SCUDDER SECURITIES TRUST, N-30D, 1996-11-01

SCUDDER SECURITIES TRUST
N-30D, 1996-11-01

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Scudder Small Company Value Fund

Annual Report

August 31, 1996

Pure No-Load(TM) Funds

A pure no-load(TM) (no sales charges) mutual fund which offers opportunities for
long-term growth of capital by seeking undervalued stocks of small U.S.
companies.
<PAGE>

Table of Contents

2 In Brief
3 Letter from the Fund's President
4 Portfolio Summary
5 Portfolio Management Discussion
8 Investment Portfolio
17 Financial Statements
20 Financial Highlights
21 Notes to Financial Statements
24 Report of Independent Accountants
25 Officers and Trustees
26 Investment Products and Services
27 How to Contact Scudder

In Brief

o Scudder Small Company Value Fund provided a strong total return of 13.54%
from its commencement of operations on October 6, 1995, through the end of
its abbreviated fiscal year on August 31, 1996.

o At the end of August, the average price-earnings ratio for portfolio
holdings was 11.6 based on trailing 12-month earnings, or well below half
of the 27.2 ratio for the broad universe of small stocks.

o One of the key benefits of the Fund's value-oriented approach to small
stock investing -- reduced volatility -- was clearly displayed over the
period versus broad small- and large-capitalization stock indices.

2 - Scudder Small Company Value Fund

<PAGE>

Letter From the Fund's President

Dear Shareholders,

We welcome you as an investor in Scudder Small Company Value Fund and are
pleased to present the first annual report of the Fund, covering the abbreviated
fiscal year beginning with the commencement of operations on October 6, 1995 and
ended August 31, 1996. For this period, the Fund's total return was a strong
13.54%.

After an extended period of relatively unbroken market strength, U.S.
equities provided a bumpy ride for most of the interval from March through
August of 1996, as a lack of clarity with respect to the direction of the
economy caused investor sentiment to gyrate. Small stocks in particular
experienced a high level of volatility and in many cases significant declines.
Scudder Small Company Value Fund shareholders were well served by the Fund's
systematic, value-oriented approach, which is designed to outperform other more
aggressive small stock strategies in such periods.

For those of you who like to stay informed about new funds offered by
Scudder, we recently introduced three new equity funds. Scudder Classic Growth
Fund seeks long-term capital appreciation with a higher degree of principal
stability than the average growth fund. Scudder 21st Century Growth Fund takes a
more aggressive approach, focusing primarily on emerging growth companies with
the potential to benefit from the rapidly changing industrial and economic
landscape that we foresee. Scudder Micro Cap Fund invests in the dynamic
universe of America's smallest publicly traded companies. For more information
on these and other Scudder Fund products and services, please turn to page 26.

Thank you for your interest and continued investment in Scudder Small
Company Value Fund. Please do not hesitate to contact Investor Relations at
1-800-225-2470 with any questions regarding your account.

Sincerely,

/s/Daniel Pierce
Daniel Pierce
President,
Scudder Small Company Value Fund

3 - Scudder Small Company Value Fund

<PAGE>

PORTFOLIO SUMMARY as of August 31, 1996

- -----------------------------
ASSET ALLOCATION
- -----------------------------
Equity Securities 99%
Cash & Equivalents, Net 1%
- -----------------------------
100%
- -----------------------------
Total Net Assets (millions): $41.2
Net Asset Value per Share: $13.57

Fund assets are invested
in stocks of small U.S.
companies.

A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.

- -----------------------------
SECTORS/LARGEST HOLDINGS
(Excludes 1% Cash Eqv., Net)
- -----------------------------
1. FINANCIAL (26%)
Washington National Corp.
Financial services holding company
providing various types of life, health
disability insurance

2. MANUFACTURING (18%)
DT Industries, Inc.
Manufacturer of automated production
equipment and precision metal
components

3. CONSUMER DISCRETIONARY (10%)
Ross Stores, Inc.
Chain of off-price retail apparel stores

4. CONSTRUCTION (9%)
Southdown, Inc.
Cement and concrete producer

5. DURABLES (7%)
SPX Corp.
Manufacturer of automotive and
heavy-duty engine and chassis parts,
repair and maintenance equipment

6. UTILITIES (6%)
North Carolina Natural Gas Corp.
Natural gas distributor

7. TECHNOLOGY (5%)
CTS Corp.
Manufacturer of electronic and
electromechanical components

8. SERVICE INDUSTRIES (4%)
Kinder Care Learning Centers
Operator of day-care centers

9. METALS & MINERALS (4%)
Commercial Metals Co.
Producer and marketer of steel and
copper tubes, and recycling of
abandoned railroad materials

10. OTHER (11%)
RPC, Inc.
Service provider to oil and gas
companies, drilling contractors and steel
companies

- -------------------------------------------------------------------
STOCK CHARACTERISTICS
- -------------------------------------------------------------------
Fund as
% of
Russell S&P Russell
Fund 2000* 500** 2000
- ------------------------------------------------------------------
SMALL COMPANIES ($ MILLIONS)
Market Capitalization: Median 268 325 4,976 82%
Market Capitalization: Wgt. Avg. 304 532 35,989 57%
Revenues 586 549 23,557 107%

VALUE ORIENTATION
P/E: Trailing Twelve Months 11.6 27.2 18.7 43%
Price/Sales 0.5 1.0 1.2 52%
Price/Book Value 1.4 2.3 3.0 63%
Yield (Avg. Stock) 1.6% 1.4% 2.3% 110%

* The Russell 2000 Index is an unmanaged capitalization-weighted
measure of small U.S. companies whose common stocks trade on the
New York Stock Exchange, American Stock Exchange, and
NASDAQ market.

** The Standard & Poor's (S&P) 500 Index is an unmanaged
capitalization-weighted measure of 500 widely held common stocks
listed on the New York Stock Exchange, American Stock Exchange, and
NASDAQ market.

The average price-earnings ratio for stocks in the
Fund of 11.6 is less than half of that for the overall
small stock market.

For more complete details about the Fund's Investment Portfolio, see page 8.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings are
available upon request.
- -------------------------------------------------------------------------------
4 - Scudder Small Company Value Fund

<PAGE>

Portfolio Management Discussion

Dear Shareholders,

Scudder Small Company Value Fund provided a total return of 13.54% from its
commencement of operations on October 6, 1995, through its initial fiscal
year-end on August 31, 1996. This performance exceeded that of small company
value stocks in the aggregate as measured by the unmanaged Russell 2000 Value
Index, and the broad small cap market as gauged by the unmanaged Russell 2000
Index (see accompanying table).

