<PAGE>
---------------------------------------------------------------
MORGAN STANLEY
DEAN WITTER
INDIA INVESTMENT
FUND, INC.
---------------------------------------------------------------
SEMI-ANNUAL REPORT
JUNE 30, 1999
MORGAN STANLEY DEAN WITTER
INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
MORGAN STANLEY DEAN WITTER
INDIA INVESTMENT FUND, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD
OF DIRECTORS
Michael F. Klein
PRESIDENT AND DIRECTOR
John S.Y. Chu
DIRECTOR
Gerard E. Jones
DIRECTOR
Gerard Lahausse de la Louviere
DIRECTOR
John A. Levin
DIRECTOR
Fergus Reid
DIRECTOR
Samuel T. Reeves
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT
Harold J. Schaaff, Jr.
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Mary E. Mullin
SECRETARY
Belinda A. Brady
ASSISTANT TREASURER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
- --------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
- --------------------------------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
For additional Fund information, including the Fund's net asset value per share
and information regarding the investments comprising the Fund's portfolio,
please call 1-800-221-6726 or visit our website at
www.msdw.com/institutional/investmentmanagement.
<PAGE>
LETTER TO SHAREHOLDERS
- ---------
For the six months ended June 30, 1999, the Morgan Stanley Dean Witter India
Investment Fund, Inc. (the "Fund") had a total return, based on net asset value
per share, of 39.72% compared to 28.99% for the U.S. dollar adjusted Bombay
Stock Exchange (BSE) National Index (the "Index"). For the period since the
Fund's inception on February 25, 1994 through June 30, 1999, the Fund's total
return, based on net asset value per share, was -7.56% compared to -36.01% for
the Index. On June 30, 1999, the closing price of the Fund's shares on the New
York Stock Exchange was $9 11/16 representing a 24.5% discount to the Fund's net
asset value per share.
The Indian stock market's been off to the races lately, registering impressive
gains in an investing environment that many observers would otherwise
characterize as rather unfriendly. The market has shown tremendous resilience in
a period where the headline-grabbing events were the fall of a government at the
centre and heightened tensions on the border with Pakistan. Through it all, the
market has powered ahead, on the back of a surge in foreign capital flows and
economic and corporate data flow suggestive of a turnaround in the economy.
In fact, the fourth quarter of last year may have marked a very important
turning point. The fourth quarter of 1998 was a particularly difficult time for
the political economy. Economic activity decelerated sharply and the political
situation was seen as being far from certain. However, as it seems with the help
of hindsight, the fourth quarter may have marked an important inflection point
for the political economy and set the base for better things to come. Sentiment
has since been changing for the better, with the turn of the year bringing in
some cheer. Economic data through the year has been coming in better than
expected leading to a feeling among business houses that the worst is behind us.
In what has become typical over the past few years, the Indian stock market
managed to again stage a strong rally in the first quarter of the year. Right
through the bear market, now in its fifth year, the stock market has on average
registered its strongest performance in the first quarter of the year.
There was no apparent trigger for the sharp upward movement in the first quarter
but the rise in general was attributed to a) a significant fall in the rate of
inflation, a major issue with the electorate, which in turn facilitated the
central bank to be more accommodative on the monetary side b) a feeling that the
economic cycle could well be turning around and c) probably most importantly, a
renewed attempt on the part of the policymakers to push ahead with key economic
reforms. Also, sentiment had gotten very bearish late last year and in such
circumstances it takes only marginal net buying to liven price action.
The fluid political situation did have a negative effect on the market in April
but the strength of the underlying economy overwhelmed any such negative factor.
India has also benefited considerably from the general revival of interest in
emerging markets as an asset class this year. In fact, emerging markets were the
best performing asset class in the first half of the calendar year, rising by
around 40% in dollar terms, compared to an average 6% increase in global
equities. One of the other main features of the global investing profile has
been a strong sectorial shift in favor of long-shunned cyclical stocks and the
reduced emphasis on the so-called growth stocks. Economic growth sensitive
commodity stocks have rallied significantly across the world in the wake of both
a turnaround in underlying commodity prices and expectations of a
disproportionate improvement in profitability.
These trends have been reflected in the Indian equity market with sharp price
movements in the well-known cyclical plays. The Indian market has been fairly
quick to capture global trends and our portfolio has a cyclical flavor to it. A
key reason that our Fund has consistently outperformed the benchmarks over long
time periods is that it has never relied too heavily on a particular sector to
generate the outperformance, making it less vulnerable to paradigm shifts in the
investing universe. Accordingly, the Fund is well positioned to absorb a
widening of market breadth, as is currently the trend.
2
<PAGE>
Looking ahead, while we do understand that considerable risks remain out there,
which could affect the equity universe, we remain constructive on the outlook
for the market based on the emerging economic trends. The economy does seem to
be gathering momentum, with the marked increase in industrial production
numbers, most relevant for corporate India, providing the maximum reason for
encouragement. The winds of global disinflation are also exerting a positive
influence, which could allow the monetary environment to remain conducive. We
hope these trends continue and play a dominant role in setting price action.
Sincerely,
/s/ Michael F. Klein
Michael F. Klein
PRESIDENT AND DIRECTOR
July 1999
THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR
INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO
PURCHASE OR SELL THE SECURITIES MENTIONED.
- --------------------------------------------------------------------------------
DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION FOR
THE FUND, ARE AVAILABLE ON OUR WEBSITE AT
www.msdw.com/institutional/investmentmanagement.
