-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
 MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
 TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
 WucDFo3/s9PnEkIzfyHA+msvFfikOy4JmIA9rmii8GS9v0QHtBNsO9igFpvJ/7c/
 B0ydrqmTG0upnSE0h5mZ9A==

<SEC-DOCUMENT>0000088053-03-000265.txt : 20030228
<SEC-HEADER>0000088053-03-000265.hdr.sgml : 20030228
<ACCEPTANCE-DATETIME>20030228103825
ACCESSION NUMBER:		0000088053-03-000265
CONFORMED SUBMISSION TYPE:	N-30D
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20021231
FILED AS OF DATE:		20030228
EFFECTIVENESS DATE:		20030228

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:		03584922

	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
<TEXT>
<!doctype html PUBLIC "-//IETF//DTD HT
ML//EN">
<HTML>
<head>
<title>Zurich Scudder Investments</title>
</head>

<BODY BGCOLOR=#ffffff>
<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">Semiannual Report</H1>
<H1 ALIGN="LEFT">December 31, 2002</H1>
<P ALIGN="LEFT">A closed-end investment company seeking long-term capital appreciation
through investment in Korean securities.
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="kor_newsection.gif" ALT="kor_newsection250"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">The Korea Fund, Inc.</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">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="kor_newsection.gif" ALT="kor_newsection240"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT">General Information</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="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 219066<BR>
Kansas City, MO 64121-9066
</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>

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

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

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


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="kor_newsection.gif" ALT="kor_newsection230"></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>
</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="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="#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="#priv">&lt;Click Here&gt;</A></FONT>   Privacy Statement
</P>
</TD>
</TR>


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


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="kor_newsection.gif" ALT="kor_newsection220"></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>
</TR>

