The Latin America Dollar Income Fund, Inc.
Semiannual Report
April 30, 1995
A closed-end investment company seeking high current income as its primary
objective and capital appreciation as a secondary objective through investment
principally in dollar-denominated Latin American debt instruments.
<PAGE>
The Latin America Dollar Income Fund, Inc.
- --------------------------------------------------------------------------------
Investment objectives and policies
o primarily high current income and secondarily capital appreciation through
investment principally in dollar-denominated Latin American debt
instruments
Investment characteristics
o closed-end investment company investing principally in a portfolio of
dollar-denominated Latin American debt instruments
o a vehicle for international diversification through participation in the
economies of Latin American countries
General Information
- --------------------------------------------------------------------------------
Executive offices
The Latin America Dollar Income Fund, Inc.
345 Park Avenue
New York, NY 10154
Telephone:
For Fund information: 1-800-349-4281
Transfer agent, registrar and dividend
reinvestment plan agent
For account information: 617-328-5000 x6406
State Street Bank & Trust Company
P.O. Box 8200
Boston, MA 02266-8200
Custodian
Brown Brothers Harriman & Co.
Legal counsel
Willkie Farr & Gallagher
Independent Accountants
Price Waterhouse LLP
New York Stock Exchange Symbol--LBF
Contents
- --------------------------------------------------------------------------------
Letter to Shareholders 3
Investment Summary 6
Investment Portfolio 7
Financial Statements 10
Financial Highlights 14
Notes to Financial Statements 15
Report of Independent Accountants 19
Dividend Reinvestment and
Cash Purchase Plan 20
Investment Manager and Administrator 22
Directors and Officers 22
This report is sent to the shareholders of The Latin America Dollar Income Fund,
Inc. for their information. It is not a prospectus, circular, or representation
intended for use in the purchase or sale of shares of the Fund or of any
securities mentioned in the report.
2
<PAGE>
Letter to Shareholders
- --------------------------------------------------------------------------------
Dear Shareholders:
We are pleased to present the semiannual report for The Latin America Dollar
Income Fund, Inc. (the "Fund") covering the period from October 31, 1994 to
April 30, 1995. This has been a difficult and volatile period for the Latin
American financial markets and, indeed, the markets for emerging country issues
in general. The favorable momentum established in Latin American and other
developing countries was abruptly halted in late December as Mexico's decision
to devalue and subsequently float the peso sparked a sell-off that spilled over
into other emerging country debt and equity markets. The market sell-off
extended into 1995 as the full dimensions of the Mexican crisis became more
apparent. Initial delays by the Mexican authorities in developing an effective
economic program, and delays in assembling a U.S.-led financial support package
for Mexico, brought additional pressure on financial markets and capital flows
to key emerging countries, including Argentina and Brazil.
Negative market sentiment was reversed in mid-March as Mexico announced a
credible economic program to deal with its crisis and Argentina organized an
international support program to bolster its banking system and its foreign
exchange reserves. Decisive action by economic leaders in Argentina and Mexico
to impose austerity measures and deepen structural reforms bolstered investor
confidence, helping to fuel a strong rally in emerging markets debt that
continued through April. By the end of April, the market had recouped a
significant portion of the losses incurred since the end of October.
Fund Performance and Strategy
During the six months ended April 30, 1995, the decline in the Fund's share
price on the New York Stock Exchange from $13.25 to $11.75 was partially offset
by distributions of $0.93 per share, resulting in a total return of -3.93% based
on the market value of the Fund's shares. The $11.75 price of the shares on
April 30, 1995 represented a 10.3% premium over the net asset value per share
(NAV) of the Fund.
The Fund finished the six-month period ended April 30, 1995 with a NAV of
$10.65, down from $13.41 on October 31, 1994. Adjusting for the distributions of
$0.93 per share, the total return of the Fund based on NAV was -13.96% for the
six months ended April 30, 1995. During the same period, the unmanaged J.P.
Morgan Latin Brady Bond Index (the "JPM LBBI") returned -8.51%.
The Fund's performance based on NAV lagged the JPM LBBI during this period
principally for two reasons. First, in the wake of the Mexican devaluation,
Latin eurobonds suffered particularly steep declines relative to Brady bonds,
which are more liquid instruments. The Fund's holdings in Latin eurobonds at
this time (approximately one-third of assets at January 31) negatively affected
performance relative to the JPM LBBI, which is comprised solely of Brady bonds.
Second, as Latin American debt markets rebounded strongly in March, we sold some
securities into the rally and raised cash for protection in the event of a
market correction. The market rally was sustained, however, underpinned by the
strong U.S. Treasury market, and our cash position restrained performance in the
latter half of March and in April. Since its inception on July 31, 1992 through
April 30, 1995, the total return of the Fund based on NAV and market value of
its shares has been 6.15% and 7.98%, respectively, while the JPM LBBI has had a
total return of 9.84% for the same period.
During the semiannual period, our strategy has been to maintain a
diversified, liquid portfolio. The majority of the portfolio has been invested
in sovereign obligations (89% of the Fund's debt investments as of April 30).
The sovereign Brady bonds are often backed by U.S. Treasury collateral and,
given their large issue size, are currently among the most liquid instruments in
our market. In addition, sovereign obligations tend to be of higher credit
quality than corporate credits. This preference for sovereign debt is of
particular importance as austerity measures in countries such as Argentina and
Mexico result in economic slowdowns which put pressure on the banking and
3
<PAGE>
corporate sectors. During the period, we have also maintained a strategy of
avoiding significant exposure to local currencies in these markets. As we have
seen in the case of Mexico, local currencies in emerging countries can be
susceptible to dramatic devaluations when there is a loss of confidence in
domestic policies. At April 30, approximately 93% of the portfolio's debt
investments were in U.S. dollar-denominated securities. As a defensive measure
in declining markets, we also used cash during the period to protect the
portfolio's performance and to allow for the purchase of securities at
attractive valuations.
