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[Graphic Omitted]
The
IRISH
Investment Fund
Semi-Annual Report
For the Six Months Ended April 30, 1999
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<PAGE>
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Chairman's Letter
-----------------
Dear Stockholder,
The Irish equity market increased by 1.2% in euro currency terms over
the quarter to April 30, 1999. The strength of the U.S. dollar against the
euro translated this gain into a decline of -5.8% in dollar terms. Over the
same period, the net asset value ("NAV") of the Irish Investment Fund, Inc.
(the "Fund") decreased from $22.72 to $22.17, which equates to a decline of
-2.4% over the quarter.
ECONOMIC REVIEW
While many international and European economies remain trapped in a
period of relatively slow growth, the Irish economy continues to experience
strong economic conditions. The Irish Central Bank is forecasting that the
Irish economy will grow by 6.5% in 1999, following a growth rate of 8.25% in
1998. Irish consumers are benefiting from lower European interest rates,
which were reduced by 0.5% to 2.5% in April 1999. Retail sales volumes in
the first three months of 1999 have increased by an average of 10.7% over
1998 levels. This data was positively impacted by buoyant car sales, which
have increased by 25.0% in the first four months of 1999. The Irish
government has been one of the key beneficiaries of economic buoyancy with
tax receipts increasing by 15.5% over the first five months of 1999, which
is well ahead of the budgeted increase of 7.5%. Given this revenue buoyancy,
the government should comfortably achieve its 1999 budget surplus target of
1.7% of GDP.
The recently released Quarterly National Household Survey, which relates
to the period ended December 1998, highlights the dramatic change in the
Irish labor market over the past five years. Total employment in the Irish
economy in 1998 increased by 72,400, which represents an increase of 5.0%.
Indeed, between April 1993 and the end of 1998, the total number of people
at work rose by 342,000, which has resulted in the unemployment rate
decreasing from 15.9% in April 1993 to a level of 6.76% in May 1999.
It is clear that six years of rapid economic expansion has used up a
large part of the country's labor surplus capacity. Nevertheless, it is
estimated that Ireland's unique demographics will actually result in further
labor force growth of approximately 1.5% to 2.0% per annum over the next
five years.
The infrastructure of the economy, particularly transport and housing,
has also come under increasing strain due to recent growth levels. However,
buoyant government finances and receipts from privatizations of State
companies will allow significant investment in these areas over the coming
years. This should help to ensure continued growth in the overall economy,
albeit at lower levels than that experienced in recent years.
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<PAGE>
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EQUITY MARKET REVIEW
As previously mentioned, the Irish Equity market increased by 1.2% over
the quarter. A comparison with major international markets is shown below.
Local
Currency U.S. $
-------- ------
Irish Equities + 1.2% - 5.8%
U.S. Equities + 4.3% + 4.3%
U.K. Equities +12.3% +10.1%
Japanese Equities +15.2% +12.2%
Europe ex UK Equities + 5.6% + 5.6%
German Equities + 8.4% + 0.7%
French Equities + 3.6% - 3.5%
Dutch Equities +11.9% + 4.2%
The key feature of Irish equities over the quarter under review was the weak
performance by financial stocks, which represents a large part of the Irish
market, driven by weak international bond markets and profit-taking
following strong price performance during the previous quarter. Many Irish
companies held by the Fund delivered solid financial results for 1998 -
consider the following table.
% Change in % Dividend
Earnings per Increase
Company Industry Share 1998 1999
------- -------- ---------- ----------
AIB Banking +33.0% +19.8%
CRH Building Materials +24.2% +12.3%
Kerry Group Food +21.9% + 9.0%
Hibernian Insurance +34.1% +21.3%
Jurys Hotels +23.0% +33.0%
Despite excellent financial results, AIB (-10.8% over quarter) suffered
from profit taking. In 1998 the bank delivered a return on shareholder's
equity of 27.0%, which highlights that the bank is among the most profitable
in Europe.
A recovery in cyclical stocks on a global basis benefited both CRH
(+28.1% in quarter) and Smurfit (+71.2%). Smurfit is benefiting from signs
of improved pricing in the paper sector and recovery after oversold levels.
Waterford Wedgwood (+24.3%) had struggled in 1998, but has been impacted
positively by signs of recovery in Asia and stabilization in the Japanese
economy.
Jurys Hotel Group (+36.2%) completed the acquisition of the Doyle Hotel
chain for 314 million euros, which substantially increases the scale of the
company to over 5,000 rooms. The deal gives the company a dominant position
in the Irish market, particularly in the Dublin market.
