<PAGE>
Semiannual Report
INTERNATIONAL
DISCOVERY
FUND
- ---------------
April 30, 1997
- ---------------
[LOGO OF T. ROWE PRICE APPEARS HERE]
<PAGE>
REPORT HIGHLIGHTS
----------------------------------------------------------------------------
. Smaller foreign companies turned in mixed performances over the last six
months, although overall returns were lackluster.
. Latin American markets performed best, led by Brazil. Returns in Europe
continued to be robust, but Asian markets lagged again, dragged down by Japan
and Malaysia.
. The International Discovery Fund posted a small gain of 3.15% for the six
months ended April 30, ahead of its benchmark, helped by relatively more
exposure to Brazil and less to Japan.
. We believe that steady, sustainable economic growth and low inflation should
support small-company earnings growth, leading to better performance later
this year.
<PAGE>
FELLOW SHAREHOLDERS
Smaller foreign companies once again turned in mixed performances over the last
six months. On an overall basis, foreign stocks were lackluster, with the Morgan
Stanley EAFE Index posting a small gain. Your fund produced a modest return,
although somewhat better than its benchmark.
The stock markets of Latin America performed best, led by
strong gains in Brazil and Mexico. European markets were again
robust, paced by the Netherlands, Norway, and the U.K. Asian
markets remained lackluster, with particularly weak results in
Japan, Malaysia, and Thailand. The dollar rose against the yen
and most European currencies, dampening returns to U.S.
investors.
<TABLE>
<CAPTION>
-----------------------
PERFORMANCE COMPARISON
--------------------------------------------------------
Periods Ended 4/30/97 6 Months 12 Months
--------------------------------------------------------
<S> <C> <C>
International Discovery Fund 3.15% 1.49%
--------------------------------------------------------
MSCI EAFE Index 1.72 - 0.60
</TABLE>
The International Discovery Fund produced a small gain for the
six-month period ended April 30, ahead of the EAFE benchmark,
as shown in the table. The fund was helped by its relatively
lower exposure to Japan and higher stake in Brazil. In Europe,
our overweighting in the strong Norwegian market was tempered
by our underweightings in the robust markets of Germany and
Switzerland. For the 12-month period, the fund also posted a
small gain while the broad foreign market was flat.
In addition to favorable country allocations, our stock
selections helped fund performance as our smaller growth
stocks in Hong Kong and Malaysia posted good results despite
poor showings by those markets.
MARKET REVIEW
Europe
We continued to restructure the U.K. weighting in your
portfolio, ending at 16% of assets as of April 30. We sold
shares in companies where the earnings outlook is uncertain,
such as technology outfit Videologic, as well as others that
had become fully valued, such as auto parts supplier Transtec.
We visited most of our U.K. companies
1
<PAGE>
early in 1997 to gauge their vulnerability to the
strengthening pound, which can hurt exports by making U.K.
goods and services more expensive for foreign buyers. Overall,
we do not believe the appreciating currency will darken the
favorable long-term prospects of these companies. Furthermore,
we expect no change to economic policy by the incoming Labour
Government.
We also embarked on road trips to Germany and Switzerland. We
sold some German cyclicals after their share prices recovered,
including auto parts supplier Kolbenschmidt and machine tool
producer Pittler. Our Swiss visits uncovered new buying
opportunities. After years of subpar performance, new
management at Swisslog, a computer service company, is
improving profit margins and considering ways of returning
excess capital to shareholders. We believe these factors are
not yet recognized by the market. Disetronic Holdings, a Swiss
medical company involved in infusion pumps for diabetes, is
poised for sustained earnings growth of 25% to 35% a year, in
our view, enhancing its prospects for stock price
appreciation. Together, Germany and Switzerland account for 7%
of fund assets.
--------------------
MARKET PERFORMANCE
----------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Local Local Currency U.S.
Ended 4/30/97 Currency vs. U.S. Dollars Dollars
----------------------------------------------------------------
<S> <C> <C> <C>
Brazil 43.30% - 3.39% 38.45%
----------------------------------------------------------------
France 23.74 - 12.48 8.30
................................................................
Germany 28.30 - 12.62 12.11
................................................................
Hong Kong - 0.04 - 0.18 - 0.22
................................................................
Indonesia 12.47 - 4.18 7.77
................................................................
Italy 25.88 - 11.42 11.50
................................................................
Japan - 3.19 - 10.38 - 13.23
................................................................
Malaysia - 7.02 0.66 - 6.41
................................................................
Mexico 16.85 0.25 17.13
................................................................
Netherlands 31.15 - 12.95 14.17
................................................................
Norway 25.56 - 10.47 12.42
................................................................
Sweden 26.05 - 16.33 5.47
................................................................
United Kingdom 13.06 - 0.36 12.66
................................................................
</TABLE>
Source: FAME Information Services, Inc.; using MSCI indices.
In Italy, we sold positions in Danieli, a minimill steel
producer, and Saes Getter, the world leader in components used
to purify gases. Both suffer from low visibility due to the
reticence of management. We bought luxury shoemaker Gucci
Group because we believed its robust earnings growth rate was
not reflected in its valuation.
Southeast Asia
The Hong Kong market suffered a disappointing six months,
reversing the euphoria of late 1996. The surge in real estate
prices, up an average
2
<PAGE>
of 20% so far in 1997, compelled the government to take steps
to dampen speculative activities and sharply increase land
supply over the next few years. These preemptive moves,
combined with Hong Kong's sensitivity to rising U.S. interest
rates via its dollar-linked currency, led to a sharp
correction in real estate stocks. While the banking sector has
enjoyed strong demand for mortgages and has been reporting
record profits, rising U.S. interest rates increased concerns
about profitability in coming months, leading to selling
pressure in bank stocks. Your fund holds a 5% position in Hong
Kong.
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
- ---------------------------
GEOGRAPHIC DIVERSIFICATION
- --------------------------------------------------------------------------------
Based on net assets as of 4/30/97.
<S> <C>
Latin America 5%
Japan 13%
Europe 47%
Far East 22%
Other and Reserves 13%
</TABLE>
Among the Chinese stocks in the portfolio, we took profits in
Guangshen Railway due to the threat of increased competition
from bus operators, redeploying the proceeds in Shenzen
Expressway, which operates the toll road linking Hong Kong
with southern China. The Taiwanese market was outstanding. As
interest rates fell, local investors shifted savings into the
stock market. Their principal focus has been the technology
sector, where Taiwanese companies are gaining significant
business outsourced from U.S. technology companies. Fund
holdings in Inventec and Clevo, both notebook computer
producers for clients such as Compaq, performed well. Our
exposure here rose to 3% of assets.
Australia and New Zealand were lackluster as the
dollar-denominated local bond markets deteriorated,
significantly increasing the yield advantage of these bonds
over their U.S. counterparts and drawing investor interest
away from stocks. Meanwhile, the strength of the local
currencies hampered export growth. Smaller companies fared
little better, although we initiated a position in Australia
in Skilled Engineering, which specializes in the outsourcing
of personnel and temporary labor at a time when Australian
companies are scaling back operations. In New Zealand, we
eliminated our position in CDL Hotels because the strong New
Zealand dollar is crimping tourism.
3
<PAGE>
The Indonesian market continued to be plagued by the rapid
growth of credit and poor lending controls of the last few
years, which are beginning to take their toll on bank stocks.
The upcoming elections to the assembly, coupled with the
spillover effect of the U.S. Federal Reserve's tighter stance
on monetary policy, should lead to continued volatility in
this market. We used periods of market strength to reduce our
exposure to Indonesia over the last six months.
