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 811-8050
Asia Tigers Fund, Inc.
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(Exact name of registrant as specified in charter)
200 Park Avenue
New York, NY 10166
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(Address of principal executive offices) (Zip code)
Simpson Thatcher Bartlett
425 Lexington Avenue
New York, NY 10017
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(Name and address of agent for service)
Registrant's telephone number, including area code: 212-667-4711
Date of fiscal year end: October 31, 2003
----------------
Date of reporting period: April 30, 2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
THE ASIA TIGERS FUND, INC.
May 23, 2003
DEAR FUND SHAREHOLDER,
We are pleased to present you with the unaudited financial statements of The
Asia Tigers Fund, Inc. (the "Fund") for the six-month period ended April 30,
2003.
The Fund's net asset value (NAV) closed at $7.25 on April 30, 2003, representing
a decrease of (5.23%) during the six months ended on that date. The Fund
outperformed its benchmark, the MSCI AC Asia Free ex-Japan Index, which fell
(7.26%) during the same six-month period.
While investors had hoped for a return to economic prosperity during this
period, several anomalous occurrences limited the region's capabilities. First,
U.S.-led military action in Iraq interrupted normal market activity worldwide.
Second, developments regarding North Korea's alleged nuclear weapons program
rattled the Asian equity markets. Third, the sudden appearance of Severe Acute
Respiratory Syndrome (SARS), a lethal infection, momentarily crippled several
countries in which the Fund invests. Although positive market influences were
also present during the period, we believe these formidable difficulties proved
to be an inescapable hindrance for non-Japan Asian equities.
On behalf of the Board of Directors, we thank you for your participation and
continued support of the Fund. If you have any questions, please do not hesitate
to call our toll-free number, (800) 421-4777.
Sincerely,
/S/ BRYAN MCKIGNEY
Bryan McKigney
Chairman and President
1
THE ASIA TIGERS FUND, INC.
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CHANGE IN INVESTMENT POLICY
On April 30, 2002, the Board of Directors of the Fund approved a change to the
Fund's investment policies in connection with new Rule 35d-1 under the
Investment Company Act of 1940. Under normal conditions, the Fund will invest at
least 80% of the value of its assets in equity securities of Asian Companies (as
defined in the Fund's prospectus). Previously, the Fund's investment policies
stated that the Fund would invest at least 65% of the value of its assets in
such securities. The Board also adopted a policy to provide the stockholders of
the Fund with 60 days' notice of any change to the investment policy adopted if
such notice is required by Rule 35d-1.
FUNDAMENTAL PERIODIC REPURCHASE POLICY
The Fund has adopted the following fundamental policy regarding periodic
repurchases:
a) The Fund will make offers to repurchase its shares at quarterly
intervals pursuant to Rule 23c-3 under the Investment Company Act of
1940, as amended from time to time ("Offers"). The Board of Directors
may place such conditions and limitations on Offers as may be permitted
under Rule 23c-3.
b) 14 days prior to the last Friday of each of the Fund's fiscal quarters,
or the next business day if such Friday is not a business day, will be
the deadline (the "Repurchase Request Deadline") by which the Fund must
receive repurchase requests submitted by stockholders in response to the
most recent Offer.
c) The date on which the repurchase price for shares is to be determined
(the "Repurchase Pricing Date") shall occur no later than the last
Friday of each of the Fund's fiscal quarters, or the next business day
if such day is not a business day.
d) Offers may be suspended or postponed under certain circumstances, as
provided for in Rule 23c-3.
(For further details, see Notes E and F to the Financial Statements.)
- --------------------------------------------------------------------------------
2
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (UNAUDITED)
COMMON STOCKS (99.30% of holdings)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
CHINA 3.35%
COAL 0.77%
1,606,000 Yanzhou Coal Mining Company Limited .... $ 524,647 $ 586,881
------------- -------------
ENERGY SOURCES 2.58%
29,999 China Petroleum and Chemical
Corporation ADR ...................... 570,837 596,680
22,100 CNOOC Limited ADR ...................... 415,171 579,462
34,156 PetroChina Company Limited ADR ......... 700,680 794,810
------------- -------------
1,686,688 1,970,952
------------- -------------
TOTAL CHINA ............................ 2,211,335 2,557,833
------------- -------------
HONG KONG 24.13%
APPAREL/SHOES MANUFACTURING 0.63%
234,600 Yue Yuen Industrial Holdings Limited ... 247,496 481,290
------------- -------------
APPLIANCE & HOUSEHOLD DURABLES 0.39%
513,000 VTech Holdings Limited ................. 426,952 295,998
------------- -------------
AUTOMOBILES 0.41%
955,000 Denway Motors Limited .................. 335,923 315,312
------------- -------------
BANKING 3.17%
82,400 Dah Sing Financial Group ............... 386,373 376,129
149,500 Hang Seng Bank Limited ................. 1,444,226 1,480,809
51,700 HSBC Holdings PLC ...................... 589,185 565,125
------------- -------------
2,419,784 2,422,063
------------- -------------
COMPUTERS 0.53%
1,552,000 Digital China Holdings Limited ......... 551,850 407,948
------------- -------------
CONSUMER GOODS & SERVICES 0.46%
311,000 Li & Fung Limited ...................... 201,647 348,922
------------- -------------
ELECTRONIC COMPONENTS & INSTRUMENTS 1.32%
579,000 Johnson Electric Holdings Limited ...... 550,717 623,616
1,632,000 Ngai Lik Industrial Holding Limited .... 415,167 380,847
------------- -------------
965,884 1,004,463
------------- -------------
FINANCIAL SERVICES 0.92%
602,000 Hong Kong Exchanges & Clearing Limited . 853,627 702,421
------------- -------------
3
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
HONG KONG (CONTINUED)
MULTI - INDUSTRY 3.61%
495,900 Hutchison Whampoa Limited .............. $ 2,578,228 $ 2,759,582
------------- -------------
REAL ESTATE 5.01%
198,700 Cheung Kong Holdings Limited ........... 1,609,098 1,098,081
556,045 China Vanke Company Limited ............ 604,555 562,531
264,000 Hang Lung Properties Limited ........... 251,913 228,490
696,000 Hopewell Holdings Limited .............. 500,622 602,383
284,300 Sun Hung Kai Properties Limited ........ 2,017,376 1,334,189
------------- -------------
4,983,564 3,825,674
------------- -------------
RETAIL FOOD CHAINS 0.57%
706,000 Cafe De Coral Holdings Limited ......... 546,620 439,042
------------- -------------
RETAILING 0.71%
277,000 Esprit Holdings Limited ................ 364,442 543,414
------------- -------------
TELECOMMUNICATIONS 4.52%
522,000 Asia Satellite Telecommunications
Holdings Limited ..................... 1,581,036 722,859
1,109,500 China Mobile (Hong Kong) Limited ....... 3,734,361 2,226,389
2,634,000 China Telecom Corporation Limited+ ..... 499,832 503,224
------------- -------------
5,815,229 3,452,472
------------- -------------
TRANSPORTATION 0.58%
738,000 Travelsky Technology Limited ........... 492,210 442,382
