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<SEC-DOCUMENT>0000088053-02-000885.txt : 20020826
<SEC-HEADER>0000088053-02-000885.hdr.sgml : 20020826
<ACCEPTANCE-DATETIME>20020826121121
ACCESSION NUMBER:		0000088053-02-000885
CONFORMED SUBMISSION TYPE:	N-30D
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20020630
FILED AS OF DATE:		20020826

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:		02747852

	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>ANNUAL REPORT
<TEXT>
<!doctype html PUBLIC "-//IETF//DTD HT
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<head>
<title>Zurich Scudder Investments</title>
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<BODY BGCOLOR=#ffffff><P ALIGN="JUSTIFY">[Korea Fund logo]
 <BR>
</P>
<TABLE WIDTH="500" BGCOLOR="#CCCCCC" CELLPADDING="0" CELLSPACING="0">
<TR>
<TD ALIGN="LEFT"  VALIGN="TOP" COLSPAN="3" BGCOLOR="#CCCCCC">
<P ALIGN="LEFT"><FONT SIZE="+3">The Korea Fund, Inc.</FONT>
</P>
<H1 ALIGN="LEFT">Annual Report</H1>
<H1 ALIGN="LEFT">June 30, 2002</H1>
<P ALIGN="LEFT">A closed-end investment company seeking long-term capital appreciation
through investment in Korean securities.
</P>
</TD>
</TR>


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<BR>
<BR>
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<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section2C0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">The Korea Fund, Inc.</H1>
</TD>
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<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
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<P ALIGN="RIGHT">
</P>
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<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="TOP"><IMG SRC="new_section.gif" ALT="new_section2B0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">General Information</H1>
</TD>
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<P ALIGN="RIGHT">
</P>
</TD>
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</P>
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<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 and Registrar</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">Dividend Reinvestment <BR>
Plan Agent</H3>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">UMB Bank, N.A.
</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>

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<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>

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<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="2">
<H3 ALIGN="LEFT">New York Stock Exchange Symbol - KF</H3>
</TD>
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<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section2A0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">Contents</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
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<P ALIGN="RIGHT">
</P>
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<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="#tax">&lt;Click Here&gt;</A></FONT>    Tax Information
</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="#drip">&lt;Click Here&gt;</A></FONT>   Dividend Reinvestment and Cash Purchase Plan
</P>
<P ALIGN="LEFT"><FONT COLOR="#3300d9">  <A HREF="#do">&lt;Click Here&gt;</A></FONT>     Directors and Officers
</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="TOP"><IMG SRC="new_section.gif" ALT="new_section290"></TD>
<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" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
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<P ALIGN="RIGHT">
</P>
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<BR>
<H2 ALIGN="LEFT">Dear Stockholders:</H2>
<P ALIGN="LEFT">Posting 24.80 percent increase in local currency terms and 35.11 percent
increase in U.S. dollar terms, the KOSPI Index was among the strongest stock
markets in the world for the one-year period ended June 30, 2002. The Korea
Fund's total return based on net asset value (NAV) was 56.39 percent for the
one-year period ended June 30, 2002, significantly outpacing its benchmark.
The fund's share price on the New York Stock Exchange closed at $16.44 per
share, representing a discount of 18.61 percent to NAV on that date. The
fund's total return based on share price was 56.71 percent for the one-year
period ended June 30, 2002.
</P>
<H2 ALIGN="LEFT">Consumer Proves Vital to Korean Economy</H2>
<P ALIGN="LEFT">In the last report, we discussed several factors that have contributed to a
stronger economy in Korea, with improving consumer confidence playing a
key role. These trends have persisted. Indeed, strong domestic consumption
along with an increased regional appetite for Korean exports depleted
inventory and triggered increased production over the past year. Corporate
profits remained healthy. Economic growth as measured by gross domestic
product is now close to six percent, and the rate for 2002 is expected to be
around five to six percent. Domestic demand has remained strong due to a
combination of rising income, lower interest rates, credit expansion and
improving consumer confidence, reinforced by optimism over structural
reform. Finally, the way of life for business in Korea has been altered
fundamentally by the taming of the influence exerted by the <I>chaebols</I> -
overextended, state-backed conglomerates whose priorities typically do not
include shareholder value. Since 1998, roughly half of the Korean <I>chaebols</I>
have been either downsized or eliminated altogether.
</P>
<P ALIGN="LEFT">Toward the end of the period under review, however, the influence of the
strong consumer demand in the Korean markets slackened somewhat. While
the Korean economic recovery is not heavily dependent on an upturn in U.S.
technology investments, improvements in this sector will reinforce any
complete recovery. Severe weakness in the U.S. stock market, particularly in
the technology sector, had a negative impact on Korea's market. Political
uncertainty with the upcoming presidential election and the investigations and
indictment of some of President Kim Dae Jung's family members also
contributed to the enhanced volatility in recent months.
</P>
<H2 ALIGN="LEFT">Fund Performance and Strategy</H2>
<P ALIGN="LEFT">The fund has been well-positioned to take advantage of the strong Korean
economy and markets. We had aggressively added blue chip stocks last year in
a defensive response to various global factors. As a result, several positions were
overweight relative to the benchmark, which contributed strongly to
performance when these equities rallied. For example, Kookmin Bank, fueled
in part by merger euphoria, was up 127.4 percent for the period, and our stake
there was 5.26 percent heavier than the index's. Similarly, Samsung Fire &amp;
Marine Insurance and LG Home Shopping contributed significantly to
returns. We also experienced success with turnaround-story Hyundai
Department Store, which was up 132.9 percent for the one-year period. This
company continues to benefit from exceptionally strong domestic consumer
demand and the resulting revenue growth. Our relative performance was also
helped by our underweight in or absence from select poorly performing, large
capitalization stocks such as Korea Electric Power.
</P>
<P ALIGN="LEFT">Our strategy has not changed. We remain overweighted in financials, where
corporate reform is increasingly apparent. Accounting transparency is key in
these cases. This is an issue which has taken on global significance given a
number of highly publicized accounting scandals, especially in the United
States We also focus on businesses that stand to benefit from strong consumer
demand, such as retailers.
</P>
<P ALIGN="LEFT">As announced in recent communications, Zurich Scudder Investments, Inc.
was acquired by Deutsche Bank AG in April. While the investment
management, philosophy, objective and processes of The Korea Fund were not
affected by this development, the new investment owner provides broader
research capabilities and resources. This enhancement is important in an
equity market that is still quite young and where research coverage is light.
While a handful of the largest Korean companies are regularly researched by
analysts worldwide, countless lesser-known businesses have demonstrated
strong earnings capabilities. Our expanded capabilities reinforce our focus on
fundamental research that seeks to identify attractively valued, well-managed
companies with strong balance sheets and solid prospects for long-term
growth.
</P>
<H2 ALIGN="LEFT">Trendsetting and Outlook</H2>
<P ALIGN="LEFT">We are monitoring the broadband industry in Korea carefully, because there
are very interesting opportunities in this sector. Sixty percent of South Korea's
households access the Internet via broadband, which is the highest household
penetration in the world. We expect this to increase significantly in the near
future. It is noteworthy that such penetration is only at 45 percent in the
United States The transformation of Seoul's suburbia into a truly digital city
could be globally trend-setting. Plans are in the works for the citizens of
Seongnam to be able to use digital mobile phones to pay for all purchases
within the city, including from vending machines.
</P>
<P ALIGN="LEFT">There is some concern that the recent weakening of the U.S. dollar will hurt
Korean exports - the corresponding strengthening of the won could render
Korean exports more expensive and dampen economic growth. Of greater
concern is the potential for higher inflation, as economic growth in Korea
continues at a strong clip. The central bank appears to be addressing this
situation, having already raised interest rates. Korea continues to open its
economy, both domestically and internationally. As it diversifies its export
markets, it becomes increasingly less dependent on developments in the
United States It is ideally located to benefit from resurgent growth in the
Pacific Basin, and already China has become its second largest export market.
Finally, although the political noise around the upcoming presidential election
will likely be acute over the near term, we believe reform will proceed
regardless of any shifts in the political makeup of the country. We continue to
see more shareholder-oriented practices being adopted by management, which
over the long term enhance transparency and profitability, regardless of
currency dynamics or politics.
</P>
<P ALIGN="LEFT">We appreciate your continued support of The Korea Fund. We take pride in
our family of closed-end funds and look forward to answering any questions
you may have about them. Please feel free to contact our Shareholder
Services/Information Line at (800) 349-4281.
</P>
<P ALIGN="LEFT">Sincerely,<BR><U>/s/ Nicholas Bratt</U>
<BR> <U>/s/ Richard T. Hale</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">Richard T. Hale<BR>
Chairman of the Board<BR>
and Director
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">The views expressed in this report reflect those of the portfolio managers only through the end of the
period of the report as stated on the cover. The managers' views are subject to change at any time,
based on market and other conditions and should not be construed as a recommendation.</FONT></I>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section280"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="other" ID="other"></A>Other Information</H1>
</TD>
</TR>

