India Capital Growth Fund Limited
Annual report and audited financial statements
For the year ended 31 December 2024
1
Contents
Highlights
2
Chair’s statement
3-4
Strategic Report
Introductory section
5-6
Investment Manager’s review
7-13
Key Performance Indicators
14-15
Portfolio statement
16-18
Environmental, Social and Governance Statement
19-25
Risk Management
26-30
Governance Reports
Directors’ information
31-32
Directors’ report
33-40
Statement of Directors’ responsibilities
41
Directors’ remuneration policy
42
Corporate Governance
43-44
Audit & Risk Committee Report
45-48
Independent Auditor’s report
49-58
Financial Statements
Audited statement of comprehensive income
59
Audited statement of financial position
60
Audited statement of changes in equity
61
Audited statement of cash flows
62
Notes to the audited financial statements
63-78
Other Information
Alternative Performance Measures
79
Management and administration
80
2
Financial highlights for the year ended 31 December 2024
16.0%
Net Asset Value per share total return of 16.0% (2023: 28.6%)
The Net Asset Value (NAV) per share total return for the year was 16.0%
(2023: 28.6%). This is in comparison to the Notional Benchmark BSE
Midcap Total Return Index which returned 25.6% (2023: 38.4%).
The NAV per share total return is the theoretical return to shareholders calculated on a
per share basis based upon the increase or decrease in the NAV over the relevant year.
The BSE Midcap Total Return Index (Index) return is based upon the increase or
decrease in the published Index converted to GBP over the relevant year.
11.3%
Shareholder total return of 11.3% (2023: 34.1%)
The shareholder total return for the year was 11.3% (2023: 34.1%). The
share price as at 31 December 2024 was 192.5p (2023: 173.0p).
The shareholder total return is the theoretical return to shareholders calculated on a
per share basis based upon the increase or decrease in the share price over the
relevant year.
7.9%
Shares ended the year at a discount of 7.9% (2023: 3.9%)
The shares traded at an average discount to NAV of 7.7% (2023: 7.5%)
over the year.
The discount is shown as a percentage to NAV and is calculated based upon the
difference between the Company’s NAV and share price. The average discount is
based upon the published month end discount for the twelve months of the year.
Highlights
Chair’s statement
3
I am delighted to report that 2024 was a strong year for your Company. The Company’s share price rose
by 11.3%, while the underlying Net Asset Value (NAV) per share increased by 16.0%. During the year, the
key event was the General Election, which took place between April and June 2024, and was won by Prime
Minister Modi’s BJP Party, albeit without the overwhelming majority that had been predicted. Nonetheless,
the BJP’s reform agenda remains in place, with an emphasis on infrastructure spending, increased
government efficiency, and the “Make in India” focus on boosting domestic manufacturing. As a
consequence, economic growth has remained strong, particularly compared to other major economies
around the globe.
PERFORMANCE
While overall performance was positive, your Company did underperform its notional benchmark index, the
BSE Midcap Total Return Index, with the first half of the year being a particularly challenging period.
Shareholders will be familiar with the focus of the Company’s portfolio on high quality companies, which are
intended to be held for multiple years. With this in mind, it should be noted that we do not expect the
Manager to always outperform the BSE Midcap index, particularly in periods when a focus on quality is not
rewarded, however the Board remains confident that the Manager’s approach will continue to win out over
the long term. Gaurav Narain’s commentary in the Investment Review highlights some of the contributors
to, and detractors from, performance along with the key themes supporting the Company’s holdings and
explains why the Company did not own some of the best performing stocks in the market.
DISCOUNT AND REDEMPTION FACILITY
As shareholders will no doubt be aware, the Company’s second Redemption Facility took place on 31
December 2023. In total 15.16 million shares were redeemed representing 15.1% of the Company’s market
capitalisation at that time. As I noted in my statement last year, the redemption led to a transformation of
the shareholder register which is now predominantly made up of retail shareholders who own shares either
directly or via platforms.
For a period after redemption this allowed your Company’s shares to trade more closely to their NAV and,
in January, February and March 2024, the Company issued 5.83m shares from Treasury at a premium to
NAV of at least 0.5%. However, after negative comments from the Chair of SEBI, the Indian financial
regulator, hit the mid and small cap sectors, confidence suffered and your Company’s shares moved from
a premium to NAV to a discount. Consequently, the Company repurchased some 1.6 million shares from
March through to the end of the year at discounts between 4.1% and 14.8%.
Since the year end, your Company has continued to repurchase shares when appropriate. In the year to
date, 345,000 shares have been repurchased at a discount to NAV of between 9.7% and 11.1%.
Shareholders should bear in the mind that the third Redemption Facility takes place on the last working day
of November 2025, subject to shareholder approval at the Company’s AGM on 5 June 2025. Previous
Redemption Facilities have taken place every two years on the last working day of December. Further
details will be given in July 2025.
INVESTOR RELATIONS
The Board of your Company is very keen to ensure that existing and prospective shareholders have access
to the information that they need about the Company. Throughout 2024, Gaurav and the investor relations
team from Ocean Dial/River Global PLC have visited a wide range of professional and retail investors across
the UK to update investors on the Indian economy, general election results, and the performance of the
investment portfolio.
Chair’s statement (continued)
4
INVESTOR RELATIONS (CONTINUED)
Gaurav was on the platform at the well-attended AIC Investor Showcase event, where he and other India
fund managers debated the prospects for the Indian stock market.
The Company has participated in webinars, accessible to all shareholders, either hosted internally or via
external providers. I encourage shareholders who have not yet taken advantage of these webinars to sign
up for updates on the India Capital Growth Fund website www.indiacapitalgrowth.com .
We understand that individual shareholders would like the opportunity to see Gaurav in person. I am
pleased to announce that our Annual General Meeting will take place in London on 5 June this year. Further
details will be announced in the AGM Circular and Notice of Meeting as well as on the India Capital Growth
Fund website in due course.
ENVIRONMENT, SOCIAL AND GOVERNANCE (ESG)
Along with colleagues at River Global PLC, the investment team has continued to refine its ESG
methodology. This forms an integral part of the Investment Manager’s investment process, which, as
shareholders will be aware, is focussed on the long term, with low turnover, and with sound corporate
governance and extensive engagement with company management at the heart of investment decisions.
We hope that the section of this annual financial report covering the Investment Manager’s approach to
ESG gives shareholders a good insight into how the Company’s portfolio benefits from this emphasis, and
how India has taken significant steps to improve its ESG reporting.
CORPORATE GOVERNANCE
The Company is a member of the Association of Investment Companies (AIC) and seeks to follow best
practice regarding appropriate disclosures and governance. The governance principles that the Board has
adopted are designed to ensure that the Company delivers long term value to its shareholders and that it
treats all shareholders equally. All shareholders are encouraged to have an open dialogue with the Board
throughout the year, and the Board can be contacted via the Company’s website or the Company Secretary.
There have been no changes to the composition of the Board during the year.
OUTLOOK
The first few months of 2025 have seen considerable turbulence in India’s equity markets, with small and
mid cap stocks taking the greatest hit. All eyes, of course, are on the United States and on the prospect of
trade tariffs, which are likely to affect Indian exporters. However, we have already seen Prime Minister
Modi make the trek to Washington with a pre-emptive lowering of tariffs on US goods and a promise to
boost bilateral trade, investment and security relationships.
While we may see this turbulence continue for a while, the underlying story of strong GDP growth, bolstered
by the effects of Modi’s infrastructure spending and the continued diversification of global manufacturing
away from China, and consumer demand from a growing middle class should mean that Indian companies
can grow both revenues and profitability over time. While Indian equities have looked expensive relative to
other emerging markets, earnings growth should provide further impetus in the medium term. The Looking
Forward section of the Investment Manager’s review provides further details of our outlook for the Indian
economy and its impact on the investment portfolio.
Thank you for your support for the Company. The Board is confident that the Investment Manager’s strategy
of investing in high quality companies with reputable management teams continues to be relevant and will
provide good returns to shareholders over time.
Strategic Report
Introductory Section
5
Introduction and Cautionary Statement
This strategic report sets out the Company’s long-term performance, business model, strategy, and risk
management information. The report includes the following subsections:
• Investment Manager’s review
• Key Performance Indicators
• Portfolio Statement
• Environmental, Social and Governance Statement
• Risk Management report
This strategic report has been prepared solely to provide information to shareholders to assess how the
Directors have performed their duty to promote the success of the company. The strategic report contains
certain forward-looking statements. These statements are made by the directors in good faith based on the
information available to them up to the time of their approval of this report and such statements should be
treated with caution due to the inherent uncertainties, including both economic and business risk factors,
underlying any such forward-looking information.
This strategic report, which incorporates the information required in the non-financial and sustainability
information statement and the section 172(1) statement, has been prepared for the Group as a whole and
therefore gives greater emphasis to those matters which are significant to the Company and its subsidiary
undertaking when viewed as a whole.
Long-term sustainable success
The long-term performance of the Company and its reputation for transparency and good governance are
paramount to its long-term success for the benefit of all its stakeholders.
In order to ensure good governance of the Company, the Board has set various limits on the investments
in the portfolio, whether in the maximum size of individual holdings, the total aggregate percentage of
unlisted investments in the portfolio, the use of derivatives, the level of gearing and others. These limits and
guidelines are regularly monitored.
The integration of ESG factors in investment decision making will also help to improve the Company’s long-
term risk adjusted returns and thus its long-term sustainable success. ESG measurement and risk impact
scoring have become an integral part of the investment manager’s investment process facilitated by the
ongoing development of their bespoke internal ESG scoring model which compares and rates each
company within the investment portfolio. An illustration of this scoring model is provided in the ESG report
which highlights the focus on the long-term direction of travel in reducing the climate impact factors of
companies in the portfolio.
The Company’s mandate is to invest in India, predominantly in listed mid cap and small cap companies
where the Investment Manager believes significant long-term investment performance can be achieved.
The Board considers this is best achieved via the investment trust structure constructing a portfolio of
individually chosen shares in underlying companies. Consequently, our Investment Manager, advisers and
analysts do considerable research in house to identify suitable investments. The Board works with the
Investment Manager to ensure it has the necessary resources available and that those resources are of the
desired quality.
It is one of the Board’s long-term objectives that the share price should trade at a level close to the
underlying NAV of the shares. Share price discounts and premiums are determined by supply and demand.
Strategic Report
Introductory Section (continued)
6
Long-term sustainable success (continued)
The Directors have focused the marketing of the Company particularly on explaining, through the press, the
characteristics of investing in India, largely to dispel sentiment-based negative misperceptions and to inform
the investing community of its long-term potential for significant sustainable growth in India. As detailed
more fully in the Sustainability and ESG report on pages 19 to 25 the Company and its Investment Manager
believe that companies with strong management focus on ESG have the potential to reduce risks facing
their business, thereby delivering sustainable performance and enhanced returns over the longer term.
Longer-term viability statement
The Directors have assessed the prospects of the Company for a period of three years. The Board believes
this time period is appropriate having consideration for the Company’s:
• long-term capital appreciation investment strategy;
• portfolio of liquid listed equity investments and cash balances;
• level of operating expenses, both fixed and variable;
• principal risks and uncertainties; and
• the Redemption Facility available to shareholders every two years.
In making this assessment, the Directors have considered the possible impact of the Redemption Facility
which will take place on the last working day of November 2025, subject to shareholder approval at the
Company’s AGM on 5 June 2025. Whilst redemption requests at the next Redemption Facility could impact
the Company’s longer-term viability the Board has considered the performance of the Company to date,
that over 80% of the current shareholder register comprises of individual retail investors, and that at the
Second Redemption Point in 2023, almost all of the 15.7% of shares redeemed at that time were owned by
institutional shareholders and that the Directors believe the Company has substantial headroom over the
aggregate NAV level at which the Company may no longer be financially viable.
In making this assessment as to the Company’s longer-term viability, the Directors have considered detailed
information provided at Board meetings that include the Company’s balance sheet, investment portfolio
liquidity, operating expenses, market capitalisation, share price discount, shareholder register analysis and
investment performance to date, both actual and against the BSE Mid Cap Total Return Index (the “Index”)
and the Company’s peers.
Section 172 of the Companies Act 2006
Section 172 of the Companies Act 2006 applies directly to UK domiciled companies. Nonetheless, the
intention of the AIC Code is that the matters set out in section 172 are reported on by all companies,
irrespective of domicile, provided this does not conflict with local company law. Under section 172, directors
have a duty to promote the success of their company for the benefit of its members as a whole, whilst having
regard to (amongst others) the likely consequences of their decisions in the long-term and the interests of
the company’s wider stakeholders.
Details of how the Board engages with all shareholders and stakeholders and why they are important can
be found under “Shareholder communication” in the Directors’ report on page 39.
In making decisions, the objective of the Board is always to ensure the long-term sustainable success of
the Company and, therefore, the likely long-term consequences of any decision are a key consideration. In
relation to the decisions taken by the Board during the year under review, the Board acted in good faith,
and in a way that would most likely promote the Company’s long-term sustainable success and achieve its
wider objectives for the benefit of the shareholders as a whole, having had regard to the wider stakeholders
and the other matters set out in section 172.
Strategic Report
Investment Manager’s review
7
ECONOMY
India’s multi-decade growth trajectory was undimmed in 2024, supported by government spending, growing
consumption, and burgeoning manufacturing. Economic growth has been reflected in India’s vibrant and
fast-growing corporate sector, which continued to expand and diversify over the year. This, in turn, has
supported stock markets, which delivered another strong year of returns.
India’s recent run of strength has its origins in the reforms enacted by Prime Minister Narendra Modi’s first
government in 2014-19. The government took a slew of tough decisions, including currency reform and tax
harmonisation. This put in place the foundations for the rapid growth that India has experienced in recent
years. It has helped shore up government finances, which has allowed for significant growth in capital
spending, particularly on infrastructure.
The government has also sought to boost domestic manufacturing through the Production Linked Incentives
(PLI) scheme, which provide tax breaks and financial support for companies who want to set up
manufacturing in India. This has helped India challenge China’s manufacturing dominance and brought new
companies to the country in areas such as consumer electronics and mobile phones.
This has led to near-uninterrupted growth for the Indian economy over the past decade
1
. India remains in
the middle of a virtuous cycle of growth, with a potentially lengthy pathway ahead. Nominal GDP per capita
for India is just $2,375
2
, compared to $12,604 for China. Modi continues to pursue an ambitious reform
agenda, incorporating infrastructure building and financial market liberalisation.
That said, there have been bumps along the way. The general election, held between April and June, did
not deliver the resounding victory for Modi that had been expected. Although Modi secured a third term, his
Bharatiya Janata Party (BJP) was forced into a coalition having failed to achieve the 272 seats necessary
for a parliamentary majority.
The government’s reliance on coalition partners, including the southern Telugu Desam Party (TDP) and the
eastern Janata Dal (United) (JD (U)), is unlikely to result in substantial changes to the government’s
domestic political programme. The states represented by these two parties may want more in terms of
capital commitments, but the government’s broader economic agenda should remain intact.
More troubling was the recent GDP growth figure, which showed expansion of just 5.4% year on year for
the July to September period. This was notably weaker than expected
3
and some way below the Reserve
Bank of India’s projection of 6.8%. It has subsequently adjusted its forecast from 7% to 6.6% in 2025.
The weakness is at least partially attributable to the election. The Electoral Commission does not allow any
announcements in the run-up to an election, and government decision-making slows as the administrative
machinery is re-directed towards election preparation. Capital spending slowed as a result, but is likely to
return to more normal patterns in the quarter ahead.
1
https://tradingeconomics.com/india/gdp-growth-annual
2
https://www.worldometers.info/gdp/gdp-per-capita/
3
https://www2.deloitte.com/us/en/insights/economy/asia-pacific/india-economic-outlook.html#endnote-1
Strategic Report
Investment Manager’s review (continued)
8
ECONOMY (CONTINUED)
A bigger concern has been weakening consumption. Plenty of explanations have been offered, but the
causes remain opaque. Higher food inflation is likely to have played a part. More recently, rural consumption
has revived, but urban consumption remains weak. It is possible that the spending mix has changed and
spending data is not picking up a shift to higher end goods and services. Certainly, demand for premium
products remains strong. Ultimately, we believe the caution is likely to be short-lived. Consumers still have
the capacity to spend, with savings levels robust.
It is important not to over-state this recent slowdown. India’s growth path is not about to be derailed – it is
simply a question of degree. The government’s balance sheet remains healthy, with the fiscal deficit
declining and significant Foreign Exchange reserves. This gives it the firepower to support the economy
and sustain spending on infrastructure development. The currency has been stable despite a volatile global
environment, while tax revenues have held up. It has been another strong year for the Indian economy.
Growth themes in India
Domestic capex – India is in the midst of an infrastructure revolution. In the recent budget, the government
allocated US$133.86 billion to infrastructure spending, equivalent to 3.4 % of GDP
4
. This spending is multi-
faceted and includes airports, roads and railways, alongside digital infrastructure. The country is adding
another 15 airports by 2028. Over 20 cities are building metro systems. There are also significant plans for
renewable energy, with an expansion of electricity capacity across transmission and distribution networks.
Digitalisation – India has been a poster child for digital transformation. Its digital identification scheme,
Aadhaar, assigns a 12-digit biometric number to each citizen, has helped improve access to public services
and financial inclusion. India’s internet penetration is now 52.4%
5
, up from 14% in 2014. Its 700m active
internet user base is the second largest cohort in the world.
Consumption – As India becomes wealthier, consumption continues to boom. Household spending has
doubled in a decade
6
and India may account for 16% of worldwide consumption by 2050
7
. This would rival
the US’s 17% share. The country’s demographic dividend, with 65% of its population below the age of 35
8
is likely to be an important factor. This strength may be accelerated by a robust real estate sector. 2024 saw
the highest ever real estate sales and the peak may still be two or three years ahead. This is likely to have
a wealth effect and sustain consumption levels.
China plus one – There have been a range of beneficiaries from the global trend to move and diversify
supply chains away from China, but India is one of the few countries with the size and scale to capitalise in
full. The government has put Production Linked Incentives (PLIs) in place to encourage international
companies to manufacture in India across sectors such as pharmaceuticals, IT hardware, solar PV modules,
drones and food processing, plus semiconductors and batteries. This is already bearing fruit in areas such
as electronics. From a net importer, India has emerged as a net exporter of mobile handsets, for example.
Smartphones are now the fourth largest export from India
9
.
4
https://www.ibef.org/industry/infrastructure-sector-india
5
https://www.statista.com/statistics/792074/india-internet-penetration-rate/
6
https://www.statista.com/statistics/1304417/india-annual-household-consumption-expenditure/
7
https://www.business-standard.com/economy/news/india-may-account-for-16-of-global-consumption-by-
2050-world-data-lab-125012001202_1.html
8
https://www.spglobal.com/en/research-insights/special-reports/look-forward/india-s-demographic-
dividend-the-key-to-unlocking-its-global-ambitions
9
https://www.livemint.com/economy/smartphones-fourth-largest-export-item-from-india-up-42-percent-to-
15-6-billion-in-fy24-apple-samsung-wistron-pegatron-11716436491522.html
Strategic Report
Investment Manager’s review (continued)
9
STOCK MARKETS
The strength of the economy has translated into strength for the corporate sector. Aggregate earnings
growth for the India corporate sector has exceeded 20% per annum for the last four years. This has
supported a buoyant period for Indian stock markets. The MSCI India index rose 15.7% over the year
10
,
having delivered an annualised return of 17.3% over the past five years. That puts it significantly ahead of
the MSCI World of 11.7% over the same period
11
.
In 2024, the small and mid cap sectors outpaced the broader market. This was justified by strong earnings
growth among this part of the market and saw the MSCI India Small Cap index rise 23.2% over the year
12
.
There was particular strength among consumer discretionary, digital and real estate companies, with
healthcare and industrial companies also delivering strong returns. The notable weak spots were in
consumer staples, the cement companies, and some of the regional banks.
