<PAGE>
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Emerging Asian Markets Equity Portfolio
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PORTFOLIO OF INVESTMENTS JUNE 30, 1997 (unaudited)
ISSUER/INDUSTRY SHARES VALUE
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COMMON STOCKS -- 74.0%
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INDONESIA - 19.1%
Bank International Indonesia
Banking .............................. 153,000 $ 132,140
Bank International Indonesia-Warrants*
Banking .............................. 11,112 4,342
PT Astra International
Automobile ........................... 85,000 349,578
PT Bank Dagang Nasional Ind
Banking .............................. 252,000 178,779
PT Bank Dagang Nasional Ind-Warrants*
Banking .............................. 36,000 14,806
PT Bank Negara Indonesia
Banking .............................. 198,500 126,537
PT Darya Varia Laboratoria
Consumer ............................. 25,500 30,676
PT Daya Guna Samudera
Others ............................... 95,000 170,934
PT Gudang Garam
Consumer ............................. 76,000 318,816
PT HM Sampoerna
Consumer ............................. 13,000 49,589
PT Ramayana Lestari Santosa
Consumer ............................. 25,500 73,411
PT Semen Gresik
Building Materials ................... 36,500 81,812
PT Telecomunikasion
Telecommunications ................... 360,000 588,526
----------
2,119,946
----------
MALAYSIA - 40.0%
ACP Industries Berhad
Building Materials ................... 56,000 221,870
ACP Industries Berhad-Warrants*
Building Materials ................... 21,000 20,800
Arab-Malaysian Merchant Bank-Warrants*
Banking .............................. 3,000 4,041
Arab-Malaysian Merchant Bank*
Banking .............................. 30,000 10,757
Berjaya Group Berhad
Multi-Industry ....................... 60,000 73,693
Bright Packaging Industries Berhad
Miscellaneous ........................ 5,000 27,734
Commerce Asset Holdings Berhad
Banking .............................. 36,000 94,849
Commerce Asset Holdings Berhad-Rights*
Banking .............................. 11,700 952
DCB Holdings Berhad
Banking .............................. 21,000 63,391
DNP Holdings Berhad
Banking .............................. 30,000 21,141
Edaran Otomobil Nasional Berhad
Automobile ........................... 6,000 51,109
Gamuda Berhad
Construction/Engineering ............. 26,499 92,914
Gamuda Berhad-Warrants*
Construction/Engineering ............. 1,667 1,882
Hong Leong Bank-Warrants*
Property/Hotel ....................... 78,578 88,727
Jaya Tiasa
Timber ............................... 14,000 70,444
KFC Holdings Berhad
Consumer ............................. 35,360 133,090
KFC Holdings Berhad-Warrants*
Consumer ............................. 32,000 37,781
Konsortium Perkapalan Berhad
Transport ............................ 27,000 159,390
Kuala Lumpur Kepong Berhad
Plantations .......................... 4,000 9,905
Lingkaran Trans Kota Holdings*
Banking .............................. 8,000 16,640
Magnum Corp. Berhad
Leisure & Tourism .................... 32,000 48,177
Malayan Banking Berhad
Banking .............................. 47,000 495,563
Malaysia Mining Corp.
Construction/Engineering ............. 80,000 87,480
Malaysian International Shipping
Transport ............................ 13,000 33,736
Malaysian Resources Corp.
Property/Hotel ....................... 56,000 154,200
Multi-Purpose Holdings
Others ............................... 133,000 186,537
Oriental Holdings Berhad
Automobile ........................... 14,000 105,388
Perusahaan Otomobil Nasional
Automobile ........................... 24,000 112,203
Public Bank Berhad
Banking .............................. 18,000 28,098
Rashid Hussein Berhad
Finance/Securities ................... 13,000 82,409
Renong Berhad
Others ............................... 104,000 135,975
Renong Berhad-Warrants*
Others ............................... 2,000 1,054
Road Builder
Construction/Engineering ............. 20,000 94,295
Sime Darby Berhad
Property/Hotel ....................... 64,000 212,995
S P Setia Berhad
Property/Hotel ....................... 22,000 72,781
Star Publications Malaysia
Media ................................ 79,000 338,035
Systems Telekom Malaysia
Media ................................ 54,000 252,456
Tan Chang Motor Holdings Berhad
Automobile ........................... 81,000 152,758
Tenaga Nasional Berhad
Utilities ............................ 86,000 419,097
UMW Holdings Berhad
Automobile ........................... 9,000 42,433
UMW Holdings Berhad-Warrants*
Automobile ........................... 3,000 7,369
United Engineers Malaysia
Construction/Engineering ............. 26,040 187,769
----------
4,451,918
----------
PHILIPPINES - 11.1%
Ayala Land Inc. B
Property ............................. 189,375 174,111
CN Solid Group Inc.
