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<PAGE> PAGE 2
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<PAGE> PAGE 3
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SIGNATURE THOMAS F. MCDONOUGH
TITLE SECRETARY
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial information extracted from the Scudder
New Asia Fund, Inc. Annual Report for the fiscal year ended 12/31/98 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<SERIES>
<NUMBER> 1
<NAME> Scudder New Asia Fund, Inc.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 93,034,796
<INVESTMENTS-AT-VALUE> 103,714,693
<RECEIVABLES> 559,997
<ASSETS-OTHER> 189,305
<OTHER-ITEMS-ASSETS> 237,094
<TOTAL-ASSETS> 104,701,089
<PAYABLE-FOR-SECURITIES> 841,628
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 765,460
<TOTAL-LIABILITIES> 1,607,088
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 118,876,204
<SHARES-COMMON-STOCK> 8,804,757
<SHARES-COMMON-PRIOR> 8,764,601
<ACCUMULATED-NII-CURRENT> 311,835
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (26,405,037)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,310,999
<NET-ASSETS> 103,094,001
<DIVIDEND-INCOME> 1,361,158
<INTEREST-INCOME> 833,513
<OTHER-INCOME> 0
<EXPENSES-NET> 1,891,517
<NET-INVESTMENT-INCOME> 303,154
<REALIZED-GAINS-CURRENT> (18,078,128)
<APPREC-INCREASE-CURRENT> 21,623,470
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<GROSS-EXPENSE> 1,891,517
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<PER-SHARE-NAV-BEGIN> 11.28
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<PER-SHARE-DIVIDEND> 0.00
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<PER-SHARE-NAV-END> 11.71
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors of Scudder New Asia Fund, Inc.:
In planning and performing our audit of the financial statements and financial
highlights (hereinafter referred to as "financial statements") of Scudder New
Asia Fund, Inc. for the year ended December 31, 1998, we considered its internal
control, including control activities for safeguarding securities, in order to
determine our auditing procedures for the purpose of expressing our opinion on
the financial statements and to comply with the requirements of Form N-SAR, not
to provide assurance on internal control.
The management of Scudder New Asia Fund, Inc. is responsible for establishing
and maintaining internal control. In fulfilling this responsibility, estimates
and judgments by management are required to assess the expected benefits and
related costs of controls. Generally, controls that are relevant to an audit
pertain to the entity's objective of preparing financial statements for external
purposes that are fairly presented in conformity with generally accepted
accounting principles. Those controls include the safeguarding of assets against
unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, error or fraud may occur
and not be detected. Also, projection of any evaluation of internal control to
future periods is subject to the risk that it may become inadequate because of
changes in conditions or that the effectiveness of the design and operation may
deteriorate.
Our consideration of internal control would not necessarily disclose all matters
in internal control that might be material weaknesses under standards
established by the American Institute of Certified Public Accountants. A
material weakness is a condition in which the design or operation of one or more
of the internal control components does not reduce to a relatively low level the
risk that misstatements caused by error or fraud in amounts that would be
material in relation to the financial statements being audited may occur and not
be detected within a timely period by employees in the normal course of
performing their assigned functions. However, we noted no matters involving
internal control and its operation, including controls for safeguarding
securities, that we consider to be material weaknesses as defined above as of
December 31, 1998.
