Total 133,458 121,725
A
Appointed as a Director on 1 September 2020.
B
Appointed as a Director on 1 November 2021.
C
Retired as a Director on 23 September 2020.
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.
Directors’ Remuneration Report
Continued
Aberdeen New India Investment Trust PLC 57
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 2022 and 31 March 2021 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 2022 31 March 2021
Ord. 25p Ord. 25p
Hasan Askari 4,300 4,300
Michael Hughes 8,115 8,115
Stephen White 12,500 12,500
Rebecca Donaldson 4,471 4,471
David Simpson 3,860 n/a
Rachel Beagles n/a 10,000
A
A
As at date of retirement on 23 September 2020.
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
2022
Year ended
31 March
2021
% %
Hasan Askari 1.4 1.4
Michael Hughes 1.9 1.9
Stephen White 1.7 1.7
Rebecca Donaldson
A
74.6 n/a
David Simpson
B
n/a n/a
Rachel Beagles
C
n/a -51.0
A
Appointed a Director on 1 September 2020 so a comparison against the year ended
31 March 2021 is not meaningful as the Director was not appointed for the full 12
months of that year
B
Appointed a Director on 1 November 2021 so a comparison against the year ended
31 March 2021 is not meaningful
C
Retired as a Director on 23 September 2020 so it is not possible to calculate a
percentage figure
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 2022:
· 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.
Hasan Askari,
Chairman
30 June 2022
58 Aberdeen New India Investment Trust PLC
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
Hasan Askari,
Chairman
30 June 2022
Statement of Directors’ responsibilities in respect of the
Annual Report and financial statements
Aberdeen New India Investment Trust PLC 59
1 Our opinion is unmodified
We have audited the financial statements of Aberdeen
New India Investment Trust PLC (“the Company”) for the
year ended 31 March 2022 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 2.
In our opinion the financial statements:
· give a true and fair view of the state of Company’s
affairs as at 31 March 2022 and of its profit 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 six financial years ended 31 March
2022. 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.
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
2021), 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.
The risk Our response
Carrying amount of quoted
investments
(£439.9m; 2021: £401.7m)
Refer to pages 53 and 54 (Audit
Committee Report), page 72
(accounting policy) and pages
77 and 78 (financial disclosures).
Low risk, high value
The Company’s portfolio of level 1 quoted
investments makes up 97.35% (2021: 99.2%) 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 (2021:
acceptable).
Independent Auditor’s Report to the Members of
Aberdeen New India Investment Trust PLC
60 Aberdeen New India Investment Trust PLC
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 £4.5m (2021: £4.0m), determined with reference to a
benchmark of total assets, of which it represents 1%
(2021: 1%).
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% (2021: 75%) of materiality for the financial
statements as a whole, which equates to £3.4m (2021:
£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 £225,000 (2021: £200,000), 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.
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 its ability to operate 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 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
pages 48 and 49 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.
Independent Auditor’s Report to the Members of
Aberdeen New India Investment Trust PLC
Continued
Aberdeen New India Investment Trust PLC 61
5 Fraud and breaches of laws and
regulations – ability to detect
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.
As required by auditing standards, we perform
procedures to address the risk of management override
of controls, in particular the risk that management may be
in a position to make inappropriate accounting entries. We
evaluated the design and implementation of the 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. We identified no material post
closing entries and, based on the results of our risk
assessment procedures and understanding of the
process, including the segregation of duties between the
Directors and the Administrator, no further high-risk
journal entries or other adjustments were identified.
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.
We assessed the legality of the distributions made by the
Company in the period based on comparing the dividends
paid to the distributable reserves prior to each distribution,
including consideration of interim accounts filed during
the year.
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.
62 Aberdeen New India Investment Trust PLC
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.
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 pages 19 and 20) 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 Emerging and Principal Risks 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 pages 19 and 20, 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;
Independent Auditor’s Report to the Members of
Aberdeen New India Investment Trust PLC
Continued
Aberdeen New India Investment Trust PLC 63
· 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.
8 Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page
58, 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.
The Company is required to include 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.
A fuller description of our responsibilities is provided on the
FRC’s website at: www.frc.org.uk/auditorsresponsibilities
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.
Gary Fensom (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
Saltire Court
20 Castle Terrace
Edinburgh EH1 2EG
30 June 2022
64 Aberdeen New India Investment Trust PLC
Financial
Statements
Aberdeen New India Investment Trust PLC 65
Technicians and engineers working in a
mobile phone manufacturing plant at
Noida, Uttar Pradesh, India.
