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. 811-5770
-------------------------------------------------
THE CHILE FUND, INC.
------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
466 Lexington Avenue, New York, New York 10017-3140
------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Hal Liebes, Esq.
The Chile Fund, Inc.
466 Lexington Avenue
New York, New York 10017-3147
------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 875-3500
------------------
Date of fiscal year end: December 31, 2003
--------------------------
Date of reporting period: January 1, 2003 to June 30, 2003
----------------------------------------
ITEM 1. REPORTS TO STOCKHOLDERS.
THE CHILE FUND, INC.
SEMI-ANNUAL REPORT
JUNE 30, 2003
[CH LISTED NYSE(R) LOGO]
3911-SA-03
CONTENTS
Letter to Shareholders 1
Portfolio Summary 4
Schedule of Investments 5
Statement of Assets and Liabilities 7
Statement of Operations 8
Statement of Changes in Net Assets 9
Financial Highlights 10
Notes to Financial Statements 12
Privacy Policy Notice 17
LETTER TO SHAREHOLDERS
August 5, 2003
DEAR SHAREHOLDER:
We are writing to report on the activities of The Chile Fund, Inc. (the "Fund")
for the six months ended June 30, 2003.
At June 30, 2003, the Fund's net assets were $107.6 million. The Fund's net
asset value ("NAV") was $10.61 per share, compared to $8.39 on December 31,
2002.
PERFORMANCE
For the six months ended June 30, 2003, the Fund's total return, based on NAV
was 26.46%. By comparison, the Morgan Stanley Capital International Chile Index*
increased 27.75%. Stocks that helped the Fund's performance included its bank,
utilities and telecommunications holdings. On the negative side, relatively
speaking, the Fund's materials and capital goods holdings lagged their
respective benchmark components.
THE MARKET: IMPROVING RAPIDLY
Over the past six months, Chile's economy and equity market materially improved,
and its prospects for future growth appeared to improve as well.
The first quarter was marred to some extent by slow global growth and the
possibility of a backlash from Chile's opposition to the U.S.-led war with Iraq,
which some feared would jeopardize a pending free trade agreement with the
United States. Even so, prices for copper and pulp, the country's primary
exports, rose. Regional tensions from economic and political problems in
neighboring Argentina and Brazil, which had negatively affected Chile's economy
over the past several quarters, also began to wane. By quarter's end, the
performance of Chile's equity market was essentially flat in U.S. dollar terms,
which was quite good considering the negative impact that rising geopolitical
risk had on most equity markets worldwide.
During the second quarter, with the relaxation of global uncertainty and renewed
investor appetite for risk following the end of the U.S.-led conflict with Iraq,
the Chilean equity market performed strongly, as did Latin America markets
generally.
Helping to drive investor interest in Chilean equities was the June signing of a
free trade agreement with the United States. If, as expected, ratification of
this agreement by both countries occurs in this year's second half, Chile will
begin to trade freely with the United States early in 2004.
An export-intensive country, Chile now has free trade agreements with both the
European Union and the United States, two major economic zones that together
represent about two-thirds of its commercial exchange. This should lead to
increasing GDP growth and significantly reduced country risk. Indeed, regarding
the latter, the yield spread between Chile's sovereign bonds and U.S. Treasury
bonds narrowed in the quarter. Also of note, inflation was close to zero,
unemployment declined and foreign accounts appeared under control. Given all
this, investors were generally optimistic that Chile's GDP could expand from its
current 3% or so annual rate.
1
The regional outlook also improved significantly. Argentina's economic woes
diminished further, with the country reporting good GDP growth and improving
trade. Brazil also pleasantly and unexpectedly surprised investors on the upside
by acting in a market-friendly manner. Thus far, it has proven fiscally
responsible by controlling spending, thereby helping to reduce Brazil's
sovereign spread and country risk.
With the ebbing of these two highly destabilizing forces, Chile's economy
improved, growing at an approximate rate of 3% during the second quarter.
Looking ahead to what we feel will be an improving economy, we began to increase
our weightings in the economically sensitive banking and consumption-related
sectors during the first quarter. We slowly increased our exposure to local
companies hit by the recent economic crises in Argentina and Brazil, while
slightly underweighting the telecommunications sector. We also stressed
companies that generate electricity, rather than those that distribute it.
Beyond this, we maintained our investments in wine exporters, whose products
continued to enjoy strong demand in the international marketplace.
During the second quarter, we were overweight those exporters that we felt would
benefit the most from free trade with the U.S. and Europe, with wine producers
again being a favorite industry group.
We intend to remain neutral to pulp producers. Even though we do not think the
price of pulp will increase in the very near term (we think pulp prices may be
near the bottom of a cycle, with potential for improvement in six months
perhaps), we are optimistic that recent capacity increases will likely enable
them to enhance revenues by selling greater quantities more efficiently in the
international marketplace.
On the economic front, lower unemployment, low interest rates, and improved
consumer confidence lead us to believe that domestic consumption might increase
over the near term. In anticipation of this, we have taken overweight positions
in market leading retailers. We are and expect to remain neutral on the banking
sector. Although any increase in consumption and GDP growth will likely
positively affect banks, we think present valuations in this sector are on the
high side.
OUTLOOK: INCREASINGLY OPTIMISTIC
Owing in large measure to the aforementioned free trade agreements, we are
optimistic about the future prospects for Chile's equity market. These
agreements, which should play well in the country's well-organized and stable
economy, could result in above average GDP growth over the next couple of years.
