<Page>
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 No. 811-06024
-----------------------------------------
THE INDONESIA FUND, INC.
---------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
466 Lexington Avenue, New York, New York 10017-3140
---------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
J. Kevin Gao, Esq.
The Indonesia Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3140
Registrant's telephone number, including area code: (212) 875-3500
Date of fiscal year end: December 31st
Date of reporting period: January 1, 2005 to December 31, 2005
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS.
<Page>
THE INDONESIA FUND, INC.
ANNUAL REPORT
DECEMBER 31, 2005
[AMERICAN STOCK EXCHANGE(R) LISTED IF(TM) LOGO]
IF-AR-1205
<Page>
CONTENTS
<Table>
Letter to Shareholders 1
Portfolio Summary 3
Schedule of Investments 4
Statement of Assets and Liabilities 6
Statement of Operations 7
Statement of Changes in Net Assets 8
Financial Highlights 10
Notes to Financial Statements 12
Report of Independent Registered Public Accounting Firm 16
Results of Annual Meeting of Shareholders 17
Tax Information 17
Description of InvestLink(SM) Program 18
Information Concerning Directors and Officers 21
Advisory Agreement Approval Disclosure 24
Proxy Voting and Portfolio Holdings Information 28
</Table>
<Page>
LETTER TO SHAREHOLDERS
February 1, 2006
DEAR SHAREHOLDER:
For the year ended December 31, 2005, The Indonesia Fund, Inc. (the "Fund") had
a gain in its net asset value of 18.19%, vs. an increase of 15.11% for the
Morgan Stanley Capital International Indonesia Index (net dividends).* Based on
market price, the Fund's shares rose 13.29% during the year. As a result, the
Fund's discount to its NAV stood at 4.00% on December 31, 2005, compared with a
discount of 0.20% at the beginning of the period.
THE MARKET: REBOUNDING FROM THIRD QUARTER VOLATILITY
The year was a positive one for stock markets around the world, aided by
optimism over global economic growth and generally favorable earnings reports.
Emerging markets as a group had overall strong returns in absolute terms and as
compared with developed stock markets, helped in part by high and rising
commodity prices, which for many commodity-exporting emerging economies resulted
in stronger financial profiles.
Indonesia had a solid gain in absolute terms but trailed the wider emerging
markets group. This reflected turbulence in 2005's third quarter, when
Indonesian stocks fell sharply as weakness in the Rupiah currency spilled over
into local stock and bond markets. Uncertainty related to popular government
fuel subsidies amid high oil prices also hindered investor sentiment at this
time. However, the market soon stabilized as the Bank of Indonesia took steps to
shore up the country's currency, while the government signaled a partial
elimination of fuel subsidies. Indonesian equities finished the year on a strong
note, supported by optimism that inflation and interest rates could peak
relatively soon.
THE PORTFOLIO: AIDED BY STOCK SELECTION
The Fund's outperformance was attributable in part to good stock selection in
the food & kindred products and tobacco sectors. We held a large absolute and
relative weighting in longtime holding PT Hanjaya Mandala Sampoerna Tbk, which
rallied in the first half of the year on Phillip Morris' takeover bid. We
accepted the offer and sold the position in May.
Elsewhere, the Fund's investments in the materials and telecommunications
sectors aided its performance. The Fund's triple overweighting in the capital
goods sector also added value, as the sector outperformed during the year. The
Fund's underweighting in the bank sector, which had lackluster performance amid
a rising cost of capital, proved beneficial as well. On the negative side,
relatively speaking, the Fund's energy and technology-related stocks
underperformed.
OUTLOOK: CAUTIOUS NEAR TERM
In the wake of several years of solid performance, and with a seeming lack of
significant positive catalysts on the near horizon, Indonesian equities could
trade sideways or head lower over the next few months. We remain optimistic
regarding the market's long term prospects, with the view that local and global
macroeconomic factors, along with political trends, should ultimately prove
supportive. Here are some of the issues we deem noteworthy headed into the new
year.
- - We view Susilo Bambang Yudhoyono's recent Cabinet reshuffle as positive, if
expected. The government's new economic team installed at the end of 2005
will likely need time to prove themselves, as should new anti-corruption
efforts that are being pursued.
- - Economic growth has been slowing, but appears stable. How much fuel price
hikes will hinder growth going forward is not clear.
1
<Page>
LETTER TO SHAREHOLDERS
- - The Bank of Indonesia has been increasing short-term interest rates, which
stood at 12.75% in December, and has signaled further hikes ahead.
Inflation could begin to slow--perhaps into single-digit rates in
2006--though there may be near-term pressures in the way of higher
electricity and phone tariffs along with minimum wage hikes.
- - Our anecdotal read on consumption is mixed -- we continue to monitor this
closely as domestic consumption accounts for about 65% - 70% of the
Indonesian economy.
- - Overall, we expect aggregate market earnings to be downgraded in 2006,
leaving Indonesian equities at the higher end of their historical trading
band.
Within the Fund, we are maintaining an underweight position in the banking
sector, based on general earnings risk compounded by an extended period of
aggressive loan growth, which we think could spell significantly higher
non-performing loans in coming quarters. Overall, our near-term caution is
reflected in our total investment in Indonesian assets, which accounted for
about 89% of the portfolio at the end of 2005.
Sincerely,
/s/ Boon Hong Yeo /s/ Steven B. Plump
Boon Hong Yeo Steven B. Plump
Chief Investment Officer** Chief Executive Officer and President***
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS. THERE ARE ALSO RISKS ASSOCIATED WITH INVESTING IN INDONESIA,
INCLUDING THE RISK OF INVESTING IN A SINGLE-COUNTRY FUND.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS FORWARD-LOOKING
STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND FOREIGN MARKET,
INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT REGULATION AND
THEIR POTENTIAL IMPACT ON THE FUND'S INVESTMENT PORTFOLIO. THESE STATEMENTS ARE
SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS, DEVELOPMENTS AND
REGULATIONS IN THE FUTURE AND THEIR IMPACT ON THE FUND COULD BE MATERIALLY
DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE FUND HAS NO
OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
- ----------
*The Morgan Stanley Capital International Indonesia Index is an unmanaged index
(with no defined investment objective) of Indonesian equities that includes
reinvestment of net dividends, and is the exclusive property of Morgan Stanley
Capital International Inc. Investors cannot invest directly in an index.
** Boon Hong Yeo, who is a Director of Credit Suisse Asset Management Limited
("Credit Suisse Australia"), the Fund's sub-adviser, is primarily responsible
for management of the Fund's assets. He has served the Fund in such capacity
since January 17, 2003. Mr. Yeo joined Credit Suisse Australia in 2002 from AIB
Govett (Asia) Limited in Singapore, where he was Director of Private Equity and
managed Asian equity portfolios. Previously, he was founder and Managing
Director of Zenith Asset Management Singapore; and held various positions in
Asian equity portfolio management, investment banking and corporate banking in
Singapore.
*** Steven B. Plump is a Managing Director of Credit Suisse Asset Management,
LLC ("Credit Suisse") and CEO/President of the Fund. He joined Warburg Pincus
Asset Management ("WPAM") in 1995 and came to Credit Suisse in 1999 when it
acquired WPAM.
2
<Page>
THE INDONESIA FUND, INC.
PORTFOLIO SUMMARY - AS OF DECEMBER 31, 2005 (UNAUDITED)
[CHART]
SECTOR ALLOCATION
AS A PERCENT OF NET ASSETS
<Table>
<Caption>
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------
Automotive 7.65% 9.51%
Banks 19.52% 21.44%
Building Products-Cement/Aggregate 2.97% 2.64%
Coal Mining & Steel 3.06% 0.00%
Gas-Distribution 7.51% 1.46%
Machinery-Construction & Mining 3.78% 4.75%
Medical-Drugs 2.48% 4.59%
Oil Exploration & Production 5.23% 0.00%
Retail-Major Department Stores 4.65% 1.41%
Telecommunications 25.84% 23.69%
Tobacco 1.56% 18.14%
Other Sectors 12.21% 11.38%
Cash & Other Assets 3.54% 0.99%
</Table>
TOP 10 HOLDINGS, BY ISSUER
<Table>
<Caption>
PERCENT OF
HOLDING SECTOR NET ASSETS
- ---------------------------------------------------------------------------------------
1. PT Telekomunikasi Indonesia Telecommunications 21.5
2. PT Astra International Tbk Automotive 7.7
3. PT Perusahaan Gas Negara Gas-Distribution 7.5
4. PT Bank Central Asia Tbk Banks 5.4
5. PT Indosat Tbk Telecommunications 4.4
6. PT Bank Mandiri Banks 4.2
7. PT Bank Rakyat Indonesia Banks 4.0
8. PT United Tractors Tbk Machinery-Construction & Mining 3.8
9. PT Medco Energi Internasional Tbk Oil Exploration & Production 3.5
10. PT Bumi Resources Tbk Coal Mining & Steel 3.1
</Table>
3
<Page>
THE INDONESIA FUND, INC.
SCHEDULE OF INVESTMENTS - DECEMBER 31, 2005
<Table>
<Caption>
NO. OF
DESCRIPTION SHARES VALUE
- -------------------------------------------------- ------------ ------------
EQUITY OR EQUITY-LINKED SECURITIES-96.46%
INDONESIA-89.31%
AUTOMOTIVE-7.65%
PT Astra International Tbk 3,681,461 $ 3,793,184
------------
BANKS-17.23%
PT Bank Central Asia Tbk 7,802,500 2,682,489
PT Bank Danamon Indonesia Tbk 2,113,000 1,015,766
PT Bank Internasional Indonesia Tbk 31,119,000 490,187
PT Bank Mandiri 12,580,000 2,087,216
PT Bank Pan Indonesia Tbk 6,601,000 280,220
PT Bank Rakyat Indonesia 6,493,000 1,986,322
------------
8,542,200
------------
BUILDING & CONSTRUCTION-MISCELLANEOUS-0.83%
PT Adhi Karya Tbk 5,657,000 411,171
------------
BUILDING PRODUCTS-CEMENT/AGGREGATE-2.97%
PT Indocement Tunggal Prakarsa Tbk+ 4,111,000 1,473,530
------------
COAL MINING & STEEL-3.06%
PT Bumi Resources Tbk 19,677,000 1,515,870
------------
FOOD & KINDRED PRODUCTS-0.54%
PT Indofood Sukses Makmur Tbk 2,911,000 267,828
------------
GAS-DISTRIBUTION-7.51%
PT Perusahaan Gas Negara 5,339,500 3,723,407
------------
MACHINERY-CONSTRUCTION & MINING-3.78%
PT United Tractors Tbk 5,044,200 1,872,877
------------
MEDICAL-DRUGS-2.48%
PT Kalbe Farma Tbk 9,690,800 972,008
PT Tempo Scan Pacific Tbk 448,500 255,752
------------
1,227,760
------------
OIL EXPLORATION & PRODUCTION-5.23%
PT Energi Mega Persada Tbk+ 11,616,000 $ 881,271
PT Medco Energi Internasional Tbk 5,008,000 1,712,608
------------
2,593,879
------------
REAL ESTATE OPERATIONS/DEVELOPMENT-0.85%
PT Summarecon Agung Tbk 5,572,000 423,386
------------
RETAIL-COMPUTER EQUIPMENT-1.59%
PT Multipolar Corporation Tbk 50,000,000 787,602
------------
RETAIL-MAJOR DEPARTMENT STORES-4.65%
PT Matahari Putra Prima Tbk 11,668,000 1,132,753
PT Mitra Adiperkasa Tbk 5,728,000 510,318
PT Ramayana Lestari Sentosa Tbk 8,103,500 664,685
------------
2,307,756
------------
RUBBER-TIRES-2.07%
PT Gajah Tunggal Tbk+ 18,145,000 1,026,944
------------
SOAP & CLEANING PREPARATION-1.47%
PT Unilever Indonesia Tbk 1,678,000 729,009
------------
TELECOMMUNICATIONS-25.84%
PT Indosat Tbk 3,822,000 2,169,745
PT Telekomunikasi Indonesia 17,856,560 10,641,293
------------
12,811,038
------------
TOBACCO-1.56%
PT Gudang Garam Tbk 654,500 770,973
------------
TOTAL INDONESIA
(Cost $29,827,236) 44,278,414
------------
HONG KONG-0.85%
APPAREL MANUFACTURERS-0.85%
Ports Design Ltd.
