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[LOGO]
[PHOTO OF THE EARTH FROM SPACE]
Semiannual Report June 30, 1999
EATON VANCE
[INDIAN STATUE] GREATER INDIA
Fund
Global Management-Global Distribution
[PHOTO OF ELEPHANT RIDERS IN INDIA]
<PAGE>
Eaton Vance Greater India Fund as of June 30, 1999
INVESTMENT UPDATE
[PHOTO]
Scobie D. Ward
Co-Portfolio Manager
Investment Environment
- -----------------------------
- - India's stock market reached new highs during the first half of 1999. Optimism
over a ceasefire in Kashmir and growing evidence of an economic recovery
helped fuel the advance. The Bombay Stock Exchange surpassed the levels last
seen in 1994, when India was in the first stages of its economic reform
initiatives.
- - The economy has demonstrated increasing signs of a turnaround in recent
months. Industrial production rose a robust 7.2% in May, while inflation has
remained under control. However, the improving economic trends have not yet
been widely reflected in corporate earnings results.
- - The low level of inflation was another positive for the economy. With
wholesale inflation under 4% and a relatively stable currency, there is
growing speculation that the Reserve Bank of India may soon reduce short-term
interest rates. Lower rates could further improve the outlook for India's
equity markets.
The Fund
- -----------------------------
Performance for the Past Six Months
- - The Fund's Class A shares had a total return of 28.20% during the six months
ended June 30, 1999.(1) This return resulted from an increase in net asset
value per share (NAV) to $7.41 on June 30, 1999 from $5.78 on December 31,
1998.
- - The Fund's Class B shares had a total return of 27.92% during the six months
ended June 30, 1999.(1) This return resulted from an increase in net asset
value per share (NAV) to $7.24 on June 30, 1999 from $5.66 on December 31,
1998.
- - The Bombay Stock Exchange Index - an unmanaged index of common stocks traded
in the India market - had a total return of 28.92% for the six months ended
June 30, 1999.(2)
Recent Portfolio Developments
- - In a slowly-recovering economy, computer software companies remained a major
focus of the Portfolio. The sector has retained its momentum and has benefited
from the strong global demand for new products and India's renowned
programming expertise.
- - Drugs have been a defensive sector for the Portfolio, while waiting for the
economy to revive. With its expanding consumer class and widening government
initiatives to promote health awareness, India has become a major
pharmaceutical market.
- - Effective August 31, 1999, Zaheer Sitabkhan was appointed Director of Lloyd
George Management (LGM) and joined Scobie D. Ward as co-portfolio manager of
the South Asia Portfolio. Prior to joining LGM in 1995, Mr. Sitabkhan was
employed as Director of Business Development by Quality Sciences, Inc., a
Cleveland-based software company.
Selected Portfolio Investments
- - Hindustan Lever Ltd. was the Portfolio's largest holding. The company is a
leader in the personal care products sector, including deodorants, soaps, and
toothpaste. Elsewhere in the consumer area, Smithkline Beechham Consumer
Healthcare Ltd. realized strong earnings growth in India's expanding
pharmaceutical and healthcare market.
- - Zee Telefilms Ltd. is a fast-growing media, programming, and cable company.
The company was recently awarded a license by the Ministry of
Telecommunications to provide nationwide Internet service. Zee has announced
plans to list its shares on the New York Stock Exchange, which will introduce
the company to a still-wider universe of investors.
- - Infosys Technologies Ltd. is one of India's largest software companies. First
quarter earnings more than doubled as revenues rose 68%. Long a leader in the
financial and banking-related fields, Infosys is pioneering new applications
for E-commerce and the Internet
- --------------------------------------------------------------------------------
Mutual fund shares are not insured by the FDIC and are not deposits or other
obligations of, or guaranteed by, any depository institution. Shares are subject
to investment risks, including possible loss of principal invested.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund Information
as of June 30, 1999 1
<TABLE>
<CAPTION>
Performance(3) Class A Class B
- ----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- ----------------------------------------------------------------------------
<S> <C> <C>
One Year 36.21% 35.58%
Five Years -6.01 -6.42
Life of Fund+ -5.64 -6.07
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- ----------------------------------------------------------------------------
One Year 28.42% 30.58%
Five Years -7.12 -6.80
Life of Fund+ -6.72 -6.25
+Inception date: 5/2/94
</TABLE>
<TABLE>
<CAPTION>
Ten Largest Equity Holdings(4)
- ----------------------------------------------------------------------------
<S> <C>
Hindustan Lever Ltd. 9.2%
Infosys Technologies Ltd. 8.7
Punjab Tractors Ltd. 7.2
NIIT Ltd. 5.2
Zee Telefilms Ltd. 5.1
Hero Honda Motors Ltd. 5.0
ITC Ltd. 5.0
Hindustan Lever Chemicals Ltd. 4.7
Smithkline Beecham Consumer
Healthcare Ltd. 4.6
BFL Software Ltd. 4.6
</TABLE>
(1) These returns do not include the 5.75% maximum sales charge for the Fund's
Class A shares or the applicable contingent deferred sales charges (CDSC)
for the Fund's Class B shares. (2)It is not possible to invest directly in
an Index. (3)Returns are historical and are calculated by determining the
percentage change in net asset value with all distributions reinvested. SEC
average annual returns for Class A reflect a 5.75% sales charge; for
Class B, returns reflect applicable CDSC based on the following schedule:
5%-1st and 2nd years; 4%-3rd year; 3%-4th year; 2%-5th year; 1%-6th year.
(4)Based on market value. Ten largest holdings represent 59.3% of the
Portfolio's net assets. Holdings are subject to change.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate so that shares, when redeemed, may be worth
more or less than their original cost.
