UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-4611
Exact Name of registrant as specified in charter: Aberdeen Asia-Pacific Income Fund, Inc.
Address of principal executive offices: Gateway Centre 3,
100 Mulberry Street,
Newark, New Jersey 07102
Name and address of agent for service: Mr Beverly Hendry,
300 S.E. 2nd Street, Suite #820,
Fort Lauderdale,
Florida 33301
Registrant's telephone number, including area code: 973-367-1495
Date of fiscal year end: 10/31/03
Date of reporting period: 04/30/03
Item 1 -- Reports to Stockholders
(LOGO)
Aberdeen
Asia-Pacific Income
Fund, Inc.
(GRAPHIC)
Invests primarily in Australian
and Asian debt securities.
Semi-Annual Report
April 30, 2003
Letter to Shareholders
June 13, 2003
Dear Shareholder,
We present this Semi-Annual Report which covers
the activities of Aberdeen Asia-Pacific Income
Fund, Inc. (the "Fund") for the six months
ended April 30, 2003. The Fund's investment
objective is to seek current income. The Fund
may also achieve incidental capital
appreciation.
Net Asset Value Performance: 8.9% Per Annum Return Since Inception
The Fund's net asset value ("NAV") return was
16.3% for the six months ended April 30, 2003
and 8.9% per annum since inception, assuming
reinvestment of distributions.
Share Price Performance
The Fund's share price rose 20.9% over the six
months, from $4.25 on October 31, 2002 to $5.14
on April 30, 2003. The Fund's share price on
April 30, 2003 represented a discount of 8.9%
to the NAV per share of $5.64. This represents
a narrowing of the discount to NAV of 16.0% on
October 31, 2002.
Asia: 38.2% of Total Investments invested in Asian Debt Securities
As of April 30, 2003, the Fund held 38.2% of
its total investments in Asian debt securities
(excluding New Zealand). Of the Fund's total
investments, 26.9% were held in Asian Yankee
bonds, bringing the Fund's total U.S. dollar
exposure to 31.1%.
Credit Quality: 76.1% of Total Investments Rated or
Deemed Equivalent to A or Better
The Fund's total investments have maintained a
high credit quality. As of April 30, 2003,
76.1% of the portfolio was invested in
securities where either the issue or the issuer
was rated A or better, or judged by the
Investment Manager to be of equivalent quality.
Distributions
Distributions to common shareholders for the 12
months ended April 30, 2003 totaled 42 cents
per share. Based on the share price of $5.14
on April 30, 2003, the cash distribution rate
over the 12 months then ended was 8.2%. Since
all distributions are paid after deducting
applicable withholding taxes, the effective
distribution rate may be higher for those U.S.
investors who are able to claim a tax credit.
On June 16, 2003 the Board of Directors
declared a monthly distribution of 3.5 cents
per share payable on July 11, 2003 to all
shareholders of record as of June 30, 2003.
The Board's policy is to provide investors with
a stable monthly distribution out of current
income, supplemented by realized capital gains
and, to the extent necessary, paid-in capital.
It is the Board's intention that the monthly
distribution of 3.5 cents per share be
maintained for 12 months, beginning with the
July 2003 distribution payment. This policy is
subject to regular review at the Board's
quarterly meetings, unless market conditions
require an earlier evaluation. The next review
is scheduled to take place in September 2003.
Aberdeen Asia-Pacific Income Fund, Inc. 1
Letter to Shareholders (continued)
Buy-Back Program
On March 19, 2001 the Fund announced the
approval of a share buy-back program.
Purchases of shares under this program
commenced on June 6, 2001 and, as of the date
of this report, 2,723,300 shares have been
repurchased.
Results of Annual Meeting of Shareholders
At the Annual Meeting of Shareholders held on
Tuesday, April 15, 2003, as adjourned and
reconvened on May 6, 2003 (the "Annual
Meeting"), Messrs. David L. Elsum, Peter J.
O'Connell, William J. Potter and Martin J.
Gilbert were elected by the holders of the
Fund's common stock as Class III Directors to
serve for a three-year term expiring at the
2006 Annual Meeting of Shareholders. Mr. John
T. Sheehy and Dr. Anton E. Schrafl were elected
by the holders of the Fund's preferred stock
for a one-year term expiring at the 2004 Annual
Meeting of Shareholders. Shareholders also
approved the amendment and restatement of the
Fund's charter. The amendments have the effect
of changing the terms of the Fund's nine series
of Auction Market Preferred Stock.
In an effort to provide more timely information
to shareholders, the market review and
outlook will now be published separately.
For information about the Fund, including a
market review and outlook, weekly updates of
share price, NAV and details of distributions,
please contact Aberdeen Asset Management,
Investor Relations, by:
- calling toll free on 1-800-522-5465 in the United States,
- emailing InvestorRelations@aberdeen-asset.com, or
- visiting the website at www.aberdeen-asset.us.
For information about the Aberdeen Group, visit
the Aberdeen Website at www.aberdeen-asset.com.
Sincerely,
Martin Gilbert
Chairman
All amounts are U.S. dollars unless otherwise stated.
2 Aberdeen Asia-Pacific Income Fund, Inc.
Your Board's policy is to provide investors
with a stable monthly distribution out of
current income, supplemented by realized
capital gains and, to the extent necessary,
paid-in capital.
The Fund is subject to U.S. corporate, tax and
securities laws. Under U.S. tax accounting
rules, the amount of distributable income for
each fiscal period depends on the actual
exchange rates during the entire year between
the U.S. dollar and the currencies in which
Fund assets are denominated and on the
aggregate gains and losses realized by the Fund
during the entire year.
Therefore, the exact amount of distributable
income for each fiscal year can only be
determined as of the end of the Fund's fiscal
year, October 31. However, under the U.S.
Investment Company Act of 1940, the Fund is
required to indicate the source of each
distribution to shareholders.
The Fund estimates that distributions for the
fiscal year commencing November 1, 2002,
including the distribution paid on June 13,
2003, are comprised of 70% net investment
income and 30% return of paid-in capital.
This estimated distribution composition may
vary from month to month because it may be
materially impacted by future realized gains
and losses on securities and fluctuations in
the value of the currencies in which Fund
assets are denominated.
The amount attributed as a return of capital
reflects, in part, the realization of currency
losses in the Fund's Australian bond portfolio
as a result of positioning the Fund's
investments more toward Asia. Fund assets are
marked to market, therefore the realization of
such currency losses does not impact the Fund's
net asset value. However these losses do
offset distributable income, therefore
increasing the return of capital component of
the distribution.
In January 2004, a Form 1099 DIV will be sent
to shareholders, which will state the amount
and composition of distributions and provide
information with respect to their appropriate
tax treatment.
Aberdeen Asia-Pacific Income Fund, Inc. 3
Dividend Reinvestment and Cash Purchase Plan
We invite you to participate in the Fund's
Dividend Reinvestment and Cash Purchase Plan
("the Plan") which allows you to automatically
re-invest your distributions in shares of the
Fund's common stock at favorable commission
rates. Distributions made under the Plan are
taxed to the same extent as are cash
distributions. The Plan also enables you to
make additional cash investments in shares of
at least $100 per month. Under this
arrangement, EquiServe Trust Company N.A. (the
"Plan Agent") will purchase shares for you on
the stock exchange or otherwise on the open
market on or about the 15th of each month,
unless shares of the Fund are trading at a
premium, in which case the Fund will issue
additional shares.
As a Participant in the Plan, you will have the convenience of:
Automatic reinvestment - the Plan Agent will
automatically reinvest your distributions,
allowing you to gradually grow your holdings in
the Fund;
Lower costs - shares purchased on your behalf
under the Plan will be at reduced brokerage
rates. Brokerage on share purchases is
currently 2 cents per share;
Convenience - the Plan Agent will hold your
shares in non-certificated form and will
provide a detailed record of your holdings at
the end of each distribution period.
To request a brochure containing information on
the Plan, together with an authorization form,
please contact the Plan Agent, EquiServe Trust
Company N.A., P.O. Box 43011, Providence, RI
02940-3011 or toll free on 1-800-451-6788.
4 Aberdeen Asia-Pacific Income Fund, Inc.
Report of the Investment Manager
Share Price Performance
On April 30, 2003 the Fund's share price was
$5.14, which represented a discount of 8.9% to
the NAV of $5.64. At the date of this report,
the share price was $5.69 representing a
discount of 8.4% to the NAV of $6.21.
(GRAPH)
Auction Market Preferred Stock (AMPS)
The Fund's $600 million of AMPS continued to be
well bid at the weekly auctions. The average
interest rate paid was 1.51% over the six
months ended April 30, 2003, compared with an
interest rate of 1.27% for 30-day U.S.
commercial paper over the same period. These
rates declined over the period as U.S. yields,
particularly at the short end of the curve,
continued to rally. The rates paid to
preferred shareholders have decreased further
since April 30, 2003 to a level of 1.24% as of
the date of this report.
Aberdeen Asia-Pacific Income Fund, Inc. 5
Report of the Investment Manager (continued)
Over the past year, the impact of AMPS on the
Fund has been positive, as the Australian
dollar strengthened against the U.S. dollar and
key Asian currencies followed a similar trend.
The differential between AMPS funding rates and
the yields at which the Fund invests has
remained positive as U.S. interest rates have
remained at historic lows, while bond movements
detracted slightly as ongoing geopolitical
risks provided a volatile environment for
global bond yields.
On September 16, 2002 the Fund entered into a
two-year interest rate swap agreement in order
to hedge one-third of the Fund's outstanding
issues of AMPS. Under the original terms of
the agreement the Fund received a floating rate
of interest (one month USD-LIBOR BBA rate)
based on a notional amount of US$200,000,000
and paid interest at a fixed rate of 2.46%.
The fixed rate was re-priced to 2.10% on
October 1, 2002, to 1.7175% on December 24,
2002 and then to 1.37% on February 18, 2003.
The Board of Directors has resolved to amend
the Fund's policies with respect to derivatives
to increase the percentage of the Fund's AMPS
liabilities which may be hedged pursuant to
interest rate swaps from one-third to up to
100% of the AMPS liabilities. A significant
type of risk associated with interest rate
swaps is the risk that the counterparty may
default or file for bankruptcy, in which case
the Fund would bear the risk of loss of the
amount expected to be received under the swap
agreement. There can be no assurance that the
Fund will have an interest rate swap in place
at any given time nor can there be any
assurance that, if an interest rate swap is in
place, it will be successful in hedging the
Fund's interest rate risk with respect to the
AMPS. The implementation of this strategy is at
the discretion of the AMPS Pricing Committee of
the Board of Directors.