------------- -------------
UTILITIES - ELECTRIC & GAS 1.30%
242,280 CLP Holdings Limited ................... 1,028,059 990,986
------------- -------------
TOTAL HONG KONG ........................ 21,811,515 18,431,969
------------- -------------
INDIA 6.61%
AUTOMOBILES 0.36%
26,893 Bajaj Auto Limited ..................... 269,521 274,355
------------- -------------
4
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
INDIA (CONTINUED)
BANKING 1.87%
173,000 Canara Bank Limited+ ................... $ 313,354 $ 323,930
93,000 Corporation Bank ....................... 257,493 279,913
139,680 State Bank of India .................... 568,229 821,795
------------- -------------
1,139,076 1,425,638
------------- -------------
BUSINESS & PUBLIC SERVICE 0.01%
103,749 Vans Information Limited+ .............. 237,956 4,930
------------- -------------
ENERGY SOURCES 1.91%
85,700 Hindustan Petroleum Corporation Limited 200,277 504,570
163,883 Reliance Industries Limited ............ 499,328 951,556
------------- -------------
699,605 1,456,126
------------- -------------
HEALTH & PERSONAL CARE 0.57%
97,316 Godrej Consumer Products Limited ....... 212,151 209,657
74,270 Hindustan Lever Limited ................ 384,499 226,442
------------- -------------
596,650 436,099
------------- -------------
PHARMACEUTICALS 1.16%
12,300 Dr. Reddy's Laboratories Limited ADR ... 261,203 232,470
46,089 Ranbaxy Laboratories Limited ........... 354,000 657,093
------------- -------------
615,203 889,563
------------- -------------
TECHNOLOGY 0.73%
9,503 Infosys Technologies Limited ........... 932,707 560,134
------------- -------------
TOTAL INDIA ............................ 4,490,718 5,046,845
------------- -------------
INDONESIA 1.25%
BANKING 0.57%
15,965,000 PT Bank Pan Indonesia+ ................. 400,831 432,556
------------- -------------
BEVERAGES & TOBACCO 0.41%
763,000 PT Hanjaya Mandala Sampoerna ........... 357,991 314,490
------------- -------------
TELECOMMUNICATIONS 0.27%
22,500 PT Telekomunikasi Indonesia ADR ........ 145,542 208,800
------------- -------------
TOTAL INDONESIA ........................ 904,364 955,846
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5
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
KOREA 29.23%
APPLIANCE & HOUSEHOLD DURABLES 10.06%
30,610 Samsung Electronics Company Limited .... $ 5,323,222 $ 7,683,992
------------- -------------
AUTOMOBILES 1.08%
35,000 Hyundai Motor Company Limited .......... 662,130 826,749
------------- -------------
BANKING 3.04%
68,151 Kookmin Bank ........................... 1,310,882 1,912,715
41,200 Shinhan Financial Group Company Limited 391,054 406,914
------------- -------------
1,701,936 2,319,629
------------- -------------
BEVERAGES & TOBACCO 0.51%
17,860 Kook Soon Dang Brewery Company Limited . 538,338 389,539
------------- -------------
CHEMICALS 0.97%
22,190 LG Chemical Limited .................... 718,748 736,014
------------- -------------
COMPUTERS 0.78%
9,567 Samsung SDI Company Limited ............ 631,508 598,430
------------- -------------
CONSTRUCTION & HOUSING 1.52%
5,870 Kumgang Korea Chemical Company Limited . 427,339 500,037
45,650 LG Engineering & Construction Corporation 465,539 661,267
------------- -------------
892,878 1,161,304
------------- -------------
EDUCATION 0.52%
122,900 Woongjin.com Company Limited ........... 601,967 398,540
------------- -------------
FOOD & HOUSEHOLD PRODUCTS 0.99%
22,110 CJ Corporation ......................... 1,083,343 755,197
------------- -------------
GAMBLING 0.56%
4,670 Kangwon Land Incorporated .............. 713,582 426,642
------------- -------------
INSURANCE 1.03%
15,890 Samsung Fire & Marine Insurance
Company Limited ...................... 834,384 784,691
------------- -------------
6
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
KOREA (CONTINUED)
METALS - STEEL 2.53%
13,360 POSCO .................................. $ 1,270,436 $ 1,127,078
39,050 POSCO ADR .............................. 1,195,125 804,821
------------- -------------
2,465,561 1,931,899
------------- -------------
TELECOMMUNICATIONS 3.34%
24,680 KT Corporation ......................... 1,486,459 1,013,606
11,070 SK Telecom Company Limited ............. 1,768,214 1,539,778
------------- -------------
3,254,673 2,553,384
------------- -------------
TRANSPORTATION - AIR 0.00%
5 Korean Air Company Limited ............. 48 48
------------- -------------
UTILITIES - ELECTRIC & GAS 2.30%
104,410 Korea Electric Power Corporation ....... 2,843,053 1,757,353
------------- -------------
TOTAL KOREA ............................ 22,265,371 22,323,411
------------- -------------
MALAYSIA 5.26%
AGRICULTURE 0.38%
220,000 IOI Corporation ........................ 288,410 292,369
------------- -------------
BANKING 1.42%
487,000 Hong Leong Bank ........................ 707,875 525,447
266,950 Malayan Banking ........................ 543,893 554,975
------------- -------------
1,251,768 1,080,422
------------- -------------
CONSTRUCTION & HOUSING 0.37%
205,000 Gamuda ................................. 281,807 280,526
------------- -------------
LEISURE & TOURISM 1.29%
153,200 Genting ................................ 506,127 483,789
228,500 Resorts World .......................... 476,191 502,099
------------- -------------
982,318 985,888
------------- -------------
MULTI - INDUSTRY 1.06%
326,000 Berjaya Sports Toto .................... 598,207 269,379
220,000 Tanjong PLC ............................ 569,715 541,316
------------- -------------
1,167,922 810,695
------------- -------------
7
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
MALAYSIA (CONTINUED)
TELECOMMUNICATIONS 0.74%
410,000 Maxis Communications ................... $ 566,006 $ 566,447
------------- -------------
TOTAL MALAYSIA ......................... 4,538,231 4,016,347
------------- -------------
PHILIPPINES 0.00%
MEDIA 0.00%
1,440 ABS-CBN Broadcasting Corporation+ ...... 740 329
------------- -------------
TOTAL PHILIPPINES ...................... 740 329
------------- -------------
SINGAPORE 10.12%
BANKING 4.30%
192,100 DBS Group Holdings Limited ............. 1,293,555 941,248
191,000 Oversea-Chinese Banking Corporation
Limited .............................. 1,053,453 1,016,535
226,456 United Overseas Bank Limited ........... 1,317,828 1,326,400
------------- -------------
3,664,836 3,284,183
------------- -------------
BROADCASTING & PUBLISHING 0.97%
79,500 Singapore Press Holdings Limited ....... 921,595 738,769
------------- -------------
ELECTRONIC COMPONENTS & INSTRUMENTS 0.86%
78,600 Venture Corporation Limited ............ 545,788 655,151
------------- -------------
FOOD & HOUSEHOLD PRODUCTS 1.16%
1,149,000 People's Food Holdings Limited ......... 511,447 569,456
476,000 Want Want Holdings Limited ............. 294,071 314,160
------------- -------------
805,518 883,616
------------- -------------
MACHINERY & ENGINEERING 0.49%
419,000 Singapore Technologies Engineering
Limited .............................. 450,019 377,565
------------- -------------
REAL ESTATE 0.98%
193,600 City Developments Limited .............. 556,725 368,535
614,000 Keppel Land Limited .................... 544,495 376,923
------------- -------------
1,101,220 745,458
------------- -------------
TELECOMMUNICATIONS 0.80%
753,000 Singapore Telecommunications Limited ... 785,863 614,922
------------- -------------
8
