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: 811-04893

 

 

THE TAIWAN FUND, INC.

(Exact name of registrant as specified in charter)

 

 

C/O STATE STREET BANK AND TRUST COMPANY,

2 AVENUE DE LAFAYETTE, P.O. BOX 5049,

BOSTON, 02111

(Address of principal executive offices)(Zip code)

 

 

 

(Name and Address of Agent for Service)		Copy to:
State Street Bank and Trust Company		Leonard B. Mackey, Jr., Esq.
Attention: Tracie A. Coop		Clifford Chance US LLP
Secretary		31 West 52nd Street
4 Copley Place, 5th Floor		New York, New York 10019-6131
Boston, Massachusetts 02116

 

 

Registrant’s telephone number, including area code: 1 (877) 864-5056

Date of fiscal year end: August 31

Date of reporting period: February 28, 2013

 

 

 

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Item 1. Report to Stockholders.

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CHAIRMAN’S STATEMENT

 

 

 

Dear Stockholders,

It has been a volatile six months for Taiwan’s markets, and for The Taiwan Fund, Inc. (the “Fund”) itself. For much of the period, global macroeconomic factors affected the markets, with uncertainty over the “fiscal cliff” in the United States and the Chinese leadership transition at times overshadowing bullish investor sentiment.

As is described in the Report of the Investment Manager, the Fund produced a healthy absolute return over the review period, but finished a little behind the benchmark Taiwan Stock Exchange Index (“TAIEX”). Not holding Taiwan Semiconductor Manufacturing Company (TSMC), by far the largest constituent of the TAIEX, cost 1.8 percentage points of relative performance — more than the shortfall between the Fund and its benchmark over the six months. However, the investment manager believes that, on the basis of its fundamentals, TSMC does not currently merit a place in a high-conviction portfolio such as ours. Decisions like this go to the heart of active fund management. This time it cost some relative performance, but in the long term we are confident that the Fund will be the stronger for it.

I hope that my statement in the Annual Report in six month’s time will reflect continuing strong absolute returns.

On behalf of the Board, I would like to thank you for your continuing support of The Taiwan Fund, Inc.

Sincerely,

 

Joe O. Rogers

Chairman

 

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REPORT OF THE INVESTMENT MANAGER

 

 

 

Review

This was a positive period for the Taiwanese market, which rose 7.9% in the six months ended February 28, 2013. It was a volatile period, however. In September the US Federal Reserve announced a third-round of quantitative easing, and global markets rallied in anticipation of a fresh wave of liquidity to riskier assets. The Taiwanese market was no exception, rising 6.6% in the month. In October, though, Taiwan equities saw all those gains eroded. Despite improving global economic indicators, the index fell 6.8% over the month, amid low trading volume. Taiwan’s capital gains tax (CGT), which is to be implemented this year, and extra tax on stock transactions in the calculation of national health insurance premiums also reduced the general appetite for stock trading. But things improved markedly in November, with Taiwanese equities staging a strong rebound late in the month thanks to the government’s market-supporting initiatives. In early February, Taiwan’s cabinet stepped down after ex-Premier Sean Chen resigned on health grounds. This paved the way for a reshuffle that President Ma touted as adding new skills and capability to his government. New Premier Jiang Yi-huah is tasked with boosting the island’s economy and pushing through government and economic structural reforms.

Over the review period as a whole, the Fund underperformed the index, returning 5.8%. The largest detractor from relative performance was not holding electronics manufacturer Taiwan Semiconductor. Of stocks held, shipping and department store chain company, First Steamship, and adhesive-tape and packaging-materials manufacturer Yem Chio were negative contributors to returns, as was PC Home Online.

On the positive side, property developer Ruentex Development and Advantech, the industrial PC manufacturer, were the most significant positive contributors, followed by Acter, the constructor of electrical and biomedical facilities.

During the period we initiated new holdings in King Slide Works (a maker of highly customized server rail kits), Lumax International (Taiwan’s largest process-control equipment vendor) and security companies Taiwan Secom and Taiwan-Sogo

 

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Shin Kong Security. On the sales side, positions closed included concrete-pipe manufacturer Wei Mon Industry and surveillance-system provider Geo Vision.