PERFORMANCE
India Capital Growth Fund is a mid and small cap Indian equities fund. We are long-term investors, and hold
most of our investments for at least three to five years. Our portfolio turnover is low and we are quality
focused. The Fund typically has a concentrated portfolio of around 30-35 stocks. Nevertheless, we have
responded to higher valuation in our part of the market broadening the portfolio and held 36 stocks at the
end of the year.
The Fund did well in absolute terms for its financial year, delivering a GBP NAV return of 16.0%. However,
this was behind its benchmark, the BSE Midcap Total Return Index (GBP), which rose 25.6%. This relative
weakness has had two main causes: the first was strong performance from companies that we didn’t hold.
The quality and valuation focus of the Fund steers us away from expensive or speculative businesses, and
also from some public-sector focused companies, where shareholder interests may not be fully aligned with
those of the Company’s other stakeholders.
In 2024, a number of those public sector companies performed very well, and we missed out on those gains.
Many of these were in the energy and utilities sector where we had no exposure. Constant interference from
the government through imposition of duties or fixing pricing makes it difficult to take a long-term investment
decision on companies in these sectors. We also did not hold any company in the real estate sector, which
also performed well over the year, denting our relative returns. This was because we found the valuations
expensive, especially since accounting standards do not reflect a true picture of the profit and loss account
and one needs to rely on management estimates on cash flows and sales. There were also a number of
industrial companies that performed well, but they were single sector focused and expensive, and therefore
we did not hold them in the portfolio. Staying away from these areas hit relative performance hard,
particularly in the first half of the year. This started to correct in the second half of the year and we remain
convinced with an approach that excludes areas where we do not have conviction on management quality
or financial metrics, in accordance with our ESG focus.
Banks were the primary detractors over the year, contributing to a 6.77% loss in the portfolio. This was
distributed across holdings in RBL Bank, IndusInd Bank, and IDFC FIRST Bank. The Banking sector
experienced underperformance due to tight liquidity and rising cost of liabilities, which adversely impacted
net interest margins, Some of our bank holdings were particularly affected due to their higher lending
exposure to microfinance and unsecured lending, leading to pockets of stress.
10
https://www.msci.com/documents/10199/1ad792ce-3199-445c-8be3-f2a035ac782d
11
https://www.msci.com/documents/10199/178e6643-6ae6-47b9-82be-e1fc565ededb
12
https://www.msci.com/documents/10199/255599/msci-india-small-cap-index.pdf
Strategic Report
Investment Manager’s review (continued)
10
PERFORMANCE (CONTINUED)
The banks are well capitalized and have adequately provisioned for this economic environment. We believe
the banking sector is best positioned to capitalize on the India growth story. Asset quality is strong, return
ratios are improving and valuations are compelling. Additionally, Uniparts, an auto ancillary company,
contributed to the losses with a 38% decline in 2024, driven by weaker demand in its core markets of the
US and Europe.
The primary sectors contributing to positive performance over the year included our 13.3% allocation in
Consumer Discretionary, 9.1% in Industrials, 6.1% in Healthcare, and 3% in Financial Services, which
includes companies related to capital markets like stock exchanges, asset management companies etc.
Stock selection was the key driver of performance across all these sectors, further supported by our lack of
holdings in the Media sector, which had a benchmark weighting of 0.7%.
Our top-performing stock, Dixon Technology, achieved a gain of 170%. Furthermore, our off-benchmark
positions proved particularly profitable. Skipper, a manufacturer of transmission and telecom towers,
delivered a return of 167%, while Neuland Laboratories, a provider of Active Pharmaceutical Ingredients
(API) and custom research and manufacturing solutions to pharmaceutical companies, achieved a return
of 156%. Additionally, Multi Commodity Exchange of India Ltd. saw an increase of 93%, and our recent
purchase of Cartrade Tech Ltd resulted in a 104% gain, driven by increased advertising revenues from its
platform, by automobile manufacturers and dealers.
THEMES REFLECTED IN PORTFOLIO HOLDINGS
Digitalisation - Affle India Ltd
Digitalisation is in full flow in India. EY says the country’s “deep penetration of telecom and internet,
combined with government’s focus to develop digital infrastructure, have laid the foundation for a digital
economy.”
13
It believes the Digital India Stack is now the global benchmark for most countries and provides
a competitive advantage for growing businesses.
The government launched Digital India in 2015, recognising that the country’s large and disparate
population - with over 60% living in rural areas – makes digitalisation particularly important. Since then,
internet penetration has more than tripled
14
. The adoption of advanced technologies has helped Indian
businesses to become globally competitive and efficient. These technologies include AI, blockchain and
cloud computing.
Digital advertising group Affle has been a direct beneficiary, with spending on digital advertising increasing.
It has built a powerful intelligence based system, and become the leader in targeted advertising. The group
only gets paid if someone completes an action in response to the advertisement – clicks a button, or buys a
product for example. It has mastered the art of consumer engagement, which has seen the group grow very
quickly and become highly profitable.
The group’s consumer platform delivers personalised consumer recommendations and then drives
conversion through relevant mobile ads. The model gets more powerful as more and more data flows
through it, meaning conversion rates improve all the time. The group’s user base is strong, with a focus on
certain key sectors, including entertainment, food delivery and gaming.
13
https://www.ey.com/en_in/insights/india-at-100/digitalizing-india-a-force-to-reckon-with
14
https://www.statista.com/statistics/792074/india-internet-penetration-rate/
Strategic Report
Investment Manager’s review (continued)
11
THEMES REFLECTED IN PORTFOLIO HOLDINGS (CONTINUED)
Digitalisation - Affle India Ltd (continued)
At the moment, Affle derives around three-quarters of its revenues from emerging markets, but it is
expanding its reach into developed markets. To speed this process, the company acquired Jampp and
YouAppi in 2021 and 2023 respectively, which have now been fully integrated. Revenues from developed
markets have grown by more than 30% in the last six months. The group is also focusing on increasing
premium content and incorporating generative AI in its offerings, which will drive further efficiency, leading
to higher margins.
“Make in India” – Dixon Technologies
The Indian government’s PLI scheme is aimed at revitalising domestic manufacturing and mopping up
international companies keen to diversify their supply chains away from China. Unlike past incentive
schemes, which spread resources thinly across multiple companies, the PLI scheme focuses on identifying
and supporting a smaller group of high-potential firms, fostering champions that can achieve scale and
efficiency
15
.
Initially styled as the "Make in India" initiative, the PLI scheme targets 14 sectors considered to be important
sectors for the future of India’s growth. These include electronics, pharmaceuticals, automotive
components, and renewable energy. Companies are incentivised based on incremental production, and
payouts may be as high as 6% of revenue over a five-to-seven-year period. Qualifying companies may be
domestic or international.
Dixon Technologies has been one of the key beneficiaries of the scheme. It is India’s largest Electronics
Manufacturing Services (EMS) provider, based in Noida. It makes a range of consumer goods, such as
televisions, washing machines, LED bulbs and CCTV security systems for large global companies including
Samsung, Panasonic and Philips.
One of its most exciting areas of growth is in mobile manufacturing. It has harnessed the PLI scheme
focused on mobile manufacturing and become the market leader. It manufactures for almost all the Android
based mobile phone group, and it also has four out of five of the top IT hardware companies as its clients
under the respective PLI schemes.
This has seen it grow rapidly. In its recent results presentation, the CFO suggested the Company could
deliver a 50% CAGR in the next financial year, saying they could make almost 30 million Smart Phones. It
has also announced plans to expand into the semiconductor manufacturing markets. It has also recently
announced a joint venture with HKC (China) for glass & display manufacturing for use in mobile phones
and IT hardware. The Company now has 17 manufacturing units in India with over 15,000 employees. Its
share price growth has been strong – up 163% over the past year
16
. We have taken some profits, but it is
still a holding in the Company.
15
https://www.indiacapitalgrowth.com/wp-content/uploads/2024/12/Make-in-India-PLI.pdf
Strategic Report
Investment Manager’s review (continued)
12
THEMES REFLECTED IN PORTFOLIO HOLDINGS (CONTINUED)
Infrastructure – Skipper
An important part of India’s infrastructure revolution has been the growth in renewable energy.
India’s installed non-fossil fuel capacity has increased 396% in the last 8.5 years
17
and the Government has
ambitions to go further and faster, targeting 500 GW of non-fossil fuel-based energy by 2030. Indian
electricity demand is expected to grow by over 6% in 2025.
The rapid growth of renewable energy sources, particularly solar PV and wind, requires significant grid
expansion and modernisation to integrate these variable resources effectively. The Government is
increasingly focused on upgrading ageing infrastructure, implementing smart grid technologies and
digitalising grid operations to improve efficiency, reliability and flexibility.
Skipper is among the largest manufacturers of power transmission towers in the world and is a key
beneficiary of this long-term trend. Skipper also has the advantage of being the only company with backward
integration of rolling mills, tower pole fasteners’ production and EPC capabilities.
The domestic Indian market remains the most exciting area. There is a significant pipeline building up
locally, and demand is high. The company has full order books for the next three years and considerable
pricing power. However, the company is also gaining market share internationally, particularly in the US
and Australia. Around half of Skipper’s power transmission segment order book now comes from exports
and the company has been a beneficiary of the trend to diversify supply chains out of China.
Consumer – Emami
Consumer spending has always been at the heart of the India Capital Growth fund. As an economy grows
and incomes increase, much of that wealth will find its way into the consumer economy. India not only has
growth on its side, but a significant demographic dividend, with a median age of just 28. Household incomes
have increased rapidly – from $1,400 in 2013, to $2,300 in 2024
18
. Household spending has doubled in a
decade
19
.
A range of consumer groups are benefiting from this trend. One of our longer-term holdings is Emami, a
leading Fast Moving Consumer Goods (FMCG) player in India with a presence in the health, beauty, and
personal care space. It has established strong barriers to entry by creating niche product categories and
dominating them.
For example, it has a strong presence in ayurvedic products. Ayurveda is a holistic system of medicine that
began in India more than 3,000 years ago, focusing on natural ingredients. Emami makes a range of beauty
products, with brands such as Kesh King, and Fair and Handsome.
More recently, Emami has taken several measures to accelerate growth. It has strengthened its core
management team, expanded its distribution reach and made strategic investments in direct-to-consumer
brands, including ‘The Man Company’ from its acquisition of Helios Lifestyle in September last year
20
. It has
also launched a range of new products in the fast-growing health and wellness segment.
17
https://www.investindia.gov.in/sector/renewable-energy
18
https://tradingeconomics.com/india/gdp-per-capita
19
https://www.statista.com/statistics/1304417/india-annual-household-consumption-expenditure/
20
https://www.emamiltd.in/wp-content/uploads/2024/09/02174352/news-010924.pdf
Strategic Report
Investment Manager’s review (continued)
13
THEMES REFLECTED IN PORTFOLIO HOLDINGS (CONTINUED)
Consumer – Emami (continued)
The company is the market leader in its field, generating high gross margins and operating margins. It used
a period of weakness during Covid to build out a strong digital platform, which allows it to engage directly
with its consumer base. It has worked hard to maintain its efficiency and high returns on capital. Emami’s
shares have had a difficult run since August 2024, but we continue to hold them.
LOOKING FORWARD
India is likely to remain one of the fastest growing economies in the world over the next decade. GDP growth
forecasts range from 6-7% p.a., stretching out over a decade. The government has a clear roadmap for
continued growth, and with GDP per capita still low relative to global peers, there is a lengthy runway for
expansion.
This creates a benign backdrop for continued earnings growth in corporate India. There are a range of
companies in India with large addressable markets and long-term pipelines for growth, across sectors as
diverse as technology, renewable energy, consumer spending and manufacturing.
The stock market also has structural factors in its favour. It has a large, captive domestic investor base, with
Indians swapping their preference for physical assets such as real estate and gold, for financial assets and
the stock market in particular. The widespread use of Systematic Investment Plans has directed capital into
mutual funds. Under these plans, people might invest $25-35 a month. In just five years, flows into Indian
equities from this source have increased from $1bn to $2.5bn per month. These flows have proved more
stable than foreign flows and have lowered volatility. It also means the Indian market is less connected to
the ebb and flow of international risk sentiment.
India has become a vibrant and diverse market. A buoyant IPO market has given investors in India a rich
opportunity set. Recent IPOs have included car companies, Fintech groups, and digital technology leaders.
Equally, there are some elements that could create volatility in the year ahead. Donald Trump continues to
prove an unpredictable force and his tariff regime could hurt Indian exporters. That said, India tends to enjoy
good relations with the US and could be a beneficiary of any trade war with China.
However, while this may influence whether GDP growth is 6% or 7% p.a., it is not a threat to the long-term
sustainability of India’s growth, where there is plenty of visibility. These have been three very strong years
in Indian financial markets. This might suggest a year of consolidation. However, the growth story for India
remains undiminished. Any pullback in the market represents an opportunity to participate in India’s
astonishing long-term growth story.
Strategic Report
Key Performance Indicators (KPIs)
14
Total return performance
1 Year %
3 Year %
5 Year %
Since 31 Dec
2011* %
NAV per Share
16.0
55.1
136.2
513.4
NAV per share is used to measure
the performance of the Manager,
after accounting for Indian CGT
provisions and INR/GBP FX rates.
Notional
Benchmark: BSE
Midcap Total
Return Index
25.6
79.5
185.5
710.2
The notional benchmark is used as
an indicator of market performance
of mid-cap companies listed in
India.
Share Price
11.3
60.8
171.1
470.4
This is used to measure the total
return to shareholders.
Source: Ocean Dial Asset Management Limited
Foreign exchange rates: Indian Rupee vs Great British Pound
2024
2023
2022
INR vs GBP FX rate
107.5
106.1
99.7
This is the rate at which the
Company converts its INR Indian
net assets into GBP in calculating
the NAV. It is an indicator of the
impact on the NAV resulting from
the INR/GBP foreign exchange rate.
Average INR vs GBP FX rate
during the year
107.1
103.0
97.1
Source: Ocean Dial Asset Management Limited
Share price premium/(discount) to NAV per share as at 31 December
2024
%
2023
%
2022
%
Premium/(discount)
(7.9)
(3.9)
(7.9)
This is the difference between the
share price and the NAV per share.
It is an indicator of demand for the
Company’s shares.
Average premium/(discount)
to NAV during the year
(7.7)
(7.5)
(12.9)
Source: Ocean Dial Asset Management Limited
Ongoing charges as at 31 December
2024 %
2023
%
2022
%
Ongoing charges
1.58
1.57
1.59
This shows the cost of running the
Company. It measures the ongoing
operating costs as a percentage of
average net assets for the year.
Source: Ocean Dial Asset Management Limited
Strategic Report
Key Performance Indicators (KPIs) (continued)
15
Shareholder Capital Returns
Source: Ocean Dial Asset Management Limited
Redemption Facility Date
No of shares
Value £’000
December 2021
15,608,872
19,708
The Company operates a shareholder
approved Redemption Facility whereby
shareholders can redeem their shares every
two years based upon a minimum discount
to NAV
December 2023
15,159,876
26,197
Strategic Report
Portfolio statement
16
As at 31 December 2024
HOLDING
Market cap
size
Nominal
Value
£000
% of
company
NAV
LISTED SECURITIES
Auto & Auto Ancillary
Balkrishna Industries
M
148,000
4,008
2.1%
Ramkrishna Forgings
S
844,794
7,027
3.7%
Sona BLW Precision Forgings
M
972,714
5,384
2.8%
Uniparts India
S
562,237
2,167
1.1%
18,586
9.7%
Cement
JK Lakshmi Cement
S
623,000
4,847
2.6%
Sagar Cements
S
1,611,000
3,342
1.8%
8,189
4.4%
Chemicals
Aether Industries
S
417,124
3,443
1.8%
PI Industries
M
165,000
5,659
3.0%
9,102
4.8%
Consumer Discretionary
Bajaj Electricals
S
348,734
2,491
1.3%
Dixon Technologies
L
58,600
9,781
5.1%
Kajaria Ceramics
M
347,698
3,750
2.0%
Vedant Fashions
M
241,638
2,900
1.5%
VIP Industries
S
1,138,853
5,088
2.7%
24,010
12.6%
Consumer Staples
CCL Products India
S
727,883
5,027
2.6%
Emami
M
1,194,764
6,679
3.5%
Essel Propack
S
1,310,099
3,164
1.7%
Jyothy Laboratories
S
742,000
2,742
1.5%
17,612
9.3%
Digital
Affle India
M
390,000
6,472
3.4%
Cartrade Technologies
S
268,671
3,714
1.9%
10,186
5.3%
Financial Banks
City Union Bank
S
2,845,000
4,562
2.4%
IDFC Bank
M
9,167,000
5,386
2.8%
Strategic Report
Portfolio statement (continued)
17
As at 31 December 2024 (continued)
Financial Banks
Indusind Bank
L
416,000
3,717
1.9%
RBL Bank
S
3,300,000
4,852
2.5%
Federal Bank
M
5,662,000
10,538
5.5%
29,055
15.1%
HOLDING
Market cap
size
Nominal
Value
£000
% of
company
NAV
LISTED SECURITIES
Financial NBFC
Cholamandalam Investment
and Finance Company
L
175,000
1,931
1.0%
1,931
1.0%
Financial Services
Multi Commodity Exchange
M
128,000
7,425
3.9%
Persistent Systems
L
139,536
8,385
4.4%
15,810
8.3%
Healthcare
GPT Healthcare
S
2,200,000
3,765
2.0%
Neuland Laboratories
M
71,175
9,089
4.8%
12,854
6.8%
Industrials
Container Corporation of India
M
370,000
2,713
1.4%
Elecon Engineering
S
460,000
2,716
1.4%
PSP Projects
S
703,574
4,250
2.2%
Skipper
S
2,087,013
10,545
5.5%
Triveni Turbine
M
576,113
3,974
2.1%
24,198
12.6%
Textiles
Gokaldas Exports
S
465,826
4,908
2.6%
Welspun India
S
3,050,000
4,450
2.3%
9,358
4.9%
Total equity investments (including those held by ICG Q Limited)
180,891
94.8%
Strategic Report
Portfolio statement (continued)
18
Equity investments may be held by the Company and its Mauritian subsidiary, ICG Q Limited.
As at 31 December 2024 (continued)
Cash less other net current liabilities
9,836
5.2%
Total Net Assets (before deferred taxation for Indian CGT)
190,727
100.0%
Deferred tax provision for Indian CGT
(11,370)
Total Net Assets (after deferred tax provision for India CGT)
179,357
Notes:
L: Large cap – companies with a market capitalisation above US$8bn
12.4%
M: Mid cap – companies with a market capitalisation between US$2bn and US$8bn
38.8%
S: Small cap – companies with a market capitalisation below US$2bn
43.6%
94.8%
Strategic Report
Environmental, Social and Governance Statement
19
The Board recognises its responsibilities for reporting on ESG and regularly engages with the Investment
Manager, upon whom the Board is reliant to deliver this ESG reporting of the Company and to implement its
ESG strategy. In this regard the Board attended a presentation by the Investment Manager on the
implementation of its ESG policy and how it has developed a bespoke ESG scoring model to monitor and
report upon ESG factors of the investment portfolio. The Board is informed of the progress of this reporting at
least annually when it prepares the ESG Report for the Annual Report. The Board also visits India with the
Investment Manager during which they attend meetings with investee companies to hear first-hand on how
these companies are implementing ESG factors into their business processes and reporting in India.
The Company reports in line with the Listing Rules and is a Guernsey structure and therefore is not required
to comply with the Task Force on Climate-related Financial Disclosures (TCFD). However, the Board is
mindful of TCFD disclosure guidance and in particular the core content of Governance, Strategy, Risk
Management and Metrics & Targets when reporting on ESG matters. The Company entity itself is an
investment company with no employees so has limited climate related risk, nonetheless the Board is mindful
of the climate related impact of air travel to Board Meetings and therefore only travels in accordance with
required regulations.