66 Aberdeen New India Investment Trust PLC
Year ended Year ended
31 March 2022 31 March 2021
Revenue Capital Revenue Capital
return return Total return return Total
Notes £’000 £’000 £’000 £’000 £’000 £’000
Income
Income from investments 3 4,904 155 5,059 4,517 - 4,517
Gains on investments held at fair value through
profit or loss
10(a) - 45,078 45,078 - 140,538 140,538
Currency losses - (342) (342) - (404) (404)
4,904 44,891 49,795 4,517 140,134 144,651
Expenses
Investment management fees 4 (3,328) - (3,328) (2,801) - (2,801)
Administrative expenses 5 (927) - (927) (821) - (821)
(4,255) - (4,255) (3,622) - (3,622)
Profit before finance costs and taxation 649 44,891 45,540 895 140,134 141,029
Finance costs 6 (290) - (290) (334) - (334)
Profit before taxation 359 44,891 45,250 561 140,134 140,695
Taxation 7 (525) (4,140) (4,665) (452) (13,624) (14,076)
(Loss)/profit for the year (166) 40,751 40,585 109 126,510 126,619
(Loss)/return per Ordinary share (pence) 9 (0.28) 69.92 69.64 0.19 216.06 216.25
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
Aberdeen New India Investment Trust PLC 67
As at As at
31 March 2022 31 March 2021
Notes £’000 £’000
Non-current assets
Investments held at fair value through profit or loss 10 439,881 401,669
Current assets
Cash at bank 9,772 2,588
Other receivables 11 2,160 530
11,932 3,118
Current liabilities
Bank loan 12(a) (30,000) (24,000)
Other payables 12(b) (3,287) (1,038)
(33,287) (25,038)
Net current liabilities (21,355) (21,920)
Non-current liabilities
Deferred tax liability on Indian capital gains 13 (14,531) (13,643)
Net assets 403,995 366,106
Share capital and reserves
Ordinary share capital 14 14,768 14,768
Share premium account 2(l) 25,406 25,406
Special reserve 2(l) 9,932 12,628
Capital redemption reserve 2(l) 4,484 4,484
Capital reserve 2(l) 349,462 308,711
Revenue reserve 2(l) (57) 109
Equity shareholders’ funds 403,995 366,106
Net asset value per Ordinary share (pence) 16 697.30 627.05
The financial statements were approved by the Board of Directors and authorised for issue on 30 June 2022 and were signed on its
behalf by:
Hasan Askari
Chairman
The accompanying notes are an integral part of these financial statements.
Statement of Financial Position
68 Aberdeen New India Investment Trust PLC
Year ended 31 March 2022
Share Capital
Share premium Special redemption Capital Revenue
capital account reserve reserve reserve reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000 £’000
Balance at 1 April 2021 14,768 25,406 12,628 4,484 308,711 109 366,106
Net profit/(loss) after taxation - - - - 40,751 (166) 40,585
Buyback of share capital to treasury - - (2,696) - - - (2,696)
Balance at 31 March 2022 14,768 25,406 9,932 4,484 349,462 (57) 403,995
Year ended 31 March 2021
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 2020 14,768 25,406 14,139 4,484 182,656 130 241,583
Net profit after taxation - - - - 126,510 109 126,619
Equity dividend paid 8 - - - - (455) (130) (585)
Buyback of share capital to treasury - - (1,511) - - - (1,511)
Balance at 31 March 2021 14,768 25,406 12,628 4,484 308,711 109 366,106
The accompanying notes are an integral part of these financial statements.
Statement of Chan
g
es in Equity
Aberdeen New India Investment Trust PLC 69
Year ended Year ended
31 March 2022 31 March 2021
Notes £’000 £’000
Cash flows from operating activities
Dividend income received 3,983 3,580
Investment management fee paid (3,573) (2,427)
Other cash expenses (921) (812)
Cash (outflow)/inflow from operations (511) 341
Interest paid (283) (302)
Net cash (outflow)/inflow from operating activities (794) 39
Cash flows from investing activities
Purchases of investments (130,909) (69,103)
Sales of investments 139,176 71,555
Indian capital gains tax (paid)/refunded on sales (3,251) 19
Net cash inflow from investing activities 5,016 2,471
Cash flows from financing activities
Equity dividend paid - (585)
Buyback of shares (2,696) (1,511)
Drawdown/(repayment) of loan 6,000 (6,000)
Net cash inflow/(outflow) from financing activities 3,304 (8,096)
Net increase/(decrease) in cash and cash equivalents 7,526 (5,586)
Cash and cash equivalents at the start of the year 2,588 8,578
Effect of foreign exchange rate changes (342) (404)
Cash and cash equivalents at the end of the year 2(h),17 9,772 2,588
There were no non-cash transactions during the year (2021 - £nil).
The accompanying notes are an integral part of these financial statements.
Statement of Cash Flows
70 Aberdeen New India Investment Trust PLC
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 2022.
The financial statements have been prepared in accordance with UK-adopted international accounting standards
(“IFRS”).These comprise standards adopted by the International Accounting Standards Board (“IASB”), and
interpretations issued by the International Reporting Interpretations Committee of the IASB (“IFRIC”). 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 April 2021.
The Company’s assets consist mainly of equity shares in companies listed on a recognised stock exchange and in most
circumstances, including in the current market environment, are considered to be realisable within a short timescale.
The Board has set limits for borrowing and regularly reviews actual exposures, cash flow projections and compliance
with banking covenants, including the headroom available. On 6 July 2020, the Company entered into a two year £30
million loan facility of which the full amount is drawn down on a short-term basis through a revolving credit facility and
can be repaid without incurring any financial penalties. On 30 June 2022, the Company agreed an extension of the
facility to 5 August 2022. In advance of expiry of the facility in August 2022, the Company has entered 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 a facility. However, should these terms not be forthcoming, any outstanding borrowing
would be repaid through the proceeds of equity sales. Having taken these factors into account, as well as the
continued impact on the Company of the Covid-19 virus, the Directors believe that the Company has adequate
resources to continue in operational existence for the foreseeable future 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.
This is also based on the assumption that ordinary resolution 8, that the Company continues as an investment trust,
which will be proposed at the AGM of the Company on 28 September 2022, is passed by shareholders as it has been in
the years since it was put in place. The Directors consult annually with major shareholders and, as at the date of
approval of this Report, had no reason to believe that this assumption was incorrect.
