<PAGE>
Semi-Annual Report
April 30, 1997
(Unaudited)
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
787 Seventh Avenue, New York, NY 10019
(800) 730-2932
INVESTMENT OBJECTIVE
Long term capital appreciation through investment primarily in equity
securities of Asian companies.
INVESTMENT ADVISER
Schroder Capital Management International Inc. (the "Investment Adviser") is
a wholly owned indirect subsidiary of Schroders plc, the London Stock Exchange
listed holding company parent of an investment banking and investment management
group of companies (the "Schroder Group") that dates its origins to 1804. The
investment management operations of the Schroder Group are located in 18
countries worldwide including 10 offices in Asia. The Schroder Group has been
managing international investment portfolios since the early years of this
century. As of March 31, 1997, the Schroder Group had over $150 billion in
assets under management. At that same date, the Investment Adviser, together
with its U.K. affiliate, Schroder Capital Management International Ltd., had
over $23 billion under management, of which approximately $10.1 billion was
invested in the Asian region.
June 15, 1997
Dear Stockholder:
We are pleased to present to you the 1997 semi-annual report of Schroder
Asian Growth Fund, Inc., (the "Fund") which covers the period November 1, 1996
through April 30, 1997. On April 30, 1997, the Fund's net asset value was $12.80
per share, total net assets were $206.1 million and the closing price on the New
York Stock Exchange was $11.375. For information on the Fund's performance,
please refer to the table on page 12 entitled "Financial Highlights".
During the period, the direction of interest rates, both within the region
and in the U.S. market, was a major factor affecting investor sentiment. In
addition, slower than expected Asian export growth remained a negative factor,
with the strength of the U.S. dollar continuing to influence regional
competitiveness. In Japan, the export sector broadly enjoyed the benefits of a
weaker yen, but domestic concerns that the economic recovery would prove
unsustainable prevented a broader based stock market rally.
Pursuant to the terms and conditions set forth in the Fund's Offer to
Purchase dated February 19, 1997, the Fund repurchased 3,500,000 of its shares
through a tender offer conducted during the first calendar quarter of 1997. The
Fund repurchased the shares for a total price of $45,640,000 or $13.09 per
share, the net asset value at March 31, 1997, leaving 16,107,100 shares issued
and outstanding. Following the expiration of the tender offer on March 20, 1997,
the Board of Directors determined, consistent with its obligations as set forth
in the Fund's prospectus dated December 22, 1993, that it would be appropriate
to take steps to give stockholders the opportunity to vote on possible
alternatives to annual tender offers as a means of addressing the shares' market
price discount to net asset value, including the option of converting to
open-end status.
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1
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SCHRODER ASIAN GROWTH FUND, INC.
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On June 4, 1997, the Fund issued a press release announcing that the Board
of Directors had determined at a quarterly meeting held on June 3, 1997, to
recommend to stockholders that the Fund be converted into an open-end structure.
Therefore, the Board of Directors has called a special meeting of stockholders
to be held on September 17, 1997 to vote on the open-ending proposal and other
related matters. The Board has fixed the close of business on July 18, 1997 as
the record date for determination of stockholders entitled to notice and to vote
at the special meeting. A proxy statement will be furnished to stockholders on
or about July 28, 1997.
We thank you for your support and interest in the Fund.
Sincerely,
[SIGNATURE] [SIGNATURE]
I. Peter Sedgwick Louise Croset
Chairman President
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2
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SCHRODER ASIAN GROWTH FUND, INC.
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MANAGEMENT DISCUSSION AND ANALYSIS
(FOR THE SIX MONTHS ENDED APRIL 30, 1997)
At the end of April 1997, the Fund was approximately 95.1% invested in
equity securities, 0.4% in convertible bonds and 4.5% in cash and other assets.
During the six month period, the Fund increased its weighting in HONG KONG.
The easing of interest rates in China has led to a recovery in economic
activity. In turn, this had a positive influence on the corporate sector in Hong
Kong, particularly services associated with the export sector. The market showed
little reaction to the death of Deng Xiaoping, and Jiang Zemin was clearly seen
as having consolidated his position as President. Demand within Hong Kong for
residential real estate remains robust and, as such, CHEUNG KONG (HOLDING) LTD.
was added to the portfolio. Companies with exposure to China's economy also
performed well during this period, and the Fund purchased NEW WORLD
INFRASTRUCTURE LTD. for its involvement in toll roads in Southern China. In
SINGAPORE, the economy recovered somewhat from the lows of last summer, with a
more positive trend seen in electronics related exports. Inflation remains
subdued and interest rates are low. However, real estate stocks were volatile in
response to changes in the government's public sector housing policy. In
MALAYSIA, corporate results announced during the period were comfortably in line
with expectations. Ample liquidity within the economy generally led to a strong
performance from the smaller capitalized companies, led by the retail sector.
Activity in the real estate sector was also robust. However, the central bank
raised concerns about economic overheating and imposed credit restrictions on
Malaysian banks. This had an immediate impact, with the market falling 11.2% in
April alone. Over the period our holdings have emphasized infrastructure and
consumer related sectors. In JAPAN, the export sectors performed strongly,
benefitting from a weaker yen. However, this performance was concentrated in a
limited number of blue-chip names, while more domestically oriented and, in
particular, small stocks continued to languish. Banks, which still comprise a
large part of the Fund's index, also performed poorly, as worries over bad debts
and capital adequacy resurfaced.
