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Dimensional Emerging Markets Fund Inc.
Annual Report
Year Ended November 30, 1997
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DIMENSIONAL EMERGING MARKETS FUND INC.
ANNUAL REPORT
TABLE OF CONTENTS
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Schedule of Investments................................................. 1-6
Statement of Assets and Liabilities..................................... 7
Statement of Operations................................................. 8
Statements of Changes in Net Assets..................................... 9
Financial Highlights.................................................... 10
Notes to Financial Statements........................................... 11-12
Report of Independent Accountants....................................... 13
Description of the Fund's Dividend Reinvestment Plan.................... 14
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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.
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DIMENSIONAL EMERGING MARKETS FUND INC.
SCHEDULE OF INVESTMENTS
NOVEMBER 30, 1997
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TURKEY -- (16.3%)
COMMON STOCKS -- (16.3%)
Akbank................................................ 43,707,109 $ 2,848,933
Akcansa Cimento Sanayi ve Ticaret SA.................. 1,930,935 335,634
Aksa.................................................. 6,303,274 491,424
Alarko Holding........................................ 996,171 203,711
Arcelik A.S........................................... 12,518,295 1,103,962
Aygaz................................................. 3,104,640 468,223
Bekoteknik Sanayi A.S................................. 3,499,860 205,764
Brisa Bridgestone Sanbanci Lastik San & Tic A.S....... 1,323,000 669,599
CIMSA A.S. (Cimento Sanayi ve Ticaret)................ 1,560,000 275,146
Cimentas A.S.......................................... 674,072 81,845
Cukurova Elektrik A.S................................. 559,000 1,071,675
Dogan Sirketler Grubu Holdings A.S.................... 12,458,250 471,312
Doktas................................................ 480,000 139,874
EGE Biracilik ve Malt Sanayii A.S..................... 4,792,878 490,057
*Eczacibasi Ilac...................................... 3,781,620 175,930
Erciyas Biracilik..................................... 3,970,560 588,667
Eregli Demir ve Celik Fabrikalari Turk A.S............ 7,837,500 1,041,768
Good Year Lastikleri A.S.............................. 661,500 280,691
Guney Biracilik....................................... 1,088,587 75,131
Hurriyet Gazette...................................... 2,194,000 375,752
*Izmir Demir Celik.................................... 9,222,807 99,015
Koc Holding A.S....................................... 9,319,264 2,215,412
Migros Turk A.S....................................... 1,048,950 992,080
*Netas Northern Electric Telekomunikasyon A.S......... 1,292,000 508,596
Otosan Otomobil A.S................................... 1,644,000 1,281,716
Tat Konserve.......................................... 2,499,997 127,808
Tofas Turk Otomobil Fabrikasi A.S..................... 13,999,125 769,360
Trakya Cam Sanayii A.S................................ 9,692,296 668,930
Turcas Petrolculuk A.S................................ 5,500,078 129,344
Turk Demir Dokum...................................... 4,649,970 332,811
Turk Siemens Kablo ve Elektrik Sanayi A.S............. 1,260,000 104,675
*Turk Sise Cam........................................ 13,914,834 995,924
Turkiye Garanti Bankasi A.S........................... 47,029,598 2,524,530
Turkiye Is Bankasi A.S. Series C...................... 54,200,000 5,888,141
USAS (Ucak Servisi A.S.).............................. 50,000 116,306
Yapi ve Kredi Bankasi A.S............................. 115,326,951 3,596,505
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TOTAL -- TURKEY
(Cost $14,327,006)................................... 31,746,251
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BRAZIL -- (13.2%)
PREFERRED STOCKS -- (8.0%)
Aracruz Celulose SA Series B.......................... 1,265,999 1,803,141
Banco Bradesco SA..................................... 155,246,374 1,133,563
Banco do Brasil SA.................................... 56,145,862 397,307
*Banco do Estado de Sao Paulo SA...................... 14,980,000 594,025
Banco Itau SA......................................... 3,312,000 1,480,851
Brasmotor SA.......................................... 2,015,570 225,299
COFAP (Cia Fabricadora De Pecas)...................... 14,250 53,951
Cervejaria Brahma..................................... 4,049,480 2,683,032
Duratex SA............................................ 4,510,000 163,434
Ericsson Telecomunicacoes SA.......................... 20,194,770 709,975
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IKPC Industrias Klabin de Papel e Celulose SA......... 418,531 $ 226,370
Investimentos Itau SA................................. 1,088,000 706,156
*Lojas Americanas SA.................................. 4,324,460 30,601
Multibras Eletrodomesticos SA......................... 427,145 177,122
*Paranapanema SA...................................... 9,588,000 61,366
Sadia Concordia SA.................................... 308,282 211,203
Siderurgica Belgo-Mineira............................. 2,181,754 125,851
Telecomunicacoes Brasileiras SA....................... 1,889,166 194,140
USIMINAS (Usinas Siderurgicas de Minas Gerais SA)..... 41,925 266,441
Vale do Rio Doce...................................... 239,144 4,203,716
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TOTAL PREFERRED STOCKS
(Cost $8,166,414).................................... 15,447,544
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COMMON STOCKS -- (5.2%)
