Final Results

RNS Number : 8934G

India Capital Growth Fund Limited

20 March 2020

 

INDIA CAPITAL GROWTH FUND LIMITED

Annual Results for the year ended 31 December 2019

20 March 2020, London - India Capital Growth Fund ("ICGF" or "the Company"), the LSE premium listed investment company established to take advantage of long-term investment opportunities in companies based in India, today reports results for the year ended 31 December 2019.

Highlights

	2019	2018	% change
Per Ordinary Share
Net Asset Value (NAV)	88.50p	101.65p	-12.9%
Share price discount to NAV	20.4%	14.0%
FX impact
Indian Rupee / Sterling	93.48	88.55	-5.6%

· 2019 was another difficult year for Indian equity markets and for Indian small and mid-cap stocks in particular 

· The NAV declined by 13% during the year, underperforming the Company's benchmark, the BSE Midcap TR Index which fell 7% 

· Positive contributions to the portfolio came from Berger Paints (+57%), PI Industries (+68%), NIIT Technologies (+18%) and Essel Propack (+30%)

· Portfolio turned over 9% (2017: 13%) during the year

· The Company's NAV, and correspondingly its share price, has fallen 28% and 50% respectively since the year end and in particular since the coronavirus pandemic outbreak which has caused unprecedented falls on global markets

Indian investment environment

· In 2019 the broader economic slowdown and heightened risk aversion led to a substantial divergence between the top ten stocks (by market capitalisation) and the rest of the Indian stock markets

· Economic growth in India has continued to slow as businesses are continuing to adapt to a new operating environment driven by the BJP Government

· Whilst oil prices increased in 2019 and the Indian Rupee weakened accordingly, the recent sharp fall in oil prices will benefit the Indian economy once the significant negative impact of the coronavirus pandemic has receded 

Elisabeth Scott, Chairman of India Capital Growth Fund, said: " The global economy is grappling with a worldwide pandemic, an oil price war, and unprecedented extreme volatility in capital markets. The situation is rapidly evolving on a daily basis and as such taking a view as to the likely near term impact on the Indian economy is a challenging task.  The Mumbai based Investment Management team is in regular touch with the companies in which your Company is invested, monitoring corporate developments closely. They are hopeful that, when concerns about COVID19 are allayed, Indian equities will be able to recover and that businesses will return to growth.  

Additionally, India is in the midst of moving from a patronage based to a rules-based system. Whilst the transition period may result in short-term setbacks, the long-term impact of this change will be to improve governance and, in turn, to open up new opportunities for investment in India"

ENQUIRIES

David Harris
Frostrow Capital
[phone]
[e-mail]
William Clutterbuck
MaitlandAMO PR
[phone]
[e-mail]
David Cornell
Ocean Dial Asset Management
[phone]
[e-mail]
Robert Finlay
Shore Capital
[phone]
Nick Robilliard
Apex Fund and Corporate Services (Guernsey) Limited
[phone]
[e-mail]

About India Capital Growth Fund

India Capital Growth Fund Limited ("ICGF"), the LSE premium listed investment company registered and incorporated in Guernsey was established to take advantage of long-term investment opportunities in companies based in India. ICGF predominantly invests in listed mid and small cap companies, although investments may also be made in large cap and private Indian companies where the Fund Manager believes long-term capital appreciation will be achieved. www.indiacapitalgrowth.com

CHAIRMAN'S STATEMENT

Following on from a challenging end to 2018, 2019 offered little respite for the Indian small and mid-cap equity markets, where your Company is predominantly invested. In a flight to safety, both foreign and domestic investors continued to favour a small handful of large cap stocks, which caused a sharp divergence in performance between the favoured few and the rest of the market.

Disappointingly, Narendra Modi's landslide victory in the May elections failed to provide the reassurance to investors that had been anticipated. An underwhelming Union Budget from Finance Minister, Nirmala Sitharaman, meant that the BJP's second term in office got off to a rocky start. A slowdown in consumption and an ongoing liquidity squeeze sparked further nervousness.

In this environment, your Company's Net Asset Value declined in value by 12.9%, while the share price declined by 19.4%, both falling further than the notional benchmark, the BSE Mid Cap Total Return Index, which fell 7.2% (both in Sterling terms). As the Investment Manager's Report describes in more detail, five stocks contributed the majority of this underperformance.  These were Yes Bank, Dewan Housing Finance, Motherson Sumi Systems, Skipper and Manpasand Beverages.

Discount and Investor Relations

Over the period, the share price discount to Net Asset Value widened to 20.4% (from 14.0% at the start of 2019).  Your Board believes that it is in the interests of shareholders to actively promote the Company and its investment strategy to as wide an audience as possible, and that this activity can help to narrow the discount in the future.  To that end, the Investment Manager has conducted numerous meetings across the UK, along with a number of portfolio update calls for investors and analysts.

Your Company and the investment team have been regularly featured in the media.  Our PR agency, MaitlandAMO PR, looks for opportunities for representatives of the Investment Manager and the Investment Adviser to comment on events in India and the Board believes that this brings added recognition and credibility to your Company, backing up the sales efforts of the Ocean Dial team. Our broker, Shore Capital, facilitates liquidity in the shares of your Company and helps the Company to broaden its reach through the production and dissemination of research notes. 

Due Diligence visit to India

In March, the Board travelled to India on a due diligence visit.  The Board met members of Ocean Dial's investment and research team in Mumbai along with representatives from Avendus, Ocean Dial's parent company.  We accompanied Gaurav Narain and other members of the investment team on a number of company visits in Mumbai and Delhi.  Amongst the companies that we met were PI Industries, NIIT Technologies, Balkrishna Industries, Radico Khaitan and Kajaria Ceramics, giving us a view across the spectrum of the Indian economy.  We also met a number of commentators and market specialists.

The trip offered us an opportunity to see Ocean Dial's investment process in action, to see first-hand the quality of management of our portfolio companies, the opportunities for growth and some of the challenges they face.