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


</TABLE>
<BR>
<H2 ALIGN="LEFT">Dear Stockholders:</H2>
<P ALIGN="LEFT">South Korea's stock market declined sharply during the second half of 2002, as
higher oil prices, concerns over a possible US military action in Iraq and
revelations that North Korea is actively developing nuclear weapons conspired
to send equity prices lower. The KOSPI (in US dollars) finished the six-month
period with a loss of  14.98%, underperforming most major markets in the
region. For the full year, however, the KOSPI delivered a return of 0.24% on
the strength of a powerful first-half rally.
</P>
<P ALIGN="LEFT">For the six-month period ended December 31, 2002, The Korea Fund, Inc.'s
total return based on net asset value (NAV) was -13.85%. Its share price -
quoted on the NYSE - returned -11.57% to close at $13.85 per share.
</P>
<P ALIGN="LEFT">The fund's long-term record remains strong. It beat the KOSPI over the
three-, five- and 10-year intervals, and outperformed the other funds in its
Lipper peer group (Closed End Pacific ex-Japan Funds) over all time periods.
Since its inception in August 1984, the fund's share price generated an average
annual return of 11.99% on market price and 13.47% on NAV as of
December 31, 2002. Additionally, since inception, cumulative returns have
been 697.75% on market price and 914.21% on NAV as of December 31,
2002. Notably, The Korea Fund, Inc. ranked first out of 20 and 14 funds,
respectively, over the five- and 10-year intervals.<FONT SIZE="-1"><SUP>1</SUP></FONT> We believe the fund's strong
track record can be attributed to our disciplined investment style, which
emphasized fundamental research to identify well-managed companies with
strong balance sheets, lower-than-average debt ratios and promising prospects
for long-term profit growth. Such companies tended to emerge as the
longer-term winners in the volatile Asian markets.
</P>
<FONT SIZE="-2"><SUP>1</SUP><I>  The fund ranked 7, 6, 1 and 1 for the 1-, 3-, 5- and 10-year periods as of December 31, 2002.
There were 20, 20, 20 and 14 funds, respectively, in Lipper's Closed End Pacific ex-Japan Funds
category. Performance includes reinvestment of dividends and capital gains and is no guarantee of
future results. <BR>
Source: Lipper, Inc. as of December 31, 2002</I></FONT><BR>
<H2 ALIGN="LEFT">Stocks Fall on North Korea Threat</H2>
<P ALIGN="LEFT">The tension between the United States and North Korea was a key factor
behind South Korea's underperformance in relation to other Asian markets. In
December North Korea revealed that it is striving to build a nuclear arsenal in
violation of treaties it made with the United States during the 1990s. This
development raised questions about South Korea's security and sparked
concerns that the United States might consider military action against North
Korea. Predictably, stocks in South Korea responded unfavorably to the news.
</P>
<P ALIGN="LEFT">Despite the fear pervasive in the market, we view this decline as an
opportunity. The North Korean threat has been a concern in South Korea for
many years and has periodically led to sell-offs in the stock market. Over time,
however, these downturns have proven to be excellent buying opportunities
because the tensions are usually resolved in a productive manner. Believing the
latest incident of saber-rattling will end no differently, we feel the selling
related to the North Korean issue has been overdone and likely represents an
opportunity to buy stocks at attractive valuations.
</P>
<H2 ALIGN="LEFT">Political Backdrop Encouraging</H2>
<P ALIGN="LEFT">Positive second-half news came from the political front when Roh Moo Hyun
was elected president in December. We have found that most foreign investors
do not fully understand Roh's policies, believing that he is too radical and is
striving to do too much, too fast. We disagree, however. Roh is a young, fresh
face who is reform-oriented and who sports a clean background - a rarity in
the often-corrupt world of Korean politics. His priorities include improving
corporate governance, raising the level of transparency among corporations
and continued restructuring of the <I>chaebol</I> (Korea's industrial conglomerates).
Notably, younger voters tended to back Roh over his opponent Lee Hoi
Chang and used the Internet as a means to generate support for their
candidate. We believe the activism and technological savvy of the younger
generation during the election campaign are positives for the long-term
direction of the country.
</P>
<H2 ALIGN="LEFT">Fundamentals, Valuations Support Improved Market Performance</H2>
<P ALIGN="LEFT">Following their second-half decline, Korean stocks have moved into a range
where we consider them to be attractively valued. The market is trading at
about eight to 10 times earnings, which makes it very inexpensive in relation
to other markets in Asia and around the world. In fact, many small and
medium-sized companies trade below book value. It is not unusual for Korean
equities to change hands at a valuation discount relative to other Asian
markets since investors have traditionally taken a dim view of corporate
governance practices in the country. However, we expect that as the reform
process continues and investors become more comfortable owning Korean
companies, this discount will begin to close.
</P>
<P ALIGN="LEFT">We believe the fundamentals support our contention that Korea's market is
inexpensive at these levels. Growth estimates for 2003 have come down, but
gross domestic product is expected to post a gain of 5.5% to 6.0% despite an
environment of sluggish global growth. We are encouraged by the lively,
dynamic economic environment and entrepreneurial spirit we see on the
ground in Korea. The process of reform is continuing unabated, and
deregulation is expected to pick up speed under the Roh administration. Roh
is also expected to take steps designed to help Korea attract higher levels of
foreign capital. In short, we believe the backdrop supports the expansion of
price-to-earnings ratios in 2003 and beyond.
</P>
<H2 ALIGN="LEFT">Few Changes to Fund's Positioning</H2>
<P ALIGN="LEFT">The portfolio remains positioned in much the same way as it was throughout
the entire year. It is overweight in the more dynamic areas of the economy,
such as technology, telecommunications and financials, and is underweight in
the old-line, slower-growth industries such as steel, electricity and traditional
manufacturing. This positioning hurt performance during the second half
when tech and telecom stocks came under pressure worldwide. Additionally,
financials were hurt by concerns that they were too aggressive in lending to the
consumer sector. Despite the short-term underperformance in these areas, we
believe the fund remains well-positioned to capitalize on the longer-term
trends of the Korean economy.
</P>
<P ALIGN="LEFT">Samsung Electronics Co., Ltd. remains the fund's number one holding.
Although about half of its business is semiconductors - a sector that was hit
hard in 2002 - the company has nonetheless been able to make money by
virtue of its having the lowest cost structure in the industry. Samsung's
cutting-edge technology is helping it gain market share in its other business
lines as well, particularly in the highest value-added sectors. The company is
well managed and is becoming larger and more competitive as time goes by.
We continue to hold a positive view on Samsung.
</P>
<P ALIGN="LEFT">SK Telecom Co., Ltd. continues to be the fund's second largest weighting. The
stock performed poorly in 2002 since the company's large 53% market share
has made it a potential target of government regulators. Still, we believe its
fundamentals are strong and its valuation is inexpensive. The company is a
proven innovator, is adept at creating new markets for its products and
possesses an enormous customer base. It has begun to roll out third-generation
(3G) cellular products - which have proven popular in Korea - and is
making money in the fast-growing data transmission area. Believing these
factors will help spark a recovery in SKT stock, we are maintaining a large
position in the company.
</P>
<P ALIGN="LEFT">The fund's position in financials was hurt by credit concerns during the
second half. With more businesses financing their operations from cash flows
- - rather than bank loans - Korean banks have turned to the consumer
sector to generate growth. But as the economy slowed, these aggressive lending
practices proved harmful to banks' bottom lines. We believe this issue has now
been fully reflected in stock prices, however. Our view is that the credit cycle
has reached a nadir and that banks, recognizing the problem, are taking steps
to solve it. The sector continues to offer an impressive growth opportunity and
is ripe for merger and acquisition activity. We have therefore held on to the
fund's position in financials through the sector's decline. Kookmin Bank is the
fund's<FONT COLOR="#ff0000"> </FONT>largest holding in financials.
</P>
<P ALIGN="LEFT">We are finding attractive long-term investment opportunities in small and
medium-sized companies. Although many are growing rapidly, valuations are
low because the companies remain undiscovered. But with seven analysts on
the ground in Korea, along with 19 years of experience investing in the
country, we believe we are well-positioned to unearth opportunities among
smaller companies. Furthermore, the fund's closed-end structure enables us to
benefit from investments in less-liquid stocks without having to deal with the
disruption caused by shareholder redemptions. Seeing what we believe to be
excellent opportunities, we intend to add to the fund's holdings in this area
over time.
</P>
<H2 ALIGN="LEFT">Outlook: Positive, But Risks Remain</H2>
<P ALIGN="LEFT">Investors in the Korean market are likely to stay on edge in the months ahead.
North Korea will remain a concern, and continued sluggishness in the global
economy would be seen as a negative for the country's stock market.
Additionally, all global markets will have to contend with the ongoing issues of
terrorism, risk of war with Iraq and volatile oil prices.
</P>
<P ALIGN="LEFT">We believe, however, that any sell-offs associated with external factors will
represent buying opportunities<FONT COLOR="#ff0000">. </FONT>In our view, the combination of strong
fundamentals, improving management practices, and low valuations make the
South Korean stock market an excellent long-term investment opportunity.
</P>
<P ALIGN="LEFT">Thank you for your continued investment in The Korea Fund. Please visit
cef.scudder.com or call (800) 349-4281 with any questions or for the most
recent performance information.
</P>
<P ALIGN="LEFT">Sincerely,<U>/s/ Nicholas Bratt</U>
<BR> <U>/s/ Juris Padegs</U>
<BR>
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Nicholas Bratt<BR>
President<BR>
and Director
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">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="kor_newsection.gif" ALT="kor_newsection210"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="other" ID="other"></A>Other Information</H1>
</TD>
</TR>

<TR>
<TD ALIGN="RIGHT" VALIGN="BOTTOM" 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">Investment Manager</H2>
<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 and its predecessors have more than 80 years of
experience managing mutual funds and DeIM 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. 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 Investment Trust Management Company
Limited (&quot;DeITMC&quot;), an affiliate of DeIM, serves as subadvisor to the fund.
DeITMC renders investment advisory and management services with regard
to the fund's portfolio. From time to time, DeITMC makes specific
investment recommendations, which then are evaluated by DeIM's 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 29 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">Election of Officers</H2>
<P ALIGN="LEFT">On December 18, 2002, the Board elected Charles A. Rizzo as Treasurer and
Chief Financial Officer of the fund.  Gary L. French, John R. Hebble and
Thomas Lally have resigned as officers of the fund.
</P>
<H2 ALIGN="LEFT">Dividend Reinvestment and Cash Purchase Plan</H2>
<P ALIGN="LEFT">The fund's Dividend Reinvestment and Cash Purchase Plan offers you a
convenient way to have your dividends and capital gain distributions
reinvested in shares of the fund. We believe this Plan is attractive for
stockholders. Its features are more fully described on page <A HREF="#drip">33</A>. 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 time
and in such amounts as the fund's Manager believes will further the
achievement of the fund's objectives. Depending on market conditions,
available funds, regulatory requirements and alternative investment
opportunities, such repurchases are limited to (1) 5% of the shares
outstanding at the beginning of the year, plus (2) an estimate of shares to be
issued in connection with the current year's dividends, plus (3) the number of
shares authorized for purchase in the previous calendar year that have not been
purchased.  In measuring the number of shares authorized for repurchase, the
shares relating to the current year's dividends are estimated at 50% of the
number of shares issued in connection with the prior year's dividends or until
such time during the year that the fund's Manager has a more accurate
projection of the year's dividends. Repurchases made based on this estimate
shall continue to have been authorized, even if the actual dividend or related
share issuance is lower. During the six months ended December 31, 2002,
there were no fund shares repurchased by the fund pursuant to the share
repurchase plan as described above.
</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>
<P ALIGN="LEFT">
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="kor_newsection.gif" ALT="kor_newsection200"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="invsum" ID="invsum"></A>Investment Summary    as of December 31, 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" 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">7.77</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">-.56</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">-.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">-2.92</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">11.83</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">11.83</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9.39</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9.39</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.24</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.24</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-9.54</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-9.54</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">4.40</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1.44</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-12.96</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-4.52</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-41.58</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-16.39</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-38.96</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-15.17</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">157.85</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">20.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">355.99</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">35.45</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">109.22</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">15.90</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">66.76</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10.77</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">38.31</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3.29</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">118.14</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">8.11</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-38.85</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-4.80</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-7.50</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-.78</FONT><BR>
</TD>
</TR>


