tgcfmarch312010formnq.htm
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: 811-05617
 
Taiwan Greater China Fund
 
(Exact name of registrant as specified in charter)
 
c/o Nanking Road Capital Management, LLC
111 Gillett Street
Hartford, CT 06105
 
(Address of principal executive offices)           (Zip code)
 
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109-3604
(Name and address of agent for service)
 
Registrant’s telephone number, including area code: 1-800-343-9567
 
Date of fiscal year end: December 31
Date of reporting period: March 31, 2010

 
 
ITEM 1.                      SCHEDULE OF INVESTMENTS

 
TAIWAN GREATER CHINA FUND
              
PORTFOLIO HIGHLIGHTS (Unaudited) / March 31, 2010
          
                     
Security Classifications
        
Ten Largest Holdings
      
     
      Value
          
Percent of
  
Percent of Net Assets
    
      (000)
  
Company
      
Net Assets
  
                     
Common Stock
100.02
%
 $  81,010
  
Hon Hai Precision Industry Co., Ltd.
12.42%
  
Short-Term Securities
0.03
  
           21
  
MediaTek Inc.
8.14
  
Total Investments
100.05
  
     81,031
  
Taiwan Semiconductor Manufacturing Co., Ltd.
6.49
  
Liabilities (Net of Other Assets)
(0.05)
  
          (42)
  
Nan Ya Plastics Corp.
    
4.88
  
Net Assets
100.00
%
 $  80,989
  
AU Optronics Corp.
    
4.69
  
         
China Steel Corp.
    
4.34
  
         
Formosa Plastics Corp.
    
4.26
  
         
Asustek Computer Inc.
    
4.15
  
         
Formosa Chemicals & Fiber Corp.
3.25
  
         
Delta Electronics Inc.
    
2.80
  
                     
                     
                     
                     
                     
                     
                     
                     
                     
Industry Diversification
                    
     
Percent of
              
Ten Largest Sectors
    
Net Assets
            
                     
Computer Systems & Hardware
  
23.85%
              
Semiconductors
    
19.86
              
Plastics
    
12.39
              
Electronic Components
    
10.37
              
Flat-Panel Displays
    
7.19
              
Steel
    
4.48
              
Food
    
3.89
              
Financial Services
    
3.50
              
Computer Peripherals/ODM
    
3.22
              
Cement
    
2.39
              


SCHEDULE OF INVESTMENTS (Unaudited) / March 31, 2010

COMMON STOCK — 100.02%
            
 
    
 
   % of  
 
   U.S. Dollar
  Shares    
Net Assets
 
   Value
Cement — 2.39% 
            
716,683
  
Asia Cement Corp. 
  
0.86
      $
699,038
1,312,373
  
Taiwan Cement Corp. 
  
1.53
      
1,236,705
               
1,935,743
Circuit Boards — 0.30% 
            
72,000
  
Tripod Technology Corp. 
  
0.30
      
243,530
                 
Communications Equipment — 0.31% 
            
156,491
  
Gemtek Technology 
  
0.31
      
253,084
                 
Computer Peripherals/ODM — 3.22%
            
174,628
  
Chicony Electronics Co., Ltd. 
  
0.57
      
464,283
98,843
  
HTC Corp. 
  
1.43
      
1,153,803
745,350
  
Lite-on Technology Corp. 
  
1.22
      
988,484
               
2,606,570
Computer Systems & Hardware — 23.85% 
            
453,397
  
Acer Inc. 
  
1.65
      
1,338,115
1,932,228
  
Asustek Computer Inc. 
  
4.15
      
3,361,982
820,676
  
Compal Electronics Inc. 
  
1.32
      
1,072,889
2,324,860
  
Hon Hai Precision Industry Co., Ltd. 
  
12.42
      
10,057,996
1,073,046
  
Quanta Computer Inc. 
  
2.57
      
2,079,749
774,300
  
Wistron Corp. 
  
1.74
      
1,405,714
               
19,316,445
Electrical & Machinery — 0.58% 
            
366,000
  
Teco Electric & Machinery Co., Ltd. 
  
0.20
      
160,645
790,837
*
Walsin Lihwa Corp. 
  
0.38
      
311,035
               
471,680
Electronic Components — 10.37%
            
277,343
  
Catcher Technology Co., Ltd. 
  
0.84
      
680,650
438,000
  
Coretronic Corp. 
  
0.77
      
620,842
716,991
  
Delta Electronics Inc. 
  
2.80
      
2,267,210
144,715
  
Everlight Electronics Co. 
  
0.55
      
448,955
238,034
  
Foxconn Technology Co., Ltd. 
  
1.08
      
872,523
42,000
  
Kinsus Interconnect Technology Corp. 
  
