Final Results

RNS Number : 3734Z

India Capital Growth Fund Limited

15 March 2012

 



15 March 2012

INDIA CAPITAL GROWTH FUND LIMITED

ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2011

Per Ordinary Share	31 Dec  2011	31 Dec 2010	% change
Net asset value	39.59p	73.92p	(46.4%)
Market price	33.75p	61.00p	(44.6%)
Discount	14.75%	17.48%	-
Index
BSE Midcap Index	5135.1	7802.7	(34.2%)

Key points:

·    Net asset value per share declined 46.4% (36.5% in local currency terms) over the year under review, reflecting sharp falls in the Indian equity markets and exacerbated by the depreciation of the Rupee against Sterling.

·    However, significant improvement in the Company's outlook for 2012 after a disappointing 2011. The Indian economy continues to grow at around 7% and the rate of inflation is starting to reduce.

·    The Rupee and the Indian equity markets have rallied since the year end and the Company's net asset value per share increased by 22.9% (16.7% in local currency terms) over the two months to February 2012.

·    Investment Manager continued to reduce concentration risk during 2011 by selling large legacy holdings, exiting the largest unlisted investment and building on the diversification of core holdings.

Enquiries:

India Capital Growth Fund Limited

Northern Trust International Fund Administration Services (Guernsey) Limited (Secretary)

Andrew Maiden                01481 745368

Ocean Dial Asset Management Limited (Investment Manager)

David Brunner                  020 7802 8907

Grant Thornton UK LLP (NOMAD)

Philip Secrett

Jen Hatter                         020 7383 5100

Numis Securities Limited (Broker)

Hugh Jonathan

Nathan Brown                  020 7260 1000

CHAIRMAN'S STATEMENT

Economy and politics

2011 was a disappointing year in many ways. The Indian equity markets fell sharply, the Rupee depreciated materially against both Sterling and the US Dollar and the much hoped for political and economic reforms failed to materialise. World events exacerbated the internal issues: Unrest in North Africa and the Middle East drove up oil prices; concerns mounted over the financial stability of some European countries; the long-term future of the European currency was called into question; and there was near zero economic growth in most Western countries. In India, inflation stubbornly refused to abate, to which the Reserve Bank of India responded by tightening monetary policies. Furthermore, attempts to address corruption scandals have so far failed and the political log-jam in infrastructure development has been intractable.

Against this background it is perhaps not surprising that the net asset value of the Company fell sharply, with a decline of 46.4% over the year. The Company has a declared policy of not hedging its exposure to the Indian Rupee and the depreciation of the Rupee against Sterling of almost 10% was a material contributor to this overall decline. The underlying portfolio fell 36.5% in local currency terms against a fall in the BSE Midcap index of 34.2% - an underperformance against the notional benchmark of some 2.3%. Much of this underperformance has come from our expectation that the industrial sector would start to improve and that the consumer would be hampered by tightening monetary policies and the macro environment. This unfortunately proved a premature expectation but, as I will go on to describe, the recovery that took place in January 2012 may well indicate a sea change in investor confidence since the late autumn.

Outlook

Since the year end, the Rupee and the Indian equity markets have rallied, such that by the end of this February the Rupee was up 5.1% against Sterling, the BSE Sensex was up 14.9% and the BSE Midcap Index was up 24.4%, both in local currency terms. Over this period the net asset value of the Company increased by 22.9% in Sterling terms and 16.7% in local currency terms, which is most encouraging. It is interesting to note that some of the worst performing holdings in the portfolio last year recovered the most in January and February. Despite worldwide traumas, the Indian economy continues to grow at around 7% and inflation is starting to reduce. India appears to be at the peak of its monetary cycle and there is a growing expectation that monetary policy will begin to ease. These are significant positives.

In early February I visited India to talk to opinion formers and the management of some of our investee companies. I was intrigued to hear a near uniform optimistic view of the economy and markets, unlike last year when there was a degree of pessimism among some pundits. Apart from the likelihood of inflation and interest rates falling, there seems to be a number of good reasons for the change of mood: The pressure on the Government to be seen to be pressing on faster with reform prior to the National Election in 2014; the feeling that bureaucrats have "bought into" the idea of fostering investor confidence in order to promote growth; the increasingly effective use of the Right To Information laws introduced a few years ago to help the drive against corruption; and a feeling that the world has woken up to the inadequacies of India and that this is now priced into the market - for example the problems caused for builders of new roads by the laws relating to property ownership. These were last revised in the 19th century, resulting in endless delays in starting construction while someone tries to work out which of the numerous grandchildren of the original owner has valid title. As a distinguished Government adviser told me, "India is a society in transition and an economy in turbulence".

