TIDMANII
RNS Number : 3734U
abrdn New India Investment Trust
23 November 2023
abrdn New India Investment Trust plc
Half Yearly Report for six months ended 30 September 2023
Seeking world-class, well governed companies at the heart of
India's growth
Why invest in India?
Aspiration
India's population is the largest in the world with an expanding
middle class which will drive consumption growth.
Building India
Urbanisation and infrastructure development have multiplier
effects for job creation and the wider economy.
Renewables
India has committed to meeting half of its energy needs from
renewable sources by 2030
Domestic opportunities
Global businesses are investing in, and shifting production to,
India, drawn by a wealth of incentives and opportunities.
Exporting talent
India's giant tech service sector, built on a highly educated
and diligent workforce, drives the export of services by helping
global companies keep pace with the fast-changing tech innovation
landscape.
Digitalisation
India has made immense progress in digital investments, which
will underpin its rise to be one of the largest global economies by
the middle of the century.
Why invest in abrdn New India Investment Trust plc?
Robust financial strength and sustainable competitive
advantage
Indian companies meeting a 'quality' threshold are included in
the portfolio, displaying both strong financial characteristics and
a consistent competitive advantage in attractive industries or
sectors.
Engaged Management
The management of the best companies in India is world-class and
understands the importance of sustainability and good governance to
drive the best outcomes for investors and other stakeholders.
Quality of management is a key attribute sought in portfolio
companies.
Return of growth stocks
As interest rates peak globally over the medium term, investors
will seek out growth stocks which are set to benefit. The
portfolio's focus on those Indian companies with the desire and
capacity to expand will drive performance.
Performance Highlights
Performance (total return in Sterling terms)
Six months Year ended
ended
30 September 31 March 2023
2023
% %
=============================================== ============= ==============
Share price(A) +13.7 -8.9
=============================================== ============= ==============
Net asset value per Ordinary Share(A) +13.2 -8.0
=============================================== ============= ==============
Adjusted net asset value per Ordinary Share(A) +14.7 -8.5
=============================================== ============= ==============
MSCI India Index (Sterling adjusted) +17.1 -6.0
----------------------------------------------- ------------- --------------
(A) Considered to be an Alternative Performance Measure.
Source: abrdn, Morningstar & Factset
Performance (total return in Sterling terms) for year(s) ended
30 September 2023
1 year 3 year 5 year 10 year
% return % return % return % return
============================== ========= ========= ========= =========
Share price(A) +0.7 +34.1 +35.2 +199.2
============================== ========= ========= ========= =========
Net asset value per Ordinary
Share(A) -1.6 +40.4 +44.9 +216.2
============================== ========= ========= ========= =========
MSCI India Index (Sterling
adjusted) +1.1 +62.9 +73.4 +241.5
------------------------------ --------- --------- --------- ---------
(A) Considered to be an Alternative Performance Measure.
Source: abrdn, Morningstar
& Factset
Financial Highlights and Financial Calendar
Financial Highlights
30 September 31 March % change
2023 2023
====================================== ============= ========= =========
Total shareholders' funds (GBP'000) 391,311 357,919 + 9.3
====================================== ============= ========= =========
Share price (mid-market) 582.00p 512.00p + 13.7
====================================== ============= ========= =========
Net asset value per share 725.75p 641.32p + 13.2
====================================== ============= ========= =========
Adjusted net asset value per share(A) 731.99p 637.97p + 14.7
====================================== ============= ========= =========
Discount to net asset value(AB) 19.8% 20.2%
====================================== ============= ========= =========
Net gearing(A) 4.1% 5.8%
====================================== ============= ========= =========
Ongoing charges ratio(A) 1.02% 1.09%
====================================== ============= ========= =========
Rupee to Sterling exchange rate 101.36 101.61 + 0.3
====================================== ============= ========= =========
(A) Considered to be an Alternative Performance Measure.
(B) Based on unadjusted net asset value per share.
Financial Calendar
Financial year end March 2024
================================================ ===============
Expected announcement of annual results for the June 2024
year ending 31 March 2024
================================================ ===============
Annual General Meeting (London) September 2024
================================================ ===============
Chairman's Statement
Dear Shareholder
India has defied a global environment rife with volatility and
uncertainty to stage an impressive comeback over the last six
months, galloping ahead of developed and emerging markets alike.
During this period, the Company's net asset value ("NAV") rose
13.2% in sterling terms (total return) - a sharp turnaround from
the previous six months. The Company's share price was up 13.7% and
the discount to NAV now sits at 19.8%, narrowing marginally from
20.2% at the end of March. While this positive performance is
undoubtedly welcome news, the portfolio has lagged its benchmark,
the MSCI India Index, which rose 17.1%.
Exuberant investors in sharply rising markets initially tend to
chase after short-term trends while overlooking the longevity of
companies with pricing power and strong balance sheets. Both
fundamentals and the long-term prospects of your Company's
portfolio holdings are intact and your Manager is working hard to
improve performance.
Overview
The Indian stock market's strong display over this period goes
hand in hand with a robust and resilient domestic economy. After
reporting growth of over 7% in the previous fiscal year, India's
GDP rose 7.8% on-year for the first quarter of fiscal year 2024 -
the fastest pace in 12 months.
Confidence is running high across several parts of the Indian
economy. The property sector is buoyant once again, just a few
years after a crash that saw the government tightening up lending
and monitoring. Banks are in the strongest position they have been
in years, with balance sheets at their most robust in well over a
decade. Further boosting the economy is a notable rise in public
infrastructure spending. In the first four months of this fiscal
year, India has spent a little over 3 trillion rupees
(approximately GBP31 billion) on building infrastructure, marking a
55% jump from the year before.
Another positive factor in India's favour is that inflation is
now manageable. Despite fluctuations here and there, consumer
prices have broadly come down during this period, translating into
lower input costs for companies. July, however, was an aberration.
A surge in vegetable prices, due to uneven distribution of rainfall
during the Monsoon season, temporarily pushed inflation to above
7%. Although that was a surprise, it was not enough to prompt the
Reserve Bank of India into action. The central bank has suspended
further rate rises just now, while remaining cautious about more
unexpected spikes in inflation going forward.
Looking at your Company's performance during this period, the
strongest contributions were from real estate and health care,
where the fund has considerably greater exposure compared to the
benchmark. The Indian real estate sector is seeing a long overdue
recovery in residential property sales, while demand for health
care is also on the rise. Your Company's position in the financials
and consumer sectors disappointed largely due to the share price
performances of HDFC Bank and Hindustan Unilever , both of which
remain high-quality businesses. The Board and I continue to have
faith in the trust's long-term growth potential. Your Manager has
continuously adapted the portfolio to market conditions,
introducing new names and adding to existing ones to take advantage
of India's growth and structural trends. You can read a more
detailed breakdown of this interim performance and changes made to
the portfolio in the Investment Manager's Report.
Environmental, Social and Governance
I am pleased to note that the Company's portfolio was recently
rated "A" under the MSCI ESG Rating. This reflects well on your
Investment Manager's consistent efforts to engage with the
companies held within your Company's portfolio and efforts to drive
improvements on various issues. More details on your Investment
Manager's ESG process can be found in the Investment Manager's
Report and Case Studies, as well as in the latest Annual Report. A
Sustainable Investment Report is also published every six months
and is available at www.abrdnnewindia.co.uk.
