-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OCZM9lVaRcwBf3Gvj0WWkAOjc4BjZGnMQ/g5TJbPYDsGWK6HBQA0PVfombvzZUMU mdsGl6O/DMC37dtpi8X7rQ== 0000891804-06-000049.txt : 20060109 0000891804-06-000049.hdr.sgml : 20060109 20060109105607 ACCESSION NUMBER: 0000891804-06-000049 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20051031 FILED AS OF DATE: 20060109 DATE AS OF CHANGE: 20060109 EFFECTIVENESS DATE: 20060109 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREDIT SUISSE JAPAN EQUITY FUND INC CENTRAL INDEX KEY: 0001002141 IRS NUMBER: 133859605 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-07371 FILM NUMBER: 06518178 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PARKWAY CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027912919 MAIL ADDRESS: STREET 1: 466 LEXINGTON AVE CITY: NEW YORK STATE: NY ZIP: 10017 FORMER COMPANY: FORMER CONFORMED NAME: CREDIT SUISSE JAPAN GROWTH FUND INC DATE OF NAME CHANGE: 20011213 FORMER COMPANY: FORMER CONFORMED NAME: WARBURG PINCUS JAPAN GROWTH FUND INC DATE OF NAME CHANGE: 19951012 N-CSR 1 file001.txt CREDIT SUISSE JAPAN EQUITY FUND, INC. 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 No. 811-07371 --------------------------------------------------------------------- CREDIT SUISSE JAPAN EQUITY FUND, INC. ------------------------------------------------------------------------ (Exact Name of Registrant as Specified in Charter) 466 Lexington Avenue, New York, New York 10017-3140 ------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) J. Kevin Gao, Esq. Credit Suisse Japan Equity Fund, Inc. 466 Lexington Avenue New York, New York 10017-3140 Registrant's telephone number, including area code: (212) 875-3500 Date of fiscal year end: October 31st Date of reporting period: November 1, 2004 to October 31, 2005 ITEM 1. REPORTS TO STOCKHOLDERS. CREDIT | ASSET SUISSE | MANAGEMENT CREDIT SUISSE FUNDS Annual Report October 31, 2005 o CREDIT SUISSE JAPAN EQUITY FUND The Fund's investment objectives, risks, charges and expenses (which should be considered carefully before investing), and more complete information about the Fund, are provided in the Prospectus, which should be read carefully before investing. You may obtain additional copies by calling 800-927-2874 or by writing to Credit Suisse Funds, P.O. Box 55030, Boston, MA 02205-5030. Credit Suisse Asset Management Securities, Inc., Distributor, is located at 466 Lexington Ave., New York, NY 10017-3140. Credit Suisse Funds are advised by Credit Suisse Asset Management, LLC. Investors in the Credit Suisse Funds should be aware that they may be eligible to purchase Common Class and/or Advisor Class shares (where offered) directly or through certain intermediaries. Such shares are not subject to a sales charge but may be subject to an ongoing service and distribution fee of up to 0.50% of average daily net assets. Investors in the Credit Suisse Funds should also be aware that they may be eligible for a reduction or waiver of the sales charge with respect to Class A, B or C shares. For more information, please review the relevant prospectuses or consult your financial representative. The views of the Fund's management are as of the date of the letter and Fund holdings described in this document are as of October 31, 2005; these views and Fund holdings may have changed subsequent to these dates. Nothing in this document is a recommendation to purchase or sell securities. Fund shares are not deposits or other obligations of Credit Suisse Asset Management, LLC ("CSAM") or any affiliate, are not FDIC-insured and are not guaranteed by CSAM or any affiliate. Fund investments are subject to investment risk, including loss of your investment. CREDIT SUISSE JAPAN EQUITY FUND ANNUAL INVESTMENT ADVISER'S REPORT October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- November 21, 2005 Dear Shareholder: PERFORMANCE SUMMARY 11/01/04 - 10/31/05 SHARE CLASS/BENCHMARK PERFORMANCE Common1 18.11% Advisor1 18.58% Class A1,2 18.45% TOPIX Index (US$ Denominated)3 22.89% Performance for the Fund's Class A Shares is without the maximum sales charge of 5.75%.2 MARKET OVERVIEW: JAPAN, RALLYING LATE, OUTPERFORMS The period was a positive one for stock markets around the world, aided by optimism over global economic growth and generally favorable earnings reports. Japan had a solid gain in absolute terms as well as compared with developed markets broadly, after rallying from a lackluster January-July stretch. Although the results for the Japanese fiscal year ended March, 2005 were largely better than targets set by Japanese companies, corporate managers announced conservative estimates for the coming year amid escalating oil and raw materials costs. This tended to restrain investor enthusiasm. Japan's stock market slowly regained momentum, however, as domestic economic indicators began to show signs of recovery. The government's Monthly Economic Report was revised upward, while large manufacturing companies' business confidence improved, according to the Bank of Japan's quarterly survey. In September, the market received a major boost when the ruling Liberal Democratic Party won a two-thirds majority in the lower house, giving Prime Minister Koizumi more power over the upper house and increasing the likelihood of his intended reforms. In addition, earnings results for the second quarter of Japan's fiscal year came in better than expected, encouraging aggressive buying on the Tokyo stock market late in the period. 1 CREDIT SUISSE JAPAN EQUITY FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- STRATEGIC REVIEW: REDUCED INDUSTRIAL SECTORS, INCREASED INFORMATION TECHNOLOGY The Fund had a gain for the period but trailed its benchmark. Although sector selection was on the whole beneficial, this was more than countered by overall stock selection. Positive sector allocation contributors included the Fund's underweightings in the electric power & gas, land transport, and foods areas. As for stock selection, the most negative contributors were Elpida Memory Inc. (1.0% of the Fund's net assets as of October 31, 2005) in electrical machinery; USEN Corp. (1.7% of the Fund's net assets as of October 31, 2005) in the information and communication sector; and Fujisawa Pharmaceutical (currently held as Astellas Pharmaceutical, 2.2% of the Fund's net assets as of October 31, 2005). Good performers included Round One Corp. (4.6% of the Fund's net assets as of October 31, 2005) an operator of entertainment facilities in the services sector; Mizuho Financial Group (5.3% of the Fund's net assets as of October 31, 2005) in the bank sector; and Mitsui & Co. (4.4% of the Fund's net assets as of October 31, 2005) in the wholesale area. With regard to portfolio adjustments in the period, we reduced our exposure to the machinery (including electrical machinery) sector. On the other hand, we increased our exposure to the information and communication, services, and real estate areas based on our optimism over domestic demand growth within a recovering Japanese economy. MARKET OUTLOOK AND FUND STRATEGY We believe that improving consumer confidence could support consumer expenditures to the benefit of domestic demand-related companies, including niche market companies in the service, consumption and real estate areas. Now that midterm corporate results have been released, we will continue to monitor business performance and future growth potential of issues we hold in the Fund and adjust our allocation as we deem appropriate. Considering that Japanese companies have already made vigorous restructuring efforts, their further profit growth through cost reduction could be limited. A major challenge for us will be how to identify companies capable of responding 2 CREDIT SUISSE JAPAN EQUITY FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- quickly to changes such as deregulation. Specific areas we are focusing on include potential beneficiaries of an aging society, companies that provide deregulation service and environmental companies. Kunio Tomiyama Portfolio Manager International investing entails special risk considerations, including currency fluctuations, lower liquidity, economic and political risks, and differences in accounting methods. There are also risks associated with investing in Japan, including the risk of investing in a single-country fund. In addition to historical information, this report contains forward-looking statements, which may concern, among other things, domestic and foreign market, industry and economic trends and developments and government regulation and their potential impact on the Fund's investment portfolio. These statements are subject to risks and uncertainties and actual trends, developments and regulations in the future and their impact on the Fund could be materially different from those projected, anticipated or implied. The Fund has no obligation to update or revise forward-looking statements. 3 CREDIT SUISSE JAPAN EQUITY FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE JAPAN EQUITY FUND1 COMMON CLASS SHARES, ADVISOR CLASS SHARES AND THE TOPIX INDEX (TOKYO)3,4 FROM INCEPTION (12/29/95). LINE CHART: CREDIT SUISSE JAPAN EQUITY FUND1 -- COMMON CLASS -- $9,806 CREDIT SUISSE JAPAN EQUITY FUND1 -- ADVISOR CLASS -- $9,371 TOPIX INDEX (TOKYO)3,4 -- $8,785 CREDIT SUISSE CREDIT SUISSE JAPAN EQUITY JAPAN EQUITY FUND1 -- FUND1 -- TOPIX INDEX COMMON CLASS ADVISOR CLASS (TOKYO)3,4 12/95 10000 10000 10000 9880 9880 9865 9660 9650 9703 10080 10070 10052 10780 10770 10722 10650 10640 10196 11080 11060 10241 10470 10460 9738 10190 10170 9324 10370 10350 9613 10/96 9850 9830 8968 9860 9840 9035 9451 9420 8339 9204 9180 7439 9338 9300 7583 9286 9260 7332 9676 9640 7507 10856 10820 8436 11328 11370 8978 11985 12100 8623 10826 10930 7851 10928 10970 7624 10/97 9994 9890 7041 9841 9740 6506 9594 9500 5994 10354 10240 6630 10313 10210 6682 10128 10020 6253 10425 10310 6166 10292 10170 5872 10292 10180 5907 11123 10990 5824 10148 10030 5222 9358 9240 5129 10/98 8814 8710 5946 9882 9760 6224 9717 9590 6449 10436 10300 6476 10702 10560 6320 12375 12200 7195 13822 13460 7532 13278 12930 7162 17383 16910 7870 19250 18730 8668 20994 20400 8939 23426 22760 9544 10/99 24894 24180 10105 30086 29220 10833 35575 34549 11363 30743 29851 10763 33525 32541 10556 29229 28354 11255 24634 23896 10324 20090 19489 9571 20605 19941 10181 16999 16446 8976 20449 19789 9594 17733 17129 9237 10/00 14926 14394 8577 13283 12793 8349 11134 10698 7630 12654 12135 7590 10958 10495 7187 11454 11042 6948 12078 11635 7540 11438 11026 7520 10654 10261 7112 9294 8933 6499 8031 7715 6325 6863 6591 5877 10/01 7663 7356 5921 8223 7871 5836 8334 