-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DTk4fKpYF9txluIkzg8dL46ot2C2fhAEryqvHS8FHFqPqNf+aACrrx/DZxS9d5b3 +m79V9fH9WYnqCSMlIWD8w== 0000935069-08-000633.txt : 20080310 0000935069-08-000633.hdr.sgml : 20080310 20080310120512 ACCESSION NUMBER: 0000935069-08-000633 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20071231 FILED AS OF DATE: 20080310 DATE AS OF CHANGE: 20080310 EFFECTIVENESS DATE: 20080310 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GAMCO INTERNATIONAL GROWTH FUND, INC CENTRAL INDEX KEY: 0000925463 IRS NUMBER: 000000000 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08560 FILM NUMBER: 08676712 BUSINESS ADDRESS: STREET 1: ONE CORPOATE CENTER CITY: RYE STATE: NY ZIP: 10580-1434 BUSINESS PHONE: 8004223554 MAIL ADDRESS: STREET 1: ONE CORPORATE CENTER CITY: RYE STATE: NY ZIP: 10580-1434 FORMER COMPANY: FORMER CONFORMED NAME: GABELLI INTERNATIONAL GROWTH FUND INC DATE OF NAME CHANGE: 19940616 0000925463 S000001069 GABELLI INTERNATIONAL GROWTH FUND INC C000002882 CLASS A GAIGX C000002883 CLASS AAA GIGRX C000002884 CLASS B GBIGX C000002885 CLASS C GCIGX C000034314 CLASS I N-CSR 1 intlgrowth_ncsr1207.txt GAMCO INTERNATIONAL GROWTH, 12-31-07 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 811-08560 --------- GAMCO International Growth Fund, Inc. ------------------------------------------------------------ (Exact name of registrant as specified in charter) One Corporate Center Rye, New York 10580-1422 ------------------------------------------------------------ (Address of principal executive offices) (Zip code) Bruce N. Alpert Gabelli Funds, LLC One Corporate Center Rye, New York 10580-1422 ------------------------------------------------------------ (Name and address of agent for service) registrant's telephone number, including area code: 1-800-422-3554 -------------- Date of fiscal year end: December 31 ----------- Date of reporting period: December 31, 2007 ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. GAMCO INTERNATIONAL GROWTH FUND, INC. ANNUAL REPORT DECEMBER 31, 2007 TO OUR SHAREHOLDERS, The Sarbanes-Oxley Act requires a fund's principal executive and financial officers to certify the entire contents of the semi-annual and annual shareholder reports in a filing with the Securities and Exchange Commission on Form N-CSR. This certification would cover the portfolio manager's commentary and subjective opinions if they are attached to or a part of the financial statements. Many of these comments and opinions would be difficult or impossible to certify. Because we do not want our portfolio managers to eliminate their opinions and/or restrict their commentary to historical facts, we have separated their commentary from the financial statements and investment portfolio and have sent it to you separately. Both the commentary and the financial statements, including the portfolio of investments, will be available on our website at www.gabelli.com/funds. Enclosed are the audited financial statements and the investment portfolio as of December 31, 2007 with a description of factors that affected the performance during the past year. PERFORMANCE DISCUSSION (UNAUDITED) For the year ended December 31, 2007 the net asset value of the Fund (Class AAA) appreciated 10.87% which compares with 15.42% for the average International Multi-Cap Growth Fund monitored by Lipper and 11.63% for the Morgan Stanley Capital International ("MSCI") Europe, Australasia, and the Far East ("EAFE") Index. Energy and Material stocks contributed significantly to performance in 2007. Otherwise selected holdings in the Consumer Staples sector and the Telecommunication Services sector helped performance. Selective holdings in the Consumer Discretionary and Health Care sectors adversely affected performance. The Fund's underweighting in the Financials sector helped performance. Top performers included Petroleo Brasileiro (+123.8%) (2.9% of net assets as of December 31, 2007), Rio Tinto (+99.0%) (2.2%), Bayer (+70.5%) (1.9%), and Woolworths (+58.4%) (2.6%). Poor performers included Harmony Gold Mining (-34.6%) (0.8%), InterContinental Hotels (-30.12%) (0.4%), UBS (-23.7%) (0.9%), Ladbrokes (-21.4%) (0.7%), and AstraZeneca (-20.2%) (0.9%). Sincerely yours, /s/ Bruce N. Alpert Bruce N. Alpert President February 22, 2008 COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN THE GAMCO INTERNATIONAL GROWTH FUND CLASS AAA SHARES, THE LIPPER NTERNATIONAL MULTI-CAP GROWTH FUND AVERAGE, AND THE MSCI EAFE INDEX [GRAPHIC OMITTED] PLOT POINTS FOLLOW: GAMCO International Growth Lipper International MSCI Fund Class AAA Shares Multi-Cap Growth Fund Average EAFE Index 06/30/95 $10,000 $10,000 $10,000 12/31/95 10,980 10,605 10,855 12/31/96 13,420 12,132 11,545 12/31/97 14,399 12,799 11,783 12/31/98 16,901 14,466 14,179 12/31/99 25,760 20,377 18,050 12/31/00 21,512 17,198 15,530 12/31/01 16,409 13,464 12,236 12/31/02 14,092 11,220 10,320 12/31/03 19,260 15,116 14,362 12/31/04 22,496 17,632 17,335 12/31/05 24,856 20,336 19,765 12/31/06 30,120 25,207 25,074 12/31/07 33,394 29,094 27,991 PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE RESULTS. THE PERFORMANCE TABLES AND GRAPH DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. COMPARATIVE RESULTS - -------------------------------------------------------------------------------- AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2007 (A) ----------------------------------------------------
Since Inception Quarter 1 Year 3 Year 5 Year 10 Year (6/30/95) ------- ------ ------ ------ ------- --------- GAMCO INTERNATIONAL GROWTH FUND CLASS AAA (B) ..........(1.41)% 10.87% 14.08% 18.83% 8.78% 10.12% MSCI EAFE Index ........................................(1.71) 11.63 17.32 22.08 9.04 8.58 Lipper International Multi-Cap Growth Fund Average .....(0.86) 15.42 18.53 21.93 9.23 9.72 Class A ................................................(1.43) 10.89 14.09 18.85 8.92 10.24 (7.09)(c) 4.52(c) 11.86(c) 17.45(c) 8.28(c) 9.72(c) Class B ................................................(1.61) 10.04 13.21 17.94 8.20 9.66 (6.53)(d) 5.04(d) 12.43(d) 17.73(d) 8.20 9.66 Class C ................................................(1.61) 10.07 13.30 17.79 8.12 9.59 (2.60)(e) 9.07(e) 13.30 17.79 8.12 9.59
IN THE CURRENT PROSPECTUS, THE EXPENSE RATIOS FOR CLASS AAA, A, B, AND C SHARES ARE 1.79%, 1.79%, 2.54%, AND 2.54%, RESPECTIVELY, CLASS AAA SHARES DO NOT HAVE A SALES CHARGE. THE MAXIMUM SALES CHARGE FOR CLASS A, B, AND C SHARES IS 5.75%, 5.00%, AND 1.00%, RESPECTIVELY. (a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS. TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN SHARE PRICE AND REINVESTMENT OF DISTRIBUTIONS AND ARE NET OF EXPENSES. INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL FLUCTUATE. WHEN SHARES ARE REDEEMED, THEY MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PERFORMANCE RETURNS FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE INFORMATION AS OF THE MOST RECENT MONTH END. INVESTORS SHOULD CAREFULLY CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND BEFORE INVESTING. THE PROSPECTUS CONTAINS MORE INFORMATION ABOUT THIS AND OTHER MATTERS AND SHOULD BE READ CAREFULLY BEFORE INVESTING. INVESTING IN FOREIGN SECURITIES INVOLVES RISKS NOT ORDINARILY ASSOCIATED WITH INVESTMENTS IN DOMESTIC ISSUES, INCLUDING CURRENCY FLUCTUATION, ECONOMIC, AND POLITICAL RISKS. THE CLASS AAA SHARES' NET ASSET VALUES ("NAV'S") PER SHARE ARE USED TO CALCULATE PERFORMANCE FOR THE PERIODS PRIOR TO THE ISSUANCE OF CLASS A SHARES, CLASS B SHARES, AND CLASS C SHARES ON JULY 25, 2001, JANUARY 17, 2001, AND DECEMBER 17, 2000, RESPECTIVELY. THE ACTUAL PERFORMANCE FOR THE CLASS B SHARES AND CLASS C SHARES WOULD HAVE BEEN LOWER DUE TO THE ADDITIONAL EXPENSES ASSOCIATED WITH THESE CLASSES OF SHARES. THE MORGAN STANLEY CAPITAL INTERNATIONAL ("MSCI") EUROPE, AUSTRALASIA, AND THE FAR EAST ("EAFE") INDEX IS AN UNMANAGED INDICATOR OF INTERNATIONAL STOCK MARKET PERFORMANCE, WHILE THE LIPPER INTERNATIONAL MULTI-CAP GROWTH FUND AVERAGE REFLECTS THE AVERAGE PERFORMANCE OF MUTUAL FUNDS CLASSIFIED IN THIS PARTICULAR CATEGORY. DIVIDENDS ARE CONSIDERED REINVESTED. YOU CANNOT INVEST DIRECTLY IN AN INDEX. (b) EFFECTIVE FEBRUARY 15, 2007, CLASS AAA SHARES ARE OFFERED ONLY TO INVESTORS WHO WERE SHAREHOLDERS IN ONE OR MORE OF THE REGISTERED FUNDS DISTRIBUTED BY GABELLI & COMPANY, INC. PRIOR TO FEBRUARY 15, 2007. (c) INCLUDES THE EFFECT OF THE MAXIMUM 5.75% SALES CHARGE AT THE BEGINNING OF THE PERIOD. (d) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS B SHARES UPON REDEMPTION AT THE END OF THE QUARTER, ONE YEAR, THREE YEAR, AND FIVE YEAR PERIODS OF 5%, 5%, 3%, AND 2%, RESPECTIVELY, OF THE FUND'S NAV PER SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER. CLASS B SHARES ARE NOT AVAILABLE FOR NEW PURCHASES. (e) PERFORMANCE RESULTS INCLUDE THE DEFERRED SALES CHARGES FOR THE CLASS C SHARES UPON REDEMPTION AT THE END OF THE QUARTER AND ONE YEAR PERIODS OF 1% OF THE FUND'S NAV PER SHARE AT THE TIME OF PURCHASE OR SALE, WHICHEVER IS LOWER. - -------------------------------------------------------------------------------- 2 GAMCO INTERNATIONAL GROWTH FUND, INC. DISCLOSURE OF FUND EXPENSES (UNAUDITED) For the Six Month Period from July 1, 2007 through December 31, 2007 EXPENSE TABLE ================================================================================ We believe it is important for you to understand the impact of fees and expenses regarding your investment. All mutual funds have operating expenses. As a shareholder of a fund, you incur ongoing costs, which include costs for portfolio management, administrative services, and shareholder reports (like this one), among others. Operating expenses, which are deducted from a fund's gross income, directly reduce the investment return of a fund. When a fund's expenses are expressed as a percentage of its average net assets, this figure is known as the expense ratio. The following examples are intended to help you understand the ongoing costs (in dollars) of investing in your Fund and to compare these costs with those of other mutual funds. The examples are based on an investment of $1,000 made at the beginning of the period shown and held for the entire period. The Expense Table below illustrates your Fund's costs in two ways: ACTUAL FUND RETURN: This section provides information about actual account values and actual expenses. You may use this section to help you to estimate the actual expenses that you paid over the period after any fee waivers and expense reimbursements. The "Ending Account Value" shown is derived from the Fund's ACTUAL return during the past six months, and the "Expenses Paid During Period" shows the dollar amount that would have been paid by an investor who started with $1,000 in the Fund. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number given for your Fund under the heading "Expenses Paid During Period" to estimate the expenses you paid during this period. HYPOTHETICAL 5% RETURN: This section provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio. It assumes a hypothetical annualized return of 5% before expenses during the period shown. In this case - because the hypothetical return used is NOT the Fund's actual return - the results do not apply to your investment and you cannot use the hypothetical account value and expense to estimate the actual ending account balance or expenses you paid for the period. This example is useful in making comparisons of the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in shareholder reports of other funds. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads), redemption fees, or exchange fees, if any, which are described in the Prospectus. If these costs were applied to your account, your costs would be higher. Therefore, the 5% hypothetical return is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. The "Annualized Expense Ratio" represents the actual expenses for the last six months and may be different from the expense ratio in the Financial Highlights which is for the year ended December 31, 2007. Beginning Ending Annualized Expenses Account Value Account Value Expense Paid During 07/01/07 12/31/07 Ratio Period* - -------------------------------------------------------------------------------- GAMCO INTERNATIONAL GROWTH FUND, INC. - -------------------------------------------------------------------------------- ACTUAL FUND RETURN Class AAA $1,000.00 $1,021.00 1.95% $ 9.88 Class A $1,000.00 $1,020.90 1.95% $ 9.83 Class B $1,000.00 $1,016.90 2.70% $13.65 Class C $1,000.00 $1,017.30 2.68% $13.55 HYPOTHETICAL 5% RETURN Class AAA $1,000.00 $1,015.29 1.95% $ 9.85 Class A $1,000.00 $1,015.34 1.95% $ 9.80 Class B $1,000.00 $1,011.53 2.70% $13.62 Class C $1,000.00 $1,011.63 2.68% $13.51 * Expenses are equal to the Fund's annualized expense ratio for the last six months multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half-year, then divided by 365. 3 SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED) The following table presents portfolio holdings as a percent of total net assets as of December 31, 2007: GAMCO INTERNATIONAL GROWTH FUND, INC. Health Care ................................... 14.6% Food and Beverage ............................. 11.4% Energy and Utilities .......................... 10.7% Metals and Mining ............................. 10.7% Consumer Products ............................. 10.4% Financial Services ............................ 7.6% Building and Construction ..................... 5.1% Retail ........................................ 4.6% Business Services ............................. 3.6% Broadcasting .................................. 3.3% Specialty Chemicals ........................... 3.2% Electronics ................................... 2.7% Diversified Industrial ........................ 2.5% Hotels and Gaming ............................. 2.1% Telecommunications ............................ 2.1% Real Estate ................................... 2.0% Computer Software and Services ................ 1.4% Entertainment ................................. 1.2% Wireless Communications ....................... 1.0% Transportation ................................ 0.6% Other Assets and Liabilities (Net) ............ (0.8)% ----- 100.0% ===== THE FUND FILES A COMPLETE SCHEDULE OF PORTFOLIO HOLDINGS WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "SEC") FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED SEPTEMBER 30, 2007. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY CALLING THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE SEC'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE OPERATION OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING 1-800-SEC-0330. PROXY VOTING The Fund files Form N-PX with its complete proxy voting record for the 12 months ended June 30th, no later than August 31st of each year. A description of the Fund's proxy voting policies, procedures, and how the Fund voted proxies relating to portfolio securities is available without charge, upon request, by (i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at www.sec.gov. 4 GAMCO INTERNATIONAL GROWTH FUND, INC. SCHEDULE OF INVESTMENTS -- DECEMBER 31, 2007 ================================================================================ MARKET SHARES COST VALUE ------ ---- ----- COMMON STOCKS -- 100.8% BROADCASTING -- 3.3% 40,000 British Sky Broadcasting Group plc .............. $ 477,247 $ 492,032 35,000 Mediaset SpA ............. 322,225 352,588 15,000 Modern Times Group MTG AB, Cl. B .................. 397,172 1,040,965 ----------- ----------- 1,196,644 1,885,585 ----------- ----------- BUILDING AND CONSTRUCTION -- 5.1% 47,750 CRH plc .................. 678,336 1,658,327 16,000 Technip SA ............... 469,202 1,272,662 ----------- ----------- 1,147,538 2,930,989 ----------- ----------- BUSINESS SERVICES -- 3.6% 18,000 Canon Inc. ............... 700,674 823,798 20,000 Jardine Matheson Holdings Ltd. .......... 494,307 554,000 13,000 Secom Co. Ltd. ........... 543,997 709,720 ----------- ----------- 1,738,978 2,087,518 ----------- ----------- COMPUTER SOFTWARE AND SERVICES -- 1.4% 17,000 Square Enix Co. Ltd. ..... 457,695 517,563 600 Yahoo! Japan Corp. ....... 226,444 267,569 ----------- ----------- 684,139 785,132 ----------- ----------- CONSUMER PRODUCTS -- 10.4% 28,000 Assa Abloy AB, Cl. B ..... 531,167 561,504 10,500 Christian Dior SA ........ 610,266 1,379,877 34,000 Compagnie Financiere Richemont SA, Cl. A .... 737,401 2,322,912 100 Japan Tobacco Inc. ....... 577,985 591,275 18,500 The Swatch Group AG ...... 1,038,529 1,090,285 ----------- ----------- 3,495,348 5,945,853 ----------- ----------- DIVERSIFIED INDUSTRIAL -- 2.5% 13,000 Bouygues SA .............. 375,268 1,080,211 3,000 SMC Corp. ................ 387,492 356,891 ----------- ----------- 762,760 1,437,102 ----------- ----------- ELECTRONICS -- 2.7% 6,400 Fanuc Ltd. ............... 650,281 620,468 3,800 Keyence Corp. ............ 719,306 933,164 ----------- ----------- 1,369,587 1,553,632 ----------- ----------- ENERGY AND UTILITIES -- 10.7% 45,000 BP plc ................... 556,109 549,911 400,000 China Petroleum & Chemical Corp., Cl. H .. 414,776 592,980 18,000 Imperial Oil Ltd. ........ 673,425 996,160 14,200 Petroleo Brasileiro SA, ADR 313,833 1,636,408 36,000 Saipem SpA ............... 670,247 1,437,618 11,000 Total SA ................. 430,312 910,805 ----------- ----------- 3,058,702 6,123,882 ----------- ----------- MARKET SHARES COST VALUE ------ ---- ----- ENTERTAINMENT -- 1.2% 15,000 Vivendi .................. $ 327,615 $ 688,696 ----------- ----------- FINANCIAL SERVICES -- 7.6% 1,500 Allianz SE ............... 205,454 323,159 42,000 Aviva plc ................ 455,687 559,753 70,000 AXA Asia Pacific Holdings Ltd. .......... 418,637 450,321 10,000 Schroders plc ............ 274,272 256,577 27,000 Standard Chartered plc ... 530,829 985,410 11,000 UBS AG ................... 403,457 507,185 75,000 UniCredito Italiano SpA .. 547,087 616,906 27,500 Westpac Banking Corp. .... 432,316 668,717 ----------- ----------- 3,267,739 4,368,028 ----------- ----------- FOOD AND BEVERAGE -- 11.4% 30,000 Ajinomoto Co. Inc. ....... 353,089 339,518 20,000 ARIAKE JAPAN Co. Ltd. .... 490,827 356,575 65,000 Cadbury Schweppes plc .... 669,773 794,748 15,000 Cermaq ASA ............... 233,129 207,472 30,000 Coca-Cola Hellenic Bottling Co. SA ........ 270,014 1,294,702 50,000 Diageo plc ............... 445,045 1,073,262 500,000 Marine Harvest+ .......... 451,127 318,833 1,000 Nestle SA ................ 443,695 459,190 5,200 Pernod-Ricard SA ......... 314,505 1,200,067 50,000 Tesco plc ................ 436,369 475,627 ----------- ----------- 4,107,573 6,519,994 ----------- ----------- HEALTH CARE -- 14.6% 11,626 AstraZeneca plc, Stockholm .............. 453,538 500,367 6,000 Cochlear Ltd. ............ 291,000 392,259 28,140 GlaxoSmithKline plc ...... 804,631 714,660 23,000 Novartis AG .............. 883,176 1,257,809 8,500 Roche Holding AG ......... 871,315 1,469,359 5,000 Sanofi-Aventis ........... 344,543 457,702 50,000 Smith & Nephew plc ....... 454,057 573,650 3,000 Straumann Holding AG ..... 617,094 823,542 5,500 Synthes Inc. ............. 372,080 683,037 11,500 Takeda Pharmaceutical Co. Ltd. ............... 586,881 671,840 9,000 William Demant Holding A/S+ 406,639 826,648 ----------- ----------- 6,084,954 8,370,873 ----------- ----------- HOTELS AND GAMING -- 2.1% 50,000 Crown Ltd.+ .............. 657,511 590,487 13,428 InterContinental Hotels Group plc .............. 319,354 234,002 60,000 Ladbrokes plc ............ 685,770 382,986 ----------- ----------- 1,662,635 1,207,475 ----------- ----------- See accompanying notes to financial statements. 5 GAMCO INTERNATIONAL GROWTH FUND, INC. SCHEDULE OF INVESTMENTS (CONTINUED) -- DECEMBER 31, 2007 ================================================================================ MARKET SHARES COST VALUE ------ ---- ----- COMMON STOCKS (CONTINUED) METALS AND MINING -- 10.7% 26,390 Anglo American plc ....... $ 1,051,007 $ 1,601,910 45,500 Harmony Gold Mining Co. Ltd.