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: | 811-08266 |
| | |
| Exact name of registrant as specified in charter: | The India Fund, Inc. |
| | |
| Address of principal executive offices: | 1900 Market Street, Suite 200 |
| | Philadelphia, PA 19103 |
| | |
| Name and address of agent for service: | Ms. Andrea Melia |
| | Aberdeen Standard Investments Inc. |
| | 1900 Market Street, Suite 200 |
| | Philadelphia, PA 19103 |
| | |
| Registrant’s telephone number, including area code: | 800-522-5465 |
| | |
| Date of fiscal year end: | December 31 |
| | |
| Date of reporting period: | June 30, 2021 |
Item 1 - Reports to Stockholders.
The Report to Shareholders is attached herewith.
Managed Distribution Policy (unaudited)
The Board of Directors of The India Fund, Inc. (the “Fund”) has authorized a managed distribution policy (“MDP”) of paying quarterly distributions at an annual rate, set once a year, that is a percentage of the average daily net asset value (“NAV”) for the previous three months as of the month-end prior to declaration. With each distribution, the Fund will issue a notice to shareholders and an accompanying press release which will provide detailed information regarding the amount and composition of the distribution and other
information required by the Fund’s MDP exemptive order. The Fund’s Board of Directors may amend or terminate the MDP at any time without prior notice to shareholders; however, at this time, there are no reasonably foreseeable circumstances that might cause the termination of the MDP. You should not draw any conclusions about the Fund’s investment performance from the amount of distributions or from the terms of the Fund’s MDP.
Distribution Disclosure Classification (unaudited)
The Fund’s policy is to provide investors with a stable distribution rate. Each quarterly distribution will be paid out of current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital.
The Fund is subject to U.S. corporate, tax and securities laws. Under U.S. tax rules, the amount applicable to the Fund and character of distributable income for each fiscal period depends on the actual exchange rates during the entire year between the U.S. Dollar and the currencies in which Fund assets are denominated and on the aggregate gains and losses realized by the Fund during the entire year.
Therefore, the exact amount of distributable income for each fiscal year can only be determined as of the end of the Fund’s fiscal year, December 31, 2021. Under Section 19 of the Investment Company Act of 1940, as amended (the “1940 Act”), the Fund is required to indicate
the sources of certain distributions to shareholders. The estimated distribution composition may vary from quarter to quarter because it may be materially impacted by future income, expenses and realized gains and losses on securities and fluctuations in the value of the currencies in which Fund assets are denominated.
Based on generally accepted accounting principles (“GAAP”), the Fund estimates the distributions for the fiscal year commenced January 1, 2021 through the distribution paid on June 30, 2021 consisted of 12% net realized short-term gains and 88% net realized long-term gains.
In January 2022, a Form 1099-DIV will be sent to shareholders, which will state the amount and composition of distributions and provide information with respect to their appropriate tax treatment for the 2021 calendar year.
The India Fund, Inc.
Letter to Shareholders (unaudited)
Dear Shareholder,
We present this Semi-Annual Report, which covers the activities of The India Fund, Inc. (the “Fund”), for the six-month period ended June 30, 2021. The Fund’s investment objective is long-term capital appreciation, which the Fund seeks to achieve by investing primarily in the equity securities of Indian companies.
Total Investment Return1
For the six-month period ended June 30, 2021, the total return to shareholders of the Fund based on the net asset value (“NAV”) and market price, respectively, of the Fund compared to the Fund’s benchmark are as follows:
| | 6-Month |
| NAV2,3 | 8.6% |
| Market Price2 | 15.9% |
| MSCI India Index (Net Dividends)4 | 12.4% |
For more information about Fund performance, please visit the Fund on the web at www.aberdeenifn.com. Here, you can view quarterly commentary on the Fund’s performance, monthly fact sheets, distribution and performance information, and other Fund literature.
NAV, Market Price and Discount
The below table represents comparison from current six-month period end to prior fiscal year end of Market Price to NAV and associated discount.
| | | Closing | |
| | | Market | |
| | NAV | Price | Discount |
| 6/30/2021 | $23.70 | $21.96 | 7.3% |
| 12/31/2020 | $22.99 | $19.96 | 13.2% |
Throughout the six-month period ended June 30, 2021, the Fund’s NAV was within a range of $22.05 to $24.46 and the Fund’s market price was within a range $19.52 to $22.57. Throughout the six-month period ended June 30, 2021, the Fund’s shares traded within a range of discount of 6.0% to 14.6%.
Managed Distribution Policy
The Fund has a managed distribution policy of paying quarterly distributions at an annual rate, set once a year, that is a percentage of the average daily NAV for the previous three months as of the month-end prior to declaration. In February 2021, the Board determined the rolling distribution rate to be 10% for the 12-month period commencing with the distribution payable in March 2021. This policy will be subject to regular review by the Board. The distributions will be made from current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital, which is a nontaxable return of capital.
The Fund is covered under exemptive relief received by the Fund’s investment manager from the U.S. Securities and Exchange Commission (SEC) that allows the Fund to distribute long-term capital gains as frequently as monthly in any one taxable year.
Open Market Repurchase Program
The Board has authorized Fund management to make open market purchases from time to time in an amount up to 10% of the Fund’s outstanding shares, in accordance with Rule 10b-18 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable federal securities laws. Such purchases may be made when, in the reasonable judgment of Fund management, such repurchases may enhance shareholder value. During the six-month period ended June 30, 2021, the Fund did not repurchase any shares. The Fund reports repurchase activity on the Fund’s website on a monthly basis.
Portfolio Holdings Disclosure
The Fund’s complete schedule of portfolio holdings for the second and fourth quarters of each fiscal year are included in the Fund’s semiannual and annual reports to shareholders. The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the “SEC”) for the first and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. These reports are available on the SEC’s website at http://www.sec.gov. The Fund makes the information available to shareholders upon request and without charge by calling Investor Relations toll-free at 1-800-522-5465.
| 1 | Past performance is no guarantee of future results. Investment returns and principal value will fluctuate and shares, when sold, may be worth more or less than original cost. Current performance may be lower or higher than the performance quoted. Net asset value return data include investment management fees, custodial charges and administrative fees (such as Director and legal fees) and assumes the reinvestment of all distributions. |
| 2 | Assuming the reinvestment of dividends and distributions. |
| 3 | The Fund’s total return is based on the reported net asset value (“NAV”) for each financial reporting period end and may differ from what is reported on the Financial Highlights due to financial statement rounding or adjustments. |
| 4 | The MSCI India Index (Net Dividends) is designed to measure the performance of the large and mid-cap segments of the Indian market. With 84 constituents, the index covers approximately 85% of the Indian equity universe. The MSCI India Index (Net Dividends) is calculated net of withholding taxes to which the Fund is generally subject. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. Index performance is not an indication of the performance of the Fund itself. For complete Fund performance, please visit http://www.aberdeenifn.com. |
The India Fund, Inc. 1
Letter to Shareholders (unaudited) (concluded)
Proxy Voting
A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the Fund voted proxies relating to portfolio securities during the most recent twelve months ended June 30 is available by August 31 of the relevant year: (i) upon request and without charge by calling Investor Relations toll-free at 1-800-522-5465 and (ii) on the SEC’s website at http://www.sec.gov.
