[GRAPHIC OMITTED]
Scudder
Global High
Income Fund, Inc.
Semiannual Report
April 30, 1999
A non-diversified closed-end investment company seeking high current income as
its primary objective and capital appreciation as a secondary objective through
investment principally in global income securities.
<PAGE>
Scudder Global High
Income Fund, Inc.
================================================================================
Investment objectives and policies
o seeking high current income as its primary objective and capital
appreciation as its secondary objective through investment principally
in global income securities
Investment characteristics
o a non-diversified closed-end investment company investing principally
in a portfolio of global income securities and, to a limited extent,
emerging country equity securities
o a vehicle for international investment through participation in the
economies of both developed and developing countries throughout the
world
General Information
===================================
Executive offices
Scudder Global High Income Fund, Inc.
345 Park Avenue
New York, NY 10154
For Fund information: 1-800-349-4281
Transfer Agent, Registrar and Dividend
Reinvestment Plan Agent
For account information: 1-800-426-5523
EquiServe
Investor Relations Department
P.O. Box 8200
Boston, MA 02266-8200
Custodian
Brown Brothers Harriman & Co.
Legal Counsel
Willkie Farr & Gallagher
Independent Accountants
PricewaterhouseCoopers LLP
New York Stock Exchange Symbol -- LBF
Contents
===================================
In Brief .............................................. 3
Letter to Shareholders ................................ 3
Investment Summary .................................... 6
Portfolio Summary ..................................... 7
Investment Portfolio .................................. 8
Financial Statements .................................. 11
Financial Highlights .................................. 15
Notes to Financial Statements ......................... 16
Report of Independent Accountants ..................... 19
Dividend Reinvestment and
Cash Purchase Plan ................................. 20
Investment Manager .................................... 22
Stockholder Meeting Results ........................... 23
Directors and Officers ...........................Back cover
Net Asset Value
The Fund's net asset value is listed in the following publications:
The Wall Street Journal (Mondays)
The New York Times
Barron's
The Financial Times
- --------------------------------------------------------------------------------
This report is sent to the shareholders of Scudder Global High 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>
Scudder Global High Income Fund, Inc.
In Brief
================================================================================
o Scudder Global High Income Fund's return based on net asset value for
the six-month period ended April 30, 1999, was 17.03%, outpacing the
15.89% return of the J.P. Morgan Emerging Markets Bond Index Plus over
the same period. The Fund's return based on its market price was
-13.45%.
o In the aftermath of the Russian and Brazilian currency devaluations,
emerging market bonds have recovered strongly, and their yield spreads
over U.S. Treasuries contracted to less than 9 percentage points from
as many as 18 percentage points during the peak of the Russian crisis.
o After underweighting much of Latin America in advance of Brazil's
devaluation, the Fund increased its holdings in Brazil and Venezuela in
March to take advantage of attractive value and increasingly favorable
economic fundamentals.
Letter to Shareholders
================================================================================
Dear Shareholders,
For the six months ended April 30, 1999, a period when emerging market bonds
rebounded strongly, Scudder Global High Income Fund posted a 17.03% total return
based on net asset value, higher than the 15.89% return of the J.P. Morgan
Emerging Markets Bond Index Plus. The Fund closed its semiannual period with a
net asset value ("NAV") of $6.02, up from $5.45 on October 31, 1998. During the
period the Fund paid $0.30 per share in income distributions.
During the six-month period ended April 30, 1999, the Fund's share price on the
New York Stock Exchange declined from $6.875 to $5.625, for a total return based
on market price of -13.45%. The $5.625 price of the shares on April 30, 1999,
represented a 7% discount to the Fund's NAV.
Spreads between emerging market bonds and long-term Treasuries, as wide as 18
percentage points during the peak of the Russian devaluation crisis, narrowed to
just under 9 percentage points as of the close of the period, a remarkable
recovery. We anticipate further tightening (and therefore improvement in
emerging market bond performance) as we believe the market has discounted future
economic growth in Latin America too deeply.
Following Brazil's Devaluation, A Market Recovery
In late December and early January, investor pressure on Brazil's currency began
to build amid concerns over the government's deficit spending, continued capital
flight, and the resignation of Brazil's central bank president, Gustavo Franco.
Investors were also clearly concerned about parallels to the Russian crisis last
summer, though the lack of leverage in the market during the Brazilian crisis
made the latter situation much less destabilizing. In addition, compared with
Russia, Brazil had three times more currency reserves to draw on during the peak
of its crisis.
On January 13, the Brazilian government announced a de facto devaluation of the
real, where the band within which the real was to trade was eliminated and
allowed to float freely. But since the devaluation had already been priced into
Brazilian bonds, the market immediately staged a strong rebound on the news and
then paused for further developments. Importantly, the Brazilian government
acted quickly to shore up support at the International Monetary Fund (IMF) and
the World Bank, appointed a new central bank governor, and adopted disciplined
fiscal and monetary policy stances. The market responded skeptically at first,
but a rally took hold in March and pulled up the rest of the emerging market
bond universe with it. After
3
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
underweighting Brazil through much of the period, in March we added to our
position there in view of the country's more positive economic statistics,
currency stabilization, and attractive value.
