UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-Q
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY
Investment Company Act file number: 811-04893
----------
THE TAIWAN FUND, INC.
(Exact name of registrant as specified in charter)
2 AVENUE DE LAFAYETTE,
P.O. Box 5049
BOSTON, MA 02206-5049
(Address of principal executive offices)(Zip code)
(Name and Address of Agent for Copy to:
Service)
The Taiwan Fund, Inc. Leonard B. Mackey, Jr., Esq.
c/o State Street Bank and Trust Clifford Chance US LLP
Company 31 West 52nd Street
Attention: Elizabeth A. Watson, New York, New York 10019
Assistant Secretary
4 Copley Place, 5th Floor
Boston, MA 02116
Registrant's telephone number, including area code: (800) 636-9242
Date of fiscal year end: August 31
Date of reporting period: November 30, 2009
ITEM 1: SCHEDULE OF INVESTMENTS
THE TAIWAN FUND, INC.
Schedule of Investments/November 30, 2009 (Showing Percentage of Net Assets)
(unaudited)
US$
SHARES VALUE
---------- ------------
COMMON STOCKS -- 92.7%
BASIC INDUSTRIES -- 31.5%
AUTOMOBILES, TIRES & ACCESSORIES -- 0.7%
Yulon Nissan Motor Co., Ltd. * 900,000 $ 1,991,361
------------
CEMENT -- 0.7%
Asia Cement Corp. 2,000,500 2,126,141
------------
CHEMICALS -- 1.2%
China Steel Chemical Corp. 1,300,000 3,405,637
------------
CONSTRUCTION & REAL ESTATE -- 1.2%
Huaku Development Co., Ltd. 500,000 1,250,816
Hung Sheng Construction Co., Ltd. 4,500,000 2,090,649
------------
3,341,465
------------
ELECTRIC & MACHINERY -- 0.7%
Yungtay Engineering Co., Ltd. 2,500,000 2,019,951
------------
FOOD -- 4.5%
Great Wall Enterprise Co., Ltd. 5,500,355 6,016,734
Uni-President Enterprises Corp. 6,000,000 7,029,429
------------
13,046,163
------------
GLASS -- 1.0%
Taiwan Glass Industrial Corp. 3,500,000 2,784,425
------------
IRON & STEEL -- 3.0%
China Steel Corp. 9,000,500 8,488,927
------------
PAPER -- 1.0%
Chung Hwa Pulp Corp. 6,000,000 2,946,021
------------
PETROLEUM SERVICES -- 3.4%
China Petrochemical Development Corp.* 6,000,000 2,218,838
Formosa Petrochemical Corp. 3,000,500 7,590,065
------------
9,808,903
------------
PLASTICS -- 6.3%
Formosa Chemicals & Fibre Corp. 2,000,000 4,126,915
Formosa Plastics Corp. 2,300,000 4,567,265
Nan Ya Plastics Corp. 5,500,000 9,315,081
------------
18,009,261
------------
RETAIL -- 2.9%
President Chain Store Corp. 2,840,000 6,663,352
Ruentex Industries, Ltd. * 1,000,000 1,678,113
------------
8,341,465
------------
RUBBER -- 2.6%
Cheng Shin Rubber Industry Co., Ltd. 3,300,000 7,455,483
------------
TEXTILE -- 1.2%
Far Eastern Textile, Ltd. 3,060,000 3,575,500
------------
TRANSPORTATION -- 1.1%
U-Ming Marine Transport Corp. 1,600,000 3,172,255
------------
TOTAL BASIC INDUSTRIES 90,512,958
------------
US$
SHARES VALUE
---------- ------------
FINANCE -- 10.2%
FINANCIAL SERVICES -- 10.2%
Cathay Financial Holding Co., Ltd. * 5,500,622 $ 9,572,542
China Life Insurance Co., Ltd. * 230,518 160,107
First Financial Holding Co., Ltd. 10,000,512 5,920,313
Fubon Financial Holding Co., Ltd. * 6,500,000 7,372,821
Mega Financial Holding Co., Ltd. 4,500,000 2,538,146
Shin Kong Financial Holding Co., Ltd. * 9,000,000 3,635,911
------------
TOTAL FINANCE 29,199,840
------------
MISCELLANEOUS -- 1.1%
ATHLETIC FOOTWARE -- 1.1%
Pou Chen Corp. 4,500,000 3,272,320
------------
TECHNOLOGY -- 49.9%
ELECTRONICS DISTRIBUTION -- 5.0%
Synnex Technology International Corp. 4,500,000 9,047,826
WPG Holdings Co., Ltd. 3,800,000 5,384,879
------------
14,432,705
------------
IC DESIGN -- 9.3%
ALI Corp. 1,200,000 2,890,083
MediaTek, Inc. 700,400 11,035,234