If the political reforms addressing corruption, streamlining bureaucracy and facilitating major infrastructure investment, which to date have promised so much but delivered so little, can start to be realised, then our optimism will be justified. While the fiscal deficit remains a concern, foreign investors have generally held their nerve and progress on these matters should see foreign investment inflows returning with a double beneficial effect on both currency and markets.

The Company's portfolio held an average cash balance of 20% and further diversified its core holdings during the year. This has been a useful defence in the downturn and means the Company is well positioned for 2012.

Corporate governance

Sound corporate governance remains a priority for the Board. As noted in the Annual Report for 2010, the AIC Code has been adopted and we continue to report to shareholders against that benchmark. One area in which we were not previously fully compliant was the independence of the Audit Committee as one member was not wholly independent and there was no available alternative from within the Board. Given the pressure on the Total Expense Ratio arising from the fall in the value of the assets, increasing the size of the Board was considered inappropriate. Therefore Andrew Maiden, who represents the Administrator, Northern Trust, kindly agreed to step down from the Board and John Whittle, a Guernsey resident Chartered Accountant with wide experience, was appointed in his place. John has also been appointed to the Audit Committee alongside Peter Niven who chairs the Committee, such that the Committee is now made up of wholly independent directors. There are now no material areas of non-compliance with the AIC Code.

Fred Carr

Chairman

14 March, 2012

INVESTMENT MANAGER'S REPORT

Introduction

2011 proved to be a particularly challenging year for India's equity markets. The BSE Midcap index closed down 34.2%, while the BSE Sensex declined 24.6% in local currency terms. This made India the second worst performing emerging market and is the second worst yearly performance in its history, after 2008. Against this backdrop the net asset value of the Company fell 46.4%, of which 36.5% came from the fall in net asset value in local currency terms and 9.9% from the decline in the Rupee. A detailed discussion on the performance of the portfolio is included later in this report.

The year started off in the midst of the Euro crisis yet there was optimism at the domestic level, with expectations that the Indian Government would announce several pending policy initiatives to boost investments and drive growth. As the year progressed, policy paralysis, persistently high inflation and rising interest rates saw domestic issues overshadow global macro concerns. Moreover, the flight of capital to safety also exposed India's dependence on foreign capital to fund its current account deficit. Consequently, GDP growth slowed well below original expectations during the year. Despite the prevalent negative sentiment, India remained one of the fastest growing economies among the emerging markets with GDP growth in the region of 7%. Structural drivers of investments, demographics and consumption still remain, albeit within the context of a short term cyclical slowdown. This is also reflected by the fact that long-term institutional investors continued to stay invested in India, with negligible FII outflows unlike that witnessed in many emerging markets in 2011.

Economy and politics

2011 witnessed a gradual deterioration in India's macro environment, leading to a decline in the growth momentum of the Indian economy. India's real GDP, which had maintained a trajectory of 8% to 9% per annum over the previous two years, slowed to its lowest level of 6.9% during the quarter ended September 2011. This decline occurred despite the services sector continuing to maintain growth above 9% and a good monsoon that helped sustain agriculture growth at above 3%. The slowdown was caused by the industrial sector, which grew only 3.2% during the quarter. The index for industrial production went into negative growth trajectory in October 2011.

While the global environment did not help India's cause, the domestic issues, particularly at the political level, caused a major disappointment in 2011. The political landscape over the past several years has undergone a significant change. Rather than a few large national parties, politics is now dominated by several strong regional parties, each with a focus on its own local agenda. Consequently the resultant coalition national government is hampered in its ability to govern or pass any policy measures which are perceived to be non-populist. This was most evident in 2011 when several policy measures on reforms expected to be introduced were either withdrawn, reversed or just pushed back due to lack of consensus. Several of these, like increasing foreign direct investments in retail, airlines and insurance, were critical in attracting much needed foreign investments to push forward growth. Others, such as the goods & services tax (GST), land acquisition bill, mining bill, and direct tax code, critical for removing bottlenecks and improving efficiencies in the system, continue to be work in process.

