<PAGE>
INVESTMENT ADVISER OF
EMERGING MARKETS PORTFOLIO
Lloyd George Management
(Hong Kong) Limited
3408 One Exchange Square
Central, Hong Kong
ADMINISTRATOR OF EV TRADITIONAL
EMERGING MARKETS FUND
Eaton Vance Management
24 Federal Street
Boston, MA 02110
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
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 TRADITIONAL
EMERGING MARKETS FUND
24 FEDERAL STREET
BOSTON, MA 02110
[LOGO]
EV TRADITIONAL
EMERGING MARKETS
FUND
ANNUAL
SHAREHOLDER REPORT
DECEMBER 31, 1995
<PAGE>
To Shareholders
EV Traditional Emerging Markets Fund had a total return of 3.3% for the year
ended December 31, 1995. That return was the result of a rise in net asset value
per share from $9.95 on December 31, 1994 to $10.28 on December 31, 1995, and
does not include the effect of the Fund's maximum 4.75% sales charge. By
comparison, the Morgan Stanley Capital International Emerging Market Index, a
widely recognized, unmanaged index of emerging equity markets throughout the
world, had a total return of -9.2% for the same period.
WHILE VOLATILITY WAS THE WATCHWORD FOR INVESTORS IN 1995, CORPORATE PROFITS
CONTINUED TO SOAR...
This year was a trying period in the emerging markets, as fluctuating markets
and shifting political sands handed investors a wild ride. The peso crisis in
Latin America, trade tensions in Asia, and political uncertainties in central
Europe all added to investors' concerns. However, despite these short-term
gyrations, corporate profits in these markets continued to far exceed
expecta-tions. Not surprisingly, markets where investors focused solely on
strong fundamentals proved to be the most successful. Hong Kong companies, for
example, posted strong earnings growth as the local economy entered a cyclical
recovery. The Hong Kong market, the Portfolio's largest country weighting,
rallied strongly in the second half to post a 20% rise for the year, making it
the best-performer among the emerging markets for 1995.
PRIVATIZATION: THE COMMON THREAD AMONG GROWING EMERGING MARKETS...
A common thread among all successful emerging markets is privatization of
industry. The movement to privatize previously state-run industries in emerging
economies has made individuals less reliant on governments for goods and
services and more attuned to the marketplace. The result has been a surge in
private initiatives, leading to new enterprises and a surge in job creation.
According to the World Bank's International Finance Corp., more than 2,700
state-owned enterprises in 95 countries were transferred to private ownership in
the 5-year period from 1988-1993 alone. Those transfers raised more than $270
billion in revenue, infusing these fledgling economies with the start-up capital
so critical to success.
1996 WILL OPEN WIDER OPPORTUNITIES IN THE EMERGING MARKETS...
This year will no doubt bring more conversions to the private sector and more
openings for investors. Naturally, as we've witnessed in recent years, we can
expect frequent changes in these markets, including the risk of currency
fluctuations and political shifts. But we believe these markets represent
outstanding long-term opportunities. EV Traditional Emerging Markets Fund will
continue seeking those opportunities in 1996.
Sincerely,
/s/ James B. Hawkes
James B. Hawkes,
President
February 21, 1996
<PAGE>
Management Discussion
An interview with the Hon. Robert Lloyd George, President of Lloyd George
Management, and Investment Adviser to the Emerging Markets Portfolio.
Q: ROBERT, RETURNS FOR THE EMERGING MARKETS WERE RELATIVELY MODEST IN 1995. TO
WHAT DO YOU ATTRIBUTE THAT?
A. 1995 proved to be an unusual year for investors in the emerging markets.
Despite faster growth rates elsewhere in the world, the U.S. was the top
performing market, according to Morgan Stanley Capital International. That
was quite unusual, especially given the fact that economic growth rates in
many emerging markets continue to far eclipse that of the U.S.
The scene was set early in the year with the Mexican peso crisis. Due to the
so-called "tequila effect," emerging markets throughout South America, Asia,
and Europe came under closer scrutiny from investors. Lingering
uncertainties caused many of these markets to post a sub-par performance in
the early months of the year. While some markets - such as Hong Kong -
gathered momentum in the second half of the year, others lagged the U.S. for
most of the year.
As the year ended, however, many investors reassessed the emerging markets
in view of their still-strong economic growth rates. Following their
relatively weak showing in 1995, many of these markets appear to be
well-positioned for 1996.