2
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF JUNE 30, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
<S> <C>
Assets
- -------------------------------------------------------
Investment in South Asia Portfolio, at
value
(identified cost, $24,686,034) $ 34,200,828
Receivable for Fund shares sold 1,203
- -------------------------------------------------------
TOTAL ASSETS $ 34,202,031
- -------------------------------------------------------
Liabilities
- -------------------------------------------------------
Payable for Fund shares redeemed $ 107,077
Payable to affiliate for Trustees' fees 305
Other accrued expenses 52,861
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TOTAL LIABILITIES $ 160,243
- -------------------------------------------------------
NET ASSETS $ 34,041,788
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Sources of Net Assets
- -------------------------------------------------------
Paid-in capital $ 42,683,073
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (17,574,193)
Accumulated net investment loss (581,886)
Net unrealized appreciation from
Portfolio (computed on the basis of
identified cost) 9,514,794
- -------------------------------------------------------
TOTAL $ 34,041,788
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Class A Shares
- -------------------------------------------------------
NET ASSETS $ 7,950,521
SHARES OUTSTANDING 1,072,796
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 7.41
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 94.25 of $7.41) $ 7.86
- -------------------------------------------------------
Class B Shares
- -------------------------------------------------------
NET ASSETS $ 26,091,267
SHARES OUTSTANDING 3,604,870
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 7.24
- -------------------------------------------------------
</TABLE>
On sales of $50,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 1999
<S> <C>
Investment Income
- ------------------------------------------------------
Dividends allocated from Portfolio
(net of foreign taxes, $2,055) $ 308,740
Interest allocated from Portfolio 1,687
Expenses allocated from Portfolio (536,204)
- ------------------------------------------------------
NET INVESTMENT LOSS FROM PORTFOLIO $ (225,777)
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Management fee $ 56,424
Trustees fees and expenses 663
Distribution and service fees
Class A 21,404
Class B 168,258
Transfer and dividend disbursing agent
fees 39,365
Registration fees 17,444
Amortization of organization expenses 9,676
Legal and accounting services 8,780
Custodian fee 5,399
Printing and postage 1,100
Miscellaneous 7,964
- ------------------------------------------------------
TOTAL EXPENSES $ 336,477
- ------------------------------------------------------
NET INVESTMENT LOSS $ (562,254)
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Realized and Unrealized
Gain (Loss) from Portfolio
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 13,661,932
Foreign currency transactions (197,352)
- ------------------------------------------------------
NET REALIZED GAIN $ 13,464,580
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments $ 724,318
Foreign currency (31,433)
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ 692,885
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NET REALIZED AND UNREALIZED GAIN $ 14,157,465
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 13,595,211
- ------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF JUNE 30, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
Increase (Decrease) JUNE 30, 1999 YEAR ENDED
in Net Assets (UNAUDITED) DECEMBER 31, 1998
<S> <C> <C>
- --------------------------------------------------------------------------------
From operations --
Net investment loss $ (562,254) $ (1,163,871)
Net realized gain (loss) 13,464,580 (12,535,741)
Net change in unrealized
appreciation (depreciation) 692,885 7,673,849
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 13,595,211 $ (6,025,763)
- --------------------------------------------------------------------------------
Transactions in shares of
beneficial interest --
Proceeds from sale of shares
Class A $ 4,626,101 $ 2,508,762
Class B 1,685,133 3,334,761
Issued in reorganization of EV
Traditional Greater India Fund
Class A -- 12,518,640
Cost of shares redeemed
Class A (6,922,685) (6,123,286)
Class B (30,036,477) (23,931,103)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (30,647,928) $ (11,692,226)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (17,052,717) $ (17,717,989)
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 51,094,505 $ 68,812,494
- --------------------------------------------------------------------------------
AT END OF PERIOD $ 34,041,788 $ 51,094,505
- --------------------------------------------------------------------------------
Accumulated net
investment loss included
in net assets
- --------------------------------------------------------------------------------
AT END OF PERIOD $ (581,886) $ (19,632)
- --------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999
Increase (Decrease) in Cash (UNAUDITED)
<S> <C>
- -----------------------------------------------------------
Cash flows from (Used for) Operating
Activities --
Purchase of interests in South Asia
Portfolio $ (6,379,130)
Withdrawal of interests in South Asia
Portfolio 37,525,412
Operating expenses paid (358,669)
- -----------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES $ 30,787,613
- -----------------------------------------------------------
Cash flows from (Used for) Financing
Activities --
Proceeds from shares sold $ 6,379,157
Payments for shares redeemed (37,166,770)
- -----------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES $ (30,787,613)
- -----------------------------------------------------------
NET INCREASE IN CASH $ --
- -----------------------------------------------------------
CASH AT BEGINNING OF PERIOD $ --
- -----------------------------------------------------------
CASH AT END OF PERIOD $ --
- -----------------------------------------------------------
Reconciliation of Net Decrease in Net Assets
From Operations to Net Cash From
Operating Activities
- -----------------------------------------------------------
Net increase in net assets from
operations $ 13,595,211
Decrease in deferred organization
expenses 9,676
Increase in payable to affiliate 99
Decrease in accrued expenses (31,967)
Net decrease in investments 17,214,594
- -----------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES $ 30,787,613
- -----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF JUNE 30, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999
(UNAUDITED)
---------------------------
CLASS A CLASS B
<S> <C> <C>
- -------------------------------------------------------------
Net asset value -- Beginning
of period $ 5.780 $ 5.660
- -------------------------------------------------------------
Net investment loss $(0.085) $(0.133)
Net realized and unrealized
gain (loss) 1.715 1.713
- -------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 1.630 $ 1.580
- -------------------------------------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 7.410 $ 7.240
- -------------------------------------------------------------
TOTAL RETURN(3) 28.20% 27.92%
- -------------------------------------------------------------
Ratios/Supplemental Data
- -------------------------------------------------------------
Net assets, end of period
(000's omitted) $ 7,951 $26,091
Ratios (As a percentage of
average daily net assets):
Expenses(4)(5) 3.55%(6) 3.98%(6)
Expenses after custodian
fee reduction(4) 3.53%(6) 3.96%(6)
Net investment loss (2.02)%(6) (2.61)%(6)
- -------------------------------------------------------------
<CAPTION>
YEAR ENDED DECEMBER 31,
1998(1) 1997 1996(1) 1995 1994(2)
--------------------- -------- -------- -------- --------
CLASS A CLASS B CLASS B CLASS B CLASS B CLASS B
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------
Net asset value -- Beginning
of period $ 6.340 $ 6.230 $ 5.910 $ 6.550 $ 9.840 $10.000
- ------------------------------
Net investment loss $(0.082) $(0.110) $(0.126) $(0.099) $(0.176) $(0.065)
Net realized and unrealized
gain (loss) (0.478) (0.460) 0.446 (0.541) (3.114) (0.095)
- ------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $(0.560) $(0.570) $ 0.320 $(0.640) $(3.290) $(0.160)
- ------------------------------
NET ASSET VALUE -- END OF
PERIOD $ 5.780 $ 5.660 $ 6.230 $ 5.910 $ 6.550 $ 9.840
- ------------------------------
TOTAL RETURN(3) (8.83)% (9.15)% 5.42% (9.77)% (33.43)% (1.60)%
- ------------------------------
Ratios/Supplemental Data
- ------------------------------
Net assets, end of period
(000's omitted) $ 8,031 $43,063 $68,812 $74,661 $21,041 $38,925
Ratios (As a percentage of
average daily net assets):
Expenses(4)(5) 3.18% 3.69% 3.08% 2.88% 3.31% 2.54%(6)
Expenses after custodian
fee reduction(4) 3.08% 3.59% 3.05% 2.65% 2.90% --
Net investment loss (1.38)% (1.87)% (1.67)% (1.46)% (1.74)% (1.42)%(6)
- ------------------------------
</TABLE>
(1) Net investment loss per share was computed using average shares
outstanding.
