FORM N-CSR
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 811-08050
The Asia Tigers Fund, Inc.
(Exact name of registrant as specified in charter)
345 Park Avenue
New York, NY 10154
(Address of principal executive offices) (Zip code)
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, NY 10017
(Name and address of agent for service)
Registrants telephone number, including area code: 212-583-5000
Date of fiscal year end: October 31, 2007
Date of reporting period: October 31, 2007
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. § 3507.
TABLE OF CONTENTS
Item 1. Reports to Stockholders.
The Report to Shareholders is attached herewith.
The Asia Tigers Fund, Inc.
December 26, 2007
Dear
Fund Stockholder,
We are pleased to provide you with the audited financial
statements of The Asia Tigers Fund, Inc. (the Fund)
for the fiscal year ended October 31, 2007.
The Funds net asset value (NAV) closed at
$35.69 on October 31, 2007, representing an increase of
85.8% for the Funds fiscal year. On an NAV basis, the Fund
outperformed its benchmark, the MSCI AC Asia Free Ex-Japan*,
which rose 68.9% during the same period.
Asian equity markets continued to perform strongly during the
12 months ended October 31, 2007, the fifth
consecutive time Asia has registered double-digit gains during
the Funds fiscal year. The stellar performance was fueled
by a year of both positive earnings surprises and valuation
re-ratings, especially in the regions larger equity
markets. The macroeconomic backdrop, marked by solid gross
domestic product growth, low interest rates and appreciating
currencies, was also generally positive for equities. Although
inflation picked up modestly across the region, it was mostly
centered on food and energy, and there has been little evidence
of rising prices more generally.
The years two most significant events, in terms of
directly impacting Asian equities, were: 1) rising
instability in global credit markets, sparked by surging
defaults in the U.S. subprime debt market, and subsequent
write-downs at various financial institutions, and 2) the
Chinese governments move to liberalize capital outflows
for domestic investors (via its Qualified Domestic Institutional
Investor and Qualified Domestic Retail Investor programs), which
helped trigger an unprecedented rally in Hong Kong-listed
shares of Chinese companies. Taken together, both of these
developments the first, clearly a headwind for
stocks, the second, a significant tailwind generated
extreme market volatility during the second half of the year,
especially in northern Asia. Moreover, we believe that both of
these ongoing issues may continue to set the tone for Asian
markets in early 2008.
As we enter the final weeks of 2007, Asia is in the midst of a
sharp pullback which, though painful for investors, should prove
healthy over the medium term. Already, pan-regional valuations
have returned to more attractive levels, with the 2008
price-earnings ratio now at 15x on the back of 16% forecasted
earnings-per-share (EPS) growth**. The two largest
markets, China and India, are back to trading below 19 times
2008 earnings with EPS growth forecasts of 25-30%. In short,
absent a change in fundamentals, we believe it is now much
harder to argue that Asian valuations are too expensive.
On the macroeconomic front, the dominant concern currently is
how much, if any, the U.S. economy will slow next year and,
indeed, if the U.S. will fall into recession. Can the Asia
growth story de-couple from a negative
U.S. growth outlook? Although Asia has been able to
increasingly develop its own intra-regional growth drivers, most
Asian countries remain highly dependent on external demand, with
U.S.-bound
1
exports continuing to represent between 11% and 24% of their
total exports a significant amount. The second
concern for Asia is whether China will be successful in slowing
its blistering hot economy, which is set to expand 11.5% in 2007
even after 12 interest rate hikes in the past two years. We
expect that concerns about China overheating will
re-emerge at some point in 2008, depending on how the
U.S. economy fares.
Despite these potential macroeconomic headwinds, the World Bank
is still forecasting for the Asian region to expand 8.2% in
2008, almost the same as the 8.3% forecast for 2007. Given this
solid outlook and the continued attractive earnings growth
profile, we remain positive on the regions prospects. In
addition, as long-time, Asia-dedicated investors, we continue to
be surprised at the new-found interest in the region by a
variety of investors who, although new in terms of investing in
the region, are driven by the same belief in Asias
exciting, long-term secular growth story. We do not expect this
bullish trend to diminish anytime soon.
On behalf of the Board of Directors, we thank you for your
participation and continued support of the Fund. If you have any
questions, please do not hesitate to visit our website at
www.blackstone.com or call our toll-free number,
866-800-8933.
Sincerely,
Prakash A. Melwani
Director and President
The Asia Tigers Fund, Inc.
* Please note
that the benchmark is an unmanaged index. Investors cannot
directly invest in the index. The index does not reflect
transaction costs or manager fees.
** Source: FactSet
Research Systems Inc., Institutional Brokers Estimate
System (IBES)
PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE
RESULTS. There
is no guarantee that the Funds or any other investment
technique will be effective under all market conditions.
2
THE
ASIA TIGERS FUND, INC.
Fundamental Periodic Repurchase Policy
The Fund has adopted the following fundamental policy regarding
periodic repurchases:
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a)
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The Fund will make offers to repurchase its shares at
semi-annual intervals pursuant to
Rule 23c-3
under the Investment Company Act of 1940, as amended from time
to time (Offers). The Board of Directors may place
such conditions and limitations on Offers as may be permitted
under
Rule 23c-3.
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b)
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14 days prior to the last Friday of each of the Funds
first and third fiscal quarters, or the next business day if
such Friday is not a business day, will be the deadline (the
Repurchase Request Deadline) by which the Fund must
receive repurchase requests submitted by stockholders in
response to the most recent Offer.
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c)
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The date on which the repurchase price for shares is to be
determined (the Repurchase Pricing Date) shall occur
no later than the last Friday of each of the Funds first
and third fiscal quarters, or the next business day if such day
is not a business day.
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d)
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Offers may be suspended or postponed under certain
circumstances, as provided for in Rule
23c-3.
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(For further details, see Note E to the Financial
Statements.)
3
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Schedule of Investments
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COMMON
STOCKS (100.16% of net assets)
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NUMBER
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PERCENT OF
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OF
SHARES
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SECURITY
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NET
ASSETS
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COST
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VALUE
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China
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21.63%
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Athletic Footwear
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0.85%
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1,610,000
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China Hongxing Sports, Ltd.
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$
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431,078
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$
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1,422,468
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Building &
Construction Products Miscellaneous
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0.69%
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262,000
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China National Building Material Co., Ltd.
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598,122
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1,145,920
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Chemicals
Fibers
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0.49%
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500,000
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China Sky Chemical Fibre Co., Ltd.
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416,603
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821,398
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Commercial Banks
Non-US
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2.68%
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1,596,000
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China Construction Bank
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850,141
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1,793,513
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525,500
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China Merchants Bank Co., Ltd., 144A
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648,722
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2,674,688
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1,498,863
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4,468,201
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Food
Miscellaneous/Diversified
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0.65%
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675,000
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Synear Food Holdings, Ltd.
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817,278
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1,094,909
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Gold Mining
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1.32%
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1,287,500
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Zijin Mining Group Co., Ltd.
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702,845
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2,209,288
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Life/Health Insurance
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1.80%
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454,000
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China Life Insurance Co., Ltd.
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855,388
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3,013,663
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Machinery General
Industry
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0.59%
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779,000
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Haitian International Holdings, Ltd.
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545,375
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623,136
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372,000
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Shanghai Electric Group Co., Ltd.
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215,763
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364,282
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761,138
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987,418
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Machinery Material
Handling
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2.29%
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1,115,600
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Shanghai Zhenhua Port Machinery Co., Class B
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538,098
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3,818,699
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Non-Ferrous Metals
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0.62%
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1,140,000
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Hunan Non-Ferrous Metal Corp., Ltd., 144A
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311,981
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1,031,042
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Oil Companies
Integrated
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1.97%
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8,399
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China Petroleum and Chemical Corp. ADR
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349,357
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1,393,478
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756,000
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Petrochina Co., Ltd.
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753,957
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1,892,244
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1,103,314
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3,285,722
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Real Estate
Operations & Development
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3.00%
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360,600
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China Merchants Property Development Co., Ltd.
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1,451,995
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2,084,285
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976,104
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China Vanke Co., Ltd., Class B
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150,364
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2,934,307
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1,602,359
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5,018,592
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Retail Regional
Department Store
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0.75%
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1,208,000
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Golden Eagle Retail Group, Ltd.
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603,467
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1,249,956
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4
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Schedule of Investments (continued)
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COMMON
STOCKS (continued)
|
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NUMBER
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PERCENT OF
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OF
SHARES
|
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|
SECURITY
|
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NET
ASSETS
|
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COST
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VALUE
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China
(continued)
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Schools
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0.49%
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9,200
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New Oriental Education & Technology Group, Inc. ADR+
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$
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498,202
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$
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823,584
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Shipbuilding
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2.00%
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408,000
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Guangzhou Shipyard International Co., Ltd.+
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382,575
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3,342,623
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Telecommunications
Equipment
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0.36%
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217,000
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Foxconn International Holdings, Ltd.+
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145,515
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599,138
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Telecommunications
Services
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0.69%
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1,334,000
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China Communications Services Corp., Ltd.+
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1,003,892
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1,147,982
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Transport
Services
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0.39%
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704,000
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Dalian Port (PDA) Co., Ltd.
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515,048
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644,888
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Total
China
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12,785,766
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36,125,491
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Hong
Kong
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22.05%
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Apparel Manufacturers
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2.35%
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1,250,000
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Bosideng International Holdings, Ltd.+
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533,768
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535,429
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|
156,000
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Esprit Holdings, Ltd.
|
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219,698
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2,576,250
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|
|
218,500
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Ports Design, Ltd.
|
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451,027
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817,528
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|
|
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|
|
|
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|
1,204,493
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|
3,929,207
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Cellular
Telecommunications
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4.16%
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343,100
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China Mobile, Ltd.
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1,179,056
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6,949,825
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Chemicals
Specialty
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0.50%
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|
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1,620,000
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EcoGreen Fine Chemical Group
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712,758
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829,772
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Commercial Banks
Non-US
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0.50%
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88,402
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Dah Sing Financial Group
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499,745
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838,877
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Commercial Services
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0.55%
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5,402,500
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Shenzhen International Holdings, Ltd.
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548,836
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|
920,073
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Diversified Operations
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1.32%
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|
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|
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|
562,000
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C C Land Holdings, Ltd.
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583,888
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|
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|
1,102,131
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|
88,381
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Hutchison Whampoa, Ltd.
|
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|
419,142
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1,101,513
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|
|
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1,003,030
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|
|
|
2,203,644
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Electric
Generation
|
|
|
2.04%
|
|
|
|
|
|
|
|
|
|
|
922,000
|
|
|
China Resources Power Holdings Co., Ltd.
|
|
|
687,899
|
|
|
|
3,408,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic
Components Miscellaneous
|
|
|
0.36%
|
|
|
|
|
|
|
|
|
|
|
466,000
|
|
|
AAC Acoustic Technology Holdings, Inc.+
|
|
|
462,596
|
|
|
|
609,645
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Schedule of Investments (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
STOCKS (continued)
|
|
NUMBER
|
|
|
|
|
PERCENT OF
|
|
|
|
|
|
|
|
OF
SHARES
|
|
|
SECURITY
|
|
NET
ASSETS
|
|
|
COST
|
|
|
VALUE
|
|
|
|
|
|
|
|
|
Hong
Kong (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance Other
Services
|
|
|
2.07%
|
|
|
|
|
|
|
|
|
|
|
104,500
|
|
|
Hong Kong Exchanges & Clearing, Ltd.
|
|
$
|
319,029
|
|
|
$
|
3,454,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Companies
Exploration & Production
|
|
|
1.19%
|
|
|
|
|
|
|
|
|
|
|
9,150
|
|
|
CNOOC, Ltd. ADR
|
|
|
457,350
|
|
|
|
1,980,884
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
Operations & Development
|
|
|
3.58%
|
|
|
|
|
|
|
|
|
|
|
104,700
|
|
|
Cheung Kong Holdings, Ltd.
|
|
|
845,018
|
|
|
|
2,035,698
|
|
|
490,000
|
|
|
Franshion Properties China, Ltd.+
|
|
|
298,576
|
|
|
|
386,270
|
|
|
247,000
|
|
|
Hopewell Holdings, Ltd.
|
|
|
281,995
|
|
|
|
1,271,520
|
|
|
171,000
|
|
|
Kowloon Development Co., Ltd.
|
|
|
520,798
|
|
|
|
529,494
|
|
|
2,507,328
|
|
|
SRE Group, Ltd.
|
|
|
555,728
|
|
|
|
957,539
|
|
|
42,000
|
|
|
Sun Hung Kai Properties, Ltd.
|
|
|
718,923
|
|
|
|
795,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,221,038
|
|
|
|
5,976,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Apparel /
Shoe
|
|
|
0.87%
|
|
|
|
|
|
|
|
|
|
|
906,000
|
|
|
Belle International Holdings, Ltd.
|
|
|
832,807
|
|
|
|
1,454,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Consumer
Electronics
|
|
|
0.52%
|
|
|
|
|
|
|
|
|
|
|
391,000
|
|
|
Gome Electrical Appliances Holdings, Ltd.
|
|
|
650,207
|
|
|
|
872,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
Restaurants
|
|
|
0.40%
|
|
|
|
|
|
|
|
|
|
|
330,000
|
|
|
Cafe De Coral Holdings, Ltd.
|
|
|
297,250
|
|
|
|
665,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
Producers
|
|
|
0.99%
|
|
|
|
|
|
|
|
|
|
|
3,124,000
|
|
|
Shougang Concord International Enterprises Co., Ltd.
|
|
|
685,664
|
|
|
|
1,652,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transport
Services
|
|
|
0.65%
|
|
|
|
|
|
|
|
|
|
|
278,000
|
|
|
Integrated Distribution Services Group, Ltd.
|
|
|
506,378
|
|
|
|
1,086,778
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Hong Kong
|
|
|
13,268,136
|
|
|
|
36,831,406
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
India
|
|
|
9.85%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applications Software
|
|
|
1.21%
|
|
|
|
|
|
|
|
|
|
|
43,352
|
|
|
Infosys Technologies, Ltd.
|
|
|
475,290
|
|
|
|
2,027,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks
Non-US
|
|
|
1.10%
|
|
|
|
|
|
|
|
|
|
|
58,980
|
|
|
Punjab National Bank, Ltd.
|
|
|
490,396
|
|
|
|
788,480
|
|
|
20,015
|
|
|
State Bank of India
|
|
|
82,268
|
|
|
|
1,052,653
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
572,664
|
|
|
|
1,841,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Engineering/Research &
Development Services
|
|
|
0.86%
|
|
|
|
|
|
|
|
|
|
|
60,950
|
|
|
Punj Lloyd, Ltd.
|
|
|
512,789
|
|
|
|
726,701
|
|
|
16,550
|
|
|
Texmaco, Ltd.
|
|
|
472,306
|
|
|
|
706,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
985,095
|
|
|
|
1,432,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Schedule of Investments (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
STOCKS (continued)
|
|
NUMBER
|
|
|
|
|
PERCENT OF
|
|
|
|
|
|
|
|
OF
SHARES
|
|
|
SECURITY
|
|
NET
ASSETS
|
|
|
COST
|
|
|
VALUE
|
|
|
|
|
|
|
|
|
India
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery Tools &
Related Products
|
|
|
0.23%
|
|
|
|
|
|
|
|
|
|
|
200,000
|
|
|
Shanthi Gears, Ltd.
|
|
$
|
377,004
|
|
|
$
|
386,791
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Motion Pictures &
Services
|
|
|
0.55%
|
|
|
|
|
|
|
|
|
|
|
51,313
|
|
|
UTV Software Communications, Ltd.
|
|
|
652,601
|
|
|
|
911,860
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Refining &
Marketing
|
|
|
2.20%
|
|
|
|
|
|
|
|
|
|
|
94,750
|
|
|
Chennai Petroleum Corp., Ltd.
|
|
|
617,596
|
|
|
|
798,870
|
|
|
40,704
|
|
|
Reliance Industries, Ltd.
|
|
|
331,847
|
|
|
|
2,880,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
949,443
|
|
|
|
3,679,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Power Conversion &
Supply Equipment
|
|
|
2.29%
|
|
|
|
|
|
|
|
|
|
|
42,368
|
|
|
Bharat Heavy Electricals, Ltd.
|
|
|
238,816
|
|
|
|
2,815,680
|
|
|
65,355
|
|
|
Indo Tech Transformers, Ltd.
|
|
|
465,348
|
|
|
|
998,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
704,164
|
|
|
|
3,814,532
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipbuilding
|
|
|
0.67%
|
|
|
|
|
|
|
|
|
|
|
57,750
|
|
|
ABG Shipyard, Ltd.
|
|
|
455,088
|
|
|
|
1,124,057
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
Services
|
|
|
0.74%
|
|
|
|
|
|
|
|
|
|
|
62,910
|
|
|
Reliance Communications, Ltd.
