A SWISS The Swiss
INVESTMENTS Helvetia
FUND Fund, Inc.
ANNUAL REPORT
FOR THE PERIOD ENDED
DECEMBER 31, 1995
The Swiss Helvetia Fund, Inc.
EXECUTIVE OFFICES
The Swiss Helvetia Fund, Inc.
630 Fifth Avenue
Suite 915
New York, New York 10111
(212) 486-4990
(212) 332-7930
NAVDirect Line
(212) 486-4995
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THE SWISS HELVETIA FUND, Inc.
Directors and Officers
Paul Hottinguer
CHAIRMAN AND
CHIEF EXECUTIVE OFFICER
Eric R. Gabus
VICE CHAIRMAN
(NON OFFICER)
Richard A. Brealey
DIRECTOR
Claude Frey
DIRECTOR
Jean-Louis Gillieron
DIRECTOR
Baron Hottinger
DIRECTOR
Henry B. Hyde, Esq.
DIRECTOR
Claude Mosseri-Marlio
DIRECTOR
Stephen K. West, Esq.
DIRECTOR
Samuel B. Witt III, Esq.
DIRECTOR
Georges L. de Montebello
PRESIDENT
Rodolphe Hottinger
EXECUTIVE VICE PRESIDENT
AND CHIEF OPERATING OFFICER
Rudolf Millisits
VICE PRESIDENT
Edward J. Veilleux
VICE PRESIDENT AND TREASURER
Brian C. Nelson
VICE PRESIDENT
Paul R. Brenner, Esq.
SECRETARY
Joseph A. Finelli
ASSISTANT TREASURER
INVESTMENT ADVISOR
Hottinger Capital Corp.
630 Fifth Avenue
Suite 915
New York, New York 10111
(212) 332-7930
ADMINISTRATOR
Investment Company Capital Corp.
CUSTODIAN
PNCBank, N.A.
TRANSFER AGENT
PNC Bank, NA
(800) 852-4750
LEGAL COUNSEL
Paul R. Brenner, Esq.
and
Kelley, Drye &Warren
INDEPENDENT AUDITORS
Deloitte &Touche LLP
The Investment Advisor
The Fund is managed by Hottinger Capital Corp., which is 100% owned by the
Hottinger Group.
The Hottinger Group includes Banque Hottinguer, which was formed in Paris in
1786 and is one of Europe's oldest private banking firms. The Hottinger Group
has remained under the control of the Hottinger family through seven
generations. It has offices in New York, Zurich, Geneva, Paris and Luxembourg.
EXECUTIVE OFFICES
The Swiss Helvetia Fund, Inc.
630 Fifth Avenue
Suite 915
New York, New York 10111
(212) 332-7930
FOR INQUIRIES AND REPORTS:
(212) 486-4990
Fax (212) 486-4998
NAV Direct Line
(212) 486-4995
The Fund
The Swiss Helvetia Fund, Inc. is a non-diversified, closed-end investment
company whose objective is to seek long-term capital appreciation through
investment in equity and equity-linked securities of Swiss companies. The Fund,
listed on the New York Stock Exchange under the symbol "SWZ," is managed by
Hottinger Capital Corp.
Net Asset Value is calculated every Friday by 5:00 P.M. (Eastern Standard Time).
The most recent calculation is available by calling (212) 486-4995. Weekly Net
Asset Value is also published in BARRON'S, the Monday edition of THE WALL STREET
JOURNAL and the Saturday edition of THE NEW YORK TIMES.
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THE SWISS HELVETIA FUND, INC.
Letter to Stockholders
THE YEAR IN REVIEW
"NINETEEN NINETY-SIX MAY WELL GO DOWN IN SWISS HISTORY AS THE YEAR OF THE REFORM
OF THE SWISS CAPITAL MARKET. . . .THE ADOPTION OF THE NEW SECURITIES LAW AND THE
IMPLEMENTATION OF THE SWISS ELECTRONIC STOCK EXCHANGE MARK SIGNIFICANT AND
DECISIVE STEPS TOWARDS A MORE LIBERAL REGULATORY ENVIRONMENT FOR THE 21ST
CENTURY."(dagger)
When we analyze the SPI, the primary Swiss market performance index,
we see a rewarding stock exchange year, notwithstanding a difficult first four
months, with an advance of 23.5%. In general, the 1995 Swiss market favored the
multinational and global companies; domestic companies did not fare as well.
Many of the Fund's larger holdings performed accordingly in 1995 (SEE CHART, P.
4).
When examining the 1995 closing prices of all Swiss companies, we find
that nearly 50% stood below their 1994 close. This was particularly evident in
the retail and real estate sectors.
The Fund recorded a total return, as measured in terms of Net Asset
Value, of 26.3% for 1995. We believe, however, that the increase in Swiss stock
prices was attributed to the substantial decline in interest rates. For example,
the three-month money market rate fell from 4.12% to 1.65% and the three- to
five-year institutional Sfr. bond yield average declined from 5.29% to 3.50%.
The sharp decline in rates provided institutional and private investors with
little alternative other than to invest in equities.
The initial CPI estimates of 3.5%, relatively high by Swiss standards,
was largely attributed to the concern over a 6.5% Value Added Tax. Retailers,
consumers and producers responded with restraint, and inflation totaled 1.9% for
the year. As expected, GDP estimates were subsequently revised downwards from
2.0% to 1.2%.
(dagger)GREENE, EDWARD F. AND RENe BoSCH, INSIGHTS, v. 9 no. 10, October 1995.
THE SWISS HELVETIA FUND, INC. VS. SPI INDEX*
From inception (August 27, 1987) through December 31, 1995
In U.S. $
The Fund SPI$Adj.
+153.3% +144.6%
[Graph here]
The Fund SPI Index
starting at (start) 100.00 100.00
8/87--no 100.81 100.28
data label for 12/87 90.04 80.40
8/87 see 80.67 76.63
sample. 12/88 81.84 83.41
86.52 86.59
12/89 98.93 98.06
113.05 112.57
12/90 102.03 94.50
98.25 93.06
12/91 109.16 103.34
120.31 113.53
12/92 119.60 112.24
140.44 131.32
12/93 176.85 167.35
178.51 171.16
12/94 181.41 174.93
221.55 215.27
12/95 253.30 244.58
In Swiss Francs
The Fund SPI$Adj.
+93.3% +88.4%
[Graph here]
The Fund SPI Index
starting at (start) 100.00 100.00
8/87--no 100.53 100.00
data label for 12/87 76.45 68.27
8/87 81.21 77.15
12/88 82.04 83.63
97.04 97.12
12/89 101.86 100.97
106.91 106.46
12/90 87.02 80.59
102.24 96.84
12/91 98.68 93.42
110.79 104.26
12/92 117.42 109.90
142.12 132.53
12/93 175.61 165.73
159.35 152.38
12/94 159.18 153.11
170.91 165.62
12/95 193.33 188.41
*Gross of Fund expenses.
