UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act File No. 811-08076
-------------------------------------------------------
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
-------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
466 Lexington Avenue, New York, New York 10017-3140
-------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
J. Kevin Gao, Esq.
The Emerging Markets Telecommunications Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3140
Registrant's telephone number, including area code: (212) 875-3500
Date of fiscal year end: October 31st
Date of reporting period: November 1, 2004 to October 31, 2005
ITEM 1. REPORTS TO STOCKHOLDERS.
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
ANNUAL REPORT
OCTOBER 31, 2005
[ETF LISTED NYSE(R) LOGO]
ETF-AR-1005
CONTENTS
Letter to Shareholders 1
Portfolio Summary 4
Schedule of Investments 6
Statement of Assets and Liabilities 10
Statement of Operations 11
Statement of Changes in Net Assets 12
Statement of Cash Flows 13
Financial Highlights 14
Notes to Financial Statements 16
Report of Independent Registered Public Accounting Firm 24
Results of Annual Meeting of Shareholders 25
Description of InvestLink(SM) Program 26
Information Concerning Directors and Officers 29
Annual Certifications 32
Proxy Voting and Portfolio Holdings Information 33
LETTER TO SHAREHOLDERS
December 5, 2005
DEAR SHAREHOLDER:
For the fiscal year ended October 31, 2005, The Emerging Markets
Telecommunications Fund, Inc. (the "Fund") had a return of 27.84%, based on net
asset value, vs. a same-period increase of 34.34% for the Morgan Stanley Capital
International Emerging Markets Index* (MSCI EM) and an increase of 34.77% for
the telecommunications services subsector of the MSCI EM. Based on market price,
the Fund had a gain of 28.05% for the period.
MARKET OVERVIEW: EMERGING MARKETS SOAR IN GLOBAL RALLY
The period was a positive one for stock markets around the world, aided by
optimism over global economic growth and generally favorable earnings reports.
Late-period weakness notwithstanding, emerging markets as a group had strong
overall returns in absolute terms and outperformed developed markets, aided in
part by high and rising commodity prices, which for many commodity-exporting
emerging economies resulted in stronger financial profiles.
Emerging telecom stocks as a group had a robust absolute return for the period.
Despite their domestic orientation, the sector kept pace with the broader
emerging market universe, reflecting solid telecom earnings growth in many
areas. Within the sector, the best performers tended to be high growth wireless
stocks that delivered better than expected subscriber and profit growth over the
period. In broad regional terms, telecom markets within Latin America and the
Eastern Europe/Middle East/Africa (EMEA) segments outperformed, while Asia was
an overall laggard.
PERFORMANCE: GOOD STOCK SELECTION COUNTERED BY PRIVATE PLACEMENTS
Due to the strong absolute returns, both the Fund's stock price and NAV rose to
four-year highs towards the end of the period, though the Fund trailed its
benchmarks for the 12-month period. We attribute this primarily to the Fund's
private placement holdings, which generated a relatively modest return over the
period and accounted for about 18.0% of the Fund's net assets as of October 31,
2005.
We shifted our strategy more in favor of growth wireless stocks in the latter
half of the period, and this proved beneficial as such companies outperformed.
One standout was America Movil S.A de C.V. (15.7% of the Fund's net assets as of
October 31, 2005), which had a large gain on the back of strong wireless
subscriber growth across Latin America. The Fund's stock selection in Russia was
positive in relative terms as well as absolutely, despite an overall negative
showing for Russian telecom stocks in the period. Within Asia, our exposure to
India was largely via Bharti Tele-Ventures Ltd. (1.9% of the Fund's net assets
as of October 31, 2005), the leading private sector provider of telecom services
in the country. The stock posted a triple-digit gain in the period. Another
factor that helped the Fund's relative performance was its underweighting in
Taiwan, whose telecom market struggled in the period.
On the negative side with respect to the Fund's non-private placement holdings,
we were underweight in SK Telecom Co., Ltd. (3.7% of the Fund's net assets as of
October 31, 2005), reflecting our relatively less bullish view of its growth
prospects. We are sticking to our conviction on this stock and continue to
underweight the position. Elsewhere of note, we were also underweighted in China
Mobile (Hong Kong) Ltd. ("China Mobil") (11.6% of the Fund's net assets as of
October 31, 2005) at a time in the period when the stock outperformed. We have
raised our weighting in the stock more recently, due to our decreasing concern
over the possible impact of a restructuring.
PORTFOLIO ACTIVITY: ADDING TO CHINA AND EGYPT
As noted, we added to our position in China Mobile, reflecting our favorable
view on its subscriber and profit growth potential along with our decreased
restructuring worries. In another noteworthy move, we added to our position in
Orascom Telecom Holding SAE (5.4% of the Fund's net assets as of October 31,
2005), an Egyptian telecom provider, viewing a mid-period pullback in the stock
as a buying opportunity.
Despite our continued positive view on Indonesian wireless stocks, we pared back
our exposure based on heightened macroeconomic concerns, notably a government
budget that's become more burdened by popular fuel subsidies. Sporadic worries
over bird flu outbreaks are another concern of ours.
1
LETTER TO SHAREHOLDERS
LOOKING AHEAD: RISKS LARGELY EXTERNAL
We continue to view emerging market telecom stocks as a compelling investment
thesis, given the growth potential within countries relatively lacking in
telecom services but which continue to modernize their economies at a rapid
pace. We also believe that merger and acquisition activity might continue to
present interesting opportunities. As an example of recent such activity, in
June a sizable stake in a Pakistan telecom company was sold to one of the
leading telecom services providers in the Middle East. The winning bid was
substantially above rival bids from Singapore and China. This transaction in our
view highlights both the scarcity value of emerging market telecom assets and
the growth potential of these franchises.
For our part, the portfolio remains biased towards wireless companies that we
believe are well managed and have solid growth prospects. Subscriber growth has
exceeded general expectations in many markets and we expect this trend could
continue into 2006.
The main risks we see are macroeconomic, most specifically the potential for
both higher U.S. interest rates and higher oil prices to hurt U.S. consumer
spending. These factors could spark periodic profit taking in emerging stock
markets which have performed well. We would view any such correction as a good
buying opportunity, in the belief that the long-term demand for
telecommunication services could be relatively resistant to these external
shocks.
PRIVATE PLACEMENTS UPDATE
As discussed in previous reports, most of the Fund's private placement holdings
are technology oriented venture-capital funds. Following a series of consecutive
write-downs related to past difficult market environments for technology and
telecom providers, the most recent 12-month period saw more widespread
stability, and even had increases in valuations. Write-ups of these types of
investments typically have in the past lagged recovery in the public markets, as
such write-ups are generally the result of a third-party financing round, IPO or
sale of an investment, while write-downs also reflect the manager's judgment
with respect to any impairment of value.
Despite fluctuating markets during the period, which were particularly
challenging in the last few months, several of these funds also benefited from
appreciation of underlying investments, primarily in those companies that had
already reached a level of maturity that allowed them to go public.
Distributions in this period increased from the previous fiscal year ($1.6
million as compared to $1.3 million). This reflected an improving technology
sector, in combination with a maturation of underlying portfolio companies that
has driven a growing number of liquidity events (strategic sales or sales in the
public markets). We hope to see this trend continue and accelerate over the
coming quarters. Within this improved environment, the investment pace of the
funds remained strong, with almost $2.5 million of capital calls made by the
fund investments during the period (20.6% of unfunded commitments at the
beginning of the period). We believe that the recent investments made by the
funds in which we have invested are being done at better valuations and at a
later stage in companies' development. In this context, we hope that performance
in the wake of the technology bubble should be successful over time.
Respectfully,
/s/ Neil Gregson
Neil Gregson
Chief Investment Officer**
2
LETTER TO SHAREHOLDERS
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS; THESE RISKS ARE GENERALLY HEIGHTENED FOR EMERGING MARKET
INVESTMENTS. SINCE THE FUND FOCUSES ITS INVESTMENTS ON COMPANIES INVOLVED IN
TELECOMMUNICATIONS, AN INVESTMENT IN THE FUND MAY INVOLVE A GREATER DEGREE OF
RISK THAN AN INVESTMENT IN OTHER FUNDS THAT SEEK CAPITAL APPRECIATION BY
INVESTING IN A BROADER MIX OF ISSUERS.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS FORWARD-LOOKING
STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND FOREIGN MARKET,
INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT REGULATION AND
THEIR POTENTIAL IMPACT ON THE FUND'S INVESTMENT PORTFOLIO. THESE STATEMENTS ARE
SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS, DEVELOPMENTS AND
REGULATIONS IN THE FUTURE AND THEIR IMPACT ON THE FUND COULD BE MATERIALLY
DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE FUND HAS NO
OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
----------
* The Morgan Stanley Capital International Emerging Markets Index is an
unmanaged index (with no defined investment objective) of emerging-market
equities that includes reinvestment of net dividends, and is the exclusive
property of Morgan Stanley Capital International Inc. Investors cannot invest
directly in an index.
** Neil Gregson, who is a Managing Director of Credit Suisse Asset Management,
Limited ("CSAML"), is head of emerging market equities, based in London. Prior
to assuming this role in 2003, he was chief investment officer for equities in
Emerging Europe, the Middle East and Africa. Mr. Gregson joined CSAML in 1990
after working as an investment analyst in Johannesburg. Previously, he was a
mining engineer with Anglo American Corporation in South Africa. Mr. Gregson
holds a BSc (Hons.) in mining engineering from Nottingham University. He is also
the Chief Investment Officer of The First Israel Fund, Inc.
3
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
PORTFOLIO SUMMARY - AS OF OCTOBER 31, 2005 (UNAUDITED)
[CHART]
SECTOR ALLOCATION
OCTOBER 31, 2005 OCTOBER 31, 2004
Cellular Telecommunications 44.04% 35.49%
Electric Generation 1.13% 0.00%
Electric Products-Miscellaneous 0.00% 1.06%
Internet Services/Software 1.00% 2.14%
Investment & Holding Company 0.15% 0.11%
Technology 1.75% 0.86%
Telecommunications 24.65% 18.94%
Telephone-Integrated 14.69% 24.50%
Television/Cable Television 0.19% 1.15%
Venture Capital 10.88% 12.80%
Cash & Other Assets 1.52% 2.95%
AS A PERCENT OF NET ASSETS
[CHART]
GEOGRAPHIC ASSET BREAKDOWN
OCTOBER 31, 2005 OCTOBER 31, 2004
Africa 7.65% 5.39%
Asia 39.05% 31.49%
Europe 4.33% 2.81%
Latin America 25.90% 41.05%
Middle East 14.29% 8.09%
North America 1.00% 0.94%
Global 6.26% 7.28%
Cash & Other Assets 1.52% 2.95%
AS A PERCENT OF NET ASSETS
4
[CHART]
SUMMARY OF SECURITIES BY COUNTRY/REGION
OCTOBER 31, 2005 OCTOBER 31, 2004
Asia 2.20% 2.64%
Brazil 8.83% 10.94%
Chile 0.00% 3.05%
China 13.69% 5.26%
Egypt 7.11% 0.00%
Indonesia 3.01% 4.83%
Israel 7.18% 8.09%
Malaysia 1.15% 3.28%
Mexico 15.69% 21.56%
Poland 3.28% 0.00%
Russia 8.37% 3.58%
South Africa 7.65% 5.39%
South Korea 3.70% 8.76%
Global 6.26% 7.28%
Other 10.36% 12.39%
AS A PERCENT OF NET ASSETS
TOP 10 HOLDINGS, BY ISSUER
COUNTRY/ PERCENT OF
HOLDING SECTOR REGION NET ASSETS
--------------------------------------------------------------------------------------------------------------
1. America Movil S.A. de C.V. Cellular Telecommunications Mexico 15.7
2. China Mobile (Hong Kong) Ltd. Cellular Telecommunications China 11.6
3. Orascom Telecom Holding SAE Telecommunications Egypt 5.4
4. MTN Group Ltd. Cellular Telecommunications South Africa 5.2
5. Emerging Markets Ventures I, L.P. Venture Capital Global 5.0
6. SK Telecom Co., Ltd. Cellular Telecommunications South Korea 3.7
7. Tele Norte Leste Participacoes S.A. Telephone-Integrated Brazil 3.6
8. Telekomunikacja Polska S.A. Telecommunications Poland 3.3
9. Brasil Telecom Participacoes S.A. Telephone-Integrated Brazil 2.6
10. PT Telekomunikasi Indonesia Telecommunications Indonesia 2.5
5
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
SCHEDULE OF INVESTMENTS - OCTOBER 31, 2005
NO. OF
DESCRIPTION SHARES/UNITS VALUE
--------------------------------------------------------------------------------------------------------
EQUITY OR EQUITY-LINKED SECURITIES-98.48%
EQUITY OR EQUITY-LINKED SECURITIES OF
TELECOMMUNICATION COMPANIES IN EMERGING
COUNTRIES-97.33%
ARGENTINA-0.49%
TELEPHONE-INTEGRATED-0.49%
Telecom Argentina S.A., ADR+^
(Cost $488,425) 41,000 $ 539,560
--------------
ASIA-2.20%
TECHNOLOGY-0.00%
Nirvana Capital Ltd.+* 42,000 0
--------------
TELECOMMUNICATIONS-2.20%
TVG Asian Communications
Fund II, L.P.+++# 3,622,118 2,414,279
--------------
TOTAL ASIA (Cost $3,111,985) 2,414,279
--------------
BRAZIL-8.76%
CABLE TELEVISION-0.19%
Net Servicos de Comunicacao
S.A., ADR^ 52,800 211,728
--------------
ELECTRIC GENERATION-1.13%
AES Tiete S.A., PN 56,700,000 1,246,154
--------------
TELEPHONE-INTEGRATED-7.44%
Brasil Telecom Participacoes
S.A., ADR^ 69,500 2,891,895
Tele Norte Leste Participacoes
S.A 74,716 1,788,075
Tele Norte Leste Participacoes
S.A., ADR^ 124,800 2,208,960
Telecomunicacoes de Sao Paulo
S.A., ADR^ 200 3,906
Telemar Norte Leste S.A., PNA 47,000 1,272,949
--------------
8,165,785
--------------
TOTAL BRAZIL (Cost $6,987,131) 9,623,667
--------------
CHINA-13.69%
CELLULAR TELECOMMUNICATIONS-11.58%
China Mobile (Hong Kong)
Ltd 1,503,500 $ 6,744,383
China Mobile (Hong Kong)
Ltd., ADRY 265,800 5,967,210
--------------
12,711,593
--------------
TELECOMMUNICATIONS-1.35%
China Telecom Corp. Ltd. 4,543,000 1,486,839
--------------
TELEPHONE-INTEGRATED-0.76%
China Netcom Group Corp. 527,000 835,249
--------------
TOTAL CHINA (Cost $13,340,082) 15,033,681
--------------
EGYPT-7.11%
CELLULAR TELECOMMUNICATIONS-1.74%
Egyptian Company for Mobile
Services 25,800 851,014
Vodafone Egypt
Telecommunications Co. SAE 66,700 1,057,459
--------------
1,908,473
--------------
TELECOMUNICATIONS-5.37%
Orascom Telecom Holding
SAE 59,452 5,896,187
--------------
TOTAL EGYPT (Cost $6,178,660) 7,804,660
--------------
HUNGARY-1.05%
TELEPHONE-INTEGRATED-1.05%
Magyar Telekom
(Cost $968,277) 244,263 1,157,649
--------------
INDIA-2.58%
CELLULAR TELECOMMUNICATIONS-1.91%
Bharti Tele-Ventures Ltd.+ 293,549 2,103,368
--------------
See accompanying notes to financial statements.
