Ab New India Regulatory News (ANII)

abrdn New India Investment Trust plc

(formerly Aberdeen New India Investment Trust PLC)

LEI - 549300D2AW66WYEVKF02

Annual Report 31 March 2023

Seeking world-class, well governed companies at the heart of India's growth

abrdnnewindia.co.uk

"India's large population, favourable demographics and evolving middle class set it apart from other emerging markets. Domestic consumption, urbanisation and infrastructure remain long term structural growth stories, coupled with the digitalisation opportunity."

Michael Hughes, Chairman 

"Given the quality and strong fundamentals of our portfolio holdings, we believe that your Company is well positioned to deliver on its performance objective for shareholders."

Kristy Fong and James ThomInvestment Manager

Why invest in India?

Aspiration

India's population is the largest in the world with an expanding middle class which will drive consumption growth

Building India

Urbanisation and infrastructure development have multiplier effects for job creation and the wider economy

Renewables

India has committed to meeting half of its energy needs from renewable sources by 2030

Domestic opportunities

Global businesses are investing in, and shifting production to, India, drawn by a wealth of incentives and opportunities

Exporting talent

India's giant tech service sector, built on a highly educated and diligent workforce, drives the export of services by helping global companies keep pace with the fast-changing tech innovation landscape

Digitalisation

India has made immense progress in digital investments, which will underpin its rise to be one of the largest global economies by the middle of this century

Why invest in abrdn New India Investment Trust plc?

Robust financial strength and sustainable competitive advantage

Indian companies meeting a 'quality' threshold are included in the portfolio, displaying both strong financial characteristics and a consistent competitive advantage in attractive industries or sectors

Engaged Management

The management of the best companies in India is world-class and understands the importance of sustainability and good governance to drive the best outcomes for investors and other stakeholders

Return of growth stocks

As interest rates peak globally over the medium term, investors will seek out growth stocks which are set to benefit. The portfolio's focus on those Indian companies with the desire and capacity to expand will drive performance

Financial Highlights and Performance

Financial Highlights

Performance (total return, in Sterling terms)

STRATEGIC REPORT

Chairman's Statement

Dear Shareholder

This marks my first annual statement for the Company as Chairman following Hasan Askari's retirement. As I noted in the 30 September 2022 Half-Yearly Report, Hasan stood down as Chairman at the Annual General Meeting on 28 September 2022 and I once again would like to express my appreciation for his leadership over the past 10 years. Together with Stephen White, who also stepped down as a Director, they have made extremely valuable contributions to the running of this Company. Stephen's successor as Audit Committee Chairman is Andrew Robson, who was appointed as a Director of the Company on 1 August 2022. David Simpson succeeded me as Senior Independent Director while Rebecca Donaldson was appointed Chairman of the Management Engagement Committee.

The Board travelled to India in February 2023, accompanied by the Investment Manager, to visit current and prospective investee companies. This trip left the Board in no doubt as to the investment opportunities in India which are available to the Company.

Overview

In an unsettling period for global markets generally, your Company's net asset value ("NAV") fell by 8.0% on a sterling total return basis over the year ended 31 March 2023 (the "Year"). This lagged the MSCI India Index (the Company's "Benchmark"), which fell 6.0%, also in sterling total return terms. The Company's share price fell by 8.9% to finish at 512.0p while the discount to NAV widened slightly from 19.4% to 20.2%, as at 31 March 2023. 

Macroeconomic concerns dominated the Year, as investors weighed up the optimism of a return to growth post-pandemic against the fears of rising inflation, the risk of global recession and the armed conflict which continues in Ukraine. All of this contributed to what was a volatile stockmarket backdrop.

This global picture appeared at odds with a more positive scenario experienced within India. As the pandemic subsided, there were signs of recovery in urban consumer demand and the housing market was similarly buoyant. Notably, the Reserve Bank of India ("RBI") forecasts GDP growth of 6% over the next fiscal year to 31 March 2024, placing India among the fastest-growing world economies.

While the RBI has pursued a tighter monetary policy, inflation was manageable despite being above the central bank's tolerance levels. The currency situation, however, was less encouraging. With a growing trade deficit and elevated oil prices due to the Ukrainian crisis making imports more expensive, the rupee weakened against sterling. Even here though, the RBI's deep currency reserves ensure that it can intervene to stem any drastic currency fall. Most of the obstacles facing India - higher oil prices and fears of a global recession for instance - have come from outside its borders.

Performance

Whilst lagging the Benchmark, one of the most significant drivers of positive relative performance by the Company over the Year was not holding in the portfolio any of the Adani entities (the "Adani Group"). As I mentioned in the 30 September 2022 Half-Yearly Report, the Adani Group dominated Benchmark returns in 2022, driving India's equity market higher over much of that year, and weighing on the Company's relative returns as a result. Your Investment Manager studiously avoided the Adani Group - its subsidiary companies do not meet stringent quality criteria and your Investment Manager has had long-standing reservations over governance, viewing the collective Adani Group as opaque, complex, and highly leveraged, and with elevated valuations not supported by fundamentals.

A US short-seller report, accusing the Adani Group of stock manipulation and accounting fraud, preceded a sharp share price fall, benefiting the Company's relative returns. In the Board's view, this episode vindicates your Investment Manager's consistent approach to the Adani Group and underscores why good corporate governance matters as part of the overall assessment of environmental, social and governance ("ESG") factors when making investment decisions.

Another knock-on effect from the Adani Group's share-price fall was that better quality securities, which had struggled for much of the Year, once again started to find favour with investors. This shift benefited many of the Company's quality holdings with more defensive characteristics.

Elsewhere, the Indian stockmarket witnessed weaker share price performance from sectors that were more sensitive to interest rates, among them the quality growth internet stocks that were added to the Company's portfolio in 2021. Despite being in the 'pre-profit' stage, your Investment Manager selected these companies because of their strong market positions, competitive advantages, cash-rich balance sheets and capable management. However, as the interest rate environment shifted early in 2022, these types of companies were sold off by investors despite exhibiting strong fundamentals.

Other rate-sensitive areas were also impacted. Real estate stocks fared poorly despite the Company's holdings delivering robust pre-sales growth. The Investment Manager is confident that the portfolio is positioned in property companies that will benefit from industry consolidation.

In a period of higher interest rates and inflation, as witnessed during the Year, one would typically expect quality stocks to be more resilient. However, with global macro factors such as geopolitical risks shaking up markets these fundamentals have been largely ignored. Growth stocks favoured by the Investment Manager were disproportionately sold off and value stocks rose sharply for much of 2022.

That said, it is worth highlighting that, in a turbulent market as seen in the first three months of 2023, your Company's core quality names held up well and several of the previously underperforming growth stocks had already begun to recover towards the end of the Year.

The Board is supportive of the Investment Manager's view that a focus on quality should benefit longer-term returns. Unlike the broader Indian market, these companies, in aggregate, have historically delivered consistent double-digit earnings growth. Their ESG metrics are also superior compared with those included in the Benchmark. While the underperformance relative to the Benchmark is still disappointing, the Board has noted the recovery in performance in the final three months of the Year and remains optimistic that the quality stocks held within the portfolio will deliver attractive returns in time.

A more in-depth discussion of the portfolio performance is contained in the Investment Manager's Review.

Reduction in Fee

The Board was pleased to announce on 31 March 2023 that it had reached agreement with the Manager to amend its management fee arrangements. With effect from 1 April 2023, the investment management fee will be calculated at an annual rate of 0.8% (formerly 0.85%) in respect of the first £300 million (formerly £350 million) of the Company's net assets and an annual rate of 0.6% (formerly 0.7%) in respect of the Company's net assets in excess of £300 million (formerly £350 million).

Change of Name of the Company

The Company also announced on 31 March 2023 that it had changed its name to abrdn New India Investment Trust plc which the Board considered was more consistent with the branding of the Investment Manager's parent company, abrdn.

Conditional tender offer

In March 2022 the Board announced the introduction of a five-yearly performance-related conditional tender offer. The Board was concerned about the relative underperformance of the Company's NAV, as compared to its Benchmark. Following discussions with the Investment Manager, the Board decided that, should the Company's NAV total return underperform the Company's Benchmark over the five-year period from 1 April 2022, then shareholders should be offered the opportunity to realise up to 25 per cent of their investment for cash at a level close to NAV. For these purposes, the Company's NAV per share is adjusted for Indian capital gains tax (the "Adjusted NAV") to enable a like-for-like comparison with the Benchmark. The Board monitors closely the performance of the Company's portfolio and over the first year of the measurement period, from 1 April 2022 to 31 March 2023, the Adjusted NAV total return was -8.5% versus the Benchmark's total return of -6.0% (for additional information, please see the Alternative Performance Measures).

Discount and Share Buybacks

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, while also having regard to the overall size of the Company.

The discount sits wider than the historic average and the Board has instructed a step-up in share buyback activity. Over the Year, the Company bought back into treasury 2,127,206 (2022 - 448,201) Ordinary shares at a cost of £11.8 million (2022 - £2.7 million), resulting in 55,809,921 shares in issue with voting rights and an additional 3,260,219 shares held in treasury as at 31 March 2023. Between the year end and the date of this Report a further 885,248 shares were bought back into treasury resulting in 54,924,673 shares in issue with voting shares and 4,145,467 shares held in treasury. The Board believes that a combination of stronger long-term investment performance and effective marketing should increase demand for the Company's shares and reduce the discount to NAV at which they trade, over time.

Gearing

As at 31 March 2023, the full £30 million had been drawn of the total available bank loan facility provided by Royal Bank of Scotland International (London Branch) (31 March 2022 - £30m), which resulted in net gearing of 5.8%, as compared to 5.5% at 31 March 2022. 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 for the benefit of shareholders.

Even though gearing detracted from the Company's performance over the Year, your Board and Manager believe that it should continue to benefit performance over the medium term even though its cost has risen with higher interest rates.

Impact of Indian Capital Gains Tax

The Company, along with other investment vehicles, is subject to both short and long term capital gains taxes in India on the growth in value of its investment portfolio, which become payable when underlying investments are sold and profits crystallised. Where investments are valued at a profit, but not yet sold, the Company must accrue for the potential capital gains tax payable, which amounted to £11.1 million (2022 - £14.5 million) at 31 March 2023, equivalent to a reduction in the NAV per share of 20.0p or 3.1% at 31 March 2023 (2022 - 25.1p or 3.5%).

Environmental, Social and Governance

I am pleased to note that the Company's portfolio was recently rated "A" under the MSCI ESG Ratings. 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 Investment Manager's ESG process can be found in the Investment Manager's Report and Case Studies, as well as in the latest Annual Report. A Sustainable Investment Report for the Company is also published every six months and is available at: abrdnnewindia.co.uk.

Shareholder Engagement

The Board encourages shareholders to visit the Company's website or other social media channels for the latest information and access to podcasts, thought-leadership articles and monthly factsheets. The Board is seeking to improve the information available to shareholders and to encourage greater interaction. Further to this, the Board has supported the enhancement of the website, alongside more frequent updates by the Investment Manager.

