N-CSR 1 iem.txt T. ROWE PRICE INSTIT EMERG MARKETS EQUITY FUND Item 1. Report to Shareholders T. Rowe Price Institutional Emerging Markets Equity Fund Certified Financials Financial Highlights T. Rowe Price Institutional Emerging Markets Equity Fund Certified Financials (Unaudited) For a share outstanding throughout the period 10/31/02 Through 4/30/03 NET ASSET VALUE Beginning of period $ 10.00 Investment activities Net investment income (loss) 0.06 Net realized and unrealized gain (loss) 0.01** Total from investment activities 0.07 Distributions Net investment income (0.01) NET ASSET VALUE End of period $ 10.06 Ratios/Supplemental Data Total return^ 0.70% Ratio of total expenses to average net assets 1.10%! Ratio of net investment income (loss) to average net assets 1.49%! Portfolio turnover rate 56.1%! Net assets, end of period (in thousands) $ 7,131 ^ Total return reflects the rate that an investor would have earned on an investment in the fund during the period, assuming reinvestment of all distributions. ! Annualized ** The amount presented is calculated pursuant to a methodology prescribed by the Securities and Exchange Commission for a share outstanding throughout the period. This amount is inconsistent with the fund's aggregate gains and losses because of the timing of sales and redemptions of fund shares in relation to fluctuating market values for the investment portfolio. The accompanying notes are an integral part of these financial statements. Statement of Net Assets T. Rowe Price Institutional Emerging Markets Equity Fund Certified Financials April 30, 2003 (Unaudited) Shares Value -------------------------------------------------------------------------------- In thousands BRAZIL 8.3% Common Stocks 7.1% Brasil Telecom Participacoes ADR (USD) 600 $ 21 Companhia de Bebidas ADR (USD) 4,100 82 Companhia Vale do Rio Doce ADR (1 ADR represents 1 common stock) (USD) 100 3 Companhia Vale do Rio Doce ADR (1 ADR represents 1 preferred A share) (USD) 2,900 77 Embraer Aircraft ADR (USD) 2,200 30 Grupo Pao de Acucar ADR (USD) 500 7 Petroleo Brasileiro (Petrobras) ADR (USD) 10,400 178 Tele Norte Leste Participacoes ADR (USD) 1,300 14 Telebras ADR (USD) 3,590 93 505 Preferred Stocks 1.2% Banco Bradesco 6,547,898 27 Banco Itau Holding Financeira 918,000 62 89 Total Brazil (Cost $515) 594 CHILE 0.6% Common Stocks 0.6% Banco Santander ADR (USD) * 1,954 43 Total Chile (Cost $36) 43 CHINA 1.2% Common Stocks 1.2% China Pharmaceutical Enterprise(HKD) 68,000 19 China Telecom Limited (HKD)* 200,000 39 Sinopac (HKD) * 170,000 26 Total China (Cost $85) 84 CZECH REPUBLIC 0.6% Common Stocks 0.6% Komercni Banka 595 42 Total Czech Republic (Cost $42) 42 ESTONIA 1.3% Common Stocks 1.3% Eesti Telekom GDR (USD) 2,288 $ 45 Hansabank (EUR) 2,400 44 Total Estonia (Cost $75) 89 HONG KONG 2.5% Common Stocks 2.5% China Insurance 36,000 18 China Mobile (Hong Kong) 55,500 111 CNOOC 38,000 50 Total Hong Kong (Cost $188) 179 HUNGARY 2.2% Common Stocks 2.2% EGIS 701 24 Gedeon Richter 880 64 OTP Bank 6,300 68 Total Hungary (Cost $156) 156 INDIA 4.6% Common Stocks 4.6% Bharti Tele-Ventures * 27,000 19 Cipla 1,200 16 HDFC Bank 8,000 42 HDFC Bank ADR (USD) 900 15 Hindustan Lever 14,830 45 Housing Development Finance 5,400 39 I-Flex Solutions 1,800 32 ICICI Bank (Ordinary shares) * 7,780 20 ICICI Bank ADR (USD) * 1,520 8 Infosys Technologies 900 53 Infosys Technologies ADR (USD) 300 13 Ranbaxy Laboratories 1,320 19 State Bank of India 1,000 6 Total India (Cost $370) 327 INDONESIA 0.8% Common Stocks 0.8% Telekom Indonesia 114,500 54 Total Indonesia (Cost $45) 54 ISRAEL 3.0% Common Stocks 3.0% Check Point Software Technologies (USD) * 1,295 $ 20 Partner Communications ADR (USD) * 17,340 77 Teva Pharmaceutical ADR (USD) 2,540 119 Total Israel (Cost $172) 216 MALAYSIA 5.6% Common Stocks 5.6% Berjaya Sports Toto 49,400 41 Gamuda Berhad 