The Brazil Fund, Inc.
Annual Report
December 31, 1997
A closed-end investment company seeking long-term capital appreciation through
investment primarily in the equity securities of Brazilian issuers.
The Brazil Fund, Inc.
<PAGE>
The Brazil Fund, Inc.
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Investment objective and policies
o long-term capital appreciation through investment primarily in equity
securities of Brazilian issuers
Investment characteristics
o closed-end investment company investing in a broad spectrum of Brazilian
industries o a vehicle for international diversification through
participation in the Brazilian economy
General Information
==========================================
- ------------------------------------------
Executive offices
The Brazil Fund, Inc.
345 Park Avenue
New York, NY 10154
For Fund information: 1-800-349-4281
Transfer agent, registrar and dividend
reinvestment plan agent
For account information: 1-800-426-5523
The First National Bank of Boston
Attn. Investor Relations Department
P.O. Box 8200
Boston, MA 02266-8200
Custodian
Brown Brothers Harriman & Co.
Legal counsel
Debevoise & Plimpton
Independent Accountants
Price Waterhouse LLP
New York Stock Exchange Symbol -- BZF
Contents
====================================================
- ----------------------------------------------------
In Brief 3
Letter to Shareholders 3
Investment Summary 6
Portfolio Summary 7
Investment Portfolio 8
Financial Statements 11
Financial Highlights 14
Notes to Financial Statements 15
Report of Independent Accountants 19
Tax Information 20
Stockholder Meeting Results 21
Dividend Reinvestment
and Cash Purchase Plan 22
Investment Manager and Administrator Back cover
Directors and Officers Back cover
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This report is sent to the shareholders of The Brazil Fund, Inc. for their
information. It is not a prospectus, circular, or representation intended for
use in the purchase or sale of shares of the Fund or of any securities mentioned
in the report.
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2
<PAGE>
The Brazil Fund, Inc.
In Brief
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o The Brazil Fund, Inc. posted a 19.75% return based on net asset value in
1997, including the reinvestment of the $0.49 and $2.77 per share
distributions paid on March 31, 1997 and January 13, 1998 to shareholders of
record on March 17, 1997 and December 31, 1997, respectively.
o The Brazilian stock market rose 46% to reach an historical peak in the first
half of 1997, but due to the deterioration of the economic situation in Asia,
investment valuations collapsed in the second half of the year, resulting in
a 17.8% increase for the entire year.
o A successful privatization effort in 1998 will be important to Brazil's image
among foreign investors going forward. Total privatization proceeds were
$22.5 billion in 1997, and upwards of $35 billion is expected for 1998.
Letter to Shareholders
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Dear Shareholders:
We are pleased to report on the investment activities of The Brazil Fund,
Inc. for the year ended December 31, 1997.
The Fund's total return based on net asset value was 19.75% for the year.
This performance reflects the reinvestment of the $0.49 and $2.77 per share
distributions paid on March 31, 1997 and January 13, 1998 to shareholders of
record on March 17, 1997 and December 31, 1997, respectively. With the January
1998 payment, total cash distributions paid by the Fund since its initial public
offering have amounted to $179.6 million, or $13.41 per share. There may be
advantages to shareholders in participating in the Fund's reinvestment plan,
especially when the stock is selling at a discount to underlying net asset
value, as was the case at 1997 year-end. Details of the plan may be found on
page 22 of this report.
The total investment return for the Fund's publicly traded shares was 10.16%
in 1997. This reflected the change in market price of the stock over the course
of the year and the reinvestment of distributions to shareholders. The Sao Paulo
Stock Exchange Index, which is heavily weighted by the common and preferred
shares of Telebras, rose 34.86% for the year.
The Brazilian stock market led two lives during 1997. This is best seen
through the changes in the market capitalization of the Sao Paulo Stock
Exchange. For the first half of the year, the market's value rose 46%, reaching
an historical peak of $317 billion at the end of June. Shares of the Fund gained
42% during the period. During the second half of the year, the market's
capitalization fell 19.4% from the June peak, closing the year at $255.4
billion, a 17.8% increase for the year as a whole.
The bull market in the first half of the year mirrored enthusiasm for the
government's success in its privatization program and battle against inflation.
In addition, the market appeared to have received considerable support from
increased buying by Brazilian investors through their local equity mutual funds.
Many of The Brazil Fund's holdings were lifted to lofty valuations, and it was
during this ebullient period that investments were reduced or eliminated for a
broad range of companies, including COPENE, White Martins, Cia. Hering, Sadia
Concordia, CESP, Hering Textile, CPFL and Celesc.
3
<PAGE>
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The collapse of investment valuations during the second half of the year was
clearly related to adverse financial developments in Asia. Thailand's banking
crisis in July ignited the so-called "Asian contagion" that devastated foreign
exchange and stock markets from the Philippines through Southeast Asia and up to
South Korea by way of Hong Kong, before spreading quickly to emerging markets
outside the region, chief among them being Brazil.
Brazil was vulnerable to a correction. Its dramatic stock market gains in the
first half of the year had made the market ripe for profit-taking. In addition,
as one of the major stars in the emerging market universe and widely represented
in portfolios around the globe, Brazil was unable to escape any investor
backlash against emerging market investing. The irony, of course, is that Brazil
was clearly free of the sins of crony capitalism and abuse of leverage that
characterized most of the faltering Asian markets. Nevertheless, the country
occupied a sensitive position in the eyes of many investors due to its
overvalued exchange rate, growing fiscal and current account deficits, and
Congressional procrastination in acting on President Cardoso's reform program
Adding to Brazil's woes was a sizable hole in its external accounts. There
was a $30 billion gap between the amount of dollars entering the country in 1997
through direct investment and other equity capital flows, and the amount leaving
as a result of the current account deficit and amortization of public and
private sector debt. With this gap, the country -- like the Asian Tigers -- was
hostage to the foreign investor's confidence in the management of the economy
and his willingness to roll over maturing loans. Confidence, unfortunately, was
in short supply in the wake of the turmoil in Asia.