Outlook

The review period saw a number of events that bode well for strengthened cross-strait economic ties, particularly the inaugural meeting between Taiwan’s Financial Supervisory Commission and mainland China’s Securities Regulatory Commission. Financial regulators have reached agreement on a series of measures to open China’s mainland markets for investment, with China permitting investment quotas of 100 billion yuan. Brokers in Taiwan may own up to 51% of joint ventures under the new rules, while Taiwan will raise the limit for Chinese investment in Taiwan to US$1 billion.

Meanwhile, the financial-services sector came to investors’ attention when domestic banking units in Taiwan officially opened for yuan-denominated business on February 6, 2013. The third cross-strait banking supervision meeting will be held in late March, and the focus is expected to be on deregulation of equity investment for the banking sector.

Economic data has also been encouraging, with the news that Taiwan’s economy expanded faster than expected in the last quarter of 2012. The 3.4% growth rate was the strongest in five quarters, thanks to strong consumption and improved demand for the island’s electronic exports. The government raised its full-year economic growth forecast for 2013 to 3.5% from 3.2%, but warned at the same time that global economic growth momentum remained weak.

Lastly, this stock market reacts a shade too much to political developments, rumors, sentiment and short-term factors, we remain convinced that the best way to outperform it over the long term is by constructing a diversified portfolio of fundamentally strong companies, all chosen for their growth prospects and valuation. This has long been the strategy of The Taiwan Fund, Inc. and we have no intention of departing from it.

 

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Sincerely,

 

Wong Kok Hoi

Co-Portfolio Manager

 

James Liu

Co-Portfolio Manager

 

*

Returns for the Fund are historical total returns that reflect changes in NAV per share during each period and assume that dividends and capital gains, if any, were reinvested. Returns for the TAIEX Index are not total returns and reflect only changes in share price but do not assume that cash dividends, if any, were reinvested, and thus are not strictly comparable to the Fund returns. Past performance is not indicative of future results of the Fund.

 

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ABOUT THE PORTFOLIO MANAGERS (unaudited)

 

 

 

Wong Kok Hoi — Co-Portfolio Manager of the Fund

Wong Kok Hoi, is the chairman and chief investment officer at APS. He has 30 years of investment experience in Asian Pacific equity markets. He co-manages the APS Greater China, Taiwan and Asian accounts and is based in Singapore. Prior to the setting up of APS, Kok Hoi worked as Senior Investment Officer, Asia Pacific Equities Department, of the Government of Singapore Investment Corporation (GIC) from 1981 to 1985. He then joined Citicorp Investment Management HK as Vice-President and was promoted to CIO of Cititrust, Japan. Kok Hoi, a Japan Mombusho scholar, obtained his B. Commerce (Honors) degree from Hitotsubashi University. He also attended the Harvard University’s Investment Appraisal and Management Program and is a CFA Holder.

James Liu — Co-Portfolio Manager of the Fund

APS’s lead China portfolio manager, Deputy Chairman and Deputy Chief Investment Officer is James Liu. James is the portfolio manager of the China ‘A’ Share accounts and co-manager of Greater China and Taiwan accounts. Prior to joining APS in January 1996, he was senior manager at Shanghai International Securities, the then largest stock brokerage firm and investment bank in China. He has 20 years of investment experience in Greater China markets and has successfully managed money for the last 10 years. James is based in Shanghai and Singapore.

APS Taiwan Team

In total, APS has eight investment professionals involved in investing in Taiwan. As well as the experience of the co-managers, APS has one dedicated Taiwan analyst who has been covering the region for seven years and one specialist tech analyst who covers both Taiwan and Korea.

The APS macro-economist Dr. Tan Kong Yam is also part of the team. Dr. Tan has 29 years investment experience including roles with the Monetary Authority of Singapore, Ministry of Trade and Industry, The National University of Singapore and the World Bank Office in Beijing. Dr. Tan identifies and verifies mid-to-long-term structural and business trends across the region for the investment team to take into their investigative company specific research.