This report is intended solely for the information and use of management, the
Board of Directors of Scudder New Asia Fund, Inc. and the Securities and
Exchange Commission.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
February 17, 1999
INVESTMENT ADVISORY, MANAGEMENT AND
ADMINISTRATION AGREEMENT
AGREEMENT, dated and effective as of September 7, 1998 between
SCUDDER NEW ASIA FUND, INC., a Maryland corporation (herein referred to as the
"Fund"), and SCUDDER KEMPER INVESTMENTS, INC., a Delaware corporation (herein
referred to as the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is agreed by
the parties as follows:
1. The Manager hereby undertakes and agrees, upon the terms
and conditions herein set forth, (i) to make investment decisions for the Fund,
to prepare and make available to the Fund research and statistical data in
connection therewith and to supervise the acquisition and disposition of
securities by the Fund, including the selection of brokers or dealers to carry
out the transactions, all in accordance with the Fund's investment objective and
policies and in accordance with guidelines and directions from the Fund's Board
of Directors; (ii) to assist the Fund as it may reasonably request in the
conduct of the Fund's business, subject to the direction and control of the
Fund's Board of Directors; (iii) to maintain or cause to be maintained for the
Fund all books, records, reports and any other information required under the
Investment Company Act of 1940, as amended (the "1940 Act"), to the extent that
such books, records and reports and other information are not maintained or
furnished by the custodian or other agents of the Fund; (iv) to furnish at the
Manager's expense for the use of the Fund such office space and facilities as
the Fund may require for its reasonable needs in the City of New York and to
furnish at the Manager's expense clerical services in the United States related
to research, statistical and investment work; (v) to render to the Fund
administrative services such as preparing reports to and meeting materials for
the Fund's Board of Directors and reports and notices to stockholders, preparing
and making filings with the Securities and Exchange Commission (the "SEC") and
other regulatory and self-regulatory organizations, including preliminary and
definitive proxy materials and post-effective amendments to the Fund's
registration statement on Form N-2 under the Securities Act of 1933, as amended,
and 1940 Act, as amended from time to time, providing assistance in certain
accounting and tax matters and investor and public relations, monitoring the
valuation of portfolio securities, assisting in the calculation of net asset
value and calculation and payment of distributions to stockholders, and
overseeing arrangements with the Fund's custodian, including the maintenance of
books and records of the Fund; and (vi) to pay the reasonable salaries, fees and
expenses of such of the Fund's officers and employees (including the Fund's
shares of payroll taxes) and any fees and expenses of such of the Fund's
directors as are directors, officers or employees of the Manager; provided,
however, that the Fund, and not the Manager, shall bear travel expenses (or an
appropriate portion thereof) of directors and officers of the Fund who are
directors, officers or employees of the Manager to the extent that such expenses
relate to attendance at meetings of the Board of Directors of the Fund or any
committees thereof or advisers thereto. The Manager shall bear all expenses
arising out of its duties hereunder but shall not be responsible for any
expenses of the Fund other than those specifically allocated to the Manager in
this paragraph 1. In particular, but without limiting the generality of the
foregoing, the Manager shall not be responsible, except to the extent of the
reasonable compensation of such of the Fund's employees as are
<PAGE>
directors, officers or employees of the Manager whose services may be involved,
for the following expenses of the Fund: organization and certain offering
expenses of the Fund (including out-of-pocket expenses, but not including
overhead or employee costs of the Manager or of any one or more organizations
retained as an advisor or consultant to the Fund); fees payable to the Manager
and to any advisor or consultants, including an advisory board, if applicable;
legal expenses; auditing and accounting expenses; telephone, telex, facsimile,
postage and other communication expenses; taxes and governmental fees; stock
exchange listing fees; fees, dues and expenses incurred by the Fund in
connection with membership in investment company trade organizations; fees and
expenses of the Fund's custodians, subcustodians, transfer agents and
registrars; payment for portfolio pricing or valuation services to pricing
agents, accountants, bankers and other specialists, if any; expenses of
preparing share certificates and other expenses in connection with the issuance,
offering, distribution, sale or underwriting of securities issued by the Fund;
expenses of registering or qualifying securities of the Fund for sale; expenses
relating to investor and public relations; freight, insurance and other charges
in connection with the shipment of the Fund's portfolio securities; brokerage
commissions or other costs of acquiring or disposing of any portfolio securities
of the Fund; expenses of preparing and distributing reports, notices and
dividends to stockholders; costs of stationery; costs of stockholders' and other
meetings; litigation expenses; or expenses relating to the Fund's dividend
reinvestment and cash purchase plan (except for brokerage expenses paid by
participants in such plan).