After months of unrelenting increases in lending to real
estate and stock market speculators, which contributed to a
sharp correction in stocks in April, Malaysia's central bank
took steps to curb such excesses. We added two strong domestic
companies to the portfolio: Berjaya Group (gaming, retail,
insurance) and Malaysian Assurance Alliance (one of the
largest indigenous life insurers). These moves helped raise
our country weighting to 4%. Although our investments are
concentrated in solid domestic companies in infrastructure,
life insurance, beverages, tobacco, and telecommunications,
the correction knocked prices down considerably. However,
valuations have become more attractive.
<TABLE>
<CAPTION>
------------------------
INDUSTRY DIVERSIFICATION
----------------------------------------------------------
Percent of Percent of
Net Assets Net Assets
10/31/96 4/30/97
---------------------------------------------------------
<S> <C> <C>
Services 28.6% 26.5%
.........................................................
Capital Equipment 21.0 23.1
.........................................................
Consumer Goods 14.2 15.2
.........................................................
Finance 15.7 14.4
.........................................................
Materials 8.2 8.0
.........................................................
Energy 3.3 3.8
.........................................................
All Other 0.3 1.8
.........................................................
Multi-industry 2.0 -
.........................................................
Reserves 6.7 7.2
---------------------------------------------------------
Total 100.0% 100.0%
</TABLE>
Japan
The miserable performance of Japan's equity markets, and of
smaller companies in particular, continued into 1997. The
economy, having rebounded from a long recession to become one
of the fastest growing of the major industrialized countries,
is clearly no longer the culprit. The blame goes to continued
worries about the financial system, the increasing pace of
deregulation, which is hurting the prospects of many domestic
industries, and an overall environment of corporate earnings
downgrades. The mood in the stock market is one of depression,
with many domestic investors having apparently lost hope for a
recovery.
4
<PAGE>
WE CONTINUED TO MAINTAIN RELATIVELY LOW EXPOSURE TO JAPAN. . .
This environment was especially difficult for smaller
companies. The areas that performed best over the last six
months were exporters and a shrinking group of Japan's large,
blue chip companies. Smaller companies, which derive virtually
all of their earnings from the domestic economy, were shunned.
Several earnings downgrades further darkened the picture. We
continued to maintain relatively low exposure to Japan, just
13% of fund assets. Furthermore, our holdings are more
attractively valued than other small Japanese stocks, recently
trading at an average of 26 times current earnings versus 37
times earnings for the small-company section of the Tokyo
Stock Exchange. Also, our holdings have healthier balance
sheets. Although smaller companies have become much cheaper,
continued deregulation and savage competition will make
sustained earnings growth difficult.
We added to positions in pharmaceuticals, electronics, and
precision instruments while reducing exposure to retailers. In
pharmaceuticals, we bought Rohto Pharmaceutical, a maker of
over-the-counter eye drops and indigestion medicines, and Toa
Medical Electronics, a blood testing equipment manufacturer.
Both companies were trading at around 23 times earnings. In
electronics, we added to positions in Fuji Machine, which
makes assembly machines for electronic components, and in
Hirose Electric, a manufacturer of connectors for personal
computers and telecommunication systems. In precision
instruments, we added the recently listed Noritsu Koki, the
world's largest maker of photo development equipment, ahead of
Fuji Photo. The weakened yen boosted the company's overseas
revenues.
Latin America
In Brazil, reform and privatization proved once again to be
the driving themes, with the telecommunications and
electricity sectors leading the way. Although the sharp
deterioration in the trade balance may eventually force the
government to take steps to slow the economy, the reformist
drive is stronger in Brazil than anywhere else in the region,
a trend we are convinced will raise the country's sustainable
long-term growth potential. We added to regional
telecommunications outfit Telecomunicacoes do Parana and
eliminated our holding in food manufacturer Ceval. Our
weighting in Brazil remained at 3%, our largest stake in Latin
America.
5
<PAGE>
The trade situation was the reverse in Mexico, where exporters
continued to benefit from the currency devaluation and the
economic recovery has not been constrained by pressure on the
trade balance. Encouragingly, foreign direct investment in
Mexico has remained robust throughout the peso crisis, and our
forecasts are for another $10 billion in 1997. We see the
economy entering a sound recovery into 1998 as the banking
sector recapitalizes and real (inflation-adjusted) wages pick
up from postdevaluation lows. We eliminated Pepsi bottler
Emvasa, bringing our Mexican exposure to 1%.
INVESTMENT OUTLOOK
Although the performance of smaller foreign companies has been
mixed so far in 1997, we hope things will improve later in the
year. The economic outlook worldwide remains favorable,
characterized by moderate, sustainable growth with low
inflation. This scenario supports good corporate profits
growth abroad, which should be the principal driver of
performance over the balance of the year. The economic outlook
also includes relatively subdued interest rates, which should
continue to support current equity valuations.
The weakness of smaller companies in Japan over the last year
has discounted a lot of bad news, and we believe Japan's
market may rise over the balance of the year. In other parts
of the world, investment opportunities look selectively
attractive among smaller companies in the established markets
of Europe as well as the developing economies of Asia and
Latin America.
Respectfully submitted,
/s/ Martin G. Wade
Martin G. Wade
President
May 20, 1997
6
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- ----------------------------------------------------------------------------
WHY JAPAN REMAINS PIVOTAL TO INTERNATIONAL INVESTING
The Japanese stock market has disappointed investors for most of this
decade. Since Japanese stocks make up a significant portion of many
diversified international portfolios (they represented 29% of the Morgan
Stanley Europe Australasia Far East Index as of March 31), their troubles
are a major reason why foreign stocks as a group have lagged behind their
U.S. counterparts in recent years. For most of the 1990s, your fund
maintained a relatively low exposure to Japanese stocks compared with the
EAFE Index. As of April 30, 13% of assets were invested in Japan.
Diversification Is Key
Some experts think that after its long slide, the Japanese market is poised
for a strong recovery. We believe the overall market is likely to provide
moderate returns in coming years as the economy recovers from a protracted
recession. More important, we firmly believe that investors should maintain
exposure to Japanese stocks for several reasons:
. The Japanese stock market offers excellent diversification away from the
U.S. market. Over the 15 years through 1996, the two markets moved in the
same direction only 7% of the time. Therefore, adding Japanese stocks to
an all-U.S. portfolio can reduce risk by smoothing out a portfolio's
overall volatility.
. Though certainly not cheap by international standards, the valuations of
Japanese stocks are becoming more reasonable. The overall market was
recently trading at 40 times earnings, down from a high of more than 100
times earnings but still significantly above the U.S. level of about 18
times projected profits on the Standard & Poor's 500 Stock Index.
. While some sectors of the Japanese economy, particularly the banks, still
face enormous hurdles, the country is home to many internationally
competitive companies trading at fair valuations. Given their global
orientation, these companies are becoming increasingly committed to
enhancing shareholder value, a concept that has proven successful in the
U.S. but has been traditionally downplayed by Japanese corporations.
. Japan's economy, second only to that of the U.S., has been in recession
for more than five years and is now experiencing a moderate recovery. The
country's gross domestic product grew at around 2.9% for the fiscal year
ended in March, among the highest of the industrialized countries.
. The Japanese economy is undergoing significant structural changes. Banks
are increasingly aggressive in writing off their nonperforming loans. Over
the next few years, the financial markets will be deregulated in Japan's
"Big Bang." More companies are recognizing the importance of shareholder
value. These changes should result in attractive potential investments.
Your fund will continue to target the more attractive areas of the Japanese
market. As of April 30, our holdings were concentrated in globally
competitive and export-oriented industries, such as consumer and industrial
electronics, that had benefited from the weak yen. Recently, we have bought
some domestic-oriented companies at attractive prices. In sum, while
Japanese stocks have had their problems and will continue to be volatile, we
feel they provide effective diversification and will bolster the performance
of international portfolios over the long haul.