Increasing the attractiveness of Chile's equity market as well was the adoption
late last year of a reform to Chile's financially powerful pension system that,
for the first time, allows participants to choose how they want to invest their
money. Previously they had only one choice, that being a fund with only a 30%
domestic equity component. Now, participants can choose between five funds, with
varying equity components. Fund "A", for example, has an 80% equity allocation,
while with fund "B" it is 50%-60%, with fund "C" it is 30%, and so on down the
line. In practice, many people have elected to go with the equity-heavy funds,
thereby injecting considerable demand and associated liquidity into the
country's equity marketplace.
2
Elsewhere, the price of copper and pulp (Chile's two main export products) are
presently supportive, a reflection of slowly improving global economic
conditions. The price of oil, Chile's main import, has declined since the end of
the Iraq war. As such, Chile's foreign accounts could continue to be favorable,
and we believe that a fairly stable Chilean peso vis-a-vis the U.S. dollar can
prevail over the near term.
In all, it is beginning to appear to us as if the long desired recovery in
Chile's economy and equity marketplace may be just around the corner, awaiting
only the resumption of stronger global economic growth, before kicking into high
gear.
Respectfully,
/s/ Yaroslaw Aranowicz
Yaroslaw Aranowicz
Chief Investment Officer **
INTERNATIONAL INVESTING ENTAILS SPECIAL RISK CONSIDERATIONS, INCLUDING CURRENCY
FLUCTUATIONS, LOWER LIQUIDITY, ECONOMIC AND POLITICAL RISKS, AND DIFFERENCES IN
ACCOUNTING METHODS. THERE ARE ALSO RISKS ASSOCIATED WITH INVESTING IN CHILE,
INCLUDING THE RISK OF INVESTING IN A SINGLE-COUNTRY FUND.
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 Chile Index is an unmanaged index
(with no defined investment objective) of Chilean 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.
** Yaroslaw Aranowicz, who is a Vice President of Credit Suisse Asset
Management, LLC ("CSAM"), is primarily responsible for management of the Fund's
assets. Mr. Aranowicz joined CSAM in 1998 from Trans-National Research
Corporation, a proprietary securities research firm, where he was Director of
Research for Europe and the Middle East. Previously, he was an analyst for Latin
American equities and fixed income at John Hancock Financial Services in New
York. He completed a five-year integrated program in international business
relations from the Central School of Commerce in Warsaw, and holds an M.B.A. in
finance and international business from New York University's Stern School of
Business. Mr. Aranowicz is the Chief Investment Officer of the Fund, The
Emerging Markets Telecommunications Fund, Inc. and The First Israel Fund, Inc.
He is also an Investment Officer of The Brazilian Equity Fund, Inc. and The
Latin America Equity Fund, Inc.
3
THE CHILE FUND, INC.
PORTFOLIO SUMMARY - AS OF JUNE 30, 2003 (UNAUDITED)
[CHART]
SECTOR ALLOCATION
AS A PERCENT OF NET ASSETS
30-JUN-03 31-DEC-02
Banking 9.84% 8.31%
Chemicals-Diversified 4.06% 4.00%
Diversified Operations 19.15% 17.07%
Electric-Integrated 15.53% 11.97%
Food & Beverages 9.95% 10.66%
Infrastructure 3.24% 4.10%
Paper & Related Products 8.57% 9.10%
Retail-Major Department Stores 5.38% 4.90%
Telephone-Integrated 17.02% 17.28%
Water 1.45% 4.55%
Other 5.81% 8.06%
TOP 10 HOLDINGS, BY ISSUER
PERCENT OF
HOLDING SECTOR NET ASSETS
---------------------------------------------------------------------------------------------------------------------
1. Compania de Petroleos de Chile S.A. Diversified Operations 19.2
2. Compania de Telecomunicaciones de Chile S.A. Telephone-Integrated 14.2
3. Empresas CMPC S.A. Paper & Related Products 8.6
4. Empresa Nacional de Electricidad S.A. Electric-Integrated 8.4
5. S.A.C.I. Falabella, S.A. Retail-Major Department Stores 5.4
6. Banco Santander Chile S.A. Banking 4.5
7. Sociedad Quimica y Minera de Chile S.A. Chemicals-Diversified 4.1
8. Enersis S.A. Electric-Integrated 4.0
9. Vina Concha y Toro S.A. Food & Beverages 3.7
10. Embotelladora Andina S.A. Food & Beverages 3.5
4
THE CHILE FUND, INC.