(2) For the period from the start of business, May 2, 1994, to December 31,
1994.
(3) 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
reinvested at the net asset value on the reinvestment date. Total return is
not computed on an annualized basis.
(4) Includes the Fund's share of the Portfolio's allocated expenses.
(5) The expense ratios for the year ended December 31, 1995 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Fund, as well as its
corresponding Portfolio, to increase its expense ratio by the effect of any
expense offset arrangements with its service providers. The expense ratio
for the prior period has not been adjusted to reflect this change.
(6) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
Eaton Vance Greater India Fund (the Fund) is a mutual fund seeking long-term
capital appreciation through the purchase of an interest in a separate
investment company which invests primarily in equity securities of companies
in India and surrounding countries of the Indian sub-continent. The Fund is a
diversified series of Eaton Vance Special Investment Trust (the Trust). The
Trust is an entity of the type commonly known as a Massachusetts business
trust and is registered under the Investment Company Act of 1940, as amended,
as an open-end management investment company. The Fund offers two classes of
shares. Class A shares are generally sold subject to a sales charge imposed
at time of purchase. Class B shares are sold at net asset value and are
subject to a contingent deferred sales charge (See Note 7). Each class
represents a pro rata interest in the Fund, but votes separately on
class-specific matters and (as noted below) is subject to different expenses.
Realized and unrealized gains and losses and net investment income, other
than class specific expenses, are allocated daily to each class of shares
based on the relative net assets of each class to the total net assets of the
Fund. Each class of shares differs in its distribution plan and certain other
class specific expenses. 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 (95.3% at June 30, 1999). 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 Valuation -- Valuation of securities by the Portfolio is discussed
in Note 1A 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 taxable income, including any
net realized gain on investments, if any. Accordingly, no provision for
federal income or excise tax is necessary. At December 31, 1998, the Fund,
for federal income tax purposes had a capital loss carryover of $29,146,282
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. A portion of such capital loss carryovers were acquired
through the Fund Reorganization (See Note 8) and may be subject to certain
limitations. The amounts and expiration dates of the capital loss carryovers
are as follows: December 31, 2002 ($12,117), December 31, 2003 ($6,518,175),
December 31, 2004 ($6,203,069), December 31, 2005 ($5,626,667), December 31,
2006 ($10,786,254).
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 Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
F Other -- Investment transactions are accounted for on a trade date basis.
G Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
to the Fund and the Portfolio. Pursuant to the respective custodian
agreements, IBT receives a fee reduced by credits which are determined based
on the average daily cash balances the Fund or the Portfolio maintains with
IBT. All significant credit balances used to reduce the Fund's custodian fees
are reported as a reduction of expenses on the Statement of Operations.
6
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
H Interim Financial Statements -- The interim financial statements relating to
June 30, 1999 and for the six month period then ended have not been audited
by independent certified public accountants, but in the opinion of the Fund's
management, reflect all adjustments, consisting only of normal recurring
adjustments, necessary for the fair presentation of the financial statements.
2 Management Fee and Other Transactions with Affiliates
- -------------------------------------------
The management fee is earned by Eaton Vance Management (EVM) as compensation
for management and administration of the business affairs of the Fund. The
fee is based on a percentage of average daily net assets. For the six months
ended June 30, 1999, the fee was equivalent to 0.25% (annualized) of the
Fund's average net assets for such period and amounted to $56,424. 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. In addition, investment adviser and administrative fees are
paid by the Portfolio to EVM and its affiliates. See Note 2 of the
Portfolio's Notes to Financial Statements which are included elsewhere in
this report.
Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM and the Funds'
principal underwriter, received $1,253 from the Eaton Vance Greater India
Fund as its portion of the sales charge on sales of Class A shares for the
six months ended June 30, 1999.
Certain officers and Trustees of the Fund and of the Portfolio are officers
of the above organizations.
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:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
CLASS A (UNAUDITED) DECEMBER 31, 1998
<S> <C> <C>
- ------------------------------------------------------------------------------
Sales 636,098 416,410
Redemptions (952,891) (999,941)
Issued to EV Traditional Greater India
Fund shareholders -- 1,973,120
- ------------------------------------------------------------------------------
NET INCREASE (DECREASE) (316,793) 1,389,589
- ------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999 YEAR ENDED
CLASS B (UNAUDITED) DECEMBER 31, 1998
<S> <C> <C>
- ------------------------------------------------------------------------------
Sales 246,441 557,166
Redemptions (4,248,648) (3,998,326)
- ------------------------------------------------------------------------------
NET DECREASE (4,002,207) (3,441,160)
- ------------------------------------------------------------------------------
</TABLE>
4 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 net
investment income allocated to the Fund by the Portfolio, if any, less the
Fund's direct 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 ex-dividend 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 losses. Permanent differences
between book and tax accounting are reclassified to paid-in capital.
5 Investment Transactions
- -------------------------------------------
For the six months ended June 30, 1999, increases and decreases in the Fund's
investment in the Portfolio aggregated $6,379,130 and $37,525,412,
respectively.
6 Distribution Plan
- -------------------------------------------
The Fund has adopted distribution plans (Class A Plan, Class B Plan, the
Plans) pursuant to Rule 12b-1 under the Investment Company Act of 1940.
The Class A Plan provides for the payment of a monthly distribution fee to
the Principal Underwriter, Eaton Vance Distributors, Inc. (EVD), in an amount
equal to the aggregate of (a) 0.50% (annualized) of that portion of the
Fund's average daily net assets attributable to Class A shares which have
remained outstanding for less than one
7
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
year and (b) 0.25% of that portion of the Fund's average daily net assets
attributable to Class A shares which have remained outstanding for more than
one year.
