[LOGO OMITTED]
THE CENTRAL EUROPEAN
EQUITY FUND, INC.*
SEMI-ANNUAL REPORT
APRIL 30, 2003
*As of June 25, 2003 the name of the Fund is changed to The Central Europe and
Russia Fund, Inc.
SUMMARY OF GENERAL INFORMATION
--------------------------------------------------------------------------------
THE FUND
The Central European Equity Fund, Inc.* is a non-diversified, actively-managed
Exchange-Traded Closed-End Fund listed on the New York Stock Exchange with the
symbol "CEE". The Fund seeks capital appreciation primarily through investment
in Central and Eastern European equities. On June 24, 2003 the Fund's
shareholders voted to expand its core investments to include Russia. It is
managed and advised by wholly-owned subsidiaries of the Deutsche Bank Group.
SHAREHOLDER INFORMATION
Prices for the Fund's shares are published daily in the New York Stock Exchange
Composite Transactions section of newspapers. Net asset value and market price
information are published each Monday in THE WALL STREET JOURNAL and THE NEW
YORK TIMES, and each Saturday in BARRON'S and other newspapers in a table called
"Closed End Funds". Daily information on the Fund's net asset value is available
from NASDAQ (symbol XCEEX). It is also available by calling: 1-800-437-6269 (in
the U.S.) or 617-443-6918 (outside of the U.S.). In addition, a schedule of the
Fund's largest holdings, dividend data and general shareholder information may
be obtained by calling these numbers.
The foregoing information is also available on our Web site: www.ceefund.com.
--------------------------------------------------------------------------------
THERE ARE THREE EXCHANGE-TRADED CLOSED-END FUNDS INVESTING INEUROPEAN EQUITIES
MANAGED BY THEDEUTSCHE BANK GROUP:
o Germany Fund--investing primarily in equities of major German corporations.
It may also invest up to 20% in equities of other Western European
companies (with no more than 15% in any single country).
o New Germany Fund--investing primarily in the middlemarket German companies
and up to 20% elsewhere in Western Europe (with no more than 10% in any
single country).
o Central European Equity Fund*--investing primarily in Central and Eastern
European companies as well as in Russia.
Please consult your broker for advice on any of the above or call 1-800-437-6269
(in the U.S.) or 617-443-6918 (outside of the U.S.) for shareholder reports.
--------------------------------------------------------------------------------
8156
[LOGO OMITTED]
THE CENTRAL EUROPEAN
EQUITY FUND,INC.
LETTER TO THE SHAREHOLDERS
--------------------------------------------------------------------------------
June 25, 2003
Dear Shareholder,
We are pleased to report that for the first six months ended April 30, 2003,
the Central European Equity Fund's net asset value per share rose 12.9%, while
the Fund's benchmark rose 12.7% in US dollar terms. The region continues to
outperform developed markets; during the same period, the S&P 500 Index rose
3.5% and the MSCI Europe Index rose 2.7%.
Russia was the best performing country from the Fund's portfolio, gaining
over 20% during the six month period in US dollar terms. Yukos announced last
month it agreed to merge with the Russian oil company Sibneft to create one of
the world's largest oil companies. Its shares rose over 26%. While Russian oil
and gas stocks continued to perform well, all other sectors performed strongly
as well. The Fund's two telecommunications stocks were both up over 40% in local
terms. Norilsk Nickel, the metals and mining company rose almost 15%, and the
Fund's shares in a tracking vehicle for the Russian bank Sberbank rose more than
22%. The ADR shares of Unified Energy System, the electric utilities company,
rose over 47%. In our opinion, the breadth of the market rally is a positive
sign of the sustainability of strong global interest in Russia's equity market.
In April, Hungary became one of the first countries to hold a public
referendum on joining the European Union. The Hungarian market slightly
outperformed the region, rising 14.1% in US dollar terms. Economically, the
country continues to do well. OTP Bank's GDR shares rose 22.3% during the same
period, MATAV, the telecommunications company rose 25%, and Gedeon Richter, the
pharmaceutical company, GDR shares rose over 40%.
The Czech Republic rose 9.7% during the six month period, with the strongest
performance coming from Unipetrol, which rose over 44%. Poland's equity market
underperformed the region, rising just 1.2% in US dollar terms. Poland is still
suffering from the central bank's excessive monetary tightening 2 years ago.
Since then, the central bank has reversed course and lowered interest rates 21
times. Poland's economic growth this year is expected to double the level of
growth achieved last year.
At the May 9, 2003 meeting, the Board of Directors of your Fund moved to take
advantage of the positive changes that we believe are taking place in Russia by
approving increased flexibility for the Fund to invest in Russia. This
recommendation was approved by shareholders at the June 24, 2003 Annual Meeting.
The changes establish a fundamental policy to invest at least 80% of the Fund's
net assets in both Central Europe and Russia. The Fund's name is changing to The
Central Europe and Russia Fund, Inc. Its NYSE ticker symbol will remain "CEE."
Also at the May 9th Board Meeting, the Board of Directors elected Mr. Fred H.
Langhammer, President and Chief Executive Officer of The Estee Lauder Companies
Inc., and Mr. Eggert Voscherau, Vice Chairman of BASF as Directors of your Fund,
replacing retiring Directors Dr. Juergen Strube and Hans Storr. Last July, Mr.
Otto Wolff von Amerongen also retired as Director of the Fund. Mr. Langhammer
had previously been Managing Director of Estee Lauder Germany. He was educated
in Germany, Canada and Japan, and is now based in New York. Mr. Voscherau is
based in Germany.
We believe the Fund continues to be an attractive investment opportunity.
Economic growth outpaces other European markets while valuations remain
attractive.