Brazil lost almost $10 billion of foreign exchange reserves during the fourth
quarter. Quick action by the Cardoso administration to introduce a tough
austerity program appeared by year-end to have restored investor confidence in
the government's commitment to defending its foreign exchange regime, even at
the cost of a contraction in economic activity and an almost certain increase in
unemployment in the months ahead.
In our view, Brazil's major vulnerability is the gap in its external
accounts. Much of this problem is structural in nature and reflective of Latin
America's historical dependence on external savings to finance economic
development. It will take years to wean the Brazilian economy away from its
dependence on external debt. In the short run, however, the government should be
able to shrink a large portion of the gap in its external accounts by
eliminating or substantially reducing the trade deficit. This amounted to
approximately $8.4 billion last year. Last year's services deficit of $16.9
billion was half of the current account deficit of $33.8 billion. An estimated
$4 billion of this total was Brazil's net deficit on international travel. We
would expect to see fewer vacation trips to Disney World in 1998.
Finally, the government must continue to encourage foreign direct investment.
Brazil received $17 billion last year in foreign direct investment, only
one-third of which was linked to privatizations. As long as Brazil remains a
secure and profitable place for the foreign company to do business, with low
rates of inflation and predictable rules of the game with respect to tax policy,
labor laws and the like, the flow of equity capital from abroad should grow. The
longer term solution to Brazil's external financing gap is probably linked to
the longer term growth of foreign direct investment.
A successful privatization effort in 1998 is clearly important to Brazil's
image among foreign investors. Total privatization proceeds were $22.5 billion
last year, and upwards of $35 billion is expected for 1998. Unfortunately, 1998
is a presidential election year, and the privatization program has already
become a political bone of contention, raising the risk that winners of
4
<PAGE>
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privatization auctions might be disadvantaged at some future date by political
retribution for daring to buy state enterprises. Populist chatter of this nature
could undermine the country's longer term best interests if it leads to the
government collecting less than anticipated on the year's privatizations.
A key part of the government's austerity program was the increase in the
basic interest rate from 20% to 43%. With the consumer inflation rate an
estimated 4.8% in 1997 and projected to fall to 3% to 4% this year, the
Brazilian economy is now functioning with real interest rates of well over 35%.
Such killer rates suggest that there will be little or no growth this year for
the economy, possibly even a decline, after an estimated 3.5% rate of expansion
in 1997. This outcome cannot be avoided. If the government is to remain
committed to its policy of a "crawling peg" devaluation of the Real and to
continued total war against inflation, then economic activity has to absorb the
costs of bringing the external financing gap to a level that gives the foreign
creditors comfort.
After the battering it took in the last three months of 1997, the Brazilian
stock market reached a level at year-end that appeared to offer attractive
long-term investment value. Analysts at Banco Icatu in Brazil, for example,
calculate that the market is currently priced at approximately 5-times estimated
1998 cash flow. This is equivalent to a 20% cash yield on market value, and that
is not a trivial return to the foreign investor.
<PAGE>
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For the Brazilian investor, on the other hand, a 20% cash return on
investment pales by comparison with the 40%-plus returns one can currently earn
on local money market instruments without taking any equity risk. Brazilian
stocks, on this basis, would appear to be overvalued to the Brazilian investor
and undervalued to the foreign investor, so the correction likely has a bit more
distance to travel before equilibrium is achieved. Real interest rates are
expected to decline later this year, and this should create a solid base in the
market from which a good rebound in valuations might occur over the course of
1998.
Respectfully,
/s/Nicholas Bratt /s/Juris Padegs
Nicholas Bratt Juris Padegs
President Chairman
5
<PAGE>
THE BRAZIL FUND, INC.
INVESTMENT SUMMARY AS OF DECEMBER 31, 1997
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HISTORICAL
INFORMATION TOTAL RETURN (%)
LIFE OF FUND ----------------------------------------------------------------
MARKET VALUE NET ASSET VALUE (a) INDEX (b)
------------------- -------------------- -------------------
AVERAGE AVERAGE AVERAGE
CUMULATIVE ANNUAL CUMULATIVE ANNUAL CUMULATIVE ANNUAL
------------------- -------------------- -------------------
CURRENT QUARTER -14.19 -- -14.32 -- -15.12 --
ONE YEAR 10.16 10.16 19.75 19.75 34.86 34.86
THREE YEAR -11.36 -3.94 18.37 5.78 77.95 21.18
FIVE YEAR 142.17 19.35 193.99 24.07 499.71 43.08
LIFE OF FUND* 281.37 14.74 419.71 18.44 859.93 29.78
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PER SHARE INFORMATION AND RETURNS (a)
YEARLY PERIODS ENDED DECEMBER 31
A chart in the form of a bar graph appears here,
illustrating the Fund Total Return (%) with the exact
data points listed in the table below.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1988* 1989 1990 1991 1992 1993 1994 1995 1996 1997
-----------------------------------------------------------------------------------------
NET ASSET VALUE... $ 12.90 $ 18.85 $ 5.97 $ 13.80 $ 14.12 $ 20.98 $ 31.10 $ 20.73 $ 25.75 $ 26.42
INCOME DIVIDENDS.. $ .41 $ .89 $ .12 $ -- $ -- $ .08 $ -- $ .30 $ .55 $ .51
CAPITAL GAINS
AND OTHER
DISTRIBUTIONS..... $ .28 $ 2.29 $ -- $ -- $ .66 $ .74 $ 2.46 $ 1.05 $ .32 $ 2.75
TOTAL RETURN (%).. 21.99 83.96 -67.98 131.16 6.43 54.19 61.09 -23.31 28.89 19.75
</TABLE>
(a) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
(b) Sao Paulo Stock Exchange Index ($).
* The Fund commenced operations on April 8, 1988.
PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE OF THE
FUND.
6
<PAGE>
THE BRAZIL FUND, INC.
PORTFOLIO SUMMARY AS OF DECEMBER 31, 1997
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DIVERSIFICATION
Equity Securities 90%
Cash Equivalents 10%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the
above table.
