-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HAMdMd+GCsa6Qr9l9LL/w0d54KOiJfk+2rfSQ3DYaplTrVvSVQ1pAXjds+QnzqdE IxORrqc+dP8G69CaRizP/w== 0000912057-01-510859.txt : 20010430 0000912057-01-510859.hdr.sgml : 20010430 ACCESSION NUMBER: 0000912057-01-510859 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010228 FILED AS OF DATE: 20010427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EATON VANCE GROWTH TRUST CENTRAL INDEX KEY: 0000102816 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042325690 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-01241 FILM NUMBER: 1612481 BUSINESS ADDRESS: STREET 1: 24 FEDERAL ST CITY: BOSTON STATE: MA ZIP: 02110 BUSINESS PHONE: 6174828260 MAIL ADDRESS: STREET 1: 24 FEDERAL ST STREET 2: 11TH FLOOR CITY: BOSTON STATE: MA ZIP: 02210 FORMER COMPANY: FORMER CONFORMED NAME: EATON VANCE GROWTH FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: VANCE SANDERS COMMON STOCK FUND INC DATE OF NAME CHANGE: 19820915 FORMER COMPANY: FORMER CONFORMED NAME: BOSTON STOCK FUND INC DATE OF NAME CHANGE: 19730619 N-30D 1 a2043799zn-30d.txt N-30D [EATON INVESTING VANCE FOR THE 21ST LOGO] CENTURY-Registered Trademark- EATON VANCE ASIAN SMALL COMPANIES FUND Semiannual Report February 28, 2001 EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 INVESTMENT UPDATE [PHOTO, ZAHEER SITABKHAN] Zaheer Sitabkhan Portfolio Manager INVESTMENT ENVIRONMENT - - The Asian markets moved sharply lower in the six months ended February 28, 2001, suffering from a weaker U.S. economy and a slowdown in global technology sales. Reflecting that weakness, the Morgan Stanley Capital International All Country Asia Pacific Index declined 21.02% during the six-month period.(1) - - Hong Kong is recovering from the deflationary trends of recent years, as evidenced by surging property prices. Mainland China has benefited from an $18 billion fiscal stimulus and from rising foreign direct investment. South Korea saw weaker sales of technology and communications equipment. Despite an easier monetary policy, Korea's GDP forecasts have been adjusted downward. - - In South Asia, India's economy was dealt a major blow by the devastating earthquake in Gujarat state in January. Repair costs are likely to result in a higher-than-expected fiscal deficit and constrain the government's ability to lower interest rates. India's GDP growth is expected to slow to 5% in 2001. THE FUND PERFORMANCE FOR THE PAST SIX MONTHS - - The Fund's Class A shares had a total return of -14.24% during the six months ended February 28, 2001.(2) This return resulted from a decrease in net asset value per share (NAV) to $19.72 on February 28, 2001 from $24.13 on August 31, 2000, and the reinvestment of $1.04 in capital gain distributions. - - The Fund's Class B shares had a total return of -14.81% during the six months ended February 28, 2001.2 This return resulted from a decrease in NAV to $12.72 on February 28, 2001 from $16.07 on August 31, 2000, and the reinvestment of $1.04 in capital gain distributions. RECENT PORTFOLIO DEVELOPMENTS - - Hong Kong represented the Portfolio's largest country weighting, 28.6% of the Portfolio at February 28. India, Korea and Singapore were the next largest exposures. Management reduced somewhat the Portfolio's investments in technology companies in favor of less economically-sensitive sectors, such as pharmaceuticals and food and beverages. - - Hong Kong-based Giordano International Ltd., a fast-growing retailer with approximately 700 stores located throughout Asia, was the Portfolio's largest investment at February 28. Through its innovative technologies, the company has cut costs, streamlined its inventory process and maintained sales momentum in a difficult retail environment. - - Sun Pharmaceutical Industries has generated 112% annualized revenue growth over the past five years, making impressive gains in market share. A recent survey indicated that Sun ranked 5th in prescriptions in the India market. The company has top-sellers in the neurology and psychiatric segments, as well as promising products to treat influenza, epilepsy and cancer. - - Hite Brewery Co. is Korea's second largest brewer, producing some of Korea's most popular products in the malt beverage category. The company posted 15% revenue growth in the past year, well above that of its regional competitors. - - HDFC Bank was among the Portfolio's largest financial holdings, providing a broad range of banking and financial services for Indian consumers. The company has continued to expand its financial centers in the past year, and had 30% revenue growth in 2000. - - PT Unilever Industries is a leading producer of consumer staples in Indonesia. The company has increased capacity at its plants in Jakarta and Surabaya to meet growing consumer demand. PTUnilever's products include soaps, detergents, cooking aids and cosmetics. --------------------------------------------------------------------------- MUTUAL FUND SHARES ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL INVESTED. - -------------------------------------------------------------------------------- FUND INFORMATION AS OF FEBRUARY 28, 2001
PERFORMANCE(3) CLASS A CLASS B - -------------------------------------------------------------------------------- Average Annual Total Returns (at net asset value) - -------------------------------------------------------------------------------- One Year -29.80% -29.58% Life of Fund+ 44.01 11.88 SEC Average Annual Total Returns (including sales charge or applicable CDSC) - -------------------------------------------------------------------------------- One Year -33.84% -32.85% Life of Fund+ 39.81 8.44
+Inception dates: Class A: 3/1/99; Class B: 10/8/99
TEN LARGEST HOLDINGS(4) - -------------------------------------------------------------------------------- Giordano International Ltd. 6.9% Sun Pharmaceutical Industries Ltd. 5.6 Hite Brewery Co., Ltd. 4.9 Daeduck Electronics Co., Ltd. 4.7 HDFC Bank Ltd. 4.7 Humax Co., Ltd. 4.6 Esprit Holdings Ltd. 4.5 PTUnilever Indonesia Tbk 4.2 Dairy Farm International Holdings, Ltd. 4.2 Leefung-Asco Printers Holdings Ltd. 4.1
(1) It is not possible to invest directly in an Index. (2) These returns do not include the 5.75% maximum sales charge for the Fund's Class A shares or the applicable contingent deferred sales charges (CDSC) for Class B shares. (3) Returns are historical and are calculated by determining the percentage change in net asset value with all distributions reinvested. SEC average annual returns for Class A reflect a 5.75% sales charge. Class A shares redeemed within 3 months of purchase, including exchanges, are subject to a 1% early redemption fee. For Class B, returns reflect applicable CDSC based on the following schedule: 5%-1st and 2nd years; 4%-3rd year; 3%-4th year; 2%-5th year; 1%-6th year. (4) Based on market value. Ten largest holdings represent 48.4% of the Portfolio's net assets. Holdings are subject to change. Past performance is no guarantee of future results. Investment return and principal value will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 FINANCIAL STATEMENTS (UNAUDITED) STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 2001 Assets - ---------------------------------------------------- Investment in Asian Small Companies Portfolio, at value (identified cost, $1,526,949) $1,069,965 Receivable for Fund shares sold 1,629 Receivable