SCHEDULE OF INVESTMENTS - JUNE 30, 2003 (UNAUDITED)
NO. OF
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
EQUITY SECURITIES-100.51%
AIRLINES-0.02%
Lan Chile S.A 10,000 $ 16,075
-------------
BANKING-9.84%
Banco de Chile 96,100,000 3,172,300
Banco Santander Chile S.A. 248,000,000 4,894,151
Corpbanca S.A. + 666,895,656 2,526,881
-------------
10,593,332
-------------
CERAMIC PRODUCTS-0.58%
Ceramicas Cordillera S.A. 67,165 626,584
-------------
CHEMICALS-DIVERSIFIED-4.06%
Sociedad Quimica y Minera de
Chile S.A., Class B 1,543,000 4,373,992
-------------
CONTAINERS-METAL/GLASS-1.82%
Cristalerias de Chile S.A. 230,756 1,960,639
-------------
DIVERSIFIED OPERATIONS-19.15%
Compania de Petroleos de
Chile S.A. 3,934,454 20,611,061
-------------
ELECTRIC-INTEGRATED-15.53%
Colbun S.A. 41,729,049 3,383,242
Empresa Nacional de
Electricidad S.A. + 29,900,000 9,012,270
Enersis S.A. + 49,448,471 4,314,987
-------------
16,710,499
-------------
ENGINEERING & CONSTRUCTION-0.42%
MASISA S.A. 1,700,000 446,502
-------------
FOOD & BEVERAGES-9.95%
Coca-Cola Embonor S.A.,
Class A + 3,168,592 909,535
Compania Cervecerias
Unidas S.A. 538,794 1,751,515
Embotelladora
Andina S.A., PNA 1,586,855 2,049,759
Embotelladora
Andina S.A., PNB 1,311,129 1,693,600
Vina Concha y Toro S.A 4,500,000 $ 4,004,306
Vina San Pedro S.A. 26,745,297 303,248
-------------
10,711,963
-------------
FOOD-RETAIL-1.53%
Distribucion y Servicio
D&S S.A. 1,922,157 1,641,454
-------------
INFRASTRUCTURE-3.24%
Infraestructura 2000 *+ 19,568,922 3,489,687
-------------
MINING-1.61%
Antofagasta plc 170,200 1,730,402
-------------
PAPER & RELATED PRODUCTS-8.57%
Empresas CMPC S.A. 835,000 9,227,844
-------------
PHARMACEUTICALS-0.30%
Farmacias Ahumada S.A. 155,290 323,173
-------------
RETAIL-MAJOR DEPARTMENT STORES-5.38%
S.A.C.I. Falabella, S.A. 5,310,000 5,790,510
-------------
TELEPHONE-INTEGRATED-17.02%
Compania de Telecomunicaciones
de Chile S.A., ADR + 69,600 821,280
Compania de Telecomunicaciones
de Chile S.A., Class A + 4,869,151 14,434,491
Empresa Nacional de
Telecomunicaciones S.A. 594,487 3,067,357
-------------
18,323,128
-------------
TEXTILES-0.04%
Zalaquett S.A. 1,496,767 42,964
-------------
WATER-1.45%
Aguas Andina S.A., Class A 7,750,804 1,557,392
-------------
TOTAL EQUITY SECURITIES
(Cost $80,220,722) 108,177,201
-------------
See accompanying notes to financial statements.
5
NO. OF
DESCRIPTION SHARES VALUE
--------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS-0.76%
CHILEAN MUTUAL FUNDS-0.74%
Bice Dreyfus Manager Fund 91,170 $ 226,767
Security Check Fund 145,505 574,204
-------------
TOTAL CHILEAN MUTUAL FUNDS
(Cost $800,203) 800,971
-------------
PRINCIPAL
DESCRIPTION AMOUNT (000's) VALUE
--------------------------------------------------------------------------------
GRAND CAYMAN-0.02%
Brown Brothers Harriman & Co.,
overnight deposit, 0.36%,
07/01/03** (Cost $18,000) $ 18 $ 18,000
-------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $818,203) 818,971
-------------
TOTAL INVESTMENTS-101.27%
(Cost $81,038,925) (Notes A, D, F) 108,996,172
-------------
LIABILITIES IN EXCESS OF CASH AND
OTHER ASSETS-(1.27)% (1,366,867)
-------------
NET ASSETS-100.00% $ 107,629,305
=============
----------
+ Security is non-income producing.
* Not readily marketable security; security is valued at fair value as
determined in good faith by the Board of Directors. (See Note A.)
** Variable rate account. Rate resets on a daily basis; amounts are available
on the same business day.
ADR American Depositary Receipts.
PNA Preferred Shares, Class A.
PNB Preferred Shares, Class B.
See accompanying notes to financial statements.
6
THE CHILE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - JUNE 30, 2003 (UNAUDITED)
ASSETS
Investments, at value (Cost $81,038,925) (Notes A, D, F) $ 108,996,172
Receivable for investments sold 1,216,182
Prepaid expenses 20,013
-------------
Total Assets 110,232,367
-------------
LIABILITIES
Due to custodian 1,200,114
Payables:
Investments purchased 788,102
Investment advisory fees (Note B) 250,400
Administration fees (Note B) 29,026
Directors' fees 16,641
Other accrued expenses 133,835
Chilean repatriation taxes (Note A) 184,944
-------------
Total Liabilities 2,603,062
-------------
NET ASSETS (applicable to 10,139,926 shares of common stock outstanding) (Note C) $ 107,629,305
=============
NET ASSETS CONSIST OF
Capital stock, $0.001 par value; 10,139,926 shares issued and outstanding
(100,000,000 shares authorized) $ 10,140
Paid-in capital 81,038,027
Undistributed net investment income 1,572,645
Accumulated net realized loss on investments and foreign currency related transactions (2,950,149)
Net unrealized appreciation in value of investments and translation of other
assets and liabilities denominated in foreign currencies 27,958,642
-------------
Net assets applicable to shares outstanding $ 107,629,305
=============
NET ASSET VALUE PER SHARE ($107,629,305 DIVIDED BY 10,139,926) $ 10.61
=============
MARKET PRICE PER SHARE $ 8.70
=============
See accompanying notes to financial statements.
7
THE CHILE FUND, INC.
