morgan stanley asia-pacific fund, inc. nyse: apf

I N V E S T M E N T M A N A G E M E N T

Morgan StanleyInvestment Management Inc.Adviser

Morgan StanleyAsia-PacificFund, Inc.NYSE: APFAnnual ReportDecember 31, 2016

e-DELIVERY: Go PaperlessIt’s faster, easier and greener.Sign up today at:www.icsdelivery.comMay not be available for all accounts.

For additional Fund information, including the Fund’s net asset value pershare and information regarding the investments comprising the Fund’sportfolio, please call toll free 1 (800) 231-2608 or visit our website atwww.morganstanley.com/im. All investments involve risks, including thepossible loss of principal.

© 2017 Morgan Stanley.

Adviser and AdministratorMorgan Stanley Investment Management Inc.522 Fifth AvenueNew York, New York 10036

Sub-AdviserMorgan Stanley Investment Management Company23 Church Street16-01 Capital Square, Singapore 049481

CustodianState Street Bank and Trust CompanyOne Lincoln StreetBoston, Massachusetts 02111

Stockholder Servicing AgentComputershare Trust Company, N.A.211 Quality Circle, Suite 210College Station, Texas 77845

Legal CounselDechert LLP1095 Avenue of the AmericasNew York, New York 10036

Counsel to the Independent DirectorsPerkins Coie LLP30 Rockefeller PlazaNew York, New York 10112

Independent Registered Public Accounting FirmErnst & Young LLP200 Clarendon StreetBoston, Massachusetts 02116

CEAPFANN

1700618 EXP 2.28.18

DirectorsFrank L. BowmanKathleen A. DennisNancy C. EverettJakki L. HausslerDr. Manuel H. JohnsonJoseph J. KearnsMichael F. KleinPatricia MaleskiMichael E. Nugent,Chair of the BoardW. Allen ReedFergus Reid

OfficersJohn H. GernonPresident and PrincipalExecutive Officer

Timothy J. KnierimChief Compliance Officer

Francis J. SmithTreasurer and PrincipalFinancial Officer

Mary E. MullinSecretary

Morgan Stanley Asia-Pacific Fund, Inc.

Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | eperez | 10-Feb-17 21:43 | 17-2621-2.aa | Sequence: 1CHKSUM Content: 26223 Layout: 16780 Graphics: 53099 CLEAN

JOB: 17-2621-2 CYCLE#;BL#: 2; 0 TRIM: 7.5" x 8.75" AS: Merrill New York: 212-620-5600 COMPOSITECOLORS: Black, ~HTML color, ~HTML color 2, ~note-color 2, ~note-color 3 GRAPHICS: e-del_5L_85k_2013.eps, morgan_stanley_new_k_logo.eps, ms_new_ko_logo.eps V1.5

2


December 31, 2016

Table of ContentsLetter to Stockholders ................................................................................................................................................................... 3

Portfolio of Investments.................................................................................................................................................................. 5

Statement of Assets and Liabilities.................................................................................................................................................. 10

Statement of Operations ................................................................................................................................................................ 11

Statements of Changes in Net Assets.............................................................................................................................................. 12

Financial Highlights ........................................................................................................................................................................ 13

Notes to Financial Statements ........................................................................................................................................................ 14

Report of Independent Registered Public Accounting Firm................................................................................................................. 25

Portfolio Management .................................................................................................................................................................... 26

Investment Policy........................................................................................................................................................................... 27

Dividend Reinvestment and Cash Purchase Plan ............................................................................................................................... 32

Privacy Notice ............................................................................................................................................................................... 33

Director and Officer Information ...................................................................................................................................................... 37

Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | cmashak | 24-Feb-17 02:57 | 17-2621-2.ba | Sequence: 1CHKSUM Content: 9620 Layout: 54940 Graphics: No Graphics CLEAN

JOB: 17-2621-2 CYCLE#;BL#: 5; 0 TRIM: 7.5" x 8.75" AS: Merrill New York: 212-620-5600 COMPOSITECOLORS: Black, ~note-color 2 GRAPHICS: none V1.5

3


December 31, 2016

Letter to Stockholders (unaudited)PerformanceFor the year ended December 31, 2016, the Morgan Stanley Asia-Pacific Fund, Inc. (the “Fund”) had total returns of 1.82%, basedon net asset value, and -1.37% based on market value per share (including reinvestment of distributions). The Fund’s benchmark theMSCI All Country Asia Pacific ex Japan Index (the “Index”)*, returned 6.75%. On December 31, 2016, the closing price of theFund’s shares on the New York Stock Exchange was $13.50, representing a 13.7% discount to the Fund’s net asset value per share.Past performance is no guarantee of future results.

Factors Affecting Performance• For the 12-month reporting period, Asia Pacific ex Japan markets (as measured by the Index) underperformed the MSCI World

Index, which returned 7.51%, and the MSCI Emerging Market Index, which returned 11.19%. Asia started the year in a big“risk-off” mode as Chinese stock market circuit breakers were triggered on the first day of trading. Both the Shanghai andShenzhen markets were down 23% and 27% in local currency, respectively, for the month of January alone.i The fears over apotential U.S. recession added more anxiety to the already precarious sentiment. While both indexes managed to rise from theFebruary lows, they ended the year down 12.31% and 14.72%, respectively, despite the macro data showing improvementsthroughout the year on the back of the government stimulus.

• Thailand was the best performer in the region, helped by the national constitutional referendum and stronger and more resilient-than-expected gross domestic product growth. Taiwan also recorded a strong year on the back of strong performance from the technologysector. The Philippines was the worst performer as it gave up all of its gains from the middle of the year, due to comments from thenew President Duterte added to the political uncertainty and concerns over trade policies by U.S. President Trump.

• Political events grabbed news headlines throughout the year. Some were positive, such as the successful Indonesian tax amnesty,the passing of key reforms in India, and the first woman president in Taiwan. Unfortunately, most were negative headlines: theimpeachment of Korean President Park, the Malaysia state investment fund 1Malaysia Development Berhad, or 1MDB, scandal,and the demonetization of large currency notes in India. This happened in a year when the Brexit referendum occurred andDonald Trump was elected president of the United States.

• Stock selection was the main reason for the underperformance, particularly in Korea, Taiwan, Australia and Indonesia. From anallocation perspective, the underweight allocation in Australia and overweight allocation in India were detractors, while theunderweight allocation in Malaysia and overweight allocation in Taiwan contributed positively. At the sector level, stockselection detracted in materials, industrials and consumer discretionary, while the underweight allocation in materials andoverweight allocations in industrials and consumer discretionary detracted.

Management Strategies• The Fund seeks long-term capital appreciation and integrates top-down country allocation and bottom-up stock selection.

• In 2016, Asian equity markets in aggregate registered flattish U.S. dollar returns but with a reasonable spread between theoutperformers — Thailand, Taiwan, Indonesia, and India — and the worst underperformers — the Philippines and Malaysia.Lack of earnings growth plus political issues were behind the valuation de-rating that Asia experienced versus the rest of emergingand developed markets.

Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | cmashak | 24-Feb-17 02:57 | 17-2621-2.ba | Sequence: 2CHKSUM Content: 31439 Layout: 6193 Graphics: No Graphics CLEAN


4


December 31, 2016

Letter to Stockholders (unaudited) (cont’d)• Despite potential positive economic growth surprises in the U.S., the immediate impact of the strong growth to Asia will likely

be more muted with potentially rising trade barriers subduing any upside surprises. In a world facing lower economic growthfrom a combination of demographic pressure, lower trade volumes and a huge increase in debt, we own what we call a “post-China world” portfolio, seeking those pockets of growth in countries where we believe domestic consumer demand is strong andcredit growth is in healthy early stages. Domestic-focused economies will likely fare better in a de-globalizing world. In our view,Indonesia, the Philippines, and India are the most domestic-focused among the Asian economies.

• In Asia, there are some signs that earnings growth could finally pick up. At the moment, earnings upgrades have been limited tothe materials and energy sectors, but given that we are seeing some inflation return, we could start to see other sectors also benefitfrom profit margin expansion. Politics both in Asia and also globally will remain an ongoing volatility generator, with“risk-on/risk-off” episodes continuing but with potentially lower magnitudes. The general trend will likely continue to show theworld is de-globalizing after a multi-decade period of globalization that ended in 2008.

• Disconnect and distortions in interest rate policies and credit spreads will also impact currencies and therefore Asian asset classes.Growth and inflation globally and in Asia will need to be monitored to see whether we go from a deflationary world to one withpossible stagflation. We believe Asian valuations are reasonable on absolute levels and cheap relative to developed markets, butwould need a sustainable catalyst to unlock the valuation genie.

• The Fund remains overweight in Korea, India, Taiwan, the Philippines and Indonesia, and remains underweight in Australia,Malaysia, China, Hong Kong and Singapore.

• From a sector perspective, we have overweight exposures to consumer discretionary, industrials and information technology, andunderweight exposures to financials, materials, real estate, energy and utilities. We continue to focus on and position the Fund’sportfolio with a bias toward quality and growth.

Sincerely,

John H. GernonPresident and Principal Executive Officer January 2017

*The MSCI All Country Asia Pacific ex Japan Index is a free float-adjusted market capitalization weighted index designed to measure the equity marketperformance of developed and emerging markets in the Asia Pacific region excluding Japan. The performance of the Index is listed in U.S. dollars and assumesreinvestment of net dividends. It is not possible to invest directly in an index. The Fund changed its benchmark effective market open on April 10, 2014 toMSCI All Country Asia Pacific ex Japan Index. Benchmark returns prior to April 10, 2014 were the MSCI All Country Asia Pacific Index.

i Source: Bloomberg L.P.

Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | cmashak | 24-Feb-17 02:57 | 17-2621-2.ba | Sequence: 3CHKSUM Content: 52110 Layout: 65183 Graphics: 44807 CLEAN

JOB: 17-2621-2 CYCLE#;BL#: 5; 0 TRIM: 7.5" x 8.75" AS: Merrill New York: 212-620-5600 COMPOSITECOLORS: Black, ~note-color 2 GRAPHICS: John_Gernon_Sig.eps V1.5

5


December 31, 2016

Portfolio of Investments

Diversified Consumer ServicesNew Oriental Education & Technology

Group, Inc. ADR (b) 21,192 $ 892TAL Education Group ADR (b) 16,523 1,159

2,051Diversified Telecommunication Services

China Unicom Hong Kong Ltd. (a) 1,088,000 1,267Food Products

China Mengniu Dairy Co., Ltd. (a) 453,000 873Hotels, Restaurants & Leisure

Shanghai Jin Jiang International Hotels Group Co., Ltd. H Shares (a) 1,176,000 311

Independent Power and Renewable Electricity ProducerHuadian Power International Corp.,

Ltd. H Shares (a) 984,000 446Insurance

China Pacific Insurance Group Co., Ltd. H Shares (a) 626,000 2,184

Internet & Direct Marketing RetailJD.com, Inc. ADR (b) 69,708 1,773

Internet Software & ServicesAlibaba Group Holding Ltd. ADR (b) 45,696 4,012NetEase, Inc. ADR 4,755 1,024Tencent Holdings Ltd. (a) 562,300 13,756

18,792Machinery

CRCC High-Tech Equipment Corp., Ltd. H Shares (a) 1,243,500 499

Oil, Gas & Consumable FuelsPetroChina Co., Ltd. H Shares (a) 1,896,000 1,413

PharmaceuticalsCSPC Pharmaceutical Group Ltd. (a) 1,052,000 1,123

Real Estate Management & DevelopmentChina Overseas Land &

Investment Ltd. (a) 240,000 636Textiles, Apparel & Luxury Goods

Shenzhou International Group Holdings Ltd. (a) 199,000 1,259

Transportation InfrastructureShenzhen International

Holdings Ltd. (a) 314,000 458

COMMON STOCKS (98.7%)Australia (18.5%)Banks

Australia & New Zealand Banking Group Ltd. 280,629 $ 6,160

Westpac Banking Corp. 178,309 4,195 10,355

BiotechnologyCSL Ltd. 40,906 2,964

Capital MarketsASX Ltd. 74,812 2,685

Construction MaterialsBoral Ltd. 748,955 2,924

Food & Staples RetailingWoolworths Ltd. 183,455 3,191

Health Care Equipment & SuppliesResMed, Inc. 688,956 4,266

Health Care Providers & ServicesHealthscope Ltd. 1,403,409 2,319Ramsay Health Care Ltd. 31,009 1,529

3,848Hotels, Restaurants & Leisure

Tabcorp Holdings Ltd. 439,385 1,525Insurance

QBE Insurance Group Ltd. 299,515 2,684Oil, Gas & Consumable Fuels

Santos Ltd. 634,270 1,840Real Estate Management & Development

Lend Lease Group REIT 319,772 3,374 39,656

China (23.2%)Automobiles

Chongqing Changan Automobile Co., Ltd. B Shares 313,500 448

BanksBank of China Ltd. H Shares (a) 9,859,000 4,374China Construction Bank Corp.