from the Distributor 39,532 - ---------------------------------------------------- TOTAL ASSETS $1,111,126 - ---------------------------------------------------- Liabilities - ---------------------------------------------------- Payable to affiliate for service fees $ 85 Accrued expenses 8,502 - ---------------------------------------------------- TOTAL LIABILITIES $ 8,587 - ---------------------------------------------------- NET ASSETS $1,102,539 - ---------------------------------------------------- Sources of Net Assets - ---------------------------------------------------- Paid-in capital $1,478,567 Accumulated undistributed net realized gain from Portfolio (computed on the basis of identified cost) 91,821 Accumulated net investment loss (10,865) Net unrealized depreciation from Portfolio (computed on the basis of identified cost) (456,984) - ---------------------------------------------------- TOTAL $1,102,539 - ---------------------------------------------------- Class A Shares - ---------------------------------------------------- NET ASSETS $1,009,926 SHARES OUTSTANDING 51,214 NET ASSET VALUE AND REDEMPTION PRICE PER SHARE (net assets DIVIDED BY shares of beneficial interest outstanding) $ 19.72 MAXIMUM OFFERING PRICE PER SHARE (100 DIVIDED BY 94.25 of $19.72) $ 20.92 - ---------------------------------------------------- Class B Shares - ---------------------------------------------------- NET ASSETS $ 92,613 SHARES OUTSTANDING 7,280 NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE (net assets DIVIDED BY shares of beneficial interest outstanding) $ 12.72 - ----------------------------------------------------
On sales of $50,000 or more, the offering price of Class A shares is reduced. STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2001 Investment Income - --------------------------------------------------- Dividends allocated from Portfolio (net of foreign taxes, $227) $ 7,422 Expenses allocated from Portfolio (8,103) - --------------------------------------------------- NET INVESTMENT LOSS FROM PORTFOLIO $ (681) - --------------------------------------------------- Expenses - --------------------------------------------------- Management fee $ 1,820 Distribution and service fees Class A 3,563 Class B 249 Registration fees 19,597 Legal and accounting services 11,840 Custodian fee 11,190 Printing and postage 2,727 Transfer and dividend disbursing agent fees 185 Miscellaneous 365 - --------------------------------------------------- TOTAL EXPENSES $ 51,536 - --------------------------------------------------- Deduct -- Preliminary reduction of management fee $ 1,820 Preliminary allocation of expenses to the Distributor 39,532 - --------------------------------------------------- TOTAL EXPENSE REDUCTIONS $ 41,352 - --------------------------------------------------- NET EXPENSES $ 10,184 - --------------------------------------------------- NET INVESTMENT LOSS $ (10,865) - --------------------------------------------------- Realized and Unrealized Gain (Loss) from Portfolio - --------------------------------------------------- Net realized gain (loss) -- Investment transactions (identified cost basis) (net of foreign taxes, $6,931) $ 153,925 Foreign currency transactions (5,218) - --------------------------------------------------- NET REALIZED GAIN $ 148,707 - --------------------------------------------------- Change in unrealized appreciation (depreciation) -- Investments (identified cost basis) $(394,886) Foreign currency 2,381 - --------------------------------------------------- NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $(392,505) - --------------------------------------------------- NET REALIZED AND UNREALIZED LOSS $(243,798) - --------------------------------------------------- NET DECREASE IN NET ASSETS FROM OPERATIONS $(254,663) - ---------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS 3 EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 FINANCIAL STATEMENTS CONT'D STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED INCREASE (DECREASE) FEBRUARY 28, 2001 YEAR ENDED IN NET ASSETS (UNAUDITED) AUGUST 31, 2000 - ---------------------------------------------------------------------------- From operations -- Net investment loss $ (10,865) $ (24,008) Net realized gain 148,707 309,227 Net change in unrealized appreciation (depreciation) (392,505) (68,246) - ---------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (254,663) $ 216,973 - ---------------------------------------------------------------------------- Distributions to shareholders -- From net investment income Class A $ -- $ (1,374) In excess of net investment income Class A -- (135) From net realized gain Class A (74,363) -- Class B (2,032) -- - ---------------------------------------------------------------------------- TOTAL DISTRIBUTIONS TO SHAREHOLDERS $ (76,395) $ (1,509) - ---------------------------------------------------------------------------- Transactions in shares of beneficial interest -- Proceeds from sale of shares Class A $ 121,523 $ 1,078,662 Class B 72,510 138,662 Net asset value of shares issued to shareholders in payment of distributions declared Class A 74,363 1,507 Class B 2,032 -- Cost of shares redeemed Class A (579,652) (39,986) Class B (26,927) (99,028) - ---------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM FUND SHARE TRANSACTIONS $ (336,151) $ 1,079,817 - ---------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS $ (667,209) $ 1,295,281 - ---------------------------------------------------------------------------- Net Assets - ---------------------------------------------------------------------------- At beginning of period $ 1,769,748 $ 474,467 - ---------------------------------------------------------------------------- AT END OF PERIOD $ 1,102,539 $ 1,769,748 - ---------------------------------------------------------------------------- Accumulated net investment loss included in net assets - ---------------------------------------------------------------------------- AT END OF PERIOD $ (10,865) $ -- - ----------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS 4 EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 FINANCIAL STATEMENTS CONT'D FINANCIAL HIGHLIGHTS
CLASS A -------------------------------------------- SIX MONTHS ENDED YEAR ENDED AUGUST 31, FEBRUARY 28, 2001 ----------------------- (UNAUDITED)(1) 2000 1999(2) - ------------------------------------------------------------------------------ Net asset value -- Beginning of period $24.130 $15.840 $10.000 - ------------------------------------------------------------------------------ Income (loss) from operations - ------------------------------------------------------------------------------ Net investment income (loss) $(0.143) $(0.322) $ 0.046 Net realized and unrealized gain (loss) (3.227) 8.660 5.794 - ------------------------------------------------------------------------------ TOTAL INCOME (LOSS) FROM OPERATIONS $(3.370) $ 8.338 $ 5.840 - ------------------------------------------------------------------------------ Less distributions - ------------------------------------------------------------------------------ From net investment income $ -- $(0.044) $ -- In excess of net investment income -- (0.004) -- From net realized gain (1.040) -- -- - ------------------------------------------------------------------------------ TOTAL DISTRIBUTIONS $(1.040) $(0.048) -- - ------------------------------------------------------------------------------ NET ASSET VALUE -- END OF PERIOD $19.720 $24.130 $15.840 - ------------------------------------------------------------------------------ TOTAL RETURN(3) (14.24)% 52.65% 58.40% - ------------------------------------------------------------------------------ Ratios/Supplemental Data+ - ------------------------------------------------------------------------------ Net assets, end of period (000's omitted) $ 1,010 $ 1,723 $ 474 Ratios (As a percentage of average daily net assets): Net expenses(4) 2.82%(5) 2.70% 1.40%(5) Net expenses after custodian fee reduction(4) 2.50%(5) 2.49% 1.40%(5) Net investment income (loss) (1.43)%(5) (1.66)% 2.69%(5) Portfolio Turnover of the Portfolio 55% 112% 105% - ------------------------------------------------------------------------------ + The operating expenses of the Fund reflect a reduction of the management fee and distribution fee as well as an allocation of expenses to the Distributor. Had such actions not been taken, the ratios would have been as follows: Ratios (As a percentage of average daily net assets): Expenses(4) 8.32%(5) 6.67% 8.23%(5) Expenses after custodian fee reduction(4) 8.00%(5) 6.46% 8.23%(5) Net investment loss (6.93)%(5) (5.63)% (4.13)%(5) Net investment loss per share $(0.693) $(1.092) $(0.071) - ------------------------------------------------------------------------------
(1) Net investment gain (loss) per share was computed using average shares outstanding. (2) For the period from the start of business, March 1, 1999 to August 31, 1999. (3) Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. Total return is not computed on an annualized basis. (4) Includes the Fund's share of the corresponding Portfolio's allocated expenses. (5) Annualized. SEE NOTES TO FINANCIAL STATEMENTS 5 EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 FINANCIAL STATEMENTS CONT'D FINANCIAL HIGHLIGHTS
CLASS B -------------------------------------------- SIX MONTHS ENDED PERIOD ENDED AUGUST 31, FEBRUARY 28, 2001 ----------------------- (UNAUDITED)(1) 2000(2) - ------------------------------------------------------------------------------ Net asset value -- Beginning of period $16.070 $11.700 - ------------------------------------------------------------------------------ Income (loss) from operations - ------------------------------------------------------------------------------ Net investment loss $(0.212) $(0.345) Net realized and unrealized gain (loss) (2.098) 4.715 - ------------------------------------------------------------------------------ TOTAL INCOME (LOSS) FROM OPERATIONS $(2.310) $ 4.370 - ------------------------------------------------------------------------------ Less distributions - ------------------------------------------------------------------------------ From net realized gain $(1.040) $ -- - ------------------------------------------------------------------------------ TOTAL DISTRIBUTIONS $(1.040) $ -- - ------------------------------------------------------------------------------ NET ASSET VALUE -- END OF PERIOD $12.720 $16.070 - ------------------------------------------------------------------------------ TOTAL RETURN(3) (14.81)% 37.35% - ------------------------------------------------------------------------------ Ratios/Supplemental Data+ - ------------------------------------------------------------------------------ Net assets, end of period (000's omitted) $ 93 $ 47 Ratios (As a percentage of average daily net assets): Net expenses(4) 3.32%(5) 2.77%(5) Net expenses after custodian fee reduction(4) 3.00%(5) 2.56%(5) Net investment loss (3.30)%(5) (1.59)%(5) Portfolio Turnover of the Portfolio 55% 112% - ------------------------------------------------------------------------------ + The operating expenses of the Fund reflect a reduction of the management fee and distribution fee as well as an allocation of expenses to the Distributor. Had such actions not been taken, the ratios would have been as follows: Ratios (As a percentage of average daily net assets): Expenses(4) 14.28%(5) 4.81%(5) Expenses after custodian fee reduction(4) 13.96%(5) 4.60%(5) Net investment loss (14.26)%(5) (3.63)%(5) Net investment loss per share $(0.916) $(0.788) - ------------------------------------------------------------------------------
(1) Net investment loss per share was computed using average shares outstanding. (2) For the period from the commencement of Class B shares, October 8, 1999 to August 31, 2000. (3) Total return is calculated assuming a purchase at the net asset value on the first day and a sale at the net asset value on the last day of each period reported. Dividends and distributions, if any, are assumed to be reinvested at the net asset value on the reinvestment date. Total return is not computed on an annualized basis. (4) Includes the Fund's share of the corresponding Portfolio's allocated expenses. (5) Annualized. SEE NOTES TO FINANCIAL STATEMENTS 6 EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1 Significant Accounting Policies - ------------------------------------------- Eaton Vance Asian Small Companies Fund (the Fund) is a diversified series of Eaton Vance Growth Trust (the Trust). The Trust is an entity of the type commonly known as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company. The Fund offers two classes of shares. Class A shares are generally sold subject to a sales charge imposed at time of purchase. Class B shares are sold at net asset value and are subject to a contingent deferred sales charge (see Note 6). Each class represents a pro rata interest in the Fund, but votes separately on class-specific matters and (as noted below) is subject to different expenses. Realized and unrealized gains and losses and net investment income, other than class specific expenses, are allocated daily to each class of shares based on the relative net assets of each class to the total net assets of the Fund. Each class of shares differs in its distribution plan and certain other class specific expenses. The Fund invests all of its investable assets in interests in Asian Small Companies Portfolio (the Portfolio), a New York trust, having the same investment objective as the Fund. The value of the Fund's investment in the Portfolio reflects the Fund's proportionate interest in the net assets of the Portfolio (2.2% at February 28, 2001). The performance of the Fund is directly affected by the performance of the Portfolio. The financial statements of the Portfolio, including the portfolio of investments, are included elsewhere in this report and should be read in conjunction with the Fund's financial statements. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles. A Investment Valuation -- Valuation of securities by the Portfolio is discussed in Note 1A of the Portfolio's Notes to Financial Statements which are included elsewhere in this report. B Income -- The Fund's net investment income consists of the Fund's pro rata share of the net investment income of the Portfolio, less all actual and accrued expenses of the Fund determined in accordance with generally accepted accounting principles. C Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian to the Fund and the Portfolio. Pursuant to the respective custodian agreements, IBT receives a fee reduced by credits which are determined based on the average daily cash balances the Fund or the Portfolio maintains with IBT. All significant credit balances used to reduce the Fund's custodian fees are reported as a reduction of total expenses in the Statement of Operations. D Federal Taxes -- The Fund's policy is to comply with the provisions of the Internal Revenue Code applicable to regulated investment companies and to distribute to shareholders each year all of its net investment income and any net realized capital gains. Accordingly, no provision for federal income or excise tax is necessary. E Use of Estimates -- The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. F Other -- Investment transactions are accounted for on a trade-date basis. G Interim Financial Statements -- The interim financial statements relating to February 28, 2001, and for the six months 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 Distributions to Shareholders - ------------------------------------------- It is present policy of the Fund to make at least one distribution annually (normally in December) of all or substantially all of the net investment income allocated to the Fund by the Portfolio, less the Fund's direct expenses and at least one distribution annually of all or substantially all of the net realized capital gains (reduced by any available capital loss carryforwards from prior years) allocated to the Fund by the Portfolio, if any. Shareholders may reinvest all distributions in shares of the Fund at the per share net asset value as of the close of business on the ex-dividend date. The Fund distinguishes between distributions on a tax basis and a financial reporting basis. Generally accepted accounting principles require that only distributions in excess of tax basis earnings and profits be reported in the financial statements as a return of capital. Differences in the recognition or classification of income between the financial statements and tax earnings and profits which result in temporary over distributions for financial statement purposes are classified as distributions 7 EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D in excess of net investment income or accumulated net realized gains. Permanent differences between book and tax accounting relating to distributions are reclassified to paid-in capital. 3 Shares of Beneficial Interest - ------------------------------------------- The Fund's Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value). Such shares may be issued in a number of different series (such as the Fund) and classes. Transactions in Fund shares were as follows:
SIX MONTHS ENDED FEBRUARY 28, 2001 YEAR ENDED CLASS A (UNAUDITED) AUGUST 31, 2000 ------------------------------------------------------------------------------------------ Sales 5,950 42,970 Issued to shareholders electing to receive payments of distributions in Fund shares 3,536 65 Redemptions (29,665) (1,590) ------------------------------------------------------------------------------------------ NET INCREASE (DECREASE) (20,179) 41,445 ------------------------------------------------------------------------------------------ SIX MONTHS ENDED FEBRUARY 28, 2001 PERIOD ENDED CLASS B (UNAUDITED) AUGUST 31, 2000(1) ------------------------------------------------------------------------------------------ Sales 6,123 9,008 Issued to shareholders electing to receive payments of distributions in Fund shares 149 -- Redemptions (1,914) (6,086) ------------------------------------------------------------------------------------------ NET INCREASE 4,358 2,922 ------------------------------------------------------------------------------------------
(1) For the period from the commencement of offering of Class B shares, October 8, 1999 to August 31, 2000. 4 Management Fee and Other Transactions with Affiliates - ------------------------------------------- The management fee is earned by Eaton Vance Management (EVM) as compensation for management and administration of the business affairs of the Fund. The fee is based on a percentage of average daily net assets. For the six months ended February 28, 2001, the fee was equivalent to 0.25% (annualized) of the Fund's average net assets for such period and amounted to $1,820. To reduce the net operating loss of the Fund, EVM waived their fee. Except for Trustees of the Fund who are not members of EVM's organization, officers and Trustees receive remuneration for their services to the Fund out of such management fee. The Fund was informed that Eaton Vance Distributors, Inc. (EVD), a subsidiary of EVM and the Fund's principal underwriter, received nothing from the Eaton Vance Asian Small Companies Fund as its portion of the sales charge on sales of Class A shares for the six months ended February 28, 2001. Certain officers and Trustees of the Fund and of the Portfolio are officers of the above organization. 5 Distribution Plan - ------------------------------------------- The Fund has in effect distribution plans for Class A (Class A Plan) and Class B (Class B Plan) pursuant to Rule 12b-1 under the Investment Company Act of 1940 (collectively, the Plans). The Class B Plan requires the Fund to pay EVD amounts equal to 1/365 of 0.75% of the Fund's average daily net assets attributable to Class B shares and an amount equal to (a) 0.50% of that portion of the Fund's Class A shares average daily net assets attributable to Class A shares of the Fund which have remained outstanding for less than one year and (b) 0.25% of that portion of the Fund's Class A average daily net assets which is attributable to Class A shares of the Fund which have remained outstanding for more than one year, for providing ongoing distribution services and facilities to the Fund. The Fund's Class B shares will automatically discontinue payments to EVD during any period in which there are no outstanding Uncovered Distribution Charges, which are equivalent to the sum of (i) 5% of the aggregate amount received by the Fund for the Class B shares sold plus (ii) interest calculated by applying the rate of 1% over the prevailing prime rate to the outstanding balance of Uncovered Distribution Charges of EVD reduced by the aggregate amount of contingent deferred sales charges (see Note 6) and daily amounts theretofore paid to EVD. The Fund paid or accrued approximately $3,497 and $187 for Class A, and Class B shares, respectively to or payable to EVD for the six months ended February 28, 2001, representing approximately 0.50%, and 0.75% (annualized) of the average daily net assets for Class A and Class B shares, respectively. In addition, to reduce the net operating loss of the Fund, the Distributor voluntarily assumed $39,532 of the Fund's expenses. At February 28, 2001, the amount of Uncovered Distribution Charges EVD calculated under the Plan was approximately $15,000 for Class B shares. The Plans authorize the Class A and Class B shares to make payments of service fees to EVD, investment dealers and other persons in amounts not exceeding 0.25% (annualized) of the average daily net assets attributable to Class A and Class B shares for each fiscal year. The Trustees initially implemented the Plans by authorizing Class A and 8 EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D Class B shares to make quarterly payments of service fees to EVD and investment dealers equal to 0.25% per annum of the average daily net assets attributable