However, the biggest issue was the impact of corruption investigations. This started with the telecoms sector but has since spread its wings across several other sectors, the most prominent among them being in the allocation of mining rights to companies. With several politicians and bureaucrats being jailed or under investigation, the entire decision making process within the Government came to a virtual standstill. The resultant delays in many projects has shaken business confidence and delivered a fatal blow to the recovery of infrastructure spending. Even in smaller projects, companies transacting with Government entities are seeing delayed payments, forcing them to focus on capital conservation rather than growth.

The above issues are, however, nothing new and have always been part and parcel of India's democracy. Nevertheless with 'policy paralysis' continuing well beyond a year, these issues have started to hurt the economy; particularly investments in the infrastructure sector, one of the key pillars to sustaining high GDP growth. There is scope for optimism however, as the Government, which until now interpreted the slowdown as a consequence of global factors, has accepted the reality of the situation and is actively trying to revive economic momentum. Recently there have been several meetings between Government officials and industrialists and once the state election in Uttar Pradesh, India's largest state, is over in March 2012, several policy measures aimed at reviving the investment climate are expected.

While the political climate has clearly not been conducive, the dominant theme for 2011 was persistently high inflation. The genesis of this can be attributed to two factors: (1) India's high dependence on commodity imports such as oil, for which 70% of its demand is imported, which is leading to structurally higher prices across the economy; and (2) the Government's initiatives to bolster growth post the 2008 global financial crisis. The latter took the form of increased expenses, particularly in the rural economy through various subsidy initiatives as well as aggressive increases in the minimum support prices (MSP) which is the price at which the Government buys food grains from the farmers. The positive impact of these measures has been to increase income in the hands of rural India, leading to a rise in consumption demand from the rural economy. However, while many such expenditure schemes were originally intended to bolster growth in light of the weak global environment, the cost of these schemes has continued at elevated levels. This is one of the reasons why inflation has persisted at the 9% level during 2010 and 2011.

Whilst the Government continued with its expansionary policies, the Reserve Bank of India (RBI) made it clear that its main priority was to bring inflation under control, even at the expense of economic growth. Whilst it is argued that monetary policy has little effect in controlling food inflation, the principal concern of the RBI has been that the pickup in food prices feeds into core inflation via upward pressure on wages. After having made six interest rate increases in 2010 the RBI pursued the most aggressive tightening of rates (225bps in 2011 and 425bps since 2010) over the last decade. In fact from April 2011 onwards, the RBI started raising policy rates even though much of the incremental data was pointing at a decline in growth. The tighter rate cycle was also accompanied by a rise in the cash reserve ratios (CRR) of banks, which tightened liquidity in the system. While these rate increases did little to stem inflation in 2011, it impacted corporate balance sheets and corporate capital expenditure plans as the focus shifted to conserving capital amidst uncertain times.

Going into 2012, a key concern is India's ballooning current account deficit. India, unlike most of Asia's emerging economies, has historically run a high current account deficit because of its dependence on commodity imports, especially oil and gold. This will persist with India likely to be among one of the top three current account deficit countries globally in 2012. This deficit is funded predominately through foreign investment inflows, but with global uncertainty, these inflows have dwindled and foreign exchange reserves have contracted from a high of USD320bn, to USD290bn at present. Moreover, with trade growing and corporates gaining greater access to foreign debt, there has been increased pressure to hedge US dollar exposure, putting additional pressure on the currency. The RBI's initial reluctance to support the currency in this environment for fear of stoking inflation, led to a collapse in the Rupee which fell almost 15% over a month. This move was against the consensus view at the beginning of 2011 of an appreciation of the currency on the back of a strongly driven domestic economy in a weak global environment. The depreciation left many corporates with high foreign currency un-hedged borrowings lying exposed, which further damaged profitability.

We are however not as concerned as some about the current account deficit as we believe the Government has several policy measures at its disposal which can increase inflows. Some of these were implemented in Q4 2011 such as higher limits for investment in corporate and government local currency bonds, permission for international retail investors to invest in India, freeing up interest rates for NRI deposits and measures to reduce speculation. All these measures have already had the desired effect in improving the strength of the Rupee.

