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[Graphic Omitted]
The
IRISH
Investment Fund
Semi-Annual Report
For the Six Months Ended April 30, 1998
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Chairman's Letter
-----------------
Dear Stockholder,
The Irish equity market produced another strong performance during the
quarter ended April 30, 1998, gaining 21.8% in Irish pound terms. The
strength of the Irish pound against the U.S. dollar translated this gain
into 24.9% in U.S. dollar terms. Over the same period, the net asset value
("NAV") of The Irish Investment Fund, Inc. (the "Fund") increased to $26.67
from $20.54. This represents a return of 29.8% for the quarter.
ECONOMIC REVIEW
The Irish economy is experiencing a sustained period of rapid economic
growth that began in 1993 and continues at a vigorous pace in 1998. The
Irish Central Bank is forecasting that the Irish economy will expand by 7.5%
in 1998 following a growth rate of 8.7% in 1997.
Ireland has enjoyed rapid rates of employment growth over the past
number of years and the unemployment rate at the end of March 1998 stood at
9.4%. This is the lowest unemployment rate experienced for almost 20 years
and a sharp reduction from a rate of 15.5% recorded in 1993. This figure is
even more impressive given that the significant net migration into the
country over the past three years has added to the available labor force.
Consumer spending has accelerated over the past six months as strong
employment growth and personal income tax reductions have fueled increased
spending. Retail sales in the first two months of the year rose by 10.0%
over 1997 levels. New automobile sales increased by 14.4% in the first
quarter over the previous year's level, which followed an increase of 18.7%
for the year ended 1997. This strength in consumer spending, allied with the
continuing growth of the housing market, has led to an expansion of private
sector credit for the three months ending in March with a 25% increase over
1997 levels.
The above mentioned factors, in conjunction with the strength of Sterling,
is causing some concern to policy makers. It is also being reflected in
consumer price inflation, which has accelerated to 2.5% for the 12 months ended
April 30, 1998 from a low rate of 1.4% for the year ended 1997. In an effort to
counteract these pressures, the Irish Central Bank recently revalued the Irish
pound within the European currency system by 3.0%.
On the broader front, the European Community has decided that the Irish
pound will be one of the currencies that will be merged into the new Euro
currency, which comes into being on January 1, 1999. While this is seen as
being positive overall for the Irish economy, there is some concern about
the decision on the part of the U.K. not to join the Euro currency because
it continues to be Ireland's largest trading partner.
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POLITICAL ENVIRONMENT
The electorates of both Northern and Southern Ireland have now
overwhelmingly approved the historic Peace Agreement, which was reached in
Northern Ireland under the Chairmanship of U.S. Senator George Mitchell.
While challenges remain in relation to many elements of the Peace Agreement,
the Northern Ireland economy is expected to benefit substantially from the
implementation of various aid packages which, together with the improved
environment, will stimulate tourism and other key industries.
The Fund currently has holdings in Northern Ireland and will continue to
seek further suitable investments.
STOCK MARKET REVIEW
As previously mentioned, the Irish equity market performed strongly over
the quarter ended April 30, 1998, registering a gain of 21.8%. A comparison
with major international markets is shown below:
Local
Currency U.S. $
-------- ------
U.S. Equities +13.4% +13.4%
U.K. Equities + 9.9% +12.4%
Japanese Equities - 5.9% - 9.9%
Irish Equities +21.8% +24.9%
The key features of the Irish market over the quarter were the support
of strong performance by equity markets across Europe and buoyant 1997
annual results from many Irish companies. Indeed, given that valuations for
many of the stocks in the Irish market are now in line with their
international peers, strong profit growth by the Irish companies appears to
be driving their relative outperformance in relationship to their historical
price-to-earnings ratio levels. Consider the following table of 1997 results
for some Irish stocks held by the Fund:
% Change in % Dividend
Earnings per Increase
Company Industry Share 1997 1997
------- -------- ---------- ----------
Allied Irish Banks Banking +25.0% +18.0%
CRH Building Materials +21.4% +14.7%
Waterford Wedgewood Luxury Products +17.5% +14.2%
Kerry Group Food +16.2% +15.7%
Independent Newspapers Media +24.3% +13.0%
Financial stocks once again led the market higher with Allied Irish
Banks (+29.6%) buoyed by strong results and Hibernian Group (+63.5%) driven
higher by speculation concerning merger activity in financial services which
is being anticipated across Europe as Monetary Union approaches.