Unclaimed Share Accounts
Please be advised that abandoned or unclaimed property laws for certain states require financial organizations to transfer (escheat) unclaimed property (including Fund shares) to the state. Each state has its own definition of unclaimed property, and Fund shares could be considered “unclaimed property” due to account inactivity (e.g., no owner-generated activity for a certain period), returned mail (e.g., when mail sent to a shareholder is returned to the Fund’s transfer agent as undeliverable), or a combination of both. If your Fund shares are categorized as unclaimed, your financial advisor or the Fund’s transfer agent will follow the applicable state’s statutory requirements to contact you, but if unsuccessful, laws may require that the shares be escheated to the appropriate state. If this happens, you will have to contact the state to recover your property, which may involve time and expense. For more information on unclaimed property and how to maintain an active account, please contact your financial adviser or the Fund’s transfer agent.
COVID-19
The illness COVID-19 caused by a novel coronavirus has resulted in a global pandemic and major disruption to economies and markets around the world, including the United States. Financial markets have experienced extreme volatility and severe losses, and trading in many instruments has been disrupted. Liquidity for many instruments has been greatly reduced for periods of time. Some interest rates are very low and in some cases yields are negative. Some sectors of the economy and individual issuers have experienced particularly large
losses. Although some markets have rebounded, others have not. These circumstances may recur or continue for an extended period of time, and may continue to affect adversely the value and liquidity of the Fund’s investments. The ultimate economic fallout from the pandemic, and the long-term impact on economies, markets, industries and individual issuers, including the Fund, are not known. Governments and central banks, including the Federal Reserve in the U.S., have taken extraordinary and unprecedented actions to support local and global economies and the financial markets. The impact of these measures, and whether they will be effective to mitigate the economic and market disruption, will vary from market to market and, in some cases, may not be known for some time.
Investor Relations Information
As part of Aberdeen Standard’s commitment to shareholders, we invite you to visit the Fund on the web at www.aberdeenifn.com. Here, you can view monthly fact sheets, quarterly commentary, distribution and performance information, updated daily data courtesy of Morningstar®, portfolio charting and other Fund literature.
Enroll in Aberdeen Standard’s email services and be among the first to receive the latest closed-end fund news, announcements, videos and other information. In addition, you can receive electronic versions of important Fund documents, including annual reports, semi-annual reports, prospectuses, and proxy statements. Sign up today at https://www.aberdeenstandard.com/en-us/cefinvestorcenter/contact-us/preferences.
Contact Us:
| • | Visit: https://www.aberdeenstandard.com/en-us/cefinvestorcenter; |
| • | Email: Investor.Relations@aberdeenstandard.com; or |
| • | Call: 1-800-522-5465 (toll-free in the U.S.). |
Yours sincerely,
/s/ Alan R. Goodson
Alan R. Goodson
President
All amounts are U.S. Dollars unless otherwise stated.
2 The India Fund, Inc.
Total Investment Returns (unaudited)
The following table summarizes the average annual Fund total investment return compared to the Fund’s primary benchmark for the six-month (not annualized), 1-year, 3-year, 5-year and 10-year periods as of June 30, 2021.
| | | 6 Months | | 1 Year | | 3 Years | | 5 Years | | 10 Years | |
| Net Asset Value (NAV) | | 8.6% | | 47.9% | | 9.3% | | 10.4% | | 7.2% | |
| Market Price | | 15.9% | | 57.4% | | 11.1% | | 11.8% | | 7.1% | |
| MSCI India Index (Net Dividends) | | 12.4% | | 56.4% | | 11.9% | | 11.9% | | 5.5% | |
Returns represent past performance. Total investment return at NAV is based on changes in the NAV of Fund shares and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the Fund’s dividend reinvestment program. All return data includes fees charged to the Fund, which are listed in the Fund’s Statement of Operations under “Expenses.” The Fund’s total investment return is based on the reported NAV on each financial reporting period end. Total investment return at market value is based on changes in the market price at which the Fund’s shares traded on the NYSE during the period and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the Fund’s dividend reinvestment program. Because the Fund’s shares trade in the stock market based on investor demand, the Fund may trade at a price higher or lower than its NAV. Therefore, returns are calculated based on both market price and NAV. Past performance is no guarantee of future results. The performance information provided does not reflect the deduction of taxes that a shareholder would pay on distributions received from the Fund. The current performance of the Fund may be lower or higher than the figures shown. The Fund’s yield, return, market price and NAV will fluctuate. Performance information current to the most recent month-end is available at www.aberdeenifn.com or by calling 800-522-5465.
The annualized net operating expense ratio based on the six-month period ended June 30, 2021 was 1.33%.
The India Fund, Inc. 3
Portfolio Summary (unaudited)
The following table summarizes the sector composition of the Fund’s portfolio, in S&P Global Inc.’s Global Industry Classification Standard (“GICS”) Sectors, expressed as a percentage of net assets as of June 30, 2021.
| Sectors | | As a Percentage of Net Assets |
| Financials | | 27.9 | %* |
| Information Technology | | 21.6 | % |
| Consumer Staples | | 15.5 | % |
| Materials | | 8.4 | % |
| Health Care | | 6.6 | % |
| Communication Services | | 5.0 | % |
| Utilities | | 4.8 | % |
| Consumer Discretionary | | 4.5 | % |
| Industrials | | 4.3 | % |
| Real Estate | | 3.9 | % |
| Energy | | 1.5 | % |
| Short-Term Investment | | 0.1 | % |
| Liabilities in Excess of Other Assets | | (4.1) | % |
| | | 100.0 | % |
| * | The sectors, as classified by GICS, are comprised of several industries. As of June 30, 2021, the Fund did not have more than 25% of its assets invested in any industry. As of June 30, 2021, the Fund’s holdings in the Financials sector consisted of four industries: Banks, Thrifts and Mortgage Finance, Insurance and Diversified Financial Services which represented 12.7%, 9.6% and 4.2% and 1.4%, respectively, of the Fund’s net assets. |
Top Ten Equity Holdings (unaudited)
The following were the Fund’s top ten equity holdings as of June 30, 2021:
| Name of Security | As a Percentage of Net Assets |
| Infosys Ltd. | 10.6% |
| Housing Development Finance Corp. Ltd. | 9.6% |
| Tata Consultancy Services Ltd. | 8.8% |
| Hindustan Unilever Ltd. | 6.7% |
| Kotak Mahindra Bank Ltd. | 4.7% |
| UltraTech Cement Ltd. | 4.1% |