STATEMENT OF OPERATIONS - FOR THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
INVESTMENT INCOME
Income (Note A):
Dividends $ 1,708,643
Interest 140
Less: Foreign taxes withheld (987)
-------------
Total Investment Income 1,707,796
-------------
Expenses:
Investment advisory fees (Note B) 462,356
Custodian fees 94,219
Administration fees (Note B) 71,714
Legal fees 46,406
Printing (Note B) 37,192
Audit fees 30,998
Accounting fees 18,530
Directors' fees 17,876
NYSE listing fees 16,489
Transfer agent fees 13,771
Insurance 6,395
Miscellaneous 5,259
-------------
Total Expenses 821,205
-------------
Net Investment Income 886,591
-------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY RELATED TRANSACTIONS
Net realized gain from:
Investments 882,056
Foreign currency related transactions 21,667
Net change in unrealized appreciation in value of investments and translation
of other assets and liabilities denominated in foreign currencies 20,757,167
-------------
Net realized and unrealized gain on investments and foreign currency related transactions 21,660,890
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 22,547,481
=============
See accompanying notes to financial statements.
8
THE CHILE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS FOR THE YEAR
ENDED JUNE 30, 2003 ENDED
(UNAUDITED) DECEMBER 31, 2002
------------------- -----------------
INCREASE/(DECREASE) IN NET ASSETS
Operations:
Net investment income $ 886,591 $ 1,220,980
Net realized gain/(loss) on investments and foreign currency related
transactions 903,723 (1,660,080)
Net change in unrealized appreciation in value of investments and translation
of other assets and liabilities denominated in foreign currencies 20,757,167 (17,368,255)
------------- -------------
Net increase/(decrease) in net assets resulting from operations 22,547,481 (17,807,355)
------------- -------------
Dividends to shareholders:
Net investment income -- (912,593)
------------- -------------
Capital share transactions:
Cost of 3,379,976 shares purchased under tender offer (Note G) -- (30,487,384)
------------- -------------
Total increase/(decrease) in net assets 22,547,481 (49,207,332)
------------- -------------
NET ASSETS
Beginning of period 85,081,824 134,289,156
------------- -------------
End of period * $ 107,629,305 $ 85,081,824
============= =============
----------
* Includes undistributed net investment income of $1,572,645 and $686,054,
respectively.
See accompanying notes to financial statements.
9
THE CHILE 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
SIX MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2003 --------------------------------
(UNAUDITED) 2002 2001
------------- ---------- ---------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 8.39 $ 9.93 $ 11.43
--------- --------- ---------
Net investment income/(loss) 0.09 0.09* 0.21
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions 2.13 (1.70) (0.70)
--------- --------- ---------
Net increase/(decrease) in net assets resulting from operations 2.22 (1.61) (0.49)
--------- --------- ---------
Dividends and distributions to shareholders:
Net investment income -- (0.09) (0.15)
Net realized gain on investments and foreign currency
related transactions -- -- (0.86)
In excess of net investment income -- -- --
In excess of net realized gains on investments and
foreign currency related transactions -- -- --
--------- --------- ---------
Total dividends and distributions to shareholders -- (0.09) (1.01)
--------- --------- ---------
Dilution due to capital share rights offering -- -- --
--------- --------- ---------
Anti-dilutive impact due to capital shares tendered or repurchased -- 0.16 --
--------- --------- ---------
Net asset value, end of period $ 10.61 $ 8.39 $ 9.93
========= ========= =========
Market value, end of period $ 8.70 $ 7.25 $ 8.43
========= ========= =========
Total investment return (a) 20.00% (12.93)% 13.18%
========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 107,629 $ 85,082 $ 134,289
Ratio of expenses to average net assets (b) 1.79%(d) 1.11% 2.71%
Ratio of expenses to average net assets, excluding taxes 1.79%(d) 2.01% 1.54%
Ratio of net investment income/(loss) to average net assets 1.93%(d) 1.28%(c) 1.91%
Portfolio turnover rate 11.55% 31.94% 29.81%
----------
^ Per share amounts prior to July 17, 1995 have been restated to reflect a
two-for-one stock split on July 17, 1995.
* Based on actual shares outstanding on February 4, 2002 (prior to the tender
offer) and December 31, 2002.
+ Based on average shares outstanding.
++ Includes a $0.08 and $0.01 per share decrease to the Fund's net asset value
per share resulting from the dilutive impact of shares issued pursuant to
the Fund's automatic Dividend Reinvestment Plan in 1998 and 1995,
respectively.
See accompanying notes to financial statements.