(Cost $123,796) 362,000 421,128
------------
</Table>
See accompanying notes to financial statements.
4
<Page>
<Table>
<Caption>
NO. OF
DESCRIPTION SHARES/UNITS VALUE
- --------------------------------------------------------------------------------
INDIA-2.29%
BANKS-2.29%
Reliance Industries (ABN AMRO),
Regulation S, ELN, warrants
expiring 02/24//06+
(Cost $729,657) 57,400 $ 1,133,087
------------
SINGAPORE-2.12%
ENGINEERING/R&D SERVICES-2.12%
SembCorp Industries Ltd.
(Cost $840,797) 638,520 1,049,672
------------
TAIWAN-1.45%
ELECTRONIC COMPONENTS-MISCELLANEOUS-1.45%
Chi Mei Optoelectronics Corp.
(Cost $642,842) 48,528 718,506
------------
THAILAND-0.44%
BUILDING-HEAVY CONSTRUCTION-0.44%
Italian-Thai Development
Public Company Ltd.
(Cost $259,153) 1,085,000 218,323
------------
TOTAL EQUITY OR EQUITY-LINKED
SECURITIES (Cost $32,423,481) 47,819,130
------------
<Caption>
PRINCIPAL
DESCRIPTION AMOUNT (000'S) VALUE
- --------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-3.91%
GRAND CAYMAN-3.91%
Wachovia Bank, overnight
deposit, 3.05%, 01/03/06*
(Cost $1,940,000) 1,940 $ 1,940,000
------------
TOTAL INVESTMENTS-100.37%
(Cost $34,363,481) (Notes B,E,G) 49,759,130
------------
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS-(0.37)% (183,505)
------------
NET ASSETS-100.00% $ 49,575,625
============
</Table>
- ----------
+ Non-income producing security.
* Variable rate account. Rate resets on a daily basis; amounts are available
on the same business day.
ELN Equity linked note.
See accompanying notes to financial statements.
5
<Page>
THE INDONESIA FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - DECEMBER 31, 2005
<Table>
ASSETS
Investments, at value (Cost $34,363,481 ) (Notes B,E,G) $ 49,759,130
Cash (including $782 of foreign currencies with a cost of $780) 1,501
Prepaid expenses 1,844
--------------
Total Assets 49,762,475
--------------
LIABILITIES
Payables:
Investment advisory fees (Note C) 116,150
Administration fees (Note C) 4,166
Directors' fees 1,835
Other accrued expenses 64,699
--------------
Total Liabilities 186,850
--------------
NET ASSETS (applicable to 8,266,202 shares of common stock outstanding) (Note D) $ 49,575,625
==============
NET ASSETS CONSIST OF
Capital stock, $0.001 par value; 8,266,202 shares issued and outstanding
(100,000,000 shares authorized) $ 8,266
Paid-in capital 52,050,643
Undistributed net investment income 10,942
Accumulated net realized loss on investments and foreign
currency related transactions (17,889,877)
Net unrealized appreciation in value of investments and
translation of other assets and liabilities denominated in foreign currencies 15,395,651
--------------
Net assets applicable to shares outstanding $ 49,575,625
==============
NET ASSET VALUE PER SHARE ($49,575,625 DIVIDED BY 8,266,202) $ 6.00
==============
MARKET PRICE PER SHARE $ 5.76
==============
</Table>
See accompanying notes to financial statements.
6
<Page>
STATEMENT OF OPERATIONS - FOR THE YEAR ENDED DECEMBER 31, 2005
<Table>
INVESTMENT INCOME
Income (Note B):
Dividends $ 1,179,722
Interest 58,099
Less: Foreign taxes withheld (197,866)
--------------
Total Investment Income 1,039,955
--------------
Expenses:
Investment advisory fees (Note C) 466,149
Custodian fees 99,103
Audit and tax fees 46,906
Legal fees 46,502
Administration fees (Note C) 44,609
Directors' fees 33,999
Accounting fees 29,999
Printing (Note C) 24,999
Shareholder servicing fees 19,199
Stock exchange listing fees 17,502
Insurance 4,083
Miscellaneous 10,601
--------------
Total Expenses 843,651
--------------
Net Investment Income 196,304
--------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY RELATED TRANSACTIONS
Net realized gain/(loss) from:
Investments 10,215,078
Foreign currency related transactions (165,097)
Net change in unrealized appreciation in value of
investments and translation of other assets and liabilities
denominated in foreign currencies (2,657,349)
--------------
Net realized and unrealized gain on investments and foreign
currency related transactions 7,392,632
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,588,936
==============
</Table>
See accompanying notes to financial statements.
7
<Page>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
FOR THE YEARS ENDED
DECEMBER 31,
-------------------------------
2005 2004
-------------- --------------
INCREASE IN NET ASSETS
Operations:
Net investment income $ 196,304 $ 781,992
Net realized gain on investments and foreign currency
related transactions 10,049,981 3,188,176
Net change in unrealized appreciation in value of investments and
translation of other assets and liabilities denominated in
foreign currencies (2,657,349) 6,531,330
-------------- --------------
Net increase in net assets resulting from operations 7,588,936 10,501,498
-------------- --------------
Dividends to shareholders:
Net investment income (33,065) (785,289)
-------------- --------------
Total increase in net assets 7,555,871 9,716,209
-------------- --------------
NET ASSETS
Beginning of year 42,019,754 32,303,545
-------------- --------------
End of year* $ 49,575,625 $ 42,019,754
============== ==============
</Table>
- ----------
* Includes undistributed net investment income of $10,942 and $12,800,
respectively.
See accompanying notes to financial statements.
8
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This page intentionally left blank.
9
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THE INDONESIA FUND, INC.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratio to average net assets and
other supplemental data for each year indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
<Table>
<Caption>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------
2005 2004 2003 2002
----------- ----------- ----------- -----------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year $ 5.08 $ 3.91 $ 2.09 $ 1.52
----------- ----------- ----------- -----------
Net investment income/(loss) 0.02 0.09 0.03 0.01
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions 0.90 1.17 1.81 0.56
----------- ----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations 0.92 1.26 1.84 0.57
----------- ----------- ----------- -----------
Dividends and distributions to
shareholders:
Net investment income 0.00+ (0.09) (0.02) --
Net realized gain on investments and
foreign currency related transactions -- -- -- --
----------- ----------- ----------- -----------
Total dividends and distributions to
shareholders 0.00+ (0.09) (0.02) --
----------- ----------- ----------- -----------
Net asset value, end of year $ 6.00 $ 5.08 $ 3.91 $ 2.09
=========== =========== =========== ===========
Market value, end of year $ 5.76 $ 5.07 $ 4.83 $ 1.65
=========== =========== =========== ===========
Total investment return (a) 13.69% 6.72% 194.19% 25.00%
=========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000 omitted) $ 49,576 $ 42,020 $ 32,304 $ 17,317
Ratio of expenses to average net assets 1.81% 2.03% 2.65% 2.69%
Ratio of net investment income/(loss) to
average net assets 0.42% 2.24% 1.23% 0.36%
Portfolio turnover rate 67.87% 43.59% 95.66% 29.15%
</Table>
- ----------
* Based on actual shares outstanding on June 8, 2001 (prior to the Agreement
and Plan of Reorganization effective June 11, 2001 between the Fund and
Jakarta Growth Fund) and December 31, 2001.
+ Amount is less than a $0.01.
(a) Total investment return at market value is based on the changes in market
price of a share during the year and assumes reinvestment of dividends and
distributions, if any, at actual prices pursuant to the Fund's dividend
reinvestment program.
(b) Excluding merger-related fees, the ratio of expenses to average net assets
would have been 4.31%.
(c) Excluding merger-related fees, the ratio of expenses to average net assets
would have been 4.13%.
See accompanying notes to financial statements.
10
<Page>
<Table>
<Caption>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------------------------
2001 2000 1999 1998 1997 1996
----------- ----------- ----------- ----------- ----------- -----------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year $ 1.72 $ 4.48 $ 2.71 $ 3.58 $ 10.68 $ 9.34
----------- ----------- ----------- ----------- ----------- -----------
Net investment income/(loss) (0.13)* (0.13) (0.05) (0.04) 0.03 0.01
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transaction (0.07) (2.63) 1.87 (0.83) (7.13) 1.33
----------- ----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets
resulting from operations (0.20) (2.76) 1.82 (0.87) (7.10) 1.34
----------- ----------- ----------- ----------- ----------- -----------
Dividends and distributions to
shareholders:
Net investment income -- -- -- -- -- --
Net realized gain on investments and
foreign currency related transactions -- -- (0.05) -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total dividends and distributions to
shareholders -- -- (0.05) -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Net asset value, end of year $ 1.52 $ 1.72 $ 4.48 $ 2.71 $ 3.58 $ 10.68
=========== =========== =========== =========== =========== ===========
Market value, end of year $ 1.32 $ 1.563 $ 5.438 $ 3.438 $ 4.625 $ 9.750
=========== =========== =========== =========== =========== ===========
Total investment return (a) (15.52)% (71.26)% 59.58% (25.68) (52.56)% (3.70)%
=========== =========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000 omitted) $ 12,545 $ 7,935 $ 20,669 $ 12,491 $ 16,486 $ 49,223
Ratio of expenses to average net assets 8.89%(b) 7.23%(c) 3.18% 4.21% 1.89% 1.91
Ratio of net investment income/(loss) to
average net assets (5.63)% (4.85)% (1.43)% (1.37)% 0.33% 0.10
Portfolio turnover rate 10.23% 16.48% 47.38% 36.58% 48.19% 34.67
</Table>
11
<Page>
THE INDONESIA FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A. ORGANIZATION
The Indonesia Fund, Inc. (the "Fund") was incorporated in Maryland on January 8,
1990 and commenced investment operations on March 9, 1990. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
closed-end, non-diversified management investment company.
NOTE B. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
SECURITY VALUATION: The net asset value of the Fund is determined daily as of
the close of regular trading on the New York Stock Exchange, Inc. (the
"Exchange") on each day the Exchange is open for business. The Fund's equity
investments are valued at market value, which is generally determined using the
closing price on the exchange or market on which the security is primarily
traded at the time of valuation (the "Valuation Time"). If no sales are
reported, equity investments are generally valued at the most recent bid
quotation as of the Valuation Time or at the lowest ask quotation in the case of
a short sale of securities. Debt securities with a remaining maturity greater
than 60 days are valued in accordance with the price supplied by a pricing
service, which may use a matrix, formula or other objective method that takes
into consideration market indices, yield curves and other specific adjustments.
Debt obligations that will mature in 60 days or less are valued on the basis of
amortized cost, which approximates market value, unless it is determined that
this method would not represent fair value. Investments in mutual funds are
valued at the mutual fund's closing net asset value per share on the day of
valuation.
Securities and other assets for which market quotations are not readily
available, or whose values have been materially affected by events occurring
before the Fund's Valuation Time, but after the close of the securities' primary
market, are valued at fair value as determined in good faith by, or under the
direction of, the Board of Directors under procedures established by the Board
of Directors. The Fund may utilize a service provided by an independent third
party which has been approved by the Board of Directors to fair value certain
securities. When fair-value pricing is employed, the prices of securities used
by a fund to calculate its net asset value may differ from quoted or published
prices for the same securities. The Fund's estimate of fair value assumes a
willing buyer and a willing seller neither acting under the compulsion to buy or
sell.
SHORT-TERM INVESTMENTS: The Fund sweeps available cash into a short-term time
deposit available through Brown Brothers Harriman & Co., the Fund's custodian.
