UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED
SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number
|
811-08238
|
|
MORGAN STANLEY INDIA INVESTMENT FUND, INC..
|
(Exact name of registrant as
specified in charter)
|
|
522 Fifth Avenue, New York, New York
|
|
10036
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(Address of principal executive
offices)
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(Zip code)
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Randy Takian
522 Fifth Avenue, New York, New York 10036
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(Name and address of agent for
service)
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|
Registrants telephone number, including
area code:
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212-296-6990
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|
|
Date of fiscal year end:
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December 31,
2010
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|
|
Date of reporting period:
|
June 30,
2010
|
|
|
|
|
|
|
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Item
1 - Report to Shareholders
INVESTMENT MANAGEMENT
|
|
Morgan Stanley India Investment Fund, Inc. (IIF)
Morgan Stanley
Investment Management Inc.
Investment Adviser
Semi-Annual Report
June 30, 2010
Morgan Stanley India Investment Fund, Inc.
June 30, 2010 (unaudited)
Letter to Stockholders
Performance
For the six months ended June 30, 2010, the
Morgan Stanley India Investment Fund, Inc. (the Fund) had total returns
of 4.34%, based on net asset value, and -1.99% based on market value per share
(including reinvestment of distributions), compared to its benchmark, the U.S.
dollar adjusted Bombay Stock Exchange (BSE) 100 Index (the Index), which
returned 2.50% . On June 30, 2010, the closing price of the Funds shares
on the New York Stock Exchange was $22.16, representing a 10.5% discount to the
Funds net asset value per share. Past performance is no guarantee of future
results.
Factors Affecting Performance
·
The Funds NAV outperformed the Index over the six
months ended June 30, 2010. Overall, sector allocation was the primary
contributor to relative returns, though bottom-up stock selection also
contributed to performance.
·
From a top-down perspective, the Funds relative
overweight exposure to the consumer staples, health care and consumer
discretionary sectors together with an underweight bias to the materials and
telecommunications services sectors supported the Funds performance. This was
partially offset by the negative impact of the Funds underweight position in
the financials sector.
·
From a bottom-up perspective, stock selections in
financials, materials and industrials were positive contributors, while stock
selection in consumer staples and energy stocks detracted from returns.
Management Strategies
·
The Indian equity market, as measured by the MSCI India
Index, continued to outperform emerging markets, as measured by the MSCI
Emerging Markets Index, in the first half of calendar year 2010 by a healthy
margin of over 8 percentage points. Unlike earlier episodes of risk aversion,
when Indian markets suffered disproportionately more than global emerging
markets as a whole, we find this performance encouraging. There was not a large
exodus of capital even when global equity markets went through a nervous phase
due to the European sovereign debt crisis.
·
Domestically, some large positive factors have been at
play. After receiving a strong electoral mandate in May 2009, the
Government has kickstarted an infrastructure investment program and has pressed
ahead with policy reforms encompassing divestment, deregulation and higher
private sector participation. Although the fiscal deficit remains higher than
that of global peers, Indias high nominal growth rate and domestic
ownership of debt are some of the redeeming factors. The Indian financial
system remained relatively unaffected in the global crisis and now as economic
indicators pick up and business confidence returns, credit creation is
gathering steam. We believe this bodes well for private capital expenditure and
infrastructure spending in the country. However, Indias high current
account deficit and persistently high headline inflation remain our key
worries.
·
From a portfolio standpoint, we continue to remain
overweight consumer-related sectors and health care while being underweight
global cyclicals like materials and energy. We remain underweight
telecommunications, where we think domestic competitive pressures and
regulatory headwinds have put pressure on business fundamentals.
Sincerely,
Randy Takian
President and Principal Executive Officer
|
July 2010
|
2
Morgan Stanley India Investment Fund, Inc.
June 30, 2010 (unaudited)
Investment Advisory Agreement Approval
Nature, Extent and Quality of
Services
The Board reviewed and considered the nature and
extent of the investment advisory services provided by the Adviser (as defined
herein) under the advisory agreement, including portfolio management,
investment research and equity and fixed income securities trading. The Board
reviewed similar information and factors regarding the Sub-Adviser (as defined
herein), to the extent applicable. The Board also reviewed and considered the
nature and extent of the non-advisory, administrative services provided by the
Funds Adviser under the administration agreement, including accounting,
clerical, bookkeeping, compliance, business management and planning, and the
provision of supplies, office space and utilities at the Advisers expense.
(The Adviser and Sub-Adviser together are referred to as the Adviser and the
advisory, sub-advisory and administration agreements together are referred to
as the Management Agreement.) The Board also compared the nature of the
services provided by the Adviser with similar services provided by
non-affiliated advisers as reported to the Board by Lipper, Inc.
(Lipper).
The Board reviewed and considered the qualifications
of the portfolio managers, the senior administrative managers and other key
personnel of the Adviser who provide the administrative and advisory services to
the Fund. The Board determined that the Advisers portfolio managers and key
personnel are well qualified by education and/or training and experience to
perform the services in an efficient and professional manner. The Board
concluded that the nature and extent of the advisory and administrative
services provided were necessary and appropriate for the conduct of the
business and investment activities of the Fund and supported its decision to
approve the Management Agreement.
Performance, Fees and Expenses of the
Fund
The Board reviewed the performance, fees and expenses
of the Fund compared to its peers, as determined by Lipper, and to appropriate
benchmarks where applicable. The Board discussed with the Adviser the
performance goals and the actual results achieved in managing the Fund. When
considering a funds performance, the Board and the Adviser place emphasis on
trends and longer-term returns (focusing on one-year, three-year and five-year
performance, as of December 31, 2009, as applicable). When a fund
underperforms its benchmark and/or its peer group average, the Board and the
Adviser discuss the causes of such underperformance and, where necessary, they
discuss specific changes to investment strategy or investment personnel. The
Board noted that the Funds performance was below its peer group average for
the three-year period but better than its peer group average for the one- and
five-year periods. The Board discussed with the Adviser the level of the
advisory and administration fees (together, the management fee) for this Fund
relative to comparable funds advised by the Adviser and compared to its peers
as determined by Lipper. In addition to the management fee, the Board also
reviewed the Funds total expense ratio. The Board noted that while the Funds
management fee was higher than its peer group average, the total expense ratio
was lower than its peer group average. After discussion, the Board concluded
that: (i) the Funds performance was competitive with its peer group
average, (ii) the Funds management fee, although higher than its peer
group average, was acceptable given the quality and nature of services
provided, and (iii) the Funds total expense ratio was competitive with
its peer group average.
3
Morgan Stanley India Investment Fund, Inc.
June 30, 2010 (unaudited)
Investment Advisory Agreement Approval (contd)
Economies of Scale
The Board considered the size and growth prospects of
the Fund and how that relates to the Funds total expense ratio and
particularly the Funds management fee rate, which does not include
breakpoints. In conjunction with its review of the Advisers profitability, the
Board discussed with the Adviser how a change in assets can affect the
efficiency or effectiveness of managing the Fund and whether the management fee
level is appropriate relative to current and projected asset levels and/or
whether the management fee structure reflects economies of scale as asset
levels change. The Board considered that, with respect to closed-end funds, the
assets are not likely to grow with new sales or grow significantly as a result
of capital appreciation. The Board concluded that economies of scale for the
Fund were not a factor that needed to be considered at the present time.
Profitability of the Adviser and
Affiliates
The Board considered information concerning the costs
incurred and profits realized by the Adviser and its affiliates during the last
year from their relationship with the Fund and during the last two years from
their relationship with the Morgan Stanley Fund Complex and reviewed with the
Adviser the cost allocation methodology used to determine the profitability of
the Adviser and affiliates. The Board has determined that its review of the
analysis of the Advisers expenses and profitability supports its decision to
approve the Management Agreement.
Other Benefits of the Relationship
The Board considered other benefits to the Adviser and
its affiliates derived from their relationship with the Fund and other funds
advised by the Adviser. These benefits may include, among other things, float
benefits derived from handling of checks for purchases and sales, research
received by the Adviser generated from commission dollars spent on funds
portfolio trading and fees for distribution and/or shareholder servicing. The
Board reviewed with the Adviser each of these arrangements and the
reasonableness of the Advisers costs relative to the services performed. The
Board has determined that its review of the other benefits received by the
Adviser or its affiliates supports its decision to approve the Management
Agreement.
Resources of the Adviser and
Historical Relationship Between the Fund and the Adviser
The Board considered whether the Adviser is
financially sound and has the resources necessary to perform its obligations
under the Management Agreement. The Board also reviewed and considered the
historical relationship between the Fund and the Adviser, including the
organizational structure of the Adviser, the policies and procedures formulated
and adopted by the Adviser for managing the Funds operations and the Boards
confidence in the competence and integrity of the senior managers and key
personnel of the Adviser. The Board concluded that the Adviser has the
financial resources necessary to fulfill its obligations under the Management
Agreement and that it is beneficial for the Fund to continue its relationship
with the Adviser.
Other Factors and Current Trends
The Board considered the controls and procedures
adopted and implemented by the Adviser and monitored by the Funds Chief
Compliance Officer and concluded that the conduct of business by the Adviser
indicates a good faith effort on its part to adhere to high ethical standards
in the conduct of the Funds business.
4
Morgan Stanley India Investment Fund, Inc.