The Russell 2000 Value Index consists of securities from the Russell 2000 Index
that display value characteristics, and is the Fund's benchmark for purposes of
performance. While comparative results for shorter periods have varied,
historically, the Russell 2000 Value Index has outperformed the Russell 2000
Index over most five-year periods.

Total Returns Since Inception of
Scudder Small Company Value Fund

10/6/95 - 8/31/96
=======================================================

Scudder Small Company Value Fund 13.54%
Russell 2000 Value Index 12.38
(small company value stocks)
Russell 2000 Index 12.19
(small company stocks)
S&P 500 Index 14.21
(large company stocks)
=======================================================

For the first several months of the Fund's fiscal period, the U.S. stock market
was buoyed by slow growth, a low rate of inflation, and the prospect of further
interest rate declines. In March, stocks began to display increased volatility
as investors reacted to conflicting signals concerning the direction of economic
growth, inflation and interest rates. While small stock returns in the aggregate
were solidly in the positive column for the period, as shown in the accompanying
table, they slightly lagged behind those of their larger-capitalization
counterparts.

A Disciplined, Value-Oriented
Approach to Small Stock Investing

Scudder Small Company Value Fund takes a distinctive approach to seeking
long-term growth of capital from investing in U.S. stocks. The Fund is designed
to provide investors with a vehicle for accessing the benefits of two techniques
that have historically provided superior long-term returns -- investing in small
stocks, and employing a value-oriented selection criteria.

The Fund's selection process begins with the narrowing of the prospective
investment universe to small U.S. companies -- those with market capitalizations
less than $1 billion. These issues are then assessed using a proprietary set of
quantitative measurements that relate to a stock's intrinsic value. In addition,
indicators of company growth and stock price momentum are evaluated. The small
stocks that are identified by our method as displaying the strongest combination
of these investment characteristics with overall acceptable risk become part of
the portfolio. The goal is to produce a portfolio of stocks of small companies
with reasonable growth prospects, purchased at discounted prices.

5 - Scudder Small Company Value Fund

<PAGE>

At the end of August, the Fund's $41.2 million in net assets was invested in 211
stocks. Consistent with the approach outlined above, the median market
capitalization of these holdings was $268 million -- similar in size to those in
the Russell 2000 Index and less than 10% of the market capitalization of the
typical S&P 500 company. With respect to the value orientation of the Fund, the
average price-earnings (p/e) ratio -- a widely used measure of stock value --
for portfolio holdings was 11.6 based on trailing 12-month earnings, or well
below half of the 27.2 ratio for the broad universe of small stocks, as
represented by the Russell 2000 Index. That a number of portfolio holdings
benefited from takeover activity over the period illustrates the potential for
stocks that display good relative value to benefit as the market comes to
appreciate their desirable investment characteristics.

At the end of August, the Fund's largest concentration was in the finance
sector, which accounted for approximately 26% of the portfolio's stock holdings.
This position is actually underweight relative to the 35% weighting of finance
stocks in the Russell 2000 Value Index. Other groups where the Fund's
value-driven process resulted in significant representation include
manufacturing and consumer discretionary stocks.

Reduced Volatility

One of the key benefits of the Fund's value-oriented approach to small stock
investing -- reduced volatility -- was clearly displayed over the period. For
example, over the first eight months of 1996, the day-to-day volatility of the
Fund's net asset value was significantly lower than the price volatility of both
the large-capitalization S&P 500 and small-cap Russell 2000 stocks, based on
standard deviation, a common measure of investment volatility. In addition, on
those days when small stocks declined (as reflected by the Russell 2000), the
Fund outperformed the overall small stock market 79% of the time. These results
are in keeping with our expectation that the Fund should, in general, outperform
the broader market during periods of equity weakness. This in turn can
contribute to the Fund's goal of providing growth of capital and competitive
returns over the long run.

Finally, we were successful in minimizing the required fiscal year-end
distribution of taxable capital gains to shareholders, selectively taking losses
on securities which had declined since being purchased by the Fund to offset
realized gains in other securities.

Looking Ahead

As the Fund's fiscal period drew to a close, there were signs that the U.S.
stock market had resumed its upward march, following a period of some months
where wild vacillations were the norm. It may be too much to expect this strong
performance to continue indefinitely; short-term volatility and periodic
corrections are part of equity investing. However, the long-term prospects for
the U.S. economy and stock market are positive, based on a number of structural
trends including moderate growth and benign inflation.

6 - Scudder Small Company Value Fund

<PAGE>
Scudder Small Company Value Fund: A Team Approach to Investing

Scudder Small Company Value Fund is managed by a team of Scudder investment
professionals who each play an important role in the Fund's management
process. Team members work together to develop investment strategies and
select securities for the Fund's portfolio. They are supported by Scudder's
large staff of quantitative analysts, traders and other investment specialists
who work in Scudder's offices across the United States and abroad. Scudder
believes its team approach benefits Fund investors by bringing together many
disciplines and leveraging Scudder's extensive resources.

Philip S. Fortuna, Lead Portfolio Manager, joined Scudder in 1986 as manager
of institutional equity accounts. He became director of quantitative research
in 1987 and served as director of investment operations from 1993 to 1994.
James M. Eysenbach, Portfolio Manager, joined Scudder in 1991 as a senior
quantitative analyst and is currently director of quantitative research for
Scudder. Mr. Eysenbach has more than nine years investment research and
management experience.

Your Portfolio Management Team: Philip S. Fortuna and James M. Eysenbach

Going forward, the Fund will continue to be essentially fully invested in small
U.S. stocks pursuant to its objective and our policy of not trying to "time" the
market. We will continue to apply our disciplined, value-oriented approach to
selecting a portfolio of small stocks that we believe will position the Fund to
benefit shareholders seeking long-term capital appreciation.

