Final Results

New India Investment Trust PLC 11 June 2007 NEW INDIA INVESTMENT TRUST PLC PRELIMINARY ANNOUNCEMENT OF ANNUAL AUDITED CONSOLIDATED RESULTS for the year ended 31 March 2007 Chairman's Statement Over the year to 31 March 2007, the Company's performance lagged its benchmark as liquidity drove the market to fresh highs. This was despite a heightened level of risk aversion amongst equity investors, who sparked a wave of selling across global financial markets, notably in the first and final quarters. India was no exception. The final quarter experienced profit-taking and, in the weakness, the Company was slightly more resilient than the benchmark. This should be typical of the conservative strategy pursued by our Manager - one which is based on detailed analysis to identify companies with solid earnings, and whilst performance has lagged in the short term, this strategy tends to reward investors over the long run. During the period, the net asset value of the Group fell by 3.7% on an undiluted basis to 152.7p and 3.1% to 141.6p on a diluted basis. The share price fell by 7.3% to 128.8p and on 31 March 2007, the shares were trading at a 9.0% discount to the diluted NAV, which stood at 141.6p. It is important to note that Sterling was exceptionally strong during the period, rising 10.3% against the rupee (which itself was strong rising 9.0% against the US dollar). As a result the index return in sterling was 6.4% compared to the rupee return of 17.4%. In line with last year the Board is not recommending the payment of a final dividend for the year. The bulk of the underperformance came from the energy sector, in particular, the Company's lack of exposure to Reliance Industries, which makes up 13% of the MSCI India Index. While the stock has performed strongly over the 12 months (+71% in local currency terms), our Manager remains uncomfortable with the company's aggressive expansion into activities where it has no track record and the price levels that its shares command. Adding to the underperformance were the Company's holdings in Bharat Petroleum and Hero Honda. Shares of Bharat Petroleum (-29%) continued to be weighed down by subsidy burdens imposed by the government, while Hero Honda (-23%) was hurt by the competitive pricing environment in the two-wheeler market. Portfolio Activity During the 12 months, your Manager took advantage of the market volatility to introduce two leading fast-moving consumer goods companies to the portfolio. Hindustan Lever is the locally listed subsidiary of Unilever. The company manufactures and distributes brands such as Lux, Fair & Lovely, Pepsodent and Lifebuoy, and is run by a professional management team. ITC, which is an associate of British American Tobacco, has a strong core business in tobacco and a diversified portfolio of packaged food and confectionary products, in addition to businesses in paper, packaging and hotels. The purchases were funded by top-slicing positions in stocks that had rallied and were relatively expensive, such as ABB India and Tata Consultancy Services. Gearing The Group is permitted to borrow up to 25% of its net assets (measured when new borrowings are incurred). The Group is seeking to arrange a £10m multi currency revolving credit facility with ING Bank to be available for drawing in the future, subject to satisfaction of certain conditions precedent, when the Manager believes that it is in Shareholders' interests to do so. The Board is responsible for the gearing policy of the Group and will review future gearing levels with the Manager on a regular basis. Investment Manager The Board has undertaken an in-depth review of the performance of the Manager and confirms that, given the long-term track record and the strength and depth of the investment team in the region the continuing appointment of AAM Asia is in the interests of Shareholders as a whole. Continuation Given the long-term prospects for the Indian economy, your Board recommends that Shareholders vote in favour of Resolution 10 in the Notice of Meeting to allow the Company to continue as an investment trust. Shareholders should continue to be aware of the dilutive impact of the Warrants in the event of any early liquidation of the Company. Annual General Meeting Ambassador Rozental will be offering himself for re-election and Professor Bulmer-Thomas will be retiring by rotation at the Annual General Meeting to be held at One Bow Churchyard, Cheapside, London EC4 on Thursday 20 September 2007 at 11.00 a.m. Your Board, having reviewed their proposed re-elections, strongly recommends Shareholders to vote in favour of their reappointment. In addition to the ordinary business of the meeting, Shareholders will be asked to approve the continuation of the Company as an investment trust; authorise the Board to buy back up to 14.99% of the Company's issued share capital; authorise the issue of new shares representing 5% of the present issued share capital; authorise the issue for cash of shares representing