UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
——————————
FORM N-CSR
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CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
INVESTMENT COMPANY ACT FILE NUMBER 811-06115
THE SINGAPORE FUND, INC.
(Exact name of registrant as specified in charter)
c/o Daiwa Securities Trust Company
One Evertrust Plaza, 9th Floor
Jersey City, New Jersey 07302-3051
(Address of principal executive offices) (Zip code)
c/o Daiwa Securities Trust Company
One Evertrust Plaza, 9th Floor
Jersey City, New Jersey 07302-3051
(Name and address of agent for service)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (201) 915-3054
DATE OF FISCAL YEAR END: October 31
DATE OF REPORTING PERIOD: October 31, 2009
Item 1. Reports to Stockholders.
General Information (unaudited)
The Fund
The Singapore Fund, Inc. (the “Fund”) is a non-diversified, closed-end management investment company. Its primary investment objective is capital appreciation, which it seeks through investment primarily in Singapore equity securities, and to a lesser degree, investment in equity securities issued by companies in ASEAN Group countries. The ASEAN Group currently is composed of Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar (formerly Burma), the Philippines, Singapore, Thailand and Vietnam. The Fund’s Investment Manager is DBS Asset Management (United States) Pte. Ltd. (the “Manager”), an indirect wholly-owned subsidiary of The Development Bank of Singapore, Ltd. Daiwa SB Investments (Singapore) Ltd. provides the Manager with advice regarding investments.
Shareholder Information
The Fund’s shares are listed on the New York Stock Exchange (“NYSE”). The Fund understands that its shares may trade periodically on certain exchanges other than the NYSE, but the Fund has not listed its shares on those other exchanges and does not encourage trading on those exchanges. The Fund’s NYSE trading symbol is “SGF”. The Fund’s daily NAV is available by visiting www.daiwast.com or calling (800) 933-3440 or (201) 915-3020. Also, the Fund’s website includes press releases, a monthly market review and a list of the Fund’s top ten industries and holdings. The Fund has also placed its Fund governance documents on its website under the section titled “Information” which includes the Fund’s proxy voting policies and procedures, its code of ethics and its audit committee charter.
Inquiries
Inquiries concerning your registered share account should be directed to the American Stock Transfer & Trust Company (the “Plan Agent”) at the number noted on the next page. All written inquiries should be directed to The Singapore Fund, Inc., c/o Daiwa Securities Trust Company, One Evertrust Plaza, 9th Floor, Jersey City, NJ 07302-3051.
Restriction on Beneficial Ownership by Singapore Residents
The Fund expects to continue to qualify for a Singapore income tax exemption granted to non-Singapore resident investors with respect to certain types of income derived from Singapore sources. In order for the Fund to be treated as a non-Singapore resident, and therefore qualify for this exemption, not more than 20% of the Fund’s issued share capital may be beneficially owned, directly or indirectly, by Singapore residents. For this reason, the Fund’s Board of Directors has restricted, and in the future may prohibit, the transfer of the Fund’s shares to residents of Singapore.
Proxy Voting Policies and Procedures
A description of the policies and procedures that are used by the Fund’s Manager to determine how to vote proxies relating to the Fund’s portfolio securities is available (1) without charge, upon request, by calling collect (201) 915-3054; (2) by visiting www.daiwast.com; and (3) as an exhibit to the Fund’s annual report on Form N-CSR which is available on the website of the Securities and Exchange Commission (the “Commission”) at www.sec.gov. Information regarding how the Manager votes these proxies is now available by calling the same number and is available on the Commission’s website. The Fund has filed with the Commission its report on Form N-PX covering the Fund’s proxy voting record for the 12-month period ended June 30, 2009.
Quarterly Portfolio of Investments
A Portfolio of Investments is filed with the Commission as of the end of the first and third quarters of each fiscal year on Form N-Q and is available on the Commission’s website at www.sec.gov and the Fund’s website at www.daiwast.com. Additionally, the Portfolio of Investments may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. The quarterly Portfolio of Investments will be made available without charge, upon request, by calling (201) 915-3054.
Certifications
The Fund’s chief executive officer has certified to the NYSE that, as of June 1, 2009, he was not aware of any violation by the Fund of applicable NYSE corporate governance listing standards. The Fund also has included the certifications of the Fund’s chief executive officer and chief financial officer required by Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 in the Fund’s Form N-CSR filed with the Commission for the period of this report.
Dividend Reinvestment and Cash Purchase Plan
A Dividend Reinvestment and Cash Purchase Plan (the “Plan”) is available to provide Shareholders with automatic reinvestment of dividends and capital gain distributions in additional Fund shares. The Plan also allows you to make optional semi-annual cash investments in Fund shares through the Plan Agent. A brochure fully describing the Plan’s terms and conditions is available on the Fund’s website at www.daiwast.com and from the Plan Agent by calling (866) 669-9903 or by writing The Singapore Fund, Inc., c/o the American Stock Transfer & Trust Company, 59 Maiden Lane, New York, NY 10038.
A brief summary of the material aspects of the Plan follows:
Who can participate in the Plan? If you wish to participate and your shares are held in your name, you may elect to become a direct participant in the Plan by completing and mailing the Enrollment Authorization form on the back cover of the Dividend Reinvestment and Cash Purchase Plan Brochure to the Plan Agent. However, if your shares are held in the name of a financial institution, you should instruct your financial institution to participate in the Plan on your behalf. If your financial institution is unable to participate in the Plan for you, you should request that your shares be registered in your name, so that you may elect to participate directly in the Plan.
May I withdraw from the Plan? If your shares are held in your name and you wish to receive all dividends and capital gain distributions in cash rather than in shares, you may withdraw from the Plan without penalty at any time by contacting the Plan Agent. If your shares are held in the name of a financial institution, you should be able to withdraw from the Plan without a penalty at any time by sending written notice to your financial institution. If you withdraw, you or your financial institution will receive a share certificate for all full shares or, if you wish, the Plan Agent will sell your shares and send you the proceeds, after the deduction of brokerage commissions. The Plan Agent will convert any fractional shares to cash at the then-current market price and send you a check for the proceeds.
How are the dividends and distributions reinvested? If the market price of the Fund’s shares on the payment date should equal or exceed their net asset value per share, the Fund will issue new shares to you at the higher of net asset value or 95% of the then-current market price. If the market price is lower than the net asset value per share, the Fund will issue new shares to you at the market price. If the dividends or distributions are declared and payable as cash only, you will receive shares purchased for you by the Plan Agent on the NYSE or otherwise on the open market to the extent available.
What is the Cash Purchase feature? The Plan participants have the option of making semi-annual investments in Fund shares through the Plan Agent. You may invest any amount from $100 to $5,000 semiannually. The Plan Agent will purchase shares for you on the NYSE or otherwise on the open market on or about February 15th and August 15th of each year. Plan participants should send voluntary cash payments to be received by the Plan Agent approximately ten days before the applicable purchase date. The Plan Agent will return any cash payments received more than thirty days prior to the purchase date. You may withdraw a voluntary cash payment by written notice, if the notice is received by the Plan Agent not less than two business days before the investment date.
Is there a cost to participate? There are no Plan charges or brokerage charges for shares issued directly by the Fund. However, each participant will pay a service fee of $2.50 for each investment and a pro rata portion of brokerage commissions for shares purchased on the NYSE or on the open market by the Plan Agent.
What are the tax implications? The automatic reinvestment of dividends and distributions does not relieve you of any income tax which may be payable (or required to be withheld) on such dividends and distributions. In addition, the Plan Agent will reinvest dividends for foreign participants and for any participant subject to federal backup withholding after the deduction of the amounts required to be withheld.
Please note that, if you participate in the Plan through a brokerage account, you may not be able to continue as a participant if you transfer those shares to another broker. Contact your broker or financial institution or the Plan Agent to ascertain what is the best arrangement for you to participate in the Plan.
Shareholder Letter (unaudited)
November 6, 2009
Dear Shareholders:
We are pleased to present the Annual Report of The Singapore Fund, Inc. (the “Fund”) for the year ended October 31, 2009.
Performance Review
| USD terms | Nov’08 to Jan’09 | Feb’09 to Apr’09 | May’09 to July’09 | Aug’09 to Oct’09 |
| The Singapore Fund | –5.7 | +13.0 | +46.4 | +5.5 |
| Straits Times Index (“STI”) | –4.0 | +11.3 | +42.8 | +2.8 |
| Relative to Benchmark Index | –1.7 | +1.7 | +3.6 | +2.7 |
Source: Bloomberg L.P., NAV basis with dividends reinvested, if any.
During the fiscal year, the Fund outperformed the STI in three out of the four quarters. The Fund’s net asset value (“NAV”) (including reinvested dividends) rose 66.9%, compared to the STI’s rise of 56.9% during the fiscal year ended October 31, 2009, resulting in an outperformance of 10.0%.
The outperformance was achieved on the back of favorable stock selection in Singapore and the rest of the ASEAN region. In Singapore, our overweight position in the offshore marine, property and technology sectors contributed positively to the relative performance of the Fund. In addition, our underweight position in telecommunications and some key industrial stocks in the benchmark also added to that performance. Top contributing stocks in the Fund included Keppel Land, Venture Corporation, Wing Tai, Ezra and Olam International. Negative contributions to our performance were our underweight position in Genting Singapore, Golden Agri-Resources, Jardine Cycle & Carriage, Noble Group and our overweight position in CSE Global. Outside of Singapore, our positions in Malaysia, Indonesia and Thailand, also did well. Some of the better performing names there included Quality House, Land & House, Kuala Lumpur Kepong, Tambang Batubara Bukit Asam and Astra International.
Market Review
The U.S. financial crisis following the bankruptcy of Lehman Brothers, the forced sale of Merrill Lynch to Bank of America and the bail-out of AIG by the Federal Reserve cast a pall over the Singapore market near the end of the calendar year 2008. Market earnings were slashed due to a broad-based slowdown in business activities as a result of the ensuing credit crunch. The Monetary Authority of Singapore (“MAS”) reacted by shifting its policy to a neutral stance, thus ending a policy of modest and gradual appreciation for the trade-weighted Singapore dollar that had been in place since April 2004.
The onset of 2009 did not bring any relief to the Singapore market as it continued to come under selling pressure with foreign investors de-risking their portfolios amid the credit crunch and Asia’s declining exports. At its lowest point in early March 2009, the STI plunged more than 18% from the end of October 2008.
However, “green shoots” started emerging in the second quarter of 2009 (“2Q09”) on the back of aggressive and globally synchronized economic stimulus plans. As credit conditions began to normalize, the need to restock inventory added a boost to economic activities. Aggressive intervention by major central banks in the United States and Europe helped to stem the spread of systemic risks in the global financial markets, leading to improved risk appetite.
