<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
ANNUAL REPORT
Year Ended November 30, 1996
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
ANNUAL REPORT
Table of Contents
Page
Schedule of Investments................................................... 1
Statement of Assets and Liabilities....................................... 13
Statement of Operations................................................... 14
Statements of Changes in Net Assets....................................... 15
Financial Highlights...................................................... 16
Notes to Financial Statements............................................. 17
Report of Independent Accountants......................................... 20
Description of the Fund's Dividend Reinvestment Plan...................... 21
This report is submitted for the information of the Fund's shareholders. It is
not authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
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<S> <C> <C>
BRAZIL -- (13.8%)
COMMON STOCKS -- (4.5%)
*Banco do Estado de Sao Paulo SA .............. 6,300,000 $ 36,596
Embraco SA ................................... 342,000 185,420
Lojas Americanas SA .......................... 6,762,000 88,379
*Mannesmann SA ................................ 378,000 53,825
Souza Cruz Industria e Comercio .............. 180,016 1,026,523
Telecomunicacoes Brasileiras SA .............. 82,869,000 5,359,327
VSMA (Cia Vidraria Santa Marina) ............. 121,000 386,581
White Martins SA ............................. 550,256,498 804,422
------------
TOTAL COMMON STOCKS (Cost $3,758,776) .......... 7,941,073
------------
PREFERRED STOCK -- (9.3%)
Aracruz Celulose SA Series B ................. 1,265,999 2,034,619
Banco Bradesco SA ............................ 155,246,374 1,134,776
Banco Itau SA ................................ 3,312,000 1,298,635
Banco do Brasil SA ........................... 56,145,862 483,782
*Banco do Estado de Sao Paulo SA .............. 14,980,000 86,872
Belgo Mineira ................................ 2,181,754 141,521
Brasmotor SA ................................. 2,015,570 569,781
*COFAP (Cia Fabricadora De Pecas) ............. 14,250 116,577
Cervejaria Brahma ............................ 4,049,480 2,395,423
Duratex SA ................................... 4,510,000 179,064
Ericsson Telecomunicacoes SA ................. 20,194,770 314,193
IKPC Industrias Klabin de Papel e Celulose SA 418,531 401,148
Investimentos Itau SA ........................ 1,088,000 811,076
Lojas Americanas SA .......................... 4,324,460 61,126
Multibras Eletrodomesticos SA ................ 427,145 562,414
*Paranapanema SA .............................. 9,588,000 88,185
Sadia Concordia SA ........................... 308,282 232,801
Telecomunicacoes Brasileiras SA .............. 1,889,166 143,027
USIMINAS (Usinas Siderurgicas de Minas Gerais
SA) ......................................... 419,254,000 418,077
Vale do Rio Doce ............................. 239,144 5,024,131
------------
TOTAL PREFERRED STOCK (Cost $8,168,083) ........ 16,497,228
------------
RIGHTS/WARRANTS -- (0.0%)
*Banco do Brasil SA Warrants Series A 06/30/01 11,229,172 18,482
*Banco do Brasil SA Warrants Series B 06/30/06 16,843,758 25,276
</TABLE>
1
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DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
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Shares Value+
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<S> <C> <C>
*Banco do Brasil SA Warrants Series C 06/30/11 28,072,931 $ 42,127
------------
TOTAL RIGHTS/WARRANTS (Cost $0) ............... 85,885
------------
TOTAL -- BRAZIL (Cost $11,926,859) ............ 24,524,186
------------
CHILE -- (11.1%)
COMMON STOCKS -- (10.6%)
Banco de Credito e Inversiones SA Series A .. 53,304 364,905
Banmedica SA ................................ 347,000 120,423
CAP SA (Compania de Aceros del Pacifico) .... 100,000 225,814
CIT Cia Tecno Industrial SA ................. 4,900,000 117,754
COPEC (Cia de Petroleos de Chile) ........... 757,488 2,890,050
Cervecerias Unidas SA ....................... 143,000 533,658
Chilectra Generacion SA ..................... 138,000 728,215
Chilectra SA ................................ 225,611 1,179,806
Cia de Consumidores de Gas de Santiago SA ... 103,000 470,074
Compania Manufacturera de Papeles y Cartones
SA .......................................... 117,150 1,372,830
Compania de Sud Americana de Vapores SA ..... 410,000 268,006
Compania de Telecomunicaciones de Chile SA
Series A .................................... 200,000 1,112,432
Compania de Telecomunicaciones de Chile SA
Series B .................................... 352,166 1,824,868
Empresa Nacional de Electricidad SA ......... 4,536,900 2,476,045
Empresa Nacional de Telecomunicaciones SA ... 49,000 419,301
Enersis SA .................................. 3,895,960 2,148,566
Forestal Terranova SA ....................... 147,795 163,358
Industrias Forestales Inforsa SA ............ 1,057,365 168,394
Invercap SA ................................. 100,000 68,937
Laboratorio Chile SA ........................ 271,069 231,958
Madeco Manufacturera de Cobre SA ............ 231,227 528,189
Maderas y Sinteticos SA ..................... 357,062 157,864
Minera Mantos Blancos SA .................... 102,255 179,864
Sociedad Industrial Pizarreno SA ............ 63,000 119,052
Sociedad Quimica y Minera de Chile SA
Series A .................................... 36,000 173,710
Sociedad Quimica y Minera de Chile SA
Series B .................................... 77,090 402,198
Vina Sta Carolina SA ........................ 41,411 35,928
Vina Sta Carolina SA Series A ............... 163,489 136,014
Vina de Concha y Toro SA .................... 350,000 158,070
------------
