<PAGE>
THE INDONESIA
FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 1996
<PAGE>
CONTENTS
Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . 1
Portfolio Summary. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Schedule of Investments. . . . . . . . . . . . . . . . . . . . . . . 8
Statement of Assets and Liabilities. . . . . . . . . . . . . . . . . 10
Statement of Operations. . . . . . . . . . . . . . . . . . . . . . . 11
Statement of Changes in Net Assets . . . . . . . . . . . . . . . . . 12
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . 13
Notes to Financial Statements. . . . . . . . . . . . . . . . . . . . 14
Results of Annual Meeting of Shareholders. . . . . . . . . . . . . . 17
Description of Dividend Reinvestment and Cash Purchase Plan. . . . . 18
PICTURED ON THE COVER IS A SCENIC VIEW OF THE JALAN M.H. THAMRIN ROUNDABOUT
AND NUSANTARA BUILDING LOCATED IN THE CENTER OF JAKARTA.
<PAGE>
LETTER TO SHAREHOLDERS
August 8, 1996
DEAR SHAREHOLDER:
We are pleased to report on the activities of The Indonesia Fund, Inc. (the
"Fund") for the six months ended June 30, 1996.
PERFORMANCE
At June 30, 1996, the Fund's net assets were $45.6 million. The Fund's net asset
value ("NAV") was $9.90 per share, as compared to $9.34 at December 31, 1995.
For the period January 1, 1996 through June 30, 1996, the Fund's total return
based on NAV was 6.0%. By comparison, the total return of the Morgan Stanley
Capital International Indonesia Index (the "Index") was 16.1%. From the
commencement of investment operations on March 9, 1990 through June 30, 1996,
the Fund's total return, based on NAV and assuming reinvestment of dividends and
distributions, declined 22.6%. The Index fell 20.4% during this period.
HIGHLIGHTED HOLDINGS
To illustrate our stock selection process, we'd like to discuss two of the
Fund's holdings, PT Gudang Garam and PT Telekomunikasi Indonesia. Each should
benefit from long-term trends affecting emerging markets generally.
PT GUDANG GARAM
A major trend throughout the developing world is the upward movement in
standards of living. This bodes well for companies whose products or services
should become more desirable as economies become increasingly consumer-oriented.
Indonesia, certainly, is experiencing this trend. Several significant factors
underscore the country's economic movement toward greater consumerism:
-Total and per-capita GDP are growing much more rapidly than the population.
-Consumer spending is rising.
-The middle class is growing.
-Its population of about 195 million is the world's fourth-largest and
continues to grow, indicating a huge potential market both now and into the
future.
-The youthfulness of the population means that a huge source of future
demand will almost certainly materialize over the next 5-20 years.
-Indonesians, increasingly, are moving from rural to urban areas.
- --------------------------------------------------------------------------------
1
<PAGE>
LETTER TO SHAREHOLDERS
A natural beneficiary of Indonesia's rising consumerism is its tobacco industry,
whose near- and long-term prospects are considerably enhanced by several strong
positives:
-The pool of habitual smokers is estimated at about 27 million and notably
includes a large segment of the total male population. With about half the
overall population under the age of 25 (new smokers generally start smoking
at ages 16-18) and the social approval of smoking, the total number of
smokers is likely to substantially increase.
-Per-capita cigarette consumption is much lower than that of other Asian
nations (e.g., China and Malaysia), indicating potential for growth.
-Cigarette prices are much higher in China and Malaysia, where consumption
also is much higher, suggesting that the current price will hold. This
would help to raise future revenues.
-The labor force, of which many tend to be smokers, is forecast to increase
by 2.4 million annually.
Domestic tobacco producers enjoy high barriers to entry. Of these, perhaps the
most important is that the government takes a protectionist stance toward the
industry. This is embodied in a complex system of taxes and pricing that serves
to keep foreigners out while favoring the production and consumption of local
cigarettes (known as "kreteks"). In addition, domestic tobacco manufacturers are
the nation's second-largest overall source of tax revenues, the level of which
might significantly drop if foreigners meaningfully penetrated the market.
Furthermore, Indonesians have in the past generally shown a preference for the
taste and aroma of kreteks to those of imported cigarettes. Finally, the
logistics of building a distribution system that reaches most or all of the
nation's widespread 12,000 islands are daunting.
Indonesia's largest cigarette producer, PT Gudang Garam ("GG"), is ideally
positioned to profit from the favorable environment formed by rising demand and
high barriers to entry.
GG dominates the market for kreteks, which are made in machine-rolled and the
traditional hand-rolled form. It has chosen to focus on machine-rolled kreteks,
which have demonstrated a more rapid rise in their rate of consumption.
KRETEK MARKET SHARE BY PERCENTAGE OF VOLUME, 1995
<TABLE>
<CAPTION>
COMPANY MACHINE-ROLLED HAND-ROLLED TOTAL MARKET SHARE
- ------------------- ----------------- ------------- ---------------------
<S> <C> <C> <C>
GUDANG GARAM 59.7% 19.4% 46.9%
Djarum 7.3 27.4 13.7
HM Sampoerna 5.4 22.8 10.9
Bentoel 7.5 0.3 5.2
Noyorono 0.5 7.2 2.6
Filasta 3.3 N/A* 2.2
All others 16.3 22.9 18.5
------ ------ ------
INDUSTRY TOTAL 100.0% 100.0% 100.0%
</TABLE>
- ------------------------------
* N/A = NOT AVAILABLE; FILASTA DOES NOT MAKE HAND-ROLLED KRETEKS.
