TIDMANII
RNS Number : 5028T
Aberdeen New India Invest Trust PLC
25 November 2021
ABERDEEN NEW INDIA INVESTMENT TRUST PLC
Legal Entity Identifier (LEI): 549300D2AW66WYEVKF02
UNAUDITED HALF-YEARLY FINANCIAL REPORT FOR THE SIX MONTHSED 30
SEPTEMBER 2021
FINANCIAL HIGHLIGHTS
Share price total Net asset value Ongoing charges
return{A} total return{A} ratio{A}
Six months ended Six months ended As at 30 September
30 September 2021 +21.8% 30 September 2021 +19.0% 2021 1.06%
Year ended 31 March Year ended 31 March As at 31 March
2021 +65.6% 2021 +52.7% 2021 1.16%
MSCI India Index Discount to Net
total return{B} asset value{A}
Six months ended As at 30 September
30 September 2021 +23.4% 2021 11.5%
Year ended 31 March
2021 +59.1% As at 31 March 2021 13.6%
{A} Considered to be an Alternative Performance
Measure.
{B} Sterling adjusted.
Source: abrdn, Morningstar & Lipper
30 September 31 March 2021 % change
2021
Total shareholders' funds
(GBP'000) 435,375 366,106 + 18.9
Share price (mid-market) 660.00p 542.00p + 21.8
Net asset value per share 745.95p 627.05p + 19.0
Discount to net asset value{A} 11.5% 13.6%
Net gearing{A} 5.6% 5.8%
Ongoing charges ratio{A} 1.06% 1.16%
Rupee to Sterling exchange
rate 100.1 100.9 + 0.8
{A} Considered to be an Alternative Performance Measure.
PERFORMANCE
Total return (in Sterling terms) for six months ended 30
September 2021 and year ended 31 March 2021
Six months ended Year ended
30 September 2021 31 March 2021
% %
Share price{A} + 21.8 + 65.6
Net asset value{A} + 19.0 + 52.7
MSCI India Index (Sterling adjusted) + 23.4 + 59.1
{A} Considered to be an Alternative Performance Measure.
Source: abrdn, Morningstar and
Lipper.
Total return (in Sterling terms) for year(s) ended 30 September
2021
1 year 3 year 5 year 10 year
% return % return % return % return
Share price {A} + 51.7 + 53.0 + 73.3 + 210.8
Net asset value per Ordinary
Share {A} + 44.1 + 48.6 + 69.5 + 212.4
MSCI India Index (Sterling adjusted) + 47.4 + 56.8 + 80.3 + 179.8
{A} Considered to be an Alternative
Performance Measure.
Source: abrdn, Morningstar and Lipper
CHAIRMAN'S STATEMENT
Dear Shareholder
Overview
Looking at the upward trajectory of Indian equities in the half
year under review, it would be easy to overlook the challenges that
the nation has endured. The MSCI India Index advanced by 23.4% and
was among the best performing markets across Asia and the rest of
the world over this period. Several factors sustained the market's
momentum, including an improving situation regarding the pandemic
and growing confidence in the country's recovery. Healthy buying
interest from retail investors, aided by better access to
technology, further propelled share prices. Additionally, India,
given the quality of its private-sector enterprises, benefited as
investors rotated away from China
over worries around regulatory tightening across multiple
sectors there.
In this environment, the Company delivered a respectable
performance. Net asset value ("NAV") rose by 19.0%, while the share
price increased by 21.8%, though both were slightly behind the
benchmark's return. The bulk of the underperformance occurred
earlier in the period, when favourable economic newsflow drove a
rally in the share prices of steel companies, which the portfolio
does not hold. Meanwhile, the portfolio's financial holdings lagged
their higher-growth peers in the broader market. Such an outcome
was not entirely unexpected, however. Amid the recent bullish
sentiment, cyclical stocks outperformed the quality names that are
favoured by your Manager. However, it is worthwhile highlighting
that investing in quality does deliver over the longer term, with
the Company strongly outperforming the MSCI India Index over the
last ten years. It remains well ahead of the benchmark since its
inception.
With effect from April 2020, the Company (in common with other
investment companies) has been subject to both short and long term
capital gains tax in India on the growth in value of its investment
portfolio. Although this additional tax only becomes payable at the
point at which the underlying investments are sold and profits
crystallised, the Company must accrue for this additional cost
which is GBP9.5m for the six months ended 30 September 2021,
equivalent to a reduction in the NAV per share of 16.3p or
2.2%.
At the start of the period, India was still struggling with a
devastating Covid-19 surge, with cases exceeding 400,000 daily at
its peak. This not only extracted a massive human toll, but also
added immense strain on the healthcare system. Thankfully, things
now seem to be under control, with a meaningful ramp up in the pace
of vaccinations countrywide underpinning a corresponding decline in
infections.
However, asset prices proved much more resilient than during the
pandemic's first wave in 2020, with investors now looking forward
to a normalising economy. This was supported by the government's
decision not to impose a full lockdown, with states opting for more
limited curbs instead. Initially, these localised restrictions did
temper consumer spending and dampen manufacturing activity. But as
larger swathes of the country began to re-open, economic conditions
and investor confidence improved swiftly. Notably, upbeat signals
in the housing cycle, recovering capital spending, higher tax
collections from goods and services and rebounding factory activity
all point to an economy in the early stages of a recovery to
pre-pandemic levels.
Sentiment also received significant support from several policy
initiatives. Perhaps the highest profile of these was the National
Monetisation Pipeline (NMP) unveiled by the Finance Minister in
August. The government will lease out state-owned infrastructure
assets, including roads, railways, airports and power plants, to
private operators for a specified period. It then plans to reinvest
the returns into new infrastructure projects under the previously
announced National Infrastructure Pipeline. The programme does seem
promising at first glance. With the central government facing a
stretched fiscal position, the NMP provides access to additional
income streams to raise the capital required for new infrastructure
investment. It could also unlock efficiencies, particularly in
areas of asset management and maintenance. While some doubts
remain, it will be in the government's interest to appear impartial
to avoid criticisms that the programme benefits only certain
favoured parties. As is so often the case with India, execution
remains key.
There were also other policy changes aimed at specific sectors.
Among these was the formation of a "bad bank" to address the
perennial problem of bad debt among public sector lenders. The
institution will take on stressed assets from these lenders and
work with another entity to try and recover their value. This is
the latest measure aimed at tackling this issue, encompassing the
2016 Insolvency and Bankruptcy Code and 2018's bank
recapitalisation plan. If all goes well, this bad bank should help
clean up lenders' balance sheets and provide fresh liquidity, which
would bolster credit growth and support economic activity. Whether
it will be effective in tackling the root issue of poor lending
practices remains to be seen. In this regard, your Manager
continues to prefer better capitalised and more conservative
private sector banks. Elsewhere, the Cabinet approved a relief
package for the telecoms sector, including deferments of unpaid
dues and the removal of foreign investment limits. This is expected
to bolster the beleaguered telecoms providers which have been
embroiled in a long running price war since Jio entered the fray in
2016.
