[Logo]
The Argentina Fund, Inc.
Annual Report
October 31, 1997
A closed-end investment company seeking long-term capital appreciation through
investments primarily in the equity securities of Argentine issuers.
The Argentina Fund, Inc.
<PAGE>
[Logo] The Argentina Fund, Inc.
================================================================================
Investment objective and policies
o long-term capital appreciation through investment primarily in equity
securities of Argentine issuers
Investment characteristics
o investments in a broad spectrum of Argentine industries
o non-diversified closed-end investment company
o a vehicle for international diversification through participation in the
Argentine economy
General Information
================================================================================
Executive Offices
The Argentina Fund, Inc.
345 Park Avenue
New York, NY 10154
For Fund information: 1-800-349-4281
Transfer Agent, Registrar and Dividend
Reinvestment Plan Agent
For account information: 1-800-426-5523
State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
Legal Counsel
Willkie Farr & Gallagher
Custodian
Brown Brothers Harriman & Co.
Independent Accountants
Coopers & Lybrand L.L.P.
New York Stock Exchange Symbol -- AF
Contents
================================================================================
In Brief 3
Letter to Shareholders 3
Investment Summary 6
Portfolio Summary 7
Investment Portfolio 8
Financial Statements 11
Financial Highlights 14
Notes to Financial Statements 15
Report of Independent Accountants 19
Shareholder Meeting Results 20
Dividend Reinvestment and
Cash Purchase Plan 21
Investment Manager 23
Advisory Board Back cover
Directors and Officers Back cover
This report is sent to the shareholders of The Argentina Fund, Inc. for their
information. It is not a prospectus, circular, or representation intended for
use in the purchase or sale of the Fund or of any securities mentioned in the
report.
2
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[Logo] The Argentina Fund, Inc.
In Brief
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o The Argentina Fund, Inc. provided a 17.94% total return for the 12-month
period ended October 31, 1997, based on net asset value. The price of the
Fund's publicly traded shares also increased, contributing to a 9.84% return
for the period.
o The turmoil in Southeast Asia took its toll on Latin America late this year,
as investors looked to reduce their overall risk profile.
o The Fund increased its cash and cash equivalents position at the end of the
year, reducing its exposure to electric utility companies and focusing its
purchases on companies with strong cash flows and dollar-based revenues.
o The Argentine economy outpaced consensus forecasts during the year and is
expected to grow 4 - 5% in 1998. A newly elected Congress is expected to
leave existing economic policy intact.
Letter to Shareholders
================================================================================
Dear Shareholders:
The Argentina Fund, Inc., finished the 1997 fiscal year with a 17.94% total
return, based on an increase in net asset value (NAV) and a $0.33 per share
income distribution. The Fund's NAV fluctuated over the 12-month period, ending
at $14.60 per share on October 31, 1997, $1.90 more than at the start of the
year. The unmanaged IFC Argentina Global Total Return Index, the Fund's
benchmark index, gained 20.77% over the same period. The price of the Fund's
shares as quoted on the New York Stock Exchange ended the period at $12.312 per
share, contributing to a return of 9.84%.
Asian Turmoil Reaches Latin America
The strong performance of the Argentine economy throughout 1997, which was
reflected in the stock market, suffered a setback at the end of the Fund's
fiscal year. The devaluation beginning in July of several Southeast Asian
currencies, rising interest rates, concerns over widening current account
deficits, and weakened banking systems led to a stock market sell-off in the
region that eventually spread to Latin America. The weak side of the
globalization of economies came to the fore, as investors reduced their risk
profile worldwide. In addition to a reduced appetite for risk, investors were
forced to take profits in their Latin American holdings to raise cash to meet
redemptions. Finally, many investors have legitimate concerns over the
sustainability of the current economic programs in Brazil, Argentina's neighbor
and largest trading partner, given Brazil's currently high interest rates,
overvalued currency, and burgeoning current account deficit in the environment
of reduced global liquidity.
As we write, neither the outcome of the situation in Asia nor its ramifications
for Latin America are yet clear. Further pressure on the currencies of Asian
countries -- particularly Hong Kong, which has a Currency Board similar to
Argentina; and South Korea, the 11th-largest economy in the world -- would have
severely negative implications for Brazil, and Argentina would be caught in its
downdraft. We would emphasize, however, that the problems currently plaguing the
Asian economies -- a speculative real estate bubble, a severely weakened banking
sector, excess capacity, and significant overindebtedness at both the corporate
3
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[Logo] The Argentina Fund, Inc.
Letter to Shareholders
================================================================================
and government levels -- differ substantially from the situation in Argentina
and Brazil. Both Argentina and Brazil have a relatively strong banking system, a
fairly low level of indebtedness at the corporate sector, and only recently have
begun to produce at levels approaching full capacity. This relatively more
positive situation is due primarily to the crisis brought about by the 1994
devaluation of the Mexican peso, which forced Argentina to strengthen its
banking system and to reinforce its commitment to the Convertibility Plan,
whereby the monetary base of the economy is supported 100% by the country's
dollar reserve position. In Brazil, the implementation of the Real Plan in 1994
had begun to have a positive impact on the economic fundamentals of the country,
although concern had grown over the lack of progress at the government level in
the past six months. While we believe a positive outcome is likely, given
Brazil's recent measures to reduce its fiscal deficit, high interest rates --
due both to the heightened concerns over risk as well as Brazil's efforts to
protect its foreign reserves -- will lead to slower growth in both countries.