Q: WHERE HAVE YOU BEEN FOCUSING THE PORTFOLIO'S INVESTMENTS?
A. From a regional standpoint, East Asia remains the Portfolio's largest
weighting, representing around 69% of equity investments. Latin America
represents another 21% of the Portfolio, and South Asia, or Greater India,
comprises around 10%.
As I mentioned earlier, Hong Kong was among the best-performing emerging
markets in 1995, climbing 20% for the year. Hong Kong has continued to
generate strong economic growth on its own, but more importantly, is
benefiting increasingly from the surging economy of mainland China. With the
Chinese takeover of Hong Kong scheduled for next year, Hong Kong remains an
invaluable resource, given its established legal, banking, and business
infrastructure. Moreover, Hong Kong has been a major exporter of goods and
professional services to China and the China region, and stands to benefit
further following the takeover.
Q: COULD YOU DESCRIBE SOME OF YOUR INVESTMENTS IN THE CHINA REGION?
A. Yes. Hong Kong-based CP Pokphand is a conglomerate with businesses ranging
from trading to industrial manufacturing to agriculture. With operations
located in Hong Kong, mainland China, Thailand, and Indonesia, the company
is well represented in Asia's emerging economies. Pokphand's industrial
businesses consist primarily of auto parts and motorcycle manufacturing for
the Chinese market. Its agricultural businesses include producing animal
feed for the farm sector as well as a poultry operation that is among the
largest in the world. Pokphand is clearly well-positioned to help provide
food for the surging populations of greater China.
Also based in Hong Kong, Varitronix is a manufacturer of liquid crystal
displays. The company's products are targeted for customized industrial
applications, such as automobile clocks and dashboard displays. One of their
current key products is a telebetting terminal marketed throughout Malaysia
and Australia. Elsewhere in the region, PT Telkom Indonesia is the dominant
company in the Indonesian telecom industry. The company is the principal
provider of domestic phone services, and owns the main telephone grid from
which it derives 90% of its revenues. Upon listing in October 1995, PTTelkom
became the largest exchange-listed company in Indonesia.
CHILE: A SNAPSHOT*-
GDP GROWTH: ............. 8.0%
SIZE OF ECONOMY: ........ $56.4 BILLION
INFLATION RATE:.......... 8.2%
MAIN TRADING PARTNERS;(BY EXPORTS)
US ................. 18.0%
JAPAN .............. 16.3%
ARGENTINA .......... 7.9%
GERMANY ............ 4.9%
FOREIGN RESERVES:.......... $14.5 BILLION
* Information for 1995
Source: Financial Times
Q: LATIN AMERICA REMAINS THE PORTFOLIO'S SECOND LARGEST REGIONAL WEIGHTING.
WHAT DO YOU FIND ESPECIALLY ENCOURAGING ABOUT THE LATIN REGION?
A. Latin America turned in mixed results in 1995, with the Mexican crisis
roiling much of the region. The Portfolio's largest Latin weighting was
Brazil, which managed to avoid the Mexican fallout. While generating GDP
growth in the 5% range, Brazil has maintained its capital flows, continued
to enact economic reforms, further privatized industry, and steadily
increased its exports.
The Portfolio also had a small investment in Chile. Chile's economic
fundamentals remain strong. GDP grew a robust 8% in 1995, while the
inflation rate declined to a 35-year low of 8.2%, according to the Central
Bank of Chile. Chile enjoys a strong currency, a trade surplus, and $14
billion foreign currency reserve. While the economy may cool some what from
last year's torrid pace, corporate earnings are expected to rise another
20%.
Q: WHAT KIND OF COMPANIES HAVE YOU BEEN BUYING IN LATIN AMERICA?
A. Compania Brasileira de Distribuicao is Brazil's largest food retailer, with
more than 180 food stores ranging from supermarkets and hypermarkets to
warehouses. The company also operates a chain of retailers selling home
appliances and do-it-yourself-hardware. Over 60% of the company's business
is located in Sao Paulo state, Brazil's largest and wealthiest consumer
market.
Another large Latin holding is Compania de Telecomunicaciones de Chile
(CTC). One of the major hurdles to be overcome in Latin America is an
antiquated phone system. The region is greatly in need of modern equipment
and an updated line system. CTC is Chile's largest provider of phone
services and maintains an established local phone franchise. In 1994, the
company was permitted to begin providing long distance services, both
domestically and internationally. CTC is now the country's only full-service
tele-communications company.