In setting and reporting on our ESG policies, we have considered the impacts of our activities and followed
the relevant regulatory guidance including the requirements of section 172(1) of the Companies Act 2006 and,
in so far as they apply, the non-financial reporting requirements in sections 414CA and 414CB of the
Companies Act 2006. Although India Capital Growth Fund does not fall within the scope of these two sections,
we believe that these disclosures will provide shareholders and stakeholders with a greater level of insight
and transparency. We have also reported under the UK Corporate Governance Code (“UK Code”).
The Board believes in engagement and long-term ownership both in respect of our own shareholders and the
investment approach adopted by our Investment Manager, to drive investment performance and to contribute
to positive change to build a sustainable future. We and our Investment Manager believe that companies with
strong management and a focus on ESG have the potential to reduce risks facing their business, thereby
delivering sustainable performance and enhanced returns over the longer-term.
Investment management approach to sustainability & ESG
The management of sustainability risks forms an important part of the investment portfolio due diligence
process implemented by the Investment Manager. When assessing the sustainability risks associated with
underlying investments, the Investment Manager is assessing the risk that the value of such underlying
investments could be materially negatively impacted by an environmental, social or governance event or
condition. Sustainability risks are incorporated into the Investment Manager’s evaluation of an issuer’s
investment risk or return, across all the Company’s investments.
The Investment Manager has made ESG matters an integral part of its due diligence process over the last
three years. The Board and the Investment Manager believe that sound governance is an essential element
of a company’s long-term sustainability and growth, and that detailed analysis beyond financial data is required
to understand the true characteristics of a potential underlying investment. This includes, but is not limited to,
conviction in the alignment of interest between the owners, managers and minority shareholders of a business,
the nature and extent of the true independence of the Board and its specialist sub-committees, capital
allocation and dividend policies, tax treatment, key man risk and succession planning. Governance plays a
central role in the investment philosophy of the Investment Manager, and it naturally veers away from certain
companies where practical issues of “getting business done” within India can undermine good governance.
These companies tend to be capital intensive, rely on multiple bureaucratic approvals for authorisation and
are often cash flow negative. The Investment Manager also will not consider investments in industries that are
considered harmful to the wellbeing of society not least because they may not demonstrate adequate
compliance with regulations and tax considerations which may create unforeseen financial uncertainty. These
include tobacco, alcohol, gambling and defence equipment manufacturers of all descriptions.
Strategic Report
Environmental, Social and Governance Statement (continued)
20
Investment management approach to sustainability & ESG (continued)
The Investment Manager values non-financial factors, such as environmental and social issues, when
evaluating a company for investment. These factors include gender diversity, environmental impact, carbon
footprint, workplace health and community engagement. If the sustainability risks exceed the risk appetite of
the Company, the Investment Manager may sell or reduce exposure to protect shareholders’ interests.
ESG Scoring
The Investment Manager does not use third party ESG ranking tools but has integrated the systematic and
explicit inclusion of material ESG factors into its investment analysis process from which it has developed
its own bespoke ESG scoring model for all the portfolio companies. The scoring is based primarily upon
publicly available data and output from company meetings resulting in scores for three key areas;
• Disclosure
• Direction of Travel
• Absolute comparison against companies in the sector
ESG factors considered in the assessment and scoring include:
Environment
• GHG emissions
• Planned carbon neutrality goals
• Energy management
• Water and wastewater management
• Waste and hazardous materials management
• Biodiversity & land use
Social
• Fulfilment of responsibilities under Corporate Social Responsibility requirements
• Human capital: employee turnover, health & safety, training & diversity, treatment of blue collar
workers
• Human rights and community relations
• Customer privacy and data security
• Access and affordability
• Product quality and safety
• Supply chain management
• Customer welfare
• Selling practices and product labelling
Governance
• Related party transactions
• Promoter’s behaviour: % holding, % shares pledged, exposure to other business, unlisted entities in
similar business, remuneration, family run vs. independently & professionally run
• Board structure: diversity, independence and size
• Board Committees and their independence: Audit, Nomination and Remuneration
• Capital allocation decisions
• Management of legal & regulatory environment
• Business ethics
• Competitive behaviour
Strategic Report
Environmental, Social and Governance Statement (continued)
21
ESG Scoring (continued)
The aggregate score is then weighted based upon its sector. An example of scoring is given below for a
both a cement and a consumer goods company in the portfolio. The Investment Manager is not focused on
absolute and target scores but improvements year on year. Consequently, it will require several more years
of data collection before deciding that improvements are not being made.
ESG Scoring Model
The Investment Manager’s overall ESG score for the portfolio in FY 2024 is 5.4 out of 9, an improvement
on both FY 2023 (5.1) and FY 2022 (4.7) across all three scoring criteria of Disclosure, Direction of Travel,
and Absolute Comparison Against Companies in the Sector. The Top 5 and Bottom 5 ESG scored portfolio
companies were all from different sectors so there appears to be no sector trend in the ESG performance
improvements in the portfolio. Additionally, the Investment Manager reports that disclosures have
substantially improved in FY 2024 as the Security Exchange Board of India (SEBI) mandated the top 1,000
listed companies to provide detailed sustainability disclosures. ESG Scoring is providing the Investment
Manager with key insight into how portfolio companies are faring on ESG and ongoing engagement enables
the Investment Manager to also obtain incremental data which is not publicly disclosed. Below is a summary
of the ESG scoring for FY 2024.
Strategic Report
Environmental, Social and Governance Statement (continued)
22
Portfolio ESG Scores
4.7
5.1
5.4
FY22 FY23 FY24
ESG Score
ESG Score
2.9
2
1.8
2.6
1.5
2.1
3
2.4
2.3
2.6
2.6
2.5
2.8
1.8
2.5
0
2
4
6
8
Welspun India Federal Bank Jyothy Laboratories Skipper Persistent Systems
Top 5 Scores
E S G
Strategic Report
Environmental, Social and Governance Statement (continued)
23
Portfolio ESG Scores (continued)
Engagement
To gain a comprehensive understanding of the ESG and sustainability practices of portfolio companies, the
Investment Manager prioritises constructive dialogue with management. The investment advisers in India
regularly engage with both current and potential portfolio companies, conducting onsite visits to
manufacturing facilities and corporate headquarters to gather insights and build a clear picture. Additionally,
they strive to meet employees beyond the senior management team to ensure that the ESG, and
sustainability values promoted by senior management are reflected throughout the organisation.
1.3
1.6
1.3
2.6
1.3
1.6
1
2.1
1.9
1.1
1.4
1.4
0
2
4
6
8
Affle India PSP Projects Uniparts India Aether Industries GPT Healthcare
Bottom 5 Scores
E S G
47
34
14
Score > 6 Score > 5 < 6 Score < 5
ICGF Scoring (% of portfolio)
Strategic Report
Environmental, Social and Governance Statement (continued)
24
Engagement (continued)
The Investment Manager has noted over the past two years that there has been a substantial improvement
in ESG practices and disclosure standards being followed by Indian companies. There is a recognition
within corporates that poor disclosure and practices on ESG could be a significant business risk, while good
ESG practices act as a competitive advantage and lead to improved market valuations. This is reflected in
improved level of disclosures in corporate presentations on ESG goals and progress made.
The regulatory environment is also getting tighter. SEBI has introduced the Business Responsibility and
Sustainability Reporting (BRSR) regulation which is a comprehensive disclosure framework that helps
companies disclose their ESG-related information in India. BRSR came into effect in 2021 and since FY
2023, it is mandatory for the top 1,000 listed entities in India to report under this framework. This is enabling
a better relative comparison within companies in a sector and has resulted in engagement meeting
presentations from both investee companies and potential portfolio holdings giving substantial coverage to
ESG matters such that direct engagement to drive ESG reporting improvements has, in general, not been
necessary in FY 2024. The Investment manager believes the quality of data being reported is improving
each year which is reflected in the improved ESG scoring of the portfolio referred to above.
Voting on portfolio investments
The Investment Manager has been empowered to exercise discretion in the use of its voting rights in respect
of portfolio investments. Where practicable, all shareholdings were voted at all investment company
meetings which backs up and reinforces engagement and integrates sustainability issues into the voting
process.
Holdings in individual companies are not large and our votes are not likely to carry weight. However as
responsible investors, and due to our remit to invest in small and mid-cap Indian equities supported by a
long-term investment approach, management teams do look to us for guidance on aspects of best practice.
In turn we look to influence their thinking positively in respect of ESG matters.
An example is VIP Industries – we voted against four resolutions at their AGM in July 2024. All pertained to
remuneration of Senior Management and Directors. We opposed the resolution which sought to
compensate them despite poor operating performance. The special resolution was sought due to poor
profits and the remuneration sought violated the limits prescribed in the Companies Act. Hence a special
resolution, which we voted against.
Modern Slavery Statement
The Modern Slavery Statement is included under ‘Employees, human rights and corporate social
responsibility’ on page 36.
United Nations-backed Principles of Responsible Investment Initiative (PRI)
As part of its commitment to responsible investing, the Investment Manager is a signatory to The United
Nations-backed PRI.
Strategic Report
Environmental, Social and Governance Statement (continued)
25
Risk Summary
ESG governance and related risk management is a key focus of the Board. Significant steps have been
taken by the Investment Manager on behalf of the Company to develop a bespoke ESG scoring model
which monitors investee companies’ ESG risk management and the reporting thereof. This applies to
existing portfolio companies and is also taken into account before investing in prospective investee
companies. Noticeable improvements have been made in this regard since the Investment Manager began
developing its bespoke ESG scoring model over three years ago. The Company has no specific targets for
the portfolio scores on ESG factors, but is focused on the journey and how Indian companies and their
management are improving their scores. Additionally, it is notable how the regulators in India have focused
on improving ESG risk management and reporting of listed companies in India over the last two years. The
Board expects these improvements to continue in the future.
There are ESG risks for the Company associated with non-adherence to the principles highlighted above
and inherent in the principal and emerging risks described in more detail in the Principal Risks section on
pages 27 to 29.
Strategic Report
Risk Management
26
Risk management and internal control
The Board is responsible for establishing and maintaining the Company’s system of internal controls and
for maintaining and reviewing its effectiveness. The system of internal controls is designed to manage rather
than to eliminate the risk of failure to achieve business objectives and as such can only provide reasonable,
but not absolute, assurance against material misstatement or loss.
The Board also considers the process for identifying, evaluating and managing any significant risks faced
by the Company. At each quarterly meeting of the Board a report on the risk assessment and control
environment is presented by the Investment Manager and considered. Changes in the risk environment are
highlighted as are changes in the controls in force to manage or mitigate those risks. The Board is satisfied
that appropriate controls are in place in relation to the key risks faced by the business.
Following the acquisition of the Company’s Investment Manager by River Global PLC in 2023, all of the
Directors separately visited the offices of River Global PLC to review the systems in place, which were
principally unchanged although enhanced from those under previous ownership, meet with personnel and
establish that the controls were effective. A report was subsequently circulated to the whole Board and
discussed. The Board concluded that the systems and controls were effective and risks addressed with no
significant weaknesses identified. The Board visited the Manager in October 2024 to receive an update on
the risk analytics systems provided by River Global PLC. The Board was impressed with the value this
system adds in support of the existing investment process and resources. The Board will conduct future
visits as required and particularly if there are changes to systems. Also, the Board receives regular reports
from the Investment Manager for consideration. The other significant third party provider where significant
reliance is placed upon effective controls is the Administrator. The Audit & Risk Committee Chair reviewed
the most recent type 2 ISAE 3402 report and Bridge letter on the Administrator’s control environment for
the period ended 31 December 2024 and was satisfied that those controls which were tested were deemed
to be effective with no significant weaknesses identified. The results of this review were shared with the
Board and it was agreed that this provided comfort that certain key risks connected with those tasks for
which the Administrator is accountable are significantly mitigated. The Administrator also provides a report
at each quarterly Board meeting identifying any breaches which have occurred during the period and any
significant changes. There were no breaches during the year.
Principal risks and uncertainties
The Board confirms that they have carried out a robust assessment of the principal risks facing the
Company, including those that would threaten its business model, future performance, solvency or liquidity.
The Board has drawn up a Control Environment and Risk Assessment Matrix (the “Matrix”), which identifies
the key risks to the Company and considers the impact and likelihood of each significant risk identified. The
Board reviews the Matrix at least quarterly to ensure, in particular, that any emerging risks are identified,
assessed and documented at an early stage.
The Principal Risks fall into broad categories, summarised in the table on the following pages.
Strategic Report
Risk Management (continued)
27
Principal risks and uncertainties (continued)
Principal Risks
Mitigation
Investment performance and financial risk:
Significant market, foreign currency, credit and liquidity
risks faced by the Company are set out in note 10 to
the financial statements.
The Company could be severely affected by a change
in market conditions leading to a fall in share price and
potentially a widening of the discount to NAV.
The likelihood of the Company being impacted by this
risk is judged to be high.
These risks and their mitigation controls are reviewed at
each quarterly Board meeting.
Investment is governed by the Investment Policy which
ensures a diverse portfolio is maintained.
The portfolio is actively managed by an experienced
Investment Team and is regularly reviewed using tools
established by the regulated Investment Manager.
The Board reviews and questions the Investment
Manager’s report at each quarterly Board Meeting.
The estimated NAV is released each day and a monthly
NAV published at month end.
Investment performance is monitored against other
companies and reports received from the Company’s
broker.
Cash balances are reviewed on a regular basis to ensure
adherence to the limits agreed by the Board.
The residual risk following the risk mitigation is deemed to
be medium.
(Risk – No change)
Redemption Facility and associated risk:
The third Redemption Facility where shareholders will
be able to request the redemption of some or all of the
shares will be the last working day of November 2025,
subject to shareholder approval at the Company’s
AGM on 5 June 2025. There is therefore a possibility
that redemptions requests may impair the future long-
term viability of the Company.
The pre-mitigation likelihood of the Company being
impacted by this risk is judged to be high.
Based upon the investment performance of the Company
to date, the diversity of the shareholder base and that
shares have previously been issued from treasury at a
premium to NAV to satisfy increased demand, the Board
believes shareholder redemptions at the next scheduled
Redemption Facility on the last working day of November
2025, subject to shareholder approval at the Company’s
AGM on 5 June 2025, are likely to be at such a level not to
impact the going concern of the Company.
The residual risk following the risk mitigation is deemed to
be medium.
(Risk – No change)
Strategic Report
Risk Management (continued)
28
Principal risks and uncertainties (continued)
Principal Risks
Mitigation
Emerging risks:
Risks that emerge unexpectedly, and in some cases
quite quickly, can have an economic impact upon the
Company. In particular significant geopolitical conflicts
such as the Russia/Ukraine conflict, Israel/Palestine
conflict and the introduction of Trade Tariffs can disrupt
global supply chains and the Indian economy and
listed companies.
The pre-mitigation likelihood of the Company being
impacted by this risk is judged to be high.
The Board assesses and monitors these risks as and
when they develop so, if necessary, controls and
procedures can be implemented to mitigate against their
economic impact upon the Company. During the year,
there were no changes to the emerging risks identified,
and no new procedures were implemented.
The residual risk following the risk mitigation is deemed
to be medium.
(Risk – Increase)
Cybersecurity, data security breach and related
criminal activity risk:
The Company is exposed to the risk of criminal attacks
on its data and systems held and managed by its
service providers.
The pre-mitigation likelihood of the Company being
impacted by this risk is judged to be high.
Cybersecurity controls at all service providers are
reviewed on a regular basis.
Controls at the administrator are subject to an annual
controls audit which is reviewed by the Audit & Risk
Committee and any anomalies or breaches followed up.
The residual risk following the risk mitigation is deemed
to be medium.
(Risk – No change)
Operations and systems risk:
The Company is exposed to the risks arising from any
failure of systems and controls in the operations of the
Investment Manager, the Administrator, or the
Company’s other service providers.
The likelihood of the Company being impacted by this
risk is judged to be medium.
The Investment Manager and Administrator are both
regulated entities.
The Board receives quarterly compliance reports which
are reviewed and challenged where necessary.
Any breaches are addressed as soon as they are
highlighted to the Board and appropriate action taken to
rectify.
Under normal circumstances members of the Audit &
Risk Committee visit the Investment Manager annually
to perform a due diligence review of its controls and the
Board receives reports annually from the Administrator
on their internal controls.
The residual risk following the risk mitigation is deemed
to be low.
(Risk – No change)
Strategic Report
Risk Management (continued)
29
Principal risks and uncertainties (continued)
Principal Risks
Mitigation
Environmental and Social (“E&S”) impact risk:
The potential loss or harm directly or indirectly
resulting from environmental and social factors that
impact the Company, its investors and its service
providers, and the consequential impact on the
environment and society. E&S impact risk is a
transverse risk that impacts our other risks:
investment performance risk, currency and emerging
market risk, operational non-financial risk, legal and
regulatory risk and reputation risk. Our investment
manager has developed a qualitative scoring model
which measures climate and other environmental
impacts and the reporting thereof by the Company’s
investment portfolio companies.
The likelihood of the Company being impacted by this
risk is judged to be medium.
The Investment Manager has an advisory team on the
ground in India who keep abreast of the latest political
developments and economic forecasts and regularly
advise the Board thereof.
The Board considers the reports from the Investment
Manager and determines whether the Company is
detrimentally affected. Further details are included in the
Company’s report on Sustainability and ESG on pages 19
to 25.
The residual risk following the risk mitigation is deemed to
be low.
(Risk – No change)
Accounting, legal and regulatory risk:
The Company is at risk if it fails to comply with the
laws and regulations applicable to a company with a
premium listing on the Main Market of the London
Stock Exchange and the Guernsey, Mauritian and
Indian laws and regulations or if it fails to maintain
accurate accounting records.
The likelihood of the Company being impacted by this
risk is judged to be medium.
The Investment Manager and Administrator are both
regulated entities.
The Board receives quarterly compliance reports which
are reviewed and challenged where necessary.
The Investment Manager and Administrator provide the
Board with regular reports on changes in regulations and
accounting requirements. Legal advice is taken where
appropriate.
Any breaches are addressed as soon as they are
highlighted to the Board and appropriate action taken to
rectify.
The residual risk following the risk mitigation is deemed to
be low.
(Risk – No change)
The Company’s risks are documented in a Risk Register which is reviewed and updated by the Board at
least quarterly. The Principal Risks listed above have not materially increased or decreased during the
course of the year. Multi-jurisdictional taxation risk is no longer considered a principal risk.
Strategic Report
Risk Management (continued)
30
Risk appetite
The Board recognises that prudent risk-taking is essential to achieving the Company’s strategic objectives
and maximising shareholder value. They embrace a moderate risk appetite, seeking opportunities for
growth while prioritising the long-term appreciation of capital and the protection of Company reputation. The
Board is committed to maintaining robust risk management practices to identify, assess and mitigate risks
effectively, ensuring alignment with given tolerance levels and regulatory requirements. By striking a
balance between investment returns and risk mitigation, the Board aims to deliver sustainable long-term
value to the shareholders of the Company.
Directors’ Information
31
The Directors as at 31 December 2024, all of whom are non-executive, are as follows:
Elisabeth Scott (Chair)
Elisabeth was appointed to the Board as Chair on 18 December 2017. She has 40 years’ experience in the
asset management industry, having started her career in Edinburgh in the 1980s, then moving to Hong
Kong in 1992 where she remained until 2008, latterly in the role of Managing Director and Country Head of
Schroder Investment Management (Hong Kong) Limited. She is a Non-Executive Director of Allianz
Technology Trust PLC and BlackRock World Mining Trust plc, and Chair of JPMorgan Global Emerging
Markets Income Trust plc and a former Chair of the Association of Investment Companies (AIC). She is
resident in the UK.
Patrick Firth
Patrick was appointed to the Board in September 2020. He qualified as a Chartered Accountant with KPMG
Guernsey in 1991 and is also a member of the Chartered Institute for Securities and Investment. He worked
in the fund industry in Guernsey since joining Rothschild Asset Management C.I. Limited in 1992 before
moving to become managing director at Butterfield Fund Services (Guernsey) Limited (subsequently
Butterfield Fulcrum Group (Guernsey) Limited), a company providing third party fund administration
services, where he worked from April 2002 until June 2009. Patrick is a former Chairman of the Guernsey
International Business Association and of the Guernsey Investment Fund Association. He is a Non-
Executive Director of CT UK Capital and Income Investment Trust plc. In February 2025 he was appointed
as a Non-Executive Director of VH Global Energy Infrastructure plc. He is resident in the UK.