Annual General Meeting

The Company's AGM will be held at Wallacespace, 15 Artillery Lane, London E1 7HA at 12.30pm on Wednesday 27 September 2023. The AGM provides shareholders with an opportunity to ask any questions that they may have of either the Board or the Investment Manager. I look forward to meeting as many of you as possible over refreshments which will follow the AGM. Shareholders, whether attending the AGM or not, are encouraged to submit questions for the Board and/or Investment Manager, in advance, by email to new.india@abrdn.com.

Online Shareholder event

In order to encourage and promote interaction and engagement with the Company's shareholders, the Board is holding an interactive Online Shareholder Presentation at 10.30am on 14 September 2023, to cater for those shareholders who may be unable to attend the AGM. During the Presentation, shareholders will receive a short introduction from the Chairman and portfolio update from the Investment Manager, followed by an interactive question and answer session. The Presentation is being held ahead of the AGM in order to allow shareholders to submit their proxy votes prior to the meeting. Further information on how to register for the Presentation may be found at: https://www.workcast.com/register?cpak=6156852042983466

Change of Investment Policy

The Directors are proposing an amendment to the Company's investment policy, subject to Financial Conduct Authority and shareholder approval. If so approved, the Company will have the flexibility to invest over time in unquoted Indian companies which are close to coming to market through an Initial Public Offering ("IPO"). Many such companies tend to offer pre-IPO investment rounds in the months leading up to a planned IPO. The Investment Manager will continue to undertake deep due diligence on such opportunities.

The unquoted companies that the Investment Manager would seek to invest in would be those which meet its strict quality criteria, have clear and understandable business models and strong management teams. The Board, together with the Investment Manager, believes that the proposed change would provide the Company with better access to more opportunities at more favourable prices and with the opportunity to perform deeper due diligence on the relevant companies. These opportunities would also take advantage of the closed ended nature of the Company. Investments would only be made as and when suitable opportunities arise.

Investment in unquoted Indian investments would be limited to 10% of the Company's net asset value, in aggregate, and calculated at the time of investment.

Outlook

India remains one of the world's fastest-growing economies, sustained by a stable macroeconomic environment. Supportive government spending, a revival in consumption and an easing of supply chain bottlenecks are likely to provide a buffer against rising interest rates and a likely global slowdown.

With a pro-growth budget for the 2024 fiscal year, there is increasing focus on India's industrial policy, as the country seeks to entrench its position as a global manufacturing hub. The domestic economy is in the early stages of a cyclical upswing. Inflation is easing, and there is good momentum in real estate, infrastructure development and consumer spending. The Board is optimistic that companies with strong fundamentals favoured by your Investment Manager, those with pricing power, a competitive advantage, balance sheet strength and steady free cash flow, will thrive in such an environment.

That said, we must remain cogniscent of the risks. Stockmarkets remain volatile and the external pressures on India have not eased. However, the Company's core quality holdings should still deliver resilient compounding earnings growth, even as global macro conditions stay weak. The consistency of earnings growth of the portfolio continues to be healthy. Fundamentals, including the ability to sustain margins, remain solid, supported by experienced management teams. In time, we would expect these positives to once again be reflected in better share price performance.

Over the longer term, both I and the other Directors are confident that India remains a compelling investment opportunity. Its large population, favourable demographics and evolving middle class set it apart from other emerging markets. Domestic consumption, urbanisation and infrastructure remain long term structural growth stories, coupled with the digitalisation opportunity.

Michael HughesChairman28 June 2023

Investment Manager's Review

The Company's net asset value ("NAV") total return was -8.0% in sterling terms for the year ended 31 March 2023 (the "Year") compared with a total return of -6.0% for the MSCI India Index (the "Benchmark").

Over what was another volatile year for equities, the Company's focus on long-term quality bore fruit towards the final three months of the Year. Reiterating the Chairman's observations, we are encouraged that the focus on quality holdings and avoiding investing in large corporate groups that fail to meet our stringent criteria, is starting to deliver better performance. We are focused on improving performance and will continue to work hard to enhance returns for shareholders.

Market and Performance review

India was actually among the most resilient markets in what was an exceptionally turbulent year for global risk assets. The Year was marked by rising inflation, slowing global growth, and the ongoing Ukraine conflict. There were also challenging moments such as banking sector turmoil in developed markets, emanating from the US.

Despite these external headwinds, the Indian economy continued its post-pandemic recuperation. Aided by increasing government capital expenditure and easing supply chain worries, the services sector gradually improved while we witnessed a manufacturing revival. While this was underway, inflation eased to a 16-month low by the end of the Year to sit at 5.7%.

Looking at the portfolio's performance over the Year, it is perhaps best explained in two distinct periods. Between April and December 2022, the Company's performance fell sharply behind the Benchmark. However, between January and March 2023 - performance was much improved and recouped some of the earlier losses.

Over the first period, the key reasons for the under-performance against the Benchmark were: not holding any of the Adani group of companies (the "Adani Group") in the portfolio, negative stock selection in Azure Power Global and Piramal Enterprises, the poor returns from the IT services stocks, and not holding Mahindra & Mahindra in the early part of the review period. We discussed these reasons in greater detail in the Half-Yearly Report for the six months ended 30 September 2022 (available from www.abrdnnewindia.co.uk) and while we had taken some profits from our IT services holdings, our overall overweight exposure to the sector detracted from performance during the early part of the Year.

For the second period, as the final three months of the Year, the recovery in performance was mainly due to the unravelling of the Adani Group, which started in January 2023 after the publication of a highly critical report by a US short-seller; a key event which your Chairman has made a reference to also. We believe in investing in businesses that are backed by reputable promoter groups with a track record of delivering value to all shareholders. We continue to view the Adani Group as lower quality stocks given their weak financial track records, highly over-leveraged balance sheets and major ESG concerns, which make them risky bets in our view, which we have not been prepared to expose the portfolio to. We have always been clear about our reservations over the transparency and accounting practices of the Adani Group and the dramatic share-price collapse is a vindication of our rigorous investment process that filters out low-quality companies from the outset.

The relative contribution from the financials sector also turned positive. The share price of PB Fintech, which operates the online insurance platform Policybazaar, staged a strong recovery after its results showed that it was on track to turn profitable - in terms of its earnings before interest, taxation, depreciation, and amortisation (EBITDA) - in the next financial year. It was one of the high-quality growth stocks in the portfolio whose share price was depressed heavily in 2022 due to the rotation away from growth to value, despite displaying healthy fundamental characteristics.

Our holdings in core banks such as ICICI Bank and HDFC Bank also held up better than other lenders as the banking sector was weighed down by concerns over the collective exposure to Adani loans. In addition, HDFC Bank's upcoming merger with HDFC appears to remain on track, which we viewed as positive for the stock, and our exposure to it.

These holdings were also buoyed by better credit growth, higher interest rates and good asset quality.

Our industrial capex and infrastructure-related holdings also contributed to better relative performance. ABB India's strong portfolio of products and services benefited from the recovering capex cycle. The company also plans to invest US$121 million (approximately £97 million) over the next five years to expand its capacity to meet growing demand. Power Grid Corporation of India, which benefits from the country's need to invest in power infrastructure, outperformed after delivering good results. UltraTech Cement performed well, as the company ramped up capacity, driven by strong demand from infrastructure and housing and rising private sector capex.

Aegis Logistics, in the energy sector, remains a strong performer, which is well-positioned to capitalise on continued growth in demand for Liquid Petroleum Gas in India with its key terminal infrastructure in strategic locations along the country's coastline. 

On the other hand, our e-commerce, IT services and real estate sectors remained under pressure for the latter period.

In consumer discretionary, e-commerce company Nykaa continued to experience a falling share price despite delivering robust growth. However, we were concerned about the series of management changes the company had been through and have since sold the holding. Crompton Greaves Consumer Electricals fell short of earnings expectations due to weaker consumer durables demand amid high inflation - we have also reduced the holding as the macro backdrop remains challenging for the company.

Elsewhere, our real estate holdings, namely Godrej Properties, was held back by concerns that rising mortgage rates will affect demand. We have not seen any evidence of this as the company reported robust growth in residential home sales in the major markets. We maintain our conviction in the stock as Godrej remains in a good position, with a robust balance sheet, ahead of both the structural market consolidation and the industry upcycle, that we are anticipating.

IT services remained weak on global recessionary fears. As we are concerned that valuations in this sector do not reflect the slowdown in technology spending, we have continued to reduce the portfolio's exposure to the sector by selling Mphasis.

On the ESG front, we continued to engage with companies on various issues. Following our discussions with Affle India (corporate governance), Godrej Properties (green strategy) and UltraTech Cement (decarbonisation efforts), we made the first post-Covid trip to India in February 2023 which helped our engagement and understanding of the ESG issues in the portfolio.

Portfolio activity

The Company maintains an above-Benchmark exposure to financial services, which includes banks and life insurance, real estate, and healthcare. Within financials, we have added to our private banks' exposure with an initiation in Axis Bank as the stock is attractively valued and its turnaround strategy has started to show results. In Healthcare, we bought an initial holding in JB Chemicals, which is one of the top pharmaceutical companies in India, measured by sales.

As we remain positive about the industrial capex cycle and premiumisation trend within domestic consumption, we initiated a position in cable and wire manufacturer KEI Industries, leading domestic jeweller Titan Industries and Tata Consumer Products, a consumer products company with strong brands. These were funded with the sales of our lower conviction holdings mentioned above such as Mphasis, Nykaa, logistics and supply chain firm Delhivery and healthcare company Sanofi India.

Outlook

The next 12 months remains uncertain, with no end in sight to the Russia-Ukraine conflict, an expected rearrangement in global supply chains and a looming recession in the United States. However, India's swelling economy and domestic demand, robust macroeconomic management and proactive policy measures mean that the country is well-placed to tackle such external headwinds.

We remain confident that our portfolio, as positioned, has the right features to withstand the current challenging environment. In the short-term, once the global interest rate cycle peaks, we believe that the growth to value rotation will ease or even reverse, and our resilient, higher-quality, growth stocks will outperform. Given the quality and strong fundamentals of our portfolio holdings, we believe that your Company is well positioned to deliver on its performance objective for shareholders.

Kristy Fong and James ThomInvestment Manager28 June 2023

Overview of Strategy

Business Model

The business of the Company is that of an investment company which continues to qualify as an investment trust for UK capital gains tax purposes. The Directors do not envisage any change either to this model or to the Company's activities in the foreseeable future.

Investment Objective

The Company aims 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 invests primarily in Indian equity securities.

Delivering the Investment Policy

Risk Diversification

The Company's investment policy is flexible, enabling it to invest in all types of securities, including equities, debt and convertible securities in companies listed on the Indian stock exchanges or which are listed on other international exchanges, and which derive significant revenue or profit from India. The Company may also, where appropriate, invest in open-ended collective investment schemes and closed-end funds which invest in India and are listed on the Indian stock exchanges. The Company is free to invest in any particular market segment or geographical region of India or in small, mid or large capitalisation companies.

The Company's portfolio will typically comprise in the region of 25 to 50 holdings, but with due consideration given to spreading investment risk.