*Banco do Estado de Sao Paulo SA...................... 6,300,000 215,806
Embraco SA............................................ 342,000 98,654
*Lojas Americanas SA.................................. 6,762,000 39,164
*Mannesmann SA........................................ 378,000 50,088
Souza Cruz Industria e Comercio....................... 180,016 1,387,447
Telecomunicacoes Brasileiras SA....................... 82,869,000 7,694,290
VSMA (Cia Vidraria Santa Marina)...................... 121,000 236,692
White Martins SA...................................... 286,686 387,648
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TOTAL COMMON STOCKS
(Cost $3,758,775).................................... 10,109,789
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RIGHTS/WARRANTS -- (0.0%)
*Banco do Brasil SA Warrants Series A 06/30/01........ 11,229,172 19,941
*Banco do Brasil SA Warrants Series B 06/30/06........ 966,938 1,787
------------
TOTAL RIGHTS/WARRANTS
(Cost $0)............................................ 21,728
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TOTAL -- BRAZIL
(Cost $11,925,189)................................... 25,579,061
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PORTUGAL -- (12.6%)
COMMON STOCKS -- (12.5%)
BCP (Banco Comercial Portugues SA).................... 275,395 5,807,118
Banco Espirito Santo e Commercial de Lisboa........... 20,000 562,566
Banco Pinto & Sotto Mayor SA.......................... 16,000 216,636
Banco Totta & Acores SA............................... 59,070 1,114,466
Cel-Cat Fabrica Nacional de Condutores Electricos
SA.................................................. 3,300 45,780
*Companhia de Seguros Mundial Confianca SA............ 12,000 200,766
Companhia de Seguros Tranquilidade SA................. 3,000 70,751
Companhia Geral de Credito Predial Portugues SA....... 7,920 78,009
Corticeira Amorim Sociedad Gestora Participacoes
Sociais SA.......................................... 37,100 422,035
EFACEC (Empresa Fabril de Maquinas Electricas)........ 18,133 126,280
Engil Sociedade Gestora de Participacoes Sociais SA... 6,000 64,558
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*Filmes Lusomundo SA.................................. 7,612 $ 62,092
*Inparsa Industrias e Participacoes S.G.P.S. SA....... 40,900 723,994
*Inparsa Industrias e Participacoes S.G.P.S. SA Em
97.................................................. 10,225 180,999
Jeronimo Martins (Estabelecimentos Jeronimo Martins &
Filho Administracao e Participacoes Financeiros
SA)................................................. 68,599 2,167,866
*Jeronimo Martins S.G.P.S. SA Em 97................... 102,897 3,191,799
*Lusotur Sociedad Financeira de Turismo SA............ 13,266 134,051
Mague-Gestao e Participacoes SA....................... 11,800 311,026
Modelo Continente SGPS SA............................. 28,100 1,216,247
Portugal Telecom SA................................... 65,232 3,004,414
Salvador Caetano Industrias Metalurgicas e Veiculos de
Transporte SA....................................... 15,868 369,602
*Sociedad Construcoes Soares da Costa SA.............. 23,710 184,196
Sociedade de Investimento e Gestao SGPS SA............ 4,000 88,785
Sonae Investimentos Sociedade Gestora de Participacoes
Sociais SA.......................................... 81,800 3,057,116
Uniceruniao Cervejeira SA............................. 50,600 791,809
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TOTAL COMMON STOCKS
(Cost $12,721,339)................................... 24,192,961
------------
RIGHTS/WARRANTS -- (0.1%)
*Inparsa Industrias e Participacoes S.G.P.S. SA Rights
12/09/97............................................ 40,900 178,842
------------
INVESTMENT IN CURRENCY -- (0.0%)
*Portuguese Escudos................................... 2,144
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TOTAL -- PORTUGAL
(Cost $12,723,804)................................... 24,373,947
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MEXICO -- (12.0%)
COMMON STOCKS -- (12.0%)
Apasco S.A. de C.V.................................... 48,000 283,831
Carso Global Telecom S.A. de C.V. Telecom Series A1... 271,000 973,689
*Cementos de Mexico S.A. de C.V. Series B............. 358,000 1,752,822
*Cementos de Mexico SA de C.V. Series A............... 13,500 58,041
Cifra S.A. de C.V. Series A........................... 132,459 258,125
Cifra S.A. de C.V. Series C........................... 1,083,000 2,070,889
Controladora Comercial Mexicana S.A. de C.V. Series
B................................................... 279,000 299,031
El Puerto de Liverpool S.A. Series 1.................. 20,000 29,474
El Puerto de Liverpool S.A. Series C1................. 328,600 436,237
Empresas ICA Sociedad Controladora S.A. de C.V........ 336,000 875,753
*Empresas la Moderna S.A. de C.V. Series A............ 184,885 898,470
Fomento Economico Mexicano S.A. de C.V. Series B...... 244,000 2,002,989
Grupo Carso S.A. de C.V. Series A-1................... 271,000 1,782,345
*Grupo Financiero Banamex Accival S.A. de C.V. Series
B................................................... 456,000 999,692
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*Grupo Financiero Banamex Accival S.A. de C.V. Series
L................................................... 42,607 $ 84,274
*Grupo Financiero Bancomer S.A. de C.V. Series B...... 790,000 454,149
*Grupo Financiero Bancomer S.A. de C.V. Series L...... 29,259 11,404
*Grupo Financiero GBM Atlantico S.A. de C.V. Series
B................................................... 149,000 108,885
*Grupo Financiero GBM Atlantico S.A. de C.V. Series
L................................................... 980 656
Grupo Financiero Inbursa-C............................ 9,455 35,699
*Grupo Financiero Santander Mexicano S.A. de C.V.
