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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000088053-02-000250.txt : 20020415
<SEC-HEADER>0000088053-02-000250.hdr.sgml : 20020415
ACCESSION NUMBER:		0000088053-02-000250
CONFORMED SUBMISSION TYPE:	N-30D
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20011231
FILED AS OF DATE:		20020301

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KOREA FUND INC
		CENTRAL INDEX KEY:			0000748691
		IRS NUMBER:				133226146
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		N-30D
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04058
		FILM NUMBER:		02563928

	BUSINESS ADDRESS:	
		STREET 1:		345 PARK AVE
		STREET 2:		C/O SCUDDER STEVENS & CLARK INC
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10154
		BUSINESS PHONE:		6173305464
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-30D
<SEQUENCE>1
<FILENAME>kor.htm
<DESCRIPTION>KOREA FUND ANNUAL REPORT
<TEXT>
<!doctype html PUBLIC "-//IETF//DTD HT
ML//EN">
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<head>
<title>Zurich Scudder Investments</title>
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<BODY BGCOLOR=#ffffff>
<P ALIGN="LEFT">[The Korea Fund, Inc. logo]
</P>
<P ALIGN="LEFT"><FONT SIZE="+3">The Korea Fund, Inc.</FONT>
</P>
<H1 ALIGN="LEFT">Semiannual Report</H1>
<H1 ALIGN="LEFT">December 31, 2001</H1>
<P ALIGN="LEFT">A closed-end investment company seeking
long-term capital appreciation through
investment in Korean securities.
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">The Korea Fund, Inc.</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<H2 ALIGN="LEFT">Investment Objective and Policies</H2>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   long-term capital appreciation through investment in Korean securities
</P>
<H2 ALIGN="LEFT">Investment Characteristics</H2>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   investments in a broad spectrum of Korean industries
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   closed-end investment company
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   first United States investment company authorized to invest in Korean
securities
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   a vehicle for international diversification through participation in the
Korean economy
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">&#149;</FONT>   a vehicle providing investments in some less liquid Korean opportunities
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">General Information</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Executive Offices</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">The Korea Fund, Inc.<BR>
345 Park Avenue<BR>
New York, NY 10154
</P>
<P ALIGN="LEFT">For fund information: 1-800-349-4281 <BR>
or cef.scudder.com
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Transfer Agent, Registrar and
Dividend Reinvestment Plan
Agent</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Scudder Investments Service Company<BR>
P.O. Box 219153<BR>
Kansas City, MO 64121-9153
</P>
<P ALIGN="LEFT">For account information: 1-800-294-4366
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Legal Counsel</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Debevoise &amp; Plimpton
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Custodian</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Brown Brothers Harriman &amp; Co.
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Subcustodian </H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Citibank, N.A. - Seoul office
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<H3 ALIGN="LEFT">Independent Accountants</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">PricewaterhouseCoopers LLP
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="2">
<H3 ALIGN="LEFT">New York Stock Exchange Symbol - KF</H3>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">Contents</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#letter">&lt;Click Here&gt;</A></FONT>  Letter to Stockholders
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#other">&lt;Click Here&gt;</A></FONT>   Other Information
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#invsum">&lt;Click Here&gt;</A></FONT> Investment Summary
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#portsum">&lt;Click Here&gt;</A></FONT>        Portfolio Summary
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#portfolio">&lt;Click Here&gt;</A></FONT>      Investment Portfolio
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#fins">&lt;Click Here&gt;</A></FONT>   Financial Statements
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#high">&lt;Click Here&gt;</A></FONT>   Financial Highlights
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#notes">&lt;Click Here&gt;</A></FONT>  Notes to Financial Statements
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#ria">&lt;Click Here&gt;</A></FONT>    Report of Independent Accountants
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#drip">&lt;Click Here&gt;</A></FONT>   Dividend Reinvestment and Cash Purchase Plan
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#smr">&lt;Click Here&gt;</A></FONT>    Stockholder Meeting Results
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#do">&lt;Click Here&gt;</A></FONT>     Directors and Officers
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#priv">&lt;Click Here&gt;</A></FONT>   Privacy Statement
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT"><I><FONT SIZE="-2">This report is sent to the stockholders of The Korea Fund, Inc. for their information. It is not a
prospectus, circular, or representation intended for use in the purchase or sale of shares of the fund
or of any securities mentioned in the report.</FONT></I>
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="letter" ID="letter"></A>Letter to Stockholders</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<H2 ALIGN="LEFT">Dear Stockholders:</H2>
<P ALIGN="LEFT">After languishing throughout the first 10 months of 2001, Korea's stock
market soared during the year's final quarter. The KOSPI Index hit a low of
468.76 on September 17 amid a sharp sell-off in global equities but
subsequently surged more than 43 percent to 674.56 on November 26. The
index finished the year at 37.47 percent, representing a gain of 65.00 percent
in local currency terms (70.26 percent in U.S. dollars) during 2001. This
performance was the best by a wide margin in comparison with other Asian
equity markets and was one of the<B> </B>best in dollar terms in the world.
</P>
<P ALIGN="LEFT">Over the six-month reporting period ended December 31, the index posted a
gain of 16.56 percent. In comparison, the net asset value (NAV) total return
of the Korea Fund was 23.16 percent.<FONT SIZE="-1"><SUP>1</SUP></FONT> Its share price - quoted on the NYSE
- - returned 23.92 percent to close at $13.00 per share, representing a
discount of 18.2 percent to NAV. Our emphasis on fundamental research to
identify well-managed companies with strong balance sheets,
lower-than-average debt ratios, and promising prospects for long-term profit
growth continues to generate strong performance for the fund.
</P>
<FONT SIZE="-2"><SUP>1</SUP><I> To obtain daily and net asset information, please contact us at 1-800-349-4281 or
cef.scudder.com.</I></FONT><BR>
<H2 ALIGN="LEFT">Fundamentals, Valuations Support Korean Market</H2>
<P ALIGN="LEFT">Korea was in a favorable position to benefit from the rally that lifted global
equities in the wake of the post-September 11 sell-off. The country's market
offered extremely attractive valuations in relation both to its own history and
to other markets in the region, despite the distinct improvement in investment
fundamentals that has taken place during the past three years. As the
disconnect between valuations and fundamentals became apparent, investors
pounced on the opportunity to purchase Korean stocks once the outlook for
the global economy began to brighten during the fourth quarter.
</P>
<P ALIGN="LEFT">The improvement in Korea's fundamentals has occurred on many fronts. First,
it appears that the global semiconductor cycle is bottoming. During 2000 and
most of 2001, DRAM (memory chip) prices plummeted as demand for tech
products slackened. This was significant for Korea, since memory chips make
up a significant portion of its export base. As the fourth quarter progressed,
however, the uptick in the global economy led to increased optimism
regarding the outlook for the sector. This notion was confirmed when Korean
semiconductor companies raised DRAM prices several times during
December. News of the price increases provided a significant boost to
technology stocks in the Korean stock market, whose performance has been
closely tied to the fluctuations in DRAM prices over time.
</P>
<P ALIGN="LEFT">Investors were also encouraged by signs of improvement within the domestic
economy. Holiday sales were strong, indicating an uptick in consumer
confidence. In addition, inventories fell and industrial production rose. This
news, in turn, led to an increase in consensus estimates for corporate earnings
growth in 2002 and 2003, making investors more willing to pay higher
earnings multiples for Korean companies.
</P>
<P ALIGN="LEFT">From a longer-term standpoint, Korean stocks continue to receive a boost
from the adoption of Western-style management practices, a growing
orientation toward shareholders, and better transparency. The government is
also supporting continued improvements in corporate governance, as
illustrated by the recent court decision supporting shareholders in a lawsuit
against the directors of Samsung Electronics. Korea's embrace of positive
change in the wake of the 1997-1998 crisis has put it far ahead of other Asian
countries (particularly Japan) in the area of management practices. This has
enabled Korean companies to better withstand the recent economic downturn
and, in many cases, to turn a profit in an unfavorable environment. These
favorable underlying changes have provided a boost to the relative
performance of Korea's market in recent years and, in our view, should
continue to do so in the years ahead.
</P>
<H2 ALIGN="LEFT">Fund Takes Advantage of an Improved Environment</H2>
<P ALIGN="LEFT">The fund has been well-positioned to take advantage of the surge in Korean
equities. After carrying a larger than normal cash position through most of
2001, we began adding blue chip shares in the wake of September 11 and
subsequently maintained our positions as the market rallied. The fund, which
is now fully invested, was therefore able to participate in the market's strong
gains. This proved to be a substantial positive for performance.