2. As exclusive licensee of the rights to use and sublicense
the use of the "Scudder," "Scudder Kemper Investments, Inc." and "Scudder,
Stevens & Clark, Inc." trademarks (together, the "Scudder Marks"), the Manager
hereby grants the Fund a nonexclusive right and sublicense to use (i) the
"Scudder" name and mark as part of the Fund's name (the "Fund Name"), and (ii)
the Scudder Marks in connection with the Fund's investment products and
services, in each case only for so long as this Agreement, any other investment
management agreement between the Fund and the Manager (or any organization which
shall have succeeded to the Manager's business as investment manager (the
"Manager's Successor")), or any extension, renewal or amendment hereof or
thereof remains in effect, and only for so long as the Manager is a licensee of
the Scudder Marks, provided, however, that the Manager agrees to use its best
efforts to maintain its license to use and sublicense the Scudder Marks. The
Fund agrees that it shall have no right to sublicense or assign rights to use
the Scudder Marks, shall acquire no interest in the Scudder Marks other than the
rights granted herein, that all of the Fund's uses of the Scudder Marks shall
inure to the benefit of Scudder Trust Company as owner and licensor of the
Scudder Marks (the "Trademark Owner"), and that the Fund shall not challenge the
validity of the Scudder Marks or the Trademark Owner's ownership thereof. The
Fund further agrees that all services and products it offers in connection with
the Scudder Marks shall meet commercially reasonable standards of quality, as
may be determined by the Manager or the Trademark Owner from time to time,
provided that the Manager acknowledges that the services and products the Fund
rendered during the one-year period preceding the date of this Agreement are
acceptable. At your reasonable request, the Fund shall cooperate with the
Manager and the Trademark Owner and shall execute and deliver any and all
documents necessary to maintain and protect (including but not limited to in
connection with any trademark infringement action) the Scudder Marks and/or
enter the Fund as a registered user thereof. At such time as this Agreement or
any other investment management agreement shall no longer be in effect
2
<PAGE>
between the Manager (or the Manager's Successor) and the Fund, or the Manager no
longer is a licensee of the Scudder Marks, the Fund shall (to the extent that,
and as soon as, it lawfully can) cease to use the Fund Name or any other name
indicating that it is advised by, managed by or otherwise connected with the
Manager (Manager's Successor) or the Trademark Owner. In no event shall the Fund
use the Scudder Marks or any other name or mark confusingly similar thereto
(including, but not limited to, any name or mark that includes the name
"Scudder") if this Agreement or any other investment advisory agreement between
the Manager (or the Manager's Successor) and the Fund is terminated.
3. The Fund agrees to pay to the Manager in United States
dollars, as full compensation for the services to be rendered and expenses to be
borne by the Manager hereunder, a monthly fee which, on an annual basis, is
equal to 1.25% per annum of the value of the Fund's average weekly net assets up
to and including $75 million; 1.15% per annum of the value of the Fund's average
weekly net assets on the next $125 million of assets; and 1.10% per annum of the
value of the Fund's average weekly net assets in excess of $200 million. Each
payment of a monthly fee to the Manager shall be made within the ten days next
following the day as of which such payment is so computed. Upon any termination
of this Agreement before the end of a month, the fee for such part of that month
shall be prorated according to the proportion that such period bears to the full
monthly period and shall be payable upon the date of termination of this
Agreement.
The value of the net assets of the Fund shall be determined
pursuant to the applicable provisions of the Articles of Incorporation and
By-laws of the Fund, as amended from time to time.
4. The Manager agrees that it will not make a short sale of
any capital stock of the Fund or purchase any share of the capital stock of the
Fund otherwise than for investment.
5. In executing transactions for the Fund and selecting
brokers or dealers, the Manager shall use its best efforts to seek the best
overall terms available. In assessing the best overall terms available for any
Fund transaction, the Manager shall consider on a continuing basis all factors
it deems relevant, including, but not limited to, breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of any commission for
the specific transaction. In selecting brokers or dealers to execute a
particular transaction and in evaluating the best overall terms available, the
Manager may consider the brokerage and research services (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934) provided to the
Fund and/or other accounts over which the Manager or an affiliate exercises
investment discretion.
6. Nothing herein shall be construed as prohibiting the
Manager from providing investment advisory services to, or entering into
investment advisory agreements with, other clients (including other registered
investment companies), including clients which may invest in securities of Asian
issuers, or from utilizing (in providing such services) information furnished to
the Manager by advisors and consultants to the Fund and others; nor shall
anything herein be construed as constituting the Manager as an agent of the
Fund.