In February 2009, the Singapore government rolled out an expansionary budget worth SGD20.5bn to stimulate demand and to alleviate the effects of the credit crunch. The measures included 1) a Jobs Credit Scheme, which pays companies a cash grant of 12% on the first SGD2,500 of monthly wage per worker; 2) a 40% property tax rebate; 3) a one percentage-point cut in the corporate tax rate to 17%; 4) public infrastructure spending of SGD18-20b in 2009 and 5) higher government risk-sharing of up to 80% in two lending programs administered by private sector banks. To stimulate the economy, the MAS also re-centered the exchange rate downwards by 150 basis points, equivalent to a monetary easing.
By the end of the first quarter of 2009 (“ 1Q09”), the Singapore economy was in much better shape. 2Q09 and third quarter 2009 (“3Q09”) Gross Domestic Product (“GDP”) surged 22% and 14.9%, respectively quarter on quarter. Record transactions and rapidly recovering prices in the private housing sector prompted the Singapore government to announce cooling measures such as the reinstatement of the Confirmed List for its first half of 2010 land sales program and the scrapping of the Interest Absorption Scheme. It also rolled back most of the measures in Budget 2009 designed to assist the property sector.
Cyclical sectors such as property and consumer discretionary outperformed defensive sectors such as telecommunications and consumer staples.
Outlook and Strategy
| | Benchmark (%) | Portfolio (%) | Comments |
| Financial Institutions | 30.2 | 20.5 | Concern over asset quality, anemic loans growth and weakness in capital market-related fee income to cap re-rating of banks. Sector limit of 25% is applicable, and the Fund is prohibited from owning DBS Group. |
| Telecommunications | 10.7 | 11.3 | Relatively defensive sector will lag cyclical sector as the latter enjoys sharp earnings upgrade. |
| Conglomerates | 14.1 | 9.1 | Underweight due to zero weighting in large-cap defensive conglomerates such as ST Engineering and F&N. |
| Transportation | 6.2 | 2.7 | Underweight due to our negative view on air and sea transportation on weak global demand and rising fuel costs. |
| Property Development | 13.4 | 14.2 | Moving from large overweight position to more neutral stance on valuation concern. |
| Industrial | 0.3 | 7.2 | Reflects our bottom-up stock picks such as IJM, Ezra and Hyflux. |
| Consumer | 13.7 | 11.1 | Underweight due mainly to our cautious view on valuation of palm oil companies. |
| Media | 2.7 | 4.9 | Laggard company with improving earnings profile. |
| Technology | 0.00 | 7.2 | Reflects our bottom-up stock picks such as Venture, CSE and Asiatravel.com. |
| Real Estate Investment Trust | 1.7 | 2.8 | Laggard sector which has recapitalized and trades at reasonable yield. |
The Singapore market is likely to trade sideways for the rest of the calendar year, until there is greater clarity on the extent of policy tightening. The market appears to be fairly balanced on a range of factors such as positive growth recovery and improving earnings momentum on the one hand, and hefty stock gains and demanding valuations on the other hand.
In view of the weak global recovery, the MAS is not likely to raise interest rates aggressively for now. However, it has been wary of asset inflation resulting from loose monetary conditions globally. As a result, it implemented some tightening measures specific to the property sector. They have been effective in cooling off speculative activities, but with collateral negative sentiment on the stock market.
In 3Q09, 15,400 jobs were created, more than offsetting the 13,900 jobs lost in first half of the year, signaling that the job recession is behind us. A continuation of this momentum in the fourth quarter of 2009 is likely to underpin demand for mass housing, although we believe there will be limited price appreciation owing to hawkish monetary policy. We prefer real estate investment trusts (“REITs”) over property developers. With potential policy risks likely to limit the upside for Singapore residential properties, REITs are starting to look relatively more attractive. The sector has been substantially recapitalized and yields still look reasonable.
Singapore is poised to benefit from the global economic upturn with the timely launch of its two integrated resorts (IR) in early 2010. We believe direct and indirect economic benefit will flow to the hospitality, retail and other domestic service-related industries, presenting many interesting stock picking opportunities. As such, the Fund has an overweight position in IR-related companies. We are maintaining an overweight position in the offshore marine sector. The recovery of capital expenditures in the offshore marine sector should drive its order books in the coming year. Valuations are also at the low end of their historical range.
Portfolio Management
Mr. Kam Yoke Meng, CFA has been responsible for the day-to-day management of the Fund since May 2008. Yoke Meng joined DBS Asset Management Ltd., of which the Fund’s Investment Manager, DBS Asset Management (United States) Pte. Ltd., is a wholly owned subsidiary, in December 2007. Prior to this, he was the Deputy Head of Asian Equities at Lion Capital Management Limited for 14 years.
Mr. Teo Chon Kiat supports Yoke Meng as the alternate portfolio manager. Chon Kiat has been with DBS Asset Management Ltd. since 1998. Since then, he has been managing institution and retail funds.
The Fund’s management would like to thank you for your participation in The Singapore Fund, Inc. and would be pleased to hear from you.
Sincerely,
/s/ Masaaki Goto
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MASAAKI GOTO Chairman of the Board
Portfolio of Investments
October 31, 2009
| | | | | | |
| MALAYSIA—2.47% | | Electronic Components—3.78% |
| Construction—1.99% | | 767,000 | Venture Corp. Ltd. | |
| 1,854,440 | IJM Corp., Berhad | | | Food, Beverage, Tobacco—3.29% |
| Property Development—0.48% | | 2,199,500 | Olam International | |
| 1,984,400 | Eastern & Oriental | | | | Ltd. | |
| | Berhad* | | | Health & Personal Care—4.00% |
| Total Malaysia Common Stocks | | | 1,167,000 | Wilmar International | |
| SINGAPORE—87.70% | | | Ltd. | |
| Banks—18.27% | | Property Development—13.48% |
| 2,078,022 | Oversea-Chinese | | | 1,500,000 | Capitaland Ltd.† | 4,440,313 |
| | Banking Corp. Ltd. | 11,381,537 | | 370,000 | City Developments | |
| 1,031,000 | United Overseas Bank | | | | Ltd. | 2,645,597 |
| | Ltd. | | | 3,545,000 | Genting Singapore Plc., | |
| | | | | | Ltd.* | 2,737,550 |
| Commercial Services—0.40% | | 982,000 | Ho Bee Investment | |
| 260,000 | SIA Engineering Co. | | | | Ltd. | 990,040 |
| | Ltd.† | | | 1,438,000 | Hongkong Land | |
| Communications—Media—4.56% | | | Holdings, Ltd. | |
| 2,163,000 | Singapore Press | | | | | |
| | Holdings Ltd. | | | Real Estate Investment Trust—2.60% |
| Conglomerate—5.67% | | 985,000 | Ascendas Real Estate | |
| 201,600 | Jardine Matheson | | | | Investment Trust | 1,310,000 |
| | Holdings Ltd. | 6,043,968 | | 1,855,000 | CDL Hospitality Trusts | |
| 743,000 | Noble Group Ltd. | | | | | |
| | | | | Shipyards—8.19% |
| Diversified—2.88% | | 1,111,000 | Keppel Corp. Ltd. | 6,506,088 |
| 216,000 | Jardine Strategic | | | 1,700,000 | Sembcorp Marine | |
| | Holdings Ltd. | | | | Ltd.† | |
| E-Business—1.05% | | | | |
| 3,000,000 | Asiatravel.com | | | Telecommunications—10.58% |
| | Holdings Ltd.@ | | | 6,602,000 | Singapore | |
| Electrical Products & Computers—1.87% | | Telecommunications | |
| 4,290,000 | CSE Global Ltd. | | | | Ltd.† | |
See accompanying notes to financial statements.
Portfolio of Investments (concluded)
October 31, 2009
COMMON STOCKS (concluded) | | |
| | | | | | |
| Transportation—Land—2.53% | | U.S. DOLLAR—0.03% |
| 2,764,000 | SMRT Corp., Ltd.† | | | $41 | JPMorgan Chase Bank, | |
| Transportation—Marine—2.54% | | | 0.05%, due 11/2/09 | |
| 2,433,000 | Ezra Holdings Ltd.* | | | | (Cost—$41,068) | |
| Water Treatment Systems—2.01% | | Total Investments—93.48% | |
| 1,196,000 | Hyflux Ltd. | | | (Cost—$98,920,459) | 122,679,704 |
| Total Singapore Common Stocks | | | Other assets less | |
| THAILAND—3.28% | | liabilities—6.52% | |
| Banks—0.85% | | NET ASSETS (Applicable to | |
| 327,800 | Bangkok Bank Public | | | 9,477,893 shares of capital stock | |
| | Co., Ltd. (Foreign) | | | outstanding; equivalent to $13.85 | |
| Property Development—1.44% | | per share)—100.00% | |
| 25,269,100 | Quality Houses Public | | | |
| | Company Ltd. | | | *Non-income producing securities. |
| | (NVDR) | | | †Deemed to be an affiliated issuer (see page 11). |
| Retail—0.99% | | @Fair valued security. This security has been valued in good faith in a manner as prescribed by the Board of Directors. At October 31, 2009 this security had a market value of $1,383,576, representing 1.05% of net assets. |
| 2,292,100 | CP ALL Public | | |
| | Company Ltd. | | |
| | (NVDR) | | |
| Total Thailand Common Stocks | | |
| Total Common Stocks | | | |
| (Cost—$98,879,391) | | | |
See accompanying notes to financial statements.
EQUITY CLASSIFICATIONS HELD | | TEN LARGEST EQUITY POSITIONS HELD October 31, 2009 | |
| | | | | | | |
| Banks | | | 19.12 | % | Singapore Telecommunications Ltd. | | | 10.58 | % |
| Property Development | | | 15.40 | | United Overseas Bank Ltd. | | | 9.59 | |
| Telecommunications | | | 10.58 | | Oversea-Chinese Banking Corp. Ltd. | | | 8.67 | |
| Shipyards | | | 8.19 | | Hongkong Land Holdings, Ltd. | | | 5.24 | |
| Conglomerate | | | 5.67 | | Keppel Corp. Ltd. | | | 4.96 | |
| Communications—Media | | | 4.56 | | Jardine Matheson Holdings Ltd. | | | 4.61 | |
| Health & Personal Care | | | 4.00 | | Singapore Press Holdings Ltd. | | | 4.56 | |
| Electronic Components | | | 3.78 | | Wilmar International Ltd. | | | 4.00 | |
| Food, Beverage, Tobacco | | | 3.29 | | Venture Corp. Ltd. | | | 3.78 | |
| Diversified | | | 2.88 | | Capitaland Ltd. | | | 3.38 | |
| Real Estate Investment Trust | | | 2.60 | | | | | | |
| Transportation—Marine | | | 2.54 | | | | | | |
| Transportation—Land | | | 2.53 | | | | | | |
| Water Treatment Systems | | | 2.01 | | | | | | |
| Construction | | | 1.99 | | | | | | |
| Electrical Products & Computers | | | 1.87 | | | | | | |
| E-Business | | | 1.05 | | | | | | |
| Retail | | | 0.99 | | | | | | |
| Commercial Services | | | 0.40 | | | | | | |
See accompanying notes to financial statements.