Consumer ............................. 356,000 58,038
DMCI Holdings, Inc.*
Construction ......................... 263,000 86,749
Manila Electric
Utility .............................. 26,650 131,350
Metro Bank & Trust
Banking .............................. 8,357 177,431
Metro Pacific Corp.
Miscellaneous ........................ 400,000 86,442
Philippine Long Distance Telephone
Telecommunications ................... 7,700 249,602
Philippine National Bank
Banking .............................. 9,594 65,108
San Miquel Corp. B
Multi-Industry ....................... 31,900 84,056
SM Prime Holdings
Property ............................. 397,000 117,402
----------
1,230,289
----------
THAILAND - 3.8%
Advanced Infomation Services
Telecommunications ................... 8,500 77,148
Bangkok Bank Co. Ltd.
Banking .............................. 10,200 72,916
Co-Generation Public Co.*
Utilities ............................ 25,200 70,337
Electricity General
Utilities .......... ................. 30,000 76,506
Ptt Exploration & Products
Energy ............................... 7,800 117,783
Siam Commercial Bank
Banking .............................. 700 2,980
Telecom Asia Local*
Telecommunications ................... 1,200 1,506
Thai Farmers Bank-Warrants*
Banking .............................. 2,837 889
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420,065
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TOTAL COMMON STOCK
(Identified Cost $7,799,624) ........... $ 8,222,218
-----------
PRINCIPAL
ISSUER/INDUSTRY AMOUNT VALUE
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FIXED INCOME - 0.5%
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AMMB
5.00% due 1/13/02 ...................... 30,000 10,162
Multi-Purpose Holdings
3.00% due 1/13/02 ...................... 133,000 44,790
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TOTAL FIXED INCOME
(Identified Cost $65,612) .............. 54,952
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SHORT-TERM OBLIGATIONS - 21.7%
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IBT Cash Sweep
4.95% due 7/01/97 ...................... 1,205,015
Salomon Brothers Repurchase Agreement
5.50% due 7/01/97, proceeds at
maturity $1,205,199 (collateralized
by $340,173 U.S. Treasury Note
8.75% due 8/15/20
$609,254 U.S. Treasury Note
9.125% due 5/15/18
$201,155 U.S. Treasury Note
9.00% due 11/15/18 and
$77,091 U.S. Treasury Bond
7.50%, due 11/15/16) ......... 1,205,015
-----------
2,410,030
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TOTAL INVESTMENTS
(Identified Cost $10,275,266) 96.2% 10,687,200
OTHER ASSETS
LESS LIABILITIES ......... 3.8 420,378
----- -----------
NET ASSETS ................ 100.0% $11,107,578
===== ===========
* Non-income producing
See notes to financial statements
<PAGE>
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Emerging Asian Markets Equity Portfolio
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STATEMENT OF ASSETS AND LIABILITIES June 30, 1997 (unaudited)
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<TABLE>
<CAPTION>
ASSETS:
<S> <C>
Investments at value (Note 1A) (Identified Cost, $10,275,266) ...................... $10,687,200
Foreign currency, at value (Cost, $190,717) ........................................ 190,318
Receivable for securities sold ..................................................... 271,629
Dividends and interest receivable .................................................. 28,979
-----------
Total assets ...................................................................... 11,178,126
-----------
LIABILITIES:
Payable for securities purchased ................................................... 61,696
Payable to affiliates--Investment advisory fees (Note 2) ............................ 6,352
Accrued expenses and other liabilities ............................................. 2,500
-----------
Total liabilities ................................................................. 70,548
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NET ASSETS ......................................................................... $11,107,578
===========
REPRESENTED BY:
Paid-in capital for beneficial interests ........................................... $11,107,578
===========
</TABLE>
See notes to financial statements
<PAGE>
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Emerging Asian Markets Equity Portfolio
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STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1997 (unaudited)
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<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Dividends (net of foreign withholding tax of $13,853) ................. $ 40,900
Interest .............................................................. 23,609
--------
Total investment income .............................................. $ 64,509
EXPENSES:
Investment advisory fees (Note 2) ..................................... 54,760
Administrative fees (Note 3) .......................................... 2,738
Expense fees (Note 6) ................................................. 2,500
--------
Total expenses ....................................................... 59,998
Less aggregate amount waived by Investment Adviser
and Administrator (Notes 2 and 3) .................................... (5,238)
--------
Net expenses .......................................................... 54,760
----------
Net investment income ................................................ 9,749
