<PAGE>
----------------------------------------------------------
MORGAN STANLEY
DEAN WITTER
ASIA-PACIFIC
FUND, INC.
----------------------------------------------------------
ANNUAL REPORT
DECEMBER 31, 1999
MORGAN STANLEY DEAN WITTER
INVESTMENT MANAGEMENT INC.
INVESTMENT ADVISER
MORGAN STANLEY DEAN WITTER
ASIA-PACIFIC FUND, INC.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DIRECTORS AND OFFICERS
Barton M. Biggs
CHAIRMAN OF THE BOARD
OF DIRECTORS
Michael F. Klein
PRESIDENT AND DIRECTOR
Peter J. Chase
DIRECTOR
John W. Croghan
DIRECTOR
David B. Gill
DIRECTOR
Graham E. Jones
DIRECTOR
John A. Levin
DIRECTOR
William G. Morton, Jr.
DIRECTOR
Stefanie V. Chang
VICE PRESIDENT
Harold J. Schaaff, Jr.
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Mary E. Mullin
SECRETARY
Belinda A. Brady
TREASURER
Robin L. Conkey
ASSISTANT TREASURER
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
INVESTMENT ADVISER
Morgan Stanley Dean Witter Investment Management Inc.
1221 Avenue of the Americas
New York, New York 10020
- --------------------------------------------------------------------------------
ADMINISTRATOR
The Chase Manhattan Bank
73 Tremont Street
Boston, Massachusetts 02108
- --------------------------------------------------------------------------------
CUSTODIAN
The Chase Manhattan Bank
3 Chase MetroTech Center
Brooklyn, New York 11245
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
(800) 278-4353
- --------------------------------------------------------------------------------
LEGAL COUNSEL
Rogers & Wells LLP
200 Park Avenue
New York, New York 10166
- --------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
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- --------------------------------------------------------------------------------
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.msdw.com/institutional/investmentmanagement.
<PAGE>
LETTER TO SHAREHOLDERS
- ---------
For the year ended December 31, 1999, the Morgan Stanley Dean Witter
Asia-Pacific Fund, Inc. (the "Fund") had a total return, based on net asset
value per share, of 75.39% compared to 54.79% for its benchmark (described
below). For the period from the Fund's commencement of operations on August 2,
1994 through December 31, 1999, the Fund's total return, based on net asset
value per share, was 28.48% compared with 2.15% for the benchmark. The benchmark
for the Fund is comprised of two Morgan Stanley Capital International (MSCI)
indices; Japan and All-Country Asia-Pacific Free ex-Japan, with each index
weighted equally. On December 31, 1999, the closing price of the Fund's shares
on the New York Stock Exchange was $11 13/16, representing a 22.6% discount to
the net asset value per share.
ASIA EX-JAPAN
Most of the markets in the benchmark rose in 1999. Continuing a trend that
started mid-year, performance at the country level varied more than during the
first half of the year. Echoing trends in the developed markets, technology and
telecommunications stocks, particularly mobile telecommunications, tended to
outperform while banks, manufacturers and other "Old Economy" stocks generally
lagged.
Most Asian markets performed well during the year due to higher than expected
economic growth and corporate earnings and continued positive liquidity
conditions. During the first half of the year market breadth was very strong
with most sectors participating in the rallies. Breadth narrowed during the
fourth quarter in line with the global pattern and outperformers were typically
technology or telecommunications related. Overall market valuations as of year
end were at fairly high multiples relative to historical norms of most markets
but the outlook for corporate earnings in 2000 remains quite strong. Economic
growth expectations have been upgraded significantly across Asia, although the
rate of change of improvement will slow in 2000 as low base effects drop out.
Korea has led the growth revival, but laggard economies like Hong Kong and
Thailand demonstrated faster growth trends in the third and fourth quarters as
well. Currencies were stable compared to the U.S. dollar but there is pressure
on some currencies to appreciate, particularly if the yen remains relatively
strong.
Most countries in the region reported increases in exports of electronics
components during 1999. This growth has contributed significantly to GDP growth
upgrades in Taiwan, South Korea, Singapore and Malaysia. Global price pressures
have forced manufacturers to cut costs, which often means sourcing more from
low-cost Asian producers. The trend towards greater outsourcing, firmly
established among American companies, is being adopted by an increasing number
of Japanese companies. Outsourcing is also broadening from the personal computer
supply chain to include other technology applications including
telecommunications. The Fund has a significant exposure to a number of Asian
electronics companies in Taiwan, Korea, Singapore and Thailand, and these
investments performed well as order books gained momentum.
Trends which need to be monitored include U.S. monetary tightening, domestic
pressures for higher interest rates in a number of Asian countries, possible
negative terms of trade conditions if oil prices maintain current strength and a
heavy calendar of new Asian equity issues in 2000. Most markets performed well
despite the headwinds of rising global interest rates in 1999 given limited
foreign debt financing needs and healthy domestic liquidity. The U.S. current
account deficit is a significant issue for the global economy; a best case
scenario would be a gradual slowdown in the growth of U.S. consumption
accompanied by accelerated growth in demand in Europe, Japan and the rest of
Asia. The rise in the price of oil is similar to a tax hike for most of Asia;
Indonesia and Malaysia are the only net beneficiaries of higher prices. Japanese
economic recovery is very positive for Asia and Japanese corporate restructuring
opens up new opportunities for outsourcing across a range of manufacturing
industries. Political factors to watch in 2000 include parliamentary or
presidential elections in Korea, Taiwan and Thailand, although we currently do
not expect major market risks from these events. We expect that the bulk of
market returns in 2000 will be generated through earnings growth rather than
further multiple expansion. Asian markets have stabilized after the economic
crisis conditions of 1997 and 1998 and interest rates have fallen back to normal
levels. We expect strong earnings growth from many companies. We will also
continue to invest in corporate restructuring stories, as restructuring received
added impetus from the crisis and should lead to higher sustainable returns on
capital in the future.
We expected Y2K concerns to affect liquidity in the fourth quarter but the
millennium date change turned out to be a `non-event'. Going forward we think
that the outlook for non-Japan Asia as an asset class continues to be positive.
While the risks from a volatile U.S. market and a Fed tightening are well known,
Asia is likely to weather that trend much better. The restructuring undertaken
by Asian companies over the last 2 years should enable the return on equity for
the region to exceed historic levels over the next 3 years. This shift upwards
is more likely to be structural than cyclical. The strategy of focusing on stock
selection, with an emphasis on attractively valued companies that should exceed
consensus expectations, remains unchanged.
JAPAN
The Japanese equity market rose during 1999 to levels last seen in 1992. This
rally was largely a result of the Bank of Japan's "0" interest rate policy, $74
billion of public funds to support non-performing loans held by Japanese banks
and the $200 billion loan facility for medium and small com-
2
<PAGE>
panies in Japan. In addition, the consecutive rise in the first and second
quarter GDP added fuel to the growing optimism for Japan's economic recovery and
foreign investors purchased a record $100 billion of Japanese equities during
the year. As with most global markets there was myopic focus on "New Japan"
companies including spectacular rises in telecommunications, internet and other
technology related industries. "Old Japan" companies, including Sony, NEC,
Fujitsu and Kyocera also rose to all-time highs during 1999.
Restructuring was one of the important themes in 1999 and local Merger &
Acquisition (M&A) activity rose sharply as companies began divesting business
not part of their core competency. Major banks, such as IBJ, DKB and Fuji
announced mergers while Hitachi and NEC - once fierce competitors - announced
tie-ups in D-ram production. Unprecedented deregulation during the year in
brokerage, insurance, airlines and banking also transformed Japan from an
insular country to one more "free, fair and global." All this was a powerful
recipe for a hibernating stock market and local individual investors returned to
the market after a ten year absence driving the OTC Index up over 300% during
the year. The huge net buying by foreigners of Japanese equities created demand
greatly exceeding the $40 billion of "cross-holdings" sales by domestic
institutions during the year.
