Half-year Report

RNS Number : 5144P

New India Investment Trust PLC

18 November 2016

NEW INDIA INVESTMENT TRUST PLC

UNAUDITED HALF-YEARLY FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2016

FINANCIAL SUMMARY AND PERFORMANCE

Financial Summary	30 September 2016	30 September 2015	% change
Total shareholders' funds (£'000)	259,897	202,855	+ 28.1
Share price (mid-market)	380.75p	306.00p	+ 24.4
Net asset value per share	439.98p	343.41p	+ 28.1
Discount to net asset value	13.5%	10.9%
Rupee to Sterling exchange rate	86.5	99.4	+ 13.0

Performance (total return)	Six months ended	Year ended
	30 September 2016	31 March 2016
	%	%
Share price	+ 21.5	- 11.0
Net asset value	+ 21.5	- 6.1
MSCI India Index (Sterling adjusted)	+ 21.6	- 10.3

CHAIRMAN'S STATEMENT

Performance

During the six months to 30 September 2016, the Company's net asset value ("NAV") increased by 21.5% to 439.98p while the Ordinary share price also gained by 21.5% to reach 380.75p. By comparison, the benchmark MSCI India Index increased by 21.6%.

Overview

Indian equities moved higher in local currency terms over the period under review, with returns for UK investors enhanced by the pound's dramatic fall after Britain voted to leave the European Union. Investors were encouraged by the material progress made on prime minister Modi's reform agenda, as well as by a number of encouraging economic signals. India's markets proved relatively resilient in spite of an intermittently hawkish US Federal Reserve and sluggish global growth; however, renewed tensions between India and Pakistan spurred a late sell-off.

After facing criticism for the desultory pace of promised reforms, Mr Modi's efforts culminated in a number of crucial policy successes during the period under review. Chief among these was the goods and services tax ("GST") bill, which the prime minister navigated through a previously reluctant parliamentary upper house in August. While logistical challenges remain ahead of GST's nationwide roll-out, the long-term efficiencies, tax compliance and ease of doing business of a national sales tax regime are obvious. Meanwhile, the bankruptcy code, passed in May, is particularly constructive for a banking sector battling with a proliferation of non-performing loans, helping to remove obstructive bureaucracy and enable lenders to recover funds more quickly.

Elsewhere, news that the highly-respected Reserve Bank of India ("RBI") governor Raghuram Rajan would end his tenure in September raised some concerns, given his steady stewardship of the central bank and disciplined monetary policy. However, the appointment of deputy governor and former IMF economist Urjit Patel signaled it was business as usual at the RBI. The formation of a monetary policy committee ("MPC") was another welcome development, promising increased transparency and more collegial decision-making, while reinforcing the central bank's independence from political interference. The MPC, chaired by governor Patel, took markets by surprise with a 25 basis point interest rate cut at its first meeting, taking rates to 6.5%.

On the economic front, India remained in reasonable shape, particularly when compared to many of its peers. Inflation has almost halved over the past two years, the credit for which must be shared between the RBI's inflation-targeting, plummeting oil prices, and favourable weather, as food prices fell on the back of decent monsoons. India is not as fiscally vulnerable as it once was either, with a nearly balanced current account and narrowed trade deficit. On the other hand, structural weakness in the wider economy continued to limit progress. Manufacturing and production failed to stage a sustained recovery, while demand among both consumers and corporates was largely sluggish. Notably, lending remains subdued as banks focused on repairing their balance sheets instead.

Outlook

Short-term market volatility is likely to remain a feature in India, and almost everywhere else, over the coming months as investors grapple with a listless global economy. Sentiment is particularly vulnerable to the policy of the US Federal Reserve; an interest rate hike before year-end is still possible, following which emerging markets could suffer some reactive outflows. Domestically, India appears on a surer footing than many of its peers. The government had a particularly productive couple of quarters, making headway on crucial legislation that could measurably alter the course of the economy, albeit over the longer term. There is still much to be done of course; little progress has been made on the politically contentious yet essential reforms of both land and labour laws.

Elsewhere, consumer and corporate demand have remained stubbornly muted, but there are grounds for optimism here. A considerable hike in public-sector pay and pensions, coupled with the good monsoon, should lift both urban and rural consumption. While businesses have been reluctant to spend, credit has also been difficult as banks tighten lending amid asset quality concerns. Balance sheet repair remains a priority for them. However, increased investment requires a freer flow of capital, which central bank initiatives, such as the bankruptcy code, as well as recent rate cuts, appear at least partially designed to address.

