<PAGE>
THE
IRISH
INVESTMENT FUND
Semi-Annual Report
For the Six Months Ended April 30, 1996
<PAGE>
Chairman's Letter
-----------------
Dear Stockholder,
The Irish Equity market rose by 8.1%, in Irish Pound terms, during the
quarter ended April 30, 1996. After adjusting for the strength of the U.S.
Dollar, the market gain converted to an increase of 7.7% in U.S. Dollar terms.
The Irish Investment Fund, Inc.'s (the "Fund") net asset value ("NAV") increased
to $15.31 at the end of April 1996 from $13.88 at the end of January, a very
satisfactory rise of 10.3% per share over the period.
ECONOMIC ENVIRONMENT
The Irish economy continues to register strong growth with year to date
data supporting the Irish Central Bank's forecast of 5.25% expansion in Gross
National Product ("GNP") in 1996. This follows an increase in GNP of
approximately 7.0% in 1995, following a growth rate of 7.4% in 1994.
Domestic consumer demand remains buoyant with retail sales volumes
increasing by 5.4% in January and 5.1% in February 1996. New car sales are
particularly strong, with industry estimates of a 32.3% increase in the first
three months of 1996 versus year earlier levels. The strength in domestic demand
has been reflected in private sector credit growth of approximately 11% in the
first three months of 1996 as compared to the same period in the previous year.
Although the Central Bank of Ireland has shown some concern at this growth in
credit, it has not deemed it necessary to raise interest rates at the present
time.
Ample availability of credit, rising real incomes, employment creation, low
interest rates, and positive demographics have predictably resulted in house
price inflation. In the final quarter of 1995, second-hand house prices
increased by 13.4% over 1994 levels. Anecdotal evidence suggests that the rise
in house prices has continued into 1996, particularly in the greater Dublin
area. However, the overall inflation picture continues to be satisfactory with
consumer price inflation having dropped to 2.0% for the quarter ended
mid-February 1996, down from 2.4% for the previous quarter. This compares
favorably with the European Union average of 2.8%.
Despite strong employment gains in manufacturing and construction, the
official unemployment rate remains stubbornly high, at 12.9% at March 1996. In
part, one can explain this through the increasing number of people available for
employment in the country as a result of the return of former Irish emigrants.
POLITICAL ENVIRONMENT
The Northern Ireland peace process is approaching the critical stage of
all-party negotiations. Elections to the negotiating body took place on May 30,
1996 and all-party talks are expected to commence on June 10, 1996.
STOCK MARKET REVIEW
As mentioned previously, the Irish Equity market performed strongly over
the quarter ended April 30, 1996, registering a gain of 8.1%. A comparison with
major international markets is shown below:
Local
Currency U.S. $
-------- ------
U.S. Equities 2.8% 2.8%
U.K. Equities 3.9% 3.2%
Japanese Equities 5.9% 8.1%
Irish Equities 8.1% 7.7%
The key feature of the quarter under review was the release of a series of
company 1995 results. In aggregate, these matched or exceeded expectations. The
dividend outcome was particularly encouraging with 1995 dividends being almost
18.0% higher than 1994, and analysts are forecasting a further increase in
dividends of 13.0% in 1996. The following table illustrates the strength of
certain Irish company results.
<TABLE>
<CAPTION>
% Change in % Dividend
Earnings per Increase
Company Industry Share 1995 1995
------- -------- ---------- ----
<S> <C> <C> <C>
Smurfit (Jefferson) Group Paper & Packaging +253.3% +48.5%
CRH Building Materials + 34.8% + 9.3%
Allied Irish Bank Banking + 12.5% +17.5%
Waterford Wedgewood Consumer Goods + 16.9% +40.0%
</TABLE>
Following many quarters of outperformance by financial stocks, Irish
industrial stocks received a broad-based re-rating during the quarter under
review. CRH was among the strongest performers with its share price increasing
by 19.8% during the quarter. The company announced the acquisition of Parson, a
U.S.-based building materials group, for $87.0 million at an attractive price of
5.8 times historic operating profits.
