-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L0oZlfozjFqHWE4gCwxdZ3sUiHx70gFKkrFGcr74S/ItO87fKEPHgVQnwlbOlRhl 4o4mnUVc6pmkncGy+d5dRQ== 0000898733-03-000554.txt : 20031203 0000898733-03-000554.hdr.sgml : 20031203 20031203114357 ACCESSION NUMBER: 0000898733-03-000554 CONFORMED SUBMISSION TYPE: N-CSRS PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030930 FILED AS OF DATE: 20031203 EFFECTIVENESS DATE: 20031203 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASIA PACIFIC FUND INC CENTRAL INDEX KEY: 0000795618 IRS NUMBER: 133362641 STATE OF INCORPORATION: MD FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-CSRS SEC ACT: 1940 Act SEC FILE NUMBER: 811-04710 FILM NUMBER: 031034417 BUSINESS ADDRESS: STREET 1: 199 WATER ST CITY: NEW YORK STATE: NY ZIP: 10292 BUSINESS PHONE: 2122141250 MAIL ADDRESS: STREET 1: ONE SEAPORT PLZ CITY: NEW YORK STATE: NY ZIP: 10292 N-CSRS 1 mf16203ncsr.txt THE ASIA PACIFIC FUND -- SEMI ANNUAL -- 12/2/03 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-4710 Exact name of registrant as specified in charter: The Asia Pacific Fund, Inc. Address of principal executive offices: Gateway Center 3 100 Mulberry Street Newark, New Jersey 07102 Name and address of agent for service: Deborah A. Docs Gateway Center 3 100 Mulberry Street Newark, New Jersey 07102 Registrant's telephone number, including area code: 973-367-7521 Date of fiscal year end: March 31, 2004 Date of reporting period: September 30, 2003 Item 1 -- Reports to Stockholders The Asia Pacific Fund, Inc. - ------------------------------------------------------------------- Semi-Annual Report September 30, 2003 www.asiapacificfund.com The Asia Pacific Fund, Inc. As of September 30, 2003 (Unaudited) OUR TOLL-FREE LINE: 1-888-4-ASIA-PAC For further information on the Fund, please call. In addition, the Fund makes available monthly portfolio information. If you would like to receive this information please call the toll-free number indicated above. Statistics Total Net Assets $128,935,574 Shares Outstanding 10,344,072 Net Asset Value $12.46 Equity 99.9%(a) Repurchase Agreement 0.1%(a) Total Returns (US Dollar terms) Market Period Price(b) NAV(c) 3 months ended 9/30/03 18.42% 16.2% 6 months ended 9/30/03 47.65% 36.9% 9 months ended 9/30/03 34.68% 24.6% 1 Year ended 9/30/03 43.58% 27.3% 3 Years ended 9/30/03 36.69% 5.7% 5 Years ended 9/30/03 143.84% 89.1% 10 Years ended 9/30/03 1.38% 25.7% Since inception(d) 208.34% 243.4% Since inception(d) (annualized) 7.09% 7.8% Other Information Ticker Symbol APB Primary Exchange NYSE Dividend Repurchase Program Yes - ------------------------------------------------- Footnote section (a) Expressed as a percentage of total investments. (b) Total investment return is calculated assuming a purchase of common stock at the current market value on the first day and a sale at the current market value on the last day of each period reported. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. These calculations do not include brokerage commissions. (c) This information represents the historical net asset value per share performance of The Asia Pacific Fund, Inc. "Net asset value per share performance" has been computed by the Investment Manager and, because it does not reflect market price, is not the same as "total investment return." (d) Investment operations commenced on May 4, 1987. Portfolio Characteristics (As of September 30, 2003) Top Ten Equity Holdings (% of Total Equity Investments) Samsung Electronics Co. 9.01% Taiwan Semiconductor Manufacturing Co. 3.29% Hang Seng Bank, Ltd. 3.10% Cheung Kong Holding, Ltd. 3.07% Fubon Financial Holdings Co. 3.04% PetroChina Co., Ltd. 2.95% Hutchison Whampoa, Ltd. 2.72% Hong Kong and China Gas Co., Ltd. 2.71% POSCO 2.68% Hon Hai Precision Industry Co., Ltd. 2.63% Equity Country Weightings (% of Total Equity Investments) [ PIE CHART ] Hong Kong/China 32.56% Malaysia 6.19% South Korea 26.10% India 2.72% Taiwan 17.84% Thailand 2.09% Singapore 10.55% Indonesia 1.95% Sector Breakdown: Top Ten Industries (% of Total Equity Investments) Information Technology 19.0% Banking 16.2% Industrials 14.3% Consumer Discretionary 10.3% Telecommunications 7.2% Financial Services 6.7% Real Estate-Developers 6.3% Materials 6.8% Consumer Staples 5.2% Utilities 3.8% 1 REPORT OF THE INVESTMENT MANAGER For the period from March 31 to September 30, 2003 PERFORMANCE During the last six months the Fund's net asset value (NAV) per share increased by US$3.36 from US$9.10 to US$12.46. In percentage terms the Fund's total return performance was 36.9%. This compares with the return of its relevant benchmark index, the MSCI Combined Far East Free Ex-Japan Gross Index of 39.6%. The chart below