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<PAGE> PAGE 2
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<PAGE> PAGE 3
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SIGNATURE EDWIN C. LAURENSON
TITLE PRINCIPAL ATTORNEY
<TABLE> <S> <C>
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<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 350,439,030
<INVESTMENTS-AT-VALUE> 380,239,853
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<TOTAL-LIABILITIES> 78,370,447
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<OVERDISTRIBUTION-NII> 446,407
<ACCUMULATED-NET-GAINS> 0
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</TABLE>
THE R.O.C. TAIWAN FUND
EXHIBITS TO
FORM N-SAR
SEMI-ANNUAL REPORT
FOR REGISTERED INVESTMENT COMPANIES
FOR THE PERIOD ENDING
DECEMBER 31, 1997
<PAGE>
2
ATTACHMENTS INDEX
The following attachments to Form N-SAR are being filed with the Securities and
Exchange Commission on behalf of The R.O.C. Taiwan Fund (811-5617) (CIK-
836267):
Sub-Item Description
-------- -----------
77B Accountant's Report On Internal
Control
77Q1 By-Laws of The R.O.C. Taiwan
Fund, Amended Through
December 10, 1997
77Q2 Compliance During 1997 with
Required Filings Pursuant to
Section 30(f) of the Investment
Company Act
Response to Item 77B
--------------------
KPMG PEAT MARWICK
6th Fl. No. 18, Sec. 1, Change-An East Road Telephone (02)2715-999
Taipei, 105 Taiwan, R.O.C. Telefax (02)2715-9888
To The Board of Trustees
The R.O.C. Taiwan Fund
In planning and performing our audit of the financial statements of The R.O.C.
Taiwan Fund for the year ended December 31, 1997, we considered its internal
control structure, including procedures for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR, not
to provide assurance on the internal control structure.
The management of The R.O.C. Taiwan Fund is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and transactions
are executed in accordance with management's authorization and recorded properly
to permit preparation of financial statements in accordance with generally
accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it may
become inadequate because changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure does not reduce to a
relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
December 31, 1997.
<PAGE>
2
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
KPMG PEAT MARWICK
/s/ KPMG Peat Marwick
- ---------------------
Taipei, Taiwan
January 9, 1998
BY-LAWS
OF
THE R.O.C. TAIWAN FUND
Amended through December 10, 1997
<PAGE>
BY-LAWS
OF
THE R.O.C. TAIWAN FUND
ARTICLE I
DEFINITIONS
The terms "Commission," "Custodian," "Declaration,"
"Investment Manager," "Majority Shareholder Vote," "1940 Act," "Shareholder,"
"Shares," "Transfer Agent," "Trust," "Trust Property" and "Trustees" shall have
the respective meanings given them in the Amended and Restated Declaration of
Trust of The R.O.C. Taiwan Fund dated May 8, 1989, as amended from time to time.
ARTICLE II
OFFICES
Section 1. Principal Office. Until changed by the Trustees,
the principal office of the Trust shall be in such place as the Trustees shall
determine.
Section 2. Other Offices. The Trust may have offices in such
other places without as well as within the Commonwealth of Massachusetts as the
Trustees may from time to time determine.
ARTICLE III
SHAREHOLDERS
Section 1. Meetings and Quorum. An annual meeting of the
Shareholders shall be held at such place within or without the Commonwealth of
Massachusetts on such day and at such time as the Trustees shall designate.
Special meetings of the Shareholders may be called at any time by a majority of
the Trustees. Except as required by law, the holders of one third of the
outstanding Shares present in person or by proxy shall constitute a quorum at
any meeting of the Shareholders, provided that the Trust shall conduct a general
solicitation of proxies from the Shareholders in connection with any such
meeting. In the absence of a quorum, a majority of the Shares present in person
or by proxy may adjourn the meeting from time to time until a quorum shall be
present. Except as otherwise required by law, the rules of any stock exchange or
quotation system upon which the Shares are listed or traded, the Declaration or
these By-laws, Trustees shall be elected by a plurality of the Shares voted that
are represented in person or by proxy at a meeting of Shareholders, provided
that a quorum is present in person or by proxy at such
<PAGE>
2
meeting, and any other Shareholder action to be taken at a meeting shall be
taken by holders of a plurality of Shares voted that are represented in person
or by proxy at such meeting, provided that a quorum is present in person or by
proxy at such meeting.
