REG - India CapitalGrwthFd - Annual Results for the year ended 31 December 2025
26/03/2026 07:00
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RNS Number : 1687Y India Capital Growth Fund Limited 26 March 2026
LEI: 213800TPOS9AM7INH846
INDIA CAPITAL GROWTH FUND LIMITED
Annual Results for the year ended 31 December 2025
26 March 2026, London - India Capital Growth Fund ("ICGF" or "the Company"),
the LSE premium listed investment company established to take advantage of
long-term investment opportunities in companies based in India, today reports
results for the year ended 31 December 2025.
Financial Highlights
2025 2024
Net Asset Value (NAV) per share total return -10.4% 16.0%
Share price total return -11.7% 11.3%
Share price discount to NAV (Discount) 9.2% 7.9%
Average Discount for the year 8.0% 7.7%
Per Ordinary Share
Net Asset Value (NAV) 187.29p 209.01p
Share price 170.00p 192.50p
FX impact
Indian Rupee / Sterling 121.02 107.46
· The NAV decreased by 10.4% in 2025 compared to the BSE Midcap TR
Index which decreased by 9.5%.
· The Board continued its strategy to manage the Company's share
price discount to NAV, which averaged 8.0% during 2025, by buying back
1,521,500 shares at a cost of £2.6m.
· Additionally in the 2025 Redemption Facility, a further
16,967,020 shares (20.1%) of shares in issue at 28 November 2025, were bought
back at a total net cost of £31.0m.
· The FX impact of a weakening Indian Rupee on the Sterling NAV was
a negative 12.6%.
· At an EGM on 25 March 2026, shareholders approved proposals to;
(i) replace the two year Redemption Facility with a five year
conditional performance related tender for up to 25% of the Company's issued
share capital; and
(ii) introduce an annual dividend to be paid semi-annually
which the Board expects to initially equate to approximately 2% of prevailing
NAV per share.
Elisabeth Scott, Chair of India Capital Growth Fund, said:
"After a poor 2025 for the Indian Stock Market, valuations of Indian stocks,
which had looked stretched a year ago, are now beginning to look more
reasonable. Indian GDP growth is likely to remain in the region of 6-7% for
the next few years and inflation is under control, although food price
inflation remains a risk. In the short term the war in the Middle East will
continue to create uncertainty, particularly with regard to energy supply
security, the price of energy and knock on impact on growth and inflation."
ENQUIRIES
River Global, Investment Manager +44 7702 799 117
Lucy Draper, Robin Sellers
Shore Capital, Financial Adviser and Broker +44 2074 084 050
Gillian Martin, Daphne Zhang (Corporate Advisory)
Fiona Conroy (Corporate Broking)
Apex Fund and Corporate Services (Guernsey) Limited +44 2035 303 687
indiacapitalbox@apexgroup.com
(Company Secretary)
Matt Lihou
About India Capital Growth Fund
India Capital Growth Fund Limited the LSE premium listed investment company
registered and incorporated in Guernsey, was established to take advantage of
long-term investment opportunities in companies based in India. ICGF
predominantly invests in listed mid and small cap companies, although
investments may also be made in large cap and private Indian companies where
the Fund Manager believes long-term capital appreciation will be achieved.
www.indiacapitalgrowth.com
Financial Highlights
Net Asset Value per share total return -10.4% (2024: 16.00%)
The Net Asset Value ("NAV") per share total return for the year was -10.4%
(2024: 16.0%) The Company's Notional Benchmark BSE Midcap Total Return Index
returned -9.5%% (2024: 25.6%).
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.
Shareholder total return of -11.7% (2024: 11.3%)
The shareholder total return for the year was -11.7% (2024: 11.3%). The share
price as at 31 December 2025 was 170.0p (2024: 192.5p).
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.
Shares ended the year at a discount of 9.2% (2024: 7.9%)
The shares traded at an average discount to NAV of 8.0% (2024: 7.7%) 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.
See Alternative Performance Measures "APMs" below for further information.
Shareholder Capital Returns
Redemption Facility Date No of shares Value £'000
December 2021 15,608,872 19,708 The Company has operated a shareholder-approved Redemption Facility whereby
shareholders can redeem their shares every two years based upon a minimum
discount to NAV.
The Redemption Facility has now been replaced by a five-year conditional
performance-related tender for up to 25% of the Company's issued share capital
following the passing of a shareholders' resolution at an EGM on 25 March
2026.
December 2023 15,159,876 26,197
December 2025 16,967,020 31,000
Source: River Global
Chair's Statement
2025 was a disappointing year for the Indian stock market, compared to the
strength of the previous two years, particularly in sterling terms. The Indian
Rupee declined significantly against the pound and while Indian equities
appreciated by almost 10% in local currency, in sterling terms the Net Asset
Value (NAV) of your Company declined by 10.4%. This stood in stark contrast to
Global equity markets which increased by 13.5% (MSCI World Index £) during
the year.
Throughout the year India was buffeted by external events: geopolitical
uncertainty, regional instability between Pakistan and India, on-off tariff
threats from the US, volatile oil prices and rising commodity prices to name
but a few. Concerns about these events outweighed the positive developments in
the Indian domestic economy, with the government introducing significant
economic reforms, rolling out infrastructure investment, and cementing the
country's place as a global digital and technology hub.
Performance
In this tough environment, your Company underperformed its reference benchmark
index, the BSE Midcap Total Return Index, by a small margin. Despite the
difficult environment, there were a number of bright spots - with the
Company's exposure to the financial sector contributing positively to
performance and large foreign investors are beginning to see value in the
sector. Sadly, the positives were outweighed by the negative drag of tariffs
on export related companies. Our Investment Adviser, Gaurav Narain, discusses
the contributors to and detractors from performance in his report.
Discount Management and Redemption Facility
In 2025 the Company bought back to Treasury 1,521,500 shares at an average
market price of 171.66p, at discounts to NAV ranging from 8.0% to 11.6%, at a
total cost of £2.6m. Since the year end a further 838,500 shares have been
bought back to Treasury at an average market price of 158.65p, at discounts to
NAV ranging from 8.3% to 10.2%, at a total cost of £1.3m. The average
discount for the year was 8%.
Additionally in the December 2025 Redemption Facility, a further 16,967,020
shares were bought back to Treasury at a redemption price of 182.71p per share
and a total cost of £31.0m.
Proposed Enhancement to the Company
In February 2026, the Board announced proposals intended to strengthen the
Company's long-term position and to improve outcomes for shareholders. There
are two key elements to the proposals: replacing the biennial Redemption
Facility with a five-year conditional performance related tender for up to 25%
of the Company's issued share capital and the introduction of an annual
dividend to be paid semi-annually.
The Board has agreed that a more suitable benchmark should be used for the
measurement of performance and the MSCI India Small and Mid Cap Index will be
used as the benchmark for your Company from the start of 2026.
These proposals were set out in detail in the Shareholder Circular sent to
shareholders on 20 February 2026 along with the notice of the Extraordinary
General Meeting taking place on 25 March 2026.
Investor Relations
The Board of your Company is keen to ensure that existing and prospective
shareholders have access to the information that they need about the
Company. We were delighted to see so many of you at our first London-based
Annual General Meeting held in June 2025. We will hold our 2026 AGM in
London once again, and very much hope that you will attend in person to hear
Gaurav's views on the Indian stock market and the prospects for your Company.
Throughout 2025, Gaurav and the investor relations team from River Global have
visited a wide range of professional and retail investors across the UK.
They have attended a number of investment conferences and are always pleased
to meet shareholders at these events.
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 website.
Environment, Social and Governance ("ESG")
Along with colleagues at River Global, 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, despite
the fact that the systematic approach to ESG, which is evident in in the UK
and Europe, is not yet in place in India.
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
After a poor 2025 for Indian stock markets, valuations of Indian stocks, which
had looked stretched a year ago, are now beginning to look more reasonable.
Indian GDP growth is likely to remain in the region of 6-7% for the next few
years and inflation is under control, although food price inflation remains a
risk. In the short term the war in the Middle East will continue to create
uncertainty, particularly with regard to energy supply security, the price of
energy and knock on impact on growth and inflation.
As the mid-term elections in the USA approach, perhaps the talk of tariffs
will subside. Multinational companies should continue to move production to
India in efforts to diversify supply chains and in light of India's youthful
and numerous workforce.
The Board, the Fund Manager and the Investment Adviser are focussed on
improving the Company's position, aspiring to better investment performance,
attracting new shareholders, thereby reducing the disparity between the
Company's share price and its NAV.
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.
Elisabeth Scott
Chair
25 March 2026
Strategic Report
Introductory Section
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 includes disclosures equivalent to those required under
section 172(1) of the UK Companies Act 2006, describing how the Directors have
had regard to the interests of stakeholders and the long‑term success of the
Group. Although the Company is incorporated in Guernsey and not subject to the
UK Companies Act, these disclosures are provided in accordance with the UK
Listing Rules and the Disclosure Guidance and Transparency Rules.
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 environmental, social and governance ("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 net asset value of the shares. Share
price discounts and premiums are determined by supply and demand. 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
Statement, 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 recent introduction of the five-year
performance-related tender to replace the two-year Redemption Facility.
In making this assessment, the Directors have considered the impact of the
introduction of a new five-yearly conditional performance-related tender offer
for up to 25% of the Company's issued share capital, which replaces the
biennial redemption facility. The Board believes that this performance-related
tender is better suited to the Company's strategy and its long-term investment
philosophy than the Redemption Facility. The Company's investments typically
require several years to mature, and a five-year holding period more
realistically reflects the time needed for company fundamentals to compound
and valuation gaps to close. Moving from a two-year redemption cycle to a
five-year cycle therefore strengthens alignment between the Company's
investment horizon and its liquidity framework, enabling the portfolio to be
managed with greater conviction, lower trading friction, and reduced pressure
to maintain excess liquidity.
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 statement of financial position, 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.
Stakeholder Communication
As well as the Company's shareholders, the Board has identified its other key
stakeholders to include the Investment Manager, AIFM, Fund Investment Adviser,
and the Corporate Broker and Sponsor, details of whom are provided in the
Management and Administration Directory. The Board engages with these
stakeholders primarily through its quarterly Board meetings, where the
Company's KPIs, portfolio performance, operational matters and service
provider reports are reviewed. As part of this process, the Board considers
the influence and interests of each stakeholder group and assesses how their
activities and feedback may affect the Company's strategy, risk profile and
long‑term objectives.
Details of how the Board engages with shareholders and why they are important
can be found under "Shareholder Communication" in the Directors' Report below.
In making decisions, the Board's objective is to promote the long‑term
sustainable success of the Company. Accordingly, the Board considers the
likely long‑term consequences of its decisions and has regard to the
interests of its wider stakeholders and the matters set out in section 172 of
the UK Companies Act 2006. During the year, this included consideration of
service provider performance and fee arrangements, portfolio construction and
liquidity, regulatory developments, and the effectiveness of communication
with shareholders and the wider market. Through these considerations, the
Board ensures that stakeholder interests are appropriately reflected in its
discussions and decision‑making.
Strategic Report
Investment Manager's Review
2025 was a complex year for India. It found itself a surprise target for high
tariffs from the US at a time when the economy was already showing
vulnerabilities around consumption and capital spending in the wake of the
election and inflationary pressures. By the end of the year, growth had
revived and a deal with the US had been agreed, leaving a brighter outlook for
2026.
Overall economic growth has been improving throughout the year, with little to
dent India's status as the world's fastest growing major economy. India's real
GDP is projected to grow by 7.4% in the 2025-26 financial year, up from 6.5%
in 2024-25. Its domestic demand is recovering, with public infrastructure
spending and a relatively resilient services sector helping to shore up
growth.
Nevertheless, there have been some challenges to India's growth trajectory.