illustrates the Fund's net asset value performance per share during the period: [ BAR GRAPH ] Local Currency Exchange Rates to US Dollar March 31 - Sept. 30 Currency March 31, June 30, Sept. 30, 2003 US$/local rate 2003 2003 2003 Change % North Asia Chinese Renminbi 8.28 8.28 8.28 0.0 Hong Kong Dollar 7.88 7.80 7.74 1.8 Korean Won 1,254.45 1,194.50 1,150.10 8.3 New Taiwan Dollar 34.75 34.61 33.76 2.8 ASEAN Indonesian Rupiah 8,901.50 8250.00 8,394.64 5.7 Malaysian Ringgit 3.80 3.80 3.80 0.0 Philippine Peso 53.53 53.45 54.87 -2.5 Singaporean Dollar 1.77 1.76 1.73 2.3 Thai Baht 42.88 42.04 39.93 6.9 South Asia Indian Rupee 47.46 46.47 45.76 3.6 Source: Factset (Baring Asset Managemnt) Stock Market Performance March 31 to September 30, 2003 March 31 to June 30 to March 31 to June 30, 2003 Sept. 30, 2003 Sept. 30, 2003 Market Market Market Change % Change % Change % Country - Index US $ US $ US $ North Asia MSCI China 20.2 18.1 42.0 MSCI Hong Kong 9.8 26.1 38.5 MSCI Korea 30.8 9.8 43.6 MSCI Taiwan 15.6 23.2 42.3 ASEAN MSCI Indonesia Free 48.1 14.2 69.2 MSCI Malaysia Free 10.4 6.0 17.0 MSCI Philippines Free 23.5 4.3 28.8 MSCI Singapore Free 16.4 15.1 34.0 MSCI Thailand Free 28.9 24.3 60.2 South Asia MSCI India 18.2 27.6 50.8 Regional MSCI Combined Far East Free Ex-Japan 19.2 17.1 39.6 Source: MSCI COUNTRY ALLOCATION(a) March 31, June 30, Sept. 30, Country 2003 2003 2003 North Asia 71.9% 75.5% 76.3% Hong Kong/China 31.5 31.3 32.5 South Korea 24.3 27.9 26.0 Taiwan 16.1 16.3 17.8 ASEAN 22.3 22.0 20.7 Indonesia 1.0 1.7 1.9 Malaysia 6.9 6.3 6.2 Singapore 12.3 11.7 10.5 Thailand 2.1 2.3 2.1 South Asia India 2.5 2.5 2.7 Cash and Equivalents 3.3 0.0 0.3 (a) Expressed as a percentage of total net assets and rounded to one decimal place. 2 MARKET & ASSET ALLOCATION REVIEW The market as measured by our benchmark index, rallied strongly during the period-up 39.6%. During the last six months there was no month that produced a negative return. The second and third quarters of 2003 saw the benchmark index return 19.2% and 17.1% respectively. The US Dollar weakened over the period with only the Philippine Peso performing worse than the Greenback. The Korean Won, Thai Baht and Indonesia Rupiah strengthened the most against the US Dollar rising 8.3%, 6.9% and 5.7%, respectively. During the period, Asian currencies, especially those pegged to the US Dollar (particularly the Chinese Renminbi), received much criticism in the international political arena for being relatively undervalued. The Asian market recovery coincided with the remission of SARS in mid April. At around the same time, improved global economic news followed the end of the Gulf War. Significantly, Japanese economic data suggested it too was seeing an upturn. Investor sentiment towards the region, particularly amongst foreign investors, markedly brightened. Between May and September, an estimated $24bn of net foreign portfolio investments have flowed into Asia ex-Japan, driving the markets higher. During the second quarter of calendar year 2003, the smaller, more illiquid, ASEAN markets led the rally. Underheld, commodity related economies and relative valuations were the accepted reasons for their attractiveness. In the third quarter, however, the larger markets of North Asia gained leadership. Asset reflation, liquidity and recovery were investors' determinants for investing. Over the six months, China as an investment theme has returned to the forefront of investors' minds. The Indian consumer and the Thai recovery themes also became widely accepted investment stories. High beta investments led the Asian rally. These included China 'H' shares, Thai property companies, the Technology and Cyclical sectors. For the first time since 1999/2000, asset stories, the Hong Kong property sector in particular, returned to the lime-light. Low beta Utilities, Consumer Durables and Telecoms were notable laggards. During the six months, the Fund made three major changes. First, the portfolio's cash position was reduced from 3.3% in late March to fractional cash early in the period. Second, in the middle of the period under review, the portfolio's focus shifted marginally from mid-capitalization stocks to larger capitalization issues, as the latter are likely to benefit to a greater extent from foreign inflows into the region. Third, the emphasis in North Asia moved from South Korea to Hong Kong in mid/late July. OUTLOOK Having lagged earlier in the year, the June and September quarters have seen the Asian markets catch up and then overtake those of the Developed World. At the time of writing, the Asian markets are up over 50% from their lows. Investor sentiment towards the region has moved from one of pessimism