Annual Financial Report

RNS Number : 9006Q

Aberdeen New India Invest Trust PLC

01 July 2022

 

ABERDEEN NEW INDIA INVESTMENT TRUST PLC

LEI - 549300D2AW66WYEVKF02

ANNUAL FINANCIAL REPORT

For the year ended 31 March 2022

PERFORMANCE HIGHLIGHTS

Share price total returnA			Net asset value total returnA
+3.7%			+11.2%
2021	+65.6%		2021	+52.7%
Ongoing charges ratioA			MSCI India Index total returnB
1.06%			+23.9%
2021	1.16%		2021	+59.1%
Discount to net asset valueA
19.4%
2021	13.6%
A Alternative Performance Measure.
B Sterling adjusted.

Financial Highlights and Financial Calendar

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 valueA	19.4%	13.6%
Net gearingA	5.5%	5.8%
Total return per share	69.64p	216.25p
Operating costs
Ongoing charges ratioA	1.06%	1.16%
A Considered to be an Alternative Performance Measure.

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

STRATEGIC REPORT

Chairman's Statement

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 (MSCI India Index) 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 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).

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 .

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.

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 [e-mail] .

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.

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

Investment Manager's Review

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.

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.

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

Overview of Strategy

Business Model

The business of the Company is that of an investment company which continues to qualify as an investment trust for UK capital gains tax purposes. The Directors do not envisage any change either to this model or to the Company's activities in the foreseeable future.

Investment Objective

The Company aims to provide shareholders with long term capital appreciation by investment in companies which are incorporated in India, or which derive significant revenue or profit from India, with dividend yield from the Company being of secondary importance.

Investment Policy

The Company invests primarily in Indian equity securities.

Delivering the Investment Policy

Risk Diversification

The 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). 

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 in the Annual Report and a graph showing NAV and share price total return performance against the Benchmark over the past five years is shown in the Annual Report.
Discount to NAV	The discount at which the Company's share price trades relative to the NAV per share is monitored by the Board. A graph showing the discount over the last five years is shown in the Annual Report.
Ongoing charges	The Board regularly monitors the operating costs of the Company and the ongoing charges for this year and the previous year are disclosed in Financial Highlights.

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.

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.
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

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 and the Manager's ESG engagement are outlined below.

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 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.

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 and in the Investment Manager's Report.

Hasan Askari,
Chairman
30 June 2022

Promoting the Success of the Company

The Purpose of the Company and Role of the Board

The Board is required to report on how it has discharged its duties and responsibilities under section 172 of the Companies Act 2006 (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. 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 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 in the Directors' Report.
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 above.

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.

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.

Performance

Performance (total return, in Sterling terms)

	1 year	3 year	5 year	10 year
	% return	% return	% return	% return
Share priceA	+3.7	+22.2	+27.6	+153.7
Net asset value per Ordinary shareA	+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.
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)
DividendsB	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.

Ten Largest Investments

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
Forms 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.

Portfolio

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 AirtelA	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
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 assetsB		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.

Our Investment Manager's ESG Process

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:

abrdn's ESG Engagement

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

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.

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.

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:

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.

Investment Case Studies

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, 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. 

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.

Directors' Report

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") in Financial Highlights.

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 as its alternative investment fund manager, to provide investment management, risk management, promotional activities and administration and company secretarial services to the Company. The Company's portfolio is managed by the Investment Manager by way of a group delegation agreement in place between the Manager and Investment Manager. In addition, the Manager has sub-delegated administrative and secretarial services to 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.

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 below 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 in the Annual Report 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 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 in the Annual Report.

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. 

Board Committees

The Directors have appointed a number of Committees as set out below. Copies of each Committee's terms of reference, which define its responsibilities and duties, are available on the Company's website or from the Company Secretaries, on request.

Audit Committee

The Audit Committee's Report may be found in the Annual Report.

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 in the Annual Report.

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 in the Annual Report.

The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's Auditor is unaware, and each Director has taken all the steps that he or she could reasonably be expected to have taken as a Director in order to make himself or herself aware of any relevant audit information and to establish that the Company's Auditor is aware of that information. Additionally, there have been no important events since the year end which warrant disclosure.

The Directors review, as applicable, the level of non-audit services provided by the Auditor, together with the Auditor's procedures in connection with the provision of such services. No non-audit services were provided by the auditor during the year or to the date of this Report. The Directors remain satisfied that the Auditor is objective and independent.

Going Concern

In accordance with the Financial Reporting Council's guidance on Going Concern and Liquidity Risk, the Directors have reviewed the Company's ability to continue as a going concern. The Company's assets consist substantially of a portfolio of quoted securities which in most circumstances are realisable within a short timescale. The Directors are mindful of the principal risks and uncertainties disclosed above and 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.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (either the Company Secretaries or abrdn) in situations where direct communication is required and representatives from the Board offer to meet with major shareholders on an annual basis in order to gauge their views.

In addition, members of the Board may accompany the Manager when undertaking meetings with institutional shareholders.

The Company Secretaries only act on behalf of the Board, not the Manager, and there is no filtering of communication. At each Board meeting the Board receives full details of any communication from shareholders to which the Chairman responds, as appropriate, on behalf of the Board.

