<PAGE>
----------------------------------------------------------------
MORGAN STANLEY
DEAN WITTER
INDIA INVESTMENT
FUND, INC.
----------------------------------------------------------------
ANNUAL REPORT
DECEMBER 31, 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
TREASURER
Robin L. Conkey
ASSISTANT TREASURER
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- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
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ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
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CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
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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
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INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
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- --------------------------------------------------------------------------------
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 year ended December 31, 1999, the Morgan Stanley Dean Witter India
Investment Fund, Inc. (the "Fund") had a total return, based on net asset value
per share, of 145.81% compared to 88.41% 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 December 31, 1999, the Fund'S
total return, based on net asset value per share, was 62.64% compared to -6.53%
for the Index. On December 31, 1999, the closing price of the Fund'S shares on
the New York Stock Exchange was $16 1/2 representing a 27.0% discount to the
Fund's net asset value per share.
The Indian stock market registered impressive gains over the past year to
hopefully mark the end of a grueling four- year long bear market, the most
protracted in India's history. The market has shown tremendous resilience in a
period where the headline-grabbing events were the fall of a government at the
center 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.
What encourages us is that not only have we been able to fully participate in
the market appreciation but have further added value to the return profile by
considerably outperforming the Index. It has always been our endeavor to ensure
consistency in performance through a distinct bottom-up approach to investing.
Long alternating bull and bear market cycles in India, where we are one of the
oldest foreign investors, have taught us the importance of maintaining a certain
discipline that in turn has brought about consistent outperformance.
Our investing approach entails that we restrict our universe of stocks in the
Fund to companies with a) high-quality, pro-active management that is high on
integrity, b) a dominant share in business, c) a rising if not high return on
equity profile and d) businesses that do not require routine dilution of
capital. It is our effort to try and visit every company prior to investing in
its stock and our reliance is more on qualitative inputs and basic corporate
strategy than quantitative financials. There is no bias towards a particular
investing style and stock selection over the years has reflected an open mind
towards buying both growth and value plays.
Performance has been the primary driver of our investing style and so over the
years we have bought companies trading at more than 50 times prospective
earnings. Similarly, our recent stock purchases have been of companies trading
at five times historical earnings but that meet our basic criteria of stock
selection as listed above. Overlaid on this essentially bottom-up approach to
investing is a consideration for market psychology, macro-economic variables and
international trends, all of which we track incessantly and look to have insight
in consistently.
An encouraging development, becoming increasingly apparent of late, is the
growing influence of international patterns on the Indian industry and equity
market. For example, a shift in the sectoral preference from growth to value
stocks, seen in the second quarter of the calendar year in the Indian market,
was very much a global trend. Similarly, at a broader level, the correlation
between global emerging markets and the Indian market has been rising, and so
India has been benefiting this year from the revival of interest in emerging
markets. Here again, our global experience and exposure puts us in a position to
capture such trends in the Fund.
Given the way the portfolio is positioned, we think the Fund should continue to
more than capture the market's improving performance for our investors. Our
conviction has been strengthened by the trends in the recently concluded
national elections which have lent credibility to the growing worldwide belief
that good economics now makes for smart politics and India should follow the
same path. We then hope for a continuation of both the absolute and relative
performance run that should help this Fund be a storehouse of value.
Sincerely,
/s/ Michael F. Klein
Michael F. Klein
PRESIDENT AND DIRECTOR
January 2000
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.
2
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Investment Summary as of December 31, 1999 (Unaudited)
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<TABLE>
<CAPTION>
HISTORICAL
INFORMATION
TOTAL RETURN (%)
------------------------------------------------------------------------
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>
One Year 144.44% 144.44% 145.81% 145.81% 88.41% 88.41%
Five Year 46.67 7.96 61.47 10.06 1.46 0.29
Since Inception* 18.79 2.99 62.64 8.67 -6.53 -1.15
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[GRAPH]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
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 $22.59
Market Value Per Share ............. $11.25 $9.13 $9.50 $8.38 $6.75 $16.50
Premium/(Discount) ................. -19.6% 2.5% 7.8% -5.1% -26.6% -27.0%
Capital Gains Distributions ........ $ 0.17 -- -- -- -- --
Fund Total Return (2) .............. 0.72% -36.31% -1.12% 0.23% 4.08% 145.81%
Index Total Return (3) ............. -7.88% -31.53% -6.49% 6.43% -20.98% 88.41%
</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.