Q: FINALLY, WHERE HAVE YOU INVESTED IN SOUTH ASIA?
A. In South Asia, India remained the Portfolio's largest country weighting. The
India market proved very difficult in 1995, due to political intrigues and
currency fluctuations. However, despite the sharp market decline,
India-based companies enjoyed average earnings growth in excess of 60%. That
demonstrates that the productivity of Indian companies continues to improve,
even amid changing political tides. Economic growth and earnings growth of
this magnitude cannot go unnoticed for long by investors. Therefore, while
there may be more bumps along the road, I remain optimistic about the
long-term future of India. The Portfolio's largest investment in Greater
India is Tata Engineering & Locomotive, also known as Telco. Telco is
India's largest commercial vehicle manufacturer. The company boasts a
dominant share of the domestic market, with a 70% share of the medium and
heavy commercial vehicle segment and a 50% share of the light vehicle
market. Within India's increasingly competitive passenger vehicle market,
Telco has announced with Daimler Benz plans to produce Mercedes vehicles for
India's luxury market.
Q: IN CLOSING, ROBERT, WHAT IS YOUR OUTLOOK FOR THE EMERGING MARKETS?
A. The past year was clearly an anomaly in that the U.S. market outperformed
virtually every emerging market in the world. That's especially noteworthy
because the emerging markets continued, in most cases, to post growth far
exceeding that of the U.S. and other industrialized economies. In addition,
the earnings growth of many individual companies in these markets continued
to make U.S. profit growth pale by comparison.
Clearly, there are reasons for optimism in 1996. The questions over the
Chinese takeover of Hong Kong are closer to resolution; the
recession-plagued economies in Latin America are gradually recovering; and
investors show signs of turning from the highly-valued U.S. market for
better growth opportunities elsewhere. It is axiomatic in the financial
markets that stock prices follow earnings. Naturally, there is no guarantee
that past trends will be repeated in the future, and of course, emerging
markets are subject to above-average currency fluctuations and political and
event risk. But the market will not long ignore the impressive fundamentals
of these newly emerging companies. The Portfolio expects to participate in
their growth in 1996.
- --------------------------------------------------------------------------------
THE PORTFOLIO'S
COMMON STOCK INVESTMENTS
BY REGION
EAST ASIA (GREATER CHINA) ......................................... 69.5%
LATIN AMERICA ..................................................... 20.8%
SOUTH ASIA (GREATER INDIA) ........................................ 9.7%
Based on market value as of December 31, 1995.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NOTES FROM THE EMERGING MARKETS:
o CHINA - Hong Kong-based New World Development is building an experimental
private housing development in Wuhan, south of Beijing. When completed, the
project will house 60,000 families and include medical facilities and retail
shops. The homes will cost buyers a modest $9,600.
o BRAZIL - The Brazilian Vehicle Manufacturers Association announced that car
sales in that country rose for the fifth consecutive year in 1995. Despite the
Mexican crisis that afflicted much of Latin America, domestic auto sales climbed
13%. The Association predicts a further 5% sales rise in 1996.
o CHILE - Chilean trade officials announced in December that Chile will
negotiate its own trade agreement with Canada. The country already has its own
pact with Mexico. Separately, Chile is working hard to gain entry to NAFTA and
to the Mercosur trade groups.
- --------------------------------------------------------------------------------
<PAGE>
Comparison of Change in Value of a $10,000 Investment in EV Traditional
Emerging Markets Fund and the Morgan Stanley Capital International Emerging
Markets Index
From December 31, 1994, through December 31, 1995
- ------------------------------------------
AVG. ANNUAL 1 Life of
RETURNS Year Fund*
- ------------------------------------------
With CDSC -1.6% -2.0%
- ------------------------------------------
Without CDSC 3.3% 2.6%
- ------------------------------------------
Date Traditional Emerging MSCI Index
12/94+ 9,522 10,000
1/95 9,187 8,905
2/95 9,263 8,746
3/95 9,254 8,869
4/95 9,435 9,051
5/95 10,048 9,369
6/95 10,048 9,346
7/95 10,211 9,488
8/95 10,086 9,174
9/95 10,029 9,275
10/95 9,742 8,967
11/95 9,502 8,742
12/95 9,837 9,080
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 12/8/94.
+Index information is available only at month-end; therefore, the line
comparison begins at the next month-end following the commencement of the
Fund's investment operations.