| HDFC Bank Ltd. | 3.8% |
| Asian Paints Ltd. | 3.4% |
| Axis Bank Ltd. | 3.2% |
| SBI Life Insurance Co. Ltd. | 3.1% |
Statement of Investments (unaudited)
June 30, 2021
| | Shares or | | |
| | Principal | | |
| | Amount | Value | |
| LONG-TERM INVESTMENTS—(104.0%) | | | |
| COMMON STOCKS—(104.0%) | | | |
| INDIA—(104.0%) | | | |
| Communication Services—(5.0%) | | | |
| Affle India Ltd.(a) | 168,593 | | $ 9,768,924 | |
| Bharti Airtel Ltd. | 2,018,459 | 14,358,097 | |
| Info Edge India Ltd. | 113,500 | 7,537,120 | |
| | | 31,664,141 | |
| Consumer Discretionary—(4.5%) | | | |
| Bosch Ltd. | 30,023 | 6,065,502 | |
| Crompton Greaves Consumer Electricals Ltd. | 1,546,914 | 9,039,264 | |
| Maruti Suzuki India Ltd. | 134,600 | 13,673,595 | |
| | | 28,778,361 | |
| Consumer Staples—(15.5%) | 681,080 | 5,782,215 | |
| Godrej Agrovet Ltd.(b) | |
| Godrej Consumer Products Ltd.(a) | 837,867 | 9,821,862 | |
| Hindustan Unilever Ltd. | 1,285,818 | 42,864,178 | |
| ITC Ltd. | 7,036,000 | 19,216,324 | |
| Jyothy Labs Ltd.(a) | 3,827,708 | 8,007,467 | |
| Nestle India Ltd. | 56,200 | 13,406,329 | |
| | | 99,098,375 | |
| Energy—(1.5%) | | | |
| Aegis Logistics Ltd. | 2,064,500 | 9,598,957 | |
| Financials—(27.9%) | 2,016,079 | 20,354,068 | |
| Axis Bank Ltd.(a) | |
| Bandhan Bank Ltd.(a)(b) | 1,506,241 | 6,703,922 | |
| HDFC Bank Ltd. | 1,186,000 | 23,940,258 | |
| Housing Development Finance Corp. Ltd. | 1,827,421 | 61,047,160 | |
| ICICI Prudential Life Insurance Co. Ltd.(b) | 830,000 | 6,854,593 | |
| Kotak Mahindra Bank Ltd.(a) | 1,312,476 | 30,151,820 | |
| Piramal Enterprises Ltd. | 282,161 | 9,187,189 | |
| SBI Life Insurance Co. Ltd.(b) | 1,447,758 | 19,642,831 | |
| | | 177,881,841 | |
| Health Care—(6.6%) | | | |
| Biocon Ltd.(a) | 1,228,576 | 6,685,388 | |
| Fortis Healthcare Ltd.(a) | 4,038,200 | 13,283,666 | |
| Sanofi India Ltd. | 96,170 | 9,992,323 | |
| Syngene International Ltd.(a)(b) | 1,540,000 | 12,109,006 | |
| | | 42,070,383 | |
| Industrials—(4.3%) | | | |
| Container Corp. of India Ltd. | 1,609,015 | 15,178,506 | |
| Larsen & Toubro Ltd. | 606,407 | 12,255,297 | |
| | | 27,433,803 | |
The India Fund, Inc. 5
Statement of Investments (unaudited) (concluded)
June 30, 2021
| | Shares or | | |
| | Principal | | |
| | Amount | Value | |
| LONG-TERM INVESTMENTS (continued) | | | |
| COMMON STOCKS (continued) | | | |
| INDIA (continued) | | | |
| Information Technology—(21.6%) | | | |
| Infosys Ltd. | 3,196,474 | | $ 67,587,146 | |
| Mphasis Ltd. | 490,748 | 14,120,031 | |
| Tata Consultancy Services Ltd. | 1,239,750 | 55,957,669 | |
| | | 137,664,846 | |
| Materials—(8.4%) | | | |
| Asian Paints Ltd. | 540,434 | 21,855,307 | |
| Shree Cement Ltd.(a) | 13,870 | 5,156,070 | |
| UltraTech Cement Ltd. | 288,786 | 26,332,811 | |
| | | 53,344,188 | |
| Real Estate—(3.9%) | 703,528 | 13,219,671 | |
| Godrej Properties Ltd.(a) | |
| Prestige Estates Projects Ltd.(a) | 2,997,469 | 11,739,577 | |
| | | 24,959,248 | |
| Utilities—(4.8%) | 167,800 | 4,517,176 | |
| Azure Power Global Ltd.(a) | |
| Gujarat Gas Ltd. | 1,613,540 | 14,370,779 | |
| Power Grid Corp. of India Ltd. | 3,790,000 | 11,865,119 | |
| | | 30,753,074 | |
| Total Common Stocks | | 663,247,217 | |
| SHORT-TERM INVESTMENT—0.1% | | | |
| UNITED STATES—(0.1%) | | | |
| State Street Institutional U.S. Government Money Market Fund, Premier Class, 0.03%(c) | 792,124 | 792,124 | |
| Total Money Market Funds | | 792,124 | |
| Total Investments (Cost $314,599,594)(d)—104.1% | | 664,039,341 | |
| Liabilities in Excess of Other Assets—(4.1)% | | (26,316,778 | ) |
| Net Assets—100.0% | | $637,722,563 | |
| (a) | Non-income producing security. |
| (b) | Denotes a security issued under Regulation S or Rule 144A. See Note 2(a) of the accompanying Notes to Financial Statements. |
| (c) | Registered investment company advised by State Street Global Advisors. The rate shown is the 7 day yield as of June 30, 2021. |
| (d) | See accompanying Notes to Financial Statements for tax unrealized appreciation/(depreciation) of securities. |
See accompanying Notes to Financial Statements.
Statement of Assets and Liabilities (unaudited)
As of June 30, 2021
Assets
| Investments, at value (cost $313,807,470) | | $ | 663,247,217 | |
| Short-term investments, at value (cost $792,124) | | | 792,124 | |
| Foreign currency, at value (cost $1,973,395) | | | 1,970,002 | |
| Interest and dividends receivable | | | 1,088,240 | |
| Receivable for investments sold | | | 629,301 | |
| Prepaid expenses | | | 76,437 | |
| Total assets | | 667,803,321 | |
| Liabilities | | | | |
| Deferred foreign capital gains tax | | | 29,097,567 | |
| Investment management fees payable (Note 3) | | | 562,212 | |
| Administration fees payable (Note 3) | | | 42,668 | |
| Investor relations fees payable (Note 3) | | | 36,320 | |
| Director fees payable | | | 13,934 | |
| Other accrued expenses | | | 328,057 | |
| Total liabilities | | | 30,080,758 | |
| | | | | |
| Net Assets | | $ | 637,722,563 | |
| Composition of Net Assets | | | | |
| Capital stock (par value $.001 per share) (Note 5) | | $ | 26,905 | |
| Paid-in capital in excess of par | | | 305,092,639 | |
| Distributable earnings | | | 332,603,019 | |
| Net Assets | | $ | 637,722,563 | |
| Net asset value per common share based on 26,904,575 shares issued and outstanding | | $ | 23.70 | |
See Notes to Financial Statements.
The India Fund, Inc. 7
Statement of Operations (unaudited)
For the Six-Month Period Ended June 30, 2021
| Net Investment Income: | | | | |
| | | | | |
| Income | | | | |
| Dividends and other income (net of foreign withholding taxes of $866,297) | | $ | 3,016,165 | |
| Total Investment Income | | | 3,016,165 | |
| Expenses: | | | | |
| Investment management fee (Note 3) | | | 3,314,163 | |
| Administration fee (Note 3) | | | 250,513 | |
| Directors’ fees and expenses | | | 128,684 | |
| Custodian’s fees and expenses | | | 109,032 | |
| Insurance expense | | | 77,552 | |
| Investor relations fees and expenses (Note 3) | | | 71,953 | |
| Legal fees and expenses | | | 62,307 | |
| Reports to shareholders and proxy solicitation | | | 52,284 | |
| Independent auditors’ fees and expenses | | | 48,078 | |
| Transfer agent’s fees and expenses | | | 12,794 | |
| Miscellaneous | | | 33,168 | |
| Net expenses | | | 4,160,528 | |
| | | | | |
| Net Investment Loss | | | (1,144,363 | ) |
| Net Realized/Unrealized Gain/(Loss) from Investments and Foreign Currency Related Transactions: | | | | |
| Net realized gain/(loss) from: | | | | |
| Investment transactions | | | 48,465,306 | |
| Foreign currency transactions | | | (209,399 | ) |
| | | | 48,255,907 | |
| Net change in unrealized appreciation/(depreciation) on: | | | | |
| Investments (including $5,927,068 change in deferred capital gains tax) (Note 2f) | | | 3,433,086 | |
| Foreign currency translation | | | (43,687 | ) |
| | | | 3,389,399 | |
| Net realized and unrealized gain from investments and foreign currency transactions | | | 51,645,306 | |
| Net Increase in Net Assets Resulting from Operations | | $ | 50,500,943 | |
See Notes to Financial Statements.