Sincerely,
Your Portfolio Management Team

/s/Philip S. Fortuna /s/James M. Eysenbach
Philip S. Fortuna James M. Eysenbach

7 - Scudder Small Company Value Fund

<PAGE>
INVESTMENT PORTFOLIO as of August 31, 1996
<TABLE>
<CAPTION>
Principal Market
Amount ($) Value ($)
- --------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENTS 3.3%
- --------------------------------------------------------------------------------
Repurchase Agreement with State Street Bank and
Trust Company dated 8/30/96 at 5.23%, to be
repurchased at $1,388,807 on 9/3/96,
collateralized by a $1,395,000 U.S. Treasury
Note, 6.125%, 5/15/98 (Cost $1,388,000) ....... 1,388,000 1,388,000

<CAPTION>
Shares
- --------------------------------------------------------------------------------
COMMON STOCKS 96.7%
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY 10.1%
DEPARTMENT & CHAIN STORES 2.7%
AnnTaylor Stores Corp.* ....................... 5,900 85,550
Carson Pirie Scott & Co.* ..................... 9,900 249,975
Genovese Drug Stores, Inc. "A" ................ 18,500 228,938
Ross Stores, Inc. ............................. 9,400 361,900
Shopko Stores, Inc. ........................... 13,700 208,925
---------
1,135,288
---------
HOME FURNISHINGS 4.5%
Chromcraft Revington, Inc.* ................... 4,200 106,313
Furniture Brands International, Inc.* ......... 22,700 272,400
Haverty Furniture Co., Inc. ................... 16,200 176,175
Interface, Inc. ............................... 15,200 233,700
Oneida Ltd. ................................... 14,400 210,600
Prime Hospitality Corp.* ...................... 17,500 332,500
Thomas Industries, Inc. ....................... 11,500 209,875
Toro Co. ...................................... 11,100 346,875
---------
1,888,438
---------
RECREATIONAL PRODUCTS 0.9%
Carmike Cinemas, Inc.* ........................ 6,400 154,400
Outboard Marine Corp. ......................... 12,800 214,400
---------
368,800
---------
RESTAURANTS 0.6%
Ryan's Family Steak Houses, Inc.* ............. 29,100 243,713
---------
SPECIALTY RETAIL 1.4%
Fabri-Centers of America "A"* ................. 9,600 129,600
Inacom Corp.* ................................. 12,000 324,000
Trak Auto Corp.* .............................. 9,000 148,500
---------
602,100
---------
</TABLE>

The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
Pure No-Load[Trademark] Funds Pure No-Load[Trademark] Funds Pure No-Load
- --------------------------------------------------------------------------------

8 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE($)
- --------------------------------------------------------------------------------

<S> <C> <C>
CONSUMER STAPLES 3.O%
FOOD & BEVERAGE 2.6%
Golden Poultry Co., Inc. ....................... 24,000 252,000
Hudson Foods, Inc. "A" ......................... 8,200 111,725
Morningstar Group, Inc.* ....................... 22,100 245,863
Nash-Finch Co. ................................. 9,000 146,250
Super Food Services, Inc. ...................... 18,800 223,250
WLR Foods, Inc. ................................ 9,400 109,863
---------
1,088,951
---------

TEXTILES 0.4%
Guilford Mills, Inc. ........................... 7,600 171,950
---------
HEALTH 1.6%
BIOTECHNOLOGY 0.5%
Bio-Rad Laboratories, Inc. "A" ................. 6,900 193,200
---------
HOSPITAL MANAGEMENT 0.3%
GranCare, Inc.* ................................ 5,700 111,863
---------
MEDICAL SUPPLY & SPECIALTY 0.8%
Bindley Western Industries, Inc. ............... 12,200 216,550
West Co., Inc. ................................. 5,700 142,500
---------
359,050
---------
COMMUNINCATIONS 0.1%
TELEPHONE/COMMUNICATIONS
Atlantic Tele-Network, Inc.* ................... 1,600 36,200
---------
FINANCIAL 25.4%
BANKS 15.4%
ALBANK Financial Corp. ......................... 7,200 209,700
Astoria Financial Corp. ........................ 6,400 171,600
Banknorth Group, Inc. .......................... 6,400 225,600
Center Financial Corp. ......................... 10,800 268,650
Chittenden Corp. ............................... 5,250 123,375
Colonial BancGroup, Inc. ....................... 7,700 262,763
Commerce Bancorp, Inc. ......................... 9,275 227,238
Community First Bankshares, Inc. ............... 12,900 304,763
Corns Bankshares, Inc. ......................... 9,500 289,750
First Citizens BancShares, Inc. "A" ............ 1,200 76,800
First Commonwealth Financial Corp. ............. 7,500 139,688
</TABLE>

9 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>

<TABLE>
<CAPTION>
MARKET
SHARES VALUE($)
- --------------------------------------------------------------------------------

<S> <C> <C>
First Indiana Corp. ............................ 8,340 192,863
FirstBank Puerto Rico .......................... 9,500 213,750
Greater New York Savings Bank* ................. 15,100 171,763
HUBCO, Inc. .................................... 13,100 271,825
Hancock Holding Co. ............................ 6,700 242,875
InterWest Bancorp, Inc. ........................ 3,600 99,900
Irwin Financial Corp. .......................... 2,900 118,175
New York Bancorp, Inc. ......................... 4,500 137,250
North Side Savings Bank ........................ 5,800 269,700
People's Heritage Financial Group, Inc. ........ 9,400 206,800
RCSB Financial, Inc. ........................... 7,900 212,313
Reliance Bancorp, Inc. ......................... 9,200 157,550
Riggs National Corp. ........................... 16,900 270,400
Sovereign Bancorp, Inc. ........................ 19,320 206,483
Susquehanna Bancshares, Inc. ................... 11,500 342,125
TR Financial Corp. ............................. 7,600 215,650
USBANCORP, Inc. ................................ 9,400 343,100
Westamerica Bancorp. ........................... 4,900 238,875
Whitney Holding Corp. .......................... 9,400 289,050
---------
6,500,374
---------

INSURANCE 9.1%
Acceptance Insurance Cos., Inc.* ............... 9,500 163,875
Allied Group, Inc. ............................. 7,700 296,450
American Annuity Group, Inc. ................... 14,000 185,500
American Heritage Life Investment Corp. ........ 6,600 127,875
American Travellers Corp. ...................... 6,900 214,763
Capitol Transamerica Corp. ..................... 2,900 61,625
Delphi Financial Group, Inc. "A" ............... 2,900 87,000
First American Financial Co. ................... 4,800 153,000
Integon Corp. .................................. 12,700 258,763
Lawyers Title Corp. ............................ 12,200 254,675
Life USA Holdings, Inc.* ....................... 14,300 126,913
MAIC Holdings, Inc.* ........................... 4,580 148,850
MMI Companies, Inc. ............................ 7,800 249,600
Nymagic, Inc. .................................. 1,700 31,875
Presidential Life Corp. ........................ 22,200 216,450
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE($)
- --------------------------------------------------------------------------------