FUND PERFORMANCE
In accordance with new 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 investments in EV
Traditional Emerging Markets Fund and the unmanaged Morgan Stanley Capital
International Emerging Market Index.
TOTAL RETURN FIGURES
The solid black line on the chart represents the Fund's performance at net asset
value. The total return figure reflects Fund expenses and transaction costs, and
includes the Fund's 4.75 % maximum current sales charge. The dotted black line
represents the performance of the Morgan Stanley Capital International Emerging
Market Index, a broad-based, widely recognized unmanaged index of common stocks
traded in a wide range of emerging markets around the world. 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.
<PAGE>
<TABLE>
EV Traditional Emerging Markets Fund
Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------------------------------------------
December 31, 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investment in Emerging Markets Portfolio, at value (Note 1A) $1,344,969
(identified cost, $1,209,361)
Receivable for Fund shares sold 6,897
Receivable from Administrator 30,945
Deferred organization expenses (Note 1D) 41,219
----------
Total assets $1,424,030
LIABILITIES:
Payable for Fund shares redeemed $ 3,070
Accrued expenses and other liabilities 46,727
-------
Total liabilities 49,797
----------
NET ASSETS for 133,629 shares of beneficial interest outstanding $1,374,233
==========
SOURCES OF NET ASSETS:
Paid-in capital $1,302,069
Accumulated net realized loss on investment transactions
(computed on the basis of identified cost) (63,444)
Unrealized appreciation of investments from Portfolio
(computed on the basis of identified cost) 135,608
----------
Total $1,374,233
==========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE
($1,374,233 / 133,629 shares of beneficial interest outstanding) $10.28
==========
COMPUTATION OF OFFERING PRICE:
Offering price per share (100/95.25 of $10.28) $10.79
==========
On sales of $100,000 or more the offering price is reduced.
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
Statement of Operations
- --------------------------------------------------------------------------------------------------------------------
Year ended December 31, 1995
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME (NOTE 1B):
Investment income allocated from Portfolio (net of foreign taxes, $721) $ 14,148
Expenses allocated from Portfolio (24,542)
--------
Net investment loss from Portfolio $(10,394)
Expenses-
Management fee (Note 3) $ 2,795
Custodian fee (Note 3) 2,335
Distribution fees (Note 5) 5,590
Transfer and dividend disbursing agent fees 1,070
Printing and postage 12,765
Legal and accounting services 6,946
Registration fees 18,677
Amortization of organization expenses (Note 1D) 10,585
Miscellaneous 2,240
--------
Total expenses $ 63,003
Deduct allocation of expenses to the Administrator (Note 3) 30,945
--------
Net expenses 32,058
--------
Net investment loss $(42,452)
REALIZED AND UNREALIZED GAIN (LOSS) FROM PORTFOLIO:
Net realized loss -
Investments $(63,444)
Foreign currency (2,230)
--------
Net realized loss $(65,674)
Change in unrealized appreciation of investments 140,895
--------
Net realized and unrealized gain 75,221
--------
Net increase in net assets from operations $ 32,769
========
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------
1995 1994*
---------- ----------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations-
Net investment loss $ (42,452) $ (145)
Net investment gain (loss) from Portfolio (65,674) 891
Change in unrealized appreciation from Portfolio 140,895 (5,287)
---------- ----------
Net increase (decrease) in net assets from operations $ 32,769 $ (4,541)
---------- ----------
Transactions in shares of beneficial interest (Note 4)-
Proceeds from sales of shares $ 681,725 $ 1,007,951
Cost of shares redeemed (343,681) -
---------- ----------
Increase in net assets from capital stock transactions $ 338,044 $1,007,951
---------- ----------
Net increase in net assets $ 370,813 $1,003,410
NET ASSETS:
At beginning of year 1,003,420 10
---------- ----------
At end of year (including accumulated net investment loss
of $0 and $145, respectively) $1,374,233 $1,003,420
========== ==========
* For the period from the start of business, December 8, 1994, to December 31,
1994.