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SECTORS
Sector breakdown of the Fund's equity securities
Telecommunications 21%
Utilities 17%
Banking 15%
Petroleum 12%
Food and Beverage 11%
Forest Products 5%
Mining 5%
Tobacco 3%
Iron and Steel 3%
Other 8%
----
100%
====
A graph in the form of a pie chart appears here,
illustrating the exact data points in the
above table.
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TEN LARGEST EQUITY HOLDINGS
1. Petroleo Brasileiro S/A
2. Telecomunicacoes Brasileiras S.A
3. Banco Itau S.A.
4. Telecomunicacoes de Sao Paulo S.A.
5. Companhia Cervejaria Brahma
6. Centrais Eletricas Brasileiras S/A
7. Banco Bradesco S.A
8. Companhia Energetica de Minas Gerais
9. Companhia Vale do Rio Doce
10. Companhia Paranaense de Energia
7
<PAGE>
[LOGO] The Brazil Fund, Inc.
Investment Portfolio as of December 31, 1997
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<TABLE>
<CAPTION>
Industry Shares Company Value ($)
- -----------------------------------------------------------------------------------------------------------------------
EQUITY SECURITIES 90.3%
<S> <C> <C> <C> <C>
BANKING 13.4% 2,593,692,307 (pfd.) Banco Bradesco S.A. ........................... 25,563,922
110,893,769 (pfd.) Banco Bradesco S.A. Rights (b) ................ 397,451
69,024,208 (pfd.) Banco Itau S.A. ............................... 37,108,127
----------
63,069,500
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CHEMICALS 2.3% 56,312,000 (voting) Companhia Petroquimica do Sul S.A. ............. 2,008,170
5,950,846 (voting) S/A White Martins .............................. 8,691,258
----------
10,699,428
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CONSTRUCTION 1.1% 575,630,000 (voting) Odebrecht S.A. (b) ............................. 4,994,759
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CONTAINERS 0.5% 4,454,000 (pfd.) Dixie Toga S.A. ................................ 2,274,791
----------
ELECTRICAL EQUIPMENT 2.4% 6,393,800 (pfd.) Empresa Brasileira de Compressores S.A. ........ 1,604,107
16,026,600 (pfd.) Weg S.A. (b) ................................... 9,908,475
----------
11,512,582
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FOOD AND BEVERAGE 9.6% 449,166,740 (pfd.) Ceval Participacoes (b) ........................ 6,488,478
49,097,913 (pfd.) Companhia Cervejaria Brahma .................... 32,994,431
9,088,430 (pfd.) Sadia Concordia S/A ............................ 5,944,674
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45,427,583
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FOREST PRODUCTS 4.9% 8,253,599 (pfd.) Aracruz Celulose S.A. "B" ...................... 11,388,865
3,600,600 (pfd.) Companhia Suzano de Papel e Celulose
S.A. ......................................... 6,452,399
11,610,740 (pfd.) Industrias Klabin de Papel e Celulose S.A. ..... 5,305,746
----------
23,147,010
----------
GLASS 0.9% 2,340,236 (voting) Companhia Vidraria Santa Marina (b) ......... 4,445,410
----------
IRON AND STEEL 2.6% 100,100,000 (pfd.) Companhia Siderurgica de Tubarao "B" ......... 1,417,123
1,871,410 (pfd.) Usinas Siderurgicas de Minas Gerais S.A. ....... 11,066,983
----------
12,484,106
----------
MINING 4.1% 922,104 (pfd.) Companhia Vale do Rio Doce ..................... 18,300,796
38,811,004 (voting) S.A. Mineracao da Trindade (b) ................. 973,709
----------
19,274,505
----------
PETROLEUM 10.5% 210,739,999 (pfd.) Petroleo Brasileiro S.A. ....................... 49,283,759
----------
RETAILING 1.0% 110,000,000 (voting) Companhia Brasileira de Distribuicao-
Grupo Pao de Acucar ......................... 2,010,663
442,287,800 (voting) Lojas Americanas S.A.* ......................... 2,714,638
----------
4,725,301
----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
8
<PAGE>
[LOGO] The Brazil Fund, Inc.
Investment Portfolio
================================================================================
<TABLE>
<CAPTION>
Industry Shares Company Value ($)
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TELECOMMUNICATIONS 18.5% 390,256,600 (pfd.) Telecomunicacoes Brasileiras S.A. ............ 44,513,835
129,212,067 (pfd.) Telecomunicacoes de Sao Paulo S.A. ........... 34,384,384
15,242,900 (pfd.) Telecomunicacoes do Parana S.A. .............. 8,194,740
-----------
87,092,959
-----------
TEXTILES AND APPAREL 0.4% 52,929,600 (pfd.) Sao Paulo Alpargatas S.A.(c) ................. 1,754,756
-----------
TOBACCO 2.8% 1,657,543 (voting) Souza Cruz S.A. .............................. 13,366,683
-----------
UTILITIES 15.3% 600,000,000 (pfd.) Centrais Eletricas Brasileiras S/A "B" ....... 30,643,788
503,240,952 (pfd.) Companhia Energetica de Minas Gerais ......... 21,864,750
360,700,000 (pfd.) Companhia Paranaense de Energia .............. 4,896,380
869,642,700 (voting) Companhia Paranaense de Energia .............. 9,740,185
37,970,000 (voting) Companhia Paulista de Forca e Luz ............ 5,001,202
-----------
72,146,305
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TOTAL EQUITY SECURITIES
(Cost $180,657,033) ....................... 425,699,437
-----------
</TABLE>
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<TABLE>
<CAPTION>
Principal Amount ($)
- ----------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT 3.3%
<S> <C> <C>
15,366,000 Repurchase Agreement with Donaldson,
Lufkin & Jenrette, dated 12/31/97 at
6.5%, to be repurchased at
$15,371,549 on 1/2/98, collateralized
by a $11,780,000 U.S. Treasury Bond,
8.75%, 5/15/17 (Cost $15,366,000) ......... 15,366,000
-----------
</TABLE>
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U.S. GOVERNMENT AGENCY OBLIGATIONS 6.4%
<TABLE>
<CAPTION>
<S> <C>
30,000,000 Federal Home Loan Mortgage Corp. Discount
Note, 1/2/98 (Cost $29,996,042) ............ 29,996,042
-----------
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TOTAL INVESTMENT PORTFOLIO -- 100.0%
(Cost $226,019,075) (a) .................... 471,061,479
===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
9
<PAGE>
[LOGO] The Brazil Fund, Inc.