The most high profile issue was the US's decision to impose 50% tariffs on
India in retaliation for buying Russian oil. The news was alarming: India had
expected to be at the front of the queue for a trade deal, given the
apparently strong relationship between Modi and Trump.
The tariffs themselves had little impact on the Indian economy. There were
important carve-outs for critical exports, including electronics manufacturing
and pharmaceutical products. All the iPhones sold in the US are made in India,
while India remains a significant supplier of pharmaceutical products into the
US.
The impact of tariffs was more evident in sectors such as textiles, gems and
jewellery, and aquaculture. These are all high employment, labour intensive
sectors. Competing countries - Vietnam, Pakistan, Bangladesh - had a lower
level of tariffs, which reduced India's competitiveness. The uncertainty also
weighed on sentiment towards India. The country's stock markets had been
'priced for perfection' and the unpredictability of future trading
arrangements was unhelpful for stock market confidence.
Eventually, a deal was struck, which involved some marginal concessions on
agriculture and a tacit agreement to halt Russian oil purchases. There may
also be an agreement to buy Venezuelan oil - India is one of the few places
with the refining capacity to process the thick Venezuelan crude - but this is
yet to be confirmed. This has brought tariffs on Indian imports back to a more
manageable 18%.
There were other weak points for the economy. The rural economy remained
relatively sluggish. Inflation had taken a toll on spending in 2024 but
dropped progressively through 2025. At the same time, capital expenditure - a
major casualty of the election cycle - started to recover. Private sector
capex has also started to show signs of life.
The weakness in the Indian economy has weighed on the corporate sector. One of
the pinch points for markets over the year was the deterioration in corporate
earnings growth against a more challenging economic backdrop. Aggregate
corporate earnings growth dipped to 7-8%. While this is not low, it is weaker
than the double-digit growth that has sustained Indian stock markets to date.
Nevertheless, by the end of the period, there was a discernible recovery in
consumption and infrastructure sectors.
Stock markets
It has been a difficult year for the Indian stock markets. Large caps
weathered a tougher environment significantly better than smaller companies,
but we still believe the strongest long-term growth opportunities lie in the
small and mid cap sectors. Over the year, the BSE Midcap TR index fell 9.5% in
GBP and the exchange rate was responsible for all the decline, falling by
12.6%. The Company's NAV performance was -10.4%, underperforming the benchmark
by 0.9%.
Overall, the sectors that did well were financials, autos and industrials.
Markets were more valuation-sensitive, and financials had had a weak year in
2024, leaving valuations lower than for the rest of the market. The banks also
benefited from expectations of stronger credit growth, attractive valuations
and loosening liquidity from the central bank, along with some significant
foreign investment in the sector.
The auto sector benefited from the reduction in goods and services tax (GST)
to 18% from 28% in September, which boosted demand. Industrials were boosted
by large capex announcements in power sector, data centres etc.
In contrast, it was a tougher period for the IT sector, amid concerns on
business model disruption driven by AI. Restrictions on US H-1B visas also
hurt the sector. The consumption sector also saw weak performance. Intense
competition and adverse weather impacted demand.
2025 also saw a notable rebalancing between India and wider emerging markets.
The Indian market has historically traded at an average 60% valuation premium
to other emerging markets on account of its consistently higher level of
profitability (ROE%). At the start of the year, this valuation premium had
expanded to 120%. But countries such as China, Korea and Brazil have gained
ground over the year, bringing the premium to more normal levels. The absolute
valuations are still slightly above historical averages.
Company performance
The Company's investment strategy continues to be to invest in listed Indian
small and mid-cap companies. It has around 70% invested in small cap stocks
and a median market cap of US$ 1.8bn. It follows a bottom-up stock picking
approach with an active share of around 90%. Overall, this was a hindrance in
2025. It was a typical 'risk off' market, with small-caps lagging mid-caps,
which in turn lagged behind large caps. Over the 12 month period, the
portfolio was broadly in line with the benchmark, the BSE MidCap TR index,
which fell 9.5% in sterling terms.
The strongest contributors to performance were in the financial sector. Multi
Commodity Exchange of India added most to relative performance. This was
India's first listed exchange and is the country's largest
commodity derivatives exchange. The banks were also an important contributor
to returns. The Company held RBL Bank, City Union Bank, Federal Bank and IDFC
First Bank. International financial groups have been taking an interest in the
sector. For example, in October, Blackstone announced a $705 million
investment for a 9.9% stake in Federal Bank, becoming its largest shareholder.
Similarly Emirates NBD is in the process of acquiring a majority 60% stake in
RBL Bank for approximately US$ 3bn.
Elsewhere, gains were more idiosyncratic. Cartrade Tech, for example, was a
strong performer over the year. It runs the country's largest online auto
classifieds platform, which serves as a marketplace for new and used vehicles.
Auto loan group Cholamandalam Investment and Finance Company and instant
coffee manufacturer CCL Products India were also strong over the year.
Our weakest stock was Ramkrishna Forgings, which makes auto components and has
an international footprint. Equally, it proved a tough environment for some of
the textile companies in the portfolio. This hurt garment manufacturer
Gokaldas Exports. Transmission tower manufacturer Skipper also struggled even
though financial performance remains strong.
Some of the companies in the portfolio were caught up in the weakness
affecting the technology sector. This impacted Persistent Systems and Coforge,
despite delivering strong financial performance. Dixon Technologies, a
contract manufacturer of televisions, washing machines and smartphones had a
tough year due to a high valuation and concerns of high memory chip prices
impacting mobile sales.
A trade deal with the US was finally signed at the beginning of February.
However, we had already taken the decision to trim many of our export-facing
businesses, rotating the proceeds into financials and more domestic-facing
companies. Even though the tariffs have now been temporarily reduced, it
remains an uncertain environment, with the US willing to use tariffs as a tool
of foreign policy.
Benchmark
The Company's investment portfolio has a high allocation to small-cap and
mid-cap companies in order to meet its investment objectives. At launch, the
Board adopted the best available benchmark at the time; however, with a more
suitable alternative now available, the Board has replaced the BSE MidCap TR
index with the MSCI India SMID Index with effect from 1 January 2026. The
Board believes that MSCI India SMID Index offers the most accurate
representation of the Company's quality investment universe, combining both
mid- and small-cap constituents, and that it should therefore be used as a
measure of relative performance.
Growth themes in India
Domestic capex - India is experiencing an infrastructure revolution.
Government capital spending has increased 5-fold over the past decade. $127bn
of expenditure spending has been laid out for the financial year 2025-2026.
Infrastructure development is at the forefront of these plans. An average of
33.8 kilometres of highway is being constructed every day. The country is in
the process of adding another 15 airports by 2028. Over 20 cities are building
metro systems. Renewable energy, data centres and semiconductor facilities are
also seeing high capex investments and commitments.
Digitalisation - India has been a poster child for digital transformation. It
created the world's largest digital identification scheme, Aadhaar, which has
assigned a 12-digit biometric code to almost all of India's 1.4bn residents.
The system was designed to help improve access to public services and
financial inclusion and is being watched closely by the rest of the world.
India's internet penetration now stands at 58%, a 4-fold increase in a decade.
Its 900m active internet user base is the second largest cohort in the world
after China.
Consumption - 2025 was a weaker year for consumption, but the long-term trend
is still intact. Household spending has doubled in a decade and India may
account for 16% of worldwide consumption by 2050. This would rival the US's
17% share. The country's demographic dividend, with 65% of its population
below the age of 35 is likely to be an important factor. In 2025, the lowering
of the GST was designed to boost consumption. While inflation has been a drag
on consumption growth, particularly in rural areas, it has since declined and
is below the RBI target range of 2%-6%. This should support spending.
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, as
well as semiconductors and batteries. This is already bearing fruit in areas
such as electronics. India's smartphone exports to the US have been growing
rapidly. They grew more than three-fold year-on-year to $1.47 billion in
October alone.
Sona BLW Precision Forgings (Sona BLW)
Theme: Electric Vehicles
Snapshot: The company's revenue share from Battery Electric Vehicles has
increased to approximately 25 percent, up from just 1 percent in FY19
Sona BLW Precision Forgings is an auto components manufacturer with
expertise in differential gears and assemblies, as well as starter and
traction motors for the global automotive sector. Since our initial investment
in June 2021, the company has delivered strong growth. It has expanded its
customer base secured new contracts with existing clients, introduced new
products, and entered vehicle categories previously outside its portfolio. The
company's revenue share from Battery Electric Vehicles has increased to
approximately 25 percent, up from just 1 percent in FY19, while revenue share
from conventional Internal Combustion Engine vehicles has declined to about 9
percent, from 35 percent six years ago. Within the electric vehicle segment
alone, the company now serves 31 customers across 45 programs in passenger
vehicles, commercial vehicles, and two-wheelers. Its current net order book is
close to Rs235 billion, which is approximately six times its revenue over the
past year.
The company's competitive edge stems from its robust research and engineering
capabilities. It employs more than 500 research and development engineers, and
its in-house die design expertise, deep metallurgical knowledge, and warm
forging technology make it one of the most vertically integrated participants
in the differential gear sector. This advantage is reflected in its sustained
margins of 26%. Its focus on innovation has also enabled the company to expand
into new product lines and segments such as off-road vehicles. What
differentiates Sona BLW within the Indian auto ancillary landscape is not only
the scale of investment in research and development, but also its ability to
successfully bring these innovations to market and generate returns from them.
In 2023, the company acquired Novelic, a Serbia-based sensor and software firm
with millimeter wave radar technology, which enhances Sona BLW's ability to
meet emerging regulatory requirements around child and pet detection systems
in new vehicles. More recently in 2025, it acquired the railway equipment
division of Escorts Kubota, extending its footprint beyond automotive into the
rail industry.
Recent financial performance has been affected by slower demand in the EV
market, supply chain disruptions, and delays in product launches by a key
customer However, management sees an opportunity to increase market share
following the bankruptcy filings of three major European competitors. The
railways segment, which now contributes around 10 percent of revenue, is
expected to cushion the impact of softer electric vehicle demand. In addition,
concentration risk from its largest electric vehicle customer has reduced
meaningfully, with that client now accounting for only about 6% of revenues
compared with 20% previously. Overall, we anticipate healthy revenue growth,
supported by strong momentum in the railways business and a gradually
improving outlook for the core automotive segment.
MCX
Theme: Financial Intermediation
SNAPSHOT: India's dominant commodity exchange
Multi Commodity Exchange of India (MCX) is the country's leading commodity
exchange, commanding over 99% market share in non-agricultural commodity
derivatives. Over the past five years, it has consistently held its market
share above 90%, even after the entry of strong competitors such as National
Stock Exchange (NSE) and The Bombay Stock Exchange (BSE). This reflects the
strength of its network-driven business model.
MCX is a beneficiary of rising commodity prices as well as increased
volatility across commodity markets. Its revenue is based on a percentage fee
of the turnover on the exchange. The fluctuating geopolitical environment over
the past year has resulted in a sharp surge in trading volumes on the
exchange. Over the three-year period ending December 2025, Average Daily
Turnover Value (ADTV) in futures increased at an annual rate of over 50%,
while options premium ADTV expanded at a growth rate of over 90%. Growth has
been supported by the introduction of contracts with shorter expiry cycles and
smaller lot sizes, which helped increase participation. Retail investor growth
has contributed to overall volume growth.
In 2023, MCX transitioned its technology platform to Tata Consultancy Services
(India's largest IT services company) and shifted from a variable to a fixed
cost model. This change has significantly increased profitability, with EBITDA
margins rising to 74% in the most recent quarter, compared with about 50% in
March 2022.
MCX provides indirect exposure to rising commodity price volatility. The
exchange has introduced new contracts and aims to get them fully established
before adding additional products. It continues to invest in its technology
infrastructure to support trading volumes, which could be three or four times
higher than current levels.