Smurfit (Jefferson) Group's share price increased by 14.7% following a
recent lengthy period of underperformance. As is typical of cyclical paper
stocks, Smurfit's positive share price performance comes during a period of
falling paper product prices and reduced earnings estimates. The company
delivered record earnings in 1995, yet analysts expect profits to decrease by
approximately 40% in 1996.
Smaller market capitalization stocks were among the best performing stocks
over the quarter with Abbey (+22.2%), Green Property (+32.7%), and Boxmore
International (+30.4%) offering evidence that value exists in better-quality,
smaller Irish companies. During the quarter, the Fund purchased a position in
Powerscreen International, a Northern Ireland-based world-class manufacturer of
screening and crushing equipment for mining/ construction industries.
CURRENT OUTLOOK
The Irish economy entered 1996 with considerable momentum and looks set to
deliver its third successive GNP growth rate in excess of 5.0% - a unique
performance in recent Irish economic history or indeed within the European
Union. The stock market remains reasonably priced at 12.0 times 1996 forecast
earnings, and with a dividend yield of 3.2%. It is the Fund's present strategy
to maintain a fully invested position.
Sincerely,
/s/ Peter Hooper
Peter Hooper
Chairman of the Board of Directors
June 3, 1996
<PAGE>
Statement of Net Assets (unaudited)
-----------------------------------
April 30, 1996 Shares Value (Note A)
- ----------------------------------------------------------------------------
IRISH COMMON STOCKS (91.3%)
- ----------------------------------------------------------------------------
Abbey 745,000 U.S.$ 1,914,433
Allied Irish Bank 1,917,688 10,005,131
Anglo Irish Bank Corporation 1,405,720 1,368,292
Barlo Group 1,000,356 482,966
Boxmore International 234,000 1,938,776
Clondalkin Group 298,850 2,071,158
Crean (James) 347,625 1,288,511
CRH 1,048,036 9,466,822
FBD Holdings 260,000 769,355
Fyffes 1,635,000 2,750,056
Green Property 825,000 3,019,408
Greencore 442,568 2,129,799
Hibernian Group 300,000 1,168,050
Independent Newspapers 155,000 1,291,474
Irish Life 700,000 2,714,547
I.W.P., International 194,943 1,426,939
Jury's Hotel Group 991,792 3,861,541
Kerry Group, Series A 465,000 4,272,726
Smurfit (Jefferson) Group 3,355,840 8,937,116
Unidare 150,000 619,066
United Drug 350,000 1,673,426
Waterford Foods, Class A 1,644,156 2,560,608
Waterford Wedgewood 3,565,739 3,998,362
*+Yeoman International Holdings 982 267,639
TOTAL IRISH COMMON STOCKS
(Cost U.S. $52,229,303) 69,996,201
- ----------------------------------------------------------------------------
UNITED KINGDOM COMMON STOCKS (5.6%)
- ----------------------------------------------------------------------------
Northern Ireland Electricity 400,000 2,708,099
Powerscreen International 230,000 1,574,458
TOTAL UNITED KINGDOM COMMON STOCKS
(Cost U.S. $4,198,623) 4,282,557
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS BEFORE FOREIGN CURRENCY ON DEPOSIT
- ----------------------------------------------------------------------------
(Cost U.S. $56,427,926#) 74,278,758
<PAGE>
Statement of Net Assets (unaudited)(continued)
---------------------------------------------
April 30, 1996 Shares Value (Note A)
- ----------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT (0.9%)
- ----------------------------------------------------------------------------
(Interest Bearing)
British Pound Sterling (Pds) 45,308 U.S.$ 68,166
Irish Pound IR(Pds) 414,793 645,998
TOTAL FOREIGN CURRENCY ON DEPOSIT
(Cost U.S. $716,909) 714,164
- ----------------------------------------------------------------------------
TOTAL INVESTMENTS (97.8%)
- ----------------------------------------------------------------------------
(Cost U.S. $57,144,835) 74,992,922
- ----------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (2.2%)
- ----------------------------------------------------------------------------
Cash 502,167
Dividends and Interest Receivable 898,393
Net Unrealized Appreciation of Forward Foreign Currency
Contracts (Note A) 382,226
Prepaid Expenses 56,453
Principal Investment Advisory Fee Payable (Note B) (46,416)
Co-Advisory Fee Payable (Note B) (15,472)
Accrued Directors' Fees and Expenses (Note C) (13,558)
Administration Fee Payable (Note B) (12,378)
Other Liabilities (70,227)
----------
1,681,188
- ----------------------------------------------------------------------------
NET ASSETS (100.0%)
- ----------------------------------------------------------------------------
Applicable to 5,009,000 outstanding
U.S. $.01 par value shares
(authorized 20,000,000 shares) U.S.$76,674,110
- ----------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- ----------------------------------------------------------------------------
(U.S. $76,674,110 / 5,009,000) U.S.$ 15.31
=====
- ----------------------------------------------------------------------------
#Aggregate cost for Federal tax purposes.
