<PAGE>
DELAWARE GROUP
Global Dividend
and Income Fund
(various photos. demonstrating service and guidance, professional
management and goals)
service and guidance
professional management
1996
Annual
Report
goals
DELAWARE
GROUP
========
<PAGE>
Investment
Objective and
Strategies
Delaware Group Global Dividend and Income Fund's objective is to provide high
current income, and secondarily, capital appreciation. To achieve this, the Fund
is diversified among different asset classes as described below. Asset class
concentration depends on the manager's assessment of each market's relative
risks and rewards.
U.S. Common Stocks with Above-Average Yields
The Fund's management focuses on stocks that are paying high dividends relative
to their share price. Such stocks may point the Fund to strong companies whose
stocks have capital appreciation potential. The income from these stocks has the
potential to add to total return.
Convertible Preferred Stocks and Bonds
The Fund invests in both convertible preferred stock and convertible bonds. Both
pay fixed rates of income, but because they can be converted into common stock,
they are indirectly tied to the common stock's performance. As a result,
convertible securities generally offer higher income than common stocks and an
opportunity for price appreciation when the value of the underlying security
rises. The Fund may buy convertibles when the underlying common stock offers
strong growth potential, but a low yield.
High-Yield
Corporate Bonds
High-yield bonds, those rated BB or lower, have greater default risk than bonds
with higher quality ratings, but provide a greater level of income that has
historically compensated many investors for the additional risk. Prices of
high-yield bonds may also be less sensitive to changes in interest rates than
higher-rated bonds.
Foreign Stocks
In evaluating foreign stocks, the Fund's management takes into account risks
that include a country's inflation outlook, economy, politics, different
accounting standards, tax policies and the effect of currency fluctuations. The
value of the company's projected dividend stream is "discounted" for these risks
so that management has a consistent yardstick to compare stocks around the
globe.
Foreign Bonds
The Fund invests in foreign government and corporate bonds whose total return
potential relative to currency, political and economic risk, appears attractive.
In order to reduce currency risk, the Fund may buy foreign bonds denominated in
U.S. dollars rather than the currency of the country issuing the bonds.
While the Fund primarily invests in bonds issued by countries with
established securities markets in Europe, the Pacific Rim and elsewhere, the
Fund may also invest in bonds in emerging markets where management believes the
income and capital appreciation potential justifies additional risks.
Leveraging
About $25 million of the Fund's net assets were leveraged as of November 30,
1996. Leverage is a tool that is not available to open-end mutual funds and one
that can be an important contributor to the Fund's income and capital
appreciation potential. Of course, there is no guarantee the Fund will achieve
this. Leveraging could result in a higher degree of volatility because the
Fund's net asset value could be more sensitive to fluctuations in short-term
interest rates and equity prices. We believe this risk is reasonable given the
potential benefits.
A TRADITION OF SOUND INVESTING
(photo of glasses, pen and keyboard)
<PAGE>
- --------------------------------------------------------------------------------
December 10, 1996
Dear Shareholder:
Fiscal 1996 was a rewarding and successful year.
Global Dividend and Income Fund provided high income, capitalized on the U.S.
stock market's surprisingly strong performance and found attractive
opportunities in foreign stocks and bonds.
For the 12 months ended November 30, 1996, your Fund achieved an impressive
+27.42% total return based on market price with dividends reinvested. Your
Fund's net asset value rose +24.10% during the period with dividends reinvested.
Global Dividend and Income Fund's total return based on market price
virtually matched the total return of the unmanaged Standard & Poor's 500 Index
in fiscal 1996, a remarkable accomplishment given the fact that:
a) only 40.3% of the Fund's portfolio was invested in
U.S. stocks; and
b) the U.S. bond market languished for much of the year.
Your Fund's progress since November 1995 is attributable to excellent
worldwide stock and bond selection, our prudent use of leverage and our
strategic positioning in U.S. high-yield corporate bonds, which were less
sensitive to rising domestic interest rates than many other fixed-income
securities.
(PHOTO OF GLOBES)
<TABLE>
<CAPTION>
Total Return
- ------------------------------------------------------------------------------------------------
(December 1, 1995 _ November 30, 1996)
Based On Based On Premium/
Net Asset Value Market Price Discount+
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Dividend and Income Fund +24.10% +27.42% +0.41%
(NYSE Symbol: DGF)
Standard & Poor's 500 Index +27.86%
Merrill Lynch High-Yield Bond Index +11.99%
Morgan Stanley Europe Australia
and South East Asia (EASEA) Index +23.40%
Salomon Brothers World
Government Bond Index +5.73%
Lipper Closed-End Income Fund Average +12.72% +14.28% -3.23%
- ------------------------------------------------------------------------------------------------
</TABLE>
+ As of November 30, 1996. All performance shown assumes dividend
reinvestment. Each index is unmanaged. There are 11 closed-end funds in the
Lipper Closed-End Income Fund Average.
1996 annual report
1
<PAGE>
We are pleased that the steps we have taken to increase shareholder value
have been recognized by investors. While most closed-end mutual funds traded at
a discount to net asset value as of November 30, Global Dividend and Income Fund
traded at a +0.41% premium.
Over time, dividends have been a more reliable component of total returns
from stocks while income has been the primary source of return from bonds. When
stock or bond prices move down, dividends and bond income can help cushion a
fall.
Global Dividend and Income Fund is designed to provide high current income,
and as of November 30, 1996, your Fund's yield based on market price was 9.45%,
the highest of any fund in its peer group. In our opinion, your Fund also offers
attractive long-term total return potential for investors who decide to reinvest
dividends and thus benefit from compounding. It is gratifying to know that even
though capital appreciation is not the Fund's primary objective, we kept pace
with the 1996 bull market, a period when stock prices rallied sharply.
We are delighted to report that Global Dividend and Income Fund ranked #1 in
total return among closed-end income funds tracked by Lipper Analytical Services
for both the 1996 fiscal year and the Fund's lifetime.
On the pages that follow, your Fund's portfolio managers review U.S. and
global market conditions and provide an outlook for fiscal 1997. We wish to
thank you for your confidence in Delaware Group.
Sincerely,
/s/ Wayne A. Stork
- --------------------------------
Wayne A. Stork
Chairman, President and Chief Executive Officer
discipline
Average Annual Total Return
- --------------------------------------------------------------------------------
(Based on Net Asset Value for Periods Ended November 30, 1996)
One Year Lifetime*
- --------------------------------------------------------------------------------
Global Dividend and Income Fund +24.10% +14.82%
- --------------------------------------------------------------------------------
Lipper Closed-End Income Fund Average +12.72% +12.30%
DGF Rank #1 #1
Number of funds in category 11 11
- --------------------------------------------------------------------------------
* Fund's inception date was March 4, 1994. All performance assumes dividends
reinvested. Past performance does not guarantee future results.
2
1996 annual report
<PAGE>
Portfolio Managers' Review
During the past year your
Fund provided superior results
that nearly matched our strong performance in 1995. This was not an easy year to
be a global investor, but we showed we were more than up to the task. Our
effective asset allocation strategy made a good year a great one even though
U.S. bond prices finished the year modestly
=============================================================================
Asset Allocation
Percent of Portfolio November 30, 1996
Common Stocks 59.2%
Convertible Preferred Stocks 7.7%
Non-Convertible U.S. Corporate Bonds 25.1%
Convertible U.S. Bonds 5.3%
Cash Equivalents 1.1%
Foreign Bonds 23.1%
The above figures add up to more than 100% because the portfolio is leveraged.
The Fund had stock options equal to (0.2%) of the portfolio as of November 30,
1996.
=============================================================================
lower than a year earlier, Japan's economy remained weak and several European
countries were grappling with the problems of monetary union.
Our Stock Focus:
Global Diversity and Credit-Sensitive U.S. Stocks Using our global,
dividend-oriented investment discipline, we found attractive values this past
year in telecommunications and utility stocks in Canada, the Philippines, New
Zealand, the United Kingdom, Belgium and Spain.
Generally, we believe these industries have better growth prospects overseas
than in the U.S. Domestically we held shares in some companies such as NYNEX
CORP. that offered above-average dividend yields and the possibility of earnings
improvement as result of consolidation, merger or restructuring.
