[LOGO]
Scudder
Global High
Income Fund, Inc.
Annual Report
October 31, 2000
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: 1-800-621-1048
Kemper Service Company
P.O. Box 219153
Kansas City, MO 64121-9153
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
Stockholder Meeting Results ........................ 23
Investment Manager ................................. 24
Directors and Officers ............................. 24
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.
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2
<PAGE>
Scudder Global High Income Fund, Inc.
In Brief
================================================================================
o Scudder Global High Income Fund Inc. returned 19.25%, based on net asset
value for the 12-month period ended October 31, 2000. The focus of the fund
continued to be on credit quality -- investing in those countries that have
improving fundamentals warranting credit upgrades. The J.P. Morgan Emerging
Markets Bond Global Constrained Index returned 14.99% during the same
period. The fund's return based on its market price was 20.22%.
o Financial markets appear to be anticipating a slowdown in the global
economy as witnessed by the volatility demonstrated by the external
markets. Disappointing corporate earnings, a weak euro, and rising energy
prices all contributed to the volatility. However, emerging market
fundamentals continue to be positive, highlighted by numerous credit
upgrades from ratings agencies during the period.
o The fund has attempted to take advantage of rising oil prices by increasing
its exposure to countries that are net exporters of energy.
Letter to Shareholders
================================================================================
Dear Shareholders,
Despite the corrections in the Dow Jones Industrial Average and Nasdaq Composite
Index, as well as the pressures in the high-yield and high-grade corporate
markets in the United States, emerging market debt has performed quite well.
Fundamentals within the emerging market universe have remained strong and yields
have provided for an attractive investment opportunity. The market witnessed
several key credit upgrades during the period, supporting the trend towards an
overall improvement in the fundamentals within the asset class. Among these
upgrades were Mexico, which received an investment-grade rating from Moody's
Investors Service in March and Brazil, which received a one notch upgrade from
Moody's. However, the external markets continue to create the greatest risks to
emerging markets. Volatility from developed equity markets as well as fears of
slowing corporate profits in the United States are having the greatest negative
influence on emerging market yield spreads. And while the rising price of oil is
beneficial for most major emerging market economies, its effect on developed
economies throughout the world has resulted in increased inflation concerns. So,
while the general credit momentum within emerging markets continues to point
towards solid fundamentals, external market factors have adversely impacted
credit spreads within our asset class. Still, emerging market debt has been one
of the best-performing fixed-income asset classes during this period.
Over the 12-month period ended October 31, 2000, the fund posted a 19.25% total
return based on net asset value. The focus of the fund continued to be on credit
quality -- investing in those countries that have improving fundamentals
warranting credit upgrades. The J.P. Morgan Emerging Markets Bond Global
Constrained Index returned 14.99% during the same period. The fund's return
based on its market price was 20.22%.
Key Events in Emerging Markets
For emerging market countries, the end of 2000 provided signs of a strong
economic recovery. Rising commodity prices (particularly oil), fading concerns
regarding the Y2K effects, and improving economic fundamentals all provided
support for emerging market bonds. The global backdrop was also favorable as the
Federal Reserve Board (the Fed) began injecting liquidity into the financial
markets in an attempt to
3
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
increase investor confidence as the Y2K rollover approached. Investors' appetite
for risk returned to global asset markets as the Nasdaq soared to new highs and
emerging market debt spreads continued to rally. The world began to exhibit
signs of balanced growth, with Europe demonstrating sustainable growth with low
inflation, Japan showing signs of a recovery, while the Fed was set to slow
growth in the United States.
After the new year, as the United States continued to exhibit strong economic
growth, concerns over inflation began to impact credit markets. U.S. credit
markets began to weaken and the U.S. Treasury curve began to invert, with yields
on shorter-term debt exceeding those of longer-term debt (partly due to the
announcement of Treasury buybacks of longer-term debt). The increasing
volatility of developed-country equity markets began to impact emerging market
debt towards the beginning of the second quarter. Appetite for credit was
falling and investors' aversion to risk was returning to credit markets, putting
spread products under pressure. However, after successive attempts by the Fed to
moderate the U.S. economy and slow inflation expectations, evidence began to
emerge that the end of the Fed tightening cycle was in sight.
At the beginning of the third quarter, global financial markets began
anticipating lower volatility as expectations mounted that the Fed had achieved
a "soft landing" and that further interest rate increases were no longer needed.