Section 2. Notice of Meetings. Notice of all meetings of the
Shareholders, stating the time, place and purposes of the meeting, shall be
given by the Trustees by mail to each Shareholder at his address as recorded on
the register of the Trust, mailed at least ten (10) days and not more than
ninety (90) days before the meeting. Only the business stated in the notice of
the meeting shall be considered at such meeting. Any adjourned meeting may be
held as adjourned without further notice. No notice need be given to any
Shareholder who shall have failed to inform the Trust of his current address or
if a written waiver of notice, executed before or after the meeting by the
Shareholder or his attorney thereunto authorized, is filed with the records of
the meeting.
Section 3. Record Date for Meetings. For the purpose of
determining the Shareholders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time close the transfer books for such
period, not exceeding thirty (30) days, as the Trustees may determine; or
without closing the transfer books the Trustees may fix a date not more than
ninety (90) days prior to the date of any meeting of Shareholders or
distribution or other action as a record date for the determination of the
persons to be treated as Shareholders of record for such purposes.
Section 4. Proxies. At any meeting of Shareholders, any holder
of Shares entitled to vote thereat may vote by proxy, provided that no proxy
shall be voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote shall be taken.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of one or more Trustees or one or more of the officers of the Trust.
Only Shareholders of record shall be entitled to vote. Each full Share shall be
entitled to one vote and fractional Shares shall be entitled to a vote of such
fraction. When any Share is held jointly by several persons, any one of them may
vote at any meeting in person or by proxy in respect to such Share, but if more
than one of them shall be present at such meeting in person or by proxy, and
such joint owners or their proxies so present disagree as to any vote to be
cast, such vote shall not be received in respect of such Share. A proxy
purporting to be executed by or on behalf of a Shareholder shall be deemed valid
unless challenged at or prior to its exercise, and the burden of proving
invalidity shall rest on the challenger. If the holder of any such Share is a
minor or a person of unsound mind, and subject to guardianship or to the legal
control of any other person as regards the charge or management of such Share,
he may vote by his
<PAGE>
3
guardian or such other person appointed or having such control, and such vote
may be given in person or by proxy.
Section 5. Inspection of Records. The records of the Trust
shall be open to inspection by Shareholders to the same extent as is permitted
shareholders of a Massachusetts business corporation or as may be required by
the 1940 Act.
Section 6. Action without Meeting. Any action which may be
taken by Shareholders may be taken without a meeting if all of the Shareholders
entitled to vote on the matter consent to the action in writing and the written
consents are filed with the records of the meetings of Shareholders. Such
consent shall be treated for all purposes as a vote taken at a meeting of
Shareholders.
Section 7. Circumstances of Conversion Vote. If the provisions
of Section 8.6 of the Declaration are triggered as a result of the average
closing price of the Shares being less than 90% of the Trust's average net asset
value per Share during any 12-week period, the Trustees' obligation to submit to
the Shareholders, at the next annual meeting of Shareholders, a proposal to
convert the Trust from a closed-end company to an open-end company shall be
fulfilled by submitting such proposal at the annual meeting next occurring after
such criterion is met, unless such criterion is first met during the 10-week
period immediately preceding the date previously fixed by the Trustees (at a
meeting of Trustees occurring before the date upon which such 10-week period
commenced) for such annual meeting. If such criterion is first met during such
10-week period, such proposal shall instead be submitted to the Shareholders at
the next meeting of Shareholders following the annual meeting so previously
scheduled, which subsequent meeting may be either an annual meeting or a special
meeting of Shareholders.