Aether Industries
Theme: China plus 1
SNAPSHOT: An R&D driven speciality chemical play
Aether Industries Limited (Aether) is a speciality chemical manufacturer in
India producing advanced intermediate and speciality chemicals, involving
complex and differentiated chemistry.
Since its founding in 2013, Aether has developed an eight by eight matrix to
select new molecules - eight core chemistries produced via eight technologies.
Aether aligns its sales to a specific chemistry rather than a specific
industry. As a result, unlike other chemical companies, it has a diverse
customer base, including pharmaceuticals, agriculture, oil and gas, material
science, photography and coatings. The key criterion for product selection are
that it requires a complex process of at least four steps, it has substantial
revenue potential and there are few manufacturing competitors.
Aether has three core revenue streams. The first is Large Scale Manufacturing
(LSM), which manufactures its own molecules. Its focus is on import
substitution, where there is limited competition and large market. The second
is Contract Research and Manufacturing Services (CRAMS), which includes the
research and development side, and manufactures in small quantities in pilot
plants. Finally, it has its Contract and Exclusive Manufacturing (CEM)
business.
One of Aether's key differentiators is its robust R&D & pilot plant.
It is one of the largest globally and forms the funnel for sales in contract
manufacturing. The emphasis on R&D comes from its strong technical team.
Its founder Ashwin Desai and his younger son Aman Desai are both chemical
engineers. The family are supported by a strong team of technical leaders,
including James Ringer and Raymond Roach, who both worked at Dow Chemical, as
well as 280+ people in the R&D team.
Baker Hughes, Otsuka Chemicals, Convergys Polyol and Miliken are examples of
some of Aether's most prominent customers in Contract and Exclusive
Manufacturing Services. In addition, Aether is working on a further 50
projects at the R&D stage. It has four operational manufacturing
facilities with two additional sites under construction, including a large
greenfield facility. Phase-1 of the greenfield facility is about to complete.
The company is also recording strong interest from global customers,
particularly in Europe, as manufacturing becomes increasingly unviable in the
West. In response Aether is ramping up its investment in R&D &
expanding its pilot plant facilities. As the new greenfield plant begins to
scale, Aether will be well positioned to bring in additional customers. We see
Aether well positioned for a long runway of growth.
Outlook
The Indian government is well-aware of the challenges for the economy and has
been taking steps to get growth back on track. In the first budget after the
elections, it cut personal income taxes to boost consumption. This was
followed by a simplification and cut in the Goods and Services Tax. The
central bank had been tightening liquidity to reduce some of the froth in the
system, but this has been unwound in response to slowing growth. Interest
rates too have been cut by 125bps over the year.
India has also signed a string of international trade agreements. After
lengthy negotiations, it finally sealed a deal with the European Union. The
disruptions to global trade from US tariffs may have accelerated this process.
The government has also signed deals with the UK, New Zealand, Australia, Oman
and the UAE. As part of the deal with the US, the 50% tariffs have already
been unwound. A lot has happened to get the economy moving.
This has already translated into a pick-up in consumption and consumer
confidence, which has been climbing since early 2025. Consumer spending has
been stable over the past 12 months. Cyclical improvements in labour market
conditions are likely to be a supportive factor, with the unemployment rate
declining steadily through 2025, Reforms such as the new Labour Codes should
strengthen employment conditions and therefore consumption.
This consumption growth, alongside higher capital expenditure, is likely to
support India's structural growth in 2026. It remains the fastest growing
major economy in the world. In the corporate sector, balance sheets have never
looked stronger, with leverage at all time lows. The banks are well
capitalised. The health of the economy is sound, with relatively few potential
domestic sources of disruption. This is an encouraging backdrop for earnings
growth. After a fallow period, earnings could return to double digit growth in
the year ahead.
Within Indian equities, many company valuations have fallen. While they are
still not cheap, there are many more opportunities than there were a year ago.
In the Company, our largest themes remain financials and consumption, but our
portfolio is built from the bottom up and incorporates a significant range of
growth ideas. More recently, for example, we have been investing in a wealth
management group, who are tapped into the growing savings needs of India's
middle class.
The outlook is healthy after a difficult year for Indian investors. Domestic
inflows have remained strong, with local investors ploughing an additional
$90bn into Indian markets in 2025. This brings total domestic inflows to
$224bn since 2021. In contrast, foreign investors withdrew $19bn in 2025. This
was the second year of outflows. We believe there is scope for these
international outflows to reverse in the year ahead. Elsewhere, earnings
growth is recovering, the economy is back to full strength, inflation is low
and the government's fiscal position is sound.
Strategic Report
Key Performance Indicators
Total return performance
1 Year % 3 Year % 5 Year % Since
31 Dec 2011 %
NAV per Share (10.4) 33.7 91.7 449.7 NAV per share is used to measure the performance of the Manager, after
accounting for Indian CGT provisions and INR/GBP FX rates.
Notional (9.5) 57.4 127.0 633.4 The notional benchmark is used as an indicator of market performance of
mid-cap companies listed in India.
Benchmark: BSE
Midcap Total
Return Index
Share Price (11.7) 31.8 102.6 403.7 This is used to measure the total return to shareholders.
Source: River Global.
Foreign exchange rates: Indian Rupee vs Great British Pound
2025 2024 2023
INR vs GBP FX rate 121.0 107.5 106.1 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 115.0 107.1 103.0
Source: River Global.
Share price premium/(discount) to NAV per share as at 31 December
2025 2024 2023
% % %
Premium/(discount) (9.2) (7.9) (3.9) 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) (8.0) (7.7) (7.5)
to NAV during the year
Source: River Global.
Ongoing charges as at 31 December
2025 2024 2023
Ongoing charges (%) 1.62 1.58 1.57 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: River Global.
See Alternative Performance Measures "APMs" below for further information.
Strategic Report
Portfolio Statement
% of
Market cap Value company NAV
HOLDING size Nominal £000
LISTED SECURITIES
Auto and Auto Ancillary
Ramkrishna Forgings S 687,400 2,971 2.2%
Sona BLW Precision Forgings S 972,714 3,853 2.9%
Uniparts India S 562,237 2,251 1.8%
9,075 6.9%
Cement
JK Lakshmi Cement S 623,000 4,005 3.0%
Sagar Cements S 1,611,000 2,855 2.1%
6,860 5.1%
Chemicals
Aether Industries S 417,124 2,964 2.2%
PI Industries M 115,000 3,077 2.3%
6,041 4.5%
Consumer Discretionary
Dixon Technologies M 44,500 4,450 3.3%
Kajaria Ceramics S 425,030 3,401 2.6%
VIP Industries S 975,000 3,082 2.3%
10,933 8.2%
Consumer Staples
CCL Products India S 574,000 4,478 3.3%
Emami S 1,104,000 4,822 3.6%
Essel Propack S 2,144,332 3,813 2.9%
Jyothy Laboratories S 512,000 1,196 0.9%
14,309 10.7%
Digital
Affle India S 390,000 5,799 4.3%
Cartrade Technologies S 182,000 4,250 3.2%
10,049 7.5%
Financial Banks
City Union Bank S 2,388,000 5,738 4.3%
IDFC Bank M 8,394,000 5,938 4.5%
RBL Bank S 2,570,000 6,706 5.0%
Federal Bank M 3,110,000 6,864 5.1%
25,246 18.9%
Financial Services
Multi Commodity Exchange M 75,000 6,901 5.2%
Nuvama Wealth Management S 240,405 2,941 2.2%
9,842 7.4%
Healthcare
GPT Healthcare S 2,200,000 2,551 1.9%
Neuland Laboratories S 46,000 5,768 4.3%
8,319 6.2%
Industrials
Atlanta Electricals S 350,000 2,543 1.9%
Elecon Engineering S 542,000 2,156 1.6%
PSP Projects S 403,574 2,893 2.1%
Skipper S 1,893,823 6,808 5.1%
Titagarh Rail Systems S 304,462 2,244 1.7%
Triveni Turbine S 530,000 2,357 1.8%
19,001 14.2%
IT Services
Coforge M 232,000 3,188 2.4%
Persistent Systems L 98,000 5,079 3.8%
8,267 6.2%
Textiles
Gokaldas Exports S 354,000 2,171 1.6%
Welspun India S 1,650,000 1,780 1.4%
3,951 3.0%
Total equity investments (including those held by ICG Q Limited) 131,893 98.8%
% of
Value company NAV
HOLDING £000
1,636 1.2%
Cash less other net current liabilities
Total Net Assets (before deferred taxation for Indian CGT) 133,529 100.0%
(7,441)
Deferred tax provision for Indian CGT
Total Net Assets (after deferred tax provision for India CGT) 126,088
Notes:
L: Large cap - companies with a market capitalisation above US$10.5bn 3.8%
M: Mid cap - companies with a market capitalisation between US$3.5bn and 22.8%
US$10.5bn
S: Small cap - companies with a market capitalisation below US$3.5bn 72.2%
98.8%
Equity investments may be held by the Company and its Mauritian subsidiary,
ICG Q Limited.
Strategic Report
Environmental, Social and Governance Statement
The Board recognises its responsibilities for reporting on environmental,
social and governance ("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 developing and reporting our ESG policies, we have considered the impacts
of our activities and provided disclosures aligned with the principles of
section 172(1) and the non‑financial reporting requirements of sections
414CA and 414CB of the UK Companies Act 2006. While these provisions do not
apply to the Company as a Guernsey‑incorporated entity, we believe that
adopting equivalent disclosures enhances transparency for shareholders and
stakeholders. We also report in accordance with the UK Corporate Governance
Code (the "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.
Task Force on Climate-related Financial Disclosures ("TCFD")
The Board has considered the requirements of TCFD and confirms that the
Company is not within the scope of the current UK regulatory mandate. The
Company does not qualify as a premium-listed commercial company under the
relevant UK Listing Rules, nor does it meet the size and employee thresholds
that would bring it into scope under the Companies (Strategic Report)
(Climate-related Financial Disclosure) Regulations 2022. Accordingly, while
the Company recognises the importance of climate-related risk assessment and
continues to monitor regulatory developments and evolving best practice, it is
not presently required to make disclosures aligned with the TCFD framework.
Investment management approach to sustainability and 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 assesses 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 generally incorporated into the Investment Manager's evaluation of an
issuer's investment risk or return, across all asset classes, sectors, and
markets in which the Company invests.
The Investment Manager has made ESG matters an integral part of its due
diligence process and positioned itself ahead of the learning curve in India.
It believes 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.
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
· No. of ISO certified manufacturing sites
Social
· Fulfilment of responsibilities under Corporate Social
Responsibility requirements
· Human capital:
o Employee turnover
o Health and safety
o Training and diversity
· Customer privacy and data security
· Product quality and safety
· Supply chain management
· Customer welfare
· Selling practices and product labelling
Governance
· Related party transactions
· Promoter's behavior: % holding, % shares pledged, exposure to
other business, unlisted entities in similar business, family run vs.
independently & professionally run
· Board structure: diversity, independence and size
· Board Committees and their independence: Audit, Nomination and
Remuneration
· Executive and Board Compensation
· Forensic accounting
· Auditors' Remuneration
The aggregate score is then weighted based upon its sector. An example of
scoring is given below comparing two consumer staples companies held 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 2025 is 5.6
out of 9, an improvement on both FY 2024 (5.4) and FY 2023 (5.1) across all
three scoring criteria of Disclosure, Direction of Travel and Absolute
comparison against Companies in the same 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 since 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. Below is a
summary of the ESG scoring for FY 2025:
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.
The Investment Manager has noted over the past three 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 levels of disclosure 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) regulations 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 1000 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 2025. 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 significant 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.
Modern Slavery Statement
The Modern Slavery Statement is included under "Employees, human rights and
corporate social responsibility" below.
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 PRI.
Risk Summary
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 this Annual Report.
Strategic Report
Risk Management Report
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.
