[LOGO]
EV Marathon
Greater India
Fund
Semi-Annual
Shareholder Report
June 30, 1996
[GRAPHIC OMITTED]
To Shareholders
EV Marathon Greater India Fund had a total return of 16.5% during the
six months ended June 30, 1996. That performance was the result of a
rise in net asset value per share from $6.55 on December 31, 1995 to
$7.63 on June 30, 1996. It does not include the effect of the Fund's
maximum contingent deferred sales charge incurred by certain redeeming
shareholders. In comparison, the Bombay Stock Exchange Index - an
unmanaged index of 200 common stocks traded in the Indian markets - had
a return of 21.9% for the same period. The Fund's results reflected a
rejuvenated Indian market, which made a major turnaround from last
year's sharp decline, despite the uncertainties of the political
campaign and the change in political leadership.
India's new United Front government calls for an acceleration of
economic growth...
In the run-up to the recent national elections, there was much
uncertainty among investors about the future pace of economic reforms.
Happily, now that the United Front has formed a new government, the
ruling coalition has confirmed its intention to keep economic growth and
free market reforms at the forefront of its political agenda. In its
initial economic proposals, the new government calls for India's real
(inflation-adjusted) gross domestic product to grow 7% annually over the
next decade, compared with 6.2% growth in the year ended March 31.
Further, the coalition calls for $10 billion a year in foreign
investment, an increase from the record $2 billion in 1995. Foreign
investment will be especially encouraged in the infrastructure and
technology areas. Finally, in the industrial sectors, the government
targets growth of 12% a year, compared to the 9% industrial growth rate
last year.
With India's new government, easier rules on foreign investment...
In another favorable development, the new Indian government has made it
easier for domestic companies to raise funds abroad. In June, the
Finance Ministry announced new rules governing the issuance of Global
Depository Receipts (GDRs), removing the limit on the number of
securities companies may issue. GDRs are foreign currency-denominated
receipts for shares held by overseas banks and allow an investor to
purchase foreign shares in their own market rather than in a foreign
market. These changes should facilitate the flow of dollars and foreign
investment into Indian infrastructure investments.
Having encountered significant political changes in recent months, India
is sure to encounter more challenges in the future. While past trends do
not guarantee future results, we believe that India's future remains
bright and should reward long-term investors. In the pages that follow,
Portfolio Manager Scobie Ward reviews the watershed political events of
recent months and looks ahead to what these changes may mean for
investors seeking opportunities in Greater India.
[PHOTO OF JAMES B. HAWKES OMITTED]
Sincerely
/S/James B. Hawkes
James B. Hawkes,
President,
August 21, 1996
Management Discussion: Scobie Dickinson Ward
An interview with Scobie Dickinson Ward, Vice President and Director of
Lloyd George Management, and portfolio manager of the South Asia
Portfolio.
Q: Scobie, how would you evaluate the Indian market so far in 1996?
A. The Indian market has turned in a strong performance in the first
half of 1996. The turnaround from 1995 is especially dramatic given the
well-documented problems of last year. This year's rally has been fueled
by strong growth in corporate earnings as well as a continued surge of
foreign investment into the country. In addition, despite the
uncertainty that has characterized the political scene, investors are
increasingly confident that the reform movement will continue its
course. Finally, unlike last year, when the Indian currency fluctuated
wildly, the rupee has remained relatively stable since the first of the
year. These developments have created a favorable backdrop for the
Indian market.
Q: Most investors have been focused on the recent general elections.
What do you make of the outcome?
A. The intial results of the elections for India's 545-seat parliament
were largely inconclusive. While dealing a setback to the long-ruling
Congress Party, the Bharatiya Janata Party (BJP) emerged as the single
largest party with 195 seats, followed by the Congress Party, with 139
seats. The Third Front, a political coalition of nine smaller parties,
gathered a combined total of 200 seats. The BJP was unable to form a
government and subsequently turned to the United Front, an ad hoc
coalition of major parties. The new government is headed by Mr. Deve
Gowda, the former minister of Karnataka, who was largely responsible for
building the city of Bangalore into India's version of the Silicon
Valley. It is apparent that, with reform leaders at the top of the new
India government, foreign investors may be reassured that the India
economy will continue to travel a road of economic liberalization.
[PHOTO OF SCOBIE D. WARD OMITTED]
caption reads: Scobie D. Ward
Q: That's encouraging for investors. Turning to the Portfolio, where
have you been focusing your investments?
A. The Portfolio's country allocations at June 30 were: 86.1% of equity
investments in India, 10.8% in Pakistan, 1.8% in Sri Lanka, and 1.3% in
Bangladesh. We have focused increasingly on large-cap, blue chip stocks.
Because we had increased our cash position during last year's sharp
market decline, we were well-positioned to buy selected companies at
depressed levels. As a result, the Portfolio has been able to
participate in this year's strong rally among the blue chip companies.
