To Shareholders
EV Traditional Greater India Fund had a total return of -33.4% during
the year ended December 31, 1995. That performance was the result of a
decline in net asset value per share from $9.85 on December 31, 1994 to
$6.56 on December. 31, 1995, and does not include the effect of the
Fund's maximum applicable sales charge. In comparison, the Bombay Stock
Exchange Index -- an unmanaged index of common stocks traded in the
Indian market -- had a return of -36.5% for the same period. The
Portfolio's results reflected a weak Indian market, which declined in
the face of political uncertainties, a heavy supply of new equity
issues, and a weak Indian currency.
India's economic reforms continued to gather steam...
The encouraging aspect about India during this difficult period has been
that economic reforms have proceeded without significant interruption.
Though the pace of reform in some areas, such as energy and
telecommunications, has been difficult, that in other areas, including
financial market reform, has made encouraging progress. Committed to its
goal of a free-market economy, the Indian government has also continued
its program of reducing the rate of inflation, and attracting foreign
investment. Those are actions that typically build value for the future,
whatever the short-term market fluctuations.
Foreign companies pour billions in direct investment into India...
There is no more eloquent testimony to the economic potential of India
than the quickened pace of foreign investment. As the reform process
opens doors for development, India continues to attract an impressive
flood of foreign interests. Telecommunications, energy, and
transportation have been among the magnet industries attracting foreign
investment, but others are drawing interest as well. As discussed in
greater detail later in this report, many U.S. industrial and consumer
giants, such as General Motors, PepsiCo, and Time Warner, have made
large investments in an effort to tap the potential of the India market.
Ignoring politics, corporate profits surged in 1995...
Interestingly, even amid the market turmoil of 1995, India-based
companies enjoyed strong earnings momentum. The corporate sector
generally ignored the nation's political concerns, benefiting from a
sharp rise in industrial activity. India is sure to encounter challenges
in the future, including the risk of currency fluctuations and political
changes. But well-positioned companies should continue to produce good
investment opportunities. We believe that India's future remains bright
and should reward long-term investors.
[PHOTO GOES HERE]
Sincerely,
/s/James B. Hawkes
James B. Hawkes,
President,
February 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, the Indian market proved rough sledding for investors in
1995. What made the market so difficult?
A. Several factors contributed to the Indian market's decline,
including politics. For example, the ruling Congress Party was dealt
setbacks in local elections, and that caused some investors to question
the strength of the reform movement. While we remain confident that
India's reform process will continue, this political uncertainty clearly
led to a weaker tone in the Indian markets.
In addition, there were significant supply pressures on the market due
to a very active initial public offering market. In the 12 months ended
April, 1995, $10 billion in new issues came to market, leaving India
investors an enormous amount to digest. We expect that those pressures
will moderate as officials act to control the flow of new issues.
Finally, there were adverse currency movements, especially for U.S.
investors. Through October of this year, the Indian rupee declined 11%
relative to the dollar, due to a rising trade deficit. This currency
decline has meant that, even as the market stabilized at mid-year, U.S.
investors lost ground due to adverse currency translation. The rupee has
since stabilized relative to the dollar due to strong intervention by
the central bank. Together, these adverse events created an unusually
difficult climate for the Indian market, even as the economy continued
to make strides, and that was reflected by the Portfolio.
Q: Do you see any signs of improvement on the horizon?
[PHOTO GOES HERE]
Scobie D. Ward
A. Absolutely. The stock market has stabilized as economic fundamentals
continue to improve. Moreover, the earnings outlook for Indian companies
remains excellent. India's GDP growth should be in the 6% range for
fiscal year 1996, according to the Finance Ministry. Meanwhile,
inflation, which at 10% was a serious concern to many investors, has
subsided in recent months to 7%, and shows signs of slowing further. In
addition, following the intervention by the Reserve Bank of India, the
rupee has settled in the Rs 35.8-to-the-dollar range, stabilizing at
mid-autumn exchange rates. Meanwhile, industrial production grew 8.5% in
the first half of 1995, with aluminum, automobiles, capital goods, and
pharmaceu-ticals registering the most impressive growth. Reflecting the
growth in the industrial sector, overall exports climbed 26% for the six
months ended September 30. In the agricultural sector, the prospects for
growth have improved following a normal monsoon season.
India: Continuing to post strong economic growth...