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<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
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</P>
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</TABLE>
<BR>
<H2 ALIGN="LEFT">Investment Manager</H2>
<P ALIGN="LEFT">On April 5, 2002, Zurich Scudder Investments (ZSI) was acquired by
Deutsche Bank. Upon the closing of this transaction, ZSI became part of
Deutsche Asset Management and changed its name to Deutsche Investment
Management Americas Inc.
</P>
<P ALIGN="LEFT">Deutsche Investment Management Americas Inc. (DeIM), which is part of
Deutsche Asset Management, is the investment manager ( &quot;Manager&quot;) for The
Korea Fund, Inc. DeIM has more than 80 years of experience managing
mutual funds and provides a full range of investment advisory services to
institutional and retail clients. DeIM is also responsible for selecting brokers
and dealers and for negotiating brokerage commissions and dealer charges.
</P>
<P ALIGN="LEFT">Deutsche Asset Management is a global asset management organization that
offers a wide range of investing expertise and resources, including more than
500 portfolio managers and analysts and an office network that reaches the
world's major investment centers. This well-resourced global investment
platform brings together a wide variety of experience and investment insight,
across industries, regions, asset classes and investing styles.
</P>
<P ALIGN="LEFT">DeIM is an indirect, wholly-owned subsidiary of Deutsche Bank AG.
Deutsche Bank AG is a major global banking institution that is engaged in a
wide range of financial services, including investment management, mutual
fund, retail, private and commercial banking, investment banking and
insurance.
</P>
<P ALIGN="LEFT">In addition to the fund, DeIM also manages the assets of other closed-end
investment companies which invest primarily in foreign securities including:
Scudder New Asia Fund, Inc., The Brazil Fund, Inc., Scudder Global High
Income Fund, Inc., The Germany Fund, The New Germany Fund and The
Central European Equity Fund.
</P>
<H2 ALIGN="LEFT">Korean Advisor</H2>
<P ALIGN="LEFT">Effective July 9, 2002, Deutsche Investments Trust Management Company
Limited, an affiliate of Deutsche Investment Management Americas Inc.,
serves as subadvisor to the fund. Deutsche Investments Trust Management
Company Limited renders investment advisory and management services with
regard to the portion of the fund's portfolio that is allocated to it by Deutsche
Investment Management Americas Inc. from time-to-time for management.
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. 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 the fund's 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">37</A>. You may obtain
more detailed information by requesting a copy of the Plan from the Transfer
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 219066, Kansas City,
MO 4121-9066, 1-800-294-4366.
</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 the Manager 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 year ended June 30, 2002, 75,000 fund shares were
purchased by the fund.
</P>
<H2 ALIGN="LEFT">Net Asset Value</H2>
<P ALIGN="LEFT">The fund's NAV is published weekly on Monday and the fund's Market Value
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>
</P>
<H2 ALIGN="LEFT">Investment Policy Effective July 31, 2002:</H2>
<P ALIGN="LEFT">The fund's investment policy and supporting disclosure was changed to the
following, effective July 31, 2002:
</P>
<P ALIGN="LEFT">It is the policy of the fund normally to invest at least 80% of its net assets, plus
the amount of any borrowings for investment purposes, in securities listed on
the Korea Stock Exchange. The Board will provide stockholders with at least
60 days' notice prior to making any changes to this 80% investment policy.
</P>
<P ALIGN="LEFT">
</P>
<BR>
<TABLE BORDER="1">
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<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section270"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="invsum" ID="invsum"></A>Investment Summary    as of June 30, 2002</H1>
</TD>
</TR>

