UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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, 2005
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Item 1. Reports to Stockholders.
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The Singapore Fund, Inc.
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General Information (unaudited)
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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 indirectly
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". Weekly comparative net asset value ("NAV") and market
price information about the Fund is published each Monday in The Wall Street
Journal, each Sunday in The New York Times and each Saturday in Barron's, and
also in many other newspapers. The Fund's weekly NAV is also available by
visiting www.daiwast.com or calling (800) 933-3440 or (201) 915-3020. Also, the
Fund's website includes a monthly market review, a list of the Fund's top ten
industries and holdings, its 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 below. 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 5% 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
Investment Manager to vote proxies relating to the Fund's portfolio securities
is available (1) without charge, upon request, by calling (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
Investment Manager votes these proxies is now available by calling the same
number and the Commission's website. The Fund has filed its report on Form N-PX
covering the Fund's proxy voting record for the 12-month period ended June 30,
2005.
Quarterly Portfolio of Investments
A Portfolio of Investments will be filed as of the end of the first and
third quarter of each fiscal year on Form N-Q and will be available on the
Commission's website at www.sec.gov and the Fund's web site 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 22, 2005, 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 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, no action is required on your part, as you are
automatically enrolled by the Plan Agent. However, if your shares are held in
the name of a brokerage firm, bank or nominee, you should instruct your nominee
to participate in the Plan on your behalf. If your nominee is unable to
participate in the Plan for you, you should request that your shares be
registered in your name, so that you may 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 nominee name, you should
be able to withdraw from the Plan without penalty at any time by sending written
notice to your nominee. If you withdraw, you 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 to 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 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 also allows shareholders to
make optional cash investments in Fund shares semi-annually through the Plan
Agent in any amount from $100 to $3,000. The Plan Agent will purchase shares for
you on the NYSE or otherwise on the open market twice a year, on or about
February 15th and August 15th. Plan participants should send in 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 applicable 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 purchase 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 pro rata portion of brokerage commissions for shares purchased on the NYSE
or on the open market by the Plan Agent. For purchases from voluntary cash
payments, participants must pay a nominal service fee of $0.75 for each
investment in addition to a pro rata portion of the brokerage commission.
What are the tax implications? The automatic reinvestment of dividends and
distributions does not relieve you of any income tax which may be payable (or
required to be withheld) on such dividends and distributions. In addition, the
Plan Agent will reinvest dividends for foreign participants and for any
participants subject to federal backup withholding after the deduction of the
amounts required to be withheld.
Please note that, if you participate in the Plan through a brokerage
account, you may not be able to continue as a participant if you transfer those
shares to another broker. Contact your broker or nominee or the Plan Agent to
ascertain what is the best arrangement for you to participate in the Plan.
Shareholder Letter (unaudited)
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November 15, 2005
Dear Shareholders:
We are pleased to present the Annual Report of The Singapore Fund, Inc.
(the "Fund") for the fiscal year ended October 31, 2005.
Performance Review
- -------------------------------------------------- ------------- ------------ ------------- ------------- ------------
US$ Terms Nov'04 Feb'05 May'05 Aug'05 Nov'05
to to to to to
Jan'05 Apr'05 July'05 Oct'05 Oct'05
- -------------------------------------------------- ------------- ------------ ------------- ------------- ------------
Singapore Fund +6.96% -3.74% +8.84% -5.89% +5.46%
- -------------------------------------------------- ------------- ------------ ------------- ------------- ------------
Straits Times Index ("STI") +7.57% +1.39% +9.01% -7.65% +9.80%
- -------------------------------------------------- ------------- ------------ ------------- ------------- ------------
Relative to Benchmark Index -0.61% -5.13% -0.17% +1.76% -4.34%
- -------------------------------------------------- ------------- ------------ ------------- ------------- ------------
Annualized performance computed on compounded basis.
Source: Bloomberg
For the year ended October 31, 2005, the Fund underperformed the benchmark
Straits Times Index ("STI") by 4.34% mainly attributable to the write-off of the
value of the Fund's holding in Citiraya Industries Ltd., which at the beginning
of the financial year represented 7.68% of the Fund's net assets. This write-off
was due to the suspension of trading of Citiraya shares since January 24, 2005
caused by the Singapore government authorities' investigations of corruption and
fraudulent practices involving company employees, including senior management
executives. The outperformance of our over-weight positions in real estate and
marine transport sectors helped to mitigate overall underperformance.
Market Review
The STI advanced on a steady uptrend from the beginning of the financial
year (November 2004) to reach its high for the year in early August 2005, up a
strong +20.6%. It then experienced sharp corrections in the last quarter of the
financial year (August-October 2005), but despite this it was still up a
credible 9.80% by the end of October 2005.