Sincerely,
/S/ SIGNATURE /S/ SIGNATURE
Christian Strenger Richard T. Hale
Chairman President
--------------------------------------------------------------------------------
FOR ADDITIONAL INFORMATION ABOUT THE FUND INCLUDING PERFORMANCE, DIVIDENDS,
PRESENTATIONS, PRESS RELEASES, DAILY NAV AND SHAREHOLDER REPORTS, PLEASE VISIT
WWW.CEEFUND.COM
--------------------------------------------------------------------------------
1
FUND HISTORY AS OF APRIL 30, 2003
--------------------------------------------------------------------------------
STATISTICS:
Net Assets ................................................. $141,282,807
Shares Outstanding ......................................... 7,854,163
NAV Per Share .............................................. $17.99
DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS:
RECORD ORDINARY LT CAPITAL
DATE INCOME GAINS TOTAL
------- -------- ---------- -----
11/19/01 ....................... $0.23 -- $0.23
11/16/98 ....................... $0.14 -- $0.14
9/1/98 ......................... $0.01 $0.01 $0.02
11/17/97 ....................... $1.54 $5.01 $6.55
9/3/97 ......................... -- $0.02 $0.02
12/19/96 ....................... $0.11 $1.79 $1.90
TOTAL RETURNS:
FOR THE SIX FOR THE YEARS ENDED OCTOBER 31,
MONTHS ENDED -----------------------------------------------------------
APRIL 30, 2003 2002 2001 2000 1999 1998
-------------- -------- --------- -------- -------- --------
Net Asset Value ........................... 12.93% 17.05% (14.31)% .94% 2.48% (26.09)%
Market Value .............................. 11.70% 23.43% (7.79)% (5.00)% (3.29)% (22.89)%
Benchmark ................................. 12.73%(1) 14.68%(2) (20.40)%(3) 2.05%(4) 19.31%(4) (24.68)%(4)
--------------------------------------------------------------------------------
(1) Represents 85% CECE/15% RTX.
(2) Represents the CECE Index.
(3) Represents the customized MSCI Index for the 2 months ended 12/31/00 and the
CECE Index for the 10 months ended 10/31/01. The Fund changed its benchmark
from the customized MSCI Index to the CECE Index on January 1, 2001.
(4) Represents the MSCI Index.
OTHER INFORMATION:
NYSE Ticker Symbol ................................................ CEE
NASDAQ Symbol ..................................................... XCEEX
Dividend Reinvestment Plan ........................................ Yes
Voluntary Cash Purchase Program ................................... Yes
Annual Expense Ratio .............................................. 1.51%
--------------------------------------------------------------------------------
FUND PERFORMANCE IS HISTORICAL, ASSUMES REINVESTMENT OF ALL DIVIDENDS AND
CAPITAL GAINS, AND IS NOT INDICATIVE OF FUTURE RESULTS.
INVESTMENTS IN FUNDS INVOLVE RISK. SOME FUNDS HAVE MORE RISK THAN OTHERS. THESE
INCLUDE FUNDS THAT ALLOW EXPOSURE TO OR OTHERWISE CONCENTRATE INVESTMENTS IN
CERTAIN SECTORS, GEOGRAPHIC REGIONS, SECURITY TYPES, MARKET CAPITALIZATION OR
FOREIGN SECURITIES (E.G., POLITICAL OR ECONOMIC INSTABILITY, WHICH CAN BE
ACCENTUATED IN EMERGING MARKET COUNTRIES).
2
10 LARGEST EQUITY HOLDINGS AS OF APRIL 30, 2003
--------------------------------------------------------------------------------
% of
Portfolio
--------
1. Telekomunikacja Polska 10.5
2. Bank Pekao 8.4
3. OTP Bank 8.3
4. Matav 7.8
5. Polski Koncern Naftowy 7.4
% of
Portfolio
--------
6. Mol Magyar Olaj-ES Gazipari 7.0
7. Gedeon Richter 5.0
8. Yukos 4.7
9. Lukoil 4.6
10. Cesky Telecom 3.8
[MAP GRAPHIC OMITTED]
EDGAR REPRESENTATION OF DATA IN PRINTED GRAPHIC AS FOLLOWS:
Russia 16.4%
Poland 39.7%
Czech Republic 12.9%
Austria 1.4%
Hungary 28.8%
Croatia 0.8%
3
INTERVIEW WITH THE CHIEF INVESTMENT OFFICER
--------------------------------------------------------------------------------
QUESTION: How attractive are the countries that are expected to join the
European Union after their strong outperformance over the past 2 years?
ANSWER: The equity markets of Poland, Hungary and the Czech Republic remain
attractive. Economic growth for the region is expected to be higher than the
average for the world economy for three reasons. First, the region has been
receiving large amounts of foreign direct investment. Central Europe is very
attractive to companies seeking to expand into untapped markets and to those
looking to take advantage of relatively cheap labor. Second, interest rates have
been gradually converging to the levels of Western Europe. Historically, lower
interest rates make investment projects more attractive and stimulate economic
activity. Third, emerging economies joining the European Union have historically
benefited from the affiliation with the more developed Western European
countries.
QUESTION: What will be the benefits of the proposed reduction in Polish
Corporate Income Tax?
ANSWER: The Polish Government has proposed to reduce the corporate income tax
(CIT) to 19%, down eight percentage points from the current 27%. Although its
passage is still uncertain, if approved this cut could have a strong effect on
corporate earnings, employment and economic growth. The proposal must still be
approved by the government and the Parliament, but current sentiment leads us to
believe it will pass by the end of the year. The tax cut will be dependent on
the removal of all tax breaks, allowances and deductions that reduce the nominal
income tax. The government estimated the 2003 effective tax rate to be 23.7%,
reducing the underlying tax reduction to 4.7%, still a meaningful reduction. The
lower CIT may improve Poland's competitive position relative to other countries
in the region and may give an added boost to the Polish equity market. A lower
tax rate could also attract foreign investors and increase the number of foreign
firms looking to do business in Poland.
QUESTION: What is the progress of the 10 candidate countries in becoming members
of the European Union?
ANSWER: The EU membership negotiations are making good progress. By the end of
the summer, all the candidate countries are expected to have held referendums to
get the public's approval to join the EU. To date, 7 countries have completed
this task with success. Hungary's referendum was held in April and 83.8% of
those voting voted in favor of joining the EU. In Poland, 77.5% voted in favor,
and in the Czech Republic 77.3% also voted in favor. The other four countries,
Malta, Slovenia, Slovakia and Lithuania, all showed strong public support for
joining the EU. The accession to the EU represents a strong anchor for the
candidate countries' economic and structural policies. Foreign investors are
increasingly realizing this, as fund flows (representing direct investment and
portfolio investments) have reached record levels in Poland, Hungary and the
Czech Republic. It is our belief that these countries should be able to realize
even higher growth rates than the EU itself if they continue to implement
further structural reforms. It is this higher growth potential that makes these
countries very attractive to invest in.