Following the sustained period of inflows in the wake of Mr Modi's 2014 election win and the recent rise in the market, valuations have started to look expensive and not always aligned with company fundamentals. In addition, the result of the recent US Presidential election, and the possibility of an expansion of fiscal policy there, has created further market uncertainty. As such, the market's recent pause for breath was somewhat welcome. Meanwhile, the country's excellent growth potential, underpinned by solid demographic, political and economic foundations, as well as abundant world-class businesses, make it a market worth sticking with for the long haul. Any short-term volatility merely provides an opportunity for astute investors to replenish high-quality names.

Board

Further to the retirement of Professor Victor Bulmer-Thomas at the conclusion of the Annual General Meeting on 6 September 2016, I am delighted to announce the appointment of Rachel Beagles as the Company's Senior Independent Director.

Change of Company's name

The Board considers that the addition of the "Aberdeen" prefix will enhance opportunities for promotion of the Company with the aim of improving the liquidity and rating of the Company's shares over the longer term. Accordingly, the Board has decided that the Company will be renamed "Aberdeen New India Investment Trust PLC" with effect from 3 January 2017.

Hasan Askari

Chairman

17 November 2016

INTERIM BOARD REPORT

Investment Objective

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

Investment Policy

The Company primarily invests in Indian equity securities.

The investment policy has been simplified by removing references to the Company's subsidiary, New India Investment Company (Mauritius) Limited, further to the restructuring undertaken in March 2016 as explained in the Chairman's Statement in the Annual Report for the year ended 31 March 2016.

Principal Risks and Uncertainties

Management of Risk

Investment in Indian equities involves a greater degree of risk than that usually associated with investment in major securities markets. The securities which the Company owns may be considered speculative because of the higher degree of risk.

The principal risks and uncertainties associated with the Company are set out in detail on pages 8 and 9 of the Annual Report for the year ended 31 March 2016, which is published on the Company's website, and these are applicable for the remaining 6 months of the Company's financial year ended 31 March 2017 as they have been for the period under review.

The risks may be summarised under the following headings:

- Market risk

- Foreign Exchange risk

- Discount risk

- Depositary risk

- Regulatory risk

Other financial risks are detailed in note 15 to the Financial Statements in the Company's Annual Report for the year ended 31 March 2016.

Additionally, the impact on the Company of new uncertainties following the 'Leave' decision of the EU Referendum in June 2016 is difficult to assess at this stage.

Going Concern

In accordance with the Financial Reporting Council's guidance on Going Concern and Liquidity Risk, the Directors have reviewed the Company's ability to continue as a going concern. The Company's assets consist of a diverse portfolio of listed equity shares which in most circumstances are realisable within a short timescale. The Directors are mindful of the principal risks and uncertainties disclosed on pages 8 and 9 and in Note 15 to the financial statements for the year ended 31 March 2016, and have reviewed cashflow forecasts detailing revenue and liabilities; accordingly, the Directors believe that the Company has adequate financial resources to continue in operational existence for the foreseeable future and for at least 12 months from the date of this Report.

This view is also based on the assumption that the Ordinary resolution, that the Company continues as an investment trust, which will be proposed at the next AGM of the Company in September 2017, is passed by shareholders as it has been in the years since it was put in place. The Directors consult annually with major shareholders and, as at the date of approval of this Report, had no reason to believe that this assumption was incorrect.

Statement of Directors' Responsibilities

The Directors are responsible for preparing the Half-Yearly Financial Report, in accordance with applicable law and regulations. The Directors confirm that, to the best of their knowledge:

- the condensed set of Financial Statements within the Half-Yearly Financial Report has been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'; and

- the Chairman's Statement and Interim Board Report (together constituting the interim management report) include a fair review of the information required by 4.2.7R (indication of important events during the first six months of the year) and 4.2.8R (disclosure of related party transactions and changes therein) of the UKLA's Disclosure and Transparency Rules.

The Half-Yearly Financial Report for the six months ended 30 September 2016 comprises the Chairman's Statement, Interim Board Report, the Statement of Directors' Responsibilities and a condensed set of Financial Statements.

