The India Fund, Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
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Investment Company Act file number: |
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811-08266 |
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Exact name of registrant as specified in charter: |
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The India Fund, Inc. |
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Address of principal executive offices: |
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1735 Market Street, 32nd Floor |
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Philadelphia, PA 19103 |
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Name and address of agent for service: |
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Ms. Andrea Melia |
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Aberdeen Asset Management Inc. |
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1735 Market Street 32nd Floor |
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Philadelphia, PA 19103 |
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Registrants telephone number, including area code: |
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800-522-5465 |
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Date of fiscal year end: |
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December 31 |
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Date of reporting period: |
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June 30, 2016 |
Item 1 - Reports to Stockholders.
The Report to Shareholders is attached herewith.
Letter to Shareholders (unaudited)
Dear Shareholder,
We present this Semi-Annual Report which covers the activities of The India Fund, Inc. (the Fund) for the six-month period ended June 30, 2016. The Funds investment objective is
long-term capital appreciation, which the Fund seeks to achieve by investing primarily in the equity securities of Indian companies.
NAV
Total Return Performance
For the six-month period ended June 30, 2016, the total return to shareholders of the Fund
based on the net asset value (NAV) of the Fund, net of fees, was 7.8%, assuming reinvestment of dividends and distributions, versus a return of 1.1% for the Funds benchmark, the MSCI India Index1. The Funds total returns for the six-month period ended June 30,
2016 are based on the reported NAV on each financial reporting period end.
Share Price Total Return Performance & Discount
For the six-month period ended June 30, 2016, based on market price, the Funds total return was 6.9%, assuming reinvestment of
dividends and distributions. The Funds share price increased 6.9% over the six-month period from $22.74 on December 31, 2015 to $24.30 on June 30, 2016. The Funds share price on June 30, 2016 represented a discount of
13.1% to the NAV per share of $27.97 on that date, compared with a discount of 12.4% to the NAV per share of $25.95 on December 31, 2015.
Targeted Discount Policy
The Funds
targeted discount policy seeks to manage the Funds discount by buying back shares of common stock in the open market at times when the Funds shares trade at a discount of 10% or more to NAV. With the approval of the elimination of the
semi-annual repurchase offers, the Board of Directors agreed to review the targeted volume-weighted average discount after a two-year period commencing from the completion of the tender offer that expired on April 3, 2014. If a 10% or less
volume-weighted average discount is not attained over the two-year period, the Board may, but is not obligated to, consider other actions to address the discount. The targeted discount policy, which became effective upon the elimination of the
Funds interval structure, extended the Funds prior open market repurchase policy. The Board approved a renewal of its targeted discount policy for an additional two-year period commencing on April 4, 2016. During the six-month period ended June 30, 2016 the Fund repurchased 358,593 shares with a weighted average discount to NAV of 12.60%. During the year ended December 31, 2015, the Fund repurchased
360,209 shares with a weighted average discount to NAV of 11.98%.
Portfolio Holdings Disclosure
The Funds complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year is included in the Funds semi-annual and annual reports to shareholders. The Fund files
its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-Q. The Funds Forms N-Q are available on the SECs website at
http://www.sec.gov and may be reviewed and copied at the SECs Public Reference Room in Washington, D.C. Information about the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Funds most recent Form
N-Q is also available to shareholders on the Funds website or upon request and without charge by calling Investor Relations toll-free at 1-800-522-5465.
Proxy Voting
A description of the policies and procedures that the Fund uses to determine how to
vote proxies relating to portfolio securities and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve months ended June 30 is available by August 31 of the relevant year:
(i) upon request and without charge by calling Investor Relations toll-free at 1-800-522-5465 and (ii) on the SECs website at http://www.sec.gov.
Unclaimed Share Accounts
Please be advised that abandoned or unclaimed property laws for certain
states require financial organizations to transfer (escheat) unclaimed property (including Fund shares) to the state. Each state has its own definition of unclaimed property, and triggers generally include inactivity (e.g., no owner-generated
activity for a certain period), returned mail (e.g., when mail sent to a shareholder is returned to the Funds transfer agent as undeliverable), or a combination of both. If your Fund shares are categorized as unclaimed, your financial advisor
or the Funds transfer agent will follow the applicable states statutory requirements to contact you, but if unsuccessful, laws may require that the shares be escheated to the appropriate state. For more information on unclaimed property
and how to maintain an active account, please contact your financial adviser or the Funds transfer agent.
Investor Relations
Information
As part of Aberdeens commitment to shareholders, we invite you to visit the Fund on the web at
www.aberdeenifn.com. From this page, you can view monthly fact sheets, portfolio manager commentary, distribution and performance information, updated daily fact sheets courtesy of Morningstar®, portfolio charting and other timely data.
The India Fund,
Inc.
1
Letter to Shareholders (unaudited) (concluded)
Enroll in our email services and be among the first to receive the latest closed-end fund news, announcements
of upcoming fund manager web casts, films and other information. In addition, you can receive electronic versions of important Fund documents including annual reports, semi-annual reports, prospectuses, and proxy statements. Sign-up today at
www.aberdeen-asset.us/aam.nsf/usclosed/email.
Please take a look at Aberdeens award-winning Closed-End Fund Talk Channel, where a series of
fund manager webcasts and short films are posted. Visit Aberdeens Closed-End Fund Talk Channel at www.aberdeen-asset.us/aam.nsf/usclosed/aberdeentv.
Contact Us
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Visit us: http://www.aberdeen-asset.us/cef or www.aberdeenenifn.com |
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Watch us: www.aberdeen-asset.us/aam.nsf/usclosed/aberdeentv |
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Email us: InvestorRelations@aberdeen-asset.com |
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Call us: 1-800-522-5465 (toll free in the U.S.) |
Yours sincerely,
/S/ Alan R. Goodson
Alan R. Goodson
President
All amounts are U.S.
Dollars unless otherwise stated.
1 |
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The MSCI India Index is designed to measure the performance of the large and
mid cap segments of the Indian market. With 73 constituents, the index covers approximately 85% of the Indian equity universe. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot
invest directly in an index. |
The India Fund, Inc.
2
Report of the Investment Manager (unaudited)
Market review
Indian equities, as measured by the Morgan Stanley Capital International (MSCI) India Index,1 rose 1.1% during the six-month period ended June 30, 2016. The market was volatile throughout the period, battered at
first by a global sell-off at the beginning of 2016, as investors remained fixated on a precarious China and free-falling commodity prices. Extraordinary measures from major central banks, a dovish U.S. Federal Reserve and subsequent stabilization
of oil prices helped restore global equilibrium to an extent. However, investor sentiment toward India was slower to recover given concerns over the challenging state of some public-sector banks.
Nevertheless, equities rebounded in the wake of the Bharatiya Janata Partys largely pedestrian budget, with investors apparently relieved at the
absence of any negative surprises. Investor sentiment was also lifted by better-than-expected economic growth and above-average monsoon forecasts. India was among the most resilient following the UKs unexpected decision to leave the European
Union (Brexit).
Reserve Bank of India (RBI) chief Raghuram Rajan announced he will not extend his term when it ends in September.
While he has played an important role in helping to restore credibility to the central bank, his tenure has reflected a team effort and the government has been just as important in helping to restore credibility of the central bank, in our opinion.
In August, Prime Minister Narendra Modi appointed Dr. Urjit Patel as the new RBI governor. We believe that Patels appointment is confirmation that Modi is committed to reforms. With important state elections coming up in 2017, he has resisted
the temptation to appoint a governor who will promote short-term growth at the expense of long-term development, in our opinion.
The RBI cut
interest rates just once during the period, as inflationary uncertainties remain. Meanwhile, Parliament passed the countrys first national bankruptcy law, providing a unified framework for the recovery of debt from insolvent companies within
180 days.
Performance
The Fund
outperformed its benchmark, the MSCI India Index, for the six-month period ended June 30, 2016. Both overall stock selection and asset allocation had a positive impact on Fund performance.
The materials sector was, by far, the strongest performer within the index during the reporting period, with cement stocks performing particularly well following the governments budget commitment to
increase infrastructure spending and excise duty exemptions. Therefore, the Funds overweight position to the cement sector
relative to the benchmark contributed to Fund performance. Contributors to performance at the stock level included Ambuja Cements, Ultratech Cement and its parent, Grasim Industries, as their
share prices rallied over the period. Grasim Industries benefited further from reporting robust profits for the fourth quarter of its 2016 fiscal year, driven by both its cement and viscose staple fiber businesses.
Stock selection in healthcare also had a positive impact on Fund performance, led by diversified conglomerate Piramal Enterprises, which was buoyed by its
intention to restructure into two separate listed companies in an effort to unlock value. Additionally, the Funds exposure to the consumer-related sectors contributed to Fund performance. Godrej Consumer Products continued to outperform its
peers on the back of healthy operating results. Auto-related holdings Bosch and Hero MotoCorp were lifted by the government budgets focus on farmers, on expectations of a surge in rural demand for vehicles.
