<PAGE>
[LOGO]
[PHOTO OF EARTH]
Annual Report December 31, 1999
EATON VANCE
[PHOTO OF STATUE] GREATER INDIA
FUND
Global Management-Global Distribution
[PHOTO OF ELEPHANT]
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
- --------------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
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[PHOTO]
JAMES B. HAWKES
PRESIDENT
Eaton Vance Greater India Fund, Class A shares, had a total return of 107.44%
for the year ended December 31, 1999. That return was the result of a rise in
net asset value per share (NAV) from $5.78 on December 31, 1998 to $11.99 on
December 31, 1999.(1)
The Fund's Class B shares had a total return of 105.83% during the year ended
December 31, 1999. This return resulted from a rise in NAV from $5.66 on
December 31, 1998 to $11.65 on December 31, 1999.(1)
The robust performance of the Indian market accompanied a resurgent Indian
economy and increasing optimism over the prospects for economic and financial
reforms. Reflecting that optimism, the Bombay Stock Exchange (BSE 100) Index --
an unmanaged index of common stocks traded in the India market -- had a total
return of 88.59% for the year ended December 31, 1999.(2)
India has taken major steps toward economic and financial reform...
India can look back on the 1990s as a remarkable decade of reform and
modernization. India's economic output has expanded significantly, while its
financial markets have shed the chaotic, outmoded practices of the past in favor
of transparent, electronic, investor-friendly systems. One result of these
changes has been to draw the attention of global investors and attract growing
foreign investment in India.
The next decade may one day be viewed as India's Decade...
One of India's most powerful weapons in its economic arsenal is its
technological and scientific brainpower, a resource that has the potential to
make India a technology superpower in coming years. We've seen increasing
evidence of that resource in recent years in information technology and
pharmaceutical research. Going forward, India appears poised to become a major
player in the use of technology in telecom, finance and entertainment. The
coming decade is sure to bring exciting change and a growing emergence of India
as an economic force.
Surmounting hurdles, India continues along the road to a modern economy ...
Like all emerging economies, India has encountered hurdles along the path to
success. However, we continue to believe in a promising economic future for
India, and are confident that India will present many excellent investment
opportunities in the years ahead. In the pages that follow, co-portfolio manager
Scobie D. Ward reviews the past year and looks ahead to 2000.
Sincerely,
/s/ James B. Hawkes
James B. Hawkes
President
February 9, 2000
- --------------------------------------------------------------------------------
Fund Information
as of December 31, 1999
<TABLE>
<CAPTION>
Performance(3) Class A Class B
- -----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- -----------------------------------------------------------------------------
<S> <C> <C>
One Year 107.44% 105.83%
Five Years 4.01 3.43
Life of Fund+ 3.25 2.73
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -----------------------------------------------------------------------------
<S> <C> <C>
One Year 95.60% 100.83%
Five Years 2.79 3.08
Life of Fund+ 2.18 2.57
+ Inception date: 5/2/94
<CAPTION>
Ten Largest Holdings(4)
- -----------------------------------------------------------------------------
<S> <C>
Infosys Technologies Ltd. 12.7%
Zee Telefilms Ltd. 8.3
Hindustan Lever Ltd. 6.5
NIIT Ltd. 6.3
Larsen & Toubro Ltd. 5.9
Digital Equipments (India) Ltd. 5.1
Wockhardt Ltd. 4.3
DSQ Software Ltd. 4.0
Hero Honda Motors Ltd. 3.9
VisualSoft (India) Ltd. 3.5
</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 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 returns for
Class A reflect the maximum 5.75% sales charge. SEC returns for Class B
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. Effective
2/1/00, Class A shares redeemed within 3 months of purchase, including
exchanges, will be subject to a 1% early redemption fee.(4) Ten largest
holdings account for 60.5% of the Portfolio's net assets, determined by
dividing the total market value of the holdings by the total net assets of
the Portfolio. 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 DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION
- --------------------------------------------------------------------------------
[PHOTO]
SCOBIE D. WARD
CO-PORTFOLIO MANAGER
AN INTERVIEW WITH SCOBIE D. WARD, MANAGING DIRECTOR, LLOYD GEORGE MANAGEMENT,
AND CO-PORTFOLIO MANAGER, SOUTH ASIA PORTFOLIO.
Q:Scobie, the India stock market has been among the best-performing markets in
the world in 1999. What has contributed to India's strong showing?
A:Several factors have created a favorable climate for the India market in the
past year. First, India was less severely affected than other countries by the
economic woes that afflicted much of Asia in 1998. Second, industrial
production has rebounded sharply during the year and most estimates have GDP
rising 7% or higher in the 1999/2000 fiscal year.
Third, the National Democratic Alliance won re-election in October. In the
wake of its victory, the Bharatiya Janata Party, which heads the ruling
coalition, immediately announced plans to implement further economic reforms.
These reforms, while not entirely popular with political constituencies, were
well-received by investors and contributed to improved investor sentiment.
Finally, despite a large hike in diesel fuel prices, inflation has remained in
the 3% range. While the ongoing fiscal deficit remains a hurdle, with interest
rates at 12%, there may be room for a reduction in interest rates.
Q:How have the region's political tensions affected the market?
A:The market has remained resilient with respect to political shifts and focused
instead on economic fundamentals. Naturally, regional tensions remain a
concern and the long-standing quarrel with Pakistan over the disputed
territory of Kashmir is still unresolved. Relations with Pakistan have been
further complicated by the October military coup. However, the new Musharraf
government in Pakistan has indicated that one of its political priorities is
to turn the Pakistani economy around. So, while tensions still exist, we have
leaders in both countries who are dedicated to improving their country's
economic output. That is a good starting point, and the markets have
responded.
Q:How have you positioned the Portfolio in recent months?
A:As of December 31, 1999, India remained the major focus of the Portfolio, at
around 94% of total net assets. The economy has gathered steam, with most
estimates for GDP being revised upward. However, while corporate profits have
improved in some sectors, the upturn has not yet been felt across the economy.
Over time, we expect earnings to fully reflect the improving economic climate.
- --------------------------------------------------------------------------------
Five Largest Industry Weightings (1)
[CHART]
Regional Distribution(1)
[CHART]
(1) As a percentage of total net assets. Because the Portfolio is actively
managed, Industry Weightings and Regional Distributions presented at
12/31/99 are subject to change.
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
3
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION CONT'D
- --------------------------------------------------------------------------------
From a sector standpoint, computer software represented the largest
concentration. India has long been a major global center for the development
of computer software. Consumer goods was another major focus of the Fund. The
continuing growth of India's middle class has sharply increased demand for
consumer products, from clothing to personal care products to consumer
electronics. Automobile manufacturers were another significant Portfolio
weighting. With the economy on the upswing and consumer confidence rising,
auto sales have jumped significantly, rising 47% for the six-month period from
April through September.
Q:Let's look at the Portfolio's information technology holdings. What have you
found attractive in that sector?
A:Infosys Technologies Ltd. has long been a core holding of the Portfolio. As
one of India's leading information technology companies, the company's
services include software engineering and custom software development services
for large clients. Infosys Technologies Ltd. has focused its efforts on the
financial services, manufacturing, retailing, telecommunications and
technology sectors. The company enjoyed revenue growth of 69% in the six
months ended September 30 and saw earnings nearly triple.
