UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08266
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The India Fund, INC.
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(Exact name of registrant as specified in charter)
200 Park Avenue
New York, NY 10166
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(Address of principal executive offices) (Zip code)
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
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(Name and address of agent for service)
Registrant's telephone number, including area code: 212-667-4939
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Date of fiscal year end: December 31, 2004
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Date of reporting period: June 30, 2004
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
The India Fund, Inc.
Semi-Annual Report
June 30, 2004
THE INDIA FUND, INC.
THE INDIA FUND, INC.
August 24, 2004
DEAR FUND SHAREHOLDER,
We are pleased to present you with the unaudited financial statements of The
India Fund, Inc. (the "Fund") for the six-month period ended June 30, 2004.
The Fund's net asset value ("NAV") closed at $19.82 on June 30, 2004,
representing a decrease of 16.58% from the Fund's NAV on December 31, 2003. The
Fund outperformed its benchmark, the IFC Investable Index ("IFC"), which
decreased 17.28% for the same six-month period.
The Indian stock market endured a volatile first-half of 2004 as general
elections yielded a new leadership. Uncertainty over the new government's
commitment to economic reforms shook confidence in the markets. In the annual
Budget announcement held in July, the new government addressed problems such as
the fiscal deficit and poor infrastructure by pledging increased tax revenues
and increased spending on infrastructure projects. The government also assuaged
fears of a slowdown in economic reforms by easing limits in foreign direct
investment in key sectors and lowering the turnover tax. Foreign investment,
slowed down by political events, remained positive as foreign institutional
inflow reportedly totaled over $3.47 billion during the first-half of calendar
year 2004.
Looking ahead, India faces the challenge of a new leadership while keeping a
fragile coalition together. In addition, monsoons will be closely watched as the
season started in disappointing fashion. Monsoons are an important catalyst for
agricultural growth as 60% of India's population (20% of GDP) is geared to the
rural economy. Nevertheless, we believe valuations look more compelling than
they did at the end of 2003 and we remain positive in the long-term fundamental
outlook for India.
1
THE INDIA FUND, INC.
On behalf of the Board of Directors, we thank you for your participation and
continued support of the Fund. If you have any questions, please do not hesitate
to call our toll-free number (800) 421-4777.
Sincerely,
/s/ Bryan McKigney
Bryan McKigney
Director, Chairman and President
2
THE INDIA FUND, INC.
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FUNDAMENTAL PERIODIC REPURCHASE POLICY
The Fund has adopted the following fundamental policy regarding periodic
repurchases:
a) The Fund will make offers to repurchase its shares at semi-annual
intervals pursuant to Rule 23c-3 under the Investment Company Act of
1940, as amended from time to time ("Offers"). The Board of
Directors may place such conditions and limitations on Offers as may
be permitted under Rule 23c-3.
b) 14 days prior to the last Friday of the Fund's first and third
fiscal quarters, or the next business day if such Friday is not a
business day, will be the deadline (the "Repurchase Request
Deadline") by which the Fund must receive repurchase requests
submitted by stockholders in response to the most recent Offer.
c) The date on which the repurchase price for shares is to be
determined (the "Repurchase Pricing Date") shall occur no later than
the last Friday of the Fund's first and third fiscal quarters, or
the next business day if such day is not a business day.
d) Offers may be suspended or postponed under certain circumstances, as
provided for in Rule 23c-3.
(For further details, see Note E to the Financial Statements.)
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3
THE INDIA FUND, INC.
SCHEDULE OF INVESTMENTS JUNE 30, 2004
(UNAUDITED)
INDIA (100% OF HOLDINGS)
COMMON STOCKS (99.99% of holdings)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
-------------------------------------------------------------------------------------------------
CEMENT 0.71%
514,524 Gujarat Ambuja Cements Ltd ...................... $ 3,379,276 $ 3,183,390
5 Panyam Cements and Mineral Industries Ltd+ ...... 47 5
535,069 Ultratech Cemco Ltd*+ ........................... 0 0
------------ ------------
3,379,323 3,183,395
------------ ------------
COMPUTER HARDWARE 0.14%
51,550 HCL Infosystems Ltd ............................. 605,480 613,610
------------ ------------
605,480 613,610
------------ ------------
COMPUTER SOFTWARE & PROGRAMMING 14.67%
189,436 Geodesic Information Systems Ltd ................ 762,106 1,553,396
369,782 Infosys Technologies Ltd ........................ 10,138,352 44,421,294
203,022 KPIT Cummins Infosystems Ltd .................... 1,282,064 1,428,551
143,502 Mphasis BFL Ltd ................................. 644,316 811,539
1,801,729 Satyam Computer Services Ltd .................... 4,097,003 11,970,378
352,365 Tele Data Informatics Ltd ....................... 286,653 267,483
499,650 Wipro Ltd ....................................... 4,911,255 5,782,247
------------ ------------
22,121,749 66,234,888
------------ ------------
COMPUTER TRAINING 0.38%
496,200 NIIT Ltd+ ....................................... 1,821,750 1,736,025
------------ ------------
1,821,750 1,736,025
------------ ------------
CONSUMER NON-DURABLES 7.16%
5,094,201 Hindustan Lever Ltd ............................. 20,375,050 14,105,314
944,745 ITC Ltd ......................................... 15,947,173 18,245,548
------------ ------------
36,322,223 32,350,862
------------ ------------
DIVERSIFIED INDUSTRIES 15.39%
731,432 Grasim Industries Ltd ........................... 6,228,502 16,092,300
5,714,543 Reliance Industries Ltd ......................... 33,094,317 53,397,883
------------ ------------
39,322,819 69,490,183
------------ ------------
ELECTRICITY 0.76%
683,400 Tata Power Company Ltd .......................... 4,213,963 3,448,587
------------ ------------
4,213,963 3,448,587
------------ ------------
4
THE INDIA FUND, INC.
