UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File No. 811-08076
---------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
466 Lexington Avenue, New York, New York 10017-3140
-------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Hal Liebes, Esq.
The Emerging Markets Telecommunications Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3140
Registrant's telephone number, including area code:(212) 875-3500
Date of fiscal year end: November 30, 2004
Date of reporting period: December 1, 2003 to May 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
THE EMERGING MARKETS
TELECOMMUNICATIONS
FUND, INC.
SEMI-ANNUAL REPORT
MAY 31, 2004
[ETF LISTED NYSE(R) LOGO]
3018-SA-04
CONTENTS
Letter to Shareholders 1
Portfolio Summary 4
Schedule of Investments 6
Statement of Assets and Liabilities 9
Statement of Operations 10
Statement of Changes in Net Assets 11
Statement of Cash Flows 12
Financial Highlights 14
Notes to Financial Statements 16
Results of Annual Meeting of Shareholders 23
Privacy Policy Notice 24
Description of InvestLink(SM) Program 25
Proxy Voting 28
LETTER TO SHAREHOLDERS
July 15, 2004
DEAR SHAREHOLDER:
We are writing to report on the activities of The Emerging Markets
Telecommunications Fund, Inc. (the "Fund") for the six months ended May 31,
2004. The Fund's total return for the period, based on net asset value ("NAV"),
was 10.40% vs. an increase of 5.93% for the Morgan Stanley Capital International
Emerging Markets Index* ("MSCI EM") and an increase of 8.21% for the
telecommunications services subsector of the MSCI EM.
PERFORMANCE: HELPED BY STOCK SELECTION
The Fund had a positive showing in both absolute and relative terms, aided by
good stock selection within Asia, Latin America and emerging Europe. The Fund's
holdings in Mexico, Russia, South Korea and India were among its strongest
performers. In addition, the Fund benefited from being in a defensive mode
(having reduced its exposure to certain higher valued markets such as China and
Mexico) when markets turned sharply down in 2004's second quarter.
The Fund's private placement holdings, which accounted for about 20% of the
portfolio as of May 31, 2004, collectively had only a slight positive return and
hence detracted from relative performance. However, this was compensated for by
stock selection in the public arena.
THE MARKET: STRONG START, WEAKER FINISH
The world's stock markets performed well over the first half of the period, but
then tumbled on worries that interest rates would begin to rise. In addition,
investor sentiment was dampened by concerns that China's strong economy would
weaken and by heightened geopolitical risk factors in general. Acting in high
beta fashion, as they often do, emerging stock markets outpaced developed
markets during the rally, and underperformed when markets turned down.
Within the emerging market group, telecom stocks weathered the late-period
decline relatively well, supported by solid growth data in most areas. For the
six months ended May 31, 2004, emerging telecoms outpaced emerging and developed
markets as well as stocks of developed telecom markets.
THE PORTFOLIO: DEFENSIVE AT THE RIGHT TIME
In the first part of the period, our portfolio adjustments included adding to
our position in Mexico's largest telecom company, narrowing the degree of our
underweight. In Argentina, we established a position in a company that we
concluded could benefit from an acceleration of cellular usage in the country.
We see room for good long-term growth here, in a country that is recovering from
financial crisis and that currently has low levels of telecom penetration.
With regard to Asia, we remained underweight in Chinese telecom stocks, based on
risk/reward factors. We still see good opportunities in that market, however,
and purchased two telecom equipment providers in China. Elsewhere of note, we
sold a small-cap Philippine telecom stock on the back of strong performance and
amid some macroeconomic concerns. We raised our exposure to the Indonesian
wireless sector, part of our overall strategy to favor cellular over fixed-wire
companies and enhance the Fund's growth profile.
1
In the latter half of the period we became more defensive, paring our weighting
in the Mexican company noted above as it became richly valued in our view. We
lowered our exposure to China on our concerns that growth there would slow. Our
China reduction at this time was also based on a technical factor. A large
equity issuance was pending, and we sought to limit the likely negative impact
the higher supply would have on Chinese stocks and one stock in particular.
Other defensive moves we made included selling a Turkish cellular stock. As it
turned out, these adjustments helped the Fund's relative performance during the
market's decline in the second part of the period.
As the period drew to a close, we undid a few of our defensive plays, adding
back Mexico and China (where we participated in the equity issuance), although
we continued to avoid Turkey.
Elsewhere of note, we had a sizable overweighting in Russia throughout the
period. This reflected our optimism over the market's growth potential, which we
thought outweighed negative factors such as the country's uncertain political
environment. Within Russia, we sold a major telecom stock and added other,
smaller companies whose stocks we deemed to be oversold.
We ended the period with a modest underweight in Brazil. We continued to view
the market favorably from a value perspective, but generally saw better industry
fundamentals and operational results elsewhere.
PRIVATE PLACEMENT UPDATE
As mentioned in the November 30, 2003 annual report, most of the Fund's private
placement holdings are technology oriented venture capital funds. Increases in
the valuation of such private placement holdings generally lag behind the
recovery of the public markets, as such increases are generally driven by
increased acquisition, IPO and venture capital financing activity, which are
beginning to show signs of recovery. Should current public market trends
continue, we hope to see increases in the valuation of these holdings as the
underlying companies' prospects improve and they are able to raise additional
growth financing at higher valuations, go public or are sold to strategic
buyers. During the period, the Fund's venture capital fund investment portfolio
began to see an increase in financing and merger and acquisition activity as the
public markets began to recover and technology spending increased.
Distributions from the fund investments during the period reached approximately
$690,000, as underlying investments were realized due to IPOs and strategic
sales, reflecting improvement in the technology sector. Within this improved
environment, the investment pace of the funds continues to accelerate, with over
$1,398,000 of capital calls made by the fund investments during the semiannual
period (10.7% of unfunded commitments at the beginning of the period).
Respectfully,
/s/ Emily Alejos
Emily Alejos
Chief Investment Officer**
2
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS; THESE RISKS ARE GENERALLY HEIGHTENED FOR EMERGING MARKET
INVESTMENTS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED IN
TELECOMMUNICATIONS, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF
RISK THAN AN INVESTMENT IN OTHER FUNDS THAT SEEK CAPITAL APPRECIATION BY
INVESTING IN A BROADER MIX OF ISSUERS.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS FORWARD-LOOKING
STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND FOREIGN MARKET,
INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT REGULATION AND
THEIR POTENTIAL IMPACT ON THE FUND'S INVESTMENT PORTFOLIO. THESE STATEMENTS ARE
SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS, DEVELOPMENTS AND
REGULATIONS IN THE FUTURE AND THEIR IMPACT ON THE FUND COULD BE MATERIALLY
DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE FUND HAS NO
OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
* The Morgan Stanley Capital International Emerging Markets Index is an
unmanaged index (with no defined investment objective) of emerging-market
equities that includes reinvestment of net dividends, and is the exclusive
property of Morgan Stanley Capital International Inc. Investors cannot invest
directly in an index.
**Emily Alejos, who is a Director of Credit Suisse Asset Management, LLC
("CSAM"), is primarily responsible for management of the Fund's assets. Ms.
Alejos joined CSAM in 1997 from Bankers Trust, where she was an emerging markets
portfolio manager. Previously, she focused on Latin American equities at G.T.
Capital Management in San Francisco. Ms. Alejos is Chief Investment Officer of
the Fund and the Brazilian Equity Fund, Inc. and Co-Chief Investment Officer of
the Latin American Equity Fund, Inc. She is also an Investment Officer of The
Chile Fund, Inc.
