<PAGE> 1
TO SHAREHOLDERS
EV Marathon Greater India Fund had a total return of -1.6 percent during the
period from its inception on May 2, 1994, through Dec. 31, 1994. That
performance was the result of a decline in net asset value per share from
$10.00 on May 2 to $9.84 on Dec. 31, 1994, and does not include the effect of
the Fund's maximum contingent deferred sales charge. In comparison, the Bombay
Stock Exchange Index - an unmanaged index of common stocks traded in the Indian
markets - had a return of 3.2 percent for the same period. The Indian markets
felt the impact of political uncertainties and were slowed by short-lived
concerns over a brief plague outbreak. Nevertheless, the Indian market managed
to outperform the U.S. and many of the world's established markets during the
period.
INDIAN ECONOMIC FUNDAMENTALS IMPROVED IN 1994...
India's economic expansion continued in 1994 and shows every sign of building
momentum in 1995. For example, Indian exports increased 35 percent in 1994
alone. Moreover the Indian government has worked hard to strengthen its fiscal
profile to demonstrate to the global business community that India is a
promising area to do business. As a result of those efforts, India's fiscal
deficit was reduced from 8.4 percent of GDP to 5.6 percent in the latest fiscal
year. Further progress is likely in the current year, according to the
Government Information Office. Meanwhile, India continues to attract large
foreign investment, nearly $5 billion since 1991, when the reform measures were
first introduced.
WITH AN EXPANDING MIDDLE CLASS, DEMAND RISES FOR CONSUMER GOODS AND SERVICES...
A large and well-educated middle class is one of India's most attractive
characteristics and is giving rise to a wide range of consumer industries. For
example, air travel, once the monopoly of government-run Indian Airlines, is
now serviced by six new scheduled airlines. With more time for leisure and
travel, the hotel and resort industry is working furiously to meet the demand
for new hotel space. And with a growing influx of western media images, there
is an increasing demand for consumer goods such as electronics, personal care
products, fashionware, and food and beverages. India's burgeoning middle class
is thus following a more affluent lifestyle. With foreign investment climbing
and the economy expected to grow 8 percent annually in coming years, those
trends should continue. Naturally, past performance is no guarantee of future
results, but the Portfolio is well-positioned to participate in India's growing
consumer expansion.
Sincerely,
[Signature] [Photo of James B. Hawkes]
James B. Hawkes
President
February 21, 1995
1
<PAGE> 2
MANAGEMENT DISCUSSION: ROBERT LLOYD GEORGE
[PHOTO OF GEORGE]
An interview with the Hon. Robert Lloyd George, President of Lloyd George
Management, and Investment Adviser to the South Asia Portfolio.
Q: ROBERT, HOW WOULD YOU EVALUATE THE INDIAN ECONOMY IN 1994?
A. We've seen an acceleration of growth in India in the past year as the
privatization campaign continues at a rapid pace and foreign investment flows
into the country. GDP is expected to grow by 5 percent in 1995, according to
the Finance Ministry. Industrial output is proceeding at a 7 percent growth
rate, well above the major industrialized countries, while the agricultural
side of the economy is growing at a respectable 3 percent. Meanwhile,
inflation, which at 10 percent has been a serious concern to many investors,
has subsided in recent months to the 8 percent level, and shows signs of
slowing further. A diminution of inflation suggests that interest rates -
recently around 14 percent - may have ample room to fall in the future. That
would have a beneficial effect on the economy and on the financial markets.
Moreover, the earnings outlook for Indian companies remains excellent.
Q: WHAT ABOUT THE REGION'S OTHER COUNTRIES?
A. While corporate earnings have continued to register significant growth, Sri
Lanka has been caught up in the Tamil insurgency in recent years and that has
been a major hurdle for the economy. Fortunately, the recent election results
demonstrated a desire by the population for a negotiated settlement.
Moreover, despite the political uncertainties, the government has been able
to promote strong economic growth while gradually making inroads on
inflation. Pakistan has also been somewhat unsettled politically, and the
recent poor cotton crop has led to increased costs for the textile industry
and higher inflation. Nonetheless, with a price-earnings multiple of only
16 times prospective 1995 earnings and corporate earnings growth of 25
percent, the Pakistan market remains a good value.
Q: WITH THAT AS A BACKDROP, HOW HAVE YOU STRUCTURED THE PORTFOLIO?
A. The Portfolio country allocations of common stock investments were as
follows at December 31: 80.4 percent in India, 7.7 percent in Pakistan, 7.3
percent in Sri Lanka and 4.6 percent in Bangladesh. In the early months of
the Portfolio's operation we focused initially on large cap blue chip
stocks for their liquidity. In recent months, as the Portfolio has neared
full investment, we have tailored the Portfolio to include a significant
amount of small-to-medium sized companies. These companies typically have
much faster growth rates than larger companies.
2
<PAGE> 3
AS INDIA'S ECONOMY GROWS SO DO ITS INFRASTRUCTURE NEEDS!
Power Generation: Capacity today: 76,700
Target in
Year 2000: 96,500
Telecommunications: Capacity today: 8 million lines
Target in
Year 2000: 20 million lines
Transportation: Air passengers
today: 10 million pass.
Target in
year 2000: 25 million pass.
This chart shows the likely future growth in demand for various parts of the
India infrastructure. The chart compares present-day capacity in the power,
telecom, and transport sectors with the likely demand targets for the year
2000. The power generation data is set against an icon of a set of power
lines. The telecom data is set against an icon of a telephone. The transport
data is set against an icon of an airplane. Source: India Ministry of Finance.
Q: CAN YOU GIVE SOME EXAMPLES OF RECENT PORTFOLIO PURCHASES?
A. Yes, one large investment was the engineering conglomerate Larsen and Toubro
Ltd. The company recently announced separate joint ventures with Chiyoda
Corporation of Japan and Sargent & Lundy of the U.S. These partnerships are
expected to lend Larsen and Toubro the necessary expertise to bid for large
turn-key projects ranging from petroleum refineries and oil and gas ventures
to petrochemical manufacturing and power generation. Another investment was
JCT Ltd., the second largest fiber manufacturer in India. Prices for
polyester staple fiber increased more than 9 percent in October alone, which
should benefit JCT as it meets a growing demand for its product.