|
|
|
377,962
|
|
|
|
1,234,971
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
India
|
|
|
5,549,311
|
|
|
|
16,452,810
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indonesia
|
|
|
2.69%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal
|
|
|
1.12%
|
|
|
|
|
|
|
|
|
|
|
3,540,500
|
|
|
PT Bumi Resources TBK
|
|
|
460,360
|
|
|
|
1,868,133
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks
Non-US
|
|
|
0.61%
|
|
|
|
|
|
|
|
|
|
|
1,258,830
|
|
|
PT Bank Central Asia TBK
|
|
|
333,342
|
|
|
|
1,010,164
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal Processors &
Fabrication
|
|
|
0.51%
|
|
|
|
|
|
|
|
|
|
|
24,823,000
|
|
|
PT Bakrie and Brothers TBK+
|
|
|
456,808
|
|
|
|
859,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
Services
|
|
|
0.45%
|
|
|
|
|
|
|
|
|
|
|
629,500
|
|
|
PT Telekomunikasi Indonesia TBK
|
|
|
313,016
|
|
|
|
743,885
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Indonesia
|
|
|
1,563,526
|
|
|
|
4,481,723
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Malaysia
|
|
|
3.90%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture
|
|
|
0.91%
|
|
|
|
|
|
|
|
|
|
|
673,075
|
|
|
IOI Corp. BHD
|
|
|
229,192
|
|
|
|
1,523,753
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Casino Hotels
|
|
|
0.78%
|
|
|
|
|
|
|
|
|
|
|
1,133,500
|
|
|
Resorts World BHD
|
|
|
602,397
|
|
|
|
1,305,140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Schedule of Investments (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
STOCKS (continued)
|
|
NUMBER
|
|
|
|
|
PERCENT OF
|
|
|
|
|
|
|
|
OF
SHARES
|
|
|
SECURITY
|
|
NET
ASSETS
|
|
|
COST
|
|
|
VALUE
|
|
|
|
|
|
|
|
|
Malaysia
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks
Non-US
|
|
|
0.76%
|
|
|
|
|
|
|
|
|
|
|
365,400
|
|
|
Bumiputra Commerce Holdings BHD
|
|
$
|
457,078
|
|
|
$
|
1,260,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Metal Processors &
Fabrication
|
|
|
1.09%
|
|
|
|
|
|
|
|
|
|
|
1,038,400
|
|
|
KNM Group BHD
|
|
|
551,769
|
|
|
|
1,821,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
Operations & Development
|
|
|
0.36%
|
|
|
|
|
|
|
|
|
|
|
779,100
|
|
|
IGB Corp. BHD
|
|
|
501,233
|
|
|
|
602,722
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Malaysia
|
|
|
2,341,669
|
|
|
|
6,513,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Singapore
|
|
|
12.67%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks
Non-US
|
|
|
0.95%
|
|
|
|
|
|
|
|
|
|
|
103,100
|
|
|
DBS Group Holdings, Ltd.
|
|
|
659,566
|
|
|
|
1,594,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computers Integrated
Systems
|
|
|
0.59%
|
|
|
|
|
|
|
|
|
|
|
1,131,000
|
|
|
CSE Global, Ltd.
|
|
|
769,089
|
|
|
|
975,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Operations
|
|
|
1.09%
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
Keppel Corp., Ltd.
|
|
|
649,687
|
|
|
|
1,826,402
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Food Wholesale /
Distribution
|
|
|
0.80%
|
|
|
|
|
|
|
|
|
|
|
551,000
|
|
|
Olam International, Ltd.
|
|
|
536,293
|
|
|
|
1,331,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Equipment &
Services
|
|
|
0.59%
|
|
|
|
|
|
|
|
|
|
|
390,000
|
|
|
Swiber Holdings, Ltd.+
|
|
|
727,106
|
|
|
|
985,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Field Machinery &
Equipment
|
|
|
0.69%
|
|
|
|
|
|
|
|
|
|
|
444,000
|
|
|
KS Energy Services, Ltd.
|
|
|
561,409
|
|
|
|
1,152,331
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
Operations & Development
|
|
|
1.51%
|
|
|
|
|
|
|
|
|
|
|
245,500
|
|
|
Keppel Land, Ltd.
|
|
|
179,271
|
|
|
|
1,406,489
|
|
|
410,000
|
|
|
Yanlord Land Group, Ltd.
|
|
|
555,626
|
|
|
|
1,109,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
734,897
|
|
|
|
2,515,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Schools
|
|
|
0.67%
|
|
|
|
|
|
|
|
|
|
|
488,000
|
|
|
Raffles Education Corp., Ltd.
|
|
|
397,612
|
|
|
|
1,111,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications
Services
|
|
|
0.55%
|
|
|
|
|
|
|
|
|
|
|
326,840
|
|
|
Singapore Telecommunications, Ltd.
|
|
|
466,545
|
|
|
|
920,454
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transport
Equipment & Leasing
|
|
|
0.44%
|
|
|
|
|
|
|
|
|
|
|
495,000
|
|
|
Goodpack, Ltd.
|
|
|
716,306
|
|
|
|
738,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Schedule of Investments (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
STOCKS (continued)
|
|
NUMBER
|
|
|
|
|
PERCENT OF
|
|
|
|
|
|
|
|
OF
SHARES
|
|
|
SECURITY
|
|
NET
ASSETS
|
|
|
COST
|
|
|
VALUE
|
|
|
|
|
|
|
|
|
Singapore
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation
Marine
|
|
|
4.34%
|
|
|
|
|
|
|
|
|
|
|
695,000
|
|
|
Cosco Corp. (Singapore), Ltd.
|
|
$
|
542,432
|
|
|
$
|
3,717,860
|
|
|
742,000
|
|
|
Ezra Holdings, Ltd.
|
|
|
388,967
|
|
|
|
3,533,943
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
931,399
|
|
|
|
7,251,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Water Treatment
Systems
|
|
|
0.45%
|
|
|
|
|
|
|
|
|
|
|
328,000
|
|
|
Sino-Environment Technology Group, Ltd.+
|
|
|
659,537
|
|
|
|
751,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Singapore
|
|
|
7,809,446
|
|
|
|
21,154,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
South
Korea
|
|
|
16.61%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Auto
Cars & Light Trucks
|
|
|
0.36%
|
|
|
|
|
|
|
|
|
|
|
7,670
|
|
|
Hyundai Motor Co.
|
|
|
385,526
|
|
|
|
604,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Building &
Construction Miscellaneous
|
|
|
1.90%
|
|
|
|
|
|
|
|
|
|
|
15,200
|
|
|
GS Engineering & Construction Corp.
|
|
|
353,456
|
|
|
|
3,181,081
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cellular
Telecommunications
|
|
|
0.54%
|
|
|
|
|
|
|
|
|
|
|
3,851
|
|
|
SK Telecom Co., Ltd.
|
|
|
698,091
|
|
|
|
904,282
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks
Non-US
|
|
|
1.35%
|
|
|
|
|
|
|
|
|
|
|
27,701
|
|
|
Kookmin Bank
|
|
|
886,609
|
|
|
|
2,251,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Financial
Services
|
|
|
2.38%
|
|
|
|
|
|
|
|
|
|
|
17,390
|
|
|
Korea Investment Holdings Co., Ltd.
|
|
|
688,754
|
|
|
|
1,544,576
|
|
|
37,520
|
|
|
Shinhan Financial Group Co., Ltd.
|
|
|
585,203
|
|
|
|
2,432,739
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,273,957
|
|
|
|
3,977,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic
Components Semiconductors
|
|
|
3.70%
|
|
|
|
|
|
|
|
|
|
|
10,114
|
|
|
Samsung Electronics Co., Ltd.
|
|
|
2,859,201
|
|
|
|
6,175,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance Credit
Card
|
|
|
0.39%
|
|
|
|
|
|
|
|
|
|
|
9,380
|
|
|
Samsung Card Co., Ltd.+
|
|
|
484,207
|
|
|
|
646,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery General
Industry
|
|
|
0.48%
|
|
|
|
|
|
|
|
|
|
|
18,900
|
|
|
Doosan Infracore Co., Ltd.
|
|
|
499,363
|
|
|
|
793,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Ferrous Metals
|
|
|
0.82%
|
|
|
|
|
|
|
|
|
|
|
6,830
|
|
|
Korea Zinc Co., Ltd.
|
|
|
254,371
|
|
|
|
1,364,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail
Discount
|
|
|
0.93%
|
|
|
|
|
|
|
|
|
|
|
1,990
|
|
|
Shinsegae Co., Ltd.
|
|
|
558,276
|
|
|
|
1,557,622
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipbuilding
|
|
|
1.35%
|
|
|
|
|
|
|
|
|
|
|
37,750
|
|
|
Samsung Heavy Industries Co., Ltd.
|
|
|
493,220
|
|
|
|
2,250,666
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Schedule of Investments (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
STOCKS (continued)
|
|
NUMBER
|
|
|
|
|
PERCENT OF
|
|
|
|
|
|
|
|
OF
SHARES
|
|
|
SECURITY
|
|
NET
ASSETS
|
|
|
COST
|
|
|
VALUE
|
|
|
|
|
|
|
|
|
South
Korea (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steel
Producers
|
|
|
2.41%
|
|
|
|
|
|
|
|
|
|
|
5,625
|
|
|
POSCO
|
|
$
|
710,822
|
|
|
$
|
4,028,117
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
South Korea
|
|
|
9,457,099
|
|
|
|
27,735,767
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taiwan
|
|
|
8.36%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Circuit Boards
|
|
|
0.57%
|
|
|
|
|
|
|
|
|
|
|
468,560
|
|
|
Unimicron Technology Corp.
|
|
|
761,240
|
|
|
|
945,797
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Computers
|
|
|
0.50%
|
|
|
|
|
|
|
|
|
|
|
311,324
|
|
|
Advantech Co., Ltd.
|
|
|
370,817
|
|
|
|
843,649
|
|
|
1
|
|
|
Compal Electronics, Inc.
|
|
|
1
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
370,818
|
|
|
|
843,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic
Components Miscellaneous
|
|
|
2.87%
|
|
|
|
|
|
|
|
|
|
|
258,003
|
|
|
Asustek Computer, Inc.
|
|
|
711,010
|
|
|
|
907,789
|
|
|
512,009
|
|
|
Hon Hai Precision Industry Co., Ltd.
|
|
|
1,030,503
|
|
|
|
3,887,474
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,741,513
|
|
|
|
4,795,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronic
Components Semiconductors
|
|
|
0.40%
|
|
|
|
|
|
|
|
|
|
|
34,250
|
|
|
MediaTek, Inc.
|
|
|
436,921
|
|
|
|
669,144
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Entertainment Software
|
|
|
0.63%
|
|
|
|
|
|
|
|
|
|
|
95,450
|
|
|
International Games System Co., Ltd
|
|
|
755,322
|
|
|
|
1,045,826
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life/Health Insurance
|
|
|
0.62%
|
|
|
|
|
|
|
|
|
|
|
401,000
|
|
|
Cathay Financial Holding Co., Ltd.
|
|
|
847,899
|
|
|
|
1,035,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Semiconductor
Components Integrated Circuits
|
|
|
2.77%
|
|
|
|
|
|
|
|
|
|
|
991,333
|
|
|
Advanced Semiconductor Engineering, Inc.
|
|
|
620,026
|
|
|
|
1,190,211
|
|
|
88,829
|
|
|
Novatek Microelectronics Corp., Ltd.
|
|
|
413,021
|
|
|
|
408,502
|
|
|
1,539,324
|
|
|
Taiwan Semiconductor Manufacturing Co., Ltd.
|
|
|
2,434,054
|
|
|
|
3,031,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,467,101
|
|
|
|
4,629,852
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Taiwan
|
|
|
8,380,814
|
|
|
|
13,965,449
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thailand
|
|
|
2.40%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial Banks
Non-US
|
|
|
0.62%
|
|
|
|
|
|
|
|
|
|
|
370,105
|
|
|
Siam Commercial Bank PCL
|
|
|
157,065
|
|
|
|
1,034,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Companies
Exploration & Production
|
|
|
0.83%
|
|
|
|
|
|
|
|
|
|
|
289,400
|
|
|
PTT Exploration & Production PCL
|
|
|
474,039
|
|
|
|
1,379,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil Refining &
Marketing
|
|
|
0.51%
|
|
|
|
|
|
|
|
|
|
|
303,200
|
|
|
Thai Oil PCL
|
|
|
509,471
|
|
|
|
856,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10
THE
ASIA TIGERS FUND, INC.
October
31, 2007
Schedule of Investments (concluded)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMMON
STOCKS (continued)
|
|
NUMBER
|
|
|
|
|
PERCENT OF
|
|
|
|
|
|
|
|
OF
SHARES
|
|
|
SECURITY
|
|
NET
ASSETS
|
|
|
COST
|
|
|
VALUE
|
|
|
|
|
|
|
|
|
Thailand
(continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate
Operations & Development
|
|
|
0.44%
|
|
|
|
|
|
|
|
|
|
|
981,000
|
|
|
Central Pattana PCL
|
|
$
|
456,377
|
|
|
$
|
743,291
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Thailand
|
|
|
1,596,952
|
|
|
|
4,013,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
COMMON STOCKS
|
|
$
|
62,752,719
|
|
|
$
|
167,274,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
REPURCHASE
AGREEMENT (0.94% of net assets)
|
PRINCIPAL
|
|
|
|
|
PERCENT OF
|
|
|
|
|
|
|
|
AMOUNT
|
|
|
SECURITY
|
|
NET
ASSETS
|
|
|
COST
|
|
|
VALUE
|
|
|
|
|
|
|
|
|
United
States
|
|
|
0.94%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Banks
|
|
|
|
|
|
|
|
|
$
|
1,573,677
|
|
|
State Street Bank, 2.10% dated 10/31/07, due 11/01/07, proceeds
at maturity $1,573,769
(Collaterized by $1,521,000 FNMA, 6%, due 05/15/08, Market Value
$1,574,014)
|
|
$
|
1,573,677
|
|
|
$
|
1,573,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
United States
|
|
|
1,573,677
|
|
|
|
1,573,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
REPURCHASE AGREEMENT
|
|
|
1,573,677
|
|
|
|
1,573,677
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
INVESTMENTS++
|
|
|
101.10%
|
|
|
$
|
64,326,396
|
|
|
|
168,847,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
IN EXCESS OF OTHER ASSETS
|
|
|
(1.10)%
|
|
|
|
|
|
|
|
(1,830,898
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
|
|
100.00%
|
|
|
|
|
|
|
$
|
167,016,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
This Schedule of Investments reflects each companys
country of domicile. The companies may
also be subject to the risks of other countries.
Footnotes and
Abbreviations
|
|
|
ADR
|
|
American Depository Receipt
|
144A
|
|
Security exempt from registration
under Rule 144A of the Securities Act of 1933. These
securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At
October 31, 2007, these securities amounted to a value of
$3,705,730.
|
|
|
|
+
|
|
Non-Income producing security
|
++
|
|
As of October 31, 2007, the
aggregate cost for federal income tax purposes was $64,565,434.
The aggregate gross unrealized appreciation (depreciation) for
all securities was as follows.
|
|
|
|
|
|
Excess of value over tax cost
|
|
$
|
104,525,834
|
|
|
|
|
|
|
Excess of tax cost over value
|
|
|
(243,556
|
)
|
|
|
|
|
|
|
|
$
|
104,282,278
|
|
|
|
|
|
|
See accompanying notes to financial
statements.
11
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Statement of Assets and Liabilities
|
|
|
|
|
ASSETS
|
|
|
|
|
Investments, at value (cost $64,326,396)
|
|
$
|
168,847,712
|
|
Cash (cost $253,269)
|
|
|
251,318
|
|
Receivables:
|
|
|
|
|
Securities sold
|
|
|
149,756
|
|
Dividends
|
|
|
5,410
|
|
Prepaid expenses
|
|
|
8,001
|
|
|
|
|
|
|
Total
Assets
|
|
|
169,262,197
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Payable for securities purchased
|
|
|
520,758
|
|
Due to brokers
|
|
|
36
|
|
Due to Investment Manager
|
|
|
133,084
|
|
Due to Administrator
|
|
|
26,617
|
|
Due to Directors
|
|
|
5,186
|
|
Accrued expenses
|
|
|
146,548
|
|
Deferred foreign withholding taxes payable
|
|
|
1,413,154
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
2,245,383
|
|
|
|
|
|
|
Net
Assets
|
|
$
|
167,016,814
|
|
|
|
|
|
|
NET
ASSET VALUE PER SHARE
($167,016,814 / 4,679,392 shares issued and
outstanding)
|
|
$
|
35.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS CONSIST OF:
|
|
|
|
|
Capital stock, $0.001 par value; 20,514,984 shares
issued
(100,000,000 shares authorized)
|
|
$
|
20,515
|
|
Paid-in capital
|
|
|
217,630,202
|
|
Cost of 15,835,592 shares repurchased
|
|
|
(155,906,312
|
)
|
Accumulated net realized gain on investments
|
|
|
2,165,653
|
|
Net unrealized appreciation in value of investments and on
translation of other assets and liabilities denominated in
foreign currencies (net of deferred foreign withholding taxes of
$1,413,154)
|
|
|
103,106,756
|
|
|
|
|
|
|
|
|
$
|
167,016,814
|
|
|
|
|
|
|
12
See accompanying notes to financial
statements.
THE
ASIA TIGERS FUND, INC.
Statement of Operations
For
the Year Ended
October 31, 2007
|
|
|
|
|
|
|
|
|
|
Investment
Income
|
|
|
|
|
|
|
|
|
Dividends (net of taxes withheld of $170,931)
|
|
|
|
|
|
$
|
1,972,023
|
|
Interest
|
|
|
|
|
|
|
27,228
|
|
|
|
|
|
|
|
|
|
|
Total
Investment Income
|
|
|
|
|
|
|
1,999,251
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
Management fees
|
|
|
1,199,166
|
|
|
|
|
|
Legal fees
|
|
|
103,536
|
|
|
|
|
|
Administration fees
|
|
|
239,833
|
|
|
|
|
|
Printing
|
|
|
204,288
|
|
|
|
|
|
Custodian fees
|
|
|
165,755
|
|
|
|
|
|
Audit and tax fees
|
|
|
135,772
|
|
|
|
|
|
Insurance
|
|
|
118,944
|
|
|
|
|
|
Directors fees
|
|
|
36,906
|
|
|
|
|
|
Transfer agent fees
|
|
|
24,475
|
|
|
|
|
|
NYSE fees
|
|
|
21,250
|
|
|
|
|
|
ICI fees
|
|
|
2,859
|
|
|
|
|
|
Miscellaneous
|
|
|
30,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Expenses
|
|
|
|
|
|
|
2,283,216
|
|
|
|
|
|
|
|
|
|
|
Net
Investment Loss
|
|
|
|
|
|
|
(283,965
|
)
|
|
|
|
|
|
|
|
|
|
Net
Realized and Unrealized Gain (Loss) on Investments, Foreign
Currency Holdings and Translation of Other Assets and
Liabilities Denominated in Foreign Currencies:
|
|
|
|
|
|
|
|
|
Net realized gain (loss) from:
|
|
|
|
|
|
|
|
|
Security transactions (net of capital gains tax of $112,447)
|
|
|
|
|
|
|
17,512,585
|
|
Foreign currency related transactions
|
|
|
|
|
|
|
(59,496
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,453,089
|
|
Net change in unrealized appreciation in value of investments,
foreign currency holdings and translation of other assets and
liabilities denominated in foreign currencies (net of increase
in deferred foreign withholding taxes of $717,666)
|
|
|
|
|
|
|
62,407,643
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gain on investments, foreign
currency holdings and translation of other assets and
liabilities denominated in foreign currencies
|
|
|
|
|
|
|
79,860,732
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
|
|
|
|
$
|
79,576,767
|
|
|
|
|
|
|
|
|
|
|
13
See accompanying notes to financial
statements.