TOTAL COMMON STOCKS (Cost $13,709,781) ........ 18,776,283
------------
</TABLE>
2
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DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
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Shares Value+
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<S> <C> <C>
INVESTMENT IN CURRENCY -- (0.5%)
*Chilean Pesos (Cost $918,959) ............. $ 893,433
------------
TOTAL -- CHILE (Cost $14,628,740) ........... 19,669,716
------------
MALAYSIA -- (10.6%)
COMMON STOCKS -- (10.6%)
AMMB Holdings Berhad ...................... 62,000 486,322
AMMB Holdings Berhad 7.5% Unsecured Loan
Stock 1999 ................................. 31,000 22,018
Amsteel Corp. Berhad ...................... 198,000 142,174
Aokam Perdana Berhad ...................... 32,000 40,960
Asiatic Development Berhad ................ 117,000 102,275
Berjaya Leisure Berhad .................... 74,000 91,832
Berjaya Singer Berhad ..................... 32,400 38,943
Commerce Asset Holding Berhad ............. 38,000 286,205
DCB Holdings Berhad ....................... 123,000 415,200
Edaran Otomobil Nasional Berhad ........... 35,000 340,098
Ekran Berhad .............................. 42,000 178,654
Genting Berhad ............................ 112,500 790,244
Golden Hope Plantations Berhad ............ 159,000 273,015
Guiness Anchor Berhad ..................... 35,000 84,683
Highlands and Lowlands Berhad ............. 99,000 168,445
Hong Leong Credit Berhad .................. 56,499 343,955
Hong Leong Industries Berhad .............. 32,200 108,066
Hume Industries (Malaysia) Berhad ......... 57,000 367,024
Kamunting Corp. Berhad .................... 127,000 93,670
Kedah Cement Holdings Berhad .............. 41,000 76,800
Kuala Lumpur Kepong Berhad ................ 117,000 278,517
Leader Universal Holdings Berhad .......... 68,333 151,999
Lion Land Berhad .......................... 12,375 12,218
Magnum Corp. Berhad ....................... 240,000 468,293
Malayan Banking Berhad .................... 187,000 1,824,390
Malayan Cement Berhad ..................... 54,000 124,332
Malayan United Industries Berhad .......... 208,000 153,413
Malaysia Mining Corp. Berhad .............. 106,000 119,546
Malaysian Airlines System ................. 114,000 291,395
Malaysian Oxygen Berhad ................... 23,000 115,785
Nestle (Malaysia) Berhad .................. 38,000 293,620
New Straits Times Press (Malaysia) Berhad . 32,000 178,576
Nylex (Malaysia) Berhad ................... 25,500 57,220
Oriental Holdings Berhad .................. 33,600 233,397
Perusahaan Otomobil Nasional Berhad ....... 81,000 505,756
RJ Reynolds Berhad ........................ 43,000 113,268
</TABLE>
3
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DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
----------- ------------
<S> <C> <C>
Resorts World Berhad ........................ 174,000 $ 862,361
Rothmans of Pall Mall Malaysia Berhad ....... 46,000 475,707
Shell Refining Co. Federation of Malaysia
Berhad ...................................... 48,000 140,488
Sime Darby Berhad (Malaysia) ................ 355,980 1,312,785
Sime UEP Properties Berhad .................. 66,000 164,839
Tan Chong Motor Holdings Berhad ............. 110,000 194,029
Telekom Malaysia Berhad ..................... 325,000 2,917,073
Tenaga Nasional Berhad ...................... 502,000 2,252,878
UMW Holdings Berhad ......................... 39,666 185,753
United Engineering (Malaysia) Berhad ........ 87,000 777,483
------------
TOTAL COMMON STOCKS (Cost $10,730,418) ........ 18,655,704
------------
RIGHTS/WARRANTS -- (0.0%)
*Hong Leong Industries Berhad Rights 12/17/96 4,600 4,667
*Hong Leong Industries Berhad Special Rights
12/17/96 .................................... 5,750 0
------------
TOTAL RIGHTS/WARRANTS (Cost $0) ............... 4,667
------------
TOTAL -- MALAYSIA (Cost $10,730,418) .......... 18,660,371
------------
INDONESIA -- (10.3%)
COMMON STOCKS -- (10.3%)
PT Argo Pantes (Foreign) .................... 135,625 99,809
PT Astra International (Foreign) ............ 1,094,400 2,754,676
PT Berlian Laju Tanker (Foreign) ............ 166,000 281,506
PT Branta Mulia (Foreign) ................... 63,000 38,972
*PT Charoen Pokphand Indonesia (Foreign) ..... 84,000 95,862
PT Dankos Laboratories (Foreign) ............ 94,500 70,552
PT Gadjah Tunggal (Foreign) ................. 744,000 317,406
PT Hanjaya Mandala Sampoerna (Foreign) ...... 910,000 4,639,292
PT Hero Supermarket (Foreign) ............... 220,000 161,903
PT Indah Kiat Pulp & Paper Corp. (Foreign) .. 2,512,731 1,822,373
PT Indocement Tunggal Prakarsa (Foreign) .... 166,000 267,341
PT Indorama Synthetics ...................... 386,620 692,749
PT Inti Indorayon Utama (Foreign) ........... 411,500 311,609
PT Jakarta International Hotel and
Development (Foreign) ........................ 1,590,000 1,068,366
PT Japfa Comfeed Indonesia (Foreign) ........ 124,000 87,287
PT Kabelmetal Indonesia (Foreign) ........... 90,000 38,396
PT Kalbe Farma .............................. 409,600 480,546
</TABLE>
4
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DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
------------ ------------
<S> <C> <C>
PT Lippo Land Development ................... 193,200 $ 428,601
PT Mayora Indah (Foreign) ................... 577,572 264,885
PT Modern Photo Film Co. (Foreign) .......... 125,000 313,300
PT Pakuwon Jati (Foreign) ................... 396,000 143,601
PT Panasia Indosyntec (Foreign) ............. 403,200 98,908
PT Polysindo Eka Perkasa (Foreign) .......... 2,064,000 1,100,683
PT Semen Cibinong (Foreign) ................. 106,200 271,843
PT Semen Gresik (Foreign) ................... 600,000 1,830,205
PT Summarecon Agung (Foreign) ............... 251,056 77,652
