[LOGO]
THE KOREA FUND, INC.
Annual Report
June 30, 1999
A closed-end investment company seeking long-term appreciation of capital
through investment in Korean securities.
<PAGE>
[LOGO] The Korea Fund, Inc.
================================================================================
Investment objective and policies
o long-term capital appreciation through investment in Korean securities
Investment characteristics
o investments in a broad spectrum of Korean industries
o closed-end investment company
o first United States investment company authorized to invest in Korean
securities
o a vehicle for international diversification through participation in the
Korean economy
General Information
================================================================================
Executive Offices
The Korea Fund, Inc.
345 Park Avenue
New York, NY 10154
For Fund Information: 1-800-349-4281
Transfer Agent, Registrar and Dividend
Reinvestment Plan Agent
For Account Information: 1-800-426-5523
EquiServe
P.O. Box 8200
Boston, MA 02266-8200
Custodian
Brown Brothers Harriman & Co.
Subcustodian -- Citibank, N.A. - Seoul office
Legal Counsel
Debevoise & Plimpton
Independent Accountants
PricewaterhouseCoopers LLP
New York Stock Exchange Symbol -- KF
Contents
================================================================================
In Brief ............................................ 3
Letter to Stockholders .............................. 3
Other Information ................................... 6
Investment Summary .................................. 8
Portfolio Summary ................................... 9
Investment Performance .............................. 10
Investment Portfolio ................................ 12
Financial Statements ................................ 21
Financial Highlights ................................ 24
Notes to Financial Statements ....................... 25
Report of Independent Accountants ................... 31
Tax Information ..................................... 32
Dividend Reinvestment and
Cash Purchase Plan ............................... 33
Officers and Directors .............................. 35
2
<PAGE>
[LOGO] The Korea Fund, Inc.
In Brief
================================================================================
o A confluence of positive factors facilitated a powerful, broad-based rally
in the Korean stock market in the first six months of 1999.
o We maintained a focus on the country's leading blue chip stocks, which tend
to have the strongest fundamentals. Specifically, we focused on companies
poised to benefit from restructuring and consolidation.
[LOGO] Letter to Stockholders
Dear Stockholders:
- --------------------------------------------------------------------------------
Korean stocks staged an enormous rally in the first half of 1999, building on
their gains of late last year. Falling interest rates, surging profit growth,
and the ongoing process of corporate restructuring have combined to fuel
tremendous interest in the stock market among retail investors. On the strength
of these trends, the NAV of the Korea Fund rose 214.74% to 17.72 in the twelve
months ended June 30, 1999. For the same period, the Fund's shares traded on the
New York Stock Exchange rose 135.64% to close at 14 7/8 per share, representing
a 16.06% discount to NAV. In the second quarter of 1999 alone, the Fund's NAV
returned 63.02%, while its stock price returned 44.24%.
Market Environment
Investor sentiment in Korea has improved dramatically during the past nine
months. In our frequent visits to the country, we have noticed a completely
different atmosphere than that which existed during the crisis period. Stores
that were nearly empty before are now packed with people, as the average citizen
has become increasingly convinced that the worst is over for Korea. Company
managements are also offering a more upbeat outlook for the economy. The root of
this shift has been the persistent drop in interest rates, which has had a
ripple effect throughout the economy and has contributed to the stock market's
rally on both a direct and an indirect level. First, it has prompted retail
investors to pull money out of banks and fixed income instruments -- where
returns have become less attractive -- and instead invest them in the stock
market. In a development similar to what the United States has experienced in
recent years, there has been a blossoming of the "equity culture" as the general
public has developed a growing enthusiasm for stocks. The drop in interest rates
has also boosted corporate profits by allowing Korean companies to reduce their
burdensome debt levels in favor of equity financing. Finally, the market has
been buoyed by the fact that virtually all measures of economic growth have
turned positive: exports are up, domestic sales figures have risen, unemployment
is declining, gross domestic product is expanding, and foreign direct investment
is accelerating. With the economy expected to grow at a rate of 4.3% in 1999,
according to the Korea Development Institute, it is apparent that Korea has
engineered a remarkable recovery from its worst-ever recession.
An equally critical development for stock market investors has been the
accelerated pace of corporate restructuring. Many companies have yet to begin a
true process of restructuring, but those that have provide an unique opportunity
to investors. We choose to focus on those companies that have taken critical
forward steps such as selling off non-core businesses, taking write-offs at
non-saleable businesses, laying off portions of their workforce, and paying down
debt. Unfortunately, most of the chaebols are still resisting the forces of
change. While we view the intransigence of the chaebols as a
3
<PAGE>
[LOGO] The Korea Fund, Inc.
Letter to Stockholders
================================================================================
potential risk, restructuring should continue to have a positive effect on
corporate earnings in Korea.
Fund Strategy: Maintaining a Steady Course
In managing the Korea Fund, we utilize a long-term strategy that is designed
to provide market-beating returns in both up and down markets. We seek to
achieve this objective by using intensive fundamental research to identify
well-managed companies with strong balance sheets, lower- than-average debt
ratios, and promising growth prospects. Consistent with this approach, the Fund
tends to have a low portfolio turnover.
We maintained a concentration in blue chips during the period, primarily
because Korea's dominant, large-cap companies tend to have the strongest
fundamentals. This strategy proved highly beneficial in a period when large-cap
names such as SK Telecom, Pohang Iron and Steel, and Samsung Electronics
produced excellent gains. We also found interesting opportunities in the banking
sector, which offers a much more favorable tradeoff of risk and return than it
did only a year ago, given the shrinking number of nonperforming loans and the
decreasing number of bankruptcies among Korean corporations. We continued to add
to our position in brokerage stocks, which benefited from the rising level of
participation in the stock market and the concurrent growth of the mutual fund
industry. In addition, we found attractive opportunities in stocks that are
leveraged to rising domestic consumption, such as Samchully, a natural gas
company, and Nhomg Shim, a food retailer.
Samsung Securities is a recent success story for the Korea Fund, and a
typical example of the type of company in which we seek to invest. In the
December report, we mentioned that Samsung Securities was attractive due to its
low valuation and significant market share in the mutual fund business. As a
leading company in its industry, Samsung Securities was well positioned to
benefit from the huge inflows into mutual funds during the last six months. The
company's mutual fund sales were 18 trillion won in 1998, and it sold 26
trillion in just the first quarter of 1999. In addition, Samsung Securities'
online trading business is expected to account for 20% of revenues in 1999, up
from 10% in 1998. With sound financials and rapidly rising revenues, the stock
has increased over 200% since we first added it to the portfolio.
Another stock that we picked up at distressed levels was Kumho Chemicals, a
smaller company that was plagued by high debt and poor industry pricing. We
first bought Kumho when it became apparent to us that its restructuring
initiatives would have a material effect on its bottom line. The company has
indeed been able to turn itself around in a very short time, and the rapid rise
in its stock price reflects its positive outlook. These two companies typify
what we look for in our investment candidates: a leading market position, solid
financials, and most important, outstanding value.
Year 2000 Issue
Like other registered investment companies and financial and business
organizations worldwide, the Fund could be adversely affected if computer
systems on which the Fund relies, which primarily include those used by the
Manager, its affiliates or other service providers, are unable to correctly
process date-related information on or after January 1, 2000. This risk is
commonly called the Year 2000 Issue (Y2K). Failure to successfully address the
Year 2000 Issue could result in interruptions to and other material adverse
effects on the Fund's business and operations, such as problems with calculating
net asset value. The Manager has commenced a review of the Year 2000 Issue as it
may affect the Fund and is taking steps it believes are reasonably designed to
address the Year 2000 Issue, although there can be
4
<PAGE>
[LOGO] The Korea Fund, Inc.
Letter to Stockholders
================================================================================
no assurances that these steps will be sufficient. In addition, there can be no
assurances that the Year 2000 Issue will not have an adverse effect on the
issuers whose securities are held by the Fund or on global markets or economies
generally. To the extent that the impact on a fund holding or on markets or
economies is negative, it could seriously affect the fund's performance. The
foregoing is a Year 2000 readiness disclosure under the Year 2000 Information
and Readiness Disclosure Act.
Soft Dollar Disclosure
The Board of Directors of the Fund has approved a soft dollar policy that
authorizes the Manager to enter into arrangements with certain brokers or
dealers. Pursuant to the policy, the Manager may, when it can be done
consistently with its policy of obtaining best execution, direct a portion of
the Fund's brokerage transactions to such brokers or dealers in exchange for
research services within the meaning of Section 28(e) of the Securities Exchange
Act of 1934. Research services obtained by the Manager may, in appropriate
circumstances, be used for the benefit of other clients of the Manager as well
as the Fund. As permitted by Section 28(e), the Manager is authorized, when
placing transactions for the Fund, to pay a brokerage commission in excess of
that which another broker or dealer might charge for executing the same
transaction. Therefore, the Fund may pay higher brokerage rates than could be
obtained if the Manager were not entering into soft dollar arrangements.
