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
|
811-05082
|
|
The Malaysia Fund, Inc.
|
(Exact name of registrant as
specified in charter)
|
|
522 Fifth Avenue New York, NY
|
|
10036
|
(Address of principal executive
offices)
|
|
(Zip code)
|
|
Randy Takian
522 Fifth Avenue New York, New York 10036
|
(Name and address of agent for
service)
|
|
Registrants telephone number, including
area code:
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1-800-221-6726
|
|
|
Date of fiscal year end:
|
12/31
|
|
|
Date of reporting period:
|
12/31/08
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|
|
|
|
|
|
|
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|
|
Form N-CSR is
to be used by management investment companies to file reports with the
Commission not later than 10 days after the transmission to stockholders of any
report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant
is required to disclose the information specified by Form N-CSR, and the
Commission will make this information public. A registrant is not required to
respond to the collection of information contained in Form N-CSR unless the
Form displays a currently valid Office of Management and Budget (OMB) control
number. Please direct comments concerning the accuracy of the information
collection burden estimate and any suggestions for reducing the burden to Secretary,
Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC
20549-0609. The OMB has reviewed this collection of information under the
clearance requirements of 44 U.S.C. Section 3507.
ITEM
1. REPORTS TO STOCKHOLDERS.
The
Funds annual report transmitted to shareholders pursuant to Rule 30e-1 under
the Investment Company Act of 1940 is as follows:
|
2008 Annual Report
|
|
|
|
December 31, 2008
|
The Malaysia
Fund, Inc.
(MAY)
Morgan Stanley
Investment Management Inc.
Investment Adviser
|
The
Malaysia Fund, Inc.
|
|
|
|
Overview (unaudited)
|
Letter to Stockholders
Performance
For the year ended December 31,
2008, the Malaysia Fund, Inc. (the Fund) had total returns of -41.88%,
based on net asset value, and -44.89% based on market value per share
(including reinvestment of distributions), compared to its benchmark, the Kuala
Lumpur Stock Exchange Composite (KLSE) Index (the Index), expressed in U.S.
dollars which returned -42.01%. On December 31, 2008, the closing price of
the Funds shares on the New York Stock Exchange was $5.05, representing a
15.3% discount to the Funds net asset value per share. Past performance is no
guarantee of future results.
Factors
Affecting Performance
·
In 2008, the Kuala Lumpur Stock Exchange
Composite Index fell 42% in U.S. dollar terms. All Asia Pacific markets fell
sharply in 2008, and Malaysia was no exception. All sectors within the Index
posted double-digit negative returns, with the more defensive sectors such as
utilities, telecommunication services, financials and consumer staples
materially outperforming the more cyclical sectors including energy, materials
and information technology, which experienced downward pressure. Relative to
the Asia Pacific ex-Japan region, Malaysia was one of the better-performing
markets in the region.
·
Nevertheless, it was a volatile period for the
Malaysian market. Early in the year, as a commodity exporter, Malaysias
economy and market benefited from rising prices for oil and soft commodities,
and inflation was the mildest in the region, due to highly subsidized food and
energy prices. However, as the months progressed a growing political and
economic storm hurt investor sentiment.
·
On the political front, rising tensions
between the different ethnic groups in the second half of 2007 culminated with
the ruling coalition government losing their two-thirds majority during the
elections held in March 2008. Threats of party swapping by several members
of parliament led to further concerns of a change in government and a loss of
control by Barisan Nasional, the ruling coalition since the country established
independence. Political jostling within the dominant ruling party, UMNO, also
led to further confusion. This dented business and consumer sentiment
significantly on concerns that the government might lose its focus on economic
management, especially with the ongoing global financial crisis. Concerns over
political uncertainty abated in the fourth quarter of 2008 as current Prime
Minister Abdullah agreed to step down in March 2009, bringing a stop to
the political infighting within the leading coalition party UMNO.
·
On the economic front, Malaysias GDP grew
steadily through 2008 at 5.3% (based on consensus estimates).
Management
Strategies
·
The Fund outperformed the Index over the
12-month period, with asset allocation contributing to performance but stock
selection detracting from performance.
·
From a top-down perspective, the Funds
underweight to the energy sector contributed positively to relative
performance, together with the Funds higher cash holding. This was partially
offset by the negative impact of a relative underweight to the
telecommunication services sector in the earlier part of the year.
·
Relative performance benefited from positive
selection within the telecom services, utilities and materials sectors, but was
it was insufficient to offset weakness from our selection within the consumer
staples, industrials, financials and consumer discretionary sectors.
|
The
Malaysia Fund, Inc.
|
|
|
|
Overview
(unaudited)
|
Letter to Stockholders (contd)
·
The Fund seeks long-term capital appreciation
and integrates top-down sector allocation and bottom-up stock selection with a
growth bias. The team utilizes a rigorous fundamental research approach that
considers dynamics, valuation, and sentiment and focuses on companies with
strong management and solid earnings.
Sincerely,
Randy Takian
|
|
President and Principal
Executive Officer
|
January 2009
|
|
The
Malaysia Fund, Inc.
|
|
|
|
December 31, 2008
|
Portfolio of Investments
|
|
|
|
Value
|
|
|
Shares
|
|
(000)
|
COMMON
STOCKS (96.6%)
|
|
|
|
|
|
(Unless Otherwise Noted)
|
|
|
|
|
|
Automobiles
(2.1%)
|
|
|
|
|
|
Proton Holdings Bhd
|
|
1,243,900
|
|
$
|
653
|
|
TAN Chong Motor Holdings Bhd
|
|
1,670,700
|
|
|
561
|
|
|
|
|
|
|
1,214
|
|
Commercial
Banks (18.2%)
|
|
|
|
|
|
Bumiputra-Commerce Holdings Bhd
|
|
1,908,296
|
|
3,250
|
|
Malayan Banking Bhd
|
|
2,199,475
|
|
3,263
|
|
Public Bank Bhd
|
|
1,544,790
|
|
3,967
|
|
|
|
|
|
10,480
|
|
Construction
Materials (1.1%)
|
|
|
|
|
|
Lafarge Malayan Cement Bhd
|
|
548,100
|
|
628
|
|
Diversified
Telecommunication Services (3.5%)
|
|
|
|
|
|
TM International Bhd (a)
|
|
1,899,300
|
|
1,999
|
|
Electric
Utilities (6.1%)
|
|
|
|
|
|
Tenaga Nasional Bhd
|
|
1,941,650
|
|
3,529
|
|
Food
Products (16.7%)
|
|
|
|
|
|
IOI Corp. Bhd
|
|
3,642,050
|
|
3,777
|
|
Kuala Lumpur Kepong Bhd
|
|
1,225,500
|
|
3,172
|
|
Wilmar International Ltd.
|
|
1,340,300
|
|
2,624
|
|
|
|
|
|
9,573
|
|
Hotels,
Restaurants & Leisure (9.8%)
|
|
|
|
|
|
Genting Bhd
|
|
2,373,400
|
|
2,550
|
|
Resorts World Bhd
|
|
4,717,200
|
|
3,094
|
|
|
|
|
|
5,644
|
|
Independent
Power Producers & Energy Traders (2.1%)
|
|
|
|
|
|
Tanjong plc
|
|
314,000
|
|
1,209
|
|
Industrial
Conglomerates (8.1%)
|
|
|
|
|
|
Sime Darby Bhd
|
|
3,092,910
|
|
4,679
|
|
Marine
(5.5%)
|
|
|
|
|
|
Malaysia International Shipping Corp. Bhd
|
|
1,271,000
|
|
3,150
|
|
Multi-Utilities
(7.0%)
|
|
|
|
|
|
YTL Corp. Bhd
|
|
1,955,733
|
|
4,002
|
|
Real
Estate (8.5%)
|
|
|
|
|
|
IGB Corp. Bhd
|
|
3,024,000
|
|
1,213
|
|
Naim Cendera Holdings Bhd
|
|
469,400
|
|
196
|
|
SP Setia Bhd
|
|
3,350,248
|
|
3,019
|
|
YNH Property Bhd
|
|
1,382,806
|
|
453
|
|
|
|
|
|
4,881
|
|
Retail
(0.6%)
|
|
|
|
|
|
Parkson
Holdings Bhd
|
|
290,900
|
|
337
|
|
Wireless
Telecommunication Services (7.3%)
|
|
|
|
|
|
Digi.com
Bhd
|
|
670,200
|
|
4,228
|
|
TOTAL COMMON STOCKS
(Cost $46,904)
|
|
|
|
55,553
|
|
|
|
|
|
|
|
|
|
No. of
Warrants
|
|
|
|
WARRANTS (0.1%)
|
|
|
|
|
|
Real Estate (0.1%)
|
|
|
|
|
|
SP Setia Bhd, expires 1/21/13 (a)
|
|
558,425
|
|
$
|
45
|
|
Real Estate Management & Development (0.0%)
|
|
|
|
|
|
IJM Land Bhd, expires 9/11/13 (a)
|
|
244,960
|
|
14
|
|
TOTAL WARRANTS
(Cost $51)
|
|
|
|
59
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
SHORT-TERM INVESTMENT (17.8%)
|
|
|
|
|
|
Investment Company (17.8%)
|
|
|
|
|
|
Morgan Stanley Institutional
Liquidity Money Market Portfolio
Institutional Class
(Cost $10,199) (b)
|
|
10,199,137
|
|
10,199
|
|
TOTAL INVESTMENTS
(114.5%) (Cost $57,154) (c)
|
|
|
|
65,811
|
|
LIABILITIES IN EXCESS OF OTHER ASSETS
(-14.5%)
|
|
|
|
(8,353
|
)
|
NET ASSETS
(100%)
|
|
|
|
$
|
57,458
|
|
|
|
|
|
|
|
|
|
(a)
|
Non-income producing
security.
|
(b)
|
See Note G within the
Notes to Financial Statements regarding investment in Morgan Stanley
Institutional Liquidity Money Market Portfolio Institutional Class.
|
(c)
|
The approximate market
value and percentage of total investments, $55,612,000 and 84.5%, respectively,
represent the securities that have been fair valued under the fair valuation
policy for international investments as described in Note A within the Notes
to Financial Statements.
|
Portfolio
Composition
Classification
|
|
Percentage of
Total Investments
|
|
Commercial
Banks
|
|
15.9
|
%
|
Food
Products
|
|
14.5
|
|
Hotels,
Restaurants & Leisure
|
|
8.6
|
|
Real
Estate
|
|
7.5
|
|
Industrial
Conglomerates
|
|
7.1
|
|
Wireless
Telecommunication Services
|
|
6.4
|
|
Multi-Utilities
|
|
6.1
|
|
Electric
Utilities
|
|
5.4
|
|
Other*
|
|
13.0
|
|
Short-Term
Investment
|
|
|
15.5
|
|
Total
Investments
|
|
|
100.0
|
%
|
*
|
Industries
which do not appear in the above table, as well as those which represent less
than 5% of total investments, if applicable, are included in the category
labeled Other.
|
4
|
The
accompanying notes are an integral part of the financial statements.
|
|
|
The
Malaysia Fund, Inc.
|
|
|
|
Financial Statements
|
Statement of Assets and Liabilities
|
|
December 31, 2008
(000)
|
|
Assets:
|
|
|
|
Investments in Securities of Unaffiliated Issuers,
at Value (Cost $46,955)
|
|
$
|
55,612
|
|
Investment in Security of Affiliated Issuer, at
Value (Cost $10,199)
|
|
10,199
|
|
Total Investments in Securities, at Value (Cost
$57,154)
|
|
65,811
|
|
Cash
|
|
1
|
|
Foreign Currency, at Value (Cost $1,396)
|
|
1,405
|
|
Receivable for Investments Sold
|
|
84
|
|
Dividends Receivable
|
|
35
|
|
Receivable from Affiliate
|
|
|
@
|
Other Assets
|
|
2
|
|
Total Assets
|
|
67,338
|
|
Liabilities:
|
|
|
|
Payable For:
|
|
|
|
Dividends Declared
|
|
9,765
|
|
Investment Advisory Fees
|
|
53
|
|
Custodian Fees
|
|
20
|
|
Administration Fees
|
|
3
|
|
Directors Fees and Expenses
|
|
|
@
|
Other Liabilities
|
|
39
|
|
Total Liabilities
|
|
9,880
|
|
Net Assets
|
|
|
|
Applicable
to 9,642,249 Issued and Outstanding $0.01 Par Value Shares (20,000,000 Shares
Authorized)
|
|
$
|
57,458
|
|
Net Asset Value Per Share
|
|
$
|
5.96
|
|
Net Assets Consist of:
|
|
|
|
Common Stock
|
|
$
|
96
|
|
Paid-in Capital
|
|
55,593
|
|
Undistributed Net Investment Income
|
|
218
|
|
Accumulated Net Realized Loss
|
|
(7,115
|
)
|
Unrealized Appreciation (Depreciation) on Investments and Foreign
Currency Translations
|
|
8,666
|
|
Net Assets
|
|
$
|
57,458
|
|
@ Amount is less than $500.
|
The
accompanying notes are an integral part of the financial statements.
|
5
|
|
The
Malaysia Fund, Inc.
|
|
|
|
Financial
Statements
|
Statement of Operations
|
|
Year Ended
December 31, 2008
(000)
|
|
Investment Income:
|
|
|
|
Dividends from Securities of Unaffiliated
Issuers
|
|
$
|
6,763
|
|
Dividends from Security of Affiliated
Issuer
|
|
43
|
|
Total Investment Income
|
|
6,806
|
|
Expenses:
|
|
|
|
Investment Advisory Fees (Note B)
|
|
750
|
|
Professional Fees
|
|
79
|
|
Administration Fees (Note C)
|
|
75
|
|
Custodian Fees (Note D)
|
|
68
|
|
Stockholder Reporting Expenses
|
|
25
|
|
Stockholder Servicing Agent Fees
|
|
8
|
|
Directors Fees and Expenses
|
|
2
|
|
Other Expenses
|
|
40
|
|
Total Expenses
|
|
1,047
|
|
Waiver of Administration Fees (Note C)
|
|
(28
|
)
|
Rebate from Morgan Stanley Affiliated Cash Sweep
(Note G)
|
|
(2
|
)
|
Expense Offset (Note D)
|
|
|
@
|
Net Expenses
|
|
1,017
|
|
Net Investment Income
|
|
5,789
|
|
Net Realized Gain (Loss) on:
|
|
|
|
Investments
|
|
(65
|
)
|
Foreign Currency Transactions
|
|
(178
|
)
|
Net Realized Loss
|
|
(243
|
)
|
Change in Unrealized Appreciation
(Depreciation) on:
|
|
|
|
Investments
|
|
(55,967
|
)
|
Foreign Currency Translations
|
|
(2
|
)
|
Change in Unrealized Appreciation
(Depreciation)
|
|
(55,969
|
)
|
Net Realized Gain (Loss) and Change in
Unrealized Appreciation (Depreciation)
|
|
(56,212
|
)
|
Net Decrease in Net Assets Resulting from Operations
|
|
$
(50,423
|
)
|
|
|
|
|
|
@ Amount is less than $500.