Lower interest rates abroad helped boost prices of many of our non-U.S.
holdings, which also included industrial conglomerates such as SIEMENS AG and
JARDINE MATHESON HOLDINGS LTD.
In the U.S., the stocks of Real Estate Investment Trusts (REITs) such as
RECKSON ASSOCIATES contributed significantly to your Fund's overall performance.
The REIT market provided a total return of +29.64%, as measured by the unmanaged
Morgan Stanley REIT Index.
We believe this sector's out-performance was the result of higher rents,
improved cash flow and higher occupancy levels in the U.S. commercial real
estate market. We continue to be optimistic about the total return potential of
our REIT holdings in the coming months, in part because the REIT sector appears
to have attracted increased
1996 annual report
3
<PAGE>
==============================================================================
Geographic Diversification
Percent of Portfolio November 30, 1996
Africa and Latin America 3.3%
Australia/New Zealand 8.2%
United Kingdom 9.7%
Asian Pacific Rim 2.5%
Spain 5.9%
Canada 3.4%
Other Europe 13.4%
United States 53.6%
Chart reflects securities' country of origin. Table on page 18 reflects
the currency in which te security is denominated
==============================================================================
interest on the part of some pension fund investors.
Our bank stock selections also did well both in the U.S. and abroad.
KEYCORP, a regional bank based in Ohio that announced a major restructuring to
cut costs, was our largest common stock holding. Overall, credit-sensitive
stocks made up 26.3% of your Fund's portfolio.
In fiscal 1996, two areas of disappointment for the Fund in the U.S. stock
market were telephone and electric utility stocks. Both industries face
uncertain earnings prospects, and we reduced our position in these sectors.
Domestic High-Yield Bonds Outperformed Other
U.S. Bonds
During the first half of 1996, the prospect of higher U.S. economic growth had a
negative effect on the bond market since it raised concern that the Federal
Reserve Board would tighten credit to fight anticipated inflation.
Nevertheless, the high-yield bond market performed well compared to other
fixed-income securities, in part because a healthy economy suggested that
corporations issuing high-yield bonds would have a strong ability to meet
obligations to bondholders.
In the second half, U.S. economic growth moderated enough to convince
investors that inflation was tame but not enough to adversely affect the overall
credit quality of the high-yield market.
Your Fund balanced opportunities for high current income while taking a
relatively conservative approach to potential default risk. We focused on bonds
rated BB and B, the highest non-investment grade ratings. Our performance was
helped by the fact that prior to the start of the current fiscal year, we
slightly reduced average maturity and duration, reducing the Fund's sensitivity
to changes in interest rates.
As of November 30, your Fund's high-yield component had an average effective
maturity of 6.4 years and an effective duration of 4.1 years. Duration indicates
the approximate percentage of change in a bond's price given a 1% change in
interest rates.
We believe U.S. economic growth could slow further in 1997, and we expect to
position the Fund to emphasize higher quality BB bonds.
Strategy
1996 annual report
4
<PAGE>
Convertibles Provided Income and Growth
Convertible securities provided regular dividend income and generally allowed us
to participate in the capital appreciation of "growth"-oriented stocks. The
first half of 1996 was generally a period when small stocks and low dividend
yielding stocks tended to outperform stocks of large companies that pay high
dividends. During the second half, the market tended to favor large
capitalization "growth" companies. Owning convertible securities helped your
Fund participate in the capital appreciation potential of both small and large
company stocks that may have low dividend yields.
At year's end, convertible securities represented 13.2% of your Fund's
portfolio, down from 18% of the portfolio at the close of fiscal 1995.
Generally, we believe that the convertible market is fairly valued.
An example of a convertible preferred stock we owned was RJR NABISCO, the
global food and tobacco company. As of this writing, we believed the company's
preferred stock offered superior income potential and that the company's common
stock was undervalued.
Overall, the convertibles market significantly underperformed the S&P 500
Index in 1996. The total return of the unmanaged Merrill Lynch Convertibles
Index was +16.35% for the 12 months ended November 30.
Stock Options
To help mitigate the effect of short-term interest rate changes on our stock
selections, the Fund may write covered call options. That is, the Fund may agree
to sell a stock we already own at a specified price exercisable at a future
date. The sale of a covered call option is a strategy used when we think a
stock's price may drop. Selling a covered call option can help reduce loss of
principal, if the underlying stock's price declines. When the Fund sells a call,
it does so for a premium from the purchase price. This also provides additional
income for the Fund.
This strategy can limit the Fund's ability to benefit from capital
appreciation if a stock's price rises. However, we believe having some "downside
protection" _ especially in a volatile interest rate environment _ is worth
giving up some growth potential.
IN THE SECOND HALF OF 1996, U.S. ECONOMIC GROWTH MODERATED ENOUGH TO CONVINCE
INVESTORS THAT INFLATION WAS TAME BUT NOT ENOUGH TO ADVERSELY AFFECT THE OVERALL
CREDIT QUALITY OF THE HIGH-YIELD BOND MARKET.
Foreign Government
Bonds Outperformed
U.S. Treasuries
When we invest in overseas bonds, your Fund strives to obtain a rate of return
that is meaningfully greater than the rate of inflation in the U.S.
1996 annual report
5
<PAGE>
===============================================================================
We Search the World for High Income Potential
Italian South African Spanish U.S. Treasury
Government Government Government Government
Bonds Bonds Bonds Bonds
3 mo. 7.00% 17.47% 6.21% 5.13%
6 mo. 6.79% 16.85% 6.05% 5.24%
1 yr. 6.64% 16.29% 5.95% 5.36%
2 yr. 6.74% 15.87% 5.98% 5.59%
5 yr. 6.85% 15.78% 6.18% 5.83%
10 yr. 7.56% 16.05% 7.01% 6.05%
30 yr. 8.09% 6.35%
Yield/Maturity
SOUTH AFRICAN, SPANISH AND ITALIAN GOVERNMENT BONDS EACH PROVIDED
HIGHER YEILDS IN U.S. DOLLARS FOR U.S. INVESTORS AS OF NOVEMBER 30, 1996.
Source: Bloomberg Business News
The above illustration is not intended to represent the yield of Global Dividend
and Income Fund. Past performance does not guarantee future results. Unlike U.S.
Treasuries, foreign bonds have currency, political and economic risks and are
not guaranteed by the U.S. government. South Africa and Spain do not offer
30-year government bonds.
===============================================================================
We also seek to preserve capital in times of market weakness.
During the year we emphasized markets where we believed governments were
making progress in reforming their countries' fiscal policies, such as Spain
and Italy. We also had a preference for "dollar-zone" markets, that is
countries such as Canada, Australia and New Zealand whose currencies tend to be
linked to the U.S. dollar.
We believed that the Japanese bond market was fundamentally overvalued. We
avoided it in 1996 and expect to do so again in 1997. We believe Japan's easy
money policy reflects a weakness of the financial system that could continue to
negatively affect the value of fixed-income securities there.
By buying U.S. dollar denominated bonds in emerging markets, we believe we can
participate in the income potential of securities in Eastern Europe and other
areas while reducing the additional risks associated with emerging market
currencies. As of November 30, 1996, about 7.3% of your Fund's portfolio was
invested in securities in emerging market countries. Our largest emerging market
holdings were South African government bonds.
BY BUYING U.S. DOLLAR DENOMINATED BONDS IN EMERGING MARKETS, WE BELIEVE WE CAN
PRUDENTLY PARTICIPATE IN THE INCOME POTENTIAL OF COUNTRIES SUCH AS SOUTH AFRICA
AND POLAND.
1996 annual report
6
<PAGE>
(photo of keyboard)
Our Managed
Distribution Policy
In 1995, the Fund implemented a managed distribution policy effective with the
payment of the Fund's December dividend. Under the policy, the Fund is managed
with a goal of generating as much of the dividend as possible from ordinary
income (net investment income and short-term capital gains). The balance of the
dividend then comes from long-term capital gains and, if necessary, a return of
capital. No return of capital was necessary during fiscal 1996.
We believe the Fund's managed distribution policy will help us in 1997 by
increasing the attractiveness of the Fund for income-oriented investors.
outlook
Investment Outlook
In common stocks, your Fund remains focused on a mix of industries similar to
what we favored in fiscal 1995, although we have reduced our weighting in
domestic electric and telephone utilities because of the fundamental
uncertainties generated by industry deregulation and increased competition.