2
<PAGE>
THE SWISS HELVETIA FUND, INC.
THE RIGHTS OFFERING
In its prospectus dated July 26, 1995, the Fund offered 3,075,000
shares of common stock through a non-transferable rights offering, with
Prudential Securities as dealer/manager. The subscription period for the
transaction commenced on August 2, 1995 and ended on August 25, 1995. Following
the tabulation of the subscriptions, it was determined that the Fund had
received primary and oversubscription orders for 4,557,242 shares. The Board
considered the authorization of a 25% oversubscription allotment, namely 768,750
additional shares, to satisfy a portion of the oversubscription orders.
However, in order to protect the existing stockholders from incremental
dilution, the Board voted against it.
In the aftermath, we can say that the offering was successful. We can
further say that the offering was well-timed for the market, and the managers
have invested approximately $54 million in proceeds so as to take advantage of
the market in motion. It may have been more diffi-cult to make the selection
amongst the mid- and small-cap investments, but for the Fund, it was beneficial,
and the additional acquisitions maintained the fair balance of the portfolio
(SEE CHART, BOTTOM RIGHT).
THE ELECTRONIC STOCK EXCHANGE
"IF A MARKET'S LIQUIDITY IS BELIEVED TO DEPEND TO SOME EXTENT ON THE AMOUNT
OF INFORMATION AVAILABLE TO INVESTORS AND DEALERS, THE [SWISS ELECTRONIC
EXCHANGE] WILL UNDOUBTEDLY ENHANCE LIQUIDITY."(dagger)
On December 8, 1995, the initial segment of foreign shares traded on
this new "federated" stock exchange, combining the Zurich, Basel and Geneva
trading places into one electronic trading process. Step by step, further
segments will be included, permitting a smooth changeover from the present
system. The initial experiences
THE SWISS HELVETIA FUND--TEN LARGEST HOLDINGS
COST MARKET VALUE % OF TOTAL
IN U.S. $ IN U.S. $ NET ASSETS
AS OF AS OF AS OF
12/31/95 12/31/95 12/31/95
1. Roche Holding AG $17,786,321 $ 49,694,170 16.5%
2. Nestle AG 18,837,446 33,211,869 11.0
3. Sandoz AG 11,253,148 23,454,451 7.8
4. Union Bank of
Switzerland 8,898,307 19,521,083 6.5
5. Ciba-Geigy AG 10,690,848 17,612,355 5.8
6. Swiss Reinsurance
Company 6,969,798 16,300,538 5.4
7. Zurich Insurance 8,163,627 14,367,517 4.8
8. BBCBrown
Boveri Ltd. 7,980,988 10,463,300 3.5
9. Credit Suisse Holding 5,571,977 10,259,414 3.4
10. Swiss Bank Corp. 3,841,579 6,129,620 2.0
Total $99,994,039 $201,014,317 66.7%
THE SWISS HELVETIA FUND--PORTFOLIO HOLDINGS PER INDUSTRY
AS OF DECEMBER 31, 1995
Pharmaceuticals 25.1%
Cash and Equiv. 3.8
Food, Luxury Goods 11.6
Insurance 12.0
Machinery 4.9
Banks 12.3
Chemicals 8.2 [graph photo]
Misc. Services 4.2
Misc. Industries 4.2
Building Contractors 2.5
Electrical Engineering 8.4
Retailers 0.7
Transport 0.5
Utilities 1.6
(dagger)LOMBARD ODIER & CIE, "THE SWISS ELECTRONIC EXCHANGE".
3
<PAGE>
THE SWISS HELVETIA FUND, INC.
are positive, and we believe that the fully integrated
trading/billing/clearing real-time system will enhance the Swiss market.
Liquidity, transparency and flexibility will give the investor a much greater
insight, and the subordination of the Exchange under the Federal Banking
Commission will guarantee strict application of rules and regulations. We expect
the integration process to be fully completed in 1996.
THE FEDERAL ELECTION
The election battle this year for the installation of Parliament for
another four years was one of the longest ever, lasting from October 22 to
November 26, and not overly eventful. The traditional conservative block
majority was returned with 52.4%. The voter participation rate was meager at
42.3%. These results only reconfirm the political stability of the country and
the traditional democratic process in Switzerland.
OUTLOOK FOR 1996
The Swiss franc is likely to remain a relatively strong currency but,
given recent monetary policy by the Swiss National Bank, may be at or near a
peak. Its strength lies in the uncertain development of a unified European
currency and an even more uncertain timeframe for implementation.
Interest rates should be the focus in 1996. We believe that they will
remain low for the first half of the year. We foresee low GDP growth of 1.5% and
inflation of 0.8%, even lower than 1995. Consumer demand is likely to remain
weak, but demand for shares of multinational companies, despite the strong Swiss
franc, looks promising. As a result, we remain cautiously optimistic for
continued appreciation of global companies and less so for pure domestic
companies. Our guarded optimism is a result of an expensive
THE SWISS HELVETIA FUND--
TEN ISSUES HAVING GREATEST APPRECIATION IN 1995(1)
Market Price Market Price
in U.S.$ in U.S.$ %
as of as of Appreciation
12/31/94 12/31/95 1994-95
1. Esec Holding AG (B) $1,126 $4,316 283.30%
2. Phonak Holding AG(R) 386 1,063 175.39
3. Swiss Reinsurance
Company (R) 606 1,164 92.08
4. Sandoz AG (R) 518 916 76.83
5. Roche Holding AG (DRC) 4,830 7,917 63.91
6. Alusuisse-Lonza
Holding AG (R) 500 793 58.60
7. Zurich Insurance (R) 192 299 55.73
8. Phoenix Mecano AG(B) 325 501 54.15
9. Ciba-Geigy AG(R) 595 881 48.07
10. Swiss Bank Corp. (B) 276 409 48.19
(1) AMONG ISSUES HELD FOR THE FULL YEAR.
(B)=BEARER SHARES
(R)=REGISTERED SHARES
4
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THE SWISS HELVETIA FUND, INC.
market, with average price/earnings ratios increasing from 12 to 16. We believe,
however, that the interest in equity investments will continue to be strong in
this low rate environment as many stocks are showing greater gross return
than fixed-income investments.
In January 1996, the discount rate was reduced to 1.5% as the Swiss
National Bank underlined its intent to continue with an expansive monetary
policy. This policy stance should benefit the corporate sector, but unemployment
should remain at approximately 4.3%. Public budgets indicate a desire to reduce
deficits, and we hope that the public officials will have the willpower to
control expenditures.
