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 number: 811-5994
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THE FRANCE GROWTH FUND, INC.
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(Exact name of registrant as specified in charter)
51 West 52nd Street, New York, New York 10019-6114
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(Address of principal executive offices) (Zip code)
Paul Schubert
UBS Global Asset Management(US)
Inc.
51 West 52nd Street
New York, NY 10019-6114
(Name and address of agent for
service)
Copy to:
Margaret Bancroft, Esq.
Dechert LLP
30 Rockefeller Plaza
New York, NY 10012
Registrant's telephone number, including area code: 212-882 5000
Date of fiscal year end: December 31, 2003
Date of reporting period: June 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
THE FRANCE GROWTH FUND, INC.
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Jean A. Arvis Chairman of the Board of Directors
Thomas C. Barry Director
John A. Bult Director
Pierre H.R. Daviron Director
Serge Demoliere Director
Dirk Kipp Director
Michel Longchampt Director
Gregory L. Melville Director
Michel A. Rapaccioli Director
Moritz Sell Director
John W. Spurdle, Jr. Director
MANAGEMENT
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Pierre H.R. Daviron President and Chief Investment Officer
Steven M. Cancro Vice President and Secretary
Paul H. Schubert Treasurer
ADMINISTRATOR
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UBS Global Asset Management (US) Inc.
51 West 52nd Street
New York, New York 10019
CUSTODIAN
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Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
SHAREHOLDER SERVICING AGENT
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PFPC Inc.
101 Federal Street, 4th FI
Boston, MA 02110
INDEPENDENT AUDITORS
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PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
COUNSEL
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Dechert LLP
30 Rockefeller Plaza
New York, NY 10112
The France Growth Fund, Inc. [LOGO]
237 Park Avenue, Suite 900
New York, New York 10017
[LOGO] THE
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FRANCE
------------------------
GROWTH
------------------------
FUND, INC.
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SEMI-ANNUAL REPORT
FOR THE SIX MONTHS ENDED
JUNE 30, 2003
[PHOTO]
In this centennial year of the Tour de France, Lance Armstrong became the first
American to join an elite club of European cyclists to win a fifth consecutive
race. In his most closely contested victory to date, Armstrong beat Jan Ullrich
by just over a minute. In a sport where no solo rider can survive an entire tour
by himself, Armstrong leads one of the most dynamic and loyal teams in the
peloton. The Management of the France Growth Fund salutes his great achievement
and, inspired by Lance's dedication and relentless work ethic, will strive to
ensure that our shareholders join him as winners in France.
The France Growth Fund, Inc.
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General Information
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THE FUND
The France Growth Fund, Inc. (the "Fund") is a diversified, closed-end
management investment company the shares of which trade on the New York Stock
Exchange ("NYSE"). The Fund's investment objective is long-term capital
appreciation through investment primarily in French equity securities. Other
investments may include listed French debt securities, unlisted French equity
and debt securities and certain publicly traded equity and debt securities
issued by non-French Western European issuers.
THE INVESTMENT ADVISER
At a meeting of the Board of Directors held on October 21, 2002, the Board of
Directors approved the internalization of the portfolio management of the Fund,
effective November 1, 2002 and named Pierre H.R. Daviron, a member of the Board,
as President and Chief Investment Officer of the Fund. Mr. Daviron has full
discretionary power to invest and reinvest the assets of the Fund in compliance
with the investment objectives and policies of the Fund set forth in the Fund's
1990 Prospectus and as further established by the Fund's Directors.
SHAREHOLDER INFORMATION
Daily market prices for the Fund's shares are published in the NYSE Composite
Transactions section of major newspapers under the designation "France". The
Fund's closing daily net asset value is available over the NASDAQ Mutual Fund
Quotation Service. The Fund's NYSE trading symbol is "FRF".
Net asset value and market price information is published each Monday in THE
WALL STREET JOURNAL, each Sunday in THE NEW YORK TIMES, and each Saturday in
BARRON'S, as well as in other newspapers in tables captioned "Publicly Traded
Funds" or "Closed-End Funds". Inquiries regarding registered shareholder
accounts may be directed to the Fund's transfer agent, dividend paying agent and
registrar, PFPC Inc. at (800) 331-1710. Please also visit the Fund's website at
www.FranceGrowthFund.com for additional information about the Fund.
ANNUAL SHAREHOLDERS' MEETING
The Fund's annual meeting of shareholders was held on June 24, 2003. At that
meeting, shareholders voted: (1) to re-elect Thomas C. Barry, Gregory L.
Melville and Moritz Sell as Directors to serve for a three-year term expiring at
the 2006 annual meeting; and (2) to approve a shareholder proposal recommending
that the Board of Directors liquidate the Fund or otherwise enable shareholders
to realize net asset value for their shares. The certified voting results for
these two proposals are as follows:
1. Election of Directors:
For Withheld Authority
--------- ------------------
Thomas C. Barry .......................... 7,085,215 3,775,762
Gregory L. Melville ...................... 6,812,241 4,048,736
Moritz Sell .............................. 6,810,712 4,050,265
In addition to the elected Directors, Jean A. Arvis, John A. Bult, Walter J.P.
Curley, Pierre H.R. Daviron, Serge Demoliere, Dirk Kipp, Michel Longchampt,
Michel A. Rapaccioli and John W. Spurdle continue to serve as Directors of the
Fund.
The France Growth Fund, Inc.
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General Information (continued)
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2. A recommendation to the Board to liquidate the Fund or otherwise enable
shareholders to realize net asset value for their shares:
For Against Abstain
---------- ------------ --------
5,459,954 2,453,085 40,740
DISTRIBUTIONS AND DIVIDEND REINVESTMENT PLAN
Pursuant to the Fund's Dividend Reinvestment Plan (the "Plan"), shareholders
whose shares of Common Stock are registered in their names will have all
dividends and capital gain distributions (collectively referred to as
"distributions") automatically reinvested in additional shares of Common Stock
of the Fund by the agent for the Plan and dividend paying agent, PFPC Inc. (the
"Dividend Agent"), unless such shareholders elect to receive distributions in
cash. Shareholders who elect to receive distributions in cash (other than those
distributions payable solely in Common Stock) will receive a check in U.S.
dollars mailed directly to such shareholders by the Dividend Agent on or about
the date declared by the Board of Directors as the payment date for each such
distribution. Shareholders who prefer not to have their distributions
automatically reinvested should notify the Fund in writing c/o PFPC Inc., P.O.
