<PAGE>
South Asia Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited)
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Common Stocks -- 95.9%
Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Bangladesh -- 0.8%
Housing -- 0.1%
- --------------------------------------------------------------------------------
Eastern Housing Ltd. 50,180 $ 177,809
Housing/construction company in
Bangladesh.
- --------------------------------------------------------------------------------
$ 177,809
- --------------------------------------------------------------------------------
Textiles -- 0.7%
- --------------------------------------------------------------------------------
Apex Spinning & Knitting 48,000 $ 199,038
Cotton spinning mill.
Apex Tannery Ltd. 23,000 347,434
Leather tanning and processing.
Monno Fabrics 95,000 279,145
Integrated textile mill.
- --------------------------------------------------------------------------------
$ 825,617
- --------------------------------------------------------------------------------
Total Bangladesh
(identified cost $1,172,048) $ 1,003,426
- --------------------------------------------------------------------------------
India -- 81.7%
Auto and Parts -- 10.5%
- --------------------------------------------------------------------------------
Bajaj Auto Ltd./(1)/ 112,400 $ 2,891,631
World's second largest
motorcycle, moped & scooter
manufacturer.
IFB Industries Ltd./(1)/ 50 31
Automotive components and
consumer durables.
Mahindra & Mahindra 140,666 1,701,351
Mahindra & Mahindra GDR 131,668 1,942,103
Major manufacturer of utility
vehicles & tractors.
Motor Industries 6,150 1,205,177
Subsidiary of Robert Bosch
(Germany). Major manufacturer
of auto components.
T.V.S. Suzuki/(1)/ 141,750 1,841,166
India's second largest
motorcycle, moped & scooter
manufacturer.
Tata Engineering & Locomotion GDR 95,862 1,471,482
Tata Engineering & Locomotive GDR 120,000 1,842,000
India's largest auto producer
and distributor
- --------------------------------------------------------------------------------
$ 12,894,941
- --------------------------------------------------------------------------------
Banks and Money Services -- 8.8%
- --------------------------------------------------------------------------------
Industrial Credit and Investment 2,250 $ 4,918
Corp.
India's major development financial
institution.
Karur Vysya Bank/(1)/ 189,500 950,147
Private sector retail bank.
Kotak Mahindra Finance Ltd/(1)/ 403,600 462,223
Leading non-bank financial
institution for corporate and
consumer markets.
Oriental Bank of Commerce/(1)/ 1,201,200 2,373,880
Public sector retail bank.
State Bank of India/(1)/ 602,800 5,729,126
State Bank of India GDR 50,000 1,325,000
Largest commercial bank in
India with over 8,000 branches.
- --------------------------------------------------------------------------------
$ 10,845,294
- --------------------------------------------------------------------------------
Beverages -- 0.3%
- --------------------------------------------------------------------------------
Tata Tea Ltd. 30,200 $ 327,307
Integrated tea producer.
- --------------------------------------------------------------------------------
$ 327,307
- --------------------------------------------------------------------------------
Building Materials -- 0.3%
- --------------------------------------------------------------------------------
Asian Paints (India) Ltd./(1)/ 6,650 $ 68,358
Leading producer of decorative paints.
Associated Cement Cos. Ltd./(1)/ 1,086 44,062
Manufacturer of cement.
Murudeshwar Ceramics Ltd./(1)/ 298,240 249,922
Manufacturer of glazed ceramic
wall and floor tiles.
- --------------------------------------------------------------------------------
$ 362,342
- --------------------------------------------------------------------------------
Chemicals -- 1.4%
- --------------------------------------------------------------------------------
Hoechst Schering Agrevo Ltd. 85,700 $ 1,615,852
Agrochemical & pesticide
manufacturer.
Indian Petrochemicals Corp./(1)/ 9,780 39,612
Major producer of polymers &
chemical intermediates.
Tata Chemicals 1,449 7,336
Diversified company
manufacturing soda ash, caustic
soda & fertilizers.
Zuari Agrochemicals/(1)/ 2,500 9,637
Zuari Agrochemicals (rts) 2,500 8,939
Producer of fertilizers & cement
- --------------------------------------------------------------------------------
$ 1,681,376
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
9
<PAGE>
South Asia Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Shares Value
- ---------------------------------------------------------------------------
<S> <C> <C>
Computer Software -- 4.3%
- ---------------------------------------------------------------------------
Infosys Technologies Ltd. 103,100 $ 5,356,592
Producer of specialized software for
banking and retail sectors.