PT Surya Toto Indonesia (Foreign) ........... 46,400 94,027
PT Tigaraksa Satria (Foreign) ............... 68,400 107,969
PT Unggul Indah Corp. (Foreign) ............. 146,298 168,517
------------
TOTAL -- INDONESIA (Cost $12,403,560) ......... 18,128,836
------------
TURKEY -- (10.1%)
COMMON STOCKS -- (10.1%)
Akbank ...................................... 15,735,000 1,768,842
*Akcansa Cimento Sanayi ve Ticaret SA ........ 1,930,935 173,652
Aksa ........................................ 3,707,809 507,423
Alarko Holding .............................. 996,171 163,107
Arcelik A.S. ................................ 8,345,530 783,158
Aygaz ....................................... 3,104,640 417,290
Bekoteknik Sanayi A.S. ...................... 1,999,920 172,036
Brisa Bridgestone Sanbanci Lastik San & Tic
A.S. ........................................ 1,323,000 581,965
CIMSA A.S. (Cimento Sanayi ve Ticaret) ...... 1,560,000 128,094
Cimentas A.S. ............................... 674,072 75,775
Cukurova Elektrik A.S. ...................... 559,000 560,093
Dogan Sirketler Grubu Holdings A.S. ......... 8,305,500 154,257
Doktas ...................................... 480,000 40,821
*EGE Biracilik ve Malt Sanayii A.S. .......... 1,775,140 459,836
*Eczacibasi Ilac ............................. 3,781,620 195,920
Erciyas Biracilik ........................... 3,970,560 465,755
Eregli Demir ve Celik Fabrikalari Turk A.S. . 7,837,500 1,110,887
Good Year Lastikleri A.S. ................... 661,500 294,216
Guney Biracilik ............................. 837,375 61,391
Hurriyet Gazette ............................ 2,194,000 111,523
*Izmir Demir Celik ........................... 9,222,807 73,927
Koc Holding A.S. ............................ 6,212,843 1,275,363
Migros Turk A.S. ............................ 599,400 585,924
Netas Northern Electric Telekomunikasyon A.S. 1,292,000 274,692
Otosan Otomobil A.S. ........................ 1,644,000 674,956
Tat Konserve ................................ 999,999 144,184
Tofas Turk Otomobil Fabrikasi A.S. .......... 9,332,750 346,671
</TABLE>
5
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
------------ ------------
<S> <C> <C>
Trakya Cam Sanayii A.S. ....................... 9,692,296 $ 521,091
Turcas Petrolculuk A.S. ....................... 2,233,081 161,533
Turk Demir Dokum .............................. 2,789,983 226,362
Turk Siemens Kablo ve Elektrik Sanayi A.S. .... 504,000 121,935
*Turk Sise Cam ................................. 6,957,418 782,114
Turkiye Garanti Bankasi A.S. .................. 20,000,431 1,016,640
Turkiye Is Bankasi A.S. Series C .............. 10,840,000 1,960,312
USAS (Ucak Servisi A.S.) ...................... 50,000 112,414
Yapi ve Kredi Bankasi A.S. .................... 49,496,546 1,257,977
------------
TOTAL -- TURKEY (Cost $13,744,166) .............. 17,762,136
------------
ARGENTINA -- (10.0%)
COMMON STOCKS -- (10.0%)
*Acindar Industria Argentina de Aceros SA
Series A ...................................... 161,067 209,477
*Alpargatas SA Industrial y Comercial .......... 275,000 210,466
Astra Cia Argentina de Petroleos SA ........... 430,550 801,168
Bagley y Cia, Ltd. SA Series B ................ 121,090 260,455
Banco Frances del Rio de la Plata SA .......... 118,374 1,178,328
Banco de Galicia y Buenos Aires SA Series A ... 226,117 1,237,390
Buenos Aires Embotelladora SA Series B ........ 250 65,028
*CIADEA SA ..................................... 112,431 491,536
*Celulosa Argentina SA Series B ................ 173,500 47,907
*Corcemar Corporacion Cementera Argentina SA
Series B ...................................... 34,805 165,395
*Indupa SA Industrial y Comercial .............. 438,400 239,469
*Industrias Petroq Koppers ..................... 25,800 100,663
Irsa Inversiones y Representaciones SA ........ 88,477 273,512
Juan Minetti SA ............................... 32,520 115,496
Ledesma SA .................................... 190,500 234,416
Molinos Rio de la Plata SA Series B ........... 178,214 593,708
Naviera Perez Companc SA Series B ............. 488,024 3,349,284
Nobleza-Piccardo Sdad Industrial Comercial y
Financiera Pica ............................... 44,200 183,509
*Sevel Argentina SA Series C ................... 92,476 245,166
*Siderar SAIC Series A ......................... 31,416 85,803
Siderca SA Series A ........................... 785,410 1,300,413
*Sociedad Comercial del Plata .................. 145,060 357,001
Telecom Argentina Stet-France SA Series B ..... 718,800 2,833,290
Telefonica de Argentina SA Series B ........... 1,183,000 3,047,534
------------
TOTAL -- ARGENTINA (Cost $13,101,386) ........... 17,626,414
------------
</TABLE>
6
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DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
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<S> <C> <C>
MEXICO -- (9.2%)
COMMON STOCKS -- (9.2%)
Apasco S.A. de C.V. .............................. 48,000 $ 318,864
CEMEX (Cementos de Mexico S.A. de C.V.) Series B . 358,000 1,295,754
*COMERCI (Controladora Comercial Mexicana S.A. de
C.V.) Series B ................................... 279,000 268,813
*Carso Global Telecom S.A. de C.V. Telecom
Series A1 ........................................ 271,000 625,279
Cementos de Mexico SA de C.V. Series A ........... 13,500 44,840
*Cifra S.A. de C.V. Series C ...................... 1,083,000 1,488,302
El Puerto de Liverpool S.A. Series 1 ............. 20,000 15,365
El Puerto de Liverpool S.A. Series C1 ............ 328,600 254,115
*Empresas ICA Sociedad Controladora S.A. de C.V. .. 56,000 795,842
Empresas la Moderna S.A. de C.V. Series A ........ 184,885 859,031
Fomento Economico Mexicano S.A. de C.V. Series B . 244,000 832,099
Grupo Carso S.A. de C.V. Series A-1 .............. 271,000 1,377,675
*Grupo Financiero Banamex Accival S.A. de C.V.