Equity markets rallied against this backdrop and emerging market debt followed
suit, posting strong returns over the subsequent months. However, as the summer
months came to a close, oil price movements and disappointing U.S. corporate
earnings put renewed pressure on financial markets. In a matter of months, the
focus of investors had gone from concerns surrounding an overheating U.S.
economy to a global economic slowdown. In addition, flare-ups in the Middle East
as well as unsuccessful attempts at reversing the euro's slide added to the
noise keeping financial markets on edge.
Shift from Asia to Latin America
Our focus on credit quality -- investing in those countries that have improving
fundamentals -- guided the fund as we shifted assets out of Asia and into Latin
America, which had begun exhibiting signs of economic growth, fiscal reform, and
strengthening currencies. On a relative value basis, Latin America offered
attractive valuations whereas Asian bonds fairly reflected the economic momentum
they had regained since the Asian financial crisis. As a result, we did not feel
Asian bonds offered as much upside potential as Latin America. We added to
Brazil, a country continuing to make significant grounds on economic reform
while demonstrating a renewed focus on growth as well as a commitment to
fighting inflation. The fund's largest position during the first half of the
period was in Mexico in an effort to take advantage of an expected ratings
upgrade to investment grade. With the Mexican government demonstrating prudent
debt management as well as proactive-monetary and fiscal policy, we felt that an
investment grade rating was justified and current spread levels were not
properly reflecting the positive fundamental environment.
In the latter half of the period, the fund began to focus on the rising price of
energy commodities and their impact on emerging market countries. More
specifically, we focused on net exporters of oil and began to increase our
exposure to such countries as Russia, Mexico, Venezuela, and Colombia and, to a
lesser extent, Ecuador. With over 80% of its total exports coming from oil,
Venezuela remains the purest play on rising oil prices. Roughly 40% of Russia's
exports are derived from oil and natural gas. Mexico enjoys the best of both
worlds -- the benefits of rising oil prices as well as expectations of a credit
upgrade to investment grade before year's end. Colombia and Ecuador, both of
which still have to make significant progress in terms of
4
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
economic growth and fiscal reform, are two of our smaller plays on the oil
theme.
Other Emerging Markets
In Eastern Europe, the fund increased its exposure to Russia as we became more
comfortable with the political climate. More important, economic performance
continues to improve, leading to rising financial reserves. The government
continues to demonstrate a commitment towards structural and economic reform,
and the benefits are beginning to show. The credit outlook for Russia continues
to improve and we would expect to see a credit upgrade in the near future. For
much of the period, we held a comfortable position in Turkey but reduced that
exposure more recently. While the government had made significant progress in
reducing inflation while achieving outstanding results on its privatization
program, recently, the privatization progress has lost some of its momentum and
increasing refinancing requirements have become a concern. On the other hand,
the fund has maintained its exposure to Bulgaria. While we would like to see
further progress on the privatization front, Bulgaria is one of the few
countries that does not need to tap the capital markets this year for financing.
Given its prudent economic policy, we believe Bulgaria could be a candidate for
a credit rating upgrade in the next year.
Meanwhile, October was a very eventful month for Argentina. A change in
President de la Rua's cabinet shifted the balance of power in favor of the
opposition Radical party. Shortly thereafter, Vice President Alvarez resigned,
raising concerns over the governability of the country. Then, when the
opposition party failed to support the 2001 budget, the fragile coalition that
President de la Rua had woven began to show cracks. On the economic side, there
has been a lack of evidence to demonstrate a sustainable growth path,
highlighted by the continued disappointment in tax receipts. Investor confidence
has begun to erode and bond prices have come under pressure. However,
speculation is increasing that a possible financial assistance package from the
International Monetary Fund and other multilateral organizations could be in the
works, which would provide some short-term relief for the country. In addition,
the banking system remains healthy and the deposit base continues to grow.
International reserves are estimated at roughly $25 billion -- close to an
all-time high. Against this backdrop, the fund has held a conservative position
in Argentina, owning long- and short-duration floating rate instruments as well
as assets collateralized by U.S. Treasury strips. Ultimately, investor
confidence needs to be restored but, until then, the fund will maintain its
conservative position until signs emerge that sentiment is changing.
The fund has not been overly involved in Asia during the period. Earlier in the
year, this was more a reflection of relative value rather than fundamentals.