- ---------------------------------------------------------------------------
$ 5,356,592
- ---------------------------------------------------------------------------
Conglomerates -- 9.2%
- ---------------------------------------------------------------------------
Indian Rayon & Industries Ltd./(1)/ 5,900 $ 60,936
Diversified company with interests
in cement, textiles, rayon and
carbon black.
Larsen & Toubro Ltd./(1) 239,650 1,633,369
Larsen & Toubro Ltd. GDR 133,700 2,306,325
Diversified company with
interests in engineering,
construction, cement, and
switchgears.
Ramco Industries Ltd./(1)/ 69,050 2,488,116
Diversified company with
interests in building
materials, textiles and
computer software.
S & S Industries & Enterprise/(1)/ 4,260 773
Diversified company with
interests in environmental
engineering, edible oils
and aquaculture.
Thermax Ltd./(1)/ 497,200 4,860,894
Conglomerate with interests in
energy, environment &
chemicals, manufacturing
of industrial boilers, heat and
pollution control equipment.
Triveni Engineering/(1)/ 1,633 2,144
Manufacturer of sugar, sugar
machinery and turbines.
- ---------------------------------------------------------------------------
$ 11,352,557
- ---------------------------------------------------------------------------
Construction -- 0.1%
- ---------------------------------------------------------------------------
Nagarjuna Construction 112,500 $ 103,701
Construction activities in the
infrastructure and housing sectors.
- ---------------------------------------------------------------------------
$ 103,701
- ---------------------------------------------------------------------------
Consumer Products -- 3.0%
- ---------------------------------------------------------------------------
ITC Ltd. 129,000 $ 2,027,786
Tobacco/consumer products
manufacturer in India
Marico Industries Ltd. 190,000 1,730,168
Personal care/consumer products
manufacturer in India
- ---------------------------------------------------------------------------
$ 3,757,954
- ---------------------------------------------------------------------------
Electric-Utilities -- 1.9%
- ---------------------------------------------------------------------------
BSES Ltd. 351,600 $ 2,339,908
Electricity generator,
transmitter and distributor to
suburban Bombay.
- ---------------------------------------------------------------------------
$ 2,339,908
- ---------------------------------------------------------------------------
Electrical Equipment -- 1.4%
- ---------------------------------------------------------------------------
Asea Brown Boveri (India) Ltd./(1)/ 90,000 $ 1,688,757
Indian subsidiary of Swedish-Swiss
electrical power equipment
manufacturer.
- ---------------------------------------------------------------------------
$ 1,688,757
- ---------------------------------------------------------------------------
Household Products -- 9.2%
- ---------------------------------------------------------------------------
Enkay Texofood Industries Ltd./(1)/ 786 $ 329
Manufacturer of synthetic yarn
and processed foods.
Hindustan Lever Ltd./(1)/ 280,350 11,272,733
Subsidiary of Unilever,
manufacturer of soap,
detergents, personal care
products and processed foods.
- ---------------------------------------------------------------------------
$ 11,273,062
- ---------------------------------------------------------------------------
Industrial Equipment -- 1.5%
- ---------------------------------------------------------------------------
Punjab Tractors 91,400 $ 1,716,941
Dominant supplier of tractors in India.
VST Tillers/(1)/ 94,200 81,570
Manufacturer of power tillers,
harvesters and small tractors.
- ---------------------------------------------------------------------------
$ 1,798,511
- ---------------------------------------------------------------------------
Lodging and Gaming -- 1.9%
- ---------------------------------------------------------------------------
Hotel Leela Venture (wts)*/(2)/ 154 $ 172
Hotel Leela Venture Ltd./(1)/ 750 1,582
Operates hotels & beach resort
in Bombay & Goa.
Indian Hotels Co. Ltd./(1)/ 82,400 1,500,693
Indian Hotels Co. Ltd. GDR 35,850 851,438
India's largest hotel company.
- ---------------------------------------------------------------------------
$ 2,353,885
- ---------------------------------------------------------------------------
Machinery -- 0.3%
- ---------------------------------------------------------------------------
Otis Elevator (India) Ltd. 41,100 $ 384,308
Manufactures, installs and
services various types of
elevators, escalators and
travolators.
</TABLE>
See notes to financial statements
10
<PAGE>
South Asia Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Machinery (continued)
- --------------------------------------------------------------------------------
TTG Industries Ltd. 37,600 $ 16,804
Engineers pollution control and
wind energy equipment.
- --------------------------------------------------------------------------------
$ 401,112
- --------------------------------------------------------------------------------
Medical Products -- 9.0%
- --------------------------------------------------------------------------------
Cipla Ltd. 72,500 $ 1,504,172
Second largest pharmaceutical
company in India.