Series B ......................................... 456,000 899,513
*Grupo Financiero Banamex Accival S.A. de C.V.
Series L ......................................... 42,607 77,349
*Grupo Financiero Bancomer S.A. de C.V. Series B .. 790,000 317,482
*Grupo Financiero Bancomer S.A. de C.V. Series L .. 29,259 9,607
*Grupo Financiero GBM Atlantico S.A. de C.V. ...... 980 646
*Grupo Financiero GBM Atlantico S.A. de C.V.
Series B ......................................... 149,000 98,225
Grupo Financiero Inbursa S.A. de C.V. Series B ... 9,455 30,086
*Grupo Financiero Invermexico S.A. de C.V. Series B 454,792 39,206
*Grupo Financiero Invermexico S.A. de C.V. Series L 12,600 1,070
*Grupo Financiero Serfin S.A. de C.V. Series B .... 290,383 125,165
*Grupo Gigante S.A. Series B ...................... 423,360 121,297
Grupo Industrial Alfa S.A. Series A .............. 221,264 984,580
Grupo Industrial Bimbo S.A. de C.V. Series A ..... 132,337 754,126
*Grupo Televisa S.A. (Certificate Representing
Series A, Series D, + Series L) ................... 62,000 841,024
Kimberly Clark de Mexico S.A. de C.V. Series A ... 72,000 1,398,377
Telefonos de Mexico S.A. Series L ................ 1,280,000 1,953,754
*Tolmex S.A. de C.V. Series B-2 ................... 40,000 141,988
Vitro S.A. ....................................... 176,400 324,265
------------
TOTAL -- MEXICO (Cost $18,355,618) ................. 16,293,739
------------
PORTUGAL -- (9.2%)
COMMON STOCKS -- (9.2%)
BCP (Banco Comercial Portugues SA) ............... 275,395 3,587,943
</TABLE>
7
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
-------- ------------
<S> <C> <C>
Banco Espirito Santo e Commercial de Lisboa .... 20,000 $ 346,521
Banco Pinto & Sotto Mayor SA ................... 16,000 108,247
Banco Totta & Acores SA ........................ 59,070 1,040,957
Cel-Cat Fabrica Nacional de Condutores
Electricos SA ................................... 3,300 59,323
*Companhia de Seguros Mundial Confianca SA ...... 12,000 115,129
Companhia de Seguros Tranquilidade SA .......... 3,000 63,402
Compania Geral de Credito Predial Portugues SA . 6,000 57,332
*Compania Geral de Credito Predial Portugues SA
Issue 96 ....................................... 720 6,461
Corticeira Amorim Sociedad Gestora Participacoes
Sociais SA ..................................... 37,100 406,379
*EFACEC (Empresa Fabril de Maquinas Electricas) . 13,600 110,325
Engil Sociedade Gestora de Participacoes Sociais
SA ............................................. 6,000 64,485
*Filmes Lusomundo SA ............................ 7,612 82,888
Jeronimo Martins (Estabelecimentos Jeronimo
Martins & Filho Administracao e Participacoes
Financeiros SA) ................................. 34,300 3,153,744
*Lusotur Sociedad Financeira de Turismo SA ...... 13,266 196,768
Mague-Gestao e Participacoes SA ................ 11,800 258,505
Modelo Continente SGPS SA ...................... 28,100 914,155
Portugal Telecom SA ............................ 65,232 1,731,674
Salvador Caetano Industrias Metalurgicas e
Veiculos de Transporte SA ...................... 15,868 299,059
Sociedad Construcoes Soares da Costa SA ........ 23,710 219,226
Sociedade de Investimento e Gestao SGPS SA ..... 4,000 61,856
Sonae Investimentos Sociedade Gestora de
Participacoes Sociais SA ....................... 81,800 2,449,784
Uniceruniao Cervejeira SA ...................... 50,600 858,113
------------
TOTAL COMMON STOCKS (Cost $12,566,716) ........... 16,192,276
------------
INVESTMENT IN CURRENCY -- (0.0%)
*Portuguese Escudos (Cost $5,676) ............... 5,567
------------
RIGHTS/WARRANTS -- (0.0%)
*EFACEC (Empresa Fabril de Maquinas Electricas)
Rights 12/05/96 ................................ 13,600 88
</TABLE>
8
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
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<S> <C> <C>
*EFACEC (Empresa Fabril de Maquinas
Electricas) Rights 12/21/96 ................. 13,600 $ 36,190
------------
TOTAL RIGHTS/WARRANTS (Cost $62,358) .......... 36,278
------------
TOTAL -- PORTUGAL (Cost $12,634,750) .......... 16,234,121
------------
ISRAEL -- (8.9%)
COMMON STOCKS -- (8.9%)
*Africa-Israel Investments, Ltd. ............. 300 381,702
*Africa-Israel Investments, Ltd. ............. 150 178,217
Agis Industries (1983), Ltd. ................ 17,600 131,828
American Israeli Paper Mills, Ltd. .......... 3,000 109,699
Bank Hapoalim B.M. .......................... 1,029,800 1,515,482
Bank Leumi Le-Israel ........................ 947,250 1,187,373
Bezek, Ltd. ................................. 601,800 1,462,484