June 30, 2010 (unaudited)
Investment Advisory Agreement Approval (contd)
General Conclusion
After considering and weighing all of the above factors,
the Board concluded that it would be in the best interest of the Fund and its
shareholders to approve renewal of the Management Agreement for another year.
In reaching this conclusion the Board did not give particular weight to any
single factor referenced above. The Board considered these factors over the
course of numerous meetings, some of which were in executive session with only
the Independent Board members and their counsel present. It is possible that
individual Board members may have weighed these factors differently in reaching
their individual decisions to approve the Management Agreement.
5
Morgan Stanley India Investment Fund, Inc.
June 30, 2010 (unaudited)
Portfolio of Investments
|
|
|
|
Value
|
|
|
|
Shares
|
|
(000)
|
|
COMMON
STOCKS (94.0%)
|
|
|
|
|
|
Auto
Components (0.0%)
|
|
|
|
|
|
Apollo Tyres Ltd. (a)
|
|
18,750
|
|
$
|
26
|
|
|
|
|
|
|
|
Automobiles
(2.8%)
|
|
|
|
|
|
Bajaj Auto Ltd.
|
|
235,000
|
|
12,475
|
|
Hero Honda Motors Ltd.
|
|
65,281
|
|
2,862
|
|
Patheja
Forgings & Auto Parts Manufactures Ltd. (a)(b)(c)
|
|
450,000
|
|
|
|
|
|
|
|
15,337
|
|
Chemicals
(1.5%)
|
|
|
|
|
|
Akzo Nobel India Ltd. (a)
|
|
25,000
|
|
408
|
|
Asian Paints Ltd.
|
|
118,258
|
|
5,822
|
|
Coromandel
International Ltd.
|
|
206,500
|
|
2,068
|
|
|
|
|
|
8,298
|
|
Commercial
Banks (18.4%)
|
|
|
|
|
|
Bank of Baroda (b)
|
|
429,893
|
|
6,469
|
|
HDFC Bank Ltd.
|
|
1,064,569
|
|
43,809
|
|
ICICI Bank Ltd.
|
|
658,100
|
|
12,068
|
|
IndusInd Bank Ltd.
|
|
3,434,700
|
|
15,060
|
|
Punjab National Bank
Ltd. (b)
|
|
181,000
|
|
4,333
|
|
State Bank of India
|
|
103,190
|
|
5,083
|
|
State Bank of India GDR
|
|
42,856
|
|
4,248
|
|
Yes Bank Ltd.
|
|
1,837,132
|
|
10,516
|
|
|
|
|
|
101,586
|
|
Construction &
Engineering (5.4%)
|
|
|
|
|
|
Gammon India Ltd.
|
|
2,160,800
|
|
10,015
|
|
Hindustan Construction
Co.
|
|
2,207,700
|
|
5,586
|
|
Larsen &
Toubro Ltd.
|
|
374,540
|
|
14,526
|
|
|
|
|
|
30,127
|
|
Containers &
Packaging (1.1%)
|
|
|
|
|
|
Ess Dee Aluminium Ltd.
|
|
549,519
|
|
6,075
|
|
|
|
|
|
|
|
Diversified
Financial Services (1.8%)
|
|
|
|
|
|
Rural Electrification
Corp. Ltd.
|
|
1,494,977
|
|
9,737
|
|
|
|
|
|
|
|
Electric
Utilities (5.2%)
|
|
|
|
|
|
KSK Energy Ventures
Ltd. (a)
|
|
2,948,000
|
|
10,729
|
|
NHPC Ltd. (a)
|
|
5,401,620
|
|
3,637
|
|
Reliance Infrastructure
Ltd.
|
|
321,000
|
|
8,211
|
|
Torrent Power Ltd.
|
|
838,000
|
|
5,943
|
|
|
|
|
|
28,520
|
|
Electrical
Equipment (2.4%)
|
|
|
|
|
|
Bharat Heavy
Electricals Ltd.
|
|
251,628
|
|
13,254
|
|
|
|
|
|
|
|
Food
Products (5.1%)
|
|
|
|
|
|
KS Oils Ltd.
|
|
4,394,323
|
|
5,494
|
|
McLeod Russel India
Ltd.
|
|
1,828,000
|
|
7,809
|
|
Nestle India Ltd.
|
|
160,884
|
|
9,944
|
|
Shree Renuka Sugars
Ltd.
|
|
3,474,325
|
|
5,024
|
|
|
|
|
|
28,271
|
|
Gas
Utilities (0.9%)
|
|
|
|
|
|
Gujarat State Petronet
Ltd.
|
|
2,155,800
|
|
4,714
|
|
|
|
|
|
|
|
Independent
Power Producers & Energy Traders (1.8%)
|
|
|
|
|
|
GMR Infrastructure Ltd.
(a)
|
|
6,218,800
|
|
7,861
|
|
Jaiprakash Power
Ventures Ltd.
|
|
1,470,400
|
|
2,164
|
|
|
|
|
|
10,025
|
|
Information
Technology Services (7.8%)
|
|
|
|
|
|
Infosys Technologies
Ltd.
|
|
453,621
|
|
27,109
|
|
Tata Consultancy
Services Ltd.
|
|
638,761
|
|
10,242
|
|
Wipro Ltd.
|
|
738,513
|
|
6,065
|
|
|
|
|
|
43,416
|
|
Machinery
(8.1%)
|
|
|
|
|
|
AIA Engineering Ltd.
|
|
453,152
|
|
3,702
|
|
Ashok Leyland Ltd.
|
|
6,598,784
|
|
8,938
|
|
Tata Motors Ltd.
|
|
1,804,378
|
|
30,019
|
|
Thermax Ltd.
|
|
140,315
|
|
2,252
|
|
|
|
|
|
44,911
|
|
Media
(6.0%)
|
|
|
|
|
|
Deccan Chronicle
Holdings Ltd.
|
|
4,252,924
|
|
11,187
|
|
Sun TV Network Ltd.
|
|
2,320,840
|
|
21,730
|
|
|
|
|
|
32,917
|
|
Metals &
Mining (5.4%)
|
|
|
|
|
|
Hindalco Industries
Ltd.
|
|
3,680,450
|
|
11,310
|
|
Hindustan Zinc Ltd.
|
|
452,360
|
|
9,340
|
|
Usha Martin Ltd.
|
|
5,223,700
|
|
9,333
|
|
|
|
|
|
29,983
|
|
Oil,
Gas & Consumable Fuels (5.9%)
|
|
|
|
|
|
Reliance Industries
Ltd.
|
|
1,408,010
|
|
32,807
|
|
|
|
|
|
|
|
Pharmaceuticals
(9.6%)
|
|
|
|
|
|
Aurobindo Pharma Ltd.
|
|
452,755
|
|
8,821
|
|
Dr. Reddys
Laboratories Ltd.
|
|
832,907
|
|
25,794
|
|
Glenmark
Pharmaceuticals Ltd.
|
|
2,576,100
|
|
14,868
|
|
Ranbaxy Laboratories
Ltd. (a)
|
|
372,333
|
|
3,664
|
|
|
|
|
|
53,147
|
|
|
|
|
|
|
|
|
6
|
The accompanying notes
are an integral part of the financial statements.
|
|
Morgan Stanley India Investment Fund, Inc.
June 30, 2010 (unaudited)
Portfolio of Investments (contd)
|
|
|
|
Value
|
|
|
|
Shares
|
|
(000)
|
|
Real
Estate Management and Development (0.9%)
|
|
|
|
|
|
Phoenix Mills Ltd.
|
|
1,112,831
|
|
$
|
5,177
|
|
|
|
|
|
|
|
Tobacco
(3.9%)
|
|
|
|
|
|
ITC Ltd.
|
|
3,323,200
|
|
21,701
|
|
TOTAL
COMMON STOCKS
(Cost
$444,214)
|
|
|
|
520,029
|
|
SHORT-TERM
INVESTMENT (0.8%)
|
|
|
|
|
|
Investment
Company (0.8%)
|
|
|
|
|
|
Morgan Stanley
Institutional Liquidity Funds Money Market Portfolio Institutional
Class (d)
(Cost $4,171)
|
|
4,170,918
|
|
4,171
|
|
TOTAL
INVESTMENTS (94.8%)
(Cost $448,385) (e)
|
|
|
|
524,200
|
|
Other
Assets In Excess Of Liabilities (5.2%)
|
|
|
|
28,903
|
|
Net
Assets (100.0%)
|
|
|
|
$
|
553,103
|
|
(a)
|
Non-income producing security.
|
(b)
|
At June 30, 2010, the Fund held $10,802,000 of
fair valued securities, representing less than 0.05% of net assets. These
securities have been fair valued as determined in good faith under procedures
established by and under the general supervision of the Funds Directors.
|
(c)
|
Security has been deemed illiquid at June 30,
2010.
|
(d)
|
See Note G within the Notes to Financial Statements
regarding investment in Morgan Stanley Institutional Liquidity Funds Money
Market Portfolio Institutional Class.
|
(e)
|
The approximate market value and percentage of total
investments, $515,781,000 and 98.4%, respectively, represent the securities
that have been fair valued under the fair valuation policy for international
investments as described in Note A-1 within the Notes to Financial
Statements.
|
GDR
|
Global Depositary Receipt
|
Fair Value Measurement Information:
The following is a summary of the inputs used to value
the Funds net assets as of June 30, 2010. (See Note A-5 to the financial
statements for further information regarding fair value measurement.)