In Mexico, the peso was negatively affected by instability in Brazil for a time,
but Mexico was able to stand apart from the rest of Latin America, in large
measure due to its strong ties to U.S. economic growth and a flexible exchange
rate policy. Mexico also benefited from farsighted economic policy related to
oil prices: When depressed oil prices were projected, the country had undertaken
a series of extensive fiscal cuts to compensate for depressed oil revenues. Now
that oil prices have rebounded, Mexico's position is greatly strengthened. The
Fund maintained an overweight position in Mexico at the close of the period.
The Fund also increased its position in Venezuela to a market weighting of 9% at
the close of the period. Venezuela is most directly impacted by oil prices. With
the upswing in world oil prices, the financial position of the country has been
greatly enhanced. In light of increased oil prices and market-oriented reforms
enacted by President Chavez, Venezuela has performed extremely well in recent
months.
Eastern Europe
Bulgaria has been hurt by the Kosovo conflict. The country's economy endured
several setbacks, including the disruption of trade, the infusion of war
refugees, and the negative impact of a reduction in tourism on the country's
gross domestic product. We believe, however, that Bulgaria's fundamental
economic program is still sound, and after reducing our position in Bulgaria
significantly, we are beginning to add to it again. The Fund held a modest
position in Russian principal loans at the start of the period, and we are
monitoring political and economic developments in the country closely. A final
agreement with the IMF will be a key factor affecting the medium-term outlook.
Asia's Rebound
Further economic recovery in Asia is another positive factor for
emerging countries, particularly if greater Asian demand provides much-needed
support for depressed commodity prices. Meanwhile, strong consumer demand in the
United States has provided vital support for export-oriented Asian economies.
Though Japan's fundamentals remain poor, the yen has stabilized. China continues
to refrain from devaluing the renminbi. As we reduced the Fund's position in
Brazil in anticipation of the exchange rate adjustment, we increased the Fund's
holdings in the Philippines and benefited from the February upgrade.
Fund Distributions
Scudder Global High Income Fund reduced the amount of its regular quarterly
distribution in January and in April. As the Fund repositioned into higher
credit quality holdings, some of the higher yielding securities such as Russian
and Brazilian assets were sold. Although the Fund benefited from a less risky
portfolio, its yield declined as the higher risk securities were sold. We
believe the Fund's current distribution level better reflects current market
yields and the income potential of the Fund's holdings.
Year 2000 Issue
Like other registered investment companies and business organizations worldwide,
the Fund could be adversely affected if computer systems upon which the Fund
relies, which primarily include those used by the Adviser, its affiliates or
other service providers, are unable to correctly process date-related
information on or after January 1, 2000. This risk is commonly called the Year
2000 Issue (Y2K). Failure to successfully address the Year 2000 Issue could
result in interruptions to and other material adverse effects on the Fund's
business and operations. The Adviser commenced a review of the Year 2000 Issue
and is taking steps it believes are reasonably designed to address the Year 2000
Issue, although there can be no assurances that these steps will be sufficient.
In addition, there can be
4
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
no assurances that the Year 2000 Issue will not have an adverse effect on the
companies whose securities are held by the Fund or on global markets or
economies generally. The foregoing is a Year 2000 readiness disclosure under the
Year 2000 Information and Readiness Disclosure Act.
Outlook
Our outlook is positive, in light of strengthening currencies, declining local
emerging market interest rates, and rebounding commodity prices. The U.S.
economy continues to display economic growth with little evidence of inflation.
Coupled with a strong U.S. equity market, this growth is lending support to
other economies around the world. The main risk to the market is any evidence
suggesting increased U.S. inflation, which would put pressure on U.S. financial
markets.
Investors in credit products have shown resiliency, and are regaining their
appetite for risk in the increasingly favorable global environment. This has
been evident, specifically in the Latin American countries -- Brazil, Colombia,
Mexico, and Argentina -- as these countries have successfully offered bonds in
recent months. Global liquidity has accommodated the external financing
requirements for emerging market countries.
Fundamentals, especially in Latin America and Asia, are also increasingly
favorable: In Latin America, currency volatility has returned to pre-crisis
levels, and Brazil has been able to embark on a series of interest rate
reductions. Many Latin American countries have revised their economic forecasts
from recession to flat or slightly positive growth. And though in the United
States the Fed has shifted to a less accommodative stance, global liquidity and
capital flows have remained ample. While we are mindful of the risks, we believe
the global economic environment favors continued recovery for most developing
countries. This could lead to lower risk premiums on emerging market debt and
further tightening of yield spreads between emerging market bonds and U.S.
Treasury bonds over the coming months. Over the coming months, we will continue
to search for opportunities to provide high current income and long-term capital
appreciation to our shareholders.
We are pleased that you are an investor in Scudder Global High Income Fund. We
would be happy to receive any questions or comments. You can reach us at
1-800-349-4281.
Respectfully,
/s/Juris Padegs
Juris Padegs
President and
Chairman of the Board
5
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Summary as of April 30, 1999
- --------------------------------------------------------------------------------
HISTORICAL
INFORMATION TOTAL RETURN (%)
LIFE OF FUND ---------------------------------------------------------------
MARKET VALUE NET ASSET VALUE (a) INDEX (b)
------------------- -------------------- -------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
------------------- -------------------- -------------------
CURRENT QUARTER 21.61 -- 16.40 -- 16.57 --
ONE YEAR -54.82 -54.82 -50.35 -50.35 -8.84 -8.84
THREE YEAR -26.20 -9.63 -21.69 -7.83 38.05 11.35
FIVE YEAR -10.38 -2.17 1.81 0.36 101.14 14.99
LIFE OF FUND* 0.55 0.08 16.91 2.34 117.89 12.23
- --------------------------------------------------------------------------------
Per Share Information and Returns
Yearly periods ended April 30
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) with the exact
data points listed in the table below.
