ASHOKA INDIA EQUITY INVESTMENT TRUST PLC
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ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2023
ASHOKA INDIA EQUITY INVESTMENT TRUST PLC ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023
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Ashoka India Equity Investment Trust plc Annual Report and Audited Financial Statements for the year ended 30 June 2023
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INVESTMENT OBJECTIVE, FINANCIAL INFORMATION AND PERFORMANCE SUMMARY 2
STRATEGIC REPORT
CHAIRMAN’S STATEMENT 3
INVESTMENT MANAGER’S REPORT 6
TOP TEN HOLDINGS 10
INVESTMENT POLICY, RESULTS AND KEY PERFORMANCE INDICATORS 11
RISK AND RISK MANAGEMENT 14
ENVIRONMENTAL, SOCIAL AND GOVERNANCE POLICY 18
SECTION 172 STATEMENT 24
OTHER INFORMATION 27
INVESTMENT TEAM 29
GOVERNANCE
DIRECTORS’ REPORT 30
CORPORATE GOVERNANCE 36
DIRECTORS’ REMUNERATION POLICY & IMPLEMENTATION REPORT 42
AUDIT COMMITTEE REPORT 47
STATEMENT OF DIRECTORS’ RESPONSIBILITIES 51
INDEPENDENT AUDITOR’S REPORT 53
FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME 65
STATEMENT OF FINANCIAL POSITION 66
STATEMENT OF CHANGES IN EQUITY 67
STATEMENT OF CASH FLOWS 68
NOTES TO THE FINANCIAL STATEMENTS 69
OTHER INFORMATION
ALTERNATIVE PERFORMANCE MEASURES 88
GLOSSARY 89
DIRECTORS, INVESTMENT MANAGER AND ADVISERS 92
NOTICE OF ANNUAL GENERAL MEETING 93
FORM OF PROXY 100
Contents
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Investment Objective
The investment objective of the Ashoka India Equity Investment Trust plc (the “Company”) is to achieve long-term
capital appreciation, mainly through investments in securities listed in India and listed securities of companies with
a significant presence in India.
Financial information
As at 30 June 2023 As at 30 June 2022
Net asset value (“NAV”) per Ordinary Share (cum income) 206.2p 174.2p
Ordinary Share price 209.0p 175.0p
Ordinary Share price premium to NAV
1
1.4% 0.5%
Net assets £232.6million £187.4million
Performance summary
30 June 2023
% change
30 June 2022
% change
Share price total return per Ordinary Share
1,2
19.4% 7.7%
NAV total return per Ordinary Share
1
18.3% 9.6%
MSCI India IMI Index total return (sterling terms)
2,3
11.8% 7.2%
1 These are Alternative Performance Measures.
2 Total returns in sterling for the year ended 30 June 2023 and 2022.
3 Source: Bloomberg
Alternative Performance Measures (“APMs”)
The disclosures as indicated in the footnote above represent the Company’s APMs. Definitions of these APMs and
other performance measures used by the Company, together with how these measures have been calculated, can
be found on page 88.
Investment Objective, Financial Information and
Performance Summary
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Welcome to the fifth annual results of Ashoka India Equity
Investment Trust plc for the year to 30 June 2023. When
the Company was launched in 2018, no-one could have
predicted the events that soon followed, particularly the
Covid pandemic that so damaged the world’s economy
and cost too many lives but also the devastating war in
Ukraine that, at the very least, threatens food supplies
globally, especially to the poorest countries. Neither, I
think, would we have confidently predicted that both the
Company’s net asset value and share price would more
than double in that period as the Investment Manager
and Investment Adviser used their considerable skills
to invest in the companies benefiting most from India’s
fast-growing economy.
But here we are, with Covid behind us but, very sadly,
the war still raging. What a sad indictment this is of a
modern, high-tech world that man should be fighting
man in the equivalent of early twentieth century trench
warfare.
I make no apologies for these references, yet again,
in my annual statement because although global
trade has made the world a much smaller place, such
“disruptions” make the life of an investment manager
increasingly difficult with many new obstacles to
navigate and questions to ask before making confident
investment decisions. This, then, makes the continuing
outperformance of the Company even more impressive.
Acorn Asset Management and White Oak Capital
Management (Investment Manager and Investment
Adviser respectively) maintained their focus and
remained diligent, producing performance ahead of the
Company’s benchmark index for the year under review.
The five-year numbers are particularly impressive.
Performance
The Company’s NAV returned 18.3% over the period and
the share price 19.4% against its benchmark index, the
India Investible Market Index (“MSCI IMI” or “MSCI India
IMI Index (in sterling terms)”), which returned 11.8%.
Impressively, since the Company’s inception in July 2018,
the NAV has increased by 110.4% and the Company’s
share price by 109%, both comfortably ahead of the
benchmark index which grew by 60.9% (in sterling
terms). The Company’s share price stood at 209p at the
year end, a 1.4% premium to NAV.
Since the end of the Company’s 2023 financial year, both
NAV and share price have been strong; as at 4 October
2023, the latest practicable date before publication of
this report, the NAV was 226.26p and the share price
stood at 229p.
Share Issuance
The Company continued to respond to demand, both
from existing shareholders and new investors, to issue
new shares, at a small premium to the prevailing net
asset value. In total, 5,240,140 new shares were issued
during the year under review, raising a total of £10,735,051.
As at the year end there were 112,807,812 shares in issue.
Revenue and Dividends
The Company’s principal objective is to provide
returns through long-term capital appreciation, with
income being a secondary consideration. Therefore,
shareholders should not expect that the Company will
pay an annual dividend, under normal circumstances.
Whilst the portfolio does generate a small amount of
income, this is used to defray running costs. However,
if a sufficient surplus is generated, the Company may
declare an annual dividend to maintain UK investment
trust status. In the year under review, total surplus
income amounted to £128,000. No dividend has been
declared.
Redemption Facility
The Company has a redemption facility through which
shareholders are entitled to request the redemption
of all or part of their holding of Ordinary Shares on an
annual basis. The Redemption Point for the Ordinary
Shares this year is 30 September 2023.
Chairman’s Statement
STRATEGIC REPORT
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Chairman’s Statement (continued)
As announced on 5 September 2023, the total number
of Ordinary Shares in respect of which valid redemption
requests were received for this Redemption Point was
547,339.
On 2 October 2023, the Company announced that all of
the 547,339 Ordinary Shares under the 2023 Redemption
Facility were successfully matched with buyers, at a
price of 225.23 pence per Ordinary Share.
Performance Fee
To remind shareholders of the Company’s fee
arrangements, no annual management fee is paid;
the Investment Manager, Acorn Asset Management
Ltd, is remunerated solely by means of a performance
fee, based on the level of performance relative to the
Company’s benchmark index, the MSCI IMI, over a
three-year period ending 30 June 2024. Details of the
performance fee can be found on page 77 of this Report.
The Company’s portfolio is actively managed and
seeks an excess return relative to its benchmark index
(known as “alpha”). This investment style may lead to
occasional greater volatility than the benchmark index
but has produced outstanding returns for shareholders
since inception. The Board remains fully supportive of
this investment approach and remuneration structure.
Board Committee visit to Singapore and
India
It has been four years since the Board undertook a visit
to the offices of the Company’s Investment Manager
and Investment Adviser. Since then, White Oak Capital
Management has grown into a business that manages
over $5.5 billion on behalf of clients, has increased in
headcount, excluding salespeople, to over 50 investment
professionals and analysts based in Mumbai, London,
Madrid and in its recently-opened office in Singapore.
A visit was, therefore, overdue so a Committee of the
Board visited Singapore and Mumbai during March
2023. I am pleased to report that the Committee was
suitably impressed with how the business had grown
without compromising standards with regard to the
stock selection process or pre-investment corporate
governance.
Under normal circumstances and to give appropriate
comfort to the Company’s shareholders, the Board
considers it best practice to make a due-diligence visit
to the Investment Manager’s office every three years.
This year’s trip took place in late March so the next is
scheduled for 2026.
Annual General Meeting
The Company will hold its Annual General Meeting on
8 December 2023 at the offices of White Oak Capital
Management Ltd at 13 Hanover Square, London W1S 1HN
starting at 12 noon. An online presentation will be given
by the Investment Manager (given they are not based
in the UK) and the Board will be delighted to see all
shareholders who are able to attend in person.
Outlook
The Investment Manager’s report that follows goes into
further detail on the portfolio’s performance over the
last year and the challenges they faced.
India has come a long way since Narendra Modi took
over as Prime Minister in 2014, initiating a plan for India to
become a developed nation within 25 years. It is certain
that, come next year’s election, he will make much of the
progress over that 10-year period and he would be right
to do so. India’s population, at 1.4 billion, overtook China’s
this year and the differences between the world’s largest
autocracy and the world’s largest democracy in the
race for economic growth remain stark; China’s leader
favours a retention of power over a well-functioning
economy thus reducing the potential for entrepreneurial
flair that is so evident in India. It seems very likely that
growth will expand for the foreseeable future with
material investments in renewable energy, high-speed
railways and new roads in a generational boost to India’s
economy. Of this expanding population, a significant
number will grow up as well-educated, tech-savvy
individuals who speak fluent English and, therefore, be
well equipped to converse in the business markets of the
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world. Hosting the G20 conference in September added
further to both India’s and Modi’s personal status.
The “global south”, as this part of the world is now
being referred to, is growing in importance, both
geographically, politically and economically. It is not at
all unreasonable to assume that India is the unelected
leader of such a bloc and its relevance and importance
is only likely to grow in direct proportion to its economic
growth and continuing status as a democracy, perhaps
eventually leading to a permanent seat on the UN
Security Council, further burnishing Modi’s personal
credentials and India’s world status.
Global inflation is easing and, war to one side, India
is coping well with supply lines both in and out of the
country. Growth is forecast to reach 6% this year,
materially in excess of any other major economy, and is
likely to continue apace into 2024-5.
Your Board is frequently informed of the innovative
investment possibilities presenting themselves to the
Company’s management teams and, regardless
of mentioned headwinds, the dynamism of Indian
entrepreneurs is self-evident and undimmed. Whilst it
is understandable for all parties to be excited by these
investment opportunities, I will repeat my annual mantra
to shareholders that strong corporate governance and
research both continue to play prominent roles when
selecting every investment within the Company’s portfolio.
Here I go again, wishing that the following year is better
than the current one. Looking at last year’s wish list,
only the satisfactory resolution of Russia’s invasion of
Ukraine has yet to come to pass. Other factors, such as
inflation, interest rates and supply lines, all show signs
of improvement. Stock markets anticipate events 12-
18 months ahead but even optimistic investors require
signs that the world is not coming to an end any time
soon. I think the wish list remains the same, to which I
will add “a period of stability, peace and calm”. India
is exceptionally well placed to continue its growth
trajectory regardless but I’m sure its people would not
be averse to agreeing with me.
As ever, thank you for being a shareholder in the
Company. The Investment Manager and Investment
Adviser remain as dedicated as ever to their task and
your Board are equally confident in their ability to
produce top quality returns for shareholders over the
longer term.
Andrew Watkins
Chairman
6 October 2023
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Investment Manager’s Report
Market Review
The MSCI India IMI Index (in sterling terms) was up by
11.8% during the year to 30 June 2023, outperforming
the broader emerging markets but underperforming
the developed markets. In the same period, the MSCI
Emerging Markets Index was down by 2.6%, the S&P 500
returned 13.9%, and the MSCI World Index was up by
13.5% (all in sterling terms). Crude oil prices fell by 32.4%
and the Indian rupee depreciated by 7.3%. Amongst
sectors, industrials, financials and consumer staples
outperformed whilst utilities, energy and information
technology underperformed.
Performance Review
The Company has delivered a sterling NAV total return
of 18.3% during the year, outperforming the benchmark
MSCI India IMI (in sterling terms) by 6.5%. Despite
a turbulent market environment, the portfolio has
generally outperformed during the year given that it is
very well diversified and balanced across both cyclical
and counter-cyclical sectors while consciously avoiding
market timing, sector rotation and other such top-down
bets.
Key contributors & detractors
Contributors
Kaynes Technology is a fully integrated electronic
manufacturing service company with end-to-
end operations delivering component assemblies
and box-build solutions. It provides value-added
electronics manufacturing services and original design
manufacturing solutions. The company holds long-term
relationships with multiple customers diversified across
verticals such as automotive, industrial, and railways,
which limit the impact of downturn associated with a
particular vertical. The stock’s outperformance was led
by continued strong operating results driven by new
customer additions across verticals and increased
wallet share within existing customers.
Cholamandalam Investment and Finance (CIFC) is
a non-banking financial company (NBFC) belonging
to the Murugappa Group. It primarily operates in
vehicle finance, home equity, and affordable home
loan categories. In terms of customer profile, it caters
predominantly to single truck and small fleet owners,
self-employed non-professionals, in semi-urban and
rural India. CIFC’s strength lies in its ability to reach
such customers in rural and semi-urban markets and
underwrite and collect from customers with irregular
income streams. The Vehicle Finance business is in an
upcycle after a period of weak demand in the last couple
of years. Apart from briskly scaling up its housing finance
business, which on a low base could grow upwards of
25% in the coming years, CIFC has also made progress
in three new segments, namely Consumer & Small
Enterprise Loan (CSEL), Secured Business & Personal Loan
(SBPL) and SME Loan (SME). The stock outperformed as
the company continued to deliver sector leading return
ratios despite being in the investment phase for the new
lines of business.
ICICI Bank is one of the leading private sector banks
in India. Given the under-penetration of credit, the
Indian banking sector offers a long runway for growth.
Well run private sector banks, such as ICICI Bank are
gaining market share from poorly run government
owned banks, which account for two-thirds of the
industry. The management team has been leveraging
ICICI’s wide distribution franchise, a new risk-based
pricing approach, and digital offerings to accelerate
market share and enhance the return ratios. The bank’s
asset quality has also remained robust. The stock
outperformed on the back of continued strong business
performance.
Detractors
Infosys is India’s second-largest IT services company. It
has a strong global presence, including the key markets
of North America and Europe and a high-quality
customer portfolio. Banking and Financial Services
(BFSI) is the largest vertical, contributing approximately
30% of overall revenues. It operates across seven major
verticals (or revenue generating segments catering to
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a particular industry): (a) banking, financial services
and insurance; (b) retail and Consumer Packaged
Goods (“CPG”); (c) communications; (d) energy and
utilities; (e) manufacturing; (f) hi-tech; and (g) life
sciences. The company expects strong demand in retail
banking, commercial banking, payments and wealth
management segments leading to robust growth
demonstrated by better win rates and a healthy deal
pipeline over multiple years. However, the near-term
global slowdown and aggressive cuts to discretionary
tech spending by some corporations have led to
relatively weak quarterly results for Infosys. Muted results
and a moderate 4-7% growth projection for FY24 led to
the stock’s underperformance.
Tatva Chintan Pharma (“Tatva”) is a specialty chemical
manufacturing company which is a pioneer in processes
such as conventional synthesis, electrolysis and
developing continuous flow chemistry and generating
higher efficiencies. It is the second largest manufacturer
of SDAs for Zeolites globally and the largest commercial
supplier in India, the largest producer of electrolyte
salts for super capacitor batteries in India, the largest
producer of Glymes in India and the third largest in
the world. The stock underperformed due to the global
semi-conductor shortage for most of 2022, resulting
in muted demand for Tatva’s products from the auto
industry. It has since shown signs of recovery. Tatva has
also recently expanded its capacity so that it can cater
for higher demand going forward.
Shaily Engineering Plastics (“Shaily”) manufactures
precision injection moulded plastic components,
sub-assemblies, moulds, and dies for various original
equipment manufacturers. It is one of India’s leading
exporters of plastics components. Its plastics can be
found worldwide covering a diverse range of products
like medical devices, homewares, and automotive
components. The stock underperformed due to
headwinds to growth in its Furnishing and Toys segments,
as a result of the adverse macro conditions both in the
US and Europe. However, it was partially offset by an
improved margin profile in the healthcare segment.
Shaily is structurally moving towards higher margin
precision injection moulded plastic components with
their own technology which should drive performance
going forward.
Investment Outlook
India’s economy delivered solid, above expectation GDP
growth of 7.2% for the fiscal year ending March 2023.
Its healthy macro-fundamentals, resilient corporate
earnings as well as promising growth prospects –
garnered strong foreign and domestic investment
against a global back drop of geopolitical tensions,
higher commodity prices and credit costs, as well as
fears of a recession in the US and Europe.
To take inflation, India recorded an average CPI of 6.7%
for the year to 30 June 2023 compared to 7.4% and 8.8%
in the US and EU, respectively. The government’s focus
on a capital expenditure push as opposed to a loose
consumption stimulus (which was relatively lower during
the pandemic, leading to increased availability of labour
as the pandemic subsided) has kept India’s inflation at
manageable levels. For the current fiscal year, India’s
inflation is likely to be around 5.5% as global growth slows,
keeping commodity prices benign. Moderating inflation
will help contain the government’s fiscal deficit through
lower subsidies, providing room for the Reserve Bank of
India to avoid raising policy rates, and help support the
margins of Indian based corporations. India’s external
sector position is also likely to improve in FY24. The
Current Account Deficit (“CAD”) as a percentage of
GDP is likely to be recorded at 1.5% in FY24 (compared
to 2% in FY23). This coupled with healthy capital flows
should ensure that India’s Balance of Payments remains
positive. Additionally, India’s healthy foreign exchange
reserve, which stands at US$607 billion results in one
of the lowest debt-to-GDP (19%) positions globally, and
provides comfort against any potential global macro
volatility.
India’s economy is experiencing the start of a growth
phase as ingredients for a revival in the investment
cycle seem to be in place. The twin balance sheet
problem (overleveraged corporate balance sheets and
high non-performing assets (“NPAs”) of banks) which
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Investment Manager’s Report (continued)
held back private investments in the last decade seem
to be behind us. Corporate debt is at its lowest in many
years and banks are enjoying one of the lowest bad-
loans ratios in the last decade (gross and net bank NPA
ratios stand at 3.9% and 1% respectively). This provides a
conducive environment for private sector capex to pick
up from here.
Government capex has also grown at a brisk pace
recently, reflecting policy commitment to building
infrastructure and facilitating private investment. The
FY24 budget signalled continuity on public capex (roads,
railways and housing), enhancing the ease of doing
business and boosting exports and manufacturing.
Given this is a pre-election year, public sector capex
growth is likely to remain robust. As estimated by various
global agencies, such as the IMF and the World Bank,
India is likely to emerge as the fastest growing major
economy over this decade.
The pandemic and geopolitical tensions over the last
few years have accelerated supply chain diversification
across various industries. India’s favourable
demographics, with 900 million people of working
age, makes it an attractive destination for companies
to set up their production base. The production linked
incentives issued by the government since 2020, for
setting up new manufacturing units producing and
exporting from India, have started to show results. A
number of global giants are in the process of starting
production in India. Despite the strong growth in the
export of electronics, India’s global share in many other
sectors such as chemicals and engineering goods
is still small (approximately 2% to 4%). Even a 1% to 2%
incremental market share gain from China, could result
in high-teens growth rates for these sectors.
India’s well diversified corporate sector continues to
generate stable earnings growth. Earnings growth for
the Nifty is projected to grow by mid-teens over the near
term, marking the best phase of corporate profitability
since the period 2003 to 2007. Despite periodically
rising concerns over the impact of higher credit or
raw material costs on the broader market, we believe
several of our portfolio companies are market leaders
and have managed inflationary scenarios fairly well.
The underlying trend of market share consolidation in
favour of stronger, well-run businesses continues. The
unbranded (or unorganised) segment of the market has
found it challenging to deal with higher input costs and
frequent supply chain disruptions. Also, in the context
of potentially slowing global growth, it is worth re-
iterating that India’s earnings have generally been more
resilient than its emerging market peers during previous
downcycles.
In view of these positives, the broader Indian equity
market has seen a recovery rally since April 2023 and
valuations are back to 23x (FY24 P/E multiple), as
compared to the 10 year average of 19x for BSE Sensex.
Although the market seems expensive, in the last 10
years, bar a few instances during market corrections
between 2016 and 2020, India has consistently traded
at a premium relative to other emerging markets. We
never take a call on aggregate market valuations. What
we are looking for are attractively valued businesses on
a relative basis. Within the market, sectors or businesses
trade at different valuations based on their respective
risk-reward dynamics. It is the relative framework within
which we identify investment opportunities. If a well-
governed, scalable business is able to generate superior
returns on incremental capital, and if after factoring in a
certain projected growth we see material upside from
current stock price levels, then we will invest. From the
lens of our proprietary Opco-Finco framework, which
evaluates businesses’ economic cash flow over and
above the cost of capital, Ashoka India Equity Investment
Trust’s FY24 P/E multiple would be 36.2x as opposed
to 45.5x for the Sensex, highlighting the portfolio’s
reasonable valuations in our view.
India offers a diversified sector exposure relative to its
international peers, with a good mix of cyclical and
counter cyclical businesses. Our approach has always
been to maintain a balanced portfolio, to ensure that
our portfolio’s performance is driven by stock selection
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rather than non-stock specific risk factors such as
market timing, beta, sector rotation and so on.
Separately, from a potential risk perspective, general
elections in India are likely to be held in April or May 2024.
Although the current Prime Minister’s popularity remains
intact, and the risk of regime change appears low, such
an event or a weak coalition government could be a
negative surprise for the market. The markets would
like to see policy continuity. Furthermore, any sustained
weakness in global growth could weigh on market
performance. On the other hand, a sharp reversal
in anticipated global risk factors such as inflation,
recession, or geopolitical tensions could boost investor
sentiment.
In conclusion, we remain optimistic and continue to
believe the structural growth drivers of the Indian
economy are deep rooted which, notwithstanding the
near-term challenges, presents India as an attractive
long-term investment opportunity.
Acorn Asset Management Ltd
Investment Manager
6 October 2023
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Top Ten Holdings
As at 30 June 2023 Sector % of net
assets
ICICI Bank Limited Financials 14,728,344 6.3
Cholamandalam Investment and Finance Company Limited Financials 10,842,348 4.7
Kaynes Technology India Information Technology 7,677,216 3.3
Titan Company Limited Consumer Discretionary 7,616,073 3.3
Avalon Technologies Limited Information Technology 7,471,660 3.2
Coforge Information Technology 6,595,653 2.8
Nestlé India Limited Consumer Staples 6,364,571 2.7
Maruti Suzuki India Limited Consumer Discretionary 6,316,440 2.7
HDFC Bank Limited Financials 5,802,955 2.5
Tega Industries Ltd Industrials 5,361,168 2.3
Top ten holdings 33.9
Other holdings 67.9
Total holdings 101.8
Capital gains tax provision plus cash and other assets/liabilities -1.8
Total net assets 100.0
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Investment Policy, Results and Key Performance Indicators
Investment Policy
The Company shall invest primarily in securities listed on
any recognised stock exchange in India and securities of
companies with a Significant Presence in India that are
listed on stock exchanges outside India. The Company
may also invest up to 10 per cent. of Gross Assets
(calculated at the time of investment) in unquoted
companies with a Significant Presence in India.
A company has a “Significant Presence in India” if, at the
time of investment, it has its registered office or principal
place of business in India, or exercises a material part of
its economic activities in India.
The Company shall primarily invest in equities and
equity-related securities (including preference shares,
convertible unsecured loan stock, rights, warrants and
other similar securities). The Company may also, in
pursuance of the investment objective:
• hold publicly traded and privately placed
debt instruments (including bonds, notes and
debentures);
• hold cash and cash equivalents including money
market liquid/debt mutual funds;
• hold equity-linked derivative instruments (including
options and futures on indices and individual
securities);
• hedge against directional risk using index futures
and/or cash;
• hold participation notes; and
• invest in index funds, listed funds and exchange
traded funds.
Notwithstanding the above, the Company does not
intend to utilise derivatives or other financial instruments
to take short positions, nor to increase the Company’s
gearing in excess of the limit set out in the borrowing
policy, and any restrictions set out in this investment
policy shall apply equally to exposure through
derivatives.
The Company will invest no more than 15 per cent. of
Gross Assets in any single holding or in the securities of
any one issuer (calculated at the time of investment)
and will typically invest no more than 40 per cent. of
Gross Assets in any single sector (calculated at the time
of investment).
