UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-05984
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THE NEW IRELAND FUND, INC.
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Bank of Ireland Asset Management (U.S.) Limited
75 Holly Hill Lane
GREENWICH, CT 06830
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(Address of principal executive offices) (Zip code)
PFPC Inc.
99 High Street, 27th Floor
BOSTON, MA 02110
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(Name and address of agent for service)
Registrant's telephone number, including area code: (203) 869-0111
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Date of fiscal year end: OCTOBER 31
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Date of reporting period: OCTOBER 31, 2006
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Report to Shareholders is attached herewith.
THE
NEW IRELAND
FUND
[GRAPHIC OMITTED - CASTLE PIC]
ANNUAL REPORT
OCTOBER 31, 2006
COVER PHOTOGRAPH - THE CUSTOM HOUSE, DUBLIN
Provided courtesy of Tourism Ireland.
LETTER TO SHAREHOLDERS
Dear Shareholder,
INTRODUCTION
As may be seen in the Economic Review section below, the Irish economy
remains strong with growth of 5.25% expected for the current year and a slightly
higher rate of 5.5% being forecast for 2007. Although the overall growth rate of
the Western European economies has shown an improvement over recent months,
Ireland continues to grow at almost double the average of the Euro area.
Over the past 12 months, the Fund's Net Asset Value ("NAV") rose by a very
satisfactory 45.97%. This performance was stronger than the Irish market and
significantly better than the U.S. markets, as a whole. As a result, the Fund
continues to rank close to or at the top of if its Western European peer group,
in all time categories.
In early November, the Board of the Fund declared a distribution for the
fiscal year ended October 31, 2006, in an amount of $2.64 per share. This will
be a stock distribution however, shareholders are being given the option of
taking the distribution in cash, should they so wish. The $2.64 per share is
comprised of long-term capital gains of $2.37, short-term capital gains of $0.03
and net income of $0.24. The distribution will be made under date of December
28, 2006 to all shareholders of record on November 14, 2006.
As set out in the notes to the financial statements, following the
indication from the Securities and Exchange Commission that the Fund could
re-submit its application for a managed distribution program, the Board
re-considered the matter and has decided to withdraw the Application. The Board
believes that this is in the best interest of shareholders due to the
significant narrowing of the discount and the strong performance of the Fund in
recent years.
A new Portfolio Manager, Peter O'Donoghue, has just been appointed to take
over from Deirdre Kennedy, the current manager, who is moving to another
position within Bank of Ireland Asset Management, the Fund's Advisor. Peter
O'Donoghue has been with the Advisor for the past six years and, as a result,
the Board does not expect that there will be any change in the approach to the
management of the Fund's assets, going forward.
PERFORMANCE
For the fiscal year just ended, the Fund's NAV rose 45.97% to $32.55
compared to the 39.67% return of the Irish Equities Index ("ISEQ"), in US dollar
terms. The Fund's performance was driven by its exposure to quality Irish
companies, which are benefiting from the strong economic environment in their
home market while, at the same time, exploiting growth opportunities in the U.S,
U.K., and elsewhere.
1
As a result of the sharp correction due to lower energy prices and the
easing of inflation and interest rate concerns, markets recovered strongly in
the recent quarter. As a result, in the Fund's last fiscal quarter, the NAV
increased by 17.0%, as compared to the 14.86% return of the ISEQ, in US dollar
terms. Excluding Bank of Ireland, which the Fund is precluded from investing in,
the Irish market was up 14.93% in US dollar terms. Over the same period the
performance of the Irish market was well ahead of the broader European indices
and the S&P 500.
The Euro rose by 0.2% and 6.6% against the dollar over the last three and
twelve months respectively and this factor also helped the performance of the
Fund.
During fiscal 2006, we continued to implement the Share Repurchase Program
and over the 12 months, the Fund repurchased, and retired, 60,950 shares at a
cost of $1.46 million. These repurchases represent a reduction of 1.35% of the
shares outstanding at October 31, 2005 and they positively impacted the Fund's
NAV by 3 cents per share. Since commencement of the Program in fiscal 2000,
repurchases have totalled 1,315,250 shares representing 22.1% of total shares,
which have been issued by the Fund.
ECONOMIC REVIEW
Irish economic growth continues at a strong pace with the Irish Central
Bank forecasting 5.25% Gross Domestic Product ("GDP") growth for 2006, which is
similar to the rate of growth achieved in 2005. Looking ahead to 2007, growth is
expected to remain strong with current forecasts looking for an increase in GDP
of 5.5%. The international backdrop also remains broadly supportive with strong
growth, in Europe and Asia, expected to offset moderating U.S. growth. In the
first half of 2006, Euro area GDP expanded at its fastest pace in six years and
forecasts have been revised upwards to 2.6%, for the full year.
Although the outlook for the Irish economy remains relatively benign, some
domestic risks are still evident. Strong increases in house price inflation have
been a concern for some time, given affordability constraints. However, there
have been some tentative signs from leading housing indicators that these price
pressures are moderating. While consumer indebtedness remains high and is
increasing, it is felt that there will be some moderation, over the coming
months, as the full impact of recent European Central Bank rate increases begins
to be felt. Potential external risks include rising worldwide inflationary
pressures, a sharper than expected cooling of the U.S. housing market and
continued uncertainty in global oil and commodity markets.
Irish consumer sentiment was largely unchanged in October. The overall
Consumer Sentiment Index stood at 86.7 in October, compared to a figure of 86.5
in September. The corresponding figure for October 2005 was 85.0.
The economy remains close to full employment with the official unemployment
rate, in September, being 4.4% and the number of people claiming unemployment
benefit dropping to the lowest figure since mid-2003.
2
These statistics are all the more impressive given the recent surge in the
labor force with almost 100,000 workers being added over the past 18 months.
In August, retail sales volume rose 1.6%, month-on-month, with year-on-year
volumes running at 5.5%. Stripping out the volatile automobile component, retail
sales are ahead by 7.2%, in volume terms, year-on-year. Forecasts are for a
slight moderation in this rate to 6.5%, for the full year.
In October, due to the recent sharp drop in energy prices, the Consumer
Price Index ("CPI") was 3.9%, down from levels above 4% in previous months. The
European Area Consumer Price Index ("HCIP") for Ireland - which excludes
mortgage related costs - was unchanged at 2.2%. As the latest oil price drop has
effectively worked its way through the system, both the CPI and the HCIP are
forecast to be closer to 5% and 3% respectively towards the year end. Underlying
inflation is being driven by service inflation which hit an annual rate of 4.4%
in October - its highest rate since December 2003.
September saw a modest decline in the annual growth rate of private sector
credit ("PSC"), which came in at 28.1% down from 28.2% in August. The three
month moving average of annual credit growth in this sector has been on a
downtrend since June. Annual growth in residential mortgages eased to 26.9% in
September, down from 27.1% in August. Non-mortgage credit continues to grow at a
faster rate than both PSC and residential mortgages, with the annual rate of
growth being 32% in September, up from 31.7% in August.
EQUITY MARKET REVIEW
QUARTER ENDED YEAR ENDED
OCTOBER 31ST, 2006 OCTOBER 31ST, 2006
------------------ ------------------
LOCAL LOCAL
CURRENCY U.S. $ CURRENCY U.S. $
-------- ------ -------- ------
Irish Equities (ISEQ) +14.84% +14.86% 31.10% 39.67%
S&P 500 +7.93% +7.93% 14.16% 14.16%
NASDAQ +13.16% +13.16% 11.62% 11.62%
UK Equities (FTSE 100) +3.39% +5.60% 15.27% 24.35%
Japanese Equities +6.10% +4.20% 20.53% 20.24%
Euroland Equities Eurostoxx +9.58% +9.61% 24.54% 32.68%
German Equities (DAX) +10.33% +10.36% 27.18% 35.50%
French Equities (CAC 40) +6.77% +6.80% 20.56% 28.45%
Dutch Equities (AEX) +7.16% +7.19% 23.44% 31.52%
Most of the fund's holdings released interim or quarterly reports during the
period - highlights were as follows:
CRH reported a strong set of interim numbers in line with the group's
pre-close trading statement released in July. First half revenues rose 27% with
3
operating profit ahead 38% from the year earlier period. Operating performance
was strong across the entire group with each of the group's six divisions
posting an improved organic operating profit performance. CRH benefited from
firmer demand in Europe across a number of previously lacklustre Central
European economies, with the group's merchanting activities boosted by the
successful integration of acquisitions completed in 2005 and 2006. A strong
focus on pricing and the recovery of input costs produced an excellent result
within the Group's North American Material's division while American products
saw good non-residential and commercial demand. Acquisition activity has been
very healthy in the current fiscal year with YTD announcements amounting to
almost A2bn. Despite some expected moderation in US growth, CRH expects to
deliver good profit growth in the second half and are forecasting a `healthy'
advance in group profits for 2006 as a whole.
C&C GROUP released an excellent set of interim results driven primarily by
the successful roll out of the Group's premium cider brand, Magners, in the UK.
Magners volumes rose an impressive 264% in the first half of the year driving a
500 basis point increase in the group operating margin and group earnings were
ahead by almost 80% at A93.5 million. The Group expects the strong market
performance of the cider division to continue into the second half of the year
leading to an acceleration in operating profit growth. Separately, the Group
announced a planned expansion of manufacturing capacity costing A200 million to
cater for expected UK demand going forward.
KINGSPAN GROUP reported a consensus-beating first half-year set of results
as the Group continues to benefit from regulation based insulation demand across
the UK, Ireland and Mainland Europe. Insulation boards and panels drove a 17%
advance in revenues with operating margins expanding an impressive 150 basis
points to 13.0%. The Group's acquisition of Century Homes offers a further leg
of growth as timber-frame residential construction rises from the currently low
penetration levels, in both the UK and Ireland. Despite Competition Authority
rejection of the Group's plans to purchase insulation provider Xtratherm,
bolt-on acquisition opportunities remain plentiful with a move into North
America the most likely option. Kingspan expects `substantial' earnings growth
for 2006 as a whole and 2007 order books should see some volume benefit from the
recent implementation of the new UK building regulations.
GRAFTON GROUP reported a mixed set of interim results with continued
strength in Irish merchanting and DIY operations offset by a mixed sales and
margin performance in the Group's UK merchanting operations. The Group saw like
for like ("LFL") merchanting sales decline by 1.7% in the first half, which
contributed to an 80 basis point decline in UK operating margins in the period.
However, UK merchanting volumes have recovered in tandem with housing
transactions and the positive trend in LFL sales has been restored in the second
half, which will benefit operating margins and profit for the full year. Grafton
still retains huge scope for acquisitive and organic growth, given its UK
merchanting market share (9%) while, longer term, it is likely that the business
4
model will be applied to a third jurisdiction in either Western Europe or
Scandinavia.
IAWS GROUP produced a strong set of results for fiscal 2006 with revenues
ahead by almost 11% to A1.56 billion and EPS and DPS advancing 14% to 81.6c and
13.5c, respectively. The Group also announced the acquisition of U.S. sweet
baked goods specialist Otis Spunkmeyer for $561 million. The deal will be
earnings accretive from 2007 and returns enhancing by July 2008. Otis gives the
group a presence in the high growth U.S. food service market and it also
compliments existing North American operations including La Brea Bakery and the
Tim Hortons joint venture. The group also announced its intention to move the
Group's lower growth agri-businesses into a separate division named Origin
Enterprises.