Taken together, all these factors do appear to point to an
improving investment landscape. Crucially, these trends are
increasingly reflected at the company level. Many businesses
adapted adequately to the latest round of restrictions having
learnt from their experiences in the initial outbreak. As a result,
corporate profits continued to rebound despite the tightened curbs,
with many companies forecasting better earnings growth ahead.
Additionally, after a prolonged period of caution, the managements
of these companies appear more willing to pursue strategic plans
for expansion.
The favourable conditions are, in turn, attracting more
companies to approach the market for new capital. This has enhanced
the depth and vibrancy of the investment universe, with many of
these coming from so-called "new economy" sectors, such as the
internet and e-commerce. The quality of these listings has also
improved and your Manager has taken advantage of the rich pipeline
to invest in several interesting names operating in some niche
areas. These include online delivery services platform Zomato,
affordable housing company Aptus Value Housing Finance and medical
group Vijaya Diagnostics Centre. The Manager's Report provides
further details of these and other portfolio changes, as well as
the Company's performance.
Environmental, Social and Governance
I am pleased to note that the Company was recently rated "A"
under the MSCI ESG Rating. This reflects well on your Investment
Manager's consistent efforts to engage with the companies held
within your Company's portfolio and efforts to drive improvements
on various issues. More details on your Manager's process can be
found in the Investment Manager's Report and Case Studies.
Gearing
As at 30 September 2021, the Company had drawn down fully its
GBP30 million two-year bank loan facility, due to expire in July
2022, which resulted in net gearing of 5.6% as compared to 5.8% as
at 31 March 2021 (GBP24 million drawn down). The ability to gear is
one of the advantages of the closed ended company structure and
your Manager continues to seek opportunities to deploy this
facility.
Board
The Board was pleased to announce the appointment of David
Simpson as a Director of the Company with effect from 1 November
2021 following a search conducted by an independent recruitment
consultancy.
David initially qualified as a solicitor before following a
career in corporate finance, which included seven years with
Barclays de Zoete Wedd and 15 years with KPMG, latterly as global
head of mergers and acquisitions.
David's interest in India derives from his previous career and
from his current role as a non-executive director of ITC Limited
("ITC"), a major listed Indian company capitalised at around GBP29
billion. ITC has a diversified presence in FMCG, hotels, packaging,
specialty paper and agri-business. ITC represented 2.9% of the
Company's total assets at 30 September 2021 and David has agreed
that he will recuse himself from all discussions regarding ITC to
avoid any potential conflict of interest.
Shareholder Communications
The Board encourages shareholders to visit the Company's website
(www.aberdeen-newindia.co.uk) or other virtual channels for the
latest information and access to podcasts and monthly
factsheets.
Discount
The Board continues to monitor actively the discount of the
Ordinary share price to the NAV per Ordinary share (including
income) and pursues a policy of selective buybacks of shares where
to do so, in the opinion of the Board, is in the best interests of
shareholders, whilst also having regard to the overall size of the
Company.
During the period under review, the discount to NAV narrowed
from 13.6% to 11.5% as at 30 September 2021 following the Company
buying back into treasury 20,000 Ordinary shares, resulting in
58,365,328 Ordinary shares with voting rights and an additional
704,812 shares in treasury. Between the period end and the date of
this Report a further 81,961 shares were bought back into treasury
resulting in 58,283,367 shares in issue with voting shares and
786,773 shares held in treasury.
The Board believes that a combination of strong long-term
performance and effective marketing should increase demand for the
Company's shares and reduce the discount to NAV at which they
trade, over time.
Reduction in Investment Management Fee
As set out in the Chairman's Statement for the year ended 31
March 2021, the Board reached agreement with abrdn that, with
effect from 1 April 2021, the management fee was reduced to 0.85%
of the Company's net assets up to GBP350m and 0.70% above net
assets of GBP350m. Previously, the fee was based on the Company's
total assets less current liabilities and was charged at 0.9% on
the first GBP350m and at 0.75% above GBP350m. This reduction
contributed to a fall in the ongoing charges ratio from 1.16% to
1.06% over the reporting period.
Outlook
India's prospects appear brighter given the tailwinds of a
stabilising pandemic situation amid a widening vaccine rollout and
the continued economic reopening. Nonetheless, some caution is
warranted in view of prevailing risks. A key issue that merits
monitoring is inflation. There are growing fears that rising food,
energy and raw material costs could amplify price pressures. This
could, in turn, thwart the demand recovery, weigh on companies'
profit margins and hamper the country's growth trajectory. Another
concern is that the central bank could begin to normalise its loose
monetary policy soon in line with other global peers. For now,
though, policymakers have given assurance that any moves will be
gradual. Of course, Covid-19 is still a concern, with experiences
of other regional countries showing how swiftly the virus can undo
previous successes in managing the virus. That said, businesses and
the government are much better equipped now to respond to further
sudden outbreaks.
On the whole, India's outlook appears promising. Apart from a
conducive macroeconomic backdrop, the long term attractions of the
market remain intact. Favourable demographics, with a young
population and rising income levels, should drive demand across
various segments. Government policy appears committed towards
addressing the nation's extensive infrastructure needs and
expanding opportunities in emerging areas, such as renewable
energy. Meanwhile, the recent infusion of high-tech "new economy"
businesses has injected excitement into the investment universe. As
always, the key is to identify the best of these opportunities that
will deliver sustainable long term returns. In this regard, your
Manager's eye for quality remains critical in ensuring that the
portfolio is exposed to these appealing themes through
fundamentally sound, well managed businesses. This should stand the
Company in good stead, enabling it to remain resilient in the face
of challenges while positioning it well for the future.
Hasan Askari
Chairman
24 November 2021
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.
Principal Risks and Uncertainties
The principal risks and uncertainties associated with the
Company are set out in detail on pages 14 to 16 of the Annual
Report for the year ended 31 March 2021, which is published on the
Company's website. These are not expected to change materially for
the remaining six months of the Company's financial year ending 31
March 2022 as they have not done for the period under review.
The risks may be summarised under the following headings:
-- Market risk
-- Foreign Exchange risk
-- Discount risk
-- Depositary risk
-- Financial and Regulatory risk
-- Gearing risk
-- Covid-19
The Board continued to assess the ongoing implications for the
Company of the spread of Covid-19, including the resilience of the
reporting and control systems in place for both the Manager and
other key service providers.
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 conscious of the principal risks and
uncertainties disclosed on pages 14 to 16 and in Note 17 to the
financial statements for the year ended 31 March 2021.
The Company has a two year, GBP30 million revolving credit
facility with Natwest Markets Plc (the "Facility") which was fully
drawn down at 30 September 2021. The Board has set limits for
borrowing and regularly reviews the level of any gearing and
compliance with banking covenants.
