This information must be preceded or accompanied by a current prospectus.
Portfolio changes should not be considered recommendations for action by
individual investors.
Scudder
Greater Europe
Growth Fund
Annual Report
October 31, 1995
o For investors seeking long-term growth of capital through investment
primarily in the equity securities of European companies.
o A pure no-load(TM) fund with no commissions to buy, sell, or exchange shares.
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
CONTENTS
2 In Brief
3 Letter from the Fund's Chairman
4 Performance Update
5 Portfolio Summary
6 Portfolio Management Discussion
10 Investment Portfolio
16 Financial Statements
19 Financial Highlights
20 Notes to Financial Statements
24 Report of Independent Accountants
25 Tax Information
25 Officers and Directors
26 Investment Products and Services
27 How to Contact Scudder
IN BRIEF
- - Scudder Greater Europe Growth Fund provided a total return of 15.06% for the
12 months ended October 31, 1995, comfortably outperforming the average
European region fund tracked by Lipper Analytical Services, Inc.
- - European markets are attractively valued and the outlook for earnings and
dividend growth remains constructive. While uncertainties surrounding the
prospect of Western Europe's economic integration preoccupy the market,
growth is moderate, inflation is under control, and lower interest rates are
anticipated--an excellent scenario for investors, in our opinion.
- - Portfolio focus is on selecting stocks of European companies positioned to
benefit from market opportunities that develop, whether domestic, regional,
or global. Fund holdings currently include emerging global competitors such
as the fast-growing German software manufacturer SAP, as well as companies
with a domestic focus such as Telecom Italia Mobile, the primary supplier of
cellular phone service in Italy.
2
<PAGE>
LETTER FROM THE FUND'S CHAIRMAN
Dear Shareholders,
Over the past 12 months, several European bourses rallied strongly as
Europe enjoyed the benefits of low inflation, moderate economic growth, and
monetary easing. Volatility in the currency markets created concerns for
investors, but generally the markets have trended upward in dollar terms. We are
particularly pleased with the return of Scudder Greater Europe Growth Fund for
the annual period ended October 31, 1995. The Fund's 15.06% total return is
clearly above-average when measured against its benchmark index and the average
return of its peer group.
Although strong, European markets have failed to keep pace with the
U.S. stock market, which returned 26.44% for the Fund's fiscal year. The fact
that the U.S. market has outperformed European markets on the whole suggests
that European markets are attractively valued by comparison. We expect relative
valuations to change in the coming months as the U.S. stock market peaks under
pressure from slowing earnings growth and as several factors combine to heighten
demand for non-U.S. investments. Furthermore, we believe economic cycles in many
foreign markets are more favorable for equity investment than in the United
States, and Europe in particular has yet to realize the full benefits of ongoing
privatization and corporate restructuring. In view of these conditions, we are
confident that Scudder Greater Europe Growth Fund is well-positioned to provide
attractive returns for its shareholders over time.
We would also like to take this opportunity to announce that on October
6, 1995, we introduced Scudder Small Company Value Fund, a pure no-load(TM)
mutual fund designed to seek long-term growth of capital through a disciplined,
value-oriented approach to small-stock investing. For more information about
Scudder Small Company Value Fund and other investment products and services, see
page 26.
Sincerely,
/s/Edmond D. Villani
Edmond D. Villani
Chairman,
Scudder Greater Europe Growth Fund
3
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
PERFORMANCE UPDATE as of October 31, 1995
- -----------------------------------------------------------------
GROWTH OF A $10,000 INVESTMENT
- -----------------------------------------------------------------
SCUDDER GREATER EUROPE GROWTH FUND
- ----------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $11,506 15.06% 15.06%
Life of
Fund* $11,679 16.79% 15.81%
MORGAN STANLEY CAPITAL INTERNATIONAL
(MSCI) EUROPE 14 INDEX
- --------------------------------------
Total Return
Period Growth --------------
Ended of Average
10/31/95 $10,000 Cumulative Annual
- -------- ------- ---------- ------
1 Year $11,321 13.21% 13.21%
Life of
Fund* $11,321 13.21% 13.21%
* The Fund commenced operations on
October 10, 1994. Index comparisons
begin October 31, 1994.
A chart in the form of a line graph appears here,
illustrating the Growth of a $10,000 Investment.
The data points from the graph are as follows:
Scudder Greater Europe Growth Fund
Year Amount
- ----------------------
10/94* $10,000
1/95 $ 9,466
4/95 $10,371
7/95 $11,482
10/95 $11,506
Morgan Stanley Capital International
(MSCI) Europe 14 Index
Year Amount
- ----------------------
10/94* $10,000
1/95 $ 9,596
4/95 $10,597
7/95 $11,485
10/95 $11,321
The Morgan Stanley Capital International (MSCI) Europe 14 Index is
an unmanaged capitalization-weighted measure of 14 stock markets
in Europe. Index returns assume dividends reinvested net of
withholding tax and, unlike Fund returns, do not reflect any fees
or expenses.
- -----------------------------------------------------------------
RETURNS AND PER SHARE INFORMATION
- -----------------------------------------------------------------
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) and Index Total
Return (%) with the exact data points listed in the table
below.
YEARLY PERIODS ENDED OCTOBER 31
1994* 1995
--------------------
NET ASSET VALUE... $12.18 $13.99
INCOME DIVIDENDS.. $ -- $ .02
FUND TOTAL
RETURN (%)........ 1.50 15.06
INDEX TOTAL
RETURN (%)........ -- 13.21
All performance is historical, assumes reinvestment of all dividends and
capital gains, and is not indicative of future results.
Investment return and principal value will fluctuate, so an investor's
shares, when redeemed, may be worth more or less than when purchased.
If the Adviser had not maintained the Fund's expenses, the average annual
total return for the one year and life of Fund periods would have been
lower.
4
<PAGE>
PORTFOLIO SUMMARY as of October 31, 1995
- ---------------------------------------------------------------------------
GEOGRAPHICAL (Excludes 10% Cash Equivalents)
- ---------------------------------------------------------------------------
United Kingdom 16%
France 16% European markets are attractively
Germany 12% values and the outlook for
Italy 11% earnings growth is positive.