3
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
PORTFOLIO SUMMARY - AS OF MAY 31, 2004 (UNAUDITED)
[CHART]
SECTOR ALLOCATION
AS A PERCENT OF NET ASSETS
5/31/2004 11/30/2003
Cellular Telecommunications 34.02% 0.3714
Computers 0.00% 0.0179
Diversified Operations 0.00% 0.0158
Electric-Integrated 0.00% 0.0298
Electric Products - Miscellaneous 2.75% 0
Electronic Components/Semiconductors 0.00% 0.0383
Internet Services/Software 4.80% 0.0376
Telecommunications 22.47% 0.1287
Telephone-Integrated 18.41% 0.2028
Venture Capital 14.52% 0.1307
Other 2.12% 0.0221
Cash & Other Assets 0.91% 0.0049
[CHART]
GEOGRAPHIC ASSET BREAKDOWN
AS A PERCENT OF NET ASSETS
5/31/2004 11/30/2003
Africa 7.53% 5.51%
Asia 38.08% 45.78%
Europe 1.01% 0.00%
Latin America 33.91% 29.53%
Middle East 8.70% 10.33%
North America 2.78% 1.59%
Global 7.08% 6.77%
Cash & Other Assets 0.91% 0.49%
4
[CHART]
SUMMARY OF SECURITIES BY COUNTRY/REGION
AS A PERCENT OF NET ASSETS
5/31/2004 11/30/2003
ASIA 2.72% 3.56%
BRAZIL 6.44% 8.12%
CHINA 5.53% 6.80%
INDIA 2.19% 0.84%
INDONESIA 4.30% 2.54%
ISRAEL 8.70% 9.57%
MEXICO 21.74% 18.06%
RUSSIA 10.20% 9.76%
SOUTH AFRICA 7.53% 5.51%
SOUTH KOREA 9.06% 13.21%
TAIWAN 0.00% 5.62%
UNITED STATES 2.78% 1.59%
GLOBAL 7.08% 6.77%
OTHER 10.82% 7.56%
TOP 10 HOLDINGS, BY ISSUER
PERCENT OF
HOLDING SECTOR COUNTRY/REGION NET ASSETS
-----------------------------------------------------------------------------------------------------
1. America Movil, S.A. de C.V. Cellular Telecommunications Mexico 15.9
2. Emerging Markets Ventures I, L.P. Venture Capital Global 6.1
3. Telefonos de Mexico, S.A. de C.V. Telephone-Integrated Mexico 5.9
4. China Telecom Corp. Ltd. Telecommunications China 5.5
5. AO VimpelCom Cellular Telecommunications Russia 5.2
6. MTN Group Ltd. Cellular Telecommunications South Africa 4.9
7. NCsoft Corp. Internet Software South Korea 3.4
8. KT Freetel Co., Ltd. Cellular Telecommunications South Korea 2.9
9. LG Electronics Inc. Electric Products-Miscellaneous South Korea 2.8
10. Mobile Telesystems Cellular Telecommunications Russia 2.7
5
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS - MAY 31, 2004 (UNAUDITED)
NO. OF
DESCRIPTION SHARES/UNITS VALUE
----------------------------------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-99.09%
EQUITY OR EQUITY-LINKED SECURITIES OF
TELECOMMUNICATION COMPANIES IN EMERGING
COUNTRIES-96.19%
ARGENTINA-1.04%
Telecom Argentina S.A., ADR+
(Cost $1,053,380) 98,200 $ 831,754
---------------
ASIA-2.72%
Nirvana Capital Ltd.+#* 42,000 21,691
TVG Asian Communications
Fund II, L.P.+@# 3,008,374 2,162,476
---------------
TOTAL ASIA (Cost $3,198,670) 2,184,167
---------------
BRAZIL-6.44%
Celular CRT Participacoes
S.A., PNA 1,741,000 276,403
Tele Norte Leste
Participacoes S.A. 105,100,000 1,033,025
Tele Norte Leste Participacoes
S.A., ADR 112,600 1,274,632
Telecomunicacoes de Sao Paulo
S.A., PN 102,900,000 1,377,977
Telemig Celular Participacoes
S.A., PN 300,000,000 426,912
Telesp Celular Participacoes
S.A., ADR+ 110,800 781,140
---------------
TOTAL BRAZIL (Cost $5,840,377) 5,170,089
---------------
CHILE-1.07%
Empresa Nacional de
Telecomunicaciones S.A.
(Cost $867,602) 150,000 856,465
---------------
CHINA-5.53%
China Telecom Corp. Ltd. 9,541,000 2,999,198
China Telecom Corp. Ltd., ADR 46,000 1,437,960
---------------
TOTAL CHINA (Cost $4,018,559) 4,437,158
---------------
HUNGARY-1.01%
Magyar Tavkozlesi Rt
(Cost $802,670) 208,300 $ 808,954
---------------
INDIA-2.19%
Bharti Tele-Ventures Ltd.+ 335,000 1,088,621
Mahanagar Telephone Nigam
Ltd., ADR 113,900 664,037
The India Media, Internet and
Communications Fund Ltd.+* 37,694 2,639
---------------
TOTAL INDIA (Cost $1,475,387) 1,755,297
---------------
INDONESIA-4.30%
PT Indonesian Satellite Corp.+ 4,085,000 1,750,714
PT Telekomunikasi Indonesia 2,136,000 1,704,194
---------------
TOTAL INDONESIA (Cost $3,477,251) 3,454,908
---------------
ISRAEL-8.58%
BPW Israel Ventures LLC+@# 1,465,598 979,481
Concord Ventures
Fund II, L.P.+@# 3,400,000 1,310,737
Formula Ventures L.P.+@# 1,467,094 242,511
Giza GE Venture
Fund III, L.P.+@# 1,870,000 1,010,829
K.T. Concord Venture
Fund L.P.+@ 2,000,000 1,049,978
Lynx Photonic Networks+* 375,394 781,378
Lynx Series E+* 493,000 498,488
Neurone Ventures II, L.P.+@# 405,000 193,310
SVE Star Ventures Enterprises
GmbH & Co. No. IX KG+@# 1,000,000 499,450
Walden-Israel
Ventures III, L.P.+@# 492,938 327,463
---------------
TOTAL ISRAEL (Cost $10,427,806) 6,893,625
---------------
LATIN AMERICA-1.44%
J.P. Morgan Latin America Capital
Partners (Cayman), L.P.+@ 798,055 694,084
J.P. Morgan Latin America Capital
Partners (Delaware), L.P.+@# 1,283,041 460,856
---------------
TOTAL LATIN AMERICA (Cost $1,533,260) 1,154,940
---------------
See accompanying notes to financial statements.
6
NO. OF
DESCRIPTION SHARES/UNITS VALUE
----------------------------------------------------------------------------
MALAYSIA-3.38%
Astro All Asia Networks PLC+ 831,500 $ 1,072,197
Telekom Malaysia Berhad 638,100 1,645,626
---------------
TOTAL MALAYSIA (Cost $2,648,954) 2,717,823
---------------
MEXICO-21.74%
America Movil, S.A. de C.V.,
Series L, ADR 363,400 12,737,170
Telefonos de Mexico, S.A. de
C.V., Class L, ADR 140,300 4,719,692
---------------
TOTAL MEXICO (Cost $11,798,128) 17,456,862
---------------
RUSSIA-10.21%
AO VimpelCom, ADR+ 44,900 4,142,025
Independent Network Television,
Series II+@ 1,000,000 500,000
Mobile Telesystems, ADR 18,500 2,171,900
Uralsvyasinform, ADR+ 180,000 1,389,600
---------------
TOTAL RUSSIA (Cost $5,060,875) 8,203,525
---------------
SOUTH AFRICA-7.53%
MTN Group Ltd.+ 867,000 3,912,479
Telkom South Africa Ltd. 176,160 2,136,092
---------------
TOTAL SOUTH AFRICA (Cost $4,029,815) 6,048,571
---------------
SOUTH KOREA-9.06%
KT Freetel Co., Ltd. 140,500 2,315,636
LG Electronics Inc. 38,000 2,205,073
NCsoft Corp.+ 33,400 2,752,393
---------------
TOTAL SOUTH KOREA (Cost $6,519,465) 7,273,102
---------------
THAILAND-0.69%
Advanced Info Service Public
Co., Ltd. 254,100 557,429
TelecomAsia Corp. Public Co.
Ltd., Foreign Registered,
Warrants (expiring 04/03/08) 1,717,483 2
---------------
TOTAL THAILAND (Cost $365,268) 557,431
---------------
VENEZUELA-2.18%
Compania Anonima Nacional
Telefonos de Venezuela, ADR
(Cost $1,390,188) 92,200 1,749,956
---------------
GLOBAL-7.08%
Emerging Markets
Ventures I, L.P.+@# 7,111,132 $ 4,895,588
International Wireless
Communications Holdings
Corp.+@ 15,092 0
TeleSoft Partners L.P.+@ 1,250,000 212,763
TeleSoft Partners II QP, L.P.+@# 1,260,000 577,962
---------------
TOTAL GLOBAL (Cost $7,386,466) 5,686,313
---------------
TOTAL EMERGING COUNTRIES
(Cost $71,894,121) 77,240,940
---------------
EQUITY SECURITIES OF TELECOMMUNICATION
COMPANIES IN DEVELOPED COUNTRIES-2.78%
UNITED STATES-2.78%
Technology Crossover
Ventures IV, L.P.+@# 1,526,800 1,099,125
UTStarcom, Inc.+ 36,500 1,135,698
---------------
TOTAL DEVELOPED COUNTRIES
(Cost $2,227,627) 2,234,823
---------------
EQUITY SECURITES OF COMPANIES PROVIDING
OTHER ESSENTIAL SERVICES IN THE
DEVELOPMENT OF AN EMERGING COUNTRY'S
INFRASTRUCTURE-0.12%
ARGENTINA-0.00%
Exxel Capital Partners V, L.P.+@
(Cost $539,966) 1,897,761 0
---------------
CANADA-0.00%
Officeland Inc., PNA+*(a) 168,067 0
Officeland Inc., PNC+*(b) 133,654 0
---------------
TOTAL CANADA (Cost $638,256) 0
---------------
ISRAEL-0.12%
The Renaissance Fund LDC+@
(Cost $485,495) 160 99,286
---------------
TOTAL OTHER ESSENTIAL SERVICES
(Cost $1,663,717) 99,286
---------------
TOTAL EQUITY OR EQUITY-LINKED
SECURITIES (Cost $75,785,465) 79,575,049
---------------
See accompanying notes to financial statements.
