Interim Results

RNS Number : 1348J

New India Investment Trust PLC

28 November 2008

 



NEW INDIA INVESTMENT TRUST PLC

UNAUDITED HALF YEARLY FINANCIAL REPORT

FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2008

INTERIM BOARD REPORT

Overview

During an extremely volatile six months to the end of September, the fully diluted net asset value fell by 12.3% and the share price of your Company fell by 10.3%. This compares with a fall in the benchmark of 22.9%. During the period, the share price discount to net asset value narrowed to 12.4% from 13.9%.

More recently these trends have continued, with your Company's net asset value decreasing by a further 9.0% and the share price by 11.0%, compared to the benchmark decline of 19.0% from 1 October 2008 to 13 November 2008. 

Your Manager's stock specific, value-oriented style has continued to deliver significant and consistent net asset value outperformance relative to the benchmark, amounting to a difference of 10.6% during the six months to 30 September, and 22.1% for the 12 months to 13 November 2008. Over the last month to 13 November 2008, the Company's net asset value increased by 3.69% compared to a negative benchmark return of -2.78%. This recent period of outperformance has helped recover much of the Company's underperformance of the bull market over the previous two years.

During the period under review, the Company bought back 1,575,000 of its own shares at 139 pence per share, for cancellation.

The period under review was exceptional, not only for the severe market gyrations that included heavy sell-offs, but also for the way in which a dramatic worsening of the credit crisis brought about a tectonic shift in the global financial landscape. Under these conditions, global markets dictated the direction of Indian equities. Amid continued deleveraging and heightened risk aversion, there was a substantial withdrawal of funds from emerging markets by foreign investors. The Indian stock market has seen outflows totalling US$11bn to the end of September 2008, marking the first time in a decade that foreigners have been net sellers. In comparison, there was US$17.8bn of inflows in 2007, fuelling the market's strong run at that time. This sharp outflow led to the rupee falling to a five-year low against the dollar. The rupee also fell against sterling, from 79.74 rupees to the pound at the start of the period, to 83.71 on 30 September 2008.

Amid the market volatility, the portfolio's holdings in defensive sectors, such as consumer discretionary, health-care and utilities, contributed the most to relative performance, while the lack of exposure to the energy sector, notably Reliance Industries ('Reliance'), continued to cost the Company, albeit to a lesser degree than in previous periods. A detailed analysis is set out in the Manager's Review. 

For the domestic stock market, stubbornly high consumer prices, mainly due to imported inflation, remained a major concern for the Reserve Bank of India (RBI). With elections looming, the RBI had been aggressively hiking cash reserve ratios and interest rates to constrain inflation. The true level of inflation remains understated because of government price caps and subsidies, notably of fuel, which are a huge off-budget cost. Given the recent decline in oil and commodity prices, inflationary concerns have started to ease.

The Indian economy continues to be supported by strong domestic demand, which is being fuelled by a growing and affluent professional middle class and rising consumer debt, and significant infrastructure spending by the government. GDP growth over the past four years has been strong, holding near 9%, but economic activity has moderated recently, owing to aggressive monetary tightening and the spike in oil and commodity prices, as well as the current global financial strains. The real estate sector, in particular, has seen rental and property values fall by 20-25%. Adding to developers' concerns are cash flow and credit access, as banks turn increasingly risk averse. Falling demand and higher financing costs are likely to lead firms to cut back on spending and hiring. Consumption is also likely to fall as households attempt to increase savings. That said, the easing of inflationary pressures may provide some respite for corporate profit margins.

Recent AGM

At the Annual General Meeting of your Company held on 19 September 2008, all resolutions were passed by shareholders, including the continuation resolution. During the Board's consultation with the Company's larger shareholders earlier in 2008, one of their concerns was to avoid implementing a style shift at the wrong point in the cycle, and our belief was that, longer-term, the Manager's investment strategy would lead to outperformance. While, therefore, the Company has outperformed the benchmark for the first six months of the financial year, there is great uncertainty both in market and global economic conditions, and so the Board continues to monitor carefully both the performance of the Manager and the market. 