to Class A and Class B shares based on the value of Fund shares sold by such persons and remaining outstanding for at least one year. On October 4, 1999, the Trustees approved service fee payments equal to 0.25% per annum of the Fund's average daily net assets attributable to Class B shares for any fiscal year on shares sold on or after October 12, 1999. Service fee payments will be made for personal services and/or the maintenance of shareholder accounts. Service fees are separate and distinct from the sales commissions and distribution fees payable by the Fund to EVD, and, as such are not subject to automatic discontinuance when there are no outstanding Uncovered Distribution Charges of EVD. Service fee payments for the six months ended February 28, 2001 amounted to approximately $66 and $62, for Class A and B shares, respectively. Certain officers and Trustees of the Fund are officers or directors of EVD. 6 Contingent Deferred Sales Charge - ------------------------------------------- A contingent deferred sales charge (CDSC) generally is imposed on redemptions of Class A shares made within three months of purchase and on redemptions of Class B shares made within six years of purchase. Generally, the CDSC is based upon the lower of the net asset value at date of redemption or date of purchase. No charge is levied on shares acquired by reinvestment of dividends or capital gains distributions. Class A shares will be subject to a 1% CDSC if redeemed within three months of purchase. Class B CDSC is imposed at declining rates that begin at 5% in the case of redemptions in the first and second year after purchase, declining one percentage point each subsequent year. No CDSC is levied on shares which have been sold to EVM or its affiliates or to their respective employees or clients and may be waived under certain other limited conditions. CDSC charges are paid to EVD to reduce the amount of Uncovered Distribution Charges calculated under each Fund's Distribution Plan (see Note 5). CDSC charges received when no Uncovered Distribution Charges exist will be credited to the Fund. EVD received approximately $1,000 of CDSC paid by Class B shareholders for the six months ended February 28, 2001. 7 Investment Transactions - ------------------------------------------- Increases and decreases in the Fund's investment in the Portfolio aggregated $241,788 and $651,594 respectively, for the six months ended February 28, 2001. 9 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 PORTFOLIO OF INVESTMENTS (UNAUDITED) COMMON STOCKS -- 93.5%
SECURITY SHARES VALUE - -----------------------------------------------------------------
AUSTRALIA -- 0.5%
SECURITY SHARES VALUE Diversified Financial Services -- 0.5% - ----------------------------------------------------------------- Hart Australia Ltd.(1) 1,500,000 $ 228,310 - ----------------------------------------------------------------- $ 228,310 - ----------------------------------------------------------------- Industrial Goods -- 0.0% - ----------------------------------------------------------------- Kinetic Power Ltd.(1)(2) 350,000 $ 0 - ----------------------------------------------------------------- $ (0) - ----------------------------------------------------------------- Total Australia (identified cost $1,303,596) $ 228,310 - -----------------------------------------------------------------
HONG KONG -- 28.6%
SECURITY SHARES VALUE - ----------------------------------------------------------------- Audio / Video Products -- 1.4% - ----------------------------------------------------------------- VTech Holdings Ltd. 975,000 $ 693,759 - ----------------------------------------------------------------- $ 693,759 - ----------------------------------------------------------------- Distribution / Wholesale -- 4.5% - ----------------------------------------------------------------- Esprit Holdings Ltd. 1,889,000 $ 2,179,643 - ----------------------------------------------------------------- $ 2,179,643 - ----------------------------------------------------------------- Electronic Components - Miscellaneous -- 1.6% - ----------------------------------------------------------------- Varitronix International Ltd. 755,000 $ 769,529 - ----------------------------------------------------------------- $ 769,529 - ----------------------------------------------------------------- Media -- 0.0% - ----------------------------------------------------------------- CIM Co., Ltd.(2) 300,000 $ 0 - ----------------------------------------------------------------- $ (0) - ----------------------------------------------------------------- Medical Services -- 2.1% - ----------------------------------------------------------------- Quality Healthcare Asia Ltd.(1) 7,150,000 $ 999,179 - ----------------------------------------------------------------- $ 999,179 - ----------------------------------------------------------------- Oil Companies - Exploration & Production -- 0.9% - ----------------------------------------------------------------- CNOOC Ltd.(1) 480,000 $ 430,775 - ----------------------------------------------------------------- $ 430,775 - ----------------------------------------------------------------- SECURITY SHARES VALUE - ----------------------------------------------------------------- Printing -- 4.1% - ----------------------------------------------------------------- Leefung-Asco Printers Holdings Ltd. 9,349,000 $ 1,965,712 - ----------------------------------------------------------------- $ 1,965,712 - ----------------------------------------------------------------- Publishing -- 3.2% - ----------------------------------------------------------------- South China Morning Post (Holdings) Ltd. 2,170,000 $ 1,557,969 - ----------------------------------------------------------------- $ 1,557,969 - ----------------------------------------------------------------- Retail - Apparel -- 6.9% - ----------------------------------------------------------------- Giordano International Ltd. 5,645,102 $ 3,329,205 - ----------------------------------------------------------------- $ 3,329,205 - ----------------------------------------------------------------- Retail - Food and Drug -- 3.9% - ----------------------------------------------------------------- Cafe de Coral Holdings Ltd. 4,495,000 $ 1,887,348 - ----------------------------------------------------------------- $ 1,887,348 - ----------------------------------------------------------------- Total Hong Kong (identified cost $11,029,792) $13,813,119 - -----------------------------------------------------------------
INDIA -- 26.6%
SECURITY SHARES VALUE - ----------------------------------------------------------------- Banking and Finance -- 4.7% - ----------------------------------------------------------------- HDFC Bank Ltd. 408,500 $ 2,263,252 - ----------------------------------------------------------------- $ 2,263,252 - ----------------------------------------------------------------- Computer Software -- 6.9% - ----------------------------------------------------------------- Infosys Technologies Ltd. 13,900 $ 1,869,183 VisualSoft (India) Ltd. 91,200 1,451,577 - ----------------------------------------------------------------- $ 3,320,760 - ----------------------------------------------------------------- Food and Beverages -- 2.8% - ----------------------------------------------------------------- United Breweries Ltd. 576,500 $ 1,333,481 - ----------------------------------------------------------------- $ 1,333,481 - ----------------------------------------------------------------- Media -- 2.0% - ----------------------------------------------------------------- UTV Software Solutions Communications Co. Ltd.(2) 351,400 $ 943,812 - ----------------------------------------------------------------- $ 943,812 - -----------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS 10 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D