*Non-income producing security.
+Private placement security (Note G).
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACTS
FORWARD FOREIGN CURRENCY CONTRACTS TO SELL
Contracts to Deliver
------------------------------------------------ Unrealized
Expiration Local In Exchange Value in Appreciation/
Date Currency For U.S. $ U.S. $ (Depreciation)
---------- ----------------------- ----------- ---------- -------------
06/28/1996 Irish Pound 12,500,000 19,865,000 19,481,602 $383,398
06/28/1996 Irish Pound 5,133,800 8,000,000 8,001,172
(1,172)
--------
Net Unrealized Appreciation of Forward Foreign Currency Contracts $382,226
========
<PAGE>
Statement of Net Assets (unaudited)(continued)
---------------------------------------------
Value (Note A)
- ----------------------------------------------------------------------------
AT APRIL 30, 1996 NET ASSETS CONSISTED OF:
- ----------------------------------------------------------------------------
Common Stock, U.S. $.01 Par Value --
Authorized 20,000,000 Shares;
Issued and Outstanding 5,009,000 Shares U.S.$ 50,090
Capital Surplus 54,517,462
Undistributed Net Investment Income 542,162
Accumulated Net Realized Gain 3,344,926
Unrealized Appreciation of Securities, Forward
Foreign Curency Contracts, Foreign Currency
and Net Other Assets 18,219,470
- ----------------------------------------------------------------------------
TOTAL NET ASSETS U.S.$76,674,110
- ----------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
Statement of Operations
-----------------------
For the Six Months Ended
April 30, 1996 (unaudited)
- ----------------------------------------------------------------------------
INVESTMENT INCOME
- ----------------------------------------------------------------------------
Dividends (Net of Withholding Taxes of U.S. $18,323) U.S.$1,230,616
Interest 50,899
- ----------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 1,281,515
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
EXPENSES
- ----------------------------------------------------------------------------
Principal Investment Advisory Fee
(Note B) U.S.$ 265,091
Co-Advisory Fee (Note B) 88,370
Administration Fee (Note B) 71,069
Shareholder Reports Expense 53,645
Directors' Fees and Expenses (Note C) 39,452
Custodian Fees (Note B) 31,907
Legal and Audit Fees 12,092
Other 37,499
- ----------------------------------------------------------------------------
TOTAL EXPENSES 599,125
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
NET INVESTMENT INCOME 682,390
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTE D)
- ----------------------------------------------------------------------------
Realized Gain/(Loss) on:
Securities Transactions 3,363,667
Forward Foreign Currency Contracts 623
Foreign Currencies Transactions (15,873)
--------
Net Realized Gain on Investments
During the Period 3,348,417
Net Change in Unrealized Appreciation/
(Depreciation) of:
Securities 5,447,466
Forward Foreign Currency Contracts 382,226
Foreign Currency and Net Other Assets (19,691)
--------
Net Unrealized Appreciation of Investments
During the Period 5,810,001
---------
- ----------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 9,158,418
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS U.S.$9,840,808
- ----------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
Statement of Changes in Net Assets
----------------------------------
Six Months Ended
April 30, 1996 Year Ended
(unaudited) October 31, 1995
Net Investment Income U.S.$ 682,390 U.S.$ 568,636
Net Realized Gain on Investments 3,348,417 5,610,350
Net Unrealized Appreciation
of Investments 5,810,001 7,748,142
---------- ----------
Net Increase in Net Assets
Resulting from Operations 9,840,808 13,927,128
Distributions to Shareholders
from:
Net Investment Income (706,269) (525,945)
Net Realized Gains (646,161) --
---------- ----------
Net Increase in Net Assets 8,488,378 13,401,183
- ----------------------------------------------------------------------------
NET ASSETS
- ----------------------------------------------------------------------------
Beginning of Period 68,185,732 54,784,549
----------- -----------
End of Period (Including
Undistributed Net Investment
Income of $542,162 and $566,041
at April 30, 1996 and October
31, 1995, respectively) U.S.$76,674,110 U.S.$68,185,732
=========== ===========
See Notes to Financial Statements.