Fund shares are not guaranteed by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares
are subject to investment risks, including possible loss of principal
invested.
[GRAPHIC TABLE WITH PICTURE OF INDIA WITH SURROUNDING PAKISTAN AND CHINA
OMITTED]
1st Caption reads: India and Pakistan: At a Glance
India Pakistan
GDP Growth 6.0% 7.0%
Inflation rate 10.3% 10.1%
Total GDP $310B $52B
Population 920M 129M
Market cap $127B $9.3B
Exchange rate 35 Rp/$ 34Rp/$
Market P/E 14 15
2nd Caption reads:India and Pakistan Entering a New Era of Economic
Cooperation?...
3rd Caption reads: Source: World Bank; Emerging Market Economic
Statistics. Data for 1995.
Q: Is there a major theme that has characterized the Portfolio in
recent months?
A. The Portfolio's emphasis on large cap issues reflects a theme of
investing in well-capitalized companies that are among the leading
operators in their particular sectors. These include industrial and
engineering companies participating in the building of infrastructure,
consumer companies that are well attuned to Indian spending habits, and
diversified companies that have an exposure to growth across a wide
range of industries.
Q: Could you name some of those industry leaders?
A. Certainly. In the consumer area, Hindustan Lever Limited represents
a large holding. The company is a diversified multinational offshoot of
the Unilever Group. Its principal businesses involve personal consumer
products, such as soap, detergents, shampoo, toothpaste, tea, garments
and footwear. But the company also has interests in chemicals and
agricultural products. Hindustan Lever dominates the Indian soap market
with a 70% market share, while claiming a 35% share of the detergent
market and a second place share of the toothpaste market. With such a
high profile, the company is well-poised to benefit from India's
expanding taste for consumer products, which have consistently shown
double-digit sales growth.
Q: And what about the industrial sector?
A. Associated Cement Companies Limited (ACC) is India's largest cement
manufacturer. The company has undertaken a large capital spending
program with an eye toward expanding its manufacturing capacity.
Operating profits rose more than 80% in the first six months of the
current fiscal year due to improved pricing flexibility and the
beneficial effect of cost controls. As a prime beneficiary of India's
growing infrastructural build-up, ACC is expected to enjoy continued
strong demand in coming years.
Q: Engineering represents the Portfolio's largest industry weighting.
What kind of stocks have you been buying in that sector?
A. Larsen & Toubro is India's largest engineering and construction
company, with a proven track record of expertise in managing large
projects. Larsen has formed a series of joint ventures to develop
turnkey projects for power and petrochemical plants. The Indian
government has made a massive commitment to improving infrastructure,
with expenditures in these sectors likely to reach $15 billion annually.
Larsen & Toubro will naturally reap a major share of those revenues. The
company enjoyed 23% sales growth and 50% earnings growth
in 1995.
[PIE CHART OMITTED: The Portfolio's common stock investments]
Chart information reads:
India 86.1%
Pakistan 10.8%
Sri Lanka 1.8%
Bangladesh 1.3%
Footnote reads: Based on market value as of June 30, 1996, excluding
cash of fixed income securities.
Q. Telecommunications stocks are among the Portfolio's large holdings.
Let's discuss some of the dimensions of India's telecommunications
needs.
A. Clearly, India has massive telecommunications needs. There is just
one phone line for every 100 inhabitants in the country, according to
India's Department of Telecommunications. The average penetration rate
for all other developing nations is five lines per 100 people, while the
average for Organization of Economic Co-operation and Development
countries, which represent the world's industrialized societies, is 47
lines per 100. Therefore, India has one of lowest penetration rates in
the world. Only one-quarter of India's villages even has a public
telephone, while applicants for a phone in the cities must wait up to
two years. According to Indian government reports, India would need to
spend at least $75 billion just to catch up with developing nations, not
to mention the industrialized countries. The needs are so imposing that
no single company can tackle the challenge alone. Therefore, local
companies are forming ventures with large foreign companies to meet
those needs.
Q. Could you give us an example of the Portfolio's investments in the
telecom sector?
A. By all means. Videsh Sanchar Nigam Limited (VSNL), the exclusive
provider of public international telephone services in India, is the
Portfolio's largest single investment. Unlike some companies that are
concentrating on domestic telecom needs, VSNL concentrates on the
international phone business. VSNL provides a linkage of India's
domestic telecom-munications network with 235 destinations worldwide.
From gateways in Bombay, Calcutta, Delhi and Madras, the company
provides international telephone, telex, and telegraph services using
both satellite and underseas cable links. In addition, VSNL provides
other value-added services such as leased lines, mobile services, E-
mail, electronic data interchange, and video teleconferencing.