[GRAPHIC HERE a map of India]
showing:
Pakistan
India
Sri Lanka
Nepal
China
India: A Year-end Profile*
GDP Growth rate: 5.3%
Inflation rate: 8.5%
Growth of industrial output: 8.5%
Export growth: 33%
Deficit as % of GDP: 5.7%
Initial public offerings on
Bombay Stock Exchange:
...........$10 billion
* Figures for fiscal year 1994-95.
Source: India Ministry of Finance
Q: Where have you been investing?
A. The Portfolio's country allocations at December 31 were: 80% of
equity investments in India, 9% in Pakistan, 6% in Sri Lanka, and 5% in
Bangladesh. We used the market decline as an opportunity to restructure
the Portfolio. In the early stages of the decline, the Portfolio
significantly increased its cash position in anticipation of future
buying opportunities. Consequently, as the market weakened, the
Portfolio had the ability to purchase shares at sharply discounted
levels. We used the decline to increase positions in major large cap
companies - such as autos, engineering and pharmaceuticals - that should
be the early beneficiaries of an eventual improvement in market
sentiment. We also added promising small and mid-cap companies to the
Portfolio at prices sharply discounted from these companies' growth
rates.
Q: What are some of the Portfolio's core holdings?
A. The Portfolio's core holdings include large cap companies that have
a dominant market share in their respective industries. These include
Tata Engineering, or Telco, the largest automobile manufacturer in
India; Ranbaxy Labs, the second largest pharmaceutical and drug
manufacturer in India and the largest exporter in the Indian
pharmaceutical industry; State Bank of India, the largest commercial
bank in India, boasting 20% of total domestic bank deposits; and
Infosys, a Bangalore-based manufacturer of specialized software for the
banking and retail distribution sector.
Q: And what about Pakistan and Sri Lanka?
A. Pakistan and Sri Lanka continue to pose many political questions as
internal conflicts continue in both countries. As a result of these
difficulties, we continue to limit our investments in those countries
to high-profile, blue chip companies. In Pakistan, for example, Pakistan
Telecom is the largest holding. The company maintains a favored position
due to its monopoly on all fixed-line telecom services. In Sri Lanka,
John Keells Holdings remains our largest investment. This conglomerate
enjoys a dominant market share in industries ranging from real estate to
tourism to trade. The company's diversification of business interests
keeps it relatively well-insulated from shifting political tides.
Interestingly, despite the troublesome political climate of Sri Lanka
and Pakistan, companies in those countries continue to generate strong
earnings growth. Pakistan companies, for example, are turning in
corporate earnings growth of 25%, a very encouraging sign for the
future.
[GRAPHIC HERE The Portfolio's common stock investments pie chart]
showing:
Bangladesh 5.1%
Sri Lanka 6.3%
Pakistan 9.1%
India 79.5%
Based on market value as of December 31, 1995, excluding cash or fixed
income securities.
Q: You indicated earlier that India's auto industry - the Portfolio's
largest weighting - is among the strongest growth generators. Could you
expand on that theme?
A. Certainly. The auto sector has been especially robust, registering
sales growth of 37% for commercial vehicles. And, according to the
Ministry of Finance, India's auto output is expected to grow by 25% in
the current fiscal year alone. That clearly makes the auto sector the
strongest force behind industrial growth, which is growing at around 10%
annually. The India market is currently dominated by mid-range vehicles
(selling around $13,000), but the luxury market is growing as well.
Industry estimates suggest that 1995 output will total 200,000 units.
The market is attracting an increasing number of foreign manufacturers
who are aligning themselves with the major Indian companies. General
Motors, Ford, Daimler-Benz, Volkswagen, Fiat, and Daewoo are among the
foreign companies establishing strategic alliances to gain a foothold in
the growing Indian market. As the domestic industry develops, it's
likely that India will become an increasingly important producers of
auto parts for export to the rest of Asia.
Q: Where have you focused within the automobile sector?
A. Given the vast potential of the Indian market, it's important to be
aware of the various niche markets. In the expansive mid-range market,
the Portfolio has a major investment in Mahindra & Mahindra. The company
has signed a production agreement with Ford within the past year to
produce the Indian version of the Escort passenger car. In the smaller
car market, the Portfolio has a stake in Bajaj Auto, the country's
largest maker of two- and three-wheel vehicles. Bajaj has been
negotiating with Chrysler over a possible joint venture to build a sub-
compact vehicle.
Finally, in the up-market niche, the Portfolio has a large holding in
Tata Engineering & Locomotive, or Telco, which is working with Daimler
Benz to build Mercedes autos for the Indian market.
Q: What have you found attractive about the pharamaceutical sector?