Shares of financial companies saw weak performance during the reporting period on growing concerns over lending practices at some public-sector banks. The
Fund holds only private-sector banks, which we believe are in better shape than their state-owned counterparts. However, shares of the Funds holding in ICICI Bank came under pressure after ICICI reported deterioration in non-performing loans,
mainly attributable to the Reserve Bank of Indias more stringent review requirements, which affected one particular steel-sector loan. Loan loss provisions also increased sharply. Nonetheless, we believe that these setbacks have now been
priced into the stock. Additionally, the Funds lack of exposure to Larsen & Toubro detracted from fund performance, as the conglomerates shares rose after it posted better-than-expected results and issued an upbeat annual sales
forecast.
We consider absolute return to be of the utmost importance over the long term, and we are benchmark-aware, but not benchmark-driven. We
do not equate the quality of a company with either market capitalization size or index membership. Therefore, indices do not necessarily serve as a starting point for our portfolio construction, and we are comfortable taking positions that differ
from the benchmark.
Outlook
As the fallout from Brexit leaves investors skeptical about developed markets, we believe that India stands to gain from potential renewed interest in emerging markets. In our view, the
1 |
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Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index.
Index performance is not an indication of the performance of the Fund itself. For complete fund performance, please visit aberdeen-asset.us. |
The India Fund, Inc.
3
Report of the Investment Manager (unaudited)
(concluded)
promising monsoon rains and positive economic growth data offer a boost to
investors risk appetite, and we believe that India remains one of the few bright spots in Asia from a macroeconomic perspective. Given the important role that Raghuram Rajan has played in the central bank and his stature as a well-respected
figure by foreign investors, we anticipate some volatility from his departure, especially for the rupee. However, Rajan remains at the helm until September and the central bank intends to support the currency. Additionally, Urjit Patel, Rajans
successor, was chairman of the committee that recommended the adoption of a flexible inflation-targeting framework that seeks to achieve positive real interest rates by shifting the inflation reference rate from the Wholesale Price Index to the
Consumer Price Index. Notwithstanding the uncertainties, we remain focused on selecting and holding stocks that we believe have good fundamentals, and using volatility in an effort to diversify2 the Funds portfolio.
Aberdeen Asset Management Asia Limited
2 |
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Diversification does not ensure a profit or protect against a loss in a declining market. |
The India Fund, Inc.
4
Total Investment Returns (unaudited)
The following table summarizes the average annual Fund total investment return
compared to the Funds benchmark, the MSCI India Index, for the 1-year, 3-year, 5-year and 10-year periods as of June 30, 2016.
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1 Year |
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3 Years |
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5 Years |
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10 Years |
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Net Asset Value (NAV) |
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2.9% |
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14.8% |
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4.1% |
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8.7% |
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Market Value |
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-0.5% |
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15.4% |
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2.6% |
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4.5% |
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MSCI India Index |
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-6.5% |
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7.1% |
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-0.4% |
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6.3% |
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Aberdeen Asset Management Inc. (AAMI) has entered into an agreement with the Fund to limit investor relations
services fees, without which performance would be lower. See Note 3 in the Notes to Financial Statements. Returns represent past performance. Total investment return at NAV is based on changes in the NAV of Fund shares and assumes reinvestment of
dividends and distributions, if any, at market prices pursuant to the Funds dividend reinvestment program. All return data at NAV includes fees charged to the Fund, which are listed in the Funds Statement of Operations under
Expenses. The Funds total return is based on the reported NAV on each annual period end. Total investment return at market value is based on changes in the market price at which the Funds shares traded on the NYSE during the
period and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the Funds dividend reinvestment program. Because the Funds shares trade in the stock market based on investor demand, the Fund may trade
at a price higher or lower than its NAV. Therefore, returns are calculated based on both market price and NAV. Past performance is no guarantee of future results. The performance information provided does not reflect the
deduction of taxes that a shareholder would pay on distributions received from the Fund. The current performance of the Fund may be lower or higher than the figures shown. The Funds yield, return, market price and NAV will fluctuate.
Performance information current to the most recent month-end is available at www.aberdeenifn.com or by calling 800-522-5465.
The
annualized net operating expense ratio for the six-month period ended June, 30, 2016 was 1.36%.
The India Fund, Inc.
5
Portfolio Summary (unaudited)
The following table summarizes the composition of the Funds portfolio, in
Standard & Poors Global Industry Classification Standard (GICS) Sectors, expressed as a percentage of net assets. The GICS structure consists of 10 sectors, 24 industry groups, 67 industries and 156 subindustries. As
of June 30, 2016, the Fund did not have more than 25% of its assets invested in any industry. The sectors, as classified by GICS sectors, are comprised of several industries.
As of June 30, 2016, the Fund held 98.7% of its net assets in equities, 0.1% in a short-term investment and 1.2% in other assets in excess of liabilities.
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Sector Allocation |
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As a Percentage of Net Assets |
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Financials |
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19.7% |
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Consumer Staples |
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17.1% |
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Materials |
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17.1% |
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Information Technology |
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17.0% |
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Health Care |
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11.8% |
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Consumer Discretionary |
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7.9% |
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Industrials |
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5.5% |
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Telecommunication Services |
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1.8% |
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Utilities |
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0.8% |
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Other |
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1.3% |
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100.0% |
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Top Ten Equity Holdings (unaudited)
The following were the Funds top ten holdings as of June 30, 2016:
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Name of Security |
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As a Percentage of Net Assets |
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Housing Development Finance Corp. Ltd. |
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8.7% |
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Tata Consultancy Services Ltd. |
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7.6% |
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Infosys Ltd. |
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7.0% |
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ITC Ltd. |
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5.3% |
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UltraTech Cement Ltd. |
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5.1% |
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ICICI Bank Ltd. |
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4.4% |
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Bosch Ltd. |
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4.3% |
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Ambuja Cements Ltd. |
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4.3% |
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Godrej Consumer Products Ltd. |
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4.0% |
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Hindustan Unilever Ltd. |
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4.0% |
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The India Fund, Inc.
6
Portfolio of Investments (unaudited)
As of June 30, 2016
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Shares |
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Description |
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Value (US$) |
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LONG-TERM INVESTMENTS98.7% |
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COMMON STOCKS98.7% |
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INDIA98.5% |
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AUTO COMPONENTS4.3% |
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104,401 |
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Bosch Ltd. (a) |
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$ |
35,018,627 |
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AUTOMOBILES3.6% |
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612,823 |
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Hero MotoCorp Ltd. (a) |
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28,739,965 |
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BANKS11.0% |
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1,400,000 |
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HDFC Bank Ltd. (a) |
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24,419,184 |
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9,850,000 |
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ICICI Bank Ltd. (a) |
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|
35,232,365 |
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|
|
|
2,560,000 |
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Kotak Mahindra Bank Ltd. (a) |
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28,964,648 |
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|
88,616,197 |
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CHEMICALS4.1% |
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|
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1,735,880 |
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Asian Paints Ltd. (a) |
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25,693,908 |
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1,300,000 |
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Castrol (India) Ltd. (a) |
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|
7,309,405 |
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|
|
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|
|
|
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|
33,003,313 |
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CONSTRUCTION MATERIALS13.0% |
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|
|
|
489,000 |
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ACC Ltd.(a) |
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|
11,789,936 |
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|
|
|
9,026,000 |
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Ambuja Cements Ltd. (a) |
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|
34,328,283 |
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|
|
|
250,085 |
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Grasim Industries Ltd. (a) |
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|
17,230,434 |
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|
|
|
818,000 |
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UltraTech Cement Ltd. (a) |
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|
41,455,666 |
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|
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|
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|
|
|
104,804,319 |
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DIVERSIFIED TELECOMMUNICATION SERVICES0.8% |
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|
|
1,340,000 |
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Bharti Infratel Ltd. (a) |
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|
6,889,125 |
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ELECTRIC UTILITIES0.8% |
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|
|
|
6,052,337 |
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Tata Power Co. Ltd. (a) |
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|
6,608,327 |
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ELECTRICAL EQUIPMENT1.1% |
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|
|
|
499,224 |
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|
ABB India Ltd. (a) |
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|
9,035,221 |
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FOOD PRODUCTS3.3% |
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|
|
|
276,810 |
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Nestle India Ltd. (a) |
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|
26,868,174 |
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HOUSEHOLD PRODUCTS4.0% |
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|
|
|
2,420,000 |
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Hindustan Unilever Ltd. (a) |
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|
32,255,896 |
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INFORMATION TECHNOLOGY SERVICES16.8% |
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|
|
|
3,264,000 |
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Infosys Ltd. (a) |
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|
56,697,859 |
|
|
|
|
2,030,000 |
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Mphasis Ltd. (a) |
|
|
17,269,078 |
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|
|
|
1,625,056 |
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Tata Consultancy Services Ltd. (a) |
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|
61,466,331 |
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|
|
|
|
|
|
|
|
|
135,433,268 |
|
|
|
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MACHINERY0.7% |
|
|
|
|
240,430 |
|
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Cummins India Ltd. (a) |
|
|
3,010,552 |
|
|
|
|
237,758 |
|
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Thermax Ltd. (a) |
|
|
2,907,033 |
|
|
|
|
|
|
|
|
|
|
5,917,585 |
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See Notes to Financial Statements.