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<P ALIGN="RIGHT">
</P>
</TD>
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<P ALIGN="RIGHT">
</P>
</TD>
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<TABLE BORDER="1">
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<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">-7.07</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">-2.60</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">-8.39</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">-22.04</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">56.71</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">56.71</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">56.39</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">56.39</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">35.11</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">35.11</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">24.80</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">24.80</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">28.65</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">8.76</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">32.63</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9.87</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-18.95</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-6.76</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-15.89</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-5.60</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">29.74</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5.35</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">77.64</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">12.18</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-26.61</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-6.00</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-.36</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-.07</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">115.42</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7.98</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">155.24</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9.82</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-11.50</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-1.21</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">34.54</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3.01</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 June 30</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_psi180.gif" ALT="kor_psi180"></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</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"><B><FONT SIZE="-2">2002</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">11.40</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">18.66</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">19.89</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">18.52</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13.22</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5.63</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">17.72</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">20.04</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">20.20</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">.18</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</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">1.41</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.12</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total<BR>
Return (%)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">8.20</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">63.77</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13.00</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-5.09</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-24.40</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-57.41</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">214.74</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13.09</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-25.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">56.39</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)  KOSPI in local terms.</FONT></I><BR>
<P ALIGN="LEFT"><I><FONT SIZE="-2">KOSPI is a capitalization-weighted index of all common shares on the Korea Stock Exchanges. Index
returns assume reinvestment of all dividends and unlike Fund returns, do not reflect any fees or
expenses. It is not possible to invest directly into an index.</FONT></I>
</P>
<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>
<P ALIGN="LEFT"><B><I><FONT SIZE="-2">Past results are not necessarily indicative of future performance of the Fund.</FONT></I></B>
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section260"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="portsum" ID="portsum"></A>Portfolio Summary   as of June 30, 2002</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Asset Allocation</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">6/30/02</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">6/30/01</FONT></B>
</P>
</TD>
</TR>

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

<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Common Stocks</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">84%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">81%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Preferred Stocks</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">6%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cash Equivalents</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9%</FONT><BR>
</TD>
</TR>