See notes to financial statements
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
- ----------------------------------------------------------------------------------------------------------------------
<CAPTION>
Year Ended December 31,
------------------------------
1995 1994*
------- --------
<S> <C> <C>
NET ASSET VALUE, beginning of year $ 9.950 $ 10.000
------- --------
INCOME (LOSS) FROM OPERATIONS:
Net investment loss $(0.317) $ (0.001)
Net realized and unrealized gain (loss) on investments 0.647 (0.049)
------- --------
Total income (loss) from operations $ 0.330 $ (0.050)
------- --------
NET ASSET VALUE, end of year $10.280 $ 9.950
======= ========
TOTAL RETURN (2) 3.32% (0.50%)
RATIOS/SUPPLEMENTAL DATA**:
Net assets, end of year (000 omitted) $ 1,374 $ 1,003
Ratio of net expenses to average daily net assets (1) 5.36% 0.50%+
Ratio of net investment loss to average daily net assets (3.79%) (0.50%)+
** The expenses related to the operation of the Fund reflect an assumption of expenses by the Administrator. Had
such action not been taken, net investment loss per share and the ratios would have been as follows:
Net investment loss per share: $(0.734) $(0.010)
RATIOS (As a percentage of average daily net assets):
Expenses (1) 10.70% 7.84%+
Net investment income (9.13%) (7.84%)+
(1) Includes the Fund's share of Emerging Market 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 record date.
+ Annualized
* For the period from the start of business, December 8, 1994, to December 31, 1994.
See notes to financial statements
</TABLE>
<PAGE>
Notes to Financial Statements
- --------------------------------------------------------------------------------
(1) SIGNIFICANT ACCOUNTING POLICIES
EV Traditional Emerging Markets Fund (the Fund) is a mutual fund seeking
long-term capital appreciation through investment in a portfolio of equity
securities of companies in countries with emerging markets. 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 Emerging Markets 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 (37.5% at December 31, 1995). 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 (the 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, 1995, the Fund, for federal income
tax purposes, had a capital loss carryover of $12,632, which will reduce taxable
income arising from future net realized gain on investments, if any, to the
extent permitted by the Code, and thus will reduce the amount of the
distribution to shareholders which would otherwise be necessary to relieve the
Fund of any liability for federal income or excise tax. Pursuant to the Code,
such capital loss carryover will expire on December 31, 2003. Additionally, at
December 31, 1995, net capital loss of $50,057, attributable to security
transactions incurred after October 31, 1995, are treated as arising on the
first day of the Fund's next 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.
- --------------------------------------------------------------------------------
(2) DISTRIBUTIONS TO SHAREHOLDERS
It is the present policy of the Fund to make at least one distribution annually
(normally in December) of all or substantially all of the investment allocated
to the Fund by the Portfolio, less the Fund's direct and allocated expenses and
at least one distribution annually of all or substantially all of the net
realized capital gains (reduced by any available capital loss carryforwards from
prior years) allocated by the Portfolio to the Fund, if any.
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. 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. During the year ended December
31, 1995, $42,597 was reclassified from distributions in excess of net
investment income and $1,339 was reclassified from accumulated net realized loss
to paid-in capital due to permanent differences between book and tax accounting
for net operating losses and foreign currency gains and lossses. Net investment
loss, net realized loss, and net assets were not affected by these
reclassifications.
- --------------------------------------------------------------------------------
(3) 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 year ended December
31, 1995, the fee was equivalent to 0.25% of the Fund's average daily net assets
for such period and amounted to $2,795. To enhance the net income of the Fund,
the Administrator was allocated expenses in the amount of $30,945. 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. Eaton Vance Distributors, Inc., (EVD), a subsidiary of EVM and
the Fund's principal underwriter, received approximately $623 as its portion of
the sales charge on sales of Fund shares for the year ended December 31, 1995.
EVD also receives a contingent deferred sales charge (CDSC) on shareholder
redemptions made within 18 months of purchase, where the initial investment in
the Fund was $1 million or more. No such fees were received during the period.
Investors Bank & Trust Company (IBT), serves as custodian to the Fund. Prior to
November 10, 1995, IBT was an affiliate of EVM. Pursuant to the custodian
agreement, IBT receives a fee reduced by credits which are determined based on
the average cash balances the Fund maintains with IBT. All significant credits
used to reduce the Fund's custodian fees are reported as a reduction of expenses
in the statement of operations. Certain of the officers and Trustees of the Fund
and Portfolio are officers and directors/trustees of the above organizations. In
addition, investment adviser, administrative and custodian 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.
- --------------------------------------------------------------------------------
(4) 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:
YEAR ENDED DECEMBER 31,
-----------------------------------
1995 1994*
------ -------
Sales 67,327 100,827
Redemptions (34,525) -
------ -------
Net increase 32,802 100,827
====== =======
* For the period from the start of business, December 8, 1994, to December 31,
1994.