Even though bank stocks have done well for two years in a row, we believe the
financial sector in the U.S. and abroad still offers attractive pockets of
opportunity for income and total return. We may add to our position in selected
banks that we believe are well-positioned to benefit from falling interest
rates.
While your Fund's asset mix is subject to change as market conditions
warrant, we anticipate that our "value"-oriented selection process will lead us
toward a somewhat greater allocation to foreign securities in the months ahead.
BERNARD P. SCHAFFER
Vice President
and Senior Portfolio Manager
U.S. Equities
PAUL A. MATLACK
Vice President
and Senior Portfolio Manager
U.S. Fixed-Income
CLIVE A. GILLMORE
Director/
Senior Portfolio Manager
Foreign Equities
IAN G. SIMS
Director/
Senior Portfolio Manager
Foreign Fixed-Income
December 10, 1996
1996 annual report
7
<PAGE>
Fund Performance
A $10,000 investment in
Global Dividend and Income Fund when the Fund began operating on March 4, 1994,
would have grown to $14,615 as of November 30, 1996, based on market prices.
Lifetime Performance
Global Dividend and Income Fund
Total Market Price Return, March 4, 1994, to November 30, 1996
With Reinvestment of Distributions
- -----------------------------------------------------------------------
Apr. '94 $ 9,831 Aug. '95 $11,380
May '94 $ 9,814 Sep. '95 $11,678
Jun. '94 $ 9,785 Oct. '95 $11,646
Jul. '94 $ 9,884 Nov. '95 $11,777
Aug. '94 $10,086 Dec. '95 $12,127
Sep. '94 $10,029 Jan. '96 $12,394
Oct. '94 $10,087 Feb. '96 $12,448
Nov. '94 $ 9,889 Mar. '96 $12,491
Dec. '94 $ 9,854 Apr. '96 $12,585
Jan. '95 $10,000 May '96 $12,802
Feb. '95 $10,277 Jun. '96 $12,924
Mar. '95 $10,448 Jul. '96 $12,781
Apr. '95 $10,588 Aug. '96 $13,173
May. '95 $10,888 Sep. '96 $13,524
Jun. '95 $11,040 Oct. '96 $13,905
Jul. '95 $11,330 Nov. '96 $14,615
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DIVIDEND REINVESTMENT WOULD HAVE MADE A SUBSTANTIAL DIFFERENCE IN YOUR FUND'S
TOTAL RETURN DURING THE PAST TWO AND A HALF YEARS, ILLUSTRATING THE VALUE OF
COMPOUNDING.
Past performance does not guarantee future results. DGF shares were initially
offered with a sales charge of 6%. Performance since inception does not include
this or any brokerage commissions for purchases made since inception.
===============================================================================
- --------------------------------------------------------------------------------
Global Dividend and Income Fund offers an automatic dividend reinvestment
program. If you would like to reinvest dividends and shares are registered in
your name, contact Investors Fiduciary Trust Co. at 1.800.596.8396. You will be
asked to put your request in writing. If you have shares registered in "street"
name, contact the broker/dealer holding the shares or your financial adviser.
- --------------------------------------------------------------------------------
About Our Share Buyback Program
In 1994, Global Dividend and Income Fund's board of directors authorized a share
repurchase program that authorizes the Fund's lead manager to purchase up to 10%
of the Fund's outstanding shares on the floor of the New York Stock Exchange.
During 1996, the Fund did not utilize this option because, given the Fund's
market price, we believed there were more effective ways of enhancing
shareholder value.
1996 annual report
8
<PAGE>
Financial Statements
Delaware Group Global Dividend and Income Fund, Inc.
Statement of Net Assets/November 30, 1996
- --------------------------------------------------------------------------------
Number Market
of Shares Value
- --------------------------------------------------------------------------------
COMMON STOCK - 59.19%
Automobiles & Auto Equipment - 1.26%
GKN ............................................. 51,000 $ 958,930
Turner & Newell ................................. 116,000 368,389
-----------
1,327,319
-----------
Banking, Finance & Insurance - 12.98%
AmSouth Bancorporation .......................... 19,000 947,625
*Chase Manhattan ................................. 12,000 1,134,000
Cho Hung Bank Co Ltd - GDR ...................... 42,590 357,756
Commonwealth Instalment Receipt Trustee ......... 52,000 328,633
CoreStates Financial ............................ 10,000 538,750
First Chicago NBD ............................... 20,000 1,175,000
First Union ..................................... 7,600 580,450
Fleet Financial Group ........................... 12,300 681,112
*Great Western Financial ......................... 44,000 1,369,500
ING Groep NV .................................... 16,000 560,370
IPC Holdings .................................... 30,000 682,500
KeyCorp ......................................... 35,000 1,833,125
Mellon Bank ..................................... 15,000 1,083,750
National Australia Bank ......................... 88,000 1,096,528
National Mutual Holdings ........................ 35,000 49,313
PT Bank Dagang Nasional ......................... 427,750 424,102
Summit Bancorporation ........................... 18,000 807,750
-----------
13,650,264
-----------
Building & Materials - 0.44%
Compagnie de Saint-Gobain ....................... 3,200 460,150
-----------
460,150
-----------
Cable, Media & Publishing - 0.84%
Elsevier NV ..................................... 29,500 502,907
Societe Television Francaise 1 .................. 3,900 384,576
-----------
887,483
-----------
Chemicals - 0.79%
Bayer AG ........................................ 20,750 834,262
-----------
834,262
-----------
Computers & Technology - 0.28%
BICC Group (The) ............................... 62,000 293,263
-----------
293,263
-----------
Electronics - 1.01%
AMP ............................................. 14,200 543,150
Siemens AG ...................................... 10,750 518,930
-----------
1,062,080
-----------
------------------
Top 10 common stock holdings, representing 12.70% of net assets, are printed in
blue.