SOURCE: MERRILL LYNCH
- --------------------------------------------------------------------------------
2
<PAGE>
LETTER TO SHAREHOLDERS
In addition to the very strong benefits GG derives simply from being an
Indonesian tobacco company, we like it for its many specific positive investment
attributes. Among the most prominent:
-It enjoys tremendous brand-name recognition and consumer loyalty built over
time.
-It is Indonesia's single largest payor of excise taxes (it paid about 71%
of total excise taxes in 1995), meaning that its success is in the
government's interest.
-It should benefit most from recent tax and price changes mandated by the
government. These changes have the effects of both lowering GG's costs and
of removing certain pricing advantages from its competitors. As a result,
GG's profit margins should rise and it should gain market share at the
expense of the weakest players.
-Its huge size and solid financial condition enable it to raise capital at
favorable rates.
-It is the only Indonesian tobacco company able to distribute its products
both to urban and rural areas. GG in fact owns all of its distributors.
-As a major blue-chip company and the third most highly weighted stock in
the benchmark MSCI Indonesia Index, it serves as a core holding for any
representative Indonesian portfolio.
Based on this strong scenario, we increased our position in GG during the last
six months such that it became the Fund's largest holding. We simultaneously
reduced our position in GG's main competitor, HM Sampoerna, which had preceded
GG as the Fund's largest holding as of our previous report.
PT TELEKOMUNIKASI INDONESIA
The development of physical infrastructure (I.E., energy, transportation, roads,
bridges, telecommunications, construction) is a pressing necessity among
emerging nations. In general, the outlook for companies involved in
infrastructure development is quite positive.
We consider Indonesia's domestic telecommunications provider, PT Telekomunikasi
Indonesia ("Telkom"), an excellent long-term investment play on the country's
infrastructure. This is our belief not simply because Telkom has a monopoly on
vital domestic phone service. A closer look at the company paints a much more
compelling picture.
The business environment in which Telkom operates is very favorable relative to
that found in other emerging Asian nations. This is due to Indonesia's unique
regulatory framework for telecom. Unlike many of its neighbors (e.g., Malaysia
and Thailand), Indonesia has chosen to modernize its telecom business NOT by
allowing complete market competition to replace complete government control
which approach has had negative results both for governments and companies.
By contrast, Indonesia has adopted a scheme that combines traditional monopoly
with market competition. The government designated Telkom in 1989 as the
"organizing body" for basic domestic telecommunications services, meaning that
all private entities wishing to provide such services may do so only with the
involvement of Telkom.
- --------------------------------------------------------------------------------
3
<PAGE>
LETTER TO SHAREHOLDERS
Accordingly, Telkom is extensively involved in all aspects of the domestic
business. Since the government (which still owns 80% of Telkom) retains the
authority both to set phone rates and formulate regulatory and technical
policies, there is no price competition and Telkom's profitability, essentially,
is assured.
To modernize its telecom service, Telkom has formed partnerships with teams
(known as "KSO"s) of domestic and foreign companies to develop and operate
telecom services in each of Telkom's seven regional divisions. KSOs function in
five divisions, while Telkom keeps for itself the two most usage-intensive and,
therefore, lucrative divisions. These divisions encompass the country's largest
commercial centers of Jakarta and Surabaya. Telkom is also granted exclusivity
over local service through the year 2011 and local long-distance service through
2006.
The KSO structure conveys several strong benefits to Telkom, including revenue
from each KSO in the form of an upfront payment, monthly fixed payments and an
annual variable payment; large cost savings via reductions in capital spending
and depreciation charges; and access to the financial strength, technological
expertise and management skills of foreign telecom companies without having to
relinquish management control.
In addition to the Indonesian telecom environment, there are several other
substantial positives for investment in Telkom:
-Indonesia's rapidly growing economy should continue to be a catalyst for
heavy telephone usage over the next few years.
-Potential demand is larger in Indonesia's teledensity (I.E., the level of
telephone penetration within the total population) is lower than that of
most other developing nations and among the world's lowest generally.
Despite massive building of new lines, demand is expected to outstrip
supply well into the next century.
-Substantial growth in phone-line installation has been mandated by the
government and will make usage accessible to an increasingly larger
customer base.
-Financial and operating performance are reasonably predictable due to the
government's well-laid-out telecom plans.
-Shareholder value should be enhanced by Telkom's large ownership stakes in
seven Indonesian cellular, international and satellite telecom companies.
-Management is sharply focused on boosting profitability and productivity.
-Telkom enjoys preeminent stature among Indonesian stocks. More so even than
GG, Telkom is considered a core holding for a representative Indonesian
portfolio. It is the country's largest-capitalized stock and also trades as
an American Depositary Receipt on the New York Stock Exchange. This high
liquidity will attract international investors seeking to increase their
exposure to Indonesian equities.
- --------------------------------------------------------------------------------
4
<PAGE>
LETTER TO SHAREHOLDERS
Telkom's financial performance is expected to be strong over the next few years.
As the chart below indicates, already high profit margins should rise even
higher as pretax and net income grow at annualized rates faster than that of
revenues. The proportion of revenues from core operations to total revenues
should drop from 82% to 51%, indicating strong growth from KSO income and other
non-operating sources. Earnings from equity stakes should also grow
meaningfully.