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

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

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


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM">
<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="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">6/30/02</FONT></B>
</P>
</TD>
<TD BGCOLOR="#000000" ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2" COLOR="#ffffff">6/30/01</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" 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">26%</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">24%</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">7%</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">Manufacturing</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">Metals &amp; Minerals</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">6%</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">Consumer Staples</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">5%</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">4%</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">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">3%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">6%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">100%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<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>
<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 June 30, 2002 </FONT></B><FONT SIZE="-2" COLOR="#ffffff">(66.1% 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">15.0%</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">11.8%</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">9.7%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     4.      Samsung Fire &amp; Marine Insurance Co., Ltd.</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">7.7%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     5.      POSCO</FONT></B>
<BR><FONT SIZE="-2">Manufacturer of hot and cold rolled steel products</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">5.5%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     6.      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">3.9%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     7.      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">     8.      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">3.1%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     9.      KT 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">2.9%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     10.     Hyundai Motor Co., Ltd.</FONT></B>
<BR><FONT SIZE="-2">Manufacturer and seller of cars, trucks and commercial vehicles</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<P ALIGN="RIGHT"><B><FONT SIZE="-2" COLOR="#3300d9">2.8%</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 <A HREF="#portfolio">15</A>. 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="TOP"><IMG SRC="new_section.gif" ALT="new_section250"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="portfolio" ID="portfolio"></A>Investment Portfolio    as of June 30, 2002</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<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 84.2%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Communications 15.8%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Cellular Telephone 12.9%</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">28,870,375</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">75,717,627</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">15,075,667</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">119,663,669</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Telephone/Communications 2.9%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">KT Corp. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">406,240</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">16,310,384</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">KT 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">10,717,833</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">27,028,217</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Discretionary 6.2%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Department &amp; Chain Stores 1.5%</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">80,003</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13,566,594</FONT><BR>
</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">308,391</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,612,452</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">6,670,823</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">8,283,275</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Specialty Retail 3.8%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Home Shopping, Inc. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">332,900</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">36,527,681</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Staples 4.5%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Alcohol &amp; Tobacco 1.9%</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">3,083,957</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">652,870</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">8,466,145</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">890,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,788,115</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">17,338,217</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Food &amp; Beverage 2.3%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Jedang Corp. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">99,606</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4,069,522</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nam Yang Dairy Products Co., Ltd. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">43,390</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">11,920,528</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">5,874,377</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">21,864,427</FONT>
</P>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">BYC Co., Ltd. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">39,530</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,718,553</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Tae Kwang Industry Co., Ltd. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">6,720</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">745,736</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">2,464,289</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">6,820,263</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">3,325,021</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">10,145,284</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Energy 0.8%</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">7,868,579</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financial 23.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Banks 14.1%</FONT></B><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">48,262,964</FONT><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">61,792,216</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">12,197,631</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Koram Bank Ltd. (GDR)*</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">363,700</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,236,930</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">5,741,945</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">131,231,686</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Insurance 6.7%</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">2,243,279</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Fire &amp; Marine Insurance Co., Ltd. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">979,625</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">60,259,559</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">62,502,838</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Other Financial Companies 2.2%</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">147,543</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">829,086</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">9,097,257</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hankang Restructuring Fund (e)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,724,310</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,010,017</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">3,503,741</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">3,717,373</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">20,157,474</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Health 0.2%</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">1,547,899</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Manufacturing 5.9%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Chemicals 1.5%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Chemical 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">1,023,628</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Chemical 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">7,683,409</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">5,652,535</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">14,359,572</FONT>
</P>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dae Young Packaging Co., Ltd.* (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">206,191</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">197,107</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diversified Manufacturing 3.2%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Anycell, Inc.* (b) (f) (g)</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">2,078,138</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">1,084,396</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7,815,223</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">2,688,279</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">9,930,382</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hyundai Mobis* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">350,480</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7,399,993</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">2,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7,315</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">29,919,330</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electrical Products 0.6%</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">92,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,284,456</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">192,400</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,242,683</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Climate Control Co., Ltd. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">827,630</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,267,866</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">4,510,549</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">1,288,440</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Media 0.5%</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">1,780,549</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.* (f) (g)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">120,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,493,766</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Metals &amp; Minerals 5.5%</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">623,441</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">POSCO </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">443,430</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">49,208,566</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">POSCO (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">1,980,020</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">51,812,027</FONT>