Argentine Economy Still on Track
Although growth estimates are being revised downward for 1998, the Argentine
economy consistently beat expectations in the year just ended. After the brief
but painful recession of 1995, the economy grew at a rate of 4.3% in 1996 and is
expected to grow a remarkable 7.3% this year. Consensus forecasts for 1998,
while still preliminary, are in the 4-5% range currently.
One of the primary drivers of economic growth has been the return of liquidity
after the severe monetary contraction of 1995. The macroeconomic stability and
low inflation resulting from the country's Convertibility Plan have greatly
increased business confidence and encouraged higher capital spending. The
integration of Argentina with other Latin American economies through the
Mercosur free-trade block and high returns on investment in Argentina's natural
resource sector have led to increased direct foreign investment, which in turn
has contributed to a strong recovery in industrial production and fueled a
rebound in the stock market. After declining more than 16% in 1995, gross fixed
investment increased by 8% in 1996 and is forecast to grow by more than 23% this
year. The strength of investment growth since the introduction of Convertibility
has been one of the major factors behind the country's sharp increase in
productivity, which has allowed the economy to expand without an increase in
inflation. This productivity improvement has not yet been apparent in the small-
and medium-sized business sector due to an absence of competitively priced
financing. While the banking sector has continually indicated its desire to
expand its credit activities into this area, to date there has been little
success, given the nascent credit analysis process at most banks. The increasing
foreign ownership of Argentine banks should bring some expertise to this area
over time, which should positively affect job creation and reduce unemployment.
One area of success has been the development of longer-term mortgage financing,
which has led to growth in the real estate and construction sectors.
The fact that growth in Argentina increasingly is the result of long-term
productive assets -- as opposed to a short-term boom in domestic consumption --
has lessened the market's perception of risk and is leading to a decline in
interest rates. With the resumption of healthy growth last year, tax revenues
have grown significantly and the government deficit has declined from $6.4
billion in 1996 to an estimated $2.8 billion this year.
A Change in the Political Landscape
Recent Congressional elections in Argentina resulted in a significant victory
for the Partido Alianza, the coalition party formed to oppose the Partido
Justicialista of President Menem. The Alianza was created as a coalition of two
separate political organizations, the Union Civica Radical party and the Frepaso
4
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[Logo] The Argentina Fund, Inc.
Letter to Shareholders
================================================================================
party. The Alianza won 46 of the 127 seats contested in the lower house of
Congress -- including the politically important province of Buenos Aires and the
city of Buenos Aires -- and 46.7% of votes nationwide, unseating the Partido
Justicialista's majority. While the change in the balance of power within
Congress could slow the passage of certain major initiatives, such as labor and
judicial reform, we do not believe that any significant changes in the current
economic program are likely. In fact, the Alianza stands firmly behind most of
the economic policies of the current government -- especially continued openness
of the economy and the Law of Convertibility -- campaigning instead on the
issues of better management within government, the rooting out of corruption,
and equality of economic growth. Much of the efforts of both parties going
forward will be directed toward the Presidential elections of 1999.
Fund Strategy
The Argentina Fund continues to capitalize on several long-term investment
themes, including the development of the country's natural resources and a focus
on companies benefiting from foreign investment.
During the first half of the fiscal year, the Fund's electric utility weighting
was reduced, based on our expectations for lower utility rates and increased
competition. With the proceeds, we increased the Fund's weighting in the
telecommunications sector, taking advantage of what we believed were attractive
valuations. Anticipating a spillover effect from declines in other markets, we
raised the Fund's cash position during the late summer and early fall by taking
profits in some of our larger holdings, which we believed had become fully
valued. We reduced our bank holdings slightly in anticipation of the initial
public offering of Banco Rio, in which we took a position. We increased our
position in some smaller, less liquid securities in the autoparts and food
sectors that were trading at attractive valuations, reducing our holdings in a
less well-positioned auto manufacturer. The Fund's strategy of investing in
companies with strong cash flows and dollar-based revenues paid off during the
recent downturn. YPF, the Fund's largest holding, with a P/E ratio of 10.9 based
on next year's earnings, declined just 0.47% in the quarter ended October 31,
1997, compared with 22% for the Merval index.
A Bumpy Road to a Brighter Future
Although much progress has been made toward economic self-sufficiency,
Argentina, with foreign financing requirements of $12 billion in long-term
credit and $3 billion in short-term credit in 1998, is still dependent on strong
global liquidity flows and the economic strength of Brazil. We expect continued
market volatility over the short-term, focused around the economic strength of
Brazil and coincident with a rise in short-term interest rates and a moderate
decline in economic activity.
Longer-term, we believe the outlook for Argentine equities is quite good. The
country's banks are stronger than during the 1994-95 emerging-markets crisis,
there is less corporate and public debt, and Convertibility remains intact.
Argentina's rapid economic growth is investment-led, tax revenues are up, and
interest rates should -- once the markets settle down -- resume their downward
trajectory. As Argentina's pension fund system continues to grow, domestic
savings should increase and the economy should become less reliant on foreign
capital flows.
As always, if you have any questions about the Fund, please do not hesitate to
contact us at 1-800-349-4281. Thank you for your continued interest in The
Argentina Fund, Inc.
Respectfully,
/s/Nicholas Bratt
Nicholas Bratt
Chairman of the Board
and President
5
<PAGE>
[Logo] THE ARGENTINA FUND, INC.