PT TELEKOMUNIKASI INDONESIA:
SELECTED FINANCIAL PROJECTIONS 1995-2000E*
(AMOUNTS IN BILLIONS OF RUPIAHS)
<TABLE>
<CAPTION>
1995 1996E 1997E 1998E 1999E 2000E CAGR**
----------- --------- --------- --------- --------- --------- -------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Total revs. 5,103.4 5,206.3 6,657.9 8,149.0 9,221.9 10,680.7 15.92%
% telephone 82.05% 56.53% 52.87% 51.33% 50.89% 50.69%
% other svcs. 17.95% 43.47% 47.13% 48.67% 49.11% 49.31%
Pretax income 1,286.0 1,921.9 2,657.4 3,782.2 4,490.2 5,518.2 33.82%
% margin 25.20% 36.92% 39.91% 46.41% 48.69% 51.67%
Net income 904.7 1,389.7 1,913.4 2,712.1 3,206.3 3,952.1 34.30%
% margin 17.73% 26.69% 28.74% 33.28% 34.77% 37.00%
Equity earnings
from
affiliates (5.5) 27.3 111.3 360.8 487.9 566.7 13.45% (from 1996)
% margin N/M*** 0.05% 1.67% 4.43% 5.29% 5.31%
</TABLE>
- ------------------------------
* E = ESTIMATE
** CAGR = COMPOUND ANNUAL GROWTH RATE
*** N/M = NOT MEANINGFUL
SOURCE: MORGAN STANLEY
OUTLOOK
We have described some of the very positive conditions for investment in
Indonesian equities, particularly those that are consistent with the trends of
rising consumerism and infrastructure development. These trends, although not
new, are strong and should continue to apply well into the future. Our outlook
remains favorable.
There is one variable, however, that could dramatically impact Indonesian
equities, whether positively or negatively. This is the issue of presidential
succession. President Suharto is now 75 and has ruled for 30 years. Whether he
will run for re-election for a seventh term in 1998 is unclear. Naturally, there
is an abundance of speculation about his eventual succession.
Since our last report, Suharto's wife has died (in April) and he had to fly
abroad to receive urgent medical treatment for an unspecified ailment (in July).
The mysterious nature of the latter set off much anxiety among Indonesians and
investors generally. Fortunately, the problem turned out to be only a kidney
stone, which was successfully treated. Suharto's doctors pronounced his health
excellent.
- --------------------------------------------------------------------------------
5
<PAGE>
LETTER TO SHAREHOLDERS
With regard to the most recent political tension in Indonesia, we note that it
is not unusual for an emerging nation to experience such difficulties and has in
fact happened many times in other countries. Historically, the transition from a
rural, agriculture-based economy to a modern, industrialized system is a long
and difficult process that evolves over the course of decades or even centuries.
In Indonesia, it has been compressed into about 40 years. We add that the effect
of what is happening now in Indonesia on an emerging nation's capital markets is
fairly short-lived, after which investors tend to pick up where they had left
off. Having this long-term perspective enables us to feel comfortable about
investing in Indonesia.
We wish to remind shareholders whose shares are registered in their own name
that they automatically participate in the Fund's dividend reinvestment program.
The automatic Dividend Reinvestment Plan (the "Plan") can be of value to
shareholders in maintaining their proportional ownership interest in the Fund in
an easy and convenient way. A shareholder whose shares are held in the name of a
broker/dealer or nominee should contact that party for details about
participating in the Plan. The Fund also offers shareholders a voluntary Cash
Purchase Plan. The Plan and the Cash Purchase Plan are described on pages 18 and
19 of this report.
Sincerely,
[SIG]
Stephen M. Swift
Chief Investment Officer*
- --------------------------------------------------------------------------------
* Stephen M. Swift, who is a Managing Director of BEA Associates, is primarily
responsible for management of the Fund's assets. He has served the Fund in such
capacity since August 2, 1995. Mr. Swift joined BEA Associates (formerly Basic
Appraisals, Inc. and BEA Associates, Inc.) in June of 1995. Mr. Swift is the
Chief Investment Officer of the Fund and is also Senior Vice President and
Investment Officer of The Emerging Markets Infrastructure Fund, Inc. and The
Emerging Markets Telecommunications Fund, Inc.
- --------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
PORTFOLIO SUMMARY - AS OF JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
SECTOR ALLOCATION
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
6/30/96 12/31/95
<S> <C> <C>
Automotive 4.77% 7.24%
Beer, Beverages, Liquors &
Tobacco 11.76% 12.03%
Conglomerates 2.75% 1.35%
Construction & Heavy Equipment 8.75% 4.74%
Financial Services 15.65% 13.33%
Food & Kindred Products 10.00% 14.28%
Housing 3.34% 3.29%
Manufacturing 10.05% 14.10%
Paper Products 2.07% 2.76%
Pharmaceuticals 4.72% 4.91%
Real Estate 5.36% 1.40%
Retailing 3.44% 4.33%
Telecommunications 9.04% 7.62%
Transportation 0.00% 2.32%
Other 4.10% 6.28%
Cash & Other Assets 4.20% 0.02%
100.0% 100.0%
</TABLE>
TOP 10 HOLDINGS, BY ISSUER
<TABLE>
<CAPTION>
Percent of Net
Holding Sector Assets
<C> <S> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------------
1. PT Gudang Garam Beer, Beverages, Liquors & Tobacco 6.8