Outlook: A Stockpickers' Market Ahead
We believe that the investment backdrop will remain favorable for the
immediate future, due in large part to the support provided by lower interest
rates. However, it is important to keep in mind that the recent gains in Korean
stocks have been liquidity-driven; in other words, a case of an overwhelming
demand for stocks in a market where supply is relatively limited. Virtually all
stocks have risen this year, including those with questionable fundamentals.
With stock prices now so high in the wake of the market's runup, superior stock
selection will be crucial to investment performance in the remainder of 1999. It
is likely that the market will soon begin to differentiate between the companies
that have positioned themselves to benefit from Korea's economic recovery
through restructuring, and those that have not. We feel that the well-managed
blue chips will maintain their position of market leadership in this
environment, since their rapidly improving fundamentals should continue to
facilitate higher stock prices.
In our view, the most significant risk to the markets is the possibility that
investors will be looking for any excuse to take profits after the market's
recent gains. At these levels, stocks are extremely vulnerable to negative
surprises, which could arise from political developments, deteriorating
relations with North Korea, problems with the intransigent chaebols, or possible
earnings dilution through overly aggressive equity issuance. Still, we believe
that at this stage the positives outweigh the negatives, and we are therefore
optimistic on both the medium- and long-term outlook for Korea. In all market
conditions, we feel that our stock selection capabilities will help the Korea
Fund to remain competitive with both the benchmark and its peers.
Sincerely,
/s/Nicholas Bratt /s/Juris Padegs
Nicholas Bratt Juris Padegs
President Chairman of the Board
and Director
5
<PAGE>
[LOGO] The Korea Fund, Inc.
Other Information
================================================================================
Investment Manager
The investment manager of The Korea Fund, Inc. is Scudder Kemper Investments
Inc. ("the Manager"), one of the most experienced investment management firms in
the world. Established in 1919, the firm manages investments for institutional
and corporate clients, retirement and pension plans, insurance companies, mutual
fund investors, and individuals. The Manager has offices throughout the United
States and has subsidiaries in the United Kingdom, Switzerland, Hong Kong, and
Japan.
The Manager has been a leader in international investment management for over
40 years. It manages Scudder International Fund, which was originally
incorporated in Canada in 1953 as the first foreign investment company
registered with the United States Securities and Exchange Commission. The
Manager's clients which invest primarily in foreign securities include thirty
open-end investment companies as well as portfolios for institutional investors.
The Manager also manages the assets of other closed-end investment companies
which invest primarily in foreign securities, including: The Argentina Fund,
Inc., The Brazil Fund, Inc., Scudder Global High Income Fund, Inc., Scudder New
Asia Fund, Inc., and Scudder New Europe Fund, Inc.
Korean Adviser
Daewoo Capital Management Co., Ltd., registered under the U.S. Investment
Advisers Act of 1940, acts as Korean adviser to Scudder Kemper Investments,
Inc., the Fund's investment manager. Daewoo Capital Management Co., Ltd. is a
subsidiary of Daewoo Securities Co., Ltd., the largest Korean securities firm,
and an affiliate of Daewoo Research Institute.
Daewoo Capital Management Co., Ltd. provides investment advice, research, and
assistance to the Manager. The Daewoo staff makes specific investment
recommendations, which are then evaluated by the Manager's research department
and portfolio managers in light of their own expertise and information from
other sources in making investment decisions for the Fund.
A Team Approach to Investing
The Korea Fund, Inc. is managed by a team of the Manager's professionals who
each play an important role in the Fund's management process. Team members work
together to develop investment strategies and select securities for the Fund.
They are supported by the Manager's large staff of economists, research
analysts, traders, and other investment specialists who work in the Manager's
offices across the United States and abroad. We believe our team approach
benefits Fund investors by bringing together many disciplines and leveraging its
extensive resources.
Lead Portfolio Manager John J. Lee has set Fund investment strategy and
overseen its daily operation since 1991, the year he joined the Manager's global
equity area. Nicholas Bratt, Portfolio Manager, has been a member of the
Portfolio team since 1984 when the Fund was launched and has over 27 years of
experience in worldwide investing. Mr. Bratt, who has been with the Manager
since 1976, is the Director of the Manager's Global Equity Group.
Dividend Reinvestment and Cash Purchase Plan
The Fund's Dividend Reinvestment and Cash Purchase Plan offers you a
convenient way to have your dividends and capital gain distributions reinvested
in shares of the Fund. We believe this Plan is attractive for stockholders. Its
features are more fully described on page 33.
6
<PAGE>
================================================================================
Net Asset Value
The Fund's NAV is published every Monday in The Wall Street Journal under the
heading "Closed End Funds." The Fund's NAV is also published in The New York
Times and Barron's.
As a service to overseas stockholders, the Fund's NAV is listed daily in The
Financial Times ("FT"). For your information, the NAV of the Fund and other
Scudder closed-end funds can be found in the "FT Managed Funds Service" section
under the heading "Other Offshore Funds" below the Scudder Kemper Investments,
Inc. banner.
7
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Summary as of June 30, 1999
<TABLE>
<CAPTION>
========================================================================================================
Historical
Information
Total Return (%)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
Market Value Net Asset Value (a) Index (b) Index (c)
------------------- -------------------- ------------------- -------------------
Average Average Average Average
Cumulative Annual Cumulative Annual Cumulative Annual Cumulative Annual
------------------- -------------------- ------------------- -------------------
Current Quarter 44.24 -- 63.02 -- 51.22 -- 42.65 --
One Year 135.64 135.64 214.74 214.74 251.62 251.62 196.43 196.43
Three Year (25.48) (9.34) 1.25 0.42 -25.36 -9.29 7.22 2.35
Five Year (22.67) (5.01) 8.60 1.66 -34.17 -8.02 -5.40 -1.10
Ten Year (28.56) (3.31) 59.82 4.80 -40.44 -5.05 3.32 0.33
- ------------------------------------------------------------------------------------------------------
</TABLE>
Per Share Information and Returns (a)
Yearly Periods Ended June 30,
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) with the exact
data points listed in the table below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1990 1991 1992 1993 1994 1995 1996 1997 1998 1990
--------------------------------------------------------------------------------------
Net Asset Value... $14.45 $10.27 $10.75 $11.40 $18.66 $19.89 $18.52 $13.22 $ 5.63 $17.72
Income Dividends.. $ .08 $ -- $ .06 $ .04 $ .01 $ -- $ .06 $ -- $ -- $ --
Capital Gains
Distributions..... $ 1.88 $ 2.20 $ .34 $ .20 $ -- $ .15 $ .36 $ .60 $ -- $ --
Total
Return (%)........ -9.52 -14.91 7.87 8.20 63.77 13.00 -5.09 -24.40 -57.41 214.74
</TABLE>
(a) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
(b) Korea Stock Price Index ("KOSPI") in U.S. Dollars.
(c) Korea Stock Price Index ("KOSPI") in local terms.
Past results are not necessarily indicative of future performance of the
Fund.
8
<PAGE>
[LOGO] The Korea Fund, Inc.