Gearing

The Company is permitted to borrow up to 25% of its net assets (measured when new borrowings are incurred). It is intended that this power should be used to leverage the Company's portfolio in order to enhance returns when and to the extent that it is considered appropriate to do so. Under normal circumstances, over the longer term and in tandem with the rising value of the Company's investments, gearing is expected to improve returns.

The Company's Gearing is essentially structural in nature but, in addition, may be used for specific opportunities or circumstances. The Directors take care to ensure that borrowing covenants permit flexibility of investment policy.

Currency, Hedging Policy and Derivatives

The Company's financial statements are maintained in Sterling while, because of its investment focus, nearly all of its portfolio investments are denominated and quoted in the Indian Rupee. Although it is not the Company's present intention to do so, the Company may, where appropriate and economic to do so, employ a policy of hedging against fluctuations in the rate of exchange between Sterling and other currencies in which its investments are denominated. Cash balances are held in such currency or currencies as the Manager considers appropriate, although it is expected that this would primarily be Sterling.

Although the Company does not employ derivatives presently, it may do so, if appropriate, to enhance portfolio returns (of a capital or income nature) and for efficient portfolio management, that is, to reduce, transfer or eliminate risk in its investments, including protection against currency risks, or to gain exposure to a specific market.

Proposed Amendment to Investment Policy

The Company is proposing to amend its investment policy to allow investment into unlisted companies subject to a limit, measured in the aggregate and at the time of investment, of 10% of the Company's net asset value.

Further information regarding this change may be found in the Chairman's Statement. The Board is seeking shareholders' approval to the amendment under Resolution 9 in the Notice of Annual General Meeting.

Investment Restrictions

It is the investment policy of the Company to invest no more than 15% of its gross assets in other listed investment companies (including listed investment trusts). The Company held no investments in other listed investment companies during the year ended 31 March 2023.

Benchmark

The Company's Benchmark is the MSCI India Index (Sterling-adjusted). The Board also considers the Adjusted NAV in relation to the conditional tender offer announced in March 2022.

Key Performance Indicators

At each Board meeting, the Directors consider a number of performance measures to assess the Company's success in achieving its objective. The main Key Performance Indicators ("KPIs") identified by the Board in relation to the Company, which are considered at each Board meeting, are as follows:

Principal Risks and Uncertainties

There are a number of risks which, if realised, could have a material adverse effect on the Company and its financial position, performance and prospects. The Board has carried out a robust assessment of these risks, including emerging risks, which include those that would threaten its business model, future performance and solvency. The principal risks associated with an investment in the Company's shares are published monthly in the Company's factsheet which is available from the Company's website: abrdnnewindia.co.uk.

The principal risks and uncertainties, and emerging risks, faced by the Company are reviewed annually by the Audit Committee in the form of a detailed risk matrix and heat map and they are described in the table below, together with any mitigating actions. In addition, the Board has identified, as an emerging risk, the general escalation of geo-political risk globally. This may have implications for India (see "Single Country Risk" below). In addition, the Audit Committee considers the implications for the Company's investment portfolio of a changing climate. The Board assesses this emerging risk as it develops, including how investor sentiment is evolving towards climate risk within investment portfolios, and will consider how the Company may mitigate this risk, and other emerging risks, if and when they become material.

In all other respects, the Company's principal risks and uncertainties have not changed materially since the date of the previous Annual Report and are not expected to change materially for the current financial year. 

An explanation of other risks relating to the Company's investment activities, specifically market price, interest rate, liquidity and credit risk, and a note of how these risks are managed, is contained in Note 17 to the financial statements.

Promoting the Company

The Board recognises the importance of updating existing investors as well as promoting the Company to prospective investors, with the aim of improving liquidity in the Company's shares and reducing the discount at which they trade, thereby enhancing value. Communicating the long-term attractions of the Company is key. 

The Board seeks to achieve this through subscription to, and participation in, the promotional programme run by abrdn on behalf of the investment companies under its management.

The Company's financial contribution to the programme is matched by abrdn. abrdn's promotional activities team reports quarterly to the Board giving analysis of the promotional activities as well as updates on the shareholder register and any changes in the composition of that register.

The Company further supports the Manager's investor relations programme which involves regional roadshows as well as promotional and public relations campaigns.

Board Diversity and Succession

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow the Board to fulfil its obligations. The Board also recognises the benefits, and is committed to, the principle of diversity in its recruitment of new Board members. The Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment and will search widely when recruiting any new Director with a view to maximising diversity. Consequently, the Company does not consider it appropriate to set specific diversity targets. At 31 March 2023, there were three male Directors and one female Director on the Board.

The Board has agreed a policy whereby no Director, including the Chairman, shall serve for longer than the ninth AGM after the date of their initial date of appointment as a Director unless in relation toexceptional circumstances.

Environmental, Social and Human Rights Issues

The Company has no employees as it is managed by abrdn Fund Managers Limited and there are therefore no disclosures to be made in respect of employees. The Company's responsible investment policy is outlined below while the Manager's ESG engagement is set out below.

Due to the nature of the Company's business, being a company that does not offer goods and services to customers, the Board considers that it is not within the scope of the Modern Slavery Act 2015 because it has no turnover. The Company is therefore not required to make a slavery and human trafficking statement.

Notwithstanding this, the Board considers the Company's supply chains, dealing predominantly with professional advisers and service providers in the financial services industry, to be low risk in relation to this matter.

Global Greenhouse Gas Emissions and Streamlined Energy and Carbon Reporting ("SECR")

All of the Company's activities are outsourced to third parties. The Company therefore has no greenhouse gas emissions to report from the operations of its business, nor does it have responsibility for any other emissions producing sources under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013. For the same reason as set out above, the Company considers itself to be a low energy user under the SECR regulations and therefore is not required to disclose energy and carbon information.

Duration

The Company does not have a fixed life but, further to a change in the Articles of Association approved by shareholders at the AGM on 28 September 2022, an ordinary resolution to continue the Company is put to shareholders at every fifth AGM. The next continuation resolution will be put to shareholders at the AGM in 2027.

Viability Statement

The Company does not have a fixed period strategic plan, but the Board does formally consider risks and strategy on at least an annual basis. The Board regards the Company, with no fixed life, as a long-term investment vehicle, but for the purposes of this viability statement has decided that a period of three years is an appropriate period over which to report. The Board considers that this period reflects a balance between looking out over a medium-term horizon and the inherent uncertainties of looking out further than three years.

Taking into account the Company's current position and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of three years from the date of this Report.

In forming this expectation, the Directors looked to the following:

·  the Company's assets consist, substantially, of a portfolio of readily realisable quoted securities, where the Directors monitor the liquidity of each holding as well as reviewing the outcome of testing undertaken by the Manager in which the portfolio is subject to adverse market scenarios;

·  the principal risks and uncertainties detailed above, and the steps taken to mitigate these;

·  a significant proportion of the expenses are proportional to the Company's NAV and will reduce if the NAV falls;

·  the Directors regularly review the Company's level of gearing, including the financial modelling undertaken by the Manager to establish what level of reduction in the Company's NAV would require to occur in order to cause a breach in the covenants attached to the Company's £30m loan facility;

·  the Company's third-party suppliers continuing to deliver services to the Company in accordance with the underlying agreements and not experiencing significant operational difficulties in respect of the services provided to the Company, although, if required, alternative suppliers could be engaged to provide these services at limited notice; and

·  in advance of expiry in August 2025 of the Company's £30m loan 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 borrowings. However, should these terms not be forthcoming, any outstanding borrowing would be repaid through the proceeds of equity sales.

Accordingly, taking into account the Company's current position and the potential impact of its principal risks and uncertainties, the Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due for a period of three years from the date of this report. In making this assessment, the Board has considered in particular the risk of a large economic shock, a continuing period of significant stock market volatility, a significant reduction in the liquidity of the portfolio or changes in investor sentiment, and how these factors might affect the Company's prospects and viability in the future.

Likely Future Developments

The Board expects the Company to continue to pursue its investment objective and accepts that this may involve divergence from the Benchmark. The companies which make up the investment portfolio are considered by the Investment Manager to demonstrate resilience and to offer opportunities for investors to benefit from the development of the broader Indian economy. Further information on the outlook and future developments of the Company may be found in the Chairman's Statement and in the Investment Manager's Report.

Michael Hughes,Chairman28 June 2023

Promoting the Success of the Company

The Purpose of the Company and Role of the Board

The Board is required to report on how it has discharged its duties and responsibilities under section 172 of the Companies Act 2006. Under this legislation, the Directors have a duty to promote the success of the Company for the benefit of its members as a whole, taking into account the likely long-term consequences of decisions, the need to foster relationships with the Company's stakeholders and the impact of the Company's operations on the environment.

The purpose of the Company is to act as a vehicle to provide, over time, attractive financial returns to its shareholders. Investment trusts, such as the Company, are long-term investment vehicles and are typically externally managed, have no employees, and are overseen by an independent non-executive board of directors.

During the year, the Board was comprised of between four and six independent non-executive Directors with a broad range of skills and experience across all major functions that affect the Company. The Board retains responsibility for taking all decisions relating to the Company's investment objective and policy, gearing, corporate governance and strategy, and for monitoring the performance of the Company's service providers.

The Board's philosophy is that the Company should operate in a transparent culture where all parties are provided with respect as well as the opportunity to offer practical challenge and participate in positive debate which is focused on the aim of achieving the expectations of shareholders and other stakeholders alike. The Board expects the Manager to act as a responsible steward of the Company's investments. The Manager's approach to responsible investing may be found at: https://www.abrdn.com/en-gb/seeing-things-differently

How the Board Engages with Stakeholders

The Company's main stakeholders are its Shareholders, the Manager, Investee Companies, Service Providers, Debt Providers and the Environment and Community. The Board considers its stakeholders at Board meetings and receives feedback on the Manager's interactions with them.

Specific Examples of Stakeholder Consideration During the Year

While the importance of giving due consideration to the Company's stakeholders is not new, and is considered as part of every Board decision, the Directors were particularly mindful of stakeholder considerations during the following decisions undertaken during the year ended 31 March 2023.

Share buybacks

During the year the Company bought back into treasury 2.1 million shares, providing a small accretion to the NAV per share and a degree of liquidity to the market. The discount at which the Company's share price sits as compared to its NAV per share is wider than the historic average and the Board has instructed a step-up in share buyback activity. It is the view of the Board that this policy is in the interest of all shareholders.

Visit to India

Members of the Board, accompanied by the Investment Manager, visited India in February 2023 and met with a number of investee companies.

Online Shareholder event

As explained in the Chairman's Statement, to encourage and promote interaction and engagement with the Company's shareholders, the Board is holding an Online Shareholder Presentation at 10.30am on 14 September 2023. During the presentation, shareholders will receive updates from the Chairman and Investment Manager and then be able to participate in an interactive question and answer session. The online presentation is being held ahead of the AGM in order to allow shareholders to submit their proxy votes prior to the AGM.

Change in Management Fee

Following discussions with the Manager, a fee reduction was agreed for the benefit of shareholders (see the Directors' Report for details).

