[LOGO]
Scudder
Global High
Income Fund, Inc.
Annual Report
October 31, 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
seeking high current income as its primary objective and capital
appreciation as its secondary objective through investment principally in
global income securities
Investment characteristics
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
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 ........................................ 7
Portfolio Summary ......................................... 8
Investment Portfolio ...................................... 9
Financial Statements ...................................... 12
Financial Highlights ...................................... 16
Notes to Financial Statements ............................. 17
Report of Independent Accountants ......................... 20
Dividend Reinvestment and
Cash Purchase Plan ..................................... 21
Investment Manager ........................................ 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 its
most recent fiscal year ended October 31, 1999, was 18.78%. The fund
emphasized higher credit quality issuers over the 12 months ended October
31 given the increased volatility which marked the period. The J.P. Morgan
Emerging Markets Bond Global Constrained Index returned 19.37% during the
same period. The fund's return based on its market price was -22.49%.
o Attractive yields and credit improvements in several areas allowed
emerging markets to move higher despite Brazil's early devaluation and
Ecuador's Brady Bond default.
o The fund benefited from its position in Asia early in the year, as credit
upgrades pushed prices higher. We have since increased our weighting in
Latin America as we expect economic growth to shift to the region in 2000.
Letter to Shareholders
================================================================================
Dear Shareholders,
During the 12-month period ended October 31, 1999, credit differentiation and
regional cycles played key roles in driving emerging market bond returns.
Investors increasingly draw a distinction between isolated trouble spots and the
overall soundness of the emerging market economy. Despite Brazil's devaluation,
Ecuador's Brady Bond default, and the U.S. Federal Reserve's three quarters of a
percentage point tightening, emerging markets took a positive step forward
during the period as Asia rebounded.
For its most recent fiscal year ended October 31, 1999, the fund posted an
18.78% total return based on net asset value. The fund emphasized higher credit
quality issuers over the 12 months ended October 31 given the increased level of
volatility in emerging markets during that time. The J.P. Morgan Emerging
Markets Bond Global Constrained Index returned 19.37% during the period. The
fund closed its fiscal year with a net asset value ("NAV") of $5.77, up from
$5.45 on October 31, 1998. During the period the fund paid $0.60 per share in
income distributions.
Over the 12 months ended October 31, 1999, the fund's share price on the New
York Stock Exchange declined from $6.875 to $4.75, for a total return based on
market price of -22.49%. The $4.75 price of the shares on October 31, 1999,
represented a 17.7% discount to the fund's NAV.
The difference between the performance of the fund and its benchmark index is
primarily due to the fund's strong underweight in Russia. Russian assets have
staged a sharp recovery during the period on what appear to be overly optimistic
assumptions regarding debt service capacity and debt restructuring. The lack of
transparency regarding important financial matters in combination with an
inability by the government to reduce illegal capital flight leads us to
maintain a cautious approach to Russia.
Promising Signs
Over the most recent fiscal year, emerging markets debt began to show signs of a
new maturity. Despite turmoil in some key countries during the past year, the
market remained on course, yielding attractive returns. And rather than
indiscriminately selling all emerging market credits at the first hint of bad
news over the past 12 months, investors differentiated among credits of various
emerging markets countries -- a promising sign.
3
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
A potentially troublesome event that, in actuality, presaged a positive turn in
the market was Brazil's currency devaluation in January 1999. Though the market
initially reacted to pressure on Brazil's fixed currency peg by selling off in
late 1998, it rebounded quickly following Brazil's decision to float the real --
a de facto devaluation. Importantly, the Brazilian government acted quickly to
shore up support at the International Monetary Fund (IMF) and the World Bank. It
also appointed a central bank governor favored by the capital markets, and
adopted stringent fiscal and monetary policy stances. Three key factors aided
Brazilian sovereign debt's recovery: Brazil adopted tight monetary and fiscal
policies; it continued to receive significant foreign direct investment; and
investors can now be more confident that Brazil's reserves will be available to
finance external debt -- and will not be used up to defend its currency -- going
forward.