7
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
- --------------------
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
TWENTY-FIVE LARGEST HOLDINGS
Percent of
Net Assets
4/30/97
-------------------------------------------------------------------------
<S> <C>
JBA Holdings, United Kingdom 1.4%
..........................................................................
Azkoyen, Spain 1.1
..........................................................................
Corporate Services Group, United Kingdom 1.0
..........................................................................
Prosegur Seguridad, Spain 1.0
..........................................................................
Ashtead Group, United Kingdom 0.9
--------------------------------------------------------------------------
Ahrend Groep, Netherlands 0.9
..........................................................................
Mayflower, United Kingdom 0.9
..........................................................................
Tomra Systems, Norway 0.8
..........................................................................
Blue Square, Israel 0.8
..........................................................................
CRT Group, United Kingdom 0.8
--------------------------------------------------------------------------
Serco Group, United Kingdom 0.8
..........................................................................
Powerscreen International, United Kingdom 0.8
..........................................................................
Swisslog, Switzerland 0.8
..........................................................................
Randstad Holdings, Netherlands 0.8
..........................................................................
Devro International, United Kingdom 0.7
--------------------------------------------------------------------------
Sage Group, United Kingdom 0.7
..........................................................................
Merkantildata, Norway 0.7
..........................................................................
Time Engineering, Malaysia 0.7
..........................................................................
Altran Technologies, France 0.6
..........................................................................
Lukoil, Russia 0.6
--------------------------------------------------------------------------
Cipe France, France 0.6
..........................................................................
Regal Hotel Group, United Kingdom 0.6
..........................................................................
Securitas, Sweden 0.6
..........................................................................
Greggs, United Kingdom 0.6
..........................................................................
Pizza Express, United Kingdom 0.6
--------------------------------------------------------------------------
Total 19.8%
</TABLE>
8
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
- ----------------------
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.
INTERNATIONAL DISCOVERY FUND
--------------------------------------------------------------------
[LINE GRAPH APPEARS HERE]
<TABLE>
International
MSCI EAFE Discovery
Date Index Fund
<S> <C> <C>
12/30/88 10,000 10,000
4/89 10,128 10,810
4/90 8,827 13,524
4/91 9,243 14,225
4/92 8,487 14,106
4/93 10,359 14,672
4/94 12,114 18,615
4/95 12,827 16,081
4/96 14,333 18,772
4/97 14,248 19,053
</TABLE>
- ------------------------------------
AVERAGE ANNUAL COMPOUND TOTAL RETURN
- --------------------------------------------------------------------------------
This table shows how the fund would have performed each year if its
actual (or cumulative) returns for the periods shown had been earned
at a constant rate.
<TABLE>
<CAPTION>
Since Inception
Periods Ended 4/30/97 1 Year 3 Years 5 Years Inception Date
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
International Discovery Fund 1.49% 0.78% 6.20% 8.05% 12/30/88
...........................................................................................
</TABLE>
Investment return and principal value represent past performance and
will vary. Shares may be worth more or less at redemption than at
original purchase.
9
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Unaudited
FINANCIAL HIGHLIGHTS For a share outstanding throughout each period
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
6 Months Year Ten Months++ Year
Ended Ended Ended Ended
4/30/97 10/31/96 10/31/95 10/31/94 10/31/93 12/31/92 12/31/91
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE
Beginning of period $ 15.97 $ 14.43 $ 17.63 $ 16.16 $ 11.68 $ 12.99 $ 11.75
.......................................................................................................
Investment activities
Net investment income 0.01 0.07 0.10 0.04 0.07* 0.13* 0.13*
Net realized and
unrealized gain (loss) 0.49 1.59 (2.38) 1.52 4.41 (1.31) 1.24
.......................................................................................................
Total from
investment activities 0.50 1.66 (2.28) 1.56 4.48 (1.18) 1.37
.......................................................................................................
Distributions
Net investment income (0.07) (0.10) (0.06) (0.07) -- (0.13) (0.13)
Net realized gain (0.06) (0.02) (0.87) (0.02) -- -- --
.......................................................................................................
Total distributions (0.13) (0.12) (0.93) (0.09) -- (0.13) (0.13)
.......................................................................................................
Redemption fees added
to paid-in-capital -- -- 0.01 -- -- -- --
NET ASSET VALUE
End of period $ 16.34 $ 15.97 $ 14.43 $ 17.63 $ 16.16 $ 11.68 $ 12.99
-------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
Total return 3.15% 11.60% (13.06)% 9.67% 38.36%* (9.08)%* 11.69%*
...................................................................................................................................
Ratio of expenses to
average net assets 1.40%+ 1.45% 1.50% 1.50% 1.50%+* 1.50%* 1.50%*
...................................................................................................................................
Ratio of net investment
income to average
net assets 0.04%+ 0.40% 0.55% 0.38% 0.81%+* 1.07%* 1.03%*
...................................................................................................................................
Portfolio turnover rate 64.7%+ 52.0% 43.5% 57.4% 71.8%+ 38.0% 56.3%
...................................................................................................................................
Average commission
rate paid $ 0.0004 $ 0.0013 $ -- $ -- $ -- $ -- $ --
...................................................................................................................................
Net assets, end of period
(in thousands) $299,811 $325,639 $325,374 $503,442 $329,001 $166,362 $166,819
...................................................................................................................................
</TABLE>
* Excludes expenses in excess of a 1.50% voluntary expense limitation in effect
through 12/31/93.
+ Annualized.
++ The funds fiscal year-end was changed to 10/31.
The accompanying notes are an integral part of these financial statements.
10
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Unaudited April 30, 1997
<TABLE>
<CAPTION>
STATEMENT OF NET ASSETS Shares/Par Value
- ---------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
ARGENTINA 0.2%
Common Stocks 0.2%
Enron Global Power & Pipeline (USD) 20,878 $ 616
................................................................................
Total Argentina (Cost $537) 616
..............
AUSTRALIA 2.9%
Common Stocks and Rights 2.9%
AAPC Limited 187,030 114
................................................................................
Acacia Resources * 395,000 588
................................................................................
BRL Hardy 291,006 813
................................................................................
ERG Limited 537,238 704
................................................................................
Energy Equity 888,000 873
................................................................................
Harvey Norman Holdings 36,531 194
................................................................................
Henry Walker Group 273,767 508
................................................................................
Norvet * 386,000 346
................................................................................
Novus Petroleum 472,877 1,475
................................................................................
Skilled Engineering 314,000 624
................................................................................
Southern Star Group * 422,000 560
................................................................................
St. George Bank 76,970 473
................................................................................
Stanilite Pacific * 209,476 --
................................................................................
Tyndall Australia 719,116 1,110
................................................................................
Tyndall Australia, Rights, 5/8/97 * 71,911 25
................................................................................
Walker 491,000 352
................................................................................
Total Australia (Cost $8,543) 8,759
..............
BELGIUM 0.3%
Common Stocks 0.3%
Barco 4,960 845
................................................................................
Total Belgium (Cost $663) 845
..............
BRAZIL 2.7%
Common Stocks 0.6%
Cia Paranaense de Energia Copel 58,982,000 909
................................................................................
Cia Paulista de Forca e Luz 2,353,000 365
................................................................................
</TABLE>
11
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Companhia de Electricidade do Estado de Rio de Janeiro * 757,237,000 $ 477
.............................................................................................
Telecomunicacoes de Minas Gerais * 149,683 21
.............................................................................................
1,772
..............
Preferred Stocks 2.1%
Banco Nacional * 45,992,000 --
.............................................................................................