CURRENT OUTLOOK
The Irish economic environment remains strong and the GDP growth forecast
of 5.5%, for 2007, should provide a strong backdrop for Irish corporates over
the coming months. Despite the risks posed by rising inflationary pressures and
a slowing U.S. economy, the international outlook remains broadly positive. This
should provide strong support for those Irish companies that are exposed to the
international economy. Irish market valuations remain undemanding with the
benchmark ISEQ index trading on 13.3x next year's earnings and yielding 2.5%.
Sincerely,
/S/ PETER HOOPER
Peter Hooper
Chairman
December 22, 2006
5
INVESTMENT SUMMARY (UNAUDITED)
TOTAL RETURN (%)
MARKET VALUE NET ASSET VALUE (A)
AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL
One Year 52.47 52.47 45.97 45.97
Three Year 144.15 34.62 119.81 29.99
Five Year 226.46 28.68 185.18 23.30
Ten Year 293.75 14.68 218.73 12.28
PER SHARE INFORMATION AND RETURNS
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
------------------------------------------------------------------------------------------------
Net Asset
Value ($) 19.99 21.36 19.75 20.06 13.28 11.04 16.29 20.74 24.36 32.55
Income
Dividends ($) (0.22) (0.07) -- (0.13) (0.01) (0.03) -- (0.089) (0.03) (0.16)
Capital Gains
Other
Distributions ($) (0.36) (0.70) (1.14) (1.60) (2.65) (0.69) -- -- -- (1.77)
Total
Return (%) (a) 22.46 11.68 (2.79) 13.27 (23.76) (12.07) 47.55 28.14 17.51 45.97
NOTES
(a) Total investment returns reflect changes in net asset value per share during
each period and assume that dividends and capital gains distributions, if
any, were reinvested. These percentages are not an indication of the
performance of a shareholder's investment in the Fund based on market price.
PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE OF THE FUND.
6
PORTFOLIO BY MARKET SECTOR AS OF OCTOBER 31, 2006
(PERCENTAGE OF NET ASSETS)
[GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA POINTS
Construction and Building Materials 29.31%
Financial 19.82%
Other Assets 7.71%
Food and Beverages 15.25%
Health Care Services 5.36%
Transportation 5.45%
Business Services 5.54%
Diversified Financial Services 4.04%
Publishing and News 3.48%
Food and Agriculture 4.04%
TOP 10 HOLDINGS BY ISSUER AS OF OCTOBER 31, 2006
HOLDING SECTOR % OF NET ASSETS
------- ------ ---------------
Allied Irish Banks PLC Financial 15.89%
CRH PLC Construction and Building Materials 15.31%
Kerry Group PLC, Series A Food and Beverages 6.95%
C&C Group PLC Food and Beverages 6.59%
Kinspan Group PLC Construction and Building Materials 6.35%
Grafton GRP PLC-UTS Construction and Building Materials 5.60%
Ryanair Holding PLC Transportation 4.86%
DCC PLC Business Services 4.37%
IAWS Group PLC Food and Agriculture 4.04%
Irish Life & Permanent PLC Diversified Financial Services 4.04%
7
THE NEW IRELAND FUND, INC.
PORTFOLIO HOLDINGS
--------------------------------------------------------------------------------
Value (U.S.)
October 31, 2006 Shares (Note A)
--------------------------------------------------------------------------------
COMMON STOCKS (98.84%)
COMMON STOCKS OF IRISH COMPANIES (97.19%)
BUSINESS SERVICES (5.54%)
CPL Resources PLC 260,475 $ 1,778,656
DCC PLC 243,763 6,595,927
------------
8,374,583
------------
BUSINESS SUPPORT SERVICES (2.03%)
Veris PLC* 500,000 3,063,257
------------
COMPUTER SOFTWARE AND SERVICES (0.60%)
IONA Technologies PLC-ADR* 169,300 900,676
------------
CONSTRUCTION AND BUILDING MATERIALS (29.31%)
CRH PLC 654,474 23,130,633
Grafton Group PLC-UTS 576,174 8,457,143
Kingspan Group PLC 451,663 9,592,681
McInerney Holdings PLC 183,292 3,102,124
------------
44,282,581
------------
DIVERSIFIED FINANCIAL SERVICES (4.04%)
Irish Life & Permanent PLC 248,182 6,097,800
------------
FINANCIAL (19.82%)
Allied Irish Banks PLC 881,321 24,016,193
FBD Holdings PLC 117,402 5,933,936
------------
29,950,129
------------
FOOD & AGRICULTURE (4.04%)
IAWS Group PLC 277,427 6,108,154
------------
FOOD AND BEVERAGES (15.25%)
C&C Group PLC 599,170 9,957,108
Fyffes PLC 552,258 1,198,293
Greencore Group PLC 273,386 1,395,753
Kerry Group PLC, Series A 434,434 10,496,550
------------
23,047,704
------------
HEALTH CARE SERVICES (5.36%)
ICON PLC-Sponsored ADR* 95,368 3,421,804
United Drug PLC 996,401 4,680,089
------------
8,101,893
------------
8
THE NEW IRELAND FUND, INC.
PORTFOLIO HOLDINGS (CONTINUED)
--------------------------------------------------------------------------------
Value (U.S.)
October 31, 2006 Shares (Note A)
--------------------------------------------------------------------------------
COMMON STOCKS (CONTINUED)
PUBLISHING AND NEWS (3.48%)
Independent News & Media PLC 1,564,683 $ 5,252,357
------------
REAL ESTATE DEVELOPMENT (0.07%)
Blackrock International Land PLC* 218,009 105,738
------------
TECHNOLOGY (2.20%)
Horizon Technology Group PLC* 1,321,900 1,704,088
Norkom Group PLC* 818,699 1,619,676
------------
3,323,764
------------
TRANSPORTATION (5.45%)
Aer Lingus Group PLC* 249,183 900,071
Ryanair Holdings PLC* 650,000 7,342,244
------------
8,242,315
------------
TOTAL COMMON STOCKS OF IRISH COMPANIES
(Cost $57,632,637) 146,850,951
------------
COMMON STOCKS OF UNITED KINGDOM COMPANIES (1.65%)
(Cost U.S. $1,991,643)
CONSULTING SERVICES (1.65%)
RPS Group PLC 563,298 2,503,212
------------
TOTAL INVESTMENT COMPANIES BEFORE
FOREIGN CURRENCY ON DEPOSIT
(Cost $59,624,280) $149,354,163
------------
9
THE NEW IRELAND FUND, INC.
PORTFOLIO HOLDINGS (CONTINUED)
--------------------------------------------------------------------------------
Face Value (U.S.)
October 31, 2006 Value (Note A)
--------------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT (0.22%)
British Pounds Sterling (pound) 7,703 $ 14,691
Euro (euro) 246,150 314,176
------------
TOTAL FOREIGN CURRENCY ON DEPOSIT
(Cost $323,648)** 328,867
------------
TOTAL INVESTMENTS (99.06%)
(Cost $59,947,928) 149,683,030
OTHER ASSETS AND LIABILITIES (0.94%) 1,418,911
------------
NET ASSETS (100.00%) $151,101,941
============
-----------------------------------------------------------------------------
* Non-income producing security.
** Foreign currency held on deposit at JPMorgan Chase & Co.
ADR -American Depository Receipt traded in U.S. dollars.
UTS -Units
10
THE NEW IRELAND FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
--------------------------------------------------------------------------------
October 31, 2006
--------------------------------------------------------------------------------
ASSETS:
Investments at value (Cost $59,624,280)
See accompanying schedule U.S.$149,354,163
Cash 3,036,147
Foreign currency (Cost $323,648) 328,867
Foreign currency contracts appreciation 4,715
Dividends receivable 366,754
Prepaid expenses 63,930
------------
Total Assets 153,154,576
------------
LIABILITIES:
Payable for investments purchased 1,817,666
Investment advisory fee payable (Note B) 82,679
Printing fees payable 43,237
Accrued audit fees payable 40,104
Administration fee payable (Note B) 22,681
Custodian fees payable (JPMorgan Chase &Co.) (Note B) 17,454
Directors' fees and expenses (Note C) 13,149
Accrued legal fees payable 9,843
Accrued expenses and other payables 5,822
------------
Total Liabilities 2,052,635
------------
NET ASSETS U.S.$151,101,941
============
AT OCTOBER 31, 2006 NET ASSETS CONSISTED OF:
Common Stock, U.S. $.01 Par Value -
Authorized 20,000,000 Shares
Issued and Outstanding 4,641,661 Shares U.S.$ 46,417
Additional Paid-in Capital 49,079,604
Undistributed Net Investment Income 1,127,060
Accumulated Net Realized Gain 11,110,263
Net unrealized Appreciation of Securities,
Foreign Currency and Net Other Assets 89,738,597
------------
TOTAL NET ASSETS U.S.$151,101,941
============
NET ASSET VALUE PER SHARE
(Applicable to 4,641,661 outstanding shares)
(authorized 20,000,000 shares)
(U.S. $151,101,941 / 4,641,661) U.S.$ 32.55
============
See Notes to Financial Statements.
11
THE NEW IRELAND FUND, INC.
STATEMENT OF OPERATIONS
--------------------------------------------------------------------------------
For the Year Ended
October 31, 2006
--------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends U.S.$ 2,810,527
Interest 22,174
------------
TOTAL INVESTMENT INCOME 2,832,701
------------
EXPENSES
Investment advisory fee (Note B) $ 877,582
Administration fee (Note B) 238,275
Directors' fees and expenses (Note C) 188,166
Audit fees 42,073
Compliance fees 57,615
Legal fees 73,276
Custodian fees (Note B) 52,165
Printing fees 47,072
Other 179,595
------------
TOTAL EXPENSES 1,755,819
------------
NET INVESTMENT INCOME U.S.$ 1,076,882
------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE D)
Realized gain on:
Securities transactions 11,110,263
Foreign currency transactions 50,893
------------
Net realized gain on investments during the year 11,161,156
------------
Net change in unrealized appreciation of:
Securities 35,072,325
Foreign currency and net other assets 16,513
------------
Net change in unrealized appreciation of
investments during the year 35,088,838
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 46,249,994
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS U.S.$ 47,326,876
============
See Notes to Financial Statements.
12
THE NEW IRELAND FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
--------------------------------------------------------------------------------
Year Ended Year Ended
October 31, 2006 October 31, 2005
--------------------------------------------------------------------------------
Net investment income U.S.$ 1,076,882 U.S.$ 746,026
Net realized gain on investments 11,161,156 10,748,789
Net unrealized appreciation of
investments, foreign currency holdings and
net other assets 35,088,838 5,245,601
-------------- -----------
Net increase in net assets resulting from
operations 47,326,876 16,740,416
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (722,941) (140,656)
Net realized gains (7,997,529) --
-------------- -----------
Net increase in net assets 38,606,406 16,599,760
-------------- -----------
CAPITAL SHARE TRANSACTIONS:
Value of 60,950 and 165,350 shares
repurchased, respectively (Note F) (1,460,049) (3,663,755)
Value of shares issued to shareholders in
connection with a stock distribution (Note E) 3,766,311 --
-------------- -----------
NET INCREASE/(DECREASE) IN NET ASSETS
RESULTING FROM CAPITAL SHARE
TRANSACTIONS 2,306,262 (3,663,755)
-------------- -----------
NET ASSETS
Beginning of year 110,189,273 97,253,268
-------------- -----------
End of period (Including undistributed
net investment income of $1,127,060
and $733,578, respectively) U.S.$ 151,101,941 U.S.$110,189,273
============== ============
See Notes to Financial Statements.
