<PAGE>
Information Age Portfolio as of August 31, 1997
PORTFOLIO OF INVESTMENTS
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Common Stocks -- 95.8%
Value
Security Shares (Note 1A)
- --------------------------------------------------------------------------------
<S> <C> <C>
Advertising -- 2.6%
- --------------------------------------------------------------------------------
Omnicom Group, Inc. 13,000 $ 880,750
WPP Group PLC 10,000 460,000
- --------------------------------------------------------------------------------
$ 1,340,750
- --------------------------------------------------------------------------------
Broadcasting and Cable -- 13.2%
- --------------------------------------------------------------------------------
Benpres Holdings, GDR* 32,000 $ 177,150
Comcast Corp. Class A 20,000 468,750
Emmis Broadcasting Corp., Class A 10,000 492,500
Fuji Television Network Inc. 10 56,233
Granada Group, PLC 40,000 526,339
Jacor Communications, Inc. 10,000 440,000
Liberty Media Group, Class A 20,000 527,500
Lin Television Corp./1/ 17,000 806,438
Pathe SA* 2,100 389,439
TCA Cable TV, Inc. 8,000 304,000
Tele-Communications, Inc. 35,000 612,500
Westinghouse Electric Corp. 45,000 1,158,750
Yorkshire-Tyne Tees TV Holdings* 45,000 842,775
- --------------------------------------------------------------------------------
$ 6,802,374
- --------------------------------------------------------------------------------
Business Services - Miscellaneous -- 1.8%
- --------------------------------------------------------------------------------
Learning Tree International 20,000 $ 550,000
Tyco International Ltd./1/ 4,813 377,520
- --------------------------------------------------------------------------------
$ 927,520
- --------------------------------------------------------------------------------
Communications Equipment -- 1.4%
- --------------------------------------------------------------------------------
General Cable Corp./1/ 10,000 $ 346,250
Glenayre Technologies, Inc. 20,000 350,000
- --------------------------------------------------------------------------------
$ 696,250
- --------------------------------------------------------------------------------
Communications Services -- 16.0%
- --------------------------------------------------------------------------------
Ameritech Corp. 9,000 $ 564,188
Bellsouth Corp. 10,000 440,000
Bezek 250,000 690,928
British Telecommunications, PLC* 125,000 806,696
GTE Corp. 15,000 668,438
Korea Mobile Telecom Corp.* 298 235,171
Nippon Telegraph and Telephone Corp.* 700 654,124
Orange, PLC 225,000 792,792
Orbital Sciences Corp./1/ 25,000 542,188
SBC Communications, Inc. 10,000 543,750
Sprint Corp. 10,000 470,000
Telecom Italia Spa/1/ 350,000 1,226,829
WorldCom, Inc./1/ 20,000 598,750
- --------------------------------------------------------------------------------
$ 8,233,854
- --------------------------------------------------------------------------------
Computer Software -- 12.1%
- --------------------------------------------------------------------------------
Computer Associates International, Inc. 5,000 $ 334,375
Documentum Inc. 20,000 710,000
Great Plains Software Inc./1/ 3,000 79,125
Intuit, Inc./1/ 25,000 653,125
Medic Computer Systems, Inc./1/ 10,000 312,500
Misys, PLC* 33,000 850,801
Net One Systems Co., Ltd./1/ 50 289,436
Nice Systems Ltd./1/ 15,000 599,063
Oracle Corp. 25,500 972,188
Reynolds & Reynolds Inc, Class A 30,000 603,750
USCS International, Inc./1/ 15,000 268,125
Vanda Systems and Communications 1,000,000 567,779
- --------------------------------------------------------------------------------
$ 6,240,267
- --------------------------------------------------------------------------------
Computers and Business Equipment -- 4.2%
- --------------------------------------------------------------------------------
Flextech Holdings Limited 507,000 $ 680,920
Fujitsu Ltd. 50,000 595,410
Lexmark International Group Inc./1/ 25,000 875,000
- --------------------------------------------------------------------------------
$ 2,151,330
- --------------------------------------------------------------------------------
Consumer Services -- 0.6%
- --------------------------------------------------------------------------------
Sterling Commerce, Inc./1/ 10,000 $ 330,625
- --------------------------------------------------------------------------------
$ 330,625
- --------------------------------------------------------------------------------
Drugs -- 0.6%
- --------------------------------------------------------------------------------
Genzyme Corp. 300 $ 3,225
Genzyme Corp. Class A 10,000 281,250