A. The drug sector is expected to grow 15% annually with the increasing
spread of modern medicine to India. Interestingly, India's current share
of the global drug market is only 1.6%, even though it represents 16% of
the world's population. The industry is witnessing a sea change in its
operating environment, with more drugs being removed from price
controls. As a result of policy changes, companies are increasing
research outlays, as well as focusing on joint ventures and strategic
alliances with major global companies for research and marketing
support. Because India already has a well-developed base for drug
manufacturing and excellent technical support, other multi-nationals are
looking at the country as a sourcing point. These developments create an
increasingly attractive climate for India's pharmaceutical industry.
Recent U.S. investments* in India:
(bullet) PepsiCo - The worldwide beverage company gained final approval
for its Kentucky Fried Chicken restaurants in India. The company plans
to spend an additional $95 million to develop various agricultural and
bottling projects in India.
(bullet) Time Warner - The theater division of this U.S. entertainment
giant is investing $100 million in India. Time Warner plans to develop
cinema and shopping centers throughout the country.
(bullet) Ford Motor Co. - Announced in January plans for a second joint
venture with Mahindra & Mahindra. The company will invest $500 million
in a plant near Madras to build an Indian version of its Ford Fiesta.
When operational in 1998, the plant will have a capacity of 100,000 cars
annually.
*These companies are not owned by the Portfolio.
India's auto makers:
Ready to accelerate?
Vehicle production levels
1995 200,000
1998 400,000
(est.)
2000 800,000
(est.)
Source: Association of Indian Automobile Manufacturers
Q: Can you give an example of the Portfolio's pharmaceutical
investments?
A. Yes. Ranbaxy Laboratories is India's second largest pharmaceutical
company, accounting for 15% of industry sales. It is also the largest
exporter in the industry. The company's product range includes bulk
drugs, formulations, surgical dressings, and diagnostics. Ranbaxy's
basic strengths are an excellent brand image, good price
competitiveness, and the ability to introduce new products.
Interestingly, the company has entered into joint venture with Eli Lilly
to market products in India, and has additional joint ventures in other
parts of Asia.
Q: Scobie, looking ahead, what is your outlook for the Greater India
markets?
A. Given the sharp decline of 1995, history is clearly on the side of a
market recovery. Especially considering that average earnings per share
for Indian companies grew by 45% in the fiscal year ended March, 1995.
That marked the second straight year of growth over 40%. Naturally,
there's no absolute guarantee that these past results will be duplicated
in the future. And, of course, these markets are subject to political,
currency, and event risk.
Having said that, the compelling fact is that, despite robust earnings
momentum, the Bombay Stock Exchange Dollex Index is trading at a modest
price-earnings multiple of around 10 times prospective 1996 earnings.
Compare that, for example, with Thailand, which has a PE of 17, or
Singapore, which has a multiple of 21. Those figures suggest that India
provides a rare opportunity to buy fast growing companies at still-
undervalued levels. In my view, India clearly represents one of the best
investment values in the world.
[GRAPHIC LINE CHART]
Comparison of Change in Value of $10,000 Investment in EV Traditional
Greater India Fund and the Bombay Stock Exchange Index
From May 31, 1994, through December 31, 1995
showing:
VERTICAL BAR READS:
$12,500
10,000
7,500
5,000
HORIZONTAL BAR READS:
5/94+ 8/94 11/94 2/95 5/95 8/95 12/95
PLOT POINTS:
Date EV Traditional Greater India Fund Bombay Stock Exchange Index
5/94 9,524 10,000
6/94 9,610 10,565
7/94 9,791 10,805
8/94 10,818 11,722
9/94 10,143 11,115
10/94 10,106 11,019
11/94 9,914 10,685
12/94 9,372 10,162
1/95 8,658 9,476
2/95 8,154 9,046
3/95 7,973 8,754
4/95 7,422 8,311
5/95 7,707 8,519
6/95 7,726 8,343
7/95 7,916 8,718
8/95 7,555 8,366
9/95 7,174 8,647
10/95 6,765 8,476
11/95 5,937 7,481
12/95 6,242 7,801
Legend
- ---------EV Marathon Greater India Fund
- - - - - Bombay Stock Exchange Index
Cumulative Life of
Total Return Fund*
With max. sales charge -24.6%
W/O max. sales charge -22.3%
$7,801 $6,543 $6,216
Past performance is not indicative of future results. Investment returns
and principal will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost. Source:
Towers Data Systems, Bethesda, MD.
*Investment operations commenced on 5/02/94.