8 The India Fund, Inc.
Statements of Changes in Net Assets
| | For the Six-Month | | | |
| | Period Ended | | For the | |
| | June 30, 2021 | | Year Ended | |
| | | (unaudited) | | December 31, 2020 | |
| Increase/(Decrease) in Net Assets: | | | | | |
| Operations: | | | | | |
| Net investment loss | | $ (1,144,363 | ) | $ (1,032,624 | ) |
| Net realized gain from investment and foreign currency related transactions | | 48,255,907 | | 32,627,696 | |
| Net change in unrealized appreciation/(depreciation) on investments and foreign currency translation | | 3,389,399 | | 31,311,339 | |
| Net increase in net assets resulting from operations | | 50,500,943 | | 62,906,411 | |
| Distributions to Shareholders From: | | | | | |
| Distributable earnings | | (31,209,307 | ) | (29,535,051 | ) |
| Tax return of capital | | – | | (22,928,870 | ) |
| Net decrease in net assets from distributions | | (31,209,307 | ) | (52,463,921 | ) |
| Change in net assets resulting from operations | | 19,291,636 | | 10,442,490 | |
| Net Assets: | | | | | |
| Beginning of period | | 618,430,927 | | 607,988,437 | |
| End of period | | $ 637,722,563 | | $ 618,430,927 | |
Amounts listed as “–” are $0 or round to $0.
See Notes to Financial Statements.
The India Fund, Inc. 9
Financial Highlights
| | For the | | | | | | |
| | Six-Month | | | | | | |
| | Period Ended | For the Fiscal Years Ended December 31, | |
| | June 30, 2021 | |
| | (unaudited) | 2020 | 2019 | 2018 | 2017(a) | 2016 | |
| PER SHARE OPERATING PERFORMANCE(b): | | | | | | | |
| Net asset value, beginning of period | $22.99 | $22.60 | $23.84 | $29.50 | $24.24 | $25.95 | |
| Net investment income/(loss) | (0.04) | (0.04) | 0.03 | (0.04) | (0.01) | – | |
| Net realized and unrealized gains/(losses) on | | | | | | | |
| investments and foreign currency transactions | 1.91 | 2.38 | 1.06 | (1.25) | 8.37 | (0.09) | |
| Total from investment operations | 1.87 | 2.34 | 1.09 | (1.29) | 8.36 | (0.09) | |
| Dividends and distributions to shareholders from: | | | | | | | |
| Net investment income | (1.16) | (1.10) | (0.01) | (0.77)(c) | – | (0.04) | |
| Net realized gains | – | – | (2.32) | (3.73)(c) | (3.16) | (1.67) | |
| Tax return of capital | – | (0.85) | – | – | – | – | |
| Total dividends and distributions to shareholders | (1.16) | (1.95) | (2.33) | (4.50) | (3.16) | (1.71) | |
| Capital Share Transactions: | | | | | | | |
| Impact due to open market repurchase policy (Note 6) | – | – | – | 0.13 | 0.06 | 0.09 | |
| Total capital share transactions | – | – | – | 0.13 | 0.06 | 0.09 | |
| Net asset value, end of period | $23.70 | $22.99 | $22.60 | $23.84 | $29.50 | $24.24 | |
| Market value, end of period | $21.96 | $19.96 | $20.13 | $20.24 | $26.12 | $21.39 | |
| Total Investment Return Based on(d): | | | | | | | |
| Market value | 15.92% | 11.79% | 10.90% | (6.00%) | 36.45% | 1.20% | |
| Net asset value | 8.62% | 14.69% | 5.70% | (1.94%) | 35.98% | 0.50% | |
| Ratio to Average Net Assets/Supplementary Data: | | | | | | | |
| Net assets, end of period (000 omitted) | $637,723 | $618,431 | $607,988 | $642,079 | $825,611 | $689,736 | |
| Average net assets (000 omitted) | $631,473 | $525,841 | $623,568 | $756,480 | $836,037 | $770,618 | |
| Net expenses | 1.33%(e) | 1.43% | 1.35% | 1.32% | 1.26% | 1.33% | |
| Net investment income/(loss) | (0.37%)(e) | (0.20%) | 0.13% | (0.13%) | (0.02%) | (0.01%) | |
| Portfolio turnover | 8.15%(f) | 20.49% | 14.43% | 12.62% | 12.15% | 12.25% | |
| (a) | Beginning with the year ended December 31, 2017, the Fund’s financial statements have been audited by KPMG LLP. Previous years were audited by a different independent registered public accounting firm. |
| (b) | Based on average shares outstanding. |
| (c) | The current year presentation has been revised to appropriately reflect the known source of dividends and distributions to shareholders from net investment income and net realized gains. Previously (4.50) from net investment income. |
| (d) | Total investment return based on market value is calculated assuming that shares of the Fund’s common stock were purchased at the closing market price as of the beginning of the period, dividends, capital gains, and other distributions were reinvested as provided for in the Fund’s dividend reinvestment plan and then sold at the closing market price per share on the last day of the period. The computation does not reflect any sales commission investors may incur in purchasing or selling shares of the Fund. The total investment return based on the net asset value is similarly computed except that the Fund’s net asset value is substituted for the closing market value. |
Amounts listed as “–” are $0 or round to $0.
See Notes to Financial Statements.
10 The India Fund, Inc.
Notes to Financial Statements (unaudited)
June 30, 2021
1. Organization
The India Fund, Inc. (the “Fund”) was incorporated in Maryland on December 27, 1993 and commenced operations on February 23, 1994. The Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a non-diversified closed-end management investment company.
The Fund’s investment objective is long-term capital appreciation, which it seeks to achieve by investing primarily in the equity securities of Indian companies.
2. Summary of Significant Accounting Policies
The Fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification Topic 946 Financial Services-Investment Companies. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies conform to generally accepted accounting principles (“GAAP”) in the United States of America. The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of income and expenses for the period. Actual results could differ from those estimates. The books and accounting records of the Fund are maintained in U.S. Dollars.
a. Security Valuation:
The Fund values its securities at current market value or fair value, consistent with regulatory requirements. “Fair value” is defined in the Fund’s Valuation and Liquidity Procedures as the price that could be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants without a compulsion to transact at the measurement date.
Equity securities that are traded on an exchange are valued at the last quoted sale price on the principal exchange on which the security is traded at the “Valuation Time” subject to application, when appropriate, of the valuation factors described in the paragraph below. Under normal circumstances, the Valuation Time is as of the close of regular trading on the New York Stock Exchange (“NYSE”) (usually 4:00 p.m. Eastern Time). In the absence of a sale price, the security is valued at the mean of the bid/ask price quoted at the close on the principal exchange on which the security is traded. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Closed-end funds and exchange-traded funds (“ETFs”) are valued at the market price of the security at the Valuation Time. A security using any of these pricing methodologies is determined to be a Level 1 investment.