The Class B Plan provides for the payment of a monthly distribution fee to
EVD at an annual rate not to exceed 0.75% of the Fund's average daily net
assets attributable to Class B shares. The Fund will automatically
discontinue payments to EVD under the Class B Plan during any period in which
there are no outstanding Uncovered Distribution Charges, which are equivalent
to the sum of (i) 5% of the amount received by the Fund for each Class B
share sold plus, (ii) interest calculated by applying the rate of 1% over the
prevailing prime rate to the outstanding balance of Uncovered Distribution
Charges of EVD reduced by the aggregate amount of contingent deferred sales
charges (See Note 7), daily amounts theretofore paid to EVD by Lloyd George
Investment Management (Bermuda) Limited, investment adviser for the Portfolio
(Adviser), in consideration of EVD's distribution effort. The amount of
Uncovered Distribution Charges EVD calculated under the Class B Plan was
approximately $1,929,000 at June 30, 1999. The amounts paid by the Adviser to
EVD are equivalent to 0.15% of the Fund's average net assets attributable to
Class B shares and are made from the Adviser's own resources, not Fund
assets.
Distribution fee payments are made for providing ongoing distribution
services to the Fund. The amount payable to EVD by the Fund with respect to
each day is accrued on such day as a liability of the Fund and, accordingly,
reduces the Fund's net assets. The Fund paid or accrued $14,077 and $137,167
for Class A and Class B shares, respectively, to or payable to EVD for the
six months ended June 30, 1999, representing 0.33% and 0.75% of average daily
net assets attributable to Class A and Class B shares, respectively.
In addition, the Plans authorize the Fund to make payments of service fees to
EVD, investment dealers and other persons in an amount equal to 0.25%, on an
annual basis, of the Fund's average daily net assets attributable to Class A
shares which have remained outstanding for more than one year and in amounts
not exceeding 0.25% of the Fund's average daily net assets attributable to
Class B shares which have remained outstanding for more than one year. Such
payments are made for personal services and/or the maintenance of shareholder
accounts. Service fees are separate and distinct from the sales commissions
and distribution fees payable by the Fund to EVD and, as such, are not
subject to automatic discontinuance where there are no outstanding Uncovered
Distribution Charges of EVD. For the six months ended June 30, 1999, service
fees amounted to $7,327 and $31,091 for Class A and Class B shares,
respectively, representing 0.17% and 0.17% of average daily net assets
attributable to Class A and Class B shares, respectively.
Certain officers and Trustees of the Fund are officers of the above
organizations.
7 Contingent Deferred Sales Charge
- -------------------------------------------
A contingent deferred sales charge (CDSC) generally is imposed on redemptions
of Class B shares made within six years of purchase. Generally, the CDSC is
based upon the lower of the net asset value at date of redemption or date of
purchase. No charge is levied on shares acquired by reinvestment of dividends
or capital gains distributions. The CDSC is imposed at declining rates that
begin at 5% in the case of redemptions in the first and second year after
purchase, declining one percentage point each subsequent year. No CDSC is
levied on shares which have been sold to EVM or its affiliates or to their
respective employees or clients and may be waived under certain other limited
conditions. CDSC charges are paid to EVD to reduce the amount of Uncovered
Distribution Charges calculated under the Fund's Distribution Plan. CDSC
charges received when no Uncovered Distribution Charges exist will be
credited to the Fund. For the six months ended June 30, 1999, EVD received
approximately $648,000 of CDSC paid by Class B shareholders.
8 Transfer of Net Assets
- -------------------------------------------
On January 1, 1998, EV Marathon Greater India Fund acquired the net assets of
the EV Traditional Greater India Fund pursuant to an Agreement and Plan of
Reorganization dated June 23, 1997. In accordance with the agreement, EV
Marathon Greater India Fund, at the closing, issued 1,973,120 Class A shares
of the Fund having an aggregate value of $12,518,640. As a result the Fund
issued one Class A share for each share of EV Traditional Greater India Fund.
The transaction was structured for tax purposes to qualify as a tax-free
reorganization under the Internal Revenue Code. The EV Traditional Greater
India Fund's net assets at the date of the transaction were $12,518,640,
including $744,300 of unrealized appreciation. Directly after the merger, the
combined net assets of the Eaton Vance Greater India Fund (formerly "EV
Marathon Greater India Fund") were $81,331,134 with a net asset value of
$6.34 and $6.23 for Class A and Class B, respectively.
8
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF JUNE 30, 1999
INVESTMENT MANAGEMENT
EATON VANCE GREATER INDIA FUND
Officers
James B. Hawkes
President and Trustee
Edward E. Smiley, Jr.
Vice President
Michael B. Terry
Vice President
James L. O'Connor
Treasurer
Alan R. Dynner
Secretary
Trustees
Jessica M. Bibliowicz
President and Chief Executive Officer
National Financial Partners
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
Lynn A. Stout
Professor of Law,
Georgetown University Law Center
Jack L. Treynor
Investment Adviser and Consultant
SOUTH ASIA PORTFOLIO
Officers
Hon. Robert Lloyd George
President and Trustee
James B. Hawkes
Vice President and Trustee
Scobie Dickinson Ward
Vice President, Assistant
Treasurer and Assistant
Secretary
William Walter Raleigh Kerr
Vice President and Assistant
Treasurer
James L. O'Connor
Vice President and Treasurer
Alan R. Dynner
Secretary
Trustees
Hon. Edward K.Y. Chen
President of Lingnan College,
University of Hong Kong
Donald R. Dwight
President, Dwight Partners, Inc.
Samuel L. Hayes, III
Jacob H. Schiff Professor of Investment Banking
Emeritus, Harvard University Graduate School of
Business Administration
Norton H. Reamer
Chairman and Chief Executive Officer,
United Asset Management Corporation
19
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED)
<TABLE>
<S> <C> <C>
COMMON STOCKS -- 90.9%
INDIA -- 90.9%
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Agricultural Equipment -- 7.2%
- ------------------------------------------------------------------------
Punjab Tractors Ltd. 85,050 $ 2,598,968
The only fully indigenously designed
tractor manufacturer in the country.
- ------------------------------------------------------------------------
$ 2,598,968
- ------------------------------------------------------------------------
Apparel -- 3.6%
- ------------------------------------------------------------------------
Bata India Ltd.(1) 259,700 $ 1,287,420
An integrated manufacturer of shoes with
market leadership.