Finally, we are pleased to welcome to our Board of Directors, Mr.
Claude Frey and Stephen K. West, Esq., who were elected to the Board in late
1995. Mr. Frey comes to the Fund's Board having just completed his term of
office as President of The Swiss Parliament. Mr. West, a Member of the law firm
of Messrs. Sullivan & Crowmwell since 1964, has been serving as counsel to the
non-interested Directors of the Fund since the Fund's inception in 1987.
Thank you for your interest in the Fund.
Sincerely,
/s/Paul Hottinguer
Paul Hottinguer
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
/s/Georges L. de Montebello
Georges L. de Montebello
PRESIDENT
FINANCIAL HIGHLIGHTS
1995 1994 1993 1992
NET ASSETS
(in Million SFr) 347.2** 238.1 273.7 188.6**
(in Million $) 301.2** 181.8 184.7 128.8**
OUTSTANDING SHARES
(000) 12,262 9,187 8,810 8,809
NET ASSET VALUE
PER SHARE ($) 24.56 19.79 20.96 14.62
DIVIDEND PER SHARE ($) .65*** 1.26 0.33 0.025
**Includes Rights Offering Proceeds.
***Includes a $0.38 per share income dividend and a capital gains distribution
of $0.27.
5
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THE SWISS HELVETIA FUND, INC.
Review of Operations
Trading activity in 1995 involved changes in the following positions:
NEW INVESTMENTS BY THE FUND
Agie Holding AG
Ares Serono
Ascom Holdings Ltd.
Attisholz Holding AG
Baer Holdings Ltd.
Baumgartner Papiers S.A.
Belimo Automation AG
Bossard Holding AG
Brauerei Eichhof
Clariant AG
Danzas Holding AG (P.C.)
Edipresse SA
Elco Looser Holdings AG
Elektrowatt Ltd.
EMS Chemie Holding AG
Fotolabo SA
Galenica Holding AG
Georg Fischer AG
Immuno International AG
Intershop Holding Ltd.
Kaba Holding
Kardex AG
Kuoni Travel Holding Ltd.
Mikron Holding AG
Oerlikon-Buhrle Holding AG
Prodega AG
Publicitas Holding SA
Roche Holding AG
Schweizerhall Holding AG
Societe Generale d'Affichage SA
Sources Minerales Henniez SA
Suedelektra Holding AG
Swiss Corporation for Micro-
electronics and Watchmaking Industries Ltd. (R)
Rentenanstalt (Swiss Life Insurance and Pension)
Swissair AG
Swisslog Holding AG
Zellweger Luwa AG
DECREASES TO EXISTING INVESTMENTS
Baloise-Holding
BBC Brown Boveri Ltd.
Forbo Holdings Ltd.
Schweizerischer Bankverein (Swiss Bank Corp.)
Schweizerische
Bankgesellschaft (Union Bank of Switzerland)
Holderbank Financiere
Glarus AG
Sika Finanz AG
Schindler Holding AG
Sulzer Brothers Ltd.
Merkur Holding AG
SECURITIES DISPOSED OF
Danzas Holding AG(R)
Hero AG
Holvis AG
Swiss Corporation for Micro-
electronics and Watchmaking Industries Ltd. (B)
Usego-Trimerco Holding AG
Vetropack
ADDITIONS TO EXISTING INVESTMENTS
Alusuisse-Lonza Holding AG
Bobst Ltd.
Ciba-Geigy AG
Bucher Holding Company
Credit Suisse Holding
Datwyler Holding AG
Esec Holding AG
Gurit-Heberlein AG
Keramik Holding AG Laufen
Nokia-Maillefer Holding SA
Phonak Holding AG
Rieter Holding AG
Roche Holding AG
Sandoz AG
Siegfried AG
Schweizerische Industrie-Gesellschaft (SIG)
Societe Generale de Surveillance Holding AG
Schweizerische Ruckversicherungs-
Gesellschaft (Swiss Reinsurance Company)
Winterthur Schweizerische Versicherungs-Gesellschaft
Zurich Schweizerische Versicherungs-Gesellschaft (Zurich Insurance)
(B) = BEARER SHARES
(P.C.) = PARTICIPATION CERTIFICATES
(R) = REGISTERED SHARES
6
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statement of Net Assets December 31, 1995
Percent
No. of of Net
Shares Security Value Assets
COMMON STOCKS AND WARRANTS - 96.2%
BANKS - 12.3%
1,200 BAER HOLDINGS LTD.
BEARER SHARES $ 1,337,845 0.4%
Banking group specializing in asset
management, investment consulting and
securities trading.
(cost $1,357,654)
100,000 CREDIT SUISSE HOLDING*
REGISTERED SHARES 10,259,414 3.4
A global financial services
institution whose main holding
is Credit Suisse, one of
Switzerland's "Big Three" banks.
(cost $5,571,977)
18,000 SCHWEIZERISCHE BANKGESELLSCHAFT*
(UNION BANK OF SWITZERLAND)
BEARER SHARES 19,521,083 6.5
Largest Swiss full-service bank.
(cost $8,898,307)
15,000 SCHWEIZERISCHER BANKVEREIN*
(SWISS BANK CORPORATION)
BEARER SHARES 6,129,620 2.0
One of the three largest
international Swiss banks.
(cost $3,841,579)
37,247,962 12.3
BUILDING CONTRACTORS & MATERIALS - 2.5%
2,000 FORBO HOLDINGS LTD.
REGISTERED SHARES 855,457 0.3
Manufacturer of wall and floor
coverings.
(cost $984,974)
5,500 HOLDERBANK FINANCIeRE GLARUS AG
BEARER SHARES 4,223,061 1.4
Large cement producer with
worldwide operations.
(cost $3,356,281)
BUILDING CONTRACTORS & MATERIALS - (CONTINUED)
3,500 KERAMIK HOLDING AG LAUFEN
BEARER SHARES $ 2,429,290 0.8%
One of the largest suppliers of
floor and wall tiles, sanitary
fittings, crockery and ceramics
in the world.
(cost $2,001,195)
7,507,808 2.5
CHEMICALS - 8.2%
20,000 CIBA-GEIGY AG*
REGISTERED SHARES 17,612,355 5.8
The largest chemical company in
Switzerland.
(cost $10,690,848)
5,000 CLARIANT AG
REGISTERED SHARES** 1,639,771 0.5
Company specializing in color
chemistry. The group manufactures
a range of dyestuffs, pigments,
chemicals, additives and
masterbatches for the textile,
paper, leather, plastics, synthetic
fibers and paint industries.
(cost $1,623,814)
250 EMS CHEMIE HOLDING AG
BEARER SHARES 1,136,561 0.4
This Group produces polymers
and manufactures high-grade
chemical intermediates and fine
chemicals. It also builds industrial
plants, develops and sells fuses
for civil and military use and
generates and distributes
electrical power.