Investment Portfolio
================================================================================
* Non-income producing security.
(a) The cost of the investment portfolio for federal income tax purposes was
$227,333,343. At December 31, 1997, net unrealized appreciation for all
securities based on tax cost was $243,728,136. This consisted of aggregate
gross unrealized appreciation for all securities in which there was an
excess of market value over tax cost of $272,530,939 and aggregate gross
unrealized depreciation for all securities in which there was an excess of
tax cost over market value of $28,802,803.
(b) Securities valued in good faith by the Valuation Committee of the Board of
Directors at fair value amounted to $27,208,282 (6.34% of net assets).
Their values have been estimated by the Board of Directors in the absence
of readily ascertainable market values. However, because of the inherent
uncertainty of valuation, those estimated values may differ significantly
from the values that would have been used had a ready market for the
securities existed, and the difference could be material. The cost of these
securities at December 31, 1997 aggregated $12,380,687. These securities
may also have certain restrictions as to resale.
(c) Affiliated Issuer (See Notes to Financial Statements)
The accompanying notes are an integral part of the financial statements.
10
<PAGE>
[LOGO] The Brazil Fund, Inc.
Financial Statements
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STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
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<TABLE>
<CAPTION>
ASSETS
Investments, at value:
<S> <C> <C>
Unaffiliated issuers (identified cost $219,667,122) ..................... $469,306,723
Affiliated issuers (identified cost $6,351,953) ......................... 1,754,756
------------
Total investments, at value (identified cost $226,019,075) ................. 471,061,479
Cash ....................................................................... 936
Foreign currency holdings, at market (identified cost $1,998,619) .......... 1,993,273
Dividends and interest receivable .......................................... 2,005,128
Other assets ............................................................... 9,944
------------
Total assets ......................................................... 475,070,760
LIABILITIES
Payables:
Dividends ............................................................... 45,031,289
Accrued management fee .................................................. 402,925
Other accrued expenses .................................................. 206,795
------------
Total liabilities .................................................... 45,641,009
Net assets ................................................................. $429,429,751
============
NET ASSETS Net assets consist of:
Undistributed net investment income ..................................... 1,280,001
Net unrealized appreciation (depreciation) on:
Investment securities ................................................ 245,042,404
Foreign currency related transactions ................................ (7,817)
Accumulated net realized loss ........................................... (3,170,438)
Paid-in capital ......................................................... 186,285,601
------------
Net assets, at value
$429,429,751
============
NET ASSET VALUE per share ($429,429,75 / 116,256,783 shares of common stock
outstanding, 50,000,000 shares authorized, $.01 par value) .............. $ 26.42
============
</TABLE>
The accompanying noted are an integral part of the financial statements.
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11
<PAGE>
[LOGO] The Brazil Fund, Inc.
Financial Statements
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STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
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<TABLE>
<CAPTION>
Investment income
<S> <C> <C>
Income:
Dividends:
Unaffiliated issuers
$15,832,403
Affiliated issuers ............................................ 10,584
-----------
Total dividends (net of withholding tax of $1,306,059) ............. 15,842,987
Interest ........................................................... 1,494,157
-----------
17,337,144
Expenses:
Management fee ..................................................... $ 5,511,127
Administrator's fee ................................................ 53,925
Custodian and accounting fees ...................................... 1,371,881
Directors' fees and expenses ....................................... 158,692
Legal .............................................................. 130,715
Auditing ........................................................... 82,250
Reports to shareholders ............................................ 88,458
Services to shareholders ........................................... 57,254
Other .............................................................. 62,053 7,516,355
----------- -----------
Net investment income ................................................. 9,820,789
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENT TRANSACTIONS Net
realized gain (loss) from:
Investments ........................................................ 35,704,080
Foreign currency denominated transactions (net of CPMF tax $108,853) (762,332) 34,941,748
----------
Net unrealized appreciation (depreciation) during the period on:
Investments ........................................................ 19,008,380
Foreign currency denominated transactions .......................... 37,714 19,046,094
----------- -----------
Net gain on investment transactions ................................... 53,987,842
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$63,808,631
===========
</TABLE>
The accompanying noted are an integral part of the financial statements.
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12
<PAGE>
[LOGO] The Brazil Fund, Inc.
Financial Statements
================================================================================
- --------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------
INCREASE (DECREASE) IN NET ASSETS 1997 1996
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Operations:
Net investment income .......................................... $ 9,820,789 $ 8,943,021
Net realized gain from investment transactions ................. 34,941,748 12,786,925
Net unrealized appreciation on investment
transactions during the period .............................. 19,046,094 73,880,338
------------ ------------
Net increase in net assets resulting from operations .............. 63,808,631 95,610,284
------------ ------------
Distributions to shareholders:
From net investment income ..................................... (8,290,328) (8,926,493)
------------ ------------
From net realized gains on investment transactions ............. (44,702,055) (5,193,596)
------------ ------------
Net asset value of shares issued to shareholders in reinvestment of
distributions .................................................. 631,634 78,763
------------ ------------
INCREASE (DECREASE) IN NET ASSETS ................................. 11,447,882 81,568,958
Net assets at beginning of period ................................. 417,981,869 336,412,911
------------ ------------
NET ASSETS AT END OF PERIOD (including undistributed net investment
income of $1,280,001 and $752,956, respectively) ............... $429,429,751 $417,981,869
============ ============
OTHER INFORMATION
INCREASE IN FUND SHARES
Shares outstanding at beginning of period ......................... 16,229,987 16,226,496
Shares issued to shareholders in reinvestment of distributions . 26,796 3,491
------------ ------------
Shares outstanding at end of period ............................... 16,256,783 16,229,987
============ ============
</TABLE>
The accompanying noted are an integral part of the financial statements.
- --------------------------------------------------------------------------------
13
<PAGE>
[LOGO] The Brazil Fund, Inc.