Directors’ Information (continued)
32
Lynne Duquemin
Lynne was appointed to the board in May 2021. She has over thirty-five years’ experience in financial
markets, initially in London in the late 1980’s before being seconded by Credit Suisse to Guernsey, Channel
Islands in 1995. Since 2020 she has led the investment arm of a Single Family Office in Guernsey, as their
Chief Investment Officer. Prior to which she worked for twelve years as an Investment Consultant for an
Independent Investment Consultancy. She is a Fellow of the Chartered Institute for Securities and
Investment and a Chartered Wealth Manager. She is also an ASIP qualified member of the CFA UK member
of the CFA, 953214, as well as a Chartered Director and Fellow of the Institute of Directors. Lynne is a
Director of several private companies, including a global operating company and has prior experience as a
Non-Executive Director of a listed Frontier Equities Investment Company. She is based in Guernsey,
Channel Islands.
Nick Timberlake
Nick was appointed to the Board in July 2022. He has over 30 years’ experience in the asset management
industry as a Portfolio Manager, he was with HSBC Global Asset Management between 2005 and 2020,
initially as Global Head of Emerging Markets Equities and then Head of Equities. Previously he was a
Director of F&C Investment Management and has spent the last 20 years investing in global emerging
markets equities. He is a non-executive director of abrdn Equity Income Trust, CT Automotive plc and a
partner in Panorama Property Investments LLP. Nick is a member of the CFA Institute and CFA Society of
the UK. He is resident in the UK.
The following summarises the Directors’ directorships in public companies and other relevant entities:
Company Name
Stock Exchange
Elisabeth Scott
Allianz Technology Trust PLC
London
BlackRock World Mining Trust plc
London
JP Morgan Global Emerging Markets Income Trust plc
London
Patrick Firth
CT UK Capital and Income Investment Trust plc
VH Global Energy Infrastructure plc
London
London
Lynne Duquemin
-
-
Nick Timberlake
abrdn Equity Income Trust plc
London
CT Automotive plc
London
Directors’ report
33
The Directors present their annual report and the audited financial statements of the Company for the year
ended 31 December 2024 which have been properly prepared in accordance with The Companies
(Guernsey) Law, 2008, as amended.
The Company
India Capital Growth Fund Limited (the “Company”) was registered in Guernsey on 11 November 2005 and
is a closed-ended investment company with its shares admitted to trading on the main market of the London
Stock Exchange. The Company’s objective is to provide long-term capital appreciation by investing in
companies based in India. The Company’s registration number is 1030287. At 31 December 2024, the
Company has one wholly owned Mauritian subsidiary, ICG Q Limited (ICG Q). The Company has an
unlimited life, although a Redemption Facility has been put in place following the passing of a shareholders’
resolution at a General Meeting on 12 June 2020. The first date at which shareholders were able to request
the redemption of some or all of their shares was 31 December 2021 when 15,408,872 net shares were
redeemed under the Redemption Facility. The second date was 31 December 2023 when 15,159,876 net
shares were redeemed under the Redemption Facility. Under this facility the next date at which
shareholders will be able to request the redemption of some or all of the shares is scheduled to be 31
December 2025 for shareholders on the register at 30 September 2025.
Group structure
The Board of Directors continues to take steps to close down and to liquidate its Mauritian subsidiary, ICG
Q, given it no longer serves a beneficial purpose for the Company’s shareholders. However, this process
may take some considerable time given the restrictions imposed by the Indian regulators on transferring
listed Indian equities from one entity to another without incurring considerable costs and risk. The Board
does not believe this is in the interest of the shareholders. The Group’s custodian is actively engaging with
the Indian regulator to help facilitate this. In the meantime, the Investment Manager has moved Indian
Rupee (“INR”) cash balances held by the Group’s custodian from ICG Q to the Company and has committed
that all future purchases for the investment portfolio will be made by the Company directly, unless it is in
shareholders’ interests to do otherwise.
Details of the authorised and issued share capital, together with details of the movements in the Company’s
issued share capital during the year are shown in note 8. The Company has one class of ordinary shares
which carry no right to fixed income. Each share carries the right to one vote at general meetings of the
Company.
There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both
governed by the general provisions of the Articles of Association and prevailing legislation. The directors
are not aware of any agreements between holders of the Company’s shares that may result in restrictions
on the transfer of securities or on voting rights.
Investment policy
The Company's investment objective is to provide long-term capital appreciation by investing in companies
based in India. The investment policy permits the Company to make investments in a range of Indian equity
and equity-linked securities and predominantly in listed mid and small cap Indian companies with a smaller
proportion in unlisted Indian companies. Investment may also be made in large cap listed Indian companies
and in companies incorporated outside India which have significant operations or markets in India. While
the principal focus is on investment in listed equity securities or equity-linked securities, the Company has
the flexibility to invest in bonds (including non-investment grade bonds), convertibles and other types of
securities. The Company may, for the purposes of hedging and investing, use derivative instruments such
as financial futures, options and warrants. The Company may, from time to time, use borrowings to provide
short-term liquidity and, if the Directors deem it prudent, for longer term purposes. The Directors intend to
restrict borrowings on a longer-term basis to a maximum amount equal to 25% of the net assets of the
Company at the time of the drawdown. It is the Company’s current policy not to hedge the exposure to the
Indian Rupee.
Directors’ report (continued)
34
Investment policy (continued)
The portfolio concentration ranges between 30 and 40 stocks; however, to the extent the Company grows,
the number of stocks held may increase over time. The Company is subject to the following investment
limitations:
• No more than 10 per cent. of total assets of ICG Q and the Company (measured at the time of
investment) may be invested in the securities of any one Issuer; and
• No more than 10 per cent. of total assets of ICG Q and the Company (measured at the time of
investment) may be invested in listed closed-ended funds.
The Board of Directors of the Company does not intend to use derivatives for investment purposes. The
Directors confirm the investment policy of the Company has been complied with throughout the year ended
31 December 2024.
Results and dividends
The Company’s performance during the year is discussed in the Investment Manager’s review on pages 7
to 13.
The results for the year are set out in the audited statement of comprehensive income on page 59.
Consistent with the Company’s investment policy of providing long term capital appreciation, the Directors
do not recommend the payment of a dividend for the year ended 31 December 2024 (2023: £nil).
Substantial interests
Shareholders who held an interest of 3% or more of the Ordinary Share Capital of the Company at 28
February 2025, being the latest date such data is available, are stated in the table below:
*Note - % Holding is the percentage of voting rights and issued share capital.
All substantial interests disclosed are held in nominee accounts, and in the opinion of the Directors, the
Company has no ultimate controlling party.
Directors
The names and a short biography of the current Directors of the Company are set out on pages 31 and 32.
Elisabeth Scott, Patrick Firth, Lynne Duquemin and Nick Timberlake served throughout the year and to
date.
No. of Shares
% Holding*
Hargreaves Lansdown
16,628,220
19.46%
Interactive Investor
14,841,756
17.37%
AJ Bell
5,398,366
6.32%
West Yorkshire Pension Fund
4,677,028
5.47%
JM Finn
3,949,892
4.62%
Charles Stanley
2,847,957
3.33%
Directors’ report (continued)
35
Share repurchases by the Company
Further to the shareholders’ resolutions of 26 June 2024 and 27 June 2023, the Company purchased
1,613,512 ordinary shares in 2024 with a nominal value of £16,135, and representing 1.88 per cent of the
Company’s called up ordinary share capital, for a consideration of £2,840,588. These figures do not include
the Share redemption which occurred on 16 January 2024. The reason for the purchase was to reduce
surplus cash balances and enhance earnings per share.
At the end of the year, the directors had authority, under the shareholders’ resolutions of 26 June 2024 and
27 June 2023, to purchase through the market 14.99 per cent of the Company’s ordinary shares. This
authority expires on the date of the 2025 AGM.
Directors’ interests
At 31 December 2024, Directors and their immediate families held the following declarable interests in the
Company:
Ordinary shares
2024
2023
Elisabeth Scott
50,000
50,000
Patrick Firth
25,000
25,000
Lynne Duquemin
19,125
19,125
Nick Timberlake
50,000
50,000
Independent Auditor
The Independent Auditor, Deloitte LLP, has indicated their willingness to continue in office. Accordingly, a
resolution for their reappointment will be proposed at the next Annual General Meeting.
Directors’ Statement of Disclosure of Information to the Auditor
All of the Directors who were members of the Board at the date of approval of the Annual Report confirm
that to the best of their knowledge and belief, there is no information relevant to the preparation of the
Annual Report which the Auditor of the Company is unaware of, and they have taken all steps a Director
might reasonably be expected to take to be aware of relevant audit information and to establish that the
Auditor of the Company is aware of that information.
Ongoing charges
In accordance with the recommended methodology set out by the Association of Investment Companies
(AIC), the ongoing charges of the Company and its subsidiary for the year ended 31 December 2024 were
1.58% based on an average AUM of £168,646,935 (2023: 1.57% based on an average AUM of
£148,384,000).
Composition and independence of the Board
The Board currently consists of four Non-Executive Directors, all of whom are independent. The Chair of
the Board is Elisabeth Scott. In considering the independence of the Chair, the Board has taken note of the
provisions of the AIC Code relating to independence and has determined that Elisabeth Scott is an
Independent Director. The Chair does not have, and has not had, any relationships or circumstances that
may create a conflict of interest between her interests and those of shareholders. As the Chair is an
Independent Director, no appointment of a Senior Independent Director has been made. The Company has
no employees and therefore there is no requirement for a Chief Executive.
Directors’ report (continued)
36
Board meetings, Committee meetings and Directors’ attendance
During the year, the Directors in attendance at meetings were as listed in the table below:
Board Meetings
Audit & Risk Committee Meetings
Regular Board
Meetings
Attended
Number of
meetings
Attended
Elisabeth Scott
4
4
3
3
Patrick Firth
4
4
3
3
Lynne Duquemin
4
4
3
3
Nick Timberlake
4
4
3
3
In addition, there was one Management Engagement Committee meeting during the year, which all
Directors attended. There were also 5 ad-hoc board meetings during the year.
Performance evaluation
On an annual basis the Board formally considers the independence of its members, its effectiveness as a
Board, the balance of skills represented and the composition and performance of its committees. The size
of the Board and independence of its members are such that the Board does not consider the need for
external evaluations. The Board considers that it has an appropriate balance of skills and experience in
relation to the activities of the Company and offers relevant training where necessary. The Chair evaluates
the performance of each of the Directors on an annual basis by means of detailed questionnaires and
discussion, taking into account the effectiveness of their contributions and their commitment to the role. The
Directors have all confirmed that they have sufficient time to discharge their duties. The performance and
contribution of the Chair is reviewed by the other Directors under the leadership of the Chair of the Audit &
Risk Committee. The conclusion of the 2024 review was that the skill sets of the members of the Board
were complementary, and that the Board functioned effectively.
Even though the performance evaluation is deemed effective, the Board may consider having an external
evaluation of the performance in the future.
Board Committees
The Company does not have a Nomination or Remuneration Committee as explained in the Corporate
Governance Report on pages 43 and 44 which also includes details of the Management Engagement
Committee and Audit & Risk Committee.
Sustainability and environmental, social and governance (“ESG”)
The Company’s report on Sustainability and ESG is provided on pages 19 to 25.
Employees, human rights and corporate social responsibility
The Company has no employees, all of its Directors are non-executive and third party service providers
carry out its day-to-day activities. Therefore, there are no disclosures to be made in respect of employees
and the Company has not adopted a policy on human rights as it has no employees and its operational
processes are delegated. As an investment company, the Company does not provide goods and services
in the normal course of business and has no customers. Accordingly, the Board considers that the Company
is not within the scope of the Modern Slavery Act 2015. whilst the Company is not obliged to comply with
the Act, the Board is in agreement with its aims and receives confirmation from those third-party service
providers which are in scope that they are in compliance.
Directors’ report (continued)
37
Employees, human rights and corporate social responsibility (continued)
The Investment Manager’s primary objective is to produce superior financial returns for the Company’s
shareholders. It believes that high standards of corporate social responsibility (“CSR”) make good business
sense and have the potential to protect and enhance investment returns. Consequently, its investment
process considers social, environmental and ethical issues when, in the Manager’s view, these have a
material impact on either investment risk or return.
Board leadership, effectiveness, diversity & succession planning
The Board recognises that the Company will take investment and other risks in order to achieve its objectives
but these risks are monitored and managed and the Company seeks to avoid excessive risk-taking in pursuit of
returns. A large part of the Board’s activities are centred upon what is necessarily an open and respectful
dialogue with the Investment Manager. The Board believes that it has a very constructive relationship with the
Investment Manager whilst holding them to account and questioning the choices and recommendations made
by them.
The Board supports the principle of diversity and confirms that there will be no discrimination on the grounds of
gender, social and ethnic background, cognitive and personal strengths. The Board’s overriding intention is to
ensure that it has the best combination of people in order to achieve long-term capital growth for the Company’s
shareholders from an actively managed portfolio of investments. To this effect, the Board, as part of its
succession plan, will continue to appoint individuals who, together as a Board, will aim to ensure the continued
optimal promotion of the Company. The Board has met its target on gender diversity and will consider the target
for ethnic diversity when appointing new directors. There have been no changes to the Board this year.
Number of Board
Members
Percentage of
the Board
Number of senior positions on the
board (SID and Chair)
Men
2
50%
Women
2
50%
1 (Chair)
Number of Board
Members
Percentage of
the Board
Number of senior positions on the
board (SID and Chair)
White British or other white
4
100%
1 (Chair)
All directors are non-executive and the Company does not have a Senior Independent Director, as stated on
page 35.
Supply of information to the Board
Board meetings are the principal source of regular information for the Board enabling it to determine policy and
to monitor performance and compliance. A representative of the Investment Manager attends each Board
meeting thus enabling the Board to discuss fully and review the Company’s operation and performance. Each
Director has direct access to the Company Secretary, and may, at the expense of the Company, seek
independent professional advice on any matter that concerns them in the furtherance of their duties.
Delegation of functions
The Board has contractually delegated various functions as listed below to external parties. Each of these
contracts have been entered into after full and proper consideration by the Board, mindful of the quality and cost
of services offered, including the control systems in operation as far as they relate to the affairs of the Company.
The duties of investment management, accounting and custody are segregated.
• Investment Management is provided by Ocean Dial Asset Management Limited, a company authorised and
regulated in the United Kingdom by the Financial Conduct Authority (FCA) which is owned by River Global
PLC and its subsidiary River Global Holdings Limited.
Directors’ report (continued)
38
Delegation of functions (continued)
• Administration and Company Secretarial duties for the Company during the year were performed by Apex
Fund and Corporate Services (Guernsey) Limited, a company licensed and regulated by the Guernsey
Financial Services Commission. Those for the subsidiary were performed by Apex Fund Services (Mauritius)
Limited, a company registered in Mauritius and licensed by the Financial Services Commission in Mauritius.
In advance of Board meetings, the Administrator provides regular reports, which include financial and other
operational information, details of any breaches or complaints and relevant legal, regulatory, corporate
governance and other technical updates. There is also regular contact between the Directors and the
Administrator between Board and Committee meetings.
• Custody of assets is undertaken by Kotak Mahindra Bank Ltd, which is registered as a custodian with the
Securities and Exchange Board of India (SEBI).
The Board has established a Management Engagement Committee to review the performance of all
material external service providers and the related contractual terms. The Management Engagement
Committee is constituted of the current four Directors of the Company, with Elisabeth Scott acting as the
Chair. The last meeting of the Management Engagement Committee was held on 4
th
December 2024, and
it meets at least annually. Performances of all material external service providers are considered
satisfactory.
Investment management
The investment management agreement will continue unless and until terminated by either party giving to
the other not less than twelve months’ notice in writing or six months’ notice by the Company if at any
Redemption Point, redemption requests exceed 50% of the issued share capital of the Company at the date
of the Redemption Point. The management agreement may also be terminated forthwith as a result of a
material breach of the agreement or on the insolvency of the Investment Manager or the Company and by
the Investment Manager by notice within 30 days of being notified by the Company of any material change
to the investment policy.
The Investment Manager is entitled to receive a management fee payable jointly by the Company and the
Mauritian subsidiary, ICG Q Limited. From March 2024, the method of calculation for these fees has been
updated. Investment management fees receivable from ICG Q are calculated based on the NAV of ICG Q.
Investment management fees payable to Ocean Dial Asset Management Limited are based on the assets
of ICGF. The overall burden of investment management fees to ICGF remains unchanged at 1.25% of the
lower of the company’s market capitalisation or NAV calculated on a daily basis and payable monthly. The
Company’s Total Assets consist of the aggregate value of the assets of the Company less its current
liabilities before the deduction of management fees. For purposes of the calculation of these fees current
liabilities exclude any proportion of principal amounts borrowed for investment. To date, the Company has
not borrowed for investment or any other purpose.
The Board as a whole reviews the performance of the Investment Manager at each quarterly Board Meeting
and considers whether the investment strategy utilised is likely to achieve the Company’s investment
objective. Having considered the portfolio performance and investment strategy, the Board has agreed that
the interests of the shareholders as a whole are best served by the continuing appointment of the Investment
Manager on the terms agreed.
From time to time the extent of powers delegated to the Investment Manager and matters upon which
decision making is reserved to the Board are reviewed and considered. In particular, the approval of the
Board (or a designated committee) is required in relation to:
• Borrowings (other than on a temporary basis);
• Investment in unlisted securities (other than those arising on a temporary basis from demergers from
existing listed holdings);
• Exercise of the Company’s share buy-back powers; and
• Policy on currency hedging.
Directors’ report (continued)
39
Investment management (continued)
The Investment Manager reports to the Board on brokers used for executing trades and the commission
paid to brokers. The Investment Manager does not use commissions paid by the Company to pay for
services used by the Investment Manager other than directly related research services provided by the
broker. There is a procedure in place whereby any prospective conflict of interest is reported by the
Investment Manager to the Chair and a procedure to manage the prospective conflict agreed. The
Investment Manager’s policy on conflicts is reviewed by the Board annually.
The provisions of the UK Stewardship Code do not apply to the Company as all investments are outside
the United Kingdom. The Board has delegated to the Investment Manager the power to vote in relation to
the Company’s holdings in Indian listed companies, whether held directly or via ICG Q, the Company’s
wholly owned subsidiary.
Alternative Investment Fund Managers Directive (AIFMD)
The Board has appointed the Investment Manager to act as its AIF Manager.
The Investment Manager, Ocean Dial Asset Management Limited, is registered with the Financial Conduct
Authority in the UK as an Alternative Investment Manager (AIFM) and is authorised as a small Authorised
UK AIFM. Consequently, AIFM remuneration disclosures are not required.
Foreign Account Tax Compliance Act (FATCA)
For purposes of the US Foreign Account Tax Compliance Act, the Company registered with the US Internal
Revenue Services (IRS) as a Guernsey reporting Foreign Financial Institution (FFI), received a Global
Intermediary Identification Number and can be found on the IRS FFI list. The responsible officer is Robin
Sellers.
The Company is subject to Guernsey regulations and guidance based on reciprocal information sharing
inter-governmental agreements which Guernsey has entered into with the United Kingdom and the United
States of America. The Board will take the necessary actions to ensure that the Company is compliant with
Guernsey regulations and guidance in this regard.
Shareholder communication
The Board considers a report on shareholder communications at each quarterly Board Meeting and a
monthly Fact Sheet is published on the Company’s website reporting the month-end NAV with a
commentary on performance. The Investment Manager also reports via the Regulatory News Service (RNS)
an estimated, unaudited daily NAV. The Investment Manager and the Corporate Broker maintain regular
dialogue with institutional shareholders, feedback from which is reported to the Board. Additionally during
the year the Investment Manager conducted three well-attended webinars for shareholders which received
positive feedback from shareholders who attended. Board members are available to answer shareholders’
questions at any time, and specifically at the Annual General Meeting. The Company Secretary is also
available to answer general shareholder queries at any time during the year. Throughout 2024, Gaurav and
the investor relations team from Ocean Dial/River Global PLC have visited a wide range of professional and
retail investors across the UK to update investors on the Indian economy, general election results, and the
performance of the investment portfolio.