6
NO. OF
DESCRIPTION SHARES/UNITS VALUE
--------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-0.67%
Mahanagar Telephone Nigam
Ltd 201,600 $ 495,838
Videsh Sanchar Nigam Ltd. 36,727 238,342
--------------
734,180
--------------
TOTAL INDIA (Cost $1,802,041) 2,837,548
--------------
INDONESIA-3.01%
TELECOMMUNICATIONS-3.01%
PT Indosat Tbk+ 1,265,500 610,465
PT Telekomunikasi Indonesia 5,370,500 2,697,467
--------------
TOTAL INDONESIA (Cost $3,072,361) 3,307,932
--------------
ISRAEL-7.10%
TECHNOLOGY-0.84%
SVE Star Ventures Enterprises
GmbH & Co. No. IX KG+++# 1,500,000 923,775
--------------
TELECOMMUNICATIONS-0.77%
Lynx Photonic Networks* 375,394 344,048
Lynx Series E* 493,000 498,488
--------------
842,536
--------------
TELEPHONE-INTEGRATED-0.46%
Bezeq Israeli
Telecommunication
Corp. Ltd. 373,900 506,411
--------------
VENTURE CAPITAL-5.03%
BPW Israel Ventures LLC+++# 1,577,293 855,397
Concord Ventures II
Fund L.P.+++# 3,760,000 1,372,720
Formula Ventures L.P.+++ 1,499,989 121,649
Giza GE Venture
Fund III, L.P.+++# 2,475,000 1,291,579
K.T. Concord Venture
Fund L.P.+++ 2,000,000 1,026,688
Neurone Ventures II, L.P.+++# 536,184 223,393
Walden-Israel
Ventures III, L.P.+++# 774,813 627,738
--------------
5,519,164
--------------
TOTAL ISRAEL (Cost $11,090,637) 7,791,886
--------------
LATIN AMERICA-0.89%
VENTURE CAPITAL-0.89%
J.P. Morgan Latin America
Capital Partners
(Cayman), L.P.+++ 835,097 $ 342,899
J.P. Morgan Latin America
Capital Partners
(Delaware), L.P.+++# 1,339,000 638,073
--------------
TOTAL LATIN AMERICA (Cost $1,160,154) 980,972
--------------
MALAYSIA-1.15%
TELECOMMUNICATIONS-1.15%
Telekom Malaysia Berhad
(Cost $1,300,321) 483,100 1,262,433
--------------
MEXICO-15.69%
CELLULAR TELECOMMUNICATIONS-15.69%
America Movil S.A. de C.V.,
Series L, ADRY
(Cost $5,416,379) 656,300 17,227,875
--------------
PHILIPPINES-1.26%
TELEPHONE-INTEGRATED-1.26%
Philippine Long Distance
Telephone Co.
(Cost $1,306,466) 45,370 1,384,725
--------------
POLAND-3.28%
TELECOMMUNICATIONS-3.28%
Telekomunikacja Polska S.A
(Cost $3,175,486) 500,424 3,599,230
--------------
RUSSIA-8.37%
CELLULAR TELECOMMUNICATIONS-4.19%
AO VimpelCom, ADR+^ 56,100 2,244,000
Mobile Telesystems, ADR^ 63,700 2,356,263
--------------
4,600,263
--------------
See accompanying notes to financial statements.
7
NO. OF
DESCRIPTION SHARES/UNITS VALUE
--------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS-2.94%
AFK Sistema, GDR 23,272 $ 521,293
AFK Sistema, 144A, GDR^ 98,371 2,204,002
VolgaTelecom, ADR^ 68,500 497,310
--------------
3,222,605
--------------
TELEPHONE-INTEGRATED-0.33%
Rostelecom, ADR^ 28,800 365,184
--------------
TELEVISION-0.91%
Independent Network Television
Holding Ltd., Series II+++ 1,000,000 1,000,000
--------------
TOTAL RUSSIA (Cost $7,923,914) 9,188,052
--------------
SOUTH AFRICA-7.65%
CELLULAR TELECOMMUNICATIONS-5.23%
MTN Group Ltd. 771,533 5,748,599
--------------
TELEPHONE-INTEGRATED-2.42%
Telkom South Africa Ltd. 140,499 2,653,814
--------------
TOTAL SOUTH AFRICA (Cost $6,831,088) 8,402,413
--------------
SOUTH KOREA-3.70%
CELLULAR TELECOMMUNICATIONS-3.70%
SK Telecom Co., Ltd. 18,490 3,356,022
SK Telecom Co., Ltd., ADR^ 35,000 707,350
--------------
TOTAL SOUTH KOREA (Cost $4,114,587) 4,063,372
--------------
TAIWAN-1.65%
TELECOMMUNICATIONS-1.65%
Chunghwa Telecom Co.,
Ltd., ADRY (Cost $2,079,207) 104,400 1,808,208
--------------
THAILAND-1.44%
TELECOMMUNICATIONS-0.96%
Shin Corporation Public
Company Ltd. 1,135,600 1,057,796
--------------
TELEPHONE-INTEGRATED-0.48%
True Corporation Public Co.
Ltd., Foreign Registered+ 2,879,200 $ 522,272
True Corporation Public Co.
Ltd., Foreign Registered,
Warrants (expiring 04/03/08)+ 1,717,483 0
--------------
522,272
--------------
TOTAL THAILAND (Cost $1,749,458) 1,580,068
--------------
GLOBAL-6.26%
TELECOMMUNICATIONS-1.30%
TeleSoft Partners L.P.+++ 1,250,000 0
TeleSoft Partners II QP, L.P.+++# 1,740,000 1,423,181
--------------
1,423,181
--------------
VENTURE CAPITAL-4.96%
Emerging Markets
Ventures I, L.P.+++# 7,215,129 5,452,790
--------------
TOTAL GLOBAL (Cost $6,673,685) 6,875,971
--------------
TOTAL EMERGING COUNTRIES
(Cost $88,770,344) 106,884,181
--------------
EQUITY SECURITIES OF TELECOMMUNICATION
COMPANIES IN DEVELOPED COUNTRIES-1.00%
UNITED STATES-1.00%
INTERNET-SERVICES-1.00%
Technology Crossover
Ventures IV, L.P.+++#
(Cost $853,339) 1,708,800 1,100,976
--------------
EQUITY SECURITIES OF COMPANIES PROVIDING OTHER
ESSENTIAL SERVICES IN THE DEVELOPMENT OF AN
EMERGING COUNTRY'S INFRASTRUCTURE-0.15%
ARGENTINA-0.00%
INVESTMENT & HOLDING COMPANY-0.00%
Exxel Capital Partners V, L.P.+++
(Cost $380,019) 1,897,761 0
--------------
See accompanying notes to financial statements.
8
NO. OF
DESCRIPTION SHARES/UNITS VALUE
--------------------------------------------------------------------------------------------------------
BRAZIL-0.07%
INVESTMENT & HOLDING COMPANY-0.07%
Contax Participacoes S.A.,
ADRY (Cost $42,586) 112,600 $ 76,568
--------------
ISRAEL-0.08%
INVESTMENT & HOLDING COMPANY-0.08%
The Renaissance Fund LDC+++
(Cost $483,692) 160 87,125
--------------
TOTAL OTHER ESSENTIAL SERVICES
(Cost $906,297) 163,693
--------------
TOTAL EQUITY OR EQUITY-LINKED
SECURITIES (Cost $90,529,980) 108,148,850
--------------
PRINCIPAL
AMOUNT (000'S)
--------------
SHORT-TERM INVESTMENTS-8.80%
GRAND CAYMAN-0.73%
Wachovia Bank,
overnight deposit,
3.13%, 11/01/05**
(Cost $806,000) $ 806 806,000
--------------
PRINCIPAL
DESCRIPTION AMOUNT (000'S) VALUE
--------------------------------------------------------------------------------------------------------
UNITED STATES-8.07%
Bear, Stearns & Co. Inc.,
repurchase agreement,
(Agreement dated 10/31/05 to
be repurchased at $4,948,057),
2.03%***, 11/01/05, collateralized
by U.S. Government
Bonds, Interest only**** $ 4,948 $ 4,947,778
Bear, Stearns & Co. Inc.,
repurchase agreement,
(Agreement dated 10/31/05 to
be repurchased at $3,910,741),
4.06%*****, 11/01/05, collateralized
by U.S. Government
Bonds, Interest only**** 3,910 3,910,300
--------------
TOTAL UNITED STATES
(Cost $8,858,078) 8,858,078
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $9,664,078) 9,664,078
--------------
TOTAL INVESTMENTS-107.28%
(Cost $100,194,058) (Notes B,E,G) 117,812,928
--------------
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS-(7.28)% (7,990,242)
--------------
NET ASSETS-100.00% $ 109,822,686
==============
----------
+ Non-income producing security.
++ Restricted security, not readily marketable; security is valued at fair
value as determined in good faith by, or under the direction of, the Board
of Directors under procedures established by the Board of Directors. (See
Notes B and H)
^ Security or a portion thereof is out on loan.
# As of October 31, 2005, the aggregate amount of open commitments for the
Fund is $6,166,532. (See Note H)
* Not readily marketable security; security is valued at fair value as
determined in good faith by, or under the direction of, the Board of
Directors under procedures established by the Board of Directors. (See
Note B)
** Variable rate account. Rate resets on a daily basis; amounts are available
on the same business day.
*** Interest rate after any rebate earned by borrower of securities.
**** Represents security purchased with cash collateral received for securities
on loan.
***** Interest rate before any rebate earned by borrower of securities.
ADR American Depository Receipts.
GDR Global Depository Receipts.
PN Preferred Shares.
PNA Preferred Shares, Class A.
See accompanying notes to financial statements.
9
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - OCTOBER 31, 2005
ASSETS
Investments, at value, including collateral for securities on loan of $8,858,078 (1)
(Cost $100,194,058) (Notes B,E,G) $ 117,812,928
Cash (including $7,552 of foreign currencies with a cost of $7,324) 7,959
Receivables:
Investments sold 941,675
Dividends receivable 135,343
Prepaid expenses 6,433
---------------
Total Assets 118,904,338
---------------
LIABILITIES
Payables:
Upon return of securities loaned (Note B) 8,858,078
Investment advisory fee (Note C) 99,897
Directors' fees 11,823
Administration fees (Note C) 7,343
Other accrued expenses 104,511
---------------
Total Liabilities 9,081,652
---------------
NET ASSETS (applicable to 8,632,861 shares of common stock outstanding) (Note D) $ 109,822,686
===============
NET ASSETS CONSIST OF
Capital stock, $0.001 par value; 8,632,861 shares issued and outstanding
(100,000,000 shares authorized) $ 8,633
Paid-in capital 165,996,412
Accumulated net realized loss on investments and foreign currency related transactions (73,810,081)
Net unrealized appreciation in value of investments and translation of other
assets and liabilities denominated in foreign currencies 17,627,722
---------------
Net assets applicable to shares outstanding $ 109,822,686
===============
NET ASSET VALUE PER SHARE ($109,822,686 DIVIDED BY 8,632,861) $ 12.72
===============
MARKET PRICE PER SHARE $ 10.91
===============
----------
(1) Includes securities out on loan to brokers with a market value of
$8,790,364
See accompanying notes to financial statements.
10
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF OPERATIONS - FOR THE FISCAL YEAR ENDED OCTOBER 31, 2005
INVESTMENT INCOME
Income (Note B):
Dividends $ 2,680,716
Interest 49,997
Securities lending 38,045
Less: Investment loss allocated from partnerships (485,217)
Less: Foreign taxes withheld (239,862)
---------------
Total Investment Income 2,043,679
---------------
Expenses:
Investment advisory fees (Note C) 1,072,065
Legal fees 191,559
Printing (Note C) 175,422
Custodian fees 139,615
Administration fees (Note C) 110,035
Audit and tax fees 59,362
Directors' fees 54,587
Accounting fees 33,468
NYSE listing fees 23,674
Shareholder servicing fees 20,397
Insurance 5,908
Miscellaneous 13,475
---------------
Total Expenses 1,899,567
---------------
Net Investment Income 144,112
---------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY RELATED TRANSACTIONS
Net realized gain/(loss) from:
Investments 15,270,394
Foreign currency related transactions (176,107)
Net change in unrealized appreciation in value of investments and translation
of other assets and liabilities denominted in foreign currencies 8,684,985
---------------
Net realized and unrealized gain on investments and foreign currency related
transactions 23,779,272
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 23,923,384
===============
See accompanying notes to financial statements.