</P>
<P ALIGN="LEFT">The fund is currently overweight in technology and telecommunications, as
well as in financials and domestic consumption plays. Our #1 and #3
positions are Samsung Electronics and SK Telecom. Although Samsung - a
global leader in technology products - has performed exceptionally well of
late, we believe the company is still attractively valued in comparison with its
global peers. Samsung has benefited not only from rising DRAM prices, but
also from its success in its consumer electronics businesses. As a global
company, Samsung has been able to leverage its price and technology
advantages to increase its market share and take business away from its
competitors. It is also improving its corporate governance practices, an area
that has been troublesome in the past. Overall, we believe the future for
Samsung remains bright. SK Telecom has also done well for the fund in recent
months, as it has increased its market share substantially and is benefiting
from consumers' adoption of &quot;2.5 G&quot; - the new generation of cell phones
that can receive data transmissions in addition to voice. This service has
proven very popular among the younger generation, providing a boost to
SKT's earnings.
</P>
<P ALIGN="LEFT">In the financial sector, fund performance has been helped by the merger of
Korea's two largest banks, Kookmin Bank and Housing and Commercial
Bank, on October 31, 2001. The combined company has successfully
distinguished itself from other banks in the region by employing a Western
style of management, as its operations are very transparent and
shareholder-oriented. This practice is spreading to other companies in the
sector, making Korean financial companies extremely attractive both on an
absolute basis and in relation to their Asian counterparts. The fund is
overweight in this area.
</P>
<P ALIGN="LEFT">The fund is also overweight in retailers, where top holdings include LG Home
Shopping and Hyundai Department Stores, both of which are experiencing
strong revenue growth and are benefiting from the growing consumer
confidence. Meanwhile, the fund remains underweight in slower-growth areas
such as steel, autos, machinery, and chemicals.
</P>
<H2 ALIGN="LEFT">Risks Remain, But Overall Outlook Is Bright</H2>
<P ALIGN="LEFT">Looking ahead, the outlook for Korean equities is not without risk. First, the
Japanese yen continues to weaken. From a recent high of 116.38 yen/$ on
September 20, the currency fell to 131.66 by year-end. Many experts think
the currency could fall as low as 150 before it bottoms out. This scenario
might be seen as a negative for Korea's economy, since it would challenge the
competitiveness of exporters in relation to their Japanese peers. However, our
view is that a falling yen does not represent the threat it once did. Korea's
economy is much more diversified than it was 10 or 20 years ago, when the
bulk of its exports were commodity-oriented (and thus more price-sensitive).
Today, Korea's economy is more diverse and is also more competitive with
Japan's. Another, though less significant issue is the local elections that will be
held at midyear. As is always the case when elections are held, this could lead
to some uncertainty that disrupts the market. Finally, while valuations in
Korea remain attractive, stocks are not as cheap as they were three months ago.
</P>
<P ALIGN="LEFT">Overall, however, we are encouraged by the significant structural changes that
have taken place in Korea, as well as by the shorter-term trends that have
unfolded in the global economy. If the U.S. economy recovers in 2002 - as
many expect it will - this will be an additional positive for the Korean
economy and stock market. Although global markets may not be fully past the
difficulties that have plagued stock price performance over the past two years,
we continue to believe that Korea is well-positioned to prosper in the years
ahead.
</P>
<P ALIGN="LEFT">Sincerely,<BR>
<U>/s/ Nicholas Bratt</U>
<BR> <U>/s/ Juris Padegs</U>
<BR>
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Nicholas Bratt<BR>
President<BR>
and Director
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Juris Padegs<BR>
Chairman of the Board<BR>
and Director
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="other" ID="other"></A>Other Information</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<H2 ALIGN="LEFT">Investment Manager</H2>
<P ALIGN="LEFT">The investment manager of The Korea Fund, Inc. is Zurich Scudder
Investments, Inc., (the &quot;Manager&quot;), one of the most experienced investment
management firms in the world. Established in 1919, the firm manages
investments for institutional and corporate clients, retirement and pension
plans, insurance companies, mutual fund investors, and individuals. The
Manager has offices throughout the United States and has subsidiaries in the
United Kingdom, Switzerland, Hong Kong, and Japan.
</P>
<P ALIGN="LEFT">The Manager has been a leader in international investment management for
over 40 years. It manages Scudder International Fund, which was originally
incorporated in Canada in 1953 as the first foreign investment company
registered with the United States Securities and Exchange Commission. The
Manager's clients that invest primarily in foreign securities include 21
open-end investment companies as well as portfolios for institutional
investors.
</P>
<P ALIGN="LEFT">The Manager also manages the assets of other closed-end investment
companies that invest primarily in foreign securities, including: <I>The Brazil
Fund, Inc., Scudder Global High Income Fund, Inc.,</I> and <I>Scudder New Asia
Fund, Inc.,</I> which are traded on the New York Stock Exchange.
</P>
<P ALIGN="LEFT">On December 4, 2001, Deutsche Bank and Zurich Financial Services
announced that they have signed a definitive agreement under which
Deutsche Bank will acquire 100% of the Manager, with the exception of
Threadneedle Investments in the U.K. Because the transaction would
constitute an assignment of the funds' investment management agreements
with the Manager under the Investment Company Act of 1940 and, therefore,
a termination of those agreements, the Manager intends to seek approval of
new agreements from the funds' shareholders. The transaction is expected to
be completed, subject to regulatory approval and satisfaction of other
conditions, in the first half of 2002.
</P>
<H2 ALIGN="LEFT">Korean Advisor</H2>
<P ALIGN="LEFT">Zurich Scudder Investments Korea Limited, a wholly-owned subsidiary of the
Manager, registered under the U.S. Investment Advisers Act of 1940, acts as
Korean advisor to Zurich Scudder Investments, Inc., the fund's investment
manager.
</P>
<P ALIGN="LEFT">Zurich Scudder Investments Korea Limited provides investment advice,
research, and assistance to the Manager. The staff makes specific investment
recommendations, which are then evaluated by the Manager's research
department and portfolio managers in light of their own expertise and
information from other sources in making investment decisions for the fund.
</P>
<H2 ALIGN="LEFT">A Team Approach to Investing</H2>
<P ALIGN="LEFT">The Korea Fund, Inc. is managed by a team of investment professionals who
each play an important role in the fund's management process. Team members
work together to develop investment strategies and select securities for the
fund's portfolio. They are supported by the Manager's large staff of
economists, research analysts, traders, and other investment specialists who
work in the Manager's offices across the United States and abroad. The
Manager believes the team approach benefits fund investors by bringing
together many disciplines and leveraging its extensive resources.
</P>
<P ALIGN="LEFT">Lead Portfolio Manager John J. Lee has set fund investment strategy and
overseen its daily operation since 1991, the year he joined the Manager's
global equity area. Portfolio Manager Nicholas Bratt has been a member of the
fund team since since inception of the fund in 1984, and has over 27 years of
experience in worldwide investing. Mr. Bratt, who has been with the Manager
since 1976, is the Director of the Manager's Global Portfolio Management
Group.
</P>
<H2 ALIGN="LEFT">Dividend Reinvestment and Cash Purchase Plan</H2>
<P ALIGN="LEFT">The fund's Dividend Reinvestment and Cash Purchase Plan offers you a
convenient way to have your dividends and capital gain distributions
reinvested in shares of the fund. We believe this Plan is attractive for
stockholders. Its features are more fully described on page <A HREF="#drip">33</A>.
</P>
<H2 ALIGN="LEFT">Net Asset Value</H2>
<P ALIGN="LEFT">The fund's NAV is published every weekday in <I>The Wall Street Journal</I> under
the heading &quot;Closed End Funds.&quot; The fund's NAV is also published in <I>The
New York Times</I> and <I>Barron's.</I> As a service to overseas stockholders, the fund's
NAV is listed daily in <I>The Financial Times</I> (&quot;FT&quot;). For your information, the
NAV of the fund and other Scudder-managed closed-end funds can be found
in the &quot;FT Managed Funds Service&quot; section under the heading &quot;Other
Offshore Funds&quot; below the Zurich Scudder Investments, Inc. banner.
</P>
<H2 ALIGN="LEFT">Amendment of the By-Laws</H2>
<P ALIGN="LEFT">Effective April 4, 2001, the fund's By-Laws were amended to provide that after
expiration of the terms of office specified for the Directors elected at such
1998 annual meeting, the Directors of each class shall serve for terms of three
years, or, when filling a vacancy, for the remainder of the full term of the class
of directors in which the vacancy occurred, and until their successors are
elected and have qualified.
</P>
<H2 ALIGN="LEFT">Share Repurchases</H2>
<P ALIGN="LEFT">The Board of Directors of The Korea Fund, Inc. has authorized the fund to
effect periodic repurchases of its shares in the open market from time to time
when the fund's shares trade at a discount to their NAV. Subject to periodic
review by the fund's Board of Directors, repurchases may be made at such
times and in such amounts as Zurich Scudder believes will further the
achievement of the fund's objectives and depending on market conditions,
available funds, regulatory requirements and alternative investment
opportunities. During the semi-annual period ended December 31, 2001,
75,000 fund shares were purchased by the fund.