Among emerging markets, good returns were seen in both India and Indonesia
with valuations remaining attractive. In INDIA, the government passed a budget
which was well received by investors. The recent political problems caused by
the Congress Party's withdrawal of support for the government were resolved with
the appointment of a new Prime Minister and the passing of the budget. The Fund
has reduced its exposure to auto companies, such as BAJAJ AUTO LTD., which have
been adversely affected by a slow-down in industrial production. Following good
performance in the PHILIPPINES at the beginning of the period, the Fund reduced
its weighting due to increased fears of a collapse in the real estate market.
The Fund's holdings in AYALA LAND, INC. were therefore reduced. Indications of a
slowdown in the economy have also contributed to uncertainty about the market,
along with the fact that the majority of the Comprehensive Tax Reform Package
still has not been enacted. Investor confidence failed to return in THAILAND as
fears of a Baht devaluation and a crisis in the banking sector further lowered
sentiment. The general election saw the New Aspiration Party gain control, but
the party has had little success in bolstering the country's economy. Finally,
in KOREA, the recovery in global demand for electronics was a positive influence
and the Fund added to its holding in SAMSUNG ELECTRONICS CO. Exports, however,
were hurt by the weakness of the yen. Liquidity problems on the other hand, were
eased somewhat as foreign ownership limit expanded to 23%.
The Fund continues its investment strategy of maintaining a core portfolio
of equity securities in Asian companies that the Investment Adviser believes are
well-managed, fast growing, of high quality and likely to benefit from long-term
growth trends in each country and the region as a whole. Management continues to
hold a positive view of Hong Kong listed companies. The outlook for corporate
earnings growth is construtive, based on an improvement in China's economic
cycle and continued strength in Hong Kong's real estate sector. The June 30,
1997 transition from a colony of the U.K. to a Special Administrative Region of
the People's Republic of China is not generally expected to have a long-term
detrimental on the market. After the tightening of monetary policy in Malaysia,
our view is less optimistic in the short term, as we expect that the impact of
higher than expected interest rates will subdue corporate earnings growth.
However, the ongoing restructuring within the Malaysian financial sector is
positive for the longer term. At the same time, Malaysia's infrastructure
build-out continues. In
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3
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SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
Singapore, the economy is stabilizing and company valuation levels are
attractive. The Fund remains well exposed to the banking and real estate sector,
where the outlook for demand is positive. The outlook for the domestic economy
in Japan is also improving. The recent strengthening in the yen will tend to
shift investor attention away from the export sector, which has performed well,
towards companies with a domestic emphasis such as INABA DENKISANGYO CO., an
electrical equipment manufacturer. At the same time, we remain slightly cautious
on the emerging markets, as the loss of confidence in Thailand has spilled over
to the Philippines and, to a lesser extent, Indonesia. Indian valuations are
still attractive and earnings are being upgraded due to tax reforms in the
budget. However, after a very strong run in the first four months of this year,
the Fund recently began taking profits. Recent signs of the yen strengthening
against the U.S. dollar have also provided a more positive background for the
Korean market, which should also benefit from an expected recovery in exports in
the second half of the year.
DIVIDEND REINVESTMENT PLAN
The Fund offers you a plan for the reinvestment of your dividends and
capital gains distribution in shares of the Fund. If you wish to participate,
please contact the plan agent, State Street Bank and Trust Company, at
(800) 426-5523.
OTHER INFORMATION
The Fund's net asset value is published every Monday in THE WALL STREET
JOURNAL under the heading "Closed End Funds." The Fund's symbol is "SHF." The
Fund's net asset value is also published in THE NEW YORK TIMES and BARRON'S.
In addition, the Fund publishes a newsletter in the middle of each month,
containing country weightings and a market update. You can request a copy by
calling (800) 730-2932.
During the semi-annual period ended April 30, 1997, there have been (i) no
material changes in the Fund's investment objectives or policies that have not
been approved by shareholders; (ii) no changes in the Fund's Articles of
Incorporation; (iii) no changes in the principal risk factors associated with
investment in the Fund, and (iv) Louise Croset was named President and Director
of the Fund on January 16, 1997, replacing Laura Luckyn-Malone. Ms. Croset
joined SCMI in 1993 and is currently a first Vice President and Director of the
firm. She joined Heather F. Crighton, a Vice President of the Fund, as the
persons primarily responsible for the day-to-day management of the Fund.
On November 26, 1996, the Board of Directors amended the Bylaws of the Fund
in order to provide that (i) special meetings of stockholders still be called
upon the written request of not less than a majority (formerly 25%) of all the
votes entitled to be cast at such meeting, and (ii) committees of the Board of
Directors may consist of one or more (formerly, not less than two) of the
Directors. These amendments conform the Bylaws to recent changes in the Maryland
General Corporation Law. There were no other changes in the Bylaws during the
semi-annual period ended April 30, 1997.