11
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE FOR THE FOR THE
FISCAL YEAR ELEVEN MONTHS FISCAL YEAR
ENDED ENDED ENDED
OCTOBER 31, 2005 OCTOBER 31, 2004 NOVEMBER 30, 2003
---------------- ---------------- -----------------
INCREASE IN NET ASSETS
Operations:
Net investment income/(loss) $ 144,112 $ 96,738 $ (871,238)
Net realized gain/(loss) on investments and foreign currency
related transactions 15,094,287 7,725,125 (4,955,106)
Net change in unrealized appreciation/depreciation in value of
investments and translation of other assets and liabilities
denominated in foreign currencies 8,684,985 7,465,722 13,788,482
--------------- --------------- ---------------
Net increase in net assets resulting from operations 23,923,384 15,287,585 7,962,138
--------------- --------------- ---------------
Capital share transactions (Note I):
Cost of 47,160 and 484,200 shares purchased under the
share repurchase program, respectively (451,752) (3,835,755) --
--------------- --------------- ---------------
Total increase in net assets 23,471,632 11,451,830 7,962,138
--------------- --------------- ---------------
NET ASSETS
Beginning of period 86,351,054 74,899,224 66,937,086
--------------- --------------- ---------------
End of period $ 109,822,686 $ 86,351,054 $ 74,899,224
=============== =============== ===============
See accompanying notes to financial statements.
12
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
STATEMENT OF CASH FLOWS - FOR THE FISCAL YEAR ENDED OCTOBER 31, 2005
INCREASE IN CASH FROM
Operating Activities:
Investment income received $ 2,782,936
Operating expenses paid (1,956,302)
Purchases of long-term portfolio investments (80,896,172)
Proceeds from disposition of long-term portfolio investments 78,900,700
Net purchase of short-term portfolio investments 1,620,000
Cost of shares repurchased (451,752)
--------------
Net decrease in cash from operating activities $ (590)
Cash at beginning of year 8,549
--------------
Cash at end of year $ 7,959
==============
RECONCILIATION OF NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS TO NET DECREASE IN CASH
FROM OPERATING ACTIVITIES
Net increase in net assets resulting from operations $ 23,923,384
Adjustments:
Decrease in receivables $ 254,040
Decrease in accrued expenses (54,825)
Increase in prepaid expenses (1,910)
Net decrease in cash from investment transactions (375,472)
Cost of shares repurchased (451,752)
Net investment loss allocated from partnerships 485,217
Net realized and unrealized gain on investments and foreign currency
related transactions (23,779,272)
--------------
Total adjustments (23,923,974)
--------------
NET DECREASE IN CASH FROM OPERATING ACTIVITIES $ (590)
==============
See accompanying notes to financial statements.
13
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
FINANCIAL HIGHLIGHTS^
Contained below is per share operating performance data for a share of
common stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
FOR THE FOR THE FOR THE FISCAL YEARS
FISCAL YEAR ELEVEN MONTHS ENDED
ENDED ENDED NOVEMBER 30,
OCTOBER 31, OCTOBER 31, ------------------------------------------
2005 2004 2003 2002 2001
----------- ------------- ----------- ----------- -----------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 9.95 $ 8.17 $ 7.30 $ 8.42 $ 10.35
----------- ----------- ----------- ----------- -----------
Net investment income/(loss) 0.02+ 0.01+ (0.10)+ (0.15)+++ (0.12)++
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions 2.74 1.70 0.97 (1.03) (1.88)
----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations 2.76 1.71 0.87 (1.18) (2.00)
----------- ----------- ----------- ----------- -----------
Dividends and distributions to shareholders:
Net investment income -- -- -- -- --
Net realized gain on investments and foreign
currency related transactions -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Total dividends and distributions to shareholders -- -- -- -- --
----------- ----------- ----------- ----------- -----------
Anti-dilutive impact due to capital shares tendered
or repurchased 0.01 0.07 -- 0.06 0.07
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 12.72 $ 9.95 $ 8.17 $ 7.30 $ 8.42
=========== =========== =========== =========== ===========
Market value, end of period $ 10.91 $ 8.52 $ 6.85 $ 6.22 $ 6.88
=========== =========== =========== =========== ===========
Total investment return (a) 28.05% 24.38% 10.13% (9.59)% (10.50)%
=========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 109,823 $ 86,351 $ 74,899 $ 66,937 $ 90,771
Ratio of expenses to average net assets (b) 1.93% 1.81%(c) 1.77% 1.90% 1.76%
Ratio of expenses to average net assets,
excluding taxes 1.92% 1.81%(c) 1.77% 1.77% 1.74%
Ratio of net investment income/(loss) to average
net assets 0.15% 0.13%(c) (1.33)% (1.89)% (1.18)%
Portfolio turnover rate 80.95% 71.57% 120.31% 94.89% 82.16%
^ Per share amounts prior to November 3, 2000 have been restated to reflect a
conversion factor of 0.9994 for shares issued in connection with the merger
of The Emerging Markets Infrastructure Fund, Inc. and The Emerging Markets
Telecommunications Fund, Inc.
+ Based on average shares outstanding.
++ Based on shares outstanding on November 21, 2001 (prior to the 2001 tender
offer) and November 30, 2001.
+++ Based on shares outstanding on November 6, 2002 (prior to the 2002 tender
offer) and November 30, 2002.
(a) Total investment return at market value is based on the changes in market
price of a share during the period and assumes reinvestment of dividends
and distributions, if any, at actual prices pursuant to the Fund's dividend
reinvestment program.
(b) Ratios shown are inclusive of Brazilian transaction and Chilean
repatriation taxes, if any.
(c) Annualized.
See accompanying notes to financial statements.
14
FOR THE
SIX MONTHS
ENDED FOR THE FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, --------------------------------------------------------
2000 2000 1999 1998 1997
------------ ----------- ----------- ----------- -----------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 18.36 $ 12.13 $ 16.37 $ 21.54 $ 20.95
----------- ----------- ----------- ----------- -----------
Net investment income/(loss) (0.14)+ (0.20)+ (0.04)+ (0.06) 0.10
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions (4.78) 6.14 (2.41) (1.40) 2.86
----------- ----------- ----------- ----------- -----------
Net increase/(decrease) in net assets resulting
from operations (4.92) 5.94 (2.45) (1.46) 2.96
----------- ----------- ----------- ----------- -----------
Dividends and distributions to shareholders:
Net investment income -- -- -- (0.09) (0.27)
Net realized gain on investments and foreign
currency related transactions (3.09) -- (1.96) (3.62) (2.10)
----------- ----------- ----------- ----------- -----------
Total dividends and distributions to shareholders (3.09) -- (1.96) (3.71) (2.37)
----------- ----------- ----------- ----------- -----------
Anti-dilutive impact due to capital shares tendered
or repurchased -- 0.29 0.17 -- --
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 10.35 $ 18.36 $ 12.13 $ 16.37 $ 21.54
=========== =========== =========== =========== ===========
Market value, end of period $ 7.688 $ 13.508 $ 9.819 $ 13.008 $ 17.385
=========== =========== =========== =========== ===========
Total investment return (a) (28.46)% 37.58% (9.99)% (4.57)% 14.31%
=========== =========== =========== =========== ===========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 131,325 $ 130,300 $ 94,026 $ 138,023 $ 181,627
Ratio of expenses to average net assets (b) 1.91%(c) 2.24% 2.09% 2.32% 1.90%
Ratio of expenses to average net assets,
excluding taxes 1.91%(c) 2.04% 2.01% 1.82% 1.82%
Ratio of net investment income/(loss) to average
net assets (1.50)%(c) (1.15)% (0.33)% (0.29)% 0.52%
Portfolio turnover rate 51.72% 113.75% 179.66% 162.58% 42.14%
15
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A. ORGANIZATION
The Emerging Markets Telecommunications Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a closed-end,
non-diversified management investment company. On August 9, 2004, the Fund's
Board of Directors approved a change in the Fund's fiscal year from a
twelve-month period ending November 30 to a twelve-month period ending October
31. The statements of changes in net assets and financial highlights for 2004
represent the eleven-month period beginning on December 1, 2003 and ending
October 31, 2004.
NOTE B. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
SECURITY VALUATION: The net asset value of the Fund is determined daily as of
the close of regular trading on the New York Stock Exchange, Inc. (the
"Exchange") on each day the Exchange is open for business. The Fund's equity
investments are valued at market value, which is generally determined using the
closing price on the exchange or market on which the security is primarily
traded at the time of valuation (the "Valuation Time"). If no sales are
reported, equity investments are generally valued at the most recent bid
quotation as of the Valuation Time or at the lowest ask quotation in the case of
a short sale of securities. Debt securities with a remaining maturity greater
than 60 days are valued in accordance with the price supplied by a pricing
service, which may use a matrix, formula or other objective method that takes
into consideration market indices, yield curves and other specific adjustments.
Debt obligations that will mature in 60 days or less are valued on the basis of
amortized cost, which approximates market value, unless it is determined that
this method would not represent fair value. Investments in mutual funds are
valued at the mutual fund's closing net asset value per share on the day of
valuation.
Securities and other assets for which market quotations are not readily
available, or whose values have been materially affected by events occurring
before the Fund's Valuation Time, but after the close of the securities' primary
market, are valued at fair value as determined in good faith by, or under the
direction of, the Board of Directors under procedures established by the Board
of Directors. The Fund may utilize a service provided by an independent third
party which has been approved by the Board of Directors to fair value certain
securities. When fair-value pricing is employed, the prices of securities used
by a fund to calculate its net asset value may differ from quoted or published
prices for the same securities. At October 31, 2005, the Fund held 17.98% of its
net assets in securities valued at fair value as determined in good faith under
procedures established by the Board of Directors with an aggregate cost of
$24,285,308 and fair value of $19,744,798. The Fund's estimate of fair value
assumes a willing buyer and a willing seller neither acting under the compulsion
to buy or sell. Although these securities may be resold in privately negotiated
transactions, the prices realized on such sales could differ from the prices
originally paid by the Fund or the current carrying values, and the difference
could be material.
SHORT-TERM INVESTMENT: The Fund sweeps available cash into a short-term time
deposit available through Brown Brothers Harriman & Co., the Fund's custodian.
The short-term time deposit is a variable rate account classified as a
short-term investment.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on a trade date basis. The cost of investments sold is determined
by use of the specific identification method for both financial reporting and
U.S. income tax purposes.
16
Interest income is accrued as earned; dividend income is recorded on the
ex-dividend date.
TAXES: No provision is made for U.S. income or excise taxes as it is the Fund's
intention to continue to qualify as a regulated investment company and to make
the requisite distributions to its shareholders sufficient to relieve it from
all or substantially all U.S. income and excise taxes.
Income received by the Fund from sources within emerging countries and other
foreign countries may be subject to withholding and other taxes imposed by such
countries.
Under certain circumstances the Fund may be subject to a maximum of 36% Israeli
capital gains tax on gains derived from the sale of certain Israeli investments.
For the fiscal year ended October 31, 2005, the Fund did not incur such expense.
The Fund accrues foreign taxes on realized gains as a liability and reduction of
realized/unrealized gains in an amount equal to what the Fund would owe if the
securities were sold on valuation date. Taxes on foreign income are recorded
when the related income is recorded.
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
valuation date rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses on investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to changes in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances.
The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such foreign currency related transactions are
treated as ordinary income for U.S. income tax purposes.
Net unrealized currency gains or losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected as
a component of net unrealized appreciation/depreciation in value of investments,
and translation of other assets and liabilities denominated in foreign
currencies.
Net realized foreign exchange gains or losses represent foreign exchange gains
and losses from transactions in foreign currencies and forward foreign currency
contracts, exchange gains or losses realized between the trade date and
settlement date on security transactions, and the difference between the amounts
of interest and dividends recorded on the Fund's books and the U.S. dollar
equivalent of the amounts actually received.
SECURITIES LENDING: The market value of securities out on loan to brokers at
October 31, 2005, was $8,790,364, for which the Fund has received cash as
collateral of $8,858,078. Such cash collateral was reinvested into overnight
repurchase agreements with Bear, Stearns & Co. Inc. ("Bear Stearns"), which was
in turn collateralized by U.S. Government securities with a value of $9,118,331.
Security loans are required at all times to have collateral at least equal to
100% of the market value of the securities on loan; however, in the
17
event of default or bankruptcy by the other party to the agreement, realization
and/or retention of the collateral may be subject to legal proceedings. During
the fiscal year ended October 31, 2005, total earnings from the investment of
cash collateral received by the Fund in a securities lending arrangement with
Bear, Stearns Securities Corp. as the sole borrower was $174,062, of which
$136,017 was rebated to Bear, Stearns Securities Corp.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, including capital loss carryovers, if any. An
additional distribution may be made to the extent necessary to avoid the payment
of a 4% U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
income tax purposes due to U.S. generally accepted accounting principles/tax
differences in the character of income and expense recognition.
PARTNERSHIP ACCOUNTING POLICY: The Fund records its pro-rata share of the
income/(loss) and capital gains/(losses) allocated from the underlying
partnerships and adjusts the cost of the underlying partnerships accordingly.
These amounts are included in the Fund's Statement of Operations.
OTHER: Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if there is a deterioration in a country's balance of
payments or for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad. Amounts repatriated prior to the end of
specified periods may be subject to taxes as imposed by a foreign country.
The emerging countries' securities markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the securities of many companies in emerging countries may
be held by a limited number of persons, which may limit the number of securities
available for investment by the Fund. The limited liquidity of emerging country
securities markets may also affect the Fund's ability to acquire or dispose of
securities at the price and time it wishes to do so.
The Fund is sector concentrated and therefore invests a high percentage of its
assets in the telecommunications sector. As a result, the financial, economic,
business and political developments in a particular sector of the market,
positive or negative, have a greater impact on the Fund's net asset value and
will cause its shares to fluctuate more than if the Fund did not concentrate its
investments in a particular sector. Under normal market conditions, it will
invest not less than 80% of its net assets in a group of related industries
within the telecommunications sector of the market.
The Fund, subject to local investment limitations, may invest up to 25% of its
assets (at the time of commitment) in illiquid equity securities, including
securities of private equity funds (whether in corporate or partnership form)
that invest primarily in the emerging markets. When investing through another
investment fund, the Fund will bear its proportionate share of the expenses
incurred by that fund, including management fees. Such securities are expected
to be illiquid which may involve a high degree of business and financial risk
and may result in substantial losses. Because of the current absence of any
liquid trading market for these investments, the Fund may take longer to
liquidate these positions than would be the case for publicly traded securities.