6
|
The
accompanying notes are an integral part of the financial statements.
|
|
|
The
Malaysia Fund, Inc.
|
|
|
|
Financial
Statements
|
Statements of Changes in Net Assets
|
|
Year Ended
December 31, 2008
(000)
|
|
Year Ended
December 31, 2007
(000)
|
Increase (Decrease) in Net Assets
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
Net Investment Income
|
|
$
|
5,789
|
|
$
|
1,542
|
|
Net Realized Gain (Loss)
|
|
(243
|
)
|
2,935
|
|
Net Change in Unrealized Appreciation
(Depreciation)
|
|
(55,969
|
)
|
40,235
|
|
Net Increase (Decrease) in Net Assets
Resulting from Operations
|
|
(50,423
|
)
|
44,712
|
|
Distributions from and/or in Excess of:
|
|
|
|
|
|
Net Investment Income
|
|
(5,930
|
)
|
(1,748
|
)
|
Net Realized Gain
|
|
(3,835
|
)
|
|
|
Total Distributions
|
|
(9,765
|
)
|
(1,748
|
)
|
Capital Share Transactions:
|
|
|
|
|
|
Repurchase of Shares (19,880 and 23,828 shares, respectively)
|
|
(170
|
)
|
(237
|
)
|
Fee Reimbursement from U.S. Adviser (Note B)
|
|
543
|
|
|
|
Total Increase (Decrease)
|
|
(59,815
|
)
|
42,727
|
|
Net Assets:
|
|
|
|
|
|
Beginning of Period
|
|
117,273
|
|
74,546
|
|
End of Period (Including Undistributed (Distributions
in Excess of) Net
Investment Income of $218 and $(6), respectively)
|
|
$
|
57,458
|
|
$
|
117,273
|
|
|
The
accompanying notes are an integral part of the financial statements.
|
7
|
|
The Malaysia Fund, Inc.
|
|
|
|
Financial Highlights
|
Selected Per Share Data
and Ratios
|
|
|
Year Ended December 31,
|
|
|
|
|
2008
|
|
2007
|
|
2006
|
|
2005
|
|
2004
|
|
Net Asset Value, Beginning of Period
|
|
|
$
|
12.14
|
|
$
|
7.70
|
|
$
|
5.48
|
|
$
|
6.09
|
|
$
|
5.76
|
|
Net Investment Income
|
|
|
0.60
|
|
0.16
|
|
0.07
|
|
0.11
|
|
0.08
|
|
Net Realized and Unrealized Gain (Loss) on
Investments
|
|
|
(5.82
|
)
|
4.46
|
|
2.23
|
|
(0.59
|
)
|
0.31
|
|
Total from Investment Operations
|
|
|
(5.22
|
)
|
4.62
|
|
2.30
|
|
(0.48
|
)
|
0.39
|
|
Distributions from and/or in Excess of:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
(0.62
|
)
|
(0.18
|
)
|
(0.08
|
)
|
(0.13
|
)
|
(0.06
|
)
|
Net Realized Gain
|
|
|
(0.40
|
)
|
|
|
|
|
|
|
|
|
Total Distributions
|
|
|
(1.02
|
)
|
(0.18
|
)
|
(0.08
|
)
|
(0.13
|
)
|
(0.06
|
)
|
Anti-Dilutive Effect of Share Repurchase
Program
|
|
|
0.00
|
|
0.00
|
|
0.00
|
|
|
|
|
|
Fee Reimbursement from U.S. Adviser
|
|
|
0.06
|
|
|
|
|
|
|
|
|
|
Net Asset Value, End of Period
|
|
|
$
|
5.96
|
|
$
|
12.14
|
|
$
|
7.70
|
|
$
|
5.48
|
|
$
|
6.09
|
|
Per Share Market Value, End of Period
|
|
|
$
|
5.05
|
|
$
|
10.85
|
|
$
|
7.09
|
|
$
|
5.18
|
|
$
|
6.21
|
|
TOTAL INVESTMENT RETURN:
|
|
|
|
|
|
|
|
|
|
|
|
|
Market Value
|
|
|
(44.89
|
)%
|
55.48
|
%
|
38.41
|
%
|
(14.60
|
)%
|
4.40
|
%
|
Net Asset Value(1)
|
|
|
(41.88
|
)%#
|
60.19
|
%
|
42.09
|
%
|
(7.87
|
)%
|
6.83
|
%
|
RATIOS, SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets, End of Period (Thousands)
|
|
|
$
|
57,458
|
|
$
|
117,273
|
|
$
|
74,546
|
|
$
|
53,043
|
|
$
|
59,017
|
|
Ratio of Expenses to Average Net Assets(2)
|
|
|
1.10
|
%+
|
1.24
|
%+
|
1.49
|
%
|
1.57
|
%
|
1.50
|
%
|
Ratio of Net Investment Income to Average
Net Assets(2)
|
|
|
6.24
|
%+
|
1.56
|
%+
|
1.08
|
%
|
1.80
|
%
|
1.38
|
%
|
Portfolio Turnover Rate
|
|
|
15
|
%
|
7
|
%
|
28
|
%
|
25
|
%
|
24
|
%
|
(2) Supplemental Information on the
Ratios to Average Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratios Before Expenses Waived by
Administrator:
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of Expenses to Average Net Assets
|
|
|
1.13
|
%+
|
1.27
|
%+
|
1.51
|
%
|
1.58
|
%
|
1.50
|
%
|
Ratio of Net Investment Income to Average
Net Assets
|
|
|
6.21
|
%+
|
1.53
|
%+
|
1.06
|
%
|
1.79
|
%
|
1.38
|
%
|
(1)
|
Total
investment return based on net asset value per share reflects the effects of
changes in net asset value on the performance of the Fund during each period,
and assumes dividends and distributions, if any, were reinvested. This
percentage is not an indication of the performance of a stockholders
investment in the Fund based on market value due to differences between the
market price of the stock and the net asset value per share of the Fund.
|
|
Amount
is less than $0.005 per share.
|
#
|
If
the U.S. Adviser had not made a voluntary contribution to the Fund, the total
return would have been -42.46%
|
|
Per
share amount is based on average shares outstanding.
|
+
|
Reflects
rebate of certain Fund expenses in connection with the investments in Morgan
Stanley Institutional Liquidity Money Market Portfolio Institutional
Class during the period. As a result of such rebate, the expenses as a
percentage of its net assets were effected by less than 0.005%.
|
8
|
The
accompanying notes are an integral part of the financial statements.
|
|
|
The Malaysia Fund, Inc.
|
|
|
|
December 31, 2008
|
Notes to Financial
Statements
The
Malaysia Fund, Inc. (the Fund) was incorporated on March 12, 1987
and is registered as a diversified, closed-end management investment company
under the Investment Company Act of 1940, as amended (the 1940 Act). The Funds
investment objective is long-term capital appreciation through investment in
equity securities of Malaysian companies. To the extent that the Fund invests
in derivative instruments that the Adviser believes have economic
characteristics similar to equity securities of Malaysian companies, such
investments will be counted for purposes of the Funds policy in the previous
sentence. To the extent the Fund makes such investments, the Fund will be
subject to the risks of such derivative instruments as described herein.
A. Accounting
Policies:
The
following significant accounting policies are in conformity with U.S. generally
accepted accounting principles. Such policies are consistently followed by the
Fund in the preparation of its financial statements. U.S. generally accepted
accounting principles may require management to make estimates and assumptions
that affect the reported amounts and disclosures in the financial statements.
Actual results may differ from those estimates.
1.
Security Valuation:
Securities listed on a foreign exchange are valued at their closing
price except as noted below. Unlisted securities and listed securities not
traded on the valuation date for which market quotations are readily available
are valued at the mean between the current bid and asked prices obtained from
reputable brokers. Equity securities listed on a U.S. exchange are valued at
the latest quoted sales price on the valuation date. Equity securities listed
or traded on NASDAQ, for which market quotations are available, are valued at
the NASDAQ Official Closing Price. Debt securities purchased with remaining
maturities of 60 days or less are valued at amortized cost, if it approximates
market value.
All other securities and
investments for which market values are not readily available, including
restricted securities, and those securities for which it is inappropriate to
determine prices in accordance with the aforementioned procedures, are valued
at fair value as determined in good faith under procedures adopted by the Board
of Directors (the Directors), although the actual calculations may be done by
others. Factors considered in making this determination may include, but are
not limited to, information obtained by contacting the issuer, analysts, or the
appropriate stock exchange (for exchange-traded securities), analysis of the
issuers financial statements or other available documents and, if necessary,
available information concerning other securities in similar circumstances.
Most foreign markets close
before the New York Stock Exchange (NYSE). Occasionally, developments that
could affect the closing prices of securities and other assets may occur
between the times at which valuations of such securities are determined (that
is, close of the foreign market on which the securities trade) and the close of
business on the NYSE. If these developments are expected to materially affect
the value of the securities, the valuations may be adjusted to reflect the
estimated fair value as of the close of the NYSE, as determined in good faith
under procedures established by the Directors.
2.
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 at the mean of the bid and asked prices of such currencies against U.S.
dollars last quoted by a major bank as follows:
·
investments, other assets and liabilities at the prevailing rates of
exchange on the valuation date;
·
investment
transactions and investment income at the prevailing rates of exchange on the
dates of such transactions.
Although the net assets of
the Fund are presented at the foreign exchange rates and market values at the
close of the period, the Fund does not isolate that portion of the results of
operations arising as a result of changes in the foreign exchange rates from
the fluctuations arising from changes in the market prices of the securities
held at period end. Similarly, the Fund does not isolate the effect of changes
in foreign exchange rates from the fluctuations arising from changes in the
market prices of securities sold during the period. Accordingly, realized and
unrealized foreign currency gains (losses) on investments in securities are
included in the reported net realized and unrealized gains (losses) on
investment transactions and balances.
Net realized gains (losses)
on foreign currency transactions represent net foreign exchange gains (losses)
from sales and maturities of foreign currency exchange contracts, disposition
of foreign currencies, currency gains (losses) realized between the trade and
settlement dates on securities transactions, and the difference between the
amount of investment income and foreign withholding taxes recorded
|
The Malaysia Fund, Inc.
|
|
|
|
December 31, 2008
|
Notes to Financial
Statements (contd)
on the Funds books and the
U.S. dollar equivalent amounts actually received or paid. Net unrealized
currency gains (losses) from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of
unrealized appreciation (depreciation) on investments and foreign currency
translations in the Statement of Assets and Liabilities. The change in
unrealized currency gains (losses) on foreign currency translations for the
period is reflected in the Statement of Operations.
A significant portion of the
Funds net assets consist of securities of issuers located in emerging markets
or which are denominated in foreign currencies. Changes in currency exchange
rates will affect the value of and investment income from such securities.
Securities in emerging markets involve certain considerations and risks not
typically associated with investments in the United States. In addition to
smaller size, lesser liquidity and greater volatility, certain securities
markets in which the Fund may invest are less developed than the U.S.
securities market and there is often substantially less publicly available
information about these issuers. Further, emerging market issues may be subject
to substantial governmental involvement in the economy and greater social,
economic and political uncertainty. Accordingly, the price which the Fund may
realize upon sale of securities in such markets may not be equal to its value
as presented in the financial statements.
3.
Derivatives:
The Fund may use derivatives to achieve its
investment objectives. The Fund may engage in transactions in futures contracts
on foreign currencies, stock indices, as well as in options, swaps and
structured products. Consistent with the Funds investment objectives and
policies, the Fund may use derivatives for non-hedging as well as hedging
purposes.
Following is a description of
derivative instruments that the Fund has utilized and their associated risks:
Foreign
Currency Exchange Contracts:
The Fund may enter into foreign currency exchange contracts generally
to attempt to protect securities and related receivables and payables against
changes in future foreign exchange rates and, in certain situations, to gain
exposure to a foreign currency. A foreign currency exchange contract is an
agreement between two parties to buy or sell currency at a set price on a
future date. The market value of the contract will fluctuate with changes in
currency exchange rates. The contract is marked-to-market daily and the change
in market value is recorded by the Fund as unrealized gain (loss). The Fund
records realized gains (losses) when the contract is closed equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed. Risk may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms of
their contracts and is generally limited to the amount of unrealized gain on
the contracts, if any, at the date of default. Risks may also arise from
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar. At December 31, 2008, the Fund did not have any outstanding
foreign currency exchange contracts.
Over-the-Counter
Trading:
Securities
and other derivative instruments that may be purchased or sold by the Fund are
expected to regularly consist of instruments not traded on an exchange. The
risk of non-performance by the obligor on such an instrument may be greater,
and the ease with which the Fund can dispose of or enter into closing
transactions with respect to such an instrument may be less than in the case of
an exchange-traded instrument. In addition, significant disparities may exist
between bid and ask prices for derivative instruments that are not traded on an
exchange. Derivative instruments not traded on exchanges are also not subject
to the same type of government regulation as exchange traded instruments, and
many of the protections afforded to participants in a regulated environment may
not be available in connection with such transactions.
4.
New Accounting Pronouncement:
On March 19, 2008, Financial Accounting
Standards Board (FASB) released Statement of Financial Accounting Standards No. 161,
Disclosures about Derivative Instruments and Hedging Activities (SFAS 161).
SFAS 161 requires qualitative disclosures about objectives and strategies for
using derivatives, quantitative disclosures about fair value amounts of and
gains and losses on derivative instruments, and disclosures about
credit-risk-related contingent features in derivative agreements. The
application of SFAS 161 is required for fiscal years and interim periods
beginning after November 15, 2008. At this time, management is evaluating
the implications of SFAS 161 and its impact on the financial statements has not
yet been determined.
5.
Fair Value Measurement:
The Fund adopted Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 157, Fair
Value Measurements
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Notes to Financial
Statements (contd)
(SFAS 157), effective January 1,
2008. In accordance with SFAS 157, fair value is defined as the price that the
Fund would receive to sell an investment or pay to transfer a liability in a
timely transaction with an independent buyer in the principal market, or in the
absence of a principal market the most advantageous market for the investment
or liability. SFAS 157 establishes a three-tier hierarchy to distinguish
between (1) inputs that reflect the assumptions market participants would
use in valuing an asset or liability developed based on market data obtained
from sources independent of the reporting entity (observable inputs) and (2) inputs
that reflect the reporting entitys own assumptions about the assumptions
market participants would use in valuing an asset or liability developed based
on the best information available in the circumstances (unobservable inputs)
and to establish classification of fair value measurements for disclosure
purposes. Various inputs are used in determining the value of the Funds
investments. The inputs are summarized in the three broad levels listed below.
Level 1 quoted prices in
active markets for identical securities
Level 2 other significant
observable inputs (including quoted prices for similar investments, interest
rates, prepayment speeds, credit risk, etc.)
Level 3 significant
unobservable inputs (including the Funds own assumptions in determining the
fair value of investments)
The inputs or methodology
used for valuing securities are not necessarily an indication of the risk
associated with investing in those securities.