THE
ASIA TIGERS FUND, INC.
Statement of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
For the Year
|
|
|
For the Year
|
|
|
|
Ended
|
|
|
Ended
|
|
|
|
October 31,
2007
|
|
|
October 31,
2006
|
|
|
INCREASE
(DECREASE) IN NET ASSETS
|
|
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
Net investment loss
|
|
$
|
(283,965
|
)
|
|
$
|
(3,255
|
)
|
Net realized gain on investments and foreign currency related
transactions
|
|
|
17,453,089
|
|
|
|
13,265,743
|
|
Net change in unrealized appreciation in value of investments,
foreign currency holdings and translation of other assets and
liabilities denominated in foreign currencies
|
|
|
62,407,643
|
|
|
|
18,556,371
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
|
79,576,767
|
|
|
|
31,818,859
|
|
|
|
|
|
|
|
|
|
|
Capital
Share Transactions
|
|
|
|
|
|
|
|
|
Shares repurchased under Repurchase Offers (265,535 and
767,564 shares, respectively) (net of repurchase fees of
$152,386 and $271,885 respectively) (including expenses of
$91,553 and $258,087 respectively)
|
|
|
(7,559,674
|
)
|
|
|
(13,580,170
|
)
|
|
|
|
|
|
|
|
|
|
Net decrease in net assets resulting from capital share
transactions
|
|
|
(7,559,674
|
)
|
|
|
(13,580,170
|
)
|
|
|
|
|
|
|
|
|
|
Total increase (decrease) in net assets
|
|
|
72,017,093
|
|
|
|
18,238,689
|
|
|
|
|
|
|
|
|
|
|
NET
ASSETS
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
94,999,721
|
|
|
|
76,761,032
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
$
|
167,016,814
|
|
|
$
|
94,999,721
|
|
|
|
|
|
|
|
|
|
|
14
See accompanying notes to financial
statements.
THE
ASIA TIGERS FUND, INC.
Financial Highlights
For
a Share Outstanding throughout Each Period
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Year
|
|
|
For the Year
|
|
|
For the Year
|
|
|
For the Year
|
|
|
For the Year
|
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
Ended
|
|
|
|
Oct. 31,
2007
|
|
|
Oct. 31,
2006
|
|
|
Oct. 31,
2005
|
|
|
Oct. 31,
2004
|
|
|
Oct. 31,
2003
|
|
|
|
|
Per
Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
19.21
|
|
|
$
|
13.44
|
|
|
$
|
10.98
|
|
|
$
|
10.62
|
|
|
$
|
7.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
(loss)1
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
0.06
|
|
|
|
0.07
|
|
|
|
0.05
|
|
Net realized and unrealized gains on investments, foreign
currency holdings, and translation of other assets and
liabilities denominated in foreign
currencies2
|
|
|
16.53
|
|
|
|
5.77
|
|
|
|
2.38
|
|
|
|
0.35
|
|
|
|
2.87
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase from investment operations
|
|
|
16.47
|
|
|
|
5.77
|
|
|
|
2.44
|
|
|
|
0.42
|
|
|
|
2.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less dividends and distributions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital share transactions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anti-dilutive effect of Tender Offer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Anti-dilutive effect of Repurchase Offer
|
|
|
0.01
|
|
|
|
|
|
|
|
0.02
|
|
|
|
0.01
|
|
|
|
0.05
|
|
Anti-dilutive effect of Share Repurchase Program
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total capital share transactions
|
|
|
0.01
|
|
|
|
|
|
|
|
0.02
|
|
|
|
0.01
|
|
|
|
0.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
35.69
|
|
|
$
|
19.21
|
|
|
$
|
13.44
|
|
|
$
|
10.98
|
|
|
$
|
10.62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per share market value, end of period
|
|
$
|
32.86
|
|
|
$
|
18.55
|
|
|
$
|
12.91
|
|
|
$
|
10.02
|
|
|
$
|
10.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
Investment
Return3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based
on Market Value
|
|
|
77.14
|
%
|
|
|
43.69
|
%
|
|
|
28.84
|
%
|
|
|
(2.13
|
)%
|
|
|
52.14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios/Supplemental
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (in 000s)
|
|
$
|
167,017
|
|
|
$
|
95,000
|
|
|
$
|
76,761
|
|
|
$
|
77,029
|
|
|
$
|
91,480
|
|
Ratios of expenses to average net assets
|
|
|
1.90
|
%
|
|
|
2.20
|
%
|
|
|
2.08
|
%
|
|
|
1.99
|
%
|
|
|
1.95
|
%
|
Ratios of net investment income (loss) to average net assets
|
|
|
(0.24
|
)%
|
|
|
|
4
|
|
|
0.49
|
%
|
|
|
0.65
|
%
|
|
|
0.60
|
%
|
Portfolio turnover
|
|
|
31.53
|
%
|
|
|
36.44
|
%
|
|
|
40.79
|
%
|
|
|
39.79
|
%
|
|
|
33.10
|
%
|
See page 16 for footnotes.
15
See accompanying notes to financial
statements.
THE
ASIA TIGERS FUND, INC.
Financial Highlights (concluded)
For
a Share Outstanding throughout Each Period
|
|
|
1 |
|
Based on average shares
outstanding throughout the period.
|
2 |
|
Net of deferred foreign
withholding taxes of $0.02, $0.01, $0.03, less than $0.01 and
$0.03 per share for the years ended October 31, 2007,
October 31, 2006, October 31, 2005, October 31,
2004 and October 31, 2003, respectively.
|
3 |
|
Total investment return is
calculated assuming a purchase of common stock at the current
market price on the first day and a sale at the current market
price on the last day of each period reported. Dividends and
distributions, if any, are assumed, for purposes of this
calculation, to be reinvested at prices obtained under the
Funds dividend reinvestment plan. Total investment return
does not reflect brokerage commissions or sales charges and is
not annualized. Past performance is not a guarantee of future
results.
|
4 |
|
Less than 0.01%.
|
16
See accompanying notes to financial
statements.
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Notes to Financial Statements
NOTE A:
ORGANIZATION
The Asia Tigers Fund, Inc. (the Fund) was
incorporated in Maryland on September 23, 1993 and
commenced operations on November 29, 1993. The Fund is
registered under the Investment Company Act of 1940, as amended
(the 1940 Act), as a closed-end, non-diversified
management investment company. The Funds investment
objective is long-term capital appreciation, which it seeks to
achieve by investing primarily in equity securities of Asian
companies.
NOTE B:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies, which are in
conformity with generally accepted accounting principles in the
United States of America (GAAP) and are consistently
followed by the Fund in the preparation of its financial
statements.
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of increases
and decreases in net assets from operations during the reported
period. Actual results could differ from those estimates.
Significant
accounting policies are as follows:
Portfolio Valuation. Investments are stated at value
in the accompanying financial statements. In valuing the
Funds assets, all securities for which market quotations
are readily available are generally valued:
|
|
|
|
(i)
|
at the last sale price prior to the time of determination if
there was a sale on the date of determination,
|
|
|
(ii)
|
at the mean between the last current bid and asked prices if
there was no sales price on such date and bid and asked
quotations are available, and
|
|
|
(iii)
|
at the bid price if there was no sales price on such date and
only bid quotations are available.
|
Securities that are traded
over-the-counter
are valued, if bid and asked quotations are available, at the
mean between the current bid and asked prices. Securities for
which sales prices and bid and asked quotations are not
available on the date of determination may be valued at the most
recently available prices or quotations under policies adopted
by the Board of Directors. Investments in short-term debt
securities having a maturity of 60 days or less are valued
at amortized cost which approximates market value. All other
securities and assets are carried at fair value as determined in
good faith by, or under the direction of, the Board of
Directors. The net asset value per share of the Fund is
calculated weekly and at the end of each month.
Repurchase Agreements. The Fund may enter into
repurchase agreements, whereby securities are purchased from a
counterparty under an agreement to resell them at a future date
at the same price plus
17
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Notes to Financial Statements
(continued)
accrued interest. The Fund is exposed to credit risk on
repurchase agreements to the extent that the counterparty
defaults on its obligation to repurchase the securities, and the
market value of such securities held by the Fund, including any
accrued interest or dividends on such securities, is less than
the face amount of the repurchase agreement plus accrued
interest.
Investment Transactions and Investment
Income. Investment transactions are accounted for on
the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial
reporting and income tax purposes. Interest income is recorded
on an accrual basis; dividend income is recorded on the
ex-dividend date or when known. The collectibility of income
receivable from foreign securities is evaluated periodically,
and any resulting allowances for uncollectible amounts are
reflected currently in the determination of investment income.
Tax Status. No provision is made for
U.S. federal income or excise taxes as it is the
Funds intention to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended (the Code), and to make the
requisite distributions to its stockholders which will be
sufficient to relieve it from all or substantially all Federal
income and excise taxes.
Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ
from GAAP.
At October 31, 2007, the Fund had tax basis undistributed
long-term capital gains of $2,404,691.
During the year ended October 31, 2007, the Fund reduced
accumulated net investment loss by $283,965, increased
accumulated net realized gain by $171,943 and reduced paid-in
capital by $455,908. These reclassifications were the result of
permanent tax differences relating to the net operating loss,
foreign currency losses and capital gains taxes. Net assets were
not affected by these reclassifications.
The Fund utilized capital loss carryforwards amounting to
$15,214,589 during the year ended October 31, 2007.
Dividend and interest income from
non-U.S. sources
received by the Fund are generally subject to
non-U.S. withholding
taxes. In addition, the Fund may be subject to capital gains tax
in certain countries in which it invests. The above taxes may be
reduced or eliminated under the terms of applicable
U.S. income tax treaties with some of these countries. The
Fund accrues such taxes when the related income is earned.
In June 2006, the Financial Accounting Standards Board issued
Interpretation No. 48, Accounting for Uncertainty in
Income Taxes an Interpretation of FASB Statement
No. 109 (FIN 48). FIN 48
establishes for all entities, including pass-through entities
such as the Fund, a minimum threshold for financial statement
recognition of the benefit of positions taken in filing tax
returns, including whether an entity is taxable in a particular
jurisdiction, and requires certain expanded tax disclosures.
FIN 48 permits the recognition of the benefit of an
uncertain tax position only when the position is more like
than not to
18
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Notes to Financial Statements
(continued)
be sustained assuming examination by taxing authorities. The
Fund is required to adopt the provisions of FIN 48 on
April 30, 2008. At adoption, companies must adjust their
financial statements to reflect only those tax positions that
are more likely than not to be sustained as of the adoption
date. At this time, management is evaluating the implications of
FIN 48, and its impact on the Funds financial
statements has not yet been determined.
In September 2006, the FASB issued Statement on Financial
Accounting Standards (SFAS) No. 157, Fair
Value Measurements. (SFAS No. 157)
This standard establishes a single authoritative definition
of fair value, sets out a framework for measuring fair value and
requires additional disclosures about fair value measurements.
SFAS No. 157 applies to fair value measurements already
required or permitted by existing standards.
SFAS No. 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007
and interim periods within those fiscal years. The changes to
current generally accepted accounting principles from the
application of this Statement relate to the definition of fair
value, the methods used to measure fair value, and the expanded
disclosures about fair value measurements. As of
October 31, 2007, the Fund does not believe the adoption of
SFAS No. 157 will impact the amounts reported in the
financial statements; however, additional disclosures may be
required about the inputs used to develop the measurements and
the effect of certain of the measurements reported on the
Statement of Changes in Net Assets for a fiscal period.
Foreign Currency Translation. The books and records
of the Fund are maintained in U.S. dollars. Foreign
currency amounts are translated into U.S. dollars on the
following basis:
|
|
|
|
(i)
|
value of investment securities, assets and liabilities at the
current rates of exchange on the valuation date; and
|
|
|
(ii)
|
purchases and sales of investment securities, income and
expenses at the relevant rates of exchange prevailing on the
respective dates of such transactions.
|
The Fund generally does not isolate the effect of fluctuations
in foreign exchange rates from the effect of fluctuations in the
market prices of securities. However, the Fund does isolate the
effect of fluctuations in foreign currency rates when
determining the gain or loss upon the sale of foreign currency
denominated debt obligations pursuant to U.S. federal
income tax regulations; such amounts are categorized as foreign
currency gains or losses for federal income tax purposes. The
Fund reports certain realized foreign exchange gains and losses
as components of realized gains and losses for financial
reporting purposes, whereas such amounts are treated as ordinary
income for U.S. federal income tax reporting purposes.
Securities denominated in currencies other than
U.S. dollars are subject to changes in value due to
fluctuations in foreign exchange rates. Foreign security and
currency transactions may involve certain considerations and
risks not typically associated with those of domestic origin as
a result of, among other factors, the level of governmental
supervision and regulation of foreign securities markets and the
19
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Notes to Financial Statements
(continued)
possibility of political or economic instability, as well as the
fact that foreign securities markets may be smaller and have
less developed and less reliable settlement and share
registration procedures.
Distribution of Income and Gains. The Fund intends
to distribute annually to stockholders substantially all of its
net investment income, including foreign currency gains, and to
distribute annually any net realized gains after the utilization
of available capital loss carryovers. An additional distribution
may be made to the extent necessary to avoid payment of a 4%
federal excise tax.
Distributions to stockholders are recorded on the ex-dividend
date. The amount of dividends and distributions from net
investment income and net realized gains are determined in
accordance with federal income tax regulations, which may differ
from GAAP. These book/tax differences are either
considered temporary or permanent in nature. To the extent these
differences are permanent in nature, such amounts are
reclassified at the end of each fiscal year with the capital
accounts based on their federal tax-basis treatment; temporary
differences do not require reclassification. Dividends and
distributions which exceed net investment income and net
realized capital gains for financial reporting purposes but not
for tax purposes are reported as dividends in excess of net
investment income and net realized capital gains. To the extent
they exceed net investment income and net realized gains for tax
purposes, they are reported as distributions of additional
paid-in capital.
NOTE C:
MANAGEMENT, INVESTMENT ADVISORY, ADMINISTRATIVE SERVICES AND
DIRECTORS
Blackstone Asia Advisors L.L.C. (Blackstone
Advisors), an affiliate of The Blackstone Group L.P.
(Blackstone), serves as the Funds Investment
Manager under the terms of a management agreement dated
February 24, 2006 (the Management Agreement).
Pursuant to the Management Agreement, Blackstone Advisors
supervises the Funds investment program and is responsible
on a
day-to-day
basis for investing the Funds portfolio in accordance with
its investment objective and policies. For its services,
Blackstone Advisors receives monthly fees at an annual rate of:
(i) 1.00% for the first $500,000,000 of the Funds
average weekly net assets; (ii) 0.95% for the next
$500,000,000 of the Funds average weekly net assets; and
(iii) 0.90% of the Funds average weekly net assets in
excess of $1,000,000,000. For the year ended October 31,
2007, the Fund paid a total of $1,199,166 in management fees to
Blackstone Advisors.
Blackstone Advisors also serves as the Funds Administrator
pursuant to an administration agreement dated January 1,
2006. Blackstone Advisors provides certain administrative
services to the Fund. For its services, Blackstone Advisors
receives a fee that is computed monthly and paid quarterly at an
annual rate of: (i) 0.20% of the value of the Funds
average monthly net assets for the first $1,500,000,000 of the
Funds average monthly net assets and (ii) 0.15% of
the value of the Funds average monthly net assets in
excess of $1,500,000,000 of the Funds average monthly net
assets. For the year ended October 31, 2007, the Fund paid
$239,833 in administrative fees to Blackstone Advisors.
Blackstone Advisors subcontracts certain of these services to
PFPC Inc.
20
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Notes to Financial Statements
(continued)
The Fund pays each of its Directors who is not a director,
officer or employee of the Investment Manager or any affiliate
thereof an annual fee of $5,000 plus $1,000 for each in-person
Board of Directors meeting and $250 for each telephonic Board of
Directors meeting attended. The Chairman of the Board also
receives an annual fee of $2,500. In addition, the Fund
reimburses all Directors for travel and
out-of-pocket
expenses incurred in connection with Board of Directors meetings.
NOTE D:
PORTFOLIO ACTIVITY
Aggregate purchases and sales of securities other than
short-term obligations totaled $38,041,028 and $46,594,510,
respectively, for the year ended October 31, 2007.
NOTE E:
SEMI-ANNUAL REPURCHASE OFFERS
In January 2002, the Board of Directors approved, subject to
stockholder approval, a fundamental policy whereby the Fund
would adopt an interval fund structure pursuant to
Rule 23c-3
under the 1940 Act. Stockholders of the Fund subsequently
approved the policy at the Special Meeting of Stockholders held
on April 26, 2002. As an interval fund, the Fund makes
periodic repurchase offers at net asset value (less a 2%
repurchase fee) to all Fund stockholders. The percentage of
outstanding shares that the Fund can repurchase in each offer
will be established by the Funds Board of Directors
shortly before the commencement of each offer, and will be
between 5% and 25% of the Funds then outstanding shares.
Under the Funds original policy, the Fund conducted
quarterly repurchase offers. This policy was amended at the
February 23, 2007 Annual Meeting of Stockholders to provide
that the Fund will from that date forward conduct repurchase
offers on a semi-annual, rather than on a quarterly, basis.