Centrais Electricas de Santa Catarina * 391,500 552
.............................................................................................
Cia Brasileira de Petroleo Ipiranga 16,099,000 251
.............................................................................................
Cia Energetica Minas Gerais ADR,
Sponsored, Nonvoting (USD) * 11,130 505
.............................................................................................
Cia Paulista de Forca e Luz 23,796 3
.............................................................................................
Dixie Toga 42,430 32
.............................................................................................
Electricidade de Sao Paulo * 3,058,000 614
.............................................................................................
Globex Utilidades 22,000 393
.............................................................................................
Lojas Renner 6,534,220 393
.............................................................................................
Multibras Eletrodomesticos 334,000 396
.............................................................................................
Pao de Acucar GDS (USD) 28,035 554
.............................................................................................
Telecomunicacoes de Minas Gerais 6,771,000 1,078
.............................................................................................
Telecomunicacoes do Parana 632,000 434
.............................................................................................
Telecomunicacoes do Rio de Janeiro 7,084,000 1,179
.............................................................................................
6,384
..............
Total Brazil (Cost $6,880) 8,156
..............
CHILE 0.3%
Common Stocks 0.3%
Chilquinta ADR (USD) 13,710 213
.............................................................................................
Santa Isabel ADR (USD) 13,616 332
.............................................................................................
Sociedad Quimica Minera de Chile (Class B) ADR (USD) 5,976 354
.............................................................................................
Total Chile (Cost $908) 899
..............
CHINA 1.0%
Common Stocks 0.8%
China Pharmaceutical (HKD) 654,000 127
.............................................................................................
Guangshen Railway (HKD) 776,000 371
.............................................................................................
Maanshan Iron & Steel (HKD) 2,668,000 585
.............................................................................................
Nanjing Telecom (HKD) 160,000 50
.............................................................................................
Shanghai Diesel Engine (Class B) (USD) * 730,600 356
.............................................................................................
</TABLE>
12
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Shanghai New Asia (Class B) (USD) 646,000 $ 379
....................................................................................
Shenzhen Expressway (Class H) (HKD) * 1,996,000 657
....................................................................................
2,525
..............
Convertible Bonds 0.2%
Qingling Motors, 3.50%, 1/22/02 USD 529,000 519
....................................................................................
519
..............
Total China (Cost $2,828) 3,044
..............
CZECH REPUBLIC 0.2%
Common Stocks 0.2%
IPS Praha * 69,267 526
....................................................................................
Total Czech Republic (Cost $453) 526
..............
DENMARK 1.1%
Common Stocks 1.1%
Bang & Olufsen (Class B) 25,170 1,451
....................................................................................
ISS International (Class B) * 35,020 1,036
....................................................................................
Oticon Holdings * 4,860 789
....................................................................................
Total Denmark (Cost $2,708) 3,276
..............
FINLAND 1.0%
Common Stocks 1.0%
Cultor 32,336 1,791
....................................................................................
Huhtamaki 18,360 801
....................................................................................
Konecranes International 11,000 423
....................................................................................
Total Finland (Cost $2,537) 3,015
..............
FRANCE 4.2%
Common Stocks 4.2%
Altran Technologies 5,502 1,914
....................................................................................
BIC 10,669 1,691
....................................................................................
But 14,130 750
....................................................................................
CET 13,720 1,175
....................................................................................
Castorama Dubois 8,204 1,213
....................................................................................
Cipe France 13,550 1,904
....................................................................................
Guilbert 10,086 1,573
....................................................................................
</TABLE>
13
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Rexel 3,100 $ 826
.............................................................................................
Spir Communication 5,920 515
.............................................................................................
Television Francaise 10,540 1,017
.............................................................................................
Total France (Cost $10,135) 12,578
..............
GERMANY 3.1%
Common Stocks 1.5%
Altana 1,830 1,416
.............................................................................................
Buderus 1,580 741
.............................................................................................
Eurobike 55,070 1,462
.............................................................................................
Sixt 1,012 681
.............................................................................................
VBH Holdings 17,500 273
.............................................................................................
4,573
..............
Preferred Stocks 1.6%
Berentzen Gruppe 23,350 661
.............................................................................................
Marschollek Lautenshaeger 7,320 1,479
.............................................................................................
Rhon Klinikum 14,580 1,768
.............................................................................................
Signalbau Huber 3,280 398
.............................................................................................
Sixt 508 323
.............................................................................................
Sixt, Cv. Equity Certificates, 10.00%, 5/17/00 (Each certificate 125 87
is convertible into nonvoting preferred shares)
.............................................................................................
4,716
..............
Total Germany (Cost $6,226) 9,289
..............
GUATEMALA 0.2%
Common Stocks 0.2%
Basic Petroleum (USD) 15,229 478
.............................................................................................
Total Guatemala (Cost $171) 478
..............
HONG KONG 5.2%
Common Stocks and Warrants 5.2%
Amway Asia Pacific (USD) 23,000 966
.............................................................................................
Chaifa Holdings 1,078,612 168
.............................................................................................
China Everbright* 102,000 102
.............................................................................................
Continental Mariner Investment* 1,131,000 672
.............................................................................................
DC Finance Holdings 4,746,000 1,011
.............................................................................................
Dah Sing Financial 256,800 1,067
.............................................................................................
</TABLE>
14
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Esprit Asia 1,868,000 $ 856
.............................................................................................
Fairyoung Holdings * 620,000 262
.............................................................................................
Founder Hong Kong * 1,278,000 817
.............................................................................................
HKR International, Warrants, 6/23/00 * 725,200 487
.............................................................................................
Hon Kwok Land Investment 1,116,000 375
.............................................................................................
JCG Holdings 1,370,000 1,096
.............................................................................................
Lai Sun Development 1,344,800 1,640
.............................................................................................
Lai Sun Development, Warrants, 3/23/99 * 360,900 38
.............................................................................................
Lai Sun Hotels International, Warrants, 4/30/99 * 269,906 26
.............................................................................................
Moulin International, Warrants, 11/14/97 * 1,330,000 609
.............................................................................................
National Mutual Asia 913,000 943
.............................................................................................
Oriental Press Group 102,000 38
.............................................................................................
QPL International * 1,394,000 990
.............................................................................................
Sinocan Holdings 640,000 254
.............................................................................................
Smartone Telecommunications * 192,000 367
.............................................................................................
South China Morning Post 591,000 507
.............................................................................................
Union Bank of Hong Kong 474,800 690
.............................................................................................
Vtech Holdings 352,600 592
.............................................................................................
Wing Hang Bank 102,000 373
.............................................................................................
YGM Trading 470,000 485
.............................................................................................
Total Hong Kong (Cost $13,510) 15,431
............
HUNGARY 1.1%
Common Stocks 1.1%
Graboplast Textile 35,020 1,606
.............................................................................................
Richter Gedeon 23,550 1,780
.............................................................................................
Total Hungary (Cost $1,412) 3,386
............
INDIA 2.5%
Common Stocks 2.5%
Gujarat Ambuja Cement GDR (USD) 116,920 1,184
.............................................................................................
Hindalco GDR (USD) 21,700 705
.............................................................................................
Hindustan Lever 19,000 585
.............................................................................................
Hindustan Petroleum 39,000 455
.............................................................................................
Housing Development Finance 6,000 536
.............................................................................................
ITC GDR (USD) * 45,000 630
.............................................................................................
</TABLE>
15
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Indian Hotels GDR (USD) * 11,000 $ 261
.............................................................................................
Industrial Credit & Investment Corporation of India 232,200 378
.............................................................................................
Mahanagar Telephone 153,000 1,270
.............................................................................................
Reliance Industries GDS (USD) * 12,000 240
.............................................................................................