3
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Investment Summary as of June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL TOTAL RETURN (%)
INFORMATION --------------------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
------------------------- ------------------------- ----------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
---------- ------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
FISCAL YEAR TO DATE 43.52% -- 39.72% -- 28.99% --
ONE YEAR 50.49% 50.49% 52.13% 52.13% 22.59% 22.59%
FIVE YEAR -27.82% -6.31% -11.75% -2.47% -33.22% -7.76%
SINCE INCEPTION* -30.25% -6.52% -7.56% -1.46% -36.01% -8.02%
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[GRAPH]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS
ENDED
JUNE 30,
1994* 1995 1996 1997 1998 1999
------ ------ ------ ------ ------ ------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Per Share .... $13.99 $8.91 $8.81 $8.83 $9.19 $12.84
Market Value Per Share ....... $11.25 $9.13 $9.50 $8.38 $6.75 $9.69
Premium/(Discount) ........... - 19.6% 2.5% 7.8% -5.1% -26.6% -24.5%
Capital Gains Distributions .. $0.17 -- -- -- -- --
Fund Total Return (2) ........ 0.72% -36.31% -1.12% 0.23% 4.08% 39.72%
Index Total Return (3) ....... -7.88 -31.53 -6.49 6.43 -20.98 28.99
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) Total investment return based on net asset value per share reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
(3) The Bombay Stock Exchange (BSE) National Index is a market capitalization
weighted index including the equity shares of 100 companies from the
"Specified" and the "Non-specified" list of the 5 major stock exchanges,
namely, Bombay, Calcutta, Delhi, Ahmedabad and Madras.
* The Fund commenced operations on February 25, 1994.
4
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Portfolio Summary as of June 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DIVERSIFICATION OF TOTAL INVESTMENTS
[PIE CHART]
<TABLE>
<S> <C>
Equity Securities (97.9%)
Short-Term Investments (2.1%)
</TABLE>
- --------------------------------------------------------------------------------
SECTORS
[PIE CHART]
<TABLE>
<S> <C>
Automobiles (22.8%)
Banking (4.3%)
Beverages & Tobacco (8.0%)
Broadcasting & Publishing (6.9%)
Chemicals (6.3%)
Electronic Components -- Misc. (12.2%)
Energy Equipment & Services (9.0%)
Financial Services (3.0%)
Health & Personal Care (12.5%)
Transportation -- Road & Rail (2.2%)
Other (12.8%)
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
<S> <C>
1. Infosys Technology Ltd. 10.5%
2. Bharat Heavy Electricals Ltd. 8.7
3. Hero Honda Ltd. 8.5
4. Zee Telefilms Ltd. 6.4
5. Tata Engineering & Locomotive Ltd. 5.1
6. ITC Ltd. 4.4
7. Punjab Tractors Ltd. 4.0
8. State Bank of India Ltd. 3.7
9. Tata Tea Ltd. 3.5
10. Agrevo India Ltd. 3.2
----
58.0%
----
----
</TABLE>
5
<PAGE>
FINANCIAL STATEMENTS
- --------
STATEMENT OF NET ASSETS (UNAUDITED)
- --------
JUNE 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
(000)
- ------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (98.2%)
(Unless otherwise noted)
- ------------------------------------------------------------------------------
APPLIANCES & HOUSEHOLD DURABLES (1.5%)
Phillips India Ltd. 799,550 U.S.$ 2,763
Supreme Industries Ltd. 832,900 3,438
-------------
6,201
- ------------------------------------------------------------------------------
AUTOMOBILES (22.8%)
(a)Apollo Tyres Ltd. 2,325 3
Castrol (India) Ltd. 2,300 22
Elgi Tyres & Tread Ltd. 410,100 2,882
Hero Honda Ltd. 1,430,176 35,585
Motherson Sumi Systems Ltd. 2,350 4
Motor Industries Co., Ltd. 39,942 3,671
MRF Ltd. 109,280 4,817
(a,b)Patheja Bros Forgings & Stamp Ltd. 450,000 -- @
Punjab Tractors Ltd. 550,670 16,810
(a,b)Rane Brakes & Lining Ltd. 7,200 17
Rane Madras Ltd. 213,100 344
S.K.F. Bearings Ltd. 55,256 1,614
Sundaram Fasteners Ltd. 394,550 4,181
Tata Engineering & Locomotive Ltd. 4,488,773 21,231
TVS Suzuki Ltd. 390,322 4,472
-------------
95,653
-------------
- ------------------------------------------------------------------------------
BANKING (4.3%)
HDFC Bank Ltd. 1,558,700 2,683
(a)State Bank of India Ltd. 2,838,507 15,489
-----------
18,172
-----------
- ------------------------------------------------------------------------------
BEVERAGES & TOBACCO (8.0%)
ITC Ltd. 740,057 18,678
(a)Tata Tea Ltd. 1,690,000 14,796
-------------
33,474
-------------
- ------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (6.9%)
(a,b)New Delhi Television Ltd. 333,300 1,036
Tata Donnelley Ltd. 293,250 1,369
(a)Zee Telefilms Ltd. 797,700 26,740
-------------
29,145
-------------
- ------------------------------------------------------------------------------
BUILDING MATERIALS & COMPONENTS (0.6%)
Associated Cement Co., Ltd. 9 -- @
Carrier Aircon Ltd. 96,400 489
(a)ITW Signode India Ltd. 1,077,500 1,953
-------------
2,442
-------------
- ------------------------------------------------------------------------------
CHEMICALS (6.3%)
Agrevo India Ltd. 737,260 13,588
Colour-Chem Ltd. 64,602 3,760
ICI India Ltd. 402,078 1,849
Monsanto Chemicals of India 99,800 U.S.$ 2,886