3
<PAGE>
Morgan Stanley Dean Witter India Investment Fund, Inc.
Portfolio Summary as of December 31,1999
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DIVERSIFICATION OF TOTAL INVESTMENTS
[CHART]
<TABLE>
<S> <C>
Equity Securities (98.0%)
Short-Term Investments (0.9%)
Fixed Income Securities (1.1%)
</TABLE>
- --------------------------------------------------------------------------------
INDUSTRIES
[CHART]
<TABLE>
<S> <C>
Automobiles (13.8%)
Beverages & Tobacco (4.2%)
Broadcasting & Publishing (18.5%)
Chemicals (3.5%)
Data Processing & Reproduction (26.4%)
Electrical & Electronics (4.2%)
Financial Services (2.3%)
Health & Personal Care (12.3%)
Machinery & Engineering (3.2%)
Transportation -- Road & Rail (2.0%)
Other (9.6%)
</TABLE>
- --------------------------------------------------------------------------------
TEN LARGEST HOLDINGS
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
----------
<S> <C>
1. Infosys Technology Ltd. 22.3%
2. Zee Telefilms Ltd. 18.4
3. Hero Honda Motors Ltd. 6.0
4. Bharat Heavy Electricals Ltd. 4.2
5. Tata Engineering & Locomotive Ltd. 3.1
6. Cipla Ltd. 2.9%
7. Tata Tea Ltd. 2.7
8. Novartis India Ltd. 2.0
9. Container Corp. of India Ltd. 2.0
10. Dabur India Ltd. 1.8
----
65.4%
----
----
</TABLE>
4
<PAGE>
FINANCIAL STATEMENTS
- ---------
STATEMENT OF NET ASSETS
- ---------
DECEMBER 31, 1999
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (98.0%)
(Unless otherwise noted)
- --------------------------------------------------------------------------------
APPLIANCES & HOUSEHOLD DURABLES (0.3%)
Phillips India LTD.
799,510 U.S.$ 1,911
---------------
- --------------------------------------------------------------------------------
AUTOMOBILES (13.8%)
Elgi Tyres & Tread Ltd. 410,100 2,828
Escorts Ltd. 322,041 897
Hero Honda Motors Ltd. 1,713,931 44,484
Motherson Sumi Systems Ltd. 2,350 6
Motor Industries Co., Ltd. 39,942 4,591
(a,b)Patheja Bros. Forgings &
Stamp Ltd. 450,000 --@
Punjab Tractors Ltd. 442,570 10,572
Rane Brakes & Lining Ltd. 7,200 17
(a)Rane Madras Ltd. 213,100 514
(a)S.K.F. Bearings Ltd. 55,256 1,112
Sundaram Fasteners Ltd. 394,550 6,433
Tata Engineering & Locomotive Ltd. 4,936,773 22,811
TVS Suzuki Ltd. 614,622 7,616
---------------
101,881
---------------
- --------------------------------------------------------------------------------
BANKING (0.3%)
State Bank of India Ltd. 509,607 2,633
---------------
- --------------------------------------------------------------------------------
BEVERAGES & TOBACCO (4.2%)
ITC Ltd. 740,151 11,315
Tata Tea Ltd. 1,635,049 19,733
---------------
31,048
---------------
- --------------------------------------------------------------------------------
BROADCASTING & PUBLISHING (18.5%)
(b)New Delhi Television Ltd. 333,300 1,034
ZEE Telefilms Ltd. 5,388,720 135,375
---------------
136,409
---------------
- --------------------------------------------------------------------------------
CHEMICALS (3.5%)
Agrevo India Ltd. 620,560 7,347
Asian Paints (India) Ltd. 298,770 2,541
Castrol (India) Ltd. 2,300 16
Coates of India Ltd. 178,150 725
Colour-Chem Ltd. 64,602 3,119
Dr. Reddy's Laboratories Ltd. 22,000 729
ICI India Ltd. 402,078 2,073
Indo Gulf Corp., Ltd. 475,730 689
Monsanto Chemicals of India 99,800 2,786
Reliance Industries Ltd. 650 3
Sudarshan Chemicals Ltd. 234,552 352
Supreme Industries Ltd. 832,900 5,352
----------------
25,732
----------------
- --------------------------------------------------------------------------------
DATA PROCESSING & REPRODUCTION (26.4%)
(a)Fujitsu Icim Ltd. 469,265 U.S.$ 7,164
(a,b)HCL Technologies Ltd. 57,500 767
(a)Hughes Software Systems 88,000 8,409
Infosys Technology Ltd. 491,890 164,147
Modi Xerox Ltd. 1,077,400 2,985
Software Solution Integrated Ltd. 173,400 8,799
Tata Infotech Ltd. 115,575 2,353
----------------