+ .................. 334,414 468,281 12,000 Rio Tinto plc ............ 624,492 1,262,909 39,666 Xstrata plc .............. 855,249 2,783,401 ----------- ----------- 2,865,162 6,116,501 ----------- ----------- REAL ESTATE -- 2.0% 50,000 Cheung Kong (Holdings) Ltd. 585,811 913,473 60,000 Guangzhou R&F Properties Co. Ltd., Cl. H ........ 276,743 210,443 1,562 Prosperity REIT .......... 439 308 ----------- ----------- 862,993 1,124,224 ----------- ----------- RETAIL -- 4.6% 11,000 Hennes & Mauritz AB, Cl. B .................. 451,333 664,462 15,000 Next plc ................. 391,515 483,165 50,000 Woolworths Ltd. .......... 686,495 1,482,801 ----------- ----------- 1,529,343 2,630,428 ----------- ----------- SPECIALTY CHEMICALS -- 3.2% 12,000 Bayer AG ................. 504,844 1,097,407 80,000 Tokai Carbon Co. Ltd. .... 351,681 714,216 ----------- ----------- 856,525 1,811,623 ----------- ----------- TELECOMMUNICATIONS -- 2.1% 8,500 Orascom Telecom Holding SAE 596,452 703,884 25,000 Tele2 AB, Cl. B .......... 449,804 497,517 ----------- ----------- 1,046,256 1,201,401 ----------- ----------- TRANSPORTATION -- 0.6% 35,000 Toll Holdings Ltd. ....... 379,263 349,444 ----------- ----------- WIRELESS COMMUNICATIONS -- 1.0% 34,000 China Mobile Ltd. ........ 416,725 592,093 ----------- ----------- TOTAL COMMON STOCKS ...... 36,860,479 57,730,473 ----------- ----------- TOTAL INVESTMENTS -- 100.8% .. $36,860,479 57,730,473 =========== OTHER ASSETS AND LIABILITIES (NET) -- (0.8)% (458,612) ----------- NET ASSETS -- 100.0% .................. $57,271,861 =========== - ---------------- + Non-income producing security. ADR American Depository Receipt REIT Real Estate Investment Trust % OF MARKET MARKET GEOGRAPHIC DIVERSIFICATION VALUE VALUE - -------------------------- ----- ----- Europe ................................. 68.5% $39,542,781 Japan .................................. 12.0 6,902,597 Asia/Pacific ........................... 11.8 6,797,325 North America .......................... 2.9 1,679,197 Latin America .......................... 2.8 1,636,408 Africa/Middle East ..................... 1.2 703,884 South Africa ........................... 0.8 468,281 ----- ----------- 100.0% $57,730,473 ===== =========== See accompanying notes to financial statements. 6 GAMCO INTERNATIONAL GROWTH FUND, INC. STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2007 ================================================================================ ASSETS: Investments, at value (cost $36,860,479) .......... $57,730,473 Receivable for Fund shares sold ................... 6,168 Receivable for investments sold ................... 4,075 Dividends receivable .............................. 42,516 Prepaid expenses .................................. 23,292 ----------- TOTAL ASSETS ...................................... 57,806,524 ----------- LIABILITIES: Foreign currency, at value (cost $703) ............ 708 Payable to custodian .............................. 55,039 Payable for Fund shares redeemed .................. 295,678 Payable for investment advisory fees .............. 49,657 Payable for distribution fees ..................... 12,498 Payable for accounting fees ....................... 11,251 Payable for legal and audit fees .................. 47,536 Payable for shareholder communications expenses ... 35,041 Other accrued expenses ............................ 27,255 ----------- TOTAL LIABILITIES ................................. 534,663 ----------- NET ASSETS applicable to 2,186,684 shares outstanding .............................. $57,271,861 =========== NET ASSETS CONSIST OF: Paid-in capital, each class at $0.001 par value ... $36,402,126 Undistributed net investment income ............... 3,667 Accumulated distributions in excess of net realized gain on investments and foreign currency transactions ........................... (3,664) Net unrealized appreciation on investments ........ 20,869,994 Net unrealized depreciation on foreign currency translations ........................... (262) ----------- NET ASSETS ........................................ $57,271,861 =========== SHARES OF CAPITAL STOCK: CLASS AAA: Net Asset Value, offering and redemption price per share ($56,677,639 / 2,163,982 shares outstanding; 375,000,000 shares authorized) ..... $26.19 ====== CLASS A: Net Asset Value and redemption price per share ($472,863 / 17,875 shares outstanding; 250,000,000 shares authorized) .................. $26.45 ====== Maximum offering price per share (NAV / .9425, based on maximum sales charge of 5.75%of the offering price) ................................. $28.06 ====== CLASS B: Net Asset Value and offering price per share ($11,822 / 460 shares outstanding; 125,000,000 shares authorized) .................. $25.70(a) ====== CLASS C: Net Asset Value and offering price per share ($109,537 / 4,367 shares outstanding; 125,000,000 shares authorized) .................. $25.08(a) ====== - -------------------------- (a) Redemption price varies based on the length of time held. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2007 ================================================================================ INVESTMENT INCOME: Dividends (net of foreign taxes of $96,467) ....... $ 1,947,257 Interest .......................................... 1,758 ----------- TOTAL INVESTMENT INCOME ........................... 1,949,015 ----------- EXPENSES: Investment advisory fees .......................... 615,134 Distribution fees - Class AAA ..................... 152,464 Distribution fees - Class A ....................... 1,081 Distribution fees - Class B ....................... 288 Distribution fees - Class C ....................... 667 Legal and audit fees .............................. 91,216 Shareholder communications expenses ............... 69,999 Custodian fees .................................... 58,028 Accounting fees ................................... 45,000 Shareholder services fees ......................... 42,791 Interest expense .................................. 23,035 Registration expenses ............................. 13,486 Directors' fees ................................... 12,531 Miscellaneous expenses ............................ 47,671 ----------- TOTAL EXPENSES .................................... 1,173,391 Less: Custodian fee credits ....................... (29) ----------- NET EXPENSES ...................................... 1,173,362 ----------- NET INVESTMENT INCOME ............................. 775,653 ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY: Net realized gain on investments .................. 7,318,091 Net realized loss on foreign currency transactions ........................... (25,307) ----------- Net realized gain on investments and foreign currency transactions ................... 7,292,784 ----------- Net change in unrealized appreciation/ depreciation on investments ..................... (1,729,572) Net change in unrealized appreciation/ depreciation on foreign currency translations ... (1,857) ----------- Net change in unrealized appreciation/ depreciation on investments and foreign currency translations ........................... (1,731,429) ----------- NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY ............. 5,561,355 ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................. $ 6,337,008 =========== See accompanying notes to financial statements. 7 GAMCO INTERNATIONAL GROWTH FUND, INC. STATEMENT OF CHANGES IN NET ASSETS ================================================================================
YEAR ENDED YEAR ENDED DECEMBER 31, 2007 DECEMBER 31, 2006 ----------------- ----------------- OPERATIONS: Net investment income ....................................................... $ 775,653 $ 1,105,460 Net realized gain on investments and foreign currency transactions .......... 7,292,784 5,378,271 Net change in unrealized appreciation/depreciation on investments and foreign currency translations ......................................... (1,731,429) 5,784,122 ----------- ----------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ........................ 6,337,008 12,267,853 ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS: Net investment income Class AAA ................................................................. (738,886) (1,104,645) Class A ................................................................... (6,336) (5,762) Class B ................................................................... -- (662) Class C ................................................................... (1,095) (827) ----------- ----------- (746,317) (1,111,896) ----------- ----------- Net realized gain on investments Class AAA ................................................................. (1,464,957) -- Class A ................................................................... (12,184) -- Class B ................................................................... (317) -- Class C ................................................................... (2,896) -- ----------- ----------- (1,480,354) -- ----------- ----------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS ......................................... (2,226,671) (1,111,896) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Class AAA ................................................................. (11,984,744) (6,073,987) Class A ................................................................... 119,418 33,686 Class B ................................................................... (49,216) 453 Class C ................................................................... 57,951 30,443 ----------- ----------- NET DECREASE IN NET ASSETS FROM CAPITAL SHARE TRANSACTIONS .................. (11,856,591) (6,009,405) ----------- ----------- REDEMPTION FEES ............................................................. 614 81 ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS ....................................... (7,745,640) 5,146,633 NET ASSETS: Beginning of period ......................................................... 65,017,501 59,870,868 ----------- ----------- End of period (including undistributed net investment income of $3,667 and $81, respectively) .......................................... $57,271,861 $65,017,501 =========== ===========