Iona Technologies' stock price rose by 63.5% as the company saw revenues
increase by 93% in the first quarter of 1998, confirming its high growth
potential. Iona is one of a small, but increasing, number of successful
indigenous Irish technology firms. The Fund continues to search for new
investment opportunities in the emerging Irish technology industry.
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CURRENT OUTLOOK
The Irish economy continues to deliver unprecedented rates of economic
growth and the fundamentals remain strong. The path to the new Euro
currency, which comes into being on January 1, 1999 and, by implication, the
introduction of European interest rates to Ireland, places the country in
uncharted economic waters. While rising inflation is a risk in the short-
term, Ireland's competitive flexible labor force is well placed to thrive
within the new Euro currency bloc.
The Irish market stands on a price-to-earnings ratio for 1998 of 18.9
times and offers a dividend yield of 1.7%. The Fund retains its fully
invested position.
Sincerely,
/s/ Peter Hooper
Peter Hooper
Chairman of the Board
May 26, 1998
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Statement of Net Assets (unaudited)
-----------------------------------
April 30, 1998 Shares Value (Note A)
IRISH COMMON STOCKS (98.5%)
Abbey 698,600 U.S. $ 4,462,162
Adare Printing Group 320,000 4,626,926
Allied Irish Banks 1,817,688 25,006,377
Avonmore Waterford Group 1,153,610 5,166,010
BCO Technologies 535,700 1,868,296
Boxmore International 393,000 1,930,927
Clondalkin Group 268,850 2,679,623
CRH 1,018,036 14,534,143
FBD Holdings 260,000 2,007,434
Fyffes 1,635,000 4,429,762
Green Property Group 907,143 7,194,979
Greencore Group 542,568 3,313,209
Hibernian Group 500,000 6,036,341
Independent Newspapers 309,999 1,871,260
IONA Technologies 169,300 5,269,463
Irish Life 500,000 4,639,560
I.W.P., International 639,886 3,817,657
Jury's Hotel Group 691,792 6,021,055
Kerry Group, Series A 465,000 7,343,631
Smurfit (Jefferson) Group 2,785,840 10,363,523
United Drug 437,500 2,978,689
Waterford Wedgewood 3,565,739 5,956,647
TOTAL IRISH COMMON STOCKS
(Cost U.S. $56,325,957) 131,517,674
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UNITED KINGDOM COMMON STOCK (1.2%)
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Galen Holdings 200,000 1,622,519
TOTAL UNITED KINGDOM COMMON STOCK
(Cost U.S. $506,850) 1,622,519
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TOTAL INVESTMENTS BEFORE FOREIGN CURRENCY ON DEPOSIT
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(Cost U.S. $56,832,807#) U.S. $133,140,193
FOREIGN CURRENCY ON DEPOSIT (0.9%)
(Interest Bearing)
British Pound Sterling Brt Pd 5,300 U.S. $ 8,865
Irish Pound IR Pd 930,644 1,306,438
TOTAL FOREIGN CURRENCY ON DEPOSIT
(Cost U.S. $1,287,152) 1,315,303
TOTAL INVESTMENTS (100.6%)
(Cost U.S. $58,119,959) 134,455,496
OTHER ASSETS AND LIABILITIES (-0.6%)
Cash 10,967
Dividends and Interest Receivable 137,605
Prepaid Expenses 41,713
Net Unrealized Depreciation of Forward Foreign Currency
Contract (Note A) 822,240)
Principal Investment Advisory Fee Payable (Note B) (73,878)
Co-Advisory Fee Payable (Note B) (21,332)
Administration Fee Payable (Note B) (21,332)
Accrued Directors' Fees and Expenses (Note C) (15,175)
Other Liabilities (77,699)
------------
(841,371)
NET ASSETS (100.0%)
Applicable to 5,009,000 outstanding
U.S. $.01 par value shares
(authorized 20,000,000 shares) U.S. $133,614,125
NET ASSET VALUE PER SHARE
(U.S. $133,614,125 / 5,009,000) U.S. $ 26.67
=====
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# Aggregate cost for U.S. Federal income tax purposes.
<TABLE>
SCHEDULE OF FORWARD FOREIGN CURRENCY CONTRACT
FORWARD FOREIGN CURRENCY CONTRACT TO SELL
<CAPTION>
Contract to Deliver
-----------------------------------------------------------
Delivery Local In Exchange Value in Unrealized
Date Currency For U.S. $ U.S. $ Depreciation
- ----------- ------------------------ ------------- ---------- ----------------
<S> <C> <C> <C> <C>
06/10/1998 Irish Pound 18,409,425 25,000,000 25,822,240 U.S. $ (822,240)
===========
</TABLE>
Value (Note A)
AT APRIL 30, 1998 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 45,612
Accumulated Net Realized Gain 3,480,844
Unrealized Appreciation of Securities, Forward
Foreign Currency Contracts, Foreign Currency and
Net Other Assets 75,520,117
TOTAL NET ASSETS U.S. $133,614,125
See Notes to Financial Statements.