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4
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SCHRODER ASIAN GROWTH FUND, INC.
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PORTFOLIO CHARACTERISTICS AS OF APRIL 30, 1997
INVESTMENT BY INDUSTRY
<TABLE>
<CAPTION>
INDUSTRY % OF NET ASSETS
<S> <C>
- -------------------------------------------------
Real Estate 22.3%
Services 20.4%
Finance 12.0%
Consumer Goods 11.0%
Energy 9.6%
Multi-Industry 9.3%
Capital Equipment 9.3%
Insurance 0.8%
Materials 0.8%
Cash 4.5%
- -------------------------------------------------
Total 100.0%
</TABLE>
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
SECURITY % OF NET ASSETS
<S> <C>
- ---------------------------------------------------
China Resources Enterprises Ltd.
(HK) 5.2%
Citic Pacific Ltd. (HK) 3.9%
Hutchinson Whampoa (HK) 3.8%
Sun Hung Kai Properties Ltd.
(HK) 3.6%
Guangdong Investments (HK) 3.2%
Huaneng Power International,
Ltd. (Chn) 2.8%
DCB Holdings Berhad (Mal) 2.6%
Island & Peninsular Berhard
(Mal) 2.6%
Mahanagar Telephone Nigam Ltd.
(Ind) 2.5%
Swire Pacific Ltd. `A' (HK) 2.5%
- ---------------------------------------------------
Total 32.7%
</TABLE>
COUNTRY WEIGHTINGS
<TABLE>
<CAPTION>
COUNTRY % OF NET ASSETS
<S> <C>
- -------------------------------------------------
</TABLE>
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5
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SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
<TABLE>
<S> <C>
Hong Kong 29.0%
Malaysia 15.5%
Singapore 10.7%
India 10.5%
Japan 7.5%
Indonesia 6.1%
Philippines 5.5%
Korea 4.3%
Thailand 3.0%
China 2.8%
Taiwan 0.6%
Cash 4.5%
- -------------------------------------------------
Total 100.0%
</TABLE>
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6
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SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
Schedule of Investments
April 30, 1997 (unaudited)
<TABLE>
<CAPTION>
COMMON STOCKS - 95.1%
SHARES VALUE US$
- --------- ------------
<C> <S> <C>
CHINA - 2.8%
UTILITIES ELECTRICAL & GAS - 2.8%
235,000 Huaneng Power International, Ltd. (a) *
(Cost $4,062,808) 5,698,750
------------
HONG KONG - 29.0%
BUILDING & CONSTRUCTION - 1.3 %
930,000 New World Infrastructure Ltd.
* 2,629,357
------------
CHEMICALS - 0.8%
3,160,000 Chen Hsong Holdings Ltd. 1,703,202
------------
HOLDING COMPANY - 3.2%
7,000,000 Guangdong Investments 6,551,769
------------
MULTI-INDUSTRY - 6.4%
1,508,000 Citic Pacific Ltd. 8,137,671
672,000 Swire Pacific Ltd. 'A' 5,183,579
------------
13,321,250
------------
REAL ESTATE - 13.5%
395,000 Cheung Kong Holdings Ltd. 3,467,596
5,180,000 China Overseas Land &
Investment Ltd. 2,925,704
3,894,000 China Resources Enterprise
Ltd. 10,758,017
686,000 Sun Hung Kai Properties Ltd. 7,439,194
825,000 Wharf (Holdings) Ltd. 3,120,643
------------
27,711,154
------------
SERVICES - 3.8%
1,070,000 Hutchison Whampoa 7,942,809
------------
TOTAL HONG KONG
(COST $40,228,334) 59,859,541
------------
INDIA - 10.5%
AUTOMOBILE - 1.1%
90,000 Bajaj Auto Ltd. 2,314,736
------------
BANKING - 0.7%
165,000 State Bank of India 1,484,677
------------
ENERGY - 1.2%
222,000 Bharat Petroleum Corporation
Ltd. 2,392,107
------------
HEALTH & PERSONAL CARE - 1.3%
148,000 Ranbaxy Laboratories Ltd. 2,692,415
------------
HOUSEHOLD PRODUCTS 2.0%
132,000 Hindustan Lever Ltd. 4,063,812
------------
LEISURE & TOURISM - 0.0%
175 Indian Hotels Co.,Ltd. 3,331
------------
MACHINERY & ENGINEERING - 0.0%
<CAPTION>
COMMON STOCKS
SHARES VALUE US$
- --------- ------------
<C> <S> <C>
INDIA (CONCLUDED)
227 Tata Engineering & Locomotive
Company Ltd. 2,578
------------
TELECOMMUNICATIONS - 4.2%
633,000 Mahanagar Telephone Nigam Ltd. 5,256,398
103,000 Videsh Sanchar Nigam Ltd. 3,462,161
------------
8,718,559
------------
TOTAL INDIA
(COST $16,797,706) 21,672,215
------------
INDONESIA - 6.1%
AUTOMOBILES - 0.7%
400,000 P.T. Astra International 1,465,624
------------
BANKING - 0.3%
830,000 P.T. Bank Internasional
Indonesia 597,983
------------
BEVERAGES & TOBACCO - 2.2%
874,000 P.T. Gudang Garam 3,670,152
215,000 P.T. Hanjaya Mandala Sampoerna 865,222
------------
4,535,374
------------
FOOD & HOUSEHOLD PRODUCTS - 1.9%
1,053,900 P.T. Indofood Sukses Makmur 2,180,258
210,780 P.T. Indofood Sukses Makmur,
rights (1) * 123,656
82,500 P.T. Unilever Indonesia 1,613,318
------------
3,917,232
------------
TELECOMMUNICATIONS - 1.0%
1,430,000 P.T. Telekomunikasi Indonesia 2,075,237
------------
TOTAL INDONESIA
(COST $9,626,240) 12,591,450
------------
JAPAN - 7.1%
BUILDING & CONSTRUCTION - 0.4%
73,000 Higashi Nihon House 719,240
------------
CAPITAL EQUIPMENT - 0.5%
118,000 Amada Metrecs Co. Ltd. 1,069,599
------------
ELECTRICAL EQUIPMENT - 0.8 %
100,000 Inaba Denkisangyo Co. 1,552,771
------------
FINANCE - 0.5%
57,500 Credit Saison Co., Ltd. 1,105,856
------------
INDUSTRIAL COMPONENTS - 2.7%
162,000 Glory Ltd. 2,936,865
50,000 Mabuchi Motors Co., Ltd. 2,534,090
------------
5,470,955
------------
</TABLE>
See accompanying notes to financial statements.