Since the Asian financial crisis, most of the Asian economies have regained
their economic momentum. The economic recovery has caused Asian bond spreads to
tighten, pushing prices to the point where we felt the bonds had become
overvalued. Given the expected economic improvements elsewhere within the
emerging markets universe, we felt that we could find more attractive
investments outside of Asia. In addition, during the summer months, the return
prospects for Asian investment-grade credits were capped as cross-over buyers --
investors outside of the dedicated emerging markets universe who purchase
emerging market bonds -- were fed a steady diet of supply from the U.S.
high-grade markets. Without the demand created from these buyers, potential for
significant price appreciation was limited. And, with countries such as South
Korea and the Philippines being net oil importers, concerns surrounding the
effects of rising energy prices weighed on the region.
5
<PAGE>
Scudder Global High Income Fund, Inc.
Letter to Shareholders
================================================================================
Looking ahead
While we expect emerging market fundamentals to continue to improve, we expect
developments in external markets to continue impacting emerging market debt.
Concerns surrounding a hard landing in the United States have kept asset markets
on edge as demonstrated by the recent sell-offs in the equity markets.
Volatility in developed countries has increased as world markets reprice a
slowdown in global growth. Also, concerns persist over a sustained increase in
the price of energy and its potential impact on inflation. However,
opportunities do exist within emerging markets. We expect the improving credit
cycle to continue, with additional upgrades in Brazil, Russia, and Mexico. From
a historical perspective, yields on emerging market bonds are very attractive.
Taking all these factors into account, the focus of the fund remains on higher
credit quality countries with improving fundamentals. While we expect volatility
in the near term, we continue to search for opportunities within the emerging
market universe and remain poised to take advantage of the improving
fundamentals within our markets.
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.
We are pleased to remind our shareholders that information about the fund's
holdings and performance is available on the Internet at www.cefa.com, and will
soon be available on a Scudder Closed End Fund Web site that is currently under
construction.
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, 2000
================================================================================
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 1.73 -- .03 -- -.19 --
One Year 20.22 20.22 19.25 19.25 20.47 20.47
Three Year -40.54 -15.91 -33.14 -12.56 29.96 9.12
Five Year -8.93 -1.85 18.79 3.50 108.10 15.77
Life of Fund* 8.27 .97 41.49 4.30 171.82 12.87
</TABLE>
--------------------------------------------------------------------------------
Per Share Information and Returns
THE ORIGINAL DOCUMENT CONTAINS A BAR CHART HERE
BAR 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
2000 19.25
<TABLE>
<CAPTION>
1992* 1993 1994 1995 1996 1997 1998 1999 2000
---------------------------------------------------------------------------------------------------------------------
<S> <C> <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 $ 6.10
Income Dividends ... $ .13 $ 1.49 $ 1.51 $ 1.53 $ 1.50 $ 1.50 $ 1.50 $ .60 $ .60
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 19.25
</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 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. Since
adopting its current objective, the cumulative return is -32.07%. 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, 2000
================================================================================
Investment Allocation (Excludes 2% Cash Equivalents)
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Sovereign Bonds (1) 100%
====
(1) Includes 40% investments in Brady Bonds.
--------------------------------------------------------------------------------
Interest Rate Sensitivity (Excludes 2% Cash Equivalents)
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Fixed Rate Bonds 67%
Floating Rate Bonds 33%
----
100%
====
--------------------------------------------------------------------------------
Geographical (Excludes 2% Cash Equivalents)
A PIE CHART APPEARS HERE, ILLUSTRATING THE EXACT DATA POINTS IN THE TABLE BELOW.
Brazil 22%
Mexico 17%
Russia 14%
Argentina 12%
Venezuela 6%
Bulgaria 5%
Turkey 4%
Panama 4%
Colombia 4%
Other 12%
----
100%
====
8
<PAGE>
Scudder Global High Income Fund, Inc.