up to 5% of the present issued share capital otherwise than by a pro rata issue to existing Shareholders (ie pre-emption); and, to authorise the Board to sell shares held as treasury shares. In respect of the issue of shares from treasury, the Board's policy is kept under review but remains broadly unchanged from last year. The Board would only expect to sell shares from treasury at a maximum discount of 3% to the prevailing diluted NAV at the time of issue. Your Board recommends that Shareholders vote in favour of these resolutions and intends to do so in respect of its own shareholdings. It is proposed to change the provisions of the Company's Articles of Association which relate to the right of Directors and other officers to be indemnified. The proposed change would reflect the amendments to the Companies Act 1985 which came into effect in April 2005. These provisions are in line with current market practice and they allow companies to grant a wider indemnity to directors than was previously permitted. There will be a presentation by the Managers and an opportunity to meet the Directors over coffee following the AGM. Outlook Looking ahead, the turbulence that unsettled Indian equities over the past quarter is likely to remain a feature this year. Concerns remain about the health of the global economy, in particular a slowdown in the US and overheating in China. Although the huge size of India's economy offers a degree of insulation, any global shocks, including a sharper-than-anticipated downturn in the US, may undermine sentiment (as was seen in the late February sell-off). On the domestic front, the main challenges faced by the Singh administration include balancing the country's infrastructure development with tackling the budget deficit, controlling inflation and keeping the rupee's appreciation in check. It is currently the Central Bank's strategy to use currency appreciation and other price targets as opposed to increasing interest rates. Inflation remains a material risk and thus, further rate hikes are likely this year. The fiscal deficit is also a concern. For now, the aim is to have it completely removed by financial year 2008-09 but, as is often the case in India, this can be a moving target. Meanwhile, corporate earnings growth is expected to moderate this year, in view of higher borrowing costs and a stronger currency (which reached a nine-year high against the US dollar). Nonetheless, such easing expectations may prove a positive in the long term, particularly if inflation also subsides. At the very least, should the moderation help to cool the stock market, it would be a welcome development, if only to allow for earnings to catch up with share prices. Despite these hurdles, India's underlying fundamentals remain sound. Its economy has made remarkable progress over the last decade, trade and investment are flourishing, foreign exchange reserves stand at a record US$200 billion (among the largest in the world) and the political landscape remains stable. Not least, the country's stock market has entered its fifth year of expansion. Although valuations are no longer cheap, both on an absolute and relative basis, the Trust's Board is confident that the Managers have assembled a sound portfolio of quality companies which continue to offer attractive value. Furthermore, Indian companies have a track record of delivering positive earnings surprises and the quality of growth remains high. William Salomon Chairman 11 June 2007 GROUP INCOME STATEMENT Year ended Period from 1 March 2005 31 March 2007 to 31 March 2006 Revenue Capital Total Revenue Capital Total return return return return return return £'000 £'000 £'000 £'000 £'000 £'000 Investment income Dividend income 1,191 - 1,191 1,155 - 1,155 Interest income 21 - 21 20 - 20 ________ ________ ________ ________ ________ ________ Total revenue 1,212 - 1,212 1,175 - 1,175 ________ ________ ________ ________ ________ ________ (Losses)/gains on investments - (2,781) (2,781) - 31,332 31,332 Currency gains/(losses) - 8 8 - (7) (7) ________ ________ ________ ________ ________ ________ 1,212 (2,773) (1,561) 1,175 31,325 32,500 Expenses ________ ________ ________ ________ ________ ________ Management fees (689) - (689) (625) - (625) Other administrative expenses (496) - (496) (550) - (550) ________ ________ ________ ________ ________ ________ (Loss)/profit before finance costs and tax 27 (2,773) (2,746) - 31,325 31,325 Finance costs - - - (1) - (1) ________ ________ ________ ________ ________ ________ (Loss)/profit before tax 27 (2,773) (2,746) (1) 31,325 31,324 Taxation (6) - (6) (11) - (11) ________ ________ ________ ________ ________ ________ (Loss)/profit for the year or period 21 (2,773) (2,752) (12) 31,325 31,313 ________ ________ ________ ________ ________ ________ (Loss)/earnings per Ordinary share (pence) Basic and diluted 0.04 (5.79) (5.75) (0.03) 65.50 65.47 ________ ________ ________ ________ ________ ________ The total column of this statement represents the Income