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="invsum" ID="invsum"></A>Investment Summary    as of December 31, 2001</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="12">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Historical Information </FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="11">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Total Return (%)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Market Value</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Net Asset
Value (a)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Index (b)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Index (c)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Cumulative</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Average
Annual</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Cumulative</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Average
Annual</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Cumulative</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Average
Annual</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Cumulative</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Average
Annual</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Current
Quarter</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">44.08</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">45.25</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">43.63</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">44.62</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">One Year</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">41.32</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">41.32</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">42.71</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">42.71</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">32.39</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">32.39</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">37.47</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">37.47</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Three Year</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">63.60</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">17.83</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">93.00</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">24.50</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13.05</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4.17</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">23.33</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7.24</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Five Year</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4.08</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.80</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">39.64</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">6.91</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-31.83</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-7.38</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">6.52</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1.27</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Ten Year</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">39.93</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3.42</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">104.81</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7.43</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-34.23</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-4.10</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13.55</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1.28</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="12">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Per Share Information and Returns (a)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="10">
<P ALIGN="CENTER"><FONT SIZE="-2">Yearly periods ended December 31</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
</TR>

<TR>
<TD COLSPAN="12" ALIGN="CENTER" VALIGN="BOTTOM"><IMG SRC="kor_psi140.gif" ALT="kor_psi140"></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">1992</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">1993</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">1994</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">1995</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">1996</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">1997</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">1998</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">1999</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">2000</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">2001</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net Asset
Value ($)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10.62</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">16.64</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">20.65</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">20.04</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13.55</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4.44</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9.59</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">23.13</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">12.79</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">15.89</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Income
Dividends ($)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.04</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.06</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.17</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Capital Gains
Distributions ($)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.20</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.15</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.36</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.60</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1.53</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total Return (%)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2.71</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">56.77</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">24.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4.26</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-30.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-66.50</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">115.99</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">141.19</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-44.24</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">42.71</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2">(a)  Total investment returns reflect changes in net asset value per share during each period and
assume that dividends and capital gains distributions, if any, were reinvested. These percentages
are not an indication of the performance of a shareholder's investment in the Fund based on
market price.</FONT></I><BR>
<I><FONT SIZE="-2">(b)  Korea Stock Price Index (&quot;KOSPI&quot;) in U.S. Dollars.</FONT></I><BR>
<I><FONT SIZE="-2">(c)  Korea Stock Price Index (&quot;KOSPI&quot;) in local terms.</FONT></I><BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">Investments in funds involve risk. Some funds have more risk than others. These include funds that
allow exposure to or otherwise concentrate investments in certain sectors, geographic regions, security
types, market capitalization or foreign securities (e.g., political or economic instability, which can be
accentuated in Emerging Market countries). </FONT></I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="portsum" ID="portsum"></A>Portfolio Summary   as of December 31, 2001</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Asset Allocation</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">12/31/01</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">6/30/01</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Common Stocks</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">88%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">81%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Cash Equivalents</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">1%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">9%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Preferred Stocks</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">8%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">6%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Corporate Bonds</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">3%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">3%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Convertible Bonds</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">1%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="TOP">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">100%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">100%</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Sector Diversification </FONT></B><FONT SIZE="-2" COLOR="#ffffff">(Sector breakdown of the Fund's
equity securities)</FONT>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">12/31/01</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">6/30/01</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Financial</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">27%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">23%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Technology</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">21%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">20%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Communications</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">17%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">18%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Consumer Discretionary</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">10%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">8%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Consumer Staples</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">7%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">7%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Manufacturing</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">6%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">7%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Durables</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">3%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">5%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Metals &amp; Minerals</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">3%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">4%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Utilities</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">1%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">2%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Other</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">5%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">6%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="TOP">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">100%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">100%</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">Asset allocation and sector diversification are subject to change.</FONT></I>
</P>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Ten Largest Equity Holdings at December 31, 2001 </FONT></B><FONT SIZE="-2" COLOR="#ffffff">(62.3% of Portfolio)</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     1.      Samsung Electronics Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2">Manufacturer of major electronics</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">13.2%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     2.      Kookmin Bank</FONT></B>
<BR><FONT SIZE="-2">Provider of commercial banking services</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">10.9%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     3.      SK Telecom Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2">Provider of mobile telecommunications services</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">10.3%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     4.      Samsung Fire &amp; Marine Insurance</FONT></B>
<BR><FONT SIZE="-2">Provider of Insurance products</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">7.9%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     5.      LG Home Shopping, Inc.</FONT></B>
<BR><FONT SIZE="-2">Operator of cable television shopping channel</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.7%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     6.      Samsung Electro-Mechanics Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2">Manufacturer of precision electronic parts</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.7%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     7.      KT Freetel</FONT></B>
<BR><FONT SIZE="-2">Provider of personal communication services</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.6%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     8.      Hyundai Department Store Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2">Operator of department stores and hotels</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.2%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     9.      Pohang Iron &amp; Steel Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2">Manufacturer of steel</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">3.1%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     10.     Korea Telecom Corp.</FONT></B>
<BR><FONT SIZE="-2">Provider of telecommunications services</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">2.7%</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">Portfolio holdings are subject to change.</FONT></I>
</P>
<P ALIGN="LEFT"><I><FONT SIZE="-2">For more complete details about the Fund's investment portfolio, see page 14. A quarterly Fund
Summary and Portfolio Holdings are available upon request.</FONT></I>
</P>
<P ALIGN="LEFT">
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="portfolio" ID="portfolio"></A>Investment Portfolio    as of December 31, 2001</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2"><BR>
Shares</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Common Stocks 87.7%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Communications 16.6%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Cellular Telephone 13.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">KT Freetel* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">877,047</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">28,578,311</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">SK Telecom Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">337,990</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">68,961,797</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">SK Telecom Co., Ltd. (ADR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">608,135</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13,147,879</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">110,687,987</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Telephone/Communications 2.7%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Telecom Corp. (ADR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">495,050</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10,064,367</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Telecom Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">291,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">11,066,197</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">21,130,564</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Discretionary 8.9%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Department &amp; Chain Stores 4.3%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hyundai Department Store Co., Ltd. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,176,440</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">25,615,671</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shinsegae Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">80,003</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">8,466,248</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">34,081,919</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Hotels &amp; Casinos 0.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hotel Shilla Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">378,391</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,448,667</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Kangwon Land, Inc.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">50,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,043,776</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">7,492,443</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Specialty Retail 3.7%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Home Shopping, Inc. (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">490,900</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">29,375,516</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Staples 5.7%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Alcohol &amp; Tobacco 2.8%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hite Brewery Co., Ltd. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">50,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,047,963</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Tobacco and Ginseng Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">846,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">12,495,166</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Tobacco and Ginseng Corp. (GDR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">990,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7,425,000</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">21,968,129</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Food &amp; Beverage 2.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Jedang Corp. (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">99,606</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,753,709</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nam Yang Dairy Products Co., Ltd. (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">43,390</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10,736,011</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nhong Shim Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">93,601</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,137,900</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">19,627,620</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Textiles 0.4%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">BYC Co., Ltd. (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">39,530</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,724,453</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Tae Kwang Industrial Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">11,760</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,486,228</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">3,210,681</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Durables 1.1%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Tires</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hankook Tire Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,335,275</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">6,271,891</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nexen Tire Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">400,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,451,466</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">8,723,357</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Energy 1.5%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Oil &amp; Gas Production </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">S-Oil Corp. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">454,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7,569,547</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">SK Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">354,614</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4,036,147</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">11,605,694</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financial 23.8%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Banks 13.2%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Kookmin Bank (ADR) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2"> 1,257,217</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">48,905,741</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Kookmin Bank</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">994,184</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">37,693,463</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Koram Bank Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,365,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">12,418,538</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shinhan Financial Group Co., Ltd. (GDR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">208,798</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,507,047</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">104,524,789</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Insurance 7.1%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Oriental Fire &amp; Marine Insurance Co.