Section 8. Resubmission of a Conversion Proposal. For purposes
of determining whether the Trustees are obligated to submit a proposal to the
Shareholders to convert the Trust into an open-end company pursuant to Section
8.6(a) of the Declaration, in any year in which an annual meeting of
Shareholders has been held at which a vote on whether to convert the Trust to an
open-end company pursuant to such Section 8.6(a) has occurred, no twelve-week
period referred to therein shall be deemed to commence prior to the end of the
week in which such annual meeting occurs.
ARTICLE IV
TRUSTEES
Section 1. Meetings of the Trustees. The Trustees may in their
discretion provide for regular meetings of the Trustees. Notice of regular
meetings need not be given. Meetings of the Trustees other than regular meetings
("special
<PAGE>
4
meetings") shall be held whenever called by the Chairman, or by any one of the
Trustees, at the time being in office. Notice of the time and place of each
special meeting shall be given by the Secretary or an Assistant Secretary or by
the officer or Trustee calling the meeting and shall be mailed to each Trustee
at least five days before the meeting, or shall be telegraphed, cabled, or
telecopied to each Trustee at his business address, or personally delivered to
him at least two days before the meeting. Notice of a meeting need not be given
to any Trustee if a written waiver of notice, executed by him before or after
the meeting, is filed with the records of the meeting, or to any Trustee who
attends the meeting without protesting prior thereto or at its commencement the
lack of notice to him. Except as otherwise required by the 1940 Act, a notice or
waiver of notice need not specify the purpose of any meeting. Except as
otherwise required by the 1940 Act, the Trustees or any Committee of Trustees
may meet by means of a telephone conference circuit or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, which telephone conference meeting shall be deemed to have been held
at a place designated by the Trustees at the meeting. Unless the 1940 Act
mandates otherwise, participation in a telephone conference meeting shall
constitute presence in person at such meeting. Except as otherwise required by
the 1940 Act, any action required or permitted to be taken at any meeting of the
Trustees may be taken by the Trustees without a meeting if all the Trustees
consent to the action in writing and the written consents are filed with the
records of the Trustees' meetings.
Such consents shall be treated as a vote for all purposes.
Section 2. Quorum and Manner of Acting. A majority of the
Trustees shall be present in person at any regular or special meeting of the
Trustees in order to constitute a quorum for the transaction of business at such
meeting and (except as otherwise required by law, the Declaration or these
By-Laws) the act of a majority of the Trustees present at any such meeting, at
which a quorum is present, shall be the act of the Trustees. In the absence of a
quorum, a majority of the Trustees present may adjourn the meeting from time to
time until a quorum shall be present. Notice of an adjourned meeting need not be
given.
Section 3. Insurance. The Trustees shall not use, or authorize
the officers of the Trust to use, the assets of the Trust to purchase insurance
that protects or purports to protect a Person against liabilities for willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
<PAGE>
5
ARTICLE V
COMMITTEES
Section 1. Executive and Other Committees. The Trustees by
vote of a majority of all the Trustees may elect from their own number an
Executive Committee to consist of not less than three (3) to hold office at the
pleasure of the Trustees, which shall have the power to conduct the current and
ordinary business of the Trust while the Trustees are not in session, including
the purchase and sale of securities (which power may be further delegated to any
Investment Manager) and the designation of securities to be delivered upon
redemption of Shares of the Trust, and such other powers of the Trustees as the
Trustees may, from time to time, delegate to them except those powers which by
law, the Declaration or these By-Laws they are prohibited from delegating. The
Trustees may also elect from their own number other Committees from time to
time, the number composing such Committees, the powers conferred upon the same
(subject to the same limitations as with respect to the Executive Committee) and
the term of membership on such Committees to be determined by the Trustees. The
Trustees may designate a chairman of any such Committee. In the absence of such
designation the Committee may elect its own Chairman.