Performance

Ten Year Financial Record

Top Ten Active Weights

As at 31 March 2023

Portfolio

Sector Analysis

Our Investment Manager's Responsible Investment Process

The Investment Manager believes that a company's ability to generate sustainable returns for investors depends on the management of its environmental impact, its consideration of the interests of society and stakeholders, and on the way it is governed. By putting ESG factors at the heart of its investment process, the Investment Manager aims to generate better outcomes for the Company's shareholders. The three factors can be considered as follows:

·  Environmental factors relate to how a company conducts itself with regard to environmental conservation and sustainability. Types of environmental risks and opportunities include a company's energy consumption, waste disposal, land development and carbon footprint, among others.

·  Social factors pertain to a company's relationship with its employees and vendors. Risks and opportunities can include (but are not limited to) a company's initiatives on employee health and well-being, and how supplier relationships align with corporate values.

·  Corporate governance factors can include the corporate decision-making structure, independence of board members, the treatment of minority shareholders, executive compensation and political contributions, among others.

At the investment stage, ESG factors and analysis can help to frame where best to invest by considering material risks and opportunities alongside other financial metrics. Due diligence can ascertain whether such risks are being adequately managed, and whether the market has understood and priced them accordingly.

The Investment Manager is an active investor, voting at shareholder meetings in a deliberate manner, working with companies to drive positive change, and engaging with policymakers on ESG and stewardship matters. Furthermore, with respect to the Company, the Board has supported the Investment Manager in actively choosing, in future, not to invest in tobacco companies nor investing in companies directly exposed to controversial weapons

There are three core principles which underpin the Investment Manager's investment approach (shown below) and the time it dedicates to ESG analysis as part of its overall fundamental equity research process:

As part of their company research, our stock analysts evaluate the ownership, governance and management quality of the companies they cover. They also assess potential environmental and social risks that the companies may face. These insights are captured in our company research notes.

Our stock analysts work closely with dedicated ESG specialist who sit within each regional investment team and provide industry-leading expertise and insight at the company level. These specialists also mediate the insights developed by our central ESG Investment team to the stock analysts, as well as interpret and contextualise sector and company insights.

Our central ESG investment team provides thought leadership, thematic and global sector insights, as well as event-driven research. The team is also heavily involved in the stewardship of our investments and supports company engagement meetings where appropriate.

abrdn's ESG Engagement

How the Investment Manager embeds ESG into its Investment Process

Can we measure it?

There are elements of ESG that can be quantified, for example the diversity of a board, the carbon footprint of a company, and the level of employee turnover. While diversity can be monitored, measuring inclusion is more of a challenge. Although it is possible to measure the level of staff turnover, it is more challenging to quantify corporate culture. Relying on calculable metrics alone would potentially lead to misleading insights. As active managers, quantitative and qualitative assessments are blended to better understand the ESG performance of a company.

The Investment Manager's analysts consider such factors in a systematic and globally applied approach to assess and compare companies consistently on their ESG credentials, both regionally and against their peer group. Some of the key questions asked of companies include:

·  How material are ESG issues for this company, and how are they being addressed?

·  What is the quality of this company's governance, ownership structure and management?

·  Are incentives and key performance indicators aligned with the company's strategy and the interests of shareholders?

The questions asked differ from company to company; the type of questions poised to a bank would be quite different from those of a semiconductor manufacturing firm.

The ESG Scoring System

Having considered the regional universe and peer group in which a company operates, the Investment Manager allocates it an ESG score between one and five. This is applied across every stock covered globally. Examples of each category and a small sample of the criteria used are detailed below:

At the last review reported to the Board, 53% of the companies in the portfolio were rated under the Investment Manager's scoring system as 'Leaders', reflecting the portfolio's focus on quality, while 45% of the companies were rated as 'Average'. A generally positive momentum has been witnessed from companies in the portfolio in terms of ESG, in covering both practices and disclosure, and it was pleasing to note that the second half of the year saw a number of upgrades to company scores following extensive engagement by the Investment Manager. More generally, engagements in India continue to focus on environmental impact and climate change, as well as resource intensity, cybersecurity, board dynamics and independent directors. The portfolio did not hold any companies rated as either 'Below Average' or' Laggard'.

While the Investment Manager seeks to encourage better disclosure and ESG considerations by companies, it will not always necessarily exclude one if improvements are expected. Overall, the Company supports an approach seeking to target:

·  an aggregate portfolio ESG rating that is better than, or equal to, the benchmark measured by the MSCI ESG rating (CCC-AAA) based on the weighted average of each company's MSCI ESG rating;

·  a Carbon Intensity that is at least 10% lower than the benchmark, as measured by the abrdn Carbon Footprint Tool (which uses Trucost data for Scope 1 & 2 emissions). This tool enables analysis of company, sector, and the overall portfolio's carbon footprint.

The Board receives half-yearly updates with regards to these metrics which are published on the Company website and, while not guaranteed, there is an aim that the Investment Manager's investment process will deliver against these targets at the same time as delivering long term growth. 

Climate Change

Climate change is one of the most significant challenges of the 21st century and has big implications for investors. The energy transition is underway in many parts of the world, and policy changes, falling costs of renewable energy, and a change in public perception are happening at a rapid pace. Assessing the risks and opportunities of climate change is a core part of the investment process. In particular, the Investment Manager considers:

Transition risks and opportunities

Governments could take robust climate change mitigation actions to reduce emissions and transition to a low-carbon economy. This is reflected in targets, policies and regulation and can have a considerable impact on high-emitting companies.

Physical risks and opportunities

Insufficient climate change mitigation action will lead to more severe and frequent physical damage. This results in financial implications, including damage to crops and infrastructure, and the need for physical adaptation such as flood defences.

The Investment Manager has aligned its approach with that advocated by the investor agenda of the Principles for Responsible Investment (PRI) - a United Nations-supported initiative to promote responsible investment as a way of enhancing returns and better managing risk.

PRI provides an intellectual framework to steer the massive transition of financial capital towards low-carbon opportunities. It also encourages fund managers to demonstrate climate action across four areas: investments; corporate engagement; investor disclosure; and policy advocacy, as explained below:

To assist in the analysis, the Investment Manager has developed a proprietary climate scenario analysis tool. Climate scenario analysis involves modelling the impact on financial assets of a range of pathways (for both physical climate change and the transition to a low carbon economy) under plausible assumptions for future policy and technological change. This allows the Investment Manager to explore the impact of climate change on portfolios and to inform investment decisions.

Importance of Engagement

The Investment Manager is committed to regular, ongoing engagement with the companies in which it invests, to help to maintain and enhance their ESG standards into the future.

As part of the investment process, the Investment Manager undertakes a significant number of company meetings each year on behalf of the Company. Your Company is supported by on-desk ESG analysts, as well as a well-resourced specialist ESG Investment team. These meetings provide an opportunity to discuss various relevant ESG issues including board composition, remuneration, audit, climate change, labour issues, human rights, bribery and corruption. Companies are strongly encouraged to set clear targets or key performance indicators on all material ESG risks.

Our Engagement Activity

The Investment Manager regularly engages with companies we invest in. The following chart shows the engagements that have included ESG topics. Over the six months ended 31 December 2022, the Investment Manager met with 17 portfolio companies on ESG topics and had 32 engagements with them. This does not include positions that have been sold or are under consideration for sale. These are the themes that the Investment Manager has engaged on:

Our Voting Activity

ESG engagements are conducted with consideration of the 10 principles of the United Nations Global Compact, and companies are expected to meet fundamental responsibilities in the areas of human rights, labour, the environment and anti-corruption.

This engagement is not limited to a company's management team. It can include many other stakeholders such as non-government agencies, industry and regulatory bodies, as well as activists and the company's customers and clients.

While the Investment Manager focuses on investing in quality companies, the investment team is aware that in some cases Asian companies can lag those in Western Europe in terms of ESG. This is perhaps more true of emerging Asia than developed Asia. In investing across Asia, the Investment Manager focuses on companies and management teams exhibiting desirable behavioural traits and characteristics (for example, a track record of fair treatment of minority shareholders, thoughtful capital allocation and return) rather than a strict focus on structures (for example, relating to board composition). Subsequent to an investment, the Investment Manager engages energetically with companies to improve and enhance ESG, aiming to encourage companies to implement processes and practises that will protect and enhance shareholder value. The Investment Manager has a long track record of such constructive engagement, drawing on investment experiences globally to bring these insights to the Company's holdings.

Investment Case Studies

ReNew Energy Global

ReNew Energy Global is one of India's largest renewable energy independent power producers. Founded in 2011, it has over 150 operational energy projects in solar, wind and hydro power spread across 18 Indian states1.

The Investment Manager likes ReNew for several reasons: First, the scale of its business and clarity on its steady pipeline of projects is reassuring. Secondly, the company has expertise around engineering, procurement, and construction in wind power, which is a rare occurrence amongst companies in India. Finally, ReNew has proven that it is able to undertake complex projects without losing focus on creating value for shareholders.

The management team has also executed well on the company's expansion as well as its commercial and industrial strategy. Further, they have been disciplined in bidding at auctions.

India is one of the world's largest and fastest-growing economies. It still relies heavily on fossil fuels to meet the country's rising energy demands - coal is a major contributor to India's carbon footprint, which accounts for 7% of global CO2 emissions2.

This is because the capacity to generate sufficient renewable power is currently being built. In the short-to-medium term, India will remain reliant on fossil fuels, however, renewables are expected to make up the lion's share of power sources in the country3 over the long run.

Decarbonisation has been gaining notable traction in recent years. Supportive and consistent government policies have enabled capacity additions4 in solar, hydropower, wind, and biomass power. India has publicly set a target for achieving 500 gigawatts of installed renewable capacity by 2030.

ReNew's clean energy projects at present account for only about 1.4% of India's total installed renewable capacity and helps to avoid ~0.5% of the country's carbon emissions annually5. This offers the company significant scope for growth as it continues to expand its clean energy capacity with more projects in the coming years.

On the ESG front, ReNew has set sustainability targets it aims to achieve by 20306. They include becoming water positive, sending zero solid waste to landfill and having 100% of the electricity for its operations sourced from clean energy sources.

These are ambitious and commendable targets and the Investment Manager engaged with the company on its progress towards achieving them, including its efforts around recycling and water efficiency. On the latter, ReNew has been innovative in its use of robotic cleaning to minimise water consumption. The Investment Manager continues to engage with ReNew on these matters.

1 Source: https://investor.renewpower.in/static-files/3ee261b8-b606-41f4-8c2f-b824d5ceacfe

2 Source: https://ourworldindata.org/co2/country/india

3 Source: UBS, How to navigate India's net-zero US$20trn capex across the supply chain? (July 2022)

4 Source: https://www.argusmedia.com/en/news/2436897-india-plans-250gw-of-renewable-capacity-in-five-years

5 Source: ReNew Energy Global

6 Source: https://renewpower.in/sustainability-renew/

SBI Life Insurance

In India, financial inclusion lies close to the heart of the government. Since August 2014, Pradhan Mantri Jan Dhan Yojana, a national mission for financial inclusion, has aimed to provide financial services to large swathes of the population who are un-served and under-served.

This means helping to ensure that individuals and businesses have access to useful and affordable financial products and services that meet their needs. These include transactions, payments, savings, credit and insurance that are delivered in a responsible and sustainable way.