21
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Notes to Financial Statements
(continued)
During the year ended October 31, 2007, the results of the
periodic repurchase offers were as follows:
|
|
|
|
|
|
|
|
|
|
Repurchase
|
|
|
Repurchase
|
|
|
|
Offer #17
|
|
|
Offer #18
|
Commencement Date
|
|
|
December 22, 2006
|
|
|
June 22, 2007
|
|
|
|
|
|
|
|
Expiration Date
|
|
|
January 12, 2007
|
|
|
July 13, 2007
|
|
|
|
|
|
|
|
Repurchase Offer Date
|
|
|
January 19, 2007
|
|
|
July 20, 2007
|
|
|
|
|
|
|
|
% of Issued and Outstanding Shares of Common Stock
|
|
|
5%
|
|
|
5%
|
|
|
|
|
|
|
|
Shares Validly Tendered
|
|
|
19,251.0000
|
|
|
641,216.4147
|
|
|
|
|
|
|
|
Final Pro-ration Odd Lot Shares
|
|
|
no proration
|
|
|
50,101.5740
|
|
|
|
|
|
|
|
Final Pro-ration Non-Odd Lot Shares
|
|
|
no proration
|
|
|
591,114.8407
|
|
|
|
|
|
|
|
% of Non-Odd Lot Shares Accepted
|
|
|
no proration
|
|
|
33.1885%
|
|
|
|
|
|
|
|
Shares Accepted for Tender
|
|
|
19,251
|
|
|
246,284
|
|
|
|
|
|
|
|
Net Asset Value as of Repurchase Offer Date ($)
|
|
|
21.39
|
|
|
29.27
|
|
|
|
|
|
|
|
Repurchase Fee per Share ($)
|
|
|
0.4278
|
|
|
0.5853
|
|
|
|
|
|
|
|
Repurchase Offer Price ($)
|
|
|
20.9622
|
|
|
28.6847
|
|
|
|
|
|
|
|
Repurchase Fee ($)
|
|
|
8,236
|
|
|
144,150
|
|
|
|
|
|
|
|
Expenses ($)
|
|
|
78,293
|
|
|
13,260
|
|
|
|
|
|
|
|
Total Cost ($)
|
|
|
481,836
|
|
|
7,077,838
|
|
|
|
|
|
|
|
22
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Notes to Financial Statements
(continued)
During the year ended October 31, 2006, the results of the
four quarterly repurchase offers were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase
|
|
|
Repurchase
|
|
|
Repurchase
|
|
|
Repurchase
|
|
|
|
Offer #13
|
|
|
Offer #14
|
|
|
Offer #15
|
|
|
Offer #16
|
Commencement Date
|
|
|
December 22, 2005
|
|
|
March 24, 2006
|
|
|
June 23, 2006
|
|
|
September 22, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration Date
|
|
|
January 13, 2006
|
|
|
April 17, 2006
|
|
|
July 14, 2006
|
|
|
October 13, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase Offer Date
|
|
|
January 20, 2006
|
|
|
April 21, 2006
|
|
|
July 21, 2006
|
|
|
October 20, 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Issued and Outstanding Shares of Common Stock
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Validly Tendered
|
|
|
285,625.8018
|
|
|
211,376.0000
|
|
|
10,303.0000
|
|
|
334,390.0000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Final Pro-ration Odd Lot Shares
|
|
|
2,389.0000
|
|
|
no proration
|
|
|
no proration
|
|
|
3,047.0000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Final Pro-ration Non-Odd Lot Shares
|
|
|
283,236.8018
|
|
|
no proration
|
|
|
no proration
|
|
|
257,212.0000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% of Non-Odd Lot Shares Accepted
|
|
|
22.49230%
|
|
|
no proration
|
|
|
no proration
|
|
|
77.62700%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Accepted for Tender
|
|
|
285,626
|
|
|
211,376
|
|
|
10,303
|
|
|
260,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value as of Repurchase Offer Date ($)
|
|
|
15.92
|
|
|
18.63
|
|
|
16.69
|
|
|
18.97
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase Fee per Share ($)
|
|
|
0.3184
|
|
|
0.3726
|
|
|
0.3340
|
|
|
0.3794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase Offer Price ($)
|
|
|
15.6016
|
|
|
18.2574
|
|
|
16.3540
|
|
|
18.5906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repurchase Fee ($)
|
|
|
90,943
|
|
|
78,759
|
|
|
3,441
|
|
|
98,742
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses ($)
|
|
|
57,055
|
|
|
89,239
|
|
|
42,710
|
|
|
69,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Cost ($)
|
|
|
4,513,262
|
|
|
3,948,415
|
|
|
211,195
|
|
|
4,907,298
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
THE
ASIA TIGERS FUND, INC.
October 31,
2007
Notes to Financial Statements
(concluded)
NOTE F:
CONCENTRATION OF RISKS
At October 31, 2007, substantially all of the Funds
assets were invested in Asian securities. The Asian securities
markets are substantially smaller, less developed, less liquid
and more volatile than the major securities markets in the
United States. Consequently, acquisitions and dispositions of
Asian securities involve special risks and considerations not
present with respect to U.S. securities.
Securities denominated in currencies other than
U.S. dollars are subject to changes in value due to
fluctuations in foreign exchange. Foreign security and currency
transactions involve certain considerations and risks not
typically associated with those of domestic origin as a result
of, among other factors, the level of governmental supervision
and regulation of foreign securities markets and the
possibilities of political or economic instability, the fact
that foreign securities markets may be smaller and less
developed and the fact that securities, tax and corporate laws
may have only recently developed or are in developing stages,
and laws may not exist to cover all contingencies or to protect
investors adequately.
NOTE G:
OTHER
In the normal course of business, the Fund may enter into
contracts that contain a variety of representations and
warranties which may provide for general indemnifications. The
Funds maximum exposure under these arrangements is
unknown, as this would involve future claims that may be made
against the Fund that have not yet occurred. However, based on
experience, management expects the risk of loss to be remote.
24
THE
ASIA TIGERS FUND, INC.
Report of Independent Registered
Public Accounting Firm
To the Board of Directors and Shareholders of
The Asia Tigers Fund, Inc.
In our opinion, the accompanying statement of assets and
liabilities, including the schedule of investments, and the
related statement of operations and statements of changes in net
assets and the financial highlights present fairly, in all
material respects, the financial position of The Asia Tigers
Fund, Inc. (hereafter referred to as the Fund) at
October 31, 2007, the results of its operations for the
year then ended, the changes in its net assets for each of the
two years in the period then ended and the financial highlights
for each of the five years in the period then ended, in
conformity with accounting principles generally accepted in the
United States of America. These financial statements and
financial highlights (hereafter referred to as financial
statements) are the responsibility of the Funds
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the
standards of the Public Company Accounting Oversight Board
(United States.) Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant
estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits,
which included confirmation of securities at October 31,
2007 by correspondence with the custodian and brokers, provide a
reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 18, 2007
25
THE
ASIA TIGERS FUND, INC.
The following sections of this Annual Report are not a part of
the audited financial statements.
Continuation of the Management
Agreement
Approval of
Continuation of Management Agreement
The Investment Company Act of 1940, as amended (the 1940
Act), requires that the Funds Board of Directors,
including a majority of its Directors who are not affiliated
with the Funds investment adviser (the Independent
Directors) voting separately, approve the Funds
advisory agreement and the related fees for its initial term of
two years and on an annual basis thereafter at a meeting called
for the purpose of voting on the agreements approval or
continuation. At a meeting held in person on October 23,
2007, the Board, including the Independent Directors, considered
the first annual continuation of the management agreement (the
Management Agreement) dated February 24, 2006
between the Fund and Blackstone Asia Advisors L.L.C.
(Blackstone Advisors). At the meeting, the Board,
including the Independent Directors, unanimously approved the
continuation of the Management Agreement for an additional
one-year term, or through February 23, 2008. In making this
decision, the Independent Directors were represented by
independent counsel (independent counsel) who
assisted them in their deliberations prior to and during the
Board meeting and in an executive session with just the
Independent Directors and their independent counsel present. The
Board of Directors also approved the continuation of the
administration agreement dated January 1, 2006 between the
Fund and Blackstone Advisors, pursuant to which Blackstone
Advisors serves as the Funds administrator.
In considering the continuation of the Management Agreement, the
Independent Directors, through their independent counsel,
requested and received information from Blackstone Advisors,
which included, among other things, information about Blackstone
Advisors business, personnel and operations, services,
compensation from and other benefits from its relation with the
Fund and compliance activities. The materials provided by
Blackstone Advisors also included information regarding the
Funds investment performance and expenses compared to
those of other funds with investment objectives and policies
similar to those of the Fund and to the Funds comparative
index as well as an analysis of the profitability of the
investment advisory relationship to Blackstone Advisors. Fund
counsel provided the Board a memorandum outlining its legal
duties. Independent counsel provided a memorandum to the
Independent Directors outlining their responsibilities with
respect to approval of the Management Agreement. This
information supplemented the information received by the Board
at meetings throughout the past year and the Directors
general knowledge and familiarity of the Fund, including their
knowledge and familiarity with the investment management
capabilities of Blackstone Advisors and the scope and quality of
its services to the Fund. The information and materials provided
by Blackstone Advisors in connection with the Boards
consideration of the continuation of the Management Agreement
were reviewed in light of commitments and undertakings made by
Blackstone Advisors in connection with the Boards approval
of the Management Agreement for its initial term as to
Blackstone Advisors plans and intentions for the
management, operations and administration of the Fund and the
Funds compliance program.
26
THE
ASIA TIGERS FUND, INC.
Continuation of the Management
Agreement (continued)
In considering the continuation of the Management Agreement, the
Board considered the following factors, among others:
1. The qualifications of Blackstone Advisors, including
the nature, extent and quality of the services to be provided
and the investment performance of the Fund and Blackstone
Advisors. The Directors reviewed the services that
Blackstone Advisors provides to the Fund, including, but not
limited to, making the day-to-day decisions for investing the
Funds assets in accordance with the Funds objectives
and policies and investment restrictions, subject to the
supervision and direction of the Board. Blackstone Advisors also
makes available research and statistical data to the Fund and
monitors the performance of the Funds outside service
providers, including the Funds sub-administrator, transfer
agent and custodian.
In addition, the Directors considered the education, background
and experience of the personnel and management teams at
Blackstone Advisors, and in particular, the performance record
of Punita Kumar-Sinha, the Funds portfolio manager. Among
other things, they took into consideration the favorable history
of Ms. Kumar-Sinha for the Fund, finding that this has had,
and would likely continue to have, a favorable impact on the
success of the Fund. The Directors also discussed at length
Blackstone Advisors employee turnover, compensation and
budget structure and its ability and efforts to attract and
retain quality and experienced personnel. They discussed at
length the quality of the support provided by Blackstone
Advisors and its affiliates to the Fund. The Directors also
discussed Blackstone Advisors investment outlook for the
Fund. The Directors concluded that they were satisfied with the
services that had been provided to the Fund by Blackstone
Advisors.
The Directors reviewed the past investment performance of the
Fund and Blackstone Advisors as well as the past investment
performance of the Funds peers. In particular, the
Directors focused on the analysis of the Funds performance
in the materials provided by Blackstone Advisors, noting that
the Funds performance was comparable to that of its peer
group, and that the Fund outperformed its benchmark, the MSCI AC
Asia ex-Japan Index, over the one-year, three-year and five-year
periods ending August 31, 2007 as well as the period
commencing on June 30, 1999, the date Ms. Kumar-Sinha
became the Funds portfolio manager, and ending
August 31, 2007. Further, the Funds performance was
strong over each of these periods in absolute terms. The
Directors recognized that past performance is not an indicator
of future performance, but concluded that Blackstone Advisors
has appropriate expertise to continue to manage the Fund in
accordance with its investment objectives and strategies.
2. The reasonableness of the advisory fees. The
Directors considered the costs of the services provided by
Blackstone Advisors. As part of their analysis, the Directors
gave substantial consideration to the comparisons of fees and
expense ratios of the Fund as described in the materials
provided by Blackstone Advisors. Under the Management Agreement,
the Fund pays to Blackstone Advisors a monthly fee at an annual
rate of: (i) 1.00% of the Funds average weekly net
assets for the first $500,000,000; (ii) 0.95% of the
Funds average weekly net assets for the next $500,000,000;
and (iii) 0.90% of the Fund average weekly net assets
in excess of $1,000,000,000.
27
THE
ASIA TIGERS FUND, INC.
Continuation of the Management
Agreement (continued)
In reviewing the investment advisory fees, the Directors
reviewed the advisory fee and noted that the Funds fee is
equal to or higher than those of the funds in its peer group.
The Directors also noted that the Fund during 2006 had the
highest expense ratio among the funds in its peer group. The
Directors considered the other benefits to Blackstone Advisors
and its affiliates from the relationship with the Fund,
including, among others, the administration fees paid to
Blackstone Advisors. Further, the Directors considered the
extent to which Blackstone Advisors believes economies of scale
may be realized if the Fund grows and whether the fee levels
reflect economies of scale for the benefit of the Funds
stockholders, noting that the fee structure would have the
effect of lowering the Funds fees paid at certain asset
levels. The Board determined that the current amount and
structure of the fee is appropriate in light of the nature,
quality and scope of the investment advisory services provided
by Blackstone Advisors to the Fund.
3. The operating expenses of the Fund. The
Directors reviewed the operating expenses of the Fund, on an
absolute basis and as compared to those of its peer group. The
Directors noted that, as described in the materials provided by
Blackstone Advisors, the annualized expense ratio had slightly
decreased in 2007 as compared to 2006. The Directors concluded
that the expenses of the Fund have been reasonable.
4. Portfolio transactions. The Directors
discussed the policies and practices of the Fund and Blackstone
Advisors in effecting portfolio transactions. The Directors
considered the Funds general policies with respect to
brokerages, including payment levels, allocation policies among
clients and use of soft dollars, as described in the materials
provided by Blackstone Advisors, and discussed whether the
transactions were carried out competently and within the scope
of applicable governmental and Fund policy limitations. The
Directors also discussed transactions with affiliates, portfolio
turnover rates, the recapture of brokerage commissions and the
consideration of research services in placing portfolio
transactions. The Directors took into consideration other
benefits derived by Blackstone Advisors in connection with the
Management Agreement, noting particularly that Blackstone
Advisors does not use soft dollars in connection with portfolio
transactions for the Fund. Although it may receive unsolicited
proprietary research reports from brokers that execute
transactions for the Fund, Blackstone Advisors advised the Board
that brokers are not selected based on this research.
5. Blackstone Advisors management of other funds
and other investments and fees paid. The Directors
discussed Blackstone Advisors management of other funds
and other investment products and the fees paid in those
instances, noting that Blackstone Advisors managed one other
registered fund and other unregistered funds that invest in
Asia. The Directors compared both the services rendered and the
fees paid under the Management Agreement to the services
rendered and fees paid by the other funds, and the Directors
determined that the services and fees are comparable to those
being offered to the other funds by Blackstone Advisors.
6. The profitability of Blackstone Advisors and its
affiliates with respect to their relationship to the
Fund. The Directors reviewed information regarding the
profitability to Blackstone Advisors of its relationship with
the Fund. The Board considered the level of Blackstone
Advisors profits and whether the profits were reasonable
for Blackstone Advisors. The profitability analysis took into
consideration fall-out benefits from
28
THE
ASIA TIGERS FUND, INC.
Continuation of the Management
Agreement (continued)
Blackstone Advisors relationship with the Fund, including
fees paid to Blackstone Advisors under the Management Agreement
and under the Administration Agreement. The Directors found that
the profits realized by Blackstone Advisors from its
relationship with the Fund were not unreasonable in light of the
nature, scope and quality of services provided by Blackstone
Advisors to the Fund.
In considering whether to approve the continuation of the
Management Agreement, the Board did not identify nor was any
single factor determinative to the decision of the Board. The
Board also separately considered the operational, administrative
and other services provided to the Fund under the Administration
Agreement between the Fund and Blackstone Advisors. The
Independent Directors were satisfied with the services provided
by Blackstone Advisors to the Fund and with the investment
performance and expense levels (including the advisory fees). On
that basis, the Independent Directors determined that the
continuation of the Management Agreement was in the best
interests of the Fund and its stockholders.
29
THE
ASIA TIGERS FUND, INC.
Annual Chief Executive Officer and
Chief
Financial Officer Certifications
The Funds Chief Executive Officer has submitted to the New
York Stock Exchange the required annual certification, and the
Fund has included the certifications of its Chief Executive
Officer and Chief Financial Officer required by Section 302 and
Section 906 of the Sarbanes-Oxley Act in the Funds
Form N-CSR
filed with the Securities and Exchange Commission for the period
of this report.
30
THE
ASIA TIGERS FUND, INC.
Information about Directors and
Officers
(unaudited)
The business and affairs of The Asia Tigers Fund, Inc. (the
Fund) are managed under the direction of the Board
of Directors. Information pertaining to the Directors and
executive officers of the Fund is set forth below.
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Number of
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Portfolios
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in Fund
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Complex
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Term of
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Overseen by
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Other
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Office and
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Principal
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Director
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Trusteeships/
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Position(s)
Held
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Length of
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Occupation(s)
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(including
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Directorships
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Name, Address and
Age
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with
Fund1
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Time
Served1
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During Past
5 Years
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the
Fund)
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Held by
Director
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DISINTERESTED
DIRECTORS
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Lawrence K. Becker
8039 Harbor View Terrace Brooklyn, NY 11209
Birth Year: 1955
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Director and
Member of the Audit and Nominating Committees, Class III
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Since 2003
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Private Investor, Real Estate Investment Management (July
2003-Present); Vice President
Controller/Treasurer, National Financial Partners (2000-2003);
Managing Director Controller/Treasurer, Oppenheimer
Capital PIMCO (1981-2000)
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2
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Member of Board of Trustees or Board of Managers of four
registered investment companies advised by Advantage Advisers
L.L.C. or its affiliates (Advantage)
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Leslie H. Gelb
The Council on Foreign Relations
58 East 68th Street
New York, NY 10021
Birth Year: 1937
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Director and Member of the Audit and Nominating Committees,
Class I
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Since 1994
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President Emeritus, The Council on Foreign Relations
(2003-Present); President, The Council on Foreign Relations
(1993-2003); Columnist
(1991-1993),
Deputy Editorial Page Editor (1985-1990) and Editor, Op-Ed Page
(1988-1990),
The New York Times
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2
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Britannica.com; Director of 22 registered investment companies
advised by Legg Mason Partners Fund Advisor, LLC
(LMPFA) and its affiliates
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Luis F. Rubio
Jaime Balmes No. 11,
D-2 Los
Morales Polanco Mexico, D.F. 11510
Birth Year: 1955
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Director and Member of the Audit and Nominating Committees,
Class I
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Since 1999
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President, Centro de Investigacion para el Desarrollo, A.C.