Investment Portfolio as of October 31, 2000
================================================================================
<TABLE>
<CAPTION>
Principal
Amount ($) Value ($)
-----------------------------------------------------------------------------------------------
<S> <C> <C>
-----------------------------------------------------------------------------------------------
Short-Term Notes 1.7%
Student Loan Marketing Association, 6.45%*, 11/1/2000 (Cost
$1,194,000) ....................................................... 1,194,000 1,194,000
-----------------------------------------------------------------------------------------------
Bonds 98.3%
Argentina 12.0%
Argentine Republic, 11.75%, 4/7/2009 ................................ 1,090,000 953,750
Argentine Republic, 11.375%, 1/30/2017 .............................. 495,000 415,800
Argentine Republic, 12%, 2/1/2020 (b) ............................... 1,830,000 1,580,663
Argentine Republic, Collateralized Discount Floating Rate
Bond, Series L, LIBOR plus .8125% (7.875%), 3/31/2023 ............. 1,450,000 1,094,750
Argentine Republic, Collateralized Par Bond, Series L,
Step-up Coupon, 6%, 3/31/2023 ..................................... 1,100,000 719,818
Argentine Republic, Floating Rate Bond, LIBOR plus .8125%
(7.625%), 3/31/2005 (b) ........................................... 4,093,200 3,576,434
----------
8,341,215
----------
Brazil 21.2%
Federative Republic of Brazil, 11.625%, 4/15/2004 (b) ............... 2,330,000 2,353,300
Federative Republic of Brazil, 14.5%, 10/15/2009 .................... 185,000 197,488
Federative Republic of Brazil, 12.75%, 1/15/2020 .................... 1,000,000 927,500
Federative Republic of Brazil, 10.125%, 5/15/2027 ................... 2,850,000 2,151,750
Federative Republic of Brazil, 12.25%, 3/6/2030 ..................... 1,255,000 1,085,575
Federative Republic of Brazil, 11%, 8/17/2040 ....................... 1,880,000 1,442,900
Federative Republic of Brazil C Bond, 8%, 4/15/2014 (b) ............. 3,294,022 2,462,281
Federative Republic of Brazil, Collateralized Discount
Floating Rate Bond, LIBOR plus .8125% (7.625%), 4/15/2024 ......... 750,000 571,875
Federative Republic of Brazil, Eligible Interest, Floating
Rate Bond, LIBOR plus .8125% (7.625%), 4/15/2006 (b) .............. 3,489,200 3,179,534
Federative Republic of Brazil, "New" Money Bond, Floating
Rate Bond, LIBOR plus .875% (7.69%), 4/15/2009 ................... 460,000 393,300
----------
14,765,503
----------
Bulgaria 5.3%
Republic of Bulgaria, Collateralized Floating Rate Interest Reduction
Bond, Series A, Step-up Coupon, 3%, 7/28/2012 ..................... 1,390,000 990,375
Republic of Bulgaria, Collateralized Discount Bond, Series A,
LIBOR plus .8125% (7.75%), 7/28/2024 .............................. 1,125,000 843,750
Republic of Bulgaria, Interest Arrears Bond, LIBOR plus
.8125% (7.75%), 7/28/2011 (b) ..................................... 2,475,000 1,843,875
----------
3,678,000
----------
Colombia 3.8%
Republic of Colombia, 7.625%, 2/15/2007 (b) ......................... 605,000 453,750
</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
Amount ($) Value ($)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Republic of Columbia, 9.75%, 4/23/2009 (b) ........................................ 1,110,000 885,225
Republic of Columbia, 11.75%, 2/25/2020 ........................................... 1,635,000 1,308,000
-----------
2,646,975
-----------
Ecuador 1.5%
Republic of Ecuador, 12%, 11/15/2012 .............................................. 575,000 389,563
Republic of Ecuador, Step-up Coupon, 4%, 8/15/2030 ................................ 1,800,000 679,500
-----------
1,069,063
-----------
Jamaica 2.9%
Government of Jamaica, 10.875%, 6/10/2005 ......................................... 775,000 744,000
-----------
Government of Jamaica, 12.75%, 9/1/2007 ........................................... 1,320,000 1,300,200
-----------
2,044,200
Mexico 17.0%
Petroleos Mexicanos S.A., 9.5%, 9/15/2027 ......................................... 1,565,000 1,506,313
United Mexican States, 10.375%, 2/17/2009 ......................................... 1,470,000 1,561,875
United Mexican States, Collateralized Par Bond, Series B, 6.25%, 12/31/2019 ....... 400,000 351,000
United Mexican States, Collateralized Par Bond, (Detachable Oil Priced Indexed