In the second half of 1999, the yen rose sharply on expectations of a stronger
Japan, temporarily slowing the market's rise. Despite a strong yen, however,
international blue chips such as Sony, Fujitsu, NEC and Rohm rose to all time
highs; such companies have significantly increased overseas production since
1995 and appear to be less subject to currency volatility. While these stocks
contributed to the Fund's performance, seldom have we seen such a narrowly
concentrated market in approximately one dozen companies producing such outsized
gains in such a short period.
The cyclical recovery, which began in 1999, will likely continue in 2000
supported by the $180 billion supplementary budget announced in November
effective this April. In addition, with both a general election and a Summit
Meeting scheduled later this year Japanese authorities seem determined to
stimulate a sustainable secular recovery led by domestic growth. With a
relatively strong yen, Japan's export to Asian countries should also improve.
Asian exports are approximately 40% of total exports from Japan and a stronger
Asian economy in turn will be positive for Japan. While the yen's strength
dampened sentiment during the second half of 1999, most leading companies have
increased overseas manufacturing capacity and improved hedging techniques
significantly during the last 5 years and therefore a stronger yen should become
less of a negative factor in the coming months.
Importantly, we believe the "digital" revolution in home servers, games and DVD
will greatly support the Japanese economy for the foreseeable future. Much as
televisions and VCRs created a robust economy during the 1970's and 80's, Japan
is a leading manufacturer for much of the hardware in digital consumer products.
Corporate profits, return on equity and margins are also showing remarkable
promise based on large scale labor cuts together with restructuring and focused
management. Although the bond yields may rise in 2000, we believe any rises will
be modest due to the Bank of Japan's "0" interest rate policy, which they have
suggested will be maintained for the foreseeable future.
Supply and demand for equities should also be favorable. The Postal Savings
Research Institute estimates that approximately $490 billion of high yielding
10-year deposits will mature over the next 24 months. Domestic retail investors,
together with foreign investors, should more than offset the unwinding of
cross-holding which we expect to increase in 2000 as Japanese companies begin
developing relationships based on merit and sell securities once held to cement
mutual business.
The polarization within sectors for winners and losers in a greatly deregulated
environment will be pronounced in 2000, in our view. In addition, one of our key
assumptions for Japan in the year 2000 is that evidence will mount for a
sustainable secular recovery. If our forecast is correct, the market will reward
shares in economic sensitive sectors (which are deeply oversold) relative to the
handful of the "new" Japanese companies we have seen for most of 1999. The core
of our Fund holdings will therefore continue to be leading Japanese
manufacturers of digital technology, which are world class and command leading
global market share in production and quality.
Sincerely,
/s/ Michael F. Klein
Michael F. Klein
PRESIDENT AND DIRECTOR
January 2000
THE INFORMATION CONTAINED IN THIS OVERVIEW REGARDING SPECIFIC SECURITIES IS FOR
INFORMATIONAL PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS A RECOMMENDATION TO
PURCHASE OR SELL THE SECURITIES MENTIONED.
- --------------------------------------------------------------------------------
DAILY NET ASSET AND MARKET VALUES, AS WELL AS MONTHLY PORTFOLIO INFORMATION
FOR THE FUND, ARE AVAILABLE ON OUR WEBSITE AT www.msdw.com/institutional/
investmentmanagement.
EFFECTIVE JANUARY, 2000, TIMOTHY JENSEN NO LONGER SERVES AS A MANAGER OF THE
FUND. JOHN R. ALKIRE AND ASHUTOSH SINHA, WHO PREVIOUSLY SHARED PRIMARY
RESPONSIBILITY WITH MR. JENSEN, WILL CONTINUE TO HAVE PRIMARY RESPONSIBILITY FOR
THE DAY-TO-DAY MANAGEMENT OF THE FUND.
3
<PAGE>
Morgan Stanley Dean Witter Asia-Pacific Fund, Inc.
Investment Summary as of December 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
HISTORICAL TOTAL RETURN (%)
INFORMATION -------------------------------------------------------------------------
MARKET VALUE (1) NET ASSET VALUE (2) INDEX (3)
---------------------- ---------------------- ----------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
---------- ------- ---------- ------- ---------- -------
<S> <C> <C> <C> <C> <C> <C>
One Year 69.32% 69.32% 75.39% 75.39% 54.79% 54.79%
Five Year 13.93 2.64 36.59 6.44 7.80 1.51
Since Inception* -0.55 -0.10 28.48 4.74 2.15 0.39
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
- --------------------------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
[GRAPH]
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1994* 1995 1996 1997 1998 1999
------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value Per Share ... $13.20 $14.34 $11.95 $ 8.77 $ 8.73 $15.26
Market Value Per Share ...... $12.25 $13.33 $ 9.75 $ 7.44 $ 7.00 $11.81
Premium/(Discount) .......... -7.2% -7.0% -18.4% -15.2% -19.8% -22.6%
Income Dividends ............ $ 0.04 $ 0.05 $ 0.61 $ 0.02 $ 0.01 $ 0.04
Capital Gains Distributions . $ 0.01 $ 0.02 -- -- -- --
Fund Total Return (2) ....... -5.94% 9.24% -2.87%+ -26.36% -0.34% 75.39%
Index Total Return (3) ...... -5.24% 2.88% -3.63% -29.55% -0.30% 54.79%
</TABLE>
(1) Assumes dividends and distributions, if any, were reinvested.
(2) 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. These percentages are not an indication of the performance of a
shareholder's investment in the Fund based on market value due to
differences between the market price of the stock and the net asset value
per share of the Fund.
(3) The benchmark for investment performance is comprised of two Morgan Stanley
Capital International (MSCI) indices; Japan and All-Country Asia-Pacific
Free ex-Japan with each index weighted equally.
* The Fund commenced operations on August 2, 1994.
+ This return does not include the effect of the rights issued in connection
with the Rights Offering.
4
<PAGE>
MORGAN STANLEY DEAN WITTER ASIA-PACIFIC FUND, INC.
PORTFOLIO SUMMARY AS OF DECEMBER 31, 1999
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- -------------------------------------------------------------------------
DIVERSIFICATION OF TOTAL INVESTMENTS
[CHART]
<TABLE>
<S> <C>
Equity Securities (97.4%)
Short-Term Investments (2.6%)
</TABLE>
INDUSTRIES
[CHART]
<TABLE>
<S> <C>
Other (35.8%)
Telecommunications (4.0%)
Real Estate (4.8%)
Multi-Industry (3.8%)
Appliances & Household Durables (5.5%)
Automobiles (3.4%)
Banking (6.6%)
Data Processing & Reproduction (6.8%)
Electrical & Electronics (9.1%)
Electronic Components, Instruments (15.7%)
Machinery & Engineering (4.5%)
</TABLE>
- -------------------------------------------------------------------------
COUNTRY WEIGHTINGS
[CHART]
<TABLE>
<S> <C>
Other (4.5%)
Philippines (0.5%)
Thailand (1.4%)
Malaysia (2.0%)
India (4.6%)
Singapore (4.8%)
Taiwan (7.0%)
South Korea (8.3%)
Australia (8.7%)
Hong Kong (10.2%)
Japan (48.0%)
</TABLE>
- -------------------------------------------------------------------------
TEN LARGEST HOLDINGS*
<TABLE>
<CAPTION>
PERCENT OF
NET ASSETS
------------
<S> <C>
1. Sony Corp. (Japan) 3.6%
2. Kyocera Corp. (Japan) 2.9
3. Samsung Electronics (South Korea) 2.8
4. Fujitsu Ltd. (Japan) 2.5
5. Hutchinson Whampoa Ltd. (Hong Kong) 2.3
6. NEC Corp. (Japan) 2.2
7. Nintendo Co., Ltd. (Japan) 2.0
8. Fuji Machine Co. (Japan) 1.9
9. Cheung Kong (Holdings) Ltd. (Hong Kong) 1.7
10. Nippon Telephone & Telegraph Corp. (Japan) 1.7
----
23.6%
----
----
</TABLE>
* EXCLUDES SHORT-TERM INVESTMENTS.