The following is a summary of
the input used as of December 31, 2008 in valuing the Funds investments
carried at value:
Valuation Inputs
|
|
Investments
in Securities
(000)
|
Level 1 - Quoted Prices
|
|
$ 10,199
|
Level 2 - Other Significant
Observable Inputs
|
|
55,612
|
Level 3 - Significant
Unobservable Inputs
|
|
|
Total
|
|
$ 65,811
|
At December 31, 2008,
there were no Level 3 investments for which significant unobservable inputs
were used to determine fair value.
6.
Other:
Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains (losses) on the sale of investment securities
are determined on the specific identified cost basis. Interest income is
recognized on the accrual basis. Dividend income and distributions are recorded
on the ex-dividend date (except certain dividends which may be recorded as soon
as the Fund is informed of such dividends) net of applicable withholding taxes.
B. Investment
Advisory Fees:
Morgan
Stanley Investment Management Inc. (the U.S. Adviser or MS Investment
Management) provides investment advisory services to the Fund under the terms
of an Investment Advisory Agreement (the Agreement). Under the Agreement, the
U.S. Adviser is paid a fee computed weekly and payable monthly at an annual
rate of 0.90% of the Funds first $50 million of average weekly net assets,
0.70% of the Funds next $50 million of average weekly net assets and 0.50% of
the Funds average weekly net assets in excess of $100 million.
In
August 2003, the Adviser entered into a Sub-Advisory Agreement with Morgan
Stanley Investment Management Company (the Sub-Adviser), a wholly-owned
subsidiary of Morgan Stanley. The Sub-Adviser, subject to the control and
supervision of the Fund, its Officers, Directors and the Adviser, and in
accordance with the investment objectives, policies and restrictions of the
Fund, makes certain day-to-day investment decisions and places certain purchase
and sales orders. The Adviser pays the Sub-Adviser on a monthly basis a portion
of the net advisory fees the Adviser receives from the Fund.
1.
Fee Reimbursement to Fund for
Malaysian Adviser Fees:
Effective
December 31, 2007, the U.S. Adviser terminated the agreement with AMMB
Consultant Sdn Bhd, (the Malaysian Adviser). In March and November 2008,
the U.S. Adviser reimbursed the Fund approximately $341,000 and $202,000,
respectively, for advisory fees paid to the Malaysian Adviser for the fiscal
third quarter 2004 through December 31, 2007. These fees were reimbursed
based on the U.S. Advisers assessment, in consultation with the Directors,
that the services rendered by the Malaysian Adviser during that period had not
been needed to effectively manage the Fund.
11
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Notes to Financial
Statements (contd)
C. Administration
Fees:
MS Investment
Management also serves as Administrator to the Fund pursuant to an
Administration Agreement. Under the Administration Agreement, the
administration fee is 0.08% of the Funds average weekly net assets. MS
Investment Management has agreed to limit the administration fee through a
waiver so that it will be no greater than the previous administration fee
(prior to November 1, 2004) of 0.02435% of the Funds average weekly net
assets plus $24,000 per annum. This waiver is voluntary and may be terminated
at any time. For the year ended December 31, 2008, approximately $28,000
of administration fees were waived pursuant to this arrangement. Under a
sub-administration agreement between the Administrator and JPMorgan Investor
Services Co. (JPMIS), a corporate affiliate of JPMorgan Chase Bank, N.A.,
JPMIS provides certain administrative services to the Fund. For such services,
the Administrator pays JPMIS a portion of the fee the Administrator receives
from the Fund. Administration costs (including out-of-pocket expenses) incurred
in the ordinary course of providing services under the agreement, except
pricing services and extraordinary expenses, will be covered under the
administration fee.
D. Custodian
Fees:
JPMorgan Chase
Bank, N.A., (the Custodian) serves as Custodian for the Fund. The Custodian
holds cash, securities, and other assets of the Fund as required by the 1940
Act. Custody fees are payable monthly based on assets held in custody,
investment purchases and sales activity and account maintenance fees, plus
reimbursement for certain out-of-pocket expenses.
The
Fund has entered into an arrangement with its Custodian whereby credits
realized on uninvested cash balances were used to offset a portion of the Funds
expenses. These custodian credits are shown as Expense Offset on the
Statement of Operations.
E. Federal
Income Taxes:
It is
the Funds intention to continue to qualify as a regulated investment company
and distribute all of its taxable income. Accordingly, no provision for Federal
income taxes is required in the financial statements. Dividend income and
distributions to stockholders are recorded on the ex-dividend date.
The
Fund may be subject to taxes imposed by countries in which it invests. The Fund
is currently not subject to Malaysian withholding taxes on dividends and/or
capital gains.
Financial
Accounting Standards Board Interpretation No. 48
Accounting for Uncertainty in Income Taxes (FIN 48)
sets forth a minimum threshold for financial statement recognition of the
benefit of a tax position taken or expected to be taken in a tax return.
Management has concluded there are no significant uncertain tax positions that
would require recognition in the financial statements. If applicable, the Fund
recognizes interest accrued related to unrecognized tax benefits in Interest
Expense and penalties in Other expenses on the Statement of Operations. The
Fund files tax returns with the U.S. Internal Revenue Service, New York and
various states. Generally, each of the tax years in the four year period ended December 31,
2008, remains subject to examination by taxing authorities.
The
tax character of distributions paid may differ from the character of
distributions shown on the Statements of Changes in Net Assets due to
short-term capital gains being treated as ordinary income for tax purposes. The
tax character of distributions paid during fiscal 2008 and 2007 was as follows:
2008 Distributions
Paid From:
(000)
|
|
2007 Distributions
Paid From:
(000)
|
Ordinary
Income
|
|
Long-term
Capital
Gain
|
|
Ordinary
Income
|
|
Long-term
Capital
Gain
|
|
$5,930
|
|
$3,835
|
|
$1,748
|
|
$
|
|
The
amount and character of income and capital gain distributions to be paid by the
Fund are determined in accordance with Federal income tax regulations, which
may differ from U.S. generally accepted accounting principles. The book/tax
differences are considered either temporary or permanent in nature.
Temporary
differences are generally due to differing book and tax treatments for the
timing of the recognition of gains (losses) on certain investment transactions
and the timing of the deductibility of certain expenses.
Permanent
differences, primarily due to differing treatments of gains (losses) related to
foreign currency transactions, resulted in
12
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Notes to Financial
Statements (contd)
the
following reclassifications among the components of net assets at December 31,
2008:
Increase (Decrease)
|
Undistributed
(Distributions in
Excess of)
Net Investment
Income (Loss)
(000)
|
|
Accumulated
Net Realized
Gain (Loss)
(000)
|
|
Paid-in
Capital
(000)
|
|
$365
|
|
$178
|
|
$(543)
|
|
At
December 31, 2008, the components of distributable earnings on a tax basis
were as follows:
Undistributed Ordinary
Income
(000)
|
|
Undistributed
Long-term Capital Gain
(000)
|
$249
|
|
$
|
At
December 31, 2008, the U.S. Federal income tax cost basis of investments
was approximately $57,250,000 and, accordingly, net unrealized appreciation for
U.S. Federal income tax purposes was $8,561,000 of which $14,467,000 related to
appreciated securities and $5,906,000 related to depreciated securities.
Net
capital, currency and passive foreign investment company (PFIC) losses
incurred after October 31, and within the taxable year are deemed to arise
on the first day of the Funds next taxable year. For the year ended December 31,
2008, the Fund deferred to January 2, 2009, for U.S. Federal income tax
purposes, post-October capital and currency losses of approximately
$7,019,000 and $26,000, respectively.
During
the year ended December 31, 2008, the Fund utilized capital loss
carryforward for U.S. Federal income tax purposes of approximately $3,119,000.
To
the extent that capital loss carryforwards are used to offset any future
capital gains realized during the carryover period as provided by U.S. Federal
income tax regulations, no capital gains tax liability will be incurred by the
Fund for gains realized and not distributed. To the extent that capital gains
are offset, such gains will not be distributed to the stockholders.
F. Contractual
Obligations:
The Fund
enters into contracts that contain a variety of indemnifications. The Funds
maximum exposure under these arrangements is unknown. However, the Fund has not
had prior claims or losses pursuant to these contracts and expects the risk of
loss to be remote.
G. Security
Transactions and Transactions with Affiliates:
The Fund invests in the Institutional Class of
the Morgan Stanley Institutional Liquidity Money Market Portfolio, an open-end
management investment company managed by the Adviser. Investment Advisory fees
paid by the Fund are reduced by an amount equal to its pro-rata share of
advisory and administration fees paid by the Morgan Stanley Institutional
Liquidity Money Market Portfolio. For the year ended December 31, 2008,
advisory fees paid were reduced by approximately $2,000 relating to the Funds
investment in the Morgan Stanley Institutional Liquidity Money Market
Portfolio.
A
summary of the Funds transactions in shares of the affiliated issuer during
the year ended December 31, 2008 is as follows:
Market Value
December 31,
2007
(000)
|
|
Purchases
at Cost
(000)
|
|
Sales
Proceeds
(000)
|
|
Dividend
Income
(000)
|
|
Market Value
December 31,
2008
(000)
|
|
$2,269
|
|
$15,981
|
|
$8,051
|
|
$43
|
|
$10,199
|
|
During
the year ended December 31, 2008, the Fund made purchases and sales
totaling approximately $13,470,000 and $17,631,000, respectively, of investment
securities other than long-term U.S. Government securities and short-term
investments. There were no purchases or sales of long-term U.S. Government
securities.
During
the year ended December 31, 2008, the Fund incurred no brokerage
commissions with Morgan Stanley & Co. Incorporated, an affiliated
broker/dealer.
H. Other:
On July 15, 2002, the Fund commenced a
share repurchase program for purposes of enhancing stockholder value and
reducing the discount at which the Funds shares traded from their net asset
value. During the year ended December 31, 2008, the Fund repurchased
19,880 of its shares at an average discount of 12.97% from net asset value per
share. Since the inception of the program, the Fund has repurchased 100,681 of
its shares at an average discount of 13.59% from net asset value per share. The
Fund expects to continue to repurchase its outstanding shares at such time and
in such amounts as it believes will further the accomplishment of the foregoing
objectives, subject to review by the Directors.
On
December 12, 2008, the Officers of the Fund, pursuant to authority granted
by the Directors, declared a distribution of $0.6151 per share, derived from
net investment income, and $0.3977 per share, derived from capital gains,
payable on January 7, 2009, to stockholders of record on December 19,
2008.
13
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Notes to Financial
Statements (contd)
I. Supplemental
Proxy Information (unaudited):
On June 19, 2008, an annual meeting of the Funds stockholders was
held for the purpose of voting on the following matter, the results of which
were as follows:
Election
of Directors by all stockholders:
|
|
For
|
|
Withhold
|
|
Kathleen
A. Dennis
|
|
4,774,899
|
|
1,508,649
|
|
Joseph
J. Kearns
|
|
4,777,883
|
|
1,505,665
|
|
Michael
E. Nugent
|
|
4,775,738
|
|
1,507,810
|
|
Fergus
Reid
|
|
4,775,329
|
|
1,508,219
|
|
Federal Income Tax Information (unaudited)
For
Federal income tax purposes, the following information is furnished with
respect to the distributions paid by the Fund during its taxable year ended December 31,
2008.
For
corporate shareholders, 0.70% of the dividends qualified for the dividends
received deduction.
The
Fund designated and paid approximately $3,835,000 as long-term capital gain
distribution.
For
Federal income tax purposes, the following information is furnished with
respect to the Funds earnings for its taxable year ended December 31,
2008.
For
non-U.S. residents, the Fund may designate up to a maximum of approximately
$33,000 as qualifying as interest-related dividends.
In
January, the Fund provides tax information to stockholders for the preceding
calendar year.
14
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Notes to Financial
Statements (contd)
For More Information About Portfolio Holdings (unaudited)
The
Fund provides a complete schedule of portfolio holdings in its semi-annual and
annual reports within 60 days of the end of the Funds second and fourth fiscal
quarters. The semi-annual reports and the annual reports are filed electronically
with the Securities and Exchange Commission (SEC) on Form N-CSRS and Form N-CSR,
respectively. Morgan Stanley also delivers the semi-annual and annual reports
to Fund stockholders and makes these reports available on its public website,
www.morganstanley.com/msim. Each Morgan Stanley fund also files a complete
schedule of portfolio holdings with the SEC for the Funds first and third
fiscal quarters on Form N-Q. Morgan Stanley does not deliver the reports
for the first and third fiscal quarters to stockholders, nor are the reports
posted to the Morgan Stanley public website. You may, however, obtain the Form N-Q
filings (as well as the Form N-CSR and N-CSRS filings) by accessing the
SECs website, www.sec.gov. You may also review and copy them at the SECs
public reference room in Washington, DC. Information on the operation of the
SECs Public Reference Room may be obtained by calling the SEC at 1(800)
SEC-0330. You can also request copies of these materials, upon payment of a
duplicating fee, by electronic request at the SECs e-mail address
(publicinfo@sec.gov) or by writing the public reference section of the SEC,
Washington, DC 20549-0102.
In
addition to filing a complete schedule of portfolio holdings with the SEC each
fiscal quarter, the Fund makes portfolio holdings information available by
periodically providing the information on its public website,
www.morganstanley.com/ msim.
The
Fund provides a complete schedule of portfolio holdings on the public website
on a calendar-quarter basis approximately 31 calendar days after the close of
the calendar quarter. The Fund also provides Top 10 holdings information on the
public website approximately 15 business days following the end of each month.
You may obtain copies of the Funds monthly or calendar-quarter website
postings, by calling 1(800) 231-2608.
Proxy Voting Policy and Procedures and Proxy Voting Record
(unaudited)
A
copy of (1) the Funds policies and procedures with respect to the voting
of proxies relating to the Funds portfolio securities; and (2) how the
Fund voted proxies relating to portfolio securities during the most recent
twelve-month period ended June 30, is available without charge, upon
request, by calling 1 (800) 548-7786 or by visiting our website at
www.morganstanley.com/msim. This information is also available on the SECs
website at www.sec.gov.
15
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Portfolio Management
(unaudited)
The
Fund is managed by members of the Emerging Markets Equity team. The team
consists of portfolio managers and analysts. Current members of the team
jointly and primarily responsible for the day-to-day management of the Funds
portfolio are James Cheng, a Managing Director of the Sub-Adviser, Munib Madni,
an Executive Director of the Sub-Adviser, and Ruchir Sharma, a Managing
Director of the Adviser. Mr. Cheng has been associated with the
Sub-Adviser in an investment management capacity since July 2006 and
joined the team managing the Fund in August 2008. Prior to July 2006,
Mr. Cheng worked in an investment management capacity at Invesco Asia
Limited, Asia Strategic Investment Management Limited and Munich Re Asia
Capital Management. Mr. Munib has been associated with the Sub-Adviser in
an investment management capacity since February 2005 and joined the team
managing the Fund in August 2008. Prior to August 2008, Mr. Munib
was associate director of Australian equities at Aberdeen Asset Management (December 2000
to January 2005). Previously, he was a portfolio manager, Australian
equities, at Equitilink Investment Management (December 1994 to December 2000).