SECURITY SHARES VALUE - ----------------------------------------------------------------- Medical Services -- 1.7% - ----------------------------------------------------------------- Apollo Hospitals 240,000 $ 824,581 - ----------------------------------------------------------------- $ 824,581 - ----------------------------------------------------------------- Pharmaceutical -- 5.6% - ----------------------------------------------------------------- Sun Pharmaceutical Industries Ltd. 211,175 $ 2,696,860 - ----------------------------------------------------------------- $ 2,696,860 - ----------------------------------------------------------------- Transport - Services -- 2.9% - ----------------------------------------------------------------- Blue Dart Express Ltd. 283,000 $ 1,404,967 - ----------------------------------------------------------------- $ 1,404,967 - ----------------------------------------------------------------- Total India (identified cost $13,847,234) $12,787,713 - -----------------------------------------------------------------
INDONESIA -- 4.2%
SECURITY SHARES VALUE - ----------------------------------------------------------------- Soap & Cleaning Preparations -- 4.2% - ----------------------------------------------------------------- PT Unilever Indonesia Tbk 1,190,000 $ 2,022,577 - ----------------------------------------------------------------- $ 2,022,577 - ----------------------------------------------------------------- Total Indonesia (identified cost $1,942,240) $ 2,022,577 - -----------------------------------------------------------------
MALAYSIA -- 1.0%
SECURITY SHARES VALUE - ----------------------------------------------------------------- Building and Construction - Misc. -- 1.0% - ----------------------------------------------------------------- Dialog Group Berhad 373,334 $ 491,229 - ----------------------------------------------------------------- $ 491,229 - ----------------------------------------------------------------- Total Malaysia (identified cost $423,925) $ 491,229 - -----------------------------------------------------------------
REPUBLIC OF KOREA -- 19.3%
SECURITY SHARES VALUE - ----------------------------------------------------------------- Circuit Boards -- 4.7% - ----------------------------------------------------------------- Daeduck Electronics Co. Ltd. 247,500 $ 2,269,827 - ----------------------------------------------------------------- $ 2,269,827 - ----------------------------------------------------------------- Entertainment Software -- 2.2% - ----------------------------------------------------------------- Taff System Co. Ltd.(1) 66,000 $ 1,052,674 - ----------------------------------------------------------------- $ 1,052,674 - ----------------------------------------------------------------- Food and Beverages -- 4.9% - ----------------------------------------------------------------- Hite Brewery Co. Ltd.(1) 66,560 $ 2,362,072 - ----------------------------------------------------------------- $ 2,362,072 - ----------------------------------------------------------------- Internet Content - Entertainment -- 2.8% - ----------------------------------------------------------------- NC Soft Corp. 17,900 $ 1,357,542 - ----------------------------------------------------------------- $ 1,357,542 - ----------------------------------------------------------------- Wireless Equipment -- 4.7% - ----------------------------------------------------------------- Humax Co. Ltd.(1) 164,600 $ 2,238,072 - ----------------------------------------------------------------- $ 2,238,072 - ----------------------------------------------------------------- Total Republic of Korea (identified cost $9,007,480) $ 9,280,187 - -----------------------------------------------------------------
SINGAPORE -- 7.7%
SECURITY SHARES VALUE - ----------------------------------------------------------------- Food - Retail -- 4.2% - ----------------------------------------------------------------- Dairy Farm International Holdings Ltd.(1) 3,825,000 $ 2,008,125 - ----------------------------------------------------------------- $ 2,008,125 - ----------------------------------------------------------------- Insurance -- 3.5% - ----------------------------------------------------------------- Great Eastern Holdings Ltd. 400,000 $ 1,696,761 - ----------------------------------------------------------------- $ 1,696,761 - ----------------------------------------------------------------- Total Singapore (identified cost $3,579,620) $ 3,704,886 - -----------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS 11 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 PORTFOLIO OF INVESTMENTS (UNAUDITED) CONT'D TAIWAN -- 3.3%
SECURITY SHARES VALUE - ----------------------------------------------------------------- Electronic Components - Miscellaneous -- 0.9% - ----------------------------------------------------------------- Procomp Informatics Co. Ltd.(1) 139,000 $ 440,417 - ----------------------------------------------------------------- $ 440,417 - ----------------------------------------------------------------- Semiconductor Components / Integrated Circuits -- 2.4% - ----------------------------------------------------------------- Elan Microelectronics Corp.(1) 426,000 $ 1,158,825 - ----------------------------------------------------------------- $ 1,158,825 - ----------------------------------------------------------------- Total Taiwan (identified cost $1,516,433) $ 1,599,242 - -----------------------------------------------------------------
THAILAND -- 2.3%
SECURITY SHARES VALUE - ----------------------------------------------------------------- Financial -- 2.3% - ----------------------------------------------------------------- National Finance Public Company Ltd.(1) 4,833,000 $ 1,121,606 - ----------------------------------------------------------------- $ 1,121,606 - ----------------------------------------------------------------- Total Thailand (identified cost $1,002,431) $ 1,121,606 - ----------------------------------------------------------------- Total Common Stocks (identified cost $43,652,751) $45,048,869 - ----------------------------------------------------------------- Total Investments -- 93.5% (identified cost $43,652,751) $45,048,869 - ----------------------------------------------------------------- Other Assets, Less Liabilities -- 6.5% $ 3,152,652 - ----------------------------------------------------------------- Net Assets -- 100.0% $48,201,521 - -----------------------------------------------------------------
(1) Non-income producing security. (2) Security valued at fair value using methods determined in good faith by or at the direction of the Trustees. SEE NOTES TO FINANCIAL STATEMENTS 12 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 FINANCIAL STATEMENTS (UNAUDITED) STATEMENT OF ASSETS AND LIABILITIES