Q: Pakistani companies comprise about 10% of the Portfolio. What is the
state of relations between India and Pakistan?
A. As most investors in the region know, there is a long history of
political tensions between the two nations. More recently, however,
there have been signs of a new spirit of economic cooperation. Prime
Minsiter Bhutto of Pakistan has indicated that she favors normalizing
trade with India, and as a signatory to the World Trade Organization,
Pakistan is obligated to extend Most Favored Nation status to India.
There is hope that the new Indian government will also opt for stronger
economic ties.
Recent U.S. investments* in India:
(bullet) Lucent Technologies, Inc. - The designer, developer, and
manufacturer of telecommunications systems has been awarded a
$107 million contract by the Indian government. The company
will build and maintain a wireless telephone system in India.
(bullet) Raytheon Corp. - In a project with India-based Tata Industries,
the Massachusetts company is helping construct a $250 million
airport in Bangalore. Bangalore is a center of India's software
industry and is often referred to as India's "Silicon Valley."
(bullet) NIKE., Inc. - In March, the U.S. footwear maker launched the
initial sale of its products in India. Produced in Sonepat and
marketed through New Delhi-based Sierra Industries, NIKE
expects to sell 125,000 pairs of shoes in India within a year.
*These companies are not owned by the Portfolio.
[GRAPHIC OMITTED]
Caption reads: Indian nationwide subscriber line growth- (Million lines)
Year Telephone lines (in millions)
- ---------------------------
1991 5
1992 5.9
1993 6.75
1994 8
1995 9.5
This chart shows the growth in Indian phone
lines from 1991 to 1995. The chart is captioned
"Indian Telecom Industry: Oppurtunities Down the Line."
Source: Indian Department of Telecommunications.
Up to now, official trade between the two countries has been limited to
a narrow range of areas, such as food products and textiles. If trade is
expanded, India could sell Pakistan vital raw materials, and finished
products like autos and railway equipment. That would likely benefit
some of the basic materials companies I mentioned earlier, like
Associated Cement. For its part, Pakistan could sell India cotton for
use in its textile industry and scrap iron needed for heavy industry.
Clearly there are delicate political hurdles to be overcome, but there
is growing hope for an improving economic relationship. That should give
companies in both countries a boost.
Q. Scobie, looking ahead, what is your outlook for the Greater India
markets?
A. The mood of investors toward India is brightening once again.
Foreign investment continues to flow freely into the country. For
example, in the first five months of 1996 alone, net foreign buying of
stocks totalled $1.8 billion, compared with $303 million in the same
period last year.
And now that the election uncertainties are behind us, the markets will
likely focus more closely on fundamentals. Corporate profits continue to
grow impressively, while the reform process, which some investors feared
would lose momentum in the election aftermath, appears still on track.
Naturally, there's no guarantee of future performance, and like all
foreign markets, Indian investments are subject to political, currency,
and event risks. But given the attractive valuations and robust profit
growth, the Indian market appears to be a very good value. I believe
there will continue to be good opportunities for investors in Indian
stocks in the months ahead.
<TABLE>
<CAPTION>
EV Marathon Greater India Fund
Financial Statements
Statement of Assets and Liabilities
June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investment in South Asia Portfolio, at value (Note 1A)
(identified cost, $91,114,041) $96,327,660
Deferred organization expenses (Note 1D) 40,064
-----------
Total assets $96,367,724
Liabilities:
Payable for Fund shares redeemed $221,835
Payable to affiliate --
Trustees' fees 410
Accrued expenses 34,019
-----------
Total liabilities 256,264
-----------
Net Assets for 12,592,052 shares of beneficial interest outstanding $96,111,460
===========
Sources of Net Assets:
Paid-in capital $97,343,952
Accumulated net realized loss from Portfolio (5,608,588)
Unrealized appreciation of investments from Portfolio 5,213,619
Accumulated net investment loss (837,523)
-----------
Total net assets $96,111,460
===========
Net Asset Value, Offering Price and Redemption Price (Note 6) Per Share
($96,111,460 (divided by) 12,592,052 shares of beneficial interest outstanding) $7.63
=====
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Six Months Ended June 30, 1996 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income (Loss) (Note 1B):
Dividend income allocated from Portfolio (net of foreign tax, $34,523) $158,891
Interest income allocated from Portfolio 1,178
Expenses allocated from Portfolio (489,270)
-----------
Net investment loss from Portfolio $(329,201)
Expenses --
Management fee (Note 2) $91,215
Distribution costs (Note 5) 305,225
Compensation of Trustees not members of the
Administrator's organization 447
Transfer and dividend disbursing agent fees 39,746
Registration fees 28,730