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6
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SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCKS
SHARES VALUE US$
- --------- ------------
JAPAN (CONCLUDED)
<C> <S> <C>
INSURANCE - 0.8%
364,000 Koa Fire & Marine Insurance
Co., Ltd. 1,707,102
------------
LEISURE & TOURISM - 0.5%
205,000 Airport Facilities Co., Ltd. 1,090,683
------------
MULTI-INDUSTRY - 0.7%
463,000 Hanshin Electric Railway 1,514,503
------------
RETAIL TRADE - 0.2%
60,000 Doshisha Co., Ltd. 477,654
------------
TOTAL JAPAN
(COST $22,883,174) 14,708,363
------------
KOREA - 4.3%
BANKING - 0.6%
82,479 Shinhan Bank (2) 1,178,060
------------
ELECTRONICS - 0.8%
22,413 Samsung Electronics Co. (2) 1,693,970
------------
METALS-STEEL - 0.3%
8,000 Pohang Iron & Steel Co., Ltd.
(2) 566,112
------------
TELECOMMUNICATIONS - 1.7%
45,830 SK Telecom Co. Ltd. (2) 3,663,104
------------
UTILITIES ELECTRICAL & GAS - 0.9%
62,000 Korea Electric & Power Corp.
(2) 1,853,034
------------
TOTAL KOREA
(COST $11,662,847) 8,954,280
------------
MALAYSIA - 15.5%
BANKING - 5.1%
1,668,000 DCB Holdings Berhad 5,416,016
514,000 Malayan Banking Berhad 5,119,522
------------
10,535,538
------------
BEVERAGES & TOBACCO - 0.2%
100,000 Fraser & Neave Ltd. 494,024
------------
CAPITAL EQUIPMENT - 1.0%
570,000 Gamuda Berhad 2,055,179
------------
CONSUMER NON-DURABLE - 0.8%
820,000 R.J. Reynolds Berhad 1,666,135
------------
DIVERSIFIED INDUSTRIALS - 2.1%
615,000 United Engineers (Malaysia)
Ltd. 4,361,355
------------
ENERGY - 2.2%
978,000 Tenaga Nasional Berhad 4,519,841
------------
LEISURE & TOURISM - 1.5%
561,500 Genting Berhad 2,997,649
------------
<CAPTION>
COMMON STOCKS
SHARES VALUE US$
- --------- ------------
<C> <S> <C>
MALAYSIA (CONCLUDED)
REAL ESTATE - 2.6%
1,614,000 Island & Peninsular Berhad 5,369,283
------------
TOTAL MALAYSIA
(COST $30,767,668) 31,999,004
------------
PHILIPPINES - 5.5%
BANKING - 1.1%
110,000 Metropolitan Bank & Trust Co. 2,254,269
------------
REAL ESTATE - 2.3%
4,758,368 Ayala Land, Inc. 'B' 3,431,081
3,526,500 C&P Homes Inc. 1,338,330
------------
4,769,411
------------
TELECOMMUNICATION - 0.8%
30,170 Philippine Long Distance
Telephone 1,723,182
------------
UTILITIES ELECTRICAL & GAS - 1.3%
412,550 Manila Electric Co. 'B' 2,567,674
------------
TOTAL PHILIPPINES
(COST $11,159,610) 11,314,536
------------
SINGAPORE - 10.7%
BANKING - 2.8%
480,000 Overseas Union Bank Ltd. 3,153,527
287,880 United Overseas Bank Ltd. 2,707,585
------------
5,861,112
------------
BEVERAGES & TOBACCO - 0.4%
110,000 Fraser & Neave Ltd. 798,755
------------
BROADCASTING & PUBLISHING - 2.3%
253,200 Singapore Press Holdings Ltd. 4,692,780
------------
MACHINERY & ENGINEERING - 1.6%
760,000 Keppel Corp., Ltd. 3,311,203
------------
REAL ESTATE - 3.6%
522,000 City Developments Ltd. 4,223,651
956,000 DBS Land Ltd. 3,094,108
------------
7,317,759
------------
TOTAL SINGAPORE
(COST $20,474,417) 21,981,609
------------
TAIWAN - 0.6%
TRANSPORT-MARINE - .6%
86,000 Yang Ming Marine Transport
(b)* (Cost $1,001,040) 1,161,000
------------
</TABLE>
See accompanying notes to financial statements.