H Shares (a) 7,000,560 5,389 9,763

Construction & EngineeringChina Machinery Engineering Corp.

H Shares (a) 796,000 505

Value Shares (000)

Value Shares (000)

The accompanying notes are an integral part of the financial statements.

Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | cmashak | 01-Mar-17 04:28 | 17-2621-2.ca | Sequence: 1CHKSUM Content: 44319 Layout: 42938 Graphics: No Graphics CLEAN


6


December 31, 2016

Portfolio of Investments (cont’d)

Zee Entertainment Enterprises Ltd. 319,430 $ 2,132 3,038

Oil, Gas & Consumable FuelsBharat Petroleum Corp., Ltd. 207,972 1,947

Personal ProductsMarico Ltd. 332,102 1,275

Transportation InfrastructureGateway Distriparks Ltd. 263,211 950

19,842Indonesia (5.1%)Automobiles

Astra International Tbk PT 1,959,700 1,204Banks

Bank Mandiri Persero Tbk PT 2,015,800 1,732Bank Negara Indonesia Persero

Tbk PT 2,950,900 1,210 2,942

Construction MaterialsSemen Indonesia Persero Tbk PT 1,873,400 1,276

Diversified Telecommunication ServicesLink Net Tbk PT 2,821,600 1,078Telekomunikasi Indonesia Persero

Tbk PT 5,970,700 1,764 2,842

Multi-line RetailMatahari Department Store Tbk PT 424,100 476

Real Estate Management & DevelopmentBumi Serpong Damai Tbk PT 8,364,700 1,090

Wireless Telecommunication ServicesXL Axiata Tbk PT (b) 6,456,550 1,107

10,937Korea, Republic of (14.9%)Aerospace & Defense

Hanwha Techwin Co., Ltd. 21,058 758Korea Aerospace Industries Ltd. 25,911 1,437

2,195Auto Components

Hyundai Wia Corp. 6,605 399Mando Corp. 9,293 1,805

2,204

China (cont’d)Wireless Telecommunication Services

China Mobile Ltd. (a) 556,500 $ 5,899 49,700

Hong Kong (8.4%)Banks

BOC Hong Kong Holdings Ltd. 861,500 3,083Capital Markets

Hong Kong Exchanges and Clearing Ltd. 59,200 1,399Diversified Telecommunication Services

HKT Trust & HKT Ltd. 1,028,340 1,261Electric Utilities

Power Assets Holdings Ltd. 60,000 529Industrial Conglomerates

CK Hutchison Holdings Ltd. 393,768 4,463Insurance

AIA Group Ltd. 698,200 3,939Real Estate Management & Development

Cheung Kong Property Holdings Ltd. 332,768 2,041Textiles, Apparel & Luxury Goods

Samsonite International SA 453,000 1,294 18,009

India (9.2%)Automobiles

Maruti Suzuki India Ltd. 19,500 1,528Banks

HDFC Bank Ltd. 78,967 1,539IndusInd Bank Ltd. 133,511 2,179

3,718Construction & Engineering

Larsen & Toubro Ltd. 23,181 461Construction Materials

Shree Cement Ltd. 10,564 2,293Consumer Finance

Bharat Financial Inclusion Ltd. (b) 90,830 787Shriram Transport Finance Co., Ltd. 109,803 1,381

2,168Machinery

Ashok Leyland Ltd. 2,087,530 2,464Media

Inox Leisure Ltd. (b) 266,040 906

Value Shares (000)

Value Shares (000)




7


December 31, 2016


Metro Pacific Investments Corp. 5,418,700 $ 726 1,616

Industrial ConglomeratesDMCI Holdings, Inc. 2,646,500 706SM Investments Corp. 58,860 776

1,482Transportation Infrastructure

International Container Terminal Services, Inc. 367,740 532

5,124Singapore (2.5%)Air Freight & Logistics

Singapore Post Ltd. 781,900 791Distributors

Jardine Cycle & Carriage Ltd. 94,300 2,685Diversified Telecommunication Services

Singapore Telecommunications Ltd. 337,500 850Health Care Providers & Services

Raffles Medical Group Ltd. 890,829 880Multi-Utilities

Keppel Infrastructure Trust (Units) (c) 758,300 249 5,455

Taiwan (12.0%)Banks

E.Sun Financial Holding Co., Ltd. 2,350,500 1,338Diversified Financial Services

Fubon Financial Holding Co., Ltd. 344,000 544Electronic Equipment, Instruments & Components

Delta Electronics, Inc. 350,532 1,735Hon Hai Precision Industry Co., Ltd. 466,855 1,219Largan Precision Co., Ltd. 18,000 2,117

5,071Food & Staples Retailing

President Chain Store Corp. 129,000 925Food Products

Uni-President Enterprises Corp. 1,088,046 1,803Internet Software & Services

PChome Online, Inc. 112,466 987Metals & Mining

Yeong Guan Energy Technology Group Co., Ltd. 95,000 304

Korea, Republic of (cont’d)Automobiles

Hyundai Motor Co. 8,039 $ 972Biotechnology

Hugel, Inc. (b) 4,567 1,214Construction & Engineering

Hyundai Development Co-Engineering & Construction 57,418 2,137

Electrical EquipmentLS Cable & System Asia Ltd. (b) 55,815 262

Household DurablesCoway Co., Ltd. 13,883 1,015

Industrial ConglomeratesCJ Corp. 9,197 1,424SK Holdings Co., Ltd. 6,752 1,283

2,707Internet Software & Services

NAVER Corp. 3,800 2,438Media

Innocean Worldwide, Inc. 16,244 768Personal Products

Amorepacific Corp. 5,813 1,547Cosmax, Inc. 5,465 541

2,088Software

Nexon Co., Ltd. 97,200 1,409Tech Hardware, Storage & Peripherals

Samsung Electronics Co., Ltd. 5,607 8,365Samsung Electronics Co., Ltd.

(Preference) 3,041 3,608 11,973

Textiles, Apparel & Luxury GoodsHwaseung Enterprise Co., Ltd. (b) 55,362 701

32,083Philippines (2.4%)Banks

BDO Unibank, Inc. 315,750 712Metropolitan Bank & Trust Co. 535,643 782

1,494Diversified Financial Services

Ayala Corp. 60,596 890

Value Shares (000)

Value Shares (000)




8


December 31, 2016


SHORT-TERM INVESTMENT (2.3%)Investment Company (2.3%)

Morgan Stanley Institutional Liquidity Funds — Government Portfolio — Institutional Class (See Note E) (Cost $5,032) 5,031,728 $ 5,032

TOTAL INVESTMENTS (101.0%) (Cost $191,549) (d) 216,831LIABILITIES IN EXCESS OF OTHER ASSETS (-1.0%) (2,067)NET ASSETS (100.0%) $214,764

Country assignments and aggregations are based generally on thirdparty vendor classifications and information, and may be differentfrom the assignments and aggregations under the policies set forthin the Fund’s prospectus and/or statement of additional informationrelating to geographic classifications.(a) Security trades on the Hong Kong exchange.(b) Non-income producing security.(c) Consists of one or more classes of securities traded

together as a unit; stocks with attached warrants.(d) At December 31, 2016, the aggregate cost for federal

income tax purposes is approximately $192,905,000. Theaggregate gross unrealized appreciation is approximately$33,789,000 and the aggregate gross unrealizeddepreciation is approximately $9,863,000, resulting in netunrealized appreciation of approximately $23,926,000.

ADR American Depositary Receipt.NVDR Non-Voting Depositary Receipt.REIT Real Estate Investment Trust.

Taiwan (cont’d)Semiconductors & Semiconductor Equipment

Advanced Semiconductor Engineering, Inc. 1,551,000 $ 1,590

Taiwan Semiconductor Manufacturing Co., Ltd. 1,334,592 7,516

9,106Tech Hardware, Storage & Peripherals

Catcher Technology Co., Ltd. 264,000 1,835Pegatron Corp. 564,000 1,347

3,182Textiles, Apparel & Luxury Goods

Eclat Textile Co., Ltd. 130,604 1,368Wireless Telecommunication Services

Taiwan Mobile Co., Ltd. 351,000 1,133 25,761

Thailand (1.6%)Banks

Kasikornbank PCL (Foreign) 182,900 907Kasikornbank PCL NVDR 61,400 304

1,211Construction & Engineering

Sino-Thai Engineering & Construction PCL (Foreign) 1,023,400 793

Health Care Providers & ServicesBangkok Dusit Medical Services

PCL (Foreign) 1,303,300 841Hotels, Restaurants & Leisure

Minor International PCL (Foreign) 373,820 373Real Estate Management & Development

Central Pattana PCL (Foreign) 115,200 182Central Pattana PCL NVDR 3,700 6

188 3,406

United States (0.9%)Household Durables

Nien Made Enterprise Co., Ltd. 177,000 1,826TOTAL COMMON STOCKS (Cost $186,517) 211,799

Value Shares (000)

Value Shares (000)




9


December 31, 2016


Portfolio Composition

Percentage ofClassification Total InvestmentsOther* 67.1%Banks 15.6Internet Software & Services 10.3Tech Hardware, Storage & Peripherals 7.0Total Investments 100.0%

* Industries and/or investment types representing less than 5% of totalinvestments.




10


December 31, 2016

Financial Statements December 31, 2016

(000)

Assets:Investments in Securities of Unaffiliated Issuers, at Value (Cost $186,517) $211,799Investment in Security of Affiliated Issuer, at Value (Cost $5,032) 5,032

Total Investments in Securities, at Value (Cost $191,549) 216,831Foreign Currency, at Value (Cost $210) 210Receivable for Investments Sold 638Dividends Receivable 22Tax Reclaim Receivable 7Receivable from Affiliate 2Other Assets 28

Total Assets 217,738

Liabilities:Dividends Declared 2,000Payable for Investments Purchased 567Payable for Advisory Fees 187Payable for Professional Fees 96Payable for Custodian Fees 80Payable for Administration Fees 7Payable for Stockholder Servicing Agent Fees 5Other Liabilities 32

Total Liabilities 2,974

Net AssetsApplicable to 13,724,460 Issued and Outstanding $0.01 Par Value Shares (200,000,000 Shares Authorized) $214,764

Net Asset Value Per Share $ 15.65

Net Assets Consist of:Common Stock $ 137Paid-in-Capital 210,096Distributions in Excess of Net Investment Income (110)Accumulated Net Realized Loss (20,640)Unrealized Appreciation (Depreciation) on:

Investments 25,282Foreign Currency Translations (1)

Net Assets $214,764

Statement of Assets and Liabilities


Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | pweakly | 22-Feb-17 21:48 | 17-2621-2.da | Sequence: 1CHKSUM Content: 35072 Layout: 23026 Graphics: No Graphics CLEAN


11


December 31, 2016

Financial Statements (cont’d) Year Ended December 31, 2016

(000)

Investment Income:Dividends from Securities of Unaffiliated Issuers (Net of $447 of Foreign Taxes Withheld) $ 5,040Dividends from Security of Affiliated Issuer (Note E) 12

Total Investment Income 5,052

Expenses:Advisory Fees (Note B) 2,181Custodian Fees (Note D) 232Professional Fees 202Administration Fees (Note C) 175Stockholder Reporting Expenses 59Stockholder Servicing Agent Fees 27Directors’ Fees and Expenses 7Other Expenses 52

Total Expenses 2,935

Waiver of Administration Fees (Note C) (97)Rebate from Morgan Stanley Affiliate (Note E) (5)Reimbursement of Custodian Fees (Note D) (151)

Net Expenses 2,682

Net Investment Income 2,370

Realized Loss:Investments Sold (7,592)Foreign Currency Transactions (50)

Net Realized Loss (7,642)

Change in Unrealized Appreciation (Depreciation):Investments 8,702Foreign Currency Translations —@

Net Change in Unrealized Appreciation (Depreciation) 8,702

Net Realized Loss and Change in Unrealized Appreciation (Depreciation) 1,060

Net Increase in Net Assets Resulting from Operations $ 3,430

@ Amount is less than $500.