Value Recovery Rights), Series A, 6.25%, 12/31/2019 ............................. 730,000 640,575
United Mexican States, Collateralized Par Bond, (Detachable Oil Priced Indexed
Value Recovery Rights), Series B, 6.25%, 12/31/2019 ............................. 1,860,000 1,632,150
United Mexican States, Floating Rate Discount Bond (Detachable Oil Priced Indexed
Value Recovery Rights), Series A, LIBOR plus .8125% (7.5325%), 12/31/2019 ....... 3,000,000 3,041,250
United Mexican States, Floating Rate Discount Bond
(Detachable Oil Priced Indexed
Value Recovery Rights), Series B, LIBOR plus .8125% (7.6025%), 12/31/2019 ....... 1,350,000 1,368,563
United Mexican States Global Bond, 11.375%, 9/15/2016 ............................. 1,550,000 1,755,372
-----------
11,857,098
-----------
Morocco 2.1%
Kingdom of Morocco, Restructuring and Consolidation
Agreement, Tranche A, Floating Rate Bond, LIBOR plus .8125% (7.75%), 1/1/2009 ... 1,671,667 1,458,529
-----------
Panama 3.5%
Republic of Panama, 7.875%, 2/13/2002 ............................................. 450,000 443,250
Republic of Panama, 10.75%, 5/15/2020 ............................................. 1,125,000 1,102,500
Republic of Panama, Interest Reduction Bond, Step-up Coupon 4.5%, 7/17/2014 ....... 75,000 59,250
Republic of Panama, Past Due Interest Bond, LIBOR plus .8125%
(7.75%; 4.0% with 3.75% Interest Capitalization), 7/17/2016 ..................... 1,041,964 807,522
-----------
2,412,522
-----------
Philippines 3.4%
Republic of the Philippines, 10.625%, 3/16/2025 ................................... 3,110,000 2,355,825
-----------
</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
Amount ($) Value ($)
----------------------------------------------------------------------------------------------
<S> <C> <C>
Russia 14.3%
Russian Federation, 9.25%, 11/27/2001 .............................. 1,125,000 1,098,281
Russian Federation, 11.75%, 6/10/2003 .............................. 1,150,000 1,098,250
Russian Federation, 8.75%, 7/24/2005 ............................... 900,000 707,625
Russian Federation, 10%, 6/26/2007 ................................. 4,260,000 3,189,675
Russian Federation, 8.25%, 3/31/2010 ............................... 1,167,380 748,582
Russian Federation, Step-up Coupon, 2.5%, 3/31/2030 ................ 8,250,000 3,109,219
-----------
9,951,632
-----------
South Africa 1.6%
Republic of South Africa, 9.125%, 5/19/2009 ........................ 1,010,000 983,488
Republic of South Africa, 8.5%, 6/23/2017 .......................... 115,000 100,625
-----------
1,084,113
-----------
Turkey 3.6%
Republic of Turkey, 12.375%, 6/15/2009 ............................. 1,682,000 1,682,000
Republic of Turkey, 11.75%, 6/15/2010 .............................. 650,000 627,250
Republic of Turkey, 11.875%, 1/15/2030 ............................. 170,000 165,750
-----------
2,475,000
-----------
Venezuela 6.1%
Republic of Venezuela, Floating Rate Interest Reduction Bond, Series
A, LIBOR plus .875% (7.625%), 3/31/2007 .......................... 1,392,840 1,149,093
Republic of Venezuela, Debt Conversion Bond, Floating Rate
Bond, Series DL, LIBOR plus .875% (7.875%), 12/18/2007 ........... 3,749,970 3,131,225
-----------
4,280,318
-----------
Total Bonds (Cost $69,720,223) ..................................... 68,419,993
-----------
----------------------------------------------------------------------------------------------
Total Investment Portfolio -- 100.0% (Cost $70,914,223) (a) ......... 69,613,993
----------------------------------------------------------------------------------------------
</TABLE>
* Annualized yield at time of purchase, not a coupon rate. (Unaudited)
(a) The cost of the investment portfolio for federal income tax purposes
was $71,351,087. At October 31, 2000, net unrealized depreciation for
all securities based on tax cost was $1,737,094. This consisted of
aggregate gross unrealized appreciation for all securities in which
there was an excess of market value over tax cost of $586,209 and
aggregate gross unrealized depreciation for all securities in which
there was an excess of tax cost over market value of $2,323,303.
(b) At October 31, 2000 these securities, in whole or in part, are subject
to repurchase under reverse repurchase agreements.
