UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-06445
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The Herzfeld Caribbean Basin Fund, Inc.
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(Exact name of registrant as specified in charter)
P.O. BOX 161465, MIAMI, FLORIDA 33116
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(Address of principal executive offices) (Zip code)
THOMAS J. HERZFELD
P.O. BOX 161465, MIAMI, FL 33116
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(Name and address of agent for service)
Registrant's telephone number, including area code: 305-271-1900
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Date of fiscal year end: 06/30/04
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Date of reporting period: 12/31/2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
Item 1. Shareholder Report
THE HERZFELD
CARIBBEAN BASIN
FUND, INC.
SEMI-ANNUAL REPORT
December 31, 2003
================================================================================
THE HERZFELD CARIBBEAN BASIN FUND, INC.
The Herzfeld Building
PO Box 161465
Miami, FL 33116
(305) 271-1900
INVESTMENT ADVISOR
HERZFELD/CUBA
a division of Thomas J. Herzfeld Advisors, Inc.
PO Box 161465
Miami, FL 33116
(305) 271-1900
TRANSFER AGENT & REGISTRAR
Investors Bank & Trust Company
200 Clarendon Street,
16th Floor Boston, MA 02116
(617) 443-6870
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street, 5th Floor
Boston, MA 02116
COUNSEL
Pepper Hamilton LLP
3000 Two Logan Square
18th and Arch Streets
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Kaufman, Rossin & Co., P.A.
2699 South Bayshore Drive
Miami, FL 33133
www.kaufmanrossin.com
Listed NASDAQ SmallCap Market
Symbol: CUBA
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The Herzfeld Caribbean Basin Fund's investment objective is long-term capital
appreciation. To achieve its objective, the Fund invests in issuers that are
likely, in the Advisor's view, to benefit from economic, political, structural
and technological developments in the countries in the Caribbean Basin, which
consists of Cuba, Jamaica, Trinidad and Tobago, the Bahamas, the Dominican
Republic, Barbados, Aruba, Haiti, the Netherlands Antilles, the Commonwealth of
Puerto Rico, Mexico, Honduras, Guatemala, Belize, Costa Rica, Panama, Colombia
and Venezu-ela. The fund invests at least 80% of its total assets in a broad
range of securities of issuers including U.S.-based companies, which engage in
substantial trade with and derive substantial revenue from operations in the
Caribbean Basin Countries.
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- 2 -
LETTER TO STOCKHOLDERS
================================================================================
[PHOTO]
Thomas J. Herzfeld
Chairman and President
February 2, 2004
Dear Fellow Stockholders:
We are pleased to present our semi-annual report for the period ending December
31, 2003. On that date The Herzfeld Caribbean Basin Fund's net assets were
$8,719,841 and its per share net asset value was $5.20*, compared with
$5,741,830 or $3.42 per share a year earlier representing a gain in net asset
value of 52.0% for the calendar year and 31.64% for the six month period ended
December 31, 2003.
When we formed The Herzfeld Caribbean Basin Fund 10 years ago, it appeared to us
at the time that the U.S. may have been considering lifting the embargo with
Cuba. That event, however, has always been elusive. Knowing that, we positioned
the Fund's investments in companies which we believed would do well if there
were no change in U.S. policy towards Cuba; but at the same time, in companies
we believe would benefit from the resumption of trade with that country. That
strategy has worked quite well. For instance, our net asset value has reached a
record high (adjusted for distributions) and our shares have recently been
trading at a premium to net asset value. Many of our major holdings are
experiencing good price performance.
Although the embargo with Cuba is still in place, it is interesting to note that
the U.S. is Cuba's 8th largest trading partner. U.S. food sales to that country
now account for 25% of Cuba's food imports.
The Cuban economy grew at 2.6% in 2003. Although sugar production dropped 40%,
tourism was quite strong. Approximately 1.9 million foreigners visited the
island, a 16% increase from the previous year.
We continue to believe that our portfolio is invested in companies throughout
the Caribbean Basin which have great prospects--with or without the Cuban
embargo. If trade is resumed, things should get very interesting.
--------------------
*For those who like coincidences, 5/20 or May 20th is Cuban Independence Day and
5/20/04 will mark the tenth anniversary of our Fund's trading.