Affiliated Holdings
Temasek Holdings, an Asian investment company located in Singapore, owns 28% of DBS Group, the parent of the Manager. Temasek Holdings also owns at least 25% of the following portfolio securities, which are deemed affiliated holdings because of this common ownership.
| | | Number of Shares Held October 31, | | | Purchase | | | Sales | | | Number of Shares Held October 31, | | | Market Value at October 31, | | | Dividend | |
Name of Affiliated Holding | | | | | | | | | | | | | | | | | | |
| Capitaland Ltd. | | | 1,000,000 | | | $ | 424,545 | | | $ | — | | | | 1,500,000 | | | $ | 4,440,313 | | | $ | 71,370 | |
| SIA Engineering Co. Ltd. | | | 654,000 | | | | 500,170 | | | | 1,595,966 | | | | 260,000 | | | | 520,539 | | | | 41,441 | |
| Sembcorp Industries Ltd. | | | 500,000 | | | | — | | | | 961,878 | | | | — | | | | — | | | | — | |
| Sembcorp Marine Ltd | | | 750,000 | | | | 2,434,343 | | | | 2,454,644 | | | | 1,700,000 | | | | 4,242,251 | | | | 115,532 | |
| Singapore Airlines Ltd. | | | 538,340 | | | | — | | | | 5,722,836 | | | | — | | | | — | | | | 70,456 | |
| Singapore Petroleum Co. Ltd | | | 445,000 | | | | — | | | | 2,173,750 | | | | — | | | | — | | | | — | |
| Singapore Technologies | | | | | | | | | | | | | | | | | | | | | | | | |
| Engineering Ltd. | | | 2,560,000 | | | | — | | | | 5,357,040 | | | | — | | | | — | | | | — | |
| Singapore | | | | | | | | | | | | | | | | | | | | | | | | |
| Telecommunications Ltd. | | | 6,614,000 | | | | 379,887 | | | | 343,544 | | | | 6,602,000 | | | | 13,878,574 | | | | 586,154 | |
| SMRT Corp., Ltd. | | | 3,401,000 | | | | 3,402,419 | | | | 4,533,121 | | | | 2,764,000 | | | | 3,320,239 | | | | 39,499 | |
| Total | | | | | | | | | | | | | | | | | | $ | 26,401,916 | | | $ | 924,452 | |
See accompanying notes to financial statements.
Statement of Assets and Liabilities
October 31, 2009
| | | | | | | |
| Assets | | | | | | |
| Investment in securities, at value: | | | | | | |
| Unaffiliated securities (cost—$74,961,714) | | $ | 96,277,788 | | | | |
| Affiliated securities (cost—$23,958,745) | | | 26,401,916 | | | $ | 122,679,704 | |
| Cash denominated in foreign currency (cost—$5,986,861) | | | | | | | 5,970,159 | |
| Receivable for securities sold | | | | | | | 3,515,064 | |
| Interest and dividends receivable | | | | | | | 9,768 | |
| Prepaid expenses | | | | | | | 26,112 | |
| Total assets | | | | | | | 132,200,807 | |
| Liabilities | | | | | | | | |
| Payable for securities purchased | | | | | | | 659,898 | |
| Payable for management fees | | | | | | | 79,805 | |
| Payable for advisory fees | | | | | | | 40,597 | |
| Payable for other affiliates | | | | | | | 33,348 | |
| Audit and tax services | | | | | | | 80,425 | |
| Legal fees | | | | | | | 24,206 | |
| Accrued expenses and other liabilities | | | | | | | 52,425 | |
| Total liabilities | | | | | | | 970,704 | |
| Net Assets | | | | | | $ | 131,230,103 | |
| | | | | | | | | |
| Net Assets consist of: | | | | | | | | |
| Capital stock, $0.01 par value per share; total 100,000,000 shares authorized; 9,477,893 shares issued and outstanding | | | | | | $ | 94,779 | |
| Paid-in capital in excess of par value | | | | | | | 108,916,023 | |
| Undistributed net investment income | | | | | | | 1,646,961 | |
| Accumulated net realized loss on investments | | | | | | | (3,173,673 | ) |
| Net unrealized appreciation on investments and other assets and liabilities denominated in foreign currency | | | | | | | 23,746,013 | |
| Net assets applicable to shares outstanding | | | | | | $ | 131,230,103 | |
| Net Asset Value Per Share | | | | | | $ | 13.85 | |
See accompanying notes to financial statements.
Statement of Operations
For the Year Ended October 31, 2009
| Investment income: | | | | | | |
| Dividends: | | | | | | |
| Unaffiliated securities (net of withholding taxes of—$82,784) | | $ | 2,821,185 | | | | |
| Affiliated securities | | | 924,452 | | | $ | 3,745,637 | |
| Interest | | | | | | | 335 | |
| Total investment income | | | | | | | 3,745,972 | |
| Expenses: | | | | | | | | |
| Investment management fee | | | | | | | 708,767 | |
| Investment advisory fee | | | | | | | 359,062 | |
| Administration fee | | | | | | | 299,788 | |
| Custodian fees and expenses | | | | | | | 102,546 | |
| Audit and tax services | | | | | | | 95,525 | |
| Legal fees and expenses | | | | | | | 57,380 | |
| Directors’ fees and expenses �� | | | | | | | 55,424 | |
| Reports and notices to shareholders | | | | | | | 48,513 | |
| Insurance expense | | | | | | | 38,828 | |
| Transfer agency fee and expenses | | | | | | | 11,568 | |
| Other | | | | | | | 111,445 | |
| Total expenses | | | | | | | 1,888,846 | |
| Net investment income | | | | | | | 1,857,126 | |
| Realized and unrealized gains (losses) from investment activities and foreign currency transactions: | | | | | | | | |
| Net realized gains (losses) on investments: | | | | | | | | |
| Unaffiliated securities | | | 6,130,820 | | | | | |
| Affiliated securities | | | (8,414,846 | ) | | | (2,284,026 | ) |
| Net realized foreign currency transaction losses | | | | | | | (18,519 | ) |
| Net change in unrealized appreciation on investments in equity securities: | | | | | | | | |
| Unaffiliated securities | | | 50,138,109 | | | | | |
| Affiliated securities | | | 2,443,171 | | | | 52,581,280 | |
Net change in unrealized appreciation on short-term investments and other assets and liabilities denominated in foreign currency | | | | | | | 7,418 | |
| Net realized and unrealized gains from investment activities and foreign currency transactions | | | | | | | 50,286,153 | |
| Net increase in net assets resulting from operations | | | | | | $ | 52,143,279 | |
See accompanying notes to financial statements.
Statement of Changes in Net Assets
| | | For the Years Ended October 31, | |
| | | | | | | |
| Increase (decrease) in net assets from operations: | | | | | | |
| Net investment income | | $ | 1,857,126 | | | $ | 2,509,368 | |
| Net realized gain (loss) on: | | | | | | | | |
| Investments | | | (2,284,026 | ) | | | 8,448,223 | |
| Foreign currency transactions | | | (18,519 | ) | | | (531,798 | ) |
| Net change in unrealized appreciation (depreciation) on: | | | | | | | | |
| Investments in equity securities | | | 52,581,280 | | | | (126,994,416 | ) |
| Translation of short-term investments and other assets and liabilities denominated in foreign currency | | | 7,418 | | | | (59,874 | ) |
| Net increase (decrease) in net assets resulting from operations | | | 52,143,279 | | | | (116,628,497 | ) |
| Dividends and distributions to shareholders from: | | | | | | | | |
| Net realized gains from investment and foreign currency transactions | | | (4,363,211 | ) | | | (1,391,125 | ) |
| Net investment income | | | (318,346 | ) | | | (12,160,949 | ) |
| Total dividends and distributions to shareholders | | | (4,681,557 | ) | | | (13,552,074 | ) |
| From capital stock transactions: | | | | | | | | |
| Sale of capital stock resulting from: | | | | | | | | |
| Reinvestment of dividends �� | | | 867,729 | | | | 1,358,076 | |
| Net increase (decrease) in net assets | | | 48,329,451 | | | | (128,822,495 | ) |
| Net assets: | | | | | | | | |
| Beginning of year | | | 82,900,652 | | | | 211,723,147 | |
| End of year (including undistributed net investment income and accumulated net investment loss of $1,646,961 and $(665,857), respectively) | | $ | 131,230,103 | | | $ | 82,900,652 | |
See accompanying notes to financial statements.
Notes to Financial Statements
Organization and Significant Accounting Policies
The Singapore Fund, Inc. (the “Fund”) was incorporated in Maryland on May 31, 1990 and commenced operations on July 31, 1990. It is registered with the Securities and Exchange Commission as a closed-end, non-diversified management investment company.
The following significant accounting policies are in conformity with generally accepted accounting principles in the Unites States of America (“GAAP”) for investment companies. Such policies are consistently followed by the Fund in the preparation of its financial statements. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts and disclosures in the financial statements. Actual reporting results could differ from those estimates.
Valuation of Investments—Securities which are listed on foreign stock exchanges and for which market quotations are readily available are valued at the last sale price on the exchange on which the securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales on such day, at the closing price quoted for such securities. However, if bid and asked quotations are available, such securities are valued at the mean between the last current bid and asked prices, rather than at such quoted closing price. Securities that are traded over-the-counter, if bid and asked price quotations are available, are valued at the mean between the current bid and asked prices, or, if such quotations are not available, are valued as determined in good faith by the Board of Directors (the “Board”) of the Fund. In instances where quotations are not readily available or where the price as determined by the above procedures is deemed not to represent fair market value, fair value will be determined in such manner as the Board may prescribe. Short-term investments having maturity of 60 days or less are valued at amortized cost, except where the Board determines that such valuation does not represent the fair value of the investment. All other securities and assets are valued at fair value as determined in good faith by, or under the direction of, the Board.