|
|
|
|
Level 2
|
|
|
|
|
|
|
|
|
|
Other
|
|
Level 3
|
|
|
|
|
|
Level 1
|
|
significant
|
|
Significant
|
|
|
|
|
|
Quoted
|
|
observable
|
|
unobservable
|
|
|
|
|
|
prices
|
|
inputs
|
|
inputs
|
|
Total
|
|
Investment Type
|
|
(000)
|
|
(000)
|
|
(000)
|
|
(000)
|
|
Common
Stocks
|
|
|
|
|
|
|
|
|
|
Auto Components
|
|
$
|
|
|
$
|
26
|
|
$
|
|
|
$
|
26
|
|
Automobiles
|
|
|
|
15,337
|
|
|
**
|
15,337
|
|
Chemicals
|
|
|
|
8,298
|
|
|
|
8,298
|
|
Commercial Banks
|
|
4,248
|
|
86,536
|
|
10,802
|
|
101,586
|
|
Construction &
Engineering
|
|
|
|
30,127
|
|
|
|
30,127
|
|
Containers & Packaging
|
|
|
|
6,075
|
|
|
|
6,075
|
|
Diversified Financial Services
|
|
|
|
9,737
|
|
|
|
9,737
|
|
Electric Utilities
|
|
|
|
28,520
|
|
|
|
28,520
|
|
Electrical Equipment
|
|
|
|
13,254
|
|
|
|
13,254
|
|
Food Products
|
|
|
|
28,271
|
|
|
|
28,271
|
|
Gas Utilities
|
|
|
|
4,714
|
|
|
|
4,714
|
|
Independent Power Producers &
Energy Traders
|
|
|
|
10,025
|
|
|
|
10,025
|
|
Information Technology Services
|
|
|
|
43,416
|
|
|
|
43,416
|
|
Machinery
|
|
|
|
44,911
|
|
|
|
44,911
|
|
Media
|
|
|
|
32,917
|
|
|
|
32,917
|
|
Metals &
Mining
|
|
|
|
29,983
|
|
|
|
29,983
|
|
Oil, Gas & Consumable
Fuels
|
|
|
|
32,807
|
|
|
|
32,807
|
|
Pharmaceuticals
|
|
|
|
53,147
|
|
|
|
53,147
|
|
Real Estate Management and
Development
|
|
|
|
5,177
|
|
|
|
5,177
|
|
Tobacco
|
|
|
|
21,701
|
|
|
|
21,701
|
|
Total
Common
Stocks
|
|
4,248
|
|
504,979
|
|
10,802
|
**
|
520,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes
are an integral part of the financial statements.
|
7
|
Morgan Stanley India Investment Fund, Inc.
June 30, 2010 (unaudited)
Portfolio of Investments (contd)
|
|
|
|
Level 2
|
|
|
|
|
|
|
|
|
|
Other
|
|
Level 3
|
|
|
|
|
|
Level 1
|
|
significant
|
|
Significant
|
|
|
|
|
|
Quoted
|
|
observable
|
|
unobservable
|
|
|
|
|
|
prices
|
|
inputs
|
|
inputs
|
|
Total
|
|
Investment
Type
|
|
(000)
|
|
(000)
|
|
(000)
|
|
(000)
|
|
Short-Term
Investment
|
|
|
|
|
|
|
|
|
|
Investment Company
|
|
$
|
4,171
|
|
$
|
|
|
$
|
|
|
$
|
4,171
|
|
Total
|
|
$
|
8,419
|
|
$
|
504,979
|
|
$
|
10,802
|
**
|
$
|
524,200
|
|
Transfers between investment levels may occur as the
markets fluctuate and/or the availability of data used in an investments
valuation changes. The Fund recognizes transfers between the Levels as of the
end of the period. As of June 30,2010, the Fund did not have any
significant investments transfer between valuation levels.
The following is a reconciliation of investments in
which significant unobservable inputs (Level 3) were used in determining fair
value:
|
|
Common
|
|
|
|
Stocks
|
|
|
|
(000)
|
|
Balance
as of 12/31/09
|
|
$
|
|
**
|
Accrued
discounts/premiums
|
|
|
|
Realized gain (loss)
|
|
|
|
Change in unrealized
appreciation (depreciation)
|
|
|
|
Net purchases (sales)
|
|
4,333
|
|
Transfers in for Level
3
|
|
6,469
|
|
Transfers out of Level
3
|
|
|
|
Balance
as of 6/30/10
|
|
$
|
10,802
|
**
|
The amount of total
gains (losses) for the period included in earnings attributable to the change
in unrealized gains (losses) relating to assets and liabilities still held at
Level 3 at 6/30/10.
|
|
$
|
|
|
** Includes a security which is valued at zero.
Portfolio
Composition
|
|
Percentage of
|
|
Classification
|
|
Total Investments
|
|
Commercial Banks
|
|
19.4
|
%
|
Pharmaceuticals
|
|
10.1
|
|
Machinery
|
|
8.6
|
|
Information Technology
Services
|
|
8.3
|
|
Media
|
|
6.3
|
|
Oil, Gas &
Consumable Fuels
|
|
6.3
|
|
Construction &
Engineering
|
|
5.7
|
|
Metals &
Mining
|
|
5.7
|
|
Electric Utilities
|
|
5.4
|
|
Food Products
|
|
5.4
|
|
Other*
|
|
18.0
|
|
Short-Term Investment
|
|
0.8
|
|
Total Investments
|
|
100.0
|
%
|
* Industries representing
less than 5% of total investments.
8
|
The accompanying notes
are an integral part of the financial statements.
|
|
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010
Financial Statements
Statement of Assets and Liabilities
|
|
June 30, 2010
|
|
|
|
(unaudited)
|
|
|
|
(000)
|
|
Assets:
|
|
|
|
Investments in
Securities of Unaffiliated Issuers, at Value (Cost $444,214)
|
|
$
|
520,029
|
|
Investment in Security
of Affiliated Issuer, at Value (Cost $4,171)
|
|
4,171
|
|
Total Investments in
Securities, at Value (Cost $448,385)
|
|
524,200
|
|
Foreign Currency, at
Value (Cost $25,027)
|
|
24,877
|
|
Cash
|
|
5
|
|
Receivable for
Investments Sold
|
|
4,143
|
|
Dividends Receivable
|
|
1,848
|
|
Capital Gain Country
Tax Receivable
|
|
226
|
|
Receivable from
Affiliate
|
|
1
|
|
Other Assets
|
|
18
|
|
Total
Assets
|
|
555,318
|
|
Liabilities:
|
|
|
|
Payable for Investments
Purchased
|
|
1,179
|
|
Payable for Investment
Advisory Fees
|
|
482
|
|
Payable for Custodian
Fees
|
|
275
|
|
Payable for Directors
Fees and Expenses
|
|
143
|
|
Payable for
Professional Fees
|
|
119
|
|
Payable for
Administration Fees
|
|
16
|
|
Payable for Transfer
Agent Fees
|
|
1
|
|
Other Liabilities
|
|
|
@
|
Total
Liabilities
|
|
2,215
|
|
Net
Assets Applicable to 22,330,895 Issued and Outstanding $.01 Par Value Shares
(100,000,000
Shares Authorized)
|
|
$
|
553,103
|
|
Net
Asset Value Per Share
|
|
$
|
24.77
|
|
Net
Assets Consist of:
|
|
|
|
Common Stock
|
|
$
|
223
|
|
Paid-in-Capital
|
|
455,482
|
|
Undistributed Net
Investment Income
|
|
83
|
|
Accumulated Net
Realized Gain
|
|
22,042
|
|
Unrealized Appreciation
(Depreciation) on:
|
|
|
|
Investments
|
|
75,406
|
|
Foreign Currency
Translations
|
|
(133
|
)
|
Net
Assets
|
|
$
|
553,103
|
|
@ Amount is less than
$500.
|
The accompanying notes
are an integral part of the financial statements.
|
9
|
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010
Financial Statements (contd)
Statement of Operations
|
|
Six Months Ended
|
|
|
|
June 30, 2010
|
|
|
|
(unaudited)
|
|
|
|
(000)
|
|
Investment
Income:
|
|
|
|
Dividends from
Securities of Unaffiliated Issuers
|
|
$
|
3,859
|
|
Dividends from Security
of Affiliated Issuer
|
|
1
|
|
Interest from
Securities of Unaffiliated Issuers
|
|
20
|
|
Total
Investment Income
|
|
3,880
|
|
Expenses:
|
|
|
|
Investment Advisory
Fees (Note B)
|
|
2,966
|
|
Custodian Fees (Note F)
|
|
431
|
|
Administration Fees
(Note C)
|
|
216
|
|
Professional Fees
|
|
119
|
|
Directors Fees and
Expenses
|
|
56
|
|
Stockholder Reporting
Expenses
|
|
21
|
|
Stockholder Servicing
Agent Fees
|
|
4
|
|
Other Expenses
|
|
7
|
|
Total
Expenses
|
|
3,820
|
|
Waiver of
Administration Fees (Note C)
|
|
(128
|
)
|
Rebate from Morgan
Stanley Affiliate (Note G)
|
|
(1
|
)
|
Net
Expenses
|
|
3,691
|
|
Net
Investment Income
|
|
189
|
|
Realized
Gain (Loss):
|
|
|
|
Investments Sold
|
|
50,577
|
|
Foreign Currency
Exchange Contracts
|
|
969
|
|
Foreign Currency
Transactions
|
|
(305
|
)
|
Net
Realized Gain
|
|
51,241
|
|
Change
in Unrealized Appreciation (Depreciation):
|
|
|
|
Investments
|
|
(28,246
|
)
|
Foreign Currency
Translations
|
|
(244
|
)
|
Change
in Unrealized Appreciation (Depreciation)
|
|
(28,490
|
)
|
Net
Realized Gain and Change in Unrealized Appreciation (Depreciation)
|
|
22,751
|
|
Net
Increase in Net Assets Resulting from Operations
|
|
$
|
22,940
|
|
10
|
The accompanying notes
are an integral part of the financial statements.