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">211,660</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,046,503</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Fire &amp; Marine Insurance</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,279,625</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">54,555,767</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">56,602,270</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Other Financial Companies 3.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dongwon Securities Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">356,500</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,741,264</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Good Morning Securities Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,900,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">8,331,938</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hankang Restructuring Fund* (f)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,350,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">8,327,179</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Kookmin Credit Card Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">100,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,806,624</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Securities Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">130,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4,735,820</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">27,942,825</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Health 0.1%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Health Industry Services </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Household &amp; Health Care Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">51,511</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,133,360</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Manufacturing 5.3%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Chemicals 1.3%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Honam Petrochemical Corp. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">100,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,339,931</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Chem Investment Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">94,362</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">589,089</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Chem Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">212,486</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,518,516</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Fine Chemicals Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">425,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4,529,882</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">9,977,418</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diversified Manufacturing 2.7%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Anycell, Inc.* (b) (c) (h)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,250,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,903,312</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Daeyang E&amp;C Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">893,052</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,568,402</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Halla Climate Control Co.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">60,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,644,461</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hyundai Heavy Industries</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">475,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9,149,220</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Heavy Industries Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,120,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,201,827</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">21,467,222</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electrical Products 0.7%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hankuk Electric Glass Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">122,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,461,439</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Machinery/Components/Controls 0.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">HS R&amp;A Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">200,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,108,489</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Climate Control Co., Ltd. (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">827,630</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,150,476</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">4,258,965</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Specialty Chemicals 0.1%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Fine Chemical Co.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">83,333</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,173,704</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Media 1.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Advertising 0.2%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Communications, Inc.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">17,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,747,240</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Cable Television 0.3%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Qrix Networks, Inc.* (b) (h)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">120,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,283,974</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Print Media 0.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Woongjin.com Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">800,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,696,993</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Metals and Minerals 3.2%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Steel &amp; Metals </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Aldex Co., Ltd. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">500,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">833,651</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Pohang Iron &amp; Steel Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">243,430</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">22,610,171</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Pohang Iron &amp; Steel Co., Ltd. (ADR)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2"> 72,608</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,669,984</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">25,113,806</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Service Industries 1.8%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Miscellaneous Commercial Services 1.0%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">S1 Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">564,270</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7,603,791</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Miscellaneous Consumer Services 0.8%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Information &amp; Communications Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">566,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">6,679,102</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Technology 17.4%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Computer Software 0.4%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">NCsoft Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">27,500</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,266,083</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diverse Electronic Products 1.0%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dae Duck Electronics Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">360,901</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,516,964</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Insung Information Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">721,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,074,899</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Partners, Inc. (b) (c) (h)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">105,579</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,279,026</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">SE Co., Ltd.* (b) (c) (h)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">636,950</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,522,667</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">8,393,556</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electronic Components/Distributors 16.0%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Jahwa Electronics Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">234,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,514,275</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Electro-Mechanics Co., Ltd. (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">794,005</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">26,476,908</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Electronics Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">414,259</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">87,992,585</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung SDI Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">245,306</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10,831,936</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">126,815,704</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Utilities 1.3%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electric Utilities </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Electric Power Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">602,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9,945,487</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Common Stocks</B> (Cost $444,771,613)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">695,991,638</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">

<BR></TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Preferred Stocks 8.0%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Discretionary 0.5%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Department &amp; Chain Stores 0.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shinsegae Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">55,784</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,609,928</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Hotels &amp; Casinos 0.0%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hotel Shilla Co., Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">32,070</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">190,198</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Staples 0.8%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Food &amp; Beverage </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Jedang Corp.* (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">297,200</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,090,978</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Jedang Corp.* (2nd) (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">50,335</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">854,565</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Jedang Corp.* (3rd) (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">30,201</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">464,454</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nam Yang Dairy Products Co., Ltd. (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,160</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">188,108</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">6,598,105</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Durables 2.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Automobiles </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hyundai Motor Co., Ltd. (GDR)*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2"> 3,020,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">11,174,000</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hyundai Motor Co., Ltd. (2nd)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">738,593</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,173,244</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">16,347,244</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Energy 0.1%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Oil &amp; Gas Production </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">S-Oil Corp.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">32,040</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">439,071</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financial 1.7%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Insurance 1.0%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Fire &amp; Marine Insurance (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">533,850</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7,803,517</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Other Financial Companies 0.7%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dongwon Securities Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">435,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,953,940</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dongwon Securities Co., Ltd. (2nd)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">211,750</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">844,743</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Investment and Securities Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">470,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,926,989</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">5,725,672</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Health 0.1%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Health Industry Services </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Household &amp; Health Care Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">46,788</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">480,882</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Manufacturing 0.2%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Chemicals </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Chem Ltd.*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">193,003</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,616,317</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Technology 2.6%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electronic Components/Distributors </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Electro-Mechanics Co., Ltd. (c)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">180,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,864,104</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Electronics Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">198,201</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">17,126,619</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung SDI Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">34,318</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">679,306</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">20,670,029</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Preferred Stocks</B> (Cost $42,566,340)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">63,480,963</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Principal<BR>
Amount (g)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Corporate Bonds 3.2%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Staples 0.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Haitai Confectionery Co., 12/31/2002 (b) (i)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">135,335,903</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">71,730</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Durables 0.3%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nexen Tire Corp., 9.5%, 5/27/2002 (b)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,000,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,302,548</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financial 1.5%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Exchange Bank, Step-up Coupon, 13.75%,
6/30/2010 </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">U.S.$ 10,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">11,225,000</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Woori Financial Holdings Co., 5.0%, 7/16/2003 (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,381,510,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,020,987</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"> </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">12,245,987</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Manufacturing 0.1%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dae Young Packaging Co., 2%, due equally
12/31/2007-12/31/2011 (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,000,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">526,520</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Utilities 1.3%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Electric Power Corp., 6.375%, 12/1/2003 </FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">U.S.$ 10,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10,419,900</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Corporate Bonds</B> (Cost $23,412,602)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">25,566,685</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">

<BR></TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Convertible Bonds 0.3%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Durables 0.3%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Tires </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hankook Tire Co., Ltd., Zero Coupon with 5.83% bonus
interest at maturity, 12/31/2002 (b) (e)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,890,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,078,416</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diverse Electronic Products </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">S.E. Co., Ltd., 4.0%, with 38.61% bonus interest at
maturity, 12/31/2003 (b) (e) (h) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">500,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">380,662</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Convertible Bonds</B> (Cost $2,615,645)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">2,459,078</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2"><BR>
Shares</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Warrants 0.0%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financial 0.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Other Financial Companies </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Woori Financial (b) (Cost $0)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">276,302</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Principal
Amount (g)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Repurchase Agreements 0.8%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Salomon Smith Barney, 1.75% to be repurchased at
$6,156,599 on 1/2/2002 (d) (Cost $6,156,000)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">U.S.$ 6,156,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">6,156,000</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Investment Portfolio - 100.0%</B> (Cost $519,522,200) (a)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">793,654,364</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2">*    Non-income producing security.</FONT></I><BR>
<I><FONT SIZE="-2">(a)  The cost for federal income tax purposes was $520,617,252. At December 31, 2001, net
unrealized appreciation for all securities based on tax cost was $273,037,112. This consisted of
aggregate gross unrealized appreciation for all securities in which there was an excess of value
over tax cost of $322,281,268 and aggregate gross unrealized depreciation for all securities in
which there was an excess of tax cost over value of $49,244,156.</FONT></I><BR>
<I><FONT SIZE="-2">(b)  Securities valued at fair value by management and approved in good faith following procedures
approved by the Board of Directors, amounted to $13,413,713 (1.7% of net assets). The value has
been estimated by management in the absence of readily ascertainable market values. However,
because of the inherent uncertainty of valuation, the estimated value may differ significantly from
the value that would have been used had a ready market for the securities existed, and the
difference could be material. The cost of the securities at December 31, 2001 aggregated
$15,075,870. The securities may also have certain restrictions as to resale.</FONT></I><BR>
<I><FONT SIZE="-2">(c)  Affiliated issuers (see notes to the Financial Statements).</FONT></I><BR>
<I><FONT SIZE="-2">(d)  Repurchase agreements are fully collateralized by U.S. Treasury and Government agency securities.</FONT></I><BR>
<I><FONT SIZE="-2">(e)  Bonus interest represents the amount available to be paid to the holder at maturity in lieu of
conversion.</FONT></I><BR>
<I><FONT SIZE="-2">(f)  Managed by Zurich Scudder Investments, Inc.</FONT></I><BR>
<I><FONT SIZE="-2">(g)  Principal amount stated in Korean won unless otherwise noted. U.S. $ represents United States
Dollars.</FONT></I><BR>
<I><FONT SIZE="-2">(h)  Included in (b) above are restricted securities with a value which aggregated $7,369,641 (.93% of
net assets) at December 31, 2001. No quoted market price exists for these private placement
securities. The issuers of these securities have given the Fund a put option, payable on demand.