Outlook

Shareholders will be aware of the sad and shocking terrorist attacks in Mumbai.  Indian equities were already expected to remain volatile in the run-up to the elections, with ongoing problems in global credit markets adding to the uncertainty.  While coordinated policy responses by central banks have eased liquidity fears, sparking a market rally, the full impact of frozen credit markets on global economic growth has yet to be felt. The Mumbai attacks do not fundamentally change this assessment.

Although the Indian economy remains on a long-term growth path, the medium-term growth trajectory has stalled somewhat as a result of the global problems in financial markets. Second-quarter GDP growth slowed to 7.9% year-on-year. Companies may increasingly face a margin squeeze, owing to tighter credit and funding constraints. As such, corporate earnings are likely to flatten, or even decline, in the year ahead. Cognisant of the increasing growth risks, the central bank has reversed its tightening bias, cutting the cash reserve ratio and boosting liquidity.

As the global economy weakens further, companies that are cash-rich and have healthy balance sheets are likely to strengthen their competitive positions. In such uncertain times, your Board remains confident in your Manager, given its excellent long-term track record and clear, value-oriented investment style. 

During the period under review, the Company's wholly-owned subsidiary, New India Investment Company (Mauritius) Limited, entered into a one-year revolving credit facility of up to £10 million to take advantage of the long-term attractions of the Indian equities market. The money will be invested in Indian equities when the market presents suitable long-term opportunities to provide shareholders with capital appreciation. To date, the facility has not been drawn.

VAT on Management Fees

In my statement in the Annual Report for the year to 31 March 2008, I referred to the possibility of the Company being able to recover some of the VAT suffered in the past on its investment management fees. It continues to be the case that no asset is, as yet, being recognised, since the timing and quantum of this repayment are being discussed with the former investment manager, and are still to be determined. The quantum is not significant. The Company will update shareholders in due course.

Risks and Uncertainties

The Board seeks to set out below its view of the key risks affecting its business. The Board is acutely aware that, apart from those issues it can identify, there are likely to be matters about which it does not or cannot know which may also affect New India Investment Trust.

With that reservation, the Board believes that the factors which could have the most significant adverse impact on shareholders would be likely to include:

-    falls in the prices of securities in Indian companies, which may be themselves determined by local and international economic, 
     political and financial factors and management actions

-    adverse movements in the exchange rate between sterling and the rupee as well as between other currencies affecting the 
     fortunes of the companies in which we invest

-    a lack of skill in New India's investment management team

-    factors which affect the discount to net asset value at which the shares of New India trade. These may include the popularity of 
     the investment objective of the company, the popularity of investment trust shares in general and the ease with which the shares 
     and warrants of New India can be traded on the London Stock Exchange

-    changes in or breaches of the complicated set of statutory, tax and regulatory rules within which New India seeks to conduct its 
     business

-    a challenge to the security of the assets of the Company.

Some of these risks can be mitigated or managed to a greater or lesser extent by the actions of the Board in appointing competent managers and custodians. In addition, the Board seeks to put in place, through its contractual arrangements and through various monitoring processes, controls which should avert (but do not guarantee the avoidance of) what might be regarded as operational mistakes. However, investment tends to involve both risk and uncertainty about future prospects, and we cannot avoid either in our search for returns. 

Directors' Responsibility Statement

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 Interim Management Report includes 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 FSA's
     Disclosure and Transparency Rules.

The half-yearly financial report for the six months to 30 September 2008 comprises the Interim Management Report in the form of the Interim Board Report, the Directors' Responsibility Statement and a condensed set of financial statements, and has not been audited or reviewed by the auditors pursuant to the Auditing Practices Board guidance on Review of Interim Financial Information. The Manager's Review is provided for information only, and is the responsibility of Aberdeen Asset Management Asia Limited.

By order of the Board

William Salomon

Chairman

27 November 2008

MANAGER'S REVIEW

Overview

Indian equities fell sharply in the half-year under review, stunned by events in world financial markets, which included the series of dramatic bank rescues in the US and Europe, as well as persistent inflation. Rallies during the period proved short-lived and failed to lift investor sentiment, which remained battered by headwinds both domestically and externally.