The India Fund, Inc.
7
Portfolio of Investments (unaudited) (concluded)
As of June 30, 2016
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|
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|
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|
|
|
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|
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Shares |
|
|
Description |
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Value (US$) |
|
|
|
|
|
|
|
|
|
|
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|
|
|
LONG-TERM INVESTMENTS (continued) |
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|
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COMMON STOCKS (continued) |
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|
|
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PERSONAL PRODUCTS4.5% |
|
|
|
|
233,000 |
|
|
Emami Ltd. (a) |
|
$ |
3,825,130 |
|
|
|
|
1,368,240 |
|
|
Godrej Consumer Products Ltd. (a) |
|
|
32,589,784 |
|
|
|
|
|
|
|
|
|
|
36,414,914 |
|
|
|
|
PHARMACEUTICALS11.8% |
|
|
|
|
194,107 |
|
|
GlaxoSmithKline Pharmaceuticals Ltd. |
|
|
9,979,277 |
|
|
|
|
992,000 |
|
|
Lupin Ltd. (a) |
|
|
22,769,500 |
|
|
|
|
1,029,481 |
|
|
Piramal Enterprises Ltd. |
|
|
21,986,767 |
|
|
|
|
260,000 |
|
|
Sanofi India Ltd. |
|
|
17,180,532 |
|
|
|
|
2,090,000 |
|
|
Sun Pharmaceutical Industries Ltd. (a) |
|
|
23,740,691 |
|
|
|
|
|
|
|
|
|
|
95,656,767 |
|
|
|
|
ROAD & RAIL3.7% |
|
|
|
|
1,400,000 |
|
|
Container Corp. of India (a) |
|
|
29,683,181 |
|
|
|
|
THRIFTS & MORTGAGE FINANCE8.7% |
|
|
|
|
3,760,000 |
|
|
Housing Development Finance Corp. Ltd. (a) |
|
|
69,994,968 |
|
|
|
|
TOBACCO5.3% |
|
|
|
|
7,800,000 |
|
|
ITC Ltd. (a) |
|
|
42,773,689 |
|
|
|
|
WIRELESS TELECOMMUNICATION SERVICES1.0% |
|
|
|
|
1,480,000 |
|
|
Bharti Airtel Ltd. (a) |
|
|
8,002,676 |
|
|
|
|
UNITED STATES0.2% |
|
|
|
|
INFORMATION TECHNOLOGY SERVICES0.2% |
|
|
|
|
28,000 |
|
|
Cognizant Technology Solutions Corp. (b) |
|
|
1,602,720 |
|
|
|
|
|
|
|
Total Common Stocks |
|
|
797,318,932 |
|
|
|
|
|
|
|
Total Long-Term Investments98.7% (cost $399,408,878) |
|
|
797,318,932 |
|
SHORT-TERM INVESTMENT0.1% |
|
|
|
|
|
|
|
$1,069,000 |
|
|
Repurchase Agreement, Fixed Income Clearing Corp., 0.03% dated 06/30/2016, due 07/01/2016
repurchase price $1,069,001, collateralized by a U.S. Treasury Note, maturing 05/15/2025; total market value of $1,093,088 |
|
|
1,069,000 |
|
|
|
|
|
|
|
Total Short-Term Investment0.1% (cost $1,069,000) |
|
|
1,069,000 |
|
|
|
|
|
|
|
Total Investments98.8% (cost $400,477,878) (c) |
|
|
798,387,932 |
|
|
|
|
|
|
|
|
|
|
|
Other Assets in Excess of Liabilities1.2% |
|
|
9,571,795 |
|
|
|
|
|
|
|
Net Assets100.0% |
|
$ |
807,959,727 |
|
(a) |
|
Fair Valued Security. Fair Values are determined pursuant to procedures approved by the Funds Board of Directors. See Note 2(a) of the accompanying Notes to
Financial Statements. |
(b) |
|
Non-income producing security. |
(c) |
|
See accompanying Notes to Financial Statements for tax unrealized appreciation/depreciation of securities. |
See Notes to Financial Statements.
The India Fund, Inc.
8
Statement of Assets and Liabilities (unaudited)
As of June 30, 2016
|
|
|
|
|
Assets |
|
|
|
|
Investments, at value (cost $399,408,878) |
|
$ |
797,318,932 |
|
Repurchase agreement, at value (cost $1,069,000) |
|
|
1,069,000 |
|
Foreign currency, at value (cost $7,555,513) |
|
|
7,553,936 |
|
Cash |
|
|
959 |
|
Receivable for investments sold |
|
|
4,723,306 |
|
Interest and dividends receivable |
|
|
2,515,801 |
|
Prepaid expenses |
|
|
24,860 |
|
Total assets |
|
|
813,206,794 |
|
|
|
Liabilities |
|
|
|
|
Payable for investments purchased |
|
|
2,219,870 |
|
Deferred foreign capital gains tax |
|
|
1,980,330 |
|
Investment management fees payable (Note 3) |
|
|
662,980 |
|
Administration fee payable (Note 3) |
|
|
51,646 |
|
Investor relations fees payable (Note 3) |
|
|
48,146 |
|
Director fees payable |
|
|
24,079 |
|
Other accrued expenses |
|
|
260,016 |
|
Total liabilities |
|
|
5,247,067 |
|
|
|
|
|
|
Net Assets |
|
$ |
807,959,727 |
|
|
|
Composition of Net Assets: |
|
|
|
|
Capital stock (par value $.001 per share) (Note 5) |
|
$ |
28,888 |
|
Paid-in capital in excess of par |
|
|
378,154,695 |
|
Distributions in excess of net investment income |
|
|
(4,491,690 |
) |
Accumulated net realized gain from investments and foreign currency transactions |
|
|
38,349,012 |
|
Net unrealized appreciation on investments and translation of assets and liabilities
denominated in foreign currencies |
|
|
395,918,822 |
|
Net Assets |
|
$ |
807,959,727 |
|
Net asset value per share based on 28,888,479 shares issued and outstanding |
|
$ |
27.97 |
|
See Notes to Financial Statements.
The India Fund, Inc.
9
Statement of Operations (unaudited)
For the Six-Month Period Ended June 30, 2016
|
|
|
|
|
Net Investment Income |
|
|
|
|
|
|
Income |
|
|
|
|
Dividends and other income (net of foreign withholding taxes of $0) |
|
$ |
5,865,422 |
|
|
|
|
5,865,422 |
|
|
|
Expenses |
|
|
|
|
Investment management fee (Note 3) |
|
|
3,801,047 |
|
Administration fee (Note 3) |
|
|
307,752 |
|
Directors fees |
|
|
207,111 |
|
Custodians fees and expenses |
|
|
162,101 |
|
Investor relations fees and expenses (Note 3) |
|
|
108,224 |
|
Legal fees and expenses |
|
|
107,859 |
|
Reports to shareholders and proxy solicitation |
|
|
82,405 |
|
Insurance expense |
|
|
61,618 |
|
Independent auditors fees and expenses |
|
|
51,378 |
|
PA franchise tax fee |
|
|
32,075 |
|
Transfer agents fees and expenses |
|
|
10,777 |
|
Miscellaneous |
|
|
46,688 |
|
Net expenses |
|
|
4,979,035 |
|
|
|
|
|
|
Net Investment Income |
|
|
886,387 |
|
|
|
Net Realized and Unrealized Gain/(Losses) on Investments and Foreign Currency Related Transactions |
|
|
|
|
|
|
Net realized gain/(loss) from: |
|
|
|
|
Investment transactions |
|
|
33,534,945 |
|
Foreign currency transactions |
|
|
(295,687 |
) |
|
|
|
33,239,258 |
|
|
|
Net change in unrealized appreciation/(depreciation) on: |
|
|
|
|
Investments (including $3,759,439 change in deferred capital gains tax) (Note 2g) |
|
|
22,769,972 |
|
Foreign currency translation |
|
|
(19,151 |
) |
|
|
|
22,750,821 |
|
Net realized and unrealized gain from investments and foreign currency
transactions |
|
|
55,990,079 |
|
Net Increase in Net Assets Resulting from Operations |
|
$ |
56,876,466 |
|
See Notes to Financial Statements.
The India Fund, Inc.