Information concerning such private placement securities at December 31, 2001 is as follows:</FONT></I><BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">Security</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Acquisition
Date</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Cost ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Anycell, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        12/22/2000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        2,020,774</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Partners, Inc. (formerly Brainrush Asia, Inc.)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        7/29/2000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,504,365</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Qrix Networks, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        7/28/2000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        2,686,367</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">S.E. Co., Ltd. (convertible bond)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        12/22/2000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        404,154</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">S.E. Co., Ltd. (equity)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        12/22/2000</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,616,637</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT">
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     8,232,297</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2">(i)  Company in restructuring process, principal only subject to repayment.</FONT></I><BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">The accompanying notes are an integral part of the financial statements.</FONT></I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="fins" ID="fins"></A>Financial Statements</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Statement of Assets and Liabilities </FONT></B><FONT SIZE="-2" COLOR="#ffffff">as of December 31, 2001</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1">Assets</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Investments in securities, at value:</FONT><BR>
<FONT SIZE="-2">Unaffiliated issuers (cost $447,440,231)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       696,466,560</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Affiliated issuers (cost $72,081,969)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        97,187,804</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cash</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        688,419</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Foreign currency, at value (cost $3,737,398)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3,693,695</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Receivable for proceeds from maturity</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,906,045</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dividends receivable</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        754,940</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Interest receivable</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        119,080</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total assets</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        800,816,543</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1">Liabilities</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Payable for investments purchased</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        29,672</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dividends payable</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        5,992,068</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Accrued management fee</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        585,177</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Other accrued expenses and payables</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        517,222</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total liabilities</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        7,124,139</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net assets, at value</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    793,692,404</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1">Net Assets</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Accumulated net investment loss</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (914,113)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net unrealized appreciation (depreciation) on:</FONT><BR>
<FONT SIZE="-2">Investments</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        274,132,164</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Won related transactions</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (45,145)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Accumulated net realized gain (loss)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (602,326)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cost of 75,000 shares held in treasury</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (745,506)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Paid-in capital</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        521,867,330</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net assets, at value</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    793,692,404</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net Asset Value</FONT></B><FONT SIZE="-2"> per share ($793,692,404 / 49,933,902 shares of common
stock issued and outstanding, $.01 par value, 200,000,000 shares
authorized)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    15.89</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">The accompanying notes are an integral part of the financial statements.</FONT></I>
</P>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Statement of Operations </FONT></B><FONT SIZE="-2" COLOR="#ffffff">for the six months ended December 31, 2001</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1">Investment Income</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Income:</FONT><BR>
<FONT SIZE="-2">Dividends - Unaffiliated issuers (net of foreign taxes withheld of
$314,191)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       1,347,385</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Interest - Unaffiliated issuers (net of foreign taxes withheld of $12,143)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,934,274</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total Income (net of foreign taxes withheld of $326,334)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3,281,659</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Expenses:</FONT><BR>
<FONT SIZE="-2">Management fee</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3,273,201</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Services to shareholders</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        7,500</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Custodian and accounting fees</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        556,322</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Auditing</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        91,511</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Legal</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        143,530</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Directors' fees and expenses</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        54,420</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Reports to shareholders</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        79,750</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Other</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        29,120</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total expenses, before expense reductions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        4,235,354</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Expense reductions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (39,582)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total expenses, after expense reductions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        4,195,772</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net investment income (loss)</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     (914,113)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<B><FONT SIZE="-1">Realized and Unrealized Gain (Loss) on Investment Transactions</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net realized gain (loss) from:</FONT><BR>
<FONT SIZE="-2">Investments</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        2,793,992</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Won related transactions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        127,283</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        2,921,275</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net unrealized appreciation (depreciation) during the period on:</FONT><BR>
<FONT SIZE="-2">Investments</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        147,854,145</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Won related transactions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        15,478</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        147,869,623</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net gain (loss) on investment transactions</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     150,790,898</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net increase (decrease) in net assets resulting from operations</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    149,876,785</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">The accompanying notes are an integral part of the financial statements.</FONT></I>
</P>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Statements of Changes in Net Assets</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-1">Increase (Decrease) in Net Assets</FONT></B>
<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Six Months
Ended
December 31,
2001</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Year Ended
June 30, 2001</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Operations:</FONT><BR>
<FONT SIZE="-2">Net investment income (loss)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       (914,113)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       8,326,871</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net realized gain (loss) on investment transactions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        2,921,275</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        83,042,424</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net unrealized appreciation (depreciation) on
investment transactions during the period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        147,869,623</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (363,439,925)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net increase (decrease) in net assets resulting from
operations</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        149,876,785</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (272,070,630)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Distributions to shareholders from:</FONT><BR>
<FONT SIZE="-2">Net investment income</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (9,250,133)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net realized gains</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (5,992,068)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (70,333,447)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Fund share transactions:</FONT><BR>
<FONT SIZE="-2">Reinvestment of distributions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        108,174</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cost of shares reacquired</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (745,506)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net increase (decrease) in net assets from Fund share
transactions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (745,506)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        108,174</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Increase (decrease) in net assets</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        143,139,211</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (351,546,036)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net assets at beginning of period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        650,553,193</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,002,099,229</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net assets at end of period (including accumulated net
investment loss of $914,113 at December 31, 2001)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    793,692,404</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    650,553,193</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Other Information</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shares outstanding at beginning of period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        50,008,902</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        49,999,999</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shares issued to shareholders in reinvestment of
distributions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        8,903</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shares reacquired</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (75,000)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net increase (decrease) in Fund shares</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (75,000)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        8,903</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shares outstanding at end of period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        49,933,902</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        50,008,902</FONT>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">The accompanying notes are an integral part of the financial statements.</FONT></I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="high" ID="high"></A>Financial Highlights</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="MIDDLE">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Years Ended June 30,</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">2001<SUP>a</SUP></FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">2001</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">2000</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">1999</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">1998</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="MIDDLE">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">1997</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="7">
<B><FONT SIZE="-1">Per Share Operating Performance</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net asset value, beginning of
period</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    13.01</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    20.04</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    17.72</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    5.63</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    13.22</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    18.52</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<I><FONT SIZE="-2">Income (loss) from investment
operations:</FONT></I><BR>
<FONT SIZE="-2">Net investment income (loss)<SUP>b</SUP></FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.02)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .17</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .05</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .04</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .07</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .07</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net realized and unrealized gain
(loss) on investment transactions</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3.02</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (5.61)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        2.27</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        12.05</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (7.66)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (4.48)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">Total from investment operations</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3.00</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (5.44)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        2.32</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        12.09</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (7.59)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (4.41)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<I><FONT SIZE="-2">Less distributions from:</FONT></I><BR>
<FONT SIZE="-2">Net investment income</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.18)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net realized gains on investment
transactions</FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.12)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (1.41)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.60)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">Total distributions</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.12)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (1.59)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.60)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Antidilution (dilution) resulting from
the rights offering, repurchases and
reinvestment of distributions for
shares at value</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .00<SUP>d</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.29)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net asset value, end of period</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    15.89</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    13.01</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    20.04</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    17.72</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    5.63</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    13.22</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Market value, end of period</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    13.00</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    10.58</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    14.06</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    14.88</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    6.31</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    14.75</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="7">
<B><FONT SIZE="-1">Total Return</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Per share net asset value (%)<SUP>c</SUP></FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        23.16<SUP>**</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (25.01)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        13.09</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        214.74</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (57.41)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (24.40)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Per share market value (%)<SUP>c</SUP></FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        23.92<SUP>**</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (13.16)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (5.46)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        135.64</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (57.20)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (26.11)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="7">
<B><FONT SIZE="-1">Ratios to Average Net Assets and Supplemental Data</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net assets, end of period ($ millions)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        794</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        651</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,002</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        886</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        281</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        661</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Ratio of expenses before expense
reductions (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.29<SUP>*</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.24</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.20</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.36</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.38</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.28</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Ratio of expenses after expense
reductions (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.28<SUP>*</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.23</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.19</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.36</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.38</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.28</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Ratio of net investment income
(loss) (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.14)<SUP>e**</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1.18</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .24</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .37</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .90</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .46</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Portfolio turnover rate (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        11<SUP>*</SUP></FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        40</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        31</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        10</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        24</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        13</FONT>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2"><SUP>a</SUP> For the six months ended December 31, 2001.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>b</SUP> Based on average shares outstanding during the period.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>c</SUP> Total return based on net asset value reflects changes in the Fund's net asset value during the
period. Total return based on market value reflects changes in market value. Each figure includes
reinvestments of dividends. These figures will differ depending upon the level of any discount from
or premium to net asset value at which the Fund's shares trade during the period.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>d       </SUP>Amount is less than $.005 per share.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>e</SUP> The ratio for the six months ended December 31, 2001 has not been annualized since the Fund
believes it would not be appropriate because the Fund's dividend income is not earned ratably
throughout the fiscal year (Note A).</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>*</SUP> Annualized <SUP>**</SUP> Not annualized</FONT></I><BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="notes" ID="notes"></A>Notes to Financial Statements</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><B>A. Significant Accounting Policies</B>
</P>
<P ALIGN="LEFT">The Korea Fund, Inc. (the &quot;Fund&quot;) is registered under the Investment Company Act
of 1940 , as amended, (the &quot;1940 Act&quot;), as a closed-end, non-diversified
management investment company organized as a Maryland Corporation.