Following its float, we adopted a wait-and-see approach to Brazil, remaining
modestly underweight and watching intently for signs of progress. We have
gradually added to our position over the past several quarters as Brazil appears
to be making good on its promises to the IMF. In addition, Brazil is receiving
record levels of direct investment and is showing signs of economic growth. The
country's fiscal health should receive a boost next year when tax revenues
reflect a growing economy.
Asia's rebound was another top story this year. An impressive recovery in
economic growth has supported broad improvement in fundamentals, driving several
credit upgrades in the region. With the nascent recovery in Japan now taking
hold, Asian countries should see another boost to exports which until now have
been largely sustained by U.S. demand.
Finally, it's interesting to note the increasing instances of active debt
management by emerging countries through debt exchanges and Brady bond buybacks.
Brazil, for example, recently exchanged some of its Brady debt for Eurobonds.
This transaction provided a huge boost for Brazilian debt. The Philippines,
Argentina, and Mexico have also undertaken active debt management programs which
have helped to boost the market.
Overview of Latin America
The effects of Brazil's devaluation on major Latin American countries were quite
mixed. Argentine trade was negatively affected because it is a major exporter to
Brazil, while Mexico continued its strong positive trend. In Mexico's case, much
of its ability to avoid economic "contagion" results from the country's strong
link to the U.S. economy -- more than 85% of Mexican exports go to the United
States. Mexico's flexible exchange rate, strong currency, tight fiscal
discipline, and declining inflation have also contributed to the country's
strong performance and improving credit fundamentals. Rising oil prices are also
benefiting Mexico's balance sheet, which relies on oil for one third of its
income. While presidential elections in 2000 may add a risk premium to Mexican
assets in the short run, we believe that the country's strong fundamental story
continues to be compelling. As of the close of the period, Mexico was the fund's
largest position.
Venezuela has also performed relatively well over the year, mostly on the
strength of oil prices. Unfortunately, President Chavez has continued to focus
on constitutional changes rather than on economic reform. Argentine debt rallied
strongly late in the third quarter, buoyed by the brightening electoral chances
of the market's favored presidential candidate, Fernando de la Rua. We are
currently awaiting de la Rua's cabinet appointments. His challenge -- a
difficult one -- is to demonstrate fiscal austerity to the international markets
and at the same time, promote economic growth internally.
Though Ecuador's Brady Bond default took center stage during the third quarter,
this situation was priced into the market for months in advance. The actual
default had little lasting impact on other Latin American
4
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
issuers. The fund, having no Ecuadoran exposure at the time, was largely
unaffected. Ecuador needs to enact a fiscal austerity program that will satisfy
the IMF, improve its tax collection, and obtain agreements with private
investors to lengthen the maturity of its Eurobonds. We expect this to be a
drawn-out process.
External Factors
Apart from fundamentals, two "external" factors influenced emerging market bond
performance over the period. The U.S. Federal Reserve had a significant impact
on global fixed income markets. Its move to a tightening bias in May, and its
three subsequent interest rate increases totaling three quarters of a percentage
point prompted emerging market investors to worry about how high the Fed would
raise interest rates. They also wondered where economic growth would come from
if Fed actions did considerably slow the U.S. economy. At this point the market
seems confident that the Fed is managing a soft landing for the U.S. economy, an
important consideration for emerging markets.
Second, the market focused on issues related to Y2K beginning in the second
quarter. Uncertainty over what the market's appetite for new issues would be
during the last months of the year (with the approach of the Y2K rollover)
raised concerns that issuers would move their remaining 1999 financing needs
forward. These concerns put significant pressure on global credit spreads during
the second quarter. With supply now declining as year end approaches, volatility
has also subsided.
Portfolio Strategy
During the period we sought to identify regions where growth would support
credit fundamentals, thereby providing the portfolio with competitive returns,
as well as additional stability during periods of market volatility. This led us
to a strong weighting in Asia as we entered the first quarter. The return of
economic growth in Asia, which has largely been driven by exports, has improved
tax collection, external balances, unemployment statistics, and hard currency
reserves. All of these factors are important in determining credit ratings, and
helped to drive several credit upgrades in the region. At the same time, our
concern over the effect that a negative outcome in Brazil might have on that
region's economy led us to underweight Latin America during the first quarter.
