<PAGE>
Emerging Asian Markets Equity Portfolio
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS June 30, 1996 (unaudited)
ISSUER/INDUSTRY SHARES VALUE
- --------------------------------------------------------------------------
COMMON STOCKS -- 98.7%
INDONESIA - 14.3%
Barito Pacific Timber
Forest Products........................... 133,000 $ 87,143
Kalbe Farma
Pharmaceuticals........................... 49,500 110,591
PT Bank Bali
Banking................................... 41,000 88,077
PT Gudang Garam
Tobacco................................... 54,000 231,429
PT Hanjaya Mandala Sampoerna
Consumer.................................. 24,000 273,255
PT Hero Mini Supermarket
Consumer.................................. 240,000 237,164
PT Indocement Tunggal Praka
Building Materials........................ 15,000 51,557
PT Indoffod Sukses Makmur-F
Food Processing........................... 22,500 101,504
PT Indostat
Telecommunications........................ 43,500 146,246
PT Jaya Real Property
Real Estate............................... 16,000 51,557
PT Semen Gresik
Building Materials........................ 16,000 46,574
PT Telecommunikasion
Telecommunications........................ 220,000 333,190
-----------
1,758,287
-----------
MALAYSIA - 48.7%
Arab-Malaysian Merchant Bank
Finance................................... 22,000 308,679
Box Pak Berhad
Manufacturing............................. 5,000 3,107
Commerce Asset Held Berhad
Banking................................... 18,000 109,681
Country Heights Holdings BH
Real Estate............................... 34,000 108,358
DCB Holdings Berhad
Banking................................... 29,000 99,399
Edaran Otomobile Nasional BH
Motor Vehicles & Equipment................ 9,000 86,230
Genting Berhad
Amusement & Recreation.................... 46,000 359,591
Hong Leong Bank
Banking................................... 30,000 84,185
Hong Leong Bank-Warrants
Banking................................... 5,700 6,124
IOI Properties Berhad
Real Estate............................... 88,000 276,929
Kedah Cement Berhad
Building Materials........................ 57,000 105,568
KFC Holdings Berhad
Restaurant................................ 96,000 519,543
Kian Joo Can Factory
Packaging & Container..................... 5,000 27,460
Kuala Lumpar Kepong Berhad
Plantation................................ 6,000 15,153
Larut Consolidated
Real Estate............................... 305,000 440,168
Leader Universal Holdings
Electrical Equipment...................... 60,000 169,573
Malayan Banking Berhad
Banking................................... 60,600 583,043
Malaysian Airline System BH
Air Transportation........................ 10,000 31,870
Malaysian Intern Shipping
Water Transport of Freight................ 40,000 124,273
MBF Capital Berhad
Finance................................... 150,000 206,855
Multi-Purpose Holdings
Miscellaneous............................. 133,000 214,336
Public Bank-BHD
Banking................................... 42,000 116,176
Public Finance Berhad
Finance................................... 45,000 81,179
Public Finance Berhad-Rights
Finance................................... 14,400 17,870
Resorts World Berhad
Finance................................... 31,000 177,711
Selangor Properties Berhad
Real Estate............................... 71,000 86,526
Sime Darby Berhad
Miscellaneous............................. 17,000 47,023
Star Publications Malaysia
Publishing................................ 35,000 109,441
Systems Telekom Malaysia
Telecommunications........................ 36,000 320,385
TA Enterprise Berhad-Warrants
Financial Securities...................... 353,000 295,759
Technology Resources*
Telecommunications........................ 28,000 97,655
Tenaga Nasional Berhad
Public Utilities.......................... 137,000 576,669
UMW Holdings Berhad
Motor Vehicles & Equipment................ 15,000 53,518
United Engineers
Infrastructure............................ 21,040 145,918
-----------
6,005,955
-----------
PHILIPPINES - 12.9%
C&P Homes
Real Estate............................... 170,000 147,615
Metro Pacific Corp.
Holdings Cos.-Diversified................. 400,000 119,084
Metro Bank & Trust
Banking................................... 7,100 200,663
Petron Corp.
Utilities................................. 112,500 51,527
Philippine Long Distance TE
Telecommunications........................ 5,600 333,435
Philippine National Bank
Banking................................... 30,200 504,294
San Miguel Corp. Class B
Miscellaneous............................. 8,800 30,397
SM Prime Holdings
Real Estate............................... 768,000 199,328
-----------
1,586,343
-----------
THAILAND - 22.8%
Advanced Info Services
Telecommunications........................ 15,700 246,153
Bangkok Bank Co. Ltd.
Banking................................... 28,900 391,633
Banpu Public Co. Ltd.
Mining.................................... 4,000 115,344
Dhana Siam Finance
Finance................................... 68,100 378,259
Electricity Gener.