Section 2. Meeting, Quorum and Manner of Acting. The Trustees
may (1) provide for regular meetings of any Committees, (2) specify the manner
of calling and notice required for special meetings of any Committee, (3)
specify the number of members of a Committee required to constitute a quorum and
the number of members of a Committee required to exercise specified powers
delegated to such Committee, (4) authorize the making of decisions to exercise
specified powers by written assent of the requisite number of members of a
Committee without a meeting and (5) authorize the member of a Committee to meet
by means of a telephone conference circuit.
The Executive Committee shall keep regular minutes of its
meetings and records of decisions taken without a meeting and cause them to be
recorded in a book designated for that purpose and kept in the office of the
Trust.
ARTICLE VI
OFFICERS
Section 1. General Provisions. The officers of the Trust shall
be a Chairman, a President, a Treasurer and a Secretary, who shall be elected by
the Trustees. The Trustees may elect or appoint such other officers or agents as
the business of the Trust may require, including one or more Vice Presidents,
one or more Assistant Secretaries, and one or more Assistant Treasurers. The
Trustees may
<PAGE>
6
delegate to any officer or committee the power to appoint any subordinate
officers or agents.
Section 2. Term of Office and Qualifications. Except as
otherwise provided by law, the Declaration or these By-Laws, the Chairman, the
President, the Treasurer and the Secretary shall hold office until his successor
shall have been duly elected and qualified, and all other officers shall hold
office at the pleasure of the Trustees. The Treasurer and the Secretary may be
the same person. The President shall be the Chief Executive Officer of the Trust
and shall hold no other office. The Treasurer shall be the Chief Financial
Officer of the Trust. Except as above provided, any two or more offices may be
held by the same person. Any officer may be but none need be a Trustee or
Shareholder.
Section 3. Removal. The Trustees, at any regular or special
meeting of the Trustees, may remove any officer with or without cause by a vote
of a majority of the Trustees. Any officer or agent appointed by any officer or
committee may be removed with or without cause by such appointing officer or
committee.
Section 4. Powers and Duties of the Chairman. The Chairman may
call meetings of the Trustees and of any Committee thereof when he deems it
necessary and shall preside at all meetings of the Shareholders. Subject to the
control of the Trustees and any Committees of the Trustees, within their
respective spheres, as provided by the Trustees, he shall at all times exercise
a general supervision and direction over the affairs of the Trust. He shall have
the power to employ attorneys and counsel for the Trust and to employ such
subordinate officers, agents, clerks and employees as he may find necessary to
transact the business of the Trust. He shall also have the power to grant,
issue, execute or sign such powers of attorney, proxies or other documents as
may be deemed advisable or necessary in furtherance of the interests of the
Trust. The Chairman shall have such other powers and duties as, from time to
time, may be conferred upon or assigned to him by the Trustees.
Section 5. Powers and Duties of the President. In the absence
or disability of the Chairman, the President shall perform all the duties and
may exercise any of the powers of the Chairman, subject to the control of the
Trustees. The President shall perform such other duties as may be assigned to
him from time to time by the Trustees or the Chairman.
Section 6. Powers and Duties of Vice Presidents. In the
absence or disability of the President, the Vice President or, if there be more
than one Vice President, any Vice President designated by the Trustees shall
perform all the duties and may exercise any of the powers of the President,
subject to the control of the Trustees. Each Vice President shall perform such
other duties as may be assigned to him from time to time by the Trustees or the
President.
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7
Section 7. Powers and Duties of the Treasurer. The Treasurer
shall be the principal financial and accounting officer of the Trust. He shall
deliver all funds of the Trust which may come into his hands to such Custodian
as the Trustees may employ pursuant to Article X of these By-Laws. He shall
render a statement of condition of the finances of the Trust to the Trustees as
often as they shall require the same and he shall in general perform all the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the Trustees. The Treasurer shall give a bond for
the faithful discharge of his duties, if required so to do by the Trustees, in
such sum and with such surety or sureties as the Trustees shall require.
Section 8. Powers and Duties of the Secretary. The Secretary,
if any, shall keep the minutes of all meetings of the Trustees. He shall perform
such other duties and have such other powers in addition to those specified in
these By-Laws as the Trustees shall from time to time designate.