1993* 1994 1995 1996 1997 1998 1999
-----------------------------------------------------------
NET ASSET VALUE... $14.05 $13.21 $10.65 $13.26 $16.07 $13.96 $ 6.02
INCOME DIVIDENDS.. $ .87 $ 1.53 $ 1.53 $ 1.50 $ 1.50 $ 1.50 $ 1.05
CAPITAL GAINS
DISTRIBUTIONS..... $ .08 $ .34 $ .15 $ -- .80 $ 2.12 $ --
TOTAL RETURN (a).. 8.27 6.06 -7.56 40.65 41.83 11.20 -50.35
(a) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
(b) The unmanaged J.P. Morgan Emerging Markets Bond Index Plus (EMBI+) tracks
total returns for traded external debt instruments in the emerging markets.
Included in the index are U.S. dollar- and other
external-currency-denominated Brady bonds, loans, Eurobonds, and local
market instruments. The EMBI+ Index began on December 31, 1993. Prior index
returns are based on the J.P. Morgan Emerging Markets Bond Index (EMBI).
Index returns assume reinvested dividends, and unlike Fund returns, do not
reflect any fees or expenses.
* The Fund commenced operations on July 31, 1992.
On November 14, 1997, the Fund adopted its current name and investment
policies. Prior to that date the Fund was known as The Latin America Dollar
Income Fund, Inc. and its investment objective was to provide income and
appreciation through investment in U.S. dollar denominated Latin American
debt instruments. Performance prior to November 14, 1997 should not be
considered representative of the present Fund.
Past results are not necessarily indicative of future performance of the Fund.
6
<PAGE>
Scudder Global High Income Fund, Inc.
Portfolio Summary as of April 30, 1999
- --------------------------------------------------------------------------------
Investment Allocation (Excludes 1% Cash Equivalents)
Sovereign Bonds (1) 100%
====
(1) Includes 60% investments in Brady Bonds.
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------------
Interest Rate Sensitivity (Excludes 1% Cash Equivalents)
Fixed Rate Bonds 53%
Floating Rate Bonds 47%
-----
100%
=====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
- --------------------------------------------------------------------------------
GEOGRAPHICAL (Excludes 1% Cash Equivalents)
Brazil 27%
Mexico 23%
Argentina 13%
Venezuela 9%
Panama 5%
Peru 4%
Jamaica 3%
Bulgaria 3%
Philippines 3%
Other 10%
-----
100%
=====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the above table.
7
<PAGE>
<TABLE>
<CAPTION>
Scudder Global High Income Fund, Inc.
Investment Portfolio as of April 30, 1999
================================================================================================================================
Principal Market
Amount ($) (c) Value ($)
- --------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements 1.2%
<S> <C> <C>
Repurchase Agreement with Donaldson, Lufkin and Jenrette dated 4/30/1999 at 4.87%,
to be repurchased at $833,338 on 5/3/1999, collateralized by a $840,000 U.S. Treasury
Note, 3.625%, 1/15/2008 (Cost $833,000) .............................................. 833,000 833,000
------------
- --------------------------------------------------------------------------------------------------------------------------------
Bonds -- 98.8%
Argentina 13.1%
Argentine Republic, 11%, 12/4/2005 (b) ................................................. 1,000,000 995,000
Argentine Republic, 9.75%, 9/19/2027 (b) ............................................... 500,000 437,500
Argentine Republic, Collateralized Discount Floating Rate Bond, Series L, 6.063%,
3/31/2023 ............................................................................ 2,450,000 1,846,688
Argentine Republic, Collateralized Par Bond, Series L, Step-up Coupon, 5.75% 3/31/2023 . 3,250,000 2,309,531
Argentine Republic, Floating Rate Bond, Series L, LIBOR plus .8125% (5.9375%),
3/31/2005 (b) ........................................................................ 2,748,150 2,445,854
Argentine Republic, Global Bond, 11.375%, 1/30/2017 .................................... 1,500,000 1,496,250
------------
9,530,823
------------
Brazil 27.0%
Republic of Brazil, 11.625%, 4/15/2004 ................................................. 750,000 729,375
Federative Republic of Brazil C Bond, 4.50% with 3.50% Interest Capitalization, 8%
4/15/2014 ............................................................................ 8,128,141 5,640,923
Federative Republic of Brazil, Collateralized Discount Bond, Floating Rate Bond, LIBOR
plus .8125% (5.8750%), 4/15/2024 ..................................................... 5,770,000 3,837,050
Federative Republic of Brazil, Debt Conversion Bond, Floating Rate Bond, Series L,
LIBOR plus .875% (5.9375%), 4/15/2012 ................................................ 3,925,000 2,492,375
Federative Republic of Brazil, Eligible Interest, Floating Rate Bond, LIBOR plus .8125%
(5.875%), 4/15/2006 (b) .............................................................. 3,633,750 2,900,187
Federative Republic of Brazil Global Bond, 10.125%, 5/15/2027 (b) ...................... 2,575,000 2,050,344
Federative Republic of Brazil, IDU Floating Rate Bond, LIBOR plus .8125% (6.0625%),
1/1/2001 ............................................................................. 664,200 631,405
Federative Republic of Brazil, "New" Money Bond, Floating Rate Bond, LIBOR plus .875%
(5.9375%), 4/15/2009 ................................................................. 1,850,000 1,322,750
------------
19,604,409
------------
Bulgaria 2.9%
Republic of Bulgaria, Collateralized Discount Bond, Tranche A, LIBOR plus .8125%
(5.8750%), 7/28/2024 ................................................................. 2,220,000 1,523,475