- --------------------------------------------------------------------------------
$ 284,475
- --------------------------------------------------------------------------------
Electronics - Instruments -- 10.4%
- --------------------------------------------------------------------------------
Avimo Group Ltd.* 200,000 $ 254,052
Electric and Eltek International* 3,000,000 1,045,029
</TABLE>
See notes to financial statements
14
<PAGE>
Information Age Portfolio as of August 31, 1997
PORTFOLIO OF INVESTMENTS CONT'D
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Value
Security Shares (Note 1A)
- --------------------------------------------------------------------------------
<S> <C> <C>
Electronics - Instruments (continued)
- --------------------------------------------------------------------------------
Martin Gruppen 7,500 $ 501,599
Philips Electronics* 14,000 995,280
Roland* 40,000 893,116
Tandberg Television, ASA* 92,000 744,675
Thermo Electron Corp./1/ 22,000 885,500
- --------------------------------------------------------------------------------
$ 5,319,251
- --------------------------------------------------------------------------------
Electronics - Semiconductors -- 7.6%
- --------------------------------------------------------------------------------
Alcatel Alsthom 5,000 $ 612,124
Analog Devices 15,000 496,875
Creative Technology Limited/1/ 19,000 382,137
Hitachi Ltd.* 65,000 596,651
Intel Corp. 2,000 184,250
Kokusai Electric 30,000 525,946
LSI Logic/1/ 20,000 643,750
Samsung Electronics* 3,354 377,134
Samsung Electronics Ltd., GDR* 1,225 67,436
- --------------------------------------------------------------------------------
$ 3,886,303
- --------------------------------------------------------------------------------
Entertainment -- 3.2%
- --------------------------------------------------------------------------------
Sony Corp.* 10,000 $ 868,307
Time Warner Inc. 15,000 772,500
- --------------------------------------------------------------------------------
$ 1,640,807
- --------------------------------------------------------------------------------
Information Services -- 9.0%
- --------------------------------------------------------------------------------
Affiliated Computer Services, Inc. Class A 10,000 $ 262,500
Automatic Data Processing, Inc. 5,000 227,813
BISYS Group, Inc./1/ 10,000 337,500
CCC Information Services Group 25,000 431,250
DST Systems, Inc./1/ 17,000 615,188
First Data Corp. 12,000 492,750
First USA Paymentech, Inc./1/ 25,000 759,375
FIserv, Inc. 5,000 225,000
Forrester Research Inc./1/ 2,500 68,750
Reuters Holdings, PLC* 100,000 1,015,059
SunGard Data Systems, Inc. 4,000 208,500
- --------------------------------------------------------------------------------
$ 4,643,685
- --------------------------------------------------------------------------------
Investment Services -- 3.2%
- --------------------------------------------------------------------------------
Ameritrade Holding Corp., Class A/1/ 19,500 $ 366,844
Charles Schwab and Co., Inc. 15,000 636,563
Raymond James Financial Corp. 22,000 638,000
- --------------------------------------------------------------------------------
$ 1,641,407
- --------------------------------------------------------------------------------
Medical Products -- 0.7%
- --------------------------------------------------------------------------------
Healthdyne Technologies Inc./1/ 20,000 $ 337,500
- --------------------------------------------------------------------------------
$ 337,500
- --------------------------------------------------------------------------------
Miscellaneous -- 0.8%
- --------------------------------------------------------------------------------
Waters Corp./1/ 12,000 $ 399,750
- --------------------------------------------------------------------------------
$ 399,750
- --------------------------------------------------------------------------------
Publishing -- 8.4%
- --------------------------------------------------------------------------------
CMP Media Inc., Class A 1,700 $ 45,475
Dow Jones & Co., Inc. 20,000 856,250
John Fairfax Holdings* 250,000 597,228
McGraw-Hill, Inc. 15,000 919,688
Pearson, PLC* 105,000 1,234,367
Springer Alex Verlag AG* 800 686,600
- --------------------------------------------------------------------------------
$ 4,339,608
- --------------------------------------------------------------------------------
Total Common Stocks
(identified cost $42,485,276) $49,215,756
- --------------------------------------------------------------------------------
<CAPTION>
Commercial Paper -- 2.4%
Principal
Amount
Security (000 omitted) Value