AS OF FEBRUARY 28, 2001 Assets - ----------------------------------------------------- Investments, at value (identified cost, $43,652,751) $45,048,869 Cash 661,077 Foreign currency, at value (identified cost, $3,185,935) 3,226,490 Receivable for investments sold 973,906 Dividends receivable 2,198 Prepaid expenses 508 - ----------------------------------------------------- TOTAL ASSETS $49,913,048 - ----------------------------------------------------- Liabilities - ----------------------------------------------------- Demand note payable $ 1,700,000 Accrued expenses 11,527 - ----------------------------------------------------- TOTAL LIABILITIES $ 1,711,527 - ----------------------------------------------------- NET ASSETS APPLICABLE TO INVESTORS' INTEREST IN PORTFOLIO $48,201,521 - ----------------------------------------------------- Sources of Net Assets - ----------------------------------------------------- Net proceeds from capital contributions and withdrawals $46,764,851 Net unrealized appreciation (computed on the basis of identified cost) 1,436,670 - ----------------------------------------------------- TOTAL $48,201,521 - -----------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2001 Investment Income - ------------------------------------------------------ Dividends (net of foreign taxes, $8,088) $ 262,308 - ------------------------------------------------------ TOTAL INVESTMENT INCOME $ 262,308 - ------------------------------------------------------ Expenses - ------------------------------------------------------ Investment adviser fee $ 187,322 Administration fee 61,874 Trustees' fees and expenses 2,075 Legal and accounting services 15,128 Custodian fee 80,992 Miscellaneous 6,272 - ------------------------------------------------------ TOTAL EXPENSES $ 353,663 - ------------------------------------------------------ Deduct -- Reduction of custodian fee $ 78,492 - ------------------------------------------------------ TOTAL EXPENSE REDUCTIONS $ 78,492 - ------------------------------------------------------ NET EXPENSES $ 275,171 - ------------------------------------------------------ NET INVESTMENT LOSS $ (12,863) - ------------------------------------------------------ Realized and Unrealized Gain (Loss) - ------------------------------------------------------ Net realized gain (loss) -- Investment transactions (identified cost basis) (net of foreign taxes, $245,314) $ 5,727,944 Foreign currency transactions (171,699) - ------------------------------------------------------ NET REALIZED GAIN $ 5,556,245 - ------------------------------------------------------ Change in unrealized appreciation (depreciation) -- Investments (identified cost basis) $(13,813,742) Foreign currency 74,502 - ------------------------------------------------------ NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) $(13,739,240) - ------------------------------------------------------ NET REALIZED AND UNREALIZED LOSS $ (8,182,995) - ------------------------------------------------------ NET DECREASE IN NET ASSETS FROM OPERATIONS $ (8,195,858) - ------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS 13 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 FINANCIAL STATEMENTS CONT'D STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED INCREASE (DECREASE) FEBRUARY 28, 2001 YEAR ENDED IN NET ASSETS (UNAUDITED) AUGUST 31, 2001 - ---------------------------------------------------------------------------- From operations -- Net investment loss $ (12,863) $ (190,304) Net realized gain 5,556,245 14,259,948 Net change in unrealized appreciation (depreciation) (13,739,240) 6,732,050 - ---------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $ (8,195,858) $ 20,801,694 - ---------------------------------------------------------------------------- Capital transactions -- Contributions $ 256,463 $ 29,213,229 Withdrawals (8,153,761) (14,204,876) - ---------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL TRANSACTIONS $ (7,897,298) $ 15,008,353 - ---------------------------------------------------------------------------- NET INCREASE (DECREASE) IN NET ASSETS $ (16,093,156) $ 35,810,047 - ---------------------------------------------------------------------------- Net Assets - ---------------------------------------------------------------------------- At beginning of period $ 64,294,677 $ 28,484,630 - ---------------------------------------------------------------------------- AT END OF PERIOD $ 48,201,521 $ 64,294,677 - ----------------------------------------------------------------------------
SEE NOTES TO FINANCIAL STATEMENTS 14 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 FINANCIAL STATEMENTS CONT'D SUPPLEMENTARY DATA
SIX MONTHS ENDED YEAR ENDED AUGUST 31, FEBRUARY 28, 2001 -------------------------------- (UNAUDITED) 2000 1999 1998 - --------------------------------------------------------------------------------------- Ratios/Supplemental Data - --------------------------------------------------------------------------------------- Ratios (As a percentage of average daily net assets): Expenses 1.43%(1) 1.34% 0.85% 0.50% Expenses after custodian fee reduction 1.11%(1) 1.13% 0.85% 0.50% Net investment income (loss) (0.05)%(1) (0.31)% 1.32% 1.34% Portfolio Turnover 55% 112% 105% 101% - --------------------------------------------------------------------------------------- NET ASSETS, END OF PERIOD (000'S OMITTED) $48,202 $64,295 $28,485 $15,207 - ---------------------------------------------------------------------------------------
(1) Annualized. SEE NOTES TO FINANCIAL STATEMENTS 15 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 1 Significant Accounting Policies - ------------------------------------------- Asian Small Companies Portfolio (the Portfolio) 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 on January 19, 1996. The Portfolio seeks to achieve capital growth. The Declaration of Trust permits the Trustees to issue interests in the Portfolio. The following is a summary of significant accounting policies of the Portfolio. The policies are in conformity with accounting principles generally accepted in the United States. 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 which approximates value. 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 Income -- Dividend income is recorded on the ex-dividend date for dividends received in cash and/or securities. 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. C Expense Reduction -- Investors Bank & Trust Company (IBT) serves as custodian of the Portfolio. Pursuant to the custodian agreement, IBT receives a fee reduced by credits which are determined based on the average daily cash balance the Portfolio maintains with IBT. All significant credit balances used to reduce the Portfolio's custodian fees are reported as a reduction of total expenses in the Statement of Operations. D Income Taxes -- The Portfolio has elected to be treated as a partnership for United States 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. Since one of the Portfolio's investors is a regulated investment company that invests all or substantially all of its assets in the Portfolio, the Portfolio normally must satisfy the applicable source of income and diversification requirements (under the Internal Revenue Code) in order for its investors to satisfy them. The Portfolio will allocate at least annually among its investors each investor's distributive share of the Portfolio's net investment income, net realized capital gains, and any other items of income, gain, loss, deduction or credit. Withholding taxes on foreign dividends and capital gains have been provided for in accordance with the Portfolio's understanding of the applicable countries' tax rules and rates. E 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. 