Series B............................................ 33,466 33,015
*Grupo Financiero Serfin S.A. de C.V. Series B........ 290,383 65,076
*Grupo Gigante S.A. Series B.......................... 423,360 153,658
Grupo Industrial Alfa S.A. Series A................... 221,264 1,668,131
Grupo Industrial Bimbo S.A. de C.V. Series A.......... 132,337 1,079,903
*Grupo Televisa S.A. (Certificate Representing Series
A, Series D, & Series L)............................ 62,000 1,147,794
Kimberly Clark de Mexico S.A. de C.V. Series A........ 360,000 1,604,769
Telefonos de Mexico S.A. Series L..................... 1,280,000 3,211,486
*Tolmex S.A. de C.V. Series B-2....................... 40,000 214,846
Vitro S.A............................................. 176,400 756,258
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TOTAL -- MEXICO
(Cost $18,367,775)................................... 23,351,391
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ARGENTINA -- (10.8%)
COMMON STOCKS -- (10.8%)
*Acindar Industria Argentina de Aceros SA Series A.... 161,067 345,634
*Alpargatas SA Industrial y Comercial................. 275,000 128,754
Astra Cia Argentina de Petroleos SA................... 481,800 829,044
Bagley y Cia, Ltd. SA Series B........................ 121,090 230,168
Banco de Galicia y Buenos Aires SA Series A........... 226,116 1,318,810
Banco Frances del Rio de la Plata SA.................. 136,130 1,212,066
*Buenos Aires Embotelladora SA Series B............... 250 19,008
CIADEA SA............................................. 134,917 179,516
*Celulosa Argentina SA Series B....................... 43,375 11,629
Corcemar SA Series B.................................. 34,805 151,465
Garovaglio y Zorraquin SA............................. 25,800 78,465
*Indupa SA Industrial y Comercial..................... 204,322 244,267
Irsa Inversiones y Representaciones SA................ 88,477 283,245
Juan Minetti SA....................................... 41,179 117,821
Ledesma SA............................................ 192,459 186,764
Molinos Rio de la Plata SA Series B................... 178,214 388,670
Naviera Perez Companc SA Series B..................... 544,263 3,887,678
Nobleza-Piccardo Sdad Industrial Comercial y
Financiera Pica..................................... 44,200 198,984
*Sevel Argentina SA Series C.......................... 92,475 86,039
Siderar SAIC Series A................................. 31,416 133,166
Siderca SA Series A................................... 842,532 2,326,365
Sociedad Comercial del Plata.......................... 193,409 230,255
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Telecom Argentina Stet-France SA Series B............. 718,800 $ 4,386,522
Telefonica de Argentina SA Series B................... 1,183,000 3,917,375
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TOTAL -- ARGENTINA
(Cost $13,199,559)................................... 20,891,710
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CHILE -- (10.5%)
COMMON STOCKS -- (9.8%)
Banco de Credito e Inversiones SA Series A............ 53,304 346,019
Banmedica SA.......................................... 347,000 138,800
CAP SA (Compania de Aceros del Pacifico).............. 100,000 233,143
COPEC (Cia de Petroleos de Chile)..................... 757,488 2,813,526
CTI Cia Tecno Industrial SA........................... 4,900,000 128,800
Cervecerias Unidas SA................................. 143,000 735,428
Chilectra Generacion SA............................... 3,119,986 1,116,063
Chilectra SA.......................................... 225,611 1,407,812
Cia de Consumidores de Gas de Santiago SA............. 103,000 324,891
Compania de Sud Americana de Vapores SA............... 410,000 203,360
Compania de Telecomunicaciones de Chile SA Series A... 200,000 1,316,571
Compania de Telecomunicaciones de Chile SA Series B... 352,166 1,730,644
Compania Manufacturera de Papeles y Cartones SA....... 117,150 1,049,664
Empresa Nacional de Electricidad SA................... 4,536,900 2,706,584
Empresa Nacional de Telecomunicaciones SA............. 49,000 240,800
Enersis SA............................................ 3,895,960 2,306,408
Forestal Terranova SA................................. 147,795 141,883
Industrias Forestales Inforsa SA...................... 1,057,365 125,675
Invercap SA........................................... 100,000 75,429
Laboratorio Chile SA.................................. 271,069 285,010
Madeco Manufacturera de Cobre SA...................... 231,227 370,016
Maderas y Sinteticos SA............................... 420,205 139,268
Minera Mantos Blancos SA.............................. 102,255 160,102
Sociedad Industrial Pizarreno SA...................... 63,000 92,160
Sociedad Quimica y Minera de Chile SA Series A........ 36,000 128,366
Sociedad Quimica y Minera de Chile SA Series B........ 77,090 343,601
Vina de Concha y Toro SA.............................. 350,000 172,000
Vina Sta Carolina SA Series A......................... 163,489 69,133
Vina Sta Carolina SA Series B......................... 41,411 18,457
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TOTAL COMMON STOCKS
(Cost $14,022,728)................................... 18,919,613
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INVESTMENT IN CURRENCY -- (0.7%)
*Chilean Pesos (Cost $1,476,691)...................... 1,403,306
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TOTAL -- CHILE
(Cost $15,499,419)................................... 20,322,919
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ISRAEL -- (10.0%)
COMMON STOCKS -- (10.0%)
*Africa-Israel Investments, Ltd....................... 3,000 195,821
*Africa-Israel Investments, Ltd....................... 150 86,933
Agis Industries (1983), Ltd........................... 17,600 139,251
American Israeli Paper Mills, Ltd..................... 3,000 135,634
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Bank Hapoalim B.M..................................... 1,029,800 $ 2,514,163
Bank Leumi Le-Israel.................................. 947,250 1,512,307
Bezek, Ltd............................................ 601,800 1,571,270
*Blue Square Chain Stores Properties Investment....... 24,000 218,370
CLAL Electronics Industries, Ltd...................... 3,460 541,701
CLAL Industries, Ltd.................................. 122,600 654,063
CLAL Insurance, Ltd................................... 35,800 382,386
CLAL Israel, Ltd...................................... 2,515,000 717,771
Delek Isreal.......................................... 7,000 246,260
Elbit Medical Imaging................................. 16,533 99,508
Elbit Systems, Ltd.................................... 16,533 206,024
Elbit, Ltd............................................ 16,533 65,172
Elite Industries, Ltd................................. 10,080 271,159
Elron Electronic Industries, Ltd...................... 20,066 300,523
First International Bank of Israel.................... 780 552,004