Netherlands 11%
Spain 10%
Sweden 9%
Switzerland 6%
Austria 3%
Other 6%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------
SECTORS (Excludes 10% Cash Equivalents)
- --------------------------------------------------------------------------
Manufacturing 13%
Financial 12% Europe is homebase to a
Consumer Staples 12% number of global leaders in
Health 10% new, rapidly growing industries
Consumer Discretionary 9% as well as in established
Durables 8% industries which enjoy dynamic
Energy 6% growth prospects in the
Communications 6% emerging nations of the world.
Service Industries 5%
Other 19%
----
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. TELECOM ITALIA MOBILE SPA
Cellular telecommunication services in Italy
2. GUCCI GROUP
Designer and producer of personal luxury accessories
and apparel in Italy
3. BULGARIA SPA
Manufacturer and retailer of fine jewelry, luxury watches
and perfumes in Italy
4. HEINEKEN HOLDINGS N.V.
Brewery in the Netherlands
5. SMITHKLINE BEECHAM
Manufacturer of ethical drugs and healthcare products in
the United Kingdom
6. VEBA AG
Electric utility, distributor of oil and chemicals in Germany
7. NEXT PLC
Retailer of clothing, accessories and fashion jewelry, also
through home shopping, in the United Kingdom
8. L.M. ERICSSON TELEPHONE CO.
Leading manufacturer of cellular telephone equipment in Sweden
9. SAP AG
Computer software manufacturer in Germany
10. CARREFOUR
Hypermarket and food retailing in France
Holdings include emerging global competitors as well as companies
with a domestic focus.
- --------------------------------------------------------------------------
For more complete details about the Fund's Investment Portfolio,
see page 10.
A monthly Investment Portfolio Summary and quarterly Portfolio Holdings
are available upon request.
5
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
PORTFOLIO MANAGEMENT DISCUSSION
Dear Shareholders,
Scudder Greater Europe Growth Fund provided a total return of 15.06%
for the 12 months ended October 31, 1995, including price change plus an income
distribution of $0.02 per share. The Fund's net asset value on October 31, 1995,
was $13.99, up from $12.18 on October 31, 1994. The Fund comfortably
outperformed the average European region fund tracked by Lipper Analytical
Services, Inc., which returned 9.33% for the period. The Fund's return also
exceeded the 13.21% return of the unmanaged MSCI Europe 14 Index.
Review: Market and Economic Environment
Early in the Fund's fiscal year, global markets were shaken by a series
of events including rising interest rates, the peso devaluation in Mexico, and a
devastating earthquake in Japan. These setbacks exacerbated anxiety over
European political turbulence and economic divergence, and currency volatility
drove investors to the safety of the deutschemark. In March, pessimism was
replaced by optimism as interest rates eased globally. European markets powered
ahead driven by expectations for economic recovery and the perception that the
Bundesbank was pursuing a less restrictive interest rate policy, setting the
stage for other central banks to do the same. However, political will has been
in some cases at odds with the fiscal austerity measures required by economic
integration. Until agendas become clearer, this tension will be played out in
the marketplace. Moreover, in recent weeks, concerns about the viability of
European Monetary Union have emerged, and European equities have retraced some
of their gains as investors once again focus on exchange rates.
Most European markets displayed positive performance over the past 12
months. The Nordic markets ranked among the top performers, with Sweden and
Finland rising 26.3% and 15.6% in local terms, respectively. Two of the Fund's
holdings, Ericsson and Nokia, global players in cellular telecommunications,
helped propel these indices. The U.K. market returned a positive 12.5% in local
terms, buoyed by a torrid Wall Street, a more favorable interest rate
environment, and continued industry consolidation. U.K. holdings such as
PowerGen, Southern Electric, Royal Bank of Scotland, and Zeneca were excellent
performers due to merger activity in their respective industries. Though France
had positive returns for the period, performance lagged that of other European
markets, as the proposed 1996 budget called into question the government's
commitment to fiscal rectitude in the face of domestic opposition to cuts in
6
<PAGE>
social spending programs. Markets in Switzerland and the Netherlands rose 37.4%
and 15.6% respectively, with several portfolio holdings reflecting the strength
of these markets.
Looking Ahead
In Europe, growth is moderate, inflation is low, and labor costs are
under control. Budgetary concerns, however, currently preoccupy the markets as
the timetable for economic integration draws nearer. Investors are fearful that
economic activity may be weakened and market sentiment dampened by fiscal
tightening and currency volatility. On the positive side, slower growth and
moderate inflation create a favorable backdrop for further policy easing by the
Bundesbank. In addition, we believe European markets are attractively valued,
and the outlook for earnings and dividend growth remains constructive. Though
political uncertainty will likely persist, resulting in currency volatility, our
view is that such episodes will present buying opportunities, particularly if
the result is easier monetary policy as may be the case in France.
There are concerns that upcoming privatizations will cloud market
performance in Europe. We believe that well-managed privatization programs do
not pose a risk. This has been illustrated in the U.K., where far-reaching
deregulation over time has correlated with high equity returns. A major feature
of Germany's market in 1996 will be the $11 billion privatization of Deutsche
Telekom, which we believe will sow the seeds for broader participation in German
equities.
Portfolio Strategy and Key Holdings
Portfolio focus is on selecting stocks of European companies positioned
to benefit from market opportunities that develop, whether domestic, regional,
or global. We are pleased with the outstanding returns this year of a number of
holdings. Fund performance has been enhanced by positions in emerging European
global competitors such as SAP, the fast-growing German software manufacturer,
and Nordic telecommunication companies Nokia and Ericsson. The portfolio
currently is also invested in telecommunication stocks with a domestic focus,
such as Telecom Italia Mobile, the primary supplier of cellular phone service in
Italy. Italy has the fastest-growing cellular market in Europe, and recent stock
price appreciation reflects the strong earnings momentum anticipated over the
next few years.