to outright optimism. The extent and speed of the turn around in attitude is extreme, but markets often exhibit schizophrenic behavior. As mentioned earlier in the report, foreigners have led this rally. Further foreign fund flows are anticipated. Asian equities are no longer trading at distressed levels, nor are they expensive in their own historic context; and they remain inexpensive relative to most developed equity markets. Local investors in most Asian markets remain conspicuous by their absence. The next leg of the Asian rally is likely to require their presence and a belief in the Asian reflation story. For the time being the jury is out, but the omens are good, as loan growth appears to be picking up and property transaction volumes are rising. The Fund remains positioned in a cautiously optimistic manner. Its investment focus is alpha based rather than beta oriented; in other words quality-oriented rather than momentum-oriented companies are the main staple. The portfolio is expected to perform well if weak markets transpire but also to participate in further market strength. James Squire Investment Manager Baring Asset Management (Asia) Limited 3 - ---------------------------------------------------------- THE ASIA PACIFIC FUND, INC. Portfolio of Investments September 30, 2003 (Unaudited)
- ------------------------------------------------------- Value Shares Description (Note 1) - ------------------------------------------------------- EQUITIES--99.7% Hong Kong--32.5% 500,000 Cheung Kong Holdings, Ltd. $ 3,954,777 (Real Estate-Developers) 986,500 China Mobile, Ltd.(a) .... 2,605,171 (Telecommunications) 320,000 CLP Holdings, Ltd. ....... 1,404,995 (Utilities) 820,000 Esprit Asia Holdings, Ltd.. 2,493,737 (Consumer Discretionary) 718,000 Fountain Set Holdings, Ltd. 560,952 (Industrials) 2,150,000 Giordano International, Ltd. ................... 978,686 (Consumer Discretionary) 1,610,000 Global Bio-chem Technology Group Co., Ltd. ........ 608,132 (Industrials) 8,000,000 Guangdong Investment, Ltd.. 1,508,303 (Industrials) 300,000 Guoco Group, Ltd. ........ 2,043,570 (Financial Services) 325,100 Hang Seng Bank, Ltd. ..... 3,988,287 (Banking) 2,056,000 Harbin Brewery Group, Ltd.(a) ................. 716,857 (Consumer Staples) 2,591,846 Hong Kong and China Gas Co., Ltd. .............. 3,480,875 (Utilities) 580,000 Hongkong Land Holdings, Ltd. .................... 922,200 (Real Estate-Developers) 174,000 HSBC Holdings Plc. ....... 2,348,072 (Banking) 480,300 Hutchison Whampoa, Ltd. 3,504,345 (Industrials) 1,600,000 Kingboard Chemical Holdings, Ltd. ......... 1,704,590 (Industrials) 2,186,000 Legend Holdings, Ltd. .... 882,157 (Information Technology) 2,504,000 Ngai Lik Industrial Holding Ltd. .................... $ 881,144 (Consumer Discretionary) 11,210,000 PetroChina Co., Ltd. ..... 3,799,976 (Energy) 280,000 Sun Hung Kai Properties, Ltd. .................... 2,268,912 (Real Estate-Developers) 1,020,000 Union Bank Hong Kong ..... 1,224,980 (Banking) ------------ 41,880,718 ------------ India--2.7% 78,147 Housing Development Finance Corp., Ltd. ............ 852,257 (Financial Services) 11,414 Infosys Technologies, Ltd.(a) . .............. 1,128,479 (Information Technology) 100,000 Morgan Stanley India Investment Fund, Inc. ... 1,523,000 (Investment Company) ------------ 3,503,736 ------------ Indonesia--1.9% 9,582,000 PT Bank Mandiri Tbk(a) ... 970,185 (Banking) 1,144,000 PT Gudang Garam Tbk ...... 1,533,055 (Consumer Staples) ------------ 2,503,240 ------------ Malaysia--6.2% 149,200 British American Tobacco Berhad ................. 1,550,895 (Consumer Staples) 1,800,000 Magnum Corp. Berhad ...... 1,184,210 (Consumer Discretionary) 1,032,400 Malayan Banking Berhad ... 2,608,168 (Banking) 500,000 Malaysia International Shipping Corp. Berhad ... 1,302,632 (Industrials)
See Notes to Financial Statements. 4
- ------------------------------------------------------- Value Shares Description (Note 1) - ------------------------------------------------------- Malaysia--(cont'd.) 520,000 Tanjong Co., Ltd. ........ $ 1,320,526 (Consumer Discretionary) ------------ 7,966,431 ------------ Singapore--10.5% 420,469 DBS Group Holdings, Ltd. .. 3,137,919 (Banking) 2,400,000 Lindeteves-Jacoberg, Ltd. . 1,471,754 (Industrials) 150,000 Singapore Airlines, Ltd. . 919,846 (Industrials) 253,198 Singapore Press Holdings, Ltd. .................... 2,680,584 (Consumer Discretionary) 1,939,577 Singapore Technologies Engineering, Ltd. ...... 2,098,296 (Industrials) 420,000 United Overseas Bank, Ltd. 3,255,908 (Banking) ------------ 13,564,307 ------------ South Korea--26.0% 14,730 Amorepacific Corp. ....... 