Statement of Operations




12


December 31, 2016

Financial Statements (cont’d) Year Ended Year Ended December 31, 2016 December 31, 2015

(000) (000)

Increase (Decrease) in Net Assets:Operations:

Net Investment Income $ 2,370 $ 2,235Net Realized Loss (7,642) (9,263)Net Change in Unrealized Appreciation (Depreciation) 8,702 (4,012)

Net Increase (Decrease) in Net Assets Resulting from Operations 3,430 (11,040)

Distributions from and/or in Excess of:Net Investment Income (2,000) (2,000)

Capital Share Transactions:Repurchase of Shares (158,937 and 126,131 shares) (2,254) (1,811)

Net Decrease in Net Assets Resulting from Capital Share Transactions (2,254) (1,811)

Total Decrease (824) (14,851)

Net Assets:Beginning of Period 215,588 230,439

End of Period (Including Distributions in Excess of Net Investment Income of $(110) and $(852)) $214,764 $215,588

Statements of Changes in Net Assets




13


December 31, 2016

Financial HighlightsSelected Per Share Data and Ratios Year Ended December 31, 2016(1) 2015 2014 2013 2012Net Asset Value, Beginning of Period $ 15.53 $ 16.45 $ 18.76 $ 17.19 $ 14.87

Net Investment Income(2) 0.17 0.16 0.15 0.15 0.13Net Realized and Unrealized Gain (Loss) 0.08 (0.96) (1.32) 1.60 2.26

Total from Investment Operations 0.25 (0.80) (1.17) 1.75 2.39

Distributions from and/or in excess of:Net Investment Income (0.15) (0.14) (0.05) (0.22) (0.10)Net Realized Gain — — (1.16) — —

Total Distributions (0.15) (0.14) (1.21) (0.22) (0.10)

Anti-Dilutive Effect of Share Repurchase Program 0.02 0.02 0.00(3) 0.02 —

Anti-Dilutive Effect of Tender Offer — — 0.07 0.02 0.03

Net Asset Value, End of Period $ 15.65 $ 15.53 $ 16.45 $ 18.76 $ 17.19

Per Share Market Value, End of Period $ 13.50 $ 13.83 $ 14.85 $ 16.56 $ 14.98

TOTAL INVESTMENT RETURN(4):Market Value (1.37)% (5.78)% (3.23)% 12.02% 15.10%Net Asset Value 1.82% (4.49)% (5.38)% 10.59% 16.36%

RATIOS, SUPPLEMENTAL DATA:

Net Assets, End of Period (Thousands) $214,764 $215,588 $230,439 $328,730 $319,773

Ratio of Expenses to Average Net Assets(7) 1.23%(5) 1.29%(5) 1.32%(5) 1.28%(5) 1.24%(5)Ratio of Net Investment Income to Average Net Assets(7) 1.09%(5) 0.95%(5) 0.82%(5) 0.82%(5) 0.83%(5)Ratio of Rebate from Morgan Stanley Affiliates to Average Net Assets 0.00%(6) 0.00%(6) 0.01% 0.00%(6) 0.01%Portfolio Turnover Rate 41% 46% 79% 42% 54%

(7) Supplemental Information on the Ratios to Average Net Assets: Ratios Before Expenses Waived by Administrator:

Ratio of Expenses to Average Net Assets 1.35% 1.34% 1.38% 1.33% 1.30%Ratio of Net Investment Income to Average Net Assets 0.97% 0.90% 0.76% 0.77% 0.76%

(1) Refer to Note D in the Notes to Financial Statements for discussion of prior period custodian out-of pocket expenses that were reimbursedin the current period. The amount of the reimbursement was immaterial on a per share basis and did not impact the total return of theFund. The Ratio of Expenses to Average Net Assets would have been 0.07% higher and the Ratio of Net Investment Income to AverageNet Assets would have been 0.07% lower had the custodian not reimbursed the Fund.

(2) Per share amount is based on average shares outstanding.(3) Amount is less than $0.005 per share.(4) Total investment return based on net asset value per share reflects the effects of changes in net asset value on the performance of the

Fund during each period, and assumes dividends and distributions, if any, were reinvested. This percentage is not an indication of theperformance of a stockholder’s investment in the Fund based on market value due to differences between the market price of the stockand the net asset value per share of the Fund. Total returns are based upon the market value and net asset value on the last business dayof each period.

(5) The Ratios of Expenses and Net Investment Income reflect the rebate of certain Fund expenses in connection with the investments inMorgan Stanley affiliates during the period. The effect of the rebate on the ratios is disclosed in the above table as “Ratio of Rebate fromMorgan Stanley Affiliates to Average Net Assets.”

(6) Amount is less than 0.005%.




14


December 31, 2016

Notes to Financial StatementsThe Morgan Stanley Asia-Pacific Fund, Inc. (the “Fund”) wasincorporated in Maryland on February 28, 1994, and isregistered as a diversified, closed-end management investmentcompany under the Investment Company Act of 1940, asamended (the “Act”). The Fund applies investment companyaccounting and reporting guidance. The Fund’s investmentobjective is long-term capital appreciation through investmentsprimarily in equity securities of Asian-Pacific issuers and in debtsecurities issued or guaranteed by Asian Pacific governments orgovernmental entities. To the extent that the Fund invests inderivative instruments that the adviser, Morgan StanleyInvestment Management Inc. (the “Adviser”) and sub-adviser,Morgan Stanley Investment Management Company (“MSIMCompany”) (the “Sub-Adviser”), believe have economiccharacteristics similar to equity securities of Asian-Pacific issuersand in debt securities issued or guaranteed by Asian Pacificgovernments or governmental entities, such investments will becounted for purposes of meeting the Fund’s investmentobjective. To the extent the Fund makes such investments, theFund will be subject to the risks of such derivative instrumentsas described herein.

A. Significant Accounting Policies: The followingsignificant accounting policies are in conformity with U.S.generally accepted accounting principles (“GAAP”). Suchpolicies are consistently followed by the Fund in the preparationof its financial statements. GAAP may require management tomake estimates and assumptions that affect the reportedamounts and disclosures in the financial statements. Actualresults may differ from those estimates.

1. Security Valuation: (1) An equity portfolio securitylisted or traded on an exchange is valued at its latestreported sales price (or at the exchange official closing priceif such exchange reports an official closing price), and ifthere were no sales on a given day and if there is no officialexchange closing price for that day, the security is valued atthe mean between the last reported bid and asked prices if

such bid and asked prices are available on the relevantexchanges; (2) all other equity portfolio securities for whichover-the-counter (“OTC”) market quotations are readilyavailable are valued at the latest reported sales price (or atthe market official closing price if such market reports anofficial closing price), and if there was no trading in thesecurity on a given day and if there is no official closingprice from relevant markets for that day, the security isvalued at the mean between the last reported bid and askedprices if such bid and asked prices are available on therelevant markets. Listed equity securities not traded on thevaluation date with no reported bid and asked pricesavailable on the exchange are valued at the mean betweenthe current bid and asked prices obtained from one ormore reputable brokers or dealers. An unlisted equitysecurity that does not trade on the valuation date and forwhich bid and asked prices from the relevant markets areunavailable is valued at the mean between the current bidand asked prices obtained from one or more reputablebrokers or dealers. In cases where a security is traded onmore than one exchange, the security is valued on theexchange designated as the primary market; (3) certainportfolio securities may be valued by an outside pricingservice/vendor approved by the Fund’s Board of Directors(the “Directors”). The pricing service/vendor may employ apricing model that takes into account, among other things,bids, yield spreads, and/or other market data and specificsecurity characteristics. Alternatively, if a valuation is notavailable from an outside pricing service/vendor, and thesecurity trades on an exchange, the security may be valuedat its latest reported sale price (or at the exchange officialclosing price if such exchange reports an official closingprice), prior to the time when assets are valued. If there areno sales on a given day and if there is no official exchangeclosing price for that day, the security is valued at the meanbetween the last reported bid and asked prices if such bidand asked prices are available in the relevant exchanges;

Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | bjasper | 28-Feb-17 05:45 | 17-2621-2.ea | Sequence: 1CHKSUM Content: 28878 Layout: 42699 Graphics: No Graphics CLEAN


15


December 31, 2016

Notes to Financial Statements (cont’d)(4) when market quotations are not readily available,including circumstances under which the Adviser or theSub-Adviser, a whole owned subsidiary of Morgan Stanley,determine that the closing price, last sale price or the meanbetween the last reported bid and asked prices are notreflective of a security’s market value, portfolio securities arevalued at their fair value as determined in good faith underprocedures established by and under the generalsupervision of the Directors. Occasionally, developmentsaffecting the closing prices of securities and other assetsmay occur between the times at which valuations of suchsecurities are determined (that is, close of the foreignmarket on which the securities trade) and the close ofbusiness of the New York Stock Exchange (“NYSE”). Ifdevelopments occur during such periods that are expectedto materially affect the value of such securities, suchvaluations may be adjusted to reflect the estimated fairvalue of such securities as of the close of the NYSE, asdetermined in good faith by the Directors or by the Adviserusing a pricing service and/or procedures approved by theDirectors; (5) quotations of foreign portfolio securities,other assets and liabilities and forward contracts stated inforeign currency are translated into U.S. dollar equivalentsat the prevailing market rates prior to the close of theNYSE; and (6) investments in mutual funds, including theMorgan Stanley Institutional Liquidity Funds, are valued atthe net asset value (“NAV”) as of the close of each businessday.

The Directors have responsibility for determining in goodfaith the fair value of the investments, and the Directorsmay appoint others, such as the Fund’s Adviser or avaluation committee, to assist the Directors in determiningfair value and to make the actual calculations pursuant tothe fair valuation methodologies previously approved bythe Directors. Under procedures approved by the Directors,the Fund’s Adviser has formed a Valuation Committee

whose members are approved by the Directors. TheValuation Committee provides administration andoversight of the Fund’s valuation policies and procedures,which are reviewed at least annually by the Directors.These procedures allow the Fund to utilize independentpricing services, quotations from securities and financialinstrument dealers, and other market sources to determinefair value.

The Fund has procedures to determine the fair value ofsecurities and other financial instruments for which marketprices are not readily available. Under these procedures, theValuation Committee convenes on a regular and ad hocbasis to review such securities and considers a number offactors, including valuation methodologies and significantunobservable valuation inputs, when arriving at fair value.The Valuation Committee may employ a market-basedapproach which may use related or comparable assets orliabilities, recent transactions, market multiples, bookvalues, and other relevant information for the investmentto determine the fair value of the investment. An income-based valuation approach may also be used in which theanticipated future cash flows of the investment arediscounted to calculate fair value. Discounts may also beapplied due to the nature or duration of any restrictions onthe disposition of the investments. Due to the inherentuncertainty of valuations of such investments, the fairvalues may differ significantly from the values that wouldhave been used had an active market existed. The ValuationCommittee employs various methods for calibrating thesevaluation approaches including a regular review ofvaluation methodologies, key inputs and assumptions,transactional back-testing or disposition analysis, andreviews of any related market activity.

2. Fair Value Measurement: Financial AccountingStandards Board (“FASB”) Accounting StandardsCodificationTM (“ASC”) 820, “Fair Value Measurement”



16


December 31, 2016

Notes to Financial Statements (cont’d)(“ASC 820”), defines fair value as the value that the Fundwould receive to sell an investment or pay to transfer aliability in a timely transaction with an independent buyerin the principal market, or in the absence of a principalmarket, the most advantageous market for the investmentor liability. ASC 820 establishes a three-tier hierarchy todistinguish between (1) inputs that reflect the assumptionsmarket participants would use in valuing an asset orliability developed based on market data obtained fromsources independent of the reporting entity (observableinputs) and (2) inputs that reflect the reporting entity’sown assumptions about the assumptions marketparticipants would use in valuing an asset or liabilitydeveloped based on the best information available in thecircumstances (unobservable inputs) and to establishclassification of fair value measurements for disclosurepurposes. Various inputs are used in determining the valueof the Fund’s investments. The inputs are summarized inthe three broad levels listed below.

• Level 1 – unadjusted quoted prices in active markets foridentical investments

• Level 2 – other significant observable inputs (includingquoted prices for similar investments, interest rates,prepayment speeds, credit risk, etc.)