- --------------------------------------------------------------------------------
<S> <C> <C>
General Electric Capital Corp.,
5.60%, 9/2/97 $ 1,241 $ 1,240,421
- --------------------------------------------------------------------------------
Total Commercial Paper
(identified cost $1,240,421) $ 1,240,421
- --------------------------------------------------------------------------------
Total Investments -- 98.2%
(identified cost $43,725,697) $50,456,177
- --------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 1.8% $ 917,767
- --------------------------------------------------------------------------------
Net Assets -- 100% $51,373,944
- --------------------------------------------------------------------------------
</TABLE>
ADR -- American Depositary Receipt
GDR -- Global Depositary Receipt
* Foreign Security
/1/ Non-income producing security.
See notes to financial statements
15
<PAGE>
Information Age Portfolio as of August 31, 1997
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
As of August 31, 1997
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Assets
- -------------------------------------------------------------------------------
<S> <C>
Investments, at value (Note 1A)
(identified cost, $43,725,697) $50,456,177
Cash 65,868
Receivable for investments sold 705,154
Dividends and interest receivable 181,643
Deferred organization expenses (Note 1C) 3,963
- -------------------------------------------------------------------------------
Total assets $51,412,805
- -------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------
Payable to affiliate for Trustees' fees (Note 2) $ 54
Accrued expenses $ 38,807
- -------------------------------------------------------------------------------
Total liabilities $ 38,861
- -------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $51,373,944
- -------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $44,641,361
Net unrealized appreciation of investments (computed
on the basis of identified cost) 6,732,583
- -------------------------------------------------------------------------------
Total $51,373,944
- -------------------------------------------------------------------------------
</TABLE>
Statement of Operations
For the Year Ended
August 31, 1997
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Investment Income
- -------------------------------------------------------------------------------
<S> <C>
Dividends (net of foreign taxes, $93,807) $ 615,561
Interest 81,657
- -------------------------------------------------------------------------------
Total income $ 697,218
- -------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 362,172
Administration fee (Note 2) 120,758
Compensation of Trustees not members of the
Administrator's organization (Note 2) 6,570
Custodian fee 177,602
Legal and accounting services 35,148
Amortization of organization expenses (Note 1C) 1,248
Miscellaneous 13,506
- -------------------------------------------------------------------------------
Total expenses $ 717,004
- -------------------------------------------------------------------------------
Net expenses $ 717,004
- -------------------------------------------------------------------------------
Net investment loss $ (19,786)
- -------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- -------------------------------------------------------------------------------
Net realized gain (loss) --
- -------------------------------------------------------------------------------
Investment transactions (identified cost basis) $ 5,627,570
Foreign currency transactions (22,502)
- -------------------------------------------------------------------------------
Net realized gain on investment transactions $ 5,605,068
- -------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 4,257,104
Foreign currency transactions 1,913
- -------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation) $ 4,259,017
- -------------------------------------------------------------------------------
Net realized and unrealized gain on investments $ 9,864,085
- -------------------------------------------------------------------------------
Net increase in net assets from operations $ 9,844,299
- -------------------------------------------------------------------------------
</TABLE>
See notes to financial statements
16
<PAGE>
Information Age Portfolio as of August 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
(Expressed in United States Dollars)
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended Year Ended
in Net Assets August 31, 1997 August 31, 1996*
- -------------------------------------------------------------------------------