Foreign equity securities that are traded on foreign exchanges that close prior to Valuation Time are valued by applying valuation factors to the last sale price or the mean price as noted above. Valuation factors are provided by an independent pricing service provider approved by the Board. These valuation factors are used when pricing the Fund’s portfolio holdings to estimate market movements between the time foreign markets close and the time the Fund values such foreign securities. These valuation factors are based on inputs such as depositary receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange opening and closing prices of each security. When prices with the application of valuation factors are utilized, the value assigned to the foreign securities may not be the same as quoted or published prices of the securities on their primary markets. A security that applies a valuation factor is determined to be a Level 2 investment because the exchange-traded price has been adjusted. Valuation factors are not utilized if the independent pricing service provider is unable to provide a valuation factor or if the valuation factor falls below a predetermined threshold; in such case, the security is determined to be a Level 1 investment.
Short-term investments are comprised of cash and cash equivalents invested in short-term investment funds which are redeemable daily. The Fund sweeps available cash into the State Street Institutional U.S. Government Money Market Fund, which has elected to qualify as a “government money market fund” pursuant to Rule 2a-7 under the 1940 Act, and has an objective to maintain a $1.00 per share net asset value (“NAV”), which is not guaranteed. Generally, these investment types are categorized as Level 1 investments.
In the event that a security’s market quotations are not readily available or are deemed unreliable (for reasons other than because the foreign exchange on which it trades closes before the Valuation Time), the security is valued at fair value as determined by the Fund’s Pricing Committee, taking into account the relevant factors and surrounding circumstances using valuation policies and procedures approved by the Fund’s Board of Directors (the “Board”). A security that has been fair valued by the Fund’s Pricing Committee may be classified as Level 2 or Level 3 depending on the nature of the inputs.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Fund discloses the fair value of its investments using a three-level hierarchy that classifies the inputs to valuation techniques used to measure the fair value. The hierarchy assigns Level 1, the highest level, measurements to valuations based upon unadjusted quoted prices in active markets for identical assets, Level 2 measurements to valuations based upon other significant observable inputs, including adjusted quoted prices in active markets for similar assets, and Level 3, the lowest level, measurements
The India Fund, Inc. 11
Notes to Financial Statements (unaudited) (continued)
June 30, 2021
to valuations based upon unobservable inputs that are significant to the valuation. Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability, which are based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. A financial instrument’s level within the fair value hierarchy is based upon the
lowest level of any input that is significant to the fair value measurement. The three-level hierarchy of inputs is summarized below:
Level 1 – quoted prices in active markets for identical investments;
Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk); or
Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments).
A summary of standard inputs is listed below:
| Security Type | Standard Inputs |
| Foreign equities utilizing a | Depositary receipts, indices, futures, sector indices/ETFs, exchange rates, and local exchange |
| fair value factor | opening and closing prices of each security. |
The following is a summary of the inputs used as of June 30, 2021 in valuing the Fund’s investments at fair value. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Please refer to the Portfolio of Investments for a detailed breakout of the security types:
| | Level 1 – Quoted | Level 2 – Other Significant | Level 3 – Significant | |
| Investments, at Value | Prices ($) | Observable Inputs ($) | Unobservable Inputs ($) | Total ($) |
| Investments in Securities | | | | |
| Common Stocks | $4,517,176 | $658,730,041 | $– | $663,247,217 |
| Short-Term Investment | 792,124 | – | – | 792,124 |
| Total | $5,309,300 | $658,730,041 | $– | $664,039,341 |
Amounts listed as “–” are $0 or round to $0.
For the six-month period ended June 30, 2021, there were no significant changes to the fair valuation methodologies for the type of holdings in the Fund’s portfolio.
The Fund held no Level 3 securities as of June 30, 2021.
b. Foreign Currency Translation:
Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. Dollars at the exchange rate of said currencies against the U.S. Dollar, as of the Valuation Time, as provided by an independent pricing service approved by the Board.
Foreign currency amounts are translated into U.S. Dollars on the following basis:
| (i) | market value of investment securities, other assets and liabilities – at the current daily rates of exchange at the Valuation Time; and |
| (ii) | purchases and sales of investment securities, income and expenses – at the relevant rates of exchange prevailing on the respective dates of such transactions. |
The Fund does not isolate that portion of gains and losses on investments in equity securities due to changes in the foreign exchange rates from the portion due to changes in market prices of equity securities. Accordingly, realized and unrealized foreign currency gains and losses with respect to such securities are included in the reported net realized and unrealized gains and losses on investment transactions balances.
The Fund reports certain foreign currency related transactions and foreign taxes withheld on security transactions as components of realized gains for financial reporting purposes, whereas such foreign currency related transactions are treated as ordinary income for U.S. federal income tax purposes.
Net unrealized currency gains or losses from valuing foreign currency denominated assets and liabilities at period end exchange rates are reflected as a component of net unrealized appreciation/depreciation in value of investments, and translation of other assets and liabilities denominated in foreign currencies.
12 The India Fund, Inc.
Notes to Financial Statements (unaudited) (continued)
June 30, 2021
Net realized foreign exchange gains or losses represent foreign exchange gains and losses from transactions in foreign currencies and forward foreign currency contracts, exchange gains or losses realized between the trade date and settlement date on security transactions, and the difference between the amounts of interest and dividends recorded on the Fund’s books and the U.S. Dollar equivalent of the amounts actually received.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin, including unanticipated movements in the value of the foreign currency relative to the U.S. Dollar. Generally, when the U.S. Dollar rises in value against foreign currency, the Fund’s investments denominated in that foreign currency will lose value because the foreign currency is worth fewer U.S. Dollars; the opposite effect occurs if the U.S. Dollar falls in relative value.
c. Security Transactions, Investment Income and Expenses:
Security transactions are recorded on the trade date. Realized and unrealized gains/(losses) from security and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date except for certain dividends on foreign securities, which are recorded as soon as the Fund is informed after the ex-dividend date. Interest income and expenses are recorded on an accrual basis. Certain distributions received by the Fund could represent a return of capital or capital gain. The Fund determines the components of these distributions subsequent to the ex-dividend date, based upon receipt of tax filings or other correspondence relating to the underlying investment. These distributions are recorded as a reduction of cost of investments and/or as a realized gain.
d. Distributions:
The Fund has implemented a managed distribution policy (“MDP”) to pay distributions from net investment income supplemented by net realized foreign exchange gains, net realized capital gains and return of capital distributions, if necessary, on a quarterly basis. The MDP is subject to regular review by the Board.
The Fund records dividends and distributions payable to its shareholders on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These book basis/tax basis differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax basis treatment; temporary differences do not require reclassification.
Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes are reported as return of capital.
e. Federal Income Taxes:
The Fund intends to continue to qualify as a “regulated investment company” (“RIC”) by complying with the provisions available to certain investment companies, as defined in Subchapter M of the Internal Revenue Code of 1986, as amended, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes. Therefore, no federal income tax provision is required.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management of the Fund has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Since tax authorities can examine previously filed tax returns, the Fund’s U.S. federal and state tax returns for each of the most recent four fiscal years up to the most recent fiscal year ended December 31, 2020 are subject to such review.
f. Foreign Withholding Tax:
Dividend and interest income from non-U.S. sources received by the Fund are generally subject to non-U.S. withholding taxes and are recorded on the Statement of Operations. The Fund files for tax reclaims for the refund of such withholdings taxes according to tax treaties. Tax reclaims that are deemed collectible are booked as tax reclaim receivable on the Statement of Assets and Liabilities. In addition, the Fund may be subject to capital gains tax in certain countries in which it invests. The above taxes may be reduced or eliminated under the terms of applicable U.S. income tax treaties with some of these countries. The Fund accrues such taxes when the related income is earned.