JUNE 30, 2004
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
-------------------------------------------------------------------------------------------------
ELECTRONICS & ELECTRICAL EQUIPMENT 4.88%
206,800 Bharat Electronics Ltd .......................... $ 1,333,706 $ 1,758,531
1,555,768 Bharat Heavy Electricals Ltd. ................... 4,922,904 16,982,320
614,892 Jyoti Structures Ltd+ ........................... 878,824 792,438
916,574 MIRC Electronics Ltd ............................ 523,411 407,699
94,849 Siemens India Ltd ............................... 1,061,014 1,815,489
26,800 Sterlite Industries (India) Ltd ................. 447,248 257,420
------------ ------------
9,167,107 22,013,897
------------ ------------
ENGINEERING 4.91%
300,513 ABB Ltd ......................................... 3,022,327 4,384,320
142,745 Gammon India Ltd. ............................... 1,419,995 1,080,484
802,200 Jaiprakash Associates Ltd+ ...................... 1,839,957 1,789,355
668,836 Larsen & Toubro Ltd ............................. 7,858,716 10,140,558
565,358 Thermax India Ltd ............................... 1,934,139 4,795,859
------------ ------------
16,075,134 22,190,576
------------ ------------
EXTRACTIVE INDUSTRIES 4.07%
442,405 Hindalco Industries Ltd ......................... 7,144,499 9,603,484
641,091 Oil and Natural Gas Corporation Ltd ............. 8,809,715 8,774,476
------------ ------------
15,954,214 18,377,960
------------ ------------
FERTILIZERS 0.16%
331,560 Indo Gulf Fertilisers Ltd ....................... 224,574 728,386
------------ ------------
224,574 728,386
------------ ------------
FINANCE 16.65%
6,895,000 Centurion Bank Ltd+ ............................. 608,763 1,445,738
1,013,335 Corporation Bank ................................ 4,015,897 5,499,230
1,808,008 HDFC Bank Ltd ................................... 8,920,344 14,550,581
1,591,990 Housing Development Finance Corporation Ltd ..... 11,689,281 17,907,507
1,940,279 ICICI Bank Ltd .................................. 5,379,101 10,314,392
330,146 Jammu and Kashmir Bank Ltd ...................... 1,902,477 1,938,867
94,891 Kotak Mahindra Bank Ltd ......................... 836,775 717,539
672,196 Oriental Bank of Commerce ....................... 2,485,227 3,514,134
1,778,633 State Bank of India ............................. 7,659,295 16,660,540
77,550 State Bank of India GDR ......................... 900,935 1,690,590
1,043,300 Vijaya Bank Ltd ................................. 1,231,624 924,730
------------ ------------
45,629,719 75,163,848
------------ ------------
5
THE INDIA FUND, INC.
JUNE 30, 2004
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
-------------------------------------------------------------------------------------------------
FOOD 0.16%
1,294,500 Sakthi Sugars Ltd+ .............................. $ 1,321,790 $ 726,440
------------ ------------
1,321,790 726,440
------------ ------------
HOTELS & LEISURE 0.16%
727,657 Hotel Leelaventure Ltd+ ......................... 606,398 732,010
------------ ------------
606,398 732,010
------------ ------------
HOUSEHOLD APPLIANCES 0.32%
637,251 Voltas Ltd ...................................... 1,674,265 1,442,218
------------ ------------
1,674,265 1,442,218
------------ ------------
MEDIA 0.54%
901,700 Balaji Telefilms Ltd ............................ 1,839,905 1,206,189
749,500 Pritish Nandy Communications Ltd ................ 1,870,991 1,241,423
250,000 Vans Information Ltd+ ........................... 573,395 12,942
------------ ------------
4,284,291 2,460,554
------------ ------------
PETROLEUM RELATED 6.65%
740,253 Bharat Petroleum Corporation Ltd ................ 4,262,604 5,719,954
591,408 Finolex Industries Ltd .......................... 827,475 745,451
1,045,578 Hindustan Petroleum Corporation Ltd ............. 5,133,178 7,649,378
1,446,890 Indian Oil Corporation Ltd ...................... 6,541,946 11,597,150
624,400 Indian Petrochemicals Corporation Ltd ........... 2,465,055 1,993,055
80,800 Niko Resources Ltd ADR .......................... 1,314,053 2,338,513
------------ ------------
20,544,311 30,043,501
------------ ------------
PHARMACEUTICALS 7.57%
67,942 Biocon Ltd+ ..................................... 665,264 740,379
268,708 Dr. Reddy's Laboratories Ltd .................... 3,241,408 4,298,159
106,435 Glaxosmithkline Pharmaceuticals Ltd ............. 670,717 1,375,842
120,827 Lupin Ltd ....................................... 1,651,397 1,668,057
138,600 Matrix Laboratories Ltd ......................... 1,580,880 4,114,287
42,500 Pfizer Ltd ...................................... 410,990 416,865
693,063 Ranbaxy Laboratories Ltd ........................ 11,315,909 13,709,758
614,415 Sun Pharmaceutical Industries Ltd ............... 1,671,496 4,966,104
517,700 Wockhardt Ltd ................................... 2,226,924 2,871,419
------------ ------------
23,434,985 34,160,870
------------ ------------
6
THE INDIA FUND, INC.
JUNE 30, 2004
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
-------------------------------------------------------------------------------------------------
RETAIL STORES 0.17%
132,757 Trent Ltd ....................................... $ 467,324 $ 769,687
------------ ------------
467,324 769,687
------------ ------------
SHIPPING 0.16%
77,700 Dredging Corporation of India Ltd ............... 740,671 726,721
------------ ------------
740,671 726,721
------------ ------------
STEEL 1.77%
501,782 Monnet Ispat Ltd ................................ 1,048,965 769,453
1,103,394 Tata Iron and Steel Company Ltd ................. 3,648,204 7,219,161
------------ ------------
4,697,169 7,988,614
------------ ------------
TELECOMMUNICATIONS 3.22%
4,664,750 Bharti Tele-Ventures Ltd+ ....................... 10,142,864 13,839,519
250,766 Mahanagar Telephone Nigam Ltd ................... 654,574 719,708
------------ ------------
10,797,438 14,559,227
------------ ------------
TELECOMMUNICATIONS EQUIPMENT 0.00%
1 Shyam Telecom Ltd+ .............................. 14 1
------------ ------------
14 1
------------ ------------
TEXTILES-COTTON 0.52%
217,400 Mahavir Spinning Mills Ltd ...................... 823,672 622,291
302,726 Sintex Industries Ltd ........................... 886,823 750,642
549,567 Welspun India Ltd+ .............................. 1,221,821 973,024
------------ ------------
2,932,316 2,345,957
------------ ------------
TRANSPORTATION 1.45%
498,051 Container Corporation of India Ltd .............. 2,780,155 6,120,150
75,020 Mercator Lines Ltd .............................. 348,323 420,830
------------ ------------
3,128,478 6,540,980
------------ ------------
VEHICLE COMPONENTS 0.56%
187,600 Amtek Auto Ltd .................................. 1,836,694 2,081,044
334,200 Omax Autos Ltd .................................. 498,093 436,514
------------ ------------
2,334,787 2,517,558
------------ ------------
7
THE INDIA FUND, INC.