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, 2000
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
ASSETS
<S> <C>
Investments in securities, at value (cost $70,914,223) ................. $ 69,613,993
Cash ................................................................... 226
Interest receivable .................................................... 1,578,472
Receivable for investments sold ........................................ 4,129,510
Receivable for reverse repurchase agreements ........................... 811,299
Other assets ........................................................... 4,207
-------------
Total assets ........................................................... 76,137,707
LIABILITIES
Reverse repurchase agreements .......................................... 8,943,699
Payable for investments purchased ...................................... 4,943,161
Interest payable for reverse repurchase agreements ..................... 69,045
Dividends payable ...................................................... 1,434,073
Accrued management fee ................................................. 73,340
Other accrued expenses and payables .................................... 126,198
-------------
Total liabilities ...................................................... 15,589,516
-------------
Net assets, at value ................................................... $ 60,548,191
=============
NET ASSETS Net assets consist of:
Accumulated distributions in excess of net investment income ........... (236,694)
Net unrealized appreciation (depreciation) on investments .............. (1,300,230)
Accumulated net realized gain (loss) ................................... (69,380,529)
Paid-in capital ........................................................ 131,465,644
-------------
Net assets, at value ................................................... $ 60,548,191
=============
Net asset value per share ($60,548,191B 9,920,436 shares of common stock $ $6.10
outstanding, $.01 par value, 100,000,000 shares authorized) ......... =====
The accompanying notes are an integral part of the financial statements.
----------------------------------------------------------------------------------------
</TABLE>
12
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================
--------------------------------------------------------------------------------
Statement of Operations
Year Ended October 31, 2000
--------------------------------------------------------------------------------
Investment Income
Income:
Dividends ..................................................... $ 27,720
Interest ...................................................... 8,092,695
-----------
Total Income .................................................. 8,120,415
Expenses:
Management fee ................................................ 736,438
Services to shareholders ...................................... 43,454
Custodian and accounting fees ................................. 151,182
Auditing ...................................................... 79,689
Legal ......................................................... 7,685
Directors' fees and expenses .................................. 57,154
Reports to shareholders ....................................... 64,531
Interest expense .............................................. 355,372
Other ......................................................... 16,699
-----------
1,512,204
Net investment income ......................................... 6,608,211
-----------
Realized and unrealized gain (loss) on investment transactions
Net realized gain (loss) from:
Investments ................................................... 5,647,826
Foreign currency related transactions ......................... (174)
-----------
5,647,652
Net unrealized appreciation (depreciation) on investments ..... (2,970,006)
-----------
Net gain (loss) on investment transactions .................... 2,677,646
-----------
Net increase (decrease) in net assets resulting
from operations ............................................ $ 9,285,857
===========
The accompanying notes are an integral part of the financial statements.
--------------------------------------------------------------------------------
13
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
-----------------------------------------------------------------------------------------------------------
Years Ended October 31,
Increase (Decrease) in Net Assets 2000 1999
-----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .................................................... $ 6,608,211 $ 5,032,566
Net realized gain (loss) on investment transactions ...................... 5,647,652 (6,486,272)
Net unrealized appreciation (depreciation) on investment transactions
during the period ..................................................... (2,970,006) 10,530,466
------------ ------------
Net increase (decrease) in net assets resulting from operations .......... 9,285,857 9,076,760
------------ ------------
Distributions to shareholders from net investment income ................. (5,935,676) (5,900,443)
------------ ------------
Reinvestment of distributions ........................................... 302,952 265,247
------------ ------------
Increase (decrease) in net assets ........................................ 3,653,133 3,441,564
Net assets at beginning of period ........................................ 56,895,058 53,453,494
------------ ------------
Net assets at end of period (including accumulated distributions in
excess of net investment income of $236,694 and $909,055, respectively) $ 60,548,191 $ 56,895,058
============ ============
Other Information
Shares outstanding at beginning of period ................................ 9,858,276 9,807,807
Shares issued to shareholders in reinvestment of distributions ........... 62,160 50,469
------------ ------------
Shares outstanding at end of period ...................................... 9,920,436 9,858,276
============ ============
The accompanying notes are an integral part of the financial statements.