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Statement of Operations
For the Six Months Ended
April 30, 1998 (unaudited)
INVESTMENT INCOME
Dividends (Net of Withholding Taxes of
U.S. $3,174) U.S. $ 792,418
Interest 31,007
TOTAL INVESTMENT INCOME 823,425
EXPENSES
Principal Investment Advisory Fee
(Note B) U.S.$ 401,633
Co-Advisory Fee (Note B) 112,271
Administration Fee (Note B) 109,205
Custodian Fees (Note B) 19,424
Directors' Fees and Expenses (Note C) 40,210
Legal and Audit Fees 23,100
Other 51,941
TOTAL EXPENSES 757,784
NET INVESTMENT INCOME 65,641
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTE D)
Realized Gain/(Loss) on:
Securities Transactions 1,377,442
Forward Foreign Currency Contracts 2,232,903
Foreign Currency Transactions (126,588)
----------
Net Realized Gain on Investments 3,483,757
During the Period
Net Change in Unrealized Appreciation/
(Depreciation) of:
Securities 34,596,401
Forward Foreign Currency Contracts (598,210)
Foreign Currency and Net Other Assets (197,748)
----------
Net Unrealized Appreciation of Investments
During the Period 33,800,443
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 37,284,200
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS U.S. $37,349,841
See Notes to Financial Statements.
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Statement of Changes in Net Assets
Six Months Ended
April 30, 1998 Year Ended
(unaudited) October 31, 1997
Net Investment Income U.S. $ 65,641 U.S. $ 703,290
Net Realized Gain on
Investments 3,483,757 3,145,831
Net Unrealized Appreciation
of Investments 33,800,443 14,518,848
------------ ------------
Net Increase in Net Assets
Resulting from Operations 37,349,841 18,367,969
Distributions to Shareholders
from:
Net Investment Income (330,594) (1,091,962)
Net Realized Gains (3,526,336) (1,788,213)
------------ ------------
Net Increase in Net Assets 33,492,911 15,487,794
NET ASSETS
Beginning of Period 100,121,214 84,633,420
------------ ------------
End of Period (Including
Undistributed Net
Investment Income of
$45,612 and $310,565 at
April 30, 1998 and
October 31, 1997,
respectively) U.S. $133,614,125 U.S. $100,121,214
============ ============
See Notes to Financial Statements.
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<TABLE>
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Financial Highlights
For a Fund share outstanding throughout each period.
<CAPTION>
Six Months Ended Year Ended October 31,
April 30, 1998 -----------------------------------------------------------------------------
(Unaudited) 1997++ 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Operating Performance:
Net Asset Value,
Beginning of Period U.S. $19.99 U.S. $16.90 U.S. $13.61 U.S. $10.94 U.S. $ 9.54 U.S. $ 7.99
------ ------ ------ ------ ------ ------
Net Investment Income 0.01 0.14 0.14 0.11 0.10 0.12
Net Realized and Unrealized
Gain/(Loss) on Investments 7.44 3.53 3.42 2.67 1.37 1.66
------ ------ ------ ------ ------ ------
Net Increase/(Decrease) in Net
Assets Resulting from
Investment Operations 7.45 3.67 3.56 2.78 1.47 1.78
Distributions to Shareholders
from:
Net Investment Income (0.07) (0.22) (0.14) (0.11) (0.07) (0.12)
Net Realized Gains (0.70) (0.36) (0.13) -- -- --
Capital Surplus -- -- -- -- -- (0.11)
------ ------ ------ ------ ------ ------
Total from Distributions (0.77) (0.58) (0.27) (0.11) (0.07) (0.23)
------ ------ ------ ------ ------ ------
Net Asset Value, End of Period U.S. $26.67 U.S. $19.99 U.S. $16.90 U.S. $13.61 U.S. $10.94 U.S. $ 9.54
====== ====== ====== ====== ====== ======
Share Price, End of Period U.S. $24.75 U.S. $15.75 U.S. $14.00 U.S. $11.25 U.S. $10.13 U.S. $ 8.75
====== ====== ====== ====== ====== ======
Total Investment Return* 39.08% 17.03% 27.12% 12.46% 16.59% 29.34%
====== ====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net Assets,
End of Period (000's) U.S. $133,614 U.S. $100,121 U.S. $84,633 U.S. $68,186 U.S. $54,785 U.S. $47,806
Ratio of Net Investment Income
to Average Net Assets 0.12%+ 0.78% 0.95% 0.94% 0.93% 1.39%
Ratio of Operating Expenses to
Average Net Assets 1.39%+ 1.54% 1.63% 1.74% 1.87% 1.88%
Portfolio Turnover Rate 6% 11% 12% 21% 13% 15%
* Based on share price and reinvestment of income distributions.