23,000 31 Genting Berhad 8,000 25 Hong Leong Bank 22,000 24 Magnum 46,000 29 Malayan Banking Berhad 16,400 34 Maxis Communications 38,400 53 Public Bank Berhad 41,000 26 Resorts World 42,000 92 Sime Darby 16,000 21 SP Setia 35,000 20 Total Malaysia (Cost $434) 396 MEXICO 9.0% Common Stocks 9.0% America Movil ADR Series L (USD) 6,800 114 Cemex Participating Certificates (Represents 2 Series A and 1 Series B shares) 9,300 42 Coca-Cola Femsa ADR Series L (USD) 1,700 36 Femsa UBD Units (Represents 1 Series B and 4 Series D shares) 10,500 40 Grupo Aeroportuario del Sureste ADR (USD) 2,200 28 Grupo Financiero BBVA Bancomer, Series B * 93,300 81 Grupo Modelo, Series C 10,000 22 Grupo Televisa ADR (USD) * 1,324 40 Kimberly-Clark de Mexico Series A 3,000 7 Telmex ADR, Series L (USD) 4,039 $ 122 Wal-Mart de Mexico 40,300 112 Total Mexico (Cost $609) 644 PERU 0.4% Common Stocks 0.4% Compania de Minas Buenaventura ADR, Series B (USD) 1,150 31 Total Peru (Cost $30) 31 POLAND 1.4% Common Stocks 1.4% Bank Polska Kasa Opieki Grupa 1,210 27 Computerland * 400 9 Telekomunikacja Polska * 17,900 60 Total Poland (Cost $98) 96 RUSSIA 8.1% Common Stocks 8.1% GMK Norilsk Nickel (USD) 1,100 26 Lukoil (USD) * 2,170 37 Lukoil ADR (USD) 1,830 127 Mobile Telesystems ADR (USD) * 2,000 96 Sberbank RF (USD) 119 27 Sibneft ADR (USD) 900 21 Surgutneftegaz ADR (USD) 2,400 47 Vimpel-Communications ADR (USD) * 1,600 64 Wimm-Bill-Dann Foods ADR (USD) * 1,400 26 YUKOS ADR (USD) 610 107 Total Russia (Cost $499) 578 SOUTH AFRICA 9.7% Common Stocks 9.7% ABSA Group 19,400 85 AngloGold 1,600 46 FirstRand 47,300 46 Gold Fields 5,000 51 Harmony Gold 3,800 40 Impala Platinum Holdings Limited 1,770 88 Nedcor 8,900 120 New Clicks 57,034 42 Pick 'N Pay Stores 26,400 $ 48 Sanlam 67,310 56 Sasol 3,200 35 Telkom South Africa * 8,100 35 Total South Africa (Cost $717) 692 SOUTH KOREA 18.6% Common Stocks 17.9% Hanwha Chemical * 9,130 28 Hyundai Motor 1,000 24 Kookmin Bank 5,550 156 Korea Telecom 900 37 KT Corporation ADR (USD) 2,173 44 Kumgang Korea Chemical (Ordinary shares) 440 38 Kumgang Korea Chemical GDR, 144A (USD) * 1,400 22 LG Chemical 1,800 60 Lotte Chilsung Beverage 20 10 Lotte Confectionery 70 25 NCsoft * 530 46 NHN Corporation * 367 33 Pacific Corporation 350 31 POSCO 440 37 Samsung Electronics 1,480 372 Samsung Fire & Marine Insurance * 1,100 54 Shinhan Financial 8,300 82 Shinsegae 260 31 South Korea Telecom 1,060 147 1,277 Preferred Stocks 0.7% Hyundai Motor 2,040 23 Samsung Electronics 230 28 51 Total South Korea (Cost $1,499) 1,328 SWITZERLAND 0.2% Common Stocks 0.2% Compagnie Financiere Richemont 100 2 Compagnie Financiere Richemont (10 depository receipts represent 1 A share) (ZAR) 10,900 16 Total Switzerland (Cost $21) 18 TAIWAN 10.8% Common Stocks 10.8% Accton Technology * 42,000 $ 28 Advantech 12,000 21 Ambit Microsystems 6,000 17 Basso Industry 17,000 28 Chinatrust Financial Holdings * 102,000 80 Delta Electronics 33,000 37 Evergreen Marine 17,000 10 Formosa Plastic 38,000 47 Fubon Financial Holdings 56,000 38 Hon Hai Precision Industry 6,000 19 Nan Ya Plastic 46,000 40 Oriental Union Chemical 18,000 15 Phoenixtec Power 36,000 28 Quanta Computer 23,000 40 Realtek Semiconductor 7,000 13 Realtek Semiconductor GDR (USD) 1,800 14 SinoPac Holdings * 59,000 18 Taishin Financial Holdings * 69,000 31 Taiwan Semiconductor Manufacturing 83,000 114 Test Rite International 41,000 26 United Microelectronics 55,000 32 Via Technologies 21,000 24 Wan Hai Lines 65,000 53 Total Taiwan (Cost $887) 773 THAILAND 4.6% Common Stocks 4.3% Advanced Info Service (Ordinary shares) 13,200 14 Advanced Info Services (Non-Voting Depository Receipt) 45,500 48 Bangkok Bank (Local shares) * 44,000 54 Kasikornbank Public (Non-Voting Depository Receipt) * 50,000 37 Land & Houses 154,000 26 Siam Cement 21,000 59 Siam Commercial Bank (Foreign Shares) * 86,000 69 307 