Portfolio Summary as of June 30, 1999
================================================================================
Diversification
Common Stocks 86%
Convertible Bonds 6%
Preferred Stocks 6%
Corporate Bonds 1%
Repurchase Agreements 1%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------------
Sectors
Sector breakdown of the Fund's equity securities
Communications 23%
Financial 23%
Technology 17%
Consumer Staples 7%
Manufacturing 6%
Metals & Minerals 6%
Durables 5%
Utilities 3%
Energy 2%
Other 8%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------------
Ten Largest Equity Holdings
(68% of Portfolio)
1. SK Telecom Co., Ltd. Mobile
telecommunication services
2. Samsung Fire & Marine Insurance
Co. Insurance company
3. Samsung Electronics Co., Ltd.
Electronics manufacturer
4. Pohang Iron & Steel Co., Ltd.
Steel producer
5. Samsung Electro-Mechanics Co.,
Ltd. Electronics parts company
6. Hyundai Motor Co., Ltd.
Auto manufacturer
7. Hankook Tire Manufacturing Co.,
Ltd. Manufacturer of tires, batteries,
and aluminum alloy wheels
8. Samsung Display Devices Co.
Manufacturer of CRT and picture
tubes
9. Korea Electric Power Co.
Electricity supplier
10. SK Corporation Oil refinery
company
9
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Performance
- --------------------------------------------------------------------------------
KOREA FUND INVESTMENT PERFORMANCE
History (in terms of N.Y.S.E. Value) of a $10,000 Investment
in Fund Shares vs. the S&P 500 Index*
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE:
BAR CHART DATA:
WITH INCOME WITH CAPITAL CHANGE IN SHARE S&P 500
DISTRIBUTIONS GAINS DISTRIBUTION VALUE OF INITIAL TOTAL RETURN
REINVESTED REINVESTED INVESTMENT ($127,606)
------------- ------------------ --------------- ------------
10942 10942 10942 10000
11983 11983 11983 9972
11875 11875 11875 10159
11458 11458 11458 11095
12292 12292 12292 11906
11787 11250 11250 11422
15393 14692 14692 13395
20632 19692 19692 15286
29440 27817 27817 16186
32537 30709 30625 15054
30103 28411 28333 15905
56221 53061 52917 19304
62087 58597 58438 20265
67523 63039 62396 21689
51016 47628 45938 16801
73921 69011 66563 17755
65476 61127 58958 18925
59075 54750 50000 18993
80516 74621 65625 19608
108121 100205 88125 21000
97003 89900 79063 22837
133542 123540 105000 25283
111177 102850 85938 25801
73983 68442 57188 25017
71557 66198 55313 26571
44506 41173 30625 22930
48402 44777 31250 24976
56630 52389 36563 28611
54694 50598 35313 28520
57251 52736 36250 30052
50380 46407 31563 32576
47387 43650 29688 31761
45392 41813 28438 32345
49876 45787 30625 33368
57001 52328 35000 35054
52421 48123 32188 36585
61073 56066 37500 36763
59037 54197 36250 37711
97766 89706 60000 38587
78417 71951 48125 37122
89619 82230 55000 37277
107003 98181 65313 39097
93227 85541 56875 39091
87592 80371 53438 42897
84754 73790 49063 46995
96871 84340 55313 50730
96850 84082 55000 53785
92448 80261 52500 56670
92999 80738 52813 59211
83103 72148 45625 60998
67735 58805 37188 66080
65548 56829 35938 67903
68716 59657 36875 79766
55020 47766 29525 85740
30561 26532 16400 88205
37852 32862 20313 100511
29408 25531 15781 103831
28535 24773 15313 119191
43093 37412 23125 127606
48043 41710 25781
69299 60163 37188
10
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Performance
- --------------------------------------------------------------------------------
KOREA FUND INVESTMENT PERFORMANCE (Continued)
History (in terms of Net Asset Value) of a $10,000 Investment
in Fund Shares*
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE:
BAR CHART DATA:
WITH INCOME WITH CAPITAL CHANGE IN NET ASSET
DISTRIBUTIONS GAINS DISTRIBUTIONS VALUE OF INITIAL
REINVESTED REINVESTED INVESTMENT
------------- ------------------- -------------------
10000 10000 10000
10072 10072 10072
10269 10269 10269
10197 10197 10197
10305 10305 10305
10083 9624 9624
12599 12025 12025
16796 16030 16030
21224 20054 20054
23020 21726 21667
23315 22004 21944
31873 30082 30000
31788 30001 29919
31515 29422 29122
33685 31447 30332
38620 36055 34776
41695 38926 37545
40580 37609 34346
52539 48693 42823
62236 57679 50726
55541 51474 45269
65403 60505 51425
64511 59679 49866
60372 55851 46667
50252 46489 38844
42973 39754 29570
46216 42755 29839
45050 41676 29086
42760 39558 27608
45385 41806 28737
45269 41699 28360
54323 50039 34032
46127 42489 28898
42992 39467 26398
46494 42683 28548
46844 43004 28763
49909 45817 30645
50128 46018 30780
72887 66877 44731
74814 68646 45914
81735 74996 50161
94468 86679 57661
90991 83489 55511
91123 83610 55591
92364 80416 53468
104044 90585 59409
94862 82356 53871
93916 81535 53333
87667 76110 49785
80692 70054 44301
66394 57642 36452
64093 55644 35188
66274 57537 35565
58810 51057 31559
22242 19310 11935
38071 33052 20430
28203 24485 15134
28554 24789 15323
48040 41707 25780
54452 47274 29220
88817 77108 47661
The data set forth in these graphs should not be construed as an indication of
the record of a shareholder's investment in the Fund based on market prices; nor
should it be construed as a representation of the future performance of the
Fund's net asset value.
* The Korea Fund, Inc. performance charts make the following key assumptions:
1. The data have been adjusted to reflect a 200% stock dividend paid in
October 1988.
2. Investment income and capital gains reinvested at the greater of the
following on the valuation date:
(a) Net asset value per share or
(b) 95% of the mean market price per share.
3. No adjustments have been made for U.S. income taxes. Korean taxes are
reflected.
4. Initial $10,000 investment was made at initial public offering price and at
initial net asset value price.
The Standard & Poor's 500 Stock Index is a widely followed, unmanaged index of
500 industrial, transportation, utility and financial companies widely regarded
as representative of the equity market in general.
11
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio as of June 30, 1999
<TABLE>
<CAPTION>
===============================================================================================================================
Principal Market
Amount (d) Value ($)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT 0.6%
Repurchase Agreement with Donaldson, Lufkin & Jenrette dated 6/30/1999 at 4.8%
to be repurchased at $5,388,718 on 7/1/1999, collateralized by a $5,122,000
U.S. Treasury Note, 3.625%, 7/15/2002 (Cost $5,388,000) ..................... U.S.$ 5,388,000 5,388,000
-----------
- -------------------------------------------------------------------------------------------------------------------------------
CORPORATE BONDS 1.4%
Durables 0.3%
Woosung Tire Company, 9.5%, 5/27/2002 (b) ..................................... 3,000,000,000 2,671,164
Utilities 1.1%
Korea Electric Power, 6.375%, 12/1/2003 ....................................... U.S.$ 10,000,000 9,387,500
-----------
Total Corporate Bonds (Cost $10,186,421) ...................................... 12,058,664
-----------
- -------------------------------------------------------------------------------------------------------------------------------
Convertible Bonds 5.9%
Consumer Staples 1.7%
Food & Beverage 1.6%
Halim & Co. Ltd., 3% with 58.62% bonus interest at maturity, 12/31/2001 (b) (e) 5,000,000,000 8,069,019
Halim & Co. Ltd., 5% with 42.27% bonus interest at maturity, 12/31/2001 (b) (e) 3,400,000,000 6,104,212
-----------
14,173,231
-----------
Textiles 0.1%
Kolon Industries, Inc., 0.25%, 12/31/2004 ..................................... U.S.$ 1,000,000 350,000
-----------
Durables 0.5%
Tires
Hankook Tire Manufacturing Co. Ltd., Zero Coupon with 5.83% bonus interest at
maturity, 12/31/2002 (b) (e) ............................................... 1,890,000,000 4,790,651
-----------
Manufacturing 0.6%
Containers & Paper
Dae Young Packaging Co. #20, 5% with 41.567% bonus interest at
maturity, 12/31/2000 (b) (e) ................................................ 1,000,000,000 1,105,733
Hansol Paper Manufacturing Co. Ltd., 3% with 28.24% bonus interest at
maturity, 12/31/1999 (b) (e) ................................................ 4,000,000,000 4,307,539
-----------
5,413,272
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio
<TABLE>
<CAPTION>
===================================================================================================================================
Principal Market
Amount (d) Value ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Technology 1.1%
Electronic Components / Distributors 0.6%
Hyundai Electronics Industries Co. #86, Zero Coupon with 35.54% bonus interest at
maturity, 12/31/2000 (b) (e) .................................................................. 5,000,000,000 5,193,149
-----------
Semiconductors 0.2%
D.I. Corporation, 3% with 34.44% bonus interest at maturity, 12/31/2000 (b) (e) ................. 1,604,800,000 1,673,408
-----------
Miscellaneous 0.3%
Kasan Electronics, 5% with 14% bonus interest at maturity, 12/31/2000 (b) (e) (h)* .............. 3,000,000,000 2,713,918
-----------
Transportation 0.4%
Marine Transportation
Hanjin Shipping Company, Zero Coupon with 35.25% bonus interest at
maturity, 12/31/1999 (b) (e) .................................................................. 2,000,000,000 2,245,025
Hyundai Merchant & Marine Co., Zero Coupon with 34.13% bonus interest at
maturity, 12/31/2000 (b) (e) .................................................................. 1,500,000,000 1,541,737
-----------
3,786,762
-----------
Utilities 1.6%
Electric Utilities
Korea Electric Power Co. #6, 5% with 9.5% bonus interest at maturity,
12/31/2000 (b) (e) ............................................................................ 9,951,000,000 14,509,280
-----------
Total Convertible Bonds (Cost $43,805,578) ...................................................... 52,603,671
-----------
- -----------------------------------------------------------------------------------------------------------------------------------
Shares
- -----------------------------------------------------------------------------------------------------------------------------------
Preferred Stocks 5.9%
Consumer Discretionary 0.0%
Hotels & Casinos
Hotel Shilla Co., Ltd.* ......................................................................... 32,070 221,650
-----------
Consumer Staples 0.8%
Food & Beverage 0.6%
Cheil Jedang Corp. .............................................................................. 100,670 3,270,144
Cheil Jedang Corp. (2nd) ........................................................................ 50,335 1,824,236
Nam Yang Dairy Products Co., Ltd. (g) ........................................................... 1,160 110,739
-----------
5,205,119
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio
===============================================================================
Principal Market
Amount (d) Value ($)
- -------------------------------------------------------------------------------
Textiles 0.2%
BYC Co., Ltd. (g) ............................ 14,130 573,745
Kolon Industries, Inc. ....................... 225,910 1,522,331
Kolon Industries, Inc. (2nd) * ............... 11,295 82,163
----------
2,178,239
----------
Health 0.1%
Medical Supply & Specialty 0.0%
Medison Co., Ltd. ............................ 20,000 149,460
----------
Pharmaceuticals 0.1%
Korea Green Cross Corp. ...................... 6,700 143,551
Korea Green Cross Corp. (New) ................ 2,852 56,670
----------
200,221
----------
Financial 2.2%
Insurance
Samsung Fire & Marine Insurance Co. (g) ...... 53,385 19,370,799
----------
Durables 0.4%
Automobiles
Hyundai Motor Co., Ltd. (2nd) ................ 153,918 1,555,802
Hyundai Motor Co., Ltd. ...................... 170,000 2,056,156
----------
3,611,958
----------
Manufacturing 0.4%
Chemicals
LG Chemical Co., Ltd. ........................ 134,800 1,857,503
Oriental Chemical Industries Co., Ltd......... 116,380 1,427,729
----------
3,285,232
----------
Technology 1.8%
Electronic Components / Distributors
Samsung Display Devices Co. .................. 34,318 1,082,166
Samsung Electro-Mechanics Co., Ltd. .......... 180,000 3,662,203
Samsung Electronics Co., Ltd. ................ 198,201 11,044,462
----------
15,788,831
----------
The accompanying notes are an integral part of the financial statements.