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

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

<TR>
<TD COLSPAN="12" ALIGN="RIGHT" VALIGN="BOTTOM"><IMG SRC="kor_psi110.gif" ALT="kor_psi110"></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">16.64</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">20.65</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">20.04</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">13.55</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4.44</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9.59</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">23.13</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">12.79</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">15.89</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">16.56</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">.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.06</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.17</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.18</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">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.15</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.36</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.60</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1.53</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">.67</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total Return (%)</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">56.77</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">24.84</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">4.26</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-30.01</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-66.50</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">115.99</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">141.19</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">-44.24</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">42.71</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9.39</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 US 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="kor_newsection.gif" ALT="kor_newsection1F0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="portsum" ID="portsum"></A>Portfolio Summary   as of December 31, 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">12/31/02</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>
</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">83%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">84%</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">11%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">10%</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">3%</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="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<BR>
</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">12/31/02</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>
</TR>

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

<BR></TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Information Technology</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">22%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">22%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Telecommunications Services</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">19%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">16%</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">11%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">12%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Materials</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">11%</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">Industrials</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">6%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">7%</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Consumer Staples</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">6%</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">Energy</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">1%</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="TOP">
<FONT SIZE="-2">1%</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="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 December 31, 2002 </FONT></B><FONT SIZE="-2" COLOR="#ffffff">(63.4% 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">15.8%</FONT></B>
</P>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     3.      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">9.3%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     4.      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">6.6%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     5.      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">6.3%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     6.      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">4.9%</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">3.2%</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">2.4%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     9.      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">2.3%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">     10.     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">2.3%</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="kor_newsection.gif" ALT="kor_newsection1E0"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="portfolio" ID="portfolio"></A>Investment Portfolio    as of December 31, 2002</H1>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
</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="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2"><BR>
Shares</FONT></B>
</P>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">Value ($)</FONT></B>
</P>
</TD>
</TR>

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

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

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Common Stocks 83.1%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Discretionary 6.5%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Auto Components 1.0%</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">4,464,307</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">8,299,648</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Automobiles 0.3%</FONT></B><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">
<B><FONT SIZE="-2">2,900,384</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Hotel Restaurants &amp; Leisure 1.1%</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">1,235,072</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">4,721,555</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Paradise Co., Ltd. </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,040,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,691,581</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"><B><FONT SIZE="-2">9,648,208</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Internet &amp; Catalog Retailing 2.3%</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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">19,366,890</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Media 0.4%</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">1,334,429</FONT><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">2,529,404</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"><B><FONT SIZE="-2">3,863,833</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Multiline Retail 1.2%</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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">10,084,270</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Textiles, Apparel &amp; Luxury Goods 0.2%</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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">1,893,094</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Staples 4.4%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Beverages 1.8%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">CJ 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">3,846,343</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hite Brewery Co., Ltd.* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">50,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,069,896</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">8,981,278</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"><B><FONT SIZE="-2">14,897,517</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Food Products 0.6%</FONT></B><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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">5,682,115</FONT></B>
</P>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Household Products 0.2%</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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">1,632,995</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Tobacco 1.8%</FONT></B><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">9,027,501</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">5,918,500</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"><B><FONT SIZE="-2">14,946,001</FONT></B>
</P>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Oil &amp; Gas </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">790,600</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">10,831,963</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financials 19.4%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Banks 11.1%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Kookmin Bank (ADR) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,257,217</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">44,442,621</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Kookmin Bank* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">994,184</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">35,205,706</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">8,516,504</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">2,182,200</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">4,322,119</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"><B><FONT SIZE="-2">94,669,150</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diversified Financials 1.8%</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">758,832</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Good Morning Shinhan Securities Co.* (f) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">1,710,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">6,138,231</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">3,053,034</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">2,436,660</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">3,140,255</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"><B><FONT SIZE="-2">15,527,012</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Insurance 6.5%</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">2,248,570</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">53,521,943</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"><B><FONT SIZE="-2">55,770,513</FONT></B>
</P>
</TD>
</TR>

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

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Life Sciences Ltd.* (f) (Rights)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">3,497</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9,288</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">LG Life Sciences Ltd.* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">9,436</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">135,650</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"><B><FONT SIZE="-2">144,938</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Industrials 5.4%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Commercial Services &amp; Supplies 1.2%</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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">9,895,718</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Industrial Conglomerates 1.9%</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">629,189</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">1,300,348</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">7,016,759</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">2,074,112</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">6,441,941</FONT><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">84,926</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">528,437</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"><B><FONT SIZE="-2">16,690,438</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Machinery 1.6%</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">875,983</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">7,629,316</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">2,721,434</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">6,829</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">SeAH Steel Corp.* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">210,310</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,136,702</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"><B><FONT SIZE="-2">13,370,264</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Trading Companies &amp; Distributors 0.7%</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">829,900</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">5,737,684</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Information Technology 18.3%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electronic Equipment &amp; Instruments 5.4%</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">2,982,024</FONT><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">4,491,210</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">22,996,263</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">14,167,582</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">1,686,289</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"><B><FONT SIZE="-2">46,323,368</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Semiconductor Equipment &amp; Products 12.9%</FONT></B><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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">109,672,717</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Materials 9.7%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Chemicals 1.6%</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">846,644</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">7,273,666</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">5,267,485</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Taekwang Industrial 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">682,737</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"><B><FONT SIZE="-2">14,070,532</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Containers &amp; Packaging 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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">48,677</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Metals &amp; Mining 6.7%</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">489,018</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">547,800</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">54,500,569</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">1,795,596</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"><B><FONT SIZE="-2">56,785,183</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Paper &amp; Forest Products 1.4%</FONT></B><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Hansol Paper Co., Ltd.* </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">2,755,500</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">12,313,267</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Telecommunication Services 17.6%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diversified Telecommunication Services 4.8%</FONT></B><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">10,668,328</FONT><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">721,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">30,820,539</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"><B><FONT SIZE="-2">41,488,867</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Wireless Telecommunication Services 12.8%</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">20,853,021</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">12,983,682</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">389,250</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">75,155,558</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"><B><FONT SIZE="-2">108,992,261</FONT></B>
</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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">4,000,675</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Common Stocks</B> (Cost $447,290,562) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">709,548,182</FONT></B>
</P>
</TD>
</TR>