The key challenge, we believe, going into 2012 is the Government's ability to reignite the investment process. With many of those corporates who led the previous investment cycle constrained by overstretched balance sheets or poor business models, it is up to the Government to initiate the process. However, the deteriorating macro environment has also impacted the Government's flexibility. In addition, rising Government expenditure in excess of budget, mainly as a consequence of the depreciating Rupee, further inflated its subsidy costs. This is creating a fiscal problem, with the estimated fiscal deficit as a percentage of GDP for 2012 now at about 5.5% to 5.8%, versus the Government's budgeted target of 4.6%. This will constrain the Government's ability to kick start the investment process unless it finds new means of generating revenues through divestment, taxes or by pushing reforms to increase private sector investments.

Clearly, future policy actions by the Government in early 2012 are key to restoring future growth.

Portfolio construction and performance 

In the 2010 Annual Review we highlighted the intention to "de-risk" the portfolio. This has been achieved by increasing the number of holdings to reduce the concentration risk, increasing the liquidity of the stocks in the portfolio in terms of average daily turnover and strengthening the investment process and methods by which the portfolio is maintained. During 2011, we continued to sell large concentrated holdings of the legacy portfolio and also exited the largest of the unlisted companies in the portfolio, Marwadi Shares and Finance Limited. In light of the deteriorating macro environment we used our cash judiciously and held an average cash position of 20.3%. At the same time we further built on the diversification of our core holdings. Our top 10 holdings have thus seen considerable change during the year and we are satisfied that the bulk of these will be strategic core holdings for the long term. 

In 2011, the BSE Sensex was down 24.6% and the BSE Midcap Index down 34.2%. There was no sector in the BSE Midcap Index which contributed positively to returns; industrials, financials and metals were the worst performing sectors, while healthcare, consumer staples and IT performed relatively better.

The net asset value of the Company was down 36.5% in Rupee terms. Within the portfolio, the average cash position of 20% was the single largest contributor to positive attribution owing to overall weakness in the market. However, this was to a large extent offset by our low exposure to some of the defensive sectors such as the consumer discretionary and healthcare sectors, where the portfolio was underweight due to their high valuations. Positive relative performance was generated from the portfolio's positioning in the telecoms, energy, utilities and IT sectors, whilst the majority of negative performance came from the industrials, financials and materials.

Portfolio holdings which positively contributed were Eicher Motors (2.5% weighting) and Cairn India (3.3% weighting) giving 23% and 4% gains for the year respectively. Eicher Motors, a manufacturer of high end motorcycles and commercial vehicles, primarily in the 5 to 12 ton category, is a dominant operator in both of its core segments. In 2008, it entered into a joint venture with Volvo, Sweden for the sale and distribution of Eicher, as well as Volvo trucks and buses. This relationship has been further strengthened by Eicher setting up a manufacturing hub for Volvo engines for the global markets. We see this relationship as the driver for future growth as Eicher leverages on Volvo's technical expertise and brand strength while Volvo leverages on Eicher's manufacturing and sales and distribution strength. 

Cairn India Limited, an oil and gas exploration company, has benefited from an increase in oil prices. Furthermore, the recent takeover by Vedanta Limited has provided the impetus for Cairn India to grow beyond its main fields in Rajasthan. The recent exploratory successes in a Sri Lankan gas field and the increasing production planned over the next three years from its existing fields augur well for Cairn India to grow. 

The major disappointment in the portfolio came from its exposure to the industrial and financial sectors, which were principally affected by the 'policy paralysis' by the Government, compounded by the rising interest rate cycle and the depreciation of the Rupee. The resultant lack of confidence in the sustainability of business momentum, uncertainty of earnings and the likelihood of potential defaults due to excess leverage in certain companies resulted in a sharp fall in stock prices across the board. There appeared to be almost no discrimination by the market between the good and the bad.

Conclusion

2011 saw deteriorating fundamentals for the Indian economy. Persistent and high inflation, rising interest rates, worsening fiscal deficit, negative capital flows in the balance of payments, and exasperation with the ruling administration best sums up the year. However it is the slowing growth, led by decreasing investment which is the key concern going into 2012.

While most of these concerns are visible in the economic indicators, market performance and policymaker and media discussions, a fundamentally negative case can be made on almost any of the above points. Risks are high, but for the environment to improve it should not require all the problems to vanish. As long as some of the main issues are tackled, many of the other seemingly immovable problems are likely to address themselves.