Our improved outlook for economic growth in Latin America during 2000 has led us
to increase the fund's exposure to this region over the final three months of
the period. This reallocation has coincided with an improvement in commodity
prices, a second important theme for the portfolio: As commodity exporters, many
emerging market economies benefit from increasing commodity prices. The rebound
in the prices of several key commodities has reinforced our view that Latin
America will offer superior returns in the coming months.
Looking Ahead
While risks remain, we believe several key factors will create a positive
environment for many emerging market issuers during the coming year. First, an
expansion of growth outside the United States should put global economic
conditions on a firmer footing. Second, because many emerging market economies
export commodities, a firming of commodity prices will help to improve economic
fundamentals. And third, the attractive yield on emerging market securities
should continue to attract new investors to the asset class.
Overall, we remain optimistic about the markets, and we will continue to
emphasize credit quality and liquidity. Global fundamentals remain supportive,
and underlying economic trends make us believe that emerging market credit
spreads will tighten further. Among the regions we favor, we believe that Latin
America remains poised to lead the market higher. With room for further cuts in
interest rates, and increasing foreign direct investment in this region, we
expect Latin America to continue its economic turnaround. We are, however,
mindful of the risks that remain. A sharp
5
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
downturn in U.S. equities or a significant uptick in U.S. inflation could
adversely affect spread levels and emerging market bond prices.
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
6
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Summary as of October 31, 1999
================================================================================
Historical
Information
Life of Fund
<TABLE>
<CAPTION>
Total Return (%)
----------------------------------------------------------------------------
Market Value Net Asset Value (a) Index (b)
--------------------- --------------------- -----------------------
Average Average Average
Cumulative Annual Cumulative Annual Cumulative Annual
--------------------- --------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Quarter -5.58 -- 6.06 -- 7.33 --
One Year -22.49 -22.49 18.78 18.78 20.00 20.00
Three Year -40.79 -16.03 -36.07 -13.85 19.54 6.13
Five Year -19.87 -4.33 -3.83 -0.78 85.63 13.16
Life of Fund* -9.94 -1.43 18.65 2.39 125.62 11.87
</TABLE>
- --------------------------------------------------------------------------------
Per Share Information and Returns
THE PRINTED DOCUMENT CONTAINS A BAR CHART HERE
ILLUSTRATING THE FUND TOTAL RETURN
CHART DATA:
Yearly periods ended October 31
1992* -1.89
1993 33.69
1994 -5.94
1995 -3.46
1996 55.81
1997 14.03
1998 -52.80
1999 18.78
<TABLE>
<CAPTION>
1992* 1993 1994 1995 1996 1997 1998 1999
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value .... $13.45 $16.22 $13.41 $11.20 $15.61 $13.11 $ 5.45 $ 5.77
Income Dividends ... $ .13 $ 1.49 $ 1.51 $ 1.53 $ 1.50 $ 1.50 $ 1.50 $ .06
Capital Gains
Distributions ...... $ -- $ .01 $ .36 $ .15 $ -- $ 2.92 $ -- $ --
Total Return (%) (a) -1.89 33.69 -5.94 -3.46 55.81 14.03 -52.80 18.78
</TABLE>
(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 shareholders 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. Since
adopting it current objective, the cumulative return is -43.04%.
Past results are not necessarily indicative of future performance of the
Fund.
7
<PAGE>
Scudder Global High Income Fund, Inc.
Portfolio Summary as of October 31, 1999
================================================================================
Investment Allocation (Excludes 5% Cash Equivalents)
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Sovereign Bonds (1) 100%
===
(1) Includes 49% investments in Brady Bonds
- --------------------------------------------------------------------------------
Interest Rate Sensitivity (Excludes 5% Cash Equivalents)
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Fixed Rate Bonds 53%
Floating Rate Bonds 47%
---
100%
===
- --------------------------------------------------------------------------------
Geographical (Excludes 5% Cash Equivalents)
A GRAPH IN THE FORM OF A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA
POINTS IN THE TABLE BELOW.