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

<BR></TD>
</TR>

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Preferred Stocks 11.0%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Discretionary 4.0%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Automobiles 3.3%</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">19,932,000</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">
<P ALIGN="RIGHT"><FONT SIZE="-2">7,472,801</FONT>
</P>
</TD>
</TR>

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

<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">27,404,801</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Hotel Restaurants &amp; Leisure 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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">127,085</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Multiline Retail 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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">6,114,346</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Consumer Staples 0.9%</FONT></B>
<BR></TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">CJ 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">5,412,521</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">CJ 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">1,124,639</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">CJ 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">663,325</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">110,518</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"><B><FONT SIZE="-2">7,311,003</FONT></B>
</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 </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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">364,690</FONT></B>
</P>
</TD>
</TR>


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

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

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

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Financials 2.2%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Diversified Financials 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">1,104,383</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">610,107</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">2,607,479</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"><B><FONT SIZE="-2">4,321,969</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Insurance 1.7%</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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">14,178,386</FONT></B>
</P>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Health Care Providers &amp; 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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">690,350</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Information Technology 3.5%</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-2" COLOR="#3300d9">Electronic Equipment &amp; Instruments </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">3,961,047</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">1,196,450</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"><B><FONT SIZE="-2">5,157,497</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Semiconductor Equipment &amp; Products 2.9%</FONT></B>
<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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">25,066,523</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<B><FONT SIZE="-1">Materials 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">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">2,896,550</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Preferred Stocks</B> (Cost $41,270,603) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">93,633,200</FONT></B>
</P>
</TD>
</TR>


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

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

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

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

<TR>
<TD BGCOLOR="#000000" ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="3">
<P ALIGN="LEFT"><B><FONT SIZE="-2" COLOR="#ffffff">Corporate Bonds 2.8%</FONT></B>
</P>
</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">90,966,781</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">60,651</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Electric Power Corp., 6.375%, 12/1/2003   US$</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">10,355,350</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korea Exchange Bank, 13.75%, 6/30/2010  US$</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">11,950,000</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">1,159,838</FONT><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Corporate Bonds</B> (Cost $20,462,585)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">23,525,839</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 0.0%</FONT></B>
</P>
</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) (Cost $404,155) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">500,000,000</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">421,567</FONT></B>
</P>
</TD>
</TR>


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

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

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

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

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Woori Financial Holdings Co., Ltd.* (f) (Cost $0) </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">158,029</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 3.1%</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Scudder Cash Management QP Trust, 1.4% (c)
(Cost $26,249,720) </FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<FONT SIZE="-2">26,249,720</FONT><BR>
</TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">26,249,720</FONT></B>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM" COLSPAN="2">
<FONT SIZE="-2"><B>Total Investment Portfolio - 100.0%</B> (cost $535,677,625) (a)</FONT>
<BR></TD>
<TD ALIGN="RIGHT" VALIGN="BOTTOM">
<P ALIGN="RIGHT"><B><FONT SIZE="-2">853,536,537</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 $537,947,666. At December 31, 2002, net
unrealized appreciation for all securities based on tax cost was $315,588,871. This consisted of
aggregate gross unrealized appreciation for all securities in which there was an excess of value
over tax cost of $356,040,905 and aggregate gross unrealized depreciation for all securities in
which there was an excess of tax cost over value of $40,452,034.</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 $12,792,486 (1.55% of net assets at December 31,
2002). 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
December 31, 2002 aggregated $13,848,012. 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 $5,266,449 (0.64% of
net assets) at December 31, 2002. No quoted market price exists for these private placement
securities. </FONT></I><BR>
<I><FONT SIZE="-2">     The issuers of these securities have given the Fund a put option, payable on demand. Information
concerning such private placement securities at December 31, 2002 is as follows:</FONT></I><BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">Security</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Acquisition
Date</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Cost ($)</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">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">     6,727,932</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2">(h)  Principal amount stated in Korean Won unless otherwise noted. US$ 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="kor_newsection.gif" ALT="kor_newsection1D0"></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 December 31, 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 $492,587,170)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       780,095,030</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Affiliated issuers (cost $43,090,455)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        73,441,507</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total investments in securities, at value (cost $535,677,625)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        853,536,537</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cash</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        687,500</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Korean Won, at value (cost $14,692,372)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        15,602,480</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">        429,289</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">        240,399</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Other assets</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        39,657</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Due from Manager</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        9,528</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">        870,545,390</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">Dividends payable</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        42,493,751</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">        674,377</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">        459,158</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">        43,627,286</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">$    826,918,104</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">Accumulated distributions in excess of net investment income</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (4,794,742)</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">        317,858,912</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">        930,392</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">        (8,286,980)</FONT>
</TD>
</TR>