5
<PAGE>
FINANCIAL STATEMENTS
- --------
STATEMENT OF NET ASSETS
- --------
DECEMBER 31, 1999
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (96.7%)
(Unless otherwise noted)
- --------------------------------------------------------------
AUSTRALIA (8.7%)
BANKING
Commonwealth Bank of 458,800 U.S.$ 7,894
Australia
National Australia Bank Ltd. 388,350 5,936
Westpac Banking Corp., Ltd. 882,650 6,084
-------------
19,914
-------------
BEVERAGES & TOBACCO
Coca-Cola Amatil Ltd. 461,200 1,259
Foster's Brewing Group Ltd. 1,340,000 3,841
-------------
5,100
-------------
BROADCASTING & PUBLISHING
News Corp., Ltd. 883,350 8,571
-------------
BUSINESS & PUBLIC SERVICES
Brambles Industries Ltd. 109,500 3,026
-------------
DATA PROCESSING & REPRODUCTION
(a)Reckon Ltd. 1,249,700 1,435
-------------
ENERGY SOURCES
Broken Hill Proprietary Co., 665,150 8,727
Ltd.
-------------
GOLD MINES
Normandy Mining Ltd. 2,501,600 1,772
-------------
HEALTH & PERSONAL CARE
Sonic Healthcare Ltd. 242,000 1,135
-------------
MISC. MATERIALS & COMMODITIES
Rio Tinto Ltd. 592,600 12,720
-------------
REAL ESTATE
Lend Lease Corp., Ltd. 246,300 3,448
-------------
TELECOMMUNICATIONS
(a)AAPT Ltd. 710,300 2,428
(a)Macquarie Corporate
Telecommunications
Holdings Ltd. 1,008,000 1,640
(a)Telstra Corp., Ltd. (Installment
Receipts -- Final Installment:
AUD 3.05/share due 11/2/00) 676,500 2,383
Telstra Corp., Ltd. 1,422,450 7,726
-------------
14,177
-------------
TRANSPORTATION -- AIRLINES
Qantas Airways Ltd. 932,300 2,324
-------------
82,349
-------------
- --------------------------------------------------------------
CHINA (0.3%)
ENERGY SOURCES
Yanzhou Mining Co., Ltd. 4,934,600 1,365
-------------
HEALTH & PERSONAL CARE
Hengan International Group
Co., Ltd. 3,199,000 885
-------------
UTILITIES -- ELECTRICAL & GAS
Huaneng Power
International, Inc. 'H' 2,066,400 491
- --------------------------------------------------------------
Zhejiang Expressway Co.,
Ltd. 'H' 3,299,000 U.S.$ 501
-------------
992
-------------
3,242
-------------
- --------------------------------------------------------------
HONG KONG (9.9%)
BANKING
Hang Seng Bank Ltd. 226,500 2,586
Wing Hang Bank Ltd. 496,000 1,697
-------------
4,283
-------------
BROADCASTING & PUBLISHING
Television Broadcasts Ltd. 489,000 3,334
-------------
BUSINESS & PUBLIC SERVICES
(a)Timeless Software Ltd. 1,398,000 809
-------------
ELECTRICAL & ELECTRONICS
(a)Great Wall Technology Co., Ltd. 1,083,000 1,052
Johnson Electric Holdings Ltd. 275,000 1,765
-------------
2,817
-------------
MULTI-INDUSTRY
Hutchison Whampoa Ltd. 1,529,500 22,234
Swire Pacific Ltd. 'A' 694,600 4,101
-------------
26,335
-------------
REAL ESTATE
Cheung Kong (Holdings) Ltd. 1,265,000 16,070
Hong Kong Land Holdings Ltd. 572,000 847
Kerry Properties Ltd. 593,000 831
New World China Land Ltd. 3,429,000 1,268
New World Development Co., Ltd. 768,000 1,729
Sino Land Co. 2,899,000 1,669
Sun Hung Kai Properties Ltd. 922,000 9,607
-------------
32,021
-------------
TELECOMMUNICATIONS
Smartone Telecommunications 191,000 922
-------------
TELECOMMUNICATIONS -- INTEGRATED
Asia Satellite Telecom Holdings 606,000 1,914
Hong Kong Telecommunications Ltd. 3,024,300 8,734
-------------
10,648
-------------
TELECOMMUNICATIONS -- WIRELESS
China Telecom Ltd. 1,210,000 7,565
-------------
TEXTILES & APPAREL
Yue Yuen Industrial
Holdings 276,000 660
-------------
TRANSPORTATION -- AIRLINES
Cathay Pacific Airways 932,000 1,661
-------------
UTILITIES -- ELECTRICAL & GAS
Hong Kong & China Gas Co.,
Ltd. 1,835,000 2,514
-------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------
<S> <C> <C>
HONG KONG (CONTINUED)
WHOLESALE & INTERNATIONAL TRADE
Jardine International
Motor Holdings Ltd. 656,000 U.S.$ 329
-------------
93,898
-------------
- --------------------------------------------------------------
INDIA (4.6%)
AUTOMOBILES
Hero Honda Ltd. 66,556 1,727
-------------
BANKING
State Bank of India Ltd. 1,112 6
-------------
BEVERAGES & TOBACCO
ITC Ltd. 70,455 1,077
-------------
BUILDING MATERIALS & COMPONENTS
Associated Cement Co., Ltd. 8,600 49
-------------
CHEMICALS
Grasim Co. 139,742 1,311
Gujarat Narmada Valley 49 --@
Fertilizers Co., Ltd. GDR
Supreme Industries Ltd. 50 --@
-------------
1,311
-------------
DATA PROCESSING & REPRODUCTION
Aptech Ltd. 82,400 3,347
(a)BFL Software Ltd. 28,100 718
(a,c)HCL Technologies Ltd. 34,750 463
Leading Edge Systems Ltd. 300 13
NIIT Ltd. 26,000 1,982
-------------
6,523
-------------
ELECTRICAL & ELECTRONICS
Bharat Heavy Electricals 405,200 1,956
Ltd.
Digital Equipment (India) Ltd. 100 3
Tata Infotech Ltd. 25 --@
-------------
1,959
-------------
ELECTRONIC COMPONENTS, INSTRUMENTS
Infosys Technology Ltd. 39,075 13,040
(a)Moser-Baer India Ltd. 185,975 1,492
-------------
14,532
-------------
FINANCIAL SERVICES
(c)Housing Development 255,360 1,813
Finance Corp., Ltd.