Preferred Stocks 0.3% PTT 17,800 $ 20 20 Total Thailand (Cost $309) 327 TURKEY 1.5% Common Stocks 1.5% Akbank 5,930,960 21 Anadolu Efes Biracilik ve Malt Sanayii * 1,495,000 30 Hurriyet Gazete * 9,282,000 21 Migros Turk 2,938,000 26 Turkiye Garanti Bankasi * 10,084,000 12 Total Turkey (Cost $101) 110 UNITED KINGDOM 2.1% Common Stocks 2.1% Anglo American (ZAR) 10,200 148 Total United Kingdom (Cost $148) 148 VENEZUELA 0.1% Common Stocks 0.1% Compania Anonima Nacional Telefonos de Venezuela (CANTV), Series D ADR (USD) 1,000 10 Total Venezuela (Cost $12) 10 UNITED STATES 2.0% Money Market Funds 2.0% T. Rowe Price Reserve Investment Fund, 1.30% # 139,137 139 Total United States (Cost $139) 139 Total Investments in Securities 99.2% of Net Assets (Cost $7,187) $7,074 Other Assets Less Liabilities 57 NET ASSETS $7,131 ------ Net Assets Consist of: Undistributed net investment income (loss) $35 Undistributed net realized gain (loss) (103) Net unrealized gain (loss) (112) Paid-in-capital applicable to 708,586 shares of $0.01 par value capital stock outstanding 1,000,000,000 shares of the Corporation authorized 7,311 NET ASSETS $7,131 ------ NET ASSET VALUE PER SHARE $10.06 ------ # Seven-day yield * Non-income producing 144A Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration only to qualified institutional buyers-total of such securities at period-end amounts to $22,000 and represents 0.3% of net assets ADR American Depository Receipts EUR Euro GDR Global Depository Receipts HKD Hong Kong dollar USD United States dollar ZAR South African rand The accompanying notes are an integral part of these financial statements. Statement of Operations T. Rowe Price Institutional Emerging Markets Equity Fund Certified Financials (Unaudited) In thousands 10/31/02 Through 4/30/03 Investment Income (Loss) Income Dividend (net of foreign taxes of $5) $ 62 Interest 2 Total income 64 Investment management and administrative expenses 27 Net investment income (loss) 37 Realized and Unrealized Gain (Loss) Net realized gain (loss) Securities (97) Foreign currency transactions (6) Net realized gain (loss) (103) Change in net unrealized gain (loss) Securities (113) Other assets and liabilities denominated in foreign currencies 1 Change in net unrealized gain (loss) (112) Net realized and unrealized gain (loss) (215) INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (178) ---------- The accompanying notes are an integral part of these financial statements. Statement of Changes in Net Assets T. Rowe Price Institutional Emerging Markets Equity Fund Certified Financials (Unaudited) In thousands 10/31/02 Through 4/30/03 Increase (Decrease) in Net Assets Operations Net investment income (loss) $ 37 Net realized gain (loss) (103) Change in net unrealized gain (loss) (112) Increase (decrease) in net assets from operations (178) Distributions to shareholders Net investment income (2) Capital share transactions * Shares sold 7,309 Distributions reinvested 2 Increase (decrease) in net assets from capital share transactions 7,311 Net Assets Increase (decrease) during period 7,131 Beginning of period -- End of period $ 7,131 ---------- *Share information Shares sold 708 Distributions reinvested 1 Increase (decrease) in shares outstanding 709 The accompanying notes are an integral part of these financial statements. Notes to Financial Statements T. Rowe Price Institutional Emerging Markets Equity Fund Certified Financials April 30, 2003 (Unaudited) NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES T. Rowe Price Institutional International Funds, Inc. (the corporation) is registered under the Investment Company Act of 1940 (the 1940 Act). The Institutional Emerging Markets Equity Fund (the fund), a diversified, open-end management investment company, is one of the portfolios established by the corporation and commenced operations