10
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
For the Six-Month Period Ended June 30,
2016 (unaudited) |
|
|
For the Year Ended December 31, 2015 |
|
|
|
|
Increase/(Decrease) in Net Assets |
|
|
|
|
|
|
|
|
|
|
|
Operations: |
|
|
|
|
|
|
|
|
Net investment income |
|
$ |
886,387 |
|
|
$ |
435,989 |
|
Net realized gain from investments and foreign currency transactions |
|
|
33,239,258 |
|
|
|
45,672,679 |
|
Net change in unrealized appreciation/(depreciation) on investments and translation of
assets and liabilities denominated in foreign currencies |
|
|
22,750,821 |
|
|
|
(72,417,737 |
) |
Net increase/(decrease) in net assets resulting from operations |
|
|
56,876,466 |
|
|
|
(26,309,069 |
) |
|
|
|
Distributions to Shareholders from: |
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
(4,894,930 |
) |
Net realized gains |
|
|
|
|
|
|
(48,554,755 |
) |
Net decrease in net assets from distributions |
|
|
|
|
|
|
(53,449,685 |
) |
|
|
|
Capital Share Transactions: |
|
|
|
|
|
|
|
|
Repurchase of shares under open market repurchase policy (358,593 and 360,209, respectively)
(Note 7) |
|
|
(7,980,845 |
) |
|
|
(8,730,657 |
) |
Change in net assets from capital share transactions |
|
|
(7,980,845 |
) |
|
|
(8,730,657 |
) |
Change in net assets resulting from operations |
|
|
48,895,621 |
|
|
|
(88,489,411 |
) |
|
|
|
Net Assets: |
|
|
|
|
|
|
|
|
Beginning of period |
|
|
759,064,106 |
|
|
|
847,553,517 |
|
End of period (including distributions in excess of net investment income of ($4,491,690) and ($5,378,077),
respectively) |
|
$ |
807,959,727 |
|
|
$ |
759,064,106 |
|
See Notes to Financial Statements.
The India Fund, Inc.
11
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six- Month Period Ended June 30, 2016 (unaudited) |
|
|
For the Fiscal Years Ended December 31, |
|
|
|
|
2015 |
|
|
2014 |
|
|
2013 |
|
|
2012 |
|
|
2011 |
|
Per Share Operating Performance(a): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period |
|
|
$25.95 |
|
|
|
$28.63 |
|
|
|
$22.92 |
|
|
|
$23.79 |
|
|
|
$21.57 |
|
|
|
$35.71 |
|
Net investment income/(loss) |
|
|
0.03 |
|
|
|
0.01 |
(b) |
|
|
0.08 |
|
|
|
0.10 |
|
|
|
0.11 |
|
|
|
(0.02 |
) |
Net realized and unrealized gain/(loss) on investments and foreign currency related transactions |
|
|
1.95 |
|
|
|
(0.91 |
) |
|
|
7.40 |
|
|
|
0.05 |
|
|
|
4.44 |
|
|
|
(13.08 |
) |
Income tax (expense) reversal(c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0.12 |
|
Total from investment operations |
|
|
1.98 |
|
|
|
(0.90 |
) |
|
|
7.48 |
|
|
|
0.15 |
|
|
|
4.55 |
|
|
|
(12.98 |
) |
Dividends and distributions to shareholders from: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income |
|
|
|
|
|
|
(0.16 |
) |
|
|
(0.12 |
) |
|
|
(0.08 |
) |
|
|
(0.15 |
) |
|
|
(0.02 |
) |
Net realized gains |
|
|
|
|
|
|
(1.66 |
) |
|
|
(1.74 |
) |
|
|
(0.87 |
) |
|
|
(2.22 |
) |
|
|
(1.09 |
) |
Tax return of capital |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.09 |
) |
Total dividends and distributions to shareholders |
|
|
|
|
|
|
(1.82 |
) |
|
|
(1.86 |
) |
|
|
(0.95 |
) |
|
|
(2.37 |
) |
|
|
(1.20 |
) |
Capital Share Transactions: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact due to capital shares issued from stock distribution (Note 5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.21 |
) |
|
|
|
|
|
|
|
|
Impact due to shares tendered or repurchased (Notes 5 and 6) |
|
|
|
|
|
|
|
|
|
|
0.08 |
|
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.04 |
|
Impact due to open market repurchase policy (Note 7) |
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.01 |
|
|
|
0.10 |
|
|
|
|
|
|
|
|
|
Total capital share transactions |
|
|
0.04 |
|
|
|
0.04 |
|
|
|
0.09 |
|
|
|
(0.07 |
) |
|
|
0.04 |
|
|
|
0.04 |
|
Net asset value, end of period |
|
|
$27.97 |
|
|
|
$25.95 |
|
|
|
$28.63 |
|
|
|
$22.92 |
|
|
|
$23.79 |
|
|
|
$21.57 |
|
Market value, end of period |
|
|
$24.30 |
|
|
|
$22.74 |
|
|
|
$25.81 |
|
|
|
$20.00 |
|
|
|
$20.91 |
|
|
|
$19.04 |
|
|
|
|
|
|
|
|
Total Investment Return Based
on(d): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market value |
|
|
6.86% |
|
|
|
(4.42% |
) |
|
|
37.83% |
|
|
|
0.16% |
|
|
|
21.70% |
|
|
|
(42.96% |
) |
Net asset value |
|
|
7.78% |
|
|
|
(1.67% |
)(e) |
|
|
33.41% |
(e) |
|
|
0.89% |
|
|
|
22.22% |
|
|
|
(36.47% |
) |
|
|
|
|
|
|
|
Ratio to Average Net Assets/Supplementary Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted) |
|
|
$807,960 |
|
|
|
$759,064 |
|
|
|
$847,554 |
|
|
|
$800,673 |
|
|
|
$877,076 |
|
|
|
$880,876 |
|
Average net assets (000 omitted) |
|
|
$738,207 |
|
|
|
$862,993 |
|
|
|
$837,505 |
|
|
|
$874,054 |
|
|
|
$940,120 |
|
|
|
$1,268,468 |
|
Net operating expenses, after income tax reversal, after reimbursement and waiver(f) |
|
|
1.36% |
(g) |
|
|
1.32% |
|
|
|
1.47% |
|
|
|
1.17% |
|
|
|
1.16% |
|
|
|
1.01% |
|
Net operating expenses, before income tax reversal, prior to reimbursement and waiver(f) |
|
|
1.36% |
(g) |
|
|
1.32% |
|
|
|
1.74% |
|
|
|
1.43% |
|
|
|
1.41% |
|
|
|
1.44% |
|
Net operating expenses, before income tax reversal, after reimbursement and waiver(f) |
|
|
1.36% |
(g) |
|
|
1.32% |
|
|
|
1.47% |
|
|
|
1.17% |
|
|
|
1.16% |
|
|
|
1.40% |
(c) |
Net investment income/(loss) |
|
|
0.24% |
(g) |
|
|
0.05% |
(b) |
|
|
0.29% |
|
|
|
0.41% |
|
|
|
0.49% |
|
|
|
(0.07% |
) |
Portfolio turnover |
|
|
6.32% |
|
|
|
5.74% |
|
|
|
3.28% |
|
|
|
3.32% |
|
|
|
36.36% |
|
|
|
51.39% |
|
The India Fund, Inc.
12
Financial Highlights (concluded)
(a) |
|
Based on average shares outstanding. |
(b) |
|
Included within the net investment income per share and the ratio of net investment income to average net assets are the effects of an adjustment to a foreign tax
liability. If such amounts were excluded, the net investment income per share and the ratio of net investment income to average net assets would have been $(0.01) and -0.04%, respectively. |
(c) |
|
A reversal of $20,551,036 was made in 2006 to the prior years tax provision described below (see Note 2f). An additional reversal of $4,956,314 was made in 2011 to
the same tax provision. |
(d) |
|
Total investment return based on market value is calculated assuming that shares of the Funds common stock were purchased at the closing market price as of the
beginning of the period, dividends, capital gains, and other distributions were reinvested as provided for in the Funds dividend reinvestment plan and then sold at the closing market price per share on the last day of the period. The
computation does not reflect any sales commission investors may incur in purchasing or selling shares of the Fund. The total investment return based on the net asset value is similarly computed except that the Funds net asset value is
substituted for the closing market value. |
(e) |
|
Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting
purposes and the returns based upon those net asset values may differ from the net asset value and returns based upon net asset value as reported. |
(f) |
|
Prior to 2016, ratio inclusive of foreign tax expense. |
Amounts listed as are
$0 or round to $0.
See Notes to Financial Statements.
The India Fund, Inc.
13
Notes to Financial Statements (unaudited)
June 30, 2016
1. Organization
The India Fund, Inc. (the Fund) was incorporated in Maryland on December 27, 1993 and commenced operations on February 23, 1994. The Fund is registered under the Investment Company Act
of 1940, as amended (the 1940 Act), as a non-diversified closed-end management investment company.
The Funds investment
objective is long-term capital appreciation, which it seeks to achieve by investing primarily in the equity securities of Indian companies.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to
accounting principles generally accepted in the United States of America (GAAP). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The books and accounting records of the Fund
are maintained in U.S. Dollars.
a. Security Valuation:
The Fund values its securities at current market value or fair value, consistent with regulatory requirements. Fair value is defined in the Funds valuation and liquidity procedures as the
price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants without a compulsion to contract at the measurement date.
Equity securities that are traded on an exchange are valued at the last quoted sale price on the principal exchange on which the security is traded at the
Valuation Time subject to application, when appropriate, of the valuation factors described in the paragraph below. The Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4:00 p.m. Eastern Time).