Box 43027, Providence, Rhode Island 02940-3027 or by calling (800) 331-1710. If
a shareholder has not previously elected to receive cash distributions and the
Dividend Agent does not receive notice of an election to receive cash
distributions from the shareholder prior to the record date of any distribution,
the shareholder will automatically receive such distribution in additional
shares of Common Stock of the Fund.
Distributions with respect to shares registered in the name of a broker or
nominee will be reinvested under the Plan unless that service is not provided by
the broker or nominee or unless the shareholder elects to receive distributions
in cash by giving notice of such election as provided above. A shareholder whose
shares are held by a broker or nominee that does not provide a dividend
reinvestment program may be required to have his shares registered in his own
name in order to participate in the Plan. Shareholders whose shares are held in
the name of the broker or nominee should contact the broker or nominee for
details.
If the Board of Directors of the Fund declares a distribution payable in cash,
non-participants in the Plan will receive cash and participants in the Plan will
receive the equivalent in Common Stock. Whenever the Fund's market price is
equal to or exceeds net asset value at the time Common Stock is valued for the
purpose of determining the number of shares equivalent to the cash distribution,
participants will be issued shares of Common Stock at net asset value or, if the
net asset value is less than 95% of the market price on the valuation date, then
at 95% of the market price. The valuation date will be the distribution payment
date, or if that date is not a trading day on the NYSE, the immediately
preceding trading day. If net asset value exceeds the market price of the Common
Stock at such time, or if the Fund should declare a dividend or capital gain
distribution payable in cash, the Dividend Agent will, as agent for the
participants, purchase shares of Common Stock in the open market, on the NYSE or
elsewhere, for the participants' account on, or in any event within 30 days
after, the payment date. In such case, the price of the shares for each
participant will be the average market price at which the shares have been
purchased by the Dividend Agent. If, before the Dividend Agent has completed its
open market purchases, the market price exceeds the net asset value of a share
of Common Stock, the average per share purchase price paid by the Dividend Agent
2
The France Growth Fund, Inc.
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General Information (concluded)
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may exceed the net asset value of the Common Stock, resulting in the acquisition
of fewer shares of Common Stock than if the distribution had been paid in Common
Stock issued by the Fund.
Participants in the Plan may withdraw from the Plan by providing written notice
to the Dividend Agent at least 30 days prior to the applicable dividend payment
date. When a participant withdraws from the Plan, or upon termination of the
Plan as provided below, certificates for full shares credited to the account
under the Plan will, upon request, be issued. Each participant has the right to
receive certificates for full shares of Common Stock owned by such participant.
Whether or not a participant requests a certificate for full shares, a cash
payment will be made for any fraction of a share credited to such account.
The Dividend Agent will maintain all shareholder accounts in the Plan and
furnish written confirmations of all transactions in the accounts, including
information required by shareholders for personal and tax records. Common Stock
in the account of each Plan participant will be held by the Dividend Agent in
non-certificated form in the name of the participant, and each shareholder's
proxy will include those shares purchased pursuant to the Plan. The Dividend
Agent will distribute all proxy soliciting material to participating
shareholders.
There will be no charge to participants for reinvesting distributions. The
Dividend Agent's fees for the handling of the reinvestment of distributions will
be borne by the Fund. There will be no brokerage charges with respect to Common
Stock issued directly by the Fund as a result of dividends or capital gain
distributions payable either in Common Stock or in cash. However, each
participant's account will be charged a pro-rata share of brokerage commissions
incurred with respect to the Dividend Agent's open market purchases in
connection with the reinvestment of distributions.
The automatic reinvestment of distributions will not relieve participants of any
income tax which may be payable on such distributions. In the case of non-U.S.
participants whose distributions are subject to United States income tax
withholding and in the case of any participants subject to 30% federal backup
withholding, the Dividend Agent will reinvest distributions after deducting the
amount required to be withheld.
Experience under the Plan may indicate that changes are desirable. Accordingly,
the Fund reserves the right to amend or terminate the Plan, as applied to any
distribution paid subsequent to notice of the change sent to the members of the
Plan, at least 90 days before the record date for such distribution. The Plan
may also be amended or terminated by the Fund by at least 90 days' written
notice to members of the Plan. Participants may obtain additional information
about the Plan from the Dividend Agent. All correspondence and inquiries
concerning the Plan should be directed to the Dividend Agent c/o PFPC Inc., P.O.
Box 43027, Providence, Rhode Island 02940-3027 or by calling (800) 331-1710.
OTHER INFORMATION
During the six months ended June 30, 2003, there has been no (i) material
changes in the principal risk factors associated with investment in the Fund,
(ii) material changes in the Fund's investment objectives or policies or (iii)
change in the persons primarily responsible for the day-to-day management of the
Fund.
3
The France Growth Fund, Inc.
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Letter to Shareholders
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August 27, 2003
Dear Fellow Stockholders:
Corporate governance has been an important focus of the Board of Directors of
The France Growth Fund for the first half of this year. Together with the rest
of corporate America, the Fund has been required to implement the highly
detailed provisions of the Sarbanes-Oxley Act, and this is being done at a
substantial cost to the Fund. The project was begun in January with the creation
by the Board of a Corporate Governance Committee to make recommendations to the
Board on devising stronger Audit Committee procedures and other oversight
requirements. At the recommendation of this Committee, the Board also reached an
agreement with the Fund's largest shareholder, Bankgesellschaft Berlin, to
promote the continuation of the Fund as an investment vehicle for the benefit of
all the Fund's stockholders. Part of this Agreement included reducing the size
of the Board over the next three years and ensuring that the Board and
Bankgesellschaft Berlin are in agreement on major issues presented to
stockholders.