<PAGE>
<TABLE>
<CAPTION>
Financial Highlights
--------------------
For a Fund share outstanding throughout each period.
Six Months Ended Year Ended October 31,
April 30, 1996 -----------------------------------------------------------------------------
(Unaudited) 1995 1994 1993 1992 1991 1990*
<S> <C> <C> <C> <C> <C> <C> <C>
Operating Performance:
Net Asset Value,
Beginning of Period U.S.$13.61 U.S.$10.94 U.S.$ 9.54 U.S.$ 7.99 U.S.$ 9.75 U.S.$10.04 U.S.$11.16
------ ------ ------ ------ ------ ------ ------
Net Investment Income 0.14 0.11 0.10 0.12 0.15 0.15 0.26
Net Realized and Unrealized Gain/
(Loss) on Investments 1.83 2.67 1.37 1.66 (1.49) (0.11) (1.13)
------ ------ ------ ------ ------ ------ ------
Net Increase/(Decrease) in Net
Assets Resulting
from Investment Operations 1.97 2.78 1.47 1.78 (1.34) 0.04 (0.87)
Offering Costs -- -- -- -- -- -- (0.25)
Distributions:
Distributions to Shareholders
from:
Net Investment Income (0.14) (0.11)++ (0.07) (0.12) (0.23) (0.33) --
Net Realized Gains (0.13) -- -- -- -- -- --
Capital Surplus -- -- -- (0.11) (0.19) -- --
------ ------ ------ ------ ------ ------ ------
(0.27) (0.11) (0.07) (0.23) (0.42) (0.33) 0.00
Total from Distributions
------ ------ ------ ------ ------ ------ ------
Net Asset Value,
End of Period U.S.$15.31 U.S.$13.61 U.S.$10.94 U.S.$ 9.54 U.S.$ 7.99 U.S.$ 9.75 U.S.$10.04
====== ====== ====== ====== ====== ====== ======
Share Price, End of Period U.S.$12.88 U.S.$11.25 U.S.$10.13 U.S.$ 8.75 U.S.$ 7.00 U.S.$ 7.88 U.S.$ 7.00
====== ====== ====== ====== ====== ====== ======
Total Investment Return** 16.91% 12.46% 16.59% 29.34% (6.35)% 18.07% (41.67)%
====== ====== ====== ====== ====== ====== =======
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
- ----------------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000's) U.S.$76,674 U.S.$68,186 U.S.$54,785 U.S.$47,806 U.S.$40,018 U.S.$48,847 U.S.$50,299
Ratio of Net Investment Income
to Average Net Assets 1.92%+ 0.94% 0.93% 1.39% 1.62% 1.55% 4.28%+
Ratio of Operating Expenses to
Average Net Assets 1.69%+ 1.74% 1.87% 1.88% 1.80% 2.03% 1.70%+
Portfolio Turnover Rate 7% 21% 13% 15% 7% 28% 6%
Average Commission Rate
(Per Share of
Security)# U.S.$0.0100 N/A N/A N/A N/A N/A N/A
<FN>
*The Fund commenced operations on March 29, 1990.
**Based on share price and reinvestment of income distributions.
+Annualized.
++Rounded.