(Center of Research for Development) (2002-Present); Director
General, Centro de Investigacion para el Desarrollo, A.C.
(Center of Research for Development) (1984-2002); frequent
contributor of op-ed pieces to The Los Angeles Times and
The Wall Street Journal
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2
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Member of Board of Trustees or Board of Managers of four
registered investment companies advised by Advantage; Director
of certain other private investment funds
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Jeswald W. Salacuse
The Fletcher School of Law & Diplomacy at Tufts
University
Medford, MA 02155
Birth Year: 1938
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Director, Member of Audit Committee and Chairman of Nominating
Committee,
Class II
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Since 1993
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Henry J. Braker Professor of Commercial Law, The Fletcher School
of Law & Diplomacy (1986-Present); Dean, The Fletcher
School of Law & Diplomacy, Tufts University (1986-1994)
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2
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Director of 22 registered investment companies advised by LMPFA
and its affiliates
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31
THE
ASIA TIGERS FUND, INC.
Information about Directors and
Officers (continued)
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Number of
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Portfolios
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in Fund
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Complex
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Term of
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Overseen by
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Other
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Office and
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Principal
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Director
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Trusteeships/
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Position(s)
Held
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Length of
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Occupation(s)
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(including
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Directorships
|
Name, Address and
Age
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with
Fund1
|
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Time
Served1
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During Past
5 Years
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the
Fund)
|
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Held by
Director
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INTERESTED DIRECTORS
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Prakash A. Melwani
The Blackstone Group L.P.
345 Park Avenue
New York, NY 10154
Birth Year: 1958
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Director and President,
Class III
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Since 2005
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Senior Managing Director, Private Equity Group,
The Blackstone Group L.P. (May 2003-Present); Founder and
Chief Investment Officer, Vestar Capital Partners
(1998-2003)
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2
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Aspen Insurance Holdings Limited and Kosmos Energy Holdings
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EXECUTIVE OFFICERS WHO ARE NOT
DIRECTORS
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Robert L. Friedman
The Blackstone Group L.P.
345 Park Avenue
New York, NY 10154
Birth Year: 1943
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Chief Legal Officer and Vice President
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Since 2005
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Chief Administrative Officer and Chief Legal Officer,
The Blackstone Group L.P.
(2003-Present);
Senior Managing Director, The Blackstone Group L.P.
(1999-Present)
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N/A
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N/A
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Joshua B. Rovine
The Blackstone Group L.P.
345 Park Avenue
New York, NY 10154
Birth Year: 1965
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Secretary
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Since 2005
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Managing Director, Finance and Administration Group, The
Blackstone Group L.P. (2003-Present); Partner, Sidley Austin
Brown & Wood LLP (1994-2003)
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N/A
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N/A
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Joseph M. Malangoni
Blackstone Asia
Advisors L.L.C.
53 State Street
Boston, MA 02109
Birth Year: 1976
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Treasurer and Vice President
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Since 2007
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Chief Financial Officer, Blackstone Asia Advisors L.L.C.
(2007-Present); Controller and Chief Compliance Officer,
Steadfast Financial LLC
(2002-2007);
Senior Associate, PricewaterhouseCoopers LLP (1998-2002).
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N/A
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N/A
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32
THE
ASIA TIGERS FUND, INC.
Information about Directors and
Officers (continued)
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Number of
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Portfolios
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in Fund
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Complex
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Term of
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Overseen by
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Other
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Office and
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Principal
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Director
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Trusteeships/
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Position(s)
Held
|
|
Length of
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Occupation(s)
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(including
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Directorships
|
Name, Address and
Age
|
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with
Fund1
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Time
Served1
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During Past
5 Years
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the
Fund)
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Held by
Director
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Barbara F. Pires
Blackstone Asia
Advisors L.L.C.
345 Park Avenue
New York, NY 10154
Birth Year: 1952
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Chief Compliance Officer and Vice President
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Since 2005
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Chief Compliance Officer and Principal, Blackstone Asia Advisors
L.L.C. (2006-Present)
Consultant (2005-2006);
Chief Compliance Officer,
The Asia Tigers Fund, Inc. and The India Fund, Inc.
(2005-Present);
Senior Vice President, Oppenheimer Asset Management, Inc.
(1996-2005)
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N/A
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N/A
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Punita Kumar-Sinha
Blackstone Asia
Advisors L.L.C.
345 Park Avenue
New York, NY 10154
Birth Year: 1962
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Portfolio Manager and Chief Investment Officer
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Since 2005
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Senior Managing Director,
The Blackstone Group L.P. (2006-Present); Managing Director and
Senior Portfolio Manager, Advantage Advisors, Inc., an
affiliate of Oppenheimer & Co., Inc. (1997-2005); Portfolio
Manager, The Asia Tigers Fund, Inc.
(1999-Present)
and The India Fund, Inc.
(1997-Present)
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N/A
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N/A
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1 |
|
The Funds Board of Directors
is divided into three classes: Class I, Class II, and
Class III. The terms of office of the Class I,
Class II, and Class III Directors expire at the Annual
Meeting of Stockholders in the year 2008, year 2009 and year
2010, respectively, or thereafter in each case when their
respective successors are duly elected and qualified. The
Funds executive officers are chosen each year at the first
meeting of the Funds Board of Directors following the
Annual Meeting of Stockholders, to hold office until the meeting
of the Board following the next Annual Meeting of Stockholders
and until their successors are duly elected and qualified.
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33
THE
ASIA TIGERS FUND, INC.
Dividends and Distributions
(unaudited)
DIVIDEND
REINVESTMENT AND CASH PURCHASE PLAN
The Fund intends to distribute annually to shareholders
substantially all of its net investment income, and to
distribute any net realized capital gains at least annually. Net
investment income for this purpose is income other than net
realized long-and short-term capital gains net of expenses.
Pursuant to the Dividend Reinvestment and Cash Purchase Plan
(the Plan), shareholders whose shares of Common
Stock are registered in their own names will be deemed to have
elected to have all distributions automatically reinvested by
the Plan Agent in the Fund shares pursuant to the Plan, unless
such shareholders elect to receive distributions in cash.
Shareholders who elect to receive distributions in cash will
receive all distributions in cash paid by check in dollars
mailed directly to the shareholder by PNC Bank, National
Association, as dividend paying agent. In the case of
shareholders such as banks, brokers or nominees that hold shares
for others who are beneficial owners, the Plan Agent will
administer the Plan on the basis of the number of shares
certified from time to time by the shareholders as representing
the total amount registered in such shareholders names and
held for the account of beneficial owners that have not elected
to receive distributions in cash. Investors that own shares
registered in the name of a bank, broker or other nominee should
consult with such nominee as to participation in the Plan
through such nominee, and may be required to have their shares
registered in their own names in order to participate in the
Plan.
The Plan Agent serves 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 Funds Common Stock or in cash, nonparticipants in
the Plan will receive cash and participants in the Plan will
receive Common Stock, to be issued by the Fund or purchased by
the Plan Agent in the open market, as provided below. 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; provided, however,
that if the net asset value is less than 95% of the market price
on the valuation date, then such shares will be issued at 95% of
the market price. The valuation date will be the dividend or
distribution payment date or, if that date is not a New York
Stock Exchange trading day, the next preceding trading day. If
net asset value exceeds the market price of Fund shares at such
time, or if the Fund should declare an income dividend or
capital gains distribution payable only in cash, the Plan Agent
will, as agent for the participants, buy Fund shares in the open
market, on the New York Stock Exchange or elsewhere, for the
participants accounts on, or shortly after, the payment
date. If, before the Plan Agent has completed its purchases, the
market price exceeds the net asset value of a Fund share, the
average per share purchase price paid by the Plan Agent may
exceed the net asset value of the Funds shares, resulting
in the acquisition of fewer shares than if the distribution had
been paid in shares issued by the Fund on the dividend payment
date. Because of the foregoing difficulty with respect to
open-market purchases, the Plan provides that if the Plan Agent
is unable to invest the full dividend amount in open-market
purchases during the purchase period or if the market discount
shifts to a market premium during the purchase period, the Plan
Agent will cease making open-market purchases and
34
THE
ASIA TIGERS FUND, INC.
DIVIDEND
REINVESTMENT AND CASH PURCHASE PLAN (continued)
will receive the uninvested portion of the dividend amount in
newly issued shares at the close of business on the last
purchase date.
Participants have the option of making additional cash payments
to the Plan Agent, annually, in any amount from $100 to $3,000,
for investment in the Funds Common Stock. The Plan Agent
will use all such funds received from participants to purchase
Fund shares in the open market on or about February 15.
Any voluntary cash payment received more than 30 days prior
to this date will be returned by the Plan Agent, and interest
will not be paid on any uninvested cash payment. To avoid
unnecessary cash accumulations, and also to allow ample time for
receipt and processing by the Plan Agent, it is suggested that
participants send in voluntary cash payments to be received by
the Plan Agent approximately ten days before an applicable
purchase date specified above. A participant may withdraw a
voluntary cash payment by written notice, if the notice is
received by the Plan Agent not less than 48 hours before
such payment is to be invested.
The Plan Agent maintains all shareholder accounts in the Plan
and furnishes written confirmations of all transactions in an
account, including information needed by shareholders for
personal and tax records. Shares in the account of each Plan
participant will be held by the Plan Agent in the name of the
participant, and each shareholders proxy will include
those shares purchased pursuant to the Plan.
There is no charge to participants for reinvesting dividends or
capital gains distributions or voluntary cash payments. The Plan
Agents fees for the reinvestment of dividends and capital
gains distributions and voluntary cash payments will be paid by
the Fund. There will be no brokerage charges with respect to
shares issued directly by the Fund as a result of dividends or
capital gains distributions payable either in stock or in cash.
However, each participant will pay a pro rata share of brokerage
commissions incurred with respect to the Plan Agents open
market purchases in connection with the reinvestment of
dividends and capital gains distributions and voluntary cash
payments made by the participant. Brokerage charges for
purchasing small amounts of stock for 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 receipt of dividends and distributions under the Plan will
not relieve participants of any income tax that may be payable
on such dividends or distributions.
35
THE
ASIA TIGERS FUND, INC.
DIVIDEND
REINVESTMENT AND CASH PURCHASE PLAN (concluded)
Experience under the Plan may indicate that changes in the Plan
are desirable. Accordingly, the Fund and the Plan Agent reserve
the right to terminate the Plan as applied to any voluntary cash
payments made and any dividend or distribution paid subsequent
to notice of the termination sent to members of the Plan at
least 30 days before the record date for such dividend or
distribution. The Plan also may be amended by the Fund or the
Plan Agent, but (except when necessary or appropriate to comply
with applicable law, rules or policies of a regulatory
authority) only by at least 30 days written notice to
participants in the Plan. All correspondence concerning the Plan
should be directed to the Plan Agent at P.O. Box 43027,
Westborough, Massachusetts, 01581.
36
THE
ASIA TIGERS FUND, INC.
PRIVACY
POLICY OF
BLACKSTONE
ASIA ADVISORS L.L.C.
YOUR PRIVACY IS
PROTECTED
An important part of our commitment to you is our respect for
your right to privacy. Protecting all the information we are
either required to gather or which accumulates in the course of
doing business with you is a cornerstone of our relationship
with you. While the range of products and services we offer
continues to expand, and the technology we use continues to
change, our commitment to maintaining standards and procedures
with respect to security remains constant.
COLLECTION OF
INFORMATION
The primary reason that we collect and maintain information is
to more effectively administer our customer relationship with
you. It allows us to identify, improve and develop products and
services that we believe could be of benefit. It also permits us
to provide efficient, accurate and responsive service, to help
protect you from unauthorized use of your information and to
comply with regulatory and other legal requirements. These
include those related to institutional risk control and the
resolution of disputes or inquiries.
Various sources are used to collect information about you,
including (i) information you provide to us at the time you
establish a relationship, (ii) information provided in
applications, forms or instruction letters completed by you,
(iii) information about your transactions with us or our
affiliated companies,
and/or
(iv) information we receive through an outside source, such
as a bank or credit bureau. In order to maintain the integrity
of client information, we have procedures in place to update
such information, as well as to delete it when appropriate. We
encourage you to communicate such changes whenever necessary.
DISCLOSURE OF
INFORMATION
We do not disclose any nonpublic, personal information (such as
your name, address or tax identification number) about our
clients or former clients to anyone, except as permitted or
required by law. We maintain physical, electronic and procedural
safeguards to protect such information, and limit access to such
information to those employees who require it in order to
provide products or services to you.
The law permits us to share client information with companies
that are affiliated with us which provide financial, credit,
insurance, trust, legal, accounting and administrative services
to us or our clients. This allows us to enhance our relationship
with you by providing a broader range of products to better meet
your needs and to protect the assets you may hold with us by
preserving the safety and soundness of our firm.
37
THE
ASIA TIGERS FUND, INC.
PRIVACY POLICY
OF
BLACKSTONE
ASIA ADVISORS L.L.C.
Finally, we are also permitted to disclose nonpublic, personal
information to unaffiliated outside parties who assist us with
processing, marketing or servicing a financial product,
transaction or service requested by you, administering benefits
or claims relating to such a transaction, product or service,
and/or
providing confirmations, statements, valuations or other records
or information produced on our behalf.
It may be necessary, under anti-money laundering or other laws,
to disclose information about you in order to accept your
subscription. Information about you may also be released if you
so direct, or if we or an affiliate are compelled to do so by
law, or in connection with any government or self-regulatory
organization request or investigation.
We are committed to upholding this Privacy Policy. We will
notify you on an annual basis of our policies and practices in
this regard and at any time that there is a material change that
would require your consent.
December 2005
38
THE
ASIA TIGERS FUND, INC.
Investment
Manager:
Blackstone Asia Advisors L.L.C.,
an affiliate of The Blackstone Group L.P.
Administrator:
Blackstone Asia Advisors L.L.C.
Sub-Administrator:
PFPC Inc.
Transfer
Agent:
PFPC Inc.
Custodian:
State Street Corporation
The Fund has adopted the Investment Managers proxy voting
policies and procedures to govern the voting of proxies
relating to its voting securities. You may obtain a copy of
these proxy voting procedures, without charge, by calling
1-866-800-8933
or by visiting the Securities and Exchange Commissions
website at www.sec.gov.
Information regarding how the Fund voted proxies relating to
portfolio securities during the
12-month
period ended June 30, 2007 is available without charge,
upon request, by calling 1-866-800-8933 or by visiting the
Securities and Exchange Commissions website at www.sec.gov.
The Fund files its complete schedule of portfolio holdings with
the Securities and Exchange Commission for the first and third
quarters of its fiscal year on
Form N-Q.
You may obtain a copy of these filings by visiting the
Securities and Exchange Commissions website at www.sec.gov
or its Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be
obtained by calling
1-800-SEC-0330.
This report is sent to stockholders of the Fund for their
information. It is not a prospectus, circular or representation
intended for use in the purchase or sale of shares of the Fund
or of any securities mentioned in this report.
Blackstone Asia
Advisors L.L.C.
The Asia Tigers Fund, Inc.
Annual Report
October 31, 2007
The Asia Tigers Fund, Inc.
Item 2. Code of Ethics.
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(a) |
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The registrant, as of the end of the period covered by this report, has adopted a code
of ethics that applies to the registrants 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. |
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(c) |
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There have been no amendments, during the period covered by this report, to a provision
of the code of ethics that applies to the registrants 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, relates to any element of the code of ethics description. |
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(d) |
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The registrant has not granted any waivers, including an implicit waiver, from a
provision of the code of ethics that applies to the registrants 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 items instructions. |
Item 3. Audit Committee Financial Expert.
The registrants board of directors has determined that the registrant has at least one audit
committee financial expert serving on its audit committee, Mr. Lawrence Becker, and that Mr. Becker
is independent. Mr. Becker was elected as non-interested Director of the audit committee at a
meeting of the board of directors held on October 23, 2003.
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 registrants 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 $79,000 for
2007 and $75,790 for 2006. |
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 |
|
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registrants financial statements and are not reported under paragraph (a) of this Item are
$0 for 2007 and $0 for 2006. |
Tax Fees
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(c) |
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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 $33,400 for 2007 and $55,400 for 2006. |
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 for 2007 and $0 for 2006. |
|
(e)(1) |
|
Disclose the audit committees pre-approval policies and procedures described in paragraph
(c)(7) of Rule 2-01 of Regulation S-X. |
THE ASIA TIGERS FUND, INC.
THE INDIA FUND, INC.
AUDIT COMMITTEE PRE-APPROVAL POLICIES
As amended on November 29, 2005
The Audit Committee (the Committee) of each of The Asia Tigers Fund, Inc. and The India
Fund, Inc. (each, a Fund) must pre-approve any independent accounting firms engagement to render
audit and/or permissible non-audit (including audit-related) services, as required by law. In
evaluating a proposed engagement by the Funds independent accountants, the Committee will evaluate
the effect that the engagement might reasonably be expected to have on the accountants
independence. That evaluation will be based on several factors, including:
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a review of the nature of the professional services expected to be provided; |
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the fees to be charged in connection with the services expected to be provided; |
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a review of the safeguards put into place by the accounting firm to safeguard
independence; and |
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periodic meetings with the accounting firm. |
I. Policy for Audit and Non-Audit Services to be Provided to the Fund
On an annual basis, the Funds Committee will review and pre-approve the scope of the audits
of the Fund and proposed audit fees and permitted non-audit services that may be performed by the
Funds independent accountants. At least annually, the Committee will receive a report of all
audit and non-audit services that were rendered in the previous calendar year pursuant to this
policy. The term of any pre-approval is twelve months from the date of pre-approval, unless the
Committee specifically provides otherwise. The Committee may modify any pre-approval at its
discretion. Fee levels for all services pre-approved under this policy will be established
annually by the Committee.
In addition to the Committees pre-approval of services pursuant to this policy, the
engagement of the independent accounting firm for any permitted non-audit service provided to the
Fund will also require the separate written pre-approval of the President of the Fund, who will
independently confirm that the accounting firms engagement will not adversely affect the firms
independence. All non-audit services performed by the independent accounting firm will be
disclosed, as required, in filings with the Securities and Exchange Commission (the SEC).