- 3 -
LETTER TO STOCKHOLDERS (Continued)
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LARGEST ALLOCATIONS
The following tables present our largest investment and geographic allocations
as of December 31, 2003.
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GEOGRAPHIC % OF NET ASSETS LARGEST PORTFOLIO POSITIONS % OF NET ASSETS
ALLOCATION
USA 0.10% Florida East Coast Industries Inc. 21.33%
Mexico 1.27% Consolidated Water Co. 6.44%
Cayman Islands 8.34% Florida Rock Industries 6.29%
Netherlands Antilles 4.02% Royal Caribbean Cruises Ltd. 5.59%
Latin American Regional 3.87% Orthofix International N.V. 4.02%
Puerto Rico 2.92% Watsco Incorporated 3.91%
Panama 2.89% Mastec, Inc. 3.56%
Belize 2.78% Carnival Corp. 3.19%
Virgin Islands 0.80% Margo Caribe Inc. 2.92%
Costa Rica 0.48% Banco Latinoamericano de
Colombia 0.43% Exportaciones, S.A. 2.89%
Dominican Republic 0.29% ---------------------------------------------
Venezuela 0.09%
Cuba 0.00%
------------------------------
PREMIUM/DISCOUNT
As the graph below depicts, the Fund has traded at both premiums and discounts
every year except the year of inception in which it traded only at a premium. As
I have stated before, we believe that closed-end funds trading at discounts to
net asset value represent good value.
PREMIUM/DISCOUNT OF THE HERZFELD CARIBBEAN BASIN FUND FROM INCEPTION
[LINE CHART]
- 4 -
LETTER TO STOCKHOLDERS (Continued)
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Daily net asset values and press releases on the Fund are available on the
Internet at WWW.HERZFELD.COM.
I would like to thank the members of the Board of Directors for their hard work
and guidance and also to thank my fellow stockholders for their continued
support and suggestions.
Sincerely,
/s/ Thomas J. Herzfeld
Thomas J. Herzfeld
Chairman of the Board and President
- 5 -
SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2003
================================================================================
Shares or Principal Amount Description Market Value
-------------------------- ----------- ------------
Common stocks - 88.28% of net assets
Banking and finance - 3.85%
7,000 Bancolombia S.A. $ 37,380
13,120 Banco Latinoamericano de Exportaciones, S.A. 252,298
28,300 Grupo Financiero BBVA Bancomer, S.A.
de C.V. Series O* 24,177
3,600 Grupo Financiero Banorte, S.A. de C.V. Series O* 12,494
8,400 Grupo Financiero Inbursa, S.A. de C.V. Series O* 9,112
Communications - 5.92%
11,000 America Movil, S.A. de C.V. Series A 15,026
43,800 America Movil, S.A. de C.V. Series L 60,259
11,100 America Telecom, S.A. de C.V. Series A1 14,332
2,500 Atlantic Tele-Network, Inc. 70,125
11,100 Carso Global Telecom, S.A. de C.V., Series A1* 15,547
1,000 Garmin Ltd. 54,480
725 Grupo Iusacell, S.A. de C.V. Series V* 1,348
15,000 Grupo Radio Centro, S.A. ADR 104,700
1,000 Grupo Televisa S.A. GDR 39,860
12,100 Grupo Televisa, S.A. Series CPO* 24,152
11,000 Telefonos de Mexico, S.A. de C.V. Series A 18,158
39,300 Telefonos de Mexico, S.A. de C.V. Series L 65,049
18,000 Tricom, S.A. ADR* 25,560
13,900 TV Azteca, S.A. de C.V. Series CPO 7,941
Conglomerates - 3.48%
4,900 Alfa, S.A. de C.V. Series A* 14,695
39,400 Carlisle Holdings, Inc.* 242,310
3,100 Corporacion Interamericana de Entretenimiento, S.A.
de C.V. Series B* 5,873
4,200 Desc, S.A. de C.V. Series B 1,446
3,300 Grupo Carso, S.A. de C.V. Series A1* 11,600
3,300 U.S. Commercial Corp., S.A. de C.V.* 1,365
2,600 Vitro, S.A. Series A 2,547
8,000 Vitro Sociedad Anonima ADR 23,200
--------------------
*Non-income producing
See accompanying notes.