The short-term time deposit is a variable rate account classified as a
short-term investment.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on a trade date basis. The cost of investments sold is determined
by use of the specific identification method for both financial reporting and
U.S. income tax purposes. Interest income is accrued as earned; dividend income
is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. income or excise taxes as it is the Fund's
intention to continue to qualify as a regulated investment company and to make
the requisite distributions to its shareholders sufficient to relieve it from
all or substantially all U.S. income and excise taxes.
12
<Page>
Income received by the Fund from sources within Indonesia and other foreign
countries may be subject to withholding and other taxes imposed by such
countries.
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
valuation date rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses on investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to changes in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances.
The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such foreign currency related transactions are
treated as ordinary income for U.S. 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.
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.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, including capital loss carryovers, if any. An
additional distribution may be made to the extent necessary to avoid the payment
of a 4% U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
income tax purposes due to U.S. generally accepted accounting principles/tax
differences in the character of income and expense recognition.
OTHER: The Fund invests in securities of foreign countries and governments which
involve certain risks in addition to those inherent in domestic investments.
Such risks generally include, among others, currency risk (fluctuations in
currency exchange rates), information risk (key information may be inaccurate or
unavailable) and political risk (expropriation, nationalization or the
imposition of capital or currency controls or punitive taxes). Other risks of
investing in foreign securities include liquidity and valuation risks.
13
<Page>
Securities denominated in currencies other than U.S. dollars are subject to
changes in value due to fluctuations in exchange rates.
Investment in Indonesian and other foreign securities requires consideration of
certain factors that are not normally involved in investments in U.S.
securities. The Indonesian securities market is an emerging market characterized
by a small number of company listings, high price volatility and a relatively
illiquid secondary trading environment. These factors, coupled with restrictions
on investment by foreigners and other factors, limit the supply of securities
available for investment by the Fund. This will affect the rate at which the
Fund is able to invest in Indonesian and other foreign securities, the purchase
and sale prices for such securities and the timing of purchases and sales.
The limited liquidity of the Indonesian and other foreign securities markets may
also affect the Fund's ability to acquire or dispose of securities at a price
and time that it wishes to do so. Accordingly, in periods of rising market
prices, the Fund may be unable to participate in such price increases fully to
the extent that it is unable to acquire desired portfolio positions quickly;
conversely the Fund's inability to dispose fully and promptly of positions in
declining markets will cause its net asset value to decline as the value of
unsold positions is marked to lower prices.
NOTE C. AGREEMENTS
Credit Suisse Asset Management, LLC ("Credit Suisse"), serves as the Fund's
investment adviser with respect to all investments. Credit Suisse receives as
compensation for its advisory services from the Fund, an annual fee, calculated
weekly and paid quarterly, equal to 1.00% of the Fund's average weekly net
assets. For the year ended December 31, 2005, Credit Suisse earned $466,149 for
advisory services. Credit Suisse also provides certain administrative services
to the Fund and is reimbursed by the Fund for costs incurred on behalf of the
Fund (up to $20,000 per annum). For the year ended December 31, 2005, Credit
Suisse was reimbursed $6,301 for administrative services rendered to the Fund.
Credit Suisse Asset Management Limited ("Sub-Adviser") serves as the Fund's
sub-investment adviser. Credit Suisse currently pays the Sub-Adviser on a
quarterly basis a fee of 90% of the net quarterly amount received by Credit
Suisse as the Fund's investment adviser. The Fund does not pay the Sub-Adviser.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's administrator.
The Fund pays BSFM a monthly fee that is calculated weekly based on the Fund's
average weekly net assets. For the year ended December 31, 2005, BSFM earned
$38,308 for administrative services.
Merrill Corporation ("Merrill"), an affiliate of Credit Suisse, has been engaged
by the Fund to provide certain financial printing services. For the year ended
December 31, 2005, Merrill was paid $22,531 for its services to the Fund.
NOTE D. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001, par value. Of the 8,266,202 shares outstanding at December 31, 2005,
Credit Suisse owned 7,169 shares.
NOTE E. INVESTMENT IN SECURITIES
For the year ended December 31, 2005, purchases and sales of securities, other
than short-term investments, were $29,916,958 and $31,251,655, respectively.
NOTE F. CREDIT FACILITY
The Fund, together with other funds/portfolios advised by Credit Suisse
(collectively, the "Participating Funds"), participates in a $75 million
committed, unsecured, line of credit facility ("Credit Facility") with Deutsche
Bank, A.G. as administrative agent and syndication agent and
14
<Page>
State Street Bank and Trust Company as operations agent for temporary or
emergency purposes. Under the terms of the Credit Facility, the Participating
Funds pay an aggregate commitment fee at a rate of 0.10% per annum on the
average unused amount of the Credit Facility, which is allocated among the
Participating Funds in such manner as is determined by the governing Boards of
the Participating Funds. In addition, the Participating Funds pay interest on
borrowings at the Federal Funds rate plus 0.50%. During the year ended December
31, 2005, the Fund had no borrowings under the Credit Facility.
NOTE G. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP. These differences are
primarily due to differing treatments of foreign currency transactions, losses
deferred due to wash sales and Post-October losses (as later defined).
The tax character of dividends and distributions paid during the years ended
December 31, for the Fund were as follows:
<Table>
<Caption>
ORDINARY INCOME
-----------------------------
2005 2004
------------- -------------
$ 33,065 $ 785,289
</Table>
Under current tax law, certain capital losses realized after October 31 within a
taxable year may be deferred and treated as occurring on the first day of the
following tax year ("Post-October losses"). For the tax year ended December 31,
2005, the Fund elected to defer net realized losses of $11,296.
The tax basis of components of distributable earnings differ from the amounts
reflected in the Statement of Assets and Liabilities by temporary book/tax
differences. These differences are primarily due to losses deferred on wash
sales and Post-October losses. At December 31, 2005, the components of
distributable earnings on a tax basis for the Fund were as follows:
<Table>
Undistributed ordinary income $ 10,942
Accumulated net realized loss (17,164,129)
Unrealized appreciation 14,681,199
--------------
Total accumulated deficit $ (2,471,988)
==============
</Table>
At December 31, 2005, the Fund had a capital loss carryover for U.S. federal
income tax purposes of $17,164,129 of which $7,037,610 expires in 2006;
$1,782,694 expires in 2007; $5,937,713 expires in 2008 ($2,211,704 of capital
loss carryforward expiring in 2008 is subject to annual limitations of
$292,278), $1,720,106 expires in 2009 and $686,006 expires in 2010. During the
year ended December 31, 2005, the Fund utilized capital loss carryovers of
$9,482,654. It is uncertain whether the Fund will be able to realize the
benefits before they expire.
At December 31, 2005, the identified cost for federal income tax purposes, as
well as the gross unrealized appreciation from investments for those securities
having an excess of value over cost, gross unrealized depreciation from
investments for those securities having an excess of cost over value and the net
unrealized appreciation from investments were $35,077,933, $16,083,321,
$(1,402,124), and $14,681,197, respectively.
At December 31, 2005, the Fund reclassified $165,097 from accumulated net
realized loss on foreign currency related transactions to undistributed net
investment income. Net assets were not affected by these reclassifications.
15
<Page>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
of The Indonesia Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations, of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Indonesia Fund, Inc. (the
"Fund") at December 31, 2005, the results of its operations for the year then
ended, the changes in its net assets for each of the two years in the period
then ended, and the financial highlights for each of the ten years in the period
then ended, in conformity with accounting principles generally accepted in the
United States of America. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
December 31, 2005 by correspondence with the custodian, provide a reasonable
basis for our opinion.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
February 17, 2006
16
<Page>
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
On April 22, 2005, the Annual Meeting of Shareholders of The Indonesia Fund,
Inc. (the "Fund") (the "Meeting") was held and the following matter was voted
upon:
(1) To re-elect two directors to the Board of Directors of the Fund:
<Table>
<Caption>
NAME OF DIRECTOR FOR WITHHELD
- ---------------- --------- ---------
Lawrence J. Fox 5,557,384 53,573
Michael E. Kenneally 5,556,732 54,225
</Table>
Effective December 6, 2005, Michael E. Kenneally resigned as a Director of the
Fund.
TAX INFORMATION (UNAUDITED)
The Fund is required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise its shareholders within 60 days of the Fund's year end
(December 31, 2005) as to the U.S. federal tax status of dividends and
distributions received by the Fund's shareholders in respect of such year. The
$0.0040 per share dividend paid in respect of such year, is represented entirely
by net investment income. The Fund has met the requirements to pass through all
ordinary income as qualified dividends as noted on Box 1B on Form 1099-DIV.
Please note that to utilize the lower tax rate for qualifying dividend income
shareholders must have held their shares in the Fund for at least 61 days during
the 121 day period beginning 60 days before the ex-dividend date.
Notification for calendar year 2005 was mailed in January 2006. The notification
along with Form 1099-DIV reflects the amount to be used by calendar year
taxpayers on their U.S. federal income tax returns.
Foreign shareholders will generally be subject to U.S. withholding tax on the
amount of the actual ordinary dividends paid by the Fund. They will generally
not be entitled to foreign tax credit or deduction for the withholding taxes
paid by the Fund.
In general, dividends and distributions received by tax-exempt recipients (e.g.,
IRAs and Keoghs) need not be reported as taxable income for U.S. federal income
tax purposes. However, some retirement trusts (e.g., corporate, Keogh and
403(b)(7) plans) may need this information for their annual information
reporting.
Shareholders are advised to consult their own tax advisers with respect to the
tax consequences of their investment in the Fund.
17
<Page>
DESCRIPTION OF INVESTLINK(SM) PROGRAM (UNAUDITED)
The InvestLink(SM) Program is sponsored and administered by Computershare Trust
Company, N.A., ("Computershare"), not by The Indonesia Fund, Inc. (the "Fund").
Computershare will act as program administrator (the "Program Administrator") of
the InvestLink(SM) Program (the "Program"). The purpose of the Program is to
provide existing shareholders with a simple and convenient way to invest
additional funds and reinvest dividends in shares of the Fund's common stock
("Shares") at prevailing prices, with reduced brokerage commissions and fees.
In order to participate in the Program, you must be a registered holder of at
least one Share of stock of the Fund. Purchases of Shares with funds from a
participant's cash payment or automatic account deduction will begin on the next
day on which funds are invested. All cash payments must be drawn on a U.S. bank
and payable in U.S. dollars. Checks must be made payable to Computershare. If a
participant selects the dividend reinvestment option, automatic investment of
dividends generally will begin with the next dividend payable after the Program
Administrator receives his enrollment form. Once in the Program, a person will
remain a participant until he terminates his participation or sells all Shares
held in his Program account, or his account is terminated by the Program
Administrator. A participant may change his investment options at any time by
requesting a new enrollment form and returning it to the Program Administrator.
A participant will be assessed certain charges in connection with his
participation in the Program. All optional cash deposit investments will be
subject to a service charge. Sales processed through the Program will have a
service fee deducted from the net proceeds, after brokerage commissions. In
addition to the transaction charges outlined above, participants will be
assessed per share processing fees (which include brokerage commissions.)
Participants will not be charged any fee for reinvesting dividends.
The number of Shares to be purchased for a participant depends on the amount of
his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
investment date for cash payments is the 25th day of each month (or the next
trading day if the 25th is not a trading day). The investment date for dividend
reinvestment is the dividend payment date. The Program Administrator uses
dividends and funds of participants to purchase Shares of the Fund in the open
market. Such purchases will be made by participating brokers as agent for the
participants using normal cash settlement practices. All Shares purchased
through the Program will be allocated to participants as of the settlement date,
which is usually three business days from the purchase date. In all cases,
transaction processing will occur within 30 days of the receipt of funds, except
where temporary curtailment or suspension of purchases is necessary to comply
with applicable provisions of the Federal Securities laws or when unusual market
conditions make prudent investment impracticable. In the event the Program
Administrator is unable to purchase Shares within 30 days of the receipt of
funds, such funds will be returned to the participants.
