Institutional Government Portfolio
Institutional Federal Portfolio
Institutional Cash Portfolio
Institutional Tax-Free Portfolio
345 Park Avenue, New York, New York 10154
(800) 854-8525
Investment Manager
Scudder, Stevens & Clark, Inc.
345 Park Avenue
New York, New York 10154
Distributor
Scudder Investor Services, Inc.
Two International Place
Boston, Massachusetts 02110
Custodian
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
Fund Accounting Agent
Scudder Fund Accounting Corporation
Two International Place
Boston, Massachusetts 02110
Transfer Agent and
Dividend Disbursing Agent
Scudder Service Corporation
P.O. Box 2038
Boston, Massachusetts 02106
Legal Counsel
Sullivan & Cromwell
New York, New York
The Portfolios are neither insured nor guaranteed by the U.S. Government.
Each Portfolio intends to maintain a net asset value per share of $1.00 but
there is no assurance that it will be able to do so.
This report is for the information of the shareholders. Its use in
connection with any offering of the Fund's shares is authorized only in
case of a concurrent or prior delivery of the Fund's current prospectus.
Institutional Government Portfolio
Institutional Federal Portfolio
Institutional Cash Portfolio
Institutional Tax-Free Portfolio
ANNUAL REPORT
DECEMBER 31, 1994
OFFICERS AND DIRECTORS
Board of Directors
DAVID S. LEE(1) Chairman of the Board; Managing Director,
Scudder, Stevens & Clark, Inc.
EDGAR R. FIEDLER(1)(2)(3) Vice President and Economic Counsellor, The
Conference Board; formerly Assistant Secretary of
the Treasury for Economic Policy
PETER B. FREEMAN(2)(3) Corporate Director and Trustee
ROBERT W. LEAR(2)(3) Executive-in-Residence and Visiting Professor,
Columbia University Graduate School of Business;
Director or Trustee, Various Organizations
DANIEL PIERCE(1) President; Chairman of the Board, Scudder,
Stevens & Clark, Inc.
(1)Member of Executive Committee
(2)Member of Nominating Committee
(3)Member of Audit Committee
Officers
DAVID S. LEE Chairman of the Board
DANIEL PIERCE President
THOMAS W. JOSEPH Vice President and Assistant Secretary
THOMAS F. McDONOUGH Vice President and Assistant Secretary
PAMELA A. McGRATH Vice President and Treasurer
IRENE McC. PELLICONI Secretary
LETTER FROM THE FUND'S CHAIRMAN
February 21, 1995
Dear Shareholder:
The Fund provided competitive investment results to its shareholders
in 1994. The Fund, operated exclusively for institutions and their clients,
includes four money market portfolios: Institutional Government Portfolio,
Institutional Federal Portfolio, Institutional Cash Portfolio and
Institutional Tax-Free Portfolio.
Each Portfolio seeks to provide as high a level of current income as
is consistent with preservation of capital and liquidity. The Institutional
Federal Portfolio seeks to maximize income that cannot be subjected to
state and local income taxes by reason of Federal law, and the
Institutional Tax-Free Portfolio seeks to provide income exempt from
Federal income tax. The Portfolios differ from each other in the types of
money market instruments in which each invests.
Aggregate net assets of the Portfolios were $568 million at December
31, 1994. A table showing dividend payments and other financial information
for the five years ended December 31 for each Portfolio is on page 16.
Net asset value per share of each Portfolio was maintained at $1.00.
Audited financial statements for the year ended December 31, 1994 and
a list of each Portfolio's investments as of that date are set forth on the
following pages.
If you have questions concerning your Fund or any of its Portfolios,
please call toll free (800) 854-8525 from any continental state. We will be
glad to hear from you at any time.
/s/David S. Lee
David S. Lee
Chairman
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
GOVERNMENT PORTFOLIO
<CAPTION>
ANNUALIZED MATURITY PRINCIPAL VALUE
YIELD DATE AMOUNT (NOTE 2A)
---------- -------- --------- ---------
<S> <C> <C> <C> <C>
REPURCHASE AGREEMENTS -- 2.7%
Donaldson, Lufkin & Jenrette Securities Corp. dated 12/30/94
(proceeds at maturity $3,222,102) collateralized by
$3,244,000 US Treasury Note, 6.75%, 2/28/97
(cost $3,220,000) (note 3) . . . . . . . . . . . . . . . . 5.96% 1/3/95 $ 3,220,000 $ 3,220,000
------------
U.S. AGENCY OBLIGATIONS -- 97.7%
Federal Home Loan Bank Discount Note . . . . . . . . . . . . 5.88 1/6/95 14,485,000 14,473,331
Federal Home Loan Bank Discount Note . . . . . . . . . . . . 5.68 1/10/95 7,855,000 7,844,003
Federal Home Loan Bank Discount Note . . . . . . . . . . . . 5.71 1/17/95 10,000,000 9,974,977
Federal Home Loan Bank Discount Note . . . . . . . . . . . . 6.18 3/9/95 8,000,000 7,909,177
Federal Home Loan Mortgage Corp. Discount Note . . . . . . . 5.93 1/3/95 24,745,000 24,736,958
Federal Home Loan Mortgage Corp. Discount Note . . . . . . . 5.99 1/23/95 13,500,000 13,451,243
Federal National Mortgage Association Discount Note . . . . . 5.98 1/6/95 3,000,000 2,997,542
Federal National Mortgage Association Discount Note . . . . . 5.65 1/11/95 5,000,000 4,992,264
Federal National Mortgage Association Discount Note . . . . . 6.06 2/7/95 4,000,000 3,975,416
Student Loan Marketing Assn. Variable Rate Note . . . . . . . 5.89 1/4/95* 11,700,000 11,700,000
Student Loan Marketing Assn. Variable Rate Note . . . . . . . 6.07 1/4/95* 8,000,000 8,038,671
Student Loan Marketing Assn. Variable Rate Note . . . . . . . 5.48 6/30/95* 5,000,000 5,000,000
------------
TOTAL U.S. AGENCY OBLIGATIONS (cost $115,093,582) . . . . . . . . . . . . . . . . . . . . . . 115,093,582
------------
TOTAL INVESTMENTS -- 100.4% (cost $118,313,582)** . . . . . . . . . . . . . . . . . . . . . . 118,313,582
------------
OTHER ASSETS AND LIABILITIES -- (0.4)%
Interest receivable and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 348,463
Bank overdraft . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,872)
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (635,386)
Management fee payable (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (17,395)
Accrued expenses (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (143,272)
------------
(449,462)
------------
NET ASSETS -- 100.0%
Applicable to 117,864,120 shares of $.001 par value Capital Stock outstanding;
5,000,000,000 shares authorized (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . $117,864,120
============
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00
=====
<FN>
* Date of next interest rate change.