+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 Greater India Fund, and the unmanaged
Bombay Stock Exchange Index.
Total return figures
The solid red 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 line represents the performance of the Bombay Stock Exchange
Index, a broad-based, widely recognized unmanaged index of common stocks
traded in India. The Index's total return does not reflect any
commissions or expenses that would be incurred if an investor
individually purchased or sold the securities represented in
the Index.
<TABLE>
<CAPTION>
EV Traditional Greater India Fund
Financial Statements
Statement of Assets and Liabilities
December 31, 1995
<S> <C> <C>
Assets:
Investment in South Asia Portfolio, at value (Note 1A)
(identified cost, $20,154,521) $16,013,648
Receivable for Fund shares sold 77,888
Deferred organization expenses (Note 1D) 49,227
-----------
Total assets $16,140,763
Liabilities:
Payable for Fund shares redeemed $135,582
Payable to affiliate --
Trustees' fees 43
Accrued expenses 4,760
--------
Total liabilities 140,385
-----------
Net Assets for 2,440,091 shares of beneficial interest outstanding $16,000,378
===========
Sources of Net Assets:
Paid-in capital $22,509,400
Accumulated net realized loss from Portfolio
(computed on the basis of identified cost) (2,368,149)
Unrealized depreciation of investments from Portfolio
(computed on the basis of identified cost) (4,140,873)
-----------
Total $16,000,378
===========
Net Asset Value and Redemption Price Per Share
($16,000,378 (divided by) 2,440,091 shares of beneficial interest) $6.56
=====
Computation of Offering Price:
Offering price per share (100 (divided by) 95.25 of $6.56)
On sales of $100,000 or more the offering price is reduced.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Year Ended December 31, 1995
<S> <C> <C>
Investment Income (Loss) (Note 1B):
Dividend income allocated from Portfolio (net of foreign taxes, $34,492) $165,681
Interest income allocated from Portfolio 13,199
Expenses allocated from Portfolio (203,278)
-----------
Net investment loss from Portfolio $(24,398)
Expenses --
Management fee (Note 2) $37,343
Compensation of Trustees not members of the
Administrator's organization 165
Custodian fee (Note 2) 2,686
Distribution fee (Note 5) 74,685
Transfer and dividend disbursing agent fees 21,257
Printing and postage 37,127
Legal and accounting services 11,546
Registration fees 15,675
Amortization of organization expenses (Note 1D) 14,689
Miscellaneous 4,838
-----------
Total expenses 220,011
-----------
Net investment loss $(244,409)
-----------
Realized and Unrealized Gain (Loss) from Portfolio:
Net realized loss --
Investment transactions (identified cost basis) $(2,379,421)
Foreign currency transactions (36,841)
-----------
Net realized loss $(2,416,262)
Change in unrealized depreciation (2,956,134)
-----------
Net realized and unrealized loss $(5,372,396)
-----------
Net decrease in net assets from operations $(5,616,805)
===========
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statements of Changes in Net Assets
Year Ended December 31,
----------------------
1995 1994*
----------- -----------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From operations --
Net investment loss $ (244,409) $ (124,478)
Net realized gain (loss) on investments and foreign
currency transactions from Portfolio (2,416,262) 48,113
Change in unrealized depreciation from Portfolio (2,956,134) (1,184,739)
----------- -----------
Decrease in net assets from operations $(5,616,805) $(1,261,104)
----------- -----------
Transactions in shares of beneficial interest (Note 3):
Proceeds from sale of shares $13,462,880 $22,453,166
Cost of shares redeemed (9,766,956) (3,270,803)
----------- -----------
Increase in net assets from Fund share transactions $ 3,695,924 $19,182,363
----------- -----------
Net increase (decrease) in net assets $(1,920,881) $17,921,259
Net Assets:
At beginning of year 17,921,259 --
----------- -----------
At end of year (including net investment loss of $0
and $124,478, respectively) $16,000,378 $17,921,259
=========== ===========
*For the period from the start of business, May 2, 1994, to December 31, 1994.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Cash Flows
For the Year Ended December 31,1995
<S> <C>
Increase (Decrease) in Cash:
Cash Flows From (For) Operating Activities --
Purchase of interests in South Asia Portfolio $(13,471,405)
Withdrawal of interests in South Asia Portfolio 9,915,777
Operating expenses paid (209,949)
------------
Net cash used for operating activities $ (3,765,577)
------------
Cash Flows From (For) Financing Activities --
Proceeds from shares sold $ 13,475,144
Payments for shares redeemed (9,709,567)
------------
Net cash provided from financing activities $ 3,765,577
------------
Net increase in cash $ --
Cash at Beginning of Year --
------------
Cash at End of Year $ --
============
Reconciliation of Net Increase in Net Assets From
Operations to Net Cash From Operating Activities:
Net decrease in net assets from operations $(5,616,805)
Decrease in deferred organization expense 14,689
Decrease in payable to affiliates (230)
Decrease in accrued expenses and other liabilities (4,397)
Net decrease in investments 1,841,166
------------
Net cash used for operating activities $(3,765,577)