<S> <C> <C>
Reliable Life Insurance Co. ........................ 1,800 118,800
Security-Connecticut Corp. ......................... 6,600 199,650
Stewart Information Services Corp. ................. 4,500 93,375
Trenwick Group, Inc. ............................... 6,000 319,500
United Fire & Casualty Co. ......................... 6,100 183,000
Washington National Corp. .......................... 12,200 353,800
---------
3,845,339
---------

CONSUMER FINANCE 0.4%
Webster Financial Corp. ............................ 5,100 164,475
---------
OTHER FINANCIAL COMPANIES 0.5%
Bay View Capital Corp. ............................. 5,200 192,400
---------
MEDIA 0.6%
BROADCASTING & ENTERTAINMENT
AMC Entertainment, Inc.* ........................... 8,100 148,838
Value Vision International, Inc. "A"* .............. 20,900 120,175
---------
269,013
---------

SERVICE INDUSTRIES 4.2%
ENVIRONMENTAL SERVICES 0.5%
Sevenson Environmental Services, Inc. .............. 11,800 215,350
---------
INVESTMENT 1.3%
BHC Financial, Inc. ................................ 8,000 114,000
Jefferies Group, Inc. .............................. 8,400 254,100
McDonald & Co. Investments ......................... 9,800 194,775
---------
562,875
---------

MISCELLANEOUS COMMERCIAL SERVICES O.7%
Berlitz International, Inc.* ....................... 500 11,250
Volt Information Sciences, Inc. .................... 6,000 234,000
Winthrop Resources Corp. ........................... 1,600 39,600
---------
284,850
---------

MISCELLANEOUS CONSUMER SERVICES 0.7%
Kinder Care Learning Centers* ...................... 18,800 274,950
---------
PRINTING/PUBLISHING 1.0%
Bowne & Co., Inc. .................................. 11,300 224,588
Graphic Industries, Inc. ........................... 23,600 215,350
---------
439,938
---------
</TABLE>

11 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>

<TABLE>
<CAPTION>
MARKET
SHARES VALUE($)
- --------------------------------------------------------------------------------

<S> <C> <C>
DURABLES 6.9%
AEROSPACE 0.7%
Curtiss-Wright Corp. ............................. 2,200 116,738
Tracor, Inc.* .................................... 8,500 164,688
---------
281,426
---------

AUTOMOBILES 5.0%
A.O. Smith Corp. ................................. 5,400 130,950
Coachmen Industries, Inc. ........................ 3,100 57,738
Durakon Industries, Inc.* ........................ 7,100 95,850
Myers Industries, Inc. ........................... 15,400 238,700
Oshkosh Truck Corp. "B" .......................... 13,900 168,538
SPX Corp. ........................................ 14,300 398,613
Standard Products Co. ............................ 3,600 82,800
Stant Corp. ...................................... 17,600 187,000
Titan, Wheel International, Inc. ................. 12,000 183,O00
Walbro, Inc. ..................................... 13,000 255,125
Wynn's International, Inc. ....................... 12,400 330,150
---------
2,128,464
---------

CONSTRUCTION/AGRICULTURAL EQUIPMENT 1.2%
Global Industrial Technologies, Inc.* ............ 16,300 313,775
NACCO Industries, Inc. "A" ....................... 1,000 48,500
Raymond Corp. .................................... 7,350 141,488
---------
503,763
---------

MANUFACTURING 16.9%
CHEMICALS 0.6%
Cambrex Corp. .................................... 7,950 261,356
---------
CONTAINERS & PAPER 1.1%
Mosinee Paper Corp. .............................. 9,066 256,115
Park Ohio Industries, Inc.* ...................... 15,000 217,500
---------
473,615
---------

DIVERSIFIED MANUFACTURING 3.9%
ACX Technologies, Inc. ........................... 8,100 135,675
Bearings, Inc. ................................... 9,850 284,419
International Aluminum Co. ....................... 10,900 275,225
Robbins & Myers, Inc. ............................ 6,800 149,600
Scotsman Industries, Inc. ........................ 14,800 316,350
</TABLE>

12 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE($)
- --------------------------------------------------------------------------------

<S> <C> <C>
Tredegar Industries, Inc. ........................ 6,900 217,350
Valmont Industries ............................... 8,100 251,100
---------
1,629,719
---------

ELECTRICAL PRODUCTS 0.2%
DII Group, Inc.* ................................. 2,300 67,275
---------
HAND TOOLS 0.6%
L.S. Starrett Corp. .............................. 10,700 254,125
---------
INDUSTRIAL SPECIALTY 3.5%
American Filtrona Corp. .......................... 8,300 259,375
Barnes Group, Inc. ............................... 4,000 198,000
Central Sprinkler Corp.* ......................... 5,900 100,300
Commercial Intertech Corp. ....................... 6,000 150,000
FSI International, Inc. .......................... 8,000 86,000
Greenbrier Companies, Inc. ....................... 15,400 177,100
Kulicke & Soffa Industries, Inc. ................. 6,600 65,175
O'Sullivan Corp. ................................. 7,800 89,700
Spartech Corp. ................................... 16,400 161,950
Wyman-Gordon Co.* ................................ 8,300 173,263
---------
1,460,863
---------

MACHINERY/COMPONENTS/CONTROLS 5.0%
Amcast Industrial Corp. .......................... 13,800 244,950
DT Industries, Inc. .............................. 12,900 338,625
Gleason Corp. .................................... 1,500 59,813
Kysor Industrial Corp. ........................... 11,000 281,875
Mueller Industries, lnc .......................... 5,500 194,563
Penn Engineering & Manufacturing Corp. ........... 8,400 134,400
Penn Engineering & Manufacturing Corp."A" ........ 2,800 52,150
Reliance Steel & Aluminum Co. .................... 6,400 214,400
Sequa Corp."A"* .................................. 2,000 87,500
Varlen Corp. ..................................... 11,880 255,420
Zero Corporation ................................. 11,800 238,950
---------
2,102,646
---------

WHOLESALE DISTRIBUTORS 2.0%
A.M. Castle & Co. ................................ 10,875 241,969
Fisher Scientific International .................. 1,600 63,600
Hughes Supply, Inc. .............................. 6,900 267,375
</TABLE>

The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
Pure No-Load[Trademark] Funds Pure No-Load[Trademark] Funds
- --------------------------------------------------------------------------------