Early in the reporting period, equities rose as technology stocks gained on a weakening rupee and an extension of tax holidays for the sector. But they soon fell on fears that the accelerating costs of raw materials would hurt businesses. In July, the market rose again, after the government survived a no-confidence vote over the US nuclear deal. However, by September, sentiment was being dictated by events outside India. The collapse of Lehman Brothers, rash of bank failures in Europe and rejection, at least initially, of the US$700bn Fed rescue package added to the selling pressure. 

Substantial foreign portfolio outflows, which have totalled US$11bn so far this year, amplified the fall in Indian equities. In addition to wealth erosion, this has also played a role in the rupee's sharp depreciation against the US dollar, which has in turn exacerbated domestic inflationary pressures. The sell-off has however brought valuations down to more reasonable levels. The trailing price-to-earnings ratio of the Sensex Index dropped from 22.6 to 13.3 times during the period.

The government has acted to prop up the currency and improve liquidity, although policy was initially hampered by rising inflation. Wholesale price inflation reached a 13-year high in early August, driven by higher commodity prices, prompting the Reserve Bank of India to increase the cash reserve ratio to 9%. However, the RBI then seemed to recognise the severity of the financial crisis and cut the reserve ratio three times in one week, bringing it down to 6.5%.  

High interest rates, the spike in commodity prices and the deteriorating external environment have taken a toll on the economy. GDP growth in the quarter ended March was the slowest in three years, as the manufacturing and utilities sectors weakened. Industrial production grew sluggishly in August, while the trade deficit widened due to costlier imports. On the bright side, merchandise exports in the April-August period expanded by 35.1%, while foreign direct investment during the same period reached a record US$14.8bn. 

Performance Attribution Analysis

The portfolio fell 12.3% in sterling terms during the six months under review, outperforming the benchmark MSCI India Index's decline of 22.9%. This reflects the quality and defensiveness of the portfolio's holdings. This outperformance came from both sector allocation and stock selection.

At the sector level, our overweight to information technology (IT) and healthcare were the biggest positive contributors. Despite the rupee's strength, the IT sector continued to do well, owing to higher sales and improved efficiency. Healthcare, which has generally been viewed as defensive, has also held up well in the sell-off. Conversely, our low exposure to the energy sector cost the portfolio. 

On the stock selection front, our holdings in consumer discretionary and healthcare contributed the most to relative return. Our largest holding in the consumer discretionary sector, motorcycle manufacturer Hero Honda, rose 21.90%, as new model launches helped the company maintain its strong market position. In healthcare, Sun Pharmaceuticals, GlaxoSmithKline Pharmaceuticals, Piramal Healthcare and Aventis Pharma all outperformed. They enjoyed steady earnings growth even as the economy faltered.

Elsewhere, our materials stocks outperformed their sector, despite the sector underperforming the benchmark. Our core holding, Grasim Industries, fell on expectations of an impending cement oversupply as the building industry weakens. Despite recent weakness, the company still remains the leading cement player in India and is well positioned to weather a downturn in the infrastructure sector. Meanwhile, Bank of Baroda, the second largest bank in the country, rose on the back of its status as a well-capitalised state-owned institution. 

Although the portfolio's overweight to IT added to relative performance, our holdings underperformed the sector index. Satyam Computer Services came under pressure despite reporting solid quarterly results. Investors switched attention to bellwether Infosys, which is perceived to have a stronger brand.

In energy, not holding index-heavyweight Reliance Industries hurt performance, but to a lesser extent than in previous periods. In the six months to end-March, the conglomerate had detracted 1.2% from relative performance, as compared to 0.9% in this reporting period. We reiterate that we are uncomfortable with Reliance's aggressive pursuit of growth in non-core retail and industrial park activities, as well as less than satisfactory transparency. Today, as the financial crisis lays bare the vulnerability of companies, we are more confident than ever about not holding the company.

Portfolio Activity

During the period, we sold energy firms Bharat Petroleum and Oil & Natural Gas, following run-ups in their share prices. Unlike elsewhere, lower oil prices benefit Indian energy companies because of the state's mandate to sell fuel below cost. The subsidy burden had made the operating environment very difficult, and we felt there were better opportunities elsewhere. 