============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Year Ended December 31,
------------------------
1995 1994*
------- -------
<S> <C> <C>
Net asset value - Beginning of year $ 9.850 $10.000
------- -------
Loss from operations:
Net investment loss $(0.083) $(0.070)
Net realized and unrealized loss on investments (3.207) (0.080)
------- -------
Total loss from operations $(3.290) $(0.150)
------- -------
Net asset value -- End of year $ 6.560 $ 9.850
======= =======
Total Return (2) (33.40%) (1.50%)
Ratios/Supplemental Data:
Net assets, end of year (000 omitted) $16,000 $17,921
Ratio of net expenses to average net assets (1)(3) 3.24% 2.46%+
Ratio of net investment loss to average net assets (1.64%) (1.34%)+
*For the period from the start of business, May 2, 1994, to December 31,
1994.
+Annualized
(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.
(3) The expense ratio for the year ended December 31, 1995 has been
adjusted to relect a change in reporting requirements. The new reporting
guidelines require the Fund to increase its expense ratio by the effect
of any expense offset arrangements with its service providers. The
expense ratio for the year ended December 31, 1994 has not been adjusted
to reflect this change.
See notes to financial statements
</TABLE>
Notes to Financial Statements
(1) Significant Accounting Policies
EV Traditional 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
subcontinent. 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 (42.8% 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 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 $2,359,776 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
($4,099) and December 31, 2003 ($2,355,677). Additionally, at December
31, 1995, net capital losses of $254,094 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.
E. Distributions to Shareholders -- It is the present policy of the Fund
to make (a) at least one distribution annually (normally in December) of
all or substantially all of the investment income allocated to the Fund
by the Portfolio, if any, less the Fund's direct and allocated expenses
and (b) at least one distribution annually of all or substantially all
of the net realized capital gains allocated by the Portfolio to the
Fund, if any (reduced by any available capital loss carryforwards from
prior years). Shareholders may reinvest all distributions in shares of
the Fund without a sales charge at the per share net asset value as of
the close of business on the record date.
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 statement 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, $368,887 was reclassified from distributions in
excess of net investment income to paid-in capital due to permanent
differences between book and tax accounting for operating losses.
(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 year ended December 31, 1995 the fee was equivalent to
0.25% (annualized) of the Fund's average net assets for such period and
amounted to $37,343. 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 $18,000 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. EVD
received no CDSC during the period. Investors Bank & Trust Company (IBT)
serves as custodian of 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 daily average
cash balances the Fund maintains with IBT. Certain officers and Trustees
of the Fund and the Portfolio are directors/trustees of the above
organizations. In addition, investment adviser administrative fees, and
custody fees are paid by the Portfolio to EVM and its affiliates. See
Note 2 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.
(3) Shares of Beneficial Interest
The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Transactions in Fund shares were as follows:
Year Ended December 31
--------------------------
1995 1994*
--------- ---------
Sales 1,891,376 2,140,373
Redemptions (1,270,892) (320,766)
--------- ---------
Net increase 620,484 1,819,607
========= =========
*For the period from the start of business,
May 2, 1994, to December 31, 1994.
(4) Investment Transactions
Increases and decreases in the Fund's investment in the Portfolio for
the year ended December 31, 1995 aggregated $13,471,405 and $9,915,777,
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) 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 $68,315
representing 0.46% (annualized) 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. Such payments are made for personal services and/or
the maintenance of shareholder accounts. The Fund paid or accrued an
aggregate of $6,370 for the year ended December 31,1995 as service fees
under the Plan. EVD may pay up to the entire amount of the service fees
to authorized firms through which the Fund's shares
are distributed.
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 Greater India Fund (one of the series constituting Eaton
Vance Special Investment Trust) as of December 31, 1995, the related
statements of operations and cashflows for the year then ended, and the
statement of changes in net assets and the financial highlights for the
year ended December 31, 1995 and the period from the start of business,
May 2, 1994, to December 31, 1994. These financial statements and
financial highlights are the responsibility of the Trust's management.