*Blue Square Chain Stores Properties
Investment .................................. 24,000 184,558
CLAL Electronics Industries, Ltd. ........... 3,460 291,616
CLAL Industries, Ltd. ....................... 122,600 522,431
CLAL Insurance, Ltd. ........................ 35,800 220,966
CLAL Israel, Ltd. ........................... 25,150 580,438
Delek Israel Fuel Corp., Ltd. Series C ...... 7,000 168,242
Discount Investment Corp .................... 6,570 402,791
Elbit, Ltd. ................................. 4,960 207,869
Elite Industries, Ltd. ...................... 50,400 226,846
Elron Electronic Industries, Ltd. ........... 6,020 216,412
First International Bank of Israel .......... 3,900 441,630
IDB Bankholding Corp., Ltd. ................. 168,000 619,890
IDB Development Corp., Ltd. Series A ........ 36,450 624,316
*Israel Chemicals, Ltd. ...................... 917,000 797,293
*Israel Corp. Series A ....................... 4,000 211,152
Koor Industries, Ltd. ....................... 12,205 1,055,999
*Makhteshim Chemical Works, Ltd. ............. 50,900 309,944
*Matav Cable Israel .......................... 16,000 141,080
Osem Investment, Ltd. ....................... 61,856 343,592
Property and Building Corp., Ltd. ........... 3,461 177,298
Super-Sol, Ltd. Series B .................... 13,960 341,870
Tadiran, Ltd. ............................... 97,049 412,955
Tambour ..................................... 40,000 76,439
</TABLE>
9
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
--------- ------------
<S> <C> <C>
Teva Pharmaceutical Industries, Ltd. ............. 4,605 $ 2,111,646
------------
TOTAL -- ISRAEL (Cost $16,806,419) ................. 15,654,058
------------
THAILAND -- (5.9%)
COMMON STOCKS -- (5.9%)
Advanced Info Service Public Co., Ltd. (Foreign) . 124,500 1,453,231
American Standard Sanitaryware (Thailand) Public
Co. Ltd. (Foreign) ............................... 4,150 61,770
Asia Securities Trading Public Co., Ltd. (Foreign) 69,000 115,541
Ayudhya Insurance Public Co., Ltd. (Foreign) ..... 13,000 97,767
Bangkok Land Public Co., Ltd. (Foreign) .......... 256,400 143,114
Bangkok Rubber Public Co., Ltd. (Foreign) ........ 40,000 17,626
Bangkok Steel Industry Public Co., Ltd. (Foreign) 84,000 46,063
Bank of Asia Public Co., Ltd. (Foreign) .......... 188,100 314,974
Bank of Ayudhya Public Co., Ltd. (Foreign) ....... 77,000 242,793
Banpu Public Co., Ltd. (Foreign) ................. 25,000 497,454
Charoen Pokphand Feedmill Public Co., Ltd.
(Foreign) ........................................ 8,100 25,541
*Christiani and Nielson (Thai) Public Co., Ltd.
(Foreign) ........................................ 56,779 17,347
First Bangkok City Bank Public Co., Ltd. (Foreign) 460,200 531,763
Kiatnakin Finance and Securities Public Co., Ltd.
(Foreign) ........................................ 36,000 67,333
Krung Thai Bank Public Co., Ltd. (Foreign) ....... 616,000 1,761,379
Land and House Public Co., Ltd. (Foreign) ........ 71,100 562,562
MK Real Estate Development Public Co., Ltd.
(Foreign) ........................................ 23,625 29,381
Modernform Group Public Co., Ltd. (Foreign) ...... 46,000 28,378
Nawarat Patanakarn Public Co., Ltd. .............. 6,400 7,646
*New Imperial Hotel Public Co., Ltd. (Foreign) .... 32,000 20,682
*Padaeng Industry Public Co., Ltd (Foreign) ....... 82,500 38,778
Post Publishing Public Co., Ltd. (Foreign) ....... 23,000 54,505
Premier Enterprises Public Co., Ltd. (Foreign) ... 32,000 37,289
Saha Pathana Inter-Holding Public Co., Ltd.
(Foreign) ........................................ 25,400 64,669
Securities One Public Co., Ltd. (Foreign) ........ 69,000 362,162
Shangri-La Hotel Public Co., Ltd. (Foreign) ...... 54,000 47,591
Shinawatra Computer and Communications Public
Co., Ltd. (Foreign) .............................. 102,800 1,361,003
Siam City Bank Public Co., Ltd. (Foreign) ........ 319,100 374,971
Siam City Cement Public Co., Ltd. (Foreign) ...... 90,600 603,290
Siam Commercial Bank Public Co., Ltd. (Foreign) .. 1,000 8,696
Siam Pulp & Paper Co., Ltd. (Foreign) ............ 48,000 92,127
</TABLE>
10
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Shares Value+
--------- --------------
<S> <C> <C>
Sino-Thai Engineering and Construction Public Co.,
Ltd. (Foreign) ..................................... 21,200 $ 55,221
Srithai Superware Public Co., Ltd. (Foreign) ....... 21,000 106,933
TPI Polene Public Co., Ltd. (Foreign) .............. 135,581 273,499
Tanayong Public Co., Ltd. (Foreign) ................ 163,800 141,151
Thai German Ceramic Industry Public Co., Ltd.