A. Audit Services
The categories of audit services and related fees to be reviewed and pre-approved annually by
the Committee are:
2
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annual Fund financial statement audits (including applicable internal control
reports); |
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seed audits (related to new product filings, as required); |
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semiannual financial statement reviews (if applicable); and |
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SEC and regulatory filings and consents issued in connection with any of the
above; |
B. Audit-Related Services
The following categories of audit-related services are considered to be consistent with the
role of the Funds independent accountants, and services falling under one of these categories will
be pre-approved by the Committee on an annual basis if the Committee deems the services to be
consistent with the accounting firms independence:
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accounting consultations; |
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Fund merger support services; |
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agreed-upon procedure reports; |
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attestation reports; |
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SEC and regulatory filings and consents issued in connection with filings
previously authorized by the Board of Directors; |
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comfort letters; and |
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internal control reports (other than issued pursuant to annual Fund financial
statement audits). |
Individual audit-related services that fall within one of these categories and are not
presented to the Committee as part of the annual pre-approval process may be pre-approved, if
deemed consistent with the accounting firms independence, by the Committee Chairman (or any other
Committee member who is a disinterested director under the Investment Company Act of 1940, as
amended (the Investment Company Act), to whom this responsibility has been delegated) so long as
the estimated fee for the services does not exceed $75,000. Any such pre-approval shall be
reported to the full Committee at its next regularly scheduled meeting.
C. Tax Services
The following categories of tax and tax compliance services are considered to be consistent
with the role of the Funds independent accountants, and services falling under one of these
categories will be pre-approved by the Committee on an annual basis if the Committee deems the
services to be consistent with the accounting firms independence:
3
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federal, state and local income tax compliance as well as sales and use tax
compliance; |
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timely regulated investment company qualification reviews; |
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tax distribution analysis and planning; |
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tax authority examination services; |
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tax appeals support services; |
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accounting methods studies; |
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Fund merger support services; and |
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other tax consulting services and related projects. |
Individual tax services that fall within one of these categories and are not presented to the
Committee as part of the annual pre-approval process may be pre-approved, if deemed consistent with
the accounting firms independence, by the Committee Chairman (or any other Committee member who is
a disinterested director under the Investment Company Act to whom this responsibility has been
delegated) so long as the estimated fee for the services does not exceed $75,000. Any such
pre-approval shall be reported to the full Committee at its next regularly scheduled meeting.
C. Proscribed Services
The Funds independent accountants will not render services in the following categories of
non-audit services:
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bookkeeping or other services related to the accounting records or financial
statements of the Fund; |
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financial information systems design and implementation; |
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appraisal or valuation services, fairness opinions or contribution-in-kind
reports; |
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actuarial services; |
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internal audit outsourcing services; |
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management functions or human resources; |
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broker/dealer, investment adviser or investment banking services; |
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legal and other expert services unrelated to the audit; and |
4
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any other service that the Public Company Accounting Oversight Board determines,
by regulation, is impermissible. |
II. Pre-Approval of Non-Audit Services Provided to Other Entities within the Investment
Company Complex
The Committee will pre-approve annually any permitted non-audit services to be provided to
Blackstone Asia Advisors L.L.C. or any other investment manager to the Fund (but not including any
sub-adviser whose role is primarily portfolio management and is sub-contracted by the investment
manager) (the Investment Manager) and any entity controlling, controlled by or under common
control with the Investment Manager that provides ongoing services to the Fund (including
affiliated sub-advisers to the Funds), provided that, in each case, the engagement relates directly
to the operations and financial reporting of the Fund (such entities, including the Investment
Manager, shall be referred to herein as the Service Affiliates). Individual projects that are
not presented to the Committee as part of the annual pre-approval process may be pre-approved, if
deemed consistent with the accounting firms independence, by the Committee Chairman (or any other
Committee member who is a disinterested director under the Investment Company Act to whom this
responsibility has been delegated) so long as the estimated fee for the services does not exceed
$100,000. Any such pre-approval shall be reported to the full Committee at its next regularly
scheduled meeting.
The Committee will also receive an annual report from the Funds independent accounting firm
showing the aggregate fees for all services provided to the Service Affiliates.
III. De Minimus Exception to Requirement of Pre-Approval of Non-Audit Services
With respect to the provision of permitted non-audit services to a Fund or Service Affiliates,
the pre-approval requirement is waived if each of the following requirements is met:
|
(1) |
|
The aggregate amount of all non-approved permitted non-audit services provided
constitutes no more than (i) with respect to such services provided to the Fund, five
percent (5%) of the total amount of revenues paid by the Fund to its independent
accountant during the fiscal year in which such services are provided and (ii) with
respect to such services provided to Service Affiliates, five percent (5%) of the total
amount of revenues paid to the Funds independent accountant by the Fund and the
Service Affiliates during the fiscal year in which such services are provided; |
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(2) |
|
Such services were not recognized by the Fund at the time of the engagement for
such services to be non-audit services; and |
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(3) |
|
Such services are promptly brought to the attention of the Committee and
approved prior to the completion of the audit by the Committee or by the Committee
Chairman (or any other Committee member who is a disinterested director under the
Investment Company Act to whom this responsibility has been delegated). Any approval
by the Committee Chairman or other delegate shall be reported to the full Committee at
its next regularly scheduled meeting. |
|
(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: |
|
(f) |
|
The percentage of hours expended on the principal accountants engagement to audit the
registrants financial statements for the most recent fiscal year that were attributed to
work performed by persons other than the principal accountants full-time, permanent
employees was less than fifty percent. |
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(g) |
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The aggregate non-audit fees billed by the registrants accountant for services
rendered to the registrant, and rendered to Blackstone Asia Advisors L.L.C., the
registrants investment adviser (not including any sub-adviser those 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 2007. |
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In addition, the aggregate non-audit fees billed by the registrants accountant for services
rendered to Advantage Advisers, Inc., the registrants investment adviser prior to December
4, 2005 (not including any sub-adviser whose role was primarily portfolio management and was
subcontracted with or overseen by another investment adviser), and any entity controlling,
controlled by, or under common control with the former adviser that provided ongoing
services to the registrant was $0 for the period November 1, 2005 to December 4, 2005. |
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(h) |
|
The registrants audit committee of the board of directors has considered whether the
provision of non-audit services that were rendered to the registrants 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 accountants
independence. |
Item 5. Audit Committee of Listed registrants.
The registrant has a separately-designated audit committee consisting of all the independent
directors of the registrant. The members of the audit committee are Lawrence K. Becker, Leslie H.
Gelb, Luis F. Rubio and Jeswald W. Salacuse.
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.
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Item 7. |
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Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment
Companies. |
The Proxy Voting Policies are attached herewith.
APPENDIX F
PROXY VOTING PROCEDURES:
BLACKSTONE ASIA ADVISORS, LLC
1
TABLE OF CONTENTS
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Page |
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INTRODUCTION |
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4 |
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CHAPTER 1 BOARD OF DIRECTORS |
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5 |
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Voting on Director Nominees In Uncontested Elections |
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5 |
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Chairman and CEO are the same person |
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5 |
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Independence of Directors |
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6 |
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Stock Ownership Requirements |
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7 |
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Charitable Contributions |
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8 |
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Director and Officer Indemnification And Liability Protection |
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9 |
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Size of the Board |
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11 |
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Voting on Director Nominees in Contested Elections |
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12 |
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Term Of Office |
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13 |
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Compensation Disclosure |
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14 |
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CHAPTER 2 AUDITORS |
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15 |
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Ratifying Auditors |
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16 |
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CHAPTER 3 TENDER OFFER DEFENSES |
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17 |
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Poison Pills |
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18 |
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Greenmail |
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19 |
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Supermajority Vote |
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20 |
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CHAPTER 4 MERGERS AND CORPORATE RESTRUCTURING |
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21 |
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Changing Corporate Name |
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22 |
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Reincorporation |
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23 |
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CHAPTER 5 PROXY CONTEST DEFENSES |
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24 |
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Board Structure: Staggered vs. Annual Elections |
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25 |
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i
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Page |
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Cumulative Voting |
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26 |
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Shareholders Ability to Call Special Meeting |
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27 |
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Shareholders Ability to Alter Size of the Board |
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28 |
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CHAPTER 6 MISCELLANEOUS CORPORATE GOVERNANCE PROVISIONS |
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29 |
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Confidential Voting |
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30 |
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Shareholder Advisory Committees |
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31 |
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Foreign Corporate Matters |
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32 |
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Government Service List |
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33 |
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CHAPTER 7 SOCIAL AND ENVIRONMENTAL ISSUES |
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34 |
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Energy and Environmental Issues (CERES Principles) |
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35 |
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Northern Ireland (MacBride Principles) |
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36 |
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Maquiladora Standards and International Operations and Policies |
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37 |
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Equal Employment Opportunity And Discrimination |
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38 |
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Animal Rights |
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39 |
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CHAPTER 8 CAPITAL STRUCTURE |
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40 |
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Common Stock Authorization |
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41 |
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Blank Check Preferred Stock |
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42 |
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Preemptive Rights |
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43 |
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Stock Distributions: Splits and Dividends |
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44 |
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Stock Splits |
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44 |
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Reverse Stock Splits |
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45 |
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Adjustments to Par Value of Common Stock |
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46 |
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Debt Restructurings |
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47 |
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CHAPTER 9 EXECUTIVE AND DIRECTOR COMPENSATION |
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48 |
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Director Compensation |
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49 |
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ii
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Page |
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Shareholder Proposal to Limit Executive and Director Pay |
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50 |
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Employee Stock Ownership Plans (ESOPs) |
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51 |
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Options Expensing |
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52 |
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Golden Parachutes |
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53 |
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Proposal to Ban Golden Parachutes |
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54 |
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Outside Directors Retirement Compensation |
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55 |
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CHAPTER 10 STATE OF INCORPORATION |
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56 |
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Control Share Acquisition Statutes |
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57 |
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Opt-Out of State Takeover Statutes |
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58 |
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Corporate Restructuring, Spin Offs Asset Sales, Liquidations |
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59 |
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CHAPTER 11 CONFLICTS OF INTEREST |
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60 |
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Conflicts |
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61 |
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CHAPTER 12 GOVERNANCE COMMITTEE AND PROXY MANAGERS |
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63 |
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Governance Committee |
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64 |
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Proxy Managers |
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65 |
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CHAPTER 13 SPECIAL ISSUES WITH VOTING FOREIGN PROXIES |
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66 |
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Special Issues with Voting Foreign Proxies |
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67 |
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CHAPTER 14 RECORD KEEPING |
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68 |
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Record Keeping |
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69 |
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iii
INTRODUCTION
Rule 206(4)-6 (the Rule) adopted under the Investment Advisers Act of 1940, as amended (the
Advisers Act) requires all registered investment advisers that exercise voting discretion over
securities held in client portfolios to adopt proxy voting policies and procedures.
Blackstone Asia Advisors, LLC (the Adviser) is a registered investment adviser under the Advisers
Act and is therefore required to adopt proxy voting policies and procedures pursuant to the Rule.
When the Adviser has investment discretion over a clients investment portfolio, then the Adviser
votes proxies for the Account pursuant to the policies and procedures set forth herein.
4
CHAPTER 1
BOARD OF DIRECTORS
Voting on Director Nominees
In Uncontested Elections
These proposals seek shareholder votes for persons who have been nominated by a corporations board
of directors to stand for election to serve as members of that board. No candidates are opposing
these board nominees.
In each analysis of an uncontested election of directors you should review:
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(1) |
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Company performance |
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(2) |
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Composition of the board and key board committees |
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(3) |
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Attendance at board meetings |
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(4) |
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Corporate governance provisions and takeover activity |
We may also consider:
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(1) |
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Board decisions concerning executive compensation |
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(2) |
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Number of other board seats held by the nominee |
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(3) |
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Interlocking directorships |
Vote Recommendation
It
is our policy to vote IN FAVOR of the candidates proposed by the board.
We will look carefully at each candidates background contained in the proxy statement. In the
absence of unusual circumstances suggesting a nominee is clearly not qualified to serve as a member
of the board, we will vote with management.
Chairman and CEO are the same person
Shareholders may propose that different persons hold the positions of the chairman and the
CEO.
We would evaluate these proposals on a case by case basis depending on the size of the
company and performance of management.
5
Independence of Directors
Shareholders may request that the board be comprised of a majority of independent directors
and that audit, compensation and nominating committees of the Board consists exclusively of
independent directors. We believe that independent directors are important to corporate
governance.
Vote Recommendation
It
is our policy to vote FOR proposals requesting that a majority
of the Board be independent and that the audit, compensation and
nominating committees of the board include only independent directors.
6
Stock Ownership Requirements
Shareholders may propose that directors be required to own a minimum amount of company stock
or that directors should be paid in company stock, not cash. This proposal is based on the view
that directors will align themselves with the interest of shareholders if they are shareholders
themselves. We believe that directors are required to exercise their fiduciary duty to the company
and its shareholders whether or not they own shares in the company and should be allowed to invest
in company stock based on their own personal considerations.
Vote Recommendation
Vote
AGAINST proposals that require director stock ownership.
7
Charitable Contributions
Charitable contributions by companies are generally useful for assisting worthwhile causes and
for creating goodwill between the company and its community. Moreover, there may be certain
long-term financial benefits to companies from certain charitable contributions generated from, for
example, movies spent helping educational efforts in the firms primary employment areas.
Shareholders should not decide what the most worthwhile charities are.
Vote Recommendation
(Shareholders Proposals)
Vote AGAINST proposals regarding charitable contribution.
Shareholders have differing and equally sincere views as to which charities the company should
contribute to, and the amount it should contribute. In the absence of bad faith, self-dealing, or
gross negligence, management should determine which contributions are in the best interest of the
company.
8
Director and Officer Indemnification And Liability Protection
These proposals typically provide for protection (or additional protection) which is to be afforded
to the directors of a corporation in the form of indemnification by the corporation, insurance
coverage or limitations upon their liability in connection with their responsibilities as
directors.
When a corporation indemnifies its directors and officers, it means the corporation promises to
reimburse them for certain legal expenses, damages, and judgments incurred as a result of lawsuits
relating to their corporate actions. The corporation becomes the insurer for its officers and
directors.
Vote Recommendation
Vote
AGAINST proposals that eliminate entirely director and
officers liability for monetary damages for violating the duty of care.
Vote
AGAINST indemnification proposals that would expand coverage
beyond just legal expenses to acts, such as negligence, that are more
serious violations of fiduciary obligations than mere carelessness.
Vote
FOR only those proposals providing such expanded coverage in
cases when a directors or officers legal defense was
unsuccessful if: a) the director was found to have acted in good
faith, and b) only if the directors legal expenses would be covered.
The following factors should be considered:
(A) The present environment in which directors operate provides substantial risk
of claims or suits against them in their individual capacities arising out of the
discharge of their duties.
9
(B) Attracting and retaining the most qualified directors enhances shareholder
value.
10
Size of the Board
Typically there are three reasons for changing the size of the board. The first reason may
be to permit inclusion into the board of additional individuals who, by virtue of their
ability and experience, would benefit the corporation. The second reason may be to reduce
the size of the board due to expiration of terms, resignation of sitting directors or,
thirdly, to accommodate the corporations changing needs.
Vote Recommendation
Vote
FOR the boards recommendation to increase or decrease the size of the board.
The following factors should be considered:
|
1. |
|
These proposals may aim at reducing or increasing the influence of certain
groups of individuals. |
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2. |
|
This is an issue with which the board of directors is uniquely qualified to
deal, since they have the most experience in sitting on a board and are up-to-date on
the specific needs of the corporation. |
11
Voting on Director Nominees in Contested Elections
Votes in contested elections of directors are evaluated on a CASE-BY-CASE basis.
The following factors are considered:
|
1. |
|
managements track record |
|
|
2. |
|
background to the proxy contest |
|
|
3. |
|
qualifications of director nominees |
12
Term Of Office
This is a shareholders proposal to limit the tenure of outside directors. This requirement may
not be an appropriate one. It is an artificial imposition on the board, and may have the result of
removing knowledgeable directors from the board.
Vote Recommendation
Vote
AGAINST shareholder proposals to limit the tenure of outside directors.
The following factors should be considered:
|
1. |
|
An experienced director should not be disqualified because he or she has
served a certain number of years. |
|
|
2. |
|
The nominating committee is in the best position to judge the directors
terms in office due to their understanding of a corporations needs and a directors
abilities and experience. |
|
|
3. |
|
If shareholders are not satisfied with the job a director is doing, they can
vote him/her off the board when the term is up. |
13
Compensation Disclosure
These proposals seek shareholder approval of a request that the board of directors disclose the
amount of compensation paid to officers and employees, in addition to the disclosure of such
information in the proxy statement as required by the SEC regulations.
Vote Recommendation
(shareholders policy)
Vote AGAINST these proposals that require disclosure, unless
we have reason to believe that mandated disclosures are insufficient
to give an accurate and meaningful account of senior management compensation.
The following factors should be considered:
|
1. |
|
Federal securities laws require disclosure in corporate proxy statements of
the compensation paid to corporate directors and officers. |
|
|
2. |
|
Employees other than executive officers and directors are typically not in
policy-making roles where they have the ability to determine, in a significant way,
the amount of their own compensation. |
|
|
3. |
|
The disclosure of compensation of lower-level officers and employees
infringes upon their privacy and might create morale problems. |
14
Ratifying Auditors
Shareholders must make certain that auditors are responsibly examining the financial statements of
a company, that their reports adequately express any legitimate financial concerns, and that the
auditor is independent of the company it is serving.