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

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Paid-in capital</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        521,956,028</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">     826,918,104</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 ($826,918,104 / 49,933,902 shares of common
stock issued and outstanding, $.01 par value, 200,000,000 shares
authorized)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    16.56</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 six months ended December 31, 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 $3,332)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       57,516</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Interest - Unaffiliated issuers</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,574,957</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Total Income </FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,632,473</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">        4,503,802</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">        37,294</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">        944,881</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Auditing</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        72,600</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">        65,438</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">        98,609</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Other</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        29,448</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">        5,752,072</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">        (13,604)</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">        5,738,468</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">     (4,105,995)</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">        (8,915,372)</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">        (132,937)</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">        2,824,817</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (6,223,492)</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">        (127,154,993)</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">        (1,912,341)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (129,067,334)</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">     (135,290,826)</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">$    (139,396,821)</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">
<B><FONT SIZE="-1">Increase (Decrease) in Net Assets</FONT></B>
<BR></TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Six Months
Ended
December 31,
2002</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Year Ended
June 30, 2002</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">$       (4,105,995)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">$       5,606,196</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">        (6,223,492)</FONT>
</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) on
investment transactions during the period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (129,067,334)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        321,639,242</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">        (139,396,821)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        364,992,799</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">        (8,788,367)</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</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (33,705,384)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (5,992,069)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Fund share transactions:</FONT><BR>
<FONT SIZE="-2">Reinvestment of distributions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        72,311</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Cost of shares repurchased</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (745,506)</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">        (72,052)</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">        (72,052)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (673,195)</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">        (181,962,624)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        358,327,535</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">        1,008,880,728</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        650,553,193</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net assets at end of period (including accumulated
distribution in excess of and undistributed net
investment income of $4,794,742 and $8,099,620,
respectively)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    826,918,104</FONT></B>
</P>
</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="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">        49,939,049</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        50,008,902</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shares issued to shareholders in reinvestment of
distributions</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        5,147</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shares repurchased</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (75,000)</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">        (5,147)</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">        (5,147)</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (69,853)</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Shares outstanding at end of period</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        49,933,902</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        49,939,049</FONT>
</TD>
</TR>


</TABLE>
<BR>
<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="kor_newsection.gif" ALT="kor_newsection1C0"></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<SUP>a</SUP></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="7">
<B><FONT SIZE="-1">Per Share Operating Performance</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<B><FONT SIZE="-2">Net asset value, beginning of
period</FONT></B>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">$    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>
<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" COLSPAN="7">
<I><FONT SIZE="-2">Income (loss) from investment operations:</FONT></I><BR>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net investment income (loss)<SUP>b</SUP></FONT>
<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (.08)</FONT>
</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">        (2.71)</FONT>
</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">        (2.79)</FONT>
</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">        (.18)</FONT>
</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">        (.67)</FONT>
</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">        (.85)</FONT>
</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">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        .00<SUP>c</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">$    16.56</FONT></B>
</P>
</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">$    13.85</FONT></B>
</P>
</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="7">
<B><FONT SIZE="-1">Total Return</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Per share net asset value (%)<SUP>d</SUP></FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (13.85)<SUP>**</SUP></FONT>
</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>d</SUP></FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (11.57)<SUP>**</SUP></FONT>
</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="7">
<B><FONT SIZE="-1">Ratios to Average Net Assets and Supplemental Data</FONT></B>
<BR></TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Net assets, end of period ($ millions)</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        827</FONT>
</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<SUP>*</SUP></FONT>
</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">        1.20<SUP>*</SUP></FONT>
</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">        (.43)<SUP>e**</SUP></FONT>
</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">        1<SUP>*</SUP></FONT>
</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> For the six months ended December 31, 2002.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>b</SUP> Based on average shares outstanding during the period.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>c</SUP> Amount is less than $.005 per share.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>d</SUP> Total return based on net asset value reflects changes in the Fund's net asset value during the
period. Total return based on market value reflects changes in market value. Each figure includes
reinvestments of dividends. These figures will differ depending upon the level of any discount from
or premium to net asset value at which the Fund's shares trade during the period.</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>e</SUP> The ratio for the six months ended December 31, 2002 has not been annualized since the Fund
believes it would not be appropriate because the Fund's dividend income is not earned ratably
throughout the fiscal year (Note A).</FONT></I><BR>
<I><FONT SIZE="-2"><SUP>*       </SUP>Annualized<SUP>   **      </SUP>Not annualized</FONT></I><BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="kor_newsection.gif" ALT="kor_newsection1B0"></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 (US 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 and Scudder Cash Management QP Trust 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 US dollars. Investment securities and other assets and liabilities denominated in a
foreign currency are translated into US dollars at the prevailing exchange rates at
period end. Purchases and sales of investment securities, income and expenses are
translated into US 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 US dollar amount actually received. That portion of both realized
and unrealized gains and losses on investments that results from fluctuations in
foreign currency exchange rates is not separately disclosed but is included with net
realized and unrealized gains and losses on investment securities.
</P>
<P ALIGN="LEFT">At December 31, 2002, the exchange rate for Korean Won was US $.00084 to W 1.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Taxes.</FONT></B> The Fund's policy is to comply with the requirements of the Internal Revenue
Code, as amended, which are applicable to regulated investment companies and to
distribute all of its taxable income to its shareholders. Accordingly, the Fund paid no
federal income taxes and no federal income tax provision was required.
</P>
<P ALIGN="LEFT">Under the United States - Korea Income Tax Treaty (the &quot;Treaty&quot;), as presently in
effect, the government of Korea imposes a nonrecoverable withholding tax and
resident tax aggregating 16.5% on dividends and 13.2% on interest earned by the
Fund from Korean issuers. Under the Treaty, there is no Korean withholding tax on
realized capital gains.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Distribution of Income and Gains.</FONT></B> Distributions of net investment income, if any,
are made annually. Net realized gains from investment transactions, in excess of
available capital loss carryforwards, would be taxable to the Fund if not distributed,
and, therefore, will be distributed to shareholders at least annually.
</P>
<P ALIGN="LEFT">The timing and characterization of certain income and capital gains distributions are
determined annually in accordance with federal tax regulations which may differ
from accounting principles generally accepted in the United States of America. These
differences primarily relate to investments in foreign denominated securities and
certain securities sold at a loss. As a result, net investment income (loss) and 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 (accumulated
losses) on a tax basis were 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>
<I><FONT SIZE="-2">*    For tax purposes short-term capital gains distributions are considered ordinary income distributions.</FONT></I><BR>
<P ALIGN="LEFT">In addition, for 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>
<P ALIGN="LEFT">The tax character of current year distributions will be determined at the end of the
current fiscal year.
</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 six months ended December 31, 2002, purchases and sales of investment
securities (excluding short-term investments) aggregated $62,397,120 and
$3,945,683, respectively.
</P>
<P ALIGN="LEFT"><B>C. Related Parties</B>
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Management Agreement.</FONT></B> Under the Management Agreement with Deutsche
Investment Management Americas Inc. (&quot;DeIM&quot; or the &quot;Manager&quot;), the Manager
directs the investments of the Fund in accordance with its investment objectives,
policies and restrictions. The Manager determines the securities, instruments and
other contracts relating to investments to be purchased, sold or entered into by the
Fund. In addition to portfolio management services, the Manager provides certain
administrative services in accordance with the Management Agreement. The
management fee payable under the Agreement is equal to an annual rate of 1.15% of
the first $50,000,000 of the Fund's month-end net assets, 1.10% of the next
$50,000,000 of such net assets, 1% of the next $250,000,000 of such net assets,
0.95% of the next $400,000,000 of such net assets, 0.90% of the next $300,000,000
of such net assets, and 0.85% of such net assets in excess of $1,050,000,000 of the
Fund's month-end net assets. 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 six months ended December 31, 2002, the Manager did
not impose a portion of its fee amounting to $13,604, and the portion imposed
amounted to $4,490,198 which was equivalent to an annualized effective rate of
0.96% of the Fund's average month-end net assets. Effective July 9, 2002, Deutsche
Investment Trust Management Company Limited, an affiliate of the Manager, serves
as subadvisor to the Fund.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Service Provider Fees.</FONT></B> Scudder Investments Service Company (&quot;SISC&quot;), an affiliate
of the Manager, is the transfer, dividend-paying and shareholder service agent for the
Fund. For the six months ended December 31, 2002, the amount charged to the
Fund by SISC aggregated $7,500, of which $2,500 is unpaid at December 31, 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 six months ended December 31, 2002,
the amount charged to the Fund by SSC aggregated $8,100, of which $6,750 is
unpaid at December 31, 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 six months ended
December 31, 2002, the amount charged to the Fund by SFAC aggregated
$213,367, of which $35,158 is unpaid at December 31, 2002.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">Directors' Fees and Expenses.</FONT></B> The Fund pays each Director not affiliated with the
Advisor 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 six months ended December 31, 2002 totaled
$237,440 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 December 31, 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 $1.3 billion
revolving credit facility administered by J. P. Morgan Chase Bank for temporary or
emergency purposes that otherwise might require the untimely disposition of
securities. The Participants are charged an annual commitment fee which is allocated,
pro rata based upon net assets, among each of the Participants. Interest is calculated
at the Federal Funds Rate plus 0.5 percent. The Fund may borrow up to a maximum
of 5 percent of its net assets under the agreement.
</P>
<P ALIGN="LEFT"><B>G. Transactions in Securities of Affiliated Issuers</B>
</P>
<P ALIGN="LEFT">An affiliated issuer is a company in which the Fund has ownership of at least 5% of
the voting securities. A summary of the Fund's transactions during the six months
ended December 31, 2002 with companies which are or were affiliates is as follows:
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">Affiliate</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Common/Preferred
Shares</FONT></B>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="BOTTOM">
<P ALIGN="CENTER"><B><FONT SIZE="-2">Purchases
Cost ($)</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">        629,189</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">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,893,094</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">CJ 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">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        11,046,828</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">        -</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">        48,677</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">        -</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">        19,366,890</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">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        9,091,796</FONT>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">Partners, Inc.</FONT><BR>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        1,504,365</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        (132,937)</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">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">        1,686,289</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">        -</FONT>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<FONT SIZE="-2">        2,721,434</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">        -</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">        26,957,310</FONT>
</TD>
</TR>