In the absence of a sale price, the security is valued at the mean of the bid/ask price quoted at the close on the principal exchange on which the security is traded. Securities traded on NASDAQ are valued at the NASDAQ official closing price.
Closed-end funds and exchange-traded funds (ETFs) are valued at the market price of the security at the Valuation Time. A security using any of these pricing methodologies is determined to be a Level 1 investment.
Foreign equity securities that are traded on foreign exchanges that close prior to Valuation Time are valued by applying valuation
factors to the last sale price or the mean price as noted above. Valuation factors are provided by an independent pricing service provider. These valuation factors are used when pricing the
Funds portfolio holdings to estimate market movements between the time foreign markets close and the time the Fund values such foreign securities. These valuation factors are based on inputs such as depositary receipts, indices, futures,
sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. When prices with the application of valuation factors are utilized, the value assigned to the foreign securities may not be the same as quoted or
published prices of the securities on their primary markets. A security that applies a valuation factor is determined to be a Level 2 investment because the exchange-traded price has been adjusted. Valuation factors are not utilized if the
independent pricing service provider is unable to provide a valuation factor or if the valuation factor falls below a predetermined threshold; in such case, the security is determined to be a Level 1 investment.
In the event that a securitys market quotations are not readily available or are deemed unreliable (for reasons other than because the foreign exchange
on which it trades closes before the Valuation Time), the security is valued at fair value as determined by the Funds Pricing Committee, taking into account the relevant factors and surrounding circumstances using valuation policies and
procedures approved by the Board. A security that has been fair valued by the Funds Pricing Committee may be classified as Level 2 or 3 based on the nature of the inputs.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Fund discloses the fair value of its investments using a three-level hierarchy that classifies the
inputs to valuation techniques used to measure the fair value. The hierarchy assigns Level 1 measurements to valuations based upon other significant observable inputs, including unadjusted quoted prices in active markets for identical assets,
Level 2 measurements to valuations based upon other significant observable inputs, including adjusted quoted prices in active markets for similar assets, and Level 3 measurements to valuations based upon unobservable inputs that are significant
to the valuation. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable
inputs are inputs that reflect the reporting entitys own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. A financial
instruments level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement.
The India Fund, Inc.
14
Notes to Financial Statements (unaudited) (continued)
June 30, 2016
The three-level hierarchy of inputs is summarized below:
Level 1 quoted prices in active markets for identical investments;
Level 2 other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk); or
Level 3 significant unobservable inputs (including the Funds own assumptions in
determining the fair value of investments).
The following is a summary of the inputs
used as of June 30, 2016 in valuing the Funds investments and other financial instruments at fair value. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in
those securities. Refer to the Portfolio of Investments for a detailed breakout of the security types:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments, at Value |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
Long-Term Investments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information Technology Services |
|
$ |
1,602,720 |
|
|
$ |
135,433,268 |
|
|
$ |
|
|
|
$ |
137,035,988 |
|
Pharmaceuticals |
|
|
49,146,576 |
|
|
|
46,510,191 |
|
|
|
|
|
|
|
95,656,767 |
|
Other |
|
|
|
|
|
|
564,626,177 |
|
|
|
|
|
|
|
564,626,177 |
|
Short-Term Investment |
|
|
|
|
|
|
1,069,000 |
|
|
|
|
|
|
|
1,069,000 |
|
Total |
|
$ |
50,749,296 |
|
|
$ |
747,638,636 |
|
|
$ |
|
|
|
$ |
798,387,932 |
|
Amounts listed as - are $0 or round to $0.
The Fund held no Level 3 securities at June 30, 2016.
For movements between the Levels within the fair value hierarchy, the Fund has adopted a policy of recognizing transfers at the end of each period. The
utilization of valuation factors may result in transfers between Level 1 and Level 2. During the six-month period ended June 30, 2016, the security issued by Sanofi India Ltd. in the amount of $17,180,532 transferred from Level 2 to Level 1
because there was not a valuation factor applied at June 30, 2016. For the six-month period ended June 30, 2016, there were no significant changes to the fair valuation methodologies.
b. Repurchase Agreements:
The Fund may enter
into repurchase agreements under the terms of a Master Repurchase Agreement. It is the Funds policy that its custodian/counterparty segregate the underlying collateral securities, the value of which exceeds the principal amount of the
repurchase transaction, including accrued interest. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates. To the extent that any repurchase transaction exceeds one
business day, the collateral is valued on a daily basis to determine its adequacy. Under the Master Repurchase Agreement, if the counterparty defaults and the value of the collateral declines, or if bankruptcy proceedings are commenced with respect
to the counterparty of the repurchase agreement, realization of the collateral by the Fund may be delayed or limited. Repurchase agreements are subject to contractual netting arrangements with the counterparty, Fixed Income Clearing Corp. For
additional information on the Funds repurchase agreement, see the Portfolio of Investments. The Fund held a repurchase agreement of $1,069,000 as of June 30, 2016. The value of the
related collateral exceeded the value of the repurchase agreement at June 30, 2016.
c. Foreign Currency Translation:
Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. Dollars at the exchange rate of
said currencies against the U.S. Dollar, as of the Valuation Time, as provided by an independent pricing service approved by the Board.
Foreign currency amounts are translated into U.S. Dollars on the following basis:
(i) |
|
market value of investment securities, other assets and liabilities at the exchange rates at the current daily rates of exchange; and
|
(ii) |
|
purchases and sales of investment securities, income and expenses at the rate of exchange prevailing on the respective dates of such transactions.
|
The Fund does not isolate that portion of gains and losses on investments in equity securities that is due to changes in the
foreign exchange rates from that which is due to changes in market prices of equity securities. Accordingly, realized and unrealized foreign currency gains and losses with respect to such securities are included
The India Fund,
Inc.
15
Notes to Financial Statements (unaudited) (continued)
June 30, 2016
in the reported net realized and unrealized gains and losses on investment transactions balances.
The Fund reports certain foreign currency related transactions and foreign taxes withheld on security transactions as components of realized gains for
financial reporting purposes, whereas such foreign currency related transactions are treated as ordinary income for U.S. federal income tax purposes.
Net unrealized currency gains or losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation/depreciation
in value of investments, and translation of other assets and liabilities denominated in foreign currencies. Net realized foreign exchange gains or losses represent foreign exchange gains and losses from transactions in foreign currencies and forward
foreign currency contracts, exchange gains or losses realized between the trade date and settlement date on security transactions, and the difference between the amounts of interest and dividends recorded on the Funds books and the
U.S. Dollar equivalent of the amounts actually received.
Foreign security and currency transactions may involve certain considerations and
risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. Dollar. Generally, when the U.S. Dollar rises in value against foreign currency, the
Funds investments denominated in that foreign currency will lose value because the foreign currency is worth fewer U.S. Dollars; the opposite effect occurs if the U.S. Dollar falls in relative value.
d. Security Transactions, Investment Income and Expenses:
Security transactions are recorded on the trade date. Realized and unrealized gains/(losses) from security and currency transactions are calculated on the identified cost basis. Dividend income is recorded
on the ex-dividend date except for certain dividends on foreign securities, which are recorded as soon as the Fund is informed after the ex-dividend date. Interest income and expenses are recorded on an accrual basis.
e. Distributions:
On an annual basis, the
Fund intends to distribute its net realized capital gains, if any, by way of a final distribution to be declared during the calendar quarter ending December 31. Dividends and distributions to stockholders are recorded on the ex-dividend date.
Dividends and distributions to stockholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These
differences are primarily due to foreign currency losses and investments in passive foreign investment companies.
f. Federal Income Taxes:
The Fund intends to continue to qualify as a regulated investment company by complying with the provisions available to certain investment companies, as defined in Subchapter M of the Internal
Revenue Code of 1986, as amended, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes. Therefore, no federal income tax provision is
required.
For the year ended December 31, 2005, a provision of $25,507,350 was made for U.S. federal income tax purposes as, at that time,
it was unclear whether the Fund qualified as a RIC under Subchapter M of the Code for the taxable year ended December 31, 2004. In order to preserve the Funds status as a RIC under Subchapter M of the Code for the taxable year ended
December 31, 2004, on April 20, 2006 the Fund distributed a deficiency dividend to shareholders in the amount of $1.07 per share, of which $0.95 per share was designated as a Capital Gain Dividend. Under the deficiency procedure, the
maximum that the Fund could have been obligated to pay the Internal Revenue Service in interest and penalties was $4,956,314. Accordingly, a reversal of $20,551,036 was made in 2006 related to the 2005 tax provision.