In advance of expiry of the Facility in July 2022, the Company
will enter into negotiations with its bankers. If acceptable terms
are available from the existing bankers, or any alternative, the
Company would expect to continue to access a facility. However,
should these terms not be forthcoming, any outstanding borrowing
would be repaid through the proceeds of equity sales.
The Directors' assessment of going concern also assumes that the
Ordinary resolution for the Company's continuation is passed by
shareholders at the next AGM of the Company in September 2022, 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.
After making enquiries, including a review of revenue forecasts,
the Directors have a reasonable expectation that the Company
possesses adequate resources to continue in operational existence
for the foreseeable future. Accordingly, they continue to adopt the
going concern basis of accounting in preparing the financial
statements.
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 has been prepared
in accordance with Financial Reporting Standard 104 (Interim
Financial Reporting);
-- the Half Yearly Board Report includes a fair review of the
information required by rule 4.2.7R of the Disclosure Guidance and
Transparency Rules (being an indication of important events that
have occurred during the first six months of the financial year and
their impact on the condensed set of Financial Statements and a
description of the principal risks and uncertainties for the
remaining six months of the financial year); and
-- the Half Yearly Board Report includes a fair review of the
information required by 4.2.8R of the Disclosure Guidance and
Transparency Rules (being related party transactions that have
taken place during the first six months of the financial year and
that have materially affected the financial position of the Company
during that period; and any changes in the related party
transactions described in the last Annual Report that could do
so).
The Half Yearly Financial Report for the six months ended 30
September 2021 comprises the Interim Board Report, including the
Statement of Directors' Responsibilities, and a condensed set of
Financial Statements.
For and on behalf of the Board
Hasan Askari
Chairman
24 November 2021
INVESTMENT MANAGER'S REPORT
Performance
The Company's NAV rose by 19.0% in sterling terms over the 6
months ended 30 September 2021, compared to the 23.4% gain by the
MSCI India benchmark. Meanwhile, the Company's share price advanced
by 21.8% and its discount to NAV narrowed from 13.6% to 11.5%.
Overview
Indian equities displayed remarkable resilience during the six
months to September despite the continued spectre of the pandemic
and rose even faster than most of their emerging and developed
market peers. The stock market built on the steep rally last year,
pausing only when the second wave of the coronavirus swept the
country. Sentiment also found support in steady corporate earnings,
as companies adapted better to the resurgence of infection
caseloads. Impact from the second wave was softened by having
targeted mobility restrictions instead of the blanket lockdown in
the first Covid-19 crisis that hobbled the economy last year.
Market gains were across the board, led by a buoyant real estate
sector that led to property stocks rising by almost 50% over the
review period. The housing turnaround came after a sharp decline in
home sales and residential construction in the past few years. With
the central bank retaining an accommodative policy stance and
leading lenders cutting mortgage rates, homes turned more
affordable owing to lower interest rates, rising incomes and
smaller unit sizes. Stamp-duty rebates in some states also
propelled a wider housing recovery. This, plus the
larger-than-expected stimulus to infrastructure spending, was
positive for both materials companies and lenders.
Communications services stocks also did well, as foreign
ownership limits were relaxed. In addition, network operators were
allowed to defer payment of telecommunications spectrum fees and
other liabilities by four years. Elsewhere, technology services
providers continued to be buoyed by healthy demand for cloud
migration and business transformation needs, with the shift to
work-from-home and advancements in high-performance computing
accelerating this trend.
Portfolio review
The Company's holdings in real estate, technology and consumer
discretionary sectors supported returns, though the portfolio
overall lagged the benchmark due to a lack of exposure to steel and
energy.
Property stocks were supported by still-low interest rates and
hopes of a faster economic recovery in the post-pandemic world.
Among the top contributors were property developers, Godrej
Properties and Prestige Estates, as well as Piramal Enterprises'
housing-finance business. Piramal Enterprise's share price also
reacted well to the de-merger and separate listing of its
pharmaceutical business as this created value for all shareholders.
In the technology services sector, Mphasis contributed on the back
of record deal wins and bumper earnings. In the consumer
discretionary sector, Zomato, which we recently initiated,
contributed to performance after a strong initial public offer
(IPO) debut. Zomato is an online food market featuring restaurant
menus and reviews from countries around the world. The food
delivery company has been gaining market share in a fast-growing
sector. The Company benefited from less exposure to the automobile
sector that was impacted by the semiconductor shortage.
The Company tends to avoid businesses that are cyclical,
dependent on government policies and with balance sheets that are
highly leveraged. During this period, China's removal of steel
export rebates and steady global demand supported price hikes,
leading to a strong rally in steel stocks. Cement, instead, remains
our preferred exposure to infrastructure spending. Although
Ultratech Cement detracted during the period, it has contributed
positively to the Company's year-to-date returns as it has
demonstrated strong pricing power amid rising demand from housing
and infrastructure investments. We are also encouraged by the
company's initiatives to tackle carbon emissions, using
science-based targets to align with global efforts towards carbon
neutrality. Elsewhere in the energy sector, Aegis Logistics' share
price retreated following a good run when its liquefied petroleum
gas (LPG) terminalling business was hampered by cyclones and
Covid-19 disruptions delayed its growth projects. We believe these
are one-off events that do not affect longer-term demand
trends.
Separately, the Company's bank holdings lagged the lenders that
delivered faster growth. We believe that our holdings
HDFC, HDFC Bank and Kotak Mahindra are well-positioned with
their strong, low-cost deposit franchise and digital capabilities
to accelerate growth as confidence in the economic outlook
improves.
In key portfolio changes, we participated in several IPOs as the
number of companies seeking a public listing accelerated in 2021.
The record-breaking local stock indices enticed a slew of
promising, good quality companies to tap the market for funds and
the IPO pipeline remains exciting for the year ahead. This also
reflects the growing breadth and depth of Indian businesses as well
as the burgeoning start-up ecosystem. Besides Zomato, we also
participated in Aptus Value Housing Finance's share float. Aptus
has a firm foothold in South India and provides exposure to the
country's underpenetrated affordable housing sector.
Elsewhere, we initiated ReNew Energy Global, Vijaya Diagnostic
Centre and IndiaMart InterMesh. ReNew generates electricity from a
mix of wind, solar, and more recently hydropower. Our research
concluded that it has both scale and clarity around its pipeline.
More importantly, the power producer is funded fully for its
capacity build-out. We also like that its management has shown
discipline in bidding at renewable energy auctions. Vijaya is the
market-leading healthcare diagnostics player in South India,
focused on the consumer segment. IndiaMart is the dominant,
subscription-based online business-to-business platform for
industrial and office supplies.
Against these, we sold Bandhan Bank on concerns over stress
faced by the micro-financing segment if the pandemic continued to
drag on. We also participated in the IPO of Clean Science &
Technology but exited the specialty chemicals player following its
stellar debut.