7
PRINCIPAL
DESCRIPTION AMOUNT (000'S) VALUE
----------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-2.46%
GRAND CAYMAN-1.07%
Brown Brothers Harriman &
Co., overnight deposit, 0.24%,
06/01/04** (Cost $858,000) $ 858 $ 858,000
---------------
UNITED STATES-1.39%
Bear, Stearns & Co. Inc.,
repurchase agreement,
(Agreement dated 05/28/04 to
be repurchased at $1,058,625),
1.0625%, 06/01/04*** 1,059 1,058,500
Bear, Stearns & Co. Inc.,
repurchase agreement,
(Agreement dated 05/28/04 to
be repurchased at $56,130),
0.5312%, 06/01/04*** 56 56,126
---------------
TOTAL UNITED STATES
(Cost $1,114,626) 1,114,626
---------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,972,626) 1,972,626
---------------
TOTAL INVESTMENTS-101.55%
(Cost $77,758,091) (Notes A, D, F) 81,547,675
---------------
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS-(1.55)% (1,239,889)
---------------
NET ASSETS-100.00% $ 80,307,786
===============
+ Security is non-income producing.
@ Restricted security, not readily marketable; security is valued at fair
value as determined in good faith by the Board of Directors. (See Notes A
and G.)
# As of May 31, 2004, the Fund has committed to investing additional capital
as follows: Nirvana Capital Ltd. ($90,000), TVG Asian Communications Fund
II, L.P. ($991,626), BPW Israel Ventures LLC ($834,402), Concord Ventures
Fund II, L.P. ($300,000), Formula Ventures L.P. ($16,453), Giza GE Venture
Fund III, L.P. ($880,000), Neurone Ventures II, L.P. ($345,000), SVE Star
Ventures Enterprises GmbH & Co. No. IX KG ($1,000,000), Walden-Israel
Ventures III, L.P. ($882,063), J.P. Morgan Latin America Capital Partners
(Delaware), L.P. ($3,360,807), Emerging Markets Ventures I, L.P.
($494,434), TeleSoft Partners II QP, L.P. ($1,140,000) and Technology
Crossover Ventures IV, L.P. ($473,200). The aggregate amount of open
commitments for the Fund is $10,807,985.
* Not readily marketable security; security is valued at fair value as
determined in good faith by the Board of Directors. (See Note A.)
** Variable rate account. Rate resets on a daily basis; amounts are available
on the same business day.
*** Represents security purchased with cash collateral received for securities
on loan.
(a) With an additional 134,454 warrants, expiring 04/21/05, with no market
value.
(b) With an additional 133,654 warrants, expiring 04/21/05, with no market
value.
ADR American Depositary Receipts.
PN Preferred Shares.
PNA Preferred Shares, Class A.
PNC Preferred Shares, Class C.
The following is a breakdown of the equity or equity-linked securities portion
of the Fund, by sector classification, as of May 31, 2004.
% OF NET
SECTOR ASSETS
------ --------
Cellular Telecommunications 34.02
Electric Products-Miscellaneous 2.75
Internet Services/Software 4.80
Investment & Holding Companies 0.13
Multimedia 1.34
Technology 0.03
Telecommunications 22.47
Telephone-Integrated 18.41
Television 0.62
Venture Capital 14.52
-----
99.09
=====
See accompanying notes to financial statements.
8
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - MAY 31, 2004 (UNAUDITED)
ASSETS
Investments, at value, including collateral for securities on loan of $1,114,626 (1)
(Cost $77,758,091) (Notes A, D, F) $ 81,547,675
Cash (including $7,603 of foreign currencies with a cost of $7,012) 45,439
Receivables:
Investments sold 1,544,507
Dividends 396,340
Prepaid expenses 19,543
----------------
Total Assets 83,553,504
----------------
LIABILITIES
Payables:
Upon return of securities loaned (Note A) 1,114,626
Investments purchased 1,766,213
Investment advisory fee (Note B) 141,305
Directors' fees 12,850
Administration fees (Note B) 8,960
Other accrued expenses 201,764
----------------
Total Liabilities 3,245,718
----------------
NET ASSETS (applicable to 8,900,521 shares of common stock outstanding) (Note C) $ 80,307,786
================
NET ASSETS CONSIST OF
Capital stock, $0.001 par value; 8,900,521 shares issued and outstanding
(100,000,000 shares authorized) $ 8,900
Paid-in capital 168,206,223
Undistributed net investment income 281,067
Accumulated net realized loss on investments and foreign currency related
transactions (91,975,664)
Net unrealized appreciation in value of investments and translation of other
assets and liabilities denominated in foreign currencies 3,787,260
----------------
Net assets applicable to shares outstanding $ 80,307,786
================
NET ASSET VALUE PER SHARE ($80,307,786 DIVIDED BY 8,900,521) $ 9.02
================
MARKET PRICE PER SHARE $ 7.76
================
----------
(1) Includes securities out on loan to brokers with a market value of
$1,191,823.
See accompanying notes to financial statements.
9
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED MAY 31, 2004 (UNAUDITED)
INVESTMENT INCOME
Income (Note A):
Dividends $ 1,108,999
Securities lending 7,498
Interest 1,447
Net investment income allocated from partnerships 19,890
Less: Foreign taxes withheld (116,958)
----------------
Total Investment Income 1,020,876
----------------
Expenses:
Investment advisory fees (Note B) 440,529
Legal fees 73,627
Administration fees (Note B) 54,438
Custodian fees 40,903
Audit fees 31,230
Printing (Note B) 26,927
Directors' fees 20,410
Accounting fees 14,921
NYSE listing fees 11,692
Insurance 10,549
Transfer agent fees 9,596
Miscellaneous 4,987
----------------
Total Expenses 739,809
----------------
Net Investment Income 281,067
----------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY RELATED TRANSACTIONS
Net realized gain/(loss) from:
Investments 4,977,915
Foreign currency related transactions (50,331)
Net change in unrealized appreciation in value of investments and translation
of other assets and liabilities denominated in foreign currencies 2,310,245
----------------
Net realized and unrealized gain on investments and foreign currency related transactions 7,237,829
----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 7,518,896
================
See accompanying notes to financial statements.
10
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE FISCAL YEAR
ENDED MAY 31, 2004 ENDED
(UNAUDITED) NOVEMBER 30, 2003
------------------ -------------------
INCREASE IN NET ASSETS
Operations:
Net investment income/(loss) $ 281,067 $ (871,238)
Net realized gain/(loss) on investments and foreign currency
related transactions 4,927,584 (4,955,106)
Net change in unrealized appreciation/(depreciation) in value of
investments and translation of other assets and liabilities
denominated in foreign currencies 2,310,245 13,788,482
---------------- ----------------
Net increase in net assets resulting from operations 7,518,896 7,962,138
---------------- ----------------
Capital share transactions (Note H):
Cost of 263,700 shares purchased under the share repurchase program (2,110,334) --
---------------- ----------------
Total increase in net assets 5,408,562 7,962,138
---------------- ----------------
NET ASSETS
Beginning of period 74,899,224 66,937,086
---------------- ----------------
End of period $ 80,307,786* $ 74,899,224
================ ================
----------
* Includes undistributed net investment income of $281,067.
See accompanying notes to financial statements.
11
STATEMENT OF CASH FLOWS - FOR THE SIX MONTHS ENDED MAY 31, 2004 (UNAUDITED)
INCREASE IN CASH FROM
Operating Activities:
Investment income received $ 955,734
Partnership distributions received 19,890
Operating expenses paid (641,323)
Purchases of long-term portfolio investments (34,339,529)
Proceeds from disposition of long-term portfolio investments 36,756,688
Net proceeds from disposition of short-term portfolio investments (602,000)
Cost of shares repurchased (2,110,334)
---------------
Net increase in cash from operating activities $ 39,126
Cash at beginning of year 6,313
---------------
Cash at end of year $ 45,439
===============
RECONCILIATION OF NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS TO NET INCREASE IN CASH
FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations $ 7,518,896
Adjustments:
Increase in accrued expenses $ 116,014
Decrease in receivables (45,253)
Increase in prepaid expenses (17,527)
Net increase in cash from investment transactions 1,815,159
Cost of shares repurchased (2,110,334)
Net realized and unrealized gain on investments and foreign currency
related transactions (7,237,829)
---------------
Total adjustments (7,479,770)
---------------
NET INCREASE IN CASH FROM OPERATING ACTIVITIES $ 39,126
===============
See accompanying notes to financial statements.