The Board visited the Investment Manager in November 2025 to consider its
controls in so far as they impact the Company and concluded that the
Investment Manager's systems and controls were effective and that appropriate
risks were considered with no significant weaknesses identified. 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 and 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 2025 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 and are summarised in the table
below.
Principal Risks Mitigation
Investment performance and financial risk: These risks and their mitigation controls are reviewed at each quarterly Board
meeting.
Significant market, foreign currency, credit and liquidity risks faced by the
Company are set out in Note 10 to the Financial Statements. Investment is governed by the Investment Policy which ensures a diverse
portfolio is maintained.
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 The portfolio is actively managed by an experienced Investment Team and is
NAV. regularly reviewed using tools established by the regulated Investment
Manager.
The likelihood of the Company being impacted by this risk is judged to be
high. 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)
Significant capital returns to shareholders: Based upon the investment performance of the Company, the diversity of the
shareholder base and that shares have previously been issued from Treasury at
At the Company's EGM on 25 March 2026 shareholders voted for the introduction a premium to NAV to satisfy increased demand, the Board believes this
of a new five yearly conditional performance-related tender offer for up to five-year conditional performance related tender is better aligned with the
25% of the Company's issued share capital which replaces the existing biennial Company's investment objective, which is to provide long-term capital
redemption facility. Despite this change there remains the risk that the appreciation by investing predominantly in listed mid- and small-cap Indian
tender, if triggered, may impair the future long-term viability of the companies. Moving to a five-year cycle helps to rebalance and protect the
Company. interests of all shareholders and means future redemptions are likely to be at
such a level as not to impact the going concern of the Company.
The likelihood of the Company being impacted by this risk is judged to be
medium. The residual risk following the risk mitigation is deemed to be low following
the replacement of the Two-Year Redemption Facility with a Five-Year
Conditional Performance-Related Tender.
(Risk - changed from Medium to Low)
Emerging risks: The Board assesses and monitors these risks as and when they develop so, if
necessary, controls and procedures can be implemented to mitigate against
Risks that emerge unexpectedly, and in some cases quite quickly, can have an their economic impact upon the Company. During the year, there were no changes
economic impact upon the Company. In particular significant geopolitical to the emerging risks identified, and no new procedures were implemented.
conflicts such as the Russia/Ukraine conflict, Middle East conflict, and the
introduction of Trade Tariffs can disrupt global supply chains and the Indian The residual risk following the risk mitigation is deemed to be medium.
economy and listed companies.
(Risk - no change)
The likelihood of the Company being impacted by this risk is judged to be
high.
Cybersecurity, data security breach and related criminal activity risk: Cybersecurity controls at all service providers are reviewed on a regular
basis. Controls at the Administrator are subject to an annual controls audit
The Company is exposed to the risk of criminal attacks on its data and systems which is reviewed by the Audit and Risk Committee and any anomalies or
held and managed by its service providers. breaches followed up.
The likelihood of the Company being impacted by this risk is judged to be The residual risk following the risk mitigation is deemed to be medium.
high.
(Risk - no change)
Operations and systems risk: The Investment Manager and Administrator are both regulated entities.
The Company is exposed to the risks arising from any failure of systems and The Board receives quarterly compliance reports which are reviewed and
controls in the operations of the Investment Manager, the Administrator, or challenged where necessary.
the Company's other service providers.
Any breaches are addressed as soon as they are highlighted to the Board and
The likelihood of the Company being impacted by this risk is judged to be appropriate action taken to rectify.
medium.
Under normal circumstances members of the Audit and 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)
Environmental and Social ("E&S") impact risk: The Investment Manager has an advisory team on the ground in India who keep
abreast of the latest political developments and economic forecasts and
The potential loss or harm directly or indirectly resulting from environmental regularly advise the Board thereof.
and social factors that impact the Company, its investors and its service
providers, and the consequential impact on the environment and society. The Board considers the reports from the Investment Manager and determines
E&S impact risk is a transverse risk that impacts our other risks: whether the Company is detrimentally affected. Further details are included in
investment performance risk, currency and emerging market risk, operational the Company's report on Sustainability and ESG.
non-financial risk, legal and regulatory risk and reputation risk. Our
investment manager has developed a qualitative scoring model which measures The residual risk following the risk mitigation is deemed to be low.
climate and other environmental impacts and the reporting thereof by the
Company's investment portfolio companies. (Risk - no change)
The likelihood of the Company being impacted by this risk is judged to be
medium.
Accounting, legal and regulatory risk: The Investment Manager and Administrator are both regulated entities.
The Company is at risk if it fails to comply with the laws and regulations The Board receives quarterly compliance reports which are reviewed and
applicable to a company with a premium listing on the Main Market of the challenged where necessary.
London Stock Exchange and the Guernsey, Mauritian and Indian laws and
regulations or if it fails to maintain accurate accounting records. The Investment Manager and Administrator provide the Board with regular
reports on changes in regulations and accounting requirements. Legal advice is
The likelihood of the Company being impacted by this risk is judged to be taken where appropriate.
medium.
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.
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.
Governance Reports
Directors' Information
The Directors who served during the year and up to the date of signing, all of
whom are non-executive directors, are as follows:
Elisabeth Scott (Chair)
Elisabeth was appointed to the Board as Chair in 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 BlackRock World Mining Trust plc, and Chair of JPMorgan Emerging
Markets Dividend 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. and VH Global Energy Infrastructure plc. He is resident
in the UK.
Lynne Duquemin
Lynne was appointed to the board in May 2021. She has over 35 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 35 years' experience in
the asset management industry, mostly 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 25 years
investing in global emerging markets equities. He is a non-executive director
of Aberdeen Equity Income Trust 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 table details the Directors' directorships in public companies
and other relevant entities:
Company Name Stock Exchange
Elisabeth Scott 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 London
VH Global Energy Infrastructure plc London
Lynne Duquemin - -
Nick Timberlake Aberdeen Equity Income Trust plc London
Governance Reports
Directors' Report
The Directors present their annual report and the audited financial statements
(the "Financial Statements") of the Company for the year ended 31 December
2025 which have been prepared in accordance with IFRS Accounting Standards
("IFRS") as issued by the International Accounting Standards Board ("IASB")
and are in compliance with the Companies (Guernsey) Law, 2008, as amended. The
Financial Statements have been prepared on a going concern basis, and the
accounting policies, presentation and methods of computation are consistent
with this basis.
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 43916. At 31
December 2025, the Company has one wholly owned Mauritian subsidiary, ICG Q
Limited ("ICG Q"). The Company has an unlimited life, although a Redemption
Facility was put in place following the passing of a shareholders' resolution
at an Extraordinary General Meeting ("EGM") on 12 June 2020. The most recent
redemption date was 29 November 2025 when 16,967,020 net shares were redeemed
under the Redemption Facility. However, this Redemption Facility has now
been replaced with a five-year conditional performance-related tender for up
to 25% of the Company's issued share capital, following the passing of a
shareholders' resolution at an EGM on 25 March 2026.
Group structure
The Board of Directors continues to take steps to close and to liquidate its
Mauritian subsidiary, ICG Q, believing that it no longer serves a beneficial
purpose for the Company's shareholders. However, this process may take some
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 which the Board does not believe is in the
interest of 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.
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% 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% 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 2025.
Benchmark
The Company's investment portfolio has a high allocation to small-cap and
mid-cap companies in order to meet its investment objectives. At launch, the
Board adopted the best available benchmark at the time; however, with a more
suitable alternative now available, the Board has replaced the BSE MidCap
Total Return Index with the MSCI India SMID Index with effect from 1 January
2026. The Board believes that MSCI India SMID Index offers the most accurate
representation of the Company's quality investment universe, combining both
mid- and small-cap constituents, and that it should therefore be used in the
measurement of performance.
Performance-Related Tender
The five-yearly conditional performance-related tender offer for up to 25% of
the Company's issued share capital (excluding Shares held in Treasury) shall
be measured by reference to the change in the Benchmark, expressed as a
percentage, over the five-year period commencing on 1 January 2026, the
first date that the tender offer could be offered being around the time of the
Company's annual general meeting in 2031, when the Company's audited NAV Total
Return per Share (before the impact of Indian Capital Gains Taxation) over the
five financial years ending 31 December 2030 would be available.
In the event that the change in Company's NAV Total Return per Share (before
the impact of Indian Capital Gains Taxation), expressed as a percentage, over
the previous five financial years is less than the change in the Benchmark,
expressed as a percentage, the Performance-Related Tender will be triggered.
It is expected that the Performance-Related Tender, if triggered, would be
offered to Shareholders at close to the prevailing NAV per Share less costs.
Results and dividends
The Company's performance during the year is discussed in the Investment
Manager's review.
The results for the year are set out in the Statement of Comprehensive Income.
The Directors do not recommend the payment of a dividend for the year ended 31
December 2025 (2024: £nil). However, following the passing of a shareholders'
resolution at an EGM on 25 March 2026, the Board has changed its current
policy not to pay dividends to an Annual Dividend Policy, whereby the Company
intends to pay interim dividends per Share commencing in October 2026 and then
semi-annually from the 2026 Financial Year. Dividends will be paid out of
capital and/or from any net income after payment of operating expenses. The
Board expects to pay an interim dividend equating to approximately 2% of
prevailing NAV per Share in the current financial year ending 31 December 2026
with the intention of increasing the dividend over time if circumstances
permit. The two interim dividends are expected to be declared, respectively in
September and April.
Substantial interests
Shareholders who held an interest of 3% or more of the Ordinary Share Capital
of the Company at 28 February 2026, being the latest date such data is
available, are stated in the table below:
No. of Shares % Holding*
Hargreaves Lansdown 13,218,399 19.84
Interactive Investor 12,649,952 18.99
AJ Bell 4,551,107 6.83
JM Finn 3,807,872 5.72
Hedley 2,254,147 3.38
*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
Elisabeth Scott, Patrick Firth, Lynne Duquemin and Nick Timberlake served
throughout the year and to date. A short biography of the current Directors of
the Company are set out below.
Share repurchases by the Company
Further to the shareholders' resolutions of 27 June 2023, 26 June 2024 and 5
June 2025 the Company purchased 18,488,520 ordinary shares in 2025 with a
nominal value of £184,885 and representing 1.88% of the Company's called up
ordinary share capital, for a consideration of £33.6m.
Directors' interests
At 31 December 2025, Directors and their immediate families held the following
declarable interests in the Company:
Ordinary shares
2025 2024
Elisabeth Scott 50,000 50,000
Patrick Firth 25,000 25,000
Lynne Duquemin 25,200 19,125
Nick Timberlake 57,500 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 2025 were 1.62% based on an average
monthly net assets of £154,758,718 (2024: 1.58% based on an average monthly
net asset of £168,646,935).
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. Neither the Chair nor any member of the Board has, or
has had, any relationships or circumstances that may create a conflict of
interest between their 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.
The Chair is responsible for leading the Board of Directors and for ensuring
its effectiveness in all aspects of its role. The specific duties of the Chair
include setting the Board's agenda, expectations concerning the Company's
culture, ensuring the Board has in place effective decision-making processes
which are supported by accurate and high-quality information, and
demonstrating ethical leadership and promoting the highest standards of
integrity, probity and corporate governance throughout the Company.
The Board believes that all of the Directors have adequate time and resources
to fulfil their duties to the Company, and are not over-committed in
accordance with the published Glass-Lewis policy on overboarding.
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 and 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 five 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 and Risk Committee. The
conclusion of the 2025 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 which also includes details of the
Management Engagement Committee and Audit and Risk Committee.
Sustainability and environmental, social and governance ("ESG")
The Company's report on Sustainability and ESG is provided above.
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.
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.