In addition, when the Fund sells securities within certain countries in which it invests, the capital gains realized may be subject to tax. Based on these market requirements and as required under GAAP, the Fund accrues deferred capital gains tax on securities currently held that have unrealized appreciation within these countries. The amount of deferred capital gains tax accrued is reported on the Statement of Operations as part of the Net Change in Unrealized Appreciation/Depreciation on Investments.
On February 1, 2018, Indian Finance Minister Arun Jaitley proposed to introduce a 10% tax on long-term capital gains on non-resident taxpayers, including financial institutional investors. Under the existing
The India Fund, Inc. 13
Notes to Financial Statements (unaudited) (continued)
June 30, 2021
regime, long-term capital gains on non-resident taxpayers are exempt from income tax. This proposed tax was announced as part of the unveiling of the Budget proposals for 2018-2019 and would apply to the transfer of long-term capital assets exceeding Indian Rupee (INR) 100,000 on disposals of Indian listed securities on or after April 1, 2018. However, it was announced that all long-term capital gains up to January 31, 2018 would be grandfathered and not subject to the proposed new tax. The tax proposal became effective April 1, 2018 and the Fund currently accrues this tax. (See Deferred foreign capital gains tax on the Statement of Assets and Liabilities).
On February 1, 2020, the Union Budget of India for 2020-2021 was announced in which effective April 1, 2020, dividends are now taxed in the hands of the shareholder, which means a 20% tax (plus surcharge and tax) will be withheld on dividend payments (potentially reduced by treaty if applicable). Previously, Indian companies paid the tax rate prior to the distribution of dividends to shareholders.
g. Restricted Securities:
Restricted securities are privately-placed securities whose resale is restricted under U.S. securities laws. The Fund may invest in restricted securities, including unregistered securities eligible for resale without registration pursuant to Rule 144A and privately-placed securities of U.S. and non-U.S. issuers offered outside the U.S. without registration pursuant to Regulation S under the Securities Act of 1933, as amended. Rule 144A securities may be freely traded among certain qualified institutional investors, such as the Fund, but resale of such securities in the U.S. is permitted only in limited circumstances.
3. Agreements and Transactions with Affiliates
a. Investment Manager:
Aberdeen Standard Investments (Asia) Limited (“ASIAL”) serves as the Fund’s investment manager with respect to all investments. For its services, ASIAL receives fees at an annual rate of: (i) 1.10% for the first $500 million of the Fund’s average weekly Managed Assets; (ii) 0.90% for the next $500 million of the Fund’s average weekly Managed Assets; (iii) 0.85% for the next $500 million of the Fund’s average weekly Managed Assets; and (iv) 0.75% for the Fund’s average weekly Managed Assets in excess of $1.5 billion. Managed Assets is defined in the investment management agreement as net assets plus the amount of any borrowings for investment purposes. For the six-month period ended June 30, 2021, ASIAL earned a gross management fee of $3,314,163.
b. Fund Administration:
Aberdeen Standard Investments Inc. (“ASII”) an affiliate of ASIAL, serves as the Fund’s administrator and receives a fee payable monthly by the
Fund at an annual fee rate of 0.08% of the value of the Fund’s average monthly net assets. During the six-month period ended June 30, 2021, the Fund paid a total of $250,513 in administrative fees to ASII.
c. Investor Relations:
Under the terms of the Investor Relations Services Agreement, ASII provides and/or engages third parties to provide investor relations services to the Fund and certain other funds advised by ASIAL or its affiliates as part of an Investor Relations Program. Under the Investor Relations Services Agreement, the Fund owes a portion of the fees related to the Investor Relations Program (the “Fund’s Portion”). However, investor relations services fees are limited by ASII so that the Fund will only pay up to an annual rate of 0.05% of the Fund’s average net assets per annum. Any difference between the capped rate of 0.05% of the Fund’s average net assets per annum and the Fund’s Portion is paid for by ASII.
Pursuant to the terms of the Investor Relations Services Agreement, ASII (or third parties engaged by ASII) among other things, provides objective and timely information to shareholders based on publicly-available information; provides information efficiently through the use of technology while offering shareholders immediate access to knowledgeable investor relations representatives; develops and maintains effective communications with investment professionals from a wide variety of firms; creates and maintains investor relations communication materials such as fund manager interviews, films and webcasts, publishes white papers, magazine articles and other relevant materials discussing the Fund’s investment results, portfolio positioning and outlook; develops and maintains effective communications with large institutional shareholders; responds to specific shareholder questions; and reports activities and results to the Board and management detailing insight into general shareholder sentiment.
During the six-month period ended June 30, 2021, the Fund incurred investor relations fees of approximately $71,953. For the six-month period ended June 30, 2021, ASII did not contribute to the investor relations fees for the Fund because the Fund’s contribution was below 0.05% of the Fund’s average weekly net assets on an annual basis.
4. Investment Transactions
Purchases and sales of investment securities (excluding short-term securities) for the six-month period ended June 30, 2021, were $52,425,110 and $87,153,098, respectively.
5. Capital
The authorized capital of the Fund is 100 million shares of $0.001 par value per share of common stock. During the six-month period ended June 30, 2021, the Fund did not repurchase any shares under its
14 The India Fund, Inc.
Notes to Financial Statements (unaudited) (continued)
June 30, 2021
open market repurchase policy (See Note 6). As of June 30, 2021, there were 26,904,575 shares of common stock issued and outstanding.
6. Open Market Repurchase Policy
Under the open market repurchase policy, the Fund did not repurchase any shares during the six-month period ended June 30, 2021 and fiscal year ended December 31, 2020.
7. Portfolio Investment Risks
a. Risks Associated with Indian Markets:
The Indian securities markets are, among other things, substantially smaller, less developed, less liquid and more volatile than the major securities markets in the United States. Consequently, acquisitions and dispositions of Indian securities involve special risks and considerations not present with respect to U.S. securities.
India has undergone and may continue to undergo rapid change and lack the social, political and economic stability of more developed countries. The value of the Fund’s assets may be adversely affected by political, economic, social and religious factors, changes in Indian law or regulations and the status of India’s relations with other countries. In addition, the economy of India may differ favorably or unfavorably from the U.S. economy in such respects as the rate of growth of gross domestic product, the rate of inflation, capital reinvestment, resource self-sufficiency and balance of payments position.
The Indian government has exercised and continues to exercise significant influence over many aspects of the economy, and the number of public sector enterprises in India is substantial. Accordingly, Indian government actions in the future could have a significant effect on the Indian economy, which could affect private sector companies and the Fund, market conditions, and prices and yields of securities in the Fund’s portfolio.
Economic growth in India is constrained by inadequate infrastructure, a cumbersome bureaucracy, corruption, labor market rigidities, regulatory and foreign investment controls, the “reservation” of key products for small-scale industries and high fiscal deficits. Changes in economic policies, or lack of movement toward economic liberalization, could negatively affect the general business and economic conditions in India, which could in turn affect the Fund’s investments.