194,624
----------------
- --------------------------------------------------------------------------------
ELECTRICAL & ELECTRONICS (4.2%)
Bharat Heavy Electricals Ltd. 6,338,286 30,598
Carrier Aircon Ltd. 102,800 284
----------------
30,882
----------------
- --------------------------------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (0.1%)
(a)Renewable Energy Ltd. 47,800 1
Shriram Honda Power Equipment Ltd. 318,330 908
----------------
909
----------------
- --------------------------------------------------------------------------------
FINANCIAL SERVICES(2.3%)
HDFC Bank Ltd. 1,557,900 5,784
Housing Development Finance
Corp., Ltd. 1,398,270 9,929
ICICI Ltd. - New 50 --@
(a)Sundaram Finance Ltd. 144,800 483
(b)Tata Finance Ltd. 355,000 1,107
UTI Mastergain 24,300 7
UTI-MasterShares Ltd. 5,250 2
----------------
17,312
----------------
- --------------------------------------------------------------------------------
FOOD & HOUSEHOLD PRODUCTS (0.7%)
Smithkline Beecham
Consumer Health Care Ltd. 424,077 5,045
----------------
- --------------------------------------------------------------------------------
HEALTH & PERSONAL CARE (12.3%)
(a)Bausch & Lomb India Ltd. 100 --@
Cipla Ltd. 667,335 21,324
Dabur India Ltd. 490,591 13,308
E. Merck (India) Ltd. 336,125 4,945
Glaxo India Ltd. 125,000 2,100
Hoechst Marion Roussel India Ltd. 401,000 9,553
Lupin Laboratories Ltd. 416,000 5,499
Marico Industries Ltd. 283,200 2,174
Novartis India Ltd. 495,676 14,583
Pfizer Ltd. 50 1
Reckitt & Coleman of India Ltd. 589,863 4,339
Smithkline Beecham Pharmaceuticals
(India) Ltd. 342,390 2,379
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
HEALTH & PERSONAL CARE (CONTINUED)
(c)Strides Arcolab Ltd. 540,000 U.S.$ 4,966
Sun Pharmaceutical Industries Ltd. 150,363 5,811
----------------
90,982
----------------
- --------------------------------------------------------------------------------
INDUSTRIAL COMPONENTS (1.3%)
Apollo Tyres Ltd. 2,475 9
(a)ITW Signode India Ltd. 1,077,500 2,335
MRF Ltd. 138,330 6,957
----------------
9,301
----------------
- --------------------------------------------------------------------------------
LEISURE & TOURISM (0.7%)
EIH Ltd. 260,400 1,197
Indian Hotels Co., Ltd. 519,317 3,785
----------------
4,982
----------------
- --------------------------------------------------------------------------------
MACHINERY & ENGINEERING (3.2%)
Chicago Pneumatic India Ltd. 324,940 799
Cummins India Ltd. 398,440 5,239
Esab India Ltd. 564,850 796
(a)Lakshmi Machine Works Ltd. 19,268 680
(a)Lakshmi Synthetic Machinery Ltd. 137,700 37
Larsen & Toubro Ltd. 924,000 11,808
Rane Madras Ltd. 195,700 401
Revathi-CP Equipment Ltd. 298,550 2,436
Thermax Ltd. 514,687 1,623
----------------
23,819
----------------
- --------------------------------------------------------------------------------
METALS -- STEEL (0.0%)
Tata Iron & Steel Co., Ltd. 100 --@
----------------
- --------------------------------------------------------------------------------
MISC. MATERIALS & COMMODITIES (1.0%)
(a)Delta International 570,000 --@
Essel Packaging Ltd. 368,075 5,077
Tata Donnelley Ltd. 293,250 2,300
----------------
7,377
----------------
- --------------------------------------------------------------------------------
RECREATION, OTHER CONSUMER GOODS (1.0%)
Titan Industries Ltd. 2,129,069 7,079
----------------
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS -- INTEGRATED (1.2%)
Videsh Sanchar Nigam Ltd. 205,040 8,527
----------------
- --------------------------------------------------------------------------------
TEXTILES & APPAREL (0.5%)
Bata India Ltd. 783,036 2,484
Madura Coats Ltd. 379,550 297
Mahavir Spinning Mills Ltd. 10,000 15
Rajapalayam Mills 1,615 66
Vardhaman Spinning & General Mills Ltd. 332,450 512
----------------
3,374