Whistleblowing
The Directors are non-executive and the Company does not have any employees, hence no Chief Executive, Executive Directors' remuneration nor whistle-blowing policy is required. The Board is satisfied that any relevant issues can be properly considered by the Board. Moreover, the Directors have satisfied themselves that the Company's service providers have appropriate whistleblowing policies and procedures and have received confirmation from the service providers that nothing has arisen under those policies and procedures which should be brought to the attention of the Board.
Board leadership, effectiveness, diversity and 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 policy of the Board is to support the principle of diversity and that
there will be no discrimination on the grounds of gender, social and ethnic
background, cognitive and personal strengths. The Board supports the widening
of its diversity, whilst ensuring that the capabilities, experience and
background of each member remain appropriate to the Company and continue to
contribute to overall Board effectiveness. The Company'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 ensure that it is presented with a diverse set of
candidates, from which it will continue to appoint individuals best suited to
the role, and who, together as a Board, will aim to ensure the continued
optimal promotion of the Company. All appointments to the Board are subject to
a formal, rigorous and transparent procedure.
As at 31 December 2025, the reference date for reporting on progress on
diversity targets, the Board was 50% male and 50% female, and has therefore
met its target on gender diversity. As at 31 December 2025, none of the Board
was from a minority ethnic background. The Board will consider the target for
ethnic diversity when appointing new directors. There have been no changes to
the Board during the year.
Number of Board members Percentage of the Board Number of senior positions on the Board
Men 2 50%
Women 2 50% 1 (Chair)
Number of Board members Percentage of the Board Number of senior positions on the Board
White British or other white 4 100% 1 (Chair)
All Directors are non-executive and the Company does not have a Senior
Independent Director.
The Company collects diversity information through a confidential email-based self-reporting process completed by Directors. The data provided is voluntary, handled in accordance with privacy requirements, and used to prepare the mandatory numerical diversity disclosures in the annual report.
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.
· On 9 April 2025 the Board of the Company agreed to novate the
Investment Management and AIFM Agreement with Ocean Dial Asset Management
Limited ("ODAM") dated 19 September 2017 to River Global Investors LLP and SVM
(trading as RGI Fund Management) respectively, with no change to their terms.
SVM is a member of River Global PLC (previously AssetCo plc) ("River Global")
which acquired ODAM on 2 October 2023. This novation is the final part of the
planned integration of ODAM into River Global's other active equity asset
management businesses. On 19 January 2026 SVM changed its name to RGI Fund
Management Limited. On the same date the company's registered address changed
from 7 Castle Street, Edinburgh, EH2 3AH to 19 Charlotte Square, Edinburgh,
EH2 4DF.
· 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 9
December 2025, 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. From March 2024, the
method of calculation for these fees were updated. Investment management fees
receivable from ICG Q are calculated based on the NAV of ICG Q. Investment
management fees payable to RGI Fund Management Limited are based on the assets
of the Company. The overall burden of investment management fees to the
Company 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.
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 a member of its Investment Manager's group to act as
its AIFM.
The Fund Manager, RGI Fund Management, 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 takes 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. Directors 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 2025, Gaurav Narain (overseas advisor to
the Investment Manager) and the investor relations team at RGI Fund Management
Limited 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 Directors 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 Directors 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.
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 2025, the Company had bought back a total of 1,521,500
(2024: 1,613,512) shares in the market.
Going concern
The Board made an assessment of the Company's ability to continue as a going
concern for at least 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 (75.2% 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). In making this
assessment, the Board has considered cashflow projections covering a period of
two years.
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 introduced a Redemption Facility which gave the
ordinary shareholders the ability to redeem part or all of their shareholding
at a Redemption Point every two years. The first and second Redemption Points
were on 31 December 2021 and 31 December 2023, 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 third Redemption Point was on 29 November 2025, when valid redemption
requests were received in respect of 16,967,020 ordinary shares (20.1% of the
then issued share capital) which were subsequently redeemed under the
Redemption Facility at a total cost of £31.0m in accordance with the
announced redemption price on 8 December 2025. Also during 2025, as part of
the Board's strategy to manage the share price discount to NAV, the Company
bought back 1.5m ordinary shares at a significant discount to NAV at a cost of
£2.6m. Since the year end the Company has bought back a further 1.1m ordinary
shares at a significant discount to NAV at a cost of £1.7m.The Redemption
Facility has now been replaced with a five-year conditional
performance-related tender for up to 25% of the Company's issued share capital
following the passing of a shareholders' resolution at an EGM on 25 March
2026. The Company's investment strategy requires a long-term, bottom-up
investment approach which is built on capturing the structural growth of high
quality Indian small-cap and mid-cap companies. Therefore, the Board believes
that the Performance-Related Tender is better suited to the Company's strategy
and its long-term investment philosophy than the Redemption Facility. The
Company's investments typically require several years to mature, and a
five-year holding period more realistically reflects the time needed for
company fundamentals to compound and valuation gaps to close. Moving from a
two-year redemption cycle to a five-year cycle therefore strengthens alignment
between the Company's investment horizon and its liquidity framework, enabling
the portfolio to be managed with greater conviction, lower trading friction,
and reduced pressure to maintain excess liquidity.
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 25
March 2026.
Lynne Duquemin Patrick Firth
Governance Reports
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and Financial
Statements in accordance with applicable law and regulations. The Companies
(Guernsey) Law, 2008 (the "Company Law") requires the Directors to prepare
financial statements for each financial year. Under that law they have elected
to prepare the financial statements in 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 2025, 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.
The Company continues to comply with the requirements of UK Listing Rules,
LR6.2.3R.
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
25 March 2026
Governance Reports
Directors' Remuneration Report
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. No Director has a service contract with the
Company.
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
The annual fees paid during the year ended 31 December 2025 and 31 December
2024 are shown in the table below:
Annual fees paid Annual fees paid
Year ended 31 December 2025 Year ended 31 December 2024
£ £
Elisabeth Scott (Chair) 42,000 42,000
Patrick Firth 34,000 34,000
Lynne Duquemin 28,000 28,000
Nick Timberlake 28,000 28,000
On 9 December 2025, an increase in the annual directors' fees was approved
effective 1 January 2026 as follows:
· Elisabeth Scott from £42,000 to £45,000
· Patrick Firth from £34,000 to £39,000
· Lynne Duquemin from £28,000 to £31,000
· Nick Timberlake from £28,000 to £31,000
No additional sums were paid in the year to Directors for work on behalf of
the Company outside their normal duties.
A Director is not entitled to any minimum period of notice or to compensation
in the event of their removal as a director.
Governance Reports
Corporate Governance
The Company is a member of the AIC and has elected to follow the AIC Code, as
revised in January 2024. 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 (the "UK Code"), as revised in January 2024.
The AIC Code addresses all the principles and recommendations on issues that
are of specific relevance to investment companies. The Board has noted the
requirements of Provision 29 of the UK Code (AIC Code Provision 34) and,
building on the existing controls review, will develop a plan to address the
requirements relating to material controls at the Company and its service
providers.
The UK Code includes provisions relating to: (i) the role of the chief
executive; (ii) executive directors' remuneration; (iii) a nomination
committee; (iv) a remuneration committee; and (v) 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. A copy of the UK Code is available at frc.org.uk.
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 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 2025, 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 (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 or Nomination Committee, further details of this can be found above
(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.
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.
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 and Risk Committee. Even though the
performance evaluation is deemed effective, the Board may consider having an
external evaluation of the performance in the future.
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 and Risk Committee
All members of the Board are also members of the Audit and Risk Committee. The
Chair of the Audit and Risk Committee is Patrick Firth. The Chair of the Board
is also a member of the Audit and Risk Committee given her extensive
experience and knowledge, in particular given her appointment to the Board of
the Company for more than five years. The Audit and 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 and Risk
Committee.
Governance Reports
Audit and Risk Committee Report
Introduction
The Audit and Risk Committee (the "Committee") report for 2025 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 2025 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
· receiving and considering the auditor's reporting on the
outcome of the statutory audit, including how the audit contributes to the
integrity of the financial statements and the oversight of 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.
Independent Auditor
Deloitte LLP acted as the Independent Auditor of the Company in respect of the
year ended 31 December 2025.
The UK Corporate Governance Code recommends 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 10 years, covering the years ending 31 December 2015 to 31
December 2025. The current audit engagement partner is David Becker
(previously Stuart Crowley), and this is his first year returning to the role,
having previously rotated off the engagement five years ago.
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 at least twelve months and its
longer-term viability for a period of three years, particularly in the light
of new five-year performance-related tender approved by shareholders at the
EGM on 25 March 2026. 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.
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:
2025 2024
£ £
Annual Audit 65,600 62,500
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 2025, and a Bridge letter covering the period from 1 October 2025 to
31 December 2025. The Committee was satisfied that controls relevant to the
Company were operating satisfactorily.
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 and Risk Committee Chair
25 March 2026
Auditor's Report
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 2025 and of its loss 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 to the financial
statements.
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.
Click or tap here to enter text.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
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.
Materiality The materiality that we used in the current year was £1,260,800 which was
determined on the basis of 1% of net assets.
Scoping Audit work to respond to the risks 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., different components
within scope
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 appropriateness of the period covered by the
directors' going concern assessment;
· Evaluating the directors' going concern paper, identifying the
assumptions applied in the going concern assessment and testing the mechanical
accuracy of the current forecasts;
· Assessing the historical accuracy of the previous forecasts,
including the related cost assumptions;
· Inquiring of possible any near-term investment realisation events
and the likelihood of such events;
· Considering the five-yearly conditional performance-related offer
to replace the current redemption facility, the new dividend policy, the
introduction of a dividend re-investment scheme plan, and the adoption of MSCI
India SMID as the appropriate benchmark for the Company;
· Assessing the Company's ability to meet its short-term
obligations by assessing its working capital position and evaluating the
adequacy of its cash flow forecasts;
· Considering significant post-balance sheet events that could
impact the Company's ability to continue as a going concern; and
· Assessing the appropriateness of the going concern disclosures in
the financial statements.
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.
These matters were 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 valuation of the Company's investment in its wholly owned subsidiary, ICG
Q Limited ("ICGQ"), and valuation of directly held investments, is considered
a key audit matter linked to the potential risk of fraud. This is due to the
judgement involved in determining their fair values, which could be subject to
error or deliberate manipulation, and the size of these balances relative to
the financial statements as a whole. The Company measures its investment in
ICGQ and its directly held investments at fair value through profit or loss
(FVTPL).
The Company's investment in its subsidiary, ICGQ, has a fair value of
£61,986,000 as at 31 December 2025 (2024: £105,376,000). The fair value of
ICGQ is determined by its Net Asset Value (NAV) at year end. This is derived
from the fair value of its underlying assets and liabilities, which primarily
comprise listed securities. Consequently, there is a risk that if these
underlying assets and liabilities are materially misstated, the investment
balance recorded in the Company's financial statements will also be misstated.
The Company holds investments in securities listed on Indian Stock Exchanges
with fair value of £64,325,000 as at 31 December 2025 (2024: £65,924,000).
These two combined constitute the financial assets at FVTPL of £126,310,000
as at 31 December 2025 (2024: £171,300,000), which is the most significant
balance on the Statement of Financial Position.
Details of the investments are disclosed in notes 5 and 9 and the accounting
policies relating to them are disclosed in note 1.
How the scope of our audit responded to the key audit matter To test the valuation of the Company's investments in its subsidiary and its
directly held investments as at 31 December 2025, we performed the following
procedures:
· Obtained an understanding of the relevant controls over the
investment valuation process, including the fair value calculations for
directly held investments and ICGQ's underlying investments;
· Assessed the accuracy the unit prices for listed securities (both
directly held and those within ICGQ) by comparing them with those obtained
from independent pricing sources;
· Examined trading volumes, bid-ask spreads, and the frequency of
trading activity to assess the existence of active markets and whether there
is sufficient liquidity to support a Level 1 classification for the listed
securities;
· For ICGQ's NAV, we performed audit procedures on the other
material underlying balances in ICGQ's NAV, including cash, and other assets
and liabilities;
· Recalculated the NAV of ICGQ through reconciling the investment
holdings, the cash holdings and liabilities as at 31 December 2025 to the
closing balance of ICGQ recorded in the Company's financial statements; and
· Assessed the appropriateness of the Company's fair value
disclosures in accordance with IFRS 7 'Financial Instruments: Disclosures' and
IFRS 13 'Fair Value Measurement'.