7
<PAGE>
Holdings Heineken and Carrefour feature key characteristics of
high-quality growth stocks. Netherlands-based Heineken produces one of the most
popular beers in the world. In the face of slowing beer consumption, the company
has built a strong position in the premium segment of the market and is
expanding in Asia and Eastern Europe. Heineken has undergone significant
restructuring and demonstrated its ability to produce consistently strong
earnings and dividend growth. Carrefour is a leading French food retailer. The
company is present in multiple segments of the food retailing market in France,
where it pioneered the concept of hypermarkets -- a cross between a U.S.
supermarket and a Wal-Mart. Carrefour has made a determined effort to diversify
its sources of revenue and earnings geographically; the company's significant
presence in Spain and Latin America and recent inroads into Asia are indicative
of success in this regard.
In a macroeconomic environment where growth appears to be slowing,
holdings with a more defensive tilt, such as pharmaceuticals, have done well.
Ciba-Geigy is a Swiss pharmaceutical conglomerate with a well-diversified
product range. The company has undertaken substantial restructuring, disposing
of lower-margin non-healthcare businesses and reducing its cost base. SmithKline
Beecham, based in the U.K., is a diversified global pharmaceutical manufacturer
with a strong product pipeline. The company is capitalizing on the changing face
of the global healthcare industry and has built up a major presence in the
European over-the-counter market. SmithKline Beecham has leveraged its existing
strengths with the purchase of DPS, a pharmaceutical benefit manager that serves
as a liaison between HMOs and the drug companies.
Many U.K. industries are consolidating in the face of increasing global
competitive pressures, more moderate growth forecasts for the world economy, and
the fear that a potential victory for the Labor party may result in more
government intervention. The Fund is positioned to benefit from this trend. Two
holdings, PowerGen and Southern Electric -- high-quality utilities with
excellent dividend growth prospects and attractive valuations -- were bid up
over the period as focus on prospective mergers in the utility sector
intensified. Another holding, Royal Bank of Scotland, offers the best exposure
to technological advances in the banking and insurance sectors, in our opinion.
Through its Direct Line subsidiary, the bank has innovated the way insurance
products are sold in the U.K. and has expanded into mortgage services. One of
8
<PAGE>
the few viable targets in the market, the bank's stock has rallied as the result
of scrutiny by potential partners.
Ongoing political turmoil may provide a volatile backdrop, but many
Italian companies are nevertheless prospering on the strength of their positions
in attractive market niches. The Fund has profited from its investment in
several of these companies. For example, Luxottica is a world leader in eyeglass
frame manufacture, capitalizing on its skilled, flexible, and relatively
cost-competitive labor force, as well as its marketing and design strengths.
Volume growth and expanding margins from product mix upgradings have supported
consistent earnings growth of 15-20% a year. The luxury goods market is another
appealing niche, as ever-more-discerning consumers are willing to pay up for the
perceived quality of select franchises. Fund holdings Bulgari and Gucci possess
such franchises. Both companies have recently offered their shares to the market
and have managements with sound business plans.
A Broad Range of Opportunities
The European arena offers investors a wide range of investment
opportunities. Europe is home to a number of global leaders in new, rapidly
growing industries such as software and mobile communications, as well as in
established industries that enjoy dynamic growth prospects in the emerging
nations of the world. The process of European integration and industry
restructuring will spawn stronger companies. New companies are coming to the
market, and over time the broadening and deepening of Europe's own emerging
markets will provide a further dimension. Scudder Greater Europe Growth Fund
continues to offer long-term investors a diversified approach to participating
in these exciting opportunities.
Sincerely,
Your Portfolio Management Team
/s/Carol L. Franklin /s/Nicholas Bratt
Carol L. Franklin Nicholas Bratt
/s/Joan R. Gregory
Joan R. Gregory
Scudder Greater Europe
Growth Fund:
A Team Approach to Investing
Scudder Greater Europe Growth 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 economists, research 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.
Carol L. Franklin, Lead Portfolio Manager, sets Fund investment strategy and
oversees its daily operation. Carol joined Scudder in 1981 and has nine years of
European research and investment management experience. Nicholas Bratt,
Portfolio Manager, helps set the Fund's general investment strategies. Nick has
over 20 years of experience in worldwide investing and has been with Scudder
since 1976. Joan R. Gregory, Portfolio Manager, focuses on stock selection, a
role she has played since she joined Scudder in 1992. Joan has been involved
with investment in global and international stocks as an assistant portfolio
manager since 1989.
9
<PAGE>
<TABLE>
<CAPTION>
SCUDDER GREATER EUROPE GROWTH FUND
INVESTMENT PORTFOLIO as of October 31, 1995
- --------------------------------------------------------------------------------------------------------------------------------
% of Principal Market
Portfolio Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2.9% REPURCHASE AGREEMENT
----------------------------------------------------------------------------------------------------
1,179,000 Repurchase Agreement with Donaldson, Lufkin &
Jenrette dated 10/31/95 at 5.875% to be repurchased at
$1,179,192 on 11/1/95,collateralized by a $784,000 U.S.
Treasury Bond, 12%, 8/15/13 (Cost $1,179,000) . . . . . . . . . . 1,179,000
---------------
--------------------------------------------------------------------------------------------------
7.1% SHORT-TERM NOTE
--------------------------------------------------------------------------------------------------
2,870,000 Federal Home Loan Mortgage Corp.