Crosland Research Laboratory 251,000 1,682,682
Pharmaceutical company
specializing in dermatology.
Glaxo (India) Ltd./(1)/ 161,750 1,673,977
Largest pharmaceutical
manufacturer in India.
Hoechst Marion Roussel Ltd./(1)/ 542,050 5,761,174
Fourth largest pharmaceutical
manufacturer in India.
Orchid Chemicals & 169,600 506,905
Pharmaceuticals/(1)/
Manufacturer and exporter of
"cephalosporin" range of antibiotics.
- --------------------------------------------------------------------------------
$ 11,128,910
- --------------------------------------------------------------------------------
Metals - Industrial -- 5.1%
- --------------------------------------------------------------------------------
Bellary Steels & Alloys/(1)/ 310,000 $ 110,838
Integrated private sector steel
manufacturer.
Essar Steel Ltd./(1)/ 705 364
Manufacturer of sponge iron &
hot rolled coils.
Hindalco Industries Ltd. GDR 152,500 5,390,875
India's second largest
integrated aluminum producer.
Sterlite Industries (India)/(1)/ 107,800 807,747
India's only private sector
copper manufacturer.
Tata Iron & Steel/(1)/ 2,250 12,020
India's largest private sector
steel manufacturer.
- --------------------------------------------------------------------------------
$ 6,321,844
- --------------------------------------------------------------------------------
Oil and Gas -
Exploration and Production -- 3.3%
- --------------------------------------------------------------------------------
Hindustan Petroleum Corp./(1)/ 325,500 $ 4,127,849
India's second largest petroleum
refining company.
- --------------------------------------------------------------------------------
$ 4,127,849
- --------------------------------------------------------------------------------
Paper and Forest Products -- 0.5%
- --------------------------------------------------------------------------------
Tamil Nadu Newsprint and Paper/(1)/ 359,800 $ 603,017
Manufacturer of paper.
- --------------------------------------------------------------------------------
$ 603,017
- --------------------------------------------------------------------------------
Specialty Chemicals and Materials -- 0.3%
- --------------------------------------------------------------------------------
Flex Industries/(1)/ 400 $ 444
Flex Industries (wts) 4,274 3,552
Manufacturer of packaging
materials.
Paper Products Ltd. Primary 62,500 244,850
Manufacturer of sugar and
industrial alcohol.
Rubber Products/(1)/ 132,000 49,777
Manufacturer of various
industrial rubber goods.
Shaan Interwell (India) 112,700 18,888
Manufacturer of corrugated boxes.
Thiru Arooran Sugars/(1)/ 500 1,117
Manufacturer of sugar and
industrial alcohol.
- --------------------------------------------------------------------------------
$ 318,628
- --------------------------------------------------------------------------------
Telecommunications -- 5.8%
- --------------------------------------------------------------------------------
Himachal Futuristic
Communications/(1)/ 23,460 $ 11,894
Telecommunications equipment
producer.
Mahanger Telephone Nigam Ltd./(1)/ 833,100 7,068,551
Government owned monopoly,
provider of telephone services
to Bombay & Delhi.
Usha Beltron Ltd. GDR 290 290
Manufacturer of
telecommunications cable.
- --------------------------------------------------------------------------------
$ 7,080,735
- --------------------------------------------------------------------------------
Telephone Utilities -- 3.6%
- --------------------------------------------------------------------------------
Videsh Sanchar Nigam Ltd. 135,100 $ 4,377,542
India's monopoly international
telephone service provider.
- --------------------------------------------------------------------------------
$ 4,377,542
- --------------------------------------------------------------------------------
Transportation -- 0.0%
- --------------------------------------------------------------------------------
GE Shipping/(1)/ 700 $ 958
Diversified company with interests
in shipping and property development.
- --------------------------------------------------------------------------------
$ 958
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
11
<PAGE>
South Asia Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) Con't
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Total India
(identified cost $82,712,853) $100,496,782
- --------------------------------------------------------------------------------
Pakistan -- 9.0%
Chemicals -- 1.3%
- --------------------------------------------------------------------------------
Engro Chemical Pakistan Ltd./(1)/ 162,750 $ 575,793
Second largest fertilizer producer
in Pakistan
Fauji Fertilizer 500,000 $ 983,436
Largest fertilizer producer in Pakistan.
- --------------------------------------------------------------------------------
$ 1,559,229
- --------------------------------------------------------------------------------
Electric Utilities -- 1.0%
- --------------------------------------------------------------------------------
Hub Power Co., Ltd. GDR 34,000 $ 837,420
Provider of 10% of Pakistan's
electricity supply.