For and on behalf of the Board

Hasan Askari

Chairman

17 November 2016

INVESTMENT MANAGER'S REPORT

Overview

Indian equities rose in the six months under review, buoyed by a generous rainy season and the success of key reforms. Most significantly, the GST bill was approved, paving the way for the nationwide integration of a common sales tax that is expected to boost economic growth and investor sentiment in the long term. In addition, the country's first national bankruptcy law was enacted, providing a unified framework for timely debt recovery from insolvent companies. Global factors, including stabilising commodity prices and the US Federal Reserve's decision to delay further interest rate rises, also helped whet risk appetite. India was among the most resilient stockmarkets following the UK's unexpected decision to leave the European Union. It was only towards the period-end that stocks were roiled by tensions with Pakistan.

Reserve Bank of India governor Raghuram Rajan stepped down, with his deputy and former IMF economist Urjit Patel succeeding him in September. The Monetary Policy Committee was formed soon after. The panel surprised investors when it cut rates by 25 basis points at its first meeting, but your Manager, as with many others in the business world, believes these positive developments should stimulate growth. Economic activity exceeded forecasts, as India outpaced China with the world's fastest rate of expansion.

Corporate earnings among our holdings were fairly resilient over the six months. This was due more to margin improvements than volume growth, particularly among industrials, a sector that is still awaiting a sustained recovery. Two years of drought had previously weighed on the consumer and financial sectors, but the return of a bountiful monsoon this year raised hopes of a pick-up in rural demand.

Performance

For the six months under review, the portfolio's net asset value rose by 21.5% compared to the benchmark MSCI India Index's 21.6% gain.

Positive stock selection in health care was the biggest contributor to relative performance. This was led by Piramal Enterprises, which rallied after announcing its intention to split its core segments - financial services and pharmaceutical, into two listed companies. This is expected to unlock value and unwind the conglomerate's discount by separating its distinct and unrelated businesses. Meanwhile, Biocon's shares rose in anticipation of the company realising value from filing four new generic drugs in the US or EU within the next year.

The IT sector as a whole was weak on the back of softening demand from developed-market clients. As such, the underweight to Infosys aided relative performance. Investors were disappointed with the company's results and its forecast for the year ahead. Management attributed this to unanticipated headwinds in discretionary spending on consulting services, package implementations and slower project ramp-ups in large deals.

At the stock level, our materials holdings, such as Kansai Nerolac Paints and Grasim Industries, lifted relative performance. These companies were beneficiaries of benign raw material costs that helped boost their bottom-lines.

Among the detractors, the underweight to the consumer discretionary sector hurt performance. Not holding Maruti Suzuki and Tata Motors proved costly, as they were buoyed by expectations of an improvement in rural demand. Your Manager prefers the more resilient and less capital-intensive two-wheeler business, embodied by Hero MotoCorp.

Among industrials, power and automation equipment manufacturer ABB India detracted. Its earnings have yet to sprout green shoots and the outlook for its order-book has not improved. On a positive note, its bottom-line was boosted by lower raw material and financing costs. Elsewhere, drugmakers such as GlaxoSmithKline Pharmaceuticals were weighed down by regulatory challenges and pricing pressures in the key US market, as well as drug price controls in India.

While concerns over credit risk continued to dog state-owned financials, the State Bank of India's bad debt problem was less dire than the market anticipated, so not holding the lender detracted from performance. Your Manager continues to favour private-sector banks with healthy loan growth and good asset quality.

Portfolio Activity

Over the review period, your Manager increased the portfolio's exposure to the IT software sector by initiating a position in Cognizant Technology Solutions. Against this, Linde India was sold following a solid rally, as was Tata Power, which continued to face regulatory uncertainties and made acquisitions despite its weak balance sheet. Jammu & Kashmir Bank was divested given the deterioration in its asset quality and balance sheet. Your Manager switched partially from ICICI Bank to Kotak Mahindra Bank, which appears better-placed to gain from a domestic economic recovery. A partial switch was also made from Bharti Airtel to Bharti Infratel, which appears more poised to benefit from increased competition from new players entering the telecommunications sector. The position in Jyothy Laboratories continued to be built up, on account of its solid portfolio of household products, potential for nationwide expansion and the ability of management to follow through on its plans.

Outlook

Indian equities continue to face headwinds. A possible Fed interest rate hike before the end of the year could unsettle markets. While stabilising commodity prices have helped keep costs low, questions remain over where the oil price is headed and how that could adversely impact the nation, a net importer. Unrest and geopolitical tensions in the subcontinent could also play a role.

