SCUDDER
INVESTMENTS(SM)
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Government Securities Portfolio
Scudder Government
Cash Institutional Shares
Fund #144
Government Cash
Managed Shares
Fund #244
Annual Report
March 31, 2000
The portfolio seeks to provide maximum
current income consistent with stability of
capital.
Principal Underwriter
Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606
Scudder Institutional Funds,
Client Services
Telephone: 800 537 3177
E-mail: [email protected]
http://institutionalfunds.scudder.com
This report is not to be distributed unless
preceded or accompanied by a Government
Securities Portfolio prospectus.
<PAGE>
Dear Shareholder:
Over the past six months, we saw very strong U.S. economic conditions. The
unemployment rate in the U.S. continued to decline and consumer confidence
remained strong. In addition, the economies of both Europe and Asia appeared to
be in recovery. This prompted the Federal Reserve Board ("the Fed") to raise
interest rates a total of 75 basis points (.75%) in this period.
In the fourth quarter we took a defensive position with the Funds. By keeping
average maturity relatively short, we were able to take advantage of additional
rate increases as they occurred. Also in consideration of the uncertainties
associated with the calendar change to a new millennium, including general
concern of whether or not systems would function formally, we felt that we
should be cautious. Therefore, we positioned the Funds to provide liquidity for
investors when and if they needed it. As 1999 came to a close, it became clear
the Fund was appropriately positioned. Also, markets were calm given that the
Fed provided ample liquidity to assure that they functioned routinely in the
final months of 1999.
The first quarter started out quietly after an uneventful passage into the New
Year, but underlying economic and financial trends quickly breached the
tranquility. The Fed raised its target for the Federal Funds rate to 6% through
25 basis point increases in February and March. This was in response to very
strong economic growth, increasingly tight labor markets, and emerging signs of
inflationary pressures, particularly for energy, housing and medical costs.
Our approach was to quickly capture rising rate levels. Premiums for longer
maturities did not provide sufficient income rewards for extension. Therefore,
we emphasized repurchase agreements and other short maturities. The result was
average life declined to the shorter end of our defensive maturity range.
We feel most of the Fed's tightening going forward will occur over the next
several months, perhaps another 50 to 75 basis points. Economic growth is the
catalyst. In this regard, recent stock market volatility may temper both Fed
activities and consumer confidence. The current risk, however, is the Fed may
exert an even higher degree of monetary restraint, especially if the economic
growth remains excessive and inflationary pressures become more apparent.
Considering this outlook, we favor a continuation of a defensive, short average
life policy in this rising rate scenario. This type of strategy will allow us to
offer you attractive yield potential with a high degree of stability, making the
Funds an excellent place for you to invest.
/s/Frank J. Rachwalski
Frank J. Rachwalski
Vice President and Lead Portfolio Manager
Frank Rachwalski is a Managing Director of Scudder Kemper Investments, Inc. and
is Vice President and Lead Portfolio Manager of all Scudder Kemper Money Market
Funds. Mr. Rachwalski holds B.B.A. and M.B.A. degrees from Loyola University,
Chicago.
Fund Results
For the year ended March 31, 2000
- ------------------------------------------------------------
Net Yield
- ------------------------------------------------------------
Government Securities Portfolio:
Institutional Shares 5.75%
- ------------------------------------------------------------
Managed Shares 5.44%
- ------------------------------------------------------------
Notes
Like all money market funds, an investment in this fund is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other government
agency. Although the fund seeks to preserve your investment at $1.00 per share,
it is possible to lose money.
The views expressed in this report reflect those of the portfolio manager only
for the six-month period ending March 31, 2000. The manager's views are subject
to change at any time, based on market and other conditions.
1
<PAGE>
Portfolio of Investments at March 31, 2000
<TABLE>
<CAPTION>
Principal
Amount Value
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Government Securities Portfolio
- ---------------------------------------------------------------------------------------------------------------------
Repurchase Agreements -- 47.8%
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Bear, Stearns Cos., Inc.
5.87%, 4/13/2000, to be repurchased at $10,021,197 $ 10,000,000 $ 10,000,000
- ---------------------------------------------------------------------------------------------------------------------
Bear, Stearns Cos., Inc.
5.95%, 4/5/2000, to be repurchased at $10,008,264 10,000,000 10,000,000
- ---------------------------------------------------------------------------------------------------------------------
Bear, Stearns Cos., Inc.