Q: IS INDIA CONTINUING TO ATTRACT NEW INVESTMENT?
A. Absolutely. According to a report of the Indian Finance Ministry published
in November, 1994, foreign investment in the first five months of the fiscal
year amounted to $2.1 billion. Those figures do not take into consideration
the contributions of many large-scale projects such as power generation and
oil refining operations which will generate additional investments in coming
years. The ministry indicated that foreign investment for the full year
would likely surpass the $4.1 billion level achieved in fiscal year 1993-94.
3
<PAGE> 4
Q. WE OFTEN SPEAK OF THE INFRASTRUCTURE NEEDS OF DEVELOPING NATIONS. IS THAT
TRUE OF INDIA?
A. Yes, India has many infrastructure needs. First there is the need for power
generation. Government planners have indicated that India will need to
expand its generating capacity - currently 76,700 megawatts, according to
the Ministry of Power - by nearly 70 percent in the next several years to
meet the nation's short-term needs. In the area of telecom-munications,
India remains among the least advanced nations in the world with only 8
lines per thousand people, and 8 million lines nationwide. The
Telecommunications Ministry has plans to double that number to 16 million
lines by 1997, and to 20 million by the year 2000. Finally, there is a
tremendous need to upgrade India's road systems, which are underdeveloped
and tend to impede trade. The Surface Transport Ministry has ambitious plans
to increase and upgrade the number of roads while improving the quality of
India's transportation facilities. While these needs involve long-term
projects and complicated bureacracies, serious progress is being made.
Q. ARE ANY PORTFOLIO INVESTMENTS INVOLVED IN THESE PROJECTS?
A. Yes. In the area of electrical generation, which is needed to power the
plants and manufacturing facilities throughout the region, the Portfolio has
a large investment in Bharat Heavy Electrical. The company is poised to
benefit from an expected increase in capital investment. As India's largest
manufacturer of electrical generating equipment, Bharat has seen its sales
and profits surge in 1994. Interestingly, in addition to dominating the
domestic market, Bharat has edged out American and European competitors for
several large foreign orders for power plant equipment and industrial
products in such far-flung regions as Saudi Arabia and Nigeria.
Elsewhere, in the road-building sector, Gujarat Ambuja Cement should fare
well, benefiting from its low-cost structure. That provides a major
advantage in a country where distances are so vast and product transport
represents a critical variable in profit margins.
<TABLE>
<CAPTION>
THE PORTFOLIO'S COMMON STOCK INVESTMENTS
<S> <C>
India 80.4%
Pakistan 7.7%
Sri Lanka 7.3%
Bangladesh 4.6%
<FN>
- -----------------
Based on market value as of December 31, 1994, excluding
cash or fixed income securities.
</TABLE>
This chart shows the percentages of the Portfolio's equity holdings broken down
according to national weightings at 12/31/94. Source: Lloyd George Management
4
<PAGE> 5
Q: IN ADDITION TO INFRASTRUCTURE, WHAT OTHER AREAS MERIT CONSIDERATION?
A. The India region is rich in the mineral deposits and natural resources
that are critical for the manufacture of industrial metals. For example, the
eastern state of Orissa is rich in bauxite, the raw material that is refined
into alumina, which is in turn smelted into aluminum. Indian Aluminum Co., a
large holding of the Portfolio, is involved in a joint venture to build a
new $800 million refinery in Orissa. The venture is encouraging because the
increase in global economic activity will require an enormous supply of
aluminum for industrial output. Having survived a surfeit of supply from
Russia in recent years, aluminum prices have risen sharply in the past year,
recently passing the $1,800 a ton level. And, according to a study by CRU
International, a global consultant, worldwide demand is expected to grow by
4 percent annually for the rest of this decade, while capacity should grow
only by 1 percent. That should add to the bullish sentiments regarding
aluminum prices.
Q. WHERE HAVE YOU BEEN INVESTING IN PAKISTAN?
A. The natural resources theme was echoed in Pakistan. The Portfolio's
largest investment in Pakistan continues to be Pakistan State Oil Co. State
Oil is the country's largest petroleum distributor, with more than 2,000
retail outlets operating throughout the country. With the transportation
sector growing significantly in recent years - 7.4 percent annually in the
past decade - the demand for fuel products has surged and State Oil's sales
growth has reflected that increase. The company remains 25 percent
government-owned, which gives it an advantage over some of its competitors
in financing its oil inventories. According to the Ministry of Petroleum
and Natural Resources, Pakistan requires 280,000 barrels of oil each day but
currently produces only 60,000 barrels. In December, Prime Minister Bhutto
convened a conference in London seeking foreign investment in the energy
sector. State Oil is definitely a central player in the government's efforts
to build up its energy reserves and refining capacity.
RECENT U.S. INVESTMENTS* IN INDIA:
- - ANHEUSER-BUSCH - The St. Louis-based brewer has formed a partnership in
December with Shaw Wallace giving the Bombay-based company the right to
license, brew, market and distribute the world's best-selling Budweiser
brand throughout India.
- - CHOICE HOTELS - The Silver Spring, Md. hotel chain, which has opened 15
hotels in India in the past two years, announced ambitious expansion plans,
including locating at least 80 hotels in India by the year 2000.
- - GENERAL ELECTRIC - with U.S. partners Bechtel Enterprises and Enron
Development, the company announced a funding agreement in November to build
a 2,015 megawatt gas-fired power plant in Maharashtra state.
*These companies are not owned by the Portfolio.
5
<PAGE> 6
<TABLE>
<CAPTION>
SURGING INDIAN EXPORTS HELP TO FUEL
INDIA'S ECONOMIC ENGINE!
<S> <C>
1991 $14.5 Billion
1992 $17.0 Billion
1993 $22.0 Billion
1994 $24.0 Bill-Est
This data is set in columns against a
colored map of the India region. It
shows the growth in India's exports
over the past four years.
Source: Indian Ministry of Commerce
</TABLE>
Q. SRI LANKA IS THE PORTFOLIO'S THIRD-LARGEST WEIGHTING. HOW HAS THE CLIMATE
CHANGED THERE SINCE THE RECENT ELECTION?