Vote Recommendation
|
|
|
|
|
Vote FOR proposal to ratify auditors. |
The following factors should be considered:
|
1. |
|
Although lawsuits are sometimes filed against accounting firms, including
those nationally recognized, these firms typically complete their assignments in a
lawful and professional manner. |
|
|
2. |
|
Sometimes it may be appropriate for a corporation to change accounting firms,
but the board of directors is in the best position to judge the advantages of any such
change and any disagreements with former auditors must be fully disclosed to
shareholders. |
|
|
3. |
|
If there is a reason to believe the independent auditor has rendered an
opinion which is neither accurate nor indicative of the companys financial position,
then in this case vote AGAINST ratification. |
16
CHAPTER 3
TENDER OFFER DEFENSES
17
Poison Pills
Poison pills are corporate-sponsored financial devices that, when triggered by potential acquirers,
do one or more of the following: a) dilute the acquirers equity in the target company, b) dilute
the acquirers voting interests in the target company, or c) dilute the acquirers equity holdings
in the post-merger company. Generally, poison pills accomplish these tasks by issuing rights or
warrants to shareholders that are essentially worthless unless triggered by a hostile acquisition
attempt.
A poison pill should contain a redemption clause that would allow the board to redeem it even after
a potential acquirer has surpassed the ownership threshold. Poison pills may be adopted by the
board without shareholder approval. But shareholders must have the opportunity to ratify or reject
them at least every two years.
Vote Recommendation
|
|
|
|
|
Vote FOR shareholder proposals
asking that a company submit its
poison pill for shareholder
ratification. |
|
|
|
|
|
Vote on a CASE-BY-CASE basis
regarding shareholder proposals to
redeem a companys poison pill. |
|
|
|
|
|
Vote on a CASE-BY-CASE basis
regarding management proposals to
ratify a poison pill. |
18
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, the practice discriminates against all other
shareholders.
Greenmail payments usually expose the company to negative press and may result in lawsuits by
shareholders. When a companys name is associated with such a practice, company customers may
think twice about future purchases made at the expense of the shareholders.
Vote Recommendation
|
|
|
|
|
Vote FOR proposals to adopt anti
Greenmail or bylaw amendments or
otherwise restrict a companys ability
to make Greenmail payments |
|
|
|
|
|
Vote on a CASE-BY-CASE basis
regarding anti-Greenmail proposals
when they are bundled with other
charter or bylaw amendments. |
The following factors should be considered:
|
1. |
|
While studies by the SEC and others show that Greenmail devalues the
companys stock price, an argument can be made that a payment can enable the company
to pursue plans that may provide long-term gains to the shareholders. |
19
Supermajority Vote
Supermajority provisions violate the principle that a simple majority of voting shares should be
all that is necessary to effect change regarding a company and its corporate governance provisions.
These proposals seek shareholder approval to exceed the normal level of shareholder participation
and approval from a simple majority of the outstanding shares to a much higher percentage.
Vote Recommendations
|
|
|
|
|
Vote AGAINST management
proposals to require a Supermajority
shareholder vote to approve mergers
and other significant business
combinations. |
|
|
|
|
|
Vote FOR shareholder proposals to
lower Supermajority vote
requirements for mergers and other
significant business combinations. |
The following factors should be considered:
|
1. |
|
Supermajority requirements ensure broad agreement on issues that may have a
significant impact on the future of the company. |
|
|
2. |
|
Supermajority vote may make action all but impossible. |
|
|
3. |
|
Supermajority requirements are counter to the principle of majority rule. |
20
CHAPTER 4
MERGERS AND CORPORATE RESTRUCTURING
21
Changing Corporate Name
This proposal seeks shareholder approval to change the corporations name. It is probably better
to vote for the proposed name change before management goes back to the drawing board and spends
another small fortune attempting again to change the name.
Vote Recommendation
|
|
|
|
|
Vote FOR changing the corporate name. |
The following factors should be considered:
|
1. |
|
A name of a corporation symbolizes its substance. |
|
|
2. |
|
There are many reasons a corporation may have for changing its name,
including an intention to change the direction of the business or to have a
contemporary corporate image. |
|
|
3. |
|
The board of directors is well-positioned to determine the best name for the
corporation because, among other reasons, it usually seeks professional advice on such
matters. |
22
Reincorporation
These proposals seek shareholder approval to change the state in which a company is incorporated.
Sometimes this is done to accommodate the companys most active operations or headquarters. More
often, however, the companies want to reincorporate in a state with more stringent anti-takeover
provisions. Delawares state laws, for instance, including liability and anti-takeover provisions,
are more favorable to corporations.
Vote Recommendation
|
|
|
|
|
Vote on a CASE-BY-CASE basis,
carefully reviewing the new states
laws and any significant changes the
company makes in its charter and by-laws. |
The following factors should be considered:
|
1. |
|
The board is in the best position to determine the companys need to
incorporate. |
|
|
2. |
|
Reincorporation may have considerable implications for shareholders,
affecting a companys takeover defenses, its corporate structure or governance
features. |
|
|
3. |
|
Reincorporation in a state with stronger anti-takeover laws may harm
shareholder value. |
23
CHAPTER 5
PROXY CONTEST DEFENSES
24
Board Structure: Staggered vs. Annual Elections
A company that has a classified, or staggered, board is one in which directors are typically
divided into three classes, with each class serving three-year terms; each classs reelection
occurs in different years. In contrast, all directors of an annually elected board serve one year
and the entire board stands for election each year.
Classifying the board makes it more difficult to change control of a company through a proxy
contest involving election of directors. Because only a minority of the directors are elected each
year, it will be more difficult to win control of the board in a single election.
Vote Recommendations
|
|
|
|
|
Vote AGAINST proposals to classify the board.
Vote FOR proposals to repeal classified boards
and to elect all directors annually. |
The following factors should be considered:
|
1. |
|
The annual election of directors provides an extra check on managements
performance. A director who is doing a good job should not fear an annual review of
his/her directorship. |
25
Cumulative Voting
Most companies provide that shareholders are entitled to cast one vote for each share owned, the
so-called one share, one vote standard. This proposal seeks to allow each shareholder to cast
votes in the election of directors proportionate to the number of directors times the number of
shares owned by each shareholder for one nominee.
Vote Recommendation
|
|
|
|
|
Vote AGAINST proposals that permit cumulative
voting. |
The following factors should be considered:
|
1. |
|
Cumulative voting would allow a minority owner to create an impact
disproportionate to his/her holdings. |
|
|
2. |
|
Cumulative voting can be used to elect a director who would represent special
interests and not those of the corporation and its shareholders. |
|
|
3. |
|
Cumulative voting can allow a minority to have representation. |
|
|
4. |
|
Cumulative Voting can lead to a conflict within the board which could
interfere with its ability to serve the shareholders best interests. |
26
Shareholders Ability to Call Special Meeting
Most state corporation statutes allow shareholders to call a special meeting when they want to take
action on certain matters that arise between regularly scheduled annual meetings.
Vote Recommendation
|
|
|
|
|
Vote AGAINST proposals to restrict or prohibit
shareholder ability to call special meetings. |
|
|
|
|
|
Vote FOR proposals that remove restrictions on
the right of shareholders to act independently of
management. |
27
Shareholders Ability to Alter Size of the Board
Proposals which would allow management to increase or decrease the size of the board at its own
discretion are often used by companies as a takeover defense.
Shareholders should support management proposals to fix the size of the board at a specific number
of directors, preventing management from increasing the size of the board without shareholder
approval. By increasing the size of the board, management can make it more difficult for
dissidents to gain control of the board.
Vote Recommendations
|
|
|
|
|
Vote FOR proposal which seek to fix the size of
the board. |
|
|
|
|
|
Vote AGAINST proposals which give management the
ability to alter the size of the board without
shareholder approval. |
28
CHAPTER 6
MISCELLANEOUS CORPORATE GOVERNANCE PROVISIONS
29
Confidential Voting
Confidential voting, also known as voting by secret ballot, is one of the key structural issues in
the proxy system. All proxies, ballots, and voting tabulations that identify individual
shareholders are kept confidential.
Vote Recommendations
|
|
|
|
|
Vote FOR shareholder proposals requesting that
corporations adopt confidential voting. |
|
|
|
|
|
Vote FOR management proposals to adopt
confidential voting. |
The following factors should be considered:
|
1. |
|
Some shareholders elect to have the board not know how they voted on certain
issues. |
|
|
2. |
|
Should the board be aware of how a shareholder voted, the board could attempt
to influence the shareholder to change his/her vote, giving itself an advantage over
those that do not have access to this information. |
|
|
3. |
|
Confidential voting is an important element of corporate democracy which
should be available to the shareholder. |
30
Shareholder Advisory Committees
These proposals request that the corporation establish a shareholder advisory committee to review
the boards performance. In some instances, it would have a budget funded by the corporation and
would be composed of salaried committee members with authority to hire outside experts and to
include reports in the annual proxy statement.
Vote Recommendation
|
|
|
|
|
Vote AGAINST proposals to establish a shareholder
advisory committee. |
The following factors should be considered:
|
1. |
|
Directors already have fiduciary responsibility to represent shareholders and
are accountable to them by law, thus rendering shareholder advisory committees
unnecessary. |
|
|
2. |
|
Adding another layer to the current corporate governance system would be
expensive and unproductive. |
31
Foreign Corporate Matters
These proposals are usually submitted by companies incorporated outside of the United States
seeking shareholder approval for actions which are considered ordinary business and do not require
shareholder approval in the United States (i.e., declaration of dividends, approval of financial
statements, etc.).
Vote Recommendation
|
|
|
|
|
Vote FOR proposals that concern foreign companies
incorporated outside of the United States. |
The following factors should be considered:
|
1. |
|
The laws and regulations of various countries differ widely as to those
issues on which shareholder approval is needed, usually requiring consent for actions
which are considered routine in the United States. |
|
|
2. |
|
The board of directors is well positioned to determine whether or not these
types of actions are in the best interest of the corporations shareholders. |
32
Government Service List
This proposal requests that the board of directors prepare a list of employees or consultants to
the company who have been employed by the government within a specified period of time and the
substance of their involvement.
Solicitation of customers and negotiation of contractual or other business relationships is
traditionally the responsibility of management. Compilation of such a list does not seem to serve
a useful purpose, primarily because existing laws and regulations serve as a checklist on conflicts
of interest.
Vote Recommendation
|
|
|
|
|
Vote AGAINST these proposals which request a list
of employees having been employed by the
government. |
The following factors should be considered:
|
1. |
|
For certain companies, employing individuals familiar with the regulatory
agencies and procedures is essential and, therefore, is in the best interests of the
shareholders. |
|
|
2. |
|
Existing laws and regulations require enough disclosure and serve as a check
on conflicts of interest. |
|
|
3. |
|
Additional disclosure would be an unreasonable invasion of such individuals
privacy. |
33
CHAPTER 7
SOCIAL AND ENVIRONMENTAL ISSUES
34
Energy and Environmental Issues
(CERES Principles)
CERES proposals ask management to sign or report on process toward compliance with ten principles
committing the company to environmental stewardship. Principle 10 directs companies to fill out
the CERES report. This report requires companies to disclose information about environmental
policies, toxic emissions, hazardous waste management, workplace safety, energy use, and
environmental audits.
Vote Recommendation
Vote
AGAINST proposals requesting that companies sign the CERES Principles.
The following factors should be considered:
|
1. |
|
We do not believe a concrete business case is made for this proposal. In our
opinion, the company will be best served by continuing to carry on its business as it
did before the proposal was made. |
35
Northern Ireland
(MacBride Principles)
It is well documented that Northern Irelands Catholic community faces much higher unemployment
figures then the Protestant community. Most proposals ask companies to endorse or report on
progress with respect to the MacBride Principles.
In evaluating a proposal to adopt the MacBride Principles, you must decide if the principles will
cause the company to divest, and worsen unemployment problems.
Vote Recommendation
REFRAIN
from voting on proposals that request companies to adopt the MacBride Principles.
The following factors should be considered:
|
1. |
|
We believe that human and political rights are of the utmost importance for
their own sake as well as for the enhancement of economic potential of a nation. |
|
|
2. |
|
We do not believe a concrete business case has been made for this proposal.
We will refrain from making social or political statements by voting for these
proposals. We will only vote on proposals that maximize the value of the issuers
status without regard to (i.e., we will not pass judgement upon) the non-economic
considerations. |
36
Maquiladora Standards and
International Operations and Policies
Proposals in this area generally request companies to report on or to adopt certain principles
regarding their operations in foreign countries.
The Maquiladora Standards are a set of guidelines that outline how U.S. companies should conduct
operations in Maquiladora facilities just across the U.S.-Mexican border. These standards cover
such topics as community development, environmental policies, health and safety policies, and fair
employment practices.
Vote Recommendation
ABSTAIN
from providing a Vote Recommendation on proposals regarding the
Maquiladora Standards and international operating policies.
The following factors should be considered:
|
1. |
|
We believe that human rights are of the utmost importance for their own sake
as well as for the enhancement of economic potential of a nation. |
|
|
2. |
|
We do not believe that a concrete business case has been made for these
proposals. We will refrain from making social statements by voting for these
proposals. We will not only vote on proposals that maximize the value of the issuers
securities without regard to (i.e., we will not pass judgement upon) the non-economic
considerations. |
37
Equal Employment Opportunity
And Discrimination
In regards to equal employment and discrimination, companies without comprehensive EEO programs
will find it hard to recruit qualified employees and find them at a long-term competitive
disadvantage. Companies who are not carefully watching their human resource practices could also
face lawsuits.
Vote Recommendation
REFRAIN
from voting on any proposals regarding equal employment
opportunities and discrimination.
The following factors should be considered:
|
1. |
|
We feel that the hiring and promotion of employees should be free from
prohibited discriminatory practices. We also feel that many of these issues are
already subject to significant state and federal regulations. |
38
Animal Rights
A Corporation is requested to issue a report on its progress towards reducing reliance on animal
tests for consumer product safety.
Vote Recommendation
REFRAIN
from making Vote Recommendations on proposals regarding animal rights.
The following factors should be considered:
|
1. |
|
Needless cruelty to animals should never be tolerated. However, the testing
of products on animals may be very important to the health and safety of consumers. |
|
|
2. |
|
We also feel that this issue is already subject to significant state and
federal regulation. |
39
CHAPTER 8
CAPITAL STRUCTURE
40
Common Stock Authorization
The ability to increase the number of authorized shares could accommodate the sale of equity, stock
splits, dividends, compensation-based plans, etc. The board can usually be trusted to use
additional shares for capital-raising and other transactions that are in the corporations best
interests.
However, excessive escalation in the number of authorized shares may allow the board to radically
change the corporations direction without shareholder approval. Be careful to view that the
increased number of shares will not enable the company to activate a poison pill.
Vote Recommendation
Vote
Case-By-Case on proposals to increase the number of shares of common stock authorized for issue.
Vote
AGAINST proposed common share authorization that increase
existing authorization by more then 100 percent unless a clear
need for the excess shares is presented by the company.
The following factors should be considered:
|
1. |
|
Is this company going to make frequent business acquisitions over a period of
time? |
|
|
2. |
|
Is the company expanding its operations? |
|
|
3. |
|
Within the company, are there any debt structuring or prepackaged bankruptcy
plans?
|
41
Blank Check Preferred Stock
The terms of blank check preferred stock give the board of directors the power to issue shares of
preferred stock at their discretion, with voting, conversion, distribution and other rights to be
determined by the board at the time of the issue.
Blank check preferred stock can provide corporations with the flexibility to meet changing
financial conditions. However, once the blank check preferred stock has been authorized, the
shareholders have no further power over how or when it will be allocated.
Vote Recommendation
Vote
AGAINST proposals authorizing the creation of new classes of
preferred stock with unspecified voting, conversion, dividend distribution, and other rights.
The following factors should be considered:
|
1. |
|
Blank check preferred stock can be used as the vehicle for a poison pill
defense against hostile suitors, or it may be placed in friendly hands to help block a
takeover bid. |
42
Preemptive Rights
These proposals request that the corporation provide existing shareholders with an opportunity to
acquire additional shares in proportion to their existing holdings whenever new shares are issued.
In companies with a large shareholder base and ease in which shareholders could preserve their
relative interest through purchases of shares on the open market, the cost of implementing
preemptive rights does not seem justifiable in relation to the benefits.
Vote Recommendation
Vote
AGAINST proposals seeking preemptive rights.
The following factors should be considered:
|
1. |
|
The existence of preemptive rights can considerably slow down the process of
issuing new shares due to the logistics involved in protecting such rights. |
|
|
2. |
|
Preemptive rights are not necessary for the shareholder in todays
corporations, whose stock is held by a wide range of owners and is, in most cases,
highly liquid. |
43
Stock Distributions: Splits and Dividends
Stock Splits
The corporation requests authorization for a stock split.
Vote Recommendation
Vote FOR management proposal to authorize stock
splits unless the split will result in an
increase of authorized but unissued shares of
more than 100% after giving effect to the shares
needed for the split.
44
Reverse Stock Splits
Vote Recommendation
Vote FOR management proposal to authorize reverse
stock split unless the reverse stock split
results in an increase of authorized but unissued shares
of more than 100% after giving effect to
the shares needed for the reverse split.
45
Adjustments to Par Value of Common Stock
The purpose of par value stock is to establish the maximum responsibility of stockholder in the
event that a corporation becomes insolvent. It represents the maximum amount that a shareholder
must pay the corporation if the stock is to be fully paid when issued.
The corporation requests permission to reduce the par value of its stock. In most cases, adjusting
par value is a routine financing decision and should be supported.
Vote Recommendation
Vote FOR management proposals to reduce the par
value of common stock.
The following factors should be considered:
|
1. |
|
State laws sometimes prohibit issuance of new stock priced below that of the
outstanding shares. |
|
|
2. |
|
A corporation may be unable to raise capital if the par value is overstated. |
46
Debt Restructurings
The corporation may propose to increase common and/or preferred shares and to issue shares as part
of a debt restructuring plan.
Vote Recommendation
It is our policy to vote CASE-BY-CASE on debt
restructuring.
The following factors should be considered:
|
1. |
|
Dilution How much will ownership interest of existing shareholders be
reduced and how extreme will dilution to future earnings be? |
|
|
2. |
|
Change in Control Will the transaction result in a change of control of the
company? |
|
|
3. |
|
Bankruptcy Is the threat of bankruptcy, which would result in severe losses
in shareholder value, the main factor driving the debt restructuring? |
47
CHAPTER 9
EXECUTIVE AND DIRECTOR COMPENSATION
48
Director Compensation
Directors represent shareholders and are responsible for protecting shareholder interests.