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 2022
Aberdeen New India Investment Trust PLC 71
New and amended accounting standards and interpretations. The Company applied, for the first time, certain Standards
and Amendments, which are effective for annual periods beginning on or after 1 January 2021. 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 39, IFRS 4, 7, 9 and 16 Amendments (Interest Benchmark Reform Phase 2)
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 2022 and
thereafter;
– IFRS 9 Amendments (Annual Improvements 2018-2020)
- IAS 1 Amendments (Classification of Liabilities as Current or Non-Current)
- 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)
The Company intends to adopt the Standards and Interpretations in the reporting period when they become effective
and the Board does not anticipate that the adoption of these Standards and Interpretations in future periods will
materially impact the Company’s financial results in the period of initial application although there may be revised
presentations to the Financial Statements and additional disclosures.
(b) Presentation of Statement of Comprehensive Income. In order to better reflect the activities of an investment trust
company and in accordance with guidance issued by the AIC, supplementary information which analyses the
Statement of Comprehensive Income between items of a revenue and capital nature has been presented in the
Statement of Comprehensive Income.
(c) Segmental reporting. The Board has considered the requirements of IFRS 8 ‘Operating Segments’ and is of the view that
the Company is engaged in a single segment business, which is one of investing in Indian quoted equities and that
therefore the Company has only a single operating segment. The Board of Directors, as a whole, has been identified as
constituting the chief operating decision maker of the Company. The key measure of performance used by the Board
to assess the Company’s performance is the total return on the Company’s net asset value, as calculated under IFRS,
and therefore no reconciliation is required between the measure of profit or loss used by the Board and that contained
in the financial statements.
(d) Income. Dividends receivable on equity shares are recognised in the Statement of Comprehensive Income on the ex-
dividend date, and gross of any applicable withholding tax. Dividends receivable on equity shares where no ex-
dividend date is quoted are brought into account when the Company’s right to receive payment is established. Special
dividends are credited to capital or revenue, according to their circumstances. Where a company has elected to
receive dividends in the form of additional shares rather than in cash, the amount of the cash dividend foregone is
recognised in the Statement of Comprehensive Income. Provision is made for any dividends not expected to be
received. Interest receivable from cash and short-term deposits is accrued to the end of the financial year.
(e) Expenses and interest payable. All expenses, with the exception of interest expenses, which are recognised using the
effective interest method, are accounted for on an accruals basis. Expenses are charged to the revenue column of the
Statement of Comprehensive Income except as follows:
- expenses which are incidental to the acquisition or disposal of an investment are charged to the capital column of the
Statement of Comprehensive Income and separately identified and disclosed in note 10 (b); and
- expenses are charged to the capital column of the Statement of Comprehensive Income where a connection with
the maintenance or enhancement of the value of the investments can be demonstrated.
72 Aberdeen New India Investment Trust PLC
(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.
(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.
Notes to the Financial Statements
Continued
Aberdeen New India Investment Trust PLC 73
(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.
Special reserve. The special reserve arose following Court approval in 1998 to transfer £30 million from the share
premium account. This reserve is distributable for the purpose of funding share buy-backs by the Company.
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.
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 represents the amount of the Company’s reserves
distributable by way of dividend.
(m) Foreign currency. Overseas monetary assets and liabilities are converted into Sterling at the rate of exchange ruling at
the Statement of Financial Position date. Transactions during the year involving foreign currencies are converted at the
rate of exchange ruling at the transaction date. Any gain or loss arising from a change in exchange rates subsequent
to the date of the transaction is included as an exchange gain or loss and recognised in the Statement of
Comprehensive Income.
3. Income
2022 2021
£’000 £’000
Income from investments
Overseas dividends 5,059 4,517
4. Investment management fees
2022 2021
£’000 £’000
Investment management fees 3,328 2,801
The Company has an agreement with the Manager for the provision of management and secretarial services.
74 Aberdeen New India Investment Trust PLC
During the year, the management fee was payable monthly in arrears and was based on an annual 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 £3,328,000 (2021 – £2,801,000) and the balance due to the Manager at the year end was £532,000 (2021 – £775,000). All
investment management fees are charged 100% to the revenue column of the Statement of Comprehensive Income.
Prior to 1 April 2021, the management fee was payable monthly in arrears based on an annual amount of 0.9% up to £350
million and 0.75% thereafter of the Company’s net assets, valued monthly.
5. Administrative expenses
2022 2021
£’000 £’000
Directors’ fees 133 122
Promotional activities 166 166
Auditor’s remuneration:
- fees payable for the audit of the Company’s annual financial statements 45 35
Legal and advisory fees 62 84
Custodian and overseas agents’ charges 320 252
Depositary fees 40 38
Other 161 124
927 821
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 £166,000 (2021 – £166,000) and
£42,000 (2021 – £42,000) was due to the Manager at the year end.
The only fees paid to KPMG LLP by the Company are the audit fees of £45,000 (2021 - £35,000). The amounts disclosed
above for Auditor’s remuneration are all shown net of VAT.
6. Finance costs
2022 2021
£’000 £’000
On bank loans 290 334
Finance costs are charged 100% to revenue as disclosed in the accounting policies.
Notes to the Financial Statements
Continued
Aberdeen New India Investment Trust PLC 75
7. Taxation
2022 2021
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 - 3,251 3,251 - - -
Indian capital gains tax charge refunded on sales - - - - (19) (19)
Overseas taxation 525 - 525 452 - 452
Total current tax charge for the year 525 3,251 3,776 452 (19) 433
Movement in deferred tax liability on Indian capital
gains
- 889 889 - 13,643 13,643
Total tax charge for the year 525 4,140 4,665 452 13,624 14,076
The Company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961.
On 1 April 2018, the Indian Government withdrew an exemption from capital gains tax on investments held for twelve
months or longer. The Company has recognised a deferred tax liability of £14,531,000 (2021 - £13,643,000) 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 a cess 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 shown in the Statement of Financial Position as an asset due for reclaim.