A. The victory of the moderate factions in the August general election was
viewed favorably by most investors in Sri Lanka. The sense among most market
observers is that, with an ease in the fighting, Sri Lanka will be able to
reduce its defense budget - currently around 14 percent of total
expenditures - and put those funds to more economically productive uses.
While there has been sporadic violence since the election, it's expected
that peace talks will continue. Meanwhile, corporate earnings continue to
register solid growth.
Q. WHERE HAVE YOU INVESTED IN SRI LANKA?
A. John Keells Holdings remains the largest Sri Lankan holding. This
conglomerate has 60 subsidiaries with business interests ranging from
tourism, plantations, and real estate to financial services, industrial
exports, and domestic trade. The company is rich in real estate holdings,
which form a strong asset base. In recent months, the company issued a GDR
that raised its profile among global investors and expanded its capital
base. In the past fiscal year, the company realized 21 percent revenue
growth and 25 percent earnings growth. Now that the insurgency among the
militants has abated, the Sri Lankan tourism industry is likely to improve
markedly. That could lead to a further boost in the earnings power of John
Keells.
Q. ROBERT, LOOKING AHEAD, WHAT IS YOUR CURRENT OUTLOOK FOR THE GREATER INDIA
MARKETS?
A. The India region's economy continues to develop at an impressive pace.
Indian companies are posting excellent earnings growth that exceeds that of
companies in the more mature, industrialized nations. Unlike other emerging
markets, the Indian markets have avoided the speculative frenzy that often
accompanies rapid growth. That is a healthy sign for the future. Of course,
past perform-ance is no guarantee of future results. And, as with any global
investment, there may be a higher degree of inflation, as well as political
and currency risks. Finally, this market may encounter more volatility than
more established markets. But, in my view, the India growth story is
proceeding on schedule. India remains one of the world's great
opportunities.
6
<PAGE> 7
<TABLE>
<CAPTION>
COMPARISON OF CHANGE IN VALUE OF A $10,000 INVESTMENT IN
EV MARATHON GREATER INDIA FUND AND THE BOMBAY STOCK EXCHANGE INDEX
From May 31, 1994, through December 31, 1994
EV Marathon Bombay
Greater India Stock Exchange
Date Fund Index
---- ------------- --------------
<S> <C> <C>
5/94 10000 10000
6/94 10080 10565
7/94 10270 10805
8/94 11349 11722
9/94 10649 11115
10/94 10599 11019
11/94 10410 10685
12/94 9830 10162
<FN>
- ---------------
<CAPTION>
Cumulative Life of
Total Return Fund*
- ------------- -------
<S> <C>
With CDSC -6.5%
Without CDSC -1.6%
EV MARATHAN GREATER INDIA FUND: Assumes entire investment was redeemed on
12/31/94, and maximum applicable contingent deferred sales charge (CDSC) was
deducted from redemption proceeds.
Past performance is not indicative of future results. Investment returns and
principal will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost. Source: Towers Data Systems,
Bethesda, MD.
* Investment operations commenced on 5/2/94.
</TABLE>
FUND PERFORMANCE
In accordance with guidelines issued by the Securities and Exchange Commission,
we are including a performance chart that compares your Fund's total return
with that of a broad-based investment index. The lines on the chart represent
the total returns of $10,000 hypothetical invest-ments in EV Marathon Greater
India Fund, and the unmanaged Bombay Stock Exchange Index.
TOTAL RETURN FIGURES
The solid line on the chart represents the Fund's performance at net asset
value. The Fund's total return figure reflects Fund expenses and transaction
costs. The second dollar figure for the Fund reflects the Fund's maximum
applicable deferred sales charge (CDSC), deducted at redemption as follows:
5% - 1st and 2nd years; 4% - 3rd year; 3% - 4th year; 2% - 5th year; 1% - 6th
year.
The dotted line represents the performance of the Bombay Stock Exchange Index,
a broad-based, widely recognized unmanaged index of common stocks traded in
India. The Index's total return does not reflect any commissions or expenses
that would be incurred if an investor individually purchased or sold the
securities represented in the Index.
7
<PAGE> 8
<TABLE>
EV MARATHON GREATER INDIA FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investment in South Asia Portfolio, at value (Note 1A)
(identified cost, $41,321,760) $38,785,372
Receivable for Fund shares sold 233,353
Deferred organization expenses (Note 1D) 61,142
-----------
Total assets $39,079,867
LIABILITIES:
Payable for Fund shares redeemed $ 133,760
Payable to affiliate
Custodian fees 231
Trustees' fees 42
Accrued expenses 21,239
-----------
Total liabilities 155,272
-----------
NET ASSETS for 3,955,995 shares of beneficial interest outstanding $38,924,595
===========
SOURCES OF NET ASSETS:
Paid-in capital $41,628,751
Accumulated undistributed net realized gain 89,276
Accumulated net investment loss (257,044)
Unrealized depreciation of investments from Portfolio (2,536,388)
-----------
Total $38,924,595
===========
NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PRICE (NOTE 6) PER SHARE
($38,924,595 / 3,955,995 shares of beneficial interest) $9.84
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE> 9
<TABLE>
STATEMENT OF OPERATIONS
For the period from the start of business, May 2, 1994, to December 31, 1994
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (Note 1B):
Dividend income allocated from Portfolio (net of foreign tax, $37,484) $ 162,400
Interest income allocated from Portfolio 41,867
Expenses allocated from Portfolio (200,048)
----------
Net investment income from Portfolio $ 4,219
Expenses -
Management fee (Note 2) $ 45,072
Compensation of Trustees not members of the Administrator's organization 83
Custodian fees (Note 2) 2,920
Distribution fees (Note 5) 135,217
Printing and postage 22,026
Transfer and dividend disbursing agent fees 19,114
Amortization of organization expenses (Note 1D) 8,858
Registration fees 3,567
Legal and accounting services 779
Miscellaneous 23,627
---------
Total expenses 261,263
----------
Net investment loss $ (257,044)
----------
Realized and Unrealized Gain (Loss) from Portfolio:
Net realized loss from investment transactions (identified cost basis) $ (7,586)
---------
Net realized gain on foreign currency transactions 96,862
---------
Net realized gain $ 89,276
Change in unrealized depreciation (2,536,388)
----------
Net realized and unrealized loss $(2,447,112)
----------
Net decrease in net assets from operations $(2,704,156)
==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE> 10
FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
For the period from the start of business, May 2, 1994, to December 31, 1994
- -----------------------------------------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment loss $ (257,044)
Net realized gain from Portfolio 89,276
Change in unrealized depreciation from Portfolio (2,536,388)
-----------
Net decrease in net assets from operations $ (2,704,156)
-----------
Transactions in shares of beneficial interest (Note 3) -
Proceeds from sale of shares $ 45,817,041
Cost of shares redeemed (4,188,290)
-----------
Increase in net assets from Fund share transactions $ 41,628,751
-----------
Net increase in net assets $ 38,924,595
NET ASSETS:
At beginning of period --
-----------
At end of period (including net investment loss of $257,044) $ 38,924,595
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE> 11
<TABLE>
FINANCIAL HIGHLIGHTS
For the period from the start of business, May 2, 1994, to December 31, 1994
- -----------------------------------------------------------------------------------------------------------
<S> <C>
NET ASSET VALUE, beginning of period $ 10.000
---------
Income (Loss) From Investment Operations:
Net investment loss $ (0.065)
Net realized and unrealized loss on investments (0.095)
---------
Total loss from investment operations $ (0.160)
---------
NET ASSET VALUE, end of period $ 9.840
=========
TOTAL RETURN (2) (1.60)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $ 38,925
Ratio of net expenses to average net assets (1) 2.54%+
Ratio of net investment loss to average net assets (1.42)%+
<FN>
(1) Includes the Fund's share of South Asia Portfolio's allocated expenses.