Hanspeter Ackermann, Chief Investment Officer of the Central European Equity
Fund
June 25, 2003
4
REPORT FROM THE INVESTMENT ADVISER AND MANAGER
--------------------------------------------------------------------------------
ECONOMIC OUTLOOK FOR THE CENTRAL
EUROPEAN ECONOMIES
POLAND
On May 28th, Poland's central bank reduced its main interest rate for the fifth
time this year after a steep decline in inflation. Poland's intervention rate
now stands at a record low of 5.5%, while two years ago the intervention rate
stood at 19%. The steep reduction in borrowing costs helped pull the economy out
of its worst slowdown since the end of communism. We are basing our portfolio
decisions on the view that reduction in interest rates will continue as
inflation has been brought down from its peak of 11.6% in July 2000, to a record
low of 0.3% this past April. For 2003, we expect Poland's economy to grow 2.6%,
more than twice the 1.2% growth achieved during 2002. The effects of the
interest rates cuts take time to work their way into the economy and their full
effects will be felt in 2004, with an estimated GDP growth of 4.0%. Poland's
current account deficit is expected to remain below 4% of GDP this year on the
back of strong exports. In USD terms, exports were up 33% year on year ending
February, while imports were up 17%. On June 8th, Poland held a referendum on
Poland's entry into the European Union, with 77.5% of those voting supporting
accession to the EU.
HUNGARY
Hungary has continued to be the best performing country in the region in terms
of economic activity, with estimated GDP growth of 3.6% this year and 4.1% next
year. In addition, there has been a significant decline in inflation, falling
from 9.2% in 2001 to 5.1% this year. Hungary's economic performance has been
quite extraordinary given the country's large exposure to foreign trade with
Western Europe. Hungary has successfully stimulated domestic demand,
particularly the construction and service sectors, through its loose fiscal
policy. Private consumption benefited from wage hikes in the public sector and
large-scale public investment projects. Many of these large public projects are
being funded by the substantial amounts of foreign capital that Hungary has
attracted over the past few years. Hungary was one of the first countries to
hold a referendum on joining the European Union, with 84% of those voting
supporting accession.
RUSSIA
Russia's economic performance has been both remarkably strong and stable over
the past couple of years, at a time when most economies experienced a
considerable drop-off in economic performance. In 2002, Russia's economy grew
4.3% and is expected to grow 4.2% both this year and in 2004. Economic growth
over the next 2 years is expected to be significantly higher than in developed
Europe and the US. The key factor in the strong performance of the Russian
economy has been oil and natural gas exports. The oil riches have not only
fueled the real economy, but they have also improved the Russian financial
situation. Russia is one of the few countries in the world with surpluses in
both the federal budget and the current account. As a result, Russia was able to
repay some of its foreign debts before maturity and raise its foreign exchange
reserves to $44 billion. Russia is potentially the biggest oil producer in the
world and it could become over time the biggest oil exporter. In this respect,
three developments are noteworthy. First, the $6.75 billion investment by BP in
a joint venture with three Russian oil companies represents the biggest single
direct investment in Russia. Second, a political decision to build a private
pipeline and expand port facilities in Murmansk are aimed at increasing oil
exports to the US. Third, a merger of two big Russian oil companies, with an
output of 24 million barrels per day, will become the fifth biggest oil producer
in the world. To reduce the country's dependence on oil, the minister of finance
has submitted a proposal to create a stabilization fund that would be used to
cushion the economy from the negative impact of potentially lower oil proceeds.
CZECH REPUBLIC
The Czech economy has continued to perform relatively well, considering the
persistent weakness in Western Europe. The initial data for 2002 were revised
upwards as the negative impact of last year's flooding has diminished. Real
growth in 2002 was 2.5%, and the outlook calls for growth of 3.0% this year and
3.6% in 2004, as both monetary and fiscal policies remain stimulative. The Czech
National Bank began easing interest rates relatively early, and together with an
expansionary fiscal policy provided sufficient stimulus to the economy.
Inflation has been subdued, falling from 4.8% in 2001 to 1.2% this year and
unemployment has also been gradually declining, falling from 8.5% last year to
8.0% this year. The Czech Republic held its public referendum on joining the EU
on June 15th, with 77.3% in favor.
5
SHARES REPURCHASED AND ISSUED
--------------------------------------------------------------------------------
The Fund has been purchasing shares of its common stock in the open market.
Your Directors continue to believe the Fund represents excellent value. Shares
repurchased and shares issued for dividend reinvestment for the past five years
and the six months ended April 30, 2003 are as follows:
Six months
ended
Fiscal year 1998 1999 2000 2001 2002 4/30/03
----------- ----------- ----------- ----------- ----------- --------------
Shares repurchased 2,680,954 1,270,800 1,106,500 686,975 201,600 84,300
Shares issued for
dividend reinvestment 2,082,693 66,019 -- -- 96,643 --
VOLUNTARY CASH PURCHASE PROGRAM
--------------------------------------------------------------------------------
The Fund has an attractive way to purchase additional shares at reduced cost.
This is the Voluntary Cash Purchase Program which is part of the Dividend
Reinvestment Plan. By enrolling in the Voluntary Cash Purchase Program, you may
make additional investments each month--as little as $100 in any month or as
much as $36,000 a year. Share purchases are combined to receive a beneficial
brokerage fee. The Voluntary Cash Purchase Program and Dividend Reinvestment
Plan has been amended to allow enrollment in the Plan by making an initial cash
deposit of at least $250 with the plan agent.
PRIVACY POLICY AND PRACTICES
--------------------------------------------------------------------------------
The Fund collects nonpublic personal information about its customers
(stockholders) with respect to their transactions in shares of the Fund but only
for those stockholders whose shares are registered in their names. We do not
have knowledge of or collect personal information about stockholders who hold
Fund shares in "street name" such as brokers or banks.
We do not disclose any nonpublic personal information about our stockholders
or former stockholders to anyone, except as permitted by law.
We restrict access to nonpublic personal information about our stockholders
to those employees who need to know that information to provide services to our
stockholders. We maintain physical, electronic and procedural safeguards that
comply with federal standards to guard our stockholders' nonpublic personal
information.