12
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13
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
FINANCIAL HIGHLIGHTS~
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
FOR THE FOR THE FISCAL YEARS
SIX MONTHS ENDED
ENDED NOVEMBER 30,
MAY 31, 2004 ----------------------------------------------
(UNAUDITED) 2003 2002 2001
------------ ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 8.17 $ 7.30 $ 8.42 $ 10.35
---------- ---------- ---------- ----------
Net investment income/(loss) 0.03+ (0.10)+ (0.15)^ (0.12)@
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions 0.78+ 0.97 (1.03) (1.88)
---------- ---------- ---------- ----------
Net increase/(decrease) in net assets
resulting from operations 0.81 0.87 (1.18) (2.00)
---------- ---------- ---------- ----------
Dividends and distributions to shareholders:
Net investment income -- -- -- --
Net realized gain on investments and
foreign currency related transactions -- -- -- --
---------- ---------- ---------- ----------
Total dividends and distributions to
shareholders -- -- -- --
---------- ---------- ---------- ----------
Anti-dilutive impact due to capital shares
tendered or repurchased 0.04 -- 0.06 0.07
---------- ---------- ---------- ----------
Net asset value, end of period $ 9.02 $ 8.17 $ 7.30 $ 8.42
========== ========== ========== ==========
Market value, end of period $ 7.76 $ 6.85 $ 6.22 $ 6.88
========== ========== ========== ==========
Total investment return (a) 13.28% 10.13% (9.59)% (10.50)%
========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 80,308 $ 74,899 $ 66,937 $ 90,771
Ratio of expenses to average net assets (b) 1.80%(c) 1.77% 1.90% 1.76%
Ratio of expenses to average net assets,
excluding taxes 1.80%(c) 1.77% 1.77% 1.74%
Ratio of net investment income/(loss) to
average net assets 0.68%(c) (1.33)% (1.89)% (1.18)%
Portfolio turnover rate 45.11% 120.31% 94.89% 82.16%
~ Per share amounts prior to November 3, 2000 have been restated to reflect a
conversion factor of 0.9994 for shares issued in connection with the merger
of The Emerging Markets Infrastructure Fund, Inc. and The Emerging Markets
Telecommunications Fund, Inc.
# Includes a $0.03 per share increase to the Fund's net asset value per share
resulting from the anti-dilutive impact of shares issued pursuant to the
Fund's automatic Dividend Reinvestment Plan in January 1994.
+ Based on average shares outstanding.
@ Based on shares outstanding on November 21, 2001 (prior to the 2001 tender
offer) and November 30, 2001.
^ Based on shares outstanding on November 6, 2002 (prior to the 2002 tender
offer) and November 30, 2002.
(a) Total investment return at market value is based on the changes in market
price of a share during the period and assumes reinvestment of dividends
and distributions, if any, at actual prices pursuant to the Fund's dividend
reinvestment program.
(b) Ratios shown are inclusive of Brazilian transaction and Chilean
repatriation taxes, if any.
(c) Annualized.
See accompanying notes to financial statements.
14
FOR THE
SIX MONTHS
ENDED
NOVEMBER 30,
2000
------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 18.36
----------
Net investment income/(loss) (0.14)+
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions (4.78)
----------
Net increase/(decrease) in net assets
resulting from operations (4.92)
----------
Dividends and distributions to shareholders:
Net investment income --
Net realized gain on investments and
foreign currency related transactions (3.09)
----------
Total dividends and distributions to
shareholders (3.09)
----------
Anti-dilutive impact due to capital shares
tendered or repurchased --
----------
Net asset value, end of period $ 10.35
==========
Market value, end of period $ 7.688
==========
Total investment return (a) (28.46)%
==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 131,325
Ratio of expenses to average net assets (b) 1.91%(c)
Ratio of expenses to average net assets,
excluding taxes 1.91%(c)
Ratio of net investment income/(loss) to
average net assets (1.50)%(c)
Portfolio turnover rate 51.72%
FOR THE FISCAL YEARS ENDED MAY 31,
-----------------------------------------------------------------
2000 1999 1998 1997
---------- ---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 12.13 $ 16.37 $ 21.54 $ 20.95
---------- ---------- ---------- ----------
Net investment income/(loss) (0.20)+ (0.04)+ (0.06) 0.10
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions 6.14 (2.41) (1.40) 2.86
---------- ---------- ---------- ----------
Net increase/(decrease) in net assets
resulting from operations 5.94 (2.45) (1.46) 2.96
---------- ---------- ---------- ----------
Dividends and distributions to shareholders:
Net investment income -- -- (0.09) (0.27)
Net realized gain on investments and
foreign currency related transactions -- (1.96) (3.62) (2.10)
---------- ---------- ---------- ----------
Total dividends and distributions to
shareholders -- (1.96) (3.71) (2.37)
---------- ---------- ---------- ----------
Anti-dilutive impact due to capital shares
tendered or repurchased 0.29 0.17 -- --
---------- ---------- ---------- ----------
Net asset value, end of period $ 18.36 $ 12.13 $ 16.37 $ 21.54
========== ========== ========== ==========
Market value, end of period $ 13.508 $ 9.819 $ 13.008 $ 17.385
========== ========== ========== ==========
Total investment return (a) 37.58% (9.99)% (4.57)% 14.31%
========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 130,300 $ 94,026 $ 138,023 $ 181,627
Ratio of expenses to average net assets (b) 2.24% 2.09% 2.32% 1.90%
Ratio of expenses to average net assets,
excluding taxes 2.04% 2.01% 1.82% 1.82%
Ratio of net investment income/(loss) to
average net assets (1.15)% (0.33)% (0.29)% 0.52%
Portfolio turnover rate 113.75% 179.66% 162.58% 42.14%
FOR THE FISCAL YEARS ENDED MAY 31,
----------------------------------------------
1996 1995 1994
---------- ---------- ----------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 19.21 $ 20.91 $ 14.96
---------- ---------- ----------
Net investment income/(loss) 0.27 0.11 0.13
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions 1.91 0.01 7.03#
---------- ---------- ----------
Net increase/(decrease) in net assets
resulting from operations 2.18 0.12 7.16
---------- ---------- ----------
Dividends and distributions to shareholders:
Net investment income (0.04) (0.04) (0.15)
Net realized gain on investments and
foreign currency related transactions (0.40) (1.78) (1.06)
---------- ---------- ----------
Total dividends and distributions to
shareholders (0.44) (1.82) (1.21)
---------- ---------- ----------
Anti-dilutive impact due to capital shares
tendered or repurchased -- -- --
---------- ---------- ----------
Net asset value, end of period $ 20.95 $ 19.21 $ 20.91
========== ========== ==========
Market value, end of period $ 17.385 $ 17.761 $ 22.764
========== ========== ==========
Total investment return (a) 0.21% (13.94)% 64.74%
========== ========== ==========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 176,628 $ 161,925 $ 176,253
Ratio of expenses to average net assets (b) 1.77% 1.89% 1.81%
Ratio of expenses to average net assets,
excluding taxes -- -- --
Ratio of net investment income/(loss) to
average net assets 1.40% 0.53% 0.63%
Portfolio turnover rate 27.71% 14.29% 43.98%
15
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Emerging Markets Telecommunications Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a closed-end,
non-diversified management investment company.
USE OF ESTIMATES: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
SECURITY VALUATION: The net asset value of the Fund is determined daily as of
the close of regular trading on the New York Stock Exchange, Inc. (the
"Exchange") on each day the Exchange is open for business. The Fund's equity
investments are valued at market value, which is generally determined using the
closing price on the exchange or market on which the security is primarily
traded at the time of valuation (the "Valuation Time"). If no sales are
reported, equity investments are generally valued at the most recent bid
quotation as of the Valuation Time or at the lowest ask quotation in the case of
a short sale of securities. Debt securities with a remaining maturity greater
than 60 days are valued in accordance with the price supplied by a pricing
service, which may use a matrix, formula or other objective method that takes
into consideration market indices, yield curves and other specific adjustments.
Debt obligations that will mature in 60 days or less are valued on the basis of
amortized cost which approximates market value, unless the Board of Directors
determines that using this method would not reflect an investment's value.