<PAGE>
- --------------------------------------------------------------------------------
Number Market
of Shares Value
- --------------------------------------------------------------------------------
COMMON STOCK - (Continued)
Energy - 3.26%
Elf Gabon SA ..................................... 2,200 $ 516,023
El Paso Natural Gas .............................. 15,000 750,000
Royal Dutch Petroleum ............................ 4,050 682,917
RWE AG ........................................... 11,000 486,271
Texaco ........................................... 10,000 991,250
----------
3,426,461
----------
Food, Beverage & Tobacco - 2.32%
Philip Morris Companies .......................... 10,000 1,031,250
Southcorp Holdings ............................... 255,000 839,010
Unigate .......................................... 77,000 564,757
----------
2,435,017
----------
Healthcare & Pharmaceuticals - 1.02%
Baxter International ............................. 10,000 425,000
Glaxo Wellcome ................................... 39,370 647,311
----------
1,072,311
----------
Leisure, Lodging & Entertainment - 0.68%
Bass ............................................. 54,000 710,918
----------
710,918
----------
Metals & Mining - 0.90%
Hartebeestfontein Gold Mining .................... 49,600 119,466
RTZ .............................................. 49,000 824,170
----------
943,636
----------
Packaging & Containers - 0.39%
Amcor ............................................ 66,000 406,898
----------
406,898
----------
Paper & Forest Products - 1.01%
Carter Holt Harvey ............................... 200,000 461,214
Georgia-Pacific .................................. 8,300 603,825
----------
1,065,039
----------
Real Estate - 18.07%
American General Hospitality ..................... 21,000 425,250
Arden Realty Group ............................... 20,000 482,500
Beacon Properties ................................ 25,000 790,625
Brandywine Realty Trust .......................... 20,000 355,000
Cali Realty ...................................... 55,000 1,553,750
Camden Property Trust ............................ 27,000 745,875
Developers Diversified Realty .................... 25,000 840,625
Duke Realty Investments .......................... 19,000 681,625
Excel Realty Trust ............................... 25,000 565,625
First Industrial Realty Trust .................... 43,000 1,230,875
Glenborough Realty Trust ......................... 36,300 544,500
Health Care Property Investors ................... 12,000 409,500
JDN Realty ....................................... 37,000 952,750
Macerich Company (The) .......................... 44,000 1,023,000
1996 annual report
9
<PAGE>
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Number Market
of Shares Value
- --------------------------------------------------------------------------------
COMMON STOCK (Continued)
REAL ESTATE (Continued)
Meridian Industrial Trust .......................... 35,400 $ 659,325
Oasis Residential .................................. 25,000 525,000
Patriot American Hospitality ....................... 32,000 1,212,000
Prentiss Properties Trust .......................... 45,000 1,006,875
Prime Retail ....................................... 72,720 899,910
Reckson Associates Realty .......................... 44,000 1,666,500
Security Capital Industrial Trust .................. 17,000 323,000
Sovran Self Storage ................................ 25,000 709,375
Storage Trust Realty ............................... 20,800 499,200
Sun Communities .................................... 20,000 637,500
Union du Credit-Bail Immobilier .................... 2,700 257,715
-----------
18,997,900
-----------
Retail - 1.01%
Boots .............................................. 65,000 693,544
Sime Darby (Hong Kong) ............................ 300,000 368,597
-----------
1,062,141
-----------
Telecommunications - 4.61%
British Columbia Telecom ........................... 20,271 463,277
Frontier ........................................... 25,000 656,250
GTE ................................................ 15,700 704,538
NYNEX .............................................. 16,000 742,000
Philippine Long Distance-SP ADR .................... 6,400 368,000
Telecom Corp. of New Zealand ....................... 189,000 996,799
Telefonica de Espana ............................... 42,000 921,081
-----------
4,851,945
-----------
Transportation & Shipping - 1.39%
Brambles Industries ................................ 55,000 963,046
British Airways .................................... 50,000 494,008
-----------
1,457,054
-----------
Utilities - 5.76%
British Gas ........................................ 91,000 334,102
Cable & Wireless ................................... 88,000 703,844
Electrabel SA ...................................... 2,950 691,871
Hong Kong Electric Holdings ........................ 200,000 641,488
Iberdrola SA ....................................... 56,000 646,486
Oklahoma Gas & Electric ............................ 12,000 493,500
Peco Energy ........................................ 25,000 637,500
Rochester Gas & Electric ........................... 20,000 382,500
Unicom ............................................. 37,500 998,438
United Utilities ................................... 53,000 525,430
-----------
6,055,159
-----------
Miscellaneous - 1.17%
Eridania Beghin-Say SA ............................. 2,550 395,978
Jardine Matheson Holdings .......................... 64,800 427,680
Pacific Dunlop ..................................... 175,000 401,914
-----------
1,225,572
-----------
Total Common Stock (cost $54,734,521) .............. 62,224,872
-----------
<PAGE>
- --------------------------------------------------------------------------------
Number Market
of Shares Value
- --------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK - 7.64%
Banking, Finance & Insurance - 2.34%
Banco Commercial Portugues 8.00%
series "A" pfd cv ............................. 10,000 $ 526,250
Salomon 7.625% series "FSA" pfd cv "DECS" ....... 30,000 903,750
SunAmerica $3.188 pfd cv "PERCS" ................ 25,000 1,025,000
----------
2,455,000
----------
Buildings & Materials - 0.46%
Blue Circle Industries 7.625% pfd cv ............ 150,000 482,666
----------
482,666
----------
Food, Beverage & Tobacco - 2.22%
RJR Nabisco Holdings $0.60 pfd cv
series "C" "PERCS" ........................... 200,000 1,275,000
Wendy's Financing Int'l 5.00%
series "A" pfd cv ............................. 20,000 1,062,500
----------
2,337,500
----------
Metals & Mining - 0.49%
Coeur D' Alene Mines 7.00% pfd cv "MARCS" ....... 30,000 513,750
----------
513,750
----------
Miscellaneous - 0.70%
+Loral Space & Communication 6.00% pfd cv ....... 13,000 736,125
----------
736,125
----------
Real Estate - 1.43%
First Union Real Estate 8.40% pfd cv ............ 18,300 654,225
+Insignia Financing 6.50% pfd cv ................ 16,700 851,700
----------
1,505,925
----------
Total Convertible Preferred Stock
(cost $7,573,705) ............................ 8,030,966
----------
Principal
Amount
NON-CONVERTIBLE BONDS - 47.96%
Automobiles & Auto Equipment - 1.14%
+Delco Remy International sr sub notes 10.625%
2006 ....................................... US$ 400,000 420,000
Exide sr notes 10.75% 2002 ................... US$ 400,000 421,000
Harvard Industries sr notes 11.125% 2005 ..... US$ 300,000 253,500
Speedy Muffler King unsec sr notes 10.875%
2006 ....................................... US$ 100,000 107,500
----------
1,202,000
----------
Banking, Finance & Insurance - 8.09%
+Aetna Industries sr notes 11.875% 2006 ...... US$ 400,000 425,000
Bank of Austria AG unsec sub 10.875%
2004 ....................................... AUD 1,000,000 971,699
Bank of Greece unsec deb 10.75% 2010 ......... GBP 120,000 230,873
Eurofima sr unsec unsub deb 9.875% 2007 ...... AUD 2,000,000 1,914,893
European Bank for Reconstruction
& Development unsec marathon bonds
15.25% 1998 ................................ GRD 100,000,000 434,081
1996 annual report
10
<PAGE>
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Non-Convertible Bonds (Continued)
Banking, Finance & Insurance (Continued)
European Investment Bank deb 17.50%
1999 ...................................... GRD 50,000,000 $232,285
European Investment Bank unsec matador bonds
14.00% 2001................................ ESP 80,000,000 791,506
First Nationwide Holdings sr sub notes
9.125% 2003................................ US$ 300,000 304,500
International Bank for Reconstruction
& Development sr unsub marathon bonds
15.50% 1997 ................................ GRD 350,000,000 1,470,451
International Finance unsec marathon bonds
15.25% 1999................................. GRD 150,000,000 675,927
Mutual Group unsec sub deb 7.25%
2004 ...................................... GBP 200,000 322,197
National Bank of Hungary sr deb 10.00%
2003 ...................................... GBP 400,000 725,890
----------
8,499,302
----------
Buildings & Materials - 0.46%
American Standard sr notes 10.875% 1999 ..... US$ 450,000 483,750
----------
483,750
----------
Cable, Media & Publishing - 3.20%
Adelphia Comm sr notes 12.50% 2002 .......... US$ 400,000 406,000
Cablevision Systems sr sub debs
10.75% 2004................................ US$ 400,000 413,000
Century Communications sr notes 9.75%
2002 ...................................... US$ 600,000 616,500
Granite Broadcasting sr sub notes 9.375%
2005 ...................................... US$ 500,000 480,000
Infinity Broadcasting sr sub notes 10.375%
2002 ...................................... US$ 200,000 212,500
Jones Intercable sr notes 9.625% 2002 ....... US$ 300,000 313,500
Muzak LP/Capital unsec sr notes 10.00%
2003 ...................................... US$ 475,000 484,500
Rogers Cablesystems sr sec deb 10.00%
2007 ...................................... US$ 140,000 148,050
Rogers Cablesystems sr unsec sub deb