Our responsibility is to express an opinion on these financial
statements and financial highlights based upon our 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 Greater India Fund series of the Eaton Vance Special
Investment Trust at December 31, 1995, the results of its operations,
its cashflows, 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
<TABLE>
<CAPTION>
South Asia Portfolio
Portfolio of Investments
December 31, 1995
Shares Value
- -----------------------------------------------------------------------------------------------------
Common Stocks -- 89.7%
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
BANGLADESH -- 4.5%
Apex Spinning & Knitting 40,000 $ 222,164
Apex Tannery Ltd 20,000 378,449
Eastern Housing Ltd. (1) 90,300 295,586
Monno Fabrics Ltd. (1)(3) 133,000 489,571
Square Pharmaceuticals Ltd. 16,000 315,995
------------
$ 1,701,765
------------
INDIA -- 71.4%
Alacrity Housing Ltd. 321,000 $ 228,210
Asian Paints (India) Ltd. (1)(2) 66,800 613,576
Bajaj Auto Ltd. 53,500 1,084,758
Bellary Steels & Alloys (2) 310,000 204,962
DCL Polyesters 1,000 597
Enkay Synthetics Ltd. (1)(2) 51,800 73,800
Essar Gujarat (2) 5,800 6,466
Flex Industries 4,400 18,299
Flex Industries (wts) (1)(3) 4,274 16,560
Himachal Futuristic Communications (2) 7,800 11,312
Himachal Telematics Ltd (2) 45,700 38,728
Hindalco Industries Ltd. GDR (1) 36,400 1,228,500
Hindustan Petroleum Corp. 50,000 419,451
Hoechst India Ltd. 130,000 916,821
Hoechst Schering Agrevo 20,000 250,249
Hotel Leela Venture Ltd. (2) 2,400 7,729
Hotel Leela Venture (wts) (1) 42,360 63,242
IFB Industries Ltd. (2) 107,800 435,308
Indo Gulf Fertilizers (2) 3,200 4,614
Infosys Technologies Ltd. 85,500 992,009
Innovation Medi Equipment Ltd. (2) 150,000 34,125
I.T.C. Limited GDR (1) 100,000 850,500
Karur Vysya Bank (1)(2) 100,500 671,620
KEC International Ltd. 165,200 488,577
Kotak Mahindra Finance Ltd (2) 224,000 758,026
Larsen & Toubro (2) 105,850 792,107
Larsen & Toubro Ltd. GDR (1) 50,700 899,925
Madras Refinery Ltd. 187,950 305,723
Mahindra & Mahindra 216,667 1,281,577
Mahindra & Mahindra GDR (1) 40,000 510,000
Motor Industries 3,850 649,239
Murudeshwar Ceramics Ltd. (2) 187,200 436,525
Murudeshwar Ceramics (rts) (1) 131,040 7,452
Nagarjuna Construction (2) 50,000 224,655
Nicholas Piramel Ltd. 27,950 182,810
Orchid Chemicals & Pharma (2) 251,700 486,723
Paper Products Ltd. (1)(2) 50,000 163,515
Paper Products (rts) (1) 12,500 35,547
Punjab Wireless Systems (2) 100,000 480,592
Ranbaxy Laboratories Ltd. GDR 53,700 1,342,500
Raymond Woolen Mills GDR (1) 30,000 510,000
Rubber Products (2) 132,000 69,069
S & S Industries & Enterprise (2) 356,000 177,165
Sakthi Sugars (2) 400 398
Shaan Interwell (India) (2) 112,700 121,786
State Bank of India-New (2) 225,000 1,267,525
Tata Chemicals (2) 92,110 535,267
Tata Engineering & Locomotive (wts) (1) 65,714 336,784
Tata Engineering & Locomotive GDR (1) 130,142 1,691,851
Thermax Limited (2) 90,000 837,040
Thiru Arooran Sugars (2) 100,000 247,405
Triveni Engineering (2) 190,850 346,531
TTG Industries Ltd. (2) 140,300 371,048
T.V.S. Suzuki (2) 228,550 1,411,661
Usha Beltron Ltd. GDR 88,450 210,069
Videsh Sanchar Nigam Ltd. (1)(2) 17,000 406,086
VST Tillers (2) 94,200 144,655
W.S. Industries Ltd. 102,500 113,678
Zuari Agrochemicals (2) 70,000 715,626
------------
$26,730,573
------------
Pakistan -- 8.2%
Adamjee Insurance Co. 125,000 $ 378,115
Hub Power Company Ltd. GDR (1) 20,000 353,000
Nishat Chunian Ltd. (1) 306,000 114,026
Pakistan State Oil Co. Ltd. 97,409 754,429
Pakistan Telecommunications GDR (1) 14,750 1,283,250
Searle Pakistan 137,459 184,801
------------
$ 3,067,621
------------
Sri Lanka -- 5.6%
Dev Fin Corp Of Ceylon 35,733 $ 198,333
Hayleys Ltd. 150,933 488,682
John Keells Holdings 86,857 224,977
John Keells Holdings Ltd. GDR 104,000 520,000
Kelani Tyres 480 113
National Development Bank 53,900 219,389
Royal Ceramics 359,000 209,223
Sampath Bank 186,000 156,577
Vanik Incorporation Ltd. 228,750 88,876
------------
$ 2,106,170
------------
Total Common Stocks (identified cost, $47,184,028) $33,606,129
------------
- -----------------------------------------------------------------------------------------------------