14
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio
===============================================================================
Principal Market
Amount (d) Value ($)
- -------------------------------------------------------------------------------
Construction 0.0%
Building Materials
Tong Yang Cement Co., Ltd.* ............. 50,000 183,801
Tong Yang Cement Co., Ltd. (2nd)* ....... 26,119 83,491
----------
267,292
----------
Transportation 0.2%
Airlines 0.1%
Korean Airlines Co., Ltd. ............... 80,320 926,369
Korean Airlines Co., Ltd. (2nd) ......... 20,080 312,259
----------
1,238,628
----------
Trucking 0.1%
Global Enterprises Co., Ltd. ............ 25,500 409,762
----------
Total Preferred Stocks (Cost $25,750,216) 51,927,191
----------
Common Stocks 86.2%
Construction 0.1%
Miscellaneous
Dae Ho Construction ..................... 84,559 1,241,903
----------
Consumer Discretionary 1.7%
Department & Chain Stores 1.0%
Shinsegae Department Store .............. 119,014 8,472,357
----------
Hotels & Casinos 0.7%
Hotel Shilla Co., Ltd.* ................. 548,391 6,111,658
----------
Consumer Staples 4.5%
Consumer Specialties 0.1%
Pacific Corp., Ltd. ..................... 20,000 483,801
----------
Food & Beverage 2.5%
Cheil Jedang Corp. ...................... 83,004 6,532,755
Nam Yang Dairy Products Co., Ltd. (g) ... 43,390 7,422,220
Nhong Shim Co., Ltd. .................... 76,164 4,888,972
Pulmuone Co., Ltd. ...................... 118,129 3,418,852
----------
22,262,799
----------
Package Goods / Cosmetics 0.1%
Hankook Cosmetics Co. ................... 500,000 1,360,691
----------
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio
================================================================================
Market
Shares Value ($)
- --------------------------------------------------------------------------------
Textiles 1.8%
BYC Co., Ltd. (g) .................................... 52,530 4,628,994
Dae Ha Fashion Co.* .................................. 10,000 266,091
Daehan Synthetic Fiber Company ....................... 2,610 189,408
Hankook Synthetics, Inc. (Rights)* (b) ............... 22,052 226,712
Hankook Synthetics, Inc. ............................. 48,240 1,792,069
Kolon Industries, Inc. ............................... 43,017 620,634
Tae Kwang Industry Company ........................... 11,760 7,081,400
Vivien Corp. ......................................... 25,000 1,088,553
------------
15,893,861
------------
Health 2.1%
Medical Supply & Specialty 0.6%
Medison Co., Ltd. .................................... 329,760 5,241,973
------------
Pharmaceuticals 1.5%
Chong Kun Dang Corp. ................................. 115,005 2,364,682
Daewoong Pharmaceutical Co. .......................... 54,392 1,299,299
Korea Green Cross Corp. .............................. 31,851 1,485,921
Yuhan Corporation .................................... 178,167 8,050,224
------------
13,200,126
------------
Communications 22.6%
Cellular Telephone 22.0%
SK Telecom Co., Ltd. (c) (f) ......................... 60,699 82,094,414
SK Telecom Co., Ltd. (Rights)* (b) (f) ............... 13,928 7,321,977
SK Telecom Co., Ltd. (f) ............................. 6,549 8,769,719
SK Telecom Co., Ltd. (Rights)* (b) (f) ............... 1,503 770,003
SK Telecom Co., Ltd. (ADR) (f) ....................... 5,584,780 94,941,260
------------
193,897,373
------------
Telecommunications Equipment 0.6%
LG Information & Communication Ltd. .................. 71,301 5,272,886
------------
Financial 20.1%
Banks 2.1%
Goldbank Co. ......................................... 10,000 182,289
Housing & Commercial Bank* ........................... 250,000 7,883,369
Housing & Commercial Bank (GDR)* ..................... 189,997 5,908,907
The accompanying notes are an integral part of the financial statements.
15
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio
================================================================================
Market
Shares Value ($)
- --------------------------------------------------------------------------------
Kookmin Bank ........................... 50,000 1,015,119
Shin Han Bank .......................... 297,597 3,342,342
-----------
18,332,026
-----------
Insurance 16.8%
Daehan Fire & Marine Insurance Co., Ltd. 52,902 722,118
Hyundai Marine & Fire Insurance Co. .... 44,656 1,639,637
LG Insurance Co., Ltd. ................. 107,192 10,371,926
Oriental Fire & Marine Insurance Co. ... 140,000 2,618,575
Samsung Fire & Marine Insurance Co. (g) 188,552 132,760,156
-----------
148,112,412
-----------
Other Financial Companies 1.2%
Dongwon Securities Co. ................. 230,000 4,232,397
Hyundai Securities ..................... 65,542 2,055,442
Samsung Securities ..................... 83,706 4,483,604
Samsung Securities (Rights)* (b) ....... 23,988 497,375
-----------
11,268,818
-----------
Service Industries 0.9%
Miscellaneous Commercial Services
S1 Corporation (Rights)* (b) ........... 1,347 61,211
S1 Corporation ......................... 19,800 3,814,600
SK Global (Rights)* (b) ................ 18,104 62,562
SK Global .............................. 59,305 589,207
Samsung Co., Ltd.* ..................... 132,785 3,120,304
-----------
7,647,884
-----------
Durables 4.1%
Automobiles 2.1%
Hyundai Motor Co., Ltd. ................ 710,660 16,853,233
Yoosung Enterprise Company ............. 92,700 1,777,918
-----------
18,631,151
-----------
Tires 2.0%
Hankook Tire Manufacturing Co., Ltd. ... 3,238,132 14,043,562
Woosung Tire Co.* ...................... 400,000 3,282,937
-----------
17,326,499
-----------
The accompanying notes are an integral part of the financial statements.
