- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
787 Seventh Avenue, New York, New York 10019
(800) 730-2932
INVESTMENT OBJECTIVE
Long-term capital appreciation through investment primarily in equity
securities of Asian companies.
INVESTMENT MANAGER
Schroder Capital Management International Inc. (the "Investment Adviser") is
a wholly-owned indirect subsidiary of Schroders plc, the London Stock Exchange
listed holding company parent of an investment banking and investment management
group of companies (the "Schroder Group") that dates its origins to 1804. The
investment management operations of the Schroder Group are located in 18
countries worldwide, including ten in Asia. The Schroder Investment Management
Group has been managing international investment portfolios since the early
years of this century. At October 31, 1995, the Schroder Investment Management
Group had over $100 billion in assets under management. At that date, the
Investment Adviser, together with its U.K. affiliate, Schroder Capital
Management International Ltd., had over $15 billion under management, of which
approximately $6.5 billion was invested in the Asian region.
December 15, 1995
Dear Shareholder,
We are pleased to present to you the 1995 annual shareholder report of
Schroder Asian Growth Fund, Inc., which covers the fiscal year beginning
November 1, 1994 and ending October 31, 1995. On October 31, 1995, the Fund's
net asset value was $12.62 per share, total net assets were $247,487,124 and the
closing price on the New York Stock Exchange was $11.125. For information on the
Fund's performance, please refer to the table on page 16 entitled "Financial
Highlights".
The following table shows the movements in major Asian stock markets for the
past quarter and fiscal year:
<TABLE>
<CAPTION>
Quarter Ended Fiscal Year Ended
October 31, 1995 October 31, 1995
<S> <C> <C>
- -------------------------------------------------------------------------------
Hong Kong 2.7% 0.8%
India -9.3% -29.7%
Indonesia -6.4% -12.3%
Japan -8.6% -13.1%
Korea 7.4% -3.3%
Malaysia -12.7% -13.5%
Philippines -17.3% -21.9%
Singapore -5.6% -7.7%
Thailand -7.7% -16.4%
</TABLE>
Source: Morgan Stanley Country Index (in U.S. dollars)
- --------------------------------------------------------------------------------
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
PORTFOLIO STRATEGY
At the end of October 1995, the Fund was approximately 96.6% invested in
equity securities, 0.6% in convertible bonds and 2.8% in cash. During the
quarter ended October 31, 1995, the biggest change in country weightings was an
increase in the Japanese weighting from 10.8% to 16.6%, funded primarily from
reductions in Thailand and Malaysia. With the exception of Korea, markets
generally provided disappointing returns over this period despite strong
underlying economic growth and generally good corporate profits announcements.
However, the buoyant macroeconomic conditions across the region (with the
exception of Japan) have ignited inflationary pressures, particularly in
Malaysia but also in the lesser developed economies such as Indonesia and the
Philippines where structural inefficiencies put further pressure on price rises.
Economic reforms, including privatizations, still have a long way to go but
generally the outlook is encouraging as governments realize that the discipline
of the marketplace will reward non-inflationary growth policies but deal harshly
with half hearted reform.
The Fund's continued focus of investments are fast growing, well managed
companies which benefit from the high levels of economic activity in Asia. In
the early part of the year, we increased positions in Hong Kong and Korea
substantially while reducing the weighting in Japan to 10% in the aftermath of
the Kobe earthquake and sharp appreciation of the yen. Following concerted
Central Bank action in August, however, to drive down the value of the yen, Fund
management became more confident about the potential recovery of the Japanese
economy and rebuilt the weighting in Japan to approximately 16% at year end. The
best performing market over the year was Hong Kong, which by October 31
accounted (together with China) for 22.8% of the Fund's assets. In February,
value had begun to appear in the Hong Kong property market after its correction
in 1994 at a time when fears of further US interest rate rises had dissipated.
The austerity program in China also appears to be having an effect with
inflation trending down. We believe the way to access the opportunities arising
from the opening of the Chinese economy is through Hong Kong companies with
quality management and a proven track record. Against a difficult environment
for Pacific Basin markets, this strategy of increasing Japan and Hong Kong at
the expense of Thailand and Malaysia proved to be defensive.
The weakening of the yen from a high of Y79.7 to US$1 on April 19, 1995 to
Y102.00 on October 31, 1995 showed a dramatic change of sentiment towards both
the currency and the Japanese authorities' ability to control events as
investors became increasingly concerned about the stability of Japan's banking
institutions and the possibility of widespread price deflation. The yen now is
trading at a level close to that prevailing at January 2, 1995 and provides a
cushion to Japan's hard hit export sector. Fund management's approach to
currency hedging is defensive and the 10.5% hedge out of Japanese yen back into
US dollars has helped to preserve value for investors since the yen started to
weaken.
Throughout Asia the forces of deregulation and liberalization continue to
flourish leading to a vitality that is hard to find elsewhere. The competitive
wage rates, favorable demographics, high savings rates and sound fiscal and
monetary policies continue to be supportive of high rates of economic activity.
These in turn, we believe, will lead to a return of confidence throughout the
region's stockmarkets. We believe the Fund is well positioned across nine
countries and in stocks ranging from $20 million to $36 billion in market
capitalization to benefit from the long term growth opportunities of the region.
INVESTMENT REVIEW
JAPANESE ECONOMY AND STOCK MARKET
The Japanese stockmarket retraced some of the gains of 1994 and in the year
ending October 31, 1995 was down 13.1% in US dollars. After hitting the year's
low of 14,485 in early July, in the final quarter the market was up 6.1% in
local currency terms but due to a 14.7% depreciation of the yen against the U.S.
dollar the market was down 8.6% in US dollars. In marked contrast to the first
half of the year, policy measures since August exceeded market expectations and
were influential in reversing earlier yen strength. Domestic institutional
activity picked up towards the end of the year partially reflecting the lower
rates of interest on deposits. Stock performance was also heavily influenced by
the currency with exporters performing well while utilities, food and
pharmaceutical companies lagged.
- --------------------------------------------------------------------------------
2
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
We believe that economic conditions should continue to improve. Policy is
shifting decisively in the direction of reflation by way of short term interest
rate cuts and a larger than expected fiscal package. The yen is down 25% from
its peak against the dollar and there is now a commitment to resolve the crises
in the banking industry. This should indicate a more positive environment for
company profits especially given the likelihood of an additional boost to
manufacturing from a weaker exchange rate comparison. We continue to focus on
smaller capitalization companies benefiting from the growth in the region and
structural change within Japan while having exposure to companies such as Nomura
Securities Co. Ltd., which is highly geared to a stockmarket recovery.