Mr. Sharma has been associated with the Adviser in an investment
management capacity since 1996 and joined the team managing the Fund in August 2008.
16
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Report of Independent
Registered Public
Accounting Firm
To the Stockholders and Board of Directors of
The Malaysia Fund, Inc.
We
have audited the accompanying statement of assets and liabilities of The
Malaysia Fund, Inc. (the Fund), including the portfolio of investments,
as of December 31, 2008, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Funds management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. We were not engaged to perform an audit of the Funds internal
control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Funds internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of December 31, 2008, by
correspondence with the custodian. We believe that our audits provide a
reasonable basis for our opinion.
In
our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Malaysia Fund, Inc. at December 31, 2008, 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 U.S. generally
accepted accounting principles.
Boston,
Massachusetts
February 24, 2009
17
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Dividend Reinvestment and
Cash Purchase Plan (unaudited)
Pursuant to the Dividend Reinvestment and Cash
Purchase Plan (the Plan), each stockholder will be deemed to have elected,
unless Computershare Trust Company, N.A. (the Plan Agent) is otherwise
instructed by the stockholder in writing, to have all distributions
automatically reinvested in Fund shares. Participants in the Plan have the
option of making additional voluntary cash payments to the Plan Agent,
annually, in any amount from $100 to $3,000, for investment in Fund shares.
Dividend and capital gain distributions will be
reinvested on the reinvestment date in full and fractional shares. If the
market price per share equals or exceeds net asset value per share on the
reinvestment date, the Fund will issue shares to participants at net asset
value or, if net asset value is less than 95% of the market price on the
reinvestment date, shares will be issued at 95% of the market price. If net
asset value exceeds the market price on the reinvestment date, participants
will receive shares valued at market price. The Fund may issue shares of its
Common Stock in connection with dividend reinvestment requirements at the
discretion of the Board of Directors. Should the Fund declare a dividend or
capital gain distribution payable only in cash, the Plan Agent will purchase
Fund shares for participants in the open market as agent for the participants.
The Plan Agents fees for the reinvestment of dividends
and distributions will be paid by the Fund. However, each participants account
will be charged a pro rata share of brokerage commissions incurred on any open
market purchases effected on such participants behalf. A participant will also
pay brokerage commissions incurred on purchases made by voluntary cash
payments. Although stockholders in the Plan may receive no cash distributions,
participation in the Plan will not relieve participants of any income tax which
may be payable on such dividends or distributions.
In the case of stockholders, such as banks, brokers
or nominees, that hold shares for others who are the beneficial owners, the
Plan Agent will administer the Plan on the basis of the number of shares
certified from time to time by the stockholder as representing the total amount
registered in the stockholders name and held for the account of beneficial
owners who are participating in the Plan.
Stockholders who do not wish to have distributions
automatically reinvested should notify the Plan Agent in writing. There is no
penalty for non-participation or withdrawal from the Plan, and stockholders who
have previously withdrawn from the Plan may rejoin at any time. Requests for
additional information or any correspondence concerning the Plan should be
directed to the Plan Agent at:
The
Malayisa Fund, Inc.
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, Rhode Island 02940-3078
1(800) 231-2608
18
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Morgan Stanley
Institutional Closed End Funds
An Important Notice Concerning Our
U.S. Privacy Policy
(unaudited)
We
are required by federal law to provide you with a copy of our Privacy Policy
annually.
The
following Policy applies to current and former individual investors in Morgan
Stanley Institutional closed end funds. This Policy is not applicable to
partnerships, corporations, trusts or other non-individual clients or account
holders. Please note that we may amend this Policy at any time, and will inform
you of any changes to this Policy as required by law.
We Respect Your Privacy
We
appreciate that you have provided us with your personal financial information.
We strive to maintain the privacy of such information while we help you achieve
your financial objectives. This Policy describes what non-public personal
information we collect about you, why we collect it, and when we may share it
with others. We hope this Policy will help you understand how we collect and
share non-public personal information that we gather about you. Throughout this
Policy, we refer to the non-public information that personally identifies you
or your accounts as personal information.
1. What Personal Information Do We Collect About You?
To
serve you better and manage our business, it is important that we collect and
maintain accurate information about you. We may obtain this information from
applications and other forms you submit to us, from your dealings with us, from
consumer reporting agencies, from our Web sites and from third parties and
other sources.
For
example:
·
We
may collect information such as your name, address, e-mail address,
telephone/fax numbers, assets, income and investment objectives through
applications and other forms you submit to us.
·
We may obtain information about account
balances, your use of account(s) and the types of products and services
you prefer to receive from us through your dealings and transactions with us
and other sources.
·
We may obtain information about your
creditworthiness and credit history from consumer reporting agencies.
·
We may collect background information from and
through third-party vendors to verify representations you have made and to
comply with various regulatory requirements.
·
If
you interact with us through our public and private Web sites, we may collect
information that you provide directly through online communications (such as an
e-mail address). We may also collect information about your Internet service
provider, your domain name, your computers operating system and Web browser,
your use of our Web sites and your product and service preferences, through the
use of cookies. Cookies recognize your computer each time you return to one
of our sites, and help to improve our sites content and personalize your
experience on our sites by, for example, suggesting offerings that may interest
you. Please consult the Terms of Use of these sites for more details on our use
of cookies.
2. When Do We Disclose Personal Information We Collect About
You?
To
provide you with the products and services you request, to serve you better and
to manage our business, we may disclose personal information we collect about
you to our affiliated companies and to non-affiliated third parties as required
or permitted by law.
A.
Information We Disclose to Our Affiliated Companies.
We do not disclose personal information that
we collect about you to our affiliated companies except to enable them to
provide services on our behalf or as otherwise required or permitted by law.
19
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Morgan Stanley
Institutional Closed End Funds
An Important Notice Concerning Our
U.S. Privacy Policy (contd)
B.
Information We Disclose to Third Parties.
We do not disclose personal information that
we collect about you to non-affiliated third parties except to enable them to
provide services on our behalf, to perform joint marketing agreements with
other financial institutions, or as otherwise required or permitted by law. For
example, some instances where we may disclose information about you to
nonaffiliated third parties include: for servicing and processing transactions,
to offer our own products and services, to protect against fraud, for
institutional risk control, to respond to judicial process or to perform
services on our behalf. When we share personal information with these
companies, they are required to limit their use of personal information to the
particular purpose for which it was shared and they are not allowed to share
personal information with others except to fulfill that limited purpose.
3. How Do We Protect the Security and Confidentiality of
Personal Information We Collect About You?
We
maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties
that provide support or marketing services on our behalf may also receive
personal information, and we require them to adhere to confidentiality
standards with respect to such information.
20
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Director and Officer
Information (unaudited)
Independent
Directors:
Name,
Age and Address of
Independent Director
|
|
Position(s)
Held with
Registrant
|
|
Length
of
Time
Served*
|
|
Principal
Occupation(s) During Past 5 Years
|
|
Number
of
Portfolios in
Fund
Complex
Overseen
by
Independent
Director**
|
|
Other
Directorships Held by
Independent Directors
|
Frank L. Bowman (64)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent
Trustees
1177 Avenue of the
Americas
New York, NY 10036
|
|
Director
|
|
Since
August
2006
|
|
President, Strategic
Decisions, LLC (consulting) (since February 2009); Director or Trustee
of various Retail Funds and Institutional Funds (since August 2006);
Chairperson of the Insurance Sub-Committee of the Insurance, Valuation and
Compliance Committee (since February 2007); served as President and
Chief Executive Officer of the Nuclear Institute (policy organization)
through November 2008; retired as Admiral in the U.S. Navy in
January 2005 after serving over 8 years as Director of the Naval Nuclear
Propulsion Program and Deputy Administrator Naval Reactors in the National
Nuclear Security Administration at the U.S. Department of Energy (1996-2004).
Knighted as Honary Knight Commander of the Most Excellent Order of the
British Empire; awarded the Officer de lOrde National du Mérite by the
French Government.
|
|
161
|
|
Director of the Armed
Services YMCA of the USA; member, BP America External Advisory Council
(energy); member, National Academy of Engineers.
|
|
|
|
|
|
|
|
|
|
|
|
Michael Bozic (68)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent
Directors
1177 Avenue of the
Americas
New York, NY 10036
|
|
Director
|
|
Since
April
1994
|
|
Private investor;
Chairperson of the Insurance, Valuation and Compliance Committee (since
October 2006); Director or Trustee of the Retail Funds (since
April 1994) and Institutional Funds (since July 2003); formerly,
Chairperson of the Insurance Committee (July 2006-September 2006),
Vice Chairman of Kmart Corporation (December 1998-October 2000),
Chairman and Chief Executive Officer of Levitz Furniture Corporation
(November 1995-November 1998) and President and Chief Executive
Officer of Hills Department Stores (May 1991-July 1995); variously
Chairman, Chief Executive Officer, President and Chief Operating Officer
(1987-1991) of the Sears Merchandise Group of Sears Roebuck & Co.
|
|
163
|
|
Director of various
business organizations.
|
|
|
|
|
|
|
|
|
|
|
|
Kathleen A. Dennis (55)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the Independent
Directors
1177 Avenue of the
Americas
New York, NY 10036
|
|
Director
|
|
Since
August
2006
|
|
President, Cedarwood
Associates (mutual fund and investment management) (since July 2006);
Chairperson of the Money Market and Alternatives Sub-Committee of the
Investment Committee (since October 2006) and Director or Trustee of
various Retail Funds and Institutional Funds (since August 2006);
formerly, Senior Managing Director of Victory Capital Management (1993-2006).
|
|
161
|
|
Director of various
non-profit organizations.
|
21
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Director and Officer
Information (contd)
Independent
Directors (contd):
Name,
Age and Address of
Independent Director
|
|
Position(s)
Held with
Registrant
|
|
Length
of
Time
Served*
|
|
Principal
Occupation(s) During Past 5 Years
|
|
Number
of
Portfolios in
Fund
Complex
Overseen
by
Independent
Director**
|
|
Other
Directorships Held by
Independent Directors
|
|
|
|
|
|
|
|
|
|
|
|
Dr. Manuel H.
Johnson (60)
c/o Johnson Smick Group, Inc.
888 16th Street, N.W.
Suite 740
Washington, D.C. 20006
|
|
Director
|
|
Since
July
1991
|
|
Senior Partner, Johnson
Smick International, Inc. (consulting firm); Chairperson of the
Investment Committee (since October 2006) and Director or Trustee of the
Retail Funds (since July 1991) and Institutional Funds (since
July 2003); Co-Chairman and a founder of the Group of Seven Council
(G7C) (international economic commission); formerly, Chairperson of the Audit
Committee (July 1991-September 2006); Vice Chairman of the Board of
Governors of the Federal Reserve System and Assistant Secretary of the U.S.
Treasury.
|
|
163
|
|
Director of
NVR, Inc. (home construction); Director of Evergreen Energy.
|
|
|
|
|
|
|
|
|
|
|
|
Joseph J. Kearns (66)
c/o Kearns & Associates
LLC
PMB754
23852 Pacific Coast
Highway
Malibu, CA 90265
|
|
Director
|
|
Since
August
1994
|
|
President,
Kearns & Associates LLC (investment consulting); Chairperson of the
Audit Committee (since October 2006) and Director or Trustee of the
Retail Funds (since July 2003) and the Institutional Funds (since
August 1994); formerly Deputy Chairperson of the Audit Committee
(July 2003-September 2006) and Chairperson of the Audit Committee
of the Institutional Funds (October 2001- July 2003); formerly, CFO
of the J. Paul Getty Trust.
|
|
164
|
|
Director of Electro Rent
Corporation (equipment leasing) and The Ford Family Foundation.
|
|
|
|
|
|
|
|
|
|
|
|
Michael F. Klein (50)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the
Independent Directors
1177 Avenue of the
Americas
New York, NY 10036
|
|
Director
|
|
Since
August
2006
|
|
Chief Operating Officer
and Managing Director, Aetos Capital, LLC (since March 2000) and
Co-President, Aetos Alternatives Management, LLC (since January 2004);
Chairperson of the Fixed Income Sub-Committee of the Investment Committee
(since October 2006) and Director or Trustee of various Retail Funds and
Institutional Funds (since August 2006); formerly, Managing Director,
Morgan Stanley & Co. Inc. and Morgan Stanley Dean Witter Investment
Management, President, Morgan Stanley Institutional Funds
(June 1998-March 2000) and Principal, Morgan Stanley & Co.
Inc. and Morgan Stanley Dean Witter Investment Management
(August 1997-December 1999).
|
|
161
|
|
Director of certain investment
funds managed or sponsored by Aetos Capital LLC; Director of Sanitized AG and
Sanitized Marketing AG (specialty chemicals).
|
|
|
|
|
|
|
|
|
|
|
|
Michael E. Nugent (72)
c/o Triumph Capital, L.P.
445 Park Avenue
New York, NY 10022
|
|
Chairperson
of the
Board and Director
|
|
Chairperson
of the
Boards
since July
2006 and
Director
since July
1991
|
|
General Partner, Triumph
Capital, L.P. (private investment partnership); Chairman of the Boards of the
Retail Funds and Institutional Funds (since July 2006); Director or
Trustee of the Retail Funds (since July 1991) and Institutional Funds
(since July 2001); formerly, Chairperson of the Insurance Committee
(until July 2006).
|
|
163
|
|
None.
|
22
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Director and Officer
Information (contd)
Independent
Directors (contd):
Name,
Age and Address of
Independent Director
|
|
Position(s)
Held with
Registrant
|
|
Length
of
Time
Served*
|
|
Principal
Occupation(s) During Past 5 Years
|
|
Number
of
Portfolios in
Fund
Complex
Overseen
by
Independent
Director**
|
|
Other
Directorships Held by
Independent Directors
|
|
|
|
|
|
|
|
|
|
|
|
W. Allen Reed (61)
c/o Kramer Levin Naftalis &
Frankel LLP
Counsel to the
Independent Directors
1177 Avenue of the
Americas
New York, NY 10036
|
|
Director
|
|
Since
August
2006
|
|
Chairperson of the
Equity Sub-Committee of the Investment Committee (since October 2006)
and Director or Trustee of various Retail and Institutional Funds (since
August 2006); formerly, President and CEO of General Motors Asset
Management; Chairman and Chief Executive Officer of the GM Trust Bank and
Corporate Vice President of General Motors Corporation
(July 1994-December 2005).
|
|
161
|
|
Director of
Temple-Inland Industries (packaging and forest products); Director of Legg
Mason, Inc. and Director of the Auburn University Foundation.
|
|
|
|
|
|
|
|
|
|
|
|
Fergus Reid (76)
c/o Lumelite Plastics
Corporation
85 Charles Coleman Blvd. Pawling, NY 12564
|
|
Director
|
|
Since
June
1992
|
|
Chairman of Lumelite
Plastics Corporation; Chairperson of the Governance Committee and Director or
Trustee of the Retail Funds (since July 2003) and Institutional Funds
(since June 1992).
|
|
164
|
|
Trustee and Director of
certain investment companies in the JPMorgan Funds complex managed by JP
Morgan Investment Management Inc.
|
Interested
Directors:
Name, Age and Address of
Interested Director
|
|
Position(s)
Held with
Registrant
|
|
Term of
Office and
Length of
Time
Served*
|
|
Principal
Occupation(s) During Past 5 Years
|
|
Number of
Portfolios in
Fund
Complex
Overseen
by
Interested
Director**
|
|
Other Directorships Held
by
Interested Director
|
|
|
|
|
|
|
|
|
|
|
|
James F. Higgins (61)
|
|
Director
|
|
Since
|
|
Director or Trustee of
the Retail Funds (since
|
|
162
|
|
Director of AXA
|
c/o Morgan Stanley Trust
|
|
|
|
June 2000
|
|
June 2000) and Institutional Funds (since July 2003);
|
|
|
|
Financial, Inc. and
The
|
Harborside Financial
Center
|
|
|
|
|
|
Senior Advisor of Morgan
Stanley (since
|
|
|
|
Equitable Life Assurance
|
Plaza Two
|
|
|
|
|
|
August 2000).
|
|
|
|
Society of the United
States
|
Jersey City, NJ 07311
|
|
|
|
|
|
|
|
|
|
(financial services).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
This is the earliest
date the Director began serving the Retail Funds or Institutional Funds. Each
Director serves an indefinite term, until his or her successor is elected.
|
**
|
The Fund Complex
includes all funds advised by Morgan Stanley Investment Management Inc.