Changes at the Investment Manager

A key focus for Ocean Dial in 2019 was strengthening the investment team. The Board was pleased to note that in October, Ocean Dial appointed a new co-Head of Equities, Tridib Pathak, and more recently, a Data Analyst. These additions will allow the team to focus more thoroughly on a select universe of stocks. Your Board is encouraged by these developments and hopes that these changes will result in improving performance.

Shareholders can visit our website  to read more about the evolution of Ocean Dial's investment process and examples of the rationale behind investee companies ( www.indiacapitalgrowth.com ).

Life of the Company

The Listing Prospectus and Continuation Resolution published in December 2017 outlined the following undertaking:

"The Company will undertake that in 2017 (and every three years thereafter) the Board will carry out an assessment of the Company's performance (the Three-Yearly Assessment) and will thereafter propose an ordinary continuation resolution only in the event that either of the following criteria are met:

i.  The Company's monthly average market capitalisation being less on average than £30 million over the one-year period preceding the date of the relevant Three Yearly Assessment taking the market capitalisation as at the last trading day of each month; or

ii.  The Company's published diluted NAV per Ordinary Share (adjusted, if appropriate, for any dividends payable to Shareholders) underperforming the BSE Mid Cap Total Return Index by in excess of a cumulative 5 per cent. over the three-year period preceding the relevant Three Yearly Assessment."

While the Company has comfortably exceeded the average market capitalisation requirement, NAV performance relative to the BSE Mid Cap Total Return Index over the past three years has to date not met the requirement laid out in the Prospectus.  The Board will consult with Shareholders as we approach the end of the current Three Yearly Assessment period, which ends on 6 August 2020, to determine the best way forward.

Succession Planning

Details of the Board's approach to succession planning appears in the Directors' Report. As part of the Board's programme of refreshment, John Whittle will stand down from the Board and as Chairman of the Audit Committee at the end of December 2020. The Board would like to express their sincere gratitude to John for his nine years' service and will begin their search for his successor later in the year.

Outlook

The global economy is grappling with a worldwide pandemic, an oil price war, and unprecedented extreme volatility in capital markets. The situation is rapidly evolving on a daily basis and as such taking a view as to the likely near term impact on the Indian economy is a challenging task.  The Mumbai based Investment Management team is in regular touch with the companies in which your Company is invested, monitoring corporate developments closely. They are hopeful that, when concerns about COVID19 are allayed, Indian equities will be able to recover and that businesses will return to growth.

Your Company's investment objective is to provide long-term capital appreciation by investing in companies based in India.  The Board is hopeful that key reforms introduced in Modi's first term (2014-2019) are now starting to come to fruition and that investors will start to see long term structural improvements from these.  The Goods & Services Tax, the newly reconfigured Insolvency & Bankruptcy Code, Demonetisation, amongst others, are all expected to improve efficiency and transparency in India's economy. These factors, combined with the overhaul of India's labour laws that is currently underway, should provide a push that helps to improve ease of doing business and attract foreign investment.  The corporate tax rate cuts, announced in September, were welcomed by Indian companies, with the reduction from 30% to 22% (and from 25% to 15% for new investment in manufacturing) making them globally competitive. As the Trade Wars between China and the US continue, India is positioned to increase its market share in some manufacturing industries.

Finally, India is in the midst of moving from a patronage based to rules-based system. Whilst the transition period may result in short-term setbacks, the long-term impact of this change will be to improve governance and, in turn, to open up new opportunities for investment in India.  Despite the recent setbacks in performance, your Board believes that India Capital Growth Fund is well positioned to deliver returns to shareholders as these changes take effect.  We thank shareholders for their patience and believe that changes being implemented by the manager will deliver improved relative performance.

Elisabeth Scott

Chairman

19 March 2020

INVESTMENT POLICY

The Company's investment objective is to provide long-term capital appreciation by investing in companies based in India. The investment policy permits the Company 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 equity securities or equity linked securities, the Company has the flexibility to invest in bonds (including non-investment grade bonds), convertibles and other types of securities. The Company may, for the purposes of hedging and investing, use derivative instruments such as financial futures, options and warrants. The Company 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 Company at the time of the drawdown. It is the Company's current policy not to hedge the exposure to the Indian Rupee.

The portfolio concentration ranges between 30 and 40 stocks; however, to the extent the Company grows, the number of stocks held may increase over time. The Company is subject to the following investment limitations: No more than 10% of Total Assets may be invested in the securities of any one Issuer or invested in listed closed-ended funds.

INVESTMENT MANAGER'S REPORT

This was a disappointing year for investors in the India Capital Growth Fund. Over twelve months the share price fell by 19% driven by an 8% fall in the NAV in Indian Rupees which was in turn compounded by a 6% depreciation in the currency against the Pound Sterling. As such the NAV fell by 13% which led to a 6% underperformance relative to the BSE Mid Cap Total Return Index over the same period which fell by 7% in Pound Sterling.

The portfolio analysis later in this report examines this underperformance but in summary the main cause was a more pronounced combination of lower than expected aggregate portfolio profitability and a de-rating in the valuation of the majority of the holdings. Additionally, stock specific issues have caused a permanent loss of capital value that should not be repeated.

Macro-Environment

Before delving into portfolio performance and characteristics, it is important to highlight the deterioration of the macro environment over the year and the consequent impact on corporate and investor sentiment:

§ A liquidity squeeze in the non-banking financial system following the default of IL&FS - an AAA-rated quasi-Government owned lending institution - in September 2018 (discussed at length in 2018's Annual Report and in 2019's interim report), the aftershock of which is still being felt. 

§ Excess capacity in the private sector and a fiscally constrained Government leading to anaemic investment growth in the economy. Consumption had become the core contributor to GDP, which has now in turn slowed sharply. 

§ Muted lending from Public sector banks (65% of the market) during an extended period of stressed assets and balance sheet repair, leaving the economy capital constrained, and forcing companies to pare back on growth. 

§ Consistent, year-on-year downgrades to earnings expectations, as economic growth has slowed. 

§ A poorly received inaugural Union Budget from the new BJP Government that required major U-turns in policy in order to address the market's disappointment. 