Although these securities may be resold in privately
18
negotiated transactions, the prices realized on such sales could be
substantially less than those originally paid by the Fund or the current
carrying values and these differences could be material. Further, companies
whose securities are not publicly traded may not be subject to the disclosures
and other investor protection requirements applicable to companies whose
securities are publicly traded.
The Fund may enter into repurchase agreements ("repos") on U.S. Government
securities with primary government securities dealers recognized by the Federal
Reserve Bank of New York and member banks of the Federal Reserve System and on
securities issued by the governments of foreign countries, their
instrumentalities and with creditworthy parties in accordance with established
procedures. Repos are contracts under which the buyer of a security
simultaneously buys and commits to resell the security to the seller at an
agreed upon price and date. Repos are deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, the collateral must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the value of the underlying securities fall
below the value of the repurchase price plus accrued interest, the Fund will
require the seller to deposit additional collateral by the next business day. If
the request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Fund maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller;
collectibility of such claims may be limited. At October 31, 2005, the Fund had
no such agreements, other than the cash collateral received that was reinvested
in repurchase agreements under the Fund's securities lending program.
NOTE C. AGREEMENTS
Credit Suisse Asset Management, LLC ("CSAM"), serves as the Fund's investment
adviser with respect to all investments. CSAM receives as compensation for its
advisory services from the Fund, an annual fee, calculated weekly and paid
quarterly, equal to 1.25% of the first $100 million of the Fund's average weekly
market value or net assets (whichever is lower), 1.125% of the next $100 million
and 1.00% of amounts in excess of $200 million. For the fiscal year ended
October 31, 2005, CSAM earned $1,072,065 for advisory services. CSAM also
provides certain administrative services to the Fund and is reimbursed by the
Fund for costs incurred on behalf of the Fund (up to $20,000 per annum). For the
fiscal year ended October 31, 2005, CSAM was reimbursed $13,490 for
administrative services rendered to the Fund.
Credit Suisse Asset Management Limited (CSAM U.K.) ("CSAM Ltd. U.K.") and Credit
Suisse Asset Management Limited (CSAM Australia) ("CSAM Ltd. Australia"),
affiliates of CSAM, are sub-investment advisers to the Fund. CSAM Ltd. U.K. and
CSAM Ltd. Australia's sub-investment advisory fees are paid by CSAM out of
CSAM's net investment advisory fee and are not paid by the Fund.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a monthly fee that is calculated weekly based
on the Fund's average weekly net assets. For the fiscal year ended October 31,
2005, BSFM earned $96,545 for administrative services.
BankBoston, N.A., Sao Paulo ("BBNA") serves as the Fund's administrator with
respect to Brazilian investments. BBNA is paid for its services out of the
custody fee payable to Brown Brothers Harriman & Co., the Fund's accounting
agent and custodian, a quarterly fee based on the average month end Brazilian
assets of the Fund.
Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the
Fund to provide certain financial printing services. For the fiscal year ended
October 31, 2005, Merrill was paid $46,034 for its services to the Fund.
19
The Independent Directors receive fifty percent (50%) of their annual retainer
in the form of shares purchased by the Fund's transfer agent in the open market.
Directors as a group own less than 1% of the Fund's outstanding shares.
NOTE D. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001 par value. Of the 8,632,861 shares outstanding at October 31, 2005, CSAM
owned 14,333 shares.
NOTE E. INVESTMENT IN SECURITIES
For the fiscal year ended October 31, 2005 purchases and sales of securities,
other than short-term investments, were $80,896,172 and $78,438,364,
respectively.
NOTE F. CREDIT FACILITY
The Fund, together with other funds/portfolios advised by CSAM (collectively,
the "Participating Funds"), participates in a $75 million committed, unsecured,
line of credit facility ("Credit Facility") with Deutsche Bank, A.G. as
administrative agent and syndication agent and State Street Bank and Trust
Company as operations agent for temporary or emergency purposes. Under the terms
of the Credit Facility, the Participating Funds pay an aggregate commitment fee
at a rate of 0.10% per annum on the average unused amount of the Credit
Facility, which is allocated among the Participating Funds in such manner as is
determined by the governing Boards of the Participating Funds. In addition, the
Participating Funds pay interest on borrowings at the Federal Funds rate plus
0.50%. During the fiscal year ended October 31, 2005, the Fund had no borrowings
under the Credit Facility.
NOTE G. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP. There were no distributions
made during the fiscal years ended October 31, 2004 and October 31, 2005.
The tax basis of components of distributable earnings differ from the amounts
reflected in the statement of Assets and Liabilities by temporary book/tax
differences. These differences are primarily due to losses deferred on wash
sales. At October 31, 2005, the components of distributable earnings on a tax
basis, for the Fund were as follows:
Undistributed ordinary income --
Accumulated net realized loss $ (73,473,570)
Unrealized appreciation 17,291,211
--------------
Total accumulated deficit $ (56,182,359)
==============
At October 31, 2005, the Fund had a capital loss carryforward for U.S. federal
income tax purposes of $73,473,570. This amount is subject to Internal Revenue
Code limitations. Capital loss carryforwards of $3,170,439, $47,300,891,
$17,356,479 and $5,645,761 expire in 2007, 2009, 2010 and 2011, respectively. It
is uncertain whether the Fund will be able to realize the benefits before they
expire. During the fiscal year ended October 31, 2005, the Fund utilized capital
loss carryforwards of $15,249,246.
At October 31, 2005, the identified cost for federal income tax purposes, as
well as the gross unrealized appreciation from investments for those securities
having an excess of value over cost, gross unrealized depreciation from
investments for those securities having an excess of cost over value and the net
unrealized depreciation from investments were $100,530,569, $24,074,581,
$(6,792,222) and $17,282,359, respectively.
At October 31, 2005, the Fund reclassified $176,107 from accumulated net
realized loss on investments and foreign currency related transactions to
accumulated net investment income and $31,995 from accumulated net investment
loss to paid-in capital, to adjust for current period permanent book/tax
differences. Net assets were not affected by these reclassifications.
20
NOTE H. RESTRICTED SECURITIES
Certain of the Fund's investments are restricted as to resale and are valued at
fair value as determined in good faith by, or under the direction of, the Board
of Directors under procedures established by the Board of Directors in the
absence of readily ascertainable market values.
NUMBER FAIR PERCENT
OF ACQUISITION VALUE AT VALUE PER OF NET DISTRIBUTIONS OPEN
SECURITY UNITS/SHARES DATE(S) COST 10/31/05 UNIT/SHARE ASSETS RECEIVED COMMITMENTS
-------- ------------ ------------------- ----------- ---------- ---------- -------- ------------- -----------
BPW Israel Ventures
LLC 1,482,848 10/05/00 - 07/01/04 $ 1,073,879 $ 804,178 $ 0.54 0.73
17,250 01/03/05 17,250 9,355 0.54 0.01
17,250 06/29/05 17,250 9,355 0.54 0.01
34,764 08/02/05 34,764 18,853 0.54 0.02
25,181 09/21/05 25,181 13,656 0.54 0.01
------------ ----------- ---------- -------- ------------- -----------
1,577,293 1,168,324 855,397 0.78 $ -- $ 722,707
------------ ----------- ---------- -------- ------------- -----------
Concord Ventures II
Fund L.P. 3,520,000 03/29/00 - 08/19/04 2,375,107 1,285,100 0.37 1.17
120,000 03/04/05 120,000 43,810 0.37 0.04
120,000 07/11/05 120,000 43,810 0.37 0.04
------------ ----------- ---------- -------- ------------- -----------
3,760,000 2,615,107 1,372,720 1.25 151,554 240,000
------------ ----------- ---------- -------- ------------- -----------
Emerging Markets
Ventures I, L.P. 7,145,806 01/22/98 - 07/06/04 4,946,932 5,400,400 0.76 4.92
35,255 01/10/05 34,975 26,644 0.76 0.02
34,068 06/30/05 33,798 25,746 0.76 0.02
------------ ----------- ---------- -------- ------------- -----------
7,215,129 5,015,705 5,452,790 4.96 1,169,680 884,872
------------ ----------- ---------- -------- ------------- -----------
Exxel Capital
Partners V, L.P. 1,897,761 05/11/98 - 12/03/98 380,019 0 0.00 0.00 205,185 --
------------ ----------- ---------- -------- ------------- -----------
Formula Ventures L.P. 1,499,989 08/06/99 - 06/14/04 464,935 121,649 0.08 0.11 414,249 --
------------ ----------- ---------- -------- ------------- -----------
Giza GE Venture
Fund III, L.P. 2,117,500 01/31/00 - 10/11/04 1,410,854 1,105,018 0.52 1.01
137,500 02/14/05 126,261 71,754 0.52 0.07
220,000 08/10/05 202,018 114,807 0.52 0.10
------------ ----------- ---------- -------- ------------- -----------
2,475,000 1,739,133 1,291,579 1.18 197,516 275,000
------------ ----------- ---------- -------- ------------- -----------
Independent Network
Television Holding
Ltd, Series II 1,000,000 07/06/98 1,000,000 1,000,000 1.00 0.91 -- --
------------ ----------- ---------- -------- ------------- -----------
J.P. Morgan Latin
America Capital
Partners
(Cayman), L.P. 803,879 04/10/00 - 05/28/03 473,551 330,081 0.41 0.30
31,218 08/02/05 19,308 12,818 0.41 0.01
------------ ----------- ---------- -------- ------------- -----------
835,097 492,859 342,899 0.31 708,606 --
------------ ----------- ---------- -------- ------------- -----------
21
NUMBER FAIR PERCENT
OF ACQUISITION VALUE AT VALUE PER OF NET DISTRIBUTIONS OPEN
SECURITY UNITS/SHARES DATE(S) COST 10/31/05 UNIT/SHARE ASSETS RECEIVED COMMITMENTS
-------- ------------ ------------------- ----------- ---------- ---------- -------- ------------- -----------
J.P. Morgan Latin
America Capital
Partners
(Delaware), L.P. 1,277,217 04/10/00 - 03/26/04 $ 605,097 $ 608,632 $ 0.48 0.55
61,783 08/02/05 62,198 29,441 0.48 0.03
------------ ----------- ---------- -------- ------------- -----------
1,339,000 667,295 638,073 0.58 $ 632,299 $ 1,389,683
------------ ----------- ---------- -------- ------------- -----------
K.T. Concord Venture
Fund L.P. 2,000,000 12/08/97 - 09/29/00 1,647,425 1,026,688 0.51 0.94 659,477 --
------------ ----------- ---------- -------- ------------- -----------
Neurone Ventures II,
L.P. 438,684 11/24/00 - 09/24/04 208,692 182,771 0.42 0.16
45,000 03/24/05 38,275 18,749 0.42 0.02
22,500 07/28/05 19,137 9,374 0.42 0.01
30,000 08/15/05 25,517 12,499 0.42 0.01
------------ ----------- ---------- -------- ------------- -----------
536,184 291,621 223,393 0.20 39,421 225,000
------------ ----------- ---------- -------- ------------- -----------
SVE Star Ventures
Enterprises
GmbH & Co.
No. IX KG 1,250,000 12/21/00 - 08/09/04 971,963 769,812 0.62 0.70
250,000 03/30/05 243,284 153,963 0.62 0.14
------------ ----------- ---------- -------- ------------- -----------
1,500,000 1,215,247 923,775 0.84 -- 500,000
------------ ----------- ---------- -------- ------------- -----------
Technology
Crossover
Ventures IV, L.P. 1,563,800 03/08/00 - 06/30/04 713,990 1,007,553 0.64 0.91
79,800 01/13/05 75,052 51,415 0.64 0.05
20,000 07/21/05 19,097 12,886 0.64 0.01
45,200 10/24/05 45,200 29,122 0.64 0.03
------------ ----------- ---------- -------- ------------- -----------
1,708,800 853,339 1,100,976 1.00 760,027 291,200
------------ ----------- ---------- -------- ------------- -----------
Telesoft Partners L.P. 1,250,000 07/22/97 - 06/07/01 503,902 0 0.00 0.00 7,203,101 --
------------ ----------- ---------- -------- ------------- -----------
Telesoft Partners II QP,
L.P. 1,500,000 07/14/00 - 06/03/04 928,447 1,226,880 0.82 1.12
240,000 12/09/04 225,631 196,301 0.82 0.18
------------ ----------- ---------- -------- ------------- -----------
1,740,000 1,154,078 1,423,181 1.30 113,986 660,000
------------ ----------- ---------- -------- ------------- -----------
The Renaissance
Fund LDC 160 03/30/94 - 03/21/97 483,692 87,125 544.53 0.08 1,497,612 --
------------ ----------- ---------- -------- ------------- -----------
TVG Asian
Communications
Fund II, L.P. 3,008,374 06/07/00 - 12/31/03 2,110,403 2,005,196 0.67 1.83
178,730 12/23/04 152,181 119,130 0.67 0.11
102,029 07/06/05 96,416 68,006 0.67 0.06
332,985 10/27/05 332,985 221,947 0.67 0.20
------------ ----------- ---------- -------- ------------- -----------
3,622,118 2,691,985 2,414,279 2.20 837,379 377,882
------------ ----------- ---------- -------- ------------- -----------
22
NUMBER FAIR PERCENT
OF ACQUISITION VALUE AT VALUE PER OF NET DISTRIBUTIONS OPEN
SECURITY UNITS/SHARES DATE(S) COST 10/31/05 UNIT/SHARE ASSETS RECEIVED COMMITMENTS
-------- ------------ ------------------- ------------ ------------ ---------- -------- ------------- -----------
Walden-Israel
Ventures III, L.P. 492,938 02/23/01 - 05/27/04 $ 353,018 $ 399,368 $ 0.81 0.36
75,625 11/10/04 71,889 61,270 0.81 0.06
96,250 03/02/05 91,495 77,980 0.81 0.07
110,000 06/09/05 104,566 89,120 0.81 0.08
------------ ------------ ------------ -------- ------------- -----------
774,813 620,968 627,738 0.57 $ 10,234 $ 600,188
------------ ------------ ------------ -------- ------------- -----------
Total $ 23,005,634 $ 18,902,262 17.21 $ 14,600,326 $ 6,166,532
============ ============ ======== ============= ===========
The Fund may incur certain costs in connection with the disposition of the above
securities.