Outlook
Confidence appears to be returning across industries. As
vaccinations cross the billion mark, there is less fear of
super-spreader events spoiling a surge in consumption in the
upcoming festive season. Policy reform is also picking up pace,
helped by an improving fiscal position. With better job creation
and government schemes to attract more manufacturing, the economy
could be in the early stages of a capital expenditure investment
cycle. Meanwhile, we are keeping an eye on inflation, particularly
in view of the recent spike in the oil price. We are confident that
the portfolio holdings' pricing power and ability to sustain
margins provide a measure of comfort.
Over the longer term, India remains alluring to investors. The
domestic market benefits from a rapidly growing middle-class that
is increasingly affluent. Digital adoption has accelerated and we
expect to see more listed investment opportunities in the
new-economy space. India is home to many of Asia's most successful
companies that have been tested by prior economic crises. We remain
highly selective in our portfolio positioning, preferring
high-quality companies with robust balance sheets and led by good
management that helps them weather storms better than most. We
remain focused on identifying companies with clear prospects for
earnings growth, a secure competitive position, and prudent capital
management. These companies should deliver sustainable returns over
time.
Kristy Fong, Senior Investment Director
James Thom, Senior Investment Director
abrdn Asia Limited
24 November 2021
INVESTMENT CASE STUDIES
Azure Power - tapping solar to meet India's growing need for
renewable energy
Founded in 2008, Azure Power started its journey in 2009 by
building India's first private utility-scale solar plant. This was
a 2 megawatt (MW) plant in a small village in Awan, Punjab. The
solar farm operator has since chalked up other firsts along the
way. In 2016, Azure became the first Indian energy company to be
listed on the New York Stock Exchange. A year later, it issued
India's first solar green bond.
Today, Azure is one of India's largest renewable power
companies, selling affordable and reliable solar power on long-term
fixed price contracts to its customers. It has a solar asset base
of over 2 gigawatt (GW) of operational capacity and about 5GW of
capacity under construction and in the pipeline, which will
transform the scale of the business and drive significant growth
over the medium term.
The company is backed by blue chip institutional and
multilateral shareholders and has a high quality management team,
which gives us confidence that it will successfully execute its
business plan. It also has first-comer advantage, having developed
significant operational expertise and regional knowledge. This is
reflected in its good track record of delivering high quality
projects.
The Investment Manager sees Azure benefiting from India's
growing economy and demand for electricity. Its business is also
aligned with the policy push for green energy. Solar is the
cheapest form of electricity and there is significant untapped
potential as solar accounts for less than 10% of India's installed
electricity generation capacity. Azure sells solar electricity
generated by its plants to the grid. With the overall power
consumption growing in India, Azure is helping meet the incremental
energy demand with green energy, as the growing penetration of
renewables would reduce the need for new coal plants. With several
gigawatts of solar projects in the pipeline, Azure will contribute
towards reducing carbon emissions and thus mitigating climate
change.
More broadly, India still relies heavily on fossil fuels for its
energy generation, with fossil fuels accounting for around three
quarters of primary energy demand. It is the world's third largest
carbon emitter, accounting for about 7% of global CO2 emissions
with the coal heavy power sector being a major contributor to
India's carbon footprint (source: India Renewables - A Primer, 27
July 2021, Bernstein). However, there has been a ramp-up in the
installation of renewable energy in recent years. India is now the
world's fourth largest renewable energy market with 80GW of wind
and solar capacity, after China, the US and Germany (source:
Bernstein). The government is going even further, unveiling
aggressive targets to increase the renewable capacity by five
times, through adding 450GW of non-hydro renewable electricity
capacity by 2030.
Aptus Value Housing Finance - helping the lower paid own their
dream home
In India, about three homes are built for every 1,000 people
every year, falling below the required rate of five homes per 1,000
people (source: India Brand Equity Foundation) to adequately meet
housing needs. As a result, the country faces a housing shortage
that is set to increase to 100 million homes by 2022. This crunch
is more pronounced in rural areas, with the economically weaker
sections and low income groups making up 95% of the housing
shortage (source: Aptus Value Housing Finance Annual Report
2020-2021). With brisk population growth, especially in urban
areas, the
situation could worsen.
The central government is addressing this. It aims to build 20
million affordable houses by 2022, launching various initiatives
including the Housing for All scheme and the Smart Cities programme
to support ownership via interest subsidies and other measures.
Ensuring adequate housing remains a daunting challenge, with a
stark shortage in Uttar Pradesh, Andhra Pradesh and
Maharashtra.
Given the strong policy support for affordable housing,
increasing urbanisation along with rising incomes, demand for
housing is expected to rise, and along with that home financing.
The Investment Manager regards the Company's holding in Aptus Value
Housing Finance as being among those well positioned to be a key
beneficiary, while helping to mitigate the overall housing
shortage, especially in the rural areas.
Aptus is a housing finance company that focuses entirely on
serving low and middle income self-employed customers in the rural
and semi-urban parts of India, with a strong foothold in South
India. Of its overall loans, home loans make up 52%, while business
loans to small business entrepreneurs and non-housing loans, such
as insurance loans, account for the rest.
The company's services help the lower income group realise their
dream of owning a home, improve the standard of living of its
customers and bring them into the financial mainstream. Aptus
operates mostly in rural and semi-urban markets where bigger
players have less presence. The low income group are usually
excluded by banks or large financial institutions because they do
not have the credit history or formal income proof to assess their
creditworthiness.
The Investment Manager is bullish on Aptus' prospects. The
industry has ample opportunity for growth and Aptus has superior
metrics relative to its peers in terms of asset quality, loan
yields and return ratios. Management is conservative and has kept a
robust balance sheet throughout its history.
The Investment Manager also likes that the company is clear
about where it wants to go, with its mission being "to be a leader
in the affordable housing finance segment and make an impact in the
lives of a million people by 2025".