§ Businesses which are continuing to adapt to a new operating environment. For example: new currency notes in circulation (Demonetisation), the Goods & Services Tax (a nationwide VAT), the Real Estate Regulation Act, the Insolvency and Bankruptcy Code, and stricter emissions standards for the auto sector (45% of India's manufacturing) as examples.

This combination of structural reform, a default of a major financial institution, and ongoing balance sheet repair in the banking system drove a collapse in market confidence. Capital availability became scarce being restricted to only those which didn't require it, as evidenced in Chart 1. Companies sector wide, and in particular smaller domestic facing names, were forced to limit their ambitions. Consumption growth slowed abruptly, as did trade, the latter being affected by disruptions to the global economy. Even businesses with strong order books put a foot on the brake amid concerns that the environment was not right to "push sales". A fear of counterparty risk ensured that liquidity and working capital management took priority. As such GDP growth fell from 8.2% in 2017 to (an estimated) 4.7% for the current financial year (FY20), ending on 31 March.

The portfolio

Four holdings worked well for the portfolio over the year. Both Berger Paints (manufacturer of paint, which rose 57%) and PI Industries (agrochemicals which rose 68%) delivered healthy earnings growth in 2019 leading to a sharp rerating in those stocks. Other outperformers were NIIT Technologies (IT Services, up 18%) and Essel Propack (consumer packaging, which rose 30%). Private equity funds bid handsome premia to the market price for part ownership of these companies and in both cases the Company's stock holding was tendered. The portfolio exited NIIT Technologies completely but post the tender, a decision was made to buy back a part of the holding in Essel Propack at compelling valuations.

Turning to the contributors to poor performance, the fall in the Company's Net Asset Value (NAV) can be attributed to two interlinked drivers; first from a de-rating in aggregate value of the portfolio and second from a deceleration in earnings growth. The causes of these two drivers can in turn be placed into two distinct camps; companies whose stock price de-rating (from lower earnings) is a temporary phenomenon that creates a potential buying opportunity and second where there are structural concerns that have resulted in a permanent loss of capital.

Temporary disruption

From a top down context, the broader economic slowdown and heightened risk aversion that was summarised earlier led to a substantial divergence between the top ten stocks (by market capitalisation) and the rest of the market. This is a trend seen across global markets but somewhat accentuated by events specific to India.

Due to the portfolio's exposure to the lower capitalised area of the market, which by default is more sensitive and vulnerable to disruptions in the domestic economy, this divergence was keenly felt, but in valuation terms the portfolio now appears as cheap as it has been since 2013 at the time of the "taper tantrum", and an upward correction is expected as the market "bottoms out" and the first signs of confidence (and thus liquidity) return to customary levels.

However, the de-rating cannot solely be attributed to a broader stock market divergence. The slowdown of earnings growth across the portfolio also played its part. In particular, the portfolio's exposure to consumer businesses (28% of portfolio) and private sector banks (25% of portfolio). Both sectors have traditionally been steady earnings compounders, and this will revert in due course. The consumer businesses have been hit by a sharp slowdown in spending particularly from rural communities, where historically growth rates have been two times their urban counterparts but slipped to just half that in 2019. The private sector banking stocks were affected by asset quality issues (as economic growth slowed) and were obliged to provision accordingly at the expense of shareholder returns. The portfolio's exposure to the auto-ancillary sector (Motherson Sumi Systems, Exide Industries, Ramkrishna Forgings totalling 12% of portfolio) have suffered both due to slower demand in the auto sector (both global and domestic) as well as the ongoing disruption caused by the US tariff war.

Two companies in the portfolio hit the spotlight for governance related issues. Both Emami (consumer discretionary) and Jain Irrigation (micro irrigation) saw persistent stock price pressure resulting from major shareholders pledging stock as collateral for investments unrelated to the core business. In Emami's case the business generates strong cash flow and these pledges have now been reduced, and this combination of stable cash flow, proactive governance changes and weak stock price performance provided an opportunity to top up. In addition, the family has already initiated the process of selling other assets in order to release the equity collateral further, which in turn has lifted pressure from the stock price.

Structural issues

In the case of Jain Irrigation (NAV loss of 1%) the combination of pledged collateral and elevated working capital costs increased the risk reward ratio beyond comfort and the position was sold. In the public sector banking space both Indian Bank and Jammu & Kashmir Bank (-1.0% and -0.6% contribution to portfolio returns respectively) were impacted by unforeseen regulatory events. Indian Bank was among the best performing public sector banks, being one of the few that did not seek capital infusion from the Government. This ultimately proved its undoing, being merged with a weaker entity, as the resultant combined entity's balance sheet was weaker than the standalone. Likewise, the portfolio's exposure to Jammu & Kashmir Bank, whilst fundamentally a strong franchise, was impacted by the recent Government actions in Kashmir, removing visibility on its future outlook and leading to a gradual reduction in exposure. The portfolio's NAV suffered from a rump holding in Dewan Housing, a mortgage finance company which was directly impacted by the default of IL&FS in September of last year. The portfolio had benefitted significantly from the appreciation of this stock price over the time it was held, and although it fell precipitously from the highs, the final position was sold at approximately cost price.  We also erred in our call on Yes Bank (-2.1% contribution to portfolio). Following the change in management and a revamp of the board of directors, it was expected that the strong franchise (given its leadership in digital transactions and a strong customer franchise) would prevail. However prolonged delays in raising capital has diminished the risk reward equation sufficiently for us to decide to reduce the weighting.

Following the tender of the Company's stock in both NIIT Technologies and Essel Propack, as well as trimming weights in other areas of the portfolio, the portfolio's cash weighting reached a high of 13% in August. On the back of poor sentiment in small and midcap stocks and weakness across the broader market, this cash position was gradually put to the last quarter of the year. A 5% position has been built in DCB Bank. This is a mid-sized private sector bank, that has the Aga Khan Foundation as its largest shareholder (14%), that focuses on lending to small and medium sized enterprises across the country. Asset quality standards have been maintained through the recent banking crisis due to its "best in class" risk management systems and is attractively valued relative to its peer group.  Temporary weakness in the share price of Bajaj Consumer Care (BCC), as a result of majority shareholders using stock as pledging collateral, enabled the portfolio to build a 4% position weight. BCC is the market leader in the hair oil segment which enjoys high gross margins, high returns on capital employed with a dividend yield of 4%. The market volatility provided an opportunity to invest at a significant discount to the company's historic valuation and based on some conservative assumptions it has significant upside potential. As at the end of December, the cash weighting has been reduced to 5% of the portfolio.