76 Aberdeen 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 (loss)/profit per the
Statement of Comprehensive Income as follows:
2022 2021
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Profit before tax 359 44,891 45,250 561 140,134 140,695
UK corporation tax on profit at the standard rate of
19% (2021 - 19%)
68 8,529 8,597 107 26,625 26,732
Effects of:
Gains on investments held at fair value through profit
or loss not taxable
- (8,565) (8,565) - (26,702) (26,702)
Currency losses not taxable - 65 65 - 77 77
Deferred tax not recognised in respect of tax losses 857 - 857 750 - 750
Expenses not deductible for tax purposes 6 - 6 1 - 1
Indian capital gains tax charged/(refunded) on sales - 3,251 3,251 - (19) (19)
Movement in deferred tax liability on Indian capital
gains
- 889 889 - 13,643 13,643
Irrecoverable overseas withholding tax 525 - 525 452 - 452
Non-taxable dividend income (931) - (931) (858) - (858)
Total tax charge 525 4,169 4,694 452 13,624 14,076
(c) At 31 March 2022, the Company had surplus management expenses and loan relationship debits with a tax value of
£6,949,000 (2021 – £4,424,000) 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
2022 2021
£’000 £’000
Amounts recognised as distributions paid during the year:
Interim dividend for 2020 from revenue reserves of 0.22p - 130
Interim dividend for 2020 from capital reserves of 0.78p - 455
- 585
There was no revenue available for distribution by way of dividend for the year ended 31 March 2022 (2021 – £109,000). An
interim dividend was paid during the year ended 31 March 2021 to satisfy the requirements of Sections 1158-1159 of the
Corporation Tax Act 2010 under which the Company qualifies as an investment trust in respect of the year ended 31 March
2020. For further details see the Directors’ Report on page 40 of the 2021 Annual Report.
Notes to the Financial Statements
Continued
Aberdeen New India Investment Trust PLC 77
9. (Loss)/return per Ordinary share
2022 2021
Revenue Capital Total Revenue Capital Total
Net (loss)/profit (£’000) (166) 40,751 40,585 109 126,510 126,619
Weighted average number of Ordinary shares
in issue
58,276,006 58,551,911
(Loss)/return per Ordinary share (pence) (0.28) 69.92 69.64 0.19 216.06 216.25
10. Investments held at fair value through profit or loss
2022 2021
(a) Valuation £’000 £’000
Opening book cost 255,914 246,479
Opening investment holdings fair value gains 145,755 18,165
Opening valuation 401,669 264,644
Movements in the year
:
Purchases 132,928 68,032
Sales - proceeds (139,794) (71,545)
Gains on investments 45,078 140,538
Closing valuation 439,881 401,669
2022 2021
£’000 £’000
Closing book cost 293,858 255,914
Closing investment holdings fair value gains 146,023 145,755
Closing valuation 439,881 401,669
The Company generated £139,794,000 (2021 – £71,545,000) from investments sold in the period. The book cost of
these investments when they were purchased was £94,984,000 (2021 – £58,597,000). 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.
78 Aberdeen 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 on investments at fair value through profit or loss in the
Statement of Comprehensive Income. The total costs were as follows:
2022 2021
£’000 £’000
Purchases 167 109
Sales 211 120
378 229
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
2022 2021
£’000 £’000
Amounts due from brokers 211 -
Recoverable tax on Indian dividends 1,019 485
Prepayments and accrued income 930 45
2,160 530
None of the above amounts are past their due date or impaired (2021 - nil).
12. Current liabilities
2022 2021
(a) Bank loan £’000 £’000
Loans repayable within one year 30,000 24,000
In July 2020, the Company agreed a £30 million two year uncommitted multicurrency revolving loan facility with Royal
Bank of Scotland International (London Branch). £30 million was drawn down at 31 March 2022 (31 March 2021 – £24
million) at an all–in interest rate of 1.0135% until 8 April 2022 (2021 – 0.94925% until 12 April 2021). On 30 June 2022, the
Company agreed an extension of the facility to 5 August 2022. At the date of this Report the Company had drawn
down £30 million at an all-in interest rate of 1.9036% until 6 July 2022.
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.
Notes to the Financial Statements
Continued
Aberdeen New India Investment Trust PLC 79
2022 2021
(b) Other payables £’000 £’000
Amounts due to brokers 2,019 -
Other creditors 1,268 1,038
3,287 1,038
13. Non-current liabilities
2022 2021
£’000 £’000
Deferred tax liability on Indian capital gains 14,531 13,643
14. Ordinary share capital
2022 2021
Number £’000 Number £’000
Authorised 200,000,000 50,000 200,000,000 50,000
Issued and fully paid
Ordinary shares of 25p each 57,937,127 14,485 58,385,328 14,597
Held in treasury:
Ordinary shares of 25p each 1,133,013 283 684,812 171
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 448,201 (2021 – 335,653) Ordinary shares of 25p each were repurchased by the Company at a total cost,
including transaction costs, of £2,696,000 (2021 – £1,511,000). All of the shares were placed in treasury. Shares held in
treasury represent 1.92% (2021 – 1.16%) of the Company’s total issued shares at the year end. Shares held in treasury do not
carry a right to receive dividends.
80 Aberdeen New India Investment Trust PLC
15. Analysis of changes in net debt
Net
Currency Cash
2021 differences flows 2022
£’000 £’000 £’000 £’000
Cash and short term deposits 2,588 (342) 7,526 9,772
Debt due within one year (24,000) – (6,000) (30,000)
(21,412) (342) 1,526 (20,228)
Net
Currency Cash
2020 differences flows 2021
£’000 £’000 £’000 £’000
Cash and short term deposits 8,578 (404) (5,586) 2,588
Debt due within one year (30,000) – 6,000 (24,000)
(21,422) (404) 414 (21,412)
A statement reconciling the movement in net funds to the net cash flow has not been presented as there are no differences
from the above analysis.