</P>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Miscellaneous Commercial Services 1.1%</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">10,975,825</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Miscellaneous Consumer Services 0.4%</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">486,849</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,419,679</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Technology 18.7%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diverse Electronic Products 0.7%</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">3,330,009</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Partners, Inc.* (b) (f) (g)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">105,579</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,396,509</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">SE Co., Ltd.* (b) (f) (g)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">636,950</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,662,530</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">6,389,048</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electronic Components/Distributors 18.0%</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">712,460</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">5,809,836</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Electro-Mechanics Co., Ltd. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">627,005</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">30,386,028</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">113,292,777</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">19,004,588</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">168,493,229</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Utilities 0.5%</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">260,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4,754,780</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Common Stocks</B> (Cost $395,070,046)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">785,868,486</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Preferred Stocks 9.7%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Discretionary 0.7%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Department &amp; Chain Stores 0.7%</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">6,631,016</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">138,357</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Staples 0.7%</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. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">297,200</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4,187,481</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Jedang Corp. (2nd) (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">50,335</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,092,056</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cheil Jedang Corp. (3rd) (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">30,201</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">622,598</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Nam Yang Dairy Products Co., Ltd. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,160</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">196,226</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">6,098,361</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Durables 2.7%</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">17,365,000</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">8,441,940</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">25,806,940</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Energy 0.0%</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">431,461</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 1.2%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Samsung Fire &amp; Marine Insurance Co., Ltd.</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">533,850</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">11,826,353</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Other Financial Companies 0.5%</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">335,860</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,125,117</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">186,020</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">590,687</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">2,574,647</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">4,290,451</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">770,077</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Manufacturing 0.3%</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 Chemical 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">2,566,956</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Technology 3.5%</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. (b)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">180,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4,473,815</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">26,855,165</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">1,387,839</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">32,716,819</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Preferred Stocks</B> (Cost $41,270,604)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">91,276,791</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
Amount ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Value ($)</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 2.5%</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 Confectionary Loan Certificates, 11/28/2009 (f) (i)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">107,345,702</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">65,574</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financial 1.4%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Exchange Bank, 13.75%, 6/30/2010  U.S.$</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">12,050,000</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Woori Financial Holdings Co., Ltd., 5.0%, 7/16/2003 (f)</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">1,130,996</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><FONT SIZE="-2">13,180,996</FONT>
</P>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Electric Power Corp., 6.375%, 12/1/2003   U.S.$</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10,422,000</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Corporate Bonds</B> (Cost $20,193,984) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">23,668,570</FONT></B>
</P>
</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 (d) (f)</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">2,308,746</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Technology 0.0%</FONT></B>
<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">SE Co., Ltd., 4.0%, with 38.61% bonus interest at
maturity, 12/31/2003 (d) (f) (g)</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">415,628</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Convertible Bonds</B> (Cost $2,620,573) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">2,724,374</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">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 0.1%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financial</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 Holdings Co., Ltd.* (Cost $0) (f) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">276,302</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">630,891</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">Cash Equivalents 3.2%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Scudder Cash Management QP Trust, 1.93% (c)
(Cost $30,320,126)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">30,320,126</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">30,320,126</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Investment Portfolio - 100.0%</B> (Cost $489,475,333) (a)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">934,489,238</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 $491,745,373. At June 30, 2002, net unrealized
appreciation for all securities based on tax cost was $442,743,865. This consisted of aggregate
gross unrealized appreciation for all securities in which there was an excess of value over tax cost
of $467,007,948 and aggregate gross unrealized depreciation for all securities in which there was
an excess of tax cost over value of $24,264,083.</FONT></I><BR>
<I><FONT SIZE="-2">(b)  Affiliated issuers (see Notes to Financial Statements).</FONT></I><BR>
<I><FONT SIZE="-2">(c)  Scudder Cash Management QP Trust is also managed by Deutsche Investment Management
Americas Inc. The rate shown is the annualized seven-day yield at period end.</FONT></I><BR>
<I><FONT SIZE="-2">(d)  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">(e)  Managed by Deutsche Investment Management Americas Inc.</FONT></I><BR>
<I><FONT SIZE="-2">(f)  Securities valued at fair value by management and approved in good faith following procedures
approved by the Directors, amounted to $12,182,778 (1.2% of net assets at June 30, 2002 and
2.3% at June 30, 2001). Their values have been estimated by management in the absence of
readily ascertainable market values. However, because of the inherent uncertainty of valuation,
those estimated values may differ significantly from the values that would have been used had a
ready market for the securities existed, and the difference could be material. The cost of these
securities at June 30, 2002 aggregated $11,581,704. The securities may also have certain
restrictions as to resale.</FONT></I><BR>
<I><FONT SIZE="-2">(g)  Included in (f) above are restricted securities with a value which aggregated $8,046,571 (.80% of
net assets) at June 30, 2002. No quoted market price exists for these private placement securities. </FONT></I><BR>
<I><FONT SIZE="-2">     The issuers of these securities have given the Fund a put option, payable on demand. Information
concerning such private placement securities at June 30, 2002 is as follows:</FONT></I><BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">Security</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Acquisition
Date</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Cost ($)</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. </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">SE 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">SE 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">(h)  Principal amount stated in Korean Won unless otherwise noted. U.S.$ represents United States
Dollars.</FONT></I><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="TOP"><IMG SRC="new_section.gif" ALT="new_section240"></TD>
<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" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<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 June 30, 2002</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 $441,470,119)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       830,692,600</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Affiliated issuers (cost $48,005,214)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        103,796,638</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total investments in securities, at value (cost $489,475,333)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        934,489,238</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korean Won, at value (cost $41,116,577)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        43,641,706</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Receivable for investments sold</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        25,592,609</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">        6,269,668</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">        862,186</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">        1,010,855,407</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">        849,140</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">        799,000</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">        326,539</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">        1,974,679</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">$    1,008,880,728</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">Net assets consist of:</FONT><BR>