JUNE 30, 2004
SCHEDULE OF INVESTMENTS (CONCLUDED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
-------------------------------------------------------------------------------------------------
VEHICLES 6.86%
11,740,900 Ashok Leyland Ltd ............................... $ 2,526,477 $ 5,822,567
27,831 Bajaj Auto Ltd .................................. 531,615 535,463
596,487 Hero Honda Motors Ltd ........................... 2,902,209 6,584,386
286,935 Mahindra & Mahindra Ltd ......................... 2,828,334 2,758,258
138,400 Maruti Udyog Ltd+ ............................... 1,560,015 1,211,809
1,701,825 Tata Motors Ltd ................................. 8,629,532 14,073,603
------------ ------------
18,978,182 30,986,086
------------ ------------
TOTAL COMMON STOCKS ............................. 290,780,474 451,532,641
------------ ------------
PREFERRED STOCK (0.01% of holdings)
ENGINEERING 0.01%
1,248,400 Thermax India Ltd Preference Shares+ ............ 0 26,149
------------ ------------
0 26,149
------------ ------------
TOTAL PREFERRED STOCK ........................... 0 26,149
------------ ------------
TOTAL INDIA ..................................... 290,780,474 451,558,790
------------ ------------
TOTAL INVESTMENTS** ......................100.00% $290,780,474 $451,558,790
============ ============
----------
FOOTNOTES AND ABBREVIATIONS
ADR - American Depository Receipts
GDR - Global Depository Receipts
+ Non income producing.
* At fair value as determined under the supervision of the Board of
Directors.
** Aggregate cost for Federal income tax purposes is $292,302,472.
The aggregate gross unrealized appreciation (depreciation) for all
securities is as follows:
Excess of value over tax cost $ 172,506,912
Excess of tax cost over value (13,250,594)
-------------
$ 159,256,318
=============
See accompanying notes to financial statements.
8
THE INDIA FUND, INC.
JUNE 30, 2004
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
ASSETS
Investments, at value (Cost $290,780,474) ................................. $ 451,558,790
Cash (including Indian Rupees of $6,241,737 with a cost of $6,308,708) .... 8,774,678
Receivables:
Dividends and reclaims net of excess taxes withheld ................. 2,056,373
Interest ............................................................ 147
Securities sold ..................................................... 883,753
Prepaid expenses .......................................................... 75,103
-------------
TOTAL ASSETS ................................................... 463,348,844
-------------
LIABILITIES
Payable for securities purchased .......................................... 443,622
Due to Investment Manager ................................................. 428,216
Accrued Custodian fees .................................................... 306,999
Due to Administrator ...................................................... 81,655
Accrued expenses .......................................................... 270,878
-------------
TOTAL LIABILITIES .............................................. 1,531,370
-------------
NET ASSETS ..................................................... $ 461,817,474
=============
NET ASSET VALUE PER SHARE ($461,817,414/23,302,828
SHARES ISSUED AND OUTSTANDING) ................................ $ 19.82
=============
NET ASSETS CONSIST OF:
Capital stock, $0.001 par value; 34,007,133 shares issued
(100,000,000 shares authorized) ..................................... $ 34,007
Paid-in capital ........................................................... 460,612,435
Cost of 10,704,305 shares repurchased ..................................... (150,386,968)
Overdistribution of net investment income ................................. (189,194)
Accumulated net realized loss on investments .............................. (8,894,656)
Net unrealized appreciation in value of investments, foreign
currency holdings and on translation of other assets and liabilities
denominated in foreign currency ........................................ 160,641,850
-------------
NET ASSETS ..................................................... $ 461,817,474
=============
See accompanying notes to financial statements.
9
THE INDIA FUND, INC.
JUNE 30, 2004
STATEMENT OF OPERATIONS (UNAUDITED)
INVESTMENT INCOME
Dividends (net of Indian taxes withheld of $834) ....................................... $ 4,575,822
-------------
TOTAL INVESTMENT INCOME ..................................................... 4,575,822
-------------
EXPENSES
Management fees ........................................................ $ 2,988,410
Administration fees .................................................... 557,955
Custodian fees ......................................................... 415,837
Legal fees ............................................................. 160,891
Audit and tax fees ..................................................... 138,940
Insurance .............................................................. 79,812
Printing ............................................................... 53,849
Transfer agent fees .................................................... 40,595
Directors' fees ........................................................ 24,891
NYSE fees .............................................................. 10,567
ICI fees ............................................................... 6,207
Miscellaneous expenses ................................................. 28,863
-----------
TOTAL EXPENSES .............................................................. 4,506,817
-------------
NET INVESTMENT INCOME ....................................................... 69,005
-------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS, FOREIGN CURRENCY HOLDINGS
AND TRANSLATION OF OTHER ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCY:
Net realized gain (loss) on:
Security transactions ............................................................ 35,563,785
Foreign currency related transactions ............................................ (99,144)
-------------
35,464,641
Net change in unrealized depreciation in value of investments, foreign currency holdings
and translation of other assets and liabilities denominated in foreign currency ..... (127,425,413)
-------------
Net realized and unrealized loss on investments, foreign currency holdings and
translation of other assets and liabilities denominated in foreign currency ......... (91,960,772)
-------------
Net decrease in net assets resulting from operations ................................... $ (91,891,767)
=============
See accompanying notes to financial statements.
10
THE INDIA FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS
ENDED FOR THE YEAR
JUNE 30, 2004 ENDED
(UNAUDITED) DECEMBER 31, 2003
--------------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income .................................................... $ 69,005 $ 2,883,008
Net realized gain on investments and foreign currency
related transactions .................................................. 35,464,641 39,849,857
Net change in unrealized appreciation (depreciation) in value of
investments, foreign currency holdings and translation of other
assets and liabilities denominated in foreign currency ................ (127,425,413) 237,954,482
------------- -------------
Net increase (decrease) in net assets resulting from operations .......... (91,891,767) 280,687,347
------------- -------------
DISTRIBUTION TO SHAREHOLDERS
Net investment income ($0.13 per share) .................................. -- (3,046,584)
------------- -------------
Decrease in net assets resulting from distributions ...................... -- (3,046,584)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Shares repurchased under Tender Offer
(including expenses of $70,586 at December 31, 2003) .................. -- (70,586)
Shares repurchased under Repurchase Offer
(132,437 and 4,135,635 shares, respectively)
(net of repurchase fee of $60,232 and $1,459,052,
respectively) (including expenses of $150,707 and
$103,667, respectively) .............................................. (3,102,100) (71,597,216)
------------- -------------
Net decrease in net assets resulting from capital share transactions ..... (3,102,100) (71,667,802)
------------- -------------
Total increase (decrease) in net assets .................................. (94,993,867) 205,972,961
NET ASSETS
Beginning of period ...................................................... 556,811,341 350,838,380
------------- -------------
End of period ............................................................ $ 461,817,474 $ 556,811,341
============= =============
See accompanying notes to financial statements.
11
THE INDIA FUND, INC.