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

<BR></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     </FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     -</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     1,504,365</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     (132,937)</FONT></B>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><FONT SIZE="-2">        <B>-</B></FONT>
</P>
</TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<P ALIGN="LEFT"><B><FONT SIZE="-2">     73,441,507</FONT></B>
</P>
</TD>
</TR>


</TABLE>
<BR>
<I><FONT SIZE="-2">*    Net of foreign taxes withheld.</FONT></I><BR>
<P ALIGN="LEFT"><B>H. Common Stock</B>
</P>
<P ALIGN="LEFT">Shares issued in fiscal 2002 for the Dividend Reinvestment Plan were reacquired in
the open market and retired in fiscal 2003.
</P>
<P ALIGN="LEFT">
</P>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="kor_newsection.gif" ALT="kor_newsection1A0"></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
December 31, 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 December 31, 2002
by correspondence with the custodian, provide a reasonable basis for our
opinion.
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<P ALIGN="LEFT">Boston, Massachusetts<BR>
February 21, 2003
</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="kor_newsection.gif" ALT="kor_newsection190"></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">The Annual Meeting of Stockholders (the &quot;Meeting&quot;) of The Korea Fund, Inc.
(the &quot;fund&quot;), was held on October 2, 2002, at the offices of Deutsche
Investment Management Americas Inc. (part of Deutsche Asset Management),
345 Park Avenue, New York, NY 10154.  At the Meeting, the following
matter was voted upon by the stockholders (the resulting votes are presented
below).
</P>
<P ALIGN="LEFT">1.      To elect three Directors of the fund to hold office for a term of three years,
or until their respective successors shall have been duly elected and
qualified:
</P>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="BOTTOM">

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

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

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Robert J. Callander</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">26,163,654</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">1,468,792</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">William H. Luers</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">26,153,418</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">1,479,027</FONT>
</P>
</TD>
</TR>

<TR>
<TD ALIGN="LEFT" VALIGN="TOP">
<FONT SIZE="-2">Kesop Yun</FONT><BR>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">25,208,874</FONT>
</P>
</TD>
<TD ALIGN="CENTER" VALIGN="TOP">
<P ALIGN="CENTER"><FONT SIZE="-2">2,423,572</FONT>
</P>
</TD>
</TR>