 

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PORTFOLIO SNAPSHOT*

 

 

 

 

7

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INDUSTRY ALLOCATION

 

 

 

Fund holdings are subject to change and percentages shown above are based on net assets as of February 28, 2013. The pie chart illustrates the allocation of the investments by sector. A complete list of holdings as of February 28, 2013 is contained in the Schedule of Investments included in this report. The most current available data regarding portfolio holdings and industry allocation can be found on our website, www.thetaiwanfund.com. You may also obtain updated holdings by calling 1-877-864-5056.

 

8

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SCHEDULE OF INVESTMENTS/FEBRUARY 28, 2013

(SHOWING PERCENTAGE OF NET ASSETS) (unaudited)

 

 

 

 

		The accompanying notes are an integral part of the financial statements.			9

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FINANCIAL STATEMENTS

 

 

 

 

10		The accompanying notes are an integral part of the financial statements.

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FINANCIAL STATEMENTS (continued)

 

 

 

STATEMENTS OF CHANGES IN NET ASSETS

 

		Six Months Ended February 28, 2013				Year Ended August 31, 2012
		(unaudited)
Increase/(Decrease) in Net Assets
Operations:
Net investment income (loss)		$	(1,358,345	)		$	350,564
Net realized gain (loss) on investments and foreign currency transactions			853,586				(8,619,477	)
Net change in unrealized appreciation (depreciation) on investments and foreign currency translations			8,322,767				(52,890,945	)
Net increase (decrease) in net assets resulting from operations			7,818,008				(61,159,858	)
Distributions to shareholders from:
Net realized gains			—				(10,411,965	)
Total distributions to shareholders			—				(10,411,965	)
Capital stock transactions:
Reinvestment of distributions from net investment income and net realized gains			—				12,827
Cost of shares tendered			—				(144,429,100	)
Cost of shares repurchased (Note 6)			(7,176,274	)			(4,589,427	)
Total capital stock transactions			(7,176,274	)			(149,005,700	)
Increase (decrease) in net assets			641,734				(220,577,523	)
Net Assets
Beginning of period			154,594,073				375,171,596
End of period			155,235,807				154,594,073
Accumulated undistributed net investment loss included in end of period net assets		$	(26,766,058	)		$	(25,407,713	)

 

		The accompanying notes are an integral part of the financial statements.			11

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FINANCIAL STATEMENTS (continued)

 

 

 

STATEMENT OF CASH FLOWS

For the Six Months Ended February 28, 2013 (unaudited)

 

Increase/(decrease) in cash –
Cash flows from operating activities:
Net increase in net assets from operations		$	7,818,008
Adjustments to reconcile net decrease in net assets from operations to net cash received from operating activities:
Purchase of investment securities			(10,407,397	)
Proceeds from disposition of investment securities			16,622,863
Gain from foreign cash transactions			68,564
Net realized gain on foreign currency transactions			(818,761	)
Net realized gain from investment securities			(34,825	)
Change in unrealized appreciation on investment securities			(8,338,063	)
Change in unrealized depreciation on assets and liabilities denominated in foreign currencies			15,296
Decrease in dividends receivable			1,933,109
Decrease in receivables for securities sold			56,751
Decrease in prepaid expenses			40,802
Decrease in payable for Fund shares repurchased			(10,187	)
Increase in payable for securities purchased			62,320
Decrease in accrued management fee			(39,499	)
Decrease in Taiwan stock dividend tax payable			(47,524	)
Increase in accrued directors’ and officers’ fees and expenses			31,889
Decrease in other payables and accrued expenses			(2,881	)
Net cash received from operating activities			6,950,465
Cash flows from financing activities:
Payment for shares repurchased from shareholders			(7,176,274	)
Net cash used in financing activities			(7,176,274	)
Net decrease in cash			(225,809	)
Cash:
Beginning of period			4,263,349
End of period		$	4,037,540

 

12		The accompanying notes are an integral part of the financial statements.

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FINANCIAL STATEMENTS (continued)

 

 

 

FINANCIAL HIGHLIGHTS

Selected data for a share of common stock outstanding for the years indicated

 