UTI-MasterShares Ltd. 200 --@
-------------
1,813
-------------
INDUSTRIAL COMPONENTS
Apollo Tyres Ltd. 15,875 58
-------------
MACHINERY & ENGINEERING
Punjab Tractors Ltd. 80,900 1,932
-------------
METALS -- STEEL
Tata Iron & Steel Co., Ltd. 2,195 7
-------------
MULTI-INDUSTRY
(d)Morgan Stanley Growth Fund 19,448,150 6,818
-------------
TELECOMMUNICATIONS -- INTEGRATED
Videsh Sanchar Nigam Ltd. 54,455 2,265
-------------
TEXTILES & APPAREL
(a,c)J.K. Synthetics Ltd. 674 --@
Raymond Ltd. 25 --@
- --------------------------------------------------------------
(a)Viniyoga Clothes Ltd. 5,300 U.S.$ --@
-------------
--@
-------------
TRANSPORTATION -- ROAD & RAIL
Container Corp. of India
Ltd. 375,000 2,112
-------------
UTILITIES -- ELECTRICAL & GAS
(a)Gas Authority of India 135,000 1,276
-------------
43,465
-------------
- --------------------------------------------------------------
INDONESIA (0.5%)
BEVERAGES & TOBACCO
Gudang Garam 294,000 791
-------------
BUILDING MATERIALS & COMPONENTS
Semen Gresik 257,500 408
-------------
FOOD & HOUSEHOLD PRODUCTS
Indofood Sukses Makmur
(a,c)Indofood Sukses Makmur 186,500 234
(Foreign) 453,500 568
-------------
802
-------------
TELECOMMUNICATIONS -- INTEGRATED
Telekomunikasi Indonesia ADR 208,356 2,292
-------------
4,293
-------------
- --------------------------------------------------------------
JAPAN (48.0%)
APPLIANCES & HOUSEHOLD DURABLES
Casio Computer Co., Ltd.
Matsushita Electric Industrial 552,000 4,590
Co., Ltd. 504,000 13,952
Sony Corp. 114,000 33,788
-------------
52,330
-------------
AUTOMOBILES
Nifco, Inc. 350,000 4,177
Nissan Motor Co. 1,330,000 5,230
Suzuki Motor Co., Ltd. 430,000 6,271
Toyota Motor Corp. 220,000 10,653
-------------
26,331
-------------
BROADCASTING & PUBLISHING
Nissha Printing Co., Ltd. 105,000 627
-------------
BUILDING MATERIALS & COMPONENTS
Fujitec Co., Ltd. 440,000 4,412
Rinnai Corp. 160,700 2,987
Sanwa Shutter Corp., Ltd. 642,000 2,386
Sekisui Chemical Co. 673,000 2,982
-------------
12,767
-------------
BUSINESS & PUBLIC SERVICES
Dai Nippon Printing Co., 363,000 5,788
Ltd.
Mitsubishi Logistics Corp. 160,000 1,020
-------------
6,808
-------------
CHEMICALS
Daicel Chemical Industries Ltd. 1,090,000 3,039
Kaneka Corp. 859,000 10,982
Mitsubishi Chemical Industries 830,000 2,923
- --------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------
<S> <C> <C>
JAPAN (CONTINUED)
CHEMICALS (CONTINUED)
Shin-Etsu Polymer Co., Ltd. 530,000 U.S.$ 3,110
-------------
20,054
-------------
CONSTRUCTION & HOUSING
Sekisui House Ltd. 610,000 5,400
-------------
DATA PROCESSING & REPRODUCTION
Canon, Inc. 344,000 13,662
Fujitsu Ltd. 528,000 24,068
Ricoh Co., Ltd. 701,000 13,207
-------------
50,937
-------------
ELECTRICAL & ELECTRONICS
Hitachi Ltd. 950,000 15,240
Minebea Co., Ltd. 460,000 7,888
Mitsumi Electric Co., Ltd. 336,000 10,518
NEC Corp. 870,000 20,722
Ryosan Co., Ltd. 123,000 3,056
Toshiba Corp. 1,595,000 12,170
-------------
69,594
-------------
ELECTRONIC COMPONENTS, INSTRUMENTS
Kyocera Corp. 107,000 27,736
Kyudenko Co., Ltd. 380,000 1,338
Rohm Co., Ltd. 34,000 13,969
TDK Corp. 98,000 13,526
-------------
56,569
-------------
ENERGY EQUIPMENT & SERVICES
Kurita Water Industries
Ltd. 274,000 4,353
-------------
FINANCIAL SERVICES
Hitachi Credit Corp. 357,000 7,246
-------------
FOOD & HOUSEHOLD PRODUCTS
Aiwa Co., Ltd. 115,000 2,385
House Foods Corp. 60,000 910
Nippon Meat Packers, Inc. 95,000 1,231
Sangetsu Co., Ltd. 137,000 2,881
Yamaha Corp. 332,000 2,156
-------------
9,563
-------------
HEALTH & PERSONAL CARE
Ono Pharmaceutical Co.,
Ltd. 210,000 5,628
Sankyo Co., Ltd.
Yamanouchi Pharmaceutical Co., 378,000 7,765
Ltd. 253,000 8,835
-------------
22,228
-------------
INDUSTRIAL COMPONENTS
Furakawa Electric Co. 473,000 7,172
-------------
MACHINERY & ENGINEERING
Amada Co., Ltd. 612,000 3,346
Daifuku Co., Ltd. 596,000 3,440
Daikin Kogyo Co. 603,000 8,199
Fuji Machine Co. 219,000 17,652
Mitsubishi Heavy Industries Ltd. 1,600,000 5,337
Tsubakimoto Chain Co. 832,000 3,052
-------------
41,026
-------------
MERCHANDISING
Family Mart Co., Ltd. 113,200 7,530
-------------
- --------------------------------------------------------------
MULTI-INDUSTRY
Lintec Corp. 235,000 U.S.$ 2,552
-------------
REAL ESTATE
Keihanshin Real Estate Co. 164,000 568
Mitsubishi Estate Co., Ltd. 415,000 4,047
-------------
4,615
-------------
RECREATION, OTHER CONSUMER GOODS
Fuji Photo Film Ltd. 252,000 9,194
Nintendo Co., Ltd. 112,000 18,603
-------------
27,797
-------------
TELECOMMUNICATIONS
Nippon Telephone &
Telegraph Corp. 932 15,954
-------------
UTILITIES -- ELECTRICAL & GAS
Tokyo Electric Power 110,000 2,948
-------------
WHOLESALE & INTERNATIONAL TRADE
Nissei Sangyo 85,000 1,172
-------------
455,573
-------------
- --------------------------------------------------------------
MALAYSIA (2.0%)
BANKING
Malayan Banking Bhd 1,138,000 4,043
Public Bank Bhd 1,724,000 1,506
-------------
5,549
-------------
BEVERAGES & TOBACCO
Carlsberg Brewery
(Malaysia) Bhd 1,082,000 3,331
British American Tobacco Bhd 584,000 4,457
-------------
7,788
-------------
FOOD & HOUSEHOLD PRODUCTS
Nestle Bhd 409,000 1,765
-------------
LEISURE & TOURISM
Tanjong plc 84,000 186
-------------
MULTI-INDUSTRY
Sime Darby Bhd 651,000 826
-------------
TELECOMMUNICATIONS -- INTEGRATED
Telekom Malaysia Bhd 653,000 2,526
-------------
18,640
-------------
- --------------------------------------------------------------
NEW ZEALAND (0.4%)
FOREST PRODUCTS & PAPER
(a)Fletcher Challenge Forests 785,700 316
-------------
TELECOMMUNICATIONS
Telecom Corp. of New
Zealand Ltd. 671,100 3,156
-------------
TRANSPORTATION -- AIRLINES
Air New Zealand Ltd. 'B' 505,000 739
-------------
4,211
-------------
- --------------------------------------------------------------
PAKISTAN (0.4%)
HEALTH & PERSONAL CARE
Lever Brothers Pakistan 235,580 3,620
Ltd.
- --------------------------------------------------------------
PHILIPPINES (0.5%)
BEVERAGES & TOBACCO
San Miguel Corp. 'B' 799,920 1,131
-------------
- --------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------
<S> <C> <C>
PHILIPPINES (CONTINUED)
BROADCASTING & PUBLISHING
(a)ABS-CBN Broadcasting Corp. 834,300 U.S.$ 1,035
-------------
REAL ESTATE
SM Prime Holdings, Inc. 'B' 8,646,180 1,631
-------------
TELECOMMUNICATIONS -- INTEGRATED
Philippine Long Distance
Telephone Co. 54,730 1,392
-------------
5,189
-------------
- --------------------------------------------------------------
SINGAPORE(4.8%)
AEROSPACE & MILITARY TECHNOLOGY
Singapore Technologies
Engineering Ltd. 1,203,000 1,863
-------------
BANKING
DBS Group Holdings Ltd.