<FONT SIZE="-2">Undistributed net investment income</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        8,099,620</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">        445,013,905</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">        2,842,733</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">        31,641,896</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">        522,028,080</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">$    1,008,880,728</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 ($1,008,880,728 / 49,939,049 shares of common
stock issued and outstanding, $.01 par value, 200,000,000 shares
authorized)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    20.20</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>
<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 year ended June 30, 2002</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 $2,308,600)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       10,801,105</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dividends - Affiliated issuers (net of foreign taxes withheld of $270,590)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,374,682</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Interest - Unaffiliated issuers (net of foreign taxes withheld of $39,629)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3,348,448</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total Income (net of foreign taxes withheld of $2,618,819)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        15,524,235</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">        8,109,110</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">        45,161</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">        1,142,255</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Auditing</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        166,192</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Legal</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        173,500</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">        99,481</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">        30,941</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Other</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        204,999</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">        9,971,639</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">        (53,600)</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">        9,918,039</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">     5,606,196</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 - Unaffiliated issuers</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        25,643,606</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Investments - Affiliated issuers</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        9,561,022</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">        2,542,733</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        37,747,361</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">        318,735,886</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">        2,903,356</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        321,639,242</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">     359,386,603</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">$    364,992,799</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>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Statement of Changes in Net Assets</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" ROWSPAN="2">
<B><FONT SIZE="-1">Increase (Decrease) in Net Assets</FONT></B>
<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Years Ended June 30,</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">2002</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-1">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">$       5,606,196</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">        37,747,361</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">        321,639,242</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">        364,992,799</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">        (5,992,069)</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">        72,311</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">        (673,195)</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">        358,327,535</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 undistributed
net investment income of $8,099,620 at June 30, 2002)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    1,008,880,728</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">        5,147</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">        (69,853)</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">        49,939,049</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="TOP"><IMG SRC="new_section.gif" ALT="new_section230"></TD>
<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" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<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">2002</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>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="6">
<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>
</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>a</SUP></FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .11</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>
</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">        7.20</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>
</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">        7.31</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>
</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>
</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>
</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>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Antidilution (dilution) resulting from
repurchases and reinvestment of distributions
for shares at value</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .00<SUP>b</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>
</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">$    20.20</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>
</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">$    16.44</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>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="6">
<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">        56.39</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>
</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">        56.71</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>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="6">
<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">        1,009</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>
</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">        1.21</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>
</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">        1.21</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>
</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">        .69</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>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Portfolio turnover rate (%)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        18</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>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2"><SUP>a</SUP> Based on average shares outstanding during the period.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>b</SUP> Amount is less than $.005 per share.</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>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section220"></TD>
<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" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<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 June 30, 2002, the exchange rate for Korean Won was U.S. $.00083 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 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">At June 30, 2002, the Fund's components of distributable earnings on a tax basis are
as follows:
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Undistributed ordinary income*</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       8,205,187</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Undistributed net long-term capital gains</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       33,806,369</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Capital loss carryforwards</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       -</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Unrealized appreciation (depreciation) on investments</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       442,743,865</FONT>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT">In addition, during the year ended June 30, 2002 the tax character of distributions
paid to shareholders by the Fund is summarized as follows:
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Distributions from long-term capital gains</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       5,992,069</FONT>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2">*    For tax purposes short-term capital gains distributions are considered ordinary income distributions.</FONT></I><BR>
<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.
</P>
<P ALIGN="LEFT"><B>B. Purchases and Sales of Securities</B>
</P>
<P ALIGN="LEFT">During the year ended June 30, 2002, purchases and sales of investment securities
(excluding short-term investments) aggregated $136,376,639 and $172,017,358,
respectively.
</P>
<P ALIGN="LEFT"><B>C. Related Parties</B>
</P>
<P ALIGN="LEFT">On April 5, 2002, 100% of Zurich Scudder Investments, Inc. (&quot;ZSI&quot;) was acquired
by Deutsche Bank AG with the exception of Threadneedle Investments in the U.K.
Upon the closing of this transaction, ZSI became part of Deutsche Asset
Management and changed its name to Deutsche Investment Management Americas
Inc. (&quot;DeIM&quot; or the &quot;Manager&quot;). Effective April 5, 2002, the investment
management agreements with ZSI were terminated and DeIM became the
investment advisor for the Fund. The Investment Management Agreement (the
&quot;Management Agreement&quot;) is the same in all material respects as the corresponding
previous Management Agreement.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Management Agreement.</FONT></B> Under the Management Agreement, 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 monthly 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. The value of Hankang Restructuring Fund, which is
managed by the Manager, has been excluded from the net assets used to calculate the
management fee. For the year ended June 30, 2002, the Manager did not impose a
portion of its fee amounting to $53,600, and the portion imposed amounted to
$8,055,510 which was equivalent to an annual effective rate of 0.98% of the Fund's
average month-end net assets.
</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 year ended June 30, 2002, the amount charged to the Fund by SISC
aggregated $16,000, of which $1,350 is unpaid at June 30, 2002.
</P>
<P ALIGN="LEFT">Scudder Service Corporation (&quot;SSC&quot;), a subsidiary of the Manager, is the shareholder
communications agent of the Fund. For the year ended June 30, 2002, the amount