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (continued)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
SINGAPORE (CONTINUED)
TRANSPORTATION - AIR 0.56%
81,000 Singapore Airlines Limited ............. $ 514,277 $ 431,096
------------- -------------
TOTAL SINGAPORE 8,789,116 7,730,760
------------- -------------
TAIWAN 15.32%
BANKING 2.49%
307,000 Chinatrust Financial Holding Company
Limited+ ............................. 255,062 239,541
365,926 Fubon Financial Holding Company Limited 275,532 249,829
1,466,569 SinoPac Holdings+ ...................... 644,208 456,462
2,115,045 Taishin Financial Holdings Company
Limited+ ............................. 716,980 958,627
------------- -------------
1,891,782 1,904,459
------------- -------------
CHEMICALS 0.46%
365,500 Formosa Chemicals & Fibre Corporation .. 332,785 352,289
------------- -------------
DATA PROCESSING AND REPRODUCTION 0.99%
701,380 Compal Electronics Incorporated ........ 645,652 756,509
------------- -------------
ELECTRICAL & ELECTRONICS 6.63%
395,000 Delta Electronics Incorporated ......... 509,220 436,245
453,798 Hon Hai Precision Industry Company
Limited .............................. 1,916,126 1,418,932
2,339,906 Taiwan Semiconductor Manufacturing
Company Limited+ ..................... 5,678,826 3,208,477
------------- -------------
8,104,172 5,063,654
------------- -------------
ELECTRONIC COMPONENTS & INSTRUMENTS 2.79%
147,116 Ambit Microsystems Corporation ......... 535,844 419,909
335,611 Asustek Computer Incorporated .......... 1,286,009 654,663
1,152,618 Elan Microelectronics Corporation ...... 1,134,111 734,025
564,824 United Microelectronics Corporation+ ... 510,795 324,053
------------- -------------
3,466,759 2,132,650
------------- -------------
METALS - STEEL 0.73%
1,002,244 China Steel Corporation ................ 559,492 560,636
------------- -------------
TELECOMMUNICATIONS EQUIPMENT 0.60%
228,000 Gemtek Technology Corporation .......... 520,675 454,561
------------- -------------
9
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
COMMON STOCKS (concluded)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
TAIWAN (CONTINUED)
TRANSPORTATION - AIR 0.63%
1,559,536 EVA Airways Corporation+ ............... $ 556,293 $ 478,687
------------- -------------
TOTAL TAIWAN ........................... 16,077,610 11,703,445
------------- -------------
THAILAND 4.03%
BUILDING MATERIALS & COMPONENTS 0.76%
197,720 Siam Cement PLC ........................ 401,656 585,734
------------- -------------
CHEMICALS 0.67%
439,500 National Petrochemical PLC ............. 463,707 512,596
------------- -------------
FOOD & HOUSEHOLD PRODUCTS 0.01%
124,940 Charoen Pokphand Foods PLC
Warrants - expiration date 07/21/05+ . 0 5,887
------------- -------------
MEDIA 1.27%
55,700 BEC World PLC .......................... 278,130 267,651
31,000 BEC World PLC - Foreign ................ 143,784 148,962
1,518,900 United Broadcasting Corporation PLC+ ... 461,933 552,714
------------- -------------
883,847 969,327
------------- -------------
REAL ESTATE 0.58%
2,470,000 Land and Houses PLC .................... 458,620 443,643
------------- -------------
TELECOMMUNICATIONS 0.74%
537,000 Advanced Information Service PLC ....... 489,329 563,681
------------- -------------
TOTAL THAILAND ......................... 2,697,159 3,080,868
------------- -------------
TOTAL COMMON STOCKS .................... $ 83,786,159 $ 75,847,653
------------- -------------
10
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONTINUED) (UNAUDITED)
PREFERRED STOCK (0.46% of holdings)
NUMBER PERCENT OF
OF SHARES SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
THAILAND 0.46%
BANKING 0.46%
444,205 Siam Commercial Bank PLC - 5.25%
Preferred+ ........................... $ 151,803 $ 352,297
------------- -------------
TOTAL THAILAND ......................... 151,803 352,297
------------- -------------
TOTAL PREFERRED STOCK .................. $ 151,803 $ 352,297
------------- -------------
11
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
SCHEDULE OF INVESTMENTS (CONCLUDED) (UNAUDITED)
CONVERTIBLE BONDS (0.24% of holdings)
PRINCIPAL PERCENT OF
AMOUNT SECURITY HOLDINGS COST VALUE
- --------------------------------------------------------------------------------------------------------
MALAYSIA 0.24%
MULTI - INDUSTRY 0.24%
247,100 Berjaya Sports Toto ICULS 8%, 08/04/12 . $ 65,028 $ 184,675
------------- -------------
TOTAL MALAYSIA ......................... 65,028 184,675
------------- -------------
TOTAL CONVERTIBLE BONDS ................ 65,028 184,675
------------- -------------
TOTAL INVESTMENTS++ .................... 100.0% $ 84,002,990 $ 76,384,625
============= =============
FOOTNOTES AND ABBREVIATIONS
ADR - American Depository Receipts
ICULS - Irredeemable Convertible Unsecured Loan Stock
+ Non-Income producing security.
++ Aggregate cost for Federal Income Tax purposes is $84,760,077.
The aggregate gross unrealized appreciation (depreciation)
for all securities is as follows:
Excess of value over tax cost $ 7,377,271
Excess of tax cost over value (15,752,723)
------------
$ (8,375,452)
============
See accompanying notes to financial statements.
12
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
ASSETS
Investments, at value (Cost $84,002,990) ................................ $ 76,384,625
Cash (including $478,771 of foreign currency holdings with a cost
of $478,976) ......................................................... 932,559
Receivables:
Securities sold ...................................................... 292,047
Dividends ............................................................ 213,504
Interest (net of withholding tax of $183) ............................ 1,439
Prepaid expenses ........................................................ 54,052
-------------
TOTAL ASSETS .......................................... 77,878,226
-------------
LIABILITIES
Payable for securities purchased ........................................ 379,279
Due to Investment Manager ............................................... 69,207
Due to Administrator .................................................... 13,843
Accrued expenses ........................................................ 259,079
Deferred foreign withholding taxes payable .............................. 72,024
-------------
TOTAL LIABILITIES ..................................... 793,432
-------------
NET ASSETS ............................................ $ 77,084,794
=============
NET ASSET VALUE PER SHARE
($77,084,794/10,630,451 ISSUED AND OUTSTANDING) ....... $ 7.25
=============
NET ASSETS CONSIST OF:
Capital stock, $0.001 par value; 20,514,984 shares issued
(100,000,000 shares authorized) ...................................... $ 20,515
Paid-in capital ......................................................... 285,335,820
Cost of 9,884,533 shares repurchased .................................... (80,881,084)
Accumulated net investment income ....................................... 235,812
Accumulated net realized loss on investments ............................ (119,935,494)
Net unrealized depreciation in value of investments and on translation of
other assets and liabilities denominated in foreign currencies
(net of deferred foreign withholding taxes of $72,024) ............... (7,690,775)
-------------
$ 77,084,794
=============
See accompanying notes to financial statements.