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7
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
COMMON STOCKS
SHARES VALUE US$
- --------- ------------
<C> <S> <C>
THAILAND - 3.0%
BANKING - 0.3%
107,200 Thai Farmers Bank Ltd. 648,950
48,337 Thai Farmers Bank Ltd.,
warrants (3)* 35,188
------------
684,138
------------
REAL ESTATE - 0.4%
270,000 Land & House Corp., Ltd. 770,690
------------
TELECOMMUNICATIONS - 1.0%
197,000 Total Access Communication
Co., Ltd. 1,014,550
630,000 TelecomAsia Public Co., Ltd.* 953,448
------------
1,967,998
------------
UTILITIES ELECTRICAL & GAS - 1.3%
997,200 Electricity Generating Public
Co., Ltd. 2,674,483
------------
TOTAL THAILAND
(COST $11,541,639) 6,097,309
------------
TOTAL COMMON STOCKS
(COST $180,205,483) 196,038,057
------------
<CAPTION>
CONVERTIBLE BONDS - 0.4%
PRINCIPAL
AMOUNT
(000) VALUE US$
- --------- ------------
<C> <S> <C>
JAPAN - 0.4%
MERCHANDISING - 0.4%
CHF 1,100 Arcland Sakamoto .125%
2/20/98 (Cost $797,448) 713,170
------------
SHORT-TERM INVESTMENT - 2.9%
REPURCHASE AGREEMENT - 2.9%
US$ 6,000 With Chase Securities
Incorporated dated 4/30/97
5.35%, due 5/01/97
(repurchase proceeds
$6,000,892); collateralized
by: $4,420,000 US. Treasury
Bond, 10.625%, due 8/15/15
(value $6,121,700) (Cost
$6,000,000) 6,000,000
------------
TOTAL INVESTMENTS
(COST $187,002,931) - 98.4% 202,751,227
Other assets less
liabilities - 1.6% 3,396,070
------------
Net Assets - 100% $206,147,297
------------
------------
</TABLE>
* Non-income producing security
(a) American Depositary Receipt.
(b) Global Depositary Receipt.
(1) The rights enable the holder to subscribe to one share for every right held
at IDR 3,300 per share until 5/27/97.
(2) Priced at fair value as determined by the Investment Advisor and approved by
the Board of Directors.
(3) The warrants enable the holder to subscribe to one share for every warrant
held at THB 200 per share. The warrants can be exercised yearly on 3/15,
6/15, 9/15 and 12/15 until 9/15/02.
Percentages are based on net assets.
CHF - Swiss Franc.
IDR - Indonesian Rupiah
THB - Thai Baht
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
8
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments in securities, at value (cost $187,002,931) $ 202,751,227
Cash 4,191,271
Foreign currency, at value (cost $134,893) 134,893
Receivable for securities sold 511,781
Receivable for dividends 248,521
Receivable for interest 17,961
Deferred organization expenses 56,697
Prepaid expenses 16,653
-------------
Total Assets 207,929,004
-------------
LIABILITIES:
Payable for securities purchased 736,779
Estimated tax liability on Indian investments (Note 5) 530,016
Investment advisory fee payable 173,475
Accrued tender offer expense payable 111,599
Administration fee payable 43,369
Unrealized depreciation on forward foreign currency
contracts 490
Accrued expenses payable and other liabilities 185,979
-------------
Total Liabilities 1,781,707
-------------
Net Assets $ 206,147,297
-------------
-------------
NET ASSETS WERE COMPOSED OF:
Capital Stock, par value ($.01 per share, applicable to
16,107,100 shares issued: authorized 100,000,000
shares) $ 161,071
Paid-in-capital in excess of par 271,415,768
Treasury Stock at cost (45,640,000)
Net investment loss (741,622)
Accumulated net realized losses from investments (34,171,916)
Net unrealized appreciation of investments (net of
estimated tax liability on Indian investments of
$530,016 -
See Note 5) 15,218,280
Accumulated net realized losses from foreign currency
transactions and forward currency contracts (91,759)
Net unrealized depreciation on translation of assets and
liabilities in foreign currencies and forward foreign
currency contracts (2,525)
-------------
Net Assets $ 206,147,297
-------------
-------------
Net asset value per share ($206,147,297
divided by 16,107,100 shares outstanding) $ 12.80
-------------
-------------
</TABLE>
See accompanying notes to financial statements.