(2) Total return is calculated assuming a purchase at net asset value on the first day and a sale at
the net asset value on the last day of the period. Dividends and distributions, if any, are assumed
to be reinvested at the net asset value on the payable date.
+% Annualized
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Marathon Greater India Fund (the Fund) is a diversified series of Eaton
Vance Special Investment Trust (the Trust). The Trust is an entity of the type
commonly known as a Massachusetts business trust and is registered under the
Investment Company Act of 1940, as amended, as an open-end management
investment company. The Fund invests all of its investable assets in interests
in South Asia Portfolio (the Portfolio), a New York Trust, having the same
investment objective as the Fund. The value of the Fund's investment in the
Portfolio reflects the Fund's proportionate interest in the net assets of the
Portfolio (68.2% at December 31, 1994). The performance of the Fund is directly
affected by the performance of the Portfolio. The financial statements of the
Portfolio, including the portfolio of investments, are included elsewhere in
this report and should be read in conjunction with the Fund's financial
statements. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements. The policies are in conformity with generally accepted accounting
principles.
A. INVESTMENT VALUATIONS - Valuation of securities by the Portfolio is
discussed in Note 1 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
B. INCOME - The Fund's net investment income consists of the Fund's pro rata
share of the net investment income of the Portfolio, less all actual and
accrued expenses of the Fund determined in accordance with generally accepted
accounting principles.
C. FEDERAL TAXES - The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders each year all of its net investment income, and any
net realized capital gains. Accordingly, no provision for federal income or
excise tax is necessary. At December 31, 1994, the Fund, for federal income tax
purposes had a capital loss carryover of $6,809 which will reduce the taxable
income arising from future net realized gains on investments, if any, to the
extent permitted by the Internal Revenue Code, and thus will reduce the amount
of the distributions to shareholders which would otherwise be necessary to
relieve the Fund of any liability for federal income or excise tax. Such
capital loss carryover will expire on December 31, 2002.
D. DEFERRED ORGANIZATION EXPENSES - Costs incurred by the Fund in connection
with its organization, including registration costs, are being amortized on the
straight-line basis over five years.
E. DISTRIBUTIONS TO SHAREHOLDERS - It is the present policy of the Fund to make
(a) at least one distribution annually (normally in December) of all or
substantially all of the investment income allocated to the Fund by the
Portfolio, if any, less the Fund's direct and allocated expenses and (b) at
least one distribution annually of all or substantially all of the net realized
capital gains allocated by the Portfolio to the Fund, if any (reduced by any
available capital loss carryforwards from prior years). Shareholders may
reinvest all distributions in shares of the Fund without a sales charge at the
per share net asset value as of the close of business on the record date.
F. DISTRIBUTION COSTS - For book purposes, commissions paid on the sale of Fund
shares and other distribution costs are charged to operations. For tax
purposes, commissions paid were charged to paid-in capital prior to November
16, 1994 and subsequently charged to operations. The change in the tax
accounting practice was prompted by a recent Internal Revenue Service ruling
and has no effect on either the Fund's current yield or total return (Note 5).
12
<PAGE> 13
- --------------------------------------------------------------------------------
(2) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The management fee is earned by Eaton Vance Management (EVM) as compensation
for management and administration of the business affairs of the Fund. The fee
is based on a percentage of average daily net assets. For the period from the
start of business, May 2, 1994 to December 31, 1994 the fee was equivalent to
0.25% (annualized) of the Fund's average net assets for such period and
amounted to $45,072. Except as to Trustees of the Fund who are not members of
EVM's organization, officers and Trustees receive remuneration for their
services to the Fund out of such management fee. Investors Bank & Trust Company
(IBT), an affiliate of EVM, serves as custodian of the Fund. Pursuant to the
custodian agreement, IBT receives a fee reduced by credits which are determined
based on the daily average cash balances the Fund maintains with IBT. Certain
officers and Trustees of the Fund and the Portfolio are officers and
directors/trustees of the above organizations. In addition, investment adviser,
administrative fees, and custody fees are paid by the Portfolio to EVM and its
affiliates. See Note 2 of the Portfolio's Notes to Financial Statements which
are included elsewhere in this report.
- -------------------------------------------------------------------------------
(3) SHARES OF BENEFICIAL INTEREST
The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in Fund shares for the period from the start of business, May 2,
1994, to December 31, 1994 were as follows:
<TABLE>
<S> <C>
Sales 4,356,983
Redemptions (400,988)
---------
Net increase 3,955,995
=========
</TABLE>
- --------------------------------------------------------------------------------
(4) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio aggregated
$45,393,992 and $4,165,727, respectively.