- --------------------------------------------------------------------------------
(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) a monthly
distribution fee equal, on an annual basis, to the aggregate of (a) 0.50% of
that portion of the Fund's average daily net assets for any fiscal year which is
attributable to shares of the Fund which have remained outstanding for less than
one year and (b) 0.25% of that portion of the Fund's average daily net assets
for any fiscal year which is attributable to shares of the Fund which have
remained outstanding for more than one year. During the year ended December 31,
1995 the Fund paid distribution fees to EVD aggregating $5,590 representing
0.50% of average daily net assets. The Plan also provides that the Fund will pay
a quarterly service fee to EVD in an amount equal, on an annual basis, to 0.25%
of that portion of the Fund's average daily net assets for any fiscal year which
is attributable to shares of the Fund which have remained outstanding for more
than one year, and the payment of these service fees shall commence with the
quarter ending March 31, 1996. EVD may pay up to the entire amount of the
service fee to Authorized Firms through which the Fund's shares are distributed.
- --------------------------------------------------------------------------------
(6) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio aggregated
$733,974 and $395,864, respectively.
<PAGE>
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
Traditional Emerging Markets Fund (the Fund) (one of the series constituting
Eaton Vance Special Investment Trust) as of December 31, 1995, and the related
statement of operations for the year then ended, and the statements of changes
in net assets and the financial highlights for the year ended December 31, 1995
and for the period from the start of business, December 8, 1994, to December 31,
1994. These financial statements and financial highlights are the responsibility
of the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of the EV Traditional
Emerging Markets series of Eaton Vance Special Investment Trust at December 31,
1995, and the results of its operations, the changes in its net assets, and its
financial highlights for the respective stated periods, in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
BOSTON, MASSACHUSETTS
FEBRUARY 9, 1996
<PAGE>
EMERGING MARKETS PORTFOLIO
PORTFOLIO OF INVESTMENTS - DECEMBER 31, 1995
- --------------------------------------------------------------------------------
COMMON STOCKS - 85.8%
- --------------------------------------------------------------------------------
SHARES VALUE
BRAZIL - 6.6%
Banco Bradesco S.A. Pfd. 6,683,067 $ 58,445
Banco Bradesco S.A. Rights(1) 156,263 243
Brasmotor S.A. Pfd. 310,000 61,557
Compania Brasileira de Distrib. GDR(1) 7,800 81,900
Usiminas Siderurg Minas ADR 4,325 35,141
-----------
$ 237,286
-----------
CHILE - 3.8%
Banco Osorno Y La Union 4,360 $ 60,495
Compania de Telecomunicaciones 900 74,475
-----------
$ 134,970
-----------
HONG KONG - 24.5%
Cheung Kong(1) 14,000 $ 85,280
Citic Pacific Ltd. 21,000 72,137
CP Pokphand Co. Ltd. 220,000 88,203
First Pacific Co. 70,000 77,857
Florens International Group Ltd. 118,000 74,709
Henderson Land Development 12,000 72,390
HSBC Holdings PLC 4,000 60,526
Hutchison Whampoa 23,000 140,102
Li & Fung Ltd.(1) 80,000 71,390
QPL International Oldings Ltd.(1) 50,000 56,258
Varitronix International Ltd.(1) 43,000 79,803
-----------
$ 878,655
-----------
INDIA - 6.9%
Hindalco Industries Ltd.(1) 2,200 $ 74,250
Mahindra & Mahindra GDR(1) 6,800 86,700
Tata Engineering & Locomotion GDR 6,720 87,360
----------
$ 248,310
-----------
INDONESIA - 12.1%
PT HM Sampoerna (Foreign) 8,000 $ 83,271
PT Matahari Putra Prima(1) 40,000 70,413
PT Mulia Industrindo(1) 32,000 90,269
PT Telecomunikasion(1) 85,000 111,524
Wicaksana(1) 29,500 78,701
-----------
$ 434,178
-----------
REPUBLIC OF KOREA - 5.3%
Korea Electric Power ADR 3,000 $ 79,500
Korea Mobile Telecom Corp.(1) 2,500 111,875
-----------
$ 191,375
-----------
MAYLASIA - 5.5%
DCB Holdings Behard 30,000 $ 87,436
Sistem Televisyen Malaysia BHD(1) 30,000 108,113
-----------
$ 195,549
-----------
<PAGE>
SHARES VALUE