13 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE($)
- --------------------------------------------------------------------------------

<S> <C> <C>
Rexel, Inc.* ....................................... 19,500 270,563
-------
843,507
-------

TECHNOLOGY 4.3%
COMPUTER SOFTWARE 0.2%
MTS Systems Corp. .................................. 4,600 85,100
-------
DIVERSE ELECTRONIC PRODUCTS 0.7%
Esterline Technologies Corp.* ...................... 5,500 113,438
HADCO Corp.* ....................................... 6,300 163,013
-------
276,451
-------

EDP PERIPHERALS 0.2%
DH Technology, Inc. ................................ 2,900 71,050
-------
ELECTRONIC COMPONENTS/DISTRIBUTORS 2.1%
Augat, Inc. ........................................ 11,300 216,113
Bell Industries, Inc. .............................. 15,790 264,483
CTS Corp. .......................................... 6,9O0 281,175
Furon Corp. ........................................ 5,500 121,000
-------
882,771
-------
MILITARY ELECTRONICS 0.4%
Watkins-Johnson Co. ................................ 9,200 184,000
-------
PRECISION INSTRUMENTS 0.2%
Silicon Valley Group, Inc.* ........................ 5,600 101,500
-------
SEMICONDUCTORS 0.5%
Siliconix, Inc.* ................................... 4,300 79,550
VLSI Technology, Inc.* ............................. 8,700 121,800
-------
201,350
-------

ENERGY 3.6%
OIL & GAS PRODUCTION 0.9%
Belden & Blake Corp.* .............................. 8,800 180,400
KCS Energy, Inc. ................................... 1,700 53,550
Plains Resources, Inc.* ............................ 4,400 59,950
Tesoro Petroleum Corp. ............................. 7,400 94,350
-------
388,250
-------

OILFIELD SERVICES/EQUIPMENT 2.7%
Cliffs Drilling Co.* ............................... 5,200 148,200
Getty Petroleum Corp. .............................. 18,800 274,950
Pride Petroleum Services, Inc.* .................... 23,500 337,813
</TABLE>

14 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE($)
- --------------------------------------------------------------------------------

<S> <C> <C>
RPC, Inc.* ................................... 31,200 347,100
---------
1,108,063
---------

METALS & MINERALS 3.6%
STEEL & METALS
Acme Metals, Inc.* ........................... 14,400 210,600
Brush Wellman, Inc. .......................... 8,800 167,200
Chaparral Steel Co. .......................... 18,300 240,188
Commercial Metals Co. ........................ 11,800 355,475
National Steel Corp."B"* ..................... 9,900 101,475
Rouge Steel Co."A" ........................... 7,100 158,863
Shiloh Industries, Inc.* ..................... 14,500 221,125
WHX Corporation* ............................. 6,700 68,675
---------
1,523,601
---------

CONSTRUCTION 9.1%
BUILDING MATERIALS 4.4%
Butler Manufacturing Co. ..................... 4,200 126,000
Fibreboard Corp. ............................. 6,600 197,175
Florida Rock Industries, Inc. ................ 11,600 307,400
Lone Star Industries, Inc. ................... 3,200 104,000
Medusa Corp. ................................. 7,600 226,100
Puerto Rican Cement Co., Inc. ................ 8,000 241,000
Southdown, Inc. .............................. 14,000 325,500
Triangle Pacific Corp.* ...................... 5,800 126,150
Universal Forest Products, Inc. .............. 16,100 211,313
---------
1,864,638
---------

BUILDING PRODUCTS 0.5%
Nortek, Inc.* ................................ 13,500 185,625
---------
HOMEBUILDING 3.7%
Beazer Homes USA, Inc.* ...................... 12,900 187,050
Champion Enterprises, Inc. ................... 9,200 174,800
Continental Homes Holding Corp. .............. 10,300 198,275
Hovnanian Enterprises, Inc."A"* .............. 30,600 193,163
MDC Holdings, Inc. ........................... 25,500 175,313
NVR, Inc.* ................................... 20,100 188,438
Skyline Corp. ................................ 10,200 258,825
U.S. Home Corp.* ............................. 8,500 190,188
---------
1,566,052
---------
</TABLE>

15 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
<TABLE>
<CAPTION>
MARKET
SHARES VALUE($)
- --------------------------------------------------------------------------------

<S> <C> <C>
MISCELLANEOUS 0.5%
Granite Construction, Inc. ..................... 11,400 216,600
----------
TRANSPORTATION 1.9%
AIRLINES 1.0%
Alaska Air Group, Inc.* ........................ 15,200 321,100
Skywest, Inc. .................................. 5,700 97,613
----------
418,713
----------

MARINE TRANSPORTATION 0.5%
Avondale Industries, Inc.* ..................... 13,500 212,625
----------
TRUCKING 0.4%
Landstar System, Inc.* ......................... 6,200 162,750
----------
UTILITIES 5.4%
ELECTRIC UTILITIES 1.7%
Commonwealth Energy System Companies ........... 11,700 273,488
Northwestern Public Service Co. ................ 10,400 299,000
St. Joseph Light & Power Co. ................... 8,400 136,500
----------
708,988
----------

NATURAL GAS DISTRIBUTION 2.6%
Bay State Gas Co. .............................. 5,600 152,600
Energen Corp. .................................. 10,100 237,350
New Jersey Resources Corp. ..................... 5,600 160,300
North Carolina Natural Gas Corp. ............... 10,600 308,725
Northwest Natural Gas Co. ...................... 7,200 255,600
----------
1,114,575
----------

WATER SUPPLY 1.1%
Aquarion Co. ................................... 10,900 282,038
SJW Corp. ...................................... 600 22,575
Southern California Water Co. .................. 6,300 138,577
----------
443,190

- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS (Cost $37,868,706) 40,671,768
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO -- 100.0% (Cost $39,256,706)(a) 42,059,768
- --------------------------------------------------------------------------------
<FN>

(a) The cost for federal income tax purposes was $39,256,706. At August 31,
1996, net unrealized appreciation for all securities based on tax cost was
$2,803,062. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $4,032,736 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$1,229,674.