Our core holdings during the period have been in Argentina and Brazil
(respectively, 30% and 28% of portfolio assets at April 30). The Argentine
government has been effective and decisive in dealing with the spill-over
effects of the Mexican crisis. In the face of significant pressure on the
Argentine peso and strong outflows of capital from the country, the government
cut spending further, maintained a tight monetary policy and sought
international financial assistance to shore up the banking system and ensure
sufficient foreign exchange with which to service its external debt. In Brazil,
significant challenges remain on the macroeconomic front, particularly with
regard to controlling inflation and dealing with an overvalued currency.
However, the Cardoso administration has embarked upon an ambitious program of
structural reforms, including opening up state monopolies to competition and
opening certain sectors of the economy to foreign investment. Progress toward
implementing this structural reform program has been picking up momentum
recently, which should have a positive effect on prices for Brazilian debt.
Mexico and Venezuela are the other major debt markets in Latin America, but
the Fund had relatively small holdings in these countries during the six months
ended April 30. We began the period with an underweighted Mexican position (8.5%
of portfolio assets versus 28% of the JPM LBBI) as the tight spreads on these
securities seemed unattractive relative to the more generous yields being
offered in other Latin American markets with good fundamentals. The portfolio
benefited from this approach as Mexican debt prices were particularly hard hit
in the aftermath of the devaluation. By the end of the period, the Fund's
Mexican position had been reduced to less than 1% of portfolio assets, as
Mexican spreads were still tight on a relative value basis and we were concerned
that that the potentially severe impact of the Mexican economic program on the
banking and corporate sectors could give rise to negative market sentiment on
Mexican debt generally. The Fund's holdings in Venezuelan debt were reduced from
8.8% to 4.1% of portfolio assets during the period. Although there has been
little progress to address Venezuela's economic problems (which include a fiscal
deficit, high inflation and exchange controls), strong oil prices have
buttressed the external debt service capacity of this petroleum-producing
country.
The Fund realized currency losses on Mexican peso-denominated holdings during
the semiannual period. Since U.S. tax law treats foreign currency losses as
offsets to ordinary income, it is likely that a portion of the Fund's 1995
income payments will be treated as non-taxable distributions. However, the
percentage of the Fund's income that may be classified as non-taxable
distributions will not be determined until after the close of the Fund's fiscal
year end, October 31. Final information on the tax status of the Fund's income
distributions will be provided on your 1995 Form 1099-DIV which will be mailed
to you in late January 1996.
Outlook
In the face of the recent crisis, economic leaders in countries such as
Argentina and Mexico have chosen to impose further austerity and deepen
structural reforms in order to safeguard the gains achieved in recent years
4
<PAGE>
toward restoring their countries' creditworthiness and access to the
international capital markets. These measures have bolstered investor
confidence, helping to stabilize financial markets and ease pressures on capital
flows in Latin America. While the effects of these austerity measures will be
reflected in declining growth rates and difficult domestic conditions in the
near term, these measures are already giving rise to improving economic
fundamentals, which should be reflected in improving prices for Latin American
debt. Recent declines in U.S. dollar interest rates should further enhance the
outlook for the Latin American debt markets as investors seek out the higher
yields that these markets can offer.
A Team Approach to Investing
The Latin America Dollar Income Fund, Inc. 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. 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.
M. Isabel Saltzman, Lead Portfolio Manager, has set the Fund's investment
strategy and overseen its daily operation since the Fund was introduced in 1992.
Ms. Saltzman, who joined Scudder in 1990, has been involved in foreign finance
and investing since 1979. Lincoln Y. Rathnam, Portfolio Manager, has worked at
Scudder since 1984 and has over 15 years of experience in global investing and
research. Susan E. Gray, Portfolio Manager, is head of emerging markets fixed
income trading. Ms. Gray, who has five years of investment trading and portfolio
management experience, has worked at Scudder since 1987.
Dividend Reinvestment Option
The Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan") offers
you a convenient way to have your dividends and capital gains distributions
reinvested in the shares of the Fund. Your participation is automatic unless you
or the bank, broker, or other nominee holding shares beneficially owned by you
specifies otherwise. We believe this Plan is attractive for shareholders. Its
features are more fully described on page 20. Of particular interest is the
ability of Plan participants to reinvest their dividends and capital gains
distributions at up to a 5% discount to the Fund's share price on the New York
Stock Exchange (but not less than the net asset value) when the Fund's shares
are selling at a premium to net asset value.
Other Information
The Fund's NAV is published every Monday in The Wall Street Journal under the
heading "Closed End Funds." The Fund's NAV is also published in The New York
Times and Barron's.
As a service to overseas shareholders, the Fund's NAV is listed daily in The
Financial Times ("FT"). For your information the NAV of the Fund and other
Scudder managed closed-end funds can be found in the "FT Managed Funds Service"
section under the heading "Other Offshore Funds" below the Scudder, Stevens &
Clark, Inc. banner.
We are pleased that you are an investor in The Latin America Dollar Income
Fund, Inc. We would be happy to receive any questions or comments. You can reach
us at 1-800-349-4281.
Respectfully,
/s/Lynn S. Birdsong /s/Edmond D. Villani
Lynn S. Birdsong Edmond D. Villani
President Chairman of the Board
5
<PAGE>
The Latin America Dollar Income Fund, Inc.