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE SIX
MONTHS ENDED FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
JUNE 30, 2004 ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) DEC. 31, 2003 DEC. 31, 2002 DEC. 31, 2001 DEC. 31, 2000 DEC. 31, 1999
-----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value,
beginning of period ................. $ 23.76 $ 12.72 $ 11.93 $ 16.18 $ 23.21 $ 8.85
-------- -------- -------- -------- -------- --------
Net investment income (loss) ........... 0.00 0.11+ 0.09 0.07 (0.16) (0.10)
Net realized and unrealized gain (loss)
on investments, foreign currency
holdings, and translation of other
assets and liabilities denominated
in foreign currency ................. (3.94) 11.00+ 0.76 (4.29) (7.27) 14.36
-------- -------- -------- -------- -------- --------
Net increase (decrease) from
investment operations ............... (3.94) 11.11 0.85 (4.22) (7.43) 14.26
-------- -------- -------- -------- -------- --------
Less: Dividends and Distributions
Dividends from net investment
income ........................... -- (0.13) (0.09) (0.07) -- --
-------- -------- -------- -------- -------- --------
Total dividends and distributions ...... -- (0.13) (0.09) (0.07) -- --
-------- -------- -------- -------- -------- --------
Capital share transactions
Anti-dilutive effect of Share
Repurchase Program .................. 0.00(1) 0.06 0.01 0.04 0.40 0.10
Anti-dilutive effect of Tender Offer ... -- -- 0.02 -- -- --
-------- -------- -------- -------- -------- --------
Total capital share transactions ....... 0.00 0.06 0.03 0.04 0.40 0.10
-------- -------- -------- -------- -------- --------
Net asset value, end of period ......... $ 19.82 $ 23.76 $ 12.72 $ 11.93 $ 16.18 $ 23.21
======== ======== ======== ======== ======== ========
Per share market value, end of period .. $21.4800 $25.2000 $10.5900 $ 9.5000 $12.0625 $16.7500
TOTAL INVESTMENT RETURN BASED
ON MARKET VALUE* .................... (14.76)% 139.04% 12.36% (20.69)% (27.99)% 165.35%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000s) .... $461,817 $556,811 $350,838 $366,491 $504,769 $768,948
Ratios of expenses to average
net assets .......................... 1.66%(2) 1.76% 1.73% 1.70% 1.59% 1.84%
Ratios of net investment income
(loss) to average net assets ........ 0.03%(2) 0.72% 0.65% 0.57% (0.75)% (0.68)%
Portfolio turnover ..................... 12.04% 33.89% 39.36% 16.06% 19.24% 18.65%
See accompanying notes to financial statements.
12
THE INDIA FUND, INC.
FINANCIAL HIGHLIGHTS (CONCLUDED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
* Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of each period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to
be reinvested at prices obtained under the Fund's dividend reinvestment
plan. Total investment return does not reflect brokerage commissions or
sales charges and is not annualized.
+ Based on average shares outstanding.
(1) Less than $0.01 per share.
(2) Annualized.
See accompanying notes to financial statements.
13
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The India Fund, Inc. (the "Fund") was incorporated in Maryland on December 27,
1993, and commenced operations on February 23, 1994. The Fund operates through a
branch in the Republic of Mauritius. The Fund is registered under the Investment
Company Act of 1940, as amended, as a closed-end, non-diversified management
investment company.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
SIGNIFICANT ACCOUNTING POLICIES ARE AS FOLLOWS:
PORTFOLIO VALUATION. Investments are stated at value in the accompanying
financial statements. All securities for which market quotations are readily
available are valued at:
(i) the last sales price prior to the time of determination, if there
was a sale on the date of determination,
(ii) at the mean between the last current bid and asked prices, if there
was no sales price on such date and bid and asked quotations are
available, and
(iii) at the bid price if there was no sales price on such date and only
bid quotations are available.
Securities that are traded over-the-counter are valued, if bid and asked
quotations are available, at the mean between the current bid and asked prices.
Securities for which sales prices and bid and asked quotations are not available
on the date of determination may be valued at the most recently available prices
or quotations under policies adopted by the Board of Directors. Investments in
short-term debt securities having a maturity of 60 days or less are valued at
amortized cost which approximates market value. Securities for which market
values are not readily ascertainable are carried at fair value as determined in
good faith by or under the supervision of the Board of Directors. The net asset
value per share of the Fund is calculated weekly and at the end of each month.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax reporting purposes. Interest income is recorded on the accrual basis;
dividend income is recorded on the ex-dividend date or, using reasonable
diligence, when known. The collectibility of income receivable from Indian
securities is evaluated periodically, and any resulting allowances for
uncollectible amounts are reflected currently in the determination of investment
income.
14
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
TAX STATUS. No provision is made for U.S. federal income or excise taxes as it
is the Fund's intention to continue to qualify as a regulated investment company
and to make the requisite distributions to its shareholders that will be
sufficient to relieve it from all or substantially all Federal income and excise
taxes.
Income and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
The tax character of distributions paid during the year ended December 31, 2003:
Ordinary income .............................................. $ 3,046,584
=============
At December 31, 2003, the components of net assets (excluding paid in capital)
on a tax basis were as follows:
Overdistribution of Ordinary Income .......... $ (214,070)
Plus/Less: Cumulative Timing Differences ..... (44,129)
-------------
Overdistribution of net investment income .................... $ (258,199)
------------
Tax basis capital loss carryover ............. $ (42,954,175)
Plus/Less: Cumulative Timing Differences ..... (1,405,122)
-------------
Accumulated net realized loss on investments ................. (44,359,297)
------------
Book unrealized foreign exchange loss ........................ (98,491)
------------
Tax unrealized appreciation .................. $ 286,760,632
Plus/Less: Cumulative Timing Differences ..... 1,405,122
-------------
Unrealized appreciation ...................................... 288,165,754
------------
Net assets (excluding paid in capital) ....................... $243,449,767
============
The differences between book and tax basis unrealized appreciation is primarily
attributable to wash sales and a dividend overdistribution. The cumulative
timing difference for the capital loss carryover is due to Post October Losses.
Net Asset Value .............................................. $ 556,811,341
Paid in Capital .............................................. (313,361,574)
-------------
Net assets (excluding paid in capital) ...................... $ 243,449,767
=============
15
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
At December 31, 2003, the Fund had a capital loss carryover of $42,954,175 which
is available to offset future net realized gains on securities transactions to
the extent provided for in the Internal Revenue Code. Of the aggregate capital
losses, $11,095,634 will expire in 2006, $20,935,877 will expire in 2009 and
$10,922,664 will expire in 2010. During the year ended December 31, 2003, the
Fund utilized $33,704,004 of prior year capital loss carryforwards.
The Fund's realized foreign exchange losses incurred after October 31, 2003, but
before December 31, 2003, are deemed to arise on the first business day of the
following year. The Fund incurred and elected to defer such realized foreign
exchange losses of $44,129.
During the period ended December 31, 2003, the Fund reclassified $183,331 from
accumulated net realized loss on investments to overdistribution of net
investment income as a result of permanent book and tax differences relating
primarily to realized foreign currency gains. Net investment income and net
assets were not affected by the reclassifications.
FOREIGN CURRENCY TRANSLATION. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, assets and liabilities at the
prevailing rates of exchange on the valuation date; and
(ii) purchases and sales of investment securities and investment income
at the relevant rates of exchange prevailing on the respective dates
of such transactions.