In October of 2011, the Fund settled this matter with the Internal Revenue Service for $2,505,900. Fifty percent of the settlement amount was characterized
as interest and was deductible by the Fund; the remaining fifty percent was characterized as a penalty and was not deductible or otherwise recoverable for federal income tax purposes by the Fund. The Funds former service providers reimbursed
the Fund for the full settlement amount. The difference of $2,450,414 between the accrual and the settlement amount was reversed. The combination of the reimbursed settlement and reversal of the prior accrual was reflected in the 2011 statement of
operations.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is more likely than not to be
sustained assuming examination by tax authorities. Management of the Fund has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Since tax authorities can examine previously
filed tax returns, the Funds U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended December 31 are subject to such review.
g. Foreign Withholding Tax:
Dividend and interest income from non-U.S. sources received by the
Fund are generally subject to non-U.S. withholding taxes. The above taxes may be reduced or eliminated under the terms of applicable
The India Fund, Inc.
16
Notes to Financial Statements (unaudited) (continued)
June 30, 2016
U.S. income tax treaties with some of these countries. The Fund accrues such taxes when the related income is
earned.
In addition, when the Fund sells securities within certain countries in which it invests, the capital gains realized may be subject to
tax. Based on these market requirements and as required under GAAP, the Fund accrues deferred capital gains tax on securities currently held that have unrealized appreciation within these countries. The amount of deferred capital gains tax accrued
is reported on the Statement of Operations as part of the Net Change in Unrealized Appreciation/Depreciation on Investments.
In September 2014,
the Indian Central Board of Direct Taxes (CBDT) began submitting retrospective claims for a minimum alternative tax (MAT) at a rate of 18.5% on book accounting profits of foreign portfolio investors (FPIs) that invest in Indian securities. Despite
the general understanding of the industry that MAT was not meant to apply to foreign companies not having a business presence in India, the CBDT has taken the position that MAT applies to corporate FPIs on all income (including capital gains) for
past periods extending up to seven years, through March 31, 2015. In April 2015, the CBDT clarified, verbally, that FPIs domiciled in countries benefiting from double taxation treaties with India are exempt from the MAT levy. In May 2015, the
India Finance Minister announced the formation of a high-level committee to review whether the MAT should be applied retroactively to FPIs. Following the formation of the committee, the CBDT announced its instruction to its tax officials to stay MAT
proceedings against FPIs and cease issuance of new notices. In September 2015, the Government of India accepted the recommendation of the Justice A.P. Shah Committee that MAT should not be levied on FPIs having no permanent establishment or place of
business in India, applicable to years prior to April 1, 2015.
3. Agreements and Transactions with Affiliates
a. Investment Manager:
Aberdeen Asset
Management Asia Limited (AAMAL) serves as the Funds investment manager with respect to all investments. For its services, AAMAL receives fees at an annual rate of: (i) 1.10% for the first $500 million of the Funds
average weekly Managed Assets; (ii) 0.90% for the next $500 million of the Funds average weekly Managed Assets; (iii) 0.85% of the next $500 million of the Funds average weekly Managed Assets; and (iv) 0.75% of the
Funds average weekly Managed Assets in excess of $1.5 billion. Managed Assets is defined in the investment management agreement as net assets plus the amount of any borrowings for investment purposes. For the six-month period ended
June 30, 2016, AAMAL earned a gross management fee of $3,801,047.
b. Fund Administration:
Aberdeen Asset Management Inc. (AAMI), an affiliate of AAMAL, serves as the Funds administrator, pursuant to an agreement effective December 19, 2014, under which AAMI receives a fee
payable monthly by the Fund at an annual rate of 0.08% of the value of the Funds average monthly net assets. Prior to December 19, 2014, for its services, AAMI received a fee that is computed monthly at an annual rate of: (i) 0.20%
of the value of the Funds average monthly net assets for the first $1.5 billion of the Funds average monthly net assets and (ii) 0.15% of the value of the Funds average monthly net assets in excess of $1.5 billion of
the Funds average monthly net assets. For the six-month period ended June 30, 2016, the Fund paid a total of $293,669 in administrative fees to AAMI.
In addition, Cim Fund Services Ltd. (the Mauritius Administrator) provides certain administrative services relating to the 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-month period ended June 30, 2016, fees and expenses for the Mauritius Administrator amounted to $14,083.
c. Investor Relations:
Under the terms of the
Investor Relations Services Agreement, AAMI provides and pays third parties to provide investor relations services to the Fund and certain other funds advised by AAMAL or its affiliates as part of an Investor Relations Program. Under the Investor
Relations Services Agreement, the Fund owes a portion of the fees related to the Investor Relations Program (the Funds Portion). However, investor relations services fees are capped by AAMI so that the Fund will only pay up to an
annual rate of 0.05% of the Funds average weekly net assets. Any difference between the capped rate of 0.05% of the Funds average weekly net assets and the Funds Portion is paid for by AAMI.
Pursuant to the terms of the Investor Relations Services Agreement, AAMI provides, among other things, objective and timely information to shareholders based
on publicly-available information; provides information efficiently through the use of technology while offering shareholders immediate access to knowledgeable investor relations representatives; develops and maintains effective communications with
investment professionals from a wide variety of firms; creates and maintains investor relations communication materials such as fund manager interviews, films and webcasts, published white papers, magazine articles and other relevant materials
discussing the Funds investment results, portfolio positioning and outlook; develops and maintains effective communications with large institutional shareholders; responds to specific shareholder questions; and reports activities and results
to
The India Fund,
Inc.
17
Notes to Financial Statements (unaudited) (continued)
June 30, 2016
the Board and management detailing insight into general shareholder sentiment.
During the six-month period ended June 30, 2016, the Fund incurred investor relations fees of approximately $108,224. For the six-month period ended
June 30, 2016, AAMI did not waive any investor relations fees because the Fund did not reach the capped amount. Investor relations fees and expenses in the Statement of Operations include certain out-of-pocket expenses.
4. Investment Transactions
Purchases and
sales of investment securities (excluding short-term securities) for the six-month period ended June 30, 2016, were $47,549,491 and $105,600,853, respectively.
5. Capital
The authorized capital of the Fund is 100,000,000 shares of $0.001 par value common
stock. During the six-month period ended June 30, 2016, the Fund repurchased 358,593 shares under its target discount policy (See Note 7). As of June 30, 2016, there were 28,888,479 shares of common stock issued and outstanding.
6. Targeted Discount Policy
The
Funds targeted discount policy seeks to manage the Funds discount by buying back shares of common stock in the open market at times when the Funds shares trade at a discount of 10% or more to NAV. With the approval of the
elimination of the semi-annual repurchase offers, the Board agreed to review the targeted discount percentage after a two-year period commencing from the completion of the tender offer that expired on April 3, 2014. If a 10% or less
volume-weighted average discount is not attained over the two-year period, the Board may potentially consider, although it is not obligated to, other actions that may be effective to address the discount. The targeted discount policy, which became
effective upon the elimination of the Funds interval structure, extended the Funds prior open market repurchase policy. The Board approved a renewal of its targeted discount policy for an additional two-year period commencing on
April 4, 2016. Under the open market repurchase policy, the Fund repurchased 358,593 shares for $7,980,845 during the six-month period ended June 30, 2016 and 360,209 shares for $8,730,657 during the year ended December 31, 2015.
7. Portfolio Investment Risks
a. Risks Associated with Foreign Securities and Currencies:
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers.
These risks include, among others, future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition,
with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, and political or social instability or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments
in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from
developing countries. Foreign securities may also be harder to price than U.S. securities.
Some countries require governmental approval for the
repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is deterioration in a countrys balance of payments or for other reasons, a country may impose temporary restrictions
on foreign capital remittances abroad. Amounts repatriated prior to the end of specified periods may be subject to taxes as imposed by a foreign country.
b. Risks Associated with Indian Markets:
The Indian securities markets are, among other things,
substantially smaller, less developed, less liquid and more volatile than the major securities markets in the United States. Consequently, acquisitions and dispositions of Indian securities involve special risks and considerations not present with
respect to U.S. securities.
c. Sector Risk:
To the extent that the Fund has a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector, the Fund may be
more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly.
In particular, being invested heavily in
the financial sector may make the Fund vulnerable to risks and pressures facing companies in that sector, such as regulatory, consolidation, interest rate changes and general economic conditions.
8. Contingencies
In the normal course of
business, the Fund may provide general indemnifications pursuant to certain contracts and organizational documents. The Funds maximum exposure under these arrangements is dependent on future claims that may be made
The India Fund, Inc.
18
Notes to Financial Statements (unaudited) (concluded)
June 30, 2016
against the Fund, and therefore, cannot be estimated; however, based on experience, the risk of loss from such
claims is considered remote.
9. Tax Information
The U.S. federal income tax basis of the Funds investments and the net unrealized appreciation as of June 30, 2016 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Basis of Investments |
|
|
Appreciation |
|
|
Depreciation |
|
|
Net
Unrealized
Appreciation |
|
|
$400,477,878 |
|
|
$ |
405,317,262 |
|
|
$ |
(7,407,208 |
) |
|
$ |
397,910,054 |
|
10. Foreign Income Tax
Prior to April 1, 2015, the Fund conducted its investment activities in India as a tax resident of Mauritius to obtain benefits under the double taxation treaty between Mauritius and India (the
tax treaty or the treaty). To obtain benefits under the tax treaty, the Fund was required to meet certain tests and conditions, including the establishment of Mauritius tax residence and related requirements. The Fund
obtained a certificate from the Mauritian authorities that it is a resident of Mauritius under the tax 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. The Fund, in any year that it had taxable
income for Mauritius tax purposes, paid tax on its net income for Mauritius tax purposes at a rate of 15%, but was able to offset 80% of this rate through a foreign tax credit.