The Company is not restricted to investing in the
constituent companies of any benchmark. It is expected
that the Company’s portfolio will comprise approximately
50 to 100 investments although, in order to allow the
Investment Manager and Investment Adviser flexibility
to take advantage of opportunities as they arise, the
portfolio may occasionally comprise holdings outside of
this range.
In order to comply with the Listing Rules, the Company
will not invest more than 10 per cent. of Gross Assets in
other listed closed-ended investment funds, except that
this restriction shall not apply to investments in listed
closed-ended investment funds which themselves
have stated investment policies to invest no more than
15 per cent. of their gross assets in other listed closed-
ended investment funds. Additionally, in any event the
Company will itself not invest more than 15 per cent.
of its Gross Assets in other investment companies or
investment trusts which are listed on the Official List.
The Company does not expect to take controlling
interests in investee companies and will at all times
invest and manage the portfolio in a manner consistent
with spreading investment risk and in accordance with
the FPI Regulations and applicable law.
It is expected that the Company’s investments will
predominantly be exposed to non-Sterling currencies
(principally Rupees) in terms of their revenues and
profits. The base currency of the Company is Sterling,
which creates a potential currency exposure. Whilst the
Company retains the flexibility to do so, it is expected in
the normal course that this potential currency exposure
will not be hedged using any sort of foreign currency
transactions, forward transactions or derivative
instruments.
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Borrowing policy
The Company may deploy gearing to seek to enhance
long-term capital growth and for the purposes of
capital flexibility and efficient portfolio management.
The Company may be geared through bank borrowings,
the use of derivative instruments that have the effect of
gearing the Company’s portfolio, and any such other
methods as the Board may determine. Gearing will not
exceed 20 per cent. of Net Asset Value at the time of
drawdown of the relevant borrowings or entering into
the relevant transaction, as appropriate.
No material change will be made to the investment
policy without the approval of Shareholders by ordinary
resolution.
Asset allocation at year end
The breakdown of the top ten holdings and the industrial
classification of the portfolio at the Company’s year end
are shown on page 10.
Dividend policy
The Board intends to manage the Company’s affairs
to achieve Shareholder returns through capital growth
rather than income. Therefore, it should not be expected
that the Company will pay an annual dividend.
Regulation 19 of the Investment Trust (Approved
Company) (Tax) Regulations 2011 provides that, subject
to certain exceptions, an investment trust may not
retain more than 15 per cent. of its income in respect
of each accounting period. Accordingly, the Company
may declare an annual dividend from time to time
for the purpose of seeking to maintain its status as an
investment trust.
Results and dividend
The Company’s revenue surplus after tax for the year
amounted to £128,000 (30 June 2022: revenue surplus
of £6,000). The Company made a capital surplus after
tax of £34,452,000 (30 June 2022: capital surplus of
£9,218,000). Therefore, the total surplus after tax for the
Company was £34,580,000 (30 June 2022: surplus of
£9,224,000).
The Board is proposing that no dividend be paid in
respect of the year ended 30 June 2023 in accordance
with the Company’s Dividend policy as outlined in above
paragraph.
Key performance indicators
The Board measures the Company’s success in attaining
its investment objective by reference to the following
KPIs:
(i) Achievement of NAV and share price growth over
the long term
The Board monitors both the NAV and share price
performance and compares them with the MSCI
India IMI Index (in sterling). A review of performance is
undertaken at each quarterly Board meeting and the
reasons for relative under and over performance against
various comparators is discussed. The Company’s NAV
and share price total returns for the year to 30 June
2023 were 18.3% and 19.4% (30 June 2022: 9.6% and 7.7%)
respectively compared to a total return of 11.8% (30 June
2022: 7.2%) for the MSCI India IMI Index (sterling).
The Chairman’s statement on pages 3 to 5 incorporates
a review of the highlights during the year. The Investment
Manager’s Report on pages 6 to 9 highlights investments
made during the year and how performance has been
achieved.
(ii) Performance of premium or discount of share
price to NAV that is comparable to its peers
The Company’s Broker monitors the premium or
discount on an ongoing basis and keeps the Board
updated as and when appropriate. At quarterly Board
meetings the Board reviews the premium or discount
in the period since the previous meeting in comparison
with other investment trusts within the AIC India/Indian
Subcontinent sector. The Company has a redemption
facility through which Shareholders will be entitled to
Investment Policy, Results and Other Information (continued)
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request the redemption of all or part of their holding of
Ordinary Shares on an annual basis. The Company’s
shares traded at a premium of 1.4% on 30 June 2023 (30
June 2022: premium of 0.5%).
(iii) Maintenance of a comparable level of ongoing
charges (excluding performance fee)
The Board receives monthly management accounts
which contain an analysis of expenditure, and these
are formally reviewed at quarterly Board meetings. The
Management Engagement Committee formally reviews
the fees payable to the Company’s main service providers
on an annual basis. The Board reviews the ongoing
charges on a quarterly basis and considers these to be
reasonable in comparison to other investment trusts
within the AIC India/Indian Subcontinent sector.
Based on the Company’s average net assets during
the year ended 30 June 2023, the Company’s ongoing
charges figure calculated in accordance with the AIC
methodology was 0.5% (30 June 2022: 0.5%).
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Risk and Risk Management
Principal and emerging risks
Description Mitigation
Economic and market conditions
Changes in general economic and market conditions in India
including, for example, interest rates, cost increase, rates of
inflation, industry conditions, competition, political events
and trends, tax laws, national and international conflicts and
other factors could substantially and adversely affect the
Company’s prospects.
Weak economic and market conditions in Europe and the
US may lead to foreign disinvestment in Indian equities (the
“flight to quality”).
The Investment Adviser has a proven and extensive track
record with a focus on good corporate governance and will
monitor the position and report regularly to the Board on
market developments.
India is to a degree protected from global economic
downdrafts and increases in world inflation as it is a relatively
closed economy and not as vulnerable to high and rising
energy prices as in the past. Whilst not immune from disrupted
global trade, India may benefit from a change of supply lines
from, in particular, China. In addition, India is not saddled with
the debt problems of Europe and the US and the currency
should therefore remain stable or appreciate against the
currencies of its main trading partners.
The Investment Advisor has a proven and extensive track
record and, together with the broker has an active and regular
dialogue with Shareholders.
Sectoral diversification
Concentration of investments in any one sector may result in
greater volatility in the value of the Company’s investments
and consequently its NAV and may materially and adversely
affect the performance of the Company and returns to
Shareholders.
The Company’s investment policy states that no single holding
will represent more than 15% of the Company’s Gross Assets
and no more than 40% of Gross Assets will be invested in any
single sector (calculated at the time of investment).
The investment policy allows approximately 50 to 100 stocks to
be held in the portfolio to assist with diversification.
The Board measures the Company’s performance for
reference purposes against the MSCI India IMI Index (in
sterling). The Board also monitors performance relative to the
Company’s peer group over a range of periods, taking into
account the differing investment policies and objectives.
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Description Mitigation
Corporate governance and internal control risks (including
cyber security)
The Board has contractually delegated to external agencies
the management of the investment portfolio, the custodial
services (which include the safeguarding of the assets),
the registration services and the accounting and company
secretarial services.
The main risk areas arising from the above contracts relate
to allocation of the Company’s assets by the Investment
Manager, and the performance of administrative company
secretarial, registration and custodial services. These could
lead to various consequences including the loss of the
Company’s assets, inadequate returns to Shareholders and
loss of investment trust status. Cyber security risks could lead
to breaches of confidentiality, loss of data records and inability
to make investment decisions.
Each of these contracts were entered into after full and proper
consideration of the quality and cost of services offered,
including the financial control systems in operation in so far
as they relate to the affairs of the Company. All of the above
services are subject to ongoing oversight of the Board and the
performance of the principal service providers is reviewed on
a regular basis. The Board monitors key personnel risks as part
of its oversight of the Investment Manager. The Company’s
key service providers report periodically to the Board on their
control procedures including those in respect of cyber security
risks.
Regulatory risks
Breaches of Section 1158 of the Corporation Tax Act could result
in loss of investment trust status. Loss of investment trust status
would lead to the Company being subject to tax on any gains
on the disposal of its investments. Breaches of the Financial
Conduct Authority (“FCA”)’s rules applicable to listed entities
could result in financial penalties or suspension of trading
of the Company’s shares on the London Stock Exchange
(“LSE”). Breaches of the Companies Act 2006, The Financial
Services and Markets Act, The Alternative Investment Fund
Managers’ Directive, Accounting Standards, The General Data
Protection Regulation, The Listing Rules, Disclosure Guidance
and Transparency Rules and Prospectus Rules could result in
financial penalties or legal proceedings against the Company
or its Directors. Failure of the Investment Manager to meet its
regulatory obligations could have adverse consequences on
the Company.
The Company has contracted out relevant services to
appropriately qualified professionals. The Investment Manager
and the Company Secretary report on regulatory matters to
the Board on a quarterly basis. The assessment of regulatory
risks forms part of the Board’s risk assessment programme.
Financial risks
The Company’s investment activities expose it to a variety of
financial risks which include foreign currency risk and interest
rate risk.
The investment policy states that while the Company retains
the flexibility to do so, it is expected in the normal course of
business that currency exposure will not be hedged. The
Company does not currently have any borrowings, therefore
is not exposed to interest rate risk. The Company’s financial
risks are disclosed in note 15 to the financial statements.
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Risk and Risk Management (continued)
Description Mitigation
Emerging risks
ESG and Climate Change
The Company could suffer as a result of increased investor
demand for products which promote ESG investments.
Climate change leads to additional costs and risks for portfolio
companies.
In making investment decisions, the Investment Manager
considers qualitative measures, such as the environmental
and social impact of a company as well as financial and
operational measures.
The Company’s ESG Policy, found on page •, is updated
annually and is published on the Company’s website. The
ESG Policy includes ESG factors that are considered in the
investment process where they are relevant and have a
material impact on stock performance. It also includes
information regarding the proprietary rating framework
developed by the Investment Adviser to assess companies
on ESG metrics. The framework consists of a sector-specific
hierarchy of key Environmental and Social factors, against
which a sector company is assessed based on its practices
and disclosures. The Investment Adviser prioritises dialogue
with companies that have greater scope for improvement in
disclosures and/or practices.
Extreme weather events could potentially impair the
operations of individual investee companies, potential
investee companies, their supply chains, and their customers.
The Investment Manager takes such risks into account, along
with the downside risk to any company (whether in the form
of its business prospects, market valuation or sustainability
of dividends) that is perceived to be making a detrimental
contribution to climate change. The Company invests in a
broad portfolio of businesses with operations spread across
India, which should limit the impact of location specific weather
events. The Investment Manager also closely monitors the
businesses which have a greater exposure to climate change
related risks and their progress towards a low-carbon dioxide
transition.
Whilst India witnessed extreme weather events during the
year under review, most notably flooding across Northern
India, the Company’s portfolio is diversified across regions and
sectors that are considered less vulnerable to the impact of
such extreme weather events. The impact of extreme weather
events are considered as part of the investment decision-
making process by the Investment Adviser.
Potential reputational damage from non-compliance with
regulations or incorrect disclosures.
The Board has adopted a policy of fostering high standards of
corporate governance in all its activities. This principle is the
cornerstone of creating and preserving long-term shareholder
value. The Company Secretary and AIFM regularly report to the
Board any changes in the regulatory environment.
Whilst Investment trusts are currently exempt from the Task
Force on Climate-Related Financial Disclosures (“TCFD”)
disclosure, White Oak Capital support the recommendations
of TCFD and intend to continue to promote increased
transparency, encourage the development of tools and
methods to manage climate-related risks and opportunities
and contribute to the best practices in the industry.
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Description Mitigation
Impact of War/Sanctions
The impact of Russia’s invasion of Ukraine on the Company’s
portfolio of investments and any future prolonged and deep
market decline which would likely lead to falling values in the
Company’s investments or interruptions to cash flow.
The extent and impact of military action, resulting sanctions
and further market disruptions is difficult to predict which
increases uncertainty and challenges confidence in financial
markets. This could lead to a recession if the conflict were to
move towards a broader regional or global conflict.
The Company does not have any direct or indirect exposure
to investments in Ukraine or Russia. There are also no direct
business relationships with counterparties from these
countries.
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Environmental, Social and Governance (“ESG”) Policy
As an investment company with no employees, property
or activities outside investment, environmental policy
has limited application. The Company’s Investment
Adviser White Oak Capital Partners (“White Oak Capital”
or the “Investment Adviser”) strive to help their clients
achieve their long-term financial goals through a
thoughtful and disciplined approach to managing
investments. They believe that Environmental, Social, and
Governance (“ESG”) principles are crucial to developing
resilient companies and assets that deliver long-term
value for investors. White Oak Capital are committed
to integrating ESG into their investment process and
operating philosophy.
White Oak Capital seek to derive returns by investing
in high-quality businesses. To assess the quality of
a business, they seek to determine the long-term
sustainability of return on capital, potential scalability of
the business, execution capability of the management,
and the organization’s corporate governance culture.
These insights help them identify great businesses that
they seek to invest in.
Since sustainability of returns and corporate governance
form an important element of the investment philosophy,
White Oak’s investment approach naturally integrates
Environment, Social, and Governance factors in the
decision-making process. They value businesses with
industry-leading environmental compliance practices
and those that demonstrate ethical business conduct
and fair dealings with stakeholders. White Oak believe
that a business with sustainable ESG practices has a
better chance at survival and growth in the longer term.
As part of the Company’s commitment to responsible
investing the Board are pleased that White Oak Capital
is a signatory to The United Nations-backed Principles
for Responsible Investment Initiative (PRI).
ESG Investment Approach
The Board and the Investment Adviser believe in a
holistic sustainable framework driven by the Company’s
guiding principles. The following five principles are
intended to be the guiding axioms under which the Firm’s
investment management and investment advisory
activities are conducted:
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ESG Integration
ESG integration is considered an important enabler
at mitigating risk and enhancing overall returns. The
Investment Adviser believes that good ESG practices
can impact the performance of businesses positively
and enable the generation of long-term value for the
stakeholders. The Investment Adviser uses an internally
developed framework called ABLEx
TM
(Assessment
of business longevity and excellence) for ESG risk
assessment. The framework contains a list of sector
specific ESG risks and opportunities against which a
company’s performance is measured and rated. The
result of this assessment is integrated into the valuation
of a business.
Process of ESG Integration
a. Identification and Screening
b. ESG Research and Assessment
c. Stewardship
a. Identification and Screening
The initiation of the investment process happens by
distilling from a broad investible universe of businesses,
where investment opportunities are screened for
poor governance policies, poor ESG track record
(including material controversies) and weak business
characteristics. Besides this, some of the strategies may
have their exclusion list i.e., a list of companies that are
excluded from the strategy’s investment universe. This
exclusion could be product-related and / or normative
exclusions for companies with controversial behaviour.
The investment universe is reviewed and refreshed on
a semi-annual basis to ensure the team is abreast of
addition/deletion of new names.
b. Research and Assessment
The primary reliance is made on publicly available data
sources for the ESG research. Moreover, any critical ESG
insights are also derived from management interactions,
channel checks and factory visits. The information
gathered from various sources are mapped against the
relevant ESG risk factors and assessed under the ABLEx
TM
framework. This leads to understanding of the efficacy
of a company’s ESG policies and practices against the
risk it faces.
The data provided by third party research providers
is also leveraged and combined with the diligence in
evaluation of ESG practices of a company.
Indicative list of factors considered under ESG
assessment:
Ashoka India Equity Investment Trust plc Annual Report and Audited Financial Statements for the year ended 30 June 2023
ESG Integra,on
ESG integration is considered an important enabler at mitigating risk and enhancing overall returns.
The Investment Adviser believes that good ESG practices can impact the performance of businesses
positively and enable the generation of long-term value for the stakeholders. The Investment Adviser
uses an internally developed framework called ABLEx
TM
(Assessment of business longevity and
excellence) for ESG risk assessment. The framework contains a list of sector specific ESG risks and
opportunities against which a company’s performance is measured and rated. The result of this
assessment is integrated into our valuation of a business.
Process of ESG Integration
a. Identification and Screening
b. ESG Research and Assessment
c. Stewardship
a. Identification and Screening
The initiation of the investment process happens by distilling from a broad investible universe
of businesses, where investment opportunities are screened for poor governance policies,
poor ESG track record (including material controversies) and weak business characteristics.
Besides this, some of our strategies may have their exclusion list i.e., a list of companies
that are excluded from the strategy’s investment universe. This exclusion could be
product-related and / or normative exclusions for companies with controversial
behaviour. The investment universe is reviewed and refreshed on a semi-annual basis to
ensure the team is abreast of addition/deletion of new names.
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Environmental, Social and Governance (“ESG”) Policy
(continued)
c. Stewardship
Stewardship comprises the identification of material
investment risks, active monitoring of holdings,
engagement and proxy voting (where applicable).
Stewardship is a key element of our responsible
investment approach because White Oak Capital
believe in the steering power of capital and that how
it is invested can contribute positively to society and
the environment. White Oak Capital has adopted
stewardship via engagement and voting.
i) Engagement
The Investment Adviser believe the value of engagement
is best derived from direct dialogue with companies
in which they invest. Hence, engagement forms an
integral part of their ESG assessment process. They
follow a positive engagement approach whereby they
interact with managements of underlying businesses
to gain additional understanding and encourage them
to take necessary steps that would impact the business
positively and enhance the value of our investments.
For businesses rated best in class, the Investment
Adviser’s engagement approach centers around
leveraging opportunities for enhanced value creation.
Conversely, they also engage with businesses where
they see strong potential and scope for ESG performance
improvement.
The Investment Adviser’s engagement mechanism
takes place through various modes such as meetings,
emails, investor calls and proxy voting. They engage
with businesses on a variety of issues including ESG
matters that present a potential material risk to their
performance.
ii) Voting
The Investment Adviser consider and vote on their
investment decisions with the objectives of maximizing
long-term investment returns and fostering best
corporate governance practices, social responsibility
and environmental stewardship. They adopt and
implement their voting rights and duties as per their
internal voting policy and procedures.
They ensure that all their voting decisions are taken
in the best interests of their clients. The key identified
issues related to underlying businesses are discussed
within the investment team.
In case there is a conflict of interest or appearance
Environment
• Green House Gas emissions
• Waste management
• Natural resource utilization
• Protection of biodiversity
• Environmental Opportunities
Social
• Employee benefits and
welfare
• Product safety to end users
• Worker’s health and safety
• Human rights compliance
Governance
• Appropriate accounting
practices
• Anti-corruption and bribery
• Board independence and
diversity
• Alignment of interests with
minority shareholders
• Ethical business conduct
• Fair dealing with investors
and other stakeholders
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of a conflict of interest, they will cast the proxy votes
in a manner consistent with the best interests of the
clients. Voting may take place on several ESG related or
investment matters and therefore each voting matter is
considered on a case-by-case basis within the context
of the policy.
Internal Reporting
White Oak Capital’s ESG team, which includes dedicated
ESG analysts and sector-level ESG analysts, regularly
reports portfolio level ESG ratings (based on both internal
and third-party ratings), rating changes in portfolio
companies, engagement status, ESG regulations
update etc. to the broader investment team. This helps
the investment team understand portfolio strengths
and realize the areas of improvement.
Internal reporting also includes details on portfolio
performance on key ESG risk factors, which can further
be drilled down to sector-wise performance on these
factors. This provides more granular insights on the
factors and sectors with scope for an improvement.
ESG Governance Process
Oversight and accountability of White Oak Capital’s
responsible investing activities fall under the
responsibility of its Chief Investment Officer/s (CIO
Office) and its ESG team, while implementation rests
with the investment teams of their affiliate organisations
as they are encouraged to integrate ESG in the way that
best suits their investment style or asset class. As part of
its continuous improvement process, White Oak Capital
has established an ESG Committee (‘’Committee’’)
that among others is entrusted with responsibility for
overseeing the implementation of the ESG Policy. The
Committee includes representatives from the CIO
Office, investment team, ESG team, operations and
compliance.
The Committee is responsible for ensuring consideration
of ESG related factors in the relevant investment team
discussions, so that those factors are considered while
taking investment decisions.
The following sets out the Committee’s key
responsibilities:
• emphasising the importance of environmental
measures, sustainability goals and performance, at
all levels of the business;
• providing best practice on the structure, policies and
regulations that impact the business;
• implementing and promoting common and
workable standards of corporate governance for the
business;
• maintaining, improving, and taking responsibility for
the implementation of ESG policy;
Develop further
understanding of ESG
issues material to the
business.
Maintain a dialogue
on ESG issues to
seek improvement
in performance and
processes.
Enhance analysis of
the portfolios’ risk and
opportunities.
Objectives of engagement at White Oak Capital
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Environmental, Social and Governance (“ESG”) Policy
(continued)
• staying abreast of systemic risks related to ESG
issues, including climate change, to ensure that
appropriate action is taken to mitigate and adapt to
such risks;
• advancing responsible investing at White Oak Capital
and furthering ESG capabilities and outcomes in line
with industry best practices;
• creating awareness and educating the
investment team and relevant stakeholders of ESG
responsibilities and considerations; and
• reporting White Oak Capital’s approach to
sustainability and responsible investing to the
relevant stakeholders and the PRI.
Commitment to ESG
As part of White Oak Capital’s commitment to responsible
investing, White Oak is a signatory to The United Nations-
backed Principles for Responsible Investment Initiative
(PRI). The PRI is a network of international investors
working together to put the six Principles for Responsible
Investment into practice.
Moreover, White Oak Capital support the
recommendations of the TCFD (Task Force on Climate-
related Financial Disclosures) and they intend to continue
to promote increased transparency, encourage the
development of tools and methods to manage climate-
related risks and opportunities and contribute to the
best practices in the industry.
White Oak Capital refer to the frameworks provided under
the United Nations Sustainable Development Goals and the
UN principles on Business and Human Rights in assessing
the impact of our portfolio companies’ products, policies,
and operations on sustainability outcomes.
Reporting
The Investment Adviser is committed to being
transparent with its investors, shareholders, and other
stakeholders about White Oak Capital’s ESG initiatives,
success, and goals. Their reporting includes White Oak
Capital’s UN PRI Transparency Report, which describes
their initiatives and progress during the year as well as
expected activities for the year to come, is produced
annually and is available to its clients and beneficiaries
upon request.
ESG Case Studies
Example case studies can be found below, demonstrating
the Investment Adviser’s approach to engagement with
investee companies, with the objective of improving
their overall ESG practices and policies:
Case Study 1
In a newly listed healthcare company, the disclosed
details on its ESG practices were minimal in the
IPO documents as companies going public are not
mandated by the regulator to provide ESG-related
details in the prospectus.
We engaged with the company to assess the ESG risks
adequately, enabling us to reflect the same in our
valuation process. The company provided important
insights into their waste disposal practices and employee
retention policies, which helped us better evaluate the
company on our proprietary ABLEx framework.
Case Study 2
A small-cap industrials company had recurring material
transactions with its related entities. A deep dive into the
commercial activities of these related entities revealed
that they were engaged in the same line of business as
one of the company’s key divisions.
A further study of the company’s records showed that
a few years back, it had acquired related entities with
a subsequent commitment to stop such related party
transactions. Our research showed that while the related
transactions stopped for a year, they resumed with a
newly incorporated related entity soon after. White Oak
Capital engaged with the company to understand the
rationale of such transactions. The response, though,
was not satisfactory.
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Thus, the deep dive into the corporate affairs of related
entities and company records helped us avoid investing
in a company White Oak Capital believe lacked
adequate corporate governance.
Approach to Climate Change
The implications of climate change are creating rapidly
changing regulations and consumer demands around
the world. Mitigation of climate change and reduction
of greenhouse gas emissions are now widely perceived
as major global challenges. Governments, businesses,
and investors have a responsibility towards ensuring a
climate-resilient economy.
As mentioned above, the Investment Adviser supports
the recommendations of the Task Force on Climate-
related Financial Disclosures and promotes increased
transparency, encourages the development of tools
and methods to manage climate-related risks and
opportunities and contributes to the best practices in
the industry. Businesses which have a greater exposure
to climate change related risks and their progress
towards a low-carbon transition are closely monitored.