* Non-income producing security.
</FN>
</TABLE>

16 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
FINANCIAL STATEMENTS

<TABLE>
STATEMENT OF ASSETS AND LIABILITIES

AS OF AUGUST 31, 1996
<CAPTION>

<S> <C> <C>
ASSETS
- -----------------------------------------------------------------------------------------------------
Investments, at market (identified cost $39,256,706) (Note A) ............ $42,059,768
Cash ..................................................................... 793
Receivable on investments sold ........................................... 445,094
Receivable on Fund shares sold ........................................... 45,202
Dividends and interest receivable ........................................ 45,704
Deferred organization expense (Note A) ................................... 19,446
-----------
Total assets ............................................................. 42,616,007

LIABILITIES
- -----------------------------------------------------------------------------------------------------
Payable for investments purchased ........................................ $ 1,239,769
Payable for Fund shares redeemed ......................................... 36,687
Accrued expenses (Note C) ................................................ 152,365
-----------
Total liabilities ........................................................ 1,428,821
-------------------------------------------------------------------------------------------
NET ASSETS, AT MARKET VALUE .............................................. $41,187,186
-------------------------------------------------------------------------------------------

NET ASSETS
- -----------------------------------------------------------------------------------------------------
Net assets consist of:
Undistributed net investment income ...................................... $ 93,313
Net unrealized appreciation on investments ............................... 2,803,062
Accumulated net realized loss ............................................ (6,985)
Shares of beneficial interest ............................................ 30,342
Additional paid-in capital ............................................... 38,267,454
-------------------------------------------------------------------------------------------
NET ASSETS, AT MARKET VALUE .............................................. $41,187,186
-------------------------------------------------------------------------------------------

NET ASSET VALUE
- -----------------------------------------------------------------------------------------------------
NET ASSET VALUE, offering and redemption price (Note A) per share
($41,187,186/3,034,156 outstanding shares of beneficial interest, -----------
$.01 par value, unlimited number of shares authorized) ................. $13.57
-----------
</TABLE>

17 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>

<TABLE>
STATEMENT OF OPERATIONS

FOR THE PERIOD OCTOBER 6, 1995

(COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 1996
<CAPTION>

<S> <C> <C>
INVESTMENT INCOME
- ----------------------------------------------------------------------------------------------------
Income:
Dividends ................................................................ $ 444,857
Interest ................................................................. 54,116
----------
498,973

Expenses:
Management fee (Note C) .................................................. 171,544
Services to shareholders (Note C) ........................................ 140,499
Custodian and accounting fees (Note C) ................................... 127,904
Trustees' fees and expenses (Note C) ..................................... 45,631
State registration ....................................................... 39,063
Reports to shareholders .................................................. 22,139
Auditing ................................................................. 20,200
Federal registration ..................................................... 13,302
Legal .................................................................... 11,380
Amortization of organization expense (Note A) ............................ 4,305
Other .................................................................... 4,987
----------
Total expenses before reductions ......................................... 600,954
Expense reductions (Note C) .............................................. (255,284)
----------
Expenses, net ............................................................ 345,670
------------------------------------------------------------------------------------------
NET INVESTMENT INCOME .................................................... 153,303
------------------------------------------------------------------------------------------

REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
- ----------------------------------------------------------------------------------------------------
Net realized loss from investments ....................................... (6,985)
Net unrealized appreciation during the period on investments ............. 2,803,062
Net gain on investment transactions ...................................... 2,796,077
------------------------------------------------------------------------------------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ..................... $2,949,380
------------------------------------------------------------------------------------------
</TABLE>

18 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>

<TABLE>
Statement of Changes in Net Assets
<CAPTION>

FOR THE PERIOD
OCTOBER 6, 1995
(COMMENCEMENT
OF OPERATIONS) TO
INCREASE (DECREASE) IN NET ASSETS AUGUST 31, 1996
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ..................................................... $ 153,303
Net realized loss from investment transactions (6,985)
Net unrealized appreciation on investment transactions during the period .. 2,803,062
-----------
Net increase in net assets resulting from operations ...................... 2,949,380
-----------
Distributions to shareholders from net investment income .................. (61,519)
-----------
Fund share transactions:
Proceeds from shares sold ................................................. 42,630,158
Net asset value of shares issued to shareholders in reinvestment of
distributions ........................................................... 59,327
Cost of shares redeemed ................................................... (4,422,357)
Redemption fees (Note A) .................................................. 30,997
-----------
Net increase in net assets from Fund share transactions ................... 38,298,125
-----------
INCREASE IN NET ASSETS .................................................... 41,185,986
Net assets at beginning of period ......................................... 1,200
NET ASSETS AT END OF PERIOD (including undistributed net investment -----------
income of $93,313) ...................................................... $41,187,186
-----------

OTHER INFORMATION
- --------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period ................................. 100
-----------
Shares sold ............................................................... 3,368,696
Shares issued to shareholders in reinvestment of distributions ............ 4,792
Shares redeemed ........................................................... (339,432)
-----------
Net increase in Fund shares ............................................... 3,034,056
-----------
Shares outstanding at end of period ....................................... 3,034,156
-----------
</TABLE>

19 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
FINANCIAL HIGHLIGHTS

<TABLE>
The following table includes selected data for a share outstanding throughout
the period (a) and other performance information derived from the financial
statements.
<CAPTION>

FOR THE PERIOD
OCTOBER 6, 1995
(COMMENCEMENT
OF OPERATIONS) TO
AUGUST 31,
1996
- ---------------------------------------------------------------------------------
<S> <C>
------
Net asset value, beginning of period .............................. $12.00
------
Income from investment operations:
Net investment income ............................................. .07
Net realized and unrealized gain on investment transactions ....... 1.53
------
Total from investment operations .................................. 1.60
------
Less distributions from net investment income ..................... (.05)
Redemption fees (Note A) .......................................... .02
------
Net asset value, end of period .................................... $13.57
------
- ---------------------------------------------------------------------------------
TOTAL RETURN (%)(b) ............................................... 13.54(c)**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) ............................ 41
Ratio of operating expenses, net to average daily net assets (%) .. 1.50*
Ratio of operating expenses before expense reductions, to
average daily net assets (%) .................................... 2.61*
Ratio of net investment income to average daily net assets (%) .... .67*
Portfolio turnover rate (%) ....................................... 33.97*
Average commission rate paid ...................................... $.0364
<FN>

(a) Per share amounts have been calculated using the weighted average shares
outstanding during the period.
(b) Total return is higher due to maintenance of the Fund's expenses.
(c) Total return does not reflect the effect of the 1% redemption fee on shares
held less than one year.
* Annualized
** Not annualized
</FN>
</TABLE>

- --------------------------------------------------------------------------------
Pure No-Load[Trademark] Funds Pure No-Load[Trademark] Funds Pure No-Load
- --------------------------------------------------------------------------------

20 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
NOTES TO FINANCIAL STATEMENTS

A. SIGNIFICANT ACCOUNTING POLICIES

Scudder Small Company Value Fund (the "Fund") is a diversified series of Scudder
Securities Trust (the "Trust"). The Trust is organized as a Massachusetts
business trust and is registered under the Investment Company Act of 1940, as
amended, as an open-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 by the Fund in the preparation of its
financial statements.