The Singapore government's introduction of incentives to promote Real
Estate Investment Trusts (REITs), approval of two integrated resorts, Orchard
Road Rejuvenation and the new Business Financial Centre projects, as well as its
relaxation of housing policies all helped to boost the property market, general
market sentiment and the Singapore equity market to its year high in early
August. Another contributing factor was the strong Gross Domestic Product
("GDP") growth of +5.4% year-on-year in the second quarter of calendar year 2005
following a very weak +2.7% in the first quarter. With third quarter GDP growth
at +6.0% and Consumer Price Index ("CPI") inflation muted at +0.6% year-on-year
for September, macro-economic numbers continue to be marketsupportive. China's
and Malaysia's removal of their currency pegs to the U.S. dollar was another
contributor to the upward surge of the market in July, as funds flowed into
Singapore and regional markets on expectations of further Chinese Renminbi
(yuan) revaluations and strengthening of regional currencies.
However, concerns over the devastations caused by Hurricanes Katrina and
Rita and their adverse impact on oil prices, rising inflationary pressures and
fears about a peaking U.S. property market hurting U.S. consumer spending all
caused the Singapore market to correct from August to October. The recent spate
of warnings on the imminence of a global avian flu pandemic did not help overall
market sentiment.
Outlook & Strategy
- ------------------------------------- ------------------- ------------------ -----------------------------------------
Benchmark (%) Portfolio (%) Comments
- ------------------------------------- ------------------- ------------------ -----------------------------------------
Telecommunications & Media 14.3 13.8 Defensive exposure with expectations
for higher dividend yields. Step up of
marketing and promotional activities
may put margins under pressure for the
telcos.
- ------------------------------------- ------------------- ------------------ -----------------------------------------
Finance 2.5 23.6 Recovery of the property market and
economy should lead to rising loan
rates with higher earnings growth and
margins expected going forward.
On-going capital restructuring of
United Overseas Bank ("UOB") and
Oversea-Chinese Banking ("OCBC")
provide potential for return on equity
("ROE") improvements, higher dividends
and share buy-backs. Sector limit of
25% is applicable.
- ------------------------------------- ------------------- ------------------ -----------------------------------------
Real Estate 14.0 13.8 Aggressive property acquisitions by
Singapore Real Estate Investment Trusts
and the government's relaxation of
housing policies had led to clear
recovery of the property market
especially at the higher end from
foreign purchasers. Beneficiary of
stronger economic growth and
government's measures to boost tourism
through Orchard Road rejuvenation and
the Integrated Resorts-cum-Casinos
projects. Some profit taking had
reduced weighting to slightly
under-weight.
- ------------------------------------- ------------------- ------------------ -----------------------------------------
Transport 7.4 11.7 Over-weight in marine (leveraged on
continued strong growth in the China
market) and domestic land transport
with more assured growth and dividend
yield prospects. Air transport's high
fuel cost continues to be a drag on
Singapore Airlines ("SIA") and industry
earnings.
- ------------------------------------- ------------------- ------------------ -----------------------------------------
Technology 5.7 7.7 Have turned more optimistic on
technology on expectations of a gradual
recovery of the sector.
- ------------------------------------- ------------------- ------------------ -----------------------------------------
Conglomerate 10.0 7.7 Some profit taking after stronger than
expected performance had trimmed
exposure.
- ------------------------------------- ------------------- ------------------ -----------------------------------------
Earnings momentum for the overall Singapore market will slow this year in
comparison to last year. Domestic economic fundamentals should however be
market-supportive as strengthening economic growth in the second and third
quarter of 2005 (at 5.4% and 6.0% year-on-year, respectively, versus 2.7% for
the first quarter of 2005) raise prospects for annual growth to exceed the upper
range of the government's 2005 GDP growth forecast of 3.5% to 4.5%. However,
concerns of high oil prices flowing-through into higher inflation; the recent
spate of warnings of the possibility of a global outbreak of avian flu pandemic;
uncertainties following the appointment of a new U.S. Federal Reserve Chairman
and fears that he may over-shoot in hiking interest rates (thereby hurting the
already peaking U.S. property market and U.S. consumer spending) negatively
affected market sentiment and outlook. However, barring an actual serious
outbreak of an avian flu pandemic especially if oil prices continue to ease, we
expect the Singapore market to rally and end the calendar year on a positive
note. We are however turning more cautious for the first half of 2006 and expect
to adopt a more defensive posture.
Portfolio Management
Mr. Lim Chi Teong has been the Fund's portfolio manager since April 15,
2005 and is responsible for the day-to-day management of the Fund's portfolio.
Chi Teong 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 February 2005. Prior to this, he was the Director of Investment
Management at Pheim Asset Management Malaysia and Advisor to Pheim Asset
Management Singapore.
Mr. Teo Chon Kiat supports Chi Teong as the alternate portfolio manager.
Prior to joining DBSAM in 1998, Chon Kiat was a quantitative analyst with
Koeneman Capital Management.
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,
IKUO MORI
Chairman of the Board
Portfolio of Investments
October 31, 2005
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COMMON STOCKS--95.80%
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The Singapore Fund, Inc.