Oversea-Chinese Banking Corp., 393,978 6,458
Ltd. (Foreign) 622,085 5,715
(a)Overseas Union Bank Ltd. 'F' 356,210 2,085
United Overseas Bank Ltd.
(Foreign) 298,016 2,630
-------------
16,888
-------------
BROADCASTING & PUBLISHING
Singapore Press Holdings Ltd. 176,600 3,828
-------------
ELECTRICAL & ELECTRONICS
(a)Chartered Semiconductor 359,000 1,962
Gul Technologies 841,000 929
Natsteel Electronics Ltd. 532,000 2,811
-------------
5,702
-------------
ELECTRONIC COMPONENTS, INSTRUMENTS
(a)Omni Industries Ltd. 594,000 1,077
Venture Manufacturing Ltd. 296,000 3,395
-------------
4,472
-------------
REAL ESTATE
City Developments Ltd. 297,000 1,739
DBS Land 440,000 866
-------------
2,605
-------------
TELECOMMUNICATIONS
Singapore
Telecommunications, Ltd. 1,403,000 2,898
-------------
TRANSPORTATION -- AIRLINES
Singapore Airlines Ltd. 448,000 5,084
-------------
TRANSPORTATION -- SHIPPING
Neptune Orient Lines 688,000 921
Sembcorp Logistics Ltd. 378,200 1,533
-------------
2,454
-------------
45,794
-------------
- --------------------------------------------------------------
SOUTH KOREA (8.3%)
AUTOMOBILES
(a,b)Hyundai Motor Co. 405,254 4,356
-------------
BANKING
Hana Bank 98,650 769
Housing & Commercial Bank 94,560 2,998
- --------------------------------------------------------------
(a)Housing & Commercial Bank, 7,400 219
Korea GDR
Kookmin Bank 220,851 U.S.$ 3,462
-------------
7,448
-------------
CHEMICALS
Korea Chemical Co., Ltd. 13,790 899
L.G. Chemical Ltd. 60,960 1,927
-------------
2,826
-------------
DATA PROCESSING & REPRODUCTION
Mirae Co. 116,890 909
-------------
ELECTRICAL & ELECTRONICS
Hyundai Electronics
Industries Co. 75,607 1,605
-------------
ELECTRONIC COMPONENTS, INSTRUMENTS
Daeduck Electronics Co. 57,620 685
(a)Humax Co., Ltd. 49,520 837
Samsung Electro-Mechanics Co. 31,981 2,127
Samsung Electronics 114,297 26,775
-------------
30,424
-------------
FINANCIAL SERVICES
Dongwon Securities Co. 41,410 893
Good Morning Securities Co., Ltd. 176,180 843
Korea Technology Banking 46,150 447
-------------
2,183
-------------
FOOD & HOUSEHOLD PRODUCTS
Cheil Jedang Corp. 16,120 1,860
-------------
METALS -- STEEL
Pohang Iron & Steel Ltd.
ADR 142,500 4,988
-------------
MISC. MATERIALS & COMMODITIES
Hankuk Glass Industry Co., Ltd. 26,460 501
-------------
TELECOMMUNICATIONS
(a)Pantech Co., Ltd. 39,070 877
-------------
TELECOMMUNICATIONS -- INTEGRATED
(a)Insung Infomation 21,020 718
Korea Telecom Corp., ADR 74,600 5,577
-------------
6,295
-------------
TELECOMMUNICATIONS -- WIRELESS
SK Telecom Co., Ltd. 219,390 8,419
-------------
UTILITIES -- ELECTRICAL & GAS
Korea Electric Power Corp.
ADR 342,200 5,732
-------------
78,423
-------------
- --------------------------------------------------------------
TAIWAN (7.0%)
BANKING
(a)Chinatrust Commercial Bank 1,035,000 1,204
(a)First Commercial Bank 587,000 731
International Commercial Bank of
China 1,187,500 1,332
(a)Taishin International Bank 1,509,200 846
United World Chinese Commercial
Bank 998,000 1,205
-------------
5,318
-------------
- --------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------
<S> <C> <C>
TAIWAN (CONTINUED)
CHEMICALS
Formosa Plastics Corp. 566,000 U.S.$ 1,127
Nan Ya Plastic Corp. 1,210,290 2,661
-------------
3,788
-------------
DATA PROCESSING & REPRODUCTION
(a)Acer, Inc. 1,252,000 3,770
(a)Ritek Corp. 60,000 694
-------------
4,464
-------------
ELECTRICAL & ELECTRONICS
(a)Siliconware Precision
Industries Co. 861,000 2,195
-------------
ELECTRONIC COMPONENTS, INSTRUMENTS
(c)Acer Peripherals, Inc. GDR
(a)Advanced Semiconductor 74,896 3,102
Engineering, Inc. 672,000 2,398
Ambit Microsystems Corp. 71,000 527
(a)ASE Test Ltd. 25,000 609
Asustek Computer, Inc. 365,000 3,850
Compal Electronics 237,587 799
(a)Compeq Manufacturing Co., Ltd. 401,000 2,185
Delta Electronic Industrial 354,000 1,534
(a)Hon Hai Precision Industry 539,200 4,020
(a)Taiwan Semiconductor
Manufacturing Co., Ltd. 2,579,000 13,723
(a)United Micro Electronics
Corp., Ltd. 2,851,000 10,174
-------------
42,921
-------------
MERCHANDISING
President Chain Store Corp. 433,000 1,911
-------------
METALS -- STEEL
China Steel Corp. 3,892,000 2,877
-------------
TEXTILES & APPAREL
(a,b)Far East Textile 948,140 2,419
-------------
TRANSPORTATION -- SHIPPING
(a)Evergreen Marine Corp. 1,035,640 851
-------------
66,744
-------------
- --------------------------------------------------------------
THAILAND (1.3%)
BANKING
Thai Farmers Bank Ltd.
(Foreign) 1,611,600 2,696
-------------
BROADCASTING & PUBLISHING
(c)BEC World Public Co.,
Ltd. (Foreign) 143,500 1,013
-------------
BUILDING MATERIALS & COMPONENTS
Siam City Cement Public
Co., Ltd. (Foreign) 251,933 1,351
-------------
ELECTRICAL & ELECTRONICS
Delta Electronics Public
Co., Ltd. (Foreign) 183,015 2,177
-------------
REAL ESTATE
Golden Land Property
Development Public Co., Ltd. 2,849,000 1,475
-------------
TELECOMMUNICATIONS -- WIRELESS
Advanced Info. Services
Public Co., Ltd.
(Foreign) 231,000 U.S.$ 3,876
-------------
12,588
-------------
- --------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost U.S.$651,927) 918,029
-------------
- --------------------------------------------------------------
NO. OF
RIGHTS
- --------------------------------------------------------------
RIGHTS (0.3%)
- --------------------------------------------------------------
HONG KONG
WHOLESALE & INTERNATIONAL TRADE
(a)Li & Fung Ltd. 1,132,000 2,840
-------------
- -------------------------------------------------------------
TOTAL RIGHTS
(Cost U.S.$1,077) 2,840
-------------
- -------------------------------------------------------------
NO. OF
WARRANTS
- -------------------------------------------------------------
WARRANTS (0.1%)
- -------------------------------------------------------------
INDIA (0.0%)
INDUSTRIAL COMPONENTS
(a)Apollo Tyres Ltd. 2,150 --@
-------------
- -------------------------------------------------------------
THAILAND (0.1%)
BANKING
(a)Siam Commercial Bank Public
Co., Ltd., expiring 5/10/02 1,727,300 803
-------------
- -------------------------------------------------------------
TOTAL WARRANTS
(Cost U.S.$139) 803
-------------
- -------------------------------------------------------------
FACE
AMOUNT
(000)
- -------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS (2.2%)
- -------------------------------------------------------------
UNITED STATES (2.2%)
REPURCHASE AGREEMENT
Chase Securities, Inc.,
2.60%, dated 12/31/99,
due 1/3/00, to be
repurchased at
U.S.$20,987,
collateralized by U.S.