16. Net asset value per Ordinary share
The net asset value per Ordinary share is based on a net asset value of £403,995,000 (2021 - £366,106,000) and on
57,937,127 (2021 - 58,385,328) 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.
Notes to the Financial Statements
Continued
Aberdeen New India Investment Trust PLC 81
The Manager is a fully integrated member of abrdn, which provides a variety of services and support to the Manager in the
conduct of its business activities, including in the oversight of the risk management framework for the Company. The
Manager has delegated the day to day administration of the investment policy to the Investment manager, which is
responsible for ensuring that the Company is managed within the terms of its investment guidelines and the limits set out in
its pre-investment disclosures to investors (details of which can be found on the Company’s website). The Manager has
retained responsibility for monitoring and oversight of investment performance, product risk and regulatory and operational
risk for the Company.
The Manager conducts its risk oversight function through the operation of the abrdn’s risk management processes and
systems which are embedded within the abrdn’s operations. abrdn’s Risk Division supports management in the identification
and mitigation of risks and provides independent monitoring of the business. The Division includes Compliance, Business Risk,
Market Risk and Risk Management. The team is headed up by abrdn’s Chief Risk Officer, who reports to the CEO of the
Group. The Risk Division achieves its objective through embedding the Risk Management Framework throughout the
organisation using abrdn’s operational risk management system (“SHIELD”).
abrdn’s Internal Audit Department is independent of the Risk Division and reports directly to the abrdn’s CEO and to the Audit
Committee of abrdn’s Board of Directors. The Internal Audit Department is responsible for providing an independent
assessment of the abrdn’s control environment.
abrdn’s corporate governance structure is supported by several committees to assist the board of directors of abrdn, its
subsidiaries and the Company to fulfil their roles and responsibilities. abrdn’s Risk Division is represented on all committees,
with the exception of those committees that deal with investment recommendations. The specific goals and guidelines on
the functioning of those committees are described on the committees’ terms of reference.
Market risk. The fair value or future cash flows of a financial instrument held by the Company may fluctuate because of
changes in market prices. This market risk comprises three elements - interest rate risk, foreign currency risk and other
price risk.
Interest rate risk. The interest rate risk profile of the portfolio of the Company’s financial assets and liabilities, excluding equity
holdings which are all non-interest bearing, at the Statement of Financial Position date was as follows:
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 31 March 2022 Years % £’000 £’000
Assets
Sterling - - - 8,676
US Dollars - - - 15
Indian Rupee - - - 1,081
- 9,772
82 Aberdeen New India Investment Trust PLC
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 0.02 1.01 30,000 -
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
At 31 March 2021 Years % £’000 £’000
Assets
Sterling - - - 2,457
US Dollars - - - 7
Indian Rupee - - - 124
- 2,588
Weighted average Weighted
period for which average Fixed Floating
rate is fixed interest rate rate rate
Years % £’000 £’000
Liabilities
Bank loan - £24,000,000 0.08 0.95 24,000 -
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.
Notes to the Financial Statements
Continued
Aberdeen New India Investment Trust PLC 83
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 2022 would have decreased/increased by £202,000 (2021 – decrease/increase £214,000). 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:
2022 2021
Net Total Net Total
Overseas monetary currency Overseas monetary currency
investments assets exposure investments assets exposure
£’000 £’000 £’000 £’000 £’000 £’000
US Dollar 8,731 15 8,746 - 7 7
Indian Rupee 431,150 1,081 432,231 401,669 124 401,793
439,881 1,096 440,977 401,669 131 401,800
Foreign currency sensitivity. The following table details the positive impact to a 10% decrease in Sterling against the foreign
currency in which the Company has exposure. The sensitivity analysis includes foreign currency denominated monetary
items and adjusts their translation at the year end for a 10% change in foreign currency rates. In the event of a 10% increase
in Sterling then there would be a negative impact on the Company’s returns.
2022 2022 2021 2021
Revenue Equity
A
Revenue Equity
A
£’000 £’000 £’000 £’000
US Dollar - 875 2 1
Indian Rupee 506 43,223 450 40,179
506 44,098 452 40,180
A
Represents equity exposure to relevant currencies.
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.
84 Aberdeen New India Investment Trust PLC
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, as detailed on
page 92, 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 while all other
variables remained constant, the return attributable to Ordinary shareholders for the year ended 31 March 2022 would have
increased /(decreased) by £65,982,000 (2021 - increased/(decreased) by £60,250,000) and capital reserves would have
increased /(decreased) by the same amount.
Liquidity risk. This is the risk that the Company will encounter difficulty in meeting obligations associated with
financial liabilities.
Management of the risk. The Board imposes borrowing limits to ensure gearing levels are appropriate to market conditions
and reviews these on a regular basis. Borrowings comprise a £30 million revolving multi-currency credit facility, which expires
on 5 August 2022. Other payables are settled within one year. Details of borrowings and other payables at 31 March 2022 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
£30,000,000 (2021 – £24,000,000) was drawn down at the year end. Other payables amounted to £3,287,000
(2021 – £1,038,000).
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 (2021 - same).
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:
Notes to the Financial Statements
Continued
Aberdeen New India Investment Trust PLC 85
2022 2021
Statement Statement
Financial Maximum Financial Maximum
Position Exposure Position Exposure
£’000 £’000 £’000 £’000
Current assets
Loans and receivables 1,086 1,086 – –
Cash at bank and in hand 9,772 9,772 2,588 2,588
10,858 10,858 2,588 2,588
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 (2021 - same).