While progress has been made, there is still some way to go. Take the life insurance ownership gap, for instance. Of India's rural population, only 22% own a life insurance policy. This compares with 73% across urban areas1. The low rural rate is due to a lack of funds, high premiums and cumbersome buying processes.

Across our holdings, SBI Life Insurance has what it takes to help tackle the under-provision of insurance. It is the largest private life insurance provider domestically, with a higher presence in rural and semi-rural areas than its local peers.

SBI Life's lower average ticket size versus that of its rivals also underscores its affordable premiums. This would help increase insurance access to those who would otherwise go without life protection.

The company focuses on expanding its services to underpenetrated areas. It has good support from a reputable brand. It also has a productive agency force and an extensive bancassurance distribution network.

This focus sits well with the United Nations' Sustainable Development Goal 8.10 - to strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance and financial services for all.

Backed by a solid balance sheet and low-cost base, SBI Life is well placed to capitalise on its entrenched and broad network to tap the massive under-serviced insurance market.

Aside from aiding financial inclusion, this also offers the insurer significant scope for growth. This is given its diversified products and rising share of higher-margin protection business.

Its longer-term prospects are promising, when taking into account the growing middle class, young insurable population and growing awareness of the need for protection and insurance planning in India.

1 Around a fifth of rural population owns life insurance products vs 73% in urban India: Survey | Mint (livemint.com)

Directors' Report

The Directors present their Report and the audited Financial Statements of the Company for the year ended 31 March 2023, taking account of any events between the year end and the date of approval of this Report.

Results

The Company's results, including its performance for the year against its Key Performance Indicators ("KPIs"), may be found in the Strategic Report.

Change of Name

The Company changed name, on 31 March 2023, from Aberdeen New India Investment Trust PLC to abrdn New India Investment Trust plc.

Investment Trust Status and ISA Compliance

The Company is registered as a public limited company in England & Wales under registration number 02902424 and has been accepted by HM Revenue & Customs as an investment trust for accounting periods beginning on or after 1 April 2012, subject to the Company continuing to meet the eligibility conditions of s1158 of the Corporation Tax Act 2010 (as amended) and S.I. 2011/2099. In the opinion of the Directors, the Company's affairs have been conducted in a manner to satisfy these conditions to enable it to continue to qualify as an investment trust for the year ended 31 March 2023. The Company intends to manage its affairs so that its shares will be qualifying investments for the stocks and shares component of an Individual Savings Account ("ISA").

Capital Structure

During the year ended 31 March 2023 the Company bought back into treasury 2,127,206 (2022 - 448,201) Ordinary shares. This was equivalent to 3.7% of the Company's issued share capital (excluding treasury shares) at 1 April 2022 (2022 - 0.8%). As at 31 March 2023, the Company's issued share capital consisted of 55,809,921 Ordinary shares (2022 - 57,937,127 Ordinary shares) with voting rights, each share holding one voting right in the event of a poll, and an additional 3,260,219 (2022 - 1,133,013) Ordinary shares in treasury, with no voting rights or entitlement to receive dividends. Between 1 April 2023 and 28 June 2023 as the date of approval of this Report, an additional 885,248 Ordinary shares were bought back resulting in the Company's issued share capital consisting of 54,924,673 Ordinary shares and an additional 4,145,467 shares in treasury.

Ordinary shareholders are entitled to vote on all resolutions which are proposed at general meetings of the Company. The Ordinary shares carry a right to receive dividends. On a winding up, after meeting the liabilities of the Company, the surplus assets will be paid to Ordinary shareholders in proportion to their shareholdings. There are no restrictions on the transfer of Ordinary shares in the Company other than certain restrictions which may from time to time be imposed by law and regulation.

Manager and Company Secretaries

The Company has appointed the Manager as its alternative investment fund manager, to provide investment management, risk management, promotional activities and administration and company secretarial services to the Company. The Company's portfolio is managed by the Investment Manager by way of a group delegation agreement in place between the Manager and Investment Manager. In addition, the Manager has sub-delegated administrative and secretarial services to abrdn Holdings Limited and promotional activities to abrdn Investments Limited.

Under the terms of the management agreement ("MA"), investment management fees payable to the Manager have been calculated and charged on the following basis throughout the year ended 31 March 2023: a monthly fee, payable in arrears, calculated at an annual rate of 0.85% of the Company's net assets up to £350m and 0.70% on net assets above £350m. 

The Company announced on 31 March 2023 that, with effect from 1 April 2023, investment management fees are calculated on the same basis as previously other than the rate is 0.8% of the Company's net assets up to £300m and 0.6% on net assets above £300m.

There is a rebate for any fees received in respect of any investments by the Company in investment vehicles managed by abrdn. The MA is terminable by either party on not less than six months' notice. In the event of termination on less than the agreed notice period, compensation is payable to the Manager in lieu of the unexpired notice period.

The fees, and other expenses, payable to abrdn during the year ended 31 March 2023 are disclosed in Notes 4 and 5 to the Financial Statements. The investment management fees are chargeable 100% to revenue.

Corporate Governance

The Company is committed to high standards of corporate governance, as set out in its Statement of Corporate Governance.

Directors

The Board consisted of a non-executive Chairman and between three and five non-executive Directors, all of whom served throughout the year under review, other than Andrew Robson, Hasan Askari and Stephen White. Andrew Robson joined the Board on 1 August 2022. Hasan Askari was Chairman until 28 September 2022, when he was succeeded by Michael Hughes. The Senior Independent Director was Michael Hughes until 28 September 2022 and David Simpson thereafter. Stephen White was Chairman of the Audit Committee until his retirement on 28 September 2022 when he was succeeded by Andrew Robson. Rebecca Donaldson was appointed Chairman of the Management Engagement Committee on 28 September 2022.

Board Diversity

The Board recognises the importance of having a range of skilled, experienced individuals with the right knowledge represented on the Board in order to allow it to fulfil its obligations. The Board also recognises the benefits and is supportive of the principle of diversity in its recruitment of new Board members.

The Board will not display any bias for age, gender, race, sexual orientation, religion, ethnic or national origins, socio-economic background or disability in considering the appointment of its Directors. In view of its size, the Board will continue to ensure that all appointments are made on the basis of merit against the specification prepared for each appointment. In doing so, the Board will take account of the three targets set out in the FCA's Listing Rules, in effect for listed companies with year ends starting 1 April 2022, which are set out in the two tables below.

As an externally managed investment company, the Board employs no executive staff, and therefore does not appoint either a chief executive officer (CEO) or a chief financial officer (CFO), both of which are deemed senior board positions by the FCA. However, the Board considers the Chairs of the Audit Committee, Management Engagement Committee and Nomination Committee to be senior board positions and the following disclosures are made on this basis. Other senior board positions recognised by the FCA are chair of the board and senior independent director.

The Board has resolved that the Company's year end date is the most appropriate date for disclosure purposes. The following information has been provided by each Director through the completion of questionnaires. There have been no changes since the year end as at the date of approval of this Report.

Board Gender as at 31 March 2023

Board Ethnic Background as at 31 March 2023

As shown in the above tables, the Company has not as yet met the targets set out in LR 9.8.6R (9)(a)(i) and LR 9.8.6R (9)(a)(iii). The Board considers its normal size of four Directors to be appropriate for an investment trust, and retirement of each Director at the AGM following the ninth anniversary of their appointment to be an appropriate individual tenure. While the targets for diversity are inevitably more challenging to achieve for a smaller board with infrequent appointment opportunities, the Board is fully supportive of the principles behind the targets and they will be carefully considered in all future appointments. The biographical details of the Directors are included on the Company's website while the most recent Board appointment was in August 2022.

Chairman and Senior Independent Directors

The Chairman is responsible for providing effective leadership to the Board, by setting the tone of the Company, demonstrating objective judgement and promoting a culture of openness and debate. The Chairman facilitates the effective contribution and encourages active engagement by each Director. In conjunction with the Company Secretary, the Chairman ensures that Directors receive accurate, timely and clear information to assist them with effective decision-making. The Chairman acts upon the results of the Board evaluation process by recognising strengths and addressing any weaknesses and also ensures that the Board engages with major shareholders and that all Directors understand shareholder views.

The Senior Independent Director acts as a sounding board for the Chairman and acts as an intermediary for other directors, when necessary. Working closely with the Nomination Committee, the Senior Independent Director takes responsibility for an orderly succession process for the Chairman and leads the annual appraisal of the Chairman's performance. The Senior Independent Director is also available to shareholders to discuss any concerns they may have.

The names, biographies and contribution of each of the Directors are shown on the Company's website and indicate their range of experience as well as length of service. Each Director has the requisite high level and range of business and financial experience which enables the Board to provide clear and effective leadership and proper stewardship of the Company.

David Simpson is a non-executive director of ITC Limited ("ITC"), a major listed Indian company. ITC represented 2.3% of the Company's total portfolio as at 31 March 2022 prior to its sale in December 2022. Between the date of his appointment and up until the Company's sale of its holding in ITC, David Simpson recused himself from all discussions regarding ITC to avoid any potential conflict of interest. 

Hasan Askari and Stephen White retired as Directors at the conclusion of the AGM on 28 September 2022.

The Directors attended scheduled Board and Committee meetings during the year ended 31 March 2023 as follows (with their eligibility to attend the relevant meeting in brackets):

Michael Hughes, Rebecca Donaldson, David Simpson and Andrew Robson, each being eligible, retire and offer themselves for individual re-election as Directors of the Company.

The Board as a whole believes that each Director remains independent of the Manager and free of any relationship which could materially interfere with the exercise of his or her independent judgement on issues of strategy, performance, resources and standards of conduct and confirms that, following formal performance evaluations, the individuals' performance continues to be effective and demonstrates commitment to the role. The individual contribution of each Director is set out in the published Annual Report.

The Board has adopted a policy that all Directors, including the Chairman, shall not serve for more than nine years from the date of their initial date of appointment as a Director of the Company unless in relation to exceptional circumstances.

The Board therefore has no hesitation in recommending, at the next AGM, the individual re-elections of Michael Hughes, Rebecca Donaldson, David Simpson and Andrew Robson as Directors of the Company.

Directors' Insurances and Indemnities

The Company maintains insurance in respect of Directors' and Officers' liabilities in relation to their acts on behalf of the Company. Furthermore, each Director of the Company is entitled to be indemnified out of the assets of the Company to the extent permitted by law against all costs, charges, losses, expenses and liabilities incurred by them in the actual or purported execution and/or discharge of their duties and/or the exercise or purported exercise of their powers and/or otherwise in relation to or in connection with their duties, powers or office. These rights are included in the Articles of Association of the Company and the Company has granted deeds of indemnities to each Director on this basis.

Management of Conflicts of Interest and Anti-Bribery Policy

The Board has a procedure in place to deal with a situation where a Director has a conflict of interest. As part of this process, the Directors prepare a list of other positions held and all other conflict situations that may need to be authorised either in relation to the Director concerned or his/her connected persons. The Board considers each Director's situation and decides whether to approve any conflict, taking into consideration what is in the best interests of the Company and whether the Director's ability to act in accordance with his/her wider duties is affected. Each Director is required to notify the Company Secretaries of any potential, or actual, conflict situations which will need authorising by the Board. Authorisations given by the Board are reviewed at each Board meeting.