Mexico 20%
Brazil 13%
Argentina 9%
Venezuela 9%
Russia 8%
Bulgaria 6%
Colombia 5%
Philippines 4%
Turkey 4%
Other 22%
---
100%
===
8
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio as of October 31, 1999
================================================================================
<TABLE>
<CAPTION>
Principal Market
Amount ($) (b) Value ($)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Repurchase Agreements 2.3%
Repurchase Agreement with Donaldson, Lufkin and Jenrette dated 10/29/1999 at
5.2%, to be repurchased at $1,335,579 on 11/1/1999, collateralized by a $1,337,000
U.S. Treasury Inflationary Index Note, 3.625%, 1/15/2008 (Cost $1,335,000) ................ 1,335,000 1,335,000
---------
- ---------------------------------------------------------------------------------------------------------------------
Short Term Notes 2.6%
Federal Home Loan Mortgage Corp., 5.16%**, 11/1/1999 (Cost $1,500,000) ...................... 1,500,000 1,500,000
---------
- ---------------------------------------------------------------------------------------------------------------------
Bonds 95.1%
Argentina 8.4%
Argentine Republic, 11%, 12/4/2005 .......................................................... 1,325,000 1,265,373
Argentine Republic, Collateralized Discount Floating Rate Bond, Series L, LIBOR
plus .8125% (6%), 3/31/2023 ............................................................... 700,000 531,125
Argentine Republic, Floating Rate Bond, Series L, LIBOR plus .8125% (6.813%),
3/31/2005 ................................................................................. 3,528,800 3,123,694
---------
4,920,192
---------
Brazil 12.0%
Federative Republic of Brazil, 11.625%, 4/15/2004 ........................................... 2,145,000 2,059,200
Federative Republic of Brazil Global Bond, 10.125%, 5/15/2027 ............................... 1,100,000 863,500
Federative Republic of Brazil, 9.375%, 4/7/2008 ............................................. 2,220,000 1,820,400
Federative Republic of Brazil, "New" Money Bond, Floating Rate Bond, LIBOR plus .875%
(7.0%), 4/15/2009 ......................................................................... 1,250,000 918,750
Federative Republic of Brazil, Debt Conversion Bond, Floating Rate Bond, Series L, LIBOR
plus .875%, (7.0%), 4/15/2012 ............................................................. 2,075,000 1,361,719
---------
7,023,569
---------
Bulgaria 6.0%
Republic of Bulgaria, Collateralized Discount Bond, Tranche A, LIBOR plus .8125%, (6.5%),
7/28/2024 ................................................................................. 375,000 277,969
Republic of Bulgaria, Collateralized Floating Rate Interest Reduction Bond, Series A, Step-up
Coupon, 2.75%, 7/28/2012 .................................................................. 810,000 545,738
Republic of Bulgaria, Interest Arrears Bond, LIBOR plus .8125%, (6.5%), 7/28/2011 ........... 3,470,000 2,645,875
---------
3,469,582
---------
Colombia 4.7%
Republic of Colombia, 7.625%, 2/15/2007 ..................................................... 1,810,000 1,489,865
Republic of Colombia, 8.625%, 4/1/2008 ...................................................... 130,000 110,825
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio
================================================================================
<TABLE>
<CAPTION>
Principal Market
Amount ($) (b) Value ($)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Republic of Colombia, 9.75%, 4/23/2009 ...................................................... 720,000 655,200
Republic of Colombia, 8.375%, 2/15/2027 ..................................................... 650,000 484,250
----------
2,740,140
----------
Jamaica 1.8%
Government of Jamaica, 10.875%, 6/10/2005 ................................................... 1,095,000 1,023,825
----------
Korea 0.6%
Republic of Korea, 8.875%, 4/15/2008 ........................................................ 315,000 327,600
----------
Malaysia 2.5%
Government of Malaysia, 8.75%, 6/1/2009 ..................................................... 1,440,000 1,479,600
----------
Mexico 18.7%
Petroleos Mexicanos S.A., 9.5%, 9/15/2027 ................................................... 2,860,000 2,459,600
United Mexican States, Floating Rate Discount Note (Detachable Oil Priced Indexed Value
Recovery Rights), Series B, LIBOR plus .8125% (5.875%), 12/31/2019 ........................ 2,600,000 2,275,000
United Mexican States, Floating Rate Discount Note (Detachable Oil Priced Indexed Value
Recovery Rights), Series C, LIBOR plus .8125% (5.874%), 12/31/2019 ........................ 1,500,000 1,312,500