#Average commission rate (per share of security) as required by amended disclosure requirements effective September 1, 1995.
</TABLE>
See Notes to Financial Statements.
<PAGE>
Notes to Financial Statements (unaudited)
-----------------------------------------
The Irish Investment Fund, Inc. (the "Fund") was incorporated under the laws
of the State of Maryland on December 14, 1989 as a non-diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended.
A. SIGNIFICANT ACCOUNTING POLICIES:
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates. The following is a
summary of significant accounting policies consistently followed by the Fund in
the preparation of its financial statements.
SECURITY VALUATION: Securities listed on a stock exchange for which market
quotations are readily available are valued at the closing prices on the date of
valuation, or if no such closing prices are available, at the last bid price
quoted on such day. If there are no such quotations available for the date of
valuation, the last available closing price will be used. The value of
securities and other assets for which no market quotations are readily available
is determined in good faith at fair value using estimation methods approved by
the Board of Directors. Short-term securities that mature in 60 days or less are
valued at amortized cost.
DIVIDENDS AND DISTRIBUTIONS TO STOCKHOLDERS: The Fund intends to distribute
to stockholders, at least annually, substantially all of its net income from
dividends and interest payments and substantially all of its net realized
capital gains, if any. Income distributions and capital gain distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities held
by the Fund, timing differences and differing characterization of distributions
made by the Fund.
U.S. FEDERAL INCOME TAXES: It is the Fund's intention to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended, and distribute all of its taxable income.
Accordingly, no provision for U.S. Federal income taxes is required.
REPURCHASE AGREEMENTS: The Fund may enter into repurchase agreements.
Securities pledged as collateral for repurchase agreements are held by the
Fund's custodian bank until maturity of the repurchase agreements. Provisions of
the agreements require that the market value of the collateral be sufficient in
the event of default; however, in the event of default or bankruptcy by the
other party to the agreement, realization and/or retention of the collateral may
be subject to legal proceedings.
CURRENCY TRANSLATION: The books and records of the Fund are maintained in
U.S. Dollars. Foreign currency amounts are translated into U.S. Dollars at the
bid price of such currencies against U.S. Dollars last quoted by a major bank as
follows: assets and liabilities at the closing rates of exchange on the
valuation date; security transactions and investment income and expenses at the
closing rates of exchange on the dates of such transactions. Net realized
foreign currency gains and losses resulting from changes in exchange rates
include foreign currency gains and losses between trade date and settlement date
on investment securities transactions, foreign currency transactions and the
difference between the amounts of interest and dividends recorded on the books
of the Fund and the amount actually received. The portion of foreign currency
gains and losses related to fluctuation in exchange rates between the initial
purchase trade date and subsequent sale trade date is included in realized gains
and losses on security transactions.
FORWARD FOREIGN CURRENCY CONTRACTS: The Fund may enter into forward foreign
currency contracts for non-trading purposes in order to protect investment
securities and related receivables and payables against future changes in
foreign currency exchange rates. Fluctuations in the value of such contracts are
recorded as unrealized gains or losses; realized gains or losses include net
gains or losses on contracts which have terminated by settlements or by entering
into offsetting commitments. Risks associated with such contracts include
movement in the value of the foreign currency relative to the U.S. Dollar and
the ability of the counterparty to perform.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities sold
are recorded on the identified cost basis. Dividend income is recorded on the
ex-dividend date except that certain dividends from foreign securities are
recorded as soon as the Fund is informed of the ex-dividend date.
Interest income is recorded on the accrual basis.
B. MANAGEMENT SERVICES:
The Fund has entered into an investment advisory agreement (the "Principal
Investment Advisory Agreement") with Bank of Ireland Asset Management (U.S.)
Limited ("Bank of Ireland Asset Management"), an indirect wholly-owned
subsidiary of The Governor and Company of the Bank of Ireland ("Bank of
Ireland"). Under the Principal Investment Advisory Agreement, the Fund pays a
monthly fee at an annual rate of 0.75% of the value of its average weekly net
assets.
The Fund has also entered into an investment advisory agreement (the "U.S.