<S> <C> <C>
From operations --
Net investment income (loss) $ (19,786) $ 19,131
Net realized gain (loss) on
investment transactions 5,605,068 (269,074)
Net change in unrealized
appreciation (depreciation) 4,259,017 2,473,566
- --------------------------------------------------------------------------------
Net increase in net assets
from operations $ 9,844,299 $ 2,223,623
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $ 19,061,455 $47,226,307
Withdrawals (20,235,195) (6,846,545)
- --------------------------------------------------------------------------------
Net increase (decrease) in net assets
from capital transactions $ (1,173,740) $40,379,762
- --------------------------------------------------------------------------------
Net increase in net assets $ 8,670,559 $42,603,385
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of year $ 42,703,385 $ 100,000
- --------------------------------------------------------------------------------
At end of year $ 51,373,944 $42,703,385
- --------------------------------------------------------------------------------
</TABLE>
* For the period from the start of business, September 18, 1995, to August 31,
1996.
See notes to financial statements
17
<PAGE>
Information Age Portfolio as of August 31, 1997
FINANCIAL STATEMENTS CONT'D
Supplementary Data (Expressed in Unites States Dollars)
<TABLE>
<CAPTION>
Year Ended August 31,
----------------------------------
1997 1996*
- --------------------------------------------------------------------------------
<S> <C> <C>
Ratios to average daily net assets
- --------------------------------------------------------------------------------
Expenses 1.48% 1.52%+
Net investment income (loss) (0.04)% 0.07%+
Portfolio Turnover 160% 115%
- --------------------------------------------------------------------------------
Average commission rate paid per share/(1)/ $0.0160 $0.0303
- --------------------------------------------------------------------------------
Net assets, end of year (000s omitted) $51,374 $42,703
- --------------------------------------------------------------------------------
</TABLE>
+ Annualized.
* For the period from the start of business, September 18, 1995, to August
31, 1996.
/(1)/ Average commission rate paid is computed by dividing the total dollar
amount of commissions paid during the fiscal year by the total number of
shares purchased and sold during the fiscal year for which commissions
were charged.
See notes to financial statements
18
<PAGE>
Information Age Portfolio as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS
(Expressed in United States Dollars)
1 Significant Accounting Policies
------------------------------------------------------------------------------
Information Age Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 as a diversified, open-end management
investment company. The Portfolio which was organized as a trust under the
laws of the State of New York on September 1, 1992 seeks to provide
long-term capital growth by investing in a global and diversified portfolio
of securities of information age companies. 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, 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 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 ultimately responsible for the payment of any taxes on its
share of such income. Since some of the Portfolio's investors are regulated
investment companies that invest all or substantially all of their assets in
the Portfolio, the Portfolio normally must satisfy the applicable source of
income and diversification requirements (under the Internal Revenue Code),
in order for its investors to satisfy them. The Portfolio will allocate, at
least annually among its investors, each investor's distributive share of
the Portfolio's net investment income, net realized capital gains, and any
other items of income, gain, loss, deduction or credit. Withholding taxes on
foreign dividends and capital gains have been provided for in accordance
with the Trust's understanding of the applicable countries' tax rules and
rates.
C Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization 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 in
cash or securities 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 the daily fluctuations in the value of the underlying security, and are
recorded for book purposes as unrealized gains or losses by the Portfolio.
The Portfolio's investment in financial futures contracts is designed only
to hedge against anticipated future changes in interest or currency exchange
rates. 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.