1,786,580 (Consumer Staples) 14,000 Cheil Communications, Inc. 1,618,919 (Consumer Discretionary) 100,019 Kookmin Bank ............. 3,278,456 (Banking) 68,000 Korea Electrical Terminal Co., Ltd. .............. 1,173,586 (Industrials) 79,980 KT Corp. ................. 1,594,002 (Telecommunications) 125,400 KT&G Corp. ............... 1,141,140 (Consumer Staples) 61,600 LG Petrochemical Co., Ltd. 1,226,484 (Materials) 140,350 Poongsan Corp. ........... 1,134,856 (Materials) 30,040 POSCO .................... 3,447,620 (Materials) 34,008 Samsung Electronics Co. ... 11,590,780 (Information Technology) 32,000 Samsung Fire & Marine Insurance Co., Ltd. .... 1,791,766 (Financial Services) 7,580 Shinsegae Co., Ltd. ...... 1,341,156 (Consumer Discretionary) 15,290 SK Telecom Co., Ltd. ..... 2,446,081 (Telecommunications) ------------ 33,571,426 ------------ Taiwan--17.8% 374,231 Asustek Computer, Inc.(a) . $ 947,771 (Information Technology) 419,000 Basso Industry Corp. ..... 800,518 (Industrials) 72,000 Chunghwa Telecom Co., Ltd. 1,008,720 (Telecommunications) 2,120,000 Formosa Plastic Corp. .... 2,932,583 (Materials) 3,999,960 Fubon Financial Holdings Co.(a) ................. 3,909,914 (Financial Services) 781,718 Hon Hai Precision Industry Co., Ltd.(a) ........... 3,380,652 (Information Technology) 700,840 Lite-On Technology Corp. .. 753,569 (Consumer Discretionary) 2,399,965 Phoenixtec Power Co., Ltd. 2,729,818 (Industrials) 2,145,046 Taiwan Semiconductor Manufacturing Co. ...... 4,225,283 (Information Technology) 2,711,457 United Microelectronics Corp., Ltd.(a) ......... 2,248,839 (Information Technology) ------------ 22,937,667 ------------ Thailand--2.1% 3,380,000 Land & Houses PCL ........ 1,024,243 (Real Estate-Developers) 2,800,000 Shin Corp. PCL ........... 1,661,908 (Telecommunications) ------------ 2,686,151 ------------ Total equities (cost $99,755,508)....... 128,613,676 ------------ Principal Amount (000) - ---------- REPURCHASE AGREEMENT--0.1% United States $ 123 State Street Bank & Trust Co., 0.35%, dated 9/30/03 due 10/1/03 in the amount of $123,001 (cost $123,000; collateralized by $110,000 U.S. Treasury Notes, 6.5% due 2/15/10, approximate value of collateral including accrued interest $130,763)................ 123,000 ------------ Total Investments--99.8% (cost $99,878,508)......... 128,736,676 Other assets in excess of liabilities--0.2%........ 198,898 ------------ Net Assets--100%........... $128,935,574 ------------ ------------
- --------------- (a) Non-income producing security. See Notes to Financial Statements. 5 - ---------------------------------------------------------- THE ASIA PACIFIC FUND, INC. Statement of Assets and Liabilities September 30, 2003 (Unaudited) - ---------------------------------------------------------- Assets Investments, at value (cost $99,878,508)......................... $128,736,676 Foreign currency (cost $34,221)........ 34,551 Cash................................... 3,030 Receivable for investments sold........ 286,393 Dividends and interest receivable...... 256,804 Other assets........................... 74,558 ------------ Total assets......................... 129,392,012 ------------ Liabilities Accrued expenses....................... 200,755 Deferred Thailand capital gains tax liability............................ 120,535 Investment management fee payable...... 99,335 Administration fee payable............. 26,646 Foreign withholding taxes payable...... 9,167 ------------ Total liabilities.................... 456,438 ------------ Net Assets............................. $128,935,574 ------------ ------------ Net assets comprised: Common stock, at par................. $ 103,441 Paid-in capital in excess of par..... 131,246,165 ------------ 131,349,606 Undistributed net investment income.... 986,121 Accumulated net realized losses on investments and foreign currency transactions......................... (32,138,319) Net unrealized appreciation on investments and foreign currencies... 28,738,166 ------------ Net Assets, September 30, 2003......... $128,935,574 ------------ ------------ Net Asset Value per share: ($128,935,574 3 10,344,072 shares of common stock outstanding)............ $12.46 ------------ ------------