Financial Highlights
================================================================================
- --------------------------------------------------------------------------------
THE FOLLOWING TABLE INCLUDES SELECTED DATA FOR A SHARE OUTSTANDING THROUGHOUT
EACH PERIOD AND OTHER PERFORMANCE INFORMATION DERIVED FROM THE FINANCIAL
STATEMENTS AND MARKET PRICE DATA.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
---------------------------------------------------------------
1997(a) 1996(a) 1995(a) 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period ........................... $ 25.75 $ 20.73 $ 31.10 $ 20.98 $ 14.12
------- ------- ------- ------- -------
Net investment income (loss) ................................ .60 .55 .38 (.17) .10
Net realized and unrealized gain (loss) on investment
transactions ............................................... 3.33 5.34 (7.63) 12.75 7.58
------- ------- ------- ------- -------
Total from investment operations ............................... 3.93 5.89 (7.25) 12.58 7.68
------- ------- ------- ------- -------
Less distributions:
From net investment income .................................. (.51) (.55) (.30) -- (.08)
From net realized gains on investments ...................... (2.75) (.32) (.90) (2.46) (.74)
In excess of net realized gains on investments .............. -- -- (.15) -- --
------- ------- ------- ------- -------
Total distributions ........................................... (3.26) (.87) (1.35) (2.46) (.82)
------- ------- ------- ------- -------
Dilution resulting from the rights offering (f) ................ -- -- (1.73) -- --
------- ------- ------- ------- -------
Broker and dealer manager fees and offering costs (f) .......... -- -- (.04) -- --
------- ------- ------- -------- -------
Net asset value, end of period ................................. $ 26.42 $ 25.75 $ 20.73 $ 31.10 $ 20.98
======= ======= ======= ======== =======
Market value, end of period .................................... $ 21.00 $ 22.25 $ 21.13 $ 33.00 $ 21.13
======= ======= ======= ======== =======
TOTAL INVESTMENT RETURN
Per share market value (%) .................................... 10.16 9.29 (26.37) 69.81 60.89
Per share net asset value (%) (b) ............................. 19.75 28.89(e) (23.31)(e) 61.09 54.19
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period ($ millions) ........................ 429 418 336 377 254
Ratio of operating expenses net, to average net assets (%) (c) 1.46 1.60 1.62 1.71 1.84
Ratio of operating expenses before expense reductions,
to average net assets (%) ................................... 1.46 1.62 1.67 1.71 1.84
Ratio of net investment income (loss) to average net assets (%) 1.91 2.22 1.54 (.58) .56
Portfolio turnover rate (%) ................................... 5.57 8.55 9.65 5.76 4.67
Average commission rate paid (d) .............................. $.00005 $.00002 -- -- --
</TABLE>
(a) Based on monthly average shares outstanding during the period.
(b) Total investment returns reflect changes in net asset value per share
during each period and assume that dividends and capital gains
distributions, if any, were reinvested. These percentages are not an
indication of the performance of a shareholder's investment in the Fund
based on market price.
(c) For the year ended December 31, 1993 the ratio of expenses net, including
the Brazilian repatriation tax, to average net assets was 2.22%.
(d) Average commission rate paid per share of common and preferred stocks is
calculated for fiscal years beginning on or after December 31, 1996.
(e) Total returns would have been lower had certain expenses not been reduced.
(f) During the year ended December 31, 1995, the Fund issued 4,060,000 shares
in connection with a rights offering of the Fund's shares.
- --------------------------------------------------------------------------------
14
<PAGE>
[LOGO] The Brazil Fund, Inc.
Notes to Financial Statements
================================================================================
A. SIGNIFICANT ACCOUNTING POLICIES
The Brazil Fund, Inc. (the "Fund") is registered under the Investment Company
Act of 1940, as amended, as a non-diversified, closed-end management investment
company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
The policies described below are followed consistently by the Fund in the
preparation of its financial statements.
SECURITY VALUATION. Portfolio securities which are traded on U.S. or foreign
stock exchanges are valued at the most recent sale price reported on the
exchange on which the security is traded most extensively. If no sale occurred,
the security is then valued at the calculated mean between the most recent bid
and asked quotations. If there are no such bid and asked quotations, the most
recent bid quotation is used.
Short-term investments having a maturity of sixty days or less are valued at
amortized cost. All other securities are valued at their fair value as
determined in good faith by the Valuation Committee of the Board of Directors.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements with
certain banks and broker/dealers whereby the Fund, through its custodian,
receives delivery of the underlying securities, the amount of which at the time
of purchase and each subsequent business day is required to be maintained at
such a level that the market value, depending on the maturity of the repurchase
agreement, is equal to at least 100.5% of the repurchase price.
FOREIGN CURRENCY TRANSLATIONS. The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) values of investment securities, other assets and liabilities at the
daily rate of exchange;
(ii) purchases and sales of investment securities, dividend and interest
income and expenses at the daily rate of exchange prevailing on the
respective dates of such transactions.
The Fund does not isolate that portion of gains and losses on investments which
is due to changes in foreign exchange rates from that which is due to changes in
market prices of the investments. Such fluctuations are included with the net
realized and unrealized gains and losses from investments.
Net realized and unrealized gain (loss) from foreign currency related
transactions includes gains and losses between trade and settlement dates on
securities transactions, gains and losses arising from the sales of foreign
currency, and gains and losses between the ex and payment dates on dividends,
interest, and foreign withholding taxes.
TAXATION. The Fund's policy is to comply with the requirements of the Internal
Revenue Code, as amended, which are applicable to regulated investment
companies, and to distribute all of its taxable income to its shareholders. The
Fund, accordingly, paid no U.S. federal income taxes, and no federal income tax
provision was required.
15
<PAGE>
[LOGO] The Brazil Fund, Inc.
Notes to Financial Statements
================================================================================
Effective January 1, 1996, the Brazilian withholding tax on dividend income was
reduced from 15% to 0%. This rate change applies to dividends paid from a
company's 1996 profits. Dividends paid from pre-1996 profits will continue to be
taxed at 15%.