Securities and other assets for which market quotations are not readily
available or whose values have been materially affected by events occurring
before the Fund's Valuation Time, but after the close of the securities' primary
market, are valued at fair value as determined in good faith by, or under the
direction of, the Board of Directors under procedures established by the Board
of Directors. The Fund may utilize a service provided by an independent third
party which has been approved by the Board of Directors to fair value certain
Fund portfolio securities. At May 31, 2004, the Fund held 21.94% of its net
assets in securities valued at fair value as determined in good faith by the
Board of Directors with an aggregate cost of $26,241,204 and fair value of
$17,620,094. Although these securities may be resold in privately negotiated
transactions, the prices realized on such sales could differ from the prices
originally paid by the Fund or the current carrying values, and the difference
could be material.
SHORT-TERM INVESTMENT: The Fund sweeps available cash into a short-term deposit
issued by Brown Brothers Harriman & Co., the Fund's custodian. The short-term
time deposit is a variable rate account classified as a short-term investment.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on a trade date basis. The cost of investments sold is determined
by use of the specific identification method for both financial reporting and
U.S. income tax purposes. Interest income is accrued as earned; dividend income
is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. income or excise taxes as it is the Fund's
intention to continue to qualify as a regulated investment company and to make
the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. income and excise taxes.
Income received by the Fund from sources within emerging countries and other
foreign countries may
16
be subject to withholding and other taxes imposed by such countries.
Under certain circumstances the Fund may be subject to a maximum of 36% Israeli
capital gains tax on gains derived from the sale of certain Israeli investments.
For the six months ended May 31, 2004, the Fund did not incur such expense.
The Fund accrues foreign taxes on realized gains in an amount equal to what the
Fund would owe if the securities were sold on the valuation date as a liability
and reduction of realized/unrealized gains. Taxes on foreign income are recorded
when the related income is recorded.
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
valuation date rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to changes in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances.
The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such foreign currency related transactions are
treated as ordinary income for U.S. income tax purposes.
Net unrealized currency gains or losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected as
a component of net unrealized appreciation/(depreciation) in value of
investments and translation of other assets and liabilities denominated in
foreign currencies.
Net realized foreign exchange gains or losses represent foreign exchange gains
and losses from sales and maturities of debt securities, transactions in foreign
currencies and forward foreign currency contracts, exchange gains or losses
realized between the trade date and settlement date on security transactions,
and the difference between the amounts of interest and dividends recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received.
SECURITIES LENDING: The market value of securities out on loan to brokers at May
31, 2004, was $1,191,823, for which the Fund has received cash as collateral of
$1,114,626. Such cash collateral was reinvested into an overnight repurchase
agreement with Bear, Stearns & Co. Inc., which was in turn collateralized by
U.S. Government securities with a value of $1,150,001. Security loans are
required at all times to have collateral at least equal to 102% of the market
value of the securities on loan; however, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders, substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net
17
realized short-term capital losses, including capital loss carryovers, if any.
An additional distribution may be made to the extent necessary to avoid the
payment of a 4% U.S. federal excise tax. Dividends and distributions to
shareholders are recorded by the Fund on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
income tax purposes due to U.S. generally accepted accounting principles/tax
differences in the character of income and expense recognition.
PARTNERSHIP ACCOUNTING POLICY: The Fund records its pro-rata share of the
income/(loss) and capital gains/(losses) allocated from the underlying
partnerships and adjusts the cost of the underlying partnerships accordingly.
These amounts are included in the Fund's Statement of Operations.
OTHER: Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if there is a deterioration in a country's balance of
payments or for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad. Amounts repatriated prior to the end of
specified periods may be subject to taxes as imposed by a foreign country.
The emerging countries' securities markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the securities of many companies in emerging countries may
be held by a limited number of persons, which may limit the number of securities
available for investment by the Fund. The limited liquidity of emerging country
securities markets may also affect the Fund's ability to acquire or dispose of
securities at the price and time it wishes to do so.
The Fund is sector concentrated and therefore invests a high percentage of its
assets in the telecommunications sector. As a result, the financial, economic,
business and political developments in a particular sector of the market,
positive or negative, have a greater impact on the Fund's net asset value and
will cause its shares to fluctuate more than if the Fund did not concentrate its
investments in a particular sector. Under normal market conditions, it will
invest not less than 80% of its net assets in a group of related industries
within the telecommunications sector of the market.
The Fund, subject to local investment limitations, may invest up to 25% of its
assets (at the time of commitment) in illiquid equity securities, including
securities of private equity funds (whether in corporate or partnership form)
that invest primarily in the emerging markets. When investing through another
investment fund, the Fund will bear its proportionate share of the expenses
incurred by that fund, including management fees. Such securities are expected
to be illiquid which may involve a high degree of business and financial risk
and may result in substantial losses. Because of the current absence of any
liquid trading market for these investments, the Fund may take longer to
liquidate these positions than would be the case for publicly traded securities.
Although these securities may be resold in privately negotiated transactions,
the prices realized on such sales could be substantially less than those
originally paid by the Fund or the current carrying values and these differences
could be material. Further, companies whose securities are not publicly traded
may not be subject to the disclosures and other investor protection requirements
applicable to companies whose securities are publicly traded.
The Fund may enter into repurchase agreements ("repos") on U.S. Government
securities with primary government securities dealers recognized by the Federal
Reserve Bank of New York and member banks of the Federal Reserve System and on
securities issued
18
by the governments of foreign countries, their instrumentalities and with
creditworthy parties in accordance with established procedures. Repos are
contracts under which the buyer of a security simultaneously buys and commits to
resell the security to the seller at an agreed upon price and date. Repos are
deposited with the Fund's custodian and, pursuant to the terms of the repurchase
agreement, the collateral must have an aggregate market value greater than or
equal to the repurchase price plus accrued interest at all times. If the value
of the underlying securities fall below the value of the repurchase price plus
accrued interest, the Fund will require the seller to deposit additional
collateral by the next business day. If the request for additional collateral is
not met, or the seller defaults on its repurchase obligation, the Fund maintains
the right to sell the underlying securities at market value and may claim any
resulting loss against the seller; collectibility of such claims may be limited.
At May 31, 2004, the Fund had no such agreements, other than the cash collateral
received that was reinvested in a repo under the Fund's securities lending
program.
NOTE B. AGREEMENTS
Credit Suisse Asset Management, LLC ("CSAM"), serves as the Fund's investment
adviser with respect to all investments. CSAM receives as compensation for its
advisory services from the Fund, an annual fee, calculated weekly and paid
quarterly, equal to 1.25% of the first $100 million of the Fund's average weekly
market value or net assets (whichever is lower), 1.125% of the next $100 million
and 1.00% of amounts in excess of $200 million. For the six months ended May 31,
2004, CSAM earned $440,529 for advisory services. CSAM also provides certain
administrative services to the Fund and is reimbursed by the Fund for costs
incurred on behalf of the Fund (up to $20,000 per annum). For the six months
ended May 31, 2004, CSAM was reimbursed $5,927 for administrative services
rendered to the Fund.
Credit Suisse Asset Management Limited (CSAM U.K.) ("CSAM Ltd. U.K.") and Credit
Suisse Asset Management Limited (CSAM Australia) ("CSAM Ltd. Australia"),
affiliates of CSAM, are sub-investment advisers to the Fund. CSAM Ltd. U.K. and
CSAM Ltd. Australia's sub-investment advisory fees are paid by CSAM out of
CSAM's net investment advisory fee and are not paid by the Fund.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a monthly fee that is computed weekly at an
annual rate of 0.12% of the Fund's average weekly net assets. For the six months
ended May 31, 2004, BSFM earned $48,511 for administrative services.
BankBoston, N.A., Sao Paulo ("BBNA") serves as the Fund's administrator with
respect to its Brazilian investments. BBNA is paid for its services out of the
custody fee payable to Brown Brothers Harriman & Co., the Fund's accounting
agent and custodian, a quarterly fee based on an annual rate of 0.10% of average
month end Brazilian net assets of the Fund.
Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the
Fund to provide certain financial printing services. For the six months ended
May 31, 2004, Merrill was paid $15,239 for its services to the Fund.
The Independent Directors receive fifty percent (50%) of their annual retainer
in the form of shares purchased by the Fund's transfer agent in the open market.
Directors as a group own less than 1% of the Fund's outstanding shares.
NOTE C. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001 par value. Of the 8,900,521 shares outstanding at May 31, 2004, CSAM
owned 14,333 shares.
19
NOTE D. INVESTMENT IN SECURITIES
For the six months ended May 31, 2004 purchases and sales of securities, other
than short-term investments, were $36,105,744 and $38,224,460, respectively.