Section 9. Powers and Duties of Assistant Treasurer. In the
absence or disability of the Treasurer, any Assistant Treasurer designated by
the Trustees shall perform all the duties, and may exercise any of the powers of
the Treasurer. The Assistant Treasurer shall perform such other duties as from
time to time may be assigned to them by the Trustees. Each Assistant Treasurer
shall give a bond for the faithful discharge of his duties, if required so to do
by the Trustees, in such sum and with such surety or sureties as the Trustees
shall require.
Section 10. Powers and Duties of Assistant Secretaries. In the
absence or disability of the Secretary, any Assistant Secretary designated by
the Trustees shall perform all of the duties, and may exercise any of the powers
of the Secretary. The Assistant Secretaries shall perform such other duties as
from time to time may be assigned to them by the Trustees.
Section 11. Compensation of Officers and Trustees. Subject to
any applicable provisions of the declaration, the compensation of the officers
and Trustees shall be fixed from time to time by the Trustees or, in the case of
officers, by any Committee or officer upon whom such power may be conferred by
the Trustees. No officer shall be prevented from receiving such compensation as
such officer by reason of the fact that he is also a Trustee.
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8
ARTICLE VII
FISCAL YEAR
The fiscal year of the Trust shall be the calendar year.
ARTICLE VIII
SEAL
The Trustees may adopt a seal which shall be in such form and
shall have such inscription thereon as the Trustees may from time to time
prescribe.
ARTICLE IX
WAIVERS OF NOTICE
Whenever any notice whatever is required to be given by law,
the Declaration or these By-Laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto, unless the 1940 Act requires
otherwise. A notice shall be deemed to have been telegraphed, cabled or
telecopied for the purposes of these By-Laws when it has been delivered to a
representative of any telegraph, cable or telecopy company with instruction that
it be telegraphed, cabled or telecopied. Any notice shall be deemed to be given
at the time when the same shall be mailed, telegraphed, cabled or telecopied.
ARTICLE X
CUSTODIAN
Section 1. Appointment and Duties. The Trustees shall at all
times employ one or more Custodians meeting the requirements of the 1940 Act:
(1) to hold the securities owned by the Trust and
deliver the same upon written order;
(2) to receive and receipt for any monies due to the
Trust and deposit the same in its own banking department or elsewhere as the
Trustees may direct;
(3) to disburse such funds upon orders or vouchers;
<PAGE>
9
(4) if authorized by the Trustees, to keep the books
and accounts of the Trust and furnish clerical and accounting services; and
(5) if authorized to do so by the Trustees, to
compute the net income of the Trust;
all upon such basis of compensation as may be agreed upon between the Trustees
and such Custodian. If so directed by a Majority Shareholder Vote, the Custodian
shall deliver and pay over all property of the Trust held by it as specified in
such vote.
The Trustees may also authorize the Custodian to employ one or
more sub-Custodians from time to time to perform such of the acts and services
of the Custodian and upon such terms and conditions, as may be agreed upon
between the Custodian and such sub-Custodian and approved by the Trustees,
provided that in every case such sub-Custodian shall meet the requirements of
the 1940 Act.
The Trustees may employ any Investment Manager of the Trust to
serve as a Custodian provided that such Investment Manager meets the
requirements of this Section 1.
Section 2. Central Certificate System. Subject to such rules,
regulations and orders as the Commission may adopt, the Trustees may direct the
Custodian to deposit all or any part of the securities owned by the Trust in a
system for the central handling of securities established by a national
securities exchange or a national securities association registered with the
Commission under the Securities Exchange Act of 1934, or such other person as
may be permitted by the Commission, or otherwise in accordance with the 1940
Act, pursuant to which system all securities of any particular class or series
of any issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or its Custodian.
Section 3. Acceptance of Receipts in Lieu of Certificates.