7996 5389 8015 7684 4972 7999 7653 5186 8782 8387 5476 8766 8371 5769 8670 8293 6179 7823 7481 5854 7167 6840 5516 6927 6606 5437 6399 6091 5179 10/02 6111 5825 4818 6575 6278 4988 6015 5732 4864 5999 5716 4687 5935 5654 4742 5519 5263 4580 5695 5419 4603 5919 5638 4828 6415 6106 5188 6815 6481 5373 7599 7231 5922 7903 7512 6311 10/03 8414 7996 6568 7999 7606 6318 8494 8059 6743 8430 8027 6852 8366 7965 6862 9486 9011 7889 9198 8746 7482 8638 8215 7179 8926 8496 7594 8223 7824 7121 8319 7918 7171 8111 7731 6993 10/04 8303 7902 7149 8654 8246 7476 9118 8683 7851 8862 8433 7753 8926 8512 7904 8670 8262 7783 8558 8168 7584 8510 8121 7477 8510 8121 7489 8510 8121 7578 9134 8730 8065 9726 9277 8819 10/05 9806 9371 8785 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE CREDIT SUISSE JAPAN EQUITY FUND1 CLASS A SHARES2 AND THE TOPIX INDEX (TOKYO)3 FROM INCEPTION (11/30/01). LINE CHART: CREDIT SUISSE JAPAN EQUITY FUND1 -- CLASS A2 -- $11,193 (WITH MAXIMUM SALES CHARGE) TOPIX INDEX (TOKYO)3-- $15,052 CREDIT SUISSE JAPAN EQUITY FUND1 -- CLASS A2 (WITH MAXIMUM TOPIX INDEX SALES CHARGE) (TOKYO)3 11/01 9425 10000 9560 9235 9193 8519 9174 8886 10055 9384 10037 9885 9945 10587 8972 10030 8202 9452 7908 9316 7303 8874 10/02 6972 8255 7523 8546 6862 8334 6844 8030 6771 8125 6312 7848 6495 7888 6771 8272 7321 8889 7761 9207 8661 10148 9009 10814 10/03 9578 11254 9101 10825 9651 11554 9596 11741 9523 11757 10789 13518 10459 12821 9835 12302 10147 13013 9358 12201 9450 12288 9229 11983 10/04 9450 12249 9853 12810 10367 13453 10110 13285 10202 13543 9890 13335 9761 12995 9706 12812 9706 12832 9706 12985 10440 13820 11101 15112 10/05 11193 15052 4 CREDIT SUISSE JAPAN EQUITY FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS AS OF SEPTEMBER 30, 20051 SINCE 1 YEAR 5 YEARS INCEPTION -------------------------------- Common Class 19.92% (11.32)% (0.28)% Advisor Class 20.00% (11.54)% (0.77)% Class A Without Sales Charge 20.28% -- 4.34% Class A With Maximum Sales Charge 13.30% -- 2.76% AVERAGE ANNUAL RETURNS AS OF OCTOBER 31, 20051 SINCE 1 YEAR 5 YEARS INCEPTION -------------------------------- Common Class 18.11% (8.06)% (0.20)% Advisor Class 18.58% (8.23)% (0.66)% Class A Without Sales Charge 18.45% -- 4.46% Class A With Maximum Sales Charge 11.72% -- 2.92% Returns represent past performance and include change in share price and reinvestment of dividends and capital gains. PAST PERFORMANCE CANNOT GUARANTEE FUTURE RESULTS. The current performance of the Fund may be lower or higher than the figures shown. Returns and share price will fluctuate, and redemption value may be less than original cost. The performance results do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance information current to the most recent month-end is available at www.csam.com/us. - ---------------- 1 Fee waivers and/or expense reimbursements may reduce expenses for the Fund, without which performance would be lower. Waivers and/or reimbursements may be discontinued at any time. 2 Total return for Class A Shares for the reporting period, based on offering price (with maximum sales charge of 5.75%), was 11.72%. 3 The Tokyo Stock Exchange (TOPIX) Index is an unmanaged capitalization-weighted index designed to reflect the general directional movement of the Japanese equity market. It consists of all shares listed on the First Section of the Tokyo Stock Exchange, which is generally reserved for Japan's larger companies, and is denominated in U.S. dollars. Investors cannot invest directly in an index. 4 Performance for the benchmark is not available for the period beginning December 29, 1995 (commencement of operations). For that reason, performance is shown for the period beginning January 1, 1996. 5 CREDIT SUISSE JAPAN EQUITY FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- INFORMATION ABOUT YOUR FUND'S EXPENSES As an investor of the Fund, you incur two types of costs: ongoing expenses and transaction costs. Ongoing expenses include management fees, distribution and service (12b-1) fees and other Fund expenses. Examples of transaction costs include sales charges (loads), redemption fees and account maintenance fees, which are not shown in this section and which would result in higher total expenses. The following table is intended to help you understand your ongoing expenses of investing in the Fund and to help you compare these expenses with the ongoing expenses of investing in other mutual funds. The table is based on an investment of $1,000 made at the beginning of the six month period ended October 31, 2005. The table illustrates your Fund's expenses in two ways: o ACTUAL FUND RETURN. This helps you estimate the actual dollar amount of ongoing expenses paid on a $1,000 investment in the Fund using the Fund's actual return during the period. To estimate the expenses you paid over the period, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the "Expenses Paid per $1,000" line under the share class you hold. o HYPOTHETICAL 5% FUND RETURN. This helps you to compare your Fund's ongoing expenses with those of other mutual funds using the Fund's actual expense ratio and a hypothetical rate of return of 5% per year before expenses. Examples using a 5% hypothetical fund return may be found in the shareholder reports of other mutual funds. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. Please note that the expenses shown in these tables are meant to highlight your ongoing expenses only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. If these transaction costs had been included, your costs would have been higher. The "Expenses Paid per $1,000" line of the tables is useful in comparing ongoing expenses only and will not help you determine the relative total expenses of owning different funds. 6 CREDIT SUISSE JAPAN EQUITY FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- EXPENSES AND VALUE OF A $1,000 INVESTMENT FOR THE SIX MONTH PERIOD ENDED OCTOBER 31, 2005 - -------------------------------------------------------------------------------- COMMON ADVISOR ACTUAL FUND RETURN CLASS CLASS CLASS A --------- --------- --------- Beginning Account Value 5/1/05 $1,000.00 $1,000.00 $1,000.00 Ending Account Value 10/31/05 $1,145.80 $1,147.20 $1,146.60 Expenses Paid per $1,000* $ 9.47 $ 8.12 $ 9.47 HYPOTHETICAL 5% FUND RETURN Beginning Account Value 5/1/05 $1,000.00 $1,000.00 $1,000.00 Ending Account Value 10/31/05 $1,016.38 $1,017.64 $1,016.38 Expenses Paid per $1,000* $ 8.89 $ 7.63 $ 8.89 COMMON ADVISOR CLASS CLASS CLASS A --------- --------- --------- ANNUALIZED EXPENSE RATIOS* 1.75% 1.50% 1.75% - ---------------- * Expenses are equal to the Fund's annualized expense ratio for each share class, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year period, then divided by 365. The "Expenses Paid per $1,000" and the "Annualized Expense Ratios" in the tables are based on actual expenses paid by the Fund during the period, net of fee waivers and/or expense reimbursements. If those fee waivers and/or expense reimbursements had not been in effect, the Fund's actual expenses would have been higher. For more information, please refer to the Fund's prospectus. 7 CREDIT SUISSE JAPAN EQUITY FUND ANNUAL INVESTMENT ADVISER'S REPORT (CONTINUED) October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- SECTOR BREAKDOWN* BAR CHART: CONSUMER DISCRETIONARY 35.9% FINANCIALS 22.3% INFORMATION TECHONOLOGY 11.8% INDUSTRIALS 9.5% MATERIALS 8.8% HEALTH CARE 4.7% SHORT-TERM INVESTMENTS 2.8% TELECOMMUNICATION SERVICES 2.3% CONSUMER STAPLES 1.5% ENERGY 0.4% - ---------------- * Expressed as a percentage of total investments (excluding security lending collateral) and may vary over time. 8 CREDIT SUISSE JAPAN EQUITY FUND SCHEDULE OF INVESTMENTS October 31, 2005 - --------------------------------------------------------------------------------
NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS (96.8%) JAPAN (96.8%) Auto Components (6.7%) Denso Corp. 51,600 $ 1,469,052 NHK Spring Company, Ltd.ss. 180,000 1,414,802 Nok Corp.ss. 43,300 1,306,291 ------------ 4,190,145 ------------ Automobiles (7.7%) Honda Motor Company, Ltd. 24,700 1,373,756 Toyota Motor Corp. 74,300 3,445,474 ------------ 4,819,230 ------------ Banks (11.3%) Mitsubishi Tokyo Financial Group, Inc. 98 1,231,760 Mizuho Financial Group, Inc. 494 3,297,967 Sumitomo Mitsui Financial Group, Inc. 276 2,549,091 ------------ 7,078,818 ------------ Chemicals (6.3%) Hitachi Chemical Company, Ltd.ss. 44,100 949,959 JSR Corp.ss. 35,000 825,082 Shin-Etsu Chemical Company, Ltd. 16,700 800,704 Stella Chemifa Corp.ss. 23,000 534,810 Toray Industries, Inc. 147,000 815,653 ------------ 3,926,208 ------------ Commercial Services & Supplies (1.9%) Goodwill Group, Inc.ss. 370 654,904 Toppan Forms Company, Ltd. 42,400 522,769 ------------ 1,177,673 ------------ Computers & Peripherals (1.0%) Elpida Memory, Inc.*ss. 24,400 619,780 ------------ Distribution & Wholesale (3.1%) ABC-Mart, Inc.ss. 38,000 1,050,585 Telewave, Inc. 157 916,910 ------------ 1,967,495 ------------ Diversified Financials (9.6%) Asset Managers Company, Ltd. 316 1,524,726 Creed Corp. 134 579,267 Matsui Securities Company, Ltd.ss. 85,900 954,501 ORIX Corp. 10,800 2,025,171 SFCG Company, Ltd.ss. 3,950 949,243 ------------ 6,032,908 ------------ See Accompanying Notes to Financial Statements. 9 CREDIT SUISSE JAPAN EQUITY FUND SCHEDULE OF INVESTMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS JAPAN Electrical Equipment (2.3%) Eneserve Corp.ss. 5,600 $ 106,491 Nitto Denko Corp. 21,700 1,313,932 ------------ 1,420,423 ------------ Electronic Equipment & Instruments (7.0%) Hirose Electric Company, Ltd.ss. 5,400 617,502 Hoya Corp.ss. 38,300 1,328,235 Keyence Corp.ss. 5,300 1,219,591 Nidec Corp.ss. 8,600 490,556 Ulvac, Inc. 29,300 746,025 ------------ 4,401,909 ------------ Food & Drug Retailing (1.7%) Cosmos Pharmaceutical Corp. 9,400 364,364 Create S D Company, Ltd. 10,200 367,067 Matsumotokiyoshi Company, Ltd.ss. 10,500 317,027 ------------ 1,048,458 ------------ Food Products (0.9%) Pigeon Corp. 44,400 581,258 ------------ Healthcare Equipment & Supplies (1.0%) Terumo Corp.ss. 20,500 621,875 ------------ Hotels, Restaurants & Leisure (6.1%) Plenus Company, Ltd. 31,000 925,742 Round One Corp.ss. 727 2,878,589 ------------ 3,804,331 ------------ Household Durables (2.0%) Matsushita Electric Industrial Company, Ltd. 68,000 1,246,184 ------------ Insurance (1.2%) Millea Holdings, Inc. 40 723,683 ------------ Internet & Catalog Retail (1.1%) Belluna Company, Ltd. 13,700 461,029 Rakuten, Inc.ss. 366 238,063 ------------ 699,092 ------------ Internet Software & Services (1.1%) Career Design Center Company, Ltd. 84 249,937 Index Corp.ss. 400 450,014 ------------ 699,951 ------------ See Accompanying Notes to Financial Statements. 