State Bank of India 45,000 405
.............................................................................................
Tata Engineering & Locomotive GDR (USD) 38,000 480
.............................................................................................
Tata Engineering & Locomotive GDS, New (USD) * 17,300 218
.............................................................................................
Total India (Cost $6,258) 7,347
.........
INDONESIA 0.7%
Common Stocks, Rights, and Warrants 0.7%
Bank International Indonesia * 227,858 164
.............................................................................................
Bank International Indonesia, Warrants, 1/17/00 * 45,498 15
.............................................................................................
Indofoods Sukses Makmur * 69,700 144
.............................................................................................
Indofoods Sukses Makmur, Rights, 6/4/97 * 22,340 13
.............................................................................................
Indorama Synthetic * 54,760 41
.............................................................................................
Indosat 45,000 124
.............................................................................................
Indosat (Class B) ADR (USD) 14,000 385
.............................................................................................
Telekom Indonesia (Class B) 327,000 474
.............................................................................................
Telekom Indonesia (Class B) ADS (USD) 24,800 707
.............................................................................................
Total Indonesia (Cost $1,929) 2,067
.........
IRELAND 0.6%
Common Stocks 0.6%
Kingspan Group 156,010 1,651
.............................................................................................
Total Ireland (Cost $485) 1,651
.........
ISRAEL 1.7%
Common Stocks 1.7%
Blue Square * 240,970 2,415
.............................................................................................
Elco Holdings 85,360 570
.............................................................................................
Elite Industries 35,024 895
.............................................................................................
Teva Pharmaceutical ADR (USD) 22,220 1,128
.............................................................................................
Total Israel (Cost $3,654) 5,008
.........
</TABLE>
16
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -----------------------------------------------------------------------------------
In thousands
<S> <C> <C>
ITALY 2.2%
Common Stocks 2.2%
Fila Holdings ADS (USD)* 22,246 $ 962
............................................................................
Gewiss 103,902 1,396
............................................................................
Gucci Group (USD) 22,622 1,569
............................................................................
Industria Macchine Automatiche 184,000 779
............................................................................
La Doria 262,264 696
............................................................................
Safilo 62,542 1,189
............................................................................
Total Italy (Cost $7,229) 6,591
.............
JAPAN 12.7%
Common Stocks 12.7%
Aim Services 9,000 110
............................................................................
Amway Japan 14,300 436
............................................................................
Apollo Electronics 63,000 645
............................................................................
Asatsu 10,200 289
............................................................................
Cesar 52,000 193
............................................................................
Chofu Seisakusho 34,600 545
............................................................................
Circle K Japan 22,440 1,031
............................................................................
Daibiru 49,000 540
............................................................................
Disco 20,000 438
............................................................................
FCC 42,550 1,167
............................................................................
Fanuc 6,000 205
............................................................................
Fuji Machine 48,000 1,354
............................................................................
Fujimi 5,610 296
............................................................................
Fuso Lexel 35,000 248
............................................................................
Glory 11,000 199
............................................................................
Hamada Printing Press 93,000 439
............................................................................
Higashi Nihon House 23,500 231
............................................................................
Hirose Electric 23,900 1,307
............................................................................
Homac 28,400 322
............................................................................
Horiba 50,000 469
............................................................................
Idec Izumi 27,000 198
............................................................................
Japan Airport Terminal 51,000 522
............................................................................
Japan Living Service 54,000 277
............................................................................
Juel Verite Ohkubo 55,000 314
............................................................................
</TABLE>
17
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- --------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Juken Sangyo 69,000 $ 386
.........................................................................
Juntendo 56,000 291
.........................................................................
KOA 67,000 744
.........................................................................
KTK Telecommunications Engineering 91,000 660
.........................................................................
Kanamoto 65,000 452
.........................................................................
Kansai Sekiwa Real Estate 38,000 277
.........................................................................
Karakami Kankoh 14,000 223
.........................................................................
Kawasumi Laboratories 27,000 308
.........................................................................
Keyence 13,870 1,694
.........................................................................
Kirin Beverage 49,000 668
.........................................................................
Lasertec 13,000 388
.........................................................................
Mabuchi Motor 21,200 1,074
.........................................................................
Marukyo 33,000 330
.........................................................................
Maruzen 44,000 255
.........................................................................
Masaru 23,000 132
.........................................................................
Matsumotokiyoshi 6,200 193
.........................................................................
Meitec 11,000 220
.........................................................................
Meitetsu Transport 90,000 316
.........................................................................
Mos Food Services 32,300 438
.........................................................................
Nichicon 90,000 986
.........................................................................
Nichiei 19,400 1,559
.........................................................................
Nidec 13,970 596
.........................................................................
Nippon Denwa Shisetsu 91,350 684
.........................................................................
Nippon Kagaku Yakin 18,000 81
.........................................................................
Nippon Konpo Unyu Soko 34,000 200
.........................................................................
Nishio Rent All 30,000 340
.........................................................................
Nitta 47,000 533
.........................................................................
Noritsu Koki 32,600 1,389
.........................................................................
Paltac 33,000 205
.........................................................................
Paris Miki 10,600 313
.........................................................................
Promise 20,500 848
.........................................................................
Rinnai 21,800 395
.........................................................................
Rohto Pharmaceutical* 107,000 1,020
.........................................................................
Royal Limited 33,880 491
.........................................................................
Sansei Yusoki 28,000 194
.........................................................................
Santen Pharmaceutical 69,700 1,241
.........................................................................
Seiko 30,000 411
.........................................................................
</TABLE>
18
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Shinkawa 31,000 $ 618
...................................................................................
Sintokogio 49,000 313
...................................................................................
Sodick* 58,000 512
...................................................................................
Sogo Denki 3,000 7
...................................................................................
Sokkia 37,000 202
...................................................................................
Tachihi Enterprise 9,000 218
...................................................................................
Techno Ryowa 21,000 223
...................................................................................
Toa Medical Electronics 39,000 575
...................................................................................
Toc 104,000 975
...................................................................................
Tokyo Tanabe 118,000 781
...................................................................................
Tsuchiya Home 29,000 254
...................................................................................
Ushio 35,000 411
...................................................................................
Xebio 10,500 246
...................................................................................
Zuiko 27,000 308
...................................................................................
Total Japan (Cost $48,580) 37,953
............
MALAYSIA 4.2%
Common Stocks 4.1%
Berjaya Group 753,000 888
...................................................................................
Guinness Anchor Bond 365,000 807
...................................................................................
Hong Leong Credit 73,000 378
...................................................................................
Hume Industries 68,000 363
...................................................................................
IJM 194,000 425
...................................................................................
Intiplus 903,000 1,367
...................................................................................
MNI Holdings 181,000 865
...................................................................................
MTD Capital* 392,665 1,407
...................................................................................
Malaysian Assurance Alliance 246,125 1,323
...................................................................................
Phileo Allied 279,000 555
...................................................................................
Phileo Land* 498,000 1,339
...................................................................................
RJ Reynolds 350,000 711
...................................................................................
Time Engineering 1,067,000 1,955
...................................................................................
12,383
............
Preferred Stocks 0.1%
Phileo Land, Cv. Loan Stock, 2.00%, 10/15/01 394,000 320
...................................................................................
320
............
Total Malaysia (Cost $10,789) 12,703
............
</TABLE>
19
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
MEXICO 1.3%
Common Stocks 1.3%
Apasco 51,108 $ 302
..............................................................................................
Banco Quadrum ADR (USD) * 54,210 190
..............................................................................................
Control Commercial Mexicana, Units (Each unit consists of 3
Class B shares and 1 Class C share) * 336,590 255
..............................................................................................