IDB Bankholding Corp., Ltd............................ 33,600 729,832
IDB Development Corp., Ltd. Series A.................. 36,450 810,792
Israel Chemicals, Ltd................................. 917,000 1,204,895
*Israel Corp. Series B................................ 800 255,444
Koor Industries, Ltd.................................. 12,205 1,315,086
*Leumi Holdings Insurance............................. 286,100 180,281
*Makhteshim Chemical Works, Ltd....................... 78,319 553,493
*Matav Cable Israel................................... 16,000 125,687
Osem Investment, Ltd.................................. 61,856 280,708
Property and Building Corp., Ltd...................... 3,461 259,164
Super-Sol, Ltd. Series B.............................. 139,600 392,496
Tadiran, Ltd.......................................... 15,653 608,573
Tambour............................................... 40,000 77,876
Teva Pharmaceutical Industries, Ltd................... 46,050 2,284,322
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TOTAL -- ISRAEL
(Cost $16,239,180)................................... 19,488,969
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INDONESIA -- (3.8%)
COMMON STOCKS -- (3.8%)
PT Argo Pantes Tbk.................................... 271,250 87,380
PT Astra International Tbk............................ 2,188,800 1,140,155
PT Berlian Laju Tanker Tbk............................ 431,600 198,199
PT Branta Mulia Tbk................................... 126,000 40,589
PT Charoen Pokphand Indonesia (Foreign)............... 210,000 21,590
PT Dankos Laboratories Tbk............................ 94,500 42,748
PT Gajah Tunngal Tbk.................................. 1,488,000 163,180
PT GT Kabelmetal Indonesia Tbk........................ 180,000 33,311
PT Hanjaya Mandala Sampoerna Tbk...................... 910,000 1,210,006
PT Hero Supermarket Tbk............................... 220,000 93,489
PT Indah Kiat Pulp & Paper Corp. Tbk.................. 4,815,196 1,122,115
PT Indocement Tunggal Prakarsa Tbk.................... 166,000 71,679
PT Indofood Sukses Makmur............................. 42,330 27,853
PT Indorama Synthetics Tbk............................ 535,320 275,181
*PT Inti Indorayon Utama Tbk.......................... 411,500 84,613
PT Jakarta International Hotel and Development Tbk.... 1,590,000 642,974
PT Japfa Comfeed Indonesia Tbk........................ 124,000 17,848
PT Kalbe Farma Tbk.................................... 409,600 151,600
PT Lippo Land Development Tbk......................... 386,400 42,374
PT Mayora Indah Tbk................................... 577,572 110,843
PT Modern Photo Tbk................................... 250,000 167,923
PT Pakuwon Jati Tbk................................... 396,000 62,426
PT Panasia Indosyntec Tbk............................. 403,200 22,108
PT Polysindo Eka Perkasa Tbk.......................... 2,064,000 792,213
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PT Semen Cibinong (Foreign)........................... 743,400 $ 81,524
PT Semen Gresik Tbk................................... 600,000 423,578
PT Summarecon Agung Tbk............................... 258,587 28,358
PT Surya Toto Indonesia Tbk........................... 46,400 48,340
PT Tigaraksa Satria Tbk............................... 68,400 54,382
PT Unggul Indah Corp. Tbk............................. 292,596 120,327
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TOTAL -- INDONESIA
(Cost $13,317,123)................................... 7,378,906
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MALAYSIA -- (3.3%)
COMMON STOCKS -- (3.3%)
AMMB Holdings Berhad.................................. 62,000 53,279
AMMB Holdings Berhad 7.5% Unsecured Loan Stock 1999... 31,000 3,374
Amsteel Corp. Berhad.................................. 198,000 50,194
*Aokam Perdana Berhad................................. 32,000 6,141
Asiatic Development Berhad............................ 117,000 36,866
Berjaya Leisure Berhad................................ 74,000 59,564
Berjaya Singer Berhad................................. 32,400 35,824
Commerce Asset Holding Berhad......................... 91,200 49,113
DCB Holdings Berhad................................... 123,000 72,228
*DCB Sakura Merchant New Shares....................... 6,150 2,255
Edaran Otomobil Nasional Berhad....................... 35,000 81,208
Ekran Berhad.......................................... 42,000 33,085
Genting Berhad........................................ 112,500 259,414
Golden Hope Plantations Berhad........................ 159,000 182,181
Guiness Anchor Berhad................................. 35,000 42,509
Highlands and Lowlands Berhad......................... 99,000 108,329
Hong Leong Credit Berhad.............................. 73,447 63,958
Hong Leong Industries Berhad.......................... 36,800 45,327
Hume Industries (Malaysia) Berhad..................... 57,000 64,330
Kamunting Corp. Berhad................................ 127,000 25,101
Kedah Cement Holdings Berhad.......................... 41,000 14,563
Kuala Lumpur Kepong Berhad............................ 117,000 256,385
Leader Universal Holdings Berhad...................... 68,333 23,489
Lion Land Berhad...................................... 12,375 2,942
Magnum Corp. Berhad................................... 240,000 156,057
Malayan Banking Berhad................................ 187,000 479,413
Malayan Cement Berhad................................. 67,500 41,184
Malayan United Industries Berhad...................... 291,200 81,745
Malaysia Mining Corp. Berhad.......................... 106,000 42,205
Malaysian Airlines System............................. 114,000 84,250
Malaysian Oxygen Berhad............................... 23,000 59,295
Nestle (Malaysia) Berhad.............................. 38,000 194,842
New Straits Times Press (Malaysia) Berhad............. 32,000 35,565
Nylex (Malaysia) Berhad............................... 25,500 10,226
Oriental Holdings Berhad.............................. 53,760 81,617
Perusahaan Otomobil Nasional Berhad................... 81,000 109,051
RJ Reynolds Berhad.................................... 43,000 73,288
Resorts World Berhad.................................. 174,000 249,209
Rothmans of Pall Mall Malaysia Berhad................. 46,000 408,474
Shell Refining Co. Federation of Malaysia Berhad...... 48,000 94,184
Sime Darby Berhad (Malaysia).......................... 355,980 356,894
Sime UEP Properties Berhad............................ 66,000 47,642
Tan Chong Motor Holdings Berhad....................... 110,000 59,868
Telekom Malaysia Berhad............................... 487,500 1,089,217
Tenaga Nasional Berhad................................ 502,000 934,678
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UMW Holdings Berhad................................... 39,666 $ 37,495
United Engineering (Malaysia) Berhad.................. 87,000 80,744