----------------
- --------------------------------------------------------------------------------
TRANSPORTATION -- ROAD & RAIL (2.0%)
Container Corp. of India Ltd. 2,557,892 U.S.$ 14,407
----------------
- --------------------------------------------------------------------------------
UTILITIES -- ELECTRICAL & GAS (0.5%)
Jyoti Structures Ltd. 167,700 254
Tata Power Co., Ltd. 1,900,966 3,168
----------------
3,422
----------------
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost U.S.$343,533) 721,656
----------------
- --------------------------------------------------------------------------------
<CAPTION>
FACE
AMOUNT
(000)
- --------------------------------------------------------------------------------
<S> <C> <C>
FIXED INCOME SECURITIES (1.1%)
- --------------------------------------------------------------------------------
CHEMICALS (1.1%)
(b)Indo Gulf Corp., Ltd. 14.258%
2/6/00 INR 3,000 7,637
----------------
- --------------------------------------------------------------------------------
TEXTILES & APPAREL (0.0%)
(b)Garware Plastics & Polyester
Ltd. 16.00%, 5/1/05 277 183
----------------
- --------------------------------------------------------------------------------
TOTAL FIXED INCOME SECURITIES
(Cost U.S.$10,732) 7,820
----------------
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENT (0.0%)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT (0.0%)
Chase Securities Inc.
2.60%, dated 12/31/99,
due 1/3/00, to be
repurchased at U.S.$318,
collateralized by
U.S.$330 United States
Treasury Notes, 6.125%,
due 12/31/01, valued at
U.S.$329 (Cost U.S.$318) U.S.$ 318 318
----------------
- --------------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT WITH CUSTODIAN (0.9%)
Indian Rupee
(Cost U.S.$7,203) INR 313,135 7,199
----------------
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS (100.0%)
(Cost U.S.$361,786) 293,241 736,993
----------------
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<TABLE>
<CAPTION> AMOUNT AMOUNT
(000) (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
OTHER ASSETS (0.2%)
Cash U.S.$ 97
Foreign Tax Reclaim Receivable 1,164
Dividends Receivable 363
Interest Receivables 241
Receivable for Investments Sold 1
Other Assets 31 U.S.$ 1,897
--------------------------
- --------------------------------------------------------------------------------
LIABILITIES (-0.2%)
Payable For:
Investment Advisory Fees (623)
Custodian Fees (323)
Professional Fees (106)
Directors' Fees and Expenses (94)
Administrative Fees (61)
Shareholder Reporting Expenses (53)
Other Payables (332)
Other Liabilities (955) (2,547)
-----------------------------
- --------------------------------------------------------------------------------
NET ASSETS (100%)
Applicable to 32,600,492, issued and
outstanding U.S.$0.01 par value shares
(100,000,000 shares authorized) U.S.$ 736,343
----------------
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 22.59
----------------
- --------------------------------------------------------------------------------
AT DECEMBER 31, 1999, NET ASSETS CONSISTED OF:
- --------------------------------------------------------------------------------
Common Stock U.S.$ 326
Capital Surplus 461,076
Accumulated Net Investment Loss (94)
Accumulated Net Realized Loss (100,040)
Unrealized Appreciation on Investments and
Foreign Currency Translations 375,075
- --------------------------------------------------------------------------------
TOTAL NET ASSETS U.S.$ 736,343
----------------
- --------------------------------------------------------------------------------
</TABLE>
(a) -- Non-income producing.
(b) -- Security valued at fair value -- see note A-1 to financial statements.
(c) -- 144A Security -- certain conditions for public sale may exist.
@ -- Value is less than U.S.$500.
