Item 1. Report to Shareholders
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
This report is certified under the Sarbanes-Oxley Act of 2002, which requires
that public companies, including mutual funds, affirm that the information
provided in their annual and semiannual shareholder reports fully and fairly
represents their financial position.
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
Performance Comparison
- --------------------------------------------------------------------------------
This chart shows the value of a hypothetical $10,000 investment in the fund over
the past 10 fiscal year periods or since inception (for funds lacking 10-year
records). The result is compared with a broad-based average or index. The index
return does not reflect expenses, which have been deducted from the fund's
return.
Institutional Emerging Markets Equity Fund
[Graphic Omitted]
Institutional MSCI Emerging
Emerging Markets Markets Free
Equity Fund Index
10/02 10000 10000
1/03 9950 10288
4/03 10070 10593
7/03 12042 12752
10/03 14194 14874
Average Annual Compound Total Return
- --------------------------------------------------------------------------------
Period Ended 10/31/03 1 Year*
- --------------------------------------------------------------------------------
Institutional Emerging Markets Equity Fund 41.94%
MSCI Emerging Markets Free Index 48.74
Lipper Emerging Markets Funds Average 46.96
*The portfolio's inception date is 10/31/02.
Returns do not reflect taxes that the shareholder may pay on distributions or
the redemption of shares. Past performance cannot guarantee future results.
Dear Shareholder,
We are pleased to report that emerging market stocks posted strong returns, and
your fund returned 41.94% during the 12 months ended October 31, 2003. As you
can see in the table at the lower left, the portfolio's returns lagged its
peer group, the Lipper Emerging Markets Funds Average, and the MSCI Emerging
Markets Free Index. Sector allocation decisions were the largest factor in
underperformance versus the benchmark.
As you know, the portfolio's objective is long-term capital growth through
investments in common stocks of large and small companies located, or with
primary operations, in emerging markets. These investments are broadly
diversified across emerging markets in Europe, Latin America, the Middle East,
and the Pacific Rim. Nevertheless, the portfolio's concentration in developing
economies increases its risk level.
Major International Index Returns
- --------------------------------------------------------------------------------
12-Month
Period Ended 10/31/03 Return
MSCI Emerging Europe and
Middle East Index 52.12%
MSCI EMF Latin America Index 59.75
MSCI EAFE Index 27.57
MSCI Japan Index 33.18
MSCI Pacific Ex-Japan 37.19
The Major International Index Returns table shows how the world's major regions
performed over the past year. As you can see, international stock markets posted
strong gains that were led by emerging markets. The MSCI Emerging Europe and
Middle East Index and the Latin America Index performed better than the
developed market MSCI EAFE (Europe, Australasia, and Far East) and Japan
benchmarks.
[Graphic Omitted]
Geographic Diversification
Pacific Rim 52%
Latin America 15%
Other and Reserves 14%
Europe 11%
Middle East 8%
Based on net assets as of 10/31/03.
The Geographic Diversification table shows the portfolio's geographic profile as
of October 31, 2003. Our largest regional exposure is in the Pacific Rim where
we see domestic economic improvement. In recent months, we increased our
allocation in the Far East and have trimmed exposure to stocks in Latin America
and Europe.
Largest Country Allocations and Performance
(In U.S. Dollar Terms) Percent of 12-Month
Period Ended 10/31/03 Net Assets Return
- --------------------------------------------------------------------------------
South Korea 18.10% 30.50%
Taiwan 12.40 41.85
Brazil 9.50 90.59
India 9.10 74.48
Russia 5.40 50.02
Source: RIMES Online, using MSCI indices.
The Largest Country Allocations and Performance table shows how the fund's
largest markets performed over the past year. All of our largest country
allocations performed well, led by Brazil and India (the third- and
fourth-largest allocations, respectively). The South Korean market, our largest
country allocation, gained 30.50% for the past 12 months.