United Mexican States, Floating Rate Discount Bond (Detachable Oil Priced Indexed Value
Recovery Rights), Series D, LIBOR plus .8125% (6.068%), 12/31/2019 ........................ 5,550,000 4,856,250
----------
10,903,350
----------
Morocco 2.9%
Kingdom of Morocco, Restructuring and Consolidation Agreement, Tranche A, Floating Rate
Bond, LIBOR plus .8125%, (5.906%), 1/1/2009 ............................................... 1,947,500 1,706,497
----------
Nigeria 1.8%
Central Bank of Nigeria, 6.25%, 11/15/2020 ................................................. 1,750,000 1,028,125
----------
Panama 3.3%
Republic of Panama, Interest Reduction Bond, Step-up Coupon, 4.25%, 7/17/2014 ............... 185,000 137,825
Republic of Panama, Past Due Interest Bond, LIBOR plus .8125% (6.5%; 4.0% with
2.5% Interest Capitalization), 7/17/2016 .................................................. 1,827,150 1,370,363
Republic of Panama, 7.875%, 2/13/2002 ....................................................... 450,000 437,625
----------
1,945,813
----------
Peru 3.7%
Republic of Peru, Floating Rate Interest Reduction Bond, Step-up Coupon, 3.75%, 3/7/2017 .... 3,880,000 2,134,000
----------
Philippines 4.2%
Republic of the Philippines, 8.875%, 4/15/2008 .............................................. 1,250,000 1,220,313
Republic of the Philippines, 9.875%, 1/15/2019 .............................................. 1,285,000 1,246,450
----------
2,466,763
----------
Russia 7.4%
Russian Federation Principal Loan, Floating Rate Bond, LIBOR plus .8125% (6.063%),
12/15/2020* ............................................................................... 9,970,000 922,225
</TABLE>
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio
================================================================================
<TABLE>
<CAPTION>
Principal Market
Amount ($) (b) Value ($)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Russian Ministry of Finance, 11.75%, 6/10/2003 .............................................. 1,840,000 1,122,400
Russian Ministry of Finance, 10%, 6/26/2007 ................................................. 4,625,000 2,289,375
----------
4,334,000
----------
Slovak Republic 1.7%
Slovak Republic, 9.5%, 5/28/2003 ............................................................ 965,000 977,063
----------
South Africa 2.8%
Republic of South Africa, 8.375%, 10/17/2006 ................................................ 610,000 594,750
Republic of South Africa, 9.125%, 5/19/2009 ................................................. 280,000 281,750
Republic of South Africa, 8.5%, 6/23/2017 ................................................... 880,000 772,200
----------
1,648,700
----------
Turkey 4.2%
Republic of Turkey, 11.875%, 11/5/2004 ...................................................... 855,000 851,819
Republic of Turkey, 12%, 12/15/2008 ......................................................... 880,000 891,000
Republic of Turkey, 12.375%, 6/15/2009 ...................................................... 672,000 678,720
----------
2,421,539
----------
Venezuela 8.4%
Republic of Venezuela, Debt Conversion Bond, Floating Rate Bond, Series DL, LIBOR
plus .875% (6.313%), 12/18/2007 ........................................................... 5,059,510 4,064,304
Republic of Venezuela, Floating Rate Interest Reduction Bond, Series A, LIBOR plus .875%
(6.875%), 3/31/2007 ....................................................................... 892,850 709,816
Republic of Venezuela, Floating Rate Interest Reduction Bond, Series B, LIBOR plus .875%
(6.875%), 3/31/2007 ....................................................................... 178,570 141,963
----------
4,916,083
----------
Total Bonds (Cost $53,796,665) .............................................................. 55,466,441
----------
- ---------------------------------------------------------------------------------------------------------------------
Total Investment Portfolio-- 100.0% (Cost $56,631,665) (a) .................................. 58,301,441
==========
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing
** Annualized yield at time of purchase; not a coupon rate. (Unaudited)
(a) The cost of the investment portfolio for federal income tax purposes was
$56,897,833. At October 31, 1999, net unrealized appreciation for all
securities based on tax cost was $1,403,608. This consisted of aggregate
gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost of $1,918,306 and aggregate gross
unrealized depreciation for all securities in which there was an excess of
tax cost over market value of $514,698.