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9
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 1997 (UNAUDITED)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $151,140) $ 897,041
Interest and discount earned 414,096
------------
Total Investment Income 1,311,137
------------
EXPENSES:
Investment advisory fee 1,274,747
Administration fee 318,688
Custodian's fees and expenses 156,514
Reports to shareholders 54,035
Transfer agent's fees and expenses 53,921
Directors' fees and expenses 41,896
Indian investments tax expense (Note 5) 39,434
Legal fees and expenses 35,905
Insurance expense 26,428
Independent accountants' fees and expenses 18,831
Amortization of deferred organization expenses 16,851
Registration fees 12,030
Miscellaneous expenses 3,491
------------
Total Expenses 2,052,771
------------
NET INVESTMENT LOSS (741,634)
------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS:
Net realized loss from:
Investments (2,129,278)
Foreign currency transactions and forward foreign currency
contracts (91,759)
Net change in unrealized appreciation (depreciation) on:
Investments (net of estimated tax liability on Indian
investments of $530,016 - Note 5) (983,569)
Translation of assets and liabilities in foreign currencies
and forward foreign currency contracts (72)
------------
NET REALIZED AND UNREALIZED LOSS FROM INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS (3,204,678)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (3,946,312)
------------
------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE YEAR
1997 ENDED OCTOBER 31,
(UNAUDITED) 1996
<S> <C> <C>
- ---------------------------------------------------------------------------------
INCREASE(DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment loss $ (741,634) $ (508,543)
Net realized gain (loss) from investment
transactions (2,129,278) 21,946
Net realized gain (loss) from foreign
currency transactions and forward
foreign currency contracts (91,759) 2,568,860
Net change in unrealized appreciation on
investments (net of estimated tax
liability on Indian investments of
$530,016 and $266,350, respectively -
Note 5) (983,569) 8,574,019
Net change in unrealized appreciation
(depreciation) on translation of assets
and liabilities in foreign currencies
and forward foreign currency contracts (72) (245,390)
------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS (3,946,312) 10,410,892
------------- -----------------
DIVIDENDS TO SHAREHOLDERS:
Investment income-net (1,826,573) -
------------- -----------------
CAPITAL STOCK TRANSACTIONS (NOTE 6):
Tender offer resulting in the redemption
of 3.5 million shares of common stock (45,640,000) -
Tender offer costs charged to
paid-in-capital in excess of par (284,530) (53,304)
------------- -----------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (51,697,415) 10,357,588
------------- -----------------
NET ASSETS:
Beginning of period 257,844,712 247,487,124
------------- -----------------
End of period (including undistributed
(accumulated) investment income (loss)
of $(741,622) and $1,826,585 for the
six months ended April 30, 1997 and for
the year ended October 31, 1996,
respectively) $206,147,297 $ 257,844,712
------------- -----------------
------------- -----------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Selected Per Share Data and Ratios:
<TABLE>
<CAPTION>
FOR THE SIX FOR THE FOR THE DECEMBER 30,
MONTHS ENDED YEAR ENDED YEAR ENDED 1993* TO
APRIL 30, 1997 OCTOBER 31, OCTOBER 31, OCTOBER 31,
(UNAUDITED) 1996 1995 1994
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $ 13.15 $ 12.62 $ 13.84 $ 14.01**
Investment Operations:
Net investment income (loss) (0.05) (0.03) 0.02 (0.01)
Net realized and unrealized gain
(loss) on investments (net of
estimated tax liability on
Indian investments) and foreign
currencies and forward currency
contracts (0.19) 0.56 (1.24) (0.16)
------- ----------- ----------- -------
Total from investment operations (0.24) 0.53 (1.22) (0.17)
------- ----------- ----------- -------
Less dividends from net investment
income (0.09) -- -- --
------- ----------- ----------- -------
Capital charge with respect to
tender offer (0.02) -- -- --
------- ----------- ----------- -------
Net asset value, end of period $ 12.80 $ 13.15 $ 12.62 $ 13.84
------- ----------- ----------- -------
------- ----------- ----------- -------
Market value, end of period $ 11.375 $ 12.00 $ 11.125 $ 12.00
------- ----------- ----------- -------
------- ----------- ----------- -------
Total investment return based on
(1):
Market value (4.48)% 7.87% (7.29)% (20.00)%
------- ----------- ----------- -------
------- ----------- ----------- -------
Net asset value (1.91)% 4.20% (8.82)% (1.21)%
------- ----------- ----------- -------
------- ----------- ----------- -------
Ratio/Supplementary Data:
Net assets, end of period
(Millions) $ 206.15 $ 257.84 $ 247.49 $ 271.42
Ratio of expenses to average net
assets 1.62%*** 1.57% 1.65% 1.59%***
Ratio of expenses to average net
assets excluding Indian tax
expense 1.59%*** 1.57% 1.65% 1.59%***
Ratio of net investment income
(loss) to average net assets (0.59)%*** (0.19)% 0.12% (0.10)%***
Portfolio turnover rate 12.74% 34.71% 66.79% 19.76%
Average commission rate per
share**** $ 0.0164 $ 0.0224 N/A N/A
</TABLE>
* Commencement of investment operations.