Republic of Bulgaria, Interest Arrears Bond, LIBOR plus .8125% (5.8750%), 7/28/2011 (b) 825,000 557,906
------------
2,081,381
------------
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio
================================================================================================================================
Principal Market
Amount ($)(c) Value (U.S.$)
- --------------------------------------------------------------------------------------------------------------------------------
Colombia 2.0%
Republic of Columbia, 10.875%, 3/9/2004 ................................................ 230,000 242,171
Republic of Colombia, 7.625%, 2/15/2007 ................................................ 630,000 547,313
Republic of Columbia, 8.625%, 4/1/2008 ................................................. 680,000 617,950
------------
1,407,434
------------
Ecuador 2.2%
Republic of Ecuador, Collateralized Global Par Bond, Step-up Coupon, 4%, 2/28/2025 ..... 1,530,000 648,338
Republic of Ecuador, Past Due Interest Bond, 3.25% with 2.75% capitalization, 6%,
2/27/2015 ............................................................................ 2,295,403 964,070
------------
1,612,408
------------
Ivory Coast 0.4%
Republic of the Ivory Coast, Floating Rate Interest Reduction Bond, Step-up Coupon, 2%,
3/29/2018 ............................................................................ 1,050,000 267,750
------------
Jamaica 3.3%
Government of Jamaica, 10.875%, 6/10/2005 .............................................. 2,675,000 2,407,500
------------
Mexico 22.5%
Petroleos Mexicanos S.A., 9.5%, 9/15/2027 .............................................. 1,000,000 937,500
United Mexican States, 9.875%, 1/15/2007 (b) ........................................... 4,070,000 4,278,588
United Mexican States, 10.375%, 2/17/2009 .............................................. 865,000 927,713
United Mexican States, 11.5%, 5/15/2026 (b) ............................................ 660,000 785,070
United Mexican States, Collateralized Par Bond (Detachable Oil Priced Indexed Value
Recovery Rights), Series A, 6.25%, 12/31/2019 ........................................ 425,000 337,365
United Mexican States, Floating Rate Discount Note (Detachable Oil Priced Indexed Value
Recovery Rights), Series B, LIBOR plus .8125% (6.038%), 12/31/2019 ................... 500,000 431,563
United Mexican States, Floating Rate Discount Note (Detachable Oil Priced Indexed Value
Recovery Rights), Series C, LIBOR plus .8125% (6.2009%), 12/31/2019 .................. 1,500,000 1,294,688
United Mexican States, Floating Rate Discount Bond (Detachable Oil Priced Indexed Value
Recovery Rights), Series D, LIBOR plus .8125% (6.0975%), 12/31/2019 .................. 5,500,000 4,747,188
United Mexican States, Global Bond, 11.375%, 9/15/2016 (b) ............................. 2,250,000 2,581,875
------------
16,321,550
------------
Morocco 2.5%
Kingdom of Morocco, Restructuring and Consolidation Agreement, Tranche A, Floating
Rate Bond, LIBOR plus .8125% (6.0625%), 1/1/2009 ..................................... 2,225,000 1,821,719
------------
Panama 5.4%
Republic of Panama, 8.875%, 9/30/2027 .................................................. 3,170,000 2,999,613
Republic of Panama, Interest Reduction Bond, Step-up Coupon, 4%, 7/17/2014 ............. 1,175,000 922,375
------------
3,921,988
------------
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio
================================================================================================================================
Principal Market
Amount ($)(c) Value (U.S.$)
- --------------------------------------------------------------------------------------------------------------------------------
Peru 4.0%
Republic of Peru, Floating Rate Interest Reduction Bond, 3.25%, 3/7/2017 ............... 3,940,000 2,435,413
Republic of Peru, Past Due Interest Bond, 4.5%, 3/7/2017 ............................... 725,000 489,375
------------
2,924,788
------------
Philippines 2.5%
Republic of the Philippines, 8.875%, 4/15/2008 (b) ..................................... 1,810,000 1,841,675
------------
Poland 0.3%
Republic of Poland, Past Due Interest Bond, Step-Up Coupon, 5%, 10/27/2014 ............. 250,000 231,250
------------
Russia 2.1%
Russian Federation Principal Loan, Floating Rate Bond, LIBOR plus .8125% (5.9688%),
12/15/2020* (d) ...................................................................... 20,965,000 1,519,963
------------
Venezuela 8.6%
Republic of Venezuela, Debt Conversion Bond, Floating Rate Bond, Series DL, LIBOR
plus .875% (5.9375%), 12/18/2007 (b) ................................................. 6,857,120 5,537,124
Republic of Venezuela, Global Bond, 9.25%, 9/15/2027 ................................... 1,000,000 725,000
------------
6,262,124
------------
Total Bonds (Cost $67,255,175) 71,756,762
------------
- --------------------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio-- 100.0% (Cost $68,088,175) (a) 72,589,762
============
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
(a) The cost of the investment portfolio for federal income tax purposes was
$78,031,696. At April 30, 1999, net unrealized depreciation for all
securities based on tax cost was $5,441,934. This consisted of aggregate
gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost of $4,768,215 and aggregate gross
unrealized depreciation for all securities in which there was an excess of
tax cost over market value of $10,210,149.