17
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio
================================================================================
Market
Shares Value ($)
- --------------------------------------------------------------------------------
Manufacturing 4.5%
Chemicals 2.5%
Honam Petrochemical Corp., Ltd. ........ 100,000 2,332,613
Korea Chemical Co., Ltd. ............... 91,440 8,215,775
Kumho Chemicals Inc.* .................. 197,040 2,893,892
LG Chemical Co., Ltd. .................. 321,949 8,761,463
Oriental Chemical Industries Co., Ltd. . 8,185 199,410
-----------
22,403,153
-----------
Containers & Paper 0.1%
Dae Young Packaging Co., Ltd.* ......... 25,383 151,311
Korea Export Packaging Industries ...... 29,214 451,776
-----------
603,087
-----------
Diversified Manufacturing 0.9%
Hyundai Heavy Industries ............... 120,000 5,339,093
Samsung Heavy Industries Co., Ltd.* .... 413,550 2,250,855
-----------
7,589,948
-----------
Electrical Products 0.1%
Century Corp. .......................... 114,086 1,212,318
-----------
Industrial Specialty 0.3%
Hankuk Glass Industries Co., Ltd. (GDR)* 122,937 673,080
Samsung Radiator Industrial Co. ........ 35,440 2,235,093
-----------
2,908,173
-----------
Office Equipment / Supplies 0.3%
Sindo Ricoh Co., Ltd. .................. 51,000 2,731,749
-----------
Specialty Chemicals 0.3%
Korea Fine Chemical Co. ................ 60,000 2,374,082
-----------
Technology 13.8%
Electronic Components / Distributors
Dae Duck Electronics Co., Ltd. ......... 510,880 5,561,199
LG Electronics ......................... 100,000 2,764,579
Samsung Display Devices Co. ............ 321,246 17,484,664
Samsung Electro-Mechanics Co., Ltd. .... 921,005 31,827,387
Samsung Electronics Co., Ltd. .......... 580,759 63,720,426
-----------
121,358,255
-----------
The accompanying notes are an integral part of the financial statements.
18
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio
<TABLE>
<CAPTION>
=========================================================================================
Market
Shares Value ($)
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Energy 2.2%
Oil & Gas Production
SK Corporation ............................................ 524,256 15,082,268
Ssangyong Oil Refining Co. ................................ 165,370 4,286,048
-----------
19,368,316
-----------
Metals & Minerals 6.1%
Steel & Metals
Pohang Iron & Steel Co., Ltd. (c) (f) ..................... 275,762 33,291,561
Pohang Iron & Steel Co., Ltd. (f) ......................... 169,320 20,040,467
-----------
53,332,028
-----------
Construction 1.8%
Building Materials
Asia Cement Manufacturing Co. ............................. 30,000 738,661
Keum Kang Co., Ltd. ....................................... 234,337 14,778,921
-----------
15,517,582
-----------
Transportation 0.6%
Airlines 0.2%
Korean Air Lines Co., Ltd. ................................ 80,000 1,555,076
-----------
Marine Transportation 0.4%
Hyundai Merchant Marine Co. ............................... 288,035 3,757,519
-----------
Utilities 1.1%
Electric Utilities 0.2%
Korea Electric Power Co. .................................. 50,000 2,077,754
-----------
Natural Gas Distribution 0.9%
Daehan City Gas Co. ....................................... 126,179 4,251,387
Daesung Industries Co., Ltd. .............................. 61,287 2,276,752
Samchully Company ........................................ 31,504 1,328,206
-----------
7,856,345
-----------
Total Common Stocks (Cost $275,082,933) ................... 759,403,603
-----------
- -----------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $360,213,148) (a) 881,381,129
===========
- -----------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
19
<PAGE>
[LOGO] The Korea Fund, Inc.
Investment Portfolio
================================================================================
- --------------------------------------------------------------------------------
* Non-income producing security.
(a) The cost for federal income tax purposes was $362,949,399. At June 30,
1999, net unrealized appreciation for all securities based on tax cost was
$518,431,730. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over tax
cost of $537,160,087 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$18,728,357.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $63,864,675 (7.21% of net assets).
Their values have been estimated by the Board of Directors in the absence
of readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of
these securities at June 30, 1999 aggregated $45,324,953. These securities
may also have certain restrictions as to resale (See Note A to the Notes
to Financial Statements).
(c) Certain investments in Korean equity securities that have met the limit
for aggregate foreign ownership and for which premiums to the local stock
exchange prices are offered by prospective foreign investors. The
aggregate premium of $1,465,367 over the local share price of $113,920,608
for these securities valued by the Valuation Committee was approximately
0.2% of the Fund's net assets at June 30, 1999. The cost of these
securities at June 30, 1999 was $21,472,391 (See Notes A and D to the
Notes to Financial Statements). Their values have been estimated by the
Board of Directors in the absence of readily ascertainable market values
or other market factors, respectively. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material.
(d) Principal amount stated in Korean won unless otherwise noted. U.S.$
represents United States Dollars.
(e) Bonus interest represents the amount available to be paid to the holder at
maturity in lieu of conversion.
(f) At June 30, 1999, 28% of the Fund's net assets were invested in SK Telecom
Co., Ltd. and Pohang Iron & Steel Co., Ltd.
(g) Affiliated issuers (See Note F to the Notes to Financial Statements).
(h) Kasan Electronics is currently in default on the payment of coupon
interest.
The accompanying notes are an integral part of the financial statements.
20
<PAGE>
[LOGO] The Korea Fund, Inc.
Financial Statements
================================================================================
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
June 30, 1999
- --------------------------------------------------------------------------------
ASSETS
Investments, at market:
Unaffiliated issuers (identified cost $314,770,271) .......... $ 716,514,476
Affiliated issuers (identified cost $45,442,877) ............. 164,866,653
-------------
Total investments, at market (identified cost $360,213,148) .. 881,381,129
Won at market (identified cost $398,713) ..................... 398,390
Receivables:
Proceeds from maturities ..................................... 977,437
Dividends and interest ....................................... 1,379,973
Unrealized appreciation on forward currency exchange contracts 26,530,198
Other assets ................................................. 7,841
-------------
Total assets ................................................. 910,674,968
-------------
LIABILITIES
Payables:
Accrued management fee ....................................... 687,539
Unrealized depreciation on forward currency exchange contracts 23,018,798
Other payables and accrued expenses .......................... 782,614
Total liabilities ............................................ 24,488,951
-------------
Net assets, at market value .................................. $ 886,186,017
=============
NET ASSETS
Net assets consist of:
Accumulated distributions in excess of net investment income . $ (1,234,712)
Net unrealized appreciation (depreciation) on:
Investments .................................................. 521,167,981
Won .......................................................... (323)
Won related transactions ..................................... 3,724,184
Accumulated net realized loss ................................ (167,370,586)
Paid-in capital .............................................. 529,899,473
-------------
Net assets, at market value .................................. $ 886,186,017
=============
Net asset value per share ($886,186,017 / 49,999,999 shares of
common stock $17.72 issued and outstanding, 200,000,000
shares authorized, $.01 par value).......................... $17.72
============
The accompanying notes are an integral part of the financial statements.
21
<PAGE>
[LOGO] The Korea Fund, Inc.
Financial Statements
<TABLE>
<CAPTION>
====================================================================================
- ------------------------------------------------------------------------------------
Statement of Operations
Year Ended June 30, 1999
- ------------------------------------------------------------------------------------
<S> <C>
Investment Income
Income:
Dividends -- Unaffiliated issuers ................................ $ 3,952,359
Dividends -- Affiliated issuers .................................. 561,924
Interest ......................................................... 5,147,983
Korean withholding tax ........................................... (1,479,337)
--------------
8,182,929
--------------
Expenses:
Management fee ................................................... 4,929,376
Custodian and accounting fees .................................... 777,840
Directors' fees and expenses ..................................... 216,137
Legal ............................................................ 98,339
Auditing ......................................................... 112,492
Reports to shareholders .......................................... 120,095
Services to shareholders ......................................... 61,840
Other ............................................................ 98,467
--------------
6,414,586
--------------
Net investment income (loss) ..................................... 1,768,343
--------------
Net realized and unrealized gain (loss) on investment transactions
Net realized gain (loss) during the period on:
Investments ...................................................... (61,334,315)
Foreign currency related transactions ............................ 6,046,152
--------------
(55,288,163)
--------------
Net unrealized appreciation (depreciation) during the period on:
Investments ...................................................... 656,302,310
Won .............................................................. (1,570,744)
Won related transactions ......................................... 3,699,341
--------------
658,430,907
--------------
Net gain (loss) on investment transactions ....................... 603,142,744
-------------
Net increase (decrease) in net assets resulting from operations .. $ 604,911,087
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
22
<PAGE>
[LOGO] The Korea Fund, Inc.