December 31, 1999 exchange rate -- Indian Rupee
(INR) 43.500=U.S.$1.00
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
MORGAN STANLEY DEAN WITTER
INDIA INVESTMENT FUND, INC.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
YEAR ENDED
DECEMBER 31, 1999
(000)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends ................................................................................................. U.S.$ 4,725
Interest .................................................................................................. 279
Less: Foreign Taxes Withheld .............................................................................. (7)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Income ............................................................................................ 4,997
- ---------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees .................................................................................. 5,310
Custodian Fees ............................................................................................ 1,356
Administrative Fees ....................................................................................... 510
Professional Fees ......................................................................................... 134
Directors' Fees and Expenses .............................................................................. 102
Shareholder Reporting Expenses ............................................................................ 75
Sub-Administrative Fees ................................................................................... 27
Transfer Agent Fees ....................................................................................... 16
Other Expenses ............................................................................................ 107
- ---------------------------------------------------------------------------------------------------------------------------------
Total Expenses .......................................................................................... 7,637
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Loss ................................................................................. (2,640)
- ---------------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS)
Investment Securities Sold ................................................................................ 77,732
Foreign Currency Transactions ............................................................................. (266)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain ....................................................................................... 77,466
- ---------------------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
Appreciation on Investments ............................................................................... 362,100
Depreciation on Foreign Currency Translations ............................................................. (1,432)
- ---------------------------------------------------------------------------------------------------------------------------------
Change in Unrealized Appreciation/Depreciation .......................................................... 360,668
- ---------------------------------------------------------------------------------------------------------------------------------
Net Realized Gain and Change in Unrealized Appreciation/Depreciation ........................................ 438,134
- ---------------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................................... U.S.$ 435,494
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
(000) (000)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Loss ....................................................... U.S.$ (2,640) U.S.$ (1,381)
Net Realized Gain (Loss) .................................................. 77,466 (72,863)
Change in Unrealized Appreciation/Depreciation ............................ 360,668 83,192
- ---------------------------------------------------------------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations ...................... 435,494 8,948
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Repurchase of Shares (1,636,300 and 1,470,300 shares, respectively) ....... (13,852) (9,693)
- ---------------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Capital Share Transactions ...... (13,852) (9,693)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) ................................................. 421,642 (745)
Net Assets:
Beginning of Period ....................................................... 314,701 315,446
- ---------------------------------------------------------------------------------------------------------------------------------
End of Period (including accumulated net investment loss of U.S.$(94)
and U.S.$(28), respectively) ............................................ U.S.$ 736,343 U.S.$ 314,701
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
MORGAN STANLEY DEAN WITTER
INDIA INVESTMENT FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SELECTED PER SHARE DATA AND YEARS ENDED DECEMBER 31,
RATIOS:
---------------------------------------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ................ U.S.$ 9.19 U.S.$ 8.83 U.S.$ 8.81 U.S.$ 8.91 U.S.$ 13.99
- ----------------------------------------------------------------------------------------------------------------------------------
Net Investment Loss .............................. (0.08) (0.04) (0.07) (0.08) (0.16)
Net Realized and Unrealized Gain (Loss) on
Investments ..................................... 13.33 0.31 0.09 (0.02) (4.92)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ............... 13.25 0.27 0.02 (0.10) (5.08)
- ----------------------------------------------------------------------------------------------------------------------------------
Anti-Dilutive Effect of Shares Repurchased .......... 0.15 0.09 -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD ...................... U.S.$ 22.59 U.S.$ 9.19 U.S.$ 8.83 U.S.$ 8.81 U.S.$ 8.91
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PER SHARE MARKET VALUE, END OF PERIOD ............... U.S.$ 16.50 U.S.$ 6.75 U.S.$ 8.38 U.S.$ 9.50 U.S.$ 9.13
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN:
Market Value ...................................... 144.44% (19.40)% (11.84)% 4.11% (18.89)%
Net Asset Value (1) ............................... 145.81% 4.08% 0.23% (1.12)% (36.31)%
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS, SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (THOUSANDS) ............... U.S.$ 736,343 U.S.$ 314,701 U.S.$ 315,446 U.S.$ 314,423 U.S.$ 318,045
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets ............. 1.59% 1.97% 2.06% 2.10% 3.16%
Ratio of Net Investment Loss to Average Net Assets .. (0.55)% (0.44)% (0.70)% (0.85)% (1.48)%
Portfolio Turnover Rate ............................. 34% 24% 25% 28% 28%
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(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.