Company values
The Board has adopted a policy of fostering high
standards of corporate governance in all its activities.
This principle is the cornerstone of creating and
preserving long-term shareholder value.
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Section 172 Statement
This section of the Annual Report covers the Board’s
considerations and activities in discharging their duties
under s.172(1) of the Companies Act 2006, in promoting
the success of the Company for the benefit of its
members as a whole.
The Directors have a duty to promote the success of
the Company for the benefit of Shareholders as a whole
and to describe how this duty has been performed. In
undertaking this duty, the Directors consider the likely
consequences of the decisions of the Board in the longer
term, how the Board has taken wider stakeholders’
needs into account and the impact of the Company’s
operations on the environment.
The Company is an externally managed investment
company and therefore it does not have any employees
or customers in the conventional sense. Accordingly, it
appoints external suppliers to fulfil a range of functions,
including investment management, secretarial,
administration, public relations, corporate brokering
and custody services. The Board maintains ultimate
responsibility for stakeholder engagement. The Board
performs its role as outlined in the schedule of matters
reserved for the Board and taking into account the
interests of the key stakeholders. This schedule is
available for inspection at the registered office of the
Company and on the Company’s website at https://
ashokaindiaequity.com. The key stakeholders are
identified in the diagram below:
The Board is cognisant of the need to foster the
Company’s business relationships with its key
stakeholders through its stakeholder engagement
activities as described below.
Stakeholder engagement
The Company’s Ordinary Shares commenced trading
on the London Stock Exchange (“LSE”) on 6 July 2018.
The Board is mindful that there should be an active,
liquid market in the Company’s shares. As a closed-
ended fund listed on the Premium segment of the
LSE main market, reasonable liquidity is expected in
normal market conditions. The Board recognises the
importance of Shareholders being able to sell at a price
that is not disadvantageous to them and the premium/
discount to net asset value at which the Company’s
Ordinary Shares trade is continuously monitored. Aware
of shareholder demand, the Board has established a
share issuance programme whereby during the year,
5,240,140 new shares have been issued by way of
block listing, generating additional funds of £10,735,051.
During the year, the Company made one block listing
application for 5,000,000 new Ordinary Shares on 16
November 2022.This block listing application gave the
Company authority to issue new Ordinary Shares on a
non-pre-emptive basis. The Ordinary Shares may be
issued inter alia to satisfy market demand and for the
purposes of managing the premium to net asset value
(cum income) per Ordinary Share at which the Ordinary
Shares are trading.
The Company has a redemption facility through which
Shareholders will, provided normal market conditions
prevail, be entitled to request the redemption of all or
part of their holding of Ordinary Shares on an annual
basis allowing Shareholders to realise their investment.
This annual redemption facility is subject to the final
approval of the Board. On 5 September 2023, the
Company announced that 547,339 valid redemption
requests had been received for the 29 September 2023
Redemption Point (representing 0.5% of the issued share
capital at that point).
Shareholders
Investment Manager
and Investment
Adviser
Other Key Service
Providers
Investee Companies
Company
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Shareholder engagement
The Board actively promotes engagement with the
Company’s Shareholders through various channels. The
Board encourages all Shareholders to attend and vote at
the AGM; the AGM typically includes a presentation from
the Investment Manager and provides an opportunity
for Shareholders to engage directly with the Board and
the Investment Manager. The Board maintains regular
contact with Shareholders through the Investment
Adviser and Broker’s programme of Shareholder
meetings. Both report back to the Board on their findings,
questions, or concerns for the Board’s consideration.
The Company communicates with Shareholders through
its half-yearly and annual financial reports and other
announcements which together provide Shareholders
with a comprehensive insight into the Company’s
progress and results. Shareholders are encouraged to
visit the Company’s website (www.ashokaindiaequity.
com) where they can find useful information and
documents such as monthly factsheets, investment
research, interviews with the Manager and the annual
and half-yearly financial reports.
In addition, the Company employs Kepler Partners
(www.trustintelligence.co.uk) to undertake research,
providing detailed analysis of the Company and the
markets in which it operates for professional advisers
and other registered users.
Investment Manager and Investment
Adviser
The Company’s business model is such that it has no
employees and relies on services provided by third party
providers to manage the Company’s operations.
The Investment Manager and Investment Adviser
are the most significant service providers to the
Company and a description of their roles can be
found on pages 30 to 31. As permitted by the terms
of the Investment Management Agreement, the
Investment Manager has, with the consent of the
Company, appointed the Investment Adviser, White
Oak Capital Partners, a boutique investment advisory
firm, to provide certain non-binding, non-exclusive and
recommendatory investment advisory services. The
Board receives regular reports from the Investment
Adviser, discusses the portfolio at each Board meeting
and maintains a constructive dialogue between
meetings. A representative of the Investment Manager
and the Investment Adviser attend all Board meetings.
The Investment Manager’s remuneration is by way of
a performance fee subject to the Company delivering
excess returns above the MSCI India IMI Index in the
medium term, which aligns the Investment Manager’s
interests with those of Shareholders. The Management
Engagement Committee reviews the performance of the
Investment Manager, its remuneration and discharge of
its contractual obligations at least annually.
In March 2023, members of the Board engaged in a
due diligence trip to Mumbai and Singapore to visit
the Investment Adviser’s offices. During their visit, the
Directors met with several members of the White Oak
senior management team in order to gain a better
understanding of how they operated. They also met
with several major shareholders. The Directors had
been positively reassured by observing the work of the
Manager and their interactions with investors.
Other Key Service Providers
In ensuring the smooth operation of the Company, the
Board also monitors the performance of its other service
providers such as the Company’s Broker, Administrator,
Company Secretary and Custodian (details of the
activities of the Management Engagement Committee
are outlined on pages 38 and 39) and maintains regular
contact through direct reports at Board meetings or
through the Company Secretary. In maintaining the
Company’s reputation and high standards of business
conduct, the Board is provided with regular reports
from the Company’s Broker and Company Secretary
alerting the Board to recent and forthcoming changes
in regulation and market practice, as well as any likely
reputational risks. The Company’s approach to oversee
the internal controls of each of its service providers can
be found on page •.
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Section 172 Statement (continued)
Investee companies
As an investment trust with no trading activity,
the Company has no direct social, community, or
environmental responsibilities. However, the Company
does have such responsibilities through its investment
portfolio. The Company is a long-term investor, and
the Investment Manager and Investment Adviser
incorporate ESG issues into their analysis and decision-
making processes. The Company’s ESG Policy can be
found on pages 18 to 23 which explains how ESG matters
have influenced its investment decisions.
Significant events
There were a number of significant events during the
period to the date of this report that the Board would like
to highlight:
• The Company has been one of the best-performing
India specialist investment trust since it launched in
July 2018, compared with its three main peers within
the sector. In that time the Company’s NAV in total
return terms has delivered more than the return of
its benchmark, the MSCI India IMI index, whilst peers
have underperformed the index over this same time
period.
• Strong demand for the Company’s shares meant
that over the year shares mostly traded at a
premium. The Board has, therefore, continued to
employ a programme of share issuance in order to
ensure that the level of premium is not excessive in
normal markets.
• During the year, the Company issued 5,240,140 new
Ordinary Shares by way of block listing generating
additional net funds of £10,735,051. The Company
made one block listing application of 5,000,000 new
Ordinary shares throughout the financial year.
• Additionally, 547,339 ordinary shares were redeemed
as part of the Company’s annual redemption facility.
Board’s key decisions
The Board’s key decisions during the year under review
included:
• the share issuances programme, further details can
be found on page • which was introduced in order to
meet demand;
• Ms Dhut’s appointment as the Company’s Senior
Independent Director which was agreed so that
she can act as a sounding Board to the Chair and
can liaise between other Board members and
shareholders and the Chair;
• a number of unlisted investments were considered
and approved, including an investment in Kaynes
Technology India Limited; and
• a power of attorney which sets out the terms of
delegated authority to the AIFM to execute all
documentation in connection with an unlisted or
unquoted holding.
Conclusion
The Directors have considered their duty under Section
172 when making decisions throughout the financial
year. The Board of Directors has sought to consider the
interests of the Company’s Shareholders, to understand
their views and to promote transparency. The Directors
see this as crucial to fulfilling their duty under Section
172.
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Exercise of voting powers and stewardship
code
The Board has delegated to the Investment Manager the
power to vote on behalf of the Company at shareholder
meetings of investee companies. The provisions of the
UK Stewardship Code do not apply to the Company as
all investments are outside the United Kingdom. The
Investment Manager’s investment process includes
research into the corporate governance practices of
potential investee companies, regular shareholder
engagement and active stewardship. The Investment
Manager’s voting policy and conflicts of interest policy
are reviewed by the Board annually.
Modern slavery disclosure
The Board acknowledges the requirement to provide
information about human rights in accordance with the
UK Modern Slavery Act. The Board conducts the business
of the Company ethically and with integrity and has a
zero-tolerance policy towards modern slavery in all its
forms. As the Company has no employees, its Directors
are non-executive and all functions are outsourced,
there are no further disclosures to be made in respect of
employees and human rights.
Greenhouse Gas Emissions and Streamlined
Energy and Carbon Reporting (SECR)
The Company has no employees or premises, and
therefore has no greenhouse gas emissions to report.
Nor does it have responsibility for any other emissions
producing sources under the Companies Act 2006
(Strategic Report and Directors’ Reports) Regulations
2013.
As the Company has no material operations and
therefore has low energy usage, it has not included an
energy and carbon report.
Anti-bribery and corruption
It is the Company’s policy to conduct all of its business
in an honest and ethical manner. The Company takes a
zero-tolerance approach to bribery and corruption and
is committed to acting professionally, fairly and with
integrity in all its business dealings and relationships
wherever it operates. The Company’s policy and the
procedures that implement it are designed to support
that commitment.
Prevention of the Facilitation of Tax Evasion
The Board has adopted a zero-tolerance approach to
the criminal facilitation of tax evasion.
Employees
The Company has no employees. As at 30 June 2023, the
Company had four non-executive Directors, of whom
three are male and one is female. The Board’s policy
on diversity is contained in the corporate governance
report (see pages 39 to 40).
Viability statement
The Board has assessed the viability of the Company
for the period to 30 June 2026 (the “Period”). The
Board believes that the Period, being three years, is
an appropriate time frame over which to assess the
viability of the Company, particularly when taking
into account the long-term nature of the Company’s
investment strategy, which is modelled over three years
and the principal and emerging risks outlined above.
Based on this assessment, the Board have a reasonable
expectation that the Company will be able to continue
to operate and to meet its liabilities as they fall due over
the Period.
In its assessment of the prospects of the Company, the
Board has considered the Company’s business model
and each of the principal and emerging risks set out
above, including the continued war in Ukraine and the
impact this could have on the Company. The Board has
considered the Company’s income and expenditure
projections and the fact that the Company’s investments
comprise readily realisable securities, which could, if
necessary, be sold to meet the Company’s funding
requirements including buying back shares in order for
the Company’s discount control policy to be achieved.
Other Information
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Other Information (continued)
Additionally, the Board has considered the liquidity and
solvency of the Company and concluded that it remains
viable.
Portfolio changes, market developments, level of
premium or discount to NAV and share buybacks and
share issues are discussed at quarterly Board meetings.
Whilst the Company received redemption requests
in respect of its redemption facility of 124,374 ordinary
shares during the year under review, this was offset by
the level of share issuances undertaken and positive
performance during the year to 30 June 2023.
The internal control framework of the Company is
subject to a formal review on at least an annual basis.
The Board does not expect there to be any material
increase in the annual ongoing charges of the Company
over the Period and as the Company grows the annual
ongoing charges ratio is expected to decrease. The
Company’s income from investments and cash
realisable from the sale of its investments provide
substantial cover to the Company’s operating expenses,
and any other costs likely to be faced by the Company
over the period of the assessment.
Based on the results of this review, the Directors have
formed a reasonable expectation that the Company will
continue in its operations and meet its expenses and
liabilities as they fall due over the course of the three
year period.
Outlook
The outlook for the Company is discussed in the
Chairman’s Statement on pages 3 to 5 and Investment
Manager’s Report on pages 6 to 9.
For and on behalf of the Board
Andrew Watkins
Chairman of the Board
6 October 2023
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Investment Team
ASHOKA INDIA EQUITY
INVESTMENT TRUST PLC
ACORN ASSET MANAGMENT
(MAURITIUS)
(INVESTMENT MANAGER)
WHITE OAK CAPITAL PARTNERS
PTE. LTD. (SINGAPORE)
(INVESTMENT ADVISER)
Prashant Khema
(Founder)
Manoj Garg
(Director – Investments)
Ayush Abhijeet
(Director – Investments)
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The Directors present their report and accounts for the
year ended 30 June 2023.
Strategic report
The Strategic Report can be found on pages 3 to 29.
Corporate governance
The Corporate Governance Statement on page 36 forms
part of this report.
Principal and emerging risks
The principal and emerging risks on pages 14 to 17 forms
part of this report.
Legal and taxation status
The Company is an investment company within the
meaning of Section 833 of the Companies Act 2006.
The Company conducts its affairs in order to meet
the requirements for approval as an investment trust
under section 1158 of the Corporation Tax Act 2010. The
Company has received approval as an investment
trust and the Company must meet eligibility conditions
and ongoing requirements in order for investment trust
status to be maintained. In the opinion of the Directors,
the Company has met the conditions and requirements
for approval as an investment trust for the year ended
30 June 2023.
Alternative Investment Fund Managers
Directive (“AIFMD”)
The Company is classified as an Alternative Investment
Fund under AIFMD and is therefore required to have
an Alternative Investment Fund Manager. Acorn Asset
Management Limited has been appointed as the
Alternative Investment Fund Manager (the ‘AIFM’) of the
Company for the purposes of the AIFMD.
Market information
The Company’s Ordinary Shares are listed on the LSE.
The NAV per Ordinary Share is calculated in sterling for
each business day that the LSE is open for business. The
daily NAV per Ordinary Share is published through a
regulatory information service.
Retail distribution of Investment Company
shares via financial advisers and other
third-party promoters
As a result of the FCA rules determining which investment
products can be promoted to retail investors, certain
investment products are classified as ‘non-mainstream
pooled investment’ products and face restrictions on
their promotion to retail investors.
The Company has concluded that the distribution of its
Ordinary Shares, being shares in an investment trust,
is not restricted as a result of the FCA rules described
above.
The Company currently conducts its affairs so that the
shares issued by the Company can be recommended
by financial advisers to retail investors and intends to
continue to do so for the foreseeable future.
Investment Manager
Acorn Asset Management Limited (“Acorn”) has been
appointed as the Company’s Investment Manager
(“Investment Manager”). The Investment Manager is
responsible for management of the Company’s assets.
The Investment Manager does not receive a fixed
management fee in respect of its portfolio management
services to the Company. The Investment Manager is
instead entitled to a performance fee subject to the
investment returns of the portfolio outperforming the
MSCI India IMI Index (sterling terms) over a three-year
period. The Investment Manager will only accrue a
performance fee at the end of each Performance Period
of three years, provided they outperform the benchmark.
The first Performance Period ended approximately three
years from 6 July 2018, at the balance sheet date of the
Directors’ Report
GOVERNANCE
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Company’s third annual financial results in 2021. The
Investment Manager agreed to be paid the performance
fee in Ordinary Shares. A resolution was put to the
Shareholders at the AGM in December 2020 to allot new
shares (the “performance shares”) in connection with any
performance fees payable to the Investment Manager.
This resolution was passed with 100% of the proxy votes
cast being in favour of the resolution. The performance
shares were allotted to the Investment Manager in the
first week of October 2021. The next Performance Period
will be 2024, for which the Investment Manager will
be paid a performance fee, subject to the investment
returns of the portfolio outperforming the MSCI India IMI
Index (in sterling) over the three-year period prior to
payment of that performance fee. The Performance Fee
in respect of each Performance Period will be paid at the
end of the three-year period.
The Company’s Net Asset Value, which is calculated
and released daily, always reflects the full liability of the
performance fee.
Further details on the performance fee can be found on
page 77.
The Investment Management Agreement is terminable
by either the Investment Manager or the Company giving
to the other not less than six months’ written notice, such
notice not to expire earlier than the third anniversary of
first admission to trading on the premium segment of
the Main Market of the LSE.
Investment Adviser
As permitted by the terms of the Investment
Management Agreement, the Investment Manager
has, with the consent of the Company, appointed
the Investment Adviser, White Oak Capital Partners, a
boutique investment advisory firm, to provide certain
non-binding, non-exclusive and recommendatory
investment advisory services to it. In April 2022 the
Investment Adviser was relocated from India (White
Oak Capital Management Consultants LLP) to Singapore
(White Oak Capital Partners). Through its contractual
arrangements with White Oak Capital Partners,
the Company’s Investment Manager, Acorn Asset
Management Limited, continue to benefit from the
expertise of key individuals within the White Oak Group.
White Oak Capital Management and White Oak Capital
Partners are both part of the White Oak Group, and the
terms of appointment of White Oak Capital Partners are
the same as those that applied to White Oak Capital
Management.
Management engagement
In accordance with the FCA’s Listing Rules, the Board
confirms that it has reviewed whether to retain Acorn
Asset Management Limited as the Investment Manager
of the Company.
The Board is satisfied that the Investment Manager
has the suitable skills and experience to manage
the Company’s investments and believes that the
continuing appointment of the Investment Manager is
in the best interests of Shareholders as a whole.
Company Secretary and Administrator
On 17 January 2023, Sanne Group announced that it
was acquired by Apex Group Limited. Subsequently the
name of the Company’s Administrator and Company
Secretary changed from Sanne Fund Services (UK)
Limited to Apex Listed Companies Services (UK) Limited.
Apex Listed Companies Services (UK) Limited has
been appointed to provide company secretarial and
administration services to the Company. The Board
has had continuous direct access to the advice and
services of the Company Secretary who is responsible
for ensuring that the Board and Committee procedures
are followed, and that applicable rules and regulations
are complied with.
The Company Secretary provides full company
secretarial services to the Company, ensuring that
it complies with all legal, regulatory, and corporate
governance requirements and officiating at Board
meetings and Shareholders’ meetings. The Company
Secretary is also responsible to the Board for ensuring
timely delivery of information and reports and that the
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Directors’ Report (continued)
statutory obligations of the Company are met. Finally,
the Company Secretary is responsible for advising the
Board through the Chairman on all governance matters.
Custodian
Kotak Mahindra Bank Limited, one of India’s top five
banks, has been appointed as the Company’s Custodian
to safeguard the Company’s cash and investments.
Capital structure and voting rights
As at 30 June 2023, the Company’s issued share capital
comprised 112,807,812 Ordinary Shares (30 June 2022:
107,567,672). Each Ordinary Share held entitles the holder
to one vote. All shares carry equal voting rights and
there are no restrictions on those voting rights. Voting
deadlines are stated in the Notice of Meeting and Form
of Proxy and are in accordance with the Companies Act
2006.
Since the year end and up to 4 October, being the latest
practical date prior to the release of this report, the
Company has issued 5,707,135 new Ordinary Shares.
There are no restrictions on the transfer of shares, nor
are there any limitations or special rights associated
with the Ordinary Shares.
Substantial shareholding
As at 30 June 2023, the Directors have been formally
notified of the following interests in the Company’s
Ordinary Shares, comprising 3% or more of the issued
share capital of the Company:
Name Holding %
1
Evelyn Partners Limited 11,373,116 10.08
Rathbone Investment
Management Limited 9,935,238 8.81
Charles Stanley Group plc 6,760,993 5.99
Acorn Asset Management/White
Oak Capital
2
5,789,836 5.13
J M Finn & Co 5,605,779 4.97
EQ Investors Ltd 5,500,152 4.88
Schroders plc 4,740,494 4.20
Tilney Smith & Williamson Limited 4,366,111 3.87
1
Based on the number of Ordinary Shares in issue at the Company’s year end.
2
This is the amalgamated holdings of Acorn Asset Management Limited (3.76%),
White Oak Capital Partners Pte (0.40%) Ltd and Prashant Khemka (0.98%).
Following the year end, the Company has not been
formally notified of any other significant shareholdings
comprising 3% or more of the issued share capital of the
Company.
Settlement of Ordinary Share transactions
Ordinary Share transactions in the Company are settled
by the CREST share settlement system.
Re-appointment of the Auditor
The Company’s Auditor, Ernst & Young LLP, having
expressed their willingness to continue in office as
auditors, will be put forward for re-appointment at the
Company’s Annual General Meeting and the Board will
seek authority to determine their remuneration for the
forthcoming year.
Going concern
The Directors have adopted the going concern basis in
preparing the accounts. The following is a summary of
the Directors’ assessment of the going concern status of
the Company.
The Directors have a reasonable expectation that
the Company has adequate resources to continue in
operational existence for at least twelve months from
the date of this document. In reaching this conclusion,
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the Directors have considered the liquidity of the
Company’s portfolio of investments as well as its cash
position, income and expense flows. The Company’s
net assets at 30 June 2023 were £232.6 million (30 June
2022: £187.4 million). As at 30 June 2023, the Company
held £233.3 million (30 June 2022: £178.0 million) in
quoted investments and cash of £6.5 million (30 June
2022: £7.0 million). The total expenses (excluding
performance fees) for the year ended 30 June 2023
were £1.0 million (30 June 2022: £0.8 million), which
represented approximately 0.5% (30 June 2022: 0.5%)
of average net assets during the year. At the date of
approval of these Financial Statements, based on the
aggregate of investments and cash held, the Company
has substantial operating expenses cover.
Auditor independence and information
The Board believes that auditor independence is
safeguarded by the following measures: the extent of
non-audit work which may be carried out by the auditor
is restricted and receives pre-approval by the Audit
Committee; the auditor has provided its independence
policies and the safeguards and procedures it has
developed to respond to challenges to its objectivity; it
also confirms that it is independent within the meaning
of all regulatory and professional requirements and that
the objectivity of the audit team is not impaired.
Each of the Directors at the date of the approval of this
report confirms that:
(i) so far as the Directors are aware, there is no relevant
audit information of which the Company’s auditors
are unaware; and
(ii) the Directors have taken all steps that they ought to
have taken as Directors to make themselves aware
of any relevant information and to establish that the
Company’s auditors are aware of that information.
This confirmation is given and should be interpreted
in accordance with the provisions of Section 418 of the
Companies Act 2006.
Annual General Meeting (“AGM”)
The following information is important and requires
your immediate attention. If you are in doubt about the
action you should take, you should seek advice from
your stockbroker, bank manager, solicitor, accountant,
or other financial adviser authorised under the Financial
Services and Markets Act 2000.
Resolutions relating to the following items of special
business will be proposed at the forthcoming AGM:
Resolution 2 Directors’ Remuneration Report
The Directors’ Remuneration Policy (the ‘Policy’) is put
before Shareholders for approval every three years and
became effective following approval by Shareholders at
the AGM on 30 October 2019. The Policy was subsequently
approved by Shareholders at the AGM on 8 December
2022. The Policy will be put before Shareholders for
approval again in December 2025. The policy is that
the remuneration of Directors: be fair and reasonable
in relation to that of other investment trusts and to the
time commitment and responsibilities undertaken; be
reviewed relative to movements in the Retail Price Index;
be sufficient to retain and motivate appointees, as well
as ensure that candidates of a high calibre are recruited
to the Board but not be more than necessary for the
purpose; and take into consideration any committee
memberships and chairmanship duties.
Fees for the Directors are determined by the Board
within the limits stated in the Company’s Articles
of Association (“Articles”). The maximum currently
is £300,000 in aggregate per annum. Directors do
not have service contracts. Directors are appointed
under letters of appointment, copies of which are
available for inspection at the registered office of the
Company. Directors are entitled to be reimbursed for
any reasonable expenses properly incurred by them
in the performance of their duties. Directors are not
eligible for bonuses, pension benefits, share options or
other incentives or benefits. There are no agreements
between the Company and its Directors concerning
compensation for loss of office. Notwithstanding the
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Directors’ Report (continued)
above, the Company’s Articles also provide that,
additional discretionary payments can be made for
services which, in the opinion of the Directors, are
outside the scope of the ordinary duties of a director.