In order to ensure the Board members have an understanding of the views of all shareholders about their
Company, the Investment Manager and the Corporate Broker, who regularly engage with those
shareholders, both report those views to the Board Members at each board meeting. The Board monitors
activity in the Company’s shares and the discount or premium to NAV at which the shares trade both in
absolute terms and relative to the Company’s peers. Shareholders and stakeholders are engaged with via
regular webinars and monthly factsheets.
Directors’ report (continued)
40
Shareholder communication (continued)
The Company has the authority, subject to various terms as set out in its Articles and in accordance with
The Companies (Guernsey) Law, 2008, as amended to buy-back in the market, up to 14.99% of the shares
in issue. The Company intends to request renewal of this power from shareholders on an annual basis. As
of 31 December 2024, the Company had bought back a total of 1,613,512 (2023: 762,645) shares in the
market.
Going concern
The Board made an assessment of the Company’s ability to continue as a going concern for the twelve
months from the date of approval of these financial statements taking into account all available information
about the future including the liquidity of the investment portfolio held both by the Company and its
subsidiary, ICG Q Limited (77.8% of the portfolio can be liquidated within 5 days); the performance of the
investment portfolio; the overall size of the Company and its impact on the Ongoing Charges of the
Company (the NAV of the Company exceeded £100m throughout the year); the level of operating expenses
covered by highly liquid investments held in the portfolio (operating expenses are 50 times covered by highly
liquid investments); and the length of time to remit funds from India to Mauritius and Guernsey to settle
ongoing expenses (no more than 10 working days to have investments liquidated and sterling funds in
Guernsey).
Given the Company’s previous performance, the Directors proposed a continuation ordinary resolution at
the Extraordinary General Meeting held on 12 June 2020, at which the Shareholders approved that the
Company continue as currently constituted and introduce a Redemption Facility which gives the ordinary
shareholders the ability to redeem part or all of their shareholding at a Redemption Point every two years.
The first Redemption Point was on 31 December 2021 when valid redemption requests were received in
respect of ordinary shares which were subsequently redeemed under the Redemption Facility in
accordance with the announced timetable.
The second Redemption Point was on 31 December 2023 when valid redemption requests were received
in respect of 15,159,876 ordinary shares (15.7% of the then issued share capital) which were subsequently
redeemed under the Redemption Facility at a total cost of £26.2m in accordance with the announced
redemption price on 8 January 2024. During 2024, to satisfy demand in the market, the Company issued
over 5.8m shares from Treasury at a premium to NAV raising over £10.7m in new capital, and bought back
1.6m shares at a significant discount to NAV. Further buybacks were made subsequent to the year end. As
at 28 February 2025 the Company’s NAV was £144.8m.
The next date at which shareholders will be able to request the redemption of some or all of the shares is
scheduled to take place on the last working day of November 2025, subject to shareholder approval at the
Company’s AGM on 5 June 2025, for shareholders on the register at 29 August 2025. Based upon the
performance of the Company to date, the results of the previous two redemptions, and the increase of the
proportion retail shareholders seeking long term value growth on the share register since the last
Redemption Facility on 31 December 2023, the Board believes shareholder redemptions at the forthcoming
Redemption Facility on 31 December 2025 are likely to be at such a level not to impact the going concern
of the Company.
The Directors are satisfied that the Company has sufficient liquid resources to continue in business for the
next twelve months from the date of approval of these financial statements, therefore the financial
statements have been prepared on a going concern basis.
Approved by the Board of Directors and signed on behalf of the Board on 26 March 2025.
Lynne Duquemin Patrick Firth
Statement of Directors’ responsibilities
41
The Directors are responsible for preparing the Directors’ Report, Directors’ Remuneration Report, Portfolio
Statement and the financial statements in accordance with applicable laws.
The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial statements for each
financial year. Under that law they have elected to prepare the financial statements in conformity with IFRS
Accounting Standards, as adopted by the United Kingdom (“UK”) and applicable law.
The financial statements are required by law to give a true and fair view of the state of affairs of the Company
and of the profit or loss of the Company for that period.
In preparing these financial statements the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable 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 proper accounting records which disclose with reasonable
accuracy at any time the financial position of the Company and to enable them to ensure that the financial
statements comply with the Companies (Guernsey) Law, 2008, as amended. They have general
responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company
and to prevent and detect fraud and other irregularities.
The Directors are also responsible for ensuring the Company complies with the Listing Rules and Disclosure
Guidance and Transparency Rules (DTR) of the UK Listing Authority which, with regard to corporate
governance, requires the Company to disclose how it has applied the principles, and complied with the
provisions, of the AIC Code and the UK Corporate Governance Code to the Company. Except as disclosed
within this Annual Report, the Board is of the view that throughout the year ended 31 December 2024, the
Company complied with the recommendations and provisions of the AIC Code and the UK Corporate
Governance Code, with the exceptions noted in the Corporate Governance report on page 43.
The Company continues to comply with the requirements of UKLR 6.2.3R.
We confirm to the best of our knowledge that:
• the financial statements, prepared in accordance with the relevant financial reporting framework, give
a true and fair view of the assets, liabilities, financial position and profit or loss of the Company;
• the annual report includes a fair review of the development and performance of the business and the
position of the Company, together with a description of the principal risks and uncertainties that they
face; and
• the annual report and financial statements, taken as a whole, are fair, balanced and understandable
and provide the information necessary for shareholders to assess the Company’s position,
performance, business model and strategy.
Signed on behalf of the Board by:
Lynne Duquemin Patrick Firth
26 March 2025
Directors’ remuneration policy
42
An ordinary resolution for the approval of the Directors’ remuneration report will be put to the Shareholders
at the next Annual General Meeting.
Directors’ Remuneration Policy
Due to the size of the Board, the Directors have not established a separate Remuneration Committee. The
Company's Articles of Incorporation state that unless otherwise determined by ordinary resolution, the
number of the Directors shall not be less than two and the aggregate remuneration of all Directors in any
12-month period or pro rata for any lesser period shall not exceed £200,000 or such higher amount as may
be approved by ordinary resolution. The level of Directors’ fees is determined by the whole Board on an
annual basis, but no Director is involved in setting his own remuneration. When considering the level of
Directors' remuneration, the Board considers the industry standard and the level of work undertaken.
The Directors' fees are the only remuneration for the Directors. There are no performance incentives or
other forms of remuneration or bonus schemes. The Shareholders of the Company do not provide input on
the Directors' remuneration, however the Company seeks the approval of Shareholders as part of the
Annual Report at the AGM.
The Directors shall also be entitled to be repaid all reasonable out of pocket expenses properly incurred by
them in or with a view to the performance of their duties or in attending meetings of the Board or of
committees or general meetings.
The Board shall have the power at any time to appoint any person to be a Director either to fill a casual
vacancy or as an addition to the existing Directors. Any Director so appointed shall hold office only until the
next following annual general meeting and shall then be eligible for re-election.
Remuneration
Annual Directors’ fees for the years listed are as follows:
Annual fee effective
Annual fees paid
Annual fees paid
01 Sept 2024
to 31 Dec 2024
to 31 Dec 2023
£
£
£
Elisabeth Scott (Chair)
42,000
39,375
38,500
Patrick Firth
34,000
31,750
31,000
Lynne Duquemin
28,000
26,875
26,500
Nick Timberlake
28,000
26,875
26,500
No additional sums were paid in the year to Directors for work on behalf of the Company outside their normal
duties. None of the Directors had a service contract with the Company during the year and accordingly a
Director is not entitled to any minimum period of notice or to compensation in the event of their removal as
a Director.
Corporate Governance
43
The Company is a member of the AIC and has elected to follow the AIC Code, as revised in February 2019.
The AIC Code has been endorsed by the FRC as an alternative means for their members to meet their
obligations in relation to the UK Corporate Governance Code, as published in July 2018. The AIC Code
addresses all the principles and recommendations on issues that are of specific relevance to investment
companies.
The UK Corporate Governance Code includes provisions relating to: (i) the role of the chief executive; (ii)
executive directors’ remuneration; (iii) a nomination committee; and (iv) an internal audit function. For the
reasons set out in the AIC Corporate Governance Guide, the Board of Directors considers these provisions
are not relevant to the position of the Company, due to the size of the Board and as an externally managed
investment company with no employees.
The Finance Sector Code of Corporate Governance issued by the Guernsey Financial Services
Commission (the “GFSC Code”) applies to the Company, Companies which report against the UK
Corporate Governance Code (the “UK Code”) or the AIC Code are deemed to meet the requirements of the
GFSC Code.
As stated above, the Board considers that it has complied with the AIC Code, GFSC Code and UK Code
during the year ended 31 December 2024, with the below noted exceptions to the provisions of the UK
Code:
• The Company has no Chief Executive Officer, as the Company does not have any employees.
Details of the composition of the Board can be found in the Directors’ Report on page 37 (provision
A.1.2. of the UK Corporate Governance Code).
• The Company has no internal audit function, there is an external audit performed annually
(provision C.3.6 of the UK Corporate Governance Code).
• The Company does not have a separate Remuneration Committee, further details of this can be
found on page 44 (provision D.2.1 of the UK Corporate Governance Code).
Composition and independence of the Board
The Board currently consists of four Non-Executive Directors, all of whom are independent. The Chair of
the Board is Elisabeth Scott. Refer to page 31 for further detail.
Board meetings
The Board generally meets on at least four occasions each year, at which time the Directors review the
management of the Company’s assets and all other significant matters so as to ensure that the Directors
maintain overall control and supervision of the Company’s affairs. The Board is responsible for the
appointment and monitoring of all service providers to the Company. The Board believes all the Directors
have sufficient time to meet their Board responsibilities. Refer to page 36 for Directors’ attendance at Board
meetings and Committee meetings.
Performance evaluation
On an annual basis the Board formally considers the independence of its members, its effectiveness as a
Board, the balance of skills represented, the culture and the composition and performance of its committees.
The performance and contribution of the Chair is reviewed by the other Directors under the leadership of
the Chair of the Audit & Risk Committee. Even though the performance evaluation is deemed effective, the
Board may consider having an external evaluation of the performance in the future. Refer to page 36 for
further detail.
Corporate Governance (continued)
44
Management Engagement Committee
The Management Engagement Committee is chaired by Elisabeth Scott and formally meets on an annual
basis to review service providers and ensure that these are performing satisfactorily and suited to the
Company’s needs.
Nomination Committee
The size of the Board and independence of its members are such that the Board does not consider there is
need for a separate Nomination Committee. Any proposal for a new director is discussed and approved by
the Board, having considered the current skills, experience and diversity of the Board.
Each Director stands for annual re-election at the Company’s Annual General Meeting.
Remuneration Committee
The size of the Board and independence of its members are such that the Board does not consider the need
for a separate Remuneration Committee. Remuneration is reviewed annually and discussed by the Board
as a whole with reference to the Trust Associates Investment Company Non-Executive Directors’ Fee
Review.
Audit & Risk Committee
All members of the Board are also members of the Audit & Risk Committee. The Chair of the Audit & Risk
Committee is Patrick Firth. The Chair of the Board is also a member of the Audit & Risk Committee given
her extensive experience and knowledge, in particular given her appointment to the Board of the Company
for more than 5 years. The Audit & Risk Committee conducts formal meetings throughout the year for the
purpose, amongst others, of considering the appointment, independence, effectiveness of the audit and
remuneration of the auditors and to review and recommend the annual statutory accounts and interim report
to the Board for approval. Full details of its functions and activities are set out in the Report of the Audit &
Risk Committee on pages 45 to 48.
Shareholder voting on the resolution to Issue and allot new ordinary shares
On 26 June 2024, at the Company’s AGM, 29.77 per cent. of votes cast were against Resolution 8 which
sought authority for the Company to issue and allot new ordinary shares. Consequently, at the Company’s
request, the Manager and Broker consulted with shareholders who voted against Resolution 8, who
confirmed that they had followed the recommendation in a report from a Proxy Voting Agency and that, in
future, it would be helpful for the wording to be clearer in the resolution. As a result, the Company intends
to include explicit wording stating that new ordinary shares would only be issued at a premium to NAV per
share in the relevant resolution at its AGM and that the Board will ensure the amount for which the relevant
authority is sought does not exceed 33 per cent. of the Company’s issued share capital.
Audit & Risk Committee Report
45
Introduction
The Audit & Risk Committee (the “Committee”) report for 2024 is presented below. As in previous years,
the Committee has reviewed the Company’s financial reporting, the independence and effectiveness of the
Independent Auditor and the internal control and risk management systems of the Company and its service
providers.
Structure and Composition
The Chair of the Committee is Patrick Firth. The Chair of the Committee is appointed by the Board and the
members are appointed by the Board, in consultation with the Chair of the Committee. The Committee shall
have a minimum of two members. All members of the Committee shall be independent non-executive
directors, at least one of whom has recent and relevant financial experience. The Chair of the Committee
is a qualified accountant and is responsible for ensuring that the Committee carries out its Principal Duties.
All members of the Committee have recent and relevant financial experience.
The Committee conducts formal meetings at least twice a year, normally immediately preceding the Board
meetings at which the financial statements for the half-year and year end are reviewed. Only members of
the Committee have the right to attend meetings although, with the consent of the Chair of the Committee,
other Directors may be in attendance. The meetings attendance table in the Directors’ Report sets out the
number of Committee meetings held during the year ended 31 December 2024 and the number of such
meetings attended by each committee member. The Independent Auditor is invited to attend those meetings
at which the annual and interim reports are considered. The Independent Auditor and the Committee may
meet together without representatives of either the Administrator or Investment Manager being present if
either considers this to be necessary.
Principal Duties of the Committee
The role of the Committee includes:
• monitoring the integrity of the financial statements and any formal announcements regarding financial
performance of the Company;
• reviewing and reporting to the Board on the significant issues and judgements made in the preparation
of the Company’s published financial statements, (having regard to matters communicated by the
Independent Auditors) preliminary announcement and other financial information;
• reviewing the effectiveness of the external audit process and the auditors’ independence;
• considering and making recommendations to the Board on the appointment, reappointment,
replacement and remuneration of the Company’s Independent Auditor;
• reviewing arrangements by which persons associated with the key service providers are able to, in
confidence, raise concerns about possible improprieties in matters of financial reporting or other matters
and to ensure that appropriate proportionate independent investigation of such matters is undertaken;
• assessing whether the Annual Report and financial statements taken as a whole, are fair, balanced and
understandable and provide the information necessary for the shareholders to assess the Company’s
performance, business model and strategy; and
• informing the administrative or supervisory body of the issuer of the outcome of the statutory audit and
explaining how the statutory audit contributed to the integrity of financial reporting and what the role of
the relevant body was in that process.
The complete details of the Committee’s formal duties and responsibilities are set out in the Committee’s
terms of reference, which can be obtained from the Company’s website
(https://www.indiacapitalgrowth.com).
Audit & Risk Committee Report (continued)
46
Independent Auditor
Deloitte LLP acted as the Independent Auditor of the Company in respect of the year ended 31 December
2024.
The recent revisions to the UK Corporate Governance Code introduced a recommendation that the
independent audit of FTSE 350 companies be put out to tender every 10 years. Similarly, the EU and the
Competition Markets Authority have also issued requirements to tender every 10 years and extend for a
maximum of further 10 years before mandatory rotation. Notwithstanding the Company does not fall within
the FTSE350, the Committee will follow the developments around the FRC, EU and Competition Markets
Authority guidance on tendering and consider the impact for offshore incorporated entities. At this time, it is
not the intention of the Board to conduct a tender.
Following the recommendation of the Committee, Deloitte were appointed by the Board of Directors on 10
June 2015 to audit the financial statements for the year ending 31 December 2015 and subsequent financial
periods. The period of total uninterrupted engagement including previous renewals and reappointments of
the firm is 9 years, covering the years ending 31 December 2015 to 31 December 2024.
The independence and objectivity of the Independent Auditor is reviewed by the Committee which also
reviews the terms under which the Independent Auditor is appointed to perform non-audit services. Any
non-audit service provided by the Independent Auditor, other than reviewing interim financial information,
those services which are closely linked to the audit itself or those services which are required by law or
regulation to be completed by the Auditor, requires prior Committee approval where fees for the service are
in excess of £10,000 cumulative over the financial year.
In accordance with the non-audit services policy, Deloitte LLP will not be appointed to provide additional
services including the provision of accounting advice. The exception is where Deloitte LLP is best placed
to provide a service as a result of its audit, including the interim review which is permissible under the FRC
independence rules.
Given the fees for non-audit services paid by the Company are currently below the specified threshold, the
Independent Auditor can be deemed to be independent and objective.
The committee also received assurance from Deloitte LLP that no matters of concern were raised in external
evaluations of their performance that would impact upon their audit of the Company.
Evaluations during the year
The following assessments have been made by the Committee during the year:
Significant Financial Statement Issues
Liquidity and Valuation - The ongoing liquidity of the Company's investment portfolio was evaluated, which
included a review of both financial and relative non-financial information. Due to the liquid nature of the
Company’s and ICG Q’s holdings and the Company's ability to effect a disposal of any investment in ICG
Q’s portfolio and any of its direct investments at the prevailing market price and the distribution of proceeds
back to the Company should it so wish, it was determined that no illiquidity discount would be applied in
determining the fair value of the Company's investment in ICG Q and the Company’s direct investments.
Going Concern and Longer-Term Viability – The Committee assessed both the going concern of the
Company for a period of twelve months and its longer-term viability for a period of three years, particularly
in the light of the previous Redemption Facility in December 2023. Given recent investment performance,
feedback from shareholders and the adequacy of the Company’s liquid resources it was determined the
Company can continue in business for the foreseeable future.
Audit & Risk Committee Report (continued)
47
Evaluations during the year (continued)
Significant Financial Statement Issues (continued)
Financial Statements presentation – Following discussion with the external auditor the comparatives within
the audited statement of comprehensive income statement have been shown as revenue and capital in line
with industry practice.
The foregoing matters were discussed during the planning and final stage of the audit and there were no
disagreements between the Committee and the Independent Auditor.
Effectiveness of the External Audit Process
The Committee had formal meetings with Deloitte LLP in attendance during the course of the year: 1) at the
review and approval of the year end accounts, and 2) for the planning discussions for the year-end audit.
The Committee performed the following in relation to its review of the effectiveness and independence of
the Independent Auditor:
• Reviewed the audit plan presented to the Committee before the start of the audit;
• Challenged the post audit report;
• Challenged the Auditor’s own internal procedures to identify threats to independence, which included
obtaining confirmation from the Independent Auditor of their independence;
• Discussed with both the Manager and the Administrator any feedback on the external audit process;
and
• Challenged and approved terms of the engagement of audit services during the year, which included
an evaluation of the related fees.
In addition, the Committee performed specific evaluation of the performance of the Independent Auditor
which is supported by the results of questionnaires completed by the Committee. This questionnaire
covered areas such as quality of audit team, business understanding, audit approach and management.
There were no significant findings from the evaluation this year and the Committee is satisfied that the
external audit process is effective.
Audit fees and Non-audit Services
The table below summarises the remuneration paid by the Company to the Independent Auditor:
2024
2023
£
£
Annual Audit
62,500
52,000
Internal Control
The Committee has considered the need for an internal audit function. The Committee agreed that the
systems, controls and procedures employed by the Investment Manager and the Administrator provided
sufficient assurance that a sound system of internal control, which safeguards the Company’s assets, has
been maintained. An internal audit function specific to the Company is therefore considered unnecessary.
The Committee examined and challenged externally prepared assessments of the control environment in
place at the Administrator who provided an independent service auditor’s report in accordance with ISAE
3402 for the year ended 30 September 2024, and a Bridge letter covering the period from 1 October 2024
to 31 December 2024. The Committee was satisfied that controls relevant to the Company were operating
satisfactorily.