Corporacion Geo * 86,000 399
..............................................................................................
Gruma (Class B) * 48,000 226
..............................................................................................
Grupo Elektra 93,252 872
..............................................................................................
Grupo Financiero Inbursa (Class B) 110,000 377
..............................................................................................
Grupo Industrial Maseca (Class B) * 551,313 538
..............................................................................................
Interamericas Communications (USD) 25,000 61
..............................................................................................
Jugos de Valle (Class B) * 237,010 366
..............................................................................................
Seguros Comercial Americana (Class B) 40,300 122
..............................................................................................
Sigma Alimentos (Class B) 27,700 297
..............................................................................................
Total Mexico (Cost $3,934) 4,005
..............
NETHERLANDS 3.7%
Common Stocks 3.7%
Aalberts Industries 55,820 1,281
..............................................................................................
Ahrend Groep 42,782 2,591
..............................................................................................
Atag 18,100 913
..............................................................................................
Content Beheer 25,050 905
..............................................................................................
Getronics 42,076 1,274
..............................................................................................
Otra 110,390 1,756
..............................................................................................
Randstad Holdings * 25,100 2,255
..............................................................................................
Total Netherlands (Cost $7,900) 10,975
..............
NEW ZEALAND 1.5%
Common Stocks 1.2%
Corporate Investments * 2,159,000 1,063
..............................................................................................
Independent Newspapers 141,000 684
..............................................................................................
Sky City 251,000 1,127
..............................................................................................
Warehouse Group 253,000 633
..............................................................................................
3,507
..............
</TABLE>
20
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Preferred Stocks 0.3%
St. Lukes Group, Cv. Loan Stock, 8.70%, 4/1/99 906,000 $ 911
..............................................................................................
911
............
Total New Zealand (Cost $4,224) 4,418
............
NORWAY 1.8%
Common Stocks 1.8%
Merkantildata 107,970 1,971
..............................................................................................
Schibsted 53,510 924
..............................................................................................
Tomra Systems 129,930 2,518
..............................................................................................
Total Norway (Cost $1,946) 5,413
............
PERU 0.3%
Common Stocks 0.3%
Cementos Lima 13,915 253
..............................................................................................
Credicorp (USD) 23,880 501
..............................................................................................
Minsur (Class T) 46,303 191
..............................................................................................
Total Peru (Cost $752) 945
............
PHILIPPINES 1.9%
Common Stocks 1.7%
Ayala Land (Class B) 331,875 239
..............................................................................................
Bank of the Philippine Islands 106,000 571
..............................................................................................
First Philippine Holdings (Class B) 71,542 125
..............................................................................................
La Tondena Distillers 255,000 585
..............................................................................................
Philippine Long Distance Telephone 13,000 742
..............................................................................................
Philippine Long Distance Telephone ADS (USD) 16,000 892
..............................................................................................
Philippine National Bank * 39,875 262
..............................................................................................
San Miguel (Class B) 269,000 775
..............................................................................................
Southeast Asia Cement * 7,360,560 340
..............................................................................................
Universal Robina 1,506,000 554
..............................................................................................
William Gothong & Aboitiz * 1,305,500 118
..............................................................................................
5,203
............
Convertible Bonds 0.2%
Benpres Holdings, 4.20%, 11/26/49 USD 253,300 532
..............................................................................................
532
............
Total Philippines (Cost $7,094) 5,735
............
</TABLE>
21
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
POLAND 1.2%
Common Stocks 1.2%
Bank Rozwoju Eksportu * 36,190 $ 864
..............................................................................
Bank Slaski 12,520 1,063
..............................................................................
Gorazdze 43,199 1,448
..............................................................................
International UNP Holdings (CAD) * 1,679,372 198
..............................................................................
Total Poland (Cost $4,069) 3,573
............
PORTUGAL 0.4%
Common Stocks 0.3%
Sempa 45,470 973
..............................................................................
973
............
Preferred Stocks 0.1%
Lusomundo 41,610 309
..............................................................................
309
............
Total Portugal (Cost $806) 1,282
............
RUSSIA 1.2%
Common Stocks 1.2%
Lukoil ADR (USD) 34,000 1,904
..............................................................................
PLD Telekom (USD) * 107,714 572
..............................................................................
Petersburg Long Distance (CAD) * 35,000 187
..............................................................................
Rao Gazprom ADS (USD) * 42,500 663
..............................................................................
Star Mining (AUD) 2,750,000 107
..............................................................................
Total Russia (Cost $3,254) 3,433
............
SINGAPORE 1.0%
Common Stocks and Warrants 1.0%
Bukit Sembawang Estates 19,000 391
..............................................................................
Clipsal (USD) 210,000 823
..............................................................................
MCL Land 215,000 327
..............................................................................
Republic Hotels & Resorts 150,000 166
..............................................................................
Republic Hotels & Resorts, Warrants, 7/12/00 * 147,000 71
..............................................................................
Venture Manufacturing 345,500 978
..............................................................................
Wing Tai Holdings 135,000 349
..............................................................................
Total Singapore (Cost $2,591) 3,105
............
</TABLE>
22
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
SOUTH AFRICA 1.6%
Common Stocks 1.6%
Anglo America Industrial 6,750 $ 294
..............................................................................
Barlow Limited 106,900 1,178
..............................................................................
Iscor 243,200 168
..............................................................................
Murray & Roberts Holdings 66,000 206
..............................................................................
Rembrandt Group 123,800 1,303
..............................................................................
Sasol 53,800 690
..............................................................................
South African Breweries ADR (USD) 29,400 856
..............................................................................
Speciality Stores (Class N) 96,000 66
..............................................................................
Total South Africa (Cost $4,094) 4,761
............
SOUTH KOREA 0.2%
Common Stocks 0.2%
LG Information & Communications 5,369 530
..............................................................................
Total South Korea (Cost $385) 530
............
SPAIN 2.1%
Common Stocks 2.1%
Azkoyen 22,060 3,304
..............................................................................
Prosegur Seguridad 286,880 3,110
..............................................................................
Total Spain (Cost $2,999) 6,414
............
SWEDEN 2.9%
Common Stocks and Warrants 2.9%
Assa-Abloy (Class B) 93,087 1,822
..............................................................................
BPA (Class A) * 418,920 1,095
..............................................................................
BPA (Class B), Warrants, 12/15/00 * 164,400 178
..............................................................................
Finnveden (Class B) 78,637 1,393
..............................................................................
Hoganas (Class B) 21,950 658
..............................................................................
Mandator (Class B) * 54,130 662
..............................................................................
Medical Invest Svenska (Class B) * 32,730 1,064
..............................................................................
Securitas (Class B) 77,280 1,862
..............................................................................
Total Sweden (Cost $6,271) 8,734
............
</TABLE>
23
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
SWITZERLAND 3.6%
Common Stocks 3.6%
Belimo Automation * 4,750 $ 1,102
..............................................................................
Bucher Holding 820 759
..............................................................................
Disetronic Holdings * 743 1,630
..............................................................................
Generale d'Affichage 4,160 1,496
..............................................................................
Gurit Heberlien 420 1,076
..............................................................................
Liechtenstein Global Trust 2,015 1,107
..............................................................................
SMH Neuenburg 2,512 1,423
..............................................................................
Swisslog * 6,126 2,257
..............................................................................
Total Switzerland (Cost $9,794) 10,850
............
TAIWAN 3.0%
Common Stocks 3.0%
Bank Sino Pacific * 1,071,520 1,065
..............................................................................
Chayang Sheng Dyei * 325,000 465
..............................................................................
China Steel 358,000 383
..............................................................................
Compeq Manufacturing 122,000 869
..............................................................................