Elsewhere, Zee Telefilms Ltd. is a leading cable and programming company and a
major film distributor. The company was recently awarded a license by the
Ministry of Telecommunications to provide nationwide Internet service. The
vast potential of the Internet in a country with such a rapidly expanding
consumer base suggests the possibility of explosive revenue growth for the
company.
Q:Can't the same be said of the Portfolio's consumer products sector holdings?
A:Yes. With a fast-growing middle class, the demand for consumer products
continued to rise. A major beneficiary of this trend is Hindustan Lever Ltd.
The company has long dominated the Indian soap, toothpaste, detergent and
beauty product market. Demand for its consumer goods has been so strong that
Hindustan Lever Ltd. has added to its plant capacity. In addition, the company
is planning to expand its product offerings in the coming year.
The pharmaceuticals sector is an offshoot of the consumer product area, and
India boasts a large percentage of the world's leading drug researchers. One
large holding, Smithkline Beecham Consumer Healthcare Ltd., has experienced
double-digit revenue growth in India's expanding drug market. Another, Ranbaxy
Laboratories Ltd., is a large producer of generic drugs, creating advanced
formulations of successful existing drugs.
Q:You indicated that auto sales have risen sharply with India's resurgent
economy. What auto companies have you found attractive?
A:With rising wealth levels, improving quality of life and increasing consumer
confidence, India's auto sector has received a major boost. Hero Honda Motors
Ltd. is the largest producer of motorcycles in India. Motorcycles have
historically been a relatively affordable means of transportation in India,
and the company boasts the most fuel-efficient products in their category.
Elsewhere in the automotive area, Punjab Tractors Ltd. is the country's
largest integrated manufacturer of farm vehicles and tractors. While the
passenger segment of India's auto sector fluctuates with changes in consumer
sentiment, the demand for farm equipment has tended to remain fairly stable,
as the farm sector is a very critical segment of the Indian economy. The
company has benefited as the farm sector has modernized its equipment to meet
the needs of India's massive population.
4
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
- --------------------------------------------------------------------------------
MANAGEMENT DISCUSSION CONT'D
- --------------------------------------------------------------------------------
Q:In your view, Scobie, what are the prospects for the Indian market in the
coming year?
A:In my opinion, the outlook for India is very favorable. Economic growth has
accelerated in recent months, while inflation levels have reached a 20-year
low. Interest rates remain fairly high. However, if the government takes steps
to rein in the fiscal deficit, there is a distinct possibility for future rate
cuts.
In the meantime, business sentiment has improved as construction and retail
activity are gathering momentum. We are just now seeing corporate earnings
start to improve, but further profit growth should give an added boost to the
market. Finally, India continues to benefit from its growing technology links
to the U.S. and other developed nations. I'm convinced that India will remain
one of the most exciting growth stories among the world's emerging markets.
[GRAPH]
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EATON VANCE GREATER INDIA FUND, CLASS A VS.
BOMBAY STOCK EXCHANGE INDEX
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DATE FUND/NAV FUND/MOP BOMBAY SE
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
5/31/94 $10,000 $9,426 $10,000
6/30/94 $10,090 $9,510 $10,566
7/31/94 $10,280 $9,689 $10,806
8/31/94 $11,359 $10,706 $11,723
9/30/94 $10,649 $10,038 $11,119
10/31/94 $10,609 $10,000 $11,043
11/30/94 $10,410 $9,812 $10,676
12/31/94 $9,840 $9,275 $10,163
1/31/95 $9,091 $8,569 $9,475
2/28/95 $8,561 $8,070 $9,030
3/31/95 $8,372 $7,891 $8,743
4/30/95 $7,792 $7,345 $8,307
5/31/95 $8,092 $7,627 $8,505
6/30/95 $8,112 $7,646 $8,336
7/31/95 $8,312 $7,834 $8,707
8/31/95 $7,932 $7,476 $8,240
9/30/95 $7,532 $7,100 $7,997
10/31/95 $7,103 $6,695 $7,775
11/30/95 $6,234 $5,876 $6,726
12/31/95 $6,553 $6,177 $6,960
1/31/96 $6,254 $5,895 $6,307
2/28/96 $7,013 $6,610 $7,744
3/31/96 $7,103 $6,695 $7,771
4/30/96 $7,772 $7,326 $8,536
5/31/96 $7,762 $7,316 $8,279
6/30/96 $7,792 $7,345 $8,467
7/31/96 $7,073 $6,667 $7,757
8/31/96 $6,953 $6,554 $7,614
9/30/96 $6,344 $5,979 $6,957
10/31/96 $6,104 $5,753 $6,770
11/30/96 $5,894 $5,556 $6,150
12/31/96 $6,054 $5,706 $6,493
1/31/97 $6,164 $5,810 $7,065
2/28/97 $6,384 $6,017 $7,554
3/31/97 $6,354 $5,989 $7,556
4/30/97 $6,873 $6,478 $7,875
5/31/97 $6,803 $6,412 $7,708
6/30/97 $7,493 $7,062 $8,732
7/31/97 $7,952 $7,495 $8,979
8/31/97 $7,053 $6,648 $7,980
9/30/97 $7,283 $6,864 $8,004
10/31/97 $6,973 $6,573 $7,971
11/30/97 $6,384 $6,017 $6,841
12/31/97 $6,334 $5,970 $6,868
1/31/98 $5,854 $5,518 $6,175
2/28/98 $6,354 $5,989 $6,820
3/31/98 $6,633 $6,252 $7,362
4/30/98 $6,943 $6,544 $7,585
5/31/98 $6,364 $5,998 $6,748
6/30/98 $5,435 $5,122 $5,761
7/31/98 $5,644 $5,320 $5,696
8/31/98 $5,435 $5,122 $5,272
9/30/98 $5,704 $5,377 $5,564
10/31/98 $5,405 $5,094 $5,091
11/30/98 $5,375 $5,066 $5,038
12/31/98 $5,774 $5,443 $5,470
1/31/99 $6,484 $6,111 $5,881
2/28/99 $6,513 $6,139 $5,753
3/31/99 $7,652 $7,213 $6,658
4/30/99 $6,743 $6,356 $5,797
5/31/99 $6,993 $6,591 $6,842
6/30/99 $7,403 $6,977 $7,053
7/31/99 $8,302 $7,825 $7,852
8/31/99 $9,241 $8,710 $8,626
9/30/99 $9,451 $8,908 $8,685
10/31/99 $8,731 $8,230 $8,163
11/30/99 $9,940 $9,369 $8,878
12/31/99 $11,978 $11,290 $10,316
<CAPTION>
[GRAPH]
- --------------------------------------------------------------------------------
EATON VANCE GREATER INDIA FUND, CLASS B VS.