|
|
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010
Financial Statements (contd)
Statements of Changes in Net Assets
|
|
Six Months Ended
|
|
Year Ended
|
|
|
|
June 30, 2010
|
|
December 31,
|
|
|
|
(unaudited)
|
|
2009
|
|
|
|
(000)
|
|
(000)
|
|
Increase
(Decrease) in Net Assets:
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
Net Investment Income
(Loss)
|
|
$
|
189
|
|
$
|
(775
|
)
|
Net Realized Gain
|
|
51,241
|
|
15,801
|
|
Net Change in
Unrealized Appreciation (Depreciation)
|
|
(28,490
|
)
|
207,049
|
|
Net
Increase in Net Assets Resulting from Operations
|
|
22,940
|
|
222,075
|
|
Capital Share
Transactions:
|
|
|
|
|
|
Common Stock Issued
Through Rights Offering (2,674,213 shares, net of expenses of $275,000)
|
|
|
|
50,856
|
|
Reinvestment of
Distributions (90,570 shares)
|
|
|
|
1,163
|
|
Expenses Recouped from
the 2009 Rights Offering
|
|
48
|
|
|
|
Net
Increase in Net Assets Resulting from Capital Share Transactions
|
|
48
|
|
52,019
|
|
Total
Increase
|
|
22,988
|
|
274,094
|
|
Net
Assets:
|
|
|
|
|
|
Beginning of Period
|
|
530,115
|
|
256,021
|
|
End of
Period (Including Undistributed Net Investment Income (Loss) of $83 and
$(106))
|
|
$
|
553,103
|
|
$
|
530,115
|
|
|
The accompanying notes
are an integral part of the financial statements.
|
11
|
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010
Financial Highlights
Selected Per
Share Data and Ratios
|
|
Six Months
Ended June 30,
|
|
Year Ended December 31,
|
|
|
|
2010 (unaudited)
|
|
2009
|
|
2008
|
|
2007
|
|
2006
|
|
2005
|
|
Net
Asset Value, Beginning of Period
|
|
$
|
23.74
|
|
$
|
13.08
|
|
$
|
56.81
|
|
$
|
46.29
|
|
$
|
37.33
|
|
$
|
29.09
|
|
Net Investment Income
(Loss)
|
|
0.01
|
|
(0.04
|
)
|
(0.16
|
)
|
(0.18
|
)
|
(0.06
|
)
|
0.06
|
|
Net Realized and
Unrealized Gain (Loss) on Investments
|
|
1.02
|
|
10.90
|
|
(33.18
|
)
|
27.38
|
|
14.32
|
|
12.18
|
|
Total from Investment
Operations
|
|
1.03
|
|
10.86
|
|
(33.34
|
)
|
27.20
|
|
14.26
|
|
12.24
|
|
Distributions from
and/or in excess of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
|
|
|
(0.20
|
)
|
(0.16
|
)
|
|
|
(0.28
|
)
|
Net Realized Gain
|
|
|
|
|
|
(10.19
|
)
|
(16.64
|
)
|
(5.30
|
)
|
(3.60
|
)
|
Total Distributions
|
|
|
|
|
|
(10.39
|
)
|
(16.80
|
)
|
(5.30
|
)
|
(3.88
|
)
|
Dilutive Effect of
Shares Issued through Rights Offering and Offering Costs
|
|
|
|
(0.20
|
)
|
|
|
|
|
|
|
(0.12
|
)
|
Anti-Dilutive Effect of
Share Repurchase Program
|
|
|
|
|
|
0.00
|
|
0.12
|
|
|
|
|
|
Net
Asset Value, End of Period
|
|
$
|
24.77
|
|
$
|
23.74
|
|
$
|
13.08
|
|
$
|
56.81
|
|
$
|
46.29
|
|
$
|
37.33
|
|
Per
Share Market Value, End of Period
|
|
$
|
22.16
|
|
$
|
22.61
|
|
$
|
12.50
|
|
$
|
54.89
|
|
$
|
50.82
|
|
$
|
37.35
|
|
TOTAL
INVESTMENT RETURN:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
(1.99
|
)%#
|
80.88
|
%
|
(64.72
|
)%
|
45.29
|
%
|
51.73
|
%
|
32.57
|
%
|
Net Asset Value(1)
|
|
4.34
|
%#
|
81.50
|
%
|
(64.33
|
)%
|
65.09
|
%
|
38.28
|
%
|
41.02
|
%
|
RATIOS,
SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Assets, End of Period (Thousands)
|
|
$
|
553,103
|
|
$
|
530,115
|
|
$
|
256,021
|
|
$
|
1,108,419
|
|
$
|
920,926
|
|
$
|
740,050
|
|
Ratio of Expenses to
Average Net Assets(2)
|
|
1.36%
|
+*
|
1.42%
|
+
|
1.46%
|
+
|
1.33%
|
+
|
1.35
|
%
|
1.38
|
%
|
Ratio of Net Investment
Income (Loss) to Average Net Assets(2)
|
|
0.08%
|
+*
|
(0.21)
|
%+
|
(0.51)
|
%+
|
(0.33)
|
%+
|
(0.13
|
)%
|
0.17
|
%
|
Ratio of Rebate from
Morgan Stanley Affiliates to Average Net Assets
|
|
0.00
|
%§*
|
0.00
|
%§
|
0.00
|
%§
|
0.00
|
%§
|
N/A
|
|
N/A
|
|
Portfolio Turnover Rate
|
|
35
|
%#
|
91
|
%
|
60
|
%
|
60
|
%
|
34
|
%
|
32
|
%
|
(2) Supplemental
Information on the Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios Before Expenses
Waived:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of Expenses to
Average Net Assets
|
|
1.41%
|
+*
|
1.47%
|
+
|
1.51%
|
+
|
1.39%
|
+
|
1.40
|
%
|
1.43
|
%
|
Ratio of Net Investment
Income (Loss) to Average Net Assets
|
|
0.03%
|
+*
|
(0.26)
|
%+
|
(0.56)
|
%+
|
(0.39)
|
%+
|
(0.18
|
)%
|
0.12
|
%
|
(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 stockholders 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.
|
|
|
Per share amount is based on average shares
outstanding.
|
|
|
Amount is less than $0.005 per share.
|
+
|
|
The Ratios of Expenses and Net Investment Income
(Loss) reflect the rebate of certain Fund expenses in connection with the
investments in Morgan Stanley affiliates during the period. The effect of the
rebate on the ratios is disclosed in the above table as Ratio of Rebate from
Morgan Stanley Affiliates to Average Net Assets.
|
§
|
|
Amount is less than 0.005% .
|
#
|
|
Not annualized.
|
*
|
|
Annualized.
|
12
|
The accompanying notes
are an integral part of the financial statements.
|
|
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
The 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 1940 Act). The Funds investment objective is long-term capital
appreciation through investments primarily in equity securities of Indian
Issuers.
A. Significant
Accounting Policies:
The following significant accounting policies
are in conformity with U.S. generally accepted accounting principles. Such
policies are consistently followed by the Fund in the preparation of its
financial statements. U.S. 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:
Securities listed on a foreign exchange are valued
at their closing price except as noted below. Unlisted securities and listed
securities not traded on the valuation date for which market quotations are
readily available are valued at the mean between the current bid and asked
prices obtained from reputable brokers. Equity securities listed on a U.S.
exchange are valued at the latest quoted sales price on the valuation date.
Equity securities listed or traded on NASDAQ, for which market quotations are
available, are valued at the NASDAQ Official Closing Price. Debt securities
purchased with remaining maturities of 60 days or less are valued at amortized
cost, unless the Board of Directors (the Directors) determine such valuation
does not reflect the securities market value, in which case these securities
will be valued at their fair value as determined by the Directors.
All other securities and
investments for which market values are not readily available, including
restricted securities, and those securities for which it is inappropriate to
determine prices in accordance with the aforementioned procedures, are valued
at fair value as determined in good faith under procedures adopted by the
Directors, although the actual calculations may be done by others. Factors
considered in making this determination may include, but are not limited to,
information obtained by contacting the issuer, analysts, or the appropriate
stock exchange (for exchange-traded securities), analysis of the issuers
financial statements or other available documents and, if necessary, available
information concerning other securities in similar circumstances.
Most foreign markets close
before the New York Stock Exchange (NYSE). Occasionally, developments that
could affect the closing prices of securities and other assets may occur
between the times at which valuations of such securities are determined (that
is, close of the foreign market on which the securities trade) and the close of
business on the NYSE. If these developments are expected to materially affect
the value of the securities, the valuations may be adjusted to reflect the
estimated fair value as of the close of the NYSE, as determined in good faith
under procedures established by the Directors.
2.