$21,460 United States
Treasury Note, 6.125%,
due 12/31/01, valued at
U.S.$21,416 (Cost
U.S.$20,982) U.S.$ 20,982 20,982
-------------
- -------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
- -------------------------------------------------------------
<S> <C> <C>
FOREIGN CURRENCY ON DEPOSIT WITH
CUSTODIAN (0.4%)
Hong Kong Dollar HKD 1,500 U.S.$ 193
Indian Rupee INR 423 10
Malaysian Ringgit MYR 1,870 492
Pakistani Rupee PKR 16,594 306
South Korean Won KRW 3,349,173 2,949
Taiwan Dollar TWD 4,399 140
-------------
(Cost U.S.$4,095) 4,090
-------------
- -------------------------------------------------------------
TOTAL INVESTMENTS (99.7%)
(Cost U.S.$678,220) 946,744
-------------
- -------------------------------------------------------------
OTHER ASSETS (0.7%)
Cash U.S.$ 5,677
Receivable for Investments Sold 593
Dividends Receivable 546
Foreign Withholding Tax Reclaim
Receivable 75
Interest Receivable 3
Other Assets 57 6,951
--------- --------------
- -------------------------------------------------------------
LIABILITIES (-0.4%)
Deferred Country Taxes (270)
Payable For:
Dividends Declared (2,384)
Investment Advisory Fees (751)
Professional Fees (171)
Custodian Fees (168)
Directors' Fees and Expenses (128)
Shareholder Reporting Expenses (99)
Administrative Fees (78)
Other Liabilities (105) (4,154)
--------- --------------
- --------------------------------------------------------------
NET ASSETS (100%)
Applicable to 62,233,974, issued and
outstanding U.S.$0.01 par value shares
(100,000,000 shares authorized) U.S.$ 949,541
-------------
- --------------------------------------------------------------
NET ASSET VALUE PER SHARE U.S.$ 15.26
-------------
- --------------------------------------------------------------
AMOUNT
(000)
- --------------------------------------------------------------
AT DECEMER 31,1999, NET ASSETS CONSISTED OF:
- --------------------------------------------------------------
Common Stock U.S.$ 622
Capital Surplus 852,882
Distributions in Excess of
Net Investment Income (1,792)
Accumulated Net Realized Loss (170,373)
Unrealized Appreciation on Investments
and Foreign Currency Translations (net
of accrued foreign tax of U.S.$270 on
unrealized appreciation) 268,202
- --------------------------------------------------------------
TOTAL NET ASSETS U.S.$ 949,541
-------------
- --------------------------------------------------------------
(a) -- Non-income producing.
(b) -- 144A Security -- certain conditions for public sale may exist.
(c) -- Security valued at fair value -- see note A-1 to financial statements.
(d) -- The Fund is advised by an affiliate.
@ -- Value is less than U.S.$500.
ADR -- American Depositary Receipt.
GDR -- Global Depositary Receipt.
Note: Prior governmental approval for foreign investments may be required
under certain circumstances in some
emerging markets, and foreign ownership limitations may also be
imposed by the charters of individual companies in emerging
markets. As a result, an additional class of shares designated as
"foreign" may be created, and offered for investment. The "local"
and "foreign" shares' market value may vary.
- ---------------------------------------------------------------
DECEMBER 31, 1999 EXCHANGE RATES:
- ---------------------------------------------------------------
HKD Hong Kong Dollar 7.774 = U.S. $1.00
INR Indian Rupee 43.500 = U.S. $1.00
KRW South Korean Won 1,135.500 = U.S. $1.00
MYR Malaysian Ringgit 3.800 = U.S. $1.00
PKR Pakistani Rupee 54.208 = U.S. $1.00
TWD Taiwan Dollar 31.385 = U.S. $1.00
- ---------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
SUMMARY OF TOTAL INVESTMENTS BY INDUSTRY
CLASSIFICATION -- DECEMBER 31, 1999
<TABLE>
<CAPTION>
PERCENT
VALUE OF NET
INDUSTRY (000) ASSETS
- ---------------------------------------------------------
<S> <C> <C>
Aerospace & Military Technology U.S.$ 1,863 0.2%
Appliances & Household Durables 52,330 5.5
Automobiles 32,414 3.4
Banking 62,905 6.6
Beverages & Tobacco 15,887 1.7
Broadcasting & Publishing 18,408 1.9
Building Materials & Components 14,575 1.5
Business & Public Services 10,643 1.1
Chemicals 27,979 3.0
Construction & Housing 5,400 0.6
Data Processing & Reproduction 64,268 6.8
Electrical & Electronics 86,049 9.1
Electronic Components, Instruments 148,918 15.7
Energy Equipment & Services 4,353 0.5
Energy Sources 10,092 1.1
Financial Services 11,242 1.2
Food & Household Products 13,990 1.5
Forest Products & Paper 316 0.0
Gold Mines 1,772 0.2
Health & Personal Care 27,868 2.9
Industrial Components 7,230 0.8
Leisure & Tourism 186 0.0
Machinery & Engineering 42,958 4.5
Merchandising 9,441 1.0
Metals -- Steel 7,872 0.8
Misc. Materials & Commodities 13,221 1.4
Multi-Industry 36,531 3.8
Real Estate 45,795 4.8
Recreation, Other Consumer Goods 27,797 2.9
Telecommunications -- Integrated 25,418 2.7
Telecommunications -- Wireless 19,860 2.1
Telecommunications 37,984 4.0
Textiles & Apparel 3,079 0.3
Transportation -- Airlines 9,808 1.0
Transportation -- Road & Rail 2,112 0.2
Transportation -- Shipping 3,305 0.4
Utilities -- Electrical & Gas 13,462 1.4
Wholesale & International Trade 4,341 0.5
Other 25,072 2.6
------------- ------
U.S.$ 946,744 99.7%
------------- ------
------------- ------
</TABLE>
SUMMARY OF TOTAL INVESTMENTS BY COUNTRY --
DECEMBER 31, 1999
<TABLE>
<CAPTION>
PERCENT
VALUE OF NET
COUNTRY (000) ASSETS
- -----------------------------------------------------
<S> <C> <C>
Australia U.S.$ 82,349 8.7%
China 3,242 0.3
Hong Kong 96,738 10.2
India 43,465 4.6
Indonesia 4,293 0.5
Japan 455,573 48.0
Malaysia 18,640 2.0
New Zealand 4,211 0.4
Pakistan 3,620 0.4
Philippines 5,189 0.5
Singapore 45,794 4.8
South Korea 78,423 8.3
Taiwan 66,744 7.0
Thailand 13,391 1.4
United States (short-term
investments) 20,982 2.2
Other 4,090 0.4
------------- -----
U.S.$ 946,744 99.7%
------------- -----
------------- -----
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, 1999
STATEMENT OF OPERATIONS (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME
Dividends .................................................................................. U.S.$ 10,315
Interest ................................................................................... 453
Less: Foreign Taxes Withheld ............................................................... (853)
- ---------------------------------------------------------------------------------------------------------------------------
Total Income ............................................................................. 9,915
- ---------------------------------------------------------------------------------------------------------------------------
EXPENSES
Investment Advisory Fees ................................................................... 7,110
Administrative Fees ........................................................................ 723
Custodian Fees ............................................................................. 647
Professional Fees .......................................................................... 207
Shareholder Reporting Expenses ............................................................. 175
Directors' Fees and Expenses ............................................................... 118
Country Tax Expense ........................................................................ 26
Transfer Agent Fees ........................................................................ 8
Amortization of Organization Costs ......................................................... 6
Other Expenses ............................................................................. 160
- ---------------------------------------------------------------------------------------------------------------------------
Total Expenses ........................................................................... 9,180
- ---------------------------------------------------------------------------------------------------------------------------
Net Investment Income .................................................................. 735
- ---------------------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS)
Investment Securities Sold ................................................................. 85,979
Foreign Currency Transactions .............................................................. 762
- ---------------------------------------------------------------------------------------------------------------------------
Net Realized Gain ........................................................................ 86,741
- ---------------------------------------------------------------------------------------------------------------------------
CHANGE IN UNREALIZED APPRECIATION/DEPRECIATION
Appreciation on Investments (net of deferred foreign tax expense of $270) .................. 319,706
Depreciation on Foreign Currency Translations .............................................. (661)
- ---------------------------------------------------------------------------------------------------------------------------
Change in Unrealized Appreciation/Depreciation ........................................... 319,045
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
Total Net Realized Gain and Change in Unrealized Appreciation/Depreciation ..................... 405,786
- ---------------------------------------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ....................................... U.S.$ 406,521