BOMBAY STOCK EXCHANGE INDEX
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DATE FUND/NAV BOMBAY SE
- --------------------------------------------------------------------------------
<S> <C> <C>
5/31/94 $10,000 $10,000
6/30/94 $10,080 $10,566
7/31/94 $10,270 $10,806
8/31/94 $11,349 $11,723
9/30/94 $10,649 $11,119
10/31/94 $10,599 $11,043
11/30/94 $10,410 $10,676
12/31/94 $9,830 $10,163
1/31/95 $9,081 $9,475
2/28/95 $8,551 $9,030
3/31/95 $8,362 $8,743
4/30/95 $7,782 $8,307
5/31/95 $8,092 $8,505
6/30/95 $8,112 $8,336
7/31/95 $8,312 $8,707
8/31/95 $7,922 $8,240
9/30/95 $7,522 $7,997
10/31/95 $7,103 $7,775
11/30/95 $6,194 $6,726
12/31/95 $6,543 $6,960
1/31/96 $6,224 $6,307
2/28/96 $6,853 $7,744
3/31/96 $6,963 $7,771
4/30/96 $7,622 $8,536
5/31/96 $7,592 $8,279
6/30/96 $7,622 $8,467
7/31/96 $6,913 $7,757
8/31/96 $6,793 $7,614
9/30/96 $6,194 $6,957
10/31/96 $5,954 $6,770
11/30/96 $5,764 $6,150
12/31/96 $5,904 $6,493
1/31/97 $6,014 $7,065
2/28/97 $6,224 $7,554
3/31/97 $6,194 $7,556
4/30/97 $6,703 $7,875
5/31/97 $6,633 $7,708
6/30/97 $7,313 $8,732
7/31/97 $7,752 $8,979
8/31/97 $6,883 $7,980
9/30/97 $7,103 $8,004
10/31/97 $6,843 $7,971
11/30/97 $6,264 $6,841
12/31/97 $6,224 $6,868
1/31/98 $5,744 $6,175
2/28/98 $6,234 $6,820
3/31/98 $6,503 $7,362
4/30/98 $6,803 $7,585
5/31/98 $6,244 $6,748
6/30/98 $5,335 $5,761
7/31/98 $5,534 $5,696
8/31/98 $5,325 $5,272
9/30/98 $5,594 $5,564
10/31/98 $5,305 $5,091
11/30/98 $5,275 $5,038
12/31/98 $5,654 $5,470
1/31/99 $6,344 $5,881
2/28/99 $6,374 $5,753
3/31/99 $7,483 $6,658
4/30/99 $6,593 $5,797
5/31/99 $6,833 $6,842
6/30/99 $7,233 $7,053
7/31/99 $8,112 $7,852
8/31/99 $9,011 $8,626
9/30/99 $9,211 $8,685
10/31/99 $8,501 $8,163
11/30/99 $9,680 $8,878
12/31/99 $11,638 $10,316
</TABLE>
<TABLE>
<CAPTION>
Performance** Class A Class B
- -----------------------------------------------------------------------------
Average Annual Total Returns (at net asset value)
- -----------------------------------------------------------------------------
<S> <C> <C>
One Year 107.44% 105.83%
Five Years 4.01 3.43
Life of Fund+ 3.25 2.73
<CAPTION>
SEC Average Annual Total Returns (including sales charge or applicable CDSC)
- -----------------------------------------------------------------------------
<S> <C> <C>
One Year 95.60% 100.83%
Five Years 2.79 3.08
Life of Fund+ 2.18 2.57
+ Inception date: 5/2/94
</TABLE>
*Sources: TowersData, Bethesda, MD.; Datastream. Investment operations
commenced 5/2/94. Index information is only available at month-end; therefore,
the line comparison begins at the next month-end following the commencement of
the Fund's investment operations.
The chart compares the Fund's total return with that of the Bombay Stock
Exchange Index, a broad-based, unmanaged market index of common stocks traded
in the India market. Returns are calculated by determining the percentage
change in net asset value (NAV) with all distributions reinvested. The lines
on the chart represent the total returns of $10,000 hypothetical investments
in the Fund and the Index. The Index's total return does not reflect
commissions or expenses that would have been incurred if an investor
individually purchased or sold the securities represented in the Index. It is
not possible to invest directly in an Index.
**Returns are historical and are calculated by determining the percentage
change in net asset value with all distributions reinvested. SEC returns for
Class A reflect the maximum 5.75% sales charge. SEC returns for Class B
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. Effective
2/1/00, Class A shares redeemed within 3 months of purchase, including
exchanges, will be subject to a 1% early redemption fee.
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 their original cost.
5
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
<S> <C>
Assets
- -----------------------------------------------------
Investment in South Asia Portfolio, at
value (identified cost, $25,068,463) $46,310,925
Receivable for Fund shares sold 167,984
- -----------------------------------------------------
TOTAL ASSETS $46,478,909
- -----------------------------------------------------
Liabilities
- -----------------------------------------------------
Payable for Fund shares redeemed $ 122,911
Payable to affiliate for Trustees' fees 145
Accrued expenses 45,661
- -----------------------------------------------------
TOTAL LIABILITIES $ 168,717
- -----------------------------------------------------
NET ASSETS $46,310,192
- -----------------------------------------------------
Sources of Net Assets
- -----------------------------------------------------
Paid-in capital $34,737,340
Accumulated net realized loss from
Portfolio (computed on the basis of
identified cost) (9,655,014)
Accumulated net investment loss (14,596)
Net unrealized appreciation from
Portfolio (computed on the basis of
identified cost) 21,242,462
- -----------------------------------------------------
TOTAL $46,310,192
- -----------------------------------------------------
Class A Shares
- -----------------------------------------------------
NET ASSETS $11,639,544
SHARES OUTSTANDING 970,909
NET ASSET VALUE AND REDEMPTION PRICE PER
SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 11.99
MAXIMUM OFFERING PRICE PER SHARE
(100 DIVIDED BY 94.25 of $11.99) $ 12.72
- -----------------------------------------------------
Class B Shares
- -----------------------------------------------------
NET ASSETS $34,670,648
SHARES OUTSTANDING 2,975,555
NET ASSET VALUE, OFFERING PRICE AND
REDEMPTION PRICE PER SHARE
(net assets DIVIDED BY shares of
beneficial interest outstanding) $ 11.65
- -----------------------------------------------------
</TABLE>
On sales of $50,000 or more, the offering price of Class A shares is reduced.