Karachi Electric Supply Co./(1)/ 1,225,040 363,698
Electric distributor for Karachi.
- --------------------------------------------------------------------------------
$ 1,201,118
- --------------------------------------------------------------------------------
Household Products -- 1.8%
- --------------------------------------------------------------------------------
Lever Brothers Pakistan Ltd. 110,000 $ 2,204,382
Soaps, detergents, ice cream and tea.
- --------------------------------------------------------------------------------
$ 2,204,382
- --------------------------------------------------------------------------------
Insurance -- 0.9%
- --------------------------------------------------------------------------------
Adamjee Insurance Co./(1)/ 490,938 $ 1,105,291
Leading supplier of general insurance
in Pakistan.
- --------------------------------------------------------------------------------
$ 1,105,291
- --------------------------------------------------------------------------------
Medical Products -- 0.1%
- --------------------------------------------------------------------------------
Searle Pakistan 158,077 $ 129,060
Pakistan unit of multinational
pharmaceutical company.
- --------------------------------------------------------------------------------
$ 129,060
- --------------------------------------------------------------------------------
Oil and Gas - Equipment and Services -- 2.2%
- --------------------------------------------------------------------------------
Pakistan State Oil Co. Ltd./(1)/ 343,953 $ 2,774,121
National fuel oil and gasoline distributor.
- --------------------------------------------------------------------------------
$ 2,774,121
- --------------------------------------------------------------------------------
Telephone Utilities -- 1.6%
- --------------------------------------------------------------------------------
Pakistan Telecommunications GDR 25,750 $ 1,944,125
National domestic and long distance
telephone company.
- --------------------------------------------------------------------------------
$ 1,944,125
- --------------------------------------------------------------------------------
Textiles -- 0.1%
- --------------------------------------------------------------------------------
Nishat Chunian Ltd./(1)/ 305,840 $ 117,283
Textile spinning mill.
- --------------------------------------------------------------------------------
$ 117,283
- --------------------------------------------------------------------------------
Total Pakistan
(identified cost $12,347,390) $ 11,034,609
- --------------------------------------------------------------------------------
Sri Lanka -- 4.4%
Auto and Parts -- 0.0%
- --------------------------------------------------------------------------------
Kelani Tires 480 $ 53
Largest tire manufacturer in Sri Lanka.
- --------------------------------------------------------------------------------
$ 53
- --------------------------------------------------------------------------------
Banks and Money Services -- 1.1%
- --------------------------------------------------------------------------------
Development Finance Corp. 160,733 $ 783,192
Development finance corporation
responsible for long-term finance.
National Development Bank 78,900 350,727
Development finance corporation
responsible for long-term finance.
Sampath Bank 136,000 175,551
One of the four largest commercial
banks in Sri Lanka.
- --------------------------------------------------------------------------------
$ 1,309,470
- --------------------------------------------------------------------------------
Building Materials -- 0.1%
- --------------------------------------------------------------------------------
Royal Ceramic Lanka Ltd. 344,900 $ 182,799
Manufacturer of heavy duty ceramic
floor tile.
- --------------------------------------------------------------------------------
$ 182,799
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
12
<PAGE>
South Asia Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
Conglomerates -- 3.2%
- --------------------------------------------------------------------------------
<S> <C> <C>
Hayleys Ltd. 216,026 $ 941,813
Diversified group in transportation,
chemicals, agriculture and
electronics.
John Keells Holdings 328,408 1,715,313
John Keells Holdings GDR 135,830 1,256,425
Diversified group in hotels,
office equipment and general
trade.
- --------------------------------------------------------------------------------
$ 3,913,551
- --------------------------------------------------------------------------------
Total Sri Lanka
(identified cost $5,091,199) $ 5,405,873
- --------------------------------------------------------------------------------
Total Common Stocks
(identified cost $101,323,490) $117,940,690
- --------------------------------------------------------------------------------
<CAPTION>
Bonds -- 0.0%
Principal
Amount
(000
omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
Flex Industries, 13.50%, $ 812 $ 22,680
12/31/99/(3)/
Hotel Leela Venture Ltd. NCD,
14.00%, 4/8/03/(3)/ 15 385
- --------------------------------------------------------------------------------
Total Bonds
(identified cost $26,599) $ 23,065
- --------------------------------------------------------------------------------
<CAPTION>
Convertible Bonds -- 0.4%
Principal
Amount
(000
omitted) Value
- --------------------------------------------------------------------------------
Republic of Pakistan, 6.00%, $ 500 $ 482,500
2/26/02
- --------------------------------------------------------------------------------
Total Convertible Bonds
(identified cost $500,000) $ 482,500
- --------------------------------------------------------------------------------
Total Investments -- 96.3%
(identified cost $101,850,089) $118,446,255
- --------------------------------------------------------------------------------
<CAPTION>
Shares Value
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 3.7% $ 4,566,538
- --------------------------------------------------------------------------------
Net Assets -- 100% $123,012,793
- --------------------------------------------------------------------------------
</TABLE>
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
* Non-income producing security.