Investment Summary as of April 30, 1995
- --------------------------------------------------------------------------------
Historical
Information
Life of Fund
Total Return (%)
----------------------------------------------
Market Value Net Asset Value*
------------------- -------------------
Average Average
Cumulative Annual Cumulative Annual
------------------- -------------------
Current Quarter 3.40 -- .75 --
Fiscal Year to date -3.93 -- -13.96 --
One Year -3.77 -3.77 -7.56 -7.56
Life of Fund** 7.98 2.83 6.15 2.19
* Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund
during each period, and assumes dividends and capital gains distributions,
if any, were reinvested. These percentages are not an indication of the
performance of a shareholder's investment in the Fund based on market
value due to differences between the market price of the stock and the
net asset value of the Fund during each period.
** The Fund commenced operations on October 22, 1991.
Past results are not necessarily indicative of future performance
of the Fund.
- --------------------------------------------------------------------------------
Diversification by Country (Excludes 20% Cash Equivalents)
Argentina 38%
Brazil 36%
Panama 7%
Chile 6%
Jamaica 5%
Venezuela 5%
Ecuador 2%
Mexico 1%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
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6
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
INVESTMENT PORTFOLIO AS OF APRIL 30, 1995
<TABLE>
<CAPTION>
================================================================================================
Principal Market
Amount Value (U.S.$)
- ------------------------------------------------------------------------------------------------
COMMERCIAL PAPER - 20.0%
<S> <C> <C> <C>
U.S.$ 2,500,000 Associates Corp. of North America, 5.873%, 5/1/95... 2,500,000
U.S.$ 2,500,000 American Express Credit Corp., 5.803%, 5/1/95....... 2,500,000
U.S.$ 1,472,000 Chevron Oil Finance Co., 5.753%, 5/1/95............. 1,472,000
U.S.$ 2,500,000 Exxon Funding Corp., 5.803%, 5/1/95................. 2,500,000
U.S.$ 2,500,000 Ford Motor Credit Co., 5.813%, 5/1/95............... 2,500,000
U.S.$ 2,500,000 Household Finance Corp., 5.873%, 5/1/95............. 2,500,000
U.S.$ 2,500,000 New Center Asset Trust, 5.703%, 5/1/95.............. 2,500,000
----------
TOTAL COMMERCIAL PAPER (Cost $16,472,000)........... 16,472,000
----------
- ------------------------------------------------------------------------------------------------
CHILEAN PESO-DENOMINATED DEBT - 4.9%
1,573,600,000 Citibank time deposit, 10.5%, 5/11/95
(Cost $3,991,376)................................. 4,049,929
----------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
U.S. DOLLAR-DENOMINATED DEBT - 70.0%
ARGENTINA - 25.0%
<S> <C> <C> <C>
1,000,000 Acindar Industries, Floating Rate Note, 11.875%,
11/12/98.......................................... 620,000
1,015,000 Bonos del Tesoro, Conea II, Floating Rate Bond,
LIBOR (6.1875%), 9/1/97........................... 897,891
2,500,000 Cedulas Hipotecarias, Floating Rate Bond,
7.9%, 9/1/00...................................... 1,875,304
1,000,000 Federal Street Investments S.A., Participation
Certificates/Bank of Boston, Buenos Aires,
10.25%, 11/3/98 (b)............................... 860,000
1,000,000 Republic of Argentina, Collateralized Discount Bond,
LIBOR plus .8125% (7.125%), 3/31/23............... 577,500
16,250,000 Republic of Argentina, Collateralized Par Bond,
Series L, Step-up-Coupon, 5%, 3/31/23 (b)......... 7,089,063
12,000,000 Republic of Argentina, Floating Rate Bond, Series L,
LIBOR plus .8125% (7.3125%), 3/31/05 (b).......... 7,155,000
1,800,005 Republic of Argentina, New Money Bond, LIBOR
plus .875% (7.1875%), 10/25/99 (b)................ 1,530,004
------------
20,604,762
------------
BRAZIL - 28.4%
2,500,000 Companhia Energetica de Minas Gerais, Series A,
Without Warrants, 7.875%, 2/10/99 (b)............. 1,787,500
</TABLE>
The acompanying notes are an integral part of the financial statements.