No Director has a service contract with the Company although Directors are issued with letters of appointment upon taking up office. Other than the deeds of indemnity referred to above, there were no contracts with the Company during, or at the end of the year, in which any Director was interested.

The Board takes a zero-tolerance approach to bribery and has adopted appropriate procedures designed to prevent bribery. abrdn also takes a zero-tolerance approach and has its own detailed policy and procedures in place to prevent bribery and corruption.

In relation to the corporate offence of failing to prevent tax evasion, it is the Company's policy to conduct all business in an honest and ethical manner. The Company takes a zero-tolerance approach to facilitation of tax evasion whether under UK law or under the law of any foreign country and is committed to acting professionally, fairly and with integrity in all its business dealings and relationships. 

Board Committees

The Directors have appointed a number of Committees as set out below. Copies of each Committee's terms of reference, which define its responsibilities and duties, are available on the Company's website or from the Company Secretaries, on request.

Audit Committee

The Audit Committee's Report is set out below.

Management Engagement Committee

The Board has established a Management Engagement Committee comprising all of the Directors, which was chaired until 28 September 2022 by Michael Hughes, and by Rebecca Donaldson thereafter.

The Committee is responsible for reviewing matters concerning the management agreement which exists between the Company and the Manager together with the promotional activities programme operated by the Manager to which the Company contributes. The terms and conditions of the Manager's appointment, including an evaluation of performance and fees, are reviewed annually and were last considered at the meeting of the Committee in November 2022.

In monitoring the performance of the Manager, the Committee considers the investment approach and investment record of the Manager over shorter and longer-term periods, taking into account the Company's performance against the Benchmark and peer group funds. The Committee also reviews the management processes, risk control mechanisms and promotional activities of the Manager.

The Committee considers the continuing appointment of the Manager, on the terms agreed, to be in the interests of the shareholders because it believes that the abrdn has the investment management, promotional and associated secretarial and administrative skills required for the effective and successful operation of the Company. A change to the investment management fee, with effect from 1 April 2023, was agreed during the year and further information may be found above.

Nomination Committee

The Board has established a Nomination Committee, comprising all of the Directors, which was chaired until 28 September 2022 by Hasan Askari, and by Michael Hughes thereafter. The Committee is responsible for undertaking an annual evaluation of the Board as well as longer term succession planning and, when appropriate, oversight of appointments to the Board.

The Company engaged Lintstock Ltd, an independent external service provider which has no other connection to the Company, to undertake a board evaluation in March 2021. Assisted by Lintstock Ltd, the Board assessed that it had in place the appropriate balance of skills, experience, length of service and knowledge of the Company, while also recognising the advantages of diversity. Details of the individual contribution made by each Director may be found on the Company's website.

In May 2023, the Board facilitated a self-assessment evaluation which was collated and discussed by the Chairman with the other Directors. David Simpson, as the Senior Independent Director, provided feedback to the Chairman.

As the Company has no employees and the Board is comprised wholly of non-executive directors and, given the size and nature of the Company, the Board has not established a separate remuneration committee and Directors' fees are determined by the Nomination Committee. In line with best practice in corporate governance, Hasan Askari did not chair the Committee in relation to his own succession. Chaired by Stephen White, the Committee approved the appointment of Michael Hughes as Chairman of the Company with effect from the conclusion of the AGM on 28 September 2022.

In relation to the appointment of Andrew Robson as a Director, the Company engaged Trust Associates, an independent search agency with no other connection to the Company.

Accountability and Audit

The responsibilities of the Directors and the Auditor, in connection with the financial statements, appear in the Statement of Directors' Responsibilities and in the Auditor's Report.

The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's Auditor is unaware, and each Director has taken all the steps that he or she could reasonably be expected to have taken as a Director in order to make himself or herself aware of any relevant audit information and to establish that the Company's Auditor is aware of that information. Additionally, there have been no important events since the year end which warrant disclosure.

The Directors review, as applicable, the level of non-audit services provided by the Auditor, together with the Auditor's procedures in connection with the provision of such services. No non-audit services were provided by the auditor during the year or to the date of this Report. The Directors remain satisfied that the Auditor is objectiveand independent.

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 substantially of a portfolio of quoted securities which in most circumstances are realisable within a short timescale. The Directors are mindful of the principal risks and uncertainties disclosed above and in Note 17 to the financial statements and have reviewed income forecasts detailing revenue and expenses; accordingly, the Directors believe that, the Company has adequate financial resources to continue in operational existence for the foreseeable future and for at least 12 months from the date of this Report.

In August 2022, the Company entered into a three-year, £30 million revolving credit facility (the "Facility") with Royal Bank of Scotland International Limited (London Branch), part of NatWest Group plc, of which £30 million was drawn down at 31 March 2023 (2022 - £30 million). 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 2025, the Company will enter 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 results of stress testing prepared by the Manager, which models a sharp decline in market levels and income, demonstrated that the Company had the ability to raise sufficient funds so as to both pay expenses and remain within its debt covenants.

Responsible Investment

The Board is aware of its duty to act in the interests of the Company. The Board acknowledges that there are risks associated with investment in companies which fail to conduct business in a socially responsible manner. Responsibility for actively monitoring the sustainability investing activities of portfolio companies has been delegated by the Board to the Manager which has sub-delegated that authority to the Investment Manager. Further information may be found at: abrdn.com/en/asieurope/responsible-investing

Substantial Interests

The Company had been notified of the following share interests above 3% in the Company as at 31 March 2023:

The above interests at 31 March 2023 were unchanged at the date of approval of this Report other than in relation to 1607 Capital Partners, which advised the Company on 19 May 2023 of a holding of 2,798,010 shares, equivalent to 5.1% of the Company's shares in issue (excluding treasury shares) and City of London, which advised the Company on 12 June 2023 of a holding of 7,711,453 shares, equivalent to 14.0% of the Company's shares in issue (excluding treasury shares).

Relations with Shareholders

The Directors place great importance on communication with shareholders. The Annual Report is widely distributed to other parties who have an interest in the Company's performance. Shareholders and investors may obtain up-to-date information on the Company through its website, abrdnnewindia.co.uk, or via the abrdn's Customer Services Department. The Company responds to letters from shareholders on a wide range of issues.

The Board's policy is to communicate directly with shareholders and their representative bodies without the involvement of the management group (either the Company Secretaries or abrdn) in situations where direct communication is required and representatives from the Board offer to meet with major shareholders on an annual basis in order to gauge their views.

In addition, members of the Board may accompany the Manager when undertaking meetings with institutional shareholders.

The Company Secretaries only act on behalf of the Board, not the Manager, and there is no filtering of communication. At each Board meeting the Board receives full details of any communication from shareholders to which the Chairman responds, as appropriate, on behalf of the Board.

The Notice of AGM included within the Annual Report is normally sent out at least 20 working days in advance of the meeting. All shareholders have the opportunity to put questions to the Board and Manager prior to the Company's AGM.

Annual General Meeting

The AGM will be held on 27 September 2023 and the AGM Notice and related notes may be found in the published Annual Report. Resolutions relating to the following items will be proposed at the AGM as special business.

Change of Investment Policy (Resolution 9)

The Company is proposing to amend its investment policy to allow investment into unquoted companies before their intended initial public offerings subject to a limit, measured in the aggregate and at the time of investment, of 10% of the Company's net asset value. The ability to invest in such opportunities over time is one of the benefits of the closed ended structure of the Company. This change requires both FCA and shareholder approval and it is intended that Resolution 9 will be put to shareholders at the forthcoming AGM for their approval.

Further information on the reasons for this amendment may be found in the Chairman's Statement.

Share Repurchases (Resolution 10)

At the AGM held on 22 September 2022, shareholders approved the renewal of the authority for the Company to repurchase its Ordinary shares.

The principal aim of a share buy back facility is to reduce the volatility in the discount. In addition, the purchase of shares, when they are trading at a discount, should result in an increase in the NAV per share for the remaining shareholders. This authority, if conferred, will only be exercised if to do so would result in an increase in the NAV per share for the remaining shareholders, and if it is in the best interests of shareholders generally. Any purchase of shares will be made within guidelines established from time to time by the Board. It is proposed to seek shareholder authority to renew this facility for another year at the AGM. Under the Listing Rules, the maximum price that may be paid on the exercise of this authority must not exceed the higher of: (i) 105% of the average of the middle market quotations for the shares over the five business days immediately preceding the date of purchase; and (ii) the higher of the last independent trade and the highest current independent bid on the trading venue where the purchase is carried out. The minimum price which may be paid is 25p per share. Shares which are purchased under this authority will either be cancelled or held as treasury shares.

Renewal of the authority to buy back shares is sought at the AGM as the Board considers that this mechanism has assisted in lowering the volatility of the discount reflected in the Company's share price and is also accretive, in NAV terms, for continuing shareholders. Special resolution 10 in the Notice of AGM will, if passed, renew the authority to purchase in the market a maximum of 14.99% of shares in issue as at 28 June 2023, being the nearest practicable date to the approval of this Report (equivalent to approximately 8.2 million Ordinary shares). Such authority will expire on the date of the AGM in 2024 or on 30 September 2024, whichever is earlier. This means in effect that the authority will have to be renewed at the next AGM, or earlier, if the authority has been exhausted.

Issue of Shares (Resolutions 11 and 12)

Ordinary resolution 11 in the Notice of AGM will, if passed, renew the authority to allot unissued share capital up to an aggregate of 10%, equivalent to approximately 5.5 million Ordinary shares, of the Company's existing issued share capital, excluding treasury shares, as at 28 June 2023, being the nearest practicable date to the approval of this Report). Such authority will expire on the date of the AGM in 2024 or on 30 September 2024, whichever is earlier, which means that the authority will have to be renewed at the next AGM or, earlier, if the authority has been exhausted.

When shares are to be allotted for cash, the Companies Act 2006 (the "Act") provides that existing shareholders have pre-emption rights and that the new shares must be offered first to such shareholders in proportion to their existing holding of shares. However, shareholders can, by Special resolution, authorise the Directors to allot shares otherwise than by a pro rata issue to existing shareholders. Special resolution 12 will, if passed, give the Directors power to allot for cash equity securities up to 10% (equivalent to approximately 5.5 million Ordinary shares), of the Company's existing issued share capital as at 28 June 2023, being the nearest practicable date to the approval of this Report), as if Section 561(1) of the Act did not apply. This is the same nominal amount of share capital which the Directors are seeking the authority to allot pursuant to resolution 11.

This authority will expire on the date of the AGM in 2024 or on 30 September 2024, whichever is earlier, which means that the authority will have to be renewed at the next AGM or, earlier, if the authority has been exhausted. This authority will not be used in connection with a rights issue by the Company.

The Directors intend to use the authorities given by resolutions 11 and 12 to allot shares, or sell shares from treasury, and disapply pre-emption rights only in circumstances where this will be clearly beneficial to shareholders as a whole. The issue proceeds would be available for investment in line with the Company's investment policy.