We also took profits from Hero Honda and Piramal, which continued to perform well. Using these proceeds, we added to ABB India, Bosch and Housing Development Finance Corp, as their weaker share prices provided good buying opportunities.

Outlook

We expect the Indian market to fall further, given the ongoing global liquidity crisis and upcoming elections. Even though valuations have fallen substantially, there is probably still some way to go before they bottom out. 

Although Indian companies will not escape the global economic slowdown to come, their strong balance sheets will stand them in good stead. Many have accumulated wealth over the past few years and have the financial clout to be able to make large acquisitions. These include Tata Power's 11% stake in Australian renewable energy producer Geodynamics for US$37m, and Tata Consultancy Services' purchase of US-based Citigroup's back-office unit for US$505m. During the quarter ended September, mergers and acquisitions activity rose 74% to US$9.2bn. 

When the financial system stabilises, India is likely to regain favour with investors. In the face of extreme volatility we remain focused on the long-term prospects, which remain excellent. In that respect, we have stuck to our disciplined process of investing in well-run businesses. We expect corporate earnings to weaken in the year ahead, but the portfolio's holdings to strengthen their competitive positions in the months ahead.

GROUP INCOME STATEMENT 

		Six months ended			Six months ended
		30 September 2008			30 September 2007
		(unaudited)			(unaudited)
		Revenue	Capital	Total	Revenue	Capital	Total
		Return	Return	Return	Return	Return	Return
	Notes	£'000	£'000	£'000	£'000	£'000	£'000
Total revenue	3	1,001	-	1,001	796	-	796
(Losses)/gains on investments held at fair value		-	(11,814)	(11,814)	-	18,299	18,299
Currency losses		-	(49)	(49)	-	(10)	(10)
		________	________	________	________	_______	________
		1,001	(11,863)	(10,862)	796	18,289	19,085
		________	________	________	________	_______	________
Expenses
Management fees		(404)	-	(404)	(425)	-	(425)
Other operating expenses		(262)	-	(262)	(237)	-	(237)
		________	________	________	________	_______	________
Profit/(loss) before taxation		335	(11,863)	(11,528)	134	18,289	18,423
Taxation	4	(23)	-	(23)	(37)	-	(37)
		________	________	________	________	_______	________
Profit/(loss) for the period		312	(11,863)	(11,551)	97	18,289	18,386
		________	________	________	________	_______	________
Return per Ordinary share (pence)
Basic	5	0.66	(25.26)	(24.60)	0.20	38.22	38.42
		________	________	________	________	_______	________
Diluted	5	0.62	(23.49)	(22.87)	0.19	35.49	35.68
		________	________	________	________	_______	________

The total column of this statement represents the Income Statement of the Group, 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.

All income is attributable to the equity holders of New India Investment Trust PLC. There are no minority interests.

  GROUP INCOME STATEMENT (Cont'd)

		Year ended
		31 March 2008
		(audited)
		Revenue	Capital	Total
		Return	Return	Return
	Notes	£'000	£'000	£'000
Total revenue	3	1,073	-	1,073
(Losses)/gains on investments held at fair value		-	12,320	12,320
Currency losses		-	(5)	(5)
		________	________	________
		1,073	12,315	13,388
		________	________	________
Expenses
Management fees		(903)	-	(903)
Other operating expenses		(548)	-	(548)
		________	________	________
Profit/(loss) before taxation		(378)	12,315	11,937
Taxation	4	(46)	-	(46)
		________	________	________
Profit/(loss) for the period		(424)	12,315	11,891
		________	________	________
Return per Ordinary share (pence)
Basic	5	(0.89)	25.74	24.85
		________	________	________
Diluted	5	(0.82)	23.70	22.88
		________	________	________