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
(5) DISTRIBUTION PLAN
The Fund has adopted a distribution plan (the "Plan#) pursuant to Rule 12b-1
under the Investment Company Act of 1940. The Plan requires the Fund to pay the
Principal Underwriter, Eaton Vance Distributors, Inc. (EVD) amounts equal to
1/365 of 0.75% of the Fund's daily net assets, for providing ongoing
distribution services and facilities to the Fund. The Fund will automatically
discontinue payments to EVD during any period in which there are no outstanding
Uncovered Distribution Charges, which are equivalent to the sum of (i) 5% of
the aggregate amount received by the Fund for shares sold plus, (ii)
distribution fees calculated by applying the rate of 1% over the prevailing
prime rate to the outstanding balance of Uncovered Distribution Charges of EVD
reduced by the aggregate amount of contingent deferred sales charges (see Note
6), daily amounts theretofore paid to EVD and amounts theretofore paid or
payable to EVD by Lloyd George Investment Management (Bermuda) Limited,
investment adviser for the Portfolio (the Adviser), in consideration of EVD's
distribution effort. The amount payable to EVD by the Fund with respect to each
day is accrued on such day as a liability of the Fund and, accordingly, reduces
the Fund's net assets. The Fund accrued $135,217 as payable to EVD for the
period from May 2, 1994 (start of business) to December 31, 1994, representing
0.75% of average daily net assets. The amounts paid or payable by the Adviser
to EVD are equivalent to 0.15% of the Fund's annual average net assets and are
made from the Adviser's own resources, not the Fund's net assets. At December
31, 1994, the amount of Uncovered Distribution Charges of EVD calculated under
the Plan was approximately $1,843,000.
In addition, the Plan authorizes the Fund to make payments of service
fees to the Principal Underwriter, Authorized Firms and other persons in
amounts not exceeding 0.25% of the Fund's average daily net assets for each
fiscal year. The Trustees have initially implemented the Plan by authorizing
the Fund to make quarterly payments of service fees to the Principal
Underwriter and Authorized Firms in amounts not expected to exceed 0.25% per
annum of the Fund's average daily net assets based on the value of Fund shares
sold by such persons and remaining outstanding for at least one year, and that
payment of these service fees shall commence with the quarter ending December
31, 1995. Service fee payments will be made for personal services and/or the
maintenance of shareholder accounts. Service fees are separate and distinct
from the sales commissions and distribution fees payable by the Fund to EVD,
and, as such, are not subject to automatic discontinuance where there are no
outstanding Uncovered Distribution Charges of EVD.
Certain officers and Trustees of the Fund are officers or directors
of EVD.
- --------------------------------------------------------------------------------
(6) CONTINGENT DEFERRED SALES CHARGE
A contingent deferred sales charge (CDSC) is imposed on any redemption of Fund
shares made within six years of purchase. Generally, the CDSC is based upon the
lower of the net asset value at date of redemption or date of purchase. No
charge is levied on shares acquired by reinvestment of dividends or capital
gain distributions. The CDSC is imposed at declining rates that begin at 5% in
the case of redemptions in the first and second year after purchase (6% and 5%,
respectively, for shares purchased prior to August 1, 1994) declining one
percentage point each subsequent year. No CDSC is levied on shares which have
been sold to EVM or its affiliates or to their respective employees or clients.
CDSC charges are paid to EVD to reduce the amount of Uncovered Distribution
Charges calculated under the Fund's Distribution Plan. CDSC charges received
when no Uncovered Distribution Charges exist will be credited to the Fund. EVD
received approximately $44,400 of CDSC paid by shareholders for the period from
May 2, 1994 (start of business) to December 31, 1994.
14
<PAGE> 15
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Trustees and Shareholders of
Eaton Vance Special Investment Trust:
We have audited the accompanying statement of assets and liabilities of EV
Marathon Greater India Fund (one of the series constituting Eaton Vance Special
Investment Trust) as of December 31, 1994, and the related statement of
operations, the statement of changes in net assets, and the financial
highlights for the period from the start of business, May 2, 1994, to December
31, 1994. These financial statements and financial highlights are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based upon our
audit.
We conducted our audit 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. 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 audit provides a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the EV Marathon
Greater India Fund series of the Eaton Vance Special Investment Trust at
December 31, 1994, the results of its operations, the changes in its net assets
and its financial highlights for the period from the start of business, May 2,
1994, to December 31, 1994, in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 8, 1995
15
<PAGE> 16
South Asia Portfolio
Portfolio of Investments
December 31, 1994
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Shares Value
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common Stocks - 86.8%
BANGLADESH, 4.0%
Apex Spinning & Knitting 40,000 $ 447,732
Apex Tannery Ltd. 20,000 466,474
Eastern Housing Ltd. 90,300 497,110
Monno Fabrics Ltd. 133,000 495,159
Square Pharmaceuticals Ltd. 16,000 357,408
-----------
$ 2,263,883
-----------
INDIA, 69.8%
Alacrity Housing Ltd. 321,000 $ 480,954
Bellary Steels & Alloys 310,000 474,362
Bharat Heavy Electricals 125,000 702,325
Bombay Dyeing & Manufacturing GDR 105,000 1,378,125
BPL Engineering Ltd. 150,000 430,365
Century Textiles & Industrial GDR 5,316 877,140
DCL Polyesters 224,600 329,353
Enkay Texofood Industries 185,000 184,297
Essar Gujarat 240,500 728,354
E.I.D. Parry (India) Ltd. GDR 30,000 161,400
Flex Industries 6,400 51,516
Flex Industries (rights) (1) 3,200 38,765
Great Eastern Shipping GDR 40,000 440,000
Gujarat Ambuja Cement 18,000 177,883
Himachal Futuristic Community 220,900 1,003,482
Himachal Telematics Ltd. 125,000 328,750
Hoechst India Ltd. 100,000 1,243,280
Hotel Leela Venture Ltd. 250,000 1,295,075
Hotel Leela Venture (rights) (1) 21,180 101,278
IFB Industries Ltd. 107,800 996,600
Innovation Medi Equipment Ltd. 150,000 248,655
Indian Aluminum Co. GDR 60,000 630,000
Indo Gulf Fertilizer GDR 190,000 527,250
Indo Gulf Fertilizers 100,000 298,860
Infosys Technologies Ltd. 72,500 1,086,274
JCT Limited GDR 75,000 1,218,750
Karur Vysya Bank 260,000 812,273
KEC International Ltd. 100,000 956,370
Kotak Mahindra Finance Ltd. 205,000 1,960,558
Larsen & Toubro 102,500 849,571
Madras Refinery Ltd. 253,550 909,331
</TABLE>
16
<PAGE> 17
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