Iona Technologies (-62.1%) announced a profit shortfall as orders for
the company's software were lower than anticipated. This was particularly
disappointing given the strong performance of the stock over the previous
quarter, but not atypical of the volatility in the high-technology sector.
The company believes that the underlying market for its software remains
robust.
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<PAGE>
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CURRENT OUTLOOK
On a global basis, equity markets are struggling to make significant
upward progress following the strong performance in 1998, relatively high
valuations, and concerns over rising US interest rates.
Irish companies continue to deliver solid earnings growth and are
benefiting from the low European interest-rate environment. Consequently, we
believe Irish equities are attractively priced at a 16.6x price to earnings
ratio for 1999 and a dividend yield of 1.8%. The Fund retains its fully
invested position.
Sincerely,
/s/ Peter Hooper
Peter Hooper
Chairman of the Board
June 1, 1999
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<PAGE>
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Statement of Net Assets (unaudited)
-----------------------------------
April 30, 1999 Shares Value (Note A)
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IRISH COMMON STOCKS (96.77%)
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Abbey 698,600 U.S. $ 3,321,633
Adare Printing 320,000 2,214,633
Allied Irish Banks 1,567,688 25,343,212
Boxmore International 393,000 979,975
Clondalkin 268,850 1,945,858
CRH 808,036 15,922,825
DCC 400,000 3,592,440
FBD Holdings 260,000 1,346,108
Fyffes 1,635,000 3,714,213
Glanbia 1,153,610 2,254,973
Green Property 757,143 4,879,983
Greencore 542,568 2,063,798
Hibernian 300,000 2,504,142
Horizon Technology*+ 897,436 939,124
ICON - ADR* 85,000 1,338,750
Independent Newspapers 309,999 1,523,084
IONA Technologies - ADR* 139,300 2,368,100
Irish Life & Permanent 504,506 4,531,019
I.W.P., International 639,886 1,487,428
Jury's Hotel 691,792 6,505,432
Kerry Group, Series A 465,000 6,107,095
Kingspan 550,000 1,627,164
Smurfit Group 2,035,840 5,549,757
United Drug 287,500 1,944,144
Waterford Wedgewood 3,565,739 3,466,155
TOTAL IRISH COMMON STOCKS
(Cost U.S. $55,556,798) 107,471,045
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UNITED KINGDOM COMMON STOCKS (1.86%)
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BCO Technologies* 535,700 529,995
Galen Holdings 200,000 1,536,308
TOTAL UNITED KINGDOM COMMON STOCKS
(Cost U.S. $1,749,942) 2,066,303
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TOTAL INVESTMENTS BEFORE FOREIGN CURRENCY ON DEPOSIT
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(Cost U.S. $57,306,740#) U.S. $109,537,348
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<PAGE>
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Statement of Net Assets (unaudited) (continued)
-----------------------------------------------
April 30, 1999 Face Value Value (Note A)
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FOREIGN CURRENCY ON DEPOSIT (0.84%)
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(Interest Bearing)
British Pound Sterling Brt Pd 44,676 U.S. $ 71,871
Euro EUR 815,499 861,656
TOTAL FOREIGN CURRENCY ON DEPOSIT
(Cost U.S. $937,739) 933,527
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TOTAL INVESTMENTS (99.47%)
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(Cost U.S. $58,244,479) 110,470,875
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OTHER ASSETS AND LIABILITIES (0.53%)
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Cash 720,139
Dividends and Interest Receivable 161,077
Investment Advisory Fee Payable (Note B) (134,625)
Consulting Fee Payable (Note B) (27,575)
Administration Fee Payable (Note B) (36,922)
Other Liabilities (95,298)
------------
586,796
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NET ASSETS (100.00%)
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Applicable to 5,009,000 outstanding
U.S. $.01 par value shares
(authorized 20,000,000 shares) U.S. $111,057,671
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NET ASSET VALUE PER SHARE
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(U.S. $111,057,671 / 5,009,000) U.S. $ 22.17
=====
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# Aggregate cost for U.S. Federal income tax purposes.
* Non-income producing security.
+ Private placement security (Note G).
ADR - Denominated in U.S. dollars.
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<PAGE>
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Statement of Net Assets (unaudited) (continued)
Value (Note A)
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AT APRIL 30, 1999 NET ASSETS CONSISTED OF:
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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 54,171,460
Undistributed Net Investment Income 614,929
Accumulated Net Realized Gain 4,004,454
Unrealized Appreciation of Securities, Forward
Foreign Currency Contracts, Foreign Currency and
Net Other Assets 52,216,738
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TOTAL NET ASSETS U.S. $111,057,671
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See Notes to Financial Statements.