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 currencies
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 rates 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
13
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
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) on investments in securities 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 (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
Funds 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 Assets and Liabilities. The
change in unrealized currency gains (losses) on foreign currency translations
for the period is reflected in the Statement of Operations.
A significant portion of the
Funds 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, in certain cases, only
through physical delivery, which may cause the Fund to experience delays or
other difficulties in effecting transactions.
3.
Derivatives:
The Fund may use derivative instruments for a variety of purposes,
including hedging, risk management, portfolio management or to earn income.
Derivatives are financial instruments whose value is based on the value of
another underlying asset, interest rate, index or financial instrument. A
derivative instrument often has risks similar to its underlying instrument and
may have additional risks, including imperfect correlation between the value of
the derivative and the underlying instrument, risks of default by the other
party to certain transactions, magnification of losses incurred due to changes
in the market value of the securities, instruments, indices or interest rates
to which they relate, and risks that the transactions may not be liquid. The
use of derivatives involves risks that are different from, and possibly greater
than, the risks associated with other portfolio investments. Derivatives may
involve the use of highly specialized instruments that require investment
techniques and risk analyses different from those associated with other portfolio
investments. All of the Funds holdings, including derivative instruments, are
marked to market each day with the change in value reflected in unrealized
appreciation (depreciation). Upon disposition, a realized gain or loss is
generally recognized.
Certain derivative
transactions may give rise to a form of leverage. Leverage associated with
derivative transactions may cause the Fund to liquidate portfolio positions
when it may not be advantageous to do so to satisfy its obligations or to meet
earmarking or segregation requirements, pursuant to applicable SEC rules and
regulations, or may cause the Fund to be more volatile than if the Fund had not
been leveraged. Although the Adviser and/or Sub-Advisor seek to use derivatives
to further the Funds investment objectives, there is no assurance that the use
of
14
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
derivatives will achieve
this result.
Following is a description
of the derivative instruments and techniques that the Fund may use and their
associated risks:
Futures:
In respect to
futures, the Fund is subject to equity risk, interest rate risk and foreign
currency exchange risk in the normal course of pursuing its investment
objectives. A futures contract is a standardized agreement between two parties
to buy or sell a specific quantity of an underlying instrument at a specific
price at a specific future time. The value of a futures contract tends to
increase and decrease in tandem with the value of the underlying instrument.
Futures contracts are bilateral agreements, with both the purchaser and the
seller equally obligated to complete the transaction. Depending on the terms of
the particular contract, futures contracts are settled through either physical
delivery of the underlying instrument on the settlement date or by payment of a
cash settlement amount on the settlement date. During the period the futures
contract is open, payments are received from or made to the broker based upon
changes in the value of the contract (the variation margin). The risk of loss
associated with a futures contract is in excess of the variation margin
reflected as part of Due from (to) Broker on the Statement of Assets and
Liabilities. A decision as to whether, when and how to use futures involves the
exercise of skill and judgment and even a well conceived futures transaction
may be unsuccessful because of market behavior or unexpected events. In
addition to the derivatives risks discussed above, the prices of futures can be
highly volatile, using futures can lower total return, and the potential loss
from futures can exceed the Funds initial investment in such contracts.
P-Notes:
P-notes are
participation interest notes that are issued by banks or broker-dealers and are
designed to offer a return linked to a particular underlying equity, debt,
currency or market. When the P-note matures, the issuer will pay to, or receive
from, the purchaser the difference between the nominal value of the underlying
instrument at the time of purchase and that instruments value at maturity.
Investments in P-notes involve the same risks associated with a direct
investment in the underlying foreign companies or foreign securities markets
that they seek to replicate. In addition, there can be no assurance that the
trading price of P-notes will equal the underlying value of the foreign
companies or foreign securities markets that they seek to replicate. There is
also counterparty risk associated with these investments because the Fund is
relying on the creditworthiness of such counterparty and has no rights under a
participation note against the issuer of the underlying security.
Foreign
Currency Forward Contracts:
In connection with its
investments in foreign securities, the Fund also may enter into contracts with
banks, brokers or dealers to purchase or sell securities or foreign currencies
at a future date (forward contracts). A foreign currency forward contract is
a negotiated agreement between the contracting parties to exchange a specified
amount of currency at a specified future time at a specified rate. The rate can
be higher or lower than the spot rate between the currencies that are the
subject of the contract. Forward foreign currency exchange contracts may be
used to protect against uncertainty in the level of future foreign currency
exchange rates or to gain or modify exposure to a particular currency. In
addition, the Fund may use cross currency hedging or proxy hedging with respect
to currencies in which the Fund has or expects to have portfolio or currency
exposure. Cross currency hedges involve the sale of one currency against the
positive exposure to a different currency and may be used for hedging purposes
or to establish an active exposure to the exchange rate between any two
currencies. A currency exchange contract is marked-to-market daily and the
change in market value is recorded by the Fund as
15
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
unrealized gain or loss. The
Fund records realized gains (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. Hedging the Funds currency risks involves the
risk of mismatching the Funds objectives under a forward or futures contract
with the value of securities denominated in a particular currency. Furthermore,
such transactions reduce or preclude the opportunity for gain if the value of
the currency should move in the direction opposite to the position taken. There
is an additional risk to the effect that currency contracts create exposure to
currencies in which the Funds securities are not denominated. Unanticipated
changes in currency prices may result in poorer overall performance for the
Fund than if it had not entered into such contracts.
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 non-performance 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 ask 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 adopted the
provisions of FASB ASC 815, Derivatives and Hedging: Overall (ASC 815)
(formerly known as SFAS 161). ASC 815 is intended to improve financial
reporting about derivative instruments by requiring enhanced disclosures to
enable investors to better understand how and why the Fund uses derivative
instruments, how these derivative instruments are accounted for and their
effects on the Funds financial position and results of operations.
The following table sets
forth by primary risk exposure the Funds realized gains (losses) by type of
derivative contract for the six months ended June 30, 2010 in accordance
with ASC 815.
Realized Gain (Loss)
|
|
|
|
Derivative
|
|
Value
|
|
Primary Risk Exposure
|
|
Type
|
|
(000)
|
|
Foreign
Currency Contracts Risk
|
|
Foreign
Currency Exchange Contracts
|
|
$
|
969
|
|
|
|
|
|
|
|
|
4.
Restricted
Securities:
The Fund may invest in unregistered or otherwise
restricted securities. The term restricted securities refers to securities that
are unregistered or are held by control persons of the issuer and securities
that are subject to contractual restrictions on their resale. As a result,
restricted securities may be more difficult to value and the Fund may have
difficulty disposing of such assets either in a timely manner or for a
reasonable price. In order to dispose of an unregistered security, the Fund,
where it has contractual rights to do so, may have to cause such security to be
registered. A considerable period may elapse between the time the decision is
made to sell the security and the time the security is registered so that the
Fund could sell it. Contractual restrictions on the resale of securities vary
in length and scope and are generally the result of a negotiation between the
issuer and acquirer of the securities. The Fund would, in either case, bear
market risks during that period.
5.
Fair Value
Measurement:
In accordance with FASB ASC 820 Fair Value
Measurements and Disclosure (ASC 820) (formerly known as SFAS 157), fair
value is defined as the price that the Fund would receive to sell an investment
or pay to transfer a liability in a timely
16
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
transaction with an
independent buyer in the principal market, or in the absence of a principal
market the most advantageous market for the investment or liability. ASC 820
establishes a three-tier hierarchy to distinguish between (1) inputs that
reflect the assumptions market participants would use in valuing an asset or
liability developed based on market data obtained from sources independent of
the reporting entity (observable inputs) and (2) inputs that reflect the
reporting entitys own assumptions about the assumptions market participants
would use in valuing an asset or liability developed based on the best
information available in the circumstances (unobservable inputs) and to
establish classification of fair value measurements for disclosure purposes.
Various inputs are used in determining the value of the Funds investments. The
inputs are summarized in the three broad levels listed below.
·
Level 1 quoted prices in
active markets for identical securities
·
Level 2 other significant
observable inputs (including quoted prices for similar investments, interest
rates, prepayment speeds, credit risk, etc.)
·
Level 3 significant
unobservable inputs (including the Funds own assumptions in determining the
fair value of investments)
The inputs or methodology
used for valuing securities are not necessarily an indication of the risk
associated with investing in those securities.
On January 21, 2010,
the Financial Accounting Standards Board issued Accounting Standards Update
(ASU) 2010-06. The ASU amends Accounting Standards Codification 820 to add
new requirements for disclosures about transfers into and out of Levels 1 and 2
and separate disclosures about purchases, sales, issuances, and settlements
relating to Level 3 measurements. It also clarifies existing fair value
disclosures about the level of disaggregation and about inputs and valuation
techniques in Level 2 and Level 3 fair value measurements. The application of
ASU 2010-06 is required for fiscal years and interim periods beginning after
December 15, 2009, except for disclosures about purchases, sales,
issuances, and settlements relating to Level 3 measurements, which are required
for fiscal years beginning after December 15, 2010 and for interim periods
within those fiscal years.
6.
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 Assets and Liabilities Upon allotment of the securities, this amount plus
any remaining amount of issue price is recorded as cost of investments.
Realized gains (losses) on the sale of investment securities are determined on
the specific identified cost basis. Interest income is recognized on the
accrual basis. Dividend income and distributions are recorded on the
ex-dividend date (except certain dividends which may be recorded as soon as the
Fund is informed of such dividends) net of applicable withholding taxes, if
any.