The Government is listening to the feedback from corporate India and is responding to the short-term challenges brought about by its reform initiatives. Spending on infrastructure has been accelerated alongside incentives to generate private sector investment spending, as well as addressing individual "sectoral" issues. Most encouraging was the progressive cuts to corporate taxes now making India better able to compete for Foreign Direct Investment alongside its Asian peer group. Indirect tax rates have been cut across many sectors, public sector banks have been recapitalised and the flagging real estate sector has been given a major boost. Moreover, the Reserve Bank of India has cut lending rates to 5.15%, their lowest level since 2010. Transmission into the real economy is slow but the trend is favourable.

Looking ahead

The Company's NAV, and correspondingly its share price, have fallen 28% and 50% respectively since the year-end, and in particular since the coronavirus pandemic outbreak, which has caused unprecedented falls in global and Indian markets. However we continue to assess business fundamentals in India, relative to the prices on offer in the equity markets, on an ongoing basis and expect the Indian economy to recover when this period of significant uncertainty eventually passes.

O cean Dial Asset Management

19 March 2020

TOP 20 PORTFOLIO INVESTMENTS

	Holding	Market cap size	Sector	Value £000		% of Company NAV
	Federal Bank	M	Financials	7,046		7.1%
	City Union Bank	M	Financials	5,698		5.7%
	Berger Paints India	L	Materials	5,405		5.4%
	PI Industries	M	Materials	4,877		4.9%
	Bajaj Consumer Care	S	Consumer Discretionary	4,546		4.6%
	Tech Mahindra	L	IT	4,444		4.5%
	Motherson Sumi Systems	M	Consumer Discretionary	4,012		4.0%
	Jyothy Laboratories	S	Consumer Staples	3,892		3.9%
	Divi's Laboratories	M	Healthcare	3,554		3.6%
	Emami	S	Consumer Staples	3,481		3.5%
	IDFC Bank	M	Financials	3,357		3.4%
	Balkrishna Industries	M	Consumer Discretionary	3,179		3.2%
	Indusind Bank	L	Financials	3,069		3.1%
	Finolex Cables	S	Industrials	2,858		2.9%
	Kajaria Ceramics	S	Industrials	2,809		2.8%
	Welspun India	S	Consumer Discretionary	2,765		2.8%
	Radico Khaitan	S	Consumer Staples	2,754		2.8%
	Ramkrishna Forgings	S	Materials	2,694		2.7%
	The Ramco Cements	M	Materials	2,583		2.6%
	Exide Industries	M	Consumer Discretionary	2,425		2.4%
				75,448		75.90%

PRINCIPAL GROUP INVESTMENTS

AS AT 31 DECEMBER 2019

Holding	Market cap size	Nominal			Value £000					% of Company NAV
Listed securities
Consumer discretionary
Bajaj Consumer Care	S	1,800,000			4,546					4.6%
Balkrishna Industries	M	300,000			3,179					3.2%
Exide Industries	M	1,215,336			2,425					2.4%
Motherson Sumi Systems	M	2,558,999			4,012					4.0%
Welspun India	S	5,384,105			2,765					2.8%
					16,927					17.0%
Consumer staples
Emami	S	1,050,000			3,481					3.5%
Jyothy Laboratories	S	2,475,000			3,892					3.9%
Manpasand Beverages	S	1,722,085			217					0.2%
Radico Khaitan	S	821,236			2,754					2.8%
					10,344					10.4%
Financials
City Union Bank	M	2,277,000			5,698					5.7%
DCB Bank	S	1,600,000			2,942					3.0%
Federal Bank	M	7,488,862			7,046					7.1%
IDFC Bank	M	6,950,000			3,357					3.4%
Indusind Bank	L	190,000			3,069					3.1%
Jammu & Kashmir Bank	S	4,249,504			1,357					1.4%
Yes Bank	S	2,000,000			1,004					1.0%
					24,473					24.7%
Healthcare
Aurobindo Pharma	M	420,000			2,053					2.1%
Divi's Laboratories	M	180,000			3,554					3.6%
Neuland Laboratories	S	250,000			1,118					1.1%
					6,725					6.8%
Industrials
Finolex Cables	S	720,000			2,858					2.9%
Kajaria Ceramics	S	500,000			2,809					2.8%
PSP Projects	S	373,875			1,972					2.0%
Skipper	S	2,654,310			1,455					1.4%
					9,094					9.1%
IT
BLS International Services	S	1,000,000			708						0.6%
Tech Mahindra	L	545,000			4,444						4.5%
					5,152						5.1%
Materials
Berger Paints India	L	980,000			5,405						5.4%
Essel Propack	S	735,075			1,393						1.4%
JK Lakshmi Cement	S	880,207			2,636						2.6%
PI Industries	M	315,320			4,877						4.9%
Ramkrishna Forgings	S	661,230			2,694						2.7%
Sagar Cements	S	365,000			2,093						2.1%
The Ramco Cements	M	320,000			2,583						2.6%
					21,681						21.7%
Real Estate
Arihant Foundations & Housing	S	592,400			126						0.1%
					126						0.1%
Total equity investments						94,522				94.9%
Cash less other net current liabilities						5,040				5.1%
Total Net Assets						99,562				100.0%
Notes:-
Large cap (L) - companies with a market capitalisation above US$7bn									12.9%
Mid cap (M) - companies with a market capitalisation between US$2bn and US$7bn									39.0%
Small cap (S) - companies with a market capitalisation below US$2bn									43.0%
									94.9%

AUDITED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2019

			2019	2018
	Revenue £000	Capital £000	Total £000	Total £000
Income
Net loss on financial assets at fair value through profit or loss	-	(14,220)	(14,220)	(27,989)
Total income	-	(14,220)	(14,220)	(27,989)
Expenses
Operating expenses	(431)	-	(431)	(422)
LSE Main Board listing expense	-	-	-	(155)
Foreign exchange loss	(129)	-	(129)	(1)
Investment management fees	(13)	-	(13)	-
Transaction costs	(9)	-	(9)	-
Total expenses	(582)	-	(582)	(578)
Loss for the year before taxation	(582)	(14,220)	(14,802)	(28,567)
Taxation	-	-	-	-
Total comprehensive loss for the year	(582)	(14,220)	(14,802)	(28,567)
Loss per Ordinary Share (pence)			(13.16)	(25.39)
Fully diluted loss per Ordinary Share (pence)			(13.16)	(25.39)

The total column of this statement represents the Company's statement of comprehensive income, prepared in accordance with IFRS as adopted by the EU. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies, as disclosed in the Basis of Preparation.