PORTFOLIO COMPOSITION
Quality of Investments
As of April 30, 2003, 76.1% of the Fund's total
investments were invested in securities where
either the issue or the issuer was rated A or
better by Standard & Poor's Corporation or
Moody's Investors Service, Inc. or, if unrated,
were judged to be of equivalent quality by the
Investment Manager. The following table shows
the ratings of securities held by the Fund as
of April 30, 2003, compared with the previous
six and twelve months:
AAA/Aaa AA/Aa A BBB/Baa BB/Ba* B* CCC*
Date % % % % % % %
April 30, 2003 50.5 7.3 18.3 11.4 9.3 3.2 0.0
October 31, 2002 46.7 11.5 12.9 16.7 9.7 2.4 0.1
April 30, 2002 49.3 13.6 10.3 17.6 6.8 2.4 0.0
* Below investment grade
6 Aberdeen Asia-Pacific Income Fund, Inc.
Report of the Investment Manager (continued)
Geographic Composition
The table below shows the geographical
composition (i.e. with Yankees allocated into
country of issuance) of the Fund's total
investments as of April 30, 2003, compared with
the previous six and twelve months:
Asia
Australia (including NZ) United States
Date % % %
April 30, 2003 57.1 38.7 4.2
October 31, 2002 56.3 42.8 0.9
April 30, 2002 58.7 40.2 1.1
(GRAPH)
Aberdeen Asia-Pacific Income Fund, Inc. 7
Report of the Investment Manager (continued)
Currency Composition
The table below shows the currency composition
of the Fund's total investments as of April 30,
2003, compared with the previous six and twelve
months:
Australian Asian Currencies
Dollar (including NZ dollar) US Dollar* Euro
Date % % % %
April 30, 2003 57.1 11.3 31.1 0.5
October 31, 2002 56.3 14.4 29.1 0.2
April 30, 2002 58.7 14.1 27.0 0.2
* Includes Asian Yankee Bonds: 26.9% on April 30, 2003, 26.4% on
October 31, 2002, 25.9% on April 30, 2002.
Maturity Composition
On April 30, 2003 the duration of the portfolio
was 4.4 years, compared with 4.5 years on
October 31, 2002. The following table shows
the maturity composition of the Fund's
portfolio as of April 30, 2003, compared with
the previous six and twelve months:
Under 3 Years 3 to 5 Years 5 to 10 Years 10 Years & Over
Date % % % %
April 30, 2003 22.8 24.0 38.6 14.6
October 31, 2002 24.7 21.6 38.1 15.6
April 30, 2002 27.4 18.3 43.2 11.1
8 Aberdeen Asia-Pacific Income Fund, Inc.
Report of the Investment Manager (concluded)
Sectoral Composition
The following shows the sectoral composition of
the portfolio as of April 30, 2003:
US Dollar and
Domestic Currency Bonds Euro Bonds
Asia United States
(Including (Cash/
Australia New Zealand) Yankees Bonds) Euros
% % % % %
Government* 20.9 8.0 7.8 0.0 0.2
Semi Government** 20.8 1.8 6.0 0.0 0.0
Government Bank 0.0 0.0 0.0 0.0 0.0
Utility 4.2 0.0 3.8 0.0 0.0
Supranational 2.3 0.0 0.0 0.0 0.0
Bank/Finance Company*** 8.9 1.3 6.3 4.2 0.3
Corporate 0.0 0.2 3.0 0.0 0.0
* Includes government guaranteed debt.
** Includes state government guaranteed banks.
*** Includes cash held by the Fund's custodian and repurchase agreements.
(GRAPH)
Aberdeen Asia-Pacific Income Fund, Inc. 9
Summary of Key Market Rates
The following table summarizes the movements of key interest rates
and currencies over the last six and twelve month periods:
April 30 October 31 April 30
2003 2002 2002
Australia
90 day bank bills 4.81% 4.88% 4.63%
10 year bonds 5.28% 5.57% 6.08%
Australian Dollar $ 0.63 $ 0.56 $ 0.54
New Zealand
90 day bank bills 5.52% 5.91% 5.73%
10 year bonds 5.90% 6.32% 6.72%
NZ Dollar $ 0.56 $ 0.49 $ 0.45
South Korea
90 day T-bills 4.36% 4.78% 4.53%
10 year bonds 4.92% 5.99% 7.23%
South Korean Won* W 1215.00 W 1218.50 W 1294.05
Thailand
90 day deposits 1.50% 1.75% 2.00%
10 year bonds 3.42% 3.79% 5.62%
Thai Baht* B 42.87 B 43.28 B 43.26
Philippines
90 day T-bills 7.66% 5.80% 4.72%
10 year bonds 12.55% 12.65% 13.38%
Philippine Peso* P 52.48 P 53.13 P 50.63
Malaysia
90 day T-bills 2.79% 2.71% 2.73%
10 year bonds 3.68% 3.79% 4.70%
Malaysia Ringgit* R 3.80 R 3.80 R 3.80
Singapore
90 day T-bills 0.55% 0.95% 0.78%
10 year bonds 2.10% 3.04% 3.91%
Singapore Dollar* S$ 1.78 S$ 1.77 S$ 1.81
US$ Yankee Bonds**
South Korea 3.86% 4.10% 5.52%
Malaysia 4.13% 4.97% 6.18%
Philippines 7.06% 7.71% 7.79%
Hong Kong 3.79% 4.46% 5.93%
* These currencies are quoted Asian currency per U.S. dollar. The
Australian and New Zealand dollars are quoted U.S. dollars per currency.
** Sovereign issues.
Aberdeen Asset Managers (C.I.) Limited
June 2003
10 Aberdeen Asia-Pacific Income Fund, Inc.
Portfolio of Investments (unaudited)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
LONG-TERM INVESTMENTS--117.7%
AUSTRALIA--71.6%
Government and Semi-Government--49.0%
Commonwealth of Australia--26.6%
A$
Australia Postal Corporation
22,000 6.00%, 3/25/09 -- AAA $ 14,133,651
Commonwealth Bank of
Australia
12,000 5.25%, 12/1/04 Aaa AAA 7,568,906
8,000 6.00%, 9/1/05 Aaa AAA 5,139,620
20,000 6.75%, 12/1/07 Aaa AAA 13,386,834
4,000 6.25%, 2/10/09 Aaa A+ 2,524,695
10,000 6.25%, 9/1/09 Aaa AAA 6,596,801
Commonwealth of Australia
40,000 9.00%, 9/15/04 Aaa AAA 26,455,865
18,450 7.50%, 7/15/05 Aaa AAA 12,232,671
10,000 10.00%, 2/15/06 Aaa AAA 7,115,157
5,500 6.75%, 11/15/06 Aaa AAA 3,662,439
7,500 10.00%, 10/15/07 Aaa AAA 5,643,003
72,000 8.75%, 8/15/08 Aaa AAA 52,850,556
117,000 7.50%, 9/15/09 Aaa AAA 82,658,893
87,000 5.75%, 6/15/11 Aaa AAA 56,306,379
147,000 6.50%, 5/15/13 Aaa AAA 100,411,481
--------------
396,686,951
--------------
New South Wales--5.8%
New South Wales Treasury
Corporation
54,000 12.60%, 5/1/06 Aaa AAA 40,990,919
12,000 8.00%, 3/1/08 -- AAA 8,436,602
35,000 7.00%, 12/1/10 Aaa AAA 24,171,912
20,000 6.00%, 5/1/12 Aaa AAA 13,036,026
--------------
86,635,459
--------------
Northern Territory--0.8%
Northern Territory Treasury
8,000 6.50%, 7/15/05 -- -- 5,131,513
10,000 5.75%, 9/14/07 -- -- 6,463,208
--------------
11,594,721
--------------
Queensland--4.5%
Queensland Treasury
Corporation
20,000 6.50%, 6/14/05 Aaa AAA 12,964,150
15,200 6.00%, 7/14/09 Aaa AAA 9,914,273
40,000 6.00%, 6/14/11 Aaa AAA 26,105,707
10,000 6.00%, 10/14/15 Aaa AAA 6,516,472
17,000 6.00%, 6/14/21 Aaa AAA 11,145,821
--------------
66,646,423
--------------
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 11
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
South Australia--2.5%
A$
South Australian Financing
Authority
55,000 7.50%, 10/15/07 -- AA+ $ 37,775,696
--------------
Tasmania--0.5%
Tasmanian Public Finance
Corporation
10,000 9.00%, 11/15/04 -- AAA 6,639,758
--------------
Victoria--4.3%
Treasury Corporation of
Victoria
10,000 6.00%, 11/15/06 Aaa AAA 6,484,373
20,500 10.25%, 11/15/06 Aaa AAA 15,049,600
25,000 7.50%, 8/15/08 Aaa AAA 17,361,348
40,000 5.50%, 9/15/10 Aaa AAA 25,334,541
--------------
64,229,862
--------------
Western Australia--4.0%
Western Australia Treasury
Corporation
26,000 8.00%, 10/15/07 Aaa AAA 18,185,604
50,000 7.50%, 10/15/09 Aaa AAA 35,111,894
10,000 7.00%, 4/15/11 Aaa AAA 6,909,470
--------------
60,206,968
--------------
Total Australian government and
