<Page>
-----------------------------
OMB APPROVAL
-----------------------------
OMB Number: 3235-0570
Expires: November 30, 2005
Estimated average burden
hours per response....... 5.0
-----------------------------
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 811-08388
---------------------------------------------
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
1221 AVENUE OF THE AMERICAS 22ND FLOOR NEW YORK, NY 10020
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
RONALD E. ROBISON
1221 AVENUE OF THE AMERICAS 34TH FLOOR NEW YORK, NY 10020
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-800-221-6726
----------------------------
Date of fiscal year end: 12/31
--------------------------
Date of reporting period: 6/30/03
-------------------------
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. Section 3507.
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS.
The Fund's semi-annual report transmitted to shareholders pursuant to Rule 30e-1
under the Investment Company Act of 1940 is as follows:
<Page>
SEMI-ANNUAL REPORT
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
JUNE 30, 2003
DIRECTORS
MICHAEL BOZIC RONALD E. ROBISON
CHARLES A. FIUMEFREDDO EXECUTIVE VICE PRESIDENT
EDWIN J. GARN AND PRINCIPAL EXECUTIVE
WAYNE E. HEDIEN OFFICER
JAMES F. HIGGINS
DR. MANUEL H. JOHNSON JOSEPH McALINDEN
JOSEPH J. KEARNS VICE PRESIDENT
MICHAEL NUGENT
PHILIP J. PURCELL BARRY FINK
FERGUS REID VICE PRESIDENT
OFFICERS STEFANIE V. CHANG
CHARLES A. FIUMEFREDDO VICE PRESIDENT
CHAIRMAN OF THE BOARD
JAMES W. GARRETT [MORGAN STANLEY LOGO]
MITCHELL M. MERIN TREASURER AND CHIEF
PRESIDENT FINANCIAL OFFICER
MICHAEL LEARY MORGAN STANLEY
ASSISTANT TREASURER ASIA-PACIFIC FUND, INC.
MARY E. MULLIN
SECRETARY
INVESTMENT ADVISER
MORGAN STANLEY INVESTMENT MANAGEMENT INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
ADMINISTRATOR
JPMORGAN INVESTOR SERVICES
73 TREMONT STREET
BOSTON, MASSACHUSETTS 02108
CUSTODIAN
JPMORGAN CHASE BANK
270 PARK AVENUE
NEW YORK, NEW YORK 10017
STOCKHOLDER SERVICING AGENT
AMERICAN STOCK TRANSFER & TRUST COMPANY
59 MAIDEN LANE
NEW YORK, NEW YORK 10030
(800) 278-4353
LEGAL COUNSEL
CLIFFORD CHANCE US LLP
200 PARK AVENUE
NEW YORK, NEW YORK 10166
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
200 CLARENDON STREET
BOSTON, MASSACHUSETTS 02116
FOR ADDITIONAL FUND INFORMATION,
INCLUDING THE FUND'S NET ASSET VALUE PER
SHARE AND INFORMATION REGARDING THE
INVESTMENTS COMPRISING THE FUND'S
PORTFOLIO, PLEASE CALL 1-800-221-6726 OR
VISIT OUR WEBSITE AT
www.morganstanley.com/im.
MORGAN STANLEY
INVESTMENT MANAGEMENT INC.
(C) 2003 MORGAN STANLEY INVESTMENT ADVISER
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
Overview
LETTER TO STOCKHOLDERS
PERFORMANCE
For the six months ended June 30, 2003, the Morgan Stanley Asia-Pacific Fund,
Inc. (the "Fund") had a total return of 10.11%, compared to 8.35% for the Morgan
Stanley Capital International (MSCI) 50/50 Japan Net and All Country
Asia-Pacific Free ex-Japan Net Index (the "Index"). On June 30, 2003, the
closing price of the Fund shares on the New York Stock Exchange was $8.13,
representing a 13.9% discount to the Fund's net asset value per share.
FACTORS AFFECTING PERFORMANCE
- Overall, the first half of 2003 presented several challenges to the
region, including the threat of a U.S. led war in Iraq, strained
international relations, potential conflict with North Korea and the
onset and spread of SARS (Severe Acute Respiratory Syndrome). These
concerns were abated towards the second quarter of 2003 following the
successful U.S. campaign in Iraq, South Korea easing tensions with the
North and the containment of SARS
- From a performance perspective the Asia Pacific region saw volatile
returns during the first half of 2003. The first quarter was
characterized by negative index returns (-5.6%, Index return) followed
by a strong recovery in the second quarter which saw index returns
surge to +14.8%. This recovery was driven by a weaker U.S. dollar,
increased local stimulus packages, inflow of foreign investment, muted
negative economic impact of SARS and attractive valuations.
- Positive contributors to the Fund came from Japan and Hong Kong. In
Japan, our higher exposure to large-cap blue-chip securities in both
the capital goods and technology hardware & equipment sectors
contributed positively to returns. Our overweight position in consumer
discretionary stocks in Hong Kong also contributed positively to
performance.
- Our underweight country and banking sector decisions in Australia
detracted from performance.
MANAGEMENT STRATEGIES
- In terms of portfolio positioning, the Fund increased its overweight
in Hong Kong based on low book values, deep discounts, strong
fundamentals and high dividend yields. The Fund maintained its
relative overweight in Korea, Taiwan and Hong Kong, and its
underweight positions in Australia and Malaysia. It maintains its
relatively neutral position in Japan.