In the spirit of this Agreement, the Board unanimously presented a slate of
three directors for reelection at the June stockholders meeting, which met with
strong voter support. After several years of contested elections, the Board is
pleased to announce the reelection of Directors Thomas Barry, Greg Melville and
Moritz Sell, who will serve as Directors for the next three years.
Another recent development is the receipt of a no action letter from the
Securities and Exchange Commission allowing the Fund to invest in foreign
investment companies under certain specific guidelines. Management is reviewing
the parameters of such a program and will make a proposal to the Board for its
consideration.
The Board was disappointed that non-binding Stockholder Proposal 2 was approved
by a majority of the votes cast by stockholders at the June stockholders
meeting. Proposal 2 advocated that the Board consider liquidation of the Fund or
take other action to give stockholders the opportunity to realize net asset
value. The Board intends to respond to concerns expressed by stockholders and
will consider various strategic options at its next meeting in October. As you
will note on the following pages of this Semi-Annual Report outlining the
history of the Fund, the Board has taken consistent steps over time to utilize
market trends and maximize stockholder value in the timing and frequency of its
distributions and tender offers. In this spirit, I have asked Management in
consultation with Board members to develop various strategic options designed to
provide appropriate returns to investors, insuring the continuation of the Fund
while allowing it to remain economically viable.
We have great confidence that Management will be able to successfully implement
any strategy selected by the Board.
Jean A. Arvis
Chairman of the Board
4
The France Growth Fund, Inc.
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Financial History of the Fund
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The Fund commenced investment operations in May 1990 after an initial public
offering of 11.5 million shares were sold on the New York Stock Exchange. The
net proceeds of the offering were approximately $127 million, which were then
invested in the French equity markets. In April 1994 the Fund issued a rights
offering for an additional 3.8 million shares, which was fully subscribed and
yielded net proceeds of $38.8 million.
In 1998, the Directors became convinced that the time was right to realize
long-term capital gains for a distribution to shareholders. As such, a plan was
developed to distribute a minimum of 12% of the Fund's NAV over a three year
period, in the form of long-term capital gains (to the extent possible). As
demonstrated in the charts on the following page, this decision allowed the Fund
to sell holdings at levels close to the top of the market, returning to
shareholders more than $150 million.
In January 2001, in further recognition of the request of some shareholders for
a return of capital, the Board conducted a tender offer for 20% (approximately 3
million) of its shares. This tender was fully subscribed and as a result
returned over $32 million to shareholders, leaving 12.1 million shares
outstanding.
Over the life of the Fund, interest, dividends, capital gains distributions and
tender offers have amounted to over $261.5 million. The current NAV of the Fund
is $87.8 million.
5
The France Growth Fund, Inc.
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Financial History of the Fund (concluded)
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DISTRIBUTIONS--1990-2003
[Table below represents a bar graph in the original report.]
DISTRIBUTIONS*
Dividend
Distributed Rights Issue Tender Offer
----------- ------------ ------------
1990 6 0 0
1991 1.2 0 0
1992 1.6 0 0
1993 5 0 0
1994 8.9 37 0
1995 2 0 0
1996 13.8 0 0
1997 14.7 0 0
1998 37.2 0 0
1999 48.9 0 0
2000 76.1 0 0
2001 14.1 0 32
2002 0 0 0
2003 0 0 0
TOTAL NET ASSETS*
[Table below represents a line chart in the original report.]
NAV--1990-2003
Total Net Assets
----------------
May-90 127
Dec-90 118.68
Dec-91 121.67
Dec-92 121.095
Dec-93 148.81
Dec-94 168.338
Dec-95 177.546
Dec-96 201.638
Dec-97 218.671
Dec-98 251.817
Dec-99 277.332
Mar-00 326.228
Dec-00 181.985
12/2001 104.302
12/2002 80.52
3/3/2003 66.034
6/3/2003 87.763
*ALL FIGURES IN MILLIONS OF USD
6
The France Growth Fund, Inc.
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Management Remarks (continued)
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Dear Shareholder:
The France Growth Fund assets increased from $80.5 million to $87.8 million
during the first half of 2003. This is the first semi-annual increase in assets
in three years. The table below shows the Fund's market price and net asset
value per share throughout 2002 and the first half of 2003.
----------------------------------------------------
NET ASSET VALUE
SHARE PRICE PER SHARE
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12/31/2001 $7.33 $8.64
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6/30/2002 $6.95 $8.15
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12/31/2002 $5.70 $6.67
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6/30/2003 $6.28 $7.27
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On November 1, 2002, the Fund assumed responsibility for its own portfolio
management, without the assistance of an outside advisor. The table below
presents the performance of the Fund since it has been self-managed.
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TOTAL RETURN SHARE PRICE NET ASSET VALUE BENCHMARK*
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10/31/02 to 6/30/03 11.0% 10.9% 12.7%
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12/31/02 to 6/30/03 10.2% 9.1% 11.2%
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* The Board of Directors adopted the MSCI France Index (Net, USD) as the
Fund's benchmark beginning November 1, 2002
INVESTMENT POLICY
The objective of the Fund is to generate investment return, after expenses, in
excess of the MSCI France Index. We believe this can only be achieved by
investing in companies with strong competitive positions, which are creating
value for shareholders by generating returns well in excess of their cost of
capital, and by buying these stocks when their market value is substantially
lower than their intrinsic value. Disciplined stock selection will justify the
construction of a concentrated portfolio which has a relatively low correlation
to its benchmark.
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10/31/2002 12/31/2002 6/30/2003
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PERCENT NUMBER OF PERCENT NUMBER OF PERCENT NUMBER OF
OF NET ASSETS SECURITIES OF NET ASSETS SECURITIES OF NET ASSETS SECURITIES
- ----------------------------------------------------------------------------------------------------
France Large Cap 87.7% 42 82.8% 27 79.0% 26
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Small Cap* 4.4% 8 6.8% 7 10.4% 12
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Europe 6.5% 4 7.8% 7 9.9% 9
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Cash/Other 1.4% -- 2.6% -- 0.7% --
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Total 100% 54 100% 41 100.0% 47
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* Companies with market capitalization of less than Euro 2.5 billion.