- ------------------------------------------------------------------------
$ 1,287,420
- ------------------------------------------------------------------------
Auto and Parts -- 8.7%
- ------------------------------------------------------------------------
Hero Honda Motors Ltd. 55,700 $ 1,387,362
Honda's motorcycle manufacturer and
distributor in India.
Hero Honda Motors Ltd. 16,800 418,450
Honda's motorcycle manufacturer and
distributor in India.
IFB Industries Ltd.(2) 50 7
Manufacturer of high precision
engineering tools and domestic
appliances.
Motor Industries 14,150 1,301,761
A subsidiary of Robert Bosch of Germany
with a presence in the auto components
industry, with products such as spark
plugs & fuel injection pumps.
- ------------------------------------------------------------------------
$ 3,107,580
- ------------------------------------------------------------------------
Banks and Money Services -- 0.0%
- ------------------------------------------------------------------------
Kotak Mahindra Finance Ltd.(1) 700 $ 295
Bill discounting & consumer financing.
Oriental Bank of Commerce(1) 100 82
Public sector retail bank.
State Bank of India(1)(2) 200 1,092
The largest public sector commercial
bank in India, with over 8000 branches.
Engaged in retail banking & a range of
non-fund based activities.
- ------------------------------------------------------------------------
$ 1,469
- ------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Beverages -- 0.0%
- ------------------------------------------------------------------------
Tata Tea Ltd.(1) 100 $ 876
Integrated tea company with substantial
presence in plantation as well as direct
marketing of branded tea.
- ------------------------------------------------------------------------
$ 876
- ------------------------------------------------------------------------
Broadcasting and Cable -- 5.1%
- ------------------------------------------------------------------------
Zee Telefilms Ltd.(2) 54,400 $ 1,825,461
Dominant television broadcaster in
India.
- ------------------------------------------------------------------------
$ 1,825,461
- ------------------------------------------------------------------------
Chemicals -- 9.3%
- ------------------------------------------------------------------------
Hindustan Lever Chemicals Ltd. 155,400 $ 1,684,456
Lever's fertilizer company in India.
Reliance Industries Ltd.(1) 401,281 1,635,294
Integrated petrochemical company with
world size capacities and major presence
in polyesters and polymers.
Tata Chemicals(1) 1,449 2,592
A diversified company with a major
presence in soda ash, caustic soda &
fertilizers.
Thermax Ltd.(1) 1,800 7,846
Niche supplier of boilers and pollution
control equipment.
- ------------------------------------------------------------------------
$ 3,330,188
- ------------------------------------------------------------------------
Computer Software -- 22.5%
- ------------------------------------------------------------------------
BFL Software Ltd.(1)(2) 78,900 $ 1,646,328
Mid size fast growing company involved
in software development.
Digital Equipments (India) Ltd.(1) 96,200 948,466
Indian subsidiary of Digital USA
involved solely in software development.
Infosys Technologies Ltd. 37,400 3,127,893
India's dominant software services
provider.
NIIT Ltd. 40,000 1,875,461
Largest company providing software
education and services in India.
Onward Technologies Ltd.(1)(2) 26,200 113,537
Software unit of Novell India.
PSI Data Systems Ltd. 31,150 345,265
Indian software unit of Group Bull of
France.
Tata Infotech Ltd.(1) 78 1,914
One of the largest information
technology service & solution providers
in India with interest in software
development, distribution, networking,
maintenance, support and training.
- ------------------------------------------------------------------------
$ 8,058,864
- ------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------
<S> <C> <C>
Conglomerates -- 0.0%
- ------------------------------------------------------------------------
Indian Rayon & Industries Ltd.(1) 153 $ 498
Diversified company with interests in
cement, textiles, rayon and carbon
black.
- ------------------------------------------------------------------------
$ 498
- ------------------------------------------------------------------------
Diversified Industry -- 4.1%
- ------------------------------------------------------------------------
Enkay Texofood Industries Ltd.(1) 786 $ 344
Has business interests in the
manufacturing of synthetic yarns & the
export of processed foods.
Larsen & Toubro Ltd.(1) 223,300 1,475,449
India's largest company in the
engineering & construction sector.
Thiru Arooran Sugars 100 104
A manufacturer of sugar & industrial
alcohol. Has also made foray into
cogeneration of power through bagasse.
- ------------------------------------------------------------------------
$ 1,475,897
- ------------------------------------------------------------------------
Drugs -- 2.3%
- ------------------------------------------------------------------------
Wyeth Lederle Ltd. 67,050 $ 811,682
A subsidiary of American Home Products.
- ------------------------------------------------------------------------
$ 811,682
- ------------------------------------------------------------------------
Drugs and Agrochemicals -- 0.0%
- ------------------------------------------------------------------------
Novartis India Ltd.(2) 40 $ 822
Indian unit of Swiss pharmaceutical
parent company.
- ------------------------------------------------------------------------
$ 822
- ------------------------------------------------------------------------
Electric Utilities -- 0.0%
- ------------------------------------------------------------------------
BSES Ltd.(1) 200 $ 688
A monopoly distributor of power in
suburbs of Bombay.
- ------------------------------------------------------------------------
$ 688
- ------------------------------------------------------------------------
Foods -- 4.6%
- ------------------------------------------------------------------------
Smithkline Beecham Consumer Healthcare
Ltd.(2) 123,500 $ 1,667,079
Unit of Smithkline UK selling milk
additives and biscuits.
- ------------------------------------------------------------------------
$ 1,667,079
- ------------------------------------------------------------------------
Household Products -- 9.2%
- ------------------------------------------------------------------------
Hindustan Lever Ltd.(1) 60,400 $ 3,315,313
A diversified multinational of the
Unilever group and a market leader in
soap & detergents, personal care & food
processing industries.
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Household Products (continued)
- ------------------------------------------------------------------------
Reckitt and Colman of India Ltd.(1) 50 $ 518
Manufacturer of household products such
as mosquito repellent, surface cleaning
agents and antiseptic lotions.
- ------------------------------------------------------------------------
$ 3,315,831
- ------------------------------------------------------------------------
Investment Services -- 2.3%
- ------------------------------------------------------------------------
Housing Development Finance 16,000 $ 819,926
Leading issuer of home mortgages in
India.
ICICI Limited(1) 250 424
Development finance company supporting
infrastructure projects.
- ------------------------------------------------------------------------
$ 820,350
- ------------------------------------------------------------------------
Lodging and Gaming -- 0.0%
- ------------------------------------------------------------------------
Hotel Leela Venture Ltd.(1) 750 $ 636
Operates business hotels & a beach
resort in Bombay & Goa, respectively.