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
STATEMENT OF CHANGES IN NET ASSETS (000) (000)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income .................................................... U.S.$ 735 U.S.$ 4,614
Net Realized Gain (Loss) ................................................. 86,741 (110,951)
Change in Unrealized Appreciation/Depreciation ........................... 319,045 94,939
- ---------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations .......... 406,521 (11,398)
- ---------------------------------------------------------------------------------------------------------------------------
Distributions:
Net Investment Income .................................................... (593) --
In Excess of Net Investment Income ....................................... (1,791) (639)
- ---------------------------------------------------------------------------------------------------------------------------
Total Distributions ...................................................... (2,384) (639)
- ---------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions:
Repurchase of Shares (5,040,600 and 4,379,934 shares, respectively) ...... (41,752) (28,980)
- ---------------------------------------------------------------------------------------------------------------------------
Net Decrease in Net Assets Resulting from Capital Share Transactions ..... (41,752) (28,980)
- ---------------------------------------------------------------------------------------------------------------------------
Total Increase (Decrease) ................................................ 362,385 (41,017)
Net Assets:
Beginning of Period ...................................................... 587,156 628,173
- ---------------------------------------------------------------------------------------------------------------------------
End of Period (including distributions in excess of net investment
income of U.S.$(1,792) and U.S.$(1,367) respectively) .................. U.S.$ 949,541 U.S.$ 587,156
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
SELECTED PER SHARE DATA AND ------------------------------------------------------------------------------
RATIOS: 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............ U.S.$ 8.73 U.S.$ 8.77 U.S.$ 11.95 U.S.$ 14.34 U.S.$ 13.20
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
Offering Costs -- -- -- (0.01) --
- ---------------------------------------------------------------------------------------------------------------------------------
Net Investment Income ........................... 0.01 0.06 0.03 0.02 0.05
Net Realized and Unrealized Gain (Loss) on
Investments.................................... 6.44 (0.17) (3.19) (0.33) 1.16
- ---------------------------------------------------------------------------------------------------------------------------------
Total from Investment Operations ............ 6.45 (0.11) (3.16) (0.31) 1.21
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions:
Net Investment Income ......................... (0.01) -- (0.02) (0.60) (0.05)
In Excess of Net Investment Income ............ (0.03) (0.01) -- (0.01) (0.00)#
In Excess of Net Realized Gain................. -- -- -- -- (0.02)
- ---------------------------------------------------------------------------------------------------------------------------------
Total Distributions ......................... (0.04) (0.01) (0.02) (0.61) (0.07)
- ---------------------------------------------------------------------------------------------------------------------------------
Decrease in Net Asset Value due to Shares
Issued through Rights Offering................... -- -- -- (1.46) --
Anti--Dilutive Effect of Shares Repurchased ... 0.12 0.08 -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD .................. U.S.$ 15.26 U.S.$ 8.73 U.S.$ 8.77 U.S.$ 11.95 U.S.$ 14.34
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE MARKET VALUE, END OF PERIOD ........... U.S.$ 11.81 U.S.$ 7.00 U.S.$ 7.44 U.S.$ 9.75 U.S.$ 13.33
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN:
Market Value .................................. 69.32% (5.77)% (23.46)% (14.72)%+ 9.38%
Net Asset Value (1) ........................... 75.39% (0.34)% (26.36)% (2.87)%+ 9.24%
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS, SUPPLEMENTAL DATA:
- ---------------------------------------------------------------------------------------------------------------------------------
NET ASSETS, END OF PERIOD (THOUSANDS) ........... U.S.$949,541 U.S.$587,156 U.S.$628,173 U.S.$856,397 U.S.$769,414
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of Expenses to Average Net Assets .........
Ratio of Net Investment Income to Average 1.29% 1.42% 1.34% 1.39% 1.36%
Net Assets..................................... 0.10% 0.80% 0.25% 0.16% 0.36%
Portfolio Turnover Rate ......................... 65% 42% 66% 28% 21%
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
# Amount is less than U.S.$0.01.
+ This return does not include the effect of the rights issued in connection
with the Rights Offering.
(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
shareholder'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.
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
- -----------------
The Morgan Stanley Dean Witter Asia-Pacific Fund, Inc. (formerly 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. The following significant accounting policies, which are in conformity with
generally accepted accounting principles for investment companies, are
consistently followed by the Fund in the preparation of its financial
statements. Generally accepted accounting principles 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. Securities that are traded
over-the-counter are valued at the average of the mean of current bid and
asked prices obtained from reputable brokers. Short-term securities which
mature in 60 days or less are valued at amortized cost. All other
securities and assets for which market values are not readily available
(including investments which are subject to limitations as to their sale)
are valued at fair value as determined in good faith under the procedures
approved by the Board of Directors, although the actual calculations may be
done by others.
Events affecting the values of certain Fund securities that occur between
the close of regular trading on the principal market for such securities
(foreign exchanges and over-the-counter markets) and the regular close of
the Exchange will not be reflected in the Fund's calculation of net asset
value unless the Adviser believes that the particular event would
materially affect net asset value, in which case an adjustment would be
made.
2. 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 U.S. Federal income taxes is required in the financial
statements.
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.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, a bank as custodian for the Fund takes possession of the
underlying securities, 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.
4. 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
securities transactions, and the difference between the amount of
investment in-
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come 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 and foreign currency contracts 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.
Foreign security and currency transactions may involve certain
considerations and risks not typically associated with those of U.S. dollar
denominated transactions as a result of, among other factors, the
possibility of lower levels of governmental supervision and regulation of
foreign securities markets and the possibility of political or economic
instability.
The Fund may use derivatives to achieve its investment objective. 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 may utilize
and their associated risks:
5. FOREIGN CURRENCY EXCHANGE CONTRACTS: The Fund may enter into foreign
currency exchange contracts generally 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.
6. FORWARD COMMITMENTS AND WHEN-ISSUED/DELAYED DELIVERY SECURITIES: The Fund
may make forward commitments to purchase or sell securities. Payment and
delivery for securities which have been purchased or sold on a forward
commitment basis can take place a month or more (not to exceed 120 days)
after the date of the transaction. Additionally, the Fund may purchase
securities on a when-issued or delayed delivery basis. Securities purchased
on a when-issued or delayed delivery basis are purchased for delivery
beyond the normal settlement date at a stated price and yield, and no
income accrues to the Fund on such securities prior to delivery. When the
Fund enters into a purchase transaction on a when-issued or delayed
delivery basis, it either establishes a segregated account in which it
maintains liquid assets in an amount at least equal in value to the Fund's
commitments to purchase such securities or denotes such securities assets
as segregated on the Fund's records. Purchasing securities on a forward
commitment or when-issued or delayed-delivery basis may involve a risk that
the market price at the time of delivery may be lower than the agreed upon
purchase price, in which case there could be an unrealized loss at the time
of delivery.