semi-government
(cost $669,773,230) 730,415,838
--------------
Eurobonds--15.5%
Banking and Finance--7.7%
ANZ Banking Corporation
10,000 6.75%, 3/22/12 Aa3 A+ 6,509,631
Bank Austria AG
11,278 10.875%, 11/17/04 Aa3 -- 7,611,959
BHP Finance Limited
15,000 6.25%, 8/15/08 A2 A 9,604,913
Commonwealth Bank of
Australia
10,000 9.00%, 8/15/05 Aaa AAA 6,807,910
Dexia Municipal Agency
15,000 6.00%, 10/15/07 Aaa AAA 9,705,097
Federal National Mortgage
Association Global
52,065 6.375%, 8/15/07 Aaa AAA 34,246,583
GE Capital Australia Limited
10,000 6.25%, 4/15/05 Aaa AAA 6,424,931
10,000 6.75%, 9/15/07 Aaa AAA 6,571,404
12 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
A$
Jem Bonds Limited
10,000 9.00%, 7/15/06 Aaa AAA $ 6,964,484
KFW International Finance
5,513 9.125%, 7/26/05 Aaa AAA 3,752,444
Landwirtschaft Rentenbank
10,000 6.00%, 9/15/09 Aaa AAA 6,485,703
Principal Finance Global Fund
16,650 7.00%, 7/15/05 -- AA 10,790,820
--------------
115,475,879
--------------
Semi-Government and Local Government--4.7%
New South Wales Treasury
Corporation
7,000 10.50%, 12/7/04 Aaa AAA 4,748,991
7,000 9.25%, 6/20/06 Aaa AAA 4,761,784
40,000 8.00%, 3/1/08 Aaa AAA 28,133,390
Northern Territory Treasury
5,000 10.03%, 8/9/05 Aa2 -- 3,476,992
Queensland Treasury
Corporation
20,000 12.00%, 6/15/05 Aaa AAA 14,357,626
20,000 8.00%, 9/14/07 Aaa AAA 13,983,171
--------------
69,461,954
--------------
Supranational Global--3.1%
EFIC
2,000 11.00%, 12/29/04 Aaa AAA 1,369,397
Eurofima
8,170 9.875%, 1/17/07 Aaa AAA 5,940,501
30,000 6.50%, 8/22/11 Aaa AAA 20,069,837
European Investment Bank
19,000 6.00%, 7/15/05 Aaa AAA 12,234,539
Kingdom of Sweden
8,287 7.875%, 4/23/07 Aaa AA+ 5,710,575
Quebec Province
1,500 5.75%, 2/15/06 A1 A+ 956,634
--------------
46,281,483
--------------
Total Australian eurobonds
(cost $221,398,770) 231,219,316
--------------
Corporate Bonds--7.1%
Banking and Finance--1.4%
DSL Bank
15,000 6.25%, 11/15/06 Aaa AAA 9,747,228
St. George Bank Limited
5,000 6.00%, 9/25/12 A3 A- 3,127,438
Suncorp Metway
6,500 5.25%, 11/15/06 A2 A- 4,063,026
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 13
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
A$
Westpac Banking Corporation
5,000 7.00%, 8/2/10 A1 A+ $ 3,241,819
--------------
20,179,511
--------------
Floating Rate Notes*--0.0%
Crusade Trust
624 5.115%, 7/10/29 Aaa AAA 390,140
--------------
Services--5.7%
Airservices Australia
5,000 6.50%, 11/15/06 -- AAA 3,262,353
British American Tobacco
Corporation
12,500 6.50%, 11/15/06 -- AAA 8,086,130
GPT Management Limited
10,000 6.50%, 10/15/07 -- A+ 6,478,919
ING Office Finance
4,500 6.25%, 8/19/08 -- AAA 2,794,989
Melbourne Airport
2,000 6.75%, 6/15/08 Aaa AAA 1,312,506
NRMA Insurance Limited
13,000 6.35%, 11/27/12 -- AA- 8,237,097
Snowy Hydro Limited
10,000 5.75%, 2/25/10 Aaa AAA 6,194,635
Southern Cross Airports
Company Limited
15,500 6.02%, 10/11/07 Aaa AAA 9,819,360
Telstra Corporation
7,000 8.00%, 9/15/04 Aa3 AA- 4,554,640
30,000 12.00%, 5/15/06 Aa3 AA+ 22,286,629
10,000 7.25%, 11/15/12 Aa3 AA- 6,746,401
2,000 8.75%, 1/15/20 Aa3 AA+ 1,550,689
Wesfarmers Limited
6,000 6.25%, 8/27/07 -- A- 3,851,085
--------------
85,175,433
--------------
Total Australian corporate bonds
(cost $97,469,850) 105,745,084
--------------
Total Australian long-term investments
(cost $988,641,850) 1,067,380,238
--------------
EUROPEAN COMMUNITY--0.6%
Government Bonds--0.3%
EUR
Republic of Philippines
3,800 9.125%, 2/22/10
(cost $3,990,234) Ba1 BB 4,352,123
--------------
14 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
Corporate Bonds--0.3%
EUR
Oversea - Chinese Banking
Corporation
4,000 7.25%, 9/6/11
(cost $3,544,981) A1 BBB+ $ 5,111,282
--------------
Total European Community long-term
investments
(cost $7,535,215) 9,463,405
--------------
JAPAN--0.3%
Government Bonds--0.3%
JPY
Inchon Metropolitan City
500,000 3.70%, 4/26/06
(cost $4,260,242) -- -- 4,495,145
--------------
KOREA--4.9%
Government Bonds--4.9%
KRW
Korea Deposit Insurance
Fund Bond
2,000,000 15.00%, 7/3/04 A3 A+ 1,854,815
Korea Treasury Bonds
19,170,000 7.15%, 4/11/06 A3 A+ 16,956,378
10,000,000 5.64%, 10/17/06 A3 A+ 8,535,802
9,800,000 6.15%, 7/10/07 A3 A+ 8,587,549
16,674,000 6.91%, 7/18/11 A3 A+ 15,688,656
USD
South Korea National
Debt - Embarc
12,000 4.991%, 6/30/04 A3 A+ 10,042,800
10,000 4.796%, 10/9/07(a) A3 A+ 8,540,000
2,900 4.811%, 10/27/07 A3 A+ 2,476,600
--------------
Total Korea long-term investments
(cost $66,150,310) 72,682,600
--------------
MALAYSIA--0.5%
Government Bonds--0.3%
MYR
Malaysia Government Bonds
3,000 5.00%, 4/15/05 A3 A+ 820,956
3,890 6.844%, 10/1/09 A3 A+ 1,237,271
8,500 3.833%, 9/28/11 A3 A+ 2,302,034
--------------
Total Malaysia government bonds
(cost $4,030,273) 4,360,261
--------------
Corporate Bonds--0.2%
British American Tobacco
Corporation
9,000 7.10%, 11/2/04 -- -- 2,500,816
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 15
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
MYR
YTL Corporation Berhad
5,000 8.50%, 6/29/04 -- -- $ 1,392,105
--------------
Total Malaysia corporate bonds
(cost $3,897,916) 3,892,921
--------------
Total Malaysia long-term investments
(cost $7,928,189) 8,253,182
--------------
PHILIPPINES--0.9%
Government Bonds--0.7%
PHP
Philippine Government Bonds
372,800 18.00%, 11/26/08 Baa3 BBB+ 8,876,936
95,000 13.00%, 4/25/12 Baa3 BBB+ 1,877,893
--------------
Total Philippines government bonds
(cost $11,003,981) 10,754,829
--------------
Corporate Bonds--0.2%
USD
Merrill Lynch & Co.,
Incorporated
2,700 12.50%, 9/17/12
(cost $2,660,184) -- -- 2,382,750
--------------
Total Philippines long-term investments
(cost $13,664,165) 13,137,579
--------------
SINGAPORE--0.8%
Government Bonds--0.6%
SGD
Singapore Government Bonds
2,000 4.00%, 2/1/05 Aaa AAA 1,189,028
11,522 4.625%, 7/1/10 Aaa AAA 7,668,788
--------------
Total Singapore government bonds
(cost $7,715,091) 8,857,816
--------------
Corporate Bonds--0.2%
Oversea - Chinese Banking
Corporation
850 5.00%, 9/6/11 A1 BBB+ 535,965
Pacific Life Funding LLC
3,250 3.61%, 4/16/07 Aa3 AA+ 1,937,416
--------------
Total Singapore corporate bonds
(cost $2,421,426) 2,473,381
--------------
Total Singapore long-term investments
(cost $10,136,517) 11,331,197
--------------
THAILAND--1.1%
Government Bonds--1.1%
THB
Thailand Government Bonds
60,000 6.25%, 6/15/04 Baa1 A- 1,470,096
63,100 8.50%, 10/14/05 Baa1 A- 1,711,482
16 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
THB
44,000 8.00%, 12/8/06 Baa1 A- $ 1,248,637
68,000 5.60%, 7/7/07 Baa1 A- 1,818,984
85,000 8.50%, 12/8/08 Baa1 A- 2,639,521
30,000 5.375%, 11/30/11 Baa1 A- 828,193
129,000 4.125%, 11/1/12 Baa1 A- 3,233,766
50,000 5.50%, 1/18/17 Baa1 A- 1,365,752
70,000 5.125%, 11/8/22 Baa1 A- 1,812,124
--------------
Total Thailand long-term investments
(cost $14,858,907) 16,128,555
--------------
UNITED STATES--37.0%
Yankee Bonds--37.0%
USD
AES China Generating Co.