E Options on Financial Futures -- Upon the purchase of a put option on
foreign currency by the Portfolio, the premium paid is recorded as an
investment, the value of which is marked-to-market daily. When a purchased
option expires, the Portfolio will realize a loss in the amount of the cost
of the option. When a Portfolio enters into a closing sales transaction, the
Portfolio will realize a gain or loss depending upon whether the sales
proceeds from the closing sales transaction are greater or less than the
cost of the option. When a Portfolio exercises a put option, settlement is
made in cash. The risk associated with purchasing options is limited to the
premium originally paid.
F 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
19
<PAGE>
Information Age Portfolio as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS CONT'D
(Expressed in United States Dollars)
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.
G Forward Foreign Currency Exchange Contracts -- The Portfolio may enter
into forward foreign currency exchange contracts for the purchase or sale of
a specific foreign currency at a fixed price on a future date. Risks may
arise upon entering these contracts from the potential inability of
counterparties to meet the terms of their contracts and from movements in
the value of a foreign currency relative to the U.S. dollar. The Portfolio
will enter into forward contracts for hedging purposes as well as
non-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.
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 a trade date basis.
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 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 reflected as a
reduction of operating expense on the statement of operations.
2 Investment Adviser Fee and Other Transactions with Affiliates
------------------------------------------------------------------------------
The investment adviser fee is earned by Boston Management and Research
(BMR), a wholly-owned subsidiary of Eaton Vance Management (EVM), and Lloyd
George Investment Management (Bermuda) Limited, an affiliate of EVM, (the
Advisers) as compensation for management and investment advisory services
rendered to the Portfolio. Under the advisory agreement, the Advisers receive
a monthly fee, divided equally between them, of 0.0625% (0.75% annually) of
the average daily net assets of the Portfolio up to $500,000,000, and at
reduced rates as daily net assets exceed that level. For the year ended August
31, 1997 the adviser fee was 0.75% of average net assets for such period and
amounted to $362,172. In addition, an administrative fee is earned by EVM for
managing and administering the business affairs of the Portfolio. Under the
administration agreement, EVM earns a monthly fee in the amount of 1/48th of
1% (equal to 0.25% annually) of the average daily net assets of the
Portfolio up to $500,000,000, and at reduced rates as daily net assets
exceed that level. For the year ended August 31, 1997 the administration fee
was 0.25% of average net assets for such period and amounted to $120,758.
Except as to the Trustees of the Portfolio who are not members of the
Advisers or EVM's organization, officers and Trustees receive remuneration
for their services to the Portfolio out of such investment adviser and
administrative fees.
Trustees of the Portfolio that are not affiliated with the Advisers may elect
to defer receipt of all or a percentage of their annual fees in accordance
with the terms of the Trustees Deferred Compensation Plan. For the year ended
August 31, 1997, no significant amounts have been deferred.
Certain of the officers and Trustees of the Portfolio are officers and
directors/trustees of the above organizations.
3 Investment Transactions
------------------------------------------------------------------------------
Purchase and sales of investments, other than short-term obligations,
aggregated $74,731,034 and $77,133,653, respectively.
20
<PAGE>
Information Age Portfolio as of August 31, 1997
NOTES TO FINANCIAL STATEMENTS (CONT'D)
(Expressed in United States Dollars)
4 Federal Income Tax Basis of Investments
------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in value of the investments
owned at August 31, 1997, are as follows:
Aggregate cost $ 43,829,717
-----------------------------------------------------------------------------
Gross unrealized appreciation $ 7,547,438
Gross unrealized depreciation (920,978)
-----------------------------------------------------------------------------
Net unrealized appreciation $ 6,626,460
-----------------------------------------------------------------------------
5 Risks Associated with Foreign Investments
------------------------------------------------------------------------------
Investing in securities issued by companies whose principal business
activities are outside the United States may involve significant risks not
present in domestic investments. For example, there is generally less
publicly available information about foreign companies, particularly those
not subject to the disclosure and reporting requirements of the U.S.
securities laws. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and standards of
practice comparable to those applicable to domestic issuers. Investments in
foreign securities also involve the risk of possible adverse changes in
investment or exchange control regulations, expropriation or confiscatory
taxation, limitation on the removal of funds or other assets of the
Portfolio, political or financial instability or diplomatic and other
developments which could affect such investments. Foreign stock markets,
while growing in volume and sophistication, are generally not as developed
as those in the United States, and securities of some foreign issuers
(particularly those located in developing countries) may be less liquid and
more volatile than securities of comparable U.S. companies. In general,
there is less overall governmental supervision and regulation of foreign
securities markets, broker-dealers, and issuers than in the United States.