NOTE I. SHARE REPURCHASE PROGRAM/SELF-TENDER POLICY
SHARE REPURCHASE PROGRAM: The Board of Directors of the Fund, at a meeting held
on November 21, 2003, authorized management to make open market purchases from
time to time in an amount up to 10% of the Fund's outstanding shares whenever
the Fund's shares are trading at a discount to net asset value of 15% or more.
Open market purchases may also be made within the discretion of management if
the discount is less than 15%. The Board has instructed management to report
repurchase activity to it regularly, and to post the number of shares
repurchased on the Fund's website on a monthly basis. For the fiscal year ended
October 31, 2005, the Fund repurchased 47,160 of its shares for a total cost of
$451,752 at a weighted discount of 14.31% from its net asset value. For the
eleven months ended October 31, 2004, the Fund repurchased 484,200 of its shares
for a total cost of $3,835,755 at a weighted discount of 14.39% from its net
asset value. The Board at the same time determined to suspend the Fund's annual
self-tender program that had been announced in June of 2000.
SELF-TENDER POLICY: In January 2005, the Fund adopted a policy to make annual
self-tenders for its shares of common stock. Each annual self-tender will be in
the amount equal to the net proceeds realized by the Fund during the year from
its illiquid private equity investments less any capital commitments that are
funded during that year, commencing with a self-tender in an amount equal to
such net proceeds as are realized by the Fund during 2005. A self-tender will be
made in any year only if the shares to be purchased under this formula would
equal 5% or more of the Fund's then outstanding shares; otherwise, the amounts
that would have been applied will be carried over in calculating the amount to
be applied in the next year. The price per share in the self-tenders will be
fixed at 95% of the net asset value of the Fund's shares at the conclusion of
the tender offer period, which is expected to occur near the end of each
calendar year.
23
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders
of The Emerging Markets Telecommunications Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations, of
changes in net assets and of cash flows and the financial highlights present
fairly, in all material respects, the financial position of The Emerging Markets
Telecommunications Fund, Inc. (the "Fund") at October 31, 2005, the results of
its operations and its cash flows for the year then ended, the changes in its
net assets for the year then ended, the eleven month period ended October 31,
2004, and the year ended November 30, 2003, and the financial highlights for
each of the periods presented, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") 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 the standards of the
Public Company Accounting Oversight Board (United States). Those standards
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 October 31, 2005 by correspondence with the
custodian and private equity issuers, provide a reasonable basis for our
opinion.
As explained in Note B, the financial statements include securities valued at
$19,744,798 (17.98% of net assets), whose fair values have been determined in
good faith under procedures established by the Board of Directors in the absence
of readily ascertainable market values. We have reviewed the procedures
established by the Board of Directors to value such securities and have
inspected underlying documentation, and, in the circumstances, we believe the
procedures are reasonable and the documentation appropriate. However, these
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.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 22, 2005
24
RESULTS OF ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
After the failure to achieve a quorum of shareholders on the original meeting
date of February 4, 2005 and reconvened meetings held on February 25, 2005 and
March 1, 2005, the Board of Directors concluded that a quorum of shareholders
was not likely to be achieved at its 2005 Annual Meeting of Shareholders (the
"Meeting") and therefore the Meeting was not reconvened. At the rescheduled
Meeting held on March 1, 2005, holders of less than 36% of the Fund's shares
were represented in person or by proxy, while a quorum consists of a majority of
the Fund's outstanding shares of common stock.
As a consequence of the lack of a quorum, Martin M. Torino, a nominee for
election at the Meeting, pursuant to Maryland law, will remain as a Class I
director of the Fund until the 2006 annual meeting of shareholders and until his
successor is elected and qualifies. William W. Priest, Jr., the Fund's other
nominee for election at the Meeting, resigned from the Board. The Board also
voted to increase the size of the Board from five to six directors and, upon the
recommendation of its Nominating Committee, approved the election of Messrs.
Walter Eberstadt and Phillip Goldstein (who had nominated himself for election
as a director at the Meeting) to each serve as a director of the Fund until the
2006 annual meeting of shareholders and until his successor is elected and
qualifies. Mr. Eberstadt has been elected as a Class I director and Mr.
Goldstein has been elected as a Class II director. Mr. Eberstadt is a Limited
Managing Partner in Lazard Freres & Co. and has been associated with Lazard
Freres & Co. since 1969. Mr. Goldstein is the investment adviser to Opportunity
Partners L.P., an activist-orientated private investment fund, and other clients
since 1992. Mr. Goldstein has also been a director of Brantley Capital
Corporation since 2002 and of The Mexico Equity and Income Fund since 1999.
25
DESCRIPTION OF INVESTLINK(SM) PROGRAM (UNAUDITED)
The InvestLink(SM) Program is sponsored and administered by Computershare
Shareholder Services, Inc., ("Computershare"), not by The Emerging Markets
Telecommunications Fund, Inc. (the "Fund"). Computershare will act as program
administrator (the "Program Administrator") of the InvestLink(SM) Program (the
"Program"). The purpose of the Program is to provide existing shareholders with
a simple and convenient way to invest additional funds and reinvest dividends in
shares of the Fund's common stock ("Shares") at prevailing prices, with reduced
brokerage commissions and fees.
In order to participate in the Program, you must be a registered holder of at
least one Share of stock of the Fund. Purchases of Shares with funds from a
participant's cash payment or automatic account deduction will begin on the next
day on which funds are invested. All cash payments must be drawn on a U.S. bank
and payable in U.S. dollars. Checks must be made payable to Computershare. If a
participant selects the dividend reinvestment option, automatic investment of
dividends generally will begin with the next dividend payable after the Program
Administrator receives his enrollment form. Once in the Program, a person will
remain a participant until he terminates his participation or sells all Shares
held in his Program account, or his account is terminated by the Program
Administrator. A participant may change his investment options at any time by
requesting a new enrollment form and returning it to the Program Administrator.
A participant will be assessed certain charges in connection with his
participation in the Program. All optional cash deposit investments will be
subject to a service charge. Sales processed through the Program will have a
service fee deducted from the net proceeds, after brokerage commissions. In
addition to the transaction charges outlined above, participants will be
assessed per share processing fees (which include brokerage commissions.)
Participants will not be charged any fee for reinvesting dividends.
The number of Shares to be purchased for a participant depends on the amount of
his dividends, cash payments or bank account or payroll deductions, less
applicable fees and commissions, and the purchase price of the Shares. The
investment date for cash payments is the 25th day of each month (or the next
trading day if the 25th is not a trading day). The investment date for dividend
reinvestment is the dividend payment date. The Program Administrator uses
dividends and funds of participants to purchase Shares of the Fund in the open
market. Such purchases will be made by participating brokers as agent for the
participants using normal cash settlement practices. All Shares purchased
through the Program will be allocated to participants as of the settlement date,
which is usually three business days from the purchase date. In all cases,
transaction processing will occur within 30 days of the receipt of funds, except
where temporary curtailment or suspension of purchases is necessary to comply
with applicable provisions of the Federal Securities laws or when unusual market
conditions make prudent investment impracticable. In the event the Program
Administrator is unable to purchase Shares within 30 days of the receipt of
funds, such funds will be returned to the participants.
The average price of all Shares purchased by the Program Administrator with all
funds received during the time period from two business days preceding any
investment date up to the second business day preceding the next investment date
shall be the price per share allocable to a participant in connection with the
Shares purchased for his account with his funds or dividends received by the
Program Administrator during such time period. The average price of all Shares
sold by the Program Administrator pursuant to sell orders received during such
time period shall be the price per share allocable to a participant in
connection with the Shares sold for his account pursuant to his sell orders
received by the Program Administrator during such time period. All sale requests
having an
26
anticipated market value of $100,000.00 or more are expected to be submitted in
written form. In addition, all sale requests received by the Program
Administrator within thirty (30) days of an address change are expected to be
submitted in written form.
Computershare, as Program Administrator, administers the Program for
participants, keeps records, sends statements of account to participants and
performs other duties relating to the Program. Each participant in the Program
will receive a statement of his account following each purchase of Shares. The
statements will also show the amount of dividends credited to such participant's
account (if applicable), as well as the fees paid by the participant. In
addition, each participant will receive copies of the Fund's annual and
semi-annual reports to shareholders, proxy statements and, if applicable,
dividend income information for tax reporting purposes.
If the Fund is paying dividends on the Shares, a participant will receive
dividends through the Program for all Shares held on the dividend record date on
the basis of full and fractional Shares held in his account, and for all other
Shares of the Fund registered in his name. The Program Administrator will send
checks to the participants for the amounts of their dividends that are not to be
automatically reinvested at no cost to the participants.
Shares of the Fund purchased under the Program will be registered in the name of
the accounts of the respective participants. Unless requested, the Fund will not
issue to participants certificates for Shares of the Fund purchased under the
Program. The Program Administrator will hold the Shares in book-entry form until
a Program participant chooses to withdraw his Shares or terminate his
participation in the Program. The number of Shares purchased for a participant's
account under the Program will be shown on his statement of account. This
feature protects against loss, theft or destruction of stock certificates.
A participant may withdraw all or a portion of the Shares from his Program
account by notifying the Program Administrator. After receipt of a participant's
request, the Program Administrator will issue to such participant certificates
for the whole Shares of the Fund so withdrawn or, if requested by the
participant, sell the Shares for him and send him the proceeds, less applicable
brokerage commissions, fees, and transfer taxes, if any. If a participant
withdraws all full and fractional Shares in his Program account, his
participation in the Program will be terminated by the Program Administrator. In
no case will certificates for fractional Shares be issued. The Program
Administrator will convert any fractional Shares held by a participant at the
time of his withdrawal to cash.
Participation in any rights offering, dividend distribution or stock split will
be based upon both the Shares of the Fund registered in participants' names and
the Shares (including fractional Shares) credited to participants' Program
accounts. Any stock dividend or Shares resulting from stock splits with respect
to Shares of the Fund, both full and fractional, which participants hold in
their Program accounts and with respect to all Shares registered in their names
will be automatically credited to their accounts.
All Shares of the Fund (including any fractional share) credited to his account
under the Program will be voted as the participant directs. The participants
will be sent the proxy materials for the annual meetings of shareholders. When a
participant returns an executed proxy, all of such Shares will be voted as
indicated. A participant may also elect to vote his Shares in person at the
Shareholders' meeting.
27
A participant will receive tax information annually for his personal records and
to help him prepare his U.S. federal income tax return. The automatic
reinvestment of dividends does not relieve him of any income tax which may be
payable on dividends. For further information as to tax consequences of
participation in the Program, participants should consult with their own tax
advisors.
The Program Administrator in administering the Program will not be liable for
any act done in good faith or for any good faith omission to act. However, the
Program Administrator will be liable for loss or damage due to error caused by
its negligence, bad faith or willful misconduct. Shares held in custody by the
Program Administrator are not subject to protection under the Securities
Investors Protection Act of 1970.
The participant should recognize that neither the Fund nor the Program
Administrator can provide any assurance of a profit or protection against loss
on any Shares purchased under the Program. A participant's investment in Shares
held in his Program account is no different than his investment in directly held
Shares in this regard. The participant bears the risk of loss and the benefits
of gain from market price changes with respect to all of his Shares. Neither the
Fund nor the Program Administrator can guarantee that Shares purchased under the
Program will, at any particular time, be worth more or less than their purchase
price. Each participant must make an independent investment decision based on
his own judgment and research.
While the Program Administrator hopes to continue the Program indefinitely, the
Program Administrator reserves the right to suspend or terminate the Program at
any time. It also reserves the right to make modifications to the Program.
Participants will be notified of any such suspension, termination or
modification in accordance with the terms and conditions of the Program. The
Program Administrator also reserves the right to terminate any participant's
participation in the Program at any time. Any question of interpretation arising
under the Program will be determined in good faith by the Program Administrator
and any such good faith determination will be final.
Any interested shareholder may participate in the Program. All other cash
payments or bank account deductions must be at least $100.00, up to a maximum of
$100,000.00 annually. An interested shareholder may join the Program by reading
the Program description, completing and signing the enrollment form and
returning it to the Program Administrator. The enrollment form and information
relating to the Program (including the terms and conditions) may be obtained by
calling the Program Administrator at one of the following telephone numbers:
(800) 730-6001 (U.S. and Canada) or (781) 575-3100 (outside U.S. and Canada).
All correspondence regarding the Program should be directed to: EquiServe Trust
Company N.A., c/o Computershare, InvestLink(SM) Program, P.O. Box 43010,
Providence, RI 02940-3010.
InvestLink is a service mark of Computershare
28
INFORMATION CONCERNING DIRECTORS AND OFFICERS (UNAUDITED)
TERM NUMBER OF
OF OFFICE PORTFOLIOS IN
AND FUND
POSITION(S) LENGTH PRINCIPAL COMPLEX OTHER
NAME, ADDRESS AND HELD WITH OF TIME OCCUPATION(S) DURING OVERSEEN BY DIRECTORSHIPS
DATE OF BIRTH FUND SERVED PAST FIVE YEARS DIRECTOR HELD BY DIRECTOR
------------------------- ----------------- ------------ ------------------------ ----------------- ---------------------------
INDEPENDENT DIRECTORS
Enrique R. Arzac* Director; Since 1996; Professor of Finance and 47 Director of The Adams
c/o Credit Suisse Asset Chairman of the current term Economics, Graduate Express Company (a closed-
Management, LLC Board; Nominating ends at the School of Business, end investment company);
Attn: General Counsel Committee 2007 annual Columbia University Director of Petroleum and
466 Lexington Avenue Chairman and meeting since 1971 Resources Corporation (a
New York, New York Audit Committee closed-end investment
10017-3140 Member company)
Date of Birth: 10/02/41
James J. Cattano Director; Since 1993; President, Primary 4 None
c/o Primary Resources, Nominating current term Resources Inc. (an
Inc. Committee ends at the international trading
55 Old Field Point Road Member and 2007 annual and manufacturing
Greenwich, Connecticut Audit Committee meeting company specializing in
06830 Chairman the sale of agricultural
commodities throughout
Date of Birth: 06/24/43 Latin American markets)
since October 1996
Walter Eberstadt Director; Since 2005 Limited Managing 1 None
Lazard Freres & Co. Nominating Director in Lazard
30 Rockefeller Plaza and Audit Freres & Co. since 1969
New York, NY Committee
10020 Member
Date of Birth: 07/15/21
Phillip Goldstein Director; Since 2005 Investment Adviser, 2 Director, Brantley Capital
Opportunity Partners L.P. Nominating Opportunity Partners Corporation; Director, The
60 Heritage Drive and Audit L.P. since 1992 Mexico Equity and Income
Pleasantville, NY Committee Fund
10570 Member
Date of Birth: 01/28/45
Martin M. Torino Director; Since 1993; Chief Executive Officer 3 None
c/o Credit Suisse Asset Nominating current term and Director of Celsur
Management, LLC and Audit ends at the Logistica S.A.