Subject to such rules, regulations and orders as the Commission may adopt, the
Trustees may direct the Custodian to accept written receipts or other written
evidence indicating purchases of securities held in book-entry form in the
Federal Reserve System in accordance with regulations promulgated by the Board
of Governors of the Federal Reserve System and the local Federal Reserve Banks
in lieu of receipt of certificates representing such securities.
Section 4. Provisions of Custodian Contract. The following
provisions shall apply to the employment of a Custodian pursuant to this Article
X and to any contract entered into with the Custodian so employed:
<PAGE>
10
(a) The Trustees shall cause to be delivered to the
appropriate Custodian all securities owned by the Trust or to which it may
become entitled, and shall order the same to be delivered by the Custodian only
upon completion of a sale, exchange, transfer, pledge or other disposition
thereof, and upon receipt by the Custodian of the consideration therefor or a
certificate of deposit or a receipt of an issuer or of its Transfer Agent, all
as the Trustees may generally or from time to time require or approve, or to a
successor Custodian; and the Trustees shall cause all funds owned by the Trust
or to which it may become entitled to be paid to the Custodian, and shall order
the same disbursed only for investment against delivery of the securities
acquired, or in payment of expenses, including management compensation, and
liabilities of the Trust, including distributions to Shareholders, or to a
successor Custodian; provided, however, that nothing herein shall prevent
delivery of securities for examination to the broker selling the same in accord
with the "street delivery" custom whereby such securities are delivered to such
broker in exchange for a delivery receipt exchanged on the same day for an
uncertified check of such broker to be presented on the same day for
certification.
(b) In case of the resignation, removal or inability
to serve of any such Custodian, the Trust shall promptly appoint another bank,
trust company or other entity meeting the requirements of this Article X as
successor Custodian. The agreement with the Custodian shall provide that the
retiring Custodian shall, upon receipt of notice of such appointment, deliver
the funds and property of the Trust in its possession to and only to such
successor, and that, in the case of the assets of the Trust held in the United
States of America, pending appointment of a successor Custodian, or a vote of
the Shareholders to function without a Custodian, the Custodian shall not
deliver funds and property of the Trust to the Trust, but may deliver them to a
bank or trust company doing business in Boston, Massachusetts, New York, New
York, or Baltimore, Maryland, of its own selection, meeting the requirements for
a Custodian imposed by the 1940 Act, as the property of the Trust to be held
under terms similar to those on which they were held by the retiring Custodian.
ARTICLE XI
SALE OF SHARES OF THE TRUST
The Trustees may, by resolution adopted by a majority of the
Trustees in office, from time to time issue and sell or cause to be issued and
sold Shares for cash or other property, which shall in every case be paid or
delivered to the Custodian as agent of the Trust before the delivery of any
certificate for such shares. The Shares, including additional Shares which may
have been repurchased by the Trust (herein sometimes referred to as "treasury
shares"), may not be sold at less than the net asset value thereof (as defined
in Article XII hereof) determined by or on behalf of the Trustees as of a time
within forty-eight hours, excluding Sundays and
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11
holidays, next preceding the time of such determination, except (1) in
connection with an offering to the holders of Shares; (2) with the consent of a
majority of the holders of Shares; (3) upon conversion of a convertible security
in accordance with its terms; (4) upon the exercise of any warrant issued in
accordance with the provisions of Sec tion 18(d) of the 1940 Act; or (5) under
such other circumstances as the Commission may permit by rules and regulations
or orders for the protection of investors.
No Shares need be offered to existing Shareholders before
being offered to others. No Shares shall be sold by the Trust (although Shares
previously contracted to be sold may be issued upon payment therefor) below net
asset value during any period when the determination of net asset value is
suspended by declaration of the Trustees pursuant to the provisions of Article
XII hereof, unless in conformity with the 1940 Act. In connection with the
acquisition by merger or otherwise of all or substantially all the assets of an
investment company (whether a regulated or private investment company or a
personal holding company), the Trustees may issue or cause to be issued Shares
and accept in payment therefor such assets at not more than market value in lieu
of cash, notwithstanding that the federal income tax basis to the Trust of any
assets so acquired may be less than the market value, provided that such assets
are of the character in which the Trustees are permitted to invest the funds of
the Trust.