The Notice of AGM included within the Annual Report is normally sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board and Manager prior to the Company's AGM.

Annual General Meeting

The AGM will be held on 28 September 2022 and the AGM Notice and related notes may be found in the Annual Report. Resolutions relating to the following items will be proposed at the AGM as special business.

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 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.

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 above, the Company is not aware of any contractual or other agreements which are essential to its business which might reasonably be expected to have to been disclosed in the Directors' Report.

The financial risk management objectives and policies arising from its financial instruments and the exposure of the Company to risk are disclosed in Note 17 to the Financial Statements.

Hasan Askari,
Chairman
30 June 2022

Statement of Directors' responsibilities in respect of the Annual Report and financial statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year.  Under that law they have elected to prepare the financial statements in accordance with UK-adopted international accounting standards and applicable law.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period.  In preparing these financial statements, the Directors are required to: 

-  select suitable accounting policies and then apply them consistently; 

-  make judgements and estimates that are reasonable, relevant and reliable; 

-  state whether they have been prepared in accordance with UK adopted international accounting standards;

-  assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

-  use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006.  They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. 

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website but not for the content of any information included on the website that has been prepared or issued by third parties.  Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the financial statements will form part of the annual financial report prepared using the single electronic reporting format under the TD ESEF Regulation. The auditor's report on these financial statements provides no assurance over the ESEF format.

Responsibility Statement of the Directors in respect of the Annual Financial Report

We confirm that to the best of our knowledge:

-  the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

-  the strategic report includes a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks and uncertainties that they face.

We consider the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

For and on behalf of the Board
Hasan Askari,
Chairman
30 June 2022

Statement of Comprehensive Income

		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 Financial Position

		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 Changes in Equity

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 Cash Flows

		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.

Notes to the Financial Statements

For the year ended 31 March 2022

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.
		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.
	(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.

	(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.
	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.

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.
	(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.

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.
	(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.
			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.

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.
	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
		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.
	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	EquityA	Revenue	EquityA
				£'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.
	Management of the risk . It is the Board's policy to hold an appropriate spread of investments in the portfolio in order to reduce the risk arising from factors specific to a sector. Both the allocation of assets and the stock selection process, act to reduce market risk. The Manager actively monitors market prices throughout the year and reports to the Board, which meets regularly in order to review investment strategy. The investments held by the Company are all listed on the Bombay (Mumbai) Stock Exchange and/or The Indian National Stock Exchange.
	Price risk sensitivity. If market prices at the Statement of Financial Position date had been 15% higher or lower 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:
			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.	Capital management policies and procedures
	The Company's capital management objectives are:
	-	to ensure that the Company will be able to continue as a going concern; and
	-	to maximise the income and capital return to its equity shareholders through an appropriate balance of equity capital and debt. The policy is that debt should not exceed 25% of net assets.
	The Board, with the assistance of the Manager monitors and reviews the broad structure of the Company's capital on an ongoing basis. This review includes:
	-		the planned level of gearing, which includes taking account of the Manager's views on the market;
	-		the opportunity to buy back equity shares for cancellation or holding in treasury, which takes account of the difference between the net asset value per share and the share price (ie the level of share price discount or premium);
	-		the opportunity for new issues of equity shares; and
	-		the extent to which any revenue in excess of that which is required to be distributed should be retained.
	The Company's objectives, policies and processes for managing capital are unchanged from the preceding accounting period.

19.	Fair value hierarchy
	IFRS 13 'Fair Value Measurement' requires an entity to classify fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used in making measurements. The fair value hierarchy has the following levels:
	Level 1 : quoted (unadjusted) market prices in active markets for identical assets or liabilities;
	Level 2 : valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
	Level 3 : valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
	The financial assets and liabilities measured at fair value in the Statement of Financial Position are grouped into the fair value hierarchy at the Statement of Financial Position date are as follows:
					Level 1	Level 2	Level 3	Total
	As at 31 March 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.	Controlling party
	In the opinion of the Directors on the basis of shareholdings advised to them, the Company has no immediate or ultimate controlling party.

21.	Related party transactions and transactions with the Manager
	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 in the Annual Report.
	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.

Alternative Performance Measures

Alternative performance measures are numerical measures of the Company's current, historical or future performance, financial position or cash flows, other than financial measures defined or specified in the applicable financial framework. The Company's applicable financial framework includes IFRS and the AIC SORP. The Directors assess the Company's performance against a range of criteria which are viewed as particularly relevant for closed-end investment companies.
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 chargesA (£'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.
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 reinvestmentA	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 reinvestmentA	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.

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2022 or 2021 but is derived from those accounts. Statutory accounts for 2021 have been delivered to the registrar of companies, and those for 2022 will be delivered in due course. The auditor has reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The statutory accounts for the financial year ended 31 March 2022 have been approved by the Board and audited and will be filed with the Registrar of Companies in due course.

The Company's Annual General Meeting which will be held at 12.30pm on 28 September 2022 at Bow Bells House, 1 Bread Street, London EC4M 9HH.

The Annual Report will be posted to shareholders in July 2022. Further copies may be ordered from the Manager's website: www.invtrusts.co.uk .

On behalf of the Board

Aberdeen Asset Management PLC

Secretaries

30 June 2022

END

 

END

 

 

FR URSVRUBUNOAR