Following an extensive due diligence process and cost benefit analysis undertaken in coordination with the Funds Investment Manager, tax advisors and
legal counsels in the U.S., India and Mauritius, the Board determined to transition the branch operations from Mauritius and conduct operations directly from the U.S. This transition was effected as of end of day on March 31, 2015. As a result,
the Fund no longer receives the benefits under the tax treaty. In making this decision, the Board considered that any future benefits obtained by the Fund under its current structure would be limited in light of the long-term buy and hold investment
strategy of the Investment Manager and would not support the continued costs of operating the Mauritius branch. The Fund will continue to use the Mauritius Administrator until the Mauritius deregistration process is complete.
11. Subsequent Events
Management has
evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no disclosures and/or adjustments were required to the financial statements as of
June 30, 2016.
The India Fund,
Inc.
19
Supplemental Information (unaudited)
Results of Annual Meeting of Stockholders
The Annual Meeting of Stockholders was held on Wednesday, June 22, 2016 at 1735 Market Street, 32nd Floor, Philadelphia, Pennsylvania. The description of the
proposals and number of shares voted at the meeting are as follows:
1. To elect one Class I Director and three Class III Directors to the Board
of Directors, each to hold office until the 2018 and 2019 Annual Meeting of Stockholders, respectively, or thereafter until his or her successor is elected and qualified.
|
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Votes For |
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Votes Against |
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Abstain |
|
Class I |
|
|
|
|
|
|
|
|
|
|
|
|
Nisha Kumar |
|
|
20,940,029 |
|
|
|
963,181 |
|
|
|
490,643 |
|
Class III |
|
|
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|
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|
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|
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|
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J. Marc Hardy |
|
|
19,001,184 |
|
|
|
2,898,714 |
|
|
|
493,955 |
|
Hugh Young |
|
|
19,139,028 |
|
|
|
2,758,282 |
|
|
|
496,543 |
|
Nancy Yao Maasbach |
|
|
20,957,329 |
|
|
|
991,886 |
|
|
|
444,640 |
|
Directors whose terms of office continued beyond this meeting are as follows: Stephane R. F. Henry, Leslie H. Gelb, Luis F.
Rubio, Jeswald W. Salacuse, and Martin Gilbert.
Dividend Reinvestment and Cash Purchase Plan
(unaudited)
The Fund intends to distribute annually to stockholders 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-term and short-term capital gains net of expenses.
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the Plan), stockholders whose shares of common stock are registered in their own names will be deemed to have elected to have all
distributions automatically reinvested by Computershare Trust Company N.A. (Plan Agent) in the Fund shares pursuant to the Plan, unless such stockholders elect to receive distributions in cash. Stockholders who elect to receive
distributions in cash will receive such distributions paid by check in U.S. Dollars mailed directly to the stockholder by Computershare Trust Company N.A., as dividend paying agent. In the case of stockholders 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 stockholders as representing the total amount registered in such stockholders
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 stockholders in administering the Plan. If the Directors of the Fund declare an income dividend or a capital gains distribution payable either in the Funds 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 NAV per share on that date, the Fund will issue new shares to participants at NAV; provided, however, that if the NAV is less than 95% of the market price on the 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 NAV 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 NAV of a Fund share, the average per share purchase price paid by the Plan Agent may exceed the
NAV of the Funds shares, resulting in the
The India Fund, Inc.
20
Dividend Reinvestment and Cash Purchase Plan
(unaudited) (concluded)
acquisition of fewer shares than if the distribution had been paid in shares issued by the Fund on the
dividend payment date. Because of the foregoing 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 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 Funds 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 stockholders 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 shareholders 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 Agents fees for the reinvestment of dividends, 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 Agents open market purchases in connection
with the reinvestment of dividends, 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 commission thus attainable.
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 Computershare, P.O. Box 30170, College Station, TX 77842-3170.
The India Fund,
Inc.
21
Corporate Information
Directors
Leslie H. Gelb
Martin Gilbert
J. Marc Hardy
Stephane R. F. Henry
Nisha Kumar
Nancy Yao Maasbach
Luis F. Rubio
Jeswald W. Salacuse, Chairman
Hugh Young
Officers
Alan Goodson, President
Jeffrey Cotton,
Vice President and Chief Compliance Officer
Andrea Melia, Treasurer
Lucia Sitar, Vice President and Chief Legal Officer
Megan Kennedy, Vice President and
Secretary
Adrian Lim, Vice President
Bev Hendry, Vice President
Jennifer Nichols, Vice President
Christian Pittard, Vice President
Kasey Deja,
Assistant Secretary
Sharon Ferrari, Assistant Treasurer
Investment Manager
Aberdeen Asset Management Asia Limited
21 Church Street
#01-01 Capital Square Two
Singapore 049480
Administrator
Aberdeen Asset Management, Inc.
1735
Market Street, 32nd Floor
Philadelphia, PA 19103
Mauritius Administrator
Cim Global Business Fund Services, Ltd.
33, Edith Cavell Street,
Port Louis, Mauritius
Custodians
State Street Bank and Trust Company
1 Iron Street, 5th Floor
Boston, MA 02110
Deutsche Bank (Mauritius) Limited
Fourth Floor
Barkly Wharf East
Le Caudan Waterfront
Port Louis, Mauritius
Transfer Agent
Computershare Trust
Company, N.A.
P.O. Box 20170
College
Station, TX
77842-3170
Independent
Registered Public Accounting Firm
PricewaterhouseCoopers LLP
2001 Market Street
Philadelphia, PA 19103
Fund Legal Counsel
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
Independent Director Legal Counsel
Stradley,
Ronon, Stevens & Young LLP
2005 Market Street, 32nd Floor
Philadelphia, PA 19103
Investor Relations
Aberdeen Asset Management Inc.
1735 Market Street,
32nd Floor
Philadelphia, PA 19103
1-800-522-5465
InvestorRelations@aberdeen-asset.com
Aberdeen Asset Management Asia Limited
The accompanying financial statements as of June 30, 2016 were not audited and accordingly, no opinion is expressed therein.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Fund may purchase, from time to time, shares of its common stock in the open market.
Shares of The India Fund, Inc. are traded on the NYSE under the symbol IFN. Information about the Funds net asset value and market price is
available at www.aberdeenifn.com.
This report, including the financial information herein, is transmitted to the shareholders of The India Fund,
Inc. for their general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person. Past performance is no guarantee of future returns.
Item 2 - Code of Ethics.
Not applicable to semi-annual report on Form N-CSR.
Item 3 - Audit Committee Financial Expert.
Not applicable to semi-annual report on Form N-CSR.
Item 4 - Principal Accountant Fees and Services.
Not applicable to semi-annual report on Form N-CSR.
Item 5 - Audit Committee of Listed Registrants.
Not applicable to semi-annual report on Form N-CSR.
Item 6 - Investments.
|
(a) |
Schedule of Investments in securities of unaffiliated issuers as of close of the reporting period is included as part of the Reports to Stockholders filed under Item 1 of this Form N-CSR. |
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies.
Not applicable to semi-annual report on Form N-CSR.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies.
(a) Not applicable to semi-annual report on Form N-CSR.
(b) During the period ended June 30, 2016, there was a change to the Portfolio Managers identified in the Registrants Annual Report
on Form N-CSR filed on March 4, 2016.
(a)(1) The information in the table below is as of September 2,
2016.
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Individual & Position |
|
Services Rendered |
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|
Past Business Experience |
James Thom
Senior Portfolio Manager |
|
Effective January 31, 2016, Mr Thom is responsible
for day-to-day management and overall supervision of the Funds portfolio from Mr. Chou Chong. He joins Hugh Young, Adrian Lim, Flavia Cheong and Kristy Fong. |
|
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James Thom is a Senior Investment Manager on the Asian Equities Team. James joined Aberdeen in 2010 from Actis,
an Emerging Markets Private Equity firm, based in Singapore and covering Southeast Asia. James holds an MBA from INSEAD, an MA from Johns Hopkins University and a BSc from University College London. |
(a)(2) The information in the table below is as of June 30, 2016.
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Name of
Portfolio Manager |
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Type of Accounts |
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Total
Number of
Accounts Managed
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Total Assets ($M) |
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Number
of Accounts Managed for Which Advisory Fee is Based on Performance
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Total Assets for
Which Advisory Fee is
Based on Performance ($M) |
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James Thom |
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Registered Investment Companies
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23 |
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$ |
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10,462.65 |
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0 |
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$ |
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0 |
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Pooled Investment Vehicles |
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86 |
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$ |
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37,807.13 |
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2 |
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$ |
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399.91 |
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Other Accounts |
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133 |
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$ |
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33,049.38 |
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16 |
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$ |
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4,972.36 |
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Total Assets are as of June 30, 2016 and have been translated into U.S. Dollars at a rate of £1.00
= 1.34.