**Cost for federal income tax purposes.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
FEDERAL PORTFOLIO
<CAPTION>
ANNUALIZED MATURITY PRINCIPAL VALUE
YIELD DATE AMOUNT (NOTE 2A)
---------- -------- --------- ---------
<S> <C> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 101.0%
U.S. Treasury Bill . . . . . . . . . . . . . . . . . . . 4.78% 1/12/95 $ 9,495,000 $ 9,481,326
U.S. Treasury Bill . . . . . . . . . . . . . . . . . . . 5.21 3/2/95 1,700,000 1,685,437
------------
TOTAL U.S. TREASURY OBLIGATIONS (cost $11,166,763)** . . . . . . . . . . . . . . . . . . . . 11,166,763
------------
OTHER ASSETS AND LIABILITIES -- (1.0)%
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,839
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,194
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (41,990)
Management fee payable (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,068)
Accrued expenses (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (73,769)
------------
(111,794)
------------
NET ASSETS -- 100.0%
Applicable to 11,054,969 shares of $.001 par value Capital Stock outstanding;
5,000,000,000 shares authorized (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . $ 11,054,969
============
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00
=====
<FN>
** Cost for federal income tax purposes.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
CASH PORTFOLIO
<CAPTION>
ANNUALIZED MATURITY PRINCIPAL VALUE
YIELD DATE AMOUNT (NOTE 2A)
---------- -------- --------- ---------
<S> <C> <C> <C> <C>
CERTIFICATES OF DEPOSIT -- 11.4%
American Express Centurion Bank . . . . . . . . . . . . . 6.13% 1/20/95 $ 10,000,000 $10,000,000
Banque National de Paris . . . . . . . . . . . . . . . . 5.88 1/5/95 11,000,000 11,000,012
Bayerische Landesbank (Yankee) . . . . . . . . . . . . . 5.96 1/23/95 10,000,000 10,000,000
-----------
TOTAL CERTIFICATES OF DEPOSIT (cost $31,000,012) . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,000,012
-----------
COMMERCIAL PAPER -- 34.1%
Abbey National North America . . . . . . . . . . . . . . 6.31 3/6/95 11,900,000 11,768,412
AT&T Corp. . . . . . . . . . . . . . . . . . . . . . . . 5.95 2/10/95 9,000,000 8,941,300
Ford Credit Receivables Funding Inc. . . . . . . . . . . 5.93 1/30/95 9,000,000 8,957,588
General Electric Capital Corp. . . . . . . . . . . . . . 6.13 2/27/95 9,000,000 8,913,788
J.P. Morgan & Co. Inc. . . . . . . . . . . . . . . . . . 6.24 3/1/95 9,000,000 8,909,288
New Center Asset Trust . . . . . . . . . . . . . . . . . 6.14 1/20/95 10,000,000 9,968,017
PREFCO . . . . . . . . . . . . . . . . . . . . . . . . . 6.03 1/18/95 9,000,000 8,974,713
Rincon Securities Inc. (LOC Trust Co. of Georgia) . . . . 6.14 1/10/95 8,175,000 8,162,615
Santander Finance Inc. (Delaware) . . . . . . . . . . . . 5.70 2/14/95 9,000,000 8,938,125
UBS Finance Inc. (Delaware) . . . . . . . . . . . . . . . 5.74 1/3/95 9,000,000 8,997,170
-----------
TOTAL COMMERCIAL PAPER (cost $92,531,016) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92,531,016
-----------
REPURCHASE AGREEMENTS -- 14.0%
Donaldson, Lufkin & Jenrette Securities Corp.
dated 12/30/94 (proceeds at maturity $37,863,700)
collateralized by $37,816,000 U.S. Treasury
Note, 4.75%, 2/15/97 (cost $37,839,000) (note 3) . . . 5.96 1/3/95 37,839,000 37,839,000
-----------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 29.9%
Federal Farm Credit Bank Discount Note . . . . . . . . . 5.81 1/6/95 30,000,000 29,976,124
Federal National Mortgage Assn. Variable Rate Note . . . 6.15 3/14/95* 15,000,000 15,000,000
Student Loan Marketing Assn. Variable Rate Note . . . . . 5.89 1/4/95* 14,000,000 14,000,000
Student Loan Marketing Assn. Variable Rate Note . . . . . 6.07 1/4/95* 10,000,000 10,048,338
Tennessee Valley Authority Discount Note . . . . . . . . 5.83 1/9/95 12,000,000 11,984,667
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (cost $81,009,129) . . . . . . . . . . . . . . . . . . . . . . 81,009,129
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUALIZED MATURITY PRINCIPAL VALUE
YIELD DATE AMOUNT (NOTE 2A)
---------- --------- ------------ ------------
<S> <C> <C> <C> <C>
VARIABLE COUPON RENEWABLE NOTES -- 10.9%
Adesa Funding Corp. (LOC Banc One) . . . . . . . . . . . 6.28% 1/5/95* $ 3,524,000 $ 3,524,000
Banc One Texas NA . . . . . . . . . . . . . . . . . . . . 5.72 1/3/95* 10,000,000 10,000,000
Citibank Money Market Credit Card Trust . . . . . . . . 6.31 1/10/95* 10,909,090 10,909,090
Society Bank NA . . . . . . . . . . . . . . . . . . . . . 5.67 1/3/95* 5,000,000 4,998,845
------------
TOTAL VARIABLE COUPON RENEWABLE NOTES (cost $29,431,935) . . . . . . . . . . . . . . . . . . 29,431,935
------------
TOTAL INVESTMENTS -- 100.3% (cost $271,811,092)** . . . . . . . . . . . . . . . . . . . . . . 271,811,092
------------
OTHER ASSETS AND LIABILITIES -- (0.3)%
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,466
Interest receivable and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 515,283
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,124,536)
Management fee payable (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31,159)
Accrued expenses (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (167,346)
------------
(806,292)
------------
NET ASSETS -- 100.0%
Applicable to 271,004,800 shares of $.001 par value Capital Stock outstanding;
5,000,000,000 shares authorized (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . $271,004,800
============
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00
=====
<FN>
* Date of next interest rate change.
