<PAGE>
MARTIN CURRIE BUSINESS TRUST
GLOBAL GROWTH FUND
SEMI-ANNUAL REPORT
OCTOBER 31, 1997
(UNAUDITED)
<PAGE>
MCBT GLOBAL GROWTH FUND
- --------------------------------------------------------------------------------
PROFILE AT OCTOBER 31, 1997 (Unaudited)
OBJECTIVE Long-term capital appreciation through active management of a
diversified portfolio of global equities.
LAUNCH DATE June 15, 1994
FUND SIZE $61.2m
PERFORMANCE Total return from May 1, 1997 through October 31, 1997
- MCBT - Global Growth Fund (excluding all
transaction fees) +8.1%
- MCBT - Global Growth Fund (including all
transaction fees) +6.5%
- The Morgan Stanley Capital International
World Index +8.8%
Annualized total return from June 15, 1994 through
October 31, 1997
- MCBT - Global Growth Fund (excluding all
transaction fees) +11.5%
- MCBT - Global Growth Fund (including all
transaction fees) +11.0%
- The Morgan Stanley Capital International
World Index +14.8%
(from July 1, 1994 through October 31, 1997)
PORTFOLIO Led by the US, most markets rose over the six months -
COMMENTS despite the fallout from Asia. We have had an underweight
position in US equities throughout the period, and so have
under performed the MSCI World Index. It is up 8.8%, and
this fund 8.1%.
In the US, the benign overall environment continues. It has
been our belief for some time that corporate earnings would
eventually disappoint. But a positive outlook for bonds
will continue to support the equity market around present
levels - even if further gains seem less likely. We remain
underweight because we believe that opportunities elsewhere
offer better potential returns.
Compounded by a weak currency, JAPAN's difficulties have been
well publicised, and its position has deteriorated since the
end of the reporting period. We have reduced our weighting.
Our portfolio continues to concentrate on the export
orientated manufacturing sector, which has outperformed
substantially.
We have continued to add to our positions in CONTINENTAL
EUROPE. Restructuring and the enhancement of shareholder
value have been persistent themes and our portfolio reflects
this. We have been overweight to the UK, where a
strengthening currency and a stable economic background have
helped stock markets.
In ASIA, we have been heavy sellers, and now concentrate on
China, India and Australia. We sold out of Malaysia in
August - missing the worst of the falls. We will be looking
for an opportunity to return selectively to the region,
focusing on globally competitive companies.
1
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MCBT GLOBAL GROWTH FUND
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PROFILE AT OCTOBER 31, 1997 (Unaudited)
Outlook
-------
We are confident that selected markets will make good
progress over the next year. Asia faces considerable
structural problems which will take some time to correct.
We will be looking for an opportunity to return selectively
to the region. Meanwhile, we will be concentrating on
opportunities in the mature markets. Elsewhere, it is not
too early to try to identify the next 'nifty fifty'. That
is a process we have begun.
INVESTMENT James Fairweather is Chief Investment Officer. All funds
MANAGER PROFILE are managed on a team basis with a named director heading
each team.
James spent three years with Montague Loebl Stanley & Co. as
an institutional sales and economic assistant. Moved into
Eurobond sales for 18 months with Kleinwort Benson before
joining Martin Currie in 1984. He has worked in our Far
East, North American and Continental European investment
teams. Appointed director in 1987, he became head of our
Continental Europe team in 1992. A member of the asset
allocation committee, James was appointed Deputy Chief
Investment Officer in 1994 with overall responsibility for
our investments in emerging markets. He was promoted to
Chief Investment Officer in 1997.
The Global Asset Allocation Committee sets limits for
regional allocation. The managers of the funds are
responsible for the selection of countries within those
regions, sectors, and stocks.