The Fund generally does not isolate the effect of fluctuations in foreign
exchange rates from the effect of fluctuations in the market prices of
securities. However, the Fund does isolate the effect of fluctuations in foreign
currency rates when determining the gain or loss upon the sale of foreign
currency denominated debt obligations pursuant to U.S. Federal income tax
regulations; such amounts are categorized as foreign currency gains or losses
for federal income tax purposes. The Fund reports certain realized foreign
exchange gains and losses as components of realized gains and losses for
financial reporting purposes, whereas such amounts are treated as ordinary
income for Federal income tax reporting purposes.
Securities denominated in currencies other than U.S. dollars are subject to
changes in value due to fluctuations in foreign exchange rates. Foreign security
and currency transactions may involve certain considerations and risks not
typically associated with those of domestic origin as a result of, among other
factors, the level of governmental supervision and regulation of foreign
securities markets and the possibility of political or economic instability, and
the fact that foreign securities markets may be smaller and have less developed
and less reliable settlement and share registration procedures.
16
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
DISTRIBUTION OF INCOME AND GAINS. The Fund intends to distribute annually to
shareholders substantially all of its net investment income, including foreign
currency gains, and to distribute annually any net realized gains after the
utilization of available capital loss carryovers. An additional distribution may
be made to the extent necessary to avoid payment of a 4% Federal excise tax.
Distributions to shareholders are recorded on the ex-dividend date. The amount
of dividends and distributions from net investment income and net realized gains
are determined in accordance with Federal income tax regulations, which may
differ from accounting principles generally accepted in the United States of
America. These "book/tax" differences are either considered temporary or
permanent in nature. To the extent these differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their Federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions which exceed net investment income and net realized
capital gains for financial reporting purposes but not for tax purposes are
reported as dividends in excess of net investment income and net realized
capital gains. To the extent they exceed net investment income and net realized
gains for tax purposes, they are reported as distributions of additional paid-in
capital.
NOTE B: MANAGEMENT, INVESTMENT ADVISORY AND ADMINISTRATIVE SERVICES
Advantage Advisers, Inc. ("Advantage"), a subsidiary of Oppenheimer Asset
Management Inc. ("OAM") and an affiliate of Oppenheimer & Co. Inc.
("Oppenheimer"), serves as the Fund's Investment Manager (the "Investment
Manager") under the terms of a management agreement dated June 5, 2003 (the
"Management Agreement"). Prior to September 2003, Oppenheimer was called
Fahnestock & Co. Inc. Imperial Investment Advisors Private Limited ("Imperial"),
an Indian company and subsidiary of Oppenheimer and Advantage India, Inc.,
serves as the Fund's Country Adviser (the "Country Adviser") under the terms of
an advisory agreement dated June 5, 2003 (the "Country Advisory Agreement").
From August 1, 2001 to April 30, 2002, Advantage India, Inc. served as the
Fund's Country Adviser under similar terms. Pursuant to the Management
Agreement, the Investment Manager supervises the Fund's investment program and
is responsible on a day-to-day basis for investing the Fund's portfolio in
accordance with its investment objective and policies. Pursuant to the Country
Advisory Agreement, the Country Adviser provides statistical and factual
information and research regarding economic, political factors and investment
opportunities in India to the Investment Manager. For their services, the
Investment Manager receives monthly fees at an annual rate of 1.10% of the
Fund's average weekly net assets and the Country Adviser receives from the
Investment Manager a fee to be agreed upon by the Investment Manager and the
Country Adviser from time to time. For the six months ended June 30, 2004, fees
earned by the Investment Manager amounted to $2,988,410.
Oppenheimer, a registered investment advisor and an indirect wholly-owned
subsidiary of Oppenheimer Holdings Inc., serves as the Fund's Administrator (the
"Administrator") pursuant to an administration agreement dated June 4, 2003.
Prior to September 2003, Oppenheimer Holdings Inc. was called Fahnestock Viner
Holdings Inc. The Administrator provides certain administrative services
17
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
to the Fund. For its services, the Administrator receives a monthly fee at an
annual rate of 0.20% of the Fund's average weekly net assets. For the six months
ended June 30, 2004, administration fees amounted to $543,347 (Prior to June 4,
2003, administration fees were paid to CIBC World Markets Corp.). The
Administrator subcontracts certain of these services to PFPC, Inc. In addition,
Multiconsult Ltd. (the "Mauritius Administrator") provides certain
administrative services relating to the operation and maintenance of the Fund in
Mauritius. The Mauritius Administrator receives a monthly fee of $1,500 and is
reimbursed for certain additional expenses. For the six months ended June 30,
2004, fees and expenses of the Mauritius Administrator amounted to $14,608.
On December 10, 2002, the Canadian Imperial Bank of Commerce, CIBC World Markets
Corp. ("CIBC WM"), Fahnestock & Co. Inc. ("Fahnestock") and Fahnestock Viner
Holdings Inc. ("FVH") announced that Fahnestock and FVH had agreed to acquire
the U.S. brokerage and asset management businesses of CIBC WM, including
Advantage and Imperial. The acquisition of the U.S. brokerage business closed on
January 3, 2003. As required under the Investment Company Act of 1940, as
amended (the "1940 Act"), the Fund's then-existing Management Agreement and
Country Advisory Agreement provided for their automatic termination in the event
of their "assignment" as defined in the 1940 Act. Consummation of the
acquisition by Fahnestock and FVH of the asset management business of CIBC WM
constituted an assignment of the Fund's then existing Management Agreement and
Country Advisory Agreement. At a meeting on January 17, 2003, the Board of
Directors of the Fund, including a majority of the independent Directors,
approved a new investment management agreement between the Fund and Advantage
and a new country advisory agreement between Advantage and Imperial. The
acquisition by Fahnestock and FVH of CIBC WM's U.S. asset management business
was completed on June 4, 2003. In connection with the June 4, 2003 acquisition,
a new investment management agreement and country advisory agreement dated June
4, 2003 was executed, having been previously approved by the Board of Directors
of the Fund, including a majority of the independent Directors at a special
meeting held on January 17, 2003 and by the stockholders of the Fund at the
Fund's April 23, 2003 annual meeting of stockholders, as required by the 1940
Act.
In September 2003, Fahnestock & Co. Inc. changed its name to Oppenheimer & Co.
Inc. and Fahnestock Viner Holdings Inc. changed its name to Oppenheimer Holdings
Inc.
The Fund pays each of its directors who is not a director, officer or employee
of the Investment Manager, the Country Adviser or the Administrator or any
affiliate thereof an annual fee of $5,000 plus up to $700 for each Board of
Directors meeting attended. In addition, the Fund reimburses all directors for
travel and out-of-pocket expenses incurred in connection with Board of Directors
meetings.
NOTE C: PORTFOLIO ACTIVITY
Purchases and sales of securities, other than short-term obligations, aggregated
$62,974,951 and $77,836,707 respectively, for the six months ended June 30,
2004.