INVESTMENT PORTFOLIO
As at 30 September 2021
Valuation Total assets
Company Sector GBP'000 %
----------------------------------------- ------------------------ ---------- -------------------
Housing Development Finance Corporation Financials 45,783 9.8
Infosys Information Technology 45,754 9.8
Tata Consultancy Services Information Technology 39,954 8.6
Hindustan Unilever Consumer Staples 31,016 6.7
Kotak Mahindra Bank Financials 21,483 4.6
UltraTech Cement Materials 19,667 4.2
HDFC Bank Financials 17,102 3.7
Asian Paints Materials 15,912 3.4
SBI Life Insurance Financials 14,672 3.2
Godrej Properties Real Estate 14,540 3.1
----------------------------------------- -------------------
Top ten investments 265,883 57.1
------------------------------------------------------------------- ---------- -------------------
Axis Bank Financials 13,609 2.9
ITC Consumer Staples 13,387 2.9
Communications
Bharti Airtel Services 13,178 2.8
MphasiS Information Technology 12,523 2.7
Container Corporation of India Industrials 11,869 2.6
Prestige Estates Projects Real Estate 9,915 2.1
Fortis Healthcare Healthcare 9,051 2.0
Power Grid Corporation of India Utilities 9,009 1.9
Maruti Suzuki India Consumer Discretionary 8,912 1.9
Larsen & Toubro Industrials 8,819 1.9
----------------------------------------- -------------------
Top twenty investments 376,155 80.8
------------------------------------------------------------------- ---------- -------------------
Nestlé India Consumer Staples 8,523 1.8
Gujarat Gas Utilities 7,755 1.7
Communications
Affle India Services 7,703 1.7
Piramal Enterprises Financials 7,300 1.6
Crompton Greaves Consumer Electricals Consumer Discretionary 7,175 1.5
Syngene International Health Care 6,389 1.4
Godrej Consumer Products Consumer Staples 6,072 1.3
Sanofi India Health Care 5,299 1.1
Aegis Logistics Energy 5,171 1.1
Jyothy Laboratories Consumer Staples 5,127 1.1
----------------------------------------- -------------------
Top thirty investments 442,669 95.1
------------------------------------------------------------------- ---------- -------------------
Communications
Info Edge Services 5,095 1.1
ICICI Prudential Life Insurance Financials 4,908 1.1
Azure Power Global Utilities 3,981 0.9
Biocon Health Care 3,851 0.8
Zomato Consumer Discretionary 3,613 0.8
Godrej Agrovet Consumer Staples 3,486 0.7
Bosch Consumer Discretionary 3,425 0.7
Shree Cement Materials 3,393 0.7
Vijaya Diagnostic Centre Health Care 2,598 0.6
IndiaMart Consumer Discretionary 2,378 0.5
----------------------------------------- -------------------
Top forty investments 479,397 103.0
Aptus Value Housing Finance Financials 1,818 0.4
ReNew Power Utilities 904 0.2
Total portfolio investments 482,119 103.6
------------------------------------------------------------------- ---------- -------------------
Net current assets (before deducting
prior charges){A} (16,744) (3.6)
------------------------------------------------------------------- -------------------
Total assets{A} 465,375 100.0
------------------------------------------------------------------- ---------- -------------------
{A} Excluding loan balances.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
Six months ended Six months ended
30 September 2021 30 September 2020
(unaudited) (unaudited)
------------------------------- -------------------------------
Revenue Capital Total Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------ ------ --------- --------- --------- --------- --------- ---------
Income
Income from investments
and other income 3 2,936 - 2,936 2,946 - 2,946
Gains on investments
held at fair value through
profit or loss - 78,990 78,990 - 66,671 66,671
Currency losses - (64) (64) - (236) (236)
------------------------------ ------ --------- --------- --------- --------- --------- ---------
2,936 78,926 81,862 2,946 66,435 69,381
------------------------------ ------ --------- --------- --------- --------- --------- ---------
Expenses
Investment management
fees (1,637) - (1,637) (1,275) - (1,275)
Administrative expenses (441) - (441) (439) - (439)
------------------------------ ------ --------- --------- --------- --------- --------- ---------
Profit before finance
costs and taxation 858 78,926 79,784 1,232 66,435 67,667
Finance costs (134) - (134) (215) - (215)
------------------------------
Profit before taxation 724 78,926 79,650 1,017 66,435 67,452
Taxation 4 (303) (9,966) (10,269) (295) (4,900) (5,195)
------------------------------ ------ --------- --------- --------- --------- --------- ---------
Profit for the period 421 68,960 69,381 722 61,535 62,257
------------------------------ ------ --------- --------- --------- --------- --------- ---------
Return per Ordinary
share (pence) 5 0.72 118.13 118.85 1.23 104.86 106.09
------------------------------ ------ --------- --------- --------- --------- --------- ---------
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".
The total columns of this statement represent the Condensed Statement
of Comprehensive Income, prepared in accordance with IFRS. The revenue
and capital 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 of the profit/(loss) and total comprehensive income is attributable
to the equity holders of Aberdeen New India Investment Trust PLC. There
are no non-controlling interests.
The accompanying notes are an integral part of these financial statements.
CONDENSED STATEMENT OF COMPREHENSIVE INCOME (Cont'd)
Year ended
31 March 2021
(audited)
Revenue Capital Total
Notes GBP'000 GBP'000 GBP'000
------------------------------------------- ------ --------- --------- ---------
Income
Income from investments and other
income 3 4,517 - 4,517
Gains on investments held at fair
value through profit or loss - 140,538 140,538
Currency losses - (404) (404)
------------------------------------------- ------ --------- --------- ---------
4,517 140,134 144,651
------------------------------------------- ------ --------- --------- ---------
Expenses
Investment management fees (2,801) - (2,801)
Administrative expenses (821) - (821)
------------------------------------------- ------ --------- --------- ---------
Profit before finance costs and taxation 895 140,134 141,029
Finance costs (334) - (334)
------------------------------------------- ---------
Profit before taxation 561 140,134 140,695
Taxation 4 (452) (13,624) (14,076)
------------------------------------------- ------ --------- --------- ---------
Profit for the period 109 126,510 126,619
------------------------------------------- ------ --------- --------- ---------
Return per Ordinary share (pence) 5 0.19 216.06 216.25
------------------------------------------- ------ --------- --------- ---------
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".
The total columns of this statement represent the Condensed Statement
of Comprehensive Income, prepared in accordance with IFRS. The revenue
and capital 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 of the profit/(loss) and total comprehensive income is attributable
to the equity holders of Aberdeen New India Investment Trust PLC. There
are no non-controlling interests.
The accompanying notes are an integral part of these financial statements.
CONDENSED BALANCE SHEET
As at As at As at
30 September 30 September 31 March
2021 2020 2021
(unaudited) (unaudited) (audited)
Notes GBP'000 GBP'000 GBP'000
Non-current assets
Investments held at fair value
through profit or loss 482,119 328,969 401,669
---------------------------------- ------ ------------- ------------- ----------
Current assets
Cash at bank 5,655 3,948 2,588
Receivables 1,297 557 530
---------------------------------- ------------- ------------- ----------
Total current assets 6,952 4,505 3,118
---------------------------------- ------ ------------- ------------- ----------
Current liabilities
Bank loan 8 (30,000) (24,000) (24,000)
Other payables (564) (1,384) (1,038)
---------------------------------- ------ ------------- ------------- ----------
Total current liabilities (30,564) (25,384) (25,038)
---------------------------------- ------ ------------- ------------- ----------
Net current liabilities (23,612) (20,879) (21,920)
---------------------------------- ------ ------------- ------------- ----------
Non-current liabilities
Deferred tax liability on Indian
capital gains 4 (23,132) (4,919) (13,643)
---------------------------------- ----------
Net assets 435,375 303,171 366,106
---------------------------------- ------ ------------- ------------- ----------
Share capital and reserves
Ordinary share capital 9 14,768 14,768 14,768
Share premium account 25,406 25,406 25,406
Special reserve 12,516 13,470 12,628
Capital redemption reserve 4,484 4,484 4,484
Capital reserve 377,671 244,191 308,711
Revenue reserve 530 852 109
---------------------------------- ------------- ------------- ----------
Equity shareholders' funds 435,375 303,171 366,106
---------------------------------- ------ ------------- ------------- ----------
Net asset value per Ordinary
share (pence) 11 745.95 517.73 627.05
---------------------------------- ------ ------------- ------------- ----------
The accompanying notes are an integral part of
these financial statements.