Conditional tender offer
In March 2022 the Board announced the introduction of a
five-yearly performance-related conditional tender offer. The Board
decided that, should the Company's NAV total return underperform
the Company's Benchmark over the five-year period from 1 April
2022, then shareholders will be offered the opportunity to realise
up to 25 per cent of their investment for cash at a level close to
NAV. For these purposes, the Company's NAV per share is adjusted
for Indian capital gains tax (the "Adjusted NAV") to enable a
like-for-like comparison with the Benchmark.
Over the period from 1 April 2022 to 30 September 2023, the
Adjusted NAV's total return was 5.0% as compared to 10.1% for the
Benchmark total return (for further information, please see the
Alternative Performance Measures).
Shareholder Engagement
The Board encourages shareholders to visit the Company's website
(www.abrdnnewindia.co.uk) or other social media channels for the
latest information and access to podcasts, thought-leadership
articles and monthly factsheets. The Board is seeking to improve
the information available to shareholders and to encourage greater
interaction. Further to this, the Board has supported the
enhancement of the website, alongside more frequent updates by the
Investment Manager.
Discount and Share Buybacks
The Board continues to monitor actively the discount of the
Ordinary share price to the NAV per Ordinary share and pursues a
policy of selective buybacks of shares where to do so, in the
opinion of the Board, is in the best interests of shareholders,
whilst also having regard to the overall size of the Company.
Over the six months under review, the discount to NAV narrowed
from 20.2% to 19.8%. During the period, 1.9m Ordinary shares were
bought back by the Company, marking a significant increase on the
0.6m shares bought back in the equivalent prior period and in line
with the 2.1m shares bought back for the full year ended 31 March
2023.
The Board believes that a combination of stronger long-term
performance and effective marketing communication should increase
demand for the Company's shares and reduce the discount to NAV at
which they trade, over time.
Outlook
There are certainly plenty of positives attracting investors to
India. It is one of the world's fastest-growing major economies,
benefiting from its resilient domestic macro environment.
Supportive government policy has helped this and is likely to
remain this way for the foreseeable future, with sufficient fiscal
discipline to not worry investors. Continuing expansion of public
capital expenditure will support growth momentum, creating more
jobs and potentially reviving private capex as well. Even with
elections to be held next year, India has less perceived
geopolitical risk compared with other emerging market nations, and
its companies are benefiting from the "China plus One" strategy as
global businesses seek to diversify their supply chains.
Following shareholder approval at the Annual General Meeting in
September 2023, the Company may now invest up to 10% of its net
assets in unlisted investments. This is intended to give your
Manager further flexibility in where to look for quality as the
market continues to mature. As with any other areas of investment
though, we carefully consider any opportunities and balance the
potential risk and reward involved. This change allows your Manager
to cast a wider net for quality names, but we can assure
shareholders this will not involve any element of compromise on its
disciplined and careful approach. Local regulatory approvals are
now being sought.
The most recent strong rally aside, India has a lot to offer
investors looking to the longer term. With its large population,
favourable demographics and evolving middle class, India is a
formidable investment opportunity. The structural growth stories we
have referenced in previous reports: domestic consumption,
urbanisation and infrastructure, together with increasing
digitalisation, are as compelling as ever. As a Board, we remain
confident in the focus on quality and take great comfort in the
Manager's long-term quality approach. The Board is equally mindful
of the need for the Investment Manager to take sufficient risk to
ensure that the Company benefits from this resilient economy over
the medium term. The Board believes in the Manager's experienced
management team which has assembled a portfolio containing
well-managed and resilient companies that are able to keep growing
earnings, with strong balance sheets and pricing power that enables
them to thrive through economic cycles.
Michael Hughes
Chairman
22 November 2023
Investment Manager's Report
Market review
Over the six months ending 30 September 2023, the Company's net
asset value ("NAV") total return increased by 13.2% in sterling
terms, while the MSCI India Index increased by 17.1%. The bulk of
the underperformance can be attributed to the fund's holdings in
financials, consumer, and energy sectors. The biggest contributors
were the large active position in real estate and stock selection
in health care.
The global equity market saw an exceptional amount of volatility
over this period. Investors fretted over higher for longer interest
rates in the US and the stuttering pace of China's economic
recovery. India bucked a downward trend to emerge as one of the
best-performing major equity markets, pushing ahead of the broader
Asia-Pacific ex-Japan region, global emerging markets, and
developed markets.
In rising markets such as the one we have seen in India over the
interim period, quality as an investment style - which your Company
follows - tends to underperform initially. This has been broadly
consistent with how the fund has performed in the past. We would
point out that despite lagging the benchmark, the financial health
and prospects of the portfolio's holding companies remain robust as
ever.
Market and Performance overview
India's economy is in an enviable sweet spot. While resilient to
external headwinds, domestic conditions are getting better.
Inflation has retreated to manageable levels; factory output is
rising steadily; the government is leading the charge to build more
infrastructure while consumer spending is gradually getting better.
The housing market has also become more affordable. All of these
factors coalesce into an encouraging outlook for the Indian economy
and has underpinned the strong display in the equity market.
Two major themes have dominated Indian stocks over the period:
first, a sharp rally in small and mid-cap companies that
predominantly make up corporate India. Secondly, as we mention
above, quality companies have suffered in this rising market where
investors chased stocks that have performed well in the short term
without considering the company fundamentals. Both of these themes
have had mixed impact on the fund's performance.
The small and mid-cap rally benefitted your Company's holdings,
including real estate developers Prestige Estates and Godrej
Properties . Both companies are owned by reputable local families
and have held up well through the earlier property crisis, posted
robust pre-sale numbers on a long overdue recovery in residential
property sales. Other names that contributed to relative
performance on the back of this rally include our diversified
healthcare exposure in hospital chain Fortis Healthcare ,
diagnostics provider Vijaya Diagnostic Centre , contract biopharma
manufacturer Syngene International and pharmaceutical company JB
Chemicals & Pharma . All of those companies also posted strong
results and continue to have robust financial positions and
competitive edge. Electrical wires and cables manufacturer KEI
Industries also performed well on improving market sentiment
towards the company's ability to capitalise on industry demand.
The underperformance in large-cap quality names was most
pronounced in our core holdings in the financials and consumer
sectors, namely HDFC Bank and Hindustan Unilever ,
respectively.
HDFC Bank completed its long anticipated merger with HDFC in
July. We believe in the long-term potential of the merged entity,
trading as HDFC Bank, in terms of revenue and cost synergies. The
stock, however, weighed due to market rebalancing following the
completion of the merger. It continued to lag in subsequent months
after disclosing weaker-than-expected growth and returns in the
post-merger proforma financial statement. We believe the share
price is currently undervalued in relation to the potential the
company has and will closely monitor the post-merger execution.
Within financials, the portfolio is skewed towards banks that
assume lower lending risk and remain attractively valued. As a
result, performance was affected after non-banking financial
companies outperformed the banks as their growth prospects turned
more promising in a potential peaking of the interest rate cycle.
Specifically, not holding Bajaj Finance was costly. Your Company
does, however, hold housing finance provider Aptus Value Housing
Finance , which contributed to performance and we have built our
position in the stock this year following an encouraging meeting
with the management.