		Six Months Ended February 28, 2013				Year Ended August 31,
						2012				2011				2010^				2009				2008
		(unaudited)
Selected Per Share Data
Net asset value, beginning of period		$	17.21			$	20.20			$	16.33			$	13.84			$	15.71			$	23.73
Income from Investment Operations:
Net investment income (loss)(a)			(0.16	)			0.02				0.14				0.16				0.18				0.27
Net realized and unrealized gain (loss) on investments and foreign currency transactions			1.06				(2.57	)			3.81				2.40				(1.88	)			(4.91	)
Total from investment operations			0.90				(2.55	)			3.95				2.56				(1.70	)			(4.64	)
Less Distributions to Shareholders from:
Net investment income			—				—				(0.08	)			(0.07	)			(0.04	)			(0.43	)
Net realized gains			—				(0.56	)			—				—				—				(2.76	)
Distribution in excess of net investment income			—				—				—				—				(0.13	)			—
Total distributions to shareholders			—				(0.56	)			(0.08	)			(0.07	)			(0.17	)			(3.19	)
Capital Share Transactions:
Accretion (dilution) to net asset value, resulting from share repurchase program, tender offer or issuance of shares in stock dividend			0.09				0.12				—				—				—				(0.19	)
Net asset value, end of period		$	18.20			$	17.21			$	20.20			$	16.33			$	13.84			$	15.71
Market value, end of period		$	16.51			$	15.58			$	18.09			$	14.67			$	12.14			$	14.32
Total Return
Per share net asset value(b)			5.75	%†			(11.54	)%			24.21	%			18.56	%			(10.29	)%			(21.03	)%
Per share market value(b)			5.97	%†			(10.58	)%			23.82	%			21.42	%			(13.68	)%			(20.29	)%
Ratio and Supplemental Data:
Net Assets, end of period (000s)		$	155,236			$	154,594			$	375,172			$	303,412			$	257,062			$	291,877
Ratio of expenses before fee waiver(c)			2.02	%(d)			1.65	%			1.43	%			1.49	%			1.79	%			1.97	%
Ratio of expenses after fee waiver			2.02	%(d)			1.61	%			1.43	%			1.49	%			1.63	%			1.71	%
Ratio of net investment income (loss)			(1.77	)%(d)			0.12	%			0.71	%			1.03	%			1.61	%			1.35	%
Portfolio turnover rate			7	%†			75	%			54	%			101	%			109	%			85	%

 

(a)	Based on average shares outstanding during the period.

(b)

Total investment return at net asset value (“NAV”) is based on changes in the NAV of Fund shares and assumes reinvestment of dividends and distributions, if any. Total investment return at market value is based on changes in the market price at which the Fund’s shares traded on the stock exchange during the period and assumes reinvestment of dividends and distributions, if any, at actual prices pursuant to the Fund’s dividend reinvestment program. Because the Fund’s shares trade in the stock market based on investor demand, the Fund may trade at a price higher or lower than its NAV. Therefore, returns are calculated based on both share price and NAV. During the year ended August 31, 2012, the adviser reimbursed certain fund expenses. If the Adviser had not reimbursed the Fund, the return would have been lower.

(c)	Expense ratio includes 20% tax paid on stock dividends received by the Fund. For the six months ended February 28, 2013 the Fund’s ratio of expenses before fee waiver and excluding taxes paid on stock dividends was 1.83% (annualized).

(d)	Annualized.

^

As of May 8, 2010, Martin Currie Inc. succeeded HSBC Global Asset Management (Taiwan) Limited (“HSBC”) as the Fund’s investment adviser.

†

Not annualized.

 

		The accompanying notes are an integral part of the financial statements.			13

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NOTES TO FINANCIAL STATEMENTS (unaudited)

FEBRUARY 28, 2013

 

 

 

 

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NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)

FEBRUARY 28, 2013

 

 

 

 

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NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)

FEBRUARY 28, 2013

 

 

 

 

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NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)

FEBRUARY 28, 2013

 

 

 

 

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NOTES TO FINANCIAL STATEMENTS (unaudited) (continued)

FEBRUARY 28, 2013

 

 

 

 

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OTHER INFORMATION (unaudited)

 

 

 

Federal Tax Information.    The Fund has made an election under Internal Revenue Code Section 853 to pass through foreign taxes paid by the Fund to its shareholders. For the year ended August 31, 2012, the total amount of foreign taxes paid that will be passed through to its shareholders and foreign source income for information reporting purposes will be $702,808 (representing taxes withheld plus taxes on stock dividends) and $6,202,972, respectively.

