<PAGE>
[LOGO]
THE
IRISH
INVESTMENT FUND
Semi-Annual Report
For the Six Months Ended April 30, 1997
<PAGE>
Chairman's Letter
-----------------
Dear Stockholder,
The Irish equity market performed strongly during the quarter ended April
30, 1997, closing the period up 6.3% in Irish pound terms. After adjusting for
the strength of the U.S. dollar against the Irish pound, the return converted
into an increase of 0.3% in U.S. dollar terms. Over the same period, the Irish
Investment Fund's (the "Fund") net asset value per share increased to $16.79
from $16.61, an increase of 1.1% in U.S. dollar terms.
ECONOMIC ENVIRONMENT
The Irish Central Bank has estimated that the economy expanded by 6.0% in
1996. This marks the third year in succession of strong economic growth, yet
inflation in 1996 remained subdued at 1.6% for the year.
Recently published statistics indicate that 1997 is likely to be another
year of strong economic growth. Retail sales volumes increased by 7.1% in
January and by 4.3% in February over 1996 levels. In the first four months of
1997, automobile sales have increased by 4.7% compared with the corresponding
period last year, despite the strong 32.0% increase in the full year 1996. New
house registrations, which reflect the level of housing starts, increased by
32.0% indicating a high level of consumer confidence, as well as positive
demographic trends as new consumers enter the market.
Government finances continue to benefit from economic buoyancy with
underlying tax revenues increasing by 15.5% in the first four months of 1997.
While government spending continues to expand somewhat ahead of forecasts, the
target Exchequer Borrowing Requirement for 1997 of 1.6% of GNP appears to be
easily attainable.
The European Monetary Union will be the key influence on Irish financial
markets over the coming year. During April, the Irish pound weakened on
speculation that its exchange rate at time of entry to the European Monetary
Union would be lower than the levels it currently trades at against major
European currencies. In response to this weakness and in light of the strong
credit expansion and buoyant housing market, the Irish Central Bank increased
rates by 0.5% to 6.75% on May 1st.
POLITICAL ENVIRONMENT
The Irish general election will take place on June 6, 1997 and the current
three-party, centre-left coalition has decided to stand together for
re-election. The election is unlikely to result in any significant change to
Irish economic policy.
On the Northern Ireland front, the election of Tony Blair as the new
Prime Minister in the U.K. has given a badly needed impetus to the peace
process. As a result, there are growing hopes that a ceasefire will be put in
place by the IRA which in turn would allow a resumption of meaningful talks on
the future of the province's political environment.
STOCK MARKET REVIEW
As previously mentioned, the Irish equity market performed strongly over
the quarter ended April 30, 1997 registering a gain of 6.3%. A comparison with
major international markets is shown below:
Local
Currency U.S. $
-------- ------
U.S. Equities +1.9% +1.9%
U.K. Equities +2.3% +3.6%
Japanese Equities +4.5% -0.1%
Irish Equities +6.3% +0.3%
The key feature of the quarter under review was the release of a series of
company results for 1996. Once again, profits matched or exceeded expectations.
The following table illustrates the strong results of some Irish companies held
by the Fund.
% Change in % Dividend
Earnings per Increase
Company Industry Share 1996 1996
------- -------- ---------- ----
Allied Irish Bank Banking +12.3% +16.2%
CRH Building Materials +14.3% +12.1%
Kerry Group Food +15.7% +15.1%
Clondalkin Group Paper & Packaging +23.9% +10.0%
Financial stocks led the market higher during the quarter under review with
Allied Irish Bank (+7.4%) and Hibernian Group (+16.3%) posting strong gains,
following solid earnings reports. Smurfit (Jefferson) Group's share price
declined by 4.1% over the quarter as falling global paper prices resulted in
earnings for 1996 being 55% below 1995's record levels.
Smaller market capitalization stocks delivered strong returns over the
quarter with Jury's Hotel Group (+24.6%) and Green Property (+22.8%) benefiting
from buoyant economic conditions. During the quarter, the Fund purchased a
position in IONA Technologies, a Dublin-based software company listed recently
on the NASDAQ Exchange.
CURRENT OUTLOOK
The Irish Central Bank expects the economy to grow by 5.75% in 1997, which
will be the fourth successive year of growth in excess of 5.00%. The path
towards the European Monetary Union is likely to lead to volatility in Irish
financial markets over the coming year, yet Ireland remains well placed to be a
founding member of the single European currency.