Statement of the Group, prepared in accordance with IFRS. The revenue return and capital return columns are supplementary to this and are prepared under guidance published by the Association of Investment Companies. All items in the above statement derive from continuing operations. All income is attributable to the equity holders of New India Investment Trust PLC. There are no minority interests. No operations were acquired or discontinued during the year. The accompanying notes are an integral part of the financial statements. GROUP AND COMPANY BALANCE SHEETS Group Company Group Company As at As at As at As at 31 March 31 March 31 March 31 March 2007 2007 2006 2006 £'000 £'000 £'000 £'000 Non-current assets Investments held at fair value through profit or loss 72,459 72,995 75,712 75,733 __________ __________ __________ __________ Current assets Cash at bank 527 139 392 192 Other receivables 695 24 82 1 __________ __________ __________ __________ Total current assets 1,222 163 474 193 __________ __________ __________ __________ Total assets 73,681 73,158 76,186 75,926 Current liabilities Other payables (627) (104) (389) (129) __________ __________ __________ __________ Net assets 73,054 73,054 75,797 75,797 __________ __________ __________ __________ Share capital and reserves Ordinary share capital 11,960 11,960 11,958 11,958 Share premium account 11,773 11,773 11,766 11,766 Special reserve 17,981 17,981 17,981 17,981 Warrant reserve 4,017 4,017 4,020 4,020 Warrant exercise reserve 12 12 9 9 Capital redemption reserve 4,089 4,089 4,089 4,089 Capital reserve 21,749 21,910 24,522 24,459 Revenue reserve 1,473 1,312 1,452 1,515 __________ __________ __________ __________ Net assets attributable to Ordinary Shareholders 73,054 73,054 75,797 75,797 __________ __________ __________ __________ Net asset value per Ordinary share (pence): Basic 152.71 152.71 158.47 158.47 __________ __________ __________ __________ Diluted 141.58 141.58 146.12 146.12 __________ __________ __________ __________ GROUP AND COMPANY STATEMENTS OF CHANGES IN EQUITY Group Year ended 31 March 2007 Share Warrant Capital Share premium Special Warrent exercise redemption Capital Revenue Retained capital account reserve reserve reserve reserve reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 March 11,958 11,766 17,981 4,020 9 4,089 24,522 1,452 - 75,797 2006 Dividends paid and - - - - - - - - - - declared Net profit on ordinary - - - - - - - - (2,752) (2,752) activities after taxation Issue of share capital 2 7 - (3) 3 - - - - 9 upon exercise of warrants Transfer from capital - - - - - - (2,773) - 2,773 - reserve to retained earnings Transfer from retained - - - - - - - 21 (21) - earnings to revenue reserve _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ Balance at 31 March 11,960 11,773 17,981 4,017 12 4,089 21,749 1,473 - 73,054 2007 _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ Period from 1 March 2005 to 31 March 2006 Share Warrant Capital Share premium Special Warrent exercise redemption Capital Revenue Retained capital account reserve reserve reserve reserve reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 28 February 11,953 11,752 17,981 4,026 3 4,089 (6,803) 1,799 - 44,800 2005 Dividends paid and - - - - - - - (335) - (335) declared Net profit on ordinary - - - - - - - - 31,313 31,313 activities after taxation Issue of share capital 5 14 - (6) 6 - - - - 19 upon exercise of warrants Transfer from retained - - - - - - 31,325 - (31,325) - earnings to capital reserve Transfer from revenue - - - - - - - (12) 12 - reserve to retained earnings _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ Balance at 31 March 11,958 11,766 17,981 4,020 9 4,089 24,522 1,452 - 75,797 2006 _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ Company Year ended 31 March 2007 Share Warrant Capital Share premium Special Warrent exercise redemption Capital Revenue Retained capital account reserve reserve reserve reserve reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 31 March 11,958 11,766 17,981 4,020 9 4,089 24,459 1,515 - 75,797 2006 Dividends paid and - - - - - - - - - - declared Net profit on ordinary - - - - - - - - (2,752) (2,752) activities after taxation Issue of share capital 2 7 - (3) 3 - - - - 9 upon exercise of warrants Transfer from capital - - - - - - (2,549) - 2,549 - reserve to retained earnings Transfer from revenue - - - - - - - (203) 203 - reserve to retained earnings _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ Balance at 31 March 11,960 11,773 17,981 4,017 12 4,089 21,910 1,312 - 73,054 2007 _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ Period from 1 March 2005 to 31 March 2006 Share Warrant Capital Share premium Special Warrent exercise redemption Capital Revenue Retained capital account reserve reserve reserve reserve reserve reserve earnings Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 28 February 11,953 11,752 17,981 4,026 3 4,089 (6,828) 1,824 - 44,800 2005 Dividends paid and - - - - - - - (335) - (335) declared Net profit on ordinary - - - - - - - - 31,313 31,313 activities after taxation Issue of share capital 5 14 - (6) 6 - - - - 19 upon exercise of warrants Transfer from retained - - - - - - 31,287 - (31,287) - earnings to capital reserve Transfer from retained - - - - - - - 26 (26) - earnings to revenue reserve _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ Balance at 31 March 11,958 11,766 17,981 4,020 9 4,089 24,459 1,515 - 75,797 2006 _______ _______ _______ _______ _______ _______ _______ _______ _______ _______ GROUP AND COMPANY CASH FLOW STATEMENTS Year ended Period from 1 March 2005 31 March 2007 to 31 March 2006 Group Company Group Company £'000 £'000 £'000 £'000 Operating activities (Loss)/profit before tax (2,746) (2,752) 31,324 31,319 Add back interest payable - - 1 1 Losses/(gains) on investments held at fair value 2,781 2,548 (31,332) (31,293) through profit or loss Net (gains)/losses on foreign exchange (8) 1 7 6 Net sales/(purchases) of investments held at fair 472 190 (1,626) (155) value through profit or loss (Increase) in amounts due from brokers (425) - - - (Increase)/decrease in other receivables (188) (23) (6) 50 Increase/(decrease) in amounts due to brokers 340 - (125) - (Decrease)/increase in other payables (103) (24) 187 4 Overseas withholding tax suffered - - (5) (5) ___________ ___________ ___________ ___________ Net cash inflow/(outflow) from operating activities 123 (60) (1,575) (73) before interest and corporation tax Interest paid - - (1) (1) Corporation tax paid (5) (1) (134) (134) ___________ ___________ ___________ ___________ Net cash inflow/(outflow) from operating activities 118 (61) (1,710) (208) Financing activities Exercise of Warrants 9 9 19 19 Dividends paid - - (335) (335) ___________ ___________ ___________ ___________ Net cash inflow/(outflow) from financing activities 9 9 (316) (316) ___________ ___________ ___________ ___________ Net increase/(decrease) in cash and cash equivalents 127 (52) (2,026) (524) Cash and cash equivalents at the start of the year or 392 192 2,425 722 period Effect of foreign exchange rate changes 8 (1) (7) (6) ___________ ___________ ___________ ___________ Cash and cash equivalents at the end of the year or 527 139 392 192 period ___________ ___________ ___________ ___________ Notes: 1. Return per Ordinary share The earnings per Ordinary share is based on the net loss after taxation of £2,752,000 (period 1 March 2005 to 31 March 2006 - net income after taxation of £31,313,000) and on 47,836,624 (period 1 March 2005 to 31 March 2006 - 47,824,328) Ordinary shares, being the weighted average number of Ordinary shares in issue during the year. The earnings per Ordinary share detailed above can be further analysed between revenue and capital as follows: Year ended Period from 1 March 2005 31 March 2007 to 31 March 2006 Revenue Capital Total Revenue Capital Total Net (loss)/profit (£'000) 21 (2,773) (2,752) (12) 31,325 31,313 Weighted average number of Ordinary shares 47,836,624 47,836,624 47,836,624 47,824,328 47,824,328 47,824,328 in issue Return per Ordinary share (pence) 0.04 (5.79) (5.75) (0.03) 65.50 65.47 2. Net asset value per share The basic net asset value per Ordinary share is based on a net asset value of £73,054,000 (2006 - £75,797,000) and on 47,839,850 (2006 - 47,830,750) Ordinary shares, being the number of Ordinary shares in issue at the year end. The diluted net asset value per Ordinary share has been calculated by reference to the total number of Ordinary shares in issue at the year end and on the assumption that those Warrants which are not exercised at the year end, amounting to 12,805,290 Warrants as at 31 March 2007 (31 March 2006 - 12,814,390), were exercised on the first day of the financial year at 100p per share, giving a total of 60,645,140 (31 March 2006 - 60,645,140) Ordinary shares. 3. The financial information set out above does not constitute the Group's statutory accounts for the period ended 31 March 2007. This information is prepared on the same basis as set out in the previous year's accounts. The financial information for 2006 is derived from the statutory accounts for 2006, which have been delivered to the Registrar of Companies. The auditors have reported on the 2006 accounts; their report was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The statutory accounts for 2007 will be finalised on the basis of the financial information presented by the Directors in this preliminary announcement and will be delivered to the Registrar of Companies in due course. 4. The Annual Report will be posted to Shareholders in due course and further copies may be obtained from the registered office, One Bow Churchyard, Cheapside, London EC4M 9HH. 5. This preliminary announcement was approved by the Board on 11 June 2007. Aberdeen Asset Management PLC Secretaries 11 June 2007 This information is provided by RNS The company news service from the London Stock Exchange

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