Privacy Policy

 

Proxy Voting Policies and Procedures

A description of the policies and procedures that are used by the Fund’s investment adviser to vote proxies relating to the Fund’s portfolio securities is available (1) without charge, upon request, by calling 1-877-864-5056; and (2) as an exhibit to the Fund’s annual report on Form N-CSR which is available on the website of the Securities and Exchange Commission (the “Commission”) at http://www.sec.gov. Information regarding how the investment adviser voted these proxies during the most recent 12-month period ended June 30 is available without charge, upon request, by calling the same number or by accessing the Commission’s website.

Quarterly Portfolio of Investments

The Fund files with the Securities and Exchange Commission its complete schedule of portfolio holdings on Form N-Q for the first and third quarters of each fiscal year. The Fund’s Form N-Q’s are available on the Commission’s website at http://www.sec.gov. Additionally, the Portfolio of Investments may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The most recent Form N-Q is available without charge, upon request, by calling 1-877-864-5056.

 

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SUMMARY OF DIVIDEND REINVESTMENT AND

CASH PURCHASE PLAN

 

 

 

What is the Dividend Reinvestment and Cash Purchase Plan?

The Dividend Reinvestment and Cash Purchase Plan (the “Plan”) offers shareholders of the Fund, a prompt and simple way to reinvest their dividends and capital gains distributions in shares of the Fund. The Fund will distribute to shareholders, at least annually, substantially all of its net income and expects to distribute annually its net realized capital gains. Computershare Trust Company, N.A. (the “Plan Administrator”), acts as Plan Administrator for shareholders in administering the Plan. The Plan also allows you to make optional cash investments in Fund shares through the Plan Administrator.

Who Can Participate in the Plan?

If you own shares in your own name, you can elect to participate directly in the Plan. If you own shares that are held in the name of a brokerage firm, bank, or other nominee, you should contact your nominee to arrange for them to participate on your behalf.

What Does the Plan Offer?

The Plan has two components; reinvestment of dividends and capital gains distributions, and a voluntary cash purchase feature.

Reinvestment of dividends and capital gains distributions

If you choose to participate in the Plan, your dividends and capital gains distributions will be promptly invested for you, automatically increasing your holdings in the Fund. If the Fund declares a dividend or capital gains distribution payable in cash, you will automatically receive shares purchased by the Plan Administrator on the open market. You will be charged a per share fee (currently $0.05) incurred with respect to the Plan Administrator’s open market purchases.

If a distribution is declared which is payable in shares or cash at the option of the shareholder and if on the valuation date (generally the payable date) the market price of shares is equal to or exceeds their net asset value, the Fund will issue new shares to you at the greater of the following: (a) net asset value per share or (b) 95% of the market price per share. If the market price per share on the valuation date is less than the net asset value per share, the Fund will issue new shares to you at the market price per share on the valuation date.

All reinvestments are in full and fractional shares, carried to three decimal places. In the case of foreign (non-U.S.) shareholders, reinvestment will be made net of applicable withholding tax.

The Plan will not operate if a distribution is declared in shares only, subject to an election by the shareholders to receive cash.

Voluntary cash purchase option

Plan participants have the option of making investments in Fund shares through the Plan Administrator. You may invest any amount from $100 to $3,000 semi-annually. The Plan Administrator will purchase shares for you on the New York

 

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SUMMARY OF DIVIDEND REINVESTMENT AND

CASH PURCHASE PLAN (continued)

 

 

 

Stock Exchange or otherwise on the open market on or about February 15 and August 15. If you hold shares in your own name, you should deal directly with the Plan Administrator. Checks in U.S. dollars and drawn in U.S. banks should be made payable to “Computershare”. The Plan Administrator will not accept cash, traveler’s checks, money orders, or third party checks. We suggest you send your check, along with a completed transaction form which is attached to each statement you receive, to the following address to be received at least two business days before the investment date: Computershare, c/o The Taiwan Fund, Inc. at P.O. Box 43078, Providence, RI 02940-3078. The Plan Administrator will return any cash payments received more than thirty days prior to February 15 or August 15, and you will not receive interest on uninvested cash payments. If you own shares that are held in the name of a brokerage firm, bank, or other nominee, you should contact your nominee to arrange for them to participate in the cash purchase option on your behalf.