The profit after tax is the "total comprehensive income" as defined by IAS 1. There is no other comprehensive income as defined by IFRS and all the items in the above statement derive from continuing operations.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED 31 DECEMBER 2019

		2019		2018
		£000		£000
Non-current assets
Financial assets designated at fair value through profit or loss		95,887		114,357
Current assets
Cash and cash equivalents		3,716		13
Other receivables and prepayments		153		206
		3,869		219
Current liabilities
Payables and accruals		(194)		(212)
Net current assets		3,675		7
Net assets		99,562		114,364
Equity
Ordinary share capital		1,125		1,125
Reserves		98,437		113,239
Total equity		99,562		114,364
Number of Ordinary Shares in issue		112,502,173		112,502,173
Net Asset Value per Ordinary Share (pence) - Undiluted and diluted		88.50		101.57

AUDITED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2019

		Share Capital £000	Capital Reserve £000	Revenue Reserve £000	Other Distributable Reserve £000	Total  £000
Balance as at 1 January 2019		1,125	28,413	(10,524)	95,350	114,364
Loss on investments		-	(14,220)	-	-	(14,220)
Revenue loss for the year after taxation		-	-	-	(582)	(582)
Balance as at 31 December 2019		1,125	14,193	(10,524)	94,768	99,562

For the year ended 31 December 2018

		Share Capital £000	Capital Reserve £000	Revenue Reserve £000	Other Distributable Reserve £000	Total  £000
Balance as at 1 January 2018		1,125	56,402	(9,946)	95,350	142,931
Gain on investments		-	(27,989)	-	-	(27,989)
Revenue loss for the year after taxation		-	-	-	(578)	-
Balance as at 31 December 2018		1,125	28,413	(10,524)	95,350	114,364

AUDITED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2019

		2019		2018
		£000		£000
Cash flows from operating activities
Operating loss		(14,802)		(28,567)
Adjustment for:
Net loss on financial asset at fair value through profit or loss		14,220		27,989
Foreign exchange losses		129		1
Decrease/(increase) in receivables		53		(17)
Decrease in payables		(18)		(253)
Net cash flows used in operating activities		(418)		(847)
Cash flows from investing activities
Acquisition of investments		(3,650)		-
Partial redemption of investment in ICG Q Limited		7,900		785
Net cash flows generated from investing activities		4,250		785
Net increase/(decrease) in cash and cash equivalents during the year		3,832		(62)
Cash and cash equivalents at the start of the year		13		76
Foreign exchange losses		(129)		(1)
Cash and cash equivalents at the end of the year		3,716		13

ACCOUNTING POLICIES

Basis of accounting

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and interpretations adopted by the International Accounting Standards Board (IASB).

Basis of preparation

The financial statements for the year ended 31 December 2019 have been prepared under the historical cost convention adjusted to take account of the revaluation of the Company's investments to fair value. Where presentational guidance set out in the Statement of Recommended Practice (SORP) for Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies (AIC) in November 2014, and subsequently revised in November 2019, is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP. In particular, supplementary information which analyses the statement of comprehensive income between items of a revenue and capital nature has been presented alongside the statement of comprehensive income.

Going concern

Given the Company's relative performance, in particular over the last 12 months, as discussed in the Chairman's Statement, the Directors may be required to propose a continuation ordinary resolution at the Company's Annual General Meeting scheduled for September 2020, which if not passed by simple majority, would put the future of the Company at risk. The Directors are considering options to present to shareholders. Due to the above, there is a material uncertainty which may cast significant doubt as to the company's ability to continue as a going concern. Notwithstanding the uncertainty over the continuation of the Company, the Directors are satisfied that the Company has sufficient resources to continue in business

for the foreseeable future therefore the financial statements have been prepared on a going concern basis.

Impact of IFRS 10 'Consolidated Financial Statements'

As set out under IFRS 10, a parent entity that qualifies as an investment entity should not consolidate its subsidiaries. The Company meets all the following criteria to qualify as an investment entity:-

i.  Obtaining funds from one or more investors for the purpose of providing those investors with investment management services - the Board of Directors of the Company has delegated this function to its investment manager, Ocean Dial Asset Management Limited;

ii.  Commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both - funds are invested in ICG Q Limited for the sole purpose of achieving capital appreciation via further placements in Indian listed securities; and

iii.  Measures and evaluates the performance of substantially all of its investments on a fair value basis - on a monthly basis, the Company's investment in ICG Q Limited is revalued at the prevailing Net Asset Value ("NAV") at the corresponding valuation date.

The IFRS 10 Investment Entity Exemption requires investment entities to fair value all subsidiaries that are themselves investment entities. As the subsidiary meets the criteria of an investment entity, it has not been consolidated.

On the basis of the above, these financial statements represent the stand-alone figures of the Company.

Expenses

Expenses are accounted for on an accruals basis. Other expenses, including management fees and transaction costs, are allocated to the revenue column of the statement of profit or loss and other comprehensive income.

Taxation

Full provision is made in the statement of profit or loss and other comprehensive income at the relevant rate for any taxation payable in respect of the results for the year.