13
THE ASIA TIGERS FUND, INC.
FOR THE SIX
STATEMENT OF OPERATIONS MONTHS ENDED
APRIL 30, 2003
(UNAUDITED)
INVESTMENT INCOME
Dividends (Net of taxes withheld of $114,532) .................................. $ 1,211,314
-----------
TOTAL INVESTMENT INCOME ...................................... 1,211,314
-----------
EXPENSES
Management fees ............................................... $471,793
Legal fees .................................................... 160,819
Administration fees ........................................... 94,359
Custodian fees and transfer agent fees ........................ 91,202
Audit and tax fees ............................................ 50,300
Insurance ..................................................... 29,005
Printing ...................................................... 20,838
NYSE fees ..................................................... 15,911
Directors' fees ............................................... 15,407
ICI fees ...................................................... 2,516
Interest expense .............................................. 1,357
Miscellaneous ................................................. 21,995
--------
TOTAL EXPENSES ............................................... 975,502
-----------
NET INVESTMENT INCOME ........................................ 235,812
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
FOREIGN CURRENCY HOLDINGS AND TRANSLATION OF OTHER ASSETS
AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES:
Net realized loss from:
Security transactions (net of capital gains tax of $5,899) .................. (6,733,956)
Foreign currency related transactions ....................................... (65,911)
-----------
(6,799,867)
Net change in unrealized appreciation in value of investments, foreign currency
holdings and translation of other assets and liabilities denominated in
foreign currencies (net of change in deferred foreign withholding taxes of
$25,969) .................................................................... 1,134,070
-----------
Net realized and unrealized loss on investments, foreign currency holdings and
translation of other assets and liabilities denominated in foreign
currencies .................................................................. (5,665,797)
-----------
Net decrease in net assets resulting from operations ........................... $(5,429,985)
===========
See accompanying notes to financial statements.
14
THE ASIA TIGERS FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX
MONTHS ENDED FOR THE YEAR
APRIL 30, 2003 ENDED
(UNAUDITED) OCTOBER 31, 2002
- ---------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS
Net investment income .............................................. $ 235,812 $ 88,201
Net realized loss on investments and foreign currency
related transactions ............................................ (6,799,867) (1,352,717)
Net change in unrealized appreciation in value of investments,
foreign currency holdings and translation of other assets and
liabilities denominated in foreign currencies ................... 1,134,070 21,336,172
------------ ------------
Net increase (decrease) in net assets resulting from operations .... (5,429,985) 20,071,656
------------ ------------
CAPITAL SHARE TRANSACTIONS
Shares repurchased under Tender Offer (4,860,746 shares)
in October 2002, including expenses of $8,108 and $159,344,
respectively .................................................... (8,108) (42,447,837)
Shares repurchased under Repurchase Offer (2,493,563 shares and
1,458,224 shares, respectively) (net of repurchase fees of
$366,160 and $222,817, respectively) including expenses of
$91,291 and $137,114, respectively .............................. (17,915,020) (11,055,126)
Shares repurchased under Share Repurchase Plan (32,800 shares) ..... -- (243,041)
------------ ------------
Net decrease in net assets resulting from capital share transactions (17,923,128) (53,746,004)
------------ ------------
Total decrease in net assets ....................................... (23,353,113) (33,674,348)
NET ASSETS
Beginning of period ................................................ 100,437,907 134,112,255
------------ ------------
End of period (Including Net Investment Income of $235,812 at
April 30, 2003) ................................................. $ 77,084,794 $100,437,907
============ ============
See accompanying notes to financial statements.
15
THE ASIA TIGERS FUND, INC.
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
FOR THE SIX FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
MONTHS ENDED ENDED ENDED ENDED ENDED ENDED
APRIL 30, 2003 OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
(UNAUDITED) 2002 2001 2000 1999 1998
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ......... $7.65 $6.89 $9.55 $11.02 $ 7.55 $9.68
----- ----- ----- ------ ------ -----
Net investment income ........................ 0.02 0.01 3 0.03 0.32 0.04 0.08
Net realized and unrealized gains
(losses) on investments, foreign
currency holdings, and translation
of other assets and liabilities
denominated in foreign currencies ......... (0.44) 2 0.60 2 (2.42) 2 (1.86) 2 3.44 2 (2.21)
----- ----- ----- ------ ------ -----
Net increase (decrease) from
investment operations ..................... (0.42) 0.61 (2.39) (1.54) 3.48 (2.13)
----- ----- ----- ------ ------ -----
Less Distributions:
Dividends from net investment
income .................................. -- -- (0.29) (0.07) (0.01) --
----- ----- ----- ------ ------ -----
Total dividends and distributions ............ -- -- (0.29) (0.07) (0.01) --
----- ----- ----- ------ ------ -----
Capital share transactions
Anti-dilutive effect of Tender Offer ...... -- 0.14 -- -- -- --
Anti-dilutive effect of Repurchase Offer .. 0.02 0.01 -- -- -- --
Anti-dilutive effect of
Share Repurchase Program ................ -- -- 4 0.02 0.14 -- --
----- ----- ----- ------ ------ -----
Total capital share transactions ............. 0.02 0.15 0.02 0.14 -- --
----- ----- ----- ------ ------ -----
Net asset value, end of period ............... $7.25 $7.65 $6.89 $ 9.55 $11.02 $7.55
===== ===== ===== ====== ====== =====
Per share market value, end of period ........ $6.21 $6.77 $5.79 $ 7.13 $ 8.63 $6.13
TOTAL INVESTMENT RETURN BASED
ON MARKET VALUE 1 ......................... (8.27)% 16.93% (15.62)% (16.82)% 41.03% (22.83)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000s) .......... $77,085 $100,438 $134,112 $188,204 $226,077 $154,946
Ratios of expenses to average net assets ..... 2.07% 5 1.78% 1.58% 1.69% 1.70% 1.74%
Ratios of net investment income to
average net assets ........................ 0.50% 5 0.06% 0.31% 2.50% 0.43% 0.99%
Portfolio turnover ........................... 14.34% 41.32% 28.98% 31.42% 92.44% 93.47%
See page 17 for footnotes.
16
THE ASIA TIGERS FUND, INC.