In accordance with legal requirements in the various jurisdictions in which they operate, and their own Conflicts of Interest
policies, all subsidiaries of Aberdeen Asset Management PLC, (together Aberdeen), have in place arrangements to identify and manage Conflicts of Interest that may arise between them and their clients or between their different clients. Where
Aberdeen does not consider that these arrangements are sufficient to manage a particular conflict, it will inform the relevant client(s) of the nature of the conflict so that the client(s) may decide how to proceed.
The portfolio managers management of other accounts, including (1) mutual funds; (2) other pooled investment
vehicles; and (3) other accounts that may pay advisory fees that are based on account performance (performance-based fees), may give rise to potential conflicts of interest in connection with their management of a Funds
investments, on the one hand, and the investments of the other accounts, on the other. The other accounts may have the same investment objective as a Fund. Therefore, a potential conflict of interest may arise as a result of the identical investment
objectives, whereby the portfolio manager could favor one account over another. However, Aberdeen believes that these risks are mitigated by the fact that: (i) accounts with like investment strategies managed by a particular portfolio manager
are generally managed in a similar fashion, subject to exceptions to account for particular investment restrictions or policies applicable only to certain accounts, differences in cash flows and account sizes, and similar factors; and
(ii) portfolio manager personal trading is monitored to avoid potential conflicts. In addition, Aberdeen has adopted trade allocation procedures that require equitable allocation of trade orders for a particular security among participating
accounts.
In some cases, another account managed by the same portfolio manager may compensate Aberdeen based on the performance of the
portfolio held by that account. The existence of such performance-based fees may create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities.
Another potential conflict could include instances in which securities considered as investments for a Fund also may be appropriate for other
investment accounts managed by Aberdeen or its affiliates. Whenever decisions are made to buy or sell securities by the Fund and one or more of the other accounts simultaneously, Aberdeen may aggregate the purchases and sales of the securities and
will allocate the securities transactions in a manner
that it believes to be equitable under the circumstances. As a result of the allocations, there may be instances where the Fund will not participate in a transaction that is allocated among other
accounts. While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available to a Fund from time to time, it is the opinion of Aberdeen that the benefits from the Aberdeen organization
outweigh any disadvantage that may arise from exposure to simultaneous transactions. Aberdeen has adopted policies that are designed to eliminate or minimize conflicts of interest, although there is no guarantee that procedures adopted under such
policies will detect each and every situation in which a conflict arises.
(a)(3)
Aberdeens remuneration policies are designed to support its business strategy as a leading international asset manager. The
objective is to attract, retain and reward talented individuals for the delivery of sustained, superior returns for Aberdeens clients and shareholders. Aberdeen operates in a highly competitive international employment market, and aims to
maintain its strong track record of success in developing and retaining talent.
Aberdeens policy is to recognize corporate and
individual achievements each year through an appropriate annual bonus scheme. The aggregate value of awards in any year is dependent on the groups overall performance and profitability. Consideration is also given to the levels of
bonuses paid in the market. Individual awards, which are payable to all members of staff are determined by a rigorous assessment of achievement against defined objectives.
A long-term incentive plan for key staff and senior employees comprises of a mixture of cash and deferred shares in Aberdeen PLC or select
Aberdeen funds (where applicable). Overall compensation packages are designed to be competitive relative to the investment management industry.
Base Salary
Aberdeens policy is to pay a fair salary commensurate with the individuals role, responsibilities and experience, and having regard
to the market rates being offered for similar roles in the asset management sector and other comparable companies. Any increase is generally to reflect inflation and is applied in a manner consistent with other Aberdeen employees; any other
increases must be justified by reference to promotion or changes in responsibilities.
Annual Bonus
Aberdeens policy is to recognize corporate and individual achievements each year through an appropriate annual bonus scheme. The
Remuneration Committee of Aberdeen determines the key performance indicators that will be applied in considering the overall size of the bonus pool. In line with practice amongst other asset management companies, individual bonuses are not
subject to an absolute cap. However, the aggregate size of the bonus pool is dependent on the groups overall performance and profitability. Consideration is also given to the levels of bonuses paid in the market. Individual
awards are determined by a rigorous assessment of achievement against defined objectives, and are reviewed and approved by the Remuneration Committee.
Aberdeen has a deferral policy which is intended to assist in the retention of talent and to create additional alignment of executives
interests with Aberdeens sustained performance and, in respect of the deferral into funds, managed by Aberdeen, to align the interest of asset managers with our clients.
Staff performance is reviewed formally at least once a year. The review process evaluates the various aspects that the individual has
contributed to Aberdeen, and specifically, in the case of portfolio managers, to the relevant investment team. Discretionary bonuses are based on client service, asset growth and the performance of the respective portfolio manager. Overall
participation in team meetings, generation of original research ideas and contribution to presenting the team externally are also evaluated.
In the calculation of a portfolio management teams bonus, Aberdeen takes into consideration
investment matters (which include the performance of funds, adherence to the company investment process, and quality of company meetings) as well as more subjective issues such as team participation and effectiveness at client presentations. To
the extent performance is factored in, such performance is not judged against any specific benchmark and is evaluated over the period of a year - January to December. The pre- or after-tax performance of an individual account is not considered in
the determination of a portfolio managers discretionary bonus; rather the review process evaluates the overall performance of the team for all of the accounts the team manages.
Portfolio manager performance on investment matters is judged over all of the accounts the portfolio manager contributes to and is documented
in the appraisal process. A combination of the teams and individuals performance is considered and evaluated.
Although
performance is not a substantial portion of a portfolio managers compensation, Aberdeen also recognizes that fund performance can often be driven by factors outside ones control, such as (irrational) markets, and as such pays attention
to the effort by portfolio managers to ensure integrity of our core process by sticking to disciplines and processes set, regardless of momentum and hot themes. Short-terming is thus discouraged and trading-oriented managers will
thus find it difficult to thrive in the Aberdeen environment. Additionally, if any of the aforementioned undue risks were to be taken by a portfolio manager, such trend would be identified via Aberdeens dynamic compliance monitoring
system.
(a)(4)
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Individual |
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Dollar Range of Equity Securities in the Registrant Beneficially Owned by the Portfolio Manager as of June 30, 2016
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James Thom |
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None
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Item 9 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
REGISTRANT PURCHASES OF EQUITY SECURITIES
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Period |
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(a) Total Number of Shares (or Units) Purchased |
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(b) Average Price Paid per Share (or Unit) |
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(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans
or Programs |
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(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased
Under the Plans or Programs (1) |
January 1, 2016
through
January 31, 2016 |
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100,000 |
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$20.97 |
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100,000 |
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2,026,711 |
February 1, 2016
through
February 29, 2016 |
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25,000 |
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$20.16 |
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25,000 |
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2,001,711 |
March 1, 2016
through
March 31, 2016 |
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20,693 |
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$22.41 |
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20,693 |
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1,981,018 |
April 1, 2016
through
April 30, 2016 |
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77,421 |
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$22.91 |
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77,421 |
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1,903,597 |
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May 1, 2016
through
May 31, 2016 |
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102,545 |
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$22.83 |
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102,545 |
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1,801,052 |
June 1, 2016
through
June 30, 2016 |
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32,934 |
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$24.14 |
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32,934 |
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1,768,118 |
Total |
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358,593 |
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$22.24 |
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358,593 |
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(1) |
The open market repurchase policy was authorized on October 30, 2012. The program authorizes management to
make open market purchases from time to time in an aggregate amount up to 10% of the Funds outstanding shares, as of a date determined by the Board. Such purchases may be made when the Funds shares are trading at certain discounts to net
asset value. |
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Item 10 - Submission of Matters to a Vote of Security Holders.
During the period ended June 30, 2016, there were no material changes to the procedures by which shareholders may recommend nominees to
the Registrants Board of Directors.
Item 11. Controls and Procedures.
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(a) |
The Registrants principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrants disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940 (the 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 the
evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d15(b)). |
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(b) |
There were no changes in the Registrants internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the Registrants last fiscal
half-year that has materially affected, or is reasonably likely to materially affect, the Registrants internal control over financial reporting. |
Item 12. Exhibits.
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(a)(2) |
Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 and Section 302 of the
Sarbanes-Oxley Act of 2002 are attached hereto. |
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(b) |
Certifications pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 and 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.
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(Registrant) |
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The India Fund, Inc. |
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By (Signature and Title): |
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/s/ Alan
Goodson |
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Alan Goodson, Principal Executive Officer |
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Date: September 2, 2016
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.
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By (Signature and Title): |
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/s/ Alan
Goodson |
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Alan Goodson, Principal Executive Officer |
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Date: September 2, 2016
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By (Signature and Title): |
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/s/ Andrea
Melia |
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Andrea Melia, Principal Financial Officer |
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Date: September 2, 2016