The average price of all Shares purchased by the Program Administrator with all
funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period. All sale requests
having an anticipated market value of $100,000.00 or more are expected to be
submitted in written form.
18
<Page>
In addition, all sale requests received by the Program Administrator within
thirty (30) days of an address change are expected to be submitted in written
form.
Computershare, as Program Administrator, administers the Program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Each participant in the Program
will receive a statement of his account following each purchase of Shares. The
statements will also show the amount of dividends credited to such participant's
account (if applicable), as well as the fees paid by the participant. In
addition, each participant will receive copies of the Fund's annual and
semi-annual reports to shareholders, proxy statements and, if applicable,
dividend income information for tax reporting purposes.
If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not to be
automatically reinvested at no cost to the participants.
Shares of the Fund purchased under the Program will be registered in the name of
the accounts of the respective participants. Unless requested, the Fund will not
issue to participants certificates for Shares of the Fund purchased under the
Program. The Program Administrator will hold the Shares in book-entry form until
a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.
A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.
Participation in any rights offering, dividend distribution or stock split will
be based upon both the Shares of the Fund registered in participants' names and
the Shares (including fractional Shares) credited to participants' Program
accounts. Any stock dividend or Shares resulting from stock splits with respect
to Shares of the Fund, both full and fractional, which participants hold in
their Program accounts and with respect to all Shares registered in their names
will be automatically credited to their accounts.
All Shares of the Fund (including any fractional share) credited to his account
under the Program will be voted as the participant directs. The participants
will be sent the proxy materials for the annual meetings of shareholders. When a
participant returns an executed proxy, all of such Shares will be voted as
indicated. A participant may also elect to vote his Shares in person at the
Shareholders' meeting.
A participant will receive tax information annually for his personal records and
to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which
19
<Page>
may be payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.
The Program Administrator in administering the Program will not be liable for
any act done in good faith or for any good faith omission to act. However, the
Program Administrator will be liable for loss or damage due to error caused by
its negligence, bad faith or willful misconduct. Shares held in custody by the
Program Administrator are not subject to protection under the Securities
Investors Protection Act of 1970.
The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgment and research.
While the Program Administrator hopes to continue the Program indefinitely, the
Program Administrator reserves the right to suspend or terminate the Program at
any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.
Any interested shareholder may participate in the Program. All other cash
payments or bank account deductions must be at least $100.00, up to a maximum of
$100,000.00 annually. An interested shareholder may join the Program by reading
the Program description, completing and signing the enrollment form and
returning it to the Program Administrator. The enrollment form and information
relating to the Program (including the terms and conditions) may be obtained by
calling the Program Administrator at one of the following telephone numbers:
(800) 730-6001 (U.S. and Canada) or (781) 575-3100 (outside U.S. and Canada).
All correspondence regarding the Program should be directed to: Computershare
Trust Company, N.A., InvestLink(SM) Program, P.O. Box 43010, Providence, RI
02940-3010.
InvestLink is a service mark of Computershare Trust Company, N.A.
20
<Page>
INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED)
<Table>
<Caption>
TERM NUMBER OF
OF OFFICE PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH FUND SERVED THE PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR
- ----------------------- ---------------- ---------------- ----------------------------------- ------------- ---------------------
INDEPENDENT DIRECTORS
Enrique R. Arzac* Chairman of the Director since Professor of Finance and Economics, 47 Director of The Adams
c/o Credit Suisse Asset Board of 2000; Chairman Graduate School of Business, Express Company (a
Management, LLC Directors; since 2005; Columbia University closed-end investment
Attn: General Counsel Nominating and current term since 1971 company); Director of
466 Lexington Avenue Audit Committee ends at the 2006 Petroleum and
New York, New York Member annual meeting Resources Corporation
10017-3140 (a closed-end
investment company)
Date of Birth: 10/02/41
Lawrence J. Fox Director; Since 2000; Partner, Drinker Biddle 3 Director, Winthrop
One Logan Square Nominating current term & Reath (law firm) Trust Company
18th & Cherry Streets Committee ends at the 2008 since 1972
Philadelphia Chairman and annual meeting
Pennsylvania 19103 Audit Committee
Member
Date of Birth: 07/17/43
Richard H. Francis Director; Since 1990; Currently retired 41 None
c/o Credit Suisse Asset Nominating current term
Management, LLC Committee Member ends at the 2007
Attn: General Counsel and annual meeting
466 Lexington Avenue Audit Committee
New York, New York Chairman
10017-3140
Date of Birth: 04/23/32
Steven N. Rappaport Director; Since 2005; Partner of Lehigh Court, LLC and RZ 46 Director of Presstek,
Lehigh Court, LLC Nominating and current term Capital (private investment firms) Inc. (digital imaging
40 East 52nd Street Audit Committee ends at the 2006 since July 2002; Transition Advisor technologies
New York, New York Member annual meeting to SunGard Securities Finance, Inc. company); Director of
10022 from February 2002 to July 2002; Wood Resources, LLC
President of SunGard Securities (plywood
Date of Birth: 07/10/48 Finance, Inc. from 2001 to February manufacturing
2002; President of Loanet, Inc. company)
(on-line accounting service) from
1997 to 2001
</Table>
* Effective December 6, 2005, Enrique R. Arzac was appointed as Chairman of
the Board. Michael E. Kenneally, who previously held this position,
resigned as a Director effective December 6, 2005.
21
<Page>
<Table>
<Caption>
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING THE PAST FIVE YEARS
- ----------------------- ------------- ------- --------------------------------------------------------------------
OFFICERS
Steven B. Plump** Chief Since Managing Director; Associated with Credit Suisse or its predecessor
Credit Suisse Asset Executive 2005 since 1995; Officer of other Credit Suisse Funds
Management, LLC Officer and
466 Lexington Avenue President
New York, New York
10017-3140
Date of Birth: 02/08/59
Boon Hong Yeo Chief Since Director of Credit Suisse Asset Management Limited: Director of AIB
c/o Credit Suisse Asset Investment 2003 Govett (Asia) Limited from October 2001 to April 2002; Managing
Management, LLC Officer Director of Zenith Asset Management Singapore from January 2001 to
466 Lexington Avenue September 2001; Associate Director of CMG First State Singapore from
New York, New York 1994 to 2000
10017-3140
Date of Birth: 05/02/60
Michael A. Pignataro Chief Since Director and Director of Fund Administration of Credit Suisse;
Credit Suisse Asset Financial 1993 Associated with Credit Suisse or its predecessor since 1984; Officer
Management, LLC Officer and of other Credit Suisse Funds
466 Lexington Avenue Secretary
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since Director and Global Head of Compliance of Credit Suisse; Associated
Credit Suisse Ass Compliance 2004 with Credit Suisse since July 2000; Vice President and Director of
Management, LLC Officer Compliance of Forstmann-Leff Associates from 1998 to June 2000;
466 Lexington Avenue Officer of other Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since Director and Head of Legal Americas Traditional Asset Management and
Credit Suisse Asset Legal Officer 2004 Hedge Funds; Associated with Credit Suisse since September 2004;
Management, LLC Senior Associate of Sherman & Sterling LLP from September 2000 to
466 Lexington Avenue September 2004; Senior Counsel of the SEC Divison of Investment
New York, New York Management from June 1997 to September 2000; Officer of other Credit
10017-3140 Suisse Funds
Date of Birth: 08/14/70
</Table>
** Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Fund. Michael E. Kenneally, who previously
held these positions, resigned effective July 31, 2005.
22
<Page>
<Table>
<Caption>
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING THE PAST FIVE YEARS
- ----------------------- ------------- ------- --------------------------------------------------------------------
OFFICERS--(concluded)
J. Kevin Gao Senior Vice Since Director and Legal Counsel of Credit Suisse; Associated with Credit
Credit Suisse Asset President 2004 Suisse since July 2003; Associated with the law firm of Willkie Farr
Management, LLC & Gallagher LLP from 1998 to 2003; Officer of other Credit Suisse
466 Lexington Avenue Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Treasurer Since Vice President of Credit Suisse; Associated with Credit Suisse since
Credit Suisse Asset 1999 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
</Table>
23
<Page>
ADVISORY AGREEMENT APPROVAL DISCLOSURE (UNAUDITED)
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AND SUB-ADVISORY
AGREEMENTS
Section 15(c) of the Investment Company Act of 1940 (the "1940 Act")
contemplates that the Board of Directors (the "Board") of The Indonesia Fund,
Inc. (the "Fund"), including a majority of the Directors who have no direct or
indirect interest in the investment advisory and sub-advisory agreements and are
not "interested persons" of the Fund, as defined in the 1940 Act (the
"Independent Directors"), are required to annually review and re-approve the
terms of the Fund's existing investment advisory and sub-advisory agreements and
approve any newly proposed terms therein. In this regard, the Board reviewed and
re-approved, during the most recent six months covered by this report: (i) an
investment advisory agreement with Credit Suisse Asset Management, LLC ("Credit
Suisse") for the Fund, and (ii) a sub-advisory agreement with Credit Suisse
Asset Management Limited ("Credit Suisse Australia" or the "Sub-Adviser") for
the Fund. The investment advisory agreement with Credit Suisse and the
investment sub-advisory agreement with Credit Suisse Australia are collectively
referred to as the "Advisory Agreements."
More specifically, at a meeting held on November 16-17, 2005, the Board,
including the Independent Directors advised by their independent legal counsel,
considered the factors and reached the conclusions described below relating to
the selection of Credit Suisse and the Sub-Adviser and the re-approval of the
Advisory Agreements.
NATURE, EXTENT AND QUALITY OF SERVICES
The Board received and considered various data and information regarding the
nature, extent and quality of services provided to the Fund by Credit Suisse and
the Sub-Adviser under the Advisory Agreements. The most recent investment
adviser registration forms ("Forms ADV") for Credit Suisse and the Sub-Adviser
were provided to the Board, as were responses of Credit Suisse and the
Sub-Adviser to a detailed series of requests submitted by the Independent
Directors' independent legal counsel on behalf of such Directors. The Board
reviewed and analyzed these materials, which included, among other things,
information about the background and experience of the senior management and the
expertise of, and amount of attention devoted to the Fund by investment
personnel of Credit Suisse and the Sub-Adviser. In this regard, the Board
specifically reviewed the qualifications, backgrounds and responsibilities of
the individuals primarily responsible for day-to-day portfolio management
services for the Fund.
In addition, the Board received and reviewed information on Securities and
Exchange Commission ("SEC") and other regulatory inquiries and examinations
relating to the Fund, Credit Suisse and the Sub-Adviser. The Board considered
the investment and legal compliance programs of each of these entities,
including their implementation of enhanced compliance policies and procedures in
response to SEC rule changes and other regulatory initiatives. The Board also
considered the Fund's Chief Compliance Officer's report and recommendations.
The Board evaluated the ability of Credit Suisse and the Sub-Adviser, including
their respective resources, reputations and other attributes, to attract and
retain highly qualified investment professionals, including research, advisory,
and supervisory personnel. In this regard, the Board considered information
regarding Credit Suisse's and the Sub-Adviser's compensation program for their
personnel involved in the management of the Fund, including incentive and
retirement plans.
24
<Page>
Based on the above factors, together with those referenced below, the Board
concluded that it was generally satisfied with the nature, extent and quality of
the investment advisory services provided to the Fund by Credit Suisse and the
Sub-Adviser.
FUND PERFORMANCE AND EXPENSES
The Board considered the performance results of the Fund over a number of years
and since the inception of the Fund, as well as for recent periods. It also
considered these results in comparison to the Fund's benchmark index, the MSCI
Indonesia Index. The Board noted that, although the Fund has underperformed its
benchmark in some periods, the Fund outperformed its benchmark index in other
periods. The Board also observed that the Fund has outperformed its benchmark
index since inception of the Fund on a cumulative basis.