Investments

The Company's investments are designated at fair value through profit or loss ("FVPL") at the time of acquisition. It is initially recognised at fair value, being the cost incurred at acquisition. Transaction costs are expensed in the statement of comprehensive income. Gains and losses arising from changes in fair value are presented in the statement of comprehensive income in the period in which they arise.

The investment is designated at fair value through profit or loss at inception because it is managed and its performance evaluated on a fair value basis in accordance with the Company's investment strategy as documented in the Prospectus and information thereon is evaluated by the management of the Company on a fair value basis.

The basis of the fair value of the investment in the underlying subsidiary, ICG Q Limited, is its Net Asset Value. ICG Q Limited's investments are designated at fair value through profit and loss.

Purchases and sales are recognised on the trade date - the date on which the Company commits to purchase or sell the investment.

The financial asset is derecognised when the rights to receive cash flows from the investment have expired or the Company has transferred substantially all risks and rewards of ownership

Impairment of financial assets

The Company has chosen to apply the simplified approach for expected credit losses ("ECL") under IFRS 9. Therefore, the Company does not track changes in credit risk, but instead, recognises a loss allowance based on lifetime ECLs at each reporting date. The Company's approach to ECLs reflects a probability-weighted outcome, the time value of money and reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The Company uses the provision matrix as a practical expedient to measuring ECLs on trade receivables, based on days past due for groupings of receivables with similar loss patterns. Receivables are grouped based on their nature. The provision matrix is based on historical observed loss rates over the expected life of the receivables and is adjusted for forward-looking estimates.

Receivables and Payables

Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate method ("EIR"), less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in profit or loss. The losses arising from impairment are recognised in profit or loss.

Other financial liabilities include all financial liabilities, other than those classified as at FVPL. The Company includes in this category short-term payables.

Foreign currency translation

The Company's shares are denominated in Sterling and the majority of its expenses are incurred in Sterling. Accordingly, the Board has determined that the functional currency is Sterling. Sterling is also the presentational currency of the financial statements.

Monetary foreign currency assets and liabilities are translated into Sterling at the rate of exchange ruling at the statement of financial position date. Investment transactions and income and expenditure items are translated at the rate of exchange ruling at the date of the transactions. Gains and losses on foreign exchange are included in the statement of comprehensive income.

Cash and cash equivalents

Cash comprises of Bank current accounts. Cash equivalents are short-term highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant changes in value.

Share capital

The share capital of the Company comprises Ordinary Shares which have all the features and have met all the conditions for classification as equity instruments under IAS 32 (amended) and have been classified as such in the financial statements.

Standards, interpretations and amendments to published statements effective but not material

to the financial statements

The following standards and amendments have been issued and are mandatory for accounting periods beginning on or after 1 January 2019 but are not relevant or have no material effect on the Company's operations or financial statements:

· IFRS 16 Leases

· IFRIC 23 Uncertainty over Income Tax Treatments

· Prepayment Features with negative compensation (Amendments to IFRS 9)

· Annual Improvements to IFRSs 2015-2017 Cycle

Other standards in issue, but not yet effective, are not expected to have a material effect on the financial statements of the Company in future periods and have not been disclosed.

SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

IFRS require management to make judgements, estimates and assumptions that affect the application of policies and the reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about the carrying value of assets and liabilities that are not readily apparent from other sources. The Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equate to the related actual results.

a)  Critical accounting estimate: Financial asset designated at fair value through profit or loss The main use of accounting estimates and assumptions occurs in the calculation of the sensitivity analysis in note 11. In relation to the valuation of the unlisted investment, actual results may differ from the estimates. It is management's judgement that the Net Asset Value of ICG Q Limited is an appropriate proxy for fair value as the Company can control the sale of the subsidiary's investments which are all listed on stock exchanges in India and therefore are mostly regarded as highly liquid.

b)  Significant judgment: consolidation of entities

The Company, under the investment entity exemption rule, holds its investments at fair value

The Company meets the definition of an investment entity per IFRS 10 as detailed in note 1.

Operating expenses

					2019		2018
					£000		£000
Administration and secretarial fees					43		48
Audit fees					30		29
Broker fee					31		26
D&O insurance					6		5
Directors' fees					88		88
General expenses					84		55
Marketing expenses					111		110
Other professional fees					12		36
Registrar fee					6		6
Regulatory fees					20		19
					431		422

Loss per share

Loss per Ordinary Share and the fully diluted loss per share are calculated on the loss for the year of £14,802,000 (2018: £28,567,000) divided by the weighted average number of Ordinary Shares of 112,502,173 (2018: 112,502,173).

Financial asset designated at fair value through profit or loss

Financial assets at fair value through profit or loss comprise of investments in securities listed on Indian stock markets, namely the National Stock Exchange or the Bombay Stock Exchange, as well as investment in the wholly-owned subsidiary, ICG Q Limited. A summary of movements is as follows:

				2019		2018
				£000		£000
Fair value at beginning of year				114,357		143,131
Reduction in share capital				(7,900)		(785)
Acquisition of investments				3,650		-
Realised gain on share capital reduction				4,683		328
Unrealised (loss)/gain on revaluation				(18,903)		(28,525)
Fair value at end of year				95,887		114,357

Financial asset designated at fair value through profit or loss ("continued")

The net realised and unrealised losses totalling £14,220,000 (2018: £27,989,000) on financial assets at fair value through profit and loss comprise of losses on the Company's holding in ICG Q Limited to the extent of £14,264,000 (2018: £27,989,000) and gains of £44,000 arising from investments in securities listed on Indian stock markets. The movement arising from the Company's holding in ICG Q Limited is driven by the following amounts within the financial statements of ICG Q Limited, as set out below.

	2019		2018
	£000		£000
Dividend income	783		758
Other income	-		15
Unrealised loss on financial assets at fair value through profit and loss	(17,969)		(34,451)
Foreign exchange loss	(3)		-
Realised gain on disposal of investments	4,585		7,659
Investment management fees	(1,459)		(1,815)
Other operating expenses	(69)		(71)
Taxes	(38)		(19)
Transaction costs	(94)		(65)
Net loss of ICG Q Limited	(14,264)		(27,989)

The equity investment represents ICG Q Limited, the Company's wholly owned subsidiary. ICG Q Limited is incorporated and has its principal place of business in the Republic of Mauritius. The Company holds Participating Shares in ICG Q Limited, which confer voting rights to the Company, hence controlling interests.