6
THE CENTRAL EUROPEAN EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS -- APRIL 30, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
SHARES DESCRIPTION VALUE
--------------- --------------- ------------
INVESTMENTS IN POLISH
COMMON STOCKS--38.7%
BANKS--10.4%
134,746 Bank Pekao ..................... $ 3,028,199
38,000 Bank Pekao (ADR)+ .............. 826,500
355,000 Bank Pekao (GDR) ............... 7,721,250
52,539 Bank Prezemyslowo-Handlowy ..... 3,107,182
------------
14,683,131
------------
COMPUTER & PERIPHERALS--0.9%
57,938 Computerland* .................. 1,294,448
------------
CONSTRUCTION & ENGINEERING--1.1%
227,759 Budimex* ....................... 1,514,603
------------
DIVERSIFIED TELECOMMUNICATION SERVICES--10.9%
1,191,504 Netia Holdings-New* ............ 901,966
2,223,207 Telekomunikacja Polska ......... 7,509,058
1,690,000 Telekomunikacja
Polska (ADR)+ ................ 5,644,600
395,000 Telekomunikacja
Polska (GDR) ................. 1,319,300
------------
15,374,924
------------
HOUSEHOLD DURABLES--1.7%
190,000 Cersanit-Krasnystaw* ........... 2,402,155
------------
MEDIA--1.2%
6,315 Agora* ......................... 67,723
8,600 Agora (GDR)* ................... 91,418
150,800 Agora (GDR)*+ .................. 1,603,004
------------
1,762,145
------------
METAL & MINING--1.9%
836,710 KGHM Polska Miedz* ............. 2,540,150
40,000 KGHM Polska Miedz (GDR)* ....... 240,000
------------
2,780,150
------------
OIL & GAS--7.2%
736,102 Polski Koncern Naftowy ......... 3,473,001
149,500 Polski Koncern
Naftowy (GDR) ................ 1,397,825
570,000 Polski Koncern
Naftowy (GDR)+ ............... 5,329,500
------------
10,200,326
------------
REAL ESTATE--1.8%
256,000 Echo Investment* ............... 2,503,141
------------
SHARES DESCRIPTION VALUE
--------------- --------------- ------------
SOFTWARE--1.6%
5,275 Prokom Software* ............... $ 170,542
128,758 Prokom Software (GDR)* ......... 2,047,252
------------
2,217,794
------------
Total Investments in Polish
Common Stocks
(cost $52,957,649) ........... 54,732,817
------------
INVESTMENTS IN HUNGARIAN
COMMON STOCKS--28.2%
BANKS--8.1%
337,400 OTP Bank* ...................... 3,618,990
365,000 OTP Bank (GDR)* ................ 7,876,700
------------
11,495,690
------------
DIVERSIFIED TELECOMMUNICATION SERVICES--7.6%
1,049,804 Matav .......................... 4,132,749
338,000 Matav (ADR) .................... 6,560,580
------------
10,693,329
------------
OIL & GAS--6.8%
105,000 Mol Magyar Olaj-ES
Gazipari ..................... 2,738,219
266,000 Mol Magyar Olaj-ES Gazipari
(GDR) ........................ 6,881,420
------------
9,619,639
------------
PHARMACEUTICALS--5.7%
32,665 Egis ........................... 1,148,142
60,089 Gedeon Richter ................. 4,360,397
35,000 Gedeon Richter (GDR) ........... 2,502,500
------------
8,011,039
------------
Total Investments in Hungarian
Common Stocks
(cost $25,403,232) ........... 39,819,697
------------
INVESTMENTS IN RUSSIAN
SECURITIES--16.1%
COMMON STOCKS--15.6%
BANKS--0.7%
3 UBS Sberbank PERLES* ........... 1,030,500
------------
ELECTRIC UTILITIES--1.3%
118,000 Unified Energy
Systems (GDR) ................ 1,787,700
------------
See Notes to Financial Statements.
7
THE CENTRAL EUROPEAN EQUITY FUND, INC.
SCHEDULE OF INVESTMENTS -- APRIL 30, 2003 (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
SHARES DESCRIPTION VALUE
--------------- --------------- ------------
METAL & MINING--1.7%
105,000 JSC MMC Norilsk Nickel
(ADR)* ....................... $ 2,400,300
------------
OIL & GAS--10.0%
20,000 Gazprom (ADR) .................. 315,000
91,500 Lukoil (ADR) ................... 6,331,800
30,000 Sibneft (ADR) .................. 699,300
52,000 Vostok Nafta
Investment (SDR)* ............ 287,317
37,150 Yukos (ADR) .................... 6,501,250
------------
14,134,667
------------
WIRELESS TELECOMMUNICATION SERVICES--1.9%
35,000 Mobile Telesystems (GDR)* ...... 1,662,500
25,000 Vimpel Communications
(ADR)* ....................... 996,500
------------
2,659,000
------------
Total Common Stocks
(cost $16,501,725) ........... 22,012,167
------------
PREFERRED STOCK--0.5%
ELECTRIC UTILITIES--0.5%
50,000 Unified Energy Systems (ADR)
(cost $655,809) .............. 660,000
------------
Total Investments in
Russian Securities
(cost $17,157,534) ........... 22,672,167
------------
INVESTMENTS IN CZECH REPUBLIC
COMMON STOCKS--12.6%
BANKS--3.6%
4,500 Komercni Banka* ................ 313,886
209,996 Komercni Banka (GDR)* .......... 4,787,909
------------
5,101,795
------------
CHEMICALS--0.3%
250,000 Unipetrol* ..................... 417,096
------------
DIVERSIFIED TELECOMMUNICATION SERVICES--3.7%
451,000 Cesky Telecom* ................. 5,231,863
------------
SHARES DESCRIPTION VALUE
--------------- --------------- ------------
INDUSTRIAL
CONGLOMERATES--3.4%
1,296,000 Ceske Energeticke Zavody ....... $ 4,848,901
------------
MEDIA--0.5%
101,730 Ceske Radiokomunikace
(GDR)* ....................... 658,702
------------
TOBACCO--1.1%
3,850 Philip Morris Cr ............... 1,510,152
------------
Total Investments in Czech
Republic Common Stocks
(cost $13,123,184) ........... 17,768,509
------------
INVESTMENT IN AUSTRIAN
COMMON STOCK--1.3%
BANKS--1.3%
23,685 Erste Bank Der Oester Spark
(cost $1,650,079) ............ 1,874,061
------------
INVESTMENT IN CROATIAN
COMMON STOCK--0.8%
PHARMACEUTICALS--0.8%
85,000 Pliva D.D. (GDR)
(cost $1,086,400) ............ 1,168,750
------------
Total Investments--97.7%
(cost $111,378,078) .......... 138,036,001
Cash and other assets in excess
of liabilities--2.3% ......... 3,246,806
------------
NET ASSETS--100.0% ............. $141,282,807
============
--------------------------------------------------------------------------------
* Non-income producing security.