Novatek Microelectronics Corp. Ltd. 1,700,382 4,702,881
Realtek Semiconductor Corp. 1,200,000 3,341,309
RichTek Technology Corp. 501,250 4,688,656
------------
26,658,163
------------
OPTOELECTRONICS -- 4.8%
Au Optronics Corp. 6,800,715 6,995,359
Everlight Electronics Co., Ltd. 800,239 2,476,889
Innolux Display Corp. 3,000,000 4,251,220
------------
13,723,468
------------
OTHER ELECTRONIC -- 6.3%
Hon Hai Precision Industry Co., Ltd. 4,300,005 18,173,364
------------
PC & PERIPHERALS -- 6.4%
Catcher Technology Co., Ltd. 1,000,000 2,821,716
Chicony Electronics Co., Ltd. 1,300,790 3,031,767
Clevo Co. * 1,650,000 2,343,299
Lite-On Technology Corp. 3,000,000 4,018,149
Quanta Computer, Inc. 3,030,000 6,120,451
------------
18,335,382
------------
SEMICONDUCTOR MANUFACTURING -- 9.9%
Formosa Advanced Technologies Co., Ltd. 1,000,000 1,211,971
Siliconware Precision Industries Co. 3,000,074 3,952,986
Taiwan Semiconductor Manufacturing Co.,
Ltd. 11,200,426 21,266,851
Transcend Information, Inc. 600,000 1,883,216
------------
28,315,024
------------
See Notes to Schedule of Investments.
1
SCHEDULE OF INVESTMENTS/ November 30, 2009 (unaudited) (continued)
US$
SHARES VALUE
---------- ------------
TELECOMMUNICATIONS -- 8.2%
Chunghwa Telecom Co., Ltd. 6,000,103 $ 10,740,108
Far EasTone Telecommunications Co., Ltd. 5,000,000 5,749,091
Merry Electronics Co., Ltd. 1,400,000 2,423,320
Taiwan Mobile Co., Ltd. 2,500,000 4,700,270
------------
23,612,789
------------
TOTAL TECHNOLOGY 143,250,895
------------
TOTAL COMMON STOCKS
(Identified Cost -- $197,894,579) 266,236,013
------------
TOTAL INVESTMENTS -- 92.7%
(Cost -- $197,894,579) $66,236,0132
------------
OTHER ASSETS AND LIABILITIES, NET--7.3% 21,056,319
------------
NET ASSETS--100.0% $287,292,332
============
US$ United States Dollar
* Non-income producing
See Notes to Schedule of Investments.
2
NOTES TO SCHEDULE OF INVESTMENTS
Organization. The Taiwan Fund, Inc. (the "Fund"), a Delaware corporation, is
registered under the Investment Company Act of 1940, as amended (the "Act"), as
a diversified closed-end management investment company. The Fund concentrates
its investments in the securities listed on the Taiwan Stock Exchange. Because
of this concentration, the Fund may be subject to additional risks resulting
from future political or economic conditions in Taiwan and the possible
imposition of adverse governmental laws of currency exchange restrictions
affecting Taiwan.
Tax Basis of Investments. Cost of investments for federal income tax purposes is
substantially the same as for financial statement purposes. At November 30,
2009, aggregate gross unrealized appreciation for all securities for which there
was an excess of value over financial reporting cost was $72,216,804 and
aggregate gross unrealized depreciation for all securities for which there was
an excess of financial reporting cost over value was $3,875,370 and net
appreciation for financial reporting purposes was $68,341,434. At November 30,
2009, aggregate cost for financial reporting purposes was $197,894,579.
Security Valuation. All securities, including those traded over-the-counter for
which market quotations are readily available, are valued at the last sales
price prior to the time of determination of the Fund's net asset value per share
or, if there were no sales on such date, at the closing price quoted for such
securities (but if bid and asked quotations are available, at the mean between
the last current bid and asked prices, rather than such quoted closing price).