+ Annualized
++ Per share numbers have been calculated using the average share method, which more appropriately represents the per-share data
for the period since the use of the undistributed income method did not accord with results of operations.
See Notes to Financial Statements.
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</TABLE>
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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 (the "1940 Act").
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
within the prescribed time. It is also the intention of the Fund to make
distributions in sufficient amounts to avoid Fund excise tax. 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"). Prior to April 1, 1998, under the Principal Investment Advisory
Agreement, the Fund paid a monthly fee at an annual rate of 0.75% of the value
of its average weekly net assets.
Effective April 1, 1998, pursuant to an amended Principal Investment
Advisory Agreement fee schedule, the Fund pays a monthly fee at an annual rate
of 0.75% on the first $100 million and 0.50% of the value of the average
weekly net assets of the Fund in excess of $100 million.
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"). Effective November 28, 1997, the Fund under the
U.S. Co-Advisory Agreement pays a monthly fee at an annual rate of 0.20% of
the value of its average weekly net assets. Prior to November 28, 1997 the
Fund paid a monthly fee at an annual rate of 0.25% -- See Note G.
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, 1998, the Fund paid U.S.
$14,148 in custodial fees to Bank of Ireland.
For the six months ended April 30, 1998, the Fund incurred total brokerage
commissions of $20,924, of which $2,652 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 of 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, 1998, excluding U.S. government and short-term
investments, aggregated U.S. $6,882,323 and U.S. $7,308,143, respectively.
At April 30, 1998, 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. $76,307,386 and aggregate gross unrealized
depreciation for all securities (excluding foreign currency on deposit) in
which there was no excess of tax cost over value.
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.
G. SUBSEQUENT EVENT:
The merger of Salomon Inc (the parent company of Salomon Brothers Asset
Management) and Travelers Group Inc. (the "Transaction") could have been
deemed to have resulted in an "assignment" (as defined by the 1940 Act) of the
U.S. Co-Advisory Agreement between the Fund and Salomon Brothers Asset
Management in effect prior to the closing of the Transaction (the "Former U.S.
Co-Advisory Agreement"). As required by the 1940 Act, the Former U.S. Co-
Advisory Agreement provided for an automatic termination in the event of its
"assignment". Therefore, effective November 28, 1997 (the date of the
Transaction) the Fund entered into a new U.S. Co-Advisory Agreement with
Salomon Brothers Asset Management. The fee under the new U.S. Co-Advisory
Agreement, the Fund pays a monthly fee at the annual rate of 0.20% of the
Fund's average monthly net assets.
* * * *
In accordance with Section 23(c) of the 1940 Act, 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.
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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 Fund.
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 ("NYSE"), 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 NYSE 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 pro-rating 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.
MEETING OF STOCKHOLDERS (UNAUDITED)
On March 10, 1998, the Fund held its Annual Meeting of Stockholders. The
following Directors were elected by the following votes: Denis P. Kelleher --
3,882,660 For; 27,635 Abstaining and James M. Walton -- 3,879,439 For; 30,856
Abstaining. Peter J. Hooper, William P. Clark and Gerald F. Colleary continue
to serve in their capacities as Directors of the Fund. The selection of Price
Waterhouse LLP as the Fund's independent accountants for the fiscal year
ending October 31, 1998 was ratified by the following votes: 3,875,781 For;
16,429 Against; and 16,582 Abstaining. Lastly, stockholders approved a new
U.S. Co-Advisory Agreement between Salomon Brothers Asset Management and the
Fund by the following votes: 3,700,216 For; 85,870 Against; and 58,145
Abstaining.
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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
Elizabeth A. Russell - Assistant Secretary
------------------------PRINCIPAL INVESTMENT ADVISOR----------------------
Bank of Ireland Asset Management (U.S.) Limited
20 Horseneck Lane
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 -- BOS865
53 State Street
Boston, Massachusetts 02109
TELEPHONE INQUIRIES SHOULD BE DIRECTED TO:
1-800-GO-TO-IRL (1-800-468-6475)
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