There is also the possibility of nationalization, expropriation or confiscatory taxation, political changes, government regulation, social instability or diplomatic developments (including pandemic, war or terrorist attacks). All of these factors could adversely affect the economy of India, make the prices of Indian securities generally more volatile than the prices of securities of companies in developed markets and increase the risk of loss to the Fund.
b. Sector Risk:
To the extent that the Fund has a significant portion of its assets invested in securities of companies conducting business in a broadly related group of industries within an economic sector, the Fund may be more vulnerable to unfavorable developments in that economic sector than funds that invest more broadly.
In particular, being invested heavily in the financial sector may make the Fund vulnerable to risks and pressures facing companies in that sector, such as regulatory, consolidation, interest rate changes and general economic conditions.
Financial Sector Risk. To the extent that the financial sector represents a significant portion of the Fund’s investments, the Fund will be sensitive to changes in, and its performance may depend to a greater extent on, factors impacting this sector. Performance of companies in the financials sector may be adversely impacted by many factors, including, among others, government regulations, economic conditions, credit rating downgrades, changes in interest rates, and decreased liquidity in credit markets. The impact of more stringent capital requirements, recent or future regulation of any individual financial company, or recent or future regulation of the financials sector as a whole cannot be predicted. In recent years, cyber attacks and technology malfunctions and failures have become increasingly frequent in this sector and have caused significant losses.
Information Technology Sector Risk. To the extent that the information technology sector represents a significant portion of the Fund, the Fund will be sensitive to changes in, and its performance may depend to a greater extent on, factors impacting this sector. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on their profit margins. Like other technology companies, information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face obsolescence due to rapid technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Companies in the information technology sector are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies.
c. Valuation Risk:
The price that the Fund could receive upon the sale of any particular portfolio investment may differ from the Fund’s valuation of the investment, particularly for securities that trade in thin or volatile markets or that are valued using a fair valuation methodology or a price provided by an independent pricing service. As a result, the price received upon the sale of an investment may be less than the value
The India Fund, Inc. 15
Notes to Financial Statements (unaudited) (concluded)
June 30, 2021
ascribed by the Fund, and the Fund could realize a greater than expected loss or lower than expected gain upon the sale of the investment. The Fund’s ability to value its investments may also be impacted by technological issues and/or errors by pricing services or other third-party service providers.
d. Market Events Risk:
Markets are affected by numerous factors, including interest rates, the outlook for corporate profits, the health of the national and world economies, the fluctuation of other stock markets around the world, and financial, economic and other global market developments and disruptions, such as those arising from war, terrorism, market manipulation, government interventions, defaults and shutdowns, political changes or diplomatic developments, public health emergencies and natural/environmental disasters. Such events can negatively impact the securities markets and cause the Fund to lose value.
One such event is the COVID-19 pandemic, which has caused major disruptions to economies and markets around the world, including the markets in which the Fund invests, and which has and may continue to negatively impact the value of certain of the Fund’s investments . Although vaccines for COVID-19 and variants thereof are becoming more widely available, the COVID-19 pandemic and its impacts may continue for an extended period of time and may vary from market to
market. To the extent the impacts of COVID-19 continue, the Fund may experience negative impacts to its business that could exacerbate other risks to which the Fund is subject. Policy and legislative changes in countries around the world are affecting many aspects of financial regulation, and governmental and quasi-governmental authorities and regulators throughout the world have previously responded to serious economic disruptions with a variety of significant fiscal and monetary policy changes.
The impact of these changes on the markets, and the practical implications for market participants, may not be fully known for some time. In addition, economies and financial markets throughout the world are becoming increasingly interconnected. As a result, whether or not a Fund invests in securities of issuers located in or with significant exposure to countries experiencing economic and financial difficulties, the value and liquidity of the Fund’s investments may be negatively affected by such events.
8. Contingencies
In the normal course of business, the Fund may provide general indemnifications pursuant to certain contracts and organizational documents. The Fund’s maximum exposure under these arrangements is dependent on future claims that may be made against the Fund, and therefore, cannot be estimated; however, the Fund expects the risk of loss from such claims to be remote.
9. Tax Information
The U.S. federal income tax basis of the Fund’s investments (including derivatives, if applicable) and the net unrealized appreciation as of June 30, 2021, were as follows:
| | | | | | | Net Unrealized | |
| Tax Basis of Investments | | Appreciation | | Depreciation | | Appreciation | |
| $318,569,453 | | $348,704,936 | | $(3,235,048 | ) | $345,469,888 | |
| 10. Subsequent Events | |
| | |
| Management has evaluated the need for disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no disclosures and/or adjustments were required to the financial statements as of June 30, 2021. | |
16 The India Fund, Inc.
Supplemental Information (unaudited)
Results of Annual Meeting of Shareholders
The Annual Meeting of Shareholders was held on May 27, 2021. The description of the proposals and number of shares voted at the meeting are as follows:
| 1. To elect two Class I Directors to the Board of Directors: |
| | Votes For | Votes Against | Votes Abstained | |
| Alan Goodson | 16,526,131 | 2,660,628 | 140,074 | |
| Jeswald Salacuse | 16,330,116 | 2,854,373 | 142,346 | |
| To approve the continuation of Term for one Director under the Corporate Governance Policies: |
| | Votes For | Votes Against | Votes Abstained | |
| Luis Rubio | 16,591,151 | 2,582,018 | 153,667 | |
The India Fund, Inc. 17
Dividend Reinvestment and Optional Cash Purchase Plan (unaudited)
The Fund intends to distribute to stockholders substantially all of its net investment income and to distribute any net realized capital gains at least annually. Net investment income for this purpose is income other than net realized long-term and short-term capital gains net of expenses. Pursuant to the Dividend Reinvestment and Optional Cash Purchase Plan (the “Plan”), stockholders whose shares of common stock are registered in their own names will be deemed to have elected to have all distributions automatically reinvested by Computershare Trust Company N.A. (the “Plan Agent”) in the Fund shares pursuant to the Plan, unless such stockholders elect to receive distributions in cash. Stockholders who elect to receive distributions in cash will receive such distributions paid by check in U.S. Dollars mailed directly to the stockholder by the Plan Agent, as dividend paying agent. In the case of stockholders such as banks, brokers or nominees that hold shares for others who are beneficial owners, the Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by the stockholders as representing the total amount registered in such stockholders’ names and held for the account of beneficial owners that have not elected to receive distributions in cash. Investors that own shares registered in the name of a bank, broker or other nominee should consult with such nominee as to participation in the Plan through such nominee and may be required to have their shares registered in their own names in order to participate in the Plan. Please note that the Fund does not issue certificates so all shares will be registered in book entry form.