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<PAGE>
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Statement of Operations
-----------------------
For the Six Months Ended
April 30, 1999 (unaudited)
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INVESTMENT INCOME
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Dividends (Net of Withholding Taxes of U.S. $540) U.S. $1,322,649
Interest 35,146
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TOTAL INVESTMENT INCOME 1,357,795
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EXPENSES
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Investment Advisory Fee (Note B) U.S. $ 402,680
Consulting Fee (Note B) 87,461
Administration Fee (Note B) 113,358
Custodian Fees (Note B) 25,488
Directors' Fees and Expenses (Note C) 26,531
Legal and Audit Fees 17,971
Other 69,377
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TOTAL EXPENSES 742,866
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NET INVESTMENT INCOME 614,929
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REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE D)
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Realized Gain/(Loss) on:
Securities Transactions 3,857,180
Forward Foreign Currency Contracts 476,550
Foreign Currency Transactions (325,110)
----------
Net Realized Gain on Investments
During the Period 4,008,620
----------
Net Change in Unrealized Appreciation of:
Securities 5,589,155
Forward Foreign Currency Contracts (476,550)
Foreign Currency and Net Other Assets 36,673
----------
Net Unrealized Appreciation of Investments
During the Period 5,149,278
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NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 9,157,898
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NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS U.S. $9,772,827
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See Notes to Financial Statements.
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<PAGE>
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Statement of Changes in Net Assets
----------------------------------
Six Months Ended
April 30, 1999 Year Ended
(unaudited) October 31, 1998
Net Investment Income U.S. $ 614,929 U.S. $ 372,446
Net Realized Gain on Investments 4,008,620 5,020,613
Net Unrealized Appreciation
of Investments 5,149,278 5,347,786
------------ ------------
Net Increase in Net Assets
Resulting from Operations 9,772,827 10,740,845
Distributions to Shareholders
from:
Net Investment Income -- (330,594)
Net Realized Gains (5,720,278) (3,526,343)
------------ ------------
Net Increase in Net Assets 4,052,549 6,883,908
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NET ASSETS
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Beginning of Period 107,005,122 100,121,214
------------ ------------
End of Period (Including
Undistributed Net Investment
Income of $614,929 and $0 at
April 30, 1999 and October
31, 1998, respectively) U.S. $111,057,671 U.S. $107,005,122
============ ============
See Notes to Financial Statements.
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<PAGE>
<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, 1999 ----------------------------------------------------------------------------
(Unaudited) 1998+ 1997+ 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period U.S. $21.36 U.S. $19.99 U.S. $16.90 U.S. $13.61 U.S. $10.94 U.S. $ 9.54
----------- ----------- ----------- ----------- ----------- -----------
Net Investment Income 0.12 0.07 0.14 0.14 0.11 0.10
Net Realized and Unrealized Gain
on Investments 1.83 2.07 3.53 3.42 2.67 1.37
----------- ----------- ----------- ----------- ----------- -----------
Net Increase in Net Assets
Resulting from Investment
Operations 1.95 2.14 3.67 3.56 2.78 1.47
Distributions to Shareholders
from:
Net Investment Income -- (0.07) (0.22) (0.14) (0.11) (0.07)
Net Realized Gains (1.14) (0.70) (0.36) (0.13) -- --
----------- ----------- ----------- ----------- ----------- -----------
Total from Distributions (1.14) (0.77) (0.58) (0.27) (0.11) (0.07)
----------- ----------- ----------- ----------- ----------- -----------
Net Asset Value,
End of Period U.S. $22.17 U.S. $21.36 U.S. $19.99 U.S. $16.90 U.S. $13.61 U.S. $10.94
====== ====== ====== ====== ====== ======
Share Price, End of Period U.S. $18.25 U.S. $17.88 U.S. $15.75 U.S. $14.00 U.S. $11.25 U.S. $10.13
====== ====== ====== ====== ====== ======
Total Investment Return* 7.77% 18.42% 17.03% 27.12% 12.46% 16.59%
====== ====== ====== ====== ====== ======
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RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
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Net Assets,
End of Period (000's) U.S. $111,058 U.S. $107,005 U.S. $100,121 U.S. $84,633 U.S. $68,186 U.S. $54,785
Ratio of Net Investment Income
to Average Net Assets 1.10%# 0.33% 0.78% 0.95% 0.94% 0.93%
Ratio of Operating Expenses to
Average Net Assets 1.33%# 1.37% 1.54% 1.63% 1.74% 1.87%
Portfolio Turnover Rate 4% 9% 11% 12% 21% 13%
* Based on share price and reinvestment of income distributions.