See Notes to Financial Statements. - ---------------------------------------------------------- THE ASIA PACIFIC FUND, INC. Statement of Operations Six Months Ended September 30, 2003 (Unaudited) - ---------------------------------------------------------- Net Investment Income Income Dividends (net of foreign withholding taxes of $344,296).................. $ 2,265,444 Interest.............................. 2,151 ----------- Total income........................ 2,267,595 ----------- Expenses Investment management fee............. 550,699 Administration fee.................... 142,794 Custodian's fees and expenses......... 129,000 Legal fees and expenses............... 90,000 Directors' fees and expenses.......... 75,000 Reports to shareholders............... 58,000 Insurance expense..................... 31,000 Audit fee............................. 21,000 Transfer agent's fees and expenses.... 18,000 Registration expenses................. 17,000 Miscellaneous......................... 30,234 ----------- Total expenses.................... 1,162,727 ----------- Net investment income................. 1,104,868 ----------- Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions Net realized gain (loss) on: Investment transactions (net of Thailand capital gains taxes of $104,044)........................... 1,327,607 Foreign currency transactions......... (43,595) ----------- 1,284,012 ----------- Net change in unrealized appreciation (depreciation) on: Investments (net of change in deferred Thailand capital gains taxes of $52,521)............................ 32,407,121 Foreign currencies.................... 12,662 ----------- 32,419,783 ----------- Net gain on investments and foreign currencies............................ 33,703,795 ----------- Net Increase in Net Assets Resulting From Operations............... $34,808,663 ----------- -----------
See Notes to Financial Statements. 6 - ---------------------------------------------------------- THE ASIA PACIFIC FUND, INC. Statement of Changes in Net Assets (Unaudited) - ----------------------------------------------------------
Six Months Ended Year Ended Increase (Decrease) September 30, March 31, in Net Assets 2003 2003 ------------- ------------ Operations Net investment income............... $ 1,104,868 $ 110,773 Net realized gain on investments and foreign currency transactions......... 1,284,012 2,719,634 Net change in unrealized appreciation (depreciation) on investments and foreign currencies... 32,419,783 (32,792,091) ------------- ------------ Net increase (decrease) in net assets resulting from operations........... 34,808,663 (29,961,724) Cost of Fund shares reacquired in tender offer (Note 5)......... -- (36,918,702) ------------- ------------ Total increase (decrease)............. 34,808,663 (66,880,426) Net Assets Beginning of period...... 94,126,911 161,007,337 ------------- ------------ End of period(a)......... $ 128,935,574 $ 94,126,911 ------------- ------------ ------------- ------------ (a) Undistributed net investment income $ 986,121 -- ------------- ------------
- ---------------------------------------------------------- THE ASIA PACIFIC FUND, INC. Notes to Financial Statements (Unaudited) - ---------------------------------------------------------- The Asia Pacific Fund, Inc. (the 'Fund') is a diversified, closed-end, management investment company. The Fund's investment objective is to achieve long-term capital appreciation through investment primarily in equity securities of companies in the Asia Pacific countries. Note 1. Accounting Policies The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. Securities Valuation: Investments are stated at value. Investments for which market quotations are readily available are valued at the last reported sales prices. If there is no sales price or reliable market quotation on the date of valuation, then investments are valued at the last bid price quoted on such date or at fair value as determined in good faith by or under the direction of the Fund's Board of Directors. Short-term securities which mature in more than 60 days are valued at current market quotations. Short-term securities which mature in 60 days or less are valued at amortized cost. In connection with transactions in repurchase agreements with U.S. financial institutions, it is the Fund's policy that its custodian take possession of the underlying securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to ensure the adequacy of the collateral. If the seller defaults, and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. Foreign Currency Translation: The books and records of the Fund are maintained in United States dollars. Foreign currency amounts are translated into United States dollars on the following basis: (i) market value of investment securities, other assets and liabilities--at the current rate of exchange. 7 (ii) purchases and sales of investment securities, income and expenses--at the rate of exchange prevailing on the respective dates of such transactions. Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of the fiscal period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of securities held at fiscal period end. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of portfolio securities sold during the fiscal period. Accordingly, these realized foreign currency gains(losses) are included in the reported net realized gains(losses) on investment transactions. Net realized gains (losses) on foreign currency transactions represent net foreign exchange losses from sales and maturities of short-term securities, holding of foreign currencies, currency gains (losses) realized between the trade and settlement dates on security transactions, and the difference between the amounts of dividends, interest and foreign taxes recorded on the Fund's books and the U.S. dollar equivalent amounts actually received or paid. Net currency gains and losses from valuing foreign currency denominated assets, other than investment securities, and liabilities at fiscal period end exchange rates are reflected as a component of unrealized appreciation on investments and foreign currencies. Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of U.S. companies as a result of, among other factors, the level of governmental supervision and regulation of foreign securities markets and the possibility of political or economic instability. Security Transactions and Net Investment Income: Security transactions are recorded on the trade date. Realized and unrealized gains and losses from security and foreign currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date, and interest income is recorded on an accrual basis. Expenses are recorded on the accrual basis which may require the use of certain estimates by management. Dividends and Distributions: Dividends from net investment income, if any, are declared and paid at least annually. The Fund will distribute at least annually any net capital gains, if any, in excess of net capital loss carryforwards. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified to paid-in capital when they arise. Taxes: It is the Fund's policy to continue to meet the requirements of the U.S. Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable income to shareholders. Therefore, no federal income tax provision is required. Withholding taxes on foreign dividends, interest and capital gains have been provided for in accordance with the Fund's understanding of the applicable country's tax rules and rates. Note 2. Investment Management and Administration Agreements The Fund has a management agreement with Baring Asset Management (Asia) Limited (the 'Investment Manager') and an administration agreement with Prudential Investments LLC (the 'Administrator'). The Investment Manager is an indirect, wholly owned subsidiary of ING Groep N.V. The investment management fee is computed weekly and payable monthly: 1.10% of the Fund's average weekly net assets up to $50 million, 0.90% of such assets between $50 million and $100 million and 0.70% of such assets in excess of $100 million based upon the Fund's average weekly net assets. The administration fee is also computed weekly and payable monthly at an annual rate of 0.25% up to $200 million and 0.20% in excess of $200 million based upon the Fund's average weekly net assets. Pursuant to the agreements, the Investment Manager provides continuous supervision of the investment portfolio and the Administrator provides occupancy and certain clerical and accounting services for the Fund. Both the Investment Manager and the Administrator pay the cost of compensation of certain directors and officers of the Fund. The Fund bears all other costs and expenses. 8 Note 3. Portfolio Securities Purchases and sales of investment securities, other than short-term investments, for the six months ended September 30, 2003 aggregated $35,290,463 and $31,507,274, respectively. Note 4. Tax As of March 31, 2003, the capital loss carryforward for tax purposes is approximately $31,479,700 of which $29,243,900 expires in 2007 and $2,235,800 expires in 2010. Accordingly, no capital gains distribution is expected to be paid to shareholders until net gains have been realized in excess of such carryforward. The capital loss carryforward differs from the amount on the statement of assets and liabilities primarily due to the Fund's deferring 'wash sale' losses of approximately $428,300 and post-October capital losses of approximately $1,514,200. The differences between book and tax accumulated net investment loss are primarily attributable to post-October currency gains of approximately $28,800 and marking to market of unrealized gains on passive foreign investment companies of approximately $90,000. The United States federal income tax basis of the Fund's investments and unrealized appreciation as of September 30, 2003 were as follows: Total Net Unrealized Tax Basis