The Board received and considered statistical information regarding the Fund's
total expense ratio and its various components, including management fees,
non-management fees and actual total expenses of the Fund (including and
excluding investment-related expenses and taxes). It also considered comparisons
of these fees to the expense information for the group of funds that was
determined to be the most similar to the Fund (the "Peer Group") and a broader
universe of relevant funds (the "Universe"). Lipper Inc. ("Lipper"), an
independent provider of investment company data, determined the Peer Group and
Universe for the Fund and provided the comparative data. The Board was provided
with a description of the methodology used by Lipper to select the closed-end
mutual funds in the Fund's Peer Group and Universe. The Board noted that the
overall expense ratio of the Fund was consistent with the Peer Group's median
overall expense ratio, both including and excluding investment-related expenses
and taxes.
Based on the above-referenced considerations and other factors, the Board
concluded that the overall performance and expense results supported the
re-approval of the Advisory Agreements for the Fund.
INVESTMENT ADVISORY AND SUB-ADVISORY FEE RATES
The Board reviewed and considered the proposed contractual investment advisory
fee rate (the "Advisory Agreement Rate") payable by the Fund to Credit Suisse
for investment advisory services. The Board also reviewed and considered the
proposed contractual investment sub-advisory fee rate (the "Sub-Advisory
Agreement Rate") payable by Credit Suisse to the Sub-Adviser for investment
sub-advisory services.
Additionally, the Board received and considered information comparing the
Advisory Agreement Rate (both on a stand-alone basis and on a combined basis
with the Fund's administration fee rates) with those of the other funds in its
Peer Group. The Board noted that the Advisory Agreement Rate for the Fund was
lower than the median rate of the Fund's Peer Group, and that the Fund's
non-management expenses were higher than the median rate of the Peer Group. The
Board also noted that the Fund's administrator is not affiliated with Credit
Suisse and that the Fund's administration agreement and corresponding fees were
negotiated at arms-length. The Board further noted that the combined rates of
investment advisory and administration fees for the Fund were lower than the
median combined rates of its Peer Group. The Board concluded that these and
other factors supported the Advisory Agreement Rate, and approved the Advisory
Agreement for the Fund.
25
<Page>
The Board also reviewed the Sub-Advisory Agreement Rate charged by the
Sub-Adviser. The Board concluded that the Sub-Advisory Agreement Rate was fair
and equitable, based on its consideration of the factors described here.
PROFITABILITY
The Board received and considered an estimated profitability analysis of Credit
Suisse based on the Advisory Agreement Rate, as well as on other relationships
between the Fund and Credit Suisse and its affiliates, including Credit Suisse
Australia. The Board concluded that, in light of the costs of providing
investment management and other services to the Fund, the profits and other
ancillary benefits that Credit Suisse and its affiliates received with regard to
providing these services to the Fund were not unreasonable.
The Board also received and considered an estimated profitability analysis and
abridged financial report of Credit Suisse Australia based on the Sub-Advisory
Agreement Rate, as well as on other relationships between the Fund and Credit
Suisse Australia and its affiliates, including Credit Suisse. The Board observed
the costs of providing portfolio management and other services to the Fund. The
Board also noted that the sub-advisory fees are paid to the Sub-Adviser by
Credit Suisse and not directly by the Fund, and that the Board separately
determined that the Advisory Agreement Rate for the Fund was fair and equitable.
Based on these factors, the Board concluded that the profits and other ancillary
benefits that the Sub-Adviser and its affiliates received with regard to
providing these services to the Fund were not unreasonable.
ECONOMIES OF SCALE
The Board received and considered information regarding whether there have been
economies of scale with respect to the management of the Fund, whether the Fund
has appropriately benefited from any economies of scale, and whether there is
potential for realization of any further economies of scale.
The Board observed that the Advisory Agreement did not offer breakpoints.
However, the Board considered the diminished impact of economies of scale in the
context of a closed-end fund and concluded that the fees were fair and equitable
based on relevant factors.
INFORMATION ABOUT SERVICES TO OTHER CLIENTS
The Board received and considered information about the nature and extent of
services and fee rates offered by Credit Suisse to their other clients,
including other registered investment companies, separate accounts and
institutional investors and investment companies to which Credit Suisse serves
as an unaffiliated sub-adviser. The Board also received and considered
information about the nature and extent of services, and general information
about the fees, offered by Credit Suisse Australia to their other clients. The
Board concluded that the Advisory Agreement Rate and Sub-Advisory Agreement Rate
were reasonable, given the nature and extent of services provided and comparison
with rates offered to other clients. Where Credit Suisse's rates offered to its
other clients were appreciably lower, the Board concluded, based on information
provided by Credit Suisse, that the costs associated with managing and
26
<Page>
operating a registered, closed-end, country fund, compared with other clients or
other funds, provided a justification for the higher fee rates charged to the
Fund.
OTHER BENEFITS TO CREDIT SUISSE AND THE SUB-ADVISER
The Board received and considered information regarding potential "fall-out" or
ancillary benefits received by Credit Suisse and its affiliates, including
Credit Suisse Australia, and the Sub-Adviser as a result of their relationship
with the Fund. Such benefits could include, among others, benefits directly
attributable to the relationship of Credit Suisse and the Sub-Adviser with the
Fund (such as soft-dollar credits) and benefits potentially derived from an
increase in the business of Credit Suisse and the Sub-Advisers as a result of
their relationship with the Fund (such as the ability to market to shareholders
other financial products offered by Credit Suisse and its affiliates or the
Sub-Advisers and its affiliates).
The Board also considered the effectiveness of practices of Credit Suisse and
Credit Suisse Australia in achieving the best execution of portfolio
transactions, whether and to what extent soft dollar credits are sought and how
any such credits are utilized. The Board also reviewed the policies of Credit
Suisse Australia regarding the allocation of portfolio investment opportunities
among the Fund and its other clients.
OTHER FACTORS AND BROADER REVIEW
As discussed above, the Board reviews detailed materials received from Credit
Suisse and the Sub-Adviser annually as part of the re-approval process under
Section 15(c) of the 1940 Act. The Board also reviews and assesses the quality
of the services that the Fund receives throughout the year. In this regard, the
Board reviews reports of Credit Suisse and the Sub-Adviser at least in each of
its quarterly meetings, which include, among other things, a detailed portfolio
review and detailed fund performance reports, and confers with the chief
investment officer and managers of the Fund at various times throughout the
year.
After considering the above-described factors and based on the deliberations and
its evaluation of the information provided to it, the Board concluded that
re-approval of the Advisory Agreements for the Fund was in the best interest of
the Fund and its shareholders. Accordingly, the Board unanimously re-approved
the Advisory Agreements.
27
<Page>
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION (UNAUDITED)
Information regarding how The Indonesia Fund, Inc. (the "Fund") voted proxies
related to its portfolio securities during the 12-month period ended June 30 of
each year as well as the policies and procedures that the Fund uses to determine
how to vote proxies relating to its portfolio securities are available:
- By calling 1-800-293-1232;
- On the Fund's website, www.credit-suisse.com/us
- On the website of the Securities and Exchange Commission,
http://www.sec.gov
The Fund files a complete schedule of its portfolio holdings for the first and
third quarters of its fiscal year with the SEC on Form N-Q. The Fund's Forms N-Q
are available on the SEC's website at http://www.sec.gov and may be reviewed and
copied at the SEC's Public Reference Room in Washington, DC. Information on the
operation of the SEC's Public Reference Room may be obtained by calling
1-800-SEC-0330.
OTHER FUNDS MANAGED BY CREDIT SUISSE ASSET MANAGEMENT, LLC
<Table>
Credit Suisse Capital Appreciation Fund Credit Suisse Japan Equity Fund
Credit Suisse Cash Reserve Fund Credit Suisse Large Cap Blend Fund
Credit Suisse Commodity Return Strategy Fund Credit Suisse Large Cap Value Fund
Credit Suisse Emerging Markets Fund Credit Suisse Mid-Cap Growth Fund
Credit Suisse Fixed Income Fund Credit Suisse New York Municipal Fund
Credit Suisse Global Fixed Income Fund Credit Suisse Short Duration Bond Fund
Credit Suisse Global Small Cap Fund Credit Suisse Small Cap Growth Fund
Credit Suisse High Income Fund Credit Suisse Small Cap Value Fund
Credit Suisse International Focus Fund Credit Suisse Strategic Allocation Fund
</Table>
Fund shares are not deposits or other obligations of Credit Suisse Asset
Management, LLC or any affiliate, are not FDIC-insured and are not guaranteed by
Credit Suisse Asset Management, LLC or any affiliate. Fund investments are
subject to investment risks, including loss of your investment. There are
special risk considerations associated with international, global,
emerging-market, small-company, private equity, high-yield debt,
single-industry, single-country and other special, aggressive or concentrated
investment strategies. Past performance cannot guarantee future results.
More complete information about a fund, including charges and expenses, is
provided in the Prospectus, which should be read carefully before investing. You
may obtain copies by calling Credit Suisse Funds at 800-927-2874. For up-to-date
performance, please look in the mutual fund section of your newspaper under
Credit Suisse.
Credit Suisse Asset Management Securities, Inc., Distributor.
28
<Page>
SUMMARY OF GENERAL INFORMATION (UNAUDITED)
The Fund--The Indonesia Fund, Inc.--is a closed-end, non-diversified management
investment company whose shares trade on the American Stock Exchange, LLC. Its
principal investment objective is long-term capital appreciation with income as
a secondary objective through investments primarily in Indonesian equity and
debt securities. Credit Suisse Asset Management, LLC, the Fund's investment
adviser, is part of the Asset Management business of Credit Suisse, a leading
global financial services organization headquartered in Zurich, with offices
focused on asset management in 18 countries.
SHAREHOLDER INFORMATION
The Fund's market price is published in THE NEW YORK TIMES (daily), THE WALL
STREET JOURNAL (daily), and BARRON'S (each Monday) under the designation
"Indonesia". The Fund's American Stock Exchange, LLC trading symbol is IF.
Weekly comparative net asset value (NAV) and market price information about The
Indonesia Fund, Inc.'s shares are published each Sunday in THE NEW YORK TIMES
and each Monday in THE WALL STREET JOURNAL and BARRON'S, as well as other
newspapers, in a table called "Closed-End Funds."
THE CSAM GROUP OF FUNDS
LITERATURE REQUEST--Call today for free descriptive information on the
closed-end funds listed below at 1-800-293-1232 or visit our website on the
Internet: http://www.credit-suisse.com/us
CLOSED-END FUNDS
SINGLE COUNTRY
The Chile Fund, Inc. (CH)
The First Israel Fund, Inc. (ISL)
MULTIPLE COUNTRY
The Emerging Markets Telecommunications Fund, Inc. (ETF)
The Latin America Equity Fund, Inc. (LAQ)
FIXED INCOME
Credit Suisse Asset Management Income Fund, Inc. (CIK)
Credit Suisse High Yield Bond Fund (DHY)
<Page>
DIRECTORS AND CORPORATE OFFICERS
Enrique R. Arzac Chairman of the Board of Directors
Lawrence J. Fox Director
Richard H. Francis Director
Steven Rappaport Director
Steven B. Plump Chief Executive Officer and President
Boon Hong Yeo Chief Investment Officer
J. Kevin Gao Senior Vice President
Ajay Mehra Chief Legal Officer
Emidio Morizio Chief Compliance Officer
Michael A. Pignataro Chief Financial Officer and Secretary
Karen Regan Assistant Secretary
Robert Rizza Treasurer
John Smith Assistant Treasurer
INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, NY 10017
INVESTMENT SUB-ADVISER
Credit Suisse Asset Management Limited
Level 32, Gateway Building
1 Macquarie Place
Sydney NSW 2000
ADMINISTRATOR
Bear Stearns Funds Management Inc.
383 Madison Avenue
New York, NY 10179
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
SHAREHOLDER SERVICING AGENT
Computershare Trust Company, N.A.