Sincerely,
/s/ Ronald E. Robison
Ronald E. Robison
Executive Vice President and Principal Executive Officer
July 2003
2
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
STATEMENT OF NET ASSETS
June 30, 2003 (unaudited)
STATEMENT OF NET ASSETS
<Table>
<Caption>
VALUE
SHARES (000)
- -------------------------------------------------------------------------------------
COMMON STOCKS(96.2%)
(UNLESS OTHERWISE NOTED)
=====================================================================================
AUSTRALIA (8.5%)
AIRLINES
Qantas Airways Ltd. 1,140,750 $ 2,511
- -------------------------------------------------------------------------------------
BANKS
Australia & New Zealand Banking
Group Ltd. 399,350 5,003
Commonwealth Bank of Australia 162,350 3,229
- -------------------------------------------------------------------------------------
8,232
- -------------------------------------------------------------------------------------
BEVERAGES
Coca-Cola Amatil Ltd. 223,450 859
- -------------------------------------------------------------------------------------
CONTAINERS & PACKAGING
Amcor Ltd. 141,350 773
- -------------------------------------------------------------------------------------
INSURANCE
Promina Group Ltd. 736,400(a) 1,170
QBE Insurance Group Ltd. 239,050 1,500
- -------------------------------------------------------------------------------------
2,670
- -------------------------------------------------------------------------------------
MEDIA
News Corp., Ltd. 508,900 3,837
- -------------------------------------------------------------------------------------
METALS & MINING
BHP Billiton Ltd. 902,277 5,247
Rio Tinto Ltd. 244,050 4,799
- -------------------------------------------------------------------------------------
10,046
- -------------------------------------------------------------------------------------
28,928
=====================================================================================
CHINA (0.4%)
ELECTRIC UTILITIES
Huaneng Power International,
Inc., 'H' 1,088,000 1,242
=====================================================================================
HONG KONG(10.4%)
AIRLINES
Cathay Pacific Airways Ltd. 972,000 1,309
- -------------------------------------------------------------------------------------
BANKS
Bank of East Asia 830,000 1,639
- -------------------------------------------------------------------------------------
DISTRIBUTORS
Li & Fung Ltd. 1,504,000 1,938
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES
Hong Kong Exchanges & Clearing Ltd. 1,004,000 1,442
Swire Pacific Ltd. 'A' 587,000 2,567
- -------------------------------------------------------------------------------------
4,009
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT
Johnson Electric Holdings Ltd. 1,126,000 1,393
- -------------------------------------------------------------------------------------
HOUSEHOLD DURABLES
Techtronic Industries Co., Ltd. 848,000 1,424
- -------------------------------------------------------------------------------------
MEDIA
Television Broadcasts Ltd. 268,000 $ 961
- -------------------------------------------------------------------------------------
METALS & MINING
Asia Aluminum Holdings Ltd. 5,456,000 721
- -------------------------------------------------------------------------------------
OIL & GAS
CNOOC Ltd. 1,686,000 2,486
- -------------------------------------------------------------------------------------
REAL ESTATE
Cheung Kong Holdings Ltd. 1,156,000 6,953
Henderson Land Development Co., Ltd. 1,081,000 3,105
Hysan Development Co., Ltd. 792,000 655
Sun Hung Kai Properties Ltd. 517,000 2,612
- -------------------------------------------------------------------------------------
13,325
- -------------------------------------------------------------------------------------
SPECIALTY RETAIL
Esprit Holdings Ltd. 1,562,500 3,817
- -------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
China Mobile (Hong Kong) Ltd. 994,000 2,345
- -------------------------------------------------------------------------------------
35,367
=====================================================================================
INDIA (2.1%)
AUTOMOBILES
Hero Honda Motors Ltd. 155,725 850
- -------------------------------------------------------------------------------------
BANKS
Canara Bank 732,000 1,504
State Bank of India Ltd. 145,235(b) 1,258
Union Bank of India 780,000 583
- -------------------------------------------------------------------------------------
3,345
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT
Bharat Heavy Electricals Ltd. 171,937 996
- -------------------------------------------------------------------------------------
METALS & MINING
Hindalco Industries Ltd. 56,000 899
Tata Iron & Steel Co., Ltd. 1,910 7
- -------------------------------------------------------------------------------------
906
- -------------------------------------------------------------------------------------
PHARMACEUTICALS
Ranbaxy Laboratories Ltd. 50,000 846
- -------------------------------------------------------------------------------------
6,943
=====================================================================================
INDONESIA (1.4%)
AUTOMOBILES
Astra International Tbk PT 4,194,000(a) 1,818
- -------------------------------------------------------------------------------------
BANKS
Bank Central Asia Tbk PT 1,980,000 690
Bank Mandiri Persero Tbk PT 3,450,000(a) 282
- -------------------------------------------------------------------------------------
972
- -------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Telekomunikasi Indonesia Tbk PT 2,904,500 1,628
- -------------------------------------------------------------------------------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
3
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
STATEMENT OF NET ASSETS
June 30, 2003 (unaudited)
STATEMENT OF NET ASSETS (CONT'D)
<Table>
<Caption>
VALUE
SHARES (000)
- -------------------------------------------------------------------------------------
INDONESIA (CONT'D)
MULTILINE RETAIL
Ramayana Lestari Sentosa Tbk PT 1,051,500 $ 411
- -------------------------------------------------------------------------------------
4,829
=====================================================================================
JAPAN (49.2%)
AUTOMOBILES
Nissan Motor Co., Ltd. 654,000 6,273
Suzuki Motor Corp. 267,000 3,484
Toyota Motor Corp. 194,300 5,049
Yamaha Motor Co., Ltd. 100,000 846
- -------------------------------------------------------------------------------------
15,652
- -------------------------------------------------------------------------------------
BUILDING PRODUCTS
Daikin Industries Ltd. 226,000 4,163
Sanwa Shutter Corp. 352,000 1,400
- -------------------------------------------------------------------------------------
5,563
- -------------------------------------------------------------------------------------
CHEMICALS
Daicel Chemical Industries Ltd. 700,000 2,228
Denki Kagaku Kogyo Kabushiki Kaisha 1,038,000 2,888
Kaneka Corp. 540,000 3,339
Lintec Corp. 185,000 1,932
Mitsubishi Chemical Corp. 1,079,000 2,209
Nifco, Inc. 193,000 2,077
Shin-Etsu Polymer Co., Ltd. 347,000 1,713
Toyo INK MFG Co., Ltd 200,000 545
- -------------------------------------------------------------------------------------
16,931
- -------------------------------------------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES
Dai Nippon Printing Co., Ltd. 210,000 2,228
Nissha Printing Co., Ltd. 63,000 457
- -------------------------------------------------------------------------------------
2,685
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS
Fujitsu Ltd. 720,000 2,960
Mitsumi Electric Co., Ltd. 221,500 2,296
NEC Corp. 710,000(a) 3,559
Toshiba Corp. 1,400,000 4,831
- -------------------------------------------------------------------------------------
13,646
- -------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING
Kyudenko Corp. 220,000 772
Obayashi Corp. 582,000 1,790
Sanki Engineering Co., Ltd. 74,000 364
- -------------------------------------------------------------------------------------
2,926
- -------------------------------------------------------------------------------------
CONSUMER FINANCE
Hitachi Capital Corp. 258,300 2,821
- -------------------------------------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES
Nippon Telegraph & Telephone Corp. 936 3,683