The Company is permitted to buy back and hold shares in treasury and then sell them at a later date for cash, rather than cancelling them. The Treasury Share Regulations require such sale to be on a pre-emptive, pro rata, basis to existing shareholders unless shareholders agree by Special resolution to disapply such pre-emption rights. Accordingly, in addition to giving the Directors power to allot unissued Ordinary share capital on a non pre-emptive basis, resolution 12, if passed, will give the Directors authority to sell Ordinary shares from treasury on a non pre-emptive basis. No dividends may be paid on any shares held in treasury and no voting rights will attach to such shares. The benefit of the ability to hold treasury shares is that such shares may be resold. This should give the Company greater flexibility in managing its share capital and improve liquidity in its shares. The Board would only expect to issue new Ordinary shares or sell Ordinary shares from treasury at a price per Ordinary share which represented a premium to the NAV per share. It is also the intention of the Board that sales from treasury would only take place when the Board believes that to do so would assist in the provision of liquidity to the market.

Recommendation

The Board considers all of the Resolutions to be put to shareholders at the AGM to be in the best interests of the Company and its members as a whole and are likely to promote the success of the Company for the benefit of its members as a whole. Accordingly, the Board unanimously recommends that shareholders should vote in favour of the resolutions to be proposed at the Annual General Meeting, as they intend to do in respect of their own shareholdings, amounting to 20,446 Ordinary shares.

Additional Information

Where not provided elsewhere in the Directors' Report, the following provides the additional information required to be disclosed by The Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008.

The Company is not aware of any significant agreements to which it is a party, apart from the management agreement, that take effect, alter or terminate upon a change of control of the Company following a takeover. Other than the management agreement with the Manager, further details of which are set out above, the Company is not aware of any contractual or other agreements which are essential to its business which might reasonably be expected to have to been disclosed in the Directors' Report.

The financial risk management objectives and policies arising from its financial instruments and the exposure of the Company to risk are disclosed in Note 17 to the Financial Statements.

Michael Hughes,Chairman28 June 2023

Statement of Corporate Governance

abrdn New India Investment Trust plc (the "Company") is committed to high standards of corporate governance. The Board is accountable to the Company's shareholders for good governance and this statement describes how the Company has applied the principles identified in the UK Corporate Governance Code as published in July 2018 (the "UK Code"), which is available on the Financial Reporting Council's (the "FRC") website: frc.org.uk and is applicable for the Company's Year.

The Board has also considered the principles and provisions of the AIC Code of Corporate Governance as published in February 2019 (the "AIC Code"). The AIC Code addresses the principles and provisions set out in the UK Code, as well as setting out additional provisions on issues that are of specific relevance to the Company. The AIC Code is available on the AIC's website: theaic.co.uk.

The Board considers that reporting against the principles and provisions of the AIC Code, which has been endorsed by the FRC, provides more relevant information to shareholders.

The Board confirms that, during the year ended 31 March 2023, the Company has complied with the provisions of the AIC Code, and the relevant provisions of the UK Code, except for those provisions relating to:

·  the composition of the Audit Committee (AIC Code provision 29): the other Directors consider that it is appropriate for the Chairman of the Board to be a member of, but not chair, the Audit Committee, due to the Board's small size, the lack of any perceived conflict of interest, and because the other Directors believe that Michael Hughes was independent on appointment and continues to be independent; and

·  the establishment of a remuneration committee (AIC Code provision 37): for the reasons set out in the AIC Code the Board considers that this provision is not relevant to the position of the Company, being an externally managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of this provision.

The Board considers that these provisions are not relevant to the position of the Company being an externally managed investment company. In particular, all of the Company's day-to-day management and administrative functions are outsourced to third parties. As a result, the Company has no executive directors, employees or internal operations. The Company has therefore not reported further in respect of these provisions.

Further information on how the Company has applied the AIC Code, the UK Code, the Companies Act 2006 and the FCA's DTR 7.2.6 can be found in the Annual Report as follows:

·  the composition and operation of the Board and its Committees are detailed in the Directors' Report and in the Audit Committee's Report;

·  the Board's policy on diversity and information on Board diversity is included in the Directors' Report;

·  the Company's approach to internal control and risk management is detailed in the Audit Committee's Report;

·  the contractual arrangements with the Manager are set out above while details of the annual assessment of the Manager may be found in the Management Engagement Committee;

·  the Company's capital structure and voting rights are summarise in the Directors' Report;

·  the substantial interests disclosed in the Company's shares are listed in the Directors' Report;

·  the rules concerning the appointment and replacement of Directors are contained in the Company's Articles of Association and are summarised in the Directors' Remuneration Report. There are no agreements between the Company and its Directors concerning compensation for loss of office; and

·  the powers to issue or buy back the Company's ordinary shares, which are sought annually, and any amendments to the Company's Articles of Association require a special resolution (75% majority) to be passed by shareholders and information on these resolutions may be found in the Directors' Report.

Michael Hughes,Chairman28 June 2023

Audit Committee's Report

The Audit Committee presents its Report for the year ended 31 March 2023.

Committee Composition

The Directors have appointed an Audit Committee (the "Committee") consisting of the whole Board, which was chaired by Stephen White until 28 September 2022, and by Andrew Robson thereafter. The other Directors consider that it is appropriate for the Chairman of the Board to be a member of, but not chair, the Committee. This is due to the Board's small size, the lack of any perceived conflict of interest and because the other Directors believe that Hasan Askari, the Chairman until 28 September 2022, was independent, while Michael Hughes, the Chairman thereafter, continues to be independent and brings considerable financial expertise to the Committee.

The Directors have satisfied themselves both that at least one of the Committee's members has recent and relevant financial experience (Andrew Robson is a member of the Institute of Chartered Accountants in England and Wales), and that the Committee as a whole possesses competence relevant to the investment trust sector.

Role of the Audit Committee

The principal function of the Committee is to assist the Board in relation to the reporting of financial information, the review of financial controls and the managementof risk.

The Committee meets not less than twice each year, in line with the cycle of annual and half-yearly reports, which is considered by the Directors to be a frequency appropriate to the size and complexity of the Company. The Committee has defined terms of reference which are reviewed and re-assessed for their adequacy on an annual basis. Copies of the terms of reference are available from the Company's website or from the Company Secretaries, on request.

In summary, the Committee's main functions are:

·  to review and monitor the internal control systems and risk management systems (including review of non-financial risks) on which the Company is reliant;

·  to consider annually whether there is a need for the Company to have its own internal audit function;

·  to review and monitor the integrity of the half-yearly report and annual financial statements of the Company;

·  to review, and report to the Board on, the significant financial reporting issues and judgements made in connection with the preparation of the Company's financial statements, half-yearly reports, announcements and related formal statements;

·  to review the content of the Annual Report and advise the Board on whether, taken as a whole, it is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy;

·  to meet with the Auditor to review their proposed audit programme of work and the findings of the Auditor. The Committee shall also use this as an opportunity to assess the effectiveness of the audit process;

·  to develop and implement policy on the engagement of the Auditor to supply non-audit services. During the year under review, no non-audit services were provided to the Company by KPMG LLP. All non-audit services must be approved in advance by the Committee and will be reviewed in light of statutory requirements to maintain the Auditor's independence;

·  to review a statement from the Manager detailing the arrangements in place within abrdn whereby its staff may, in confidence, escalate concerns about possible improprieties in matters of financial reporting or other matters (whistleblowing);

·  to review and approve the remuneration and terms of engagement of the Auditor;

·  to monitor and review annually the Auditor's independence, objectivity, effectiveness, resources and qualification;

·  to monitor the requirement for rotation of the Auditor and to oversee any tender for the external audit of the Company;

·  to keep under review the appointment of the Auditor and to recommend to the Board and shareholders the reappointment of the existing auditor or, if appropriate, the appointment of a new Auditor; and

·  to evaluate its own performance each year, in relation to discharging its main functions, by means of a section devoted to the Committee within the Directors' annual self-evaluation.

Activities during the Year

The Committee met on three occasions during the year to consider the Annual Report, the Half-Yearly Report and the Company's system of risk management and internal control. Reports from abrdn's internal audit, business risk and compliance departments were considered by the Committee at these meetings.

Review of Internal Controls Systems and Risk Management

The Board is ultimately responsible for the Company's system of internal control and risk management and for reviewing its effectiveness. The Committee confirms that there is a robust process for identifying, evaluating and managing the Company's significant business and operational risks, that it was in place for the year ended 31 March 2023 and up to the date of approval of this Annual Report, that it is regularly reviewed by the Board and accords with the FRC guidance on internal controls.

The principal risks and uncertainties facing the Company are identified in the Strategic Report.

The design, implementation and maintenance of controls and procedures to safeguard the assets of the Company and, to manage its affairs properly, extends to operational and compliance controls and risk management. This includes controls over financial reporting risks related to the preparation of the Annual Report, which are delegated to the Manager as part of the Management Agreement ("MA") and the Committee receives regular reports from the Manager as to how these controlsare operating.

Internal control and risk management systems are monitored and supported by the Manager's business risk and compliance functions which undertake periodic examination of business processes, including compliance with the terms of the MA, and ensures that any recommendations to improve controls are implemented.

Risk is considered in the context of the FRC and the UK Code guidance and includes financial, regulatory, market, operational and reputational risk. Risks are identified and documented through a risk heat-map, which is a pictorial representation of the risks faced by the Company, after taking account of any mitigating controls to minimisethe risk, ranked in order of likelihood and impact onthe Company.

The key components designed to provide effective risk management and internal control are outlined below:

·  the Manager prepares forecasts and management accounts which allow the Board to assess the Company's activities and review its performance; the emphasis is on obtaining the relevant degree of assurance and not merely reporting by exception;

·  the Board and Manager have agreed clearly-defined investment criteria, specified levels of authority and exposure limits. Reports on these issues, including performance statistics and investment valuations, are regularly submitted to the Board, and there are meetings with the Manger and Investment Manageras appropriate;

·  as a matter of course, the Manager's compliance department continually reviews the Manager's operations; and

·  written agreements are in place which specifically define the roles and responsibilities of the Manager and other third-party service providers.

The Committee has considered the need for an internal audit function but, due to the delegation of certain business functions to the Manager, has decided to place reliance on abrdn's systems and internal audit procedures, including the ISAE3402 Report, a global assurance standard for reporting on internal controls for service organisations, commissioned by the Manager's immediate parent company, abrdn. At its June 2023 meeting, the Committee carried out an annual assessment of risk management and internal controls for the year ended 31 March 2023 by considering documentation from the Manager, including the internal audit and compliance functions, and taking account of events since 31 March 2023.

The system of internal control and risk management is designed to meet the Company's particular needs and the risks to which it is exposed. Accordingly, this system is designed to manage, rather than eliminate, the risk of failure to achieve business objectives and, by its nature, can only provide reasonable, and not absolute, assurance against misstatement and loss.

External Agencies

The Board has contractually delegated to external agencies, including the Manager and other service providers, certain services: the management of the investment portfolio, the depositary services (which include the custody and safeguarding of the assets), the share registration services and the day-to-day accounting and company secretarial requirements. Each of these contracts was entered into after full and proper consideration by the Board of the quality and cost of services offered in so far as they relate to the affairs of the Company. The Board receives and considers reports from each service provider, including the Manager, on a regular basis. In addition, ad hoc reports and information are supplied to the Board as requested.