INVESTMENT SUMMARY AS OF OCTOBER 31, 1997
- -------------------------------------------------------------------------------
HISTORICAL
INFORMATION TOTAL RETURN (%)
LIFE OF FUND ---------------------------------------------------------------
MARKET VALUE NET ASSET VALUE (a) INDEX (b)
------------------- -------------------- -------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
------------------- -------------------- -------------------
CURRENT QUARTER -24.81 -- -14.52 -- -17.94 --
ONE YEAR 9.84 9.84 17.94 17.94 20.77 20.77
THREE YEAR -5.91 -2.01 12.30 3.94 20.53 6.23
FIVE YEAR 46.61 7.95 78.96 12.34 117.08 16.46
LIFE OF FUND* 18.11 2.80 53.07 7.31 48.28 6.78
- -------------------------------------------------------------------------------
PER SHARE INFORMATION AND RETURNS (a)
YEARLY PERIODS ENDED OCTOBER 31
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) with the exact
data points listed in the table below.
1991* 1992 1993 1994 1995 1996 1997
----------------------------------------------------------
NET ASSET VALUE... $10.99 $ 9.35 $12.69 $14.53 $10.27 $12.70 $14.60
INCOME DIVIDENDS.. $ -- $ .06 $ .05 $ .14 $ .27 $ .33 $ .33
CAPITAL GAINS
DISTRIBUTIONS..... $ -- $ -- $ .09 $ .02 $ .46 $ -- $ --
TOTAL RETURN (%).. .09 -14.55 37.55 15.58 -24.94 26.86 17.94
(a) Total investment returns reflect changes in net asset value per
share during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the
Fund based on market price.
(b) IFC Argentina Global Total Return Index U.S.$.
* The Fund commenced operations on October 22, 1991. Index return begins
on October 31, 1991.
PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE OF THE
FUND.
6
<PAGE>
[Logo] THE ARGENTINA FUND, INC.
PORTFOLIO SUMMARY AS OF OCTOBER 31, 1997
- ---------------------------------------------------------------------------
DIVERSIFICATION
Equity Securities 95%
Cash Equivalents 5%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the
above table.
- ---------------------------------------------------------------------------
SECTORS
Energy 25%
Communications 17%
Consumer Staples 16%
Financial 13%
Utilities 12%
Metals & Minerals 9%
Construction 4%
Durables 2%
Other 2%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the
above table.
- ---------------------------------------------------------------------------
TEN LARGEST EQUITY HOLDINGS
1. YPF S.A.
2. TELECOM ARGENTINA S.A.
3. TELEFONICA DE ARGENTINA S.A.
4. PEREZ COMPANC S.A.
5. QUILMES INDUSTRIAL S.A.
6. SIDERAR SAIC
7. INVERSIONES Y REPRESENTACIONES S.A.
8. METROGAS S.A.
9. LOMA NEGRA CIA, S.A.
10. NOBLEZA PICCARDO
7
<PAGE>
[Logo] The Argentina Fund, Inc.
Investment Portfolio as of October 31, 1997
<TABLE>
=================================================================================================================
<CAPTION>
Principal Market
Industry Amount ($) Value ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REPURCHASE AGREEMENTS 1.7%
2,264,000 Repurchase Agreement with Donaldson, Lufkin &
Jenrette dated 10/31/97 at 5.7% to be
repurchased at $2,265,075 on 11/3/97,
collateralized by a $2,221,000 U.S. Treasury
Bond, 6.375%, 7/15/99 (Cost $2,264,000)............ 2,264,000
-----------
- -----------------------------------------------------------------------------------------------------------------
SHORT-TERM NOTES 3.7%
5,000,000 Federal Home Loan Bank Discount Note, 11/3/97
(Cost $4,998,472) ................................. 4,998,472
-----------
- -----------------------------------------------------------------------------------------------------------------
PREFERRED STOCKS 2.3%
Shares
---------
COMMUNICATIONS
Telephone/Communications 58,545 Nortel Inversora "A" (ADR)(b) ...................... 744,692
118,685 Nortel Inversora "B" (ADR)(b) ...................... 2,373,700
-----------
Total Preferred Stocks (Cost $2,161,637) ............ 3,118,392
-----------
- -----------------------------------------------------------------------------------------------------------------
COMMON STOCKS 92.3%
CONSUMER DISCRETIONARY 0.3%
Specialty Retail 103,822 Grimoldi S.A. "B"*(b) .............................. 340,813
CONSUMER STAPLES 15.6%
Alcohol & Tobacco 7.5% 192,500 Companhia Cervejaria Brahma (ADR)(c) ............... 2,478,438
574,972 Massalin Particulares S.A.(b) ...................... 3,106,728
838,919 Nobleza Piccardo S.A. ............................... 4,448,962
-----------
10,034,128
-----------
Food & Beverage 8.1% 1,418,627 Bagley y Cia Ltd. S.A."B" ........................... 2,498,295
264,323 CINBA S.A. .......................................... 396,725
574,280 Cresud S.A. Comercial* .............................. 1,051,569
529,250 Quilmes Industrial S.A. ............................. 6,615,625
188,400 Quimica Estrella "B"* ............................... 241,298
-----------
10,803,512
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
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[Logo] The Argentina Fund, Inc.