Utilities ................................ 25,000 87,158
Finance One Co. LTD
Finance................................... 28,300 182,832
Krung Thai Bank LTD
Banking................................... 60,500 283,612
Land & House PLC
Real Estate............................... 6,500 81,938
Phatral Thanakit Co.
Finance................................... 50,000 348,632
PTT Expl. & Production Public
Natural Gas............................... 5,400 79,133
Siam Cement Co.
Building Materials ....................... 2,000 98,168
Siam City Cement
Building Materials ....................... 3,000 34,745
Siam Commercial Bank
Banking................................... 15,000 218,901
Thai Telephone & Telecomm
Telecommunications........................ 6,800 14,599
Thai Telephone & Telecomm -Rights
Telecommunications ....................... 3,400 5,783
Thai Farmers Bank
Banking................................... 22,700 248,596
-----------
2,815,486
-----------
TOTAL COMMON STOCKS
(Identified Cost $11,441,298).............. 12,166,071
-----------
SHORT-TERM OBLIGATIONS -- 3.0%
Salomon Repurchase Agreement
4.98% due 7/01/96
proceeds at maturity $379,957
(collateralized by $57,116 U.S. Treasury Note
6.375% due 6/30/97, $31,833 U.S. Treasury Note
7.50% due 10/31/99, $115,738 U.S. Treasury Note
7.25% due 8/15/22, $50,691 U.S. Treasury Note
7.50% due 1/31/97 and $134,289 U.S. Treasury Note
11.25% due 2/15/15)........................ $ 379,799
-----------
TOTAL INVESTMENTS
(Identified Cost $11,821,097)............. 101.7% 12,545,870
OTHER LIABILITIES
IN EXCESS OF OTHER ASSETS................. (1.7) (218,067)
----- -----------
PORTFOLIO NET ASSETS........................ 100.0% $12,327,803
===== ===========
* Non-income producing
See notes to financial statements
<PAGE>
Emerging Asian Markets Equity Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES June 30, 1996 (unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments at value (Note 1A) (Identified Cost, $11,821,097)................... $12,545,870
Foreign currency, at value (Cost, $205,397)..................................... 205,323
Receivable for securities sold.................................................. 70,679
Dividends and interest receivable............................................... 13,951
-----------
Total assets................................................................ 12,835,823
-----------
LIABILITIES:
Payable for investments purchased............................................... 508,020
-----------
NET ASSETS ..................................................................... $12,327,803
===========
REPRESENTED BY:
Paid-in capital for beneficial interests........................................ $12,327,803
===========
</TABLE>
See notes to financial statements
Emerging Asian Markets Equity Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $11,929).............................. $ 52,956
Interest........................................................................... 14,010
--------
Total investment income.......................................................... $ 66,966
EXPENSES:
Investment advisory fees (Note 2).................................................. 49,393
Administrative fees (Note 3)....................................................... 2,470
--------
Total expenses................................................................... 51,863
Less aggregate amount waived by Investment Adviser and Administrator (Notes 2 and 3) (51,863)
--------
Net Expenses........................................................................ --
--------
Net investment income............................................................ 66,966
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain (loss) from investment transactions.............................. 63,563
Net realized gain (loss) on foreign exchange transactions.......................... (6,761)
--------
Net realized gain (loss)......................................................... 56,802
--------
Unrealized appreciation (depreciation) of investments--
Beginning of period............................................................. 286,145
End of period................................................................... 724,773 438,628
--------
Translation of other assets and liabilities denominated
in foreign currencies--net...................................................... 21
--------
Net change in unrealized appreciation (depreciation)............................ 438,649
--------
Net realized and unrealized gain on investments................................. 495,451
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................... $562,417
========
</TABLE>
See notes to financial statements
<PAGE>
Emerging Asian Markets Equity Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS AUGUST 23, 1995
ENDED (COMMENCEMENT OF
JUNE 30, 1996 OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995
------------- -----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income.................................................... $ 66,966 $ 18,984
Net realized gain (loss) on investments and foreign exchange transactions 56,802 (6,799)
Net change in unrealized appreciation (depreciation) of investments...... 438,649 286,140
----------- ----------
Net increase in net assets resulting from operations................. 562,417 298,325
----------- ----------
CAPITAL TRANSACTIONS:
Proceeds from contributions.............................................. 6,813,386 5,779,224
Value of withdrawals..................................................... (1,011,473) (114,076)
----------- ----------
Net increase (decrease) in net assets from capital transactions...... 5,801,913 5,665,148
----------- ----------
Net Increase in Net Assets: ............................................. 6,364,330 5,963,473
Net Assets:
Beginning of period...................................................... 5,963,473 --
----------- ----------
End of period............................................................ $12,327,803 $5,963,473
=========== ==========
</TABLE>
See notes to financial statements
Emerging Asian Markets Equity Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS AUGUST 23, 1995
ENDED (COMMENCEMENT OF
JUNE 30, 1996 OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1995
------------- -----------------
<S> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000's omitted).......................... $12,328 $5,963
Ratio of expenses to average net assets............................ 0% 0%
Ratio of net investment income to average net assets............... 1.36% 1.53%*
Portfolio turnover................................................. 2% 0%
Average commission rate per share (A).............................. $0.019 N/A
Note: If Agents of the Portfolio had not voluntarily waived all of their fees for the periods indicated, the
ratio would have been as follows:
Ratios:
Expenses to average net assets................................ 1.00%* 1.05%*
Net investment income to average net assets................... 0.36% 0.48%
<FN>
* Annualized
(A) The average commission rate paid is applicable for Funds that invest greater than 10% of average net assets in
equity transactions on which commissions are charged. This disclosure is required for fiscal periods beginning
on or after September 1, 1995.