If your check is returned unpaid for any reason, the Plan Administrator will consider the request for investment of such funds null and void, and shall immediately remove these shares from your account. The Plan Administrator shall be entitled to sell shares to satisfy any uncollected amount plus any applicable fees. If the net proceeds of the sale are insufficient to satisfy the balance of any uncollected amounts, the Plan Administrator shall be entitled to sell such additional shares from your account as may be necessary to satisfy the uncollected balance.

Is There a Cost to Participate?

For purchases from the reinvestment of dividends and capital gains distributions, you will pay a pro rata portion of brokerage commissions payable with respect to purchases of shares by the Plan Administrator on the open market. You will also be charged a per share fee (currently $0.05) incurred with respect to the Plan Administrator’s open market purchases in connection with the reinvestment of dividends and capital gains distributions. Brokerage charges for purchasing shares through the Plan are expected to be less than the usual brokerage charges for individual transactions, because the Plan Administrator will purchase stock for all participants in blocks, resulting in lower commissions for each individual participant. The Plan Administrator’s transaction fees for handling capital gains distributions or income dividends will be paid by the Fund.

For purchases from voluntary cash payments, participants are charged a service fee (currently $0.75 per investment) and a per fee (currently $0.05) for each voluntary cash investment. Per share fees include any brokerage commissions the Plan Administrator is required to pay.

Brokerage commissions and service fees, if any, will be deducted from amounts to be invested.

What Are the Tax Implications for Participants?

You will receive tax information annually for your personal records and to help you prepare your federal income tax return. The automatic reinvestment of dividends and capital gains distributions does not relieve you of any income tax which may be payable on dividends or distributions. For further information as to the tax consequences of participating in the Plan, you should consult with your tax advisors.

If the Fund issues shares upon reinvestment of a dividend or capital gains distribution, for U.S. federal income tax purposes, the amount reportable in respect of the reinvested amount of the dividend or distribution will be the fair

 

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SUMMARY OF DIVIDEND REINVESTMENT AND

CASH PURCHASE PLAN (continued)

 

 

 

market value of the shares received as of the payment date, which will be reportable as ordinary dividend income and/or long term capital gains. The shares will have a tax basis equal to such fair market value, and the holding period for the shares will begin on the day after the payment date. State, local and foreign taxes may also be applicable.

Once Enrolled in the Plan, May I Withdraw From It?

You may withdraw from the Plan without penalty at any time by calling the Plan Administrator at 1-800-426-5523, by accessing your Plan account at the Plan Administrator’s web site, www.computershare.com/investor or by written notice to the Plan Administrator.

If you withdraw, you will receive, without charge, stock certificates issued in your name for all full shares, and a check for any fractional share (valued at the market value of the shares at the time of withdrawal or termination) less any applicable fees. You may also request that the Plan Administrator sell your shares and send you the proceeds, less a transaction fee of $2.50 and a per share fee of $0.15 for any request for withdrawal or termination. The per share fee includes any brokerage commissions the Plan Administrator is required to pay. Alternatively, you may also request that the Plan Administrator move your whole shares to the Direct Management System, which would allow you to maintain ownership of those whole shares in book entry form on the records of the Fund.

All sale requests having an anticipated market value of $100,000.00 or more are expected to be submitted in written form. In addition, all sale requests within thirty (30) days of an address change are expected to be submitted in written form.

Whom Should I Contact for Additional Information?

If you hold shares in your own name, please address all notices, correspondence, questions, or other communications regarding the Plan to: Computershare, c/o The Taiwan Fund, Inc. at P.O. Box 43078, Providence, RI 02940-3078, by telephone at 1-800-426-5523 or through the Internet at www.computershare.com/investor. If your shares are not held in your name, you should contact your brokerage firm, bank, or other nominee for more information and to arrange for them to participate in the Plan on your behalf.