FINANCIAL HIGHLIGHTS (CONCLUDED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
1 Total investment return is calculated assuming a purchase of common stock at
the current market price on the first day and a sale at the current market
price on the last day of each period reported. Dividends and distributions,
if any, are assumed, for purposes of this calculation, to be reinvested at
prices obtained under the Fund's dividend reinvestment plan. Total investment
return does not reflect brokerage commissions or sales charges.
2 Net of foreign withholding taxes of less than $0.01, less than $0.01, $0.06,
$0.03 and $0.06 per share for the six months ended April 30, 2003 and for the
years ended October 31, 2002, October 31, 2001, October 31, 2000 and October
31,1999, respectively.
3 Based on average shares outstanding throughout the period.
4 Less than $0.01 per share.
5 Annualized.
See accompanying notes to financial statements.
17
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE A: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Asia Tigers Fund, Inc. (the "Fund") was incorporated in Maryland on
September 23, 1993 and commenced operations on November 29, 1993. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
closed-end, non-diversified management investment company.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates.
SIGNIFICANT ACCOUNTING POLICIES ARE AS FOLLOWS:
PORTFOLIO VALUATION. Investments are stated at value in the accompanying
financial statements. In valuing the Fund's assets, all securities for which
market quotations are readily available are generally valued:
(i) at the last sale price prior to the time of determination if there
was a sale on the date of determination,
(ii) at the mean between the last current bid and asked prices if there
was no sales price on such date and bid and asked quotations are
available, and
(iii) at the bid price if there was no sales price on such date and only
bid quotations are available.
Securities for which sales prices and bid and asked quotations are not available
on the date of determination may be valued at the most recently available prices
or quotations under policies adopted by the Board of Directors. Investments in
short-term debt securities having a maturity of 60 days or less are valued at
amortized cost which approximates market value. All other securities and assets
are carried at fair value as determined in good faith by, or under the direction
of, the Board of Directors.
The net asset value per share of the Fund is calculated weekly and at the end of
each month.
OPTIONS. The Fund may purchase or write put or call options on securities for
the purpose of enhancing returns or hedging against changes in the market value
of the underlying securities or foreign currencies. The Fund receives or pays a
premium and the option is subsequently marked to market to reflect the current
value of the option. The Fund will realize a gain or loss upon the expiration or
closing of the option transaction. The options for which market quotations are
readily available are generally valued:
(i) at the closing price,
(ii) at the mean between the last current bid and asked prices if there
was no closing price on such date and bid and asked quotations are
available, and
(iii) at the asked price if there was no closing price on such date and
only asked quotations are available for written options or at the
bid price for purchased options.
18
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
Gains and losses on written options are reported separately in the Statement of
Operations. Written options are reported as a liability on the Statement of
Assets & Liabilities. Purchased options are included in the Fund's Schedule of
Investments.
The risk associated with purchasing put and call options is limited to the
premium paid. The risk associated with written options is that the change in
value of the option contract may not correspond to the change in value of the
hedged instrument. Such risks may exceed amounts reflected on the Statement of
Assets and Liabilities.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date or when known. The collectibility of
income receivable from foreign securities is evaluated periodically, and any
resulting allowances for uncollectible amounts are reflected currently in the
determination of investment income.
TAX STATUS. No provision is made for U.S. Federal 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 which will be
sufficient to relieve it from all or substantially all Federal income and excise
taxes.
Income and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP.
At October 31, 2002, the components of net assets (excluding paid in capital) on
a tax basis were as follows:
Book basis capital loss carryover ................... $(113,135,627)
Plus/Less: Cumulative Timing Differences - Wash Sales 564,847
-------------
Tax Basis Accumulated capital loss .................. $(112,570,780)
-------------
Book unrealized foreign exchange loss ............... (382)
-------------
Book unrealized appreciation on foreign currencies .. 7,656
-------------
Book basis unrealized depreciation .................. (8,786,064)
Plus/Less: Cumulative Timing Differences - Wash Sales (564,847)
-------------
Tax Basis unrealized depreciation ................... (9,350,911)
Deferred foreign withholding tax .................... (46,055)
-------------
Net assets (excluding paid in capital) .............. $(121,960,472)
=============
19
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
The differences between book and tax basis unrealized appreciation is primarily
attributable to wash sales and deferred foreign withholding tax.
Net Asset Value ............................................... $ 100,437,907
Paid in Capital ............................................... (222,398,379)
-------------
Net assets (excluding paid in capital) ........................ $(121,960,472)
=============
At October 31, 2002, the Fund had a net capital loss carryover of $112,570,780,
which is available to offset future net realized gains on securities
transactions to the extent provided for in the Internal Revenue Code. Of the
aggregate capital losses, $7,999,610 will expire in the year 2003, $1,846,888
will expire in the year 2004, $90,932,813 will expire in the year 2006,
$8,437,899 will expire in the year 2009 and $3,353,570 will expire in 2010. To
the extent that capital gains are so offset, such gains will not be distributed.
Dividend and interest income from non-U.S. sources received by the Fund are
generally subject to non-U.S. withholding taxes. In addition, the Fund may be
subject to capital gains tax in certain countries in which it invests and
records the capital gains tax when it is paid to the applicable governmental
authority. Such withholding taxes may be reduced or eliminated under the terms
of applicable U.S. income tax treaties with some of these countries. For
dividend and income withholding taxes, the Fund accrues such taxes when the
related income is earned.
FOREIGN CURRENCY TRANSLATION. 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) value of investment securities, assets and liabilities at the current
rates of exchange on the valuation date; 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 generally isolate the effect of fluctuations in foreign
currency rates from the effect of fluctuations in the market prices of equity
securities. The Fund reports certain realized gains and losses on foreign
currency related transactions as components of realized gains and losses for
financial reporting purposes, whereas such gains and losses are included in or
are a reduction of ordinary income for Federal income tax purposes.
Securities denominated in currencies other than U.S. dollars are subject to
changes in value due to fluctuations in foreign exchange. Foreign security and
currency transactions involve certain considerations and risks not typically
associated with those of domestic origin as a result of, among other factors,
the level of governmental supervision and regulation of foreign securities
markets and the possibilities of
20
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
political or economic instability, the fact that foreign securities markets may
be smaller and less developed, and the fact that securities, tax and corporate
laws may have only recently developed or are in developing stages, and laws may
not exist to cover all contingencies or to protect investors adequately.
DISTRIBUTION OF INCOME AND GAINS. The Fund intends to distribute annually to
shareholders substantially all of its net investment income, including foreign
currency gains, and to distribute annually any net realized capital gains in
excess of net realized capital losses (including any capital loss carryovers).
An additional distribution may be made to the extent necessary to avoid payment
of a 4% federal excise tax.
Distributions to shareholders are recorded on the ex-dividend date. The amount
of dividends and distributions from net investment income and net realized
capital gains are determined in accordance with federal income tax regulations,
which may differ from accounting principles generally accepted in the United
States of America. These book/tax differences are either considered temporary or
permanent in nature. To the extent these differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions which exceed net investment income and net realized
capital gains for financial reporting purposes but not for tax purposes, are
reported as dividends in excess of net investment income or distributions in
excess of net realized capital gains. To the extent they exceed net investment
income and net realized capital gains for tax purposes, they are reported as
distributions of paid-in-capital.