Finally, I'm sure you are aware that mutual fund companies have recently come
under scrutiny for their trading policies. The investigations have led to
allegations that executives of several mutual fund companies permitted or
engaged in improper mutual fund trading. In addition, certain intermediaries
that process fund transactions are alleged to have assisted some investors in
executing improper mutual fund trades. I want T. Rowe Price shareholders to know
that we emphatically condemn the abuses that have been revealed or alleged
against other firms in our industry. Our firm has not entered and will not enter
into any agreements with any investors or intermediaries that authorize
after-hours trading or excessive short-term trading in any of our funds. T. Rowe
Price investors can be assured that our firm unequivocally opposes illegal or
inappropriate trading of any nature and has policies and procedures in place
designed to protect the best interests of our long-term shareholders. No T. Rowe
Price executives or portfolio managers or investment personnel of the T. Rowe
Price mutual funds have engaged in any inappropriate trading of T. Rowe Price
mutual funds. You may find out more about our trading policies and the steps we
take to protect your interests by visiting our Web site (troweprice.com). These
policies are also spelled out in your fund's prospectus.
We thank you for your continued support.
Respectfully,
James S. Riepe
Chairman
November 21, 2003
Financial Highlights
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
For a share outstanding
throughout the period
- --------------------------------------------------------------------------------
10/31/02
Through
10/31/03
NET ASSET VALUE
Beginning of period $ 10.00
Investment activities
Net investment income (loss) 0.09
Net realized and
unrealized gain (loss) 4.10
Total from
investment activities 4.19
Distributions
Net investment income (0.01)
NET ASSET VALUE
End of period $ 14.18
--------------------
Ratios/Supplemental Data
Total return^ 41.94%
Ratio of total expenses
to average net assets 1.10%
Ratio of net investment
income (loss) to average
net assets 1.34%
Portfolio turnover rate 70.4%
Net assets, end of period
(in thousands) $ 15,650
^ 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.
The accompanying notes are an integral part of these financial statements.
Portfolio of Investments(ss.)
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
October 31, 2003
Shares Value
- --------------------------------------------------------------------------------
In thousands
BRAZIL 9.5%
Common Stocks 7.8%
Companhia de Bebidas ADR (USD) 7,500 $ 159
Companhia Siderurgica
Nacional 2,425,700 100
Companhia Vale do Rio Doce ADR
(1 ADR represents
1 common share) (USD) 100 5
Companhia Vale do Rio Doce ADR
(1 ADR represents
1 preferred A share) (USD) 5,700 230
Embraer Aircraft ADR (USD) 1,300 34
Petrobras ADR (USD) 15,600 339
Telebras ADR (USD) 6,490 223
Telesp Celular Participacoes
ADR (USD) * 22,100 126
1,216
Preferred Stocks 1.7%
Banco Bradesco 9,351,798 39
Banco Itau Holding Financeira 1,189,800 98
Cia Energetica Minas
Gerais (Cemig) 6,419,000 95
Gerdau 2,100 31
263
Total Brazil (Cost $1,208) 1,479
CAYMAN ISLANDS 0.5%
Common Stocks 0.5%
tom.com (HKD) * 234,000 75
Total Cayman Islands (Cost $72) 75
CHINA 0.4%
Common Stocks 0.4%
BYD (HKD) 21,000 55
Total China (Cost $49) 55
CZECH REPUBLIC 0.3%
Common Stocks 0.3%
Komercni Banka 511 46