- -------------------------------------------------------------------------------------
ELECTRIC UTILITIES
Tokyo Electric Power Co., Inc. 155,100 $ 2,974
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT
Furukawa Electric Co., Ltd. 414,000 1,356
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Hitachi High-Technologies Corp. 70,000 865
Hitachi Ltd. 790,000 3,359
Kyocera Corp. 54,600 3,134
Ryosan Co., Ltd. 133,000 1,747
TDK Corp. 72,200 3,577
- -------------------------------------------------------------------------------------
12,682
- -------------------------------------------------------------------------------------
FOOD & STAPLES
FamilyMart Co., Ltd. 127,300 2,281
- -------------------------------------------------------------------------------------
FOOD PRODUCTS
House Foods Corp. 136,000 1,250
Nippon Meat Packers, Inc. 200,000 1,895
- -------------------------------------------------------------------------------------
3,145
- -------------------------------------------------------------------------------------
HOUSEHOLD DURABLES
Casio Computer Co., Ltd. 407,000 2,608
Matsushita Electric Industrial Co., Ltd. 430,000 4,272
Rinnai Corp. 78,700 1,660
Sangetsu Co., Ltd. 17,000 275
Sekisui Chemical Co., Ltd. 500,000 1,696
Sekisui House Ltd. 351,000 2,669
Sony Corp. 105,700 2,985
- -------------------------------------------------------------------------------------
16,165
- -------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS
Fuji Photo Film Co., Ltd. 141,000 4,088
Yamaha Corp. 298,000 4,098
- -------------------------------------------------------------------------------------
8,186
- -------------------------------------------------------------------------------------
MACHINERY
Amada Co., Ltd. 508,000 1,638
Daifuku Co., Ltd. 508,000 1,940
Fuji Machine Manufacturing Co., Ltd. 156,000 1,812
Fujitec Co., Ltd. 178,000 773
Kurita Water Industries Ltd. 234,000 2,598
Minebea Co., Ltd. 504,000 2,005
Mitsubishi Heavy Industries Ltd. 1,106,000 2,874
Tsubakimoto Chain Co. 660,000 2,040
- -------------------------------------------------------------------------------------
15,680
- -------------------------------------------------------------------------------------
MEDIA
Toho Co., Ltd. 75,000 660
- -------------------------------------------------------------------------------------
OFFICE ELECTRONICS
Canon, Inc. 121,000 5,571
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
4
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
STATEMENT OF NET ASSETS
June 30, 2003 (unaudited)
STATEMENT OF NET ASSETS (CONT'D)
<Table>
<Caption>
VALUE
SHARES (000)
- -------------------------------------------------------------------------------------
JAPAN (CONT'D)
OFFICE ELECTRONICS (CONT'D)
Ricoh Co., Ltd. 281,000 $ 4,606
- -------------------------------------------------------------------------------------
10,177
- -------------------------------------------------------------------------------------
PHARMACEUTICALS
Ono Pharmaceutical Co., Ltd. 104,000 3,232
Sankyo Co., Ltd. 226,000 2,708
Yamanouchi Pharmaceutical Co., Ltd. 154,000 4,027
- -------------------------------------------------------------------------------------
9,967
- -------------------------------------------------------------------------------------
REAL ESTATE
Mitsubishi Estate Co., Ltd. 470,000 3,192
- -------------------------------------------------------------------------------------
ROAD & RAIL
East Japan Railway Co. 769 3,431
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
Rohm Co., Ltd. 21,200 2,319
- -------------------------------------------------------------------------------------
SOFTWARE
Nintendo Co., Ltd. 50,000 3,647
- -------------------------------------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS
Nisshinbo Industries, Inc. 265,000 1,218
- -------------------------------------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS
Mitsubishi Corp. 529,000 3,681
Nagase & Co., Ltd. 197,000 1,024
- -------------------------------------------------------------------------------------
4,705
- -------------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE
Mitsubishi Logistics Corp. 141,000 855
- -------------------------------------------------------------------------------------
166,547
=====================================================================================
MALAYSIA (0.3%)
AUTOMOBILES
Perusahaan Otomobil Nasional Bhd 224,000 477
- -------------------------------------------------------------------------------------
ELECTRIC UTILITIES
YTL Corp. Bhd 505,000 532
- -------------------------------------------------------------------------------------
1,009
=====================================================================================
NEW ZEALAND (0.3%)
PAPER & FOREST PRODUCTS
Carter Holt Harvey Ltd. 843,000 887
=====================================================================================
SINGAPORE(4.4%)
AIRLINES
Singapore Airlines Ltd. 438,000 2,587
- -------------------------------------------------------------------------------------
BANKS
DBS Group Holdings Ltd. 318,979 1,866
Oversea-Chinese Banking Corp., Ltd. 117,000 665
United Overseas Bank Ltd. 416,389 $ 2,933
- -------------------------------------------------------------------------------------
5,464
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Venture Corp., Ltd. 171,000 1,564
- -------------------------------------------------------------------------------------
INDUSTRIAL CONGLOMERATES
SembCorp Industries Ltd. 2,003,000 1,456
- -------------------------------------------------------------------------------------
MARINE
Neptune Orient Lines Ltd. 1,693,000(a) 1,423
- -------------------------------------------------------------------------------------
REAL ESTATE
CapitaLand, Ltd. 1,464,000 1,031
City Developments Ltd. 380,000 959
- -------------------------------------------------------------------------------------
1,990
- -------------------------------------------------------------------------------------
TRANSPORTATION INFRASTRUCTURE
Sembcorp Logistics Ltd. 537,800 574
- -------------------------------------------------------------------------------------
15,058
=====================================================================================
SOUTH KOREA (11.1%)
AUTO COMPONENTS
Hyundai Mobis 107,510 2,757
- -------------------------------------------------------------------------------------
BANKS
Shinhan Financial Group Co., Ltd. 74,480 776
- -------------------------------------------------------------------------------------
CAPITAL MARKETS
Daishin Securities Co., Ltd. 51,130 886
Samsung Securities Co., Ltd. 50,910 1,233
- -------------------------------------------------------------------------------------
2,119
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES
Good Morning Shinhan Securities Co., Ltd 95,730(a) 425
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Samsung SDI Co., Ltd. 32,480 2,460
- -------------------------------------------------------------------------------------
FOOD & STAPLES RETAILING
LG Household & Health Care Ltd. 36,940 954
- -------------------------------------------------------------------------------------
FOOD PRODUCTS
Tong Yang Confectionery Corp. 21,930 1,354
- -------------------------------------------------------------------------------------
HOUSEHOLD DURABLES
LG Electronics, Inc. 42,729 1,781
- -------------------------------------------------------------------------------------
MACHINERY
Daewoo Shipbuilding & Marine Engineering Co., Ltd. 35,520(a) 300
Daewoo Shipbuilding & Marine Engineering Co., Ltd. GDR 51,300(a) 829
Samsung Heavy Industries Co., Ltd. 137,280 550
- -------------------------------------------------------------------------------------
1,679
- -------------------------------------------------------------------------------------
MEDIA
CJ Home Shopping 15,909 825
- -------------------------------------------------------------------------------------
METALS & MINING
POSCO 6,590 684
- -------------------------------------------------------------------------------------
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
5
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
STATEMENT OF NET ASSETS
June 30, 2003 (unaudited)
STATEMENT OF NET ASSETS (CONT'D)
<Table>
<Caption>
VALUE
SHARES (000)
- -------------------------------------------------------------------------------------