- 6 -
SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2003 (continued)
================================================================================
Shares or Principal Amount Description Market Value
-------------------------- ----------- ------------
Construction and related - 10.64%
10,000 Cemex, S.A. de C.V. Series CPO $ 52,281
1,936 Ceramica Carabobo Class A ADR* 2,892
4,000 Consorcio ARA, S.A. de C.V. Series A1* 9,938
15,600 Empresas ICA, Sociedad Controladora, S.A. de C.V.* 3,623
10,500 Florida Rock Industries, Inc. 548,500
20,950 Mastec, Inc.* 310,270
Consumer products and related manufacturing - 5.11%
800,000 Atlas Electricas, S.A. 42,031
5,400 Grupo Casa Saba, S.A. ADR* 62,370
15,000 Watsco Incorporated 340,950
Food, beverages and tobacco - 3.04%
10,000 Coca Cola Femsa, S.A. de C.V. ADR 212,400
5,800 Fomento Economico Mexicano, S.A. de C.V. Series UBD 21,410
7,300 Grupo Bimbo, S.A. de C.V. Series A 13,700
7,300 Grupo Modelo, S.A. de C.V. Series C 17,475
Investment companies - 3.87%
15,345 The Latin America Equity Fund, Inc. 234,165
8,100 The Latin American Discovery Fund, Inc. 103,599
Leisure - 8.78%
7,000 Carnival Corp. 278,110
14,000 Royal Caribbean Cruises Ltd. 487,060
Medical - 4.02%
7,160 Orthofix International N.V.* 350,697
Pulp and paper - 0.17%
5,700 Kimberly-Clark de Mexico, S.A. de C.V. Series A 14,609
Railroad and landholdings - 21.33%
56,200 Florida East Coast Industries, Inc. 1,860,220
--------------------
*Non-income producing
See accompanying notes.
- 7 -
SCHEDULE OF INVESTMENTS AS OF DECEMBER 31, 2003 (continued)
================================================================================
Shares or Principal Amount Description Market Value
-------------------------- ----------- ------------
Retail - 0.78%
3,700 Controladora Comercial Mexicana, S.A. de C.V. $ 3,721
Series UBC
1,380 Grupo Elektra, S.A. de C.V. Series CPO 7,307
7,900 Wal-Mart de Mexico, S.A. de C.V. Series C 21,125
12,500 Wal-Mart de Mexico, S.A. de C.V. Series V 35,629
Trucking and marine freight - 5.16%
700 Seaboard Corporation 197,400
39,600 Trailer Bridge, Inc.* 218,552
8,000 Grupo TMM, S.A. ADR* 33,920
Utilities - 8.33%
12,000 Caribbean Utilities Ltd., Class A 165,480
28,000 Consolidated Water, Inc. 561,400
Other - 3.80%
2,414 Mantex S.A.I.C.A* 3,936
39,120 Margo Caribe Inc.* 254,280
843 Siderurgica Venezolana Sivensa ADR* 639
75 Siderurgica Venezolana Sivensa Series B 56
35,000 Xcelera, Inc.* 72,800
----------
TOTAL COMMON STOCKS (COST $5,833,311) $7,697,579
Bonds - 0% of net assets
165,000 Republic of Cuba - 4.5%, 1977 - in default
(cost $63,038) (note 2)* --
OTHER ASSETS LESS LIABILITIES - 11.72% OF NET ASSETS $1,022,262
----------
NET ASSETS - 100% (a) $8,719,841
----------
--------------------
*Non-income producing
(a) The cost for federal income tax purposes was $5,896,349. At December 31,
2003, net unrealized gain for all securities based on tax cost was $1,864,268.
This consisted of aggreagate gross unrealized appreciation for all securities in
which there was an excess value over tax cost of $2,709,461 and aggreate gross
unrealized depreciation for all securities in which there was an excess of tax
cost over value of $845,193.
See accompanying notes.