13
THE NEW IRELAND FUND, INC.
FINANCIAL HIGHLIGHTS (FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH YEAR)
--------------------------------------------------------------------------------
Year Ended October 31,
-----------------------------------------------------------------
2006 2005 2004 2003 2002
------------------------------------------------------------------------------------------------
Operating Performance:
Net Asset Value,
Beginning of Year U.S.$ 24.36 $ 20.74 $ 16.29 $ 11.04 $ 13.28
-------- -------- -------- -------- --------
Net Investment Income/(Loss) 0.23 0.16 (0.00)# 0.07 (0.08)
Net Realized and Unrealized
Gain/(Loss) on Investments 9.98 3.38 4.49 5.08 (1.50)
-------- -------- -------- -------- --------
Net Increase/(Decrease) in
Net Assets Resulting from
Investment Operations 10.21 3.54 4.49 5.15 (1.58)
-------- -------- -------- -------- --------
Distributions to Shareholders from:
Net Investment Income (0.16) (0.03) (0.09) -- (0.03)
Net Realized Gains (1.77) -- -- -- (0.69)
-------- -------- -------- -------- --------
Total from Distributions (1.93) (0.03) (0.09) -- (0.72)
-------- -------- -------- -------- --------
Anti-Dilutive/(Dilutive) Impact
of Capital Share Transactions (0.09)++ 0.11 0.05 0.10 0.06+
-------- -------- -------- -------- --------
Net Asset Value,
End of Period U.S.$ 32.55 $ 24.36 $ 20.74 $ 16.29 $ 11.04
======== ======== ======== ======== ========
Share Price, End of Period U.S.$ 30.67 $ 21.95 $ 18.46 $ 13.81 $ 8.67
======== ======== ======== ======== ========
Total Investment Return (a) 45.97% 17.51% 28.14% 47.55% (12.07)%
======== ======== ======== ======== ========
Total Investment Return (b) 52.47% 19.07% 34.47% 59.28% (16.05)%
======== ======== ======== ======== ========
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net Assets,
End of Year (000's) U.S.$151,102 $110,189 $97,253 $77,790 $54,856
Ratio of Net Investment
Income/(Loss) to Average
Net Assets 0.86% 0.66% (0.00)%++ 0.54% (0.64)%
Ratio of Operating Expenses
to Average Net Assets 1.40% 1.34% 1.80% 1.78% 2.10%
Portfolio Turnover Rate 11% 13% 5% 10% 13%
(a) Based on share net asset value and reinvestment of distributions at the
price obtained under the Dividend Reinvestment and Cash Purchase Plan.
(b) Based on share market price and reinvestment of distributions at the price
obtained under the Dividend Reinvestment and Cash Purchase Plan.
+ Amount represents $0.16 per share impact for shares repurchased by the
Fund under the Share Repurchase Program and $(0.10) per share impact for
the new shares issued as Capital Gain Stock Distribution.
++ Amount represents $0.03 per share impact for shares repurchased by the
Fund under the Share Repurchase Program and $(0.12) per share impact for
the new shares issued as Capital Gain Stock Distribution.
# Amount represents less than $0.01 per share.
++ Amount represents less than 0.01%.
14
THE NEW IRELAND FUND, INC.
NOTES TO FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
The New Ireland Fund, Inc. (the "Fund") was incorporated under the laws of
the State of Maryland on December 14, 1989 and is registered as a
non-diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended. The Fund's investment objective is long-term
capital appreciation through investment primarily in equity securities of Irish
Companies. The Fund is designed for U.S. and other investors who wish to
participate in the Irish securities markets. In order to take advantage of
significant changes that have occurred in the Irish economy over the past few
years and to advance the Fund's investment objective, the investment strategy
now has a bias towards Ireland's growth companies.
Under normal circumstances, the Fund will invest at least 80% of its total
assets in equity and fixed income securities of Irish companies. To the extent
that the balance of the Fund's assets is not so invested, it will have the
flexibility to invest the remaining assets in non-Irish companies that are
listed on a recognized stock exchange. The Fund may invest up to 25% of its
assets in equity securities that are not listed on any securities exchange.
A. SIGNIFICANT ACCOUNTING POLICIES:
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 reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
SECURITY VALUATION: Securities listed on a stock exchange for which market
quotations are readily available are valued at the closing prices on the date of
valuation, or if no such closing prices are available, at the last bid price
quoted on such day. If there are no such quotations available for the date of
valuation, the last available closing price will be used. The value of
securities and other assets for which no market quotations are readily
available, or whose values have been materially affected by events occurring
before the Funds' pricing time but after the close of the securities' primary
markets, are valued by methods deemed by the Board of Directors to represent
fair value. Short-term securities that mature in 60 days or less are valued at
amortized cost.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: Distributions are determined
on a tax basis and may differ from net investment income and realized capital
gains for financial reporting purposes. Differences may be permanent or
temporary. Permanent differences are reclassified among capital accounts in the
financial statements to reflect their tax character. Temporary differences arise
when certain items of income, expense, gain or loss are recognized in different
periods for financial statement and tax purposes; these differences will reverse
at some point in the future. Differences in classification may also result from
the treatment of short-term gain as ordinary income for tax purposes.
As of October 31, 2006, the components of distributable earnings on a tax
basis were as follows:
Ordinary Income $ 1,248,737
Accumulated Gains 10,988,586
Unrealized Appreciation 89,738,597
---------------
$ 101,975,920
---------------
15
THE NEW IRELAND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
For tax purposes, at October 31, 2006 and October 31, 2005, the Fund
distributed $734,293 and $140,656, respectively, of ordinary income. The Fund
also distributed, for tax purposes at October 31, 2006, $7,986,177 of long-term
capital gains.
During the year ended October 31, 2006, the fund realized net foreign
currency gains of $50,893, which increased distributable net income for tax
purposes; accordingly such gains have been reclassified to undistributed net
investment income from accumulated net realized gains.
In 2004, the Fund submitted an application to the Securities and Exchange
Commission seeking exemptive relief for the implementation of a managed
distribution program. At the meeting of the Board of Directors held on December
5, 2006, the Directors decided to withdraw this application because they felt
that, at the present time, this was in the best interests of shareholders due to
the reduced level of discount and the strong performance of the Fund.
U.S. FEDERAL INCOME TAXES: It is the Fund's intention to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended, and distribute all of its taxable income
within the prescribed time. It is also the intention of the Fund to make
distributions in sufficient amounts to avoid Fund excise tax. Accordingly, no
provision for U.S. Federal income taxes is required.
CURRENCY TRANSLATION: The books and records of the Fund are maintained in
U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the
spot rate of such currencies against U.S. dollars by obtaining from FT-IDC each
day the current 4:00pm London time spot rate and future rate (the future rates
are quoted in 30-day increments) on foreign currency contracts. Net realized
foreign currency gains and losses resulting from changes in exchange rates
include foreign currency gains and losses between trade date and settlement date
on investment securities transactions, foreign currency transactions and the
difference between the amounts of interest and dividends recorded on the books
of the Fund and the amount actually received. The portion of foreign currency
gains and losses related to fluctuation in exchange rates between the initial
purchase trade date and subsequent sale trade date is included in realized gains
and losses on security transactions.
FORWARD FOREIGN CURRENCY CONTRACTS: The Fund may enter into forward foreign
currency contracts for non-trading purposes in order to protect investment
securities and related receivables and payables against future changes in
foreign currency exchange rates. Fluctuations in the value of such contracts are
recorded as unrealized gains or losses; realized gains or losses include net
gains or losses on contracts which have terminated by settlements or by entering
into offsetting commitments. Risks associated with such contracts include
movement in the value of the foreign currency relative to the U.S. dollar and
the ability of the counterparty to perform. There were no such contracts open in
the Fund as of October 31, 2006.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities sold
are recorded on the identified cost basis. Dividend income is recorded on the
ex-dividend date except that certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date. Non-cash
dividends, if any, are recorded at the fair market value of the securities
received. Interest income is recorded on the accrual basis.
NEW ACCOUNTING PRONOUNCEMENTS:
In July 2006, the Financial Accounting Standards Board (FASB) issued FASB
Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes."
This
16
THE NEW IRELAND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
pronouncement provides guidance on the recognition, measurement,
classification, and disclosures related to uncertain tax positions, along with
any related interest and penalties. FIN 48 is effective for fiscal years
beginning after December 15, 2006. The impact from the adoption of FIN 48 is
being evaluated, but is not anticipated to have a material effect on the
financial statements.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157 Fair Value Measurements ("SFAS 157") was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
B. MANAGEMENT SERVICES:
The Fund has entered into an investment advisory agreement (the "Investment
Advisory Agreement") with Bank of Ireland Asset Management (U.S.) Limited ("Bank
of Ireland Asset Management"), an indirect wholly-owned subsidiary of The
Governor and Company of the Bank of Ireland ("Bank of Ireland"). Under the
Investment Advisory Agreement, the Fund pays a monthly fee at an annualized rate
equal to 0.75% of the value of the average weekly net assets of the Fund up to
the first $100 million and 0.50% of the value of the average weekly net assets
of the Fund on amounts in excess of $100 million. In addition, Bank of Ireland
Asset Management provides investor services to existing and potential
shareholders.
The Fund has entered into an administration agreement (the "Administration
Agreement") with PFPC Inc. The Fund pays PFPC Inc. an annual fee payable
monthly. During the year ended October 31, 2006, the Fund incurred expenses of
U.S $238,274 in administration fees to PFPC Inc.
The Fund has entered into an agreement with JP Morgan Chase & Co. to serve
as custodian of the Fund's assets. During the year ended October 31, 2006 the
Fund incurred expenses for JP Morgan Chase & Co. of U.S. $52,165.
For the year ended October 31, 2006, the Fund incurred total brokerage
commissions of U.S. $43,457, of which U.S. $15,135 was paid to Davy
Stockbrokers, an affiliate of Bank of Ireland Asset Management.
C. DIRECTORS FEES:
The Fund currently pays each Director who is not a managing director,
officer or employee of Bank of Ireland Asset Management or any affiliate
thereof, an annual retainer of U.S. $14,500, plus U.S. $1,500 for each meeting
of the Board of Directors attended in person or via telephone and any
shareholder meeting attended in person not held on the same day as a meeting of
the Board. An additional U.S. $1,500 is paid for each meeting of a Committee of
the Board attended in person or via telephone. The Fund pays the Chairman of the
Board of Directors of the Fund an additional fee of U.S. $35,000. Also, the Fund
pays the Chairperson of the Audit Committee an additional U.S. $1,500 for each
meeting of the Audit Committee attended. Each Director is reimbursed for travel
and certain out-of-pocket expenses.
D. PURCHASES AND SALES OF SECURITIES:
The cost of purchases and proceeds from sales of securities for the period
ended October 31, 2006 excluding U.S. government and short-term investments,
aggregated U.S. $13,461,204 and U.S. $17,979,055, respectively.