During the year ended October 31, 2002, the Fund reclassified $310,094 from
accumulated net realized loss on investments to undistributed net investment
loss as a result of permanent book and tax differences primarily relating to net
realized foreign currency losses and capital gains tax and reclassed $221,893
from undistributed net investment loss to paid in capital as a result of net
investment losses. Net investment income and net assets were not affected by the
reclassification.
NOTE B: MANAGEMENT, INVESTMENT ADVISORY, AND ADMINISTRATIVE SERVICES
Advantage Advisers, Inc. ("Advantage") serves as the Fund's Investment Manager
under the terms of a management agreement (the "Management Agreement"). Pursuant
to the Management Agreement, the Investment Manager manages the Fund's
investment portfolio. For its services, the Investment Manager receives monthly
fees at an annual rate of 1.00% of the Fund's average weekly net assets. For the
six months ended April 30, 2003, these fees amounted to $471,793.
21
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
CIBC World Markets Corp., an indirect wholly-owned subsidiary of Canadian
Imperial Bank of Commerce, served as the Fund's administrator (the
"Administrator") during the period covered by this report. The Administrator
provides certain administrative services to the Fund. For its services, the
Administrator receives a monthly fee at an annual rate of 0.20% of the value of
the Fund's average weekly net assets. For the six months ended April 30, 2003,
these fees amounted to $94,359. At April 30, 2003, CIBC WM owned 3,567 shares of
the Fund's common stock.
The Fund pays each of its directors who is not a director, officer or employee
of the Investment Manager, the Administrator or any affiliate thereof an annual
fee of $5,000 plus up to $700 for each Board of Directors meeting attended. In
addition, the Fund reimburses the directors for travel and out-of-pocket
expenses incurred in connection with Board of Directors meetings. See Note H.
NOTE C: WRITTEN CALL OPTION ACTIVITY
Written call option activity for the year ended October 31, 2002 aggregated the
following:
DR. REDDY'S LABORATORIES LIMITED OPTIONS
----------------------------------------
# OF AMOUNT
OPTIONS OF PREMIUMS
------- -----------
Options outstanding at October 31, 2001 -- $ --
Options written 168 11,376
Options expired (168) (11,376)
Options exercised -- --
---- --------
Options outstanding at October 31, 2002 -- $ --
==== ========
NOTE D: PORTFOLIO ACTIVITY
Purchases and sales of securities other than short-term obligations aggregated
$12,977,369 and $29,715,354, respectively, for the six months ended April 30,
2003.
NOTE E: CAPITAL STOCK
During the year ended October 31, 2002, the Fund purchased 32,800 shares of
capital stock on the open market at a total cost of $243,041. The weighted
average discount of these purchases, comparing the purchase price to the net
asset value at the time of purchase, was 12.01%. These shares were purchased
pursuant to the Fund's Stock Repurchase Plan previously approved by the Fund's
Board of Directors authorizing the Fund to purchase up to 2,000,000 shares of
its capital stock.
22
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
At a meeting of the Board of Directors held on November 7, 2001, the Board of
Directors approved a tender offer. Pursuant to the tender offer, the Fund
offered to purchase up to 25% of the Fund's outstanding shares of common stock
for cash at a price equal to 95% of the Fund's net asset value per share as of
the closing date. The tender offer commenced on February 15, 2002 and expired on
March 15, 2002. In connection with the tender offer, the Fund purchased
4,860,746 shares of capital stock at a total cost of $42,447,837, including
expenses of $167,452.
In January 2002, the Board of Directors approved, subject to stockholder
approval, a fundamental policy whereby the Fund would adopt an "interval fund"
structure pursuant to Rule 23c-3 under the Investment Company Act of 1940.
Stockholders of the Fund subsequently approved the policy at the Special Meeting
of Stockholders held on April 26, 2002. As an interval fund, the Fund will make
quarterly repurchase offers at net asset value (less a 2% repurchase fee) to all
Fund stockholders. The percentage of outstanding shares that the Fund can
repurchase in each offer will be established by the Fund's Board of Directors
shortly before the commencement of each quarterly offer, and will be between 5%
and 25% of the Fund's then outstanding shares. See Note F below for details
regarding the quarterly repurchase offers.
NOTE F: QUARTERLY REPURCHASE OFFERS
During the year ended October 31, 2002, the Fund completed one quarterly
repurchase offer. On September 20, 2002, the Fund offered to repurchase up to
10% of its issued and outstanding shares of common stock. The repurchase offer
expired on October 11, 2002, and the shares were repurchased at the Net Asset
Value ("NAV") at the close of regular trading on the New York Stock Exchange on
October 25, 2002, less a repurchase fee of 2% of the NAV per share.
10,091,392.3292 shares were validly tendered and not withdrawn prior to the
expiration of the Fund's repurchase offer. The final pro-ration calculations
resulted in 19,567.5847 odd lot shares and 1,438,656 non-odd lot shares validly
tendered. Under final pro-ration, 14.28393% of the non-odd lot shares tendered
were accepted for payment. The shares accepted for tender (1,458,224 shares
representing 10%) received cash at a repurchase offer price of $7.4872, which
was equal to the Fund's net asset value of $7.64 as of October 25, 2002, less a
repurchase fee of $0.1528 per share, for a total cost to the Fund of
$11,055,126, net of the repurchase fee of $222,817, and including expenses of
$137,114.
During the six months ended April 30, 2003, the Fund completed two quarterly
repurchase offers. On December 20, 2002, the Fund offered to repurchase up to
10% of its issued and outstanding shares of common stock. The repurchase offer
expired on January 17, 2003, and the shares were repurchased at the NAV at the
close of regular trading on the New York Stock Exchange on January 31, 2003,
less a repurchase fee of 2% of the NAV per share. 8,616,672.8056 shares were
validly tendered and not withdrawn prior to the expiration of the Fund's
repurchase offer. The final pro-ration calculations
23
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (CONTINUED) (UNAUDITED)
resulted in 82,446.8942 odd lot shares and 1,229,955 non-odd lot shares validly
tendered. Under final pro-ration, 14.41204% of the non-odd lot shares tendered
were accepted for payment. The shares accepted for tender (1,312,402 shares
representing 10%) received cash at a repurchase offer price of $7.497, which is
equal to the Fund's net asset value per share of $7.65 as of January 31, 2003,
less a repurchase fee of $0.153 per share, for a total cost to the Fund of
$9,914,921, net of the repurchase fee of $200,797, and including expenses of
$75,843.
During the second repurchase offer on March 14, 2003, the Fund offered to
repurchase up to 10% of its issued and outstanding shares of common stock. The
repurchase offer expired on April 11, 2003, and the shares were repurchased at
the NAV at the close of regular trading on the New York Stock Exchange on April
25, 2003, less a repurchase fee of 2% of the NAV per share. 7,549,181.0853
shares were validly tendered and not withdrawn prior to the expiration of the
Fund's repurchase offer. The final pro-ration calculations resulted in
70,758.5097 odd lot shares and 7,478,423 non-odd lot shares validly tendered.