The overall price-to-earnings ratio for the market stands at 14.2 times
prospective 1997 earnings with a dividend yield of 2.90%. The Fund
anticipates retaining its fully-invested position.
Sincerely,
/s/ Peter Hooper
Peter Hooper
Chairman of the Board
May 27, 1997
<PAGE>
Statement of Net Assets (unaudited)
-----------------------------------
<TABLE>
<CAPTION>
April 30, 1997 Shares Value (Note A)
-------------- ------ --------------
<S> <C> <C>
- -------------------------------------------------------------------------------------------------------------
IRISH COMMON STOCKS (93.7%)
- -------------------------------------------------------------------------------------------------------------
Abbey 745,000 U.S. $ 2,349,095
Adare Printing Group 220,000 2,213,210
Allied Irish Bank 1,917,688 13,389,243
Boxmore International 393,000 1,882,384
Clondalkin Group 348,850 3,195,168
Crean (James) 347,625 1,148,309
CRH 1,048,036 10,252,169
FBD Holdings 260,000 956,455
Fyffes 1,635,000 2,332,204
Green Property 900,000 4,148,642
Greencore 442,568 2,259,353
Hibernian Group 750,000 3,626,121
Independent Newspapers 309,999 1,605,848
IONA Technologies 75,000 1,087,500
Irish Life 500,000 2,432,429
I.W.P., International 389,886 1,609,887
Jury's Hotel Group 791,792 4,339,394
Kerry Group, Series A 465,000 4,503,372
Smurfit (Jefferson) Group 3,355,840 8,213,230
United Drug 437,500 2,430,552
Waterford Foods, Class A 1,644,156 2,147,768
Waterford Wedgewood 2,065,739 2,698,484
TOTAL IRISH COMMON STOCKS
(Cost U.S. $53,507,084) 78,820,817
- -------------------------------------------------------------------------------------------------------------
UNITED KINGDOM COMMON STOCK (2.7%)
- -------------------------------------------------------------------------------------------------------------
Powerscreen International 230,000 2,264,245
TOTAL UNITED KINGDOM COMMON STOCK
(Cost U.S. $1,403,303) 2,264,245
- -------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS BEFORE FOREIGN CURRENCY ON DEPOSIT
- -------------------------------------------------------------------------------------------------------------
(Cost U.S. $54,910,387#) U.S. $81,085,062
- -------------------------------------------------------------------------------------------------------------
FOREIGN CURRENCY ON DEPOSIT (2.0%)
- -------------------------------------------------------------------------------------------------------------
(Interest Bearing)
British Pound Sterling Pds 47,414 U.S. $ 76,835
Irish Pound IRPds 1,050,841 1,577,837
TOTAL FOREIGN CURRENCY ON DEPOSIT
(Cost U.S. $1,628,350) 1,654,672
- -------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (98.4%)
- -------------------------------------------------------------------------------------------------------------
(Cost U.S. $56,538,737) 82,739,734
- -------------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES (1.6%)
- -------------------------------------------------------------------------------------------------------------
Cash 144,480
Net Unrealized Appreciation of Forward Foreign Currency
Contract (Note A) 874,248
Dividends and Interest Receivable 498,332
Prepaid Expenses 41,595
Principal Investment Advisory Fee Payable (Note B) (52,260)
Co-Advisory Fee Payable (Note B) (17,420)
Administration Fee Payable (Note B) (13,936)
Accrued Directors' Fees and Expenses (Note C) (5,558)
Other Liabilities (93,713)
----------
1,375,768
- -------------------------------------------------------------------------------------------------------------
NET ASSETS (100.0%)
- -------------------------------------------------------------------------------------------------------------
Applicable to 5,009,000 outstanding
U.S. $.01 par value shares
(authorized 20,000,000 shares) U.S. $84,115,502
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
- -------------------------------------------------------------------------------------------------------------
(U.S. $84,115,502 / 5,009,000) U.S. $ 16.79
=====
- -------------------------------------------------------------------------------------------------------------
#Aggregate cost for U.S. Federal income tax purposes.