Investment Portfolio
<TABLE>
=================================================================================================================
<CAPTION>
Market
Industry Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
COMMUNICATIONS 14.0%
Telephone / Communications 461,232 Telecom Argentina S.A. "B"(ADR) ..................... 11,674,935
2,498,000 Telefonica de Argentina S.A. "B" .................... 7,048,624
-----------
18,723,559
-----------
FINANCIAL 12.6%
Banks 7.6% 111,000 Banco Bradesco S.A. (ADR) (c) ....................... 874,124
416,688 Banco Frances del Rio de la Plata ................... 3,439,757
154,000 Banco Rio de la Plata S.A. (ADR)* ................... 1,617,000
691,570 Banco de Galicia y Buenos Aires "B" ................. 4,290,330
-----------
10,221,211
-----------
Other Financial Companies 0.8% 1,000,000 BI S.A. "A" (b) ..................................... 1,080,000
-----------
Real Estate 4.2% 166,886 Inversiones y Representaciones S.A. (GDR) ........... 5,632,403
-----------
DURABLES 2.2%
Automobiles 183,750 Compania Interamericana de Automoviles S.A. ......... 354,852
41,000 Mirgor Sacifia"C"* .................................. 1,464,586
350,000 Mirgor Sacifia "C" (ADR)* .......................... 1,120,000
-----------
2,939,438
-----------
MANUFACTURING 1.4%
Chemicals 1,295,394 Atanor S.A. "D" 1,840,573
-----------
ENERGY 23.5%
Oil & Gas Production 6.5% 1,073,702 Perez Companc S.A. "B" .............................. 6,725,443
100,000 Petroleo Brasileiro S.A. (ADR)(c) .................. 1,950,000
-----------
8,675,443
-----------
Oil Companies 17.0% 1,959,700 Astra CAPSA ......................................... 3,058,983
620,000 YPF S.A. "D" (ADR) .................................. 19,840,000
-----------
22,898,983
-----------
METALS & MINERALS 8.2%
Steel & Metals 70,000 Companhia Vale do Rio Doce (ADR)(c) ................ 1,365,000
1,270,505 Dalmine Siderca ..................................... 3,114,622
1,263,541 Siderar "A" SAIC .................................... 6,574,391
-----------
11,054,013
-----------
CONSTRUCTION 3.5%
Building Materials 3.4% 150,624 Loma Negra Cia. S.A.*(b) ........................... 4,518,720
-----------
Miscellaneous 0.1% 262,240 Guillermo Decker S.A."B"* .......................... 183,679
-----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
[Logo] The Argentina Fund, Inc.
Investment Portfolio
<TABLE>
=================================================================================================================
<CAPTION>
Market
Industry Shares Value ($)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UTILITIES 11.0%
Electric Utilities 4.2% 675,700 Capex S.A. "A" ...................................... 3,583,378
240,824 Central Costanera "B" ............................... 556,640
207,996 Central Puerto S.A. "B" ............................. 457,868
77,143 Electricidad Argentina S.A. "A" (ADR)*(b) .......... 1,080,002
-----------
5,677,888
-----------
Natural Gas Distribution 6.8% 672,675 MetroGas S.A. "B" (ADR) ............................. 4,876,894
2,256,215 Transportadora de Gas del Sur "B" ................... 4,289,404
-----------
9,166,298
-----------
TOTAL COMMON STOCKS (Cost $104,392,614) ............ 123,790,661
-----------
- -----------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $113,816,723) (a) .......................... 134,171,525
===========
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES TO INVESTMENT PORTFOLIO
* Non-income producing security.
(a) The cost for federal income tax purposes was $113,948,476. At October 31,
1997, net unrealized appreciation for all securities based on tax cost was
$20,223,049. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $30,398,470, and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$10,175,421.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $13,244,655 (9.79% of net assets).
Their values have been estimated by the Valuation Committee in the absence
of readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of these
securities at October 31, 1997 aggregated $13,498,471. These securities may
also have certain restrictions as to resale.
(c) Investments in Brazilian companies aggregating $6,667,562 (4.9% of net
assets).
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
[Logo] The Argentina Fund, Inc.
Financial Statements
================================================================================
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997
- --------------------------------------------------------------------------------
<S> <C>
ASSETS
Investments, at market (identified cost $113,816,723) .. $134,171,525
Cash ................................................... 365
Receivable for investments sold ........................ 1,477,440
Dividends and interest receivable ...................... 52,459
Other assets ........................................... 1,781
------------
Total assets ....................................... 135,703,570
LIABILITIES
Payables:
Accrued management fee ............................... $160,990
Other payables and accrued expenses .................. 215,260
--------
Total liabilities .................................. 376,250
------------
Net assets, at market value ............................ $135,327,320
============
NET ASSETS
Net assets consist of:
Undistributed net investment income $1,034,890
Net unrealized appreciation (depreciation) from:
Investments 20,354,802
Argentine Peso related transactions (266)
Accumulated net realized loss (48,105)
Paid-in capital 113,985,999
------------
Net assets, at market value $135,327,320
============
NET ASSET VALUE per share ($135,327,320/9,266,717 shares
of common stock issued and outstanding, $.01 par value,
100,000,000 shares authorized) $ 14.60
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
11
<PAGE>
[Logo] The Argentina Fund, Inc.
Financial Statements
================================================================================
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Income:
Dividends (net of foreign taxes withheld of $6,727) .......... $ 4,852,049
Interest ..................................................... 332,492
-----------
5,184,541
Expenses:
Management fee ............................................... $ 1,696,831
Custodian and accounting fees ................................ 369,138
Directors' fees and expenses ................................. 80,239
Advisory Board fees and expenses ............................. 23,436
Reports to shareholders ...................................... 84,426
Auditing ..................................................... 70,072
Services to shareholders ..................................... 35,765
Legal ........................................................ 11,710
Other ........................................................ 39,580 2,411,197
----------- -----------
Net investment income ........................................... 2,773,344
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized gain (loss) from:
Investments .................................................. 4,599,484
Argentine peso related transactions .......................... (10,900) 4,588,584
----------- -----------
Net unrealized appreciation (depreciation) during the period on:
Investments .................................................. 13,315,525
Argentine peso related transactions .......................... (266) 13,315,259
----------- -----------
Net gain on investment transactions ............................. 17,903,843
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............... $20,677,187
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
12
<PAGE>
[Logo] The Argentina Fund, Inc.