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TOTAL -- MALAYSIA
(Cost $10,840,395)................................... 6,378,802
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SOUTH KOREA -- (2.5%)
COMMON STOCKS -- (2.5%)
*Asia Motors Co., Inc................................. 10,428 19,706
BYC Co., Ltd.......................................... 330 20,599
*Bank of Che Ju....................................... 4,500 12,390
Bank of Pusan......................................... 24,280 64,774
Boo Kook Securities Co., Ltd.......................... 8,775 21,984
Boram Bank Co., Ltd................................... 26,748 73,646
*Boram Securities Co., Ltd............................ 5,610 13,863
Byuck San Engineering and Construction Co., Ltd....... 3,360 12,239
Cheil Industrial, Inc................................. 20,731 91,468
Cheil Jedang Corp..................................... 6,090 124,976
*Chon Bang Co., Ltd................................... 2,470 77,722
*Choongnam Spinning Co., Ltd.......................... 11,910 49,290
Chosun Brewery Co., Ltd............................... 5,720 41,182
Chung Chong Bank Co., Ltd............................. 16,820 32,216
Commercial Bank of Korea Co., Ltd..................... 120,700 259,048
*Coryo Securities Co., Ltd............................ 17,660 39,865
Daelim Industrial Co., Ltd............................ 22,420 72,273
Daewoo Corp........................................... 80,810 275,701
Daeyu Securities Co., Ltd............................. 4,860 12,966
*Daishin Securities Co., Ltd.......................... 21,580 69,934
*Dong Sung Co., Ltd................................... 12,880 17,621
*Dong-Ah Securities Co., Ltd.......................... 6,720 15,170
Dong-Il Corp.......................................... 2,665 48,765
Dongbu Steel Co., Ltd................................. 11,000 63,206
*Dongsuh Securities Co., Ltd.......................... 24,780 86,661
Dongwon Securities Co., Ltd........................... 19,200 91,280
Doosan Construction & Engineering Co., Ltd............ 9,402 25,083
Doosan Glass Co., Ltd................................. 2,910 10,625
*Haitai Confectionery Co., Ltd........................ 13,270 20,538
*Han Yang Securities Co., Ltd......................... 9,030 19,458
*Han-Il Synthetic Fiber Industrial Co., Ltd........... 29,000 39,427
Hanil Bank............................................ 117,860 287,218
*Hanil Securities Co., Ltd............................ 10,800 24,841
*Hanjin Engineering and Construction Co., Ltd......... 12,030 29,625
Hankook Cosmetics Co., Ltd............................ 3,000 31,552
*Hanshin Construction................................. 7,540 2,321
Hansol Paper Co., Ltd................................. 1,726 14,611
*Hanwha Machinery Co., Ltd............................ 8,530 21,516
*Hanwha Securities Co., Ltd........................... 8,490 18,076
Hyundai International Merchant Bank................... 5,029 20,856
*Jinro, Ltd........................................... 9,213 13,156
*KLB Securities Co.................................... 9,460 24,914
Kangwon Bank Co., Ltd................................. 31,350 62,459
Keang Nam Enterprises Co., Ltd........................ 10,987 31,284
Kia Precision Works Co., Ltd.......................... 2,550 8,700
Kohap Co., Ltd........................................ 13,960 46,553
*Kohap, Inc........................................... 4,240 10,441
Kolon International Corp.............................. 14,798 36,315
Korea Exchange Bank................................... 117,150 343,587
Korea Express Co., Ltd................................ 10,220 82,144
Korea First Bank Inc., Ltd............................ 116,440 201,119
</TABLE>
4
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
Korea First Bank Securities........................... 9,850 $ 30,321
Korea Industrial Leasing Co., Ltd..................... 6,810 16,013
Korea Komho Petrochemical............................. 31,600 67,820
Korea Tungsten Mining Co.............................. 14,260 81,329
*Kuk Dong Engineering & Construction Co., Ltd......... 7,305 15,241
Kumho Construction & Engineering Co., Ltd............. 43,130 116,538
*Kumho Tire Co., Ltd.................................. 21,810 49,420
Kwangju Bank.......................................... 25,668 56,186
Kyong Nam Bank........................................ 5,970 16,335
*Kyungki Bank, Ltd.................................... 28,420 62,211
*Kyungnam Wool Textile Co., Ltd....................... 4,172 15,447
LG Merchant Banking Corp.............................. 4,260 15,007
*LG Securities Co., Ltd............................... 28,520 162,658
Mando Machinery Corp.................................. 4,052 89,390
Namkwang Engineering & Construction Co., Ltd.......... 2,370 3,546
Orient Co., Ltd....................................... 560 9,433
Oriental Chemical Industries Co., Ltd................. 7,960 70,786
Orion Electric Co., Ltd............................... 11,348 51,816
Peeres Cosmetics...................................... 1,060 9,970
Saehan Media Corp..................................... 9,020 61,085
Se Poong Corp......................................... 6,810 17,818
*Seoul Bank........................................... 116,440 192,158
*Seoul Securities Co., Ltd............................ 13,500 34,399
*Shin Han Securities Co., Ltd......................... 10,420 23,789
*Shin Sung Corp....................................... 6,290 12,532
Shin Wha Engineering & Construction Co., Ltd.......... 5,970 11,230
Shin Young Securities Co., Ltd........................ 6,660 39,294
*Shin-Ho Paper Manufacturing Co., Ltd................. 6,840 6,960
Shindongbang Corp..................................... 4,202 46,350
*Shinho Paper Co., Ltd................................ 14,430 11,351
Shinil Engineering Co., Ltd........................... 4,260 12,348
*Shinsung Tongsang Co., Ltd........................... 9,984 17,415
Shinwon Corp.......................................... 2,830 13,454
Ssang Bang Wool Co., Ltd.............................. 1,950 8,354
Ssangyong Corp........................................ 9,023 14,196
*Ssangyong Heavy Industy Co., Ltd..................... 5,700 7,213
*Sunkyong Industries, Ltd............................. 6,571 48,601
Tong Yang Cement Corp................................. 12,650 84,694
Tong Yang Merchant Bank............................... 4,462 14,918
*Tong Yang Securities Co., Ltd........................ 10,690 26,782
Tongkook Corp......................................... 7,400 11,706
Union Steel Manufacturing Co., Ltd.................... 3,000 133,134
Youngchang Akki Co., Ltd.............................. 3,200 28,457
------------
TOTAL -- SOUTH KOREA
(Cost $12,936,291)................................... 4,952,669
------------
THAILAND -- (1.3%)
COMMON STOCKS -- (1.3%)
Advanced Info Service Public Co., Ltd. (Foreign)...... 124,500 649,564
American Standard Sanitaryware (Thailand) Public Co.