See accompanying notes to financial statements. 8 GAMCO INTERNATIONAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS ================================================================================ 1. ORGANIZATION. GAMCO International Growth Fund, Inc. (the "Fund"), was organized on May 25, 1994 as a Maryland corporation. The Fund is a diversified open-end management investment company registered under the Investment Company Act of 1940, as amended (the "1940 Act"). The Fund's primary objective is long-term capital appreciation. The Fund commenced investment operations on June 30, 1995. 2. SIGNIFICANT ACCOUNTING POLICIES. The preparation of financial statements in accordance with United States ("U.S.") generally accepted accounting principles 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. The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. SECURITY VALUATION. Portfolio securities listed or traded on a nationally recognized securities exchange or traded in the U.S. over-the-counter market for which market quotations are readily available are valued at the last quoted sale price or a market's official closing price as of the close of business on the day the securities are being valued. If there were no sales that day, the security is valued at the average of the closing bid and asked prices or, if there were no asked prices quoted on that day, then the security is valued at the closing bid price on that day. If no bid or asked prices are quoted on such day, the security is valued at the most recently available price or, if the Board of Directors (the "Board") so determines, by such other method as the Board shall determine in good faith to reflect its fair market value. Portfolio securities traded on more than one national securities exchange or market are valued according to the broadest and most representative market, as determined by Gabelli Funds, LLC (the "Adviser"). Portfolio securities primarily traded on a foreign market are generally valued at the preceding closing values of such securities on the relevant market, but may be fair valued pursuant to procedures established by the Board if market conditions change significantly after the close of the foreign market but prior to the close of business on the day the securities are being valued. Debt instruments with remaining maturities of 60 days or less that are not credit impaired are valued at amortized cost, unless the Board determines such amount does not reflect the securities' fair value, in which case these securities will be fair valued as determined by the Board. Debt instruments having a maturity greater than 60 days for which market quotations are readily available are valued at the average of the latest bid and asked prices. If there were no asked prices quoted on such day, the security is valued using the closing bid price. Futures contracts are valued at the closing settlement price of the exchange or board of trade on which the applicable contract is traded. Securities and assets for which market quotations are not readily available are fair valued as determined by the Board. Fair valuation methodologies and procedures may include, but are not limited to: analysis and review of available financial and non-financial information about the company; comparisons to the valuation and changes in valuation of similar securities, including a comparison of foreign securities to the equivalent U.S. dollar value ADR securities at the close of the U.S. exchange; and evaluation of any other information that could be indicative of the value of the security. In September 2006, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value Measurements, which clarifies the definition of fair value and requires companies to expand their disclosure about the use of fair value to measure assets and liabilities in interim and annual periods subsequent to initial recognition. Adoption of SFAS 157 requires the use of the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. As of December 31, 2007, the Fund does not believe the adoption of SFAS 157 will impact the amounts reported in the financial statements. 9 GAMCO INTERNATIONAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with primary government securities dealers recognized by the Federal Reserve Board, with member banks of the Federal Reserve System, or with other brokers or dealers that meet credit guidelines established by the Adviser and reviewed by the Board. Under the terms of a typical repurchase agreement, the Fund takes possession of an underlying debt obligation subject to an obligation of the seller to repurchase, and the Fund to resell, the obligation at an agreed-upon price and time, thereby determining the yield during the Fund's holding period. The Fund will always receive and maintain securities as collateral whose market value, including accrued interest, will be at least equal to 102% of the dollar amount invested by the Fund in each agreement. The Fund will make payment for such securities only upon physical delivery or upon evidence of book entry transfer of the collateral to the account of the custodian. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked-to-market on a daily basis to maintain the adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Fund may be delayed or limited. At December 31, 2007, there were no open repurchase agreements. FORWARD FOREIGN EXCHANGE CONTRACTS. The Fund may engage in forward foreign exchange contracts for hedging a specific transaction with respect to either the currency in which the transaction is denominated or another currency as deemed appropriate by the Adviser. Forward foreign exchange contracts are valued at the forward rate and are marked-to-market daily. The change in market value is included in unrealized appreciation/depreciation on investments and foreign currency translations. When the contract is closed, the Fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. The use of forward foreign exchange contracts does not eliminate fluctuations in the underlying prices of the Fund's portfolio securities, but it does establish a rate of exchange that can be achieved in the future. Although forward foreign exchange contracts limit the risk of loss due to a decline in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency increase. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. At December 31, 2007, there were no open forward foreign exchange contracts. FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained in U.S. dollars. Foreign currencies, investments, and other assets and liabilities are translated into U.S. dollars at the current exchange rates. Purchases and sales of investment securities, income, and expenses are translated at the exchange rate prevailing on the respective dates of such transactions. Unrealized gains and losses that result from changes in foreign exchange rates and/or changes in market prices of securities have been included in unrealized appreciation/depreciation on investments and foreign currency translations. Net realized foreign currency gains and losses resulting from changes in exchange rates include foreign currency gains and losses between trade date and settlement date on investment securities transactions, foreign currency transactions, and the difference between the amounts of interest and dividends recorded on the books of the Fund and the amounts actually received. The portion of foreign currency gains and losses related to fluctuation in exchange rates between the initial purchase trade date and subsequent sale trade date is included in realized gain/(loss) on investments. FOREIGN SECURITIES. The Fund may directly purchase securities of foreign issuers. Investing in securities of foreign issuers involves special risks not typically associated with investing in securities of U.S. issuers. The risks include possible revaluation of currencies, the ability to repatriate funds, less complete financial information about companies, and possible future adverse political and economic developments. Moreover, securities of many foreign issuers and their markets may be less liquid and their prices more volatile than those of securities of comparable U.S. issuers. 