</TABLE>
<BR>
<BR>
<TABLE BORDER="1">
<TR>
<TD ALIGN="LEFT" VALIGN="TOP"><IMG SRC="kor_newsection.gif" ALT="kor_newsection180"></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 or its delegate)(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 the Transfer
Agent, 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 (i) shares of the fund's common stock that are
issued but not outstanding (&quot;Treasury Stock&quot;) to the extent shares of Treasury
Stock are available, and then (ii) to the extent shares of Treasury Stock are not
available, newly issued shares of the fund's common stock to participants at
the greater of the following on the Valuation Date: (a) net asset value or
(b) 95% of the market price. The Valuation Date will be the dividend or
distribution payment date or, if that date is not a New York Stock Exchange
trading date, the next preceding trading date. If the net asset value exceeds the
market price of fund shares at such time, 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. 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.
</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="kor_newsection.gif" ALT="kor_newsection170"></TD>
<TD ALIGN="LEFT" VALIGN="BOTTOM">
<H1 ALIGN="LEFT"><A NAME="priv" ID="priv"></A>Privacy Statement</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">This privacy statement is issued by Scudder Distributors, Inc., Scudder Financial
Services, Inc., Scudder Investor Services, Inc., Scudder Trust Company and the
Scudder Funds, including The Brazil Fund, Inc., The Central European Equity
Fund, Inc, The Germany Fund, Inc., The Korea Fund, Inc., and Montgomery Street
Income Securities.
</P>
<P ALIGN="LEFT">We consider privacy fundamental to our client relationships and adhere to the
policies and practices described below to protect current and former clients'
information.
</P>
<P ALIGN="LEFT"><B><FONT SIZE="-1">We never sell customer lists or individual client information.</FONT></B> Internal policies
are in place to protect confidentiality, while allowing client needs to be served. Only
individuals who need to do so in carrying out their job responsibilities may access
client information. We maintain physical, electronic and procedural safeguards that
comply with federal standards to protect confidentiality. These safeguards extend to
all forms of interaction with us, including the Internet.
</P>
<P ALIGN="LEFT">In the normal course of business, clients give us nonpublic personal information on
applications and other forms, on our Web sites, and through transactions with us or
our affiliates. To be able to serve our clients, information is shared with affiliates and
other companies. Specifically, we disclose client information to parties that perform
various services for us, such as transfer agents, custodians, and broker-dealers.
Limited information also may be shared with affiliates, with companies with which
we have joint marketing agreements, or with other parties as required by law. Any
organization receiving client information may only use it for the purpose designated
by the entities listed above.
</P>
<P ALIGN="LEFT">Questions on this policy may be sent to:
</P>
<P ALIGN="LEFT">Scudder Investments<BR>
Attention: Correspondence - Chicago<BR>
P.O. Box 219415<BR>
Kansas City, MO 64121-9415
</P>
<P ALIGN="LEFT">July 2002
</P>
<P ALIGN="LEFT"><IMG SRC="kor_backcover0.gif" ALT="kor_backcover0">
</P>


</BODY>

</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>3
<FILENAME>kor_backcover0.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 kor_backcover0.gif
M1TE&.#EADP%S`N<!`````/____?W]^_O[]_?W[^_OW]_?T!`0.;__TQ,3```
M_P``````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M`````````````````/___RP`````DP%S`D`(_@`#"!Q(L*#!@P@3*ES(L*'#
MAQ`C2IQ(L:+%BQ@S:MS(L:/'CR!#BAQ)LJ3)DRA3JES)LJ7+ES!CRIQ)LZ;-
MFSASZMS)LZ?/GR0!`$TH=*C1HTA[%F6Y-$!3@0"B/C4X-:G5JUA15M4J-&K%
MK5G#BAUK$:S#HEY#FC5+MJW;MP39-F5;4*K=B6D5TH7+MZ]5N7:?SB6:MVYA
MJ('U^EW,.*M<IU+K0G5*,3+5LXTS:P:ZE[!EO$0IK]U,NO3-SB"]'HZ(VK3K
MU[!CRYY-N[;MV[ASZ][-N[?OW\"#"Q].O+CQX\B3*U_.O+GSY]"C2Y].O;KU
MZ]BS:]_.O;OW[^##_HL?3[Z\^?/HTZM?S[Z]^_?PX\N?3[^^_?OX\^O?S[^_
M__\`!CB3:@(6J-)=!B:HX()B$<C@@Q!&N).#$E98V6<69JCAAFIUQ>&'GJT&
MXH>!"4;9B2-*V%J*++;HXHLPQBCCC`5B2!B-`MHXD&4BXNCCC_BM"*1_".94
M(EH8=H76D+@)N=)>2QVI%I-))89388?E)265]VW)59%<<@:F38"%V9N5/'E)
ME9.(;36FF3[I6%.9;;[)T)MLPDE3GB4=B>:..[*I8XEZQBFGF'RRIF2A/QTJ
MDZ..2O1G7#TR^E*6C?H9*6MQ68HHI9M>*ABA"%7ZE8>>/IIEJ*FVZNJK_K#&
M*NNLM-9JZZVXYJKKKKQ&E^A%4>;Y:Z^-.D8L8[^F9>I!RGYU[&*)@J4F9I.%
M]FQ?R9K*:F778GNGD]-"9B>UW;[U&*#6<HHJJ-J6"]>PJ4TJF;MNP7LIO?CF
MJ^^^_/;K[[\`!RSPP`07;/#!"">L\,(,-^SPPQ!'+/'$%%=L\<489ZSQQAQW
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M?\RS\LM;#BKNM2<_//"@;?]0]!Z?&]KCH`/Z^/>]0W^HZ'%?MK?[K/.YI-7M
M&\8]1.!W/+WU9C,O6?_IVQW[U%>_^Y4J@`<T'J6HQY&GY8]C\OO=`=^'/P2&
MC8(.M"!2'K@Q#DY&@9+2X%$\*+L2FO"$*$RA"E?(PA:Z\(4PC*$,9TC#&MKP
MACC,H0YWR,,>^O"'_D`,HA"'2,0B&O&(2$RB$I?(Q"8Z\8E0C*(4ITC%*EKQ
MBEC,HA:WR,4N>C%R7ZR>]:PXP"F2D(=("B/\U,A&_(V1C&^DHMW:^#8ZBLN.
M@3HC'GN8."[.<8][+*,9SW?'+8ZI<UI4TJHD^,3%`;*`622D((NHK+1-\I&8
MS*0F-\G)3GKRAIK25"0K>2,LV@A,<:1DNQ@(QU"6[Y-^S.0E89G$60:%?';3
M8\-LV:$\\I*(KBP2Y1BYRU2>9B1_G-A==+F\!3HS*&JS6#('%$SR>21MTF1F
MTSIH3,%A"5/1W$@W!=9'F(@/FB"\F#;%Z,K/E1.'J02<+^^6J6]Z<)VR_B)F
MWZ`73M*]LVK5I*"BUO=+?DV.-DK[9\+T636T88EZPJKEU;J&,88>**#O8]DK
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M=H+3FR!WH1O=\8:+9[U=+F@%A4$`8G>H1_TNYXI+7L--5&F>A>U<51K1]Q8V
ML0F5KV\7)K_!VFE3`]::D3YX7?WNR:\0/ITV^^M@K3#XO]U]TO-`XU^VY2ZM
M(`ZQB,E*XA*;^,0H3K&*5\SB%KOXQ3".L8QG3.,:V_C&.,ZQCG?,XQ[[^,=`
M#K*0ATSD(AOYR$A.LI*7S.0F._G)4(ZRE*=,Y2I;^<I8SK*6M\SE+GOYRV`.
MLYC'3.8RF_G,:$ZS_IK7S.8VN_G-<(ZSG.=,YSK;^<YXSK.>]\QGZB2XSW"J
MKAUOBD2]`II@@J8CH8]HZ$,[6CM_1N$T'STUT0Q:H5=\V:4C+6GG,A%RBA8H
MI0N6:#9R>M2HKA<F3ZW"13/:TZD^%JME-^E8`ZS4H`XU<J$HKUR;LL&S#BFY
M(BE>^4919L$6MJ75YFIX^A73O\9CLW<8K&>&T9[7CJRMM\WM;GO[V^`.M[C'
M3>YRMUJMID1WIAV8[,`E#;>C7*SGTAW3HL:[E+"F-KOC?59S^_O?0X0VP&V5
M;R5:=-V`C$R[85=P;U;X2JA\Z++Y]F>%,V^1HB[;M,O"V]@U7"/][E.$_B$F
M6G.:->-K.[COK&O@C5]K?C]+]TXMZ\Z/TTN><R*<_>I44)4KU>5X.?F:3&OS
MFQ>=XQCE:0.!SO"/+#R;3`\9SD_CI[`]G4I'-[!K';?KH0D\)9J3]R];6]&L
M'Y>FR-0TQ:).TG9>T(4A'V[/49Y#LT/=[BVG4TTK2_>'5;SJ0_7YUXRMJNHM
M?;6"KV^Q>\KV?2ERY=[M>LI])W2Y\T^`DB=P(:G.7,(C/?-:*WEF2NUYB>&=
M4U^*O,9\F_1J;?ARQ;XZD$Z_])D+*?$S="[NX?ITVI=^H;^O:RB9#?H*EM7M
M[`*;__[7P9A]?:&^9SS:,S*:X@/_KKVM=FK">A?]OW6>YWN/;>3<1'F*@I]X
MF!V__;K_K7K;J]'J1)1PE4V6^7^>Y.1OB_)I[M"R-_Y[Q!5XLJ5V=Q-3$T(_
MFY=W=3-QH1-\&F9MAC58BX=_?'>`SO-^$:AT:]=WC2%7[2-[-1.``S>")%B"
1)GB"*)B"*KB"+-B"`A(0`#L_
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>4
<FILENAME>kor_newsection.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 kor_newsection.gif
M1TE&.#EA%0`7`.<!`````/____?W]^_O[]_?W[^_OW]_?T!`0#,`V>;__P``
M_P``````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M`````````````````/___R'Y!`$```$`+``````5`!<`0`A5``,('$BPH$&!
M"!`43*CP8`"&$",R=#@P(L6*#Q$:3'BQH\>,'RLV?#B28DF.&#>B/#@QI,N7
A,#VV="GQX\J4)A<V+-F1)T^$/W6JO"F2:,RC2`\&!``[
`
end