SOUTH KOREA (CONT'D)
MULTILINE RETAIL
Hyundai Department Store Co., Ltd. 45,050 $ 1,003
Shinsegae Co., Ltd. 4,260 665
- -------------------------------------------------------------------------------------
1,668
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
Samsung Electronics Co., Ltd. 47,647 14,154
- -------------------------------------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES
Pantech Co., Ltd. 17,840 168
SK Telecom Co., Ltd. 34,410 5,874
- -------------------------------------------------------------------------------------
6,042
- -------------------------------------------------------------------------------------
37,678
=====================================================================================
TAIWAN (7.2%)
AIRLINES
Eva Airways Corp. 3,016,884(a) 1,082
- -------------------------------------------------------------------------------------
BANKS
Chinatrust Financial Holding Co., Ltd 2,909,043 2,348
Taishin Financial Holdings Co., Ltd. 2,133,000(a) 1,111
- -------------------------------------------------------------------------------------
3,459
- -------------------------------------------------------------------------------------
CHEMICALS
Nan Ya Plastics Corp. 644,000 699
- -------------------------------------------------------------------------------------
COMPUTERS & PERIPHERALS
Ambit Microsystems Corp. 176,000 545
Compal Electronics, Inc. 275,000 369
Quanta Computer, Inc. 302,100 625
Quanta Storage, Inc. 11,000 79
- -------------------------------------------------------------------------------------
1,618
- -------------------------------------------------------------------------------------
CONSTRUCTION & ENGINEERING
CTCI Corp. 527,000 342
- -------------------------------------------------------------------------------------
CONTAINERS & PACKAGING
Cheng Loong Corp. 440,000 116
- -------------------------------------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES
Capital Securities Corp. 1,254,000(a) 390
Fubon Financial Holding Co., Ltd. 791,000(a) 634
Polaris Securities Co., Ltd. 1,897,000(a) 911
Yuanta Core Pacific Securities Co. 1,619,000 848
- -------------------------------------------------------------------------------------
2,783
- -------------------------------------------------------------------------------------
ELECTRICAL EQUIPMENT
Phoenixtec Power Co., Ltd. 977,000 823
- -------------------------------------------------------------------------------------
ELECTRONIC EQUIPMENT & INSTRUMENTS
Hon Hai Precision Industry Co., Ltd. 596,200 2,165
- -------------------------------------------------------------------------------------
INSURANCE
Cathay Financial Holding Co., Ltd. 913,000 $ 1,117
- -------------------------------------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS
Asia Optical Co., Inc. 64,000 333
Largan Precision Co., Ltd. 131,300 790
Premier Image Technology Corp. 704,000 1,090
- -------------------------------------------------------------------------------------
2,213
- -------------------------------------------------------------------------------------
MARINE
Evergreen Marine Corp. 457,000 325
Yang Ming Marine Transport 635,000(a) 423
- -------------------------------------------------------------------------------------
748
- -------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
ASE Test Ltd. 217,500(a) 1,196
Siliconware Precision Industries Co. 1,253,247(a) 798
Taiwan Semiconductor Manufacturing Co., Ltd. 2,734,584(a) 4,510
Zyxel Communications Corp. 358,000(a) 674
- -------------------------------------------------------------------------------------
7,178
- -------------------------------------------------------------------------------------
24,343
=====================================================================================
THAILAND (0.9%)
BANKS
Bangkok Bank PCL 244,900(a) 326
Bangkok Bank PCL (Foreign) 668,600(a),(b) 1,072
Kasikornbank PCL 401,800(a) 325
Kasikornbank PCL (Foreign) 858,500(a) 800
Siam Commercial Bank PCL (Foreign) 573,000(a) 490
- -------------------------------------------------------------------------------------
3,013
=====================================================================================
TOTAL COMMON STOCKS
(Cost $364,356) 325,844
=====================================================================================
PREFERRED STOCKS(1.4%)
=====================================================================================
AUSTRALIA(0.4%)
MEDIA
News Corp., Ltd. 229,800 1,421
=====================================================================================
SOUTH KOREA(1.0%)
AUTOMOBILES
Hyundai Motor Co., Ltd. 64,310 832
=====================================================================================
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT
Samsung Electronics Co., Ltd. 17,910 2,555
- -------------------------------------------------------------------------------------
3,387
=====================================================================================
TOTAL PREFERRED STOCKS
(Cost $4,693) 4,808
=====================================================================================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
6
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
STATEMENT OF NET ASSETS
June 30, 2003 (unaudited)
STATEMENT OF NET ASSETS (CONT'D)
<Table>
<Caption>
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------------------------------------
INVESTMENT COMPANIES(0.6%)
=====================================================================================
INDIA(0.6%)
Morgan Stanley Growth Fund
(Cost $1,744) $ 9,491,200(a),(c) $ 2,029
=====================================================================================
SHORT-TERM INVESTMENT(1.7%)
=====================================================================================
UNITED STATES(1.7%)
REPURCHASE AGREEMENT
J.P. Morgan Securities, Inc., 1.05%,
dated 6/30/03, due 7/1/03 (Cost $5,735) 5,735(d) 5,735
=====================================================================================
FOREIGN CURRENCY ON DEPOSIT WITH
CUSTODIAN(0.5%)
=====================================================================================
Hong Kong Dollar HKD 319 41
Indonesian Rupiah IDR 817,576 99
Japanese Yen JPY 125,663 1,050
South Korean Won KRW 273 -- @
Taiwan Dollar TWD 13,314 385
- -------------------------------------------------------------------------------------
TOTAL FOREIGN CURRENCY
(Cost $1,578) 1,575
=====================================================================================
TOTAL INVESTMENTS(100.4%)
(Cost $378,106) 339,991
=====================================================================================
<Caption>
AMOUNT
(000)
- -------------------------------------------------------------------------------------
OTHER ASSETS (0.2%)
Dividends Receivable $ 336
Receivable for Investments Sold 220
Interest Receivable 5
Other 56 617
=====================================================================================
LIABILITIES (-0.6%)
Payable For:
Investments Purchased (1,373)
Investment Advisory Fees (276)
Custodian Fees (73)
Professional Fees (51)
Directors' Fees and Expenses (46)
Stockholder Reporting Expenses (32)
Administrative Fees (15)
Net Unrealized Loss on Foreign Currency
Exchange Contracts (3)
Other Liabilities (78) (1,947)
=====================================================================================
NET ASSETS (100%)
Applicable to 35,863,533 issued and outstanding
$ 0.01 par value shares
(200,000,000 shares authorized) $ 338,661
=====================================================================================
NET ASSET VALUE PER SHARE $ 9.44
=====================================================================================
<Caption>
VALUE
(000)
- -------------------------------------------------------------------------------------
AT JUNE 30, 2003, NET ASSETS CONSISTED OF:
Common Stock $ 359
Paid-in Capital 589,638
Undistributed (Distributions in Excess of) Net
Investment Income 1,240
Accumulated Net Realized Gain (Loss) (214,465)
Unrealized Appreciation (Depreciation) on
Investments and Foreign Currency Translations (38,111)
=====================================================================================
TOTAL NET ASSETS $ 338,661
=====================================================================================
</Table>
(a) -- Non-income producing.