Investment in the country's infrastructure and in its manufacturing capacity is crucial to future economic growth. An attempt to reverse the current economic slowdown will be driven by an improvement of the investment cycle. The lack of project announcements has been one of the main reasons behind not only the slowdown but also the persistency of inflation due to lack of capacity, fiscal deficit due to lack of revenues and not least the currency weakness due to concern over the sustainability of growth.

The interest rate cycle appears to have peaked and inflation has started trending downwards. In 2011, the objective of monetary policy was containing inflation. In 2012, this could shift to the revival of economic growth. Now that the Government has recognised the economic slowdown as a problem, we expect it to take measures to address the major causes. This is the principal reason for our positive outlook for the year ahead.

Ocean Dial Asset Management

March 2012

INVESTMENT POLICY

The Group's investment objective is to provide long-term capital appreciation by investing (directly and indirectly) in companies based in India. The investment policy permits the Group to make investments in a range of Indian equity and equity linked securities and predominantly in listed mid and small cap Indian companies with a smaller proportion in unlisted Indian companies. Investment may also be made in large-cap listed Indian companies and in companies incorporated outside India which have significant operations or markets in India. While the principal focus is on investment in listed or unlisted equity securities or equity linked securities, the Group has the flexibility to invest in bonds (including non-investment grade bonds), convertibles and other types of securities. The Group may, for the purposes of hedging and investing, use derivative instruments such as financial futures, options and warrants. The Group may, from time to time, use borrowings to provide short-term liquidity and, if the Directors deem it prudent, for longer term purposes. The Directors intend to restrict borrowings on a longer term basis to a maximum amount equal to 25% of the net assets of the Group at the time of the drawdown. It is the Group's declared policy not to hedge the exposure to the Indian Rupee.

PRINCIPAL GROUP INVESTMENTS

AS AT 31 DECEMBER 2011

HOLDING	TYPE	SECTOR	VALUE £000'S	% of PORTFOLIO
Federal Bank Ltd	Mid Cap	Financials	1,132	3.81
Prime Focus Ltd	Small Cap	Consumer discretionary	1,128	3.80
Cairn India Ltd	Large Cap	Energy	976	3.29
Jain Irrigation Systems Ltd	Mid Cap	Industrials	904	3.04
Manappuram Finance Ltd	Mid Cap	Financials	873	2.94
Redington India Ltd	Mid Cap	IT	764	2.57
Eicher Motors Ltd	Mid Cap	Industrials	756	2.55
Indian Bank Ltd	Mid Cap	Financials	746	2.51
Jammu & Kashmir Bank Ltd	Mid Cap	Financials	733	2.47
Indusind Bank Ltd	Large Cap	Financials	708	2.38
Total top 10 equity investments			8,720	29.36
Other Small Cap	(6 companies)		2,972	10.01
Other Mid Cap	(16 companies)		7,790	26.23
Other Large Cap	(5 companies)		2,446	8.24
Other Unlisted	(1 company)		-	-
Total equity investments			21,928	73.84
Cash less other net current liabilities			7,769	26.16
Total Portfolio			29,697	100.00

Note:

Large Cap comprises companies with a market capitalisation above INR 100 billion (£1.4 billion)

Mid Cap comprises companies with a market capitalisation between INR 15 billion and INR 100 billion (£215 million - £1.4 billion)

Small Cap comprises companies with a market capitalisation below INR 15 billion (£215 million)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2011

						Year to		Year to
						31.12.11		31.12.10
				Revenue £000	Capital £000	Total £000		Total £000
Income
Interest income				-	-	-		1
Investment income				454	-	454		232
				454	-	454		233
Net (losses)/gains on financial assets at fair value through profit or loss
Market movements				-	(16,707)	(16,707)		7,180
Foreign exchange movements				-	(7,275)	(7,275)		4,838
				-	(23,982)	(23,982)		12,018
Total (expense)/income				454	(23,982)	(23,528)		12,251
Expenses
Management fee				(613)	-	(613)		(787)
Cost of acquisition and disposal of investments				-	(195)	(195)		(277)
Foreign exchange (losses)/gains				(936)	5	(931)		39
Other expenses				(480)	-	(480)		(469)
Total expenses				(2,029)	(190)	(2,219)		(1,494)
(Loss)/Profit for the year before taxation				(1,575)	(24,172)	(25,747)		10,757
Taxation				-	-	-		-
(Loss)/Profit for the year after taxation				(1,575)	(24,172)	(25,747)		10,757
(Loss)/Earnings per Ordinary Share - (pence)				(2.10)	(32.23)	(34.33)		14.34

The total column of this statement represents the Group's statement of comprehensive income, prepared in accordance with IFRS as adopted by the EU and interpretations adopted by the International Accounting Standards Board (IASB). The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies.