-----------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Statements
================================================================================
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
Statement of Cash Flows
Year Ended October 31, 2000
---------------------------------------------------------------------------------------------------
Cash flows from operating activities:
<S> <C>
Investment income received ..................................................... $ 6,720,111
Payment of expenses ............................................................ (1,468,226)
Proceeds from sales and maturities of investments .............................. 183,513,946
Purchases of investments ....................................................... (192,902,856)
Net maturities of short-term investments ....................................... 1,641,000
-------------
Cash used for operating activities ............................................. (2,496,025)
-------------
Cash flows from financing activities:
Net increase (decrease) in reverse repurchase agreements ....................... 8,132,400
Distributions paid (net of reinvestment of dividends) .......................... (5,677,392)
-------------
Cash provided by financing activities .......................................... 2,455,008
-------------
Increase (decrease) in cash .................................................... (41,017)
Cash at beginning of period .................................................... 41,243
-------------
Cash at end of period .......................................................... $ 226
=============
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 ................ 9,285,857
Net (increase) decrease in cost of investments ................................. (14,282,558)
Net (increase) decrease in unrealized appreciation (depreciation) on investments 2,970,006
(Increase) decrease in interest receivable ..................................... (145,780)
(Increase) decrease in receivable for investments sold ......................... 2,126,816
(Increase) decrease in other assets ............................................ (1,695)
Increase (decrease) in payable for investments purchased ....................... (2,492,649)
Increase (decrease) in accrued expenses ........................................ (25,067)
Increase (decrease) in interest payable ........................................ 69,045
-------------
Cash used for operating activities ............................................. $ (2,496,025)
=============
The accompanying notes are an integral part of the financial statements.
---------------------------------------------------------------------------------------------------
</TABLE>
15
<PAGE>
Scudder Global High Income Fund, Inc.
Financial Highlights
================================================================================
<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
The following table includes selected data for a share outstanding throughout each period and other performance
information derived from the financial statements and market price data.
------------------------------------------------------------------------------------------------------------------------
Years Ended October 31,
----------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net asset value, beginning of period ....................... $ 5.77 $ 5.45 $ 13.11 $ 15.61 $ 11.20
------- ------- ------- ------- -------
Net investment income (a) .................................. .67 .51 1.33 1.28 1.59
Net realized and unrealized gain (loss) on investment
transactions ............................................ .26 .41 (7.49) .64 4.32
------- ------- ------ ------- -------
Total from investment operations ........................... .93 .92 (6.16) 1.92 5.91
------- ------- ------ ------- -------
Less distributions from:
Net investment income ...................................... (.60) (.60) (1.24) (1.50) (1.50)
Net realized gains on investment transactions -- -- -- (2.92) --
Tax return on capital ...................................... -- -- (.26) -- --
------- ------- ------ ------- -------
Total distributions ........................................ (.60) (.60) (1.50) (4.42) (1.50)
------- ------ ------ ------ ------
Net asset value, end of period ............................. $ 6.10 $ 5.77 $ 5.45 $ 13.11 $ 15.61
======= ======= ======= ======= =======
Market value, end of period ................................ $ 5.06 $ 4.75 $ 6.88 $12.13(b) $ 13.88
======= ======= ======= ====== =======
Total Return
Per share market value (%) ................................. 20.22 (22.49) (36.19) 19.72 27.93
Per share net asset value (%) (c) .......................... 19.25 18.78 (52.80) 14.03 55.81
Ratios to Average Net Assets and Supplemental Data
Net assets, end of period ($ millions) ..................... 61 57 53 81 95
Ratio of operating expenses (excluding interest) (%) ....... 1.89 2.02 1.60 1.85 1.79
Ratio of operating expenses (%) ............................ 2.47 2.30 2.67 2.36 3.28
Ratio of net investment income (loss) (%) .................. 10.77 9.06 11.28 7.80 11.66
Portfolio turnover rate (%) ................................ 317 323 324 362 322
</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 accounting
principles generally accepted in the United States of America 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
================================================================================
When-Issued/Delayed Delivery Securities. The Fund may purchase securities with
delivery or payment to occur at a later date beyond the normal settlement
period. At the time the Fund enters into a commitment to purchase a security,
the transaction is recorded and the value of the security is reflected in the
net asset value. The value of the security may vary with market fluctuations. No
interest accrues to the Fund until payment takes place. At the time the Fund
enters into this type of transaction it is required to segregate cash or other
liquid assets at least equal to the amount of the commitment.