6 Financial Instruments
------------------------------------------------------------------------------
The Portfolio regularly trades in financial instruments with off-balance
sheet risk in the normal course of its investing activities to assist in
managing exposure to various market risks. These financial instruments
include written options, forward foreign currency exchange contracts and
financial futures contracts and may involve, to a varying degree, elements
of risk in excess of the amounts recognized for financial statement
purposes. 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 all related and offsetting transactions
are considered.
The Portfolio did not have any open obligations under these financial
instruments at August 31, 1997.
7 Line of Credit
------------------------------------------------------------------------------
The Portfolio participates with other portfolios and funds managed by BMR
and EVM and its affiliates in a $120 million unsecured line of credit
agreement with a group of banks. Borrowings will be made by the Portfolio
solely to facilitate the handling of unusual and/or unanticipated short-term
cash requirements. Interest is charged to each portfolio or fund based on
its borrowings at the bank's base rate or at an amount above either the
bank's adjusted certificate of deposit rate, a Eurodollar rate, or a federal
funds effective rate. In addition, a fee computed at an annual rate of 0.15%
on the daily unused portion of the facility is allocated among the
participating funds and portfolios at the end of each quarter. The Portfolio
did not have any significant borrowings or allocated fees during the period.
21
<PAGE>
Information Age Portfolio as of August 31, 1997
INDEPENDENT ACCOUNTANTS' REPORT
To the Trustees and Investors of
Information Age Portfolio:
- --------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of
Information Age Portfolio, including the portfolio of investments, as of August
31, 1997, and the related statements of operations, the statements of changes in
net assets and the supplementary data for each of the periods indicated therein.
These financial statements and supplementary data are the responsibility of the
Portfolio's management. Our responsibility is to express an opinion on these
financial statements and supplementary data based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and supplementary data are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of August 31, 1997 by correspondence with the custodian and
brokers; where replies were not received from brokers we performed other
auditing procedures. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and supplementary data present fairly,
in all material respects, the financial position of Information Age Portfolio as
of August 31, 1997, and the results of its operations, changes in its net assets
and supplementary data for each of the periods indicated therein, in conformity
with United States generally accepted accounting principles.
Coopers & Lybrand
Chartered Accountants
Toronto, Canada
October 3, 1997
22
<PAGE>
Information Age Portfolio as of August 31, 1997
INVESTMENT MANAGEMENT
Information Age Portfolio
<TABLE>
<CAPTION>
Officers Independent Trustees
<S> <C>
James B. Hawkes Hon. Edward K.Y. Chen
President and Trustee Professor and Director, Center for Asian Studies,
University of Hong Kong
William Chisholm
Vice President Donald R. Dwight
President, Dwght Partners, Inc.
Michel Normandeau Chairman, Newspapers of New England, Inc.
Vice President
Samuel L. Hayes, III
Raymond O'Neill Jacob H. Schiff Professor of Investment Banking,
Vice President Harvard University Graduate School of
Business Administration
Duncan W. Richardson
Vice President and Norton H. Reamer
Co-Portfolio Manager President and Director, United Asset
Management Corporation
Hon. Robert Lloyd George
Vice President, Trustee and John L. Thorndike
Co-Portfolio Manager Formerly Director, Fiduciary Company
Incorporated
James L. O'Connor
Treasurer Jack L. Treynor
Investment Adviser and Consultant
Alan R. Dynner
Secretary
</TABLE>
23