10 CREDIT SUISSE JAPAN EQUITY FUND SCHEDULE OF INVESTMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NUMBER OF SHARES VALUE --------- ----- COMMON STOCKS JAPAN Machinery (1.9%) Daikin Industries, Ltd. 18,400 $ 480,088 Kubota Corp. 94,000 683,891 ------------ 1,163,979 ------------ Media (4.7%) Cyber Agent, Ltd.ss. 282 505,257 Fuji Television Network, Inc. 376 835,032 Jupiter Telecommunications Company, Ltd.* 725 584,573 Usen Corp.ss. 45,440 1,043,808 ------------ 2,968,670 ------------ Metals & Mining (1.3%) JFE Holdings, Inc.ss. 26,000 807,696 ------------ Office Electronics (2.0%) Canon, Inc. 24,000 1,270,354 ------------ Oil & Gas (0.4%) Inpex Corp. 37 259,433 ------------ Pharmaceuticals (2.2%) Astellas Pharma, Inc. 38,100 1,360,969 ------------ Software (0.7%) Fuji Soft ABC, Inc.ss. 15,700 431,179 ------------ Specialty Retail (4.0%) Gulliver International Company, Ltd.ss. 12,980 1,238,413 Shimamura Company, Ltd. 5,200 667,067 USS Company, Ltd. 8,550 585,448 ------------ 2,490,928 ------------ Textiles & Apparel (1.1%) Sanei-International Company, Ltd. 16,000 675,330 ------------ Trading Companies & Distributors (4.3%) Mitsui & Company, Ltd. 222,000 2,726,005 ------------ Wireless Telecommunication Services (2.2%) Hikari Tsushin, Inc.ss. 8,600 552,605 NTT DoCoMo, Inc. 497 858,326 ------------ 1,410,931 ------------ TOTAL COMMON STOCKS (Cost $44,683,208) 60,624,895 ------------ SHORT-TERM INVESTMENTS (26.7%) State Street Navigator Prime Fundss.ss. 15,018,772 15,018,772 See Accompanying Notes to Financial Statements. 11 CREDIT SUISSE JAPAN EQUITY FUND SCHEDULE OF INVESTMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- PAR (000) VALUE --------- ----- State Street Bank and Trust Co. Euro Time Deposit, 2.850%, 11/01/05 $ 1,752 $ 1,752,000 ----------- TOTAL SHORT-TERM INVESTMENTS (Cost $16,770,772) 16,770,772 ----------- TOTAL INVESTMENTS AT VALUE (123.5%) (Cost $61,453,980) 77,395,667 LIABILITIES IN EXCESS OF OTHER ASSETS (-23.5%) (14,747,267) ----------- NET ASSETS (100.0%) $62,648,400 ===========
* Non-Income producing security. ss. Security or portion thereof is out on loan. ss.ss. Represents security purchased with cash collateral received for securities on loan. See Accompanying Notes to Financial Statements. 12 CREDIT SUISSE JAPAN EQUITY FUND STATEMENT OF ASSETS AND LIABILITIES October 31, 2005 - -------------------------------------------------------------------------------- ASSETS Investments at value, including collateral for securities on loan of $15,018,772 (Cost $61,453,980) (Note 2) $77,395,6671 Cash 10,327 Receivable for investments sold 367,557 Dividend and interest receivable 171,502 Receivable for fund shares sold 4,476 Prepaid expenses and other assets 41,875 ----------- Total Assets 77,991,404 ----------- LIABILITIES Advisory fee payable (Note 3) 52,586 Administrative services fee payable (Note 3) 9,034 Distribution fee payable (Note 3) 13,217 Payable upon return of securities loaned (Note 2) 15,018,772 Payable for investments purchased 123,530 Payable for fund shares redeemed 21,617 Directors' fee payable 5,502 Other accrued expenses payable 98,746 ----------- Total Liabilities 15,343,004 ----------- NET ASSETS Capital stock, $0.001 par value (Note 6) 10,217 Paid-in capital (Note 6) 119,624,693 Accumulated net realized loss on investments and foreign currency transactions (72,922,167) Net unrealized appreciation from investments and foreign currency translations 15,935,657 ----------- Net Assets $62,648,400 =========== COMMON SHARES Net assets $61,390,644 Shares outstanding 10,009,863 ----------- Net asset value, offering price, and redemption price per share $ 6.13 ====== ADVISOR SHARES Net assets $ 228,594 Shares outstanding 38,107 ----------- Net asset value, offering price, and redemption price per share $ 6.00 ====== A SHARES Net assets $ 1,029,162 Shares outstanding 168,612 ----------- Net asset value and redemption price per share $ 6.10 ====== Maximum offering price per share (net asset value/(1-5.75%)) $ 6.47 ====== - -------------------------------------------------------------------------------- 1 Including $14,291,445 of securities on loan. See Accompanying Notes to Financial Statements. 13 CREDIT SUISSE JAPAN EQUITY FUND STATEMENT OF OPERATIONS For the Year Ended October 31, 2005 - -------------------------------------------------------------------------------- INVESTMENT INCOME (Note 2) Dividends $ 607,775 Interest 40,349 Securities lending 109,179 Foreign taxes withheld (42,544) ----------- Total investment income 714,759 ----------- EXPENSES Investment advisory fees (Note 3) 792,268 Administrative services fees (Note 3) 115,677 Distribution fees (Note 3) Common Class 154,099 Class A 3,741 Transfer agent fees (Note 3) 280,650 Registration fees 38,279 Custodian fees 32,519 Printing fees (Note 3) 30,773 Legal fees 28,190 Audit fees 23,581 Directors' fees 17,762 Insurance expense 4,982 Commitment fees (Note 4) 1,523 Miscellaneous expense 16,675 ----------- Total expenses 1,540,719 Less: fees waived (Note 3) (432,155) ----------- Net expenses 1,108,564 ----------- Net investment loss (393,805) ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS AND FOREIGN CURRENCY RELATED ITEMS Net realized gain from investments 8,170,851 Net realized loss on foreign currency transactions (38,595) Net change in unrealized appreciation (depreciation) from investments 2,764,202 Net change in unrealized appreciation (depreciation) from foreign currency translations (15,699) ----------- Net realized and unrealized gain from investments and foreign currency related items 10,880,759 ----------- Net increase in net assets resulting from operations $10,486,954 =========== See Accompanying Notes to Financial Statements. 14 CREDIT SUISSE JAPAN EQUITY FUND STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
FOR THE YEAR FOR THE YEAR ENDED ENDED OCTOBER 31, 2005 OCTOBER 31, 2004 ---------------- ---------------- FROM OPERATIONS Net investment loss $ (393,805) $ (703,931) Net realized gain from investments and foreign currency transactions 8,132,256 6,975,984 Net change in unrealized appreciation (depreciation) from investments and foreign currency translations 2,748,503 (7,118,623) ----------- ----------- Net increase (decrease) in net assets resulting from operations 10,486,954 (846,570) ----------- ----------- FROM CAPITAL SHARE TRANSACTIONS (Note 6) Proceeds from sale of shares 5,346,055 11,586,746 Net asset value of shares redeemed (21,749,080)1 (32,354,459)2 ----------- ----------- Net decrease in net assets from capital share transactions (16,403,025) (20,767,713) ----------- ----------- Net decrease in net assets (5,916,071) (21,614,283) NET ASSETS Beginning of year 68,564,471 90,178,754 ----------- ----------- End of year $62,648,400 $68,564,471 =========== ===========
- -------------------------------------------------------------------------------- 1 Net of $848 of redemption fees retained by the Fund. 2 Net of $39,537 of redemption fees retained by the Fund. See Accompanying Notes to Financial Statements. 15 CREDIT SUISSE JAPAN EQUITY FUND FINANCIAL HIGHLIGHTS (For a Common Class Share of the Fund Outstanding Throughout Each Year) - --------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31, ---------------------------------------------------- 2005 2004 2003 2002 2001 ------- ------- ------- ------- ------- PER SHARE DATA Net asset value, beginning of year $ 5.19 $ 5.26 $ 3.82 $ 4.79 $ 11.54 ------- ------- ------- ------- ------- INVESTMENT OPERATIONS Net investment loss (0.03)1 (0.05)1 (0.04)1 (0.06)1 (0.12) Net gain (loss) on investments and foreign currency related items (both realized and unrealized) 0.97 (0.02) 1.48 (0.92) (4.73) ------- ------- ------- ------- ------- Total from investment operations 0.94 (0.07) 1.44 (0.98) (4.85) ------- ------- ------- ------- ------- LESS DISTRIBUTIONS Distributions from net realized gains -- -- -- -- (2.02) ------- ------- ------- ------- ------- REDEMPTION FEES 0.002 0.002 0.002 0.01 0.12 ------- ------- ------- ------- ------- NET ASSET VALUE, END OF YEAR $ 6.13 $ 5.19 $ 5.26 $ 3.82 $ 4.79 ======= ======= ======= ======= ======= Total return3 18.11% (1.33)% 37.70% (20.25)% (48.66)% RATIOS AND SUPPLEMENTAL DATA Net assets, end of year (000s omitted) $61,391 $67,661 $88,818 $74,694 $51,805 Ratio of expenses to average net assets 1.75% 1.75% 1.75% 1.75% 1.76% Ratio of net investment loss to average net assets (0.62)% (0.90)% (1.01)% (1.30)% (1.38)% Decrease reflected in above operating expense ratios due to waivers/reimbursements 0.68% 0.82% 0.94% 0.94% 0.77% Portfolio turnover rate 42% 63% 117% 69% 59%
- -------------------------------------------------------------------------------- 1 Per share information is calculated using the average shares outstanding method. 2 This amount represents less than $0.01 per share. 3 Total returns are historical and assume changes in share price and reinvestment of all dividends and distributions. Had certain expenses not been reduced during the years shown, total returns would have been lower. See Accompanying Notes to Financial Statements. 16 CREDIT SUISSE JAPAN EQUITY FUND FINANCIAL HIGHLIGHTS (For an Advisor Class Share of the Fund Outstanding Throughout Each Year) - --------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31, ---------------------------------------------------- 2005 2004 2003 2002 2001 ------- ------- ------- ------- ------- PER SHARE DATA Net asset value, beginning of year $ 5.06 $ 5.12 $ 3.73 $ 4.71 $ 11.42 ------- ------- ------- ------- ------- INVESTMENT OPERATIONS Net investment loss (0.02)1 (0.03)1 (0.05)1 (0.08)1 (0.11) Net gain (loss) on investments and foreign currency related items (both realized and unrealized) 0.96 (0.03) 1.44 (0.90) (4.66) ------- ------- ------- ------- ------- Total from investment operations 0.94 (0.06) 1.39 (0.98) (4.77) ------- ------- ------- ------- ------- LESS DISTRIBUTIONS Distributions from net realized gains -- -- -- -- (2.00) ------- ------- ------- ------- ------- REDEMPTION FEES -- -- -- 0.002 0.06 ------- ------- ------- ------- ------- NET ASSET VALUE, END OF YEAR $ 6.00 $ 5.06 $ 5.12 $ 3.73 $ 4.71 ======= ======= ======= ======= ======= Total return3 18.58% (1.17)% 37.27% (20.81)% (48.90)% RATIOS AND SUPPLEMENTAL DATA Net assets, end of year (000s omitted) $ 229 $ 330 $ 412 $ 400 $ 911 Ratio of expenses to average net assets 1.50% 1.50% 2.00% 2.00% 2.01% Ratio of net investment loss to average net assets (0.37)% (0.64)% (1.25)% (1.62)% (1.63)% Decrease reflected in above operating expense ratios due to waivers/reimbursements 0.68% 0.82% 0.94% 0.93% 0.76% Portfolio turnover rate 42% 63% 117% 69% 59%