2
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MCBT GLOBAL GROWTH FUND
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PROFILE AT OCTOBER 31, 1997 (Unaudited)
[CHART]
ASSET ALLOCATION
(% of net assets)
[PIE CHART]
/ / Europe 43%
/ / Japan 11%
/ / Latin America 5%
/ / North America 30%
/ / Pacific Basin 4%
/ / Other Areas 1%
/ / ST Investment 3%
/ / Other Net Assets 3%
LARGEST HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
NORTH AMERICA
MedPartners (United States) 1.7
Schlumberger (United States) 1.7
CalEnergy (United States) 1.6
EUROPE
Credit Suisse Group (Switzerland) 1.6
Novartis (Switzerland) 1.6
Veba (Germany) 1.4
JAPAN
Rohm 1.1
LATIN AMERICA
Compania Anonima Nacional
Telefonos, ADR, Cl D (Venezuela) 0.8
PACIFIC BASIN
Telekomunikasi Indonesia (Indonesia) 0.5
3
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MCBT GLOBAL GROWTH FUND
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 1997 (Unaudited)
SHARES VALUE
------- ----------
COMMON AND PREFERRED STOCKS, CONVERTIBLE BONDS,
EXCHANGEABLE NOTES, AND WARRANTS - 94.1%
EUROPE - 42.7%
AUSTRIA - 0.6%
VA TECHNOLOGIE 2,100 $ 372,630
----------
TOTAL AUSTRIA - (COST $290,145) 372,630
----------
BELGIUM - 1.0%
GENERALE DE BANQUE 1,500 613,560
----------
TOTAL BELGIUM - (COST $596,477) 613,560
----------
DENMARK - 1.2%
NOVO NORDISK, CL B 6,500 704,150
----------
TOTAL DENMARK - (COST $626,202) 704,150
----------
FRANCE - 4.9%
AIR LIQUIDE 3,340 518,234
AXA 9,209 630,617
CIE GENERALE DES EAUX 5,117 595,242
RHONE-POULENC, CL A 17,800 776,093
SCHNEIDER 9,340 498,716
----------
TOTAL FRANCE - (COST $2,681,259) 3,018,902
----------
GERMANY - 8.1%
BAYERISCHE MOTOREN WERKE 800 578,721
DEUTSCHE BANK 11,600 759,067
HOECHST 17,400 662,165
MANNESMANN 1,600 675,716
PREUSSAG AG 2,000 518,622
SGL CARBON 3,600 505,395
VEBA 15,256 850,506
VOLKSWAGEN 700 413,795
----------
TOTAL GERMANY - (COST $4,228,750) 4,963,987
----------
ITALY - 0.8%
ENI 87,619 492,695
----------
TOTAL ITALY - (COST $427,968) 492,695
----------
NETHERLANDS - 2.6%
GUCCI GROEP N.V. 8,000 291,000
INTERNATIONALE NEDERLANDEN GROEP N.V. 13,250 556,206
PHILIPS ELECTRONICS N.V. 9,400 735,926
----------
TOTAL NETHERLANDS - (COST $1,179,021) 1,583,132
----------
SPAIN - 2.0%
BANCO DE SANTANDER 21,100 591,067
TELEFONICA DE ESPANA 24,000 654,980
----------
TOTAL SPAIN - (COST $857,005) 1,246,047
----------
See notes to financial statements.
4
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MCBT GLOBAL GROWTH FUND
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 1997 (Unaudited)
SHARES VALUE
------- ----------
EUROPE - CONTINUED
SWEDEN - 0.7%
INCENTIVE AB 5,000 $ 437,923
----------
TOTAL SWEDEN - (COST $458,993) 437,923
----------
SWITZERLAND - 4.6%
CREDIT SUISSE GROUP 7,100 1,000,161
NOVARTIS 635 994,505
ROCHE HOLDINGS 90 790,894
----------
TOTAL SWITZERLAND - (COST $2,304,132) 2,785,560
----------
UNITED KINGDOM - 16.2%
CABLE & WIRELESS 66,000 527,082
GENERAL ELECTRIC 55,000 351,342
GKN 28,000 628,083
GLAXO WELLCOME 30,000 643,250
GRANADA 35,000 482,689
LADBROKE 109,000 488,276
LASMO 89,017 410,708
LLOYDS TSB 57,000 712,457
MARKS & SPENCER 59,000 598,873
MCKECHNIE 22,000 185,660
NATIONAL WESTMINSTER BANCORP 33,000 474,485
NFC 131,000 296,710
RECKITT & COLMAN 40,250 617,557
ROYAL BANK OF SCOTLAND GROUP 52,000 551,376
SAFEWAY 53,496 348,466
SCOTTISH POWER 70,000 523,794
SHELL TRANSPORT & TRADING 87,000 617,064
SMITHS INDUSTRIES 31,314 454,446
UNILEVER 68,000 506,546
WASSALL 35,357 199,909
WOLSELEY 34,000 283,364
----------
TOTAL UNITED KINGDOM - (COST $7,151,456) 9,902,137
----------
TOTAL EUROPE - (COST $20,801,408) 26,120,723
----------
JAPAN - 11.1%
ASAHI DIAMOND 309 1,797
CANON 23,000 558,039
DDI 25 83,506
EIDEN SAKAKIYA 10,000 55,256
HITACHI 49,000 376,610
HONDA MOTOR 11,000 370,170
ITO - YOKADO 7,000 347,819
MABUCHI MOTOR 3,000 167,013
MARUI 11,000 185,542
MBL INT'L. FINANCE
(BERMUDA), 3.00%, 11/30/2002 $310,000 (b) 317,905
MITSUBISHI HEAVY INDUSTRIES 59,000 289,730
MITSUI FUDOSAN 16,000 180,806
NAMCO, 4.70%, 09/30/1998 Y 12,000,000 129,622
See notes to financial statements.