GROUP BALANCE SHEET

		As at	As at	As at
		30 September	30 September	31 March
		2008	2007	2008
		(unaudited)	(unaudited)	(audited)
	Notes	£'000	£'000	£'000
Non-current assets
Investments held at fair value through profit or loss		70,433	91,296	84,826
		________	________	________
Current assets
Cash and cash equivalents		614	311	772
Other receivables		471	168	196
		________	________	________
Total current assets		1,085	479	968
		________	________	________
Total assets		71,518	91,775	85,794
Current liabilities
Other payables		(281)	(313)	(826)
		________	________	________
Net assets		71,237	91,462	84,968
		________	________	________
Capital and reserves
Ordinary share capital		11,577	11,965	11,966
Share premium account		11,807	11,790	11,790
Special reserve		15,778	17,981	17,981
Warrant reserve		4,003	4,010	4,010
Warrant exercise reserve		26	19	19
Capital redemption reserve		4,484	4,089	4,089
Capital reserve	8	22,201	40,038	34,064
Revenue reserve		1,361	1,570	1,049
		________	________	________
		71,237	91,462	84,968
		________	________	________
Net asset value per Ordinary share pence)	9
Basic		153.83	191.09	177.52
Diluted		142.20	171.89	161.18

  GROUP STATEMENT OF CHANGES IN EQUITY 

Six months ended 30 September 2008 (unaudited)
		Share				Warrant		Capital
	Share	Premium	Special	Warrant		Exercise		Redemption		Capital			Revenue
	Capital	Account	Reserve	Reserve		Reserve		Reserve		Reserve			Reserve	Total
	£'000	£'000	£'000	£'000		£'000		£'000		£'000			£'000	£'000
Balance at 31 March 2008	11,966	11,790	17,981	4,010		19		4,089		34,064			1,049	84,968
Net (loss)/profit on ordinary activities after taxation	-	-	-	-		-		-		(11,863)			312	(11,551)
Issue of share capital upon exercise of Warrants	6	17	-	(7)		7		-		-			-	23
Purchase of own shares	(395)	-	(2,192)	-		-		395		-			-	(2,192)
Expenses of repurchase	-	-	(11)	-		-		-		-			-	(11)
	______	_______	_______	_______		_______		_______		_______			_______	_______
Balance at 30 September 2008	11,577	11,807	15,778	4,003		26		4,484		22,201			1,361	71,237
	______	_______	_______	_______		_______		_______		_______			_______	_______
Six months ended 30 September 2007 (unaudited)
		Share					Warrant		Capital
	Share	Premium	Special		Warrant		Exercise		Redemption		Capital	Revenue
	Capital	Account	Reserve		Reserve		Reserve		Reserve		Reserve	Reserve			Total
	£'000	£'000	£'000		£'000		£'000		£'000		£'000	£'000			£'000
Balance at 31 March 2007	11,960	11,773	17,981		4,017		12		4,089		21,749	1,473			73,054
Net profit on ordinary activities after taxation	-	-	-		-		-		-		18,289	97			18,386
Issue of share capital upon exercise of Warrants	5	17	-		(7)		7		-		-	-			22
	______	_______	_______		_______		_______		_______		_______	_______			_______
Balance at 30 September 2007	11,965	11,790	17,981		4,010		19		4,089		40,038	1,570			91,462
	______	_______	_______		_______		_______		_______		_______	_______			_______
Year ended 31 March 2008 (audited)
		Share					Warrant		Capital
	Share	Premium	Special		Warrant		Exercise		Redemption		Capital	Revenue
	Capital	Account	Reserve		Reserve		Reserve		Reserve		Reserve	Reserve			Total
	£'000	£'000	£'000		£'000		£'000		£'000		£'000	£'000			£'000
Balance at 31 March 2007	11,960	11,773	17,981		4,017		12		4,089		21,749	1,473			73,054
Net profit/(loss) on ordinary activities after taxation	-	-	-		-		-		-		12,315	(424)			11,891
Issue of share capital upon exercise of Warrants	6	17	-		(7)		7		-		-	-			23
	______	_______	_______		_______		_______		_______		_______	_______			_______
Balance at 31 March 2008	11,966	11,790	17,981		4,010		19		4,089		34,064	1,049			84,968
	______	_______	_______		_______		_______		_______		_______	_______			_______