The level of Directors’ remuneration is reviewed
annually, although such review will not automatically
result in any changes. This Directors’ Remuneration
Policy will apply to any new directors, who will be
paid the appropriate fee based on the Directors’ fees
level in place at the date of appointment. The Board
will consider, where raised, Shareholders’ views on
Directors’ remuneration. The Board may amend the
level of remuneration paid to Directors within the
parameters of the Directors’ Remuneration Policy. This
Directors’ Remuneration Policy is the same as that
currently followed by the Board as disclosed in last
year’s Directors’ Remuneration Report.
The Company has no employees and consequently has
no policy on the remuneration of employees.
Resolutions 10 and 12 Authority to issue
shares and to disapply pre-emption rights
The Board is seeking authority to allot up to a maximum of
23,702,989 Ordinary Shares (representing approximately
20% of the shares in issue at the date of this document)
and to disapply pre-emption rights when allotting those
Ordinary Shares at the forthcoming Annual General
Meeting. Authority granted under this resolution will
expire at the conclusion of the Annual General Meeting
to be held in 2024 unless renewed prior to this date via
a General Meeting. The full text of resolutions 10 and 12 is
set out in the Notice of Meeting on pages 93 to 94.
The authority granted by Shareholders to issue shares
will provide flexibility to grow the Company and spread
its fixed costs. Shares will only be issued at a premium
to the Net Asset Value (cum income) after the costs of
issue. Share issues are at the discretion of the Board.
Resolutions 11 and 13 Authority to issue
shares and to disapply pre-emption rights
The Board is seeking authority to allot up to a maximum of
23,702,989 Ordinary Shares (representing approximately
20% of the shares in issue at the date of this document)
in connection with any performance fee due and to dis-
apply pre-emption rights when allotting those Ordinary
Shares at the forthcoming Annual General Meeting.
Authority granted under this resolution will expire at the
conclusion of the Annual General Meeting to be held
in 2024 unless renewed prior to this date via a General
Meeting. The full text of resolutions 11 and 13 is set out in
the Notice of Meeting on pages 93 to 94.
The authority granted by Shareholders to issue shares in
accordance with this authority will allow the Company to
issue shares to the Investment Manager in accordance
with the Investment Advisory Agreement.
Resolution 14 Renewal of authority to
purchase own shares
The Directors recognise the importance to investors of
ensuring that the Company’s share price is as close to
its underlying NAV as possible. Accordingly, the Directors
monitor the share price closely and will consider share
repurchases in the market if the discount widens
significantly, or the issue of shares to the market to meet
demand to the extent that the Company’s shares are
trading at a premium. For the year under review, the
Company’s Ordinary Shares have traded at an average
discount to NAV of 0.38% and were trading at a premium
of 2.22% on a cum-income basis as at 2 October 2023,
the latest practicable date prior to the issue of this report.
The Companies Act 2006 permits companies to hold
shares acquired by way of market purchase as treasury
shares, rather than having to cancel them. This provides
the Company with the ability to re-issue Ordinary Shares
quickly and cost effectively, thereby improving liquidity
and providing the Company with additional flexibility in
the management of its capital base. No Ordinary Shares
will be sold from treasury at a price less than the (cum
income) Net Asset Value per existing Ordinary Share at
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the time of their sale unless they are first offered pro rata
to existing Shareholders. At the year end the Company
did not hold any shares in treasury. The Authority to
make market purchases will expire at the conclusion of
the Company’s AGM in 2024. The Directors recommend
that a new authority to purchase up to 17,776,056
Ordinary Shares (subject to the condition that not more
than 14.99% of the Ordinary Shares in issue, excluding
treasury Shares, at the date of this notice of AGM are
purchased) be granted and a resolution to that effect
will be put to the AGM. Any Ordinary Shares purchased
will either be cancelled or, if the Directors so determine,
held in treasury. The Directors consider that the renewing
of the authority is in the interests of Shareholders as
a whole, as the repurchase of shares at a discount to
the underlying NAV enhances the NAV of the remaining
shares. Resolution 14 will give the Company authority to
buy-back its own issued Ordinary Shares in the market
as permitted by the Companies Act 2006. The authority
also sets the minimum and maximum prices which will
be paid on any buy-back of shares.
Since the Company’s inception in July 2018 to 30
June 2023, the NAV has increased by 110.4% and the
Company’s share price has increased by 109%, both
comfortably ahead of the benchmark index which grew
by 60.9% (in sterling terms). The Company’s share price
stood at 209p at the year end, a 1.4% premium to NAV.
Therefore, in the event of the Company’s shares trading
at a discount, it is considered unlikely that performance
alone would have been the main contributor. The
Board may require the authority to purchase shares
in the event that the Company’s discount becomes
excessive in circumstances where they may have
exhausted all other means to narrow the Company’s
discount, or where they require the power to buy back
shares in periods of market volatility beyond their (or the
Investment Manager’s) control to protect the long-term
interests of the Company’s Shareholders.
Further to the above, the Company’s Ongoing Charges
ratio of 0.5%, which reflects expenses which are likely
to recur in the foreseeable future, whether charged to
capital or revenue, and which relate to the operation of
the Company is below average amongst investment
trusts and is not believed by the Board to have had
influence when the Company’s share price has traded
at a small discount to Net Asset Value. The Board
reviews the ongoing charges and monitors the expenses
incurred by the Company.
During the year ended 30 June 2023, the Company did
not utilise its authority to purchase its own shares. The
full text of resolution 14 is set out in the Notice of Meeting
on pages 94 to 95.
Resolution 15 Notice of General Meetings
Resolution 15 in the notice to the AGM is required to
reflect the requirements of the Shareholder Rights
Directive. The Company is currently able to call General
Meetings, other than an AGM, on 14 clear days’ notice
and would like to preserve this ability. In order to be able
to do so, Shareholders must have approved the calling
of meetings on 14 clear days’ notice.
Resolution 15 seeks such approval. The approval would
be effective until the Company’s next AGM, when it is
intended that a similar resolution will be proposed.
The Company will ensure that it offers the facility for
Shareholders to vote by electronic means, and that this
facility is accessible to all Shareholders, if it is to call
general meetings on 14 days’ notice. Short notice will only
be used by the Board under appropriate circumstances.
By order of the Board
Jenny Thompson
For and on behalf of
Apex Listed Companies Services (UK) Limited
Company Secretary
6 October 2023
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Corporate Governance
Introduction
The Board has considered the Principles and Provisions
of the AIC Code of Corporate Governance 2019 (the
“AIC Code”). The AIC Code addresses the Principles and
Provisions set out in the UK Corporate Governance Code
2018 (the “UK Code”), as well as setting out additional
Provisions on issues that are of specific relevance to the
Company. The Board considers that reporting against
the Principles and Provisions of the AIC Code, which
has been endorsed by the Financial Reporting Council,
provides more relevant information to Shareholders.
The Company has complied with the Principles and
Provisions of the AIC Code. The AIC Code is available
on the AIC website (www.theaic.co.uk). It includes an
explanation of how the AIC Code adapts the Principles
and Provisions set out in the UK Code to make them
relevant for investment companies.
The Company has complied with the recommendations
of the AIC Code and the relevant provisions of the UK
Code, except as set out below.
The UK Code includes provisions relating to:
• the role of the chief executive;
• the establishment of a remuneration committee;
• the need for an internal audit function; and
• executive directors’ remuneration
The Board considers that these provisions are not relevant
to the position of the Company, being an externally
managed investment company with an independent
board and no employees. The Audit Committee has
considered the need for an internal audit function and
considers that this is not appropriate given the nature
and circumstances of the Company as an externally
managed investment company with external service
providers. The Audit Committee keeps the needs for an
internal audit function under periodic review.
The Company has therefore not reported further in
respect of these provisions.
The Board
Composition
At the date of this report, the Board consists of four non-
executive directors including the Chairman. Mr Watkins
and Mr Skinner were appointed on 11 May 2018. Dr Booth
and Ms Dhut were appointed on 7 June 2018.
Rita Dhut was appointed Senior Independent Director of
the Company with effect from 1 October 2022.
The Board believes that during the year ended 30 June
2023 its composition was appropriate for an investment
company of the Company’s nature and size. All of the
Directors are independent of the Investment Manager
and are able to allocate sufficient time to the Company
to discharge their responsibilities effectively. All Board
members actively participate in Board meetings,
provide constructive challenge, specialist advice and
strategic guidance.
The Directors have a broad range of relevant experience
to meet the Company’s requirements and their
biographies are given below.
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Andrew Watkins (non-executive Chairman)
Andrew Watkins has over 35 years’ experience in the
investment companies sector in senior sales and client
relations positions with Robert Fleming, Jupiter and
Invesco Perpetual, retiring from full-time employment in
June 2017. He is a current non-executive director of CT UK
High Income Trust plc, Chelverton UK Dividend Trust plc,
Baillie Gifford European Growth Trust plc and Consistent
Unit Trust Management Ltd.
Jamie Skinner (Chair of the Audit Committee)
Jamie Skinner is a qualified accountant and a fellow of
the Chartered Institute for Securities and Investment. He
joined Cazenove & Co in 1989 as a corporate finance
executive working principally on investment companies
and also other sector IPO activity. In 1999 he joined
Martin Currie Investment Management Limited as a
Director and in 2014 was appointed Head of Client
Services. He served as President and CEO of The China
Fund, Inc. until 2012, President and CEO of The Taiwan
Fund, Inc. until 2014 and President of the Martin Currie
Business Trust until 2015. He was appointed to the board
of Martin Currie, Inc. in March 2013 and to the board of
the Martin Currie Japan Absolute Return Fund in January
2016 and retired from these roles on 17 May 2018 and 10
May 2018 respectively. He is currently a non-executive
director of Ediston Property Investment Company plc,
the Asian Opportunities Absolute Return Fund Limited
and Chairman of Baillie Gifford Shin Nippon plc.
Dr Jerome Booth (Chair of the Nomination Committee)
Dr Jerome is a well-known economist and leading
expert on emerging markets. He has a D.Phil and an
M.Phil, in Economics from the University of Oxford as well
as a degree in Geography from the University of Bristol.
In 2013 he retired from Ashmore Group, a world leading
emerging markets asset management group that he
helped establish in 1999 in a management buy-out
from ANZ Bank. Prior to ANZ he worked in the Strategic
Planning unit of the Inter-American Development Bank
from 1991 to 1994 in Washington, D.C. Prior to this, he
had appointments as a Lecturer in Economics at Christ
Church, Oxford, a consultancy business advising on aid
issues and a position in the mid-1980s in Her Majesty’s
Department of Trade and Industry. He retired from his
position as Chairman of the Governing Board of Anglia
Ruskin University on 31 July 2020.
Rita Dhut (Chair of the Management Engagement
Committee)
Rita Dhut has over 25 years of varied investment
experience having gained industry recognition and
multiple awards during her Fund Management career.
In 1994 she joined M&G Investment Management as UK
equity Fund Manager before being appointed Director of
European Equities. In 2001 she joined Aviva Investors and
was appointed Head of European Equities in 2004 and
in 2006 became Head of UK & European Equity for value
based investment responsible for over £6bn of equity
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funds. She left Aviva Investors in 2012 and is now an
active investor in, and adviser to early stage companies.
She is also a Non-Executive Director of Integrafin plc
and Chair of JP Morgan European Investment Trust plc.
Rita has pursued other personal interests close to her
heart and is currently a Trustee of The Financial Times
Financial Literacy Charity. She is an associate of the CFA
Institute and a graduate of City University, London.
The Directors have appointment letters which do not
provide for any specific term. Copies of the Directors’
appointment letters are available on request from the
Company Secretary. Upon joining the Board, any new
Director receives an induction and further relevant
training is available to Directors on an ongoing basis.
When considering new appointments to the Board the
Directors will consider other demands on the Director’s
time and any significant time commitments should
be disclosed prior to appointment. Additional external
appointments will not be undertaken without prior Board
approval.
Independent advice
A procedure has been adopted for Directors, in the
furtherance of their duties, to take independent
professional advice at the expense of the Company.
Conflicts of interest
In accordance with the Companies Act 2006, the
Company has put in place procedures to deal with
conflicts of interest, which have operated effectively.
The Directors have declared any conflicts or potential
conflicts of interest to the Board, which has the authority
to approve such occurrences. The Company Secretary
maintains the Register of Directors’ Conflicts of Interests
which is reviewed at each quarterly board meeting
and when changes are notified. The Directors advise
the Company Secretary and the Board as soon as they
become aware of any conflicts of interest. Directors who
have conflicts of interest do not take part in discussions
which relate to any of their conflicts.
It is the responsibility of each individual Director to avoid
an unauthorised conflict arising. Directors must request
authorisation from the Board as soon as they become
aware of the possibility that a conflict may arise. The
Board is responsible for considering Directors’ requests
for authorisation of conflicts and for deciding whether
or not the relevant conflict should be authorised. When
the Board is deciding whether to authorise a conflict or
potential conflict, only Directors who have no interest
in the matter being considered are able to participate
in the relevant decision, and in taking the decision the
Directors must act in a way they consider, in good faith,
will be most likely to promote the Company’s success.
The Board are able to impose limits or conditions when
giving authorisation if they think this is appropriate in the
circumstances. The Directors must also comply with the
statutory rules requiring company directors to declare
any interest in an actual or proposed transaction or
arrangement with the Company.
Board committees
The Board decides upon the membership and
chairmanship of its committees.
Audit Committee
In accordance with the Companies Act 2006, the
Company has put in place procedures to deal with
conflicts of interest, which have operated effectively. The
Board is aware of the other commitments of its Directors
and is satisfied that these duties do not conflict with
their duties as Directors of the Company. Any changes
to these commitments are reported to the Board. Mr
Skinner is the Chair of the Audit Committee.
Management Engagement Committee
All of the Directors are members of this committee. The
Management Engagement Committee meets at least
once a year or more often if required. Its principal duties
include consideration of the terms of appointment
of the Investment Manager and the Company’s
other service providers, and it will annually review
Corporate Governance (continued)
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those appointments and the terms of the Investment
Management Agreement. Ms Dhut is the Chair of the
Management Engagement Committee.
Nomination Committee
The Board as a whole fulfils the function of the Nomination
Committee. The Nomination Committee meets at least
once a year or more often if required. Its principal duties
include identifying and nominating to the Board new
Directors and undertaking an annual performance
evaluation of the Board, led by the Committee Chairman.
Dr Booth is the Chair of the Nomination committee.
Each Committee has adopted formal terms of reference,
which are reviewed at least annually, and copies of
these are available on the Company’s website or on
request from the Company Secretary.
Meeting attendance
Quarterly
Board
Meetings
Audit
Committee
Nomination
Committee
Management
Engagement
Committee
Number of meetings held 4 2 1 1
Andrew Watkins 4/4 2/2 1/1 1/1
Jamie Skinner 4/4 2/2 1/1 1/1
Dr Jerome Booth 4/4 2/2 1/1 1/1
Rita Dhut 3/4* 2/2 1/1 1/1
* Due to illness Rita Dhut was unable to attend the meeting held on 8 December
2022.
Board diversity
Appointments to the Board are based on merit with
due regard to the benefits of diversity. The Board
considers many factors, including the balance of skills,
knowledge, experience, gender, ethnicity, cognitive and
personal strengths when reviewing its composition and
appointing new Directors. The aim of the policy is to
identify those with the best range of skills and experience
to complement existing Directors in order to provide
effective oversight of the Company and constructive
support and challenge to the Investment Adviser. The
Board currently comprises four Non-Executive Directors
of which three are male and one is female. The Company
has no employees. Summary biographical details of the
Directors, including their relevant experience, are set out
on pages 37 to 38.
The Board notes the new Listing Rules requirements
(Listing Rule 9.8.7 R) which sets out targets for board
diversity which is set out below:
• at least 40% of board members to be women;
• at least one senior board position (Chairman, chief
executive officer (CEO), senior independent director
or chief financial officer(CFO)) to be held by a
women; and
• at least one individual on the board to be from a
minority ethnic background, defined to include those
from an ethnic background, defined to include those
from an ethnic group, other than a white ethnic
group, as specified in categories recommended by
the Office for National Statistics.
It is noted that, as an externally managed investment
trust there is no CEO or CFO. The Board considers that the
Chairman of the Company, Chair of any of the Company’s
Committees and Senior Independent Director to be
senior positions in the Company. As required by the
Listing Rules the below table sets out the Company’s
Board against these targets in the prescribed format.
The data was collected on a self-identifying basis. It was
noted by the Board that, as at year end (30 June 2023)
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Corporate Governance (continued)
and at the time of signing of these financial statements,
it did not meet the first target on gender diversity whilst
it did meet the second as two of its senior positions were
held by the Company’s only female board member. The
Board is committed to meeting the Listing Rule target
set out above and has agreed to consider gender
diversity when future appointments are made as part of
its recruitment criteria.
Board Diversity as at 30 June 2023
Gender
Number of
Board
members
Percentage
of the
Board
Number of
senior
positions on
the Board
Men 3 75% 2
1
Women 1 25% 1
2
Prefer not to say – – –
Ethnic background
Number of
Board
members
Percentage
of the
Board
Number of
senior
positions on
the Board
White British
or Other White
(including
minority-white
groups)
3 75% 2
1
Asian/Asian British 1 25% 1
2
1
Mr Watson is Chairman and Mr Skinner is Audit Chair
2
Ms Dhut is Senior Independent Director
Tenure Policy
Each Director is subject to annual re-election by
Shareholders. Although this is not required by the
Company’s Articles of Association, it is good governance
practice. The Board recommends all of the Directors for
re-election at the upcoming AGM in December 2023.
The Company has no fixed policy regarding tenure of
directorships. The Board recognises the benefits to the
Company of having longer serving Directors together
with progressive refreshment of the Board in line with
corporate governance best practice.
The Board are mindful that the entire Board will reach
their ninth anniversary simultaneously during summer
2027. In order to ensure continuity, the Board has adopted
a succession plan that allows for a gradual refreshment.
However, the Board may decide to recommend a director
with more than nine years’ service for re-election should
the need arise.
Board Evaluation
A formal annual performance evaluation was conducted
on the Board, the Chairman, the Committees, the
Investment Manager, and the main service providers for
the year ended 30 June 2023. The Directors recognise
the importance of the AIC Code’s recommendation in
respect of evaluating the performance of the Board as
a whole, the Committees of the Board and individual
Directors. Following careful consideration of available
options, the Board appointed the Company Secretary,
Apex Listed Companies Services (UK) Limited, to conduct
an internal evaluation of the Board, its Committees, and
individual Directors.
The results of this evaluation were reviewed by the
Chairman and discussed with the Board. The conclusions
of the performance evaluations were positive and
demonstrated that the Board, its Committees, the
Investment Manager and Service Providers were
operating effectively and showed the necessary
commitment to the effective fulfilment of their duties.
A separate appraisal of the Chairman was carried
out by the other Directors and the results reported
back to the Chairman by the Chair of the Nominations
Committee. The results of the performance evaluation
demonstrated that the Directors showed the necessary
commitment for the effective fulfilment of their duties.
In the Board’s considered view, all Directors were and
remain independent.
Internal control
The AIC Code requires the Board to review the
effectiveness of the Company’s system of internal
controls. The Board recognises its ultimate responsibility
for the Company’s system of internal controls and for
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monitoring its effectiveness. The system of internal
controls is designed to manage rather than eliminate
the risk of failure to achieve business objectives and it
can provide only reasonable assurance against material
misstatement or loss. The Board has undertaken a
review of the aspects covered by the guidance and
has identified risk management controls in the key
areas of business objectives, accounting, compliance,
operations and secretarial as being matters of particular
importance upon which it requires reports from the
relevant key service providers. The Board believes that
the existing arrangements, set out below, represent
an appropriate framework to meet the internal control
requirements. By following these procedures, the
Directors have kept under review the effectiveness of the
internal control system throughout the year and up to
the date of this report.
Financial aspects of internal control
These are detailed in the Report of the Audit Committee
on page 48.
Other aspects of internal control
The Board holds at least four regular meetings each year,
plus additional meetings as required. Between these
meetings there is regular contact with the Investment
Adviser, the Company Secretary, and the Administrator.
The Administrator, Apex Listed Companies Services
(UK) Limited, reports separately in writing to the Board
concerning risks and internal control matters within its
purview, including internal financial control procedures
and company secretarial matters. Additional ad hoc
reports are received as required and Directors have
access at all times to the advice and services of the
Company Secretary, which is responsible to the Board
for ensuring that Board procedures are followed, and
that applicable rules and regulations are complied with.
Engagement with the Investment Manager and the
Administrator enabled the Board to monitor the
Company’s progress towards its objectives and
encompass an analysis of the risks involved. The
effectiveness of the Company’s risk management and
internal control systems is monitored regularly and
a formal review, utilising a detailed risk assessment
programme, takes place at least annually. This
includes a review of the internal controls reports of
the Administrator, Investment Manager, Registrar and
Custodian.
Principal and emerging risks
The Directors confirm that they have carried out a robust
assessment of the principal and emerging risks facing
the Company, including those that would threaten
its business model, future performance, solvency or
liquidity. The principal and emerging risks and how they
are being managed are set out in the Strategic Report
on pages 3 to 29.
Shareholder relations
The Board encourages all Shareholders to attend the
AGM and seeks to provide twenty working days’ notice
of that meeting. The Notice of AGM sets out the business
of the AGM and any item not of an entirely routine
nature is explained in the Directors’ Report. Separate
resolutions are proposed for each substantive issue. The
Investment Manager has a regular program of meetings
with Shareholders and reports back to the Board on its
findings. Additionally, the Company’s Broker regularly
provides Shareholder feedback to the Board.
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Directors’ Remuneration Policy & Implementation Report
The Board is pleased to present the Remuneration
Report for the year ended 30 June 2023 which has been
prepared in accordance with sections 420-422 of the
Companies Act 2006. The law requires the Company’s
auditor to audit certain sections of the Remuneration
Report; where this is the case the relevant section has
been indicated as such.
Annual Chairman’s Statement
During the Company’s financial year ended 30 June 2023,
there has been no change in the Board’s composition
from the disclosures contained in the Company’s
prospectus.
AGM approval of the Remuneration Policy
and Remuneration Implementation Report
In accordance with the requirements of Schedule 8 of
the Large and Medium Sized Companies and Groups
(Accounts and Reports) Regulations 2008, as amended
(the Regulations), the Board is required to put forward
for shareholder approval at its first Annual General
Meeting (“AGM”), and on a triennial basis thereafter, a
Remuneration Policy. Accordingly, the Remuneration
Policy of the Company set out below was proposed
to Shareholders via an ordinary resolution, which is a
binding resolution, at the AGM held on 8 December
2022. The resolution was successfully passed at the
AGM in 2022, and the provisions set out in the below
Remuneration Policy applied from the date of the AGM
and will next be submitted for shareholder approval at
the Company’s upcoming AGM in December 2025.
In the event of any proposed material variation to the
Remuneration Policy or should the Remuneration Policy
or the Remuneration Implementation Report fail at the
forthcoming AGM, shareholder approval will be sought
for a proposed revised Remuneration Policy prior to its
implementation. The Remuneration Implementation
Report will require approval via an ordinary resolution on
an annual basis. This resolution is put to Shareholders
on an advisory, non-binding, basis which means that, if
the resolution were to fail to attract sufficient votes in
favour, the Board would continue to be entitled to be
remunerated and would not be required to amend their
contractual relationship with the Company. However,
if the Remuneration Implementation Report were to
be voted down by Shareholders, the Board would
be required to resubmit the Remuneration Policy to
Shareholders at the AGM following the AGM at which the
Remuneration Implementation Report failed.
Remuneration Policy
The Remuneration Policy and Report was approved by
Shareholders at the AGM held on 8 December 2022.