The Plan Agent serves as agent for the stockholders in administering the Plan. If the Directors of the Fund declare an income dividend or a capital gains distribution payable either in the Fund’s common stock or in cash, nonparticipants in the Plan will receive cash and participants in the Plan will receive common stock, to be issued by the Fund or purchased by the Plan Agent in the open market, as provided below. If the market price per share on the valuation date equals or exceeds NAV per share on that date, the Fund will issue new shares to participants at NAV; provided, however, that if the NAV is less than 95% of the market price on the valuation date, then such shares will be issued at 95% of the market price. The valuation date will be the dividend or distribution payment date or, if that date is not a New York Stock Exchange trading day, the next trading day. If NAV exceeds the market price of Fund shares at such time, or if the Fund should declare an income dividend or capital gains distribution payable only in cash, the Plan Agent will, as agent for the participants, buy Fund shares in the open market, on the New York Stock Exchange or elsewhere, for the participants’ accounts on, or shortly after, the payment date. If, before the Plan Agent has completed its purchases, the market price exceeds the NAV of a Fund share, the average per share purchase price paid by the Plan Agent may exceed the NAV of the Fund’s shares,
resulting in the acquisition of fewer shares than if the distribution had been paid in shares issued by the Fund on the dividend payment date. Because of the foregoing difficulty with respect to open-market purchases, the Plan provides that if the Plan Agent is unable to invest the full dividend amount in open- market purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Agent will cease making open-market purchases and will receive the uninvested portion of the dividend amount in newly issued shares at the close of business on the last purchase date.
Participants have the option of making additional cash payments of a minimum of $50 per investment to the Plan Agent for investment in the Fund’s common stock, with an annual maximum contribution of $250,000. The Plan Agent will use all such funds received from participants to purchase Fund shares in the open market within five business days after receiving the funds.
If the participant sets up recurring automatic monthly ACH debits, funds will be withdrawn from his or her U.S. bank account on the 20th of each month or the next business day if the 20th is not a banking business day and invested on the next investment date. The Plan Agent maintains all shareholder accounts in the Plan and furnishes written confirmations of all transactions in an account, including information needed by stockholders for personal and tax records. Shares in the account of each Plan participant will be held by the Plan Agent in the name of the participant, and each shareholder’s proxy will include those shares purchased pursuant to the Plan. There is no charge to participants for reinvesting dividends or capital gains distributions or voluntary cash payments. The Plan Agent’s fees for the reinvestment of dividends, capital gains distributions and voluntary cash payments will be paid by the Fund. There will be no charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in stock or in cash. However, each participant will pay a per share fee (currently $0.02) incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends, capital gains distributions and voluntary cash payments made by the participant. Per share fees include any applicable brokerage commissions the Plan Agent is required to pay.
Participants also have the option of selling their shares through the Plan. The Plan supports two types of sales orders. Batch order sales are submitted on each market day and will be grouped with other sale requests to be sold. The price will be the average sale price obtained by Computershare’s broker, net of fees, for each batch order and will be sold generally within 2 business days of the request during regular open market hours. Please note that all written sales requests are always processed by Batch Order. ($10 and $0.12 per share). Market
18 The India Fund, Inc.
Dividend Reinvestment and Optional Cash Purchase Plan (unaudited) (concluded)
Order sales will sell at the next available trade. The shares are sold real time when they hit the market, however an available trade must be presented to complete this transaction. Market Order sales may only be requested by phone or using Investor Center. ($25 and $0.12 per share).
The receipt of dividends and distributions under the Plan will not relieve participants of any income tax that may be payable on such dividends or distributions. Experience under the Plan may indicate that changes in the Plan are desirable. Accordingly, the Fund and the Plan Agent reserve the right to terminate the Plan as applied to any voluntary cash
payments made and any dividend or distribution paid subsequent to notice of the termination sent to members of the Plan at least 30 days before the record date for such dividend or distribution. The Plan also may be amended by the Fund or the Plan Agent, but (except when necessary or appropriate to comply with applicable law, rules or policies of a regulatory authority) only by at least 30 days’ written notice to participants in the Plan. All correspondence concerning the Plan should be directed to the Plan Agent at Computershare Trust Company N.A., P.O. Box 505000, Louisville, KY 40233-5000.
The India Fund, Inc. 19
[THIS PAGE INTENTIONALLY LEFT BLANK]
Corporate Information
Directors
Alan Goodson
Nisha Kumar
Nancy Yao Maasbach
Luis F. Rubio
Jeswald W. Salacuse, Chairman
Hugh Young
Investment Manager
Aberdeen Standard Investments (Asia) Limited
21 Church Street
#01-01 Capital Square Two
Singapore 049480
Administrator
Aberdeen Standard Investments Inc.
1900 Market Street, Suite 200
Philadelphia, PA 19103
Custodian
State Street Bank and Trust Company
1 Heritage Drive, 3rd Floor
North Quincy, MA 02171
Transfer Agent
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, KY 40233
Independent Registered Public Accounting Firm
KPMG LLP
1601 Market Street
Philadelphia, PA 19103
Legal Counsel
Dechert LLP
1900 K Street, N.W.
Washington, DC 20006
Investor Relations
Aberdeen Standard Investments Inc.
1900 Market Street, Suite 200
Philadelphia, PA 19103
1-800-522-5465
Investor.Relations@aberdeenstandard.com
Aberdeen Standard Investments (Asia) Limited
The accompanying Financial Statements as of June 30, 2021 were not audited and accordingly, no opinion is expressed thereon.
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Fund may purchase, from time to time, shares of its common stock in the open market.
Shares of The India Fund, Inc. are traded on the NYSE under the symbol “IFN”. Information about the Fund’s net asset value and market price is available at www.aberdeenifn.com.
This report, including the financial information herein, is transmitted to the shareholders of The India Fund, Inc. for their general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person. Past performance is no guarantee of future returns.
IFN-SEMI-ANNUAL
Item 2 - Code of Ethics.
Not applicable to semi-annual report on Form N-CSR.
Item 3 - Audit Committee Financial Expert.
Not applicable to semi-annual report on Form N-CSR.
Item 4 - Principal Accountant Fees and Services.
Not applicable to semi-annual report on Form N-CSR.
Item 5 - Audit Committee of Listed Registrants.
Not applicable to semi-annual report on Form N-CSR.
Item 6 - Investments.
| (a) | Schedule of Investments in securities of unaffiliated issuers as of close of the reporting period is included as part of the Reports to Stockholders filed under Item 1 of this Form N-CSR. |
Item 7 - Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable to semi-annual report on Form N-CSR.
Item 8 - Portfolio Managers of Closed-End Management Investment Companies.
(a) Not applicable to semi-annual report on Form N-CSR.
(b) During the period ended June 30, 2021, there were no changes in the Portfolio Managers.
Item 9 - Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
No such purchases were made by or on behalf of the Registrant during the period covered by the report.
Item 10 - Submission of Matters to a Vote of Security Holders.
During the period ended June 30, 2021, there were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Directors.
Item 11. Controls and Procedures.
| (a) | The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the Registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d15(b)). |
| (b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the Registrant’s last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 12. Exhibits.
| (a)(4) | Change in the registrant’s independent public accountant – Not applicable for this reporting period. |
| (c) | A copy of the Registrant’s notices to stockholders, which accompanied distributions paid, pursuant to the Registrant’s Managed Distribution Policy since the Registrant’s last filed N-CSR, are filed herewith as Exhibits 12(c)(1) and 12(c)(2) as required by the terms of the Registrant’s SEC exemptive order. |
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.
| (Registrant) | The India Fund, Inc. | |
| By (Signature and Title): | /s/ Alan Goodson | |
| | Alan Goodson, Principal Executive Officer | |
Date: September 7, 2021
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
| By (Signature and Title): | /s/ Alan Goodson | |
| | Alan Goodson, Principal Executive Officer | |
Date: September 7, 2021
| By (Signature and Title): | /s/ Andrea Melia | |
| | Andrea Melia, Principal Financial Officer | |
Date: September 7, 2021