Likewise, in the consumer sectors, we lean more towards
companies in consumer staples in line with our investing style as
they tend to deliver steadier returns compared to discretionary
names. The main staples holding, Hindustan Unilever, lagged the
market due to lacklustre results as its pricing growth slowed on
account of easing inflation in the country. The company, however,
is still seeing volume growth and its margins are both resilient
and ahead of peers thanks to its reach and penetration. We think
Hindustan Unilever is poised to benefit from its dominant position
in rural India once demand there recovers. Discretionary names
performed better and our lower exposure cost us. While not holding
companies like Tata Motors and Zomato detracted, the fund enjoyed
positive contribution from the other auto names Mahindra &
Mahindra and Maruti Suzuki and jewellery retailer Titan Industries
.
Finally, in the energy sector our exposure to Aegis Logistics
succumbed to profit taking following a strong run influenced by
higher oil prices and healthy company earnings. On a positive note,
one that re-emphasises our preference for quality, not holding
industry bellwether Reliance Industries offset some of the
underperformance from Aegis. The company still has not met our
quality and corporate governance criteria. We also remain
unconvinced about the returns generated from its underlying
businesses.
Portfolio Activity
While we remain committed to our long-term quality investment
approach, we have been proactive in our portfolio activity to
insulate the trust from downside risk and to position it for gains
from sectors and themes that are enjoying structural and cyclical
tailwinds. In anticipation of the US economy eventually losing
steam next year and sparking a US-led recession, we have trimmed
our weight in IT software and services holdings Infosys and Tata
Consultancy Services . The US is a key market for both companies
where it is likely that corporate IT spending will be affected.
On the other hand, we have built our positions in the
industrials sector by adding to names such as KEI Industries and
ABB India. We also initiated Siemens, one of the key international
capital equipment manufacturers and distributors in India, feeding
into a diversified array of demand across sectors. This is in line
with the Indian government's push to build more infrastructure
where we expect these names to be beneficiaries. We also introduced
Coromandel International within the materials sector, which is a
farming solutions provider that is likely to benefit from a
reversal in rural and agricultural demand in India.
In anticipation of widespread recovery in consumption, we added
to our positions in Tata Consumer Products and Titan, both of which
have performed well since initiation prior to the review period.
These additions were funded with our exits from low conviction
names such as FSN E-Commerce Ventures (Nykaa) and Crompton Greaves
Consumer Electricals.
During the period we repaid approximately GBP4 million of the
Company's short-term bank borrowing. The market is very expensive,
due to rising valuations, while interest costs remain high. With
these factors in mind, lower gearing seemed a sensible option.
Outlook
India is currently one of the best emerging market opportunities
as the world remains in a wait-and-watch mode on interest rate
policy trajectories. India's early stages of a cyclical upswing are
supported by moderate inflation, an expected pickup in consumption
demand, relative geopolitical stability, and the "China plus One"
strategy making the country an attractive manufacturing
destination.
While the macro picture looks promising, it is never without
risk. India's external balances remain vulnerable to oil price
volatility. The outcome of the 2024 parliamentary elections poses a
key risk, though the market broadly expects Modi to retain power.
In addition, there could be a reversal of high valuations and the
rotation benefit that India has enjoyed.
However, despite these near-term obstacles, we remain positive
on India over the long term. The Company's downside is well
protected given our quality focus, and our defensive holdings are
in a good position in case of profit taking. Furthermore, any
correction in the market would be an opportunity to add to the
holdings. The consistency of earnings growth of the portfolio
remains healthy and individual company fundamentals, such as
pricing power, strong balance sheets and the ability to sustain
margins, remain solid.
Kristy Fong and James Thom
Investment Manager
22 November 2023
Ten Largest Investments
As at 30 September 2023
ICICI Bank HDFC Bank
ICICI Bank has been delivering HDFC Bank is India's leading private
superior growth and returns improvement sector bank that now has a complete
without compromising on asset quality. suite of retail banking products
It has leveraged on its scale as after the merger with HDFC, India's
well as retail and digital franchise leading provider of mortgage finance.
to grow in mortgages and also growing The bank has solid underwriting
off a low base in business banking standards and a progressive digital
and SMEs. stance, further strengthening its
competitive edge.
Hindustan Unilever Infosys
The largest fast-moving consumer One of India's best software developers,
goods company (FMCG) in India, it continues to impress with its
with an unrivalled portfolio of strong management, solid balance
brands, an extensive nationwide sheet and sustainable business model.
distribution network, and a long
and successful operational track
record in the country.
Bharti Airtel Ultratech Cement
Bharti Airtel remains the leading A clear industry leader in India's
telecom service provider with a cement industry, backed by strong
pan-India reach and sophisticated brand recognition, a good distribution
customer base with higher average and sales network and solid product
mobile spending. quality. Its focus on cost efficiency
and an improving energy mix have
given UltraTech a cost advantage.
Power Grid Corporation of India SBI Life Insurance
Power Grid Corporation of India Among the leading domestic life
forms the backbone of India's electricity insurers, SBI Life's competitive
infrastructure. It is poised to edge comes from a wide reach of
play a key role in the growth of SBI branches, highly productive
renewable energy delivery to the agents, a low cost ratio and a reputable
grid over the next few decades SBI brand.
as the government plans ambitious
renewable targets for the electricity
sector.
Tata Consultancy Services Maruti Suzuki India
A top-class Indian IT services India's largest passenger vehicle
provider with the most consistent company is a subsidiary of Japan's
execution and lowest attrition Suzuki and boasts a dominant market
rates. It is a long-term compounder share in the four-wheeler market
with a decent outlook for revenue in India. Its distribution network
growth and order wins over the and business scale are unparalleled
medium term. in the market, supported by strong
research and development capabilities.