Limited
5,200 10.125%, 12/15/06 B1 B+ 5,252,000
Bangkok Bank Public Company
8,500 8.75%, 3/15/07 Ba2 B+ 9,870,263
14,000 9.025%, 3/15/29 Ba2 B+ 15,333,668
Bangkok Sentral Ng
4,000 8.60%, 6/15/27 Ba1 BB 3,324,000
Cable & Wireless Optus
Finance
5,800 8.00%, 6/22/10 A2 A+ 6,803,536
Cho Hung Bank
5,500 6.95%, 1/7/05 Baa3 B+ 6,283,750
1,500 11.875%, 4/1/10 Baa3 B+ 1,701,193
CITIC Ka Wah Bank
8,200 7.625%, 7/5/11 Baa3 -- 8,951,419
6,850 9.125%, 5/30/12 Baa3 -- 7,596,650
CLP Power HK Finance
2,500 6.25%, 5/8/12 A3 A+ 2,774,202
CNOOC Finance Limited
4,875 6.375%, 3/8/12 Baa1 BBB 5,455,466
Development Bank of Singapore
11,500 7.657%, 3/15/11 A1 -- 13,241,187
5,000 7.125%, 5/15/11 Aa3 A- 5,760,000
Flextronics International Limited
2,500 9.875%, 7/1/10 Ba2 BB- 2,800,000
Freeport McMoran Copper &
Gold
5,250 10.125%, 2/1/10 B2 B- 5,512,500
Globe Telecom Incorporated
9,000 13.00%, 8/1/09 Ba3 BB 10,516,500
4,750 9.75%, 4/15/12 Ba3 BBB+ 4,999,375
Hana Funding Limited
4,600 8.748%, 12/17/12 -- BB+ 4,818,500
Hanvit Bank
4,000 11.75%, 3/1/10 Baa3 -- 4,480,000
3,500 12.75%, 3/1/10 Baa3 -- 3,985,625
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 17
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
USD
Hutchison Whampoa
International Limited
6,000 7.00%, 2/16/11 A3 AAA $ 6,482,754
6,900 6.50%, 2/13/13 A3 AAA 7,019,681
Hysan Limited
4,000 7.00%, 2/1/12 Baa1 BBB+ 4,370,587
Hyundai Motor Co. Limited
2,000 7.33%, 12/12/05 Ba2 BB+ 2,173,570
Industrial Bank of Korea
3,900 4.375%, 12/4/07 A3 BBB+ 3,910,717
Industrial Finance Corporation
1,000 7.375%, 1/14/07 Ba1 BB+ 1,106,051
Jardine Strategic Finance
Limited
3,500 6.375%, 11/8/11 Baa1 BBB+ 3,684,655
Kia Motors Corporation
4,000 9.375%, 7/11/06 Ba3 BBB+ 4,520,000
Kingdom of Thailand
2,700 7.07%, 9/30/13 Baa3 BBB- 2,783,937
Kookmin Bank
2,400 4.625%, 12/10/07 A3 BBB+ 2,426,920
Korea Development Bank
3,000 5.25%, 11/16/06 A3 A- 3,145,500
Korea Electric Power
Corporation
9,000 7.75%, 4/1/13 A3 A- 10,697,013
10,000 7.00%, 2/1/27 A3 A- 10,946,540
Korea First Bank
6,000 5.75%, 3/10/13 Ba1 BBB+ 5,892,042
Korea Hydro & Nuclear Power
2,750 4.25%, 1/29/08 A3 A- 2,721,083
Kowloon Canton Ry
Corporation
16,500 8.00%, 3/15/10 A3 A+ 20,280,117
Kumgang Korea Chemical Co.
Limited
3,500 7.625%, 6/20/08 Baa3 BBB 3,952,520
LG Caltex Oil Corporation
5,000 7.50%, 7/15/07 Baa2 BBB- 5,614,750
3,000 7.75%, 7/25/11 Baa2 BBB- 3,513,900
Malayan Banking Berhad
6,400 6.125%, 7/6/12 Baa1 BBB- 6,786,289
Malaysia (Sovereign)
5,000 8.75%, 6/1/09 Baa1 BBB+ 6,189,000
9,590 7.50%, 7/15/11 Baa1 BBB+ 11,249,070
18 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
USD
MEI Euro Finance Limited
5,600 10.00%, 3/19/07 -- B+ $ 5,628,000
Metropolitan Bank & Trust
Company
2,400 8.50%, 11/20/12 Ba1 -- 2,376,000
National Power Corporation
7,000 8.40%, 12/15/16 Ba1 BB 6,512,912
Oversea - Chinese Banking
Corporation
13,000 7.75%, 9/6/11 A1 BBB+ 15,435,660
PCCW-HKTC Capital Limited
10,400 7.75%, 11/15/11 Baa1 BBB+ 11,157,159
People's Republic of China
10,000 9.00%, 1/15/96 A3 BBB 10,881,680
Petroliam Nasional Berhad
19,000 7.75%, 8/15/15 Baa1 BBB+ 21,925,735
Petronas Capital Limited
6,800 7.00%, 5/22/12 Baa1 BBB+ 7,548,000
4,000 7.875%, 5/22/22 Baa1 BBB+ 4,380,000
Philippine Long Distance
Telecom
800 9.875%, 8/1/05 Ba3 BBB+ 849,200
2,000 10.625%, 5/15/07 Ba3 BB 2,030,000
1,000 11.375%, 5/15/12 Ba3 BB 1,008,925
1,000 8.35%, 3/6/17 Ba3 BBB+ 702,500
Pohang Iron & Steel
Corporation
4,000 7.125%, 11/1/06 Baa2 BBB+ 4,452,347
PT Bank Mandiri Cayman
1,600 10.625%, 8/2/12 B3 CCC 1,728,000
PT Bank Negara Indonesia
1,500 10.00%, 11/15/12 B3 CCC 1,608,750
PTT Exploration & Production
6,500 7.625%, 10/1/06 Baa3 BBB- 7,288,125
Quezon Power (Philippines)
Limited
5,308 8.86%, 6/15/17 B2 B- 4,080,141
Reliance Industries Limited
7,250 10.25%, 1/15/97 Ba2 BBB+ 7,016,978
Republic of Philippines
3,000 7.50%, 9/11/07 Ba1 BB 3,065,625
27,750 8.375%, 3/12/09 Ba1 BB 28,582,500
11,250 9.875%, 3/16/10 Ba1 BB 12,417,188
14,100 9.375%, 1/18/17 Ba1 BB 14,628,750
2,000 6.50%, 12/1/17 Ba1 BB 1,908,738
23,950 9.875%, 1/15/19 Ba1 BB 24,908,000
3,500 9.50%, 10/21/24 Ba1 BB 3,860,325
9,936 10.625%, 3/16/25 Ba1 BB 10,730,880
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 19
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
USD
Republic of South Korea
14,500 8.875%, 4/15/08 A3 A- $ 17,744,375
Singapore Telecom
2,600 6.375%, 12/1/11 A1 AA- 2,853,500
SK Corporation
2,000 7.50%, 5/31/06 Ba2 BBB- 2,220,534
SM Investors Corporation
4,400 8.00%, 10/16/07 -- -- 4,433,000
Telekom Malaysia
3,000 7.875%, 8/1/25 Baa3 BBB+ 3,197,880
Tenaga Nasional Berhad
7,750 7.625%, 4/1/11 Baa3 BBB+ 8,801,494
5,000 7.50%, 11/1/25 Baa3 BBB 4,898,500
14,000 7.50%, 1/15/96 Baa3 BBB 8,978,200
Thai Farmers Bank PLC
4,700 8.25%, 8/21/16 Ba2 B+ 5,099,500
Total Access Communication
Public
7,150 8.375%, 11/4/06 B1 BBB+ 7,465,315
URC Philippines
3,800 9.00%, 2/6/08 Ba3 BB 3,788,125
Woori Bank
3,500 3.625%, 10/10/05 Baa2 BBB- 3,530,092
3,500 4.50%, 10/10/07 Baa2 BBB- 3,483,786
--------------
Total United States long-term
investments
(cost $490,500,731) 552,132,949
--------------
Total long-term investments
(cost $1,603,676,126) 1,755,004,850
--------------
SHORT-TERM INVESTMENTS--20.1%
AUSTRALIA--7.1%
Government and Semi-Government--3.8%
Commonwealth of Australia--2.2%
A$
Commonwealth Bank of Australia
5,000 6.00%, 8/1/03 Aaa AAA 3,136,825
2,800 7.625%, 8/5/03 Aa3 AA- 1,763,192
Commonwealth of Australia
45,000 9.50%, 8/15/03 Aaa AAA 28,543,851
--------------
33,443,868
--------------
Victoria--1.6%
Treasury Corporation of
Victoria
36,000 12.50%, 10/15/03 Aaa AAA 23,309,573
--------------
Total Australian government and
semi-government
(cost $70,037,295) 56,753,441
--------------
20 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Portfolio of Investments (unaudited) (continued)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
Eurobonds--1.9%
Banking and Finance--1.9%
A$
GE Capital Australia Limited
45,000 6.25%, 8/15/03
(cost $24,056,080) Aaa AAA $ 28,255,625
--------------
Corporate Bonds--0.1%
Services--0.1%
Telstra Corporation
2,000 7.80%, 7/17/03
(cost $1,507,920) Aa3 AA+ 1,258,770
--------------
Demand Deposits--1.3%
Banque National de Paris
Demand Deposit
32,200 4.50%, 5/1/03
(cost $19,500,641) Aaa AAA 20,142,566
--------------
Total Australian short-term investments
(cost $115,101,936) 106,410,402
--------------
KOREA--7.0%
Government Bonds--5.5%
KRW
Korea Deposit Insurance
Fund Bond
10,000,000 9.99%, 10/23/03 A3 A+ 8,447,737
19,000,000 8.72%, 3/12/04 A3 A+ 16,336,872
Korea Monetary Stabilization
Bond
10,000,000 Zero Coupon, 7/31/03 A3 A+ 8,142,387
Korea Treasury Bonds
10,000,000 7.70%, 8/16/03 A3 A+ 8,313,580
10,000,000 5.07%, 10/8/03 A3 A+ 8,247,737
USD
South Korea National Debt -
Embarc
5,500 7.70%, 8/18/03(b) A3 A+ 4,621,650
30,000 6.448%, 8/19/03 A3 A+ 25,209,000
3,500 4.924%, 3/2/04 A3 A+ 2,929,150
--------------
Total Korea government bonds
(cost $82,751,577) 82,248,113
--------------
Corporate Bonds--1.5%
Hongkong & Shanghai Banking
Corporation
6,250 Zero Coupon, 7/15/03 -- -- 6,203,166
16,500 Zero Coupon, 7/24/03 -- -- 16,341,618
--------------
Total Korea corporate bonds
(cost $22,540,098) 22,544,784
--------------
Total Korea short-term investments
(cost $105,291,675) 104,792,897
--------------
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 21
Portfolio of Investments (unaudited) (concluded)
April 30, 2003
Principal
Amount
Local
Currency** Moody's S&P Value
(000) Description Rating Rating (US$)
----------------------------------------------------------------------------------------------------------
NEW ZEALAND--0.0%
Demand Deposits--0.0%
NZD
New Zealand Call Deposit
492 4.50%, 5/1/03
(cost $210,392) Aaa AAA $ 275,271
--------------
THAILAND--0.1%
Government Bonds--0.1%
THB
Thailand Government Bonds
34,400 8.25%, 10/14/03
(cost $929,742) Baa1 A- 825,630
--------------
UNITED STATES--5.9%
Repurchase Agreement--5.9%
USD
87,294 State Street Bank & Trust Company
1.05% due 5/1/03 in the amount of
$87,296,546 (cost $87,294,000;
collateralized by United States
Treasury Bonds 12.50% due 8/15/14;
value including accrued
interest-$89,060,700) Aaa AAA 87,294,000
--------------
Total short-term investments
(cost $308,827,745) 299,598,200
--------------
Total Investments--137.8%
(cost $1,912,503,871) 2,054,603,050
Other assets in excess of liabilities--2.5% 36,805,578
Liquidation value of preferred stock--(40.3%) (600,000,000)
--------------
Net Assets Applicable to Common Shareholders--100% $1,491,408,628
--------------
--------------
Net asset value per common share ($1,491,408,628 / 264,654,000
shares of common stock issued and outstanding) $ 5.64
--------------
--------------
------------------------------
* The interest rate reflected for floating rate notes is the rate in effect at
April 30, 2003.