(b) -- Securities valued at fair value - see Note A-1 to financial statements.
At June 30, 2003, the Fund held $2,330,000 of fair-valued securities,
representing 0.7% of net assets.
(c) -- The Morgan Stanley India Growth Fund is advised by an affiliate of the
adviser. During the six months ended June 30, 2003, there were no
purchases or sales of this security. The Fund did not derive income from
this security during the six months ended June 30, 2003.
(d) -- The repurchase agreement is fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of this
statement of net assets. The investment in the repurchase agreement is
through participation in joint account with affiliated funds.
@ -- Value is less than $500.
GDR -- Global Depositary Receipt
THB -- Thai Baht
FOREIGN CURRENCY EXCHANGE CONTRACT INFORMATION:
The Fund had the following foreign currency exchange contract(s) open at
period end:
<Table>
<Caption>
CURRENCY IN NET
TO EXCHANGE UNREALIZED
DELIVER VALUE SETTLEMENT FOR VALUE GAIN (LOSS)
(000) (000) DATE (000) (000) (000)
- --------------------------------------------------------------------
US$ 329 $ 329 07/02/03 THB 13,704 $ 326 $ (3)
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
7
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
STATEMENT OF NET ASSETS
June 30, 2003 (unaudited)
STATEMENT OF NET ASSETS (CONT'D)
SUMMARY OF TOTAL INVESTMENTS BY INDUSTRY
CLASSIFICATION -- JUNE 30, 2003
<Table>
<Caption>
PERCENT
VALUE OF NET
INDUSTRY (000) ASSETS
- ----------------------------------------------------------------
Airlines $ 7,489 2.2%
Automobiles 19,629 5.8
Banks 26,900 7.9
Building Products 5,563 1.7
Chemicals 17,630 5.2
Computers & Peripherals 15,264 4.5
Construction & Engineering 3,268 1.0
Diversified Financial Services 9,246 2.7
Diversified Telecommunication Services 5,311 1.6
Electric Utilities 4,748 1.4
Electrical Equipment 4,568 1.3
Electronic Equipment & Instruments 18,871 5.6
Food Products 4,499 1.3
Household Durables 19,370 5.7
Insurance 3,787 1.1
Leisure Equipment & Products 10,399 3.1
Machinery 17,359 5.1
Media 7,704 2.3
Metals & Mining 12,357 3.7
Office Electronics 10,177 3.0
Pharmaceuticals 10,813 3.2
Real Estate 18,507 5.5
Road & Rail 3,431 1.0
Semiconductors & Semiconductor Equipment 26,206 7.7
Software 3,647 1.1
Specialty Retail 3,817 1.1
Trading Companies & Distributors 4,705 1.4
Wireless Telecommunication Services 8,387 2.5
Other 36,339 10.7
- ----------------------------------------------------------------
$ 339,991 100.4%
================================================================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
8
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
Financial Statements
STATEMENT OF OPERATIONS
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, 2003
(UNAUDITED)
(000)
- ------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends (net of $319 of foreign taxes withheld) $ 3,273
Interest 48
========================================================================================================================
TOTAL INCOME 3,321
========================================================================================================================
EXPENSES
Investment Advisory Fees 1,526
Custodian Fees 106
Professional Fees 72
Administrative Fees 64
Directors' Fees and Expenses 1
Other Expenses 103
========================================================================================================================
TOTAL EXPENSES 1,872
========================================================================================================================
NET INVESTMENT INCOME (LOSS) 1,449
========================================================================================================================
NET REALIZED GAIN (LOSS) ON:
Investments (3,769)
Foreign Currency Transactions (25)
========================================================================================================================
NET REALIZED GAIN (LOSS) (3,794)
========================================================================================================================
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) ON:
Investments 33,337
Foreign Currency Translations 3
========================================================================================================================
CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) 33,340
========================================================================================================================
TOTAL NET REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) 29,546
========================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 30,995
========================================================================================================================
</Table>
STATEMENT OF CHANGES IN NET ASSETS
<Table>
<Caption>
SIX MONTHS ENDED
JUNE 30, 2003 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2002
(000) (000)
- ------------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income (Loss) $ 1,449 $ 631
Net Realized Gain (Loss) (3,794) (2,735)
Change in Unrealized Appreciation (Depreciation) 33,340 (17,251)
========================================================================================================================
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 30,995 (19,355)
========================================================================================================================
Distributions from and/or in excess of:
Net Investment Income -- (277)
========================================================================================================================
Capital Share Transactions:
Repurchase of Shares (158,630 and 6,960,192 shares, respectively) (1,151) (68,887)
========================================================================================================================
TOTAL INCREASE (DECREASE) 29,844 (88,519)
========================================================================================================================
Net Assets:
Beginning of Period 308,817 397,336
========================================================================================================================
END OF PERIOD (INCLUDING UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF) NET
INVESTMENT INCOME OF $1,240 AND $(209), RESPECTIVELY) $ 338,661 $ 308,817
========================================================================================================================
</Table>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
9
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
Financial Highlights
SELECTED PER SHARE DATA AND RATIOS
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 2003 --------------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.57 $ 9.24 $ 10.82 $ 15.26 $ 8.73 $ 8.77
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income (Loss) 0.04+ 0.02+ (0.02) (0.01) 0.01 0.06
Net Realized and Unrealized Gain (Loss) on
Investments 0.83 (0.70) (1.56) (4.50) 6.44 (0.17)
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations 0.87 (0.68) (1.58) (4.51) 6.45 (0.11)
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions from and/or in excess of:
Net Investment Income -- (0.01) -- (0.22) (0.04) (0.01)
- ---------------------------------------------------------------------------------------------------------------------------------
Anti-Dilutive Effect of Share Repurchase
Program 0.00# 0.02 0.00# 0.29 0.12 0.08
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $ 9.44 $ 8.57 $ 9.24 $ 10.82 $ 15.26 $ 8.73
=================================================================================================================================
PER SHARE MARKET VALUE, END OF PERIOD $ 8.13 $ 7.20 $ 7.49 $ 8.69 $ 11.81 $ 7.00
=================================================================================================================================
TOTAL INVESTMENT RETURN:
Market Value 12.92%** (3.77)% (13.78)% (24.66)% 69.32% (5.77)%
Net Asset Value (1) 10.11%** (7.12)% (14.60)% (27.37)% 75.39% (0.34)%
=================================================================================================================================
RATIOS, SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (THOUSANDS) $ 338,661 $ 308,817 $ 397,336 $ 621,505 $ 949,541 $ 587,156
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets 1.23%* 1.35% 1.39% 1.26% 1.29% 1.42%
Ratio of Net Investment Income (Loss) to
Average Net Assets 0.95%* 0.17% 0.19% (0.07)% 0.10% 0.80%
Portfolio Turnover Rate 15%** 37% 27% 35% 65% 42%
- ---------------------------------------------------------------------------------------------------------------------------------