B. Investment Advisory Fees:
Morgan Stanley
Investment Management Inc. (the U.S. Adviser or MS Investment Management)
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 Funds average weekly net assets.
The U.S. Adviser has entered
into a Sub-Advisory Agreement with Morgan Stanley Investment Management Company
(the Sub-Adviser), a wholly-owned subsidiary of Morgan Stanley.
17
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
The Sub-Adviser provides the
Fund with investment advisory services subject to the overall supervision of
the U.S. Adviser and the Funds Officers and Directors. The Adviser pays the
Sub-Adviser on a monthly basis a portion of the net advisory fees the U.S.
Adviser receives from the Fund.
C. Administration Fees:
MS Investment
Management also serves as Administrator to the Fund pursuant to an Administration
Agreement. Under the Administration Agreement, the administration fee is 0.08%
of the Funds average weekly net assets. MS Investment Management has agreed to
limit the administration fee through a waiver so that it will be no greater
than the previous administration fee of 0.02435% of the Funds average weekly
net assets plus $24,000 per annum. This waiver is voluntary and may be
terminated at any time. For the six months ended June 30, 2010,
approximately $128,000 of administration fees were waived pursuant to this
arrangement. Under a sub-administration agreement between the Administrator and
State Street Bank and Trust Company (State Street), State Street provides
certain administrative services to the Fund. For such services, the Administrator
pays State Street a portion of the fee the Administrator receives from the
Fund. Administration costs (including out-of-pocket expenses) incurred in the
ordinary course of providing services under the administration agreement,
except pricing services and extraordinary expenses, are covered under the
administration fee. Prior to May 24, 2010, JPMorgan Investor Services Co.
(JPMIS) provided certain administrative services to the Fund. For such
services, the Administrator paid JPMIS a portion of the fee the administrator
received from the Fund.
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. Custodian Fees:
State Street
Bank and Trust Company (the Custodian) and its affiliates serve as Custodian
for the Fund. The Custodian holds cash, securities, and other assets of the
Fund as required by the 1940 Act. Custody fees are payable monthly based on
assets held in custody, investment purchases and sales activity and account
maintenance fees, plus reimbursement for certain out-of-pocket expenses. Prior
to May 24, 2010, JPMorgan Chase Bank, N.A. served as custodian for the
Fund in accordance with the custodian agreement.
The Fund has entered into an
arrangement with its Custodian whereby credits realized on uninvested cash
balances were used to offset a portion of the Funds expenses. If applicable,
these custodian credits are shown as Expense Offset in the Statement of
Operations.
E. Directors Fees and Expenses:
The Fund pays
each of its Directors an annual fee of $15,000. Each non-Mauritian Independent
Director will receive a fee of $10,000 for each meeting such Director attends
in Mauritius.
F. Federal Income Taxes:
It is the
Funds intention to continue to qualify as a regulated investment company and
distribute all of its taxable income. Accordingly, no provision for Federal
income taxes is required in the financial statements. Dividend income and
distributions to stockholders are recorded on the ex-dividend date.
Effective October 1,
2004 there is no capital gains tax in India for long-term investments in
specified securities executed on a recognized stock exchange on which
securities transaction tax is paid. The current rate of capital gains tax for
short-term investments is 15.836% for transactions conducted through a
recognized stock exchange and on which securities transaction tax is paid. The
Fund invests in India through a registered branch office established in
Mauritius and, as a result, obtains the benefits under the double taxation
treaty between Mauritius and India (Treaty). To obtain benefits under the
Treaty, the
18
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
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 dividend income from Indian companies are exempt from Indian
income tax. The Fund currently is subject to and accrues Indian tax on interest
earned on Indian securities at 21.115%. The Treaty benefits accorded to foreign
investors were challenged by a nongovernmental organization and the matter was
litigated before Indias Supreme Court (the highest court in India). In October 2003, Indias
Supreme Court upheld the validity of Treaty benefits accorded to foreign
investors on the basis of a certificate of residence issued by Mauritian
authorities (such as the one obtained by the Fund).
FASB ASC 740-10 Income Taxes
Overall (formerly known as FIN 48) sets forth a minimum threshold for
financial statement recognition of the benefit of a tax position taken or
expected to be taken in a tax return. Management has concluded there are no
significant uncertain tax positions that would require recognition in the
financial statements. If applicable, the Fund recognizes interest accrued
related to unrecognized tax benefits in Interest Expense and penalties in
Other expenses on the Statement of Operations. The Fund files tax returns
with the U.S. Internal Revenue Service, New York and various states. Generally,
each of the tax years in the four year period ended December 31, 2009,
remains subject to examination by taxing authorities.
The tax character of
distributions paid may differ from the character of distributions shown on the
Statements of Changes in Net Assets due to short-term capital gains being
treated as ordinary income for tax purposes. The tax character of distributions
paid during fiscal 2009 and 2008 was as follows:
2009 Distributiions
|
|
2008 Distributiions
|
|
Paid From:
|
|
Paid From:
|
|
(000)
|
|
(000)
|
|
|
|
Long-Term
|
|
|
|
Long-Term
|
|
Ordinary
|
|
Capital
|
|
Ordinary
|
|
Capital
|
|
Income
|
|
Gain
|
|
Income
|
|
Gain
|
|
$
|
|
|
$
|
|
|
$
|
21,864
|
|
$
|
181,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 U.S.
generally accepted accounting principles. These book/tax differences are
considered either temporary or permanent in nature.
Temporary differences are
attributable to differing book and tax treatments for the timing of the
recognition of gains (losses) on certain investment transactions and the timing
of the deductibility of certain expenses.
Permanent differences,
primarily due to differing treatments of gains (losses) related to foreign
currency transactions and net operating loss, resulted in the following
reclassifications among the components of net assets at December 31, 2009:
Undistributed
|
|
|
|
|
|
(Distributions in
|
|
|
|
|
|
Excess of)
|
|
Accumulated
|
|
|
|
Net Investment
|
|
Net Realized
|
|
Paid-in
|
|
Income (Loss)
|
|
Gain (Loss)
|
|
Capital
|
|
(000)
|
|
(000)
|
|
(000)
|
|
$
|
835
|
|
$
|
(489
|
)
|
$
|
(346
|
)
|
|
|
|
|
|
|
|
|
|
At December 31, 2009,
the Fund had no distributable earnings on a tax basis.
At June 30, 2010, the
U.S. Federal income tax cost basis of investments was approximately
$448,385,000 and, accordingly, net unrealized appreciation for U.S. Federal
income tax purposes
19
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
was $75,815,000 of which
$97,946,000 related to appreciated securities and $22,131,000 related to
depreciated securities.
At December 31, 2009,
the Fund had a capital loss carryforward for U.S. Federal income tax purposes
of approximately $22,992,000 to offset against future capital gains which will
expire on December 31, 2017.
To the extent that capital
loss carryforwards are used to offset any future capital gains realized during
the carryforward period as provided by U.S. Federal income tax regulations, no
capital gains tax liability will be incurred by the Fund for gains realized and
not distributed. To the extent that capital gains are offset, such gains will
not be distributed to the stockholders.
G.
Security
Transactions and Transactions with Affiliates:
The Fund invests in the
Institutional Class of the Morgan Stanley Institutional Liquidity Funds
Money Market Portfolio (the Liquidity Funds), an open-end management
investment company managed by the Adviser. Investment Advisory fees paid by the
Fund are reduced by an amount equal to its pro-rata share of the advisory and
administration fees paid by the Fund due to its investment in the Liquidity
Funds. For the six months ended June 30, 2010, advisory fees paid were
reduced by approximately $1,000 relating to the Funds investment in the
Liquidity Funds.
A summary of the Funds
transactions in shares of the Liquidity Funds during the six months ended June 30,
2010 is as follows:
Market
|
|
|
|
|
|
|
|
Market
|
|
Value
|
|
|
|
|
|
|
|
Value
|
|
December 31,
|
|
Purchases
|
|
Sales
|
|
Dividend
|
|
June 30,
|
|
2009
|
|
at Cost
|
|
Proceeds
|
|
Income
|
|
2010
|
|
(000)
|
|
(000)
|
|
(000)
|
|
(000)
|
|
(000)
|
|
$
|
2,296
|
|
$
|
20,611
|
|
$
|
18,736
|
|
$
|
1
|
|
$
|
4,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the six months ended
June 30, 2010, the Fund made purchases and sales totaling approximately
$183,376,000 and $190,410,000, respectively, of investment securities other
than long-term U.S. Government securities and short-term investments.
During the six months ended
June 30, 2010, the Fund incurred approximately $22,000 and $16,000 in
brokerage commissions with Morgan Stanley & Co. Incorporated and
Citigroup, Inc., respectively, affiliated broker/dealers.
H. Other:
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 Funds
ability to hedge its currency risk is limited and accordingly, the Fund may be
exposed to currency devaluation and other exchange rate fluctuations.
On July 6, 2009, the
Fund commenced a rights offering and issued to stockholders as of June 30,
2009 one right for each share of common stock held. The rights were not
transferable and, consequently, were not listed on any exchange. Four rights
entitled the stockholder to purchase one share of common stock at the
subscription price. The rights entitled stockholders to subscribe for an
aggregate of 4,914,170 shares of the Funds common stock. In addition, the Fund
had the option of issuing additional shares in an amount up to 25% of the
shares that were available in the primary offering, or 1,228,542 shares, for an
aggregate total of 6,142,712 shares. The offer expired on July 22, 2009.