18
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
NOTE D: FOREIGN INCOME TAX
The Fund conducts its investment activities in India as a tax resident of
Mauritius and expects to obtain benefits under the double taxation treaty
between Mauritius and India (the "tax treaty" or "treaty"). To obtain benefits
under the double taxation treaty, the Fund must meet certain tests and
conditions, including the establishment of Mauritius tax residence and related
requirements. The Fund has obtained a certificate from the Mauritian authorities
that it is a resident of Mauritius under the double taxation treaty between
Mauritius and India. Under current regulations, a fund which is a tax resident
in Mauritius under the treaty, but has no branch or permanent establishment in
India, will not be subject to capital gains tax in India on the sale of
securities or to tax on dividends paid by Indian companies. The Fund is subject
to and accrues Indian withholding tax on interest earned on Indian securities at
the rate of 20.5%.
The Fund will, in any year that it has taxable income for Mauritius tax
purposes, elect to pay tax on its net income for Mauritius tax purposes at any
rate between 0% and 35%.
In March 2000, the Indian tax authorities issued an assessment order ("March
2000 Assessment Order") with respect to the Fund's Indian income tax return
filed for the fiscal year ended March 31, 1997 which denied the benefits of the
tax treaty between India and Mauritius. In the March 2000 Assessment Order, the
Indian tax authorities held that the Fund is not a resident of Mauritius and
assessed tax on the dividend income for the year ended March 31, 1997 at the
rate of 20%, instead of the 15% rate claimed by the Fund under the tax treaty
between India and Mauritius. Similar assessment orders were issued to several
other mutual fund companies relying on the tax treaty between India and
Mauritius. On April 13, 2000, the Central Board of Direct Taxes ("CBDT") of the
Ministry of Finance in India issued a circular ("Circular 789") "clarifying" its
position on Indian taxation under the tax treaty between India and Mauritius
that, wherever a certificate of residence is issued by the Mauritian
authorities, such certificate will constitute sufficient evidence for accepting
the status of residence as well as beneficial ownership for applying the tax
treaty between India and Mauritius. The Fund, relying on Circular 789 and in
absence of a rectification order from the assessing officer, filed an appeal
against the March 2000 Assessment Order with the Indian tax authorities. There
have been several hearings and the Fund is awaiting an appellate judgment. On
October 7, 2003, the Indian Supreme Court upheld Circular 789 and the Fund's
right to take advantage of the tax treaty between India and Mauritius.
The Fund continues to: (i) comply with the requirements of the tax treaty
between India and Mauritius; (ii) be a tax resident of Mauritius; and (iii)
maintain that its central management and control resides in Mauritius and
therefore management believes that the Fund will be able to obtain the benefits
of the tax treaty between India and Mauritius. Accordingly, no provision for
Indian income taxes has been made in accompanying financial statements of the
Fund. Although the Fund expects to
19
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
obtain the benefits of the treaty for the tax year ended March 31, 1997, the
Fund has not yet received notification of a repeal of the assessment order
issued.
The foregoing is based upon current interpretation and practice and is subject
to future changes in Indian or Mauritian tax laws and in the treaty between
India and Mauritius.
NOTE E: CAPITAL STOCK
In February 2003, the Board of Directors approved, subject to stockholder
approval, a fundamental policy whereby the Fund would adopt an "interval fund"
structure pursuant to Rule 23c-3 under the Investment Company Act of 1940, as
amended. Stockholders of the Fund were to approve the policy at the Annual
Meeting of Stockholders held on April 23, 2003, however the proposal was
adjourned and later approved on April 30, 2003. As an interval fund, the Fund
makes semi-annual repurchase offers at net asset value (less a 2% repurchase
fee) to all Fund stockholders. The percentage of outstanding shares that the
Fund can repurchase in each offer is established by the Fund's Board of
Directors shortly before the commencement of each semi-annual offer, and is
between 5% and 25% of the Fund's then-outstanding shares.
20
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
During the six months ended June 30, 2004, the results of the semi-annual
repurchase offer were as follows:
-------------------
REPURCHASE OFFER #2
--------------------------------------------------------------------------------
Commencement Date February 20, 2004
--------------------------------------------------------------------------------
Expiration Date March 12, 2004
--------------------------------------------------------------------------------
Repurchase Offer Date March 19, 2004
--------------------------------------------------------------------------------
% of Issued and Outstanding Shares of Common Stock 5%
--------------------------------------------------------------------------------
Repurchase Fee 2%
--------------------------------------------------------------------------------
Shares Validly Tendered 132,437.366
--------------------------------------------------------------------------------
Final Pro-ration Odd Lot Shares 607.12
--------------------------------------------------------------------------------
Final Pro-ration Non-Odd Lot Shares 131,830.166
--------------------------------------------------------------------------------
% of Non-Odd Lot Shares Accepted 100%
--------------------------------------------------------------------------------
Shares Accepted for Tender 132,437.366
--------------------------------------------------------------------------------
Net Asset Value as of Repurchase Offer Date ($) 22.74
--------------------------------------------------------------------------------
Repurchase Fee per Share ($) 0.4548
--------------------------------------------------------------------------------
Repurchase Offer Price ($) 22.2852
--------------------------------------------------------------------------------
Repurchase Fee ($) 60,232
--------------------------------------------------------------------------------
Expenses ($) 127,333
--------------------------------------------------------------------------------
Total Cost ($) 3,078,726
--------------------------------------------------------------------------------
During the year ended December 31, 2003, the results of the semi-annual
repurchase offer were as follows:
-------------------
REPURCHASE OFFER #1
--------------------------------------------------------------------------------
Commencement Date August 22, 2003
--------------------------------------------------------------------------------
Expiration Date September 12, 2003
--------------------------------------------------------------------------------
Repurchase Offer Date September 26, 2003
--------------------------------------------------------------------------------
% of Issued and Outstanding Shares of Common Stock 15%
--------------------------------------------------------------------------------
Repurchase Fee 2%
--------------------------------------------------------------------------------
Shares Validly Tendered 17,530,127.5345
--------------------------------------------------------------------------------
Final Pro-ration Odd Lot Shares 139,149
--------------------------------------------------------------------------------
Final Pro-ration Non-Odd Lot Shares 3,996,486
--------------------------------------------------------------------------------
% of Non-Odd Lot Shares Accepted 22.97983%
--------------------------------------------------------------------------------
Shares Accepted for Tender 4,135,635
--------------------------------------------------------------------------------
Net Asset Value as of Repurchase Offer Date ($) 17.64
--------------------------------------------------------------------------------
Repurchase Fee per Share ($) 0.3528
--------------------------------------------------------------------------------
Repurchase Offer Price ($) 17.2872
--------------------------------------------------------------------------------
Repurchase Fee ($) 1,459,052
--------------------------------------------------------------------------------
Expenses ($) 103,667
--------------------------------------------------------------------------------
Total Cost ($) 71,597,216
--------------------------------------------------------------------------------
21
THE INDIA FUND, INC.