Discount Note, 5.85%, 11/1/95
(Cost $2,870,000). . . . . . . . . . . . . . . . . . . . . . . . 2,870,000
---------------
--------------------------------------------------------------------------------------------------
3.4% PREFERRED STOCKS
--------------------------------------------------------------------------------------------------
Shares
--------------------------------------------------------------------------------------------------
GERMANY 2.4%
1,475 RWE AG (Producer and marketer of
petroleum and chemical products). . . . . . . . . . . . . . . . . 418,075
3,750 SAP AG (Computer software manufacturer) . . . . . . . . . . . . . 575,407
---------------
993,482
---------------
ITALY 1.0%
200,000 Fiat SpA (Multi-industry, automobiles). . . . . . . . . . . . . . 395,356
---------------
Total Preferred Stocks (Cost $1,057,081). . . . . . . . . . . . . 1,388,838
---------------
--------------------------------------------------------------------------------------------------
86.6% COMMON STOCKS
--------------------------------------------------------------------------------------------------
AUSTRIA 3.0% 6,400 Flughafen Wien AG (Operator of terminals
and facilities at Vienna International Airport) . . . . . . . . 411,089
2,800 OMV AG (Oil and gas company). . . . . . . . . . . . . . . . . . . 241,782
3,600 VAE Eisenbahnsysteme AG (Manufacturer of
electronic control systems for use in rail
transportation technology). . . . . . . . . . . . . . . . . . . . 322,133
4,000 Verbund (Leading supplier of hydro-electricity) . . . . . . . . . 244,407
---------------
1,219,411
---------------
DENMARK 1.0%
9,200 Unidanmark A/S "A" (Bank holding company) . . . . . . . . . . . . 422,621
FINLAND 1.8%
9,060 Nokia AB Oy (Preference) (Leading
manufacturer of cellular telephones). . . . . . . . . . . . . . . 518,379
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- ----
10
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------------------------------------------------------
% of Market
Portfolio Shares Value ($)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
14,300 Outokumpu Oy "A" (Metals and minerals). . . . . . . . . . . . . . 227,275
---------------
745,654
---------------
FRANCE 14.0%
5,800 AXA (Insurance group providing insurance,
finance and real estate services worldwide) . . . . . . . . . . . 322,803
950 Carrefour (Hypermarket and food retailing). . . . . . . . . . . . 559,098
5,000 Club Mediterranee (Operator of informal
vacation resorts) * . . . . . . . . . . . . . . . . . . . . . . . 392,930
5,000 Club Mediterranee Rights *. . . . . . . . . . . . . . . . . . . . 4,939
3,550 Compagnie Bancaire SA (Bank). . . . . . . . . . . . . . . . . . . 368,822
1,025 Comptoirs Modernes (Operator of
supermarkets, grocery and department
stores) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329,764
1,475 ECIA - Equipements et Composants pour
l'Industrie Automobile (Manufacturer of
automobile parts and accessories) . . . . . . . . . . . . . . . . 179,841
2,000 Ecco SA (International business contractor
active in employment services, industrial
surveillance, cleaning and sanitation). . . . . . . . . . . . . . 310,656
2,890 Essilor International (Manufacturer of various
types of lenses, eyeglasses, contact lenses
and optical measuring instruments). . . . . . . . . . . . . . . . 535,953
1,800 LVMH Moet-Hennessy Louis Vuitton (Producer
of wine, spirits and luxury products) . . . . . . . . . . . . . . 358,893
3,975 La Brosse et Du Pont (Toiletries manufacturer). . . . . . . . . . 250,881
9,870 Michelin "B" (Leading tire manufacturer) *. . . . . . . . . . . . 399,452
6,200 Sligos SA (Electrical payment and computing
engineering services company) . . . . . . . . . . . . . . . . . . 537,418
5,200 Synthelabo (Pharmaceutical and biomedical
producer) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 335,443
6,867 Total SA "B" (International oil and gas
exploration, development and production). . . . . . . . . . . . . 425,247
7,919 Valeo SA (Automobile and truck components
manufacturer) . . . . . . . . . . . . . . . . . . . . . . . . . . 358,465
---------------
5,670,605
---------------
GERMANY 8.3%
1,500 Bankgesellschaft Berlin AG (Commercial bank). . . . . . . . . . . 442,211
6,000 Deutsche Bank AG (Bank) . . . . . . . . . . . . . . . . . . . . . 271,379
4,085 Kampa-Haus AG (Designing and construction
of prefabricated houses and sub-assemblies) . . . . . . . . . . . 162,216
1,475 Mannesmann AG (Bearer) (Diversified
construction and technology company). . . . . . . . . . . . . . . 485,450
5,950 Schering AG (Pharmaceutical and
chemical producer). . . . . . . . . . . . . . . . . . . . . . . . 415,067
900 Siemens AG (Bearer) (Manufacturer of
electrical and electronic equipment). . . . . . . . . . . . . . . 471,833
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
----
11
<PAGE>
<TABLE>
<CAPTION>
SCUDDER GREATER EUROPE GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------
% of Market
Portfolio Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
14,950 VEBA AG (Electric utility, distributor of oil
and chemicals). . . . . . . . . . . . . . . . . . . . . . . 613,739
1,200 Viag AG (Provider of electrical power and
natural gas services, aluminum products,
chemicals, ceramics and glass). . . . . . . . . . . . . . . 487,178
-------------
3,349,073
-------------
IRELAND 1.1%
116,717 Irish Life PLC (Provider of life and disability
insurance and pensions) . . . . . . . . . . . . . . . . . . 428,950
-------------
ITALY 9.0%
100,000 Bulgari SpA (Manufacturer and retailer of fine
jewelry, luxury watches and perfumes) * . . . . . . . . . . 869,156
30,500 Gucci Group (New York registered Shares)
(Designer and producer of personal
luxury accessories and apparel)*. . . . . . . . . . . . . . 915,000
7,500 Luxottica Group SpA (ADR) (Manufacturer
and marketer of eyeglasses) . . . . . . . . . . . . . . . . 365,625
572,000 Telecom Italia Mobile SpA (Cellular
telecommunication services) * . . . . . . . . . . . . . . . 960,213
110,000 Telecom Italia SpA (Telecommunication
services) . . . . . . . . . . . . . . . . . . . . . . . . . 167,054
55,000 Unicem SpA (Cement producer) *. . . . . . . . . . . . . . . 345,152
-------------
3,622,200
-------------
NETHERLANDS 9.5%
2,550 Akzo-Nobel N.V. (Chemical producer) . . . . . . . . . . . . 290,427
9,300 Baan Company, N.V. (Producer of business
management computer software) * . . . . . . . . . . . . . . 395,250
17,000 Bols Wessanen CVA (Producer and distributor
of food products) . . . . . . . . . . . . . . . . . . . . . 336,164
8,119 Getronics N.V. (Computer and software
distributor). . . . . . . . . . . . . . . . . . . . . . . . 387,477