• Level 3 – significant unobservable inputs including theFund’s own assumptions in determining the fair value ofinvestments. Factors considered in making thisdetermination may include, but are not limited to,information obtained by contacting the issuer, analysts,or the appropriate stock exchange (for exchange-tradedsecurities), analysis of the issuer’s financial statements orother available documents and, if necessary, availableinformation concerning other securities in similarcircumstances

The inputs or methodology used for valuing securities arenot necessarily an indication of the risk associated withinvesting in those securities and the determination of thesignificance of a particular input to the fair valuemeasurement in its entirety requires judgment andconsiders factors specific to each security.

The following is a summary of the inputs used to value theFund’s investments as of December 31, 2016.

Level 2 Level 1 Other Level 3 Unadjusted significant Significant quoted observable unobservable prices inputs inputs TotalInvestment Type (000) (000) (000) (000)Assets:

Common StocksAerospace &

Defense $ 2,195 $ — $— $ 2,195Air Freight &

Logistics 791 — — 791Auto

Components 2,204 — — 2,204Automobiles 4,152 — — 4,152Banks 31,458 2,446 — 33,904Biotechnology 4,178 — — 4,178Capital

Markets 4,084 — — 4,084Construction &

Engineering 3,103 793 — 3,896Construction

Materials 6,493 — — 6,493Consumer

Finance 2,168 — — 2,168Distributors 2,685 — — 2,685Diversified

Consumer Services 2,051 — — 2,051

Diversified Financial Services 2,160 — — 2,160

Diversified Telecommunication Services 6,220 — — 6,220

Electric Utilities 529 — — 529



17


December 31, 2016

Notes to Financial Statements (cont’d) Level 2 Level 1 Other Level 3 Unadjusted significant Significant quoted observable unobservable prices inputs inputs TotalInvestment Type (000) (000) (000) (000)Assets: (cont’d)

Common Stocks (cont’d)Electrical

Equipment $ 262 $ — $— $ 262Electronic

Equipment, Instruments & Components 5,071 — — 5,071

Food & Staples Retailing 4,116 — — 4,116

Food Products 2,676 — — 2,676Health Care

Equipment & Supplies 4,266 — — 4,266

Health Care Providers & Services 4,728 841 — 5,569

Hotels, Restaurants & Leisure 1,836 373 — 2,209

Household Durables 2,841 — — 2,841

Independent Power and Renewable Electricity Producers 446 — — 446

Industrial Conglomerates 8,652 — — 8,652

Insurance 8,807 — — 8,807Internet &

Direct Marketing Retail 1,773 — — 1,773

Internet Software & Services 22,217 — — 22,217

Machinery 2,963 — — 2,963Media 3,806 — — 3,806Metals &

Mining 304 — — 304Multi-Utilities 249 — — 249

Level 2 Level 1 Other Level 3 Unadjusted significant Significant quoted observable unobservable prices inputs inputs TotalInvestment Type (000) (000) (000) (000)Assets: (cont’d)

Common Stocks (cont’d)Multi-line Retail $ 476 $ — $— $ 476Oil, Gas &

Consumable Fuels 5,200 — — 5,200

Personal Products 3,363 — — 3,363

Pharmaceuticals 1,123 — — 1,123Real Estate

Management & Development 7,147 182 — 7,329

Semiconductors & Semiconductor Equipment 9,106 — — 9,106

Software 1,409 — — 1,409Tech Hardware,

Storage & Peripherals 15,155 — — 15,155

Textiles, Apparel & Luxury Goods 4,622 — — 4,622

Transportation Infrastructure 1,940 — — 1,940

Wireless Telecommunication Services 8,139 — — 8,139

Total Common Stocks 207,164 4,635 — 211,799

Short-Term InvestmentInvestment

Company 5,032 — — 5,032Total Assets $212,196 $4,635 $— $216,831

Transfers between investment levels may occur as themarkets fluctuate and/or the availability of data used in aninvestment’s valuation changes. The Fund recognizestransfers between the levels as of the end of the period. Asof December 31, 2016, securities with a total value ofapproximately $148,745,000 transferred from Level 2 to



18


December 31, 2016

Notes to Financial Statements (cont’d)Level 1. Securities that were valued using other significantobservable inputs at December 31, 2015 were valued usingunadjusted quoted prices at December 31, 2016. AtDecember 31, 2015, the fair value of certain securities wereadjusted due to developments which occurred between thetime of the close of the foreign markets on which theytrade and the close of business on the NYSE which resultedin their Level 2 classification.

Following is a reconciliation of investments in whichsignificant unobservable inputs (Level 3) were used indetermining fair value.

Common Stock (000)Beginning Balance $ 967

Purchases —Sales (606)Amortization of discount —Transfers in —Transfers out —Corporate actions —Change in unrealized appreciation (depreciation) 108Realized gains (losses) (469)

Ending Balance $ —

Net change in unrealized appreciation (depreciation) from investments still held as of December 31, 2016 $ —

3. Foreign Currency Translation and Foreign Investments:The books and records of the Fund are maintained inU.S. dollars. Foreign currency amounts are translated intoU.S. dollars as follows:

— investments, other assets and liabilities at theprevailing rate of exchange on the valuation date;

— investment transactions and investment income at theprevailing rates of exchange on the dates of suchtransactions.

Although the net assets of the Fund are presented at theforeign exchange rates and market values at the close of theperiod, the Fund does not isolate that portion of the resultsof operations arising as a result of changes in the foreignexchange rates from the fluctuations arising from changesin the market prices of securities held at period end.Similarly, the Fund does not isolate the effect of changes inforeign exchange rates from the fluctuations arising fromchanges in the market prices of securities sold during theperiod. Accordingly, realized and unrealized foreigncurrency gains (losses) on investments in securities areincluded in the reported net realized and unrealized gains(losses) on investment transactions and balances.

Net realized gains (losses) on foreign currency transactionsrepresent net foreign exchange gains (losses) from sales andmaturities of foreign currency forward exchange contracts,disposition of foreign currencies, currency gains (losses)realized between the trade and settlement dates onsecurities transactions, and the difference between theamount of investment income and foreign withholdingtaxes recorded on the Fund’s books and the U.S. dollarequivalent amounts actually received or paid. Netunrealized currency gains (losses) from valuing foreigncurrency denominated assets and liabilities at period endexchange rates are reflected as a component of unrealizedappreciation (depreciation) in investments and foreigncurrency translations in the Statement of Assets andLiabilities. The change in unrealized currency gains (losses)on foreign currency translations for the period is reflectedin the Statement of Operations.

A significant portion of the Fund’s net assets consist ofsecurities of issuers located in Asia which are denominatedin foreign currencies. Changes in currency exchange rateswill affect the value of and investment income from suchsecurities. In general, Asian securities are subject to greaterprice volatility, limited capitalization and liquidity, and



19


December 31, 2016

Notes to Financial Statements (cont’d)higher rates of inflation than securities of companies basedin the United States. In addition, Asian securities may besubject to substantial governmental involvement in theeconomy and greater social, economic and politicaluncertainty. Such securities may be concentrated in alimited number of countries and regions and may varythroughout the year.

Governmental approval for foreign investments may berequired in advance of making an investment under certaincircumstances in some countries, and the extent of foreigninvestments in domestic companies may be subject tolimitation in other countries. Foreign ownershiplimitations also may be imposed by the charters ofindividual companies to prevent, among other concerns,violations of foreign investment limitations. As a result, anadditional class of shares (identified as “Foreign” in thePortfolio of Investments) may be created and offered forinvestment. The “local” and “foreign shares” market valuesmay differ. In the absence of trading of the foreign shares insuch markets, the Fund values the foreign shares at theclosing exchange price of the local shares.

4. Indemnifications: The Fund enters into contracts thatcontain a variety of indemnifications. The Fund’smaximum exposure under these arrangements is unknown.However, the Fund has not had prior claims or lossespursuant to these contracts and expects the risk of loss tobe remote.

5. Dividends and Distributions to Stockholders:Dividend income and distributions to stockholders arerecorded on the ex-dividend date. Dividends from netinvestment income, if any, are declared and paid annually.Net realized capital gains, if any, are distributed at leastannually.

6. Other: Security transactions are accounted for on thedate the securities are purchased or sold. Investments in

new Indian securities are made by making applications inthe public offerings. The issue price, or a portion thereof, ispaid at the time of application and reflected as shareapplication money on the Statement of Assets andLiabilities, if any. Upon allotment of the securities, thisamount plus any remaining amount of issue price isrecorded as cost of investments. Realized gains (losses) onthe sale of investment securities are determined on thespecific identified cost basis. Interest income is recognizedon the accrual basis. Dividend income and distributions arerecorded on the ex-dividend date (except certain dividendswhich may be recorded as soon as the Fund is informed ofsuch dividends) net of applicable withholding taxes.

The Fund owns shares of real estate investment trusts(“REITs”) which report information on the source of theirdistributions annually in the following calendar year. Aportion of distributions received from REITs during theyear is estimated to be a return of capital and is recorded asa reduction of their cost.

B. Advisory/Sub-Advisory Fees: The Adviser, a wholly-owned subsidiary of Morgan Stanley, provides the Fund withadvisory services under the terms of an Investment AdvisoryAgreement, calculated weekly and payable monthly, at an annualrate of 1.00% of the Fund’s average weekly net assets.

The Adviser has entered into a Sub-Advisory Agreement withthe Sub-Adviser, a wholly-owned subsidiary of Morgan Stanley.The Sub-Adviser provides the Fund with advisory servicessubject to the overall supervision of the Adviser and the Fund’sOfficers and Directors. The Adviser pays the Sub-Adviser on amonthly basis a portion of the net advisory fees the Adviserreceives from the Fund.

C. Administration Fees: The Adviser also serves asAdministrator to the Fund and provides administrative servicespursuant to an Administration Agreement for an annual fee,accrued daily and paid monthly, of 0.08% of the Fund’s average



20


December 31, 2016

Notes to Financial Statements (cont’d)weekly net assets. The Adviser has agreed to limit theadministration fee through a waiver so that it will be no greaterthan the previous administration fee of 0.02435% of the Fund’saverage weekly net assets plus $24,000 per annum. This waivermay be terminated at any time. For the year endedDecember 31, 2016, approximately $97,000 of administrationfees were waived pursuant to this arrangement.

Under a Sub-Administration Agreement between theAdministrator and State Street Bank and Trust Company (“StateStreet”), State Street provides certain administrative services tothe Fund. For such services, the Administrator pays State Streeta portion of the fee the Administrator receives from the Fund.

D. Custodian Fees: State Street (the “Custodian”) serves asCustodian for the Fund in accordance with a CustodianAgreement. The Custodian holds cash, securities, and otherassets of the Fund as required by the Act. Custody fees arepayable monthly based on assets held in custody, investmentpurchases and sales activity and account maintenance fees, plusreimbursement for certain out-of-pocket expenses.

In December 2015, the Fund’s Custodian announced that it hadidentified inconsistencies in the way in which clients wereinvoiced for out-of-pocket expenses from 1998 untilNovember 2015. The dollar amount difference between whatwas charged and what should have been charged, plus interest,was paid back to the Fund in September 2016 as areimbursement. The Custodian reimbursed the Fund directly,which was recognized as a change in accounting estimate andwas reflected as “Reimbursement of Custodian Fees” in theStatement of Operations.

E. Security Transactions and Transactions with Affiliates:For the year ended December 31, 2016, purchases and sales ofinvestment securities for the Fund, other than long-term U.S.Government securities and short-term investments, wereapproximately $88,868,000 and $89,642,000, respectively.

There were no purchases and sales of long-term U.S.Government securities for the year ended December 31, 2016.

The Fund invests in the Institutional Class of the MorganStanley Institutional Liquidity Funds (the “Liquidity Funds”),an open-end management investment company managed by theAdviser. Advisory fees paid by the Fund are reduced by anamount equal to its pro-rata share of the advisory andadministration fees paid by the Fund due to its investments inthe Liquidity Funds. For the year ended December 31, 2016,advisory fees paid were reduced by approximately $5,000relating to the Fund’s investment in the Liquidity Funds.

A summary of the Fund’s transactions in shares of the LiquidityFunds during the year ended December 31, 2016 is as follows:

Value ValueDecember 31, Purchases Dividend December 31, 2015 at Cost Sales Income 2016 (000) (000) (000) (000) (000)

$5,754 $36,008 $36,730 $12 $5,032

During the year ended December 31, 2016, the Fund incurredapproximately $52,000 in brokerage commissions with MorganStanley & Co., LLC, an affiliate of the Adviser/Administrator,Sub-Adviser and Distributor, for portfolio transactions executedon behalf of the Fund.