Key observations Based on the work performed, we concluded that the valuation of the Company's
investment in its subsidiary and the valuation of directly held investments
were 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 £1,260,800 (2024: £1,793,500)
Basis for determining materiality 1% of Net Assets, which is consistent with the prior year.
Rationale for the benchmark applied The Company's investment objective is to provide long-term capital
appreciation by investing in companies based in India. We therefore concluded
that the NAV is the most appropriate benchmark as it is one of the principal
considerations for members of the company in assessing financial performance
and represents total shareholders' interests.
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 2025 audit
(2024: 70%). In determining performance materiality, we considered the
following factors:
· our risk assessment, including our assessment of the Company's
overall control environment, including that of the administrator and whether
we were able to rely on controls; and
· our past experience of the audit, which has indicated a low
number of corrected and uncorrected misstatements identified in prior periods.
6.3. Error reporting threshold
We agreed with the Audit and Risk Committee that we would report to them all
audit differences in excess of £63,000 (2024: £89,600), as well as
differences below that threshold that, in our view, warranted reporting on
qualitative grounds. We also report to the Audit and Risk Committee on
disclosure matters that we identify when assessing the overall presentation of
the financial statements.
7. An overview of the scope of our audit
7.1 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.
7.2 Our consideration of the control environment
The Board of Directors delegates its investment management and the
administration and company secretarial duties to service providers. Details of
the Board's delegation of functions are described in the directors' report.
As part of our risk assessment, we assessed the control environment in place
at the administrator and obtained an understanding of the relevant controls
such as those in relation to our key audit matter and the financial reporting
cycle. This involved reviewing the assurance report on controls and obtaining
a bridging letter to cover the entire year ended.
We decided not to rely on controls as the Company does not perform significant
automated processing of large volumes of data, and the control environment is
predominantly manual in nature.
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 of the
financial statements, the investment manager has developed a scoring model in
which companies they invest in are tracked for their climate risk processes
and disclosures. We have considered whether information included in the
climate-related disclosures in the annual report is materially consistent with
the financial statements and the 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 statement of directors' responsibilities, 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 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. 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, and key drivers for directors' remuneration, bonus levels and
performance targets;
· results of our enquiries of the administrator, investment
manager, 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 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 valuation of the Company's investment in
its subsidiary and valuation of directly held investments.
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
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. These included the Guernsey Financial Services Commission (GFSC)
regulatory requirements.
11.2. Audit response to risks identified
As a result of performing the above, we identified valuation of the Company's
investment in its subsidiary and valuation of directly held investments as a
key audit matter related to the potential risk of fraud. The key audit matters
section of our report explains the matter in more detail and also describes
the specific procedures we performed in response to that 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 the administrator, the investment manager, the audit
& risk committee and external legal counsel 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 those charged with governance, and
reviewing correspondence with the Guernsey Financial Services Commission
(GFSC); 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 including internal specialists and
component audit teams and remained alert to any indications of fraud or
non-compliance with laws and regulations throughout the audit.
Report on other legal and regulatory requirements
12. Corporate Governance Statement
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 above;
· 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 above;
· the directors' statement on fair, balanced and understandable
set out above;
· the Board's confirmation that it has carried out a robust
assessment of the emerging and principal risks set out above;
· the section of the annual report that describes the review of
effectiveness of risk management and internal control systems set out above;
and
· the section describing the work of the Audit and Risk Committee
is set out above.
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 ; or
· the financial statements are not in agreement with the accounting
records.
We have nothing to report in respect of these matters.
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.
David Becker
For and on behalf of Deloitte LLP
Recognised Auditor
St Peter Port, Guernsey
25 March 2026
Financial Statements
Statement of Comprehensive Income
2025 2024
Notes Revenue £'000 Capital £'000 Total Total(1)
£'000
£'000
Revenue £'000 Capital £'000
Income
Dividend income 497 - 497 471 - 471
Net (loss)/gain on financial assets at fair value through profit or loss 5 - (18,401) (18,401) - 26,400 26,400
Management fee contribution from subsidiary 11 1,062 - 1,062 1,464 - 1,464
Total income 1,559 (18,401) (16,842) 1,935 26,400 28,335
Expenses
Foreign exchange loss (778) - (778) (531) - (531)
Management fees 11 (1,787) - (1,787) (1,944) - (1,944)
Operating expenses 3 (646) - (646) (706) - (706)
Transaction costs - (61) (61) - (84) (84)
Total expenses (3,211) (61) (3,272) (3,181) (84) (3,265)
(Loss)/profit for the year before taxation (1,652) (18,462) (20,114) (1,246) 26,316 25,070
Taxation 6 (89) 546 457 (93) (1,537) (1,630)
Total comprehensive (loss)/income for the year (1,741) (17,916) (19,657) (1,339) 24,779 23,440
Basic and diluted (loss)/ earnings per Ordinary 4 (23.23) 27.04
Share (pence)
The Total column of this statement represents the Company's statement of
comprehensive income, prepared in accordance with IFRS Accounting Standards
("IFRS") adopted by the UK. The supplementary revenue and capital columns are
both prepared under guidance published by the Association of Investment
Companies (the "AIC") Statement of Recommended Practice: Financial Statements
of Investment Trust Companies and Venture Capital Trusts (the "SORP"), as
disclosed in the Basis of Preparation in Note 1.
Investment management fees receivable from ICG Q Limited (the "Subsidiary" or
"ICG Q") are calculated based on the ICGQ NAV.
In the prior year, transaction costs were presented within the revenue column;
in the current year they have been presented within the capital column to
align with the AIC SORP guidance.
Total comprehensive income as defined by IAS 1 "Presentation of Financial
Statements" represents the profit or loss after tax. The Company has no items
of other comprehensive income as defined by IFRS and all the amounts presented
in the Statement of Comprehensive Income arise from continuing operations.
The Notes below form part of these Financial Statements
Financial Statements
Statement of Financial Position
2025 2024
Notes £'000 £'000
Non-current asset
Financial assets at fair value through profit or loss 5 126,310 171,300
Current assets
Cash and cash equivalents 13 1,120 9,507
Trade and other receivables 786 1,337
1,906 10,844
Current liabilities
Trade and other payables (241) (277)
Net current assets 1,665 10,567
Non-current liabilities
Deferred taxation 6 (1,887) (2,510)
Net assets 126,088 179,357
Equity
Share capital 8 673 858
Reserves 125,415 178,499
Total equity 126,088 179,357
Number of Ordinary Shares in issue 8 67,322,124 85,810,644
Net asset value per Ordinary Share (pence) 187.29 209.01
.
The Financial Statements were approved and authorised for issue by the Board
of Directors on 25 March 2026 and signed on its behalf by:
Lynne
Duquemin
Patrick Firth
The Notes below form part of these Financial Statements.
Financial Statements
Statement of Changes in Equity
Share Capital £'000 Capital Reserve £'000 Revenue Reserve £'000 Other Distributable Reserve £'000 Total £'000
Note
Balance as at 1 January 2025 858 135,919 (10,524) 53,104 179,357
Total comprehensive loss for the year - (17,855) - (1,802) (19,657)
Share repurchase 8 (185) - - (33,427) (33,612)
Balance as at 31 December 2025 673 118,064 (10,524) 17,875 126,088
Share Capital £'000 Capital Reserve £'000 Revenue Reserve £'000 Other Distributable Reserve £'000 Total £'000
Note
Balance as at 1 January 2024 963 111,056 (10,524) 72,007 173,502
Total comprehensive income for the year - 24,863 - (1,423) 23,440
Share issue 8 63 - - 11,390 11,453
Share repurchase 8 (168) - - (28,870) (29,038)
Balance as at 31 December 2024 858 135,919 (10,524) 53,104 179,357
The Notes below form part of these Financial Statements.
Financial Statements
Statement of Cash Flows
2025 2024
Note £'000 £'000
Cash flows from operating activities
Operating (loss)/profit (20,114) 25,070
Adjustments for:
Net loss/(gain) on financial assets at fair value through profit or loss 18,401 (26,400)
Foreign exchange loss 778 531
Dividend income (497) (471)
Decrease/(increase) in other receivables and prepayments 550 (1,146)
(Decrease)/increase in payables and accruals (35) 23
Cash used in operations before dividends and tax (917) (2,393)
497 471
Dividend income
Taxes paid (166) (213)
Net cash flows used in operating activities (586) (2,135)
Cash flows from investing activities
Acquisition of investments 5 (15,567) (30,381)
Disposal of investments 5 42,156 55,130
Net cash flows generated from investing activities 26,589 24,749
Cash flows from financing activities
Issue of shares - 11,453
Redemption of shares (33,612) (29,038)
Net cash flows used in financing activities (33,612) (17,585)
Net (decrease)/increase in cash and cash equivalents during the year (7,609) 5,029
Cash and cash equivalents at the start of the year 9,507 5,009
Foreign exchange losses (778) (531)
Cash and cash equivalents at the end of the year 13 1,120 9,507
The presentation of dividend income has been reclassified from investing
activities to operating activities for the years ending 31 December 2024 and
31 December 2025 as it forms part of the Company's ordinary
revenue‑generating operations.
The Notes below form part of these Financial Statements.
Notes to the Financial Statements
1. Material accounting policies
Basis of accounting
The Audited Financial Statements (the "Financial Statements") have been
prepared in accordance with IFRS Accounting Standards ("IFRS") as adopted by
the UK and interpretations adopted by the International Accounting Standards
Board ("IASB") and are in compliance with the Companies (Guernsey) Law, 2008,
as amended. The Company's Guernsey registration number is 43916.
Basis of preparation
The Financial Statements for the year ended 31 December 2025 have been
prepared under the historical cost convention. The Company's financial assets,
including its listed equity investments, are measured at fair value.
Where the presentational guidance contained in the Statement of Recommended
Practice (the "SORP") for Investment Trust Companies and Venture Capital
Trusts, issued by the Association of Investment Companies (the "AIC") in
November 2014 and effective in its July 2022 revision, is consistent with the
requirements of IFRS, the Directors have prepared the Financial Statements in
accordance with that guidance, as applicable to a Guernsey incorporated
company (a further revision to the SORP was published in December 2025;
however, this updated version is not effective for the current reporting
period). In line with industry practice, the statement of comprehensive income
includes supplementary information distinguishing between items of a revenue
nature and those of a capital nature.
Going concern
The Board made an assessment of the Company's ability to continue as a going
concern for at least 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 (75.2% 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). In making this
assessment, the Board has considered cashflow projections covering a period of
two years.
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 introduced a Redemption Facility which gave the
ordinary shareholders the ability to redeem part or all of their shareholding
at a Redemption Point every two years. The first and second Redemption Points
were on 31 December 2021 and 31 December 2023 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 third Redemption Point was on 29 November 2025, when valid redemption
requests were received in respect of 16,967,020 ordinary shares (20.1% of the
then issued share capital) which were subsequently redeemed under the
Redemption Facility at a total cost of £31.0m in accordance with the
announced redemption price on 8 December 2025. Also during 2025, as part of
the Board's strategy to manage the share price discount to NAV, the Company
bought back 1.5m ordinary shares at a significant discount to NAV at a cost of
£2.6m. Since the year end the Company has bought back a further 1.1m ordinary
shares at a significant discount to NAV at a cost of £1.7m.