CONDENSED STATEMENT OF CHANGES IN EQUITY
Six months ended 30 September
2021 (unaudited)
Share Capital
Share premium Special redemption Capital Revenue
capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ----------- --------- --------- ---------
Balance at 31 March 2021 14,768 25,406 12,628 4,484 308,711 109 366,106
Profit for the period - - - - 68,960 421 69,381
Buyback of share capital
to treasury - - (112) - - - (112)
---------
Balance at 30 September
2021 14,768 25,406 12,516 4,484 377,671 530 435,375
--------- --------- --------- ----------- --------- --------- ---------
Six months ended 30 September
2020 (unaudited)
Share Capital
Share premium Special redemption Capital Revenue
capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ----------- --------- --------- ---------
Balance at 31 March 2020 14,768 25,406 14,139 4,484 182,656 130 241,583
Profit for the period - - - - 61,535 722 62,257
Buyback of share capital
to treasury - - (669) - - - (669)
---------
Balance at 30 September
2020 14,768 25,406 13,470 4,484 244,191 852 303,171
--------- --------- --------- ----------- --------- --------- ---------
Year ended 31 March 2021
(audited)
Share Capital
Share premium Special redemption Capital Revenue
capital account reserve reserve reserve reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------- --------- --------- ----------- --------- --------- ---------
Balance at 31 March 2020 14,768 25,406 14,139 4,484 182,656 130 241,583
Profit for the year - - - - 126,510 109 126,619
Buyback of share capital
to treasury - - (1,511) - - - (1,511)
Equity dividend paid - - - - (455) (130) (585)
---------
Balance at 31 March 2021 14,768 25,406 12,628 4,484 308,711 109 366,106
--------- --------- --------- ----------- --------- --------- ---------
The Special reserve and the Revenue reserve represent the amount of the
Company's distributable reserves.
CONDENSED CASH FLOW STATEMENT
Six months Six months Year ended
ended ended
30 September 30 September 31 March
2021 2020 2021
(unaudited) (unaudited) (audited)
GBP'000 GBP'000 GBP'000
-------------------------------------------- ------------- ------------- -----------
Cash flows from operating activities
Dividend income received 2,515 2,772 4,517
Investment management fee paid (2,119) (1,013) (2,427)
Overseas withholding tax (646) (295) (937)
Other cash expenses (420) (707) (812)
-------------------------------------------- ------------- ------------- -----------
Cash (outflow)/inflow from operations (670) 757 341
Interest paid (149) (190) (302)
-------------------------------------------- ------------- ------------- -----------
Net cash (outflow)/inflow from operating
activities (819) 567 39
Cash flows from investing activities
Purchase of investments (35,968) (36,055) (69,103)
Sales of investments 34,507 37,744 71,555
Indian capital gains tax on sales (477) - -
Indian capital gains tax on sales refunded - 19 19
-------------------------------------------- -----------
Net cash (outflow)/inflow from investing
activities (1,938) 1,708 2,471
-------------------------------------------- ------------- ------------- -----------
Cash flows from financing activities
Equity dividend paid - - (585)
Buyback of shares (112) (669) (1,511)
Drawdown/(repayment) of loan 6,000 (6,000) (6,000)
-------------------------------------------- -----------
Net cash inflow/(outflow) from financing
activities 5,888 (6,669) (8,096)
-------------------------------------------- ------------- ------------- -----------
Net increase/(decrease) in cash and
cash equivalents 3,131 (4,394) (5,586)
Cash and cash equivalents at the start
of the period 2,588 8,578 8,578
Effect of foreign exchange rate changes (64) (236) (404)
-------------------------------------------- ------------- -----------
Cash and cash equivalents at the end
of the period 5,655 3,948 2,588
-------------------------------------------- ------------- ------------- -----------
There were no non-cash transactions during the period (six months ended
30 September 2021 - GBPnil; year ended 31 March 2021 - GBPnil).
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.
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
2021 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.
3. Income
Six months ended Six months ended Year ended
30 September 30 September
2021 2020 31 March 2021
GBP'000 GBP'000 GBP'000
--------------------- ------------------------------- ------------------------------- -----------------------
Income from
investments
Overseas dividends 2,936 2,946 4,517
-------------------------- ------------------------------- ------------------------------- -----------------------
Total income 2,936 2,946 4,517
-------------------------- ------------------------------- ------------------------------- -----------------------
4. Taxation
Six months ended Six months ended Year ended
30 September 2021 30 September 31 March 2021
2020
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
(a) Analysis of
charge for
the period
Indian capital
gains tax charge
on sales - 477 477 - - - - - -
Indian capital
gains tax charge
refunded on
sales - - - - (19) (19) - (19) (19)
Overseas taxation 303 - 303 295 - 295 452 - 452
Total current
tax charge
for the period 303 477 780 295 (19) 276 452 (19) 433
Movement in
deferred tax
liability on
Indian capital
gains - 9,489 9,489 - 4,919 4,919 - 13,643 13,643
--------------
Total tax
charge for
the period 303 9,966 10,269 295 4,900 5,195 452 13,624 14,076
------------------------------- --------- --------- --------- --------- ----------- ----------- ----------- ------------ --------------
The Company is liable to Indian capital gains tax under Section 115
AD of the Indian Income Taxes Act 1961.
On 1 April 2018, the Indian Government withdrew an exemption from
capital gains tax on investments held for twelve months or longer.
The Company has recognised a deferred tax liability of GBP9,489,000
(30 September 2020 - GBP4,919,000; 31 March 2021 - GBP13,643,000)
on capital gains which may arise if Indian investments are sold.
On 1 April 2020, the Indian Government withdrew an exemption from
withholding tax on dividend income. Dividends are received net of
20% withholding tax and an additional charge of 4%. A further surcharge
of either 2% or 5% is applied if the receipt exceeds a certain threshold.
Of this total charge, 10% of the withholding tax is irrecoverable
with the remainder being shown in the Condensed Statement of Financial
Position as an asset due for reclaim.