+ 144A -- Restricted to resale to institutional investors only.
ADR -- American Depository Receipt
GDR -- Global Depository Receipt
SDR -- Swedish Depository Receipt
See Notes to Financial Statements.
8
THE CENTRAL EUROPEAN EQUITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $111,378,078) .............................................................. $138,036,001
Cash and foreign currency (cost $5,842,423) ............................................................ 5,877,429
Dividend receivable .................................................................................... 765,172
Foreign withholding tax refund receivable .............................................................. 64,635
Interest receivable .................................................................................... 1,353
Other assets ........................................................................................... 17,280
---------------
Total assets ........................................................................................ 144,761,870
---------------
LIABILITIES
Payable for securities purchased ....................................................................... 3,211,099
Management fee payable ................................................................................. 67,614
Investment advisory fee payable ........................................................................ 35,229
Payable for shares repurchased ......................................................................... 35,920
Payable for Directors' fees and expenses ............................................................... 17,500
Accrued expenses and accounts payable .................................................................. 111,701
---------------
Total liabilities ................................................................................... 3,479,063
---------------
NET ASSETS ............................................................................................. $141,282,807
===============
Net assets consist of:
Paid-in capital, $.001 par (Authorized 80,000,000 shares) .............................................. $225,293,405
Cost of 5,651,812 shares held in treasury .............................................................. (83,176,315)
Accumulated net realized loss on investments and foreign currency transactions ......................... (27,502,314)
Net unrealized appreciation of investments and foreign currency ........................................ 26,668,031
---------------
Net assets ............................................................................................. $141,282,807
===============
Net asset value per share ($141,282,807 / 7,854,163 shares of common stock issued and outstanding) ..... $17.99
========
See Notes to Financial Statements.
9
THE CENTRAL EUROPEAN EQUITY FUND, INC.
STATEMENT OF OPERATIONS (UNAUDITED)
--------------------------------------------------------------------------------
FOR THE
SIX MONTHS
ENDED
APRIL 30, 2003
--------------
NET INVESTMENT LOSS
Investment income
Dividends (net of foreign withholding taxes of $136,319) ..................... $ 880,032
Interest ..................................................................... 5,286
---------------
Total investment income ......................................................... 885,318
---------------
Expenses
Management fee ............................................................... 407,714
Investment advisory fee ...................................................... 212,447
Custodian and Transfer Agent's fees and expenses ............................. 115,612
Reports to shareholders ...................................................... 61,964
Directors' fees and expenses ................................................. 52,346
Legal fee .................................................................... 66,200
Audit fee .................................................................... 27,500
NYSE listing fee ............................................................. 16,625
Miscellaneous ................................................................ 22,012
---------------
Total expenses before custody credits* ....................................... 982,420
Less: custody credits ........................................................ (4,304)
---------------
Net expenses ................................................................. 978,116
---------------
Net investment loss ............................................................. (92,798)
---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN
CURRENCY TRANSACTIONS
Net realized gain (loss) on:
Investments .................................................................. 446,695
Foreign currency transactions ................................................ (27,044)
Net change in unrealized appreciation/depreciation on:
Investments .................................................................. 15,672,660
Translation of other assets and liabilities from foreign currency ............ 5,830
---------------
Net gain on investments and foreign currency transactions ....................... 16,098,141
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............................ $16,005,343
===============
-----------------------------------
* The custody credits are attributable to interest earned on U.S. cash balances
held on deposit at custodian.
See Notes to Financial Statements.
10
THE CENTRAL EUROPEAN EQUITY FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED)
--------------------------------------------------------------------------------
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2003 OCTOBER 31, 2002
---------------- ----------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment loss .......................................................... $ (92,798) $ (551,673)
Net realized gain (loss) on:
Investments ................................................................ 446,695 (6,812,935)
Foreign currency transactions .............................................. (27,044) (245,256)
Net change in unrealized appreciation/depreciation on:
Investments ................................................................ 15,672,660 26,064,511
Translation of other assets and liabilities
from foreign currency .................................................... 5,830 73,710
------------ ------------
Net increase in net assets resulting from operations ......................... 16,005,343 18,528,357
------------ ------------
Distributions to shareholders from:
Net investment income ........................................................ -- (773,235)
Net realized foreign currency gains .......................................... -- (1,075,073)
------------ ------------
Total distributions to shareholders (a) ...................................... -- (1,848,308)
------------ ------------
Capital share transactions:
Net proceeds from reinvestment of dividends
(0 and 96,643 shares, respectively) ........................................ -- 1,107,536
Cost of shares repurchased (84,300 and 201,600 shares,
respectively) .............................................................. (1,189,090) (2,534,344)
------------ ------------
Net decrease in net assets from capital share transactions ................... (1,189,090) (1,426,808)
------------ ------------
Total increase in net assets .................................................... 14,816,253 15,253,241
NET ASSETS
Beginning of period ............................................................. 126,466,554 111,213,313
------------ ------------
End of period (including undistributed net investment
income of $-0- as of April 30,
2003 and October 31, 2002) ................................................... $141,282,807 $126,466,554
============ ============
----------
(a) For U.S. tax purposes, total distributions to shareholders consisted
entirely of Ordinary income.
See Notes to Financial Statements.