7
The France Growth Fund, Inc.
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Management Remarks (continued)
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Since management was internalized on November 1, 2002 the portfolio has been
significantly refocused and the exposure to large French companies has been
reduced. We have been selectively building positions in smaller companies that
we believe offer strong fundamentals and compelling valuations. We have also
taken full advantage, within the limits set in the Fund's initial 1990
Prospectus, of investment opportunities in Western Europe outside France. Our
strategy of refocusing and concentrating the portfolio however remains
constrained by regulatory and diversification rules.
During the first half of 2003, the French equity market and the Fund experienced
unusual volatility, as shown by the table below:
--------------------------------------------------------
BENCHMARK*
- ----------------------------------------------------------- NET ASSET VALUE
IN EUROS IN U.S. DOLLARS IN U.S. DOLLARS
- --------------------------------------------------------------------------------
12/31/02 to 6/30/03 1.6% 11.2% 9.1%
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12/31/02 to 3/12/03 (22.0%) (18.1%) (18.0%)
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3/12/03 to 6/30/03 30.3% 35.7% 32.9%
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* MSCI France Index (Net, USD)
The market declined sharply from January 3, 2003 to March 12, 2003 as the
buildup to war in Iraq further dented business and consumer confidence. In the
second quarter, relief at initial military successes in Iraq and anticipation
that the positive effect of fiscal and monetary stimuli in the US and Europe
would lead to a self sustaining recovery provided a catalyst for a world-wide
recovery in stock prices. Interest rates continued to fall and investors
discounted a broad-based and strong profit recovery.
In this context the French equity market response to the world-wide rally was
somewhat subdued. French companies' fundamentals are perceived to be negatively
impacted by the strength of the euro which appreciated 9.5% against the US
dollar over the first half of the year. In addition, after a long period of
denial, the French government tackled some long delayed structural reforms. This
led to crippling strikes in the second quarter. The government however did not
lose its resolve, as it had done in the past, and pension reform was passed by
Parliament in July. We consider this most important as a milestone in tackling
long term issues and as potentially promising for French and other European
financial markets.
During the rally, investors' tolerance for risk increased and as usual in such
market circumstances, the stocks of lower quality companies rebounded more than
the stocks of stronger companies. Your Fund is focused on investing in quality
companies which will generate value over the longer term at a controlled level
of risk and in an environment where weaker companies were bid up by bottom
fishing investors, the Fund underperformed its benchmark. The Fund's beta
against its benchmark was approximately .5, as calculated over the period
January 1, 2003 to June 30, 2003.
FUND EXPENSES
The implementation of the provisions of the Sarbanes-Oxley Act and other
regulatory matters, as well as the activity of the newly created Corporate
Governance Committee and the full Board and resulted in significant and
unexpected total net expenses. Excluding those specific expenses which should
not recur in the second half, operating expense were in line with the planned
budget for the year.
8
The France Growth Fund, Inc.
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Management Remarks (continued)
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BENEFITS OF CAPITAL LOSS CARRY FORWARDS
As a result of the equity market decline of the previous years, the Fund has
suffered substantial net realized capital losses. The table below shows the
accumulated net realized and unrealized gain (loss) positions as of the
beginning and end of the six month fiscal period.
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ACCUMULATED NET UNREALIZED
REALIZED GAIN (LOSS)* GAIN (LOSS)* TOTAL*
- --------------------------------------------------------------------------------
1/1/2003 (38.1) (4.2) (42.3)
- --------------------------------------------------------------------------------
6/30/2003 (40.3) 4.9 (35.4)
- --------------------------------------------------------------------------------
* Amounts in $millions
These accumulated losses could provide considerable tax advantages to
shareholders of the Fund, as capital loss carry forward could be used to offset
the tax liability of future capital gains.
We are committed to creating value for shareholders through the disciplined
implementation of our investment strategy and the effective management of the
Fund's expenses. We believe that structural reform is taking hold in France and
that a new generation of global competitors are emerging that offer compelling
value to investors with a global perspective.
Pierre H.R. Daviron
President and Chief Investment Officer
9
The France Growth Fund, Inc.
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Management Remarks (concluded)
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AT JUNE 30, 2003, THE FUND'S TEN LARGEST HOLDINGS
REPRESENTED 53.8% OF NET ASSETS
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SECURITIES
- --------------------------------------------------------------------------------
TOTAL
FRANCE TELECOM
BNP PARIBAS
SANOFI SYNTHELABO
AXA
GROUPE DANONE
PERNOD RICARD
CREDIT AGRICOLE
SUEZ
AVENTIS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
PORTFOLIO ACTIVITY:
12/31/02 TO 6/30/03
- --------------------------------------------------------------------------------
LARGE CAP ALCATEL ARCELOR AVENTIS ACCOR
CNP BNP CARREFOUR ARCELOR
CREDIT AGRICOLE SANOFI DESSAULT SYSTEMES BOUYGUES
EURONEXT STMICRO HERMES DEXIA
FTE THALES LAFARGE SOCIETE GENERALE
PECHINEY WANADOO L'OREAL SODEXHO
PUBLICIS ORANGE THALES
VIVENDI UNIVERSAL
WANADOO
- --------------------------------------------------------------------------------
SMALL CAP AAREAL CEGEDIM HANNOVER RUCK
BACOU DAILOZ REXEL
BUSINESS OBJECTS URBIS
CARBONE LORRAINE YULE CATTO
ERAMET
FIMALAC
LAURUS
MEDION
- --------------------------------------------------------------------------------
10
The France Growth Fund, Inc.