** Cost for federal income tax purposes.
ABBREVIATIONS USED IN THE STATEMENT:
LOC Letter of Credit
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
TAX-FREE PORTFOLIO
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* SHORT-TERM MUNICIPAL SECURITIES -- 99.6% AMOUNT (NOTE 2A)
- ------- ------------ ------------
<S> <C> <C> <C>
ALASKA -- 2.4%
VMIG-1 Alaska Housing Finance Corp. General Mortgage Revenue Series 1991-A
VRDN, 5.75%, 6/1/26 . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,000,000 $ 4,000,000
------------
ARIZONA -- 10.1%
A-1 Apache County Industrial Development Revenue Tuscon Electric Co.
Springerville Project VRDN, 5.75%, 12/15/18 . . . . . . . . . . . . . 1,800,000 1,800,000
A-1+ Apache County Industrial Development Revenue Tuscon Electric Co.
Springerville Project Series 1985-A VRDN, 5.625%, 12/1/20 . . . . . . 9,200,000 9,200,000
A-1+ Maricopa County Pollution Control Revenue Refunding Arizona Public
Service Palo Verde Project, Series C VRDN, 5.85%, 5/1/29 . . . . . . 1,800,000 1,800,000
A-1+ Phoenix General Obligation Series 1994-2 VRDN, 5.85%, 6/1/18 . . . . . . 1,100,000 1,100,000
VMIG-1 Pima County Industrial Development Authority Tucson Electric Power Co. .
Series 1982-A VRDN, 5.625%, 7/1/22 . . . . . . . . . . . . . . . . . 100,000 100,000
A-1+ Salt River Project Electric System Revenue Refunding Series 1992-A TOB,
5.75%, 1/1/09 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
------------
TOTAL ARIZONA . . . . . . . . . . . . . . . . . . . . . . . . . 17,000,000
------------
ARKANSAS -- 0.0%
VMIG-1 Jonesboro Industrial Revenue Bond Farr Co. Project VRDN, 6.25%, 12/1/01. 70,000 70,000
------------
CALIFORNIA -- 5.5%
SP-1+ California State RAN, 5%, 6/28/95 . . . . . . . . . . . . . . . . . . . 750,000 752,869
A-1 Lancaster Multi-Family Housing Willows Project Green Meadows VRDN,
6.125%, 2/1/05 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
SP-1+ Los Angeles County TRAN, 4.5%, 6/30/95 . . . . . . . . . . . . . . . . . 5,000,000 5,013,774
SP-1+ Los Angeles County Unified School District TRAN, 4.5%, 7/10/95 . . . . . 1,000,000 1,004,519
A-1 Riverside Multi-Family Housing Revenue Countrywood Apartments
Series 1985-D VRDN, 6.125%, 5/1/05 . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
------------
TOTAL CALIFORNIA . . . . . . . . . . . . . . . . . . . . . . . 9,271,162
------------
COLORADO -- 1.4%
A-1+ Clear Creek County Colorado Counties Financing Program Series 1988
VRDN, 5%, 6/1/98 . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400,000 2,400,000
------------
DISTRICT OF COLUMBIA -- 1.0%
A-1+ District of Columbia General Obligation VRDN, 5.4%, 10/1/07 . . . . . . 900,000 900,000
A-1+ District of Columbia General Obligation VRDN, 5.4%, 10/1/07 . . . . . . 800,000 800,000
------------
TOTAL DISTRICT OF COLUMBIA . . . . . . . . . . . . . . . . . . 1,700,000
------------
FLORIDA -- 5.2%
VMIG-1 Florida Local Government Finance Authority Series 1985 VRDN,
5.5%, 9/1/16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,120,000 1,120,000
A-1+ Jacksonville Pollution Control Revenue Florida Power & Light Series 1994
TECP, 3.9%, 2/14/95 . . . . . . . . . . . . . . . . . . . . . . . . . 2,100,000 2,100,000
VMIG-1 University of Northern Florida Capital Improvement Revenue VRDN,
5.5%, 11/1/24 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,500,000 5,500,000
------------
TOTAL FLORIDA . . . . . . . . . . . . . . . . . . . . . . . . 8,720,000
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2A)
- ------- ------------ ------------
<S> <C> <C> <C>
GEORGIA -- 6.4%
A-1+ DeKalb Private Hospital Authority Egleston Children's Hospital at Emory
University Series 1984-B VRDN, 5.4%, 3/1/24 . . . . . . . . . . . . . . $ 1,400,000 $ 1,400,000
A-1+ Gordon County Industrial Development Authority Sara Lee Corp. VRDN,
5.7%, 3/1/02 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,600,000 4,600,000
SS&C Savannah Downtown Development Authority Series 1985 VRDN,
6%, 5/1/15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,800,000 4,800,000
------------
TOTAL GEORGIA . . . . . . . . . . . . . . . . . . . . . . . . . . 10,800,000
------------
IDAHO -- 0.6%
SP-1+ Idaho General Obligation TAN, 4.5%, 6/29/95 . . . . . . . . . . . . . . . 1,000,000 1,003,211
------------
ILLINOIS -- 10.9%
P-1 Illinois Development Finance Authority Marriott Corporation Oakbrook
Terrace Project Series 1984 VRDN, 5%, 12/1/14 . . . . . . . . . . . . . 4,700,000 4,700,000
VMIG-1 Illinois Educational Facilities Authority University Pooled Finance
Program VRDN FGIC Insured, 5.6%, 12/1/05 . . . . . . . . . . . . . . . 5,990,000 5,990,000
VMIG-1 Illinois Educational Facilities Authority Northwestern University
Revenue VRDN, 5.6%, 3/1/28 . . . . . . . . . . . . . . . . . . . . . . 1,200,000 1,200,000
A-1+ Illinois Health Facilities Authority Highland Park Hospital Revenue
Series 1991-B OP, 3.75%, 6/1/95 . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