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1999
<S> <C>
Investment Income
- -----------------------------------------------------
Dividends allocated from Portfolio (net
of foreign taxes, $1,806) $ 469,502
Interest allocated from Portfolio (net
of foreign taxes, $730) 2,611
Expenses allocated from Portfolio (868,935)
- -----------------------------------------------------
NET INVESTMENT LOSS FROM PORTFOLIO $ (396,822)
- -----------------------------------------------------
Expenses
- -----------------------------------------------------
Management fee $ 104,495
Trustees fees and expenses 556
Distribution and service fees
Class A 44,511
Class B 304,664
Transfer and dividend disbursing agent
fees 67,919
Registration fees 31,882
Legal and accounting services 19,034
Custodian fee 10,425
Amortization of organization expenses 9,676
Printing and postage 8,815
Miscellaneous 23,933
- -----------------------------------------------------
TOTAL EXPENSES $ 625,910
- -----------------------------------------------------
NET INVESTMENT LOSS $(1,022,732)
- -----------------------------------------------------
Realized and Unrealized
Gain (Loss) from Portfolio
- -----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) (net of foreign
taxes, $428,127) $20,952,886
Foreign currency transactions (225,143)
- -----------------------------------------------------
NET REALIZED GAIN $20,727,743
- -----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $12,437,886
Foreign currency (17,333)
- -----------------------------------------------------
NET CHANGE IN UNREALIZED APPRECIATION
(DEPRECIATION) $12,420,553
- -----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $33,148,296
- -----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $32,125,564
- -----------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase (Decrease) YEAR ENDED YEAR ENDED
IN NET ASSETS DECEMBER 31, 1999 DECEMBER 31, 1998
<S> <C> <C>
- ------------------------------------------------------------------------------
From operations --
Net investment loss $ (1,022,732) $ (1,163,871)
Net realized gain (loss) 20,727,743 (12,535,741)
Net change in unrealized
appreciation (depreciation) 12,420,553 7,673,849
- ------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 32,125,564 $ (6,025,763)
- ------------------------------------------------------------------------------
Transactions in shares of beneficial interest --
Proceeds from sale of shares
Class A $ 7,296,226 $ 2,508,762
Class B 3,116,855 3,334,761
Issued in reorganization of EV
Traditional Greater India Fund
Class A -- 12,518,640
Cost of shares redeemed
Class A (10,216,411) (6,123,286)
Class B (37,106,547) (23,931,103)
- ------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM FUND
SHARE TRANSACTIONS $ (36,909,877) $ (11,692,226)
- ------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (4,784,313) $ (17,717,989)
- ------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------
At beginning of year $ 51,094,505 $ 68,812,494
- ------------------------------------------------------------------------------
AT END OF YEAR $ 46,310,192 $ 51,094,505
- ------------------------------------------------------------------------------
Accumulated net investment loss included in net assets
- ------------------------------------------------------------------------------
AT END OF YEAR $ (14,596) $ (19,632)
- ------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
Increase (Decrease) in Cash DECEMBER 31, 1999
<S> <C>
- -----------------------------------------------------------
Cash Flows From (Used For) Operating
Activities --
Purchase of interests in South Asia
Portfolio $ (10,313,173)
Withdrawal of interests in South Asia
Portfolio 48,169,144
Operating expenses paid (655,462)
- -----------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES $ 37,200,509
- -----------------------------------------------------------
Cash Flows From (Used For) Financing
Activities --
Proceeds from shares sold $ 10,314,223
Payments for shares redeemed (47,514,732)
- -----------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES $ (37,200,509)
- -----------------------------------------------------------
NET INCREASE IN CASH $ --
- -----------------------------------------------------------
CASH AT BEGINNING OF YEAR $ --
- -----------------------------------------------------------
CASH AT END OF YEAR $ --
- -----------------------------------------------------------
Reconciliation of Net Decrease in Net Assets
From Operations to Net Cash From
Operating Activities
- -----------------------------------------------------------
Net increase in net assets from
operations $ 32,125,564
Decrease in deferred organization
expenses 9,676
Decrease in payable to affiliate (61)
Decrease in accrued expenses (39,167)
Net decrease in investments 5,104,497
- -----------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES $ 37,200,509
- -----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A
-----------------------
YEAR ENDED DECEMBER 31,
-----------------------
1999(1) 1998(1)
<S> <C> <C>
- ----------------------------------------------------------
Net asset value -- Beginning
of year $ 5.780 $ 6.340
- ----------------------------------------------------------
Income (loss) from operations
- ----------------------------------------------------------
Net investment loss $(0.165) $(0.082)
Net realized and unrealized
gain (loss) 6.375 (0.478)
- ----------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 6.210 $(0.560)
- ----------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $11.990 $ 5.780
- ----------------------------------------------------------
TOTAL RETURN(2) 107.44% (8.83)%
- ----------------------------------------------------------
Ratios/Supplemental Data
- ----------------------------------------------------------
Net assets, end of year
(000's omitted) $11,640 $ 8,031
Ratios (As a percentage of
average daily net assets):
Expenses(3) 3.26% 3.18%
Expenses after custodian
fee reduction(3) 3.24% 3.08%
Net investment loss (2.07)% (1.38)%
Portfolio Turnover of the
Portfolio 80% 60%
- ----------------------------------------------------------
</TABLE>
(1) Net investment loss per share was computed using average shares
outstanding.
(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
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Includes the Fund's share of the Portfolio's allocated expenses.
SEE NOTES TO FINANCIAL STATEMENTS
8
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS B
------------------------------------------------------------
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1999(1) 1998(1) 1997 1996(1) 1995
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------
Net asset value -- Beginning
of year $ 5.660 $ 6.230 $ 5.910 $ 6.550 $ 9.840
- -----------------------------------------------------------------------------------------------
Income (loss) from operations
- -----------------------------------------------------------------------------------------------
Net investment loss $(0.193) $(0.110) $(0.126) $(0.099) $(0.176)
Net realized and unrealized
gain (loss) 6.183 (0.460) 0.446 (0.541) (3.114)
- -----------------------------------------------------------------------------------------------
TOTAL INCOME (LOSS) FROM
OPERATIONS $ 5.990 $(0.570) $ 0.320 $(0.640) $(3.290)
- -----------------------------------------------------------------------------------------------
NET ASSET VALUE -- END OF YEAR $11.650 $ 5.660 $ 6.230 $ 5.910 $ 6.550
- -----------------------------------------------------------------------------------------------
TOTAL RETURN(2) 105.83% (9.15)% 5.42% (9.77)% (33.43)%
- -----------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- -----------------------------------------------------------------------------------------------
Net assets, end of year
(000's omitted) $34,671 $43,063 $68,812 $74,661 $21,041
Ratios (As a percentage of
average daily net assets):
Expenses(3) 3.69% 3.69% 3.08% 2.88% 3.31%
Expenses after custodian
fee reduction(3) 3.67% 3.59% 3.05% 2.65% 2.90%
Net investment loss (2.55)% (1.87)% (1.67)% (1.46)% (1.74)%
Portfolio Turnover of the
Portfolio 80% 60% 48% 46% 38%
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) Net investment loss per share was computed using average shares
outstanding.
(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
reinvested at the net asset value on the reinvestment date. Total return
is not computed on an annualized basis.
(3) Includes the Fund's share of the Portfolio's allocated expenses.
SEE NOTES TO FINANCIAL STATEMENTS
9
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS
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 (95.9% at December 31, 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 accounting
principles generally accepted in the United States of America.
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, 1999, the Fund,
for federal income tax purposes had a capital loss carryover of $9,594,626
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, 2003 ($1,446,364), December 31, 2004
($1,727,167), December 31, 2005 ($1,044,519), December 31, 2006 ($5,376,576).
Additionally, at December 31, 1999, net currency loss of $13,814 attributable
to security transactions incurred after October 31, 1999, 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, have been amortized on
the straight-line basis over five years and were fully amortized at
December 31, 1999.
E Use of Estimates -- The preparation of the 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 income 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 total expenses in the Statement of Operations.