SOUTH EAST ASIA
HONG KONG has been the strongest regional market, rising by 0.8% over the
last year and 2.7% during the last quarter. Falling local interest rates and a
bottoming real estate market fueled stockmarket interest and underpinned
positive returns.
Following a management reassessment in January this year when the Hang Seng
Index hit its low of 6,967, the Fund built up its Hong Kong weighting, which
currently forms the largest country weighting in the portfolio. We believe the
future of Hong Kong is in its role as a transportation and services provider to
Southern China. Accordingly, we have shifted the portfolio towards China related
companies. In particular, we added companies such as Citic Pacific Ltd., a
diversified conglomerate with strong Beijing connections, Hutchison Whampoa, the
container port operator, and Huaneng Power International Ltd., the electricity
distributor for five Chinese provinces. We believe that these companies will
benefit from the strong growth that the coastal and eastern regions of China are
experiencing. In addition, macroeconomic news from China has continued to
improve with inflation expected to be 15% by year end. This should enable the
current austerity program to be eased and help improve sentiment.
MALAYSIA has been weak this year with the market falling 12.7% in the last
quarter alone. With the real rate of economic growth in excess of 9% and a
deteriorating current account deficit, fears of overheating and rising interest
rates have caused investor nervousness. Long term, however, Malaysia offers
attractive investment opportunities. As a priority, the government has been
investing in infrastructure which has in turn attracted strong foreign direct
investment and led to rapid growth of a higher value added manufacturing sector.
The current tight monetary policy should return economic growth to a more
sustainable 8%. Having reduced the Fund's exposure to interest rate sensitive
stocks at the end of 1994, the Fund has benefited from its exposure to
infrastructure companies such as Renong Berhad and the growing financial
services sector through companies such as Malaysian Assurance Alliance Berhad, a
beneficiary of the emergence of a middle class which is taking more
responsibility for ensuring adequate financial security in old age.
SINGAPORE continues to be a financial and transportation hub for Southern
Asia. However, the absence of low cost labor in combination with one of the
stronger regional currencies has caused Singapore to lose out competitively.
This has been reflected in some disappointing corporate profit results,
particularly in areas such as ship repair. The market has fallen 7.7% over the
year and 5.6% in the last quarter. However, Singapore, a showcase city-state of
Asia with excellent infrastructure, will continue to be viewed as a regional
"safe haven" especially when compared to the uncertainty facing Hong Kong as
June 1997 approaches. The Fund has concentrated its holdings in the service and
real estate sectors which should benefit from the high spending power of
Singapore's consumers.
- --------------------------------------------------------------------------------
3
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
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EMERGING MARKETS
THAILAND'S economy continued to accelerate into the first half of 1995,
which pushed inflation above the government target of 5%. Consequently, monetary
policy has been tight throughout the year, depressing corporate profits and
causing market weakness. The market was down by 7.7% over the last fiscal
quarter and by 16.4% over the fiscal year. Sentiment was further hit by the
outcome of the general election in May which brought into power a new coalition
government, led by Prime Minister Banharn Silpa-Archa, which many felt did not
have the modernizing credentials of the outgoing government of Chuan Leekpai.
The market has continued to be unnerved by the apparent instability of this
coalition and was further set back by the Securities & Exchange Commission's
proposed introduction of a "trust" system in order to allow greater foreign
ownership of companies, a policy proposal which would broaden foreign
participation in Thai quoted companies (currently there are ceilings on foreign
ownership levels which result in "foreign" shares trading at a premium to local
shares). However the announcement of this proposal led to an immediate markdown
in the foreign premiums which was reflected in the market's decline.
Although confusion remains in the market, the Thai economy looks set to
decelerate to a pace more consistent with lower inflationary pressures. Slower
private investment, manufacturing output and credit growth compounded by a
significant improvement in the trade balance in September should return the
economy to a more sustainable growth rate which will allow interest rates to
fall and corporate profits to rebound. The government will continue its
privatization program thereby broadening the range of attractive investment
opportunities. The Fund has been building up its position in EGCO, the
privatized electricity generator. During the last quarter we began to decrease
the Fund's holding in Thai Farmers Bank Ltd., the largest holding, after a
strong period of out-performance, due to an expected slowdown in earnings over
the next 18 months.
THE PHILIPPINES, down 17.3% in the quarter and 21.9% over the year, also has
suffered from a deteriorating macroeconomic environment brought about by higher
inflation and interest rates. The Peso has come under pressure due to the rising
current account deficit and inflation has been fueled by rising food and
commodity prices. Interim profit results from some large companies were also
disappointing. Accordingly, we reduced the Philippines' weighting in the Fund in
the middle of the year.
At current levels, however, the market reflects much of this bad news.
Looking forward, the government will continue to exercise fiscal discipline in
order to meet International Monetary Fund conditions. Interest rates should fall
early next year and corporate profits regain momentum. The turnaround of The
Philippines makes it the most recent of Asia's economic successes and management
believes that the stability provided by the administration of Fidel Ramos bodes
well for the future. Foreign direct investment flows are accelerating which are
the clearest signs of confidence about the long term.
INDONESIA fell 6.4% in the last quarter as the market saw some selling in
advance of the proposed U.S. $2.3 billion P.T. Telkom privatization issue.
Despite some concerns over the size and pricing of this issue, the Fund
participated in the initial privatization as we believe that this company will
grow in excess of 17% per annum over the next five years and this was not
reflected in the issue price. Over the year, the market was down 12.3%, despite
a background of strong corporate profit results and stable macroeconomics. For
example, P.T. Gudang Garam saw net profits rise in excess of 37% for the first
half of 1995. With favorable demographics and the rising affluence of the
population, the Fund continues to emphasize the high growth areas of consumption
and infrastructure through its stock selection.
INDIA, down 29.7% over the year, has seen a prolonged period of weakness
brought about by deteriorating fiscal and trade positions and political turmoil.
However, throughout this period, corporate profits have continued to be strong.
Index earnings for first-half fiscal year 1995 were up 40%. The market is seeing
a number of new issues this year including a Public Sector Undertakings
divestment program as the government continues its program of deregulation and
liberalization. Thus we remain positive on the development of the Indian market
and are accumulating stocks in the high growth areas of infrastructure,
consumption, power and telecommunications.
- --------------------------------------------------------------------------------
4
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
KOREA has been the strongest performing market over the last fiscal quarter,
up 7.4% but down 3.3% on the fiscal year. After a period of very strong economic
growth in the first half of the year led by exports and capital investment, the
last quarter of this year has seen a slowdown in capital investment which has
been reflected in falling interest rates. First half net profit results were up
42% for the market and this combined with a further opening of the foreign
ownership levels to 15% on July 1, 1995 provided a good background for positive
returns in the fourth quarter. The Fund increased its weighting in Korea
throughout the year as market valuations clearly did not reflect this attractive
outlook. We continue to like larger capitalization stocks such as Korea Mobile
Telecommunications Corp., the monopolistic cellular phone service provider and
Korea Electric Power Corp., the electrical utility.