** Net of $.09 offering expenses.
*** Annualized.
**** For fiscal years beginning on or after September 1, 1995, a fund is
required to disclose its average commission rate per share for trades on
which a commission is charged.
(1) Total investment return is calculated assuming a purchase of common
stock on the opening of the first day and a sale on the closing of the last
day of each period reported. Dividends and distributions, if any, are
assumed for the purposes of this calculation, to be reinvested at prices
obtained under the Fund's dividend reinvestment plan. Total investment
return does not reflect brokerage commissions. Generally, total investment
return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount
or a decrease in the premium of the market value to the net asset value from
the beginning to the end of such periods. Conversely, total investment
return based on net asset value will be lower than total investment return
based on market value in periods where there is a decrease in the discount
or an increase in the premium of the market value to the net asset value
from the beginning to the end of such periods. Total investment returns for
periods of less than one full year are not annualized.
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES:
Schroder Asian Growth Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as a
non-diversified, closed-end management investment company. The Fund was
incorporated in Maryland on November 5, 1993 and investment operations
commenced on December 30, 1993. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements.
SECURITY VALUATION
Portfolio securities listed or traded on a recognized stock exchange or
NASDAQ National Market System are valued at the last reported sales price on
the exchange on which the securities are principally traded. Other
securities for which market quotations are readily available are valued at
the last sales price prior to the time of determination. If there is no
sales price on such date, and if bid and asked quotations are available,
such securities are valued at the mean between the last current bid and
asked prices. The value of a foreign security is determined in its national
currency as of 9:00 a.m., New York time, and that value is then converted
into its U.S. dollar equivalent on the day of valuation as of 11:30 a.m.,
New York time. Securities for which market quotations are not readily
available, and securities for which, in the judgment of the Adviser, the
prices or values available do not represent the fair value of the
instrument, are valued at fair value, pursuant to the Fund's pricing
procedures as determined by the Adviser and approved in good faith by the
Board of Directors. In determining the fair value of such securities, the
Adviser and the Board consider all relevant information, including but not
limited to types of securities, current financial and market information and
restrictions on dispositions. The values assigned to the securities holdings
do not necessarily represent amounts which might ultimately be realized upon
their sale or other disposition, since such amounts depend on future
circumstances and cannot reasonably be determined until the actual
disposition occurs. However, because of the inherent uncertainty of such
valuations, those estimated values may differ significantly from the values
that would have been used had a ready market for the investments existed,
and the differences could be material. At April 30, 1997, the portfolio
contained five securities for which market quotations were not readily
available and which were fair valued pursuant to the Fund's procedures.
These securities had a total value of $8,954,280 representing 4.3% of the
Fund's net assets.
The Fund may enter into repurchase agreements whereby the Fund, through
its custodian, receives delivery of the underlying securities. The
underlying collateral is valued daily on a marked-to-market basis to assure
that the value, including accrued interest, is at least equal to the
repurchase price.
In the event of a default of the obligation to repurchase, the Fund has
the right to liquidate the collateral and apply the proceeds in satisfaction
of the obligation. If the seller defaults and the value of the collateral
declines, realization of the collateral by the Fund may be delayed or
limited.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on trade date. Dividend income is
recorded on the ex-dividend date except for certain dividends from foreign
securities which are recorded as soon as the Fund is informed of the
ex-dividend date. Interest income (including accretion of discount) is
recorded on the accrual basis. Realized gains and losses from security
transactions are determined on the identified cost basis.
FOREIGN CURRENCY TRANSLATION
Foreign currency amounts denominated in or expected to settle in foreign
currencies ("FC") are translated into U.S. dollars on the following basis:
market value of investment securities and other assets and liabilities at
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the rate of exchange at the end of the respective period, purchases and
sales of investment securities and income and expenses at the rate of
exchange prevailing on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from the investment.
Reported net realized foreign exchange gains or losses arise from sales
of portfolio securities, sales and maturities of short-term securities,
sales of FCs, currency gains or losses realized between the trade and
settlement dates on securities transactions, the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise
from changes in the value of assets and liabilities other than investments
in securities at fiscal year end, resulting from changes in the exchange
rate.
DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions payable by the Fund, if any, are accrued on
the ex-dividend date. Dividends from net investment income and capital gain
distributions are determined in accordance with U.S. Federal income tax
regulations, which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for foreign
currency transactions. At October 31, 1996, the Fund increased
paid-in-capital by $233,732, increased net investment income by $2,335,128
and decreased accumulated realized gains from foreign currency transactions
and forward foreign currency contracts by $2,568,860. Net assets were not
affected by the reclassification.
FORWARD FOREIGN CURRENCY CONTRACTS
The Fund may enter into forward contracts to purchase or sell foreign
currencies to protect against the effect of possible adverse movements in
foreign exchange rates on the U.S. dollar value of the underlying portfolio.
Risks associated with such contracts include the movement in value of the
foreign currency relative to the U.S. dollar and the ability of the
counterparty to perform. Forward currency contracts are valued at the
forward rate and are marked-to-market weekly. Fluctuations in the value of
such contracts are recorded as unrealized gains or losses; realized gains or
losses include net gains or losses on contracts which have terminated by
settlement.