Ranbaxy Laboratories Ltd. 273,000 4,113
Reliance Industries Ltd. 700 3
Sudarshan Chemicals Ltd. 234,552 248
-------------
26,447
-------------
- ------------------------------------------------------------------------------
DATA PROCESSING & REPRODUCTION (0.4%)
NIIT Ltd. 150 7
Tata Infotech Ltd. 77,050 1,889
-------------
1,896
-------------
- ------------------------------------------------------------------------------
ELECTRONIC COMPONENTS -- MISC (12.2%)
(a)Fujitsu ICIM Ltd. 584,865 3,719
Infosys Technology Ltd. 525,890 43,936
Modi Xerox Ltd. 1,077,400 3,720
-------------
51,375
-------------
- ------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (9.0%)
Bharat Heavy Electricals Ltd. 6,414,311 36,354
Jyoti Structures Ltd. 167,750 199
Shriram Honda Power Equipment Ltd. 318,330 1,320
-------------
37,873
-------------
- ------------------------------------------------------------------------------
ENERGY SOURCES (0.0%)
(a,b)Renewable Energy Ltd. 47,800 1
-------------
- ------------------------------------------------------------------------------
FINANCIAL SERVICES (3.0%)
Housing Development Finance Corp., Ltd. 236,127 12,088
Sundaram Finance Ltd. 119,800 353
UTI Mastergain 46,500 12
UTI-MasterShares Ltd. 5,500 2
-------------
12,455
-------------
- ------------------------------------------------------------------------------
FOOD & HOUSEHOLD PRODUCTS (0.2%)
Smithkline Beecham Consumer Health Care Ltd. 49,420 666
-------------
- ------------------------------------------------------------------------------
HEALTH & PERSONAL CARE (12.5%)
(a)Bausch & Lomb India Ltd. 654,410 1,916
Cipla Ltd. 222,445 7,336
Dabur India Ltd. 219,652 2,976
Dr. Reddy's Laboratories Ltd. 236,451 4,538
E. Merck (India) Ltd. 351,125 4,848
Glaxo India Ltd. 125,000 2,097
Hoechst Marion Roussel India Ltd. 475,450 6,025
Marico Industries Ltd. 283,200 4,208
Novartis India Ltd. 541,600 11,118
Pfizer Ltd. 100 2
Smithkline Beecham Pharmaceuticals (India) Ltd. 342,390 3,118
- ------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<CAPTION>
SHARES VALUE
(000)
- ------------------------------------------------------------------------------
<S> <C> <C>
HEALTH & PERSONAL CARE (CONTINUED)
Sun Pharmaceutical
Industries Ltd. 400,700 U.S.$ 4,219
-------------
52,401
-------------
- ------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS (0.2%)
Chicago Pneumatic India Ltd. 324,940 531
(a,b)Rane Madras Ltd. 195,700 402
-------------
933
-------------
- ------------------------------------------------------------------------------
LEISURE & TOURISM (0.9%)
EIH Ltd. 260,400 1,260
Indian Hotels Co., Ltd. 323,522 2,594
-------------
3,854
-------------
- ------------------------------------------------------------------------------
MACHINERY & ENGINEERING (2.0%)
Cummins India Ltd. 398,440 3,845
Esab India Ltd. 564,850 1,195
Lakshmi Machine Works Ltd. 19,268 577
(a)Lakshmi Synthetic Machinery Ltd. 137,700 33
Revathi-CP Equipment Ltd. 298,600 2,745
-------------
8,395
-------------
- ------------------------------------------------------------------------------
METALS -- STEEL (0.6%)
Tata Iron & Steel Co., Ltd. 750,000 2,419
-------------
- ------------------------------------------------------------------------------
MISCELLANEOUS MATERIALS & COMMODITIES (1.1%)
Essel Packaging Ltd. 368,075 2,366
Titan Industries Ltd. 1,032,375 2,085
-------------
4,451
-------------
- ------------------------------------------------------------------------------
MULTI-INDUSTRY (1.6%)
(a,b)Delta International 570,000
Larsen & Toubro Ltd. 924,000 6,099
(b)Rajapalayam Mills 17,100 543
-------------
6,642
-------------
- ------------------------------------------------------------------------------
TELECOMMUNICATIONS (0.4%)
Mahanagar Telephone Nigam Ltd. 423,386 1,814
-------------
TEXTILES & APPAREL (1.5%)
Bata India Ltd. 1,018,561 5,044
Coates of India Ltd. 178,150 324
(a)J.K. Synthetics Ltd. 622 -- @
Madura Coats Ltd. 379,550 417
Mahavir Spinning Mills Ltd. 10,000 10
Vardhaman Spinning & General Mills Ltd. 332,450 433
-------------
6,228
-------------
- ------------------------------------------------------------------------------
TRANSPORTATION -- ROAD & RAIL (2.2%)
Container Corp. of India Ltd. 2,216,500 U.S.$ 9,294
- ------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost U.S.$312,285) 412,231
- ------------------------------------------------------------------------------
<CAPTION>
NO. OF
RIGHTS
- ------------------------------------------------------------------------------
<S> <C> <C>
RIGHTS (0.0%)
- ------------------------------------------------------------------------------
BUILDING MATERIALS & COMPONENTS (0.0%)
(a,b)Associated Cement Co., Ltd.
expiring 8/4/99
(Cost U.S.$--) 10 -- @
-------------
- ------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
(000)
- ------------------------------------------------------------------------------
<S> <C> <C>
FIXED INCOME SECURITIES (0.0%)
- ------------------------------------------------------------------------------
BUILDING MATERIALS & COMPONENTS (0.0%)
(b)Garware Plastics & Polyester Ltd.