</P>
<P ALIGN="LEFT">The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America which require the use of
management estimates. Actual results could differ from those estimates. The policies
described below are followed consistently by the Fund in the preparation of its
financial statements.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Security Valuation.</FONT></B> Investments are stated at value determined as of the close of
regular trading on the New York Stock Exchange on each day the exchange is open
for trading. Equity securities are valued at the most recent sale price reported on the
exchange (U.S. or foreign) or over-the-counter market on which the security is traded
most extensively. Securities for which no sales are reported are valued at the
calculated mean between the most recent bid and asked quotations on the relevant
market or, if a mean cannot be determined, at the most recent bid quotation. Debt
securities are valued by independent pricing services approved by the Directors of the
Fund. If the pricing services are unable to provide valuations, securities are valued at
the most recent bid quotation or evaluated price, as applicable, obtained from one or
more broker-dealers. Such services may use various pricing techniques which take
into account appropriate factors such as yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other data, as well as broker quotes.
</P>
<P ALIGN="LEFT">Money market instruments purchased with an original or remaining maturity of sixty
days or less, maturing at par, are valued at amortized cost. Investments in open-end
investment companies are valued at their net asset value each business day.
</P>
<P ALIGN="LEFT">Securities and other assets for which market quotations are not readily available or for
which the above valuation procedures are deemed not to reflect fair value are valued
in a manner that is intended to reflect fair value as determined in accordance with
procedures approved by the Directors.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Foreign Currency Translations.</FONT></B> The books and records of the Fund are maintained
in U.S. dollars. Investment securities and other assets and liabilities denominated in a
foreign currency are translated into U.S. dollars at the prevailing exchange rates at
period end. Purchases and sales of investment securities, income and expenses are
translated into U.S. dollars at the prevailing exchange rates on the respective dates of
the transactions.
</P>
<P ALIGN="LEFT">Net realized and unrealized gains and losses on foreign currency transactions
represent net gains and losses between trade and settlement dates on securities
transactions, the disposition of forward foreign currency exchange contracts and
foreign currencies, and the difference between the amount of net investment income
accrued and the U.S. dollar amount actually received. That portion of both realized
and unrealized gains and losses on investments that results from fluctuations in
foreign currency exchange rates is not separately disclosed but is included with net
realized and unrealized gains and losses on investment securities.
</P>
<P ALIGN="LEFT">At December 31, 2001 the exchange rate for Korean Won was U.S. $.00076 to W 1.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Repurchase Agreements.</FONT></B> The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian or
sub-custodian bank, receives delivery of the underlying securities, the amount of
which at the time of purchase and each subsequent business day is required to be
maintained at such a level that the value is equal to at least the principal amount of
the repurchase price plus accrued interest.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Taxes.</FONT></B> The Fund's policy is to comply with the requirements of the Internal Revenue
Code, as amended, which are applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Accordingly, the Fund paid no
federal income taxes and no federal income tax provision was required.
</P>
<P ALIGN="LEFT">Under the United States-Korea Income Tax Treaty (the &quot;Treaty&quot;), as presently in
effect, the government of Korea imposes a nonrecoverable withholding tax and
resident tax aggregating 16.5% on dividends and 13.2% on interest earned by the
Fund from Korean issuers. Under the Treaty, there is no Korean withholding tax on
realized capital gains.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Distribution of Income and Gains.</FONT></B> Distributions of net investment income, if any,
are made annually. Net realized gains from investment transactions, in excess of
available capital loss carryforwards, would be taxable to the Fund if not distributed
and, therefore, will be distributed to shareholders at least annually.
</P>
<P ALIGN="LEFT">The timing and characterization of certain income and capital gains distributions are
determined annually in accordance with federal tax regulations which may differ
from accounting principles generally accepted in the United States of America. These
differences primarily relate to investments in foreign denominated securities and
certain securities sold at a loss. As a result, net investment income (loss), net realized
gain (loss) on investment transactions for a reporting period may differ significantly
from distributions during such period. Accordingly, the Fund may periodically make
reclassifications among certain of its capital accounts without impacting the net asset
value of the Fund.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Subscriptions for New Shares</FONT></B>. As part of their annual corporate action matters,
certain Korean companies offer rights to their shareholders to subscribe to new shares
which are eligible for a portion of the dividends paid on existing shares in the year of
subscription. The Fund follows a policy of subscribing to new share offerings by
Korean companies.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Dividend Income.</FONT></B> Korean-based corporations have generally adopted calendar
year-ends, and their corporate actions are normally approved by their boards of
directors and shareholders in the first quarter of each calendar year. Accordingly,
dividend income from Korean equity investments is earned and received by the Fund
primarily in the first calendar quarter of each year. As a result, the Fund, which has a
June 30 year-end, receives substantially less dividend income in the first half of its
year than in the second half of such year.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Other.</FONT></B> Investment transactions are accounted for on trade date. Interest income is
recorded on the accrual basis. Dividend income is recorded on the ex-dividend date
net of foreign withholding taxes. Certain dividends from foreign securities may be
recorded subsequent to the ex-dividend date as soon as the Fund is informed of such
dividends and taxes. Realized gains and losses from investment transactions are
recorded on an identified cost basis. All discounts and premiums are
accreted/amortized for financial reporting purposes.
</P>
<P ALIGN="LEFT"><B>B. Purchases and Sales of Securities</B>
</P>
<P ALIGN="LEFT">During the six months ended December 31, 2001, purchases and sales of investment
securities (excluding short-term investments) aggregated $81,338,674 and
$34,402,410, respectively.
</P>
<P ALIGN="LEFT"><B>C. Related Parties</B>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Management Agreement.</FONT></B> Under the Investment Management Agreement (the
&quot;Management Agreement&quot;) with Zurich Scudder Investments, Inc., (&quot;ZSI&quot; or the
&quot;Manager&quot;), the Manager directs the investments of the Fund in accordance with its
investment objectives, policies and restrictions. The Manager determines the
securities, instruments and other contracts relating to investments to be purchased,
sold or entered into by the Fund. In addition to portfolio management services, the
Manager provides certain administrative services in accordance with the Management
Agreement. The management fee payable under the Agreement is equal to an annual
rate of 1.15% of the first $50,000,000 of the Fund's month-end net assets, 1.10% of
the next $50,000,000 of such net assets, 1% of the next $250,000,000 of such net
assets, 0.95% of the next $400,000,000 of such net assets, 0.90% of the next
$300,000,000 of such net assets, and 0.85% of such net assets in excess of
$1,050,000,000 of the Fund's month-end net assets, computed and payable monthly.
The value of Hankang Restructuring Fund, which is managed by ZSI, has been
excluded from the net assets used to calculate the management fee. For the six
months ended December 31, 2001, the Manager did not impose a portion of its fee
amounting to $39,582, and the portion imposed amounted to $3,233,619 which
was equivalent to an annualized effective rate of 0.98% of the Fund's average
month-end net assets.
</P>
<P ALIGN="LEFT">Effective September 10, 2001, Zurich Scudder Investments Korea Limited (&quot;ZSIKL&quot;
or the &quot;Korean Advisor&quot;) replaced Daewoo Capital Management Co., Ltd. as Korean
Advisor. Under the Management Agreement, the Manager pays the Korean Advisor a
monthly fee, equal to an annual rate of 0.2875% of the first $50,000,000 of the
Fund's month-end net assets, 0.275% of the next $50,000,000 of such net assets,
0.25% of the next $250,000,000 of such net assets, 0.2375% of the next
$400,000,000 of such net assets and 0.225% of such net assets in excess of
$750,000,000.
</P>
<P ALIGN="LEFT">On December 4, 2001, Deutsche Bank and Zurich Financial Services announced
that they have signed a definitive agreement under which Deutsche Bank will acquire
100% of ZSI, with the exception of Threadneedle Investments in the U.K. Because
the transaction would constitute an assignment of the funds' investment management
agreements with ZSI under the 1940 Act and, therefore, a termination of those
agreements, ZSI intends to seek approval of new agreements from the funds'
shareholders. The transaction is expected to be completed, subject to regulatory
approval and satisfaction of other conditions, in the first half of 2002.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Service Provider Fees.</FONT></B> Scudder Investments Service Company (&quot;SISC&quot;), an affiliate
of the Manager, is the transfer, dividend-paying and shareholder service agent for the
Fund. For the six months ended December 31, 2001, the amount charged to the
Fund by SISC aggregated $7,500, of which $1,250 is unpaid at December 1, 2001.
</P>
<P ALIGN="LEFT">Scudder Fund Accounting Corporation (&quot;SFAC&quot;), a subsidiary of the Manager, is
responsible for determining the daily net asset value per share and maintaining the
portfolio and general accounting records of the Fund. For the six months ended
December 31, 2001, the amount charged to the Fund by SFAC aggregated
$171,473, of which $30,103 is unpaid at December 31, 2001.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Directors' Fees and Expenses.</FONT></B> The Fund pays each Director not affiliated with the
Manager or the Korean Advisor an annual retainer, plus specified amounts for
attended board and committee meetings.