Audit & Risk Committee Report (continued)
48
Conclusion and Recommendation
After consultations with the Independent Auditor as necessary and reviewing various reports from the
Investment Manager such as the quarterly performance reports and portfolio attribution and portfolio
turnover reporting and assessing the significant financial statement issues, the Committee is satisfied that
the financial statements appropriately address the critical judgements and key estimates (both in respect to
the amounts reported and the disclosures). The Committee is also satisfied that the significant assumptions
used for determining the value of assets and liabilities have been appropriately scrutinised, challenged and
are sufficiently robust. The Committee further concludes that the financial statements, taken as a whole,
are fair, balanced and understandable and provide the information necessary for the shareholder to assess
the Company’s performance, business model and strategy.
At the conclusion of the external audit process, the Independent Auditor reported to the Committee that any
misstatements found in the course of its work had been corrected. Furthermore, both the Manager and the
Administrator confirmed to the Committee that they were not aware of any material misstatements including
matters relating to presentation. The Committee confirms that it is satisfied that the Independent Auditor
has fulfilled its responsibilities with diligence and professional scepticism.
Following the detailed review and evaluation processes identified in this report, the Committee has
concluded that the auditors have acted independently in the work undertaken on behalf of the Company
and has recommended to the Board that Deloitte LLP be reappointed as Independent Auditor of the
Company for the coming financial year.
For any questions on the activities of the Committee not addressed in the foregoing, a member of the
Committee remains available to attend each Annual General Meeting to respond to such questions.
Patrick Firth
Audit & Risk Committee Chair
26 March 2025
Independent Auditor’s report to the members of India Capital Growth Fund Limited
49
Report on the audit of the financial statements
1. Opinion
In our opinion the financial statements of India Capital Growth Fund Limited (the ‘Company’):
• give a true and fair view of the state of the Company’s affairs as at 31 December 2024 and of its profit
for the year then ended;
• have been properly prepared in accordance with United Kingdom adopted international accounting
standards; and
• have been prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.
We have audited the financial statements which comprise:
• the statement of comprehensive income;
• the statement of financial position;
• the statement of changes in equity;
• the statement of cash flows; and
• the related notes 1 to 16.
The financial reporting framework that has been applied in their preparation is applicable law and United
Kingdom adopted international accounting standards.
2. 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 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 Financial Reporting Council’s (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. We confirm that we have not provided any non-
audit services prohibited by the FRC’s Ethical Standard to the Company.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
50
3. Summary of our audit approach
Key audit matter
The key audit matter that we identified in the current year was
the valuation of the Company’s investment in its subsidiary and valuation of
directly held investments.
This key audit matter is consistent with the prior year.
Materiality
The materiality that we used in the current year was £1,793,500 which was
determined on the basis of 1% of Net Assets.
Scoping
The Company was audited as a single component. Balances were scoped in for
testing based on our assessment of risk of material misstatement. As part of our
risk assessment process, we considered the impact of controls implemented at
service organisations of the Company. Audit work to respond to the risk of material
misstatement was performed directly by the audit engagement team.
Significant changes in
our approach
There have been no significant changes in our approach.
4. 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:
• assessing the Redemption Facility mechanism and the ability for shareholders to request redemptions
at 31 December 2025 and the potential impact of this on the going concern of the Company;
• assessing the likelihood of the level of redemptions at the forthcoming Redemption Facility by
evaluating the latest shareholder analysis prepared by the investment manager as at 31 January
2025 for changes to shareholder types, comparing to actual redemptions levels for the redemption
events on 31 December 2021 and 2023, and assessing the maximum amount of redemption that
would have to occur to reduce the net asset value (NAV) to below an acceptable level;
• evaluating the liquidity analysis prepared by the investment manager and the investments held at year
and performing a review of trading volumes for all investments held by the Company and ICG Q
Limited and for any investments that were not traded daily, performed a free float analysis;
• assessing the ability of the Company to meet its short-term obligations based on its ongoing charges
ratio; and
• assessing the relevant going concern disclosures in the financial statements.
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
51
4. Conclusions relating to going concern (continued)
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 a period of at least twelve months from when the financial statements are
authorised for issue.
In relation to the reporting on how the Company has 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.
5. Key audit matter
Key audit matters are those matters that, in our professional judgement, 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.
This matter was addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
5.1. Valuation of the Company’s investment in its subsidiary and valuation of directly held
investments
Key audit matter
description
The Company holds investments in securities listed on Indian Stock Exchanges
with fair value of £65,924,000 as at 31 December 2024 (2023: £34,947,000), as
well as investment in its subsidiary, ICG Q Limited (ICG Q.) with fair value of
£105,376,000 as at 31 December 2024 (2023: £134,701,000). Investments are the
most significant balance on the Statement of Financial Position. Errors or
deliberate manipulation of valuations to report favourable key performance
indicators could result in a material misstatement to the financial statements.
The fair value of investment the Company holds in its subsidiary, is determined by
its Net Asset Value (NAV) at year end. The majority of ICG Q’s NAV comprises its
listed investments and as a result there is risk that if these are materially
misstated, the investment balance recorded in the Company’s financial statements
will be misstated.
Details of the investments are disclosed in notes 5 and 9 and the accounting
policies relating to them are disclosed in note 1.
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
52
How the scope of our
audit responded to the
key audit matter
In order to test the valuation of the Company’s investments in its subsidiary and
valuation of directly held investments as at 31 December 2024 we performed the
following procedures:
• Obtained an understanding of and tested the relevant controls relating to the
valuation of investments, including controls adopted by the Company’s
administrator;
• Agreed the unit prices of all investments in the Company’s subsidiary and
directly held investments to independent pricing sources;
• Examined trading volumes for all investments held by the Company and ICG
Q and for any investments that were not traded daily and performed further
analysis to assess whether these investments were sufficiently liquid to be
classified as a Level 1 investment; and
• Recalculated the NAV of ICG Q through reconciling the investment holdings,
the cash holdings and liabilities as at 31 December 2024 to the closing
balance of ICG Q recorded in the Company’s financial statements.
Key observations
We concluded that the valuation of investments in the subsidiary and valuation of
directly held investments was appropriate.
6. Our application of materiality
6.1. Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it
probable that the economic decisions of a reasonably knowledgeable person would be changed or
influenced. We use materiality both in planning the scope of our audit work and in evaluating the results
of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole
as follows:
Materiality
£1,793,500 (2023: £1,735,000)
Basis for
determining
materiality
1% of Net Assets, which is consistent with the prior year.
Rationale for
the benchmark
applied
Net Assets is the key balance considered by the users of the financial statements
which is consistent with the market approach for such entities.
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
53
6.2. Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in
aggregate, uncorrected and undetected misstatements exceed the materiality for the financial statements
as a whole. Performance materiality was set at 70% of materiality for the 2024 audit (2023: 70%). In
determining performance materiality, we considered the following factors:
• our risk assessment, including our assessment of the Company’s overall control environment;
• our past experience of the audit, which has indicated a low number of corrected and
uncorrected misstatements identified in prior periods; and
• potential impact as a result of the Redemption Facility that is due within the next 12 months.
6.3. Error reporting threshold
We agreed with the Audit & Risk Committee that we would report to the Committee all audit differences in
excess of £89,600 (2023: £86,700), as well as differences below that threshold that, in our view,
warranted reporting on qualitative grounds. We also report to the Audit & Risk Committee on disclosure
matters that we identified when assessing the overall presentation of the financial statements.
7. An overview of the scope of our audit
7.1. Scoping
Our audit was scoped by obtaining an understanding of the Company and its environment, including
internal controls, and assessing the risks of material misstatement.
Audit work to respond to the risks of material misstatement was performed directly by the audit
engagement team.
7.2. Our consideration of the control environment
The Company is administered by a third party Guernsey regulated service provider. As part of our audit,
we obtained an understanding of and tested the relevant controls around the valuation of investments and
NAV preparation process established at the service provider. We inspected monthly NAV checklists and
accompanying reports on a sample basis.
NAV £179.36m
Materiality £1.79m
Audit Committee
reporting threshold
£0.09m
NAV Materiality
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
54
7.3 Our consideration of climate-related risks
The Company, through the investment manager has considered climate related risks from their operations.
The Company’s climate related risks arise from companies they invest in. As explained in the Strategic
Report on page 5 to 30 of the financial statements, the investment advisor has developed a scoring model
in which companies they invest in are tracked for their climate risk processes and disclosures. This process
is consistent with our understanding of the Company’s operations. With the involvement of our ESG
specialists, we used our knowledge of the Company to evaluate management’s assessment. We also read
the annual report to consider whether the disclosures in relation to climate change made in the other
information within the annual report are materially consistent with the financial statements and our
knowledge obtained in our audit.
8. 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, 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 this other
information, we are required to report that fact.
We have nothing to report in this regard.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, 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.
10. 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 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
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
55
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.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s
website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
11. Extent to which 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 material misstatements in respect of
irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,
including fraud is detailed below.
11.1. Identifying and assessing potential risks related to irregularities
In identifying and assessing risks of material misstatement in respect of irregularities, including fraud and
non-compliance with laws and regulations, we considered the following:
• the nature of the industry and sector, control environment and business performance including the
design of the Company’s remuneration policies, key drivers for directors’ remuneration, bonus
levels and performance targets;
• results of our enquiries of management, the directors and the Audit & Risk Committee about their
own identification and assessment of the risks of irregularities, including those that are specific to
the Company’s sector;
• any matters we identified having obtained and reviewed the Company’s documentation of their
policies and procedures relating to:
o identifying, evaluating and complying with laws and regulations and whether they were aware
of any instances of non-compliance;
o detecting and responding to the risks of fraud and whether they have knowledge of any
actual, suspected or alleged fraud;
o the internal controls established to mitigate risks of fraud or non-compliance with laws and
regulations;
• the matters discussed among the audit engagement team and relevant internal specialists,
including IT specialists regarding how and where fraud might occur in the financial statements
and any potential indicators of fraud.
As a result of these procedures, we considered the opportunities and incentives that may exist within the
organisation for fraud and identified the greatest potential for fraud in the following area:
• Valuation of the Company’s investment in its subsidiary and valuation of directly held
investments.
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
56
In common with all audits under ISAs (UK), we are also required to perform specific procedures to
respond to the risk of management override.
We also obtained an understanding of the legal and regulatory framework that the Company operates in,
focusing on provisions of those laws and regulations that had a direct effect on the determination of
material amounts and disclosures in the financial statements. The key laws and regulations we
considered in this context included the Companies (Guernsey) Law, 2008 the UK Listing Rules and
relevant tax legislation.
In addition, we considered provisions of other laws and regulations that do not have a direct effect on the
financial statements but compliance with which may be fundamental to the Company’s ability to operate or
to avoid a material penalty.
11.2. Audit response to risks identified
As a result of performing the above, we identified valuation of the Company’s investments in its subsidiary
and valuation of directly held investments as a key audit matter related to the potential risk of fraud. The
key audit matter section of our report explains the matter in more detail and also describes the specific
procedures we performed in response to the key audit matter.
In addition to the above, our procedures to respond to risks identified included the following:
• reviewing the financial statement disclosures and testing to supporting documentation to assess
compliance with provisions of relevant laws and regulations described as having a direct effect on
the financial statements;
• enquiring of management and the Audit & Risk Committee concerning actual and potential
litigation and claims;
• performing analytical procedures to identify any unusual or unexpected relationships that may
indicate risks of material misstatement due to fraud;
• reading minutes of meetings of the board and the Audit & Risk Committee and reviewing
correspondence with the Guernsey Financial Services Commission; and
• in addressing the risk of fraud through management override of controls, testing the
appropriateness of journal entries and other adjustments; assessing whether the judgements
made in making accounting estimates are indicative of a potential bias; and evaluating the
business rationale of any significant transactions that are unusual or outside the normal course of
business.
We also communicated relevant identified laws and regulations and potential fraud risks to all
engagement team members and remained alert to any indications of fraud or non-compliance with laws
and regulations throughout the audit.
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
57
Report on other legal and regulatory requirements
12. Corporate Governance Statement
The Listing Rules require us to review 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.
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 and our
knowledge obtained during the audit:
• the directors’ statement with regards to the appropriateness of adopting the going concern basis of
accounting and any material uncertainties identified set out on page 40;
• the 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 page 40;
• the directors' statement on fair, balanced and understandable set out on page 41;
• the board’s confirmation that it has carried out a robust assessment of the emerging and principal risks
set out on pages 27 to 29;
• the section of the annual report that describes the review of effectiveness of risk management and
internal control systems set out on page 26; and
• the section describing the work of the Audit & Risk Committee set out on page 45.
13. Matters on which we are required to report by exception
13.1. Adequacy of explanations received and accounting records
Under the Companies (Guernsey) Law, 2008 we are required to report to you if, in our opinion:
• we have not received all the information and explanations we require for our audit; or
• proper accounting records have not been kept by the Company; or
• the financial statements are not in agreement with the accounting records.
We have nothing to report in respect of these matters.
Independent Auditor’s report to the members of India Capital Growth Fund Limited
(continued)
58
14. Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Section 262 of the
Companies (Guernsey) Law, 2008. 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.
Stuart Crowley FCA
For and on behalf of Deloitte LLP
Recognised Auditor
St Peter Port, Guernsey
26 March 2025
Audited statement of comprehensive income
59
For the year ended 31 December 2024
2024
2023
Notes
Revenue
£000
Capital
£000
Total
£000
Total
£000
Revenue
£000
Capital
£000
Income
Dividend income
471
-
471
144
-
144
Foreign exchange loss
(531)
-
(531)
(386)
-
(386)
Net gain on financial
assets at fair value
through profit or loss
5
-
26,400
26,400
-
40,169
40,169
Management fees
11
1,464
1,464
-
-
-
Total income
1,404
26,400
27,804
(242)
40,169
39,927
Expenses
Management fees
11
(1,944)
-
(1,944)
-
-
-
Operating expenses
3
(706)
-
(706)
(538)
-
(538)
Transaction costs
(84)
-
(84)
(55)
-
(55)
Total expenses
(2,734)
-
(2,734)
(593)
-
(593)
Profit for the year
before taxation
(1,330)
26,400
25,070
(835)
40,169
39,334
Taxation
6
(93)
(1,537)
(1,630)
(30)
(696)
(726)
Total comprehensive
income for the year
(1,423)
24,863
23,440
(865)
39,473
38,608
Earnings per Ordinary
Share (pence)
4
27.04
40.01
Diluted earnings per
Ordinary Share
(pence)
4
27.04
40.01
The Total column of this statement represents the Company’s statement of comprehensive income,
prepared in accordance with IFRS as adopted by the UK. The supplementary revenue and capital columns
are both prepared under guidance published by the Association of Investment Companies, as disclosed in
the Basis of Preparation in Note 1.
The profit after tax is the “total comprehensive income” as defined by IAS 1. There is no other
comprehensive income as defined by IFRS Accounting Standards and all the items in the above statement
derive from continuing operations.
The notes on pages 63 to 78 form part of these audited financial statements
Audited statement of financial position
60
As at 31 December 2024
2024
2023
Notes
£000
£000
Non-current asset
Financial assets designated at fair value through
profit or loss
5
171,300
169,649
Current assets
Cash and cash equivalents
12
9,507
5,009
Other receivables and prepayments
1,337
191
10,844
5,200
Current liability
Payables and accruals
(277)
(254)
Net current assets
10,567
4,946
Non-current liability
Deferred taxation
6
(2,510)
(1,093)
Net assets
179,357
173,502
Equity
Share capital
8
858
963
Reserves
178,499
172,539
Total equity
179,357
173,502
Number of Ordinary Shares in issue
8
85,810,644
96,330,656
NAV per Ordinary Share (pence)
- Undiluted and diluted
209.01
180.11
The financial statements on pages 59 to 78 were approved and authorised for issue by the Board of
Directors on 26 March 2025 and signed on its behalf by: -
Lynne Duquemin Patrick Firth
The notes on pages 63 to 78 form part of these audited financial statements.
Audited statement of changes in equity
61
For the year ended 31 December 2024
Note
Share
Capital
£000
Capital
Reserve
£000
Revenue
Reserve
£000
Other
Distributable
Reserve
£000
Total
£000
Balance as at 1 January 2024
963
111,056
(10,524)
72,007
173,502
Gain on investments
-
24,863
-
-
24,863
Share issue
8
63
-
-
11,390
11,453
Share repurchase
8
(168)
-
-
(28,870)
(29,038)
Total comprehensive income for
the year
-
-
-
(1,423)
(1,423)
Balance as at 31 December
2024
858
135,919
(10,524)
53,104
179,357
For the year ended 31 December 2023
Note
Share
Capital
£000
Capital
Reserve
£000
Revenue
Reserve
£000
Other
Distributable
Reserve
£000
Total
£000
Balance as at 1 January 2023
965
71,583
(10,524)
73,155
135,179
Gain on investments
-
39,473
-
-
39,473
Share issue
8
-
-
-
-
-
Share repurchase
8
(2)
-
-
(283)
(285)
Total comprehensive income for
the year
-
-
-
(865)
(865)
Balance as at 31 December
2023
963
111,056
(10,524)
72,007
173,502
The notes on pages 63 to 78 form part of these audited financial statements.
Audited statement of cash flows
62
For the year ended 31 December 2024
2024
2023
Note
£000
£000
Cash flows from operating activities
Operating profit
25,070
39,334
Adjustments for:
Net gain on financial assets at fair value through profit or
loss
(26,400)
(40,169)
Foreign exchange loss
531
386
Dividend income
(471)
(144)
Increase in other receivables and prepayments
(1,146)
(33)
Increase in payables and accruals
23
40
Cash used in operations
(2,393)
(586)
Taxes paid
(213)
(30)
Net cash flows used in operating activities
(2,606)
(616)
Cash flows from investing activities
Dividend income
471
144
Acquisition of investments
5
(30,381)
(19,471)
Disposal of investments
5
55,130
24,977
Net cash flows generated from investing activities
25,220
5,650
Cash flows from financing activities
Issue of shares
11,453
-
Redemption of shares
(29,038)
(285)
Net cash flows used in financing activities
(17,585)
(285)
Net increase in cash and cash equivalents during the year
5,029
4,749
Cash and cash equivalents at the start of the year
5,009
646
Foreign exchange loss
(531)
(386)
Cash and cash equivalents at the end of the year
9,507
5,009
The notes on pages 63 to 78 form part of these audited financial statements.
Notes to the audited financial statements
63
For the year ended 31 December 2024
1. Material accounting Policies
Basis of accounting
The financial statements have been prepared in accordance with IFRS Accounting Standards as adopted
by the UK and interpretations adopted by the International Accounting Standards Board (“IASB”), and the
Companies (Guernsey) Law, 2008 (Amendment) Ordinance, 2023. The Company’s Guernsey registration
number is 1030287.
Basis of preparation
The financial statements for the year ended 31 December 2024 have been prepared under the historical
cost convention adjusted to take account of the revaluation of the Company’s investments to fair value.
Where presentational guidance set out in the Statement of Recommended Practice (SORP) for Investment
Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies (AIC) in
November 2014, and subsequently revised in November 2019, is consistent with the requirements of IFRS
Accounting Standards, the Directors have sought to prepare the financial statements on a basis compliant
with the recommendations of the SORP, as applicable for a Guernsey incorporated company. In particular,
supplementary information which analyses the statement of comprehensive income between items of a
revenue and capital nature has been presented alongside the statement of comprehensive income,
including the split between revenue and capital for the comparative period for the first time, in line with
industry practice.
Going concern
The Board made an assessment of the Company’s ability to continue as a going concern for the twelve
months from the date of approval of these financial statements taking into account all available information
about the future including the liquidity of the investment portfolio held both by the Company and its
subsidiary, ICG Q Limited (77.8% of the portfolio can be liquidated within 5 days); the performance of the
investment portfolio; the overall size of the Company and its impact on the Ongoing Charges of the
Company (the NAV of the Company exceeded £100m throughout the year); the level of operating expenses
covered by highly liquid investments held in the portfolio (operating expenses are 50 times covered by highly
liquid investments); and the length of time to remit funds from India to Mauritius and Guernsey to settle
ongoing expenses (no more than 10 working days to have investments liquidated and sterling funds in
Guernsey).
