tgcfseptember302010formnq.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: September 30, 2010

 

 
ITEM 1.                      SCHEDULE OF INVESTMENTS


TAIWAN GREATER CHINA FUND
                
PORTFOLIO HIGHLIGHTS (Unaudited) / September 30, 2010
          
                     
Security Classifications
        
Ten Largest Holdings
      
     
      Value
          
Percent of
  
Percent of Net Assets
    
      (000)
  
Company
      
Net Assets
  
                     
Common Stock
 98.10
%
 $  78,583
  
Hon Hai Precision Industry Co., Ltd.
11.27%
  
Short-Term Securities
0.32
  
         254
  
Taiwan Semiconductor Manufacturing Co., Ltd.
6.35
  
Total Investments
 98.42
  
     78,837
  
MediaTek Inc.
      
6.13
  
Other Assets (Less Liabilities)
       1.58
  
       1,264
  
Nan Ya Plastics Corp.
    
5.00
  
Net Assets
100.00
%
 $  80,101
  
Formosa Plastics Corp.
    
4.57
  
         
China Steel Corp.
    
4.55
  
         
AU Optronics Corp.
    
4.12
  
         
Delta Electronics Inc.
    
3.55
  
         
Formosa Chemicals & Fiber Corp.
  
3.22
  
         
HTC Corp.
      
2.79
  
                     
                     
                     
                     
Industry Diversification
                  
     
Percent of
              
Ten Largest Sectors
    
Net Assets
            
                     
Computer Systems & Hardware
  
20.24%
              
Semiconductors
    
16.73
              
Plastics
    
12.79
              
Electronic Components
    
11.43
              
Flat-Panel Displays
    
5.92
              
Food
    
4.95
              
Steel
    
4.66
              
Computer Peripherals/ODM
    
4.37
              
Financial Services
    
3.58
              
Cement
    
2.81
              
 

 
 
SCHEDULE OF INVESTMENTS (Unaudited) / September 30, 2010
 
COMMON STOCK — 98.10%
          
Shares
    
% of
Net Assets
U.S. Dollar
Value
  
Cement — 2.81%
          
905,043
  
Asia Cement Corp.
  
1.15
  
$ 921,447 
  
1,248,373
  
Taiwan Cement Corp.
  
1.66
  
  1,332,853 
  
           
  2,254,300 
  
Computer Peripherals/ODM — 4.37%
          
173,909
  
Chicony Electronics Co., Ltd.
  
0.46
  
  366,908 
  
98,535
  
HTC Corp.
  
2.79
  
  2,233,204 
  
712,896
  
Lite-on Technology Corp.
  
1.12
  
  897,871 
  
           
  3,497,983 
  
Computer Systems & Hardware — 20.24%
          
431,828
  
Acer Inc.
  
1.37
  
  1,096,031 
  
289,834
  
Asustek Computer Inc.
  
2.59
  
  2,075,338 
  
796,078
  
Compal Electronics Inc.
  
1.19
  
  950,469 
  
2,403,363
  
Hon Hai Precision Industry Co., Ltd.
  
11.27
  
  9,027,112 
  
1,021,046
  
Quanta Computer Inc.
  
2.06
  
  1,654,798 
  
773,369
  
Wistron Corp.
  
1.76
  
  1,409,137 
  
           
  16,212,885 
  
Electrical & Machinery — 0.81%
          
348,000
  
Teco Electric & Machinery Co., Ltd.
  
0.25
  
  201,349 
  
751,837
*
Walsin Lihwa Corp.
  
0.56
  
  447,021 
  
           
  648,370 
  
Electronic Components — 11.43%
          
263,343
  
Catcher Technology Co., Ltd.
  
0.76
  
  606,102 
  
417,000
  
Coretronic Corp.
  
0.80
  
  639,836 
  
681,991
  
Delta Electronics Inc.
  
3.55
  
  2,844,990 
  
215,658
*
E Ink Holdings Inc.
  
0.52
  
  417,763 
  
137,715
  
Everlight Electronics Co.
  
0.48
  
  386,956 
  
257,678
  
Foxconn Technology Co., Ltd.
  
1.02
  
  815,463 
  
780,093
*
Pegatron Corp.
  
1.27
  
  1,018,662 
  
139,020
  
Shin Zu Shing Co., Ltd.
  
0.49
  
  387,512 
  
89,210
  
Simplo Technology Co., Ltd.
  
0.63
  
  507,604 
  
241,170
  
TXC Corp.
  
0.54
  
  430,179 
  
497,926
  
WPG Holdings Co., Ltd.
  
1.23
  
  986,843 
  
10,000
  
Young Fast Optoelectronics Co., Ltd.
  
0.14
  
  113,800 
  
           
  9,155,710 
  
           
Electronics/Other — 2.45%
          
208,950
  
Lumax International Corp., Ltd.
  
0.44
  
  352,002 
  
697,766
  
Synnex Technology International Corp.
  
2.01
  
  1,614,879 
  
           
  1,966,881 
  
Financial Services — 3.58%
          
1,208,550
  
Cathay Financial Holding Co., Ltd.
  
2.30
  
  1,844,716 
  
831,557
  
Fubon Financial Holding Co., Ltd.
  