Either the Fund or the Plan Administrator may amend or terminate the Plan. Except in the case of amendments necessary or appropriate to comply with applicable law, rules or policies or a regulatory authority, participants will be mailed written notice at least 30 days before the effective date of any amendment. In the case of termination, participants will be mailed written notice at least 30 days before the record date of any dividend or capital gains distribution by the Fund.

 

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UNITED STATES ADDRESS

The Taiwan Fund, Inc.

c/o State Street Bank and Trust Company

2 Avenue de Lafayette

P.O. Box 5049

Boston, MA

1-877-864-5056

www.thetaiwanfund.com

INVESTMENT ADVISER AND SUB-ADVISER

Martin Currie, Inc.

Edinburgh, Scotland

APS Asset Management Pte Ltd.

Singapore

DIRECTORS AND OFFICERS

Joe O. Rogers, Chairman of the Board and Director

Bing Shen, Director

Michael Holland, Director

M. Christopher Canavan, Jr., Director

Anthony Kai Yiu Lo, Director

William Kirby, Director

Jamie Skinner, President

William C. Cox, Treasurer

Richard F. Cook, Jr., Chief Compliance Officer

Tracie A. Coop, Secretary

ADMINISTRATOR AND ACCOUNTING AGENT

State Street Bank and Trust Company

Boston, MA

CUSTODIAN

State Street Bank and Trust Company

Boston, MA

TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR

Computershare Trust Company, N.A.

Canton, MA

LEGAL COUNSEL

Clifford Chance US LLP

New York, NY

Lee and Li

Taipei, Taiwan

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Tait, Weller & Baker, LLP

Philadelphia, PA

SHAREHOLDER AGENT

AST Fund Solutions, LLC

New York, NY

Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that from time to time the Fund may purchase shares of its common stock in the open market at prevailing market prices.

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Item 2. Code of Ethics.

Not required for this filing.

Item 3. Audit Committee Financial Expert.

Not required for this filing.

Item 4. Principal Accountant Fees and Services.

Not required for this filing.

Item 5. Audit Committee of Listed Registrants.

Not required for this filing.

Item 6. Schedule of Investments.

 

(a)	Schedule of Investments is included as part of Item 1.

 

(b)	Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Investment Companies.

Not required for this filing.

Item 8. Portfolio Managers of Closed-End Management Investment Company.

There have been no changes to any of the registrant’s portfolio managers since last reported in the registrant’s Annual Report dated August 31, 2012 and as filed in Form N-CSR on November 7, 2012 SEC Accession No. 0001193125-12-456722

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

 

Period*		(a) Total Number of Shares (or Units) Purchased				(b) Average Price Paid per  Share (or Unit)				(c) Total Number of Shares (or Units) Purchased as Part of Publicly  Announced Plans or Programs				(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that  May Yet Be Purchased Under the Plans or Programs
September 1, 2012 – February 28, 2013			451,401			$	15.90				451,401				446,838
Total			451,401			$	15.90				451,401				446,838

 

*	The Fund implemented a Discount Management Program (the “Program”) in February 2012. Under the Program, the Fund is authorized to repurchase in each twelve-month period ending August 31 up to 10% of its common shares outstanding as of August 31 of the prior year.

 

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Item 10. Submission of Matters to a Vote of Security Holders.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s Board of Directors during the period covered by this Form N-CSR filing.

Item 11. Controls and Procedures.

 

(a)

The registrant’s principal executive and principal financial officers have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this Form N-CSR based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the 1934 Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

(b)

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

 

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Item 12. Exhibits

 

(a)(1)		Not required for this filing.
(a)(2)		The certifications required by Rule 30a-2 of the 1940 Act (17 CFR 270.30a-2(a)) are attached hereto.
(a)(3)		Not required for this filing.
(b)		The certifications required by Rule 30a-2(b) of the 1940 Act (17 CFR 270.30a-2(b)) and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

THE TAIWAN FUND, INC.
By:		/s/ Jamie Skinner
		Jamie Skinner
		President of The Taiwan Fund, Inc.

Date: May 3, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:		/s/ Jamie Skinner
		Jamie Skinner
		President of The Taiwan Fund, Inc.

Date: May 3, 2013

By:		/s/ William C. Cox
		William C. Cox
		Treasurer of The Taiwan Fund, Inc.

Date: May 3, 2013

 

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