Portfolio
As at 30 September 2023
=====================================================================================
2023
Valuation Total assets
Company Sector GBP'000 %
================================== ======================== ========= ============
ICICI Bank Financials 37,762 9.0
================================== ======================== ========= ============
HDFC Bank Financials 34,314 8.2
================================== ======================== ========= ============
Hindustan Unilever Consumer Staples 23,599 5.6
================================== ======================== ========= ============
Infosys Information Technology 22,419 5.4
================================== ======================== ========= ============
Bharti Airtel Communications Services 21,578 5.2
================================== ======================== ========= ============
Ultratech Cement Materials 17,931 4.3
================================== ======================== ========= ============
Power Grid Corporation of India Utilities 17,867 4.3
================================== ======================== ========= ============
SBI Life Insurance Financials 16,968 4.1
================================== ======================== ========= ============
Tata Consultancy Services Information Technology 16,585 4.0
================================== ======================== ========= ============
Maruti Suzuki India Consumer Discretionary 14,600 3.5
---------------------------------- ------------------------ --------- ------------
Top ten investments 223,623 53.6
------------------------------------------------------------ --------- ------------
Axis Bank Financials 14,428 3.4
================================== ======================== ========= ============
Kotak Mahindra Bank Financials 12,380 3.0
================================== ======================== ========= ============
Aegis Logistics Energy 11,940 2.8
================================== ======================== ========= ============
Fortis Healthcare Healthcare 11,772 2.8
================================== ======================== ========= ============
Mahindra & Mahindra Ltd Consumer Discretionary 11,585 2.8
================================== ======================== ========= ============
ABB India Industrials 9,943 2.4
================================== ======================== ========= ============
Syngene International Healthcare 9,936 2.4
================================== ======================== ========= ============
Godrej Properties Real Estate 9,602 2.3
================================== ======================== ========= ============
Titan Consumer Discretionary 9,537 2.3
================================== ======================== ========= ============
Nestlé India Consumer Staples 9,503 2.3
---------------------------------- ------------------------ --------- ------------
Top twenty investments 334,249 80.1
------------------------------------------------------------ --------- ------------
Prestige Estates Projects Real Estate 8,427 2.0
================================== ======================== ========= ============
Vijaya Diagnostic Centre Healthcare 7,599 1.8
================================== ======================== ========= ============
PB Fintech Financials 7,453 1.8
================================== ======================== ========= ============
Aptus Value Housing Finance Financials 7,247 1.8
================================== ======================== ========= ============
Kei Industries Industrials 7,214 1.7
================================== ======================== ========= ============
Tata Consumer Products Consumer Staples 7,203 1.7
================================== ======================== ========= ============
Hindalco Industries Materials 6,945 1.7
================================== ======================== ========= ============
Asian Paints Materials 6,804 1.7
================================== ======================== ========= ============
J.B. Chemicals & Pharmaceuticals Healthcare 6,651 1.6
================================== ======================== ========= ============
Container Corporation of India Industrials 5,168 1.2
---------------------------------- ------------------------ --------- ------------
Top thirty investments 404,960 97.1
------------------------------------------------------------ --------- ------------
Affle India Communications Services 4,878 1.2
================================== ======================== ========= ============
Renew Energy Utilities 4,515 1.1
================================== ======================== ========= ============
Siemens Industrials 4,473 1.1
================================== ======================== ========= ============
Info Edge Ventures Communication Servies 4,306 1.0
================================== ======================== ========= ============
Coromandel International Materials 639 0.1
---------------------------------- ------------------------ --------- ------------
Total investments 423,771 101.6
------------------------------------------------------------ --------- ------------
Net liabilities (before deducting
prior charges)(A) (6,524) (1.6)
------------------------------------------------------------ --------- ------------
Total assets(A) 417,247 100.0
------------------------------------------------------------ --------- ------------
(A) Excluding loan balances.
Other Matters
Investment Objective
The investment objective of the Company is 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 primarily invests in Indian equity securities.
Further information on how the Company delivers its investment
policy may be found on page 12 of the Annual Report for the year
ended 31 March 2023 (the "Annual Report") which is published on the
Company's website.
Principal Risks and Uncertainties
The principal risks and uncertainties associated with the
Company are set out in detail on pages 13 to 15 of the Annual
Report. The principal risks and uncertainties may be summarised
under the following headings:
-- Strategic risk
-- Market risk
-- Poor investment performance
-- Discount
-- Single country risk
-- Depositary
-- Financial and regulatory
-- Gearing
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, together with any other emerging
risks, if and when they become material.
These principal risks and uncertainties, and emerging risks, are
not expected to change materially for the remaining six months of
the Company's financial year ending 31 March 2024, other than in
respect of one new risk identified in the period. Following
shareholder approval at the Annual General Meeting in September
2023, the Company may now invest up to 10% of its net assets in
unquoted investments, which may not be readily realisable and may
be more difficult to value.
The Board also notes the increasing and broader geo-political
issues which may have implications for the Company's portfolio.
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 of a diverse portfolio of listed equity shares which
in most circumstances are realisable within a short timescale.
The Directors are conscious of the principal risks and
uncertainties disclosed on pages 13 to 15 and in Note 17 to the
financial statements for the year ended 31 March 2023.
In August 2022, the Company announced that it had entered into a
three year, GBP30 million revolving credit facility with The Royal
Bank of Scotland International Limited (the "Facility"), of which
GBP26m was fully drawn down at 30 September 2023. 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 2025, the Company
will enter into negotiations with its bankers. If acceptable terms
are available from the existing bankers, or any alternative, the
Company would expect to continue to access a facility. However,
should these terms not be forthcoming, any outstanding borrowing
would be repaid through the proceeds of equity sales.
After making enquiries, including a review of revenue forecasts,
the Directors have a reasonable expectation that the Company
possesses adequate resources to continue in operational existence
for the foreseeable future and for at least 12 months from the date
of this Report. Accordingly, they continue to adopt the going
concern basis of accounting in preparing the financial
statements.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Half Yearly
Financial Report, in accordance with applicable law and
regulations. The Directors confirm that, to the best of their
knowledge:
-- the condensed set of Financial Statements has been prepared
in accordance with Financial Reporting Standard 104 (Interim
Financial Reporting);
-- the Half Yearly Board Report includes a fair review of the
information required by rule 4.2.7R of the Disclosure Guidance and
Transparency Rules (being an indication of important events that
have occurred during the first six months of the financial year and
their impact on the condensed set of Financial Statements and a
description of the principal risks and uncertainties for the
remaining six months of the financial year); and
-- the Half Yearly Board Report includes a fair review of the
information required by 4.2.8R of the Disclosure Guidance and
Transparency Rules (being related party transactions that have
taken place during the first six months of the financial year and
that have materially affected the financial position of the Company
during that period; and any changes in the related party
transactions described in the last Annual Report that could do
so).
The Half Yearly Financial Report for the six months ended 30
September 2023 comprises the Interim Board Report, including the
Statement of Directors' Responsibilities and a condensed set of
Financial Statements.
For and on behalf of the Board
Michael Hughes
Chairman
22 November 2023
Condensed Statement of Comprehensive Income
Six months ended Six months ended Year ended
30 September 30 September 31 March 2023
2023 2022
(unaudited) (unaudited) (audited)
==================== ====== ============================ ============================ ============================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Income
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Income from
investments 3 3,013 - 3,013 3,461 - 3,461 5,725 302 6,027
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Interest 3 82 - 82 - - - 96 - 96
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Gains/(losses) on
investments held
at fair value
through
profit or loss - 49,629 49,629 - 22,570 22,570 - (35,669) (35,669)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Currency
(losses)/gains - (103) (103) 8 (15) (7) - (432) (432)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
3,095 49,526 52,621 3,469 22,555 26,024 5,821 (35,799) (29,978)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Expenses
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Investment
management
fees (1,430) - (1,430) (1,681) - (1,681) (3,284) - (3,284)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Administrative
expenses (490) - (490) (529) - (529) (1,028) - (1,028)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Profit before
finance
costs and taxation 1,175 49,526 50,701 1,259 22,555 23,814 1,509 (35,799) (34,290)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Finance costs (1,330) - (1,330) (466) - (466) (1,309) - (1,309)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
(Loss)/profit before
taxation (155) 49,526 49,371 793 22,555 23,348 200 (35,799) (35,599)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
Taxation 4 (301) (5,237) (5,538) (310) (176) (486) (537) 1,870 1,333
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
(Loss)/profit for
the period (456) 44,289 43,833 483 22,379 22,862 (337) (33,929) (34,266)
==================== ====== ======== ======== ======== ======== ======== ======== ======== ======== ========
(Loss)/return per
Ordinary share
(pence) 5 (0.83) 80.72 79.89 0.84 38.84 39.68 (0.59) (59.41) (60.00)
-------------------- ------ -------- -------- -------- -------- -------- -------- -------- -------- --------
The Company does not have any income or expense that is not included
in profit/(loss) for the period, and therefore the "Profit/(loss) for
the period" is also the "Total comprehensive income for the period".