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Shares Value
SINGAPORE--95.80%
Agricultural Biotechnology--2.68%
10,000,000 China Sun Bio-chem
Technology Group
Co., Ltd.*........... $2,599,321
Banks & Financial Services--23.61%
2,761,200 Oversea-Chinese Banking
Corp. Ltd............ 10,276,509
1,550,712 United Overseas Bank
Ltd.................. 12,642,047
22,918,556
Building Materials--1.58%
1,999,000 Hong Leong Asia Ltd..... 1,535,194
Chemicals and Plastics--0.45%
1,900,000 China Flexible
Packaging Holdings
Ltd.................. 437,749
Communications--Media--3.90%
1,430,000 Singapore Press
Holdings Ltd......... 3,784,611
Computer Memory--0.78%
6,220,000 Memory Devices Ltd.*@... 753,271
Conglomerate--5.25%
196,800 Jardine Matheson
Holdings Ltd......... 3,109,440
1,250,000 Sembcorp Industries
Ltd.+................ 1,986,413
5,095,853
Diversified--1.23%
124,000 Jardine Strategic
Holdings Ltd......... 1,196,600
E-Business--1.67%
4,365,000 DMX Technologies Group,
Ltd.*................ 1,624,546
Electronic Components--2.45%
2,675,000 BH Global Marine Co.
Ltd.*................ $ 355,561
5,600,000 United Test and
Assembly Center Ltd.* 2,018,018
2,373,579
Foods--0.54%
4,250,000 China Lifestyle
Food and Beverages
Group Ltd.*.......... 451,927
200,000 Food Junction
Holdings Ltd......... 70,891
522,818
Health & Personal Care--1.67%
3,350,000 LMA International
NV, Ltd.*............ 1,622,803
Industrial--2.72%
1,750,000 Singapore Technologies
Engineering Ltd.+.... 2,636,243
Leisure and Tourism--1.66%
2,577,000 Raffles Holdings Ltd.+.. 1,613,717
Manufacturing--0.30%
2,500,000 Linair Technologies
Ltd.*@............... 295,377
Oil & Gas Extraction--0.97%
800,000 KS Energy Services Ltd.. 945,208
Property Development--13.82%
1,400,000 Capitaland Ltd.+........ 2,630,040
900,000 City Developments Ltd... 4,678,777
380,000 Hongkong Land Holdings,
Ltd.................. 1,086,800
1,250,000 Keppel Land Ltd.+....... 2,820,854
147,471 United Overseas Land
Ltd.................. 203,859
2,450,000 Wing Tai Holdings Ltd... 1,997,341
13,417,671
Portfolio of Investments (concluded)
October 31, 2005
- --------------------------------------------------------------------------------
COMMON STOCKS (concluded)
- --------------------------------------------------------------------------------
Shares Value
Recycling--0.00%
14,641,000 Citiraya Industries,
Ltd.*@............... $ --
Retail--0.58%
1,456,000 Best World
International Ltd.... 567,692
Semiconductor--0.68%
1,200,000 STATS ChipPAC Ltd.*+.... 659,282
Shipyards--3.25%
460,000 Keppel Corp. Ltd.+...... 3,152,267
Technology--2.50%
15,000,000 Global Voice Group Ltd.* 1,550,731
2,360,000 Sarin Technologies Ltd.. 871,363
2,422,094
Telecommunications--9.91%
6,150,650 Singapore
Telecommunications
Ltd.+................ 8,466,114
1,000,000 StarHub Ltd.+........... 1,151,972
9,618,086
Transport Services--1.12%
1,615,000 Singapore Post Ltd.+.... 1,087,638
Transportation--Air--3.95%
580,150 Singapore Airlines Ltd.+ 3,838,535
Transportation--Land--2.35%
3,750,000 SMRT Corp., Ltd.+....... 2,281,790
Transportation--Marine--5.36%
4,000,000 Cosco Corp. (Singapore)
Ltd.................. 5,198,641
Water Treatment Systems--0.82%
450,000 Hyflux Ltd.............. $ 794,860
Total Common Stocks
(Cost--$80,431,355)................... 92,994,002
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TIME DEPOSITS--4.41%
- -----------------------------------------------------------
Principal Amount
(000)
- -----------------
SINGAPORE DOLLAR--1.12%
$1,843 Citibank Singapore
0.78%, due 11/1/05... 1,088,813
U.S. DOLLAR--3.29% $ 46 Bank of New York,
0.05%, due 11/1/05... 46,123
3,147 Citibank Singapore,
3.10%, due 11/1/05... 3,146,773
Total U.S. Dollar Time Deposits......... 3,192,896
Total Time Deposits
(Cost--$4,280,938).................... 4,281,709
Total Investments--100.21%
(Cost--$84,712,293)................... 97,275,711
Liabilities in excess of other
assets--(0.21)%....................... (203,075)
NET ASSETS (Applicable to 9,211,045
shares of capital stock outstanding;
equivalent to $10.54 per share)--100.00% $97,072,636
* Non-income producing securities.
+ Deemed to be an affiliated issuer (see page 10).
@ Fair valued security. This security has been valued
in good faith in such a manner as prescribed by the
Board of Directors.
See accompanying notes to financial statements.