Companies state in the proxy material that they pay directors well in order to attract the most
qualified candidates. All compensation packages for any executive, director or employee should
include a pay-for-performance component.
Vote Recommendation
Vote on a CASE-BY-CASE basis for director
compensation.
The following factors should be considered:
|
1. |
|
As directors take an increasingly active role in corporate decision-making
and governance, their compensation is becoming more performance-based. |
49
Shareholder Proposal to Limit Executive and Director Pay
Shareholder compensation proposals that set limits or reduce executive compensation should be
closely scrutinized. Many of these proposals may be flawed in their emphasis on an absolute dollar
figure in compensation.
Vote Recommendation
Vote on a CASE-BY-CASE basis.
The following factors should be considered:
|
1. |
|
Executive compensation is established by a committee that consists of
independent directors who have fiduciary responsibility to act in the best interest of
the shareholders and who are best placed to make compensation decisions. |
50
Employee Stock Ownership Plans (ESOPs)
These proposals ask for stockholder endorsement of compensation plans for key employees which
involve the issuance of company shares by granting of stock options, SARs, restricted stock, etc.
These plans help attract and retain best-qualified corporate personnel and tie their interests more
closely to those of the shareholders.
Vote Recommendation
Vote FOR proposals to adopt share-based
compensation plans when the following items are
involved:
|
1. |
|
The exercise price for stock options is less than 85% of fair market value on
the date of the grant. |
|
|
2. |
|
It is an omnibus stock plan which gives directors broad discretion in
deciding how much and what kind of stock to award, when and to whom. |
|
|
3. |
|
The shares for issue exceed 8% of the companys outstanding shares; or, in
the case of the evergreen plans, the amount of increase exceeds 1.5% of the total
number of shares outstanding. |
Vote AGAINST proposals adopting share based
compensation plans when the following items are
involved:
|
1. |
|
Re-load options (new options issued for any exercised). |
|
|
2. |
|
The plan would allow for management to pyramid their holdings by using stock
to purchase more stock, without having to lay out cash. Vote YES if this is for
directors. |
51
Options Expensing
Shareholder proposal to expense options.
Vote Recommendation
It is our policy to vote FOR proposals to expense
options.
52
Golden Parachutes
Golden parachutes are designed to protect the employees of a corporation in the event of a change
in control. The change in control agreement will specify the exact payments to be made under the
golden parachutes. The calculation for payout is usually based on some multiple of an employees
annual or monthly compensation. Golden parachutes are generally given to employees whose annual
compensation exceeds $112,000.
Recent experience has shown a willingness of many managements to treat severance agreements as
equal to equity investments and to reward themselves as if substantial amounts of equity were at
risk.
Vote Recommendation
Vote
FOR proposals which seek to limit additional compensation
payments.
Vote FOR shareholder proposals to have golden
parachutes submitted for shareholder
ratification.
The following factors should be considered:
|
1. |
|
The stability of management may be affected by an attempted acquisition of
the corporation. |
|
|
2. |
|
There is a tendency on the part of an entrenched management to overstate the
value of their continuing control of and influence on the day-to-day functions of a
corporation. |
53
Proposal to Ban Golden Parachutes
Based on the foregoing information:
Vote Recommendation
We are FOR this proposal, which essentially bans
golden parachutes, because we feel managements
compensation should be solely based on real-time
contributions to the corporation while they are
serving it. Deferred current compensation is
viewed differently than future, contingent
compensation for current services.
54
Outside Directors Retirement Compensation
We believe that directors should only be compensated while serving the company.
Vote Recommendations
Vote AGAINST proposals establishing outside
directors retirement compensation.
Vote FOR proposals that revoke outside directors
retirement compensation.
55
CHAPTER 10
STATE OF INCORPORATION
56
Control Share Acquisition Statutes
These proposals suggest that the board of directors solicit shareholder approval before committing
acquisitions or divestiture of a business exceeding stipulated threshold levels. Such statutes
function by denying shares their voting rights when they contribute to ownership in excess of
certain thresholds.
Vote Recommendation
Vote AGAINST proposals which request the board to
seek shareholder approval before committing to an
acquisition.
The following factors should be considered:
|
1. |
|
These proposals deprive the board of directors of its ability to act quickly
in propitious circumstances. |
|
|
2. |
|
Conforming to these requirements can be expensive. |
|
|
3. |
|
The board of directors is uniquely qualified and positioned to be able to
make these decisions without prior shareholder approval. |
|
|
4. |
|
The threshold levels usually imposed by these proposals are much more
stringent than required by law. |
57
Opt-Out of State Takeover Statutes
These proposals seek shareholder approval to opt-out (not be governed by) certain provisions of the
anti-takeover laws of various states. Delaware law, for instance, dictates that a bidder has to
acquire at least 85% of a companys stock before exercising control, unless he or she has board
approval. This means that a company may thwart an otherwise successful bidder by securing 15% of
its stock in friendly hands.
Vote Recommendation
Vote on a CASE-BY-CASE basis for these proposals.
The following factors should be considered:
|
1. |
|
It is the directors responsibility to act on behalf of the shareholders in
opposing coercive takeover attempts. |
|
|
2. |
|
Creating deterrents to corporate takeovers may allow for entrenchment of
inefficient management. |
|
|
3. |
|
These statutes strengthen the boards ability to deal with potential buyers
on fair and reasonable terms. |
|
|
4. |
|
Shareholders should have the final say on whether the company should be
merged or acquired. |
58
Corporate Restructuring, Spin-Offs Asset Sales, Liquidations
Votes on corporate restructuring, spin-offs, asset sales and liquidations are evaluated on a case
by case basis.
59
CHAPTER 11
CONFLICTS OF INTEREST
60
Conflicts
From time to time, proxy voting proposals may raise conflicts between the interests of the Advisers
clients and the interests of the Adviser, its affiliates and its employees. Conflicts of interest
may arise when:
|
1. |
|
Proxy votes regarding non-routine matters are solicited by an issuer that may
have a separate account relationship with an affiliate of the Adviser. |
|
|
2. |
|
A proponent of a proxy proposal has a business relationship with the Adviser
or one of its affiliates or the Adviser or one of its affiliates has a business
relationship with participants in proxy contests, corporate directors or director
candidates. |
|
|
3. |
|
An employee of the Adviser has a personal interest in the outcome of a
particular matter before shareholders. |
If the Adviser receives a proxy that to the knowledge of the Proxy Manager raises a conflict of
interest, the Proxy Manager shall advise the Governance Committee which shall determine whether the
conflict is material to any specific proposal involved in the proxy. The Governance Committee
will determine whether the proposal is material as follows:
|
1. |
|
Routine proxy proposals are presumed not to involve a material conflict of
interest. |
|
|
2. |
|
Non-routine proxy proposals. Proxy proposals that are non-routine will be
presumed to involve a material conflict of interest unless the Governance Committee
determines that the conflict is unrelated to the proposal. Non-routine proposals
would include a merger, compensation matters for management and contested elections of
directors. |
61
Conflicts contd
|
3. |
|
The Governance Committee may determine on a case-by-case basis that
particular non-routine proposals do not involve a material conflict of interest
because the proposal is not directly related to the Advisers conflict vis-à-vis the
issue. The Governance Committee will record the basis for any such determination.
With respect to any proposal that the Governance Committee determines presents a
material conflict of interest, the Adviser may vote regarding that proposal in any of
the following ways: |
|
a) |
|
Obtain instructions from the client on how to vote. |
|
|
b) |
|
Use existing proxy guidelines if the policy with respect to
the proposal is specifically addressed and does not involve a case-by-case
analysis. |
|
|
c) |
|
Vote the proposal that involves the conflict according to the
recommendations of an independent third party such as Institutional Share
Services Inc. or Investor Responsibility Research Center. |
62
CHAPTER 12
GOVERNANCE COMMITTEE
AND
PROXY MANAGERS
63
Governance Committee
The Governance Committee is responsible for the maintenance of the Proxy Voting Policies and
Procedures and will determine whether any conflict between the interest of clients and the Advisers
in voting proxies is material. The Governance Committee includes the following: (1) Joseph Malangoni,
(2) Barbara Pires, and (3) Punita Kumar-Sinha.
64
Proxy Managers
The Proxy Manager for the Adviser is Punita Kumar-Sinha, Portfolio Manager. The Proxy Manager will
determine how votes will be cast on proposals that are evaluated on a case-by case basis.
65
CHAPTER 13
SPECIAL ISSUES WITH VOTING
FOREIGN PROXIES
66
Special Issues with Voting Foreign Proxies
Voting proxies with respect to shares of foreign stock may involve significantly greater effort and
corresponding cost than voting proxies in the U.S domestic market. Issues in voting foreign
proxies include the following:
|
1. |
|
Each country has its own rules and practices regarding shareholder
notification, voting restrictions, registration conditions and share blocking. |
|
|
2. |
|
In some foreign countries shares may be blocked by custodian or depository
or bearer shares deposited with specific financial institutions for a certain number
of days before or after the shareholders meeting. When blocked, shares typically may
not be traded until the day after the blocking period. Blackstone may refrain from
voting shares of foreign stocks subject to blocking restrictions where in the
Advisers judgment the benefit from voting the shares is outweighed by the interest in
maintaining client liquidity in the shares. This decision is made on a case-by-case
basis based on a relevant factors including the length of the blocking period, the
significance of the holding and whether the stock is considered by a long-term
holding. |
|
|
3. |
|
Time frames between shareholder notification, distribution of proxy
materials, book closures and the actual meeting date may be too short to allow timely
action. |
|
|
4. |
|
In certain countries, applicable regulations require that votes must be made
in person at the shareholder meeting. The Adviser will weigh the costs and benefits
of voting on proxy proposals in countries that require in-person voting on a
case-by-case basis and make decisions on whether voting on a given proxy proposal is
prudent. Generally, the Adviser will not vote shares in countries that require in
person voting on routine matters such as uncontested elections of directors,
ratification of auditors. |
67
CHAPTER 14
RECORD KEEPING
68
Record Keeping
Blackstone will maintain the following records:
|
1. |
|
Copies of these policies |
|
|
2. |
|
A copy of each proxy statement that the Adviser receives regarding client
securities. The Adviser may satisfy this requirement by relying on a third party to
keep copies of proxy statements provided that the Adviser has an undertaking from the
third party to provide a copy of the proxy statement promptly upon request. |
|
|
3. |
|
A record of each vote cast on behalf of a client. A third party may keep these
voting records provided that the Adviser has an undertaking from the third party to
provide a copy of the record promptly upon request. |
|
|
4. |
|
A copy of any document created by the Adviser that was material to making a
decision on how to vote proxies or that memorializes the basis for that decision. |
|
|
5. |
|
A copy of each written client request for information on how an Adviser voted
proxies on behalf of the client and a copy of written response by the Adviser to any
client request for information on how the Adviser voted proxies on behalf of the
client. |
The above records shall be maintained for five years from the end of the fiscal year during which
the last entry was made on such record, the first two years in an appropriate office of the
Adviser.
69
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Portfolio Manager
The Fund is managed by Punita Kumar-Sinha, who has primary responsibility for the day-to-day
implementation of the Funds investment strategies. Ms. Kumar-Sinha has been the portfolio manager
for the Fund since 1999. Ms. Kumar- Sinha has been a Managing Director of Blackstone Asia Advisors
L.L.C. (the Investment Manager) since December 2005. Prior to joining the Investment Manager, Ms.
Kumar-Sinha was a Managing Director and Senior Portfolio Manager at Oppenheimer Asset Management
Inc. and CIBC World Markets, where she was also the portfolio manager for the Fund. Prior to
December 4, 2005, Advantage Advisers, a subsidiary of Oppenheimer Asset Management Inc., served as
the Funds Investment Manager.
Other Accounts Managed by Portfolio Manager
In addition to managing the Fund, Ms. Kumar-Sinha also is primarily responsible for the
day-to-day portfolio management of one registered investment company, The India Fund, Inc., and one
unregistered pooled investment vehicle. As of October 31, 2007, the total assets of The India
Fund, Inc. were approximately $2,916,977,316, and the total assets of the unregistered pooled
investment vehicle
were approximately $57,839,783. Ms. Kumar-Sinha manages no other registered
investment companies, pooled investment vehicles or accounts. None of the accounts managed by Ms.
Kumar-Sinha have fees based on performance.
Portfolio Manager Compensation
Ms. Kumar-Sinhas overall compensation is determined by Blackstones Management Committee.
Blackstones compensation structure is designed to pay competitive salaries to attract and retain
top quality investment professionals. Ms. Kumar-Sinhas compensation consists of two elementsbase
salary and bonus.
Base Salary
The base salary is generally a fixed amount. The base salary is reviewed annually and may be
adjusted based on a variety of factors, including competitive market factors and the skill,
experience and responsibilities of the individual. While investment performance is a factor in
determining the portfolio managers compensation, it is not necessarily a decisive factor.
Bonus
Ms. Kumar-Sinha is also eligible to receive an annual cash bonus. The level of this bonus is
based upon evaluations and determinations made by the portfolio managers supervisor. These reviews
and evaluations often take into account a variety of factors, including the effectiveness of the
portfolio managers investment strategies, the performance of the accounts for which she serves as
portfolio manager relative to any benchmark or benchmarks established for those accounts over the
course of the year (currently the IFC Investable Index, the Dollex, the Bombay
Stock Exchange 500 Index, the MSCI AC Asia Ex-Japan Index, the MSCI India Index and the MSCI
AC Far East Ex-Japan Index), the amount of the Investment Managers total assets under management,
the portfolio managers ability to work with colleagues and to supervise her investment staff and
her overall contribution to the Investment Manager in achieving its business objectives.
Potential Conflicts of Interest
Potential conflicts of interest may arise when a portfolio manager has day-to-day management
responsibilities with respect to one or more funds or accounts, as is the case for Ms. Kumar-Sinha.
Ms. Kumar-Sinhas simultaneous management of the Fund, another registered investment company and
one other pooled investment vehicle may present actual or apparent conflicts of interest with
respect to the allocation of Ms. Kumar-Sinhas time and attention as well as with respect to the
allocation of investment opportunities and aggregation of securities orders placed on behalf of
these accounts. These accounts have, to varying degrees, overlapping investment objectives; all may
invest in Indian securities, and both the Fund and the other pooled investment vehicle invest
primarily in Asian securities. Potential conflicts may arise, for example, when there is a limited
quantity of an investment that may be suitable for more than one of these accounts and the
investment must be allocated between them. It is also possible that, in light of different
objectives, benchmarks, industry and sector exposures and time horizons, the portfolio manager may
take differing positions in the accounts. In the future, Ms. Kumar-Sinha may manage other funds or
accounts that may also invest in the same or similar securities as the Fund, which may present
similar or additional conflicts of interest.
The Investment Manager believes that such potential conflicts are mitigated by the fact that
the Investment Manager has adopted policies that address potential conflicts of interest, including strict
adherence to investment objectives, policies and guidelines as well as best execution and
trade allocation policies that are designed to ensure (1) that portfolio management is seeking the
best price for portfolio securities under the circumstances, (2) fair and equitable allocation of
investment opportunities among accounts over time and (3) compliance with applicable regulatory
requirements. All accounts are treated in a non-preferential manner, such that allocations are not
based upon account performance, fee structure or preference of the portfolio manager. In some
cases, these procedures may affect the size of the position obtained or the price paid and may
preclude some investment opportunities.
Portfolio Manager Securities Ownership
As of October 31, 2007, Ms. Kumar-Sinha beneficially owned between $10,001 and $50,000 in the
common stock of the Fund.
|
|
|
Item 9. |
|
Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated
Purchasers. |
REGISTRANT PURCHASES OF EQUITY SECURITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(c) Total Number of Shares |
|
(d) Maximum Number (or |
|
|
(a) Total Number |
|
(b) Average |
|
(or Units) Purchased as Part |
|
Approximate Dollar Value) of Shares |
|
|
of Shares (or |
|
Price Paid per |
|
of Publicly Announced Plans |
|
(or Units) that May Yet Be Purchased |
Period |
|
Units) Purchased |
|
Share (or Unit) |
|
or Programs |
|
Under the Plans or Programs |
05/01/07 to 05/31/07 |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
06/01/07 to 06/30/07 |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
07/01/07 to 07/31/07 |
|
|
246,284 |
|
|
$ |
28.6847 |
|
|
|
246,284 |
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
08/01/07 to 08/31/07 |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
09/01/07 to 09/30/07 |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/01/07 to 10/31/07 |
|
None |
|
|
None |
|
|
None |
|
|
None |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
246,284 |
|
|
$ |
28.6847 |
|
|
|
246,284 |
|
|
None |
|
|
|
|
(1) |
|
These shares were repurchased in connection with the Funds regular, semi-annual
repurchase offer announced on June 22, 2007 that expired on July 13, 2007. In connection with this
repurchase offer, the Fund offered to repurchase up to 246,283.7882 shares of its common stock, an
amount equal to 5% of its outstanding shares of common stock, for cash at a price approximately
equal to the Funds net asset value as of July 20, 2007. |
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 registrants 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 registrants principal executive and principal financial officers, or persons
performing similar functions, have concluded that the registrants 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 registrants 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
registrants second fiscal quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the registrants 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 Asia Tigers Fund, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
By (Signature and Title)*
|
|
/s/ Prakash A. Melwani |
|
|
|
|
|
|
|
|
|
Prakash A. Melwani, President |
|
|
|
|
(principal executive officer) |
|
|
|
|
|
|
|
Date
|
|
January 3, 2008
|
|
|
|
|
|
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/ Prakash A. Melwani |
|
|
|
|
|
|
|
|
|
Prakash A. Melwani, President |
|
|
|
|
(principal executive officer) |
|
|
|
|
|
|
|
Date |
|
January 3, 2008 |
|
|
|
|
|
|
|
|
|
|
By (Signature and Title)*
|
|
/s/ Joseph Malangoni |
|
|
|
|
|
|
|
|
|
Joseph Malangoni, Treasurer |
|
|
|
|
(principal financial officer) |
|
|
|
|
|
|
|
Date
|
|
January 3, 2008
|
|
|
|
|
|
|
|
|
* |
|
Print the name and title of each signing officer under his or her signature. |