Co-Advisory Agreement") with Salomon Brothers Asset Management Inc ("Salomon
Brothers Asset Management"). Under the U.S. Co-Advisory Agreement, the Fund pays
a monthly fee at an annual rate of 0.25% of the value of its average weekly net
assets.
The Fund has entered into an administration agreement (the "Administration
Agreement") with First Data Investor Services Group, Inc. (formerly The
Shareholder Services Group, Inc.), a subsidiary of First Data Corporation. Under
the Administration Agreement, the Fund pays a monthly fee at an annual rate of
0.20% of the value of its average monthly net assets.
The First National Bank of Boston serves as custodian of the Fund's assets
held outside of Ireland. Bank of Ireland serves as custodian of the Fund's
assets held in Ireland. During the six months ended April 30, 1996, the Fund
paid U.S. $29,476 in custodial fees to Bank of Ireland.
For the six months ended April 30, 1996, the Fund incurred total brokerage
commission of $22,501, of which $8,374 was paid to Davy Stock Brokers, an
affiliate of Bank of Ireland Asset Management.
C. DIRECTORS FEES:
The Fund currently pays each Director who is not a managing director,
officer or employee of Bank of Ireland Asset Management or Salomon Brothers
Asset Management or any affiliate thereof, an annual retainer of U.S. $7,000,
plus U.S. $700 for each meeting of the Board of Directors or Committee of the
Board attended in person or via telephone and any Stockholder Meeting attended
in person not held on the same day as a meeting of the Board. The Fund pays the
Chairman of the Board of Directors of the Fund U.S. $3,500 annually in addition
to the amount he may receive as detailed above. Each Director will be reimbursed
for travel and out-of-pocket expenses.
D. PURCHASES AND SALES OF SECURITIES:
The cost of purchases and proceeds from sales of securities for the six
months ended April 30, 1996, excluding U.S. government and short-term
investments, aggregated U.S. $5,689,882 and U.S. $5,012,463, respectively.
At April 30, 1996, aggregate gross unrealized appreciation for all
securities (excluding foreign currency on deposit) in which there is an excess
value over tax cost was U.S. $20,776,994 and aggregate gross unrealized
depreciation for all securities (excluding foreign currency on deposit) in which
there is an excess of tax cost over value was U.S. $2,926,162.
E. COMMON STOCK:
On December 14, 1989, 9,000 shares of the Fund's common stock were issued to
Bank of Ireland Asset Management. On March 30, 1990, in conjunction with its
initial underwriting, 5,000,000 shares of common stock were issued. Costs
incurred in the initial offering of shares aggregated U.S. $1,231,000 and were
charged to capital upon commencement of operations. No subsequent shares have
been issued since the initial underwriting.
F. CONCENTRATION OF CREDIT:
Because the Fund concentrates its investments in securities issued by
corporations in Ireland, its portfolio may be subject to special risks and
considerations not typically associated with investing in a broader range of
domestic securities. In addition, the Fund is more susceptible to factors
adversely affecting the Irish economy than a comparable fund not concentrated in
these issuers to the same extent.
G. PRIVATE PLACEMENT SECURITY:
The following security listed below is a private placement issue with a
limited market available through the issuer:
<TABLE>
<CAPTION>
Acquisition Value 4/30/96 % of
Security Date Cost Per Unit Fair Value Net Assets
-------- ----------- ---- -------- ---------- ----------
Yeoman
International
<S> <C> <C> <C> <C> <C>
Holdings ............ 1/4/96 U.S.$88,624 U.S.$272.54 U.S.$267,639 0.35%
</TABLE>
------------------------------------------------------------------------
In accordance with Section 23(c) of the Investment Company Act of 1940,
as amended, the Fund hereby gives notice that it may from time to time
repurchase shares of the Fund in the open market at the option of the
Board of Directors and upon such terms as the Directors shall determine.