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Portfolio of Investments
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
EQUITIES -- 97.37%
- --------------------------------------------------------------------------------
Shares Value
------ -------
FRANCE--89.40%
CONSUMER DISCRETIONARY--7.06%
6,000 Hermes International ........................... $ 846,961
47,500 Michelin ....................................... 1,857,977
30,000 Publicis Groupe ................................ 806,580
44,661 Rallye ......................................... 1,722,780
29,300 Trigano ........................................ 963,043
-----------
6,197,341
-----------
CONSUMER STAPLES--11.48%
11,000 Bonduelle ...................................... 879,519
24,000 Carrefou ....................................... 1,178,429
22,678 Groupe Danone .................................. 3,143,834
25,000 L'Oreal ........................................ 1,765,941
34,951 Pernod-Ricard .................................. 3,124,269
-----------
10,091,992
-----------
ENERGY--14.21%
82,434 Total Fina Elf ................................. 12,480,443
-----------
FINANCIALS--18.47%
204,833 Axa ............................................ 3,183,633
117,976 BNP Paribas .................................... 6,005,853
27,000 CNP Assurances ................................. 1,143,087
160,000 Credit Agricole ................................ 3,046,392
25,000 FIMALAC ........................................ 690,270
28,900 Unibail ........................................ 2,144,496
-----------
16,213,731
-----------
HEALTH CARE--11.58%
50,582 Aventis ........................................ 2,787,982
18,500 Cegedim ........................................ 842,820
40,000 Essilor International .......................... 1,614,311
43,000 MEDIDEP SA (a) ................................ 811,297
70,000 Sanofi Synthelabo .............................. 4,107,106
-----------
10,163,516
-----------
INDUSTRIALS--10.28%
250,000 Alcatel (a) .................................... 2,257,758
7,700 Bacou-Dalloz ................................... 755,627
13,934 Carbone Lorraine ............................... 379,118
26,100 Neopost ........................................ 1,110,990
35,466 Renault ........................................ 1,878,518
22,165 Rexel .......................................... 682,118
29,000 Vinci .......................................... 1,960,079
-----------
9,024,208
-----------
INFORMATION TECHNOLOGY--1.79%
30,000 Business Objects (a) ........................... 670,252
27,500 Dassault Systemes .............................. 904,829
-----------
1,575,081
-----------
MATERIALS--2.85%
2,500 Eramet ......................................... 71,040
8,927 Imerys ......................................... 1,302,244
6,922 Lafarge ........................................ 406,134
294 Lafarge
Rights expiring 07/01/03 (a) ................. 795
20,000 Pechiney ....................................... 719,261
-----------
2,499,474
-----------
TELECOM SERVICES--8.39%
263,500 France Telecom (a) ............................. 6,475,147
100,000 Orange (a) ..................................... 889,298
-----------
7,364,445
-----------
UTILITIES--3.29%
181,000 Suez ........................................... 2,886,088
-----------
TOTAL FRANCE EQUITIES .................................... 78,496,319
-----------
GERMANY--2.22%
CONSUMER DISCRETIONARY--0.84%
17,200 Medion ......................................... 742,040
-----------
FINANCIALS--1.38%
32,340 Aareal Bank .................................... 669,700
21,000 Hannover
Rueckversicherungs ........................... 543,588
-----------
1,213,288
-----------
TOTAL GERMANY EQUITIES ................................... 1,955,328
-----------
NETHERLANDS--4.88%
CONSUMER STAPLES--0.83%
465,000 Laurus (a) ..................................... 727,545
-----------
FINANCIALS--1.13%
40,000 Euronext ....................................... 993,529
-----------
INFORMATION TECHNOLOGY--2.92%
122,000 STMicroelectronics ............................. 2,562,880
-----------
TOTAL NETHERLANDS EQUITIES ............................... 4,283,954
-----------
11
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Portfolio of Investments (concluded)
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
EQUITIES--(CONCLUDED)
- --------------------------------------------------------------------------------
Shares Value
------ -------
SPAIN--0.92%
FINANCIALS--0.92%
105,000 Immobiliaria Urbis ............................. $ 810,550
-----------
UNITED KINGDOM--1.95%
INDUSTRIALS--0.92%
305,000 Serco Group .................................... 806,737
-----------
MATERIALS--1.03%
146,000 Yule Catto & Company ........................... 902,686
-----------
TOTAL UNITED KINGDOM EQUITIES .......................... 1,709,423
-----------
TOTAL INVESTMENTS
(cost--$82,356,157)--99.37% ............................... 87,255,574
OTHER ASSETS LESS LIABILITIES--0.63% ....................... 549,505
-----------
NET ASSETS (applicable to 12,072,000
shares; equivalent to $7.27 per
share)--100.00% .......................................... $87,805,079
===========
- ----------
(a) Non-income producing security.
See accompanying notes to financial statements.
12
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
ASSETS:
Investments in securities, at value (cost--$82,356,157) ... $ 87,255,574
Cash (including euros of $396,026 with a cost of $402,636) 512,483
Dividends receivable ...................................... 80,057
Receivable for investments sold ........................... 14,000
Receivable for avoir fiscal ............................... 181,765
Prepaid expenses and other assets ......................... 220,161
-------------
Total assets .......................................... 88,264,040
-------------
LIABILITIES:
Administration fee payable ................................ 10,274
Accrued expenses .......................................... 448,687
-------------
Total liabilities ..................................... 458,961
-------------
NET ASSETS:
Common stock, $0.01 par value; 12,072,000 shares issued and
outstanding (100,000,000 shares authorized) ............. 120,720
Additional paid-in-capital ................................ 122,598,142
Accumulated net investment income ......................... 527,809
Accumulated net realized loss ............................. (40,338,008)
Net unrealized appreciation of investments and other assets
and liabilities denominated in euros .................... 4,896,416
-------------
Net assets applicable to shares outstanding ............... $ 87,805,079
=============
NET ASSET VALUE PER SHARE ..................................... $7.27
=====
See accompanying notes to financial statements.
