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<PAGE> PAGE 2
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SIGNATURE MARY JANE MALONEY
TITLE MANAGER
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000050691
<NAME> INSTITUTIONAL INVESTORS CAPITAL APPRECIATION FUND, INC.
<S> <C>
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<PERIOD-END> DEC-31-1998
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<EXPENSES-NET> (1129498)
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<NET-CHANGE-FROM-OPS> 27392418
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (542675)
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</TABLE>
EXHIBIT INDEX
EXHIBIT A:
Attachment to item 77B: Accountant's report on internal
control.
EXHIBIT B:
Attachment to item 77C: Matters submitted to a vote of
security holders
EXHIBIT C:
Attachment to item 77H: Changes in control of Registrant.
EXHIBIT D:
Attachment to item 77I: Terms of new or amended securities
EXHIBIT E:
Attachment to item 77Q1: Amended By-Laws
- ------------------------------------------------------------
EXHIBIT A:
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of the
Institutional Investors Capital Appreciation Fund, Inc.:
In planning and performing our audit of the financial
statements of the Institutional Investors Capital
Appreciation Fund, Inc. for the year ended December 31,
1998, we considered its internal control, including control
activities for safeguarding securities, in order to
determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to
comply with the requirements of Form N-SAR, not to provide
assurance on internal control.
The management of the Institutional Investors Capital
Appreciation Fund, Inc. is responsible for establishing and
maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are
required to assess the expected benefits and related costs
of controls. Generally, controls that are relevant to an
audit pertain to the entity's objective of preparing
financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of
assets against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors
or fraud may occur and not be detected. Also, projection of
any evaluation of internal control to future periods is
subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of internal control would not necessarily
disclose all matters in internal control that might be
material weaknesses under standards established by the
American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or
operation of one or more of the internal control components
does not reduce to a relatively low level the risk that
errors or fraud in amounts that would be material in
relation to the financial statements being audited may occur
and not be detected within a timely period by employees in
the normal course of performing their assigned functions.
However, we noted no matters involving internal control,
including control activities for safeguarding securities,
that we consider to be material weaknesses as defined above
as of December 31, 1998.
This report is intended solely for the information and use
of management, the Board of Directors, and the Securities
and Exchange Commission.
ARTHUR ANDERSEN LLP
Philadelphia, PA
January 19, 1999
EXHIBIT B:
The Annual Meeting of Stockholders held April 22, 1998
and the election of directors, are incorporated herein
by reference to the Form N30-D filed with the Securities and
Exchange Commison on August 17, 1998.
EXHIBIT C:
Item 77H At December 31, 1997, Staten Island Savings Bank
owned more than 25% of the outstanding voting shares of the
Fund and therefore was deemed to be a controlling
person. As of December 31, 1998, Staten Island
Bancorp, Inc. is deemed to be a controlling person of
the Fund by virtue of its ownership of 36% of the
outstanding voting shares of the Fund. Staten Island
Bancorp, Inc. acquired such controlling interest by
virtue of the transfer of securities previously held by
Staten Island Savings Bank to its corporate parent,
Staten Island Bankcorp, Inc.
EXHIBIT D:
Item 77I On January 21, 1998, the by-laws of the Fund were
amended to permit the record date for meetings,
dividends and other actions to be set, and written
notice to be given to the stockholders, as much as
sixty days in advance of the meeting or action as
permitted by recent changes to the New York Business
Corporation Law.
EXHIBIT E:
The by-laws of the Fund were amended January 21, 1998 by
changing the word "fifty" to the word "sixty" in the first
sentence of Section 4 of Article II and in the second sentence
of Section 5 of Article VI, wherever such word appears. Those
Sections now read as follows:
Article II, Section 4, Paragraph 1.
Notice of Meetings. Written notice of the place, date, hour
and purpose or purposes of each annual meeting of the
stockholders and each special meeting of the stockholders shall
be given by the Secretary, either personally or by mail, not
less than ten nor more than sixty days before the date of the
meeting. Said written notice, unless it is for the annual
meeting, shall indicate that it is being issued by or at the
direction of the person or persons calling the meeting.
Article VI, Section 5.
Record Date. For the purpose of determining stockholders
entitled to notice of or to vote at any meeting of stockholders
or any adjournment thereof, or to express consent to or dissent
from any proposal without a meeting, or for the purpose of
determining the stockholders entitled to receive payment of any
dividend or the allotment of any rights, or for the purpose of
any other action, the Board of Directors may fix, in advance, a
date as the record date for any such determination of
stockholders. Such date shall not be more than sixty nor less
than ten days before the date of any meeting, nor more than
sixtydays prior to any other action. When a determination of
stockholders of record entitled to notice of or to vote at any
meeting of stockholders has been made as provided herein, such
determination shall apply to any adjournment thereof, unless
the Board of Directors fixes a new record date for the
adjourned meeting.