Foreign Currency Translation—The books and records of the Fund are maintained in U.S. dollars as follows: (1) the foreign currency market value of investment securities and other assets and liabilities stated in foreign currencies are translated at the exchange rates prevailing at the end of the period; and (2) purchases, sales, income and expenses are translated at the rate of exchange prevailing on the respective dates of such transactions. The resulting exchange gains and losses are included in the Statement of Operations. The Fund does not isolate the effect of fluctuations in the market price of securities. The Fund intends to determine net asset value based on valuations made as of 5:00 p.m., Singapore time and 5:00 p.m. London time for foreign exchange rates, on each day.
Tax Status—The Fund intends to continue to distribute substantially all of its taxable income and to comply with the minimum distribution and other requirements of the Internal Revenue Code of 1986 applicable to regulated investment companies. Accordingly, no provision for federal income or excise taxes is required. The Fund is not aware of any tax position for which it is reasonably possible that the total amount of unrecognized tax benefits will significantly change in the next twelve months. The Fund’s federal tax returns for the prior three fiscal years remain subject to examination by the Internal Revenue Service. During the year ended October 31, 2009, the Fund was subject to withholding tax, ranging from 0% to 25%, on certain income from its investments.
Notes to Financial Statements (continued)
The Fund continues to meet the conditions required to qualify for the exemption from Singapore income tax, available to non-Singapore residents who are beneficiaries of funds managed by approved fund managers, in respect of certain types of income. Accordingly, no provision for Singapore income tax is required.
Investment Transactions and Investment Income—Investment transactions are recorded on the trade date (the date upon which the order to buy or sell is executed). Realized and unrealized gains and losses from security and foreign currency transactions are calculated on the identified cost basis. Dividend income and corporate actions are recorded on the ex-date, except for certain dividends and corporate actions involving foreign securities which may be recorded after the ex-date, as soon as the Fund acquires information regarding such dividends or corporate actions. Interest income is recorded on an accrual basis.
Dividends and Distributions to Shareholders—The Fund records dividends and distributions payable to its shareholders on the ex-dividend date. The amount of dividends and distributions from net investment income and net realized capital gains are determined in accordance with federal income tax regulations, which may differ from GAAP. These book basis/tax basis (“book/tax”) differences are either considered temporary or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassifications. Dividends and distributions which exceed net investment income and net realized capital gains for tax purposes are reported as distributions of paid-in-capital.
Forward Foreign Currency Contracts—The Fund may enter into forward foreign currency exchange contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of its assets denominated in a particular currency, subject to a maximum limitation of 20% of the value of its total assets committed to the consummation of such forward foreign currency contracts. In addition, the Fund will not take positions in foreign forward currency contracts where the settlement commitment exceeds the value of its assets denominated in the currency of the contract. If the Fund enters into forward foreign currency contracts, its custodian or subcustodian will maintain cash or readily marketable securities in a segregated account of the Fund in an amount equal to the value of the Fund’s total assets committed to the consummation of such contracts. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. There were no forward foreign currency contracts held in the portfolio as of October 31, 2009.
Fair Value Measurements—In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the Fund discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows:
Notes to Financial Statements (continued)
Level 1—Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access at the measurement date;
Level 2—Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly, including inputs in markets that are not considered to be active;
Level 3—Inputs that are unobservable.
A financial instrument’s level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes “observable” requires significant judgment by the Investment Manager. The Investment Manager considers observable data to be market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.
The following is a summary of the inputs used as of October 31, 2009 in valuing the Fund’s investments carried at value:
| Investments in Securities | Other Financial Instruments |
| Level 1—Quoted Prices | $122,679,704 | — |
| Level 2—Other Significant Observable Inputs. | — | — |
| Level 3—Significant Unobservable Inputs | | |
| Total | | |
As all assets of the Fund are classified as Level 1, no reconciliation of Level 3 assets as of October 31, 2009 is presented.
All portfolio holdings designated as Level 1 are disclosed individually in the Portfolio of Investments (POI). Please refer to the POI for industry specifics of the portfolio holdings.
Investment Manager and Investment Adviser
The Fund has entered into an Investment Management Agreement (the “Management Agreement”) with DBS Asset Management (United States) Pte. Ltd. (the “Manager”). Pursuant to the Management Agreement, the Manager makes investment management decisions relating to the Fund’s assets. For such services, the Fund pays the Manager a monthly fee at an annual rate of 0.80% of the first $50 million of the Fund’s average weekly net assets and 0.66% of the Fund’s average weekly net assets in excess of $50 million. In addition, as permitted by the Management Agreement, the Fund reimburses the Manager for its out-of-pocket expenses related to the Fund. During the year ended October 31, 2009, no out-of-pocket expenses were paid to the Manager.
Notes to Financial Statements (continued)
The Fund has entered into an Investment Advisory Agreement (the “Advisory Agreement”) with Daiwa SB Investments (Singapore) Limited (the “Adviser”), which provides general and specific investment advice to the Manager with respect to the Fund’s assets. The Fund pays the Adviser a monthly fee at an annual rate of 0.40% of the first $50 million of the Fund’s average weekly net assets and 0.34% of the Fund’s average weekly net assets in excess of $50 million. In addition, as permitted by the Advisory Agreement, the Fund reimburses the Adviser for its out-of-pocket expenses related to the Fund. During the year ended October 31, 2009, no out-of-pocket expenses were paid to the Adviser.
At October 31, 2009, the Fund owed to the Manager and the Adviser $79,805 and $40,597 for management and advisory fees, respectively.
Administrator and Custodian and Other Related Parties
Daiwa Securities Trust Company (“DSTC”), an affiliate of the Adviser, provides certain administrative services to the Fund. For such services, the Fund pays DSTC a monthly fee at an annual rate of 0.20% of the Fund’s average weekly net assets, with a minimum fee of $150,000. In addition, as permitted by the Administration Agreement, the Fund reimburses the Administrator for its out-of-pocket expenses related to the Fund. During the year ended October 31, 2009, no out-of-pocket expenses were paid to the Administrator.
The Board of Directors of the Fund has also approved the payment of the administrative compliance expense for the Fund in the amount of $104,000 per annum to DSTC, for services provided by DSTC staff in implementing the Fund’s compliance management system and the Fund’s compliance review program. This amount is included in the administration fee in the Fund’s Statement of Operations.
DSTC also acts as custodian for the Fund’s assets and appoints subcustodians for the Fund’s assets held outside of the United States. DSTC has appointed DBS Bank Ltd. (“DBS Bank”), an affiliate of the Manager, to act as the subcustodian for all of the cash and securities of the Fund held in Singapore. As compensation for its services as custodian, DSTC receives a monthly fee and reimbursement of out-of-pocket expenses related to the Fund. Such expenses include the fees and out-of-pocket expenses of each of the subcustodians. During the year ended October 31, 2009, DSTC earned $29,194 and DBS Bank earned $69,631 from the Fund for their respective custodial services.
At October 31, 2009, the Fund owed to DSTC $22,382, $8,667 and $33,876 for administration, compliance and custodian fees, respectively. The latter amount includes fees and expenses payable to DBS Bank totaling $31,576.
During the year ended October 31, 2009, the Fund paid or accrued $57,380 for legal services, in connection with the Fund’s on-going operations, to a law firm to which the Fund’s Assistant Secretary is a consultant.
Notes to Financial Statements (continued)
Investments in Securities and Federal Income Tax Matters
For federal income tax purposes, the cost of securities owned at October 31, 2009 was $99,610,785, excluding short-term interest-bearing investments. At October 31, 2009, the net unrealized appreciation on investments, excluding short-term securities, of $23,027,851 was composed of gross appreciation of $24,622,426 for those investments having an excess of value over cost, and gross depreciation of $1,594,575 for those investments having an excess of cost over value. For the year ended October 31, 2009, the total aggregate cost of purchases and net proceeds from sales of portfolio securities, excluding the short-term securities, were $90,672,336 and $92,380,231, respectively.
In order to present amounts of undistributed net investment income and accumulated net realized loss on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to undistributed net investment income and accumulated net realized loss on investments.
For the year ended October 31, 2009, the adjustments were to increase net investment income by $774,037 and increase undistributed net realized loss by $774,037 primarily related to the reclassification of realized foreign currency transactions, investments in passive foreign investment companies and sales of securities which received return of capital dividends. Net investment income, net realized losses and net assets were not affected by this change.
The tax basis components of distributable earnings differ from the amounts reflected in the Statement of Assets and Liabilities by temporary book/tax differences primarily arising from wash sales, investments in passive foreign investment companies and return of capital adjustments. As of October 31, 2009, the components of accumulated earnings (deficit) on a tax basis were as follows:
| Accumulated Net Realized Loss | Unrealized Appreciation/(Depreciation) |
| $2,237,915 | $(3,033,233) | $23,014,619 |
The tax character of distributions paid was as follows:
| | | | | | | |
| Ordinary Income | | $ | 317,137 | | | $ | 12,118,476 | |
| Long-term Capital Gains | | | 4,364,420 | | | | 1,433,598 | |
| Total | | $ | 4,681,557 | | | $ | 13,552,074 | |
At October 31, 2009, the Fund had a capital loss carryforward of $3,033,233, which expires in the year 2017, available to offset future net capital gains.
Concentration of Risk
Investments in countries in which the Fund may invest may involve certain considerations and risks not typically associated with U.S. investments as a result of, among others, the possibility of future political and economic developments and the level of governmental supervision and regulation of the securities markets in which the Fund invests.
Notes to Financial Statements (concluded)
At October 31, 2009, the Fund had 7,268,921 Singapore Dollars valued at $5,197,469 (3.96% of net assets) and 2,636,805 Malaysian Ringgits valued at $772,690 (0.59% of net assets) on deposit with a single financial institution.
Capital Stock
There are 100,000,000 shares of $0.01 par value common stock authorized. During the year ended October 31, 2009, 114,779 shares were issued on December 30, 2008 at the reinvestment price of $7.56. The net asset value per share on that date was $8.46. Of the 9,477,893 shares outstanding at October 31, 2009, Daiwa Securities America, Inc., an affiliate of the Adviser and DSTC, owned 18,548 shares.
Subsequent Event
On December 11, 2009, a dividend was declared by the Board. The distribution of $0.26 per share is payable on December 30, 2009, to shareholders of record at the close of business on December 22, 2009. The ex-dividend date is December 18, 2009.
Management has evaluated subsequent transactions and events after the balance sheet date through December 21, 2009, the date on which these financial statements were issued and, except as already included in the notes to the financial statements, has determined that no additional items require disclosure.