The Fund held no investments in Taiwan which was down 27.6% over the year.
Given the current tensions between Taiwan and Mainland China, the market will
continue to be volatile. However, on an historic basis, valuations are
attractive and against a background of falling interest rates the Fund will be
monitoring the market closely for investment opportunities.
DIVIDEND REINVESTMENT PLAN
The Fund offers you a plan for the reinvestment of your dividends and
capital gains distribution in shares of the Fund. We have included a detailed
description of the plan at the end of this report. If you wish to participate
please contact the plan agent, State Street Bank and Trust Company, at
1-800-426-5523.
OTHER INFORMATION
The Fund's net asset value is published every Monday in THE WALL STREET
JOURNAL under the heading "Closed End Funds". The Fund's symbol is "SHF". The
Fund's net asset value is also published in THE NEW YORK TIMES and BARRON'S.
In addition, the Fund publishes a newsletter in the middle of each month,
detailing country weightings and a market update. You can request a copy of this
by calling toll-free 1-800-730-2932.
During the fiscal year ended October 31, 1995, there have been (i) no
material changes in the Fund's investment objectives or policies that have not
been approved by the shareholders; (ii) no changes in the Fund's Articles or By-
laws; and (iii) no changes in the principal risk factors associated with
investment in the Fund. In addition, during the year there have been no changes
in the person who is primarily responsible for the day-to-day management of the
Fund's portfolio, who is Laura E. Luckyn-Malone, the President of the Fund.
Respectfully,
/s/ Laura E. Luckyn-Malone /s/ I. Peter Sedgwick
Laura E. Luckyn-Malone I. Peter Sedgwick
President Chairman
- --------------------------------------------------------------------------------
5
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION
WHY HAS THE FUND INCREASED ITS INVESTMENTS IN JAPAN RECENTLY?
Since early August the Fund's exposure to Japan has increased by
approximately 6%, through investment into such companies as Hirose Electric and
Nomura Securities Co., Ltd. In early August, there was concerted Central Bank
action globally to drive down the value of the yen, which had hit a high of
Y79.7 to US$1 on April 19, 1995. This coincided with depositors withdrawing
funds from a number of smaller Japanese financial institutions and deepening
concerns about Japan's deflationary pressures (which had largely been contained
within the real estate and stock markets) spilling over into the general price
level. The Central Bank action has been largely successful as at the time of
writing the yen/dollar exchange rate had depreciated by approximately 25% to
102. The weakening of the exchange rate is important to the exporting sector of
the Japanese economy and allows Japan's leading corporations an opportunity to
reappraise their hiring and investment plans and a chance to regain some lost
sales in overseas markets. Consequently these companies can play an important
role in restarting the stalled Japanese economy. This action was followed
through with a cut in the Official Discount Rate to a record low 0.5% and the
announcement of a large fiscal stimulus in September. Taken together these allow
management of your Fund to take a more constructive view again of the Japanese
market.
WHY DOES THE FUND INVEST IN SO FEW CHINESE COMPANIES?
Management of your Fund has taken a very conservative approach to direct
investment in China. Against an economic backdrop of tight credit conditions as
the Chinese government continues its fight against inflationary pressures and
attempts to slow down the rate of economic activity, there have been few
companies that have emerged unscathed. Access to debt financing through the
banking sector is limited; access to global capital through the Chinese "B"
share markets in Shenzhen and Shanghai even more so as those markets have fallen
by 31.8% and 12.9%, respectively year to date. More recently, the "H" share
index (Chinese former state owned enterprises listed in Hong Kong) has fallen to
a historical low of 690.8 compared with a level of 1067.96 at January 1, 1995.
These market declines reflect international investors' concerns about the
quality of the underlying businesses, their management and accounting practices
and level of disclosure. Coupled with this is uncertainty about the consistency
of Chinese government policy toward the quoted sector at a time when politicians
are jostling to assume the mantle of Deng Xiaoping. Consequently our focus on
China is predominantly through companies operating out of Hong Kong, which have
a transparent and controlled strategy with respect to their business opportunity
on the mainland and understand that a stock market listing incorporates a
requirement of accountability to shareholders.
INVESTMENT IN RETURNS IN ASIA HAVE BEEN DISAPPOINTING THIS YEAR. SHOULD I STILL
INCLUDE ASIA AS PART OF MY OVERALL INVESTMENT PROGRAM?
Over the fiscal year of the Fund, the MSCI Pacific Index returned -11.2% and
the MSCI Pacific ex-Japan Index -2.4% compared with the S&P 500 which rose by
26.4% This, however, is not surprising as world stock markets are not closely
correlated; in other words, they rarely move in lock step together. In fact, one
of the reasons to invest overseas is in order to benefit from diversification
into markets that may rise when the US market falls and vice versa. By spreading
your investment across a number of markets, the volatility of your overall
investment program can be reduced.
Clearly the Asian region has been impacted by the reduction in global
capital flows triggered initially by Federal Reserve Bank tightening in early
1994 and subsequently by the Mexican crisis in late 1994. Moreover, while
inflationary pressures have remained subdued in the US, creating a benign
environment for equity investment, inflationary trends in Asia (excluding Japan)
have been upwards and therefore have exerted pressure on local interest rates as
governments have pro-actively sought to cool down their fast growing economies.
In this environment, however, the profits growth of the quality companies in
which we invest has continued at a high pace and has generally exceeded local
expectations. Consequently stock ratings are low for the secular growth rates we
are witnessing. While no one knows when the US market will begin to underperform
relative to international markets, establishing or maintaining a position in the
part of the world that shares the dynamism of the US in terms of being able to
incorporate new ideas and technologies, has highly competitive wage rates and
education levels and governments committed to non-inflationary growth policies,
should be part of a prudent global investment strategy.