10 GAMCO INTERNATIONAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ FOREIGN TAXES. The Fund may be subject to foreign taxes on income, gains on investments, or currency repatriation, a portion of which may be recoverable. The Fund will accrue such taxes and recoveries as applicable, based upon its current interpretation of tax rules and regulations that exist in the markets in which it invests. SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are accounted for on the trade date with realized gain or loss on investments determined by using the identified cost method. Interest income (including amortization of premium and accretion of discount) is recorded on the accrual basis. Premiums and discounts on debt securities are amortized using the effective yield to maturity method. Dividend income is recorded on the ex-dividend date except for certain dividends which are recorded as soon as the Fund is informed of the dividend. DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES. Certain administrative expenses are common to, and allocated among, various affiliated funds. Such allocations are made on the basis of each Fund's average net assets or other criteria directly affecting the expenses as determined by the Adviser pursuant to procedures established by the Board. In calculating the NAV per share of each class, investment income, realized and unrealized gains and losses, redemption fees, and expenses other than class specific expenses are allocated daily to each class of shares based upon the proportion of net assets of each class at the beginning of each day. Distribution expenses are borne solely by the class incurring the expense. CUSTODIAN FEE CREDITS AND INTEREST EXPENSE. When cash balances are maintained in the custody account, the Fund receives credits which are used to offset custodian fees. The gross expenses paid under the custody arrangement are included in custodian fees in the Statement of Operations with the corresponding expense offset, if any, shown as "custodian fee credits." When cash balances are overdrawn, the Fund is charged an overdraft fee equal to 2.00% above the federal funds rate on outstanding balances. This amount, if any, would be shown as "interest expense" in the Statement of Operations. DISTRIBUTIONS TO SHAREHOLDERS. Distributions to shareholders are recorded on the ex-dividend date. Distributions to shareholders are based on income and capital gains as determined in accordance with federal income tax regulations, which may differ from income and capital gains as determined under U.S. generally accepted accounting principles. These differences are primarily due to differing treatments of income and gains on various investment securities and foreign currency transactions held by the Fund, timing differences, and differing characterizations of distributions made by the Fund. Distributions from net investment income include net realized gains on foreign currency transactions. These book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, adjustments are made to the appropriate capital accounts in the period when the differences arise. These reclassifications have no impact on the NAV of the Fund. For the fiscal year ended December 31, 2007, reclassifications were made to decrease undistributed net investment income by $25,750 and to decrease accumulated distributions in excess of net realized gain on investments and foreign currency transactions by $25,750. The tax character of distributions paid during the fiscal years ended December 31, 2007 and December 31, 2006 was as follows: YEAR ENDED YEAR ENDED DECEMBER 31, 2007 DECEMBER 31, 2006 ----------------- ----------------- DISTRIBUTIONS PAID FROM: Ordinary income .................... $ 746,760 $1,111,896 Long-term capital gains ............ 1,479,911 -- ---------- ---------- Total distributions paid ........... $2,226,671 $1,111,896 ========== ========== PROVISION FOR INCOME TAXES. The Fund intends to continue to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). It is the policy of the 11 GAMCO INTERNATIONAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ Fund to comply with the requirements of the Code applicable to regulated investment companies and to distribute substantially all of its net investment company taxable income and net capital gains. Therefore, no provision for federal income taxes is required. At December 31, 2007, the difference between book basis and tax basis unrealized appreciation was primarily due to deferral of losses from wash sales for tax purposes. At December 31, 2007, the components of accumulated earnings/(losses) on a tax basis were as follows: Undistributed ordinary income ............................ $ 3,667 Net unrealized appreciation on investments and foreign receivables and payables ....................... 20,866,068 ----------- Total .................................................... $20,869,735 =========== During the fiscal year ended December 31, 2007, the GAMCO International Growth Fund utilized capital loss carryforwards of $5,278,666. The following summarizes the tax cost of investments and the related unrealized appreciation/ (depreciation) at December 31, 2007: GROSS GROSS UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION ---- ------------ ------------ ------------ Investments ....... $36,864,143 $21,901,457 $(1,035,127) $20,866,330 FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an Interpretation of FASB Statement No. 109" ("the Interpretation") established a minimum threshold for financial statement recognition of the benefit of positions taken in filing tax returns (including whether the Fund is taxable in a particular jurisdiction) and required certain expanded tax disclosures. For the fiscal year ended December 31, 2007, the Fund did not have any liability for any unrecognized tax benefits. The Fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expenses in the Statement of Operations. The Fund is not subject to examination by U.S. federal tax authorities for tax years before 2003 and by state tax authorities for tax years before 2002. 3. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS. The Fund has entered into an investment advisory agreement (the "Advisory Agreement") with the Adviser which provides that the Fund will pay the Adviser a fee, computed daily and paid monthly, at the annual rate of 1.00% of the value of its average daily net assets. In accordance with the Advisory Agreement, the Adviser provides a continuous investment program for the Fund's portfolio, oversees the administration of all aspects of the Fund's business and affairs, and pays the compensation of all Officers and Directors of the Fund who are affiliated persons of the Adviser. If total net assets of the Fund are below $100 million, the Fund pays each Director who is not considered to be an affiliated person an annual retainer of $1,000 plus $250 for each Board meeting attended and they are reimbursed for any out of pocket expenses incurred in attending meetings. If total net assets of the Fund are in excess of $100 million, the Fund pays each Independent Director an annual retainer of $3,000 plus $500 for each Board meeting attended and they are reimbursed for any out of pocket expenses incurred in attending meetings. All Board committee members receive $500 per meeting attended. Directors who are directors or employees of the Adviser or an affiliated company receive no compensation or expense reimbursement from the Fund. 4. DISTRIBUTION PLAN. The Fund's Board has adopted a distribution plan (the "Plan") for each class of shares pursuant to Rule 12b-1 under the 1940 Act. Gabelli & Company, Inc. ("Gabelli & Company"), an affiliate of the Adviser, serves as distributor of the Fund. Under the Class AAA, Class A, Class B, and Class C Share Plans, 12 GAMCO INTERNATIONAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ payments are authorized to Gabelli & Company at annual rates of 0.25%, 0.25%, 1.00%, and 1.00%, respectively, of the average daily net assets of those classes, the annual limitations under each Plan. Such payments are accrued daily and paid monthly. 5. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities for the fiscal year ended December 31, 2007, other than short-term U.S. Government securities, aggregated $10,888,884 and $24,230,241, respectively. 6. TRANSACTIONS WITH AFFILIATES. During the fiscal year ended December 31, 2007, Gabelli & Company informed the Fund that it received $1,571 from investors representing commissions (sales charges and underwriting fees) on sales and redemptions of Fund shares. The cost of calculating the Fund's NAV per share is a Fund expense pursuant to the Advisory Agreement between the Fund and the Adviser. During the fiscal year ended December 31, 2007, the Fund paid or accrued $45,000 to the Adviser in connection with the cost of computing the Fund's NAV. 7. LINE OF CREDIT. Effective June 20, 2007, the Fund participates in an unsecured line of credit of up to $75,000,000, and may borrow up to 10% of its net assets from the custodian for temporary borrowing purposes. Prior to June 20, 2007, the line of credit was $25,000,000. Borrowings under this arrangement bear interest at 0.75% above the federal funds rate on outstanding balances. This amount, if any, would be shown as "interest expense" in the Statement of Operations. At December 31, 2007, there were no borrowings outstanding under the line of credit. The average daily amount of borrowings outstanding from the line of credit within the fiscal year ended December 31, 2007 was $233,573, with a weighted average interest rate of 5.85%. The maximum amount borrowed at any time during the fiscal year ended December 31, 2007 was $1,436,000. 8. CAPITAL STOCK TRANSACTIONS. The Fund offers five classes of shares - Class AAA Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares. Effective February 15, 2007, Class AAA Shares are offered only to investors who were shareholders prior to that date in one or more of the registered funds distributed by Gabelli & Company. Class AAA Shares are offered to these investors only through selected broker/dealers, or the transfer agent without a sales charge. Class I Shares are offered to foundations, endowments, institutions, and employee benefit plans. Class A Shares are subject to a maximum front-end sales charge of 5.75%. Class B Shares are subject to a contingent deferred sales charge ("CDSC") upon redemption within six years of purchase and automatically convert to Class A Shares approximately eight years after the original purchase. The applicable CDSC is equal to a declining percentage of the lesser of the NAV per share at the date of the original purchase or at the date of redemption, based on the length of time held. Class C Shares are subject to a 1.00% CDSC for one year after purchase. Class B Shares are available only through exchange of Class B Shares of other funds distributed by Gabelli & Company. Class I Shares were first issued on January 11, 2008. The Fund imposes a redemption fee of 2.00% on Class AAA Shares, Class A Shares, Class B Shares, Class C Shares, and Class I Shares that are redeemed or exchanged on or before the seventh day after the date of a purchase. The redemption fee is deducted from the proceeds otherwise payable to the redeeming shareholders and is retained by the Fund. The redemption fees retained by the Fund during the fiscal years ended December 31, 2007 and December 31, 2006 amounted to $614 and $81, respectively. The redemption fee does not apply to redemptions of shares where (i) the shares were purchased through automatic reinvestment of dividends or other distributions, (ii) the redemption was initiated by the Fund, (iii) the shares were purchased through programs that collect the redemption fee at the program level and remit them to the Fund, or (iv) the shares were purchased through programs that the Adviser determines to have appropriate anti-short-term trading policies in place or as to which the Adviser has received assurances that look-through 13 GAMCO INTERNATIONAL GROWTH FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ redemption fee procedures or effective anti-short-term trading policies and procedures are in place. Transactions in shares of capital stock were as follows:
YEAR ENDED YEAR ENDED DECEMBER 31, 2007 DECEMBER 31, 2006 -------------------------- ------------------------- SHARES AMOUNT SHARES AMOUNT -------- ------------ -------- ------------ CLASS AAA CLASS AAA -------------------------- ------------------------- Shares sold .......................................... 165,211 $ 4,293,115 695,817 $ 15,649,575 Shares issued upon reinvestment of distributions ..... 77,246 2,020,742 40,739 995,655 Shares redeemed ...................................... (706,713) (18,298,601) (994,956) (22,719,217) -------- ------------ -------- ------------ Net decrease ....................................... (464,256) $(11,984,744) (258,400) $ (6,073,987) ======== ============ ======== ============ CLASS A CLASS A -------------------------- ------------------------- Shares sold .......................................... 5,980 $ 159,760 6,059 $ 138,288 Shares issued upon reinvestment of distributions ..... 434 11,472 151 3,740 Shares redeemed ...................................... (1,997) (51,814) (4,857) (108,342) -------- ------------ -------- ------------ Net increase ....................................... 4,417 $ 119,418 1,353 33,686 ======== ============ ======== ============ CLASS B CLASS B -------------------------- ------------------------- Shares issued upon reinvestment of distributions ..... 7 $ 172 19 $ 463 Shares redeemed ...................................... (2,001) (49,388) (1) (10) -------- ------------ -------- ------------ Net increase (decrease) ............................ (1,994) $ (49,216) 18 $ 453 ======== ============ ======== ============ CLASS C CLASS C -------------------------- ------------------------- Shares sold .......................................... 2,128 $ 56,429 1,616 $ 35,109 Shares issued upon reinvestment of distributions ..... 145 3,638 28 668 Shares redeemed ...................................... (81) (2,116) (228) (5,334) -------- ------------ -------- ------------ Net increase ....................................... 2,192 $ 57,951 1,416 $ 30,443 ======== ============ ======== ============
9. INDEMNIFICATIONS. The Fund enters into contracts that contain a variety of indemnifications. The Fund's maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts and expects the risk of loss to be remote. 10. OTHER MATTERS. The Adviser and/or affiliates received subpoenas from the Attorney General of the State of New York and the SEC requesting information on mutual fund share trading practices involving certain funds managed by the Adviser. GAMCO Investors, Inc. ("GAMCO"), the Adviser's parent company, responded to these requests for documents and testimony. In June 2006, GAMCO began discussions with the SEC regarding a possible resolution of their inquiry. In February 2007, the Adviser made an offer of settlement to the staff of the SEC for communication to the Commission for its consideration to resolve this matter. This offer of settlement is subject to agreement regarding the specific language of the SEC's administrative order and other settlement documents. On a separate matter, in September 2005, the Adviser was informed by the staff of the SEC that the staff may recommend to the Commission that an administrative remedy and a monetary penalty be sought from the Adviser in connection with the actions of two of nine closed-end funds managed by the Adviser relating to Section 19(a) and Rule 19a-1 of the 1940 Act. These provisions require registered investment companies to provide written statements to shareholders when a dividend is made from a source other than net investment income. While the two closed-end funds sent annual statements and provided other materials containing this information, the funds did not send written statements to shareholders with each distribution in 2002 and 2003. The Adviser believes that all of the funds are now in compliance. The Adviser believes that these matters would have no effect on the Fund or any material adverse effect on the Adviser or its ability to manage the Fund. 14 GAMCO INTERNATIONAL GROWTH FUND, INC. FINANCIAL HIGHLIGHTS ================================================================================ Selected data for a share of capital stock outstanding throughout each period:
INCOME FROM INVESTMENT OPERATIONS DISTRIBUTIONS -------------------------------------- ---------------------------------------- Net Net Asset Net Realized and Total Net Period Value, Investment Unrealized from Net Realized Ended Beginning Income/ Gain/(Loss) on Investment Investment Gain on Total December 31 of Period (Loss)(a) Investments Operations Income Investments Distributions - ----------- ---------- ---------- ------------ ---------- ---------- ------------- ------------- CLASS AAA 2007 $24.57 $ 0.33 $2.34 $2.67 $(0.35) $(0.70) $(1.05) 2006 20.63 0.38 3.99 4.37 (0.43) -- (0.43) 2005 18.75 0.09 1.88 1.97 (0.09) -- (0.09) 2004 16.10 0.06 2.62 2.68 (0.05) -- (0.05) 2003 11.79 0.01 4.27 4.28 (0.01) -- (0.01) CLASS A 2007 $24.82 $ 0.36 $2.33 $2.69 $(0.36) $(0.70) $(1.06) 2006 20.84 0.36 4.05 4.41 (0.43) -- (0.43) 2005 18.92 0.11 1.88 1.99 (0.07) -- (0.07) 2004 16.28 0.07 2.61 2.68 (0.06) -- (0.06) 2003 11.91 (0.04) 4.39 4.35 (0.03) -- (0.03) CLASS B 2007 $24.00 $ 0.13 $2.27 $2.40 -- $(0.70) $(0.70) 2006 20.18 0.20 3.89 4.09 $(0.27) -- (0.27) 2005 18.40 (0.06) 1.84 1.78 -- -- -- 2004 15.87 (0.04) 2.55 2.51 -- -- -- 2003 11.70 (0.09) 4.22 4.13 -- -- -- CLASS C 2007 $23.67 $ 0.27 $2.10 $2.37 $(0.26) $(0.70) $(0.96) 2006 20.00 0.00(b) 4.06 4.06 (0.39) -- (0.39) 2005 18.24 (0.18) 1.98 1.80 (0.04) -- (0.04) 2004 15.73 (0.07) 2.56 2.49 -- -- -- 2003 11.70 (0.11) 4.12 4.01 -- -- --
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA ----------------------------------------------------------- Operating Net Asset Net Assets Net Expense Period Value, End of Investment Ratio (Net Portfolio Ended Redemption End of Total Period Income/ Operating of Interest Turnover December 31 Fees(a) Period Return+ (in 000's) (Loss) Expenses Expense) Rate - ----------- ---------- -------- ------- ---------- ---------- -------- ----------- --------- CLASS AAA 2007 $0.00(b) $26.19 10.9% $56,678 1.26% 1.91% 1.87% 18% 2006 0.00(b) 24.57 21.2 64,573 1.70 1.79 1.78 18 2005 0.00(b) 20.63 10.5 59,554 0.48 1.89 1.88 19 2004 0.02 18.75 16.8 55,427 0.35 1.84 1.84 16 2003 0.04 16.10 36.7 42,009 0.07 1.97 1.94 19 CLASS A 2007 $0.00(b) $26.45 10.9% $ 473 1.34% 1.91% 1.87% 18% 2006 0.00(b) 24.82 21.1 334 1.60 1.79 1.78 18 2005 0.00(b) 20.84 10.5 253 0.56 1.89 1.88 19 2004 0.02 18.92 16.8 202 0.40 1.84 1.84 16 2003 0.05 16.28 36.7 90 (0.29) 1.93 1.90 19 CLASS B 2007 $0.00(b) $25.70 10.0% $ 12 0.51% 2.66% 2.62% 18% 2006 0.00(b) 24.00 20.2 59 0.91 2.54 2.53 18 2005 0.00(b) 20.18 9.7 49 (0.31) 2.63 2.62 19 2004 0.02 18.40 15.9 84 (0.23) 2.59 2.59 16 2003 0.04 15.87 35.6 22 (0.73) 2.71 2.69 19 CLASS C 2007 $0.00(b) $25.08 10.1% $ 109 1.05% 2.66% 2.62% 18% 2006 0.00(b) 23.67 20.2 52 (0.01) 2.54 2.53 18 2005 0.00(b) 20.00 9.9 15 (0.95) 2.62 2.61 19 2004 0.02 18.24 16.0 5 (0.40) 2.59 2.59 16 2003 0.02 15.73 34.4 5 (0.84) 2.82 2.82 19
- ------------- + Total return represents aggregate total return of a hypothetical $1,000 investment at the beginning of the period and sold at the end of the period including reinvestment of distributions and does not reflect applicable sales charges. (a) Per share amounts have been calculated using the average shares outstanding method. (b) Amount represents less than $0.005 per share. See accompanying notes to financial statements. 15 GAMCO INTERNATIONAL GROWTH FUND, INC. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ================================================================================ To the Shareholders and Board of Directors of GAMCO International Growth Fund, Inc. We have audited the accompanying statement of assets and liabilities of GAMCO International Growth Fund, Inc. (the "Fund"), including the schedule of investments, as of December 31, 2007, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the Fund's custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of GAMCO International Growth Fund, Inc. at December 31, 2007, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles. /s/ ERNST & YOUNG LLP Philadelphia, Pennsylvania February 21, 2008 16 GAMCO INTERNATIONAL GROWTH FUND, INC. ADDITIONAL FUND INFORMATION (UNAUDITED) ================================================================================ The business and affairs of the Fund are managed under the direction of the Fund's Board of Directors. Information pertaining to the Directors and officers of the Fund is set forth below. The Fund's Statement of Additional Information includes additional information about the Fund's Directors and is available, without charge, upon request, by calling 800-GABELLI (800-422-3554) or by writing to the GAMCO International Growth Fund, Inc. at One Corporate Center, Rye, NY 10580-1422.