</TABLE>
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACT
FORWARD FOREIGN CURRENCY CONTRACT TO SELL
Contract to Deliver
--------------------------------------------------
Delivery Local In Exchange Value in Unrealized
Date Currency For U.S. $ U.S. $ Appreciation
-------- ----------------------- ----------- -------- -----------
05/30/1997 Irish Pound 9,415,605 15,000,000 14,125,752 U.S. $874,248
========
<PAGE>
Statement of Net Assets (unaudited) (continued)
-----------------------------------------------
<TABLE>
<CAPTION>
Value (Note A)
- -------------------------------------------------------------------------------------------------------------
AT APRIL 30, 1997 NET ASSETS CONSISTED OF:
- -------------------------------------------------------------------------------------------------------------
<S> <C>
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 601,198
Accumulated Net Realized Gain 1,888,950
Unrealized Appreciation of Securities, Forward
Foreign Currency Contracts, Foreign Currency and
Net Other Assets 27,057,802
- -------------------------------------------------------------------------------------------------------------
TOTAL NET ASSETS U.S. $84,115,502
- -------------------------------------------------------------------------------------------------------------
See Notes to Financial Statements.
</TABLE>
<PAGE>
Statement of Operations
-----------------------
For the Six Months Ended
April 30, 1997 (unaudited)
- ------------------------------------------------------------------------------
INVESTMENT INCOME
- ------------------------------------------------------------------------------
Dividends (Net of Withholding Taxes of U.S. $3,686) U.S. $1,265,428
Interest 21,149
- ------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 1,286,577
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
EXPENSES
- ------------------------------------------------------------------------------
Principal Investment Advisory Fee
(Note B) U.S.$ 315,041
Co-Advisory Fee (Note B) 105,014
Administration Fee (Note B) 84,011
Custodian Fees (Note B) 36,038
Directors' Fees and Expenses (Note C) 29,990
Legal and Audit Fees 21,595
Other 81,714
- ------------------------------------------------------------------------------
TOTAL EXPENSES 673,403
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NET INVESTMENT INCOME 613,174
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTE D)
- ------------------------------------------------------------------------------
Realized Gain/(Loss) on:
Securities Transactions 2,652,697
Forward Foreign Currency Contracts (690,731)
Foreign Currency Transactions (69,859)
---------
Net Realized Gain on Investments 1,892,107
During the Period
Net Change in Unrealized Appreciation/
(Depreciation) of:
Securities (1,696,368)
Forward Foreign Currency Contracts 1,597,938
Foreign Currency and Net Other Assets (44,594
---------
Net Unrealized Depreciation of Investments
During the Period (143,024)
---------
- ------------------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 1,749,083
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS U.S. $2,362,257
- ------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
Statement of Changes in Net Assets
----------------------------------
Six Months Ended
April 30, 1997 Year Ended
(unaudited) October 31, 1996
Net Investment Income U.S. $ 613,174 U.S. $ 718,953
Net Realized Gain on Investments 1,892,107 2,289,808
Net Unrealized Appreciation/
(Depreciation) of Investments (143,024) 14,791,357
---------- ----------
Net Increase in Net Assets
Resulting from Operations 2,362,257 17,800,118
Distributions to Shareholders
from:
Net Investment Income (1,091,962) (706,269)
Net Realized Gains (1,788,213) (646,161)
---------- ----------
Net Increase/(Decrease) in Net
Assets (517,918) 16,447,688
- ------------------------------------------------------------------------------
NET ASSETS
- ------------------------------------------------------------------------------
Beginning of Period 84,633,420 68,185,732
---------- ----------
End of Period (Including Undistributed
Net Investment Income of $601,198 and
$1,079,986 at April 30, 1997 and
October 31, 1996, respectively) U.S. $84,115,502 U.S. $84,633,420
=========== ===========
See Notes to Financial Statements.
<PAGE>
Financial Highlights
--------------------
For a Fund share outstanding throughout each period.