(b) Principal amounts are stated in U.S. dollars unless otherwise noted.
The accompanying notes are an integral part of the financial statements.
11
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
as of October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments, at market (identified cost $56,631,665) ................... $ 58,301,441
Cash ................................................................... 41,243
Receivable for investments sold ........................................ 6,256,326
Interest receivable .................................................... 1,432,692
Other assets ........................................................... 2,512
-------------
Total assets ........................................................... 66,034,214
LIABILITIES
Payable for investments purchased ...................................... 7,435,810
Dividends payable ...................................................... 1,478,741
Accrued management fee ................................................. 56,169
Other payables and accrued expenses .................................... 168,436
-------------
Total liabilities ...................................................... 9,139,156
-------------
Net assets, at market value ............................................ $ 56,895,058
=============
NET ASSETS
Net assets consist of:
Accumulated distributions in excess of net investment income ........... (909,055)
Net unrealized appreciation (depreciation) on investments .............. 1,669,776
Accumulated net realized gain (loss) ................................... (75,028,355)
Paid-in capital ........................................................ 131,162,692
-------------
Net assets, at market value ............................................ $ 56,895,058
=============
Net asset value per share ($56,895,058B 9,858,276 shares of common stock
outstanding, $.01 par value, 100,000,000 shares authorized) .......... $5.77
=====
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
12
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================
- --------------------------------------------------------------------------------
Statement of Operations
Year Ended October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Interest ............................................................... $ 6,310,973
-------------
6,310,973
Expenses:
Management fee ......................................................... 666,865
Directors' fees and expenses ........................................... 58,620
Custodian and accounting fees .......................................... 186,494
Reports to shareholders ................................................ 44,175
Auditing ............................................................... 79,114
Legal .................................................................. 16,243
Services to shareholders ............................................... 41,021
Interest ............................................................... 154,366
Other .................................................................. 31,509
-------------
1,278,407
-------------
Net investment income .................................................. 5,032,566
-------------
Net realized and unrealized gain (loss) on investment transactions
Net realized gain (loss) from:
Investments ............................................................ (6,485,995)
Foreign currency related transactions .................................. (277)
-------------
(6,486,272)
-------------
Net unrealized appreciation (depreciation) on:
Investments ............................................................ 10,532,020
Foreign currency related transactions .................................. (1,554)
-------------
10,530,466
-------------
Net gain (loss) on investment transactions ............................. 4,044,194
-------------
Net increase (decrease) in net assets resulting from operations ........ $ 9,076,760
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
13
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended October 31,
Increase (Decrease) in Net Assets 1999 1998
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income ............................................... $ 5,032,566 $ 12,629,097
Net realized gain (loss) from investment transactions ............... (6,486,272) (68,733,742)
Net unrealized appreciation (depreciation) on investment transactions
during the period ................................................... 10,530,466 (4,023,556)
------------ ------------
Net increase (decrease) in net assets resulting from operations ..... 9,076,760 (60,128,201)
------------ ------------
Distributions to shareholders from:
Net investment income ............................................... (5,900,443) (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 ....................................... 265,247 1,893,156
------------ ------------
Net increase (decrease) in net assets from Fund share transactions .. 265,247 47,488,085
------------ ------------
Increase (decrease) in net assets ................................... 3,441,564 (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 $909,055 at October 31, 1999) .... $ 56,895,058 $ 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 ...... 50,469 155,744
------------ ------------
Net increase (decrease) in Fund Shares .............................. 50,469 3,652,358
------------ ------------
Shares outstanding at end of period ................................. 9,858,276 9,807,807
============ ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
14
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================