</P>
<P ALIGN="LEFT"><B>D. Foreign Investment and Exchange Controls in Korea</B>
</P>
<P ALIGN="LEFT">The Foreign Exchange Transaction Act, the Presidential Decree relating to such Act
and the regulations of the Minister of Finance and Economy issued thereunder
impose certain limitations and controls which generally affect foreign investors in
Korea. The Fund has obtained from the Minister of Finance and Economy a license
to invest in Korean securities and to repatriate income received from dividends and
interest earned on, and net realized capital gain from, its investments in Korean
securities or to repatriate from investment principal up to 10% of the net asset value
(taken at current value) of the Fund (except upon termination of the Fund, or for
expenses in excess of Fund income, in which case the foregoing restriction shall not
apply). The Minister of Finance and Economy may, when it deems it to be in the
public interest, modify the Fund's license to invest in Korean securities or, according
to the terms of the license, revoke it in the event of the Fund's noncompliance with
conditions of the license or a material violation of Korean law. The Minister of
Finance and Economy may issue orders when it deems that transactions cannot be
normally concluded due to natural disaster, warfare, uprising, sudden change in
economic conditions, or other incidents similar thereto, or order the temporary
closing of the securities market or take other necessary measures. Under the Foreign
Exchange Transaction Act, the Minister of Finance and Economy has the power, with
prior public notice of scope and duration, to suspend all or a part of foreign exchange
transactions when emergency measures are deemed necessary in case of radical change
in the international or domestic economic situation. The Fund could be adversely
affected by delays in, or the refusal to grant, any required governmental approval for
such transactions.
</P>
<P ALIGN="LEFT">Currently there are certain restrictions with respect to investing in equity securities of
certain designated public corporations and telecommunication corporations listed on
the Korea Stock Exchange. As of December 31, 2001, four of the Fund's holdings
had an ownership limit still in place, Korea Telecom Corp., Korea Tobacco and
Ginseng Corp., LG Home Shopping, Inc. and SK Telecom Co., Ltd., all of which
had a foreign ownership limit of 49%.
</P>
<P ALIGN="LEFT"><B>E. Investing in the Korean Market</B>
</P>
<P ALIGN="LEFT">Investing in the Korean market may involve special risks and considerations not
typically associated with investing in the United States of America. These risks
include revaluation of currency, high rates of inflation, Korean taxes, repatriation
restrictions on income and capital, corporate bankruptcy and future adverse political
and economic developments. Moreover, securities issued in this market may be less
liquid, subject to government ownership controls, delayed settlements and their
prices more volatile than those of comparable securities in the United States of
America.
</P>
<P ALIGN="LEFT"><B>F. Line of Credit</B>
</P>
<P ALIGN="LEFT">The Fund and several affiliated funds (the &quot;Participants&quot;) share in a $1 billion
revolving credit facility with J. P. Morgan Chase &amp; Co. for temporary or emergency
purposes, that otherwise might require the untimely disposition of securities. The
Participants are charged an annual commitment fee which is allocated, pro rata based
upon net assets, among each of the Participants. Interest is calculated at the Federal
Funds Rate plus 0.5 percent. The Fund may borrow up to a maximum of 5 percent
of its net assets under the agreement.
</P>
<P ALIGN="LEFT"><B>G. Transactions in Securities of Affiliated Issuers</B>
</P>
<P ALIGN="LEFT">An affiliated issuer is a company in which the Fund has ownership of at least 5% of
the voting securities. A summary of the Fund's transactions during the period with
companies which are or were affiliates is as follows:
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">Affiliate</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Purchases
Cost ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Sales Cost ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Income ($)*</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Value ($)</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Anycell, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,903,312</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">BYC Co., Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,724,453</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Jedang Corp.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        10,163,706</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Home Shopping, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        29,375,516</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nam Yang Dairy Products Co.,
Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        10,924,119</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Partners, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,279,026</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">S.E. Co., Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,522,667</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Climate Control Co.,
Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3,150,476</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Electro-Mechanics
Co., Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        29,341,012</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Fire &amp; Marine
Insurance</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        7,803,517</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     </FONT></B><FONT SIZE="-2">-</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     </FONT></B><FONT SIZE="-2">-</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     </FONT></B><FONT SIZE="-2">-</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     97,187,804</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2">*    Net of foreign taxes withheld.</FONT></I><BR>
<P ALIGN="LEFT"><B>H. In-Kind Dividend</B>
</P>
<P ALIGN="LEFT">The Fund paid a special 10% in-kind dividend in the form of American Depository
Receipts (ADRs) of SK Telecom Co., Ltd. This special in-kind dividend aggregating
$70,333,447 was paid on February 28, 2001 to shareholders of record as of the close
of business on January 26, 2001. The special in-kind dividend was designated as a
long-term capital gain distribution for tax purposes.
</P>
<P ALIGN="LEFT"><B>I. Share Repurchases</B>
</P>
<P ALIGN="LEFT">On April 4, 2001, the Fund's Board of Directors approved a share repurchase plan
authorizing the Fund to effect periodic repurchases of its shares in the open market
from time to time when the Fund's shares trade at a discount to their NAV. During
the six months ended December 31, 2001, the Fund purchased 75,000 shares of
common stock on the open market at a total cost of $745,506. The average discount
of these purchases, comparing the purchase price to the net asset value at the time of
purchase, was 16.9%. These shares are held in treasury.
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="ria" ID="ria"></A>Report of Independent Accountants</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<H2 ALIGN="LEFT">To the Board of Directors and the Shareholders of
The Korea Fund, Inc.:</H2>
<P ALIGN="LEFT">In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all material
respects, the financial position of The Korea Fund, Inc. (the &quot;Fund&quot;) at
December 31, 2001, and the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated therein, in
conformity with accounting principles generally accepted in the United States
of America. These financial statements and financial highlights (hereafter
referred to as &quot;financial statements&quot;) are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with auditing standards generally accepted in the
United States of America which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits, which included confirmation of securities at December 31, 2001
by correspondence with the custodians and brokers, provide a reasonable basis
for our opinion.
</P>
<P ALIGN="LEFT">PricewaterhouseCoopers LLP
</P>
<P ALIGN="LEFT">Boston, Massachusetts<BR>
February 22, 2002
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="drip" ID="drip"></A>Dividend Reinvestment and Cash
Purchase Plan</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<H2 ALIGN="LEFT">The Plan</H2>
<P ALIGN="LEFT">The fund's Dividend Reinvestment and Cash Purchase Plan (the &quot;Plan&quot;) offers
you an automatic way to reinvest your dividends and capital gains
distributions in shares of the fund. The Plan also provides for cash investments
in fund shares of $100 to $3,000 semiannually through Scudder Investments
Service Company, the Plan Agent.
</P>
<H2 ALIGN="LEFT">Automatic Participation</H2>
<P ALIGN="LEFT">Each stockholder of record is automatically a participant in the Plan unless the
stockholder has instructed the Plan Agent in writing otherwise. Such a notice
must be received by the Plan Agent not less than 10 days prior to the record
date for a dividend or distribution in order to be effective with respect to that
dividend or distribution. A notice which is not received by that time will be
effective only with respect to subsequent dividends and distributions.
</P>
<P ALIGN="LEFT">Stockholders who do not participate in the Plan will receive all distributions in
cash paid by check in dollars mailed directly to the stockholder by Scudder
Investments Service Company, as dividend paying agent.
</P>
<H2 ALIGN="LEFT">Shares Held by a Nominee</H2>
<P ALIGN="LEFT">If your shares are held in the name of a brokerage firm, bank, or other
nominee as the stockholder of record, please consult your nominee (or any
successor nominee) to determine whether it is participating in the Plan on
your behalf. Many nominees are generally authorized to receive cash dividends
unless they are specifically instructed by a client to reinvest. If you would like
your nominee to participate in the Plan on your behalf, you should give your
nominee instructions to that effect as soon as possible.
</P>
<H2 ALIGN="LEFT">Pricing of Dividends and Distributions</H2>
<P ALIGN="LEFT">If the market price per share on the payment date for the dividend or
distribution (the &quot;Valuation Date&quot;) equals or exceeds net asset value per share
on that date, the fund will issue new shares to participants at the greater of the
following on the Valuation Date: (a) net asset value, or (b) 95% of the mean
market price. The Valuation Date will be the dividend or distribution
payment date or, if that date is not a New York Stock Exchange trading date,
the next preceding trading date. If the net asset value exceeds the market price
of fund shares at such time, participants in the Plan are considered to have
elected to receive shares of stock from the fund, valued at market price, on the
Valuation Date. In either case, for Federal income tax purposes, the
stockholder receives a distribution equal to the market value on Valuation
Date of new shares issued. State and local taxes may also apply. If the fund
should declare an income dividend or net capital gains distribution payable
only in cash, the Plan Agent will, as agent for the participants, buy fund shares
in the open market, on the New York Stock Exchange or elsewhere, for the
participants' account on, or shortly after, the payment date.