** Portfolio Securities are listed in the currency in which they are traded.
A$--Australian dollar
EUR--Euro
JPY--Japanese yen
KRW--South Korean won
MYR--Malaysian ringgit
NZD--New Zealand dollar
PHP--Philippine peso
SGD--Singapore dollar
THB--Thailand baht
USD--United States dollar
(a) Value of security is linked to the value of Government of Korea Bank 4.796%,
10/9/07 and the movement of the South Korean won.
(b) Value of security is linked to the value of Government of Korea 7.70%,
8/18/03 and the movement of the South Korean won.
22 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Statement of Assets and Liabilities (unaudited)
April 30, 2003
Assets
Investments, at value (cost $1,912,503,871).................. $2,054,603,050
Foreign currency, at value (cost $7,644,476)................. 8,324,271
Cash......................................................... 500,362
Interest receivable.......................................... 35,767,896
Receivable for investments sold.............................. 4,237,438
Unrealized appreciation on interest rate and currency swaps.. 407,784
Unrealized appreciation on forward currency contracts........ 1,040,799
Due from broker-variation margin............................. 349,366
Other assets................................................. 297,310
--------------
Total assets............................................. 2,105,528,276
--------------
Liabilities
Dividends payable-common stock............................... 9,262,890
Withholding taxes payable.................................... 1,513,706
Payable for investments purchased............................ 867,750
Investment management fee payable............................ 860,302
Accrued expenses and other liabilities....................... 768,604
Dividends payable-preferred stock............................ 607,499
Administration fee payable................................... 165,671
Unrealized depreciation on forward currency contracts........ 36,697
Unrealized depreciation on interest rate swaps............... 36,529
--------------
Total liabilities........................................ 14,119,648
--------------
Preferred stock ($.01 par value per share and $25,000
liquidation value per share applicable to 24,000 shares;
Note 5).................................................... 600,000,000
--------------
Net Assets Applicable to Common Shareholders................. $1,491,408,628
--------------
--------------
Net assets were composed of:
Common stock:
Par value ($.01 per share, applicable to 264,654,000
shares)................................................ $ 2,646,540
Paid-in capital in excess of par......................... 1,813,855,084
--------------
1,816,501,624
Accumulated net investment loss............................ (58,037,101)
Accumulated net realized loss on investments............... (12,468,372)
Net unrealized appreciation on investments................. 89,039,666
Accumulated net realized and unrealized foreign exchange
losses................................................... (343,627,189)
--------------
Net Assets Applicable to Common Shareholders................. $1,491,408,628
--------------
--------------
Net asset value per common share: ($1,491,408,628 / 264,654,000
shares of common stock issued and outstanding)............. $5.64
--------------
--------------
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 23
Statement of Operations (unaudited)
Six Months Ended April 30, 2003
Net Investment Income
Income
Interest (net of foreign withholding taxes of
$2,924,055)............................................ $ 63,389,929
-------------
Expenses
Investment management fee................................ 5,330,736
Administration fee....................................... 1,184,488
Custodian's fees and expenses............................ 1,035,000
Auction agent's fees and broker commissions.............. 800,000
Legal fees and expenses.................................. 600,000
Reports to shareholders.................................. 440,000
Directors' fees and expenses............................. 283,000
Insurance expense........................................ 245,000
Transfer agent's fees and expenses....................... 215,000
Rights offering expense.................................. 100,000
Independent auditor's fees and expenses.................. 93,000
Investor relations fees and expenses..................... 90,000
Miscellaneous............................................ 34,016
-------------
Total operating expenses................................. 10,450,240
-------------
Net investment income...................................... 52,939,689
-------------
Realized and Unrealized Gains (Losses) on Investments
and Foreign Currencies
Net realized gain (loss) on:
Investment transactions.................................. 13,369,705
Interest rate and currency swaps......................... (1,945,595)
Financial futures transactions........................... (416,692)
-------------
11,007,418
-------------
Net change in unrealized appreciation (depreciation) on:
Investments.............................................. 9,311,928
Interest rate and currency swaps......................... (351,902)
Financial futures contracts.............................. (269,167)
-------------
8,690,859
-------------
Net gain on investments.................................... 19,698,277
-------------
Net increase in net assets from operations before net
foreign exchange gains................................... 72,637,966
Net realized and unrealized foreign exchange gains......... 139,051,634
-------------
Net increase in Net Assets from operations................. 211,689,600
-------------
Dividends from net investment income to preferred
shareholders............................................... (4,576,116)
-------------
Net Increase In Net Assets Applicable to Common
Shareholders Resulting From Operations..................... $207,113,484
-------------
-------------
24 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Statement of Cash Flows (unaudited)
Six Months Ended April 30, 2003
Increase (Decrease) in Cash (Including Foreign Currency)
Cash flows provided from (used in) operating activities
Interest received (excluding premium/discount
amortization of $4,012,776)............................ $ 64,831,414
Expenses paid............................................ (10,980,735)
Proceeds (purchases) from (of) short-term portfolio
investments, net....................................... (34,795,319)
Purchases of long-term portfolio investments............. (309,013,915)
Proceeds from sales of long-term portfolio investments... 346,355,370
Dividends and distributions paid to preferred
shareholders........................................... (4,674,125)
Gain (loss) on swaps and futures......................... (2,362,287)
Other.................................................... 239,820
------------------
Net cash provided from operating activities............ 49,600,223
------------------
Cash flows used for financing activities
Dividends paid to common shareholders.................... (55,576,017)
------------------
Effect of exchange rate on cash............................ 1,049,780
------------------
Net decrease in cash....................................... (4,926,014)
Cash at beginning of period.............................. 13,750,647
------------------
Cash at end of period.................................... $ 8,824,633
------------------
------------------
Reconciliation of Cash Provided From
(Used In) Operating Activities
Net increase in net assets applicable to common
shareholders resulting from operations................... $ 207,113,484
------------------
Decrease (increase) in investments....................... (1,576,743)
Net realized loss (gain) on investment transactions...... (11,007,418)
Net realized and unrealized foreign exchange losses
(gains).................................................. (139,051,634)
Net change in unrealized appreciation/depreciation on
investments............................................ (8,690,859)
Decrease (increase) in interest receivable............... (1,798,554)
Decrease (increase) in receivable for investments sold... 4,239,600
Decrease (increase) in variation margin.................. (80,171)
Net decrease (increase) in other assets.................. 239,820
Increase (decrease) in payable for investments
purchased.............................................. 867,750
Increase (decrease) in payable for preferred dividends... (98,009)
Decrease in accrued expenses and other liabilities....... (557,043)
------------------
Total adjustments...................................... (157,513,261)
------------------
Net cash provided from operating activities................ $ 49,600,223
------------------
------------------
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 25
Statement of Changes in Net Assets (unaudited)
Six Months Year
Ended Ended
April 30, 2003 October 31, 2002
------------------ ------------------
Increase (Decrease) in Net Assets
Operations
Net investment income................. $ 52,939,689 $ 104,672,313
Net realized gain on investment
transactions........................ 11,007,418 7,539,022
Net change in unrealized appreciation
on investments...................... 8,690,859 9,617,284
------------------ ------------------
Net increase in net assets resulting
from operations before net foreign
exchange gains...................... 72,637,966 121,828,619
Net realized and unrealized foreign
exchange gains...................... 139,051,634 113,718,938
------------------ ------------------
Net increase in net assets from
operations.......................... 211,689,600 235,547,557
------------------ ------------------
Dividends from net investment income
to preferred shareholders........... (4,576,116) (12,375,836)
------------------ ------------------
Net increase in Net Assets applicable to
common shareholders resulting from
operations............................ 207,113,484 223,171,721
------------------ ------------------
Dividends from net investment income to
common shareholders................... (55,576,017) (41,276,180)
Tax return of capital distribution...... -- (75,370,804)
------------------ ------------------
Total dividends and distributions to
common shareholders................... (55,576,017) (116,646,984)
------------------ ------------------
Cost of Fund shares reacquired in
repurchase program (0 and 2,082,900
shares, respectively)................. -- (8,494,873)
------------------ ------------------
Total increase in net assets applicable
to common shareholders................ 151,537,467 98,029,864
Net Assets Applicable to
Common Shareholders
Beginning of period..................... 1,339,871,161 1,241,841,297
------------------ ------------------
End of period........................... $1,491,408,628 $1,339,871,161
------------------ ------------------
------------------ ------------------
26 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Notes to Financial Statements (unaudited)
Aberdeen Asia-Pacific Income Fund, Inc. (the 'Fund') was incorporated in
Maryland on March 14, 1986 as a closed-end, non-diversified management
investment company. The Fund's investment objective is to seek current income.
The Fund may also achieve incidental capital appreciation. The Fund will seek to
achieve its investment objective through investment in Australian and Asian debt
securities. In order to comply with a rule adopted by the Securities and
Exchange Commission under the Investment Company Act of 1940 regarding fund
names, the Board of Directors has adopted an investment policy that, for as long
as the name of the Fund remains Aberdeen Asia-Pacific Income Fund, Inc., it
shall be the policy of the Fund normally to invest at least 80% of its net
assets plus the amount of any borrowings for investment purposes, in Asian debt
securities, Australian debt securities and New Zealand debt securities. This 80%
investment policy is a non-fundamental policy of the Fund and may be changed by
the Board of Directors upon 60 days prior written notice to shareholders. There
can be no assurance that the Fund will achieve its objectives. The ability of
issuers of debt securities held by the Fund to meet their obligations may be
affected by economic developments in a specific industry, country or region.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Basis of Presentation:
The financial statements of the Fund are prepared in accordance with accounting
principles generally accepted in the United States of America, using the United
States dollar as both the functional and reporting currency.