/(1)/The above securities held by the Portfolio on June 30, 1997 are
unrestricted securities valued at market prices. Because of the length of
the registration process, the Portfolio would temporarily be unable to see
certain of these securities. At June 30, 1997, the aggregate value of these
securities amounted to $62,725,138 representing 50.9% of the Portfolio's
net assets (Note 5).
/(2)/Security valued at fair value using methods determined in good faith by or
at the direction of the Trustees.
/(3)/Security valued at fair value using methods determined in good faith by or
at the direction of the Trustees.
<PAGE>
South Asia Portfolio as of June 30, 1997
PORTFOLIO OF INVESTMENTS (Unaudited) CONT'D
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Top Ten Holdings
Percentage
Industry of Net
Company Sector Assets Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C>
Hindustan Lever Ltd. Household Products 9.2 % $11,272,733
Mahanger Telephone Nigam
Ltd. Telecommunications 5.7 7,068,551
State Bank of India
(Common & GDR) Banks and Money Services 5.7 7,054,126
Hoechst Marion Roussel Ltd. Medical Products 4.7 5,761,174
Hindalco Industries Ltd. GDR Metals - Industrial 4.4 5,390,875
Infosys Technologies Ltd. Computer Software 4.4 5,356,592
Thermax Ltd. Conglomerates 4.0 4,860,894
Videsh Sanchar Nigam Ltd. Telephone Utilities 3.6 4,377,542
Hindustan Petroleum Corp. Oil and Gas - Exploration
and Production 3.4 4,127,849
Bajaj Auto Ltd. Auto and Parts 2.4 2,891,631
</TABLE>
<TABLE>
<CAPTION>
Top Ten Industry Sectors
Percentage
of Net
Industry Sector Assets Value
- --------------------------------------------------------------------------------------
<S> <C> <C>
Conglomerates 12.4 % $15,266,108
Household Products 11.0 13,477,444
Auto and Parts 10.5 12,894,994
Banks and Money Services 9.9 12,154,764
Medical Products 9.2 11,257,970
Telecommunications 5.8 7,080,735
Metals - Industrial 5.1 6,321,844
Telephone Utilities 5.1 6,321,667
Computer Software 4.4 5,356,592
Oil and Gas - Exploration and Production 3.4 4,127,849
</TABLE>
See notes to financial statements
14
<PAGE>
South Asia Portfolio as of June 30, 1997
FINANCIAL STATEMENTS (Unaudited)
Statement of Assets and Liabilities
<TABLE>
<CAPTION>
As of June 30, 1997
(Expressed in United States Dollars)
Assets
- ---------------------------------------------------------------------------
<S> <C>
Investments, at value (Note 1A)
(identified cost, $101,850,089) $118,446,255
Cash 4,057,505
Foreign currency, at value
(identified cost, $3,363,257) 3,362,890
Receivable for investments sold 1,715,362
Dividends and interest receivable 313,345
Miscellaneous receivable 5,837
Tax reclaim receivable 2,593
Deferred organization expenses (Note 1C) 31,621
- ---------------------------------------------------------------------------
Total assets $127,935,408
- ---------------------------------------------------------------------------
Liabilities
- ---------------------------------------------------------------------------
Payable for investments purchased $ 4,751,346
Payable to affiliate for Trustees' fees (Note 2) 1,841
Accrued expenses and other liabilities 169,428
- ---------------------------------------------------------------------------
Total liabilities $ 4,922,615
- ---------------------------------------------------------------------------
Net Assets applicable to investors' interest
in Portfolio $123,012,793
- ---------------------------------------------------------------------------
Sources of Net Assets
- ---------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $106,417,694
Net unrealized appreciation of investments (computed
on the basis of identified cost) 16,595,099
- ---------------------------------------------------------------------------
Total $123,012,793
- ---------------------------------------------------------------------------
<CAPTION>
Statement of Operations
For the Six Months Ended
June 30, 1997
(Expressed in United States Dollars)
Investment Income
- ---------------------------------------------------------------------------
Dividends (net of foreign taxes, $101,168) $ 467,813
Interest income 12,196
- ---------------------------------------------------------------------------
Total income $ 480,009
- ---------------------------------------------------------------------------
Expenses
- ---------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 408,819
Administration fee (Note 2) 136,242
Compensation of Trustees not members of the
Investment Adviser's or Administrator's
organization (Note 2) 5,750
Custodian fee (Note 1G) 253,955
Legal and accounting services 45,928
Amortization of organization expenses (Note 1C) 8,630
Miscellaneous 49,468
- ---------------------------------------------------------------------------
Total expenses $ 908,792
- ---------------------------------------------------------------------------
Deduct --
Reduction of custodian fee (Note 1G) $ 22,006
- ---------------------------------------------------------------------------
Total expense reductions $ 22,006
- ---------------------------------------------------------------------------
Net expenses $ 886,786