SHARES VALUE
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Mahindra & Mahindra 120,000 $ 1,338,912
Murudeshnar Ceramics Ltd. 167,200 692,926
Nicholas Pirame l27,950 490,058
Orchid Chemicals & Pharma 125,000 687,387
Paper Products Ltd. 50,000 294,880
Punjab Wireless Systems 100,000 1,083,880
Ranbaxy Laboratories Ltd. GDR 60,000 1,335,000
Rubber Products 132,000 173,580
S & S Industries & Enterprise 356,000 468,140
Sakthi Sugars 150,000 478,185
Southern Petrochemical GDR 45,000 483,750
State Bank of India - New 205,000 1,462,244
Tata Chemicals 128,850 1,704,646
Tata Engineering & Locomotive (units) 85,714 1,757,137
Tauraus Mutual Fund 320,000 102,016
Thiru Aroonan Sugars 100,000 422,390
Triveni Engineering 190,850 1,277,664
TTG Industries Ltd. 66,200 316,555
Tube Investments of India GDR 76,000 513,000
T.V.S. Suzuki 203,550 1,362,685
Usha Beltron Ltd. GDR 103,450 879,325
W.S. Industries Ltd. 102,500 196,051
Zuari Agrochemicals 90,000 1,226,538
----------
$39,668,145
PAKISTAN, 6.7%
Adamjee Insurance Co. 70,000 $ 423,150
Chakwal Cement Company Ltd. GDR 55,000 460,900
D.G. Xhan Cement Company Ltd. 392,150 790,182
Maple Leaf Cement Factory 45,760 85,886
Maple Leaf Cement Factory (rights) (1) 91,520 67,669
Nishat Chuhian 255,000 140,887
Pakistan State Oil Co. Ltd. 96,100 1,386,723
Pakistan Telecommunications 620 81,607
Searle Pakistan 123,280 374,623
----------
$ 3,811,627
----------
</TABLE>
17
<PAGE> 18
- -----------------------------------------------------------------------
Portfolio of Investments (continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
Shares Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
SRI LANKA, 6.3%
Dev Fin Corp of Ceylon 26,800 $ 270,052
Hayleys 135,840 525,619
John Keells Holdings 67,900 369,471
John Keells Holdings Ltd. GDR 74,000 703,000
Kelani Tyres 537,400 444,053
National Development Bank 53,900 450,798
Royal Ceramics 359,000 419,635
Royal Ceramics (rights) (1) 35,900 0
Sampath Bank 186,000 189,292
Vanik Corporation 183,000 220,368
Vanik Corporation (rights) (1) 45,750 29,384
-----------
$ 3,621,672
-----------
TOTAL COMMON STOCKS (IDENTIFIED COST, $53,072,065) $49,365,327
-----------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
BONDS - 2.2% PRINCIPAL AMOUNT
(000 OMITTED) VALUE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Ballarpur Industries Ltd. Conv., 4s, 4/1/99 U.S. $500 $ 491,250
Gujarat Ambuja, 3s, 6/30/99 U.S. $500 742,500
-----------
TOTAL BONDS (IDENTIFIED COST, $1,255,000) $ 1,233,750
-----------
TOTAL INVESTMENTS (IDENTIFIED COST, $54,327,065) 89.0% $50,599,077
Other Assets, less Liabilities, 11.0% 6,254,513
-----------
NET ASSETS, 100% $56,853,590
===========
GDR -- Global depository receipt
(1)Non-income producing security.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE> 19
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
- ----------------------------------------------------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments, at value (Note 1A) (Identified cost, $54,327,065) $ 50,599,077
Cash 7,016,379
Foreign currency, at value (Identified cost, $146,495) 146,720
Receivable for investments sold 44,763
Dividends and interest receivable 150,567
Deferred organization expenses (Note 1C) 76,049
------------
Total assets $ 58,033,555
LIABILITIES:
Payable for investments purchased $ 1,034,794
Payable to affiliates:
Custodian fee 3,335
Trustees fees 1,250
Accrued expenses 140,586
-----------
Total liabilities 1,179,965
------------
NET ASSETS applicable to investors' interest in Portfolio $ 56,853,590
============
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and withdrawals $ 60,581,353
Net unrealized depreciation of investments and foreign currency
(computed on the basis of indentified cost) (3,727,763)
------------
TOTAL $ 56,853,590
============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE> 20
FINANCIAL STATEMENTS (CONTINUED)
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
For the period from the start of business, May 2, 1994, to December 31, 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Income -
Dividends (net of foreign taxes, $56,041) $ 242,737
Interest 65,501
------------
Total income $ 308,238
Expenses -
Investment adviser fee (Note 2) $ 197,675
Administration fees (Note 2) 65,898
Compensation of Trustees not members of
Investment Advisers or Administrator's organization 8,750
Custodian fee (Note 2) 18,587
Amortization of organization expenses (Note 1C) 11,016
Legal and accounting services 1,440
Registration costs 115
Miscellaneous 3,108
-------------
Total expenses 306,589
------------
Net investment income $ 1,649
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) -
Net realized loss on investments (identified cost basis) $ (12,194)
Net realized gain on foreign currency transactions 149,944
-------------
Net realized gain $ 137,750
Net unrealized appreciation (depreciation) -
Net unrealized depreciation of investments (identified cost basis) $ (3,727,988)
Net unrealized appreciation of foreign currency 225
-------------
Net unrealized depreciation (3,727,763)
------------
Net realized and unrealized loss on investments $ (3,590,013)
------------
Net decrease in net assets from operations $ (3,588,364)
============
</TABLE>
See notes to financial statements
20
<PAGE> 21
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
For the period from the start of business, May 2, 1994, to December 31, 1994
- ----------------------------------------------------------------------------------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations -
Net investment income $ 1,649
Net realized gain on investments and foreign currency transactions 137,750
Change in unrealized depreciation of investments (3,727,763)
------------
Decrease in net assets from operations $ (3,588,364)
------------
Capital transactions:
Contributions $ 67,765,119
Withdrawals (7,423,185)
------------
Increase in net assets resulting from capital transactions $ 60,341,934
------------
Net increase in net assets $ 56,753,570
NET ASSETS:
At beginning of period 100,020
------------
At end of period $ 56,853,590
============
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
SUPPLEMENTARY DATA
For the period from the start of business, May 2, 1994, to December 31, 1994
- ----------------------------------------------------------------------------------------------
<S> <C>
ANNUALIZED RATIOS (As a percentage of average net assets):
Expenses 1.16%+
Net investment income 0.01%+
PORTFOLIO TURNOVER 1%
+ Annualized
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
21
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
South Asia Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940 as a diversified, open-end investment company which was
organized as a trust under the laws of the State of New York on January 18,
1994. The Declaration of Trust permits the Trustees to issue interests in the
Portfolio. The following is a summary of the significant accounting policies of
the Portfolio. The policies are in conformity with generally accepted
accounting principles.