VMIG-1 Illinois Health Facilities Authority LaGrange Memorial Health
System Series 1990 VRDN, 6%, 12/1/16 . . . . . . . . . . . . . . . . . 4,400,000 4,400,000
------------
TOTAL ILLINOIS . . . . . . . . . . . . . . . . . . . . . . . . . 18,290,000
------------
INDIANA -- 1.4%
MIG-1 Jasper County Northern Indiana Public Service Series 1988 TECP,
3.65%, 1/13/95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400,000 2,400,000
------------
LOUISIANA -- 0.2%
A-1+ Louisiana Recovery District Sales Tax Revenue Series 1988 VRDN
FGIC Insured, 5.85%, 7/1/97 . . . . . . . . . . . . . . . . . . . . . . 300,000 300,000
------------
MASSACHUSETTS -- 2.7%
A-1+ Commonwealth of Massachusetts Bay Transportation Authority
Series 1984-A OP, 3.75%, 3/1/95 . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
SP-1 Commonwealth of Massachusetts Bay Transportation Authority
Series 1994-A OP, 5%, 9/8/95 . . . . . . . . . . . . . . . . . . . . . 2,500,000 2,514,469
SS&C Commonwealth of Massachusetts General Obligation, 5.5%, 11/1/95 . . . . . 1,000,000 1,006,396
------------
TOTAL MASSACHUSETTS . . . . . . . . . . . . . . . . . . . . . . . 4,520,865
------------
MISSOURI -- 3.3%
A-1+ Missouri State Environmental Improvement and Energy Resource
Authority OP, 3.75%, 6/1/95 . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
VMIG-1 Missouri State Health and Educational Facilities Health Facilities Revenue
Sisters of Mercy VRDN, 5.2%, 6/1/19 . . . . . . . . . . . . . . . . . . 2,500,000 2,500,000
------------
TOTAL MISSOURI . . . . . . . . . . . . . . . . . . . . . . . . . 5,500,000
------------
</TABLE>
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
TAX-FREE PORTFOLIO (CONTINUED)
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2A)
- ------- ------------ ------------
<S> <C> <C> <C>
NORTH CAROLINA -- 1.4%
A-1+ North Carolina Educational Facilities Duke University Series 1991-B VRDN,
5.45%, 12/1/21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,300,000 $ 2,300,000
------------
OHIO -- 1.8%
MIG-1 Ohio Water Development Authority Cleveland Electric TECP FGIC Insured,
4.25%, 1/13/95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
------------
PENNSYLVANIA -- 9.5%
SS&C Elk County Stackpole Corporation Series 1989 VRDN, 4.245%, 3/1/04. . . . . 1,000,000 1,000,000
A-1 Emmaus General Authority Local Government Revenue Bond Pool
Series 1985-D7 VRDN, 5.7%, 3/1/24 . . . . . . . . . . . . . . . . . . . 2,600,000 2,600,000
A-1+ Emmaus General Authority Local Government Revenue Bond Pool
Series F-4 VRDN, 5.7%, 3/1/24 . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,000,000
A-1 Emmaus General Authority Local Government Revenue Bond Pool
Series G-4 VRDN, 5.7%, 3/1/24 . . . . . . . . . . . . . . . . . . . . . 2,900,000 2,900,000
SP-1+ Pennsylvania TAN, 4.75%, 6/30/95 . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,505,752
SP-1+ Philadelphia School District TRAN, 4.75%, 6/30/95 . . . . . . . . . . . . 4,900,000 4,914,853
------------
TOTAL PENNSYLVANIA . . . . . . . . . . . . . . . . . . . . . . . 15,920,605
------------
TENNESSEE -- 6.0%
VMIG-1 Franklin Industrial Development Revenue Franklin Oaks Apartments VRDN,
6%, 12/1/07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,000,000
SP-1+ Tennessee Local Development Authority BAN, 4.5%, 6/1/95 . . . . . . . . . 5,000,000 5,013,685
------------
TOTAL TENNESSEE . . . . . . . . . . . . . . . . . . . . . . . . . 10,013,685
------------
TEXAS -- 14.0%
P-1 Angelina & Neches River Authority Solid Waste Disposal Series 1984-B
VRDN, 6%, 5/1/14 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000 1,300,000
VMIG-1 Harris County Texas Health Authority Children's Hospital VRDN,
5.75%, 10/1/19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,500,000 1,500,000
A-1+ Harris County Texas Health Facilities Authority St. Luke's Episcopal
Hospital Series 1985-D VRDN, 5.85%, 2/15/16 . . . . . . . . . . . . . . 3,200,000 3,200,000
A-1+ Harris County Texas Toll Road Subordinate Lien VRDN, 5.75%, 8/1/20 . . . . 3,500,000 3,500,000
MIG-1 North Central Texas Health Authority Methodist Hospital of Dallas TECP,
3.7%, 2/28/95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,000 1,200,000
A-1 North Central Texas Health Development Corp. Methodist
Hospital of Dallas VRDN BIG Insured, 5.85%, 10/1/15 . . . . . . . . . 6,700,000 6,700,000
A-1+ North Central Texas Health Development Corp. Presbyterian Medical Center
VRDN MBIA Insured, 5.95%, 12/1/15 . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
A-1+ San Antonio Water Systems Revenue TECP, 3.9%, 2/14/95 . . . . . . . . . . 1,000,000 1,000,000
SP-1+ Texas Revenue Anticipation Note, 5%, 8/31/95 . . . . . . . . . . . . . . . 4,000,000 4,023,666
------------
TOTAL TEXAS . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,423,666
------------
UTAH -- 5.0%
AAA Intermountain Power Agency Utah Power Revenue Refunding Prerefunding