11.00% 2015................................ US$ 90,000 97,200
Sullivan Graphics sr sub notes 12.75% 2005 .. US$ 200,000 195,000
----------
3,366,250
----------
Chemicals - 1.93%
+Astor sr sub notes 10.50% 2006 .............. US$ 400,000 408,000
BPC Holding sr notes 12.50% 2006 ............ US$ 250,000 263,750
Foamex sr notes 11.25% 2002 ................. US$ 400,000 422,000
+ISP Holdings sr notes 9.75% 2002 ........... US$ 216,000 225,720
NL Industries sr sec notes 11.75% 2003 ...... US$ 265,000 273,613
UCC Investors sr sub notes 11.00% 2003 ...... US$ 400,000 430,000
----------
2,023,083
----------
Computers & Technology - 0.38%
Unisys sr notes 12.00% 2003 ................. US$ 250,000 265,313
Unisys sr notes 11.75% 2004 ................. US$ 130,000 136,500
----------
401,813
----------
<PAGE>
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Non-Convertible Bonds (Continued)
Consumer Products - 0.51%
American Safety Razor sr notes 9.875% 2005 .. US$ 500,000 $537,500
---------
537,500
---------
Corporate - 0.42%
Weirton Steel sr notes 11.375% 2004 ......... US$ 450,000 444,375
---------
444,375
---------
Energy - 1.01%
Costilla Energy sr notes 10.25% 2006 ........ US$ 200,000 207,500
Falcon Drilling sr notes 8.875% 2003 ........ US$ 500,000 507,500
Mesa Operating unsec 10.625% 2006 ........... US$ 200,000 216,500
Plains Resouces sr sub notes 10.25% 2006 .... US$ 125,000 132,500
---------
1,064,000
---------
Food, Beverage & Tobacco - 0.10%
Purina Mills sr sub notes 10.25% 2003 ....... US$ 100,000 103,500
---------
103,500
---------
Foreign Government - 12.75%
Hydro-Quebec 12.75% 2015 .................... G&P 160,000 380,420
Italian Government 12.00% 2003 .............. ITL 3,000,000,000 2,432,801
New Zealand Government. 8.00% 2001 .......... NZD 2,000,000 1,480,725
Poland Global FRN 2.75% 2024 ................ US$ 2,000,000 1,163,750
Republic of Argentina FRN 5.25% 2023 ........ US$ 500,000 318,125
Republic of Turkey unsec deb 9.00% 2003 ..... GBP 400,000 610,369
South Africa Republic 10.75% 1998 ........... ZAL 2,500,000 495,623
South Africa Republic 12.50% 2002 ........... ZAL 14,000,000 2,692,833
Spanish Government 11.30% 2002 .............. ESP 320,000,000 2,986,254
Spanish Government 8.20% 2009 ............... ESP 100,000,000 837,452
----------
13,398,352
----------
Healthcare & Pharmaceuticals - 0.36%
+Dade International sr sub notes
11.125% 2006 .............................. US$ 150,000 163,125
Healthsouth Rehabilitation sr sub notes
9.50% 2001 ................................ US$ 200,000 213,500
----------
376,625
----------
Industrials - 0.77%
Collins & Aikman Products sr sub notes
11.50% 2006 .............................. US$ 400,000 428,500
IMO Industries sr sub notes 11.75% 2006 ..... US$ 400,000 380,000
----------
808,500
----------
Industrial Machinery - 0.19%
Jordan Industries sr notes 10.375% 2003 ..... US$ 200,000 196,500
----------
196,500
----------
Leisure, Lodging & Entertainment - 1.70%
Argosy Gaming 1st mortgage 13.25% 2004 ...... US$ 200,000 191,000
+Cinemark sr sub notes 9.625% 2008 ........... US$ 500,000 506,250
Scott's Hospitality unsec deb 10.95% 2001 ... CAD 800,000 716,825
Trump Atlantic City Associates Funding sec
1st mtg notes 11.25% 2006 ................. US$ 400,000 378,000
----------
1,792,075
----------
1996 annual report
11
<PAGE>
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Non-Convertible Bonds (Continued)
Metals & Mining - 1.34%
Armco sr notes 11.375% 1999 ................ US$ 250,000 $262,500
+Commonwealth Aluminum sr sub notes 10.75%
2006 ...................................... US$ 200,000 205,000
G.S. Technologies sr notes 12.00% 2004 ..... US$ 400,000 413,500
G.S. Technologies sr notes 12.25% 2005 ..... US$ 300,000 314,250
Oregon Steel Mills sec 1st mtg notes 11.00%
2003....................................... US$ 200,000 215,000
---------
1,410,250
---------
Packaging & Containers - 0.91%
Container Corporation of America sr notes
11.25% 2004 ............................... US$ 200,000 217,000
Stone Container sr notes 11.50% 2004 ....... US$ 200,000 209,500
U.S. Can sr sub notes 13.5% 2002 ........... US$ 500,000 530,000
--------
956,500
--------
Paper & Forest Products - 2.71%
Domtar, Inc. deb 10.85% 2017 ............... CAD 1,000,000 907,481
+Four M Corp sr notes 12.00% 2006 ........... US$ 100,000 103,250
Pacific Lumber sr notes 10.50% 2003 ........ US$ 400,000 403,000
Rainy River Forest Products sr sec notes
10.75% 2001 ............................... US$ 300,000 327,375
Repap Wisconsin sr sec notes 9.25% 2002 .... US$ 400,000 396,000
Repap Wisconsin sr sec notes 9.875% 2006 ... US$ 500,000 490,000
Riverwood International sr sub notes 10.875%
2008 ...................................... US$ 250,000 226,250
---------
2,853,356
---------
Retail - 3.32%
ASDA-MFI Group unsec unsub deb 10.875%
2010 ..................................... GBP 500,000 1,007,130
+Cole National Group sr sub notes 9.875%
2006 ..................................... US$ 500,000 507,500
Cort Furniture Rental sr notes 12.00%
2000...................................... US$ 142,000 158,330
Fleming Companies sr sub notes 10.625%
2001 ..................................... US$ 300,000 301,875
Provigo deb 11.25% 2001 ................... CAD 800,000 718,315
Ralph's Grocery sr sub notes 13.75%
2005 ..................................... US$ 350,000 374,500
Ralph's Grocery sr notes 10.45% 2004 ...... US$ 400,000 418,500
---------
3,486,150
---------
Telecommunications - 0.40%
Rogers Cantel sr sub notes 11.125% 2002 ... US$ 400,000 424,500
-------
424,500
-------
Textiles & Furniture - 0.71%
Clark Schwebel sr notes 10.50% 2006 ....... US$ 500,000 531,250
+Lifestyle Furnishings sr sub notes 10.875%
2006 ..................................... US$ 200,000 213,500
--------
744,750
--------
Transportation & Shipping - 0.78%
+Blue Bird Body sr sub notes 10.75%
2006 ..................................... US$ 200,000 208,500
<PAGE>
- --------------------------------------------------------------------------------
Principal Market
Amount Value
- --------------------------------------------------------------------------------
Non-Convertible Bonds (Continued)
Transportation & Shipping (Continued)
Teekay Shipping 1st pfd ship mtg notes 9.625%
2003 ....................................... US$ 200,000 $210,000
Teekay Shipping 1st pfd ship mtg notes 8.32%
2008 ....................................... US$ 400,000 401,000
---------
819,500
---------
Utilities - 3.00%
AES Corp. sr sub notes 10.25% 2006 .......... US$ 400,000 431,000
Calpine Corp sr notes 10.50% 2006 .......... US$ 400,000 422,000
Midland Funding II deb 11.75% 2005........... US$ 400,000 446,000
TransTexas Gas sr sec notes 11.50% 2002...... US$ 400,000 436,000
State Electric Commission of Victoria sr
unsec unsub 10.50% 2003 .................... AUD 1,500,000 1,419,373
----------
3,154,373
----------
Miscellaneous - 1.78%
Graphic Controls sr sub notes 12.00% 2005 ... US$ 1,000,000 1,100,000
Knoll sr sub notes 10.875% 2006 ............. US$ 500,000 547,500
+Pierce Leahy sr sub notes 11.125% 2006 ...... US$ 200,000 220,250
----------
1,867,750
-----------
Total Non-Convertible Bonds
(cost $47,273,757) ......................... 50,414,754
-----------
CONVERTIBLE BONDS - 5.53%
Computer Technology - 0.91%
Macneal-Schwendler unsec sub deb 7.875%
2004 ....................................... US$ 500,000 458,750
National Data Corp sub notes 5.00% 2003...... US$ 500,000 503,750
-----------
962,500
-----------
Electronics - 0.45%
Richey Electronics sub notes 7.00% 2006 ..... US$ 500,000 469,375
-----------
469,375
-----------
Healthcare & Pharmaceuticals - 1.13%
+ARV Assisted Living sub notes 6.75% 2006 ... US$ 500,000 444,375
+Phymatrix sub deb 6.75% 2003 ............... US$ 900,000 749,250
-----------
1,193,625
-----------
Paper & Forest Products - 0.21%
Repola unsec sub 6.50% 2004 ................. FIM 1,000,000 222,359
-----------
222,359
-----------
Real Estate - 1.02%
IRT Property sub deb 7.30% 2003 ............. US$ 500,000 493,750
LTC Properties sub deb 8.50% 2000 ........... US$ 500,000 575,625
-----------
1,069,375
-----------
Retail - 1.81%
Home Depot sub notes 3.25% 2001 ............. US$ 500,000 493,750
Home Shopping Network sub deb 5.875%
2006 ....................................... US$ 600,000 645,000
SAKS Holdings sub notes 5.50% 2006 .......... US$ 750,000 762,188
-----------
1,900,938
-----------
Total Convertible Bonds
(cost $5,851,678) .......................... 5,818,172
-----------
1996 annual report
12
<PAGE>
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Principal Market
Amount Value
- --------------------------------------------------------------------------------
SHORT-TERM SECURITIES - 1.11%
**U.S. Treasury Bills 4.89% due 1/02/1997..... US$ 1,172,000 $1,166,901
------------
1,166,901
------------
Total Short-Term Securities
(cost $1,166,901) ......................... 1,166,901
------------
Shares
Subject to Call
CALL OPTIONS WRITTEN - (0.16)%
Chase Manhattan, January 1997 $85 12,000 (123,000)
Great Western Financial, January 1997 $30 22,000 (49,500)
------------
Total Call Options Written
(premiums received $67,440)................ (172,500)
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 121.27%
(cost $116,533,122)........................ 127,483,165
LIABILITIES NET OF RECEIVABLES AND OTHER
ASSETS - (21.27)% ......................... (22,362,963)
------------
NET ASSETS APPLICABLE TO 6,650,647 SHARES
($0.01 par value) OUTSTANDING; EQUIVALENT
TO $15.81 PER SHARE - 100.00% ............. $105,120,202
============
- ------------------
GDR -- Global Depository Receipt
PERCS -- Preferred Equity Redemption Cumulative Stock
ADR -- American Depository Receipt
DECS -- Dividend Enhanced Convertible Stock
MARCS -- Mandatory Adjustable Redeemable Convertible Security Stock
FRN -- Floating rate note
* Security held in connection with open call option written.