All the Directors are non-executive directors, and the
Company has no employees. The components of the
remuneration package for non-executive directors,
which are contained in the Remuneration Policy are as
detailed below:
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Current and future policy
Component Director Purpose of reward Operation
Annual fee
1,2
Chairman of the Board For services as Chairman of a plc Determined by the Board
Annual fee
1,2
Other Directors For services as non-executive Directors
of a plc
Determined by the Board
Additional fee
1,2
Chairman of the Audit
Committee
For additional responsibility and time
commitment
Determined by the Board
Expenses All Directors Reimbursement of expenses incurred in
the performance of duties
Submission of appropriate
supporting documentation
1 Payment in shares - The Board has determined that with effect from 24 June 2021, Directors’ may elect to receive their Directors fee in cash, rather than in shares. The
Directors (excluding the Chairman from 30 June 2021 and Ms Dhut from 30 June 2022) have agreed that any fees payable to them shall, save where the Company
determines otherwise, be satisfied in Ordinary Shares acquired at market value, such Ordinary Shares to be acquired on behalf of the Directors and for their account by
the Company’s broker. Any Ordinary Shares acquired by the Directors pursuant to these arrangements shall be subject to the terms of the Directors’ Lock-in Deed and
not accounted under share-based payments. The Chairman of the Board has elected to be paid fees in cash, rather than in shares, from the quarter ended 30 June 2021
and Ms Dhut has made the same election from the quarter ended 30 June 2022.
2 Lock-in Deed - Each Board member is subject to a Deed between themselves, the Company and Peel Hunt (the “Broker”) dated 19 June 2018. The Directors have agreed
that they will not sell, grant options over or otherwise dispose of any interest in any Ordinary Shares acquired by them in satisfaction of their entitlement to Directors’ fees
(save in certain circumstances, including: (i) in acceptance of a general offer made for the entire issued share capital of the Company; or (ii) pursuant to an intervening
court order; or (iii) following termination of their appointment as a non-executive Director of the Company) prior to the first anniversary of the date of acquisition of the
relevant Ordinary Shares. The Directors’ Lock-in Deed is governed by the laws of England and Wales.
The current aggregate remuneration that can be paid
to Directors under the Company’s Articles of Association
is £300,000 per annum.
In accordance with the Shareholder Rights Directive, the
Board confirms there were no variable pay awards made
to the Directors and there were no deferral periods. The
annual percentage change in remuneration in respect of
the current and prior financial years of each Directorship
is as follows:
% change
in fees
30 June
2022 to 2023
% change
in fees
30 June
2021 to 2022
% change
in fees
30 June
2020 to 2021
Chairman 0.00% 14.29% 0.00%
Chair of the Audit
Committee
0.00% 18.18% 0.00%
Chair of the
Nomination
Committee
0.00% 10.00% 0.00%
Chair of the
Management
Engagement
Committee
0.00% 10.00% 0.00%
Total 0.00% 13.33% 0.00%
Directors’ service contracts
The Directors do not have service contracts with the
Company. The Directors have appointment letters which
do not provide for any specific term. They are subject
to re-election by Shareholders at a maximum interval
of three years although, for good governance, they
submit themselves for annual re-election. Subject to the
provision of the Lock-in-Deed, there are no restrictions
on transfers of the Company’s shares held by the
Directors, or any special rights attached to such shares.
Fees payable on recruitment
The Board will not pay any incentive fees to any
person to encourage them to become a Director of the
Company. The Board may, however, pay fees to external
agencies to assist the Board in the search and selection
of Directors.
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Directors’ Remuneration Policy & Implementation Report
(continued)
Remuneration Implementation Report
(Audited)
The table below provides a single figure for the total
remuneration of each Director for the year ended
30 June 2023 together with the prior year comparative:
To
30 June 2023
(£)
To
30 June 2022
(£)
Director Fees
1
Fees
1
Andrew Watkins 40,000 40,000
Jamie Skinner 32,500 32,500
Dr Jerome Booth 27,500 27,500
Rita Dhut 27,500 27,500
Total 127,500 127,500
1
There were no taxable benefits paid in respect of the year to 30 June 2023
(30 June 2022: nil).
Director remuneration is reviewed on an annual basis
by the Board. Following due consideration of peers
within the sector, and analysis of current market rates
of Directors’ fees for investment trust companies, the
Board decided to keep the fees unchanged.
Information on Directors’ costs is disclosed on Note 8 of
these Financial Statements.
Voting at last Annual General Meeting
The resolution to approve the Remuneration Policy
contained in the Annual Report for the year ended 30
June 2022 was passed at the AGM held on 8 December
2022 with 99.91% of the shares voted being in favour of
the resolution. The resolution to approve the Director’s
Remuneration Report contained in the Annual Report
for the year ended 30 June 2022 was put forward to
Shareholders at the AGM held on 8 December 2022. The
resolution was also passed with 99.91% of the shares
voted being in favour of the resolution and 40,481 votes
were withheld.
Remuneration Committee
Given the size of the Board, being four members in
number, the Board is of the view that a separate
Remuneration Committee is not required to be
established. The Nomination Committee is responsible,
inter alia, for reviewing the remuneration payable to the
Directors considering the relevant circumstances of the
Company.
Fees
The fees were payable at an annual rate of £40,000 to
the Chairman and £27,500 to each Director. In addition,
the Chairman of the Audit Committee received an
additional fee of £5,000 per annum. During the year
ended 30 June 2023, a review of Directors’ remuneration
has been performed and the Board agreed that this
remained appropriate.
Directors’ indemnities
The Company has agreed to indemnify, defend
and hold harmless its Directors from and against all
liabilities, obligations, losses, damages, penalties,
actions, judgements, suits, costs, legal costs, reasonable
expenses or disbursements (other than those resulting
from fraud or negligence).
Performance
The following chart shows the performance of the
Company’s net asset value and share price (total return)
by comparison to the MSCI India IMI Index (total return
in sterling) for the period since the Company was listed
assuming £100 was invested at the point the Company
was listed. The Company does not have a specific
benchmark but has deemed the MSCI India IMI Index (in
sterling) to be the most appropriate comparator for its
performance.
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Relative importance of spend on pay
The following table sets out the total level of Directors’
remuneration compared to income and capital gains,
the distributions to Shareholders by way of dividends,
and the performance fees and operating expenses
incurred by the Company for the year ended 30 June
2023, together with the prior year comparative.
Year ended
30 June 2023
£
Year ended
30 June 2022
£
Income 1,308,000 1,040,000
Net investment gains 44,135,000 7,539,000
Spend on Directors’ fees 127,500 127,500
Performance fees expense
1
2,464,000 nil
Operating expenses 1,041,000 832,000
Dividends paid to Shareholders
nil nil
1
The performance fees are accrued but not paid and will adjust at the end of
each period.
The disclosure of the information in the table above is
required under The Large and Medium-sized Companies
and Groups (Accounts and Reports) (Amendment)
Regulations 2013 with the exception of performance fees
and operating expenses which have been included to
show the total expenses of the Company.
Directors’ holdings (audited)
At 30 June 2023 the Directors had the following holdings
in the Company. All holdings were beneficially owned.
Ordinary
Shares
as at
30 June 2023
Ordinary
Shares
as at
30 June 2022
Ordinary
Shares
as at
the date of
this report
Andrew Watkins 94,425 94,425 94,425
Jamie Skinner 94,200 84,733 95,985
Rita Dhut 81,733 81,733 81,733
Dr Jerome Booth 77,623 66,202 80,213
Jul-18
Oct-18
Jan-19
Apr-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
-40%
-20%
0%
20%
40%
60%
80%
100%
120%
NAV
Share price
Index
Dec-22
Mar-23
Jun-23
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Directors’ Remuneration Policy & Implementation Report
(continued)
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, I confirm that the above Remuneration
Policy and Remuneration Implementation Report
summarises, as applicable, for the year ended 30 June
2023:
(a) the major decisions on Directors’ remuneration;
(b) any substantial changes relating to Directors’
remuneration made during the year; and
(c) the context in which the changes occurred and
decisions have been taken.
Andrew Watkins
Chairman of the Board
6 October 2023
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Audit Committee Report
Role and responsibilities of the Audit
Committee
The AIC Code of Corporate Governance (the “AIC Code”)
recommends that Boards should establish an audit
committee consisting of at least three, or in the case
of smaller companies, two independent non-executive
Directors. The Board is required to satisfy itself that the
audit committee has recent and relevant financial
experience. The main role and responsibilities of the
audit committee should be set out in written terms of
reference covering certain matters described in the
Code. The Company complies with the AIC Code.
The Committee has formal written terms of reference
which clearly set out its main role and responsibilities
including certain matters provided for in the Code.
Copies of the terms of reference are available on the
Company’s website or on request from the Company
Secretary.
The principal responsibilities of the Committee are:
• to monitor the integrity of the financial statements
of the Company and any formal announcements
relating to the Company’s financial performance;
• to review the Company’s internal financial controls
and the internal control and risk management
systems of the Company and its third-party service
providers;
• to make recommendations to the Board in relation
to the appointment of the external Auditor and their
remuneration;
• to review and monitor the external Auditor’s
independence and objectivity and the effectiveness
of the audit process; and
• to develop and implement policy on the engagement
of the external Auditor to supply non-audit services,
taking into account relevant guidance regarding the
provision of non-audit services by the external audit
firm.
The Audit Committee meets formally at least twice a year
for the purpose, amongst other things, of considering
the appointment, independence and objectivity, and
remuneration of the Auditor and to review the annual
accounts and half-yearly financial report. The Audit
Committee also reviews the Company’s internal financial
controls and its internal control and risk management
systems. Where non-audit services are provided by
the auditor, full consideration of the financial and other
implications on the independence of the auditor arising
from any such engagement are considered before
proceeding. These are non-recurring services, and the
work was performed by a team independent of the
audit team and the audit team place no reliance on the
output of the services provided.
Composition of the Committee
All of the Directors of the Company are members of the
Committee which is chaired by Mr Skinner. All members
of the Committee have recent and relevant financial
experience. The Chairman of the Company is a member of
the Committee. The Board and the Committee believe that
it is appropriate for the Chairman of the Board to remain
a member of the Committee because he has recent and
relevant financial experience and was independent on his
appointment as Chairman and remains so.
Activities of the Committee
There were two Audit Committee meetings held during
the year ended 30 June 2023 at which all Committee
members were in attendance.
The Committee, amongst other things, considered
the appointment, independence and objectivity, and
remuneration of the external Auditor and reviewed
the annual accounts and half-yearly financial report.
The Committee also reviewed the Company’s internal
financial controls and its internal control and risk
management systems. Where non-audit services were
provided by the external Auditor, full consideration of the
financial and other implications on the independence of
the external Auditor arising from any such engagement
were considered before proceeding.
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Audit Committee Report (continued)
Financial aspects of internal control
The Directors are responsible for the internal financial
control systems of the Company and for reviewing
its effectiveness. The aim of the internal financial
control system is to ensure the maintenance of proper
accounting records, the reliability of the financial
information upon which business decisions are made
and which is used for publication and that the assets
of the Company are safeguarded. As stated above, the
Board has contractually delegated to external agencies
the services the Company requires, but they are fully
informed of the internal control framework established
by each relevant service provider who have provided
reasonable assurance on the effectiveness of internal
financial controls.
Where controls reports were not coterminous with the
Company’s year end bridging letters were obtained.
The Audit Committee also received papers in relation to
the controls at the Custodian, Investment Manager and
Investment Adviser.
The key procedures include monthly production
of management accounts and NAV calculations,
monitoring of performance at regular Board meetings,
supervision by Directors of the valuation of securities,
segregation of the administrative function from that
of securities and cash custody and of both from
investment management, maintenance of appropriate
insurance and adherence to physical and computer
security procedures. The Audit Committee received
and reviewed control reports from the Company’s
Administrator and Registrar which contain reporting
accountant’s reports.
The Audit Committee considered the control
observations noted within the external auditor’s report.
The control observation related to the valuation of
unquoted investments, calculation of Indian capital
gains taxes and the completeness of special dividends.
The Audit Committee discussed these observations with
the relevant service providers and has requested the
controls to be reviewed. The control observations did not
result in a material misstatement for the year ended 30
June 2023.
The Statement of Directors’ Responsibilities in respect of
the accounts is on pages 51 to 52 and a Statement of
Going Concern is on pages 32 to 33.
The Report of the Independent Auditor is on pages 53
to 64.
Financial statements and significant
accounting matters
The Audit Committee reviewed the financial statements
and considered the following significant accounting
issues in relation to the Company’s financial statements
for the year to 30 June 2023:
Valuation and existence of investments
The Company holds the majority of its assets in quoted
investments. The existence and valuation of these
investments is the most material matter in the production
of the financial statements. The Audit Committee
reviewed the procedures in place for ensuring accurate
valuation and existence of investments and discussed
the valuation of the Company’s investments at the
year end with the Investment Manager and reviewed
their existence with the Administrator and other service
providers. Investments are valued using independent
pricing sources by the Administrators and the
holding quantities at the year end were agreed to the
Company’s custodian’s records.
The Company also holds unquoted investments in the
portfolio. The Investment Manager provided a valuation
recommendation for the unquoted investments held
at the year end which was discussed and approved
by the Directors. The Investment Managers’ valuation
approach for investments in unlisted companies is
described on page 71.
Recognition of income
Income may not be accrued in the correct period and/
or incorrectly allocated to revenue or capital. The Audit
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Committee reviewed the Administrator’s procedures
for recognition of income and reviewed the treatment
of any special dividends receivable in the period under
review.
Calculation of performance fees
Incorrect amounts may be paid to the Investment
Manager and recognised in the accounts if the fees are
not calculated correctly. Performance fee calculations
are circulated to the Directors prior to payment. The
Audit Committee reviewed the procedures in place for
the calculation of performance fees.
Tax status and Indian capital gains provision
The Company may suffer tax on gains on the realisation of
investments if investment trust status is not maintained.
The Audit Committee reviewed the compliance of the
Company during the year with the eligibility conditions
and ongoing requirements in order for investment trust
status to be maintained.
The Indian capital gains tax provision represents
an estimate of the amount of tax payable by the
Company. Tax amounts payable may differ from this
provision depending on when the Company disposes
of investments. The Audit Committee reviewed the
procedures in place for the calculation of Indian capital
gains tax.
Going concern
The Audit Committee reviewed the Company’s financial
resources and concluded that it is appropriate for the
Company’s financial statements to be prepared on
a going concern basis as described in the Directors’
Report on pages 32 to 33.
Conclusion with respect to the annual report
and financial statements
The Audit Committee has concluded that the annual
report for the year to 30 June 2023, taken as a whole,
is fair, balanced and understandable and provides the
information necessary for Shareholders to assess the
Company’s business model, strategy and performance.
The Audit Committee has reported its conclusions to the
Board of Directors. The Audit Committee reached this
conclusion through a process of review of the document
and enquiries to the various parties involved in the
production of the annual report.
Audit tenure
Ernst & Young LLP was appointed as the Company’s
Auditor for the period ended 31 March 2019, with Sue Dawe
as the lead audit partner. The audit partner responsible
for the audit is to be rotated at least every five years in
accordance with professional and regulatory standards
in order to protect independence and objectivity and to
provide fresh challenge to the business. In accordance
with auditor rotation best practice, Sue Dawe was
replaced by Mike Gaylor as Audit Partner for the year
ended 30 June 2023. The appointment of the auditor is
reviewed annually by the Committee and the Board and
is subject to approval by Shareholders.
Ernst & Young LLP has confirmed that it believes it is
independent within the meaning of regulatory and
professional requirements and that the objectivity
of the audit partner and staff is not impaired. Having
carried out the review described below, the Committee
is satisfied that the Auditor remains independent and
effective for the purposes of this year’s audit and, as
such, has not considered it necessary to put the audit
services contract out to tender. In accordance with
FRC guidance in relation to the statutory audits of
listed companies, the Company is required to put out
to tender within ten years of the initial appointment of
Ernst & Young LLP, this will be during the 2029 year end.
There are no contractual obligations restricting the
Committee’s choice of external Auditor.
Effectiveness of external audit
The Audit Committee is responsible for reviewing the
effectiveness of the external audit process. The Audit
Committee received a presentation of the audit plan
from the external Auditor prior to the commencement
of the audit and a presentation of the results of the
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Audit Committee Report (continued)
audit following completion of the main audit testing.
Additionally, the Audit Committee received feedback
from the Administrator regarding the effectiveness
of the external audit process and the Audit Quality
Inspection Report on Ernst & Young LLP issued by the
FRC’s Audit Quality Review Team (AQRT). Following the
above review, the Audit Committee has agreed that
the re-appointment of the external Auditors should be
recommended to the Board and the Shareholders of the
Company.
Provision of non-audit services
The Audit Committee has put a policy in place on the
supply of any non-audit services provided by the external
Auditor. Such services are considered on a case-by-
case basis and may only be provided to the Company
if the provision of such services is at a reasonable and
competitive cost and does not constitute a conflict of
interest or potential conflict of interest which would
prevent the external Auditor from remaining objective
and independent.
No non-audit services were provided in the year ending
30 June 2023 (30 June 2022: Nil).
Internal Audit
The Committee has considered the need for an internal
audit function and considers that this is not appropriate
given the nature and circumstances of the Company.
The Committee keeps the need for an internal audit
function under periodic review.
Jamie Skinner
Audit Committee Chairman
6 October 2023
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The Directors are responsible for preparing the Annual
Report and the financial statements in accordance with
applicable laws and regulations.
The Companies Act 2006 (the “company law”) requires
the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected
to prepare the Company financial statements in
accordance with UK-adopted international accounting
standards.
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 during and as at the end of the year. In
preparing these financial statements, the Directors are
required to:
• select suitable accounting policies and then apply
them consistently;
• make judgements and estimates, which are
reasonable and prudent;
• present information including accounting policies
and additional disclosures as required to ensure
the report is presented in a manner that provides
relevant, reliable, comparable and understandable
information;
• state whether applicable UK-adopted international
accounting standards have been followed, subject
to any material departures disclosed and explained
in the financial statements; and
• prepare the financial statements on a going concern
basis unless it is inappropriate to presume that the
Company will continue in business.
The Directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and which disclose
with reasonable accuracy at any time the financial
position of the Company and enable them to ensure
that the accounts comply with the Companies Act 2006.
They are also responsible for safeguarding the assets
of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other
irregularities.
The accounts are published on the Company’s website
at https://ashokaindiaequity.com, which is maintained
by the Investment Manager. The work carried out
by the auditors does not involve consideration of
the maintenance and integrity of this website and,
accordingly, the auditors accept no responsibility for
any changes that have occurred to the accounts since
being initially presented on the website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
Directors’ confirmation statement
The Directors each confirm to the best of their knowledge
that:
(a) the financial statements, prepared in accordance
with UK adopted international financial reporting
standards in conformity with the requirements of the
Companies Act 2006, give a true and fair view of the
assets, liabilities, financial position and profit or loss
of the Company as required by DTR 4.1.12R; and
(b) this Annual Report comprising the Strategic Report
and Governance Statements includes a fair review of
the development and performance of the business
and position of the Company, together with a
description of the principal and emerging risks that
it faces as required by DTR 4.1.8R and DTR 4.1.9R.
Statement of Directors’ Responsibilities
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Statement of Directors’ Responsibilities (continued)
Having taken advice from the Audit Committee, the
Directors consider that the Annual Report and financial
statements taken as a whole is fair, balanced and
understandable and provides the information necessary
for Shareholders to assess the Company’s performance,
business model and strategy.
For and on behalf of the Board
Andrew Watkins
Chairman
6 October 2023
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Opinion
We have audited the financial statements of Ashoka
India Equity Investment Trust plc (“the Company”)
for the year ended 30 June 2023 which comprise the
Statement of Comprehensive Income, the Statement of
Financial Position, the Statement of Changes in Equity,
Statement of Cash Flows and the related notes 1 to 17,
including a summary of significant accounting policies.
The financial reporting framework that has been applied
in their preparation is applicable law and UK adopted
international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the Company’s affairs
as at 30 June 2023 and of its profit for the year then
ended;
• have been properly prepared in accordance with UK
adopted international accounting standards; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable
law. Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the
audit of the financial statements section of our report.
We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Company in accordance
with the ethical requirements that are relevant to our
audit of the financial statements in the UK, including
the FRC’s Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
The non-audit services prohibited by the FRC’s Ethical
Standard were not provided to the Company and we
remain independent of the Company in conducting the
audit.
Conclusions relating to going concern
In auditing the financial statements, we have
concluded that the directors’ use of the going
concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation
of the directors’ assessment of the Company’s ability
to continue to adopt the going concern basis of
accounting included:
• Confirmation of our understanding of the Company’s
going concern assessment process and engaged
with the Directors and the Company Secretary to
determine if all key factors that we have become
aware of during our audit were considered in their
assessment.
• Inspection of the Directors’ assessment of going
concern, including the revenue forecast and liquidity
assessment, for the period to 31 December 2024
which is at least twelve months from the date the
financial statements were authorised for issue. In
preparing the revenue forecast, the Company has
concluded that it is able to continue to meet its
ongoing costs as they fall due.
• Review of the factors and assumptions, including
the impact of the current economic environment
and other significant events that could give rise to
market volatility, as applied to the revenue forecast
and the liquidity assessment of investments. We
considered the appropriateness of the methods
used to calculate the revenue forecast and the
liquidity assessment and determined, through
testing of the methodology and calculations, that
the methods, inputs and assumptions utilised were
appropriate to be able to make an assessment for
the Company.
Independent Auditor’s Report
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• Consideration of the mitigating factors included
within the revenue forecasts that are within the
control of the Company. We reviewed the Company’s
assessment of the liquidity of investments held
and evaluated the Company’s ability to sell those
investments in order to cover working capital
requirements.
• Review of the Company’s going concern disclosures
included in the annual report in order to assess that
the disclosures were consistent with the financial
statements and our understanding of the Company
and in conformity with the reporting standards.
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the Company’s ability to continue
as a going concern for the period to 31 December 2024.
In relation to the Company’s reporting on how they have
applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation
to the directors’ statement in the financial statements
about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the
directors with respect to going concern are described
in the relevant sections of this report. However, because
not all future events or conditions can be predicted,
this statement is not a guarantee as to the Company’s
ability to continue as a going concern.
Overview of our audit approach
Key audit matters • Risk of incorrect valuation or ownership of the investment portfolio and the resulting impact
on the Statement of Comprehensive Income.
• Risk of incomplete or inaccurate revenue recognition, including classification of special
dividends as revenue or capital in the Statement of Comprehensive Income.
• Risk of incorrect calculation of the performance fee.
Materiality • Overall materiality of £2.33m which represents 1% of net assets.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality
and our allocation of performance materiality determine
our audit scope for the Company. This enables us to
form an opinion on the financial statements. We take
into account size, risk profile, the organisation of the
Company and effectiveness of controls, the potential
impact of climate change and changes in the business
environment when assessing the level of work to be
performed.
Climate change
Stakeholders are increasingly interested in how climate
change will impact the Company. The Company has
determined that the most significant future impacts
from climate change on its operations will be from
extreme weather events that could potentially impair the
operations of individual investee companies, their supply
chains, and their customers, and that the Company may
suffer from increased investor demand for products
which promote ESG investments. This is explained on
page 16 in the principal risks and uncertainties which
form part of the “Other information,” rather than the
audited financial statements. Our procedures on these
unaudited disclosures therefore consisted solely of
Independent Auditor’s Report (continued)
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considering whether they are materially inconsistent
with the financial statements or our knowledge obtained
in the course of the audit or otherwise appear to be
materially misstated, in line with our responsibilities on
“Other information”.
Our audit effort in considering climate change was
focused on the adequacy of the Company’s disclosures
in the financial statements as set out in note 2 and
concluded that there was no further impact of climate
change to be taken into account as the investments
are valued at fair value, being primarily quoted prices
for investments in active markets at the balance sheet
date, and therefore reflect market participant’s view of
climate change risk. Unlisted investments, valued by
reference to appropriate valuation techniques, similarly
reflect market participants’ view of climate change
risk. We also challenged the Directors’ considerations
of climate change in their assessment of viability and
associated disclosures.
Key audit matters
Key audit matters are those matters that, in our
professional judgment, were of most significance in
our audit of the financial statements of the current
period and include the most significant assessed risks
of material misstatement (whether or not due to fraud)
that we identified. These matters included those which
had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the
efforts of the engagement team. These matters were
addressed in the context of our audit of the financial
statements as a whole, and in our opinion thereon, and
we do not provide a separate opinion on these matters.
Risk Our response to the risk Key observations communicated
to the Audit Committee
Incorrect valuation or ownership
of the investment portfolio and the
resulting impact on the Statement
of Comprehensive Income (refer to
the Report of the Audit Committee set
out on page 48 and the accounting
policy set out on page 71).