The ground-breaking GST victory and a slew of other reforms, including the recent demonetisation of certain Rupee bank notes, have combined with sustained macroeconomic growth to reignite hopes that Mr Modi can deliver even more. However, this has not quite filtered down to the stock level in terms of a broad-based earnings recovery, although company valuations remain relatively high. A burgeoning middle class and potential for growth in rural areas continue to offer compelling reasons for long-term investment in India. Moments of volatility provide opportunities for us to add to quality companies that can benefit the portfolio in the long term.

Investment Manager's Report continued

Aberdeen Asset Management Asia Limited

Investment Manager

17 November 2016

INVESTMENT PORTFOLIO - CONSOLIDATED

As at 30 September 2016

		Valuation	Net assets
Company	Sector	£'000	%
Housing Development Finance Corporation	Financials	22,839	8.8
Tata Consultancy Services	Information Technology	19,030	7.3
Infosys	Information Technology	17,994	6.9
ITC	Consumer Staples	13,081	5.0
Grasim Industries{A}	Materials	11,950	4.6
Piramal Enterprises	Healthcare	10,396	4.0
Kotak Mahindra Bank	Financials	10,287	4.0
Ambuja Cements{A}	Materials	9,740	3.7
Godrej Consumer Products	Consumer Staples	9,636	3.7
Hero MotoCorp	Consumer Discretionary	9,477	3.6
________________________________________________________________________________________
Top ten investments		134,430	51.6
Bosch	Consumer Discretionary	9,410	3.6
Kansai Nerolac Paints	Materials	9,127	3.5
Sun Pharmaceutical Industries	Healthcare	9,119	3.5
ICICI Bank	Financials	8,551	3.3
Hindustan Unilever	Consumer Staples	8,363	3.2
Ultratech Cement{A}	Materials	8,246	3.2
Container Corporation Of India	Industrials	7,898	3.1
HDFC Bank	Financials	7,346	2.8
Nestlé India	Consumer Staples	6,782	2.6
Lupin	Healthcare	5,937	2.3
________________________________________________________________________________________
Top twenty investments		215,209	82.7
Mphasis	Information Technology	5,266	2.0
ACC	Materials	4,356	1.7
Gruh Finance	Financials	4,325	1.7
Sanofi India	Healthcare	4,068	1.6
ABB India	Industrials	3,649	1.4
Gujarat Gas	Utilities	3,463	1.3
Castrol India	Materials	2,905	1.1
Bharti Infratel	Telecommunication Services	2,670	1.0
Biocon	Healthcare	2,590	1.0
Emami	Consumer Staples	2,586	1.0
________________________________________________________________________________________
Top thirty investments		251,087	96.5
GlaxoSmithKline Pharmaceuticals	Healthcare	2,234	0.9
Jyothy Laboratories	Consumer Staples	2,145	0.8
Bharti Airtel	Consumer Discretionary	1,796	0.7
Cognizant Technology Solutions	Information Technology	1,027	0.4
Aegis Logistics	Energy	425	0.2
________________________________________________________________________________________
Total portfolio investments		258,714	99.5
Other net current assets held in subsidiaries		923	0.4
________________________________________________________________________________________
Total investments		259,637	99.9
Net current assets		260	0.1
________________________________________________________________________________________
Net assets		259,897	100.0
________________________________________________________________________________________

{A}Comprises equity and listed or tradeable ADR and GDR holdings.

CONDENSED STATEMENT OF COMPREHENSIVE INCOME

		Six months ended			Six months ended
		30 September 2016			30 September 2015
		(unaudited)			(unaudited)
		Revenue	Capital	Total	Revenue	Capital	Total
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Total revenue	3	1,999	-	1,999	54	-	54
Gains/(losses) on investments held at fair value		-	46,025	46,025	-	(24,602)	(24,602)
Currency gains/(losses)		-	59	59	-	3	3
		_______	_______	_______	_______	_______	_______
		1,999	46,084	48,083	54	(24,599)	(24,545)
		_______	_______	_______	_______	_______	_______

Expenses
Investment management fees		(1,212)	-	(1,212)	(48)	-	(48)
Other administrative expenses		(376)	-	(376)	(260)	-	(260)
		_______	_______	_______	_______	_______	_______
Profit/(loss) before finance costs and taxation		411	46,084	46,495	(254)	(24,599)	(24,853)