- --------------------------------------------------------------------------------
6
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
PORTFOLIO CHARACTERISTICS AS OF OCTOBER 31, 1995
INVESTMENT BY INDUSTRY
Industry % of Net Assets
- -------------------------------------------------------------------------
Services 19.5%
Capital Equipment 16.1
Real Estate 14.1
Banking 12.7
Consumer Non-Durables 11.6
Multi-Industry 6.0
Construction 4.4
Materials 4.0
Consumer Durables 2.6
Energy 2.2
Insurance 2.2
Merchandising 1.8
Cash 2.8
- -------------------------------------------------------------------------
Total 100.0%
TOP TEN HOLDINGS
Security % of Net Assets
- -------------------------------------------------------------------------
Citic Pacific Ltd (HK) 3.7
Hutchison Whampoa (HK) 3.5
Glory Ltd. (Jpn) 3.2
Samsung Electronics (Kor) 3.0
Cathay Pacific Airways (HK) 2.9
Sun Hung Kai Properties Ltd. (HK) 2.8
Tata Engineering & Locomotive Co., Ltd. (India) 2.6
Mabuchi Motors Co., Ltd. (Jpn) 2.6
Genting Berhad (Mal) 2.5
Swire Pacific Ltd. (HK) 2.3
- -------------------------------------------------------------------------
Total 29.1%
COUNTRY WEIGHTINGS
Country % of Net Assets
- -------------------------------------------------------------------------
Hong Kong & China 22.8
Japan 16.6
Malaysia 12.5
Singapore 9.3
Thailand 8.8
Indonesia 8.3
Korea 7.7
India 6.1
Philippines 5.1
Cash 2.8
- -------------------------------------------------------------------------
Total 100.0%
- -------------------------------------------------------------------------
7
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS - 96.6%
SHARES VALUE US$
--------- -----------
<C> <S> <C>
CHINA - 1.9%
Services - 0.5%
2,832,000 Chiwan Wharf Holdings
Ltd. 'B' 1,263,795
-----------
Utilities -Electrical &
Gas - 1.4%
220,000 Huaneng Power
International, Ltd. (a)* 3,492,500
-----------
TOTAL CHINA
(COST $5,391,276) 4,756,295
-----------
HONG KONG - 20.9%
Chemicals - 0.7%
3,160,000 Chen Hsong Holdings Ltd. 1,839,348
-----------
Construction &
Housing - 1.4%
4,522,000 Kumagai Gumi Ltd. 3,421,770
-----------
Holding Company - 1.7%
7,000,000 Guangdong Investments 4,119,778
-----------
Leisure & Travel - 3.5%
4,835,000 Cathay Pacific Airways 7,129,608
2,000,000 Shun Tak Holdings Ltd. 1,578,062
-----------
8,707,670
-----------
Multi-Industry - 6.0%
2,934,000 Citic Pacific Ltd. 9,165,192
750,000 Swire Pacific Ltd. 'A' 5,626,698
-----------
14,791,890
-----------
Real Estate - 4.0%
2,675,000 Harbour Centre
Development Ltd. 2,992,983
874,000 Sun Hung Kai Properties
Ltd. 6,980,921
-----------
9,973,904
-----------
Services - 3.6%
1,592,000 Hutchison Whampoa 8,772,371
-----------
TOTAL HONG KONG
(COST $46,747,444) 51,626,731
-----------
INDIA - 6.1%
Automobile - 1.8%
168,000 Bajaj Auto Ltd. (b)* 4,515,000
-----------
Health & Personal Care - 1.1%
122,000 Ranbaxy Laboratories (c) 2,775,500
-----------
Household
Products - 0.6%
70,000 Hindustan Lever Ltd. 1,305,572
-----------
Machinery &
Engineering - 2.6%
207,200 Tata Engineering &
Locomotive
Company Ltd. 2,521,642
191,000 Tata Engineering &
Locomotive
Company Ltd. (b) 3,961,340
-----------
6,482,982
-----------
TOTAL INDIA
(COST $14,242,545) 15,079,054
-----------
<CAPTION>
COMMON STOCKS
SHARES VALUE US$
--------- -----------
<C> <S> <C>
INDONESIA - 8.3%
Beverages &
Tobacco - 2.1%
600,000 P.T. Gudang Garam 5,220,264
-----------
Building Materials &
Components - 1.2%
784,000 P.T. Indocement Tunggal 2,901,145
-----------
Food & Household
Products - 2.9%
82,500 P.T. Unilever Indonesia 1,162,996
1,061,950 P.T. Indofood Sukses
Makmur 4,912,104
230,000 P.T. Sorini* 1,281,718
-----------
7,356,818
-----------
Health & Personal
Care - 0.5%
360,000 P.T. Kalbe Farma 1,141,850
-----------
Real Estate - 0.5%
450,000 P.T. Jaya Real Property 1,283,590
-----------
Telecommunications - 1.1%
82,000 P.T. Indonesian
Satellite Corp. (a) 2,706,000
-----------
TOTAL INDONESIA
(COST $20,015,391) 20,609,667
-----------
JAPAN - 16.0%
Financial
Services - 1.9%
261,000 Nomura Securities Co.,
Ltd.* 4,785,000
-----------
Health & Personal
Care - 0.7%
120,000 Torii & Co., Ltd 1,823,529
-----------
Industrial
Components - 7.2%
225,000 Glory Ltd. 7,919,118
104,000 Mabuchi Motors Co., Ltd. 6,311,373
56,700 Hirose Electric 3,629,912
-----------
17,860,403
-----------
Insurance - 1.0%
450,000 Koa Fire & Marine Ins.