charged to the Fund by SSC aggregated $15,000, of which $1,250 is unpaid at
June 30, 2002.
</P>
<P ALIGN="LEFT">Scudder Fund Accounting Corporation (&quot;SFAC&quot;), also 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 year ended June 30,
2002, the amount charged to the Fund by SFAC aggregated $376,631, of which
$38,929 is unpaid at June 30, 2002.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Directors' Fees and Expenses.</FONT></B> The Fund pays each Director not affiliated with the
Manager retainer fees plus specified amounts for attended board and committee
meetings.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Scudder Cash Management QP Trust.</FONT></B> Pursuant to an Exemptive Order issued by
the SEC, the Fund may invest in the Scudder Cash Management QP Trust (the &quot;QP
Trust&quot;) and other affiliated funds managed by the Manager. The QP Trust seeks to
provide as high a level of current income as is consistent with the preservation of
capital and the maintenance of liquidity. The QP Trust does not pay the Manager a
management fee for the affiliated funds' investments in the QP Trust. Distributions
from the QP Trust to the Fund for the year ended June 30, 2002 totaled $20,083
and are reflected as interest income on the Statement of Operations.
</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 June 30, 2002, five of the Fund's holdings had an
ownership limit still in place, KT Corp., KT Freetel, 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 other affiliated funds (the &quot;Participants&quot;) share in a $1.3 billion
revolving credit facility administered by J. P. Morgan Chase Bank for temporary or
emergency purposes that otherwise might require the untimely disposition of
securities. The Participants are charged an annual commitment fee which is allocated,
pro rata based upon net assets, among each of the Participants. Interest is calculated
at the Federal Funds Rate plus 0.5 percent. The Fund may borrow up to a maximum
of 5 percent of its net assets under the agreement.
</P>
<P ALIGN="LEFT"><B>G. Transactions in Securities of Affiliated Issuers</B>
</P>
<P ALIGN="LEFT">An affiliated issuer is a company in which the Fund has ownership of at least 5% of
the voting securities. A summary of the Fund's transactions during the year ended
June 30, 2002 with companies which are or were affiliates is as follows:
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">Affiliate</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Common/Preferred
Shares</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Purchases
Cost ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Sales
Cost ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Realized
Gain/
Loss ($)</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Dividend
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">        1,250,000</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">        2,078,138</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">        39,530</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">        12,438</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,718,553</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">        477,342</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">        235,510</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        9,971,657</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Dae Young
Packaging
Co., Ltd</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        206,191</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        963,124</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">        197,107</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">        332,900</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        18,994,755</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        6,314,967</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        773,866</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        36,527,681</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">        44,550</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">        25,338</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        12,116,754</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">        105,579</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">        1,396,509</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">SE Co., Ltd.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        636,950</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">        1,662,530</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">        827,630</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">        14,246</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3,267,866</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">        807,005</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        10,044,620</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        3,246,055</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        313,284</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        34,859,843</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">     963,124</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     29,039,375</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     9,561,022</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     1,374,682</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     103,796,638</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2">*    Net of foreign taxes withheld.</FONT></I><BR>
<P ALIGN="LEFT"><B>H. Share Repurchases</B>
</P>
<P ALIGN="LEFT">The Fund has a share repurchase plan 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 year ended June 30, 2002, 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="TOP"><IMG SRC="new_section.gif" ALT="new_section210"></TD>
<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" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<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
June 30, 2002, 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 June 30, 2002 by
correspondence with the custodians and brokers, provide a reasonable basis for
our opinion.
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Boston, Massachusetts<BR>
August 16, 2002
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">        PricewaterhouseCoopers LLP
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section200"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="tax" ID="tax"></A>Tax Information     (Unaudited)</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT">The Fund paid distributions of $0.12 per share from net long-term capital
gains during its year ended June 30, 2002, of which 100% represents 20%
rate gains.
</P>
<P ALIGN="LEFT">Pursuant to Section 852 of the Internal Revenue Code, the Fund designates
$38,678,000 as capital gain dividends for its year ended June 30, 2002, of
which 100% represents 20% rate gains.
</P>
<P ALIGN="LEFT">The Fund paid foreign taxes of $2,618,819 and earned $9,201,385 of foreign
source income during the year ended June 30, 2002. Pursuant to Section 853
of the Internal Revenue Code, the Fund designates $0.05 per share as foreign
taxes paid and $0.18 per share as income earned from foreign sources for the
year ended June 30, 2002.
</P>
<P ALIGN="LEFT">Please consult a tax advisor if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your account, please call 1-800-SCUDDER.
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section1F0"></TD>
<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" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT">A Special Meeting of Stockholders of The Korea Fund, Inc. (the &quot;fund&quot;),
was held on March 28, 2002, at the office of Deutsche Investment
Management Americas Inc. (then known as Zurich Scudder Investments,
Inc.), Two International Place, Boston, Massachusetts 02110. At the meeting,
the following matters were voted upon by the stockholders (the resulting votes
are presented below):
</P>
<P ALIGN="LEFT">1.      To approve a new investment advisory, management and administration
agreement for the fund with Zurich Scudder Investments, Inc.
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT">
</P>
</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="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">Against</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Withheld/Abstain</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">33,732,972</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">1,661,665</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">96,288</FONT>
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT">2.      To approve a new research and advisory agreement between the fund's
investment manager and Zurich Scudder Investments Korea Limited.
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT">
</P>
</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="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">Against</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Withheld/Abstain</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">33,764,359</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">1,659,417</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><FONT SIZE="-2">67,150</FONT>
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section1E0"></TD>
<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" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<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 &quot;Transfer Agent&quot;) and UMB Bank, N.A. (the &quot;Plan
Agent&quot;).
</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 Transfer Agent in writing otherwise. Such a
notice must be received by the Transfer 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 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. In either case, for Federal income tax purposes, the
stockholder receives a distribution equal to the market value on the 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 1, 2002 the Plan has been amended to provide that UMB Bank,
N.A. will act as the Plan Agent for each stockholder of the fund who
participates in the Voluntary Cash Purchase Program and Dividend
Reinvestment Plan. Scudder Investments Service Company, the fund's
Transfer Agent, will continue to provide record keeping services for
participants in the Plan. If you would like a copy of the Plan, please call the
Transfer Agent at 800-294-4366.
</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 Transfer 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 Transfer 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 Transfer Agent, it is suggested that participants send in
voluntary cash payments to be received by the Transfer 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 Transfer 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 Transfer 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 Transfer 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 and/or Transfer
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, each
participant will be charged $0.75 for each such purchase. 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 reserves 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, 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 Transfer 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">Transfer Agent Address and Telephone Number</H2>
<P ALIGN="LEFT">You may obtain more detailed information by requesting a copy of the Plan
from the Transfer 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 219066, Kansas
City, MO 64121-9066, 1-800-294-4366.
</P>
<P ALIGN="LEFT">
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="new_section.gif" ALT="new_section1D0"></TD>
<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" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" COLSPAN="2">
<P ALIGN="RIGHT">
</P>
</TD>
</TR>