- -------------------------------------------------------------------------------------------------------------------------------
2. PT Bank Internasional Indonesia Financial Services 6.6
- -------------------------------------------------------------------------------------------------------------------------------
3. PT Sari Husada Food & Kindred Products 6.3
- -------------------------------------------------------------------------------------------------------------------------------
4. PT Telekomunikasi Indonesia Telecommunications 5.9
- -------------------------------------------------------------------------------------------------------------------------------
5. PT HM Sampoerna Beer, Beverages, Liquors & Tobacco 5.0
- -------------------------------------------------------------------------------------------------------------------------------
6. PT Trias Sentosa Manufacturing 4.9
- -------------------------------------------------------------------------------------------------------------------------------
7. PT Astra International Automotive 4.8
- -------------------------------------------------------------------------------------------------------------------------------
8. PT Semen Gresik Manufacturing 4.2
- -------------------------------------------------------------------------------------------------------------------------------
9. PT Mulia Industrindo Construction & Heavy Equipment 3.9
- -------------------------------------------------------------------------------------------------------------------------------
10. PT IndoFood Sukses Makmur Food & Kindred Products 3.7
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
<S> <C> <C>
- -----------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-95.80%
INDONESIA-95.80%
AUTOMOTIVE-4.77%
PT Astra International... 1,500,000 $ 2,175,081
-----------
BEER, BEVERAGES, LIQUORS & TOBACCO-11.76%
PT Gudang Garam.......... 720,000 3,085,714
PT HM Sampoerna.......... 200,000 2,277,121
-----------
5,362,835
-----------
CHEMICALS-0.75%
PT Unggul Indah Corp..... 333,800 344,198
-----------
CONGLOMERATES-2.75%
PT Bimantara Citra....... 1,000,000 1,256,713
-----------
CONSTRUCTION & HEAVY EQUIPMENT-8.75%
PT Citra Marga Nusaphala
Persada................. 825,000 1,258,324
PT Mulia Industrindo..... 1,199,800 1,778,436
PT United Tractors....... 606,000 956,842
-----------
3,993,602
-----------
CONSUMER GOODS-1.57%
PT Modern Photo Film
Co...................... 166,500 715,360
-----------
FINANCIAL SERVICES-15.65%
PT Bank Dagang Nasional
Indonesia............... 1,363,250 1,142,143
PT Bank Danamon
Indonesia............... 1,450,000 1,308,271
PT Bank Internasional
Indonesia............... 605,200 2,990,247
PT BBL Dharmala
Finance................. 900,000 1,256,713
PT Dharmala Intiland..... 575,000 444,683
-----------
7,142,057
-----------
FOOD & KINDRED PRODUCTS-10.00%
PT IndoFood Sukses
Makmur.................. 370,830 1,672,917
PT Sari Husada........... 478,652 2,889,392
-----------
4,562,309
-----------
<CAPTION>
No. of Value
Description Shares (Note A)
- -----------------------------------------------------
<S> <C> <C>
HOUSING-3.34%
PT Jaya Real Property.... 260,500 $ 829,627
PT Surya Toto
Indonesia............... 323,520 694,995
-----------
1,524,622
-----------
MANUFACTURING-10.05%
PT Indocement Tunggal
Prakarsa................ 130,000 446,831
PT Semen Gresik.......... 655,000 1,906,606
PT Trias Sentosa......... 1,142,000 2,232,481
-----------
4,585,918
-----------
MINING-1.78%
PT Tambang Timah......... 440,000 812,889
-----------
PAPER PRODUCTS-2.07%
PT Pabrik Kertas Tjiwi
Kimia................... 504,498 514,794
PT Sumalindo Lestari
Jaya.................... 362,000 396,606
PT Surabaya Agung Pulp &
Kertas.................. 85,125 28,345
PT Surabaya Agung Pulp &
Kertas, Warrants
(expiring 3/13/01)+..... 28,375 2,438
-----------
942,183
-----------
PHARMACEUTICALS-4.72%
PT Darya Varia
Laboratoria............. 371,000 761,128
PT Kalbe Farma........... 623,940 1,393,980
-----------
2,155,108
-----------
REAL ESTATE-5.36%
PT Kawasan Industri
Jababeka................ 561,000 819,506
PT Lippo Land
Development............. 700,000 1,624,060
-----------
2,443,566
-----------
RETAILING-3.44%
PT Matahari Putra
Prima................... 859,000 1,568,529
-----------
</TABLE>
- --------------------------------------------------------------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
SCHEDULE OF INVESTMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
No. of Value
Description Shares (Note A)
- -----------------------------------------------------
<S> <C> <C>
TELECOMMUNICATIONS-9.04%
PT Indo Satellite Corp.
ADR..................... 22,000 $ 737,000
PT Pasifik Satelit
Nusantara ADR+.......... 35,000 700,000
PT Telekomunikasi
Indonesia............... 300,000 454,350
PT Telekomunikasi
Indonesia ADR........... 75,000 2,231,250
-----------
4,122,600
-----------
TOTAL INVESTMENTS-95.80%
(Cost $36,468,313) (Notes A,D)......... 43,707,570
CASH AND OTHER ASSETS IN EXCESS OF
LIABILITIES-4.20%...................... 1,914,862
-----------
NET ASSETS-100.00%...................... $45,622,432
-----------
-----------
- ---------------------------------------------------------
+ Security is non-income producing.
ADR American Depositary Receipts.