- -------------------------------------------------------------------------------- 1 Per share information is calculated using the average shares outstanding method. 2 This amount represents less than $0.01 per share. 3 Total returns are historical and assume changes in share price and reinvestment of all dividends and distributions. Had certain expenses not been reduced during the years shown, total returns would have been lower. See Accompanying Notes to Financial Statements. 17 CREDIT SUISSE JAPAN EQUITY FUND FINANCIAL HIGHLIGHTS (For a Class A Share of the Fund Outstanding Throughout Each Period) - --------------------------------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31, ----------------------------------------- 2005 2004 2003 20021 ------- ------- ------- ------- PER SHARE DATA Net asset value, beginning of period $ 5.15 $ 5.22 $ 3.80 $ 5.14 ------- ------- ------- ------- INVESTMENT OPERATIONS Net investment loss2 (0.03) (0.05) (0.04) (0.05) Net gain (loss) on investments and foreign currency related items (both realized and unrealized) 0.98 (0.02) 1.46 (1.29) ------- ------- ------- ------- Total from investment operations 0.95 (0.07) 1.42 (1.34) ------- ------- ------- ------- NET ASSET VALUE, END OF PERIOD $ 6.10 $ 5.15 $ 5.22 $ 3.80 ======= ======= ======= ======= Total return3 18.45% 1.34% 37.37% (26.07)% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000s omitted) $ 1,029 $ 574 $ 949 $ 83 Ratio of expenses to average net assets 1.75% 1.75% 1.75% 1.75%4 Ratio of net investment loss to average net assets (0.62)% (0.90)% (0.97)% (1.05)%4 Decrease reflected in above operating expense ratios due to waivers/reimbursements 0.68% 0.82% 0.94% 0.79%4 Portfolio turnover rate 42% 63% 117% 69%
- -------------------------------------------------------------------------------- 1 For the period November 30, 2001 (inception date) through October 31, 2002. 2 Per share information is calculated using the average shares outstanding method. 3 Total returns are historical and assume changes in share price, reinvestment of all dividends and distributions and no sales charge. Had certain expenses not been reduced during the period shown, total returns would have been lower. Total returns for periods less than one year are not annualized. 4 Annualized. See Accompanying Notes to Financial Statements. 18 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS October 31, 2005 - -------------------------------------------------------------------------------- NOTE 1. ORGANIZATION The Credit Suisse Japan Equity Fund, Inc. (the "Fund") is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end management investment company that seeks long-term growth of capital. The Fund was incorporated under the laws of the State of Maryland on October 10, 1995. The Fund is authorized to offer three classes of shares: Common Class shares, Advisor Class shares and Class A shares. The Fund's Common Class shares are closed to new investors, other than (1) investors in employee retirement, stock, bonus, pension or profit-sharing plans, (2) investment advisory clients of Credit Suisse Asset Management, LLC ("CSAM"), (3) certain registered investment advisers ("RIAs"), (4) certain broker-dealers and RIAs with clients participating in comprehensive fee programs and (5) employees of CSAM or its affiliates and current and former Directors or Trustees of funds advised by CSAM or its affiliates. Any Common Class shareholder as of the close of business on December 12, 2001 can continue to buy Common Class shares of the Fund and open new accounts under the same Social Security number. Effective December 12, 2001, the Fund closed the Advisor Class to new investments, except for reinvestment of dividends. Each class of shares in the Fund represents an equal pro rata interest in the Fund, except that they bear different expenses which reflect the differences in the range of services provided to them. Class A shares are sold subject to a front-end sales charge of up to 5.75%. NOTE 2. SIGNIFICANT ACCOUNTING POLICIES A) SECURITY VALUATION -- The net asset value of the Fund is determined daily as of the close of regular trading on the New York Stock Exchange, Inc. (the "Exchange") on each day the Exchange is open for business. The Fund's equity investments are valued at market value, which is generally determined using the closing price on the exchange or market on which the security is primarily traded at the time of valuation (the "Valuation Time"). If no sales are reported, equity investments are generally valued at the most recent bid quotation as of the Valuation Time or at the lowest asked quotation in the case of a short sale of securities. Debt securities with a remaining maturity greater than 60 days are valued in accordance with the price supplied by a pricing service, which may use a matrix, formula or other objective method that takes into consideration market indices, yield curves and other specific 19 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NOTE 2. SIGNIFICANT ACCOUNTING POLICIES adjustments. Debt obligations that will mature in 60 days or less are valued on the basis of amortized cost, which approximates market value, unless it is determined that using this method would not represent fair value. Investments in mutual funds are valued at the mutual fund's closing net asset value per share on the day of valuation. Securities and other assets for which market quotations are not readily available, or whose values have been materially affected by events occurring before the Fund's Valuation Time but after the close of the securities' primary markets, are valued at fair value as determined in good faith by, or under the direction of, the Board of Directors under procedures established by the Board of Directors. The Fund may utilize a service provided by an independent third party which has been approved by the Board of Directors to fair value certain securities. When fair-value pricing is employed, the prices of securities used by a fund to calculate its net asset value may differ from quoted or published prices for the same securities. B) FOREIGN CURRENCY TRANSACTIONS -- The books and records of the Fund are maintained in U.S. dollars. Transactions denominated in foreign currencies are recorded at the current prevailing exchange rates. All assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the current exchange rate at the end of the period. Translation gains or losses resulting from changes in the exchange rate during the reporting period and realized gains and losses on the settlement of foreign currency transactions are reported in the results of operations for the current period. The Fund does not isolate that portion of realized gains and losses on investments in equity securities which is due to changes in the foreign exchange rate from that which is due to changes in market prices of equity securities. The Fund isolates that portion of realized gains and losses on investments in debt securities which is due to changes in the foreign exchange rate from that which is due to changes in market prices of debt securities. C) SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on a trade date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. Certain expenses are class-specific expenses and vary by class. Income, expenses (excluding class-specific expenses) and realized/unrealized gains/losses are allocated proportionately to each class of shares based upon the relative net asset value of the outstanding shares of that class. The cost of investments sold 20 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NOTE 2. SIGNIFICANT ACCOUNTING POLICIES is determined by use of the specific identification method for both financial reporting and income tax purposes. D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends from net investment income and distributions of net realized capital gains, if any, are declared and paid at least annually. However, to the extent that a net realized capital gain can be reduced by a capital loss carryforward, such gain will not be distributed. Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America ("GAAP"). E) FEDERAL INCOME TAXES -- No provision is made for federal taxes as it is the Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code of 1986, as amended, and to make the requisite distributions to its shareholders, which will be sufficient to relieve it from federal income and excise taxes. F) USE OF ESTIMATES -- The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. G) SHORT-TERM INVESTMENTS -- The Fund, together with other funds/portfolios advised by CSAM, an indirect, wholly-owned subsidiary of Credit Suisse Group, pools available cash into either a short-term variable rate time deposit issued by State Street Bank and Trust Company ("SSB"), the Fund's custodian, or a money market fund advised by CSAM. The short-term time deposit issued by SSB is a variable rate account classified as a short-term investment. H) FORWARD FOREIGN CURRENCY CONTRACTS -- The Fund may enter into forward foreign currency contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency. The Fund will enter into forward foreign currency contracts primarily for hedging purposes. Forward foreign currency contracts 21 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NOTE 2. SIGNIFICANT ACCOUNTING POLICIES are adjusted by the daily forward exchange rate of the underlying currency, and any gains or losses are recorded for financial statement purposes as unrealized until the contract settlement date or an offsetting position is entered into. At October 31, 2005, the Fund had no open forward foreign currency contracts. I) SECURITIES LENDING - Loans of securities are required at all times to be secured by collateral at least equal to 102% of the market value of domestic securities on loan (including any accrued interest thereon) and 105% of the market value of foreign securities on loan (including any accrued interest thereon). Cash collateral received by the Fund in connection with securities lending activity is pooled together with cash collateral for other funds/portfolios advised by CSAM and may be invested in a variety of investments, including certain CSAM-advised funds, funds advised by SSB, the Fund's securities lending agent, or money market instruments. However, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. SSB has been engaged by the Fund to act as the Fund's securities lending agent. The Fund's securities lending arrangement provides that the Fund and SSB will share the net income earned from securities lending activities. During the year ended October 31, 2005, total earnings from the Fund's investment in cash collateral received in connection with security lending arrangements was $469,810, of which $313,867 was rebated to borrowers (brokers). The Fund retained $109,179 in income from the cash collateral investment, and SSB, as lending agent, was paid $46,764. The Fund may also be entitled to certain minimum amounts of income from its securities lending activities. Securities lending income is accrued as earned. J) OTHER -- The Fund invests in securities of foreign countries and governments (primarily Japan), which involve certain risks in addition to those inherent in domestic investments. Such risks generally include, among others, currency risk (fluctuations in currency exchange rates), information risk (key information may be inaccurate or unavailable) and political risk (expropriation, nationalization or the imposition of capital or currency controls or punitive taxes). Other risks of investing in foreign securities include liquidity and valuation risks. In addition, focusing investments in a single country, such as Japan, involves increased risks. 