SECURITY VALUATION. Portfolio securities which are traded on U.S. 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 National Association of Securities
Dealers Automatic Quotation ("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. Short-term investments having a
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 Trustees.

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 and the underlying collateral, is equal to at least 100.5% of the
resale price.

FEDERAL INCOME TAXES. 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 all of its taxable income to its shareholders. Accordingly,
the Fund paid no federal income taxes and no federal income tax provision was
required.

From November 1, 1995 through August 31, 1996 the Fund incurred $6,985 of net
realized capital losses which the Fund intends to elect to defer and treat as
arising in the fiscal year ending August 31, 1997.

REDEMPTION FEES. In general, shares of the Fund may be redeemed at net asset
value. However, upon the redemption or exchange of shares held by shareholders
for less than one year, a fee of 1% of the lower of cost or the current net
asset value of the shares will be assessed and retained by the Fund for the
benefit of the remaining shareholders. The redemption fee is accounted for as an
addition to paid-in capital.

DISTRIBUTION OF INCOME AND GAINS. Distributions of net investment income are
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.

21 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>

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. 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.

ORGANIZATION COSTS. Costs incurred by the Fund in connection with its
organization have been deferred and are being amortized on a straight-line basis
over a five-year period.

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 an accrual basis.

B. PURCHASES AND SALES OF SECURITIES

During the period October 6, 1995 (commencement of operations) to August 31,
1996, purchases and sales of investment securities (excluding short-term
investments) aggregated $46,153,298 and $8,277,607, respectively.

C. RELATED PARTIES

Under the Fund's Investment Management Agreement (the "Agreement") with Scudder,
Stevens & Clark, Inc. (the "Adviser"), the Fund pays the Adviser a fee equal to
an annual rate of 0.75% of the Fund's average daily net assets, computed and
accrued daily and payable monthly. As manager of the assets of the Fund, the
Adviser directs the investments of the Fund in accordance with its investment
objectives, policies, and restrictions. The Adviser determines the securities,
instruments, and other contracts relating to investments to be purchased, sold
or entered into by the Fund. In addition to portfolio management services, the
Adviser provides certain administrative services in accordance with the
Agreement. The Agreement also provides that if the Fund's expenses, exclusive of
taxes, interest, and extraordinary expenses, exceed specified limits, such
excess, up to the amount of the management fee, will be paid by the Adviser. In
addition, the Adviser has agreed not to impose all or a portion of its
management fee until December 31, 1996 in order to maintain the annualized
expenses of the Fund at not more than 1.50% of average daily net assets. For the
period October 6, 1995 (commencement of operations) to August 31, 1996, the
Adviser did not impose any of its management fee amounting to $171,544.

Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, is the
transfer, dividend paying and shareholder service agent for the Fund. For the
period October 6, 1995 (commencement of operations) to August 31, 1996, SSC did
not impose a portion of their fee amounting to $50,693, and the fee imposed
amounted to $57,935.

Scudder Trust Company ("STC"), a subsidiary of the Adviser, provides
recordkeeping and other services in connection with certain retirement and
employee benefit plans invested in the Fund. For the period October 6, 1995
(commencement of operations) to August 31, 1996, STC did not impose a portion of
their fee amounting to $1,082, and the fee imposed amounted to $1,236.

22 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>

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 period October
6, 1995 (commencement of operations) to August 31, 1996, SFAC did not impose a
portion of their fee amounting to $31,965, and the fee imposed amounted to
$36,531.

The Fund pays each of its Trustees not affiliated with the Adviser $4,000
annually, plus specified amounts for attended board and committee meetings. For
the period October 6, 1995 (commencement of operations) to August 31, 1996,
Trustees' fees and expenses aggregated $45,631.

D. LINES OF CREDIT

The Fund and several affiliated Funds (the "Participants") share in a $500
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 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 33.33% of its net assets under the agreement. In addition, the Fund
also maintains an uncommitted line of credit.

23 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

TO THE TRUSTEES OF SCUDDER SECURITIES TRUST AND THE SHAREHOLDERS OF SCUDDER
SMALL COMPANY VALUE FUND:

We have audited the accompanying statement of assets and liabilities of Scudder
Small Company Value Fund, including the investment portfolio, as of August 31,
1996, and the related statement of operations, the statement of changes in net
assets, and the financial highlights for the period October 6, 1995
(commencement of operations) to August 31, 1996. 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 audit.

We conducted our audit 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 August 31, 1996 by
correspondence with the custodian and brokers. 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 audit provides 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
Scudder Small Company Value Fund as of August 31, 1996, the results of its
operations, the changes in its net assets, and the financial highlights for the
period October 6, 1995 (commencement of operations) to August 31, 1996, in
conformity with generally accepted accounting principles.

Boston, Massachusetts COOPERS & LYBRAND L.L.P.
October 7, 1996

24 -- SCUDDER SMALL COMPANY VALUE FUND

<PAGE>
Officers and Trustees

Daniel Pierce*
President and Trustee

Paul Bancroft III
Trustee; Venture Capitalist and Consultant

Thomas J. Devine
Trustee; Consultant

Keith R. Fox
Trustee; President, Exeter Capital Management Corporation

Dudley H. Ladd*
Trustee

Dr. Wilson Nolen
Trustee; Consultant

Juris Padegs*
Trustee

Dr. Gordon Shillinglaw
Trustee; Professor Emeritus of Accounting, Columbia University Graduate School
of Business

Robert W. Lear
Honorary Trustee; Executive-in-Residence, Visiting Professor,
Columbia University Graduate School of Business

Robert G. Stone, Jr.
Honorary Trustee; Chairman of the Board and Director, Kirby Corporation

Edmund R. Swanberg*
Honorary Trustee

Peter Chin*
Vice President

James M. Eysenbach*
Vice President

Philip S. Fortuna*
Vice President

Jerard K. Hartman*
Vice President

Thomas W. Joseph*
Vice President

David S. Lee*
Vice President

Roy C. McKay*
Vice President

Thomas F. McDonough*
Vice President and Secretary

Pamela A. McGrath*
Vice President and Treasurer

Edward J. O'Connell*
Vice President and Assistant Treasurer

Kathryn L. Quirk*
Vice President and Assistant Secretary

Richard W. Desmond*
Assistant Secretary

Coleen Downs Dinneen*
Assistant Secretary

*Scudder, Stevens & Clark, Inc.