</TABLE>
See notes to financial statements
<PAGE>
Emerging Asian Markets Equity Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES
Emerging Asian Equity Portfolio (the "Portfolio"), a separate series of The
Premium Portfolios (the "Portfolio Trust"), is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company which was organized as a trust under the laws
of the State of New York. The Declaration of Trust permits the Trustees to
issue beneficial interests in the Portfolio. The Investment Adviser of the
Portfolio is Citibank N.A. ("Citibank"). Signature Financial Group (Grand
Cayman), Ltd. ("SFG") acts as the Fund's Administrator.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements.
Actual results could differ from those estimates.
The following significant accounting policies consistently followed by the
Portfolio are in conformity with generally accepted accounting principles and
are as follows:
A. INVESTMENT SECURITY VALUATIONS -- Equity securities in the portfolio are
valued at the last sale price on the exchange on which they are primarily
traded, or at the quoted bid price for securities in which there were no sales
during the day, or for unlisted securities not reported on the NASDAQ system.
Securities listed on a foreign exchange are valued at the last quoted sale price
available. Bonds and other fixed income securities (other than short-term
obligations maturing in sixty days or less) in the portfolio are valued on the
basis of valuations furnished by a pricing service, the use of which has been
approved by the Trustees. In making such valuations, the pricing service
utilizes both dealer-supplied valuations and electronic data processing
techniques which take into account appropriate factors such as
institutional-size trading in similar groups of securities, yield, quality,
coupon rate, maturity, type of issue, trading characteristics and other market
data, without exclusive reliance upon quoted prices or exchanges or
over-the-counter prices, since such valuations and techniques are believed to
reflect more accurately the fair value of such securities. Short-term
obligations maturing in sixty days or less, are valued at amortized cost, which
constitutes fair value as determined by the Trustees. Portfolio securities for
which there are no such quotations or valuations are valued at fair value as
determined in good faith by or at the direction of the Trustees. Trading in
securities on most foreign exchanges and over-the-counter markets is normally
completed before the close of the New York Stock Exchange and may also take
place on days which the New York Stock Exchange is closed. If events materially
affecting the value of foreign securities occur between the time when the
exchange on which they are traded closes, such securities will be valued at fair
value in accordance with procedures established by and under the general
supervision of the Trustees.
B. FOREIGN CURRENCY TRANSLATION -- The accounting records of the Portfolio are
maintained in U.S. dollars. Foreign currency amounts are translated into U.S.
dollars at the current rate of exchange to determine the value of investments,
assets and liabilities. Purchases and sales of securities, and income and
expenses are translated at the prevailing rate of exchange on the respective
dates of such transactions. The Fund does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments. Translation of foreign currency
includes net exchange gains and losses, disposition of foreign currency and the
difference between the amount of investment income and foreign taxes withheld
recorded and the actual amount received or paid.
C. FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS -- The Portfolio may enter into
forward foreign currency exchange contracts ("contracts") in connection with
planned purchases or sales of securities to hedge the U.S. dollar value of
portfolio securities denominated in a particular currency. The Portfolio could
be exposed to risks if the counter-parties to the contracts are unable to meet
the terms of their contracts and from unanticipated movements in the value of a
foreign currency relative to the U.S. Dollar. 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
gains or losses until the contract settlement date.
D. ACCOUNTING FOR INVESTMENTS -- Securities transactions are accounted for on
the trade date. Realized gains and losses on security transactions are
determined on the identified cost method. Dividend income and other
distributions from portfolio securities are recorded on the ex-dividend date,
except, if the ex-dividend date has passed, certain dividends from foreign
securities are recorded as soon as the Portfolio is informed of the ex-dividend
date. Dividend income is recorded net of foreign taxes withheld where recovery
of such taxes is not assured. Interest income is accrued daily.