17
THE NEW IRELAND FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
--------------------------------------------------------------------------------
At October 31, 2006, aggregate gross unrealized appreciation for all
securities (excluding foreign currency on deposit) in which there was an excess
value over tax cost was U.S. $91,652,748 and aggregate gross unrealized
depreciation for all securities (excluding foreign currency on deposit) in which
there was an excess of tax cost over value was U.S. $1,922,864. Also, on this
date, the tax cost of securities for Federal Income Tax purposes is $59,624,280.
At October 31, 2006, there were no permanent tax and book differences in
gross unrealized appreciation/depreciation of securities or the cost basis of
securities.
E. COMMON STOCK:
For the year ended October 31, 2006, the Fund issued 179,433 shares in
connection with stock distribution in the amount of $3,766,311.
On December 14, 1989, 9,000 shares of the Fund's common stock were issued
to Bank of Ireland Asset Management. On October 31, 2006 Bank of Ireland Asset
Management held 12,609 shares representing 0.27% of the Fund's total issued
shares.
On October 31, 2006, Bank of Ireland Asset Management controlled 288,883
shares, representing 6.22% of the Funds outstanding shares. The Wachovia
Corporation held 650,287 shares, as stated in a 13G filed with the Securities
and Exchange Commission on February 13, 2006, representing 14.01% of the Funds
outstanding shares.
F. SHARE REPURCHASE PROGRAM:
In accordance with Section 23(c) of the Investment Company Act of 1940, as
amended, the Fund hereby gives notice that it may from time to time repurchase
shares of the Fund in the open market at the option of the Board of Directors
and upon such terms as the Directors shall determine.
For the year ended October 31, 2006, the Fund repurchased 60,950 (1.31% of
the shares outstanding at October 31, 2005 year end) of its shares for a total
cost of $1,460,049, at an average discount of 9.85% of net asset value.
For the year ended October 31, 2005, the Fund repurchased 165,350 (3.53% of
the shares outstanding at October 31, 2004 year end) of its shares for a total
cost of $3,663,755, at an average discount of 12.07% of net asset value.
G. MARKET CONCENTRATION:
Because the Fund concentrates its investments in securities issued by
corporations in Ireland, its portfolio may be subject to special risks and
considerations typically not associated with investing in a broader range of
domestic securities. In addition, the Fund is more susceptible to factors
adversely affecting the Irish economy than a comparable fund not concentrated in
these issuers to the same extent.
H. SUBSEQUENT EVENT:
On November 6, 2006, the Fund declared a stock distribution of $2.64 per
share, which represents a distribution from net investment income of $0.24 and
realized capital gains of $2.40, being $0.03 short-term capital gains and $2.37
long-term capital gains, to shareholders of record November 14, 2006, payable
December 28, 2006.
18
THE NEW IRELAND FUND, INC.
REPORT OF INDEPENDENT PUBLIC REGISTERED ACCOUNTING FIRM
--------------------------------------------------------------------------------
To the Board of Directors and Shareholders of
THE NEW IRELAND FUND, INC.:
We have audited the accompanying statement of assets and liabilities of The
New Ireland Fund, Inc. (the "Fund"), including the portfolio holdings, as of
October 31, 2006, and the related statement of operations for the year then
ended and statements of changes in net assets for each year in the two-year
period then ended and the financial highlights for each year in the four-year
period then ended. The financial highlights for the year ended October 31, 2002
were audited by other auditors. Those auditors expressed an unqualified opinion
on those financial statements in their report dated December 6, 2002. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audits to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
The Fund is not required to have, nor were we engaged to perform an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. 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, as well as evaluating the overall
financial statement presentation Our procedures included confirmation of
securities owned as of October 31, 2006, by correspondence with the Fund's
custodian and brokers; where replies were not received from the brokers, we
performed other auditing procedures. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Fund as of October 31, 2006, the results of its operations for the year then
ended, changes in net assets for each year in the two-year period then ended and
financial highlights for each year in the four-year period then ended, in
conformity with accounting principles generally accepted in the United States of
America.
[GRAPHIC OMITTED]
GRANT THORNTON LLP SIG
New York, New York
December 5, 2006
19
ADDITIONAL INFORMATION (UNAUDITED)
--------------------------------------------------------------------------------
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
The Fund will distribute to shareholders, at least annually, substantially
all of its net income from dividends and interest payments and expects to
distribute substantially all its net realized capital gains annually. Pursuant
to the Dividend Reinvestment and Cash Purchase Plan approved by the Fund's Board
of Directors (the "Plan"), each shareholder will be deemed to have elected,
unless American Stock Transfer & Trust Company (the "Plan Agent") is instructed
otherwise by the shareholder in writing, to have all distributions automatically
reinvested by the Plan Agent in Fund shares pursuant to the Plan. Distributions
with respect to Fund shares registered in the name of a broker-dealer or other
nominee (i.e., in "street name") will be reinvested by the broker or nominee in
additional Fund shares under the Plan, unless the service is not provided by the
broker or nominee or the shareholder elects to receive distributions in cash.
Investors who own Fund shares registered in street names may not be able to
transfer those shares to another broker-dealer and continue to participate in
the Plan. These shareholders should consult their broker-dealer for details.
Shareholders who do not participate in the Plan will receive all distributions
in cash paid by check in U.S. dollars mailed directly to the shareholder by
American Stock Transfer & Trust Company, as paying agent. Shareholders who do
not wish to have distributions automatically reinvested should notify the Fund,
in care of the Plan Agent for The New Ireland Fund, Inc.
The Plan Agent will serve as agent for the shareholders in administering
the Plan. If the Directors of the Fund declare an income dividend or a capital
gains distribution payable either in the Fund's common stock or in cash, as
shareholders may have elected, non-participants in the Plan will receive cash
and participants in the Plan will receive common stock to be issued by the Fund.
If the market price per share on the valuation date equals or exceeds net asset
value per share on that date, the Fund will issue new shares to participants at
net asset value or, if the net asset value is less than 95% of the market price
on the valuation date, then at 95% of the market price. The valuation date will
be the dividend or distribution payment date or, if that date is not a trading
day on the New York Stock Exchange, Inc. ("New York Stock Exchange"), the next
preceding trading day. If the net asset value exceeds the market price of Fund
shares at such time, participants in the Plan will be deemed to have elected to
receive shares of stock from the Fund, valued at market price on the valuation
date. If the Fund should declare a dividend or capital gains distribution
payable only in cash, the Plan Agent as agent for the participants, will buy
Fund shares in the open market, on the New York Stock Exchange or elsewhere,
with the cash in respect of such dividend or distribution, for the participants'
account on, or shortly after, the payment date.
Participants in the Plan have the option of making additional cash payments
to the Plan Agent, annually, in any amount from U.S. $100 to U.S. $3,000, for
investment in the Fund's common stock. The Plan Agent will use all funds
received from participants (as well as any dividends and capital gain
distributions received in cash) to purchase Fund shares in the open market on or
about January 15 of each year. Any voluntary cash payments received more than
thirty days prior to such date will be returned by the Plan Agent, and interest
will not be paid on any uninvested cash payments. To avoid unnecessary cash
accumulations and to allow ample time for receipt and processing by the Plan
Agent, it is suggested that the participants send in voluntary cash payments to
be received by the Plan Agent approximately ten days before January 15. A
participant may withdraw a voluntary cash payment by written notice, if the
notice is received by the Plan Agent not less than forty-eight hours before such
payment is to be invested.
20
ADDITIONAL INFORMATION (CONTINUED) (UNAUDITED)
--------------------------------------------------------------------------------
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including information
needed by shareholders for personal and U.S. Federal tax records. Shares in the
account of each Plan participant will be held by the Plan Agent in
non-certificated form in the name of the participant, and each shareholder's
proxy will include those shares purchased pursuant to the Plan.
In the case of shareholders such as banks, brokers or nominees who hold
shares for beneficial owners, the Plan Agent will administer the Plan on the
basis of the number of shares certified from time to time by the shareholder as
representing the total amount registered in the shareholder's name and held for
the account of beneficial owners who are participating in the Plan.
There is no charge to participants for reinvesting dividends or capital
gains distributions. The Plan Agent's fee for the handling of the reinvestment
of dividends and distributions will be paid by the Fund. However, each
participant's account will be charged a pro rata share of brokerage commissions
incurred with respect to the Plan Agent's open market purchases in connection
with the reinvestment of dividends or capital gains distributions. A participant
will also pay brokerage commissions incurred in purchases in connection with the
reinvestment of dividends or capital gains distributions. A participant will
also pay brokerage commissions incurred in purchases from voluntary cash
payments made by the participant. Brokerage charges for purchasing small amounts
of stock of individual accounts through the Plan are expected to be less than
the usual brokerage charges for such transactions, because the Plan Agent will
be purchasing stock for all participants in blocks and prorating the lower
commission thus attainable.
The automatic reinvestment of dividends and distributions will not relieve
participants of any U.S. Federal income tax which may be payable on such
dividends or distributions.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan as
applied to any voluntary cash payment made and any dividend or distribution paid
subsequent to notice of the change sent to all shareholders at least ninety days
before the record date for such dividend or distribution. The Plan also may be
amended or terminated by the Plan Agent with at least ninety days written notice
to all shareholders. All correspondence concerning the Plan should be directed
to the Plan Agent for The New Ireland Fund, Inc. in care of American Stock
Transfer & Trust Company, 40 Wall Street, New York, New York, 10005, telephone
number (718) 921-8283.
21
ADDITIONAL INFORMATION (CONTINUED) (UNAUDITED)
--------------------------------------------------------------------------------
MEETING OF SHAREHOLDERS
--------------------------------------------------------------------------------
On June 6, 2006 the Fund held its Annual Meeting of Shareholders. The
following Directors were elected by the following votes: Peter J. Hooper
3,685,400 For; 221,170 Abstaining; George G. Moore 3,837,774 For; 68,795
Abstaining; Margaret Duffy 3,685,055 For; 221,515 Abstaining. Brendan Donohoe,
Denis P. Kelleher and James M. Walton continue to serve in their capacities as
Directors of the Fund.
FUND'S PRIVACY POLICY
--------------------------------------------------------------------------------
The New Ireland Fund, Inc. appreciates the privacy concerns and
expectations of its registered shareholders and safeguarding their nonpublic
personal information ("Information") is of great importance to the Fund.
The Fund collects Information pertaining to its registered shareholders,
including matters such as name, address, tax I.D. number, Social Security number
and instructions regarding the Fund's Dividend Reinvestment Plan. The
Information is collected from the following sources:
o Directly from the registered shareholder through data provided on
applications or other forms and through account inquiries by mail,
telephone or e-mail.
o From the registered shareholder's broker as the shares are initially
transferred into registered form.
Except as permitted by law, the Fund does not disclose any Information
about its current or former registered shareholders to anyone. The disclosures
made by the Fund are primarily to the Fund's service providers as needed to
maintain account records and perform other services for the Fund's shareholders.
The Fund maintains physical, electronic, and procedural safeguards to protect
the shareholders' Information in the Fund's possession.
The Fund's privacy policy applies only to its individual registered
shareholders. If you own shares of the Fund through a third party broker, bank
or other financial institution, that institution's privacy policies will apply
to you and the Fund's privacy policy will not.
PORTFOLIO INFORMATION
--------------------------------------------------------------------------------
The Fund files its complete schedule of portfolio holdings with the
Securities and Exchange Commission ("SEC") for the first and third quarters of
each fiscal year on Form N-Q. The Fund's Form N-Q is available (1) by calling
1-800-468-6475; (2) on the Fund's website located at
HTTP://WWW.NEWIRELANDFUND.COM; (3) on the SEC's website at HTTP://WWW.SEC.GOV;
or (4) for review and copying at the SEC's Public Reference Room ("PRR") in
Washington, DC. Information regarding the operation of the PRR may be obtained
by calling 1-800-SEC-0330.