13
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends, including $174,143 of avoir fiscal (net of French
withholding taxes of $314,912) ........................... $ 1,709,202
Interest ................................................... 2,597 $ 1,711,799
----------- -----------
EXPENSES:
Legal fees ................................................. 247,367
Internalized fund operations, salaries and consultants ..... 243,227
Office space, general expenses and trading services ........ 127,098
Directors' expenses ........................................ 75,396
Custodian and accounting fees .............................. 70,907
Administration fees ........................................ 61,987
Reports to shareholders .................................... 53,245
Insurance expense .......................................... 53,073
Directors' fees ............................................ 52,125
Shareholder meetings and relations expense ................. 50,797
Audit fees ................................................. 47,965
New York Stock Exchange listing fee ........................ 16,625
Transfer agent fees ........................................ 12,308
Other expenses ............................................. 71,870
-----------
Total expenses ............................................. 1,183,990
-----------
Net investment income ...................................... 527,809
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments .............................................. (2,525,202)
Foreign currency transactions ............................ 249,012
Net change in unrealized appreciation/depreciation of:
Investments .............................................. 9,124,226
Other assets and liabilities denominated in euros ........ (42,839)
-----------
Net realized and unrealized gain on investments
and foreign currency transactions ........................ 6,805,197
-----------
NET INCREASE IN NET ASSETS FROM INVESTMENT OPERATIONS .......... $ 7,333,006
===========
See accompanying notes to financial statements.
14
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
FOR THE
SIX MONTHS ENDED FOR THE YEAR
JUNE 30, 2003 ENDED
(UNAUDITED) DECEMBER 31, 2002
---------------- -----------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income (loss) ..................................... $ 527,809 $ (1,228,762)
Net realized loss on investments, futures contracts, options
and foreign currency transactions .............................. (2,276,190) (27,882,560)
Net change in unrealized appreciation/depreciation of investments,
futures contracts, options and other assets and liabilities
denominated in euros ........................................... 9,081,387 5,313,471
------------- -------------
Total gain (loss) from investment operations ..................... 7,333,006 (23,797,851)
------------- -------------
NET ASSETS:
Beginning of period .............................................. 80,472,073 104,269,924
------------- -------------
End of period .................................................... $ 87,805,079 $ 80,472,073
============= =============
See accompanying notes to financial statements.
15
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements
June 30, 2003 (unaudited)
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The France Growth Fund, Inc. (the "Fund") was incorporated in the State of
Maryland on February 20, 1990 as a diversified, closed-end management investment
company.
The preparation of the financial statements in accordance with accounting
principles generally accepted in the United States of America requires Fund
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
those estimates. The following is a summary of significant accounting policies
followed by the Fund:
VALUATION OF INVESTMENTS--All securities for which market quotations are readily
available are valued at the last sales price prior to the time of determination
on the principal exchange on which they are traded or, if no sales price is
available at that time, at the last quoted bid price for such securities
(however, if bid and asked quotations are available, at the mean between the
last current bid and asked prices, rather than the last quoted bid price).
Options are valued in a like manner, as are futures contracts, except that sales
of open futures contracts are valued using the closing settlement price or, in
the absence of such price, the most recently quoted asked price. Forward foreign
currency exchange contracts are valued at the current cost of covering or
offsetting the contracts. Securities and assets for which market quotations are
not readily available (including unlisted securities and securities that are not
readily marketable) are valued at fair value as determined in good faith by, or
under the direction of the Fund's Board of Directors. There were no securities
held by the Fund for which market quotations were not readily available at June
30, 2003. Short-term investments having a maturity of 60 days or less are valued
at amortized cost, or by amortizing their value on the 61st day prior to
maturity if their term to maturity from date of purchase is greater than 60
days, unless the Board of Directors determines that such values do not represent
the fair value of such investments. Assets and liabilities initially expressed
in euros are translated into U.S. dollars at the noon buying rate in New York
for cable transfers payable in euros (the "Federal Reserve Exchange Rate"), as
certified for customs purposes by the Federal Reserve Bank of New York as quoted
on the day of such translation, or if no such rate is quoted on such date, the
previously quoted Federal Reserve Exchange Rate, or at such other appropriate
rate as may be determined by the Board of Directors.
U.S. FEDERAL TAX STATUS--The Fund intends to distribute all of its taxable
income and to comply with the other requirements of the U.S. Internal Revenue
Code of 1986, as amended, applicable to regulated investment companies.
Accordingly, no provision for U.S. federal income taxes is required. In
addition, by distributing substantially all of its ordinary income and long-term
capital gains, if any, during each calendar year, the Fund intends not to be
subject to U.S. federal excise tax.
At December 31, 2002, the Fund had a net capital loss carryforward of
$26,897,148 which will expire as follows: $527,910 on December 31, 2009 and
$26,369,238 on December 31, 2010. The loss carryforward is available as a
reduction, to the extent provided in the regulations, of future net realized
capital gains. To the extent such losses are used, as provided in the
regulations, to offset future net realized capital gains, it is probable those
gains will not be distributed. In accordance with U.S. Treasury regulations, the
Fund has elected to defer $9,635,941 of realized capital losses arising after
October 31, 2002. Such losses are treated for tax purposes as arising on January
1, 2003.
16
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
FRENCH WITHHOLDING TAX--Generally dividend income from French companies is
subject to French withholding tax at a rate of 15%. Pursuant to the income tax
treaty between the U.S. and France, the Fund may be entitled to recover a credit
("avoir fiscal") for French taxes paid by a French company with respect to such
dividend, currently equal to 8.5% of the dividend amount (10% credit less 15%
withholding tax on such credit). In certain circumstances, such as if a
precompte tax (the tax on dividends paid out of a French company's profits that
have not been subject to French corporate income tax at the standard rate or
have been earned more than five years ago) is assessed on the dividend, the Fund
may be entitled to recover up to 50% avoir fiscal, currently equal to 42.5% (50%
credit less 15% withholding tax on such credit). The Fund may make such claims
for the refunds to the extent it qualifies for the benefit under the income tax
treaty. Effective January 1, 2002, the definition of a dividend has been
narrowed to include only (1) dividends decided by the French company's annual
general meeting where the company's accounts are approved and (2) interim
distributions that qualify as dividends and are decided before the annual
general meeting. Although this narrowed definition gives French companies some
flexibility with planning around the precompte tax, it potentially decreases the
total tax credit available for nonresident investors. Interest income and gains
on the sale or exchange of stock in French companies realized by the Fund are
not subject to French withholding tax.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME--Investment transactions are
recorded on the trade date (the date on which the order to buy or sell is
executed). Realized gains and losses from investments and foreign currency
transactions are calculated on the identified cost basis. Interest income is
recorded on an accrual basis. Dividend income and other distributions are
recorded on the ex-dividend date ("ex-date") except for certain dividends from
French securities which are recorded as soon after the ex-date as the Fund,
using reasonable diligence, becomes aware of such dividends.