Series-I, 8.6%, 7/1/95 . . . . . . . . . . . . . . . . . . . . . . . . 1,135,000 1,174,218
A-1+ Salt Lake City Pooled Hospital Financing Program TECP, 3.85%, 1/13/95 . . 2,000,000 2,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CREDIT PRINCIPAL VALUE
RATING* AMOUNT (NOTE 2A)
- ------- ------------ ------------
<S> <C> <C> <C>
VMIG-1 Utah Housing Finance Agency Single-Family Mortgage Bond
Series 1993-D VRDN, 5.7%, 7/1/16 . . . . . . . . . . . . . . . . . . . $ 2,665,000 $ 2,665,000
VMIG-1 Utah Housing Finance Agency Single-Family Mortgage Series 1993-C
VRDN, 5.7%, 1/1/27 . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000 2,500,000
------------
TOTAL UTAH . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,339,218
------------
VERMONT -- 2.3%
SS&C Vermont Industrial Development Authority Mount Snow Project VRDN,
4.245%, 4/1/99 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 980,000 980,000
VMIG-1 Vermont Student Assistance Corporation VRDN, 3.75%, 1/1/04 . . . . . . . . 2,900,000 2,900,000
------------
TOTAL VERMONT . . . . . . . . . . . . . . . . . . . . . . . . . . 3,880,000
------------
VIRGINIA -- 1.2%
MIG-1 Chesterfield County Industrial Development Authority Electric Power
Company TECP, 3.6%, 1/18/95 . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,000,000
------------
WASHINGTON -- 4.9%
VMIG-1 Washington Health Care Facilities Authority Fred Hutchinson Cancer
Research Center Series-B VRDN, 6%, 1/1/18 . . . . . . . . . . . . . . . 1,710,000 1,710,000
A-1+ Washington Health Care Facilities Authority Series 1985-E VRDN,
6%. 10/1/05 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,300,000 2,300,000
A-1+ Washington Public Power Supply Authority Project #1 and #3 VRDN,
5.6%, 7/1/18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
VMIG-1 Washington Health Care Facilities Authority Fred Hutchinson Cancer
Research Center Series-A VRDN, 6%, 1/1/18 . . . . . . . . . . . . . . . 2,210,000 2,210,000
VMIG-1 Washington Health Care Facilities Authority Fred Hutchinson Cancer
Research Center Series-C VRDN, 6%, 1/1/18 . . . . . . . . . . . . . . . 1,000,000 1,000,000
------------
TOTAL WASHINGTON . . . . . . . . . . . . . . . . . . . . . . . . 8,220,000
------------
WEST VIRGINIA -- 0.6%
A-1+ Marshall County Pollution Control Revenue British Petroleum VRDN,
5.85%, 12/1/20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 1,000,000
------------
WISCONSIN -- 1.8%
A-1+ Wausau Pollution Control Revenue Minnesota Mining and
Manufacturing Series 1982 VRDN, 5.5%, 8/1/17 . . . . . . . . . . . . . 500,000 500,000
SP-1+ Wisconsin General Obligation, 4.5%, 6/15/95 . . . . . . . . . . . . . . . 1,700,000 1,704,050
A-1+ Wisconsin State Health Care Facilities Authority Franciscan Memorial
Hospital Series-A1 VRDN, 5.4%, 1/1/16 . . . . . . . . . . . . . . . . . 900,000 900,000
------------
TOTAL WISCONSIN . . . . . . . . . . . . . . . . . . . . . . . . . 3,104,050
------------
TOTAL INVESTMENT PORTFOLIO -- 99.6% (Cost $167,176,462)** . . . . . . . . 167,176,462
------------
</TABLE>
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1994
TAX-FREE PORTFOLIO (CONTINUED)
<CAPTION>
VALUE
(NOTE 2A)
------------
<S> <C>
OTHER ASSETS AND LIABILITIES -- 0.4%
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,189
Receivable for Investments sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Interest receivable and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,191,343
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (529,142)
Management fee payable (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21,126)
Accrued expenses (note 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (115,330)
------------
680,934
------------
NET ASSETS -- 100.0%
Applicable to 167,857,396 shares of $.001 par value Capital Stock outstanding;
2,000,000,000 shares authorized (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . $167,857,396
============
NET ASSET VALUE PER SHARE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1.00
=====
<FN>
**Cost for federal income tax purposes.
</TABLE>
<TABLE>
- --------------------------------------------------------------------------------------------------------------
* CREDIT RATINGS (UNAUDITED) SHOWN ARE EITHER BY MOODY'S INVESTORS SERVICE, INC., STANDARD & POOR'S
CORPORATION OR SCUDDER:
<CAPTION>
MOODY'S STANDARD & POOR'S
<S> <C> <C>
P-1 A-1/A-1+ Commercial paper of the highest quality.
Aaa AAA Judged to be the best quality and carry the smallest amount of investment risk.
Aa AA Judged to be of high quality by all standards. Moody's applies numerical
modifiers 1, 2, and 3 in each rating classification. The modifier 1 indicates
that the security ranks in the higher end of its rating category, and the
modifier 3 indicates that the security ranks in the lower end of its rating
category. Standard & Poor's assigns a corresponding + or - to indicate the
issue's ranking in its associated category.