6.30%, 4/3/2000, to be repurchased at $15,007,875 15,000,000 15,000,000
- ---------------------------------------------------------------------------------------------------------------------
Chase Securities, Inc.
6.12%, 4/5/2000, to be repurchased at $35,029,750 35,000,000 35,000,000
- ---------------------------------------------------------------------------------------------------------------------
Goldman Sachs Cos., Inc.
6.07%, 4/3/2000, to be repurchased at $12,006,070 12,000,000 12,000,000
- ---------------------------------------------------------------------------------------------------------------------
Goldman Sachs Cos., Inc.
6.08%, 4/4/2000, to be repurchased at $13,008,782 13,000,000 13,000,000
- ---------------------------------------------------------------------------------------------------------------------
Goldman Sachs Cos., Inc.
6.09%, 4/6/2000, to be repurchased at $30,030,450 30,000,000 30,000,000
- ---------------------------------------------------------------------------------------------------------------------
Morgan Stanley, Dean Witter & Co.
5.86%, 4/11/2000, to be repurchased at $10,017,906 10,000,000 10,000,000
- ---------------------------------------------------------------------------------------------------------------------
Morgan Stanley, Dean Witter & Co.
5.87%, 4/17/2000, to be repurchased at $25,069,299 25,000,000 25,000,000
- ---------------------------------------------------------------------------------------------------------------------
Morgan Stanley, Dean Witter & Co.
5.91%, 4/3/2000, to be repurchased at $20,009,850 20,000,000 20,000,000
- ---------------------------------------------------------------------------------------------------------------------
State Street Bank and Trust Company,
6.05%, 4/3/2000, to be repurchased at $15,770,947 15,763,000 15,763,000
- ---------------------------------------------------------------------------------------------------------------------
Total Repurchase Agreements (Cost $195,763,000) (b) 195,763,000
- ---------------------------------------------------------------------------------------------------------------------
Short-Term Notes -- 52.2%
- ---------------------------------------------------------------------------------------------------------------------
Federal Farm Credit Bank, 6.36%*, 4/4/2000 15,000,000 14,996,327
- ---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, 5.12%, 5/17/2000 13,000,000 13,000,000
- ---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, 6.05%*, 4/1/2000 14,500,000 14,499,922
- ---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, 6.05%*, 4/1/2000 21,000,000 20,999,831
- ---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, 6.27%*, 4/5/2000 10,000,000 10,003,483
- ---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank, 6.57%, 2/9/2001 4,500,000 4,500,405
- ---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 5.75%, 4/4/2000 30,000,000 29,985,700
The accompanying notes are an integral part of the financial statements.
2
<PAGE>
Principal
Amount Value
- ---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 5.82%*, 4/10/2000 $ 10,000,000 $ 9,992,628
- ---------------------------------------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corp., 5.88%*, 4/18/2000 30,000,000 29,997,435
- ---------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 5.79%, 4/6/2000 12,637,000 12,626,943
- ---------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 5.93%*, 6/6/2000 2,000,000 1,999,478
- ---------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 6.17%*, 4/1/2000 15,000,000 14,998,029
- ---------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 6.55%, 3/20/2001 4,000,000 3,999,884
- ---------------------------------------------------------------------------------------------------------------------
Federal National Mortgage Association, 6.58%, 2/22/2001 4,500,000 4,495,635
- ---------------------------------------------------------------------------------------------------------------------
Overseas Private Investment Corp., 5.85%*, 4/2/2000 5,000,000 5,000,907
- ---------------------------------------------------------------------------------------------------------------------
Overseas Private Investment Corp., 5.85%*, 4/2/2000 13,000,000 12,999,189
- ---------------------------------------------------------------------------------------------------------------------
Student Loan Marketing Association, 6.65%*, 4/4/2000 10,000,000 10,010,582
- ---------------------------------------------------------------------------------------------------------------------
Total Short-Term Notes (Cost $214,106,378) 214,106,378
- ---------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $409,869,378) (a) $ 409,869,378
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
Interest rates represent annualized yield to date of maturity, except for
floating rate securities described below.
(a) Cost for federal income tax purposes was $409,869,378.
(b) Repurchase agreements are fully collateralized by U.S. Treasury or
Government agency securities.