Finance costs		-	-	-	-	-	-
		_______	_______	_______	_______	_______	_______
Profit/(loss) before taxation		411	46,084	46,495	(254)	(24,599)	(24,853)

Taxation	4	-	(472)	(472)	-	-	-
		_______	_______	_______	_______	_______	_______
Profit/(loss) for the period		411	45,612	46,023	(254)	(24,599)	(24,853)
		_______	_______	_______	_______	_______	_______

Return/(loss) per Ordinary share (pence)	5	0.70	77.21	77.91	(0.43)	(41.64)	(42.07)
		_______	_______	_______	_______	_______	_______

The Company does not have any income or expense that is not included in profit/(loss) for the period, and therefore the "Profit/(loss) for the period" is also the "Total comprehensive income for the period", as defined in International Accounting Standard 1 (revised).
All of the profit/(loss) and total comprehensive income is attributable to the equity holders of the parent company. There are no non-controlling interests.
The total column of this statement represents the Condensed Statement of Comprehensive Income of the Company, prepared in accordance with International Financial Reporting Standards ("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.

CONDENSED STATEMENT OF COMPREHENSIVE INCOME (Cont'd)

		Year ended
		31 March 2016
		(audited)
		Revenue	Capital	Total
	Notes	£'000	£'000	£'000
Total revenue	3	374	-	374
Gains/(losses) on investments held at fair value		-	(12,103)	(12,103)
Currency gains/(losses)		-	(1,107)	(1,107)
		_______	_______	_______
		374	(13,210)	(12,836)
		_______	_______	_______

Expenses
Investment management fees		(329)	-	(329)
Other administrative expenses		(610)	-	(610)
		_______	_______	_______
Profit/(loss) before finance costs and taxation		(565)	(13,210)	(13,775)

Finance costs		(59)	-	(59)
		_______	_______	_______
Profit/(loss) before taxation		(624)	(13,210)	(13,834)

Taxation	4	-	-	-
		_______	_______	_______
Profit/(loss) for the period		(624)	(13,210)	(13,834)
		_______	_______	_______

Return/(loss) per Ordinary share (pence)	5	(1.06)	(22.36)	(23.42)
		_______	_______	_______

CONDENSED BALANCE SHEET

		As at	As at	As at
		30 September	30 September	31 March
		2016	2015	2016
		(unaudited)	(unaudited)	(audited)
	Notes	£'000	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss		258,714	8,153	212,694
Subsidiary held at fair value through profit or loss		923	193,995	902
		_______	_______	_______
		259,637	202,148	213,596

Current assets
Cash at bank		2,259	796	981
Other receivables		468	48	126
		_______	_______	_______
Total current assets		2,727	844	1,107
		_______	_______	_______
Total assets		262,364	202,992	214,703

Current liabilities
Other payables		(2,467)	(137)	(829)
		_______	_______	_______
Total current liabilities		(2,467)	(137)	(829)
		_______	_______	_______
Net assets		259,897	202,855	213,874
		_______	_______	_______

Capital and reserves
Ordinary share capital	8	14,768	14,768	14,768
Share premium account		25,406	25,406	25,406
Special reserve		15,778	15,778	15,778
Capital redemption reserve		4,484	4,484	4,484
Capital reserve	9	199,355	142,354	153,743
Revenue reserve		106	65	(305)
		_______	_______	_______
Equity shareholders' funds		259,897	202,855	213,874
		_______	_______	_______

Net asset value per Ordinary share (pence)	10	439.98	343.41	362.07
		_______	_______	_______

CONDENSED STATEMENT OF CHANGES IN EQUITY

Six months ended 30 September 2016 (unaudited)
		Share		Capital
	Share	premium	Special	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2016	14,768	25,406	15,778	4,484	153,743	(305)	213,874
Profit for the period	-	-	-	-	45,612	411	46,023
	______	______	______	______	______	______	_______
Balance at 30 September 2016	14,768	25,406	15,778	4,484	199,355	106	259,897
	______	______	______	______	______	______	_______

Six months ended 30 September 2015 (unaudited)
		Share		Capital
	Share	premium	Special	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2015	14,768	25,406	15,778	4,484	166,953	319	227,708
Loss for the period	-	-	-	-	(24,599)	(254)	(24,853)
	______	______	______	______	______	______	_______
Balance at 30 September 2015	14,768	25,406	15,778	4,484	142,354	65	202,855
	______	______	______	______	______	______	_______