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
9
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost $36,468,313)
(Note A)............................... $ 43,707,570
Deposit with broker for initial public
offering............................... 1,000,000
Receivables:
Investments sold...................... 1,304,961
Dividends............................. 320,710
Prepaid expenses........................ 22,209
-------------
Total Assets............................ 46,355,450
-------------
LIABILITIES
Due to custodian........................ 470,318
Payables:
Advisory fee (Note B)................. 126,571
Administration fees (Note B).......... 9,569
Other accrued expenses................ 126,560
-------------
Total Liabilities....................... 733,018
-------------
NET ASSETS (applicable to 4,608,989
shares of common stock outstanding)
(Note C)............................... $ 45,622,432
-------------
-------------
NET ASSET VALUE PER SHARE ($45,622,432
DIVIDED BY 4,608,989)................. $9.90
-------------
-------------
NET ASSETS CONSIST OF
Capital stock, $0.001 par value;
4,608,989 shares issued and outstanding
(100,000,000 shares authorized)........ $ 4,609
Paid-in capital......................... 63,164,835
Accumulated net investment loss......... (30,937)
Accumulated net realized loss on
investments and foreign currency
related transactions................... (24,755,147)
Net unrealized appreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currency....................... 7,239,072
-------------
Net assets applicable to shares
outstanding............................ $ 45,622,432
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
10
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 443,255
Interest.............................. 15,337
Less: Foreign taxes withheld.......... (62,263)
-------------
Total Investment Income............... 396,329
-------------
Expenses:
Investment advisory fees (Note B)..... 233,793
Custodian fees........................ 51,641
Audit and legal fees.................. 33,535
Administration fees (Note B).......... 26,436
Accounting fees....................... 17,200
Printing.............................. 16,864
Insurance............................. 12,691
Directors' fees....................... 10,470
Transfer agent fees................... 9,484
NYSE listing fees..................... 8,063
Other................................. 7,089
-------------
Total Expenses........................ 427,266
-------------
Net Investment Loss................... (30,937)
-------------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized loss from:
Investments........................... (4,690,231)
Foreign currency related
transactions......................... (33,570)
Net change in unrealized depreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currency........ 7,317,405
-------------
Net realized and unrealized gain on
investments and foreign currency
related transactions................... 2,593,604
-------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $ 2,562,667
-------------
-------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
11
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six
Months For the Year
Ended June Ended
30, 1996 December 31,
(unaudited) 1995
<S> <C> <C>
--------------------------------
INCREASE IN NET ASSETS
Operations:
Net investment income/(loss).......... $ (30,937) $ 22,444
Net realized loss on investments and
foreign currency related
transactions......................... (4,723,801) (5,207,387)
Net change in unrealized depreciation
in value of investments and
translation of other assets and
liabilities denominated in foreign
currency............................. 7,317,405 5,947,467
------------- -------------
Net increase in net assets resulting
from operations.................... 2,562,667 762,524
------------- -------------
NET ASSETS
Beginning of period..................... 43,059,765 42,297,241
------------- -------------
End of period........................... $ 45,622,432 $ 43,059,765
------------- -------------
------------- -------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
12
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six For the Period
Months Ended For the Years Ended December 31, March 9, 1990*
June 30, 1996 ------------------------------------------------- through
(unaudited) 1995 1994 1993 1992 1991 December 31, 1990
<S> <C> <C> <C> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period............................ $9.34 $9.18 $14.03 $7.63 $7.72 $10.38 $13.78**
--------------- ------- -------- -------- ------- ------- --------
Net investment income/(loss)....... -- -- (0.03) (0.03) 0.01 0.04 0.22
Net realized and unrealized
gain/(loss) on investments and
foreign currency related
transactions...................... 0.56 0.16 (4.82) 6.43 (0.10) (2.65) (2.90)
--------------- ------- -------- -------- ------- ------- --------
Net increase/(decrease) in net
assets resulting from
operations........................ 0.56 0.16 (4.85) 6.40 (0.09) (2.61) (2.68)
--------------- ------- -------- -------- ------- ------- --------
Dividends and distributions to
shareholders:
Net investment income............ -- -- -- -- -- (0.05) (0.19)
Net realized gain on investments
and foreign currency related
transactions...................... -- -- -- -- -- -- (0.53)
--------------- ------- -------- -------- ------- ------- --------
Total dividends and distributions
to shareholders................... -- -- -- -- -- (0.05) (0.72)
--------------- ------- -------- -------- ------- ------- --------
Net asset value, end of period..... $9.90 $9.34 $9.18 $14.03 $7.63 $7.72 $10.38
--------------- ------- -------- -------- ------- ------- --------
--------------- ------- -------- -------- ------- ------- --------
Market value, end of period........ $11.125 $10.125 $12.000 $20.750 $9.000 $8.375 $9.875
--------------- ------- -------- -------- ------- ------- --------
--------------- ------- -------- -------- ------- ------- --------
Total investment return(a)......... 9.88% (15.63)% (42.17)% 130.56% 7.46% (14.71)% (24.15)%
--------------- ------- -------- -------- ------- ------- --------
--------------- ------- -------- -------- ------- ------- --------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted).......................... $45,622 $43,060 $42,297 $64,661 $35,186 $35,590 $47,817
Ratio of expenses to average net
assets............................ 1.83%(b) 1.96% 1.83% 1.98% 2.04% 2.00% 2.15%(b)
Ratio of net investment
income/(loss) to average net
assets............................ (0.13)%(b) 0.05% (0.25)% (0.30)% 0.09% 0.49% 2.05%(b)
Portfolio turnover rate............ 18.29%(c) 24.10% 31.56% 63.77% 22.39% 32.27% 17.68%(c)
Average commission rate per
share(d).......................... $0.0097 -- -- -- -- -- --
</TABLE>
- ---------------------------------------------------------------------------
* Commencement of operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $1.05 per share and offering expenses of $0.17 per share.
(a) Total investment return at market value is based on the changes in
market price of a share during the period and assumes reinvestment of
dividends and distributions, if any, at actual prices pursuant to the
Fund's dividend reinvestment plan. Total investment return does not
reflect brokerage commissions or initial underwriting discounts and
has not been annualized. In addition, such returns have been restated
to reflect the reinvestment of dividends and distributions, if any, on
the ex-dividend date.
(b) Annualized.
(c) Not annualized.