ARTICLE XII
NET ASSET VALUE OF SHARES
Section 1. Time of Determination. The net asset value of each
Share outstanding shall be determined by the Trustees on the last business day
(which term shall, whenever it appears in these By-Laws, be deemed to mean each
day when the Taiwan Stock Exchange is open for trading) of each week as of the
close of trading on the Taiwan Stock Exchange. The power and duty to determine
net asset value may be delegated by the Trustees from time to time to one or
more of the Trustees or officers of the Trust, or to such other party as the
Trustees may from time to time designate. The Trustees may also determine or
cause to be determined the net asset value as of any particular time in addition
to the closing time of such last business day. Such additional or interim
determination may be made either by appraisal or by calculation or estimate. Any
such calculation or estimate shall be based on changes in the market value of
representative or selected securities or on changes in recognized market
averages since the last closing appraisal, and made in a manner which in the
opinion of the Trustees will fairly reflect the changes in the net asset value.
At any time when the Taiwan Stock Exchange is closed (other than customary
weekend and holiday closings), or when the Trustees determine that available
market quotations of Trust assets do not adequately reflect their fair value,
the Trustees may cause the net asset value to be determined by appraising all
securities at last sale prices, or at not more than the current asked nor less
than the current bid prices, in the over-the-
<PAGE>
counter or other markets, and all other assets at fair value in the best
judgment of the Trustees, and otherwise proceeding as above stated.
Section 2. Suspension of Determination. The Trustees may
declare a suspension of the determination of net asset value except as
prohibited by the 1940 Act and rules, regulations and orders promulgated by the
Commission thereunder or by the regulatory authorities of the Republic of China.
Section 3. Computation. The net asset value of each Share as
of any particular time shall be computed in United States dollars on the basis
of accounting principles generally accepted in the United States and shall be
the quotient (adjusted to the nearer cent) obtained by dividing the value, as of
such time, of the net assets of the Trust (i.e., the value of the assets of the
Trust less its liabilities exclusive of capital and surplus) by the total number
of Shares outstanding (exclusive of treasury shares) at such time, all
determined and computed as follows:
A. The assets of the Trust shall be deemed to include (a) all
cash on hand, on deposit or on call, including any interest accrued thereon, (b)
all bonds, debentures, bills and notes and accounts receivable and other
evidences of indebtedness, (c) all shares of stock, subscription rights,
warrants and other securities, other than its own Shares, (d) all stock and cash
dividends or distributions receivable by the Trust which have been declared and
are ex-dividend to shareholders of record at or before the time as of which the
net asset value is being determined, (e) all interest accrued on any
interest-bearing securities owned by the Trust, and (f) all other property of
every kind and nature including prepaid expenses, the value of such assets to be
determined in the manner from time to time approved by the Trustees and intended
to reflect the fair value thereof. The Trustees or their agents shall be
entitled to rely on valuations provided by one or more pricing services approved
by the Trustees.
B. The liabilities of the Trust shall be deemed to include (a)
all bills, notes and accounts payable, (b) all administrative expenses payable
and/or accrued, (c) all contractual obligations for the payment of money or
property, including the amount of any unpaid dividends upon the Shares, declared
to Shareholders of record at or before the time as of which the net asset value
is being determined, (d) all reserves authorized or approved by the Trustees for
taxes or contingencies and (e) all other liabilities of the Trust of whatsoever
kind and nature except liabilities represented by outstanding Shares and capital
surplus of the Trust.
C. For the purpose of this Article XII
(i) Shares sold shall be deemed to become
outstanding immediately after the close of business on the day on which the
contract of sale is made, and the sale price thereof (less commission, if any,
and less any
<PAGE>
12
stamp or other tax payable by the Trust in connection with the issuance thereof)
shall thereupon be deemed an asset of the Trust.