Selected data for a share of capital stock outstanding during each year is presented below:
| | | For the Years Ended October 31, | |
| | | | | | | | | | | | | | | | |
| Net asset value, beginning of year | | $ | 8.85 | | | $ | 22.83 | | | $ | 14.55 | | | $ | 10.54 | | | $ | 10.20 | |
| Net investment income(b) | | | 0.20 | | | | 0.27 | | | | 0.16 | | | | 0.34 | | | | 0.16 | |
| Net realized and unrealized gains (losses) on investments and foreign currency transactions(b) | | | 5.31 | | | | (12.77 | ) | | | 8.61 | | | | 3.84 | | | | 0.40 | |
| Net increase (decrease) in net asset value resulting from operations | | | 5.51 | | | | (12.50 | ) | | | 8.77 | | | | 4.18 | | | | 0.56 | |
| Less: dividends and distributions to shareholders | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (0.03 | ) | | | (1.31 | ) | | | (0.49 | ) | | | (0.17 | ) | | | (0.22 | ) |
| Net realized gains on investments and foreign currency transactions | | | (0.47 | ) | | | (0.15 | ) | | | — | | | | — | | | | — | |
| Total dividends and distributions to shareholders | | | (0.50 | ) | | | (1.46 | ) | | | (0.49 | ) | | | (0.17 | ) | | | (0.22 | ) |
| Dilutive effect of dividend reinvestment | | | (0.01 | ) | | | (0.02 | ) | | | — | | | | — | | | | — | |
| Net asset value, end of year | | $ | 13.85 | | | $ | 8.85 | | | $ | 22.83 | | | $ | 14.55 | | | $ | 10.54 | |
| Per share market value, end of year | | $ | 12.45 | | | $ | 8.04 | | | $ | 20.72 | | | $ | 13.34 | | | $ | 9.29 | |
| | | | | | | | | | | | | | | | | | | | | |
| Total investment return:(a) | | | | | | | | | | | | | | | | | | | | |
| Based on market price at beginning and end of year, assuming reinvestment of dividends | | | 65.09 | % | | | (57.49 | )% | | | 60.26 | % | | | 45.98 | % | | | 11.80 | % |
| Based on net asset value at beginning and end of year, assuming reinvestment of dividends | | | 66.85 | % | | | (57.53 | )% | | | 61.90 | % | | | 40.34 | % | | | 5.95 | % |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of year (in millions) | | $ | 131.2 | | | $ | 82.9 | | | $ | 211.7 | | | $ | 134.5 | | | $ | 97.1 | |
| Ratios to average net assets of: | | | | | | | | | | | | | | | | | | | | |
| Expenses, excluding tax applicable to net investment income | | | 1.95 | % | | | 1.79 | % | | | 1.61 | % | | | 1.86 | % | | | 1.81 | % |
| Expenses, including tax applicable to net investment income . | | | 2.03 | % | | | 1.82 | % | | | 2.01 | % | | | — | | | | — | |
| Net investment income | | | 1.91 | % | | | 1.66 | % | | | 0.86 | % | | | 2.74 | % | | | 1.47 | % |
| Portfolio turnover | | | 98.17 | % | | | 94.08 | % | | | 34.78 | % | | | 45.28 | % | | | 34.85 | % |
| (a) | Total investment return based on market value is calculated assuming that shares of the Fund’s common stock were purchased at the closing market price as of the beginning of the year, dividends, capital gains and other distributions were reinvested as provided for in the Fund’s dividend reinvestment plan and then sold at the closing market price per share on the last day of the period. The computation does not reflect any sales commission investors may incur in purchasing or selling shares of the Fund. The total investment return based on the net asset value is similarly computed except that the Fund’s net asset value is substituted for the closing market value. |
| (b) | Calculated based on average shares outstanding. |
Report of Independent Registered Public Accounting Firm
To the Shareholders and
Board of Directors of
The Singapore Fund, Inc.
In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of The Singapore Fund, Inc. (the “Fund”) at October 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
December 21, 2009
Tax Information (unaudited)
The Fund is required by Subchapter M of the Internal Revenue Code of 1986, as amended, to advise you within 60 days of the Fund’s fiscal year end (October 31, 2009) as to the federal tax status of any distributions received by you during such fiscal year.
During the year ended October 31, 2009 the Fund designated $4,364,420 of the distribution as a long-term capital gain distribution.
On December 11, 2009, the Board of Directors of the Fund approved a total distribution of $0.26 per share which represents a dividend from ordinary income.
There is no foreign tax deduction or credit available to shareholders for calendar year 2009.
The information reported herein may differ from the information and distributions taxable to the shareholders for the calendar year ending December 31, 2009. The information necessary to complete your income tax returns will be included with your Form 1099-DIV to be received under separate cover in January 2010.
Shareholders are strongly advised to consult their own tax advisors with respect to the tax consequences of their investment in the Fund.
Information Concerning Directors and Officers (unaudited)
The following table sets forth information concerning each of the Directors and Officers of the Fund. The Directors of the Fund will serve for terms expiring on the date of subsequent Annual Meetings of Stockholders in the year 2010 for Class I Directors, 2011 for Class II Directors and 2012 for Class III Directors, or until their successors are duly elected and qualified.
| Principal Occupation or Employment During Past Five Years and Directorships in Publicly Held Companies | Director or Officer of Fund Since | Number of Funds in Fund Complex for Which Director Serves (1) |
Directors | | | |
Austin C. Dowling (77) 672 Medford Leas Medford, NJ 08055 | Retired; Director, The Thai Capital Fund, Inc., since 1990; Director, The Japan Equity Fund, Inc., since 1992. | Class III Director since 2000 | 3 |
Martin J. Gruber (72) 229 South Irving Street Ridgewood, NJ 07450 | Professor of Finance, Leonard N. Stern School of Business, New York University, since 1965; Director, The Thai Capital Fund, Inc., since 2000; Director, The Japan Equity Fund, Inc., since 1992; Trustee, DWS Scudder Mutual Funds, from 1992 to 2008; Trustee, C.R.E.F., from 2001 to 2005 and Chairman from 2003 to 2005; Director, National Bureau of Economic Research, since 2005. | Class II Director since 2000 | 3 |
David G. Harmer (66) 10911 Ashurst Way Highlands Ranch, CO 80130-6961 | Retired; Director of Community and Economic Development, City of Ogden, from July 2005 to October 2008; Public Services Department Director, City of Ogden, from February 2005 to July 2005; Executive Director, Department of Community and Economic Development for the State of Utah, from May 2002 to January 2005; Director, The Thai Capital Fund, Inc., since 2000; Director, The Japan Equity Fund, Inc., since 1997. | Class I Director since 1996 | 3 |
Richard J. Herring (63) 327 South Roberts Road Bryn Mawr, PA 19010 | Jacob Safra Professor of International Banking and Professor, Finance Department, The Wharton School, University of Pennsylvania, since 1972; Co-Director, Wharton Financial Institutions Center, since 2000; Director, Lauder Institute of International Management Studies, from 2000 to 2006; Director, The Thai Capital Fund, Inc., since 2007; Director, The Japan Equity Fund, Inc., since 2007; Trustee, DWS Scudder Mutual Funds, since 1990; Co-chair of the Shadow Financial Regulatory Committee, since 2000; Executive Director of the Financial Economists Roundtable, since 2008. | Class II Director since 2007 | 3 |
Rahn K. Porter (55) 944 East Rim Road Franktown, CO 80116 | Senior Vice President and Treasurer, Qwest Communications International Inc., since June 2008; Senior Vice President of Investor Relations, Qwest Communications International Inc., from September 2007 to June 2008; Vice President of Finance, Qwest Communications International Inc., from 2003 to 2007; Director, The Japan Equity Fund, Inc., since 2007; Director, The Thai Capital Fund, Inc., since 2007. | Class I Director since 2007 | 3 |
Information Concerning Directors and Officers (unaudited) (concluded)
Name (Age) and Address of Directors/Officers | Principal Occupation or Employment During Past Five Years and Directorships in Publicly Held Companies | Director or Officer of Fund Since | Number of Funds in Fund Complex for Which Director Serves (1) |
*Masaaki Goto (49) Daiwa Securities America Inc. Financial Square 32 Old Slip New York, NY 10005 | Chairman and Corporate Executive Officer, Daiwa America Corporation, since April 2009; Head of Corporate Communication Department, Daiwa Securities Group Inc., from April 2006 to April 2009; Corporate Executive Officer and Chief legal Officer, Daiwa Securities Group Inc., from April 2007 to April 2009; General Manager, Daiwa Securities Group Inc., from October 2006 to April 2007; General Manager and Head of Structured Finance department. Daiwa Securities SMBC Co. Ltd., from October 2005 to October 2006. | Chairman of the Board and Class III Director since 2009 | 2 |
Officers | | | |
John J. O’Keefe (50) One Evertrust Plaza Jersey City, NJ 07302-3051 | Vice President, Fund Accounting Department, Daiwa Securities Trust Company, since 2000; Vice President and Treasurer, The Thai Capital Fund, Inc. and The Japan Equity Fund, Inc., since 2000. | Vice President and Treasurer of the Fund since 2000 | ─ |
Yuko Tatezawa (31) One Evertrust Plaza Jersey City, NJ 07302-3051 | Vice President, Daiwa Securities Trust Company, since October 2008; Client Reporting Department of Daiwa Securities Trust Company, from 2002 to 2008; Secretary, The Thai Capital Fund, Inc. and The Japan Equity Fund, Inc., since 2004. | Secretary of the Fund since 2004 | ─ |
Anthony Cambria (55) One Evertrust Plaza Jersey City, NJ 07302-3051 | Director and Executive Vice President, Daiwa Securities Trust Company, since 1999; Chief Compliance Officer, The Thai Capital Fund, Inc. and The Japan Equity Fund, Inc., since 2004. | Chief Compliance Officer of the Fund since 2004 | ─ |
Leonard B. Mackey, Jr. (58) 31 West 52nd Street New York, NY 10019-6131 | Consultant since 2007 and Partner from 1983 to 2007 in the law firm of Clifford Chance US LLP; Assistant Secretary, The Thai Capital Fund, Inc. and The Japan Equity Fund, Inc., since 2004. | Assistant Secretary of the Fund since 2004 | ─ |
| 1 | “Fund Complex” includes the Fund, The Thai Capital Fund, Inc. and The Japan Equity Fund, Inc., which are the only registered investment companies advised by SCB Asset Management Co., Ltd., Daiwa SB Investments (Singapore) Ltd., DBS Asset Management (United States) Pte. Ltd., Daiwa SB Investments (USA) Ltd., Daiwa SB Investments Ltd. or their respective affiliates. |
| * | Director so noted is deemed by the Fund’s counsel to be “interested person” (as defined in the U.S. Investment Company Act of 1940, as amended). Mr. Goto is deemed an interested person of the Fund because of his affiliation with Daiwa Securities America Inc., an affiliate of the Fund’s investment adviser, Daiwa SB Investments (Singapore) Ltd. |
Board Consideration and Approval of Investment Advisory
and Management Agreements (unaudited)
Nature, Extent and Quality of Services
At a meeting (the “Meeting”) of the Board of Directors of The Singapore Fund, Inc. held on June 1, 2009, the Board reviewed and considered the nature and extent of the investment advisory services provided by Daiwa SB Investments (Singapore) Ltd. (the “Investment Adviser”) under the Advisory Agreement and DBS Asset Management (United States) Pte. Ltd. (the “Investment Manager” and, together with the Investment Adviser, the “Advisers”) under the Investment Management Agreement. The Board reviewed and considered the qualifications of the portfolio manager, the senior administrative managers and other key personnel of the Investment Manager who provide the investment advisory services to the Fund. The Board determined that the portfolio manager and key personnel of the Investment Manager are qualified by education and/or training and experience to perform the services in an efficient and professional manner. The Board also reviewed the services provided to the Fund by the Investment Adviser and the personnel of the Investment Adviser who provide those services. The Board concluded that the nature and extent of the advisory services provided were necessary and appropriate for the conduct of the business and investment activities of the Fund. The Board also concluded that the over- all quality of the advisory services was satisfactory.