(b) At April 30, 1999 these securities, in whole or in part, are subject to
repurchase under reverse repurchase agreements.
(c) Principal amounts are stated in U.S. dollars unless otherwise noted.
(d) On December 2, 1998 the Fund wrote down interest receivable of
approximately $370,000 and stopped accruing income from the Russian
Federation Principal Loan. At April 30, 1999, the bond is in default.
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
<TABLE>
<CAPTION>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================================================================
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities
as of April 30, 1999
- --------------------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments, at market (identified cost $68,088,175) .................................. $ 72,589,762
Cash .................................................................................. 40,724
Receivable for investments sold ....................................................... 6,769,505
Interest receivable ................................................................... 1,479,501
Other assets .......................................................................... 1,467
-----------------
Total assets .......................................................................... 80,880,959
LIABILITIES
Reverse repurchase agreements ......................................................... 16,084,745
Interest payable for reverse repurchase agreements .................................... 29,203
Payable for investments purchased ..................................................... 5,255,881
Accrued management fee ................................................................ 55,994
Other payables and accrued expenses ................................................... 153,887
-----------------
Total liabilities ..................................................................... 21,579,710
-----------------
Net assets, at market value ........................................................... $ 59,301,249
=================
NET ASSETS
Net assets consist of:
Accumulated distributions in excess of net investment income .......................... (519,753)
Net unrealized appreciation (depreciation) on investments ............................. 4,501,587
Accumulated net realized gain (loss) .................................................. (75,764,450)
Paid-in capital ....................................................................... 131,083,865
-----------------
Net assets, at market value ........................................................... $ 59,301,249
Net asset value per share ($59,301,249 / 9,843,260 shares of common stock ================
outstanding, $.01 par value, 100,000,000 shares authorized) ....................... $6.02
=====
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------------------------------------------------------
11
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================================================================
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Operations
Six Months Ended April 30, 1999
- --------------------------------------------------------------------------------------------------------------------------------
Investment Income
Interest .............................................................................. $ 3,040,441
----------------
Expenses:
Management fee ........................................................................ 327,943
Directors' fees and expenses .......................................................... 25,609
Custodian and accounting fees ......................................................... 90,999
Reports to shareholders ............................................................... 38,571
Auditing .............................................................................. 37,963
Legal ................................................................................. 11,256
Services to shareholders .............................................................. 19,396
Interest .............................................................................. 53,028
Other ................................................................................. 10,215
-----------------
614,980
-----------------
Net investment income ................................................................. 2,425,461
-----------------
Net realized and unrealized gain (loss) on investment transactions
Net realized gain (loss) from:
Investments ........................................................................... (7,180,904)
Foreign currency related transactions ................................................. (277)
-----------------
(7,181,181)
-----------------
Net unrealized appreciation (depreciation) on:
Investments ........................................................................... 13,363,831
Foreign currency related transactions ................................................. (1,554)
-----------------
13,362,277
-----------------
Net gain (loss) on investment transactions ............................................ 6,181,096
-----------------
Net increase (decrease) in net assets resulting from operations ....................... $ 8,606,557
================
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------------------------------------------------------
12
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================================================================
- --------------------------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------------------------------------------------------
Six Months Year Ended
Ended October 31,
Increase (Decrease) in Net Assets April 30, 1999 1998
- -----------------------------------------------------------------------------------------------------------------------
Operations:
Net investment income ................................................ $ 2,425,461 $ 12,629,097
Net realized gain (loss) from investment transactions ................ (7,181,181) (68,733,742)
Net unrealized appreciation (depreciation) on investment transactions. 13,362,277 (4,023,556)
during the period ----------------- -----------------
Net increase (decrease) in net assets resulting from operations ...... 8,606,557 (60,128,201)
----------------- -----------------
Distributions to shareholders from:
Net investment income ................................................ (2,945,214) (12,088,724)
----------------- -----------------
Tax return of capital ................................................ -- (2,539,510)
----------------- -----------------
Fund share transactions:
Proceeds from shares issued in the acquisition of Scudder World
Income Opportunities Fund, Inc. ................................... -- 45,594,929
Reinvestment of distributions ........................................ 186,412 1,893,156
----------------- -----------------
Net increase (decrease) in net assets from Fund share transactions ... 186,412 47,488,085
----------------- -----------------
Increase (decrease) in net assets .................................... 5,847,755 (27,268,350)
Net assets at beginning of period .................................... 53,453,494 80,721,844
Net assets at end of period (including accumulated distributions in ----------------- -----------------
excess of net investment income of $519,753 at April 30, 1999) .... $ 59,301,249 $ 53,453,494
================= ================
Other Information
Increase (decrease) in Fund Shares
Shares outstanding at beginning of period ............................ 9,807,807 6,155,449
----------------- -----------------
Shares issued in the acquisition of Scudder World Income
Opportunities Fund, Inc. .......................................... -- 3,496,614
Shares issued to shareholders in reinvestment of distributions ....... 35,453 155,744
----------------- -----------------
Net increase (decrease) in Fund Shares ............................... 35,453 3,652,358
----------------- -----------------
Shares outstanding at end of period .................................. 9,843,260 9,807,807
================= =================
The accompanying notes are an integral part of the financial statements.