* Floating rate notes are securities whose yields vary with a designated
market index or market rate, such as the coupon-equivalent of the
Treasury bill rate. These securities are shown at their current rate as
of March 31, 2000. The dates shown represent the demand date or next
interest rate change date.
The accompanying notes are an integral part of the financial statements.
3
<PAGE>
Financial Statements
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities
- ---------------------------------------------------------------------------------------------------------------------
As of March 31, 2000
- ---------------------------------------------------------------------------------------------------------------------
Assets
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Investments in securities, at value (for cost, see accompanying portfolio of investments):
Short-term notes $ 214,106,378
- ---------------------------------------------------------------------------------------------------------------------
Repurchase agreements 195,763,000
- ---------------------------------------------------------------------------------------------------------------------
Cash --
- ---------------------------------------------------------------------------------------------------------------------
Interest receivable 2,909,309
- ---------------------------------------------------------------------------------------------------------------------
Other assets --
--------------
- ---------------------------------------------------------------------------------------------------------------------
Total assets 412,778,687
- ---------------------------------------------------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------------------------------------------------
Due to custodian bank 169,373
- ---------------------------------------------------------------------------------------------------------------------
Dividends payable 709,866
- ---------------------------------------------------------------------------------------------------------------------
Payable for Fund shares redeemed 500
- ---------------------------------------------------------------------------------------------------------------------
Accrued management fee 36,097
- ---------------------------------------------------------------------------------------------------------------------
Other accrued expenses and payables 259,249
--------------
- ---------------------------------------------------------------------------------------------------------------------
Total liabilities 1,175,085
- ---------------------------------------------------------------------------------------------------------------------
Net assets, at value $ 411,603,602
- ---------------------------------------------------------------------------------------------------------------------
Net Asset Value
- ---------------------------------------------------------------------------------------------------------------------
Institutional Shares
- ---------------------------------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding 106,149,790
- ---------------------------------------------------------------------------------------------------------------------
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized 106,149,790
- ---------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
Managed Shares
- ---------------------------------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding 41,161,412
- ---------------------------------------------------------------------------------------------------------------------
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized 41,161,412
- ---------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
Service Shares
- ---------------------------------------------------------------------------------------------------------------------
Net assets applicable to shares outstanding 264,292,400
- ---------------------------------------------------------------------------------------------------------------------
Shares outstanding of capital stock, $.01 par value, unlimited number of shares authorized 264,292,400
- ---------------------------------------------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share (net assets/shares outstanding) $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Statement of Operations
- ---------------------------------------------------------------------------------------------------------------------
Year ended March 31, 2000
- ---------------------------------------------------------------------------------------------------------------------
Investment Income
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Interest $ 19,706,090
--------------
- ---------------------------------------------------------------------------------------------------------------------
Expenses:
- ---------------------------------------------------------------------------------------------------------------------
Management fee 560,500
- ---------------------------------------------------------------------------------------------------------------------
Services to shareholders 50,545
- ---------------------------------------------------------------------------------------------------------------------
Custodian fees 39,915
- ---------------------------------------------------------------------------------------------------------------------
Administrative services fees 364,436
- ---------------------------------------------------------------------------------------------------------------------
Auditing 34,666
- ---------------------------------------------------------------------------------------------------------------------
Legal 9,313
- ---------------------------------------------------------------------------------------------------------------------
Trustees' fees and expenses 23,596
- ---------------------------------------------------------------------------------------------------------------------
Reports to shareholders 15,887
- ---------------------------------------------------------------------------------------------------------------------
Registration fees 97,501
- ---------------------------------------------------------------------------------------------------------------------
Other 11,675
--------------
- ---------------------------------------------------------------------------------------------------------------------
Total expenses, before expense reductions 1,208,034
- ---------------------------------------------------------------------------------------------------------------------
Expense reductions (280,787)
--------------
- ---------------------------------------------------------------------------------------------------------------------
Total expenses, after expense reductions 927,247
- ---------------------------------------------------------------------------------------------------------------------
Net investment income 18,778,843
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 18,778,843