</P>
<H2 ALIGN="LEFT">Amendment of the Plan</H2>
<P ALIGN="LEFT">Effective June 13, 2001, the Plan has been amended to provide that if on the
Valuation Date the fund's shares are trading at a discount to net asset value,
the Plan Agent will use the dividend or distribution (less each participant's pro
rata share of brokerage commissions) to buy fund shares in the open market
for the participants' account. Such purchases will be made on or shortly after
the payment date for such dividend or distribution, and in no event more than
45 days after such date except where temporary curtailment or suspension of
purchase is necessary to comply with federal securities law.
</P>
<H2 ALIGN="LEFT">Voluntary Cash Purchases</H2>
<P ALIGN="LEFT">Participants in the Plan have the option of making additional cash payments
to the Plan Agent, semiannually, in any amount from $100 to $3,000, for
investment in the fund's shares. The Plan Agent will use all such monies
received from participants to purchase fund shares in the open market on or
about February 15 and August 15. Any voluntary cash payments received
more than 30 days prior to these dates will be returned by the Plan Agent, and
interest will not be paid on any uninvested cash payments. To avoid
unnecessary cash accumulations, and also to allow ample time for receipt and
processing by the Plan Agent, it is suggested that participants send in
voluntary cash payments to be received by the Plan Agent approximately ten
days before February 15, or August 15, as the case may be. A participant may
withdraw a voluntary cash payment by written notice, if the notice is received
by the Plan Agent not less than 48 hours before such payment is to be
invested.
</P>
<H2 ALIGN="LEFT">Participant Plan Accounts</H2>
<P ALIGN="LEFT">The Plan Agent maintains all participant accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information
needed by participants for personal and tax records. Shares in the account of
each plan participant will be held by the Plan Agent in non-certificated form
in the name of the participant, and each participant will be able to vote those
shares purchased pursuant to the Plan at a stockholder meeting or by proxy.
</P>
<H2 ALIGN="LEFT">No Service Fee to Reinvest</H2>
<P ALIGN="LEFT">There is no service fee charged to participants for reinvesting dividends or
distributions from net realized capital gains. The Plan Agent's fees for the
handling of the reinvestment of dividends and capital gains distributions will
be paid by the fund. There will be no brokerage commissions with respect to
shares issued directly by the fund as a result of dividends or capital gains
distributions payable either in stock or in cash. However, participants will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of any
dividends or capital gains distributions payable only in cash.
</P>
<H2 ALIGN="LEFT">Costs for Cash Purchases</H2>
<P ALIGN="LEFT">With respect to purchases of fund shares from voluntary cash payments, the
Plan Agent will charge $0.75 for each such purchase for a participant. Each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases of fund shares in
connection with voluntary cash payments made by the participant.
</P>
<P ALIGN="LEFT">Brokerage charges for purchasing small amounts of stock for individual
accounts through the Plan are expected to be less than the usual brokerage
charges for such transactions, because the Plan Agent will be purchasing stock
for all participants in blocks and pro-rating the lower commission thus
attainable.
</P>
<H2 ALIGN="LEFT">Amendment or Termination</H2>
<P ALIGN="LEFT">The fund and the Plan Agent each reserve the right to terminate the Plan.
Notice of the termination will be sent to the participants of the Plan at least
30 days before the record date for a dividend or distribution. The Plan also
may be amended by the fund or the Plan Agent, but (except when necessary or
appropriate to comply with applicable law, rules or policies of a regulatory
authority) only by giving at least 30 days' written notice to participants in the
Plan.
</P>
<P ALIGN="LEFT">A participant may terminate his account under the Plan by written notice to
the Plan Agent. If the written notice is received 10 days before the record day
of any distribution, it will be effective immediately. If received after that date,
it will be effective as soon as possible after the reinvestment of the dividend or
distribution.
</P>
<P ALIGN="LEFT">If a participant elects to sell his shares before the Plan is terminated, the Plan
Agent will deduct a $2.50 fee plus brokerage commissions from the sale
transaction.
</P>
<H2 ALIGN="LEFT">Plan Agent Address and Telephone Number</H2>
<P ALIGN="LEFT">You may obtain more detailed information by requesting a copy of the Plan
from the Plan Agent. All correspondence (including notifications) should be
directed to: The Korea Fund Dividend Reinvestment and Cash Purchase Plan,
c/o Scudder Investments Service Company, P.O. Box 219153, Kansas City,
MO 64121-9153, 1-800-294-4366.
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="smr" ID="smr"></A>Stockholder Meeting Results</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT">The Annual Meeting of Stockholders (the &quot;Meeting&quot;) of The Korea Fund,
Inc., (the &quot;Fund&quot;), was held on October 3, 2001, at the office of Zurich
Scudder Investments, Inc., 345 Park Avenue, New York, New York 10154.
At the Meeting, the following matter was voted upon by the stockholders (the
resulting votes are presented below).
</P>
<P ALIGN="LEFT">1.      To elect three Directors of the Fund to hold office for a term of three
years or until their respective successors shall have been duly elected and
qualified:
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Number of Votes:</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Directors</FONT></B>
<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">For</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Withheld</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nicholas Bratt</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">31,620,055</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">948,169</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Juris Padegs</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">31,598,377</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">969,847</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Susan Kaufman Purcell</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">31,574,291</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">993,933</FONT>
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="do" ID="do"></A>Directors and Officers</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP" ROWSPAN="12">
<P ALIGN="LEFT"><B><FONT SIZE="-2">JURIS PADEGS*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Chairman of the Board and Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">NICHOLAS BRATT*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">President and Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">ROBERT J. CALLANDER</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">KENNETH C. FROEWISS</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">WILLIAM H. LUERS</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">RONALDO A. da FROTA NOGUEIRA</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">SUSAN KAUFMAN PURCELL</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">KESOP YUN</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">WILLIAM H. GLEYSTEEN, JR.</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Honorary Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">WILSON NOLEN</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Honorary Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">ROBERT W. LEAR</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Emeritus Founding Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">TAI HO LEE</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Emeritus Founding Director</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">SIDNEY M. ROBBINS</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Emeritus Founding Director</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP" ROWSPAN="12">
<P ALIGN="LEFT"><B><FONT SIZE="-2">JUDITH A. HANNAWAY*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Vice President</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">JOHN J. LEE*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Vice President</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">DONG WOOK PARK</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Vice President</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">JOHN MILLETTE*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Vice President and Secretary</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">KATHRYN L. QUIRK*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Vice President and Assistant Secretary</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">JOHN R. HEBBLE*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Treasurer</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">THOMAS LALLY*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Assistant Treasurer</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">BRENDA LYONS*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Assistant Treasurer</FONT>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-2">CAROLINE PEARSON*</FONT></B>
</P>
<P ALIGN="LEFT"><FONT SIZE="-2">Assistant Secretary</FONT>
</P>
</TD>
</TR>
</TABLE>
<BR>
<I><FONT SIZE="-2">*    Zurich Scudder Investments, Inc.</FONT></I><BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="priv" ID="priv"></A>Privacy Statement January 2002</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT">This privacy statement is issued by Zurich Scudder Investments, Inc. (Scudder), its
affiliates Scudder Distributors, Inc., Scudder Financial Services, Inc., Scudder
Investor Services, Inc., Scudder Trust Company, and each of the funds managed or
advised by Scudder. We consider privacy fundamental to our client relationships and
adhere to the policies and practices described below to protect current and former
clients' information.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">We never sell customer lists or individual client information.</FONT></B> Internal policies
are in place to protect confidentiality, while allowing client needs to be served. Only
individuals who need to do so in carrying out their job responsibilities may access
client information. We maintain physical, electronic and procedural safeguards that
comply with federal standards to protect confidentiality. These safeguards extend to
all forms of interaction with us, including the Internet.
</P>
<P ALIGN="LEFT">In the normal course of business, clients give us nonpublic personal information on
applications and other forms, on our Web sites, and through transactions with us or
our affiliates. To be able to serve our clients, information is shared with affiliates and
other companies. Specifically, we disclose client information to parties that perform
various services for us, such as transfer agents, custodians, and broker-dealers.
Limited information also may be shared with affiliates, with companies with which
we have joint marketing agreements, or with other parties as required by law. Any
organization receiving client information may only use it for the purpose designated
by Scudder.
</P>
<P ALIGN="LEFT">Questions on this policy may be sent to:
</P>
<P ALIGN="LEFT">Zurich Scudder Investments, Attention: Correspondence - Chicago,
</P>
<P ALIGN="LEFT">P.O. Box 219415, Kansas City, MO 64121-9415.
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT">
</P>
</TD>
</TR>


</TABLE>
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