------------------------------------------------------------------------
<PAGE>
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Net Increase/
Net Realized and (Decrease) in Net
Net Investment Unrealized Gain/(Loss) Assets Resulting
Income/(Loss) on Investments From Operations
-------------- ---------------------- ---------------
Quarter Ended Total Total Total
- ------------- (000) Per Share (000) Per Share (000) Per Share
----- --------- ----- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
January 31, 1994 U.S.$ 23 U.S.$0.00 U.S.$ 2,786 U.S.$0.56 U.S.$ 2,809 U.S.$0.56
April 30, 1994 241 0.05 2,170 0.44 2,411 0.49
July 31, 1994 74 0.02 (495) (0.10) (421) (0.08)
October 31, 1994 146 0.03 2,384 0.47 2,530 0.50
January 31, 1995 (38) (0.01) 386 0.08 348 0.07
April 30, 1995 423 0.09 5,354 1.07 5,777 1.16
July 31, 1995 (51) (0.01) 7,784 1.55 7,733 1.54
October 31, 1995 235 0.04 (166) (0.03) 69 0.01
January 31, 1996 69 0.02 15,054 3.01 15,123 3.03
April 30, 1996 613 0.12 (5,895) (1.18) (5,282) (1.06)
</TABLE>
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN (UNAUDITED)
The Fund will distribute to stockholders, at least annually, substantially
all of its net income from dividends and interest payments and expects to
distribute substantially all its net realized capital gains annually. Pursuant
to the Dividend Reinvestment and Cash Purchase Plan approved by the Fund's Board
of Directors (the "Plan"), each stockholder will be deemed to have elected,
unless American Stock Transfer & Trust Company (the "Plan Agent") is otherwise
instructed by the stockholder in writing, to have all distributions
automatically reinvested by the Plan Agent in Fund shares pursuant to the Plan.
Distributions with respect to Fund shares registered in the name of a
broker-dealer or other nominee (i.e., in "street name") will be reinvested by
the broker or nominee in additional Fund shares under the Plan, unless the
service is not provided by the broker or nominee or the stockholder elects to
receive distributions in cash. Investors who own Fund shares registered in
street name may not be able to transfer those shares to another broker-dealer
and continue to participate in the Plan. These stockholders should consult their
broker-dealer for details. Stockholders who do not participate in the Plan will
receive all distributions in cash paid by check in U.S. Dollars mailed directly
to the stockholder by American Stock Transfer & Trust Company, as paying agent.
Stockholders who do not wish to have distributions automatically reinvested
should notify the Fund, c/o the Plan Agent for The Irish Investment Fund, Inc.
The Plan Agent will serve as agent for the stockholders in administering the
Plan. If the Directors of the Fund declare an income dividend or a capital gains
distribution payable either in the Fund's Common Stock or in cash, as
stockholders may have elected, non-participants in the Plan will receive cash
and participants in the Plan will receive Common Stock, to be issued by the
Fund. If the market price per share on the valuation date equals or exceeds net
asset value per share on that date, the Fund will issue new shares to
participants at net asset value or, if the net asset value is less than 95% of
the market price on the valuation date, then at 95% of the market price. The
valuation date will be the dividend or distribution payment date or, if that
date is not a trading day on the New York Stock Exchange, Inc. ("New York Stock
Exchange"), the next preceding trading day. If net asset value exceeds the
market price of Fund shares at such time, participants in the Plan will be
deemed to have elected to receive shares of stock from the Fund, valued at
market price on the valuation date. If the Fund should declare a dividend or
capital gains distribution payable only in cash, the Plan Agent will, as agent
for the participants, buy Fund shares in the open market, on the New York Stock
Exchange or elsewhere, with the cash in respect of such dividend or
distribution, for the participants' account on, or shortly after, the payment
date.
Participants in the Plan have the option of making additional cash payments
to the Plan Agent, annually, in any amount from $100 to $3,000, for investment
in the Fund's Common Stock. The Plan Agent will use all funds received from
participants (as well as any dividends and capital gain distributions received
in cash) to purchase Fund shares in the open market on or about January 15 of
each year. Any voluntary cash payments received more than thirty days prior to
such date will be returned by the Plan Agent, and interest will not be paid on
any uninvested cash payments. To avoid unnecessary cash accumulations, and also
to allow ample time for receipt and processing by the Plan Agent, it is
suggested that the participants send in voluntary cash payments to be received
by the Plan Agent approximately ten days before January 15. A participant may
withdraw a voluntary cash payment by written notice, if the notice is received
by the Plan Agent not less than forty-eight hours before such payment is to be
invested.