0.14
      
109,947
17,340
  
Largan Precision Co., Ltd. 
  
0.32
      
260,516
29,629
  
Motech Industry Co., Ltd. 
  
0.15
      
125,853
226,658
*
Prime View International Co., Ltd. 
  
0.51
      
410,063
139,405
  
Shin Zu Shing Co., Ltd. 
  
0.73
      
592,139
85,100
  
Simplo Technology Co., Ltd. 
  
0.60
      
484,641
248,450
  
TXC Corp. 
  
0.54
      
435,418
199,378
  
Unimicron Technology Corp. 
  
0.32
      
255,633
444,000
  
WPG Holdings Co., Ltd. 
  
0.89
      
725,040
10,000
  
Young Fast Optoelectronics Co., Ltd. 
  
0.13
      
105,876
               
8,395,306
Electronics/Other — 2.29%
            
209,000
  
Lumax International Corp., Ltd. 
  
0.47
      
377,459
667,776
  
Synnex Technology International Corp. 
  
1.82
      
1,470,757
               
1,848,216
Financial Services — 3.50% 
            
1,210,000
*
Cathay Financial Holding Co., Ltd. 
  
2.49
      
2,017,777
673,000
*
Fubon Financial Holding Co., Ltd. 
  
1.01
      
817,362
               
2,835,139
Flat-Panel Displays — 7.19% 
            
3,345,292
  
AU Optronics Corp. 
  
4.69
      
3,799,734
2,821,951
*
Chunghwa Picture Tubes, Ltd. 
  
0.40
      
322,306
1,116,732
  
Innolux Display Corp. 
  
2.10
      
1,702,373
               
5,824,413
Food — 3.89%
            
159,375
  
Great Wall Enterprises Co. 
  
0.20
      
163,725
436,000
  
Tingyi (Cayman Islands) Holdings Corp. 
  
1.27
      
1,027,686
1,384,266
  
Uni-President Enterprise Corp. 
  
1.94
      
1,574,490
550,000
  
Want Want China Holdings, Ltd. 
  
0.48
      
389,626
               
3,155,527
Glass, Paper & Pulp — 0.64% 
            
487,365
  
Taiwan Glass Industrial Corp. 
  
0.64
      
516,769
                 
Hotels — 0.10% 
            
7,700
  
Formosa International Hotels Corp. 
  
0.10
      
84,189
                 
Internet Content-Entertainment — 0.12% 
            
9,000
  
Chinese Gamer International Corp. 
  
0.12
      
97,270
                 
Plastics — 12.39% 
            
1,124,897
  
Formosa Chemicals & Fiber Corp. 
  
3.25
      
2,629,744
1,567,271
  
Formosa Plastics Corp. 
  
4.26
      
3,451,867
1,938,968
  
Nan Ya Plastics Corp. 
  
4.88
      
3,953,280
               
10,034,891
Retailing — 0.25%
            
92,850
  
Far Eastern Department Stores Co., Ltd. 
  
0.09
      
76,833
50,445
  
President Chain Store Corp. 
  
0.16
      
125,706
               
202,539
Rubber — 1.12% 
            
426,754
  
Cheng Shin Rubber Ind. Co., Ltd. 
  
1.12
      
907,687
                 
Semiconductors — 19.86% 
            
2,248,762
  
Advanced Semiconductor Engineering Inc. 
  
2.53
      
2,051,887
380,346
  
MediaTek Inc. 
  
8.14
      
6,593,901
64,000
  
Novatek Microelectronics Corp., Ltd. 
  
0.25
      
199,355
105,851
  
Powertech Technology Inc. 
  
0.47
      
378,010
13,650
  
RichTek Technology Corp. 
  
0.18
      
146,024
520,193
  
Siliconware Precision Industries Co., Ltd. 
  
0.77
      
626,867
2,717,284
  
Taiwan Semiconductor Manufacturing Co., Ltd. 
  
6.49
      
5,258,018
1,571,397
  
United Microelectronics Corp. 
  
1.03
      
833,101
               
16,087,163
Steel — 4.48% 
            
3,399,696
  
China Steel Corp. 
  
4.34
      
3,513,884
101,004
  
Tung Ho Steel Enterprise Corp. 
  
0.14
      
114,566
               
3,628,450
Textiles — 1.19% 
            
880,334
  
Far Eastern New Century Corp.
  
1.19
      
966,685
                 
Transportation — 0.40% 
            
159,000
  
U-Ming Marine Transport Corp. 
  