(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 Statement
of Comprehensive Income as follows:
Six months ended Six months ended Year ended
30 September 2021 30 September 2020 31 March 2021
Revenue Capital Total Revenue Capital Total Revenue Capital Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Profit before
tax 724 78,926 79,650 1,017 66,435 67,452 561 140,134 140,695
------------------------------- --------- --------- --------- -------------- ----------- ----------- ------------ ----------- ---------
UK corporation
tax on profit
at the standard
rate of 19% 138 14,996 15,134 193 12,623 12,816 107 26,625 26,732
Effects of:
Gains on investments
held at fair
value through
profit or loss
not taxable - (15,008) (15,008) - (12,667) (12,667) - (26,702) (26,702)
Currency losses
not taxable - 12 12 - 44 44 - 77 77
Deferred tax
not recognised
in respect
of tax losses 419 - 419 362 - 362 750 - 750
Expenses not
deductible
for tax purposes 1 - 1 5 - 5 1 - 1
Indian capital
gains tax charged/(refunded)
on sales - 477 477 - (19) (19) - (19) (19)
Movement in
deferred tax
liability on
Indian capital
gains - 9,489 9,489 - 4,919 4,919 - 13,643 13,643
Irrecoverable
overseas withholding
tax 303 - 303 295 - 295 452 - 452
Non-taxable
dividend income (558) - (558) (560) - (560) (858) - (858)
---------
Total tax charge 303 9,966 10,269 295 4,900 5,195 452 13,624 14,076
------------------------------- --------- --------- --------- -------------- ----------- ----------- ------------ ----------- ---------
At 30 September 2021, the Company has surplus management expenses
and loan relationship debits with a tax value of GBP6,375,000 (30
September 2020 - GBP4,035,000; 31 March 2021 - GBP4,424,000) based
on enacted tax rates, in respect of which a deferred tax asset has
not been recognised. No deferred tax asset has been recognised because
the Company is not expected to generate taxable income in the future
in excess of the deductible expenses of those future periods. Therefore,
it is unlikely that the Company will generate future taxable revenue
that would enable the existing tax losses to be utilised.
5. Return per
Ordinary
share
Six months Six months Year ended
ended ended
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
----------------------------- ------------------------------------------- ---------------------------
Based on
the
following
figures:
Revenue return 421 722 109
Capital return 68,960 61,535 126,510
---------------------------
Total return 69,381 62,257 126,619
---------------- ----------------------------- ------------------------------------------- ---------------------------
Weighted 58,373,678 58,680,999 58,551,911
average number
of
Ordinary
shares in
issue
6. Dividends on equity shares. In the prior period, the Board of Aberdeen
New India Investment Trust PLC (the "Company") announced an interim
dividend in respect of the year ended 31 March 2020 of 1.0 pence per
share on the Company's Ordinary shares. This interim dividend, which
was paid on 30 October 2020 to shareholders on the register on 2 October
2020 (ex-dividend date 1 October 2020), was declared, on an exceptional
basis, to enable the Company to maintain its investment trust status
in accordance with HMRC requirements. The minimum required net revenue
distribution of approximately 0.22 pence per Ordinary share was supplemented
by capital reserves in accordance with the Company's revised Articles
of Association, which were approved by shareholders at the Annual
General Meeting on 23 September 2020.
7. Transaction costs. During the year, expenses were incurred in acquiring
or disposing of investments classified as fair value through profit
or loss. These have been expensed through the capital column of the
Statement of Comprehensive Income, and are included within gains
on investments at fair value through profit or loss in the Statement
of Comprehensive Income. The total costs were as follows:
Six months Six months Year ended
ended ended
30 September 30 September 31 March
2021 2020 2021
GBP'000 GBP'000 GBP'000
Purchases 41 61 109
Sales 52 64 120
---------------------------------- -------------- ------------
93 125 229
---------------------------------- -------------- ------------
The above transaction costs are calculated in line with the AIC SORP.
The transaction costs in the Company's Key Information Document,
provided by the Manager, are calculated on a different basis and
in line with the Packaged Retail Investment and Insurance Products
("PRIIPs") regulations.
8. Bank loan. In July 2020, the Company entered into a two year GBP30
million multi-currency revolving credit facility with Natwest Markets
Plc. At 30 September 2021 GBP30 million (30 September 2020 - GBP24
million; 31 March 2021 - GBP24 million) had been drawn down at an
all-in interest rate of 0.95488% on GBP28 million and 0.95268% on
GBP2 million, which rolled over on 10 November 2021. At the date
of this report the Company had drawn down GBP30 million at an all-in
interest rate of 1.0135%.
9. Ordinary share capital. During the period 20,000 Ordinary shares
were bought back by the Company for holding in treasury (period to
30 September 2020 - 163,277; year to 31 March 2021 - 335,653), at
a cost of GBP112,000 (30 September 2020 - GBP669,000; 31 March 2021
- GBP1,511,000). As at 30 September 2021 there were 58,365,328 (30
September 2020 - 58,557,704; 31 March 2021 - 58,385,328) Ordinary
shares in issue, excluding 704,812 (30 September 2020 - 512,436;
31 March 2021 - 684,812) Ordinary shares held in treasury.
Following the period end a further 81,961 Ordinary shares were bought
back for treasury by the Company at a cost of GBP526,000 resulting
in there being 58,283,367 Ordinary shares in issue, excluding 786,773
Ordinary shares held in treasury at the date this Report was approved.
10. Analysis of changes in net
debt
At At
31 March Currency Cash 30 September
2021 differences flows 2021
GBP'000 GBP'000 GBP'000 GBP'000
Cash and short term
deposits 2,588 (64) 3,131 5,655
Debt due within one year (24,000) - (6,000) (30,000)
-------------------
(21,412) (64) (2,869) (24,345)
------------------ ------------------------- ---------------- -------------------
At At
31 March Currency Cash 31 March
2020 differences flows 2021
GBP'000 GBP'000 GBP'000 GBP'000
Cash and short term
deposits 8,578 (404) (5,586) 2,588
Debt due within one year (30,000) - 6,000 (24,000)
-------------------
(21,422) (404) 414 (21,412)
------------------ ------------------------- ---------------- -------------------
A statement reconciling the movement in net funds to the net cash
flow has not been presented as there are no differences from the
above analysis.
11. Net asset value per Ordinary share. The net asset value per Ordinary
share is based on a net asset value of GBP435,375,000 (30 September
2020 - GBP303,171,000; 31 March 2021 - GBP366,106,000) and on 58,365,328
(30 September 2020 - 58,557,704 and 31 March 2021 - 58,385,328) Ordinary
shares, being the number of Ordinary shares in issue at the period
end.