10
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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, 1999, the fee was equivalent to 0.25% of the Fund's average net
assets for such period and amounted to $104,495. 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. The Fund
was informed that Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM
and the Fund's principal underwriter, received $5,703 from the Eaton Vance
Greater India Fund as its portion of the sales charge on sales of Class A
shares for the year ended December 31, 1999.
Certain officers and Trustees of the Fund and of the Portfolio are officers
of the above organization.
3 Shares of Beneficial Interest
- -------------------------------------------
The Fund's Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest (without par
value). Such shares may be issued in a number of different series (such as
the Fund) and classes. Transactions in Fund shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
CLASS A 1999 1998
<S> <C> <C>
------------------------------------------------------------------
Sales 900,385 416,410
Redemptions (1,319,065) (999,941)
Issued to EV Traditional Greater India
Fund shareholders -- 1,973,120
------------------------------------------------------------------
NET INCREASE (DECREASE) (418,680) 1,389,589
------------------------------------------------------------------
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------
CLASS B 1999 1998
<S> <C> <C>
------------------------------------------------------------------
Sales 400,165 557,166
Redemptions (5,031,687) (3,998,326)
------------------------------------------------------------------
NET DECREASE (4,631,522) (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 statements and tax earnings
and profits which result in temporary over-distributions for financial
statement purposes are classified as distributions in excess of net
investment income or accumulated net realized losses. Permanent differences
between book and tax accounting are reclassified to paid-in capital.
During the year ended December 31, 1999, $1,027,768 was reclassified from
accumulated net investment loss to paid-in-capital due to permanent
differences between book and tax accounting for operating losses.
Additionally, $656,016 was reclassified from accumulated net realized loss
from the Portfolio to paid-in-capital due to permanent differences between
book and tax accounting for capital losses. Net investment loss, net realized
gain on investment transactions, and net assets were unaffected by these
reclassifications.
5 Investment Transactions
- -------------------------------------------
For the year ended December 31, 1999, increases and decreases in the Fund's
investment in the Portfolio aggregated $10,313,173 and $48,169,144,
respectively.
6 Distribution Plan
- -------------------------------------------
The Fund has in effect distribution plans for Class A (Class A Plan) and
Class B (Class B Plan) shares (collectively, 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% of that portion of the Fund's average
daily net assets attributable to Class A shares
11
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
which have remained outstanding for less than one 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), and 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 $1,788,000 at December 31, 1999. The amounts paid by
the Adviser to EVD are equivalent to 0.15% of the Fund's average daily 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 $28,086 and $248,269
for Class A and Class B shares, respectively, to or payable to EVD for the
year ended December 31, 1999, representing 0.32% and 0.75% of average daily
net assets attributable to Class A and Class B shares, respectively.
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. On
October 4, 1999, the Trustees approved service fee payments equal to 0.25%
per annum of the Fund's average daily net assets attributable to Class B
shares for any fiscal year on shares of the Fund sold on or after
October 12, 1999. 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 year ended
December 31, 1999, service fees amounted to $16,425, and $56,395 for Class A
and Class B shares, representing 0.18% 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
organization.
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 year ended December 31, 1999, EVD received
approximately $767,000 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.
12
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 1999
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 Eaton
Vance Greater India Fund (one of the Funds constituting the Eaton Vance Special
Investment Trust) as of December 31, 1999, and the related statement of
operations and cash flows for the year then ended, the statements of changes in
net assets for each of the two years then ended and the financial highlights for
each of the years in the five-year period then ended. 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 on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Eaton Vance Greater
India Fund series of the Eaton Vance Special Investment Trust at December 31,
1999, and the results of its operations, its cash flows, 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 11, 2000
13
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
PORTFOLIO OF INVESTMENTS
COMMON STOCKS -- 93.7%
INDIA -- 93.7%
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
Agricultural Equipment -- 3.2%
- ----------------------------------------------------------------------
Punjab Tractors Ltd. 65,050 $ 1,554,766
The most efficient tractor manufacturer
in India.
- ----------------------------------------------------------------------
$ 1,554,766
- ----------------------------------------------------------------------
Apparel -- 0.0%
- ----------------------------------------------------------------------
Bata India Ltd.(1) 25 $ 79
The dominiate branded shoemaker of
India.
- ----------------------------------------------------------------------
$ 79
- ----------------------------------------------------------------------
Auto and Parts -- 7.3%
- ----------------------------------------------------------------------
Hero Honda Motors Ltd. 55,700 $ 1,446,470
Hero Honda Motors Ltd. 16,800 436,278
Honda's motorcycle manufacturer and
distributor in India.
IFB Industries Ltd.(2) 50 9
Manufacturer of high precision
engineering tools and domestic
appliances.
Motor Industries 14,150 1,627,372
A subsidiary of Robert Bosch of Germany
with a presence in the auto components
industry, with products such as spark
plugs and fuel injection pumps.
- ----------------------------------------------------------------------
$ 3,510,129
- ----------------------------------------------------------------------
Banking and Finance -- 2.6%
- ----------------------------------------------------------------------
HDFC Bank Ltd. 336,966 $ 1,251,754
One of the fastest growing private
sector banks in India.
- ----------------------------------------------------------------------
$ 1,251,754
- ----------------------------------------------------------------------
Banks and Money Services -- 0.0%
- ----------------------------------------------------------------------
Kotak Mahindra Finance Ltd.(1) 300 $ 1,428
Bill discounting and consumer financing.
Oriental Bank of Commerce(1) 100 106
Public sector retail bank.
State Bank of India(1) 100 517
The largest public sector commercial
bank in India, with over 8000 branches.
Engaged in retail banking and a range of
non-fund based activities.
- ----------------------------------------------------------------------
$ 2,051
- ----------------------------------------------------------------------
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
Beverages -- 0.0%
- ----------------------------------------------------------------------
Tata Tea Ltd.(1) 100 $ 1,208
Integrated tea company with substantial
presence in plantation as well as direct
marketing of branded tea.
- ----------------------------------------------------------------------
$ 1,208
- ----------------------------------------------------------------------
Broadcasting and Cable -- 8.3%
- ----------------------------------------------------------------------
Zee Telefilms Ltd. 160,000 $ 4,021,806
Dominant television broadcaster in
India.
- ----------------------------------------------------------------------
$ 4,021,806
- ----------------------------------------------------------------------
Chemicals -- 4.7%
- ----------------------------------------------------------------------
Hindustan Lever Chemicals Ltd. 145,400 $ 1,657,844
Lever's fertilizer company in India.
Indian Petrochemicals Corp. Ltd. 240,000 601,725
An intergrated public sector company in
the petrochemical industry with major
products being polymers and chemical
intermediates.
Reliance Industries Ltd.(1) 1,794 9,644
Integrated petrochemical company with
world class capacities and major
presence in polyesters and polymers.
Tata Chemicals(1) 1,200 1,587
A diversified company with a major
presence in soda ash, caustic soda and
fertilizers.
Thermax Ltd.(1) 1,742 5,495
Niche supplier of boilers and pollution
control equipment.
- ----------------------------------------------------------------------
$ 2,276,295
- ----------------------------------------------------------------------
Computer Equipment -- 0.3%
- ----------------------------------------------------------------------
Fujitsu ICIM Ltd.(1)(2) 8,850 $ 135,178
A multinational vendor of software
services.