NOTE E. CREDIT FACILITY
The Fund, together with other funds/portfolios advised by CSAM (collectively,
the "Participating Funds"), participates in a $75 million committed, unsecured,
line of credit facility ("Credit Facility") with Deutsche Bank, A.G. as
administrative agent and syndication agent and State Street Bank and Trust
Company as operations agent for temporary or emergency purposes. Under the terms
of the Credit Facility, the Participating Funds pay an aggregate commitment fee
at a rate of 0.10% per annum on the average unused amount of the Credit
Facility, which is allocated among the Participating Funds in such manner as is
determined by the governing Boards of the Participating Funds. In addition, the
Participating Funds pay interest on borrowings at the Federal Funds rate plus
0.50%. During the six months ended May 31, 2004, the Fund had no borrowings
under the Credit Facility.
NOTE F. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP. These differences are
primarily due to differing treatments of foreign currency transactions, losses
deferred due to wash sales and Post-October losses (as later defined), and
excise tax regulations.
Under current tax law, certain capital losses realized after October 31 within a
taxable year may be deferred and treated as occurring on the first day of the
following tax year ("Post-October losses"). For the tax period ended November
30, 2003, the Fund incurred and elected to defer net realized foreign currency
losses of $15,078.
At November 30, 2003, the Fund had a capital loss carryforward for U.S. federal
income tax purposes of $96,583,711 of which $20,972,304 expires in 2006. This
amount is subject to Internal Revenue Sections limitations. Capital loss
carryforwards of $5,308,276, $47,300,891, $17,356,479 and $5,645,761 expire in
2007, 2009, 2010 and 2011, respectively. It is uncertain whether the Fund will
be able to realize the benefits before they expire.
At May 31, 2004, the identified cost for federal income tax purposes, as well as
the gross unrealized appreciation from investments for those securities having
an excess of value over cost, gross unrealized depreciation from investments for
those securities having an excess of cost over value and the net unrealized
appreciation from investments were $78,111,093, $14,775,237, $(11,338,655) and
$3,436,582, respectively.
20
NOTE G. RESTRICTED SECURITIES
Certain of the Fund's investments are restricted as to resale and are valued at
fair value as determined in good faith by the Board of Directors under
procedures established by the Board of Directors in the absence of readily
ascertainable market values. The table below shows the number of units/shares
held, the acquisition dates, aggregate costs, fair value as of May 31, 2004, per
unit/share of such securities and percent of net assets which the securities
comprise. The final column represents the distributions received from each
investment.
NUMBER FAIR PERCENT
OF ACQUISITION VALUE AT VALUE PER OF NET DISTRIBUTIONS
SECURITY UNITS/SHARES DATE(S) COST 05/31/04 UNIT/SHARE ASSETS RECEIVED
-------- ------------ ------------------- ------------ ------------ ---------- ------- -------------
BPW Israel Ventures LLC 1,156,470 10/05/00 - 06/30/03 $ 957,537 $ 772,886 $ 0.67 0.96
17,250 12/26/03 17,250 11,528 0.67 0.02
291,878 02/11/04 291,878 195,067 0.67 0.24
--------- ------------ ------------ ---- ------------
1,465,598 1,266,665 979,481 1.22 --
--------- ------------ ------------ ---- ------------
Concord Ventures Fund II, L.P. 3,280,000 03/29/00 - 07/15/03 2,639,696 1,264,476 0.39 1.57
120,000 03/02/04 120,000 46,261 0.39 0.06
--------- ------------ ------------ ---- ------------
3,400,000 2,759,696 1,310,737 1.63 --
--------- ------------ ------------ ---- ------------
Emerging Markets Ventures
I, L.P. 7,075,037 01/22/98 - 06/30/03 5,306,621 4,870,739 0.69 6.07
36,095 12/30/03 36,095 24,849 0.69 0.03
--------- ------------ ------------ ---- ------------
7,111,132 5,342,716 4,895,588 6.10 $ 1,169,680
--------- ------------ ------------ ---- ------------
Exxel Capital Partners V, L.P. 1,897,761 05/11/98 - 12/03/98 539,966 0 0.00 0.00 205,185
--------- ------------ ------------ ---- ------------
Formula Ventures L.P. 1,467,094 08/06/99 - 07/24/03 561,945 242,511 0.17 0.30 292,476
--------- ------------ ------------ ---- ------------
Giza GE Venture Fund III, L.P. 1,540,000 01/31/00 - 04/30/03 1,232,254 832,447 0.54 1.04
165,000 12/10/03 165,000 89,191 0.54 0.11
165,000 03/15/2004 165,000 89,191 0.54 0.11
--------- ------------ ------------ ---- ------------
1,870,000 1,562,254 1,010,829 1.26 64,135
--------- ------------ ------------ ---- ------------
Independent Network
Television, Series II 1,000,000 07/06/98 1,000,000 500,000 0.50 0.62 --
--------- ------------ ------------ ---- ------------
International Wireless
Communications Holdings
Corp. 15,092 12/08/97 414,568 0 0.00 0.00 10,564
--------- ------------ ------------ ---- -------------
J.P. Morgan Latin America
Capital Partners
(Cayman), L.P. 798,055 04/10/00 - 05/28/03 782,440 694,084 0.87 0.87 28
--------- ------------ ------------ ---- ------------
J.P. Morgan Latin America
Capital Partners
(Delaware), L.P. 1,188,453 04/10/00 - 04/17/03 695,468 426,881 0.36 0.53
94,588 03/26/2004 55,352 33,975 0.36 0.04
--------- ------------ ------------ ---- ------------
1,283,041 750,820 460,856 0.57 594,742
--------- ------------ ------------ ---- ------------
K.T. Concord Venture Fund L.P. 2,000,000 12/08/97 - 09/29/00 1,866,215 1,049,978 0.52 1.31 659,447
--------- ------------ ------------ ---- ------------
Neurone Ventures II, L.P. 337,500 11/24/00 - 06/23/03 259,715 161,092 0.48 0.20
67,500 05/26/04 67,500 32,218 0.48 0.04
--------- ------------ ------------ ---- ------------
405,000 327,215 193,310 0.24 27,699
--------- ------------ ------------ ---- ------------
21
NUMBER FAIR PERCENT
OF ACQUISITION VALUE AT VALUE PER OF NET DISTRIBUTIONS
SECURITY UNITS/SHARES DATE(S) COST 05/31/04 UNIT/SHARE ASSETS RECEIVED
-------- ------------ ------------------- ------------ ------------ ---------- ------- -------------
The Renaissance Fund LDC 160 03/30/94 - 03/21/97 $ 485,495 $ 99,286 $ 620.54 0.12 $ 1,497,612
--------- ------------ ------------ ---- ------------
SVE Star Ventures Enterprises
GmbH & Co. No. IX KG 1,000,000 12/21/00 - 08/18/03 807,059 499,450 0.50 0.62 --
--------- ------------ ------------ ---- ------------
Technology Crossover Ventures
IV, L.P. 1,440,400 03/08/00 - 11/14/03 897,138 1,036,927 0.72 1.29
86,400 01/15/04 84,675 62,198 0.72 0.08
--------- ------------ ------------ ---- ------------
1,526,800 981,813 1,099,125 1.37 591,272
--------- ------------ ------------ ---- ------------
TeleSoft Partners L.P. 1,250,000 07/22/97 - 06/07/01 614,980 212,763 0.17 0.27 7,180,939
--------- ------------ ------------ ---- ------------
TeleSoft Partners II QP, L.P. 1,140,000 07/14/00 - 12/12/02 894,201 522,918 0.46 0.65
120,000 12/08/03 120,000 55,044 0.46 0.07
--------- ------------ ------------ ---- ------------
1,260,000 1,014,201 577,962 0.72 113,986
--------- ------------ ------------ ---- ------------
TVG Asian Communications
Fund II, L.P. 2,930,599 06/07/00 - 11/07/03 2,700,895 2,106,570 0.72 2.62
77,775 12/31/03 77,775 55,906 0.72 0.07
--------- ------------ ------------ ---- ------------
3,008,374 2,778,670 2,162,476 2.69 91,040
--------- ------------ ------------ ---- ------------
Walden-Israel Ventures III,
L.P. 340,313 02/23/01 - 10/09/03 263,688 226,073 0.66 0.28
83,875 02/02/04 83,875 55,719 0.66 0.07
68,750 05/27/04 68,750 45,671 0.66 0.06
--------- ------------ ------------ ---- ------------
492,938 416,313 327,463 0.41 --
--------- ------------ ------------ ---- ------------
Total $ 24,273,031 $ 16,315,899 20.32 $ 12,498,805
============ ============ ===== ============
The Fund may incur certain costs in connection with the disposition of the above
securities.