- 8 -
STATEMENT OF ASSETS AND LIABILITIES AS OF DECEMBER 31, 2003
================================================================================
ASSETS
Investment in securities, at market value
(cost $5,833,311) (Note 2) $ 7,697,579
Cash 681,953
Dividends receivable 11,497
Receivable for investments sold 381,615
Other assets 33,249
-----------
TOTAL ASSETS $ 8,805,893
LIABILITIES
Payable for investments purchased $ 9,650
Accrued investment advisor fee (Note 3) 23,213
Other payables 53,189
-------
TOTAL LIABILITIES 86,052
-----------
NET ASSETS (Equivalent TO $5.20 per share
based on 1,677,636 shares outstanding) $ 8,719,841
===========
NET ASSETS CONSIST OF THE FOLLOWING:
Common stock, $.001 par value; 100,000,000
shares authorized; 1,677,636 shares issued
and outstanding $ 1,678
Additional paid-in capital 8,362,502
Accumulated net investment loss (1,138,632)
Accumulated net realized loss on investments (369,975)
Net unrealized gain on investments 1,864,268
-----------
TOTAL $ 8,719,841
===========
See accompanying notes.
- 9 -
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 2003
================================================================================
INVESTMENT INCOME
Dividends $ 133,344
-----------
EXPENSES
Investment advisor fee (Note 3) $ 56,269
Custodian fees 27,000
Professional fees 16,402
Insurance 13,186
Transfer agent fees 8,750
Listing fees 7,500
Printing 3,758
Director fees 3,900
Postage 3,772
Miscellaneous 9,997
-----------
Total expenses 150,534
-----------
INVESTMENT LOSS - NET ($ 17,190)
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments and
foreign currency 259,490
Change in unrealized gain on investments and
foreign currency 1,851,537
-----------
NET GAIN ON INVESTMENTS 2,111,027
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 2,093,837
===========
See accompanying notes.
- 10 -
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
SIX MONTHS
ENDED YEAR
12/31/03 6/30/03
(UNAUDITED)
INCREASE IN NET ASSETS FROM
OPERATIONS:
Investment loss - net ($ 17,190) ($ 186,014)
Net realized gain (loss) on investments and
foreign currency 259,490 (964,095)
Change in unrealized gain on investments
and foreign currency 1,851,537 1,337,987
----------- -----------
Net increase in net assets from
operations 2,093,837 187,878
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income and short-term realized gains -- --
Realized gains - long-term -- (129,950)
----------- -----------
Total distributions -- (129,950)
TOTAL INCREASE IN NET ASSETS $ 2,093,837 $ 57,928
NET ASSETS:
Beginning of period $ 6,626,004 $ 6,568,076
----------- -----------
End of period $ 8,719,841 $ 6,626,004
=========== ===========
See accompanying notes.
- 11 -
FINANCIAL HIGHLIGHTS
================================================================================
SIX MONTHS ENDED YEAR ENDED JUNE 30
12/31/03 ---------------------------------------
(UNAUDITED) 2003 2002 2001 2000
------ ------ ------ ------ ------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 3.95 $ 3.92 $ 5.15 $ 5.02 $ 6.12
------ ------ ------ ------ ------
Operations:
Net investment loss (0.01) (0.11) (0.10) (0.07) (0.10)
Net realized and unrealized gain (loss) on investments 1.26 0.22 (0.98) 0.20 (1.00)
------ ------ ------ ------ ------
Total from (to) operations 1.25 0.11 (1.08) 0.13 (1.10)
------ ------ ------ ------ ------
Distributions:
From investment income net -- -- (0.10) -- --
------
From net realized gains -- (0.08) (0.05) -- --
------ ------
Total distributions -- (0.08) (0.15) -- --
Net asset value, end of period $ 5.20 $ 3.95 $ 3.92 $ 5.15 $ 5.02
------ ------ ------ ------ ------
Per share market value, end of period $ 4.75 $ 3.49 $ 3.48 $ 4.20 $ 5.06
------ ------ ------ ------ ------
Total investment return (loss) based on
market value per share 72.21%(1) 2.70% (13.45%) (17.04%) (15.63%)
------ ------ ------ ------ ------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (in 000's) $8,720 $6,626 $6,568 $8,643 $8,424
------ ------ ------ ------ ------
Ratio of expenses to average net assets 3.90%(1) 4.46% 3.77% 3.11% 3.11%
------ ------ ------ ------ ------
Ratio of investment loss -
net to average net assets (0.45%)(1) (3.15%) (2.45%) (1.33%) (1.76%)
------ ------ ------ ------ ------
Portfolio turnover rate 12% 3% 18% 27% 10%
------ ------ ------ ------ ------
--------------------
(1) This ratio has been annualized; however, the percentage shown is not
necessarily indicative of results for a full year.