Bonds -- 0.1%
- -----------------------------------------------------------------------------------------------------
Principal
Amount
(000) omitted Value
Flex Industries, 13.5%, 12/31/99 (3) U.S. $836 $ 23,773
Hotel Leela Venture Ltd. NCD 14% 4/8/03 27 639
------------
Total Bonds (at identified cost, $27,768) $ 24,412
------------
Total Investments -- 89.8% (identified cost, $47,211,796) $33,630,541
Other assets, less liabilities -- 10.2% 3,804,796
------------
Net Assets -- 100% $37,435,337
============
GDR--Global depository receipt
(1) Non-income producing security
(2) The above securities held by the Portfolio on December 31, 1995
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 December 31,
1995, the aggregate value of the securities in registration
amounted to $2,852,506, representing 7.62% 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
December 31, 1995
<S> <C> <C>
Assets:
Investments, at value (Note 1A) (identified cost, $47,211,796) $ 33,630,541
Cash 2,787,764
Foreign currency, at value (identified cost, $1,638,937) 1,630,860
Receivable for investments sold 494,732
Dividends and interest receivable 148,258
Deferred organization expenses (Note 1C) 57,893
--------------
Total assets $ 38,750,048
Liabilities:
Payable for investments purchased $ 1,245,149
Accrued expenses 69,562
--------------
Total liabilities 1,314,711
--------------
Net Assets applicable to investors' interest in Portfolio $ 37,435,337
==============
Sources of Net Assets:
Net proceeds from capital contributions and withdrawals $ 51,058,489
Net unrealized depreciation of investments and foreign currency
(computed on the basis of identified cost) (13,623,152)
--------------
Total $ 37,435,337
==============
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Operations
For the Year Ended December 31, 1995
<S> <C> <C>
Investment Income:
Income -
Dividends (net of foreign taxes, $101,627) $ 492,310
Interest 39,496
--------------
Total income 531,806
Expenses -
Investment adviser fee (Note 2) $ 336,088
Administration fee (Note 2) 112,256
Compensation of Trustees not members of the
Investment Adviser's or Administrator's organization 13,750
Custodian fee (Note 2) 260,425
Legal and accounting services 44,624
Amortization of organization expenses (Note 1C) 18,156
Miscellaneous 5,943
-------------
Total expenses $ 791,242
Deduct reduction of custodian fee (Note 2) 180,602
-------------
Net expenses 610,640
--------------
Net investment loss $ (78,834)
--------------
Realized and Unrealized Loss on Investments:
Net realized loss -
Investments (identified cost basis) $ (7,404,454)
Foreign currency transactions (118,293)
--------------
Net realized loss on investments $ (7,522,747)
Change in unrealized depreciation -
Investments (identified cost basis) $ (9,853,267)
Foreign currency (42,122)
--------------
Net unrealized depreciation (9,895,389)
--------------
Net realized and unrealized loss on investments $ (17,418,136)
--------------
Net decrease in net assets from operations $ (17,496,970)
==============
See notes to financial statements
Statements of Changes in Net Assets
Year Ended December 31,
---------------------------------
1995 1994*
---------- ---------
Increase (Decrease) in Net Assets:
From operations -
Net investment income (loss) $ (78,834) $ 1,649
Net realized gain (loss) on investments and foreign currency transactions (7,522,747) 137,750
Change in unrealized depreciation of investments (9,895,389) (3,727,763)
-------------- -------------
Decrease in net assets from operations $ (17,496,970) $ (3,588,364)
-------------- -------------
Capital transactions:
Contributions $ 22,408,418 $ 67,765,119
Withdrawals (24,329,701) (7,423,185)
-------------- -------------
Increase (decrease) in net assets resulting from capital transactions $ (1,921,283) $ 60,341,934
-------------- -------------
Net increase (decrease) in net assets $ (19,418,253) $ 56,753,570
Net Assets:
At beginning of year 56,853,590 100,020
-------------- -------------
At end of year $ 37,435,337 $ 56,853,590
============== -------------
* For the period from the start of business, May 2, 1994, to December 31, 1994.