** U.S. Treasury bills are traded on a discount basis; the
interest rate shown is the discount rate paid at the time of purchase by the
Fund.
+ Security exempt from registration under Rule 144A of the Securities
Act of 1933, as amended. These securities may be resold in transactions
exempt from registration, normally to qualified institutional buyers (See
Note 6).
US$ -- U.S. dollars ITL -- Italian lira
GBP -- British pounds NZD -- New Zealand dollars
AUD -- Australian dollars ZAL -- South African rand
GRD -- Greek drachmas CAD -- Canadian dollars
ESP -- Spanish pesetas FIM -- Finnish markka
------------------
COMPONENTS OF NET ASSETS AT NOVEMBER 30, 1996:
Common stock, $0.01 par value, 500,000,000
shares authorized to the Fund ................. $93,096,054
Accumulated net realized gain on investments++.. 1,072,597
Net unrealized appreciation of investments
and foreign currencies ........................ 10,951,551
-----------
Total net assets ............................... $105,120,202
============
- ------------------
++Net realized gains (losses) on foreign currencies are included in net
investment income in accordance with provisions of the Internal Revenue Code.
See accompanying notes
1996 annual report
13
<PAGE>
Delaware Group
Global Dividend and Income Fund, Inc.
Statement of Operations
Year Ended November 30, 1996
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest (net of foreign taxes withheld
of $23,818) ............................. $6,313,352
Dividends (net of foreign taxes withheld
of $91,346) ............................. 2,735,375 $9,048,727
----------
EXPENSES:
Management fees ......................... 818,639
Administrative fees ..................... 245,592
Reports to shareholders. ................ 53,163
Amortization of line of credit
organization expenses .................. 29,907
Amortization of organization expenses.... 24,888
NYSE fees ............................... 17,518
Custodian fees .......................... 17,400
Transfer agent fees ..................... 16,956
Professional fees ....................... 11,250
Directors' fees ......................... 9,331
Taxes, other than taxes on income 4,600
Registration fees ....................... 506
Other ................................... 20,210
------
Total operating expenses
(before interest expense) .............. 1,269,960
Interest expense ........................ 1,240,050
----------
Total expenses .......................... 2,510,010
----------
Net investment income ................... $6,538,717
----------
NET REALIZED AND UNREALIZED GAIN/(LOSS)
ON SECURITIES AND FOREIGN CURRENCIES:
Net realized gain/(loss) on:
Security transactions .................. $4,198,826
Foreign currencies ..................... (183,986)
----------
Net realized gain ....................... 4,014,840
Net change in unrealized appreciation on
securities and foreign currencies ...... 11,042,342
----------
NET REALIZED AND UNREALIZED GAIN ON
SECURITIES AND FOREIGN CURRENCIES ...... 15,057,182
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ........................ $21,595,899
===========
See accompanying notes
1996 annual report
14
<PAGE>
Delaware Group
Global Dividend and Income Fund, Inc.
Statements of Changes in Net Assets
- -------------------------------------------------------------------------------
Year Ended Year Ended
November 30, 1996 November 30, 1995
- -------------------------------------------------------------------------------
OPERATIONS:
Net investment income ................ $6,538,717 $7,562,237
Net realized gain on securities
and foreign currencies .............. 4,014,840 1,944,478
Net change in unrealized appreciation
on securities and foreign currencies. 11,042,342 5,812,377
----------- -----------
Net increase in net assets
resulting from operations ........... 21,595,899 15,319,092
----------- -----------
DIVIDENDS AND DISTRIBUTIONS
TO SHAREHOLDERS FROM:
Net investment income and short-term
capital gains ....................... (9,975,920) (8,777,060)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Cost of shares repurchased ........... (713,795)
Additional offering costs charged to
paid in capital ..................... (108,172)
----------- -----------
Decrease in net assets derived
from capital share transactions...... (821,967)
----------- -----------
NET INCREASE IN NET ASSETS ........... 11,619,929 5,720,065
NET ASSETS:
Beginning of year .................... 93,500,273 87,780,208
----------- -----------
End of year (including undistributed
net investment income of $0 and
$449,104, respectively) ............. $105,120,202 $93,500,273
============ ===========
See accompanying notes
<PAGE>
Delaware Group
Global Dividend and Income Fund, Inc.
Statement of Cash Flows
- -------------------------------------------------------------------------------
Year Ended
November 30, 1996
- -------------------------------------------------------------------------------
Increase (Decrease) in Cash:
(Including Foreign Currency)
Cash flows used for operating activities:
Interest and dividends received (excluding amortization
of $183,134) ........................................ $8,939,835
Operating expenses paid. ............................. (1,273,968)
Interest expenses paid ............................... (1,127,550)
Purchase of short-term portfolio investments, net .... (370,190)
Purchase of long-term portfolio investments .......... (121,761,089)
Proceeds from disposition of long-term portfolio
investments .......................................... 100,815,731
-------------
Net cash used for operating activities ............... (14,777,231)
-------------
Cash flows provided by financing activities:
Cash provided by Line of Credit borrowing ........... 25,000,000
Cash used to pay Line of Credit offering expenses ... (44,240)
Cash dividends paid ................................. (9,975,970)
-------------
Net cash provided by financing activities ........... 14,979,790
Effect of exchange rates on cash ..................... (117,056)
-------------
Net increase in cash 85,503
Cash at beginning of year ............................ 475,883
-------------
Cash at end of year .................................. $ 561,386
=============
Reconciliation of Net Increase in Net Assets
Resulting from Operations to Net Cash
(Including Foreign Currency)
Used for Operating Activities:
Net increase in net assets resulting from operations . $21,595,899
-------------
Increase in investments ............................. (21,563,557)
Net realized gain from security transactions ........ (4,198,826)
Net realized foreign exchange losses ................ 183,986
Net change in unrealized appreciation of investments
and foreign currencies.............................. (11,042,342)
Increase in receivable for investments sold ......... (74,168)
Decrease in interest and dividends receivable ....... 74,241
Decrease in deferred organization expenses .......... 54,795
Net increase in payable for investments purchased.... 139,043
Increase in interest payable. ....................... 112,500
Decrease in accrued expenses and other liabilities... (58,802)
-------------
Total adjustments .................................. (36,373,130)
-------------
Net cash used for operating activities................ $(14,777,231)
=============
See accompanying notes
1996 annual report
15
<PAGE>
Delaware Group
Global Dividend and Income Fund, Inc.