(MSIM) that have an investment advisor that is an affiliated entity of MSIM
(including but not limited to, Morgan Stanley Investment Advisors Inc.
(MSIA) and Morgan Stanley AIP GP LP). The Retail Funds are those funds
advised by MSIA. The Institutional Funds are certain U.S. registered funds
advised by MSIM and Morgan Stanley AIP GP LP.
|
|
For the period
September 26, 2008 through February 5, 2009 W. Allen Reed was an
interested Director. At all other times covered by this report, Mr. Reed
was an Independent Director.
|
23
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Director and Officer
Information (contd)
Executive
Officers:
Name,
Age and Address of Executive Officer
|
|
Position(s)
Held
with Registrant
|
|
Term
of Office
and Length of
Time Served*
|
|
Principal
Occupation(s) During Past 5 Years
|
|
|
|
|
|
|
|
Randy Takian (34)
Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, NY 10036
|
|
President and
Principal
Executive
Officer
|
|
Since
September 2008
|
|
President and Principal
Executive Officer (since September 2008) of funds in the Fund Complex;
President and Chief Executive Officer of Morgan Stanley Services Company Inc.
(since September 2008). President of Morgan Stanley Investment Advisors
Inc. (since July 2008). Head of the Retail and Intermediary business
within Morgan Stanley Investment Management (since July 2008). Head of
Liquidity and Bank Trust business (since July 2008) and the Latin
American franchise (since July 2008) at Morgan Stanley Investment
Management. Managing Director, Director and/or Officer of the Adviser and
various entities affiliated with the Adviser. Formerly, Head of Strategy and
Product Development for the Alternatives Group and Senior Loan Investment
Management. Formerly with Bank of America (July 1996-March 2006),
most recently as Head of the Strategy, Mergers and Acquisitions team for
Global Wealth and Investment Management.
|
|
|
|
|
|
|
|
Kevin Klingert (46)
Morgan Stanley Investment Management
522 Fifth Avenue
New York, NY 10036
|
|
Vice President
|
|
Since
June 2008
|
|
Global Head, Chief
Operating Officer and acting Chief Investment Officer of the Global Fixed
Income Group of the Adviser and Morgan Stanley Investment Advisors Inc.
(since April 2008). Head of Global Liquidity Portfolio Management and
co-Head of Liquidity Credit Research of Morgan Stanley Investment Management
(since December 2007). Managing Director of the Adviser and Morgan
Stanley Investment Advisors Inc. (since December 2007). Previously,
Managing Director on the Management Committee and head of Municipal Portfolio
Management and Liquidity at BlackRock (October 1991 to
January 2007).
|
|
|
|
|
|
|
|
Amy R. Doberman (46)
Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, NY 10036
|
|
Vice President
|
|
Since
July 2004
|
|
Managing Director of
Morgan Stanley Investment Management (since July 2004); Vice President
of the Retail Funds and Institutional Funds (since July 2004); Vice
President of the Van Kampen Funds (since August 2004); Secretary (since
February 2006) and Managing Director (since July 2004) of the
Adviser and various entities affiliated with the Adviser. Formerly, Managing
Director and General Counsel Americas, UBS Global Asset Management
(July 2000-July 2004).
|
|
|
|
|
|
|
|
Carsten Otto (45)
Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, NY 10036
|
|
Chief Compliance Officer
|
|
Since
October 2004
|
|
Managing Director and Global
Head of Compliance for Morgan Stanley Investment Management (since
April 2007) and Chief Compliance Officer of the Retail Funds and
Institutional Funds (since October 2004). Formerly, U.S. Director of
Compliance (October 2004-April 2007) and Assistant Secretary and
Assistant General Counsel of the Retail Funds.
|
|
|
|
|
|
|
|
Stefanie V. Chang Yu
(42)
Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, NY 10036
|
|
Vice President
|
|
Since
December 1997
|
|
Managing Director of the
Adviser and various entities affiliated with the Adviser; Vice President of
the Retail Funds (since July 2002) and Institutional Funds (since
December 1997). Formerly, Secretary of various entities affiliated with
the Adviser.
|
|
|
|
|
|
|
|
Mary E. Mullin (41)
Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, NY 10036
|
|
Secretary
|
|
Since
June 1999
|
|
Executive Director of
the Adviser and various entities affiliated with the Adviser; Secretary of
the Retail Funds (since July 2003) and Institutional Funds (since
June 1999).
|
24
|
The Malaysia Fund, Inc.
|
|
|
|
December 31,
2008
|
Director and Officer
Information (contd)
Executive
Officers (contd):
Name,
Age and Address of Executive Officer
|
|
Position(s)
Held
with Registrant
|
|
Term
of Office
and Length of
Time Served*
|
|
Principal
Occupation(s) During Past 5 Years
|
|
|
|
|
|
|
|
James W. Garrett (40)
Morgan Stanley Investment Management Inc.
522 Fifth Avenue
New York, NY 10036
|
|
Treasurer and
Chief Financial
Officer
|
|
Treasurer since
February 2002
and Chief
Financial Officer
since July 2003
|
|
Head of Global Fund
Administration; Managing Director of the Adviser and various entities
affiliated with the Adviser; Treasurer and Chief Financial Officer of the
Institutional Funds.
|
|
|
|
|
|
|
|
*
|
This is the earliest date the Officer began serving
the Retail Funds or Institutional Funds. Each Officer serves an indefinite
term, until his or her successor is elected.
|
|
|
|
|
|
|
|
|
In accordance with Section 303A.
12(a) of the New York Stock Exchange Listed Company Manual, the Funds
Annual CEO Certification certifying as to compliance with NYSEs Corporate
Governance Listing Standards was submitted to the Exchange on October 3,
2008.
The Funds Principal
Executive Officer and Principal Financial Officer Certifications required by Section 302
of the Sarbanes-Oxley Act of 2002 were filed with the Funds N-CSR and are
available on the Securities and Exchange Commissions Website at
http://www.sec.gov.
25
The
Malaysia Fund, Inc.
Directors
|
|
Michael E. Nugent
|
Kevin Klingert
|
|
Vice President
|
Frank L. Bowman
|
|
|
Amy R. Doberman
|
Michael Bozic
|
Vice
President
|
|
|
Kathleen A. Dennis
|
Stefanie V. Chang Yu
|
|
Vice
President
|
James F. Higgins
|
|
|
James W. Garrett
|
Dr. Manuel H. Johnson
|
Treasurer and Chief
|
|
Financial Officer
|
Joseph J. Kearns
|
|
|
Carsten Otto
|
Michael F. Klein
|
Chief Compliance Officer
|
|
|
W. Allen Reed
|
Mary E. Mullin
|
|
Secretary
|
Fergus Reid
|
|
|
|
Officers
|
|
Michael E. Nugent
|
|
Chairman of the Board and
|
|
Director
|
|
|
|
Randy Takian
|
|
President and Principal
|
|
Executive Officer
|
|
Investment Adviser and Administrator
Morgan
Stanley Investment Management Inc.
522
Fifth Avenue
New
York, New York 10036
Custodian
JPMorgan
Chase Bank, N.A.
270
Park Avenue
New
York, New York 10017
Stockholder Servicing Agent
Computershare
Trust Company, N.A.
250
Royall Street
Canton,
Massachusetts 02021
Legal Counsel
Clifford
Chance US LLP
31
West 52nd Street
New
York, New York 10019-6131
Independent Registered Public Accounting Firm
Ernst &
Young LLP
200
Clarendon Street
Boston,
Massachusetts 02116
For
additional Fund information, including the Funds net asset value per share and
information regarding the investments comprising the Funds portfolio, please
call 1(800) 231-2608 or visit our website at www.morganstanley.com/msim. All
investments involve risks, including the possible loss of principal.
©
2009 Morgan Stanley
CEMFANN IU09-00634I-Y12/08
Item 2. Code of Ethics.
(a)
The
Fund has adopted a code of ethics (the Code of Ethics) that applies to its
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 Fund or a third party.
(b)
No
information need be disclosed pursuant to this paragraph.
(c)
Not
applicable.
(d)
Not
applicable.
(e)
Not
applicable.
(f)
(1)
The
Funds Code of Ethics is attached hereto as Exhibit 12 A.
(2)
Not
applicable.
(3)
Not
applicable.
Item 3.
Audit Committee Financial Expert.
The Funds Board of Trustees has determined that Joseph J. Kearns, an independent Trustee, is an audit committee financial expert serving on its audit committee. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an expert for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification.
Item 4. Principal Accountant
Fees and Services.
(a)(b)(c)(d) and (g). Based
on fees billed for the periods shown:
2008
|
|
Registrant
|
|
Covered Entities(1)
|
|
Audit
Fees
|
|
$
|
53,800
|
|
N/A
|
|
|
|
|
|
|
|
Non-Audit
Fees
|
|
|
|
|
|
Audit-Related
Fees
|
|
$
|
|
|
$
|
742,276
|
(2)
|
Tax Fees
|
|
$
|
3,380
|
(3)
|
$
|
99,522
|
(4)
|
All
Other Fees
|
|
$
|
|
|
$
|
246,887
|
(5)
|
Total
Non-Audit Fees
|
|
$
|
3,380
|
|
$
|
1,088,685
|
|
|
|
|
|
|
|
Total
|
|
$
|
57,180
|
|
$
|
1,088,685
|
|
2007
|
|
Registrant
|
|
Covered Entities(1)
|
|
Audit
Fees
|
|
$
|
40,200
|
|
N/A
|
|
|
|
|
|
|
|
Non-Audit
Fees
|
|
|
|
|
|
Audit-Related
Fees
|
|
$
|
|
|
$
|
731,800
|
(2)
|
Tax Fees
|
|
$
|
3,100
|
(3)
|
$
|
104,020
|
(4)
|
All
Other Fees
|
|
$
|
|
|
$
|
166,270
|
(5)
|
Total
Non-Audit Fees
|
|
$
|
3,100
|
|
$
|
1,002,090
|
|
|
|
|
|
|
|
Total
|
|
$
|
43,300
|
|
$
|
1,002,090
|
|
N/A- Not applicable, as not
required by Item 4.
(1)
Covered Entities include the Adviser (excluding sub-advisors) and any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Registrant.
(2)
Audit-Related Fees represent assurance and related services provided that are reasonably related to the performance of the audit of the financial statements of the Covered Entities and funds advised by the Adviser or its affiliates, specifically attestation services provided in connection with a SAS 70 Report and advisory consulting work.
(3)
Tax Fees represent tax advice and compliance services provided in connection with the review of the Registrants tax returns.
(4)
Tax Fees represent tax advice services provided to Covered Entities, including research and identification of PFIC entities.
(5)
All Other Fees represent attestation services provided in connection with performance presentation standards and a compliance review project performed
1
(e)(1) The audit
committees pre-approval policies and procedures are as follows:
APPENDIX A
AUDIT COMMITTEE
AUDIT AND NON-AUDIT SERVICES
PRE-APPROVAL POLICY AND PROCEDURES
OF THE
MORGAN STANLEY RETAIL AND INSTITUTIONAL FUNDS
AS ADOPTED AND AMENDED JULY 23, 2004,(1)
1.
Statement
of Principles
The Audit Committee of the Board is required
to review and, in its sole discretion, pre-approve all Covered Services to be
provided by the Independent Auditors to the Fund and Covered Entities in order
to assure that services performed by the Independent Auditors do not impair the
auditors independence from the Fund.
The SEC has issued rules specifying the
types of services that an independent auditor may not provide to its audit
client, as well as the audit committees administration of the engagement of
the independent auditor. The SECs rules establish
two different approaches to pre-approving services, which the SEC considers to
be equally valid. Proposed services
either: may be pre-approved without consideration of specific case-by-case
services by the Audit Committee (
general pre-approval
); or require the
specific pre-approval of the Audit Committee or its delegate (
specific
pre-approval
). The Audit Committee
believes that the combination of these two approaches in this Policy will
result in an effective and efficient procedure to pre-approve services
performed by the Independent Auditors.
As set forth in this Policy, unless a type of service has received
general pre-approval, it will require specific pre-approval by the Audit
Committee (or by any member of the Audit Committee to which pre-approval
authority has been delegated) if it is to be provided by the Independent
Auditors. Any proposed services
exceeding pre-approved cost levels or budgeted amounts will also require
specific pre-approval by the Audit Committee.
The appendices to this Policy describe the
Audit, Audit-related, Tax and All Other services that have the general
pre-approval of the Audit Committee. The
term of any general pre-approval is 12 months from the date of
pre-approval, unless the Audit Committee considers and provides a different
period and states otherwise. The Audit
Committee will annually review and pre-approve the services that may be
provided by the Independent Auditors without obtaining specific pre-approval
from the Audit Committee. The Audit
Committee will add to or subtract from the list of general pre-approved
services from time to time, based on subsequent determinations.
(1)
This Audit Committee
Audit and Non-Audit Services Pre-Approval Policy and Procedures (the
Policy
),
adopted as of the date above, supersedes and replaces all prior versions that
may have been adopted from time to time.
2
The purpose of this Policy is to set forth
the policy and procedures by which the Audit Committee intends to fulfill its
responsibilities. It does not delegate
the Audit Committees responsibilities to pre-approve services performed by the
Independent Auditors to management.
The Funds Independent Auditors have reviewed
this Policy and believes that implementation of the Policy will not adversely
affect the Independent Auditors independence.
2.
Delegation
As provided in the Act and the SECs rules,
the Audit Committee may delegate either type of pre-approval authority to one
or more of its members. The member to
whom such authority is delegated must report, for informational purposes only,
any pre-approval decisions to the Audit Committee at its next scheduled
meeting.