Financial Statements
================================================================================
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------------
YEARS ENDED OCTOBER 31,
-----------------------------
INCREASE (DECREASE) IN NET ASSETS 1996 1997
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .............................................. $ 2,773,344 $ 2,434,725
Net realized gain from investment transactions ..................... 4,588,584 1,285,565
Net unrealized appreciation on investment transactions
during the period .......................................... 13,315,259 21,849,181
------------ ------------
Net increase in net assets resulting from operations ................... 20,677,187 25,569,471
------------ ------------
Distributions to shareholders from:
Net investment income .............................................. (3,055,188) (3,059,725)
------------ ------------
Fund share transactions:
Reinvestment of distributions ...................................... 109,275 178,285
------------ ------------
INCREASE IN NET ASSETS ................................................. 17,731,274 22,688,031
------------ ------------
Net assets at beginning of period ...................................... 117,596,046 94,908,015
------------ ------------
NET ASSETS AT END OF PERIOD (including undistributed net investment
income of $1,034,890 and $1,322,732, respectively) ................. $135,327,320 $117,596,046
============ ============
OTHER INFORMATION
INCREASE IN FUND SHARES
Shares outstanding at beginning of period .............................. 9,258,146 9,244,879
Shares issued to shareholders in reinvestment of distributions ..... 8,571 13,267
------------ ------------
Shares outstanding at end of period .................................... 9,266,717 9,258,146
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
13
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[Logo] The Argentina Fund, Inc.
Financial Highlights
================================================================================
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD AND OTHER
PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL STATEMENTS AND MARKET PRICE DATA.
- ----------------------------------------------------------------------------------------------------------
Years Ended October 31,
--------------------------------------------------
1995 1996 1997 1993 1994
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ................. $12.70 $10.27 $14.53 $12.69 $ 9.35
------ ------ ------ ------ ------
Income from investment operations:
Net investment income(a) .......................... .30 .26 .31 .21 .05
Net realized and unrealized gain (loss) on
investment transactions ........................ 1.93 2.50 (3.84) 1.83 3.43
------ ------ ------ ------ ------
Total from investment operations ..................... 2.23 2.76 (3.53) 2.04 3.48
Less distributions from:
Net investment income ............................. (.33) (.33) (.27) (.14) (.05)
Net realized gains on investment transactions ..... -- -- (.46) (.02) (.09)
------ ------ ------ ------ ------
Total distributions .................................. (.33) (.33) (.73) (.16) (.14)
------ ------ ------ ------ ------
Antidilution resulting from offering of
second tranche ................................. -- -- -- .04 --
------ ------ ------ ------ ------
Second tranche offering costs ........................ -- -- -- (.08) --
------ ------ ------ ------ ------
Net asset value, end of period ....................... $14.60 $12.70 $10.27 $14.53 $12.69
====== ====== ====== ====== ======
Market value, end of period .......................... $12.31 $11.50 $10.13 $14.63 $14.00
====== ====== ====== ====== ======
TOTAL RETURN
Per share market value (%) ........................... 9.84 16.52 (26.48) 5.45 47.41
Per share net asset value (%)(b) ..................... 17.94 26.86 (24.94) 15.58 37.55
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) ............... 135 118 95 134 74
Ratio of operating expenses to average
net assets (%) ................................. 1.71 1.90 1.98 1.87 2.37
Ratio of net investment income to average
net assets (%) ................................. 1.96 2.11 2.71 1.48 .48
Portfolio turnover rate (%) .......................... 32.0 19.0 25.0 16.7 32.5
Average commission rate paid (c) ..................... $.0212 $.0207 -- -- --
</TABLE>
(a) Based on monthly average of shares outstanding during the period.
(b) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
(c) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal years ending on or after October 31, 1996.
- --------------------------------------------------------------------------------
14
<PAGE>
[Logo] The Argentina Fund, Inc.
Notes to Financial Statements
================================================================================
A. SIGNIFICANT ACCOUNTING POLICIES
The Argentina Fund, Inc. (the "Fund") is registered under the Investment Company
Act of 1940, as amended, as a non-diversified, closed-end management investment
company.
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. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used. Securities quoted on the Nasdaq System, for which
there have been sales, are valued at the most recent sale price reported on such
system. If there are no such sales, the value is the high or "inside" bid
quotation. Securities which are not quoted on the Nasdaq System but are traded
in another over-the-counter market are valued at the most recent sale price on
such market. If no sale occurred, the security is then valued at the calculated
mean between the most recent bid and asked quotations. If there are no such bid
and asked quotations, the most recent bid quotation shall be used.
Portfolio debt securities other than money market securities are valued by
pricing agents approved by the Officers of the Fund, which quotations reflect
broker/dealer-supplied valuations and electronic data processing techniques. If
the pricing agents are unable to provide such quotations, the most recent bid
quotation supplied by a bona fide market maker shall be used. Money market
instruments purchased with an original maturity of sixty days or less are valued
at amortized cost. All other securities are valued at their fair value as
determined in good faith by the Valuation Committee of the Board of Directors.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
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, depending on the maturity of the repurchase
agreement, is equal to at least 100.5% of the repurchase price.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS. A forward foreign currency exchange
contract (forward contract) is a commitment to purchase or sell a foreign
currency at the settlement date at a negotiated rate. During the period, the
Fund utilized forward contracts as a hedge in connection with portfolio
purchases and sales of securities denominated in foreign currencies.