10
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------
2000 1999 1998 1997
--------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 15.22 $ 12.59 $ 21.61 $ 22.59
--------- --------- --------- ---------
Net investment income/(loss) (0.06)+ 0.09 0.38 0.10
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions (3.36) 3.19 (6.88)++ 2.32
--------- --------- --------- ---------
Net increase/(decrease) in net assets resulting from operations (3.42) 3.28 (6.50) 2.42
--------- --------- --------- ---------
Dividends and distributions to shareholders:
Net investment income (0.01) (0.07) (0.32) --
Net realized gain on investments and foreign currency
related transactions (0.58) (0.58) (2.20) (3.40)
In excess of net investment income -- -- -- --
In excess of net realized gains on investments and
foreign currency related transactions -- -- -- --
--------- --------- --------- ---------
Total dividends and distributions to shareholders (0.59) (0.65) (2.52) (3.40)
--------- --------- --------- ---------
Dilution due to capital share rights offering -- -- -- --
--------- --------- --------- ---------
Anti-dilutive impact due to capital shares tendered or repurchased 0.22 -- -- --
--------- --------- --------- ---------
Net asset value, end of period $ 11.43 $ 15.22 $ 12.59 $ 21.61
========= ========= ========= =========
Market value, end of period $ 8.438 $ 11.250 $ 9.063 $ 17.813
========= ========= ========= =========
Total investment return (a) (20.04)% 31.45% (33.00)% 3.56%
========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 154,473 $ 218,027 $ 180,357 $ 303,944
Ratio of expenses to average net assets (b) 2.98% 2.16% -- 3.34%
Ratio of expenses to average net assets, excluding taxes 1.73% 1.64% 1.62% 1.50%
Ratio of net investment income/(loss) to average net assets (0.45)% 0.61% 2.29% 0.38%
Portfolio turnover rate 24.25% 12.01% 5.39% 35.59%
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------
1996 1995 1994 1993
--------- --------- --------- ---------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 26.45 $ 26.26 $ 20.13 $ 15.55
--------- --------- --------- ---------
Net investment income/(loss) 0.47 0.65 0.42+ 0.35
Net realized and unrealized gain/(loss) on investments
and foreign currency related transactions (3.44) 0.41++ 6.24 5.96
--------- --------- --------- ---------
Net increase/(decrease) in net assets resulting from operations (2.97) 1.06 6.66 6.31
--------- --------- --------- ---------
Dividends and distributions to shareholders:
Net investment income (0.47) (0.65) (0.47) (0.31)
Net realized gain on investments and foreign currency
related transactions (0.26) (0.22) (0.06) (0.26)
In excess of net investment income (0.16) -- -- --
In excess of net realized gains on investments and
foreign currency related transactions -- -- -- (0.16)
--------- --------- --------- ---------
Total dividends and distributions to shareholders (0.89) (0.87) (0.53) (0.73)
--------- --------- --------- ---------
Dilution due to capital share rights offering -- -- -- (1.00)
--------- --------- --------- ---------
Anti-dilutive impact due to capital shares tendered or repurchased -- -- -- --
--------- --------- --------- ---------
Net asset value, end of period $ 22.59 $ 26.45 $ 26.26 $ 20.13
========= ========= ========= =========
Market value, end of period $ 20.875 $ 26.000 $ 23.063 $ 22.250
========= ========= ========= =========
Total investment return (a) (16.43)% 16.66% 6.05% 38.82%
========= ========= ========= =========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 317,012 $ 370,275 $ 367,047 $ 281,031
Ratio of expenses to average net assets (b) 1.96% -- -- --
Ratio of expenses to average net assets, excluding taxes 1.48% 1.46% 1.39% 1.72%
Ratio of net investment income/(loss) to average net assets 1.79% 2.39% 1.74% 2.47%
Portfolio turnover rate 4.82% 2.38% 0.86% 11.29%
----------
(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 include the effect of Chilean repatriation taxes.
(c) Ratio includes the effect of a reversal of Chilean repatriation tax
accrual; excluding the reversal, the ratio would have been 0.18%.
(d) Annualized.
11
THE CHILE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Chile Fund, Inc. (the "Fund") was incorporated in Maryland on January 30,
1989 and commenced investment operations on September 27, 1989. The Fund is
registered under the Investment Company Act of 1940, as amended, as a
closed-end, non-diversified management investment company.
USE OF ESTIMATES: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
SECURITY VALUATION: The net asset value of the Fund is determined daily as of
the close of regular trading on the New York Stock Exchange, Inc. (the
"Exchange") on each day the Exchange is open for business. The Fund's equity
investments are valued at market value, which is generally determined using the
closing price on the exchange or market on which the security is primarily
traded at the time of valuation (the "Valuation Time"). If no sales are
reported, equity investments are generally valued at the most recent bid
quotation as of the Valuation Time or at the lowest ask quotation in the case of
a short sale of securities. Debt securities with a remaining maturity greater
than 60 days are valued in accordance with the price supplied by a pricing
service, which may use a matrix, formula or other objective method that takes
into consideration market indices, yield curves and other specific adjustments.
Debt obligations that will mature in 60 days or less are valued on the basis of
amortized cost, which approximates market value, unless the Board of Directors
determines that using this method would not reflect an investment's value.
Securities and other assets for which market quotations are not readily
available are valued at fair value as determined in good faith by the Board of
Directors under procedures established by the Board of Directors in the absence
of readily ascertainable market values. At June 30, 2003, the Fund held 3.24% of
its net assets in a security valued at fair value as determined in good faith by
the Board of Directors with an aggregate cost of $4,384,163 and fair value of
$3,489,687. Although this security may be resold in privately negotiated
transactions, the prices realized on such sales could differ from the price
originally paid by the Fund or the current carrying value, and the difference
could be material.
SHORT-TERM INVESTMENT: The Fund sweeps available cash into a short-term deposit
issued by Brown Brothers Harriman & Co., the Fund's custodian. The short-term
time deposit is a variable rate account classified as a short-term investment.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on a trade date basis. The cost of investments sold is determined
by use of the specific identification method for both financial reporting and
U.S. income tax purposes. Interest income is accrued as earned; dividend income
is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. income or excise taxes as it is the Fund's
intention to continue to qualify as a regulated investment company and to make
the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. income and excise taxes.