3,906 Heineken Holdings N.V. "A" (Brewery). . . . . . . . . . . . 646,173
14,100 Koninklijke PTT Nederland (Telecommunication
services) . . . . . . . . . . . . . . . . . . . . . . . . . 495,975
12,330 Philips Electronics N.V. (Leading manufacturer
of electrical equipment). . . . . . . . . . . . . . . . . . 476,695
3,160 Telegraaf Holdings CVA (Newspaper publisher). . . . . . . . 454,633
4,000 Wolters Kluwer CVA (Publisher). . . . . . . . . . . . . . . 364,051
-------------
3,846,845
-------------
NORWAY 1.1%
35,700 Saga Petroleum AS "A" (Free) (Oil and gas
exploration and production) . . . . . . . . . . . . . . . . 447,074
-------------
PORTUGAL 0.8%
17,400 Portugal Telecom SA (Telecommunication
services) * . . . . . . . . . . . . . . . . . . . . . . . . 329,452
-------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- ----
12
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
INVESTMENT PORTFOLIO
- ------------------------------------------------------------------------------------------------------------------------
% of Market
Portfolio Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
SPAIN 9.0%
4,400 Acerinox, S.A (Stainless steel producer). . . . . . . . . . 459,173
8,000 Banco Bilbao Vizcaya, S.A. (Leading
financial group). . . . . . . . . . . . . . . . . . . . . . 244,560
2,800 Banco Popular Espanol, S.A. (Retail bank) . . . . . . . . . 444,962
11,000 Centros Comerciales Pryca, SA (Owner and
operator of hypermarkets selling consumer
products including groceries, appliances
and clothing) . . . . . . . . . . . . . . . . . . . . . . . 234,397
30,000 Compania Telefonica Nacional de Espana S.A.
(Telecommunication services). . . . . . . . . . . . . . . . 378,642
13,200 Cortefiel, S.A. (Operator of retail clothing stores
and clothing manufacturer). . . . . . . . . . . . . . . . . 389,460
3,000 Cristaleria Espanola, S.A. (Producer of sheet
glass and glass fibers for construction) *. . . . . . . . . 186,862
15,570 Repsol SA (Integrated oil company). . . . . . . . . . . . . 465,128
42,000 Uralita, SA (Processor of concrete pipes and
cement for the construction industry) . . . . . . . . . . . 423,391
4,300 Zardoya-Otis SA (Manufacturer and installer
of elevator equipment). . . . . . . . . . . . . . . . . . . 420,080
-------------
3,646,655
-------------
SWEDEN 8.2%
13,350 Astra AB "A" (Free) (Pharmaceutical company). . . . . . . . 490,421
8,000 Autoliv AB (Free) (Manufacturer of safety
airbags for automobiles). . . . . . . . . . . . . . . . . . 458,894
6,900 Hennes & Mauritz AB "B" (Free) (Clothing
and cosmetics retailer throughout Europe) . . . . . . . . . 450,855
27,720 L.M. Ericsson Telephone Co. "B" (ADR)
(Leading manufacturer of cellular
telephone equipment). . . . . . . . . . . . . . . . . . . . 592,082
7,700 Mo och Domsjo AB "B" (Free) (Manufacturer
of newsprint, paperboard, and various sawn
timber products). . . . . . . . . . . . . . . . . . . . . . 391,837
21,000 S.K.F. AB "A" (Free) (Manufacturer of roller
bearings) . . . . . . . . . . . . . . . . . . . . . . . . . 390,467
21,000 Skandia Foersaekrings AB (Free) (Financial
conglomerate) . . . . . . . . . . . . . . . . . . . . . . . 532,742
-------------
3,307,298
-------------
SWITZERLAND 5.0%
130 Baloise Holding Ltd. (Registered) (Provider
of private, commercial and corporate
insurance, life insurance, international
reinsurance). . . . . . . . . . . . . . . . . . . . . . . . 266,520
430 Brown, Boveri & Cie. AG (Bearer)
(Manufacturer of electrical equipment). . . . . . . . . . . 498,293
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
----
13
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SCUDDER GREATER EUROPE GROWTH FUND
- ------------------------------------------------------------------------------------------------------------------------
% of Market
Portfolio Shares Value ($)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
500 Ciba-Geigy AG (Bearer) (Pharmaceutical
company). . . . . . . . . . . . . . . . . . . . . . . . . . 431,148
1,000 Elektrowatt AG (Bearer) (Holding company:
owner of electric plants and interests in
hydro and nuclear power plants) . . . . . . . . . . . . . . 301,804
650 Sandoz Ltd. AG (Registered) (Pharmaceutical
company). . . . . . . . . . . . . . . . . . . . . . . . . . 535,900
-------------
2,033,665
-------------
UNITED KINGDOM 14.8%
55,000 Argyll Group PLC (Owner and operator of
retail food supermarkets) . . . . . . . . . . . . . . . . . 279,560
61,567 British Petroleum PLC (Major integrated world
oil company). . . . . . . . . . . . . . . . . . . . . . . . 452,619
22,000 Carlton Communications PLC (Television post
production products and services) . . . . . . . . . . . . . 335,125
28,485 De La Rue PLC (Printer of commercial
banknotes and securities) . . . . . . . . . . . . . . . . . 405,989
66,000 Enterprise Oil PLC (Oil and gas exploration
and production) . . . . . . . . . . . . . . . . . . . . . . 349,559
36,500 Guinness PLC (Brewery). . . . . . . . . . . . . . . . . . . 292,572
52,800 Kingfisher PLC (Retailer of wide range of
consumer goods and merchandise) . . . . . . . . . . . . . . 396,932
94,000 Next PLC (Retailer of clothing, accessories
and fashion jewelry, also through home
shopping) . . . . . . . . . . . . . . . . . . . . . . . . . 613,033
45,903 PowerGen PLC (Electric utility) . . . . . . . . . . . . . . 412,213
52,000 Reuters Holdings PLC (International news
agency) . . . . . . . . . . . . . . . . . . . . . . . . . . 483,407
64,279 Royal Bank of Scotland PLC (Bank) . . . . . . . . . . . . . 520,829
60,067 SmithKline Beecham "A" (Manufacturer of
ethical drugs and healthcare products). . . . . . . . . . . 627,250
19,000 Southern Electric PLC (Electric company). . . . . . . . . . 286,121
29,000 Zeneca Group PLC (Holding company:
manufacturing and marketing of
pharmaceutical and agrochemical
products and specialty chemicals) . . . . . . . . . . . . . 540,331
-------------
5,995,540
-------------
Total Common Stocks (Cost $30,978,695). . . . . . . . . . . 35,065,043
-------------
- ------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio - 100.0%
(Cost $36,084,776) (a) . . . . . . . . . . . . . . . . 40,502,881
-------------
-------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
- ----
14
<PAGE>
INVESTMENT PORTFOLIO
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(a) The cost for federal income tax purposes was $36,084,776. At October 31,
1995, net unrealized appreciation for all securities based on tax cost was
$4,418,105. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over tax cost
of $5,336,989 and aggregate gross unrealized depreciation for all
securities in which there was an excess of tax cost over market value of
$918,884.