TEN LARGEST EQUITY POSITIONS HELD
- --------------------------------------------------------
Issue Percent of
Net Assets
United Overseas Bank Ltd............... 13.02%
Oversea-Chinese Banking Corp. Ltd...... 10.59
Singapore Telecommunications Ltd. 8.72
Cosco Corp. (Singapore) Ltd............ 5.36
City Developments Ltd.................. 4.82
Singapore Airlines Ltd................. 3.95
Singapore Press Holdings Ltd........... 3.90
Keppel Corp. Ltd....................... 3.25
Jardine Matheson Holdings Ltd.......... 3.20
Keppel Land Ltd........................ 2.91
EQUITY CLASSIFICATIONS HELD
- ------------------------------------------------------
Industry Percent of
Net Assets
Banks & Financial Services ............ 23.61%
Property Development................... 13.82
Telecommunications..................... 9.91
Transportation--Marine.................. 5.36
Conglomerate........................... 5.25
Transportation--Air..................... 3.95
Communications--Media................... 3.90
Shipyards.............................. 3.25
Industrial............................. 2.72
Agricultural Biotechnology............. 2.68
Technology............................. 2.50
Electronic Components.................. 2.45
Transportation--Land.................... 2.35
E-Business............................. 1.67
Health & Personal Care................. 1.67
Leisure and Tourism.................... 1.66
Building Materials..................... 1.58
Diversified............................ 1.23
Transport Services..................... 1.12
Oil & Gas Extraction................... 0.97
Water Treatment Systems................ 0.82
Computer Memory........................ 0.78
Semiconductor.......................... 0.68
Retail................................. 0.58
Foods.................................. 0.54
Chemicals and Plastics................. 0.45
Manufacturing.......................... 0.30
Recycling.............................. 0.00
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 Number of
Shares Held Shares Held Market Value
October 31, Purchase October 31, at October 31, Dividend
Name of Affiliated Holding 2004 Cost Sales Cost 2005 2005 Income
- --------------------------------- ------------ ------------ ---------- -------------- -------------- ------------
Capitaland Ltd................... -- $1,927,928 $ -- 1,400,000 $ 2,630,040 $ 41,046
Keppel Corp. Ltd................. 587,500 -- (216,285) 460,000 3,152,267 51,542
Keppel Land Ltd.................. -- 1,891,360 (313,070) 1,250,000 2,820,854 36,655
Raffles Holdings Ltd............. -- 995,464 -- 2,577,000 1,613,717 25,184
Sembcorp Industries Ltd.......... -- 1,913,105 -- 1,250,000 1,986,413 --
Singapore Airlines Ltd........... 580,150 -- -- 580,150 3,838,535 139,906
Singapore Post Ltd.............. -- 903,610 -- 1,615,000 1,087,638 37,997
Singapore Technologies
Engineering Ltd............... 1,975,000 -- (228,523) 1,750,000 2,636,243 146,695
Singapore Telecommunications Ltd. 5,009,650 3,007,882 (515,957) 6,150,650 8,466,114 365,053
SMRT Corp........................ -- 2,438,249 -- 3,750,000 2,281,790 --
StarHub Ltd...................... -- 1,345,861 (419,131) 1,000,000 1,151,972 34,736
STATS ChipPAC Ltd................ -- 946,348 (278,338) 1,200,000 659,282 --
-------------- ------------
Total......................... $32,324,865 $ 878,814
============== =============
Statement of Assets and Liabilities
October 31, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Assets
Investment in securities, at value:
Unaffiliated securities (cost--$59,864,258)............................. $ 64,950,846
Affiliated securities (cost--$24,848,035)............................... 32,324,865 $ 97,275,711
---------------
Interest receivable....................................................... 4
Prepaid expenses.......................................................... 33,220
-----------------
Total assets........................................................... 97,308,935
Liabilities
Payable for management fees............................................... 61,063
Payable for advisory fees................................................. 30,942
Payable for other affiliates.............................................. 40,413
Accrued expenses and other liabilities.................................... 103,881
-----------------
Total liabilities...................................................... 236,299
-----------------
Net Assets
Capital stock, $0.01 par value per share; total 100,000,000 shares
authorized; 9,211,045 shares issued and outstanding.................... 92,111
Paid-in capital in excess of par value.................................... 106,470,686
Undistributed net investment income....................................... 1,490,908
Accumulated net realized loss on investments.............................. (23,544,068)
Net unrealized appreciation on investments and other assets and liabilities
denominated in foreign currency........................................ 12,562,999
-----------------
Net assets applicable to shares outstanding............................ $ 97,072,636
=================
Net Asset Value Per Share............................................ $ 10.54
=================
See accompanying notes to financial statements.
Statement of Operations
For the Year Ended October 31, 2005
- ------------------------------------------------------------------------------------------------------------------------------------
Investment income:
Dividends:
Unaffiliated securities...................................................... $ 2,210,153
Affiliated securities........................................................ 878,814 $ 3,088,967
--------------
Interest........................................................................ 62,165
--------------
Total investment income...................................................... 3,151,132
--------------
Expenses:
Investment management fee....................................................... 706,260
Investment advisory fee......................................................... 357,770
Administration fee and expenses................................................. 217,542
Audit and tax services.......................................................... 98,750
Custodian fees and expenses..................................................... 94,161
Legal fees and expenses......................................................... 74,069
Insurance expense............................................................... 46,583
Reports and notices to shareholders............................................. 42,395
Directors' fees and expenses.................................................... 36,530
Transfer agency fee and expenses................................................ 13,576
Other........................................................................... 51,358
--------------
Total expenses............................................................... 1,739,174
--------------
Net investment income.............................................................. 1,411,958
--------------
Realized and unrealized gains from investment activities and foreign currency
transactions: Net realized gains on investments:
Unaffiliated securities...................................................... 8,090,640
Affiliated securities........................................................ 1,616,167 9,706,807
--------------
Net realized foreign currency transaction gains................................. 78,950
Net change in unrealized appreciation (depreciation) on investments in equity
securities................................................................... (5,989,104)
Net change in unrealized appreciation (depreciation) on other assets and
liabilities denominated in foreign currency.................................. (86,645)
--------------
Net realized and unrealized gains from investment activities and foreign currency
transactions................................................................. 3,710,008
--------------
Net increase in net assets resulting from operations............................... $ 5,121,966
==============
See accompanying notes to financial statements.