Under final pro-ration, 14.8481% of the non-odd lot shares tendered were
accepted for payment. The shares accepted for tender (1,181,161.50 shares
representing 10%) received cash at a repurchase offer price of $6.76, which was
equal to the Fund's net asset value of $6.90 as of April 25, 2003, less a
repurchase fee of $0.14 per share, for a total cost to the Fund of $8,000,099,
net of the repurchase fee of $165,363, and including expenses of $15,448.
NOTE G: OTHER
At April 30, 2003, substantially all of the Fund's assets were invested in Asian
securities. The Asian securities markets are substantially smaller, less
developed, less liquid, and more volatile than the major securities markets in
the United States. Consequently, acquisitions and dispositions of Asian
securities involve special risks and considerations not present with respect to
U.S. securities.
NOTE H: SUBSEQUENT EVENTS
On January 2, 2003, Fahnestock Viner Holdings Inc. ("Fahnestock"), its
subsidiary, Fahnestock & Co. Inc. ("Fahnestock & Co."), CIBC World Markets Corp.
("CIBC WM") and Canadian Imperial Bank of Commerce ("CIBC") entered into an
agreement pursuant to which Fahnestock & Co. (or an affiliated company) would,
subject to certain conditions, acquire the U.S. asset management business of
CIBC WM (the "Transaction"), including its ownership in, and control of,
Advantage Advisers, Inc., the investment manager (the "Investment Manager") to
the Fund. Consummation of the Transaction would result in a change of control of
the Investment Manager and, thus, as required by the Investment Company Act of
1940, as amended (the "1940 Act"), would result in automatic termination of the
existing management agreement between the Fund and the Investment Manager.
Consequently the Board of Directors of the Fund called a shareholder meeting on
February 28, 2003 (the "Meeting") to approve a new management agreement with the
Investment Manager. The new management agreement is substantially identical to
the existing agreement.
24
THE ASIA TIGERS FUND, INC.
APRIL 30, 2003
NOTES TO FINANCIAL STATEMENTS (CONCLUDED) (UNAUDITED)
At the Meeting, shareholders of the Fund voted to approve a new management
agreement between the Fund and the Investment Manager.
The Transaction was completed onJune 4, 2003 and the new Management Agreement
became effective on June 5, 2003. In addition, Fahnestock & Co. became the
Fund's administrator on June 4, 2003, replacing CIBC WM.
Your Fund shares and the fees charged to the Fund will not change as a result of
the Transaction. Fahnestock & Co. has advised the Board of Directors that it
expects the current senior management team of the Investment Manager to continue
following the Transaction. The Board has considered the potential impact of the
Transaction on other aspects of the Fund's operations. In this regard, the Board
believes that the operations of the Fund will be performed at the same level
following the Transaction.
25
THE ASIA TIGERS FUND, INC.
RESULTS OF ANNUAL MEETING OF STOCKHOLDERS
ANNUAL MEETING
The Fund held its Annual Meeting of Stockholders on February 28, 2003. At the
meeting, stockholders elected the nominee proposed for election to the Fund's
Board of Directors and approved a new management agreement between Advantage
Advisers, Inc. and the Fund. The following table provides information concerning
the matters voted on at the meeting:
I. ELECTION OF A DIRECTOR
NON-VOTING
NOMINEE VOTES FOR VOTES WITHHELD SHARES TOTAL VOTING SHARES
------- --------- -------------- ---------- -------------------
Jeswald W. Salacuse 7,792,579 197,942 5,133,493 13,124,014
At April 30, 2003, in addition to Jeswald W. Salacuse, the other directors of
the Fund were as follows:
Charles F. Barber*
Leslie H. Gelb
Luis F. Rubio
Howard M. Singer*
II. APPROVAL OF A NEW MANAGEMENT AGREEMENT BETWEEN ADVANTAGE ADVISERS, INC. AND
THE FUND DUE TO THE PROPOSED ACQUISITION OF ADVANTAGE ADVISERS, INC. BY
FAHNESTOCK & CO.
NON-VOTING
VOTES FOR VOTES AGAINST VOTES ABSTAINED SHARES TOTAL VOTING SHARES
--------- ------------- --------------- ---------- -------------------
7,692,234 262,859 35,428 5,133,493 13,124,014
* Resigned as Director of the Fund effective May 8, 2003. Bryan McKigney was
appointed Chairman, President and Director of the Fund as of May 8, 2003.
26
THE ASIA TIGERS FUND, INC.
DIVIDENDS AND DISTRIBUTIONS
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund intends to distribute annually to shareholders substantially all of its
net investment income, and to distribute any net realized capital gains at least
annually. Net investment income for this purpose is income other than net
realized long- and short-term capital gains net of expenses.
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
shareholders whose shares of Common Stock are registered in their own names will
be deemed to have elected to have all distributions automatically reinvested by
the Plan Agent in the Fund shares pursuant to the Plan, unless such shareholders
elect to receive distributions in cash. Shareholders who elect to receive
distributions in cash will receive all distributions in cash paid by check in
dollars mailed directly to the shareholder by PNC Bank, National Association, as
dividend paying agent. In the case of shareholders such as banks, brokers or
nominees that hold shares for others who are beneficial owners, the Plan Agent
will administer the Plan on the basis of the number of shares certified from
time to time by the shareholders as representing the total amount registered in
such shareholders' names and held for the account of beneficial owners that have
not elected to receive distributions in cash. Investors that own shares
registered in the name of a bank, broker or other nominee should consult with
such nominee as to participation in the Plan through such nominee, and may be
required to have their shares registered in their own names in order to
participate in the Plan.
The Plan Agent serves as agent for the shareholders in administering the Plan.
If the directors of the Fund declare an income dividend or a capital gains
distribution payable either in the Fund's Common Stock or in cash,
nonparticipants in the Plan will receive cash and participants in the Plan will
receive Common Stock, to be issued by the Fund or purchased by the Plan Agent in
the open market, as provided below. If the market price per share on the
valuation date equals or exceeds net asset value per share on that date, the
Fund will issue new shares to participants at net asset value; provided,
however, that if the net asset value is less than 95% of the market price on the
valuation date, then such shares will be issued at 95% of the market price. The
valuation date will be the dividend or distribution payment date or, if that
date is not a New York Stock Exchange trading day, the next preceding trading
day. If net asset value exceeds the market price of Fund shares at such time, or
if the Fund should declare an income dividend or capital gains distribution
payable only in cash, the Plan Agent will, as agent for the participants, buy
Fund shares in the open market, on the New York Stock Exchange or elsewhere, for
the participants' accounts on, or shortly after, the payment date. If, before
the Plan Agent has completed its purchases, the market price exceeds the net
asset value of a Fund share, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Fund's shares, resulting in the
acquisition of fewer shares than if the distribution had been paid in shares
issued by the Fund on the dividend payment date. Because of the foregoing
difficulty with respect to open-market purchases, the Plan provides that if the
Plan Agent is unable to invest the full
27
THE ASIA TIGERS FUND, INC.