1.28
  
  1,022,069 
  
           
  2,866,785 
  
Flat-Panel Displays — 5.92%
          
3,182,292
*
AU Optronics Corp.
  
4.12
  
  3,295,920 
  
1,062,732
*
Chimei Innolux Corp.
  
1.80
  
  1,443,791 
  
           
  4,739,711 
  
Food — 4.95%
          
158,943
  
Great Wall Enterprises Co.
  
0.20
  
$ 158,013 
  
436,000
  
Tingyi (Cayman Islands) Holdings Corp.
  
1.50
  
  1,205,056 
  
1,448,992
  
Uni-President Enterprise Corp.
  
2.35
  
  1,878,229 
  
776,000
  
Want Want China Holdings, Ltd.
  
0.90
  
  720,926 
  
           
  3,962,224 
  
Glass, Paper & Pulp — 0.85%
          
673,995
  
Taiwan Glass Industrial Corp.
  
0.85
  
  682,979 
  
               
Hotels — 0.17%
          
8,470
  
Formosa International Hotels Corp.
  
0.17
  
  138,085 
  
               
Plastics — 12.79%
          
1,069,897
  
Formosa Chemicals & Fiber Corp.
  
3.22
  
  2,582,144 
  
1,491,271
  
Formosa Plastics Corp.
  
4.57
  
  3,656,315 
  
1,830,968
  
Nan Ya Plastics Corp.
  
5.00
  
  4,003,395 
  
           
  10,241,854 
  
Retailing — 0.72%
          
90,046
  
Far Eastern Department Stores Co., Ltd.
  
0.14
  
  113,122 
  
107,445
  
President Chain Store Corp.
  
0.58
  
  461,956 
  
           
  575,078 
  
Rubber — 1.39%
          
507,192
  
Cheng Shin Rubber Ind. Co., Ltd.
  
1.39
  
  1,115,456 
  
               
Semiconductors — 16.73%
          
2,352,434
  
Advanced Semiconductor Engineering Inc.
  
2.37
  
  1,898,762 
  
350,044
  
MediaTek Inc.
  
6.13
  
  4,912,231 
  
100,851
  
Powertech Technology Inc.
  
0.40
  
  323,995 
  
495,193
  
Siliconware Precision Industries Co., Ltd.
  
0.65
  
  519,206 
  
2,566,284
  
Taiwan Semiconductor Manufacturing Co., Ltd.
  
6.35
  
  5,086,136 
  
1,494,397
  
United Microelectronics Corp.
  
0.83
  
  661,618 
  
           
  13,401,948 
  
Steel — 4.66%
          
3,531,513
  
China Steel Corp.
  
4.55
  
  3,646,321 
  
96,004
  
Tung Ho Steel Enterprise Corp.
  
0.11
  
  89,612 
  
           
  3,735,933 
  
Textiles — 1.47%
          
854,080
  
Far Eastern New Century Corp.
  
1.47
  
  1,173,974 
  
               
Transportation — 0.37%
          
151,000
  
U-Ming Marine Transport Corp.
  
0.37
  
  296,372 
  
               
Other Non-Tech — 2.39%
          
286,263
  
Giant Manufacturing Co., Ltd.
  
1.34
  
  1,075,214 
  
357,900
  
Merida Industry Co., Ltd.
  
0.77
  
  617,799 
  
Other Non-Tech (continued)     
255,709
  
Pou Chen Corp.
  
0.28
  
  223,560 
  
           
  1,916,573 
  
           
TOTAL COMMON STOCK (COST $66,647,520)
  
98.10
  
$ 78,583,101 
  
           
SHORT TERM SECURITIES — 0.32%
          
           
Time Deposit — 0.32%
          
Citibank, London, 0.03%, Due 10/01/10 
  
0.32
  
  253,792 
  
           
TOTAL SHORT-TERM SECURITIES (COST $253,792)
  
0.32
  
  253,792 
  
           
TOTAL INVESTMENTS IN SECURITIES AT FAIR VALUE
          
(COST $66,901,312)
  
98.42
  
  78,836,893 
  
           
OTHER ASSETS (LESS LIABILITIES)
  
 1.58 
  
  1,264,344 
  
           
NET ASSETS
  
100.00
  
$ 80,101,237 
  
 
At September 30, 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 September 30, 2010, the unrealized appreciation of $11,935,581 for financial reporting purposes consisted of $18,354,480 of gross unrealized appreciation and $6,418,899 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 and Disclosures — 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 at September 30, 2010 using the fair value hierarchy:
 
At September 30, 2010
  
Level I*
Level II*
Level III
Total
           
 Investments, at value
  
$78,836,893
-
-
$78,836,893
    Common Stocks
  
78,583,101
-
-
78,583,101
    Time Deposits
  
253,792
-
-
253,792
           
           
*At September 30, 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: November 24, 2010


 
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
 
 

 
 
By:  /s/ Steven R. Champion
Name: Steven R. Champion
Title: President and Chief Executive Officer (Principal Executive Officer)
Date: November 24, 2010

 
 
By:  /s/ Regina Foley
Name: Regina Foley
Title: Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Date: November 24, 2010