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
For the Years Ended
October 31,
--------------------------------
2005 2004
---------------- --------------
Increase (decrease) in net assets from operations:
Net investment income........................................................ $ 1,411,958 $ 1,658,629
Net realized gain on:
Investments............................................................... 9,706,807 10,622,842
Foreign currency transactions............................................. 78,950 376,953
Net change in unrealized appreciation (depreciation) on:
Investments in equity securities.......................................... (5,989,104) 1,042,102
Translation of short-term investments and other assets and liabilities
denominated in foreign currency......................................... (86,645) (29,602)
---------------- --------------
Net increase in net assets resulting from operations......................... 5,121,966 13,670,924
---------------- --------------
Dividends and distributions to shareholders from:
Net investment income........................................................ (2,025,569) (874,505)
---------------- --------------
From capital stock transactions: Sale of capital stock resulting from:
Reinvestment of dividends................................................. 34,002 13,496
---------------- --------------
Net increase in net assets................................................... 3,130,399 12,809,915
Net assets:
Beginning of year............................................................ 93,942,237 81,132,322
---------------- --------------
End of year (including undistributed net investment income of
$1,490,908 and $2,034,442, respectively).................................. $ 97,072,636 $ 93,942,237
================ ==============
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 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 accounting principles generally accepted in the United States
of America 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.
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 applicable to regulated investment
companies. Accordingly, no provision for federal income or excise taxes is
required. During the year ended October 31, 2005, the Fund was subject to
withholding tax, ranging from 10% to 20%, on certain income from its
investments.
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.
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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 generally accepted accounting principles. 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.
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, 2005, no
out-of-pocket expenses were paid to the Manager.
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
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
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, 2005, no out-of-pocket expenses were paid to the Adviser.
At October 31, 2005, the Fund owed to the Manager and the Adviser $61,063
and $30,942 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,
2005, expenses of $5,986 were paid to the Administrator, representing
reimbursement to the Administrator of costs relating to the attendance by its
employees at meetings of the Fund's Board.
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, 2005, DSTC earned $21,543 and DBS Bank earned $67,378
from the Fund for their respective custodial services.
At October 31, 2005, the Fund owed to DSTC $16,702, $3,750 and $19,960 for
administration, compliance and custodian fees, respectively. The latter amount
includes fees and expenses payable to DBS Bank totaling $18,056.
During the year ended October 31, 2005, the Fund paid or accrued $82,587
for legal services, in connection-with the Fund's on-going operations, to a law
firm of which the Fund's Assistant Secretary is a partner.
Investments in Securities and Federal Income Tax Matters
For federal income tax purposes, the cost of securities owned at October
31, 2005 was $80,611,721, excluding short-term interest-bearing investments. At
October 31, 2005, the net unrealized appreciation on investments, excluding
short-term securities, of $12,382,281 was composed of gross appreciation of
$18,960,835 for those investments having an excess of value over cost, and gross
depreciation of $6,578,554 for those investments having an excess of cost over
value. For the year ended October 31, 2005, the total aggregate cost of
purchases and net proceeds from sales of portfolio securities, excluding the
short-term securities, were $37,778,573 and $31,139,837, respectively.
In order to present 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.
Notes to Financial Statements (concluded)
- --------------------------------------------------------------------------------
For the year ended October 31, 2005, the adjustments were to increase net
investment income by $70,077 and increase accumulated net realized loss by
$78,950 primarily related to the reclassification of realized foreign currency
gains and increase capital by $8,873. Net investment income, net realized losses
and net assets were not affected by this change.
During the current year, the Fund utilized capital loss carryforwards of
$9,702,277.
At October 31, 2005, the Fund had a remaining capital loss carryover of
$23,363,702, of which $5,096,375 expires in the year 2008, $16,509,415 expires
in the year 2009 and $1,757,912 expires in the year 2010, available to offset
future net capital gains.
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. As of October 31, 2005, the
components of accumulated earnings (deficit) on a tax basis were as follows:
Accumulated Unrealized
Net Investment Income Net Realized Loss Appreciation/Depreciation
- --------------------- ----------------- -------------------------
$1,490,908 $23,363,702 $12,382,633
The tax character of the distribution paid during the fiscal year ended
October 31, 2005 and October 31, 2004 was the same for financial statement and
tax purposes.
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.