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>5
<FILENAME>kor_psi110.gif
<DESCRIPTION>GRAPHIC
<TEXT>
begin 644 kor_psi110.gif
M1TE&.#EA5@%D`.<!`````/____?W]^_O[]_?W[^_OW]_?T!`0#,`V>;__P``
M_P``````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M````````````````````````````````````````````````````````````
M`````````````````/___R'Y!`$```$`+`````!6`60`0`C^``,('$BPH,&#
M"!,J7,BPH<.'$"-*G$BQHL6+&#-JW"@1`,>/($.*W(B@I,F3)T>J7,F2H<>6
M,&.J1$G3I,.:-67JW+GQ)<^?0!_BI'ES:,J@2!T"6+I4J<"F`3PR7>@SJ56K
M1H\RS&KSJE>#3*NJ%'N0:\FO:"6:15"4:]JT3:&N)&MP[=N[6\VVS:K3+MZ6
M=`OZS>OV+\O!"Q&W5)S49V"%CI]2-7Q8+V&^E,M:SDSY,6>,C#47_CPP-.FO
MGD\C-4V9M>K&K]^ZCDV[MNW;N'.[C!M9<M3)NH,+'SZ6N'&UFX^K3JW\[NS2
MR9M_9BX=[7.!UZNCUOXY>W;N5IG^?P=/T7MT\G?%GT=/<KUHS#''`QY(G:#4
MW_<A7S:ZES][Z*,EYMY(U\F'4%7U792@<04.:)B!_S6T8(0-08B5@Q1.-&&&
M"EG((6DOR86?B`=M^.&)*/HF67Y3F9CBBS""Y&*,:7E(8T8SWNB5C3I:E&./
M2?$(I(9#RF1>@$6R]&.20F$(('Q,SA5E94@F)&1U84G(6X@J'CCE2D="2>.$
M8G&9GY=?$N@D=FMF&-:2$J:I9I4(7=E<;U(*2&>:8?JGXWUPNK3?4'+6U::=
M3>[YTYN!`M=AFT/V2:B1D`+VYGQZBFEEI<1)BE-?G"J)'Z:/*BI8J,)YFA.E
MII[&8ES^^F7JIZR3TOKI:ZH2Q:JF[\U:$8*D_M=@JW@ARF&CL0W+:V;&NIFA
MLKYVA^J8A1+4;'S3QH@LA==6FYZW;!(+;E`MBLAEK..F&UN9]HVJ[KOPQBNO
MJ%&9.>*V\^8+$[`LNELOH_H&/!R^`A>\J,$[=5LMP0B7NFS#!3$,<:^U3HRF
MQ6!F.Z_$&#\9;<==@ASNPZ>*VS#'7^:*DLA@L6SMH1K+B_*4*FOE\F\W!U!S
M5SG/'.7.9^6,\\U`L]6CB6<"ZJC+10.Y(;#_#LTHB2(W?726@C[56VH^,VEU
MD3YWG>370X8M--DNJV=RI#"O_=^EP=89<XIHCWEF<;:N"F[^W=I.1:_#'_/9
M-LDA*4S1N7%3?.O>@P<^)^$Z09TGX!57R_=,<]NF-N0C.Z[=Y8][OI/8]`VZ
M>-ZZ1@BZ2(;_ZO?DFYK<.K.-5TXEYS*%^'3I0U\<.^ZSMU;[Z8NM>27<$"G]
MNN]RRVY\YCRM7OCS;E-%M:#V.C;U]MQW[_WWX(<O_OCDEV_^^>BGK_[ZXEN_
M/-ZJ4X][C=##A3S\PLHO>K'UHW4]_NR!ENTX$SSND$XV^AL@[:KWIV<ED'C2
M8N"-#GB<`DY/@M1B'`:#U#]G:7!^UND@A2C((!$*32,D[)0)3XB1%`['@BQ,
MWKA@&$.G?'!_-90AN^Y6HASZ4&L;B.M=B^@#L!\:L5Y$C%C(CLC$)CKQB5!\
%2$```#L_
`
end

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