Co., Ltd. 2,466,176
-----------
Leisure & Tourism - 0.4%
102,000 Airport Facilities Co.,
Ltd. 990,000
-----------
Machinery &
Engineering - 1.2%
482,000 Amada Sonoike Co., Ltd. 2,958,157
-----------
Merchandising - 1.2%
172,900 Kahma Co., Ltd. 2,915,569
-----------
Real Estate - 0.9%
150,000 Mitsui Homes Co., Ltd. 2,132,353
-----------
Telecommunications - ]1.5%
450 DDI Corporation 3,657,352
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
8
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
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SCHEDULE OF INVESTMENTS (CONTINUED)
OCTOBER 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS
SHARES VALUE US$
--------- -----------
<C> <S> <C>
JAPAN (CONCLUDED)
TOTAL JAPAN
(COST $43,132,501) 39,588,539
-----------
KOREA - 7.7%
Banking - 1.0%
96,000 Shinhan Bank(1) 2,269,946
8,079 Shinhan Bank (New)* 166,839
-----------
2,436,785
-----------
Electronics - 3.0%
27,338 Samsung Electronics(1) 6,092,897
5,095 Samsung Electronics
(New)*(1) 1,122,085
478 Samsung Electronics (New
2)*(1) 103,085
-----------
7,318,067
-----------
Metals-Steel - 0.7%
8,000 Pohang Iron & Steel Co.,
Ltd.(1) 804,318
40,000 Pohang Iron & Steel Co.,
Ltd. (d) 1,040,000
-----------
1,844,318
-----------
Telecommunications - 1.7%
4,450 Korea Mobile
Telecommunications
Corp.*(1) 4,157,734
-----------
Utilities-Electrical &
Gas - 1.3%
77,000 Korea Electric Power
Corp.(1) 3,376,235
-----------
TOTAL KOREA
(COST $17,056,270) 19,133,139
-----------
MALAYSIA - 12.5%
Banking - 3.3%
1,265,000 DCB Holdings Berhad 3,584,416
584,000 Malayan Banking Berhad 4,711,531
-----------
8,295,947
-----------
Construction - 2.0%
3,171,000 Renong Berhad 4,841,983
-----------
Distribution - 0.8%
246,000 Edaran Otomobil Nasional
Berhad 1,936,246
-----------
Food & Household
Products - 0.7%
236,000 Nestle (Malaysia) Berhad 1,662,495
-----------
Insurance - 1.2%
741,000 Malaysian Assurance
Alliance Berhad 3,003,660
-----------
Leisure & Tourism - 2.5%
741,500 Genting Berhad (1) 6,262,917
-----------
Real Estate - 2.0%
2,069,000 Island & Peninsular
Berhad 5,007,615
-----------
TOTAL MALAYSIA
(COST $28,782,473) 31,010,863
-----------
<CAPTION>
COMMON STOCKS
SHARES VALUE US$
--------- -----------
<C> <S> <C>
PHILIPPINES - 5.1%
Beverages &
Tobacco - 0.7%
560,600 San Miguel Corp. 'B' 1,855,720
-----------
Real Estate - 2.4%
2,381,250 Ayala Land, Inc. 'B' 2,749,711
2,600,000 C&P Homes Inc.* 1,676,522
5,200,000 SM Prime Holdings Inc.* 1,401,078
-----------
5,827,311
-----------
Ship Repair - 0.0%
111,850 Keppel Philippine
Holdings 'B' * 51,663
-----------
Telecommunications - 1.0%
43,170 Philippine Long Distance
Telephone 2,409,411
-----------
Utilities -Electrical &
Gas - 1.0%
333,500 Manila Electric Co. 'B' 2,490,339
-----------
TOTAL PHILIPPINES
(COST $12,714,244) 12,634,444
-----------
SINGAPORE - 9.3%
Banking - 3.3%
740,000 Overseas Union Bank Ltd. 4,607,982
407,880 United Overseas Bank
Ltd. 3,578,907
-----------
8,186,889
-----------
Broadcasting &
Publishing - 1.6%
253,200 Singapore Press Holdings
Ltd. 3,959,609
-----------
Machinery &
Engineering - 2.0%
608,000 Keppel Corporation Ltd. 4,990,660
-----------
Real Estate - 2.4%
480,000 City Developments Ltd. 2,971,979
956,000 DBS Land Ltd. 2,827,682
-----------
5,799,661
-----------
TOTAL SINGAPORE
(COST $21,160,936) 22,936,819
-----------
THAILAND - 8.8%
Banking - 3.1%
3,500,000 Siam City Bank Ltd. 4,451,510
386,700 Thai Farmers Bank Ltd. 3,196,884
-----------
7,648,394
-----------
Building Materials &
Components - 1.9%
84,000 Siam Cement Co. Ltd. 4,580,604
-----------
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
9
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS (CONCLUDED)
OCTOBER 31, 1995
<TABLE>
<CAPTION>
COMMON STOCKS
SHARES VALUE US$
--------- -----------
<C> <S> <C>
THAILAND (CONCLUDED)
Real Estate - 1.4%
220,000 Land & House Corp. Ltd. 3,550,080
-----------
Telecommunications - 1.1%
919,000 TelecomAsia Corp.* 2,775,994
-----------
Utilities -Electrical &
Gas - 1.3%
913,000 Electricity Generating
Public Co., Ltd.* 3,120,747
-----------
TOTAL THAILAND
(COST $22,289,706) 21,675,819
-----------
TOTAL COMMON STOCKS
(COST $231,532,786) 239,051,370
-----------
<CAPTION>
CONVERTIBLE BONDS - 0.6%
PRINCIPAL
AMOUNT
(000) VALUES US$
--------- ------------
<C> <S> <C>
JAPAN - 0.6%
Merchandising - 0.6%
Swfr Arcland Sakamoto
1,900 .125% 2/20/98
(Cost $1,386,916) 1,496,162
------------
TOTAL CONVERTIBLE BONDS
(COST $1,386,916) 1,496,162
------------
Total Investments
(Cost $232,919,702)
97.2% 240,547,532
Other assets less
liabilities 2.8% 6,939,592
------------
Net Assets 100% 247,487,124
------------
------------
</TABLE>
* Non-income producing security
(a) American Depository Receipt
(b) Global Depositary Receipt
(c) Global Depositary Share
(d) American Depositary Share
(1) Priced at fair value as determined by the Board of Directors
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1995
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (cost
$232,919,702) $240,547,532
Cash 8,145,946
Receivable for dividends 140,159
Receivable for interest 57,649
Net unrealized appreciation on forward foreign
exchange contracts 233,732
Deferred organization expenses 107,623
Prepaid expenses 38,771
------------
Total Assets 249,271,412
------------
LIABILITIES:
Payable for securities purchased 1,286,803
Advisory fee payable 211,828
Administration fee payable 52,957
Accrued expenses payable and other liabilities 232,700
------------
Total Liabilities 1,784,288
------------
Net Assets $247,487,124
------------
------------
NET ASSETS WERE COMPOSED OF:
Capital Stock, par value ($.01 per share,
applicable to
19,607,100 shares issued: authorized 100,000,000
shares) $ 196,071
Paid-in capital in excess of par 271,484,870
Accumulated net realized losses from investments (32,064,584)
Net unrealized appreciation of investments 7,627,830
Net unrealized appreciation on translation of
assets and liabilities in foreign currencies and
forward foreign currency contracts 242,937
------------
Net Assets $247,487,124
------------
------------
Net asset value per share
($247,487,124 divided by 19,607,100
shares outstanding) $ 12.62
------------
------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of
$439,833) $ 3,697,277
Interest and discount earned 694,898
------------
Total Income 4,392,175
------------
EXPENSES:
Investment advisory fee 2,479,442
Administration fee 619,861
Custodian's fees and expenses 370,550
Legal fees and expenses 150,615
Transfer agent's fees and expenses 114,282
Directors' fees and expenses 84,074
Reports to shareholders 84,040
Insurance expense 82,632
Independent accountants' fees and expenses 40,335
Amortization of deferred organization expenses 33,981
Registration fees 24,260
Miscellaneous expenses 10,820
Interest expense 1,345
------------
Total Expenses 4,096,237
------------
NET INVESTMENT INCOME 295,938
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS:
Net realized loss from:
Investments (26,048,489)
Foreign currency transactions and forward
foreign currency contracts (3,181,314)
Net change in unrealized appreciation of:
Investments 2,267,623
Translation of assets and liabilities in
foreign currencies and forward foreign
currency contracts 2,734,038
------------
NET REALIZED AND UNREALIZED LOSS FROM INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS (24,228,142)
------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(23,932,204)
------------
------------
</TABLE>
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
12
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
FOR THE PERIOD
DECEMBER 30, 1993*
FOR THE YEAR ENDED TO OCTOBER 31,
OCTOBER 31, 1995 1994