At October 31, 2005, the Fund had 1,843,088 Singapore Dollars valued at
$1,088,813 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, 2005, 3,912 shares were issued as a result of
the reinvestment of dividends paid to those shareholders electing to reinvest
dividends. Of the 9,211,045 shares outstanding at October 31, 2005, Daiwa
Securities America, Inc., an affiliate of the Adviser and DSTC, owned 15,118
shares.
Subsequent Event
On December 19, 2005, a dividend was declared by the Board. The
distribution of $0.17 per share is payable on January 19, 2006, to shareholders
of record at the close of business on December 30, 2005. The ex-dividend date is
December 28, 2005.
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of capital stock outstanding during each year is
presented below:
For the Year Ended October 31,
-------------------------------------------------------------
2005 2004 2003 2002 2001
--------- ----------- ----------- ---------- ------------
Net asset value, beginning of year.................. $ 10.20 $ 8.81 $ 6.46 $ 5.76 $ 8.12
--------- ----------- ----------- ---------- ------------
Net investment income............................... 0.16 0.18 0.08 0.02 0.10
Net realized and unrealized gains (losses) on
investments and foreign currency transactions.... 0.40 1.31 2.28 0.76 (2.46)
--------- ----------- ----------- ---------- ------------
Net increase (decrease) in net asset value resulting
from operations ................................. 0.56 1.49 2.36 0.78 (2.36)
--------- ----------- ----------- ---------- ------------
Less: dividends and distributions to shareholders
Net investment income............................ (0.22) (0.10) (0.01) (0.08) --
--------- ----------- ----------- ---------- ------------
Net asset value, end of year........................ $ 10.54 $ 10.20 $ 8.81 $ 6.46 $ 5.76
========= =========== =========== ========== ============
Per share market value, end of year................. $ 9.29 $ 8.52 $ .62 $ 5.00 $ 4.48
========= =========== =========== ========== ============
Total investment return:
Based on market price at beginning and end of
year, assuming reinvestment of dividends...... 11.80 % 13.25 % 52.59 % 13.39 % (29.73) %
Based on net asset value at beginning and end of
year, assuming reinvestment of dividends...... 5.95 % 17.27 % 36.55 % 13.94 % (29.06) %
Ratios and supplemental data:.......................
Net assets, end of year (in millions)............ $ 97.1 $ 93.9 $ 81.1 $ 59.4 $ 53.0
Ratios to average net assets of:
Expenses...................................... 1.81 % 1.65 % 1.85 % 2.12 % 2.15 %
Expenses, excluding waiver of Management and
Advisory fee applicable to net investment
income...................................... 1.81 % 1.82 % 2.04 % 2.20% 2.15 %
Net investment income......................... 1.47 % 1.93 % 1.19 % 0.23 % 1.47 %
Portfolio turnover.................................. 34.85 % 77.65 % 93.13 % 103.33 % 152.18 %
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, 2005, the results of its operations for the year then
ended, the changes in 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, 2005 by correspondence with the custodian, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
December 19, 2005
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, 2005) as to the federal tax status of any distributions received by you
during such fiscal year.
On December 19, 2005, the Board of Directors of the Fund approved a total
distribution of $0.17 per share which represents a dividend from ordinary
income.
There is no foreign tax deduction or credit available to shareholders for
calendar year 2005.
The information reported herein may differ from the information and
distributions taxable to the shareholders for the calendar year ending December
31, 2005. 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
2006.
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
2007 for Class I Directors, 2008 for Class II Directors and 2006 for Class III
Directors, or until their successors are duly elected and qualified.
Number of
Principal Occupation Funds in
or Employment During Past Fund Complex
Five Years and Director or for Which
Name (Age) and Address of Directorships in Officer of Director
Directors/Officers Publicly Held Companies Fund Since Serves (1)
- ------------------------------------ --------------------------------------------------- -------------- --------------
Directors
Austin C. Dowling (73) Retired; Director, The Thai Capital Fund, Inc., Class III 3
1002 E Long Beach Boulevard since 1990; Director, The Japan Equity Fund, Director
North Beach, Inc., since 1992. since 2000
NJ 08008
Martin J. Gruber (68) Professor of Finance, Leonard N. Stern School of Class II 3
229 South Irving Street Business, New York University, since 1965; Director
Ridgewood, NJ 07450 Director, The Thai Capital Fund, Inc., since since 2000
2000; Director, The Japan Equity Fund, Inc.,
since 1992; Trustee, Scudder New York Mutual
Funds, since 1992; Trustee, C.R.E.F., from 2001
to 2005 and Chairman from December 2003 to 2005;
Trustee, T.I.A.A., from 1996 to 2000; Director,
National Bureau of Economic Research, since
August, 2005.
David G. Harmer (62) Executive Director, Department of Community and Class I 3
4337 Bobwhite Court Ogden, UT Economic Development for the State of Utah, since Director
84403 May 2002; Chairman, 2K2 Hosting Corporation, from since 1996
April 2001 to April 2002; President, Jetway
Systems, a division of FMC Corporation, from 1997
until 2001; Director, The Thai Capital Fund,
Inc., since 2000; Director, The Japan Equity
Fund, Inc., since 1997.