Total Czech Republic (Cost $39) 46
ESTONIA 0.2%
Common Stocks 0.2%
Eesti Telekom GDR (USD) 1,549 38
Total Estonia (Cost $30) 38
HONG KONG 2.8%
Common Stocks 2.8%
China Insurance 62,000 $ 41
China Mobile (Hong Kong) 114,500 325
CNOOC 36,500 69
Total Hong Kong (Cost $363) 435
HUNGARY 0.9%
Common Stocks 0.9%
Gedeon Richter 1,410 145
Total Hungary (Cost $102) 145
INDIA 9.1%
Common Stocks 9.1%
Arvind Mills * 46,036 46
Bharti Tele-Ventures * 49,000 97
Gail India 23,500 85
HDFC Bank 12,000 84
HDFC Bank ADR (USD) 900 23
I-Flex Solutions 4,400 67
Indian Hotels 200 2
ITC 4,860 93
Larsen & Toubro 10,700 96
Mahindra & Mahindra 32,700 246
Maruti Udyog * 25,400 182
Maruti Udyog
(Restricted shares) * 2,200 16
Tata Motors 8,900 74
Tata Tea 9,000 52
Zee Telefilms 84,600 256
Total India (Cost $1,020) 1,419
INDONESIA 0.5%
Common Stocks 0.5%
Indocement Tunggal, 144A * 64,000 15
PT Semen Cibinong * 382,500 16
Telekom Indonesia 78,000 55
Total Indonesia (Cost $66) 86
ISRAEL 2.6%
Common Stocks 2.6%
Check Point Software
Technologies (USD) * 5,995 102
Partner Communications
ADR (USD) * 18,540 133
Teva Pharmaceutical ADR (USD) 2,940 $ 167
Total Israel (Cost $300) 402
LUXEMBOURG 0.5%
Common Stocks 0.5%
Tenaris ADR (USD) 3,000 82
Total Luxembourg (Cost $77) 82
MALAYSIA 4.5%
Common Stocks 4.5%
Berjaya Sports Toto 98,500 113
CIMB Berhad 66,500 80
Gamuda Berhad 33,400 67
Hong Leong Bank 55,600 80
IJM 32,900 45
Magnum 124,700 93
Malayan Banking Berhad 20,600 55
MK Land Holdings 104,700 62
Multi-Purpose Holdings * 129,500 42
SP Setia 38,000 36
Symphony House Berhad * 74,000 37
Total Malaysia (Cost $627) 710
MEXICO 5.0%
Common Stocks 5.0%
America Movil
ADR, Series L (USD) 10,200 243
Cemex 14,861 71
Grupo Aeroportuario del
Sureste ADR (USD) 1,200 21
Grupo Financiero BBVA
Bancomer, Series B * 129,800 110
Grupo Modelo, Series C 12,000 30
Grupo Televisa ADR (USD) 1,924 75
Telmex ADR, Series L (USD) 2,139 69
Wal-Mart de Mexico 59,200 165
Total Mexico (Cost $676) 784
POLAND 0.6%
Common Stocks 0.6%
Telekomunikacja Polska 25,400 89
Total Poland (Cost $85) 89
RUSSIA 5.4%
Common Stocks 5.4%
AO VimpelCom ADR (USD) * 600 $ 39
Gazprom ADR (USD) 5,000 120
GMK Norilsk Nickel (USD) 1,600 82
Lukoil (USD) 2,970 60
Lukoil ADR (USD) 2,530 206
Mobile Telesystems ADR (USD) 1,300 101
Sberbank RF (USD) 389 98
YUKOS ADR (USD) 3,030 142
Total Russia (Cost $702) 848
SOUTH AFRICA 5.2%
Common Stocks 5.2%
ABSA Group 14,600 85
African Bank Investments 50,100 60
Impala Platinum Holdings 2,960 273
Nedcor 8,900 82
Pick 'N Pay Stores 21,900 47
Sanlam 120,990 149
Standard Band Group 7,900 38
Telkom South Africa * 11,300 88
Total South Africa (Cost $676) 822
SOUTH KOREA 18.1%
Common Stocks 16.5%
Amorepacific 500 69
Daewoo Shipbuilding & Marine
Engineering * 3,060 41
Daewoo Shipbuilding & Marine
Engineering GDR (USD) * 900 23
Daewoo Shipbuilding & Marine
Engineering GDR
144A (USD)* 1,400 37
Hanwha Chemical * 13,810 96
Kook Soon Dang 207 4
Kookmin Bank 7,040 257
Kookmin Bank ADR (USD) 600 22
Korean Air Lines 4,300 57
Kumgang Korea Chemical 1,220 103
LG Card 4,710 48
LG Chemical 1,400 56
LG Home Shopping 980 48
LG International 7,880 48
Lotte Chilsung Beverage 210 $ 106
Lotte Confectionery 100 44
NCsoft 730 39
POSCO 610 71
Pusan Bank 14,000 76
Samsung Electronics 1,970 782
Samsung Fire & Marine Insurance 2,000 114
Shinhan Financial 7,500 108
Shinsegae 360 72
South Korea Telecom 1,500 265
2,586
Preferred Stocks 1.6%
Hyundai Motor 7,270 120
Samsung Electronics 620 123
243