See accompanying notes.
- 12 -
NOTES TO FINANCIAL STATEMENTS
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NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND RELATED MATTERS
--------------------------------
The Herzfeld Caribbean Basin Fund, Inc. (the "Fund") is a non-diversified,
closed-end management investment company incorporated under the laws of the
State of Maryland on March 10, 1992, and registered under the Investment Company
Act of 1940. The Fund commenced investing activities in January, 1994. The Fund
is listed on the NASDAQ SmallCap Market and trades under the symbol "CUBA".
The Fund's investment policy is to invest at least 80% of its assets in
investments that are economically tied to Caribbean Basin Countries. The Fund's
investment objective is to obtain long-term capital appreciation. The Fund
pursues its objective by investing primarily in equity and equity-linked
securities of public and private companies, including U.S.-based companies, (i)
whose securities are traded principally on a stock exchange in a Caribbean Basin
Country or (ii) that have at least 50% of the value of their assets in a
Caribbean Basin Country or (iii) that derive at least 50% of their total revenue
from operations in a Caribbean Basin Country. The Fund's investment objective is
fundamental and may not be changed without the approval of a majority of the
Fund's outstanding voting securities.
At December 31, 2003, the Fund had investments in companies operating
principally in Mexico and the Cayman Islands, representing approximately 11% and
8% of the Fund's net assets, respectively.
The Fund's custodian and transfer agent is Investors Bank & Trust Company, based
in Boston, Massachusetts.
SECURITY VALUATION
------------------
Investments in securities traded on a national securities exchange or reported
on the NASDAQ are stated at the last reported sales price and official closing
price, respectively, on the day of valuation; other securities traded in the
over-the-counter market and listed securities for which no sale was reported on
that date are stated at the last quoted bid price. Short-term notes are stated
at amortized cost, which is equivalent to value. Restricted securities and other
securities for which quotations are not readily available are valued at fair
value as determined by the Board of Directors.
- 13 -
NOTES TO FINANCIAL STATEMENTS
================================================================================
INCOME RECOGNITION
------------------
Security transactions are recorded on the trade date. Gains and losses on
securities sold are determined on the basis of identified cost. Dividend income
is recognized on the ex-dividend date, and interest income is recognized on an
accrual basis. Discounts and premiums on securities purchased are amortized over
the life of the respective securities.
DEPOSITS WITH FINANCIAL INSTITUTIONS
------------------------------------
The Fund may, during the course of its operations, maintain account balances
with financial institutions in excess of federally insured limits.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS
-----------------------------------------------------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
INCOME TAXES
------------
The Fund qualifies as a "regulated investment company" and as such (and by
complying with the applicable provisions of the Internal Revenue Code of 1986,
as amended) is not subject to federal income tax on taxable income (including
realized capital gains) that is distributed to shareholders.
The Fund has adopted a June 30 year-end for federal income tax purposes.
DISTRIBUTIONS TO STOCKHOLDERS
-----------------------------
Distributions to stockholders are recorded on the ex-dividend date. Income and
capital gain distributions are determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States of America.
- 14 -
NOTES TO FINANCIAL STATEMENTS
================================================================================
NOTE 2. NON-MARKETABLE SECURITY OWNED
Investment in securities include $165,000 principal, 4.5%, 1977 Republic of Cuba
bonds purchased for $63,038. The bonds are listed on the New York Stock Exchange
and had been trading in default since 1960. A "regulatory halt" on trading was
imposed by the New York Stock Exchange in July, 1995. As of December 31, 2003,
the position was valued at $0 by the Board of Directors, which approximates the
bonds' fair value.
NOTE 3. TRANSACTIONS WITH AFFILIATES
HERZFELD / CUBA (the Advisor), a division of Thomas J. Herzfeld Advisors, Inc.,
is the Fund's investment advisor and charges a monthly fee at the annual rate of
1.45% of the Fund's average daily net assets. Total fees for the six months
ended December 31, 2003 amounted to $56,269.