Effective January 23, 1997, the Fund is also subject to a .20% Contribuicao
Provisoria sobre Movimentacoes Financeiras (CPMF) tax which is applied to
foreign exchange transactions representing capital inflows or outflows to the
Brazilian market.
DISTRIBUTION OF INCOME AND GAINS. The Fund intends to distribute to
shareholders, at least annually, all of its tax basis net investment income, any
net short-term capital gains in excess of net long-term capital losses
(including any capital loss carryover) and expects to distribute annually any
net long-term capital gains in excess of net short-term capital losses
(including any capital loss carryover), which would be taxable to the Fund if
not distributed. An additional distribution may be made to the extent necessary
to avoid the payment of a four percent federal excise tax.
The timing and characterization of certain income and capital gains
distributions are determined annually in accordance with federal tax regulations
which may differ from generally accepted accounting principles. These
differences primarily relate to foreign denominated investments and certain
securities sold at a loss. As a result, net investment income (loss) and net
realized gain (loss) on investment and foreign currency related transactions for
a reporting period may differ significantly from distributions during such
period. Accordingly, the Fund may periodically make reclassifications among
certain of its capital accounts without impacting the net asset value of the
Fund.
OTHER. Investment security transactions are accounted for on a trade date basis.
Dividend income is recorded on the ex-dividend date. Interest income is recorded
on the accrual basis. Distributions to shareholders are recorded at the earlier
of ex dividend or record date. The Fund uses the identified cost method for
determining realized gain or loss on investments and foreign currency for both
financial and federal income tax reporting purposes.
B. PURCHASES AND SALES OF SECURITIES
During the year ended December 31, 1997, purchases and sales of investment
securities (excluding short-term investments) aggregated $26,326,614 and
$63,124,201, respectively.
C. INVESTMENT ADVISORY AGREEMENTS AND
TRANSACTIONS WITH AFFILIATED PERSONS
Effective December 31, 1997, Scudder, Stevens & Clark, Inc. ("Scudder") and The
Zurich Insurance Company ("Zurich"), an international insurance and financial
services organization, formed a new global investment organization by combining
Scudder's business with that of Zurich's subsidiary, Zurich Kemper Investments,
Inc. As a result of the transaction, Scudder changed its name to Scudder Kemper
Investments Inc. ("Scudder Kemper" or the "Adviser"). The transaction between
Scudder and Zurich resulted in the termination of the Fund's Investment
Management Agreement with Scudder. However, a new Investment Management
Agreement (the "Management Agreement") between the Fund and Scudder Kemper was
approved by the Fund's Board of Directors and by the Fund's Shareholders. The
Management Agreement, which is effective December 31, 1997, is the same in all
material respects as the corresponding previous Investment Management Agreement,
except that Scudder Kemper is the new investment adviser to the Fund.
16
<PAGE>
[LOGO] The Brazil Fund, Inc.
Notes to Financial Statements
================================================================================
Under the Management Agreement with Scudder Kemper, the Fund agrees to pay the
Adviser a monthly fee at an annual rate equal to 1.20% per annum of the value of
the Fund's average weekly net assets up to $150 million; 1.05% per annum of the
value of the Fund's average weekly net assets on the next $150 million, and
1.00% per annum of the value of the Fund's weekly net assets in excess of $300
million. For the year ended December 31, 1997, the fee pursuant to these
agreements amounted to $5,511,127, which was equivalent to an annual effective
rate of 1.07%.
The Fund and the Adviser entered into an Administration Agreement with Banco de
Boston S.A. ("Banco de Boston"), pursuant to which Banco de Boston acts as the
Fund's Brazilian Administrator. The Fund has agreed to pay Banco de Boston, for
services rendered, an annual fee payable quarterly in Brazilian currency equal
to $50,000 per year plus out of pocket expenses. For the year ended December 31,
1997, the Administrator fee amounted to $53,925, of which $36,228 is unpaid at
December 31, 1997.
Scudder Fund Accounting Corporation ("SFAC"), a subsidiary of the Adviser, is
responsible for determining the daily net asset value per share and maintaining
the portfolio and general accounting records of the Fund. For the year ended
December 31, 1997, the amount charged to the Fund by SFAC aggregated $265,468,
of which $18,897 is unpaid at December 31, 1997.
Scudder Service Corporation ("SSC"), a subsidiary of the Adviser, provides
shareholder communications services for the Fund. For the year ended December
31, 1997 the amount charged by SSC aggregated $15,000, of which $1,250 is unpaid
at December 31, 1997.
The Fund pays each Director not affiliated with the Adviser an annual fee of
$6,000 except for two Directors who, as residents of Brazil, receive a fee of
$12,000, plus specified amounts for each Board of Directors or committee meeting
attended. For the year ended December 31, 1997, Directors' fees and expenses
amounted to $158,692.
D. FOREIGN INVESTMENT AND EXCHANGE CONTROLS IN BRAZIL
Investing in Brazil may involve considerations not typically associated with
investing in securities issued by domestic companies such as more volatile
prices and less liquid securities.
The Brazilian Government has exercised and continues to exercise substantial
influence over many aspects of the private sector by legislation and regulation,
including regulation of prices and wages.
Brazilian law imposes certain limitations and controls which generally affect
foreign investors in Brazil. The Fund has obtained from the Brazilian Securities
Commission authorization, subject to certain restrictions, to invest in
Brazilian securities. Under current Brazilian law, the Fund may repatriate
income received from dividends and interest earned on, and net realized capital
gains from, its investments in Brazilian securities. Under its authorization,
the Fund may also repatriate capital, but only to the extent necessary to
distribute income and capital gains (as computed for U.S. federal income tax
purposes), to pay expenses incurred outside of Brazil, to repay borrowings made
for temporary or emergency purposes, and in connection with the termination of
the Fund (provided that the Fund's dissolution has been approved by holders of
at least two-thirds of the Fund's shares). Under current Brazilian law, whenever
there occurs a serious imbalance in Brazil's balance of payments or serious
reasons to foresee the imminence of such an imbalance, Brazil's National
Monetary Council may, for a limited period, impose restrictions on foreign
capital remittances abroad. Exchange control regulations, which may restrict
17
<PAGE>
[LOGO] The Brazil Fund, Inc.