Financial Statements
<TABLE>
<CAPTION>
==============================================================================================================
- -------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------------------------------------
Years Ended June 30,
Increase (Decrease) in Net Assets 1999 1998
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income (loss) ........................................ $ 1,768,343 $ 3,651,927
Net realized gain (loss) from investment transactions ............... (55,288,163) (136,184,210)
Net unrealized appreciation (depreciation) on investment
during the period transactions.................................... 658,430,907 (247,288,494)
------------- -------------
Net increase (decrease) in net assets resulting from operations ..... 604,911,087 (379,820,777)
------------- -------------
Increase (decrease) in net assets ................................... 604,911,087 (379,820,777)
Net assets at beginning of period ................................... 281,274,930 661,095,707
------------- -------------
Net assets at end of period (including accumulated distributions
in excess of net investment income of $1,234,712 and
$31,076,382, respectively)........................................ $ 886,186,017 $ 281,274,930
============= =============
Other Information
Increase (decrease) in Fund Shares
Shares outstanding at beginning of period ........................... 49,999,999 49,999,999
Shares issued to shareholders in reinvestment of distributions ...... -- --
------------- -------------
Net increase (decrease) in Fund shares .............................. -- --
------------- -------------
Shares outstanding at end of period ................................. 49,999,999 49,999,999
============= =============
The accompanying notes are an integral part of the financial statements.
</TABLE>
23
<PAGE>
[LOGO] The Korea Fund, Inc.
Financial Highlights
<TABLE>
<CAPTION>
========================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout each period and other performance
information derived from the financial statements and market price data.
- ------------------------------------------------------------------------------------------------------------------------
Years Ended June 30,
----------------------------------------------------------
1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period ...................... $ 5.63 $ 13.22 $ 18.52 $ 19.89 $ 18.66
------- ------- ------- ------- -------
Income from investment operations (a):
Net investment income (loss) .............................. .04 .07 .07 .02 (.02)
Net realized and unrealized gain (loss) on investment
transactions ........................................... 12.05 (7.66) (4.48) (.97) 2.42
------- ------ ------ ------ -------
Total from investment operations .......................... 12.09 (7.59) (4.41) (.95) 2.40
------- ------ ------ ------ -------
Less distributions:
From net investment income ................................ -- -- -- (.06) --
From net realized gains on investment transactions ........ -- -- (.60) (.36) (.15)
------- ------- ------ ------ ------
Total distributions ....................................... -- -- (.60) (.42) (.15)
------- ------- ------ ------ ------
Antidilution (dilution) resulting from the rights offering
(1997 and 1995), and reinvestment of distributions for
shares at market value ................................. -- -- (.29) -- (1.02)
------- ------- ------ ------- ------
Net asset value, end of period ............................ $ 17.72 $ 5.63 $ 13.22 $ 18.52 $ 19.89
======= ======= ======= ======= =======
Market value, end of period ............................... $ 14.88 $ 6.31 $ 14.75 $ 21.13 $ 19.63
======= ======= ======= ======= =======
Total Return
Per share market value (%) ................................ 135.64 (57.20) (26.11) 9.73 (5.43)
Per share net asset value (%) (b) ......................... 214.74 (57.41) (24.40) (5.09) 13.00
Ratios and Supplemental Data
Net assets, end of period ($ millions) .................... 886 281 661 689 735
Ratio of operating expenses to average net assets (%) ..... 1.36 1.38 1.28 1.28 1.32
Ratio of net investment income (loss) to average net
assets (%) ............................................. .37 .90 .46 .10 (.10)
Portfolio turnover rate (%) ............................... 9.9 24.3 12.9 32.6 10.5
</TABLE>
(a) Based on monthly average of shares outstanding during each period.
(b) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
24
<PAGE>
[LOGO] The Korea Fund, Inc.
Notes to Financial Statements
================================================================================
A. Significant Accounting Policies
-------------------------------
The Korea Fund, Inc. (the "Fund") is registered under the Investment Company Act
of 1940, as amended, as a non-diversified, closed-end management investment
company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Investments are stated at value determined as of the close
of regular trading on the New York Stock Exchange. Securities which are traded
on the U.S. or foreign stock exchanges are valued at the most recent sale price
reported on the exchange on which the security is traded most extensively. If no
sale occurred, the security is then valued at the calculated mean between the
most recent bid and asked quotations. If there are no such bid and asked
quotations, the most recent bid quotation is used. Money Market investments
purchased with an original maturity of sixty days or less are valued at
amortized cost. All other securities are valued at fair value as determined in
good faith by the Valuation Committee of the Board of Directors.
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Investment securities and other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
prevailing exchange rates at period end. Purchases and sales of investment
securities, income and expenses are translated into U.S. dollars at the
prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses between trade and settlement dates on securities
transactions, the disposition of forward foreign currency exchange contracts and
foreign currencies, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. That portion of
both realized and unrealized gains and losses on investments that results from
fluctuations in foreign currency exchange rates is not separately disclosed but
is included with net realized and unrealized gains and losses on investment
securities.
At June 30, 1999 the exchange rate for Korean Won was U.S. $.000864 to W 1.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is required to
be maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
Dividend Income. Korean-based corporations have generally adopted calendar
year-ends, and their corporate actions are normally approved by their boards of
directors and shareholders in the first quarter of each calendar year.
Accordingly, dividend income from Korean equity investments is earned and
received by the Fund primarily in the first calendar quarter of each year. As a
result, the Fund, which has a June 30 year end, receives substantially less
dividend income in the first half of its year than in the second half of such
year.
Forward Foreign Currency Exchange Contracts. A forward foreign currency exchange
contract (forward contract) is a commitment to purchase or sell a foreign
currency at the settlement date at a negotiated rate. During the period, the
Fund utilized forward contracts as a hedge against changes in the exchange rates
relating to foreign currency denominated assets.
25
<PAGE>
[LOGO] The Korea Fund, Inc.
Notes to Financial Statements
================================================================================
Forward contracts are valued at the prevailing forward exchange rate of the
underlying currencies and unrealized gain/loss is recorded daily. Sales and
purchases of forward contracts having the same settlement date and broker are
offset and any gain (loss) is realized on the date of offset; otherwise, gain
(loss) is realized on settlement date. Realized and unrealized gains and losses
which represent the difference between the value of a forward contract to buy
and a forward contract to sell are included in net realized and unrealized gain
(loss) from foreign currency related transactions.
Certain risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contra ts. Additionally,
when utilizing forward contracts to hedge, the Fund gives up the opportunity to
profit from favorable exchange rate movements during the term of the contract.
Taxes. The Fund's policy is to comply with the requirements of the Internal
Revenue Code of 1986, as amended, which are applicable to regulated investment
companies and to distribute all of its taxable income to its shareholders.
Accordingly, the Fund paid no federal income taxes and no federal income tax
provision was required. In addition, from November 1, 1998 through June 30,
1999, the Fund incurred approximately $2,854,000 of net realized capital losses.
As permitted by tax regulations, the Fund intends to elect to defer these losses
and treat them as arising in the fiscal year ending June 30, 2000. At June 30,
1999, the Fund had a net tax basis capital loss carryforward of approximately
$162,828,000 which may be applied against any realized net taxable capital gains
of each succeeding year until fully utilized or until June 30, 2006
($14,335,000) and June 30, 2007 ($148,493,000), the respective expiration dates,
whichever occurs first.
Under the United States-Korea Income Tax Treaty (the "Treaty"), as presently in
effect, the government of Korea imposes a nonrecoverable withholding tax and
resident tax aggregating 16.5% on dividends and 13.2% on interest earned by the
Fund from Korean issuers. Under the Treaty, there is no Korean withholding tax
on realized capital gains.
Distribution of Income and Gains. Distributions of net investment income, if
any, are made annually. Net realized gains from investment transactions, in
excess of available capital loss carryforwards, would be taxable to the Fund if
not distributed and, therefore, will be distributed to shareholders at least
annually.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in foreign denominated investments
and certain securities sold at a loss and forward contracts. As a result, net
investment income (loss), net realized gain (loss) on investment transactions
for a reporting period may differ significantly from distributions during such
period. Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting the net asset value of the
Fund.
Subscriptions for New Shares. As part of their annual corporate action matters,
certain Korean companies offer rights to their shareholders to subscribe to new
shares which are eligible for a portion of the dividends paid on existing shares
in the year of subscription. The Fund follows a policy of subscribing to new
share offerings by Korean companies.
Investment Transactions and Investment Income. Investment transactions are
accounted for on trade date. Interest income is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date. Realized gains and losses
from investment transactions are recorded on an identified cost basis. All
discounts are accreted for both tax and financial reporting purposes.
26
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[LOGO] The Korea Fund, Inc.