Given the Company’s previous performance, the Directors proposed a continuation ordinary resolution at
the Extraordinary General Meeting held on 12 June 2020, at which the Shareholders approved that the
Company continue as currently constituted and introduce a Redemption Facility which gives the ordinary
shareholders the ability to redeem part or all of their shareholding at a Redemption Point every two years.
The first Redemption Point was on 31 December 2021 when valid redemption requests were received in
respect of ordinary shares which were subsequently redeemed under the Redemption Facility in
accordance with the announced timetable.
The second Redemption Point was on 31 December 2023 when valid redemption requests were received
in respect of 15,159,876 ordinary shares (15.7% of the then issued share capital) which were subsequently
redeemed under the Redemption Facility at a total cost of £26.2m in accordance with the announced
redemption price on 8 January 2024. During 2024, to satisfy demand in the market, the Company issued
over 5.8m shares from Treasury at a premium to NAV raising over £10.7m in new capital, and bought back
1.6m shares at a significant discount to NAV. Further buybacks were made subsequent to the year end. As
at 28 February 2025 the Company’s NAV was £144.8m.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
64
1. Material accounting Policies (continued)
Going concern (continued)
The next date at which shareholders will be able to request the redemption of some or all of the shares is
scheduled to take place on the last working day of November 2025, subject to shareholder approval at the
Company’s AGM on 5 June 2025, for shareholders on the register at 29 August 2025. Based upon the
performance of the Company to date, the results of the previous two redemptions, and the increase in the
proportion of retail shareholders seeking long term value growth on the share register since the last
Redemption Facility on 31 December 2023, the Board believes shareholder redemptions at the forthcoming
Redemption Facility on 31 December 2025 are likely to be at such a level not to impact the going concern
of the Company.
The Directors are satisfied that the Company has sufficient liquid resources to continue in business for the
next twelve months from the date of approval of these financial statements, therefore the financial
statements have been prepared on a going concern basis.
Impact of IFRS 10 ‘Consolidated Financial Statements’
As set out under IFRS 10, a parent entity that qualifies as an investment entity should not consolidate its
subsidiaries. The Company meets all the following criteria to qualify as an investment entity: -
(i) Obtaining funds from one or more investors for the purpose of providing those investors with
investment management services - the Board of Directors of the Company has delegated this
function to its investment manager, Ocean Dial Asset Management Limited;
(ii) Commits to its investors that its business purpose is to invest funds solely for returns from capital
appreciation, investment income or both - funds are invested in ICG Q Limited for the sole purpose
of achieving capital appreciation via further placements in Indian listed securities; and
(iii) Measures and evaluates the performance of substantially all of its investments on a fair value basis
- on a monthly basis, the Company’s investment in ICG Q Limited is revalued at the prevailing NAV
at the corresponding valuation date.
The IFRS 10 Investment Entity Exemption requires investment entities to fair value all subsidiaries that are
themselves investment entities. As the subsidiary meets the criteria of an investment entity, it has not been
consolidated. On the basis of the above, these financial statements represent the standalone figures of the
Company.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Expenses
Expenses are accounted for on an accrual basis. Other expenses, including management fees, are
allocated to the revenue column of the statement of profit or loss and other comprehensive income.
Taxation
Full provision is made in the statement of profit or loss and other comprehensive income at the relevant rate
for any taxation payable in respect of the results for the year. Taxation related to investments is disclosed
under ‘Capital’ and all other taxes are disclosed under ‘Revenue’.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
65
1. Material accounting Policies (continued)
Deferred taxation
Deferred taxation is recognised in respect of all temporary differences at the Statement of Financial Position
date, where transactions or events that result in an obligation to pay more tax in the future or right to pay
less tax in the future have occurred at the Statement of Financial Position date. This is subject to deferred
taxation assets only being recognised if it is considered more likely than not that there will be suitable profits
from which the future reversal of the temporary differences can be deducted. Deferred taxation assets and
liabilities are measured at the rates applicable to the legal jurisdictions in which they arise, using enacted
taxation rates that are expected to apply at the date the deferred taxation position is unwound.
Financial instruments
The Company’s investment in ICG Q Limited is designated at Fair Value through Profit or Loss (FVTPL) as
the Company meets the definition of an investment entity under IFRS 10. It is initially recognised at fair
value, being the cost incurred at acquisition. Transaction costs are expensed in the statement of
comprehensive income. Gains and losses arising from changes in fair value are presented in the statement
of comprehensive income in the period in which they arise and are presented in the Capital column of the
Statement of Comprehensive Income.
The investment is designated at FVTPL at inception because it is managed, and its performance evaluated
on a fair value basis in accordance with the Company’s investment strategy as documented in the
Admission Document and information thereon is evaluated by the management of the Company on a fair
value basis.
The basis of the fair value of the investment in the underlying subsidiary, ICG Q Limited, is its NAV. ICG Q
Limited’s investments are designated at FVTPL, fair value is determined by reference to the market closing
price ruling at the balance sheet date, or if this is not available, the latest closing price from the Investment
Manager.
Financial assets
Portfolio investments held by the Company are stated at the mid-market price quoted on the Indian Stock
Exchanges. Purchases and sales are recognised on the trade date - the date on which the Company
commits to purchase or sell the investment. Realised gains and losses are calculated with reference to book
cost on a FIFO (First in First out) basis.
The financial asset is derecognised when the rights to receive cash flows from the investment have expired
or the Company has transferred substantially all risks and rewards of ownership.
Impairment of financial assets
The Company holds only cash and cash equivalents with reputable institutions at amortised cost and, as
such, has chosen to apply an approach similar to the simplified approach for expected credit losses (ECL)
under IFRS 9. Therefore, the Company does not track changes in credit risk, but instead, recognises a loss
allowance based on lifetime ECLs at each reporting date. The Company’s approach to ECLs reflects a
probability-weighted outcome, the time value of money and reasonable and supportable information that is
available without undue cost or effort at the reporting date about past events, current conditions and
forecasts of future economic conditions.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
66
1. Material accounting Policies (continued)
Receivables and payables
Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted on
an active market. These are initially recognised at fair value plus transaction costs that are directly
attributable to the acquisition. Such financial assets are subsequently measured at amortised cost using
the effective interest rate method (EIR), less impairment, such impairment to be determined using the
simplified expected credit losses approach in accordance with IFRS 9. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included in profit or loss. The losses arising from impairment are recognised
in profit or loss.
Other financial liabilities include all financial liabilities, other than those classified as at FVTPL, are initially
measured at fair value plus transaction costs. The Company includes in this category short-term payables.
Foreign currency translation
The Company’s shares are denominated in Sterling (£) and the majority of its expenses are incurred in
Sterling. Accordingly, the Board has determined that the functional currency is Sterling. Sterling is also the
presentational currency of the financial statements.
Monetary foreign currency assets and liabilities are translated into Sterling at the rate of exchange ruling at
the statement of financial position date. Investment transactions and income and expenditure items are
translated at the rate of exchange ruling at the date of the transactions. Gains and losses on foreign
exchange are included in the statement of comprehensive income.
Cash and cash equivalents
Cash consists of Bank current accounts. Cash equivalents are short-term highly liquid investments that are
readily convertible into known amounts of cash and which are subject to insignificant changes in value.
Share capital
The share capital of the Company consists of Ordinary Shares which have all the features and have met all
the conditions for classification as equity instruments under IAS 32 (amended) and have been classified as
such in the financial statements.
Treasury shares are equity instruments which are created when the Company reacquires its own ordinary
shares. Treasury shares are recognised at the consideration paid, including any attributable transaction
costs net of income taxes. Where such shares are subsequently sold or reissued, any consideration
received, net of transaction costs, is included in the shareholders’ equity. No gain or loss is recognised on
the purchase, sale, issue or cancellation of the Company’s own ordinary shares.
Changes in material accounting policies
New standards, amendments and interpretations adopted during the year
There have been amendments and interpretations that have become effective for the current year. The
Company has adopted the following new and amended IFRS Accounting Standards:
Classification of liabilities as current or non-current with covenants (Amendments to IAS 1)
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
67
1. Material accounting Policies (continued)
Changes in material accounting policies (continued)
Under existing IAS 1 requirements, companies classify a liability as current when they do not have an
unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting
period. As part of its amendments, the IASB has removed the requirement for a right to be unconditional
and instead, now requires that a right to defer settlement must have substance and exist at the end of the
reporting period.
This right may be subject to a company complying with conditions (covenants) specified in a loan
arrangement. Additional disclosure is also required for non-current liabilities subject to future covenants.
The amendments also clarify how an entity classifies a liability that can be settled in its own shares.
The amendments apply retrospectively for annual reporting periods beginning on or after 1 January 2024,
with early application permitted.
The above amendment is not expected to have a material impact on the Company’s financial statements.
New and revised standards
Standards and interpretations published, but not yet effective for the annual period beginning on 1 January
2024, which may be relevant to the Company are set out below. The Company does not plan to adopt these
standards early. These will be adopted in the period that they become mandatory unless otherwise
indicated:
• Amendments to IFRS 9 and IFRS 7: Classification and Measurements of Financial instruments
(applicable for annual periods beginning on or after 1 January 2026)
The above amendments are not expected to have a material impact on the Company’s financial statements.
2. Critical accounting judgements and key sources of estimation uncertainty
Directors make judgements, estimates and assumptions that affect the application of policies and the
reported amounts of assets and liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of making judgements about the carrying value
of assets and liabilities that are not readily apparent from other sources. The Company makes estimates
and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom
equate to the related actual results.
Critical accounting judgements
IFRS 10 defines an investment entity and requires a reporting entity that meets the definition of an
investment entity not to consolidate its subsidiaries, but instead to measure its subsidiaries at FVTPL in its
financial statements.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
68
Critical accounting judgements
An investment entity is defined as an entity that:
• Obtains funds from one or more investors for the purpose of providing them with professional
investment management services.
• Commits to its investor(s) that its business purpose is to invest funds solely for returns from capital
appreciation, investment income, or both.
• Measures and evaluates performance of substantially all of its investments on a fair value basis.
The board has concluded that the Company is an investment entity as it satisfies more than one of the
typical characteristics of an investment entity as noted above.
Key sources of estimation uncertainty
The Company invests in listed shares to which no estimation is required to determine the closing values.
The underlying investments in ICG Q are all listed securities. All other components of ICG Q’s NAV pertain
to instruments which do not require estimation. Details of the valuation methodologies and assumptions
applied in determining the fair value of the Company’s investments and sensitivities to those assumptions,
are disclosed in Note 9.
3. Operating expenses
2024
2023
£000
£000
Administration and secretarial fees
96
84
Audit fees
69
52
Broker fee
43
23
D&O insurance
8
8
Directors’ fees and expenses
144
126
General expenses
54
60
Marketing expenses
81
88
Other professional fees
132
45
Registrar fee
16
7
Regulatory fees
40
45
Other expenses
23
-
706
538
4. Earnings per share
Earnings per Ordinary Share and the fully diluted earnings per share are calculated on the profit for the year
of £23,440,000 (2023: profit of £38,608,000) divided by the weighted average number of Ordinary Shares
of 86,682,493 (2023: 96,487,421).
5. Financial assets at fair value through profit or loss
Financial assets at FVTPL consists of investments in securities listed on Indian Stock Exchanges, namely
the National Stock Exchange or the Bombay Stock Exchange, as well as investments in the wholly owned
subsidiary ICG Q Limited. A summary of movements is shown on the following page.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
69
5. Financial assets at fair value through profit or loss (continued)
2024
2023
£000
£000
Fair value at beginning of year
169,649
134,986
Disposal of investments
(55,130)
(24,977)
Acquisition of investments
30,381
19,471
Realised gains on disposal of investments
41,306
17,181
Unrealised (losses)/gains on revaluation
(14,906)
22,988
Fair value at end of year
171,300
169,649
The net realised and unrealised gains above totalling £26,400,000 (2023: £40,169,000) on financial assets
at FVTPL comprise of gains on the Company’s holding in ICG Q Limited to the extent of £19,017,000 (2023:
gains of £35,412,000) and gains of £7,383,000 (2023: gains of £4,757,000) arising from investments in
securities listed on Indian stock markets. The movement arising from the Company’s holding in ICG Q
Limited is driven by the following amounts within the financial statements of ICG Q Limited, as set out below.
2024
2023
£000
£000
Dividend income
599
959
Unrealised (loss)/gain on financial assets at FVTPL
(3,923)
24,310
Foreign exchange gain/(loss)
285
(2,612)
Realised gain on disposal of investments
28,188
19,035
Investment management fees
(1,464)
(1,702)
Other operating expenses
(98)
(91)
Withholding tax on dividend income
(125)
(197)
Tax refund
75
-
Other taxes
(4,416)
(4,208)
Transaction costs
(104)
(82)
Net profit of ICG Q Limited
19,017
35,412
The equity investment represents ICG Q Limited, the Company’s wholly owned subsidiary. ICG Q Limited
is incorporated and has its principal place of business in the Republic of Mauritius. The Company holds
Participating Shares in ICG Q Limited, which confer voting rights to the Company, hence controlling
interests.
6. Taxation
Guernsey
India Capital Growth Fund Limited is exempt from taxation in Guernsey on non-Guernsey sourced income.
The Company is exempt under The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 (as
amended) and paid the annual exemption fee of £1,200. For the year ended 31 December 2024, the
Company had a tax liability of £Nil (2023: £Nil).
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
70
6. Taxation (continued)
India
Capital gains arising from equity investments in Indian companies are subject to Indian Capital Gains Tax
Regulations. Consequently, with effect from July 2024, the Company and its subsidiary, ICG Q Limited,
have been subject to both short and long-term capital gains tax in India on the growth in value of their
investment portfolios at the rate of 20% and 12.5% (2023: 15% and 10%) respectively. Although this
additional tax only becomes payable at the point at which the underlying investments are sold and profits
crystallised, the Company and its subsidiary must accrue for this additional cost as a deferred taxation
liability, notwithstanding that they seek to minimise the impact of these taxation rates applicable to capital
gains by maintaining its investment strategy of investing in a concentrated portfolio for long-term capital
appreciation. An amount of £120,000 was paid during 2024. The Indian Capital Gains Tax deferred tax
liability is determined at each month end by the Company’s India Tax Agent based upon the period each
investment has been held and the Indian Capital Gains Tax Regulations in force at the time of that
assessment. The deferred taxation liability relating to Indian capital gains tax for the Company was
£2,510,000 at 31 December 2024 (2023: £1,093,000) and for its subsidiary was £8,859,308 at 31 December
2024 (2023: £7,833,000).
Dividend withholding tax
The Company and its subsidiary are also subject to withholding tax on their dividend income in India. The
withholding tax charge for the Company for the year ended 31 December 2024 was £93,000 (2023:
£30,000) and for its subsidiary was £125,000 (2023: £197,000).
Minimum top-up tax
The Company has adopted mandatory exception to the International Tax Reform – Pillar Two Model Rules
(Amendments to IAS 12) upon their release on 23 May 2023. The amendments provide a temporary
mandatory exception from deferred tax accounting for the top-up tax, which is effective immediately, and
require new disclosures about the Pillar Two exposure. However, because no new legislation to implement
the top-up tax was enacted or substantively enacted in India hence no related deferred tax was recognised
at that date, the retrospective application has no impact on the Company’s financial statements. The
adoption of Pillar Two by Guernsey effective 1 January 2025 does not have an impact on the Company.
7. Segmental information
The Board has considered the provisions of IFRS 8 in relation to segmental reporting and concluded that
the Company’s activities are from a single segment under the standard. From a geographical perspective,
the Company’s activities are focused in a single area – India. The subsidiary, ICG Q Limited, focuses its
investment activities in listed securities in India. Additional disclosures have been provided in this Annual
Report as elaborated in the Directors’ Report to disclose the underlying information.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
71
8. Share capital
Authorised Share Capital
Unlimited number of Ordinary Shares of £0.01 each
Issued and Paid Share Capital
Number of shares
Share Capital
£000
Ordinary shares of £0.01 each:
At 31 December 2023
96,330,656
963
Shares issued from Treasury
5,828,500
58
Shares bought back to Treasury
(1,613,512)
(16)
Redemption Shares redeemed
(15,159,876)
(151)
Redemption Shares sold
424,876
4
At 31 December 2024
85,810,644
858
The Ordinary Shares of the Company carry the following rights:
(i) The holders of Ordinary Shares have the right to receive in proportion to their holdings all the revenue
profits of the Company (including accumulated revenue reserves) attributable to the Ordinary Shares
as a class available for distribution and determined to be distributed by way of interim and/or final
dividend at such times as the Directors may determine.
(ii) On a winding-up of the Company, after paying all the debts attributable to and satisfying all the liabilities
of the Company, holders of the Ordinary Shares shall be entitled to receive by way of capital any surplus
assets of the Company attributable to the Ordinary Shares as a class in proportion to their holdings.
(iii) Subject to any special rights or restrictions for the time being attached to any class of shares, on a show
of hands every member present in person has one vote. Upon a poll every member present in person
or by proxy has one vote for each share held by him.
Treasury shares
There was a total of 5,828,500 ordinary shares issued during the year ended 31 December 2024. These
shares were transferred from the Treasury Shares account to the Issued Share Capital Account and were
issued at a premium to the NAV per share, as per below:
Date
Number of
shares
Par Value (£)
Discount/(Premium)
on day of buyback
Sale Price
(£)
Value of Sale
(£)
29 January 2024
500,000
0.01
(0.5%)
1.816
908,750
30 January 2024
350,000
0.01
(1.4%)
1.820
637,000
1 February 2024
340,000
0.01
(0.6%)
1.850
629,000
2 February 2024
700,000
0.01
(0.8%)
1.840
1,288,000
5 February 2024
525,000
0.01
(0.5%)
1.851
971,775
6 February 2024
425,000
0.01
(0.6%)
1.858
789,438
7 February 2024
335,000
0.01
(0.6%)
1.860
623,100
8 February 2024
210,000
0.01
(0.6%)
1.839
386,190
9 February 2024
210,000
0.01
(0.7%)
1.835
385,350
12 February 2024
285,000
0.01
(0.6%)
1.795
511,575
13 February 2024
115,000
0.01
(0.8%)
1.805
207,575
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
72
8. Share capital (continued)
Treasury shares (continued)
Date
Number of
shares
Par Value (£)
Discount/(Premium)
on day of buyback
Sale Price
(£)
Value of Sale
(£)
14 February 2024
90,000
0.01
(0.6%)
1.818
163,620
16 February 2024
150,000
0.01
(0.5%)
1.866
279,900
21 February 2024
70,000
0.01
(0.6%)
1.855
129,850
22 February 2024
75,000
0.01
(0.7%)
1.855
139,125
26 February 2024
75,000
0.01
(0.6%)
1.868
140,063
27 February 2024
100,000
0.01
(0.6%)
1.873
187,250
28 February 2024
258,000
0.01
(0.6%)
1.838
474,075
1 March 2024
165,000
0.01
(0.5%)
1.878
309,788
4 March 2024
285,500
0.01
(0.5%)
1.865
532,458
5 March 2024
100,000
0.01
(0.6%)
1.843
184,250
6 March 2024
370,000
0.01
(0.7%)
1.820
673,400
12 March 2024
95,000
0.01
(0.7%)
1.760
167,200
5,828,500
10,718,730
Shares bought back to Treasury
There was a total of 1,613,512 ordinary shares bought back during the year ended 31 December 2024.