(cost $1,142,571)
7
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statement of Net Assets (continued) December 31, 1995
Percent
No. of of Net
Shares Security Value Assets
COMMON STOCKS AND WARRANTS - (CONTINUED)
CHEMICALS - (CONTINUED)
600 GURIT-HEBERLEIN AG
BEARER SHARES $ 1,301,406 0.4%
European market leader for wind
screen bonding systems, ski bases
and optically pure thermoplastic
sheeting for the auto industry.
(cost $1,159,162)
1,500 IMMUNO INTERNATIONAL AG
BEARER SHARES 939,615 0.3
The company develops,
manufactures and supplies
biological products, blood products
and human plasma derivatives.
(cost $917,929)
2,500 SIEGFRIED AG
REGISTERED SHARES 1,952,108 0.6
International producer and
supplier of chemicals and pharma-
ceuticals for major businesses.
(cost $1,587,882)
2,000 SIKA FINANZ AG
BEARER SHARES 485,858 0.2
Leading producer of construction
chemicals.
(cost $623,488)
25,067,674 8.2
ELECTRICAL ENGINEERING & ELECTRONICS - 8.4%
7,000 AGIE HOLDING AG
REGISTERED SHARES** 467,638 0.2
Leading manufacturer of spark
erosion machinery in Europe.
(cost $526,094)
1,000 ASCOM HOLDINGS LTD.
BEARER SHARES 1,019,434 0.3
Through its subsidiaries, active
in telecommunications, services
automation and enterprise
networks throughout Europe
and the United States.
(cost $1,077,861)
ELECTRICAL ENGINEERING & ELECTRONICS - (CONTINUED)
9,000 BBC BROWN BOVERI LTD.*
BEARER SHARES $10,463,300 3.5%
One of the largest electrical
engineering firms in the world.
(cost $7,980,988)
1,000 BELIMO AUTOMATION AG
REGISTERED SHARES** 191,740 0.1
World market leader in damper
and volume control actuators for
ventilation and air conditioning
equipment.
(cost $206,063)
700 ESEC HOLDING AG
BEARER SHARES 3,021,430 1.0
Market leader in the field of die
bonding technology used by
manufacturers of semiconductors.
(cost $871,122)
2,000 KABA HOLDING
REGISTERED SHARES** 1,032,448 0.3
Company specializes in
mechanical and electronic
security systems.
(cost $898,751)
3,000 LANDIS & GYR AG
REGISTERED SHARES 2,446,642 0.8
A leading European supplier of production
systems and complete services to the
electric wire and cable industry.
(cost $1,925,854)
2,000 PHONAK HOLDING AG
REGISTERED SHARES 2,125,629 0.7
A leader in hearing aids, ranked
no. 4 in the world.
(cost $928,756)
18,000 SWISS CORPORATION FOR MICRO-
ELECTRONICS AND WATCHMAKING
INDUSTRIES LTD. (SMH)
REGISTERED SHARES 2,358,147 0.8
Watchmaking company.
(cost $2,604,709)
8
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statement of Net Assets (continued) December 31, 1995
Percent
No. of of Net
Shares Security Value Assets
COMMON STOCKS AND WARRANTS - (CONTINUED)
ELECTRICAL ENGINEERING & ELECTRONICS - (CONTINUED)
2,000 SWISSLOG HOLDING AG
REGISTERED SHARES $ 555,266 0.2%
Produces, sells and installs
automation systems.
(cost $608,560)
ZELLWEGER LUWA AG
1,500 BEARER SHARES** 1,464,081 0.5
1,300 WARRANTS EXPIRING 5/21/97** 12,407 --
Worldwide diversified industrial
and service company active mainly
in textile electronics, air filtering
and conditioning techniques.
(cost $1,237,914)
25,158,162 8.4
FOOD, LUXURY GOODS - 11.6%
150 BRAUEREI EICHHOF
REGISTERED SHARES 247,267 0.1
Primarily a major Swiss brewery which
is also one of the world leaders
in color measuring systems.
(cost $288,879)
75 LINDT & SPRuENGLI AG
REGISTERED SHARES 1,268,870 0.4
Major manufacturer of premium
Swiss chocolates.
(cost $916,175)
30,000 NESTLE AG*
REGISTERED SHARES 33,211,869 11.0
Largest food and beverage
processing company in the world
and Switzerland's largest company.
(cost $18,837,446)
150 SOURCES MINERALES HENNIEZ SA
REGISTERED SHARES 415,148 0.1
Mostly domestic soft drink
company.
(cost $434,241)
35,143,154 11.6
INSURANCE - 12.0%
900 BALOISE-HOLDING
REGISTERED SHARES $ 1,874,024 0.6%
Medium-sized insurer active in
all sectors of insurance.
(cost $1,570,143)
14,000 SCHWEIZERISCHE RuCKVERSICHERUNGS-
GESELLSCHAFT*
(SWISS REINSURANCE COMPANY)
REGISTERED SHARES 16,300,538 5.4
Second largest reinsurance
company in the world.
(cost $6,969,798)
2,500 SWISS LIFE INSURANCE AND
PENSION (RENTENANSTALT)
PARTICIPATION CERTIFICATES 1,002,082 0.3
Medium-sized Swiss life
insurance company.
(cost $675,514)
4,000 WINTERTHUR SCHWEIZERISCHE
VERSICHERUNGS-GESELLSCHAFT
REGISTERED SHARES 2,831,858 0.9
Leading Swiss international
insurance company.
(cost $2,277,447)
48,000 ZURICH SCHWEIZERISCHE
VERSICHERUNGS-GESELLSCHAFT*
(ZURICH INSURANCE)
REGISTERED SHARES 14,367,517 4.8
A large worldwide insurance
operator.
(cost $8,163,627)
36,376,019 12.0
MACHINERY - 4.9%
1,800 BOBST LTD.
BEARER SHARES 2,811,036 0.9
Leading international
manufacturer of cardboard
packaging machines.
(cost $2,548,894)
9
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statement of Net Assets (continued) December 31, 1995
Percent
No. of of Net
Shares Security Value Assets
COMMON STOCKS AND WARRANTS - (CONTINUED)
MACHINERY- (CONTINUED)
700 BOSSARD HOLDING AG
BEARER SHARES $1,305,744 0.4%
Manufactures fastening elements,
industrial adhesives, tools,
pneumatics and handling modules
and automated assembly systems.
(cost $1,229,980)
4,000 BUCHER HOLDING COMPANY
BEARER SHARES 2,290,474 0.8
Manufacturer of agricultural
machines, special vehicles, fruit
juice equipment and plastics machines.