* Non-income producing security.
Sector breakdown of the Fund's equity securities is noted on page 5.
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS
----
15
<PAGE>
<TABLE>
<CAPTION>
SCUDDER GREATER EUROPE GROWTH FUND
FINANCIAL STATEMENTS
- ------------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1995
--------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $36,084,776)
(Note A). . . . . . . . . . . . . . . . . . . . $ 40,502,881
Cash . . . . . . . . . . . . . . . . . . . . . . 986
Receivables:
Fund shares sold. . . . . . . . . . . . . . . . 212,520
Dividends and interest. . . . . . . . . . . . . 21,904
Foreign taxes recoverable . . . . . . . . . . . 48,728
Deferred organization expense (Note A) . . . . . . 46,580
------------
Total assets. . . . . . . . . . . . . . . . . . 40,833,599
LIABILITIES
Payables:
Fund shares redeemed. . . . . . . . . . . . . . $ 57,199
Accrued expenses (Note C) . . . . . . . . . . . 184,408
----------
Total liabilities . . . . . . . . . . . . . . . 241,607
------------
Net assets, at market value. . . . . . . . . . . . $ 40,591,992
------------
------------
NET ASSETS
Net assets consist of:
Undistributed net investment income . . . . . . $ 307,076
Unrealized appreciation on:
Investments. . . . . . . . . . . . . . . . . 4,418,105
Foreign currency related transactions. . . . 330
Accumulated net realized gain . . . . . . . . . 418,781
Capital stock . . . . . . . . . . . . . . . . . 29,011
Additional paid-in capital. . . . . . . . . . . 35,418,689
------------
Net assets, at market value. . . . . . . . . . . . $ 40,591,992
------------
------------
NET ASSET VALUE, offering and redemption price per
share ($40,591,992 DIVIDED BY 2,901,077 shares of
capital stock outstanding, $.01 par value,
100,000,000 shares authorized). . . . . . . . . $13.99
------
------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- ----
16
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 1995
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $43,756) . . . . . . $ 523,726
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235,292
-----------
759,018
Expenses:
Management fee (Note C). . . . . . . . . . . . . . . . . . . . . $ -
Services to shareholders (Note C). . . . . . . . . . . . . . . . 110,684
Custodian and accounting fees (Note C) . . . . . . . . . . . . . 84,423
Directors' fees and expenses (Note C). . . . . . . . . . . . . . 59,880
Auditing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60,238
Reports to shareholders. . . . . . . . . . . . . . . . . . . . . 39,471
Amortization of organization expense (Note A). . . . . . . . . . 11,854
Federal registration . . . . . . . . . . . . . . . . . . . . . . 9,722
Legal. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,049
State registration . . . . . . . . . . . . . . . . . . . . . . . 16,671
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,357 413,349
------------------------
Net investment income. . . . . . . . . . . . . . . . . . . . . . 345,669
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENT TRANSACTIONS
Net realized gain (loss) from:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . 418,781
Foreign currency related transactions . . . . . . . . . . . . (24,361) 394,420
---------
Net unrealized appreciation during the period on:
Investments . . . . . . . . . . . . . . . . . . . . . . . . . 4,312,975
Foreign currency related transactions . . . . . . . . . . . . 2,289 4,315,264
------------------------
Net gain on investment transactions. . . . . . . . . . . . . . . 4,709,684
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . $ 5,055,353
-----------
-----------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
----
17
<PAGE>
<TABLE>
<CAPTION>
SCUDDER GREATER EUROPE GROWTH FUND
- --------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE PERIOD
OCTOBER 10, 1994
YEAR (COMMENCEMENT
ENDED OF OPERATIONS) TO
OCTOBER 31, OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS 1995 1994
-------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income. . . . . . . . . . . . . . . $ 345,669 $ 6,080
Net realized gain (loss) from investment
transactions. . . . . . . . . . . . . . . . . . 394,420 (4,369)
Net unrealized appreciation on investment
transactions during the period. . . . . . . . . 4,315,264 103,171
------------- -----------
Net increase in net assets resulting
from operations . . . . . . . . . . . . . . . . 5,055,353 104,882
------------- -----------
Distributions to shareholders from net
investment income ($.02 per share). . . . . . . (26,912) -
------------- -----------
Fund share transactions:
Proceeds from shares sold. . . . . . . . . . . . . 49,268,332 7,878,987
Net asset value of shares issued to
shareholders in reinvestment of distributions . 26,407 -
Cost of shares redeemed. . . . . . . . . . . . . . (21,590,930) (125,327)
------------- -----------
Net increase in net assets from Fund share
transactions. . . . . . . . . . . . . . . . . . 27,703,809 7,753,660
------------- -----------
INCREASE IN NET ASSETS . . . . . . . . . . . . . . 32,732,250 7,858,542
Net assets at beginning of period. . . . . . . . . 7,859,742 1,200
------------- -----------
NET ASSETS AT END OF PERIOD (including
undistributed net investment income
of $307,076 and $1,711, respectively) . . . . . $ 40,591,992 $ 7,859,742
------------- -----------
------------- -----------
OTHER INFORMATION
INCREASE (DECREASE) IN FUND SHARES
Shares outstanding at beginning of period. . . . . 645,237 100
------------- -----------
Shares sold. . . . . . . . . . . . . . . . . . . . 3,909,689 655,588
Shares issued to shareholders in reinvestment
of distributions. . . . . . . . . . . . . . . . 2,316 -
Shares redeemed. . . . . . . . . . . . . . . . . . (1,656,165) (10,451)
------------- -----------
Net increase in Fund shares. . . . . . . . . . . . 2,255,840 645,137
------------- -----------
Shares outstanding at end of period. . . . . . . . 2,901,077 645,237
------------- -----------
------------- -----------
</TABLE>
THE ACCOMPANY NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
- ----
18
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS.