Printing and postage 13,301
Legal and accounting services 7,604
Amortization of organization expenses (Note 1D) 7,051
Custodian fee 2,037
Miscellaneous 12,966
-----------
Total expenses 508,322
-----------
Net investment loss $(837,523)
-----------
Realized and Unrealized Gain (Loss) from Portfolio:
Net realized gain (loss) --
Investment transactions (identified cost basis) $572,308
Foreign currency transactions (1,197,830)
-----------
Net realized loss $(625,522)
Change in unrealized appreciation of investments 14,606,759
-----------
Net realized and unrealized gain $13,981,237
-----------
Net increase in net assets from operations $13,143,714
===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
- ------------------------------------------------------------------------------------------------------------------
Six Months Ended
June 30, 1996 Year Ended
(Unaudited) December 31,1995
----------- -----------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment loss $(837,523) $(517,194)
Net realized loss on investments and foreign currency
transactions from Portfolio (625,522) (5,072,342)
Change in unrealized appreciation (depreciation) from Portfolio 14,606,759 (6,856,752)
----------- -----------
Increase (decrease) in net assets from operations $13,143,714 $(12,446,288)
----------- -----------
Transactions in shares of beneficial interest (Note 3) --
Proceeds from sale of shares $70,312,673 $8,525,965
Cost of shares redeemed (8,386,321) (13,962,878)
----------- -----------
Increase (decrease) in net assets from Fund share transactions $61,926,352 $(5,436,913)
----------- -----------
Net increase (decrease) in net assets $75,070,066 $(17,883,201)
Net Assets:
At beginning of period 21,041,394 38,924,595
----------- -----------
At end of period (including accumulated net investment
loss of $837,523 and $0, respectively) $96,111,460 $21,041,394
=========== ===========
See notes to financial statments
</TABLE>
<TABLE>
<CAPTION>
Statement of Cash Flows
For the Six Months Ended June 30,1996 (Unaudited)
- ------------------------------------------------------------------------------------------------
<S> <C>
Increase (Decrease) in Cash:
Cash Flows From (For) Operating Activities --
Purchase of interests in South Asia Portfolio $(70,459,816)
Withdrawal of interests in South Asia Portfolio 8,819,617
Operating expenses paid (478,757)
-----------
Net cash used for operating activities $(62,118,956)
-----------
Cash Flows From (For) Financing Activities --
Proceeds from shares sold $70,441,049
Payments for shares redeemed (8,322,093)
-----------
Net cash provided from financing activities 62,118,956
-----------
Net increase in cash $ --
Cash at Beginning of Period --
-----------
Cash at End of Period $ --
===========
Reconciliation of Net Increase in Net Assets From
Operations to Net Cash From Operating Activities:
Net increase in net assets from operations $13,143,714
Decrease in deferred organization expense 7,051
Increase in payable to affiliates: Trustees fees 367
Increase in accrued expenses and other liabilities 22,147
Net increase in investments (75,292,235)
-----------
Net cash used for operating activities $(62,118,956)
===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
- ----------------------------------------------------------------------------------------------------
Six Months Ended Year Ended December 31,
June 30,1996 ------------------------
(Unaudited) 1995 1994*
--------------- ---------- ----------
<S> <C> <C> <C>
Net asset value -- Beginning of period $6.550 $9.840 $10.000
------- ------- -------
Income (loss) from operations:
Net investment loss $(0.081)++ $(0.176) $(0.065)
Net realized and unrealized gain
(loss) on investments 1.161 (3.114) (0.095)
------- ------- -------
Total income (loss) from operations $1.080 $(3.290) $(0.160)
------- ------- -------
Net asset value -- End of period $7.630 $6.550 $9.840
======= ======= =======
Total Return (2) 16.49% (33.43%) (1.60%)
Ratios/Supplemental Data:
Net assets, end of period (000 omitted) $96,111 $21,041 $38,925
Ratio of net expenses to average net assets (1)(3) 3.09%+ 3.31% 2.54%+
Ratio of net expenses to average net assets after
custodian fee reduction(1)(3) 2.72%+ 2.90% --
Ratio of net investment loss to average net assets (2.28%)+ (1.74%) (1.42%)+
* For the period from the start of business, May 2, 1994, to December 31, 1994.
+ Annualized.
++ Computed using average shares outstanding throughout the period.
(1) Includes the Fund's share of South Asia Portfolio's allocated expenses.
(2) Total return is calculated assuming a purchase at the net asset value on the first
day and a sale at the net asset value on the last day of each period reported. Dividends
and distributions, if any, are assumed to be reinvested at the net asset value on the
payable date. Total return is not computed on an annualized basis.
(3) The annualized expense ratios for the six months ended June 30, 1996 and the year ended
December 31, 1995 have been adjusted to reflect a change in reporting requirements.
The new reporting guidelines require the Fund, as well as the Portfolio, to increase its
expense ratio by the effect of any expense offset arrangements with its service providers.