</Table>
# Amount is less than $0.005 per share.
(1) Total investment return based on net asset value per share reflects the
effects of changes in net asset value on the performance of the Fund during
each period, and assumes dividends and distributions, if any, were
reinvested. This percentage is not an indication of the performance of a
stockholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
of the Fund.
+ Per share amount is based on average shares outstanding.
* Annualized
** Not Annualized
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
10
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
June 30, 2003 (unaudited)
NOTES TO FINANCIAL STATEMENTS
The Morgan Stanley Asia-Pacific Fund, Inc. (the "Fund") was incorporated in
Maryland on February 28, 1994, and is registered as a non-diversified,
closed-end management investment company under the Investment Company Act of
1940, as amended. The Fund's investment objective is long-term capital
appreciation through investments primarily in equity securities.
A. ACCOUNTING POLICIES: The following significant accounting policies are in
conformity with accounting principles generally accepted in the United States of
America. Such policies are consistently followed by the Fund in the preparation
of its financial statements. Accounting principles generally accepted in the
United States of America may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results may differ from those estimates.
1. SECURITY VALUATION: In valuing the Fund's assets, all listed securities for
which market quotations are readily available are valued at the last sale
price on the valuation date, or if there was no sale on such date, at the
mean between the current bid and asked prices or the bid price if only bid
quotations are available. Securities which are traded over-the-counter are
valued at the mean of the current bid and asked prices obtained from
reputable brokers. Securities may be valued by independent pricing
services. The prices provided by a pricing service take into account broker
dealer market price quotations for institutional size trading in similar
groups of securities, security quality, maturity, coupon and other security
characteristics as well as any developments related to the specific
securities. Short-term securities which mature in 60 days or less are
valued at amortized cost. For all other securities and investments for
which market values are not readily available, including restricted
securities, and where prices determined in accordance with the
aforementioned procedures are not reflective of fair market value, values
are determined in good faith, under fair valuation procedures adopted by
the Board of Directors, although actual calculations may be done by others.
2. REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements under
which the Fund lends excess cash and takes possession of securities with an
agreement that the counterparty will repurchase such securities. In
connection with transactions in repurchase agreements, a bank as custodian
for the Fund takes possession of the underlying securities (collateral),
with a market value at least equal to the amount of the repurchase
transaction, including principal and 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 determine the adequacy
of the collateral. In the event of default on the obligation to repurchase,
the Fund has the right to liquidate the collateral and apply the proceeds
in satisfaction of the obligation. In the event of default or bankruptcy by
the counterparty to the agreement, realization and/or retention of the
collateral or proceeds may be subject to legal proceedings.
The Fund, along with other affiliated investment companies, may utilize a
joint trading account for the purpose of entering into one or more
repurchase agreements.
3. 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 at the mean of the bid and asked prices of such currencies
against U.S. dollars last quoted by a major bank as follows:
- investments, other assets and liabilities at the prevailing rates of
exchange on the valuation date;
- investment transactions and investment income at the prevailing rates
of exchange on the dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange
rates and market values at the close of the period, the Fund does not
isolate that portion of the results of operations arising as a result of
changes in the foreign exchange rates from the fluctuations arising from
changes in the market prices of the securities held at period end.
Similarly, the Fund does not isolate the effect of changes in foreign
exchange rates from the fluctuations arising from changes in the market
prices of securities sold during the period. Accordingly, realized and
unrealized foreign currency gains (losses) due to securities transactions
are included in the reported net realized and unrealized gains (losses) on
investment transactions and balances.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from sales and maturities of foreign
currency exchange contracts, disposition of foreign currencies, currency
gains or losses realized between the trade and settlement dates on
11
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
June 30, 2003 (unaudited)
NOTES TO FINANCIAL STATEMENTS (CONT'D)
securities transactions, and the difference between the amount of
investment income and foreign withholding taxes recorded on the Fund's
books and the U.S. dollar equivalent amounts actually received or paid. Net
unrealized currency gains (losses) from valuing foreign currency
denominated assets and liabilities at period end exchange rates are
reflected as a component of unrealized appreciation (depreciation) on
investments and foreign currency translations in the Statement of Net
Assets. The change in net unrealized currency gains (losses) on foreign
currency translations for the period is reflected in the Statement of
Operations.
A significant portion of the Fund's net assets consist of securities of
issuers located in Asia which are denominated in foreign currencies.
Changes in currency exchange rates will affect the value of and investment
income from such securities. Asian securities are subject to greater price
volatility, limited capitalization and liquidity, and higher rates of
inflation than securities of companies based in the United States. In
addition, Asian securities may be subject to substantial governmental
involvement in the economy and greater social, economic and political
uncertainty. Such securities may be concentrated in a limited number of
countries and regions and may vary throughout the year.
The Fund may use derivatives to achieve its investment objectives. The Fund may
engage in transactions in futures contracts on foreign currencies, stock
indices, as well as in options, swaps and structured notes. Consistent with the
Fund's investment objectives and policies, the Fund may use derivatives for
non-hedging as well as hedging purposes.