The valuation of the investment
portfolio at 30 June 2023 was
£236.76m (2022: £183.36m)
consisting of quoted investments
with an aggregate value of £233.30m
(2022: £178.00m) and unquoted
investments with an aggregate
value of £3.46m (2022: £5.36m).
We performed the following
procedures:
We obtained an understanding of the
processes and controls surrounding
investment valuation, legal title, gains
and losses and Indian capital gains
taxes by performing walkthroughs in
which we evaluated the design and
implementation of controls.
For all quoted investments in the
portfolio, we compared the market
prices and exchange rates applied
to an independent pricing vendor
and recalculated the investment
valuations as at the year-end.
The results of our procedures
identified no material misstatement
in relation to the risk of incorrect
valuation or ownership of the
investment portfolio and the
resulting impact on the Statement of
Comprehensive Income.
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Risk Our response to the risk Key observations communicated
to the Audit Committee
The valuation of the assets held in
the investment portfolio is the key
driver of the Company’s net asset
value and total return. Incorrect
investment pricing, or a failure to
maintain proper legal title to the
investments held by the Company
could have a significant impact on
the portfolio valuation and the return
generated for shareholders.
The fair value of quoted investments
is determined by reference to bid
value on the relevant exchange. If
bid value is unavailable, then the last
trade price on the relevant exchange
is used.
Unquoted investments are valued at
fair value by the Directors following
a review of the valuations proposed
by the Investment Manager. The
unquoted investment policy applies
methodologies consistent with the
International Private Equity and
Venture Capital Valuation guidelines
(“IPEV”).
The valuation of the unquoted
investments, and the resultant
impact on the unrealised gains/
(losses), is an area requiring
judgement and estimation in
the preparation of the financial
statements.
We inspected the stale pricing reports
produced by the Administrator
to identify prices that have not
changed around the year end and
verified whether the quoted price is
a valid fair value.
For the unquoted investments held
as at the year-end we utilised our
specialist valuations team to review
and challenge the valuations. This
included:
• Reviewing the valuation papers
prepared by the Manager for the
year end valuation;
• Assessing whether the valuations
have been performed in line with
the IPEV guidelines;
• Assessing the appropriateness of
the data inputs and challenging
the assumptions used to support
the valuations;
• Assessing other facts and
circumstances, such as market
movement and comparative
Company information, that have
an impact on the fair market
value of the investments; and
• Determining a fair value range
for the valuation and assessing
whether Management’s valuation
is reasonable.
Independent Auditor’s Report (continued)
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Risk Our response to the risk Key observations communicated
to the Audit Committee
The Company incurs Indian capital
gains taxes on realised gains made
from the Indian investment portfolio
and is also required to recognise a
capital gains tax provision based on
unrealised gains and relevant tax
rates as at the year end. The capital
gains tax provision as at 30 June
2023 was £7.71m (2022: £3.03m).
Incorrect calculation of the capital
gains tax provision could impact on
the Company’s net asset value.
We compared the Company’s
investment holdings at 30 June 2023
to an independent confirmation
received directly from the Company’s
Custodian, testing any reconciling
items to supporting documentation.
We recalculated the total unrealised
gains/losses on investments as at
the year-end using the book-cost
reconciliation.
We recalculated the realised gains
and losses arising on a sample of
disposals and ensured the average
cost method was consistently and
correctly applied.
We reviewed the application of
Indian capital gains tax rates with
reference to tax legislation and the
length of investment ownership.
We discussed and challenged the
calculation with the Investment
Manager and the Company
tax advisor, as preparer of the
calculation. We recalculated the
Indian capital gains tax provision
recognised at the year-end and
we agreed the key inputs for
the calculation to our audited
workpapers.
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Risk Our response to the risk Key observations communicated
to the Audit Committee
Incomplete or inaccurate
revenue recognition, including
the classification of special
dividends as revenue or capital in
the Statement of Comprehensive
Income (refer to the Report of the
Audit Committee set out on page 48
and the accounting policy set out on
page 71).
The total revenue for the year to 30
June 2023 was £1.31m (2022: £1.04m),
consisting of dividend income from
quoted equity investments.
The investment income receivable by
the Company during the year directly
affects the Company’s revenue
return. There is a risk of incomplete
or inaccurate recognition of revenue
through the failure to recognise
proper income entitlements or to
apply an appropriate accounting
treatment.
The Directors may be required to
exercise judgment in determining
whether income receivable in the
form of special dividends should be
classified as ‘revenue’ or ‘capital’ in
the Statement of Comprehensive
Income.
We performed the following
procedures:
We obtained an understanding of the
processes and controls surrounding
revenue recognition including the
classification of special dividends by
performing walkthrough procedures.
For all dividends received, we
recalculated the dividend income by
multiplying the investment holdings
at the ex-dividend date, traced
from the accounting records, by
the dividend per share, which was
agreed to an independent data
vendor. For a sample of dividends
received we agreed amounts to bank
statements and where applicable,
agreed the exchange rates to an
external source.
For dividends accrued, we
reviewed the investee Company
announcements to assess whether
the dividend obligations arose
prior to 30 June 2023. We agreed
the dividend rate to corresponding
announcements made by the
investee Company, recalculated the
dividend amount receivable and
confirmed this was consistent with
cash received as shown on post year
end bank statements, where paid.
The results of our procedures
identified no material misstatement
in relation to the risk of incomplete
or inaccurate revenue recognition,
including incorrect classification
of special dividends as revenue
or capital in the Statement of
Comprehensive Income.
Independent Auditor’s Report (continued)
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Risk Our response to the risk Key observations communicated
to the Audit Committee
To test completeness of recorded
income, we verified that expected
dividends for each investee Company
held during the year had been
recorded as income with reference to
investee Company announcements
obtained from an independent data
vendor.
For all investments held during the
year, we compared the type of
dividends paid with reference to an
external data source to identify those
which were ‘special’. We confirmed
two special dividends were received
during the year. We selected a sample
of one special dividend received and
confirmed that the classification
of revenue for the payments was
consistent with the underlying
rationale of the distribution.
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Independent Auditor’s Report (continued)
Risk Our response to the risk Key observations communicated
to the Audit Committee
Incorrect calculation of the
performance fee (refer to the Report
of the Audit Committee set out on
page 48 and the accounting policy
set out on page 71).
The performance fee amounted to
£2.46m for the year ended 30 June
2023 (2022: nil) which resulted in a
year end provision of £2.46m (2022:
nil).
The performance fees payable
by the Company for investment
management services are a
significant component of the
Company’s cost base and, therefore
impacts the Company’s total return.
If the performance fee is not
calculated in accordance with
the methodology prescribed in
the investment management
agreement (‘IMA’) and incorrect
data is used this could have a
significant impact on both costs and
total return.
We performed the following
procedures:
We obtained an understanding of the
processes and controls surrounding
the performance fee calculation
by performing our walkthrough
procedures.
We recalculated the performance
fee recognised in the year ended
30 June 2023 with reference to the
methodology prescribed in the IMA.
We validated all inputs used in
the calculation to our audited
financial information, the IMA and to
underlying audit evidence.
The results of our procedures
identified no material misstatement
in relation to the risk of incorrect
calculation of the performance fee.
Our application of materiality
We apply the concept of materiality in planning and
performing the audit, in evaluating the effect of identified
misstatements on the audit and in forming our audit
opinion.
Materiality
The magnitude of an omission or misstatement that,
individually or in the aggregate, could reasonably be
expected to influence the economic decisions of the
users of the financial statements. Materiality provides a
basis for determining the nature and extent of our audit
procedures.
We determined materiality for the Company to be
£2.33m (2022: £1.87m), which is 1% (2022: 1%) of net
assets. We believe that net assets provides us with
materiality aligned to the users interests as it represents
a key measurement of the Company’s position.
Performance materiality
The application of materiality at the individual account
or balance level. It is set at an amount to reduce to an
appropriately low level the probability that the aggregate
of uncorrected and undetected misstatements exceeds
materiality.
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On the basis of our risk assessments, together with
our assessment of the Company’s overall control
environment, our judgement was that performance
materiality was 75% (2022: 75%) of our planning
materiality, namely £1.74m (2022: £1.41m). We have set
performance materiality at this percentage due to our
experience from prior years and our assessment of the
impact of any prior year errors.
Given the importance of the distinction between revenue
and capital for investment trusts, we have applied a
separate testing threshold for the revenue column of the
Statement of Comprehensive Income of £0.12m (2022:
£0.09m), being our reporting threshold.
Reporting threshold
An amount below which identified misstatements are
considered as being clearly trivial.
We agreed with the Audit Committee that we would
report to them all uncorrected audit differences in
excess of £0.12m (2022: £0.09m), which is set at 5% of
planning materiality, as well as differences below that
threshold that, in our view, warranted reporting on
qualitative grounds.
We evaluate any uncorrected misstatements against
both the quantitative measures of materiality discussed
above and in light of other relevant qualitative
considerations in forming our opinion.
Other information
The other information comprises the information
included in the annual report, other than the financial
statements and our auditor’s report thereon. The
directors are responsible for the other information
contained within the annual report.
Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise
explicitly stated in this report, we do not express any
form of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the financial statements
or our knowledge obtained in the course of the audit
or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent
material misstatements, we are required to determine
whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work
we have performed, we conclude that there is a material
misstatement of the other information, we are required
to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the directors’ remuneration
report to be audited has been properly prepared in
accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the
course of the audit:
• the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with
the financial statements; and
• the strategic report and directors’ report have been
prepared in accordance with applicable legal
requirements.
Matters on which we are required to report
by exception
In the light of the knowledge and understanding of the
Company and its environment obtained in the course of
the audit, we have not identified material misstatements
in the strategic report or directors’ report.
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We have nothing to report in respect of the following
matters in relation to which the Companies Act 2006
requires us to report to you if, in our opinion:
• adequate accounting records have not been kept,
or returns adequate for our audit have not been
received from branches not visited by us; or
• the financial statements and the part of the
Directors’ Remuneration Report to be audited are
not in agreement with the accounting records and
returns; or
• certain disclosures of directors’ remuneration
specified by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Corporate Governance Statement
We have reviewed the directors’ statement in relation
to going concern, longer-term viability and that part
of the Corporate Governance Statement relating to the
Company’s compliance with the provisions of the UK
Corporate Governance Code specified for our review by
the Listing Rules.
Based on the work undertaken as part of our audit, we
have concluded that each of the following elements
of the Corporate Governance Statement is materially
consistent with the financial statements or our
knowledge obtained during the audit:
• Directors’ statement with regards to the
appropriateness of adopting the going concern
basis of accounting and any material uncertainties
identified set out on pages 32 to 33;
• Directors’ explanation as to its assessment of the
Company’s prospects, the period this assessment
covers and why the period is appropriate set out on
pages 27 to 28;
• Director’s statement on whether it has a reasonable
expectation that the Company will be able to
continue in operation and meets its liabilities set out
on 32 to 33;
• Directors’ statement on fair, balanced and
understandable set out on page 51;
• Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set
out on pages 14 to 17;
• The section of the annual report that describes the
review of effectiveness of risk management and
internal control systems set out on pages 40 to 41;
and;
• The section describing the work of the audit
committee set out on pages 47 to 48.
Responsibilities of directors
As explained more fully in the directors’ responsibilities
statement set out on pages 51 to 52, the directors
are responsible for the preparation of the financial
statements and for being satisfied that they give a
true and fair view, and for such internal control as
the directors determine is necessary to enable the
preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors
are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going
concern basis of accounting unless the directors either
intend to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance
about whether the financial statements as a whole
are free from material misstatement, whether due
Independent Auditor’s Report (continued)
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to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate,
they could reasonably be expected to influence the
economic decisions of users taken on the basis of these
financial statements.
Explanation as to what extent the audit
was considered capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined
above, to detect irregularities, including fraud. The risk
of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by,
for example, forgery or intentional misrepresentations,
or through collusion. The extent to which our procedures
are capable of detecting irregularities, including fraud is
detailed below.
However, the primary responsibility for the prevention
and detection of fraud rests with both those charged
with governance of the Company and management.
• We obtained an understanding of the legal and
regulatory frameworks that are applicable to
the Company and determined that the most
significant are UK adopted International Accounting
Standards, the Companies Act 2006, the Listing
Rules, UK Corporate Governance Code, the
Association of Investment Companies’ Code and
Statement of Recommended Practice, Section 1158
of the Corporation Tax Act 2010 and The Companies
(Miscellaneous Reporting) Regulations 2018.
• We understood how the Company is complying with
those frameworks through discussions with the Audit
Committee and Company Secretary and review of
Board minutes and the Company’s documented
policies and procedures.
• We assessed the susceptibility of the Company’s
financial statements to material misstatement,
including how fraud might occur by considering the
key risks impacting the financial statements. We
identified fraud risks with respect to the incomplete
or inaccurate income recognition through the
incorrect classification of special dividends and
incorrect valuation of the unquoted investments
and the resulting impact on the unrealised gains/
(losses). Further discussion of our approach is set
out in the section on key audit matters above.
• Based on this understanding we designed our audit
procedures to identify non-compliance with such
laws and regulations. Our procedures involved a
review of the reporting to the Directors with respect
to the application of the documented policies and
procedures and review of the financial statements to
ensure compliance with the reporting requirements
of the Company.
A further description of our responsibilities for the audit
of the financial statements is located on the Financial
Reporting Council’s website at https://www.frc.org.uk/
auditorsresponsibilities. This description forms part of
our auditor’s report.
Other matters we are required to address
• Following the recommendation from the audit
committee, we were appointed by the Company
on 28 March 2019 to audit the financial statements
for the period ending 30 June 2019 and subsequent
financial periods.
The period of total uninterrupted engagement
including previous renewals and reappointments is
five years, covering the years ending 30 June 2019 to
30 June 2023
• The audit opinion is consistent with the additional
report to the audit committee.
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Independent Auditor’s Report (continued)
Use of our report
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to
them in an auditor’s report and for no other purpose.
To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the
Company and the Company’s members as a body, for
our audit work, for this report, or for the opinions we have
formed.
Mike Gaylor (Senior statutory auditor)
for and on behalf of Ernst & Young LLP, Statutory Auditor
London
6 October 2023
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For the financial year ended 30 June 2023
For the year ended
30 June 2023
For the year ended
30 June 2022
Revenue Capital Total Revenue Capital Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Gains on investments 4 – 43,805 43,805 – 7,848 7,848
Gains/(losses) on currency movements – 330 330 – (309) (309)
Net investment gains – 44,135 44,135 – 7,539 7,539
Income 5 1,308 – 1,308 1,040 – 1,040
Total income 1,308 44,135 45,443 1,040 7,539 8,579
Performance fees 7 – (2,464) (2,464) – – –
Operating expenses 8 (1,041) – (1,041) (832) – (832)
Operating profit before taxation 267 41,671 41,938 208 7,539 7,747
Taxation 9 (139) (7,219) (7,358) (202) 1,679 1,477
Profit for the year 128 34,452 34,580 6 9,218 9,224
Earnings per Ordinary Share 10 0.14p 38.51p 38.65p 0.01p 9.46p 9.47p
There is no other comprehensive income and therefore the ‘Profit for the year’ is the total comprehensive income
for the year ended 30 June 2023.
The total column of the above statement is the profit and loss account of the Company. The supplementary revenue
and capital columns, including the earnings per Ordinary Share, are prepared under guidance from the Association
of Investment Companies.
All revenue and capital items in the above statement derive from continuing operations.
Statement of Comprehensive Income
FINANCIAL STATEMENTS
The notes on pages 69 to 87 form an integral part of these financial statements.
Ashoka India Equity Investment Trust plc Annual Report and Audited Finanacial Statements for the year ended 30 June 2023
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Statement of Financial Position
As at 30 June 2023
30 June
2023
30 June
2022
Note £’000 £’000
Non-current assets
Investments held at fair value through profit or loss 4 236,764 183,361
Current assets
Cash and cash equivalents 6,489 7,027
Dividend receivable 229 188
Other receivables 225 42
6,943 7,257
Total assets 243,707 190,618
Current liabilities
Purchases for future settlement (459) –
Other payables 6 (520) (203)
Performance fees payable 7 (2,464) –
Non-Current liabilities
Capital gains tax provision (7,713) (3,029)
Total liabilities (11,156) (3,232)
Net assets 232,551 187,386
Equity
Share capital 12 1,128 1,076
Share premium account 101,003 90,470
Special distributable reserve 13 44,276 44,276
Capital reserve 86,136 51,684
Revenue reserve 8 (120)
Total equity 232,551 187,386
Net asset value per Ordinary Share 14 206.2p 174.2p
Approved by the Board of Directors on 6 October 2023 and signed on its behalf by:
Andrew Watkins
Director
Ashoka India Equity Investment Trust plc incorporated in England and Wales with registered number 11356069.
The notes on pages 69 to 87 form an integral part of these financial statements.
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For the financial year ended 30 June 2023
Share
Capital
Share
premium
account
Special
distributable
reserve
Capital
reserve
Revenue
reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Opening balance as at
1July 2022
1,076 90,470 44,276 51,684 (120) 187,386
Profit for the year – – – 34,452 128 34,580
Issue of Ordinary Shares 12 52 10,683 – – – 10,735
Share issue costs – (150) – – – (150)
Closing balance as at
30June 2023 1,128 101,003 44,276 86,136 8 232,551
For the financial year ended 30 June 2022
Share
Capital
Share
premium
account
Special
distributable
reserve
Capital
reserve
Revenue
reserve Total
Note £’000 £’000 £’000 £’000 £’000 £’000
Opening balance as at
1July 2021
860 49,099 44,276 42,466 (126) 136,575
Profit for the year – – – 9,218 6 9,224
Issue of Ordinary Shares 12 216 41,886 – – – 42,102
Share issue costs – (515) – – – (515)
Closing balance as at
30June 2022 1,076 90,470 44,276 51,684 (120) 187,386
The Company’s distributable reserves consist of the special distributable reserve, revenue reserve and capital
reserve attributable to realised profit.
Statement of Changes in Equity
The notes on pages 69 to 87 form an integral part of these financial statements.
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For the financial year ended 30 June 2023
For the year
ended
30 June 2023
For the year
ended
30 June 2022
Note £’000 £’000
Cash flows from operating activities
Operating profit before taxation 41,938 7,747
Taxation paid (3,362) (3,123)
(Increase)/decrease in receivables (224) 433
Increase in payables 2,781 117
Gains on investments 4 (43,805) (7,848)
Net cash flow used in operating activities (2,672) (2,674)
Cash flows from investing activities
Purchase of investments (120,344) (118,600)
Sale of investments 111,893 87,259
Net cash flow used in investing activities (8,451) (31,341)
Cash flows from financing activities
Net proceeds from issue of shares 12 10,735 34,110
Share issue costs (150) (515)
Net cash flow from financing activities 10,585 33,595
Decrease in cash and cash equivalents (538) (420)
Cash and cash equivalents at start of year 7,027 7,447
Cash and cash equivalents at end of year 6,489 7,027
Statement of Cash Flows
The notes on pages 69 to 87 form an integral part of these financial statements.
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1. Reporting entity
Ashoka India Equity Investment Trust plc is a closed-ended investment company, registered in England and Wales
on 11 May 2018. The Company’s registered office is 6th Floor 125 London Wall, London, England, EC2Y 5AS. Business
operations commenced on 6 July 2018 when the Company’s Ordinary Shares were admitted to trading on the LSE.
The financial statements of the Company are presented for the year from 1 July 2022 to 30 June 2023.
The Company primarily invests in securities listed on any stock exchange in India and can invest in the securities of
companies with a significant presence in India that are listed on stock exchanges outside India.
2. Basis of preparation
Statement of compliance
These financial statements have been prepared in accordance with applicable law and the UK-adopted international
accounting standards. The financial statements have been prepared on a historical cost basis, except for the
measurement at fair value of investments.
When presentational guidance set out in the Statement of Recommended Practice (“SORP”) for Investment
Companies issued by the Association of Investment Companies (“the AIC”) in July 2022 is consistent with the
requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the
recommendations of the SORP.
In preparing these Financial Statements the Directors have considered the impact of climate change risk as a
Principal and emerging risk as set out on page 16. In line with the UK-adopted international accounting standards,
investments are valued at fair value, being primarily quoted prices for investments in active markets at the balance
sheet date, and therefore reflect market participant’s view of climate change risk. Unlisted investments, valued by
reference to appropriate valuation techniques (see note 3), similarly reflect market participants’ view of climate
change risk.
Going concern
The Directors have concluded that there is a reasonable expectation that the Company will have adequate liquidity
and cash balances to meet its liabilities as they fall due and continue in operational existence for the foreseeable
future and continue as a going concern for the period to 31 December 2024. As such the Directors have adopted the
going concern basis in preparing the financial statements.
Use of estimates and judgements
The preparation of the financial statements requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. Actual results may differ from these estimates. The resulting accounting estimates and assumptions will,
by definition, seldom equal the related actual results.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.
Notes to the Financial Statements
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Notes to the Financial Statements (continued)
2. Basis of preparation (continued)
The Indian capital gains tax provision represents an estimate of the amount of tax payable by the Company. Tax
amounts payable may differ from this provision depending on when the Company disposes of investments. The
current provision for Indian capital gains tax is calculated based on the long-term or short-term nature of the
investments and the applicable tax rate at the year end. Currently, the short-term tax rate is 15% and the long-term
tax rate is 10%. The estimated tax charge is subject to regular review including a consideration of the likely period of
ownership, tax rates and market valuation movements.
As disclosed in the statement of financial position, the Company made a capital gains tax provision as at 30 June
2023 of £7,713,000 (30 June 2022: £3,029,000) in respect of unrealised gains on investments held.
The Company’s investments are denominated in Indian rupees. However, the Company’s shares are issued in
sterling and the majority of its investors are UK based. The Company’s expenses and dividends are also paid in
sterling. Therefore, the financial statements are presented in sterling, which is the Company’s functional currency.
All financial information has been rounded to the nearest thousand pounds.
The key estimate in the financial statements is the determination of the fair value of the unlisted investments by the
Investment Manager for consideration by the Directors. This estimate is key as it significantly impacts the valuation of
the unlisted investments at the year end. The fair valuation process involves estimation using subjective inputs that
are unobservable (for which market data is unavailable). The key inputs considered in the valuation are described
on page 83.
Fair value estimates are cross-checked to alternative estimation methods where possible to improve the robustness
of the estimates. The risk of an over or under estimation of fair values is greater when methodologies are applied
using more subjective inputs.
Basis of measurement
The financial statements have been prepared on the historical cost basis except for financial instruments at fair
value through profit or loss, which are measured at fair value.
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3. Accounting policies
(a) Investments
Listed investments
Changes in the fair value of investments held at fair value through profit or loss and gains or losses on disposal
are included in the capital column of the Statement of Comprehensive Income within “gains on investments”.
Investments are derecognised on the trade date of their disposal, which is the point where the Company
transfers substantially all the risks and rewards of the ownership of the financial asset.
Transaction costs directly attributable to the acquisition of investments at fair value through profit or loss are
recognised under gains/(losses) on investments.
Unlisted investments
The Investment Manager unlisted investment valuation policy applies techniques consistent with the IPEV
Guidelines.
The techniques applied are predominantly market-based approaches or discounted cash flows where
appropriate forecasts can be done. The market-based approaches available under IPEV Guidelines are set
out below and are followed by an explanation of how they are applied to the Company’s unlisted portfolio:
— Multiples; and
— Industry Valuation Benchmarks.
The nature of the unlisted portfolio currently will influence the valuation technique applied. The valuation
approach recognises that, as stated in the IPEV Guidelines, the price of a recent investment, if resulting from
an orderly transaction, generally represents fair value as at the transaction date and may be an appropriate
starting point for estimating fair value at subsequent measurement dates. However, consideration is given
to the facts and circumstances as at the subsequent measurement date, including changes in the market
or performance of the investee company. Milestone analysis is used where appropriate to incorporate
the operational progress of the investee company into the valuation. Additionally, the background to the
transaction must be considered. As a result, various Multiples-based techniques are employed to assess
the valuations particularly in those companies with established revenues. Discounted cash flows are used
where appropriate. An absence of relevant industry peers may preclude the application of the industry
valuation benchmarks technique. All valuations are cross-checked for reasonableness by employing relevant
alternative techniques.