NOTE H. SHARE REPURCHASE PROGRAM
The Board of Directors of the Fund, at a meeting held on November 21, 2003,
authorized management to make open market purchases from time to time in an
amount up to 10% of the Fund's outstanding shares whenever the Fund's shares are
trading at a discount to net asset value of 15% or more. The Board has
instructed management to report repurchase activity to it regularly, and to post
the number of shares repurchased on the Fund's website on a monthly basis. For
the six months ended May 31, 2004, the Fund repurchased 263,700 of its shares
for a total cost of $2,110,334 at a weighted discount of 13.66% from net asset
value. The Fund had no repurchases for the fiscal year ended November 30, 2003.
The Board at the same time determined to suspend the Fund's annual self-tender
program that had been announced in June of 2000. Open market purchases may also
be made within the discretion of management if the discount is less than 15%. In
November 2002, the Fund completed a tender offer for 15% of its outstanding
shares (1,617,215 shares) at a price of $6.53 per share.
22
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
On March 25, 2004, the Annual Meeting (the "Meeting") of Shareholders of The
Emerging Markets Telecommunications Fund, Inc. (the "Fund") was held and the
following matters were voted upon:
(1) To approve a Sub-Investment Advisory Agreement among the Fund, Credit
Suisse Asset Management, LLC ("CSAM") and Credit Suisse Asset Management
Limited.
FOR AGAINST ABSTAIN
--------- --------- -------
6,785,304 448,128 89,133
(2) To re-elect two directors to the Board of Directors of the Fund.
NAME OF DIRECTOR FOR WITHHELD
---------------- --------- --------
Enrique R. Arzac 6,877,651 444,914
James J. Cattano 6,879,403 443,162
(3) The shareholder proposal to terminate the investment advisory agreement
between the Fund and CSAM was not properly brought before the Meeting, as
neither the shareholder proponent, nor his qualified representative was
present at the Meeting to present the proposal. Therefore, no vote was
taken on such proposal. Based on the proxies received by the Fund prior to
the Meeting, the proposal would not have received the requisite vote for
approval had it been presented to the Meeting.
23
IMPORTANT PRIVACY CHOICES FOR CONSUMERS (UNAUDITED)
We are committed to maintaining the privacy of every current and prospective
customer. We recognize that you entrust important personal information to us,
and we wish to assure you that we take seriously our responsibilities in
protecting and safeguarding this information.
In connection with making available investment products and services to current
and potential customers, we may obtain nonpublic personal information about you.
This information may include your name, address, e-mail address, social security
number, account number, assets, income, financial situation, transaction history
and other personal information.
We may collect nonpublic information about you from the following sources:
- Information we receive on applications, forms, questionnaires, web sites,
agreements or in the course of establishing or maintaining a customer
relationship; and
- Information about your transactions with us, our affiliates, or others.
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except with your consent or as otherwise permitted
by law.
RESTRICT INFORMATION SHARING WITH AFFILIATES: In cases where we believe that
additional products and services may be of interest to you, we may share the
information described above with our affiliates unless you say "No."
/ / No, please do not share personal and financial information with your
affiliated companies. [If you check this box, you must send this notice
back to us with your name, address and account number to The Emerging
Markets Telecommunications Fund, Inc., c/o Credit Suisse Asset Management,
LLC, 466 Lexington Avenue, New York, New York 10017.]
We may also disclose this information to firms that perform services on our
behalf. These agents and service providers are required to treat the information
confidentially and use it only for the purpose for which it is provided.
We restrict access to nonpublic personal information about you to those
employees, agents or other parties who need to know that information to provide
products or services to you or in connection with your investments with or
through us. We maintain physical, electronic and procedural safeguards that
comply with federal standards to guard your nonpublic personal information.
NOTE: THIS NOTICE IS PROVIDED TO CLIENTS AND PROSPECTIVE CLIENTS OF CREDIT
SUISSE ASSET MANAGEMENT, LLC ("CSAM"), CSAM CAPITAL INC., AND CREDIT SUISSE
ASSET MANAGEMENT SECURITIES, INC., AND SHAREHOLDERS AND PROSPECTIVE SHAREHOLDERS
IN CSAM SPONSORED AND ADVISED INVESTMENT COMPANIES, INCLUDING CREDIT SUISSE
FUNDS, AND OTHER CONSUMERS AND CUSTOMERS, AS APPLICABLE. THIS NOTICE IS NOT
INTENDED TO BE INCORPORATED IN ANY OFFERING MATERIALS BUT IS MERELY A STATEMENT
OF OUR CURRENT PRIVACY POLICY, AND MAY BE AMENDED FROM TIME TO TIME UPON NOTICE
TO YOU. THIS NOTICE IS DATED AS OF MAY 19, 2004.
24
DESCRIPTION OF INVESTLINK(SM) PROGRAM (UNAUDITED)
The InvestLink(SM) Program is sponsored and administered by EquiServe, L.P., not
by The Emerging Markets Telecommunications Fund, Inc. (the "Fund"). EquiServe,
L.P., will act as program administrator (the "Program Administrator") of the
InvestLink(SM) Program (the "Program"). The purpose of the Program is to provide
existing shareholders with a simple and convenient way to invest additional
funds and reinvest dividends in shares of the Fund's common stock ("Shares") at
prevailing prices, with reduced brokerage commissions and fees.
In order to participate in the Program, you must be a registered holder of at
least one Share of stock of the Fund. Purchases of Shares with funds from a
participant's cash payment or automatic account deduction will begin on the next
day on which funds are invested. All cash payments must be drawn on a U.S. bank
and payable in U.S. dollars. Checks must be made payable to EquiServe. If a
participant selects the dividend reinvestment option, automatic investment of
dividends generally will begin with the next dividend payable after the Program
Administrator receives his enrollment form. Once in the Program, a person will
remain a participant until he terminates his participation or sells all Shares
held in his Program account, or his account is terminated by the Program
Administrator. A participant may change his investment options at any time by
requesting a new enrollment form and returning it to the Program Administrator.
A participant will be assessed certain charges in connection with his
participation in the Program. All optional cash deposit investments will be
subject to a service charge. Sales processed through the Program will have a
service fee deducted from the net proceeds, after brokerage commissions. In
addition to the transaction charges outlined above, participants will be
assessed per share processing fees (which include brokerage commissions.)
Participants will not be charged any fee for reinvesting dividends.
The number of Shares to be purchased for a participant depends on the amount of
his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
investment date for cash payments is the 25th day of each month (or the next
trading day if the 25th is not a trading day). The investment date for dividend
reinvestment is the dividend payment date. The Program Administrator uses
dividends and funds of participants to purchase Shares of the Fund in the open
market. Such purchases will be made by participating brokers as agent for the
participants using normal cash settlement practices. All Shares purchased
through the Program will be allocated to participants as of the settlement date,
which is usually three business days from the purchase date. In all cases,
transaction processing will occur within 30 days of the receipt of funds, except
where temporary curtailment or suspension of purchases is necessary to comply
with applicable provisions of the Federal Securities laws or when unusual market
conditions make prudent investment impracticable. In the event the Program
Administrator is unable to purchase Shares within 30 days of the receipt of
funds, such funds will be returned to the participants.
The average price of all Shares purchased by the Program Administrator with all
funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period. All sale requests
having an
25
anticipated market value of $100,000.00 or more are expected to be submitted in
written form. In addition, all sale requests received by the Program
Administrator within thirty (30) days of an address change are expected to be
submitted in written form.
EquiServe L.P., as Program Administrator, administers the Program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Each participant in the Program
will receive a statement of his account following each purchase of Shares. The
statements will also show the amount of dividends credited to such participant's
account (if applicable), as well as the fees paid by the participant. In
addition, each participant will receive copies of the Fund's annual and
semi-annual reports to shareholders, proxy statements and, if applicable,
dividend income information for tax reporting purposes.
If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not to be
automatically reinvested at no cost to the participants.
Shares of the Fund purchased under the Program will be registered in the name of
the accounts of the respective participants. Unless requested, the Fund will not
issue to participants certificates for Shares of the Fund purchased under the
Program. The Program Administrator will hold the Shares in book-entry form until
a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.
A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.
Participation in any rights offering, dividend distribution or stock split will
be based upon both the Shares of the Fund registered in participants' names and
the Shares (including fractional Shares) credited to participants' Program
accounts. Any stock dividend or Shares resulting from stock splits with respect
to Shares of the Fund, both full and fractional, which participants hold in
their Program accounts and with respect to all Shares registered in their names
will be automatically credited to their accounts.