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22
ADDITIONAL INFORMATION (CONTINUED) (UNAUDITED)
--------------------------------------------------------------------------------
PROXY VOTING INFORMATION
--------------------------------------------------------------------------------
A description of the policies and procedures that the Fund uses to
determine how to vote proxies relating to portfolio securities held by the Fund
is available, without charge and upon request, by calling 1-800-468-6475. This
information is also available from the EDGAR database or the SEC's website at
HTTP://WWW.SEC.GOV. Information regarding how the Fund voted proxies relating to
portfolio securities during the most recent twelve-month period ended June 30 is
available at HTTP://WWW.SEC.GOV.
CERTIFICATIONS
--------------------------------------------------------------------------------
The Fund's president has certified to the New York Stock Exchange that, as
of June 16, 2006, he was not aware of any violation by the fund of applicable
NYSE corporate governance listing standards. The Fund's reports to the
Securities and Exchange Commission on Forms N-CSR and N-CSRS contain
certifications by the Fund's principal executive officer and principal financial
officer that relate to the fund's disclosure in such reports and that are
required by rule 30a2(a) under the Investment Company Act.
TAX INFORMATION
--------------------------------------------------------------------------------
For non-corporate shareholders 100%, or the maximum amount allowable under
the Jobs and Growth Tax Relief Reconciliation Act of 2003, of income earned by
the Fund for the period November 1, 2005 to October 31, 2006 may represent
qualified dividend income. Final information will be provided in your 2006 1099
Div Form.
For the fiscal year ended October 31, 2006, the Fund designated long-term
capital gains of $10,988,586.
23
BOARD OF DIRECTORS/OFFICERS
--------------------------------------------------------------------------------
LENGTH OF PRINCIPAL NUMBER OF
POSITION(S) TIME OCCUPATION(S) PORTFOLIOS IN
HELD WITH SERVED AND OTHER FUND COMPLEX
NAME, ADDRESS, THE AND TERM DIRECTORSHIPS DURING OVERSEEN BY
AND AGE FUND OF OFFICE* PAST FIVE YEARS DIRECTOR
---------------------------------------------------------------------------------------------------------------------
NON-INTERESTED DIRECTORS:
Peter J. Hooper, 66 Director and Since 1990. President of Hooper Associates- 1
Westchester Financial Chairman of Current Consultants (1994 to present); ,
Center, Suite 1000 the Board term Director, The Ireland United States
50 Main Street expires in Council for Commerce and Industry
White Plains, NY 10606 2009. (1984 to present); Director, Flax
Trust - America (1988 to present);
Director, Children's Medical Research
Foundation (1987 to 2004).
Margaret Duffy, 62 Director Since 2006. Financial Consultant, Director, the Dyson- 1
164 East 72nd Street, Current Kissner-Moran Corporation (2000 to
Suite 7B term present); Partner, Arthur Andersen,
New York, NY 10021 expires in LLP (1981 to 2000); Chairman and
2008. Member of the Board of Directors
of the National Association of
Women Artists (2001 to present);
Director, The Little Sisters of the
Assumption Family Health Services
(2005 to present). Director, The
Ireland United States Council for
Commerce and Industry (1994 to 2005).
Denis P. Kelleher, 67 Director Since 1991. Chief Executive Officer, Wall Street 1
17 Battery Place Current Access-Financial Services (1981 to
New York, NY 10004 term present); Director, Independence
expires in Community Bank (1992 to present);
2007. Chairman and Member of the Board
of Trustees St. John's University
(1998 to present).
George G. Moore, 55 Director Since 2004. Chairman/Chief Executive Officer, 1
8010 Towers Crescent Drive Current TARGUSinfo (1993 to present);
Vienna, VA 22182 term Chairman, AMACAI Information
expires in Corp. (2001 to present).
2009.
James M. Walton, 75 Director Since 1990. Chairman, Vira I. Heinz Endowment 1
Room 3902 Current (1988 to present); Director, FireFly
525 William Penn Place term Power Technologies, LLC,
Pittsburgh, PA 15219 expires in (2003 to present).
2007.
----------------------
* Each Director shall serve until the expiration of his current term and until
his successor is elected and qualified.
24
BOARD OF DIRECTORS/OFFICERS
--------------------------------------------------------------------------------
LENGTH OF PRINCIPAL NUMBER OF
POSITION(S) TIME OCCUPATION(S) PORTFOLIOS IN
HELD WITH SERVED AND OTHER FUND COMPLEX
NAME, ADDRESS, THE AND TERM DIRECTORSHIPS DURING OVERSEEN BY
AND AGE FUND OF OFFICE* PAST FIVE YEARS DIRECTOR
---------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTOR:
Brendan Donohoe, 47** Director and Since 2005. President, Bank of Ireland Asset 1
75 Holly Hill Lane President*** Current Management (U.S.) Limited (2005 to
Greenwich, CT 06830 term present); Director & Regional Director,
expires in Asia/Pacific, BIAM Australia Pty Limited
2008. (2000 to 2005); Director & Regional
Director Asia/Pacific, Bank of Ireland Asset
Management (Japan) Limited (2000 to
2005); Managing Director, BIAM
Australia Pty Limited, (1996 - 2000);
Director, Iridian Asset Management
LLC (2005 to present).
OFFICERS***:
Brendan Donohoe see description above
Lelia Long, 43 Treasurer Since 2002 Senior Vice President & Director,
75 Holly Hill Lane Bank of Ireland Asset Management
Greenwich, CT 06830 (U.S.) Limited (1999 to present);
Director, Iridian Asset Management
LLC (2002 to 2005).
Salvatore Faia, 48 Chief Since 2005 President, Vigilant Compliance
Vigilant Compliance Compliance Services (2005 to present); Senior
186 Dundee Drive, Officer Legal Counsel, PFPC Inc. from
Suite 700 2002 to 2004; Chief Legal Counsel,
Williamstown, NJ 08094 Corviant Corporation (Investment
Adviser, Broker-Dealer and Service
Provider to Investment Advisers
and Separate Account Providers)
from 2001 to 2002; Partner,
Pepper Hamilton LLP (law firm)
from 1997 to 2001.
Vincenzo A. Scarduzio, 34 Secretary Since 2005 Assistant Vice President, Regulatory
760 Moore Road Administration, PFPC Inc.
King of Prussia, PA 19406 (2001 to present).
Colleen Cummings, 35 Assistant Since 2006 Vice President & Director, Client
4400 Computer Drive Treasurer Services & Administration, PFPC
Westborough. MA 01581 Inc. (2004 to present); Senior Manager,
Fund Administration, PFPC Inc.
(1998 to 2004).
----------------------
* Each Director shall serve until the expiration of his current term and until
his successor is elected and qualified.
** Mr. Donohoe is deemed to be an "interested" Director because of his
affiliation with the Investment Advisor.
*** Each officer of the Fund will hold office until a successor has been
elected by the Board of Directors.
25
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THE NEW IRELAND FUND, INC.
DIRECTORS AND OFFICERS
Peter J. Hooper - CHAIRMAN OF THE BOARD
Brendan Donohoe - PRESIDENT AND DIRECTOR
Margaret Duffy - DIRECTOR
Denis P. Kelleher - DIRECTOR
George G. Moore - DIRECTOR
James M. Walton - DIRECTOR
Lelia Long - TREASURER
Colleen Cummings - ASSISTANT TREASURER
Vincenzo Scarduzio - SECRETARY
Salvatore Faia - CHIEF COMPLIANCE OFFICER
PRINCIPAL INVESTMENT ADVISOR
Bank of Ireland Asset Management (U.S.) Limited
75 Holly Hill Lane
Greenwich, Connecticut 06830
ADMINISTRATOR
PFPC Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
CUSTODIANS
JPMorgan Chase & Co.
North America Investment Services
3 Metro Tech - 7th Floor
Brooklyn, New York 11245
SHAREHOLDER SERVICING AGENT
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
LEGAL COUNSEL
Seward & Kissel LLP
One Battery Park Plaza
New York, New York 10004
INDEPENDENT PUBLIC REGISTERED ACCOUNTING FIRM
Grant Thornton LLP
60 Broad Street
New York, NY 10004
CORRESPONDENCE
ALL CORRESPONDENCE SHOULD BE ADDRESSED TO:
The New Ireland Fund, Inc.
c/o PFPC Inc.
99 High Street
27th Floor
Boston, Massachusetts 02110
TELEPHONE INQUIRIES SHOULD BE DIRECTED TO:
1-800-GO-TO-IRL (1-800-468-6475)
WEBSITE ADDRESS:
www.newirelandfund.com
IR-AN 10/06
ITEM 2. CODE OF ETHICS.
(a) The registrant, as of the end of the period covered by this report, has
adopted a code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the registrant
or a third party.
(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, and that relates to any element of
the code of ethics description.
(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are employed
by the registrant or a third party, that relates to one or more of the
items set forth in paragraph (b) of this item's instructions.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
As of the end of the period covered by the report, the registrant's board of
directors has determined that Margaret Duffy is qualified to serve as an audit
committee financial expert serving on its audit committee and that she is
"independent."
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
AUDIT FEES
(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$37,595 (2006) and $35,560 (2005).
AUDIT-RELATED FEES
(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0.00.
TAX FEES
(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $3,605 (2006) and $2,575
(2005).
ALL OTHER FEES
(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0.00.
(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
THE NEW IRELAND FUND, INC.
AUDIT COMMITTEE POLICY
ON
PRE-APPROVAL OF SERVICES PROVIDED BY THE INDEPENDENT ACCOUNTANTS
The Audit Committee of The New Ireland Fund, Inc. (the "Fund") is
charged with the responsibility to monitor the independence of the
Fund's independent accountants. As part of this responsibility, the
Audit Committee must pre-approve any independent accounting firm's
engagement to render audit and/or permissible non-audit services, as
required by law. In evaluating a proposed engagement of the independent
accountants, the Audit Committee will assess the effect that the
engagement might reasonably be expected to have on the accountant's
independence. The Committee's evaluation will be based on:
a review of the nature of the professional services expected
to be provided,
a review of the safeguards put into place by the accounting
firm to safeguard independence, and
periodic meetings with the accounting firm.
POLICY FOR AUDIT AND NON-AUDIT SERVICES PROVIDED TO THE FUNDS
On an annual basis, the scope of audits for the Fund, audit fees and
expenses, and audit-related and non-audit services (and fees proposed
in respect thereof) proposed to be performed by the Fund's independent
accountants will be presented by the Treasurer and the independent
accountants to the Audit Committee for review and, as appropriate,
approval prior to the initiation of such services. Such presentation
shall be accompanied by confirmation by both the Treasurer and the
independent accountants that the proposed services will not adversely
affect the independence of the independent accountants. Proposed
services shall be described in sufficient detail to enable the Audit
Committee to assess the appropriateness of such services and fees, and
the compatibility of the provision of such services with the auditor's
independence. The Committee shall receive periodic reports on the
progress of the audit and other services which are approved by the
Committee or by the Committee Chairman pursuant to authority delegated
in this Policy.