(d) Disclosure is required for fiscal years beginning on or after
September 1, 1995.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
13
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
- --------------------------------------------------------------------------------
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Indonesia Fund, Inc. (the "Fund") was incorporated in Maryland on January 8,
1990 and commenced investment operations on March 9, 1990. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
closed-end, non-diversified management investment company. Significant
accounting policies are as follows:
PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All equity securities for which market quotations are
readily available are valued at the last sales price prior to the time of
determination, or, if no sales price is available at that time, at the closing
price quoted for the securities (but if bid and asked quotations are available,
at the mean between the current bid and asked prices). Securities that are
traded over-the-counter are valued at the mean between the current bid and the
asked prices, if available. Ministry of Finance Decree 1055 (1989) states that
foreign investors are allowed to purchase up to 49% of the shares of Indonesian
companies offered to the public in the primary market. When 49% of the shares
offered to the public are owned by foreign investors and a foreign market
quotation available, the foreign quotation is used. If less than 49% of the
shares offered to the public are owned by foreign investors, there is no foreign
market quotation available, therefore the local market quotation is used. Local
shares generally trade at a discount to foreign shares when 49% of the shares
offered to the public are owned by foreign investors. All other securities and
assets are valued at the fair value as determined in good faith by the Board of
Directors. Short-term investments having a maturity of 60 days or less are
valued on the basis of amortized cost. The Board of Directors has established
general guidelines for calculating fair value of non-publicly traded securities.
At June 30, 1996, the Fund held no securities valued in good faith by the Board
of Directors. The net asset value per share of the Fund is calculated weekly, at
the end of each month and at any other times determined by the Board of
Directors.
CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in a
variable rate account are classified as cash. At June 30, 1996, the interest
rate was 4.6875% which resets on a daily basis. Amounts on deposit are generally
available on the same business day.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.
At December 31, 1995, the Fund had a capital loss carryover for U.S. federal
income tax purposes of $19,826,594 of which $2,239,330 expires in 1999;
$1,666,081 expires in 2000; $683,625 expires in 2001; $8,617,662 expires in
2002, and $6,619,896 expires in 2003.
For U.S. federal income tax purposes, realized capital losses and foreign
exchange losses incurred after October 31, 1995, within the fiscal year, are
deemed to arise on the first day of the following fiscal year. The Fund incurred
and elected to defer such losses of $204,032 and $720, respectively.
Income received by the Fund from sources within Indonesia and other countries
may be subject to withholding and other taxes imposed by such countries.
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses in investments in
equity securities which 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 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 components are treated as ordinary income for
U.S. federal income tax purposes.
Net currency gains from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/depreciation on investments, foreign currency holdings,
and other assets and liabilities denominated in foreign currency.
Net realized foreign exchange 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 Fund's books and the U.S. dollar equivalent of the
amounts actually received.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund expects to distribute at least
annually to shareholders, substantially all of its net investment income and net
realized short-term capital gains, if any. The Fund determines annually whether
to distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, including capital loss carryovers, if any. An
additional distribution may be made to the extent necessary to avoid the payment
of a 4% U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes due to U.S. generally accepted accounting
principles/tax differences in the character of income and expense recognition.
OTHER: Securities denominated in currencies other than U.S. dollars are subject
to changes in value due to fluctuations in exchange rates.
Investment in Indonesian securities requires consideration of certain factors
that are not normally involved in investments in U.S. securities. The Indonesian
securities market is an emerging market characterized by a small number of
company listings, high price volatility and a relatively illiquid secondary
trading environment. These factors, coupled with restrictions on investment by
foreigners and other factors, limit the supply of securities available for
investment by the Fund. This will affect the rate at which the Fund is able to
invest in Indonesian securities, the purchase and sale prices for such
securities and the timing of purchases and sales.
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
THE INDONESIA FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
- --------------------------------------------------------------------------------
The limited liquidity of the Indonesian securities markets may also affect the
Fund's ability to acquire or dispose of securities at a price and time that it
wishes to do so. Accordingly, in periods of rising market prices, the Fund may
be unable to participate in such price increases fully to the extent that is
unable to acquire desired portfolio positions quickly; conversely the Fund's
inability to dispose fully and promptly of positions in declining markets will
cause its net asset value to decline as the value of unsold positions is marked
to lower prices.
The number of shares available for investment by the Fund is also limited by the
fact that non-Indonesians are permitted to purchase only 49% of the listed
shares of Indonesian companies. A high proportion of the shares of many listed
Indonesian companies may be held by a limited number of persons, thus reducing
the number of listed shares available for purchase by foreigners.
NOTE B. AGREEMENTS
BEA Associates ("BEA") serves as the Fund's investment adviser with respect to
all investments. As compensation for its advisory services, BEA receives from
the Fund an annual fee, calculated weekly and paid quarterly, equal to 1.00% of
the Fund's average weekly net assets. For the six months ended June 30, 1996,
BEA earned $233,793 for advisory services. BEA also provides certain
administrative services to the Fund and is reimbursed by the Fund for costs
incurred on behalf of the Fund (up to $20,000 per annum). For the six months
ended June 30, 1996, BEA was reimbursed $3,096 for administrative services
rendered to the Fund.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's administrator.
The Fund pays BSFM a monthly fee that is computed weekly at an annual rate of
0.10% of the first $100 million of the Fund's average weekly net assets and
0.08% of amounts in excess of $100 million. For the six months ended June 30,
1996, BSFM earned $23,340 for administrative services.
NOTE C. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001, par value. Of the 4,608,989 shares outstanding at June 30, 1996, BEA
owned 7,169 shares.