Delpha Construction * 327,000 499
..............................................................................
Hung Poo Construction * 204,000 550
..............................................................................
Lite-On Technology 217,000 651
..............................................................................
Macronix International * 218,000 426
..............................................................................
Taishin International Bank * 947,860 1,028
..............................................................................
Tong Lung Metal * 307,000 524
..............................................................................
United World Chinese * 239,750 615
..............................................................................
Yageo * 365,200 1,287
..............................................................................
Yieh Phui Enterprise * 369,000 539
..............................................................................
Total Taiwan (Cost $7,471) 8,901
............
THAILAND 0.2%
Common Stocks 0.2%
PTT Exploration & Production * 56,000 716
..............................................................................
Total Thailand (Cost $700) 716
............
</TABLE>
24
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- -------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
UNITED KINGDOM 16.2%
Common Stocks 15.9%
Ashtead Group 627,998 $ 2,830
..............................................................................
BBA Group 271,037 1,472
..............................................................................
Bodycote International 67,043 793
..............................................................................
Britton Group * 391,256 647
..............................................................................
CRT Group * 637,422 2,376
..............................................................................
Carpetright 148,000 1,135
..............................................................................
Chamberlain Phipps * 134,000 ..
..............................................................................
Cordiant * 331,000 692
..............................................................................
Corporate Services Group 1,036,250 3,124
..............................................................................
Devro International 411,500 2,087
..............................................................................
Druck Holdings 202,900 855
..............................................................................
First Technology 151,500 1,692
..............................................................................
Freepages Group * 1,456,412 944
..............................................................................
Greggs 66,000 1,840
..............................................................................
HTV Group 348,000 1,737
..............................................................................
Harvey Nichols Group 225,000 1,130
..............................................................................
Henderson 39,500 823
..............................................................................
Hozelock Group 166,679 1,175
..............................................................................
JBA Holdings 320,500 4,233
..............................................................................
Knox D'Arcy Trust * 1,139,889 619
..............................................................................
Mayflower 1,065,000 2,572
..............................................................................
N Brown Group 98,340 658
..............................................................................
Pentos * 733,333 ..
..............................................................................
Peter Black Holdings 127,000 737
..............................................................................
Pizza Express 163,000 1,825
..............................................................................
Powerscreen International 229,000 2,257
..............................................................................
Rage Software * 2,425,000 305
..............................................................................
Regal Hotel Group 1,487,422 1,350
..............................................................................
Sage Group 196,000 2,046
..............................................................................
Select Appointment 235,290 1,380
..............................................................................
Serco Group 209,000 2,270
..............................................................................
Stoves 117,000 531
..............................................................................
WPP Group 412,000 1,676
..............................................................................
47,811
............
</TABLE>
25
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/Par Value
- ----------------------------------------------------------------------------------------------------
In thousands
<S> <C> <C>
Preferred Stocks 0.3%
Knox D'Arcy Trust, Cv. Loan Stock, Zero Coupon, 9/30/07 * 638,889 $ 352
.............................................................................................
Regal Hotel Group, Cv. Loan Stock, 8.00%, 6/30/01 264,505 527
.............................................................................................
879
............
Total United Kingdom (Cost $31,167) 48,690
............
VENEZUELA 0.3%
Common Stocks 0.3%
Compania Anonima Nacional Telefonos de
Venezuela (Class D) ADR (USD)* 15,216 456
.............................................................................................
Mavesa ADS (USD) 72,099 496
.............................................................................................
Total Venezuela (Cost $672) 952
............
VIETNAM 0.3%
Common Stocks 0.3%
Lazard Vietnam Fund Limited (USD)* 106,600 959
.............................................................................................
Total Vietnam (Cost $1,098) 959
............
SHORT-TERM INVESTMENTS 5.7%
Commercial Paper 4.0%
Falcon Asset Securitization, 4(2), 5.55%, 6/3/97 $5,000,000 4,975
.............................................................................................
Investments in Commercial Paper through a Joint Account,
5.60%, 5/1/97 7,243,030 7,243
.............................................................................................
12,218
............
Other 1.7%
United States National Bank Oregon, CD, 5.53%, 5/19/97 5,000,000 5,000
.............................................................................................
5,000
............
Total Short-Term Investments (Cost $17,218) 17,218
............
</TABLE>
26
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
- ----------------------------------------------------------------------------------------------
In thousands
<S> <C>
Total Investments in Securities
98.5% of Net Assets (Cost $254,874) $ 295,227
Other Assets Less Liabilities 4,584
...............
NET ASSETS $ 299,811
---------------
Net Assets Consist of:
Accumulated net investment income - net of distributions $ (118)
Accumulated net realized gain/loss - net of distributions (21,557)
Net unrealized gain (loss) 40,292
Paid-in-capital applicable to 18,349,351 shares of $0.01 par
value capital stock outstanding; 2,000,000,000 shares of
the Corporation authorized 281,194
...............
NET ASSETS $ 299,811
---------------
NET ASSET VALUE PER SHARE $ 16.34
---------------
</TABLE>
* Non-income producing
4(2) Commercial paper sold within terms of a
private placement memorandum, exempt
from registration under section 4.2 of the
Securities Act of 1933, as amended, and
may be sold only to dealers in that program
or other "accredited investors."
AUD Australian dollar
CAD Canadian dollar
CD Certificate of Deposit
HKD Hong Kong dollar
USD U.S. dollar
The accompanying notes are an integral part of these financial statements.
27
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Unaudited
- -------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
6 Months
Ended
4/30/97
<S> <C>
Investment Income
Income
Dividend (net of foreign taxes of $214) $ 1,870
Interest 405
.........
Total income 2,275
.........
Expenses
Investment management 1,701
Shareholder servicing 348
Custody and accounting 121
Prospectus and shareholder reports 21
Registration 11
Legal and audit 4
Directors 4
.........
Total expenses 2,210
.........
Net investment income 65
.........
Realized and Unrealized Gain (Loss)
Net realized gain (loss)
Securities (2,594)
Foreign currency transactions (304)
.........
Net realized gain (loss) (2,898)
.........
Change in net unrealized gain or loss
Securities 13,121
Other assets and liabilities
denominated in foreign currencies (1)
.........
Change in net unrealized gain or loss 13,120
.........
Net realized and unrealized gain (loss) 10,222
.........
INCREASE (DECREASE) IN NET
ASSETS FROM OPERATIONS $10,287
.........
</TABLE>
The accompanying notes are an integral part of these financial statements.
28
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- -------------------------------------------------------------------------------
Unaudited
- ------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
In thousands
<TABLE>
<CAPTION>
6 Months Year
Ended Ended
4/30/97 10/31/96
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations
Net investment income $ 65 $ 1,305
Net realized gain (loss) (2,898) (8,158)
Change in net unrealized gain or loss 13,120 40,947
..........................
Increase (decrease) in net assets from operations 10,287 34,094
..........................
Distributions to shareholders
Net investment income (1,386) (2,150)
Net realized gain (1,189) (429)
..........................
Decrease in net assets from distributions (2,575) (2,579)
..........................
Capital share transactions *
Shares sold 16,530 63,094
Distributions reinvested 2,389 2,296
Shares redeemed (52,507) (96,750)
Redemption fees received 48 110
..........................
Increase (decrease) in net assets from capital
share transactions (33,540) (31,250)
..........................
Net Assets
Increase (decrease) during period (25,828) 265
Beginning of period 325,639 325,374
..........................
End of period $299,811 $325,639
..........................
* Share information
Shares sold 1,009 4,036
Distributions reinvested 149 161
Shares redeemed (3,200) (6,350)
..........................
Increase (decrease) in shares outstanding (2,042) (2,153)
</TABLE>
The accompanying notes are an integral part of these financial statements.