E. U.S. FEDERAL INCOME AND OTHER TAXES -- The Portfolio is considered a
partnership under the U.S. Internal Revenue Code. Accordingly, no provision
for federal income taxes is necessary. The Portfolio may be subject to taxes
imposed by countries in which it invests. Such taxes are generally based on
income and/or capital gains earned or repatriated. Taxes are accrued and
applied to net investment income and net realized gains as such income and/or
gains are earned.
F. EXPENSES -- The Portfolio bears all costs of its operations other than
expenses specifically assumed by Citibank and SFG. Expenses incurred by the
Portfolio Trust with respect to any two or more portfolios or series are
allocated in proportion to the average net assets of each portfolio, except when
allocations of direct expenses to each portfolio can otherwise be made fairly.
Expenses directly attributable to a portfolio are charged to that portfolio.
G. REPURCHASE AGREEMENTS -- It is the policy of the Portfolio to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System or to have segregated within the custodian bank's
vault, all securities held as collateral in support of repurchase agreements.
Additionally, procedures have been established by the Portfolio to monitor, on a
daily basis, the market value of the repurchase agreement's underlying
investments to ensure the existence of a proper level of collateral.
(2) INVESTMENT ADVISORY FEES
The investment advisory fees paid to Citibank, as compensation for overall
investment management services, amounted to $49,393, all of which was
voluntarily waived, for the six months ended June 30, 1996. The investment
advisory fees are computed at the annual rate of 1.00% of the Portfolio's
average daily net assets.
(3) ADMINISTRATIVE FEES
Under the terms of an Administrative Services Agreement, the administrative
services fees paid to the Administrator, as compensation for overall
administrative services including general office facilities, is computed at an
annual rate of 0.05% of the Portfolio's average daily net assets. The Portfolio
accrued fees aggregating $2,470 for these services for the six months ended June
30, 1996, all of which was voluntarily waived. The Portfolio pays no
compensation directly to any Trustee or any officer who is affiliated with the
Administrator, all of whom receive remuneration for their services to the
Portfolio from the Administrator or its affiliates. Certain officers and a
Trustee of the Portfolio are officers and directors of the Administrator or its
affiliates.
(4) PURCHASES AND SALES OF INVESTMENTS
For the six month ended June 30, 1996, purchases and sales of investment
securities, other than short-term investments, aggregated $6,010,821 and
$227,205, respectively.
(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/(depreciation) in value of the investment
securities owned at June 30, 1996, as computed on a federal income tax basis,
are as follows:
Aggregate cost..................... $11,821,097
===========
Gross unrealized appreciation...... $ 1,189,318
Gross unrealized depreciation...... (464,545)
-----------
Net unrealized appreciation........ $ 724,773
===========
(6) EXPENSE FEES
SFG has entered into an expense agreement with the Portfolio. SFG has agreed to
pay all of the ordinary operating expenses (excluding interest, taxes, brokerage
commissions, litigation costs or other extraordinary costs or expenses) of the
Portfolio, other than fees paid under the Advisory Agreement, and Administrative
Services Agreement. The Agreement may be terminated by either party upon not
less than 30 days nor more than 60 days written notice.
The Portfolio has agreed to pay SFG an expense fee, on an annual basis, accrued
daily and paid monthly; provided, however, that such fee shall not exceed the
amount such that immediately after any such payment the aggregate expenses of
the Portfolio and expenses waived by the Administrator would on an annual basis
exceed an agreed upon rate, currently 1.00% of average daily net assets.
(7) FINANCIAL INSTRUMENTS
The Portfolio may trade financial instruments with off-balance sheet risk in the
normal course of its investing activities and to assist in managing exposure to
market risks such as interest rates and foreign currency exchange rates. These
financial instruments include forward foreign currency exchange contracts.
The notional or contractual amounts of these instruments represent the
investment the Portfolio has in particular classes of financial instruments and
does not necessarily represent the amounts potentially subject to risk. The
measurement of the risks associated with these instruments is meaningful only
when related and offsetting transactions are considered. No such instruments
were held at June 30, 1996.
(8) LINE OF CREDIT
The Portfolio, along with the other Landmark Funds, entered into an ongoing
agreement with a bank which allows the Landmark Funds collectively to borrow up
to $40 million for temporary or emergency purposes. Interest on the borrowings,
if any, is charged to the specific fund executing the borrowing at the base rate
of the bank. In addition, the $15 million committed portion of the line of
credit requires a quarterly payment of a commitment fee based on the average
daily unused portion of the line of credit for the six months ended June 30,
1996 the commitment fee allocated to the Portfolio was $23. Since the line of
credit was established, there have been no borrowings.