DIVIDENDS AND DISTRIBUTIONS (CONTINUED)
dividend amount in open-market purchases during the purchase period or if the
market discount shifts to a market premium during the purchase period, the Plan
Agent will cease making open-market purchases and will receive the uninvested
portion of the dividend amount in newly issued shares at the close of business
on the last purchase date.
Participants have the option of making additional cash payments to the Plan
Agent, annually, in any amount from $100 to $3,000, for investment in the Fund's
Common Stock. The Plan Agent will use all such funds received from participants
to purchase Fund shares in the open market on or about February 15.
Any voluntary cash payment received more than 30 days prior to this date will be
returned by the Plan Agent, and interest will not be paid on any uninvested cash
payment. To avoid unnecessary cash accumulations, and also to allow ample time
for receipt and processing by the Plan Agent, it is suggested that participants
send in voluntary cash payments to be received by the Plan Agent approximately
ten days before an applicable purchase date specified above. A participant may
withdraw a voluntary cash payment by written notice, if the notice is received
by the Plan Agent not less than 48 hours before such payment is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in an account, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in the name of the
participant, and each shareholder's proxy will include those shares purchased
pursuant to the Plan.
There is no charge to participants for reinvesting dividends or capital gains
distributions or voluntary cash payments. The Plan Agent's fees for the
reinvestment of dividends and capital gains distributions and voluntary cash
payments will be paid by the Fund. There will be no brokerage charges with
respect to shares issued directly by the Fund as a result of dividends or
capital gains distributions payable either in stock or in cash. However, each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases in connection with the
reinvestment of dividends and capital gains distributions and voluntary cash
payments made by the participant. Brokerage charges for purchasing small amounts
of stock for individual accounts through the Plan are expected to be less than
the usual brokerage charges for such transactions, because the Plan Agent will
be purchasing stock for all participants in blocks and prorating the lower
commission thus attainable.
The receipt of dividends and distributions under the Plan will not relieve
participants of any income tax that may be payable on such dividends or
distributions.
28
THE ASIA TIGERS FUND, INC.
DIVIDENDS AND DISTRIBUTIONS (CONCLUDED)
Experience under the Plan may indicate that changes in the Plan are desirable.
Accordingly, the Fund and the Plan Agent reserve the right to terminate the Plan
as applied to any voluntary cash payments made and any dividend or distribution
paid subsequent to notice of the termination sent to members of the Plan at
least 30 days before the record date for such dividend or distribution. The Plan
also may be amended by the Fund or the Plan Agent, but (except when necessary or
appropriate to comply with applicable law, rules or policies of a regulatory
authority) only by at least 30 days' written notice to participants in the Plan.
All correspondence concerning the Plan should be directed to the Plan Agent at
301 Bellevue Parkway, Wilmington, Delaware, 19809.
29
PRIVACY POLICY OF
ADVANTAGE ADVISERS, INC.
THE ASIA TIGERS FUND, INC.
THE INDIA FUND, INC.
- --------------------------------------------------------------------------------
YOUR PRIVACY IS PROTECTED
An important part of our commitment to you is our respect for your right to
privacy. Protecting all the information we are either required to gather or
which accumulates in the course of doing business with you is a cornerstone of
our relationship with you. While the range of products and services we offer
continues to expand, and the technology we use continues to change, our
commitment to maintaining standards and procedures with respect to security
remains constant.
COLLECTION OF INFORMATION
The primary reason that we collect and maintain information is to more
effectively administer our customer relationship with you. It allows us to
identify, improve and develop products and services that we believe could be of
benefit. It also permits us to provide efficient, accurate and responsive
service, to help protect you from unauthorized use of your information and to
comply with regulatory and other legal requirements. These include those related
to institutional risk control and the resolution of disputes or inquiries.
Various sources are used to collect information about you, including (i)
information you provide to us at the time you establish a relationship, (ii)
information provided in applications, forms or instruction letters completed by
you, (iii) information about your transactions with us or our affiliated
companies, and/or (iv) information we receive through an outside source, such as
a bank or credit bureau. In order to maintain the integrity of client
information, we have procedures in place to update such information, as well as
to delete it when appropriate. We encourage you to communicate such changes
whenever necessary.
DISCLOSURE OF INFORMATION
We do not disclose any nonpublic, personal information (such as your name,
address or tax identification number) about our clients or former clients to
anyone, except as permitted or required by law. We maintain physical, electronic
and procedural safeguards to protect such information, and limit access to such
information to those employees who require it in order to provide products or
services to you.
The law permits us to share client information with companies that are
affiliated with us which provide financial, credit, insurance, trust, legal,
accounting and administrative services to us or our clients. This allows us to
enhance our relationship with you by providing a broader range of products to
better meet your needs and to protect the assets you may hold with us by
preserving the safety and soundness of our firm.
30
PRIVACY POLICY OF
ADVANTAGE ADVISERS, INC.
THE ASIA TIGERS FUND, INC.
THE INDIA FUND, INC.
- --------------------------------------------------------------------------------
Finally, we are also permitted to disclose nonpublic, personal information to
unaffiliated outside parties who assist us with processing, marketing or
servicing a financial product, transaction or service requested by you,
administering benefits or claims relating to such a transaction, product or
service, and/or providing confirmations, statements, valuations or other records
or information produced on our behalf.
It may be necessary, under anti-money laundering or other laws, to disclose
information about you in order to accept your subscription. Information about
you may also be released if you so direct, or if we or an affiliate are
compelled to do so by law, or in connection with any government or
self-regulatory organization request or investigation.
We are committed to upholding this Privacy Policy. We will notify you on an
annual basis of our policies and practices in this regard and at any time that
there is a material change that would require your consent.
May 2003
31
THE ASIA TIGERS FUND, INC.
INVESTMENT MANAGER:
Advantage Advisers, Inc., a subsidiary of
CIBC World Markets Corp.
ADMINISTRATOR:
CIBC World Markets Corp.
SUB-ADMINISTRATOR:
PFPC Inc.
TRANSFER AGENT:
PFPC Inc.
CUSTODIAN:
Deutsche Bank
Trust Company Americas
The Asia Tigers Fund, Inc.
Semiannual Report
April 30, 2003
ADVANTAGE ADVISERS, INC.
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer or officers and principal
financial officer or officers, or persons performing similar functions,
have concluded that the registrant's disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940
(17 CFR 270.30a-3(c))) are effective, based on their evaluation of
these controls and procedures as of the date within 90 days of the
filing date of the report that includes the disclosure required by this
paragraph.
(b) There were 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)(1) Not applicable.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 are attached hereto.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are 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) ASIA TIGERS FUND, INC.
-------------------------------------------------------------------
By (Signature and Title)* /S/ BRYAN MCKIGNEY
-----------------------------------------------------
Bryan McKigney, President
(principal executive officer)
Date June 19, 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/ BRYAN MCKIGNEY
-----------------------------------------------------
Bryan McKigney, President
(principal executive officer)
Date June 19, 2003
----------------------------------------------------------------------------
By (Signature and Title)* /S/ ALAN KAYE
-----------------------------------------------------
Alan Kaye, Treasurer
(principal financial officer)
Date June 19, 2003
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.