In certain instances where the price determined above may not represent fair
market value, the value is determined in such manner as the Board of Directors
may prescribe. Foreign securities may be valued at fair value according to
procedures approved by the Board of Directors if the closing price is not
reflective of current market values due to trading or events occurring in the
valuation time of the Fund. In addition, substantial changes in values in the
U.S. markets subsequent to the close of a foreign market may also affect the
values of securities traded in the foreign market. The value of foreign
securities may be adjusted if such movements in the U.S. market exceed a
specified threshold. Short-term investments, having a maturity of 60 days or
less, are valued at amortized cost, which approximates market value, with
accrued interest or discount earned included in interest receivable.
The Fund began using Financial Accounting Standards Board ("FASB") Accounting
Standards Codification No. 820, Fair Value Measurements ("ASC 820"), effective
October 1, 2008. In accordance with ASC 820, fair value is defined as the price
that a Fund would receive upon selling an investment in a timely transaction to
an independent buyer in the principal or most advantageous market of the
investment. ASC 820 established a three-tier hierarchy to maximize the use of
observable market data and minimize the use of unobservable inputs and to
establish classification of fair value measurements for disclosure purposes.
Inputs refer broadly to the assumptions that market participants would use in
pricing the asset or liability, including assumptions about risk, for example,
the risk inherent in a particular valuation technique used to measure fair value
including such a pricing model and/or the risk inherent in the inputs to the
valuation technique. Inputs may be observable or unobservable. Observable inputs
are inputs that reflect the assumptions market participants would use in pricing
the asset or liability developed based on market data obtained from sources
independent of the reporting entity. Unobservable inputs are inputs that reflect
the reporting entity's own assumptions about the assumptions market participants
would use in pricing the asset or liability developed based on the best
information available in the circumstances.
The three-tier hierarchy of inputs is summarized in the three broad levels
listed below.
- Level 1 - quoted prices in active markets for identical investments
- Level 2 - prices determined using other significant observable inputs
(including quoted prices for similar investments, interest rates,
prepayment speeds, credit risk, etc.)
- Level 3 - prices determined using significant unobservable inputs
(including the Fund's own assumptions in determining the fair value of
investments)
These inputs or methodology used for valuing securities are not necessarily an
indication of the risk associated with investing in those securities.
The following is a summary of the inputs used as of November 30, 2009 in valuing
the Fund's asset and liabilities carried at value:
INVESTMENTS IN SECURITIES LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
------------------------- ------------ ------- ------- ------------
Common Stocks $266,236,013 $-- $-- $266,236,013
------------ --- --- ------------
TOTAL $266,236,013 $-- $-- $266,236,013
============ === === ============
Foreign Currency Translation. The financial accounting records of the Fund are
maintained in U.S. dollars. Investment securities, other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
current exchange rate. Purchases and sales of securities, income receipts and
expense payments are translated into U.S. dollars at the exchange rate on the
dates of the transactions. Reported net realized gains and losses on foreign
currency transactions represent net gains and losses from disposition of foreign
currencies, currency gains and losses realized between the trade dates and
settlement dates of security transactions, and the difference between the amount
of net investment income accrued and the U.S. dollar amount actually received.
The effects of changes in foreign currency exchange rates on investments in
securities are not segregated in the Statement of Operations from the effects of
changes in market prices of those securities, but are included in realized and
unrealized gain or loss on investments in securities.
ITEM 2. CONTROLS AND PROCEDURES
(a) The registrant's principal executive and principal financial officers have
concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940, as
amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date
within 90 days of the filing date of this Form N-Q that includes the
disclosure required by this paragraph, based on their evaluation of the
controls and procedures required by Rule 30a-3(b) under the 1940 Act (17
CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR
270.30a-3(d)) that occurred during the registrant's last fiscal quarter
that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 3. EXHIBITS
The certifications required by Rule 30a-2(a) of the 1940 Act (17 CFR
270.30a-2(a)), are attached as exhibits to this filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
THE TAIWAN FUND, INC.
By: /s/ Andrew Chen
----------------------------------
Andrew Chen
Principal Executive Officer
President of The Taiwan Fund, Inc.
Date: January 26, 2010
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Adelina Louie
----------------------------------
Adelina Louie
Principal Financial Officer
Treasurer of The Taiwan Fund, Inc.
Date: January 26, 2010
By: /s/ Andrew Chen
----------------------------------
Andrew Chen
Principal Executive Officer
President of The Taiwan Fund, Inc.
Date: January 26, 2010