</TABLE>
<BR>
<P ALIGN="LEFT">The following table presents information about each Director of the Fund as of
July 10, 2002. Each Director's age is in parentheses after his or her name. Unless
otherwise noted, (i) each Director has engaged in the principal occupation(s) noted
in the table for at least the most recent five years, although not necessarily in the
same capacity, and (ii) the address of each Director is c/o Deutsche Asset
Management, 345 Park Avenue, New York, New York 10154. The Directors of each
class 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 have been duly elected and qualified.
</P>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Non-Interested Directors</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Name,
Age and
Position(s)
Held with
the Fund</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Length
of Time
Served</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Principal
Occupation(s)
During Past 5 Years</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Number of
Portfolios
in Fund
Complex
Overseen
by
Director<SUP>1</SUP></FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Other Directorships Held</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<B><FONT SIZE="-2" COLOR="#3300d9">Robert J. Callander (71)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1996 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Retired; Vice
Chairman, Chemical
Banking Corporation</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">4</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Aramark Corporation (food
service);</FONT><BR>
<FONT SIZE="-2">Metropolitan Opera
Association;</FONT><BR>
<FONT SIZE="-2">Member, Council on Foreign
Relations</FONT><BR>
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<B><FONT SIZE="-2" COLOR="#3300d9">Kenneth C. Froewiss (56) </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">2000 to
present</FONT><BR>
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Clinical Professor of
Finance, NYU Stern
School of Business;
Member, Finance
Committee,
Association for Asian
Studies; prior
thereto, Managing
Director, J.P. Morgan
(investment banking
firm) (until 1996)</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">4</FONT>
</P>
</TD>
<TD ALIGN="JUSTIFY" VALIGN="TOP">
<FONT SIZE="-2">None</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Name,
Age and
Position(s)
Held with
the Fund</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Length
of Time
Served</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Principal
Occupation(s)
During Past 5 Years</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Number of
Portfolios
in Fund
Complex
Overseen
by
Director<SUP>1</SUP></FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Other Directorships Held</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<B><FONT SIZE="-2" COLOR="#3300d9">William H. Luers (73)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">2001 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">President and Chief
Executive Officer,
United Nations
Association of the
United States of
America</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">4</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">IDEX Corporation
(manufacturer of pumps);</FONT><BR>
<FONT SIZE="-2">Wickes Lumber Company
(building materials); </FONT><BR>
<FONT SIZE="-2">America Online Latin America
(media communications);</FONT><BR>
<FONT SIZE="-2">The Gilman Foundation;</FONT><BR>
<FONT SIZE="-2">Rockefeller Brothers Fund
(foundation); </FONT><BR>
<FONT SIZE="-2">Appeal of Conscience
Foundation; </FONT><BR>
<FONT SIZE="-2">Member, Advisory Board, The
Trust for Mutual
Understanding; </FONT><BR>
<FONT SIZE="-2">Member, Executive Committee
and Board of Directors,
East-West Institute</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<B><FONT SIZE="-2" COLOR="#3300d9">Ronaldo A. da Frota Nogueira (63)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">2000 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director and Chief
Executive Officer, IMF
Editora Ltda. (financial
publisher)</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">4</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Brazilian Association of
Securities Analysts;</FONT><BR>
<FONT SIZE="-2">Association of Certified
International Investment
Analysts</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<B><FONT SIZE="-2" COLOR="#3300d9">Susan Kaufman Purcell (60)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">2001 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Vice President, Council
of the Americas; Vice
President, Americas
Society </FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">4</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Valero Energy Corp.;</FONT><BR>
<FONT SIZE="-2">Freedom House; </FONT><BR>
<FONT SIZE="-2">Women's Foreign Policy Group; </FONT><BR>
<FONT SIZE="-2">Foundation for Management
Education in Central America;</FONT><BR>
<FONT SIZE="-2">Member, Advisory Board, The
Inter-American Foundation; </FONT><BR>
<FONT SIZE="-2">Member, Council on Foreign
Relations; </FONT><BR>
<FONT SIZE="-2">Member, The Economic Club of
New York</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Name,
Age and
Position(s)
Held with
the Fund</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Length
of Time
Served</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Principal Occupation(s)
During Past 5 Years</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Number of
Portfolios
in Fund
Complex
Overseen
by
Director<SUP>1</SUP></FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Other Directorships
Held</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<B><FONT SIZE="-2" COLOR="#3300d9">Kesup Yun (57)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1994-<BR>
1998,
2001 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Professor, College of Business
Administration, Seoul National
University, Seoul, Korea; prior
thereto, Dean, College of
Business Administration, Seoul
National University
(1999-2001); Visiting Professor,
London Business School
(1997-1998)</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">4</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">None</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Interested Directors<SUP>2</SUP></FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Name,
Age and
Position(s)
Held with
the Fund</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Length
of Time
Served</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Principal Occupation(s)
During Past 5 Years</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Number of
Portfolios
in Fund
Complex
Overseen
by <BR>
Director<SUP>1</SUP></FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Other Directorships
Held</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<B><FONT SIZE="-2" COLOR="#3300d9">Richard T. Hale (56)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director <BR>
and
Chairman </FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">2002 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Managing Director, Deutsche
Bank Securities Inc. (formerly
DB Alex. Brown LLC) and
Deutsche Asset Management
Americas; Chairman, President
and/or Director on the boards
of certain other funds
managed by DeIM or its
affiliates; Director and
President, Investment Company
Capital Corp. (registered
investment advisor) and Vice
President, Deutsche Asset
Management, Inc. </FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">220</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director, Deutsche
Global Funds, Ltd.,
CABEI Fund and North
American Income Fund</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="5">
<B><FONT SIZE="-2" COLOR="#3300d9">Nicholas Bratt (54)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1984
- -1997,
1999 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Managing Director, Deutsche
Investment Management
Americas Inc.</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">4</FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director, Korea Society
(private society)</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
<FONT SIZE="-2"><SUP>1</SUP><I> Each of the Directors also serves on the Boards of The Brazil Fund, Inc., Scudder Global High
Income Fund, Inc., and Scudder New Asia Fund, Inc., all of which are closed-end funds that are
managed by DeIM.</I></FONT><BR>
<FONT SIZE="-2"><SUP>2</SUP><I> Each Director listed under the heading &quot;Interested Directors&quot; is an &quot;interested person&quot; of the
investment manager or of the fund within the meaning of the Investment Company Act of 1940,
as amended, due to the fact that each is an employee of Deutsche Asset Management or an
affiliate thereof.</I></FONT><BR>
<P ALIGN="LEFT">The following table presents information about each Officer of the Fund as of
July 10, 2002. Each Officer's age is in parentheses after his or her name. Unless
otherwise noted, the address of each Officer is c/o Deutsche Asset Management,
345 Park Avenue, New York, New York 10154. The President, Treasurer and
Secretary each holds office until his or her successor is duly elected and qualified; all
other officers hold offices in accordance with the By-Laws of the Fund. Each Officer
of the Fund is an employee of Deutsche Asset Management or an affiliate thereof.
</P>
<TABLE BORDER="1">
<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Officers</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Name, Age and
Position(s) Held
with the Funds</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Length of
Time Served</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Principal Occupation(s) During Past 5 Years</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Nicholas Bratt  (54) </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">President</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1984 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Managing Director, Deutsche Asset Management </FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Judith A. Hannaway (49)  </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Vice President</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1997 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Managing Director, Deutsche Asset Management </FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">John J. Lee (44)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Vice President</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1994 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Managing Director, Deutsche Asset Management </FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Dong-Wook Park (55)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Vice President</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1996 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Managing Director, Deutsche Asset Management (2001
to present); prior thereto, Managing Director/CEO,
Daewoo Capital Management Co., Ltd.</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">John Millette (39)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Vice President and
Secretary</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1999 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Vice President, Deutsche Asset Management </FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Gary L. French (51) </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Treasurer</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">April 2002 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Managing Director, Deutsche Asset Management (2001
to present); prior thereto, President, UAM Fund Services,
Inc. </FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">John R. Hebble (44)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Assistant Treasurer</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1998 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Senior Vice President, Deutsche Asset Management</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Thomas Lally (34)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Assistant Treasurer</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">2001 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Senior Vice President, Deutsche Asset Management</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Brenda Lyons (40)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Assistant Treasurer</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">2000 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Senior Vice President, Deutsche Asset Management</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Caroline Pearson (40)</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Assistant Secretary</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">1998 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Managing Director, Deutsche Asset Management (1997
to present); prior thereto, Associate, Dechert (law firm) </FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Bruce A. Rosenblum (41) </FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Vice President and
Assistant Secretary</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">April 2002 to
present</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Director of Deutsche Asset Management since 2002; prior
thereto, Vice President of Deutsche Asset Management
2000-2002; and partner with the law firm of Freedman,
Levy, Kroll &amp; Simonds</FONT><BR>
</TD>
</TR>


</TABLE>
<BR>
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<TD ALIGN="LEFT" VALIGN="BOTTOM"><IMG SRC="new_section.gif" ALT="new_section1C0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">Notes</H1>
</TD>
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<P ALIGN="RIGHT">
</P>
</TD>
</TR>

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<P ALIGN="RIGHT">
</P>
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