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Whenever the Fund and one or more other accounts or investment
companies advised by the Manager have available funds for investment,
investments suitable and appropriate for each shall be allocated in accordance
with procedures believed by the Manager to be equitable to each entity.
Similarly, opportunities to sell securities shall be allocated in a manner
believed by the Manager to be equitable. The Fund recognizes that in some cases
this procedure may adversely affect the size of the position that may be
acquired or disposed of for the Fund. In addition, the Fund acknowledges that
the persons employed by the Manager to assist in the performance of the
Manager's duties hereunder will not devote their full time to such service and
nothing contained herein shall be deemed to limit or restrict the right of the
Manager or any affiliate of the Manager to engage in and devote time and
attention to other businesses or to render services of whatever kind or nature.
7. The Manager may rely on information reasonably believed by
it to be accurate and reliable. Neither the Manager nor its officers, directors,
employees or agents shall be subject to any liability for any act or omission,
error of judgment or mistake of law, or for any loss suffered by the Fund, in
the course of, connected with or arising out of any services to be rendered
hereunder, except by reason of willful misfeasance, bad faith, or gross
negligence on the part of the Manager in the performance of its duties or by
reason of reckless disregard on the part of the Manager of its obligations and
duties under this Agreement. Any person, even though also employed by the
Manager, who may be or become an employee of the Fund and paid by the Fund shall
be deemed, when acting within the scope of his employment by the Fund, to be
acting in such employment solely for the Fund and not as an employee or agent of
the Manager.
8. This Agreement shall remain in effect for an initial term
ending on September 30, 1999, and shall continue in effect thereafter, but only
so long as such continuance is specifically approved at least annually by the
affirmative vote of (i) a majority of the members of the Fund's Board of
Directors who are not parties to this Agreement or interested persons of any
party to this Agreement, or of any entity regularly furnishing investment
advisory services with respect to the Fund pursuant to an agreement with any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval, and (ii) a majority of the Fund's Board of Directors or
the holders of a majority of the outstanding voting securities of the Fund. This
Agreement may nevertheless be terminated at any time without penalty, on 60
days' written notice, by the Fund's Board of Directors, by vote of holders of a
majority of the outstanding voting securities of the Fund, or by the Manager.
This Agreement shall automatically be terminated in the event
of its assignment, provided that an assignment to a corporate successor to all
or substantially all of the Manager's business or to a wholly-owned subsidiary
of such corporate successor which does not result in a change of actual control
or management of the Manager's business shall not be deemed to be an assignment
for the purposes of this Agreement. Any notice to the Fund or the Manager shall
be deemed given when received by the addressee.
9. This Agreement may not be transferred, assigned, sold or in
any manner hypothecated or pledged by either party hereto, except as permitted
under the 1940 Act or rules and regulations adopted thereunder. It may be
amended by mutual agreement, but only after authorization of such amendment by
the affirmative vote of (i) the holders of a majority of the outstanding voting
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securities of the Fund, and (ii) a majority of the members of the Fund's Board
of Directors who are not parties to this Agreement or interested persons of any
party to this Agreement, or of any entity regularly furnishing investment
advisory services with respect to the Fund pursuant to an agreement with any
party to this Agreement, cast in person at a meeting called for the purpose of
voting on such approval.
10. This Agreement shall be construed in accordance with the
laws of the State of New York, without giving effect to the conflicts of laws
principles thereof, provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act. As used herein, the terms "interested
person," "assignment," and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act.
11. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, and it shall not
be necessary in making proof of this Agreement to produce or account for more
than one such counterpart.
12. This Agreement supersedes all prior investment advisory,
management, and/or administration agreements in effect between the Fund and the
Manager.
IN WITNESS WHEREOF, the parties have executed this Agreement
by their officers thereunto duly authorized as of the day and year first written
above.
SCUDDER NEW ASIA FUND, INC.
By: _________________________
President
SCUDDER KEMPER INVESTMENTS, INC.
By: _________________________
Managing Director
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