7
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
INVESTMENT PORTFOLIO (CONTINUED)
<TABLE>
<CAPTION>
===================================================================================================
Principal Market
Amount Value(U.S.$)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2,000,000 Companhia Energetica de Minas Gerais, Series B,
Without Warrants, 8.25%, 2/10/00 (b)................... 1,350,000
3,121,200 Federative Republic of Brazil C Bond, 4%, with 4%
Interest Capitalization, 4/15/14....................... 1,342,116
16,750,000 Federative Republic of Brazil, Collateralized Par Bond,
YL4, Step-up-Coupon, 4.25%, 4/15/24 (b)................ 6,658,125
1,000,000 Federative Republic of Brazil, Collateralized Discount
Bond, LIBOR plus .8125% (7.25%), 4/15/24............... 542,500
12,000,000 Federative Republic of Brazil, Debt Conversion Bond,
Series L, LIBOR plus .875% (7.3125%), 4/15/12 (b)...... 6,000,000
6,000,000 Federative Republic of Brazil, Eligible Interest Bond,
LIBOR plus .8125% (7.25%), 4/15/06..................... 3,412,500
1,455,000 Federative Republic of Brazil, IDU Bond, Floating Rate
Bond, LIBOR plus .8125% (7.8125%), 1/1/01.............. 1,105,800
803,572 Federative Republic of Brazil, New Money Bond,
LIBOR plus .8125% (7.25%), 10/15/99.................... 687,054
1,000,000 Federative Republic of Brazil, New Money Bond,
Series L, LIBOR plus .875% (7.3125%), 4/15/09.......... 513,750
----------
23,399,345
----------
ECUADOR - 1.6%
4,500,000 Republic of Ecuador, Collateralized Global Par Bond,
Step-up-Coupon, 3%, 2/28/25............................ 1,299,375
----------
JAMAICA - 4.2%
659,728 Government of Jamaica Refinancing Agreement,
Tranche A, LIBOR plus .8125% (7.0625%),
10/15/00 (b)........................................... 557,470
4,500,000 Government of Jamaica Refinancing Agreement,
Tranche B, LIBOR plus .8125% (7.125%), 11/15/04 (b).... 2,902,500
----------
3,459,970
----------
MEXICO - 0.9%
1,000,000 Nacional Financiera S.N.C., 9.375%, 7/15/02 (b).......... 725,000
----------
PANAMA - 5.8%
6,500,000 Republic of Panama, Floating Rate Bond, LIBOR plus
1% (7.125%), 5/10/02 (b)............................... 4,745,000
----------
VENEZUELA - 4.1%
7,250,000 Republic of Venezuela, Debt Conversion Bond,
Series DL, LIBOR plus .875% (7.6875%),
12/18/07 (b)........................................... 3,353,125
----------
TOTAL U.S. DOLLAR-DENOMINATED DEBT
(Cost $59,840,332)..................................... 57,586,577
----------
- ---------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of the financial statements
8
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================
Market
Shares Value (U.S.$)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PREFERRED
STOCKS - 5.1%
ARGENTINA
470,740 Nortel Inversora "A" (ADR) (b) (Cost $3,309,388)......... 4,213,123
- ---------------------------------------------------------------------------------------------------
TOTAL INVESTMENT PORTFOLIO - 100.0%
(Cost $83,613,096) (a)................................. 82,321,629
==========
</TABLE>
(a) The cost of the investment portfolio for federal income tax purposes was
$83,613,096. At April 30, 1995, net unrealized depreciation for all
securities based on tax cost was $1,291,467. This consisted of aggregate
gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost of $2,550,160 and aggregate gross
unrealized depreciation for all securities in which there was an excess
of tax cost over market value of $3,841,627.
(b) At April 30, 1995, these securities, in part or in full, have been
delivered as loan collateral. (See Note D to the Financial Statements.)
At April 30, 1995, outstanding written options were as follows (Note A):
<TABLE>
<CAPTION>
Principal Expiration Market
Call Options Amount US$ Date Strike Price Value ($)
- ------------------------------------------------- ---------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Republic of Argentina Floating Rate Bond, 3/31/05 4,000,000 5/11/95 US$ 57.25 125,600
Republic of Argentina Floating Rate Bond, 3/31/05 750,000 5/12/95 US$ 58.625 17,475
-------
Total outstanding written options (Premiums received $79,250).......................... 143,075
=======
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
========================================================================================================
- --------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1995
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments, at market (identified cost $83,613,096) (Note A) ......... $ 82,321,629
Cash .................................................................. 535
Receivable:
Investments sold .................................................... 2,361,370
Interest ............................................................ 1,513,318
Deferred organization expenses (Note A) ............................... 44,991
------------
Total assets ...................................................... 86,241,843
LIABILITIES
Payables:
Note Payable (Note D) ............................................... $ 15,000,000
Interest (Note D) ................................................... 201,823
Investments purchased ............................................... 5,135,082
Dividends ........................................................... 1,998,208
Accrued management fee (Note C) ..................................... 60,989
Other accrued expenses (Note C) ..................................... 126,447
Written options, at market (premiums received $79,250)(Note A) ...... 143,075
------------
Total liabilities ................................................. 22,665,624
------------
Net assets, at market value ........................................... $ 63,576,219
============
NET ASSETS
Net assets consist of:
Undistributed net investment income ................................. $ 113,553
Accumulated net realized loss ....................................... (17,852,893)
Net unrealized depreciation on:
Investments ....................................................... (1,291,467)
Options ........................................................... (63,825)
Foreign currency related transactions ............................. (5,183)
Common stock ........................................................ 59,716
Additional paid-in capital .......................................... 82,616,318
------------
Net assets, at market value ........................................... $ 63,576,219
============
NET ASSET VALUE per share ($63,576,219 -:- 5,971,635 shares of common stock
outstanding, $.01 par value, 100,000,000 shares authorized) ......... $10.65
======
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================
- ------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
SIX MONTHS ENDED APRIL 30, 1995
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Interest (net of foreign taxes withheld of $10,320) ............ $ 5,528,093
Expenses:
Management fee (Note C) ...................................... $ 404,248
Directors' fees and expenses (Note C) ........................ 28,944
Custodian fees ............................................... 76,698
Reports to shareholders ...................................... 32,437
Auditing and tax services .................................... 48,925
Legal ........................................................ 5,261
Amortization of organization expenses (Note A) ............... 9,917
Services to shareholders ..................................... 19,942
Interest (Note D) ............................................ 569,791
Other ........................................................ 21,812 1,217,975
------------------------------
Net investment income .......................................... 4,310,118
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS
Net realized loss from:
Investments .................................................. (16,720,832)