Notes to Financial Statements
================================================================================
B. Purchases and Sales of Securities
---------------------------------
During the year ended June 30, 1999, purchases and sales of investment
securities (excluding short-term investments) aggregated $103,405,093 and
$43,303,898, respectively.
C. Related Parties
---------------
Under the Management Agreement (the "Agreement") with Scudder Kemper
Investments, Inc. ("Scudder Kemper" or the "Manager"), the Manager directs the
investments of the Fund in accordance with its investment objectives, policies,
and restrictions. The Manager determines the securities, instruments and other
contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Manager provides certain
administrative services in accordance with the Agreement. The management fee
payable under the Agreement is equal to an annual rate of 1.15% of the Fund's
month-end net assets up to and including $50,000,000, 1.10% of such net assets
on the next $50,000,000, 1% of such net assets on the next $250,000,000, 0.95%
of such net assets on the next $400,000,000, and 0.90% of such net assets in
excess of $750,000,000. For the year ended June 30, 1999, the fee pursuant to
such Agreement amounted to $4,929,376 which was equivalent to an annual
effective rate of 1.04% of the Fund's average month-end net assets.
Under the Agreement, the Manager pays Daewoo Capital Management Co., Ltd. (the
"Korean Adviser") a monthly fee, equal to an annual rate of 0.2875% of the first
$50,000,000 of the Fund's month-end net assets, 0.275% of such net assets on the
next $50,000,000, and 0.25% of such net assets on the next $250,000,000, 0.2375%
of such net assets on the next $400,000,000, and 0.225% of such net assets in
excess of $750,000,000.
For the year ended June 30, 1999, there were no brokerage commissions on
investment transactions paid by the Fund to Daewoo Securities Co., Ltd., the
parent company of the Korean Adviser.
Scudder Service Corporation ("SSC"), a subsidiary of the Manager, provides
shareholder communications services for the Fund. For the year ended June 30,
1999 the amount charged to the Fund by SSC aggregated $15,000, of which $1,250
is unpaid at June 30, 1999.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Manager, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
June 30, 1999, the amount charged to the Fund by SFAC aggregated $238,953, of
which $19,700 is unpaid at June 30, 1999.
The Fund pays each Director not affiliated with the Manager or the Korean
Adviser $6,000 annually plus specified amounts for attended board and committee
meetings. For the year ended June 30, 1999, Directors' fees and expenses
amounted to $216,137.
D. Foreign Investment and Exchange Controls in Korea
-------------------------------------------------
The Foreign Exchange Transaction Act, the Presidential Decree relating to such
Act and the regulations of the Minister of Finance and Economy issued thereunder
impose certain limitations and controls which generally affect foreign investors
in Korea. The Fund has obtained from the Minister of Finance and Economy a
license to invest in Korean securities and to repatriate income received from
dividends and interest earned on, and net realized capital gain from, its
investments in Korean securities or to repatriate from investment principal up
to 10% of the net asset value (taken at current value) of the Fund (except upon
termination of the Fund, or for
27
<PAGE>
[LOGO] The Korea Fund, Inc.
Notes to Financial Statements
================================================================================
expenses in excess of Fund income, in which case the foregoing restriction shall
not apply). The Minister of Finance and Economy may, when it deems it to be in
the public interest, modify the Fund's license to invest in Korean securities
or, according to the terms of the license, revoke it in the event of the Fund's
noncompliance with conditions of the license or a material violation of Korean
law. The Minister of Finance and Economy may issue orders when it deems that
transactions can not be normally concluded due to natural disaster, warfare,
uprising, sudden change in economic conditions, or other incidents similar
thereto, or order the temporary closing of the securities market or take other
necessary measures. Under the Foreign Exchange Transaction Act, the Minister of
Finance and Economy has the power, with prior public notice of scope and
duration, to suspend all or a part of foreign exchange transactions when
emergency measures are deemed necessary in case of radical change in the
international or domestic economic situation. The Fund could be adversely
affected by delays in, or the refusal to grant, any required governmental
approval for such transactions.
In 1998, the Korean Minister of Finance and Economy and the FSC abolished
certain restrictions with respect to investing in equity securities of Korean
companies listed on the Korea Stock Exchange, with the exception of certain
designated public corporations and telecommunication corporations. As of June
30, 1999, two of the Fund's holdings had ownership limits still in place: Pohang
Iron & Steel, which had a foreign ownership limit of 30%, and SK Telecom, which
had a foreign ownership limit of 33%. Effective July 1, 1999, the foreign
ownership limit for SK Telecom, a telecommunication corporation, increased from
33% to 49%.
E. Investing in the Korean Market
------------------------------
Investing in the Korean market may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currency, high rates of inflation, Korean taxes, repatriation
restrictions on income and capital, corporate bankruptcy and future adverse
political and economic developments.
Moreover, securities issued in this market may be less liquid, subject to
government ownership controls, delayed settlements, and their prices more
volatile than those of comparable securities in the United States.
At June 30, 1999, proceeds from maturities of $977,437 (0.1% of net assets) are
due from a company in the process of restructuring its debt. This amount has
been valued in good faith by the Valuation Committee of the Board of Directors.
F. Transactions in Securities of Affiliated Issuers
------------------------------------------------
An affiliated issuer is a company in which the Fund has ownership of at least 5%
of the voting securities. A summary of the Fund's transactions during the period
with companies which are or were affiliates are as follows:
<TABLE>
<CAPTION>
Purchases Sales Dividend Market
Affiliate Cost ($) Cost ($) Income ($) Value ($)
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BYC Co., Ltd. 1,054,290 -- 28,692 5,202,739
Nam Yang Dairy Products Co. -- -- 28,156 7,532,959
Samsung Fire & Marine Insurance Co. 14,957,555 269,743 505,076 152,130,955
---------------- ------------- ------------- ----------------
16,011,845 269,743 561,924 164,866,653
================ ============= ============= ================
</TABLE>
28
<PAGE>
[LOGO] The Korea Fund, Inc.
Notes to Financial Statements
================================================================================
G. Commitments
-----------
As of June 30, 1999, the Fund had entered into the following forward foreign
currency exchange contracts resulting in net unrealized appreciation of
$3,511,400.
<TABLE>
<CAPTION>
Net Unrealized
Appreciation
Settlement (Depreciation)
Contracts to Deliver In Exchange For Date (U.S.$)
------------------------------------- ------------------------------------ --------------- --------------------
<S> <C> <C> <C> <C> <C>
KRW 11,735,911,000 USD 8,553,871 8/4/1999 1,584,712
KRW 5,944,875,000 USD 4,283,051 8/9/1999 852,322
KRW 6,255,250,000 USD 4,359,059 8/11/1999 1,044,270
KRW 8,535,181,000 USD 5,826,062 8/13/1999 1,546,474
KRW 37,388,250,000 USD 25,942,984 8/27/1999 6,345,808
KRW 6,255,250,000 USD 4,319,924 8/31/1999 1,081,846
KRW 10,199,400,000 USD 6,915,434 9/1/1999 1,892,218
KRW 23,270,400,000 USD 18,758,888 2/25/2000 1,245,302
KRW 34,905,600,000 USD 28,374,615 8/25/1999 1,771,013
KRW 23,270,400,000 USD 18,903,656 8/31/1999 1,191,681
KRW 17,596,800,000 USD 14,175,763 9/2/1999 1,019,654
KRW 17,625,600,000 USD 14,153,357 9/3/1999 1,066,719
KRW 53,481,600,000 USD 42,406,673 9/8/1999 3,772,496
KRW 7,102,080,000 USD 5,592,189 3/16/2000 510,281
KRW 23,673,600,000 USD 18,833,413 9/16/1999 1,605,403
USD 8,810,744 KRW 11,735,911,000 8/4/1999 (1,327,839)
USD 4,419,981 KRW 5,944,875,000 8/9/1999 (715,392)
USD 4,468,036 KRW 6,255,250,000 8/11/1999 (935,293)
USD 5,989,601 KRW 8,535,181,000 8/13/1999 (1,382,935)
USD 26,705,893 KRW 37,388,250,000 8/27/1999 (5,582,899)
USD 4,474,428 KRW 6,255,250,000 8/31/1999 (927,343)
USD 7,167,533 KRW 10,199,400,000 9/1/1999 (1,640,118)
USD 18,949,837 KRW 23,270,400,000 2/25/2000 (1,054,353)
USD 28,611,148 KRW 34,905,600,000 8/25/1999 (1,534,481)
USD 19,074,098 KRW 23,270,400,000 8/31/1999 (1,021,238)
USD 14,306,341 KRW 17,596,800,000 9/2/1999 (889,076)
USD 14,306,494 KRW 17,625,600,000 9/3/1999 (913,582)
USD 42,888,212 KRW 53,481,600,000 9/8/1999 (3,290,957)
USD 19,060,870 KRW 23,673,600,000 9/16/1999 (1,377,946)
USD 5,677,122 KRW 7,102,080,000 3/16/2000 (425,347)
----------------
3,511,400
================
</TABLE>
Currency Abbreviations
--------------------------------
KRW Korean Won
USD US Dollar
29
<PAGE>
[LOGO] The Korea Fund, Inc.