- --------------------------------------------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS:
OPERATIONS:
Net investment income
(loss) $ 295,938 $ (211,874)
Net realized loss on
investment
transactions (26,048,489) (6,016,095)
Net realized loss from
foreign currency
transactions and
forward foreign
currency contracts (3,181,314) (188,277)
Net change in unrealized
appreciation on
investments 2,267,623 5,360,207
Net change in unrealized
appreciation
(depreciation) on
translation of assets
and liabilities in
foreign currencies and
forward foreign
currency contracts 2,734,038 (2,491,101)
-------------------- ------------------
NET DECREASE IN NET ASSETS
RESULTING FROM OPERATIONS (23,932,204) (3,547,140)
-------------------- ------------------
CAPITAL STOCK TRANSACTIONS:
Proceeds from the initial
public offering of
17,200,000 shares -- 242,520,000
Proceeds from the
issuance of 2,400,000
shares in connection
with exercising of an
overallotment option
granted to
underwriters of the
initial public
offering -- 33,840,000
Offering costs charged to
paid-in capital in
excess of par -- (1,493,642)
-------------------- ------------------
NET INCREASE IN NET ASSETS
DERIVED FROM CAPITAL STOCK
TRANSACTIONS -- 274,866,358
-------------------- ------------------
TOTAL INCREASE (DECREASE) IN
NET ASSETS (23,932,204) 271,319,218
NET ASSETS:
Beginning of period 271,419,328 100,110
-------------------- ------------------
End of period $247,487,124 $271,419,328
-------------------- ------------------
-------------------- ------------------
</TABLE>
* Commencement of investment operations
See accompanying notes to financial statements
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1995
1. SIGNIFICANT ACCOUNTING POLICIES:
Schroder Asian Growth Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, closed-end
management investment company. The Fund was incorporated in Maryland on
November 5, 1993 and investment operations commenced on December 30, 1993.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.
SECURITY VALUATION
Portfolio securities listed on a recognized stock exchange or NASDAQ
National Market System are valued at the last reported sales price on the
exchange on which the securities are principally traded. Other securities for
which market quotations are readily available are valued at the last sales
price prior to the time of determination. If there is no sales price on such
date, and if bid and asked quotations are available, such securities are
valued at the mean between the last current bid and asked prices. Securities
for which market quotations are not readily available, foreign securities
where local regulators restrict purchases by foreign investors and other
assets are valued by procedures as determined by the Investment Adviser and
approved in good faith by the Board of Directors. At October 31, 1995, the
portfolio contained eight securities for which market quotations were not
available and which were fair valued by the Adviser. These securities had a
total value of $24,189,217, representing 9.8% of the Fund's net assets.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are recorded on trade date. Dividend income is
recorded on the ex-dividend date except for certain dividends from foreign
securities which are recorded as soon as the Fund is informed of the ex-
dividend date. Interest income (including accretion of discount) is recorded
on the accrual basis. Realized gains and losses from security transactions
are determined on the identified cost basis.
FOREIGN CURRENCY TRANSLATION
Foreign currency amounts denominated in or expected to settle in foreign
currencies (FC) are translated into U.S. dollars on the following basis:
market value of investment securities and other assets and liabilities at the
rate of exchange at the end of the respective period, purchases and sales of
investment securities and income and expenses at the rate of exchange
prevailing on the respective dates of such transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss
from the investment.
Reported net realized foreign exchange gains or losses arise from sales
of portfolio securities, sales and maturities of short-term securities, sales
of FCs, currency gains or losses realized between the trade and settlement
dates on securities transactions, the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the Fund's
books, and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in
the value of assets and liabilities other than investments in securities at
fiscal year end, resulting from changes in the exchange rate.
DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions payable by the Fund, if any, are accrued on
the ex-dividend date. Dividends from net investment income and capital gain
distributions are determined in accordance with U.S. Federal income tax
regulations which may differ from generally accepted accounting principles.
At December 31, 1995, the Fund decreased paid-in-capital by $2,885,376,
decreased undistributed net investment income by $295,938 and increased
accumulated realized losses from foreign currency transactions by $3,181,314.
These differences are primarily due to the reclassification of realized
losses on foreign currency and forward foreign currency contracts to ordinary
income.
- --------------------------------------------------------------------------------
14
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FORWARD CONTRACTS
The Fund may enter into forward contracts to purchase or sell foreign
currencies to protect against the effect of possible adverse movements in
foreign exchange rates on the U.S. dollar value of the underlying portfolio.
Risks associated with such contracts include the movement in value of the
foreign currency relative to the U.S. dollar and the ability of the
counterparty to perform. Forward exchange contracts are valued at the forward
rate and are marked-to-market weekly. Fluctuations in the value of such
contracts are recorded as unrealized gains or losses; realized gains or
losses include net gains or losses on contracts which have terminated by
settlement.
ORGANIZATIONAL COSTS
Costs incurred by the Fund in connection with its organization and
initial registration are being amortized on a straight line basis over a
five-year period from the commencement of investment operations.
2. PURCHASES AND SALES OF SECURITIES:
The aggregate cost of securities purchased and the proceeds from sales
of securities, excluding short-term investments, for the year ended
October 31, 1995 were $167,028,062 and $158,464,792, respectively.
3. FORWARD EXCHANGE CONTRACTS AS OF OCTOBER 31, 1995:
<TABLE>
<CAPTION>
Contracts to Settlement In Exchange Unrealized appreciation
Deliver Date for Value ($) (depreciation) ($)
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
HEDGE POSITIONS:
Japanese Yen Y1,200,000,000 12/21/95 $12,206,286 11,854,342 351,944
Japanese Yen Y1,430,000,000 3/22/96 $14,206,239 14,324,451 (118,212)
-----------
Total $ 233,732
-----------
-----------
</TABLE>
4. ADVISORY AND ADMINISTRATIVE FEES:
The Fund retains Schroder Capital Management International Inc. as
Investment Adviser. The investment advisory contract provides for a monthly
fee at the annual rate of 1% on the Fund's average weekly net assets. The
Fund paid or accrued fees to the Investment Adviser of $2,479,442 for the
year ended October 31, 1995.
The Fund retains Middlesex Administrators L.P. as the Administrator. For
its services, the Administrator receives a monthly fee equal to the greater
of $150,000 per annum or an annual rate of .25% of the Fund's average weekly
net assets. The Fund paid or accrued fees to the Administrator of $619,861
during the year ended October 31, 1995.