Financial Reporting and Significant Issues

During its review of the Company's financial statements for the year ended 31 March 2023, the Committee identified one potentially significant financial reporting risk facing the Company which is unchanged from the prior year, namely valuation and existence of investments, as well as several additional risks, which also reflected the Auditor's assessment of the principal financial statement risks affecting the Company as part of the Auditor's planning and reporting of the year end audit.

Valuation and Existence of Investments

The valuation of investments is undertaken in accordance with the accounting policies, disclosed in Notes 2(a) and 2(g) to the financial statements. With reference to the IFRS 13 fair value hierarchy, all of the Company's investments at 31 March 2023 were categorised as Level 1 as they are considered liquid and quoted in active markets. The portfolio is reviewed and verified by the Manager on a regular basis and management accounts including a full portfolio listing are prepared each month and circulated to the Board. BNP Paribas Trust Corporation UK Limited (the "Depositary") has been appointed as depositary to safeguard the assets of the Company. The Depositary checks the consistency and accuracy of its records on a monthly basis and reports its findings to the Manager. Separately, the investment portfolio is reconciled regularly by the Manager.

Other Financial Reporting Issues

As well as fraud risk and corporate governance and disclosures, the other accounting area of financial reporting particularly considered by the Committee was compliance with Sections 1158 and 1159 of the Corporation Tax Act 2010. Approval of the Company as an investment trust under those sections for financial years commencing on or after 1 April 2012 has been obtained and ongoing compliance with the eligibility criteria is monitored on a regular basis by the Manager and reported to the Directors.

Review of Auditor

The Committee has reviewed, and considered appropriate, the effectiveness of the Auditor including:

·  Independence - the Auditor discusses with the Committee, at least annually, the steps it takes to ensure its independence and objectivity and makes the Committee aware of any potential issues, explaining all relevant safeguards;

·  Quality of audit work - including the ability to resolve issues in a timely manner (identified issues are satisfactorily and promptly resolved), its communications/presentation of outputs (the explanation of the audit plan, any deviations from it and the subsequent audit findings are comprehensive and comprehensible), and working relationship with management (the Auditor has an effective working relationship with the Manager); and

·  Quality of people and service - including continuity and succession plans (the audit team is made up of sufficient, suitably experienced staff with provision made for knowledge of the investment trust sector and retention on rotation of the senior statutory auditor).

Tenure and Reappointment of KPMG LLP as Auditor

KPMG has expressed its willingness to be reappointed auditor to the Company. Resolution 8, which is to be put to shareholders at the forthcoming AGM, proposes the reappointment of KPMG as Independent Auditor of the Company, and also seeks authorisation for the Directors to fix KPMG's remuneration for the year to 31 March 2024.

Listed companies are required to tender the external audit at least every ten years and change audit firm at least every twenty years. The Committee last undertook an audit tender process in 2016 when KPMG LLP was appointed as auditor in respect of financial years ended on or after 31 March 2017. The Company is required to tender the external audit no later than for the year ending 31 March 2027. In accordance with professional and regulatory standards, the audit director responsible for the audit is rotated at least every five years in order to protect independence and objectivity and to provide fresh challenge to the business. The year ended 31 March 2023 is the fifth year for which the present audit director from KPMG LLP, Gary Fensom, has served as the senior statutory auditor.

Andrew RobsonChairman of the Audit Committee28 June 2023

Directors' Remuneration Report

This Directors' Remuneration Report comprisesthree parts:

1. a Remuneration Policy, which is subject to a binding shareholder vote every three years - was most recently approved by shareholders at the AGM on 23 September 2020 where the proxy votes for the relevant resolution were: For - 34.8m votes (99.7%); Discretionary - 18,900 votes (0.1%); Against - 69,596 votes (0.2%); and Withheld - 80,801 votes. The Remuneration Policy will be put to shareholders again at the AGM on 27 September 2023, as resolution 3;

2. an annual Implementation Report, which is subject to an advisory vote; and

3. an Annual Statement.

The law requires the Company's Auditor to audit certain of the disclosures provided. Where disclosures have been audited, they are indicated as such. The Auditor's opinion is included in their report.

The Directors' Remuneration Policy and level of Directors' remuneration are determined by the Nomination Committee, which was chaired by Hasan Askari until 28 September 2022, and by Michael Hughes thereafter, and comprises all of the Directors. The Remuneration Policy is reviewed by the Nomination Committee on an annual basis.

Remuneration Policy

The Board's policy is that the remuneration of non-executive Directors should be sufficient to attract Directors of the quality required to run the Company successfully. The remuneration should also reflect the nature of the Directors' duties, responsibilities and the value of their time spent and be fair and comparable to that of other investment trusts that are similar in size and have a similar capital structures and investment objectives.

Appointment

·  The Company only intends to appoint non-executive Directors.

·  All the Directors are non-executive appointed under the terms of Letters of Appointment.

·  Directors must retire and be subject to election, at the first AGM after their appointment, and re-election at least every three years thereafter, although the Board has approved a policy of annual re-election.

·  New appointments to the Board will be placed on the fee applicable to all Directors at the time of appointment.

·  No incentive or introductory fees will be paid to encourage a Directorship.

·  The Directors are not eligible for bonuses, pension benefits, share options, long term incentive schemes or other benefits.

·  Directors are entitled to re-imbursement of out-of-pocket expenses incurred in connection with the performance of their duties, including travel expenses.

·  The Company indemnifies its Directors for all costs, charges, losses, expenses and liabilities which may be incurred in the discharge of their duties.

Performance, Service Contracts, Compensation and Loss of Office

·  The Directors' remuneration is not subject to any performance-related fee.

·  No Director has a service contract.

·  No Director was interested in contracts with the Company during the period or subsequently.

·  The terms of appointment provide that a Director may be removed without notice.

·  Compensation will not be due upon leaving office. 

·  No Director is entitled to any other monetary payment or to any assets of the Company.

Statement of Voting at General Meeting

At the Company's last AGM, held on 28 September 2022, shareholders approved the Directors' Remuneration Report (other than the Directors' Remuneration Policy) in respect of the year ended 31 March 2022 and the following proxy votes were received on the Resolution: For - 35.5m votes (99.8%); Discretionary - 22,055 votes (0.1%); Against - 62,421 votes (0.1%); and Withheld - 52,502 votes.

The fact that the Remuneration Policy is subject to a binding vote at every third AGM does not imply any change on the part of the Company. The principles remain the same as for previous years. There have been no changes to the Directors' Remuneration Policy during the period of this Report nor are there any proposals for the foreseeable future.

This part of the Remuneration Report provides details of the Company's Remuneration Policy for Directors of the Company. This policy takes into consideration the principles of the UK Corporate Governance Code. No shareholder views were sought in setting the Remuneration Policy although any comments received from shareholders would be considered on an ongoing basis. As the Company has no employees and the Board is comprised wholly of non-executive Directors and, given the size and nature of the Company, the Board has not established a separate Remuneration Committee during the year under review. The Nomination Committee is responsible for determining Directors' remuneration.

The Directors' Remuneration Policy was approved by shareholders at the AGM on 23 September 2020.

Implementation Report

The Directors are non-executive and the limit on their aggregate annual fees is set at £200,000 within the Company's Articles of Association. This limit may only be amended by shareholder resolution and a resolution to increase the limit from £150,000 was last approved by shareholders at the AGM in 2018.

Review of Directors' Fees

The levels of fees for the year and the preceding year are set out in the table below.

The Nomination Committee carried out a review of Directors' annual fees during the year, including assessing the prevailing inflation rate and the increased time required by the Company to devote to regulatory matters, and concluded that these should change, with effect from 1 April 2023, to the following fees per annum: £40,000 (Chairman), £34,500 (Audit Committee Chairman) and £30,000 for each other Director. There are no further fees to disclose as the Company has no employees, chief executive or executive directors.

Spend on Pay

As the Company has no employees, the Directors do not consider it appropriate to present a table comparing remuneration paid to employees with distributions to shareholders. The fees paid to Directors are shown in the table.

Company Performance

During the year the Board carried out a review of investment performance. The graph shows the share price total return (assuming all dividends are reinvested) to Ordinary shareholders compared to the total return from the Benchmark for the ten-year period to 31 March 2023 (rebased to 100 at 31 March 2013). This Benchmark was selected for comparison purposes as it is used by the Board for investment performance measurement.

Fees Payable (Audited)

The Directors who served in the year received the fees, as set out in the table below, which excluded employers' National Insurance contributions.

Fees are pro-rated where a change takes place during a financial year. There were no payments to third parties from the fees referred to in the table.

Directors' Interests in the Company (Audited)

The Directors are not required to have a shareholding in the Company. The Directors (including their connected persons) at 31 March 2023 and 31 March 2022 had no interest in the share capital of the Company other than those interests, all of which are beneficial, in the table below, which were also unchanged as at the date ofthis Report:

Annual Percentage Change in Directors' Remuneration (Audited)

The table below sets out the annual percentage change in Directors' fees for the past year.

Annual Statement

On behalf of the Board and in accordance with Part 2 of Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) (Amendment) Regulations 2013, the Board confirms that the above Report on Remuneration Policy and Remuneration Implementation summarises, as applicable, for the year ended 31 March 2023:

·  the major decisions on Directors' remuneration;

·  any substantial changes relating to Directors' remuneration made during the year; and

·  the context in which the changes occurred and in which decisions have been taken.

Michael Hughes,Chairman28 June 2023

Statement of Directors' responsibilities in respect of the Annual Report and financial statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law they have elected to prepare the financial statements in accordance with UK-adopted international accounting standards and applicable law.

Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that period. In preparing these financial statements, the Directors are required to: 

·  select suitable accounting policies and then apply them consistently; 

·  make judgements and estimates that are reasonable, relevant and reliable; 

·  state whether they have been prepared in accordance with UK adopted international accounting standards;

·  assess the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern; and

·  use the going concern basis of accounting unless they either intend to liquidate the Company or to cease operations or have no realistic alternative but to do so.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies Act 2006. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. 

Under applicable law and regulations, the Directors are also responsible for preparing a Strategic Report, Directors' Report, Directors' Remuneration Report and Corporate Governance Statement that complies with that law and those regulations.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company's website but not for the content of any information included on the website that has been prepared or issued by third parties. Legislation in the UK governing the preparation and dissemination of financial statements may differ from legislation inother jurisdictions.

In accordance with Disclosure Guidance and Transparency Rule 4.1.14R, the financial statements will form part of the annual financial report prepared using the single electronic reporting format under the TD ESEF Regulation. The auditor's report on these financial statements provides no assurance over the ESEF format.

Responsibility Statement of the Directors in respect of the Annual Financial Report

We confirm that to the best of our knowledge:

·  the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and

·  the strategic report includes a fair review of the development and performance of the business and the position of the issuer, together with a description of the principal risks and uncertainties that they face.

We consider the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's position and performance, business model and strategy.

For and on behalf of the BoardMichael Hughes,Chairman28 June 2023

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to the Financial Statements

For the year ended 31 March 2023