16.00%, 5/1/05
(Cost U.S.$397) U.S.$ 277 197
-------------
- ------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS (0.5%)
- ------------------------------------------------------------------------------
REPURCHASE AGREEMENT (0.5%)
Chase Securities, Inc., 4.55%,
dated 6/30/99, due 7/1/99,
to be repurchased at
U.S.$2,185, collateralized by
U.S.$2,030, United States
Treasury Bonds, 7.25%, due
5/15/16, valued at
U.S.$2,256
(Cost U.S.$2,185) 2,185 2,185
-------------
- ------------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT WITH
CUSTODIAN (1.6%)
Indian Rupee
(Cost U.S.$6,449) INR 278,327 6,413
-------------
- ------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.3%)
(Cost U.S.$321,316) 421,026
-------------
- ------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<CAPTION>
AMOUNT AMOUNT
(000) (000)
- ------------------------------------------------------------------------------
<S> <C> <C>
OTHER ASSETS (1.6%)
Receivable for Investments Sold U.S.$ 4,858
Dividends Receivable 1,497
Foreign Withholding Tax Reclaim Receivable 481
Interest Receivable 7
Other Assets 50 U.S.$ 6,893
------------ -------------
- ------------------------------------------------------------------------------
LIABILITIES (-1.9%)
Payable For:
Investments Purchased (5,819)
Custodian Fees (809)
Deferred Country Taxes (481)
Investment Advisory Fees (370)
Fund Shares Redeemed (200)
Professional Fees (71)
Shareholder Reporting Expenses (58)
Directors' Fees and Expenses (57)
Administrative Fees (40)
Bank Overdraft (2)
Other Liabilities (62) (7,969)
------------ -------------
- ------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 32,693,792, issued and
outstanding U.S.$0.01 par value shares
(100,000,000 shares authorized) U.S.$ 419,950
-------------
-------------
- ------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 12.84
-------------
-------------
- ------------------------------------------------------------------------------
AT JUNE 30, 1999, NET ASSETS CONSISTED OF:
- ------------------------------------------------------------------------------
Common Stock U.S.$ 327
Capital Surplus 464,830
Accumulated Net Investment Loss (1,637)
Accumulated Net Realized Loss (143,122)
Unrealized Appreciation on Investments and
Foreign Currency Translations 99,552
- ------------------------------------------------------------------------------
TOTAL NET ASSETS U.S.$ 419,950
-------------
-------------
- ------------------------------------------------------------------------------
</TABLE>
(a) -- Non-income producing
(b) -- Security valued at fair value - see note A-1 to financial
statements.
@ -- Value is less than U.S.$500.
June 30, 1999 exchange rate -- Indian Rupee (INR) 43.405 = U.S. $1.00.
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1999
(UNAUDITED)
STATEMENT OF OPERATIONS (000)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends ...................................................................... U.S.$ 1,648
Interest ...................................................................... 126
Less: Foreign Taxes Withheld ................................................... (7)
- --------------------------------------------------------------------------------------------------------
Total Income ................................................................. 1,767
- --------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees ....................................................... 2,140
Custodian Fees ................................................................. 803
Administrative Fees ............................................................ 213
Professional Fees .............................................................. 81
Directors' Fees and Expenses ................................................... 46
Shareholder Reporting Expenses ................................................. 33
Sub-Administrative Fees ........................................................ 15
Transfer Agent Fees ............................................................ 9
Other Expenses ................................................................. 36
- --------------------------------------------------------------------------------------------------------
Total Expenses ............................................................... 3,376
- --------------------------------------------------------------------------------------------------------
Net Investment Income ....................................................... (1,609)
- --------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS)
Investment Securities Sold ..................................................... 34,816
Foreign Currency Transactions .................................................. (167)
- --------------------------------------------------------------------------------------------------------
Net Realized Loss ............................................................ 34,649
- --------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
Appreciation on Investments .................................................... 85,172
Depreciation on Foreign Currency Translations .................................. (27)
- --------------------------------------------------------------------------------------------------------
Change in Unrealized Appreciation/Depreciation ............................... 85,145
- --------------------------------------------------------------------------------------------------------
Net Realized Gain and Change in Unrealized
Appreciation/Depreciation ........................................................ 119,794
- --------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................... U.S.$118,185
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1999 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1998
STATEMENT OF CHANGES IN NET ASSETS (000) (000)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Loss ............................................... U.S.$ (1,609) U.S.$ (1,381)
Net Realized Gain (Loss) .......................................... 34,649 (72,863)
Change in Unrealized Appreciation/Depreciation .................... 85,145 83,192
- --------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations .............. 118,185 8,948
- --------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Repurchase of Shares (1,543,000 an 1,470,300 shares,
respectively) .................................................... (12,936) (9,693)
- --------------------------------------------------------------------------------------------------------
Total Increase (Decrease) ......................................... 105,249 (745)
Net Assets:
Beginning of Period ............................................... 314,701 315,446
- --------------------------------------------------------------------------------------------------------
End of Period (including accumulated net investment
loss of U.S. $(1,637) and U.S.$(28), respectively)................ U.S.$419,950 U.S.$314,701
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
SELECTED PER SHARE DATA 1999 ------------------------------------------
AND RATIOS: (UNAUDITED) 1998 1997
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ....... U.S.$ 9.19 U.S.$ 8.83 U.S.$ 8.81
- ---------------------------------------------------------------------------------------------------------
Offering Costs ............................. -- -- --
- ---------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) ............... (0.05) (0.04) (0.07)
Net Realized and Unrealized Gain
(Loss) on Investments ..................... 3.56 0.31 0.09
- ---------------------------------------------------------------------------------------------------------
Total from Investment Operations ........ 3.51 0.27 0.02
- ---------------------------------------------------------------------------------------------------------
Distributions:
Net Realized Gain ........................ -- -- --
In Excess of Net Realized Gain ........... -- -- --
- ---------------------------------------------------------------------------------------------------------
Total Distributions ..................... -- -- --