(Foreign) .......................................... 58,000 68,155
Thai Glass Industries Public Co., Ltd. (Foreign) ... 60,000 190,364
Thai Military Bank Public Co., Ltd. (Foreign) ...... 204,000 539,365
*Thai Packaging and Printing Public Co., Ltd.
(Foreign) .......................................... 29,500 7,857
Thai Wah Public Co., Ltd. (Foreign) ................ 21,000 13,161
*Unicord Public Co., Ltd. (Foreign) ................. 85,000 8,989
--------------
TOTAL COMMON STOCKS (Cost $10,732,141) .............. 10,492,121
--------------
INVESTMENT IN CURRENCY -- (0.0%)
*Thailand Baht (Cost $2,478) ........................ 2,468
--------------
TOTAL -- THAILAND (Cost $10,734,619) ................. 10,494,589
--------------
UNITED STATES -- (0.0%)
COMMON STOCKS -- (0.0%)
Turkiye Garanti Bankasi A.S. ADR (Representing 200
Shares) (Cost $81,115) (a) ......................... 9,000 42,750
--------------
</TABLE>
11
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
Face
Amount
(000) Value+
-------- -------------
<S> <C> <C>
TEMPORARY CASH INVESTMENTS -- (0.9%)
Repurchase Agreement, Chase Manhattan Bank N.A.
5.40%, 12/02/97 (Collateralized by United States
Treasury Notes 6.125%, 05/31/97) (Cost
$1,635,000) .................................... $1,635 $ 1,635,000
-------------
TOTAL INVESTMENTS -- (100.0%) (Cost $136,782,650) $176,725,916
=============
</TABLE>
- ------
+See Note B to Financial Statements.
*Non-Income Producing Securities
(a)Pursuant to Rule 144A under the Securities Act
of 1933, all or a portion of these securites can
only be sold to qualified institutional investors.
12
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996
(Amounts in thousands, except share amounts)
ASSETS:
Investments at Value (Cost of $136,783) ............... $ 176,726
Cash .................................................. 11
Receivable for Dividends and Interest ................. 62
Other Assets .......................................... 59
---------
Total Assets .................................... 176,858
---------
LIABILITIES:
Deferred Chilean Repatriation Tax ..................... 2,285
Accrued Expenses ...................................... 96
Payable for Investment Securities Purchased ........... 8
---------
Total Liabilities ............................... 2,389
---------
NET ASSETS applicable to 11,000,687 shares outstanding
$.01 par value shares (authorized 200,000,000 shares) ......... $ 174,469
=========
NET ASSET VALUE ................................................ $ 15.86
=========
PUBLIC OFFERING PRICE PER SHARE ................................ $ 15.94
=========
NET ASSETS CONSIST OF:
Paid-In Capital ....................................... $ 136,276
Accumulated Net Investment Loss ....................... (130)
Undistributed Net Realized Gain ....................... 203
Accumulated Net Realized Foreign
Exchange Loss ........................................ (54)
Unrealized Net Foreign Exchange Gain .................. 4
Deferred Chilean Repatriation Tax ..................... (1,773)
Unrealized Appreciation of Investment
Securities and Foreign Currency ...................... 39,943
---------
Total Net Assets ................................ $ 174,469
=========
See accompanying Notes to Financial Statements
13
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1996
(Amounts in thousands)
<TABLE>
<CAPTION>
<S> <C>
Investment Income
Dividends (Net of Foreign Taxes Withheld and Repatriation of $650)........... $ 3,665
Interest..................................................................... 207
-------
Total Investment Income.................................................. 3,872
-------
Expenses
Investment Advisory Services ................................................ 865
Accounting & Transfer Agent Fees ............................................ 173
Custodian's Fee ............................................................. 476
Legal Fees .................................................................. 58
Audit Fees................................................................... 20
Directors' Fees and Expenses ................................................ 25
Organization Costs........................................................... 50
Other ................................................................... 53
-------
Total Expenses .......................................................... 1,720
Less: Fee Waived............................................................. (692)
-------
Net Expenses................................................................. 1,028
-------
Net Investment Income ...................................................... 2,844
-------
Net Realized and Unrealized Gain (Loss) on
Investments and Foreign Currency
Net Realized Gain on Investment Securities........................................ 215
Net Realized Loss on Foreign
Currency Transactions............................................................ (54)
Change in Unrealized Appreciation (Depreciation) of:
Investment Securities and Foreign Currency ...................................... 16,151
Deferred Chilean Repatriation Tax................................................ (1,773)
Translation of Foreign Currency Denominated
Amounts.......................................................................... 32
-------
Net Gain on Investment Securities and
Foreign Currency............................................................ 14,571
-------
Net Increase in Net Assets
Resulting from Operations.................................................... $17,415
=======
</TABLE>
See accompanying Notes to Financial Statements
14
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
STATEMENTS OF CHANGES IN NET ASSETS
(Amounts in thousands)
<TABLE>
<CAPTION>
Year Year
Ended Ended
Nov. 30, Nov. 30,
1996 1995
--------- ---------
<S> <C> <C>
Increase (Decrease) in Net Assets
Operations:
Net Investment Income .............................. $ 2,844 $ 3,072
Net Realized Gain on Investment Securities ......... 215 2,731
Net Realized Loss on Foreign Currency
Transactions ...................................... (54) (19)
Change in Unrealized Appreciation (Depreciation) of:
Investment Securities and Foreign Currency ....... 16,151 (26,817)
Deferred Chilean Repatriation Tax .................. (1,773) --
Translation of Foreign Currency Denominated
Amounts ......................................... 32 (8)
--------- ---------
Net Increase (Decrease) in Net Assets
Resulting from Operations ....................... 17,415 (21,041)
--------- ---------