Total South Korea (Cost $2,494) 2,829
SWITZERLAND 0.7%
Common Stocks 0.7%
Compagnie Financiere Richemont 100 3
Compagnie Financiere Richemont
ADR (ZAR) 44,400 101
Total Switzerland (Cost $92) 104
TAIWAN 12.4%
Common Stocks 12.4%
Accton Technology 31,351 19
Acer 78,685 116
Advantech 37,639 57
Basso Industry 21,000 42
Benq GDR, 144A (USD) 9,000 58
China Trust Finance Holdings 92,380 96
Delta Electronics 3,650 5
EVA Airways 115,000 49
EVA Airways (Bonus shares) 1,820 1
Evergreen Marine 100,440 88
First Financial Holdings * 86,000 58
Formosa Plastic 73,680 113
Fubon Financial Holdings 78,000 82
Hon Hai Precision Industry 26,000 116
Nan Ya Plastic 68,760 92
Phoenixtec Power 49,180 59
Polaris Securities 101,280 50
Quanta Computer 22,500 61
Ritek * 109,000 77
Taishin Financial Holdings 102,000 $ 72
Taiwan Cellular 62,000 56
Taiwan Semiconductor
Manufacturing 134,640 266
United Microelectronics 152,248 139
Vanguard International
Semiconductor * 372,000 127
Wan Hai Lines 42,620 42
Total Taiwan (Cost $1,640) 1,941
THAILAND 3.9%
Common Stocks 3.9%
Advanced Info Service 53,300 83
Bangkok Bank NVDR * 60,000 129
Italian-Thai Development * 63,400 137
Italian-Thai Development NVDR 2,500 5
Kasikornbank Public NVDR * 69,000 73
Land & Houses NVDR 222,300 67
Siam Commercial Bank * 114,000 118
Total Thailand (Cost $421) 612
TURKEY 4.9%
Common Stocks 4.9%
Akbank 15,382,899 72
Anadolu Efes Biracilik
ve Malt Sanayii 3,917,750 48
Dogan Yayin Holding * 81,409,840 227
Hurriyet Gazete * 37,734,324 100
Turkcell Iletisim Hizmetleri * 32,171,300 245
Turkiye Garanti Bankasi * 33,466,784 78
Total Turkey (Cost $551) 770
UNITED KINGDOM 2.0%
Common Stocks 2.0%
Anglo American (ZAR) 14,300 291
Astro All Asia Networks (MYR) * 20,000 25
Total United Kingdom (Cost $258) 316
SHORT-TERM INVESTMENTS 3.1%
Money Market Funds 3.1%
T. Rowe Price Reserve
Investment Fund, 1.10% # 487,956 488
Total Short-Term
Investments (Cost $488) 488
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
October 31, 2003
Value
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In thousands
Total Investments in Securities
93.1% of Net Assets (Cost $12,036) $ 14,575
Other Assets Less Liabilities 1,075
NET ASSETS $ 15,650
---------------
(ss.)Denominated in currency of the country of incorporation unless otherwise
noted
# 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 $110,000 and represents 0.7% of net assets
ADR American Depository Receipts
GDR Global Depository Receipts
HKD Hong Kong dollar
MYR Malaysian ringgit
NVDR Non Voting Depository Receipt
USD United States dollar
ZAR South African rand
The accompanying notes are an integral part of these financial statements.
Statement of Assets and Liabilities
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
October 31, 2003
In thousands
Assets
Investments in securities, at value (Cost $12,036) $ 14,575
Receivable for shares sold 974
Other assets 482
Total assets 16,031
Liabilities
Total liabilities 381
NET ASSETS $ 15,650
--------------------
Net Assets Consist of:
Undistributed net investment income (loss) $ 88
Undistributed net realized gain (loss) 263
Net unrealized gain (loss) 2,534
Paid-in-capital applicable to 1,103,497 shares of
$0.01 par value capital stock outstanding;
1,000,000,000 shares of the Corporation authorized 12,765
NET ASSETS $ 15,650
--------------------
NET ASSET VALUE PER SHARE $ 14.18
--------------------
The accompanying notes are an integral part of these financial statements.