- ------------------------------------------------------------------------
$ 636
- ------------------------------------------------------------------------
Machinery -- 2.0%
- ------------------------------------------------------------------------
Otis Elevator Co. (India) Ltd. 90,000 $ 705,512
Manufacturer of elevators and escalators
with dominant market share.
- ------------------------------------------------------------------------
$ 705,512
- ------------------------------------------------------------------------
Manufacturing -- 2.5%
- ------------------------------------------------------------------------
Gujarat Natural Gas Co. Ltd. 92,000 $ 912,786
Subsidiary of British Gas involved in
gas distribution in India.
- ------------------------------------------------------------------------
$ 912,786
- ------------------------------------------------------------------------
Medical Products -- 0.0%
- ------------------------------------------------------------------------
Ranbaxy Laboratories Ltd.(1) 514 $ 7,753
Presence in anti-bacterial and
antibiotics segments, and a major
exporter of bulk drugs and formulations.
- ------------------------------------------------------------------------
$ 7,753
- ------------------------------------------------------------------------
Metals - Industrial -- 2.5%
- ------------------------------------------------------------------------
Hindalco Industries Ltd. GDR 45,000 $ 880,875
Dominant aluminum maker in India.
Tata Iron and Steel Co. Ltd.(1) 203 655
India's most profitable steel company.
- ------------------------------------------------------------------------
$ 881,530
- ------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
10
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------
<S> <C> <C>
Oil and Gas - Integrated -- 0.0%
- ------------------------------------------------------------------------
Hindustan Petroleum(1) 1,100 $ 6,304
One of the top three oil refining and
marketing companies in India.
- ------------------------------------------------------------------------
$ 6,304
- ------------------------------------------------------------------------
Packaging -- 0.0%
- ------------------------------------------------------------------------
Flex Industries (wts)(2)(3) 4,274 $ 5
Leading integrated company in the
packaging industry.
- ------------------------------------------------------------------------
$ 5
- ------------------------------------------------------------------------
Telecommunications -- 0.0%
- ------------------------------------------------------------------------
Mahanger Telephone Nigam Ltd.(1) 1,100 $ 4,719
Government owned monopoly provider of
fixed wire telephone services in India's
major cities of Bombay & Delhi.
- ------------------------------------------------------------------------
$ 4,719
- ------------------------------------------------------------------------
Tobacco -- 5.0%
- ------------------------------------------------------------------------
ITC Ltd. 71,053 $ 1,795,170
Dominant tobacco company in India.
- ------------------------------------------------------------------------
$ 1,795,170
- ------------------------------------------------------------------------
Transportation -- 0.0%
- ------------------------------------------------------------------------
Great Eastern Shipping(1) 1,310 $ 734
Diversified company with interests in
shipping and property development.
- ------------------------------------------------------------------------
$ 734
- ------------------------------------------------------------------------
Total India
(identified cost $23,049,732) $ 32,618,822
- ------------------------------------------------------------------------
SRI LANKA -- 0.0%
Banks and Money Services -- 0.0%
- ------------------------------------------------------------------------
Development Finance Corp.(2) 2 $ 3
One of Sri Lanka's largest development
financial institutions involved in
project financing & investment banking.
- ------------------------------------------------------------------------
$ 3
- ------------------------------------------------------------------------
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Conglomerates -- 0.0%
- ------------------------------------------------------------------------
Hayleys Ltd.(2) 1 $ 2
Has interest in diversified business of
shipping, agriculture, textiles &
hotels.
- ------------------------------------------------------------------------
$ 2
- ------------------------------------------------------------------------
Total Sri Lanka
(identified cost $11) $ 5
- ------------------------------------------------------------------------
Total Common Stocks
(identified cost $23,049,743) $ 32,618,827
- ------------------------------------------------------------------------
BONDS -- 0.0%
<CAPTION>
PRINCIPAL
AMOUNT
(000'S OMITTED) VALUE
<S> <C> <C>
- ------------------------------------------------------------------------
Flex Industries, 13.50%, 12/31/99(3) $ 812 $ 13,406
- ------------------------------------------------------------------------
Total Bonds
(identified cost $26,133) $ 13,406
- ------------------------------------------------------------------------
Total Investments -- 90.9%
(identified cost $23,075,876) $ 32,632,233
- ------------------------------------------------------------------------
Other Assets, Less Liabilities -- 9.1% $ 3,255,803
- ------------------------------------------------------------------------
Net Assets -- 100% $ 35,888,036
- ------------------------------------------------------------------------
</TABLE>
GDR - Global Depositary Receipt
(1) The above securities held by the Portfolio on June 30, 1999 are
unrestricted securities valued at market prices. Because of the length of
the registration process, the Portfolio would temporarily be unable to sell
certain of these securities. At June 30, 1999, the aggregate value of these
securities amounted to $191,582 representing 0.53% of the Portfolio's net
assets (Note 5).
(2) Non-income producing security.
(3) Security valued at fair value using methods determined in good faith by or
at the direction of the Trustees.