For the Period
Year October 10, 1994
Ended (commencement
October 31, of operations) to
1995 October 31, 1994
----------- -----------------
<S> <C> <C>
Net asset value, beginning of period . . . . . . . . . . . . . . . . . $12.18 $12.00
------ ------
Income from investment operations:
Net investment income (a) . . . . . . . . . . . . . . . . . . . . . . .13 .01
Net realized and unrealized gain on investment transactions . . . . . 1.70 .17
------ ------
Total from investment operations . . . . . . . . . . . . . . . . . . . 1.83 .18
------ ------
Less distributions from net investment income. . . . . . . . . . . . . (.02) -
------ ------
Net asset value, end of period . . . . . . . . . . . . . . . . . . . . $13.99 $12.18
------ ------
------ ------
Total Return (%) . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.06 1.50**
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) . . . . . . . . . . . . . . . . 41 8
Ratio of operating expenses, net to average daily net assets (%) (a) 1.50 1.50*
Ratio of net investment income to average daily net assets (%) . . . . 1.25 2.40*
Portfolio turnover rate (%). . . . . . . . . . . . . . . . . . . . . . 27.9 -
(a) Reflects a per share amount of expenses, exclusive of
management fees, reimbursed by the Adviser of . . . . . . . . . $ - $ .01
Reflects a per share amount of management fee and other
fees not imposed. . . . . . . . . . . . . . . . . . . . . . . . $ .13 $ .02
Operating expense ratio including expenses reimbursed,
management fee and other expenses not imposed (%) . . . . . . . 2.74 11.46*
* Annualized
** Not annualized
</TABLE>
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
A. SIGNIFICANT ACCOUNTING POLICIES
- -------------------------------------------------------------------------------
Scudder Greater Europe Growth Fund (the "Fund") is a non-diversified series of
Scudder International Fund, Inc. (the "Corporation"). The Corporation is
organized as a Maryland corporation and is registered under the Investment
Company Act of 1940, as amended, as an open-end, management investment company.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements in conformity with generally accepted
accounting principles.
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 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 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 resale price.
- --
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency transactions are translated into U.S. dollars
on the following basis:
(i) market value of investment securities, other assets and liabilities at the
daily rates of exchange, and
(ii) purchases and sales of investment securities, dividend and interest income
and certain expenses at the rates 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 sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest, and foreign withholding taxes.
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.
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.
--
21
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
- -------------------------------------------------------------------------------
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.
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.
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 and initial registration of shares 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 the accrual basis.
B. PURCHASES AND SALES OF SECURITIES
- -------------------------------------------------------------------------------
For the year ended October 31, 1995, purchases and sales of investment
securities (excluding short-term investments) aggregated $31,543,518 and
$6,727,141, respectively.
- --
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
C. RELATED PARTIES
- -------------------------------------------------------------------------------
Under the Fund's Investment Management Agreement (the "Agreement") with
Scudder, Stevens & Clark, Inc. (the "Adviser"), the Fund has agreed to pay to
the Adviser a fee equal to an annualized rate of 1.00% 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 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 agreed not to impose all
or a portion of its management fee until February 29, 1996, and during such
period to maintain the annualized expenses of the Fund at not more than 1.50%
of average daily net assets. For the year ended October 31, 1995, the Adviser
did not impose all of its management fee amounting to $274,656.
Scudder Service Corporation ("SSC"), a wholly-owned subsidiary of the Adviser,
is the transfer, dividend paying and shareholder service agent for the Fund.
For the year ended October 31, 1995, the amount charged by SSC aggregated
$123,598, of which $48,403 was not imposed and $74,698 was unpaid at October
31, 1995.
Scudder Fund Accounting Corporation ("SFAC"), a wholly-owned subsidiary of the
Adviser, is responsible for determining the daily net asset value per share and
maintaining the portfolio and general accounting records for the Fund. For the
year ended October 31, 1995, the amount charged by SFAC aggregated $50,000, of
which $19,581 was not imposed and $30,419 was unpaid at October 31, 1995.
The Fund pays each Director not affiliated with the Adviser $4,000 annually,
plus specified amounts for attended board and committee meetings. For the year
ended October 31, 1995, Directors' fees and expenses aggregated $59,880, of
which $28,000 was unpaid at October 31, 1995.