12. 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
Statement of Financial Position are grouped into the fair value hierarchy
at the Statement of Financial Position date are as follows:
Level 1 Level 2 Level 3 Total
As at 30 September 2021 Note GBP'000 GBP'000 GBP'000 GBP'000
Financial assets at fair
value through profit or loss
Quoted equities a) 482,119 - - 482,119
---------
Net fair value 482,119 - - 482,119
---------- ----------------------- -------------------- ---------
Level 1 Level 2 Level 3 Total
As at 30 September 2020 Note GBP'000 GBP'000 GBP'000 GBP'000
Financial assets at fair
value through profit or loss
Quoted equities a) 328,969 - - 328,969
---------
Net fair value 328,969 - - 328,969
---------- ----------------------- -------------------- ---------
Level 1 Level 2 Level 3 Total
As at 31 March 2021 Note GBP'000 GBP'000 GBP'000 Total
Financial assets at fair
value through profit or loss
Quoted equities a) 401,669 - - 401,669
---------
Net fair value 401,669 - - 401,669
---------- ----------------------- -------------------- ---------
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.
13. Related party transactions. The Company has an agreement with Aberdeen
Standard Fund Managers Limited (the "Manager") for the provision
of management, secretarial, accounting and administration services
and for carrying out promotional activity services in relation to
the Company.
During the period, the management fee was payable monthly in arrears
and was based on 0.85% per annum up to GBP350m and 0.7% thereafter
of the net assets of the Company (period ended 30 September 2020
and year ended 31 March 2021 the management fee payable was based
on 0.9% per annum up to GBP350m and 0.75% per annum thereafter of
the net assets of the Company). The management agreement is terminable
by either the Company or the Manager on six months' notice. The amount
payable in respect of the Company for the period was GBP1,637,000
(six months ended 30 September 2020 - GBP1,275,000; year ended 31
March 2021 - GBP2,801,000) and the balance due to the Manager at
the period end was GBP294,000 (period end 30 September 2020 - GBP664,000;
year end 31 March 2021 - GBP775,000). All investment management fees
are charged 100% to the revenue column of the Statement of Comprehensive
Income.
The Company has an agreement with the Manager for the provision of
promotional activities in relation to the Company's participation
in the abrdn Investment Trust Share Plan and ISA. The total fees
paid and payable under the agreement during the period were GBP83,000
(six months ended 30 September 2020 - GBP83,000; year ended 31 March
2021 - GBP166,000) and the balance due to the Manager at the period
end was GBP83,000 (period ended 30 September 2020 - GBP83,000; year
ended 31 March 2021 - GBP42,000).
14. 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.
15. 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 2021 and 30 September 2020 has not
been audited.
The information for the year ended 31 March 2021 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.
16. Approval. This Half-Yearly Report was approved by the Board on
24 November 2021.
ALTERNATIVE PERFORMANCE MEASURES
Alternative performance measures are numerical measures of the Company's
current, historical or future performance, financial position or cash
flows, other than financial measures defined or specified in the applicable
financial framework. The Company's applicable financial framework includes
International Financial Reporting Standards ("IFRS") and the Statement
of Recommended Practice issued by the Association of Investment Companies
("AIC"). The Directors assess the Company's performance against a range
of criteria which are viewed as particularly relevant for closed-end
investment companies.
Total return . NAV and share price total returns show how the NAV and
share price have performed over a period of time in percentage terms,
taking into account both capital returns and dividends paid to shareholders.
NAV total return assumes that dividends are reinvested at NAV when the
shares are quoted ex-dividend. Share price total return assumes that
dividends are reinvested at the mid-market price when the shares are
quoted ex-dividend.
The tables below provide information relating to the NAVs and share prices
of the Company on the dividend reinvestment dates during the six months
ended 30 September 2021 and the year ended 31 March 2021. A dividend
of 1.0p was paid during the year ended 31 March 2021.
Share
Six months ended 30 September 2021 NAV price
-------------------------------------------- ---------- -------------------------------- --------------------------
31 March 2021 627.05p 542.00p
30 September 2021 745.95p 660.00p
-------------------------------------------- ---------- -------------------------------- --------------------------
Total return +19.0% +21.8%
-------------------------------------------- ---------- -------------------------------- --------------------------
Share
Year ended 31 March 2021 Dividend NAV price
rate
-------------------------------------------- ---------- -------------------------------- --------------------------
31 March 2020 411.41p 328.00p
1 October 2020 1.00p 533.62p 435.00p
31 March 2021 627.05p 542.00p
-------------------------------------------- ---------- -------------------------------- --------------------------
Total return +52.7% +65.6%
-------------------------------------------- ---------- -------------------------------- --------------------------
Discount to net asset value per Ordinary share . The discount is the
amount by which the share price is lower than the net asset value per
share with debt at fair value, expressed as a percentage of the net asset
value.
30 September 31 March 2021
2021
-------------------------------------------- ---------- -------------------------------- --------------------------
NAV per Ordinary share a 745.95p 627.05p
Share price b 660.00p 542.00p
-------------------------------------------- ---------- -------------------------------- --------------------------
Discount (a-b)/a 11.5% 13.6%
-------------------------------------------- ---------- -------------------------------- --------------------------
Net gearing . Net gearing measures the total borrowings less cash and
cash equivalents divided by shareholders' funds, expressed as a percentage.
Under AIC reporting guidance cash and cash equivalents includes amounts
due to and from brokers at the period end.
30 September 31 March
2021 2021
-------------------------------------------- -------------- ------------------------------------ ------------------
Borrowings (GBP'000) a 30,000 24,000
Cash (GBP'000) b 5,655 2,588
Shareholders' funds (GBP'000) c 435,375 366,106
-------------------------------------------- ------------------
Net gearing (a-b)/c 5.6% 5.8%
-------------------------------------------- -------------- ------------------------------------ ------------------
Ongoing charges . The ongoing charges ratio has been calculated in accordance
with guidance issued by the AIC as the total of annualised investment
management fees and administrative expenses and expressed as a percentage
of the average net asset values with debt at fair value throughout the
year. The ratio for 30 September 2021 is based on forecast ongoing charges
for the year ending 31 March 2022.
30 September 31 March
2021 2021
-------------------------------------------- ------------------- ------------------------------- -----------
Investment management fees (GBP'000) 3,437 2,801
Administrative expenses (GBP'000) 938 821
Less: non-recurring charges (GBP'000){A} (18) -
-------------------------------------------- -----------
Ongoing charges (GBP'000) 4,357 3,622
-------------------------------------------- ------------------- ------------------------------- -----------
Average net assets (GBP'000) 410,429 312,355
-------------------------------------------- ------------------- ------------------------------- -----------
Ongoing charges ratio 1.06% 1.16%
-------------------------------------------- ------------------- ------------------------------- ----------- -----
{A} Professional fees unlikely to recur.
The ongoing charges ratio provided in the Company's Key Information Document
is calculated in line with the PRIIPs regulations which amongst other
things, includes the cost of borrowings and transaction costs.
Stuart Reid
Aberdeen Asset Management PLC
Secretaries
Tel. 0131 372 2200
24 November 2021
END
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IR FLFIRLRLSFIL
(END) Dow Jones Newswires
November 25, 2021 01:59 ET (06:59 GMT)
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