Statement of Operations
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
In thousands
10/31/02
Through
10/31/03
Investment Income (Loss)
Income
Dividend (net of foreign taxes of $21) $ 172
Interest 1
Total income 173
Investment management and administrative expense 78
Net investment income (loss) 95
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities 273
Foreign currency transactions (17)
Net realized gain (loss) 256
Change in net unrealized gain (loss)
Securities (net of increase in deferred
foreign taxes of $5) 2,534
Net realized and unrealized gain (loss) 2,790
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $ 2,885
--------------------
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 Annual Report
In thousands
10/31/02
Through
10/31/03
Increase (Decrease) in Net Assets
Operations
Net investment income (loss) $ 95
Net realized gain (loss) 256
Change in net unrealized gain (loss) 2,534
Increase (decrease) in net assets from operations 2,885
Distributions to shareholders
Net investment income (2)
Capital share transactions *
Shares sold 12,921
Distributions reinvested 2
Shares redeemed (156)
Increase (decrease) in net assets from capital
share transactions 12,767
Net Assets
Increase (decrease) during period 15,650
Beginning of period --
End of period $ 15,650
--------------------
*Share information
Shares sold 1,116
Distributions reinvested --
Shares redeemed (13)
Increase (decrease) in shares outstanding 1,103
The accompanying notes are an integral part of these financial statements.
Notes to Financial Statements
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
October 31, 2003
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 portfolio 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
The fund values its investments and computes its net asset value per share 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 mutual fund's closing net asset
value per share 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 the T. Rowe Price Valuation Committee,
established by the fund's Board of Directors.
Most foreign markets close before the NYSE. Normally, developments that could
affect the values of securities that occur between the close of a foreign market
and the close of the NYSE will not be reflected in security valuations used by
the fund to compute its share price. However, if developments are so significant
that they will, in the judgment of the fund, clearly and materially affect
security values, such valuations may be adjusted to reflect the estimated fair
value of the securities as of the close of the NYSE, as determined in good faith
by the T. Rowe Price Valuation Committee, established by the fund's 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 security 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. Dividends from mutual fund
investments are reflected as dividend income; capital gain distributions from
mutual fund investments are reflected as realized gain/loss. In the normal
course of business, the fund enters into contracts that provide general
indemnifications. The fund's maximum exposure under these arrangements is
dependent on claims that may be made against the fund in the future and,
therefore, cannot be estimated; however, based on experience, the risk of
material loss from such claims is considered remote.
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 October 31, 2003, approximately 86% of the fund's net assets were invested in
securities of companies located in emerging markets or denominated in the
currencies of emerging market countries. 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 $16,035,000 and $4,767,000, respectively, for the year ended October
31, 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 under Subchapter M of the Internal
Revenue Code 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 significantly 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. Financial records are not adjusted for temporary differences.
Distributions during the year ended October 31, 2003 totaled $2,000 and were
characterized as ordinary income for tax purposes. At October 31, 2003, the
tax-basis components of net assets were as follows:
- --------------------------------------------------------------------------------
Unrealized appreciation $ 2,639,000
Unrealized depreciation (105,000)
Net unrealized appreciation (depreciation) 2,534,000
Undistributed ordinary income 351,000
Paid-in capital 12,765,000
Net assets $ 15,650,000
--------------------
For the year ended October 31, 2003, the fund recorded the following permanent
reclassifications to reflect tax character. Reclassifications to paid-in capital
relate primarily to nondeductible organizational expenses. Results of operations
and net assets were not affected by these reclassifications.
- --------------------------------------------------------------------------------
Undistributed net investment income $ (5,000)
Undistributed net realized gain 7,000
Paid-in capital (2,000)
At October 31, 2003, the cost of investments for federal income tax purposes was
$12,036,000.
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 October 31, 2003, the fund had a deferred tax liability of
$5,000.
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 October 31, 2003, $14,000 was payable under the
agreement.
The fund may invest in the T. Rowe Price Reserve Investment Fund and the 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. During the year ended October 31, 2003, dividend income from
the Reserve Funds totaled $3,000.
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
Report of Independent Auditors
To the Board of Directors of T. Rowe Price Institutional International Funds,
Inc.and Shareholders of T. Rowe Price Institutional Emerging Markets Equity
Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, 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 T. Rowe Price Institutional
Emerging Markets Equity Fund (one of the portfolios comprising T. Rowe Price
Institutional International Funds, Inc., hereafter referred to as the "Fund") at
October 31, 2003, and the results of its operations, the changes in its net
assets and the financial highlights for the fiscal period presented, in
conformity with accounting principles generally accepted in the United States of
America. 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 audit. We conducted our audit of these financial statements in accordance
with auditing standards generally accepted in the United States of America 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 audit, which included
confirmation of securities at October 31, 2003 by correspondence with the
custodian, provides a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Baltimore, Maryland
November 24, 2003
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
Tax Information (Unaudited) for the Tax Year Ended 10/31/03
- --------------------------------------------------------------------------------
We are providing this information as required by the Internal Revenue Code. The
amounts shown may differ from those elsewhere in this report because of
differences between tax and financial reporting requirements.