MIG-1 SP-1/SP-1+ Short-term tax-exempt instrument of the best quality with strong protection.
VMIG-1 Short-term tax-exempt variable rate demand instrument of the best quality
with strong protection.
</TABLE>
<TABLE>
ABBREVIATIONS USED IN THE STATEMENT:
<S> <C> <C> <C>
TECP Tax Exempt Commercial Paper VRDN Variable Rate Demand Note
BAN Bond Anticipation Note SS&C These securities are not rated by either
Moody's or Standard & Poor's. Scudder has
determined that these securities are of
MP, OP Security with a "mandatory or optional comparable quality to rated acceptable
put" feature; date shown represents the notes on a cash flow basis and are of
earliest date the security may be redeemed appropriate credit for the standards
or the interest rate will be reset if the required by the Fund's investment
security is not redeemed objective.
RAN Revenue Anticipation Note TOB Tender Option Bond is a security with a
periodic "put feature"
TAN Tax Anticipation Note TRAN Tax Revenue Anticipation Note
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
<CAPTION>
GOVERNMENT FEDERAL CASH TAX-FREE
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
----------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest Income . . . . . . . . . . . . . . $ 7,589,243 $ 419,829 $16,170,864 $ 4,262,670
----------- ------------ ----------- ------------
EXPENSES (note 2c):
Management fee (note 4) . . . . . . . . . . 272,538 3,068 580,110 212,854
Shareholder services (note 4) . . . . . . . 21,917 1,518 43,210 13,796
Directors' fees and expenses (note 4) . . . 39,358 21,515 45,490 43,201
Custodian and Accounting fees (note 4) . . 74,334 11,325 79,450 59,355
Professional services . . . . . . . . . . . 88,958 14,569 145,068 75,312
Reports to shareholders . . . . . . . . . . 2,877 240 6,355 2,166
Registration fees . . . . . . . . . . . . . 2,651 1,995 5,000 2,394
Miscellaneous . . . . . . . . . . . . . . . 12,776 3,922 23,208 6,352
----------- ------------ ----------- ------------
Total expenses before reimbursement . . 515,409 58,152 927,891 415,430
Reimbursement from Manager (note 4) . . . . -- (702) -- (32,600)
----------- ------------ ----------- ------------
Net expenses . . . . . . . . . . . . . . 515,409 57,450 927,891 382,830
----------- ------------ ----------- ------------
NET INVESTMENT INCOME AND INCREASE IN NET
ASSETS FROM OPERATIONS . . . . . . . . . $ 7,073,834 $ 362,379 $15,242,973 $ 3,879,840
=========== ============ =========== ============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
GOVERNMENT PORTFOLIO
--------------------------------
1994 1993
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and increase in net assets
from operations . . . . . . . . . . . . . . . . . . . . . $ 7,073,834 $ 5,748,512
Dividends (notes 2b and 2d) . . . . . . . . . . . . . . . . . (7,073,834) (5,748,512)
-------------- --------------
-- --
-------------- --------------
CAPITAL STOCK TRANSACTIONS (note 5):
Proceeds from sale of shares . . . . . . . . . . . . . . . . 803,305,494 981,057,356
Net asset value of shares issued in reinvestment of dividends 1,137,637 617,320
-------------- --------------
804,443,131 981,674,676
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . (882,511,092) (1,032,572,717)
-------------- --------------
Increase (decrease) in net assets from Capital Stock
transactions . . . . . . . . . . . . . . . . . . . . . . . (78,067,961) (50,898,041)
-------------- --------------
Total increase (decrease) in net assets . . . . . . . . . . . . (78,067,961) (50,898,041)
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . 195,932,081 246,830,122
-------------- --------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . $ 117,864,120 $ 195,932,081
============== ==============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
FEDERAL PORTFOLIO CASH PORTFOLIO
--------------------------- -----------------------------
1994 1993 1994 1993
------------ ------------ ------------ -------------
<S> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and increase in net assets
from operations . . . . . . . . . . . . . . . . . . . . . $ 362,379 $ 186,015 $ 15,242,973 $ 19,181,456
Dividends (notes 2b and 2d) . . . . . . . . . . . . . . . . . (362,379) (186,015) (15,242,973) (19,181,456)
------------ ----------- -------------- --------------
-- -- -- --
------------ ----------- -------------- --------------
CAPITAL STOCK TRANSACTIONS (note 5):
Proceeds from sale of shares . . . . . . . . . . . . . . . . 49,187,822 33,535,898 1,756,715,344 3,526,151,850
Net asset value of shares issued in reinvestment of dividends 344,539 187,206 2,606,116 2,545,413
------------ ----------- -------------- --------------
49,532,361 33,723,104 1,759,321,460 3,528,697,263
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . (46,094,573) (35,085,412) (1,956,022,378) (3,723,052,911)
------------ ----------- -------------- --------------
Increase (decrease) in net assets from Capital Stock
transactions . . . . . . . . . . . . . . . . . . . . . . . 3,437,788 (1,362,308) (196,700,918) (194,355,648)
------------ ----------- -------------- --------------
Total increase (decrease) in net assets . . . . . . . . . . . . 3,437,788 (1,362,308) (196,700,918) (194,355,648)
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . 7,617,181 8,979,489 467,705,718 662,061,366
------------ ----------- -------------- --------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . $ 11,054,969 $ 7,617,181 $ 271,004,800 $ 467,705,718
============ =========== ============== ==============
</TABLE>
<TABLE>
TAX-FREE PORTFOLIO
-------------------------------
1994 1993
-------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income and increase in net assets
from operations . . . . . . . . . . . . . . . . . . . . . $ 3,879,840 $ 2,754,175
Dividends (notes 2b and 2d) . . . . . . . . . . . . . . . . . (3,879,840) (2,754,175)
-------------- --------------
-- --
-------------- --------------
CAPITAL STOCK TRANSACTIONS (note 5):
Proceeds from sale of shares . . . . . . . . . . . . . . . . 908,058,572 697,636,873
Net asset value of shares issued in reinvestment of dividends 1,407,961 721,041
-------------- --------------
909,466,533 698,357,914
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . (866,656,883) (669,756,384)
-------------- --------------
Increase (decrease) in net assets from Capital Stock
transactions . . . . . . . . . . . . . . . . . . . . . . . 42,809,650 28,601,530
-------------- --------------
Total increase (decrease) in net assets . . . . . . . . . . . . 42,809,650 28,601,530
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . 125,047,746 96,446,216
-------------- --------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . $ 167,857,396 $ 125,047,746
============== ==============
See notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
SCUDDER INSTITUTIONAL FUND, INC.