Notes to Financial Statements
================================================================================
repatriation of investment income, capital or the proceeds of securities sales
by foreign investors, may limit the Fund's ability to make sufficient
distributions, within applicable time periods, to qualify for the favorable U.S.
tax treatment afforded to regulated investment companies.
The Fund is unable to predict whether further economic reforms or modifications
to the existing policies by the Brazilian Government may adversely affect the
liquidity of the Brazilian stock market in the future.
E. TRANSACTIONS IN SECURITIES OF AFFILIATED ISSUERS
An affiliated issuer is a company in which the Fund has ownership of at least 5%
of the voting securities. A summary of the Fund's transactions with companies
which are or were affiliates for the year ended December 31, 1997 are as
follows:
<TABLE>
<CAPTION>
Purchases Sales Dividend Market
Affiliate Cost ($) Cost ($) Income ($) Value ($)
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sao Paulo Alpargatas S.A. 6,351,953 -- 10,584 1,754,756
</TABLE>
18
<PAGE>
[LOGO] The Brazil Fund, Inc.
Report of Independent Accountants
================================================================================
To The Shareholders and the Board of Directors of The Brazil Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Brazil Fund, Inc. (the "Fund")
at December 31, 1997, the results of its operations, the changes in its net
assets and the financial highlights for each of the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1997 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
Price Waterhouse LLP
Boston, Massachusetts
February 12, 1998
19
<PAGE>
[LOGO] The Brazil Fund, Inc.
Tax Information (Unaudited)
================================================================================
By now shareholders for whom year-end tax reporting is required by the IRS
should have received their Form 1099-DIV and tax information letter from the
Fund.
The Fund paid distributions of $2.69 per share from net long-term capital gains
during the year ended December 31, 1997, of which 36.06% represents 20% rate
gains. Pursuant to section 852 of the Internal Revenue Code, the Fund designates
$36,674,589 as capital gain dividends for the year ended December 31, 1997, of
which 42.89% represent 20% rate gains.
The Fund pays taxes to Brazil and intends to make an election under section 853
of the Internal Revenue Code. This election will allow shareholders of record on
December 31, 1997, to treat their proportionate shares of certain foreign taxes
paid by the Fund as having been paid directly by them. Such shareholders will be
required to report their proportionate shares of such taxes paid as income. The
Fund paid Brazilian taxes of $1,115,552 ($0.069 per share) and recognized
$9,994,612 ($0.615 per share) of Brazilian source income.
Please consult a tax adviser if you have questions about federal or state income
tax laws, or on how to prepare your tax returns. If you have specific questions
about your Brazil Fund account, please call (800) 426-5523.
20
<PAGE>
The Brazil Fund, Inc.
Stockholder Meeting Results
================================================================================
- --------------------------------------------------------------------------------
The Annual Meeting of Stockholders of the Fund was held on October 28, 1997, at
the offices of Scudder Kemper Investments, Inc. (formerly Scudder, Stevens &
Clark, Inc.), 25th Floor, 345 Park Avenue (at 51st Street), New York, New York
10154. The following matters were voted upon by stockholders (the resulting
votes for each matter are presented below).
1. To approve the new Investment Management, Advisory and Administration
Agreement between the Fund and Scudder Kemper Investments, Inc.
Number of Votes:
----------------
For Against Abstain Broker Non-votes*
--- ------- ------- -----------------
8,150,794 1,438,390 40,133 0
2. To elect Directors.
Director: Number of Votes:
--------- ----------------
For Withheld
--- --------
Kenneth C. Froewiss 8,855,813 773,504
William H. Luers 8,848,223 781,094
Wilson Nolen 8,866,644 762,673
Harold Williams 8,857,026 772,291
Continuing Directors:
---------------------
Edgar R. Fiedler
Roberto Teixeira da Costa
Ronaldo A. da Frota Nogueira
Juris Padegs
3. To ratify the selection of Coopers & Lybrand L.L.P. as the Fund's
independent accountants.
Number of Votes:
----------------
For Against Abstain
--- ------- -------
8,182,333 677,347 769,637
* Broker non-votes are proxies received by the Fund from brokers or nominees
when the broker or nominee neither has received instructions from the
beneficial owner or other persons entitled to vote nor has discretionary
power to vote on a particular matter.
21
<PAGE>
The Brazil Fund, Inc.
Dividend Reinvestment and Cash Purchase Plan
================================================================================
- --------------------------------------------------------------------------------
The Plan
The Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan") offers
you an automatic way to reinvest your dividends and capital gain distributions
in shares of the Fund. The Plan also provides for cash investments in Fund
shares of $100 to $3,000 semiannually through The First National Bank of Boston,
the Plan Agent.
Automatic Participation
Each shareholder of record is automatically a participant in the Plan unless
the shareholder has instructed the Plan Agent in writing otherwise. Such a
notice must be received by the Plan Agent not less than 10 days prior to the
record date for a dividend or distribution in order to be effective with respect
to that dividend or distribution. A notice which is not received by that time
will be effective only with respect to subsequent dividends and distributions.
Shareholders who do not participate in the Plan will receive all
distributions in cash paid by check in dollars mailed directly to the
shareholder by The First National Bank of Boston, as dividend paying agent.
Shares Held by a Nominee
If your shares are held in the name of a brokerage firm, bank, or other
nominee as the shareholder of record, please consult your nominee (or any
successor nominee) to determine whether it is participating in the Plan on your
behalf. Many nominees are generally authorized to receive cash dividends unless
they are specifically instructed by a client to reinvest. If you would like your
nominee to participate in the Plan on your behalf, you should give your nominee
instructions to that effect as soon as possible.