5. FEDERAL INCOME TAXES:
Since it is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its stockholders, no
Federal income tax provision is required. Under the applicable foreign tax
law, a withholding tax may be imposed on interest, dividends, and capital
gains at various rates.
For Federal income tax purposes, the tax basis of investment securities
owned at October 31, 1995 was $232,919,702. The aggregate gross unrealized
appreciation for all securities in which there was an excess of market value
over tax cost was $23,361,766 and aggregate gross unrealized depreciation for
all securities in which there was an excess of tax cost over market value was
$15,733,936.
For Federal income tax purposes, the Fund had a capital loss carry
forward as of October 31, 1995 of $32,064,584 ($6,016,095 expiring in 2002
and $26,048,489 expiring in 2003) which is available to offset future capital
gains, subject to limitations imposed under the Internal Revenue Code.
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. CAPITAL STOCK:
There are 100,000,000 shares of $.01 par value common stock
authorized. Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
For the year December 30, 1993*
ended to
October 31, 1995 October 31, 1994
---------------- ------------------
<S> <C> <C>
Shares outstanding at beginning of
period 19,607,100 --
Shares issued to the Adviser -- 7,100
Shares issued in initial public
offering -- 17,200,000
Shares issued in underwriters'
over-allotment option -- 2,400,000
---------------- ----------
Shares outstanding at end of
period............................ 19,607,100 19,607,100
---------------- ----------
---------------- ----------
</TABLE>
* Commencement of investment operations.
7. FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Selected Per Share Data and Ratios
For the Year
ended December 30,1993*
October 31, to
1995 October 31, 1994
- ----------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, beginning of period $ 13.84 $ 14.01**
Investment Operations:
Net investment income (loss) 0.02 (.01)
Net realized and unrealized loss on
investments and foreign currency
transactions (1.24) (.16)
--------------- ----------
Total from investment operations (1.22) (.17)
--------------- ----------
Net asset value, end of period $ 12.62 $ 13.84
--------------- ----------
--------------- ----------
Market value, end of period $ 11.125 $ 12.00
--------------- ----------
--------------- ----------
Total investment return based on (1):
Market Value -7.29% -20.00%
--------------- ----------
Net Asset Value -8.82% -1.21%
--------------- ----------
Ratio/Supplementary Data:
Net assets, fiscal year end (Millions) $ 247.49 $271.42
Ratio of expenses to average net assets 1.65% 1.59%***
Ratio of net investment income (loss)
average net assets 0.12% (0.10)%***
Portfolio turnover rate 66.79% 19.76%
</TABLE>
* Commencement of investment operations.
** Net of $.09 of offering expenses.
*** Annualized
(1) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of each
period reported. Dividends and distributions, if any, are assumed for the
purposes of this calculation, to be reinvested at prices obtained under the
Fund's dividend reinvestment plan. Total investment return does not reflect
sales loads or brokerage commissions. Generally, total investment return based
on net asset value will be higher than total investment return based on market
value in periods where there is an increase in the discount or decrease in the
premium of the market value to the net asset value from the beginning to the end
of such periods. Conversely, total investment return based on net asset value
will be lower than total investment return based on market value in periods
where there is a decrease in the discount or an increase in the premium of the
market value to the net asset value from the beginning to the end of such
periods.
- --------------------------------------------------------------------------------
16
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)
8. QUARTERLY DATA (UNAUDITED):
<TABLE>
<CAPTION>
NET REALIZED AND PRICE
UNREALIZED NET INCREASE ON THE
GAINS (LOSSES) ON (DECREASE) NEW
INVESTMENTS IN NET ASSETS YORK
TOTAL NET INVESTMENT AND FOREIGN CURRENCY RESULTING FROM STOCK
INCOME INCOME (LOSS) TRANSACTIONS OPERATIONS EXCHANGE
-------------------------------------------------------------------------------------------------------------
QUARTERLY PER PER PER PER
PERIOD AMOUNT SHARE AMOUNT SHARE AMOUNT SHARE AMOUNT SHARE HIGH
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
12/30/93* to
01/31/94 $365,127 $0.02 $1,916 - $(6,528,281) $(0.33) $(6,526,365) $(0.33) $16 1/8
- ------------------------------------------------------------------------------------------------------------------------------
02/01/94 to
04/30/94 1,019,686 0.05 (75,248) - (14,749,149) (0.75) (14,824,397) (0.75) 15 1/8
- ------------------------------------------------------------------------------------------------------------------------------
05/01/94 to
07/31/94 943,863 0.05 (161,721) ($0.01) 3,714,093 0.19 3,552,372 0.18 14 1/8
- ------------------------------------------------------------------------------------------------------------------------------
08/01/94 to
10/31/94 904,608 0.04 23,179 - 14,228,071 0.73 14,251,250 0.73 13 3/4
- ------------------------------------------------------------------------------------------------------------------------------
11/01/94 to
01/31/95 510,128 0.03 (518,073) (0.03) (43,861,236) (2.23) (44,379,309) (2.26) 12 1/8
- ------------------------------------------------------------------------------------------------------------------------------
02/01/95 to
04/30/95 1,263,061 0.06 291,404 0.02 7,583,199 0.38 7,874,603 0.40 10 7/8
- ------------------------------------------------------------------------------------------------------------------------------
05/01/95 to
07/31/95 1,591,359 0.08 534,445 0.03 (10,887,137) (0.56) (10,352,692) (0.53) 12 1/8
- ------------------------------------------------------------------------------------------------------------------------------
08/01/95 to
10/31/95 1,027,627 0.05 (11,838) 0.00 22,937,032 1.17 22,925,194 1.17 11 7/8
<CAPTION>
QUARTERLY
PERIOD LOW
<S> <C>
- -------------
12/30/93* to
01/31/94 $15
- -------------
02/01/94 to
04/30/94 10 1/2
- -------------
05/01/94 to
07/31/94 11 1/4
- -------------
08/01/94 to
10/31/94 11 1/2
- -------------
11/01/94 to
01/31/95 9 5/8
- -------------
02/01/95 to
04/30/95 9 3/8
- -------------
05/01/95 to
07/31/95 10 1/8
- -------------
08/01/95 to
10/31/95 10 5/8
</TABLE>
* Commencement of investment operations.
PROXY RESULTS (UNAUDITED)
During the year ended October 31, 1995, Schroder Asian Growth Fund,
Inc. shareholders voted on the following proposals. The proposals were
approved at the annual meeting of shareholders on May 11, 1995. The
description of the proposals and number of shares voted are as follows:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
Shares Voted
For Abstentions
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. To elect the Directors to the Fund: Peter E. Guernsey(1) 16,790,627 849,493
John I. Howell(2) 16,792,027 848,093
Laura E. Luckyn-Malone(3) 16,879,220 760,900
William L. Means(3) 16,838,338 801,782
David M. Salisbury(2) 16,887,646 752,474
I. Peter Sedgwick(1) 16,886,511 753,609
Madelon DeVoe Talley(3) 16,888,681 751,439
</TABLE>
(1) Nominee for Class I director to serve until 1996 annual meeting of
stockholders.