Attn: General Counsel Committee 2006 annual (Logistics) since 2002;
466 Lexington Avenue Member meeting Chairman of the Board of
New York, New York Ingenio y Refineria San
10017-3140 Martin Del Tabacal S.A.
(sugar refinery) from
Date of Birth: 08/14/49 August 1996 to 2000
----------
* Effective December 6, 2005, Enrique R. Arzac was appointed as Chairman of
the Board. Michael E. Kenneally who previously held this position, resigned
effective December 6, 2005.
29
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
------------------------- ----------------- ------------ ---------------------------------------------------------
OFFICERS
Steven B. Plump** Chief Executive Since 2005 Managing Director; Associated with CSAM or its
Credit Suisse Asset Officer and predecessor since 1995; Officer of other Credit Suisse
Management, LLC President Funds
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 02/08/59
Neil Gregson Chief Investment Since 2005 Managing Director of Credit Suisse Asset Management
c/o Credit Suisse Asset Officer Limited ("CSAML"); Associated with CSAML since 1990
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 05/10/62
Jonathan S. Ong Investment Since 2005 Director of CSAML; Associated with CSAML since 1999
c/o Credit Suisse Asset Officer
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 08/03/67
Michael A. Pignataro Chief Financial Since 1993 Director and Director of Fund Administration of CSAM;
Credit Suisse Asset Officer and Associated with CSAM or its predecessor since 1984;
Management, LLC Secretary Officer of other Credit Suisse Funds
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Since 2004 Director and Global Head of Compliance of CSAM;
Credit Suisse Asset Compliance Associated with CSAM since July 2000; Vice President and
Management, LLC Officer Director of Compliance of Forstmann-Leff Associates from
466 Lexington Avenue 1998 to June 2000; Officer of other Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 09/21/66
----------
** Effective July 31, 2005, Steven B. Plump was appointed as Chief Executive
Officer and President of the Fund. Michael E. Kenneally, who previously held
these positions, resigned effective July 31, 2005.
30
POSITION(S) LENGTH
NAME, ADDRESS AND HELD WITH OF TIME
DATE OF BIRTH FUND SERVED PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
----------------------- ----------------- ------------ ---------------------------------------------------------
OFFICERS--(CONTINUED)
Ajay Mehra Chief Since 2004 Director and General Counsel (Americas) of CSAM since
Credit Suisse Asset Legal Officer September 2004; Senior Associate of Sherman & Sterling
Management, LLC LLP from September 2000 to September 2004; Senior Counsel
466 Lexington Avenue of the SEC Division of Investment Management from June
New York, New York 1997 to September 2000; Officer of other Credit Suisse
10017-3140 Funds
Date of Birth: 08/14/70
J. Kevin Gao Senior Vice Since 2004 Vice President and Associate General Counsel of CSAM;
Credit Suisse Asset President Associated with CSAM since July 2003; Associated with the
Management, LLC law firm of Willkie Farr & Gallagher LLP from 1998 to
466 Lexington Avenue 2003; Officer of other Credit Suisse Funds
New York, New York
10017-3140
Date of Birth: 10/13/67
Robert Rizza Treasurer Since 1999 Assistant Vice President of CSAM; Associated with CSAM
Credit Suisse Asset since 1998; Officer of other Credit Suisse Funds
Management, LLC
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
31
ANNUAL CERTIFICATIONS (UNAUDITED)
The Fund's Chief Executive Officer has filed an annual certification with the
NYSE that, as of the date of the certification, he was unaware of any violation
by the Fund of the NYSE's corporate governance listing standards. The Fund's
Chief Executive Officer and Chief Financial Officer have also filed
certifications with the SEC as part of the Fund's Form N-CSR filings that cover
certain public disclosure documents of the Fund, including its annual and
semi-annual reports to stockholders.
32
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION (UNAUDITED)
Information regarding how The Emerging Markets Telecommunications Fund, Inc.
(the "Fund") voted proxies related to its portfolio securities during the
12-month period ended June 30 of each year, as well as the policies and
procedures that the Fund uses to determine how to vote proxies relating to its
portfolio securities are available:
- By calling 1-800-293-1232;
- On the Fund's website, www.csam.com/us
- On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Fund files a complete schedule of its portfolio holdings for the first and
third quarters of its fiscal year with the SEC on Form N-Q. The Fund's Forms N-Q
are available on the SEC's website at http://www.sec.gov and may be reviewed and
copied at the SEC's Public Reference Room in Washington, DC. Information on the
operation of the SEC's Public Reference Room may be obtained by calling
1-800-SEC-0330.
33
OTHER FUNDS MANAGED BY CREDIT SUISSE ASSET MANAGEMENT, LLC
Credit Suisse Capital Appreciation Fund
Credit Suisse Cash Reserve Fund
Credit Suisse Commodity Return Strategy Fund
Credit Suisse Emerging Markets Fund
Credit Suisse Fixed Income Fund
Credit Suisse Global Fixed Income Fund
Credit Suisse Global Small Cap Fund
Credit Suisse High Income Fund
Credit Suisse International Focus Fund
Credit Suisse Japan Equity Fund
Credit Suisse Large Cap Blend Fund
Credit Suisse Large Cap Value Fund
Credit Suisse Mid-Cap Growth Fund
Credit Suisse New York Municipal Fund
Credit Suisse Short Duration Bond Fund
Credit Suisse Small Cap Growth Fund
Credit Suisse Small Cap Value Fund
Credit Suisse Strategic Allocation Fund
Fund shares are not deposits or other obligations of Credit Suisse Asset
Management, LLC or any affiliate, are not FDIC-insured and are not guaranteed by
Credit Suisse Asset Management, LLC or any affiliate. Fund investments are
subject to investment risks, including loss of your investment. There are
special risk considerations associated with international, global,
emerging-market, small-company, private equity, high-yield debt,
single-industry, single-country and other special, aggressive or concentrated
investment strategies. Past performance cannot guarantee future results.
More complete information about a fund, including charges and expenses, is
provided in the Prospectus, which should be read carefully before investing. You
may obtain copies by calling Credit Suisse Funds at 800-927-2874. For up-to-date
performance, please look in the mutual fund section of your newspaper under
Credit Suisse.
Credit Suisse Asset Management Securities, Inc., Distributor.
34
SUMMARY OF GENERAL INFORMATION (UNAUDITED)
The Emerging Markets Telecommunications Fund, Inc.--is a closed-end,
non-diversified management investment company whose shares trade on the New York
Stock Exchange, Inc. Its investment objective is long-term capital appreciation
through investments primarily in equity securities of telecommunications
companies in emerging countries. Credit Suisse Asset Management, LLC (New York),
the Fund's investment adviser, is part of Credit Suisse Asset Management
("CSAM"), the institutional and mutual-fund asset-management arm of Credit
Suisse First Boston. As of September 30, 2005, CSAM managed over $23 billion in
the U.S. and, together with its global affiliates, managed assets of over $337
billion in 17 countries.
SHAREHOLDER INFORMATION
The market price is published in: THE NEW YORK TIMES (daily) under the
designation "EmMktTel" and THE WALL STREET JOURNAL (daily), and BARRON'S (each
Monday) under the designation "EmergMktTele". The Fund's New York Stock
Exchange, Inc. trading symbol is ETF. Weekly comparative net asset value (NAV)
and market price information about The Emerging Markets Telecommunications Fund,
Inc.'s shares are published each Sunday in THE NEW YORK TIMES and each Monday in
THE WALL STREET JOURNAL and BARRON'S, as well as other newspapers, in a table
called "Closed-End Funds."
THE CSAM GROUP OF FUNDS
LITERATURE REQUEST--Call today for free descriptive information on the
closed-end funds listed below at 1-800-293-1232 or visit our website on the
Internet: http://www.csam.com/us.
CLOSED-END FUNDS
SINGLE COUNTRY
The Chile Fund, Inc. (CH)
The First Israel Fund, Inc. (ISL)
The Indonesia Fund, Inc. (IF)
MULTIPLE COUNTRY
The Latin America Equity Fund, Inc. (LAQ)
FIXED INCOME
Credit Suisse Asset Management Income Fund, Inc. (CIK)
Credit Suisse High Yield Bond Fund (DHY)
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that The Emerging Markets Telecommunications
Fund, Inc. may from time to time purchase shares of its capital stock in the
open market.
This page left intentionally blank.
DIRECTORS AND CORPORATE OFFICERS
Enrique R. Arzac Chairman of the Board
James J. Cattano Director
Walter Eberstadt Director
Phillip Goldstein Director
Martin M. Torino Director
Steven B. Plump Chief Executive Officer and President
Neil Gregson Chief Investment Officer
Jonathan S. Ong Investment Officer
J. Kevin Gao Senior Vice President
Ajay Mehra Chief Legal Officer
Emidio Morizio Chief Compliance Officer
Michael A. Pignataro Chief Financial Officer and Secretary
Robert Rizza Treasurer
INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, NY 10017
INVESTMENT SUB-ADVISERS
Credit Suisse Asset Management Limited
Level 32, Gateway Building
1 Macquarie Place
Sydney NSW 2000
Credit Suisse Asset Management Limited
Beaufort House
15 St. Botolph Street
London EC3A 7JJ, England
ADMINISTRATOR
Bear Stearns Funds Management Inc.
383 Madison Avenue
New York, NY 10179
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
SHAREHOLDER SERVICING AGENT
EquiServe Trust Company, N.A.
c/o Computershare
P.O. Box 43010
Providence, RI 02940
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Two Commerce Square
Philadelphia, PA 19103
LEGAL COUNSEL
Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, NY 10019
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. It is not a prospectus, circular
or representation intended for use in the purchase or sale of shares of the Fund
or of any securities mentioned in this report.
[ETF LISTED NYSE(R) LOGO]
ETF-AR-1005
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics applicable to its Chief Executive
Officer, President, Chief Financial Officer and Chief Accounting Officer, or
persons performing similar functions. A copy of the code is filed as Exhibit
12(a)(1) to this Form. There were no amendments to the code during the fiscal
year ended October 31, 2005. There were no waivers or implicit waivers from the
code granted by the registrant during the fiscal year ended October 31, 2005.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's governing board has determined that it has two audit committee
financial experts serving on its audit committee: Enrique R. Arzac and Steven N.
Rappaport. Each audit committee financial expert is "independent" for purposes
of this item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) through (d). The information in the table below is provided for services
rendered to the registrant by its independent registered public accounting firm,
PricewaterhouseCoopers LLP ("PwC"), for its fiscal years ended October 31, 2004
and October 31, 2005.
2004 2005
-------------------------------------------------------------------------------
Audit Fees $ 51,000 $ 49,350
Audit-Related Fees(1) $ 4,500 $ 3,150
Tax Fees(2) $ 7,482 $ 7,860
All Other Fees -- --
Total $ 62,982 $ 60,360
(1) Services include agreed-upon procedures in connection with the
registrant's semi-annual financial statements ($3,000 in 2004 and $3,150
in 2005), the registrant's third quarter 2004 Form N-Q filing ($1,500) in
2004.
(2) Tax services in connection with the registrant's excise tax calculations
and review of the registrant's applicable tax returns.
The information in the table below is provided with respect to non-audit
services that directly relate to the registrant's operations and financial
reporting and that were rendered by PwC to the registrant's investment adviser,
Credit Suisse Asset Management, LLC ("CSAM"), and any service provider to the
registrant controlling, controlled by or under common control with CSAM that
provided ongoing services to the registrant ("Covered Services Provider"), for
the registrant's fiscal years ended October 31, 2004 and October 31, 2005.
2004 2005
-------------------------------------------------------------------------------
Audit-Related Fees N/A N/A
2
Tax Fees N/A N/A
All Other Fees N/A $ 2,444,000
Total N/A $ 2,444,000
(e)(1) Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and permissible
non-audit services to be provided by the independent registered public
accounting firm to the registrant and (ii) all permissible non-audit services to
be provided by the independent registered public accounting firm to CSAM and any
Covered Services Provider if the engagement relates directly to the operations
and financial reporting of the registrant. The Committee may delegate its
responsibility to pre-approve any such audit and permissible non-audit services
to the Chairperson of the Committee, and the Chairperson shall report to the
Committee, at its next regularly scheduled meeting after the Chairperson's
pre-approval of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for pre-approval of such
services in accordance with applicable laws, including the delegation of some or
all of the Committee's pre-approval responsibilities to other persons (other
than CSAM or the registrant's officers). Pre-approval by the Committee of any
permissible non-audit services shall not be required so long as: (i) the
aggregate amount of all such permissible non-audit services provided to the
registrant, CSAM and any Covered Services Provider constitutes not more than 5%
of the total amount of revenues paid by the registrant to its independent
registered public accounting firm during the fiscal year in which the
permissible non-audit services are provided; (ii) the permissible non-audit
services were not recognized by the registrant at the time of the engagement to
be non-audit services; and (iii) such services are promptly brought to the
attention of the Committee and approved by the Committee (or its delegate(s))
prior to the completion of the audit.
(e)(2) The information in the table below sets forth the percentages of fees for
services (other than audit, review or attest services) rendered by PwC to the
registrant for which the pre-approval requirement was waived pursuant to Rule
2-01(c)(7)(i)(C) of Regulation S-X:
2004 2005
-------------------------------------------------------------------------------
Audit-Related Fees N/A N/A
Tax Fees N/A N/A
All Other Fees N/A N/A
Total N/A N/A
3
The information in the table below sets forth the percentages of fees for
services (other than audit, review or attest services) rendered by PwC to CSAM
and any Covered Services Provider required to be approved pursuant to Rule
2-01(c)(7)(ii)of Regulation S-X, for the registrant's fiscal years ended October
31, 2004 and October 31, 2005:
2004 2005
-------------------------------------------------------------------------------
Audit-Related Fees N/A N/A
Tax Fees N/A N/A
All Other Fees N/A N/A
Total N/A N/A
(f) Not Applicable.