+ Per share numbers have been calculated using the average share method, which more appropriately represents the per-share data for
the year since the use of the undistributed income method did not accord with results of operations.
# Annualized
See Notes to Financial Statements.
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</TABLE>
<PAGE>
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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.
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
"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 Investment Advisory Agreement, 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.
Prior to April 1, 1998, the monthly fee was 0.75% on the average weekly net
assets of the Fund.
Effective December 8, 1998, the Fund entered into a Consulting Agreement
with Salomon Brothers Asset Management Inc. (Salomon Brothers Asset
Management). The Fund pays Salomon Brothers Asset Management an annual fee of
$165,000, payable monthly. Prior to December 8, 1998, the Fund was a party to
a U.S. Co-Advisory Agreement dated as of November 28, 1997 (the "U.S. Co-
Advisory Agreement") with Salomon Brothers Asset Management. Under the U.S.
Co-Advisory Agreement, the Fund paid a monthly fee at an annual rate of 0.20%
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.
Effective February 1, 1999, The Chase Manhattan Bank began serving as
custodian of the Fund's assets held outside of Ireland. Prior to February 1,
1999, BankBoston served as the Fund's custodian. From February 1, 1999 through
April 30, 1999, the Fund paid U.S. $30.00 in custodial fees to Chase Manhattan
Bank. Bank of Ireland serves as custodian of the Fund's assets held in
Ireland. During the six months ended April 30, 1999, the Fund paid U.S.
$15,072 in custodial fees to Bank of Ireland.
For the six months ended April 30, 1999, the Fund incurred total brokerage
commissions of U.S. $25,705, of which U.S. $5,017 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, 1999, excluding U.S. government and short-term
investments, aggregated U.S. $3,953,301 and U.S. $8,210,451, respectively.
At April 30, 1999, 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. $56,025,823 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. $3,795,215.
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. PRIVATE PLACEMENT SECURITY:
The following security listed below is a private placement issue with a
limited market available through the issuer:
ACQUISITION VALUE 4/30/99 % OF
SECURITY DATE COST PER UNIT FAIR VALUE NET ASSETS
-------- ---- ---- -------- ---------- ----------
HORIZON TECHNOLOGY 11/26/98 $1,021,064 $1.0465 $939,124 0.846%
* * * *
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 Board of Directors and
upon such terms as the Directors shall determine.
DIVIDEND REINVESTMENT AND CASH PURCHASE PLAN
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
gain 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 gain 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 U.S. $100 to U.S.
$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
gain 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 gain 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 attained.
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.
YEAR 2000
Like other registered investment companies and financial and business
organizations worldwide, the Fund could be adversely affected if computer
systems on which the Fund relies, which primarily include those used by the
Fund, its affiliates and other service providers, are unable to correctly
process date-related information on and after January 1, 2000. This risk is
commonly called the Year 2000 issue. Failure to successfully address the Year
2000 issue could result in interruptions to and other material adverse effects
on the Fund's business and operations. The Fund has commenced a review of the
Year 2000 issue as it may affect the Fund and is taking steps it believes are
reasonably designed to address the Year 2000 issue, although there can be no
assurances that these steps will be sufficient. In addition, there can be no
assurances that the Year 2000 issue will not have an adverse effect on the
companies whose securities are held by the Fund or on global markets or
economies generally.
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<PAGE>
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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
Elizabeth A. Russell - Secretary
Linda J. Hoard - Assistant Secretary
--------------------------- INVESTMENT ADVISOR ---------------------------
Bank of Ireland Asset Management (U.S.) Limited
20 Horseneck Lane
Greenwich, Connecticut 06830
------------------------------- CONSULTANT -------------------------------
Salomon Brothers Asset Management Inc
Seven World Trade Center
New York, New York 10048
------------------------------ ADMINISTRATOR -----------------------------
First Data Investor Services Group, Inc.
101 Federal Street
Boston, Massachusetts 02110
------------------------------- CUSTODIANS -------------------------------
Bank of Ireland
Lower Baggot Street
Dublin 2, Ireland
The Chase Manhattan Bank
Global Investor Services
4 Chase Metrotech Center, 18th Floor
Brooklyn, New York 11245
----------------------- SHAREHOLDER 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 ------------------------
PricewaterhouseCoopers 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.
101 Federal Street, 6th Floor
Boston, Massachusetts 02110
TELEPHONE INQUIRIES SHOULD BE DIRECTED TO:
1-800-GO-TO-IRL (1-800-468-6475)
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