The Fund sold 2,674,213 shares at the subscription price per share of $19.12
(representing the Funds net asset value per share on the expiration date of
the offer). The total proceeds of the rights offering were $51,130,953 and the
Fund incurred costs of approximately $227,000.
On August 10, 1998, the
Fund commenced a share repurchase program for purposes of enhancing stockholder
value and reducing the discount at which the Funds shares trade from their net
asset value. During the year ended June 30, 2010, the Fund did not
repurchase any of its shares. Since the inception of the program, the Fund has
repurchased 8,941,882 of its shares at an average discount of 26.84% 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
20
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
further the accomplishment
of the foregoing objectives, subject to review by the Directors.
I. Supplemental Proxy Information
(unaudited):
On June 16, 2010, an annual meeting of the
Funds stockholders was held for the purpose of voting on the following matter,
the results of which were as follows:
Election of Directors by all
stockholders:
Director
|
|
For
|
|
Withheld
|
|
Fergus
Reid
|
|
14,206,067
|
|
1,858,084
|
|
Randy
Takian
|
|
14,279,713
|
|
1,784,438
|
|
J. Subsequent Events:
In accordance
with the provisions set forth in FASB ASC 855 Subsequent Events (formerly
known as SFAS 165), adopted by the Fund as of June 30, 2009, management
has evaluated the possibility of subsequent events existing in the Funds
financial statements.
K. Indemnifications:
The Fund enters
into contracts that contain a variety of indemnifications. The Funds maximum
exposure under these arrangements is unknown. However, the Fund has not had
prior claims or losses pursuant to these contracts and expects the risk of loss
to be remote.
For More
Information About Portfolio Holdings (unaudited)
The Fund provides a complete
schedule of portfolio holdings in its semi-annual and annual reports within 60
days of the end of the Funds second and fourth fiscal quarters. The
semi-annual reports and the annual reports are filed electronically with the
Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR,
respectively. Morgan Stanley also delivers the semi-annual and annual reports
to Fund stockholders and makes these reports available on its public website, www.morganstanley.com/im.
Each Morgan Stanley fund also files a complete schedule of portfolio holdings
with the SEC for the Funds first and third fiscal quarters on Form N-Q.
Morgan Stanley does not deliver the reports for the first and third fiscal
quarters to stockholders, nor are the reports posted to the Morgan Stanley
public website. You may, however, obtain the Form N-Q filings (as well as
the Form N-CSR and N-CSRS filings) by accessing the SECs website,
www.sec.gov. You may also review and copy them at the SECs public reference
room in Washington, DC. Information on the operation of the SECs Public
Reference Room may be obtained by calling the SEC toll free at 1 (800)
SEC-0330. You can also request copies of these materials, upon payment of a
duplicating fee, by electronic request at the SECs e-mail address
(publicinfo@sec.gov) or by writing the public reference section of the SEC,
Washington, DC 20549-0102.
In addition to filing a
complete schedule of portfolio holdings with the SEC each fiscal quarter, the
Fund makes portfolio holdings information available by periodically providing
the information on its public website, www.morganstanley.com/im.
The Fund provides a complete
schedule of portfolio holdings on the public website on a calendar-quarter
basis approximately 31 calendar days after the close of the calendar quarter.
The Fund also provides Top 10 holdings information on the public website
approximately 15 business days following the end of each month. You may obtain
copies of the Funds monthly or calendar-quarter website postings, by calling
toll free 1 (800) 231-2608.
21
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Notes to Financial Statements
(contd)
Proxy
Voting Policy and Procedures and Proxy Voting Record (unaudited)
A copy of (1) the
Funds policies and procedures with respect to the voting of proxies relating
to the Funds portfolio securities; and (2) how the Fund voted proxies
relating to portfolio securities during the most recent twelve-month period
ended June 30, is available without charge, upon request, by calling toll
free 1 (800) 548-7786 or by visiting our website at www.morganstanley.com/im.
This information is also available on the SECs web site at www.sec.gov.
22
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Portfolio Management
The Fund is managed within
the Emerging Markets Equity team. The team consists of portfolio managers and
analysts. Current members of the team jointly and primarily responsible for the
day-to-day management of the Funds Portfolio are James Cheng, a Managing
Director of the Sub-Adviser, and Ruchir Sharma, a Managing Director of the U.S.
Adviser.
Mr. Cheng has been
associated with the Sub-Adviser in an investment management capacity since July 2006
and began managing the Fund in February 2009. Prior to July 2006, Mr. Cheng
worked in an investment management capacity at Invesco Asia Limited, Asia
Strategic Investment Management Limited and Munich Re Asia Capital Management.
Mr. Sharma has been associated with the U.S. Adviser in an investment
management capacity since 1996 and began managing the Fund in January 2001.
23
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
Dividend Reinvestment and Cash
Purchase Plan
Pursuant to the Dividend
Reinvestment and Cash Purchase Plan (the Plan), each stockholder will be deemed
to have elected, unless Computershare Trust Company, N.A. (the Plan Agent) is
otherwise instructed by the stockholder 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 (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 or, 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 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 Agents fees for
the reinvestment of a Distribution will be paid by the Fund. However, each
participants account will be charged a pro rata share of brokerage commissions
incurred on any open market purchases effected on such participants behalf. A
participant will also pay brokerage commissions incurred on purchases made by
voluntary cash payments. Although stockholders 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 stockholders,
such as banks, brokers or nominees, that 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 stockholder as representing
the total amount registered in the stockholders name and held for the account
of beneficial owners who are participating in the Plan.
Stockholders 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 stockholders 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 India
Investment Fund, Inc.
Computershare Trust Company,
N.A.
P.O. Box 43078
Providence, Rhode Island
02940-3078
1 (800) 231-2608
24
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
U.S. Privacy Policy
An
Important Notice Concerning Our U.S. Privacy Policy
We are required by federal
law to provide you with a copy of our privacy policy (Policy) annually.
This Policy applies to
current and former individual clients of certain Morgan Stanley closed-end
funds and related companies.
This Policy is not
applicable to partnerships, corporations, trusts or other non-individual
clients or account holders, nor is this Policy applicable to individuals who
are either beneficiaries of a trust for which we serve as trustee or
participants in an employee benefit plan administered or advised by us. This
Policy is, however, applicable to individuals who select us to be a custodian
of securities or assets in individual retirement accounts, 401(k) accounts,
529 Educational Savings Accounts, accounts subject to the Uniform Gifts to
Minors Act, or similar accounts. We may amend this Policy at any time, and will
inform you of any changes to this Policy as required by law.
We Respect
Your Privacy
We appreciate that you have
provided us with your personal financial information and understand your
concerns about safeguarding such information. We strive to maintain the privacy
of such information while we help you achieve your financial objectives. This Policy
describes what non-public personal information we collect about you, how we
collect it, when we may share it with others, and how others may use it. It
discusses the steps you may take to limit our sharing of information about you
with affiliated Morgan Stanley companies (affiliated companies). It also
discloses how you may limit our affiliates use of shared information for
marketing purposes. Throughout this Policy, we refer to the non-public
information that personally identifies you or your accounts as personal
information.
1. What
Personal Information Do We Collect About You?
To better serve you and
manage our business, it is important that we collect and maintain accurate
information about you. We obtain this information from applications and other
forms you submit to us, from your dealings with us, from consumer reporting
agencies, from our websites and from third parties and other sources. For
example:
·
We collect information such
as your name, address, e-mail address, telephone/fax numbers, assets, income
and investment objectives through application forms you submit to us.
·
We may obtain information
about account balances, your use of account(s) and the types of products
and services you prefer to receive from us through your dealings and
transactions with us and other sources.
·
We may obtain information
about your creditworthiness and credit history from consumer reporting
agencies.
·
We may collect background
information from and through third-party vendors to verify representations you
have made and to comply with various regulatory requirements.
·
If you interact with us
through our public and private Web sites, we may collect information that you
provide directly through online communications (such as an e-mail address). We
may also collect information about your Internet service provider, your domain
name, your computers operating system and Web browser, your use of our Web
sites and your product and service preferences, through the use of cookies.
Cookies recognize your computer each time you return to one of our sites, and
help
25
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
U.S. Privacy Policy (contd)
to improve our sites
content and personalize your experience on our sites by, for example,
suggesting offerings that may interest you. Please consult the Terms of Use of
these sites for more details on our use of cookies.
2. When Do
We Disclose Personal Information We Collect About You?
To provide you with the
products and services you request, to better serve you, to manage our business
and as otherwise required or permitted by law, we may disclose personal
information we collect about you to other affiliated companies and to
non-affiliated third parties.
a.
Information We Disclose to Our Affiliated Companies.
In order to
manage your account(s) effectively, including servicing and processing
your transactions, to let you know about products and services offered by us
and affiliated companies, to manage our business, and as otherwise required or
permitted by law, we may disclose personal information about you to other
affiliated companies. Offers for products and services from affiliated
companies are developed under conditions designed to safeguard your personal
information.
b.
Information We Disclose to Third Parties.
We do not disclose personal
information that we collect about you to non-affiliated third parties except to
enable them to provide marketing services on our behalf, to perform joint marketing
agreements with other financial institutions, and as otherwise required or
permitted by law. For example, some instances where we may disclose information
about you to third parties include: for servicing and processing transactions,
to offer our own products and services, to protect against fraud, for
institutional risk control, to respond to judicial process or to perform
services on our behalf. When we share personal information with a
non-affiliated third party, they are required to limit their use of personal
information about you to the particular purpose for which it was shared and
they are not allowed to share personal information about you with others except
to fulfill that limited purpose or as may be required by law.