Performance Relative to the Fund’s Benchmark
The Board reviewed the Fund’s performance for the last one-, three- and five-year periods, as well as for the last 20 quarters, as provided in the materials distributed to the Board prior to the Meeting, compared to the Fund’s benchmark, the Straits Times Index. The Board noted that the Fund underperformed the Fund’s benchmark for the last one-, three- and five-year periods. The Board discussed with the Advisers the reasons for the underperformance in these periods. The Board further noted that, for the last 20 quarters, the Fund’s performance varied as compared to the benchmark, however, the Fund generally performed in line with the benchmark, although underperforming the benchmark more often than outperforming. The Board concluded that the Fund’s overall performance was satisfactory compared to its benchmark.
Fees Relative to Other Funds Advised by the Advisers
The Board reviewed the advisory fees paid by the Fund under the Advisory Agreement and the Investment Management Agreement (together, the “advisory fees”). The Board also reviewed information showing the advisory fees paid by other funds managed by each of the Advisers as compared to the advisory fees paid by the Fund. The Board noted that while the Investment Manager and the Investment Adviser do not manage any other U.S. registered funds, the Investment Manager does advise approximately 22 other closed- and open-end funds that all have an advisory fee that is higher than the Fund except for two funds, and the Investment Adviser advises approximately seven other accounts that all have advisory fees that are lower than the Fund. The Board concluded that the advisory fees paid by the Fund were appropriate as compared to other funds advised by the Advisers.
Fees and Expenses Relative to Comparable Funds Managed by Other Advisers
The Board examined the advisory fees paid to other closed-end funds investing in a single country. While the fees vary widely, the advisory fees rate paid to the Fund falls generally in the middle of the range of fees paid to other closed-end funds investing in a single country. The Board concluded that the Fund’s advisory fees were competitive with these other country funds. The Board also noted that the total expense ratio of the Fund was in the middle of the range of total expense ratios of other closed-end funds investing in a single country. The Board concluded that the Fund’s total expense ratio was satisfactory.
Breakpoints and Economies of Scale
The Board reviewed the structure of the Fund’s advisory fee schedules under the Advisory Agreement and Investment Management Agreement and noted that it does include breakpoints. The Board considered that the Fund is closed-end. The Board concluded that economies of scale for the Fund were not a factor that needed to be considered at the current asset levels.
Profitability of the Advisers
The Board considered and reviewed a profitability report for each of the Advisers for the last year included in the materials previously provided to the Board. Based on its review of the information it received, the Board concluded that the profits earned by each Adviser were not excessive in light of the advisory services provided to the Fund.
Advisers Financially Sound and Financially Capable of Meeting the Fund’s Needs
The Board considered whether each of the Advisers is financially sound and has the resources necessary to perform its obligations under the Advisory Agreement and Investment Management Agreement to which it is a party. The Board noted that each Adviser’s operations remain profitable. The Board concluded that each of the Advisers has the financial resources necessary to fulfill its obligations under the Advisory Agreement and Investment Management Agreement to which it is a party.
Historical Relationship Between the Fund and the Advisers
The Board also reviewed and considered the historical relationship between the Fund and the Advisers, including the organizational structure of each of the Advisers, the policies and procedures formulated and adopted by each of the Advisers for managing the Fund’s assets and the Board’s confidence in the competence and integrity of the senior managers and key personnel of each of the Advisers. The Board concluded that it is beneficial for the Fund to continue its relationship with the Advisers.
Other Factors and Current Trends
The Board considered the controls and procedures adopted and implemented by each of the Advisers and monitored by the Fund’s Chief Compliance Officer and concluded that the conduct of business by each of the Advisers indicates a good faith effort on its part to adhere to high ethical standards.
Board Consideration and Approval of Investment Advisory and Management Agreements (unaudited) (concluded)
General Conclusion
After considering and weighing all of the above factors, the Board concluded it would be in the best interests of the Fund and its shareholders to approve renewal of each of the Advisory Agreement and Investment Management Agreement for another year.
BOARD OF DIRECTORS Masaaki Goto, Chairman Austin C. Dowling Martin J. Gruber David G. Harmer Richard J. Herring Rahn K. Porter | | THE SINGAPORE FUND, INC. Annual Report October 31, 2009 |
OFFICERS John J. O’Keefe Vice President and Treasurer Yuko Tatezawa Secretary Anthony Cambria Chief Compliance Office Leonard B. Mackey, Jr. Assistant Secretary | |
ADDRESS OF THE FUND c/o Daiwa Securities Trust Company One Evertrust Plaza, 9th Floor Jersey City, NJ 07302-3051 | |
INVESTMENT MANAGER DBS Asset Management (United States) Pte. Ltd. INVESTMENT ADVISER Daiwa SB Investments (Singapore) Ltd. ADMINISTRATOR AND CUSTODIAN Daiwa Securities Trust Company TRANSFER AGENT AND REGISTRAR American Stock Transfer & Trust Company LEGAL COUNSEL Clifford Chance US LLP INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP | |
| Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that from time to time the Fund may purchase shares of its common stock in the open market at prevailing market prices. This report is sent to shareholders of the Fund for their information. It is not a prospectus, circular or representation intended for use in the purchase or sale of shares of the Fund or of any securities mentioned in the report. | |
Item 2. Code of Ethics.
| (a) | The registrant has adopted a code of ethics (the "Code of Ethics") that applies to the registrant's principal executive officer and principal financial and accounting officer. A copy of the registrant's Code of Ethics is attached hereto as Exhibit 12(a). |
| (b) | No information need be disclosed pursuant to this paragraph. |
| (c) | The registrant has not amended the Code of Ethics during the period covered by the shareholder report presented in Item 1 hereto. |
| (d) | The registrant has not granted a waiver or an implicit waiver from a provision of its Code of Ethics during the period covered by this report. |
| (f) | (1) The Code of Ethics is attached hereto as Exhibit (a)(1). |
(2) Not applicable.
(3) Not applicable.
Item 3. Audit Committee Financial Expert.
The registrant's board of directors has determined that the registrant has at least one audit committee financial expert serving on its audit committee. The audit committee financial expert is Rahn K. Porter who is "independent" for purposes of this item.
Item 4. Principal Accountant Fees and Services.
(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:
| Fiscal year ended October 31, 2009 | | |
| | Registrant | Covered Entities(1) |
Audit Fees | $ 84,775 | N/A |
| | | |
Non-Audit Fees | | |
Audit-Related Fees | – | – |
Tax Fees | $ (2)10,650 | – |
All Other Fees | – | – |
Total Non-Audit Fees | $ 10,650 | – |
| | | |
Total | $ 95,425 | – |
| | | |
Fiscal year ended October 31, 2008 | | |
| | Registrant | Covered Entities(1) |
Audit Fees | $ 84,775 | N/A |
| | | |
Non-Audit Fees | | |
Audit-Related Fees | – | – |
Tax Fees | $ 10,650(2) | – |
All Other Fees | – | – |
Total Non-Audit Fees | $ 10,650 | – |
| | | |
Total | $ 95,425 | – |
| | | |
| | N/A- Not applicable, as not required by Item 4. |
| | (1) | "Covered Entities" include the registrant's investment adviser (excluding any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and any entity controlling, controlled by or under common control with the registrant's investment adviser that provides ongoing services to the registrant. |
| | (2) | Tax Fees represent fees received for tax compliance services provided to the registrant, including the review of tax returns. |
| (e) | | | Before the registrant's principal accountant is engaged to render audit or non-audit services to the registrant and non-audit services to the registrant's investment adviser and its affiliates, each engagement is approved by the registrant's audit committee. |
| (e) | | | 100% of the services described in each of (b) through (d) of this Item 4 were approved by the registrant's audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X. |
(f) Not applicable.
| (h) | The registrant's audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to Covered Entities that were not pre-approved pursuant to paragraph (C)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the auditors' independence in performing audit services. |
Item 5. Audit Committee of Listed Registrants.
The registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are as follows: Austin C. Dowling, Martin J. Gruber, David G. Harmer, Richard J. Herring and Rahn K. Porter.
Item 6. Schedule of Investments.
A Schedule of Investments is included as part of the report to shareholders filed under Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
The registrant has delegated to its investment adviser the voting of proxies relating to the registrant's portfolio securities. The registrant's policies and procedures and those used by the investment adviser to determine how to vote proxies relating to the registrant's portfolio securities, including the procedures used when a vote presents a conflict of interest involving the investment adviser or any of its affiliates, are contained in the investment adviser's Proxy Voting Guidelines, which are attached hereto as Exhibit (c).
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Mr. Kam Yoke Meng, CFA, has been the registrant's portfolio manager since May 2008 and is responsible for the day-to-day management of the registrant's portfolio. Mr. Yoke Meng joined DBS Asset Management Ltd., of which the registrant's investment manager, DBS Asset Management (United States) Pte. Ltd., is a wholly owned subsidiary, in December 2007. Prior to this, he was Deputy Head of Asian Equities at Lion Capital Management Limited.