Following is a description of derivative instruments that the Fund has utilized
and their associated risks:
4. FOREIGN CURRENCY EXCHANGE CONTRACTS: The Fund may enter into foreign
currency exchange contracts to attempt to protect securities and related
receivables and payables against changes in future foreign exchange rates
and, in certain situations, to gain exposure to a foreign currency. A
foreign currency exchange contract is an agreement between two parties to
buy or sell currency at a set price on a future date. The market value of
the contract will fluctuate with changes in currency exchange rates. The
contract is marked-to-market daily and the change in market value is
recorded by the Fund as unrealized gain or loss. The Fund records realized
gains or losses when the contract is closed equal to the difference between
the value of the contract at the time it was opened and the value at the
time it was closed. Risk may arise upon entering into these contracts from
the potential inability of counterparties to meet the terms of their
contracts and is generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from
unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
5. STRUCTURED SECURITIES: The Fund may invest in interests in entities
organized and operated solely for the purpose of restructuring the
investment characteristics of sovereign debt obligations. This type of
restructuring involves the deposit with or purchase by an entity of
specified instruments and the issuance by that entity of one or more
classes of securities ("Structured Securities") backed by, or representing
interests in, the underlying instruments. Structured Securities generally
will expose the Fund to credit risks of the underlying instruments as well
as of the issuer of the Structured Security. Structured Securities are
typically sold in private placement transactions with no active trading
market. Investments in Structured Securities may be more volatile than
their underlying instruments, however, any loss is limited to the amount of
the original investment.
6. OVER-THE-COUNTER TRADING: Securities and other derivative instruments that
may be purchased or sold by the Fund may consist of instruments not traded
on an exchange. The risk of nonperformance by the obligor on such an
instrument may be greater, and the ease with which the Fund can dispose of
or enter into closing transactions with respect to such an instrument may
be less, than in the case of an exchange-traded instrument. In addition,
significant disparities may exist between bid and asked prices for
derivative instruments that are not traded on an exchange. Derivative
instruments not traded on exchanges are also not subject to the same type
of government regulation as exchange traded instruments, and many of the
protections afforded to participants in a regulated environment may not be
available in connection with such transactions.
7. OTHER: Security transactions are accounted for on the date the securities
are purchased or sold. Investments in new Indian securities are made by
making applications in the public offerings. The issue price, or a portion
thereof, is
12
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
June 30, 2003 (unaudited)
NOTES TO FINANCIAL STATEMENTS (CONT'D)
paid at the time of application and is reflected as share application money
on the Statement of Net Assets, if any. Upon allotment of the securities,
this amount plus any remaining amount of issue price is recorded as cost of
investments. Realized gains and losses on the sale of investment securities
are determined on the specific identified cost basis. Interest income is
recognized on the accrual basis. Dividend income is recorded on the
ex-dividend date (except certain dividends which may be recorded as soon as
the Fund is informed of such dividends) net of applicable withholding
taxes. Distributions to stockholders are recorded on the ex-dividend date.
B. ADVISER: Morgan Stanley Investment Management Inc. (the "Adviser") provides
investment advisory services to the Fund under the terms of an Investment
Advisory and Management Agreement (the "Agreement"). Under the Agreement, the
Adviser is paid a fee computed weekly and payable monthly at an annual rate of
1.00% of the Fund's average weekly net assets.
C. ADMINISTRATOR: JPMorgan Chase Bank, through its corporate affiliate
J.P. Morgan Investor Services Co. (the "Administrator"), provides administrative
services to the Fund under an Administration Agreement. The Administrator is
paid a fee computed weekly and payable monthly at an annual rate of 0.02435% of
the Fund's average weekly net assets, plus $24,000 per annum. In addition, the
Fund is charged for certain out-of-pocket expenses incurred by the Administrator
on its behalf.
D. CUSTODIAN: JPMorgan Chase Bank and its affiliates serve as custodian for
the Fund. Custody fees are payable monthly based on assets held in custody,
investment purchase and sales activity and account maintenance fees, plus
reimbursement for certain out-of-pocket expenses.
E. FEDERAL INCOME TAXES: It is the Fund's intention to continue to qualify as
a regulated investment company and distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required in the financial
statements. Dividend income and distributions to stockholders are recorded on
the ex-dividend date.
The Fund may be subject to taxes imposed by countries in which it invests. Such
taxes are generally based on income and/ or capital gains earned or repatriated.
Taxes are accrued and applied to net investment income, net realized gains and
net unrealized appreciation as such income and/or gains are earned.
The tax character of distributions paid may differ from the character of
distributions shown on the Statements of Changes in Net Assets due to short-term
capital gains being treated as ordinary income for tax purposes. The tax
character of distributions paid during 2002 and 2001 was as follows:
<Table>
<Caption>
2002 DISTRIBUTIONS 2001 DISTRIBUTIONS
PAID FROM: PAID FROM:
(000) (000)
- ------------------------------ ------------------------
LONG-TERM LONG-TERM
ORDINARY CAPITAL ORDINARY CAPITAL
INCOME GAIN INCOME GAIN
- ---------------------------------------------------------
$ 277 $ -- $ -- $ --
</Table>
The amount and character of income and capital gain distributions to be paid by
the Fund are determined in accordance with Federal income tax regulations, which
may differ from accounting principles generally accepted in the United States of
America. The book/tax differences are considered either temporary or permanent
in nature.
Temporary differences are attributable to differing book and tax treatments for
the timing of the recognition of gains and losses on certain investment
transactions and the timing of the deductibility of certain expenses.
Permanent differences may result in reclassifications among undistributed
(distributions in excess of) net investment income, accumulated net realized
gain (loss) and paid-in capital. Adjustments for permanent book-tax differences,
if any, are not reflected in ending undistributed (distributions in excess of)
net investment income for the purpose of calculating net investment income
(loss) per share in the financial highlights.
At December 31, 2002, the components of distributable earnings on a tax basis
were as follows:
<Table>
<Caption>
UNDISTRIBUTED UNDISTRIBUTED
ORDINARY INCOME LONG-TERM CAPITAL GAIN
(000) (000)
- -------------------------------------------------------
$ -- $ --
- -------------------------------------------------------
</Table>
At June 30, 2003, the U.S. Federal income tax cost basis of investments
(excluding foreign currency if applicable) was approximately $376,528,000 and,
accordingly, net unrealized depreciation for U.S. Federal income tax purposes
was $38,112,000 of which $37,536,000 related to appreciated securities and
$75,648,000 related to depreciated securities.
At December 31, 2002, the Fund had a capital loss carryforward for U.S. Federal
income tax purposes of approximately $208,653,000 available to offset future
capital gains, of which $131,491,000 will expire on December 31,
13
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
June 30, 2003 (unaudited)
NOTES TO FINANCIAL STATEMENTS (CONT'D)
2006, $73,332,000 will expire on December 31, 2009 and $3,830,000 will expire on
December 31, 2010. To the extent that capital gains are offset, such gains will
not be distributed to the stockholders.