Year ended 31 March 2016 (audited)
		Share		Capital
	Share	premium	Special	redemption	Capital	Revenue
	capital	account	reserve	reserve	reserve	reserve	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
Balance at 31 March 2015	14,768	25,406	15,778	4,484	166,953	319	227,708
Loss for the year	-	-	-	-	(13,210)	(624)	(13,834)
	______	______	______	______	______	______	_______
Balance at 31 March 2016	14,768	25,406	15,778	4,484	153,743	(305)	213,874
	______	______	______	______	______	______	_______

CONDENSED CASH FLOW STATEMENT

	Six months ended 30 September 2016	Six months ended 30 September 2015	Year ended 31 March 2016
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Cash flows from operating activities
Dividend income received	2,036	111	364
Interest income received	2	2	4
Investment management fee paid	(1,181)	(50)	(158)
Other cash expenses	(362)	(235)	(541)
	__________	__________	__________
Cash inflow/(outflow) from operations	495	(172)	(331)
Interest paid	-	-	(59)
	__________	__________	__________
Net cash inflow/(outflow) from operating activities	495	(172)	(390)

Purchase of investments	(21,088)	(3,105)	(188,282)
Sales of investments	22,284	2,053	188,743
Capital Gains Tax on sales	(472)	-	-
	__________	__________	__________
Net cash flow from investing activities	724	(1,052)	461
	__________	__________	__________
Net increase/(decrease) in cash and cash equivalents	1,219	(1,224)	71

Cash and cash equivalents at the start of the period	981	2,017	2,017
Effect of foreign exchange rate changes	59	3	(1,107)
	__________	__________	__________
Cash and cash equivalents at the end of the period	2,259	796	981
	__________	__________	__________

NOTES TO THE FINANCIAL STATEMENTS

1.	Principal activity
	The principal activity of the Company is that of an investment trust company within the meaning of Section 1158 of the Corporation Tax Act 2010.

	The principal activity of its foreign subsidiary is similar in all relevant respects to that of its United Kingdom parent. The Company has adopted IFRS 10 'Consolidated Financial Statements - Consolidation relief for Investment Entities'; as such the Company has not consolidated the results of its subsidiaries.

2.	Accounting policies
	The Company's financial statements have been prepared in accordance with International Accounting Standard ('IAS') 34 - 'Interim Financial Reporting', as adopted by the International Accounting Standards Board (IASB), and interpretations issued by the International Reporting Interpretations Committee of the IASB (IFRIC). The Company's financial statements have been prepared using the same accounting policies applied for the year ended 31 March 2016 financial statements, which received an unqualified audit report.
	The financial statements have been prepared on a going concern basis. In accordance with the Financial Reporting Council's guidance on 'Going Concern and Liquidity Risk' the Directors have undertaken a review of the Company's assets which primarily consist of a diverse portfolio of listed equity shares which, in most circumstances, are realisable within a short timescale.

	During the period the Company adopted the following amendments to standards;
	- IAS 1 Presentation of Financial Statements - Amendment for Disclosure Initiative (effective for annual periods beginning on or after 1 January 2016) covering (i) clarification on materiality (ii) permitting disaggregation of certain items in statements of profit or loss, other comprehensive income and balance sheet (iii) structure of the notes to the financial statements (iv) accounting policies disclosure that are significant and (v) equity accounted items in other comprehensive income.
	- Annual Improvements to IFRSs 2012 - 2014 Cycle (effective for annual periods beginning on or after 1 January 2016) covering (i) IAS 34 Interim Financial Reporting clarifying what is disclosed in the notes if not disclosed elsewhere in the interim report and (ii) IFRS 7 Financial instruments: Disclosures regarding the applicability of the amendments to condensed interim financial statements.

		Six months ended	Six months ended	Year ended
		30 September 2016	30 September 2015	31 March 2016
3.	Income	£'000	£'000	£'000
	Income from investments
	Overseas dividends	1,998	52	369

	Other operating income
	Deposit & other interest	1	2	5
		__________	__________	__________
	Total income	1,999	54	374
		__________	__________	__________

	The restructuring of the Company towards the end of the financial year to 31 March 2016 resulted in the transfer to the Company of investments previously registered to the Company's subsidiary New India Investment Company (Mauritius) Limited. Accordingly, income from investments previously generated within the Company's subsidiary and accounted for under IFRS 10 'Consolidated Financial Statements' including the Amendments, 'Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27)(Investment Entity Amendments) through gains/(losses) on investments held at fair value, is now generated by the Company itself and recognised as income from investments.