The total columns of this statement represent the Condensed Statement
of Comprehensive Income, prepared in accordance with IFRS. The revenue
and capital columns are supplementary to this and are prepared under
guidance published by the Association of Investment Companies. All
items in the above statement derive from continuing operations.
All of the profit/(loss) and total comprehensive income is attributable
to the equity holders of abrdn New India Investment Trust plc. There
are no non-controlling interests.
The accompanying notes are an integral part of these financial statements.
Condensed Statement of Financial Position
As at As at As at
30 September 30 September 31 March
2023 2022 2023
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
=================================== ============= ============ ============ =========
Non-current assets
=================================== ============= ============ ============ =========
Investments held at fair value
through profit or loss 423,771 462,161 391,371
=================================== ============= ============ ============ =========
Current assets
=================================== ============= ============ ============ =========
Cash at bank 10,163 5,927 7,178
=================================== ============= ============ ============ =========
Receivables 1,319 1,218 3,715
----------------------------------- ------------- ------------ ------------ ---------
Total current assets 11,482 7,145 10,893
----------------------------------- ------------- ------------ ------------ ---------
Current liabilities
=================================== ============= ============ ============ =========
Bank loan 7 (25,936) (29,901) (29,918)
=================================== ============= ============ ============ =========
Other payables (3,640) (2,162) (3,279)
----------------------------------- ------------- ------------ ------------ ---------
Total current liabilities (29,576) (32,063) (33,197)
----------------------------------- ------------- ------------ ------------ ---------
Net current liabilities (18,094) (24,918) (22,304)
----------------------------------- ------------- ------------ ------------ ---------
Non-current liabilities
=================================== ============= ============ ============ =========
Deferred tax liability on Indian
capital gains 4 (14,366) (13,765) (11,148)
----------------------------------- ------------- ------------ ------------ ---------
Net assets 391,311 423,478 357,919
----------------------------------- ------------- ------------ ------------ ---------
Share capital and reserves
=================================== ============= ============ ============ =========
Ordinary share capital 8 14,768 14,768 14,768
=================================== ============= ============ ============ =========
Share premium account 25,406 25,406 25,406
=================================== ============= ============ ============ =========
Special reserve - 6,553 -
=================================== ============= ============ ============ =========
Capital redemption reserve 4,484 4,484 4,484
=================================== ============= ============ ============ =========
Capital reserve 347,503 371,841 313,655
=================================== ============= ============ ============ =========
Revenue reserve (850) 426 (394)
----------------------------------- ------------- ------------ ------------ ---------
Equity shareholders' funds 391,311 423,478 357,919
----------------------------------- ------------- ------------ ------------ ---------
Net asset value per Ordinary share
(pence) 10 725.75 738.57 641.32
----------------------------------- ------------- ------------ ------------ ---------
The accompanying notes are an integral part of these financial statements.
Condensed Statement of Changes in Equity
Six months ended 30 September 2023 (unaudited)
=============================================================================================
Share Capital
Share premium redemption Capital Revenue
capital account reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= ======= ======= ======= ========== ======== ======= ========
Balance at 31 March 2023 14,768 25,406 4,484 313,655 (394) 357,919
========================= ======= ======= ======= ========== ======== ======= ========
Profit/(loss) for the
period - - - 44,289 (456) 43,833
========================= ======= ======= ======= ========== ======== ======= ========
Buyback of share capital
to treasury - - - (10,441) - (10,441)
------------------------- ------- ------- ------- ---------- -------- ------- --------
Balance at 30 September
2023 14,768 25,406 4,484 347,503 (850) 391,311
------------------------- ------- ------- ------- ---------- -------- ------- --------
Six months ended 30 September 2022 (unaudited)
Share Capital
Share premium Special redemption Capital Revenue
capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= ======= ======= ======= ========== ======== ======= ========
Balance at 31 March 2022 14,768 25,406 9,932 4,484 349,462 (57) 403,995
========================= ======= ======= ======= ========== ======== ======= ========
Profit for the period - - - - 22,379 483 22,862
========================= ======= ======= ======= ========== ======== ======= ========
Buyback of share capital
to treasury - - (3,379) - - - (3,379)
------------------------- ------- ------- ------- ---------- -------- ------- --------
Balance at 30 September
2022 14,768 25,406 6,553 4,484 371,841 426 423,478
------------------------- ------- ------- ------- ---------- -------- ------- --------
Year ended 31 March 2023 (audited)
Share Capital
Share premium Special redemption Capital Revenue
capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
========================= ======= ======= ======= ========== ======== ======= ========
Balance at 31 March 2022 14,768 25,406 9,932 4,484 349,462 (57) 403,995
========================= ======= ======= ======= ========== ======== ======= ========
Loss for the year - - - - (33,929) (337) (34,266)
========================= ======= ======= ======= ========== ======== ======= ========
Buyback of share capital
to treasury - - (9,932) - (1,878) - (11,810)
------------------------- ------- ------- ------- ---------- -------- ------- --------
Balance at 31 March 2023 14,768 25,406 - 4,484 313,655 (394) 357,919
------------------------- ------- ------- ------- ---------- -------- ------- --------
The Special reserve and the Revenue reserve represent the amount of
the Company's distributable reserves. The Special reserve was extinguished
during the year ended 31 March 2023.
Condensed Cash Flows Statement
Six months Six months Year ended
ended ended
30 September 30 September 31 March 2023
2023 2022
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
=========================================== ============ ============ =============
Cash flows from operating activities
=========================================== ============ ============ =============
Dividend income received 2,928 3,398 4,817
=========================================== ============ ============ =============
Interest income received (3) (4) (16)
=========================================== ============ ============ =============
Investment management fee paid (501) (1,350) (3,057)
=========================================== ============ ============ =============
Overseas withholding tax (655) 631 -
=========================================== ============ ============ =============
Other cash (expenses)/receipts (429) (421) 692
------------------------------------------- ------------ ------------ -------------
Cash inflow from operations 1,340 2,254 2,436
=========================================== ============ ============ =============
Interest paid (1,113) (262) (1,189)
------------------------------------------- ------------ ------------ -------------
Net cash inflow from operating activities 227 1,992 1,247
=========================================== ============ ============ =============
Cash flows from investing activities
=========================================== ============ ============ =============
Purchases of investments (39,222) (49,401) (100,451)
=========================================== ============ ============ =============
Sales of investments 58,874 47,895 109,314
=========================================== ============ ============ =============
Indian capital gains tax paid on
sales (2,019) (910) (678)
------------------------------------------- ------------ ------------ -------------
Net cash inflow/(outflow) from investing
activities 17,633 (2,416) 8,185
------------------------------------------- ------------ ------------ -------------
Cash flows from financing activities
=========================================== ============ ============ =============
Buyback of shares (10,757) (3,307) (11,489)
=========================================== ============ ============ =============
Repayment of loan (4,000) - -
=========================================== ============ ============ =============
Costs associated with loan (12) (99) (105)
------------------------------------------- ------------ ------------ -------------
Net cash outflow from financing activities (14,769) (3,406) (11,594)
------------------------------------------- ------------ ------------ -------------
Net increase/(decrease) in cash and
cash equivalents 3,091 (3,830) (2,162)
=========================================== ============ ============ =============
Cash and cash equivalents at the
start of the period 7,178 9,772 9,772
=========================================== ============ ============ =============
Effect of foreign exchange rate changes (106) (15) (432)
------------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at the
end of the period 10,163 5,927 7,178
------------------------------------------- ------------ ------------ -------------
There were non-cash transactions of GBP22,000 during the
period (six months ended 30 September 2022 - GBPnil; year
ended 31 March 2023 - GBPnil).