Notes to Financial Statements
================================================================================
H. Line of Credit
--------------
The Fund and several Scudder Funds (the "Participants") share in a $850 million
revolving credit facility for temporary or emergency purposes that otherwise
might require the untimely disposition of securities. The Participants are
charged an annual commitment fee which is allocated pro rata among each of the
Participants. Interest is calculated based on the market rates at the time of
the borrowing. The Fund may borrow up to a maximum of 5 percent of its net
assets under the agreement.
30
<PAGE>
[LOGO] The Korea Fund, Inc.
Report of Independent Accountants
================================================================================
To the Board of Directors and the Shareholders of The Korea Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Korea Fund, Inc. (the "Fund")
at June 30, 1999, the results of its operations, the changes in its net assets,
and the financial highlights for the periods indicated therein, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at June 30, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
Boston, Massachusetts PricewaterhouseCoopers LLP
August 11, 1999
31
<PAGE>
[LOGO] The Korea Fund, Inc.
Tax Information
================================================================================
Due to the nature of its investments, the Fund pays foreign taxes to the
Republic of Korea throughout the year. As in prior years, the Fund may make an
election under Section 853 of the Internal Revenue Code. This election would
allow shareholders to treat their proportionate share of foreign taxes paid by
the Fund as having been paid directly by them. Additionally, shareholders would
be required to report their proportionate share of such taxes paid as gross
income (in addition to other amounts of reportable distributions paid by the
Fund).
The Fund earned income in and paid taxes to the Republic of Korea of $1,479,337
($.03 per share) during the year ended June 30, 1999.
Please consult a tax advisor if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your Korea Fund account, please call 800-426-5523.
32
<PAGE>
[LOGO] The Korea Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
The Plan
The Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan") offers
you an automatic way to reinvest your dividends and capital gains distributions
in shares of the Fund. The Plan also provides for cash investments in Fund
shares of $100 to $3,000 semiannually through EquiServe, the Plan Agent.
Automatic Participation
Each stockholder of record is automatically a participant in the Plan unless
the stockholder has instructed the Plan Agent in writing otherwise. Such a
notice must be received by the Plan Agent not less than 10 days prior to the
record date for a dividend or distribution in order to be effective with respect
to that dividend or distribution. A notice which is not received by that time
will be effective only with respect to subsequent dividends and distributions.
Stockholders who do not participate in the Plan will receive all
distributions in cash paid by check in dollars mailed directly to the
stockholder by EquiServe, as dividend paying agent.
Shares Held by a Nominee
If your shares are held in the name of a brokerage firm, bank, or other
nominee as the stockholder of record, please consult your nominee (or any
successor nominee) to determine whether it is participating in the Plan on your
behalf. Many nominees are generally authorized to receive cash dividends unless
they are specifically instructed by a client to reinvest. If you would like your
nominee to participate in the Plan on your behalf, you should give your nominee
instructions to that effect as soon as possible.
Pricing of Dividends and Distributions
If the market price per share on the payment date for the dividend or
distribution (the "Valuation Date") equals or exceeds net asset value per share
on that date, the Fund will issue new shares to participants at the greater of
the following on the Valuation Date: (a) net asset value, or (b) 95% of the mean
market price. The Valuation Date will be the dividend or distribution payment
date or, if that date is not a New York Stock Exchange trading date, the next
preceding trading date. If the net asset value exceeds the market price of Fund
shares at such time, participants in the Plan are considered to have elected to
receive shares of stock from the Fund, valued at market price, on the Valuation
Date. In either case, for Federal income tax purposes, the stockholder receives
a distribution equal to the market value on Valuation Date of new shares issued.
State and local taxes may also apply. If the Fund should declare an income
dividend or net capital gains distribution payable only in cash, the Plan Agent
will, as agent for the participants, buy Fund shares in the open market, on the
New York Stock Exchange or elsewhere, for the participants' account on, or
shortly after, the payment date.
Voluntary Cash Purchases
Participants in the Plan have the option of making additional cash payments
to the Plan Agent, semiannually, in any amount from $100 to $3,000, for
investment in the Fund's shares. The Plan Agent will use all such monies
received from participants to purchase Fund shares in the open market on or
about February 15 and August 15. Any voluntary cash payments received more than
30 days prior to these dates will be returned by the Plan Agent, and interest
will not be paid on any uninvested cash payments. To avoid unnecessary cash
accumulations, and also to allow ample time for receipt and processing by the
Plan Agent, it is suggested that participants send in voluntary cash payments to
be received by the Plan Agent approximately ten days before February 15, or
August 15, as the case may be. A participant may withdraw a voluntary cash
payment by written notice, if the notice is received by the Plan Agent
33
<PAGE>
[LOGO] The Korea Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
not less than 48 hours before such payment is to be invested.
Participant Plan Accounts
The Plan Agent maintains all participant accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information
needed by participants for personal and tax records. Shares in the account of
each plan participant will be held by the Plan Agent in non-certificated form in
the name of the participant, and each participant will be able to vote those
shares purchased pursuant to the Plan at a stockholder meeting or by proxy.
No Service Fee to Reinvest
There is no service fee charged to participants for reinvesting dividends or
distributions from net realized capital gains. The Plan Agent's fees for the
handling of the reinvestment of dividends and capital gains distributions will
be paid by the Fund. There will be no brokerage commissions with respect to
shares issued directly by the Fund as a result of dividends or capital gains
distributions payable either in stock or in cash. However, participants will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of any
dividends or capital gains distributions payable only in cash.
Costs for Cash Purchases
With respect to purchases of Fund shares from voluntary cash payments, the
Plan Agent will charge $0.75 for each such purchase for a participant. Each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases of Fund shares in connection
with voluntary cash payments made by the participant.
Brokerage charges for purchasing small amounts of stock for individual
accounts through the Plan are expected to be less than the usual brokerage
charges for such transactions, because the Plan Agent will be purchasing stock
for all participants in blocks and pro-rating the lower commission thus
attainable.
Amendment or Termination
The Fund and the Plan Agent each reserve the right to terminate the Plan.
Notice of the termination will be sent to the participants of the Plan at least
30 days before the record date for a dividend or distribution. The Plan also may
be amended by the Fund or the Plan Agent, but (except when necessary or
appropriate to comply with applicable law, rules or policies of a regulatory
authority) only by giving at least 30 days' written notice to participants in
the Plan.
A participant may terminate his account under the Plan by written notice to
the Plan Agent. If the written notice is received 10 days before the record day
of any distribution, it will be effective immediately. If received after that
date, it will be effective as soon as possible after the reinvestment of the
dividend or distribution.
If a participant elects to sell his shares before the Plan is terminated, the
Plan Agent will deduct a $2.50 fee plus brokerage commissions from the sale
transaction.
Plan Agent Address and Telephone Number
You may obtain more detailed information by requesting a copy of the Plan
from the Plan Agent. All correspondence (including notifications) should be
directed to: The Korea Fund Dividend Reinvestment and Cash Purchase Plan, c/o
EquiServe, P.O. Box 8200, Boston, MA 02266-8200, 1-800-426-5523.
34
<PAGE>
[LOGO] The Korea Fund, Inc.
Officers and Directors
================================================================================
Juris Padegs*
Chairman of the Board and Director
CHANG HEE KIM
Vice Chairman of the Board and Director
ROBERT J. CALLANDER
Director
WILLIAM H. GLEYSTEEN, JR.
Director
DR. SANG C. LEE
Director
TAI HO LEE
Director
WILSON NOLEN
Director
HUGH T. PATRICK
Director
SIDNEY M. ROBBINS
Emeritus Founding Director
NICHOLAS BRATT*
President
BRUCE H. GOLDFARB*
Vice President and Assistant Secretary
JUDITH A. HANNAWAY*
Vice President
KUN-HO HWANG
Vice President
YOUNG H. KIM
Vice President
JOHN J. LEE*
Vice President
ANN M. McCREARY*
Vice President
DONG WOOK PARK
Vice President
JOHN MILLETTE*
Vice President and Secretary
KATHRYN L. QUIRK*
Vice President and Assistant Secretary
JOHN R. HEBBLE*
Treasurer
CAROLINE PEARSON*
Assistant Secretary
* Scudder Kemper Investments, Inc.
35