Foreign currency related transactions ........................ (416,383) (17,137,215)
------------
Net unrealized appreciation (depreciation) on:
Investments .................................................. 1,970,670
Options ...................................................... (63,825)
Foreign currency related transactions ........................ (10,671) 1,896,174
------------------------------
Net loss on investment transactions ............................ (15,241,041)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS ............. $(10,930,923)
============
</TABLE>
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
========================================================================================================================
- ------------------------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED
ENDED OCTOBER 31,
INCREASE (DECREASE) IN NET ASSETS APRIL 30, 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .................................................. $ 4,310,118 $ 8,861,879
Net realized loss from investment transactions ......................... (17,137,215) (120,565)
Net unrealized appreciation (depreciation) on investment
transactions during the period ....................................... 1,896,174 (14,242,775)
------------ ------------
Net decrease in net assets resulting from operations ..................... (10,930,923) (5,501,461)
------------ ------------
Dividends to shareholders:
From net investment income ($0.78 and $1.51 per share, respectively) ... (4,600,110) (8,866,794)
------------ ------------
From net realized gains from investment transactions
($0.15 and $.33 per share, respectively) ............................. (888,250) (1,912,858)
------------ ------------
In excess of net investment income ($.03 per share) .................... -- (191,510)
------------ ------------
Fund share transactions:
Reinvestment of dividends .............................................. 565,551 1,154,662
------------ ------------
Net increase in net assets from Fund share transactions .................. 565,551 1,154,662
------------ ------------
DECREASE IN NET ASSETS ................................................... (15,853,732) (15,317,961)
Net assets at beginning of period ........................................ 79,429,951 94,747,912
------------ ------------
NET ASSETS AT END OF PERIOD (including undistributed net investment
income of $113,553 and $403,545, respectively) ......................... $ 63,576,219 $ 79,429,951
============ ============
OTHER INFORMATION
INCREASE IN FUND SHARES
Shares outstanding at beginning of period ................................ 5,921,667 5,841,660
Shares issued to shareholders in reinvestment of dividends ............. 49,968 80,007
------------ ------------
Shares outstanding at end of period ...................................... 5,971,635 5,921,667
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
12
<PAGE>
<TABLE>
<CAPTION>
================================================================================
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED APRIL 30, 1995
- --------------------------------------------------------------------------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Investment income received .............................. $ 4,641,426
Payment of operating expenses ........................... (1,241,706)
Proceeds from sales and maturities of investments ....... 129,716,750
Purchases of investments ................................ (109,416,012)
Net purchases of short-term investments ................. (15,776,316)
-------------
Cash provided by operating activities ........... 7,924,142
-------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of loan principal ............................... (5,000,000)
Distributions paid (Note A) ............................. (3,490,152)
Reinvestment of dividends ............................... 565,551
-------------
Cash used by financing activities ............... (7,924,601)
-------------
Decrease in cash ................................ (459)
Cash at beginning of period ..................... 994
-------------
Cash at end of period ........................... $ 535
=============
Reconciliation of net decrease in net assets from
operations to cash provided by
operating activities:
Net decrease in net assets resulting from operations .... (10,930,923)
Amortization of organization costs ...................... 9,917
Net decrease in investments ............................. 15,921,426
Net decrease in unrealized depreciation on investments... (1,970,670)
Decrease in interest receivable ......................... 465,665
Increase in receivable for investments sold ............. (815,782)
Increase in payable for investments purchased ........... 5,135,082
Decrease in accrued expenses ............................ (13,505)
Decrease in interest payable ............................ (20,143)
Increase in written options ............................. 143,075
-------------
Cash provided by operating activities ........... $ 7,924,142
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
13
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
=========================================================================================================
- ---------------------------------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD (A) AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS AND MARKET PRICE DATA.
- ---------------------------------------------------------------------------------------------------------
FOR THE PERIOD
JULY 31, 1992
SIX MONTHS (COMMENCEMENT
ENDED YEARS ENDED OCTOBER 31, OF OPERATIONS)
APRIL 30, ---------------------- TO OCTOBER 31,
1995 1993 1994 1992
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ....... $ 13.41 $ 16.22 $ 13.45 $ 13.83(b)
-------- ------- ------- -------
Net investment income .................... .73 1.51 1.53 .25
Net realized and unrealized gain (loss) on
investment transactions ................ (2.56) (2.45) 2.74 (.50)
-------- ------- ------- -------
Total from investment operations ........... (1.83) (.94) 4.27 (.25)
-------- ------- ------- -------
Less distributions:
From net investment income ............... (.78) (1.51) (1.49) (.13)
From net realized gains on investment
transactions ........................... (.15) (.33) (.01) --
In excess of net realized gains .......... -- (.03) -- --
-------- ------- ------- -------
Total distributions ........................ (.93) (1.87) (1.50) (.13)
-------- ------- ------- -------
Net asset value, end of period ............. $ 10.65 $ 13.41 $ 16.22 $ 13.45
======== ======= ======= =======
Market value, end of period ................ $ 11.75 $ 13.25 $ 15.63 $ 15.00
======= ======= ======= =======
TOTAL INVESTMENT RETURN
Per share market value (%) ................. (3.93)** (3.52) 15.47 .88**
Per share net asset value (%) (c) .......... (13.96)** (5.94) 33.69 (1.89)**
Ratios and Supplemental Data
Net assets, end of period ($ millions) ..... 64 79 95 77
Ratio of operating expenses (excluding
interest) to average net assets (%) ...... 1.93* 1.83 2.00 2.05*
Ratio of net investment income to average
net assets (%) ........................... 12.81* 10.42 10.71 7.14*
Portfolio turnover rate (%) ................ 326.1* 161.1 93.3 1.8*
</TABLE>
* Annualized
** Not annualized
(a) Based on monthly average of shares outstanding during each period.
(b) Beginning per share amount reflects $15.00 initial public offering price
net of underwriting discount and offering expenses ($1.17 per share).
(c) Total investment return based on per share net asset value reflects the
effects of changes in net asset value on the performance of the Fund
during each period, and assumes dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market value due to differences between the market price of the
stock and the net asset value of the Fund during each period.