(cost $2,202,504)
900 GEORG FISCHER AG
BEARER SHARES 1,171,265 0.4
A mechanical engineering group
that is a market leader in vehicle
engineering and pipeline systems.
(cost $1,187,360)
10,000 MIKRON HOLDING AG
REGISTERED SHARES** 1,023,772 0.3
Machine tools and milling machine
producer.
(cost $1,029,069)
RIETER HOLDING AG
4,000 REGISTERED SHARES 1,155,648 0.4
3,750 WARRANTS 3/13/96** 9,435 --
Leading supplier of spinning
machinery for the textile industry.
(cost $1,050,221)
2,000 SAURER GRUPPE HOLDING AG
REGISTERED SHARES 780,843 0.3
Machinery maker with dominant
market share.
(cost $739,079)
1,000 SCHINDLER HOLDING AG
REGISTERED SHARES 1,075,829 0.4
One of the world's largest
elevator companies and a leading
Swiss machinery enterprise.
(cost $858,517)
MACHINERY - (CONTINUED)
1,900 SCHWEIZERISCHE INDUSTRIE-
GESELLSCHAFT (SIG)
REGISTERED SHARES $ 1,928,683 0.6%
Medium-sized machinery manufacturer
with interests in the packaging, defense
and railway industries.
(cost $1,693,529)
2,000 SULZER BROTHERS LTD.
REGISTERED SHARES 1,145,237 0.4
A machine manufacturer and
worldwide leader in weaving
machines and sewing machines.
(cost $952,300)
14,697,966 4.9
MISCELLANEOUS INDUSTRIES - 4.2%
4,500 ALUSUISSE-LONZA HOLDING AG
REGISTERED SHARES 3,568,454 1.2
A major aluminum producing and
processing company.
(cost $2,572,265)
2,000 AFG ARBONIA-FORSTER HOLDING AG
BEARER SHARES 1,926,080 0.6
Manufacturer of heating
radiators, refrigeration kitchen
equipment and steel tubing.
(cost $614,976)
1,200 ATTISHOLZ HOLDING AG
REGISTERED SHARES 680,895 0.2
One of the leading manufacturers of
cellulose and paper hygiene products.
(cost $826,249)
1,100 BAUMGARTNER PAPIERS S.A.
REGISTERED SHARES 448,551 0.1
Swiss paper company active in the
field of wholesale paper, paper
processing, manufacturing of cigarette
filters and capillary reservoirs.
(cost $505,830)
10
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statement of Net Assets (continued) December 31, 1995
Percent
No. of of Net
Shares Security Value Assets
COMMON STOCKS AND WARRANTS - (CONTINUED)
MISCELLANEOUS INDUSTRIES- (CONTINUED)
1,000 DATWYLER HOLDING AG
BEARER SHARES $ 1,891,376 0.6%
Diversified manufacturer of telecom-
munication cable, floor coverings
and precision steel tubing.
(cost $1,571,020)
1,000 ELCO LOOSER HOLDINGS AG
REGISTERED SHARES 407,774 0.1
A dominant player in European
heating technology.
(cost $408,632)
2,000 KARDEX AG
BEARER SHARES 642,027 0.2
Company specializing in industrial
and office storage systems, office
machinery, safety and computer software.
(cost $595,636)
10,000 OERLIKON-BUHRLE HOLDING AG
REGISTERED SHARES** 815,548 0.4
The diversified holding company includes
Bally (shoes and accessories), Balzers
and Leybold (surface technologies),
Oerlikon Contraves (military products
and space technology), Pilatus (aircraft),
Kunz and Dietfurt (threads and yarns),
real estate and hotels.
(cost $822,099)
2,000 PHOENIX MECANO AG
BEARER SHARES 1,002,950 0.3
Leading Swiss packaging
manufacturer for the mechanical
engineering and electronics industry.
(cost $525,502)
1,500 SARNA KUNSTSTOFF HOLDING AG
REGISTERED SHARES 1,620,250 0.5
Processor and manufacturer of plastic
materials for the building industry.
(cost $1,550,825)
13,003,905 4.2
MISCELLANEOUS SERVICES - 4.2%
3,200 COMPAGNIE FINANCIERE RICHEMONT AG
BEARER SHARES $4,803,054 1.6%
Investment company with principal
interests in luxury goods and tobacco.
(cost $1,906,624)
2,500 EDIPRESSE SA
BEARER SHARES 672,393 0.2
Operates printing companies,
newspapers, kiosks and bookshops.
(cost $712,607)
1,000 INTERSHOP HOLDING LTD.
BEARER SHARES 572,618 0.2
Company involved in the construction
and funding of shopping centers and
property for commercial use, both
nationally and internationally.
(cost $514,411)
700 KUONI TRAVEL HOLDING LTD.
REGISTERED SHARES 1,123,547 0.4
Operates travel agencies primarily
in the United Kingdom, Germany,
France and Austria.
(cost $1,144,012)
690 PUBLICITAS HOLDING SA
PARTICIPATION CERTIFICATES 619,599 0.2
Largest Swiss advertising intermediary.
(cost $689,384)
2,000 SOCIETE GENERALE D'AFFICHAGE SA
PARTICIPATION CERTIFICATES 884,956 0.3
Swiss advertising firm.
(cost $799,843)
8,000 SOCIETE GENERALE DE SURVEILLANCE
HOLDING AG
REGISTERED SHARES 2,741,628 0.9
World's leading inspection
company and adjusting group.
(cost $1,624,194)
11
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statement of Net Assets (continued) December 31, 1995
Percent
No. of of Net
Shares Security Value Assets
COMMON STOCKS AND WARRANTS - (CONTINUED)
MISCELLANEOUS SERVICES - (CONTINUED)
700 SUEDELEKTRA HOLDING AG
BEARER SHARES** $ 753,080 0.4%
Investment company with significant
stakes primarily in the fields of energy
and raw materials in locations around
the world.
(cost $751,895)
12,170,875 4.2
PHARMACEUTICALS - 25.1%
600 ARES SERONO
BEARER SHARES 421,655 0.1
The company develops and markets
pharmaceutical and diagnostic products,
and is the world-wide market leader in
pharmaceutical products for the
treatment of infertility.
(cost $431,926)
1,950 GALENICA HOLDING AG
REGISTERED SHARES 592,140 0.2
Largest Swiss wholesale distributor
of pharmaceutical products.
(cost $619,562)
ROCHE HOLDING AG*
100 BEARER SHARES 1,401,180 0.5
6,100 DIVIDEND RIGHTS CERTIFICATES 48,292,990 16.0
Worldwide pharmaceutical company.
(combined cost $17,786,321)
25,600 SANDOZ AG*
REGISTERED SHARES 23,454,451 7.8
Second largest pharmaceutical
entity in Switzerland.