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- ---------------------------------------------------------------------------------------------------------------------
Year Ended March 31,
2000 1999
- ---------------------------------------------------------------------------------------------------------------------
Increase (Decrease) in Net Assets
- ---------------------------------------------------------------------------------------------------------------------
Operations:
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income $ 18,778,843 $ 18,029,046
-----------------------------
- ---------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 18,778,843 18,029,046
-----------------------------
- ---------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income (Service Shares) (17,276,445) (18,029,046)
-----------------------------
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (Institutional Shares) (1,125,511) --
-----------------------------
- ---------------------------------------------------------------------------------------------------------------------
Net investment income (Managed Shares) (376,887) --
- ---------------------------------------------------------------------------------------------------------------------
Fund share transactions at net asset value of $1.00 per share:
Service Shares:
- ---------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 1,052,619,885 1,521,330,211
- ---------------------------------------------------------------------------------------------------------------------
Reinvestment of distributions 13,956,065 14,748,941
- ---------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (1,292,410,523)(1,358,146,000)
-----------------------------
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions (225,834,573) 177,933,152
- ---------------------------------------------------------------------------------------------------------------------
Institutional Shares (a):
- ---------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 125,102,009 --
- ---------------------------------------------------------------------------------------------------------------------
Reinvestment of distributions 61,095 --
- ---------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (19,013,314) --
-----------------------------
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions 106,149,790 --
- ---------------------------------------------------------------------------------------------------------------------
Managed Shares (a):
- ---------------------------------------------------------------------------------------------------------------------
Proceeds from shares sold 60,507,562 --
- ---------------------------------------------------------------------------------------------------------------------
Reinvestment of distributions 12,963 --
- ---------------------------------------------------------------------------------------------------------------------
Cost of shares redeemed (19,359,113) --
-----------------------------
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from Fund share transactions 41,161,412 --
-----------------------------
- ---------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets (78,523,371) 177,933,152
- ---------------------------------------------------------------------------------------------------------------------
Net assets at beginning of period 490,126,973 312,193,821
- ---------------------------------------------------------------------------------------------------------------------
Net assets at end of period $ 411,603,602 $ 490,126,973
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) For the period November 17, 1999 (commencement of operations) to March
31, 2000.
The accompanying notes are an integral part of the financial statements.
6
<PAGE>
Financial Highlights
The following tables include selected data for a share outstanding throughout
each period and other performance information derived from the financial
statements and market price data.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Government Securities Portfolio -- Institutional Shares
- ---------------------------------------------------------------------------------------------------------------------
2000(a)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Net asset value, beginning of period $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
Net investment income .02
- ---------------------------------------------------------------------------------------------------------------------
Less distributions from net investment income (.02)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
Total return (%) 2.07**
- ---------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 106,150
- ---------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) .22*
- ---------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) .22*
- ---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%) 5.75*
- ---------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
Government Securities Portfolio -- Managed Shares
- ---------------------------------------------------------------------------------------------------------------------
2000(a)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
Net investment income .02
- ---------------------------------------------------------------------------------------------------------------------
Less distributions from net investment income (.02)
- ---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00
- ---------------------------------------------------------------------------------------------------------------------
Total Return (%) 1.96**
- ---------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets and Supplemental Data
- ---------------------------------------------------------------------------------------------------------------------
Net assets, end of period ($ thousands) 41,161
- ---------------------------------------------------------------------------------------------------------------------
Ratio of expenses before expense reductions (%) .51*
- ---------------------------------------------------------------------------------------------------------------------
Ratio of expenses after expense reductions (%) .51*
- ---------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (%) 5.44*
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Annualized
** Not annualized
(a) For the period November 17, 1999 (commencement of operations) to March
31, 2000.
The accompanying notes are an integral part of the financial statements.
7
<PAGE>
Notes to Financial Statements
1. Significant Accounting Policies
Investors Cash Trust -- Government Securities Portfolio (the "Fund") is
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), as an open-end, diversified management investment company organized as a
Massachusetts business trust. The Fund currently offers multiple classes of
shares that include Service Shares, Institutional Shares, and Managed Shares.
Certain detailed financial information for the Service Shares is provided
separately and is available upon request.