Forward contracts are valued at the prevailing forward exchange rate of the
underlying currencies and unrealized gain/loss is recorded daily. Forward
contracts having the same settlement date and broker are offset and any gain
(loss) is realized on the date of offset; otherwise, gain (loss) is realized on
settlement date. Realized and unrealized gains and losses which represent the
difference between the value of the forward contract to buy and the forward
contract to sell are included in net realized and unrealized gain (loss) from
foreign currency related transactions.
15
<PAGE>
[Logo] The Argentina Fund, Inc.
Notes to Financial Statements
================================================================================
Certain risks may arise upon entering into forward contracts from the potential
inability of counterparties to meet the terms of their contracts. Additionally,
when utilizing forward contracts to hedge, the Fund gives up the opportunity to
profit from favorable exchange rate movements during the term of the contract.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Argentine peso transactions are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities at
the daily rate of exchange, and
(ii) purchases and sales of investment securities, dividend and interest
income and certain expenses at the daily rate of exchange prevailing
on the respective dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments. Net realized and
unrealized gain (loss) from foreign currency related transactions includes gains
and losses between trade and settlement dates on securities transactions, gains
and losses arising from the sale of Argentine pesos, and gains and losses
between the ex and payment dates on dividends and interest. At October 31, 1997
the exchange rate for the Argentine peso was U.S. $1 to .99942 Argentine peso.
TAXATION. The Fund's policy is to comply with the requirements of the Internal
Revenue Code which are applicable to regulated investment companies, and to
distribute substantially all of its investment company taxable income to its
shareholders. Accordingly, the Fund paid no U.S. federal income taxes, and no
federal income tax provision was required. Under Argentine tax laws, the Fund is
not subject to withholding taxes on dividends.
DISTRIBUTION OF INCOME AND GAINS. Distribution of net investment income is made
annually. During any particular year, net realized gains from investment
transactions, in excess of available capital loss carryforwards, would be
taxable to the Fund if not distributed, and, therefore, will be distributed to
shareholders annually. An additional distribution may be made to the extent
necessary to avoid the payment of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in foreign denominated securities,
passive foreign investment companies, and certain securities sold at a loss. As
a result, net investment income (loss) and net realized gain (loss) on
investment transactions for a reporting period may differ significantly from
distributions during such period. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting the
net asset value of the Fund.
The Fund uses the identified cost method for determining realized gain or loss
on investments for both financial and federal income tax reporting purposes.
16
<PAGE>
[Logo] The Argentina Fund, Inc.
Notes to Financial Statements
================================================================================
OTHER. Investment security transactions are accounted for on a trade-date basis.
Dividend income and distributions to shareholders are recorded on the
ex-dividend date. Interest income is recorded on the accrual basis. All
discounts are accreted for both tax and financial reporting purposes.
B. PURCHASES AND SALES OF SECURITIES
For the year ended October 31, 1997, purchases and sales of investment
securities (excluding short-term investments) aggregated $43,168,069 and
$45,023,985, respectively.
C. RELATED PARTIES
Under the Fund's Investment Advisory, Management and Administration Agreement
(the "Management Agreement") with Scudder, Stevens & Clark, Inc. (the
"Manager"), the Manager directs the investments of the Fund in accordance with
the Fund's investment objectives, policies, and restrictions and under the
direction and control of the Fund's Board of Directors. In addition to portfolio
management services, the Manager provides certain administrative services in
accordance with the Management Agreement. The Fund pays to the Manager a monthly
fee at an annualized rate of 1.20% of the Fund's average weekly net assets. For
the year ended October 31, 1997, the fee pursuant to such Management Agreement
aggregated $1,696,831.
The Manager has entered into a Sub-Advisory Contract (the "Sub-Advisory
Contract") with Sociedad General de Negocios y Valores S.A. (the "Argentine
Adviser") whereby the Argentine Adviser provides such information, investment
recommendations and assistance as the Manager may from time to time reasonably
request. Under the Sub-Advisory Contract, the Manager pays the Argentine Adviser
a monthly fee, equal to an annualized rate of 0.26% of the Fund's average weekly
net assets.
On June 26, 1997, the Manager entered into an agreement with The Zurich
Insurance Company ("Zurich"), an international insurance and financial services
organization, pursuant to which Zurich will acquire a majority interest in the
Manager, and the Manager will form a new global investment organization by
combining with Zurich's subsidiary, Zurich Kemper Investments, Inc. and change
its name to Scudder Kemper Investments, Inc. Subject to the receipt of the
required regulatory and shareholder approvals, the transaction is expected to
close by the end of the fourth quarter of 1997.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
October 31, 1997, the amount charged to the Fund by SFAC aggregated $106,168, of
which $19,521 was unpaid at October 31, 1997.
The Fund pays each Director not affiliated with the Manager or the Argentine
Adviser $6,000 annually, plus specified amounts for attended board and committee
meetings. For the year ended October 31, 1997, Directors' fees and expenses
aggregated $80,239.
17
<PAGE>
[Logo] The Argentina Fund, Inc.