(cost $11,253,148)
PHARMACEUTICALS - (CONTINUED)
1,400 SCHWEIZERHALL HOLDING AG
REGISTERED SHARES $ 1,457,574 0.5%
Wholesale trader in chemical and
pharmaceutical intermediate products,
as well as in the perfume and
fertilizer business.
(cost $1,275,652)
75,619,990 25.1
RETAILERS - 0.7%
2,000 FOTOLABO SA
BEARER SHARES 798,195 0.3
Develops color photographic film.
(cost $588,083)
2,500 MERKUR HOLDING AG
REGISTERED SHARES 548,759 0.2
Operates restaurants, food vending
machines and specialty retail stores.
(cost $700,397)
450 PRODEGA AG
BEARER SHARES 566,111 0.2
Swiss market leader which operates
"Cash and Carry."
(cost $648,826)
1,913,065 0.7
TRANSPORT - 0.5%
3,000 DANZAS HOLDING AG
PARTICIPATION CERTIFICATES 624,675 0.2
Third largest forwarding agent
in the world and the market
leader in Europe.
(cost $663,900)
1,000 SWISSAIR AG
REGISTERED SHARES** 728,787 0.3
Switzerland's largest airline company.
(cost $681,477)
1,353,462 0.5
12
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statement of Net Assets (continued) December 31, 1995
Percent
No. of of Net
Shares Security Value Assets
COMMON STOCKS AND WARRANTS - (CONCLUDED)
UTILITIES - 1.6%
8,000 ELEKTROWATT LTD.
BEARER SHARES $ 2,929,030 1.0%
Sells electricity from wholly-owned
electric plants and interests in hydro
and nuclear power plants.
(cost $2,482,523)
3,500 NOKIA - MAILLEFER HOLDING SA
BEARER SHARES 1,831,078 0.6
Europe's leading supplier of
production systems and complete
services to the electric wire and
cable industry.
(cost $732,210)
4,760,108 1.6
458,665 TOTAL COMMON STOCKS AND WARRANTS
(Cost $172,249,085) 290,020,150 96.2
Par
(000)
TIME DEPOSITS - 3.7%
12,800 CREDIT SUISSE HOLDING
3.50%, 1/03/96
(Cost $10,598,563) $ 11,105,327 3.7%
TOTAL INVESTMENTS
(Cost $182,847,648)*** 301,125,477 99.9
OTHER ASSETS IN EXCESS OF
LIABILITIES, NET 78,614 0.1
NET ASSETS APPLICABLE TO
12,261,692 SHARES OF
COMMON STOCK OUTSTANDING $301,204,091 100.0%
NET ASSET VALUE PER SHARE
($301,204,091 / 12,261,692) $24.56
*ONE OF THE TEN LARGEST PORTFOLIO HOLDINGS.
**NON-INCOME PRODUCING SECURITY.
***ALSO AGGREGATE COST FOR FEDERAL TAX PURPOSES.
DESCRIPTIONS OF COMPANIES HAVE NOT BEEN AUDITED BY DELOITTE & TOUCHE LLP.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statement of Operations For the Year Ended December 31, 1995
INVESTMENT INCOME (Note A):
Dividends (Less foreign taxes withheld of $600,427) $ 3,447,786
Interest (Less foreign taxes withheld of $15,319) 366,795
Total income 3,814,581
EXPENSES:
Investment advisory fee (Note B) 2,010,582
Administration fee (Note B) 332,926
Directors' fees and related expenses (Note D) 140,570
Legal fee 136,645
Transfer agent fees (Note B) 122,724
Miscellaneous 118,915
Accounting fee (Note B) 93,060
Sub-custodian fee (Note B) 79,768
Printing and postage 69,270
Franchise fee 36,468
Audit fee 29,638
Custodian fee (Note B) 20,106
Insurance 4,113
Total expenses 3,194,785
Net investment income 619,796
NET REALIZED AND UNREALIZED GAIN/(LOSS) IN INVESTMENTS:
Net realized gain from security transactions 2,652,592
Net realized foreign exchange gain 4,617,468
Change in net unrealized appreciation of investments 64,578,521
Change in net unrealized appreciation on translation of
assets and liabilities denominated in foreign currency 6,323
Net gain on investments 71,854,904
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $72,474,700
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
THE SWISS HELVETIA FUND, INC.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
For the Year Ended December 31,
1995 1994
<S> <C> <C>
INCREASE/(DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 619,796 $ 31,767
Net realized foreign exchange gain 4,617,468 2,793,537
Net realized gain from security transactions 2,652,592 7,230,056
Net unrealized appreciation of investments 64,578,521 (8,570,209)
Net unrealized appreciation on translation of
assets and liabilities denominated in
foreign currency 6,323 4,516
Net increase in net assets resulting from operations 72,474,700 1,489,667
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income (619,796) (2,378,661)
Capital gains distribution and net realized foreign
exchange gain (7,174,991) (8,721,758)
Total distributions to shareholders (7,794,787) (11,100,419)
CAPITAL SHARE TRANSACTIONS:
Value of 376,836 shares issued in reinvestment
of dividends -- 6,707,725
Value of 3,075,000 shares issued in the rights
offering, net 54,729,623 --
Total increase from capital share transactions 54,729,623 6,707,725
Total increase/(decrease) in net assets 119,409,536 (2,903,027)
NET ASSETS:
Beginning of year 181,794,555 184,697,582
End of year $301,204,091 $181,794,555
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
THE SWISS HELVETIA FUND, INC.
Financial Highlights
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data. This information has been derived from information
provided in the financial statements and market price data for the Fund's
shares.
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value at beginning of period $19.79 $20.96 $14.62 $13.80 $13.17
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.06 0.03 0.08 0.05 0.01
Net realized and unrealized gain/(loss)
on investments(1) 6.82 0.12 6.59 1.04 0.65
TOTAL FROM INVESTMENT OPERATIONS 6.88 0.15 6.67 1.09 0.66
CAPITAL CHARGE (1.46) (0.06) -- (0.24) --
LESS DIVIDENDS AND DISTRIBUTIONS:
Dividends from net investment income (0.06) (0.27) (0.08) (0.03) (0.03)
Distributions from net realized capital gains
and net realized currency gain/(loss) (0.59)(3) (0.99) (0.25) -- --
Total distributions (0.65) (1.26) (0.33) (0.03) (0.03)
Net asset value at end of period $24.56 $19.79 $20.96 $14.62 $13.80
Market value per share, end of period $21.25 $18.88 $22.75 $13.88 $13.25
TOTAL INVESTMENT RETURN(2):
Based on market value per share 16.30% (10.67)% 65.39% 6.55% 11.84%
Based on net asset value per share 26.28% 1.47% 44.90% 7.72% 5.03%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.38% 1.57% 1.50% 1.69% 1.85%
Net investment income 0.27% 0.02% 0.29% 0.39% 0.07%
SUPPLEMENTAL DATA:
Net assets at end of period (000) $301,204 $181,795 $184,698 $128,763 $110,500
Average net assets during period (000) $231,234 $184,112 $151,936 $120,850 $105,593
Portfolio turnover rate 10% 28% 20% 13% 41%
</TABLE>
(1)1995 AND 1994 INCLUDES NET REALIZED CURRENCY GAIN. PRIOR YEARS' NET
REALIZED CURRENCY GAIN/(LOSS) IS INCLUDED IN NET INVESTMENT INCOME.