- ---------------------------------------------------------------------------------------------------------
Anti-Dilutive Effect of Shares
Repurchased ............................... 0.14 0.09 --
- ---------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD ............. U.S.$ 12.84 U.S.$ 9.19 U.S.$ 8.83
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
PER SHARE MARKET VALUE, END OF PERIOD ...... U.S.$ 9.69 U.S.$ 6.75 U.S.$ 8.38
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN:
Market Value .............................. 43.52% (19.40)% (11.84)%
Net Asset Value (1) ....................... 39.72% 4.08% 0.23%
- ---------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------
RATIOS, SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (THOUSANDS) ...... U.S.$419,950 U.S.$314,701 U.S.$315,446
- ---------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets .... 1.78%** 1.97% 2.06%
Ratio of Net Investment Income
to Average Net Assets .................... (0.84)%** (0.44)% (0.70)%
Portfolio Turnover Rate .................... 20% 24% 25%
- ---------------------------------------------------------------------------------------------------------
<CAPTION>
PERIOD FROM
FEBRUARY 25,
1994* TO
SELECTED PER SHARE DATA ---------------------------------------- DECEMBER 31,
AND RATIOS: 1996 1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ...... U.S.$ 8.91 U.S.$ 13.99 U.S.$14.10
- -----------------------------------------------------------------------------------------------------
Offering Costs ............................ -- -- (0.03)
- -----------------------------------------------------------------------------------------------------
Net Investment Income (Loss) .............. (0.08) (0.16) 0.04
Net Realized and Unrealized Gain
(Loss) on Investments .................... (0.02) (4.92) 0.05
- -----------------------------------------------------------------------------------------------------
Total from Investment Operations ....... (0.10) (5.08) 0.09
- -----------------------------------------------------------------------------------------------------
Distributions:
Net Realized Gain ....................... -- -- (0.09)
In Excess of Net Realized Gain .......... -- -- (0.08)
- -----------------------------------------------------------------------------------------------------
Total Distributions .................... -- -- (0.17)
- -----------------------------------------------------------------------------------------------------
Anti-Dilutive Effect of Shares
Repurchased .............................. -- -- --
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD ............ U.S.$ 8.81 U.S.$ 8.91 U.S.$ 13.99
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
PER SHARE MARKET VALUE, END OF PERIOD ..... U.S.$ 9.50 U.S.$ 9.13 U.S.$ 11.25
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN:
Market Value ............................. 4.11% (18.89)% (19.01)%
Net Asset Value (1) ...................... (1.12)% (36.31)% 0.72%
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
RATIOS, SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (THOUSANDS) ..... U.S.$314,423 U.S.$318,045 U.S.$499,481
- -----------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets ... 2.10% 3.16% 1.61%
Ratio of Net Investment Income
to Average Net Assets ................... (0.85)% (1.48)% 0.33%
Portfolio Turnover Rate ................... 28% 28% 19%
- -----------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of operations.
** Annualized.
(1) Total investment return based on net asset value per share reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. This percentage is not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1999
- -----------
The Morgan Stanley Dean Witter India Investment Fund, Inc. (formerly Morgan
Stanley India Investment Fund, Inc.) (the "Fund") was incorporated in Maryland
on December 22, 1993, and is registered as a non-diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended. The Fund's investment objective is long-term capital appreciation
through investments primarily in equity securities.
A. The following significant accounting policies are in conformity with
generally accepted accounting principles for investment companies. Such policies
are consistently followed by the Fund in the preparation of its financial
statements. Generally accepted accounting principles may require management to
make estimates and assumptions that affect the reported amounts and disclosures
in the financial statements. Actual results may differ from those estimates.
1. SECURITY VALUATION: In valuing the Fund's assets, all listed securities
for which market quotations are readily available are valued at the last
sales price on the valuation date, or if there was no sale on such date, at
the mean between the current bid and asked prices. Securities which are
traded over-the-counter are valued at the average of the mean of current
bid and asked prices obtained from brokers. Short-term securities which
mature in 60 days or less are valued at amortized cost. All other
securities and assets for which market values are not readily available
(including investments which are subject to limitations as to their sale)
are valued at fair value as determined in good faith by the Board of
Directors (the "Board"), although the actual calculations may be done by
others. Due to the Indian securities market's smaller size, degree of
liquidity and volatility, the prices which the Fund may realize upon sale
of securities may not be equal to the value presented in the financial
statements.
2. TAXES: It is the Fund's intention to continue to qualify as a regulated
investment company and distribute all of its taxable income. Accordingly,
no provision for U.S. Federal income taxes is required in the financial
statements.
The Fund invests in India through a registered branch office established in
Mauritius and expects to obtain benefits under the double taxation treaty
between Mauritius and India. To obtain benefits under the double taxation
treaty the Fund must meet certain tests and conditions, including the
establishment of Mauritius tax residence and related requirements. The Fund
has obtained a tax residence certification from the Mauritian authorities
and believes such certification is determinative of its resident status for
treaty purposes. 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 but was
subject to a 15% withholding tax on dividends up to May 31, 1997.
Subsequent to that date, the Indian Government has withdrawn the
withholding tax on dividends. The Fund is subject to and accrues Indian
withholding tax on interest earned on Indian securities at the rate of 20%.
A portion of Foreign Withholding Tax Reclaim Receivable at June 30, 1999
relates to taxes that will be refunded to the Fund upon the filing of the
Fund's Indian tax return for the fiscal year ended March 31, 2000.
In Mauritius, the Fund is liable for income tax under the current Mauritian
legislation at the rate of 0%. However, the Fund may, in any year, elect to
pay tax on its net investment income at any rate between 0% and 35%. As of
the date of these financial statements, no provision for Mauritius taxes is
considered necessary as a result of net investment losses incurred by the
Fund.
The foregoing is based on current interpretation and practice and is
subject to any future changes in Indian or Mauritian tax laws and in the
tax treaty between India and Mauritius.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, a bank as custodian for the Fund takes possession of the
underlying securities, with a market value at least equal to the amount of
the repurchase transaction, including principal and accrued interest. To
the extent that any repurchase transaction exceeds one business day, the
value of the collateral is marked-to-market on a daily basis to determine
the adequacy of the collateral. In the event of default on the obligation
to repurchase, the Fund has the right to liquidate the collateral and apply
the proceeds in satisfaction of the obligation. In the event of default or
bankruptcy by the counter-party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal
proceedings.
4. FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are
maintained in U.S. dollars. Amounts denominated in Indian rupees are
translated into U.S. dollars at the mean of the bid and asked prices of
such currency against U.S. dollars last quoted by a major bank as follows:
- investments, other assets and liabilities at the prevailing rate of
exchange on the valuation date;
- investment transactions and investment income at the prevailing rate
of exchange on the dates of such transactions.
11
<PAGE>
Although the net assets of the Fund are presented at the foreign exchange
rate and market values at the close of the period, the Fund does not
isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rate from the fluctuations arising from
changes in the market prices of the securities held at period end.
Similarly, the Fund does not isolate the effect of changes in the foreign
exchange rate from the fluctuations arising from changes in the market
prices of securities sold during the period. Accordingly, realized and
unrealized foreign currency gains (losses) are included in the reported net
realized and unrealized gains (losses) on investment transactions and
balances.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from sales and maturities of foreign
currency exchange contracts, disposition of foreign currency, currency
gains or losses realized between the trade and settlement dates on
securities transactions, and the difference between the amount of
investment income and foreign withholding taxes recorded on the Fund's
books and the U.S. dollar equivalent amounts actually received or paid. Net
unrealized currency gains (losses) from valuing foreign currency
denominated assets and liabilities at period end exchange rates are
reflected as a component of unrealized appreciation (depreciation) on
investments and foreign currency translations in the Statement of Net
Assets. The change in unrealized currency gains (losses) for the period is
reflected in the Statement of Operations.
The Fund may use derivatives to achieve its investment objectives. The Fund may
engage in transactions in futures contracts on foreign currencies, stock
indices, as well as in options, swaps and structured notes. Consistent with the
Fund's investment objectives and policies, the Fund may use derivatives for
non-hedging as well as hedging purposes.
Following is a description of derivative instruments that the Fund may utilize
and their associated risks:
5. FOREIGN CURRENCY EXCHANGE CONTRACTS: The Fund may enter into foreign
currency exchange contracts generally to attempt to protect securities and
related receivables and payables against changes in future foreign exchange
rates and, in certain situations, to gain exposure to a foreign currency. A
foreign currency exchange contract is an agreement between two parties to
buy or sell currency at a set price on a future date. The market value of
the contract will fluctuate with changes in currency exchange rates. The
contract is marked-to-market daily and the change in market value is
recorded by the Fund as unrealized gain or loss. The Fund records realized
gains or losses when the contract is closed equal to the difference between
the value of the contract at the time it was opened and the value at the
time it was closed. Risk may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their
contracts and is generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
6. FORWARD COMMITMENTS AND WHEN-ISSUED/DELAYED DELIVERY SECURITIES: The Fund
may make forward commitments to purchase or sell securities. Payment and
delivery for securities which have been purchased or sold on a forward
commitment basis can take place a month or more (not to exceed 120 days)
after the date of the transaction. Additionally, the Fund may purchase
securities on a when-issued or delayed delivery basis. Securities
purchased on a when-issued or delayed delivery basis are purchased for
delivery beyond the normal settlement date at a stated price and yield,
and no income accrues to the Fund on such securities prior to delivery.
When the Fund enters into a purchase transaction on a when-issued or
delayed delivery basis, it either establishes a segregated account in
which it maintains liquid assets in an amount at least equal in value to
the Fund's commitments to purchase such securities or denotes such
securities on the custody statement for its regular custody account.
Purchasing securities on a forward commitment or when-issued or
delayed-delivery basis may involve a risk that the market price at the
time of delivery may be lower than the agreed upon purchase price, in
which case there could be an unrealized loss at the time of delivery.
7. SWAP AGREEMENTS: The Fund may enter into swap agreements to exchange the
return generated by one security, instrument or basket of instruments for
the return generated by another security, instrument or basket of
instruments. The following summarizes swaps which may be entered into by
the Fund:
INTEREST RATE SWAPS: Interest rate swaps involve the exchange of
commitments to pay and receive interest based on a notional principal
amount. Net periodic interest payments to be received or paid are accrued
daily and are recorded in the Statement of Operations as an adjustment to
interest income. Interest rate swaps are marked-to-market daily based upon
quotations from market makers and the change, if any, is recorded as
unrealized appreciation or depreciation in the Statement of Operations.
TOTAL RETURN SWAPS: Total return swaps involve commitments to pay interest
in exchange for a market-linked return based on a notional amount. To the
extent the total return of the security, instrument or basket of
instruments underlying the transaction exceeds or falls short of the
offsetting interest obligation, the Fund will receive a payment from or
make a payment to the counterparty, respectively. Total return swaps are
marked-to-market daily based upon quotations from market makers and the
change, if any, is re-
12
<PAGE>
corded as unrealized gains or losses in the Statement of Operations.
Periodic payments received or made at the end of each measurement period,
but prior to termination, are recorded as realized gains or losses in the
Statement of Operations.
Realized gains or losses on maturity or termination of interest rate and
total return swaps are presented in the Statement of Operations. Because
there is no organized market for these swap agreements, the value reported
in the Statement of Net Assets may differ from that which would be realized
in the event the Fund terminated its position in the agreement. Risks may
arise upon entering into these agreements from the potential inability of
the counterparties to meet the terms of the agreements and are generally
limited to the amount of net interest payments to be received and/or
favorable movements in the value of the underlying security, instrument or
basket of instruments, if any, at the date of default.