				Six months ended	Six months ended	Year ended
				30 September 2016	30 September 2015	31 March 2016
4.	Tax on ordinary activities			£'000	£'000	£'000
	(a)		Current tax:
			Short-term capital gains tax on sales	472	-	-
				__________	__________	__________

	(b)		Factors affecting the tax charge for the year or period
			The tax charged for the period can be reconciled to the profit per the Condensed Statement of Comprehensive Income as follows:

				Six months ended	Six months ended	Year ended
				30 September 2016	30 September 2015	31 March 2016
				£'000	£'000	£'000
		Profit/(loss) before tax		46,495	(24,853)	(13,834)
				__________	__________	__________
		Corporation tax on profit/(loss) at the standard rate of 19% (30 September 2015 and 31 March 2016 - 20%)		9,299	(4,971)	(2,767)
		Effects of:
		Income taxable in different years		-	-	(1)
		Expenses not deductible for tax purposes		-	-	7
		(Gains)/losses on investments held at fair value through profit or loss not taxable		(9,205)	4,920	2,421
		Currency (gains)/losses not taxable		(12)	(1)	221
		Movement in excess expenses		318	62	192
		Non-taxable dividend income		(400)	(10)	(73)
		Short-term capital gains tax on sales		472	-	-
				__________	__________	__________
		Current tax charge		472	-	-
				__________	__________	__________

		Under section 115 AD Indian Income Tax Act 1961, the Company is subject to short-term capital gains tax on gains on sales made within twelve months. Until 31 March 2017 this will include short-term capital gains tax on the sale of investments previously registered to the Company's subsidiary, New India Investment Company (Mauritius) Limited, which were transferred to the Company as result of the restructuring of the Company towards the end of the financial year to 31 March 2016.

		Six months ended	Six months ended	Year ended
		30 September 2016	30 September 2015	31 March 2016
5.	Return per Ordinary share	£'000	£'000	£'000
	Based on the following figures:
	Revenue return	411	(254)	(624)
	Capital return	45,612	(24,599)	(13,210)
		__________	__________	__________
	Total return	46,023	(24,853)	(13,834)
		__________	__________	__________
	Weighted average number of Ordinary shares in issue	59,070,140	59,070,140	59,070,140
		__________	__________	__________

6.	Dividends on equity shares
	No interim dividend has been declared in respect of either the six months ended 30 September 2016 or 30 September 2015.

	During the year ended 31 March 2016, a dividend of £nil (2015 - £150,000) was paid from the subsidiary company to the parent company.

7.	Transaction costs
	During the period expenses were incurred in acquiring or disposing of investments classified as fair value through profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the Condensed Statement of Comprehensive Income. The total costs were as follows:

		Six months ended	Six months ended	Year ended
		30 September 2016	30 September 2015	31 March 2016
		£'000	£'000	£'000
	Purchases	47	-	229
	Sales	52	-	-
		__________	__________	__________
		99	-	229
		__________	__________	__________

8.	Ordinary share capital
	As at 30 September 2016 there were 59,070,140 (30 September 2015 and 31 March 2016 - 59,070,140) Ordinary shares in issue.

9.	Capital reserve
	The capital reserve reflected in the Condensed Balance Sheet at 30 September 2016 includes gains of £42,209,000 (30 September 2015 - losses of £24,988,000; 31 March 2016 - gains of £1,068,000) which relate to the revaluation of investments held at the reporting date.

10.	Net asset value per Ordinary share
	The net asset value per Ordinary share is based on a net asset value of £259,897,000 (30 September 2015 - £202,855,000; 31 March 2016 - £213,874,000) and on 59,070,140 (30 September 2015 and 31 March 2016 - 59,070,140) Ordinary shares, being the number of Ordinary shares in issue at the period end.