FINANCIAL HIGHLIGHTS
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR AND OTHER PERFORMANCE INFORMATION
DERIVED FROM THE FINANCIAL STATEMENTS.
<CAPTION> RATIO OF RATIO OF NET
NET ASSET NET ASSET OPERATING INVESTMENT NET ASSETS
VALUE, AT NET VALUE, AT EXPENSES INCOME END OF
BEGINNING INVESTMENT DIVIDENDS END TOTAL TO AVERAGE TO AVERAGE PERIOD
PERIOD OF PERIOD INCOME PAID OF PERIOD RETURN NET ASSETS NET ASSET (MILLIONS)
- ------------------------------- --------- ---------- -------- --------- ------ ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GOVERNMENT PORTFOLIO
Year ended 12/31/94 . . . . $1.00 $.040 $(.040) $1.00 4.09% 0.28% 3.89% $118
Year ended 12/31/93 . . . . 1.00 .030 (.030) 1.00 3.01 0.26 2.97 196
Year ended 12/31/92 . . . . 1.00 .037 (.037) 1.00 3.74 0.24 3.69 247
Year ended 12/31/91 . . . . 1.00 .057 (.057) 1.00 5.94 0.26 5.86 192
Year ended 12/31/90 . . . . 1.00 .079 (.079) 1.00 8.19 0.31 7.89 174
FEDERAL PORTFOLIO (a) (b) (c)
Year ended 12/31/94 . . . . 1.00 .034 (.034) 1.00 3.42 0.54 3.39 11
Year ended 12/31/93 . . . . 1.00 .027 (.027) 1.00 2.74 0.23 2.73 8
Year ended 12/31/92 . . . . 1.00 .032 (.032) 1.00 3.23 0.32 3.13 9
Year ended 12/31/91 . . . . 1.00 .054 (.054) 1.00 5.55 0.30 5.51 11
Year ended 12/31/90 . . . . 1.00 .078 (.078) 1.00 8.04 0.33 7.79 25
CASH PORTFOLIO
Year ended 12/31/94 . . . . 1.00 .041 (.041) 1.00 4.13 0.24 3.94 271
Year ended 12/31/93 . . . . 1.00 .031 (.031) 1.00 3.16 0.22 3.12 468
Year ended 12/31/92 . . . . 1.00 .038 (.038) 1.00 3.88 0.25 3.66 662
Year ended 12/31/91 . . . . 1.00 .059 (.059) 1.00 6.12 0.25 5.89 308
Year ended 12/31/90 . . . . 1.00 .080 (.080) 1.00 8.27 0.32 8.02 152
TAX-FREE PORTFOLIO
Year ended 12/31/94 (a) (c) 1.00 .027 (.027) 1.00 2.74 0.27 2.73 168
Year ended 12/31/93 . . . . 1.00 .023 (.023) 1.00 2.32 0.29 2.30 125
Year ended 12/31/92 . . . . 1.00 .029 (.029) 1.00 2.92 0.31 2.82 96
Year ended 12/31/91 . . . . 1.00 .045 (.045) 1.00 4.65 0.36 4.55 75
Year ended 12/31/90 . . . . 1.00 .058 (.058) 1.00 5.96 0.32 5.79 88
<FN>
(a) Had the investment manager not voluntarily waived all or a portion of the management fee, and not reimbursed
certain expenses, the expense ratios would have been: 0.77% for the year ended December 31, 1994, 0.83%, 0.69%,
0.67% and 0.48% for the years ended December 31, 1993, 1992, 1991 and 1990, respectively for the Federal Portfolio,
and 0.29% for the year ended December 31, 1994 for the Tax-Free Portfolio.
(b) Name changed from Treasury Portfolio effective May 1, 1990.
(c) Total returns are higher, for the periods indicated, due to the maintenance of the Fund's expenses.
</TABLE>
<PAGE>
SCUDDER INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
Scudder Institutional Fund, Inc. (the "Fund") is an open-end diversified
management investment company which currently has four active money market
investment portfolios: the Government Portfolio, Federal Portfolio, Cash
Portfolio and Tax-Free Portfolio (collectively the "Portfolios").
2. SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies followed by the Fund are:
(a) Security Valuation--Each of the Portfolios values its investments
using the amortized cost method, which involves initially valuing an investment
at its cost and thereafter assuming a constant amortization to maturity of any
premium or discount. This method results in a value approximating market.
(b) Federal Income Taxes--The Fund's policy is to qualify each Portfolio
as a regulated investment company under the Internal Revenue Code and to
distribute all of its taxable and tax-exempt income, including any realized net
capital gains, to shareholders. Therefore, no Federal income tax provision is
required.
(c) Allocation of Expenses--Expenses not directly chargeable to a
specific Portfolio are allocated primarily on the basis of relative net assets.
(d) Dividends--Dividends from net investment income are declared each
business day to shareholders of record that day and paid on the first business
day of the following month.
(e) Other--Investment transactions are recorded on trade dates. Interest
income, including the accretion or amortization of discount or premium, is
recorded on the accrual basis. Discounts or premiums on securities purchased
are accreted or amortized, respectively, on a straight line basis over the life
of the respective securities. Distributions to shareholders are recorded on the
ex-dividend date.