For taxable non-corporate shareholders, $136,000 of the fund's distributed
income and short-term capital gains represents qualified dividend income subject
to the 15% rate category.
The fund will pass through foreign source income of $181,000 and foreign taxes
paid of $29,000.
T. Rowe Price Institutional Emerging Markets Equity Fund
Certified Annual Report
About the Fund's Directors and Officers
- --------------------------------------------------------------------------------
Your fund is governed by a Board of Directors that meets regularly to review
investments, performance, expenses, and other business matters, and is
responsible for protecting the interests of shareholders. The majority of the
fund's directors are independent of T. Rowe Price Associates, Inc. (T. Rowe
Price); "inside" directors are officers of T. Rowe Price. The Board of
Directors elects the fund's officers, who are listed in the final table. The
business address of each director and officer is 100 East Pratt Street,
Baltimore, MD 21202. The Statement of Additional Information includes additional
information about the fund directors and is available without charge by calling
a T. Rowe Price representative at 1-800-225-5132.
Independent Directors
Name
(Date of Birth)
Year Elected*
Principal Occupation(s) During Past 5 Years and Directorships of Other Public
Companies
- --------------------------------------------------------------------------------
Anthony W. Deering
(1/28/45)
1991
Director, Chairman of the Board, President, and Chief Executive Officer, The
Rouse Company, real estate developers; Director, Mercantile Bank (4/03 to
present)
Donald W. Dick, Jr.
(1/27/43)
1989
Principal, EuroCapital Advisors, LLC, an acquisition and management advisory
firm
David K. Fagin
(4/9/38)
2001
Director, Golden Star Resources Ltd., Canyon Resources Corp. (5/00 to
present), and Pacific Rim Mining Corp. (2/02 to present); Chairman and
President, Nye Corp.
F. Pierce Linaweaver
(8/22/34)
2001
President, F. Pierce Linaweaver & Associates, Inc., consulting environmental
and civil engineers
John G. Schreiber
(10/21/46)
2001
Owner/President, Centaur Capital Partners, Inc., a real estate investment
company; Senior Advisor and Partner, Blackstone Real Estate Advisors, L.P.;
Director, AMLI Residential Properties Trust, Host Marriott Corp., and The
Rouse Company
Hubert D. Vos
(8/2/33)
2001
Owner/President, Stonington Capital Corp., a private investment company
Paul M. Wythes
(6/23/33)
1996
Founding Partner, Sutter Hill Ventures, a venture capital limited partnership,
providing equity capital to young high-technology companies throughout the
United States; Director, Teltone Corp.
*Each independent director oversees 106 T. Rowe Price portfolios and serves
until retirement, resignation, or election of a successor.
Inside Directors
Name
(Date of Birth)
Year Elected*
[Number of T. Rowe Price
Portfolios Overseen]
Principal Occupation(s) During Past 5 Years and Other Directorships of Public
Companies
- --------------------------------------------------------------------------------
James S. Riepe
(6/25/43)
2002
[106]
Director and Vice President, T. Rowe Price; Vice Chairman of the Board,
Director, and Vice President, T. Rowe Price Group, Inc.; Chairman of the Board
and Director, T. Rowe Price Global Asset Management Limited, T. Rowe Price
Global Investment Services Limited, T. Rowe Price Investment Services, Inc.,
T. Rowe Price Retirement Plan Services, Inc., and T. Rowe Price Services,
Inc.; Chairman of the Board, Director, President, and Trust Officer, T. Rowe
Price Trust Company; Director, T. Rowe Price International, Inc.; Chairman of
the Board, Institutional International Funds
M. David Testa
(4/22/44)
1989
[106]
Chief Investment Officer, Director, and Vice President, T. Rowe Price; Vice
Chairman of the Board, Chief Investment Officer, Director, and Vice President,
T. Rowe Price Group, Inc.; Director, T. Rowe Price Global Asset Management
Limited and T. Rowe Price Global Investment Services Limited; Chairman of the
Board and Director, T. Rowe Price International, Inc.; Director and Vice
President, T. Rowe Price Trust Company; Vice President, Institutional
International Funds
*Each inside director serves until retirement, resignation, or election of a
successor.