(g) The aggregate fees billed by PwC for non-audit services rendered to the
registrant, CSAM and Covered Service Providers for the fiscal years ended
October 31, 2004 and October 31, 2005 were $11,982 and $11,010, respectively.
(h) Not Applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended. The members of the committee are Enrique R. Arzac, James Cattano,
Walter Eberstadt, Phillip Goldstein, Steven N. Rappaport and Martin Torino.
ITEM 6. SCHEDULE OF INVESTMENTS.
Included as part of the report to shareholders filed under Item 1 of this Form.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
4
CREDIT SUISSE ASSET MANAGEMENT, LLC
CREDIT SUISSE FUNDS
CREDIT SUISSE INSTITUTIONAL FUNDS
CSAM CLOSED-END FUNDS
PROXY VOTING POLICY AND PROCEDURES
Introduction
Credit Suisse Asset Management, LLC ("CSAM") is a fiduciary that owes each
of its clients duties of care and loyalty with respect to proxy voting. The
duty of care requires CSAM to monitor corporate events and to vote proxies.
To satisfy its duty of loyalty, CSAM must cast proxy votes in the best
interests of each of its clients.
The Credit Suisse Funds, Credit Suisse Institutional Funds, and CSAM
Closed-End Funds (the "Funds"), which have engaged Credit Suisse Asset
Management, LLC as their investment adviser, are of the belief that the
proxy voting process is a means of addressing corporate governance issues
and encouraging corporate actions both of which can enhance shareholder
value.
Policy
The Proxy Voting Policy (the "Policy") set forth below is designed to
ensure that proxies are voted in the best interests of CSAM's clients. The
Policy addresses particular issues and gives a general indication of how
CSAM will vote proxies. The Policy is not exhaustive and does not include
all potential issues.
Proxy Voting Committee
The Proxy Voting Committee will consist of a member of the Portfolio
Management Department, a member of the Legal and Compliance Department, and
a member of the Operations Department (or their designees). The purpose of
the Proxy Voting Committee is to administer the voting of all clients'
proxies in accordance with the Policy. The Proxy Voting Committee will
review the Policy annually to ensure that it is designed to promote the
best interests of CSAM's clients.
For the reasons disclosed below under "Conflicts," the Proxy Voting
Committee has engaged the services of an independent third party
(initially, Institutional Shareholder Services ("ISS")) to assist in issue
analysis and vote recommendation for proxy proposals. Proxy proposals
addressed by the Policy will be voted in accordance with the Policy. Proxy
proposals addressed by the Policy that require a case-by-case analysis will
be voted in accordance with the vote
5
recommendation of ISS. Proxy proposals not addressed by the Policy will
also be voted in accordance with the vote recommendation of ISS. To the
extent that the Proxy Voting Committee proposes to deviate from the Policy
or the ISS vote recommendation, the Committee shall obtain client consent
as described below.
CSAM investment professionals may submit a written recommendation to the
Proxy Voting Committee to vote in a manner inconsistent with the Policy
and/or the recommendation of ISS. Such recommendation will set forth its
basis and rationale. In addition, the investment professional must confirm
in writing that he/she is not aware of any conflicts of interest concerning
the proxy matter or provide a full and complete description of the
conflict.
Conflicts
CSAM is the institutional and mutual fund asset management arm of Credit
Suisse First Boston, which is part of Credit Suisse Group, one of the
world's largest financial organizations. As part of a global, full service
investment-bank, broker-dealer, and asset-management organization, CSAM and
its affiliates and personnel may have multiple advisory, transactional,
financial, and other interests in securities, instruments, and companies
that may be purchased or sold by CSAM for its clients' accounts. The
interests of CSAM and/or its affiliates and personnel may conflict with the
interests of CSAM's clients in connection with any proxy issue. In
addition, CSAM may not be able to identify all of the conflicts of interest
relating to any proxy matter.
Consent
In each and every instance in which the Proxy Voting Committee favors
voting in a manner that is inconsistent with the Policy or the vote
recommendation of ISS (including proxy proposals addressed and not
addressed by the Policy), it shall disclose to the client conflicts of
interest information and obtain client consent to vote. Where the client is
a Fund, disclosure shall be made to any one director who is not an
"interested person," as that term is defined under the Investment Company
Act of 1940, as amended, of the Fund.
Recordkeeping
CSAM is required to maintain in an easily accessible place for five years all
records relating to proxy voting.
These records include the following:
- a copy of the Policy;
- a copy of each proxy statement received on behalf of CSAM clients;
6
- a record of each vote cast on behalf of CSAM clients;
- a copy of all documents created by CSAM personnel that were material
to making a decision on a vote or that memorializes the basis for the
decision; and
- a copy of each written request by a client for information on how CSAM
voted proxies, as well as a copy of any written response.
CSAM reserves the right to maintain certain required proxy records with ISS
in accordance with all applicable regulations.
Disclosure
CSAM will describe the Policy to each client. Upon request, CSAM will
provide any client with a copy of the Policy. CSAM will also disclose to
its clients how they can obtain information on their proxy votes.
ISS will capture data necessary for Funds to file Form N-PX on an annual
basis concerning their proxy voting record in accordance with applicable
law.
Procedures
The Proxy Voting Committee will administer the voting of all client
proxies. CSAM has engaged ISS as an independent third party proxy voting
service to assist in the voting of client proxies. ISS will coordinate with
each client's custodian to ensure that proxy materials reviewed by the
custodians are processed in a timely fashion. ISS will provide CSAM with an
analysis of proxy issues and a vote recommendation for proxy proposals. ISS
will refer proxies to the Proxy Voting Committee for instructions when the
application of the Policy is not clear. The Proxy Voting Committee will
notify ISS of any changes to the Policy or deviating thereof.
PROXY VOTING POLICY
Operational Items
Adjourn Meeting
Proposals to provide management with the authority to adjourn an
annual or special meeting will be determined on a case-by-case basis.
Amend Quorum Requirements
Proposals to reduce quorum requirements for shareholder meetings below
a majority of the shares outstanding will be determined on a
case-by-case basis.
7
Amend Minor Bylaws
Generally vote for bylaw or charter changes that are of a housekeeping
nature.
Change Date, Time, or Location of Annual Meeting
Generally vote for management proposals to change the
date/time/location of the annual meeting unless the proposed change is
unreasonable. Generally vote against shareholder proposals to change
the date/time/location of the annual meeting unless the current
scheduling or location is unreasonable.
Ratify Auditors
Generally vote for proposals to ratify auditors unless: (1) an auditor
has a financial interest in or association with the company, and is
therefore not independent; (2) fees for non-audit services are
excessive, or (3) there is reason to believe that the independent
auditor has rendered an opinion, which is neither accurate nor
indicative of the company's financial position. Generally vote on a
case-by-case basis on shareholder proposals asking companies to
prohibit their auditors from engaging in non-audit services (or
capping the level of non-audit services). Generally vote on a
case-by-case basis on auditor rotation proposals taking into
consideration: (1) tenure of audit firm; (2) establishment and
disclosure of a renewal process whereby the auditor is regularly
evaluated for both audit quality and competitive price; (3) length of
the rotation period advocated in the proposal, and (4) significant
audit related issues.
Board of Directors
Voting on Director Nominees in Uncontested Elections
Generally votes on director nominees on a case-by-case basis. Votes
may be withheld: (1) from directors who attended less than 75% of the
board and committee meetings without a valid reason for the absences;
(2) implemented or renewed a dead-hand poison pill; (3) ignored a
shareholder proposal that was approved by a majority of the votes cast
for two consecutive years; (4) ignored a shareholder proposal approved
by a majority of the shares outstanding; (5) have failed to act on
takeover offers where the majority of the shareholders have tendered
their shares; (6) are inside directors or affiliated outside directors
and sit on the audit, compensation, or nominating committee; (7) are
inside directors or affiliated outside directors and the full board
serves as the audit, compensation, or nominating committee or the
company does not have one of these committees; or (8) are audit
committee members and the non-audit fees paid to the auditor are
excessive
Cumulative Voting
8
Proposals to eliminate cumulative voting will be determined on a
case-by-case basis. Proposals to restore or provide for cumulative
voting in the absence of sufficient good governance provisions and/or
poor relative shareholder returns will be determined on a case-by-case
basis.
Director and Officer Indemnification and Liability Protection
Proposals on director and officer indemnification and liability
protection generally evaluated on a case-by-case basis. Generally vote
against proposals that would: (1) eliminate entirely directors' and
officers' liability for monetary damages for violating the duty of
care; or (2) expand coverage beyond just legal expenses to acts, such
as negligence, that are more serious violations of fiduciary
obligation than mere carelessness. Generally vote for only those
proposals providing such expanded coverage in cases when a director's
or officer's legal defense was unsuccessful if: (1) the director was
found to have acted in good faith and in a manner that he reasonably
believed was in the best interests of the company, and (2) only if the
director's legal expenses would be covered.
Filling Vacancies/Removal of Directors
Generally vote against proposals that provide that directors may be
removed only for cause. Generally vote for proposals to restore
shareholder ability to remove directors with or without cause.
Proposals that provide that only continuing directors may elect
replacements to fill board vacancies will be determined on a
case-by-case basis. Generally vote for proposals that permit
shareholders to elect directors to fill board vacancies.
Independent Chairman (Separate Chairman/CEO)
Generally vote for shareholder proposals requiring the position of
chairman be filled by an independent director unless there are
compelling reasons to recommend against the proposal, including: (1)
designated lead director, elected by and from the independent board
members with clearly delineated duties; (2) 2/3 independent board; (3)
all independent key committees; or (4) established governance
guidelines.
Majority of Independent Directors
Generally vote for shareholder proposals requiring that the board
consist of a majority or substantial majority (two-thirds) of
independent directors unless the board composition already meets the
adequate threshold. Generally vote for shareholder proposals requiring
the board audit, compensation, and/or nominating committees be
composed exclusively of independent directors if they currently do not
meet that standard. Generally withhold votes from insiders and
affiliated outsiders sitting on the audit, compensation, or nominating
committees. Generally withhold votes from insiders and affiliated
outsiders on boards that are
9
lacking any of these three panels. Generally withhold votes from
insiders and affiliated outsiders on boards that are not at least
majority independent.
Term Limits
Generally vote against shareholder proposals to limit the tenure of
outside directors.
Proxy Contests
Voting on Director Nominees in Contested Elections
Votes in a contested election of directors should be decided on a
case-by-case basis, with shareholders determining which directors are
best suited to add value for shareholders. The major decision factors
are: (1) company performance relative to its peers; (2) strategy of
the incumbents versus the dissidents; (3) independence of
directors/nominees; (4) experience and skills of board candidates; (5)
governance profile of the company; (6) evidence of management
entrenchment; (7) responsiveness to shareholders; or (8) whether
takeover offer has been rebuffed.
Amend Bylaws without Shareholder Consent
Proposals giving the board exclusive authority to amend the bylaws
will be determined on a case-by-case basis. Proposals giving the board
the ability to amend the bylaws in addition to shareholders will be
determined on a case-by-case basis.
Confidential Voting
Generally vote for shareholder proposals requesting that corporations
adopt confidential voting, use independent vote tabulators and use
independent inspectors of election, as long as the proposal includes a
provision for proxy contests as follows: In the case of a contested
election, management should be permitted to request that the dissident
group honor its confidential voting policy. If the dissidents agree,
the policy may remain in place. If the dissidents will not agree, the
confidential voting policy may be waived. Generally vote for
management proposals to adopt confidential voting.
Cumulative Voting
Proposals to eliminate cumulative voting will be determined on a
case-by-case basis. Proposals to restore or provide for cumulative
voting in the absence of sufficient good governance provisions and/or
poor relative shareholder returns will be determined on a case-by-case
basis.
10
Antitakeover Defenses and Voting Related Issues
Advance Notice Requirements for Shareholder Proposals/Nominations
Votes on advance notice proposals are determined on a case-by-case
basis.
Amend Bylaws without Shareholder Consent
Proposals giving the board exclusive authority to amend the bylaws
will be determined on a case-by-case basis. Generally vote for
proposals giving the board the ability to amend the bylaws in addition
to shareholders.
Poison Pills (Shareholder Rights Plans)
Generally vote for shareholder proposals requesting that the company
submit its poison pill to a shareholder vote or redeem it. Votes
regarding management proposals to ratify a poison pill should be
determined on a case-by-case basis. Plans should embody the following
attributes: (1) 20% or higher flip-in or flip-over; (2) two to three
year sunset provision; (3) no dead-hand or no-hand features; or (4)
shareholder redemption feature
Shareholders' Ability to Act by Written Consent
Generally vote against proposals to restrict or prohibit shareholders'
ability to take action by written consent. Generally vote for
proposals to allow or make easier shareholder action by written
consent.
Shareholders' Ability to Call Special Meetings
Proposals to restrict or prohibit shareholders' ability to call
special meetings or that remove restrictions on the right of
shareholders to act independently of management will be determined on
a case-by-case basis.
Supermajority Vote Requirements
Proposals to require a supermajority shareholder vote will be
determined on a case-by-case basis Proposals to lower supermajority
vote requirements will be determined on a case-by-case basis.
Merger and Corporate Restructuring
Appraisal Rights
Generally vote for proposals to restore, or provide shareholders with,
rights of appraisal.
11
Asset Purchases
Generally vote case-by-case on asset purchase proposals, taking into
account: (1) purchase price, including earnout and contingent
payments; (2) fairness opinion; (3) financial and strategic benefits;
(4) how the deal was negotiated; (5) conflicts of interest; (6) other
alternatives for the business; or (7) noncompletion risk (company's
going concern prospects, possible bankruptcy).