The categories of services enumerated under "Audit Services",
"Audit-related Services", and "Tax Services" are intended to provide
guidance to the Treasurer and the independent accountants as to those
categories of services which the Committee believes are generally
consistent with the independence of the independent accountants and
which the Committee (or the Committee Chairman) would expect upon the
presentation of specific proposals to pre-approve. The enumerated
categories are not intended as an exclusive list of audit,
audit-related or tax services which the Committee (or the Committee
Chairman) would consider for pre-approval.
AUDIT SERVICES
The following categories of audit services are considered to be
consistent with the role of the Fund's independent accountants:
Annual Fund financial statement audits
SEC and regulatory filings and consents
AUDIT-RELATED SERVICES
The following categories of audit-related services are considered to be
consistent with the role of the Fund's independent accountants:
Accounting consultations
Agreed upon procedure reports
Attestation reports
Other internal controlreports
Individual audit-related services that fall within one of these
categories and are not presented to the Audit Committee as part of the
annual pre-approval process will be subject to pre-approval by the
Committee Chairman (or any other Committee member on whom this
responsibility has been delegated) so long as the estimated fee for
those services does not exceed $7,500.
TAX SERVICES
The following categories of tax services are considered to be
consistent with the role of the Fund's independent accountants:
Tax compliance services related to the filing or amendment of
the following:
Federal, state and local income tax compliance; and
Sales and use tax compliance
Timely RIC qualification reviews
Tax distribution analysis and planning
Accounting methods studies
Tax consulting services and related projects
Individual tax services that fall within one of these categories and
are not presented to the Audit Committee as part of the annual
pre-approval process will be subject to pre-approval by the Committee
Chairman (or any other Committee member on whom this responsibility has
been delegated) so long as the estimated fee for those services does
not exceed $7,500.
OTHER NON-AUDIT SERVICES
Certain non-audit services that the independent accountants are legally
permitted to render will be subject to pre-approval by the Committee or
by one or more Committee members to whom the Committee has delegated
this authority and who will report to the full Committee any
pre-approval decisions made pursuant to this Policy. Non-audit services
presented for pre-approval pursuant to this paragraph will be
accompanied by a confirmation from both the Treasurer and the
independent accountants that the proposed services will not adversely
affect the independence of the independent accountants.
PROSCRIBED SERVICES
The Fund's independent accountants will NOT render services in the
following categories of non-audit services:
Bookkeeping or other services related to the accounting
records or financial statements of the Fund
Financial information systems design and implementation
Appraisal or valuation services, fairness opinions, or
contribution-in-kind reports
Actuarial services
Internal audit outsourcing services
Management functions or human resources
Broker or dealer, investment adviser, or investment banking
services
Legal services and expert services unrelated to the audit
Any other service that the Public Company Accounting Oversight
Board determines, by regulation, is impermissible.
PRE-APPROVAL OF NON-AUDIT SERVICES PROVIDED TO BIAM AND BIAM AFFILIATES
Certain non-audit services provided to Bank of Ireland Asset Management
(U.S.) Limited ("BIAM") or any entity controlling, controlled by or
under common control with BIAM that provides ongoing services to the
Fund ("BIAM Affiliates") will be subject to pre-approval by the Audit
Committee. The only non-audit services provided to these entities that
will require pre-approval are those RELATED DIRECTLY TO THE OPERATIONS
AND FINANCIAL REPORTING OF THE FUND. Individual projects that are not
presented to the Audit Committee as part of the annual pre-approval
process, will be subject to pre-approval by the Committee Chairman (or
any other Committee member on whom this responsibility has been
delegated) so long as the estimated fee for those services does not
exceed $75,000. Services presented for pre-approval pursuant to this
paragraph will be accompanied by a confirmation from both the Treasurer
and the independent accountants that the proposed services will not
adversely affect the independence of the independent accountants.
Although the Audit Committee will not pre-approve all services provided
to BIAM Affiliates, the Committee will receive an annual report from
the Fund's independent accounting firm showing the aggregate fees for
all services provided to BIAM and BIAM Affiliates.
December 10, 2003
(e)(2) The percentage of services described in each of paragraphs (b) through
(d) of this Item that were approved by the audit committee pursuant to
paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows:
(b) N/A
(c) 100%
(d) N/A
(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was less than fifty percent.
(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including 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 adviser that provides ongoing services
to the registrant for each of the last two fiscal years of the
registrant was $0 for 2006 and $0 for 2005.
(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including 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
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated audit committee consisting of the
following independent directors of the registrant: Margaret Duffy, Peter J.
Hooper, George G. Moore and James M. Walton.
ITEM 6. SCHEDULE OF INVESTMENTS.
Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
The Proxy Voting Policies are attached herewith.
BANK OF IRELAND ASSET MANAGEMENT
PROXY VOTING POLICY
TABLE OF CONTENTS:
I: PROXY VOTING PROCEDURES 3
A. PURPOSE 3
B. SCOPE 3
C. GUIDING PRINCIPLES 3
D. DECISION AND VOTING PROCESS 3
E. PROXY VOTING COMMITTEE 4
F. CONFLICTS OF INTEREST 4
G. WHEN BIAM DOES NOT VOTE PROXIES 5
II: PROXY VOTING GUIDELINES 6
---------------------------
A. AUDITORS 6
B. BOARD OF DIRECTORS 6
- Election of Directors
- Director Indemnification and Liability Provisions
- Board Size
- Independent Chairman (Separate Chairman/CEO)
- Majority of Independent Directors/Establishment of Committees
- Director Tenure/Retirement Age
- Filling of Vacancies/Removal of Directors
C. SHAREHOLDER RIGHTS 8
- Confidential Voting
- Shareholder Ability to Call Special Meetings
D. PROXY CONTESTS 9
- Voting for Director Nominees in Contested Elections
- Voting for Strategic Initiatives in Contested Elections
E. ANTI-TAKEOVER MEASURES 9
- Amend Bylaws without Shareholder Consent
- Anti-Takeover Provisions
- Poison Pill Plans
- Greenmail
F. CAPITAL STRUCTURE 10
- Adjustments to Par Value of Common Stock
- Common Stock Authorization
- Preferred Stock
- Preemptive Rights
- Share Repurchase Programs
- Stock Distributions: Splits and Dividends
G. MERGERS AND CORPORATE RESTRUCTURINGS 12
- Going Private Transactions (LBOs and Minority Squeezeouts)
- Spin-offs
H. EXECUTIVE AND DIRECTOR COMPENSATION 12
- Golden and Tin Parachutes
- Director Compensation
- Stock Option Expensing
I. MISCELLANEOUS 13
- Amending Minor Bylaws
- Changing Corporate Name
- Changing Date, Time or Location of Annual Meeting
I PROXY VOTING PROCEDURES
-----------------------
A. PURPOSE
Bank of Ireland Asset Management Limited and the BIAM group of companies
("BIAM") has adopted and implemented these policies and procedures ("Policies")
to seek to ensure that client proxies are voted in the clients' best interests,
in accordance with BIAM's fiduciary duties to clients and, in the case of BIAM
(U.S.), with SEC rule 206(4)-6 under the Investment Advisers Act of 1940. BIAM
believes that the Policies set forth herein are reasonably designed to achieve
that goal.
B. SCOPE
BIAM's authority to vote the proxies of its clients is established by its
advisory contracts and its proxy voting guidelines have been tailored to reflect
these specific contractual obligations. These Policies apply where clients have
delegated the authority and responsibility to BIAM to decide how to vote
proxies. Where BIAM has agreed to follow client guidelines in voting proxies,
client guidelines will be followed and supercede these Policies. BIAM also will
follow these Policies, as applicable, if it provides advice or recommendations
about specific proxy votes to clients that have not delegated voting
responsibility to BIAM. These Policies may be changed from time to time.
C. GUIDING PRINCIPLES
It is the policy of BIAM to vote all proxies for the exclusive benefit of its
clients. The maximization of total return for the client as an investor in the
stock being voted is the governing influence in considering corporate voting
decisions.
D. DECISION AND VOTING PROCESS
BIAM's proxy voting decisions are made by the Asset Managers. (For clients that
have specific voting guidelines, Portfolio Construction will determine the votes
to be cast at a client level.) BIAM may vote differently on the same matter if
client guidelines or specific instructions call for a vote that is inconsistent
with BIAM's Proxy Voting Guidelines or a decision made by BIAM's Asset Managers.
In unusual circumstances, BIAM Asset Managers may make different proxy voting
decisions for different clients.
Portfolio Construction is responsible for the communication of voting decisions
between the Asset Managers and BIAM's proxy voting agent (the "Agent").
Portfolio Construction provides the Agent with up to date portfolio holdings
information. As a
result, the Agent can provide BIAM with all voting and shareholder meeting
information necessary for informed and timely decision making. The Agent is
responsible for the timely and accurate processing of the voting decision, and
the distribution of this decision to all relevant parties. The Agent is also
responsible for unblocking / rescinding a voting decision upon request from
BIAM.
E. PROXY VOTING COMMITTEE
BIAM has established a Proxy Voting Committee ("Committee") to deal with various
issues associated with proxy voting. The role of the Committee is to develop and
periodically review these Policies to help ensure they are up to date and
reflect current regulatory requirements; review compliance with these Policies;
and critically evaluate exceptions to the Policies. The Committee also is
responsible for taking reasonable steps to seek to identify any material
conflicts of interest on the part of BIAM or its personnel that may affect
particular proxy votes. The Committee is comprised of representatives from Asset
Management; Portfolio Construction; Compliance and Client Service.
F. CONFLICTS OF INTEREST
Occasions may arise where BIAM may have a material conflict of interest with
respect to a matter to be voted. A material conflict of interest may exist, for
example, if BIAM has a very significant business relationship with either the
company whose stock is being voted, the person soliciting the proxy or a third
party that has a material interest in the outcome of the proxy vote.
The Proxy Voting Committee provides guidance to assist BIAM personnel in
identifying potential conflicts of interest and bringing them to the attention
of the Committee. The Committee is responsible for evaluating the materiality of
any conflicts. These Policies describe some, but not all, of the specific types
of conflicts of interest that BIAM may encounter in connection with proxy
voting. The Committee is expected to evaluate the particular facts and
circumstances of each situation and exercise its best judgment in deciding
whether the conflicts are material and how they should be addressed. A member of
BIAM's senior management will be designated, upon request from the Committee,
for consultation and to resolve any conflicts issue on which the Committee has
been unable to reach a decision on its own.
When a material conflict of interest is identified, BIAM may (1) vote the
proxies in accordance with the general rule stated in the Proxy Voting
Guidelines set forth in these Policies (as may be amended from time to time),
provided the guidelines specify how votes generally will be cast on that
particular type of matter, i.e., the guidelines state that BIAM generally will
vote "for" or "against" the proposal; (2) seek voting instructions or a waiver
of the conflict from the clients whose securities are to be voted on their
specific shares; (3) cast the votes for its clients in the same proportion as
the vote of all other holders of such security, or "mirror vote," if information
about the votes cast by other
holders is reasonably and timely available to BIAM; (4) refrain from voting,
other than to vote "present" for purposes of a quorum or (5) take other action
appropriate under the circumstances.
An adviser-client relationship will not be considered material for conflict
purposes if the gross investment advisory income received from the relationship
by BIAM during its most recent fiscal year did not exceed one percent (1%) of
BIAM's annual gross investment advisory income and is not expected to exceed
that amount in the current fiscal year.