Fair values of financial assets and financial liabilities. The fair value of bank loans are represented in the table below;
2022 2021
£’000 £’000
Bank loan 30,000 24,000
Investments held at fair value through profit or loss are valued at their quoted bid prices which equate to their fair values.
For the fixed rate GBP loan, the fair value of borrowings has been calculated at £30,000,000 as at 31 March 2022 (2021 -
£24,000,000) compared to an accounts value in the financial statements £30,000,000 (2021 - £24,000,000) (note 12).
The Directors are of the opinion that the other financial assets and liabilities carried at amortised cost equates to their
fair value.
18. Ca
p
ital mana
g
ement
p
olicies and
p
rocedures
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.
86 Aberdeen New India Investment Trust PLC
19. Fair value hierarch
y
IFRS 13 ‘Fair Value Measurement’ requires an entity to classify fair value measurements using a fair value hierarchy that
reflects the subjectivity of the inputs used in making measurements. The fair value hierarchy has the following levels:
Level 1: quoted (unadjusted) market prices in active markets for identical assets or liabilities;
Level 2: valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable; and
Level 3: valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value
hierarchy at the Statement of Financial Position date are as follows:
Level 1 Level 2 Level 3 Total
As at 31 March 2022 Note £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Quoted equities a) 439,881 – – 439,881
Net fair value 439,881 – – 439,881
Level 1 Level 2 Level 3 Total
As at 31 March 2021 Note £’000 £’000 £’000 £’000
Financial assets at fair value through profit or loss
Quoted equities a) 401,669 – – 401,669
Net fair value 401,669 – – 401,669
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. Controllin
g
p
art
y
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
p
art
y
transactions and transactions with the Mana
g
er
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 55 to 57.
Transactions with the Manager. The Company has an agreement with Aberdeen Standard 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.
Notes to the Financial Statements
Continued
Aberdeen New India Investment Trust PLC 87
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.
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.
2022 2021
NAV per Ordinary share a 697.30p 627.05p
Share price b 562.00p 542.00p
Discount (a-b)/a 19.4% 13.6%
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.
2022 2021
Borrowings (£’000) a 30,000 24,000
Cash (£’000) b 9,772 2,588
Amounts due to brokers (£’000) c 2,019 -
Amounts due from brokers (£’000) d 211 -
Shareholders’ funds (£’000) e 403,995 366,106
Net gearing (a-b+c-d)/e 5.5% 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.
2022 2021
Investment management fees (£’000) 3,328 2,801
Administrative expenses (£’000) 927 821
Less: non-recurring charges
A
(£’000) (28) –
Ongoing charges (£’000) 4,227 3,622
Average net assets (£’000) 399,442 312,355
Ongoing charges ratio 1.06% 1.16%
A
Professional fees unlikely to recur.
Alternative Performance Measures
88 Aberdeen New India Investment Trust PLC
The ongoing charges ratio provided in the Company’s Key Information Document is calculated in line with the PRIIPs regulations which
includes amongst other things, the cost of borrowings and transaction costs.
Total return
NAV and share price total returns show how the NAV and share price has performed over a period of time in percentage terms, taking
into account both capital returns and dividends paid to shareholders. Share price and NAV total returns are monitored against open-
ended and closed-ended competitors, and the Benchmark, respectively.
Share
Year ended 31 March 2022 NAV Price
Opening at 1 April 2021 a 627.05p 542.00p
Closing at 31 March 2022 b 697.30p 562.00p
Price movements c=(b/a)-1 11.2% 3.7%
Dividend reinvestment
A
d N/A N/A
Total return c+d +11.2% +3.7%
Share
Year ended 31 March 2021 NAV Price
Opening at 1 April 2020 a 411.41p 328.00p
Closing at 31 March 2021 b 627.05p 542.00p
Price movements c=(b/a)-1 52.4% 65.2%
Dividend reinvestment
A
d 0.3% 0.4%
Total return c+d +52.7% +65.6%
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
Aberdeen New India Investment Trust PLC 89
Aberdeen Standard 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: aberdeen-newindia.co.uk.
There have been no material changes to the disclosures contained within the PIDD since its publication in June 2022.
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 8 to 22, 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 contact addresses on page 105) and the remuneration disclosures in respect of the
Manager’s reporting period ended 31 December 2021, are available on the Company’s website.
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 2022 1.17:1 1.19:1
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 Aberdeen Standard Fund Managers Limited which is
authorised and regulated by the Financial Conduct Authority in the United Kingdom.
Alternative Investment Fund Managers Directive
Disclosures
(
unaudited
)
90 Aberdeen 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
£542 billion at 31 December 2021.
Architectural details of the white columns of
Mumbai International Airport, which serves a
metropolitan population of over 20 million residents.
Aberdeen New India Investment Trust PLC 91
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 which is headquartered in Edinburgh with principal
offices in Aberdeen, London, Singapore, Philadelphia,
Bangkok, Edinburgh, Hong Kong, Luxembourg, Kuala
Lumpur, Jersey, Sao Paulo, Stockholm, Sydney, Taipei,
and Tokyo.
abrdn managed or administered over £542 billion (as at
31 December 2021) in assets for a range of clients,
including individuals and institutions, through mutual and
segregated funds
The Investment Team
Kristy Fong
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.
Pruksa Iamthongthong
Investment Director
CFA® charterholder, BA in Business Administration,
Chulalongkorn University, Thailand. Joined the Investment
Manager in 2007.