Security Valuation:
The Fund's Board of Directors has adopted Pricing and Valuation Procedures (the
'Procedures') to be used in determining the value of the assets held by the
Fund. In accordance with the Procedures, investments are stated at value.
Investments for which market quotations are readily available are valued at the
last trade price on the date of determination as obtained from a pricing source.
If no such trade price is available, such investments are valued at the quoted
bid price or the mean between the quoted bid and asked price on the date of
determination as obtained from a pricing source. Short-term securities which
mature in more than 60 days are valued at current market quotations. Short-term
securities which mature in 60 days or less are valued at amortized cost.
Aberdeen Asia-Pacific Income Fund, Inc. 27
Notes to Financial Statements (unaudited) (continued)
Securities for which market quotations are not readily available are valued at
fair value in good faith using methods set forth in the Procedures.
Repurchase Agreements:
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian takes possession of the
underlying collateral securities, the value of which exceeds the principal
amount of the repurchase transaction, including accrued interest. To the extent
that any repurchase transaction exceeds one business day, the collateral is
valued on a daily basis to determine its adequacy. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Fund may be delayed or limited.
Foreign Currency Translation:
Australian dollar ('A$'), New Zealand dollar ('NZD') and Asian currency amounts
are translated into United States dollars on the following basis:
(i) market value of investment securities, other assets and liabilities--at the
exchange rates at the end of the reporting periods;
(ii) purchases and sales of investment securities, income and expenses--at the
rates of exchange prevailing on the respective dates of such transactions.
The Fund isolates 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 April 30, 2003.
Similarly, the Fund isolates the effect of changes in foreign exchange rates
from the fluctuations arising from changes in the market prices of portfolio
securities sold during the reporting periods.
Net realized and unrealized foreign exchange gains include realized foreign
exchange gains and losses from sales and maturities of portfolio securities,
sales of foreign currencies, currency gains or losses realized between the trade
and settlement dates on securities transactions, the difference between the
amounts of interest, discount and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent amounts actually received or paid
and changes in unrealized foreign exchange gains and losses in the value of
portfolio securities and other assets and liabilities arising as a result of
changes in the exchange rate. Accumulated net realized and unrealized foreign
exchange gains shown in the composition of net assets at April 30, 2003
represent foreign exchange gains for book purposes that have not yet been
recognized for tax purposes.
28 Aberdeen Asia-Pacific Income Fund, Inc.
Notes to Financial Statements (unaudited) (continued)
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin, including
unanticipated movements in the value of the foreign currency relative to the
U.S. dollar.
The exchange rate at April 30, 2003 was US$0.63 to A$1.00 for the Australian
dollar.
Securities Transactions and Investment Income:
Securities transactions are recorded on the trade date. Realized and unrealized
gains and losses from security and currency transactions are calculated on the
identified cost basis. Interest income is recorded on an accrual basis.
Discounts and premiums on securities purchased are accreted or amortized on an
effective yield basis over the estimated lives of the respective securities.
Expenses are recorded on the accrual basis. The preparation of financial
statements requires management to make estimates and assumptions that affect the
reported amounts and disclosures. Actual results could differ from those
estimates.
Forward Currency Contracts:
A forward currency contract is a commitment to purchase or sell a foreign
currency at a future date at a negotiated forward rate. The Fund enters into
forward currency contracts in order to hedge its exposure to changes in foreign
currency exchange rates on its foreign portfolio holdings or on specific
receivables and payables denominated in a foreign currency. The contracts are
valued daily at current forward exchange rates and any unrealized gain or loss
is included in net unrealized appreciation or depreciation on investments. Gain
or loss is realized on the settlement date of the contract equal to the
difference between the settlement value of the original and renegotiated forward
contracts. This gain or loss, if any, is included in net realized gain (loss) on
foreign currency transactions. Risks may arise upon entering into these
contracts from the potential inability of the counterparties to meet the terms
of their contracts.
Financial Futures Contracts:
A financial futures contract is an agreement to purchase (long) or sell (short)
an agreed amount of securities or commodities at a set price for delivery on a
future date. Upon entering into a financial futures contract, the Fund is
required to pledge to the broker an amount of cash and/or other assets equal to
a certain percentage of the contract amount. This amount is known as the
'initial margin.' Subsequent payments, known as 'variation margin,' are made or
received by the Fund periodically, depending on the periodic fluctuations in the
value of the underlying security or commodity. Such variation margin is recorded
for financial statement purposes on a daily basis as unrealized gain or loss.
When
Aberdeen Asia-Pacific Income Fund, Inc. 29
Notes to Financial Statements (unaudited) (continued)
the contract expires or is closed, the gain or loss is realized and is presented
in the statement of operations as net realized gain (loss) on financial futures
contracts.
The Fund invests in financial futures contracts in order to hedge existing
portfolio securities, or securities the Fund intends to purchase, against
fluctuations in value. Under a variety of circumstances, the Fund may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. The use of futures transactions involves the risk of imperfect
correlation in movements in the price of futures contracts and the underlying
assets.
Securities Lending:
The Fund's investment policies permit the Fund to lend to banks and
broker-dealers, portfolio securities with an aggregate market value of up to 15%
of the Fund's total assets when it deems advisable. Pursuant to a securities
lending agreement ('Agreement') between the Fund and State Street Bank and Trust
Company ('State Street'), any loans made under the Agreement must be secured by
collateral (consisting of any combination of cash, U.S. Government securities,
irrevocable letters of credit or other high-quality debt securities) in an
amount at least equal (on a daily marked-to-market basis) to the current market
value of the securities loaned. An amendment to the Agreement provides that the
cash collateral may be invested in State Street Navigator Securities Lending
Trust, an affiliate of State Street, and proceeds from this investment are
divided 70% as to the Fund and 30% as to State Street.
The Agreement also provides that the Fund may terminate the loans at any time
and obtain the return of the securities, and that the Fund will continue to
receive any interest or dividends obtained on any of the loaned securities and
will continue to have voting rights with respect to the securities.
In the event the Fund lends its portfolio securities, the Fund may be exposed to
counterparty risk, which may result in the delay in recovery of the loaned
securities or possible loss of right in the collateral should the borrower
become insolvent. However, under the amendment to the Agreement, State Street
will indemnify the Fund in the case of borrower default. No securities were out
on loan at April 30, 2003.
Interest Rate and Currency Swaps:
The Fund may engage in certain swap transactions in order to obtain a desired
return at a lower cost than if the Fund had invested directly in the asset that
yielded the desired return.
30 Aberdeen Asia-Pacific Income Fund, Inc.
Notes to Financial Statements (unaudited) (continued)
An interest rate and currency swap is an agreement between two parties which
involves exchanging principal and fixed rate interest payments (one currency for
principal and fixed rate interest payments in another currency in the case of
interest rate and currency swap) for a specified period of time. Interest rate
and currency swaps involve the accrual and exchange of interest payments between
the parties.
During the term of the swap, changes in the value of the swap are recognized as
unrealized gains or losses by 'marking-to-market' to reflect the market value of
the swap. When the swap is terminated, the Fund will record a realized gain or
loss equal to the difference, if any, between the proceeds from (or cost of) the
closing transaction and the Fund's basis in the contract.
The Fund is exposed to credit loss in the event of non-performance by the other
party to the interest rate and currency swap. However, the Fund does not
anticipate non-performance by any counterparty.
Dividends and Distributions:
It is the Fund's current policy to pay dividends from net investment income
supplemented by net realized foreign exchange gains, net realized short-term
capital gains and return of capital distributions if necessary, on a monthly
basis. The Fund will also declare and pay distributions at least annually from
net realized gains on investment transactions and net realized foreign exchange
gains, if any. Dividends and distributions to common shareholders are recorded
on the ex-dividend date. Dividends and distributions to preferred shareholders
are accrued on a weekly basis and are determined as described in Note 6.
Income distributions and capital and currency gains distributions are determined
in accordance with income tax regulations which may differ from accounting
principles generally accepted in the United States of America. These differences
are primarily due to differing treatments for foreign currencies, loss deferrals
and recognition of market discount and premium.
Taxes:
For federal income and excise tax purposes, the Fund's transactions are
accounted for using the Australian dollar as the functional currency.
Accordingly, only realized currency gains and losses resulting from the
repatriation of Australian dollars into United States dollars or transactions in
New Zealand dollars or Asian country currencies are recognized for tax purposes.
Aberdeen Asia-Pacific Income Fund, Inc. 31
Notes to Financial Statements (unaudited) (continued)
No provision has been made for United States income taxes because it is the
Fund's policy to continue to meet the requirements of the United States Internal
Revenue Code applicable to regulated investment companies and to distribute all
of its taxable income to shareholders. The chart below summarizes the
withholding tax rates in effect on interest income at the period end.
Withholding
Country Tax Rate
--------------------------------------
Australia 10%
Hong Kong 30
Japan 10
Korea 12
Malaysia 30
New Zealand 10
Philippines 15
Singapore 30
Thailand 15
Cash Flow Information:
The Fund invests in securities and makes distributions to common shareholders
from net investment income and net realized gains from investment and currency
transactions, and to the extent necessary, from return of paid-in capital. These
distributions are paid in cash or are reinvested at the discretion of
shareholders. These activities are reported in the Statement of Changes in Net
Assets and additional information on cash receipts and cash payments is
presented in the Statement of Cash Flows. Cash includes domestic and foreign
currency.
Note 2. Agreements
Aberdeen Asset Managers (C.I.) Limited (the 'Investment Manager') serves as
investment manager to the Fund and Aberdeen Asset Management Limited (the
'Investment Adviser') serves as investment adviser to the Fund pursuant to a
management agreement and an advisory agreement, respectively. The Investment
Manager and the Investment Adviser are wholly-owned subsidiaries of Aberdeen
Asset Management PLC.
The Investment Manager makes investment decisions on behalf of the Fund on the
basis of recommendations and information furnished to it by the Investment
Adviser, including the selection of and the placement of orders with brokers and
dealers to execute portfolio transactions on behalf of the Fund.
The management agreement provides the Investment Manager with a fee, computed
weekly and payable monthly, at the following annual rates: 0.65% of the Fund's
average
32 Aberdeen Asia-Pacific Income Fund, Inc.
Notes to Financial Statements (unaudited) (continued)
weekly total net assets of common and preferred shareholders up to $200 million,
0.60% of such assets between $200 million and $500 million, 0.55% of such assets
between $500 million and $900 million, 0.50% of such assets between $900 million
and $1,750 million and 0.45% of such assets in excess of $1,750 million.