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss from investment transactions ........................ (317,660)
Net realized loss on foreign currency exchange transactions ........... (14,287)
--------
Net realized loss .................................................... (331,947)
----------
Unrealized appreciation (depreciation) of investments--
Beginning of period .................................................. 849,761
End of period ........................................................ 411,934 (437,827)
--------
Translation of other assets and liabilities denominated
in foreign currencies--net ............................................ 296
----------
Net change in unrealized appreciation (depreciation) ................. (437,531)
----------
Net realized and unrealized loss on investments ...................... (769,478)
----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS .................. $ (759,729)
==========
</TABLE>
See notes to financial statements
<PAGE>
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Emerging Asian Markets Equity Portfolio
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STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DECEMBER 31, 1996
-------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
<S> <C> <C>
Net investment income ........................................... $ 9,749 $ 65,403
Net realized loss on investments and foreign exchange transactions (331,947) (1,026,487)
Net change in unrealized appreciation (depreciation)
of investments and foreign currency exchange ................... (437,531) 562,925
----------- -----------
Net Decrease in net assets resulting from operations ........... (759,729) (398,159)
----------- -----------
CAPITAL TRANSACTIONS:
Proceeds from contributions ..................................... 1,524,325 8,854,217
Value of withdrawals ............................................ (1,049,778) (3,026,771)
----------- -----------
Net increase in net assets from capital transactions ........... 474,547 5,827,446
----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS: .......................... (285,182) 5,429,287
NET ASSETS:
Beginning of period ............................................. 11,392,760 5,963,473
----------- -----------
End of period ................................................... $11,107,578 $11,392,760
=========== ===========
</TABLE>
See notes to financial statements
<PAGE>
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Emerging Asian Markets Equity Portfolio
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FINANCIAL HIGHLIGHTS
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<TABLE>
<CAPTION>
SIX MONTHS AUGUST 23, 1995
ENDED (COMMENCEMENT OF
JUNE 30, 1997 YEAR ENDED OPERATIONS) TO
(UNAUDITED) DECEMBER 31, 1996 DECEMBER 31, 1995
--------------- --------------- -----------------
RATIOS / SUPPLEMENTAL DATA:
<S> <C> <C> <C>
Net Assets, end of period (000's omitted) $11,108 $11,393 $5,963
Ratio of expenses to average net assets .. 1.00%* 0.56% 0%
Ratio of net investment income to
average net assets ...................... 0.18%* 0.60% 1.53%*
Portfolio turnover ....................... 26% 73% 0%
Average commission rate per share (A) .... $0.014 $0.019 N/A
Note: If Agents of the Portfolio had not voluntarily waived a portion of their fees for the periods indicated,
the ratios would have been as follows:
Ratios:
Expenses to average net assets ........... 1.10%* 1.06% 1.05%*
Net investment income to average net assets 0.08%* 0.10% 0.48%*
* 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>
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Emerging Asian Markets Equity Portfolio
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NOTES TO FINANCIAL STATEMENTS (unaudited)
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(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 U.S. 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 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 and the time of fund valuation, 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 or 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.
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 $54,760, of which $2,500 was
voluntarily waived, for the six months ended June 30, 1997. 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
administrative fees amounted to $2,738, all of which was voluntarily waived, for
the six months ended June 30, 1997. 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 months ended June 30, 1997, purchases and sales of investment
securities, other than short-term investments, aggre-gated $2,549,682 and
$5,263,624, respectively.
(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation/(depreciation) in value of the investment
securities owned at June 30, 1997, as computed on a federal income tax basis,
are as follows:
Aggregate cost ..................... $10,275,266
===========
Gross unrealized appreciation ...... $ 1,005,300
Gross unrealized depreciation ...... (593,366)
-----------
Net unrealized appreciation ........ $ 411,934
===========
(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 less 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.
(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 $60 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,
1997 the commitment fee allocated to the Portfolio was $24. Since the line of
credit was established, there have been no borrowings.