P. O. Box 43010
Providence, RI 02940
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Two Commerce Square
Philadelphia, PA 19103
LEGAL COUNSEL
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. It is not a prospectus, circular
or representation intended for use in the purchase or sale of shares of the Fund
or of any securities mentioned in this report.
[AMERICAN STOCK EXCHANGE(R) LISTED IF(TM) LOGO]
IF-AR-1205
<Page>
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics applicable to its Chief Executive
Officer, President, Chief Financial Officer and Chief Accounting Officer, or
persons performing similar functions. A copy of the code is filed as Exhibit
12(a)(1) to this Form. There were no amendments to the code during the fiscal
year ended December 31, 2005. There were no waivers or implicit waivers from the
code granted by the registrant during the fiscal year ended December 31, 2005.
<Page>
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's governing board has determined that it has three audit
committee financial experts serving on its audit committee: Enrique R. Arzac,
Richard H. Francis and Steven N. Rappaport. Each audit committee financial
expert is "independent" for purposes of this item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) through (d). The information in the table below is provided for services
rendered to the registrant by its independent registered public accounting firm,
PricewaterhouseCoopers LLP ("PwC"), for its fiscal years ended December 31, 2004
and December 31, 2005.
<Table>
<Caption>
2004 2005
---------- ----------
Audit Fees $ 32,000 $ 33,800
Audit-Related Fees(1) $ 4,500 $ 3,150
Tax Fees(2) $ 7,482 $ 7,860
All Other Fees -- --
Total $ 43,982 $ 44,810
</Table>
(1) Services include agreed-upon procedures in connection with the registrant's
semi-annual financial statements ($3,000 in 2004 and $3,150 in 2005) and
the registrant's third quarter 2004 Form N-Q filing ($1,500).
(2) Tax services in connection with the registrant's excise tax calculations and
review of the registrant's applicable tax returns.
The information in the table below is provided with respect to non-audit
services that directly relate to the registrant's operations and financial
reporting and that were rendered by PwC to the registrant's investment adviser,
Credit Suisse Asset Management, LLC ("Credit Suisse"), and any service provider
to the registrant controlling, controlled by or under common control with Credit
Suisse that provided ongoing services to the registrant ("Covered Services
Provider"), for the registrant's fiscal years ended December 31, 2004 and
December 31, 2005.
<Table>
<Caption>
2004 2005
---------- -----------
Audit-Related Fees N/A N/A
</Table>
<Page>
<Table>
Tax Fees N/A N/A
All Other Fees N/A $ 2,444,000
Total N/A $ 2,444,000
</Table>
(e)(1) Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and permissible
non-audit services to be provided by the independent registered public
accounting firm to the registrant and (ii) all permissible non-audit services to
be provided by the independent registered public accounting firm to Credit
Suisse and any Covered Services Provider if the engagement relates directly to
the operations and financial reporting of the registrant. The Committee may
delegate its responsibility to pre-approve any such audit and permissible
non-audit services to the Chairperson of the Committee, and the Chairperson
shall report to the Committee, at its next regularly scheduled meeting after the
Chairperson's pre-approval of such services, his or her decision(s). The
Committee may also establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws, including the
delegation of some or all of the Committee's pre-approval responsibilities to
other persons (other than Credit Suisse or the registrant's officers).
Pre-approval by the Committee of any permissible non-audit services shall not be
required so long as: (i) the aggregate amount of all such permissible non-audit
services provided to the registrant, Credit Suisse and any Covered Services
Provider constitutes not more than 5% of the total amount of revenues paid by
the registrant to its independent registered public accounting firm during the
fiscal year in which the permissible non-audit services are provided; (ii) the
permissible non-audit services were not recognized by the registrant at the time
of the engagement to be non-audit services; and (iii) such services are promptly
brought to the attention of the Committee and approved by the Committee (or its
delegate(s)) prior to the completion of the audit.
(e)(2) The information in the table below sets forth the percentages of fees for
services (other than audit, review or attest services) rendered by PwC to the
registrant for which the pre-approval requirement was waived pursuant to Rule
2-01(c)(7)(i)(C) of Regulation S-X:
<Table>
<Caption>
2004 2005
---------- ----------
Audit-Related Fees N/A N/A
Tax Fees N/A N/A
All Other Fees N/A N/A
Total N/A N/A
</Table>
<Page>
The information in the table below sets forth the percentages of fees for
services (other than audit, review or attest services) rendered by PwC to Credit
Suisse and any Covered Services Provider required to be approved pursuant to
Rule 2-01(c)(7)(ii)of Regulation S-X, for the registrant's fiscal years ended
December 31, 2004 and December 31, 2005:
<Table>
<Caption>
2004 2005
---------- ----------
Audit-Related Fees N/A N/A
Tax Fees N/A N/A
All Other Fees N/A N/A
Total N/A N/A
</Table>
(f) Not Applicable.
(g) The aggregate fees billed by PwC for non-audit services rendered to the
registrant, Credit Suisse and Covered Service Providers for the fiscal years
ended December 31, 2004 and December 31, 2005 were $11,982 and $11,010,
respectively.
(h) Not Applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended. The members of the committee are Enrique R. Arzac, Lawrence Fox,
Richard H. Francis and Steven N. Rappaport.
ITEM 6. SCHEDULE OF INVESTMENTS.
Included as part of the report to shareholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
<Page>
CREDIT SUISSE ASSET MANAGEMENT, LLC
CREDIT SUISSE FUNDS
CREDIT SUISSE INSTITUTIONAL FUNDS
CSAM CLOSED-END FUNDS
PROXY VOTING POLICY AND PROCEDURES
Introduction
Credit Suisse Asset Management, LLC ("CSAM") is a fiduciary that owes each
of its clients duties of care and loyalty with respect to proxy voting. The
duty of care requires CSAM to monitor corporate events and to vote proxies.
To satisfy its duty of loyalty, CSAM must cast proxy votes in the best
interests of each of its clients.
The Credit Suisse Funds, Credit Suisse Institutional Funds, and CSAM
Closed-End Funds (the "Funds"), which have engaged Credit Suisse Asset
Management, LLC as their investment adviser, are of the belief that the
proxy voting process is a means of addressing corporate governance issues
and encouraging corporate actions both of which can enhance shareholder
value.
Policy
The Proxy Voting Policy (the "Policy") set forth below is designed to
ensure that proxies are voted in the best interests of CSAM's clients. The
Policy addresses particular issues and gives a general indication of how
CSAM will vote proxies. The Policy is not exhaustive and does not include
all potential issues.
Proxy Voting Committee
The Proxy Voting Committee will consist of a member of the Portfolio
Management Department, a member of the Legal and Compliance Department, and
a member of the Operations Department (or their designees). The purpose of
the Proxy Voting Committee is to administer the voting of all clients'
proxies in accordance with the Policy. The Proxy Voting Committee will
review the Policy annually to ensure that it is designed to promote the
best interests of CSAM's clients.
For the reasons disclosed below under "Conflicts," the Proxy Voting
Committee has engaged the services of an independent third party
(initially, Institutional Shareholder Services ("ISS")) to assist in issue
analysis and vote recommendation for proxy proposals. Proxy proposals
addressed by the Policy will be voted in accordance with the Policy. Proxy
proposals addressed by the Policy that require a case-by-case analysis will
be voted in accordance with the vote recommendation of ISS. Proxy proposals
not addressed by the Policy will also be voted in accordance with the vote
<Page>
recommendation of ISS. To the extent that the Proxy Voting Committee
proposes to deviate from the Policy or the ISS vote recommendation, the
Committee shall obtain client consent as described below.
CSAM investment professionals may submit a written recommendation to the
Proxy Voting Committee to vote in a manner inconsistent with the Policy
and/or the recommendation of ISS. Such recommendation will set forth its
basis and rationale. In addition, the investment professional must confirm
in writing that he/she is not aware of any conflicts of interest concerning
the proxy matter or provide a full and complete description of the
conflict.
Conflicts
CSAM is the institutional and mutual fund asset management arm of Credit
Suisse First Boston, which is part of Credit Suisse Group, one of the
world's largest financial organizations. As part of a global, full service
investment-bank, broker-dealer, and asset-management organization, CSAM and
its affiliates and personnel may have multiple advisory, transactional,
financial, and other interests in securities, instruments, and companies
that may be purchased or sold by CSAM for its clients' accounts. The
interests of CSAM and/or its affiliates and personnel may conflict with the
interests of CSAM's clients in connection with any proxy issue. In
addition, CSAM may not be able to identify all of the conflicts of interest
relating to any proxy matter.
Consent
In each and every instance in which the Proxy Voting Committee favors
voting in a manner that is inconsistent with the Policy or the vote
recommendation of ISS (including proxy proposals addressed and not
addressed by the Policy), it shall disclose to the client conflicts of
interest information and obtain client consent to vote. Where the client is
a Fund, disclosure shall be made to any one director who is not an
"interested person," as that term is defined under the Investment Company
Act of 1940, as amended, of the Fund.
Recordkeeping
CSAM is required to maintain in an easily accessible place for five years all
records relating to proxy voting.
These records include the following:
- a copy of the Policy;
- a copy of each proxy statement received on behalf of CSAM clients;
<Page>
- a record of each vote cast on behalf of CSAM clients;
- a copy of all documents created by CSAM personnel that were material to
making a decision on a vote or that memorializes the basis for the
decision; and
- a copy of each written request by a client for information on how CSAM
voted proxies, as well as a copy of any written response.
CSAM reserves the right to maintain certain required proxy records with ISS
in accordance with all applicable regulations.
Disclosure
CSAM will describe the Policy to each client. Upon request, CSAM will
provide any client with a copy of the Policy. CSAM will also disclose to
its clients how they can obtain information on their proxy votes.
ISS will capture data necessary for Funds to file Form N-PX on an annual
basis concerning their proxy voting record in accordance with applicable
law.
Procedures
The Proxy Voting Committee will administer the voting of all client
proxies. CSAM has engaged ISS as an independent third party proxy voting
service to assist in the voting of client proxies. ISS will coordinate with
each client's custodian to ensure that proxy materials reviewed by the
custodians are processed in a timely fashion. ISS will provide CSAM with an
analysis of proxy issues and a vote recommendation for proxy proposals. ISS
will refer proxies to the Proxy Voting Committee for instructions when the
application of the Policy is not clear. The Proxy Voting Committee will
notify ISS of any changes to the Policy or deviating thereof.
PROXY VOTING POLICY
Operational Items
Adjourn Meeting
Proposals to provide management with the authority to adjourn an
annual or special meeting will be determined on a case-by-case basis.
Amend Quorum Requirements
Proposals to reduce quorum requirements for shareholder meetings below
a majority of the shares outstanding will be determined on a
case-by-case basis.
<Page>
Amend Minor Bylaws
Generally vote for bylaw or charter changes that are of a housekeeping
nature.
Change Date, Time, or Location of Annual Meeting
Generally vote for management proposals to change the
date/time/location of the annual meeting unless the proposed change is
unreasonable. Generally vote against shareholder proposals to change
the date/time/location of the annual meeting unless the current
scheduling or location is unreasonable.
Ratify Auditors
Generally vote for proposals to ratify auditors unless: (1) an auditor
has a financial interest in or association with the company, and is
therefore not independent; (2) fees for non-audit services are
excessive, or (3) there is reason to believe that the independent
auditor has rendered an opinion, which is neither accurate nor
indicative of the company's financial position. Generally vote on a
case-by-case basis on shareholder proposals asking companies to
prohibit their auditors from engaging in non-audit services (or
capping the level of non-audit services). Generally vote on a
case-by-case basis on auditor rotation proposals taking into
consideration: (1) tenure of audit firm; (2) establishment and
disclosure of a renewal process whereby the auditor is regularly
evaluated for both audit quality and competitive price; (3) length of
the rotation period advocated in the proposal, and (4) significant
audit related issues.