Investment income, realized and unrealized gains and losses, and certain
fund-level expenses and expense reductions, if any, are borne pro rata on the
basis of relative net assets by the holders of all classes of shares except that
each class bears certain expenses unique to that class such as distribution
services, shareholder services, administrative services and certain other class
specific expenses. Differences in class expenses may result in payment of
different per share dividends by class. All shares of the Fund have equal rights
with respect to voting subject to class specific arrangements.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. The Fund values all portfolio securities utilizing the
amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act
and pursuant to which the Fund must adhere to certain conditions. Under this
method, which does not take into account unrealized gains or losses on
securities, an instrument is initially valued at its cost and thereafter assumes
a constant accretion/amortization to maturity of any discount/premium.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount
of which at the time of purchase and each subsequent business day is required to
be maintained at such a level that the market value is equal to at least the
principal amount of the repurchase price plus accrued interest.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code, as amended, which are applicable to regulated
investment companies and to distribute all of its taxable income to its
shareholders. Accordingly, the Fund paid no federal income taxes and no federal
income tax provision was required.
Distribution of Income and Gains. All of the net investment income of the Fund
is declared as a daily dividend and is distributed to shareholders monthly. Net
investment income includes all realized gains (losses) on portfolio securities.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Realized gains and losses from investment transactions are recorded on an
identified cost basis. All discounts and premiums are accreted/amortized for
both tax and financial reporting purposes.
Expenses. Expenses arising in connection with a specific portfolio are allocated
to that portfolio. Other Fund expenses are allocated between the portfolios in
proportion to their relative net assets.
8
<PAGE>
2. Transactions with Affiliates
Management Agreement. The Fund has a management agreement with Scudder Kemper
Investments, Inc. ("Scudder Kemper") and pays a monthly investment management
fee of 1/12 of the annual rate of .15% of average daily net assets. For the year
ended March 31, 2000, the Fund incurred the following management fees:
Management
Management fee waived
fee by Scudder Effective
imposed ($) Kemper ($) rate (%)
- --------------------------------------------------------------------------------
Government Securities Portfolio 560,500 -- .15
- --------------------------------------------------------------------------------
Administrative Services Agreement. The Fund has an administrative services
agreement with Kemper Distributors, Inc. ("KDI"). KDI provides information and
administrative services to the Service Shares and Managed Shares of the Fund at
an annual fee of up to .25% of average daily net assets. For the year ended
March 31, 2000, the Fund incurred fees as follows:
ASF fee Unpaid at
ASF fee waived by March 31,
imposed ($) KDI ($) 2000 ($)
- ------------------------------------------------------------------------------
Service Shares 72,364 274,312 30,530
- ------------------------------------------------------------------------------
Managed Shares 17,760 -- --
- ------------------------------------------------------------------------------
KDI has related service agreements with various firms to provide cash management
and other services for Fund shareholders. KDI pays these firms at an annual rate
of up to .15% of average daily net assets.
Shareholder Services Agreement. Pursuant to a services agreement with the Fund's
transfer agent, Kemper Service Company ("KSvC") is the shareholder service agent
of the Fund. For the year ended March 31, 2000, KSvC received shareholder
services fees of $50,545, of which $18,138 was unpaid at March 31, 2000.
Officers and Trustees. Certain officers or trustees of the Fund are also
officers or directors of Scudder Kemper. For the year ended March 31, 2000, the
Fund made no payments to its officers and incurred trustees' fees of $23,596 to
independent trustees.
3. Expense Off-Set Arrangements
The Fund has entered into an arrangement with its custodian and transfer agent
whereby credits realized as a result of uninvested cash balances were used to
reduce a portion of the Fund's expenses. During the period, the Fund's custodian
and transfer agent fees were reduced by $5,471 and $1,059, respectively.
4. Line of Credit
The Fund and several Kemper funds (the "Participants") share in a $750 million
revolving credit facility for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. The Participants are charged an annual commitment fee
which is allocated pro rata among each of the Participants. Interest is
calculated based on the market rates at the time of the borrowing. The Fund may
borrow up to a maximum of 33 percent of its net assets under the agreement.
9
<PAGE>
Report of Independent Auditors
The Board of Trustees and Shareholders
Investors Cash Trust
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Investors Cash Trust (comprising the
Government Securities and Treasury Portfolios) (the "Fund"), as of March 31,
2000, the related statements of operations for the year then ended, the changes
in net assets for each of the two years in the period then ended, and the
financial highlights for each of the fiscal years since 1996. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of March 31, 2000, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting Investors Cash Trust at March 31,
2000, the results of their operations for the year then ended, the changes in
their net assets for each of the two years in the period then ended, and the
financial highlights for each of the fiscal years since 1996, in conformity with
accounting principles generally accepted in the United States.
Chicago, Illinois /s/Ernst + Young LLP
May 9, 2000
10
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