During the six months ended December 31, 2003, the Fund paid $3,335 of brokerage
commissions to Thomas J. Herzfeld & Co., Inc., an affiliate of the Advisor.
NOTE 4. INVESTMENT TRANSACTIONS
During the six months ended December 31, 2003, purchases and sales of investment
securities were $889,492 and $1,605,489, respectively.
At December 31, 2003, the Fund's investment portfolio had gross unrealized gains
of $2,709,461 and gross unrealized losses of $845,193, resulting in a net
unrealized gain of $1,864,268.
- 15 -
PRIVACY POLICY
================================================================================
INFORMATION WE COLLECT
We collect nonpublic information about you from applications or other account
forms you complete, from your transactions with us, our affiliates or others
through transactions and conversations over the telephone.
INFORMATION WE DISCLOSE
We do not disclose information about you, or our former customers, to our
affiliates or to service providers or other third parties except on the limited
basis permitted by law. For example, we may disclose nonpublic information about
you to third parties to assist us in servicing your account with us and to send
transaction confirmations, annual reports, prospectuses and tax forms to you. We
may also disclose nonpublic information about you to government entities in
response to subpoenas.
OUR SECURITY PROCEDURES
To ensure the highest level of confidentiality and security, we maintain
physical, electronic and procedural safeguards that comply with federal
standards to guard your personal information. We also restrict access to your
personal and account information to those employees who need to know that
information to provide services to you.
- 16 -
RESULTS OF NOVEMBER 12, 2003 STOCKHOLDER MEETING
================================================================================
The annual meeting of stockholders of the Fund was held on November 12, 2003. At
the meeting one nominee for Director was elected as follows:
VOTES FOR VOTES WITHHELD
Albert L. Weintraub 1,284,736 5,265
The terms of office as directors of Thomas J. Herzfeld, Michael A. Rubin,
Cecilia Gondor, and Ann S. Lieff continued after the meeting.
- 17 -
PROXY VOTING POLICIES AND PROCEDURES
================================================================================
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available without charge,
upon request, by calling 800-TJH-FUND and on the Securities and Exchange
Commission's website at http://www.sec.gov.
- 18 -
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- 19 -
THE HERZFELD CARIBBEAN BASIN FUND, INC.
The Herzfeld Building
P.O. Box 161465
Miami, FL 33116
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Reserved.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
A response to this item is not yet required.
Item 9. Submission of Matters to a Vote of Security Holders.
A response to this item is not yet required.
Item 10. Controls and Procedures
(a) The registrant's principal executive officer and principal financial officer
have concluded that the registrant's disclosure controls and procedures (as
defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended
(the "Act"), are effective, based on their evaluation of these controls and
procedures as of a date within 90 days of the filing date of the report that
includes the disclosure required by this paragraph.
(b) There were no changes in the registrant's internal controls over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the
registrant's last fiscal half year that could materially affect these controls
subsequent to the date of their evaluation, including any corrective actions
with regard to significant deficiencies and material weaknesses.
Item 11. Exhibits
(a)(1) Requirement to file an exhibit under this item 10(a)(1) is not
applicable.
(2) Separate certifications by the registrant's principal executive
officer and principal financial officer, pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 and as required by Rule 30a-2(a) under the Investment
Company Act of 1940, are attached hereto as Exhibit 99. 302 CERT.
(3) Requirement to file an exhibit under item 10(a)(2) is not
applicable.
(b) A certification by the registrant's principal executive officer
and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 and as required by Rule 30a-2(b) under the Investment Company Act of
1940 is attached hereto as Exhibit 99.906CERT.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Herzfeld Caribbean Basin Fund, Inc.
By: /s/ Thomas J. Herzfeld
-------------------------
Thomas J. Herzfeld
President and Chairman
Date: February 19, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Thomas J. Herzfeld
-------------------------
Thomas J. Herzfeld
President and Chairman
Date: February 19, 2004
By: /s/ Cecilia L. Gondor
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Cecilia L. Gondor
Secretary and Treasurer
(Principal Financial Officer)
Date: February 19, 2004