29
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
Unaudited April 30, 1997
- -------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
T. Rowe Price International Funds, Inc. (the corporation) is registered
under the Investment Company Act of 1940. The International Discovery Fund
(the fund), a diversified, open-end management investment company, is one
of the portfolios established by the corporation and commenced operations
on December 30, 1988.
Valuation Equity securities are valued at the last quoted sales price at
the time the valuations are made. A security which 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.
Debt securities are generally traded in the over-the-counter market and are
valued at a price deemed best to reflect fair value as quoted by dealers
who make markets in these securities or by an independent pricing service.
Short-term debt securities are valued at amortized cost which approximates
fair value.
For purposes of determining the fund's net asset value per share, the U.S.
dollar value of all assets and liabilities initially expressed in foreign
currencies is determined by using the mean of the bid and offer prices of
such currencies against U.S. dollars quoted by a major bank.
Assets and liabilities 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.
Currency Translation Assets and liabilities are translated into U.S.
dollars at the prevailing exchange rate at the end of the reporting period.
Purchases and sales of securities and income and expenses are translated
into U.S. dollars at the prevailing exchange rate on the dates of such
transactions. The effect of changes in foreign 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. Income and capital gain distributions are determined in accordance
with federal income tax regulations and may differ from those determined in
accordance with generally accepted accounting principles.
30
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
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, 1997, the fund held investments 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.
Commercial Paper Joint Account The fund, and other affiliated funds, may
transfer uninvested cash into a commercial paper joint account, the daily
aggregate balance of which is invested in high-grade commercial paper. All
securities purchased by the joint account satisfy the fund's criteria as to
quality, yield, and liquidity.
Securities Lending The fund lends its securities to approved brokers to
earn additional income and takes cash and U.S. Treasury securities as
collateral to secure the loans. Collateral is maintained at not less than
100% of the value of loaned securities. At April 30, 1997, the value of
securities on loan was $13,793,000. Although the risk is mitigated by the
collateral, the fund could experience a delay in recovering its securities
and a possible loss of income or value if the borrower fails to return
them.
Other Purchases and sales of portfolio securities, other than short-term
securities, aggregated $96,952,000 and $133,167,000, respectively, for the
six months ended April 30, 1997.
NOTE 3 - FEDERAL INCOME TAXES
No provision for federal income taxes is required since the fund intends to
continue to qualify as a regulated investment company and distribute all of
its taxable income. The fund has unused realized capital loss carryforwards
for federal income tax purposes of $17,366,000, of which $8,323,000 expires
in 2003 and $9,043,000 in 2004. The fund intends to retain gains realized
in future periods that may be offset by available capital loss
carryforwards.
At April 30, 1997, the aggregate cost of investments for federal income tax
and financial reporting purposes was $254,874,000, and net unrealized gain
aggre-
31
<PAGE>
T. ROWE PRICE INTERNATIONAL DISCOVERY FUND
- --------------------------------------------------------------------------------
gated $40,353,000, of which $66,486,000 related to appreciated investments
and $26,133,000 to depreciated investments.
NOTE 4 - RELATED PARTY TRANSACTIONS
The fund is managed by Rowe Price-Fleming International, Inc. (the
manager), which is owned by T. Rowe Price Associates, Inc. (Price
Associates), Robert Fleming Holdings Limited, and Jardine Fleming Holdings
Limited under a joint venture agreement.
The investment management agreement between the fund and the manager
provides for an annual investment management fee, of which $266,000 was
payable at April 30, 1997. The fee is computed daily and paid monthly, and
consists of an individual fund fee equal to 0.75% of average daily net
assets and a group fee. The group fee is based on the combined assets of
certain mutual funds sponsored by the manager or Price Associates (the
group). The group fee rate ranges from 0.48% for the first $1 billion of
assets to 0.30% for assets in excess of $80 billion. At April 30, 1997, and
for the six months then ended, the effective annual group fee rate was
0.33%. The fund pays a pro-rata share of the group fee based on the ratio
of its net assets to those of the group.
In addition, the fund has entered into agreements with Price Associates and
two wholly owned subsidiaries of Price Associates, pursuant to which the
fund receives certain other services. Price Associates computes the daily
share price and maintains the financial records of the fund. T. Rowe Price
Services, Inc., is the fund's transfer and dividend disbursing agent and
provides shareholder and administrative services to the fund. T. Rowe Price
Retirement Plan Services, Inc., provides subaccounting and recordkeeping
services for certain retirement accounts invested in the fund. The fund
incurred expenses pursuant to these related party agreements totaling
approximately $341,000 for the six months ended April 30, 1997, of which
$80,000 was payable at period-end.
During the six months ended April 30, 1997, the fund, in the ordinary
course of business, placed security purchase and sale orders aggregating
$25,380,000 with certain affiliates of the manager and paid commissions of
$107,000 related thereto.
32
<PAGE>
T. ROWE PRICE SHAREHOLDER SERVICES
- --------------------------------------------------------------------------------
INVESTMENT SERVICES AND INFORMATION
KNOWLEDGEABLE SERVICE REPRESENTATIVES
By Phone 1-800-225-5132 Available Monday through Friday from
8 a.m. to 10 p.m. ET and weekends from 8:30 a.m. to 5 p.m. ET.
In Person Available in T. Rowe Price Investor Centers.
ACCOUNT SERVICES
Checking Available on most fixed income funds ($500 minimum).
Automatic Investing From your bank account or paycheck.
Automatic Withdrawal Scheduled, automatic redemptions.
Distribution Options Reinvest all, some, or none of your
distributions.
Automated 24-Hour Services Including Tele*Access(R) and
T. Rowe Price OnLine.
DISCOUNT BROKERAGE*
Individual Investments Stocks, bonds, options, precious metals, and
other securities at a savings over regular commission rates.
INVESTMENT INFORMATION
Combined Statement Overview of your T. Rowe Price accounts.
Shareholder Reports Fund managers' reviews of their strategies and
results.
T. Rowe Price Report Quarterly investment newsletter discussing
markets and financial strategies.
Performance Update Quarterly review of all T. Rowe Price fund
results.
Insights Educational reports on investment strategies and financial
markets.
Investment Guides Asset Mix Worksheet, College Planning Kit,
Diversifying Overseas: A Guide to International Investing, Personal
Strategy Planner, Retirees Financial Guide, and Retirement Planning
Kit.
*A division of T. Rowe Price Investment Services, Inc. Member
NASD/SIPC.
33
<PAGE>
For yield, price, last transaction, current balance, or to conduct transactions,
24 hours, 7 days a week, call Tele*Access(R): 1-800-638-2587 toll free
For assistance with your existing fund account, call:
Shareholder Service Center
1-800-225-5132 toll free
410-625-6500 Baltimore area
To open a Discount Brokerage
account or obtain information,
call: 1-800-638-5660 toll free
Internet address:
www.troweprice.com
T. Rowe Price Associates
100 East Pratt Street
Baltimore, Maryland 21202
This report is authorized for
distribution only to shareholders
and to others who have received
a copy of the prospectus of the
T. Rowe Price International Discovery Fund.
Investor Centers:
101 East Lombard St.
Baltimore, MD 21202
T. Rowe Price
Financial Center
10090 Red Run Blvd.
Owings Mills, MD 21117
Farragut Square
900 17th Street, N.W.
Washington, D.C. 20006
ARCO Tower
31st Floor
515 South Flower St.
Los Angeles, CA 90071
4200 West Cypress St.
10th Floor
Tampa, FL 33607
[LOGO OF T. ROWE PRICE APPEARS HERE]
T. Rowe Price Investment Services, Inc., Distributor.