Ltd. (Foreign)...................................... 4,150 23,714
Ayudhya Insurance Public Co., Ltd. (Foreign).......... 13,000 60,720
*Bangkok Land Public Co., Ltd. (Foreign).............. 256,400 15,926
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
*Bangkok Rubber Public Co., Ltd. (Foreign)............ 40,000 $ 5,466
*Bangkok Steel Industry Public Co., Ltd. (Foreign).... 84,000 3,965
Bank of Asia Public Co., Ltd. (Foreign)............... 188,100 64,258
Bank of Ayudhya Public Co., Ltd. (Foreign)............ 77,000 53,565
Banpu Public Co., Ltd. (Foreign)...................... 25,000 134,161
Charoen Pokphand Feedmill Public Co., Ltd.
(Foreign)........................................... 8,100 9,257
*Christiani and Nielson (Thai) Public Co., Ltd.
(Foreign)........................................... 56,779 1,552
First Bangkok City Bank Public Co., Ltd. (Foreign).... 460,200 205,803
Kiatnakin Finance and Securities Public Co., Ltd.
(Foreign)........................................... 36,000 17,217
Krung Thai Bank Public Co., Ltd. (Foreign)............ 616,000 202,782
Land and House Public Co., Ltd. (Foreign)............. 146,877 56,561
MK Real Estate Development Public Co., Ltd.
(Foreign)........................................... 23,625 4,578
Modernform Group Public Co., Ltd. (Foreign)........... 46,000 5,143
Nawarat Patanakarn Public Co., Ltd. (Foreign)......... 6,400 716
*New Imperial Hotel Public Co., Ltd. (Foreign)........ 32,000 14,311
*Padaeng Industry Public Co., Ltd (Foreign)........... 82,500 14,963
Post Publishing Public Co., Ltd. (Foreign)............ 23,000 18,429
Premier Enterprises Public Co., Ltd. (Foreign)........ 32,000 5,247
Saha Pathana Inter-Holding Public Co., Ltd.
(Foreign)........................................... 25,400 34,708
Securities One Public Co., Ltd. (Foreign)............. 69,000 7,029
Shangri-la Hotel Public Co., Ltd. (Foreign)........... 54,000 26,832
Shinawatra Computer and Communications Public Co.,
Ltd. (Foreign)...................................... 102,800 375,443
Siam City Bank Public Co., Ltd. (Foreign)............. 319,100 62,631
Siam City Cement Public Co., Ltd. (Foreign)........... 116,121 184,639
Siam Commercial Bank Public Co., Ltd. (Foreign)....... 1,000 1,640
Siam Pulp & Paper Co., Ltd. (Foreign)................. 48,000 33,689
*Sino-Thai Engineering and Construction Public Co.,
Ltd. (Foreign)...................................... 21,200 8,427
Srithai Superware Public Co., Ltd. (Foreign).......... 21,000 4,435
TPI Polene Public Co., Ltd. (Foreign)................. 271,162 26,948
*Tanayong Public Co., Ltd. (Foreign).................. 163,800 16,685
*Thai German Ceramic Industry Public Co., Ltd.
(Foreign)........................................... 58,000 18,733
Thai Glass Industries Public Co., Ltd. (Foreign)...... 60,000 85,714
</TABLE>
5
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
CONTINUED
<TABLE>
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
Thai Military Bank Public Co., Ltd. (Foreign)......... 204,000 $ 60,820
*Thai Packaging and Printing Public Co., Ltd.