ORGANIZATIONAL COSTS
Costs incurred by the Fund in connection with its organization and
initial registration are being amortized on a straight line basis over a
five-year period from the commencement of investment operations.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenue and expenses during the
reporting period. Actual results could differ from those estimates.
2. PURCHASES AND SALES OF SECURITIES:
The aggregate cost of securities purchased and the proceeds from sales
of securities, excluding short-term investments, for the six months ended
April 30, 1997 were $30,218,287 and $82,970,229, respectively.
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. FORWARD FOREIGN CURRENCY CONTRACTS AS OF APRIL 30, 1997:
<TABLE>
<CAPTION>
UNREALIZED
CURRENCY TO SETTLEMENT IN EXCHANGE DEPRECIATION
DELIVER DATE FOR VALUE ($) ($)
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
OPEN CURRENCY TRANSACTIONS
Thai Baht THB 13,357,488 5/06/97 $ 511,291 $ 511,781 $(490)
------
Total $(490 )
------
------
</TABLE>
4. INVESTMENT ADVISORY AND ADMINISTRATIVE AGREEMENTS AND OTHER TRANSACTIONS
WITH AFFILIATES:
The Fund retains Schroder Capital Management International Inc. as
Investment Adviser. The investment advisory agreement, as amended on May 16,
1996, provides for a monthly fee at an annual rate of (1) 1.00% of the
Fund's average weekly net assets up to and including $300 million, and (2)
0.85% of the Fund's average weekly net assets in excess of $300 million. The
Fund paid or accrued fees to the Investment Adviser of $1,274,747 for the
six months ended April 30, 1997.
The Fund retains Princeton Administrators, L.P. as the Administrator.
Pursuant to the administration agreement, as amended on May 16, 1996, the
Administrator receives a monthly fee equal to the greater of (a) $150,000
per annum or (b) an annual rate of (1) 0.25% of the Fund's average weekly
net assets up to and including $300 million, and (2) 0.22% of the Fund's
average weekly net assets in excess of $300 million. The Fund paid or
accrued fees to the Administrator of $318,688 for the six months ended April
30, 1997.
5. FEDERAL INCOME TAXES:
Since it is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its stockholders, no
Federal income tax provision is required.
For Federal income tax purposes, the tax basis of investment securities
owned is $187,002,931. At April 30, 1997, net unrealized appreciation on
investments was $15,748,296. This consisted of aggregate gross unrealized
appreciation for all securities in which there was an excess of market value
over tax cost was $40,052,215 and aggregate gross unrealized depreciation
for all securities in which there was an excess of tax cost over market
value was $24,303,919.
For Federal income tax purposes, the Fund had a capital loss carry
forward as of October 31, 1996 of $32,042,638 ($5,994,149 expiring in 2002
and $26,048,489 expiring in 2003) which is available to offset future
capital gains, subject to limitations imposed under the Internal Revenue
Code.
Under the applicable foreign tax law, a withholding tax may be imposed
on interest, dividends, and capital gains at various rates. Indian tax
regulations require that taxes be paid on capital gains realized by the
Fund. At April 30, 1997, the Fund decreased net unrealized appreciation by
the estimated tax liability attributable to Indian investments of $530,016.
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- ------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
6. CAPITAL STOCK:
There are 100,000,000 shares of $.01 par value common stock authorized.
There are 16,107,100 shares outstanding as of April 30, 1997.
On February 18, 1997, the Fund's Board of Directors approved a tender
offer (the "Tender Offer") to shareholders to purchase up to 3.5 million
shares of outstanding common stock. The offer commenced on February 19, 1997
and expired on March 20, 1997. The Fund received tenders representing
13,278,466 shares of common stock. Pursuant to the terms of the offer, the
Fund determined to accept 3.5 million common shares. As a result of the
Tender Offer, the Fund purchased 3.5 million shares for a total of
$45,640,000.
As of April 30, 1997, costs incurred in connection with the tender offer
in the amount of $284,530 have been charged to paid-in-capital in excess of
par.
- --------------------------------------------------------------------------------
16
<PAGE>
DIRECTORS
Louise Croset, President
Madelon DeVoe Talley
Peter E. Guernsey
John I. Howell
William L. Means
David Salisbury
I. Peter Sedgwick, Chairman
OFFICERS
Louise Croset
President
Heather F. Crighton
Vice President
Catherine A. Mazza
Vice President
Mark J. Smith
Vice President
Margaret H. Douglas-Hamilton
Secretary
Robert Jackowitz
Treasurer
Alexandra Poe
Assistant Secretary
INVESTMENT ADVISOR
Schroder Capital Management International Inc.
787 Seventh Avenue 34th Floor
New York, NY 10019
ADMINISTRATOR
Princeton Administrators, L.P.
P.O. Box 9085
Princeton, NJ 08543-9085
INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P.
1301 Avenue of the Americas
New York, NY 10019
NYSE Symbol: SHF
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
This report is sent to the stockholders of the Fund for their information. It is
not a prospectus, circular or representation intended for use in the purchase or
sale of shares of the Fund or of any securities.
The accompanying financials as of April 30, 1997 were not audited and,
accordingly no opinion is expressed on them.