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Notes to the Financial Statements (continued)
3. Accounting policies (continued)
(b) Foreign currency
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing on the
dates of the transactions. At the date of each Statement of Financial Position, monetary assets and liabilities
that are denominated in foreign currencies are retranslated at the rates prevailing on that date. Non-monetary
assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the
rates prevailing at the date when the fair value was determined. Gains and losses arising on retranslation are
included in the Statement of Comprehensive Income within the revenue or capital column depending on the
nature of the underlying item. Foreign exchange movements on investments are included in the Statement of
Comprehensive Income within “losses on currency” movements.
(c) Income from investments
Dividend income from shares is accounted for on the basis of ex-dividend dates. Overseas income is grossed
up at the appropriate rate of tax.
Special dividends are assessed on their individual merits and may be credited to the Statement of
Comprehensive Income as a capital item if considered to be closely linked to reconstructions of the
investee company or other capital transactions. All other investment income is credited to the Statement of
Comprehensive Income as a revenue item.
Interest on fixed income instruments is accounted on an accrual basis.
(d) Capital reserves
Profits or losses arising on the sale of investments and changes in fair value arising upon the revaluation of
investments are credited or charged to the capital column of the Statement of Comprehensive Income and
allocated to the capital reserve.
Company’s redemption facility is subject to approval by the Board and as such the redemption facility does
not represent a contractual obligation on the Company and the shares are accordingly classified as equity.
(e) Expenses
All expenses are accounted for on an accruals basis. Expenses are recognised through the Statement of
Comprehensive Income as revenue items except that performance fees, if any, are payable directly by
reference to the capital performance of the Company as per the Investment Management Agreement and
are therefore charged to the Statement of Comprehensive Income as a capital item. No other management
fees are payable.
(f) Cash and cash equivalents
Cash comprises cash at hand and demand deposits. For purposes of the statement of cash flows, cash
equivalents, including bank overdrafts, are short-term, highly liquid investments that are readily convertible
to known amounts of cash, are subject to insignificant risks of changes in value, and are held for the purpose
of meeting short-term cash commitments rather than for investment or other purposes.
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(g) Taxation
Irrecoverable taxation on dividends is recognised on an accruals basis in the Statement of Comprehensive
Income. Indian tax rates for dividends with ex-dividend dates post 1 April 2020 are subject to 20% withholding
tax.
The tax charges on Indian capital gains taxes are shown in the Statement of Comprehensive Income,
recognised on an accrual basis. The Company is not subject to UK capital gains tax.
Deferred taxation
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts
of assets and liabilities in the financial statements and the corresponding tax bases used in the computation
of taxable profit and is accounted for using the statement of financial position liability method. Deferred tax
liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the
extent that it is probable that taxable profits will be available against which deductible temporary differences
can be utilised. Investment trusts which have approval as such under Section 1158 of the Corporation Tax Act
2010 are not liable for taxation on capital gains.
(h) Adoption of new IFRS standards
A number of new standards, amendments to standards and interpretations are effective for the annual
periods beginning on or after 1 January 2023. None of these are expected to have a material impact on the
measurement of the amounts recognised in the financial statements of the Company.
(i) New standards and amendments issued but not yet effective
The relevant new and amended standards and interpretations that are issued, but not yet effective, up
to the date of issuance of the Company’s financial statements are disclosed below. These standards are
not expected to have a material impact on the entity in future reporting periods and on foreseeable future
transactions.
Amendments to IAS 1: Classification of Liabilities as Current or Non-current
In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for
classifying liabilities as current or non-current. The amendments are effective for annual reporting periods
beginning on or after 1 January 2023.
Definition of Accounting Estimates – Amendments to IAS 8
In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of ‘accounting
estimates’. The amendments are effective for annual reporting periods beginning on or after 1 January 2023.
Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality
Judgements. The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023.
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Notes to the Financial Statements (continued)
4. Investmentsheldatfairvaluethroughprofitorloss
(a) Investments held at fair value through profit or loss
As at
30 June 2023
As at
30 June 2022
£’000 £’000
Quoted investments in India
233,303 177,998
Unquoted investments in India
3,461 5,363
Closing valuation
236,764 183,361
(b) Movements in valuation
As at
30 June 2023
As at
30 June 2022
£’000 £’000
Opening valuation
183,361 147,399
Opening unrealised gains on investments
29,059 46,121
Opening book cost
154,302 101,278
Additions, at cost
120,803 121,568
Disposals, at cost
(95,065) (68,544)
Closing book cost
180,040 154,302
Revaluation of investments
56,724 29,059
Closing valuation
236,764 183,361
Transaction costs on investment purchases for the year ended 30 June 2023 amounted to £163,000 (30 June 2022:
£159,000) and on investment sales for the financial year to 30 June 2023 amounted to £181,000 (30 June 2022:
£172,000). As at year end £2.3 million (30 June 2022: £11.6 million) of investments were subject to lock in periods.
(c) Gains on investments
Year ended
30 June 2023
Year ended
30 June 2022
£’000 £’000
Realised gains on disposal of investments
16,484 25,241
Transaction costs
(344) (331)
Movement in unrealised gains/(losses) on investments held
27,665 (17,062)
Total gains on investments
43,805 7,848
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Under IFRS 13 ‘Fair Value Measurement’, an entity is required to classify investments using a fair value hierarchy
thatreflectsthesignificanceoftheinputsusedinmakingthemeasurementdecision.
Thefollowingshowstheanalysisoffinancialassetsrecognisedatfairvaluebasedon:
Level 1
Quotedprices(unadjusted)in activemarkets foridentical assets or liabilitiesthat theentity can accessat the
measurement date.
Level 2
Inputsotherthanquotedpricesincludedwithinlevel1thatareobservablefortheassetorliability,eitherdirectly
or indirectly.
Level 3
Unobservableinputsfortheassetorliability.
TheclassificationoftheCompany’sinvestmentsheldatfairvalueisdetailedinthetablebelow:
As at 30 June 2023 As at 30 June 2022
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
£’000 £’000 £’000 £’000 £’000 £’000 £’000 £’000
Investments at fair value through
profit and loss – Quoted investments
in India
233,303 – – 233,303 177,998 – – 177,998
Unquoted investments in India
– – 3,461 3,461 – – 5,363 5,363
233,303 – 3,461 236,764 177,998 – 5,363 183,361
As at
30 June 2023
As at
30 June 2022
£’000 £’000
Opening balance
5,363 6,323
Additions during the year
1,199 5,416
Conversion from level 3 to level 1 investments
(2,916) (6,353)
Total losses for the year recognised in profit or loss
(185) (23)
Closing balance
3,461 5,363
As at year end, the Company had two unquoted investments. These are investment in Ideaforge Technology Ltd for
a total of 178,464 shares and investment in Veeda Clinical Research Ltd for a total of 680,790 shares.
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Notes to the Financial Statements (continued)
4. Investmentsheldatfairvaluethroughprofitorloss(continued)
As at the end of prior year, investment in Bikaji Foods International Limited was classified as Level 3 investment as
there is no available market price. During the year, the investment has entered into an Initial Public Offering and has
been classified as Level 1 Investment.
Unquoted investments are valued by the Investment Manager in accordance with the International Private Equity
and Venture Capital Valuation Guidelines 2022 (“IPEV”) guidelines which are consistent with IFRS. On 14 December
2022, the IPEV Board published revised International Private Equity and Venture Capital Valuation Guidelines (“IPEV
Guidelines” or “Valuation Guidelines” or “Guidelines”), which will replace the 2018 Valuation Guidelines. The revised
Guidelines are effective for periods beginning from 1 January 2023, with early adoption encouraged. The guidelines
are consistent with IFRS. The Investment Manager applies techniques consistent with the IPEV. The key inputs
considered in the valuation are described on page 83.
Financial assets and liabilities are held at fair value in the financial statements with the exception of short-term
assets and liabilities where their carrying value approximates to fair value.
5. Income
As at
30 June 2023
As at
30 June 2022
£’000 £’000
Income from investments:
Overseas dividends
1,307 1,040
Other Income:
Deposit interest
1 –
Total income
1,308 1,040
6. Otherpayables
As at
30 June 2023
As at
30 June 2022
£’000 £’000
Accrued expenses
520 203
Total other payables
520 203
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7. Performance fees provision
Year ended 30 June 2023 Year ended 30 June 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Performance fees expenses
– 2,464 2,464 – – –
The Investment Manager does not receive a fixed management fee in respect of its portfolio management services
to the Company. The Investment Manager will become entitled to a performance fee subject to the Company
delivering excess returns versus the MSCI India IMI Index in the medium term. The performance fee will be measured
over periods of three years (Performance Period), with the first period ending (approximately three years from 6 July
2018) on 30 June 2021. The performance fee in any Performance Period shall be capped at 12% of the time weighted
average adjusted net assets during the relevant Performance Period.
The performance fee is calculated at a rate of 30% of the excess returns between adjusted NAV per share on the
last day of the performance period and the MSCI India IMI Index (sterling) over the performance period, adjusted for
the weighted average number of Ordinary Shares in issue during the performance period. The Performance Fee in
respect of each Performance Period will be paid at the end of the three-year period.
As at 30 June 2023, there was a £2,464,000 provision for the performance fee liability to the Investment Manager for
the full two year period (30 June 2022: nil, for the one year period).
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Notes to the Financial Statements (continued)
8. Expenses
Year ended
30 June 2023
Year ended
30 June 2022
£’000 £’000
Administration & secretarial fees
197 158
Auditor’s remuneration – Statutory audit fee*
67 45
Broker fees
32 33
Custody services
40 30
Directors’ fees and expenses
128 128
Board trip to India costs
31 17
Tax compliance and advice
30 27
Printing and public relations
202 192
Marketing fees**
84 –
Registrar fees
24 18
Legal Fees
92 90
UKLA and other regulatory fees
16 10
Other expenses***
98 84
Total
1,041 832
* Auditor’s remuneration excludes VAT.
** The Company has incurred marketing fees during the period.
*** Other expenses include LSE, KID fees, Distribution fees, other license fees, bank charges and other miscellaneous
fees.
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9. Taxation
(a) Analysis of charge in the year:
Year ended 30 June 2023 Year ended 30 June 2022
Revenue Capital Total Revenue Capital Total
£’000 £’000 £’000 £’000 £’000 £’000
Capital gains tax provision
– 4,684 4,684 98 1,369 1,467
Capital gains tax expense/(credit)
– 2,535 2,535 – (3,048) (3,048)
Indian withholding tax
139 – 139 104 – 104
Total tax charge for the year
139 7,219 7,358 202 (1,679) (1,477)
The Company is liable to Indian capital gains tax under Section 115 AD of the Indian Income Tax Act 1961. A tax
provision on Indian capital gains is calculated based on the long-term (securities held more than one year) or
short-term (securities held less than one year) nature of the investments and the applicable tax rate at the period
end. The short-term tax rates are 15% and the long-term tax rates are 10%.
The Company’s dividends are received net of 20% withholding tax. Of this 20% withholding tax charge, 10% is
irrecoverable with the remainder being shown in the Statement of Financial Position as an asset due for reclaim.
(b) Factors affecting the tax charge for the year:
The effective UK corporation tax rate for the year is 20.5%. The tax charge differs from the charge resulting from
applying the standard rate of UK corporation tax for an investment trust company. The differences are explained
below:
Year ended
30 June 2023
Year ended
30 June 2022
£’000 £’000
Operating profit before taxation
41,938 7,747
UK Corporation tax at 20.5% (2022: 19%)
8,597 1,472
Effects of:
Indian capital gains tax provision
7,219 (1,679)
Gains on investments not taxable
(9,048) (1,432)
Overseas dividends not taxable
(268) (198)
Unutilised management expenses
719 158
Indian withholding tax
139 202
Total tax charge for the year
7,358 (1,477)
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Notes to the Financial Statements (continued)
9. Taxation (continued)
The Company is not liable to UK Corporation tax on capital gains due to its status as an investment trust. The
Company has an unrecognised deferred UK Corporation tax asset of £3,465,000 (2022: £2,589,000) based on the
prospective UK corporation tax rate of 25% (2022: 25%). This asset has accumulated because deductible expenses
exceeded taxable income for the year ended 30 June 2023. No asset has been recognised in the accounts because,
given the composition of the Company’s portfolio, it is unlikely that this asset will be utilised in the foreseeable future.
(c) Movements on the capital gains tax provision for the year
The capital gains tax provision represents an estimate of the amount of tax provisionally payable by the Company on
direct investment in Indian equities. It is calculated based on the long-term or short-term nature of the investments
and the unrealised gain thereon at the applicable tax rate at the year end. As of 30 June 2023, the Company made
a capital gains tax provision of £7,713,000 (30 June 2022: £3,029,000) in respect of unrealised gains on investments
held.
10. Earnings per Ordinary Share
Year ended 30 June 2023 Year ended 30 June 2022
Revenue Capital Total Revenue Capital Total
Profit for the year (£’000)
128 34,452 34,580 6 9,218 9,224
Earnings per Ordinary Share
0.14p 38.51p 38.65p 0.01p 9.46p 9.47p
Earnings per Ordinary Share is based on the profit for the year of £34,580,000 (30 June 2022: profit of £9,224,000)
attributable to the weighted average number of Ordinary Shares in issue during the year ended 30 June 2023 of
89,469,919 (30 June 2022: 97,433,268). Revenue and capital profits are £128,000 (30 June 2022: revenue profit of
£6,000) and £34,452,000 (30 June 2022: capital profit of £9,218,000) respectively.
11. Dividend
The Company’s objective is to provide shareholder returns through capital growth with income being a secondary
consideration. It should not be expected that the Company will pay a significant annual dividend, but the Board
intends to declare such annual dividends as are necessary to maintain the Company’s UK investment trust status.
The Board is proposing that no dividend be paid in respect of the year ended 30 June 2023 in accordance with the
Company’s Dividend policy on page 12.
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12. Share capital
As at 30 June 2023 As at 30 June 2022
No. of shares £’000 No. of shares £’000
Allotted, issued and fully paid:
Redeemable Ordinary Shares of 1p each
(“Ordinary Shares”)
112,807,812 1,128 107,567,672 1,076
Total
112,807,812 1,128 107,567,672 1,076
Ordinary Shares
On incorporation, the issued share capital of the Company was 1 Ordinary Share of £0.01.
During the year ended 30 June 2023, 5,240,140 Ordinary Shares (30 June 2022: 22,590,042) were issued with aggregate
proceeds of £10,735,000 (30 June 2022: £42,102,000). Additionally, 124,374 Ordinary Shares were matched with buyers
in the market in respect of the 30 September 2022 annual Redemption Point. As at the date of this Annual Report, the
total number of Ordinary Shares in issue is 112,807,812 (30 June 2022: 107,567,672).
The Ordinary Shares have attached to them full voting, dividend and capital distribution rights. They confer rights
of redemption. The Company’s special distributable reserve may also be used for share repurchases, both into
treasury or for cancellation. Since year end and up to 4 October 2023, being the latest practical date prior to the
signing of the financial statements, 5,707,135 Ordinary Shares were issued with aggregate proceeds of £12,534,144.
Management shares
In addition to the above, on incorporation the Company issued 50,000 Management Shares of nominal value of
£1.00 each.
The holder of the Management Shares undertook to pay or procure payment of one quarter of the nominal value
of each Management share on or before the fifth anniversary of the date of issue of the Management Shares. The
Management Shares are held by an associate of the Investment Manager.
The Management Shares do not carry a right to attend or vote at general meetings of the Company unless no other
shares are in issue at that time. The Management Shares have been treated as equity in accordance with IFRS.
13. Specialdistributablereserve
As indicated in the Company’s prospectus dated 19 June 2018, following admission of the Company’s Ordinary
Shares to trading on the LSE, the Directors applied to the Court and obtained a judgement on 4 December 2018 to
cancel the amount standing to the credit of the share premium account of the Company. The amount of the share
premium account cancelled and credited to a special distributable reserve was £44,275,898. This reserve may also
be used to fund dividend/distribution payments.
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Notes to the Financial Statements (continued)
14. Net asset value (“NAV”) per Ordinary Share
Net assets per ordinary share as at 30 June 2023 of £206.2p (30 June 2022: £174.2p) is calculated based on
£232,551,000 (30 June 2022: £187,386,000) of net assets of the Company attributable to the 112,807,812 (30 June 2022:
107,567,672) Ordinary Shares in issue as at 30 June 2023.
15. Financial instruments and capital disclosures
(i) Market risks
The Company is subject to a number of market risks in relation to economic conditions in India. Further detail on
these risks and the management of these risks are included page 14 in the Strategic report.
The Company’s financial assets and liabilities comprised:
As at 30 June 2023 As at 30 June 2022
Interest
bearing
Non-interest
bearing Total
Interest
bearing
Non-interest
bearing Total
£’000 £’000 £’000 £’000 £’000 £’000
Investments
– 236,764 236,764 – 183,361 183,361
Total investment
– 236,764 236,764 – 183,361 183,361
Cash and cash equivalent
– 6,489 6,489 – 7,027 7,027
Short-term debtors
– 454 454 – 230 230
Short-term creditors
– (3,443) (3,443) – (203) (203)
Other assets
– 3,500 3,500 – 7,054 7,054
Total financial assets
– 240,264 240,264 – 190,415 190,415
Market price risk sensitivity
The effect on the portfolio of a 10.0% increase or decrease in market prices would have resulted in an increase or
decrease of £23,676,000 (30 June 2022: £18,336,000) in the investments held at fair value through profit or loss at
the year end, which is equivalent to 10.20% (30 June 2022: 9.8%) of the net assets attributable to equity holders. This
analysis assumes that all other variables remain constant.
The Company’s portfolio of unlisted level 3 investments is not necessarily affected by market performance, however
the valuations may be affected by the performance of the underlying securities in line with the valuation criteria in
note 15.
The unlisted securities sensitivity analysis recognises that the valuation methodologies employed involve different
levels of subjectivity in their inputs. The valuations as at 30 June 2023 were primarily driven by the weighted average
of Discounted Cash Flow (DCF) valuation, Market movement based valuation based on Index and Peer Group.
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A. Veeda Clinical Research
Valuation
Technique
Fair value of
investments
Key variable
input
Variable input
sensitivity
(%)
Positive
impact
Negative
impact
£’000 £’000 £’000
Weighted average
of the following:
1. Discounted Cash
Flow (DCF);
2. Market
movement
based valuation
based on Index;
and
3. Market
movement
based valuation
based on Peer
Group.
2,304 Expected future
cash flows and
equity discount
rate/WACC;
Selection of Index
used; and
Selection of
comparable
companies based
on peer group.
10% change in
discount rates
3,285 1,878
B. ideaForge Technology Limited
Valuation
Technique
Fair value of
investments
Key variable
input
Variable input
sensitivity
(%)
Positive
impact
Negative
impact
£’000 £’000 £’000
Subscription price
at 23 June 2023
1,157 N/A N/A N/A N/A
Key variable inputs
The variable inputs applicable to each broad category of valuation basis will vary dependent on the particular
circumstances of each unlisted company valuation. An explanation of each of the key variable inputs is provided
below and includes an indication of the range in value for each input, where relevant.
Expected future cash flows and equity discount rate/WACC
The expected future cash flows are calculated using the aggregate future operating revenue based on growth in
existing and new products resulting from the investment’s ongoing capex and expansion plans. Equity discount
rate/WACC is calculated at 14.2%.
Selection of Index used
The selection of index is assessed based on the market comparable index to the Company. MSCI India IMI and S&P
BSE 500 were used for the market movement-based valuation based on index.
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Notes to the Financial Statements (continued)
15. Financial instruments and capital disclosures (continued)
Selection of comparable companies
The selection of comparable companies is assessed individually for each investment at the point of investment,
and the relevance of the comparable companies is continually evaluated at each valuation. The key criteria used
in selecting appropriate comparable companies are the industry sector in which they operate and the geography
of the company’s operations.
Application of valuation basis
Each investment is assessed and the valuation basis applied will vary depending on the circumstances of each
investment. For those investments where a trading multiples approach can be taken, the methodology will factor in
revenue, earnings or net assets as appropriate for the investment. Discounted cash flows will be considered where
appropriate forecasts are available. The valuation will also consider any recent transactions, where appropriate.
Estimated sustainable earnings and cash flows
The selection of sustainable revenue or earnings and cash flows will depend on whether the company is sustainably
profitable or not, and where it is not then sustainable revenues will be used in the valuation. The valuation approach
will typically assess companies based on the last twelve months of revenue or earnings, as they are the most recent
available and therefore viewed as the most reliable. Where a company has reliably forecasted earnings previously or
there is a change in circumstance at the business which will impact earnings going forward, then forward estimated
revenue or earnings may be used instead.
Application of liquidity discount
A liquidity discount may be applied either through the calibration of a valuation against the most recent transaction,
or by application of a specific discount.
(ii) Liquidity risks
Liquidity risk is that the Company will not be able to meet its obligations when due. An analysis of the Company’s
portfolio that could be liquidated over different time periods as at the year end is shown below:
30 June 2023 30 June 2022
% %
Within one to seven days
83.9 88.8
Between seven days to one month
11.2 4.7
Between one and three months
1.6 1.1
Greater than three months
3.3 5.4
Total
100.0 100.0
Management of liquidity risks
The Company has a diversified portfolio which is readily realisable. The liquidity of the portfolio is reviewed regularly
by the Investment Manager and the Board.
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(iii) Currency risks
Although the Company’s performance is measured in sterling, a high proportion of the Company’s assets are
denominated in Indian rupees. Change in the exchange rate between sterling and Indian rupees may lead to a
depreciation of the value of the Company’s assets as expressed in sterling and may reduce the returns to the
Company from its investments.
Currency sensitivity
The below table shows the foreign currency profile of the Company.
Foreign currency risk profile
As at 30 June 2023 As at 30 June 2022
Investment
exposure
Net
monetary
exposure
Total
currency
exposure
Investment
exposure
Net
monetary
exposure
Total
currency
exposure
£’000 £’000 £’000 £’000 £’000 £’000
Indian rupees
230,513 5,377 235,890 177,785 4,138 181,923
Swedish Krona
561 – 561 1,788 – 1,788
US Dollar
5,690 347 6,037 3,788 28 3,816
Total investment
236,764 5,724 242,488 183,361 4,166 187,527
Based on the financial assets and liabilities at 30 June 2023, and with all other variables remaining constant, if
sterling had weakened/strengthened against the Indian rupee by 10%, the impact on the Company’s net assets at
30 June 2023 would have been an increase/(decrease) in fair value as follows:
30 June 2023 30 June 2022
Increase in
Fair Value
Decrease in
Fair Value
Increase in
Fair Value
Decrease in
Fair Value
£’000 £’000 £’000 £’000
Indian rupees
23,051 (23,051) 17,778 (17,778)
Swedish Krona
56 (56) 179 (179)
US Dollar
569 (569) 379 (379)
Management of currency risks
The Company’s Investment Manager monitors the currency risk of the Company’s portfolio on a regular basis.
Foreign currency exposure is regularly reported to the Board by the Investment Manager.
The Board does not intend to use hedge currency risk using any sort of foreign currency transactions, forward
transactions or derivative instruments.
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Notes to the Financial Statements (continued)
15. Financial instruments and capital disclosures (continued)
(iv) Credit risks
Credit risk is the risk that the issuer of a financial instrument will fail to fulfil an obligation or commitment that it has
entered into with the Company.
Cash and other assets are held by the custodian.
Management of credit risks
The Company has appointed Kotak Mahindra Bank Limited (“Kotak”) as its depositary. The credit rating of Kotak was
reviewed at the time of appointment and is reviewed on a regular basis by the Investment Manager and the Board.
The Investment Manager monitors the Company’s exposure to its counterparties on a regular basis and trades in
equities are performed on a delivery versus payment basis. Impairment assessment based on an expected credit
loss model is not considered material to the Company.
At 30 June 2023, the Depository held £233,303,000 (30 June 2022: £177,998,000) in respect of quoted investments and
£6,489,000 (30 June 2022: £7,027,000 in respect of cash on behalf of the Company.