Notes to Financial Statements
================================================================================
Until October 1, 1997, the Fund's Board of Directors had a board of independent
advisors ("Advisory Board"). Each member of the Advisory Board received from the
Fund an annual fee of $7,000. The Fund also reimbursed Advisory Board members
for travel and out-of-pocket expenses incurred in connection with Advisory Board
meetings. For the year ended October 31, 1997, Advisory Board fees and expenses
aggregated $23,436. Effective October 1, 1997, the relationship with the
Advisory Board was discontinued.
For the year ended October 31, 1997, brokerage commissions on investment
transactions amounting to $14,132 were paid by the Fund to Banco General de
Negocios, the parent company of the Argentine Adviser.
D. FOREIGN INVESTMENT AND EXCHANGE CONTROLS IN ARGENTINA
Investing in Argentina may involve considerations not typically associated with
investing in securities issued by U.S. companies such as more volatile prices
and less liquid securities.
Foreign investment in Argentina is regulated by the Foreign Investment Law and
the Economic Emergency Law. In general, there are currently no restrictions on
the movement of funds into and out of Argentina and repatriation of income and
capital gains by the Fund is permitted at any time. Foreign enterprises may
obtain domestic credit with the same rights and under the same conditions as
domestic enterprises. Generally, there are few restrictions on the Fund's
ability, as a foreigner, to invest in Argentine companies. There can be no
guarantee, however, that restrictions would not be imposed in the future if
governmental authorities determine that financial and economic circumstances
justify such restrictions.
18
<PAGE>
[Logo] The Argentina Fund, Inc.
Report of Independent Accountants
================================================================================
TO THE BOARD OF DIRECTORS AND THE SHAREHOLDERS OF THE ARGENTINA FUND, INC.:
We have audited the accompanying statement of assets and liabilities of The
Argentina Fund, Inc. including the investment portfolio, as of October 31, 1997,
the related statement of operations for the year then ended, the statements of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the five years in the period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's 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 generally accepted auditing
standards. 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 securities owned as of
October 31, 1997, 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 The
Argentina Fund, Inc. as of October 31, 1997, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and the financial highlights for each of the five years
in the period then ended in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
December 8, 1997
19
<PAGE>
[Logo] The Argentina Fund, Inc.
Stockholder Meeting Results
================================================================================
The Annual Meeting of Stockholders of the Fund was held on October 28, 1997, at
the offices of Scudder, Stevens & Clark, Inc., 25th Floor, 345 Park Avenue (at
51st Street), New York, New York 10154. The following were matters voted upon by
Stockholders (the resulting votes for each matter are presented below).
1(A). To approve the new Investment Management, Advisory and Administration
Agreement between the Fund and Scudder Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-votes*
--- ------- ------- -----------------
6,381,568 48,657 22,608 0
(B). To approve the new Research and Advisory Agreement between Scudder Kemper
Investments, Inc. and Sociedad General de Negocios y Valores S.A.
Number of Votes:
----------------
For Against Abstain Broker Non-votes*
--- ------- ------- -----------------
6,373,378 53,857 25,598 0
2. To elect Directors.
Director: Number of Votes:
--------- ----------------
For Withheld
--- --------
Nicholas Bratt 6,404,675 48,158
Javier A. Gonzalez Fraga 6,398,625 54,208
Continuing Directors:
---------------------
Ronaldo A. da Frota Nogueira
Dr. Susan Kaufman Purcell
Wilson Nolen
3. To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's
independent accountants.
Number of Votes:
----------------
For Against Abstain
--- ------- -------
5,741,596 35,788 675,449
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary
power to vote on a particular matter.
20
<PAGE>
[Logo] The Argentina Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
The Plan
The Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan") offers
you an automatic way to reinvest your dividends and capital gains distributions
in shares of the Fund. The Plan also provides for cash investments in Fund
shares of $100 to $3,000 semiannually through State Street Bank and Trust
Company, the Plan Agent.
Automatic Participation
Each shareholder of record is automatically a participant in the Plan unless
the shareholder has instructed the Plan Agent in writing otherwise. Such a
notice must be received by the Plan Agent not less than 10 days prior to the
record date for a dividend or distribution in order to be effective with respect
to that dividend or distribution. A notice which is not received by that time
will be effective only with respect to subsequent dividends and distributions.
Shareholders who do not participate in the Plan will receive all
distributions in cash paid by check in dollars mailed directly to the
shareholder by State Street Bank and Trust Company, as dividend paying agent.
Shares Held by a Nominee
If your shares are held in the name of a brokerage firm, bank, or other
nominee as the shareholder of record, please consult your nominee (or any
successor nominee) to determine whether it is participating in the Plan on your
behalf. Many nominees are generally authorized to receive cash dividends unless
they are specifically instructed by a client to reinvest. If you would like your
nominee to participate in the Plan on your behalf, you should give your nominee
instructions to that effect as soon as possible.
Pricing of Dividends and Distributions
If the market price per share on the payment date for the dividend or
distribution or, if that date is not a New York Stock Exchange trading date, the
next preceding trading date (the "Valuation Date") equals or exceeds net asset
value per share on that date, the Fund will issue new shares to participants at
the greater of the following on the Valuation Date: (a) net asset value, or (b)
95% of the market price. If the net asset value exceeds the market price of Fund
shares at such time, participants in the Plan are considered to have elected to
receive shares of stock from the Fund, valued at market price, on the Valuation
Date. In either case, for Federal income tax purposes, the shareholder receives
a distribution equal to the market value on Valuation Date of new shares issued.