Distributions From:
Net Investment Income .............................. (3,037) (3,002)
Net Realized Gain .................................. (2,627) (319)
--------- ---------
Total Distributions ............................... (5,664) (3,321)
--------- ---------
Capital Share Transactions (1):
Shares Issued ...................................... -- 25,000
Shares Issued in Lieu of Cash Distributions ........ 5,664 3,321
--------- ---------
Net Increase From Capital Share Transactions ...... 5,664 28,321
--------- ---------
Total Increase .................................... 17,415 3,959
Net Assets
Beginning of Period ................................ 157,054 153,095
--------- ---------
End of Period ...................................... $ 174,469 $ 157,054
========= =========
(1) Share Amounts:
Shares Issued....................................... -- 1,460
Shares Issued in Lieu of Cash Distributions......... 366 223
--------- ---------
366 1,683
========= =========
</TABLE>
See accompanying Notes to Financial Statements
15
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
FINANCIAL HIGHLIGHTS
(for a share outstanding throughout each period)
<TABLE>
<CAPTION>
Year Year Year Feb. 2
Ended Ended Ended to
Nov. 30, Nov. 30, Nov. 30, Nov. 30,
1996 1995 1994 1993
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........................... $14.77 $17.10 $15.18 $10.00
------ ------ ------ ------
Income from Investment Operations
- ---------------------------------
Net Investment Income.................................... 0.26 0.28 0.19 0.16
Net Gains on Securities (Realized and
Unrealized)............................................ 1.36 (2.29) 1.94 5.53
------ ------ ------ ------
Total from Investment Operations.................. 1.62 (2.01) 2.13 5.69
------ ------ ------ ------
Effect of Capital Changes - - - (0.46)
- ------------------------- - - - ------
------ ------ ------ ------
Less Distributions
- ------------------
Net Investment Income.................................... (0.28) (0.29) (0.20) (0.05)
Net Realized Gain........................................ (0.25) (0.03) (0.01) -
------ ------ ----- ------
Total Distributions............................... (0.53) (0.32) (0.21) (0.05)
------ ------ ------ ------
Net Asset Value, End of Period................................. $15.86 $14.77 $17.10 $15.18
====== ====== ====== ======
Total Investment Return (a).................................... 12.41% (11.73)% 14.02% 52.32%(#)
Net Assets, End of Period (thousands).......................... $174,469 $157,054 $153,095 $134,232
Ratio of Expenses to Average Net Assets........................ 0.59%(b) 0.58%(b) 0.80%(b) 0.73%(*)
Ratio of Net Investment Income to
Average Net Assets............................................ 1.64%(b) 2.10%(b) 1.18%(b) 1.59%(*)
Portfolio Turnover Rate........................................ 0.29% 5.73% 0.26% 0.28%(*)
Average Commission Rate (c).................................... $0.0016 N/A N/A N/A
</TABLE>
(*) Annualized
(#) Non-annualized
(a) Based on per share net asset value. Per share market price is not readily
determinable since fund shares are currently only sold at a public
offering price.
(b) Had certain waivers not been in effect, the ratios of expenses to average
net assets for the periods ended November 30, 1996, 1995 and 1994 would
have been 0.99%, 0.98% and 0.88%, respectively, and the ratios of net
investment income to average net assets for the periods ended November 30,
1996, 1995 and 1994 would have been 1.24%, 1.70% and 1.10%, respectively.
(c) Computed by dividing the total amount of brokerage commissions paid by the
total shares of investment securities purchased and sold during the period
for which commissions were charged, as required by the SEC for fiscal
years beginning after September 1, 1995.
See accompanying Notes to Financial Statements
16
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
NOTES TO FINANCIAL STATEMENTS
A. Organization:
Dimensional Emerging Markets Fund Inc. (the "Fund") is a closed-end
management investment company registered under the Investment Company Act of
1940, as amended.
B. Significant Accounting Policies:
The following significant accounting policies are in conformity with
generally accepted accounting principles for investment companies. Such policies
are consistently followed by the Fund in preparation of its financial
statements. The preparation of financial statements in accordance with generally
accepted accounting principles may require management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
1. Security Valuation: Securities held by the Fund which are traded on a
stock exchange are valued at the closing price of the exchange on which
such securities are primarily traded, as of the close of business on the
last business day of the month on which the New York Stock Exchange is open
for regular trading, or in the absence of any volume, at the current bid
price. Securities that are traded in the OTC market, are valued at the
current bid price in the OTC market at the time of valuation. Securities
for which market quotations are not readily available (including restricted
securities which are subject to limitations as to their sale) are valued at
fair value as determined in good faith or under the authority of the Board
of Directors.
2. Foreign Currency Translations: Securities and other assets and
liabilities of the Fund whose values are initially expressed in foreign
currencies are translated to U.S. dollars at the bid price of such currency
against U.S. dollars last quoted by a major bank. Dividend and interest
income and certain expenses are translated to U.S. dollars at the ratio of
exchange on their respective accrual dates. Receivables and payables
denominated in foreign currencies are marked to market based on daily
exchange rates and exchange gains or losses are realized upon ultimate
receipt or disbursement.
The Fund does not isolate the effect of fluctuations in foreign exchange
rates from the effect of fluctuations in the market prices of securities
held whether realized or unrealized.
Realized gains or losses on foreign currency transactions represent net
foreign exchange gains or losses from the disposition of foreign
currencies, currency gains or losses realized between the trade and
settlement dates on securities transactions, and the difference between
amounts of interest, dividends and foreign withholding taxes recorded on
the Fund's books and the U.S. dollar equivalent amounts actually received
or paid.