(2) Nominee for Class II director to serve until 1997 annual meeting of
stockholders.
(3) Nominee for Class III director to serve until 1998 annual meeting of
stockholders.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
Shares Voted Shares Voted
For Against Abstentions
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
2. To ratify the selection of Coopers & Lybrand L.L.P. as
the Fund's independent accountants. 16,983,359 325,743 331,018
3. To approve the Investment Advisory Agreement between
the Fund and the Investment Advisor. 16,205,455 742,817 691,848
</TABLE>
- --------------------------------------------------------------------------------
17
<PAGE>
- --------------------------------------------------------------------------------
SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN
Shareholders whose shares are registered in their own names may elect to be
participants in the Dividend Reinvestment Plan (the "Plan"), pursuant to which
dividends and capital gain distributions to shareholders will be paid in or
reinvested in additional shares of the Fund (the "Dividend Shares"). State
Street Bank and Trust Company (the "Plan Agent") will act as agent for
participants under the Plan. Shareholders whose shares are held in the name of a
brokerage firm, bank , or other nominee, should contact such nominee to see if
it will participate in the Plan on your behalf. If the nominee is unable to do
so, the shareholder may wish to request that the shares be reregistered in the
shareholder's own name.
A shareholder may elect to withdraw from the Plan without penalty at any
time upon written notice to the Plan Agent. When a participant withdraws from
the Plan, or upon termination of the Plan, certificates for whole Shares
credited to the shareholder's account under the Plan will be issued and cash
payment will be made for any fractional Shares credited to such account. An
election to withdraw from the Plan will, until such election is changed, be
deemed to be an election by a shareholder to take all subsequent dividends and
distributions in cash. Elections will be effective immediately if notice is
received by the Plan Agent not less than ten days prior to any dividend or
distribution record date; otherwise, such termination will be effective after
the investment of the then current dividend or distribution. If a withdrawing
shareholder requests the Plan Agent to sell the Shareholder's Shares upon
withdrawal from participation in the Plan, the withdrawing shareholder will be
required to pay a $2.50 fee plus brokerage commission.
Whenever the Fund declares a distribution from capital gains or an income
dividend, participants in the Plan will receive Shares of the Fund. Whenever the
market price per Share is equal to or exceeds the net asset value as of the
valuation date, participants will be issued Shares of the Fund at a price per
Share equal to the greater of (a) the net asset value per Share on that date or
(b) 95% of the market price of the Fund's Shares on that date. The valuation
date will be the dividend or distribution payment date or, if that date is not a
trading day on the New York Stock Exchange, the immediately preceding trading
day. The Fund will not issue Shares under the Plan at a price below net asset
value. If net asset value exceeds the market price of Fund Shares as of the
valuation date, or if the Fund should declare a dividend or 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' accounts on or shortly after the payment
date. If, before the Plan Agent has completed its purchase, the market price
exceeds the net asset value of a Fund Share, the average per Share purchase
price paid by the Plan Agent may exceed the net asset value of the Fund's
Shares, resulting in the acquisition of fewer Shares than if the dividend or
capital gains distribution had been paid in Shares issued by the Fund.
The Plan Agent maintains all shareholder accounts in the Plan and furnishes
written confirmation of all transactions in the accounts, including information
needed by shareholders for personal and tax records. Shares in the account of
each Plan participant will be held by the Plan Agent in noncertificated form in
the name of the participant, and each shareholder's proxy will include those
Shares purchased pursuant to the Plan.
There is no charge to participants for reinvesting dividends or capital
gains distributions. The Plan Agent's fee for the handling of reinvestment of
dividends and distributions will be paid by the Fund. There will be no brokerage
charges with respect to Shares issued directly by the Fund as a result of
dividends or capital gains distributions payable either in Shares or in cash.
However, each participant 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 dividends or capital gains distributions.
The automatic reinvestment of dividends and distributions will not relieve
participants of any U.S. Federal income tax that may be payable on such
dividends or distributions. To the extent dividends and distributions are
reinvested in additional Shares issued by the Fund, participants should be
treated for U.S. Federal income tax purposes as receiving a distribution in an
amount equal to the fair market value, determined as of the valuation date, of
the Shares received (regardless of the net asset value of the Shares on the
valuation date), and should have a cost basis in such Shares equal to such fair
market value.
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18
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
- --------------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN (CONCLUDED)
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to notice of the change
sent to participants in the Plan at least 90 days before the record date for
such dividend or distribution. The Plan may also be amended or terminated by the
Plan Agent by at least 90 days prior written notice to participants in the Plan.
All correspondence concerning the Plan should be directed to the Plan Agent at
State Street Bank and Trust Company, P.O. Box 8200, Boston, Massachusetts
02266-8200.
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19
<PAGE>
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SCHRODER ASIAN GROWTH FUND, INC.
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Report of Independent Accountants
To the Shareholders and Board of Directors of
Schroder Asian Growth Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of
Schroder Asian Growth Fund, Inc., including the schedule of investments, as of
October 31, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets and the financial highlights for
the year then ended and for the period December 30, 1993 (commencement of
operations) to October 31, 1994. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Schroder Asian Growth Fund, Inc. as of October 31, 1995, the results of its
operations for the year then ended, the changes in its net assets and financial
highlights for the year then ended and for the period December 30, 1993
(commencement of operations) to October 31, 1994, in conformity with generally
accepted accounting principles.
Coopers & Lybrand L.L.P.
New York, New York
December 15, 1995
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20
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DIRECTORS
Madelon DeVoe Talley
Peter E. Guernsey
John I. Howell
Laura E. Luckyn-Malone, President
William L. Means
David Salisbury
I. Peter Sedgwick, Chairman
OFFICERS
Laura E. Luckyn-Malone
President
Heather F. Crighton
Vice President
Catherine A. Mazza
Vice President
Mark J. Smith
Vice President
Margaret H. Douglas-Hamilton
Secretary
Robert Jackowitz
Treasurer
INVESTMENT ADVISER
Schroder Capital Management International Inc.
787 Seventh Avenue
New York, NY 10019
ADMINISTRATOR
Middlesex Administrators L.P.
P.O. Box 9081
Princeton, NJ 08543-9081
NYSE SYMBOL SHF
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
This report is sent to the shareholders of the Fund 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
-------------------------------------------
Schroder
Asian Growth Fund, Inc.
[PHOTOGRAPHS]
Annual Report
October 31, 1995