James Thom
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 Mana
g
er
92 Aberdeen 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.
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 Mana
g
er
Continued
Aberdeen New India Investment Trust PLC 93
Pre-Investment Disclosure Document (“PIDD”)
The Company has appointed the Manager as its
alternative investment fund manager and BNP Paribas
Securities Services, London Branch as its depositary, under
the Alternative Investment Fund Managers Directive
(“AIFMD”).
The AIFMD requires the Manager, as the alternative
investment fund manager (“AIFM”) of Aberdeen 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: aberdeen-newindia.co.uk. The periodic
disclosures required to be made by the Manager under
the AIFMD are set out on page 89.
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 our
Customer Services Department using the details on
page 105.
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 Contact
Addresses on page 105). Changes of address must be
notified to the registrar in writing.
If you have any general questions about your Company,
the Manager or performance, please contact abrdn
Customer Services Department by calling 0808 500 0040,
sending an email to inv.trusts@abrdn.com or by writing to:
abrdn Investment Trusts, PO Box 11020, Chelmsford,
Essex CM99 2DB.
How to Invest
Investors can buy and sell shares in the Company directly
through a stockbroker or indirectly through a lawyer,
accountant or other professional adviser. Alternatively, for
retail clients, shares can be bought directly through the
abrdn Plan for Children, abrdn Investment Trust Share
Plan or abrdn Investment Trust ISA.
abrdn Plan for Children
abrdn operates an Investment Plan for Children (the
“Children’s Plan”) which covers a number of investment
companies under its management including Aberdeen
New India Investment Trust PLC. Anyone can invest in the
Children’s Plan, including parents, grandparents and
family friends (subject to the eligibility criteria as stated
within terms and conditions). All investments are free of
dealing charges on the initial purchase of shares, although
investors will suffer the bid-offer spread, which can, on
some occasions, be a significant amount. Lump sum
investments start at £150 per trust, while regular savers
may invest from £30 per month. Investors simply pay
Government Stamp Duty (currently 0.5%) on purchases,
where applicable. Selling costs are £10 + VAT. There is no
restriction on how long an investor need invest in the
Children’s Plan, and regular savers can stop or suspend
participation by instructing abrdn in writing at any time.
Investor Information
94 Aberdeen New India Investment Trust PLC
abrdn Share Plan
abrdn operates a Share Plan (the “Plan”) through which
shares in the Company can be purchased. There are no
dealing charges on the initial purchase of shares, although
investors will suffer the bid-offer spread, which can, on
some occasions, be a significant amount. Lump sum
investments start at £250, while regular savers may invest
from £100 per month. Investors only pay Government
Stamp Duty (currently 0.5%) on purchases, where
applicable. Selling costs are £10 + VAT. There is no
restriction on how long an investor need invest in a Plan,
and regular savers can stop or suspend participation by
instructing abrdn in writing at any time.
abrdn ISA
abrdn offers an Investment Trust ISA (“ISA”) through which
an investment may be made of up to £20,000 in tax year
2022/2023.
There are no brokerage or initial charges for the ISA,
although investors will suffer the bid-offer spread, which
can, on some occasions, be a significant amount. Investors
only pay Government Stamp Duty (currently 0.5%) on
purchases, where applicable. Selling costs are £15 + VAT.
The annual ISA administration charge is £24 + VAT,
calculated annually and applied on 31 March (or the last
business day in March) and collected soon thereafter
either by direct debit or, if there is no valid direct debit
mandate in place, from the available cash in the ISA prior
to the distribution or reinvestment of any income, or,
where there is insufficient cash in the ISA, from the sale of
investments held under the ISA. Under current legislation,
investments in ISAs can grow free of capital gains tax.
ISA Transfer
You can choose to transfer previous tax year investments
to us which can be invested in Aberdeen New India
Investment Trust PLC while retaining your ISA wrapper.
The minimum lump sum for an ISA transfer is £1,000 and is
subject to a minimum per investment trust of £250.
Nominee Accounts and Voting Rights
In common with other schemes of this type, all
investments in the abrdn Children’s Plan for Children,
abrdn Investment Trust Share Plan and abrdn Investment
Trust ISA are held in nominee accounts and investors are
provided with the equivalent of full voting and other rights
of share ownership.
Keeping You Informed
Further information on the Company can be found on its
own dedicated website: aberdeen-newindia.co.uk. This
provides access to information on the Company’s share
price performance, capital structure, stock exchange
announcements and a Manager’s monthly factsheet.
Alternatively you can call 0808 500 0040 (free when
dialling from a UK landline) for trust information.
If private investors have any questions about the
Company, the Manager or performance, please contact
abrdn Customer Services Department using the details on
page 105.
Key Information Document (“KID”)
The KID relating to the Company, for which the Manager is
responsible, may be found on the Company’s website.
Literature Request Service
For literature and application forms for abrdn Children’s
Plan for Children, Share Plan, ISA or ISA Transfer
please contact:
abrdn
PO Box 11020
Chelmsford
Essex CM99 2DB
Telephone: 0808 500 4000
(free when dialling from a UK landline)
Terms and conditions for abrdn savings products can also
be found under the ‘Literature’ section of invtrusts.co.uk
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
Continued
Aberdeen New India Investment Trust PLC 95
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.
Online Dealing
There are a number of online dealing platforms for private
investors that offer share dealing, ISAs and other means to
invest in the company. Real-time execution-only
stockbroking services allow you to trade online, manage
your portfolio and buy UK listed shares. These sites do not
give advice. Some comparison websites also look at
dealing rates and terms.
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:
fca.org.uk/firms/financial-services-register
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 93 to 95 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 Aberdeen Asset Managers Limited which is
authorised and regulated by the Financial Conduct
Authority in the United Kingdom.