<TABLE>
<CAPTION>
Six Months Ended Year Ended October 31,
April 30, 1997 ------------------------------------------------------------------------------------
(Unaudited) 1996 1995 1994 1993 1992
Operating Performance:
Net Asset Value,
<S> <C> <C> <C> <C> <C> <C>
Beginning of Period U.S. $16.90 U.S. $13.61 U.S. $10.94 U.S. $ 9.54 U.S. $ 7.99 U.S. $ 9.75
----- ----- ----- ----- ----- -----
Net Investment Income 0.12 0.14 0.11 0.10 0.12 0.15
Net Realized and
Unrealized Gain/(Loss) on
Investments 0.35 3.42 2.67 1.37 1.66 (1.49)
----- ----- ----- ----- ----- -----
Net Increase/(Decrease) in
Net Assets Resulting from
Investment Operations 0.47 3.56 2.78 1.47 1.78 (1.34)
Distributions to
Shareholders from:
Net Investment Income (0.22) (0.14) (0.11) (0.07) (0.12) (0.23)
Net Realized Gains (0.36) (0.13) -- -- -- --
Capital Surplus -- -- -- -- (0.11) (0.19)
----- ----- ----- ----- ----- -----
(0.58) (0.27) (0.11) (0.07) (0.23) (0.42)
Total from Distributions ----- ----- ----- ----- ----- -----
Net Asset Value,
End of Period U.S. $16.79 U.S. $16.90 U.S. $13.61 U.S. $10.94 U.S. $ 9.54 U.S. $ 7.99
====== ====== ====== ====== ====== ======
Share Price, End of Period U.S. $14.88 U.S. $14.00 U.S. $11.25 U.S. $10.13 U.S. $ 8.75 U.S. $ 7.00
====== ====== ====== ====== ====== ======
Total Investment Return* 10.53% 27.12% 12.46% 16.59% 29.34% (6.35)%
===== ===== ===== ===== ===== =====
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
- -----------------------------------------------------------------------------------------------------------------------------------
Net Assets,
End of Period (000's) U.S. $84,116 U.S. $84,633 U.S. $68,186 U.S. $54,785 U.S. $47,806 U.S. $40,018
Ratio of Net Investment
Income to Average Net
Assets 1.46%+ 0.95% 0.94% 0.93% 1.39% 1.62%
Ratio of Operating
Expenses to Average Net
Assets 1.60%+ 1.63% 1.74% 1.87% 1.88% 1.80%
Portfolio Turnover Rate 3% 12% 21% 13% 15% 7%
Average Commission Rate
(Per Share of Security)# $0.0078 $0.0096 N/A N/A N/A N/A
*Based on share price and reinvestment of income distributions.
+Annualized.
#Average commission rate as required by amended disclosure requirements effective
September 1, 1995.
See Notes to Financial Statements.
</TABLE>
<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 and is registered 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 due primarily 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., 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.
BankBoston 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, 1997, the Fund paid U.S.
$35,038 in custodial fees to Bank of Ireland.
For the six months ended April 30, 1997, the Fund incurred total brokerage
commissions of $24,815, of which $6,880 was paid to Davy Stockbrokers, 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, 1997, excluding U.S. government and short-term
investments, aggregated U.S. $2,194,309 and U.S. $6,649,815, respectively.
At April 30, 1997, aggregate gross unrealized appreciation for all
securities (excluding foreign currency on deposit) in which there was an excess
value over tax cost was U.S. $30,263,088 and aggregate gross unrealized
depreciation for all securities (excluding foreign currency on deposit) in which
there was an excess of tax cost over value was U.S. $4,088,413.
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. MARKET CONCENTRATION:
Because the Fund concentrates its investments in securities issued by
corporations in Ireland, its portfolio may be subject to special risks and
considerations typically not 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.
* * * *
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.
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
Net Increase/
Net Realized and (Decrease) in Net
Net Investment Unrealized Gain/ Assets Resulting
Income/(Loss) (Loss) on Investments From Operations
-------------- --------------------- -----------------
Total Total Total
Quarter Ended (000) Per Share (000) Per Share (000) Per Share
- ------------- ----- --------- ----- --------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
January 31, 1995 U.S. $(38) U.S. $(0.01) U.S. $ 386 U.S. $0.08 U.S. $ 348 U.S. $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)
July 31, 1996 (60) (0.01) 51 0.01 (9) (0.00)
October 31, 1996 97 0.01 7,871 1.58 7,968 1.59
January 31, 1997 (51) (0.01) 1,434 0.29 1,383 0.28
April 30, 1997 664 0.13 315 0.06 979 0.19
</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 instructed
otherwise 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,
in care of 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 the 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, as agent for the participants, will 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 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 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
Jodie Obernesser - Assistant Treasurer
Brigid O. Bieber - Secretary
Elizabeth A. Russell - Assistant Secretary
- ------------------------ 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.
One Exchange Place
53 State Street
Boston, Massachusetts 02109
- --------------------------------- CUSTODIANS ----------------------------------
Bank of Ireland
Lower Baggot Street
Dublin 2, Ireland
BankBoston
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.
One Exchange Place -- BOS665
53 State Street
Boston, Massachusetts 02109
TELEPHONE INQUIRIES SHOULD BE DIRECTED TO
1-800-GO-TO-IRL (1-800-468-6475)