- --------------------------------------------------------------------------------
Statement of Cash Flows
Year Ended October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Cash flows from operating activities:
Investment income received ..................................................... $ 5,410,159
Payment of expenses ............................................................ (1,535,516)
Proceeds from sales and maturities of investments .............................. 196,142,138
Purchases of investments ....................................................... (177,082,740)
Net maturities of short-term investments ....................................... 5,303,714
-------------
Cash provided by operating activities .......................................... 28,237,755
-------------
Cash flows from financing activities:
Net increase (decrease) in reverse repurchase agreements ....................... (24,018,516)
Distributions paid (net of reinvestment of dividends) .......................... (4,156,445)
Cash paid to custodian for borrowings .......................................... (21,551)
-------------
Cash used by financing activities .............................................. (28,196,512)
-------------
Increase (decrease) in cash .................................................... 41,243
Cash at beginning of period .................................................... 0
-------------
Cash at end of period .......................................................... $ 41,243
=============
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 ................ 9,076,760
Net (increase) decrease in cost of investments ................................. 19,994,722
Net (increase) decrease in unrealized appreciation (depreciation) on investments (10,532,020)
(Increase) decrease in interest receivable ..................................... 507,312
(Increase) decrease in receivable for investments sold ......................... 3,076,806
(Increase) decrease in other assets ............................................ (1,103)
Increase (decrease) in payable for investments purchased ....................... 6,373,944
Increase (decrease) in unrealized appreciation (depreciation) on foreign forward
currency contracts .......................................................... (1,554)
Increase (decrease) in accrued expenses ........................................ (92,627)
Increase (decrease) in interest payable ........................................ (164,485)
-------------
Cash provided by operating activities .......................................... $ 28,237,755
=============
</TABLE>
The accompanying notes are an integral part of the financial statements.
- --------------------------------------------------------------------------------
15
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Highlights
================================================================================
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Years Ended October 31,
------------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period ...................... $ 5.45 $ 13.11 $ 15.61 $ 11.20 $ 13.41
------- ------- ------- ------- -------
Net investment income ..................................... .51 1.33 1.28 1.59 1.55
Net realized and unrealized gain (loss) on investment
transactions ........................................... .41 (7.49) .64 4.32 (2.08)
------- ------- ------- ------- -------
Total from investment operations .......................... .92 (6.16) 1.92 5.91 (.53)
------- ------- ------- ------- -------
Less distributions:
From net investment income ................................ (.60) (1.24) (1.50) (1.50) (1.30)
From net realized gains on investment transactions ........ -- -- (2.92) -- (.15)
Tax return of capital ..................................... -- (.26) -- -- (.23)
------- ------- ------- ------- -------
Total distributions ....................................... (.60) (1.50) (4.42) (1.50) (1.68)
------- ------- ------- ------- -------
Net asset value, end of period ............................ $ 5.77 $ 5.45 $ 13.11 $ 15.61 $ 11.20
======= ======= ======= ======= =======
Market value, end of period ............................... $ 4.75 $ 6.88 $ 12.13(b) $ 13.88 $ 12.13
======= ======= ======= ======= =======
Total Investment Return
Per share market value (%) ................................ (22.49) (36.19) 19.72 27.93 5.78
Per share net asset value (%) (c) ......................... 18.78 (52.80) 14.03 55.81 (3.46)
Ratios and Supplemental Data
Net assets, end of period ($ millions) .................... 57 53 81 95 67
Ratio of operating expenses (excluding interest) to average
net assets (%) ......................................... 2.02 1.60 1.85 1.79 1.96
Ratio of operating expenses to average net assets (%) ..... 2.30 2.67 2.36 3.28 3.66
Ratio of net investment income to average net assets (%) .. 9.06 11.28 7.80 11.66 13.59
Portfolio turnover rate (%) ............................... 323.1 323.7 362.3 322.3 365.9
</TABLE>
(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.
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.
- --------------------------------------------------------------------------------
16
<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 (the "1940 Act"), as a closed-end,
non-diversified 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 purchased with an original
maturity 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 instruments purchased with an original
maturity of sixty days or less are valued at amortized cost. All other
securities are valued at their fair value as determined in good faith by the
Valuation Committee of the Board of Directors.