Notes to Financial Statements
November 30, 1996
- -------------------------------------------------------------------------------
Delaware Group Global Dividend and Income Fund, Inc. (the "Fund") is
registered as a diversified, closed-end management investment company under
the Investment Company Act of 1940, as amended. The Fund is organized as a
Maryland corporation.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund:
Security Valuation -- Securities listed or traded on a national exchange,
except for debt securities, are valued at the last sale price on the exchange
where they are primarily traded. Securities listed on a foreign exchange are
valued at the last quoted sale price before the time when the Fund is valued.
Securities not traded on a particular day, over-the-counter securities and
government and agency securities are valued at the mean value between bid and
asked prices. Exchange-traded options are valued at the last reported sale
price or, if no sales are reported, at the mean between the last reported bid
and asked prices. Non-exchange-traded options are valued using a mathematical
model. Short-term instruments having a maturity date of less than 60 days are
valued at amortized cost. Debt securities are valued by an independent pricing
service when such prices are believed to reflect the fair value of such
securities. All assets and liabilities that are expressed in foreign
currencies are valued and translated into U.S. dollars at the exchange rate of
such currencies against the U.S. dollar as provided by the pricing service as
of 3:30 pm New York time; this constitutes a change from the times recited in
the Fund's prospectus for the valuation of securities and translation of
foreign currencies into U.S. dollars. Forward foreign currency contracts are
valued at the mean between the bid and asked prices of the contracts.
Interpolated values are derived when the settlement date of the contracts is
on an interim date for which quotations are not available.
Federal Income Taxes -- The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for Federal income taxes has been made.
Distributions -- In December 1995, the Fund implemented a managed distribution
policy. Under the policy, the Fund declares and pays monthly dividends at an
annual rate of not less than $1.50 per share and is managed with a goal of
generating as much of the dividend as possible from ordinary income (net
investment income and short-term capital gains). The balance of the dividend
then comes from long-term capital gains (once a year) and, if necessary, a
return of capital. No dividends were designated as return of capital for the
fiscal year ended November 30, 1996.
Borrowings -- The Fund has entered into a Line of Credit Agreement with
Societe Generale for $25,000,000. A total of $120,000 was incurred in
connection with the start-up of the Line of Credit. These costs were deferred
and are being amortized ratably over a period of three years from the date of
the first borrowing (See Note 5).
<PAGE>
Other -- Security transactions are recorded on the date the securities are
purchased or sold (trade date). Costs used in calculating realized gains and
losses on the sale of investment securities are those of the specific
securities sold . Dividend income and distributions are recorded on the
ex-dividend date. Foreign dividends are also recorded on the ex-dividend date
or as soon after the ex-dividend date that the Fund is aware of such
dividends, net of all non-rebatable tax withholdings. Interest income and
expenses are recorded on an accrual basis.
A total of $124,000 was incurred in connection with the organization of the
Fund. These costs were deferred and are being amortized ratably over a five
year period from the date the Fund commenced operations.
Certain fund expenses are paid directly by brokers. The amount of these
expenses is less than 0.01% of the Fund's average weekly net assets.
2. Investment Management and Administration Agreements and Other Transactions
with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company, Inc. (DMC), the Investment Manager of the
Fund, an annual fee equal to 0.70% of the Fund's adjusted average weekly net
assets. At November 30, 1996, the Fund had a liability for Investment
Management fees of $74,555.
The Fund has also entered into an advisory agreement with Delaware
International Advisers Ltd. (DIAL) (the "Subadviser") an affiliate of DMC. For
the services provided to DMC, DMC pays the Subadviser a monthly fee equal to
40% of the fee paid to DMC under the terms of the Investment Management
Agreement.
The Fund has also entered into an Administration Agreement with Princeton
Administrators, L.P., the administrator of the Fund, which provides for
payment, subject to an annual minimum fee of $150,000, of a monthly fee
computed at the annual rate of 0.21% of the Fund's adjusted average weekly net
assets. Effective January 1, 1997, the administrative fee will be computed of
the annual rate of 0.15% of the Fund's adjusted average weekly net assets. At
November 30, 1996, the Fund had a liability for administration fees of
$22,367.
For purposes of the calculation of investment management fees and
administration fees, adjusted average weekly net assets do not include the
Line of Credit liability.
Officers, directors and employees of DMC, who are also officers, directors and
employees of the Fund, do not receive any compensation from the Fund.
1996 annual report
16
<PAGE>
Notes to Financial Statements (Continued)
3. Investments
During the year ended November 30, 1996, the Fund made purchases of
$121,900,132 and sales of $100,217,612 of investment securities other than
U.S. government securities and temporary cash investments.
At November 30, 1996, the federal income tax cost basis of the Fund's
investment was $116,533,122 and, accordingly, net unrealized appreciation for
federal income tax purposes aggregated $10,950,043 of which $14,573,420
related to unrealized appreciation of securities and $3,623,377 to unrealized
depreciation of securities.
Transactions in options written for the year ended November 30, 1996, were as
follows:
Number
of Premiums
Contracts Received
Contracts outstanding -- $ --
November 30, 1995
Contracts written .................. 2,340 277,882
Contracts terminated:
Exercised ...................... 1,214 134,078
Expired ........................ 786 76,364
----- -------
Total Contracts terminated ..... 2,000 210,442
----- -------
Contracts outstanding
November 30, 1996 .............. 340 $ 67,440
----- -------
Premiums received from writing options which expire are treated as realized
gains. Premiums received from writing options which are exercised or are
closed are offset against the proceeds or amount paid on the transaction to
determine the realized gain or loss. The net realized gain on options expired
was $76,364 for the year ended November 30, 1996.
4. Forward Foreign Currency Contracts
The Fund will, from time to time, enter into forward foreign currency
contracts. There are costs and risks associated with such currency
transactions. No type of foreign currency transaction will eliminate
fluctuations in the prices of the Fund's foreign securities or will prevent
loss if the prices of such securities should decline. No forward foreign
currency contracts were outstanding as of November 30, 1996.
5. Line of Credit
In February 1996, the Fund entered into a Line of Credit Agreement with
Societe Generale for $25,000,000. At November 30, 1996, the par value of loans
outstanding was $25,000,000 at a variable interest rate of 6.00%. During the
year ended November 30, 1996, the average daily balance of loans outstanding
was $20,355,191 at a weighted average interest rate of approximately 5.993%.
The maximum amount of loans outstanding at any time during the period was
$25,000,000. The loan is collateralized by the Fund's portfolio.
6. Concentration of Credit Risk
The Fund may invest in high-yield fixed income securities which carry ratings
of BB or lower by S&P and/or Ba or lower by Moody's. Investments in these
higher yielding securities may be accompanied by a greater degree of credit
risk than higher rated securities. Additionally, lower rated securities may be
more susceptible to adverse economic and competitive industry conditions than
investment grade securities.
The Fund may invest in securities whose value is derived from an underlying
pool of mortgages or consumer loans. Prepayment of these loans may shorten the
stated maturity of the respective obligation and may result in a loss of
premium, if any has been paid.
The Fund may invest up to 10% of its total assets in illiquid securities which
include securities with contractual restrictions on resale, securities exempt
from registration under Rule 144A of the Securities Act of 1933, as amended,
and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Fund's
ability to dispose of such securities in a timely manner and at a fair price
when it is necessary to liquidate such securities. These securities have been
denoted in the Statement of Net Assets.
1996 annual report
17
<PAGE>
Notes to Financial Statements (Continued)
7. Geographic Disclosure
As of November 30, 1996, the Fund's geographic diversification was as follows:
Percentage of
Total Securities
Country* Market Value at Value
--------------- --------------- --------------
United States ....................... $78,620,497 61.67%
United Kingdom ...................... 10,878,212 8.53%
Australia ........................... 7,419,608 5.82%
Spain ............................... 6,182,778 4.85%
Greece .............................. 3,784,444 2.97%
South Africa ........................ 3,307,922 2.60%
New Zealand ......................... 2,938,737 2.31%
Canada .............................. 2,805,898 2.20%
Italy ............................... 2,432,802 1.91%
France .............................. 2,014,441 1.58%
Germany ............................. 1,839,463 1.44%
Netherlands ......................... 1,746,195 1.37%
Poland .............................. 1,163,750 0.91%
Hong Kong ........................... 1,010,085 0.79%
Belgium ............................. 691,871 0.54%
Indonesia ........................... 424,102 0.33%
Finland ............................. 222,360 0.18%
--------------- --------------
Total ............................... $127,483,165 100.00%
--------------- --------------
------------------
* Based on the currency in which each security is denominated.