96 Aberdeen New India Investment Trust PLC
General
The Annual General Meeting
of Aberdeen New India
Investment Trust PLC will be
held at Bow Bells House, 1
Bread Street, London EC4M
9HH, at 12.30pm on
28 September 2022
The Matrimandir, situated in Auroville,
Tamil Nadu, does not belong to any
particular religion or sect, and was
completed in 2008.
Aberdeen New India Investment Trust PLC 97
Notice is hereby given that the Annual General Meeting of Aberdeen New India Investment Trust PLC will be held at Bow
Bells House, 1 Bread Street, London EC4M 9HH, at 12.30pm on 28 September 2022 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 2022.
2. To receive and adopt the Directors’ Remuneration Report for the year ended 31 March 2022 (other than the
Directors’ Remuneration Policy).
3. To elect David Simpson as a Director of the Company.
4. To 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 2023.
Special Business
As special business to consider and, if thought fit, pass the following Resolutions in the case of Resolution 8 and 10 as
Ordinary Resolutions and in the case of Resolutions 9, 11 and 12 as Special Resolutions:
Continuation Vote
8. To approve the continuation of the Company as an investment trust.
Authority to Make Market Purchases of Shares
9. 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 8,630,806 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 2023 or on 30 September 2023, 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 Meetin
g
98 Aberdeen New India Investment Trust PLC
Authority to Allot Shares
10. 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
£719,713 (representing approximately 5% 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 2023 or on 30 September 2023, 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
11. THAT, subject to the passing of Resolution 10 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 (b) below) up to an aggregate nominal amount of £719,713
(representing approximately 5% 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 2023 or on 30
September 2023, 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.
Notice of Annual General Meetin
g
Continued
Aberdeen New India Investment Trust PLC 99
Articles of Association
12. THAT the articles of association of the Company be and are hereby amended by:
1. conditional on the passing of resolution 8, deleting in Article 166.2 the words "each" and "2011" and inserting in
their place the words "every fifth" and "2027" respectively; and
2. deleting Article 173 in its entirety.
By order of the Board
Aberdeen Asset Management PLC
Company Secretary
Registered Office
Bow Bells House
1 Bread Street
London EC4M 9HH
30 June 2022
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 his or her proxy(ies) will need to ensure that both he or she and his/her
proxy(ies) comply with their respective disclosure obligations under the UK Disclosure Guidance and
Transparency Rules.
100 Aberdeen New India Investment Trust PLC
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.
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.
Notice of Annual General Meetin
g
Continued
Aberdeen New India Investment Trust PLC 101
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: aberdeen-newindia.co.uk
xiv. Further information regarding the meeting is available from: aberdeen-newindia.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.
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 30 June 2022 (being the last practicable date prior to publication of this notice) the Company’s issued
share capital comprised 57,577,097 Ordinary shares of 25p each with voting rights and 1,493,043 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 as at 30 June 2022 was 57,577,097.
xviii. There are special arrangements for holders of shares through the abrdn Share Plan, abrdn Investment Trusts
ISA or abrdn Investment Plan for Children. These are explained in the separate ‘Letter of Direction’ which such
holders will have received with this Annual Report.
xix. 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 Aberdeen 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.
102 Aberdeen New India Investment Trust PLC
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
Aberdeen New India Investment Trust PLC
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 (formerly Aberdeen Standard
Investments (Asia) Limited), a wholly owned subsidiary of
abrdn
Manager
Aberdeen Standard Fund Managers Limited, a wholly
owned subsidiary of abrdn, has been appointed as the
alternative investment fund manager for 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
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.
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
Aberdeen New India Investment Trust PLC 103
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
(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.
104 Aberdeen New India Investment Trust PLC
Aberdeen New India Investment Trust PLC 105
Directors
Hasan Askari (Chairman)
Michael Hughes (Senior Independent Director)
Stephen White (Chairman of the Audit Committee)
Rebecca Donaldson
David Simpson
Andrew Robson (from 1 August 2022)
Company Secretaries
Aberdeen Asset Management PLC
1 George Street
Edinburgh EH2 2LL
Registered Office and Company Number
Bow Bells House
1 Bread Street
London EC4M 9HH
Registered in England & Wales under company
number 02902424
Website
aberdeen-newindia.co.uk
Points of Contact
The Chairman or Company Secretaries at the
Registered Office of the Company.
Legal Entity Identifier
549300D2AW66WYEVKF02
United States Internal Revenue Service
FATCA Registration Number (“GIIN”)
U2I09D.99999.SL.826
abrdn Customer Services Department and
abrdn Children’s Plan, Share Plan and ISA
enquiries
abrdn
PO Box 11020
Chelmsford
Essex CM99 2DB
Freephone: 0808 500 0040
(Lines are open Monday to Friday from 9.00am – 5.00pm,
excluding public holidays in England & Wales)
Email: inv.trusts@abrdn.com
or
new.india@abrdn.com
abrdn Social Media Accounts
Twitter: @abrdnTrusts
LinkedIn: abrdn Investment Trusts
Alternative Investment Fund Manager
Aberdeen Standard Fund Managers Limited
Bow Bells House
1 Bread Streett
London EC4M 9HH
Authorised and regulated by the Financial Conduct
Authority
Investment Manager
abrdn Asia Limited
21 Church Street
#01-01 Capital Square Two
Singapore 049480
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
20 Castle Terrace
Edinburgh EH1 2EG
Stockbrokers
Winterflood Securities Limited
The Atrium Building
Cannon Bridge
25 Dowgate Hill
London EC4R 2GA
Depositary
BNP Paribas Securities Services,
London Branch
10 Harewood Avenue
London NW1 6AA
Contact Addresses
For more information visit aberdeen-newindia.co.uk
abrdn.com