Taxation

Guernsey

India Capital Growth Fund Limited is exempt from taxation in Guernsey on non-Guernsey sourced income. The Company is exempt under The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 (as amended) and paid the annual exemption fee of £1,200.

For the year ended 31 December 2019, the Company had a tax liability of £nil (2018: £nil).

Segmental information

The Board has considered the provisions of IFRS 8 in relation to segmental reporting and concluded that the Company's activities form two segments under the standard. From a geographical perspective, the Company's activities are focused in two areas - Mauritius and India. The subsidiary, ICG Q Limited, focuses its investment activities in listed securities in India. Additional disclosures have been provided in note 9 to disclose the underlying information.

Share capital

Authorised Share Capital

Unlimited number of Ordinary Shares of £0.01 each

Issued Share Capital							Number of shares				Share capital
											£000
Ordinary Shares of £0.01 each
At 31 December 2019							112,502,173				1,125
At 31 December 2018							112,502,173				1,125

Fair value of financial instruments

The following tables show via financial instruments recognised at fair value, analysed between those whose fair value is based on:

· Quoted prices in active markets for identical assets or liabilities (Level 1);

· Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and

· Those with inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

The analysis as at 31 December 2019 is as follows:

	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
	£000		£000		£000		£000
Listed securities	3,694		-		-		3,694
Unlisted securities	-		92,193		-		92,193
Total	3,694		92,193		-		95,887

The analysis as at 31 December 2018 is as follows:

	LEVEL 1		LEVEL 2		LEVEL 3		TOTAL
	£000		£000		£000		£000
Listed securities	-		-		-		-
Unlisted securities	-		114,357		-		114,357
Total	-		114,357		-		114,357

The Company's investment in ICG Q Limited, the Company's wholly owned subsidiary is priced based on the subsidiary's net asset value as calculated as at the reporting date. The Company has the ability to redeem its investment in ICG Q Limited at the net asset value at the measurement date therefore this is categorised as level 2. The classification within the hierarchy does not necessarily correspond to the Investment Manager's perceived risk of the investment, nor the level of the investments held within the subsidiary. All the underlying investments of ICG Q Limited are categorised as level 1 at 31 December 2019 and 2018. The year-end fair value of those investments, together with cash held in ICG Q Limited, comprise all but an insignificant proportion of the net asset value of the subsidiary.

Financial instruments and risk profile

The primary objective of India Capital Growth Fund Limited is to provide long-term capital appreciation by investing predominantly in companies based in India directly and through its subsidiary. The investment policy permits making investments in a range of equity and equity linked securities of such companies. ICG Q Limited's portfolio of investments is predominantly in listed mid cap and small cap Indian companies and did not hold any unlisted securities during the year ended 31 December 2019. While the principal focus is on investments in listed equity securities or equity-linked securities, ICG Q Limited has the flexibility to invest in bonds, convertibles and other type of securities.

The specific risks arising from the Company's exposure to these instruments and the Investment Manager's

policies for managing these risks, which have been applied throughout the year, are summarised below:

Capital management

The Company is a closed-ended investment company and thus has a fixed capital for investment. It has no

legal capital regulatory requirement. The Board has the power to purchase shares for cancellation thus reducing capital and the Board considers on a regular basis whether it is appropriate to exercise such powers. In the year ended 31 December 2019, the Board determined that it was inappropriate to exercise such powers, although continuation of these powers will be sought at the Annual General Meeting.

The Board also considers from time to time whether it may be appropriate to raise new capital by a further issue of shares. The raising of new capital would, however, be dependent on there being genuine market demand.

The Company directly holds 4 listed equity instruments, as well as an investment in ICG Q Limited, which holds an underlying portfolio of 32 listed equity instruments based in India. Below is an assessment of the various risks the Company may be exposed to via ICG Q Limited and its direct investments in listed equity instruments.

Market Risk

Market price risk arises mainly from the uncertainty about future prices of the investments in listed equity instruments and financial instruments held by ICG Q Limited. It represents the potential loss the Company and ICG Q Limited may suffer through holding market positions in the face of price movements.

The Company and ICG Q Limited's investment portfolios are exposed to market price fluctuations which are monitored by the Investment Manager in pursuance of the investment objectives and policies and in adherence to the investment guidelines and the investment and borrowing powers set out in the Admission Document. ICG Q Limited's investment portfolio is concentrated and, as at 31 December 2019, comprised investment in 32 companies. ICG Q Limited thus has higher exposure to market risk in relation to individual stocks than more broadly spread portfolios.

ICG Q Limited's portfolio consists predominantly of mid cap and small cap listed Indian securities, and thus the effect of market movements is not closely correlated with the principal market index, the BSE Sensex. The BSE Mid Cap Total Return Index provides a better (but not ideal) indicator of the effect of market price risk on the portfolio. Assuming perfect correlation the sensitivity of the Company and ICG Q Limited to market price risk can be approximated by applying the percentage of funds invested (2019: 94.94%; 2018: 92.80%) to any movement in the BSE Mid Cap Total Return Index. At 31 December 2019, with all other variables held constant, this approximation would produce a movement in the net assets of the Company and ICG Q Limited of £18,904,000 (2018: £10,613,000) for a 20% (2018: 10%) movement in the index which would impact the Company via a fair value movement of the same magnitude in its holding in ICG Q Limited.

Foreign currency risk

Foreign currency arises mainly from the fair value or future cash flows of the financial instruments held by the Company and ICG Q Limited fluctuating because of changes in foreign exchange rates. ICG Q Limited's portfolio comprises of predominantly Rupee denominated investments but reporting, and in particular the reported Net Asset Value, is denominated in Sterling. Any appreciation or depreciation in the Rupee would have an impact on the performance of the Company. The underlying currency risk in relation to ICG Q Limited's investments is the Rupee. ICG Q Limited's policy is not to hedge the Rupee exposure.