Asset Sales
Votes on asset sales should be determined on a case-by-case basis
after considering: (1) impact on the balance sheet/working capital;
(2) potential elimination of diseconomies; (3) anticipated financial
and operating benefits; (4) anticipated use of funds; (5) value
received for the asset; fairness opinion (if any); (6) how the deal
was negotiated; or (6) Conflicts of interest
Conversion of Securities
Votes on proposals regarding conversion of securities are determined
on a case-by-case basis. When evaluating these proposals, should
review (1) dilution to existing shareholders' position; (2) conversion
price relative to market value; (3) financial issues: company's
financial situation and degree of need for capital; effect of the
transaction on the company's cost of capital; (4) control issues:
change in management; change in control; standstill provisions and
voting agreements; guaranteed contractual board and committee seats
for investor; veto power over certain corporate actions; (5)
termination penalties; (6) conflict of interest: arm's length
transactions, managerial incentives. Generally vote for the conversion
if it is expected that the company will be subject to onerous
penalties or will be forced to file for bankruptcy if the transaction
is not approved.
Corporate Reorganization
Votes on proposals to increase common and/or preferred shares and to
issue shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues;
(4) management's efforts to pursue other alternatives; (5) control
issues; (6) conflict of interest. Generally vote for the debt
restructuring if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Reverse Leveraged Buyouts
Votes on proposals to increase common and/or preferred shares and to
issue shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues;
(4) management's efforts to pursue other alternatives; (5) control
issues; (6) conflict of interest. Generally vote
12
for the debt restructuring if it is expected that the company will
file for bankruptcy if the transaction is not approved.
Formation of Holding Company
Votes on proposals regarding the formation of a holding company should
be determined on a case-by-case basis taking into consideration: (1)
the reasons for the change; (2) any financial or tax benefits; (3)
regulatory benefits; (4) increases in capital structure; (5) changes
to the articles of incorporation or bylaws of the company. Absent
compelling financial reasons to recommend the transaction, generally
vote against the formation of a holding company if the transaction
would include either of the following: (1) increases in common or
preferred stock in excess of the allowable maximum as calculated a
model capital structure; (2) adverse changes in shareholder rights;
(3) going private transactions; (4) votes going private transactions
on a case-by-case basis, taking into account: (a) offer price/premium;
(b) fairness opinion; (c) how the deal was negotiated; (d) conflicts
of interest; (e) other alternatives/offers considered; (f)
noncompletion risk.
Joint Ventures
Vote on a case-by-case basis on proposals to form joint ventures,
taking into account: (1) percentage of assets/business contributed;
(2) percentage ownership; (3) financial and strategic benefits; (4)
governance structure; (5) conflicts of interest; (6) other
alternatives; (7) noncompletion risk; (8) liquidations. Votes on
liquidations should be determined on a case-by-case basis after
reviewing: (1) management's efforts to pursue other alternatives such
as mergers; (2) appraisal value of the assets (including any fairness
opinions); (3) compensation plan for executives managing the
liquidation. Generally vote for the liquidation if the company will
file for bankruptcy if the proposal is not approved.
Mergers and Acquisitions
Votes on mergers and acquisitions should be considered on a
case-by-case basis, determining whether the transaction enhances
shareholder value by giving consideration to: (1) prospects of the
combined companies; (2) anticipated financial and operating benefits;
(3) offer price; (4) fairness opinion; (5) how the deal was
negotiated; (6) changes in corporate governance and their impact on
shareholder rights; (7) change in the capital structure; (8) conflicts
of interest.
Private Placements
Votes on proposals regarding private placements should be determined
on a case-by-case basis. When evaluating these proposals, should
review: (1) dilution to existing shareholders' position; (2) terms of
the offer; (3) financial issues; (4) management's efforts to pursue
alternatives such as mergers; (5) control issues; (6) conflict of
interest. Generally vote for the
13
private placement if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Prepackaged Bankruptcy Plans
Votes on proposals to increase common and/or preferred shares and to
issue shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues;
(4) management's efforts to pursue other alternatives; (5) control
issues; (6) conflict of interest. Generally vote for the debt
restructuring if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Recapitalization
Votes case-by-case on recapitalizations (reclassifications of
securities), taking into account: (1) more simplified capital
structure; (2) enhanced liquidity; (3) fairness of conversion terms,
including fairness opinion; (4) impact on voting power and dividends;
(5) reasons for the reclassification; (6) conflicts of interest; (7)
other alternatives considered.
Reverse Stock Splits
Generally vote for management proposals to implement a reverse stock
split when the number of authorized shares will be proportionately
reduced. Generally vote for management proposals to implement a
reverse stock split to avoid delisting. Votes on proposals to
implement a reverse stock split that do not proportionately reduce the
number of shares authorized for issue should be determined on a
case-by-case basis.
Spinoffs
Votes on spinoffs should be considered on a case-by-case basis
depending on: (1) tax and regulatory advantages; (2) planned use of
the sale proceeds; (3) valuation of spinoff; fairness opinion; (3)
benefits that the spinoff may have on the parent company including
improved market focus; (4) conflicts of interest; managerial
incentives; (5) any changes in corporate governance and their impact
on shareholder rights; (6) change in the capital structure
Value Maximization Proposals
Vote case-by-case on shareholder proposals seeking to maximize
shareholder value.
Capital Structure
Adjustments to Par Value of Common Stock
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Generally vote for management proposals to reduce the par value of
common stock unless the action is being taken to facilitate an
antitakeover device or some other negative corporate governance
action. Generally vote for management proposals to eliminate par
value.
Common Stock Authorization
Votes on proposals to increase the number of shares of common stock
authorized for issuance are determined on a case-by-case basis.
Generally vote against proposals at companies with dual-class capital
structures to increase the number of authorized shares of the class of
stock that has superior voting rights. Generally vote for proposals to
approve increases beyond the allowable increase when a company's
shares are in danger of being delisted or if a company's ability to
continue to operate as a going concern is uncertain.
Dual-class Stock
Generally vote against proposals to create a new class of common stock
with superior voting rights. Generally vote for proposals to create a
new class of nonvoting or subvoting common stock if: (1) it is
intended for financing purposes with minimal or no dilution to current
shareholders; (2) it is not designed to preserve the voting power of
an insider or significant shareholder.
Issue Stock for Use with Rights Plan
Generally vote against proposals that increase authorized common stock
for the explicit purpose of implementing a shareholder rights plan.
Preemptive Rights
Votes regarding shareholder proposals seeking preemptive rights should
be determined on a case-by-case basis after evaluating: (1) the size
of the company; (2) the shareholder base; (3) the liquidity of the
stock
Preferred Stock
Generally vote against proposals authorizing the creation of new
classes of preferred stock with unspecified voting, conversion,
dividend distribution, and other rights ("blank check" preferred
stock). Generally vote for proposals to create "declawed" blank check
preferred stock (stock that cannot be used as a takeover defense).
Generally vote for proposals to authorize preferred stock in cases
where the company specifies the voting, dividend, conversion, and
other rights of such stock and the terms of the preferred stock appear
reasonable. Generally vote against proposals to increase the number of
blank check preferred stock authorized for issuance when no shares
have been issued or reserved for a specific purpose. Generally vote
case-by-case on proposals to increase the number of blank check
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preferred shares after analyzing the number of preferred shares
available for issue given a company's industry and performance in
terms of shareholder returns.
Recapitalization
Vote case-by-case on recapitalizations (reclassifications of
securities), taking into account: (1) more simplified capital
structure; (2) enhanced liquidity; (3) fairness of conversion terms,
including fairness opinion; (4) impact on voting power and dividends;
(5) reasons for the reclassification; (6) conflicts of interest; (7)
other alternatives considered.
Reverse Stock Splits
Generally vote for management proposals to implement a reverse stock
split when the number of authorized shares will be proportionately
reduced. Generally vote for management proposals to implement a
reverse stock split to avoid delisting. Votes on proposals to
implement a reverse stock split that do not proportionately reduce the
number of shares authorized for issue should be determined on a
case-by-case basis.
Share Repurchase Programs
Generally vote for management proposals to institute open-market share
repurchase plans in which all shareholders may participate on equal
terms.
Stock Distributions: Splits and Dividends
Generally vote for management proposals to increase the common share
authorization for a stock split or share dividend, provided that the
increase in authorized shares would not result in an excessive number
of shares available for issuance.
Tracking Stock
Votes on the creation of tracking stock are determined on a
case-by-case basis, weighing the strategic value of the transaction
against such factors as: (1) adverse governance changes; (2) excessive
increases in authorized capital stock; (3) unfair method of
distribution; (4) diminution of voting rights; (5) adverse conversion
features; (6) negative impact on stock option plans; (7) other
alternatives such as a spinoff.
Executive and Director Compensation
Executive and Director Compensation
Votes on compensation plans for directors are determined on a
case-by-case basis.
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Stock Plans in Lieu of Cash
Votes for plans which provide participants with the option of taking
all or a portion of their cash compensation in the form of stock are
determined on a case-by-case basis. Generally vote for plans which
provide a dollar-for-dollar cash for stock exchange. Votes for plans
which do not provide a dollar-for-dollar cash for stock exchange
should be determined on a case-by-case basis.
Director Retirement Plans
Generally vote against retirement plans for nonemployee directors.
Generally vote for shareholder proposals to eliminate retirement plans
for nonemployee directors.
Management Proposals Seeking Approval to Reprice Options
Votes on management proposals seeking approval to reprice options are
evaluated on a case-by-case basis giving consideration to the
following: (1) historic trading patterns; (2) rationale for the
repricing; (3) value-for-value exchange; (4) option vesting; (5) term
of the option; (6) exercise price; (7) participants; (8) employee
stock purchase plans. Votes on employee stock purchase plans should be
determined on a case-by-case basis. Generally vote for employee stock
purchase plans where: (1) purchase price is at least 85 percent of
fair market value; (2) offering period is 27 months or less, and (3)
potential voting power dilution (VPD) is ten percent or less.
Generally vote against employee stock purchase plans where either: (1)
purchase price is less than 85 percent of fair market value; (2)
Offering period is greater than 27 months, or (3) VPD is greater than
ten percent
Incentive Bonus Plans and Tax Deductibility Proposals
Generally vote for proposals that simply amend shareholder-approved
compensation plans to include administrative features or place a cap
on the annual grants any one participant may receive. Generally vote
for proposals to add performance goals to existing compensation plans.
Votes to amend existing plans to increase shares reserved and to
qualify for favorable tax treatment considered on a case-by-case
basis. Generally vote for cash or cash and stock bonus plans that are
submitted to shareholders for the purpose of exempting compensation
from taxes if no increase in shares is requested.
Employee Stock Ownership Plans (ESOPs)
Generally vote for proposals to implement an ESOP or increase
authorized shares for existing ESOPs, unless the number of shares
allocated to the ESOP is excessive (more than five percent of
outstanding shares.)
401(k) Employee Benefit Plans
17
Generally vote for proposals to implement a 401(k) savings plan for
employees.
Shareholder Proposals Regarding Executive and Director Pay
Generally vote for shareholder proposals seeking additional disclosure
of executive and director pay information, provided the information
requested is relevant to shareholders' needs, would not put the
company at a competitive disadvantage relative to its industry, and is
not unduly burdensome to the company. Generally vote against
shareholder proposals seeking to set absolute levels on compensation
or otherwise dictate the amount or form of compensation. Generally
vote against shareholder proposals requiring director fees be paid in
stock only. Generally vote for shareholder proposals to put option
repricings to a shareholder vote. Vote for shareholders proposals to
exclude pension fund income in the calculation of earnings used in
determining executive bonuses/compensation. Vote on a case-by-case
basis for all other shareholder proposals regarding executive and
director pay, taking into account company performance, pay level
versus peers, pay level versus industry, and long term corporate
outlook.
Performance-Based Option Proposals
Generally vote for shareholder proposals advocating the use of
performance-based equity awards (indexed, premium-priced, and
performance-vested options), unless: (1) the proposal is overly
restrictive; or (2) the company demonstrates that it is using a
substantial portion of performance-based awards for its top
executives.
Stock Option Expensing
Generally vote for shareholder proposals asking the company to expense
stock options unless the company has already publicly committed to
start expensing by a specific date.
Golden and Tin Parachutes
Generally vote for shareholder proposals to require golden and tin
parachutes to be submitted for shareholder ratification, unless the
proposal requires shareholder approval prior to entering into
employment contracts. Vote on a case-by-case basis on proposals to
ratify or cancel golden or tin parachutes.
May 17, 2005
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Form N-CSR disclosure requirement is not yet effective with respect to the
registrant.
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ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
(c) TOTAL NUMBER (d) MAXIMUM
(a) TOTAL OF SHARES NUMBER OF
NUMBER OF (b) AVERAGE PURCHASED AS PART SHARES THAT MAY
SHARES PRICE PAID OF PUBLICLY YET BE PURCHASE
PERIOD PURCHASED PER SHARE ANNOUNCED PLANS UNDER THE PLAN
---------------------------------------------------------------------------------------------------------
May 1st through May 31st 0 $ 0.00 0 402,322
June 1st through June 30th 0 $ 0.00 0 402,322
July 1st through July 31st 4,560 $ 10.13 4,560 397,762
August 1st through August 31st 8,400 $ 10.53 8,400 389,362
September 1st through September 30th 4,300 $ 11.02 4,300 385,062
October 1st through October 31st 0 $ 0.00 0 385,062
(a) The plan was announced December 4, 2003.
(b) 10% of the Fund's outstanding shares.
(c) There is no expiration date of the plan.
(d) Not applicable.
(e) Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors since the registrant
last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(g)
of Schedule 14A in its definitive proxy statement dated January 11, 2005.
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of a date within 90 days from the filing date of this report, the
principal executive officer and principal financial officer concluded that the
registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")) were effective based on
their evaluation of the disclosure controls and procedures required by Rule
30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934.
(b) There were no changes in registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the
second fiscal quarter of the period covered by this
19
report that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Registrant's Code of Ethics is an exhibit to this report.
(a)(2) The certifications of the registrant as required by Rule 30a-2(a) under
the Act are exhibits to this report.
(a)(3) Not applicable.
(b) The certifications of the registrant as required by Rule 30a-2(b) under
the Act are an exhibit to this report.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE EMERGING MARKETS TELECOMMUNICATIONS FUND, INC.
/s/ Steven B. Plump
-------------------
Name: Steven B. Plump
Title: Chief Executive Officer
Date: January 9, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934
and the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Steven B. Plump
-------------------
Name: Steven B. Plump
Title: Chief Executive Officer
Date: January 9, 2006
/s/ Michael A. Pignataro
------------------------
Name: Michael A. Pignataro
Title: Chief Financial Officer
Date: January 9, 2006
21