The Fund is subject to a 10% Chilean repatriation tax with respect to certain
remittances from Chile and on net unrealized gains on certain securities held in
Chilean pesos. Realized capital gains on certain liquid securities will not be
subject to the tax. Realized capital gains on illiquid securities, interest and
dividends received are subject to the remittance tax. For the six
12
months ended June 30, 2003, the Fund did not incur such expenses.
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
valuation date rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to changes in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances.
The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such foreign currency related transactions are
treated as ordinary income for U.S. income tax purposes.
Net unrealized currency gains or losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected as
a component of net unrealized appreciation/(depreciation) in value of
investments and translation of other assets and liabilities denominated in
foreign currencies.
Net realized foreign exchange gains or losses represent foreign exchange gains
and losses from sales and maturities of debt securities, transactions in foreign
currencies and forward foreign currency contracts, exchange gains or losses
realized between the trade date and settlement date on security transactions,
and the difference between the amounts of interest and dividends recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received.
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.
OTHER: Securities denominated in currencies other than U.S. dollars are subject
to changes in value due to fluctuations in exchange rates.
The Chilean securities markets are substantially smaller, less liquid and more
volatile than the major securities markets in the United States. Consequently,
acquisition and disposition of securities by the Fund may be inhibited. A
significant proportion of the aggregate market value of equity securities listed
on the Santiago Exchange are held by a small number of investors and are not
publicly traded. This may limit the number of shares available for acquisition
or disposition by the Fund.
13
Investments in Chile may involve certain considerations and risks not typically
associated with investments in the United States, including the possibility of
future political and economic developments and the level of Chilean governmental
supervision and regulation of its securities markets.
The Fund, subject to local investment limitations, may invest up to 20% 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 emerging markets. When investing through another
investment fund, the Fund will bear its proportionate share of the expenses
incurred by the fund, including management fees. Such securities are expected to
be illiquid, which may involve a high degree of business and financial risk and
may result in substantial losses. Because of the current absence of any liquid
trading market for these investments, the Fund may take longer to liquidate
these positions than would be the case for publicly traded securities. Although
these securities may be resold in privately negotiated transactions, the prices
realized on any such sales could be substantially less than those originally
paid by the Fund or the current carrying values and this difference could be
material. Further, companies whose securities are not publicly traded may not be
subject to the disclosure and other investor protection requirements applicable
to companies whose securities are publicly traded.
NOTE B. AGREEMENTS
Credit Suisse Asset Management, LLC ("CSAM") serves as the Fund's investment
adviser with respect to all investments. CSAM receives as compensation for its
advisory services from the Fund, an annual fee, calculated weekly and paid
quarterly, equal to 1.20% of the first $50 million of the Fund's average weekly
market value or net assets (whichever is lower), 1.15% of the next $50 million
and 1.10% of amounts in excess of $100 million. For the six months ended June
30, 2003, CSAM earned $462,356 for advisory services. CSAM also provides certain
administrative services to the Fund and is reimbursed by the Fund for costs
incurred on behalf of the Fund (up to $20,000 per annum). For the six months
ended June 30, 2003, CSAM was reimbursed $6,180 for administrative services
rendered to the Fund.
CELFIN CAPITAL Servicios Financieros S.A. ("Celfin") serves as the Fund's
Chilean sub-adviser. Celfin receives as compensation for its sub-advisory
services, an annual fee, out of the advisory fee payable to CSAM, computed
weekly and paid quarterly, equal to 0.15% of the first $50 million of the Fund's
average weekly market value or net assets (whichever is lower), 0.10% of the
next $50 million and 0.05% of amounts in excess of $100 million. For the six
months ended June 30, 2003, these sub-advisory fees amounted to $50,052.
For the six months ended June 30, 2003, Celfin earned approximately $26,600 in
brokerage commissions from portfolio transactions executed on behalf of the
Fund.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a monthly fee that is computed weekly at an
annual rate of 0.08% of the first $100 million of the Fund's average weekly net
assets, 0.06% of the next $50 million of the Fund's average weekly net assets
and 0.04% of amounts in excess of $150 million. For the six months ended June
30, 2003, BSFM earned $36,773 for administrative services.
Celfin Capital S.A. Administradora de Fondos de Capital Extranjero ("AFCE")
serves as the Fund's Chilean administrator. For its services, AFCE is paid a
fee, out of the advisory fee payable to CSAM, that is calculated weekly and paid
quarterly at an annual rate of 0.05% of the Fund's average weekly market value
or net assets (whichever is lower) and an annual reimbursement of out-of-pocket
expenses. In addition, AFCE receives a supplemental administration fee and an
accounting fee.
14
For the six months ended June 30, 2003, the administration fees, supplemental
administration fees and accounting fees amounted to $19,695, $28,761 and $2,380,
respectively.
Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the
Fund to provide certain financial printing services. For the six months ended
June 30, 2003, Merrill was paid $14,503 for its services to the Fund.
On May 8, 2000, the Fund's Board of Directors unanimously approved a proposal by
the Independent Directors to partially compensate Independent Directors in
shares of the Fund. Under this policy, such directors receive fifty percent
(50%) of their annual retainer in the form of shares purchased by the Fund's
transfer agent in the open market. Directors as a group own less than 1% of the
Fund's outstanding shares.
NOTE C. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001 par value. Of the 10,139,926 shares outstanding at June 30, 2003, CSAM
owned 14,615 shares.
NOTE D. INVESTMENT IN SECURITIES
For the six months ended June 30, 2003, purchases and sales of securities, other
than short-term investments, were $11,432,586 and $10,690,773, respectively.