ICG Q Limited may enter into currency hedging transactions but appropriate mechanisms on acceptable terms are not expected to be readily available.

At 31 December 2019, if the Indian Rupee had strengthened or weakened by 10% (2018: 10%) against Sterling with all other variables held constant, pre-tax profit for the year would have been £9,923,000 (2018: £11,439,000) higher or lower, respectively, mainly as a result of foreign exchange gains or losses on translation of Indian Rupee denominated financial assets designated at fair value through profit or loss in ICG Q Limited and the consequent impact on the fair value of the Company's investment in ICG Q Limited.

Credit risk

Credit risk arises mainly from an issuer or counterparty being unable to meet a commitment that it has entered into with ICG Q Limited and the Company. Credit risk in relation to securities transactions awaiting settlement is managed through the rules and procedures of the relevant stock exchanges. In particular settlements for transactions in listed securities are effected by the custodian on a delivery against payment or receipt against payment basis. Transactions in unlisted securities are effected against binding subscription agreements.

The principal credit risks for the Company are in relation to cash held by the custodian. Kotak Mahindra Bank Limited ("Kotak") acts as the custodian to the Company and has a credit rating of AAA, as provided by CRISIL. The aggregate exposure to Kotak at 31 December 2019 was £5,182,000 (2018: £8,388,000).

Kotak acted as custodian of the Group's assets during the period. The securities held by Kotak as custodian are held in trust and are registered in the name of ICG Q Limited.

Interest rate risk

Interest rate risk represents the uncertainty of investment return due to changes in the market rates of interest. The direct effect of movements in interest rates is not material as any surplus cash is predominantly in Indian Rupees, and foreign investors are not permitted to earn interest on Rupee balances.

Liquidity risk

Liquidity risk arises mainly from the Company and ICG Q Limited encountering difficulty in realising assets or otherwise raising funds to meet financial commitments. As the trading volume on the Indian stock markets is lower than that of more developed stock exchanges the Group may be invested in relatively illiquid securities. ICG Q Limited has no unlisted securities. ICG Q Limited's focus is to invest predominantly in mid and small cap listed stocks. As noted in the Investment Manager's Report, minimum liquidity criteria are utilised for new purchases. However there remain holdings where there is relatively little market liquidity, which may take time to realise. The Directors do not believe that the market is inactive enough to warrant a discount for liquidity risk on ICG Q Limited's investments.

The Company and ICG Q Limited seek to maintain sufficient cash to meet its working capital requirements.

The Directors do not believe it to be appropriate to adjust the fair value of the Company's investment in ICG Q Limited for liquidity risk, as it has the ability to effect a disposal of any investment in ICG Q Limited's portfolio at the prevailing market price and the distribution of proceeds back to the Company should it so wish.

All liabilities are current and due on demand.

Taxation risk

Taxation risk arises mainly from the taxation of income and capital gains of ICG Q Limited and the Company

increasing as a result of changes in the tax regulations and practice in Guernsey, Mauritius and India. ICG Q Limited is registered with the Securities and Exchange Board of India ("SEBI") as a foreign portfolio investor ("FPI") with a Category II licence, holds a Category 1 Global Business Licence in Mauritius and has obtained a Mauritian Tax Residence Certificate ("TRC") which have been factors in determining its resident status under the India-Mauritius Double Taxation Avoidance Agreement ("DTAA") and General Anti Avoidance Rules ("GAAR") under the Income Tax Act 1961 ("ITA").

However, with effect from April 2017, the DTAA was amended such that the advantages of investing in India via Mauritius were removed and capital gains arising from investments in Indian companies are subject to Indian Capital Gains Tax regulations. Consequently, tax on short term capital gains (for investments held less than 12 months) of 15% and long-term capital gains (for investments held for 12 months or longer) of 10% will apply to the investment portfolio in future.

ICG Q Limited seeks to minimise the impact of these changes in the taxation rates applicable to its capital gains by maintaining its investment strategy of investing in a concentrated portfolio for long term capital appreciation. There is no capital gains tax accrual at 31 December 2019 (2018: Nil).

RELATED PARTY TRANSACTIONS AND MATERIAL CONTRACTS

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

The Directors are responsible for the determination of the investment policy and have overall responsibility for the Company's activities. Directors' fees are disclosed in the unaudited Directors' remuneration report. The Investment Manager is entitled to receive a management fee payable jointly by the Company and its subsidiaries equivalent to, effective 1 July 2019, 1.25 per cent per annum of the aggregate value of its assets less current liabilities, calculated and payable monthly in arrears. Management fee for the period from 1 January 2019 to 30 June 2019 was 1.5 per cent per annum of the Company's Total Assets, calculated and payable monthly in arrears. The Investment Manager earned £1,472,000 in management fees during the year ended 31 December 2019 (2018: £1,815,000) of which £106,000 was outstanding at 31 December 2019 (2018: £146,000).

Under the terms of the Administration Agreement, Apex Fund and Corporate Services (Guernsey) Limited is entitled to a minimum annual fee of US$41,000 or a fee of 5 basis points of the NAV of the Company, whichever is greater. The Administrator is also entitled to reimbursement of all out of pocket expenses recoverable by way of a fixed disbursement charge of US$50 per month excluding all international calls and courier. The Administrator earned £43,000 for administration and secretarial services during the year ended 31 December 2019 (2018: £48,000) of which £16,300 was outstanding at 31 December 2019 (2018: £3,300).

CONTINGENT LIABILITIES

The Directors are not aware of any contingent liabilities as at 31 December 2019 and the date of approving these financial statements.

SUBSEQUENT EVENTS

Since the financial year-end, the global economy is grappling with a worldwide pandemic, an oil price war,

and unprecedented extreme volatility in capital markets. The situation is rapidly evolving on a daily basis and as such determining the likely near term impact on the Indian economy and the Company is a challenging task. The Company's Net Asset Value and Share Price have fallen significantly since the year-end, and the discount widened. The Investment Manager continues to assess business fundamentals in India relative to the prices on offer in the Indian equity markets on an ongoing basis and expects the Indian economy to recover when this period of uncertainty passes.

 

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