(Foreign)........................................... 29,500 1,832
Thai Wah Public Co., Ltd. (Foreign)................... 21,000 2,609
*Unicord Public Co., Ltd. (Foreign)................... 85,000 845
------------
TOTAL COMMON STOCKS
(Cost $10,684,647)................................... 2,521,557
------------
INVESTMENT IN CURRENCY -- (0.0%)
*Thailand Baht (Cost $7,821).......................... 6,082
------------
TOTAL -- THAILAND
(Cost $10,692,468)................................... 2,527,639
------------
PHILIPPINES -- (1.0%)
COMMON STOCKS -- (1.0%)
*Aboitiz Equity Ventures, Inc......................... 5,782,000 169,326
*Alsons Consolidated Resources, Inc................... 2,954,000 96,686
*Anglo Philippine Holdings Corp....................... 890,000 7,666
Bacnotan Cement Corp.................................. 224,000 12,927
Bacnotan Consolidated Industries, Inc................. 124,085 53,439
*Bankard, Inc......................................... 446,000 21,000
*Cebu Holdings, Inc................................... 2,536,250 80,100
*Eei Corporation PHP.................................. 866,000 21,258
*Fil-Estate Land, Inc................................. 1,336,000 42,194
*House of Investments, Inc............................ 792,000 24,558
*Kepphil Shipyard, Inc................................ 1,730,000 39,239
*Kuok Philippine Properties, Inc...................... 4,410,000 82,300
*Negros Navigation Co., Inc........................... 955,000 24,403
*PDCP Development Bank................................ 121,000 36,477
*Philippine National Bank............................. 68,000 168,877
*Philippine Realty & Holdings Corp.................... 5,940,000 56,279
RFM Corp.............................................. 1,820,000 323,974
Republic Glass Holding Corp........................... 780,000 31,352
*Robinson's Land Corp. Series B....................... 2,376,000 96,868
<CAPTION>
SHARES VALUE+
------------ ------------
<S> <C> <C>
*SM Development Corp.................................. 4,136,400 $ 76,006
*Southeast Asia Cement Holdings, Inc.................. 6,728,000 110,105
*Steniel Manufacturing Corp........................... 713,000 6,244
*Trans-Asia Oil & Energy.............................. 1,140,000 20,947
Universal Robina Corp................................. 1,206,000 154,948
*Urban Bank, Inc...................................... 14,950 54,941
*Vitarich Corp........................................ 541,000 8,698
*William, Gothong & Aboitiz, Inc...................... 1,975,000 51,034
------------
TOTAL -- PHILIPPINES
(Cost $4,161,587).................................... 1,871,846
------------
UNITED STATES -- (0.0%)
COMMON STOCKS -- (0.0%)
Turkiye Garanti Bankasi A.S. ADR (Representing 200
Shares)
(Cost $1,767)...................................... 3,156 15,780
------------
FACE
AMOUNT
------------
(000)
TEMPORARY CASH
INVESTMENTS -- (2.7%)
Repurchase Agreement, Chase Manhattan Bank N.A.
5.35%, 12/01/97 (Collateralized by U.S. Treasury
Notes 5.875%, 02/15/00, valued at $5,341,875) to be
repurchased at $5,238,334.
(Cost $5,236,000).................................. $ 5,236 5,236,000
------------
TOTAL INVESTMENTS -- (100.0%)
(Cost $159,467,563)++................................ $194,115,890
------------
------------
- --------------------
+See Note B to Financial Statements.
*Non-Income Producing Securities
++The cost for federal income tax purposes is $161,023,993.
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1997
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<S> <C>
ASSETS:
Investments at Value (Cost of $159,468).............................................. $ 194,116
Cash................................................................................. 17
Receivable for Dividends and Interest................................................ 49
Receivable for Investment Securities Sold............................................ 647
Other Assets......................................................................... 8
---------
Total Assets................................................................... 194,837
---------
LIABILITIES:
Payable for Investment Securities Purchased.......................................... 19
Deferred Chilean Repatriation Tax.................................................... 889
Accrued Expenses..................................................................... 124
---------
Total Liabilities.............................................................. 1,032
---------
NET ASSETS applicable to $12,011,958 shares outstanding $.01 par value shares
(authorized 200,000,000 shares)...................................................... $ 193,805
---------
---------
NET ASSET VALUE........................................................................ $ 16.13
---------
---------
PUBLIC OFFERING PRICE PER SHARE........................................................ $ 16.21
---------
---------
NET ASSETS CONSIST OF:
Paid-In Capital...................................................................... $ 155,991
Undistributed Net Investment Income.................................................. 3,151
Undistributed Net Realized Gain...................................................... 191
Undistributed Net Realized Foreign Exchange Gain..................................... 6
Unrealized Net Foreign Exchange Gain................................................. 23
Deferred Chilean Repatriation Tax.................................................... (205)
Unrealized Appreciation of Investment Securities and Foreign Currency................ 34,648
---------
Total Net Assets............................................................... $ 193,805
---------
---------
</TABLE>
See accompanying Notes to Financial Statements.
7
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1997
(AMOUNTS IN THOUSANDS)
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (Net of Foreign Taxes Withheld and Repatriation of $530)................... $ 4,769
Interest............................................................................. 348
---------
Total Investment Income.......................................................... 5,117
---------
EXPENSES
Investment Advisory Services......................................................... 1,020
Accounting & Transfer Agent Fees..................................................... 205
Custodian's Fees..................................................................... 576
Legal Fees........................................................................... 105
Audit Fees........................................................................... 41
Directors' Fees and Expenses......................................................... 41
Organization Costs................................................................... 50
Other................................................................................ 54
---------
Total Expenses................................................................... 2,092
Less: Expenses Waived................................................................ (816)
---------
Net Expenses..................................................................... 1,276
---------
NET INVESTMENT INCOME................................................................ 3,841
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
Net Realized Gain on Investment Securities............................................... 197
Net Realized Gain on Foreign Currency Transactions....................................... 6
Change in Unrealized Appreciation (Depreciation) of:
Investment Securities and Foreign Currency........................................... (5,295)
Deferred Chilean Repatriation Tax.................................................... 1,568
Translation of Foreign Currency Denominated Amounts.................................. 19
---------
NET LOSS ON INVESTMENT SECURITIES AND FOREIGN CURRENCY............................... (3,505)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................................... $ 336
---------
---------
</TABLE>
See accompanying Notes to Financial Statements.