A. INVESTMENT VALUATIONS - Marketable securities, including options, that are
listed on foreign or U.S. securities exchanges or in the NASDAQ National Market
System are valued at closing sale prices or, if there were no sales, at the
mean between the closing bid and asked prices therefor on the exchange where
such securities are principally traded. Futures positions on securities or
currencies are generally valued at closing settlement prices. Unlisted or
listed securities for which closing sale prices are not available are valued at
the mean between the latest bid and asked prices. Short term debt securities
with a remaining maturity of 60 days or less are valued at amortized cost.
Other fixed income and debt securities, including listed securities and
securities for which price quotations are available, will normally be valued on
the basis of valuations furnished by a pricing service. Investments for which
valuations or market quotations are unavailable are valued at fair value using
methods determined in good faith by or at the direction of the Trustees.
B. FEDERAL TAXES - The Portfolio is treated as a partnership for U.S. Federal
tax purposes. No provision is made by the Portfolio for federal or state taxes
on any taxable income of the Portfolio because each investor in the Portfolio
is individually responsible for the payment of any taxes on its share of such
income. Since some of the Portfolio's investors are regulated investment
companies that invest all or substantially all of their assets in the
Portfolio, the Portfolio normally must satisfy the applicable source of income
and diversification requirements, (under the U.S. Internal Revenue Code), in
order for its investors to satisfy them. The Portfolio will allocate, at least
annually among its investors, each investor's distributive share of the
Portfolio's net investment income, net realized capital gains, and any other
items of income, gain, loss, deduction or credit.
C. DEFERRED ORGANIZATION EXPENSES - Costs incurred by the Portfolio in
connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years.
D. FINANCIAL FUTURES CONTRACTS - Upon the entering of a financial futures
contract, the Portfolio is required to deposit ("initial margin") either in
cash or securities an amount equal to a certain percentage of the purchase
price indicated in the financial futures contract. Subsequent payments are made
or received by the Portfolio ("margin maintenance") each day, dependent on
daily fluctuations in the value of the underlying security, and are recorded
for book purposes as unrealized gains or losses by the Portfolio. Should
interest or currency exchange rates move unexpectedly, the Portfolio may not
achieve the anticipated benefits of the financial futures contracts and may
realize a loss. If the Portfolio enters into a closing transaction, the
Portfolio will realize, for book purposes, a gain or loss equal to the
difference between the value of the financial futures contract to sell and
financial futures contract to buy.
22
<PAGE> 23
- --------------------------------------------------------------------------------
E. FOREIGN CURRENCY TRANSLATION - Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases and
sales of foreign investment securities and income and expenses are converted
into U.S. dollars based upon currency exchange rates prevailing on the
respective dates of such transactions. Recognized gains or losses on investment
transactions attributable to foreign currency rates are recorded for financial
statement purposes as net realized gains and losses on investments. That
portion of unrealized gains and losses on investments that result from
fluctuations in foreign currency exchange rates are not separately disclosed.
F. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS - The Portfolio may enter into
forward foreign currency exchange contracts for the purchase or sale of a
specific foreign currency at a fixed price on a future date. Risks may arise
upon entering these contracts from the potential inability of counterparties to
meet the terms of their contracts and from movements in the value of a foreign
currency relative to the U.S. dollar. The Portfolio will enter into forward
contracts for hedging purposes as well as non-hedging purposes. The forward
foreign currency exchange contracts are adjusted by the daily exchange rate of
the underlying currency and any gains or losses are recorded for financial
statement purposes as unrealized until such time as the contracts have been
closed or offset.
G. OTHER - Investment transactions are accounted for on the date the
investments are purchased or sold. Dividend income is recorded on the
ex-dividend date. However, if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as the Portfolio is informed of
the ex-dividend date. Interest income is recorded on the accrual basis.
(2) INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
The investment adviser fee is earned by Lloyd George Investment Management
(Bermuda) Limited (the Adviser) as compensation for management and investment
advisory services rendered to the Portfolio. Under the advisory agreement, the
Adviser receives a monthly fee of 0.0625% (0.75% annually) of the average daily
net assets of the Portfolio up to $500,000,000, and at reduced rates as daily
net assets exceed that level.For the period from the start of business, May 2,
1994 to December 31, 1994 the annualized adviser fee was 0.75% of average net
assets. In addition, an administrative fee is earned by Eaton Vance Management
(EVM) for managing and administering the business affairs of the Portfolio.
Under the administration agreement, EVM earns a monthly fee in the amount of
1/48th of 1% (equal to 0.25% annually) of the average daily net assets of the
Portfolio up to $500,000,000, and at reduced rates as daily net assets exceed
that level. For the year ended December 31, 1994, the administration fee was
0.25% (annualized) of average net assets. Except as to Trustees of the
Portfolio who are not members of the Adviser or EVM's organization, officers
and Trustees receive remuneration for their services to the Portfolio out of
such investment adviser and administrative fees. Investors Bank & Trust Company
(IBT), an affiliate of EVM, serves as custodian of the Portfolio. Pursuant to
the custodian agreement, IBT receives a fee reduced by credits which are
determined based on the average daily cash balances the Portfolio maintains
with IBT. Certain of the officers and Trustees of the Portfolio are officers or
trustees of the above organizations.