MEXICO - 5.4%
Pan American Beverages, Inc. 2,400 $ 76,800
Sigma Alimentos S.A.(1) 8,200 52,216
Telefonos de Mexico ADR 2,050 65,344
-----------
$ 194,360
-----------
PERU - 2.1%
Cerveceria Backus & Johnston 44,331 $ 76,270
-----------
PHILIPPINES - 4.1%
Benpres Holdings(1) 12,800 $ 64,000
Philippine Long Distance Telephone 700 38,029
Philippine Long Distance Telephone ADR 800 43,300
-----------
$ 145,329
-----------
SRI LANKA - 1.4%
John Keells Holdings GDR 10,000 $ 50,000
-----------
THAILAND - 8.1%
Electricity Generating (Foreign)(1) 17,600 $ 60,087
Industrial Finance Corp. 21,200 72,817
Siam Cement Co. Ltd. (Foreign) 1,400 77,586
Siam Commercial Bank(1) 8,300 81,715
-----------
$ 292,205
-----------
TOTAL COMMON STOCKS
(IDENTIFIED COST, $2,803,317) $3,078,487
OTHER ASSETS, LESS LIABILITIES - 14.2% 508,782
------------
NET ASSETS - 100% $3,587,269
============
(1) Non-income producing securities
See notes to financial statements
<PAGE>
EMERGING MARKETS PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
- -------------------------------------------------------------------------------
December 31, 1995
- -------------------------------------------------------------------------------
ASSETS:
Investment, at value (Note 1A) (identified cost, $2,803,317) $3,078,487
Cash 652,451
Cash denominated in foreign currencies (cost $100,000) 99,597
Dividends and interest receivable 894
Receivable from Administrator 61,361
Deferred organization expenses (Note 1C) 29,781
----------
Total assets $3,922,571
LIABILITIES:
Payable for investments purchased $292,053
Accrued expenses and other liabilities 43,249
--------
Total liabilities 335,302
----------
NET ASSETS applicable to investors' interest in Portfolio $3,587,269
===========
SOURCES OF NET ASSETS:
Net proceeds from capital contributions and withdrawals $3,312,511
Net unrealized appreciation of investments
(computed on the basis of identified cost) 275,170
Net unrealized depreciation of foreign currencies (412)
-----------
Total $3,587,269
===========
See notes to financial statements
<PAGE>
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
Year Ended December 31, 1995
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend income (net of foreign withholding tax, $1,466) $ 29,122
Expenses-
Investment adviser fee (Note 2) $ 17,297
Administration fee (Note 2) 5,762
Compensation of Trustees not members of the
Investment Adviser's organization (Note 2) 15,000
Custodian fees (Note 2) 52,692
Legal and accounting services 17,296
Amortization of organization expenses (Note 1C) 7,665
Miscellaneous 5,307
--------
Total expenses $121,019
--------
Deduct -
Allocation of expenses to the Administrator % 61,361
Reduction of custodian fee (Note 2) 7,319
--------
Total deducted 68,680
Net expenses 52,339
---------
Net investment loss $ (23,217)
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss -
Investments $(140,905
Foreign currency (6,543)
---------
Net realized loss $(147,448)
Change in unrealized appreciation (depreciation) -
Investments $ 281,832
Foreign currency (369)
---------
Net unrealized appreciation 281,463
----------
Net realized and unrealized gain on investments $ 134,015
----------
Net increase in net assets from operations $ 110,798
==========
See notes to financial statements
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1995 1994*
------------- ---------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
From operations-
Net investment loss $ (23,217) $ -
Net investment gain (loss) on investments and
foreign currency transactions (147,448) 1,132
Change in unrealized appreciation 281,463 (6,705)
---------- ----------
Net increase (decrease) in net assets
from operations $ 110,798 $ (5,573)
---------- ----------
Capital transactions:
Contributions $3,550,731 $1,107,223
Withdrawals (1,269,530) (6,400)
---------- -----------
Increase in net assets from capital transactions $2,281,201 $1,100,823
---------- -----------
Total increase in net assets $2,391,999 $1,095,250
NET ASSETS:
At beginning of year 1,195,270 100,020
---------- ----------
At end of year $3,587,269 $1,195,270
========== ==========
</TABLE>
* For the period from the start of business, November 30, 1994, to December 31,
1994.