14
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
================================================================================
A. SIGNIFICANT ACCOUNTING POLICIES
The Latin America Dollar Income Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, closed-end
management investment company. The 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 debt securities with remaining maturities greater
than sixty days are valued by pricing agents approved by the Officers of the
Fund, which quotations reflect broker/dealer- supplied valuations and electronic
data processing techniques. If the pricing agents are unable to provide such
quotations, the most recent bid quotation supplied by a bona fide market maker
shall be used. Short-term investments having a maturity of sixty days or less
are valued at amortized cost.
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, 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.
OPTIONS. The Fund may write (sell) exchange-listed and over-the-counter call and
put options on securities, currencies and other financial instruments. When the
Fund writes a call, it gives the purchaser of the call option the right to buy
the underlying security or currency at the price specified in the option (the
"exercise price") at any time during the option period, generally ranging up to
nine months for American style options and for European style options at the
expiration date. When the Fund writes a put option, it gives the purchaser of
the put option the right to sell the underlying security or currency to the Fund
at the exercise price at any time during the option period, generally ranging up
to nine months for American style options and for European options at the
expiration date. If the option expires unexercised, the Fund will realize
income, in the form of a capital gain, to the extent of the amount received for
the option (the "premium"). If the option is exercised, a decision over which
the Fund has no control, the Fund must sell the underlying security or currency
to the option holder or purchase the underlying security or currency from the
option holder at the exercise price. Certain options, including options on
indices will require cash settlement by the Fund if the option is exercised. By
writing a call option, the Fund foregoes, in exchange for the premium less the
commission ("net premium"), the opportunity to profit during the option period
from an increase in the market value of the underlying security or currency
above the
15
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
exercise price. By writing a put option, the Fund, in exchange for the net
premium received, accepts the risk of a decline in the market value of the
underlying security or currency below the exercise price. The liability
representing the Fund's obligation under an exchange traded written call or put
option is valued at the last sale price or, in the absence of a sale, the mean
between the closing bid and asked price or at the most recent asked price if no
bid and asked price are available. Over-the-counter written options are valued
using dealer supplied valuations.
In addition, the Fund may purchase, singly and in combination, call and put
options on securities, currencies and securities indices. Exchange traded
purchased options are valued at the last sales price or, in the absence of a
sale, the mean between the closing bid and asked prices or at the most recent
bid price if no bid and asked prices are available. Over-the-counter purchased
options are valued using dealer supplied valuations.
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. The Fund's policy is to declare and pay
distributions to shareholders of substantially all net investment income
(generally without regard to foreign currency gains or losses) of the Fund
quarterly. Net realized gains from investment transactions in excess of
available capital loss carryforwards, which would be taxable to the Fund if not
distributed, will be distributed to shareholders annually. Distributions to
shareholders are recorded on the ex-dividend date. An additional distribution
may be made to the extent necessary to avoid the payment of a four percent
federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to investments in foreign denominated securities
and certain securities sold at a loss. As a result, net investment income (loss)
and net realized gain (loss) on investment transactions for a reporting period
may differ significantly from distributions during such period. Accordingly, the
Fund may periodically make reclassifications among certain of its capital
accounts without impacting the net asset value of the Fund.
For the fiscal year ending October 31, 1995, it is likely that a portion of the
Fund's income dividends will be treated as nontaxable return of capital
distributions under U.S. tax rules. The final tax status of 1995 distributions
will be provided to shareholders in January 1996 on Form 1099-DIV.
The Fund uses the specific identification method for determining realized gain
or loss on investments.
STATEMENT OF CASH FLOWS. Information on financial transactions which have been
settled through the receipt and disbursement of cash is presented in the
Statement of Cash Flows. The cash amount shown in the Statement of Cash Flows is
the amount reported as cash in the Fund's Statement of Assets and Liabilities
and represents the cash position in its custodian bank account at April 30,
1995.
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.
16
<PAGE>
================================================================================
OTHER. Portfolio securities transactions are accounted for on a trade-date
basis. Interest income is recorded on the accrual basis. Dividend income is
recorded on the ex-dividend date. Market discount on securities purchased is
accreted on an effective yield basis over the life of the security.
B. PURCHASES AND SALES OF SECURITIES
During the six months ended April 30, 1995, purchases and sales of investment
securities (excluding short-term investments) aggregated $114,551,094 and
$130,988,040, respectively.
In addition, the Fund wrote options during the period, principal amount US$
4,750,000 on Republic of Argentina Floating Rate Bonds, 3/31/05 (premium
received $79,250).
C. RELATED PARTIES
Under the Fund's Investment Advisory, Management and Administration Agreement
(the "Management Agreement") with Scudder, Stevens & Clark, Inc. (the
"Manager"), the Manager directs the investments of the Fund in accordance with
the Fund's investment objectives, policies, and restrictions and under the
direction and control of the Fund's Board of Directors. In addition to portfolio
management services, the Manager provides certain administrative services in
accordance with the Management Agreement. The Fund pays to the Manager a monthly
fee at an annualized rate of 1.20% of the average weekly net assets of the Fund.
For the six months ended April 30, 1995, the fee pursuant to such agreement
amounted to $404,248, of which $60,989 is unpaid at April 30, 1995. The Fund
pays each Director not affiliated with the Manager $6,000 annually, plus
specified amounts for attended board and committee meetings. For the six months
ended April 30, 1995, Directors' fees and expenses aggregated $28,944.
D. BORROWINGS
At April 30, 1995 the Fund had an outstanding loan balance of $15,000,000. The
interest rate at April 30, 1995 was 7.8125%. The loan is collateralized with
certain portfolio holdings. In accordance with the terms of the loan agreement,
the Fund must maintain a level of collateral to debt between 200 and 250%.