23
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $54,770,667 and $431,408 respectively.
- --------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENTS The cost and unrealized
appreciation (depreciation) in value of the investments owned at December 31,
1994, as computed on a federal income tax basis, are as follows:
<TABLE>
<S> <C>
Aggregate cost $ 54,327,065
=============
Gross unrealized appreciation $ 2,973,466
Gross unrealized depreciation 6,701,454
-------------
Net unrealized depreciation $ (3,727,988)
=============
</TABLE>
- --------------------------------------------------------------------------------
(5) RISKS ASSOCIATED WITH FOREIGN INVESTMENTS
Investing in securities issued by companies whose principal business activities
are outside the United States may involve significant risks not present in
domestic investments. For example, there is generally less publicly available
information about foreign companies, particularly those not subject to the
disclosure and reporting requirements of the U.S. securities laws. Foreign
issuers are generally not bound by uniform accounting, auditing, and financial
reporting requirements and standards of practice comparable to those applicable
to domestic issuers. Investments in foreign securities also involve the risk of
possible adverse changes in investment or exchange control regulations,
expropriation or confiscatory taxation, limitation on the removal of funds or
other assets of the Portfolio, political or financial instability or diplomatic
and other developments which could affect such investments. Foreign stock
markets, while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and
more volatile than securities of comparable U.S. companies.
In general, there is less overall governmental supervision and regulation of
foreign securities markets, broker-dealers, and issuers than in the United
States.
24
<PAGE> 25
- --------------------------------------------------------------------------------
(6) LINE OF CREDIT
The Portfolio participates with other portfolios and funds managed by EVM and
its affiliates in a $120 million unsecured line of credit agreement with a
bank. The line of credit consists of a $20 million committed facility and a
$100 million discretionary facility. Borrowings will be made by the Portfolio
solely to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each portfolio or fund based on its
borrowings at an amount above either the bank's adjusted certificate of deposit
rate, a variable adjusted certificate of deposit rate, or a federal funds
effective rate. In addition, a fee computed at an annual rate of 1/4 of 1% on
the $20 million committed facility and on the daily unused portion of the $100
million discretionary facility is allocated among the participating funds and
portfolios at the end of each quarter. The Portfolio did not have any
significant borrowings or allocated fees during the period.
25
<PAGE> 26
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Trustees and Investors of
South Asia Portfolio:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of South Asia Portfolio as of December 31, 1994,
and the related statement of operations, the statement of changes in net
assets, and the supplementary data for the period from the start of business,
May 2, 1994, to December 31, 1994. These financial statements and supplementary
data are the responsibility of the Portfolio's management. Our responsibility
is to express an opinion on these financial statements and supplementary data
based upon our audit.
We conducted our audit 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 supplementary
data 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 the securities owned at
December 31, 1994, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
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 audit provides a reasonable basis
for our opinion.
In our opinion, such financial statements and supplementary data present
fairly, in all material respects, the financial position of South Asia
Portfolio at December 31, 1994, the results of its operations, the changes in
its net assets and its supplementary data for the period from the start of
business, May 2, 1994, to December 31, 1994, in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 8, 1995
26
<PAGE> 27
- --------------------------------------------------------------------------------
EV MARATHON
GREATER INDIA
FUND
OFFICERS
- ---------------
JAMES B. HAWKES
President
PETER F. KIELY
Vice President
CLIFFORD H. KRAUSS
Vice President
JAMES L. O'CONNOR
Treasurer
THOMAS OTIS
Secretary
DOUGLAS C. MILLER
Assistant Treasurer
JANET E. SANDERS
Assistant Treasurer and Assistant Secretary
TRUSTEES
- ---------------
JAMES B. HAWKES
Executive Vice President, Eaton Vance Management
LANDON T. CLAY
Chairman, Eaton Vance Corp.
DONALD R. DWIGHT
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment Banking, Harvard
University Graduate School of Business Administration
NORTON H. REAMER
President and Director, United Asset
Management Corporation
JOHN L. THORNDIKE
Director, Fiduciary Trust Company
JACK L. TREYNOR
Investment Adviser and Consultant
SOUTH ASIA
PORTFOLIO
OFFICERS
- ---------------
HON. ROBERT LLOYD GEORGE
President
JAMES B. HAWKES
Vice President
SCOBIE DICKINSON WARD
Vice President, Assistant Secretary and
Assistant Treasurer
WILLIAM WALTER RALEIGH KERR
Vice President, Secretary and
Assistant Treasurer
JAMES L. O'CONNOR
Vice President and Treasurer
THOMAS OTIS
Vice President and Assistant Secretary
JANET E. SANDERS
Assistant Secretary
DOUGLAS C. MILLER
Assistant Treasurer
TRUSTEES
- ---------------
HON. ROBERT LLOYD GEORGE
Chairman and Chief Executive, Lloyd George
Management
JAMES B. HAWKES
Executive Vice President, Eaton Vance Management
SAMUEL L. HAYES, III
Jacob H. Schiff Professor of Investment Banking,
Harvard University Graduate School of Business
Administration
STUART HAMILTON LECKIE
Managing Director and Actuary, Wyatt Company,
Hong Kong
HON. EDWARD K.Y. CHEN
Professor and Director, Center for Asian Studies,
University of Hong Kong
27
<PAGE> 28
EV MARATHON
GREATER INDIA
FUND
ANNUAL
SHAREHOLDER REPORT
DECEMBER 31, 1994
SPONSOR AND MANAGER OF
EV MARATHON GREATER INDIA FUND
Administrator of South Asia Portfolio
Eaton Vance Management
24 Federal Street
Boston, MA 02110
ADVISER OF SOUTH ASIA PORTFOLIO
Lloyd George Management
(Bermuda) Limited 3808
One Exchange Square
Central, Hong Kong
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, MA 02110
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, MA 02110
TRANSFER AGENT
The Shareholder Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
INDEPENDENT AUDITORS
Deloitte & Touche LLP
125 Summer Street
Boston, MA 02110
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its distribution
plan, sales charges and expenses. Please read the prospectus carefully before
you invest or send money.
EV MARATHON GREATER INDIA FUND
24 FEDERAL STREET
BOSTON, MA 02110