11
THE CENTRAL EUROPEAN EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS--APRIL 30, 2003 (UNAUDITED)
--------------------------------------------------------------------------------
NOTE 1. ACCOUNTING POLICIES
The Central European Equity Fund, Inc. (formerly The Future Germany Fund, Inc.
or the "Fund") commenced investment operations on March 6, 1990 as a
non-diversified, closed-end management investment company incorporated in
Maryland. Pursuant to shareholder approvals, on June 29, 1995, the Fund changed
its name and investment objective to allow investment in Central European
countries, and on June 20, 1997, the Fund changed its investment policies to
permit increased flexibility in the geographic distribution of the Fund's
investments.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements. The preparation of
financial statements in accordance with accounting principles generally accepted
in the United States of America requires management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
SECURITY VALUATION: Investments are stated at value. All securities for which
market quotations are readily available are valued at the last sales price on
the primary exchange on which they are traded prior to the time of valuation. If
no sales price is available at that time, and both bid and ask prices are
available, the securities are valued at the mean between the last current bid
and ask prices; if no quoted asked prices are available, they are valued at the
last quoted bid price. All securities for which market quotations are not
readily available will be valued as determined in good faith by the Board of
Directors of the Fund.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Cost of securities sold is calculated using the
identified cost method. Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Such dividend income is
recorded net of unrecoverable foreign withholding tax.
LOANS OF PORTFOLIO SECURITIES: The Fund may lend portfolio securities while it
continues to earn dividends on such securities loaned. The market value of
government securities received as collateral is required to be at least equal to
105 percent of the market value of the securities loaned, which are
marked-to-market daily. Securities lending fees, net of rebates and agency fees,
are earned by the Fund and are identified separately in the Statement of
Operations.
FOREIGN CURRENCY TRANSLATION: The books and records of the Fund are maintained
in United States dollars.
Assets and liabilities denominated in euros and other foreign currency amounts
are translated into United States dollars at the 10:00 A.M. mid-point of the
buying and selling spot rates quoted by the Federal Reserve Bank of New York.
Purchases and sales of investment securities, income and expenses are reported
at the rate of exchange prevailing on the respective dates of such transactions.
The resultant gains and losses arising from exchange rate fluctuations are
identified separately in the Statement of Operations, except for such amounts
attributable to investments, which are included in net realized and unrealized
gains and losses on investments.
Foreign investments may involve certain considerations and risks not typically
associated with those of domestic origin as a result of, among others, the
possibility of political and economic developments and the level of governmental
supervision and regulation of foreign securities markets. In addition, certain
foreign markets may be substantially smaller, less developed, less liquid and
more volatile than the major markets of the United States.
In the normal course of business, the Fund may enter into contracts that contain
a variety of representations which provide general indemnifications. The Fund's
maximum exposure under these arrangements is unknown as this would involve
future claims that may be made against the Fund that have not yet occurred.
However, based on experience, the Fund expects the risk of loss to be remote.
TAXES: No provision has been made for United States Federal income tax because
the Fund intends to meet the requirements of the United States Internal Revenue
Code applicable to regulated investment companies and to distribute
substantially all of its taxable income to shareholders.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund records dividends and
distributions to its shareholders on the ex-dividend date. Income and capital
gain distributions are determined in accordance with United States Federal
income tax regulations which may differ from accounting principles generally
accepted in the United States of America. These differences, which could be
temporary or permanent in nature, may result in reclassification of
distributions; however, net investment income, net realized gains and net assets
are not affected.
12
THE CENTRAL EUROPEAN EQUITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS--APRIL 30, 2003 (UNAUDITED) (CONTINUED)
--------------------------------------------------------------------------------
During the six months ended April 30, 2003, the Fund reclassified permanent book
and tax differences as follows:
INCREASE
(DECREASE)
---------
Undistributed net investment income ............ $92,798
Paid-in capital ................................ (92,798)
NOTE 2. MANAGEMENT AND INVESTMENT
ADVISORY AGREEMENTS
The Fund has a Management Agreement with Deutsche Bank Securities Inc. (the
"Manager"), and an Investment Advisory Agreement with Deutsche Asset Management
International GmbH (the "Investment Adviser"). The Manager and the Investment
Adviser are affiliated companies.
The Management Agreement provides the Manager with a fee, computed weekly and
payable monthly, at the annual rates of .65% of the Fund's average weekly net
assets up to $100 million, and .55% of such assets in excess of $100 million.
The Investment Advisory Agreement provides the Investment Adviser with a fee,
computed weekly and payable monthly, at the annual rates of .35% of the Fund's
average weekly net assets up to $100 million and .25% of such assets in excess
of $100 million.
Pursuant to the Management Agreement, the Manager is the corporate manager and
administrator of the Fund and, subject to the supervision of the Board of
Directors and pursuant to recommendations made by the Fund's Investment Adviser,
determines the suitable securities for investment by the Fund. The Manager also
provides office facilities and certain administrative, clerical and bookkeeping
services for the Fund. Pursuant to the Investment Advisory Agreement, the
Investment Adviser, in accordance with the Fund's stated investment objective,
policies and restrictions, makes recommendations to the Manager with respect to
the Fund's investments and, upon instructions given by the Manager as to
suitable securities for investment by the Fund, transmits purchase and sale
orders and select brokers and dealers to execute portfolio transactions on
behalf of the Fund.
NOTE 3. TRANSACTIONS WITH AFFILIATES
For the six months ended April 30, 2003, Deutsche Bank AG, the German parent of
the Manager and Investment Adviser, and its affiliates received $5,665 in
brokerage commissions as a result of executing agency transactions in portfolio
securities on behalf of the Fund.
Certain officers of the Fund are also officers of either the Manager or Deutsche
Bank AG.
The Fund pays each Director not affiliated with the Manager retainer fees plus
specified amounts for attended board and committee meetings.
NOTE 4. PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short-term investments,
for the six months ended April 30, 2003 were $30,651,078 and $31,094,785,
respectively.
The cost of investments at April 30, 2003 was $111,486,880 for United States
Federal income tax purposes. Accordingly, as of April 30, 2003, net unrealized
appreciation of investments aggregated $26,549,121, of which $32,767,141 and
$6,218,020 related to unrealized appreciation and depreciation, respectively.
For United States Federal income tax purposes, the Fund had a capital loss carry
forward at October 31, 2002 of approximately $27.8 million, of which $6.0
million, $15.0 million and $6.8 million will expire in 2006, 2009 and 2010,
respectively. No capital gains distribution is expected to be paid to
shareholders until future net gains have been realized in excess of such carry
forward.
NOTE 5. CAPITAL
During the six months ended April 30, 2003 and the year ended October 31, 2002,
the Fund purchased 84,300 and 201,600 of its shares of common stock on the open
market at a total cost of $1,189,090 and $2,534,344, respectively. The weighted
average discount of these purchases comparing the purchase price to the net
asset value at the time of purchase was 15.3% and 16.9%, respectively. These
shares are held in treasury.