22 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NOTE 2. SIGNIFICANT ACCOUNTING POLICIES The Fund may be subject to taxes imposed by countries in which it invests with respect to its investments in issuers existing or operating in such countries. Such taxes are generally based on income earned or repatriated and capital gains realized on the sale of such investments. The Fund accrues such taxes when the related income or gains are earned. NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES CSAM serves as investment adviser for the Fund. For its investment advisory services, CSAM is entitled to receive a fee from the Fund at annual rate of 1.25% of the Fund's average daily net assets. For the year ended October 31, 2005, investment advisory fees earned and voluntarily waived for the Fund were $792,268 and $432,155, respectively. CSAMwill not recapture from the Fund any fees it waived during the fiscal year ended October 31, 2005. Fee waivers and reimbursements are voluntary and may be discontinued by CSAM at any time. Credit Suisse Asset Management Limited (CSAM Japan) ("CSAM Japan") or the "Sub-Adviser", an affiliate of CSAM, is the sub-investment adviser to the Fund. CSAM Japan's sub-investment advisory fees are paid by CSAM out of CSAM's net investment advisory fee and are not paid by the Fund. Prior to December 1, 2004, Credit Suisse Asset Management Limited (CSAM Australia) ("CSAM Australia") also served as sub-investment advisor to the Fund under a similar fee arrangement. Credit Suisse Asset Management Securities, Inc. ("CSAMSI"), an affiliate of CSAM, and SSB serve as co-administrators to the Fund. For its co-administrative services, CSAMSI currently receives a fee calculated at an annual rate of 0.10% of the Fund's average daily net assets. For the year ended October 31, 2005, co-administrative services fees earned by CSAMSI were $63,382. For its co-administrative services, SSB receives a fee, exclusive of out-of-pocket expenses, calculated in total for all the Credit Suisse funds/portfolios co-administered by SSB and allocated based upon relative average net assets of each fund/portfolio subject to an annual minimum fee. For the year ended October 31, 2005, co-administrative services fees earned by SSB (including out-of-pocket expenses) were $52,295. 23 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NOTE 3. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES In addition to serving as the Fund's co-administrator, CSAMSI currently serves as distributor of the Fund's shares. Pursuant to distribution plans adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act, CSAMSI receives fees for its distribution services. These fees are calculated at the annual rate of 0.25% of the average daily net assets of the Common Class and Class A shares. Certain brokers, dealers and financial representatives provide transfer agent related services to the Fund, and receive compensation from CSAM. CSAM is then reimbursed by the Fund. For the year ended October 31, 2005, the Fund reimbursed CSAM $149,437, which is included in the Fund's transfer agent expense. For the year ended October 31, 2005, CSAMSI and its affiliates advised the Fund that they retained $5,082 from commissions earned on the sale of the Fund's Class A shares. Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the Fund to provide certain financial printing and fulfillment services. For the year ended October 31, 2005, Merrill was paid $9,227 for its services to the Fund. NOTE 4. LINE OF CREDIT The Fund, together with other funds/portfolios advised by CSAM (collectively, the "Participating Funds"), participates in a $75 million committed, unsecured line of credit facility ("Credit Facility") for temporary or emergency purposes with Deutsche Bank, A.G. as administrative agent and syndication agent and SSB as operations agent. Under the terms of the Credit Facility, the Participating Funds pay an aggregate commitment fee at a rate of 0.10% per annum on the average unused amount of the Credit Facility, which is allocated among the Participating Funds in such manner as is determined by the governing Boards of the Participating Funds. In addition, the Participating Funds pay interest on borrowings at the Federal Funds rate plus 0.50%. At October 31, 2005, the Fund had no loans outstanding under the Credit Facility. During the year ended October 31, 2005, the Fund had borrowings under the Credit Facility as follows: AVERAGE DAILY WEIGHTED AVERAGE MAXIMUM DAILY LOAN BALANCE INTEREST RATE LOAN OUTSTANDING ------------- ---------------- ---------------- $6,500,000 4.063% $6,500,000 24 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NOTE 5. PURCHASES AND SALES OF SECURITIES For the year ended October 31, 2005, purchases and sales of investment securities (excluding short-term investments) were $26,626,107 and $44,812,306, respectively. NOTE 6. CAPITAL SHARE TRANSACTIONS The Fund is authorized to issue four billion full and fractional shares of capital stock, $.001 par value per share, of which one billion shares of the Fund are designated Common Class shares, two billion shares of the Fund are designated Advisor Class shares and one billion shares of the Fund are designated Class A shares. Transactions in capital shares for each class were as follows:
COMMON CLASS ------------------------------------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 31, 2005 OCTOBER 31, 2004 ------------------------------------------------------- SHARES VALUE SHARES VALUE ----------- ------------ ----------- ------------ Shares sold 714,269 $ 3,997,422 2,058,879 $ 10,835,163 Shares redeemed (3,741,357) (20,515,366) (5,897,665) (31,141,988) ----------- ------------ ----------- ------------ Net decrease (3,027,088) $(16,517,944) (3,838,786) $(20,306,825) =========== ============ =========== ============ ADVISOR CLASS ------------------------------------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 31, 2005 OCTOBER 31, 2004 ------------------------------------------------------- SHARES VALUE SHARES VALUE ----------- ------------ ----------- ------------ Shares redeemed (27,004) $ (144,926) (15,365) $ (79,296) ----------- ------------ ----------- ------------ Net decrease (27,004) $ (144,926) (15,365) $ (79,296) =========== ============ =========== ============ CLASS A ------------------------------------------------------- FOR THE YEAR ENDED FOR THE YEAR ENDED OCTOBER 31, 2005 OCTOBER 31, 2004 ------------------------------------------------------- SHARES VALUE SHARES VALUE ----------- ------------ ----------- ------------ Shares sold 249,138 $ 1,348,633 150,408 $ 751,583 Shares redeemed (192,072) (1,088,788) (220,577) (1,133,175) ----------- ------------ ----------- ------------ Net increase (decrease) 57,066 $ 259,845 (70,169) $ (381,592) =========== ============ =========== ============
Effective September 16, 2002, a redemption fee of 2% of the value of Common Class shares redeemed or exchanged within 30 days from the date of purchase is charged to shareholders. Reinvested dividends and distributions are not subject to the fee. The fee is charged based on the value of shares at 25 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NOTE 6. CAPITAL SHARE TRANSACTIONS redemption, is paid directly to the Fund and becomes part of the Fund's daily net asset value calculation. When shares are redeemed that are subject to the fee, reinvested dividends and distributions are redeemed first, followed by the shares held longest. On October 31, 2005, the number of shareholders that held 5% or more of the outstanding shares of each class of the Fund were as follows: NUMBER OF APPROXIMATE PERCENTAGE SHAREHOLDERS OF OUTSTANDING SHARES ------------ ---------------------- Common Class 2 50% Advisor Class 6 65% Class A 3 96% Some of the shareholders are omnibus accounts, which hold shares on behalf of individual shareholders. NOTE 7. FEDERAL INCOME TAXES Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments of losses deferred due to wash sales and foreign currency translations. At October 31, 2005, the components of distributable earnings on a tax basis were as follows: Accumulated net realized loss $ (72,622,887) Net unrealized appreciation 15,636,377 ------------- $ (56,986,510) ============= At October 31, 2005, the Fund's capital loss carryforwards available to offset possible future capital gains were as follows: EXPIRES OCTOBER 31, --------------------------------------- 2009 2010 2011 ----------- ----------- ----------- $12,415,365 $29,470,281 $30,737,241 During the tax year ended October 31, 2005, the Fund has utilized $8,144,022 of the capital loss carryforward. Included in the Fund's capital loss carryforwards which expire in 2009 is $9,911,716 acquired in the Credit Suisse Japan Small Cap Fund merger that happened on April 26, 2002, which is subject to IRS limitation. 26 CREDIT SUISSE JAPAN EQUITY FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) October 31, 2005 - -------------------------------------------------------------------------------- NOTE 7. FEDERAL INCOME TAXES At October 31, 2005, the identified cost for federal income tax purposes, as well as the gross unrealized appreciation from investments for those securities having an excess of value over cost, gross unrealized depreciation from investments for those securities having an excess of cost over value and the net unrealized appreciation from investments were $61,751,300, $17,204,761, ($1,560,394) and $15,644,367, respectively. At October 31, 2005, the Fund reclassified $393,805 from accumulated undistributed net investment loss and $38,594 from accumulated net realized loss from investments to paid-in capital, to adjust for current period permanent book/tax differences which arose principally from differing book/tax treatments of foreign currency gains and net operating losses. Net assets were not affected by these reclassifications. NOTE 8. CONTINGENCIES In the normal course of business, the Fund may provide general indemnifications pursuant to certain contracts and organizational documents. The Fund's maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated; however; based on experience, the risk of loss from such claims is considered remote. 27 CREDIT SUISSE JAPAN EQUITY FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- To the Board of Directors and Shareholders of Credit Suisse Japan Equity Fund, Inc.: In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Credit Suisse Japan Equity Fund, Inc. (the "Fund") at October 31, 2005, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the years (or periods) presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2005 by correspondence with the custodian, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Baltimore, Maryland December 19, 2005 28 CREDIT SUISSE JAPAN EQUITY FUND INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED)