The expense ratio for the period ended December 31, 1994 has not been adjusted to reflect
this change.
See notes to financial statements
</TABLE>
Notes to Financial Statements
(Unaudited)
(1) Significant Accounting Policies
EV Marathon Greater India Fund (the Fund) is a mutual fund seeking long-
term capital appreciation through the purchase of an interest in a
separate investment company which invests primarily in equity securities
of companies in India and surrounding countries of the Indian sub-
continent. 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 (72.4% at June 30, 1996).
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, if any, and any net realized capital gains.
Accordingly, no provision for federal income or excise tax is necessary.
At December 31, 1995, the Fund, for federal income tax purposes had a
capital loss carryover of $4,424,196 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
($7,604) and December 31, 2003 ($4,416,592). Additionally, at December
31, 1995, net capital losses of $521,848 and net currency losses of
$55,565 attributable to security and currency transactions incurred
after October 31, 1995, are treated as arising on the first day of the
Fund's current taxable year.
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 at the per share net asset value as of the close of business on
the record date.
The Fund distinguishes between distributions on a tax basis and a
financial reporting basis. Generally accepted accounting principles
require that only distributions in excess of tax basis earnings and
profits be reported in the financial statements as a return of capital.
Differences in the recognition or classification of income between the
financial statements and tax earnings and profits which result in
temporary over distributions for financial statement purposes are
classified as distributions in excess of net investment income or
accumulated net realized gains. Permanent differences between book and
tax accounting are reclassified to paid-in capital. The tax treatment of
distributions, if any, for the calendar year will be reported to
shareholders prior to February 1, 1997 and will be based on tax
accounting methods which may differ from amounts determined for
financial statement purposes.
F. Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
G. Other -- Investment transactions are accounted for on a trade date
basis.
H. Interim Financial Information -- The interim financial statements
relating to June 30, 1996 and for the six month period then ended have
not been audited by independent certified public accountants, but in the
opinion of the Fund's management, reflect all adjustments, consisting of
normal recurring adjustments, necessary for the fair presentation of the
financial statements.
(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 six months ended June 30, 1996 the fee was equivalent to
0.25% (annualized) of the Fund's average net assets for such period and
amounted to $91,215. 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.
Certain officers and Trustees of the Fund and the Portfolio are officers
and directors of EVM. In addition, investment adviser and administrative
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 were as follows:
Six Months Year
Ended Ended
June 30, 1996 December 31,
(Unaudited) 1995
------------- -----------
Sales 10,544,307 1,082,002
Redemptions (1,165,651) (1,824,601)
------------- -----------
Net increase
(decrease) 9,378,656 (742,599)
============= ===========
(4) Investment Transactions
For the six months ended June 30, 1996, increases and decreases in the
Fund's investment in the Portfolio aggregated $70,459,816 and
$8,819,617, respectively.
(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
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
$273,646 as payable to EVD for the six months ended June 30, 1996,
representing 0.75% of average daily net assets. The amounts paid by the
Adviser to EVD are equivalent to 0.15% of the Fund's annual daily
average net assets and are made from the Adviser's own resources, not
the Fund's net assets. At June 30, 1996, the amount of Uncovered
Distribution Charges of EVD calculated under the Plan was approximately
$4,474,000.
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. For the six months ended June 30, 1996 service
fees amounted to $31,579. Service fee payments will be made for personal
service 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 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 $140,000 of CDSC paid by
shareholders for the six months ended June 30, 1996.