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. 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 changes in foreign currency exchange rates are recorded for financial statement purposes as net realized gains and losses on investments. That portion of unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed. G Forward Foreign Currency Exchange Contracts -- The Portfolio may enter into forward 16 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risk 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 may 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 Other -- Investment transactions are accounted for on a trade date basis. Realized gains and losses are computed based on the specific identification of the securities sold. I Use of Estimates -- The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. J Interim Financial Statements -- The interim financial statements relating to February 28, 2001, and for the six months then ended have not been audited by independent certified public accountants, but in the opinion of the Portfolio's management reflect all 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), an affiliate of Eaton Vance, 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 February 28, 2001 the adviser fee was equivalent to 0.75% (annualized) of average daily net assets. In addition, an administrative 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% (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 ended February 28, 2001 the administrative fee was 0.25% (annualized) of average daily net assets. Except as to Trustees of the Portfolio who are not members of the Adviser or EVM's organization, officers and Trustees receive remuneration for their services to the Portfolio out of such investment adviser and administrative fees. Certain officers and Trustees of the Portfolio are officers of the above organizations. 3 Investment Transactions - ------------------------------------------- Purchases and sales of investments, other than short-term obligations, aggregated $24,073,425 and $26,016,698, respectively, for the six months ended February 28, 2001. 4 Federal Income Tax Basis of Investments - ------------------------------------------- The cost and unrealized appreciation (depreciation) in value of the investments owned at February 28, 2001, as computed on a federal income tax basis, are as follows: AGGREGATE COST $43,652,751 ----------------------------------------------------- Gross unrealized appreciation $ 7,610,777 Gross unrealized depreciation (6,214,659) ----------------------------------------------------- NET UNREALIZED APPRECIATION $ 1,396,118 -----------------------------------------------------
5 Line of Credit - ------------------------------------------- The Portfolio participates with other portfolios and funds managed by EVM and its affiliates in a $150 million unsecured line of credit agreement with a group of banks. The Portfolio may temporarily borrow from the line of credit to satisfy redemption requests or settle investment transactions. Interest is charged to each participating portfolio or fund based on its borrowings at an amount above the Eurodollar rate or Federal Funds rate. In addition, a fee computed at an annual rate of 0.10% on the daily unused portion of the line of credit is allocated among the participating portfolios and funds at the end of each quarter. At February 28, 2001, the Portfolio had a balance outstanding pursuant to this line of credit of $1,700,000. The Portfolio did not have any significant borrowings or allocated fees during the six months ended February 28, 2001. 17 ASIAN SMALL COMPANIES PORTFOLIO AS OF FEBRUARY 28, 2001 NOTES TO FINANCIAL STATEMENTS (UNAUDITED) CONT'D 6 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 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. 7 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 forward foreign currency exchange contracts and 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. At February 28, 2001 there were no outstanding obligations under these financial instruments. 18 EATON VANCE ASIAN SMALL COMPANIES FUND AS OF FEBRUARY 28, 2001 INVESTMENT MANAGEMENT EATON VANCE ASIAN SMALL COMPANIES FUND Officers James B. Hawkes President and Trustee Thomas E. Faust, Jr. Vice President James L. O'Connor Treasurer Alan R. Dynner Secretary Trustees Jessica M. Bibliowicz President and Chief Executive Officer, National Financial Partners Donald R. Dwight President, Dwight Partners, Inc. Samuel L. Hayes, III Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University Graduate School of Business Administration Norton H. Reamer Chairman and Chief Operating Officer, Hellman, Jordan Management Co., Inc. President, Jordan Simmons Capital LLC and Unicorn Corporation Lynn A. Stout Professor of Law, Georgetown University Law Center Jack L. Treynor Investment Adviser and Consultant ASIAN SMALL COMPANIES PORTFOLIO Officers Hon. Robert Lloyd George President and Trustee James B. Hawkes Vice President and Trustee Zaheer Sitabkhan Vice President and Portfolio Manager William Walter Raleigh Kerr Vice President and Assistant Treasurer James L. O'Connor Vice President and Treasurer Alan R. Dynner Secretary Trustees Hon. Edward K.Y. Chen President of Lingnan College, University of Hong Kong Donald R. Dwight President, Dwight Partners, Inc. Samuel L. Hayes, III Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University Graduate School of Business Administration Norton H. Reamer Chairman and Chief Operating Officer, Hellman, Jordan Management Co., Inc. President, Jordan Simmons Capital LLC and Unicorn Corporation Lynn A. Stout Professor of Law, Georgetown University Law Center Jack L. Treynor Investment Adviser and Consultant 19 SPONSOR AND MANAGER OF EATON VANCE ASIAN SMALL COMPANIES FUND AND ADMINISTRATOR OF ASIAN SMALL COMPANIES PORTFOLIO Eaton Vance Management The Eaton Vance Building 255 State Street Boston, MA 02109 ADVISER OF ASIAN SMALL COMPANIES PORTFOLIO LLOYD GEORGE INVESTMENT MANAGEMENT (BERMUDA) LIMITED 3808 One Exchange Square Central, Hong Kong PRINCIPAL UNDERWRITER EATON VANCE DISTRIBUTORS, INC. The Eaton Vance Building 255 State Street Boston, MA 02109 (617) 482-8260 CUSTODIAN INVESTORS BANK & TRUST COMPANY 200 Clarendon Street Boston, MA 02116 TRANSFER AGENT PFPC, INC. Attn: Eaton Vance Funds P.O. Box 9653 Providence, RI 02940-9653 (800) 262-1122 EATON VANCE ASIAN SMALL COMPANIES FUND THE EATON VANCE BUILDING 255 STATE STREET BOSTON, MA 02109 - -------------------------------------------------------------------------------- This report must be preceded or accompanied by a current prospectus which contains more complete information on the Fund, including its sales charges and expenses. Please read the prospectus carefully before you invest or send money. - -------------------------------------------------------------------------------- 405-4/01 ASSRC -----END PRIVACY-ENHANCED MESSAGE-----