Like any investment in securities, the value of the portfolio may be subject
to risk or loss from market, currency, economic and political factors which
occur in the countries where the Fund is invested.
8. Capital Stock
There are 500,000,000 shares of $0.01 par value capital stock authorized.
The Fund did not repurchase any shares under the Share Repurchase Program
during the year ended November 30, 1996.
On December 2, 1996, the Fund declared its monthly dividend in the amount of
$0.125 per share. This dividend was payable December 27, 1996, to
stock-holders of record at the close of business on December 13, 1996. The
ex-dividend date was December 11, 1996.
On December 23, 1996, the Fund declared distributions from net realized gain
from security transactions in the amount of $0.125 per share. This dividend
was payable January 31, 1997, to stockholders of record at the close of
business on December 31, 1996. The ex-dividend date was December 27, 1996.
Shares issuable under the Fund's dividend reinvestment plan are purchased by
the Fund's transfer agent, IFTC, in the open market.
1996 annual report
18
<PAGE>
Notes to Financial Statements (Continued)
9. Financial Highlights
- ------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
For the Period
Year Ended Year Ended March 4, 1994* to
November 30, 1996 November 30, 1995 November 30, 1994
---------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period.................. $14.06 $13.09 $14.00
------------ ------------ ------------
Income (loss) from investment operations:
Net investment income............................... 0.98 1.23 0.86
Net realized and unrealized gain (loss) from
security transactions ............................. 2.27 1.06 (1.07)
------------ ------------ ------------
Total from investment operations.................... 3.25 2.29 (0.21)
------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income and short-term
capital gains...................................... (1.50)2 (1.32) (0.70)
------------ ------------ ------------
Total dividends and distributions................... (1.50) (1.32) (0.70)
------------ ------------ ------------
Net asset value, end of period ...................... $ 15.81 $ 14.06 $ 13.09
============ ============ ============
Market value, end of period ......................... $ 15.88 $ 13.75 $ 11.75
============ ============ ============
Total investment return based on:1
Market value........................................ 27.42% 29.74% (17.15)%
============ ============ ============
Net asset value..................................... 24.10% 19.08% (1.11)%
============ ============ ============
Ratios and supplemental data:
Net assets, end of period (000 omitted)............. $105,120 $93,500 $87,780
============ ============ ============
Ratio of total operating expenses to adjusted
average weekly net assets (before interest
expense)........................................... 1.09% 1.13% 1.32%**
Ratio of interest expense to adjusted average
weekly net assets ................................. 1.06% N/A N/A
Ratio of net investment income to adjusted average
weekly net assets.................................. 5.59% 8.39% 8.54%**
Portfolio turnover.................................. 88% 101% 86%
Average commission rate paid........................ $0.0390 N/A N/A
Leverage analysis:
Debt outstanding at end of period (000 omitted)..... $25,000 N/A N/A
Average daily balance of debt outstanding
(000 omitted) ..................................... $20,355 N/A N/A
Average daily balance of shares outstanding
(000 omitted) ..................................... 6,651 N/A N/A
Average debt per share.............................. $3.06 N/A N/A
</TABLE>
------------------
* Commencement of operations
** Annualized
+ Net of underwriter's discount of $0.90 and offering costs of $0.10 charged
to paid-in capital with respect to issuance of common shares.
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. 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 a
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. The total investment returns
calculated based on market value and net asset value for a period of less
than one year have not been annualized.
2 Of the $1.50 per share dividends paid during the year $0.48 consisted of
short-term capital gains, which are taxable at the same rate as net
investment income.
1996 annual report
19
<PAGE>
Delaware Group Global Dividend & Income Fund, Inc.
Report of Independent Auditors
-----------------------------------------------------------------------------
To the Shareholders and Board of Directors
Delaware Group Global Dividend and Income Fund, Inc.
We have audited the accompanying statement of net assets of Delaware Group
Global Dividend and Income Fund, Inc., as of November 30, 1996, and the
related statements of operations and cash flows for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the two years in the
period then ended and for the period March 4, 1994 (commencement of
operations) to November 30, 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 November 30, 1996 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
Delaware Group Global Dividend and Income Fund, Inc. at November 30, 1996, the
results of its operations and its cash flows for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the two years in the period then
ended and for the period March 4, 1994 (commencement of operations) to
November 30, 1994, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
Philadelphia, Pennsylvania
January 10, 1997
- -------------------------------------------------------------------------------
Proxy Results
- -------------------------------------------------------------------------------
During the year ended November 30, 1996, The Delaware Group Global Dividend
and Income Fund shareholders voted on the following proposals at
the annual meeting of shareholders on July 31, 1996. The description of each
proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
Shares Voted Shares Voted
For Without Authority
----------------------------------------------------------
<S> <C> <C>
1. To elect the Fund's Board of Directors:
Wayne A. Stork........................ 4,932,749 32,296
Walter P. Babich...................... 4,932,749 32,296
Anthony D. Knerr...................... 4,933,113 31,932
Ann R. Leven.......................... 4,932,553 32,492
W. Thacher Longstreth ................ 4,930,679 34,366
Charles E. Peck....................... 4,932,415 32,630
Shares Voted Shares Voted Shares Voted
For Against Abstain
-----------------------------------------------------------
2. To ratify the appointment of
Ernst & Young LLP as the Fund's
independent auditors.................. 4,895,278 20,627 49,140
</TABLE>
1996 annual report
20
<PAGE>
This annual report is for the information of Global Dividend and Income Fund
shareholders. It sets forth details about charges, expenses, investment
objectives and operating policies of the Fund. You should read it carefully
before you invest.
Notice is hereby given in accordance with Section 23(c) of the Investment Act
of 1940 that the Fund may purchase at market prices from time to time shares of
its Common Stock in the open market.
Number of Recordholders as of November 30, 1996: 349
Board of Directors
WAYNE A. STORK
Chairman, President and Chief Executive Officer
Delaware Group of Funds
Philadelphia, PA
WALTER P. BABICH+
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
ANTHONY D. KNERR+
Consultant, Anthony Knerr & Associates
New York, NY
ANN R. LEVEN+
Treasurer, National Gallery of Art
Washington, DC
W. THACHER LONGSTRETH
City Councilman
Philadelphia, PA
CHARLES E. PECK
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
+Audit Committee Member
Executive Officers
WAYNE A. STORK
Chairman, President and Chief Executive Officer
Delaware Group of Funds
Philadelphia, PA
WINTHROP S. JESSUP
Executive Vice President
Philadelphia,PA
RICHARD G. UNRUH, JR.
Executive Vice President
Philadelphia, PA
PAUL E. SUCKOW
Senior Vice President/Chief Investment Officer,
Fixed-Income
Philadelphia, PA
DAVID K. DOWNES
Senior Vice President/Chief Administrative Officer/
Chief Financial Officer
Philadelphia, PA
GEORGE M. CHAMBERLAIN, JR.
Senior Vice President/Secretary
Philadelphia, PA
JOSEPH H. HASTINGS
Vice President/Corporate Controller
Philadelphia, PA
MICHAEL P. BISHOF
Vice President/Treasurer
Philadelphia, PA
<PAGE>
REGISTRAR AND
STOCK TRANSFER AGENT
Investors Fiduciary Trust Company
210 West 10th Street
Kansas City, MO 64105
1.800.596.8396
PRINCIPAL OFFICE OF THE FUND
1818 Market Street
Philadelphia, PA 19103-3682
INDEPENDENT AUDITORS
Ernst & Young LLP
2001 Market Street
Philadelphia, PA
directors & officers
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia, Pennsylvania
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
<PAGE>
(photo of globes)
For Securities Dealers
1.800.362.7500
- ---------
[LOGO]
DGF
Listed For Financial Institutions Representatives Only
NYSE 1.800.659.2265
- ---------
DELAWARE
GROUP
=====================
Philadelphia o London
Printed in the USA on
recycled paper
AR-DGF[11/96]TKO1/97 Copy Rights Delaware Distributors, L.P. (GDI-06)