TERM NUMBER OF OF OFFICE1 PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS DATE OF BIRTH FUND SERVED PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR - ----------------- ------------ --------- -------------------- ------------- --------------- INDEPENDENT DIRECTORS Enrique Arzac Director, Since Professor of Finance and 47 Director of c/o Credit Suisse Asset Nominating 2005 Economics, Graduate The Adams Express Management, LLC Committee School of Business, Company (a closed- Attn: General Counsel Member and Columbia University end investment 466 Lexington Avenue Audit since 1971. company); Director New York, New York Committee of Petroleum and 10017-3140 Chairman Resources Corporation (a Date of Birth: 02/10/41 closed-end investment company) Richard H. Francis Director, Since Currently retired 41 None c/o Credit Suisse Asset Nominating 1999 Management, LLC and Audit Attn: General Counsel Committee 466 Lexington Avenue Member New York, New York 10017-3140 Date of Birth: 04/23/32 Jeffrey E. Garten Director, Since The Juan Trippe 40 Director of Box 208200 Nominating 19982 Professor in the Practice Aetna, Inc. New Haven, Connecticut and Audit of International Trade, (insurance 06520-8200 Committee Finance and Business company); Member from July 2005 to present; Director of Date of Birth: 10/29/46 Partner and Chairman of CarMax Group Garten Rothkopf (consulting (used car firm) from October 2005 dealers) to present; Dean of Yale School of Management from November 1995 to June 2005. Peter F. Krogh Director, Since Dean Emeritus and 40 Director 301 ICC Nominating 2001 Distinguished Professor of Carlisle Georgetown University and Audit of International Affairs Companies Washington, DC 20057 Committee at the Edmund A. Incorporated Member Walsh School of (diversified Date of Birth: 02/11/37 Foreign Service, manufacturing Georgetown University from company) June 1995 to present. - ---------------- 1 Each Director and Officer serves until his or her respective successor has been duly elected and qualified. 2 Mr. Garten was initially appointed as a Director of the Fund on February 6, 1998. He resigned as Director on February 3, 2000 and was subsequently reappointed on December 21, 2000. 29 CREDIT SUISSE JAPAN EQUITY FUND INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED) (CONTINUED) - -------------------------------------------------------------------------------- TERM NUMBER OF OF OFFICE1 PORTFOLIOS IN AND FUND POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS DATE OF BIRTH FUND SERVED PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR - ----------------- ------------ --------- -------------------- ------------- --------------- INDEPENDENT DIRECTORS James S. Pasman, Jr. Director, Since Currently retired 42 Director of c/o Credit Suisse Asset Nominating 1999 Education Management, LLC and Audit Management Attn: General Counsel Committee Corp. 466 Lexington Avenue Member New York, New York 10017-3140 Date of Birth: 12/20/30 Steven N. Rappaport Chairman of Director Partner of Lehigh Court, 46 Director of Lehigh Court, LLC the Board of since LLC and RZ Capital Presstek, Inc. 40 East 52nd Street Directors, 1999 (private investment (digital imaging New York, New York Nominating and firms) from July 2002 technologies 10022 Committee Chairman to present; Transition company); Chairman since Adviser to SunGard Director of and Audit 2005 Securities Finance, Inc. Wood Resources, Committee from February 2002 to LLC. (plywood Date of Birth: 07/10/48 Member July 2002; President of manufacturing SunGard Securities company) Finance, Inc. from 2001 to February 2002; President of Loanet, Inc. (on-line accounting service) from 1997 to 2001. INTERESTED DIRECTOR Michael E. Kenneally 3,4 Director Since Chairman and Global 40 None c/o Credit Suisse Asset 2004 Chief Executive Officer of Management, LLC CSAM from 2003 to July Attn: General Counsel 2005; Chairman and Chief 466 Lexington Avenue Investment Officer of New York, New York Banc of America Capital 10017-3140 Management from 1998 to March 2003. Date of Birth: 03/30/54
- ---------------- 3 Mr. Kenneally is a Director who is an "interested person" of the Fund as defined in the 1940 Act, because he was an officer of CSAM within the last two fiscal years. 4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive Officer and President of the Fund. Mr. Kenneally, who previously held these positions, resigned effective July 31, 2005. 30 CREDIT SUISSE JAPAN EQUITY FUND INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED) (CONTINUED) - --------------------------------------------------------------------------------
TERM OF OFFICE1 AND POSITION(S) LENGTH NAME, ADDRESS AND HELD WITH OF TIME DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS - ----------------------------------------------------------------------------------------------------------------- OFFICERS Steven B. Plump4 Chief Since Managing Director; Associated with CSAM or its Credit Suisse Asset Executive 2005 predecessor since 1995; Officer of other Management, LLC Officer Credit Suisse Funds 466 Lexington Avenue and New York, New York President 10017-3140 Date of Birth: 02/08/59 Michael A. Pignataro Chief Since Director and Director of Fund Administration of CSAM; Credit Suisse Asset Financial 1999 Associated with CSAM or its predecessor since 1984; Management, LLC Officer and Officer of other Credit Suisse Funds 466 Lexington Avenue Treasurer New York, New York 10017-3140 Date of Birth: 11/15/59 Emidio Morizio Chief Since Director and Global Head of Compliance of CSAM; Credit Suisse Asset Compliance 2004 Associated with CSAM since July 2000; Vice President and Management, LLC Officer Director of Compliance of Forstmann-Leff Associates from 466 Lexington Avenue 1998 to June 2000; Officer of other Credit Suisse Funds New York, New York 10017-3140 Date of Birth: 09/21/66 Ajay Mehra Chief Since Director and General Counsel (Americas) of CSAM since Credit Suisse Asset Legal 2004 September 2004; Senior Associate of Shearman & Sterling Management, LLC Officer LLP from September 2000 to September 2004; Senior 466 Lexington Avenue Counsel of the SEC Division of Investment Management New York, New York from June 1997 to September 2000; Officer of other 10017-3140 Credit Suisse Funds Date of Birth: 08/14/70 J. Kevin Gao Vice Since Vice President and Associate General Counsel of CSAM; Credit Suisse Asset President 2004 Associated with CSAM since July 2003; Associated with Management, LLC and the law firm of Willkie Farr & Gallagher LLP from 1998 to 466 Lexington Avenue Secretary 2003; Officer of other Credit Suisse Funds New York, New York 10017-3140 Date of Birth: 10/13/67 Robert Rizza Assistant Since Assistant Vice President of CSAM; Associated with CSAM Credit Suisse Asset Treasurer 2002 since 1998; Officer of other Credit Suisse Funds Management, LLC 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 12/09/65
- ---------------- 4 Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive Officer and President of the Fund. Mr. Kenneally, who previously held these positions, resigned effective July 31, 2005. The Statement of Additional Information includes additional information about the Directors and is available, without charge, upon request, by calling 800-927-2874. 31 CREDIT SUISSE JAPAN EQUITY FUND TAX INFORMATION LETTER October 31, 2005 (unaudited) - -------------------------------------------------------------------------------- IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS For the fiscal year ended October 31, 2005 certain dividends paid by the Fund may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. Complete information will be reported in conjunction with your 2005 Form 1099-DIV. 32 CREDIT SUISSE JAPAN EQUITY FUND PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION - -------------------------------------------------------------------------------- Information regarding how the Fund voted proxies related to its portfolio securities during the 12-month period ended June 30 of each year as well as the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities are available: o By calling 1-800-927-2874 o On the Fund's website, www.csam.com/us o On the website of the Securities and Exchange Commission, http://www.sec.gov. The Fund files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. 33 This page intentionally left blank 34 This page intentionally left blank 35 P.O. BOX 55030, BOSTON, MA 02205-5030 CREDIT | ASSET 800-927-2874 o www.csam.com/us SUISSE | MANAGEMENT CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., DISTRIBUTOR. JEQ-AR-1005 ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics applicable to its Chief Executive Officer, President, Chief Financial Officer and Chief Accounting Officer, or persons performing similar functions. A copy of the code is filed as Exhibit 12(a)(1) to this Form. There were no amendments to the code during the fiscal year ended October 31, 2005. There were no waivers or implicit waivers from the code granted by the registrant during the fiscal year ended October 31, 2005. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's governing board has determined that it has four audit committee financial experts serving on its audit committee: Enrique R. Arzac, Richard H. Francis, James S. Pasman, Jr., and Steven N. Rappaport. Each audit committee financial expert is "independent" for purposes of this item. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) through (d). The information in the table below is provided for services rendered to the registrant by its independent registered public accounting firm, PricewaterhouseCoopers LLP ("PwC"), for its fiscal years ended October 31, 2004 and October 31, 2005.