(2)TOTAL INVESTMENT RETURN BASED ON MARKET VALUE EXCEEDED THAT AS MEASURED
BASED ON NET ASSET VALUE DUE TO A REDUCTION IN THE DISCOUNT TO NET ASSET
VALUE AT WHICH THE FUND'S SHARES TRADED THROUGHOUT THE YEAR. TOTAL
INVESTMENT RETURN EXCLUDES THE EFFECTS OF SALES LOADS AND COMMISSIONS.
(3)FOR 1995 TAX PURPOSES, THE INCOME DISTRIBUTIONS WERE $0.38 PER SHARE
ORDINARY INCOME AND $0.27 PER SHARE LONG-TERM CAPITAL GAINS.
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements
A. SIGNIFICANT ACCOUNTING POLICIES - The Swiss Helvetia Fund, Inc. (the
"Fund") was incorporated in Delaware on October 24, 1986 and commenced
operations on August 27, 1987. The Fund is registered under the
Investment Company Act of 1940, as amended, as a closed-end,
non-diversified management investment company. The Fund's investment
objective is to seek long-term growth of capital through investment in
equity and equity-linked securities of Swiss companies.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Significant accounting policies are as follows:
SECURITY VALUATION - Investments are stated at value. All securities
which are traded on the Zurich, Geneva or Basel stock exchanges and for
which market quotations are readily available are valued at the last sales
price on the day of valuation or, if no sales prices are available at the
time, at the mean between the closing bid and asked prices for that day.
For securities traded on two or more of the three exchanges, the Fund will
use prices reported on the Zurich exchange if the security is listed there,
and if not, the prices reported on the Geneva or Basel exchange. Securities
that are not traded on any of the three exchanges will be valued, if bid
and asked quotations are available, at the mean between the current bid and
asked price. If bid and asked quotations are not available, then such
securities will be valued at fair value as determined in good faith by or
under the direction of the Board of Directors of the Fund.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME - Securities
transactions are recorded on the trade date. The cost of investments sold
is determined by use of the specific identification method for both
financial reporting and income tax purposes. Interest income is recorded on
an accrual basis; dividend income is recorded on the ex-dividend date.
Swiss withholding tax is recorded as an expense, net of an amount
receivable from Swiss tax authorities pursuant to a tax treaty.
FOREIGN CURRENCY TRANSLATIONS - The books and records of the Fund are
maintained in United States dollars. Swiss franc amounts are translated
into United States dollars on the following basis:
* Asset and liability accounts are adjusted to reflect the current
exchange rate at the end of the period.
* Exchange gain or loss that occurs because of a change in exchange
rates between the time an income or expense amount is accrued and the time
it is realized is included in net realized foreign exchange gain for the
year.
* Securities are recorded at cost based upon exchange rates at the
time Swiss francs are purchased or received. Exchange rates are identified
on a first-in, first-out basis.
It is not practical to distinguish that portion of the results of
operations of the Fund that arise as a result of changes in the exchange
rates from fluctuations that arise from changes in market prices of
investments during the period.
FEDERAL INCOME TAX - No provision is made for federal income taxes as
it is the Fund's intention to continue to qualify as a regulated investment
company under Subchapter Mof the Internal Revenue Code and to make
requisite distributions to shareholders which will be sufficient to relieve
it from all or substantially all federal income taxes. The Fund's policy is
to distribute to shareholders substantially all of its taxable net
investment income and net realized long-term capital gains.
B. INVESTMENT ADVISORY FEE, TRANSACTIONS WITH AFFILIATES AND OTHER FEES
- Hottinger Capital Corp. ("HCC"), jointly owned by Hottinger U.S., Inc.
and Hottinger & Cie (Zurich), serves as the Fund's investment advisor.
As compensation for its advisory services at December 31, 1995,
HCC receives from the Fund an annual fee, calculated and paid monthly,
at the annual rate of 1.00% of the first $60 million of the Fund's average
month-end net assets; .90% of the Fund's average month-end net assets in
excess of $60 million but not exceeding $100 million; .80% of the
Fund's average month-end net assets in excess of $100 million but not
exceeding $200 million; and .70% of the Fund's average month-end net
assets in excess of $200 million. At December 31, 1995, accrued advisory
fees were $209,648. For the year ended December 31, 1995, the
17
<PAGE>
THE SWISS HELVETIA FUND, INC.
Notes to Financial Statements (concluded)
Fund paid brokerage commissions of approximately $28,600 to Hottinger &
Cie.
Investment Company Capital Corp. ("ICC"), a wholly-owned subsidiary of
Alex. Brown & Sons Incorporated, serves as the Fund's administrator. As
compensation for providing administrative services at December 31, 1995,
ICC receives from the Fund an annual fee, calculated daily and paid
monthly, equal to .20% of the first $75 million of the Fund's average
monthly net assets; .15% of the Fund's average monthly net assets in excess
of $75 million but not exceeding $150 million; .10% of the Fund's average
monthly net assets in excess of $150 million but not exceeding $225
million; and .05% of the Fund's average monthly net assets in excess of
$225 million.
Certain officers and/or directors of the Fund are officers and/or
directors of HCC, Hottinger U.S., Inc., Hottinger & Cie and ICC.
PNC Bank N.A., a wholly-owned subsidiary of PNC Financial Corp., acts as
the Fund's custodian and transfer agent. PNC Bank and the Fund have
entered into an agreement with Credit Suisse providing for the custody of
Swiss securities held by the Fund.
As compensation of providing accounting services, ICC receives from the
Fund an annual fee, calculated weekly and paid monthly, based on the
Fund's average daily net assets. ICC received $93,060 for accounting
services for the year ended December 31, 1995.
C. CAPITAL SHARE TRANSACTIONS - There are 50 million shares of $.001 par
value common stock authorized. Of the 12,261,692 shares outstanding at
December 31, 1995, HCC owned 13,432 shares. During 1995, the Fund issued
3,075,000 new shares of common stock under a non-transferable rights
offering to its shareholders, which netted proceeds of $54,729,623.