Appreciation Depreciation Appreciation - ------------ ------------ ------------ ------------ $100,306,844 $ 34,501,516 $ 6,071,684 $ 28,429,832 Note 5. Capital There are 30 million shares of $0.01 par value common stock authorized. During the fiscal quarter ended September 30, 2002, the Fund conducted a tender offer in which the Fund purchased 3,448,024 shares (25% of the total shares outstanding as of July 7, 2002) at a price of $10.66 per share, representing a discount to NAV per share of 5%. Note 6. Borrowings The Fund is a party to a revolving loan facility with Barings (Guernsey) Limited, an affiliate and wholly-owned division of Baring Asset Management. The credit facility provides for a maximum commitment of the lower of $30 million or 25% of the Fund's net assets. Interest on any borrowings under the credit facility will be at 0.75% plus the current LIBOR. The purpose of the credit facility is to assist the Fund with its general cash flow requirements including the provision of gearing accommodations. The expiration of the credit facility is July 31, 2004. The Fund did not borrow any amounts pursuant to the credit facility during the six months ended September 30, 2003. 9 THE ASIA PACIFIC FUND, INC. Financial Highlights (Unaudited) - --------------------------------------------------------------------------------
Six Months Ended Year Ended March 31, September 30, ------------------------------------------------------------ Per Share Operating Performance: 2003 2003 2002 2001 2000 1999 ------------- -------- -------- -------- -------- -------- Net asset value, beginning of period... $ 9.10 $ 11.67 $ 10.05 $ 14.69 $ 8.60 $ 9.19 ------------- -------- -------- -------- -------- -------- Net investment income (loss)........... 0.11 0.01 (0.03) (0.01) --(c) 0.06 Net realized and unrealized gain (loss) on investments and foreign currency transactions......................... 3.25 (2.77) 1.52 (4.87) 6.23 (0.61) ------------- -------- -------- -------- -------- -------- Total from investment operations....... 3.36 (2.76) 1.49 (4.88) 6.23 (0.55) ------------- -------- -------- -------- -------- -------- Less dividends and distributions: Dividends from net investment income... -- -- -- -- -- (0.04) Distributions in excess of net investment income.................... -- -- -- -- (0.14) -- ------------- -------- -------- -------- -------- -------- Total dividends and distributions...... -- -- -- -- (0.14) (0.04) Increase resulting from share repurchase........................... -- -- 0.02 0.06 -- -- Increase resulting from tender offer... -- 0.19 0.11 0.18 -- -- ------------- -------- -------- -------- -------- -------- Net asset value, end of period......... $ 12.46 $ 9.10 $ 11.67 $ 10.05 $ 14.69 $ 8.60 ------------- -------- -------- -------- -------- -------- ------------- -------- -------- -------- -------- -------- Market value, end of period............ $ 11.96 $ 8.10 $ 10.12 $ 7.86 $10 7/16 $ 7 1/16 ------------- -------- -------- -------- -------- -------- ------------- -------- -------- -------- -------- -------- Total investment return(a)............. 47.65% (19.96)% 28.75% (24.70)% 49.68% (21.02)% ------------- -------- -------- -------- -------- -------- ------------- -------- -------- -------- -------- -------- Ratios to Average Net Assets: Expenses before loan interest and commitment fee....................... -- 2.24% -- -- -- -- Total expenses......................... 2.05%(b) 2.25% 2.24% 1.81% 1.66% 1.79% Net investment income (loss)........... 1.95%(b) 0.09% (0.31)% (0.05)% (0.01)% 0.80% Supplemental Data: Average net assets (000 omitted)....... $ 113,002 $122,681 $148,224 $214,819 $230,725 $141,079 Portfolio turnover rate................ 28%(d) 34% 49% 52% 62% 64% Net assets, end of period (000 omitted)............................. $ 128,936 $ 94,127 $161,007 $155,579 $278,011 $162,719
- --------------- (a) Total investment return is calculated assuming a purchase of common stock at the current market value on the first day and a sale at the current market value on the last day of each fiscal period reported. Dividends and distributions are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment plan. These calculations do not include brokerage commissions. Total returns for periods of less than a full year are not annualized. (b) Annualized. (c) Less than $0.005 per share. (d) Not annualized. Contained above is selected data for a share of common stock outstanding, total investment return, ratios to average net assets and other supplemental data for the periods indicated. This information has been determined based upon information provided in the financial statements and market price data for the Fund's shares.