- ---------------------------------------------------------------------------
Net investment loss $ (406,777)
- ---------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- ---------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ (5,910,590)
Foreign currency transactions (34,305)
- ---------------------------------------------------------------------------
Net realized loss on investments $ (5,944,895)
- ---------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 30,554,826
Foreign currency 8,654
- ---------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ 30,563,480
- ---------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 24,618,585
- ---------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 24,211,808
- ---------------------------------------------------------------------------
</TABLE>
See notes to financial statements
15
<PAGE>
South Asia Portfolio as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Six Months Ended
Increase (Decrease) June 30, 1997 Year Ended
in Net Assets (Unaudited) December 31, 1996
- --------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment loss $ (406,777) $ (118,410)
Net realized loss on investments (5,944,895) (7,682,907)
Net change in unrealized
appreciation (depreciation) 30,563,480 (345,229)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations $ 24,211,808 $ (8,146,546)
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 27,718,825 $ 130,235,008
Withdrawals (32,841,233) (55,600,406)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital transactions $ (5,122,408) $ 74,634,602
- --------------------------------------------------------------------------------
Net increase in net assets $ 19,089,400 $ 66,488,056
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of period $103,923,393 $ 37,435,337
- --------------------------------------------------------------------------------
At end of period $123,012,793 $ 103,923,393
- --------------------------------------------------------------------------------
</TABLE>
Statement of Cash Flows
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1997
Increase (Decrease) in Cash (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
Cash Flows From (For) Operating Activities --
Purchase of investments $ (17,563,533)
Proceeds from sale of investments 28,449,165
Dividends, interest and tax reclaims received 479,846
Operating expenses paid (787,420)
Foreign currency transactions (1,290,297)
- --------------------------------------------------------------------------------
Net cash from operating activities $ 9,287,761
- --------------------------------------------------------------------------------
Cash Flows From (For) Financing Activities --
Proceeds from capital contributions $ 27,718,825
Payments for capital withdrawals (32,841,233)
Demand notes payable (108,000)
- --------------------------------------------------------------------------------
Net cash used for financing activities $ (5,230,408)
- --------------------------------------------------------------------------------
Net increase in cash $ 4,057,353
- --------------------------------------------------------------------------------
Cash at Beginning of Period $ 152
- --------------------------------------------------------------------------------
Cash at End of Period $ 4,057,505
- --------------------------------------------------------------------------------
Reconciliation of Net Increase in Net Assets From
Operations to Net Cash From
Operating Activities
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 24,211,808
Increase in receivable for investments sold (192,221)
Increase in foreign currency (1,264,646)
Increase in dividends and interest receivable (164)
Decrease in deferred organizational expense 8,630
Increase in payable for investments purchased 3,305,298
Increase in payable to affiliate 659
Increase in accrued expenses and other liabilities 90,079
Net increase in investments (16,871,682)
- --------------------------------------------------------------------------------
Net cash from operating activities $ 9,287,761
- --------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
16
<PAGE>
South Asia Portfolio as of June 30, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data (Expressed in United States Dollars)
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, 1997 ------------------------------------------------------
(Unaudited) 1996 1995 1994 *
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ratios to average daily net assets
- ---------------------------------------------------------------------------------------------------------------------------
Expenses/(1)/ 1.67%+ 1.51% 1.76% 1.16%+
Expenses after custodian fee reduction/(1)/ 1.63%+ 1.28% 1.35% --
Net investment income (loss) (0.75)%+ (0.11)% (0.18)% 0.01%+
Portfolio Turnover 20% 46% 38% 1%
- ---------------------------------------------------------------------------------------------------------------------------
Average commission rate/(2)/ $ 0.0747 $0.0496 $ -- $ --
- ---------------------------------------------------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, May 2, 1994, to December 31,
1994.