- ----------------------------------------------------------------------
$ 135,178
- ----------------------------------------------------------------------
Computer Software -- 25.3%
- ----------------------------------------------------------------------
Digital Equipments (India) Ltd.(1) 96,200 $ 2,478,298
Indian subsidiary of Digital USA
involved solely in software development.
Hughes Software Systems(2) 5,300 506,734
A computer software developer
specializing in telecommunication
software.
Infosys Technologies Ltd. 18,400 6,143,738
India's dominant software services
provider.
NIIT Ltd. 40,000 3,050,535
Largest company providing software
education and services in India.
Onward Technologies Ltd.(1)(2) 500 9,722
Software unit of Novell India.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
14
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
Computer Software (continued)
- ----------------------------------------------------------------------
Tata Infotech Ltd. 25 $ 509
One of the largest information
technology service and solution
providers in India with interest in
software development, distribution,
networking, maintenance, support and
training.
- ----------------------------------------------------------------------
$12,189,536
- ----------------------------------------------------------------------
Conglomerates -- 0.0%
- ----------------------------------------------------------------------
Indian Rayon & Industries Ltd. 5 $ 13
Diversified company with interests in
cement, textiles, rayon and carbon
black.
- ----------------------------------------------------------------------
$ 13
- ----------------------------------------------------------------------
Diversified Industry -- 0.0%
- ----------------------------------------------------------------------
Enkay Texofood Industries Ltd.(1)(2) 546 $ 241
Has business interests in the
manufacturing of synthetic yarns and the
export of processed foods.
Thiru Arooran Sugars(1) 100 120
A manufacturer of sugar and industrial
alcohol. Has also made foray into
cogeneration of power through bagasse.
- ----------------------------------------------------------------------
$ 361
- ----------------------------------------------------------------------
Electric Utilities -- 0.0%
- ----------------------------------------------------------------------
BSES Ltd.(1) 50 $ 220
A monopoly distributor of power in
suburban Bombay.
- ----------------------------------------------------------------------
$ 220
- ----------------------------------------------------------------------
Engineering -- 4.8%
- ----------------------------------------------------------------------
Cummins India Ltd.(1) 100,898 $ 1,327,514
A 51% subsidiary of Cummins US, is a
leading manufacturer of IC engines for
industrial and power generation
industries.
Siemens India Ltd.(1)(2) 85,000 998,689
A 51% subsidiary of Siemens, Germany, is
a leading player in power generation and
distribution equipment, industrial
projects, transportation systems,
communication and healthcare products.
- ----------------------------------------------------------------------
$ 2,326,203
- ----------------------------------------------------------------------
Foods -- 2.1%
- ----------------------------------------------------------------------
Smithkline Beecham Consumer Healthcare
Ltd. 83,885 $ 998,516
Unit of Smithkline UK selling milk
additives and biscuits.
- ----------------------------------------------------------------------
$ 998,516
- ----------------------------------------------------------------------
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
Health and Personal Care -- 7.0%
- ----------------------------------------------------------------------
Cipla Ltd. 41,000 $ 1,310,868
Market leader in anti-bacterial,
anti-asthmatic, and anti-cancer entering
into segments of cardiovascular and
dermatology.
Wockhardt Ltd.(1) 94,000 2,075,892
The 5th largest pharmaceutical company
in India, with focus on research based
pharmaceutical business. Has several key
brands in anti-infective and pain killer
segments.
- ----------------------------------------------------------------------
$ 3,386,760
- ----------------------------------------------------------------------
Household Products -- 6.5%
- ----------------------------------------------------------------------
Hindustan Lever Ltd.(1) 60,400 $ 3,125,934
A diversified multinational of the
Unilever group and a market leader in
soap and detergents, personal care &
food processing industries.
Reckitt and Colman of India Ltd.(1) 50 368
Manufacturer of household products such
as mosquito repellent, surface cleaning
agents and antiseptic lotions.
- ----------------------------------------------------------------------
$ 3,126,302
- ----------------------------------------------------------------------
Information Technology -- 10.4%
- ----------------------------------------------------------------------
DSQ Software Ltd. 100,000 $ 1,916,044
One of the top software exporting
companies in India and has achieved the
SEI CMM Level 4 certification, with
strong presence in CAD/ CAM segment.
Global Telesystems Ltd. 65,000 1,432,317
Operates in three distinct areas:
telecommunication networks and
infrastructure, software and internet
solutions and consumer telecommunication
products.
VisualSoft (India) Ltd.(1) 9,300 1,673,455
Has a revenue mix unique in Indian
information technology services, with
software services and products
constituting over 90% of revenues. The
company has developed expertise in
Internet and e-commerce segments.
- ----------------------------------------------------------------------
$ 5,021,816
- ----------------------------------------------------------------------
Investment Services -- 0.0%
- ----------------------------------------------------------------------
ICICI Ltd.(1) 150 $ 317
Development finance company supporting
infrastructure projects.
- ----------------------------------------------------------------------
$ 317
- ----------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
15
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
Lodging and Gaming -- 0.0%
- ----------------------------------------------------------------------
Hotel Leela Venture Ltd.(1) 550 $ 394
Operates business hotels and a beach
resort in Bombay and Goa, respectively.
- ----------------------------------------------------------------------
$ 394
- ----------------------------------------------------------------------
Manufacturing -- 2.5%
- ----------------------------------------------------------------------
Gujarat Natural Gas Co. Ltd.(1) 95,500 $ 1,229,913
Subsidiary of British Gas involved in
gas distribution in India.
- ----------------------------------------------------------------------
$ 1,229,913
- ----------------------------------------------------------------------
Medical Products -- 0.0%
- ----------------------------------------------------------------------
Ranbaxy Laboratories Ltd.(1) 514 $ 10,913
Presence in anti-bacterial and
antibiotics segments, and a major
exporter of bulk drugs
and formulations.
- ----------------------------------------------------------------------
$ 10,913
- ----------------------------------------------------------------------
Metals - Industrial -- 0.0%
- ----------------------------------------------------------------------
Tata Iron and Steel Co. Ltd.(1) 56 $ 182
India's most profitable steel company.
- ----------------------------------------------------------------------
$ 182
- ----------------------------------------------------------------------
Miscellaneous Materials and Commodities -- 0.0%
- ----------------------------------------------------------------------
Flex Industries Ltd.(2) 4,274 $ 2,261
An intergrated player in the packaging
industry, manufacturing flexible
packaging materials.
- ----------------------------------------------------------------------
$ 2,261
- ----------------------------------------------------------------------
Multi-Industry -- 5.9%
- ----------------------------------------------------------------------
Grasim Industries Ltd. 1 $ 9
A diversified conglomerate with interest
in viscose staple fibre (India's largest
producer), caustic soda, cement (third
largest producer in India) and gas based
sponge iron (third largest producer in
India).
Larsen and Toubro Ltd.(1) 223,300 2,855,261
A diversified conglomerate with presence
in cement, engineering and construction
and information technology segments. It
is India's largest private sector
company in the engineering and
construction segment and the second
largest cement manufacturer with over
12mtpa capacity.