25 - Scudder Small Company Value Fund

<PAGE>

Investment Products and Services

The Scudder Family of Funds
================================================================================
Money Market
Scudder Cash Investment Trust
Scudder U.S. Treasury Money Fund

Tax Free Money Market+
Scudder Tax Free Money Fund
Scudder California Tax Free Money Fund*
Scudder New York Tax Free Money Fund*

Tax Free+
Scudder California Tax Free Fund*
Scudder High Yield Tax Free Fund
Scudder Limited Term Tax Free Fund
Scudder Managed Municipal Bonds
Scudder Massachusetts Limited Term
Tax Free Fund*
Scudder Massachusetts Tax Free Fund*
Scudder Medium Term Tax Free Fund
Scudder New York Tax Free Fund*
Scudder Ohio Tax Free Fund*
Scudder Pennsylvania Tax Free Fund*

Growth and Income
Scudder Balanced Fund
Scudder Growth and Income Fund

Income
Scudder Emerging Markets Income Fund
Scudder Global Bond Fund
Scudder GNMA Fund
Scudder High Yield Bond Fund
Scudder Income Fund
Scudder International Bond Fund
Scudder Short Term Bond Fund
Scudder Zero Coupon 2000 Fund

Growth
Scudder Capital Growth Fund
Scudder Classic Growth Fund
Scudder Development Fund
Scudder Emerging Markets Growth Fund
Scudder Global Discovery Fund
Scudder Global Fund
Scudder Gold Fund
Scudder Greater Europe Growth Fund
Scudder International Fund
Scudder Latin America Fund
Scudder Micro Cap Fund
Scudder Pacific Opportunities Fund
Scudder Quality Growth Fund
Scudder Small Company Value Fund
Scudder 21st Century Growth Fund
Scudder Value Fund
The Japan Fund

Retirement Plans and Tax-Advantaged Investments
================================================================================
IRAs
Keogh Plans
Scudder Horizon Plan*+++ (a variable annuity)
401(k) Plans
403(b) Plans
SEP-IRAs
Profit Sharing and Money Purchase
Pension Plans

Closed-End Funds#
================================================================================
The Argentina Fund, Inc.
The Brazil Fund, Inc.
The First Iberian Fund, Inc.
The Korea Fund, Inc.
The Latin America Dollar Income Fund, Inc.
Montgomery Street Income Securities, Inc.
Scudder New Asia Fund, Inc.
Scudder New Europe Fund, Inc.
Scudder World Income Opportunities
Fund, Inc.

Institutional Cash Management
================================================================================
Scudder Institutional Fund, Inc.
Scudder Fund, Inc.
Scudder Treasurers Trust(TM)++

For complete information on any of the above Scudder funds, including management
fees and expenses, call or write for a free prospectus. Read it carefully before
you invest or send money. +A portion of the income from the tax-free funds may
be subject to federal, state, and local taxes. *Not available in all states.
+++A no-load variable annuity contract provided by Charter National Life
Insurance Company and its affiliate, offered by Scudder's insurance agencies,
1-800-225-2470. #These funds, advised by Scudder, Stevens & Clark, Inc., are
traded on various stock exchanges. ++For information on Scudder Treasurers
Trust,(TM) an institutional cash management service that utilizes certain
portfolios of Scudder Fund, Inc. ($100,000 minimum), call 1-800-541-7703.

26 - Scudder Small Company Value Fund

<PAGE>
How to Contact Scudder

Account Service and Information

For existing account service and transactions

Scudder Investor Relations
1-800-225-5163

For personalized information about your Scudder accounts;
exchanges and redemptions; or information on any Scudder fund

Scudder Automated Information Line (SAIL)
1-800-343-2890

Investment Information

To receive information about the Scudder funds, for additional
applications and prospectuses, or for investment questions

Scudder Investor Relations
1-800-225-2470

For establishing 401(k) and 403(b) plans

Scudder Defined Contribution Services
1-800-323-6105

Please address all correspondence to

The Scudder Funds
P.O. Box 2291
Boston, Massachusetts
02107-2291

Visit the Scudder World Wide Web Site at:

http://funds.scudder.com

Or Stop by a Scudder Funds Center

Many shareholders enjoy the personal, one-on-one service of the
Scudder Funds Centers. Check for a Funds Center near you--they
can be found in the following cities:
Boca Raton New York
Boston Portland, OR
Chicago San Diego
Cincinnati San Francisco
Los Angeles Scottsdale

For information on Scudder Treasurers Trust(TM), an
institutional cash management service for corporations,
non-profit organizations and trusts which utilizes certain
portfolios of Scudder Fund, Inc.* ($100,000 minimum), call:
1-800-541-7703.

For information on Scudder Institutional Funds*, funds designed
to meet the broad investment management and service needs of
banks and other institutions, call:
1-800-854-8525.

Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.

* Contact Scudder Investor Services, Inc., Distributor, to receive a
prospectus with more complete information, including management fees and
expenses. Please read it carefully before you invest or send money.

27 - Scudder Small Company Value Fund

<PAGE>

Celebrating Over 75 Years of Serving Investors

Established in 1919 by Theodore Scudder, Sidney Stevens, and F. Haven Clark,
Scudder, Stevens & Clark was the first independent investment counsel firm in
the United States. Since its birth, Scudder's pioneering spirit and commitment
to professional long-term investment management have helped shape the investment
industry. In 1928, we introduced the nation's first no-load mutual fund. Today
we offer over 40 pure no load(TM) funds, including the first international
mutual fund offered to U.S. investors.

Over the years, Scudder's global investment perspective and dedication to
research and fundamental investment disciplines have helped us become one of the
largest and most respected investment managers in the world. Though times have
changed since our beginnings, we remain committed to our long-standing
principles: managing money with integrity and distinction; keeping the interests
of our clients first; providing access to investments and markets that may not
be easily available to individuals; and making investing as simple and
convenient as possible through friendly, comprehensive service.

This information must be preceded or accompanied by a current prospectus.

Portfolio changes should not be considered recommendations for action by
individual investors.