The weighted average outstanding daily balance of bank loans for the six months
ended April 30, 1995 was $15,552,486, with a weighted average interest rate of
7.322%. The maximum borrowings outstanding for the six months ended April 30,
1995 was $20,000,000. Interest expense for the six months ended April 30, 1995
was $569,791 ($.10 per share). Interest paid for the six months ended April 30,
1995 was $589,934.
E. CREDIT RISK
The yields of Latin American debt obligations reflect perceived credit risk, the
need to compete with other local investments in potentially illiquid domestic
financial markets and the difficulty in raising hard currencies to meet external
debt servicing requirements. The consequences of political, social, economic or
diplomatic changes may have disruptive effects on the market prices of
investments held by the Fund.
17
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
===========================================================================================================
F. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (000 OMITTED)
NET INCREASE
(DECREASE)
NET GAIN (LOSS) IN NET ASSETS
QUARTER INVESTMENT NET INVESTMENT ON INVESTMENT RESULTING
ENDED INCOME* INCOME TRANSACTIONS FROM OPERATIONS
- ---------------- ----------------- ----------------- ---------------------- ----------------------
PER PER PER PER
1995 TOTAL SHARE TOTAL SHARE TOTAL SHARE TOTAL SHARE
- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
January 31, 1995 $ 2,931 $ .49 $ 2,293 $ .39 $ (13,733) $ (2.31) $ (11,440) $ (1.92)
April 30, 1995 2,597 .44 2,017 .34 (1,508) (.25) 509 .09
------- ----- ------- ----- --------- ------- --------- -------
Totals $ 5,528 $ .93 $ 4,310 $ .73 $ (15,241) $ (2.56) $ (10,931) $ (1.83)
======= ===== ======= ===== ========= ======= ========= =======
<CAPTION>
PER PER PER PER
1994 TOTAL SHARE TOTAL SHARE TOTAL SHARE TOTAL SHARE
- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 31, 1994 $ 2,719 $ .46 $ 1,987 $ .34 $ 2,528 $ .43 $ 4,515 $ .77
April 30, 1994 2,678 .46 1,949 .33 (17,616) (2.99) (15,667) (2.66)
July 31, 1994 3,372 .57 2,618 .45 (3,049) (.52) (431) (.07)
October 31, 1994 2,988 .51 2,308 .39 3,774 .63 6,082 1.02
------- ----- ------- ----- --------- ------- --------- -------
Totals $11,757 $2.00 $8,862 $1.51 $(14,363) $(2.45) $(5,501) $(.94)
======= ===== ======= ===== ========= ======= ========= =======
</TABLE>
* Net of foreign taxes withheld
18
<PAGE>
THE LATIN AMERICA DOLLAR INCOME FUND, INC.
REPORT OF INDEPENDENT ACCOUNTANTS
================================================================================
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF THE LATIN AMERICA DOLLAR INCOME
FUND, INC.:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations, cash
flows, and of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of The Latin America Dollar
Income Fund, Inc. (the "Fund") at April 30, 1995, the results of its operations,
cash flows, the changes in its net assets and the financial highlights for each
of the periods indicated, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at April 30, 1995 by correspondence with the
custodian and brokers and the application of alternative procedures where
confirmations from brokers were not received, provide a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
June 12, 1995
19
<PAGE>
The Latin America Dollar Income Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
- --------------------------------------------------------------------------------
The Plan
The Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan") offers
you an automatic way to reinvest your dividends and capital gains distributions
in shares of the Fund. The Plan also provides for cash investments in Fund
shares of $100 to $3,000 semiannually through State Street Bank and Trust
Company, the Plan Agent.
Automatic Participation
Each shareholder of record is automatically a participant in the Plan unless
the shareholder has instructed the Plan Agent in writing otherwise. Such a
notice must be received by the Plan Agent not less than 10 days prior to the
record date for a dividend or distribution in order to be effective with respect
to that dividend or distribution. A notice which is not received by that time
will be effective only with respect to subsequent dividends and distributions.
Shareholders who do not participate in the Plan will receive all
distributions in cash paid by check in dollars mailed directly to the
shareholder by State Street Bank and Trust Company, as dividend paying agent.
Shares Held by a Nominee
If your shares are held in the name of a brokerage firm, bank, or other
nominee as the shareholder of record, please consult your nominee (or any
successor nominee) to determine whether it is participating in the Plan on your
behalf. Many nominees are generally authorized to receive cash dividends unless
they are specifically instructed by a client to reinvest. If you would like your
nominee to participate in the Plan on your behalf, you should give your nominee
instructions to that effect as soon as possible.
Pricing of Dividends and Distributions
If the market price per share on the payment date for the dividend or
distribution (the "Valuation Date") equals or exceeds net asset value per share
on that date, the Fund will issue new shares to participants at the greater of
the following on the Valuation Date: (a) net asset value, or (b) 95% of the
market price. The Valuation Date will be the dividend or distribution payment
date or, if that date is not a New York Stock Exchange trading date, the next
preceding trading date. If the net asset value exceeds the market price of Fund
shares at such time, participants in the Plan are considered to have elected to
receive shares of stock from the Fund, valued at market price, on the Valuation
Date. In either case, for Federal income tax purposes, the shareholder receives
a distribution equal to the market value on Valuation Date of new shares issued.
State and local taxes may also apply. If the Fund should declare an income
dividend or net capital gains distribution payable only in cash, the Plan Agent
will, as agent for the participants, buy Fund shares in the open market, on the
New York Stock Exchange or elsewhere, for the participants' account on, or
shortly after, the payment date.