All Shares of the Fund (including any fractional share) credited to his account
under the Program will be voted as the participant directs. The participants
will be sent the proxy materials for the annual meetings of shareholders. When a
participant returns an executed proxy, all of such Shares will be voted as
indicated. A participant may also elect to vote his Shares in person at the
Shareholders' meeting.
26
A participant will receive tax information annually for his personal records and
to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.
The Program Administrator in administering the Program will not be liable for
any act done in good faith or for any good faith omission to act. However, the
Program Administrator will be liable for loss or damage due to error caused by
its negligence, bad faith or willful misconduct. Shares held in custody by the
Program Administrator are not subject to protection under the Securities
Investors Protection Act of 1970.
The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgment and research.
While the Program Administrator hopes to continue the Program indefinitely, the
Program Administrator reserves the right to suspend or terminate the Program at
any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.
Any interested shareholder may participate in the Program. All other cash
payments or bank account deductions must be at least $100.00, up to a maximum of
$100,000.00 annually. An interested shareholder may join the Program by reading
the Program description, completing and signing the enrollment form and
returning it to the Program Administrator. The enrollment form and information
relating to the Program (including the terms and conditions) may be obtained by
calling the Program Administrator at one of the following telephone numbers:
(800) 730-6001 (U.S. and Canada) or (781) 575-3100 (outside U.S. and Canada).
All correspondence regarding the Program should be directed to: EquiServe Trust
Company N.A., InvestLink(SM) Program, P.O. Box 43010, Providence, RI
02940-3010.
InvestLink is a service mark of EquiServe, L.P.
27
PROXY VOTING (UNAUDITED)
The policies and procedures that The Emerging Markets Telecommunications Fund,
Inc. (the "Fund") uses to determine how to vote proxies relating to its
portfolio securities are available:
- by calling 1-800-293-1232;
- on the Fund's website, www.csam.com/us; or
- on the website of the Securities and Exchange Commission,
http://www.sec.gov.
28
OTHER FUNDS MANAGED BY CREDIT SUISSE ASSET MANAGEMENT, LLC
Credit Suisse Capital Appreciation Fund
Credit Suisse Cash Reserve Fund
Credit Suisse Emerging Markets Fund
Credit Suisse Fixed Income Fund
Credit Suisse Global Fixed Income Fund
Credit Suisse Global Post-Venture Capital Fund
Credit Suisse High Income Fund
Credit Suisse International Focus Fund
Credit Suisse Japan Equity Fund
Credit Suisse Large Cap Value Fund
Credit Suisse Mid-Cap Growth Fund
Credit Suisse Municipal Money Fund
Credit Suisse New York Municipal Fund
Credit Suisse New York Tax Exempt Fund
Credit Suisse Select Equity Fund
Credit Suisse Short Duration Bond Fund
Credit Suisse Small Cap Growth Fund
Credit Suisse Small Cap Value Fund
Credit Suisse Strategic Small Cap Fund
Credit Suisse U.S. Government Money Fund
Fund shares are not deposits or other obligations of Credit Suisse Asset
Management, LLC or any affiliate, are not FDIC-insured and are not guaranteed by
Credit Suisse Asset Management, LLC or any affiliate. Fund investments are
subject to investment risks, including loss of your investment. There are
special risk considerations associated with international, global,
emerging-market, small-company, high-yield debt, single-industry, single-country
and other special, aggressive or concentrated investment strategies. Past
performance cannot guarantee future results.
More complete information about a fund, including charges and expenses, is
provided in the Prospectus, which should be read carefully before investing. You
may obtain copies by calling Credit Suisse Funds at 800-927-2874. For up-to-date
performance, please look in the mutual fund section of your newspaper under
Credit Suisse.
Credit Suisse Asset Management Securities, Inc., Distributor.
29
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SUMMARY OF GENERAL INFORMATION
The Fund--The Emerging Markets Telecommunications Fund, Inc.--is a closed-end,
non-diversified management investment company whose shares trade on the New York
Stock Exchange, Inc. Its investment objective is long-term capital appreciation
through investments primarily in equity securities of telecommunications
companies in emerging countries. Credit Suisse Asset Management, LLC (New York),
the Fund's investment adviser, is part of Credit Suisse Asset Management
("CSAM"), the institutional and mutual-fund asset-management arm of Credit
Suisse First Boston. As of March 31, 2004, CSAM managed over $47 billion in the
U.S. and, together with its global affiliates, managed assets of over $324
billion in 14 countries.
SHAREHOLDER INFORMATION
The market price is published in: THE NEW YORK TIMES (daily) under the
designation "EmMktTel" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "EmergMktTele". The Fund's New York Stock
Exchange, Inc. trading symbol is ETF. Weekly comparative net asset value (NAV)
and market price information about The Emerging Markets Telecommunications Fund,
Inc.'s shares are published each Sunday in THE NEW YORK TIMES and each Monday in
THE WALL STREET JOURNAL and BARRON'S, as well as other newspapers, in a table
called "Closed-End Funds."
THE CSAM GROUP OF FUNDS
LITERATURE REQUEST--Call today for free descriptive information on the
closed-end funds listed below at 1-800-293-1232 or visit our website on the
Internet: http://www.csam.com/us.
CLOSED-END FUNDS
SINGLE COUNTRY
The Brazilian Equity Fund, Inc. (BZL)
The Chile Fund, Inc. (CH)
The First Israel Fund, Inc. (ISL)
The Indonesia Fund, Inc. (IF)
MULTIPLE COUNTRY
The Latin America Equity Fund, Inc. (LAQ)
FIXED INCOME
Credit Suisse Asset Management Income Fund, Inc. (CIK)
Credit Suisse High Yield Bond Fund (DHY)
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that The Emerging Markets Telecommunications
Fund, Inc. may from time to time purchase shares of its capital stock in the
open market.
DIRECTORS AND CORPORATE OFFICERS
Enrique R. Arzac Director
James J. Cattano Director
George W. Landau Director
William W. Priest, Jr. Director
Martin M. Torino Director
Joseph D. Gallagher Chairman of the Fund,
Chief Executive Officer
and President
Emily Alejos Chief Investment Officer
Hal Liebes Senior Vice President
Michael A. Pignataro Chief Financial Officer and
Secretary
Robert M. Rizza Treasurer
INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, NY 10017
INVESTMENT SUB-ADVISERS
Credit Suisse Asset Management (Australia) Limited
Level 32, Gateway Building
1 Macquarie Place
Sydney NSW 2000
Credit Suisse Asset Management Limited
Beaufort House
15 St. Botolph Street
London EC3A 7JJ, England
ADMINISTRATOR
Bear Stearns Funds Management Inc.
383 Madison Avenue
New York, NY 10179
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
SHAREHOLDER SERVICING AGENT
Fleet National Bank
(c/o EquiServe, L.P.)
P.O. Box 43010
Providence, RI 02940
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
Two Commerce Square
Philadelphia, PA 19103
LEGAL COUNSEL
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. The financial information
included herein is taken from the records of the Fund without examination by
independent accountants who do not express an opinion thereon. 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 this report.
[ETF LISTED NYSE(R) LOGO]
3018-SA-04
ITEM 2. CODE OF ETHICS.
This item is inapplicable to a semi-annual report on Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
This item is inapplicable to a semi-annual report on Form N-CSR.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
This item is inapplicable to a semi-annual report on Form N-CSR.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
This item is inapplicable to a semi-annual report on Form N-CSR.
ITEM 6. SCHEDULE OF INVESTMENTS.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
This item is inapplicable to a semi-annual report on Form N-CSR.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS. Form N-CSR disclosure requirement not yet
effective with respect to the registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors since the registrant
last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(g)
of Schedule 14A in its definitive proxy statement dated February 23, 2004.
ITEM 10. CONTROLS AND PROCEDURES.
(a) As of a date within 90 days from the filing date of this report, the
principal executive officer and principal financial officer concluded that the
registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")) were effective based on
their evaluation of the disclosure controls and procedures required by Rule
30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934.
(b) There were no changes in registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the
registrant's second fiscal half-year that have materially affected, or are
reasonably likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Not applicable.
(a)(2) The certifications of the registrant as required by Rule 30a-2(a) under
the Act are exhibits to this report.
(a)(3) Not applicable.
(b) The certifications of the registrant as required by Rule 30a-2(b) under
the Act are an exhibit to this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
/s/ Joseph D. Gallagher
-----------------------------------
Name: Joseph D. Gallagher
Title: Chief Executive Officer
Date: July 27, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Joseph D. Gallagher
-----------------------------------
Name: Joseph D. Gallagher
Title: Chief Executive Officer
Date: July 27, 2004
/s/ Michael A. Pignataro
-----------------------------------
Name: Michael A. Pignataro
Title: Chief Financial Officer
Date: July 30, 2004