Pricing of Dividends and Distributions
If the market price per share on the payment date for the dividend or
distribution or, if that date is not a New York Stock Exchange trading date, the
next preceding trading date (the "Valuation Date") equals or exceeds net asset
value per share on that date, the Fund will issue new shares to participants at
the greater of the following on the Valuation Date: (a) net asset value, or (b)
95% of the market price. If the net asset value exceeds the market price of Fund
shares at such time, participants in the Plan are considered to have elected to
receive shares of stock from the Fund, valued at market price, on the Valuation
Date. In either case, for Federal income tax purposes, the shareholder receives
a distribution equal to the market value on the Valuation Date of new shares
issued. State and local taxes may also apply. If the Fund should declare an
income dividend or net capital gain distribution payable only in cash, the Plan
Agent will, as agent for the participants, buy Fund shares in the open market,
on the New York Stock Exchange or elsewhere, for the participants' account on,
or shortly after, the payment date.
Voluntary Cash Purchases
Participants in the Plan have the option of making additional cash payments
to the Plan Agent, semiannually, in any amount from $100 to $3,000, for
investment in the Fund's shares. The Plan Agent will use all such monies
received from participants to purchase Fund shares in the open market on or
about February 15 and August 15. Any voluntary cash payments received more than
30 days prior to these dates will be returned by the Plan Agent, and interest
will not be paid on any uninvested cash payments. To avoid unnecessary cash
accumulations, and also to allow ample time for receipt and processing by the
Plan Agent, it is suggested that participants send in voluntary cash payments to
be received by the Plan Agent approximately ten days before February 15, or
August 15, as the case may be. A participant may withdraw a voluntary cash
payment by written notice, if the notice is received by the Plan Agent not less
than 48 hours before such payment is to be invested.
22
<PAGE>
================================================================================
- --------------------------------------------------------------------------------
Participant Plan Accounts
The Plan Agent maintains all participant accounts in the Plan and furnishes
written confirmation of all transactions in the account, including information
needed by participants for personal and tax records. Shares in the account of
each plan participant will be held by the Plan Agent in non-certificated form in
the name of the participant, and each participant will be able to vote those
shares purchased pursuant to the Plan at a shareholder meeting or by proxy.
No Service Fee to Reinvest
There is no service fee charged to participants for reinvesting dividends or
distributions from net realized capital gains. The Plan Agent's fees for the
handling of the reinvestment of dividends and capital gain distributions will be
paid by the Fund. There will be no brokerage commissions with respect to shares
issued directly by the Fund as a result of dividends or capital gain
distributions payable either in stock or in cash. However, participants will pay
a pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of any
dividends or capital gain distributions payable only in cash.
Costs for Cash Purchases
With respect to purchases of Fund shares from voluntary cash payments, the
Plan Agent will charge $1.00 for each such purchase for a participant. Each
participant will pay a pro rata share of brokerage commissions incurred with
respect to the Plan Agent's open market purchases of Fund shares in connection
with voluntary cash payments made by the participant.
Brokerage charges for purchasing small amounts of stock for individual
accounts through the Plan are expected to be less than the usual brokerage
charges for such transactions, because the Plan Agent will be purchasing stock
for all participants in blocks and pro-rating the lower commission thus
attainable.
Amendment or Termination
The Fund and the Plan Agent each reserve the right to terminate the Plan.
Notice of the termination will be sent to the participants of the Plan at least
30 days before the record date for a dividend or distribution. The Plan also may
be amended by the Fund or the Plan Agent, but (except when necessary or
appropriate to comply with applicable law, rules or policies of a regulatory
authority) only by giving at least 30 days' written notice to participants in
the Plan.
A participant may terminate his account under the Plan by written notice to
the Plan Agent. If the written notice is received 10 days before the record day
of any distribution, it will be effective immediately. If received after that
date, it will be effective as soon as possible after the reinvestment of the
dividend or distribution.
If a participant elects to sell his shares before the Plan is terminated, the
Plan Agent is authorized to deduct a fee of 5% of the gross proceeds, to a
maximum of $3.50, plus brokerage commissions from the sale transaction.
Plan Agent Address and Telephone Number
You may obtain more detailed information by requesting a copy of the Plan
from the Plan Agent. All correspondence (including notifications) should be
directed to: The Brazil Fund, Inc. Dividend Reinvestment and Cash Purchase Plan,
c/o The First National Bank of Boston, P.O. Box 8209, Boston, MA 02266-8209,
1-800-426-5523.
23
<PAGE>
The Brazil Fund, Inc.
Investment Manager and Administrator
================================================================================
- --------------------------------------------------------------------------------
The investment manager and administrator of The Brazil Fund, Inc. (the
"Fund") is Scudder Kemper Investments, Inc., one of the most experienced
investment management and investment counsel firms in the United States.
Established in 1919, the firm provides investment counsel for individuals,
investment companies and institutions. Scudder has offices throughout the United
States and subsidiaries in London and Tokyo.
Scudder has been a leader in international investment management for over 40
years. It manages Scudder International Fund, which was initially incorporated
in Canada in 1953 as the first foreign investment company registered with the
U.S. Securities and Exchange Commission. Scudder's investment company clients
include nine other open-end investment companies which invest primarily in
foreign securities.
In addition to the Fund, Scudder also manages the assets of six other
closed-end investment companies which invest in foreign securities: The
Argentina Fund, The Brazil Fund, The Korea Fund, Scudder Global High Income
Fund, Inc., Scudder New Europe Fund and Scudder Spain and Portugal Fund, Inc.
are traded on the New York Stock Exchange.
Directors and Officers
================================================================================
- --------------------------------------------------------------------------------
NICHOLAS BRATT*
President
JURIS PADEGS*
Chairman of the Board and Director
EDGAR R. FIEDLER
Director
KENNETH C. FROEWISS
Director
WILLIAM H. LUERS
Director
ROBERTO TEIXEIRA DA COSTA
Director and Resident Brazilian Director
RONALDO A. DA FROTA NOGUEIRA
Director and Resident Brazilian Director
WILSON NOLEN
Director
HAROLD WILLIAMS
Director
EDMUND B. GAMES, JR.*
Vice President
BRUCE H. GOLDFARB*
Vice President
JUDITH A. HANNAWAY*
Vice President
JERARD K. HARTMAN*
Vice President
KATHRYN L. QUIRK*
Vice President and Assistant Secretary
THOMAS F. McDONOUGH*
Vice President, Treasurer and Secretary
JOHN R. HEBBLE*
Assistant Treasurer
* Scudder Kemper Investments, Inc.