* Ikuo Mori (56) Chairman and CEO, Daiwa Securities America Inc., Chairman of 3
Daiwa Securities America Inc. since 2001; Executive Officer, Daiwa Securities the Board
Financial Square 32 Old Slip Group Inc., since 2001; President and COO, Daiwa and Class
New York, NY 10005 Securities America Inc., from 1996 to 2001; III Director
Chairman of the Board, The Thai Capital Fund, since 2001
Inc., since 2001.
Information Concerning Directors and Officers (unaudited) (concluded)
- --------------------------------------------------------------------------------
Number of
Principal Occupation Funds in
or Employment During Past Fund Complex
Five Years and Director or for Which
Name (Age) and Address of Directorships in Officer of Director
Directors/Officers Publicly Held Companies Fund Since Serves (1)
- ------------------------------------ --------------------------------------------------- -------------- --------------
Oren G. Shaffer (63) Vice Chairman and Chief Financial Officer, Qwest Class I 3
1801 California Street Denver, Communications International Inc., since July Director
CO 80202 2002; Executive Vice President and Chief since 1997
Financial Officer, Ameritech Corporation, from
1994 to 2000; Director, The Thai Capital Fund,
Inc., since 2000; Director, The Japan Equity
Fund, Inc., since 2000.
Officers
John J. O'Keefe (46) Vice President and Treasurer, The Thai Capital Vice --
One Evertrust Plaza Jersey Fund, Inc. and The Japan Equity Fund, Inc., since President
City, NJ 07302-3051 2000; Vice President, Fund Accounting Department, and
Daiwa Securities Trust Company, since 2000. Treasurer of
the Fund
since 2000
Secretary of
the Fund
since 2000
Yuko Uchida (27) Secretary, The Thai Capital Fund, Inc. and The Secretary of --
One Evertrust Plaza Jersey Japan Equity Fund, Inc., since 2004; Client the Fund
City, NJ 07302-3051 Reporting Department of Daiwa Securities Trust since 2004
Company, since 2002.
Anthony Cambria (51) Chief Compliance Officer, The Thai Capital Fund, Chief --
One Evertrust Plaza Jersey Inc. and The Japan Equity Fund, Inc., since 2004; Compliance
City, NJ 07302-3051 Director and Executive Vice President, Daiwa Officer of
Securities Trust Company, since 1999. the Fund
since 2004
Leonard B. Mackey, Jr. (54) 31 Partner in the law firm of Clifford Chance US Assistant --
West 52nd Street New York, NY LLP, since 1983; Assistant Secretary, The Thai Secretary of
10019-6131 Capital Fund, Inc. and The Japan Equity Fund, the Fund
Inc., since 2004. since 2004
- ---------------
1 "Fund Complex" includes the Fund, The Thai Capital Fund, Inc., The Japan
Equity Fund, Inc. and other investment companies advised by SCB Asset
Management Co., Ltd., Daiwa SB Investments (H.K.) Ltd., DBS Asset
Management (United States) Pte. Ltd., Daiwa SB Investments (Japan Equity)
Ltd., Daiwa SB Investments (USA) Ltd., Daiwa SB Investments Ltd. or their
respective affiliates.
* Directors so noted are deemed by the Fund's counsel to be "interested
persons" (as defined in the U.S. Investment Company Act of 1940, as
amended). Mr. Mori 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 of the Board of Directors of The Singapore Fund, Inc. held on
June 2, 2005, 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 overall 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's performance
for the last three-and five-year periods was higher than the Fund's benchmark,
but was lower for the one-year period. The Board discussed with the Adviser the
reasons for the Fund's underperformance in the last year. 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, or
outperformed, the benchmark. The Board concluded that the Fund's overall
performance was competitive with that of its benchmark.
Fees Relative to Other Funds Advised by the Advisers
The Board reviewed the advisory fee paid by the Fund under the Advisory
Agreement and the Investment Management Agreement (together, the "advisory
fee"). The Board also reviewed information showing the advisory fees paid by
other funds managed by each of the Advisers as compared to the advisory fee 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 20 other closed-and open-end funds, of which
only four funds have an advisory fee lower than the Fund, and the Investment
Adviser advises approximately seven other closed-and open-end funds, of which
only one fund has an advisory fee lower than the Fund. The Board concluded that
the advisory fee paid by the Fund was appropriate as compared to other funds
advised by the Advisers.
Board Consideration and Approval of Investment Advisory and Management
Agreements (unaudited) (continued)
- --------------------------------------------------------------------------------
Fees and Expenses Relative to Comparable Funds Managed by Other Advisers
The Board considered the advisory fees paid by the other funds in the Fund
Complex, The Japan Equity Fund, Inc. and The Thai Capital Fund, Inc., as
compared to the advisory fee paid to the Fund's Advisers. The Board noted that
the advisory fee rate paid to the Fund was higher than that of The Japan Equity
Fund, Inc. and The Thai Capital Fund, Inc. In addition, the Board examined the
advisory fees paid to other closed-end funds investing in a single country.