  GROUP CASH FLOW STATEMENT

	Six months ended	Six months ended	Year ended
	30 September	30 September	31 March
	2008	2007	2008
	(unaudited)	(unaudited)	(audited)
	£'000	£'000	£'000
Operating activities
(Loss)/profit before tax	(11,528)	18,423	11,937
Losses/(gains) on investments held at fair value through profit or loss	11,814	(18,299)	(12,320)
Net losses on foreign exchange	49	10	5
Net sales/(purchases) of investments held at fair value through profit or loss	2,579	(539)	(47)
(Increase)/decrease in amounts due from brokers	(215)	425	312
(Increase)/decrease in other receivables	(37)	102	187
(Decrease)/increase in amounts due to brokers	(432)	(340)	117
(Decrease)/increase in other payables	(103)	16	63
	________	________	________
Net cash inflow/(outflow) from operating activities before interest and corporation tax	2,127	(202)	254
Corporation tax paid	(33)	(26)	(27)
	________	________	________
Net cash inflow/(outflow) from operating activities	2,094	(228)	227
Financing activities
Purchase of own shares	(2,203)	-	-
Exercise of Warrants	-	22	23
	________	________	________
Net cash (outflow)/inflow from financing activities	(2,203)	22	23
	________	________	________
Net (decrease)/increase in cash and cash equivalents	(109)	(206)	250
Effect of foreign exchange rate changes	(49)	(10)	(5)
	________	________	________
Change in cash and cash equivalents	(158)	(216)	245
Cash and cash equivalents at the start of the period	772	527	527
	________	________	________
Cash and cash equivalents at the end of the period	614	311	772

  Notes to the Interim Report

1.	Principal activity
	The principal activity of the Company is that of an investment trust company within the meaning of Section 842 of the Income and Corporation Taxes Act 1988.
	The principal activity of its foreign subsidiary is similar in all relevant respects to that of its United Kingdom parent.

2.

Accounting policies

The Group's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) 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). They have also been prepared using the same accounting policies applied for the year ended 31 March 2008 financial statements, which received an unqualified audit report.

		Six months ended	Six months ended	Year ended
		30 September 2008	30 September 2007	31 March 2008
3.	Income	£'000	£'000	£'000
	Income from investments
	Overseas dividends	985	778	1,038
	UK interest	2	-	-
	Other operating income
	Deposit interest	14	18	35
		________	________	________
	Total income	1,001	796	1,073

		Six months ended	Six months ended	Year ended
		30 September 2008	30 September 2007	31 March 2008
4.	Tax on ordinary activities	£'000	£'000	£'000
	(a)    Current tax:
	Overseas taxation	23	37	46
		________	________	________
	(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 Group Income Statement as follows:
		Six months ended	Six months ended	Year ended
		30 September 2008	30 September 2007	31 March 2008
		£'000	£'000	£'000
	(Loss)/profit before tax	(11,528)	18,423	11,937
	Corporation tax on profit at the standard rate of 28% (September 2007 & March 2008 - 30%)	(3,228)	5,527	3,581
	Effects of:
	(Losses)/gains on investments held at fair value through profit or loss not taxable	3,308	(5,490)	(3,696)
	Effect on subsidiary of different tax rate levied in another jurisdiction	(57)	-	161
		________	________	________
	Total tax charge	23	37	46
		________	________	________
	The Company is exempt from corporation tax on capital gains provided it obtains agreement from HM Revenue & Customs that the tests within Section 842 (s842) of the Income & Corporation Taxes Act 1988 have been met. Under Mauritian taxation laws no Mauritian capital gains tax is payable on profits arising from the sale of securities.