The Fund is permitted to purchase and sell securities (“cross-trade”) from and to other Morgan Stanley Funds as well as otherfunds and client accounts for which the Adviser or an affiliate ofthe Adviser serves as investment adviser, pursuant to proceduresapproved by the Directors in compliance with Rule 17a-7 underthe Act (the “Rule”). Each cross-trade is executed at the currentmarket price in compliance with provisions of the Rule. For theyear ended December 31, 2016, the Fund did not engage in anycross-trade transactions.

The Fund has an unfunded Deferred Compensation Plan (the“Compensation Plan”), which allows each independent Directorto defer payment of all, or a portion, of the fees he or she



21


December 31, 2016

Notes to Financial Statements (cont’d)receives for serving on the Board of Directors. Each eligibleDirector generally may elect to have the deferred amountscredited with a return equal to the total return on one or moreof the Morgan Stanley funds that are offered as investmentoptions under the Compensation Plan. Appreciation/depreciationand distributions received from these investments are recordedwith an offsetting increase/decrease in the deferredcompensation obligation and do not affect the NAV of theFund.

F. Federal Income Taxes: It is the Fund’s intention tocontinue to qualify as a regulated investment company anddistribute all of its taxable income. Accordingly, no provision forfederal income taxes is required in the financial statements.

The Fund may be subject to taxes imposed by countries inwhich it invests. Such taxes are generally based on incomeand/or capital gains earned or repatriated. Taxes are accruedbased on net investment income, net realized gains and netunrealized appreciation as such income and/or gains are earned.Taxes may also be based on transactions in foreign currency andare accrued based on the value of investments denominated insuch currency.

FASB ASC 740-10, “Income Taxes — Overall”, sets forth aminimum threshold for financial statement recognition of thebenefit of a tax position taken or expected to be taken in a taxreturn. Management has concluded that there are no significantuncertain tax positions that would require recognition in thefinancial statements. If applicable, the Fund recognizes interestaccrued related to unrecognized tax benefits in “InterestExpense” and penalties in “Other Expenses” in the Statement ofOperations. The Fund files tax returns with the U.S. InternalRevenue Service, New York and various states. Each of the taxyears in the four-year period ended December 31, 2016, remainssubject to examination by taxing authorities.

The tax character of distributions paid may differ from thecharacter of distributions shown in the Statements of Changes in

Net Assets due to short-term capital gains being treated asordinary income for tax purposes. The tax character ofdistributions paid during fiscal years 2016 and 2015 was asfollows:

2016 Distributions 2015 Distributions Paid From: Paid From:

Long-Term Long-Term Ordinary Capital Ordinary Capital Income Gain Income Gain (000) (000) (000) (000)

$2,000 $— $2,000 $—

The amount and character of income and gains to be distributedare determined in accordance with income tax regulations whichmay differ from GAAP. These book/tax differences are eitherconsidered temporary or permanent in nature.

Temporary differences are attributable to differing book and taxtreatments for the timing of the recognition of gains (losses) oncertain investment transactions and the timing of thedeductibility of certain expenses.

Permanent differences, primarily due to differing treatments ofgains (losses) related to foreign currency transactions and basisadjustments on certain equity securities designated as issued bypassive foreign investment companies, resulted in the followingreclassifications among the components of net assets atDecember 31, 2016:

Distributions in Excess of Accumulated Net Investment Net Realized Paid-in- Income Loss Capital (000) (000) (000)

$372 $(372) $—

At December 31, 2016, the Fund had no distributable earningson a tax basis.



22


December 31, 2016

Notes to Financial Statements (cont’d)At December 31, 2016, the Fund had available for federalincome tax purposes unused short-term capital losses andlong-term capital losses of approximately $10,741,000 and$8,555,000 respectively, that do not have an expiration date.

To the extent that capital loss carryforwards are used to offsetany future capital gains realized, no capital gains tax liability willbe incurred by the Fund for gains realized and not distributed.To the extent that capital gains are offset, such gains will not bedistributed to the stockholders.

Qualified late year losses are capital losses and specified ordinarylosses, including currency losses, incurred after October 31 butwithin the taxable year that, if elected, are deemed to arise onthe first day of the Fund’s next taxable year. For the year endedDecember 31, 2016, the Fund deferred to January 1, 2017 forU.S. federal income tax purposes the following losses:

Qualified Late Year Post-October Ordinary Capital Losses Losses (000) (000)

$2 $—

G. Other: As permitted by the Fund’s offering prospectus,on January 23, 1998, the Fund commenced a share repurchaseprogram for purposes of enhancing stockholder value andreducing the discount at which the Fund’s shares trade fromtheir NAV. During the year ended December 31, 2016, theFund repurchased 158,937 of its shares at an average discount of13.24% from NAV. Since the inception of the program, theFund has repurchased 22,454,514 of its shares at an averagediscount of 17.01% from NAV. The Directors regularly monitorthe Fund’s share repurchase program as part of their review andconsideration of the Fund’s premium/discount history. TheFund expects to continue to repurchase its outstanding shares atsuch time and in such amounts as it believes will further theaccomplishment of the foregoing objectives, subject to review bythe Directors. You can access information about the monthly

share repurchase results through Morgan Stanley InvestmentManagement’s website: www.morganstanley.com/im.

At December 31, 2016, the Fund had record owners of 10% orgreater. Investment activities of these shareholders could have amaterial impact on the Fund. The aggregate percentage of suchowners was 40.4%.

H. Results of Annual Meeting of Stockholders(unaudited): On June 21, 2016, an annual meeting of theFund’s stockholders was held for the purpose of voting on thefollowing matter, the results of which were as follows:

Election of Directors by all stockholders:

For Against

Frank L. Bowman 9,614,137 2,418,172Jakki L. Haussler 9,604,801 2,427,508Manuel H. Johnson 9,619,579 2,412,730

I. Accounting Pronouncements: In December 2016, FASBissued Accounting Standards update 2016-19 — TechnicalCorrections and Improvements (“ASU 2016-19”), which iseffective for interim periods for all entities beginning afterDecember 15, 2016. ASU 2016-19 includes an amendment toTopic 820, Fair Value Measurement, which clarifies thedifference between a valuation approach and a valuationtechnique when applying the guidance in that Topic. Thatamendment also requires an entity to disclose when there hasbeen a change in either or both a valuation approach and/or avaluation technique. The transition guidance for theamendment must be applied prospectively because it couldpotentially involve the use of hindsight that includes fair valuemeasurements. Although still evaluating the potential impacts ofASU 2016-19 to the Fund, management expects that the impactof the Fund’s adoption will be limited to additional financialstatement disclosures.

In October 2016, the Securities and Exchange Commission(“SEC”) issued a new rule, Investment Company Reporting



23


December 31, 2016

Notes to Financial Statements (cont’d)Modernization, which, among other provisions, amendsRegulation S-X to require standardized, enhanced disclosures,particularly related to derivatives, in investment companyfinancial statements. Compliance with the guidance is effectivefor financial statements filed with the SEC on or after August 1,2017; adoption will have no effect on the Fund’s net assets orresults of operations. Although still evaluating the potentialimpacts of the Investment Company Reporting Modernizationto the Fund, management expects that the impact of the fund’sadoption will be limited to additional financial statementdisclosures.

Federal Tax Notice (unaudited)

For federal income tax purposes, the following information isfurnished with respect to the distributions paid by the Fundduring its taxable year ended December 31, 2016. For corporateshareholders, 2.7% of the dividends qualified for the dividendsreceived deduction.

For federal income tax purposes, the following information isfurnished with respect to the Fund’s earnings for its taxable yearended December 31, 2016. When distributed, certain earningsmay be subject to a maximum tax rate of 15% as provided forby the Jobs and Growth Tax Relief Reconciliation Act of 2003.The Fund designated up to a maximum of $2,471,000 astaxable at this lower rate.

The Fund intends to pass through foreign tax credits ofapproximately $471,000, and has derived net income fromsources within foreign countries amounting to approximately$5,405,000.

In January, the Fund provides tax information to stockholdersfor the preceding calendar year.



24


December 31, 2016

Notes to Financial Statements (cont’d)For More Information About Portfolio Holdings (unaudited)

The Fund provides a complete schedule of portfolio holdings inits semi-annual and annual reports within 60 days of the end ofthe Fund’s second and fourth fiscal quarters. The semi-annualreports and the annual reports are filed electronically with theSecurities and Exchange Commission (SEC) on Form N-CSRSand Form N-CSR, respectively. Morgan Stanley also delivers thesemi-annual and annual reports to Fund stockholders and makesthese reports available on its public website,www.morganstanley.com/im. Each Morgan Stanley fund alsofiles a complete schedule of portfolio holdings with the SEC forthe Fund’s first and third fiscal quarters on Form N-Q. MorganStanley does not deliver the reports for the first and third fiscalquarters to stockholders, nor are the reports posted to theMorgan Stanley public website. You may, however, obtain theForm N-Q filings (as well as the Form N-CSR and N-CSRSfilings) by accessing the SEC’s website, www.sec.gov. You mayalso review and copy them at the SEC’s Public ReferenceRoom in Washington, DC. Information on the operation of theSEC’s Public Reference Room may be obtained by calling theSEC toll free at 1(800) SEC-0330. You can also request copiesof these materials, upon payment of a duplicating fee, byelectronic request at the SEC’s e-mail address([email protected]) or by writing the public reference room ofthe SEC, 100 F Street, NE, Washington, DC 20549-0102.

In addition to filing a complete schedule of portfolio holdingswith the SEC each fiscal quarter, the Fund makes portfolioholdings information available by providing the information onits public website, www.morganstanley.com/im. The Fundprovides a complete schedule of portfolio holdings on the publicwebsite on a monthly basis at least 15 calendar days aftermonth-end and under other conditions as described in theFund’s policy on portfolio holdings disclosure. You may obtaincopies of the Fund’s monthly website postings by calling toll free1(800) 231-2608.

Proxy Voting Policy and Procedures and Proxy VotingRecord (unaudited)

A copy of (1) the Fund’s policies and procedures with respect tothe voting of proxies relating to the Fund’s portfolio securities;and (2) how the Fund voted proxies relating to portfoliosecurities during the most recent twelve-month period endedJune 30, is available without charge, upon request, by calling tollfree 1(800) 231-2608 or by visiting our website atwww.morganstanley.com/im. This information is also availableon the SEC’s web site at www.sec.gov.



25


December 31, 2016

Report of Independent Registered Public Accounting FirmTo the Stockholders and Board of Directors ofMorgan Stanley Asia-Pacific Fund, Inc.

We have audited the accompanying statement of assets and liabilities of Morgan Stanley Asia-Pacific Fund, Inc. (the “Fund”),including the portfolio of investments, as of December 31, 2016, and the related statement of operations for the year then ended, thestatements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of thefive years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’smanagement. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

We conducted our audits 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 andfinancial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control overfinancial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theFund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accountingprinciples used and significant estimates made by management, and evaluating the overall financial statement presentation. Ourprocedures included confirmation of securities owned as of December 31, 2016, by correspondence with the custodian and others orby other appropriate auditing procedures where replies from others were not received. We believe that our audits provide a reasonablebasis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financialposition of Morgan Stanley Asia-Pacific Fund, Inc. at December 31, 2016, the results of its operations for the year then ended, thechanges in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in theperiod then ended, in conformity with U.S. generally accepted accounting principles.

Boston, MassachusettsFebruary 28, 2017

Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | cmashak | 24-Feb-17 02:57 | 17-2621-2.fa | Sequence: 1CHKSUM Content: 51692 Layout: 39862 Graphics: 63324 CLEAN

JOB: 17-2621-2 CYCLE#;BL#: 5; 0 TRIM: 7.5" x 8.75" AS: Merrill New York: 212-620-5600 COMPOSITECOLORS: Black, ~note-color 2 GRAPHICS: Ernst_Young_sig.eps V1.5

26


December 31, 2016

Portfolio Management (unaudited)The Fund is managed within the Emerging Markets Equity team. The team consists of portfolio managers and analysts. Currentmembers of the teams jointly and primarily responsible for the day-to-day management of the Fund’s portfolio are May Yu, a ManagingDirector of the Adviser and Munib Madni, a Managing Director of MSIM Company.

Ms. Yu has been associated with the Adviser in an investment management capacity since June 2013. From August 2012 to June 2013,she was associated with MSIM Company in an investment management capacity. From February 2011 to August 2012, Ms. Yu waslead portfolio manager at China International Capital Corporation. She began managing the Fund in August 2012. Mr. Madni hasbeen associated with MSIM Company in an investment management capacity since February 2005 and began managing the Fund inMay 2012.