D. DIRECTORS' FEES - The Fund incurs approximately $7,500 per annum in
compensation to each director who is not affiliated with the Fund, its
investment advisor or administrator, except for the Chairman of the
Audit Committee. The Chairman of the Audit Committee receives an
annual fee of $8,250. In addition, each director who is not so
affiliated receives $750 for each attended directors' meeting and $750 for
each committee meeting attended if held separately, and
reimbursement for out-of-pocket expenses. At December 31, 1995,
accrued directors' fees were $8,744.
E. INVESTMENT TRANSACTIONS - Purchases and sales of securities, other than
short-term obligations, aggregated $63,599,079 and $21,092,191,
respectively, for the year ended December 31, 1995. For federal tax
purposes, aggregate gross unrealized appreciation for all securities in
which there is an excess of value over tax cost was $119,735,732,
aggregate gross unrealized depreciation for all securities in which
there is an excess of tax cost over value was $1,457,903 and net unrealized
appreciation was $118,277,829.
F. NET ASSETS - At December 31, 1995, net assets consisted of:
Paid-in capital $182,439,897
Undistributed net
realized gain from
security and foreign
exchange transactions 477,105
Unrealized appreciation of
investments 118,277,829
Unrealized translation gain 9,260
$301,204,091
18
<PAGE>
THE SWISS HELVETIA FUND, INC.
Independent Auditors' Report
The Board of Directors and Stockholders,
The Swiss Helvetia Fund, Inc.:
We have audited the accompanying statement of net assets of The Swiss Helvetia
Fund, Inc. as of December 31, 1995, the related statements of operations for the
year then ended and changes in net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
five-year period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities
owned at December 31, 1995 by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of The Swiss
Helvetia Fund, Inc. as of December 31, 1995, the results of its operations, the
changes in its net assets, and the financial highlights for the respective
stated periods in conformity with generally accepted accounting principles.
DELOITTE &TOUCHE LLP
Princeton, New Jersey
January 30, 1996
Additional Information (Unaudited)
This report is sent to the stockholders of The Swiss Helvetia Fund, Inc. for
their information. It is not a prospectus, circular or representation intended
for use in the purchase or sale of shares of the Fund or of any securities
mentioned in this report.
Notice is hereby given in accordance with section 23(c) of The Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
The following information summarizes all per share distributions declared by
the Fund during the year ended December 31, 1995.
Domestic Ordinary Income $.22
Foreign Source Income $.16
Total Ordinary Income $.38
Foreign Tax Paid or Withheld $.04
Long-Term Capital Gains $.27
The foreign taxes paid or withheld per share represent taxes incurred by
the Fund on interest and dividends received by the Fund from foreign sources.
Foreign taxes paid or withheld should be included in taxable income with an
offsetting deduction from gross income or as a credit for taxes paid to foreign
governments. You should consult your tax advisor regarding the appropriate
treatment of foreign taxes paid.
19
<PAGE>
THE SWISS HELVETIA FUND, INC.
Dividend Reinvestment Plan
THE PLAN
The Swiss Helvetia Fund's (the "Fund") Dividend Reinvestment Plan offers
you a convenient way to invest your income dividends and capital gains
distributions in additional shares of the Fund's common stock thereby increasing
your holdings of the Fund's shares. Participation in the Plan does not alter the
normal federal, state and local income tax consequences associated with income
dividends and capital gains distributions.
The Plan is designed to allow all stockholders an opportunity to
participate. Some of the Plan features are:
1. Dividend reinvestment automatically increases the number of shares you own.
2. Dividends and distributions are in additional shares at the lower of net
asset value or market price.
3. Shares purchased through the Plan are recorded in your account providing
protection against theft or destruction of share certificates.
4. You may terminate your Plan account at any time.
Not all brokerage firms holding shares in brokerage account permit
participation in dividend reinvestment plans such as the Plan, and even if a
stockholder's brokerage firm does permit such participation, a stockholder may
not be able to transfer such shares to another broker who does not permit such
participation. Stockholders are encouraged to contact their brokerage firm to
determine any restrictions upon participation.
HOW DO I ENROLL IN THE PLAN?
To participate in the Fund's Dividend Reinvestment Plan, please contact
PNC Bank, N.A. ("PNC")
To start the Plan with a specific dividend, please forward the form to PNC
10 days prior to the record date for that dividend.
HOW DOES THE PLAN WORK?
When a dividend is declared, non-participants in the Plan will receive
cash. Plan participants will receive the equivalent in shares of the Fund valued
at the lower of the market price or net asset value as described below.
1. Whenever net asset value is equal to or less than market price by no more
than 5% at the time of valuation, Plan participants will be issued shares
at net asset value.
2. If the net asset value is less than 95% of the market price on the valuation
date, Plan participants will be issued shares at 95% of the market price of
shares on the valuation date.
3. If net asset value exceeds the market price of shares on the valuation
date. PNC, as agent for the participants, will buy shares on the open
market, on the New York Stock Exchange or elsewhere, for the participant's
accounts.
If, before PNC has completed its purchase, the market price exceeds the
net asset value of shares, the average per share purchase price paid by PNC may
exceed the net asset value of shares, resulting in the acquisition of fewer
shares than if the dividend or distribution has been paid in shares issued by
the Fund.
WILL THE ENTIRE AMOUNT OF MY DISTRIBUTION BE REINVESTED?
As a Plan participant, the entire amount of your distribution will be
reinvested. For any balance that is insufficient to purchase a whole share, the
amount will be credited to your account in fractional shares.
WILL STOCK CERTIFICATES BE ISSUED FOR TRANSACTIONS IN THE PLAN?
A Participant will be issued a stock certificate upon request.
IS THERE ANY CHARGE TO PARTICIPATE IN THE PLAN?
There is no charge to participants for reinvesting dividends or
distributions. PNC's fee for handling the reinvestment of dividends and
distributions will be paid by the Fund. There will be no brokerage charge to
stockholders for shares issued directly to the Fund as a result of dividends or
distributions payable either in stock or cash. Each participant, however, will
pay a pro rata share of brokerage commissions incurred with respect to PNC's
open market purchases in connection with the reinvestment of dividends or
distributions.
HOW CAN I DISCONTINUE MY PARTICIPATION IN THE PLAN?
A stockholder may terminate his/her account under the Plan by notifying
PNC in writing. Upon termination, you will receive a certificate for the number
of shares held in the Plan.
WHERE CAN I DIRECT MY QUESTIONS AND CORRESPONDENCE?
Questions and correspondence concerning the Plan should be directed to:
PNC Bank, N.A.
P.O. Box 8950
Wilmington, Delaware 19899
1-800-852-4750
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