- ---------------------------------------- -------------------------------------- -------------------------------------- 2004 2005 - ---------------------------------------- -------------------------------------- -------------------------------------- Audit Fees $15,943 $14,972 - ---------------------------------------- -------------------------------------- -------------------------------------- Audit-Related Fees1 $4,500 $3,150 - ---------------------------------------- -------------------------------------- -------------------------------------- Tax Fees2 $2,323 $2,439 - ---------------------------------------- -------------------------------------- -------------------------------------- All Other Fees -- -- - ---------------------------------------- -------------------------------------- -------------------------------------- Total $22,766 $20,561 - ---------------------------------------- -------------------------------------- --------------------------------------
1 Services include agreed-upon procedures in connection with the registrant's semi-annual financial statements ($3,000 for 2004 and $3,150 for 2005), the registrant's third quarter 2004 Form N-Q filing ($1,500) in 2004. 2 Tax services in connection with the registrant's excise tax calculations and review of the registrant's applicable tax returns. The information in the table below is provided with respect to non-audit services that directly relate to the registrant's operations and financial reporting and that were rendered by PwC to the registrant's investment adviser, Credit Suisse Asset Management, LLC ("CSAM"), and any service provider to the registrant controlling, controlled by or under common control with CSAM that provided ongoing services to the registrant ("Covered Services Provider"), for the registrant's fiscal years ended October 31, 2004 and October 31, 2005.
- ---------------------------------------- -------------------------------------- -------------------------------------- 2004 2005 - ---------------------------------------- -------------------------------------- -------------------------------------- 2 - ---------------------------------------- -------------------------------------- -------------------------------------- Audit-Related Fees N/A N/A - ---------------------------------------- -------------------------------------- -------------------------------------- Tax Fees N/A N/A - ---------------------------------------- -------------------------------------- -------------------------------------- All Other Fees N/A $394,000 - ---------------------------------------- -------------------------------------- -------------------------------------- Total N/A $394,000 - ---------------------------------------- -------------------------------------- --------------------------------------
(e)(1) Pre-Approval Policies and Procedures. The Audit Committee ("Committee") of the registrant is responsible for pre-approving (i) all audit and permissible non-audit services to be provided by the independent registered public accounting firm to the registrant and (ii) all permissible non-audit services to be provided by the independent registered public accounting firm to CSAM and any Covered Services Provider if the engagement relates directly to the operations and financial reporting of the registrant. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to the Chairperson of the Committee, and the Chairperson shall report to the Committee, at its next regularly scheduled meeting after the Chairperson's pre-approval of such services, his or her decision(s). The Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in accordance with applicable laws, including the delegation of some or all of the Committee's pre-approval responsibilities to other persons (other than CSAM or the registrant's officers). Pre-approval by the Committee of any permissible non-audit services shall not be required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the registrant, CSAM and any Covered Services Provider constitutes not more than 5% of the total amount of revenues paid by the registrant to its independent registered public accounting firm during the fiscal year in which the permissible non-audit services are provided; (ii) the permissible non-audit services were not recognized by the registrant at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit. (e)(2) The information in the table below sets forth the percentages of fees for services (other than audit, review or attest services) rendered by PwC to the registrant for which the pre-approval requirement was waived pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X:
- ---------------------------------------- -------------------------------------- -------------------------------------- 2004 2005 - ---------------------------------------- -------------------------------------- -------------------------------------- Audit-Related Fees N/A N/A - ---------------------------------------- -------------------------------------- -------------------------------------- Tax Fees N/A N/A - ---------------------------------------- -------------------------------------- -------------------------------------- All Other Fees N/A N/A - ---------------------------------------- -------------------------------------- -------------------------------------- Total N/A N/A - ---------------------------------------- -------------------------------------- --------------------------------------
3 The information in the table below sets forth the percentages of fees for services (other than audit, review or attest services) rendered by PwC to CSAM and any Covered Services Provider required to be approved pursuant to Rule 2-01(c)(7)(ii)of Regulation S-X, for the registrant's fiscal years ended October 31, 2004 and October 31, 2005:
- ---------------------------------------- -------------------------------------- -------------------------------------- 2004 2005 - ---------------------------------------- -------------------------------------- -------------------------------------- Audit-Related Fees N/A N/A - ---------------------------------------- -------------------------------------- -------------------------------------- Tax Fees N/A N/A - ---------------------------------------- -------------------------------------- -------------------------------------- All Other Fees N/A N/A - ---------------------------------------- -------------------------------------- -------------------------------------- Total N/A N/A - ---------------------------------------- -------------------------------------- --------------------------------------
(f) Not Applicable. (g) The aggregate fees billed by PwC for non-audit services rendered to the registrant, CSAM and Covered Service Providers for the fiscal years ended October 31, 2004 and October 31, 2005 were $6,823 and $5,589, respectively. (h) Not Applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Form N-CSR disclosure requirement is not applicable to the registrant. ITEM 6. SCHEDULE OF INVESTMENTS. Included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. 4 Form N-CSR disclosure requirement is not applicable to the registrant. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Form N-CSR disclosure requirement is not applicable to the registrant. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Form N-CSR disclosure requirement is not applicable to the registrant. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None. ITEM 11. CONTROLS AND PROCEDURES. (a) As of a date within 90 days from the filing date of this report, the principal executive officer and principal financial officer concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) were effective based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. (b) There were no changes in registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this 5 report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Registrant's Code of Ethics is an exhibit to this report. (a)(2) The certifications of the registrant as required by Rule 30a-2(a) under the Act are exhibits to this report. (a)(3) Not applicable. (b) The certifications of the registrant as required by Rule 30a-2(b) under the Act are an exhibit to this report. 6 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. CREDIT SUISSE JAPAN EQUITY FUND, INC. /s/ Steven B. Plump ------------------- Name: Steven B. Plump Title: Chief Executive Officer Date: January 9, 2006 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. /s/ Steven B. Plump ------------------- Name: Steven B. Plump Title: Chief Executive Officer Date: January 9, 2006 /s/ Michael A. Pignataro ------------------------ Name: Michael A. Pignataro Title: Chief Financial Officer Date: January 9, 2006 7 EX-99.CODE ETH 2 file002.txt CODE OF ETHICS EXHIBIT 12(a)(1) CODE OF ETHICS CREDIT SUISSE FUNDS CREDIT SUISSE INSTITUTIONAL FUNDS CREDIT SUISSE CLOSED-END FUNDS CODE OF ETHICS FOR SENIOR OFFICERS Preamble Section 406 of the Sarbanes-Oxley Act of 2002 directs that rules be adopted disclosing whether a company has a code of ethics for senior financial officers. The Securities and Exchange Commission (the "SEC") has adopted rules requiring annual disclosure of an investment company's code of ethics applicable to the company's principal executive as well as principal financial officers, if such a code has been adopted. In response, the above Funds (each a "Fund", and together the "Funds") have adopted this Code of Ethics. Statement of Policy It is the obligation of the senior officers of the Funds to provide full, fair, timely and comprehensible disclosure--financial and otherwise--to Fund shareholders, regulatory authorities and the general public. In fulfilling that obligation, senior officers must act ethically, honestly and diligently. This Code is intended to enunciate guidelines to be followed by persons who serve the Funds in senior officerships. No Code can address every situation that a senior officer might face; however, as a guiding principle, senior officers should strive to implement the spirit as well as the 8 letter of applicable laws, rules and regulations, and