SEE NOTES TO FINANCIAL STATEMENTS
11
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
PERCENTAGE
COMPANY INDUSTRY SECTOR OF NET ASSETS VALUE
<S> <C> <C> <C>
---------------------------------------------------------------------------------------------------
Hindustan Lever Ltd. Household Products 9.2% $ 3,315,314
Infosys Technologies Ltd. Computer Software 8.7 3,127,894
Punjab Tractors Ltd. Agricultural Equipment 7.2 2,598,968
NIIT Ltd. Computer Software 5.2 1,875,461
Zee Telefilms Ltd. Broadcasting and Cable 5.1 1,825,461
Hero Honda Motors Ltd. Auto and Parts 5.0 1,805,812
ITC Ltd. Tobacco 5.0 1,795,170
Hindustan Lever Chemicals
Ltd. Chemicals 4.7 1,684,456
Smithkline Beecham Consumer
Healthcare Ltd. Foods 4.6 1,667,079
BFL Software Ltd. Computer Software 4.6 1,646,328
</TABLE>
INDUSTRY CONCENTRATION -- BELOW ARE THE TOP TEN INDUSTRY SECTORS REPRESENTED IN
THE PORTFOLIO OF INVESTMENTS
<TABLE>
<CAPTION>
PERCENTAGE
INDUSTRY SECTOR OF NET ASSETS VALUE
<S> <C> <C>
- ---------------------------------------------------------------------
Computer Software 22.5% $ 8,058,865
Chemicals 9.3 3,330,188
Household Products 9.2 3,315,832
Auto and Parts 8.7 3,107,580
Agricultural Equipment 7.2 2,598,968
Broadcasting and Cable 5.1 1,825,461
Tobacco 5.0 1,795,170
Foods 4.6 1,667,079
Diversified Industry 4.1 1,475,897
Apparel 3.6 1,287,420
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
12
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
FINANCIAL STATEMENTS (UNAUDITED)
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF JUNE 30, 1999
<S> <C>
Assets
- ------------------------------------------------------
Investments, at value
(identified cost, $23,075,876) $ 32,632,233
Cash 1,561,961
Foreign currency, at value
(identified cost, $1,775,301) 1,766,973
Receivable for investments sold 2,195,809
Dividends and interest receivable 237,745
Miscellaneous receivable 82
- ------------------------------------------------------
TOTAL ASSETS $ 38,394,803
- ------------------------------------------------------
Liabilities
- ------------------------------------------------------
Payable for investments purchased $ 2,298,556
Payable to affiliate for Trustees' fees 1,114
Other accrued expenses 207,097
- ------------------------------------------------------
TOTAL LIABILITIES $ 2,506,767
- ------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $ 35,888,036
- ------------------------------------------------------
Sources of Net Assets
- ------------------------------------------------------
Net proceeds from capital contributions
and withdrawals $ 26,345,606
Net unrealized appreciation (computed on
the basis of identified cost) 9,542,430
- ------------------------------------------------------
TOTAL $ 35,888,036
- ------------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED
JUNE 30, 1999
<S> <C>
Investment Income
- ------------------------------------------------------
Dividends (net of foreign taxes, $2,112) $ 321,331
Interest 1,748
- ------------------------------------------------------
TOTAL INVESTMENT INCOME $ 323,079
- ------------------------------------------------------
Expenses
- ------------------------------------------------------
Investment adviser fee $ 176,143
Administration fee 58,714
Trustees fees and expenses 6,797
Custodian fee 219,597
Interest 60,600
Legal and accounting services 33,591
Amortization of organization expenses 5,445
Miscellaneous 148
- ------------------------------------------------------
TOTAL EXPENSES $ 561,035
- ------------------------------------------------------
Deduct --
Reduction of custodian fee $ 5,206
- ------------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 5,206
- ------------------------------------------------------
NET EXPENSES $ 555,829
- ------------------------------------------------------
NET INVESTMENT LOSS $ (232,750)
- ------------------------------------------------------
Realized and Unrealized
Gain (Loss)
- ------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) $ 14,177,237
Foreign currency transactions (205,888)
- ------------------------------------------------------
NET REALIZED GAIN $ 13,971,349
- ------------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $ 607,973
Foreign currency (32,291)
- ------------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $ 575,682
- ------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $ 14,547,031
- ------------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $ 14,314,281
- ------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
Increase (Decrease) JUNE 30, 1999 YEAR ENDED
in Net Assets (UNAUDITED) DECEMBER 31, 1998
<S> <C> <C>
- --------------------------------------------------------------------------------
From operations --
Net investment loss $ (232,750) $ (103,792)
Net realized gain (loss) 13,971,349 (12,728,099)
Net change in unrealized appreciation
(depreciation) 575,682 7,726,459
- --------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 14,314,281 $ (5,105,432)
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 6,653,278 $ 5,420,705
Withdrawals (37,813,272) (31,756,273)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM
CAPITAL TRANSACTIONS $ (31,159,994) $ (26,335,568)
- --------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (16,845,713) $ (31,441,000)
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $ 52,733,749 $ 84,174,749
- --------------------------------------------------------------------------------
AT END OF PERIOD $ 35,888,036 $ 52,733,749
- --------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999
Increase (Decrease) in Cash (UNAUDITED)
<S> <C>
- -----------------------------------------------------------
Cash flows from (for) operating
activities --
Purchase of investments $ (16,224,123)
Proceeds from sale of investments 45,742,584
Dividends, interest and tax reclaims
received 121,257
Operating expenses paid (548,125)
Foreign currency transactions 2,513,404
- -----------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES $ 31,604,997
- -----------------------------------------------------------
Cash flows from (for) financing
activities --
Proceeds from capital contributions $ 6,653,278
Payments for capital withdrawals (37,813,272)
- -----------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES $ (31,159,994)
- -----------------------------------------------------------
NET INCREASE IN CASH $ 445,003
- -----------------------------------------------------------
CASH AT BEGINNING OF PERIOD $ 1,116,958
- -----------------------------------------------------------
CASH AT END OF PERIOD $ 1,561,961
- -----------------------------------------------------------
Reconciliation of Net Increase in Net Assets
From Operations to Net Cash From
Operating Activities
- -----------------------------------------------------------
Net increase in net assets from
operations $ 14,314,281
Decrease in receivable for investments
sold 1,762,480
Decrease in foreign currency 2,751,583
Increase in dividends, interest and
other receivables (201,822)
Decrease in deferred organizational
expense 5,445
Increase in payable for investments
purchased 1,532,008
Increase in payable to affiliate 519
Increase in accrued expenses and other
liabilities 1,740
Net decrease in investments 11,438,763
- -----------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES $ 31,604,997
- -----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED DECEMBER 31,
JUNE 30, 1999 ------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994(1)
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Ratios to average daily net assets
- -----------------------------------------------------------------------------------------------------------------
Expenses(2) 2.39%(3) 1.97% 1.61% 1.51% 1.76% 1.16%(3)
Expenses after custodian fee
reduction(2) 2.37%(3) 1.87% 1.58% 1.28% 1.35% --
Net investment income (loss) (0.99)%(3) (0.16)% (0.20)% (0.11)% (0.18)% 0.01%(3)
Portfolio Turnover 41% 60% 48% 46% 38% 1%
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For the period from the start of business, May 2, 1994, to December 31,
1994.