See notes to financial statements
<PAGE>
SUPPLEMENTARY DATA
YEAR ENDED DECEMBER 31,
-----------------------
1995 1994*
---- -----
RATIOS (to average daily net assets):
Net expenses 2.58% 0.00%
Net investment income (1.00%) 0.00%
PORTFOLIO TURNOVER 98% 0%
Net assets, end of period (000's omitted) $3,587 $1,195
The operating expenses of the Portfolio reflect an allocation of expenses to
the Administrator. Had such action not been taken, the ratios would have been
as follows:
Expenses 5.24% 2.21%+
Net investment income (3.98%) (2.21%)+
+ Annualized
* For the period from the start of business, November 30, 1994, to December 31,
1994.
See notes to financial statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
Emerging Markets Portfolio (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. 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, 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 has elected to be treated as a partnership for
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 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. Withholding taxes on foreign dividends and
capital gains have been provided for in accordance with the Portfolio's
understanding of the applicable countries' tax rules and rates.
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. 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. The Portfolio's investment in
financial futures contracts is designed only to hedge against anticipated future
changes in interest or currency exchange rates. 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 counter parties 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 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 year ended December 31, 1995 the adviser fee was 0.75%
(annualized) 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,
1995, the administration fee was 0.25% (annualized) of average net assets. To
enhance the net income of the Portfolio, the administrator was allocated
expenses in the amount of $61,361. 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) serves as
custodian of the Portfolio. Prior to November 10, 1995, IBT was an affiliate of
EVM. 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 Fund's
custody fees are reported as a reduction of expenses in the statement of
operations. Certain of the officers and Trustees of the Portfolio are officers
or directors/trustees of the above organizations.
- -------------------------------------------------------------------------------
(3) INVESTMENT TRANSACTIONS
Purchases and sales of investments, other than short-term obligations,
aggregated $4,402,678 and $1,886,014, respectively.
- -------------------------------------------------------------------------------
(4) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in the value of the
investments owned at December 31, 1995, as computed on a Federal income tax
basis, are as follows:
Aggregate cost $ 2,803,317
============
Gross unrealized appreciation $ 358,918
Gross unrealized depreciation (83,748)
------------
Net unrealized appreciation $ 275,170
============
- -------------------------------------------------------------------------------
(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.
- -------------------------------------------------------------------------------
(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 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.
<PAGE>
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND SHAREHOLDERS OF
EMERGING MARKETS PORTFOLIO:
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of Emerging Markets Portfolio as of December 31,
1995, and the related statement of operations for the year then ended, the
statements of changes in net assets and the supplementary data for the year
ended December 31, 1995 and for the period from the start of business November
30, 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
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits 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, 1995, 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 audits provide 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 Emerging Markets Portfolio
at December 31, 1995, and the results of its operations, the changes in its net
assets, and its supplementary data for the respective stated periods, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 9, 1996
<PAGE>
<TABLE>
Investment Management
- -------------------------------------------------------------------------------------------
<S> <C> <C>
EV MARATHON OFFICERS TRUSTEES
EMERGING MARKETS
FUND JAMES B. HAWKES M. DOZIER GARDNER
24 Federal Street President, Trustee President, Eaton Vance Management
Boston,MA 02110
CLIFFORD H. KRAUSS DONALD R. DWIGHT
Vice President President, Dwight Partners, Inc.
Chairman, Newspapers of New
JAMES L. O'CONNOR England, Inc.
Treasurer
SAMUEL L. HAYES, III
THOMAS OTIS Jacob H. Schiff Professor of
Secretary 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
- -------------------------------------------------------------------------------------------
EMERGING MARKETS OFFICERS TRUSTEES
PORTFOLIO
24 Federal Street HON. ROBERT LLOYD GEORGE HON. ROBERT LLOYD GEORGE
Boston,MA 02110 President Chairman and Chief Executive,
Lloyd George Management
JAMES B. HAWKES
Vice President, Trustee SAMUEL L. HAYES, III
Jacob H. Schiff Professor of
SCOBIE DICKINSON WARD Investment Banking, Harvard
Vice President, Assistant University Graduate School of
Secretary and Assistant Treasurer Business Administration
STUART HAMILTON LECKIE
WILLIAM WALTER RALEIGH KERR Managing Director and Actuary,
Vice President, Secretary and Wyatt Company, Hong Kong
Assistant Treasurer
HON. EDWARD K.Y. CHEN
JAMES L. O'CONNOR Professor and Director, Center for
Vice President and Treasurer Asian Studies, University of
Hong Kong
THOMAS OTIS
Vice President and
Assistant Secretary
</TABLE>