(ii) Shares purchased by the Trust shall be
deemed to be outstanding at the close of business on the day as of which the
purchase price is determined, and thereafter they shall be deemed treasury stock
and, until paid, the price thereof shall be deemed to be a liability of the
Trust.
(iii) Credits and contractual obligations
payable to the Trust in foreign currency and liabilities and contractual
obligations payable by the Trust in foreign currency shall be taken at the
current cable rate of exchange as nearly as practicable at the time as of which
the net asset value is computed.
ARTICLE XIII
DIVIDENDS AND DISTRIBUTIONS
Section 1. Limitations on Distributions. Distributions to
Shareholders paid in respect of any one fiscal year shall, when and as declared
by the Trustees, be made in accordance with the policies stated in the Trust's
effective Registration Statement on Form N-2 with the commission.
Section 2. Distributions Payable in Cash or Shares. The
Trustees shall have power, to the fullest extent permitted by the laws of
Massachusetts but subject to the limitation as to cash distributions imposed by
Section 1 of this Article XIII, at any time or from time to time to declare and
cause to be paid distributions payable at the election of any of the
Shareholders (whether exercised before or after the declaration of the
distribution) either in cash or in Shares, provided that (except where the Trust
issues Shares below current market price in connection with any dividend
reinvestment plan of the Trust) the sum of (i) the cash distribution actually
paid to any Shareholder and (ii) the net asset value of the Shares which that
Shareholder elects to receive, in effect at such time as the Trustees may
specify, shall not exceed the full amount of cash to which that Shareholder
would be entitled if he elected to receive only cash. In the case of a
distribution payable in cash or Shares at the election of a Shareholder, the
Trustees may prescribe whether a Shareholder, failing to express his election
before a given time, shall be deemed to have elected to take Shares rather than
cash, or to take cash rather than Shares, or to take Shares with cash adjustment
of fractions.
Section 3. Stock Dividends. Anything in these By-Laws to the
contrary notwithstanding, the Trustees may at any time declare and distribute
pro rata among the Shareholders a "stock dividend" out of either authorized but
unissued Shares or treasury shares of the Trust or both.
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13
ARTICLE XIV
AMENDMENTS
These By-Laws, or any of them, may be altered, amended or
repealed, or new By-Laws may be adopted by a resolution adopted by a majority of
the Trustees in office, provided, however, that no By-Law may be amended,
adopted or repealed by the Trustees if such amendment, adoption or repeal
requires, pursuant to law or the provisions of the Declaration or these By-Laws
(if any), a vote of the Shareholders.
Response to Item 77Q2
---------------------
Compliance During 1997 With
Required Filings Pursuant to
Section 30(h) of the Investment Company Act
To the knowledge of The R.O.C. Taiwan Fund (the "Trust"), the
following individuals or organizations, which during 1997 were affiliated
persons (as defined in the Investment Company Act of 1940 (the "Investment
Company Act")) of International Investment Trust Company Limited (the
"Adviser"), did not make timely filings, or failed to make filings, required
during or with respect to 1997 by rules of the United States Securities and
Exchange Commission pursuant to Section 30(h) of the Investment Company Act,
with respect to holdings of, or transactions during 1997 or prior years in,
shares of the Trust:
(1) The Kuomintang, which controls Central Investment Holding Co.,
Ltd. ("CIHC"), an affiliated person of the Adviser through
direct or indirect control of 24.94% of the Adviser's
outstanding voting securities, has failed to make any filings
of Forms No. 3, 4 or 5. However, CIHC and Central Construction
Corporation, both of which are ultimately controlled by the
Kuomintang and have cross ownership with each other, did make
timely filings (or have provided statements in lieu of
required filings). In addition, if CIHC and the Kuomintang are
deemed to be controlling persons of the Adviser, then persons
controlled by CIHC or the Kuomintang would be required to file
statements on Forms 3, 4 and 5 with respect to ownership of,
or transactions in, shares of the Trust.
No such persons have made any such filings.