11.	Fair value hierarchy
	IFRS 13 'Fair Value Measurement' requires an entity to classify fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used in making measurements. The fair value hierarchy has the following levels:

	Level 1: quoted (unadjusted) market prices in active markets for identical assets or liabilities;
	Level 2: valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
	Level 3: valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

	The financial assets and liabilities measured at fair value in the Condensed Balance Sheet are grouped into the fair value hierarchy at the Balance Sheet date as follows:

				Level 1	Level 2	Level 3	Total
	As at 30 September 2016		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	258,714	-	-	258,714
	Investment in Subsidiary		b)	-	923	-	923
				_______	_______	_______	_______
	Net fair value			258,714	923	-	259,637
				_______	_______	_______	_______

				Level 1	Level 2	Level 3	Total
	As at 30 September 2015		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	8,153	-	-	8,153
	Investment in Subsidiary		b)	-	193,995	-	193,995
				_______	_______	_______	_______
	Net fair value			8,153	193,995	-	202,148
				_______	_______	_______	_______

				Level 1	Level 2	Level 3	Total
	As at 31 March 2016		Note	£'000	£'000	£'000	£'000
	Financial assets at fair value through profit or loss
	Quoted equities		a)	212,694	-	-	212,694
	Investment in Subsidiary		b)	-	902	-	902
				_______	_______	_______	_______
	Net fair value			212,694	902	-	213,596
				_______	_______	_______	_______

	a)	Quoted equities
		The fair value of the Company's investments in quoted equities has been determined by reference to their quoted bid prices at the reporting date. Quoted equities included in Fair Value Level 1 are actively traded on recognised stock exchanges.
	b)	Investment in Subsidiary
		The Company's investment in its Subsidiary was categorised in Fair Value Level 2 as its fair value was determined by reference to the Subsidiary company's net asset value at the reporting date.

12.	Related party disclosures
	The Company has agreements with Aberdeen Fund Managers Limited ("AFML" or the "Manager") for the provision of investment management, secretarial, accounting and administration services and with Aberdeen Asset Management PLC ("AAM") for the provision of promotional activity services.

	During the period, the management fee was payable monthly in arrears and was based on an annual amount of 1% of the total assets of the Company less current liabilities, excluding the fair value of the subsidiary, New India Investment Company (Mauritius) Limited, valued monthly. The management agreement is terminable by either the Company or AFML on 12 months' notice. The amount payable in respect of the Company for the period was £1,212,000 (six months ended 30 September 2015 - £48,000; year ended 31 March 2016 - £329,000) and the balance due to AFML at the period end was £212,000 (period end 30 September 2015 - £7,000; year end 31 March 2016 - £181,000). All investment management fees are charged 100% to the revenue column of the Condensed Statement of Comprehensive Income.

	New India Investment Company (Mauritius) Limited also has an agreement with AFML to receive management services based on an annual amount of 1% of its net asset value. The amount payable during the year was £2,000 (six months ended 30 September 2015 - £1,002,000; year ended 31 March 2016 - £1,743,000) which was expensed through its own profit and loss account. The balance due to AFML at the period end was £nil (30 September 2015 - £160,000; year ended 31 March 2016 - £1,000).

	Accordingly, the aggregate amount payable in respect of management services provided to the Company and its Subsidiary for the year was £1,214,000 (30 September 2015 - £1,050,000; 31 March 2016 - £2,072,000) and the balance due to AFML at the period end was £212,000 (period ended 30 September 2015 - £167,000; year ended 31 March 2016 - £182,000).

	The Company has an agreement with AAM for the provision of promotional activities in relation to the Company's participation in the Aberdeen Investment Trust Share Plan and ISA. The total fees paid and payable under the agreement during the period were £71,000 (six months ended 30 September 2015 - £71,000; year ended 31 March 2016 - £142,000) and the balance due to AAM at the period end was £35,000 (period ended 30 September 2015 - £35,000; year ended 31 March 2016 - £35,000).

13.

Segmental Information

For management purposes, the Company is organised into one main operating segment, which invests in equity securities. All of the Company's activities are interrelated, and each activity is dependent on the others. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment. The financial results from this segment are equivalent to the financial statements of the Company as a whole.

14.	Half-Yearly Report
	The financial information contained in this Half-Yearly Report does not constitute statutory accounts as defined in Sections 434 - 436 of the Companies Act 2006. The financial information for the six months ended 30 September 2016 and 30 September 2015 has not been audited.

	The information for the year ended 31 March 2016 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the Independent Auditor on those accounts contained no qualification or statement under Section 237 (2), (3) or (4) of the Companies Act 2006.

	The Half-Yearly Report has not been reviewed or audited by the Company's Independent Auditor.