FOREIGN CURRENCY TRANSLATION--The books and records of the Fund are maintained
in U.S. dollars as follows: (1) the foreign currency market value of investments
and other assets and liabilities denominated in euros are translated at the
prevailing rates of exchange on the valuation date; and (2) purchases and sales
of investments, income and expenses are translated at the rate of exchange
prevailing on the respective dates of such transactions. The resulting net
foreign currency gain or loss is included in the Statement of Operations.
The Fund does not generally isolate that portion of the results of operations
arising as a result of changes in foreign currency exchange rates from
fluctuations arising from changes in the market prices of securities.
Accordingly, such foreign currency gain (loss) is included in net realized and
unrealized gain (loss) on investments.
Net foreign currency gain (loss) from valuing euro denominated assets and
liabilities at the period end exchange rate is reflected as a component of net
unrealized appreciation/depreciation of investments, futures contracts and other
assets and liabilities denominated in euros. Net realized gain (loss) on foreign
currency transactions is treated as ordinary income (loss) for income tax
reporting purposes.
DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are
recorded on the ex-date. Dividends and distributions from net investment income
and net realized capital gains are determined in accordance with federal income
tax regulations, which may differ from generally accepted accounting
17
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
principles. These "book/tax" differences are considered either temporary or
permanent in nature. To the extent these differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their federal
tax-basis treatment; temporary differences do not require reclassification. The
tax character of distributions paid, if any, and the components of accumulated
earnings (deficit) on a tax basis for the current fiscal year will be calculated
for the Fund after the Fund's fiscal year end at December 31, 2003.
INTERNALIZED MANAGEMENT
At a meeting of the Board of Directors (the "Board") held on October 21, 2002,
the Board approved the internalization of the portfolio management of the Fund,
effective November 1, 2002 and named Pierre H.R. Daviron, a member of the Board,
President and Chief Investment Officer of the Fund. Mr. Daviron is responsible
for the Fund's investment process. As complete compensation for his services,
the Fund has paid or accrued approximately $84,835 to Mr. Daviron for the six
months ended June 30, 2003. Such amount is included in "Internalized fund
operations, salaries and consultants" expense in the Statement of Operations.
In addition, the Fund has entered into certain consultancy arrangements to
provide investment research and administrative support services. For the six
months ended June 30, 2003, the Fund has paid or accrued $158,392 for these
services. Such amounts are included in "Internalized fund operations, salaries
and consultants" expense in the Statement of Operations.
On October 21, 2002, the Fund entered into a monthly operating lease and buy
side trading agreement (the "Agreement") for office space and trading services
with ABN Amro. The monthly rental expense for office space is $1,850 per month.
For the six months ended June 30, 2003, the Fund has paid or accrued $11,100 in
connection with the rental of office space; such amount is included in "Office
space, general expenses and trading services" in the Statement of Operations. In
connection with the Agreement, the Fund pays ABN Amro a buy side service fee for
execution of trades of .05% of the market value of such trades. For the six
months ended June 30, 2003, the Fund paid or accrued $20,055 in connection with
this service, such amount is included in "Office space, general expenses and
trading services" in the Statement of Operations. The Agreement may be
terminated at any time.
In connection with the internalized management of the Fund for the six months
ended June 30, 2003, the Fund has paid or accrued an aggregate of $370,325,
which represents 0.42% of net assets.
ADMINISTRATOR
UBS Global Asset Management (US) Inc. ("UBS Global AM")(the "Administrator"), an
indirect wholly-owned asset management subsidiary of UBSAG, has an
Administration Agreement with the Fund. Under the terms of the Administration
Agreement, the Administrator provides certain administrative services to the
Fund. As compensation for its services, the Administrator is paid a monthly fee
at an annual rate of 0.12% of the value of the Fund's average weekly net assets
up to $100 million, 0.10% on the next $100 million of such net assets, and 0.08%
on such net assets in excess of $200 million, subject to a minimum annual fee of
$125,000.
18
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements (unaudited) (continued)
- --------------------------------------------------------------------------------
TRANSACTIONS WITH AFFILIATES
An employee of UBS Finanical Services Inc., an indirect wholly owned subsidiary
of UBS AG and an affiliate of the Administrator, serves as a director of the
Fund. An employee of the Administrator serves as Treasurer of the Fund. The
Secretary of the Fund is special counsel to Epstein Becker & Green, P.C., a law
firm that on occasion provides legal services to the Fund.
INVESTMENTS IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at June 30,
2003, was substantially the same as the cost for financial statement purposes.
Accordingly, net unrealized appreciation of investments of $4,899,417 was
composed of gross appreciation of $10,698,089 for those investments having an
excess of value over cost and gross depreciation of $5,798,672 for those
investments having an excess of cost over value.
For the six months ended June 30, 2003, aggregate purchases and sales of
portfolio securities (excluding short-term securities) were $22,359,547, and
$20,324,826, respectively.
CAPITAL STOCK
There were 12,072,000 shares of $0.01 par value capital stock outstanding as of
June 30, 2003. The Fund did not repurchase any shares of its common stock under
the stock repurchase program during the six months ended June 30, 2003 and the
year ended December 31, 2002.
Shares can be repurchased pursuant to the Fund's stock repurchase program to
purchase up to an aggregate of 10% of the outstanding shares of its common
stock.