8
<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,
1997 1996
----------- -----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net Investment Income................................................................... $ 3,841 $ 2,844
Net Realized Gain on Investment Securities.............................................. 197 215
Net Realized Gain (Loss) on Foreign Currency Transactions............................... 6 (54)
Change in Unrealized Appreciation (Depreciation) of:
Investment Securities and Foreign Currency.......................................... (5,295) 16,151
Deferred Chilean Repatriation Tax................................................... 1,568 (1,773)
Translation of Foreign Currency Denominated Amounts................................. 19 32
----------- -----------
Net Increase in Net Assets Resulting from Operations................................ 336 17,415
----------- -----------
Distributions From:
Net Investment Income................................................................... (506) (3,037)
Net Realized Gain....................................................................... (209) (2,627)
----------- -----------
Total Distributions................................................................. (715) (5,664)
----------- -----------
Capital Share Transactions (1):
Capital Shares Issued................................................................... 19,000 --
Shares Issued in Lieu of Cash Distributions............................................. 715 5,664
----------- -----------
Net Increase from Capital Share Transactions........................................ 19,715 5,664
----------- -----------
Total Increase...................................................................... 19,336 17,415
----------- -----------
NET ASSETS
Beginning of Period..................................................................... 174,469 157,054
----------- -----------
End of Period........................................................................... $ 193,805 $ 174,469
----------- -----------
----------- -----------
(1) SHARE AMOUNTS:
Shares Issued........................................................................... 964 --
Shares Issued in Lieu of Cash Distributions............................................. 47 366
----------- -----------
1,011 366
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Financial Statements.
9
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR FEB. 2
ENDED ENDED ENDED ENDED TO
NOV. 30, NOV. 30, NOV. 30, NOV. 30, NOV. 30,
1997 1996 1995 1994 1993
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........ $ 15.86 $ 14.77 $ 17.10 $ 15.18 $ 10.00
---------- ---------- ---------- ---------- ----------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income..................... 0.33 0.26 0.28 0.19 0.16
Net Gains on Securities (Realized and
Unrealized)............................. 0.01 1.36 (2.29) 1.94 5.53
---------- ---------- ---------- ---------- ----------
Total from Investment Operations.......... 0.34 1.62 (2.01) 2.13 5.69
---------- ---------- ---------- ---------- ----------
EFFECT OF CAPITAL CHANGES................... -- -- -- -- (0.46)
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS
Net Investment Income..................... (0.05) (0.28) (0.29) (0.20) (0.05)
Net Realized Gains........................ (0.02) (0.25) (0.03) (0.01) --
---------- ---------- ---------- ---------- ----------
Total Distributions....................... (0.07) (0.53) (0.32) (0.21) (0.05)
---------- ---------- ---------- ---------- ----------
Net Asset Value, End of Period.............. $ 16.13 $ 15.86 $ 14.77 $ 17.10 $ 15.18
---------- ---------- ---------- ---------- ----------
---------- ---------- ---------- ---------- ----------
Total Investment Return (a)................. 2.12% 12.41% (11.73)% 14.02% 52.32%#
Net Assets, End of Period (thousands)....... $ 193,805 $ 174,469 $ 157,054 $ 153,095 $ 134,232
Ratio of Expenses to Average Net Assets..... 0.62%(b) 0.59%(b) 0.58%(b) 0.80%(b) 0.73%*
Ratio of Net Investment Income to Average
Net Assets................................ 1.87%(b) 1.64%(b) 2.10%(b) 1.18%(b) 1.59%*
Portfolio Turnover Rate..................... 0.49% 0.29% 5.73% 0.26% 0.28%*
Average Commission Rate (c)................. $ 0.0008 $ 0.0016 N/A N/A N/A
</TABLE>
- --------------
* Annualized
# Non-Annualized
(a) Based on per share net asset value. Through November 20, 1997, per share
market price was not readily determinable since fund shares were 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 years ended November 30, 1997 through 1994 would have
been 1.02%, 0.99%, 0.98% and 0.88%, respectively, and the ratios of net
investment income to average net assets for the years ended November 30,
1997 through 1994 would have been 1.47%, 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.
10
<PAGE>
DIMENSIONAL EMERGING MARKETS FUND INC.
NOTES TO FINANCIAL STATEMENTS
A. ORGANIZATION:
Prior to November 21, 1997, Dimensional Emerging Markets Fund Inc. (the
"Fund") was organized as a closed-end management investment company registered
under the Investment Company Act of 1940, as amended. Effective November 21,
1997 the Fund was reorganized as an open-end management investment company.
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 listed on a
securities exchange and for which market quotations are readily available are
valued at the last quoted sale price of the day or, if there is no such reported
sale, at the mean between the most recent bid and asked prices. Price
information on listed securities is taken from the exchange where the security
is primarily traded. Unlisted securities for which market quotations are readily
available are valued at the mean between the most recent bid and asked prices.
Securities for which quotations are not readily available are determined in good
faith at fair value using methods determined by 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 provision for federal taxes is required in the financial
statements.
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 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 open repurchase agreements were entered into on November 28, 1997.
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
11
<PAGE>
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, 1997, 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.
D. PURCHASES AND SALES OF SECURITIES:
For the year ended November 30, 1997, the Fund made the following purchases
and sales of investment securities other than U.S. Government securities and
temporary cash investments (amounts in thousands):
<TABLE>
<S> <C>
Purchases............................................... $ 21,099
Sales................................................... 991
</TABLE>
E. INVESTMENT TRANSACTIONS:
At November 30, 1997, gross unrealized appreciation and depreciation for
federal income tax purposes of investment securities and foreign currencies were
as follows (amounts in thousands):
<TABLE>
<S> <C>
Gross Unrealized Appreciation.......................... $ 70,508
Gross Unrealized Depreciation.......................... (37,416)
---------
Net.................................................... $ 33,092
---------
---------
</TABLE>
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, subject to its investment limitations, 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
date of borrowing. 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 Fund during the year ended November 30, 1997.
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.
12
<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, 1997, 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, 1997, 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, 1997, 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 16, 1998
13
<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.
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