THE CENTRAL EUROPE, RUSSIA AND TURKEY FUND, INC.NOTES TO FINANCIAL STATEMENTS — APRIL 30, 2013 (unaudited) (continued)as a result of security sales are reflected as a component ofnet realized gain/loss on investments.The Fund has reviewed the tax positions for the open taxyears as of October 31, 2012 and has determined that noprovision for income tax is required in the Fund’s financialstatements. The Fund’s federal tax returns for the priorthree fiscal years remain open subject to examinations bythe Internal Revenue Service.Dividends and Distributions to Shareholders: The Fundrecords dividends and distributions to its shareholders onthe ex-dividend date. The timing and character of certain incomeand capital gain distributions are determined annuallyin accordance with United States federal income tax regulationswhich may differ from accounting principles generallyaccepted in the United States of America. These differencesprimarily relate to investments in foreign denominated investments,investments in foreign passive investment companies,recognition of certain foreign currency gains(losses) as ordinary income (loss) and certain securities soldat a loss. As a result, net investment income (loss) and netrealized gain (loss) on investment transactions for a reportingperiod may differ significantly from distributions duringsuch period. Accordingly, the Fund may periodically makereclassifications among certain of its capital accounts withoutimpacting the NAV of the Fund.The tax character of current year distributions will be determinedat the end of the current fiscal year.NOTE 2. INVESTMENT ADVISORY ANDADMINISTRATION AGREEMENTSThe Fund is party to an Investment Advisory Agreementwith Deutsche Asset Management International GmbH(“DeAMI”). The Fund also has an AdministrationAgreement with Deutsche Investment ManagementAmericas Inc. (“DIMA”). DeAMI and DIMA are affiliatedcompanies.Under the Investment Advisory Agreement with DeAMI,DeAMI directs the investments of the Fund in accordancewith its investment objectives, policies and restrictions.DeAMI determines the securities, instruments and othercontracts relating to investments to be purchased, sold orentered into by the Fund.The Investment Advisory Agreement provides DeAMI witha fee, computed weekly and payable monthly, at the annualrate of 0.80% of the Fund’s average weekly net assets up toand including $100 million, 0.60% of such assets in excessof $100 million and up to and including $500 million,0.55% of such assets in excess of $500 million and up toand including $750 million, and 0.50% of such assets in excessof $750 million.Accordingly, for the six months ended April 30, 2013, thefee pursuant to the Investment Advisory Agreement wasequivalent to an annual effective rate of 0.64% of theFund’s average daily net assets.Under the Administration Agreement with DIMA, DIMAprovides all of the non-investment advisory services to theFund. The Administration Agreement provides DIMA witha fee, computed weekly and payable monthly, of 0.20% ofthe Fund’s average weekly net assets. For the six monthsended April 30, 2013, the Administration Fee was$475,786, of which $82,872 is unpaid.NOTE 3. TRANSACTIONS WITH AFFILIATES<strong>DWS</strong> <strong>Investments</strong> Service Company (“DISC”), an affiliateof DIMA, is the transfer agent, dividend-paying agent andshareholder service agent of the Fund. Pursuant to a subtransferagency agreement between DISC and DSTSystems, Inc. (“DST”), DISC has delegated certain transferagent and dividend-paying agent paying functions to DST.DISC compensates DST out of the shareholder servicingfee it receives from the Fund. For the six months endedApril 30, 2013, the amount charged to the Fund by DISCaggregated $9,851, of which $1,150 is unpaid.Deutsche Bank AG, the German parent of DIMA andDeAMI, and its affiliates may receive brokerage commissionsas a result of executing agency transactions in portfoliosecurities on behalf of the Fund, that the Board determinedwere effected in compliance with the Fund’s23
THE CENTRAL EUROPE, RUSSIA AND TURKEY FUND, INC.NOTES TO FINANCIAL STATEMENTS — APRIL 30, 2013 (unaudited) (continued)Rule 17e-1 procedures. For the six months ended April 30,2013, Deutsche Bank did not receive brokeragecommissions.Certain Officers of the Fund are also officers of DIMA orDeAMI.The Fund pays each Director who is not an “interested person”of DIMA or DeAMI retainer fees plus specifiedamounts for attended board and committee meetings.The Fund may invest uninvested cash balances in CentralCash Management Fund, which is managed by DIMA. TheFund indirectly bears its proportionate share of the expensesof Central Cash Management Fund. Central CashManagement Fund does not pay DIMA an investment managementfee. Central Cash Management Fund seeks a highlevel of current income consistent with the liquidity and thepreservation of capital.NOTE 4. PORTFOLIO SECURITIESPurchases and sales of investment securities, excludingshort-term investments, for the six months ended April 30,2013 were $89,155,802 and $115,333,699, respectively.NOTE 5. INVESTING IN FOREIGN MARKETSForeign investments may involve certain considerations andrisks as a result of, among others, the possibility of politicaland economic developments, and the level of governmentalsupervision and regulation of foreign securities markets. Inaddition, certain foreign markets may be substantiallysmaller, less developed, less liquid and more volatile thanthe major markets of the United States. Any fund that focusesin a particular segment of the market will generallybe more volatile than a fund that invests more broadly.NOTE 6. CAPITALDuring the six months ended April 30, 2013 and the yearended October 31, 2012, the Fund purchased 252,493 and530,644 of its shares of common stock on the open marketat a total cost of $8,012,644 and $17,098,411 ($31.73 and$32.23 average per share), respectively. The weightedaverage discount of these purchased shares comparing thepurchased price to the NAV at the time of was 11.20% and9.44%, respectively.During the six months ended April 30, 2013, the Fund accepted654,331 tendered shares of common stock at a totalcost of $24,092,467 at a repurchase price of $36.82 pershare, which was equal to 98% of the NAV per share onMarch 13, 2013.During the six months ended April 30, 2013, and the yearended October 31, 2012, the Fund issued for dividend reinvestment137,421 and 394,788 shares respectively. The averagediscount of these issued shares comparing the issueprice to the NAV at the time of issuance was 9.39% and8.37%, respectively.NOTE 7. SHARE REPURCHASES AND TENDEROFFERSOn July 18, 2011, the Fund announced that the Board ofDirectors approved an extension of the share repurchaseprogram permitting the Fund to repurchase up to 700,000shares during the twelve-month period August 1, 2011through July 31, 2012. The Fund repurchased 509,609shares from August 1, 2011 through July 31, 2012 underthis authorization. On July 18, 2012, the Fund announcedthat the Board of Directors approved the extension of theshare repurchase program permitting the Fund to repurchaseup to 700,000 shares during the period August 1,2012 through July 31, 2013. The Fund repurchased 478,046shares between August 1, 2012 and April 30, 2013.Repurchases will be made from time to time when they arebelieved to be in the best interest of the Fund. There can beno assurance that the Fund’s repurchases or DiscountManagement Program will reduce the spread between themarket price of the Fund’s shares and it’s NAV per share.Monthly updates concerning the Fund’s repurchase programare available on its web site at www.ceefund.com.On July 18, 2012, the Fund announced that the Board ofDirectors approved a series of up to four consecutivesemiannual tender offers, each for up to 5% of the Fund’soutstanding shares at a price equal to 98% of NAV. Underthe Fund’s Discount Management Program, the Fund is24
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