See Notes to Financial Statements. 10 - -------------------------------------------------------------------------------- Supplemental Proxy Information - -------------------------------------------------------------------------------- The Annual Meeting of Stockholders of the Asia Pacific Fund, Inc. was held on August 7, 2003. The number of shares issued, outstanding and eligible to vote as of the record date of July 3, 2003 were 10,344,072 shares. Proxies representing 6,680,226 shares of Common Stock or 64.58% of the total outstanding shares voted in the following manner: Proposal I (Election of Directors) Total Vote For Total Vote Withheld Each Director Each Director -------------- ------------------- Robert H. Burns 6,428,543 251,683 Douglas Tong Hsu 6,478,177 202,050 David G.P. Scholfield 6,589,723 90,503 - -------------------------------------------------------------------------------- Corporate Governance - -------------------------------------------------------------------------------- In September 2003, in connection with its periodic review of the corporate governance of the Fund, the Board of Directors approved various amendments to the Fund's Bylaws that it believed were in the best long-term interests of the Fund. These amendments, among other things, modified certain of the present procedures for the conduct of stockholder meetings, added to the present informational requirements for the advance notice of stockholder nominees for the Board of Directors and of other stockholder proposals, and increased the vote required for the election of Directors from a majority of the votes cast at a stockholder meeting to the affirmative vote of holders of a majority of the Fund's outstanding shares. A possible effect of this increase would be the continuation in office of incumbent Directors in the event that neither candidates nominated by stockholders nor candidates nominated by the Board received the affirmative vote of holders of a majority of the Fund's outstanding shares at an annual meeting of stockholders. The amended Bylaws are on file with the Securities and Exchange Commission. 11 Directors Michael J. Downey, Chairman David J. Brennan Robert H. Burns Olarn Chaipravat Robert F. Gunia Douglas Tong Hsu David G. P. Scholfield Nicholas T. Sibley Officers Ronald G. M. Watt, President Robert F. Gunia, Vice President and Treasurer Linda McMullin, Assistant Treasurer James D. Kelly, Assistant Treasurer Deborah A. Docs, Secretary Investment Manager Baring Asset Management (Asia) Limited 1901 Edinburgh Tower 15 Queen's Road Central Hong Kong Administrator Prudential Investments LLC Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 Custodian State Street Bank and Trust Company One Heritage Drive North Quincy, MA 02171 Transfer Agent Equiserve Trust Company, N.A. P.O. Box 43011 Providence, RI 02940-3011 Independent Accountants Ernst & Young LLP 5 Times Square New York, NY 10036 Legal Counsel Sullivan & Cromwell LLP 125 Broad Street New York, New York 10004 Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Fund may purchase, from time to time, shares of its common stock at market prices. The accompanying financial statements as of September 30, 2003 were not audited and, accordingly, no opinion is expressed on them. This report, including the financial statements herein, is transmitted to the shareholders of The Asia Pacific Fund, Inc. for their information. This is not a prospectus, circular or representation intended for use in the purchase of shares of the Fund or any securities mentioned in this report. The Asia Pacific Fund, Inc. Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 For general information on the Fund, please call (toll-free) Citigate Dewe Rogerson, our shareholders' servicing agent toll-free at: (888) 4-ASIA-PAC Current information about the Fund is available on its website (http://www.asiapacificfund.com). This website includes monthly updates of the Fund's performance and other data as well as the Manager's quarterly presentation of performance and asset allocations and comments on the current Asian outlook. The Fund's Web Site address is: www.asiapacificfund.com The Fund's CUSIP number is 044901106 APBS Item 2 -- Code of Ethics -- Not required in this filing Item 3 -- Audit Committee Financial Expert -- Not required in this filing Item 4 -- Principal Accountant Fees and Services -- Not required in this filing Item 5 -- Reserved Item 6 -- Reserved Item 7 -- Disclosure of Proxy Voting Policies and Procedures for Closed- End Management Investment Companies -- Not required in this filing Item 8 -- Reserved Item 9 -- Controls and Procedures (a) It is the conclusion of the registrant's principal executive officer and principal financial officer that the effectiveness of the registrant's current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant's principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. (b) There have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 10 -- Exhibits (a) Code of Ethics -- Not required in this filing (b) Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act - Attached hereto SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) The Asia Pacific Fund, Inc. By (Signature and Title)* /s/Deborah A. Docs ------------------ Deborah A. Docs Secretary Date November 21, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/Ronald G. M. Watt -------------------- President and Principal Executive Officer Date November 21, 2003 By (Signature and Title)* /s/Robert F. Gunia ------------------ Treasurer and Principal Financial Officer Date November 21, 2003 * Print the name and title of each signing officer under his or her signature. EX-99.CERT 3 mf16203ex99cert.txt SECTION 302 SARBANES-OXLEY CERTIFICATIONS Item 10 The Asia Pacific Fund, Inc. Semi-annual period ending 9/30/03 File No. 811-4710 CERTIFICATIONS I, Ronald G.M. Watt, certify that: 1. I have reviewed this report on Form N-CSR of The Asia Pacific Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and; c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half- year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 24, 2003 /s/Ronald G.M. Watt ----------------------------------- Ronald G.M. Watt President and Principal Executive Officer Item 10 The Asia Pacific Fund, Inc. Semi-annual period ending 9/30/03 File No. 811-4710 CERTIFICATIONS I, Robert F. Gunia, certify that: 1. I have reviewed this report on Form N-CSR of The Asia Pacific Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and; c. Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half- year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. All significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: November 24, 2003 /s/Robert F. Gunia ----------------------------------- Robert F. Gunia Treasurer and Chief Financial Officer EX-99.906 CERT 4 mf16203ex906cert.txt SECTION 906 SARBANES-OXLEY CERTIFICATIONS Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: The Asia Pacific Fund, Inc. In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his or her knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: November 24, 2003 /s/Ronald G.M. Watt --------------------------------- Ronald G.M. Watt President and Principal Executive Officer Date: November 24, 2003 /s/Robert F. Gunia --------------------------------- Robert F. Gunia Treasurer and Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----