to provide the type of clear and complete disclosure and information Fund shareholders have a right to expect. The purpose of this Code of Ethics is to promote high standards of ethical conduct by Covered Persons (as defined below) in their capacities as officers of the Funds, to instruct them as to what is considered to be inappropriate and unacceptable conduct or activities for officers and to prohibit such conduct or activities. This Code supplements other policies that the Funds and their adviser have adopted or may adopt in the future with which Fund officers are also required to comply (e.g., code of ethics relating to personal trading and conduct). Covered Persons This Code of Ethics applies to those persons appointed by the Fund's Board of Directors as Chief Executive Officer, President, Chief Financial Officer and Chief Accounting Officer, or persons performing similar functions. It is recognized that each of such persons currently is a full-time employee of Credit Suisse Asset Management LLC ("CSAM"), each Fund's investment adviser. Promotion of Honest and Ethical Conduct In serving as an officer of the Funds, each Covered Person must maintain high standards of honesty and ethical conduct and must encourage his colleagues who provide services to the Funds, whether directly or indirectly, to do the same. Each Covered Person understands that as an officer of a Fund, he has a duty to act in the best interests of the Fund and its shareholders. The interests of other CSAM clients or CSAM itself or the Covered Person's personal interests should not be allowed to compromise the Covered 9 Person's fulfilling his duties as an officer of the Fund. The governing Boards of the Funds recognize that the Covered Persons are also officers or employees of CSAM. Furthermore, the governing Boards of the Funds recognize that, subject to the Covered Person's fiduciary duties to the Funds, the Covered Persons will in the normal course of their duties (whether formally for the Funds or for CSAM, or for both) be involved in establishing policies and implementing decisions that will have different effects on CSAM and the Funds. The governing Boards of the Funds recognize that the participation of the Covered Persons in such activities is inherent in the contractual relationship between the Funds and CSAM and/or its affiliates, and is consistent with the expectation of the governing Boards of the performance by the Covered Persons of their duties as officers of the Funds. If a Covered Person believes that his responsibilities as an officer or employee of CSAM are likely to materially compromise his objectivity or his ability to perform the duties of his role as an officer of the Funds, he should consult with CSAM's general counsel, the Funds' chief legal officer or outside counsel, or counsel to the independent Directors/Trustees of the relevant Fund or Funds. Under appropriate circumstances, a Covered Person should also consider whether to present the matter to the Directors/Trustees of the relevant Fund or Funds or a committee thereof. No Covered Person shall suggest that any person providing, or soliciting to be retained to provide, services to a Fund give a gift or an economic benefit of any kind to him in connection with the person's retention or the provision of services. Promotion of Full, Fair, Accurate, Timely and Understandable Disclosure No Covered Person shall create or further the creation of false or misleading information in any SEC filing or report to Fund shareholders. No Covered Person shall conceal or fail 10 to disclose information within the Covered Person's possession legally required to be disclosed or necessary to make the disclosure made not misleading. If a Covered Person shall become aware that information filed with the SEC or made available to the public contains any false or misleading information or omits to disclose necessary information, he shall promptly report it to CSAM's general counsel or Fund counsel, who shall advise such Covered Person whether corrective action is necessary or appropriate. Each Covered Person, consistent with his responsibilities, shall exercise appropriate supervision over, and shall assist, relevant Fund service providers in developing financial information and other disclosure that complies with relevant law and presents information in a clear, comprehensible and complete manner. Each Covered Person shall use his best efforts within his area of expertise to assure that Fund reports reveal, rather than conceal, the relevant Fund's financial condition. Each Covered Person shall seek to obtain additional resources if he believes that available resources are inadequate to enable the Funds to provide full, fair and accurate financial information and other disclosure to regulators and Fund shareholders. Each Covered Person shall inquire of other Fund officers and service providers, as appropriate, to assure that information provided is accurate and complete and presented in an understandable format using comprehensible language. Each Covered Person shall diligently perform his services to the Funds, so that information can be gathered and assessed early enough to facilitate timely filings and issuance of reports and required certifications. 11 Promotion of Compliance with Applicable Government Laws, Rules and Regulations Each Covered Person shall become and remain knowledgeable concerning the laws and regulations relating to the Funds and their operations and shall act with competence and due care in serving as an officer of the Funds. Each Covered Person with specific responsibility for financial statement disclosure will become and remain knowledgeable concerning relevant auditing standards, generally accepted accounting principles, FASB pronouncements and other accounting and tax literature and developments. Each Covered Person shall devote sufficient time to fulfilling his responsibilities to the Funds, recognizing that he will devote substantial time to providing services to other CSAM clients and will perform other activities as an employee of CSAM. Each Covered Person shall cooperate with a Fund's independent auditors, regulatory agencies and internal auditors in their review or inspection of the Fund and its operations. No Covered Person shall knowingly violate any law or regulation relating to the Funds or their operations or seek to illegally circumvent any such law or regulation. No Covered Person shall engage in any conduct involving dishonesty, fraud, deceit or misrepresentation involving the Funds or their operations. Promoting Prompt Internal Reporting of Violations Each Covered Person shall promptly report his own violations of this Code and violations by other Covered Persons of which he is aware to the Chairman of the relevant Fund's Audit Committee. 12 Any requests for a waiver from or an amendment to this Code shall be made to the Chairman of the relevant Fund's Audit Committee. All waivers and amendments shall be disclosed as required by law. Sanctions Failure to comply with this Code will subject the violator to appropriate sanctions, which will vary based on the nature and severity of the violation. Such sanctions may include censure, suspension or termination of position as an officer of the Fund. Sanctions shall be imposed by the relevant Fund's Audit Committee, subject to review by the entire Board of Directors/Trustees of the Fund. Each Covered Person shall be required to certify annually whether he has complied with this Code. No Rights Created This Code of Ethics is a statement of certain fundamental principles, policies and procedures that govern the Funds' senior officers in the conduct of the Funds' business. It is not intended to and does not create any rights in any employee, investor, supplier, competitor, shareholder or any other person or entity. Recordkeeping The Funds will maintain and preserve for a period of not less than six (6) years from the date such action is taken, the first two (2) years in an easily accessible place, a copy of the information or materials supplied to the Board (1) that provided the basis for any amendment or 13 waiver to this Code and (2) relating to any violation of the Code and sanctions imposed for such violation, together with a written record of the approval or action taken by the relevant Board. Amendments The Directors/Trustees will make and approve such changes to this Code of Ethics as they deem necessary or appropriate to effectuate the purposes of this Code. Dated: May 17, 2005 14 CODE OF ETHICS FOR SENIOR OFFICERS: I HEREBY CERTIFY THAT: (1) I have read and I understand the Code of Ethics for Senior Officers adopted by the Credit Suisse Funds, the Credit Suisse Institutional Funds and the Credit Suisse Closed-End Funds (the "Code of Ethics"); (2) I recognize that I am subject to the Code of Ethics; (3) I have complied with the requirements of the Code of Ethics during the calendar year ending December 31, _______; and (4) I have reported all violations of the Code of Ethics required to be reported pursuant to the requirements of the Code during the calendar year ending December 31, _______. Set forth below exceptions to items (3) and (4), if any: ---------------------------------------- ---------------------------------------- ---------------------------------------- Name: ------------------------------ Date: EX-99.CERT 3 file003.txt CERTIFICATIONS EXHIBIT 12(a)(2) CERTIFICATIONS I, Michael A. Pignataro, certify that: 1. I have reviewed this report on Form N-CSR of Credit Suisse Japan Equity Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 9, 2006 /s/ Michael A. Pignataro - ------------------------ Michael A. Pignataro Chief Financial Officer I, Steven B. Plump, certify that: 1. I have reviewed this report on Form N-CSR of Credit Suisse Japan Equity Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 9, 2006 /s/ Steven B. Plump - ------------------- Steven B. Plump Chief Executive Officer EX-99.906CERT 4 file004.txt CERTIFICATIONS EXHIBIT 12(b) SECTION 906 CERTIFICATIONS SECTION 906 CERTIFICATION Steven B. Plump, Chief Executive Officer, and Michael A. Pignataro, Chief Financial Officer, of Credit Suisse Japan Equity Fund, Inc. (the "Fund"), each certify to his knowledge that: (1) The Fund's periodic report on Form N-CSR for the period ended October 31, 2005 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. /s/ Steven B. Plump /s/ Michael A. Pignataro ------------------- ------------------------ Steven B. Plump Michael A. Pignataro Chief Executive Officer Chief Financial Officer January 9, 2006 January 9, 2006 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----