5.	Return per Ordinary share  The basic earnings per Ordinary share are based on the net loss after taxation of £11,551,000 (30 September 2007 - net profit of £18,386,000; 31 March 2008 - net profit of £11,891,000), and on 46,968,973 (30 September 2007 - 47,845,857; 31 March 2008 - 47,854,303) Ordinary shares, being the weighted average number of Ordinary shares in issue during the period.  The calculation of the diluted returns per Ordinary share is carried out in accordance with IAS 33, 'Earning per Share'. For the purposes of calculating diluted returns per Ordinary share, the number of Ordinary shares is the weighted average used in the basic calculation plus the number of Ordinary shares deemed to be issued for no consideration on exercise of all Warrants by reference to the average share price of the Ordinary shares during the year. The calculations indicate that the exercise of Warrants would result in an increase in the weighted average number of Ordinary shares of 3,542,192 (30 September 2007 - 3,688,825; 31 March 2008 - 4,098,457) to a total of 50,511,165 (30 September 2007 - 51,534,682; 31 March 2008 - 51,952,760) Ordinary shares. The basic and diluted earnings per Ordinary share detailed above can be further analysed between revenue and capital as follows:
	Basic
		Six months ended	Six months ended	Year ended
		30 September 2008	30 September 2007	31 March 2008
		P	p	p
	Revenue return per share	0.66	0.20	(0.89)
	Capital return per share	(25.26)	38.22	25.74
	Total return	(24.60)	38.42	24.85
		Six months ended	Six months ended	Year ended
		30 September 2008	30 September 2007	31 March 2008
		£'000	£'000	£'000
	Revenue return total	312	97	(424)
	Capital return total	(11,863)	18,289	12,315
	Total return	(11,551)	18,386	11,891
	Weighted average number of Ordinary shares in issue	46,968,973	47,845,857	47,854,303
	Diluted
		Six months ended	Six months ended	Year ended
		30 September 2008	30 September 2007	31 March 2008
		p	p	p
	Revenue return per share	0.62	0.19	(0.82)
	Capital return per share	(23.49)	35.49	23.70
	Total return	(22.87)	35.68	22.88
		Six months ended	Six months ended	Year ended
		30 September 2008	30 September 2007	31 March 2008
		£'000	£'000	£'000
	Revenue return total	312	97	(424)
	Capital return total	(11,863)	18,289	12,315
	Total return	(11,551)	18,386	11,891
	Weighted average number of Ordinary shares in issue	50,511,165	51,534,682	51,952,760

6.

Dividends on equity shares No interim dividend has been declared in respect of either the six months ended 30 September 2008 or 30 September 2007. During the year ended 31 March 2008, the subsidiary company paid dividends of £160,000 to the parent company, and the net amount due to the parent company at the year end was £nil.

7.	Transaction costs During the period expenses were incurred in acquiring or disposing of investments classified as fair value though profit or loss. These have been expensed through capital and are included within gains/(losses) on investments in the Group Income Statement. The total costs were as follows:
		Six months ended	Six months ended	Year ended
		30 September 2008	30 September 2007	31 March 2008
		£'000	£'000	£'000
	Purchases	17	11	62
	Sales	30	12	64
		________	________	________
		47	23	126

		As at	As at	As at
		30 September 2008	30 September 2007	31 March 2008
8.	Analysis of Group capital reserve	£'000	£'000	£'000
	Capital reserve - realised	9,475	(952)	7,088
	Capital reserve - unrealised	12,726	40,990	26,976
		________	________	________
		22,201	40,038	34,064

9.	Net asset value per Ordinary share
	The basic net asset value per Ordinary share is based on a net asset value of £71,237,000 (30 September 2007 - £91,462,000; 31 March 2008 - £84,968,000) and on 46,309,458 (30 September 2007 and 31 March 2008 - 47,862,750) Ordinary shares, being the number of Ordinary shares in issue at the period end. The diluted net asset value per Ordinary share has been calculated by reference to the total number of Ordinary shares in issue at the period end and on the assumption that those Warrants which are not exercised at the period end, amounting to 12,760,682 Warrants as at 30 September 2008 (30 September 2007 and 31 March 2008 - 12,782,390), were exercised on the first day of the financial period at 100p per share, giving a total of 59,070,140 Ordinary shares (30 September 2007 and 31 March 2008 - 60,645,140).

10.

Publication of non-statutory accounts The financial information contained in this half-yearly financial report does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The financial information for the six months ended 30 September 2008 and 30 September 2007 have not been audited. The information for the year ended 31 March 2008 has been extracted from the latest published audited financial statements which have been filed with the Registrar of Companies. The report of the auditors on those accounts contained no qualification or statement under Section 237 (2) or (3) of the Companies Act 1985.

11.        The half-yearly financial report is available on the Company's website, www.newindia-trust.co.uk.  It will be posted to
             shareholders in December 2008, and copies will be available from the Secretaries.

Aberdeen Asset Management PLC

Secretaries

27 November 2008

 

END

 

 

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