3.
Audit
Services
The annual Audit services engagement terms
and fees are subject to the specific pre-approval of the Audit Committee. Audit services include the annual financial
statement audit and other procedures required to be performed by the
Independent Auditors to be able to form an opinion on the Funds financial
statements. These other procedures
include information systems and procedural reviews and testing performed in
order to understand and place reliance on the systems of internal control, and
consultations relating to the audit. The
Audit Committee will approve, if necessary, any changes in terms, conditions
and fees resulting from changes in audit scope, Fund structure or other items.
In addition to the annual Audit services
engagement approved by the Audit Committee, the Audit Committee may grant
general pre-approval to other Audit services, which are those services that
only the Independent Auditors reasonably can provide. Other Audit services may include statutory
audits and services associated with SEC registration statements (on Forms N-1A,
N-2, N-3, N-4, etc.), periodic reports and other documents filed with the SEC
or other documents issued in connection with securities offerings.
The Audit Committee has pre-approved the
Audit services in Appendix B.1. All
other Audit services not listed in Appendix B.1 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
4.
Audit-related
Services
Audit-related services are assurance and
related services that are reasonably related to the performance of the audit or
review of the Funds financial statements and, to the extent they are Covered
Services, the Covered Entities or that are traditionally performed by the
Independent Auditors. Because the Audit
Committee believes that the provision of Audit-related services does not impair
the independence of the auditor and is consistent with the SECs rules on
auditor independence, the Audit Committee may grant general pre-approval to
Audit-related services. Audit-related
services include, among others, accounting consultations related to accounting,
financial reporting or disclosure matters
3
not classified as Audit services;
assistance with understanding and implementing new accounting and financial
reporting guidance from rulemaking authorities; agreed-upon or expanded audit
procedures related to accounting and/or billing records required to respond to
or comply with financial, accounting or regulatory reporting matters; and
assistance with internal control reporting requirements under Forms N-SAR
and/or N-CSR.
The Audit Committee has pre-approved the
Audit-related services in Appendix B.2.
All other Audit-related services not listed in Appendix B.2 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
5.
Tax
Services
The Audit Committee believes that the
Independent Auditors can provide Tax services to the Fund and, to the extent
they are Covered Services, the Covered Entities, such as tax compliance, tax
planning and tax advice without impairing the auditors independence, and the
SEC has stated that the Independent Auditors may provide such services.
Pursuant to the preceding paragraph, the
Audit Committee has pre-approved the Tax Services in Appendix B.3. All Tax services in Appendix B.3 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).
6.
All
Other Services
The Audit Committee believes, based on the
SECs rules prohibiting the Independent Auditors from providing specific
non-audit services, that other types of non-audit services are permitted. Accordingly, the Audit Committee believes it
may grant general pre-approval to those permissible non-audit services
classified as All Other services that it believes are routine and recurring
services, would not impair the independence of the auditor and are consistent
with the SECs rules on auditor independence.
The Audit Committee has pre-approved the All
Other services in Appendix B.4.
Permissible All Other services not listed in Appendix B.4 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).
7.
Pre-Approval
Fee Levels or Budgeted Amounts
Pre-approval fee levels or budgeted amounts
for all services to be provided by the Independent Auditors will be established
annually by the Audit Committee. Any
proposed services exceeding these levels or amounts will require specific
pre-approval by the Audit Committee. The
Audit Committee is mindful of the overall relationship of fees for audit and
non-audit services in determining whether to pre-approve any such services.
8.
Procedures
All requests or applications for services to
be provided by the Independent Auditors that do not require specific approval
by the Audit Committee will be submitted to the Funds Chief Financial Officer
and must include a detailed description of the services to be
4
rendered.
The Funds Chief Financial Officer will determine whether such services
are included within the list of services that have received the general
pre-approval of the Audit Committee. The
Audit Committee will be informed on a timely basis of any such services
rendered by the Independent Auditors.
Requests or applications to provide services that require specific
approval by the Audit Committee will be submitted to the Audit Committee by
both the Independent Auditors and the Funds Chief Financial Officer, and must
include a joint statement as to whether, in their view, the request or
application is consistent with the SECs rules on auditor independence.
The Audit Committee has designated the Funds
Chief Financial Officer to monitor the performance of all services provided by
the Independent Auditors and to determine whether such services are in
compliance with this Policy. The Funds
Chief Financial Officer will report to the Audit Committee on a periodic basis
on the results of its monitoring. Both
the Funds Chief Financial Officer and management will immediately report to
the chairman of the Audit Committee any breach of this Policy that comes to the
attention of the Funds Chief Financial Officer or any member of management.
9.
Additional
Requirements
The Audit Committee has determined to take
additional measures on an annual basis to meet its responsibility to oversee
the work of the Independent Auditors and to assure the auditors independence
from the Fund, such as reviewing a formal written statement from the
Independent Auditors delineating all relationships between the Independent
Auditors and the Fund, consistent with Independence Standards Board No. 1,
and discussing with the Independent Auditors its methods and procedures for
ensuring independence.
10.
Covered
Entities
Covered Entities include the Funds
investment adviser(s) and any entity controlling, controlled by or under
common control with the Funds investment adviser(s) that provides ongoing
services to the Fund(s). Beginning with
non-audit service contracts entered into on or after May 6, 2003, the
Funds audit committee must pre-approve non-audit services provided not only to
the Fund but also to the Covered Entities if the engagements relate directly to
the operations and financial reporting of the Fund. This list of Covered Entities would include:
Morgan Stanley Retail Funds
Morgan Stanley Investment Advisors Inc.
Morgan Stanley & Co. Incorporated
Morgan Stanley DW Inc.
Morgan Stanley Investment Management Inc.
Morgan Stanley Investment Management Limited
Morgan Stanley Investment Management Private Limited
Morgan Stanley Asset & Investment Trust Management Co.,
Limited
Morgan Stanley Investment Management Company
Van Kampen Asset Management
Morgan Stanley Services Company, Inc.
Morgan Stanley Distributors Inc.
Morgan Stanley Trust FSB
5
Morgan Stanley Institutional Funds
Morgan Stanley Investment Management Inc.
Morgan Stanley Investment Advisors Inc.
Morgan Stanley Investment Management Limited
Morgan Stanley Investment Management Private Limited
Morgan Stanley Asset & Investment Trust Management Co.,
Limited
Morgan Stanley Investment Management Company
Morgan Stanley & Co. Incorporated
Morgan Stanley Distribution, Inc.
Morgan Stanley AIP GP LP
Morgan Stanley Alternative Investment Partners LP
(e)(2)
Beginning
with non-audit service contracts entered into on or after May 6, 2003, the
audit committee also is required to pre-approve services to Covered Entities to
the extent that the services are determined to have a direct impact on the
operations or financial reporting of the Registrant. 100% of such services were
pre-approved by the audit committee pursuant to the Audit Committees
pre-approval policies and procedures (attached hereto).
(f) Not applicable.
(g) See table above.
(h) The audit committee
of the Board of Trustees has considered whether the provision of services other
than audit services performed by the auditors to the Registrant and Covered
Entities is compatible with maintaining the auditors independence in
performing audit services.
Item 5. Audit Committee of Listed Registrants.
(a) The Fund has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange
Act whose members are: Frank Joseph Kearns, Michael Nugent and Allen Reed.
(b) Not applicable.
Item 6. Schedule of Investments
(a) Refer to Item 1.
(b) Not used.
Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End Management Investment Companies.
6
APPROVED FEBRUARY 28, 2008
MORGAN STANLEY INVESTMENT MANAGEMENT
PROXY VOTING POLICY AND PROCEDURES
I.
POLICY
STATEMENT
Introduction
- Morgan Stanley Investment
Managements (MSIM) policy and procedures for voting proxies (Policy) with
respect to securities held in the accounts of clients applies to those MSIM
entities that provide discretionary investment management services and for
which an MSIM entity has authority to vote proxies. This Policy is reviewed and updated as
necessary to address new and evolving proxy voting issues and standards.
The MSIM entities covered by this Policy currently include the
following: Morgan Stanley Investment Advisors Inc., Morgan Stanley AIP GP LP,
Morgan Stanley Investment Management Inc., Morgan Stanley Investment Management
Limited, Morgan Stanley Investment Management Company, Morgan Stanley Asset &
Investment Trust Management Co., Limited, Morgan Stanley Investment Management
Private Limited, Van Kampen Asset Management, and Van Kampen Advisors Inc.
(each an MSIM Affiliate and collectively referred to as the MSIM Affiliates
or as we below).
Each MSIM Affiliate will use its best efforts to vote proxies as part
of its authority to manage, acquire and dispose of account assets. With respect
to the MSIM registered management investment companies (Van Kampen,
Institutional and Advisor Fundscollectively referred to herein as the MSIM
Funds), each MSIM Affiliate will vote proxies under this Policy pursuant to
authority granted under its applicable investment advisory agreement or, in the
absence of such authority, as authorized by the Board of Directors/Trustees of
the MSIM Funds. An MSIM Affiliate will not vote proxies if the named
fiduciary for an ERISA account has reserved the authority for itself, or in
the case of an account not governed by ERISA, the investment management or
investment advisory agreement does not authorize the MSIM Affiliate to vote
proxies. MSIM Affiliates will vote
proxies in a prudent and diligent manner and in the best interests of clients,
including beneficiaries of and participants in a clients benefit plan(s) for
which the MSIM Affiliates manage assets, consistent with the objective of
maximizing long-term investment returns (Client Proxy Standard). In certain situations, a client or its
fiduciary may provide an MSIM Affiliate with a proxy voting policy. In these situations, the MSIM Affiliate will
comply with the clients policy.
Proxy Research Services
- RiskMetrics Group
ISS Governance Services (ISS) and Glass Lewis (together with other proxy
research providers as we may retain from time to time, the Research
Providers) are independent advisers that specialize in providing a variety of
fiduciary-level proxy-related services to institutional investment managers,
plan sponsors, custodians, consultants, and other institutional investors. The services provided include in-depth
research, global issuer analysis, and voting recommendations. While we may
review and utilize the recommendations of the Research Providers in
7
making proxy voting decisions, we are in no way obligated to follow
such recommendations. In addition to research, ISS provides vote execution,
reporting, and recordkeeping.
Voting Proxies
for Certain Non-U.S. Companies
- Voting proxies of
companies located in some jurisdictions, particularly emerging markets, may
involve several problems that can restrict or prevent the ability to vote such
proxies or entail significant costs.
These problems include, but are not limited to: (i) proxy statements and ballots being
written in a language other than English; (ii) untimely and/or inadequate
notice of shareholder meetings; (iii) restrictions on the ability of
holders outside the issuers jurisdiction of organization to exercise votes; (iv) requirements
to vote proxies in person; (v) the imposition of restrictions on the sale
of the securities for a period of time in proximity to the shareholder meeting;
and (vi) requirements to provide local agents with power of attorney to
facilitate our voting instructions. As a
result, we vote clients non-U.S. proxies on a best efforts basis only, after
weighing the costs and benefits of voting such proxies, consistent with the
Client Proxy Standard. ISS has been
retained to provide assistance in connection with voting non-U.S. proxies.
II.
GENERAL
PROXY VOTING GUIDELINES
To promote
consistency in voting proxies on behalf of its clients, we follow this Policy
(subject to any exception set forth herein), including the guidelines set forth
below. These guidelines address a broad
range of issues, and provide general voting parameters on proposals that arise
most frequently. However, details of
specific proposals vary, and those details affect particular voting decisions,
as do factors specific to a given company. Pursuant to the procedures set forth
herein, we may vote in a manner that is not in accordance with the following
general guidelines, provided the vote is approved by the Proxy Review Committee
(see Section III for description) and is consistent with the Client Proxy
Standard. Morgan Stanley AIP GP LP will
follow the procedures as described in Appendix A.
We endeavor to
integrate governance and proxy voting policy with investment goals and to
follow the Client Proxy Standard for each client. At times, this may result in
split votes, for example when different clients have varying economic interests
in the outcome of a particular voting matter (such as a case in which varied
ownership interests in two companies involved in a merger result in different
stakes in the outcome). We also may
split votes at times based on differing views of portfolio managers, but such a
split vote must be approved by the Proxy Review Committee.
We may abstain
on matters for which disclosure is inadequate.
A.
Routine
Matters.
We generally support routine management
proposals. The following are examples of
routine management proposals:
·
Approval of
financial statements and auditor reports.
8
·
General
updating/corrective amendments to the charter, articles of association or
bylaws.
·
Most proposals
related to the conduct of the annual meeting, with the following
exceptions. We generally oppose
proposals that relate to the transaction of such other business which may come
before the meeting, and open-ended
requests for adjournment. However, where management specifically states
the reason for requesting an adjournment and the requested adjournment would
facilitate passage of a proposal that would otherwise be supported under this
Policy (i.e. an uncontested corporate transaction), the adjournment request
will be supported.
We generally support shareholder proposals
advocating confidential voting procedures and independent tabulation of voting
results.
B.
Board
of Directors
1.
Election of
directors
: In the absence of a proxy contest, we generally support the
boards nominees for director except as follows:
a.
We consider
withholding support from or voting against interested directors if the
companys board does not meet market standards for director independence, or if
otherwise we believe board independence is insufficient. We refer to prevalent market standards as
promulgated by a stock exchange or other authority within a given market (e.g.,
New York Stock Exchange or Nasdaq rules for most U.S. companies, and The
Combined Code on Corporate Governance in the United Kingdom). Thus, for an NYSE
company with no controlling shareholder, we would expect that at a minimum a
majority of directors should be independent as defined by NYSE. Where we view market standards as inadequate,
we may withhold votes based on stronger independence standards. Market
standards notwithstanding, we generally do not view long board tenure alone as
a basis to classify a director as non-independent, although lack of board
turnover and fresh perspective can be a negative factor in voting on directors.
i.
At a company
with a shareholder or group that controls the company by virtue of a majority
economic interest in the company, we have a reduced expectation for board
independence, although we believe the presence of independent directors can be
helpful, particularly in staffing the audit committee, and at times we may
withhold support from or vote against a nominee on the view the board or its
committees are not sufficiently independent.
ii.
We consider
withholding support from or voting against a nominee if he or she is affiliated
with a major shareholder that has representation on a board disproportionate to
its economic interest.
9
b.
Depending on market
standards, we consider withholding support from or voting against a nominee who
is interested and who is standing for election as a member of the companys
compensation, nominating or audit committee.
c.
We consider withholding support
from or voting against a nominee if we believe a direct conflict exists between
the interests of the nominee and the public shareholders, including failure to
meet fiduciary standards of care and/or loyalty. We may oppose directors where we conclude that
actions of directors are unlawful, unethical or negligent. We consider opposing individual board members
or an entire slate if we believe the board is entrenched and/or dealing
inadequately with performance problems, and/or acting with insufficient independence
between the board and management.
d.