These shares were transferred from Issued Share Capital Account to Treasury Shares Account and were
purchased at a discount to the NAV per share, as per below:
Date
Number of
shares
Par Value (£)
Discount/(Premium)
on day of buyback
Buy Back
Price (£)
Value of Buy
back (£)
20 March 2024
50,000
0.01
14.8%
1.460
73,000
21 March 2024
100,000
0.01
14.8%
1.450
145,000
4 April 2024
100,000
0.01
12.0%
1.614
161,400
5 April 2024
25,000
0.01
9.7%
1.650
41,250
9 April 2024
15,000
0.01
9.5%
1.650
24,750
11 April 2024
50,000
0.01
9.9%
1.639
81,945
12 April 2024
25,000
0.01
9.8%
1.640
41,000
16 April 2024
20,447
0.01
9.5%
1.660
33,942
22 April 2024
30,770
0.01
9.3%
1.647
50,666
23 April 2024
50,000
0.01
10.7%
1.630
81,500
26 April 2024
40,000
0.01
9.6%
1.675
67,000
30 April 2024
12,663
0.01
9.6%
1.680
21,274
31 May 2024
40,000
0.01
8.1%
1.640
65,600
13 June 2024
14,404
0.01
8.3%
1.720
24,775
24 June 2024
19,000
0.01
9.0%
1.780
33,820
25 June 2024
20,000
0.01
7.7%
1.808
36,150
3 July 2024
20,000
0.01
9.8%
1.818
36,360
4 July 2024
50,000
0.01
9.3%
1.828
91,400
5 July 2024
20,000
0.01
9.1%
1.850
37,000
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
73
8. Share capital (continued)
Shares bought back to Treasury (continued)
Date
Number of
shares
Par Value (£)
Discount/(Premium)
on day of buyback
Buy Back
Price (£)
Value of Buy
back (£)
9 July 2024
25,000
0.01
8.6%
1.856
46,400
11 July 2024
20,000
0.01
8.6%
1.850
37,000
15 July 2024
25,000
0.01
8.1%
1.860
46,500
18 July 2024
30,000
0.01
8.3%
1.839
55,170
30 July 2024
13,000
0.01
9.4%
1.861
24,193
30 July 2024
20,000
0.01
9.3%
1.840
36,800
5 August 2024
7,000
0.01
8.4%
1.890
13,230
30 August 2024
21,000
0.01
8.3%
1.870
39,270
4 September 2024
50,000
0.01
8.6%
1.885
94,250
10 September 2024
50,000
0.01
9.0%
1.860
93,000
16 September 2024
38,000
0.01
9.9%
1.870
71,041
19 September 2024
20,000
0.01
8.2%
1.890
37,800
27 September 2024
30,000
0.01
9.4%
1.865
55,950
3 October 2024
14,000
0.01
9.0%
1.870
26,180
14 October 2024
50,000
0.01
11.4%
1.869
93,450
14 October 2024
50,000
0.01
11.2%
1.850
92,475
16 October 2024
50,000
0.01
12.2%
1.878
93,900
17 October 2024
50,000
0.01
11.5%
1.900
95,000
22 October 2024
50,000
0.01
9.8%
1.855
92,760
30 October 2024
50,000
0.01
11.1%
1.800
90,000
6 November 2024
23,000
0.01
11.8%
1.820
41,860
11 November 2024
50,000
0.01
10.7%
1.840
92,000
15 November 2024
6,000
0.01
10.9%
1.800
10,800
20 November 2024
50,000
0.01
11.8%
1.815
90,725
22 November 2024
50,000
0.01
11.7%
1.820
91,000
27 November 2024
49,228
0.01
11.2%
1.889
93,002
20 December 2024
20,000
0.01
9.1%
1.950
39,000
1,613,512
2,840,588
Redemption Shares redeemed to Treasury
In accordance with the Company’s Redemption Facility as at 31 December 2023, on 16 January 2024 the
Company redeemed 15,159,876 ordinary shares (Redemption Shares) at 180.11p per share for a total cost
of £26,197,327. At the same time the Company sold 424,876 Redemption Shares at 180.11p per share
realising total proceeds of £734,215 and transferred the remaining 14,735,000 Redemption Shares to
Treasury Share Account.
Other distributable reserves
Other distributable reserves includes all other gains and losses during the year except for the realised and
unrealised gains and losses on the investments measured at FVTPL. Other distributable reserves also
includes foreign exchange gains and losses made on ordinary transactions, dividend income and general
expenses, as well as taxation.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
74
9. Fair value of financial instruments
The following tables show financial instruments recognised at fair value, analysed between those whose
fair value is based on:
• Quoted prices in active markets for identical assets or liabilities (Level 1);
• Those involving inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
• Those with inputs for the asset or liability that are not based on observable market data (unobservable
inputs) (Level 3).
The analysis as at 31 December 2024 is as follows:
LEVEL 1
LEVEL 2
LEVEL 3
TOTAL
£000
£000
£000
£000
Listed securities
65,924
-
-
65,924
Unlisted securities
-
105,376
-
105,376
Total
65,924
105,376
-
171,300
The analysis as at 31 December 2023 is as follows:
LEVEL 1
LEVEL 2
LEVEL 3
TOTAL
£000
£000
£000
£000
Listed securities
34,948
-
-
34,948
Unlisted securities
-
134,701
-
134,701
Total
34,948
134,701
-
169,649
The Company’s investment in ICG Q Limited, the Company’s wholly owned subsidiary is priced based on
the subsidiary’s NAV as calculated as at the reporting date. The Company has the ability to redeem its
investment in ICG Q Limited at the NAV at the measurement date therefore this is categorised as level 2.
The classification within the hierarchy does not necessarily correspond to the Investment Manager’s
perceived risk of the investment, nor the level of the investments held within the subsidiary. All the
underlying investments of ICG Q Limited are categorised as level 1 at 31 December 2024 and 2023. The
year-end fair value of those investments, together with cash held in ICG Q Limited, comprise all but an
insignificant proportion of the NAV of the subsidiary.
There has been no movement between levels for the year ended 31 December 2024. There were no
changes in valuation techniques during the year ended 31 December 2024.
10. Financial instruments and risk profile
The primary objective of the Company is to provide long-term capital appreciation by investing
predominantly in companies based in India. The investment policy permits making investments in a range
of equity and equity linked securities of such companies. The portfolio of investments comprises of listed
Indian companies, predominantly mid cap and small cap. The specific risks arising from exposure to these
instruments and the Investment Manager’s policies for managing these risks, which have been applied
throughout the period, are summarised below:
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
75
10. Financial instruments and risk profile (continued)
Capital management
The Company is a closed-ended investment company and thus has fixed capital for investment. It has no
legal capital regulatory requirement. The Board has the power to purchase shares for cancellation thus
reducing capital and the Board considers on a regular basis whether it is appropriate to exercise such
powers. In the year ended 31 December 2024, the Board determined that it was inappropriate to exercise
such powers, although continuation of these powers will be sought at the Annual General Meeting.
The Board also considers from time to time whether it may be appropriate to raise new capital by a further
issue of shares. The raising of new capital would, however, be dependent on there being genuine market
demand (see note 8).
Environmental and Social (E&S) impact risk
E&S impact risk is a transverse risk that impacts most of our other risks: market risk, foreign currency risk,
credit risk, liquidity risk, operational non-financial risk, legal and regulatory risk, and reputation risk. Our
Investment Manager has developed a qualitative scoring model which measures climate and other
environmental impacts and the reporting thereof by the Company’s investment portfolio companies.
The Investment Manager considers all factors that may have a financial material impact on returns. Climate
change is a key factor. The related physical and transition risks are vast and are becoming increasingly
financially material for many investments. Not only in the obvious high-emitting sectors, such as energy,
utilities and transportation, but also along the supply chain, providers of finance and in those reliant on
agricultural outputs and water. It is important that the financial implications of material climate-change risks
are assessed across all asset classes, including real assets, and make portfolios more resilient to climate
risk. Comparable climate-related data is necessary to enable effective decision making and is something
the Investment Manager actively sources and incorporates into its process and scoring model. Regular
engagement with all investee companies allows the Investment Manager to better understand their
exposure and management of climate change risks and influence corporate behavior positively in relation
to climate risk management. There have been no financial material impacts as a result of E&S risk.
Market risk
Market price risk arises mainly from the uncertainty about future price of the financial instrument held by the
Company and its subsidiary, ICG Q Limited (the Group). It represents the potential loss the Group may
suffer through holding market positions in the face of price movements.
The Group’s investment portfolio is exposed to market price fluctuations, including the impact of inflation,
which are monitored by the Investment Manager in pursuit of the investment objectives and policies and in
adherence to the investment guidelines and the investment and borrowing powers set out in the Admission
Document. The Group’s investment portfolio is concentrated and, as at 31 December 2024, comprised
investment in 36 (2023: 35) companies. Thus, the Group has higher exposure to market risk in relation to
individual stocks than more broadly spread portfolios.
The Investment Manager has a team on the ground in India who keep abreast of the latest political
developments and economic forecasts that may impact the listed equities market in India and regularly
advise the Board thereof.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
76
10. Financial instruments and risk profile (continued)
The Group’s investment portfolio (refer to pages 16 to 18) consists predominantly of mid cap and small cap
listed Indian securities, and thus the effect of market movements is not closely correlated with the principal
market index, the BSE Sensex. The BSE Mid Cap Total Return Index provides a better (but not ideal)
indicator of the effect of market price risk on the portfolio. Assuming perfect correlation, the sensitivity of the
Group’s investment portfolio to market price risk can be approximated by applying the percentage of funds
invested (2024: 94.8%; 2023: 90.90%) to any movement in the BSE Mid Cap Total Return Index.
At 31 December 2024, with all other variables held constant, this approximation would produce a movement
in the net assets of the Group’s investment portfolio of £18,089,065 (2023: £16,590,731) for a 10% (2023:
10%) movement in the index which would impact the Company via a fair value movement of the same
magnitude in its holding in ICG Q Limited and its investments.
Foreign currency risk
Foreign currency risk arises mainly from the fair value or future cash flows of the financial instruments held
by the Group fluctuating because of changes in foreign exchange rates. The Group’s investment portfolio
consists of predominantly Rupee denominated investments but reporting, and in particular the reported
NAV, is denominated in Sterling. Any appreciation or depreciation in the Rupee would have an impact on
the performance of the Company. The underlying currency risk in relation to the Group’s investment portfolio
is the Rupee. The Group’s policy is not to hedge the Rupee exposure. The Group may enter into currency
hedging transactions but appropriate mechanisms on acceptable terms are not expected to be readily
available.
At 31 December 2024, if the Indian Rupee had strengthened or weakened by 10% (2023: 10%) against
Sterling with all other variables held constant, pre-tax profit for the period would have been £18,449,000
(2023: £17,761,359) higher or lower, respectively, mainly as a result of foreign exchange gains or losses
on translation of Indian Rupee denominated financial assets designated at FVTPL in ICG Q Limited, the
consequent impact on the fair value of the Company’s investment in ICG Q Limited and in the Company’s
investment portfolio.
Credit risk
Credit risk arises mainly from an issuer or counterparty being unable to meet a commitment that it has
entered into with the Company. Credit risk in relation to securities transactions awaiting settlement is
managed through the rules and procedures of the relevant stock exchanges. In particular settlements for
transactions in listed securities are affected by the custodian on a delivery against payment or receipt
against payment basis. Transactions in unlisted securities are affected against binding subscription
agreements.
The principal credit risks are in relation to cash held by the custodian. Kotak Mahindra Bank Limited (Kotak)
acts as the custodian to the Company. The aggregate exposure to Kotak at 31 December 2024 was
£3,127,763 (2023: £65,379).
Kotak acted as custodian of the Company’s assets during the period. The securities held by Kotak as
custodian are held in trust and are registered in the name of the Company. Kotak has a long-term credit
rating of AAA (2023: AAA) (CRISIL Ratings – a S&P company).
Interest rate risk
Interest rate risk represents the uncertainty of investment return due to changes in the market rates of
interest. The direct effect of movements in interest rates is not material as any surplus cash is predominantly
in Indian Rupees, and foreign investors are not permitted to earn interest on Rupee balances.
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
77
10. Financial instruments and risk profile (continued)
Liquidity risk
Liquidity risk arises mainly from the Group encountering difficulty in realising assets or otherwise raising
funds to meet financial commitments. As the trading volume on the Indian stock markets is lower than that
of more developed stock exchanges the Group may be invested in relatively illiquid securities. The Group
has no unlisted securities, and its focus is to invest predominantly in mid and small cap listed stocks.
However, there remain holdings where there is relatively little market liquidity, which may take time to
realise. The Directors do not believe that the market is inactive enough to warrant a discount for liquidity
risk on the Group’s investment portfolio. ICG Q Limited seeks to maintain sufficient cash to meet its working
capital requirements. The Directors do not believe it to be appropriate to adjust the fair value of the
Company’s investment in ICG Q Limited for liquidity risk, as it has the ability to affect a disposal of any
investment in ICG Q Limited’s investment portfolio at the prevailing market price and the distribution of
proceeds back to the Company should it so wish.
All financial liabilities are current and due on demand.
Taxation risk
Taxation risk arises mainly from the taxation of income and capital gains of ICG Q Limited and the Company
increasing as a result of changes in the tax regulations and practice in Guernsey, Mauritius and India. The
Company and ICG Q Limited are registered with the Securities and Exchange Board of India (SEBI) as a
foreign portfolio investor (FPI) with a Category I licence, and ICG Q Limited holds a Global Business Licence
in Mauritius and has obtained a Mauritian Tax Residence Certificate (TRC) which have been factors in
determining its resident status under the India-Mauritius Double Taxation Avoidance Agreement (DTAA)
and General Anti Avoidance Rules (GAAR) under the Income Tax Act 1961 (ITA).
However, with effect from April 2017, the DTAA was amended such that the advantages of investing in India
via Mauritius were removed and capital gains arising from investments in Indian companies are subject to
Indian Capital Gains Tax regulations. With effect from 22 July 2024 the short-term (investments held less
than 12 months) Indian CGT rate increased from 15% to 20% and the long-term Indian CGT rate increased
from 10% to 12.5%. Full deferred tax provision is made for Indian CGT applying to the investment portfolio.
The Group seeks to minimise the impact of these changes in the taxation rates applicable to its capital gains
by maintaining its investment strategy of investing in a concentrated portfolio for long-term capital
appreciation.
11. Related party transactions and material contracts
Parties are considered to be related if one party has the ability to control the other party or exercise
significant influence over the other party in making financial or operational decisions. The Directors are
responsible for the determination of the investment policy and have overall responsibility for the Company’s
activities. Directors’ fees are disclosed in the unaudited Directors’ remuneration report.
During the year 2024, the investment management fee was equivalent to 1.25 per cent per annum of the
lower of the Company’s market capitalisation or aggregate value of its assets less current liabilities,
calculated and payable monthly in arrears. The Investment Manager earned £1,944,000 in management
fees during the year ended 31 December 2024 (2023: £1,702,000) of which £181,000 was outstanding at
31 December 2024 (2023: £162,000).
From March 2024, the method of calculation for these fees has been updated. Investment management
fees receivable from ICG Q are calculated based on the NAV of ICG Q. Investment management fees
payable to Ocean Dial Asset Management Limited are based on the assets of ICGF. The calculation of
investment management fees payable to Ocean Dial Asset Management Limited remains unchanged
Notes to the audited financial statements (continued)
For the year ended 31 December 2024
78
11. Related party transactions and material contracts (continued)
Under the terms of the Administration Agreement, Apex Fund and Corporate Services (Guernsey) Limited
is entitled to a minimum annual fee of US$41,000 or a fee of 5 basis points of the NAV of the Company,
whichever is greater. The Administrator is also entitled to reimbursement of all out-of-pocket expenses
recoverable by way of a fixed disbursement charge of $50 per month excluding all international calls and
courier. The Administrator earned £96,000 for administration and secretarial services during the year ended
31 December 2024 (2023: £84,000) of which £24,000 was outstanding at 31 December 2024 (2023:
£23,000).
12. Cash and cash equivalents
Cash and cash equivalents are comprised of:
2024
2023
£000
£000
Cash at bank
5,307
5,009
Short-term investment
4,200
-
9,507
5,009
13. Contingent liabilities
The Directors are not aware of any contingent liabilities as at 31 December 2024 and at the date of
approving these financial statements.
14. Significant events
During the month of January 2024, 15,159,876 ordinary shares, equivalent to 15.7% of the shares in issue
as at 31 December 2023 (excluding treasury shares), were redeemed at 180.11p per Redemption Share.
These Redemption Shares were held in treasury following the redemption of shares paid in January 2024,
which resulted in a £26.2m reduction in the NAV of the Company.
15. Ultimate controlling party
In the opinion of the Directors of the Company, the Company has no ultimate controlling party.
16. Subsequent events
During the period from 31 December 2024 to the date of signing of these Financial Statements, no shares
have been issued from Treasury and 395,000 shares have been bought back into Treasury.
Following the transactions, the Company’s issued share capital comprises:
- 85,415,644 Ordinary Shares (excluding treasury shares)
- 27,086,529 Ordinary Shares held in treasury
- 112,502,173 Ordinary Shares (including treasury shares)
The Company’s NAV has fallen by 19.3% since the year-end and was £144.8m as of 28 February 2025.
The latest estimated NAV of £151.7m as of 25 March 2025 shows a rise of 4.8% during the month to date.
These movements are in line with wider market fluctuations.
There are no other material events since the end of the reporting period which would require disclosure or
adjustment to the financial statements for the year ended 31 December 2024.
Alternative performance measures
79
The Company uses the following Alternative Performance Measures (“APMs”). APMs do not have a
standard meaning prescribed by Generally Accepted Accounting Principles and therefore may not be
comparable to similar measures presented by other entities.
Premium or Discount – the share price of an Investment Company is derived from buyers and sellers trading
their shares on the stock market. This price is not identical to the NAV per share of the Company. If the
share price is lower than NAV per share, the shares are trading at a discount. This usually indicates that
there are more sellers of shares than buyers. The discount is shown as a percentage of the NAV per share.
Shares trading at a price above NAV per share are deemed to be at a premium.
2024
2023
pence
pence
NAV per share
(a)
209.01
180.11
Share price per share
(b)
192.50
173.00
(Discount) or Premium ((b-a)/a)
(c)
(7.9%)
(3.9%)
Ongoing Charges – are those expenses of a type which are likely to recur in the foreseeable future, whether
charged to capital or revenue, and which relate to the operation of the Investment Company, expressed as
a proportion of the average net assets of the Company over the reporting year. In accordance with AIC
guidance the costs of buying and selling investments and derivatives are excluded, as are interest costs,
taxation, non-recurring costs and the costs of buying back or issuing shares. Ongoing charges are based
on aggregate costs incurred in the year by both the Company and its Mauritian subsidiary, as being the best
estimate of future costs.
2024
2023
£000
£000
Management fee
1,944
1,702
Directors’ fees
133
126
Mauritian subsidiary operating expenses
97
91
Administration fee
84
74
Auditor’s fee
63
49
Other expenses
430
284
Ad-hoc non-recurring expenses
(91)
-
Total ongoing & recurring expenses
(a)
2,660
2,326
Average monthly net assets
(b)
168,647
148,384
Ongoing charges (a/b)
(c)
1.58%
1.57%
Alternative performance measures
80
Management and administration
Directors
Elisabeth Scott (Chair)
Patrick Firth
Lynne Duquemin
Nick Timberlake
Registered office
1 Royal Plaza
Royal Avenue
St. Peter Port
Guernsey GY1 2HL
Investment Manager
Ocean Dial Asset Management Limited
30 Coleman Street
London EC2R 5AL
Administrator and Secretary
Apex Fund and Corporate Services (Guernsey) Limited
1 Royal Plaza
Royal Avenue
St. Peter Port
Guernsey GY1 2HL
Custodian
Kotak Mahindra Bank Limited
3
rd
floor, 27 BKC
C-27 G Block
Bandra Kurla Complex, Bandra East
Mumbai 400051
India
Broker and Sponsor
Shore Capital Stockbrokers Limited
Cassini House
57-58 St. James’s Street
London SW1A 1LD
Registrar
Neville Registrars Limited
Neville House
Steelpark Road
Halesowen
Birmingham B62 8HD
Independent Auditor
Deloitte LLP
Regency Court
Glategny Esplanade
St. Peter Port
Guernsey GY1 3HW