JUNE 30, 2004
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) (UNAUDITED)
NOTE F: CONCENTRATION OF RISKS
At June 30, 2004, substantially all of the Fund's net assets were invested in
Indian securities. The Indian securities markets are among other things
substantially smaller, less developed, less liquid, subject to less regulation
and more volatile than the securities markets in the United States.
Consequently, and as further discussed above, acquisitions and dispositions of
securities by the Fund involve special risks and considerations not present with
respect to U.S. securities. At June 30, 2004, the Fund has a concentration of
its investment in computer, finance, and petroleum related industries. The
values of such investments may be affected by changes in such industry sectors.
NOTE G: INDEMNIFICATION
Under the Fund's agreements, its officers and directors are indemnified agents
against certain liability arising out of the performance of their duties to the
Fund. In addition, in the normal course of business, the Fund enters into
contracts with their vendors and others that provide general indemnifications.
The Fund's maximum exposure under these arrangements is unknown, as this would
involve future claims that may be made against the Fund. However, based on
experience, the Fund's management expects the risk of loss to be remote.
NOTE H: SUBSEQUENT EVENT
On June 22, 2004, the Fund filed an initial registration statement with the
Securities and Exchange Commission relating to a possible rights offering to be
conducted by the Fund. The Fund will issue to stockholders of record as of a
date to be determined one right for each share of common stock held. The rights
will not be transferable and, consequently, will not be listed in any exchange.
The rights will entitle holders to subscribe for additional shares of the Fund's
common stock at a subscription price per share equal to 95% of the Fund's net
asset value per share on the expiration date of the offer. Holders will be able
to purchase one share of common stock for every three rights held. The terms of
the rights offering will be set forth in a prospectus to be delivered to
shareholders of record as of the record date for such rights offering.
22
THE INDIA FUND, INC.
RESULTS OF ANNUAL MEETING OF STOCKHOLDERS
The Fund held its Annual Meeting of Stockholders on April 28, 2004. At the
meeting, stockholders elected each of the nominees proposed for election to the
Fund's Board of Directors. The following table provides information concerning
the matters voted on at the meeting:
I. ELECTION OF DIRECTORS
VOTES NON-VOTING TOTAL
NOMINEE VOTES FOR WITHHELD SHARES VOTING SHARES
------- --------- -------- ---------- -------------
Lawrence K. Becker 16,222,267 137,841 6,942,720 23,302,828
J. Marc Hardy 16,230,797 129,311 6,942,720 23,302,828
Stephane R.F. Henry 16,231,583 128,525 6,942,720 23,302,828
Bryan McKigney 16,237,881 122,227 6,942,720 23,302,828
At June 30, 2004, in addition to Lawrence K. Becker, J. Marc Hardy, Stephane
R.F. Henry and Bryan McKigney, the other directors of the Fund were as follows:
Leslie H. Gelb
Luis F. Rubio
Jeswald W. Salacuse
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available without charge
upon request by calling the Fund's toll free number at 1-800-421-4777 and at the
Securities and Exchange Commission website at http://www.sec.gov.
Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent twelve month period ended June 30 will be
available after August 30, 2004, without charge, upon request, by calling the
Fund's toll free number at 1-800-421-4777 and at the Securities and Exchange
Commission website at http://www.sec.gov.
23
THE INDIA FUND, INC.
DIVIDENDS AND DISTRIBUTIONS
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund intends to distribute annually to shareholders substantially all of its
net investment income, and to distribute any net realized capital gains at least
annually. Net investment income for this purpose is income other than net
realized long and short-term capital gains net of expenses.
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
shareholders whose shares of Common Stock are registered in their own names will
be deemed to have elected to have all distributions automatically reinvested by
the Plan Agent in Fund shares pursuant to the Plan, unless such shareholders
elect to receive distributions in cash. Shareholders who elect to receive
distributions in cash will receive all distributions in cash paid by check in
dollars mailed directly to the shareholder by the dividend paying agent. In the
case of shareholders such as banks, brokers or nominees, that hold shares for
others who are beneficial owners, the Plan Agent will administer the Plan on the
basis of the number of shares certified from time to time by the shareholders as
representing the total amount registered in such shareholders' names and held
for the account of beneficial owners that have not elected to receive
distributions in cash. Investors that own shares registered in the name of a
bank, broker or other nominee should consult with such nominee as to
participation in the Plan through such nominee, and may be required to have
their shares registered in their own names in order to participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the Plan.
If the directors of the Fund declare an income dividend or a capital gains
distribution payable either in the Fund's Common Stock or in cash,
nonparticipants in the Plan will receive cash and participants in the Plan will
receive Common Stock, to be issued by the Fund or purchased by the Plan Agent in
the open market, as provided below. If the market price per share on the
valuation date equals or exceeds net asset value per share on that date, the
Fund will issue new shares to participants at net asset value; provided,
however, that if the net asset value is less than 95% of the market price on
valuation date, then such shares will be issued at 95% of the market price. The
valuation date will be the dividend or distribution payment date or, if that
date is not a New York Stock Exchange trading day, the next preceding trading
day. If net asset value exceeds the market price of Fund shares at such time, or
if the Fund should declare an income dividend or capital gains distribution
payable only in cash, the Plan Agent will, as agent for the participants, buy
Fund shares in the open market, on the New York Stock Exchange or elsewhere, for
the participants' accounts on, or shortly after, the payment date. If, before
the Plan Agent has completed its purchases, the market price exceeds the net
asset value of a Fund share, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Fund's shares, resulting in the
acquisition of fewer shares than if the distribution had been paid in shares
issued by the Fund on the dividend payment date.
24
THE INDIA FUND, INC.
DIVIDENDS AND DISTRIBUTIONS (CONTINUED)
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
Because of the forgoing difficulty with respect to open market purchases, the
Plan provides that if the Plan Agent is unable to invest the full dividend
amount in open-market purchases during the purchase period or if the market
discount shifts to a market premium during the purchase period, the Plan Agent
will cease making open-market purchases and shareholders will receive the
uninvested portion of the dividend amount in newly issued shares at the close of
business on the last purchase date.
Participants have the option of making additional cash payments to the Plan
Agent, annually, in any amount from $100 to $3,000, for investment in the Fund's
Common Stock. The Plan Agent will use all such funds received from participants
to purchase Fund shares in the open market on or about February 15.
Any voluntary cash payment received more than 30 days prior to this date will be
returned by the Plan Agent, and interest will not be paid on any uninvested cash
payment. To avoid unnecessary cash accumulations, and also to allow ample time
for receipt and processing by the Plan Agent, it is suggested that participants
send in voluntary cash payments to be received by the Plan Agent approximately
ten days before an applicable purchase date specified above. A participant may
withdraw a voluntary cash payment by written notice, if the notice is received
by the Plan Agent not less than 48 hours before such payment is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in an account, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in the name of the
participant, and each shareholder's proxy will include those shares purchased
pursuant to the Plan.