The Cash Portfolio must have at least 25% of its investment portfolio
invested in bankers' acceptances, certificates of deposits, commercial paper,
fixed time deposits or other obligations of domestic and foreign banks.
3. REPURCHASE AGREEMENTS
It is the Fund's policy to obtain possession, through its custodian, of
the securities underlying each repurchase agreement to which it is a party,
either through physical delivery or book entry transfer in the Federal Reserve
System or Participants Trust Company. Payment by the Fund in respect of a
repurchase agreement is authorized only when proper delivery of the underlying
securities is made to the Fund's custodian. The Fund's investment manager
values such underlying securities each business day using quotations obtained
from a reputable, independent source. If the Fund's investment manager
determines that the value of such underlying securities (including accrued
interest thereon) does not at least equal the value of each repurchase
agreement (including accrued interest thereon) to which such securities are
subject, it will ask for additional securities to be delivered to the Fund's
custodian. In connection with each repurchase agreement transaction, if the
seller defaults and the value of the collateral declines or if the seller
enters an insolvency proceeding, realization of the collateral by the Fund may
be delayed or limited.
<PAGE>
SCUDDER INSTITUTIONAL FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
4. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment advisory agreements between Scudder, Stevens & Clark, Inc.
("Scudder"), the Fund's investment manager, and the Fund on behalf of each
Portfolio provide for a management fee payable each month, based upon the
average daily value of each Portfolio's net assets, at annual rates of 0.15%.
For the year ended December 31, 1994, Scudder did not impose fees amounting to
$12,962 for the Federal Portfolio. In addition, Scudder reimbursed a portion of
expenses amounting to $32,600 for the Tax-Free Portfolio; and $702 for the
Federal Portfolio.
Under certain state regulations, if the total expenses of any of the
Portfolios, exclusive of taxes, interest, and extraordinary expenses exceed
certain limitations, the Fund's investment adviser is required to reimburse the
Portfolio for such excess up to the amount of management fees. During the year
ended December 31, 1994, no such reimbursement was required.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of Scudder,
is the Fund's shareholders service, transfer and dividend disbursing agent. For
the year ended December 31, 1994, the amount charged to the Fund by SSC
aggregated $18,928 for the Government Portfolio, $1,355 for the Federal
Portfolio, $39,639 for the Cash Portfolio, and $11,780 for the Tax-Free
Portfolio, of which $2,118, $118, $3,064, and $331 respectively remain unpaid
at December 31, 1994.
Effective August 1, 1994 for the Government Portfolio, Federal Portfolio,
and Cash Portfolio, and August 18, 1994 for Tax Free Portfolio, Scudder Fund
Accounting Corporation ("SFAC"), a wholly-owned subsidiary of Scudder, assumed
responsibility for determining the daily net asset value per share and
maintaining the portfolio and general accounting records for the Portfolios.
For the year ended December 31, 1994, the amount charged to the Portfolios by
SFAC aggregated $13,451 for the Government Portfolio, $1,203 for the Federal
Portfolio, $19,023 for the Cash Portfolio, and $15,731 for the Tax-Free
Portfolio, of which $2,598, $256, $3,375, and $3,684, respectively, remain
unpaid at December 31, 1994. For the year ended December 31, 1994 for the
Federal Portfolio, SFAC did not impose fees amounting to $11,297.
The Fund has a compensation arrangement under which payment of directors'
fees may be deferred. Interest is accrued (based on the rate of return earned
on the 90 day Treasury Bill as determined at the beginning of each calendar
quarter) on the deferred balances and is included in "Directors' fees and
expenses." The accumulated balance of deferred directors' fees and interest
thereon relating to all active Portfolios comprising the Fund aggregates
$390,447, an applicable portion of which is included in accrued expenses of
each of the Portfolios.
5. CAPITAL STOCK
At December 31, 1994, the Fund had 25,000,000,000 shares of $.001 par
value Capital Stock authorized, of which 5,000,000,000 shares each have been
designated for the Government Portfolio, Federal Portfolio and Cash Portfolio,
and 2,000,000,000 shares have been designated for the Tax-Free Portfolio. Net
paid in capital in excess of par value was $117,746,256 for the Government
Portfolio, $11,043,914 for the Federal Portfolio, $270,733,795 for the Cash
Portfolio and $167,689,539 for the Tax-Free Portfolio. At December 31, 1994,
one holder of record of the Government Portfolio held approximately 51% of the
outstanding shares and one holder of the Federal Portfolio held approximately
53% of the outstanding shares.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
SCUDDER INSTITUTIONAL FUND, INC.
In our opinion, the accompanying statements of net assets, 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 Institutional Government Portfolio, Institutional Federal Portfolio,
Institutional Cash Portfolio, and Institutional Tax-Free Portfolio (each a
separate portfolio of Scudder Institutional Fund, Inc., hereafter referred to
as the "Fund") at December 31, 1994, the results of each of their operations
for the year then ended, the changes in each of their net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended, in conformity with 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 accounting 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 presentation. We believe that our audits, which included confirmation
of securities at December 31, 1994 by correspondence with the custodian,
provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
February 21, 1995
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FEDERAL TAX STATUS OF 1994 DIVIDENDS
The total amount of dividends declared in 1994 by each of the Federal
Portfolio, Government Portfolio and Cash Portfolio of Scudder Institutional
Fund, Inc. is taxable as ordinary dividend income for Federal income tax
purposes. None of this amount qualifies for the dividends received deduction
available to corporations.
All of the dividends from the Tax-Free Portfolio declared in 1994 are
exempt from Federal income tax. However, in accordance with the Internal
Revenue Code, you are required to report them on your 1994 Federal income tax
return.
Although dividend income from the Tax-Free Portfolio is exempt from
Federal taxation, it may not be exempt from state or local taxation. You should
consult your tax advisor as to the state and local tax status of the dividends
you received.
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