We consider withholding
support from or voting against a nominee standing for election if the board has
not taken action to implement generally accepted governance practices for which
there is a bright line test. For
example, in the context of the U.S. market, failure to eliminate a dead hand or
slow hand poison pills would be seen as a basis for opposing one or more
incumbent nominees.
e.
In markets that encourage
designated audit committee financial experts, we consider voting against
members of an audit committee if no members are designated as such.
f.
We consider withholding
support from or voting against a nominee who has failed to attend at least 75%
of board meetings within a given year without a reasonable excuse.
g.
We consider withholding
support from or voting against a nominee who serves on the board of directors
of more than six companies (excluding investment companies). We also consider voting against a director
who otherwise appears to have too many commitments to serve adequately on the
board of the company.
2.
Board independence:
We generally support U.S. shareholder
proposals requiring that a certain percentage (up to 66
2
/
3
%) of the
companys board members be independent directors, and promoting all-independent
audit, compensation and nominating/governance committees.
3.
Board diversity:
We consider on a case-by-case basis
shareholder proposals urging diversity of board membership with respect to
social, religious or ethnic group.
10
4.
Majority voting:
We generally support proposals requesting or
requiring majority voting policies in election of directors, so long as there
is a carve-out for plurality voting in the case of contested elections.
5.
Proxy access:
We consider on a case-by-case basis
shareholder proposals to provide procedures for inclusion of shareholder
nominees in company proxy statements.
6.
Proposals to elect all
directors annually:
We generally
support proposals to elect all directors annually at public companies (to
declassify the Board of Directors) where such action is supported by the
board, and otherwise consider the issue on a case-by-case basis based in part
on overall takeover defenses at a company.
7.
Cumulative voting:
We generally support proposals to eliminate
cumulative voting in the U.S. market context. (Cumulative voting provides that
shareholders may concentrate their votes for one or a handful of candidates, a
system that can enable a minority bloc to place representation on a
board). U.S. proposals to establish
cumulative voting in the election of directors generally will not be supported.
8.
Separation of Chairman and
CEO positions:
We vote on
shareholder proposals to separate the Chairman and CEO positions and/or to
appoint a non-executive Chairman based in part on prevailing practice in
particular markets, since the context for such a practice varies. In many non-U.S. markets, we view separation
of the roles as a market standard practice, and support division of the roles
in that context.
9.
Director retirement age and
term limits:
Proposals
recommending set director retirement ages or director term limits are voted on
a case-by-case basis.
10.
Proposals to limit
directors liability and/or broaden indemnification of directors.
Generally, we will support such proposals provided that the officers and
directors are eligible for indemnification and liability protection if they
have acted in good faith on company business and were found innocent of any
civil or criminal charges for duties performed on behalf of the company.
C.
Corporate
transactions and proxy fights.
We examine
proposals relating to mergers, acquisitions and other special corporate
transactions (i.e., takeovers, spin-offs, sales of assets, reorganizations,
restructurings and recapitalizations) on a case-by-case basis. However, proposals for mergers or other
significant transactions that are friendly and approved by the Research
Providers generally will be supported and in those instances will not need to
be reviewed by the Proxy Review Committee, where there is no portfolio manager
objection and where there is no material conflict of interest. We also analyze proxy contests on a
case-by-case basis.
11
D.
Changes
in capital structure.
1.
We generally support the
following:
·
Management and shareholder
proposals aimed at eliminating unequal voting rights, assuming fair economic
treatment of classes of shares we hold.
·
Management
proposals to increase the authorization of existing classes of common stock (or
securities convertible into common stock) if: (i) a clear business purpose
is stated that we can support and the number of shares requested is reasonable
in relation to the purpose for which authorization is requested; and/or (ii) the
authorization does not exceed 100% of shares currently authorized and at least
30% of the total new authorization will be outstanding.
·
Management
proposals to create a new class of preferred stock or for issuances of
preferred stock up to 50% of issued capital, unless we have concerns about use
of the authority for anti-takeover purposes.
·
Management
proposals to authorize share repurchase plans, except in some cases in which we
believe there are insufficient protections against use of an authorization for
anti-takeover purposes.
·
Management proposals to
reduce the number of authorized shares of common or preferred stock, or to
eliminate classes of preferred stock.
·
Management proposals to
effect stock splits.
·
Management proposals to effect reverse stock
splits if management proportionately reduces the authorized share amount set
forth in the corporate charter. Reverse
stock splits that do not adjust proportionately to the authorized share amount
generally will be approved if the resulting increase in authorized shares
coincides with the proxy guidelines set forth above for common stock increases.
·
Management proposals for
higher dividend payouts.
2.
We generally oppose the
following (notwithstanding management support):
·
Proposals to add classes of stock that would
substantially dilute the voting interests of existing shareholders.
·
Proposals to increase the authorized or
issued number of shares of existing classes of stock that are unreasonably
dilutive, particularly if there are no preemptive rights for existing
shareholders.
12
·
Proposals that authorize share issuance at a
discount to market rates, except where authority for such issuance is de
minimis, or if there is a special situation that we believe justifies such
authorization (as may be the case, for example, at a company under severe
stress and risk of bankruptcy).
·
Proposals relating to changes in capitalization
by 100% or more.
We
consider on a case-by-case basis shareholder proposals to increase dividend
payout ratios, in light of market practice and perceived market weaknesses, as
well as individual company payout history and current circumstances. For example, currently we perceive low
payouts to shareholders as a concern at some Japanese companies, but may deem a
low payout ratio as appropriate for a growth company making good use of its
cash, notwithstanding the broader market concern.
E.
Takeover
Defenses and Shareholder Rights
1.
Shareholder rights plans:
We generally support proposals to require
shareholder approval or ratification of shareholder rights plans (poison
pills). In voting on rights plans or
similar takeover defenses, we consider on a case-by-case basis whether the
company has demonstrated a need for the defense in the context of promoting
long-term share value; whether provisions of the defense are in line with
generally accepted governance principles; and the specific context if the
proposal is made in the midst of a takeover bid or contest for control.
2.
Supermajority voting
requirements:
We generally oppose requirements for supermajority
votes to amend the charter or bylaws, unless the provisions protect minority
shareholders where there is a large shareholder. In line with this view, in the absence of a
large shareholder we support reasonable shareholder proposals to limit such
supermajority voting requirements.
3.
Shareholder rights to call
meetings:
We consider
proposals to enhance shareholder rights to call meetings on a case-by-case
basis.
4.
Reincorporation:
We consider
management and shareholder proposals to reincorporate to a different
jurisdiction on a case-by-case basis. We
oppose such proposals if we believe the main purpose is to take advantage of
laws or judicial precedents that reduce shareholder rights.
5.
Anti-greenmail provisions:
Proposals
relating to the adoption of anti-greenmail provisions will be supported,
provided that the proposal: (i) defines greenmail; (ii) prohibits
buyback offers to large block holders (holders of at least 1% of the
outstanding shares and in certain cases, a greater amount, as determined by the
Proxy Review Committee) not made to all shareholders or not approved by
disinterested shareholders; and (iii) contains no anti-takeover measures
or other provisions restricting the rights of shareholders.
13
6.
Bundled proposals:
We may consider opposing or abstaining on
proposals if disparate issues are bundled and presented for a single vote.
F.
Auditors.
We generally support
management proposals for selection or ratification of independent
auditors. However, we may consider
opposing such proposals with reference to incumbent audit firms if the company
has suffered from serious accounting irregularities and we believe rotation of
the audit firm is appropriate, or if fees paid to the auditor for
non-audit-related services are excessive.
Generally, to determine if non-audit fees are excessive, a 50% test will
be applied (i.e., non-audit-related fees should be less than 50% of the total
fees paid to the auditor). We generally vote against proposals to indemnify
auditors.
G.
Executive
and Director Remuneration.
1.
We generally support the
following proposals:
·
Proposals for employee
equity compensation plans and other employee ownership plans, provided that our
research does not indicate that approval of the plan would be against
shareholder interest. Such approval may
be against shareholder interest if it authorizes excessive dilution and
shareholder cost, particularly in the context of high usage (run rate) of
equity compensation in the recent past; or if there are objectionable plan
design and provisions.
·
Proposals relating to fees
to outside directors, provided the amounts are not excessive relative to other
companies in the country or industry, and provided that the structure is
appropriate within the market context.
While stock-based compensation to outside directors is positive if
moderate and appropriately structured, we are wary of significant stock option
awards or other performance-based awards for outside directors, as well as
provisions that could result in significant forfeiture of value on a directors
decision to resign from a board (such forfeiture can undercut director
independence).
·
Proposals for employee stock
purchase plans that permit discounts up to 15%, but only for grants that are
part of a broad-based employee plan, including all non-executive employees.
·
Proposals for the establishment
of employee retirement and severance plans, provided that our research does not
indicate that approval of the plan would be against shareholder interest.
14
2.
Shareholder proposals
requiring shareholder approval of all severance agreements will not be
supported, but proposals that require shareholder approval for agreements in
excess of three times the annual compensation (salary and bonus) generally will
be supported. We generally oppose shareholder proposals that would establish
arbitrary caps on pay. We consider on a
case-by-case basis shareholder proposals that seek to limit Supplemental
Executive Retirement Plans (SERPs), but support such proposals where we
consider SERPs to be excessive.
3.
Shareholder proposals
advocating stronger and/or particular pay-for-performance models will be
evaluated on a case-by-case basis, with consideration of the merits of the
individual proposal within the context of the particular company and its labor
markets, and the companys current and past practices. While we generally support emphasis on
long-term components of senior executive pay and strong linkage of pay to
performance, we consider whether a proposal may be overly prescriptive, and the
impact of the proposal, if implemented as written, on recruitment and
retention.
4.
We consider shareholder
proposals for U.K.-style advisory votes on pay on a case-by-case basis.
5.
We generally support
proposals advocating reasonable senior executive and director stock ownership
guidelines and holding requirements for shares gained in option exercises.
6.
Management proposals
effectively to re-price stock options are considered on a case-by-case
basis. Considerations include the
companys reasons and justifications for a re-pricing, the companys
competitive position, whether senior executives and outside directors are
excluded, potential cost to shareholders, whether the re-pricing or share
exchange is on a value-for-value basis, and whether vesting requirements are
extended.
H.
Social,
Political and Environmental Issues.
We consider
proposals relating to social, political and environmental issues on a
case-by-case basis to determine whether they will have a financial impact on
shareholder value. However, we generally vote against proposals requesting
reports that are duplicative, related to matters not material to the business,
or that would impose unnecessary or excessive costs. We may abstain from voting
on proposals that do not have a readily determinable financial impact on
shareholder value. We generally oppose proposals requiring adherence to
workplace standards that are not required or customary in market(s) to
which the proposals relate.
15
I.
Fund of
Funds
.
Certain
Funds advised by an MSIM Affiliate invest only in other MSIM Funds. If an underlying fund has a shareholder
meeting, in order to avoid any potential conflict of interest, such proposals
will be voted in the same proportion as the votes of the other shareholders of
the underlying fund, unless otherwise determined by the Proxy Review Committee.
III.
ADMINISTRATION
OF POLICY
The MSIM Proxy Review
Committee (the Committee) has overall responsibility for creating and
implementing the Policy, working with an MSIM staff group (the Corporate
Governance Team). The Committee, which
is appointed by MSIMs Chief Investment Officer of Global Equities (CIO),
consists of senior investment professionals who represent the different
investment disciplines and geographic locations of the firm. Because proxy voting is an investment
responsibility and impacts shareholder value, and because of their knowledge of
companies and markets, portfolio managers and other members of investment staff
play a key role in proxy voting, although the Committee has final authority
over proxy votes.
The Committee Chairperson is
the head of the Corporate Governance Team, and is responsible for identifying
issues that require Committee deliberation or ratification. The Corporate
Governance Team, working with advice of investment teams and the Committee, is
responsible for voting on routine items and on matters that can be addressed in
line with these Policy guidelines. The
Corporate Governance Team has responsibility for voting case-by-case where
guidelines and precedent provide adequate guidance, and to refer other
case-by-case decisions to the Proxy Review Committee.
The Committee will
periodically review and have the authority to amend, as necessary, the Policy
and establish and direct voting positions consistent with the Client Proxy
Standard.
A.
Committee
Procedures
The
Committee will meet at least monthly to (among other matters) address any
outstanding issues relating to the Policy or its implementation. The Corporate
Governance Team will timely communicate to ISS MSIMs Policy (and any
amendments and/or any additional guidelines or procedures the Committee may
adopt).
The
Committee will meet on an ad hoc basis to (among other matters): (1) authorize
split voting (i.e., allowing certain shares of the same issuer that are the
subject of the same proxy solicitation and held by one or more MSIM portfolios
to be voted differently than other shares) and/or override voting (i.e.,
voting all MSIM portfolio shares in a manner contrary to the Policy); (2) review
and approve upcoming votes, as appropriate, for matters for which specific
direction has been provided in this Policy; and (3) determine how to vote
matters for which specific direction has not been provided in this Policy.
16
Members
of the Committee may take into account Research Providers recommendations and
research as well as any other relevant information they may request or receive,
including portfolio manager and/or analyst research, as applicable.
Generally, proxies related to securities held in accounts that are managed
pursuant to quantitative, index or index-like strategies (Index Strategies)
will be voted in the same manner as those held in actively managed accounts,
unless economic interests of the accounts differ. Because accounts
managed using Index Strategies are passively managed accounts, research from
portfolio managers and/or analysts related to securities held in these accounts
may not be available. If the affected securities are held only in
accounts that are managed pursuant to Index Strategies, and the proxy relates
to a matter that is not described in this Policy, the Committee will consider
all available information from the Research Providers, and to the extent that
the holdings are significant, from the portfolio managers and/or analysts.
B.
Material
Conflicts of Interest
In
addition to the procedures discussed above, if the Committee determines that an
issue raises a material conflict of interest, the Committee will request a
special committee to review, and recommend a course of action with respect to,
the conflict(s) in question (Special Committee).
The
Special Committee shall be comprised of the Chairperson of the Proxy Review
Committee, the Chief Compliance Officer or his/her designee, a senior portfolio
manager (if practicable, one who is a member of the Proxy Review Committee)
designated by the Proxy Review Committee, and MSIMs relevant Chief Investment
Officer or his/her designee, and any other persons deemed necessary by the
Chairperson. The Special Committee may request the assistance of MSIMs General
Counsel or his/her designee who will have sole discretion to cast a vote. In addition to the research provided by
Research Providers, the Special Committee may request analysis from MSIM
Affiliate investment professionals and outside sources to the extent it deems
appropriate.
C.
Identification
of Material Conflicts of Interest
A potential material
conflict of interest could exist in the following situations, among others:
1.
The issuer
soliciting the vote is a client of MSIM or an affiliate of MSIM and the vote is
on a material matter affecting the issuer.
2.
The proxy
relates to Morgan Stanley common stock or any other security issued by Morgan
Stanley or its affiliates except if echo voting is used, as with MSIM Funds, as
described herein.
3.
Morgan Stanley
has a material pecuniary interest in the matter submitted for a vote (e.g.,
acting as a financial advisor to a party to a merger or acquisition for which
Morgan Stanley will be paid a success fee if completed).