0.40
      
322,177
                 
Other Non-Tech — 1.58%
          
 168,660   Giant Manufacturing Co., Ltd.    0.60        488,746
 375,900   Merida Industry Co., Ltd    0.71        572,440
 263,696   Pou Chen Corp.    0.27        215,304
                 1,276,490
             
TOTAL COMMON STOCK (COST $69,868,360)  
          
81,009,963
                 
SHORT TERM SECURITIES — 0.03%  
            
     
 
    
 
   
     
 
  
 
  
Time Deposit — 0.03% 
            
Wells Fargo - Grand Cayman, 0.03%, Due 04/01/10  
  
0.03
      
21,028
  
                
TOTAL SHORT-TERM SECURITIES (COST $21,028)  
          
21,028
                 
TOTAL INVESTMENTS IN SECURITIES AT FAIR VALUE
            
     (COST $69,889,388) 
  
100.05
      
81,030,991
                 
OTHER LIABILITIES (LESS OTHER ASSETS) 
  
(0.05)
      
(42,018)
                 
NET ASSETS 
  
100.00
  
$
  
80,988,973
                 
At March 31, 2010, the cost of investments, excluding short-term investments, for U.S. federal income tax purposes was approximately equal to the cost of such investments for financial reporting purposes.  At March 31, 2010, the unrealized appreciation of $12,813,629 for financial reporting purposes consisted of $18,498,399 of gross unrealized appreciation and $5,684,770 of gross unrealized depreciation.

* Non-income producing: These stocks did not pay a cash dividend during the past year.
 
Notes to Schedule of Investments

 
— Fair Value Measurements — In January 2010, the Financial Accounting Standards Board issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about Fair Value Measurements.” This ASU will add new requirements for disclosures into and out of Levels I and II fair-value measurements and information on purchases, sales, issuances and settlements on a gross basis in the reconciliation of Level III fair-valued measurements. It also clarifies existing fair value disclosures about the level of disaggregation, inputs and valuation techniques. Except for the detailed Level III reconciliation disclosures, the guidance in the ASU is effective for annual and interim reporting periods in fiscal years beginning after December 15, 2009. The new disclosures for Level III activity are effective for annual and interim reporting periods in fiscal years beginning after December 15, 2010. Management is currently evaluating the impact that adoption will have on the Trust’s portfolio holdings disclosures.
 
    The Trust values its investments in accordance with Accounting Standards Codification 820 - Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurement.  The changes to current practices resulting from the application of ASC 820 relate to the definition of fair value, the methods used to measure fair value, and expanded disclosures about fair value measurement. ASC 820 emphasizes that fair value is a market based measurement, not an entity specific measurement; as such, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability.  As a basis for considering market participant assumptions in fair value measurements, ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from sources independent of the Trust (observable inputs) and (2) the Trust’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs).  The three levels defined by ASC 820 hierarchy are as follows:
 
    Level I – Quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
 
    Level II – Inputs other than quoted prices included within Level I that are observable for the asset or liability, either directly or indirectly.  Level II assets include the following: quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs).
 
 
    Level III – Unobservable pricing input at the measurement date for the asset or liability.  Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available.
 
 
    In some instances, the inputs used to measure fair value might fall in different levels of the fair value hierarchy.  The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest input level that is significant to the fair value measurement in its entirety.
 
 
    The following table summarizes the valuation of the Trust’s securities using the fair value hierarchy:
 
At March 31, 2010
  
Level I*
Level II*
Level III
Total
           
 Investments, at value
  
$81,030,991
-
-
$81,030,991
    Common Stocks
  
81,009,963
-
-
81,009,963
    Time Deposits
  
21,028
-
-
21,028
           
           
*At March 31, 2010, there were no significant transfers in or out of Level I and Level II fair value measurements.
 
— Subsequent Events — Management of the Fund has performed an evaluation of the subsequent events through the date the financial statements were issued.  This evaluation did not result in any subsequent events that necessitated disclosures and/or adjustments.


 
ITEM 2. CONTROLS AND PROCEDURES.
 
(a) The registrant’s principal executive officer and principal financial officer 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 “Act”) (17 CFR 270.30a-3(c))), are effective as of a date within 90 days of the filing date of this report based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (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 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.
 
Certifications pursuant to Rule 30a-2(a) under the Act are filed as Exhibits Ex.99.906 to this Form N-Q.
 
 

 
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.
 
 
Taiwan Greater China Fund
 
 
 
By:  /s/ Steven R. Champion
Name: Steven R. Champion
Title: President and Chief Executive Officer (Principal Executive Officer)
Date: 05/27/10
 
 
 
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/ Steven R. Champion
Name: Steven R. Champion
Title: President and Chief Executive Officer (Principal Executive Officer)
Date: 05/27/10
 
 
 
By:  /s/ Regina Foley
Name: Regina Foley
Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Date: 05/27/10