NOTE E. CREDIT FACILITY
The Fund, together with other funds/portfolios advised by CSAM (collectively,
the "Participating Funds"), participates in a $100 million committed, unsecured,
line of credit facility ("Credit Facility") with Deutsche Bank, A.G. as
administrative agent and syndication agent and State Street Bank and Trust
Company as operations agent for temporary or emergency purposes. Under the terms
of the Credit Facility, the Participating Funds pay an aggregate commitment fee
at a rate of 0.10% per annum on the average unused amount of the Credit
Facility, which is allocated among the Participating Funds in such manner as is
determined by the governing Boards of the Participating Funds. In addition, the
Participating Funds pay interest on borrowings at the Federal Funds rate plus
0.50%. During the six months ended June 30, 2003, the Fund had no borrowings
under the Credit Facility.
NOTE F. FEDERAL INCOME TAXES
Income and capital gains distributions are determined in accordance with federal
income tax regulations, which may differ from GAAP. These differences are
primarily due to differing treatments of foreign currency transactions, losses
deferred due to wash sales and Post-October losses (as defined below), and
excise tax regulations.
The tax characteristic of dividends paid during the fiscal year ended December
31, 2002 for the Fund was $912,593 from ordinary income.
Under current tax law, certain capital losses realized after October 31 within a
taxable year may be deferred and treated as occurring on the first day of the
following tax year ("Post-October losses"). For the tax period ended December
31, 2002, the Fund incurred and elected to defer net realized losses of $592,036
from investments.
At December 31, 2002, the Fund had a capital loss carryforward for U.S. federal
income tax purposes of $585,879 of which $349,317 expires in 2009 and $236,562
expires in 2010.
At June 30, 2003, the identified cost for federal income tax purposes, the gross
unrealized appreciation from investments for those securities having an excess
of value over cost, gross unrealized depreciation from investments for those
securities having an excess of cost over value and the net unrealized
appreciation
15
from investments were $82,807,389, $33,318,640, $(7,129,857) and $26,188,783,
respectively.
NOTE G. SELF-TENDER OFFER
On November 27, 2001, the Fund's Board of Directors approved a tender offer to
acquire up to 25% of the outstanding shares of the Fund's common stock at a per
share cash purchase price equal to 95% of the Fund's net asset value as of the
expiration date of the tender offer period. The Board's actions were taken in
light of the significant discounts at which the Fund's shares were trading.
On January 4, 2002, the Fund commenced a tender offer to acquire up to 25% of
its outstanding shares of common stock at a per share cash purchase price equal
to 95% of net asset value per share as of February 4, 2002, the day the offer
expired. Upon expiration of the offer, the Fund accepted for payment 3,379,976
shares of common stock of the Fund at a price of $9.02 per share.
16
PRIVACY POLICY NOTICE (UNAUDITED)
We are committed to maintaining the privacy of every current and prospective
customer. We recognize that you entrust important personal information to us,
and we wish to assure you that we take seriously our responsibilities in
protecting and safeguarding this information.
In connection with making available investment products and services to current
and potential customers, we may obtain nonpublic personal information about you.
This information may include your name, address, e-mail address, social security
number, account number, assets, income, financial situation, transaction history
and other personal information.
We may collect nonpublic information about you from the following sources:
- Information we receive on applications, forms, questionnaires, web sites,
agreements or in the course of establishing or maintaining a customer
relationship; and
- Information about your transactions with us, our affiliates, or others.
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except with your consent or as otherwise permitted
by law. In cases where we believe that additional products and services may be
of interest to you, we may share the information described above with our
affiliates. We may also disclose this information to firms that perform services
on our behalf. These agents and service providers are required to treat the
information confidentially and use it only for the purpose for which it is
provided.
We restrict access to nonpublic personal information about you to those
employees, agents or other parties who need to know that information to provide
products or services to you or in connection with your investments with or
through us. We maintain physical, electronic and procedural safeguards that
comply with federal standards to guard your nonpublic personal information.
NOTE: THIS NOTICE IS PROVIDED TO CLIENTS AND PROSPECTIVE CLIENTS OF CREDIT
SUISSE ASSET MANAGEMENT, LLC ("CSAM"), CSAM CAPITAL INC., AND CREDIT SUISSE
ASSET MANAGEMENT SECURITIES, INC., AND SHAREHOLDERS AND PROSPECTIVE SHAREHOLDERS
IN CSAM SPONSORED AND ADVISED INVESTMENT COMPANIES, INCLUDING CREDIT SUISSE
FUNDS, AND OTHER CONSUMERS AND CUSTOMERS, AS APPLICABLE. THIS NOTICE IS NOT
INTENDED TO BE INCORPORATED IN ANY OFFERING MATERIALS BUT IS MERELY A STATEMENT
OF OUR CURRENT PRIVACY POLICY, AND MAY BE AMENDED FROM TIME TO TIME UPON NOTICE
TO YOU. THIS NOTICE IS DATED AS OF MAY 31, 2003.