- -----------------------------------------------------------------------------------------------------------------------
13
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================================================================
- --------------------------------------------------------------------------------------------------------------------------------
Statement of Cash Flows
Six Months Ended April 30, 1999
- --------------------------------------------------------------------------------------------------------------------------------
Cash flows from operating activities:
Investment income received ............................................................ $ 2,728,929
Payment of expenses ................................................................... (837,060)
Proceeds from sales and maturities of investments ..................................... 78,099,966
Purchases of investments .............................................................. (76,542,701)
Net maturities of short-term investments .............................................. 7,305,714
-----------------
Cash provided by operating activities ................................................. 10,754,848
-----------------
Cash flows from financing activities:
Net increase (decrease) in reverse repurchase agreements .............................. (7,933,771)
Distributions paid (net of reinvestment of dividends) ................................. (2,758,802)
Cash paid to custodian for borrowings ................................................. (21,551)
-----------------
Cash used by financing activities ..................................................... (10,714,124)
-----------------
Increase (decrease) in cash ........................................................... 40,724
Cash at beginning of period ........................................................... 0
-----------------
Cash at end of period ................................................................. $ 40,724
================
Reconciliation of net increase (decrease) in net assets from operations to cash
provided by operating activities:
Net increase (decrease) in net assets resulting from operations ....................... 8,606,557
Net increase (decrease) in cost of investments ........................................ 8,536,668
Net increase (decrease) in unrealized appreciation (depreciation) on investments ...... (13,363,831)
(Increase) decrease in interest receivable ............................................ 460,503
(Increase) decrease in receivable for investments sold ................................ 2,563,627
(Increase) decrease in other assets ................................................... (20,607)
Increase (decrease) in payable for investments purchased .............................. 4,194,015
Increase (decrease) in accrued expenses ............................................... (86,802)
Increase (decrease) in interest payable ............................................... (135,282)
-----------------
Cash provided by operating activities ................................................. $ 10,754,848
================
The accompanying notes are an integral part of the financial statements.
- -----------------------------------------------------------------------------------------------------------------------
14
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================================================================
- --------------------------------------------------------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------------------------------------------------------
Six Months Years Ended October 31,
Ended ---------------------------------------------------------
April 30, 1999 1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period ..... $ 5.45 $ 13.11 $ 15.61 $ 11.20 $ 13.41 $ 16.22
------- ------- ------- ------- ------- -------
Net investment income .................... .25 1.33 1.28 1.59 1.55 1.51
Net realized and unrealized gain (loss) on .62 (7.49) .64 4.32 (2.08) (2.45)
investment transactions ----------- ------ ------- ------- ------ ------
Total from investment operations ........ .87 (6.16) 1.92 5.91 (.53) (.94)
----------- ------ ------- ------- ------ ------
Less distributions:
From net investment income .............. (.30) (1.24) (1.50) (1.50) (1.30) (1.51)
From net realized gains on investment ... -- -- (2.92) -- (.15) (.33)
transactions
In excess of net realized gains ......... -- -- -- -- -- (.03)
Tax return of capital ................... -- (.26) -- -- (.23) --
----------- ------ ------- ------- ------- -------
Total distributions ..................... (.30) (1.50) (4.42) (1.50) (1.68) (1.87)
----------- ------ ------- ------- ------- -------
Net asset value, end of period .......... $ 6.02 $ 5.45 $ 13.11 $ 15.61 $ 11.20 $ 13.41
======= ======= ======= ======= ======= =======
Market value, end of period ............. $ 5.63 $ 6.88 $12.13(b) $ 13.88 $ 12.13 $ 13.25
======= ======= ====== ======= ======= =======
Total Investment Return
Per share market value (%) .............. (13.45)** (36.19) 19.72 27.93 5.78 (3.52)
Per share net asset value (%) (c) ....... 17.03** (52.80) 14.03 55.81 (3.46) (5.94)
Ratios and Supplemental Data
Net assets, end of period ($ millions) .. 59 53 81 95 67 79
Ratio of operating expenses (excluding .. 2.06* 1.60 1.85 1.79 1.96 1.83
interest) to average net assets (%)
Ratio of operating expenses to average net 2.25* 2.67 2.36 3.28 3.66 3.41
assets (%)
Ratio of net investment income to average. 8.87* 11.28 7.80 11.66 13.59 10.42
net assets (%)
Portfolio turnover rate (%) ............. 268.9* 323.7 362.3 322.3 365.9 161.1
(a) Based on monthly average shares outstanding during each period.
(b) Market value of $14.25 has been reduced to reflect a distribution of
$2.12 per share, relating to a due bill which entitles individuals who
purchased shares prior to November 4, 1997, the ex-date of the
dividend, to be reimbursed by the seller in the amount of the
distribution.