Notes to the Financial Statements
For the six months ended 30 September 2023
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.
2. Accounting policies
The Company's financial statements have been prepared in accordance
with International Accounting Standard ('IAS') 34 - 'Interim Financial
Reporting', as adopted by the International Accounting Standards
Board (IASB), and interpretations issued by the International Reporting
Interpretations Committee of the IASB (IFRIC). The Company's financial
statements have been prepared using the same accounting policies
applied for the year ended 31 March 2023 financial statements,
which received an unqualified audit report.
The financial statements have been prepared on a going concern
basis. In accordance with the Financial Reporting Council's guidance
on 'Going Concern and Liquidity Risk' the Directors have undertaken
a review of the Company's assets which primarily consist of a diverse
portfolio of listed equity shares which, in most circumstances,
are realisable within a short timescale.
3. Income
======================== ============ ============ =============
Six months Six months Year ended
ended ended
30 September 30 September 31 March 2023
2023 2022
GBP'000 GBP'000 GBP'000
======================== ============ ============ =============
Income from investments
======================== ============ ============ =============
Overseas dividends 3,013 3,461 6,027
---------------------------- ------------ ------------ -------------
Other income
======================== ============ ============ =============
Deposit interest 82 - 93
============================ ============ ============ =============
Other interest - - 3
---------------------------- ------------ ------------ -------------
82 - 96
---------------------------- ------------ ------------ -------------
Total income 3,095 3,461 6,123
---------------------------- ------------ ------------ -------------
4. Taxation
Six months ended Six months ended Year ended
30 September 2023 30 September 2022 31 March 2023
====================== =========================== ========================= ===========================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
====================== ======= ======== ======== ======= ======= ======= ======= ======== ========
(a) Analysis of charge
for the period
====================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Indian capital
gains tax charge
on sales - 2,019 2,019 - 942 942 - 936 936
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Under provision
of Indian capital
gains tax charged
on sales for prior
year - - - - - - - 577 577
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Overseas taxation 301 - 301 310 - 310 537 - 537
------------------------------- ------- -------- -------- ------- ------- ------- ------- -------- --------
Total current tax
charge for the
period 301 2,019 2,320 310 942 1,252 537 1,513 2,050
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Movement in deferred
tax liability on
Indian capital
gains - 3,218 3,218 - (766) (766) - (3,383) (3,383)
------------------------------- ------- -------- -------- ------- ------- ------- ------- -------- --------
Total tax charge
for the period 301 5,237 5,538 310 176 486 537 (1,870) (1,333)
------------------------------- ------- -------- -------- ------- ------- ------- ------- -------- --------
The Company is liable to Indian capital gains tax under Section
115 AD of the Indian Income Taxes Act 1961.
The Company has recognised a deferred tax liability of GBP14,366,000
(30 September 2022 - GBP13,765,000; 31 March 2023 - GBP11,148,000
deferred tax liability) on capital gains which may arise if
Indian investments are sold.
On 1 April 2020, the Indian Government withdrew an exemption
from withholding tax on dividend income. Dividends are received
net of 20% withholding tax and an additional 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 Condensed Statement of Financial Position as an asset
due for offset against Indian capital gains or reclaim.
(b) Factors affecting the tax charge for the year or period. The
tax charged for the period can be reconciled to the (loss)/profit
per the Condensed Statement of Comprehensive Income as follows:
Six months ended Six months ended Year ended
30 September 2023 30 September 2022 31 March 2023
====================== =========================== ========================= ===========================
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
====================== ======= ======== ======== ======= ======= ======= ======= ======== ========
(Loss)/profit before
tax (155) 49,526 49,371 793 22,555 23,348 200 (35,799) (35,599)
------------------------------- ------- -------- -------- ------- ------- ------- ------- -------- --------
UK corporation
tax on profit at
the standard rate
of 25% (39) 12,381 12,342 151 4,285 4,436 38 (6,802) (6,764)
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Effects of:
====================== ======= ======== ======== ======= ======= ======= ======= ======== ========
(Gains)/losses
on investments
held at fair value
through profit
or loss not subject
to UK Corporation
tax - (12,407) (12,407) - (4,288) (4,288) - 6,720 6,720
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Currency losses
not taxable - 26 26 - 3 3 - 82 82
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Deferred tax not
recognised in respect
of tax losses 790 - 790 501 - 501 1,047 - 1,047
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Expenses not deductible
for tax purposes 2 - 2 5 - 5 3 - 3
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Indian capital
gains tax charged
on sales - 2,019 2,019 - 942 942 - 936 936
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Under provision
of Indian capital
gains tax charged
on sales for prior
year - - - - - - - 577 577
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Movement in deferred
tax liability on
Indian capital
gains - 3,218 3,218 - (766) (766) - (3,383) (3,383)
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Irrecoverable overseas
withholding tax 301 - 301 310 - 310 537 - 537
=============================== ======= ======== ======== ======= ======= ======= ======= ======== ========
Non-taxable dividend
income (753) - (753) (657) - (657) (1,088) - (1,088)
------------------------------- ------- -------- -------- ------- ------- ------- ------- -------- --------
Total tax charge/(credit) 301 5,237 5,538 310 176 486 537 (1,870) (1,333)
------------------------------- ------- -------- -------- ------- ------- ------- ------- -------- --------
At 30 September 2023, the Company has surplus management expenses
and loan relationship debits with a tax value of GBP9,116,000
(30 September 2022 - GBP7,608,000; 31 March 2023 - GBP8,326,000)
based on enacted tax rates, in respect of which a deferred tax
asset has not been recognised. No deferred tax asset has been
recognised because the Company is not expected to generate taxable
income in the future in excess of the deductible expenses of
those future periods. Therefore, it is unlikely that the Company
will generate future taxable revenue that would enable the existing
tax losses to be utilised.
5. Return per Ordinary share
==================================== ============ ============ =============
Six months Six months Year ended
ended ended
30 September 30 September 31 March 2023
2023 2022
GBP'000 GBP'000 GBP'000
==================================== ============ ============ =============
Based on the following figures:
==================================== ============ ============ =============
Revenue return (456) 483 (337)
========================================= ============ ============ =============
Capital return 44,289 22,379 (33,929)
----------------------------------------- ------------ ------------ -------------
Total return 43,833 22,862 (34,266)
----------------------------------------- ------------ ------------ -------------
Weighted average number of Ordinary
shares in issue 54,868,970 57,619,248 57,105,465
----------------------------------------- ------------ ------------ -------------
6. Transaction costs
During the period, 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 Condensed
Statement of Comprehensive Income, and are included within gains/(losses)
on investments at fair value through profit or loss in the Condensed
Statement of Comprehensive Income. The total costs were as follows:
Six months Six months Year ended
ended ended
30 September 30 September 31 March 2023
2023 2022
GBP'000 GBP'000 GBP'000
========================= ================= ================ =================
Purchases 78 68 166
============================== ================= ================ =================
Sales 78 63 173
------------------------------ ----------------- ---------------- -----------------
156 131 339
------------------------------ ----------------- ---------------- -----------------
The above transaction costs are calculated in line with the AIC
SORP. The transaction costs in the Company's Key Information Document,
provided by the Manager, are calculated on a different basis and
in line with the PRIIPs regulations.