The Redemption Facility has now been replaced with a five-year conditional
performance-related tender for up to 25% of the Company's issued share capital
following the passing of a shareholders' resolution at an EGM on 25 March
2026. The Company's investment strategy requires a long-term, bottom-up
investment approach which is built on capturing the structural growth of high
quality Indian Small-Cap and Mid-Cap companies. Therefore, the Board believes
that the Performance Related Tender is better suited to the Company's strategy
and its long-term investment philosophy than the Redemption Facility. The
Company's investments typically require several years to mature, and a
five-year holding period more realistically reflects the time needed for
company fundamentals to compound and valuation gaps to close. Moving from a
two-year redemption cycle to a five-year cycle therefore strengthens alignment
between the Company's investment horizon and its liquidity framework, enabling
the portfolio to be managed with greater conviction, lower trading friction,
and reduced pressure to maintain excess liquidity.
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.
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.
Investment Management fees
Investment management fees are payable to the Investment Manager in accordance
with the Investment Management Agreement (see note 11). Investment management
fees are charged based on the assets of ICGF, including those held within its
subsidiary ICG Q, and this amount is recognised as an expense in the revenue
column of the statement of comprehensive income. ICG Q bears the proportion of
the investment management fee that relates to the assets held within ICG Q,
and this contribution towards the investment management fee is recognised as
income in the revenue column of the statement of comprehensive income.
Taxation
Tax is accounted for at the rates applicable to the jurisdictions in which the Company and its subsidiary operate. Current tax is recognised on taxable profits for the year, based on tax laws and rates that have been enacted or substantively enacted at the reporting date. The Company is exempt from Guernsey income tax on non‑Guernsey source income but is subject to withholding taxes on investment income and to Indian capital gains tax on the disposal or revaluation of Indian equity investments, as described in Note 6.
In accordance with the AIC SORP, tax arising on capital items is allocated to the capital column of the Statement of Comprehensive Income, and tax arising on revenue items is allocated to the revenue column.
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
Investments in subsidiary
The Company's investment in ICG Q Limited ("ICG Q") is measured at Fair Value through Profit or Loss ("FVTPL") as both the Company and ICG Q meet 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 measured 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, is its unadjusted net asset value ("NAV"). ICG Q's
investments are measured at FVTPL, fair value is determined by reference to
the market closing price ruling at the statement of financial position date,
or if this is not available, the latest closing price from the Investment
Manager.
Impact of IFRS 10 "Consolidated Financial Statements"
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 below:
(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, River Global Investors LLP;
(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.
IFRS 10 requires investment entities to fair value all subsidiaries that are
themselves investment entities. As the subsidiary also meets the criteria of
an investment entity, it has not been consolidated. On the basis of the above,
these Financial Statements represent the standalone results of the Company.
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 First in First out ("FIFO") 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 "Financial
Instruments". 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.
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 and 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
Although the Company's underlying investments are predominantly located in
India, the Board has determined that Sterling (£) is the Company's functional
currency. This reflects the fact that the Company's shares are denominated in
Sterling, capital is raised in Sterling, and the majority of its operating
expenses are incurred in Sterling. Sterling has therefore been adopted as both
the functional and presentational currency of the financial statements.
Monetary assets and liabilities denominated in foreign currencies are
translated into Sterling at the exchange rates prevailing at the statement of
financial position date. Transactions in foreign currencies, including
investment purchases and sales, income and expenditure, are translated at the
exchange rates ruling on the dates of the transactions. Foreign exchange gains
and losses arising from translation are recognised in the profit or loss
section of 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 "Financial Instruments: Presentation" 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:
· IAS 21 "The Effects of Changes in Foreign Exchange Rates" - Lack of
Exchangeability: The amendments contain guidance to specify when a currency is
exchangeable and how to determine the exchange rate when it is not.
The above amendment did not have a material impact on the Company's financial
statements.
Standards and interpretations published, but not yet effective for the annual
period beginning on 1 January 2026, 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 Measurement of
Financial instruments" (applicable for annual periods beginning on or after 1
January 2026); and
· amendments to IFRS 19 "Subsidiaries without Public Accountability:
Disclosures" (applicable for annual periods beginning on or after 1 January
2027).
The above amendments are not expected to have a material impact on the
Company's Financial Statements.
IFRS 18 "Presentation and Disclosure in Financial Statements" (applicable for
annual periods beginning on or after 1 January 2027)
IFRS 18 was issued in April 2024 and replaces IAS 1 "Presentation of
Financial Statements". The new standard introduces revised presentation
requirements for the primary financial statements, including new categories
and required subtotals in the statement of profit or loss, enhanced
aggregation and disaggregation principles, and new disclosure requirements for
management‑defined performance measures. The Company will apply IFRS 18
for annual reporting periods beginning on or after 1 January 2027. The Company
does not plan to adopt the standard early. Based on the Company's current
operations and reporting structure, IFRS 18 is not expected to have a
material impact on the Company's financial statements, although it will result
in changes to the presentation and disclosure of primary statements and
related notes.
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
There are no critical accounting judgements that require disclosure under IAS
1 "Presentation of Financial Statements".
Key sources of estimation uncertainty
The Company invests in listed securities, and the valuation of these
investments does not require the use of significant estimates. The underlying
investments held by ICG Q are also listed, and the remaining components of ICG
Q's net asset value comprise instruments that do not involve estimation
techniques. Accordingly, the Company has no key sources of estimation
uncertainty requiring disclosure under IAS 1. Details of the valuation
methodologies applied to the Company's investments are provided in Note 9.
3. Operating expenses
2025 2024
£'000 £'000
Administration and secretarial fees 93 96
Audit fees 62 69
Broker fee 36 43
Directors' and officers' insurance 17 8
Directors' fees 135 132
Directors' expenses 6 12
Marketing expenses 70 81
Professional fees 62 132
Registrar fee 24 16
Regulatory fees 31 40
Other expenses 110 77
646 706
4. Basic and diluted (loss)/earnings per share
(Loss)/earnings per Ordinary Share and the fully diluted (loss)/earnings per
share are calculated on the loss for the year of £19,657,000 (2024: profit of
£23,440,000) divided by the weighted average number of Ordinary Shares in
issue (excluding Treasury shares) of 84,599,708 (2024: 86,682,493).
5. Financial assets at fair value through profit or loss ("FVTPL")
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 an investment in the wholly owned subsidiary ICG Q
Limited. A summary of the movements is shown below:
2025 2024
£'000 £'000
Fair value at the beginning of year 171,300 169,649
Disposal of investments (42,156) (55,130)
Acquisition of investments 15,567 30,381
Realised gains on disposal of investments 26,214 41,306
Unrealised losses on revaluation of investments (44,615) (14,906)
Fair value at the end of the year 126,310 171,300
The net realised and unrealised losses above totalling £18,401,000 (2024:
gains of £26,400,000) on financial assets at FVTPL comprise a loss on the
Company's holding in ICG Q Limited of £10,122,000 (2024: gain of
£19,017,000) and losses of £8,279,000 (2024: gains of £7,383,000) arising
from investments held directly by the Company.
The Company's investment in ICG Q Limited is valued at its NAV, calculated
under IFRS, the movement in which is comprised of the following components, as
set out below.
2025 2024
£'000 £'000
Dividend income 606 599
Unrealised loss on financial assets at FVTPL (31,229) (3,923)
Foreign exchange (loss)/gain (5,335) 285
Realised gain on disposal of investments 26,608 28,188
Investment management fees (1,062) (1,464)
Other operating expenses (100) (98)
Withholding tax on dividend income (129) (125)
Tax refund - 75
Other taxes 626 (4,416)
Transaction costs (107) (104)
Fair value movement in the Company's investment in ICG Q Limited (10,122) 19,017
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
Income tax comprises current and deferred tax. Current tax is the expected tax
payable on taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date. Deferred tax is recognised on
temporary differences between the carrying amounts of assets and liabilities
and their tax bases, measured using the tax rates expected to apply when the
temporary differences reverse. Deferred tax assets are recognised only to the
extent that it is probable that future taxable profits will be available.
Guernsey
The Company is exempt from Guernsey income tax on non‑Guernsey source income
under The Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 (as amended).
An annual exemption fee of £1,600 was paid for the year (2024: £1,200).
Accordingly, the Company had no current tax charge for the year ended 31
December 2025 (2024: £Nil).
India
Capital gains tax
Capital gains arising on the disposal of Indian equity investments are subject
to Indian Capital Gains Tax Regulations. Short‑term gains are taxed at 20%
and long‑term gains at 12.5%. Although tax is only payable upon disposal,
the Company and its subsidiary recognise a deferred tax liability on
unrealised gains in accordance with IAS 12. Amounts paid during the year in
respect of realised gains totalled £104,000 (2024: £120,000).
Dividend withholding tax
Dividend income from Indian companies is subject to withholding tax at source.
The withholding tax charge for the year was:
· Company: £89,000 (2024: £93,000)
· Subsidiary: £129,000 (2024: £125,000)
Reconciliation of tax to accounting profit
2025 2024
£'000 £'000
Taxation per statement of comprehensive income (457) 1,630
(Loss)/profit before tax (20,114) 25,070
Income tax charge at Guernsey rate (0%) - -
Effect of:
Indian withholding tax 89 93
Indian capital gains tax paid 77 120
Deferred tax (credit)/expense (623) 1,417
Total tax (credit)/expense (457) 1,630
Deferred tax liabilities - Indian capital gains
2025 2024
£'000 £'000
At 1 January 2,510 1,093
Movement in year (623) 1,417
At 31 December 1,887 2,510
At 31 December 2025, deferred taxation liability relating to Indian capital gains tax of the subsidiary was £5,553,917 (2024: £8,859,308). These amounts are not included in the tables above.
Deferred tax liabilities arise from unrealised gains on Indian equity investments. These liabilities will crystallise upon disposal of the underlying investments. No deferred tax assets have been recognised as the Company does not expect to generate taxable profits in Guernsey.
Pillar Two top‑up tax
As at 31 December 2025, India had not enacted or substantively enacted Pillar Two legislation.
Guernsey implemented Pillar Two from 1 January 2025; however, the rules apply only to multinational groups with consolidated revenue above €750 million and therefore do not apply to the Company.
Tax uncertainties and judgements
The principal tax judgement relates to the measurement of deferred tax on unrealised gains in India. The calculation requires judgement regarding:
· classification of gains as short‑term or long‑term
· expected holding periods
· applicable tax rates
· timing of future disposals
Management considers the assumptions used to be appropriate based on the investment strategy and historical holding periods.
For information on taxation risk please see below.
6. Segmental information
The Board has considered the provisions of IFRS 8 "Operating Segments" 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 these Financial Statements
as elaborated in the Directors' Report to disclose the underlying information.
8. Share Capital
Authorised Share Capital
Unlimited number of Ordinary Shares of £0.01 each
Issued and Paid Share Capital
2025 2024
Number of shares Share Capital Number of shares Share Capital
£'000 £'000
Ordinary shares of £0.01 each:
Brought forward 85,810,644 858 96,330,656 963
Shares issued from Treasury - - 5,828,500 58
Shares bought back to Treasury (1,521,500) (15) (1,613,512) (16)
Redemption Shares redeemed (16,967,020) (170) (15,159,876) (151)
Redemption Shares sold - - 424,876 4
Carried forward 67,322,124 673 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.
Shares bought back to Treasury
A total of 1,521,500 ordinary shares was bought back during the year ended 31
December 2025 at an average price of £1.7166 per share. These shares were
transferred from the Issued Share Capital Account to the Treasury Shares
Account and were purchased at a discount to the NAV per share.
Redemption Shares redeemed to Treasury
In accordance with the Company's Redemption Facility dated 28 November 2025, on 17 December 2025 the Company redeemed 16,967,020 ordinary shares (Redemption Shares) at 182.71p per share for a total cost of £31,000,120.
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.