3. How Do
We Protect The Security and Confidentiality Of Personal Information We Collect
About You?
We maintain physical,
electronic and procedural security measures to help safeguard the personal
information we collect about you. We have internal policies governing the proper
handling of client information. Third parties that provide support or marketing
services on our behalf may also receive personal information about you, and we
require them to adhere to confidentiality standards with respect to such
information.
4. How Can
You Limit Our Sharing Of Certain Personal Information About You With Our
Affiliated Companies For Eligibility Determination?
We respect your privacy and
offer you choices as to whether we share with our affiliated companies personal
information that was collected to determine your eligibility for products and
services such as credit reports and other information that you have provided to
us or that we may obtain from third parties (eligibility information). Please
note that, even if you direct us not to share certain eligibility information
with our affiliated companies, we may still share your personal information,
including eligibility information, with those companies under circumstances
that are permitted under applicable law, such as to process transactions or to
service your
26
Morgan Stanley India Investment
Fund, Inc.
June 30, 2010 (unaudited)
U.S. Privacy Policy (contd)
account. We may also share
certain other types of personal information with affiliated companies such as
your name, address, telephone number, e-mail address and account number(s), and
information about your transactions and experiences with us.
5. How Can
You Limit the Use of Certain Personal Information About You by Our Affiliated
Companies for Marketing?
You may limit our affiliated
companies from using certain personal information about you that we may share
with them for marketing their products or services to you. This information
includes our transactions and other experiences with you such as your assets
and account history. Please note that, even if you choose to limit our
affiliated companies from using certain personal information about you that we
may share with them for marketing their products and services to you, we may
still share such personal information about you with them, including our
transactions and experiences with you, for other purposes as permitted under
applicable law.
6. How Can
You Send Us an Opt-Out Instruction?
If you wish to limit our
sharing of certain personal information about you with our affiliated companies
for eligibility purposes and for our affiliated companies use in marketing
products and services to you as described in this notice, you may do so by:
·
Calling us at (800) 231-2608
MondayFriday between 9a.m.
and 6p.m. (EST)
·
Writing to us at the
following address:
Morgan Stanley Closed-End
Privacy Department
Harborside Financial Center,
Plaza Two, 3rd Floor
Jersey City, NJ 07311
If you choose to write to
us, your written request should include: your name, address, telephone number
and account number(s) to which the opt-out applies and should not be sent
with any other correspondence. In order to process your request, we require
that the request be provided by you directly and not through a third party.
Once you have informed us about your privacy preferences, your opt-out
preference will remain in effect with respect to this Policy (as it may be
amended) until you notify us otherwise. If you are a joint account owner, we will
accept instructions from any one of you and apply those instructions to the
entire account. Please allow approximately 30 days from our receipt of your
opt-out for your instructions to become effective.
Please understand that if
you opt-out, you and any joint account holders may not receive certain Morgan
Stanley or our affiliated companies products and services that could help you
manage your financial resources and achieve your investment objectives.
If you have more than one
account with us or our affiliates, you may receive multiple privacy policies
from us, and would need to follow the directions stated in each particular
policy for each account you have with us.
27
Morgan Stanley India Investment Fund, Inc.
June 30, 2010 (unaudited)
U.S. Privacy Policy (contd)
SPECIAL
NOTICE TO RESIDENTS OF VERMONT
This
section supplements our Policy with respect to our individual clients who have
a Vermont address and supersedes anything to the contrary in the above Policy
with respect to those clients only.
The State of Vermont
requires financial institutions to obtain your consent prior to sharing
personal information that they collect about you with affiliated companies and
non-affiliated third parties other than in certain limited circumstances.
Except as permitted by law, we will not share personal information we collect
about you with non-affiliated third parties or other affiliated companies
unless you provide us with your written consent to share such information
(opt-in).
If you wish to receive
offers for investment products and services offered by or through other
affiliated companies, please notify us in writing at the following address:
Morgan Stanley Closed-End
Privacy Department
Harborside Financial Center,
Plaza Two, 3rd Floor
Jersey City, NJ 07311
Your authorization should
include: your name, address, telephone number and account number(s) to
which the opt-in applies and should not be sent with any other correspondence.
In order to process your authorization, we require that the authorization be
provided by you directly and not through a third-party.
28
Morgan Stanley India Investment
Fund, Inc.
|
|
Directors
|
Officers
|
Gaetan Bouic
|
Stefanie V. Chang Yu
|
Chairman of the Board
|
Vice President
|
|
|
M.J. Marcel Vivian
|
Francis J. Smith
|
Descroizilles
|
Treasurer and Principal Financial
Officer
|
|
|
Joseph J. Kearns
|
Mary Ann Picciotto
|
|
Chief Compliance Officer
|
Ravindranath Santosh
|
|
Kumar Hazareesing
|
Mary E. Mullin
|
|
Secretary
|
Fergus Reid
|
|
|
|
Randy Takian
|
|
Director, President and Principal
Executive Officer
|
|
|
|
Investment
Adviser and Administrator
|
Morgan Stanley
Investment Management Inc.
|
522 Fifth Avenue
|
New York, New York
10036
|
|
Custodian
|
State Street Bank and
Trust Co.
|
One Lincoln Street
|
Boston, MA 02111
|
|
Stockholder
Servicing Agent
|
Computershare Trust
Company, N.A.
|
250 Royall Street
|
Canton, Massachusetts
02021
|
|
Legal
Counsel
|
Dechert LLP
|
1095 Avenue of the
Americas
|
New York, New York
10036
|
|
Independent
Registered Public Accounting Firm
|
Ernst & Young
LLP
|
200 Clarendon Street
|
Boston, Massachusetts
02116
|
|
For additional Fund information, including the
Funds net asset value per share and information regarding the investments
comprising the Funds portfolio, please call toll free 1 (800) 231-2608 or
visit our website at www.morganstanley.com/im. All investments involve risks,
including the possible loss of principal.
|
|
© 2010 Morgan Stanley
|
|
CEIIFSAN
IU10-03076P-Y06/10
|
Item 2. Code
of Ethics.
Not
applicable for semiannual reports.
Item 3. Audit
Committee Financial Expert.
Not
applicable for semiannual reports.
Item
4. Principal Accountant Fees and Services
Not
applicable for semiannual reports.
Item
5. Audit Committee of Listed Registrants.
Not
applicable for semiannual reports.
Item
6.
(a) Refer
to Item 1.
(b) Not
applicable.
Item
7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management
Investment Companies.
Not
applicable for semiannual reports.
Item
8. Portfolio Managers of Closed-End Management Investment Companies
Applicable
only to reports filed by closed-end funds.
Item
9. Closed-End Fund Repurchases
REGISTRANT PURCHASE OF EQUITY SECURITIES
Period
|
|
(a) Total
Number of
Shares (or
Units)
Purchased
|
|
(b) Average
Price Paid per
Share (or Unit)
|
|
(c) Total
Number of
Shares (or
Units)
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
(d) Maximum
Number (or
Approximate
Dollar Value)
of Shares (or
Units) that May
Yet Be
Purchased
Under the Plans
or Programs
|
|
mo-da-year mo-da-year
|
|
|
|
|
|
N/A
|
|
N/A
|
|
mo-da-year mo-da-year
|
|
|
|
|
|
N/A
|
|
N/A
|
|
mo-da-year mo-da-year
|
|
|
|
|
|
N/A
|
|
N/A
|
|
mo-da-year mo-da-year
|
|
|
|
|
|
N/A
|
|
N/A
|
|
mo-da-year mo-da-year
|
|
|
|
|
|
N/A
|
|
N/A
|
|
mo-da-year mo-da-year
|
|
|
|
|
|
N/A
|
|
N/A
|
|
Total
|
|
|
|
|
|
N/A
|
|
N/A
|
|
Item
10. Submission of Matters to a Vote of Security Holders
Not
applicable.
Item
11. Controls and Procedures
(a)
The Trusts/Funds principal executive officer and principal financial officer
have concluded that the Trusts/Funds disclosure controls and procedures are
sufficient to ensure that information required to be disclosed by the
Trust/Fund in this Form N-CSR was recorded, processed, summarized and
reported within the time periods specified in the Securities and Exchange
Commissions rules and forms, based upon such officers evaluation of
these controls and procedures as of a date within 90 days of the filing date of
the report.
(b)
There were no changes in the registrants internal control over financial
reporting that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting.
Item
12. Exhibits
(a) Code
of Ethics Not applicable for semiannual reports.
(b) A
separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto as part of EX-99.CERT.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
MORGAN
STANLEY INDIA INVESTMENT FUND, INC.
|
|
|
|
/s/
Randy Takian
|
|
Randy
Takian
|
|
Principal
Executive Officer
|
|
August 17,
2010
|
|
Pursuant
to the requirements of the Securities Exchange Act of 1934 and the Investment
Company Act of 1940, this report has been signed by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
/s/
Randy Takian
|
|
Ronald
E. Robison
|
|
Principal
Executive Officer
|
|
August 17,
2010
|
|
|
|
/s/
Francis Smith
|
|
Francis
Smith
|
|
Principal
Financial Officer
|
|
August 17,
2010
|
|
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