17
OTHER FUNDS MANAGED BY CREDIT SUISSE ASSET MANAGEMENT, LLC
Credit Suisse Capital Appreciation Fund
Credit Suisse Cash Reserve Fund
Credit Suisse Emerging Growth Fund
Credit Suisse Emerging Markets Fund
Credit Suisse Fixed Income Fund
Credit Suisse Global Fixed Income Fund
Credit Suisse Global Post-Venture Capital Fund
Credit Suisse High Income Fund
Credit Suisse International Focus Fund
Credit Suisse Japan Equity Fund
Credit Suisse Large Cap Value Fund
Credit Suisse Municipal Money Fund
Credit Suisse New York Municipal Fund
Credit Suisse New York Tax Exempt Fund
Credit Suisse Select Equity Fund
Credit Suisse Short Duration Bond Fund
Credit Suisse Small Cap Growth Fund
Credit Suisse Small Cap Value Fund
Credit Suisse Strategic Small Cap Fund
Credit Suisse Tax Efficient Fund
Credit Suisse U.S. Government Money Fund
Fund shares are not deposits or other obligations of Credit Suisse Asset
Management, LLC or any affiliate, are not FDIC-insured and are not guaranteed by
Credit Suisse Asset Management, LLC or any affiliate. Fund investments are
subject to investment risks, including loss of your investment. There are
special risk considerations associated with international, global,
emerging-market, small-company, high-yield debt, single-industry, single-country
and other special, aggressive or concentrated investment strategies. Past
performance cannot guarantee future results.
More complete information about a fund, including charges and expenses, is
provided in the Prospectus, which should be read carefully before investing. You
may obtain copies by calling Credit Suisse Funds at 800-927-2874. For up-to-date
performance, please look in the mutual fund section of your newspaper under
Credit Suisse.
Credit Suisse Asset Management Securities, Inc., Distributor.
18
SUMMARY OF GENERAL INFORMATION
The Fund--The Chile 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 to seek total return, consisting of capital appreciation
and current income through investments primarily in Chilean equity and debt
securities. 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 June 30, 2003, CSAM managed over $51 billion in the U.S. and,
together with its global affiliates, managed assets of over $312 billion in 14
countries.
SHAREHOLDER INFORMATION
The market price is published in: THE NEW YORK TIMES (daily), THE WALL STREET
JOURNAL (daily) and BARRON'S (each Monday) under the designation "ChileFd". The
Fund's New York Stock Exchange, Inc. trading symbol is CH. Weekly comparative
net asset value (NAV) and market price information about The Chile 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-americas.com.
CLOSED-END FUNDS
SINGLE COUNTRY
The First Israel Fund, Inc. (ISL)
The Indonesia Fund, Inc. (IF/INDF)
MULTIPLE COUNTRY
The Emerging Markets Telecommunications Fund, Inc. (ETF)
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 Chile Fund, Inc. may from time to
time purchase shares of its capital stock in the open market.
DIRECTORS AND CORPORATE OFFICERS
Enrique R. Arzac Director
James J. Cattano Director
George W. Landau Director
William W. Priest, Jr. Director
Joseph D. Gallagher Chairman of the Board of Directors, Chief Executive
Officer and President
Yaroslaw Aranowicz Chief Investment Officer
Emily Alejos Investment Officer
Hal Liebes Senior Vice President
Michael A. Pignataro Chief Financial Officer and Secretary
Rocco A. Del Guercio Vice President
Robert M. Rizza Treasurer
INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, NY 10017
ADMINISTRATOR
Bear Stearns Funds Management Inc.
383 Madison Avenue
New York, NY 10179
CUSTODIAN
Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
SHAREHOLDER SERVICING AGENT
Fleet National Bank
(c/o EquiServe, L.P.)
P.O. Box 43010
Providence, RI 02940
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
Two Commerce Square
Philadelphia, PA 19103
LEGAL COUNSEL
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019
This report, including the financial statements herein, is sent to the
shareholders of the Fund for their information. The financial information
included herein is taken from the records of the fund without examination by
independent auditors who do not express an opinion thereon. It is not a
prospectus, circular or representation intended for use in the purchase or sale
of shares of the Fund or of any securities mentioned in this report.
[CH LISTED NYSE(R) LOGO]
3911-SA-03
ITEM 2. CODE OF ETHICS. Form N-CSR disclosure requirement not yet effective with
respect to the Registrant.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Form N-CSR disclosure requirement not
yet effective with respect to the Registrant.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Form N-CSR disclosure
requirement not yet effective with respect to the Registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Form N-CSR disclosure requirement
not yet effective with respect to the Registrant.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. Form N-CSR disclosure requirement not
yet effective with respect to the Registrant.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The Principal Executive Officer and Principal Financial Officer
concluded that the Registrant's Disclosure Controls and Procedures are
effective based on their evaluation of the Disclosure Controls and
Procedures as of a date within 90 days of the filing date of this
report.
(b) There were no significant changes in Registrant's internal controls
or in other factors that could significantly affect these controls
subsequent to the date of their evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
(a)(1) Form N-CSR disclosure requirement not yet effective with respect
to the Registrant.
(a)(2) The certifications of the Registrant as required by Rule 30a-2(a)
under the Act are exhibits to this report.
(b) The certifications of the Registrant as required by Rule 30a-2(b)
under the Act are an exhibit to this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
The Chile Fund, Inc.
/s/ Joseph D. Gallagher
--------------------------------------------------------------
Name: Joseph D. Gallagher
Title: Chief Executive Officer
Date: September 2, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
/s/ Joseph D. Gallagher
--------------------------------------------------------------
Name: Joseph D. Gallagher
Title: Chief Executive Officer
Date: September 2, 2003
/s/ Michael A. Pignataro
--------------------------------------------------------------
Name: Michael A. Pignataro
Title: Chief Financial Officer
Date: September 2, 2003