- ----------------------------------------------------------------------------------------------------------------------
Supplementary Data
- ----------------------------------------------------------------------------------------------------------------------
Year Ended December 31,
-------------------------------
1995 1994*
---------- ----------
Ratios (to average daily net assets):
Expenses (1) 1.76% 1.16%+
Net investment loss (0.18%) 0.01%+
Portfolio Turnover 38% 1%
+ Annualized.
* For the period from the start of business, May 2, 1994, to
December 31, 1994.
(1) The expense ratio for the year ended December 31, 1995 has been
adjusted to reflect a change in reporting requirements. The new
reporting quidelines 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 year ended December
31, 1994 has not been adjusted to reflect this change.
See notes to financial statements
</TABLE>
<TABLE>
<CAPTION>
Statement of Cash Flows
For the Year Ended December 31,1995
<S> <C>
Increase (Decrease) in Cash:
Cash Flows From (For) Operating Activities -
Purchase of investments $ (15,872,772)
Proceeds from sale of investments 15,343,973
Dividends and interest received 534,115
Operating expenses paid (668,093)
Foreign currency transactions (1,644,555)
---------------
Net cash used for operating activities $ (2,307,332)
---------------
Cash Flows From (For) Financing Activities -
Proceeds from capital contributions $ 22,408,418
Payments for capital withdrawals (24,329,701)
---------------
Net cash used for financing activities (1,921,283)
---------------
Net decrease in cash $ (4,228,615)
Cash at Beginning of Period 7,016,379
---------------
Cash at End of Period $ 2,787,764
===============
Reconciliation of Net Increase in Net Assets From
Operations to Net Cash From Operating Activities:
Net decrease in net assets from operations $ (17,496,970)
Increase in receivable for investments sold (449,969)
Increase in foreign currency (1,484,140)
Decrease in dividends and interest receivable 2,309
Decrease in deferred organization expenses 18,156
Decrease in payable to affiliates (4,585)
Decrease in accrued expenses and other liabilities (71,024)
Increase in payable for investments purchased 210,355
Net decrease in investments 16,968,536
---------------
Net cash used for operating activities $ (2,307,332)
===============
See notes to financial statements
</TABLE>
(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. 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.
(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 year ended December 31, 1995, the annualized
adviser fee was 0.75% of average net assets and amounted to $336,088.
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 and amounted to $112,256. 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 Portfolio'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 trustees of the above
organizations.
(3) Investment Transactions
For the year ended December 31, 1995, purchases and sales of
investments, other than short-term obligations, aggregated $16,083,127
and $15,793,942 respectively.
(4) Federal Income Tax Basis of Investments
The cost and unrealized appreciation (depreciation) in value of the
investments owned at December 31, 1995, as computed on a federal income
tax basis, are as follows:
Aggregate cost $47,211,796
===========
Gross unrealized depreciation $15,434,171
Gross unrealized appreciation 1,852,916
-----------
Net unrealized depreciation $13,581,255
===========
(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.
Independent Auditor's Report
The Trustees and Investors of South Asia Portfolio:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of South Asia Portfolio as of
December 31, 1995, the related statements of operations and cashflows
for the year then ended and the statement of changes in net assets and
the supplementary data for the year ended December 31, 1995 and the
period from the start of business, May 2, 1994, to December 31, 1994.
These financial statements and supplementary data are the responsibility
of the Portfolio's management. Our responsibility is to express an
opinion on these financial statements and supplementary data based upon
our 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
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 South Asia
Portfolio at December 31, 1995, the results of its operations, its
cashflows, 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
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Investment Management
EV Traditional
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 Assistant Secretary
Trustees
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking,
Harvard University Graduate School of Business Administration
Stuart Hamilton Leckie
Managing Director and Actuary, Wyatt Company,
Hong Kong
Hon. Edward K.Y. Chen
Professor and Director, Center for Asian Studies,
University of Hong Kong
30
31