9
<PAGE>
MORGAN STANLEY DEAN WITTER INDIA INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 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 under procedures
approved by the Board of Directors, 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 rate of capital gains tax in India is 10% for long-term investments
and 30% for short-term investments. 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. 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
shown in the Statement of Net Assets 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: The Fund may enter into repurchase agreements under
which the Fund lends excess cash and takes possession of securities with
an agreement that the counterparty will repurchase such securities. In
connection with transactions in repurchase agreements, a bank as custodian
for the Fund takes possession of the underlying securities (collateral),
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 counterparty 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;
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- investment transactions and investment income - at the prevailing rate
of exchange on the dates of such transactions.
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) due to securities transactions
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) on foreign
currency translations for the period is reflected in the Statement of
Operations.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S.
dollar denominated transactions as a result of, among other factors, the
possibility of lower levels of governmental supervision and regulation of
foreign securities markets and the possibility of political or economic
instability.
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 assets as segregated on the Fund's records. 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
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MORGAN STANLEY DEAN WITTER INDIA INVESTMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONT.)
DECEMBER 31, 1999
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 recorded 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.
Risks also arise from potential losses from adverse market movements, and
such losses could exceed the related amounts shown in the Statement of Net
Assets.
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: Securities and other 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.
The Fund did not invest in Purchased Options, Forward Commitments and
When-Issued/Delayed Delivery Securities, Swap Agreements, Structured
Securities or participate in Over-the-Counter Securities during the year
ended December 31, 1999.
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 by the Fund are determined in accordance with Federal income tax
regulations, which may differ from generally accepted accounting
principles. The book/tax differences are either considered temporary or
permanent in nature.
Temporary differences are attributable to differing book and tax
treatments for the timing of the recognition of gains and losses on
certain investment transactions and the timing of the deductibility of
certain expenses.
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Permanent book and tax basis differences may result in reclassifications
among undistributed net investment income (loss), accumulated net realized
gain (loss) and paid in capital.
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.
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 year ended December 31, 1999, the Fund made purchases and sales
totaling $157,168,000 and $186,178,000, respectively, of investment
securities other than long-term U.S. Government securities and short-term
investments. There were no purchases or sales of long-term U.S. Government
securities. At December 31, 1999, the U.S. Federal income tax cost basis of
securities was $356,571,000, and, accordingly, net unrealized appreciation
for U.S. Federal income tax purposes was $373,223,000, of which $421,902,000
related to appreciated securities and $48,679,000 related to depreciated
securities.
At December 31, 1999, the Fund had a capital loss carryforward for U.S.
Federal income tax purposes of approximately $98,061,000 available to offset
future capital gains of which $18,838,000 will expire on December 31, 2005
and $79,223,000 will expire on December 31, 2006. During the year ended
December 31, 1999, the Fund utilized capital loss carryforwards, for U.S.
Federal income tax purposes, of approximately $78,036,000. To the extent that
capital gains are offset, such gains will not be distributed to shareholders.
F. During 1999, the Fund incurred $2,000 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, in certain cases, which
may cause the Fund to experience delays or other difficulties in effecting
transactions. At December 31, 1999, approximately $55,407,000 of Fund
securities were either out for transfer in the name of the Fund, were under
objection for transfer in the name of the Fund, were out for
dematerialization, 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.
At December 31, 1999, approximately 54% of the Fund's net assets were
invested in shares of 5 Indian issuers.
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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. At December 31, 1999, the deferred fees
payable under the Plan, totaled $94,000 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 year ended
December 31, 1999, the Fund repurchased 1,636,300 share or 4.78% of its
Common Stock at an average price per share of $8.42, including $82,000 in
commissions paid, and an average discount of 26.21% from net asset value per
share. For the year ended December 31, 1998, the Fund repurchased 1,470,300
share or 4.12% of its Common Stock at an average price per share of $6.54,
including $74,000 in commissions paid, and an average discount of 25.53% 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 of Directors.
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MORGAN STANLEY DEAN WITTER INDIA INVESTMENT FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Morgan Stanley Dean Witter India Investment Fund, Inc.
(formerly Morgan Stanley India Investment Fund, Inc.)
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position
of Morgan Stanley Dean Witter India Investment Fund, Inc. (the "Fund") at
December 31, 1999, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the
United States. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 1999 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
February 18, 2000
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MORGAN STANLEY DEAN WITTER INDIA INVESTMENT FUND, INC.
FEDERAL TAX INFORMATION (UNAUDITED)
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. 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
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