- ----------------------------------------------------------------------
$ 2,855,270
- ----------------------------------------------------------------------
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
Oil and Gas - Integrated -- 0.0%
- ----------------------------------------------------------------------
Hindustan Petroleum(1) 300 $ 1,263
One of the top three oil refining and
marketing companies in India.
- ----------------------------------------------------------------------
$ 1,263
- ----------------------------------------------------------------------
Personal Products and Chemicals -- 2.8%
- ----------------------------------------------------------------------
Nirma Ltd. 80,000 $ 1,327,200
A major leader in the soap and detergent
market.
- ----------------------------------------------------------------------
$ 1,327,200
- ----------------------------------------------------------------------
Telecommunications -- 0.0%
- ----------------------------------------------------------------------
Mahangar Telephone Nigam Ltd.(1) 1,100 $ 4,883
Government owned monopoly provider of
fixed wire telephone services in India's
major cities of Bombay and Delhi.
- ----------------------------------------------------------------------
$ 4,883
- ----------------------------------------------------------------------
Transportation -- 0.0%
- ----------------------------------------------------------------------
Great Eastern Shipping Co.(1) 700 $ 318
Diversified company with interests in
shipping and property development.
- ----------------------------------------------------------------------
$ 318
- ----------------------------------------------------------------------
Total Common Stocks
(identified cost $23,163,355) $45,235,907
- ----------------------------------------------------------------------
Total Investments -- 93.7%
(identified cost $23,163,355) $45,235,907
- ----------------------------------------------------------------------
Other Assets, Less Liabilities -- 6.3% $ 3,042,261
- ----------------------------------------------------------------------
Net Assets -- 100.0% $48,278,168
- ----------------------------------------------------------------------
</TABLE>
Company descriptions are unaudited.
(1) The above securities held by the Portfolio, on December 31, 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 December 31, 1999, the aggregate
value of these securities amounted to $2,874,476 representing 5.95% of
the Portfolio's net assets. (Note 5)
(2) Non-income producing security.
SEE NOTES TO FINANCIAL STATEMENTS
16
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
PORTFOLIO OF INVESTMENTS CONT'D
TOP TEN HOLDINGS
<TABLE>
<CAPTION>
PERCENTAGE
COMPANY INDUSTRY SECTOR OF NET ASSETS VALUE
<S> <C> <C> <C>
-----------------------------------------------------------------------------------
Infosys Technologies Ltd. Computer Software 12.7% $6,143,738
Zee Telefilms Ltd. Broadcasting and Cable 8.3 4,021,806
Hindustan Lever Ltd. Household Products 6.5 3,125,934
NIIT Ltd. Computer Software 6.3 3,050,535
Larsen and Toubro Ltd. Multi-Industry 5.9 2,855,261
Digital Equipments (India) Computer Software
Ltd. 5.1 2,478,298
Wockhardt Ltd. Health and Personal Care 4.3 2,075,892
DSQ Software Ltd. Information Technology 4.0 1,916,044
Hero Honda Motors Ltd. Auto and Parts 3.9 1,882,748
VisualSoft (India) Ltd. Information Technology 3.5 1,673,455
</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 25.3% $12,189,536
Information Technology 10.4 5,021,816
Broadcasting and Cable 8.3 4,021,806
Auto and Parts 7.3 3,510,129
Health and Personal Care 7.0 3,386,760
Household Products 6.5 3,126,302
Multi-Industry 5.9 2,855,270
Engineering 4.8 2,326,203
Chemicals 4.7 2,276,295
Agricultural Equipment 3.2 1,554,766
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
17
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1999
<S> <C>
Assets
- -----------------------------------------------------
Investments, at value
(identified cost, $23,163,355) $45,235,907
Cash 866,619
Foreign currency, at value
(identified cost, $2,229,189) 2,229,870
Receivable for investments sold 20,328
Interest and dividends receivable 30,739
- -----------------------------------------------------
TOTAL ASSETS $48,383,463
- -----------------------------------------------------
Liabilities
- -----------------------------------------------------
Payable to affiliate for Trustees' fees $ 893
Accrued expenses 104,402
- -----------------------------------------------------
TOTAL LIABILITIES $ 105,295
- -----------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
INTEREST IN PORTFOLIO $48,278,168
- -----------------------------------------------------
Sources of Net Assets
- -----------------------------------------------------
Net proceeds from capital contributions
and withdrawals $26,204,750
Net unrealized appreciation (computed on
the basis of identified cost) 22,073,418
- -----------------------------------------------------
TOTAL $48,278,168
- -----------------------------------------------------
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEAR ENDED
DECEMBER 31, 1999
<S> <C>
Investment Income
- -----------------------------------------------------
Dividends (net of foreign taxes, $1,856) $ 490,461
Interest (net of foreign taxes, $762) 2,724
- -----------------------------------------------------
TOTAL INVESTMENT INCOME $ 493,185
- -----------------------------------------------------
Expenses
- -----------------------------------------------------
Investment adviser fee $ 327,790
Administration fee 109,371
Trustees fees and expenses 9,602
Custodian fee 308,511
Legal and accounting services 82,622
Interest expense 68,046
Amortization of organization expenses 5,445
Miscellaneous 1,101
- -----------------------------------------------------
TOTAL EXPENSES $ 912,488
- -----------------------------------------------------
Deduct --
Reduction of custodian fee $ 7,396
- -----------------------------------------------------
TOTAL EXPENSE REDUCTIONS $ 7,396
- -----------------------------------------------------
NET EXPENSES $ 905,092
- -----------------------------------------------------
NET INVESTMENT LOSS $ (411,907)
- -----------------------------------------------------
Realized and Unrealized Gain (Loss)
- -----------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified
cost basis) (net of foreign
taxes, $446,642) $21,591,875
Foreign currency transactions (235,086)
- -----------------------------------------------------
NET REALIZED GAIN $21,356,789
- -----------------------------------------------------
Change in unrealized appreciation
(depreciation) --
Investments (identified cost basis) $13,124,168
Foreign currency (17,498)
- -----------------------------------------------------
NET CHANGE IN UNREALIZED
APPRECIATION (DEPRECIATION) $13,106,670
- -----------------------------------------------------
NET REALIZED AND UNREALIZED GAIN $34,463,459
- -----------------------------------------------------
NET INCREASE IN NET ASSETS FROM
OPERATIONS $34,051,552
- -----------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
18
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Increase (Decrease) YEAR ENDED YEAR ENDED
IN NET ASSETS DECEMBER 31, 1999 DECEMBER 31, 1998
<S> <C> <C>
- ------------------------------------------------------------------------------
From operations --
Net investment loss $ (411,907) $ (103,792)
Net realized gain (loss) 21,356,789 (12,728,099)
Net change in unrealized appreciation
(depreciation) 13,106,670 7,726,459
- ------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS $ 34,051,552 $ (5,105,432)
- ------------------------------------------------------------------------------
Capital transactions --
Contributions $ 10,651,675 $ 5,420,705
Withdrawals (49,158,808) (31,756,273)
- ------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS FROM CAPITAL
TRANSACTIONS $ (38,507,133) $ (26,335,568)
- ------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS $ (4,455,581) $ (31,441,000)
- ------------------------------------------------------------------------------
Net Assets
- ------------------------------------------------------------------------------
At beginning of year $ 52,733,749 $ 84,174,749
- ------------------------------------------------------------------------------
AT END OF YEAR $ 48,278,168 $ 52,733,749
- ------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
Increase (Decrease) in Cash DECEMBER 31, 1999
<S> <C>
- -----------------------------------------------------------
Cash Flows From (For) Operating
Activities --
Purchase of investments $ (33,687,595)
Proceeds from sale of investments 70,856,782
Dividends, interest and tax reclaims
received 498,451
Operating expenses paid (1,000,304)
Foreign taxes paid (446,642)
Foreign currency transactions 2,036,102
- -----------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES $ 38,256,794
- -----------------------------------------------------------