7. SWAP AGREEMENTS: The Fund may enter into swap agreements to exchange the
return generated by one security, instrument or basket of instruments for
the return generated by another security, instrument or basket of
instruments. The following summarizes swaps which may be entered into by
the Fund:
INTEREST RATE SWAPS: Interest rate swaps involve the exchange of
commitments to pay and receive interest based on a notional principal
amount. Net periodic interest payments to be received or paid are accrued
daily and are recorded in the Statement of Operations as an adjustment
to interest income. Interest rate swaps are marked-to-market daily based
upon quotations from market makers and the change, if any, is recorded as
unrealized appreciation or depreciation in the Statement of Operations.
TOTAL RETURN SWAPS: Total return swaps involve commitments to pay interest
in exchange for a market- linked return based on a notional amount. To the
extent the total return of the security, instrument or basket of
instruments underlying the transaction exceeds or falls short of the
offsetting interest obligation, the Fund will receive a payment from or
make a payment to the counterparty, respectively. Total return swaps are
marked-to-market daily based upon quotations from market makers and the
change, if any, is recorded as unrealized gains or losses in the Statement
of Operations. Periodic payments received or made at the end of each
measurement period, but prior to termination, are recorded as realized
gains or losses in the Statement of Operations.
Realized gains or losses on maturity or termination of interest rate and
total return swaps are presented in the Statement of Operations. Because
there is no organized market for these swap agreements, the value
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reported in the Statement of Net Assets may differ from that which would be
realized in the event the Fund terminated its position in the agreement.
Risks may arise upon entering into these agreements from the potential
inability of the counterparties to meet the terms of the agreements and are
generally limited to the amount of net interest payments to be received
and/or favorable movements in the value of the underlying security,
instrument or basket of instruments, if any, at the date of default.
Risks also arise from potential losses from adverse market movements, and
such losses could exceed the related amounts shown in the Statement of Net
Assets.
8. 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.
9. OVER-THE-COUNTER TRADING: Securities and other derivative instruments that
may be purchased or sold by the Fund are expected to regularly 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.
The Fund did not invest in Forward Commitment and When-Issued/Delayed
Securities, Swap Agreements, Structured Securities or participate in
Over-the-Counter Trading during the year ended December 31, 1999.
10. 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 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 dividend) net of
applicable withholding taxes where recovery of such taxes is not reasonably
assured. Distributions to shareholders are recorded on the ex-dividend
date.
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 generally accepted accounting
principles. The book/tax differences are either considered 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 book and tax basis differences may result in reclassifications
among undistributed net investment income (loss), accumulated net realized
gain (loss) and paid in capital.
Adjustments for permanent book-tax differences, if any, are not reflected
in ending undistributed net investment income (loss) for the purpose of
calculating net investment income (loss) per share in the financial
highlights.
B. Morgan Stanley Dean Witter 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. The Chase Manhattan Bank, through its corporate affiliate Chase Global
Funds Services Company (the "Administrator"), provides administrative services
to the Fund under an Administration Agreement. Under the Administration
Agreement, the Administrator is paid a fee computed weekly and payable monthly
at an annual rate of 0.09% of the Fund's average weekly net assets, plus $65,000
per annum. In addition, the Fund is charged certain out-of-pocket expenses by
the Administrator.
D. The Chase Manhattan Bank serves as custodian for the Fund. Custody fees are
payable monthly based on as-
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sets held in custody, investment purchase and sales activity and account
maintenance fees, plus reimbursement for certain out-of-pocket expenses.
E. During the year ended December 31, 1999, the Fund made purchases and sales
totaling $454,661,000 and $501,449,000, respectively, of investment securities
other than long-term U.S. Government securities and short-term investments.
There were no purchases or sales of long-term U.S. Government securities. At
December 31, 1999, the U.S. Federal income tax cost basis of securities was
$678,659,000 and, accordingly, net unrealized appreciation was $263,995,000 of
which $321,838,000 related to appreciated securities and $57,843,000 related to
depreciated securities. At December 31, 1999, the Fund had a capital loss
carryforward for U.S. Federal income tax purposes of approximately $169,662,000
available to offset future capital gains of which $24,788,000 will expire on
December 31, 2005 and $144,874,000 will expire on December 31, 2006. For the
year ended December 31, 1999, the Fund utilized capital loss carryforwards, for
U.S. Federal income tax purposes, of $73,784,000. To the extent that capital
gains are offset, such gains will not be distributed to the shareholders.
F. During 1999, the Fund incurred $151,000 of brokerage commissions with
Morgan Stanley & Co. Incorporated, an affiliate of the Adviser.
G. 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.
H. 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 Director's Deferred Compensation Plan
(the "Plan"). Under the 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 are 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 Plan. At December 31, 1999, the deferred fees payable, under
the Plan, totaled $128,000 and are included in Payable for Directors' Fees and
Expenses on the Statement of Net Assets.
I. On January 23, 1998, the Fund commenced a share repurchase program for
purposes of enhancing shareholder value and reducing the discount at which the
Fund's shares traded from their net asset value. For the year ended December 31,
1999, the Fund repurchased 5,040,600 shares or 7.49% of its Common Stock at an
average price per share of $8.23, including $252,000 in commissions paid, and an
average discount of 15.81% from net asset value per share. For the year ended
December 31, 1998, the Fund repurchased 4,379,934 shares or 6.11% of it's Common
Stock at an average price per share of $6.57, including $183,000 in commissions
paid, and an average discount of 16.92% 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.
J. During December 1999, the Board of Directors declared a distribution of
$0.04 per share, derived from net investment income, payable on January 14,
2000, to shareholders of record on December 21, 1999.
FEDERAL INCOME TAX INFORMATION (UNAUDITED):
- -------------------------------------------------------------------------------
For the year ended December 31, 1999, the Fund expects to pass through to
shareholders foreign tax credits totaling approximately $852,000. In addition,
for the year ended December 31, 1999, gross income derived from sources within a
foreign country totaled $10,345,000.
For the year ended December 31, 1999, the percentage of dividends paid that
qualify for the 70% dividend received deduction for corporate shareholders for
the Fund is 1.0%.
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REPORT OF INDEPENDENT ACCOUNTANTS
- ----------
To the Shareholders and Board of Directors of
Morgan Stanley Dean Witter Asia-Pacific Fund, Inc.
(formerly Morgan Stanley Asia-Pacific Fund, Inc.)
In our opinion, the accompanying statement of net assets and the related
statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Morgan Stanley Dean Witter Asia-Pacific Fund, Inc. (the "Fund") at December 31,
1999, the results of its operations for the year then ended, the changes in its
net assets for each of the two years in the period then ended and the financial
highlights for each of the five years in the period then ended, in conformity
with accounting principles generally accepted in the United States. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at December 31, 1999 by correspondence with the custodian, provide
a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
February 18, 2000
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DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the "Plan"),
each shareholder will be deemed to have elected, unless American Stock Transfer
& Trust Company (the "Plan Agent") is otherwise instructed by the shareholder 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. 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
shareholders 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 shareholders, such as banks, brokers or nominees, which 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
shareholder as representing the total amount registered in the shareholder's
name and held for the account of beneficial owners who are participating in the
Plan.
Shareholders 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 shareholders 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 Dean Witter Asia-Pacific Fund, Inc.
American Stock Transfer & Trust Company
Dividend Reinvestment and Cash Purchase Plan
40 Wall Street
New York, NY 10005
1-800-278-4353
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