on October 31, 2002. The fund seeks long-term growth of capital through investments primarily in the common stocks of companies located (or with primary operations) in emerging markets. The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, which require the use of estimates made by fund management. Valuation Investments are valued at the close of the New York Stock Exchange (NYSE), normally 4 p.m. ET, each day that the NYSE is open for business. Equity securities listed or regularly traded on a securities exchange or in the over-the-counter market are valued at the last quoted sale price, or official closing price for certain markets, at the time the valuations are made. A security that is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for such security. Listed securities not traded on a particular day are valued at the mean of the latest bid and ask prices for domestic securities and the last quoted sale price for international securities. Investments in mutual funds are valued at the closing net asset value per share of the mutual fund on the day of valuation. Other investments and those for which the above valuation procedures are inappropriate or are deemed not to reflect fair value are stated at fair value as determined in good faith by or under the supervision of the officers of the fund, as authorized by the Board of Directors. Most foreign markets close before the NYSE. Developments that could affect the values of securities that occur between the close of a foreign market and the close of the NYSE normally will not be reflected in security valuations. However, if such developments are so significant that they will, in the judgment of the officers of the fund, clearly and materially affect the value of securities, the previous closing prices may be adjusted to reflect the fair value of the securities as of the close of the NYSE, as determined in good faith by or under the supervision of the officers of the fund, as authorized by the Board of Directors. Currency Translation Assets, including investments, and liabilities denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate, using the mean of the bid and ask prices of such currencies against U.S. dollars as quoted by a major bank. Purchases and sales of securities, income, and expenses are translated into U.S. dollars at the prevailing exchange rate on the date of the transaction. The effect of changes in foreign currency exchange rates on realized and unrealized security gains and losses is reflected as a component of such gains and losses. Other Income and expenses are recorded on the accrual basis. Investment transactions are accounted for on the trade date. Realized gains and losses are reported on the identified cost basis. Dividend income and distributions to shareholders are recorded by the fund on the ex-dividend date. NOTE 2 - INVESTMENT TRANSACTIONS Consistent with its investment objective, the fund engages in the following practices to manage exposure to certain risks or enhance performance. The investment objective, policies, program, and risk factors of the fund are described more fully in the fund's prospectus and Statement of Additional Information. Emerging Markets At April 30, 2003, approximately 97% of the fund's net assets were invested in securities of companies located in emerging markets. Future economic or political developments could adversely affect the liquidity or value, or both, of such securities. Other Purchases and sales of portfolio securities, other than short-term securities, aggregated $8,374,000 and $1,229,000, respectively, for the six months ended April 30, 2003. NOTE 3 - FEDERAL INCOME TAXES No provision for federal income taxes is required since the fund intends to qualify as a regulated investment company and distribute to shareholders all of its taxable income and gains. Federal income