Officers
Name (Date of Birth)
Title and Fund(s) Served
Principal Occupation(s)
- --------------------------------------------------------------------------------
Christopher D. Alderson (3/29/62)
Vice President, Institutional International Funds
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
International, Inc.
Mark C.J. Bickford-Smith (4/30/62)
Vice President, Institutional International Funds
Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International,
Inc.
Stephen V. Booth (6/21/61)
Vice President, Institutional International Funds
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
Trust Company
Joseph A. Carrier (12/30/60)
Treasurer, Institutional International Funds
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
Investment Services, Inc.
Roger L. Fiery III, CPA (2/10/59)
Vice President, Institutional International Funds
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price
International, Inc., and T. Rowe Price Trust Company
John R. Ford, CFA (11/25/57)
President, Institutional International Funds
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chief Investment
Officer, Director, and Vice President, T. Rowe Price International, Inc.
Henry H. Hopkins (12/23/42)
Vice President, Institutional International Funds
Director and Vice President, T. Rowe Price Group, Inc., T. Rowe Price
Investment Services, Inc., T. Rowe Price Services, Inc., and T. Rowe Price
Trust Company; Vice President, T. Rowe Price, T. Rowe Price International,
Inc., and T. Rowe Price Retirement Plan Services, Inc.
Patricia B. Lippert (1/12/53)
Secretary, Institutional International Funds
Assistant Vice President, T. Rowe Price and T. Rowe Price Investment Services,
Inc.
George A. Murnaghan (5/1/56)
Vice President, Institutional International Funds
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price
International, Inc., T. Rowe Price Investment Services, Inc., and T. Rowe
Price Trust Company
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Officers (continued)
R. Todd Ruppert (5/7/56)
Vice President, Institutional International Funds
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., T. Rowe Price
Retirement Plan Services, Inc., and T. Rowe Price Trust Company; Chief
Investment Officer, Director, and President, T. Rowe Price Global Asset
Management Limited and T. Rowe Price Global Investment Services Limited
James B.M. Seddon (6/17/64)
Vice President, Institutional International Funds
Vice President, T. Rowe Price Group, Inc., and T. Rowe Price International,
Inc.
Julie L. Waples (6/12/70)
Vice President, Institutional International Funds
Vice President, T. Rowe Price
David J.L. Warren (4/14/57)
Vice President, Institutional International Funds
Vice President, T. Rowe Price and T. Rowe Price Group, Inc.; Chief Executive
Officer, Director, and President, T. Rowe Price International, Inc.; Director,
T. Rowe Price Global Asset Management Limited and T. Rowe Price Global
Investment Services Limited
William F. Wendler II, CFA (3/14/62)
Vice President, Institutional International Funds
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
International, Inc.
Edward A. Wiese, CFA (4/12/59)
Vice President, Institutional International Funds
Vice President, T. Rowe Price, T. Rowe Price Group, Inc., and T. Rowe Price
Trust Company; Chief Investment Officer, Director, and Vice President, T. Rowe
Price Savings Bank
Unless otherwise noted, officers have been employees of T. Rowe Price or T. Rowe
Price International for at least five years.
Item 2. Code of Ethics.
As of the end of the period covered by this report, the registrant had adopted a
code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions. A copy of this code of
ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were
approved or waivers were granted to this code of ethics during the period
covered by this report.
Item 3. Audit Committee Financial Expert.
The registrant's Board of Directors/Trustees has determined that Mr. David K.
Fagin qualifies as an audit committee financial expert, as defined in Item 3 of
Form N-CSR. Mr. Fagin is considered independent for purposes of Item 3 of Form
N-CSR.
Item 4. Principal Accountant Fees and Services.
Not required at this time.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. [Reserved]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. [Reserved]
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) The registrant's principal executive officer and principal financial officer
are aware of no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
that has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a)(1) The registrant's code of ethics pursuant to Item 2 of Form N-CSR is
attached.
(a)(2) Separate certifications by the registrant's principal executive officer
and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of
1940, are attached.
(b) A certification by the registrant's principal executive officer and
principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940,
is attached.
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 December 19, 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 December 19, 2003
By /s/ Joseph A. Carrier
Joseph A. Carrier
Principal Financial Officer
Date December 19, 2003