NOTE 6. SUBSEQUENT EVENT
On June 24, 2003 the Fund's shareholders approved changes to its investment
policies to permit expanded investment in Russia. The name of the Fund is
changed to The Central Europe and Russia Fund, Inc.
13
THE CENTRAL EUROPEAN EQUITY FUND, INC.
FINANCIAL HIGHLIGHTS (UNAUDITED)
--------------------------------------------------------------------------------
Selected data for a share of common stock outstanding throughout each of the
periods indicated:
FOR THE SIX
MONTHS ENDED
APRIL 30, FOR THE YEARS ENDED OCTOBER 31,
--------------------------------------------------------------
2003 2002 2001 2000 1999 1998
-------- -------- -------- -------- -------- --------
Per share operating performance:
Net asset value:
Beginning of period .......................... $ 15.93 $ 13.83 $ 16.14 $ 15.99 $ 15.74 $ 28.00
-------- -------- -------- -------- -------- --------
Net investment income (loss) ................. (.01) (.07) .10 (.09) (.08) .13
Net realized and unrealized gain (loss) on
investments and foreign
currency transactions ..................... 2.04 2.37 (2.70) (.38) .09 (6.18)
-------- -------- -------- -------- -------- --------
Increase (decrease) from
investment operations ..................... 2.03 2.30 (2.60) (.47) .01 (6.05)
-------- -------- -------- -------- -------- --------
Increase resulting from
share repurchases ......................... .03 .06 .29 .62 .40 .82
-------- -------- -------- -------- -------- --------
Distributions from net
investment income ......................... -- (.10) -- -- (.13) (.01)
Distributions from net realized
foreign currency gains .................... -- (.13) -- -- (.01) --
Distributions from net realized
short-term capital gains .................. -- -- -- -- -- (1.54)
Distributions from net realized
long-term capital gains ................... -- -- -- -- -- (5.02)
-------- -------- -------- -------- -------- --------
Total distributions+ ......................... -- (.23) -- -- (.14) (6.57)
-------- -------- -------- -------- -------- --------
Dilution in NAV from dividend
reinvestment .............................. -- (.03) -- -- (.02) (.46)
-------- -------- -------- -------- -------- --------
Net asset value:
End of period ............................. $17.99 $ 15.93 $ 13.83 $ 16.14 $ 15.99 $ 15.74
======== ======== ======== ======== ======== ========
Market value:
End of period ............................. $14.80 $ 13.25 $ 10.95 $ 11.875 $ 12.50 $13.0625
Total investment return for the period:++
Based upon market value ................... 11.70% 23.43% (7.79)% (5.00)% (3.29)% (22.89)%
Based upon net asset value ................ 12.93% 17.05% (14.31)% .94% 2.48% (26.09)%
Ratio to average net assets:
Total expenses before custody credits* .... 1.51%** 1.55% 1.66% 1.37% 1.44% 1.20%
Net investment income (loss) .............. (.11)%** (.44)% .63% (.44)% (.44)% .56%
Portfolio turnover ........................... 23.69% 57.77% 57.83% 59.17% 60.35% 97.48%
Net assets at end of period (000's omitted) .. $141,283 $126,467 $111,213 $140,923 $157,265 $173,825
----------
+For U.S. tax purposes, total distributions consisted of:
Ordinary income -- $0.23 -- -- $0.14 $1.55
Long term capital gains -- -- -- -- -- 5.02
----- ----- ----- ----- ----- -----
-- $0.23 -- -- $0.14 $6.57
----- ----- ----- ----- ----- -----
++ Total investment return based on market value is calculated assuming that
shares of the Fund's common stock were purchased at the closing market price
as of the begin-ning of the year, dividends, capital gains and other
distributions were reinvested as provided for in the Fund's dividend
reinvestment plan and then sold at the closing market price per share on the
last day of the year. The computation does not reflect any sales commission
investors may incur in purchasing or selling shares of the Fund. The total
investment return based on the net asset value is similarly computed except
that the Fund's net asset value is substituted for the closing market value.
* The custody credits are attributable to interest earned on U.S. cash
balances. The ratios of total expenses after custody credits to average net
assets are 1.50%, 1.54%, 1.62%, 1.35%, 1.43% and 1.17% for 2003, 2002, 2001,
2000, 1999 and 1998, respectively.
** Annualized.
See Notes to Financial Statements.
14
EXECUTIVE OFFICES
345 PARK AVENUE, NEW YORK, NY 10154
(FOR LATEST NET ASSET VALUE, SCHEDULE OF THE FUND'S LARGEST HOLDINGS, DIVIDEND
DATA AND SHAREHOLDER INQUIRIES, PLEASE CALL 1-800-437-6269 IN THE U.S. OR
617-443-6918 OUTSIDE OF THE U.S.)
MANAGER
DEUTSCHE BANK SECURITIES INC.
INVESTMENT ADVISER
DEUTSCHE ASSET MANAGEMENT INTERNATIONAL GMBH
CUSTODIAN AND TRANSFER AGENT
INVESTORS BANK & TRUST COMPANY
LEGAL COUNSEL
SULLIVAN & CROMWELL LLP
DIRECTORS AND OFFICERS
CHRISTIAN STRENGER
CHAIRMAN AND DIRECTOR
DETLEFBIERBAUM
DIRECTOR
JOHN A. BULT
DIRECTOR
RICHARDR. BURT
DIRECTOR
FRED H. LANGHAMMER
DIRECTOR
EDWARD C. SCHMULTS
DIRECTOR
EGGERT VOSCHERAU
DIRECTOR
ROBERT H. WADSWORTH
DIRECTOR
WERNER WALBROL
DIRECTOR
RICHARD T. HALE
PRESIDENT AND CHIEF EXECUTIVE OFFICER
HANSPETER ACKERMANN
CHIEF INVESTMENT OFFICER
ROBERT R. GAMBEE
CHIEF OPERATING OFFICER AND SECRETARY
JOSEPH M. CHEUNG
CHIEF FINANCIAL OFFICER AND TREASURER
HONORARY DIRECTOR
OTTO WOLFF von AMERONGEN
--------------------------------------------------------------------------------
VOLUNTARY CASH PURCHASE PROGRAM
AND DIVIDEND REINVESTMENT PLAN
The Fund offers stockholders a Voluntary Cash Purchase Program and Dividend
Reinvestment Plan ("Plan") which provides for optional cash purchases and for
the automatic reinvestment of dividends and distributions payable by the Fund in
additional Fund shares. Plan participants may invest as little as $100 in any
month and may invest up to $36,000 annually. The Plan has been amended to allow
enrollment in the Plan by making an initial cash deposit of at least $250 with
the plan agent. Share purchases are combined to receive a beneficial brokerage
fee. A brochure is available by writing or telephoning the plan agent:
Investors Bank & Trust Company
Shareholder Services
P.O. Box 9130
Boston, MA 02117
Tel. 1-800-437-6269
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
This report, including the financial statements herein, is transmitted to the
shareholders of The Central European Equity Fund, Inc. for their information.