(v) Capital management policies and procedures
The Company considers its capital to consist of its share capital of Ordinary Shares of 1p each, Management Shares
of £1 each, and reserves totalling £232,551,000 (30 June 2022: £187,386,000).
The Company is not subject to any externally imposed capital requirements.
The Investment Manager and the Company’s Broker monitor the demand for the Company’s shares and the Directors
review the position at Board meetings.
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16. Related party transactions
Performance fees payable to the Investment Manager are disclosed in Note 7.
White Oak Capital Partners provides investment advisory services to the Investment Manager and no fees are paid
to them from the Company.
Since commencement of operations on 6 July 2018 fees were payable at an annual rate of £35,000 to the Chairman,
£27,500 to the Chair of the Audit Committee, and £25,000 to the other Directors. From 1 July 2021 fees were payable
at an annual rate of £40,000 to the Chairman, £32,500 to the Chair of the Audit Committee, and £27,500 to the other
Directors.
The Directors had the following shareholdings in the Company, all of which are beneficially owned.
As at date
of this report
As at
30 June 2023
As at
30 June 2022
Andrew Watkins
94,425 94,425 94,425
Jamie Skinner
95,985 94,200 84,733
Rita Dhut
81,733 81,733 81,733
Dr Jerome Booth
80,213 77,623 66,202
17. Postbalancesheetevents
As announced on 5 September 2023, the total number of Ordinary Shares in respect of redemption requests were
received for this Redemption Point was 547,339. All of which were immediately placed with buyers by the Company’s
corporate broker. The NAV per share of the Company has increased by 9.7% from 30 June 2023 to 4 October 2023,
being the latest practical date prior to the signing of these accounts.
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Ordinary share price to NAV premium
The amount, expressed as a percentage, by which the share price is more than the Net Asset Value per Ordinary
Share.
Page
As at
30 June
2023
As at
30 June
2022
NAV per Ordinary Share (pence)
a 2 206.2 174.2
Share price (pence)
b 2 209.0 175.0
Premium
(b÷a)-1 2 1.4% 0.5%
Ongoing charges
A measure, expressed as a percentage of average net assets, of the regular, recurring annual costs of running an
investment company.
Page
Year ended
30 June
2023
Year ended
30 June
2022
Average NAV
a n/a 215,928,920 180,178,969
Annualised expenses*
b n/a 1,041,000 832,000
Ongoing charges
(b÷a)-1 n/a 0.5% 0.5%
* Annualised expenses exclude performance fees expense.
Share price/NAV total return
A measure of performance that includes both income and capital returns.
Year ended 30 June 2023 Page Share price NAV
Opening at 1 July 2022 (p)
a n/a 175.0 174.2
Closing at 30 June 2023 (p)
b 2 209.0 206.2
Total return
(b÷a)-1 19.4% 18.3%
Year ended 30 June 2022 Page Share price NAV
Opening at 1 July 2021 (p)
a n/a 162.5 158.9
Closing at 30 June 2022 (p)
b 2 175.0 174.2
Total return
(b÷a)-1 7.7% 9.6%
Alternative Performance Measures
OTHER INFORMATION
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AIC Association of Investment Companies
Alternative Investment Fund or “AIF” An investment vehicle under AIFMD. Under AIFMD (see below) the
Company is classified as an AIF.
Alternative Investment Fund Managers
Directive or “AIFMD”
A European Union directive which came into force on 22 July 2013
and has been implemented in the UK.
Annual General Meeting or “AGM” A meeting held once a year which Shareholders can attend
and where they can vote on resolutions to be put forward at the
meeting and ask directors questions about the company in which
they are invested.
Alternative Performance Measures
“APMs”
Financial measures of historical or future financial performance,
financial position, or cash flows, other than a financial measure
defined or specified in the applicable financial reporting
framework.
Custodian An entity that is appointed to safeguard a company’s assets.
Discount The amount, expressed as a percentage, by which the share price
is less than the net asset value per share.
DTR Disclosure Guidance and Transparency Rule.
Dividend Income receivable from an investment in shares.
Ex-dividend date The date from which you are not entitled to receive a dividend
which has been declared and is due to be paid to Shareholders.
Financial Conduct Authority or “FCA” The independent body that regulates the financial services
industry in the UK.
Gearing A way to magnify income and capital returns, but which can also
magnify losses. A bank loan is a common method of gearing.
IFRS International Financial Reporting Standards.
Index A basket of stocks which is considered to replicate a particular
stock market or sector.
Investment Company A company formed to invest in a diversified portfolio of assets.
Investment Trust An investment company which is based in the UK and which
meets certain tax conditions which enables it to be exempt
from UK corporation tax on its capital gains. The Company is an
investment trust.
Glossary
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Glossary (continued)
Liquidity The extent to which investments can be sold at short notice.
London Stock Exchange or “LSE” The primary stock exchange in the United Kingdom and the
largest in Europe.
Management Shares Non-redeemable Management Shares of £1.00 each in the capital
of the Company held.
MSCI India IMI The MSCI India Investable Market Index measures the performance
of the large, mid and small cap segments of the Indian market. It is
used by the Company as a comparative performance measure.
Net assets or net asset value (“NAV”) An investment company’s assets less its liabilities.
NAV per Ordinary Share Net assets divided by the number of Ordinary Shares in issue.
Ongoing charges A measure of the regular, recurring annual costs of running an
investment company, expressed as a percentage of average net
assets.
Ordinary Shares Redeemable ordinary shares of £0.01 each in the capital of the
Company.
Principles for Responsible Investment
Initiative “PRI”
Principles for Responsible Investment is a United Nations-
supported international network of investors working together to
implement its six aspirational principles, often referenced as “the
Principles”.
Portfolio A collection of different investments held in order to deliver returns
to Shareholders and to spread risk.
Premium The amount, expressed as a percentage, by which the share price
is more than the net asset value per share.
Redemption Point The date and time at which all redemption requests and relevant
documentation for annual redemption of Ordinary Shares must
be received by the Company’s Registrar from Shareholders.
Redemption Price The price at which shares in the Company are redeemed from
Shareholders.
Relative Performance Measurement of returns relative to an index.
Share buyback A purchase of a company’s own shares. Shares can either be
bought back for cancellation or held in treasury.
Share price The price of a share as determined by a relevant stock market.
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Total return A measure of performance that takes into account both income
and capital returns. This may take into account capital gains,
dividends, interests and other realised variables over a given
period of time.
Treasury shares A company’s own shares which are available to be sold by a
company to raise funds.
Volatility A measure of how much a share moves up and down in price
over a period of time.
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Directors
Andrew Watkins (Chairman)
Jamie Skinner
Dr Jerome Booth
Rita Dhut
Investment Manager and AIFM
Acorn Asset Management Ltd
4th Floor, 19 Bank Street
Cybercity, Ebene 72201
Republic of Mauritius
Broker
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
Custodian
Kotak Mahindra Bank Limited
3rd Floor, 27 BKC
C-27 G-Block
Bandra Kurla Complex
Bandra East
Mumbai 400051
India
Auditors
Ernst & Young LLP
25 Churchill Place
London
E14 5EY
Registered Office
6th Floor 125 London Wall,
London, England, EC2Y 5AS
Registered in England under No. 11356069
Investment Adviser
White Oak Capital Partners Pte. Ltd.
8 Temasek Boulevard #22-04,
Suntec City Tower 3,
Singapore 038988
Company Secretary & Administrator
Apex Listed Companies Services (UK) Limited
6th Floor 125 London Wall, London,
England, EC2Y 5AS
Registrar
Computershare Investor Services Plc
The Pavilions
Bridgwater Road
Bristol BS13 8AE
Legal Adviser
Stephenson Harwood LLP
1 Finsbury Circus
London EC2M 7SH
Research & Intermediary Broker
Kepler Partners LLP
70 Conduit Street
London
W1S 2GF
PR Consultants
Lansons
24A St John St,
Barbican,
London EC1M 4AY
Directors, Investment Manager and Advisers
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Notice of Meeting
Notice is hereby given that the Annual General Meeting of Ashoka India Equity Investment Trust plc will be held at the
offices of White Oak Capital Management Ltd at 13 Hanover Square, London W1S 1HN on 8 December 2023 at 12 noon
for the following purposes:
To consider and if thought fit pass the following resolutions of which resolutions 1 to 11 will be proposed as ordinary
resolutions and resolutions 12 to 15 will be proposed as special resolutions.
Ordinary Resolutions
1. To receive and adopt the Company’s Annual Report and Accounts for the year ended 30 June 2023, with the
reports of the Directors and Auditor thereon.
2. To approve the Directors’ Remuneration Report included in the Annual Report for the year ended 30 June 2023.
3. To re-elect Andrew Watkins as a Director of the Company.
4. To re-elect Dr Jerome Booth as a Director of the Company.
5. To re-elect Rita Dhut as a Director of the Company.
6. To re-elect Jamie Skinner as a Director of the Company.
7. To re-appoint Ernst & Young LLP as Auditor to the Company, to hold office from the conclusion of this meeting
until the conclusion of the next Annual General Meeting at which accounts are laid before the Company.
8. To authorise the Directors to fix the remuneration of the Auditor until the conclusion of the next Annual General
Meeting of the Company.
9. To approve the Dividend Policy included in the Annual Report for the year ended 30 June 2023.
10. That the Directors be and are hereby generally and unconditionally authorised in accordance with section 551 of
the Companies Act 2006 (the “Act”) (in addition to any subsisting authorities to the extent unused) to exercise
all the powers of the Company to allot up to 23,702,989 Ordinary Shares of 1 penny each in the capital of the
Company (“Ordinary Shares”) (equivalent to 20% of the Ordinary Shares in issue at the date of this notice of
Annual General Meeting), such authority to expire (unless previously varied, revoked or renewed by the Company
in general meeting) at the conclusion of the Annual General Meeting of the Company to be held in 2024 or, if
earlier, on the expiry of 15 months from the passing of this resolution, save that the Company may, at any time
prior to the expiry of such authority, make an offer or enter into an agreement which would or might require the
allotment of shares in pursuance of such an offer or agreement, and the Directors may allot Ordinary Shares in
pursuance of such offer or agreement as if such authority had not expired.
11. That the Directors be and are hereby generally and unconditionally authorised in accordance with section 551
of the Act to exercise all the powers of the Company to allot up to 23,702,989 Ordinary Shares (equivalent to
20% of the Ordinary Shares in issue at the date of this notice of Annual General Meeting) in connection with
any performance fees payable to the Investment Manager (as defined and described in the prospectus of the
Notice of Annual General Meeting
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Notice of Annual General Meeting (continued)
Company dated 20 December 2019), such authority to expire (unless previously varied, revoked or renewed by
the Company in general meeting) at the conclusion of the Annual General Meeting of the Company to be held
in 2024 or, if earlier, on the expiry of 15 months from the passing of this resolution, save that the Company may,
at any time prior to the expiry of such authority, make an offer or enter into an agreement which would or might
require the allotment of shares in pursuance of such an offer or agreement as if such authority had not expired.
Special Resolutions
12. That, subject to the passing of Resolution 10 above, the Directors be and are hereby empowered (pursuant to
sections 570 and 573 of the Act) to allot Ordinary Shares and to sell Ordinary Shares from treasury for cash
pursuant to the authority referred to in Resolution 10 above as if section 561 of the Act did not apply to any such
allotment or sale, such power to expire (unless previously varied, revoked or renewed by the Company in general
meeting) at the conclusion of the Annual General Meeting of the Company to be held in 2024 or, if earlier, on
the expiry of 15 months from the passing of this resolution, save that the Company may, at any time prior to the
expiry of such power, make an offer or enter into an agreement which would or might require equity securities to
be allotted or sold from treasury after the expiry of such power, and the Directors may allot or sell from treasury
equity securities in pursuance of such an offer or an agreement as if such power had not expired.
13. That, subject to the passing of Resolution 11 above, the Directors be and are hereby empowered (pursuant to
sections 570 and 573 of the Act) to allot Ordinary Shares and to sell Ordinary Shares from treasury for cash
pursuant to the authority referred to in Resolution 11 above as if section 561 of the Act did not apply to any such
allotment or sale, such power to expire (unless previously varied, revoked or renewed by the Company in general
meeting) at the conclusion of the Annual General Meeting of the Company to be held in 2024 or, if earlier, on
the expiry of 15 months from the passing of this resolution, save that the Company may, at any time prior to the
expiry of such power, make an offer or enter into an agreement which would or might require equity securities to
be allotted or sold from treasury after the expiry of such power, and the Directors may allot or sell from treasury
equity securities in pursuance of such an offer or an agreement as if such power had not expired.
14. That the Company be and is hereby generally and unconditionally authorised in accordance with section 701
of the Act to make market purchases (within the meaning of section 693(4) of the Act) of its Ordinary Shares,
provided that:
a) the maximum number of Ordinary Shares hereby authorised to be purchased shall be 17,776,056 (representing
14.99 per cent of the Company’s issued Ordinary Share capital (excluding shares held in treasury) at the
date of this notice of Annual General Meeting);
b) the minimum price (exclusive of any expenses) which may be paid for an Ordinary Share is 1 penny.
c) the maximum price (excluding expenses) which may be paid for an Ordinary Share is not more than the
higher of (i) 5 per cent. above the average of the mid-market values of the Ordinary Shares for the five
business days before the purchase is made; and (ii) the higher of the price of the last independent trade
and the highest current independent bid for the Ordinary Shares;
d) the authority hereby conferred shall expire at the conclusion of the Annual General Meeting of the Company
in 2024 or, if earlier, on the expiry of 15 months from the passing of this resolution, unless such authority is
renewed prior to such time; and
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e) the Company may make a contract to purchase Ordinary Shares under the authority hereby conferred prior
to the expiry of such authority, which will or may be executed wholly or partly after the expiration of such
authority and may make a purchase of Ordinary Shares pursuant to any such contract.
15. That a general meeting of the Company other than an Annual General Meeting may be called on not less than
14 clear days’ notice, provided that this authority shall expire at the conclusion of the Company’s next Annual
General Meeting after the date of the passing of this resolution.
Jenny Thompson
For and on behalf of
Apex Listed Companies Services (UK) Limited
Company Secretary
6 October 2023
6th Floor,
125 London Wall, London,
England, EC2Y 5AS
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Notice of Annual General Meeting (continued)
Notes to the notice of Annual General Meeting
Website address
1. Information regarding the meeting, including the information required by section 311A of the Companies Act
2006, is available from www.ashokaindiaequity.com.
Entitlement to attend and vote
2. Only those holders of Ordinary Shares registered on the Company’s register of members at close of business on
6 December 2023 or, if this meeting is adjourned, at close of business on the day two days (excluding nonworking
days) prior to the adjourned meeting, shall be entitled to attend and vote at the meeting.
Appointment of Proxies
3. Members entitled to attend, speak and vote at the meeting (in accordance with Note 2 above) are entitled to
appoint one or more proxies to attend, speak and vote in their place. If you wish to appoint a proxy please use
the Form of Proxy enclosed with this document or follow the instructions at note 6 below if you wish to appoint a
proxy through the CREST electronic proxy appointment service. In the case of joint members, only one need sign
the Form of Proxy. The vote of the senior joint member will be accepted to the exclusion of the votes of the other
joint members. For this purpose, seniority will be determined by the order in which the names of the members
appear in the register of members in respect of the joint shareholding. The completion and return of the Form
of Proxy will not stop you attending and voting in person at the meeting should you wish to do so. A proxy need
not be a member of the Company. You may appoint more than one proxy provided each proxy is appointed to
exercise the rights attached to a different share or shares held by you. If you choose to appoint multiple proxies
use a separate copy of the Form of Proxy (which you may photocopy) for each proxy, and indicate after the
proxy’s name the number of shares in relation to which they are authorised to act (which, in aggregate, should
not exceed the number of Ordinary Shares held by you). Please also mark the box to indicate that the proxy
instruction is one of multiple appointments being made. All forms must be signed and returned in the same
envelope.
4. You can appoint the Chairman of the Meeting, or any other person, as your proxy. If you wish to appoint someone
other than the Chairman, cross out the words ‘the Chairman of the Meeting’ on the Form of Proxy and insert the
full name of your appointee.
5. You can instruct your proxy how to vote on each resolution by marking inside the ‘For’ and ‘Against’ boxes with an
‘X’ as appropriate (or entering the number of shares which you are entitled to vote). If you wish to abstain from
voting on any resolution please mark the box which is marked ‘Vote Withheld’ with an ‘X’. It should be noted that
a vote withheld is not a vote in law and will not be counted in the calculation of the proportion of votes ‘For’ and
‘Against’ a resolution. If you do not indicate on the Form of Proxy how your proxy should vote, he/she can exercise
his/her discretion as to whether, and if how so how, he/she votes on each resolution, as he/she will do in respect
of any other business (including amendments to resolutions) which may properly be conducted at the meeting.
A company incorporated in England and Wales or Northern Ireland should execute the Form of Proxy under its
common seal or otherwise in accordance with Section 44 of the Companies Act 2006 or by signature on its
behalf by a duly authorised office or attorney whose power of attorney or other authority should be enclosed
with the Form of Proxy.
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Appointment of Proxy using Hard Copy Form
6. The Form of Proxy and any power of attorney (or a notarially certified copy or office copy thereof) under which
it is executed must be received by Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol,
BS99 6ZY at 12 noon on 6 December 2023 in respect of the meeting. Any Forms of Proxy received before such time
will be deemed to have been received at such time. In the case of an adjournment, the Form of Proxy must be
received by Computershare no later than 48 hours before the rescheduled meeting.
On completing the Form of Proxy, sign it and return it to Computershare at the address shown on the Form of
Proxy in the envelope provided. As postage has been pre-paid no stamp is required.
Appointment of Proxy through CREST
7. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service
may do so for the meeting to be held on the above date and any adjournment(s) thereof by using the procedures
described in the CREST Manual. CREST Personal Members or other CREST sponsored members, and those CREST
members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate
CREST message (a ‘CREST Proxy Instruction’) must be properly authenticated in accordance with Euroclear
UK & International Limited’s specifications and must contain the information required for such instructions, as
described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or
an amendment to the instruction given to a previously appointed proxy, must, in order to be valid, be transmitted
so as to be received by the Company’s agent (ID: 3RA50) by the latest time(s) for receipt of proxy appointments
specified in the notice of meeting.
For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to
the message by the CREST Applications Host) from which the Company’s agent is able to retrieve the message
by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to a proxy’s
appointee through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that
Euroclear UK & International Limited does not make available special procedures in CREST for any particular
messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy
Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST
personal member or sponsored member or has appointed a voting service provider(s), to procure that his CREST
sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is
transmitted by means of the CREST system by any particular time. In this connection, CREST members and,
where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of
the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a)
of the Uncertificated Securities Regulations 2001.
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Notice of Annual General Meeting (continued)
All messages relating to the appointment of a proxy or an instruction to a previously appointed proxy, which are
to be transmitted through CREST, must be lodged at 12 noon on 6 December 2023 in respect of the meeting. Any
such messages received before such time will be deemed to have been received at such time. In the case of an
adjournment, all messages must be lodged with Computershare no later than 48 hours before the rescheduled
meeting.
Termination of proxy appointments
8. In order to revoke a proxy instruction you will need to inform the Company. Please send a signed hard copy
notice clearly stating your intention to revoke your proxy appointment to Computershare, Investor Services PLC,
The Pavilions, Bridgwater Road, Bristol, BS99 6ZY.
In the case of a member which is a company, the revocation notice must be executed under its common seal or
otherwise in accordance with section 44 of the Companies Act 2006 or by signature on its behalf by an office or
attorney whose power of attorney or other authority should be included with the revocation notice.
Once a proxy has been lodged, it can be amended up to the meeting. If you attempt to revoke your proxy
appointment but the revocation is received after the time specified in note • above then, subject to the paragraph
directly below, your proxy will remain valid.
Completion of a Form of Proxy will not preclude a member from attending and voting in person. If you have
appointed a proxy and attend the meeting in person, your proxy appointment will be automatically terminated.
If you submit more than one valid proxy appointment in respect of the same Ordinary Shares, the appointment
received last before the latest time for receipt of proxies will take precedence.
Nominated Persons
9. If you are a person who has been nominated under section 146 of the Companies Act 2006 to enjoy information
rights:
• You may have a right under an agreement between you and the member of the Company who has nominated
you to have information rights (Relevant Member) to be appointed or to have someone else appointed as a
proxy for the meeting.
• If you either do not have such a right or if you have such a right but do not wish to exercise it, you may have a
right under an agreement between you and the Relevant Member to give instructions to the Relevant Member
as to the exercise of voting rights.
• Your main point of contact in terms of your investment in the Company remains the Relevant Member (or,
perhaps, your custodian or broker) and you should continue to contact them (and not the Company) regarding
any changes or queries relating to your personal details and your interest in the Company (including any
administrative matters). The only exception to this is where the Company expressly requests a response from
you.
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• If you are not a member of the Company but you have been nominated by a member of the Company to enjoy
information rights, you do not have a right to appoint any proxies under the procedures set out in the notes to
the form of proxy.
Questions at the meeting
10. Under section 319A of the Companies Act 2006, the Company must answer any question you ask relating to the
business being dealt with at the meeting unless:
• answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of
confidential information;
• the answer has already been given on a website in the form of an answer to a question; or
• it is undesirable in the interests of the Company or the good order of the meeting that the question be answered.
Issued Shares and total voting rights
11. As at the date of this Notice, the total number of shares in issue is 118,514,947 Ordinary Shares of 1p each and no
shares are held in treasury. The total number of Ordinary Shares with voting rights is 118,514,947. On a vote by
a show of hands, every holder of Ordinary Shares who (being an individual) is present by a person, by proxy or
(being a corporation) is present by a duly authorised representative, not being himself a member, shall have
one vote. On a poll every holder of Ordinary Shares who is present in person or by proxy shall have one vote for
every Ordinary Share held by him.
Communication
12. Except as provided above, members who have general queries about the meeting should use the following
means of communication (no other methods of communication will be accepted):
• Calls to the Computershare shareholder helpline on 0370 703 6077 cost no more than a national rate from any
type of phone or provider. If in doubt you should check with your phone line provider as to the exact cost involved
for you to call this number. Lines are open 8.30am to 5.30pm, Monday to Friday excluding bank holidays; or
• in writing to Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol, BS99 6ZZ.
You may not use any electronic address provided either in this notice of meeting or in any related documents
(including the Form of Proxy for this meeting) to communicate with the Company for any purposes other than
those expressly stated.
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I/We
of
(BLOCK CAPITALS PLEASE)
being (a) member(s) of Ashoka India Equity Investment Trust plc appoint the Chairman of the meeting,
or (see note 1) of
as my/our proxy and, on a poll, to vote for me/us on my/our behalf at the Annual General Meeting of the Company
Please indicate with an ‘X’ in the spaces provided how you wish your votes to be cast on the resolutions specified.
Resolution For Against Withheld Discretionary
1. To receive and adopt the Company’s Annual Report and
Accounts.
2. To approve the Directors’ Remuneration Report.
3. To re-elect Andrew Watkins as a Director of the Company.
4. To re-elect Dr Jerome Booth as a Director of the Company.
5. To re-elect Rita Dhut as a Director of the Company.
6. To re-elect Jamie Skinner as a Director of the Company.
7. To re-appoint Ernst & Young LLP as Auditor to the Company.
8. To authorise the Directors to fix the remuneration of the
Auditor.
9. To approve the Dividend Policy included in the Annual
Report for the year ended 30 June 2023.
10. To give authority to allot new shares.
11. To give authority to allot new shares in connection with any
performance fee payable.
12. To give authority to allot new shares free from pre-emption
rights.
13. To give authority to allow new shares free from pre-emption
rights in connection with any performance fees payable.
14. To give authority for the Company to purchase its own
shares.
15. To authorise calling general meetings (other than Annual
General Meetings) on 14 clear days’ notice.
Subject to any voting instructions so given the proxy will vote, or may abstain from voting, on any resolution as he
may think fit.
Signature
Dated this day of 2023
Form of proxy
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PARK COMMUNICATIONS 50324
ASHOKA INDIA EQUITY INVESTMENT TRUST PLC ANNUAL REPORT AND AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023