(c) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
* Annualized
** Not annualized
On November 14, 1997, the Fund adopted its current name and investment policies.
Prior to that date, the Fund was known as The Latin America Dollar Income Fund,
Inc. and its investment objective was to provide income and appreciation through
investment in U.S. dollar denominated Latin American Debt Instruments. Financial
information prior to November 14, 1997 should not be considered representative
of the present Fund.
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
A. Significant Accounting Policies
-------------------------------
Scudder Global High 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 Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
Security Valuation. Portfolio debt securities with original maturities greater
than sixty days are valued by pricing agents approved by the Officers of the
Fund, whose quotations reflect broker/dealer-supplied valuations and electronic
data processing techniques. If the pricing agents are unable to provide such
quotations, the most recent bid quotation supplied by a bona fide market maker
shall be used. Money Market investments having an original maturity of sixty
days or less are valued at amortized cost. All other securities are valued at
their fair value as determined in good faith by the Valuation Committee of the
Board of Directors.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value is equal to at least the repurchase price.
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 accrual and payment dates on interest
and foreign withholding taxes.
Federal Income Taxes. The Fund's policy is to comply with the requirements of
the Internal Revenue Code, as amended, which are applicable to regulated
investment companies, and to distribute all of its taxable income to its
shareholders. Accordingly, the Fund paid no federal income taxes, and no federal
income tax provision was required. At October 31, 1998, the Fund had a net tax
basis capital loss carryforward of approximately $59,000,000, which may be
applied against any realized net taxable capital gains of each succeeding year
until fully utilized or until October 31, 2006, whichever occurs first.
Distribution of Income and Gains. The Fund's policy is to declare and pay
distributions to shareholders of substantially all net investment income 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
16
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
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.
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,
1999. Significant non-cash activity from market discount accretion has been
excluded from the Statement of Cash Flows.
Reverse Repurchase Agreements. The Fund may borrow through the use of reverse
repurchase agreements whereby the Fund agrees to sell and simultaneously agrees
to repurchase certain securities at a mutually agreed date and price. At the
time the Fund enters into a reverse repurchase agreement, it is required to
pledge securities subject to repurchase. The sale of these securities is not
recorded and the Fund agrees to later repay cash plus interest. Should the
securities' value decline below the repurchase price, the Fund may be obligated
to pledge additional collateral to the lender in the form of cash or securities.
Reverse repurchase agreements involve the risk that the market value of the
securities purchased with the proceeds from the sale of securities subject to
reverse repurchase agreements may decline below the value of the securities the
Fund is obligated to repurchase. The risk in borrowing, as with any extension of
credit, consists of the possible delay in the recovery of securities or possible
loss of rights in the collateral should the counterparty fail financially.
Additionally, there is the risk that the expense associated with the transaction
may be greater than the income earned from the investment of the proceeds of the
transaction.
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. All discounts are accreted for both tax and
financial reporting purposes.
B. Purchases and Sales of Securities
---------------------------------
During the six months ended April 30, 1999, purchases and sales of investment
securities (excluding short-term investments) aggregated $80,747,882 and
$75,536,339, respectively.
C. Related Parties
---------------
Under the Investment Management Agreement (the "Management Agreement") with
Scudder Kemper Investments, Inc. ("Scudder Kemper" or the "Adviser"), the
Adviser 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 Adviser provides certain administrative services in accordance
with the Management Agreement. The Fund pays to the Adviser a monthly
17
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
fee at an annualized rate of 1.20% of the average weekly net assets of the Fund.
For the six months ended April 30, 1999, the fee pursuant to such agreements
amounted to $327,943, of which $55,994 is unpaid at April 30, 1999.
The Fund pays each Director not affiliated with the Adviser an annual retainer
plus specified amounts for attended board and committee meetings. For the six
months ended April 30, 1999, Directors' fees and expenses aggregated $25,609, of
which $2,202 is unpaid at April 30, 1999.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the six months
ended April 30, 1999, the amount charged to the Fund by SFAC aggregated $28,997,
of which $10,177 is unpaid at April 30, 1999.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, provides
shareholder communications services for the Fund. For the six months ended April
30, 1999, the amount charged to the Fund by SSC aggregated $7,500, of which
$1,250 is unpaid at April 30, 1999.
D. Borrowings
- -------------
The Fund has entered into reverse repurchase agreements with third parties
involving its holdings in foreign debt securities. At April 30, 1999, the Fund
had outstanding reverse repurchase agreements as follows:
Value of assets sold
under agreement Repurchase
Maturity to repurchase liability
---------------- ----------------------- -----------------
Demand $ 17,794,493 $ 16,084,745
Securities subject to repurchase under reverse repurchase agreements are
designated in the Investment Portfolio. The average weighted daily balance of
reverse repurchase agreements outstanding during the period ended April 30, 1999
was $2,493,640. The weighted average interest rate was 4.20%.
E. Investing in Emerging Markets
Investing in emerging markets may involve special risks and considerations not
typically associated with investing in the United States. These risks include
revaluation of currencies, high rates of inflation, repatriation restrictions on
income and capital, and future adverse political and economic developments.
Moreover, securities issued in these markets may be less liquid, subject to
government ownership controls, delayed settlements, and their prices more
volatile than those of comparable securities in the United States.