TERM OF NUMBER OF NAME, POSITION(S) OFFICE AND FUNDS IN FUND ADDRESS(1) LENGTH OF COMPLEX OVERSEEN PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS AND AGE TIME SERVED(2) BY DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR(4) ------- -------------- ----------- ---------------------- ------------------ INTERESTED DIRECTORS(3): - ------------------------ MARIO J. GABELLI Since 1994 26 Chairman and Chief Executive Officer of Director of Morgan Group Director GAMCO Investors, Inc. and Chief Investment Holdings, Inc. (holding company); Age: 65 Officer - Value Portfolios of Gabelli Funds, Chairman of the Board of LICT Corp. LLC and GAMCO Asset Management Inc.; (multimedia and communication Director/Trustee or Chief Investment services company) Officer of other registered investment companies in the Gabelli/GAMCO Funds complex; Chairman and Chief Executive Officer of GGCP, Inc. INDEPENDENT DIRECTORS(5): - ------------------------- ANTHONY J. COLAVITA Since 1994 35 Partner in the law firm of -- Director Anthony J. Colavita, P.C. Age: 72 WERNER J. ROEDER, MD Since 1994 23 Medical Director of Lawrence Hospital and -- Director practicing private physician Age: 67 ANTHONIE C. VAN EKRIS Since 1994 19 Chairman of BALMAC International, Inc. -- Director (commodities and futures trading) Age: 73 SALVATORE J. ZIZZA Since 2004 26 Chairman of Zizza & Co., Ltd. Director of Hollis-Eden Director (consulting) Pharmaceuticals (biotechnology); Age: 62 Director of Earl Scheib, Inc. (automotive services)
17 GAMCO INTERNATIONAL GROWTH FUND, INC. ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED) ================================================================================
TERM OF NAME, POSITION(S) OFFICE AND ADDRESS(1) LENGTH OF PRINCIPAL OCCUPATION(S) AND AGE TIME SERVED(2) DURING PAST FIVE YEARS ------- -------------- ---------------------- OFFICERS: - --------- BRUCE N. ALPERT Since 1994 Executive Vice President and Chief Operating Officer President of Gabelli Funds, LLC since 1988 and an officer of most Age: 56 of the registered investment companies in the Gabelli/GAMCO Funds complex. Director and President of Gabelli Advisers, Inc. since 1998 JAMES E. MCKEE Since 1995 Vice President, General Counsel, and Secretary of GAMCO Investors, Inc. Secretary since 1999 and GAMCO Asset Management Inc. since 1993; Secretary Age: 44 of all of the registered investment companies in the Gabelli/GAMCO Funds complex AGNES MULLADY Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer of all of Treasurer the registered investment companies in the Gabelli/GAMCO Funds complex; Age: 49 Senior Vice President of U.S. Trust Company, N.A. and Treasurer and Chief Financial Officer of Excelsior Funds from 2004 through 2005; Chief Financial Officer of AMIC Distribution Partners from 2002 through 2004; Controller of Reserve Management Corporation and Reserve Partners, Inc. and Treasurer of Reserve Funds from 2000 through 2002 PETER D. GOLDSTEIN Since 2004 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004; Chief Compliance Officer Chief Compliance Officer of all of the registered investment Age: 54 companies in the Gabelli/GAMCO Funds complex; Vice President of Goldman Sachs Asset Management from 2000 through 2004
- ------------ 1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted. 2 Each Director will hold office for an indefinite term until the earliest of (i) the next meeting of shareholders, if any, called for the purpose of considering the election or re-election of such Director and until the election and qualification of his or her successor, if any, elected at such meeting, or (ii) the date a Director resigns or retires, or a Director is removed by the Board of Directors or shareholders, in accordance with the Fund's ByLaws and Articles of Incorporation. Each officer will hold office for an indefinite term until the date he or she resigns or retires or until his or her successor is elected and qualified. 3 "Interested person" of the Fund as defined in the 1940 Act. Mr. Gabelli is considered an "interested person" because of his affiliation with Gabelli Funds, LLC which acts as the Fund's investment adviser. 4 This column includes only directorships of companies required to report to the SEC under the Securities Exchange Act of 1934, as amended (i.e. public companies) or other investment companies registered under the 1940 Act. 5 Directors who are not interested persons are considered "Independent" Directors. 18 GAMCO INTERNATIONAL GROWTH FUND, INC. ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED) ================================================================================ - -------------------------------------------------------------------------------- 2007 TAX NOTICE TO SHAREHOLDERS (Unaudited) For the year ended December 31, 2007, the Fund paid to shareholders, on December 27, 2007, an ordinary income dividend (comprised of net investment income) totaling $0.352, $0.363, and $0.264 per share for Class AAA, Class A, and Class C, respectively, and long-term capital gains totaling $1,479,911 which is designated as a capital gain dividend. For the year ended December 31, 2007, 86.17% of the ordinary income distribution qualifies for the dividends received deduction available to corporations, and 100% of the ordinary income distribution was qualified dividend income. Also for the year ended December 31, 2007, the Fund passed through foreign tax credits of $0.045 per share to Class AAA, Class A, Class B, and Class C shareholders. U.S. GOVERNMENT INCOME The percentage of the ordinary income dividend paid by the Fund during fiscal year 2007 which was derived from U.S. Treasury securities was 0.09%. Such income is exempt from state and local tax in all states. However, many states, including New York and California, allow a tax exemption for a portion of the income earned only if a mutual fund has invested at least 50% of its assets at the end of each quarter of the Fund's fiscal year in U.S. Government securities. The GAMCO International Growth Fund did not meet this strict requirement in 2007. Due to the diversity in state and local tax law, it is recommended that you consult your personal tax adviser as to the applicability of the information provided to your specific situation. - -------------------------------------------------------------------------------- 19 GAMCO INTERNATIONAL GROWTH FUND, INC. One Corporate Center Rye, New York 10580-1422 800-GABELLI 800-422-3554 FAX: 914-921-5118 WEBSITE: WWW.GABELLI.COM E-MAIL: INFO@GABELLI.COM Net Asset Value per share available daily by calling 800-GABELLI after 6:00 P.M. BOARD OF DIRECTORS Mario J. Gabelli, CFA Werner J. Roeder, MD CHAIRMAN AND CHIEF MEDICAL DIRECTOR EXECUTIVE OFFICER LAWRENCE HOSPITAL GAMCO INVESTORS, INC. Anthony J. Colavita Anthonie C. van Ekris ATTORNEY-AT-LAW CHAIRMAN ANTHONY J. COLAVITA, P.C. BALMAC INTERNATIONAL, INC. Salvatore J. Zizza CHAIRMAN ZIZZA & CO., LTD. OFFICERS AND PORTFOLIO MANAGER Caesar Bryan Bruce N. Alpert PORTFOLIO MANAGER PRESIDENT James E. McKee Agnes Mullady SECRETARY TREASURER Peter D. Goldstein CHIEF COMPLIANCE OFFICER DISTRIBUTOR Gabelli & Company, Inc. CUSTODIAN, TRANSFER AGENT, AND DIVIDEND AGENT State Street Bank and Trust Company LEGAL COUNSEL Paul, Hastings, Janofsky & Walker LLP - -------------------------------------------------------------------------------- This report is submitted for the general information of the shareholders of GAMCO International Growth Fund, Inc. It is not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. - -------------------------------------------------------------------------------- GAB009Q407SR GAMCO GAMCO INTERNATIONAL GROWTH FUND, INC. ANNUAL REPORT DECEMBER 31, 2007 ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. (d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. As of the end of the period covered by the report, the registrant's Board of Directors has determined that Salvatore J. Zizza is qualified to serve as an audit committee financial expert serving on its audit committee and that he is "independent," as defined by Item 3 of Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. AUDIT FEES (a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $37,300 for 2006 and $39,200 for 2007. AUDIT-RELATED FEES (b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $0 for 2006 and $0 for 2007. TAX FEES (c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $3,900 for 2006 and $4,100 for 2007. Tax fees represent tax compliance services provided in connection with the review of the Registrant's tax returns. ALL OTHER FEES (d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2006 and $0 for 2007. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. Pre-Approval Policies and Procedures. The Audit Committee ("Committee") of the registrant is responsible for pre-approving (i) all audit and permissible non-audit services to be provided by the independent registered public accounting firm to the registrant and (ii) all permissible non-audit services to be provided by the independent registered public accounting firm to the Adviser, Gabelli Funds, LLC, and any affiliate of Gabelli Funds, LLC ("Gabelli") that provides services to the registrant (a "Covered Services Provider") if the independent registered public accounting firm's engagement related directly to the operations and financial reporting of the registrant. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to the Chairperson of the Committee, and the Chairperson must report to the Committee, at its next regularly scheduled meeting after the Chairperson's pre-approval of such services, his or her decision(s). The Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in accordance with applicable laws, including the delegation of some or all of the Committee's pre-approval responsibilities to the other persons (other than Gabelli or the registrant's officers). Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the permissible non-audit services were not recognized by the registrant at the time of the engagement to be non-audit services; and (ii) such services are promptly brought to the attention of the Committee and approved by the Committee or Chairperson prior to the completion of the audit. (e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: (b) Not applicable (c) 100% (d) Not applicable (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was (0%) zero percent. (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $100,900 for 2006 and $69,100 for 2007. (h) The registrant's audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS. Schedule of Investments in securities of unaffiliated issuers as of the close of the reporting period is included as part of the report to shareholders filed under Item 1 of this form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's Board of Directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR 229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. 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. (registrant) GAMCO International Growth Fund, Inc. -------------------------------------------------------------------- By (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Officer Date 03/05/08 ---------------------------------------------------------------------------- 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 (Signature and Title)* /s/ Bruce N. Alpert ------------------------------------------------------- Bruce N. Alpert, Principal Executive Officer Date 03/05/08 ---------------------------------------------------------------------------- By (Signature and Title)* /s/ Agnes Mullady ------------------------------------------------------- Agnes Mullady, Principal Financial Officer and Treasurer Date 03/05/08 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CODE ETH 2 codeethics.txt CODE OF ETHICS 12-31-07 EX-99.CODE ETH GAMCO INVESTORS, INC. AND AFFILIATES - -------------------------------------------------------------------------------- JOINT CODE OF ETHICS FOR CHIEF EXECUTIVE AND SENIOR FINANCIAL OFFICERS OF THE GABELLI FUNDS - -------------------------------------------------------------------------------- Each affiliated registered investment company (each a "COMPANY") is committed to conducting business in accordance with applicable laws, rules and regulations and the highest standards of business ethics, and to full and accurate disclosure -- financial and otherwise -- in compliance with applicable law. This Code of Ethics, applicable to each Company's Chief Executive Officer, President, Chief Financial Officer and Treasurer (or persons performing similar functions) (together, "SENIOR OFFICERS"), sets forth policies to guide you in the performance of your duties. As a Senior Officer, you must comply with applicable law. You also have a responsibility to conduct yourself in an honest and ethical manner. You have leadership responsibilities that include creating a culture of high ethical standards and a commitment to compliance, maintaining a work environment that encourages the internal reporting of compliance concerns and promptly addressing compliance concerns. This Code of Ethics recognizes that the Senior Officers are