Net capital and currency losses incurred after October 31, and within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year. For the year ended December 31, 2002, the Fund deferred to January
1, 2003, for U.S. Federal income tax purposes, capital losses of $651,000 and
post-October currency losses of $19,000.
F. OTHER: During the six months ended June 30, 2003, the Fund made purchases
and sales totaling approximately $47,733,000 and $45,087,000 respectively, of
investment securities other than long-term U.S. Government securities, purchased
options and short-term investments. There were no purchases or sales of
long-term U.S. Government securities.
For the six months ended June 30, 2003, the Fund incurred $34,000 of brokerage
commissions with Morgan Stanley & Co., an affiliate of the Adviser.
Each Director of the Fund who is not an officer of the Fund or an affiliated
person as defined under the Investment Company Act of 1940, as amended, may
elect to participate in the Directors' Deferred Compensation Plan (the
"Compensation Plan"). Under the Compensation Plan, such Directors may elect to
defer payment of a percentage of their total fees earned as a Director of the
Fund. These deferred portions will be treated, based on an election by the
Director, as if they were either invested in the Fund's shares or invested in
U.S. Treasury Bills, as defined under the Compensation Plan. At June 30, 2003,
the deferred fees payable under the Compensation Plan totaled $44,200 and are
included in Payable for Directors' Fees and Expenses on the Statement of Net
Assets. The deferred portion of Directors' Fees and Expenses shown on the
Statement of Operations is impacted by fluctuations in the market value of the
investments selected by each Director. For the six months ended June 30, 2003,
Directors' Fees and Expenses were decreased by $3,400 due to these fluctuations.
On January 23, 1998, the Fund commenced a share repurchase program for purposes
of enhancing stockholder value and reducing the discount at which the Fund's
shares trade from their net asset value. For the six months ended June 30, 2003,
the Fund repurchased 158,630 of its shares at an average discount of 16.39% from
net asset value per share. Since the inception of the program, the Fund has
repurchased 15,072,158 of its shares at an average discount of 20.53% from net
asset value per share. The Fund expects to continue to repurchase its
outstanding shares at such time and in such amounts as it believes will further
the accomplishment of the foregoing objectives, subject to review by the Board
of Directors.
PROPOSAL:
1. To elect the following Directors, effective July 31, 2003:
<Table>
<Caption>
VOTES IN VOTES
FAVOR OF AGAINST
---------------------------
1) Michael Bozic 29,661,275 615,871
2) Charles A. Fiumefreddo 29,661,275 615,871
3) Edwin J. Garn 29,661,375 615,771
4) Wayne E. Hedien 29,661,526 616,619
5) James F. Higgins 29,661,375 615,771
6) Dr. Manuel H. Johnson 29,661,375 615,771
7) Philip J. Purcell 29,661,526 616,619
</Table>
Also effective July 31, 2003, John D. Barrett II, Thomas P. Gerrity, Gerard E.
Jones, Vincent R. McLean, C. Oscar Morong, Jr. and William G. Morton, Jr. have
resigned from the Board of Directors.
14
<Page>
MORGAN STANLEY ASIA-PACIFIC FUND, INC.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
each stockholder will be deemed to have elected, unless American Stock Transfer
& Trust Company (the "Plan Agent") is otherwise instructed by the stockholder in
writing, to have all distributions automatically reinvested in Fund shares.
Participants in the Plan have the option of making additional voluntary cash
payments to the Plan Agent, annually, in any amount from $100 to $3,000, for
investment in Fund shares.
Dividend and capital gain distributions will be reinvested on the
reinvestment date in full and fractional shares. If the market price per share
equals or exceeds net asset value per share on the reinvestment date, the Fund
will issue shares to participants at net asset value. If net asset value is
less than 95% of the market price on the reinvestment date, shares will be
issued at 95% of the market price. If net asset value exceeds the market price
on the reinvestment date, participants will receive shares valued at market
price. The Fund may purchase shares of its Common Stock in the open market in
connection with dividend reinvestment requirements at the discretion of the
Board of Directors. Should the Fund declare a dividend or capital gain
distribution payable only in cash, the Plan Agent will purchase Fund shares for
participants in the open market as agent for the participants.
The Plan Agent's fees for the reinvestment of dividends and distributions
will be paid by the Fund. However, each participant's account will be charged a
pro rata share of brokerage commissions incurred on any open market purchases
effected on such participant's behalf. A participant will also pay brokerage
commissions incurred on purchases made by voluntary cash payments. Although
stockholders in the Plan may receive no cash distributions, participation in the
Plan will not relieve participants of any income tax which may be payable on
such dividends or distributions.
In the case of stockholders, such as banks, brokers or nominees, that hold
shares for others who are the beneficial owners, the Plan Agent will administer
the Plan on the basis of the number of shares certified from time to time by the
stockholder as representing the total amount registered in the stockholder's
name and held for the account of beneficial owners who are participating in the
Plan.
Stockholders who do not wish to have distributions automatically reinvested
should notify the Plan Agent in writing. There is no penalty for
non-participation or withdrawal from the Plan, and stockholders who have
previously withdrawn from the Plan may rejoin at any time. Requests for
additional information or any correspondence concerning the Plan should be
directed to the Plan Agent at:
Morgan Stanley Asia-Pacific Fund, Inc.
American Stock Transfer & Trust Company
Dividend Reinvestment and Cash Purchase Plan
59 Maiden Lane
New York, New York 10030
1-800-278-4353
15
<Page>
ITEM 2. CODE OF ETHICS. Not applicable for semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable for semi-annual
reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable for semi-annual
reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable for semi-annual
reports.
ITEM 6. [RESERVED.]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. Not applicable for semi-annual reports.
ITEM 8. [RESERVED.]
ITEM 9. CONTROLS AND PROCEDURES.
The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
There were no significant changes or corrective actions with regard to
significant deficiencies or material weaknesses in the Fund's internal controls
or in other factors that could significantly affect the Fund's internal controls
subsequent to the date of their evaluation.
ITEM 10. EXHIBITS.
(a) Code of Ethics - Not applicable for semi-annual reports.
(b) Certifications of Principal Executive Officer and Principal Financial
Officer attached hereto as part of EX-99.CERT.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Morgan Stanley Asia-Pacific Fund, Inc.
By: Ronald E. Robison
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: August 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 by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: Ronald E. Robison
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: August 19, 2003
By: James W. Garrett
Name: James W. Garrett
Title: Principal Financial Officer
Date: August 19, 2003