The Investment Manager pays fees to the Investment Adviser for its services
rendered. The Investment Manager informed the Fund that it paid $2,312,781 to
the Investment Adviser during the period ended April 30, 2003.
Prudential Investments LLC (the 'Administrator') serves as administrator to the
Fund pursuant to an agreement. The administration agreement provides the
Administrator with a fee at the annual rate of 0.15% of the Fund's average
weekly total net assets of common and preferred shareholders up to $900 million,
0.10% of such assets between $900 million and $1,750 million and 0.07% of such
assets in excess of $1,750 million. During the six months ended April 30, 2003,
the Administrator remitted $120,000 to the Investment Manager for certain
compliance related administrative services provided.
Under terms of an Investor Relations Services Agreement, Aberdeen Fund Managers,
Inc. ('Aberdeen'), an affiliate of the Fund's Investment Manager and Investment
Advisor, serves as the Fund's investor relations services provider. This
agreement provides Aberdeen with a monthly retainer fee of $10,000 plus
out-of-pocket expenses. During the six months ended April 30, 2003, the Fund
incurred fees of approximately $60,000 for the services of Aberdeen. As of April
30, 2003, $10,000 of this amount was due to Aberdeen. Investor relations fees
and expenses in the Statement of Operations include certain out-of-pocket
expenses.
Note 3. Portfolio Securities
Purchases and sales of investment securities, other than short-term investments,
for the six months ended April 30, 2003 aggregated $213,652,003 and
$241,321,361, respectively.
The Fund entered into two interest rate and foreign currency swaps on
February 16, 1999. Under the terms of the first swap, the Fund receives interest
at a rate of 11.50% based on a notional amount of KRW5,124,367,250 and pays
interest at a rate of 3.70% based on a notional amount of JPY500,000,000. Net
receipts or payments of such amounts are exchanged semi-annually. At April 30,
2003 the unrealized appreciation on this currency swap was $407,784. The swap is
scheduled to terminate on April 26, 2006.
On September 16, 2002, the Fund entered into a two-year interest rate swap
agreement in order to hedge one-third of the Fund's outstanding issues of AMPS.
Under the original
Aberdeen Asia-Pacific Income Fund, Inc. 33
Notes to Financial Statements (unaudited) (continued)
terms of the agreement, the Fund received a floating rate of interest (one-month
USD-LIBOR BBA rate) based on a notional amount of $200,000,000 and paid interest
at a fixed rate of 2.46%. The fixed rate interest payment has been periodically
repriced and the most recent repricing occurred on February 18, 2003 at a new
fixed rate of 1.37%. Net receipts of payments of such amounts are exchanged
every 28 days. At April 30, 2003 the unrealized depreciation of interest rate
swaps was $36,529. The swap is scheduled to terminate on September 18, 2004.
Net interest income of $204,742 on interest rate and currency swaps earned
during the year is included in interest income in the Statement of Operations.
At April 30, 2003 the Fund had outstanding forward currency contracts to buy and
sell foreign currency against United States dollars as follows:
Value at
Foreign Currency Settlement Current Appreciation
Purchase Contract Date Payable Value (Depreciation)
-------------------------------------- --------------- ----------- --------------
Indian Rupee
settlement date 5/6/03 $17,298,000 $17,601,094 $ 303,094
Philippine Peso
settlement date 5/23/03 9,369,000 9,673,170 304,170
settlement date 7/25/03 10,572,000 10,730,974 158,974
South Korean Won
settlement date 5/13/03 7,720,000 7,740,707 20,707
settlement date 5/13/03 9,000,000 9,180,226 180,226
settlement date 7/15/03 9,500,000 9,573,628 73,628
settlement date 7/15/03 9,700,000 9,663,303 (36,697)
--------------- ----------- --------------
$73,159,000 $74,163,102 $1,004,102
--------------- ----------- --------------
--------------- ----------- --------------
34 Aberdeen Asia-Pacific Income Fund, Inc.
Notes to Financial Statements (unaudited) (continued)
During the period ended April 30, 2003, the Fund entered into financial futures
contracts. Details of open contracts at April 30, 2003 are as follows:
Value at Value at Unrealized
Number of Expiration April 30, Trade Appreciation/
Contracts Type Date 2003 Date (Depreciation)
--------- ------------ ----------- ----------- ----------- ---------------
Short
Positions:
3yr
Australian
Treasury
500 Bonds Jun. 03 $32,358,771 $32,443,283 $ 84,512
10yr U.S.
Treasury
350 Notes Jun. 03 40,293,750 39,873,625 (420,125)
Long
Positions:
10yr
Australian
Treasury
49 Bonds Jun. 03 3,231,310 3,209,315 21,995
---------------
$(313,618)
---------------
---------------
Note 4. Tax Information
The United States federal income tax basis of the Fund's investments and the net
unrealized appreciation as of April 30, 2003 were as follows:
Net
Tax Basis Unrealized
of Investments Appreciation Depreciation Appreciation
-------------- ------------ ------------ ------------
$2,006,906,568 $78,861,372 $31,164,890 $47,696,482
The difference between book basis and tax basis was primarily attributable to
deferred losses on wash sales, differing tax treatment for foreign currencies,
loss deferrals and recognition of discount and of premium amortization.
The Fund estimates that distributions for the fiscal year commencing November 1,
2002, including the distribution paid on June 13, 2003, are comprised of 70% net
investment income and 30% return of paid-in capital.
Note 5. Common Stock
There are 400 million shares of common stock authorized. At April 30, 2003,
there were 264,654,000 common shares issued and outstanding.
Aberdeen Asia-Pacific Income Fund, Inc. 35
Notes to Financial Statements (unaudited) (continued)
On March 1, 2001, the Board of Directors approved a stock repurchase program.
The stock repurchase program allows the Fund to repurchase up to 10% of its
outstanding common stock in the open market during any 12 month period if and
when the discount to net asset value is at least 10%. The number of shares
repurchased and cancelled under this program for the six month period ended
April 30, 2003 and the year ended October 31, 2002 were 0 and 2,127,600,
respectively.
On October 8, 2002, the Fund filed a registration statement with the Securities
and Exchange Commission in connection with a proposed transferable rights
offering to common shareholders. On January 10, 2003 the Fund announced that it
would not proceed with the proposed rights offering, based upon the
determination of the Rights Offering Committee of the Board of Directors that
market conditions were unfavorable for the commencement of the rights offering
and that favorable market conditions were not anticipated to develop in the near
term. Expenses incurred in connection with the proposed rights offering are
included in the Statement of Operations.
Note 6. Preferred Stock
The Preferred Stock shareholders have rights as determined by the Board of
Directors. The 24,000 shares of Auction Market Preferred Stock ('Preferred
Stock') outstanding consist of nine series as follows: Series A--3,000 shares,
Series B--3,000 shares, Series C--2,000 shares, Series D--4,000 shares, Series
E--2,000 shares, Series F--2,000 shares, Series G--3,000 shares, Series H--2,500
shares and Series I--2,500 shares.
Dividends on each series of Preferred Stock are cumulative at a rate established
at the initial public offering and are typically reset every 28 days for Series
A through D and every seven days for Series E through I based on the results of
an auction. Dividend rates ranged from 1.2% to 2.1% during the six months ended
April 30, 2003. Under the Investment Company Act of 1940, the Fund may not
declare dividends or make other distributions on shares of common stock or
purchase any such shares if, at the time of the declaration, distribution or
purchase, asset coverage with respect to the outstanding Preferred Stock would
be less than 200%.
The Preferred Stock is redeemable at the option of the Fund, in whole or in
part, on any dividend payment date at liquidation value plus any accumulated but
unpaid dividends. The Preferred Stock is also subject to mandatory redemption at
liquidation value plus any accumulated but unpaid dividends if certain
requirements relating to the composition of the assets and liabilities of the
Fund as set forth in the Charter are not satisfied.
36 Aberdeen Asia-Pacific Income Fund, Inc.
Notes to Financial Statements (unaudited) (concluded)
The holders of Preferred Stock have voting rights equal to the holders of common
stock (one vote per share) and will vote together with holders of shares of
common stock as a single class. However, holders of Preferred Stock are also
entitled to elect two of the Fund's directors.
Note 7. Subsequent Events
On May 12, 2003 and June 16, 2003, the Board of Directors declared a monthly
distribution of 3.5 cents per share payable on June 13, 2003 and July 11, 2003
to all shareholders of record as of May 30, 2003 and June 30, 2003, respectively
(ex-dividend dates May 28, 2003 and June 26, 2003, respectively).
Subsequent to April 30, 2003, dividends and distributions declared and paid on
Preferred Stock totaled approximately $999,545 for the nine outstanding
preferred share series in the aggregate through June 13, 2003.
Aberdeen Asia-Pacific Income Fund, Inc. 37
Financial Highlights (unaudited)
Six Months
Ended
April 30, 2003
------------------
PER SHARE OPERATING PERFORMANCE*:
Net asset value per common share, beginning of period............... $ 5.06
--------
Net investment income............................................... .20
Net realized and unrealized gain (loss) on investments and foreign
currencies........................................................ .61
--------
Total from investment operations................................... .81
--------
Dividends from net investment income to preferred shareholders...... (.02)
Dividends from net investment income to common shareholders......... (.21)
Tax return of capital distribution.................................. --
Distributions from net capital and currency gains to preferred
shareholders...................................................... --
Distributions from net capital and currency gains to common
shareholders...................................................... --
--------
Total dividends and distributions.................................. (.23)
--------
Capital reduction with respect to issuance of shares................ --
Increase resulting from Fund share repurchase....................... --
--------
Net asset value per common share, end of period..................... $ 5.64
--------
--------
Market price per common share, end of period........................ $ 5.14
--------
--------
TOTAL INVESTMENT RETURN BASED OND:
Market value........................................................ 26.23%
Net asset value..................................................... 16.34%
RATIOS TO AVERAGE NET ASSETS OF COMMON
SHAREHOLDERS/SUPPLEMENTAL DATAPound:
ExpensesDD.......................................................... 1.48%
Net investment income available to common shareholders.............. 6.90%
Portfolio turnover rate............................................. 11%
Net assets of common shareholders, end of period (000 omitted)...... $1,491,409
Average net assets of common shareholders (000 omitted)............. $1,412,781
Senior securities (preferred stock) outstanding (000 omitted)....... $ 600,000
Asset coverage of preferred stock at period-end..................... 346%
------------------------------
* Calculated based upon average shares outstanding during the year.