BIAM sets its Proxy Voting Guidelines and makes each proxy voting decision
independently, in the best interests of its clients and without regard to the
interests of BIAM, its parent company or any other affiliates of BIAM. In
addition, as a matter of policy, BIAM will not accept or consider direction from
its affiliates on how to vote any particular proxy.
G. WHEN BIAM DOES NOT VOTE PROXIES
In appropriate circumstances, BIAM may not vote proxies respecting client
securities, including, but not limited to, situations where (a) the securities
are no longer held in a client's account; (b) the proxy and other necessary
documents are not received in sufficient time to allow BIAM to analyze the
material or cast an informed vote by the voting deadline; (c) BIAM concludes
that the cost of voting the proxy outweighs any potential benefit to the client;
(d) in BIAM's judgment, the matter to be voted is neither material nor relevant
to shareholders and the issuer of the securities; (e) securities have been
loaned out pursuant to a client's securities lending program and are unavailable
to vote; or (f) the value or amount of the securities to be voted is
insignificant or undeterminable. BIAM also may refrain from voting a proxy where
BIAM believes that it is in the client's best interest to do so. Generally, this
will occur if BIAM is in disagreement with the proposals but the management have
committed to make, within an agreed time frame, appropriate changes which in
BIAM's view will favor shareholders.
In certain markets, shareholders are required to stop trading securities for a
specified time before or after a shareholder meeting ("Blocking Period"). BIAM
may refrain from voting or cancel a vote when BIAM concludes that it is more
beneficial to clients to be free to trade the securities than to vote
securities. In addition, BIAM will, to the best of its ability, unblock a share
position that is subject to a Blocking Period if there is danger of a failed
trade. Blocking only occurs in certain markets and the Blocking Periods and
rules vary from country to country, and in certain circumstances, from company
to company.
II PROXY VOTING GUIDELINES
-----------------------
The following are guidelines and as such are not exhaustive and do not include
all potential voting issues. Because proxy issues and the circumstances of
individual companies are so varied, there may be instances when BIAM will not
vote in strict adherence to these guidelines. Votes on matters not covered by
these guidelines will be determined in accordance with the guiding principles
set forth above. Certain proxy questions that are company specific and of a
non-routine nature may be more appropriately handled on a case-by-case basis. At
any time, BIAM may seek voting instructions from some or all clients holding the
securities to be voted.
A. AUDITORS
BIAM generally will vote FOR proposals to ratify auditors, unless there is
reason to believe that an auditor has a material financial interest in or
association with the company, and is therefore not independent, or there is
reason to believe that the independent auditor has rendered an opinion which is
neither accurate nor indicative of the company's financial position.
B. BOARD OF DIRECTORS
ELECTION OF DIRECTORS
Electing directors is an important stock ownership right that shareholders can
exercise. Shareholders should seek to elect directors who represent their
interests and will act in a manner which will maximize the value of their
ownership interest and who can ultimately be held accountable for their actions.
>> BIAM generally will vote FOR all nominees in uncontested elections.
However, each election is examined on a case-by-case basis and BIAM
will withhold votes for individual nominees or entire slates of
directors if it believes such action is in the best interest of
shareholders.
DIRECTOR INDEMNIFICATION AND LIABILITY PROVISIONS
Directors and officers are often faced with difficult choices and should be
willing to make decisions that are not risk-averse. BIAM believes that directors
should not be held accountable for actions taken where they have acted honestly
and in good faith but should not be fully released from liability if they act
outside of such parameters.
>> BIAM generally will vote FOR proposals providing for indemnification
and liability limitations for officers and directors, provided the
policies are limited to the director acting honestly and in good faith
and putting the interests of the company first, rather than eliminating
entirely director's and officer's liability for monetary damages for
violating the duty of care.
BOARD SIZE
Proposals to allow management to increase or decrease the size of the board at
its own discretion are often used by companies as a takeover defense. By
increasing the size of the board, management can make it more difficult for
dissidents to gain control.
>> BIAM generally will vote FOR proposals that seek to fix the size of the
board.
>> BIAM generally will vote AGAINST proposals that give management the
ability to alter the size of the board without shareholder approval.
INDEPENDENT CHAIRMAN (SEPARATE CHAIRMAN/CEO)
>> BIAM generally will vote FOR proposals to separate the roles of
Chairman and CEO.
MAJORITY OF INDEPENDENT DIRECTORS/ESTABLISHMENT OF COMMITTEES
BIAM believes that having a board independent of management is of the utmost
importance to both a company and its shareholders.
>> BIAM generally will vote FOR proposals asking that a majority or more
of directors be independent.
>> BIAM generally will vote FOR proposals asking that board audit,
compensation, and/or nominating committees be "independent".
Independence does not necessarily require that the entire committee be
composed of independent directors.
DIRECTOR TENURE/RETIREMENT AGE
Tenure and Age limits impose an arbitrary threshold beyond which director's may
not serve regardless of the director's performance.
>> BIAM believes that directors should be judged on their own merit and
generally will not support proposals for such arbitrary guidelines as
age restrictions.
>> BIAM generally will vote FOR proposals that require directors to
present themselves for re-election on a periodic basis.
FILLING VACANCIES/REMOVAL OF DIRECTORS
Shareholder ability to remove directors, with or without cause, is prescribed by
a state's business corporation law, an individual company's articles of
incorporation, or its bylaws. If the state or company has specified that removal
may only be for cause, then such things as self-dealing or fraud will allow for
the removal of a director. Removal without cause requires no such showing, which
would allow shareholders to remove through a majority vote any director before
his or her term expires.
>> BIAM will evaluate on a CASE-BY-CASE basis proposals that members of
the board can only be removed for cause.
C. SHAREHOLDER RIGHTS
CONFIDENTIAL VOTING
In a confidential voting system, all proxies, and voting tabulations that
identify individual shareholders are kept confidential. This confidentiality can
eliminate any real or perceived coercion towards voters.
>> BIAM generally will vote FOR proposals that corporations adopt
confidential voting, use independent vote tabulators or use independent
inspectors of election, as long as the proposal includes a provision
for proxy contests as follows: In the case of a contested election,
management should be permitted to request that the dissident group
honor its confidential voting policy. If the dissidents agree, the
policy remains in place. If the dissidents will not agree, the
confidential voting policy is waived.
>> BIAM generally will vote FOR proposals to adopt confidential voting by
shareholders.
SHAREHOLDER ABILITY TO CALL SPECIAL MEETINGS
Certain matters may arise between regularly scheduled shareholder meetings that
require attention. The inability of shareholders to call meetings could result
in shareholders being unable to remove directors, initiate a shareholder
resolution or respond to a beneficial offer without having to wait for the next
scheduled meeting. The inability to call a special meeting and the resulting
insulation of management could adversely affect corporate performance and
shareholder returns.
>> BIAM generally will vote AGAINST proposals to restrict or prohibit
shareholder ability to call special meetings.
>> BIAM generally will vote FOR proposals that remove restrictions on the
right of shareholders to act independently of management.
D. PROXY CONTESTS
Proxy contests can play a valuable role in removing entrenched directors and
creating a means for corporate change.
VOTING FOR DIRECTOR NOMINEES IN CONTESTED ELECTIONS
Electing directors is an important stock ownership right that shareholders can
exercise.
>> BIAM will review on a CASE-BY-CASE basis how it will cast its votes for
directors in a contested election based upon what BIAM believes are the
director nominees that will serve in the best interests of shareholders
and will enhance shareholder value.
VOTING FOR STRATEGIC INITIATIVES IN CONTESTED ELECTIONS
>> Votes in a contested election to approve a strategic initiative will be
evaluated on a CASE-BY-CASE basis and voted in favor of the position
that BIAM believes will be in the best interest of shareholders and
will enhance shareholder value.
E. ANTI-TAKEOVER MEASURES
BIAM generally will vote AGAINST anti-takeover proposals if such proposals act
against the common interests of shareholders.
AMEND BYLAWS WITHOUT SHAREHOLDER CONSENT
>> BIAM generally will vote AGAINST proposals giving the board exclusive
authority to amend the Bylaws.
>> BIAM generally will vote FOR proposals giving the board the ability to
amend the bylaws with shareholder consent.
ANTI-TAKEOVER PROVISIONS
>> BIAM generally will vote AGAINST any proposed amendments to corporate
Articles, Bylaws or Charters that include anti-takeover provisions.
POISON PILL PLANS
Poison pills (or shareholder rights plans) are tactics used by management
fearing an unwelcome takeover bid. They cause a variety of events to occur which
may make the company financially less attractive to a potential acquirer.
>> BIAM generally will vote FOR a proposal that the company submit a
shareholder rights plan (poison pill) to a shareholder vote.
>> BIAM generally will vote AGAINST a proposal to renew or amend an
existing shareholder rights plan (poison pill).
>> BIAM generally will vote FOR a proposal to redeem a shareholder rights
plan (poison pill).
>> BIAM generally will vote AGAINST an increase in capital stock for use
in the implementation of a shareholder rights plan (poison pill).
GREENMAIL
Greenmail payments are targeted share repurchases by management of company stock
from individuals or groups seeking control of the company. Since only the
hostile party receives payment, usually at a substantial premium over the market
value of its shares, the practice discriminates against all other shareholders.
This transferred cash could, absent the greenmail payments, be put to use for
reinvestment in the company, payment of dividends, or to fund a public share
repurchase program.
>> BIAM generally will vote FOR proposals to adopt anti-greenmail charter
or bylaw amendments or otherwise restrict a company's ability to make a
greenmail payment.
F. CAPITAL STRUCTURE
ADJUSTMENTS TO PAR VALUE OF COMMON STOCK
Stock that has a fixed per share value printed on its certificate is called par
value stock. The purpose of par value stock is to establish the maximum
responsibility of a
shareholder in the event that a company becomes insolvent. Many times proposals
to reduce par value stem from state law requirements or banking regulations.
>> BIAM generally will vote FOR management proposals to reduce the par
value of common stock.
COMMON STOCK AUTHORIZATION
State statutes and stock exchanges require shareholder approval for increases in
the number of common shares a board is authorized to issue. Companies increase
their supply of common stock for a variety of ordinary business purposes:
raising new capital, funding stock compensation programs, business acquisitions,
and implementation of stock splits or payment of stock dividends.
>> BIAM generally will vote FOR increases in common stock authorized
provided such action is determined to be in the shareholders' best
interests.
>> BIAM will review on a CASE-BY-CASE basis proposals to approve a
reduction in the number of shares of common stock authorized for issue
or an elimination of an authorized class of common stock.
PREFERRED STOCK
>> BIAM will review on a CASE-BY-CASE basis proposals to increase the
number of blank check preferred shares after analyzing the number of
preferred shares available for issue given a company's industry and
performance in terms of shareholder returns.
>> BIAM will review on a CASE-BY-CASE basis proposal to eliminate a
currently authorized class of preferred stock.
PREEMPTIVE RIGHTS
Preemptive rights permit shareholders to share proportionately in any new issues
of stock of the same class. These rights guarantee existing shareholders the
first opportunity to purchase shares of new issues of stock in the class they
own, in an amount equal to the percentage of the class they already own. These
rights provide shareholders with some protection from involuntary dilution of
their ownership interest.
>> BIAM generally will vote FOR proposals that restore preemptive rights
of shareholders.
SHARE REPURCHASE PROGRAMS
>> BIAM generally will vote FOR management proposals to institute
open-market share repurchase plans (Stock Repurchase Program).