subject to certain conflicts of interest inherent in the operation of investment companies, because the Senior Officers currently or may in the future serve as Senior Officers of each of the Companies, as officers or employees of the investment advisor to the Companies or service providers thereof (the "ADVISOR") and/or affiliates of the Advisor (the "Advisory Group") and as officers or trustees/directors of other registered investment companies and unregistered investment funds advised by the Advisory Group. This Code of Ethics also recognizes that certain laws and regulations applicable to, and certain policies and procedures adopted by, the Companies or the Advisory Group govern your conduct in connection with many of the conflict of interest situations that arise in connection with the operations of the Companies, including: o the Investment Company Act of 1940, and the rules and regulation promulgated thereunder by the Securities and Exchange Commission (the "1940 ACT"); o the Investment Advisers Act of 1940, and the rules and regulations promulgated thereunder by the Securities and Exchange Commission (the "ADVISERS ACT"); o the Code of Ethics adopted by each Company pursuant to Rule 17j-1(c) under the 1940 Act (collectively, the "TRUST'S 1940 ACT CODE OF ETHICS"); o one or more codes of ethics adopted by the Advisory Group that have been reviewed and approved by those trustees/directors (the "DIRECTORS") of each Company that are not "interested persons" of such Company (the "INDEPENDENT DIRECTORS") within the meaning of the 1940 Act (the "ADVISORY GROUP'S 1940 ACT CODE OF ETHICS" and, together with such Company's 1940 Act Code of Ethics, the "1940 ACT CODES OF ETHICS"); o the policies and procedures adopted by each Company to address conflict of interest situations, such as procedures under Rule 10f-3, Rule 17a-7 and Rule 17e-1 under the 1940 Act (collectively, the "CONFLICT POLICIES"); and o the Advisory Group's policies and procedures to address, among other things, conflict of interest situations and related matters (collectively, the "ADVISORY POLICIES"). The provisions of the 1940 Act, the Advisers Act, the 1940 Act Codes of Ethics, the Conflict Policies and the Advisory Policies are referred to herein collectively as the "ADDITIONAL CONFLICT RULES". This Code of Ethics is different from, and is intended to supplement, the Additional Conflict Rules. Accordingly, a violation of the Additional Conflict Rules by a Senior Officer is hereby deemed not to be a violation of this Code of Ethics, unless and until the Directors shall determine that any such violation of the Additional Conflict Rules is also a violation of this Code of Ethics. SENIOR OFFICERS SHOULD ACT HONESTLY AND CANDIDLY Each Senior Officer has a responsibility to each Company to act with integrity. Integrity requires, among other things, being honest and candid. Deceit and subordination of principle are inconsistent with integrity. Each Senior Officer must: o act with integrity, including being honest and candid while still maintaining the confidentiality of information where required by law or the Additional Conflict Rules; o comply with the laws, rules and regulations that govern the conduct of each Company's operations and report any suspected violations thereof in accordance with the section below entitled "Compliance With Code Of Ethics"; and o adhere to a high standard of business ethics. CONFLICTS OF INTEREST A conflict of interest for the purpose of this Code of Ethics occurs when your private interests interfere in any way, or even appear to interfere, with the interests of a Company. Senior Officers are expected to use objective and unbiased standards when making decisions that affect each Company, keeping in mind that Senior Officers are subject to certain inherent conflicts of interest because Senior Officers of a Company also are or may be officers of other Companies and/or the Advisory Group (as a result of which it is incumbent upon you to be familiar with and to seek to comply with the Additional Conflict Rules). You are required to conduct the business of each Company in an honest and ethical manner, including the ethical handling of actual or apparent conflicts of interest between personal and business relationships. When making any investment, accepting any position or benefits, participating in any transaction or business arrangement or otherwise acting in a manner that creates or appears to create a conflict of interest with respect to each Company where you are receiving a personal benefit, you should act in accordance with the letter and spirit of this Code of Ethics. If you are in doubt as to the application or interpretation of this Code of Ethics to you as a Senior Officer of a Company, you should make full disclosure of all relevant facts and circumstances to the Chief Compliance Officer of the Advisory Group (the "CCO") and obtain the approval of the CCO prior to taking action. Some conflict of interest situations that should always be approved by the CCO, if material, include the following: o the receipt of any entertainment or non-nominal gift by the Senior Officer, or a member of his or her family, from any company with which a Company has current or prospective business dealings (other than the Advisory Group), unless such entertainment or gift is business related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any ownership interest in, or any consulting or employment relationship with, of any of the Companies' service providers, other than the Advisory Group; or o a direct or indirect financial interest in commissions, transaction charges or spreads paid by a Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Senior Officer's employment by the Advisory Group, such as compensation or equity ownership. DISCLOSURES It is the policy of each Company to make full, fair, accurate, timely and understandable disclosure in compliance with all applicable laws and regulations in all reports and documents that such Company files with, or submits to, the Securities and Exchange Commission or a national securities exchange and in all other public communications made by such Company. As a Senior Officer, you are required to promote compliance with this policy and to abide by such Company's standards, policies and procedures designed to promote compliance with this policy. Each Senior Officer must: o familiarize himself or herself with the disclosure requirements applicable to each Company as well as the business and financial operations of each Company; and o not knowingly misrepresent, or cause others to misrepresent, facts about any Company to others, including to the Directors, such Company's independent auditors, such Company's counsel, any counsel to the Independent Directors, governmental regulators or self-regulatory organizations. COMPLIANCE WITH CODE OF ETHICS If you know of or suspect a violation of this Code of Ethics or other laws, regulations, policies or procedures applicable to the Trust, you must report that information on a timely basis to the CCO or report it anonymously by following the "whistle blower" policies adopted by the Advisory Group from time to time. NO ONE WILL BE SUBJECT TO RETALIATION BECAUSE OF A GOOD FAITH REPORT OF A SUSPECTED VIOLATION. Each Company will follow these procedures in investigating and enforcing this Code of Ethics, and in reporting on this Code of Ethics: o the CCO will take all appropriate action to investigate any actual or potential violations reported to him or her; o violations and potential violations will be reported to the Board of Directors of each affected Company after such investigation; o if the Board of Directors determines that a violation has occurred, it will take all appropriate disciplinary or preventive action; and o appropriate disciplinary or preventive action may include a letter of censure, suspension, dismissal or, in the event of criminal or other serious violations of law, notification of the Securities and Exchange Commission or other appropriate law enforcement authorities. WAIVERS OF CODE OF ETHICS Except as otherwise provided in this Code of Ethics, the CCO is responsible for applying this Code of Ethics to specific situations in which questions are presented to the CCO and has the authority to interpret this Code of Ethics in any particular situation. The CCO shall take all action he or she considers appropriate to investigate any actual or potential violations reported under this Code of Ethics. The CCO is authorized to consult, as appropriate, with the chair of the Governance Committee and with counsel to the affected Company, the Advisory Group or the Independent Directors, and is encouraged to do so. The Board of Directors, the affected Company is responsible for granting waivers of this Code of Ethics, as appropriate. Any changes to or waivers of this Code of Ethics will, to the extent required, be disclosed on Form N-CSR, or otherwise, as provided by Securities and Exchange Commission rules. RECORDKEEPING Each Company will maintain and preserve for a period of not less than six (6) years from the date an action is taken, the first two (2) years in an easily accessible place, a copy of the information or materials supplied to the Boards of Directors pursuant to this Code of Ethics: o that provided the basis for any amendment or waiver to this Code of Ethics; and o relating to any violation of this Code of Ethics and sanctions imposed for such violation, together with a written record of the approval or action taken by the relevant Board of Directors. CONFIDENTIALITY All reports and records prepared or maintained pursuant to this Code of Ethics shall be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code of Ethics, such matters shall not be disclosed to anyone other than the Independent Trustees and their counsel, the Companies and their counsel, the Advisory Group and its counsel and any other advisors, consultants or counsel retained by the Directors, the Independent Directors or any committee of Directors. AMENDMENTS This Code of Ethics may not be amended as to any Company except in written form, which is specifically approved by a majority vote of the affected Company's Directors, including a majority of its Independent Directors. NO RIGHTS CREATED This Code of Ethics is a statement of certain fundamental principles, policies and procedures that govern each of the Senior Officers in the conduct of the Companies' business. It is not intended to and does not create any rights in any employee, investor, supplier, competitor, shareholder or any other person or entity. ACKNOWLEDGMENT FORM I have received and read the Joint Code of Ethics for Chief Executive and Senior Financial Officers, and I understand its contents. I agree to comply fully with the standards contained in the Code of Ethics and the Company's related policies and procedures. I understand that I have an obligation to report any suspected violations of the Code of Ethics on a timely basis to the Chief Compliance Officer or report it anonymously by following the "whistle blower" policies adopted by the Advisory Group from time to time. ------------------------------- Printed Name ------------------------------- Signature ------------------------------- Date EX-99.CERT 3 exh302.txt EXHIBIT TO SECTION 302 OF SOA CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Bruce N. Alpert, certify that: 1. I have reviewed this report on Form N-CSR of GAMCO International Growth 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 second fiscal quarter of the period covered by this 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: 03/05/08 /s/ Bruce N. Alpert --------------------- ----------------------------------------------- Bruce N. Alpert, Principal Executive Officer CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Agnes Mullady, certify that: 1. I have reviewed this report on Form N-CSR of GAMCO International Growth 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 second fiscal quarter of the period covered by this 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: 03/05/08 /s/ Agnes Mullady --------------------- ---------------------------------------------- Agnes Mullady, Principal Financial Officer and Treasurer EX-99.906CERT 4 exh906.txt EXHIBIT TO SECTION 906 OF SOA CERTIFICATION PURSUANT TO RULE 30A-2(B) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, Bruce N. Alpert, Principal Executive Officer of GAMCO International Growth Fund, Inc. (the "Registrant"), certify that: 1. The Form N-CSR of the Registrant (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: 03/05/08 /s/ Bruce N. Alpert ------------------------ -------------------------------------------- Bruce N. Alpert, Principal Executive Officer I, Agnes Mullady, Principal Financial Officer and Treasurer of GAMCO International Growth Fund, Inc. (the "Registrant"), certify that: 1. The Form N-CSR of the Registrant (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: 03/05/08 /s/ Agnes Mullady ----------------------- -------------------------------------------- Agnes Mullady, Principal Financial Officer and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----