Other Accounts Managed by the Portfolio Manager. As of October 31, 2009, Mr. Yoke Meng managed six registered investment companies with a total of $[●] million in assets; no pooled investment vehicles other than registered investment companies.
Because Mr. Yoke Meng manages assets for other investment companies, there may be an incentive to favor one client over another resulting in conflicts of interest. For instance, the other investment companies which Mr. Yoke Meng manages may receive fees from certain funds that are higher than the fee it receives from the registrant. In those instances, Mr. Yoke Meng may have an incentive to favor the higher fee accounts over the Fund. DBS Asset Management (United States) Pte. Ltd. has adopted trade allocation and other policies and procedures that it believes are reasonably designed to address these and other conflicts of interest.
Securities Ownership of Portfolio Manager. As of December 3, 2009, Mr. Yoke Meng did not beneficially own any securities in the registrant.
Portfolio Manager Compensation Structure. Mr. Yoke Meng receives a combination of base compensation and discretionary compensation. The methodology used to determine portfolio manager compensation is applied across all accounts managed by Mr. Yoke Meng.
Generally, Mr. Yoke Meng receives a total compensation comprising an annual base salary and a variable bonus. The variable bonus takes into account Mr. Yoke Meng's performance, DBS Asset Management's performance as well as any other factors that may be determined by DBS Asset Management such as fund performance, contribution to the business objectives of the investment manager, the dollar amount of assets under management and client contributions, etc.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
There were no purchases of equity securities made by the registrant or any "affiliated purchasers" during the period of this report.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors.
Item 11. Controls and Procedures.
| (a) | The registrant's principal executive and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the 1934 Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
| (b) | There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant's second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. |
Item 12. Exhibits.
| (a)(1) | Code of Ethics for Principal Executive and Senior Financial Officers. |
| (a)(2) | Certifications required by Rule 30a-2(a) of the Investment Company Act of 1940, as amended. |
| (b) | Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002. |
| (c) | Proxy Voting Guidelines for the registrant and its adviser. |
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 Singapore Fund, Inc.
John J. O'Keefe, Principal Financial Officer
Date: December 28, 2009
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.
John J. O'Keefe, Principal Financial Officer
Date: December 28, 2009
Masaaki Goto, Principal Executive Officer
Date: December 28, 2009
EXHIBIT (a)(1)
CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND
SENIOR FINANCIAL OFFICERS
| I. | This Code of Ethics (the "Code") for The Thai Capital Fund, Inc., The Singapore Fund, Inc. and The Japan Equity Fund, Inc. (each a "Fund" and collectively the "Funds") applies to each Fund's President and Treasurer (or persons performing similar functions) ("Covered Officers") for the purpose of promoting: |
| | · | honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
| | · | full, fair, accurate, timely and understandable disclosure in reports and documents that a Fund files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by a Fund; |
| | · | compliance with applicable laws and governmental rules and regulations; |
| | · | prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and |
| | · | accountability for adherence to the Code. |
Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. A Fund will expect all Covered Officers to comply at all times with the principles in this Code. A violation of this Code by an employee is grounds for disciplinary action up to and including discharge and possible legal prosecution. Any question about the application of the Code should be referred to the Audit Committee of the Fund's Board of Directors ( the "Audit Committee").
| II. | Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest |
Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, a Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with a Fund.
Certain conflicts of interest arise out of the relationships between Covered Officers and a Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940 (the "Investment Company Act") and the Investment Advisers Act of 1940 (the "Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with a Fund because of their status as "affiliated persons" of a Fund. The compliance programs and procedures of a Fund and the Fund's Investment Manager and Investment Adviser are designed to prevent, or identify and correct, violations of these provisions. Certain conflicts of interest also arise out of the personal securities trading activities of the Covered Officers and the possibility that they may use information regarding a Fund's securities trading activities for their personal benefit. Each Fund's Code of Ethics under Rule 17j-1 under the Investment Company Act is designed to address these conflicts of interest. This Code does not, and is not intended to, replace these programs and procedures or a Fund's Rule 17j-1 Code of Ethics, and this Code's provisions should be viewed as being additional and supplemental to such programs, procedures and code.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between a Fund and its Investment Adviser or Investment Manager of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for a Fund or for its Investment Adviser or Investment Manager, or for all parties), be involved in establishing policies and implementing decisions that will have different effects on the Investment Adviser or Investment Manager and a Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between a Fund and its Investment Adviser or Investment Manager and is consistent with the performance by the Covered Officers of their duties as officers of a Fund. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by a Fund's Board of Directors (the "Board") that the Covered Officers may also be officers or employees of one or more other investment companies covered by other codes.
Each Covered Officer must not:
| | · | use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by a Fund whereby the Covered Officer would benefit personally to the detriment of a Fund; |
| | · | cause a Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Fund; and |
| | · | use material non-public knowledge of portfolio transactions made or contemplated for, or actions proposed to be taken by, a Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions. |
Each Covered Officer must, at the time of signing this Code, report all material business affiliations outside a Fund and must update the report annually.
Covered Officers should avoid situations which involve the appearance of, or potential for, conflicts of interest. Examples of these situations include:
| | · | accepting directly or indirectly, anything of value, including gifts and gratuities in excess of $100 per year from any person or entity with which a Fund has current or prospective business dealings, not including occasional meals or tickets to theatre or sporting events or other similar entertainment, provided it is business-related, reasonable in cost, appropriate as to time and place and not so frequent as to raise any question of impropriety; |
| | · | any ownership interest in, or any consulting or employment relationship with, any of a Fund's service providers, other than its Investment Adviser or Investment Manager or any affiliated person thereof; and |
| | · | a direct or indirect financial interest in commissions, transaction charges or spreads paid by a Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. |
In situations involving a Covered Officer which involve the appearance of, or the potential for, conflicts of interest, but where the Covered Officer believes that no significant conflict of interest exist, the Covered Officer must obtain prior written approval from the Audit Committee before becoming involved in that situation. No such approval shall be considered a waiver of this Code.
| III. | Disclosure and Compliance |
| | · | Each Covered Officer should familiarize himself with the disclosure and compliance requirements generally applicable to a Fund; |
| | · | Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about a Fund to others, whether within or outside a Fund, including to a Fund's directors and auditors, or to governmental regulators and self-regulatory organizations; |
| | · | Each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of a Fund and its Investment Adviser or Investment Manager with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents a Fund files with, or submits to, the SEC and in other public communications made by a Fund; and |
| | · | It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. |
| IV. | Reporting and Accountability |
Each Covered Officer must:
| | · | upon adoption of the Code or (thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he has received, read and understands the Code; |
| | · | annually thereafter affirm to the Board that he has complied with the requirements of the Code; |
| | · | not retaliate against any other Covered Officer or any employee of a Fund or their affiliated persons for reports of potential violations that are made in good faith; and |
| | · | notify the Audit Committee promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code. |
The Audit Committee is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. Any waivers sought by a Covered Officer must be considered by the Audit Committee.
A copy of this Code shall be delivered to each employee of a Fund and each employee of its Investment Adviser and Investment Manager annually together with a memorandum requesting that any violations of the Code be communicated immediately to the Audit Committee.
Each Fund will follow these procedures in investigating and enforcing this Code:
| | · | the Audit Committee will take all appropriate action to investigate any potential violations reported to it; |
| | · | if, after such investigation, the Audit Committee believes that no violation has occurred, the Audit Committee is not required to take any further action; |
| | · | if the Audit Committee determines that a violation has occurred, it will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Investment Adviser or its board; or a recommendation to dismiss the Covered Officer; |
| | · | the Audit Committee will be responsible for granting waivers of this Code, as appropriate; and |
| | · | any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. |
| V. | Changes To or Waivers of the Code |
No change to or waiver of any provision of this Code will be effective until a Fund discloses the nature of any amendment to, or waiver from, a provision of the Code in its Form N-CSR, or on its website within five business days following the date of the amendment or waiver if this method of disclosure has been established in its Form N-CSR and made available on its website for twelve months. Any waiver of provisions of this Code will be reported in filings with the SEC and otherwise reported to a Fund's stockholders to the full extent required by the rules of the SEC and by any applicable rules of any securities exchange on which a Fund's securities are listed.
| VI. | Other Policies and Procedures |
This Code shall be the sole code of ethics adopted by each Fund for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of a Fund or its Investment Adviser, Investment Manager or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they conflict with the provisions of this Code.
Any amendments to this Code must be approved or ratified by a majority vote of the Audit Committee and the Board, including a majority of directors who are not interested persons as defined in the Investment Company Act.
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Audit Committee, the Board, the Fund and its counsel and its Investment Adviser and Investment Manager and their respective counsel.
The Code is intended solely for the internal use by a Fund and does not constitute an admission, by or on behalf of a Fund, as to any fact, circumstance or legal conclusion.
I have read and understand the terms of the Code. I recognize the responsibilities and obligations incurred by me as a result of my being subject to the Code. I hereby agree to abide by the Code.
Date:
EXHIBIT (a)(2)
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, John J. O'Keefe, certify that:
| 1. | I have reviewed this report on Form N-CSR of The Singapore Fund, Inc.: |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant's other certifying officers and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: December 28, 2009
John J. O'Keefe, Principal Financial Officer
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Masaaki Goto, certify that:
| 1. | I have reviewed this report on Form N-CSR of The Singapore Fund, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: |
| (a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| (b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| (c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and |
| (d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
| 5. | The registrant's other certifying officer and I have disclosed, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
| (a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and |
| (b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: December 28, 2009
| | Masaaki Goto, Principal Executive Officer |
EXHIBIT (b)
CERTIFICATION
PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, the Principal Financial Officer of The Singapore Fund, Inc. (the "Fund"), with respect to the Form N-CSR for the period ended October 31, 2009 as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| | 1. | Such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| | 2. | The information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund. |
Dated: December 28, 2009
| | John J. O'Keefe, Principal Financial Officer |
This certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the report or as a separate disclosure document.
CERTIFICATION
PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, the Principal Executive Officer of The Singapore Fund, Inc. (the "Fund"), with respect to the Form N-CSR for the period ended October 31, 2009 as filed with the Securities and Exchange Commission, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
| | 1. | Such Form N-CSR fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| | 2. | The information contained in such Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the Fund. |
Dated: December 28, 2009
| | Masaaki Goto, Principal Executive Officer |
This certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the report or as a separate disclosure document.
EXHIBIT (c)
The Singapore Fund, Inc.
Proxy Voting Policy and Procedures
The Board of Directors of The Singapore Fund, Inc. (the "Fund") hereby adopts the following policy and procedures with respect to voting proxies relating to Fund securities managed by DBS Asset Management. (the "Investment Manager").