Merrill Corp - MS CE Asia Pacific Annual Report [Funds] 12-31-2016 ED [AUX] | cmashak | 24-Feb-17 02:57 | 17-2621-2.fa | Sequence: 2CHKSUM Content: 42740 Layout: 14594 Graphics: No Graphics CLEAN


27


December 31, 2016

Investment Policy (unaudited)DerivativesThe Fund may, but it is not required to, use derivative instruments for a variety of purposes, including hedging, risk management,portfolio management or to earn income. Derivatives are financial instruments whose value is based, in part, on the value of anunderlying asset, interest rate, index or financial instrument. Prevailing interest rates and volatility levels, among other things, alsoaffect the value of derivative instruments. A derivative instrument often has risks similar to its underlying asset and may haveadditional risks, including imperfect correlation between the value of the derivative and the underlying asset, risks of default by thecounterparty to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments,indices or interest rates to which the derivative instrument relates, risks that the transactions may not be liquid and risks arising frommargin requirements. The use of derivatives involves risks that are different from, and possibly greater than, the risks associated withother portfolio investments. Derivatives may involve the use of highly specialized instruments that require investment techniques andrisk analyses different from those associated with other portfolio investments. In addition, proposed regulatory changes by theSecurities and Exchange Commission (“SEC”) relating to a mutual fund’s use of derivatives could potentially limit or impact theFund’s ability to invest in derivatives and adversely affect the value or performance of the Fund or its derivative investments.

Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.Leverage associated with derivative transactions may cause the Fund to liquidate portfolio positions when it may not be advantageousto do so to satisfy its obligations or to meet earmarking or segregation requirements, pursuant to applicable SEC rules and regulations,or may cause the Fund to be more volatile than if the Fund had not been leveraged. Although the Adviser seeks to use derivatives tofurther the Fund’s investment objective, there is no assurance that the use of derivatives will achieve this result.

Following is a description of the derivative instruments and techniques that the Fund may use and their associated risks:

Foreign Currency Forward Exchange Contracts. In connection with its investments in foreign securities, the Fund also may enter intocontracts with banks, brokers or dealers to purchase or sell securities or foreign currencies at a future date. A foreign currency forwardexchange contract (“currency contract”) is a negotiated agreement between the contracting parties to exchange a specified amount ofcurrency at a specified future time at a specified rate. The rate can be higher or lower than the spot rate between the currencies that arethe subject of the contract. The Fund may also invest in non-deliverable foreign currency forward exchange contracts (“NDFs”).NDFs are similar to other foreign currency forward exchange contracts, but do not require or permit physical delivery of currencyupon settlement. Instead, settlement is made in cash based on the difference between the contracted exchange rate and the spot foreignexchange rate at settlement. Currency contracts may be used to protect against uncertainty in the level of future foreign currencyexchange rates or to gain or modify exposure to a particular currency. In addition, the Fund may use cross currency hedging or proxyhedging with respect to currencies in which the Fund has or expects to have portfolio or currency exposure. Cross currency hedgesinvolve the sale of one currency against the positive exposure to a different currency and may be used for hedging purposes or toestablish an active exposure to the exchange rate between any two currencies. To the extent hedged by the use of currency contracts,the precise matching of the currency contract amounts and the value of the securities involved will not generally be possible becausethe future value of such securities in foreign currencies will change as a consequence of market movements in the value of those



28


December 31, 2016

Investment Policy (unaudited) (cont’d)securities between the date on which the contract is entered into and the date it matures. Furthermore, such transactions may reduceor preclude the opportunity for gain if the value of the currency should move in the direction opposite to the position taken. There isadditional risk that such transactions may reduce or preclude the opportunity for gain if the value of the currency should move in thedirection opposite to the position taken and that currency contracts create exposure to currencies in which the Fund’s securities arenot denominated. The use of currency contracts involves the risk of loss from the insolvency or bankruptcy of the counterparty to thecontract or the failure of the counterparty to make payments or otherwise comply with the terms of the contract.

Futures. A futures contract is a standardized, exchange-traded agreement to buy or sell a specific quantity of an underlying asset,reference rate or index at a specific price at a specific future time. The value of a futures contract tends to increase and decrease intandem with the value of the underlying instrument. Depending on the terms of the particular contract, futures contracts are settledthrough either physical delivery of the underlying instrument on the settlement date or by payment of a cash settlement amount onthe settlement date. A decision as to whether, when and how to use futures contracts involves the exercise of skill and judgment andeven a well-conceived futures transaction may be unsuccessful because of market behavior or unexpected events. In addition to thederivatives risks discussed above, the prices of futures contracts can be highly volatile, using futures contracts can lower total return,and the potential loss from futures contracts can exceed the Fund’s initial investment in such contracts. No assurance can be given thata liquid market will exist for any particular futures contract at any particular time. There is also the risk of loss by the Fund of margindeposits in the event of bankruptcy of a broker with which the Fund has open positions in the futures contract.

Structured Investments. The Fund also may invest a portion of its assets in structured investments. A structured investment is aderivative security designed to offer a return linked to a particular underlying security, currency, commodity or market. Structuredinvestments may come in various forms including notes (such as exchange-traded notes), warrants and options to purchase securities.The Fund will typically use structured investments to gain exposure to a permitted underlying security, currency, commodity ormarket when direct access to a market is limited or inefficient from a tax or cost standpoint. There can be no assurance that structuredinvestments will trade at the same price or have the same value as the underlying security, currency, commodity or market.Investments in structured investments involve risks including issuer risk, counterparty risk and market risk. Holders of structuredinvestments bear risks of the underlying investment and are subject to issuer or counterparty risk because the Fund is relying on thecreditworthiness of such issuer or counterparty and has no rights with respect to the underlying investment. Certain structuredinvestments may be thinly traded or have a limited trading market and may have the effect of increasing the Fund’s illiquidity to theextent that the Fund, at a particular point in time, may be unable to find qualified buyers for these securities.

Special Risks Related to Cyber SecurityThe Fund and its service providers are susceptible to cyber security risks that include, among other things, theft, unauthorizedmonitoring, release, misuse, loss, destruction or corruption of confidential and highly restricted data; denial of service attacks;unauthorized access to relevant systems; compromises to networks or devices that the Fund and its service providers use to service theFund’s operations; or operational disruption or failures in the physical infrastructure or operating systems that support the Fund andits service providers. Cyber attacks against or security breakdowns of the Fund or its service providers may adversely impact the Fundand its stockholders, potentially resulting in, among other things, financial losses; the inability of Fund stockholders to transact



29


December 31, 2016

Investment Policy (unaudited) (cont’d)business and the Fund to process transactions; inability to calculate the Fund’s NAV; violations of applicable privacy and other laws;regulatory fines, penalties, reputational damage, reimbursement or other compensation costs; and/or additional compliance costs. TheFund may incur additional costs for cyber security risk management and remediation purposes. In addition, cyber security risks mayalso impact issuers of securities in which the Fund invests, which may cause the Fund’s investment in such issuers to lose value. Therecan be no assurance that the Fund or its service providers will not suffer losses relating to cyber attacks or other information securitybreaches in the future.

Foreign and Emerging Market SecuritiesInvesting in the securities of foreign issuers, particularly those located in emerging market or developing countries, entails the risk thatnews and events unique to a country or region will affect those markets and their issuers. The value of the Fund’s shares may varywidely in response to political and economic factors affecting companies in foreign countries. These same events will not necessarilyhave an effect on the U.S. economy or similar issuers located in the United States. In addition, investments in certain foreign marketsthat have historically been considered stable may become more volatile and subject to increased risk due to ongoing developments andchanging conditions in such markets. Moreover, the growing interconnectivity of global economies and financial markets hasincreased the probability that adverse developments and conditions in one country or region will affect the stability of economies andfinancial markets in other countries or regions.

Investments in foreign markets entail special risks such as currency, political, economic and market risks. There also may be greatermarket volatility, less reliable financial information, higher transaction and custody costs, decreased market liquidity and lessgovernment and exchange regulation associated with investments in foreign markets. Certain foreign markets may rely heavily onparticular industries or foreign capital and are more vulnerable to diplomatic developments, the imposition of economic sanctionsagainst a particular country or countries, organizations, entities and/or individuals, changes in international trading patterns, tradebarriers, and other protectionist or retaliatory measures. Economic sanctions could, among other things, effectively restrict oreliminate the Fund’s ability to purchase or sell securities or groups of securities for a substantial period of time, and may make theFund’s investments in such securities harder to value. Investments in foreign markets may also be adversely affected by governmentalactions such as the imposition of capital controls, nationalization of companies or industries, expropriation of assets or the impositionof punitive taxes. The governments of certain countries may prohibit or impose substantial restrictions on foreign investing in theircapital markets or in certain sectors or industries. In addition, a foreign government may limit or cause delay in the convertibility orrepatriation of its currency which would adversely affect the U.S. dollar value and/or liquidity of investments denominated in thatcurrency. Certain foreign investments may become less liquid in response to market developments or adverse investor perceptions, orbecome illiquid after purchase by the Fund, particularly during periods of market turmoil. When the Fund holds illiquid investments,its portfolio may be harder to value. The risks of investing in emerging market countries are greater than risks associated withinvestments in foreign developed countries. In addition, the Fund’s investments in foreign issuers may be denominated in foreigncurrencies and therefore, to the extent unhedged, the value of the investment will fluctuate with the U.S. dollar exchange rates.



30


December 31, 2016

Investment Policy (unaudited) (cont’d)Exchange-Listed Equities via Stock Connect ProgramThe Shanghai-Hong Kong Stock Connect program and the recently launched Shenzhen-Hong Kong Stock Connect programs(“Stock Connect”) allows non-Chinese investors (such as the Fund) to purchase certain listed equities via brokers in Hong Kong.Although Stock Connect allows non-Chinese investors to trade Chinese equities without a license, purchases of securities throughStock Connect are subject to daily market-wide quota limitations, which may prevent the Fund from purchasing Stock Connectsecurities when it is otherwise advantageous to do so. An investor cannot purchase and sell the same security on the same trading day,which may restrict the Fund’s ability to invest in China A-shares through Stock Connect and to enter into or exit trades where it isadvantageous to do so on the same trading day. Because Stock Connect trades are routed through Hong Kong brokers and the HongKong Stock Exchange, Stock Connect is affected by trading holidays in either China or Hong Kong, and there are trading days inChina when Stock Connect investors will not be able to trade. As a result, prices of securities purchased through Stock Connect mayfluctuate at times when the Fund is unable to add to or exit its position. Only certain China A-shares are eligible to be accessedthrough Stock Connect. Such securities may lose their eligibility at any time, in which case they could be sold but could no longer bepurchased through Stock Connect. Because Stock Connect is relatively new, its effects on the market for trading China A-shares areuncertain. In addition, the trading, settlement and IT systems required to operate Stock Connect are relatively new and continuing toevolve. In the event that the relevant systems do not function properly, trading through Stock Connect could be disrupted.

Stock Connect is subject to regulation by both Hong Kong and China. There can be no assurance that further regulations will notaffect the availability of securities in the program, the frequency of redemptions or other limitations. Stock Connect transactions arenot covered by investor protection programs of either the Hong Kong or Shanghai and Shenzhen Stock Exchanges, although anydefault by a Hong Kong broker should be subject to established Hong Kong law. In China, Stock Connect securities are held onbehalf of ultimate investors (such as the Fund) by the Hong Kong Securities Clearing Company Limited (“HKSCC”) as nominee.While Chinese regulators have affirmed that the ultimate investors hold a beneficial interest in Stock Connect securities, the lawsurrounding such rights is in its early stages and the mechanisms that beneficial owners may use to enforce their rights are untestedand therefore pose uncertain risks. Further, courts in China have limited experience in applying the concept of beneficial ownershipand the law surrounding beneficial ownership will continue to evolve as they do so. There is accordingly a risk that as the law is testedand developed, the Fund’s ability to enforce its ownership rights may be negatively impacted. The Fund may not be able to participatein corporate actions affecting Stock Connect securities due to time constraints or for other operations reasons. Similarly, the Fund willnot be able to vote in shareholders’ meetings except through HKSCC and will not be able to attend shareholders’ meetings. StockConnect trades are settled in Renminbi (RMB), the Chinese currency, and investors must have timely access to a reliable supply ofRMB in Hong Kong, which cannot be guaranteed.