NOTE D. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at June 30,
1996 was $36,468,313. Accordingly, the net unrealized appreciation of
investments (including investments denominated in foreign currency) of
$7,239,257, was composed of gross appreciation of $9,751,282 for those
investments having an excess of value over cost and gross depreciation of
$2,512,025 for those investments having an excess of cost over value.
For the six months ended June 30, 1996, purchases and sales of securities, other
than short-term obligations, were $8,335,695 and $10,315,633, respectively.
NOTE E. CREDIT AGREEMENT
The Fund, along with 17 other U.S. regulated investment companies for which BEA
serves as investment adviser, has a credit agreement with The First National
Bank of Boston. The agreement provides that each fund is permitted to borrow an
amount equal to the lesser of $50,000,000 or 25% of the net assets of the fund.
However, at no time shall the aggregate outstanding principal amount of all
loans to any of the 18 funds exceed $50,000,000. The line of credit will bear
interest at (i) the greater of the bank's prime rate or the Federal Funds
Effective Rate plus 0.50% or (ii) the Adjusted Eurodollar Rate plus 1.50%. The
Fund had no amounts outstanding under the credit agreement for the six months
ended June 30, 1996.
- --------------------------------------------------------------------------------
16
<PAGE>
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
On April 23, 1996, the annual meeting of shareholders of The Indonesia Fund,
Inc. (the "Fund") was held and the following matters were voted upon:
(1) To re-elect one director to the Board of Directors of the Fund.
<TABLE>
<CAPTION>
NAME OF DIRECTOR FOR WITHHELD NON-VOTES
- ----------------------------------------------------------------------------------- ---------- --------- ----------
<S> <C> <C> <C>
Peter Kaplan 2,969,856 96,112 1,543,021
</TABLE>
In addition to the director re-elected at the meeting, Richard H. Francis, C.
Oscar Morong, Jr., William W. Priest, Jr. and Daniel Sigg continue to serve as
directors of the Fund.
(2) To ratify the selection of Coopers & Lybrand L.L.P. as independent public
accountants for the year ending December 31, 1996.
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN NON-VOTES
---------- --------- --------- ----------
<S> <C> <C> <C> <C>
2,999,507 42,505 23,956 1,543,021
</TABLE>
- --------------------------------------------------------------------------------
17
<PAGE>
DESCRIPTION OF DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
Pursuant to The Indonesia Fund, Inc.'s (the "Fund") Dividend Reinvestment and
Cash Purchase Plan (the "Plan"), each shareholder will be deemed to have
elected, unless the Fund's transfer agent, as the Plan Agent (the "Plan Agent"),
is otherwise instructed by the shareholder in writing, to have all
distributions, net of any applicable U.S. withholding tax, automatically
reinvested in additional shares of the Fund. Shareholders who do not participate
in the Plan will receive all dividends and distributions in cash, net of any
applicable U.S. withholding tax, paid in dollars by check mailed directly to the
shareholder by the Plan Agent, as dividend-paying agent. Shareholders who do not
wish to have dividend and distributions automatically reinvested should notify
the Plan Agent for the Fund, at the address set forth below. Dividends and
distributions with respect to shares registered in the name of a broker-dealer
or other nominee (i.e., in "street name") will be reinvested under the Plan
unless such service is not provided by the broker or nominee or the shareholder
elects to receive dividends and distributions in cash. A shareholder whose
shares are held by a broker or nominee that does not provide a dividend
reinvestment program may be required to have his shares registered in his own
name to participate in the Plan. Investors who own shares of the Fund's common
stock registered in street name should contact the broker or nominee for details
concerning participation in the Plan.
Certain distributions of cash attributable to (a) some of the dividends and
interest amounts paid to the Fund and (b) certain capital gains earned by the
Fund that are derived from securities of certain foreign issuers are subject to
taxes payable by the Fund at the time amounts are remitted. Such taxes, if any,
will be borne by the Fund and allocated to all shareholders in proportion to
their interests in the Fund.
The Plan Agent serves as agent for the shareholders in administering the Plan.
If the Board of Directors of the Fund declares an income dividend or a capital
gains distribution payable either in the Fund's common stock or in cash, as
shareholders may have elected, non-participants in the Plan will receive cash
and participants in the Plan will receive common stock to be issued by the Fund.
If the market price per share on the valuation date equals or exceeds net asset
value per share on that date, the Fund will issue new share to the participants
valued at net asset value or, if the net asset value is less than 95% of the
market price on the valuation date, then valued at 95% of the market price. If
net asset value per share on the valuation date exceeds the market price per
share on that date, the Plan Agent, as agent for the participants, will buy
shares of common stock in the open market , on the New York Stock Exchange or
elsewhere, for the participants' accounts.
The valuation date is 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
the Fund should declare an income dividend or capital gains distributions
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.
Participants in the Plan have the option of making additional cash payments to
the Plan Agent, semi-annually, in any amount from $100 to $3,000, for investment
in the Fund's common stock. The Plan Agent will use all funds received from
participants to purchase Fund shares in the open market on or about February 15
and August 15 of each year. Any voluntary cash payments received more than 30
days prior to these dates will be returned by the Plan Agent and interest will
not be paid on any uninvested cash payments. 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 10 days before February 15 or
- --------------------------------------------------------------------------------
18
<PAGE>
DESCRIPTION OF DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (CONTINUED)
August 15, as the case may be. A participant may withdraw a voluntary cash
payment by written notice, if the notice is received by the Agent not less than
48 hours before the payment is to be invested. A participant's tax basis in his
shares acquired through his optional investment right will equal his cash
payments to the Plan, including any cash payments used to pay brokerage
commissions allocable to his acquired shares.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in the name of the
participant and each shareholder's proxy will include those shares purchased
pursuant to the Plan.