It is the policy of the Board of Directors of the Fund (the "Board") to delegate the responsibility for voting proxies relating to securities held by the Fund to the Investment Manager as part of the Investment Manager's general management of the Fund's assets, subject to the Board's continuing oversight. The Board of Directors of the Fund hereby delegates such responsibility to the Investment Manager, and directs the Investment Manager to vote proxies relating to Fund portfolio securities managed by the Investment Manager consistent with the duties and procedures set forth below. The Investment Manager may retain one or more vendors to review, monitor and recommend how to vote proxies in a manner consistent with the duties and procedures set forth below, to ensure such proxies are voted on a timely basis and to provide reporting and/or record retention services in connection with proxy voting for the Fund.
The right to vote a proxy with respect to securities held by the Fund is an asset of the Fund. The Investment Manager, to which authority to vote on behalf of the Fund is delegated, acts as a fiduciary of the Fund and must vote proxies in a manner consistent with the best interest of the Fund and its shareholders. In discharging this fiduciary duty, the Investment Manager must maintain and adhere to its policies and procedures for addressing conflicts of interest and must vote in a manner substantially consistent with its policies, procedures and guidelines, as presented to the Board.
The following are the procedures adopted by the Board for the administration of this policy.
A. Review of Investment Manager's Proxy Voting Procedures. The Investment Manager shall present to the Board their policies, procedures and other guidelines for voting proxies at least annually, and must notify the Board promptly of material changes to any of these documents, including changes to policies addressing conflicts of interest.
B. Voting Record Reporting. The Investment Manager shall provide the voting record information necessary for the completion and filing of Form N-PX to the Fund at least annually. Such voting record information shall be in a form acceptable to the Fund and shall be provided at such time(s) as are required for the timely filing of Form N-PX and at such additional time(s) as the Fund and the Investment Manager may agree from time to time. With respect to those proxies that the Investment Manager has identified as involving a conflict of interest1, the Investment Manager shall submit a separate report indicating the nature of the conflict of interest and how that conflict was resolved with respect to the voting of the proxy.
C. Record Retention. The Investment Manager shall maintain such records with respect to the voting of proxies as may be required by the Investment Advisers Act of 1940 and the rules promulgated thereunder or by the Investment Company Act of 1940 and the rules promulgated thereunder.
D. Conflicts of Interest. Any actual or potential conflicts of interest between the Investment Manager and the Fund's shareholders arising from the proxy voting process will be addressed by the Investment Manager and the Investment Manager's application of its proxy voting procedures pursuant to the delegation of proxy voting responsibilities to the Investment Manager. In the event that the Investment Manager notifies the officer(s) of the Fund that a conflict of interest cannot be resolved under the Investment Manager's Proxy Voting Procedures, such officer(s) are responsible for notifying the Chairman of the Board of the Fund of the irreconcilable conflict of interest and assisting the Chairman with any actions he determines are necessary.
The delegation by the Board of the authority to vote proxies relating to securities of the Fund is entirely voluntary and may be revoked by the Board, in whole or in part, at any time.
The Fund shall file an annual report of each proxy voted with respect to securities of the Fund during the twelve-month period ended June 30 on Form N-PX not later than August 31 of each year.2
| | A. | The Fund shall include in its annual report filed on Form N-CSR: |
| | 1. | a description of this policy and of the policies and procedures used by the Fund and the Investment Manager to determine how to vote proxies relating to portfolio securities or copies of such policies and procedures; and |
| | 2. | a statement disclosing that a description of the policies and procedures used by or on behalf of the Fund to determine how to vote proxies relating to securities of the Fund is available without charge, upon request, by calling the Fund's toll-free telephone number; through a specified Internet address, if applicable; and on the SEC's website; and |
| | 3. | a statement disclosing that information regarding how the Fund voted proxies relating to Fund securities during the most recent 12-month period ended June 30 is available without charge, upon request, by calling the Fund's toll-free telephone number; or through a specified Internet address; or both; and on the SEC's website. |
The Board shall review from time to time this policy to determine its sufficiency and shall make and approve any changes that it deems necessary from time to time.
Adopted: November 25, 2003
Proxy voting policy for DBS Asset Management (United Stated) Pte. Ltd.
Statement of Policies and Procedures for
Voting Proxies
INTRODUCTION
As a registered investment adviser, DBS Asset Management (United Stated) Pte. Ltd. ("DBSAM," "we" or "us") has a fiduciary duty to act solely in the best interests of our clients. As part of this duty, we recognize that we must exercise voting rights in the best interests of our clients.
DBSAM recognizes the importance of good corporate governance in ensuring that management and boards of directors fulfill their obligations to shareholders. As part of our investment process, we take into account the attitudes of management and boards of directors on corporate governance issues when deciding whether to invest in a company.
DBSAM is a global investment manager, and invests significantly in emerging markets. It should be noted that protection for shareholders may vary significantly from jurisdiction to jurisdiction, and in some cases may be substantially less than in the U.S. or developed countries.
This statement is intended to comply with Rule 206(4)-6 of the Investment Advisers Act of 1940. It sets forth the policy and procedures of DBSAM for voting proxies for our clients, including investment companies registered under the Investment Company Act of 1940.
PROXY VOTING POLICIES
It is the general policy of DBSAM to support management of the companies in which it invests and will cast votes in accordance with management's proposals. However, DBSAM reserves the right to depart from this policy in order to avoid voting decisions that we believe may be contrary to our clients' best interests.
Elections of Directors: In many instances, election of directors is a routine voting issue. Unless there is a proxy fight for seats on the Board or we determine that there are other compelling reasons for withholding votes for directors, we will vote in favor of the management proposed slate of directors. That said, we believe that directors have a duty to respond to shareholder actions that have received significant shareholder support. We may withhold votes for directors that fail to act on key issues such as failure to implement proposals to declassify boards, failure to implement a majority vote requirement, failure to submit a rights plan to a shareholder vote and failure to act on tender offers where a majority of shareholders have tendered their shares.
Appointment of Auditors: The selection of an independent accountant to audit a company's financial statements is generally a routine business matter. DBSAM believes that management remains in the best position to choose the accounting firm and will generally support management's recommendation.
Changes in Capital Structure: Changes in a company's charter, articles of incorporation or by-laws are often technical and administrative in nature. Absent a compelling reason to the contrary, DBSAM will cast its votes in accordance with the company's management on such proposals. However, we will review and analyze on a case-by-case basis any non-routine proposals that are likely to affect the structure and operation of the company or have a material economic effect on the company.
Corporate Restructurings, Mergers and Acquisitions: DBSAM believes proxy votes dealing with corporate reorganizations are an extension of the investment decision and will take account of our investment process policy in deciding how to vote.
Corporate Governance: DBSAM recognizes the importance of good corporate governance in ensuring that management and the board of directors fulfill their obligations to the shareholders. We generally favor proposals promoting transparency and accountability within a company.
Social and Corporate Responsibility: DBSAM recognizes the importance of supporting sound and responsible policies in relation to social, political and environmental issues. However, in the interests of shareholders, we reserve the right to vote against proposals that are unduly burdensome or result in unnecessary and excessive costs to the company. We may abstain from voting on social proposals that do not have a readily determinable financial impact on shareholder value.
Executive Compensation: DBSAM believes that company management and the compensation committee of the board of directors should, within reason, be given latitude to determine the types and mix of compensation and benefit awards offered. Whether proposed by a shareholder or management, we will review proposals relating to executive compensation plans and, if deemed excessive, may vote against the proposals.
PROXY VOTING PROCEDURES
Proxy Voting
Our portfolio management team is responsible for the coordination of DBSAM's proxy voting. They liaise with the Product managers and/or the Proxy voting committee to ascertain how DBSAM will vote. They will then instruct the relevant Custodians. The portfolio management team is also responsible for ensuring that full and adequate records of proxy voting are kept.
The Product managers will implement the Proxy voting policies by instructing proxy voting in accordance with the general principles contained herein.
Proxy Voting Committee
We have formed a Proxy Voting Committee to regularly review our general proxy policies and consider specific proxy voting matters as and when deemed necessary. Members of the committees include senior investment personnel and representatives of Legal, Compliance and Risk Management Departments. The committee may also evaluate proxies where we face a material conflict of interest (as discussed below).
Conflicts of Interest
DBSAM recognizes that there is a potential conflict of interest when we vote a proxy solicited by an issuer with whom we have any material business or personal relationship that may affect how we vote on the issuer's proxy. We believe that oversight by the Proxy Voting Committee ensures that proxies are voted with only our clients' best interests in mind. In order to avoid any perceived conflict of interests, the following procedures have been established for use when we encounter a potential conflict.
The portfolio management team will refer to Legal and Compliance Departments any proxy votes that are issued by existing clients or where DBSAM holds a significant voting percentage of the company. The Legal and Compliance Departments will make the initial determination about whether a material conflict of interest exists based on the facts and circumstances of each particular situation.
If our proposed vote is consistent with our stated proxy voting policy, no further review is necessary.
If our proposed vote is contrary to our stated proxy voting policy but is also contrary to management's recommendation, no further review is necessary.
If our proposed vote is contrary to our stated proxy voting policy and is consistent with management's recommendation, the proposal is escalated to the proxy committee for final review and determination.
Proxies of Certain Non-U.S. Issuers
Proxy voting in certain countries requires "share blocking." That is, shareholders wishing to vote their proxies must deposit their shares shortly before the date of the meeting (usually one-week) with a designated depositary. During this blocking period, shares that will be voted at the meeting cannot be sold until the meeting has taken place and the shares are returned to the clients' custodian banks. DBSAM may determine that the value of exercising the vote does not outweigh the detriment of not being able to transact in the shares during this period. Accordingly, if share blocking is required we may abstain from voting those shares. In such a situation we would have determined that the cost of voting exceeds the expected benefit to the client.
Proxy Voting Record
Clients may obtain information on how DBSAM voted with respect to their proxies by contacting our Client services team at DBS Asset Management (United Stated) Pte. Ltd., 8 Cross St. #8-01, PWC Building, Singapore 048424, Tel No. 65-68787811, Fax No. 65-65345183 or email dbsasset@dbs.com.
| 1 | As it is used in this document, the term "conflict of interest" refers to a situation in which the Investment Manager or affiliated persons of the Investment Manager have a financial interest in a matter presented by a proxy other than the obligation they incur as Investment Manager to the Fund which could potentially compromise the Investment Manager's independence of judgment and action with respect to the voting of the proxy. |
| 2 | The Fund must file its first report on Form N-PX not later than August 31, 2004, for the twelve-month period beginning July 1, 2003, and ending June 30, 2004. |