The profit after tax is the "total comprehensive income" as defined by IAS 1. There is no other comprehensive income as defined by IFRS.

All the items in the above statement derive from continuing operations.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2011

							Other Distributable Reserve £000
			Share Capital £000	Capital Reserve		Revenue Reserve £000
				Realised £000	Unrealised £000			Total   £000
Balance as at 1 January 2011			750	(19,312)	4,027	(2,899)	72,878	55,444
Loss on investments			-	(4,011)	(12,696)	-	-	(16,707)
Revenue loss for the year after taxation (excluding foreign exchange losses)			-	-	-	(1,575)	-	(1,575)
Cost of acquisition and disposal of investments			-	(98)	(97)	-	-	(195)
Loss on foreign currency			-	(610)	(6,660)	-	-	(7,270)
Balance as at 31 December 2011			750	(24,031)	(15,426)	(4,474)	72,878	29,697

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2010

															Other Distributable Reserve £000
									Share Capital £000		Capital Reserve		Revenue Reserve £000
											Realised £000	Unrealised £000				Total   £000
Balance as at 1 January 2010								750			(13,187)	(13,818)	(1,936)	72,877		44,686
Issue of ordinary shares										-	-	-	-	1		1
(Loss)/gain on investments										-	(12,826)	20,006	-		-	7,180
Revenue loss for the year after taxation (excluding foreign									-		-	-	(963)		-	(963)
exchange losses)
Cost of acquisition and disposal of investments									-		(119)	(158)	-		-	(277)
Gain/(loss) on foreign currency								-			6,820	(2,003)	-	-		4,817
Balance as at 31 December 2010										750	(19,312)	4,027	(2,899)	72,878		55,444

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011

			31.12.11		31.12.10
			£000		£000
Non-current assets
Financial assets designated at fair value through profit or loss			21,928		52,172
Current assets
Cash and cash equivalents			7,865		3,429
Receivables			34		10
			7,899		3,439
Current liabilities
Payables			(130)		(167)
Net current assets			7,769		3,272
Total assets less current liabilities			29,697		55,444
Equity
Ordinary share capital			750		750
Reserves			28,947		54,694
Total equity			29,697		55,444
Number of Ordinary Shares in issue			75,001,463		75,001,463
Net Asset Value per Ordinary Share (pence)			39.59		73.92

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2011

				Year to		Year to
				31.12.11		31.12.10
				£000		£000
Cash flows from operating activities
Investment income				454		232
Bank interest				-		1
Management fee				(646)		(773)
Other cash payments				(503)		(488)
Net cash outflow from operating activities				(695)		(1,028)
Cash flows from investing activities
Purchase of investments				(24,627)		(46,617)
Sale of investments				30,889		49,856
Transaction charges relating to the purchase and sale of investments				(195)		(277)
Net cash inflow from investing activities				6,067		2,962
Cash flows from financing activities
Proceeds from issue of shares				-		1
Net cash inflow from financing activities				-		1
Net increase in cash and cash equivalents during the year				5,372		1,935
Cash and cash equivalents at the start of the year				3,429		1,434
Exchange (losses)/gains on cash and cash equivalents				(936)		60
Cash and cash equivalents at the end of the year				7,865		3,429

This preliminary announcement was approved by the Board on 14 March 2012. It is not the Company's statutory accounts, but has been prepared on the same basis as those accounts. The statutory accounts for the year ended 31 December 2011 have been approved and audited and received an audit report which was unqualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying the report.

The full Annual Report together with the audited accounts for the year is expected to be mailed to shareholders on 30 March and a copy will be posted on the Company's website www.indiacapitalgrowth.com in accordance with AIM Rule 26.

Disclaimer: Neither the contents of the Company's website, nor the contents of any website accessible from hyperlinks on the Company's website (or any other website), is incorporated into, or forms part of, this announcement.

 

END

 

 

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