tax regulations differ from generally accepted accounting principles; therefore, distributions determined in accordance with tax regulations may differ in amount or character from net investment income and realized gains for financial reporting purposes. Financial reporting records are adjusted for permanent book/tax differences to reflect tax character. Temporary differences are not adjusted. The amount and character of tax-basis distributions and composition of net assets are finalized at fiscal year-end; accordingly, tax-basis balances have not been determined as of April 30, 2003. At April 30, 2003, the cost of investments for federal income tax purposes was substantially the same as for financial reporting and totaled $7,187,000. Net unrealized loss aggregated $112,000 at period-end, of which $418,000 related to appreciated investments and $530,000 related to depreciated investments. NOTE 4 - FOREIGN TAXES The fund is subject to foreign income taxes imposed by certain countries in which it invests. Foreign income taxes are accrued by the fund as a reduction of income. Gains realized upon disposition of Indian securities held by the fund are subject to capital gains tax in India, payable prior to repatriation of sale proceeds. The tax is computed on net realized gains, and realized losses in excess of gains may be carried forward eight years to offset future gains. In addition, the fund accrues a deferred tax liability for net unrealized gains on Indian securities. At April 30, 2003, the fund had no deferred tax liability. NOTE 5 - RELATED PARTY TRANSACTIONS The fund is managed by T. Rowe Price International, Inc. (the manager), a wholly owned subsidiary of T. Rowe Price Associates, Inc. (Price Associates), which is wholly owned by T. Rowe Price Group, Inc. The investment management and administrative agreement between the fund and the manager provides for an all-inclusive annual fee equal to 1.10% of the fund's average daily net assets. The fee is computed daily and paid monthly. The agreement provides that investment management, shareholder servicing, transfer agency, accounting, and custody services are provided to the fund, and interest, taxes, brokerage commissions, directors' fees and expenses, and extraordinary expenses are paid directly by the fund. At April 30, 2003, $12,000 was payable under the agreement. The fund may invest in the T. Rowe Price Reserve Investment Fund and T. Rowe Price Government Reserve Investment Fund (collectively, the Reserve Funds), open-end management investment companies managed by Price Associates. The Reserve Funds are offered as cash management options only to mutual funds, trusts, and other accounts managed by Price Associates and/or its affiliates, and are not available to the public. The Reserve Funds pay no investment management fees. Distributions from the Reserve Funds to the fund for the six months ended April 30, 2003, totaled $2,000 and are reflected as interest income in the accompanying Statement of Operations. Item 9. Controls and Procedures (a) The registrant's Principal Executive Officer and Principal Financial Officer have evaluated the registrant's disclosure controls and procedures within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely. (b) At the date of filing this Form N-CSR, the registrant's Principal Executive Officer and Principal Financial Officer are aware of no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. 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. T. Rowe Price Institutional International Funds, Inc. By /s/ James S. Riepe James S. Riepe Principal Executive Officer Date June 12, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By /s/ James S. Riepe James S. Riepe Principal Executive Officer Date June 12, 2003 By /s/ Joseph A. Carrier Joseph A. Carrier Principal Financial Officer Date June 12, 2003