Cash Flows From (For) Financing
Activities --
Proceeds from capital contributions $ 10,651,675
Payments for capital withdrawals (49,158,808)
- -----------------------------------------------------------
NET CASH USED FOR FINANCING ACTIVITIES $ (38,507,133)
- -----------------------------------------------------------
NET DECREASE IN CASH $ (250,339)
- -----------------------------------------------------------
CASH AT BEGINNING OF YEAR $ 1,116,958
- -----------------------------------------------------------
CASH AT END OF YEAR $ 866,619
- -----------------------------------------------------------
Reconciliation of Net Increase in Net Assets
From Operations to Net Cash From
Operating Activities
- -----------------------------------------------------------
Net increase in net assets from
operations $ 34,051,552
Decrease in receivable for investments
sold 3,937,961
Decrease in foreign currency 2,288,686
Decrease in dividends, interest and
other receivables 5,266
Decrease in deferred organizational
expense 5,445
Decrease in payable for investments
purchased (766,548)
Increase in payable to affiliate 298
Decrease in accrued expenses and other
liabilites (100,955)
Net increase in investment (1,164,911)
- -----------------------------------------------------------
NET CASH FROM OPERATING ACTIVITIES $ 38,256,794
- -----------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
19
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
FINANCIAL STATEMENTS CONT'D
SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------------------
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------
Ratios to average daily net assets
- ---------------------------------------------------------------------------
Expenses 2.09% 1.97% 1.61% 1.51% 1.76%
Expenses after custodian fee
reduction 2.07% 1.87% 1.58% 1.28% 1.35%
Net investment loss (0.94)% (0.16)% (0.20)% (0.11)% (0.18)%
Portfolio Turnover 80% 60% 48% 46% 38%
- ---------------------------------------------------------------------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
20
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS
1 Significant Accounting Policies
- -------------------------------------------
South Asia Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a diversified, open-end 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 or are
considered unreliable 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 federal tax
purposes. No provision is made by the Portfolio for federal or state taxes on
any taxable income of the Portfolio because each investor in the Portfolio is
individually responsible for the payment of any taxes on its share of such
income. Since some of the Portfolio's investors are regulated investment
companies that invest all or substantially all of their assets in the
Portfolio, the Portfolio normally must satisfy the applicable source of
income and diversification requirements (under the Internal Revenue Code), in
order for its investors to satisfy them. The Portfolio will allocate, at
least annually among its investors, each investor's distributive share of the
Portfolio's net investment income, net realized capital gains, and any other
items of income, gain, loss, deduction or credit. Withholding taxes on
foreign dividends and capital gains have been provided for in accordance with
the Portfolio's understanding of the applicable countries' tax rules and
rates.
C Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization, including registration costs, have been
amortized on the straight-line basis over five years and are fully amortized
at December 31, 1999.
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 changes in foreign currency exchange
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 results from fluctuations in foreign currency exchange rates
is 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.
21
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS 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
balance the Portfolio maintains with IBT. All significant credit balances
used to reduce the Portfolio's custodian fees are reported as a reduction of
total expenses in the Statement of Operations.
H Use of Estimates -- The preparation of the 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 income 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.
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, 1999, the
adviser fee was 0.75% of average daily net assets and amounted to $327,790.
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 year ended December 31, 1999, the administration fee was
0.25% of average net assets and amounted to $109,371. 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
officers and Trustees of the Portfolio are officers of the above
organizations.
3 Investment Transactions
- -------------------------------------------
For the year ended December 31, 1999, purchases and sales of investments,
other than short-term obligations, aggregated $32,921,047 and $66,918,821,
respectively.
4 Federal Income Tax Basis of Investments
- -------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at December 31, 1999 as computed on a federal income tax
basis, were as follows:
<TABLE>
<S> <C>
AGGREGATE COST $23,164,292
-----------------------------------------------------
Gross unrealized appreciation $22,794,603
Gross unrealized depreciation (722,988)
-----------------------------------------------------
NET UNREALIZED APPRECIATION $22,071,615
-----------------------------------------------------
</TABLE>
5 Risks Associated with Foreign Investments
- -------------------------------------------
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those
not subject to the disclosure and reporting requirements of the U.S.
securities laws. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and standards of
practice comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in
investment or exchange control regulations, expropriation or confiscatory
taxation, limitation on the removal of funds or other assets of the
Portfolio, political or financial instability or diplomatic and other
developments which could affect such investments. Foreign stock markets,
while growing in volume and sophistication, are generally not as developed as
those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and
more volatile than securities of comparable U.S. companies. In general, there
is less overall governmental supervision and regulation of foreign securities
markets, broker-dealers, and issuers than in the United States.
Settlement of securities transactions in the Indian subcontinent may be
delayed and is generally less frequent
22
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
NOTES TO FINANCIAL STATEMENTS CONT'D
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 $150 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 year ended
December 31, 1999 was $1,272,962 and the average interest rate was 5.35%. As
of December 31, 1999, there was no loan outstanding.
23
<PAGE>
SOUTH ASIA PORTFOLIO AS OF DECEMBER 31, 1999
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND INVESTORS
OF SOUTH ASIA PORTFOLIO:
- ---------------------------------------------
We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments, of South Asia Portfolio as of December 31, 1999,
and the related statements of operations and cash flows for the year then ended,
the statements of changes in net assets for each of the two years then ended and
the supplementary data for each of the years in the five-year period then ended.
These financial statements and supplementary data are the responsibility of the
Portfolio's management. Our responsibility is to express an opinion on these
financial statements and supplementary data based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the 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 securities owned as of
December 31, 1999, by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other audit 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, 1999, and the results of its operations, its cash flows, 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 11, 2000
24
<PAGE>
EATON VANCE GREATER INDIA FUND AS OF DECEMBER 31, 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
Zaheer Sitabkhan
Vice President
Scobie Dickinson Ward
Vice President, Assistant
Secretary and Assistant Treasurer
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
25
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<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 INVESTMENT 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
PFPC GLOBAL FUND SERVICES
Attention: Eaton Vance Funds
P.O. Box 9653
Providence, RI 02904-9653
INDEPENDENT AUDITORS
DELOITTE & TOUCHE LLP
200 Berkeley Street
Boston, MA 02116-5022
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.
- --------------------------------------------------------------------------------