STOCK DISTRIBUTIONS: SPLITS AND DIVIDENDS
>> BIAM generally will vote FOR management proposals to increase the
common share authorization for a stock split or share dividend.
>> BIAM generally will vote FOR recommended stock splits.
G. MERGERS AND CORPORATE RESTRUCTURINGS
>> BIAM will review on a CASE-BY-CASE basis proposals for mergers and
acquisitions.
GOING PRIVATE TRANSACTIONS (LBOS AND MINORITY SQUEEZEOUTS)
>> BIAM will review on a CASE-BY-CASE basis proposals to take a company
private, taking into account factors including, but not limited to,
offer price/premium, fairness opinion, how the deal was negotiated,
conflicts of interest, other alternatives/offers considered, and
non-completion risk.
SPIN-OFFS
>> BIAM will review on a CASE-BY-CASE basis proposed spin-offs, taking
into consideration factors including, but not limited to, tax and
regulatory advantages, planned use of the sale proceeds, valuation of
the spin-off, fairness opinion, benefits to the parent company,
conflicts of interest, managerial incentives, corporate governance
changes and changes in the capital structure.
H. EXECUTIVE AND DIRECTOR COMPENSATION
>> BIAM will evaluate on a CASE-BY-CASE basis all proposed executive and
director compensation plans.
GOLDEN AND TIN PARACHUTES
Golden and tin parachutes are designed to protect the employees of a corporation
in the event of a change in control. Golden parachutes are payments to senior
level management that are triggered during a change of control. The calculation
is usually based on some multiple of an employee's annual or monthly
compensation. Some companies are extending the coverage to all employees via tin
parachutes.
>> BIAM generally will vote FOR proposals that the company eliminate or
restrict existing severance agreements, change-in-control provisions,
or golden parachutes.
DIRECTOR COMPENSATION
BIAM believes that director compensation should be appropriate for the time and
effort that directors spend executing their duties.
>> BIAM evaluates all director compensation proposals on a CASE-BY-CASE
basis.
STOCK OPTION EXPENSING
>> BIAM generally will vote FOR proposals that the company to expense
stock options unless management has already publicly committed to start
expensing by a specific date.
I. MISCELLANEOUS
AMENDING MINOR BYLAWS
>> BIAM generally will vote FOR management proposals for bylaw or charter
changes that are of a housekeeping nature (updates or corrections).
CHANGING CORPORATE NAME
>> BIAM generally will vote WITH MANAGEMENT with regard to changing the
corporate name.
CHANGING DATE, TIME OR LOCATION OF ANNUAL MEETING
>> BIAM generally will vote FOR management proposals to change the
date/time/location of the annual meeting unless the proposed change is
unreasonable. BIAM requires at least ten days notice of any such change
in order to allow for custodian deadlines.
07/01/2003
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(A)(1) IDENTIFICATION OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS AND
DESCRIPTION OF ROLE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM MEMBERS
PETER O'DONOGHUE, CFA, EQUITY MANAGER
Peter O'Donoghue joined Bank of Ireland Asset Management (the
"Advisor") in 2001 though the graduate recruitment programme. Prior to
joining the Asset Management team, Peter held a number of roles in
various areas of the business including Portfolio Construction, Global
Support and our European office. He holds a BA in International
Business & Languages from Dublin City University and is also a CFA
charterholder. Peter is also a member of the Society of Investment
Analysts of Ireland. Peter O'Donoghue is primarily responsible for the
management of the Registrant's portfolio and has responsibility for all
the day-to-day management of the Registrant portfolio including stock
research, stock selection and portfolio management. Peter O'Donoghue
was appointed as Portfolio Manager of the Registrant on December 7,
2006.
(A)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBER AND POTENTIAL CONFLICTS OF INTEREST
OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBER
As of December 31, 2006 Mr. O'Donoghue did not manage any other
registered investment companies.
Peter O'Donoghue is also a member of the Balanced Product Investment
Team. As of October 31, 2006 this team managed the following accounts:
No. of Accounts Total Assets in
Total where Advisory Fee Accounts where
Type of No. of Accounts is Based on Advisory Fee is Based
ACCOUNTS MANAGED TOTAL ASSETS PERFORMANCE on PERFORMANCE
--------- ------- ------------ ----------- ------------
Registered 0 $0 0 0
Investment
Companies:
Other Pooled 17 $5,238,817,169 0 0
Investment Vehicles:
Other Accounts: 235 $11,473,998,069 0 0
POTENTIAL CONFLICTS OF INTERESTS
In recognition of the fact that conflicts of interest are inherent in
the investment management business, the Advisor has adopted policies
and procedures reasonably designed to identify and manage the effects
of actual or potential conflicts of interest in the areas of employee
personal trading, managing multiple accounts for multiple clients and
allocation of investment opportunities.
The Advisor has adopted a code of ethics policy that is designed to
reduce the risk of actual or potential conflicts of interest with
dealings on behalf of clients. The code reflects the Advisor's
fiduciary obligations and those of its employees, and requires that all
employees comply with all applicable federal securities laws. The
Advisor's personal dealing rules apply to all employees. In summary,
the code requires pre-approval of all personal dealings in equity
securities or securities that derive their value from equity
securities. As a general matter, permission to execute a proposed
personal trade in a security will generally be refused if the Advisor
has executed, or intends to execute material client trades in the same
security, in the seven days before or the seven days following the
proposed employee deal. The code requires employees to report any
transactions in mutual funds where the Advisor acts as an adviser or
sub-adviser to the fund. The code also covers issues such as prohibited
transactions, blackout periods for transactions, and short term
trading.
In addition to managing the Registrant's Portfolio, the Portfolio
Manager is a member of a team that manages multiple portfolios for
multiple clients. Accordingly the Portfolio Manager may have
responsibility for managing the investments of multiple accounts with a
common investment strategy or several investment styles. Accordingly,
client portfolios may have investment objectives, strategies, time
horizons and risk profiles that differ from those of the Registrant.
The portfolio Manager makes investment decisions for the Registrant
based on its investment objective, policies and other relevant
investment considerations, Consequently, the Portfolio Manager may
purchase or sell securities for one client portfolio and not another
client portfolio, and the performance of securities purchased for one
portfolio may vary from the performance of securities purchased for
other portfolios. The Portfolio Manager may place transactions on
behalf of other clients that are directly or indirectly contrary to
investment decisions made on behalf of the Registrant, which has the
potential to adversely impact the Registrant, depending on market
conditions. There is a fiduciary duty for the Advisor to act in good
faith for the benefit of its clients; to disclose fully and fairly all
material facts; and to allocate trades in a fair and equitable manner.
The Advisor has implemented allocation procedures that specify the
factors taken into account in making allocation decisions for its
clients and to ensure that all accounts with substantially similar
investment objectives are treated equitably. These procedures ensure
that clients are treated fairly as to the securities purchased or sold
for their accounts, in the priority of execution of orders and the
allocation of trades.
Generally, the above will be achieved by allocating on a simple
pro-rata basis. However, to ensure that all clients get meaningful
order sizes in a cost effective manner, allocations to clients are
generally targeted to be greater than 0.03% of each client's account
assets. There are exceptions to the 0.03% De Minimus allocation such as
when IPO orders are only partially filled. Partially filled IPO orders
are generally allocated pro-rata in accordance with the original order
without reference to achieving a minimum targeted percentage of client
assets. Lastly the performance of similarly managed accounts is
monitored to ensure consistency of performance and to detect any
unexplained significant differences.
(A)(3) COMPENSATION STRUCTURE OF PORTFOLIO MANAGER(S) OR MANAGEMENT TEAM
MEMBERS
THE REGISTRANT PAYS THE ADVISOR A FEE BASED ON THE ASSETS UNDER
MANAGEMENT OF THE FUND AS SET FORTH IN THE ADVISORY AGREEMENT. THE
ADVISOR PAYS ITS INVESTMENT PROFESSIONALS OUT OF ITS TOTAL REVENUES AND
OTHER RESOURCES, INCLUDING THE ADVISORY FEE EARNED WITH RESPECT TO THE
REGISTRANT. THERE ARE THREE COMPONENTS TO THE COMPENSATION STRUCTURE
USED BY THE ADVISOR. The compensation package is highly competitive and
includes a competitive fixed base salary, a performance-linked bonus
and a Bank of Ireland Group capital stock issue plan. Compensation is
not based on the value of assets held in the Registrant's portfolio.
The performance measures used are applied consistently among all
portfolio managers and portfolios.
The bonuses paid to the portfolio managers are linked both to the
quality of an individual's stock research and also to the contribution
they make to the performance of the product group and/or portfolio to
which they are associated. The primary performance assessment of the
portfolio manager is based on how the client portfolios perform
relative to benchmarks, market indices and similar funds run by
competitor managers.
The stock issue plan is based on the overall profitability of Bank of
Ireland while bonuses are based on the profitability of Bank of Ireland
Asset Management and on individual achievement.
(A)(4) DISCLOSURE OF SECURITIES OWNERSHIP
As of December 31, 2006 beneficial ownership of shares of the
registrant by the Portfolio Manager is as follows:
Name of Portfolio Dollar ($) Range of
Manager or Fund Shares
TEAM MEMBER BENEFICIALLY OWNED
Peter O'Donoghue $0
(B) Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
(D) MAXIMUM NUMBER (OR
(C) TOTAL NUMBER OF APPROXIMATE DOLLAR VALUE)
SHARES (OR UNITS) OF SHARES (OR UNITS) THAT
(A) TOTAL NUMBER OF PURCHASED AS PART OF MAY YET BE PURCHASED
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS UNDER THE PLANS OR
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS PROGRAMS
May 1 2006 to 0 0 0 452,318
May 31 2006
June 1 2006 to 0 0 0 452,318
June 30 2006
July 1 2006 to 7,000 25.49 7,000 452,318
July 31 2006
August 1 2006 0 0 0 452,318
to August 31
2006
September 1 0 0 0 452,318
2006 to
September 30
2006
October 1 2006 0 0 0 452,318
to October 31
2006
Total 7,000 25.49 7,000 452,318
a. The date each plan or program was announced: February 2000
b. The dollar amount (or share or unit amount) approved: 10% of shares
outstanding at the previous fiscal year end
c. The expiration date (if any) of each plan or program: None
d. Each plan or program that has expired during the period covered by the
table: None
e. Each plan or program the registrant has determined to terminate prior
to expiration, or under which the registrant does not intend to make
further purchases: None
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's board of directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, 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 the report that includes the disclosure
required by this paragraph, 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 Securities
Exchange Act of 1934, as amended (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 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.
ITEM 12. EXHIBITS.
(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(a)(3) Not applicable.
(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.
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.
(registrant) THE NEW IRELAND FUND, INC.
By (Signature and Title)* /S/ BRENDAN DONOHOE
-------------------------------------------------------
Brendan Donohoe, President
(principal executive officer)
Date JANUARY 3, 2007
----------------------------------------------------------------------------
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 (Signature and Title)* /S/ BRENDAN DONOHOE
-------------------------------------------------------
Brendan Donohoe, President
(principal executive officer)
Date JANUARY 3, 2007
----------------------------------------------------------------------------
By (Signature and Title)* /S/ LELIA LONG
-------------------------------------------------------
Lelia Long, Treasurer
(principal financial officer)
Date JANUARY 3, 2007
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.