Stock Connect trades are either subject to certain pre-trade requirements or must be placed in special segregated accounts that allowbrokers to comply with these pre-trade requirements by confirming that the selling shareholder has sufficient Stock Connect securitiesto complete the sale. If the Fund does not utilize a special segregated account, the Fund will not be able to sell the shares on anytrading day where it fails to comply with the pre-trade checks. In addition, these pre-trade requirements may, as a practical matter,limit the number of brokers that the Fund may use to execute trades. While the Fund may use special segregated accounts in lieu of



31


December 31, 2016

Investment Policy (unaudited) (cont’d)the pre-trade check, some market participants have yet to fully implement IT systems necessary to complete trades involving securitiesin such accounts in a timely manner. Market practice with respect to special segregated accounts is continuing to evolve. Investmentsvia Stock Connect are subject to regulation by Chinese authorities. Chinese law may require aggregation of a Fund’s holding of StockConnect securities with securities of other clients of the Adviser for purposes of disclosing positions held to the market, acquiescing totrading halts that may be imposed until regulatory filings are completed or complying with China’s short-term trading rules.

Determination of NAVThe Fund determines the NAV per share as of the close of the NYSE (normally 4:00 p.m. Eastern time) on each day that the NYSE isopen for business. Shares generally will not be priced on days that the NYSE is closed. If the NYSE is closed due to inclement weather,technology problems or any other reason on a day it would normally be open for business, or the NYSE has an unscheduled earlyclosing on a day it has opened for business, the Fund reserves the right to treat such day as a business day and calculate its NAV as ofthe normally scheduled close of regular trading on the NYSE for that day, so long as the Adviser believes there generally remains anadequate market to obtain reliable and accurate market quotations. The Fund may elect to price its shares on days when the NYSE isclosed but the primary securities markets on which the Fund’s securities trade remain open.



32


December 31, 2016

Dividend Reinvestment and Cash Purchase Plan (unaudited)Pursuant to the Dividend Reinvestment and Cash Purchase Plan (the Plan), each stockholder will be deemed to have elected, unlessComputershare Trust Company, N.A. (the Plan Agent) is otherwise instructed by the stockholder in writing, to have all distributionsautomatically reinvested in Fund shares. Participants in the Plan have the option of making additional voluntary cash payments to thePlan Agent, annually, in any amount from $100 to $3,000, for investment in Fund shares.

Dividend and capital gain distributions (Distributions) will be reinvested on the reinvestment date in full and fractional shares. If themarket price per share equals or exceeds net asset value per share on the reinvestment date, the Fund will issue shares to participants atnet asset value or, if net asset value is less than 95% of the market price on the reinvestment date, shares will be issued at 95% of themarket price. If net asset value exceeds the market price on the reinvestment date, participants will receive shares valued at marketprice. The Fund may purchase shares of its Common Stock in the open market in connection with dividend reinvestmentrequirements at the discretion of the Board of Directors. Should the Fund declare a Distribution payable only in cash, the Plan Agentwill purchase Fund shares for participants in the open market as agent for the participants.

The Plan Agent’s fees for the reinvestment of a Distribution will be paid by the Fund. However, each participant’s account will becharged a pro rata share of brokerage commissions incurred on any open market purchases effected on such participant’s behalf. Aparticipant will also pay brokerage commissions incurred on purchases made by voluntary cash payments. Although stockholders inthe Plan may receive no cash distributions, participation in the Plan will not relieve participants of any income tax which may bepayable on such dividends or distributions.

In the case of stockholders, such as banks, brokers or nominees, that hold shares for others who are the beneficial owners, the PlanAgent will administer the Plan on the basis of the number of shares certified from time to time by the stockholder as representing thetotal amount registered in the stockholder’s name and held for the account of beneficial owners who are participating in the Plan.

Stockholders who do not wish to have distributions automatically reinvested should notify the Plan Agent in writing. There is nopenalty for non-participation or withdrawal from the Plan, and stockholders who have previously withdrawn from the Plan may rejoinat any time. Requests for additional information or any correspondence concerning the Plan should be directed to the Plan Agent at:

Morgan Stanley Asia-Pacific Fund, Inc.Computershare Trust Company, N.A.P.O. Box 30170College Station, Texas 778421(800) 231-2608Monday–Friday between 8:30 a.m. and 6:00 p.m. (EDT)




December 31, 2016

33

Privacy Notice (unaudited)Morgan Stanley Investment Management Inc.An Important Notice Concerning Our U.S. Privacy PolicyWe are required by federal law to provide you with a copy of our privacy policy annually. This policy applies to current and formerindividual investors in funds managed or sponsored by Morgan Stanley Investment Management Inc. (“MSIM”) as well as currentand former individual clients of MSIM. This policy is not applicable to partnerships, corporations, trusts or other non-individualclients or investors. Please note that we may amend this policy at any time, and will inform you of any changes as required by law.

We Respect Your PrivacyWe appreciate that you have provided us with your personal financial information. We strive to maintain the privacy of suchinformation while we help you achieve your financial objectives. This Notice describes what non-public personal information wecollect about you, why we collect it, when we may share it with others and how certain others may use it. It discusses the steps youmay take to limit our sharing of certain information about you to affiliated companies in the Morgan Stanley family of companies(“other Morgan Stanley companies”). It also discloses how you may limit use of certain shared information for marketing purposes byother Morgan Stanley branded companies. Throughout this policy, we refer to the non-public information that personally identifiesyou or your accounts as “personal information.’’

1. What Personal Information Do We Collect About You?We obtain personal information from applications and other forms you submit to us, from your dealings with us, from consumerreporting agencies, from our Web sites and from third parties and other sources.

For example:• We may collect information such as your name, address, e-mail address, telephone/fax numbers, assets, income and investment

objectives through subscription documents, applications and other forms you submit to us.

• We may obtain information about account balances, your use of account(s) and the types of products and services you prefer toreceive from us through your dealings and transactions with us and other sources.

• We may obtain information about your creditworthiness and credit history from consumer reporting agencies.

• We may collect background information from and through third-party vendors to verify representations you have made and tocomply with various regulatory requirements.

• If you interact with us through our public and private Web sites, we may collect information that you provide directly throughonline communications (such as an e-mail address). We may also collect information about your Internet service provider, yourdomain name, your computer’s operating system and Web browser, your use of our Web sites and your product and servicepreferences, through the use of “cookies.” Please consult the Terms of Use of these sites for more details.



34


December 31, 2016

Privacy Notice (unaudited) (cont’d)2. When Do We Disclose Personal Information We Collect About You?We may disclose personal information we collect about you to other Morgan Stanley companies and to non-affiliated third parties.

a. Information We Disclose to Other Morgan Stanley Companies. We may disclose personal information to other MorganStanley companies for a variety of reasons, including to manage your account(s) effectively, to service and process yourtransactions, to let you know about products and services offered by us and other Morgan Stanley companies, to manage ourbusiness, and as otherwise required or permitted by law. Offers for products and services from other Morgan Stanley companiesare developed under conditions designed to safeguard your personal information.

b. Information We Disclose to Non-affiliated Third Parties. We do not disclose personal information that we collect about youto non-affiliated third parties except to those who provide marketing services on our behalf, to financial institutions with whomwe have joint marketing agreements, and as otherwise required or permitted by law. For example, we may disclose personalinformation to nonaffiliated third parties for servicing and processing transactions, to offer our own products and services, toprotect against fraud, for institutional risk control, to respond to judicial process or to perform services on our behalf. When weshare personal information with a non-affiliated third party, they are required to limit their use of personal information to theparticular purpose for which it was shared and they are not allowed to share personal information with others except to fulfill thatlimited purpose or as may be permitted or required by law.

3. How Do We Protect the Security and Confidentiality of Personal Information We Collect About You?We maintain physical, electronic and procedural security measures to help safeguard the personal information we collect about you.We have internal policies governing the proper handling of client information. Third parties that provide support or marketingservices on our behalf may also receive personal information, and we require them to adhere to confidentiality standards with respectto such information.

4. How Can You Limit the Sharing of Certain Types of Personal Information With Other MorganStanley Companies?We offer you choices as to whether we share with other Morgan Stanley companies the personal information that was collected todetermine your eligibility for products and services you request (“eligibility information”). Eligibility information does not includeyour identification information or personal information pertaining to our transactions or experiences with you. Please note that, evenif you direct us not to share eligibility information with other Morgan Stanley companies (“opt-out”), we may still share personalinformation, including eligibility information, with those companies in circumstances excluded from the opt-out under applicable law,such as to process transactions or to service your account.



35


December 31, 2016

Privacy Notice (unaudited) (cont’d)5. How Can You Limit the Use of Certain Types of Personal Information by Other Morgan StanleyCompanies for Marketing?By following the opt-out instructions in Section 6 below, you may limit other Morgan Stanley branded companies from marketingtheir products or services to you based on personal information we disclose to them. This information may include, for example, yourincome and account history with us. Please note that, even if you choose to limit Other Morgan Stanley Companies from usingpersonal information about you that we may share with them for marketing their products and services to you, Other Morgan StanleyCompanies may use your personal information that they obtain from us to market to you in circumstances permitted by law, such as ifthe Other Morgan Stanley Company has its own relationship with you.

6. How Can You Send Us an Opt-Out Instruction?If you wish to limit our sharing of eligibility information about you with other Morgan Stanley companies or other Morgan Stanleycompanies’ use of personal information for marketing purposes, as described in this notice, you may do so by:

• Calling us at (800) 231-2608Monday–Friday between 8a.m. and 6p.m.(EST)

• Writing to us at the following address:

Computershare Trust Company, N.A.c/o Privacy CoordinatorP.O. Box 30170College Station, Texas 77842

Your written request should include your name, address, telephone number and account number(s) to which the opt-out applies andwhether you are opting out with respect to sharing of eligibility information (Section 4 above), or if information used for Marketing(Section 5 above) or both. Written opt-out requests should not be sent with any other correspondence. In order to process yourrequest, we require that the request be provided by you directly and not through a third party.

Your opt-out preference will remain in effect with respect to this policy (as it may be amended) until you notify us otherwise. If youhave a joint account, your direction for us not to share this information with other Morgan Stanley companies and for those otherMorgan Stanley companies not to use your personal information for marketing will be applied to all account holders on that account.Please understand that if you limit our sharing or our affiliated companies’ use of personal information, you and any joint accountholder(s) may not receive information about Morgan Stanley products and services, including products or services that could help youmanage your financial resources and achieve your investment objectives.

7. What if an Affiliated Company Becomes a Non-affiliated Third Party?If, at any time in the future, an affiliated company becomes a non-affiliated third party, further disclosures of personal informationmade to the former affiliated company will be limited to those described in Section 2(b) above relating to non-affiliated third parties.



36


December 31, 2016

Privacy Notice (unaudited) (cont’d)If you elected under Section 6 to limit disclosures we make to affiliated companies, or use of personal information by affiliatedcompanies, your election will not apply to use by any former affiliated company of your personal information in their possession onceit becomes a non-affiliated third party.

SPECIAL NOTICE TO RESIDENTS OF VERMONTThe following section supplements our policy with respect to our individual clients who have a Vermont address and

supersedes anything to the contrary in the above policy with respect to those clients only.

The state of Vermont requires financial institutions to obtain your consent prior to sharing personal information that they collectabout you with affiliated companies and non-affiliated third parties other than in certain limited circumstances. Except aspermitted by law, we will not share personal information we collect about you with non-affiliated third parties or other MorganStanley companies unless you provide us with your written consent to share such information (“opt-in”).

If you wish to receive offers for investment products and services offered by or through other Morgan Stanley companies, pleasenotify us in writing at the following address:

Computershare Trust Company, N.A.c/o Privacy CoordinatorP.O. Box 30170College Station, Texas 77842

Your authorization should include your name, address, telephone number and account number(s) to which the opt-in applies andshould not be sent with any other correspondence. In order to process your authorization, we require that the authorization beprovided by you directly and not through a third party.

SPECIAL NOTICE TO RESIDENTS OF CALIFORNIAThe following section supplements our policy with respect to our individual clients who have a California address and

supersedes anything to the contrary in the above policy with respect to those clients only.

In response to a California law, if your account has a California home address, your personal information will not be disclosed tononaffiliated third parties except as permitted by applicable California law, and we will limit sharing such information with ouraffiliates to comply with California privacy laws that apply to us.