8. STRUCTURED SECURITIES: The Fund may invest in interests in entities
organized and operated solely for the purpose of restructuring the
investment characteristics of sovereign debt obligations. This type of
restructuring involves the deposit with or purchase by an entity of
specified instruments and the issuance by that entity of one or more
classes of securities ("Structured Securities") backed by, or
representing interests in, the underlying instruments. Structured
Securities generally will expose the Fund to credit risks of the
underlying instruments as well as of the issuer of the issuer of the
Structured Security. Structured Securities are typically sold in private
placement transactions with no active trading market. Investments in
Structured Securities may be more volatile than their underlying
instruments, however, any loss is limited to the amount of the original
investment.
9. OVER-THE-COUNTER TRADING: Derivative instruments that may be purchased or
sold by the Fund are expected to regularly consist of instruments not
traded on an exchange. The risk of nonperformance by the obligor on such
an instrument may be greater, and the ease with which the Fund can
dispose of or enter into closing transactions with respect to such an
instrument may be less, than in the case of an exchange-traded
instrument. In addition, significant disparities may exist between bid
and asked prices for derivative instruments that are not traded on an
exchange. Derivative instruments not traded on exchanges are also not
subject to the same type of government regulation as exchange traded
instruments, and many of the protections afforded to participants in a
regulated environment may not be available in connection with such
transactions.
10. OTHER: Security transactions are accounted for on the date the securities
are purchased or sold. Investments in new Indian securities are made by
making applications in the public offerings. The issue price, or a
portion thereof, is paid at the time of application and reflected as
share application money on the Statement of Net Assets. Upon allotment
of the securities, this amount plus any remaining amount of issue price
is recorded as cost of investments. Realized gains and losses on the
sale of investment securities are determined on the specific identified
cost basis. Interest income is recognized on an accrual basis. Dividend
income is recorded on the ex-dividend date (except certain dividends
which may be recorded as soon as the Fund is informed of such dividend)
net of applicable withholding taxes. Distributions to shareholders are
recorded on the ex-dividend date.
The amount and character of income and capital gain distributions to be
paid are determined in accordance with Federal income tax regulations which
may differ from generally accepted accounting principles. These differences
are primarily due to differing book and tax treatments for foreign currency
transactions, net operating losses, gains on certain securities of
corporations designated as "passive foreign investment companies" and the
timing of the recognition of losses on securities.
Permanent book and tax basis differences relating to shareholder
distributions may result in reclassifications to undistributed net
investment income (loss), accumulated net realized gain (loss) and capital
surplus.
Adjustments for permanent book-tax differences, if any, are not reflected
in ending undistributed net investment income (loss) for the purposes of
calculating net investment income (loss) per share in the financial
highlights.
B. Morgan Stanley Dean Witter Investment Management Inc. (the "Adviser")
provides investment advisory services to the Fund under the terms of an
Investment Advisory and Management Agreement (the "Agreement"). Under the
Agreement, the Adviser is paid a fee computed weekly and payable monthly at
an annual rate of 1.10% of the Fund's average weekly net assets.
C. The Chase Manhattan Bank, through its corporate affiliate Chase Global
Funds Services Company (the "Administrator"), provides administrative services
to the Fund under an Administration Agreement. Under the Administration
Agreement, the Administrator is paid a fee computed weekly and payable monthly
at an annual rate of 0.09% of the Fund's average weekly net assets, plus $65,000
per annum. In addition, the Fund is charged certain out-of-pocket expenses by
the Administrator.
Multiconsult, Ltd., whose registered office is in Mauritius, provides
sub-administrative services to the Fund, including maintaining certain Fund
records and preparing certain periodic filings, under an agreement whereby
Multiconsult is paid a fee of $22,000 per annum.
13
<PAGE>
D. The Chase Manhattan Bank serves as custodian for the Fund. Custody fees
are payable monthly based on assets held in custody, investment purchase and
sales activity and account maintenance fees, plus reimbursement for certain
out-of-pocket expenses.
E. During the six months ended June 30, 1999, the Fund made purchases and
sales totaling $72,276,000 and $90,034,000 respectively, of investment
securities other than long-term U.S. Government securities and short- term
investments. There were no purchases and sales of long-term U.S. Government
securities. At June 30, 1999, the U.S. Federal income tax cost basis of
securities was $314,867,000, and, accordingly, net unrealized appreciation for
U.S. Federal income tax purposes was $99,746,000, of which $155,974,000 related
to appreciated securities and $56,228,000 related to depreciated securities.
At December 31, 1998, the Fund had a capital loss carryforward for U.S. Federal
income tax purposes of approximately $176,096,000 available to offset future
capital gains of which $19,397,000 will expire on December 31, 2003, $31,596,000
will expire on December 31, 2004, $45,881,000 will expire on December 31, 2005
and $79,222,000 will expire on December 31, 2006. To the extent that capital
gains are offset, such gains will not be distributed to shareholders.
F. For the six months ended June 30, 1999, the Fund incurred $76,000 of
brokerage commissions with Morgan Stanley & Co. Incorporated, an affiliate
of the Adviser.
G. A significant portion of the Fund's net assets consist of Indian securities
which involve certain considerations and risks not typically associated with
investments in the United States. In addition to its smaller size, less
liquidity and greater volatility, the Indian securities market is less developed
than the U.S. securities market and there is often substantially less publicly
available information about Indian issuers than there is about U.S. issuers.
Settlement mechanisms are also less developed and are accomplished only through
physical delivery, which may cause the Fund to experience delays or other
difficulties in effecting transactions. At June 30, 1999, the Fund owned an
aggregate of approximately $1,978,000 in securities which were either out for
transfer in the name of the Fund, were under objection for transfer in the name
of the Fund, or were due from companies and/or brokers for various capital
changes. Such securities are valued in accordance with the Fund's security
valuation policy as described in Note A-1, but may not be saleable at the value
shown in the Statement of Net Assets. The Fund has no intention of selling such
securities until they are transferred in the name of the Fund.