The Plan Agent maintains all stockholder accounts in the Plan and furnishes
written confirmations of all transactions in the account, including information
needed by stockholders for personal and U.S. Federal tax records. Shares in the
account of each Plan participant will be held by the Plan Agent in
non-certificated form in the name of the participant, and each stockholder's
proxy will include those shares purchased pursuant to the Plan.
In the case of stockholders, such as banks, brokers or nominees, who hold
shares for others who are the beneficial owners, the Plan Agent will administer
the Plan on the basis of the number of shares certified from time to time by the
stockholder as representing the total amount registered in the stockholder's
name and held for the account of beneficial owners who are participating in the
Plan.
There is no charge to participants for reinvesting dividends or capital
gains distributions. The Plan Agent's fee for the handling of the reinvestment
of dividends and distributions will be paid by the Fund. However, each
participant's account will be charged a pro rata share of brokerage commissions
incurred with respect to the Plan Agent's open market purchases in connection
with the reinvestment of dividends or capital gains distributions. A participant
will also pay brokerage commissions incurred in purchases from voluntary cash
payments made by the participant. Brokerage charges for purchasing small amounts
of stock of individual accounts through the Plan are expected to be less than
the usual brokerage charges for such transactions, because the Plan Agent will
be purchasing stock for all participants in blocks and prorating the lower
commission thus attainable.
The automatic reinvestment of dividends and distributions will not relieve
participants of any U.S. Federal income tax which may be payable on such
dividends or distributions.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan as
applied to any voluntary cash payment made and any dividend or distribution paid
subsequent to notice of the change sent to all stockholders at least ninety days
before the record date for such dividend or distribution. The Plan also may be
amended or terminated by the Plan Agent with at least ninety days' written
notice to all stockholders. All correspondence concerning the Plan should be
directed to the Plan Agent for The Irish Investment Fund, Inc. in care of
American Stock Transfer & Trust Company, 40 Wall Street, New York, New York,
10005, telephone number (718) 921-8283.
<PAGE>
THE IRISH INVESTMENT FUND, INC.
------------------------- DIRECTORS AND OFFICERS -------------------------
Peter J. Hooper - Chairman of the Board
William P. Clark - Director
Gerald F. Colleary - Director
Denis P. Kelleher - Director
James M. Walton - Director
Richard H. Rose - President and Treasurer
Brigid O. Bieber - Secretary
Patricia L. Bickimer - Assistant Secretary
Scott C. Blair - Assistant Treasurer
---------------------- PRINCIPAL INVESTMENT ADVISOR ----------------------
Bank of Ireland Asset Management (U.S.) Limited
Two Greenwich Plaza
Greenwich, Connecticut 06830
----------------------------- U.S. CO-ADVISOR ----------------------------
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
------------------------------ ADMINISTRATOR -----------------------------
First Data Investor Services Group, Inc.
Exchange Place
Boston, Massachusetts 02109
------------------------------- CUSTODIANS -------------------------------
Bank of Ireland
Lower Baggot Street, Dublin 2, Ireland
The First National Bank of Boston
150 Royall Street
Canton, Massachusetts 02021
----------------------- STOCKHOLDER SERVICING AGENT ----------------------
American Stock Transfer & Trust Company
40 Wall Street
New York, New York 10005
------------------------------ LEGAL COUNSEL -----------------------------
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
------------------------- INDEPENDENT ACCOUNTANTS ------------------------
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
----------------------------- CORRESPONDENCE -----------------------------
ALL CORRESPONDENCE SHOULD BE ADDRESSED TO:
The Irish Investment Fund, Inc.
c/o First Data Investor Services Group, Inc.
Exchange Place -- BOS665
Boston, Massachusetts 02109
TELEPHONE INQUIRIES SHOULD BE DIRECTED TO:
1-800-GO-TO-IRL (1-800-468-6475)