While the fees vary widely, the advisory fee rate paid to The Singapore Fund,
Inc. 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 fee was 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 closedend 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 schedule under
the Advisory Agreement and Investment Management Agreement and noted that it
does include breakpoints. The Board considered that the Fund is closed-end and
that the Fund's assets are not likely to grow with new sales. The Board
concluded that economies of scale for this 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 their review of the information they 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
Board Consideration and Approval of Investment Advisory and Management
Agreements (unaudited) (concluded)
- --------------------------------------------------------------------------------
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 in
the conduct of the Fund's business.
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.
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THE
SINGAPORE
FUND, INC.
Annual Report
October 31, 2005
- ------------------------------------------------------------
BOARD OF DIRECTORS
Ikuo Mori, Chairman
Austin C. Dowling
Martin J. Gruber
David G. Harmer
Oren G. Shaffer
- ------------------------------------------------------------
OFFICERS
John J. O'Keefe
Vice President and Treasurer
Yuko Uchida
Secretary
Anthony Cambria
Chief Compliance Officer
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 and 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 the Code of Ethics.
(e) Not applicable.
(f) (1) The Code of Ethics is attached hereto as Exhibit 12(a).
(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 Oren G. Shaffer 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:
2005
Registrant Covered Entities(1)
Audit Fees.................................. $86,000 N/A
Non-Audit Fees
Audit-Related Fees..................... - -
Tax Fees............................... (2) $8,900 -
All Other Fees......................... - -
Total Non-Audit Fees........................ $8,900 -
Total....................................... $94,900 -
2004
Registrant Covered Entities(1)
Audit Fees.................................. $81,150 N/A
Non-Audit Fees
Audit-Related Fees..................... - -
Tax Fees............................... (2) $8,400 -
All Other Fees......................... - -
Total Non-Audit Fees........................ $8,400 -
Total....................................... $89,550 -
- ---------------------
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 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) (1) 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) (2) 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.
(g) See table above.
(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. The
members of the audit committee are as follows: Austin C. Dowling, Martin J.
Gruber, David G. Harmer and Oren G. Shaffer.
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 12(c).
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
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) Code of Ethics for Principal Executive and Senior Financial Officers.
(b) Certifications required by Rule 30a-2(a) of the Investment Company Act of
1940, as amended, and Section 906 of the Sarbanes-Oxley Act of 2002 are
attached hereto.
(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.
By \s\ John J. O'Keefe
--------------------------------------------------
John J. O'Keefe, Vice President & Treasurer
Date: December 28, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By \s\ John J. O'Keefe
---------------------------------------------------
John J. O'Keefe, Vice President & Treasurer
Date: December 28, 2005
By \s\ Ikuo Mori
----------------------------------------------------
Ikuo Mori, Chairman
Date: December 28, 2005
EXHIBIT 12 (a)
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 Singapore 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:
o honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
o 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;
o compliance with applicable laws and governmental rules and
regulations;
o prompt internal reporting of violations of the Code to an appropriate
person or persons identified in the Code; and
o 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:
o 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;
o 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
o 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:
o 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;
o 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
o 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
o Each Covered Officer should familiarize himself with the disclosure
and compliance requirements generally applicable to a Fund;
o 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;
o 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
o 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:
o 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;
o annually thereafter affirm to the Board that he has complied with the
requirements of the Code;
o 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
o 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:
o the Audit Committee will take all appropriate action to investigate
any potential violations reported to it;
o if, after such investigation, the Audit Committee believes that no
violation has occurred, the Audit Committee is not required to take
any further action;
o 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;
o the Audit Committee will be responsible for granting waivers of this
Code, as appropriate; and
o 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.
VII. Amendments
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.
VIII. Confidentiality
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.
IX. Internal Use
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 12 (b)
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 officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined
in Rule 30a-2(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 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 controls over financial reporting.
Date: December 28, 2005
\s\ John J. O'Keefe
-----------------------------------------------------
John J. O'Keefe, Vice President & Treasurer
CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Ikuo Mori, 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-2(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 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 controls over financial reporting.
Date: December 28, 2005
By \s\ Ikuo Mori
--------------------------------------------
Ikuo Mori, Chairman
CERTIFICATION
PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002
The undersigned, the Vice President & Treasurer of The Singapore Fund, Inc.
(the "Fund"), with respect to the Form N-CSR for the period ended October 31,
2005 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 Funds.
Dated: December 28, 2005
\s\ John J. O'Keefe
----------------------------------------------------
John J. O'Keefe, Vice President & Treasurer
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 Chairman of The Singapore Fund, Inc. (the "Fund"),
with respect to the Form N-CSR for the period ended April 30, 2005 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 Funds.
Dated: December 28, 2005
\s\ Ikuo Mori
---------------------------
Ikuo Mori, Chairman
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 12 (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").
I. Policy
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.
II. Fiduciary Duty
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.
III. Procedures
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.
IV. Revocation
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.
V. Annual Filing
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
VI. Disclosures
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.
VII. Review of Policy
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:
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. #27-01, PWC Building, Singapore 048424, Tel No.
65-68787811, Fax No. 65-65345183 or email dbsasset@dbs.com.
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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,
2005, for the twelve-month period beginning July 1, 2004, and ending June
30, 2005.