Foreign Currency Translations. The books and records of the Fund are maintained
in U.S. dollars. Investment securities and other assets and liabilities
denominated in a foreign currency are translated into U.S. dollars at the
prevailing exchange rates at period end. Purchases and sales of investment
securities, income and expenses are translated into U.S. dollars at the
prevailing exchange rates on the respective dates of the transactions.
Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses between trade and settlement dates on securities
transactions, the disposition of forward foreign currency exchange contracts and
foreign currencies, and the difference between the amount of net investment
income accrued and the U.S. dollar amount actually received. That portion of
both realized and unrealized gains and losses on investments that results from
fluctuations in foreign currency exchange rates is not separately disclosed but
is included with net realized and unrealized gains and losses on investment
securities.
Repurchase Agreements. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, 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
principal amount of the repurchase price plus accrued interest.
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 amount the Fund is obligated
to pay to repurchase these securities. 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.
17
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
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, 1999, the Fund had a net tax
basis capital loss carryforward of approximately $74,750,000, which may be
applied against any realized net taxable capital gains of each succeeding year
until fully utilized or until October 31, 2006 ($59,000,000) and October 31,
2007 ($15,750,000), the expiration dates, whichever occurs first.
Distribution of Income and Gains. Distributions of net investment income, if
any, are made quarterly. Net realized gains from investment transactions, in
excess of available capital loss carryforwards, would be taxable to the Fund if
not distributed, and, therefore, will be distributed to shareholders at least
annually.
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.
Investment Transactions and Investment Income. Investment transactions are
accounted for on the trade date. Interest income is recorded on the accrual
basis. Dividend income is recorded on the ex-dividend date. Realized gains and
losses from investment transactions are recorded on an identified cost basis.
All discounts are accreted for both tax and financial reporting purposes.
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 October 31,
1999.
B. Purchases and Sales of Securities
During the year ended October 31, 1999, purchases and sales of investment
securities (excluding short-term investments) aggregated $183,456,684 and
$193,019,511, 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 fee at an
annualized rate of 1.20% of the average weekly net assets of the Fund. For the
year ended October 31, 1999, the fee pursuant to such agreements amounted to
$666,865.
18
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
The Fund pays each Director not affiliated with the Adviser an annual retainer
plus specified amounts for attended board and committee meetings. For the year
ended October 31, 1999, Directors' fees and expenses aggregated $58,620.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
October 31, 1999, the amount charged to the Fund by SFAC aggregated $60,609, of
which $10,219 is unpaid at October 31, 1999.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, provides
shareholder communications services for the Fund. For the year ended October 31,
1999, the amount charged to the Fund by SSC aggregated $15,000, of which $1,250
is unpaid at October 31, 1999.
D. Borrowings
The Fund has entered into reverse repurchase agreements with third parties
involving its holdings in foreign debt securities. At October 31, 1999, the Fund
had no outstanding reverse repurchase agreements. The average weighted daily
balance of reverse repurchase agreements outstanding during the period ended
October 31, 1999 was $12,116,921. The weighted average interest rate was 4.00%.
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.
19
<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 October 31, 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 October 31, 1999 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
Boston, Massachusetts PricewaterhouseCoopers LLP
December 22, 1999
20
<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 EquiServe, 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 EquiServe, 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
21
<PAGE>
Scudder Global High Income Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
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.
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.
22
<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 four other
closed-end investment companies which invest primarily in foreign securities:
Scudder New Asia Fund, Inc., The Brazil Fund, Inc., The Korea Fund, Inc., and
The Argentina Fund, Inc.
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
ANN M. McCREARY*
Vice President
M. ISABEL SALTZMAN*
Vice President
JOHN MILLETTE*
Vice President and Secretary
PAUL J. ELMLINGER*
Vice President and Assistant Secretary
BRUCE H. GOLDFARB*
Vice President and Assistant Secretary
KATHRYN L. QUIRK*
Vice President and Assistant Secretary
JOHN R. HEBBLE*
Treasurer
CAROLINE PEARSON*
Assistant Secretary
* Scudder Kemper Investments, Inc.