(2) The expense ratios for the year ended December 31, 1995 and periods
thereafter have been adjusted to reflect a change in reporting
requirements. The new reporting guidelines require the Portfolio to
increase its expense ratio by the effect of any expense offset arrangements
with its service providers. The expense ratio for the prior period has not
been adjusted to reflect this change.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1 Significant Accounting Policies
- -------------------------------------------
South Asia Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company
which was organized as a trust under the laws of the State of New York on
January 18, 1994. The Declaration of Trust permits the Trustees to issue
interests in the Portfolio. The following is a summary of the significant
accounting policies of the Portfolio. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuations -- Marketable securities, including options, that are
listed on foreign or U.S. securities exchanges or in the NASDAQ National
Market System are valued at closing sale prices or, if there were no sales,
at the mean between the closing bid and asked prices on the exchange where
such securities are principally traded. Futures positions on securities or
currencies are generally valued at closing settlement prices. Unlisted or
listed securities for which closing sale prices are not available are valued
at the mean between the latest bid and asked prices. Short term debt
securities with a remaining maturity of 60 days or less are valued at
amortized cost. Other fixed income and debt securities, including listed
securities and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing service.
Investments for which valuations or market quotations are unavailable are
valued at fair value using methods determined in good faith by or at the
direction of the Trustees.
B Federal Taxes -- The Portfolio is treated as a partnership for U.S. Federal
tax purposes. No provision is made by the Portfolio for federal or state
taxes on any taxable income of the Portfolio because each investor in the
Portfolio is individually responsible for the payment of any taxes on its
share of such income. Since some of the Portfolio's investors are regulated
investment companies that invest all or substantially all of their assets in
the Portfolio, the Portfolio normally must satisfy the applicable source of
income and diversification requirements, (under the U.S. Internal Revenue
Code), in order for its investors to satisfy them. The Portfolio will
allocate, at least annually among its investors, each investor's distributive
share of the Portfolio's net investment income, net realized capital gains,
and any other items of income, gain, loss, deduction or credit.
C Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization, including registration costs, are being
amortized on a 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 cash
or securities in 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. 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
16
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
G Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian
of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee
reduced by credits which are determined based on the average daily cash
balances the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
expenses in the Statement of Operations.
H Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
I Other -- Investment transactions are accounted for on the date the securities
are purchased or sold. Dividend income is recorded on the ex-dividend date.
However, if the ex-dividend date has passed, certain dividends from foreign
securities are recorded as the Portfolio is informed of the ex-dividend date.
Interest income is recorded on the accrual basis.
J Interim Financial Statements -- The interim financial statements relating to
June 30, 1999 and for the six months then ended have not been audited by
independent certified public accountants, but in the opinion of the
Portfolio's management, reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
- -------------------------------------------
The investment adviser fee is earned by Lloyd George Investment Management
(Bermuda) Limited (the Adviser) as compensation for management and investment
advisory services rendered to the Portfolio. Under the advisory agreement,
the Adviser receives a monthly fee of 0.0625% (0.75% annually) of the average
daily net assets of the Portfolio up to $500,000,000, and at reduced rates as
daily net assets exceed that level. For the six months ended June 30, 1999,
the adviser fee was 0.75% (annualized) of average daily net assets and
amounted to $176,143. In addition, an administration fee is earned by Eaton
Vance Management (EVM) for managing and administering the business affairs of
the Portfolio. Under the administration agreement, EVM earns a monthly fee in
the amount of 1/48th of 1% (equal to 0.25% annually) of the average daily net
assets of the Portfolio up to $500,000,000, and at reduced rates as daily net
assets exceed that level. For the six months ended June 30, 1999, the
administration fee was 0.25% (annualized) of average net assets and amounted
to $58,714. Except as to Trustees of the Portfolio who are not members of the
Adviser or EVM's organization, officers and Trustees receive remuneration for
their services to the Portfolio out of such investment adviser and
administrative fees. Certain of the officers and Trustees of the Portfolio
are officers of the above organizations.
3 Investment Transactions
- -------------------------------------------
For the six months ended June 30, 1999, purchases and sales of investments,
other than short-term obligations, aggregated $17,532,790 and $43,756,763
respectively.
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at June 30, 1999, as computed on a federal income tax
basis, are as follows:
<TABLE>
<S> <C>
AGGREGATE COST $ 23,075,876
- ------------------------------------------------------
Gross unrealized appreciation 10,693,993
Gross unrealized depreciation (1,137,636)
- ------------------------------------------------------
NET UNREALIZED APPRECIATION $ 9,556,357
- ------------------------------------------------------
</TABLE>
5 Risks Associated with Foreign Investments
- -------------------------------------------
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those
not subject to the disclosure and reporting requirements of the U.S.
securities laws. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and standards of
practice comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in
investment or exchange control regulations, expropriation or confiscatory
taxation, limitation on the removal of funds or other assets of the
Portfolio, political or financial instability or diplomatic and other
developments which could affect such investments. Foreign stock markets,
while growing in volume and sophistication, are generally not as developed as
those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be
17
<PAGE>
SOUTH ASIA PORTFOLIO AS OF JUNE 30, 1999
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D
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 committed $130 million unsecured line of credit agreement
with a group of banks. The Portfolio may temporarily borrow from the line of
credit to satisfy redemption requests or settle investment transactions.
Interest is charged to each portfolio or fund based on its borrowings at an
amount above the Eurodollar rate or Federal Funds rate. In addition, a fee
computed at an annual rate of 0.10% on the daily unused portion of the line
of credit is allocated among the participating portfolios and funds at the
end of each quarter. The average daily loan balance for the six months ended
June 30, 1999 was $2,310,657 and the average interest rate was 5.29%. The
maximum borrowing outstanding at any time during the six months ended June
30, 1999 was $13,505,000. As of June 30, 1999, there was no loan outstanding.
18
<PAGE>
SPONSOR AND MANAGER OF
EATON VANCE GREATER INDIA FUND
Administrator of South Asia Portfolio
Eaton Vance Management
The Eaton Vance Building
255 State Street
Boston, MA 02109
ADVISER OF SOUTH ASIA PORTFOLIO
Lloyd George Management
(Bermuda) Limited
3808 One Exchange Square
Central, Hong Kong
PRINCIPAL UNDERWRITER
Eaton Vance Distributors, Inc.
The Eaton Vance Building
255 State Street
Boston, MA 02109
(617) 482-8260
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, MA 02116
TRANSFER AGENT
First Data Investor Services Group
Attention: Eaton Vance Funds
P.O. Box 5123
Westborough, MA 01581-5123
EATON VANCE GREATER INDIA FUND
THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MA 02109
- ----------------------------------------------------------------------------
This report must be preceded or accompanied by a current prospectus which
contains more complete information on the Fund, including its sales charges
and expenses. Please read the prospectus carefully before you invest or send
money.
3-4258 GISRC-8/99