CONCENTRATION OF RISK
Investments in France may involve certain considerations and risks not typically
associated with investments in the U.S. as a result of, among other factors,
future political and economic developments and the level of French governmental
supervision and regulation of the securities markets.
The ability of the issuers of debt securities held by the Fund to meet their
obligations may be affected by economic and political developments in a specific
industry or region.
19
The France Growth Fund, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of common stock outstanding throughout each period is
presented below:
FOR THE
SIX MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, 2003 ------------------------------------------------------------------
(UNAUDITED) 2002(a) 2001 2000 1999 1998
------------- ------- -------- -------- -------- --------
Net asset value, beginning of period ..... $ 6.67 $ 8.64 $ 12.05 $ 18.13 $ 16.41 $ 13.12
------- ------- -------- -------- -------- --------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ............. 0.04 (0.10) (0.06)(b) (0.08) 0.01 0.06
Net realized and unrealized gain (loss) on
investments, options, futures contracts
and foreign currency transactions ...... 0.56 (1.87) (3.03)(b) (2.11) 5.50 5.26
------- ------- -------- -------- -------- --------
Total income (loss) from
investment operations .......... 0.60 (1.97) (3.09) (2.19) 5.51 5.32
------- ------- -------- -------- -------- --------
DIVIDENDS AND DISTRIBUTIONS:
From net investment income ............... -- -- -- -- (0.00)(c) --
From net realized gain on investments .... -- -- (0.13) (3.91) (3.80) (2.03)
From paid-in-capital ..................... -- -- (0.23) -- -- --
------- ------- -------- -------- -------- --------
Total dividends and distributions -- -- (0.36) (3.91) (3.80) (2.03)
------- ------- -------- -------- -------- --------
CAPITAL SHARE TRANSACTIONS:
Anti-dilutive effect of:
Shares repurchased pursuant to
the tender offer ..................... -- -- 0.04 -- -- --
Shares repurchased pursuant to the
stock repurchase program ............. -- -- -- 0.02 0.01 --
------- ------- -------- -------- -------- --------
Total capital share transactions . -- -- 0.04 0.02 0.01 --
------- ------- -------- -------- -------- --------
Net asset value, end of period ........... $ 7.27 $ 6.67 $ 8.64 $ 12.05 $ 18.13 $ 16.41
======= ======= ======== ======== ======== ========
Market value, end of period .............. $ 6.28 $ 5.70 $ 7.33 $ 10.50 $ 15.31 $ 13.63
======= ======= ======== ======== ======== ========
TOTAL INVESTMENT RETURN: (d) ............. 10.18% (22.24)% (27.36)% (7.00)% 45.93% 48.20%
======= ======= ======== ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) .. $87,805 $80,472 $104,270 $181,798 $277,024 $251,876
Ratio of expenses to average net
assets, net of fee waivers ............. 2.99%(f) 3.37%(e) 1.83%(e) 1.44%(e) 1.33%(e) 1.38%(e)
Ratio of net investment income (loss)
to average net assets, net of waivers .. 1.34%(f) (1.35)%(e) (0.61)%(e) (0.53)%(e) 0.07%(e) 0.38%(e)
Portfolio turnover ....................... 26% 83% 86% 82% 48% 47%
- ----------
(a) Investment advisory functions for the Fund were transferred from Credit
Agricole Asset Management U.S. Advisory services to internal management on
November 1, 2002.
(b) Based on average daily shares outstanding during the year ended December
31, 2001.
(c) Dividend equal to $0.0025 per share.
(d) Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day and a sale at the current
market price on the last day of each period reported. Dividends and
distributions, if any, are assumed, for purposes of this calculation, to be
reinvested at prices obtained under the Fund's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Total
investment return for a period of less than one year is not annualized.
(e) Credit Agricole Asset Management U.S. Advisory Services waived a portion of
its fees during the period January 1, 2002 through October 31, 2002 and for
each of the years ended December 31, 2001, 2000, 1999 and 1998. If such
waivers had not been made, the ratio of expenses to average net assets
would have been 3.46%, 1.93%, 1.55%, 1.46%, and 1.46%, respectively, and
the ratio of net investment income (loss) to average net assets would have
been (1.45)%, (0.70)%, (0.64)%, (0.06)% and 0.30%, respectively.
(f) Annualized.
20
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time the Fund may purchase
shares of its common stock in the open market.
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 audit 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 the report.
Comparisons between changes in the Fund's net asset value per share and
changes in the benchmark should be considered in light of the Fund's investment
policies and objective, the characteristics and quality of the Fund's
investments, the size of the Fund and variations in the euro/U.S. dollar
exchange rate.
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 BY SEC FOR FUTURE USE.]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED - END
MANAGEMENT INVESTMENT COMPANIES.
Form N-CSR disclosure requirement does not apply to this semi-annual report
filing.
ITEM 8. [RESERVED BY SEC FOR FUTURE USE.]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) provide reasonable assurances that material information
relating to the registrant is made known to them by the appropriate
persons, based on
their evaluation of these controls and procedures as of a date within
90 days of the filing date of this report.
(b) The registrant's principal executive officer and principal financial
officer are aware of no changes in the registrant's internal control
over financial reporting that occurred during the registrant's most
recent fiscal half-year that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS.
(a)(1) Code of Ethics - Form N-CSR requirement not yet effective with respect
to the registrant.
(a)(2) Certification of principal executive officer and principal financial
officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 is
attached hereto as Exhibit 99.CERT.
(b) Certification of principal executive officer and principal financial
officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is
attached hereto as Exhibit 99.906CERT.
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 FRANCE GROWTH FUND, INC.
By: /S/ PIERRE H.R. DAVIRON
-----------------------
Pierre H.R. Daviron
President
Date: SEPTEMBER 5, 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.
By: /S/ PIERRE H.R. DAVIRON
-----------------------
Pierre H.R. Daviron
President
Date: SEPTEMBER 5, 2003
By: /S/ PAUL H. SCHUBERT
--------------------
Paul H. Schubert
Treasurer
Date: SEPTEMBER 5, 2003