Voluntary Cash Purchases
Participants in the Plan have the option of making additional cash payments
to the Plan Agent, semiannually, in any amount from $100 to $3,000, for
investment in the Fund's shares. The Plan Agent will use all such monies
received from participants to purchase Fund shares in the open market on or
about February 15 and August 15. Any voluntary cash payments received more than
30 days prior to these dates will be returned by the Plan Agent, and interest
will not be paid on any uninvested cash payments. To avoid unnecessary cash
accumulations, and also to allow ample time for receipt and processing by the
Plan Agent, it is suggested that participants send in voluntary cash payments to
be received by the Plan Agent approximately ten days before February 15, or
August 15, as the case may be. A participant may withdraw a voluntary cash
payment by written notice, if the notice is received by the Plan Agent not less
than 48 hours before such payment is to be invested.
20
<PAGE>
Participant Plan Accounts
The Plan Agent maintains all participant accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information
needed by participants for personal and tax records. Shares in the account of
each plan participant will be held by the Plan Agent in non-certificated form in
the name of the participant, and each participant will be able to vote those
shares purchased pursuant to the Plan at a shareholder meeting or by proxy.
No Service Fee to Reinvest
There is no service fee charged to participants for reinvesting dividends or
distributions from net realized capital gains. The Plan Agent's fees for the
handling of the reinvestment of dividends and capital gains distributions will
be paid by the Fund. There will be no brokerage commissions with respect to
shares issued directly by the Fund as a result of dividends or capital gains
distributions payable either in stock or in cash. However, participants will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of any
dividends or capital gains distributions payable only in cash.
Costs for Cash Purchases
With respect to purchases of Fund shares from voluntary cash payments, the
Plan Agent will charge $0.75 for each such purchase for a participant. Each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases of Fund shares in connection
with voluntary cash payments made by the participant.
Brokerage charges for purchasing small amounts of stock for individual
accounts through the Plan are expected to be less than the usual brokerage
charges for such transactions, because the Plan Agent will be purchasing stock
for all participants in blocks and pro-rating the lower commission thus
attainable.
Amendment or Termination
The Fund and the Plan Agent each reserve the right to terminate the Plan.
Notice of the termination will be sent to the participants of the Plan at least
30 days before the record date for a dividend or distribution. The Plan also may
be amended by the Fund or the Plan Agent, but (except when necessary or
appropriate to comply with applicable law, rules or policies of a regulatory
authority) only by giving at least 30 days' written notice to participants in
the Plan.
A participant may terminate his account under the Plan by written notice to
the Plan Agent. If the written notice is received 10 days before the record day
of any distribution, it will be effective immediately. If received after that
date, it will be effective as soon as possible after the reinvestment of the
dividend or distribution.
If a participant elects to sell his shares before the Plan is terminated, the
Plan Agent will deduct a $2.50 fee plus brokerage commissions from the sale
transaction.
Plan Agent Address and Telephone Number
You may obtain more detailed information by requesting a copy of the Plan
from the Plan Agent. All correspondence (including notifications) should be
directed to: The Latin America Dollar Income Fund, Inc. Dividend Reinvestment
and Cash Purchase Plan, c/o State Street Bank and Trust Company, P.O. Box 8200,
Boston, MA 02266-8200, (617) 328-5000, ext.
6406.
21
<PAGE>
Investment Manager and Administrator
- --------------------------------------------------------------------------------
The investment manager and administrator of The Latin America Dollar Income
Fund, Inc. (the "Fund") is Scudder, Stevens & Clark, Inc., one of the most
experienced investment management and investment counsel firms in the United
States. Established in 1919, the firm provides investment counsel for
individuals, investment companies and institutions. Scudder has offices
throughout the United States and subsidiaries in London and Tokyo.
Scudder has been active in international investment management for over 40
years. It manages Scudder International Fund, which was initially incorporated
in Canada in 1953 as the first foreign investment company registered with the
United States Securities and Exchange Commission. Scudder's investment company
clients include seven other open-end investment companies which invest
worldwide.
In addition to the Fund, Scudder also manages the assets of seven other
closed-end investment companies which invest in foreign securities: The
Argentina Fund, Inc. (investing primarily in equity securities of Argentine
issuers), The Brazil Fund, Inc. (investing in securities, primarily equity
securities, of Brazilian issuers), The First Iberian Fund, Inc. (investing
primarily in Spanish and Portuguese equity securities), The Korea Fund, Inc.
(investing in a broad spectrum of Korean companies), Scudder New Asia Fund, Inc.
(investing in a broad spectrum of Asian companies), Scudder World Income
Opportunities Fund, Inc. (investing in global income and, to a limited extent,
equity securities), and Scudder New Europe Fund, Inc. (investing in equity
securities traded in smaller or emerging European securities markets).
Directors and Officers
- --------------------------------------------------------------------------------
EDMOND D. VILLANI*
Chairman of the Board and Director
LYNN S. BIRDSONG*
President and Director
ROBERT J. BOYD
Director
ROBERT J. CALLANDER
Director
GEORGE M. LOVEJOY, JR.
Director
RONALDO A. DA FROTA NOGUEIRA
Director
SUSAN KAUFMAN PURCELL
Director
JERARD K. HARTMAN*
Vice President
DAVID S. LEE*
Vice President
JURIS PADEGS*
Vice President
LINCOLN Y. RATHNAM*
Vice President
M. ISABEL SALTZMAN*
Vice President
PAUL J. ELMLINGER*
Vice President and Assistant Secretary
EDWARD J. O'CONNELL*
Vice President and Assistant Treasurer
KATHRYN L. QUIRK*
Vice President and Assistant Secretary
THOMAS F. McDONOUGH*
Secretary
PAMELA A. McGRATH*
Treasurer
COLEEN DOWNS DINNEEN*
Assistant Secretary
* Scudder, Stevens & Clark, Inc.
22