--
23
<PAGE>
SCUDDER GREATER EUROPE GROWTH FUND
REPORT OF INDEPENDENT ACCOUNTANTS
- -------------------------------------------------------------------------------
TO THE BOARD OF DIRECTORS OF SCUDDER INTERNATIONAL FUND, INC. AND THE
SHAREHOLDERS OF SCUDDER GREATER EUROPE GROWTH FUND:
We have audited the accompanying statement of assets and liabilities of Scudder
Greater Europe Growth Fund, including the investment portfolio, as of October
31, 1995, and the related statement of operations for the year then ended, the
statements of changes in net assets and the financial highlights for the year
then ended and for the period October 10, 1994 (commencement of operations) to
October 31, 1994. 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, 1995, 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 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
Scudder Greater Europe Growth Fund as of October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets and the
financial highlights for the year then ended and for the period October 10,
1994 (commencement of operations) to October 31, 1994 in conformity with
generally accepted accounting principles.
Boston, Massachusetts COOPERS & LYBRAND L.L.P.
December 11, 1995
- --
24
<PAGE>
TAX INFORMATION
The Fund will mail shareholders IRS Form 1099-Div in late January, summarizing
all taxable distributions paid for 1995.
Pursuant to section 852 of the Internal Revenue Code, the Fund designates
$69,536 as capital gain dividends for its taxable year ended October 31, 1995.
The Fund paid foreign taxes of $43,756 and the Fund recognized $266,832 of
foreign source income during the taxable year ended October 31, 1995. Pursuant
to section 853 of the Internal Revenue Code, the Fund designates $.02 per share
of foreign taxes and $.09 of income from foreign sources as having been paid in
the taxable year ended October 31, 1995.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your Scudder Fund account, please call a Scudder Investor Relations
Representative at 1-800-225-5163.
OFFICERS AND DIRECTORS
Edmond D. Villani*
Chairman of the Board and Director
Nicholas Bratt*
President and Director
Paul Bancroft III
Director; Venture Capitalist and Consultant
Thomas J. Devine
Director; Consultant
Keith R. Fox
Director; President, Exeter Capital Management Corporation
William H. Gleysteen, Jr.
Director; President, The Japan Society, Inc.
William H. Luers
Director; President, The Metropolitan Museum of Art
Dr. Wilson Nolen
Director; Consultant
Juris Padegs*
Director, Vice President and Assistant Secretary
Daniel Pierce*
Director
Dr. Gordon Shillinglaw
Director; Professor Emeritus of Accounting, Columbia University Graduate
School of Business
Robert G. Stone, Jr.
Honorary Director; Chairman of the Board and Director, Kirby Corporation
Robert W. Lear
Honorary Director; Executive-in-Residence, Visiting Professor,
Columbia University Graduate School of Business
Elizabeth J. Allan*
Vice President
Carol L. Franklin*
Vice President
Edmund B. Games, Jr.*
Vice President
Jerard K. Hartman*
Vice President
William E. Holzer*
Vice President
Thomas W. Joseph*
Vice President
William F. Truscott*
Vice President
David S. Lee*
Vice President and Assistant Treasurer
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
<PAGE>
INVESTMENT PRODUCTS AND SERVICES
<TABLE>
<CAPTION>
The Scudder Family of Funds
-----------------------------------------------------------------------------------------------------------------
<C> <C>
Money Market Income
Scudder Cash Investment Trust Scudder Emerging Markets Income Fund
Scudder U.S. Treasury Money Fund Scudder GNMA Fund
Tax Free Money Market+ Scudder Income Fund
Scudder Tax Free Money Fund Scudder International Bond Fund
Scudder California Tax Free Money Fund* Scudder Short Term Bond Fund
Scudder New York Tax Free Money Fund* Scudder Short Term Global Income Fund
Tax Free+ Scudder Zero Coupon 2000 Fund
Scudder California Tax Free Fund* Growth
Scudder High Yield Tax Free Fund Scudder Capital Growth Fund
Scudder Limited Term Tax Free Fund Scudder Development Fund
Scudder Managed Municipal Bonds Scudder Global Fund
Scudder Massachusetts Limited Term Tax Free Fund* Scudder Global Small Company Fund
Scudder Massachusetts Tax Free Fund* Scudder Gold Fund
Scudder Medium Term Tax Free Fund Scudder Greater Europe Growth Fund
Scudder New York Tax Free Fund* Scudder International Fund
Scudder Ohio Tax Free Fund* Scudder Latin America Fund
Scudder Pennsylvania Tax Free Fund* Scudder Pacific Opportunities Fund
Growth and Income Scudder Quality Growth Fund
Scudder Balanced Fund Scudder Small Company Value Fund
Scudder Growth and Income Fund Scudder Value Fund
The Japan Fund
Retirement Plans and Tax-Advantaged Investments
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IRAs 403(b) Plans
Keogh Plans SEP-IRAs
Scudder Horizon Plan+++* (a variable annuity) Profit Sharing and Money Purchase
401(k) Plans Pension Plans
Closed-End Funds#
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The Argentina Fund, Inc. The Latin America Dollar Income Fund, Inc.
The Brazil Fund, Inc. Montgomery Street Income Securities, Inc.
The First Iberian Fund, Inc. Scudder New Asia Fund, Inc.
The Korea Fund, Inc. Scudder New Europe Fund, Inc.
Scudder World Income
Opportunities Fund, Inc.
Institutional Cash Management
-----------------------------------------------------------------------------------------------------------------
Scudder Institutional Fund, Inc. Scudder Treasurers Trust(TM)++
Scudder Fund, Inc.
-----------------------------------------------------------------------------------------------------------------
<FN>
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.
</FN>
</TABLE>
26
<PAGE>
HOW TO CONTACT SCUDDER
<TABLE>
<S> <C>
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
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 For information on Scudder
Treasurers Trust,(TM) an institutional Institutional Funds,* funds
cash management service for designed to meet the broad
corporations, non-profit investment management and
organizations and trusts that uses service needs of banks and
certain portfolios of Scudder Fund, other institutions, call
Inc.* ($100,000 minimum), call 1-800-854-8525.
1-800-541-7703.
-------------------------------------------------------------------------------------------------------------
Scudder Investor Relations and Scudder Funds Centers are services provided
through Scudder Investor Services, Inc., Distributor.
<FN>
* 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.
</FN>
</TABLE>
27
<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 37 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.