7. Bank loan
In August 2022, the Company entered into a three year GBP30 million
multi-currency revolving credit facility with The Royal Bank of
Scotland International Limited (London Branch). At 30 September
2023 GBP26 million (30 September 2022 - GBP30 million; 31 March
2023 - GBP30 million) had been drawn down at an all-in interest
rate of 8.531% with a maturity date of 2 October 2023 (30 September
2022 - 5.321% until 3 November 2022; 31 March 2023 - 7.777% until
3 April 2023. Subsequent to this the loan has been rolled over
and at the date of this report the Company had drawn down GBP26
million at an all-in interest rate of 8.785%.
The bank loan recognised in the Condensed Statement of Financial
Position is net of amortised costs.
8. Ordinary share capital
During the period 1,891,673 Ordinary shares were bought back by
the Company for holding in treasury (period to 30 September 2022
- 599,372; year to 31 March 2023 - 2,127,206), at a cost of GBP10,433,000
(30 September 2022 - GBP3,379,000; 31 March 2023 - GBP11,810,000).
As at 30 September 2023 there were 53,918,248 (30 September 2022
- 57,337,755; 31 March 2023 - 55,809,921) Ordinary shares in issue,
excluding 5,151,892 (30 September 2022 - 1,732,385; 31 March 2023
- 3,260,219) Ordinary shares held in treasury.
Following the period end a further 646,500 Ordinary shares were
bought back for treasury by the Company at a cost of GBP3,784,000
resulting in there being 53,271,748 Ordinary shares in issue, excluding
5,798,392 Ordinary shares held in treasury at the date this Report
was approved.
9. Analysis of changes in net debt
=============================================================================
At At
31 March Currency Cash Non-cash 30 September
2023 differences flows movements 2023
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== ======== =========== ======= ========= ============
Cash and short term
deposits 7,178 (106) 3,091 - 10,163
======================== ======== =========== ======= ========= ============
Debt due within one
year (29,918) - 4,000 (18) (25,936)
------------------------ -------- ----------- ------- --------- ------------
(22,740) (106) 7,091 (18) (15,773)
------------------------ -------- ----------- ------- --------- ------------
At At
31 March Currency Cash Non-cash 31 March
2022 differences flows movements 2023
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
==================== ======== =========== ======= ========= ============
Cash and short term
deposits 9,772 (432) (2,162) - 7,178
======================== ======== =========== ======= ========= ============
Debt due within one
year (30,000) - - 82 (29,918)
------------------------ -------- ----------- ------- --------- ------------
(20,228) (432) (2,162) 82 (22,740)
------------------------ -------- ----------- ------- --------- ------------
A statement reconciling the movement in net funds to the net cash
flow has not been presented as there are no differences from the
above analysis.
10. Net asset value per Ordinary share
The net asset value per Ordinary share is based on a net asset
value of GBP391,311,000 (30 September 2022 - GBP423,478,000; 31
March 2023 - GBP357,919,000) and on 53,918,248 (30 September 2022
- 57,337,755; 31 March 2023 - 55,809,921) Ordinary shares, being
the number of Ordinary shares in issue at the period end.
11. Fair value hierarchy
IFRS 13 'Fair Value Measurement' requires an entity to classify
fair value measurements using a fair value hierarchy that reflects
the subjectivity of the inputs used in making measurements. The
fair value hierarchy has the following levels:
Level 1: quoted (unadjusted) market prices in active markets for
identical assets or liabilities;
Level 2: valuation techniques for which the lowest level input
that is significant to the fair value measurement is directly or
indirectly observable; and
Level 3: valuation techniques for which the lowest level input
that is significant to the fair value measurement is unobservable.
The financial assets and liabilities measured at fair value in
the Condensed Statement of Financial Position and are grouped into
the fair value hierarchy at the Condensed Statement of Financial
Position date are as follows:
Level Level Level Total
1 2 3
As at 30 September 2023 Note GBP'000 GBP'000 GBP'000 GBP'000
=================================== ==== ===== ======= ======= ======= =========
Financial assets at fair value
through profit or loss
=================================== ==== ===== ======= ======= ======= =========
Quoted equities a) 423,771 - - 423,771
----------------------------------- --------------- ------- ------- ------- ---------
Net fair value 423,771 - - 423,771
----------------------------------- --------------- ------- ------- ------- ---------
Level Level Level Total
1 2 3
As at 30 September 2022 Note GBP'000 GBP'000 GBP'000 GBP'000
=================================== ==== ===== ======= ======= ======= =========
Financial assets at fair value
through profit or loss
=================================== ==== ===== ======= ======= ======= =========
Quoted equities a) 462,161 - - 462,161
----------------------------------- --------------- ------- ------- ------- ---------
Net fair value 462,161 - - 462,161
----------------------------------- --------------- ------- ------- ------- ---------
Level Level Level Total
1 2 3
As at 31 March 2023 Note GBP'000 GBP'000 GBP'000 Total
=================================== ==== ===== ======= ======= ======= =========
Financial assets at fair value
through profit or loss
=================================== ==== ===== ======= ======= ======= =========
Quoted equities a) 391,371 - - 391,371
----------------------------------- --------------- ------- ------- ------- ---------
Net fair value 391,371 - - 391,371
----------------------------------- --------------- ------- ------- ------- ---------
a) Quoted equities. The fair value of the Company's investments
in quoted equities has been determined by reference to their
quoted bid prices at the reporting date. Quoted equities included
in Fair Value Level 1 are actively traded on recognised stock
exchanges.
12. Related party transactions
The Company has an agreement with abrdn Fund Managers Limited (the
"Manager") for the provision of management, secretarial, accounting
and administration services and for carrying out promotional activity
services in relation to the Company.
During the period, the management fee was payable monthly in arrears
and was based on 0.8% per annum up to GBP300 million and 0.6% thereafter
of the net assets of the Company (period ended 30 September 2022
and year ended 31 March 2023 the management fee payable was based
on 0.85% per annum up to GBP350 million and 0.7% per annum thereafter
of the net assets of the Company). 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 period
was GBP1,430,000 (six months ended 30 September 2022 - GBP1,681,000;
year ended 31 March 2023 - GBP3,284,000) and the balance due to
the Manager at the period end was GBP1,687,000 (period end 30 September
2022 - GBP863,000; year end 31 March 2023 - GBP759,000). All investment
management fees are charged 100% to the revenue column of the Statement
of Comprehensive Income.
The Company has an agreement with the Manager for the provision
of promotional activities in relation to the Company's participation
in the abrdn Investment Trust Share Plan and ISA. The total fees
paid and payable under the agreement during the period were GBP93,000
(six months ended 30 September 2022 - GBP83,000; year ended 31
March 2023 - GBP176,000) and the balance due to the Manager at
the period end was GBP93,000 (period ended 30 September 2022 -
GBP42,000; year ended 31 March 2023 - GBP46,000).