3. Federal Income Taxes: It is the Fund's intention to continue to qualify
as a regulated investment company and distribute all of its taxable income.
Accordingly, no provisions for Federal income tax is required in the
financial statements.
17
<PAGE>
4. Repurchase Agreements: The Fund may purchase money market instruments
from financial institutions, such as banks and non-bank dealers, subject to
the seller's agreement to repurchase them at an agreed upon date and price.
The seller will be required on a daily basis to maintain the value of the
collateral subject to the agreement at not less than the repurchase price
(including accrued interest). The agreements are conditioned upon the
collateral being deposited under the Federal Reserve book-entry system or
with the Fund's custodian. If the seller defaults and the value of the
collateral declines or if bankruptcy proceedings are commenced with respect
to the seller of the security, realization of the collateral by the Fund
may be subject to legal proceedings. All repurchase agreements were entered
into on November 29, 1996.
5. Foreign Market Risks: Investments in foreign markets may involve certain
considerations and risks not typically associated with investments in the
United States, including the possibility of future political and economic
developments and the level of foreign governmental supervision and
regulation of foreign securities markets. These markets are generally
smaller, less liquid and more volatile than the major securities markets in
the United States. Consequently, acquisition and disposition of securities
by the Fund may be inhibited.
6. Other: Security transactions are accounted for on the date the
securities are purchased or sold. Costs used in determining realized gains
and losses on the sale of investment securities are those of specific
securities sold. Dividend income and distributions to shareholders are
recorded on the ex-dividend date. Interest income is recorded on the
accrual basis. Costs incurred by the Fund in connection with its
organization are being amortized on a straight-line basis over a five year
period beginning at the commencement of operations of the Fund.
Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of foreign investors.
In addition, if there is a deterioration in a country's balance of payments
or for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad. Amounts repatriated prior to the end of
specified periods may be subject to taxes as specified in the Fund's
prospectus. The fund has recorded deferred repatriation taxes relating to
net unrealized appreciation on its investment in Chile.
C. Investment Advisor:
Dimensional Fund Advisors Inc. (the "Advisor") provides investment advisory
services to the Fund. For the year ended November 30, 1996, the fund paid the
Advisor a fee based on an annual effective rate of 0.50% of average net assets.
The Advisor has agreed to waive 80% of its advisory fee to keep it at an annual
rate of 0.10% of average net assets.
An investment committee of the Advisor approves all investment decisions
made by the Fund.
Certain officers of the Fund are also officers, directors and shareholders
of the Advisor.
18
<PAGE>
D. Purchases and Sales of Securities:
For the year ended November 30, 1996, the Fund made the following purchases
and sales of investment securities other than U.S. Government securities and
temporary cash investments (amounts in thousands):
Purchases.................................... $4,911
Sales .................................... 494
E. Investment Transactions:
At November 30, 1996, gross unrealized appreciation and depreciation for
financial reporting and Federal income tax purposes of investment securities and
foreign currencies were as follows (amounts in thousands):
Gross Unrealized Appreciation ............. $55,868
Gross Unrealized Depreciation.............. (15,925)
------
Net .................................. $39,943
======
F. Line of Credit
In July, 1996, the Fund together with other DFA advised portfolios, entered
into a $50 million unsecured line of credit with its domestic custodian bank.
The portfolio is permitted to borrow between 25% and 33 1/3% of its net assets
up to a maximum of $50 million. Borrowings under the line are charged interest
at the current overnight federal funds rate plus a variable rate determined at
the borrowing date. Each portfolio is individually, and not jointly liable for
its particular advances under the line. There is no commitment fee on the unused
portion of the line of credit. There were no borrowings under the line of credit
by the Portfolio during the year ended November 30, 1996.
G. Reimbursement Fees:
Shares of the Fund are sold at a public offering price which is equal to
the current net asset value plus a reimbursement fee of 0.5% of such net asset
value. Reimbursement fees are recorded as an addition to paid in capital.
19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Dimensional Emerging Markets Fund Inc.:
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the Dimensional Emerging Markets Fund Inc. as of
November 30, 1996, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
November 30, 1996, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Dimensional Emerging Markets Fund Inc. as of November 30, 1996, and the results
of its operations for the year then ended, the changes in its net assets for
each of the two years in the period then ended and its financial highlights for
each of the periods presented, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 17, 1997
20
<PAGE>
Description of the Fund's Dividend Reinvestment Plan
(Unaudited)
The Fund will, from time to time, distribute dividends and realized net capital
gains to shareholders. The Fund intends to distribute to shareholders annually
substantially all of its investment company taxable income. Investment company
taxable income includes all of the Fund's taxable income minus the excess, if
any, of its net realized long-term capital gains over its net realized
short-term capital losses (including any capital loss carryovers), plus or minus
certain other required adjustments. The Fund will determine annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses (including any capital loss carryovers), although it
currently expects to do so. Shareholders will receive all distributions in
additional Shares issued by the Fund for this purpose priced at net asset value,
unless a shareholder elects to receive dividends and/or distributions by wire
transfer when requested or in cash paid by check in U.S. Dollars mailed directly
to the shareholder by PFPC Inc., the paying agent. Shareholders must make such
election in writing sent to the Fund's dividend paying agent, c/o PFPC Inc.,
P.O. Box 8950, Wilmington, DE 19809. Cash dividends and distributions paid to
these shareholders will be reduced by the amount of any foreign taxes incurred
with respect to remittances to pay such cash dividends or distributions.
The receipt of dividends and distributions in Shares will not relieve
participants of any income tax or withholding tax that may be payable on such
dividends or distributions.
21