17
If the Chairperson of the
Committee determines that an issue raises a potential material conflict of
interest, depending on the facts and circumstances, the Chairperson will
address the issue as follows:
1.
If the matter
relates to a topic that is discussed in this Policy, the proposal will be voted
as per the Policy.
2.
If the matter
is not discussed in this Policy or the Policy indicates that the issue is to be
decided case-by-case, the proposal will be voted in a manner consistent with
the Research Providers, provided that all the Research Providers have the same
recommendation, no portfolio manager objects to that vote, and the vote is
consistent with MSIMs Client Proxy Standard.
3.
If the Research
Providers recommendations differ, the Chairperson will refer the matter to the
Committee to vote on the proposal. If
the Committee determines that an issue raises a material conflict of interest,
the Committee will request a Special Committee to review and recommend a course
of action, as described above.
Notwithstanding the above, the Chairperson of the Committee may request
a Special Committee to review a matter at any time as he/she deems necessary to
resolve a conflict.
D.
Proxy
Voting Reporting
The
Committee and the Special Committee, or their designee(s), will document in
writing all of their decisions and actions, which documentation will be
maintained by the Committee and the Special Committee, or their designee(s),
for a period of at least 6 years. To the
extent these decisions relate to a security held by an MSIM Fund, the Committee
and Special Committee, or their designee(s), will report their decisions to
each applicable Board of Trustees/Directors of those Funds at each Boards next
regularly scheduled Board meeting. The report will contain information
concerning decisions made by the Committee and Special Committee during the
most recently ended calendar quarter immediately preceding the Board meeting.
The
Corporate Governance Team will timely communicate to applicable portfolio
managers and to ISS, decisions of the Committee and Special Committee so that,
among other things, ISS will vote proxies consistent with their decisions.
MSIM will promptly provide a
copy of this Policy to any client requesting it. MSIM will also, upon client
request, promptly provide a report indicating how each proxy was voted with
respect to securities held in that clients account.
MSIMs Legal Department is
responsible for filing an annual Form N-PX on behalf of each MSIM Fund for
which such filing is required, indicating how all proxies were voted with
respect to such Funds holdings.
18
APPENDIX
A
The
following procedures apply to accounts managed by Morgan Stanley AIP GP LP
(AIP).
Generally,
AIP will follow the guidelines set forth in Section II of MSIMs Proxy
Voting Policy and Procedures. To the
extent that such guidelines do not provide specific direction, or AIP
determines that consistent with the Client Proxy Standard, the guidelines
should not be followed, the Proxy Review Committee has delegated the voting
authority to vote securities held by accounts managed by AIP to the Liquid
Markets investment team and the Private Markets investment team of AIP. A summary of decisions made by the investment
teams will be made available to the Proxy Review Committee for its information
at the next scheduled meeting of the Proxy Review Committee.
In
certain cases, AIP may determine to abstain from determining (or recommending)
how a proxy should be voted (and therefore abstain from voting such proxy or
recommending how such proxy should be voted), such as where the expected cost
of giving due consideration to the proxy does not justify the potential
benefits to the affected account(s) that might result from adopting or
rejecting (as the case may be) the measure in question.
Waiver
of Voting Rights
For
regulatory reasons, AIP may either 1) invest in a class of securities of an
underlying fund (the Fund) that does not provide for voting rights; or 2)
waive 100% of its voting rights with respect to the following:
1.
Any rights with
respect to the removal or replacement of a director, general partner, managing
member or other person acting in a similar capacity for or on behalf of the
Fund (each individually a Designated Person, and collectively, the
Designated Persons), which may include, but are not limited to, voting on the
election or removal of a Designated Person in the event of such Designated
Persons death, disability, insolvency, bankruptcy, incapacity, or other event
requiring a vote of interest holders of the Fund to remove or replace a
Designated Person; and
2.
Any rights in
connection with a determination to renew, dissolve, liquidate, or otherwise
terminate or continue the Fund, which may include, but are not limited to,
voting on the renewal, dissolution, liquidation, termination or continuance of
the Fund upon the occurrence of an event described in the Funds organizational
documents;
provided
,
however
, that, if the Funds organizational
documents require the consent of the Funds general partner or manager, as the
case may be, for any such termination or continuation of the Fund to be
effective, then AIP may exercise its voting rights with respect to such
matter.
19
APPENDIX B
The
following procedures apply to the portion of the Van Kampen Dynamic Credit
Opportunities Fund (VK Fund) sub advised by Avenue Europe International
Management, L.P. (Avenue). (
The portion of the VK Fund managed solely by Van
Kampen Asset Management will continue to be subject to MSIMs Policy.)
1.
Generally
: With respect to Avenues portion of the VK
Fund, the Board of Trustees of the VK Fund will retain sole authority and
responsibility for proxy voting.
The Advisers involvement in the voting process of
Avenues portion of the VK Fund is a purely administrative function, and serves
to execute and deliver the proxy voting decisions made by the VK Fund Board in
connection with the Avenue portion of the VK Fund, which may, from time to
time, include related administrative tasks such as receiving proxies, following
up on missing proxies, and collecting data related to proxies. As such, the Adviser shall not be deemed to
have voting power or shared voting power with Avenue with respect to Avenues
portion of the Fund.
2.
Voting Guidelines
: All proxies, with respect to
Avenues portion of the VK Fund, will be considered by the VK Fund Board or
such subcommittee as the VK Fund Board may designate from time to time for
determination and voting approval. The
VK Board or its subcommittee will timely communicate to MSIMs Corporate
Governance Group its proxy voting decisions, so that among other things the
votes will be effected consistent with the VK Boards authority.
3.
Administration
: The VK Board or its
subcommittee will meet on an adhoc basis as may be required from time to time
to review proxies that require its review and determination. The VK Board or its subcommittee will
document in writing all of its decisions and actions which will be maintained
by the VK Fund, or its designee(s), for a period of at least 6 years. If a subcommittee is designated, a summary of
decisions made by such subcommittee will be made available to the full VK Board
for its information at its next scheduled respective meetings.
20
Item
8. Portfolio Managers of Closed-End Management Investment Companies
FUND MANAGEMENT
The Fund is managed by members of the Emerging Markets Equity team. The team consists of portfolio managers and analysts. Current members of the team jointly and primarily responsible for the day-to-day management of the Funds portfolio are James Cheng, a Managing Director of the Sub-Adviser, Munib Madni, an Executive Director of the Sub-Adviser, and Ruchir Sharma, a Managing Director of the Adviser. Mr. Cheng has been associated with the Sub-Adviser in an investment management capacity since July 2006 and joined the team managing the Fund in August 2008. Prior to July 2006, Mr. Cheng worked in an investment management capacity at Invesco Asia Limited, Asia Strategic Investment Management Limited and Munich Re Asia Capital Management. Mr. Munib has been associated with the Sub-Adviser in an investment management capacity since February 2005 and joined the team managing the Fund in August 2008. Prior to August 2008, Mr. Munib was associate director of Australian equities at Aberdeen Asset Management (December 2000 to January 2005). Previously, he was a portfolio manager, Australian equities, at Equitilink Investment Management (December 1994 to December 2000). Mr. Sharma has been associated with the Adviser in an investment management capacity since 1996 and joined the team managing the Fund in August 2008.
The composition of the team may change without notice from time to time.
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGER
The following information is as of December 31, 2008.
Mr. Cheng managed eight registered investment companies with a total of approximately $3 billion in assets; one pooled investment vehicle other than registered investment companies with a total of approximately $3.3 million in assets; and five other accounts with a total of approximately $3.9 billion in assets. Of these other accounts, one account with a total of approximately $300 million in assets had performance based fees.
Mr. Munib managed three registered investment companies with a total of approximately $162.2 million in assets; no pooled investment vehicles other than registered investment companies; and three other accounts with a total of approximately $179.7 million in assets. Of these other accounts, two accounts with a total of approximately $13.7 million in assets had performance based fees.
Mr. Sharma managed 14 registered investment companies with a total of approximately $4.1 billion in assets; five pooled investment vehicles other than registered investment companies with a total of approximately $1.7 billion in assets; and 23 other accounts with a total of approximately $7.3 billion in assets. Of these other accounts, four accounts with a total of approximately $1.1 billion in assets, had performance based fees.
21
Because
the portfolio manager manages assets for other investment companies, pooled
investment vehicles, and/or other accounts (including institutional clients,
pension plans and certain high net worth individuals), there may be an
incentive to favor one client over another resulting in conflicts of interest.
For instance, the Adviser and/or Sub-Adviser may receive fees from certain
accounts that are higher than the fee it receives from the Fund, or it may
receive a performance-based fee on certain accounts. In those instances, the
portfolio managers may have an incentive to favor the higher and/or
performance-based fee accounts over the Fund.
In addition, a conflict of interest could exist to the extent the
Adviser and/or Sub-Adviser has proprietary investments in certain accounts,
where portfolio managers have personal investments in certain accounts or when
certain accounts are investment options in the Advisers and/or Sub-Advisers
employee benefits and/or deferred compensation plans. The portfolio manager may have an incentive
to favor these accounts over others. If
the Adviser and/or Sub-Adviser manage accounts that engage in short sales of
securities of the type in which the Fund invests, the Adviser and/or
Sub-Adviser could be seen as harming the performance of the Fund for the
benefit of the accounts engaged in short sales if the short sales cause the
market value of the securities to fall.
The Adviser has adopted trade allocation and other policies and
procedures that it believes are reasonably designed to address these and other
conflicts of interest.
PORTFOLIO MANAGER COMPENSATION
STRUCTURE
Portfolio
managers receive a combination of base compensation and discretionary
compensation, comprised of a cash bonus and several deferred compensation
programs described below. The methodology used to determine portfolio manager
compensation is applied across all accounts managed by the portfolio managers.
BASE
SALARY COMPENSATION. Generally, portfolio managers receive base salary
compensation based on the level of their position with the Adviser and/or Sub-Adviser.
DISCRETIONARY
COMPENSATION. In addition to base compensation, portfolio managers may receive
discretionary compensation.
Discretionary
compensation can include:
·
Cash Bonus;
·
Morgan Stanleys Long-Term Incentive Compensation
Program awards a mandatory program that defers a portion of discretionary
year-end compensation into restricted stock units or other awards or other
investments based on Morgan Stanley common stock that are subject to vesting
and other conditions;
·
Investment Management Alignment Plan (IMAP) awards
a mandatory program that defers a portion of discretionary year-end
compensation and notionally invests it in designated funds advised by the
Adviser and/or Sub-Adviser or its affiliates. The award is subject to vesting and
other conditions. Portfolio managers must notionally invest a
22
minimum
of 25% to a maximum of 100% of their IMAP deferral account into a combination
of the designated open-end funds they manage that are included in the IMAP Fund
menu;
·
Voluntary Deferred Compensation Plans voluntary
programs that permit certain employees to elect to defer a portion of their
discretionary year-end compensation and directly or notionally invest the
deferred amount across a range of designated investment funds, including funds
advised by the Adviser or its affiliates.
Several
factors determine discretionary compensation, which can vary by portfolio
management team and circumstances. In order of relative importance, these
factors include:
·
Investment performance. A portfolio managers
compensation is linked to the pre-tax investment performance of the
funds/accounts managed by the portfolio manager. Investment performance is
calculated for one-, three- and five-year periods measured against an
appropriate securities market index (or indices) for the funds/accounts managed
by the portfolio manager. The assets managed by the portfolio managers in
funds, pooled investment vehicles and other accounts are described in Other
Accounts Managed by the Portfolio Managers above. Generally, the greatest
weight is placed on the three- and five-year periods.
·
Revenues generated by the investment companies,
pooled investment vehicles and other accounts managed by the portfolio manager.
·
Contribution to the business objectives of the
Adviser and/or Sub-Adviser.
·
The dollar amount of assets managed by the
portfolio manager.
·
Market compensation survey research by independent
third parties.
·
Other qualitative factors, such as contributions to
client objectives.
·
Performance of Morgan Stanley and Morgan Stanley
Investment Management Inc., and the overall performance of the investment team(s) of
which the portfolio is a member.
SECURITIES OWNERSHIP OF PORTFOLIO
MANAGERS
As
of December 31, 2008, the portfolio managers did not own any shares of the
Fund.
23
Item
9. Closed-End Fund Repurchases
The
Malaysia Fund, Inc.*
|
|
|
|
|
|
TOTAL NUMBER OF
|
|
|
|
|
|
|
|
|
|
SHARES PURCHASED AS
|
|
MAXIMUM NUMBER
|
|
|
|
|
|
|
|
PART OF PUBLICLY
|
|
OF SHARES THAT MAY YET
|
|
|
|
TOTAL NUMBER OF
|
|
AVERAGE PRICE
|
|
ANNOUNCED PLANS
|
|
BE PURCHASED UNDER
|
|
Period
|
|
SHARES PURCHASED
|
|
PAID PER SHARE
|
|
OR PROGRAMS
|
|
THE PLANS OR PROGRAMS
|
|
July
|
|
|
|
|
|
|
|
Unlimited
|
|
August
|
|
|
|
|
|
|
|
Unlimited
|
|
September
|
|
|
|
|
|
|
|
Unlimited
|
|
October
|
|
|
|
|
|
|
|
Unlimited
|
|
November
|
|
7,300
|
|
$
|
5.20
|
|
7,300
|
|
Unlimited
|
|
December
|
|
|
|
|
|
|
|
Unlimited
|
|
|
|
|
|
|
|
|
|
|
|
|
* The Share Repurchase
Program commenced on 7/15/2002.
The Fund expects to continue
to repurchase its outstanding shares at such time and in such amounts as it
believes will further the accomplishment of the foregoing objectives, subject
to review by the Board of Directors.
Item
10. Submission of Matters to a Vote of Security Holders
Not
applicable.
Item
11. Controls and Procedures
(a)
The Funds principal executive officer and principal financial officer have
concluded that the Funds disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Fund in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commissions rules and forms,
based upon such officers evaluation of these controls and procedures as of a
date within 90 days of the filing date of the report.
(b)
There were no changes in the registrants internal control over financial
reporting that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrants internal control over financial reporting.
Item
12. Exhibits
(a) The
Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.
(b) A
separate certification for each principal executive officer and principal
financial officer of the registrant are attached hereto as part of EX-99.CERT.
24
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
Malaysia Fund, Inc.
|
|
By:
|
/s/
Randy Takian
|
|
Name:
|
Randy
Takian
|
Title:
|
Principal
Executive Officer
|
Date:
|
February
19, 2009
|
|
|
|
|
Pursuant to the requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940, this report has been
signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By:
|
/s/
Randy Takian
|
|
Name:
|
Randy
Takian
|
Title:
|
Principal
Executive Officer
|
Date:
|
February
19, 2009
|
|
|
|
|
By:
|
/s/
James W. Garrett
|
|
Name:
|
James
W. Garrett
|
Title:
|
Principal
Financial Officer
|
Date:
|
February
19, 2009
|
|
|
|
|
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