13. Segmental information
For management purposes, the Company is organised into one main
operating segment, which invests in equity securities. All of the
Company's activities are interrelated, and each activity is dependent
on the others. Accordingly, all significant operating decisions
are based upon analysis of the Company as one segment. The financial
results from this segment are equivalent to the financial statements
of the Company as a whole.
14. Half-Yearly Report
The financial information contained in this Half-Yearly Report
does not constitute statutory accounts as defined in Sections 434
- 436 of the Companies Act 2006. The financial information for
the six months ended 30 September 2023 and 30 September 2022 has
not been audited.
The information for the year ended 31 March 2023 has been extracted
from the latest published audited financial statements which have
been filed with the Registrar of Companies. The report of the Independent
Auditor on those accounts contained no qualification or statement
under Section 237 (2), (3) or (4) of the Companies Act 2006.
The Half-Yearly Report has not been reviewed or audited by the
Company's Independent Auditor.
15. Approval
This Half-Yearly Report was approved by the Board on 22 November
2023.
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
International Financial Reporting Standards and the Statement of Recommended
Practice issued by Association of Investment Companies. The Directors
assess the Company's performance against a range of criteria which
are viewed as particularly relevant for closed-end investment companies.
Adjusted net asset value per Ordinary share(A)
This performance measure is used to provide a like for like comparison
with the Company's Benchmark for the purposes of the potential five-yearly
performance-related conditional tender offer announced on 24 March
2022. Further details may be found in the Chairman's Statement.
30 September 31 March 2023
2023
================================ =========== ============ ============ =============
Net assets attributable
(GBP'000) 391,311 357,919
============================================= ============ ============ =============
Accumulated Indian CGT charge for the period
since 31 March 2022 (GBP'000) 3,367 (1,870)
----------------------------------------------------------- ------------ -------------
Net assets attributable excluding Indian CGT
charge (GBP'000) 394,678 356,049
=========================================================== ------------ -------------
Number of Ordinary shares
in issue 53,918,248 55,809,921
============================================= ============ ============ =============
Adjusted net asset value
per Ordinary share(A) 731.99p 637.97p
--------------------------------------------- ------------ ------------ -------------
(A) Adjusted NAV is the Company's NAV after adding back all Indian
capital gains tax paid or accrued in respect of realised and unrealised
gains made on investments.
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 fair value, expressed as a percentage
of the net asset value.
30 September 31 March 2023
2023
================================ =========== ============ ============ =============
NAV per Ordinary share a 725.75p 641.32p
============================================= ============ ============ =============
Share price b 582.00p 512.00p
============================================= ============ ============ =============
Discount (a-b)/a 19.8% 20.2%
--------------------------------------------- ------------ ------------ -------------
Net gearing
Net gearing measures the total borrowings less cash and cash equivalents
divided by shareholders' funds, expressed as a percentage. Under AIC
reporting guidance cash and cash equivalents includes amounts due to
and from brokers at the period end.
30 September 31 March 2023
2023
================================ =========== ============ ============ =============
Borrowings (GBP'000) a 25,936 29,918
============================================= ============ ============ =============
Cash (GBP'000) b 10,163 7,178
============================================= ============ ============ =============
Amounts due to brokers
(GBP'000) c 638 1,418
============================================= ============ ============ =============
Amounts due from brokers
(GBP'000) d 450 3,266
============================================= ============ ============ =============
Shareholders' funds (GBP'000) e 391,311 357,919
--------------------------------------------- ------------ ------------ -------------
Net gearing (a-b+c-d)/e 4.1% 5.8%
--------------------------------------------- ------------ ------------ -------------
Ongoing charges
The ongoing charges ratio has been calculated in accordance with guidance
issued by the AIC as the total of annualised investment management
fees and administrative expenses and expressed as a percentage of the
average daily net asset values with debt at fair value published throughout
the year. The ratio for 30 September 2023 is based on forecast ongoing
charges for the year ending 31 March 2024.
30 September 31 March 2023
2023
================================ =========== ============ ============ =============
Investment management fees
(GBP'000) 2,904 3,284
============================================= ============ ============ =============
Administrative expenses
(GBP'000) 985 1,028
============================================= ============ ============ =============
Less: non-recurring charges
(GBP'000)(A) - (27)
--------------------------------------------- ------------ ------------ -------------
Ongoing charges (GBP'000) 3,889 4,285
--------------------------------------------- ------------ ------------ -------------
Average net assets (GBP'000) 382,269 394,420
--------------------------------------------- ------------ ------------ -------------
Ongoing charges ratio 1.02% 1.09%
--------------------------------------------- ------------ ------------ -------------
(A) Professional fees unlikely to recur.
The ongoing charges ratio provided in the Company's Key Information
Document is calculated in line with the PRIIPs regulations which amongst
other things, includes 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
Six months ended 30 September NAV Adjusted NAV Price
2023
================================ =========== ============ ============ =============
Opening at 1 April 2023 a 641.32p 637.97p 512.00p
================================ =========== ============ ============ =============
Closing at 30 September
2023 b 725.75p 731.99p 582.00p
================================ =========== ============ ============ =============
Price movements c=(b/a)-1 +13.2% +14.7% +13.7%
================================ =========== ============ ============ =============
Dividend reinvestment(A) d N/A N/A N/A
-------------------------------- ----------- ------------ ------------ -------------
Total return c+d +13.2% +14.7% +13.7%
-------------------------------- ----------- ------------ ------------ -------------
Share
Year ended 31 March 2023 NAV Adjusted NAV Price
================================ =========== ============ ============ =============
Opening at 1 April 2022 a 697.30p 697.30p 562.00p
================================ =========== ============ ============ =============
Closing at 31 March 2023 b 641.32p 637.97p 512.00p
================================ =========== ============ ============ =============
Price movements c=(b/a)-1 -8.0% -8.5% -8.9%
================================ =========== ============ ============ =============
Dividend reinvestment(A) d N/A N/A N/A
-------------------------------- ----------- ------------ ------------ -------------
Total return c+d -8.0% -8.5% -8.9%
-------------------------------- ----------- ------------ ------------ -------------
Share
Eighteen months ended 30 NAV Adjusted NAV Price
September 2023
================================ =========== ============ ============ =============
Opening at 1 April 2022 a 697.30p 697.30p 562.00p
================================ =========== ============ ============ =============
Closing at 30 September
2023 b 725.75p 731.99p 582.00p
================================ =========== ============ ============ =============
Price movements c=(b/a)-1 +4.1% +5.0% 3.6%
================================ =========== ============ ============ =============
Dividend reinvestment(A) d N/A N/A N/A
-------------------------------- ----------- ------------ ------------ -------------
Total return c+d +4.1% +5.0% +3.6%
-------------------------------- ----------- ------------ ------------ -------------
(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.
Stuart Reid
abrdn Holdings Limited
Secretaries
Email: cef.cosec@abrdn.com
22 November 2023
END
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IR QLLFLXFLEFBB
(END) Dow Jones Newswires
November 23, 2023 02:00 ET (07:00 GMT)
Abrdn New India Investment (LSE:ANII)
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