There is no charge to participants for reinvesting dividends or capital gains
distributions or voluntary cash payments. The Plan Agent's fees for the
reinvestment of dividends and capital gains distributions and voluntary cash
payments will be paid by the Fund. There will be no brokerage charges with
respect to shares issued directly by the Fund as a result of dividends or
capital gains distributions payable either in stock or in cash. However, each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open-market purchases in connection with the
reinvestment of dividends and capital gains distributions and voluntary cash
payments made by the participant. Brokerage charges for purchasing small amounts
of stock for individual accounts through the Plan are expected to be less than
the usual brokerage charges for such transactions, because the Plan Agent will
be purchasing stock for all participants in blocks and prorating the lower
commissions thus attainable.
25
THE INDIA FUND, INC.
DIVIDENDS AND DISTRIBUTIONS (CONCLUDED)
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The receipt of dividends and distributions under the Plan will not relieve
participants of any income tax that may be payable on such dividends or
distributions.
Experience under the Plan may indicate that changes in the Plan are desirable.
Accordingly, the Fund and the Plan Agent reserve the right to terminate the Plan
as applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to notice of the termination sent to members of the Plan at
least 30 days before the record date for such dividend or distribution. The Plan
also may be amended by the Fund or the Plan Agent, but (except when necessary or
appropriate to comply with applicable law, rules or policies of a regulatory
authority) only by at least 30 days' written notice to participants in the Plan.
All correspondence concerning the Plan should be directed to the Plan Agent at
P.O. Box 43027, Westborough, Massachusetts 43027.
26
PRIVACY POLICY OF
ADVANTAGE ADVISERS, INC.
THE ASIA TIGERS FUND, INC.
THE INDIA FUND, INC.
--------------------------------------------------------------------------------
YOUR PRIVACY IS PROTECTED
An important part of our commitment to you is our respect for your right to
privacy. Protecting all the information we are either required to gather or
which accumulates in the course of doing business with you is a cornerstone of
our relationship with you. While the range of products and services we offer
continues to expand, and the technology we use continues to change, our
commitment to maintaining standards and procedures with respect to security
remains constant.
COLLECTION OF INFORMATION
The primary reason that we collect and maintain information is to more
effectively administer our customer relationship with you. It allows us to
identify, improve and develop products and services that we believe could be of
benefit. It also permits us to provide efficient, accurate and responsive
service, to help protect you from unauthorized use of your information and to
comply with regulatory and other legal requirements. These include those related
to institutional risk control and the resolution of disputes or inquiries.
Various sources are used to collect information about you, including (i)
information you provide to us at the time you establish a relationship, (ii)
information provided in applications, forms or instruction letters completed by
you, (iii) information about your transactions with us or our affiliated
companies, and/or (iv) information we receive through an outside source, such as
a bank or credit bureau. In order to maintain the integrity of client
information, we have procedures in place to update such information, as well as
to delete it when appropriate. We encourage you to communicate such changes
whenever necessary.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic, personal information (such as your name,
address or tax identification number) about our clients or former clients to
anyone, except as permitted or required by law. We maintain physical, electronic
and procedural safeguards to protect such information, and limit access to such
information to those employees who require it in order to provide products or
services to you.
The law permits us to share client information with companies that are
affiliated with us which provide financial, credit, insurance, trust, legal,
accounting and administrative services to us or our clients. This allows us to
enhance our relationship with you by providing a broader range of products to
better meet your needs and to protect the assets you may hold with us by
preserving the safety and soundness of our firm.
27
PRIVACY POLICY OF
ADVANTAGE ADVISERS, INC.
THE ASIA TIGERS FUND, INC.
THE INDIA FUND, INC.
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Finally, we are also permitted to disclose nonpublic, personal information to
unaffiliated outside parties who assist us with processing, marketing or
servicing a financial product, transaction or service requested by you,
administering benefits or claims relating to such a transaction, product or
service, and/or providing confirmations, statements, valuations or other records
or information produced on our behalf.
It may be necessary, under anti-money laundering or other laws, to disclose
information about you in order to accept your subscription. Information about
you may also be released if you so direct, or if we or an affiliate are
compelled to do so by law, or in connection with any government or
self-regulatory organization request or investigation.
We are committed to upholding this Privacy Policy. We will notify you on an
annual basis of our policies and practices in this regard and at any time that
there is a material change that would require your consent.
May 2003
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THE INDIA FUND, INC.
INVESTMENT MANAGER:
Advantage Advisers, Inc.,
a subsidiary of Oppenheimer Asset
Management Inc.
ADMINISTRATOR:
Oppenheimer & Co. Inc.
SUB-ADMINISTRATOR:
PFPC Inc.
TRANSFER AGENT:
PFPC Inc.
CUSTODIAN:
Deutsche Bank AG
The Fund has adopted the Investment Manager's proxy voting policies and
procedures to govern the voting of proxies relating to its voting securities.
You may obtain a copy of these proxy voting procedures, without charge, by
calling (800) 421-4777.
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
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(C) TOTAL NUMBER OF SHARES (OR (D) MAXIMUM NUMBER (OR
(A) TOTAL NUMBER (B) AVERAGE UNITS) PURCHASED AS PART OF APPROXIMATE DOLLAR VALUE) OF SHARES
OF SHARES (OR UNITS) PRICE PAID PER PUBLICLY ANNOUNCED PLANS OR (OR UNITS) THAT MAY YET BE PURCHASED
PERIOD PURCHASED SHARE (OR UNIT) PROGRAMS UNDER THE PLANS OR PROGRAMS
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Month #1 NONE NONE NONE NONE
1/1/04-1/31/04
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Month #2 NONE NONE NONE NONE
2/1/04-2/29/04
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Month #3 132,437.366 22.2852 132,437.366(1) NONE
3/1/04-3/31/04
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Month #4 NONE NONE NONE NONE
4/1/04-4/30/04
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Month #5 NONE NONE NONE NONE
5/1/04-5/31/04
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Month #6 NONE NONE NONE NONE
6/1/04-6/30/04
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Total 132,437.366 22.2852 132,437.366 NONE
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(1) These shares were purchased in connection with the Fund's regular, semi-annual repurchase offer announced on February 20, 2004
that expired on March 12, 2004. In connection with this repurchase offer, the Fund offered to repurchase up to 1,171,763.25
shares of its common stock, an amount equal to 5% of its outstanding shares of common stock, for cash at a price approximately
equal to the Fund's net asset value as of March 19, 2004.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 11. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section
302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) The India Fund, Inc.
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By (Signature and Title)* /s/ Bryan McKigney
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Bryan McKigney, Director, President & Chairman
(principal executive officer)
Date August 24, 2004
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Bryan McKigney
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Bryan McKigney, Director, President & Chairman
(principal executive officer)
Date August 24, 2004
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By (Signature and Title)* /s/ Alan Kaye
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Alan Kaye, Treasurer
(principal financial officer)
Date August 24, 2004
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* Print the name and title of each signing officer under his or her signature.