<TABLE>
<CAPTION>
South Asia Portfolio
Portfolio of Investments
June 30, 1996
(Unaudited)
- --------------------------------------------------------------------------------------------
Common Stocks -- 94.5%
- --------------------------------------------------------------------------------------------
Shares Value
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bangladesh -- 1.2%
Apex Spinning & Knitting 40,000 $186,826
Apex Tannery Ltd 40,000 572,905
Eastern Housing Ltd. (1) 90,300 199,590
Monno Fabrics Ltd. (2)(3) 133,000 354,369
Square Pharmaceuticals Ltd. 16,000 255,605
------------
$1,569,295
------------
India -- 81.4%
Alacrity Housing Ltd. 321,000 $145,784
Asian Paints (India) Ltd. (2) 116,800 1,446,324
Associated Cement Cos. Ltd. (2) 84,936 5,820,515
Bajaj Auto Ltd. (2) 162,400 4,562,460
Bellary Steels & Alloys (2) 310,000 166,747
Enkay Synthetics Ltd. (2) 51,750 58,022
Essar Gujarat (2) 2,105 1,673
Flex Industries 400 1,657
Flex Industries (wts) (1)(3) 4,274 16,499
GE Shipping (2) 1,457,700 2,089,523
Gujarat Ambuja Cements GDR (1) 250,000 3,187,500
Himachal Futuristic Communications (2) 800 692
Himachal Telematics Ltd (2) 39,100 21,087
Hindalco Industries Ltd. GDR (1) 122,500 4,655,000
Hindustan Lever Ltd. (2) 260,350 6,070,891
Hindustan Petroleum Corp. (2) 100,000 1,114,107
Hoechst India Ltd. (2) 378,500 3,760,290
Hoechst Schering Agrevo Ltd. 20,000 272,495
Hotel Leela Venture Ltd. (2) 750 3,384
Hotel Leela Venture (wts) (1) 340 887
IFB Industries Ltd. (2) 107,800 321,288
Indian Hotels Co. Ltd. (2) 111,250 2,608,360
Indian Hotels Co. Ltd. GDR (1)(2) 35,850 1,030,687
Indian Petrochemicals Corp. (2) 615,000 2,718,883
Indian Rayon & Industries Ltd. (2) 153,300 2,145,242
Indian Rayon & Industries GDR 225,000 3,318,750
Indus Credit & Invest. Corp. (2) 629,250 1,607,507
Infosys Technologies Ltd. 85,500 1,735,240
Innovation Medi Equipment Ltd. (1) 150,000 13,837
Karur Vysya Bank (2) 146,800 1,150,066
KEC International Ltd. 165,200 616,627
Kotak Mahindra Finance Ltd (2) 372,400 935,493
Larsen & Toubro (2) 200,850 $1,650,470
Larsen & Toubro Ltd. GDR 183,700 3,490,300
Madras Refinery Ltd. (2) 15,300 23,017
Mahindra & Mahindra (2) 370,653 3,792,935
Mahindra & Mahindra GDR 221,667 2,439,456
Motor Industries (2) 6,150 1,335,265
Murudeshwar Ceramics Ltd. (2) 318,240 519,409
Nagarjuna Construction (2) 112,500 253,159
Orchid Chemicals & Pharmaceuticals (2) 409,600 1,342,856
Oriental Bank of Commerce (2) 700,000 1,947,204
Paper Products (rts) (1) 12,500 49,673
Paper Products Ltd. Primary 50,000 198,695
Punjab Wireless Systems 100,000 434,998
Ranbaxy Laboratories Ltd. GDR 35,000 717,500
Ranco Industries Ltd. 12,000 429,180
Rubber Products (2) 132,000 62,760
S & S Industries & Enterprise (2) 138,000 38,386
Sakthi Sugars 400 590
Shaan Interwell (India) 112,700 107,485
State Bank of India-New (2) 777,800 6,628,851
Sterlite Industries (2) 217,800 1,904,127
Tanil Nadu Newsprint and Paper 231,500 939,667
Tata Chemicals (2) 17,099 125,221
Tata Engineering & Locomotive (2) 58,650 865,682
Tata Engineering & Locomotive GDR 210,261 3,705,868
Tata Iron & Steel (2) 655,000 4,503,938
Thermax Limited (2) 552,200 6,273,577
Thiru Arooran Sugars (2) 50,500 186,346
Triveni Engineering (2) 190,850 257,319
TTG Industries Ltd. (2) 142,600 331,910
T.V.S. Suzuki 228,550 2,338,698
Usha Beltron Ltd. GDR 108,450 257,569
Videsh Sanchar Nigam Ltd. (2) 202,000 7,740,565
VST Tillers 94,200 248,133
W.S. Industries Ltd. 102,500 72,736
Zuari Agrochemicals (2) 126,000 1,394,835
------------
$108,205,897
------------
Pakistan -- 10.2%
Adamjee Insurance Co. (2) 293,750 1,166,440
Engro Chemical Pakistan Ltd. (2) 60,000 277,675
Fauji Fertilizer (2) 500,000 1,285,530
Hub Power Company Ltd. GDR (1) 50,000 $1,243,750
Karachi Electric Supply Co. (1)(2) 1,030,040 1,081,390
Nishat Chunian Ltd. (1)(2) 306,000 50,265
Pakistan State Oil Co. Ltd. (2) 183,679 2,167,104
Pakistan Telecommunications GDR (1) 52,250 6,165,500
Searle Pakistan 137,459 146,275
------------
$13,583,929
------------
Sri Lanka -- 1.7%
Dev Fin Corp Of Ceylon 55,731 $302,237
Hayleys Ltd. 150,930 511,223
John Keells Holdings 86,852 226,904
John Keells Holdings GDR 118,856 624,000
Kelani Tyres (1) 480 82
National Development Bank 78,900 277,191
Royal Ceramic Lanka Ltd. (1) 394,900 156,523
Sampath Bank 186,000 164,201
Vanik Incorporation Ltd. 180,050 38,115
------------
$2,300,476
------------
Total Common Stocks (identified cost, $117,595,457) $125,659,597
------------
- --------------------------------------------------------------------------------------------
Bonds -- 0.1%
- --------------------------------------------------------------------------------------------
Principal
Amount
(000 omitted) Value
- --------------------------------------------------------------------------------------------
Flex Industries, 13.5%, 12/31/99 (3) US $836 $23,729
Hotel Leela Venture Ltd. NCD 14%, 4/8/03 27 660
------------
Total Bonds (at identified cost, $27,767) $24,389
------------
Total Investments -- 94.5% (identified cost, $117,623,224) $125,683,986
Other assets, less liabilities -- 5.5% 7,346,815
------------
Net Assets -- 100% $133,030,801
============
GDR-Global depository receipt
(1) Non-income producing security
(2) The above securities held by the Portfolio on June 30, 1996 are unrestricted securities
valued at market prices. Because of the length of the registration process, the Portfolio
would temporarily be unable to sell certain of these securities. At June 30, 1996, the
aggregate value of these securities amounted to $45,323,904, representing 34.1% of the