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 2025 is as follows:
Level 1 Level 2 Level 3 Total
£'000 £'000 £'000 £'000
Listed securities 64,324 - - 64,324
Investment in subsidiary - 61,986 - 61,986
Total 64,324 61,986 - 126,310
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
Investment in subsidiary - 105,376 - 105,376
Total 65,924 105,376 - 171,300
The Company's investment in ICG Q Limited, the Company's wholly owned
subsidiary, is classified as level 2 in the fair value hierarchy, as it is
priced based on the subsidiary's NAV as calculated as at the reporting date,
notwithstanding that all the underlying investments of ICG Q Limited are
categorised as level 1 at 31 December 2025 and 2024. 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.
At 31 December 2025, there were no movements between the fair value hierarchy
levels and no changes in valuation techniques (31 December 2024: None).
10. Financial risk management
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:
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 2025, 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 is the risk that the fair value of financial instruments
held by the Group may fluctuate as a result of changes in market prices. Such
movements may result in gains or losses and arise from the uncertainty
surrounding future market values of the Group's investment portfolio and other
financial assets.
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 investment strategy.
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.
The Group's investment portfolio 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 (2025: 98.8%;
2024: 94.8%) to any movement in the BSE Mid Cap Total Return Index.
At 31 December 2025, with all other variables held constant, this
approximation would produce a movement in the net assets of the Group's
investment portfolio of £13,189,325 (2024: £18,089,065) for a 10% (2024:
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.
Concentration risk
At 31 December 2025, the Group held 34 investments, representing 98.8% of NAV
(2024: 36 investments representing 94.8% of NAV). Although the portfolio
comprises a number of individual holdings, the Group is exposed to
concentration risk as all of its investments are located in India. In
accordance with its Investment Policy, the Group seeks to mitigate this risk
through maintaining diversification across sectors, industries and issuers
within the Indian market.
Foreign currency risk
Foreign currency risk arises from movements in exchange rates and represents the potential impact on the Company's results from holding assets denominated in currencies other than pounds sterling ("GBP" or "Sterling"), the Company's functional and presentation currency. As a portion of the Company's investment portfolio is denominated in foreign currencies, the Statement of Financial Position may be materially affected by fluctuations in those exchange rates.
The Group's investment portfolio is predominantly denominated in Indian Rupees ("INR"), while reporting, including the reported NAV, is in Sterling. Movements in the INR/GBP exchange rate therefore have a direct impact on the Company's performance, and the principal foreign currency exposure of the Group relates to the Indian Rupee.
The Group's policy is not to hedge its Rupee exposure. Although the Group may
consider hedging from time to time, appropriate mechanisms on acceptable terms
are not generally expected to be readily available.
Assets Liabilities Net exposure
£'000 £'000 £'000
At 31 December 2025 Indian Rupee 132,909 - 132,909
At 31 December 2024 Indian Rupee 184,490 - 184,490
The Company's exposure and sensitivity to a change of 10% in foreign exchange rates is detailed in the following table:
Increase/decrease in exchange rate Effect on net assets
£'000
At 31 December 2025 Indian Rupee +10% 13,291
Indian Rupee -10% (13,291)
At 31 December 2024 Indian Rupee +10% 18,449
Indian Rupee -10% (18,449)
The sensitivity rate of 10% for Indian Rupee as at 31 December 2025 (31
December 2024: 10%) is regarded as reasonable given the historical volatility
of the Indian Rupee against pounds sterling.
At 31 December 2025, if the Indian Rupee had strengthened or weakened by 10%
(2024: 10%) against Sterling with all other variables held constant, the total
comprehensive income for the year would have been £13,291,000 (2024:
£18,449,000) higher or lower, respectively, mainly as a result of foreign
exchange gains or losses on translation of Indian Rupee denominated financial
assets measured 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, of which there have been none during the
year, would be effected 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 2025 was £581,262 (2024:
£3,127,763).
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 domestic long-term credit rating of AAA
(2024: AAA) (CRISIL Ratings - a S&P company).
As at 31 December 2025, the Company held £538,413 (2024: £6,379,456) with
HSBC Bank plc.
The Company's maximum credit exposure is limited to the carrying amount of financial assets recognised at the reporting date, as summarised below:
Within one year 2025 2024
£'000 £'000
Financial assets at fair value through profit or loss 126,310 171,300
Cash and cash equivalents 1,120 9,507
Trade and other receivables (excluding prepayments) 769 1,325
128,199 182,132
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.
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. Material agreements
Investment Management Agreement - River Global Investors LLP
On 9 April 2025, the Board of the Company agreed to novate the Investment
Management and AIFM Agreement entered into with Ocean Dial Asset Management
Limited ("ODAM") on 19 September 2017 to River Global Investors LLP and SVM
Asset Management Limited (trading as RGI Fund Management) ("SVM") respectively
with no change to their terms. SVM is a member of River Global PLC (previously
AssetCo plc) ("River Global") which acquired ODAM on 2 October 2023 and this
novation is the final part of the planned integration of ODAM into River
Global's other active equity asset management businesses.
The Investment Management Agreement may be terminated with either the
Investment Manager or the Company giving 12 months' written notice. In
addition, the Company and the Investment Manager may terminate the Investment
Management Agreement in certain limited circumstances.
During the year 2025, the investment management fee was equivalent to 1.25%
per annum (2024: 1.25%) 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 £1,787,000 in management
fees during the year ended 31 December 2025 (2024: £1,944,000) of which
£180,868 was outstanding at 31 December 2025 (2024: £181,000). From March
2024, the method of calculation for these fees was updated. Investment
management fees receivable from ICG Q are calculated based on the NAV of ICG
Q. Investment management fees payable to River Global Investors LLP are based
on the assets of ICGF.
Administration Agreement - Apex Fund and Corporate Services (Guernsey) Limited
Effective 5 August 2019, the Company's appointed administrator, Apex Fund and
Corporate Services (Guernsey) Limited ("Apex", or the "Administrator") was
entitled to an annual fee payable by the Company as follows: 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. During the
year, the Administrator earned £93,000 for administration and secretarial
services (31 December 2024: £96,000) of which £23,000 was outstanding at 31
December 2025 (31 December 2024: £24,000).
Effective 1 October 2025, the Board agreed to an amended administration fee
basis, subject to satisfactory performance by the Administrator under its
Service Level Agreement approved on 9 December 2025, as set out below:
· A minimum annual fee of £45,000 or a fee of 5 basis points of
the NAV of the Company; and
· An annual Financial Reporting Fee of £22,500 (charged at a rate
of £15,000 per annum from 1 October 2024 to 31 March 2026 increasing to
£22,500 per annum from 1 April 2026); and
· An annual Company Secretarial fee of £35,000 (charged at a rate
of £21,250 per annum from 1 October 2024 to 31 March 2026, increasing to
£35,000 per annum from 1 April 2026).
Apex Fund Services (Mauritius) Ltd, a subsidiary of Apex Group Ltd (the parent
of the Administrator), acts as administrator to the Company's subsidiary ICG
Q. During the year, the subsidiary's administrator earned fees totalling
£25,623 (2024: £25,498).
The Administration Agreement may be terminated by either party giving not less
than 3 months' written notice.
12. Related party transactions
The Directors are responsible for the determination of the investment policy
and have overall responsibility for the Company's activities and are therefore
regarded as related parties.
Directors' remuneration
Directors' remuneration is set out in the Directors' remuneration report.
Investment Management Agreement
River Global Investors LLP acts as the Company's Investment Manager under the
terms of the Investment Management Agreement. Under this agreement, the
Investment Manager has responsibility for the day‑to‑day discretionary
management of the Company's portfolio in accordance with the Company's
investment objective and policy, subject to the overall supervision of the
Directors and the investment restrictions set out in the Investment Management
Agreement. The Investment Manager is entitled to receive a management fee for
these services, and details of the fees charged during the year and amounts
outstanding at the reporting date are provided in Note 11.
Shares held by related parties
At 31 December 2025, Directors and their immediate families held the following
numbers of shares beneficially:
Ordinary shares
2025 2024
Elisabeth Scott 50,000 50,000
Patrick Firth 25,000 25,000
Lynne Duquemin 25,200 19,125
Nick Timberlake 57,500 50,000
13. Cash and cash equivalents
Cash and cash equivalents are comprised of:
2025 2024
£'000 £'000
Cash at bank 1,120 5,307
Short-term investment - 4,200
1,120 9,507
14. Commitments
As at 31 December 2025, the Company had no unrecognised contractual
commitments to make further investments in investee entities as at the
reporting date (31 December 2024: no commitments).
15. Ultimate controlling party
In the opinion of the Directors, the Company has no ultimate controlling
party.
16. Subsequent events
On 25 March 2026, at an EGM of the Company, shareholders resolved to replace
the Company's existing Redemption Facility with a five-year conditional
performance-related tender for up to 25% of the Company's issued share
capital, and approved the introduction of an annual dividend, to be paid
semi-annually.
On 16 March 2026, it was announced that Liontrust Asset Management plc
("Liontrust") had agreed to acquire River Global Holdings Ltd, the parent of
the Investment Manager, River Global Investors LLP, subject to shareholder and
FCA approval. The investment team remains unchanged, continuing to manage the
portfolio from Mumbai and London using the same process and philosophy and the
Board supports the transaction, noting Liontrust's strong alignment with the
Company's long‑term active investment approach.
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 2025.
Alternative Performance Measures (Unaudited)
The Board and the Investment Manager assess the Company's performance using a
variety of measures that are not defined under IFRS and are therefore classed
as Alternative Performance Measures ("APMs"). These include certain financial
and operational highlights and key financials. The definition of each of these
APMs is shown below. These APMs are used to present a clearer picture of how
the Company has performed over the year and are all financial measures of
historical performance.
APMs are not defined within IFRS Accounting Standards ("IFRS") as issued by
the International Accounting Standards Board ("IASB") therefore, they may not
be directly comparable with similarly titled measures presented by other
entities.
Share Price Premium/(Discount)
The share price of an investment company reflects the price at which its
shares are traded between buyers and sellers on the stock market. This
market‑determined price is different from the Company's net asset value
("NAV") per share. When the share price is below the NAV per share, the shares
are said to trade at a discount, which typically indicates a greater supply of
shares than demand. Conversely, when the share price exceeds the NAV per
share, the shares are regarded as trading at a premium. The discount is
expressed as a percentage of the NAV per share, and provides a useful measure
of the Company's share price relative to its NAV.
2025 2024
pence pence
NAV per share (a) 187.29 209.01
Share price per share (b) 170.00 192.50
Discount ((b-a)/a) (c) (9.2%) (7.9%)
Ongoing Charges
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.
2025 2024
£'000 £'000
Management fee 1,787 1,944
Directors' fees 141 133
Mauritian subsidiary operating expenses 100 97
Administration fee 79 84
Audit fee 62 63
Other expenses 364 430
Ad-hoc non-recurring expenses (19) (91)
Total ongoing and recurring expenses (a) 2,514 2,660
Average monthly net assets (b) 154,759 168,647
Ongoing charges (a/b) (c) 1.62% 1.58%
NAV and Share Price Total Return
Total NAV return/total share price return are calculations showing how the
NAV/share price per share has performed over a period of time, taking into
account, if applicable, dividends paid to shareholders. This provides a useful
measure to allow shareholders to compare performances between investment
funds. No dividends were paid by the Company during the year (2024: no
dividends paid).
2025
Total NAV return Total share price return
Opening NAV/share price per share 209.01p 192.50p
0193.77p
Closing NAV/share price per share 187.29p 170.00p
Movement in NAV/share price in the year (21.72)p (18.50)p
Total NAV/share price return (10.4)% (11.7)%
2024
Total NAV return Total share price return
Opening NAV/share price per share 180.11p 173.00p
Closing NAV/share price per share 209.01p 192.50p
Movement in NAV/share price in the year 28.90p 19.50p
Total NAV/share price return 16.0% 11.3%
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