D Total investment return is calculated assuming a purchase of common stock on the first day and a
sale on the last day of each year reported. Dividends and distributions are assumed, for purposes
of this calculation, to be reinvested at prices obtained under the Fund's dividend reinvestment
plan. Total investment return does not reflect brokerage commissions.
DD Includes expenses of both preferred and common stock.
Pound Ratios calculated on the basis of income, expenses and preferred share dividends applicable to
both the common and preferred shares relative to the average net assets of common shareholders.
Expense ratios relative to the average net assets of common and preferred shareholders are 1.05%,
1.03%, 1.03%, .98%, .95% and .95%, respectively. Ratios to average net assets of net investment
income before preferred stock dividends are 7.56%, 8.18%, 10.76%, 10.52%, 9.79% and 10.72%,
respectively. Ratios to average net assets of preferred stock dividends are .65%, .97%, 2.28%,
2.30%, 1.45% and 2.21%, respectively.
PoundPound Less than $0.005 per share.
PoundPoundPound Effective November 1, 2001, the Fund has adopted the provisions of the AICPA Audit and Accounting
Guide for Investment Companies and began amortizing premiums on debt securities. The effect of
this change for the year ended October 31, 2002 was to decrease net investment income per share
by $0.05 and increase net realized and unrealized gain (loss) per share by $0.05 and decrease the
ratio of net investment income from 8.31% to 7.21%. Per share amounts and ratios for the years
ended prior to October 31, 2002 have not been restated to reflect this change in presentation.
38 Aberdeen Asia-Pacific Income Fund, Inc. See Notes to Financial Statements.
Financial Highlights (unaudited) (concluded)
Year Ended October 31,
----------------------------------------------------------------------------
2002PoundPoundPound 2001 2000 1999 1998
---------- ---------- ---------- ---------- ----------
$ 4.65 $ 4.78 $ 6.20 $ 7.33 $ 8.85
---------- ---------- ---------- ---------- ----------
.40 .53 .60 .67 .82
.50 (.01) (1.28) (.35) (1.45)
---------- ---------- ---------- ---------- ----------
.90 .52 (.68) .32 (.63)
---------- ---------- ---------- ---------- ----------
(.05) (.11) (.13) (.10) (.17)
(.16) (.22) (.39) (.63) (.51)
(.28) (.32) (.21) -- --
-- -- (.01) (.02) --
-- -- -- (.09) (.21)
---------- ---------- ---------- ---------- ----------
(.49) (.65) (.74) (.84) (.89)
---------- ---------- ---------- ---------- ----------
-- -- -- (.61) --
-- dPound -- dPound -- -- --
---------- ---------- ---------- ---------- ----------
$ 5.06 $ 4.65 $ 4.78 $ 6.20 $ 7.33
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
$ 4.25 $ 4.02 $ 3.86 $ 6.00 $ 5.625
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
17.01% 18.74% (26.73)% 20.96% (23.19)%
19.65% 10.91% (12.19)% (5.15)% (8.10)%
1.51% 1.51% 1.36% 1.26% 1.47%
7.21% 8.48% 8.22% 8.34% 8.51%
36% 47% 64% 89% 61%
$1,339,871 $1,241,841 $1,279,346 $1,657,365 $1,428,142
$1,280,112 $1,299,044 $1,530,638 $1,775,894 $1,485,690
$ 600,000 $ 600,000 $ 600,000 $ 600,000 $ 600,000
326% 308% 316% 376% 338%
NOTE: Contained above is operating performance for a share of common stock outstanding, total
investment return, ratios to average net assets of common shareholders and other supplemental
data for each of the years indicated. This information has been determined based upon financial
information provided in the financial statements and market value data for the Fund's common
shares.
See Notes to Financial Statements. Aberdeen Asia-Pacific Income Fund, Inc. 39
Supplemental Proxy Information (unaudited)
The Annual Meeting of Shareholders of Aberdeen Asia-Pacific Income Fund, Inc.
was held on April 15, 2003 at the offices of Prudential Financial, Inc., 751
Broad Street, Newark, New Jersey. The meeting was held for the following
purposes:
Election of four Directors to serve as Class III Directors for a three-year
(1) term expiring in 2006:
- David L. Elsum
- Martin J. Gilbert
- Peter J. O'Connell
- William J. Potter
Election of two directors to represent the interests of the holders of
(2) preferred stock for the ensuing year:
- Dr. Anton E. Schrafl
- John T. Sheehy
Directors whose term of office continued beyond this meeting are as follows:
Anthony E. Aaronson, Beverly Hendry, Howard A. Knight (since deceased), P.
Gerald Malone, Neville J. Miles, Peter D. Sacks and Brian M. Sherman.
(3) Amendment and Restatement of the Fund's charter.
On April 15, 2003, votes were taken with respect to Proposals 1 and 2, regarding the
election of directors. However, the Annual Meeting was adjourned to May 6, 2003 to permit
the further solicitation of proxies with respect to Proposal 3. At the reconvened meeting
on May 6, 2003, votes were taken with respect to Proposal 3.
The results of the voting on the above matters were as follows:
(1) Election of Class III Directors:
Director Votes For Votes Withheld
--------------------- -------------- --------------
David L. Elsum 234,283,667 9,325,112
Martin J. Gilbert 234,278,198 9,330,581
Peter J. O'Connell 234,259,707 9,349,072
William J. Potter 234,316,210 9,292,569
(2) Election of Preferred Directors:
Director Votes For Votes Withheld
--------------------- -------------- --------------
Dr. Anton E. Schrafl 22,868 135
John T. Sheehy 22,868 135
(3) Amendment and Restatement of Fund's Charter:
Broker
Votes For Votes Withheld Votes Against Non-Votes
--------------------- -------------- -------------- ----------
133,412,363 8,241,829 13,712,972 88,241,615
40 Aberdeen Asia-Pacific Income Fund, Inc.
Directors Officers
Martin J. Gilbert, Chairman Hugh Young, President
Anthony E. Aaronson James Blair, Vice President
David L. Elsum Christian Pittard, Treasurer and
Beverley Hendry Assistant Secretary
P. Gerald Malone Roy M. Randall, Secretary
Neville J. Miles Timothy Sullivan, Assistant Treasurer
Peter J. O'Connell Simon Bignell, Assistant Treasurer
William J. Potter Jack R. Benintende, Assistant Treasurer
Peter D. Sacks Sander M. Bieber, Assistant Secretary
Anton E. Schrafl
John T. Sheehy
Brian M. Sherman
The accompanying Financial Statement as of April 30, 2003 were
not audited and accordingly, no opinion is expressed thereon.
Notice is hereby given in accordance with Section 23(c) of the
Investment Company Act of 1940 that the Fund may purchase, from
time to time, shares of its common stock in the open market.
Aberdeen Asia-Pacific Income Fund, Inc. 41
Corporate Information
Investment Manager Aberdeen Asset Managers (C.I.) Limited
P.O. Box 578, 17 Bond Street
St. Helier, Jersey JE45XB Channel Islands
Investment Adviser Aberdeen Asset Management Limited
Level 6, 201 Kent Street
Sydney, NSW 2000, Australia
Administrator Prudential Investments LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
Transfer Agent EquiServe Trust Company, N.A.
P.O. Box 43011
Providence, RI 02940-3011
Auction Agent Deutsche Bank Trust Company Americas
Four Albany Street
New York, NY 10006
Independent Auditors PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
Legal Counsel Dechert LLP
1775 I Street, N.W.
Washington, DC 20006
The Seidler Law Firm
Level 40, Chifley Tower
Two Chifley Square
Sydney, NSW 2000, Australia
Investor Relations Aberdeen Asset Management
45 Broadway, 31st Floor
New York, NY 10006
1-800-522-5465 or 1-212-968-8800
or e-mail us at:
InvestorRelations@aberdeen-asset.com
(LOGO)
Aberdeen
ASSET MANAGERS
Aberdeen Asset Managers (C.I.) Limited
The common shares of Aberdeen Asia-Pacific Income Fund, Inc.
are traded on the American Stock Exchange and on the Pacific Stock
Exchange under the symbol "FAX". Information about the Fund's net asset
value and market price is published weekly in Barron's and in
the Monday edition of The Wall Street Journal.
This report, including the financial information herein, is transmitted
to the shareholders of Aberdeen Asia-Pacific Income Fund, Inc. for
their general information only. It does not have regard to the specific
investment objectives, financial situation and the particular needs of any
specific person. Past performance is no guarantee of future returns.
Item 2 -- Code of Ethics -- Not required in this filing
Item 3 -- Audit Committee Financial Expert -- Not required in this filing
Item 4 -- Principal Accountant Fees and Services -- Not required in this
filing
Item 5 -- Reserved
Item 6 -- Reserved
Item 7 -- Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -- Not required in this filing
Item 8 -- Reserved
Item 9 -- Controls and Procedures
(a) It is the conclusion of the registrant's principal executive
officer and principal financial officer that the effectiveness of
the registrant's current disclosure controls and procedures (such
disclosure controls and procedures having been evaluated within
90 days of the date of this filing) provide reasonable assurance
that the information required to be disclosed by the registrant
has been recorded, processed, summarized and reported within the
time period specified in the Commission's rules and forms and
that the information required to be disclosed by the registrant
has been accumulated and communicated to the registrant's
principal executive officer and principal financial officer in
order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Item 10 -- Exhibits
(a) Code of Ethics -- Not required in this filing
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley
Act -- Attached hereto
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.
Aberdeen Asia-Pacific Income Fund, Inc.
By: /s/ Hugh Young
-------------------
Hugh Young,
President of
Aberdeen Asia-Pacific Income Fund, Inc.
Date: July 1, 2003
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/ Hugh Young
---------------------
Hugh Young,
President of
Aberdeen Asia-Pacific Income Fund, Inc.
Date: July 1, 2003
By: /s/ Christian Pittard
------------------------
Christian Pittard,
Treasurer of
Aberdeen Asia-Pacific Income Fund, Inc.
Date: July 1, 2003
Attached hereto as an exhibit are the certifications pursuant to
Section 906 of the Sarbanes-Oxley Act.