Portfolio's net assets (Note 5)
(3) Security valued using methods determined in good faith by or at the direction of
the Trustees.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Statements
- --------------------------------------------------------------------------------------------------------------
Statement of Assets and Liabilities
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets:
Investments, at value (Note 1A) (identified cost, $117,623,224) $125,683,986
Cash 8,520,460
Foreign currency, at value (identified cost, $1,169,779) 1,159,951
Receivable for investments sold 1,576,780
Dividends and interest receivable 228,976
Deferred organization expenses (Note 1C) 49,215
------------
Total assets $137,219,368
Liabilities:
Payable for investments purchased $3,864,544
Payable to affiliates: Trustees fees 3,333
Accrued expenses and other liabilities 320,690
------------
Total liabilities 4,188,567
------------
Net Assets applicable to investors' interest in Portfolio $133,030,801
============
Sources of Net Assets:
Net proceeds from capital contributions and withdrawals $124,975,570
Net unrealized appreciation of investments and foreign currency
(computed on the basis of identified cost) 8,055,231
------------
Total $133,030,801
============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Income --
Dividends (net of foreign taxes, $49,867) $229,986
Interest 1,740
------------
Total income 231,726
Expenses --
Investment adviser fee (Note 2) $393,999
Administration fee (Note 2) 131,099
Compensation of Trustees not members of the
Investment Adviser's or Administrator's organization 4,418
Custodian fee 325,761
Legal and accounting services 33,794
Amortization of organization expenses (Note 1C) 8,678
Miscellaneous 9,276
------------
Total expenses $907,025
Deduct-reduction of custodian fee 194,531
------------
Net expenses 712,494
------------
Net investment loss $(480,768)
------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain (loss) --
Investment transactions (identified cost basis) $700,026
Foreign currency transactions (1,743,367)
------------
Net realized loss on investments $(1,043,341)
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $21,642,017
Foreign currency 36,366
------------
Net unrealized appreciation 21,678,383
------------
Net realized and unrealized gain on investments $20,635,042
------------
Net increase in net assets from operations $20,154,274
============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Statement of Cash Flows
For the Six Months Ended June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------------------
<S> <C>
Increase (Decrease) in Cash:
Cash Flows From (For) Operating Activities --
Purchase of investments $(87,931,297)
Proceeds from sale of investments 19,757,241
Dividends and interest received 151,008
Operating expenses paid (449,354)
Foreign currency transactions (1,236,092)
------------
Net cash used for operating activities $(69,708,494)
------------
Cash Flows From (For) Financing Activities --
Proceeds from capital contributions $101,370,713
Payments for capital withdrawals (25,929,523)
------------
Net cash provided from financing activities $75,441,190
------------
Net increase in cash $5,732,696
Cash at Beginning of Period 2,787,764
------------
Cash at End of Period $8,520,460
============
Reconciliation of Net Increase in Net Assets From
Operations to Net Cash From Operating Activities:
Net increase in net assets from operations $20,154,274
Increase in receivable for investments sold (1,082,048)
Decrease in foreign currency 470,909
Increase in dividends and interest receivable (80,718)
Decrease in deferred organization expenses 8,678
Increase in payable to affiliates: Trustees fees 3,333
Increase in accrued expenses and other liablilities 251,128
Increase in payable for investments purchased 2,619,395
Net increase in investments (92,053,445)
------------
Net cash used for operating activities $(69,708,494)
============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------------------------------------
Six Months Ended
June 30,1996 Year Ended
(Unaudited) December 31, 1995
-------------- ------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment loss $(480,768) $(78,834)
Net realized loss on investments and foreign currency transactions (1,043,341) (7,522,747)
Change in unrealized appreciation (depreciation) of investments 21,678,383 (9,895,389)
------------ ------------
Increase (decrease) in net assets from operations $20,154,274 $(17,496,970)
------------ ------------
Capital transactions --
Contributions $101,370,713 $22,408,418
Withdrawals (25,929,523) (24,329,701)
------------ ------------
Increase (Decrease) in net assets resulting from capital transactions $75,441,190 $(1,921,283)
------------ ------------
Net increase (decrease) in net assets $95,595,464 $(19,418,253)
Net Assets:
At beginning of period 37,435,337 56,853,590
------------ ------------
At end of period $133,030,801 $37,435,337
============ ============
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Supplementary Data
- ------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended December 31,
June 30, 1996 ----------------------------
(Unaudited) 1995 1994*
---------- ---------- ----------
<S> <C> <C> <C>
Ratios (to average daily net assets):
Expenses (1) 1.72%+ 1.76% 1.16%+
Net expenses, after custodian fee reduction (1) 1.35%+ 1.35% --
Net investment income (loss) (0.91%)+ (0.18%) 0.01%+
Portfolio Turnover 21% 38% 1%
Average commission rate (per share) (2) $0.05 -- --
Annualized.