F. Acquisition of Assets
- ------------------------
On November 14, 1997, substantially all of the assets and liabilities of Scudder
World Income Opportunities Fund, Inc. ("SWIOF") were acquired by the Fund in a
non-taxable exchange of 3,496,614 shares of the Fund (valued at $45,594,929).
The net assets of SWIOF acquired included unrealized depreciation of $2,809,625.
18
<PAGE>
Scudder Global High Income Fund, Inc.
Report of Independent Accountants
================================================================================
To the Board of Directors and Shareholders of Scudder Global High Income Fund,
Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations, of cash
flows, and of changes in net assets and the financial highlights present fairly,
in all material respects, the financial position of Scudder Global High Income
Fund, Inc. (the "Fund") at April 30, 1999, the results of its operations, its
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, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
Boston, Massachusetts PricewaterhouseCoopers LLP
June 11, 1999
19
<PAGE>
Scudder Global High 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
5 days after or 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
20
<PAGE>
Scudder Global High Income Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
notice is received by the Plan Agent not less than 48 hours before such payment
is to be invested.
Participant Plan Accounts
The Plan Agent maintains all participant accounts in the Plan and
furnishes written confirmation of all transactions in the account, including
information needed by participants for personal and tax records. Shares in the
account of each plan participant will be held by the Plan Agent in
non-certificated form in the name of the participant, and each participant will
be able to vote those shares purchased pursuant to the Plan at a shareholder
meeting or by proxy.
No Service Fee to Reinvest
There is no service fee charged to participants for reinvesting
dividends or distributions from net realized capital gains. The Plan Agent's
fees for the handling of the reinvestment of dividends and capital gains
distributions will be paid by the Fund. There will be no brokerage commissions
with respect to shares issued directly by the Fund as a result of dividends or
capital gains distributions payable either in stock or in cash. However,
participants will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases in connection with the
reinvestment of any dividends or capital gains distributions payable only in
cash.
Costs for Cash Purchases
With respect to purchases of Fund shares from voluntary cash payments,
the Plan Agent will charge $1.00 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 only by giving at least
30 days' written notice to participants in the Plan (except when necessary or
appropriate to comply with applicable law, rules or policies of a regulatory
authority).
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: Scudder Global High Income Fund, Inc. Dividend Reinvestment and
Cash Purchase Plan, c/o EquiServe, P.O. Box 8200, Boston, MA 02266-8200, (617)
328-5000, ext. 6406.
21
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Manager
================================================================================
The investment manager of Scudder Global High Income Fund, Inc. is
Scudder Kemper Investments Inc. ("the Manager"), one of the most experienced
investment management firms in the world. Established in 1919, the firm manages
investments for institutional and corporate clients, retirement and pension
plans, insurance companies, mutual fund investors, and individuals. The Manager
has offices throughout the United States and has subsidiaries in London,
Switzerland, and Tokyo.
The Manager has been a leader in international investment management
for over 40 years. It manages Scudder International Fund, which was originally
incorporated in Canada in 1953 as the first foreign investment company
registered with the United States Securities and Exchange Commission. The
Manager's clients which invest primarily in foreign securities include thirty
open-end investment companies as well as portfolios for institutional investors.
In addition to the Fund, the Manager manages the assets of five other
closed-end investment companies which invest primarily in foreign securities:
Scudder New Asia Fund, Inc., Scudder New Europe Fund, Inc., The Brazil Fund,
Inc., The Korea Fund, Inc., and The Argentina Fund, Inc.
22
<PAGE>
Scudder Global High Income Fund
Stockholder Meeting Results
================================================================================
A Special Meeting of Stockholders (the "Meeting") of Scudder Global High Income
Fund, Inc. (the "Fund") was held on December 17, 1998, at the office of Scudder
Kemper Investments, Inc., Two International Place, Boston, Massachusetts 02110.
At the Meeting the following matters were voted upon by the stockholders (the
resulting votes for each matter are presented below).
1. To approve a new Investment Management Advisory and Administration
Agreement for the Fund with Scudder Kemper Investments, Inc.
<TABLE>
<CAPTION>
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- -----------------
<S> <C> <C> <C>
7,942,852 190,190 104,109 0
</TABLE>
- --------------------------------------------------------------------------------
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary
power to vote on a particular matter.
23
<PAGE>
Scudder Global High Income Fund, Inc.
Directors and Officers
================================================================================
JURIS PADEGS*
President, Chairman of the Board,
and Director
ROBERT J. CALLANDER
Director
GEORGE M. LOVEJOY, JR.
Director
RONALDO A. DA FROTA NOGUEIRA
Director
DR. SUSAN KAUFMAN PURCELL
Director
SUSAN E. DAHL*
Vice President
JUDITH A. HANNAWAY*
Vice President
M. ISABEL SALTZMAN*
Vice President
PAUL J. ELMLINGER*
Vice President and Assistant Secretary
BRUCE H. GOLDFARB*
Vice President and Assistant Secretary
ANN M. McCREARY*
Vice President
KATHRYN L. QUIRK*
Vice President and Assistant Secretary
JOHN R. HEBBLE*
Treasurer
CAROLINE PEARSON*
Assistant Secretary
* Scudder Kemper Investments, Inc.