Future economic and political developments in India could adversely affect the
liquidity or value, or both, of securities in which the Fund is invested. In
addition, the Fund's ability to hedge its currency risk is limited and
accordingly, the Fund may be exposed to currency devaluation and other exchange
rate fluctuations.
H. Each Director of the Fund who is not an officer of the Fund or an
affiliated person as defined under the Investment Company Act of 1940, as
amended, may elect to participate in the Directors' Deferred Compensation
Plan (the "Plan"). Under the Plan, such Directors may elect to defer payment
of a percentage of their total fees earned as a Director of the Fund. These
deferred portions are treated, based on an election by the Director, as if
they were either invested in the Fund's shares or invested in U.S. Treasury
Bills, as defined under the Plan. The deferred fees payable, under the Plan,
at June 30, 1999 totaled $51,000 and are included in Payable for Directors'
Fees and Expenses on the Statement of Net Assets.
I. On August 10, 1998, the Fund commenced a share repurchase program for
purposes of enhancing shareholder value and reducing the discount at which
the Fund's shares traded from their net asset value. For the six months ended
June 30, 1999, the Fund repurchased 1,543,000 shares of its Common Stock at
an average price per share of $8.33 and an average discount of 26.16% from
net asset value per share. The Fund expects to continue to repurchase its
outstanding shares at such time and in such amounts as it believes will
further the accomplishment of the foregoing objectives, subject to review by
the Board.
J. SUPPLEMENTAL PROXY INFORMATION
The Annual Meeting of the Stockholders of the Morgan Stanley India Investment
Fund, Inc. was held on June 22, 1999. The following is a summary of each
proposal presented and the total number of shares voted:
<TABLE>
<CAPTION>
VOTES IN VOTES AUTHORITY VOTES
PROPOSAL: FAVOR OF AGAINST WITHHELD ABSTAINED
- --------- ------------ ------- --------- ---------
<S> <C> <C> <C> <C>
1. To elect the following Directors: Barton M. Biggs.................. 17,561,336 -- 2,644,079 --
John A Levin..................... 17,561,285 -- 2,644,130 --
2. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountants of the Fund............................................. 20,088,814 94,465 -- 22,136
3. To approve an amendment to the Fund's Articles of Incorporation to
change the name of the Fund to Morgan Stanley Dean Witter India
Investment Fund, Inc. .............................................. 17,605,748 2,548,314 -- 51,353
</TABLE>
14
<PAGE>
YEAR 2000 DISCLOSURE (UNAUDITED):
The investment advisory services provided to the Fund by the Adviser depend on
the smooth operation of its computer systems. Many computer and software systems
in use today cannot recognize the year 2000, but revert to 1900 or some other
date, due to the manner in which dates were encoded and calculated. That failure
could have a negative impact on the handling of securities trades, pricing and
account services. The Adviser has been actively working on necessary changes to
its own computer systems to deal with the year 2000 problem and expects that its
systems will be adapted before that date. There can be no assurance, however,
that the Adviser will be successful. In addition, other unaffiliated service
providers may be faced with similar problems. The Adviser is monitoring their
remedial efforts, but, there can be no assurance that they and the services they
provide will not be adversely affected.
In addition, it is possible that the markets for securities in which the Fund
invests may be detrimentally affected by computer failures throughout the
financial services industry beginning January 1, 2000. Improperly functioning
trading systems may result in settlement problems and liquidity issues. In
addition, corporate and governmental data processing errors may result in
production problems for individual companies and overall economic uncertainties.
Earnings of individual issuers will be affected by remediation costs, which may
be substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Fund's investments may be adversely affected.
15
<PAGE>
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
each shareholder will be deemed to have elected, unless American Stock Transfer
& Trust Company (the "Plan Agent") is otherwise instructed by the shareholder in
writing, to have all distributions automatically reinvested in Fund shares.
Participants in the Plan have the option of making additional voluntary cash
payments to the Plan Agent, annually, in any amount from $100 to $3,000, for
investment in Fund shares.
Dividend and capital gain distributions will be reinvested on the
reinvestment date in full and fractional shares. If the market price per share
equals or exceeds net asset value per share on the reinvestment date, the Fund
will issue shares to participants at net asset value. If net asset value is less
than 95% of the market price on the reinvestment date, shares will be issued at
95% of the market price. If net asset value exceeds the market price on the
reinvestment date, participants will receive shares valued at market price. The
Fund may purchase shares of its Common Stock in the open market in connection
with dividend reinvestment requirements at the discretion of the Board of
Directors. Should the Fund declare a dividend or capital gain distribution
payable only in cash, the Plan Agent will purchase Fund shares for participants
in the open market as agent for the participants.
The Plan Agent's fees for the reinvestment of dividends and distributions
will be paid by the Fund. However, each participant's account will be charged a
pro rata share of brokerage commissions incurred on any open market purchases
effected on such participant's behalf. A participant will also pay brokerage
commissions incurred on purchases made by voluntary cash payments. Although
shareholders in the Plan may receive no cash distributions, participation in the
Plan will not relieve participants of any income tax which may be payable on
such dividends or distributions.
In the case of shareholders, such as banks, brokers or nominees, which hold
shares for others 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 participating in the
Plan.
Shareholders who do not wish to have distributions automatically reinvested
should notify the Plan Agent in writing. There is no penalty for
non-participation or withdrawal from the Plan, and shareholders who have
previously withdrawn from the Plan may rejoin at any time. Requests for
additional information or any correspondence concerning the Plan should be
directed to the Plan Agent at:
Morgan Stanley Dean Witter India Investment Fund, Inc.
American Stock Transfer & Trust Company
Dividend Reinvestment and Cash Purchase Plan
40 Wall Street
New York, NY 10005
1-800-278-4353
16