Board of Directors
Voting on Director Nominees in Uncontested Elections
Generally votes on director nominees on a case-by-case basis. Votes
may be withheld: (1) from directors who attended less than 75% of the
board and committee meetings without a valid reason for the absences;
(2) implemented or renewed a dead-hand poison pill; (3) ignored a
shareholder proposal that was approved by a majority of the votes cast
for two consecutive years; (4) ignored a shareholder proposal approved
by a majority of the shares outstanding; (5) have failed to act on
takeover offers where the majority of the shareholders have tendered
their shares; (6) are inside directors or affiliated outside directors
and sit on the audit, compensation, or nominating committee; (7) are
inside directors or affiliated outside directors and the full board
serves as the audit, compensation, or nominating committee or the
company does not have one of these committees; or (8) are audit
committee members and the non-audit fees paid to the auditor are
excessive
Cumulative Voting
<Page>
Proposals to eliminate cumulative voting will be determined on a
case-by-case basis. Proposals to restore or provide for cumulative
voting in the absence of sufficient good governance provisions and/or
poor relative shareholder returns will be determined on a case-by-case
basis.
Director and Officer Indemnification and Liability Protection
Proposals on director and officer indemnification and liability
protection generally evaluated on a case-by-case basis. Generally vote
against proposals that would: (1) eliminate entirely directors' and
officers' liability for monetary damages for violating the duty of
care; or (2) expand coverage beyond just legal expenses to acts, such
as negligence, that are more serious violations of fiduciary
obligation than mere carelessness. Generally vote for only those
proposals providing such expanded coverage in cases when a director's
or officer's legal defense was unsuccessful if: (1) the director was
found to have acted in good faith and in a manner that he reasonably
believed was in the best interests of the company, and (2) only if the
director's legal expenses would be covered.
Filling Vacancies/Removal of Directors
Generally vote against proposals that provide that directors may be
removed only for cause. Generally vote for proposals to restore
shareholder ability to remove directors with or without cause.
Proposals that provide that only continuing directors may elect
replacements to fill board vacancies will be determined on a
case-by-case basis. Generally vote for proposals that permit
shareholders to elect directors to fill board vacancies.
Independent Chairman (Separate Chairman/CEO)
Generally vote for shareholder proposals requiring the position of
chairman be filled by an independent director unless there are
compelling reasons to recommend against the proposal, including: (1)
designated lead director, elected by and from the independent board
members with clearly delineated duties; (2) 2/3 independent board; (3)
all independent key committees; or (4) established governance
guidelines.
Majority of Independent Directors
Generally vote for shareholder proposals requiring that the board
consist of a majority or substantial majority (two-thirds) of
independent directors unless the board composition already meets the
adequate threshold. Generally vote for shareholder proposals requiring
the board audit, compensation, and/or nominating committees be
composed exclusively of independent directors if they currently do not
meet that standard. Generally withhold votes from insiders and
affiliated outsiders sitting on the audit, compensation, or nominating
committees. Generally withhold votes from insiders and affiliated
outsiders on boards that are
<Page>
lacking any of these three panels. Generally withhold votes from
insiders and affiliated outsiders on boards that are not at least
majority independent.
Term Limits
Generally vote against shareholder proposals to limit the tenure of
outside directors.
Proxy Contests
Voting on Director Nominees in Contested Elections
Votes in a contested election of directors should be decided on a
case-by-case basis, with shareholders determining which directors are
best suited to add value for shareholders. The major decision factors
are: (1) company performance relative to its peers; (2) strategy of
the incumbents versus the dissidents; (3) independence of
directors/nominees; (4) experience and skills of board candidates; (5)
governance profile of the company; (6) evidence of management
entrenchment; (7) responsiveness to shareholders; or (8) whether
takeover offer has been rebuffed.
Amend Bylaws without Shareholder Consent
Proposals giving the board exclusive authority to amend the bylaws
will be determined on a case-by-case basis. Proposals giving the board
the ability to amend the bylaws in addition to shareholders will be
determined on a case-by-case basis.
Confidential Voting
Generally vote for shareholder proposals requesting that corporations
adopt confidential voting, use independent vote tabulators and use
independent inspectors of election, as long as the proposal includes a
provision for proxy contests as follows: In the case of a contested
election, management should be permitted to request that the dissident
group honor its confidential voting policy. If the dissidents agree,
the policy may remain in place. If the dissidents will not agree, the
confidential voting policy may be waived. Generally vote for
management proposals to adopt confidential voting.
Cumulative Voting
Proposals to eliminate cumulative voting will be determined on a
case-by-case basis. Proposals to restore or provide for cumulative
voting in the absence of sufficient good governance provisions and/or
poor relative shareholder returns will be determined on a case-by-case
basis.
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Antitakeover Defenses and Voting Related Issues
Advance Notice Requirements for Shareholder Proposals/Nominations
Votes on advance notice proposals are determined on a case-by-case
basis.
Amend Bylaws without Shareholder Consent
Proposals giving the board exclusive authority to amend the bylaws
will be determined on a case-by-case basis. Generally vote for
proposals giving the board the ability to amend the bylaws in addition
to shareholders.
Poison Pills (Shareholder Rights Plans)
Generally vote for shareholder proposals requesting that the company
submit its poison pill to a shareholder vote or redeem it. Votes
regarding management proposals to ratify a poison pill should be
determined on a case-by-case basis. Plans should embody the following
attributes: (1) 20% or higher flip-in or flip-over; (2) two to three
year sunset provision; (3) no dead-hand or no-hand features; or (4)
shareholder redemption feature
Shareholders' Ability to Act by Written Consent
Generally vote against proposals to restrict or prohibit shareholders'
ability to take action by written consent. Generally vote for
proposals to allow or make easier shareholder action by written
consent.
Shareholders' Ability to Call Special Meetings
Proposals to restrict or prohibit shareholders' ability to call
special meetings or that remove restrictions on the right of
shareholders to act independently of management will be determined on
a case-by-case basis.
Supermajority Vote Requirements
Proposals to require a supermajority shareholder vote will be
determined on a case-by-case basis Proposals to lower supermajority
vote requirements will be determined on a case-by-case basis.
Merger and Corporate Restructuring
Appraisal Rights
Generally vote for proposals to restore, or provide shareholders with,
rights of appraisal.
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Asset Purchases
Generally vote case-by-case on asset purchase proposals, taking into
account: (1) purchase price, including earnout and contingent
payments; (2) fairness opinion; (3) financial and strategic benefits;
(4) how the deal was negotiated; (5) conflicts of interest; (6) other
alternatives for the business; or (7) noncompletion risk (company's
going concern prospects, possible bankruptcy).
Asset Sales
Votes on asset sales should be determined on a case-by-case basis
after considering: (1) impact on the balance sheet/working capital;
(2) potential elimination of diseconomies; (3) anticipated financial
and operating benefits; (4) anticipated use of funds; (5) value
received for the asset; fairness opinion (if any); (6) how the deal
was negotiated; or (6) Conflicts of interest
Conversion of Securities
Votes on proposals regarding conversion of securities are determined
on a case-by-case basis. When evaluating these proposals, should
review (1) dilution to existing shareholders' position; (2) conversion
price relative to market value; (3) financial issues: company's
financial situation and degree of need for capital; effect of the
transaction on the company's cost of capital; (4) control issues:
change in management; change in control; standstill provisions and
voting agreements; guaranteed contractual board and committee seats
for investor; veto power over certain corporate actions; (5)
termination penalties; (6) conflict of interest: arm's length
transactions, managerial incentives. Generally vote for the conversion
if it is expected that the company will be subject to onerous
penalties or will be forced to file for bankruptcy if the transaction
is not approved.
Corporate Reorganization
Votes on proposals to increase common and/or preferred shares and to
issue shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues;
(4) management's efforts to pursue other alternatives; (5) control
issues; (6) conflict of interest. Generally vote for the debt
restructuring if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Reverse Leveraged Buyouts
Votes on proposals to increase common and/or preferred shares and to
issue shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues;
(4) management's efforts to pursue other alternatives; (5) control
issues; (6) conflict of interest. Generally vote
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for the debt restructuring if it is expected that the company will
file for bankruptcy if the transaction is not approved.
Formation of Holding Company
Votes on proposals regarding the formation of a holding company should
be determined on a case-by-case basis taking into consideration: (1)
the reasons for the change; (2) any financial or tax benefits; (3)
regulatory benefits; (4) increases in capital structure; (5) changes
to the articles of incorporation or bylaws of the company. Absent
compelling financial reasons to recommend the transaction, generally
vote against the formation of a holding company if the transaction
would include either of the following: (1) increases in common or
preferred stock in excess of the allowable maximum as calculated a
model capital structure; (2) adverse changes in shareholder rights;
(3) going private transactions; (4) votes going private transactions
on a case-by-case basis, taking into account: (a) offer price/premium;
(b) fairness opinion; (c) how the deal was negotiated; (d) conflicts
of interest; (e) other alternatives/offers considered; (f)
noncompletion risk.
Joint Ventures
Vote on a case-by-case basis on proposals to form joint ventures,
taking into account: (1) percentage of assets/business contributed;
(2) percentage ownership; (3) financial and strategic benefits; (4)
governance structure; (5) conflicts of interest; (6) other
alternatives; (7) noncompletion risk; (8) liquidations. Votes on
liquidations should be determined on a case-by-case basis after
reviewing: (1) management's efforts to pursue other alternatives such
as mergers; (2) appraisal value of the assets (including any fairness
opinions); (3) compensation plan for executives managing the
liquidation. Generally vote for the liquidation if the company will
file for bankruptcy if the proposal is not approved.
Mergers and Acquisitions
Votes on mergers and acquisitions should be considered on a
case-by-case basis, determining whether the transaction enhances
shareholder value by giving consideration to: (1) prospects of the
combined companies; (2) anticipated financial and operating benefits;
(3) offer price; (4) fairness opinion; (5) how the deal was
negotiated; (6) changes in corporate governance and their impact on
shareholder rights; (7) change in the capital structure; (8) conflicts
of interest.
Private Placements
Votes on proposals regarding private placements should be determined
on a case-by-case basis. When evaluating these proposals, should
review: (1) dilution to existing shareholders' position; (2) terms of
the offer; (3) financial issues; (4) management's efforts to pursue
alternatives such as mergers; (5) control issues; (6) conflict of
interest. Generally vote for the
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private placement if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Prepackaged Bankruptcy Plans
Votes on proposals to increase common and/or preferred shares and to
issue shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues;
(4) management's efforts to pursue other alternatives; (5) control
issues; (6) conflict of interest. Generally vote for the debt
restructuring if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Recapitalization
Votes case-by-case on recapitalizations (reclassifications of
securities), taking into account: (1) more simplified capital
structure; (2) enhanced liquidity; (3) fairness of conversion terms,
including fairness opinion; (4) impact on voting power and dividends;
(5) reasons for the reclassification; (6) conflicts of interest; (7)
other alternatives considered.
Reverse Stock Splits
Generally vote for management proposals to implement a reverse stock
split when the number of authorized shares will be proportionately
reduced. Generally vote for management proposals to implement a
reverse stock split to avoid delisting. Votes on proposals to
implement a reverse stock split that do not proportionately reduce the
number of shares authorized for issue should be determined on a
case-by-case basis.
Spinoffs
Votes on spinoffs should be considered on a case-by-case basis
depending on: (1) tax and regulatory advantages; (2) planned use of
the sale proceeds; (3) valuation of spinoff; fairness opinion; (3)
benefits that the spinoff may have on the parent company including
improved market focus; (4) conflicts of interest; managerial
incentives; (5) any changes in corporate governance and their impact
on shareholder rights; (6) change in the capital structure
Value Maximization Proposals
Vote case-by-case on shareholder proposals seeking to maximize
shareholder value.
Capital Structure
Adjustments to Par Value of Common Stock
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Generally vote for management proposals to reduce the par value of
common stock unless the action is being taken to facilitate an
antitakeover device or some other negative corporate governance
action. Generally vote for management proposals to eliminate par
value.