+ Annualized.
* For the period from the start of business, May 2, 1994, to December 31, 1994.
(1) The annualized expense ratios for the six months ended June 30, 1996 and year ended December 31, 1995
have been adjusted to reflect a change in reporting requirements. The new reporting guidelines require
the Portfolio to increase its expense ratio by the effect of any expense offset arrangements with its
service providers. The expense ratio for the period ended December 31, 1994 has not been adjusted to
reflect this change.
(2) Average commission rate paid is computed by dividing the total amount of commissions paid during
the period by the total number of shares purchased and sold during the period.
See notes to financial statements
</TABLE>
Notes to Financial Statements (Unaudited)
(1) Significant Accounting Policies
South Asia Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 as a diversified, open-end management
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 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 of 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.
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. Expense Reduction -- Investors Bank & Trust Company (IBT) 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. All
significant credit balances used to reduce the Portfolio's custodian
fees are reported as a reduction of expenses in the statement of
operations.
H. Use of Estimates -- The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expense during the
reporting period. Actual results could differ from those estimates.
I. Other -- Investment transactions are accounted for on the date the
securities 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.
J. Interim Financial Information -- The interim financial statements
relating to June 30, 1996 and for the six month period then ended have
not been audited by independent certified public accountants, but in the
opinion of the Portfolio's management, reflect all adjustments,
consisting of normal recurring adjustments, necessary for the fair
presentation of the financial statements.
(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 six months ended June 30, 1996, the
annualized adviser fee was 0.75% of average net assets and amounted to
$393,999. 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 six months
ended June 30, 1996, the administration fee was 0.25% (annualized) of
average net assets and amounted to $131,099. 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.
Certain of the officers and Trustees of the Portfolio are officers or
trustees of the above organizations.
(3) Investment Transactions
For the six months ended June 30, 1996, purchases and sales of
investments, other than short-term obligations, aggregated $90,550,692
and $20,839,289 respectively.
(4) Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation)
in value of the investments owned at June 30, 1996, as computed on a
federal income tax basis, are as follows:
Aggregate cost $117,691,790
============
Gross unrealized appreciation $ 20,339,136
Gross unrealized depreciation 12,346,940
------------
Net unrealized appreciation $ 7,992,196
============
(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.
Settlement of securities transactions in the Indian subcontinent may be
delayed and is generally less frequent than in the United States, which
could affect the liquidity of the Portfolio's assets. The Portfolio may
be unable to sell securities where the registration process is
incomplete and may experience delays in receipt of dividends.
(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
portfolios and funds at the end of each quarter. The Portfolio did not
have any significant borrowings or allocated fees during
the period.
Investment Management
EV Marathon
Greater India Fund
- ----------------
Officers
James B. Hawkes
President, Trustee
Clifford H. Krauss
Vice President
James L. O'Connor
Treasurer
Thomas Otis
Secretary
Trustees
M. Dozier Gardner
President, Eaton Vance Management
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 Company Incorporated
Jack L. Treynor
Investment Adviser and Consultant
South Asia
Portfolio
- ----------
Officers
Hon. Robert Lloyd George
President, Trustee
James B. Hawkes
Vice President, Trustee
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 Secretary
Trustees
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking,
Harvard University Graduate School of Business Administration
Donald R. Dwight
President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Norton H. Reamer
President and Director, United Asset
Management Corporation
Hon. Edward K.Y. Chen
Professor and Director, Center for Asian Studies,
University of Hong Kong
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
89 South Street
P.O. Box 1537
Boston, MA 02205-1537
Transfer Agent
First Data Investor Services Group, Inc.
BOS725
P.O. Box 1559
Boston, MA 02104
(800) 262-1122
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
M-GISRC-8/96