/(1)/ The expense ratios for the six month period ended June 30, 1997 and the
years ended December 31, 1996 and 1995 have been adjusted to reflect a
change in reporting requirements. The new reporting guidelines require the
Fund to increase its expense ratio by the effect of any expense offset
arrangements with its service providers. The expense ratios for the period
ended December 31, 1994 have not been adjusted to reflect this change.
/(2)/ Average commission rate paid is computed by dividing the total dollar
amount of commissions paid during the period by the total number of shares
purchased and sold during the period for which commissions were charged.
For fiscal years beginning on or after September 1, 1995, a Fund is
required to disclose its average commission rate per share for security
trades on which commissions were charged.
See notes to financial statements
17
<PAGE>
South Asia Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited)
(Expressed in United States Dollars)
1 Significant Accounting Policies
------------------------------------------------------------------------------
South Asia Portfolio (the "Portfolio") is registered under the Investment
Company Act of 1940 as a diversified, open-end management investment company
which was organized as a trust under the laws of the State of New York on
January 18, 1994. The Declaration of Trust permits the Trustees to issue
interests in the Portfolio. The following is a summary of the significant
accounting policies of the Portfolio. The policies are in conformity with
generally accepted accounting principles.
A Investment Valuations -- Marketable securities, including options, that
are listed on foreign or U.S. securities exchanges or in the NASDAQ National
Market System are valued at closing sale prices or, if there were no sales,
at the mean between the closing bid and asked prices on the exchange where
such securities are principally traded. Futures positions on securities or
currencies are generally valued at closing settlement prices. Unlisted or
listed securities for which closing sale prices are not available are valued
at the mean between the latest bid and asked prices. Short term debt
securities with a remaining maturity of 60 days or less are valued at
amortized cost. Other fixed income and debt securities, including listed
securities and securities for which price quotations are available, will
normally be valued on the basis of valuations furnished by a pricing
service. Investments for which valuations or market quotations are
unavailable are valued at fair value using methods determined in good faith
by or at the direction of the Trustees.
B Federal Taxes -- The Portfolio is treated as a partnership for U.S.
Federal tax purposes. No provision is made by the Portfolio for federal or
state taxes on any taxable income of the Portfolio because each investor in
the Portfolio is individually responsible for the payment of any taxes on
its share of such income. Since some of the Portfolio's investors are
regulated investment companies that invest all or substantially all of their
assets in the Portfolio, the Portfolio normally must satisfy the applicable
source of income and diversification requirements, (under the U.S. Internal
Revenue Code), in order for its investors to satisfy them. The Portfolio
will allocate, at least annually among its investors, each investor's
distributive share of the Portfolio's net investment income, net realized
capital gains, and any other items of income, gain, loss, deduction or
credit.
C Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization, including registration costs, are being
amortized on the straight-line basis over five years.
D Financial Futures Contracts -- Upon the entering of a financial futures
contract, the Portfolio is required to deposit ("initial margin") either
cash or securities in an amount equal to a certain percentage of the
purchase price indicated in the financial futures contract. Subsequent
payments are made or received by the Portfolio ("margin maintenance") each
day, dependent on daily fluctuations in the value of the underlying
security, and are recorded for book purposes as unrealized gains or losses
by the Portfolio. Should interest or currency exchange rates move
unexpectedly, the Portfolio may not achieve the anticipated benefits of the
financial futures contracts and may realize a loss. If the Portfolio enters
into a closing transaction, the Portfolio will realize, for book purposes, a
gain or loss equal to the difference between the value of the financial
futures contract to sell and financial futures contract to buy.
E Foreign Currency Translation -- Investment valuations, other assets, and
liabilities initially expressed in foreign currencies are converted each
business day into U.S. dollars based upon current exchange rates. Purchases
and sales of foreign investment securities and income and expenses are
converted into U.S. dollars based upon currency exchange rates prevailing on
the respective dates of such transactions. Recognized gains or losses on
investment transactions attributable to foreign currency rates are recorded
for financial statement purposes as net realized gains and losses on
investments. That portion of unrealized gains and losses on investments that
result from fluctuations in foreign currency exchange rates are not
separately disclosed.
F Forward Foreign Currency Exchange Contracts -- The Portfolio may enter
into forward foreign currency exchange contracts for the purpose 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.
18
<PAGE>
South Asia Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
(Expressed in United States Dollars)
G Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by credits which are determined based on the average
daily cash balances the Portfolio maintains with IBT. All significant credit
balances used to reduce the Portfolio's custodian fees are reported as a
reduction of expenses in the statement of operations.
H Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenue and expense during the reporting period. Actual results could
differ from those estimates.
I Other -- Investment transactions are accounted for on the date the
securities are purchased or sold. Dividend income is recorded on the
ex-dividend date. However, if the ex-dividend date has passed, certain
dividends from foreign securities are recorded as the Portfolio is informed
of the ex-dividend date. Interest income is recorded on the accrual basis.
J Interim Financial Information -- The interim financial statements relating
to June 30, 1997 and the six month period then ended have not been audited
by independent certified public accountants, but in the opinion of the
Fund's management reflect all adjustments, consisting only of normal
recurring adjustments, necessary for the fair presentation of the financial
statements.
2 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
The investment adviser fee is earned by Lloyd George Investment Management
(Bermuda) Limited (the Adviser) as compensation for management and
investment advisory services rendered to the Portfolio. Under the advisory
agreement, the Adviser receives a monthly fee of 0.0625% (0.75% annually) of
the average daily net assets of the Portfolio up to $500,000,000, and at
reduced rates as daily net assets exceed that level. For the six months
ended June 30, 1997, the annualized adviser fee was 0.75% of average net
assets and amounted to $408,819. In addition, an administration fee is
earned by Eaton Vance Management (EVM) for managing and administering the
business affairs of the Portfolio. Under the administration agreement, EVM
earns a monthly fee in the amount of 1/48th of 1% (equal to 0.25% annually)
of the average daily net assets of the Portfolio up to $500,000,000, and at
reduced rates as daily net assets exceed that level. For the six months June
30, 1997, the administration fee was 0.25% (annualized) of average net
assets and amounted to $136,242. Except as to Trustees of the Portfolio who
are not members of the Adviser or EVM's organization, officers and Trustees
receive remuneration for their services to the Portfolio out of such
investment adviser and administrative fees. Certain of the officers and
Trustees of the Portfolio are officers or trustees of the above
organizations.
3 Investment Transactions
------------------------------------------------------------------------------
For the six months ended June 30, 1997, purchases and sales of investments,
other than short-term obligations, aggregated $20,868,831 and $28,641,386
respectively.
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation (depreciation) in value of the
investments owned at June 30, 1997, as computed on a federal income tax
basis, are as follows:
<TABLE>
<S> <C>
Aggregate cost $ 101,850,089
-----------------------------------------------------------------------
Gross unrealized appreciation $ 25,886,136
Gross unrealized depreciation (9,289,971)
-----------------------------------------------------------------------
Net unrealized depreciation $(16,596,165)
-----------------------------------------------------------------------
</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.
19
<PAGE>
South Asia Portfolio as of June 30, 1997
NOTES TO FINANCIAL STATEMENTS (Unaudited) CONT'D
(Expressed in United States Dollars)
Foreign stock markets, while growing in volume and sophistication, are
generally not as developed as those in the United States, and securities of
some foreign issuers (particularly those located in developing countries)
may be less liquid and more volatile than securities of comparable U.S.
companies. In general, there is less overall governmental supervision and
regulation of foreign securities markets, broker-dealers, and issuers than
in the United States.
Settlement of securities transactions in the Indian subcontinent may be
delayed and is generally less frequent than in the United States, which
could affect the liquidity of the Portfolio's assets. The Portfolio may be
unable to sell securities where the registration process is incomplete and
may experience delays in receipt of dividends.
6 Line of Credit
------------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by EVM
and its affiliates in a committed $120 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 banks' adjusted certificate of deposit
rate, eurodollar rate or federal funds rate. In addition, a fee computed at
an annual rate of 0.15% 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 Portfolio did not have any significant borrowings or allocated
fees during the six months ended June 30, 1997.
20
<PAGE>
Greater India Portfolio as of June 30, 1997
INVESTMENT MANAGEMENT
South Asia Portfolio
Officers Trustees
Hon. Robert Lloyd George Hon. Edward K.Y. Chen
President and Trustee Professor and Director, Center for Asian
Studies, University of Hong Kong
James B. Hawkes
Vice President and Donald R. Dwight
Trustee President, Dwight Partners, Inc.
Chairman, Newspapers of New England, Inc.
Scobie Dickinson Ward
Vice President, Assistant Samuel L. Hayes, III
Secretary and Jacob H. Schiff Professor of Investment
Assistant Treasurer Banking, Harvard University Graduate
School of Business Administration
William Walter Raleigh Kerr
Vice President and Norton H. Reamer
Assistant Treasurer President and Director, United Asset
James L. O'Connor
Vice President and
Treasurer
Alan R. Dynner
Vice President and Secretary
21