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, 2000, the Fund had a net tax
basis capital loss carryforward of approximately $68,900,000, which may be
applied against any realized net taxable capital gains of each succeeding year
until fully utilized or until October 31, 2006 ($53,150,000) and October 31,
2007 ($15,750,000), the respective 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 accounting principles generally accepted in the United
States of America. 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. Certain dividends
from foreign securities may be recorded subsequent to the ex-dividend date as
soon as the Fund is informed of such dividends. 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,
2000.
B. Purchases and Sales of Securities
---------------------------------
During the year ended October 31, 2000, purchases and sales of investment
securities (excluding short-term investments) aggregated $190,419,115 and
$181,387,130, respectively.
18
<PAGE>
Scudder Global High Income Fund, Inc.
Notes to Financial Statements
================================================================================
C. Related Parties
---------------
Under the Investment Management Agreement (the "Management Agreement") with
Scudder Kemper Investments, Inc. ("Scudder Kemper" or the "Manager"), the
Manager directs the investments of the Fund in accordance with the Fund's
investment objectives, policies and restrictions and under the direction and
control of the Fund's Board of Directors. In addition to portfolio management
services, the Manager provides certain administrative services in accordance
with the Management Agreement. The Fund pays to the Manager a monthly fee at an
annualized rate of 1.20% of the average weekly net assets of the Fund. For the
year ended October 31, 2000, the fee pursuant to such agreements amounted to
$736,438.
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, 2000, Directors' fees and expenses aggregated $57,154.
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, 2000, the amount charged to the Fund by SFAC aggregated $62,986, of
which $11,305 is unpaid at October 31, 2000.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, provides
shareholder communications services for the Fund. For the year ended October 31,
2000, the amount charged to the Fund by SSC aggregated $15,000, of which $6,250
is unpaid at October 31, 2000. Effective November 17, 2000, Kemper Service
Company, a wholly-owned subsidiary of the Manager, is the shareholder service
agent of the Fund.
D. Borrowings
----------
The Fund has entered into reverse repurchase agreements with third parties
involving its holdings in foreign debt securities. The average weighted daily
balance of reverse repurchase agreements outstanding during the period ended
October 31, 2000 was $7,051,616. The weighted average interest rate was 5%.
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.
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, 2000, 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 accounting principles generally
accepted in the United States of America. 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 auditing standards
generally accepted in the United States of America 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, 2000 by correspondence with the custodian and brokers, provide a reasonable
basis for our opinion.
Boston, Massachusetts PricewaterhouseCoopers LLP
December 8, 2000
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 Kemper Service 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 Kemper Service 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 10 days
before February 15, or August 15, as the case may be. A participant may withdraw
a voluntary cash payment by written notice, if the notice is received by the
Plan Agent
21
<PAGE>
Scudder Global High Income Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
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 Kemper Service Company, P.O. Box 219153, Kansas City, MO
64121-9153, 1-800-621-1048.
22
<PAGE>
Scudder Global High Income Fund, Inc.
Stockholder Meeting Results (Unaudited)
================================================================================
The Annual Meeting of Stockholders (the "Meeting") of Scudder Global High Income
Fund, Inc. (the "Fund") was held on July 6, 2000, at the office of Scudder
Kemper Investments, Inc., 25th Floor, 345 Park Avenue at 51st Street, New York,
NY 10154-0010. At the Meeting the following matters were voted upon by the
stockholders (the resulting votes for each matter are presented below).
1. To elect two Directors of the Fund to hold office for a term of three years
or until their respective successors have been duly elected and qualified.
Director (Class 1): Number of Votes:
------------------- ---------------
For Withheld Broker Non-Votes*
--- -------- ----------------
Robert J. Callander 9,122,634 277,930 0
Juris Padegs 9,101,048 299,516 0
2. To ratify or reject the action taken by the Board of Directors in selecting
PricewaterhouseCoopers LLP as the Fund's independent accountant for the
fiscal year ending October 31, 2000.
Number of Votes:
----------------
For Against Abstain Broker Non-Votes*
--- ------- ------- ----------------
9,191,022 127,075 82,466 0
--------------------------------------------------------------------------------
* 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.
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 the United Kingdom,
Switzerland, Hong Kong, and Japan.
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 that invest primarily in foreign securities include 21
open-end investment companies as well as portfolios for institutional investors.
In addition to the fund, the Manager also manages the assets of 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.
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
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
BRENDA LYONS*
Assistant Treasurer
CAROLINE PEARSON*
Assistant Secretary
* Scudder Kemper Investments, Inc.
24