This is not a prospectus, circular or representation intended for use in the
purchase of shares of the Fund or any securities mentioned in this report. The
information contained in the letter to shareholders, the interview with the
chief investment officer and the report from the investment adviser and manager
in this report is derived from carefully selected sources believed reasonable.
We do not guarantee its accuracy or completeness, and nothing in this report
shall be construed to be a representation of such guarantee. Any opinions
expressed reflect the current judgment of the author, and do not necessarily
reflect the opinion of Deutsche Bank AG or any of its subsidiaries and
affiliates.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Fund may purchase at market prices from time to
time shares of its common stock in the open market.
Comparisons between changes in the Fund's net asset value per share and changes
in the CECE and RTX indices should be considered in light of the Fund's
investment policy and objectives, the characteristics and quality of the Fund's
investments, the size of the Fund and variations in the foreign currency/dollar
exchange rate.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
[GRAPHIC OMITTED]
CEE
LISTED
NYSE
--------------------------------------------------------------------------------
Please note that the Fund is producing
monthly newsletters which are
e-mailed in Acrobat. If you would
like to receive these please call
our Shareholder Services Department:
1-800-437-6269 ext. 0
and a representative will take your request.
15
THE CENTRAL EUROPE AND RUSSIA FUND, INC. (THE "REGISTRANT")
FORM N-CSR
FOR THE REPORTING PERIOD ENDED 4/30/03
ITEM 9
The Chief Executive and Financial Officers concluded that the
Registrant's Disclosure Controls and Procedures are effective based on the
evaluation of the Disclosure Controls and Procedures as of a date within 90 days
of the filing date of this report.
During the six month period ended April 30, 2003, there were no changes
in the Registrant's internal controls over financial reporting that have
affected, or are reasonably likely to materially affect, these internal controls
over financial reporting.
Date: June 27, 2003
----------------------------------------
The Central Europe and Russia Fund, Inc.
CHIEF EXECUTIVE OFFICER
SECTION 906 CERTIFICATION UNDER SARBANES OXLEY ACT
I, Richard T. Hale, certify that:
1. I have reviewed this report on Form N-CSR of The Central Europe and Russia
Fund, Inc. (the "Company");
2. Based on my knowledge and pursuant to 18 U.S.C. ss. 1350, the periodic
report on Form N-CSR (the "Report") fully complies with the requirements of
ss. 13 (a) or ss. 15 (d), as applicable, of the Securities Exchange Act of
1934 and that the information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of
the Company.
Date: June 27, 2003
/S/ Richard T. Hale
----------------------------
Richard T. Hale
Chief Executive Officer
The Central Europe and Russia Fund, Inc.
CHIEF EXECUTIVE OFFICER
FORM N-CSR CERTIFICATION UNDER SARBANES OXLEY ACT
I, Richard T. Hale, certify that:
1. I have reviewed this report on Form N-CSR of The Central Europe
and Russia Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in
this report;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940) and internal control over financial reporting
(as defined in Rule 30a-3(d) under the Investment Company Act of
1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of a date within 90 days prior to the filing date
of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed
to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability
to record, process, summarize, and report financial information;
and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: June 27, 2003
/S/ Richard T. Hale
------------------------------
Richard T. Hale
Chief Executive Officer
The Central Europe and Russia Fund, Inc.
CHIEF FINANCIAL OFFICER
SECTION 906 CERTIFICATION UNDER SARBANES OXLEY ACT
I, Joseph M. Cheung, certify that:
1. I have reviewed this report on Form N-CSR of The Central Europe and Russia
Fund, Inc. (the "Company");
2. Based on my knowledge and pursuant to 18 U.S.C. ss. 1350, the periodic
report on Form N-CSR (the "Report") fully complies with the requirements of
ss. 13 (a) or ss. 15 (d), as applicable, of the Securities Exchange Act of
1934 and that the information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of
the Company.
Date: June 27, 2003
/S/ Joseph M. Cheung
----------------------------
Joseph M. Cheung
Chief Financial Officer
The Central Europe and Russia Fund, Inc.
CHIEF FINANCIAL OFFICER
FORM N-CSR CERTIFICATION UNDER SARBANES OXLEY ACT
I, Joseph M. Cheung, certify that:
1. I have reviewed this report on Form N-CSR of The Central Europe
and Russia Fund, Inc.;
2. Based on my knowledge, this report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other
financial information included in this report, fairly present in
all material respects the financial condition, results of
operations, changes in net assets, and cash flows (if the
financial statements are required to include a statement of cash
flows) of the registrant as of, and for, the periods presented in
this report;
4. The registrant's other certifying officer(s) and I are responsible
for establishing and maintaining disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment
Company Act of 1940) and internal control over financial reporting
(as defined in Rule 30a-3(d) under the Investment Company Act of
1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known
to us by others within those entities, particularly during the
period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused
such internal control over financial reporting to be designed
under our supervision, to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure
controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and
procedures, as of a date within 90 days prior to the filing date
of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the
registrant's most recent fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s) and I have disclosed
to the registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent functions):
(a) All significant deficiencies and material weaknesses in the design
or operation of internal control over financial reporting which
are reasonably likely to adversely affect the registrant's ability
to record, process, summarize, and report financial information;
and
(b) Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal control over financial reporting.
Date: June 27, 2003
/S/ Joseph M. Cheung
--------------------------
Joseph M. Cheung
Chief Financial Officer
The Central Europe and Russia Fund, Inc.