In the case of a shareholder, such as a bank, broker or nominee, that holds
shares for other who are the beneficial owners, the Plan Agent will administer
the Plan on the basis of the number of shares certified from time to time by the
shareholder as representing the total amount registered in the shareholder's
name and held for the account of beneficial owners who are to participate in the
Plan.
There is no charge to participants for reinvesting dividends or capital gains
distributions payable in either stock or cash. The Plan Agent's fees for the
handling of reinvestment of such dividends and capital gains distributions 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 of in cash. However, each participant will
be charged by the Plan Agent a pro rata share of brokerage commissions incurred
with respect to the Plan Agent's open market purchases in connection with
voluntary cash payments made by the participant or the reinvestment of dividends
or capital gains distributions payable only in cash. 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 obtainable. Brokerage commissions will
vary based on, among other things, the broker selected to effect a particular
purchase and the number of participants on whose behalf such purchase is being
made. The Fund cannot predict, therefore, whether the cost to a participant who
makes a voluntary cash payment will be less than if a participant were to make
an open market purchase of the Fund's common stock on his own behalf.
The receipt of dividends and distributions in stock under the Plan will not
relieve participants of any income tax (including withholding tax) that may be
payable on such dividends or distributions.
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 the members of the Plan at least
30 days before the semi-annual contribution date, in the case of voluntary cash
payments, or the record date for dividends or distributions. 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 members of the Plan. All
correspondence concerning the Plan should be directed to The First National Bank
of Boston, Investor Relations Department, P.O. Box 644, Mail Stop 45-02-09,
Boston, Massachusetts 02102-0644 or by telephone at 1-800-730-6001.
- --------------------------------------------------------------------------------
19
<PAGE>
SUMMARY OF GENERAL INFORMATION
The Fund--The Indonesia Fund, Inc.--is a closed-end, non-diversified management
investment company whose shares trade on the New York Stock Exchange. Its
principal investment objective is long-term capital appreciation with income
as a secondary objective through investments primarily in Indonesian equity
and debt securities. The Fund is managed and advised by BEA Associates
("BEA"). BEA is a diversified asset manager, handling equity, balanced, fixed
income, international and derivative based accounts. Portfolios include
international and emerging market investments, common stocks, taxable and
non-taxable bonds, options, futures and venture capital. BEA manages money
for corporate pension and profit-sharing funds, public pension funds, union
funds, endowments and other charitable institutions and private individuals.
As of June 30, 1996, BEA managed approximately $28.7 billion in assets. BEA
also advises eight other international closed-end funds: The Brazilian Equity
Fund, Inc., The Chile Fund, Inc., The First Israel Fund, Inc., The Emerging
Markets Infrastructure Fund, Inc., The Emerging Markets Telecommunications
Fund, Inc., The Latin America Equity Fund, Inc., The Latin America Investment
Fund, Inc. and The Portugal Fund, Inc.
SHAREHOLDER INFORMATION
The market price is published in: THE NEW YORK TIMES (daily) under the
designation "Indones" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "IndonesiaFd". The Fund's New York Stock
Exchange trading symbol is IF. Weekly comparative net asset value (NAV) and
market price information about The Indonesia Fund, Inc.'s shares are
published each Sunday in THE NEW YORK TIMES and each Monday in THE WALL
STREET JOURNAL and BARRON'S, as well as other newspapers, in a table called
"Closed End Funds."
To request an annual report, or to be placed on the Fund's mailing list,
shareholders should call 1-800-293-1232.
DIVIDEND REINVESTMENT AND CASH PURHCASE PLAN--SUMMARY
An automatic Dividend Reinvestment and Cash Purchase Plan (the "Plan") is
available to provide shareholders with automatic reinvestment of their
dividend income and capital gain distributions in additional shares of the
Fund's common stock.
As per the Plan, each shareholder will be automatically reinvested in
additional shares of the Fund by The First National Bank of Boston, unless
otherwise instructed by the shareholder in writing. Shareholders who do not
participate in the Plan will receive all dividends and distributions in cash
paid by check in U.S. dollars. Shares registered in street name will be
reinvested under the Plan, unless the broker-dealer or other nominee does not
provide a dividend reinvestment plan or the shareholder elects to receive
their dividends in cash.
<PAGE>
DIRECTORS AND CORPORATE OFFICERS
Emilio Bassini President and Secretary
Stephen M. Swift Chief Investment Officer
Richard H. Francis Director
Peter Kaplan Director
C. Oscar Morong, Jr. Director
William W. Priest, Jr. Director
Daniel Sigg Director and Senior Vice President
Paul P. Stamler Senior Vice President
Michael A. Pignataro Chief Financial Officer and
Assistant Secretary
Rachel D. Manney Vice President and Treasurer
INVESTMENT ADVISER
BEA Associates
One Citicorp Center
153 East 53rd Street
New York, NY 10022
ADMINISTRATOR
Bear Stearns Funds Management Inc.
245 Park Avenue
New York, NY 10167
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
SHAREHOLDER SERVICING AGENT
The First National Bank of Boston
P.O. Box 1865
Mail Stop 45-02-62
Boston, MA 02105-1865
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, PA 19103
LEGAL COUNSEL
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022
This report, including the financial statements herein, is sent to IF
the shareholders of the Fund for their information. The financial Listed
information included herein is taken from the records of the Fund NYSE
without examination by independent accountants who do not express THE
an opinion thereon. It is not a prospectus, circular or NEW YORK
representation intended for use in the purchase or sale of shares STOCK
of the Fund or of any securities mentioned in this report. EXCHANGE