Common Stock Authorization
Votes on proposals to increase the number of shares of common stock
authorized for issuance are determined on a case-by-case basis.
Generally vote against proposals at companies with dual-class capital
structures to increase the number of authorized shares of the class of
stock that has superior voting rights. Generally vote for proposals to
approve increases beyond the allowable increase when a company's
shares are in danger of being delisted or if a company's ability to
continue to operate as a going concern is uncertain.
Dual-class Stock
Generally vote against proposals to create a new class of common stock
with superior voting rights. Generally vote for proposals to create a
new class of nonvoting or subvoting common stock if: (1) it is
intended for financing purposes with minimal or no dilution to current
shareholders; (2) it is not designed to preserve the voting power of
an insider or significant shareholder.
Issue Stock for Use with Rights Plan
Generally vote against proposals that increase authorized common stock
for the explicit purpose of implementing a shareholder rights plan.
Preemptive Rights
Votes regarding shareholder proposals seeking preemptive rights should
be determined on a case-by-case basis after evaluating: (1) the size
of the company; (2) the shareholder base; (3) the liquidity of the
stock
Preferred Stock
Generally vote against proposals authorizing the creation of new
classes of preferred stock with unspecified voting, conversion,
dividend distribution, and other rights ("blank check" preferred
stock). Generally vote for proposals to create "declawed" blank check
preferred stock (stock that cannot be used as a takeover defense).
Generally vote for proposals to authorize preferred stock in cases
where the company specifies the voting, dividend, conversion, and
other rights of such stock and the terms of the preferred stock appear
reasonable. Generally vote against proposals to increase the number of
blank check preferred stock authorized for issuance when no shares
have been issued or reserved for a specific purpose. Generally vote
case-by-case on proposals to increase the number of blank check
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preferred shares after analyzing the number of preferred shares
available for issue given a company's industry and performance in
terms of shareholder returns.
Recapitalization
Vote case-by-case on recapitalizations (reclassifications of
securities), taking into account: (1) more simplified capital
structure; (2) enhanced liquidity; (3) fairness of conversion terms,
including fairness opinion; (4) impact on voting power and dividends;
(5) reasons for the reclassification; (6) conflicts of interest; (7)
other alternatives considered.
Reverse Stock Splits
Generally vote for management proposals to implement a reverse stock
split when the number of authorized shares will be proportionately
reduced. Generally vote for management proposals to implement a
reverse stock split to avoid delisting. Votes on proposals to
implement a reverse stock split that do not proportionately reduce the
number of shares authorized for issue should be determined on a
case-by-case basis.
Share Repurchase Programs
Generally vote for management proposals to institute open-market share
repurchase plans in which all shareholders may participate on equal
terms.
Stock Distributions: Splits and Dividends
Generally vote for management proposals to increase the common share
authorization for a stock split or share dividend, provided that the
increase in authorized shares would not result in an excessive number
of shares available for issuance.
Tracking Stock
Votes on the creation of tracking stock are determined on a
case-by-case basis, weighing the strategic value of the transaction
against such factors as: (1) adverse governance changes; (2) excessive
increases in authorized capital stock; (3) unfair method of
distribution; (4) diminution of voting rights; (5) adverse conversion
features; (6) negative impact on stock option plans; (7) other
alternatives such as a spinoff.
Executive and Director Compensation
Executive and Director Compensation
Votes on compensation plans for directors are determined on a
case-by-case basis.
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Stock Plans in Lieu of Cash
Votes for plans which provide participants with the option of taking
all or a portion of their cash compensation in the form of stock are
determined on a case-by-case basis. Generally vote for plans which
provide a dollar-for-dollar cash for stock exchange. Votes for plans
which do not provide a dollar-for-dollar cash for stock exchange
should be determined on a case-by-case basis.
Director Retirement Plans
Generally vote against retirement plans for nonemployee directors.
Generally vote for shareholder proposals to eliminate retirement plans
for nonemployee directors.
Management Proposals Seeking Approval to Reprice Options
Votes on management proposals seeking approval to reprice options are
evaluated on a case-by-case basis giving consideration to the
following: (1) historic trading patterns; (2) rationale for the
repricing; (3) value-for-value exchange; (4) option vesting; (5) term
of the option; (6) exercise price; (7) participants; (8) employee
stock purchase plans. Votes on employee stock purchase plans should be
determined on a case-by-case basis. Generally vote for employee stock
purchase plans where: (1) purchase price is at least 85 percent of
fair market value; (2) offering period is 27 months or less, and (3)
potential voting power dilution (VPD) is ten percent or less.
Generally vote against employee stock purchase plans where either: (1)
purchase price is less than 85 percent of fair market value; (2)
Offering period is greater than 27 months, or (3) VPD is greater than
ten percent
Incentive Bonus Plans and Tax Deductibility Proposals
Generally vote for proposals that simply amend shareholder-approved
compensation plans to include administrative features or place a cap
on the annual grants any one participant may receive. Generally vote
for proposals to add performance goals to existing compensation plans.
Votes to amend existing plans to increase shares reserved and to
qualify for favorable tax treatment considered on a case-by-case
basis. Generally vote for cash or cash and stock bonus plans that are
submitted to shareholders for the purpose of exempting compensation
from taxes if no increase in shares is requested.
Employee Stock Ownership Plans (ESOPs)
Generally vote for proposals to implement an ESOP or increase
authorized shares for existing ESOPs, unless the number of shares
allocated to the ESOP is excessive (more than five percent of
outstanding shares.)
401(k) Employee Benefit Plans
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Generally vote for proposals to implement a 401(k) savings plan for
employees.
Shareholder Proposals Regarding Executive and Director Pay
Generally vote for shareholder proposals seeking additional disclosure
of executive and director pay information, provided the information
requested is relevant to shareholders' needs, would not put the
company at a competitive disadvantage relative to its industry, and is
not unduly burdensome to the company. Generally vote against
shareholder proposals seeking to set absolute levels on compensation
or otherwise dictate the amount or form of compensation. Generally
vote against shareholder proposals requiring director fees be paid in
stock only. Generally vote for shareholder proposals to put option
repricings to a shareholder vote. Vote for shareholders proposals to
exclude pension fund income in the calculation of earnings used in
determining executive bonuses/compensation. Vote on a case-by-case
basis for all other shareholder proposals regarding executive and
director pay, taking into account company performance, pay level
versus peers, pay level versus industry, and long term corporate
outlook.
Performance-Based Option Proposals
Generally vote for shareholder proposals advocating the use of
performance-based equity awards (indexed, premium-priced, and
performance-vested options), unless: (1) the proposal is overly
restrictive; or (2) the company demonstrates that it is using a
substantial portion of performance-based awards for its top
executives.
Stock Option Expensing
Generally vote for shareholder proposals asking the company to expense
stock options unless the company has already publicly committed to
start expensing by a specific date.
Golden and Tin Parachutes
Generally vote for shareholder proposals to require golden and tin
parachutes to be submitted for shareholder ratification, unless the
proposal requires shareholder approval prior to entering into
employment contracts. Vote on a case-by-case basis on proposals to
ratify or cancel golden or tin parachutes.
May 17, 2005
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ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Information pertaining to the Chief Investment Officer of The Indonesia Fund,
Inc., as of December 31, 2005, is set forth below.
Boon Hong Yeo Director of Credit Suisse Asset Management Limited;
Chief Investment Director of AIB Govett (Asia) Limited from October
Officer Since 2001 to April 2002; Managing Director of Zenith Asset
2003 Singapore from January 2001 to September 2001;
Director of CMG First State Singapore from
Date of Birth: 05/02/60 1994 to 2000
Registered Investment Companies, Pooled Investment Vehicles and Other
Accounts Managed
As reported to the Registrant, the information in the following table
reflects the number of registered investment companies, pooled investment
vehicles and other accounts managed by Boon Hong Yeo and the total assets
managed within each category as of December 31, 2005.
<Table>
<Caption>
REGISTERED INVESTMENT OTHER POOLED INVESTMENT
COMPANIES VEHICLES OTHER ACCOUNTS
- -------------------------------------------------------------------------------
NUMBER OF NUMBER OF NUMBER OF
ACCOUNTS TOTAL ASSETS ACCOUNTS TOTAL ASSETS ACCOUNTS TOTAL ASSETS
- -------------------------------------------------------------------------------
1 $ 50 million 11 $ 728 million 1 $ 92 million
</Table>
No advisory fee is paid based on performance for any of the accounts
listed above.
Potential Conflicts of Interest
It is possible that conflicts of interest may arise in connection with
the portfolio managers' management of the Portfolio's investments on the one
hand and the investments of other accounts on the other. For example, the
portfolio managers may have conflicts of interest in allocating management time,
resources and investment opportunities among the Portfolio and other accounts
they advise. In addition due to differences in the investment strategies or
restrictions between the Portfolio and the other accounts, the portfolio
managers may take action with respect to another account that differs from the
action taken with respect to the Portfolio. Credit Suisse has adopted policies
and procedures that are designed to minimize the effects of these conflicts.
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If Credit Suisse believes that the purchase or sale of a security is
in the best interest of more than one client, it may (but is not obligated to)
aggregate the orders to be sold or purchased to seek favorable execution or
lower brokerage commissions, to the extent permitted by applicable laws and
regulations. Credit Suisse may aggregate orders if all participating client
accounts benefit equally (i.e., all receive an average price of the aggregated
orders). In the event Credit Suisse aggregates an order for participating
accounts, the method of allocation will generally be determined prior to the
trade execution. Although no specific method of allocation of transactions (as
well as expenses incurred in the transactions) is expected to be used,
allocations will be designed to ensure that over time all clients receive fair
treatment consistent with Credit Suisse's fiduciary duty to its clients
(including its duty to seek to obtain best execution of client trades). The
accounts aggregated may include registered and unregistered investment companies
managed by Credit Suisse's affiliates and accounts in which Credit Suisse's
officers, directors, agents, employees or affiliates own interests. Applicant
may not be able to aggregate securities transactions for clients who direct the
use of a particular broker-dealer, and the client also may not benefit from any
improved execution or lower commissions that may be available for such
transactions.
Compensation
Boon Hong Yeo is compensated for his services by Credit Suisse. His
compensation consists of a fixed base salary and a discretionary bonus that is
not tied by formula to the performance of any fund or account. The factors taken
into account in determining his bonus include the Fund's performance, assets
held in the Fund and other accounts managed by the portfolio managers, business
growth, team work, management, corporate citizenship, etc. A portion of the
bonus may be paid in phantom shares of Credit Suisse Group stock as deferred
compensation. Like all employees of Credit Suisse, these portfolio managers
participate in Credit Suisse's profit sharing and 401(k) plans.
Securities Ownership. As of December 31, 2005, Mr. Yeo did not own any shares of
the registrant.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
None.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors since the registrant
last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(g)
of Schedule 14A in its definitive proxy statement dated March 1, 2005.
<Page>
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of a date within 90 days from the filing date of this report, the
principal executive officer and principal financial officer 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")) were effective based on
their evaluation of the disclosure controls and procedures required by Rule
30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934.
(b) There were no changes in registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the
second fiscal quarter of the period covered by this report that have materially
affected, or are reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Registrant's Code of Ethics is an exhibit to this report.
(a)(2) The certifications of the registrant as required by Rule 30a-2(a) under
the Act are exhibits to this report.
(a)(3) Not applicable.
(b) The certifications of the registrant as required by Rule 30a-2(b)
under the Act are an exhibit to this report.
<Page>
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.
THE INDONESIA FUND, INC.
/s/ Steven B. Plump
------------------------------
Name: Steven B. Plump
Title: Chief Executive Officer
Date: March 9, 2006
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.
/s/ Steven B. Plump
------------------------------
Name: Steven B. Plump
Title: Chief Executive Officer
Date: March 9, 2006
/s/ Michael A. Pignataro
------------------------------
Name: Michael A. Pignataro
Title: Chief Financial Officer
Date: March 9, 2006