State and local taxes may also apply. If the Fund should declare an income
dividend or net capital gains distribution payable only in cash, the Plan Agent
will, as agent for the participants, buy Fund shares in the open market, on the
New York Stock Exchange or elsewhere, for the participants' account on, or
shortly after, the payment date.
Voluntary Cash Purchases
Participants in the Plan have the option of making additional cash payments
to the Plan Agent, semiannually, in any amount from $100 to $3,000, for
investment in the Fund's shares. The Plan Agent will use all such monies
received from participants to purchase Fund shares in the open market on or
about February 15 and August 15. Any voluntary cash payments received more than
30 days prior to these dates will be returned by the Plan Agent, and interest
will not be paid on any uninvested cash payments. To avoid unnecessary cash
accumulations, and also to allow ample time for receipt and processing by the
Plan Agent, it is suggested that participants send in voluntary cash payments to
be received by the Plan Agent approximately ten days before February 15, or
21
<PAGE>
[Logo] The Argentina Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
August 15, as the case may be. A participant may withdraw a voluntary cash
payment by written notice, if the notice is received by the Plan Agent notless
than 48 hours before such payment is to be invested.
Participant Plan Accounts
The Plan Agent maintains all participant accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information
needed by participants for personal and 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 participant will be able to vote those
shares purchased pursuant to the Plan at a shareholder meeting or by proxy.
No Service Fee to Reinvest
There is no service fee charged to participants for reinvesting dividends or
distributions from net realized capital gains. The Plan Agent's fees for the
handling of the reinvestment of dividends and capital gains distributions will
be paid by the Fund. There will be no brokerage commissions with respect to
shares issued directly by the Fund as a result of dividends or capital gains
distributions payable either in stock or in cash. However, participants will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of any
dividends or capital gains distributions payable only in cash.
Costs for Cash Purchases
With respect to purchases of Fund shares from voluntary cash payments, the
Plan Agent will charge $0.75 for each such purchase for a participant. Each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases of Fund shares in connection
with voluntary cash payments made by the participant.
Brokerage charges for purchasing small amounts of stock for 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.
Amendment or Termination
The Fund and the Plan Agent each reserve the right to terminate the Plan.
Notice of the termination will be sent to the participants of the Plan at least
30 days before the record date for a dividend or distribution. The Plan also may
be amended by the Fund or the Plan Agent, but (except when necessary or
appropriate to comply with applicable law, rules or policies of a regulatory
authority) only by giving at least 30 days' written notice to participants in
the Plan.
A participant may terminate his account under the Plan by written notice to
the Plan Agent. If the written notice is received 10 days before the record day
of any distribution, it will be effective immediately. If received after that
date, it will be effective as soon as possible after the reinvestment of the
dividend or distribution.
If a participant elects to sell his shares before the Plan is terminated, the
Plan Agent will deduct a $2.50 fee plus brokerage commissions from the sale
transaction.
Plan Agent Address and Telephone Number
You may obtain more detailed information by requesting a copy of the Plan
from the Plan Agent. All correspondence (including notifications) should be
directed to: The Argentina Fund, Inc. Dividend Reinvestment and Cash Purchase
Plan, c/o State Street Bank and Trust Company, P.O. Box 8209, Boston, MA
02266-8209, 1-800-426-5523.
22
<PAGE>
[Logo] The Argentina Fund, Inc.
Investment Manager
================================================================================
The investment manager of The Argentina Fund, Inc. (the "Fund") is Scudder,
Stevens & Clark, Inc., one of the most experienced investment management and
investment counsel firms in the United States. Established in 1919, the firm
provides investment counsel for individuals, investment companies and
institutions. Scudder has offices throughout the United States and subsidiaries
in London and in Tokyo.
Scudder has been a leader in international investment management for over 40
years. It manages Scudder International Fund, which was initially incorporated
in Canada in 1953 as the first foreign investment company registered with the
U.S. Securities and Exchange Commission. Scudder's investment company clients
include nine other open-end investment companies which invest primarily in
foreign securities.
In addition to the Fund, Scudder also manages the assets of seven other
closed-end investment companies that invest in foreign securities: The Brazil
Fund, The Korea Fund, Scudder Global High Income Fund, Scudder New Asia Fund,
Scudder New Europe Fund and Scudder Spain and Portugal Fund are traded on the
New York Stock Exchange.
23
<PAGE>
[Logo] The Argentina Fund, Inc.
Advisory Board
================================================================================
At a meeting of the Board of Directors held on July 29, 1997, it was decided
to discontinue the advisory board, effective October 1, 1997.
DIRECTORS AND OFFICERS
================================================================================
NICHOLAS BRATT*
Chairman of the Board, President, and Director
JAVIER A. GONZALEZ FRAGA
Director
RONALDO A. DA FROTA NOGUEIRA
Director
MR. WILSON NOLEN
Director
DR. SUSAN KAUFMAN PURCELL
Director
JOSE E. ROHM
Honorary Director
PAUL J. ELMLINGER*
Vice President and Assistant Secretary
EDMUND B. GAMES, JR.*
Vice President
BRUCE H. GOLDFARB*
Vice President
JUDITH A. HANNAWAY*
Vice President
JERARD K. HARTMAN*
Vice President
DAVID S. LEE*
Vice President
LUIS R. LUIS*
Vice President
PAMELA A. McGRATH*
Vice President and Treasurer
THOMAS F. McDONOUGH*
Vice President and Secretary
EDWARD J. O'CONNELL*
Vice President and Assistant Treasurer
* Scudder, Stevens & Clark, Inc.