37


December 31, 2016

Director and Officer Information (unaudited)Independent Directors:

Number of Portfolios in Fund Complex Overseen Position(s) Length of by Name, Age and Address of Held with Time Principal Occupation(s) During Past 5 Years Independent Other DirectorshipsIndependent Director Registrant Served* and Other Relevant Professional Experience Director** Held by Independent Director***

Frank L. Bowman (72)c/o Perkins Coie LLPCounsel to the IndependentDirectors30 Rockefeller PlazaNew York, NY 10112

Director SinceAugust2006

President, Strategic Decisions, LLC (consulting)(since February 2009); Director or Trustee ofvarious Morgan Stanley Funds (sinceAugust 2006); Chairperson of the Complianceand Insurance Committee (since October 2015);formerly, Chairperson of the Insurance Sub-Committee of the Compliance and InsuranceCommittee (2007-2015); served as Presidentand Chief Executive Officer of the Nuclear EnergyInstitute (policy organization) (February 2005-November 2008); retired as Admiral, U.S. Navyafter serving over 38 years on active dutyincluding 8 years as Director of the Naval NuclearPropulsion Program in the Department of theNavy and the U.S. Department of Energy (1996-2004); served as Chief of Naval Personnel(July 1994-September 1996) and on the JointStaff as Director of Political Military Affairs(June 1992-July 1994); knighted as HonoraryKnight Commander of the Most Excellent Orderof the British Empire; awarded the Officier del’Orde National du Mérite by the FrenchGovernment; elected to the National Academy ofEngineering (2009).

90 Director of BP p.l.c.; Director ofNaval and Nuclear Technologies LLP;Director Emeritus of the ArmedServices YMCA; Director of the U.S.Naval Submarine League; Member ofthe National Security AdvisoryCouncil of the Center for U.S. GlobalEngagement and a member of theCNA Military Advisory Board;Chairman of the charity J Street CupGolf; Trustee of Fairhaven UnitedMethodist Church; and Director ofother various non-profitorganizations.

Kathleen A. Dennis (63)c/o Perkins Coie LLPCounsel to the IndependentDirectors30 Rockefeller PlazaNew York, NY 10112


President, Cedarwood Associates (mutual fundand investment management consulting) (sinceJuly 2006); Chairperson of the Liquidity andAlternatives Sub-Committee of the InvestmentCommittee (since October 2006) and Director orTrustee of various Morgan Stanley Funds (sinceAugust 2006); formerly, Senior Managing Directorof Victory Capital Management (1993-2006).

91 Director of various non-profitorganizations.



38


December 31, 2016

Director and Officer Information (unaudited) (cont’d)Independent Directors (cont’d):


Nancy C. Everett (61)c/o Perkins Coie LLPCounsel to the IndependentDirectors30 Rockefeller PlazaNew York, NY 10112

Director SinceJanuary2015

Chief Executive Officer, Virginia CommonwealthUniversity Investment Company (sinceNovember 2015); Owner, OBIR, LLC (institutionalinvestment management consulting) (sinceJune 2014); formerly, Managing Director,BlackRock Inc. (February 2011-December 2013);and Chief Executive Officer, General MotorsAsset Management (a/k/a Promark GlobalAdvisors, Inc.) (June 2005-May 2010).

91 Member of Virginia CommonwealthUniversity School of BusinessFoundation; formerly, Member ofVirginia Commonwealth UniversityBoard of Visitors (2013-2015);Member of Committee on Directorsfor Emerging Markets Growth Fund,Inc. (2007-2010); Chairperson ofPerformance Equity Management,LLC (2006-2010); and Chairperson,GMAM Absolute Return StrategiesFund, LLC (2006-2010).

Jakki L. Haussler (59)c/o Perkins Coie LLPCounsel to the IndependentDirectors30 Rockefeller PlazaNew York, NY 10112

Director SinceJanuary2015

Chairman and Chief Executive Officer, OpusCapital Group (since January 1996); formerly,Director, Capvest Venture Fund, LP (May 2000-December 2011); Partner, Adena Ventures, LP(July 1999-December 2010); Director, TheVictory Funds (February 2005-July 2008).

91 Director of Cincinnati Bell Inc. andMember, Audit Committee andCompensation Committee; Directorof Northern Kentucky UniversityFoundation and Member, InvestmentCommittee; Member of ChaseCollege of Law Transactional LawPractice Center Board of Advisors;Director of Best Transport; Directorof Chase College of Law Board ofVisitors; formerly, Member,University of Cincinnati FoundationInvestment Committee; Member,Miami University Board of Visitors(2008-2011); Trustee of VictoryFunds (2005-2008) and Chairman,Investment Committee (2007-2008)and Member, Service ProviderCommittee (2005-2008).



39


December 31, 2016



Joseph J. Kearns (74)c/o Kearns & Associates LLC46 E Peninsula Center #385Rolling Hills Estates, CA90274-3712


President, Kearns & Associates LLC (investmentconsulting); Chairperson of the Audit Committee(since October 2006) and Director or Trustee ofvarious Morgan Stanley Funds (sinceAugust 1994); formerly, Deputy Chairperson ofthe Audit Committee (July 2003-September 2006)and Chairperson of the Audit Committee ofvarious Morgan Stanley Funds (sinceAugust 1994); CFO of the J. Paul Getty Trust.

93 Director of Electro Rent Corporation(equipment leasing). Prior toDecember 31, 2013, Director of TheFord Family Foundation.

Michael F. Klein (58)c/o Perkins Coie LLPCounsel to the IndependentDirectors30 Rockefeller PlazaNew York, NY 10112


Managing Director, Aetos Capital, LLC (sinceMarch 2000); Co-President, Aetos AlternativesManagement, LLC (since January 2004) and Co-Chief Executive Officer of Aetos Capital LLC(since August 2013); Chairperson of the FixedIncome Sub-Committee of the InvestmentCommittee (since October 2006) and Director orTrustee of various Morgan Stanley Funds (sinceAugust 2006); formerly, Managing Director,Morgan Stanley & Co. Inc. and Morgan StanleyDean Witter Investment Management, President,various Morgan Stanley Funds (June 1998-March 2000) and Principal, Morgan Stanley & Co.Inc. and Morgan Stanley Dean Witter InvestmentManagement (August 1997-December 1999).

90 Director of certain investment fundsmanaged or sponsored by AetosCapital, LLC; Director of SanitizedAG and Sanitized Marketing AG(specialty chemicals).

Director of NVR, Inc. (homeconstruction).

91Senior Partner, Johnson Smick International, Inc.(consulting firm); Chairperson of the InvestmentCommittee (since October 2006) and Director orTrustee of various Morgan Stanley Funds (sinceJuly 1991); Co-Chairman and a founder of theGroup of Seven Council (G7C) (internationaleconomic commission); formerly, Chairperson ofthe Audit Committee (July 1991-September2006), Vice Chairman of the Board of Governorsof the Federal Reserve System and AssistantSecretary of the U.S. Treasury.

SinceJuly 1991

DirectorDr. Manuel H. Johnson (67)c/o Johnson SmickInternational, Inc.220 I Street, N.E. —Suite 200Washington, D.C. 20002



40


December 31, 2016



* This is the earliest date the Director began serving the Morgan Stanley Funds. Each Director serves an indefinite term, until his or her successor is elected.** The Fund Complex includes (as of December 31, 2016) all open-end and closed-end funds (including all of their portfolios) advised by Morgan Stanley

Investment Management Inc. (the “Adviser”) and any funds that have an adviser that is an affiliated person of the Adviser (including, but not limited to,Morgan Stanley AIP GP LP).

*** This includes any directorships at public companies and registered investment companies held by the Director at any time during the past five years.

W. Allen Reed (69)c/o Perkins Coie LLPCounsel to the IndependentDirectors30 Rockefeller PlazaNew York, NY 10112


Chairperson of the Equity Sub-Committee of theInvestment Committee (since October 2006) andDirector or Trustee of various Morgan StanleyFunds (since August 2006); formerly, Presidentand CEO of General Motors Asset Management;Chairman and Chief Executive Officer of the GMTrust Bank and Corporate Vice President ofGeneral Motors Corporation (August 1994-December 2005).

91 Director of Legg Mason, Inc.;formerly, Director of the AuburnUniversity Foundation (2010-2015).

Fergus Reid (84)c/o Joe Pietryka, Inc.85 Charles Colman Blvd.Pawling, NY 12564

Director SinceJune 1992

Chairman, Joe Pietryka, Inc.; Chairperson of theGovernance Committee and Director or Trusteeof various Morgan Stanley Funds (sinceJune 1992).

92 Formerly, Trustee and Director ofcertain investment companies in theJP Morgan Fund Complex managedby JP Morgan InvestmentManagement Inc. (1987-2012).

Michael E. Nugent (80)522 Fifth AvenueNew York, NY 10036

Chair ofthe BoardandDirector

Chair ofthe BoardssinceJuly 2006andDirectorsinceJuly 1991

Chair of the Boards of various Morgan StanleyFunds (since July 2006); Chairperson of theClosed-End Fund Committee (since June 2012)and Director or Trustee of various Morgan StanleyFunds (since July 1991); formerly, Chairperson ofthe Insurance Committee (until July 2006);General Partner, Triumph Capital, L.P. (privateinvestment partnership) (1988-2013).

92 None.

None.91Management Director, JPMorgan AssetManagement (2013-2016); President, JPMorganFunds (2010-2013), Chief Administrative Officer,JPMorgan Funds (2004-2010), Treasurer,JPMorgan Funds (2003-2004, 2008-2010), andVice President and Board Liaison, JPMorganFunds (2001-2004); Managing Director, J.P.Morgan Investment Management Inc. (2001-2013); Vice President of Finance, Pierpont Group(1996-2001); Vice President, Bank of New York(1995-1996); Senior Audit Manager, PriceWaterhouse, LLP (1982-1995).

SinceJanuary2017

DirectorPatricia Maleski (56)c/o Perkins Coie LLPCounsel to the IndependentDirectors30 Rockefeller PlazaNew York, NY 10112



41


December 31, 2016

Director and Officer Information (unaudited) (cont’d)Executive Officers:

Position(s) Held with Length of Name, Age and Address of Executive Officer Registrant Time Served* Principal Occupation(s) During Past 5 Years

* This is the earliest date the officer began serving the Morgan Stanley Funds. Each officer serves a one-year term, until his or her successor is elected andqualifies.

John H. Gernon (53)522 Fifth AvenueNew York, NY 10036

President andPrincipalExecutiveOfficer

Since September2013

President and Principal Executive Officer of the Equity and FixedIncome Funds and the Morgan Stanley AIP Funds (sinceSeptember 2013) and the Liquidity Funds and various moneymarket funds (since May 2014) in the Fund Complex; ManagingDirector of the Adviser; Head of Product (since 2006).

Timothy J. Knierim (58)522 Fifth AvenueNew York, NY 10036

ChiefComplianceOfficer

SinceDecember 2016

Managing Director of the Adviser and various entities affiliatedwith the Adviser; Chief Compliance Officer of various MorganStanley Funds and the Adviser (since December 2016) and ChiefCompliance Officer of Morgan Stanley AIP GP LP (since 2014).Formerly, Managing Director and Deputy Chief Compliance Officerof the Adviser (2014-2016); and formerly, Chief ComplianceOfficer of Prudential Investment Management, Inc. (2007-2014).

Francis J. Smith (51)522 Fifth AvenueNew York, NY 10036

Treasurer andPrincipalFinancialOfficer

Treasurer sinceJuly 2003 andPrincipalFinancialOfficer sinceSeptember 2002

Managing Director of the Adviser and various entities affiliatedwith the Adviser; Treasurer (since July 2003) and PrincipalFinancial Officer of various Morgan Stanley Funds (sinceSeptember 2002).

Mary E. Mullin (49)522 Fifth AvenueNew York, NY 10036

Secretary Since June 1999 Executive Director of the Adviser; Secretary of various MorganStanley Funds (since June 1999).



(This page has been left blank intentionally.)



Merrill Corp - Merrill Corporation ED True Blanks 7.5x8.75 Prospectus [Funds] Style Only | rradatz | 05-Aug-10 13:05 | 07-28247-18.tb1 | Sequence: 1CHKSUM Content: No Content Layout: 0 Graphics: No Graphics CLEAN

JOB: 07-28247-18 CYCLE#;BL#: 2; 0 TRIM: 7.5" x 8.75" AS: UNK COMPOSITECOLORS: none GRAPHICS: none V1.5

morgan stanley asia-pacific fund, inc. nyse: apf

Documents