5
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MCBT GLOBAL GROWTH FUND
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 1997 (Unaudited)
SHARES VALUE
------- ----------
JAPAN - CONTINUED
NIPPON EXPRESS 22,000 $118,455
NITTO DENKO, 2.20%, 03/31/1999 Y 21,000,000 202,410
RISO KAGAKU 2,000 117,823
ROHM 7,000 692,148
SAKURA FINANCE Y 24,000,000 188,211
SECOM COMPANY LIMITED 4,000 258,579
SHIMACHU 6,000 127,628
SHIN - ETSU CHEMICAL 8,850 216,194
SONY 6,600 547,852
SUMITOMO ELECTRIC 16,000 211,384
TAISHO PHARMACEUTICAL 8,000 204,736
TOPPAN PRINTING 22,000 276,028
TOYOTA MOTOR CORPORATION 8,000 222,684
YAMANOUCHI PHARMACEUTICAL 13,000 319,734
----------
TOTAL JAPAN - (COST $6,900,261) 6,767,681
----------
LATIN AMERICA - 4.9%
ARGENTINA - 0.5%
COMPANIA PEREZ COMPANC 28,478 178,380
TELEFONICA DE ARGENTINA, ADR 3,500 98,438
----------
TOTAL ARGENTINA - (COST $212,203) 276,818
----------
BRAZIL - 1.3%
ELETROBRAS, ADR 13,600 299,200
PETROBRAS, ADR 13,000 247,000
TELEBRAS, ADR 2,650 268,975
----------
TOTAL BRAZIL - (COST $735,297) 815,175
----------
CHILE - 0.5%
COMPANIA DE TELEFONOS DE CHILE, ADR 11,000 305,250
----------
TOTAL CHILE - (COST $318,117) 305,250
----------
MEXICO - 1.8%
CIFRA SA DE CV 150,000 259,392
CIFRA SA DE CV, CL B 22,386 44,532
CORPORACION INDUSTRIAL ALFA, CL A 42,292 308,678
EMPRESAS ICA SOCIEDAD, ADR 7,200 95,850
GRUPO FINANCIERO BANAMEX, CL B * 128,000 253,405
TELEFONOS DE MEXICO, ADR 3,400 147,050
----------
TOTAL MEXICO - (COST $1,074,472) 1,108,907
----------
VENEZUELA - 0.8%
COMPANIA ANONIMA NACIONAL
TELEFONOS, ADR, CL D * 11,000 481,250
----------
TOTAL VENEZUELA - (COST $253,000) 481,250
----------
TOTAL LATIN AMERICA - (COST $2,593,089) 2,987,400
----------
See notes to financial statements.
6
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MCBT GLOBAL GROWTH FUND
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 1997 (Unaudited)
SHARES VALUE
------- ----------
NORTH AMERICA - 30.3%
CANADA - 1.3%
MACMILLAN BLOEDEL LIMITED 63,072 $ 794,358
----------
TOTAL CANADA - (COST $836,039) 794,358
----------
UNITED STATES - 29.0%
ALLIED SIGNAL 11,600 417,600
ARCHER - DANIELS - MIDLAND 42,502 945,669
BRISTOL - MYERS SQUIBB 4,200 368,550
CALENERGY * 28,500 976,125
COLGATE - PALMOLIVE 7,200 466,200
COMMONWEALTH ENERGY SYSTEMS 30,000 858,750
DILLARD DEPARTMENT STORES, CL A 13,600 521,900
EASTMAN KODAK 8,300 496,963
EQUIFAX 21,000 652,312
FREEPORT MCMORAN COPPER & GOLD, CL A 31,136 718,074
FREEPORT MCMORAN, INC. 21,133 721,164
HS RESOURCES * 28,000 493,500
INTEL 8,100 623,700
LOUISIANA PACIFIC 28,000 588,000
MARSH & MCLENNAN 12,200 866,200
MEDPARTNERS * 41,436 1,054,029
PHILIP MORRIS 8,450 334,831
SCHLUMBERGER 12,000 1,050,000
SEARS, ROEBUCK 9,500 397,813
SOUTHERN COMPANY 29,000 665,187
TEXACO 6,000 341,625
TRANSOCEAN OFFSHORE 16,000 864,000
UNION PACIFIC 12,400 759,500
UNION PACIFIC RESOURCES 37,207 916,222
WALT DISNEY 8,900 732,025
WESTINGHOUSE ELECTRIC 35,590 940,911
----------
TOTAL UNITED STATES - (COST $13,258,585) 17,770,850
----------
TOTAL NORTH AMERICA - (COST $14,094,624) 18,565,208
----------
OTHER AREAS - 1.2%
INDIA - 1.2%
HIMALAYAN FUND 29,031 319,341
SCHRODER INDIA FUND * 18,000 195,849
VIDESH SANCHAR NIGAM LIMITED, GDR (a)* 16,000 220,800
----------
TOTAL INDIA - (COST $941,407) 735,990
----------
TOTAL OTHER AREAS - (COST $941,407) 735,990
----------
See notes to financial statements.
7
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MCBT GLOBAL GROWTH FUND
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 1997 (Unaudited)
SHARES VALUE
------- ----------
PACIFIC BASIN - 3.9%
AUSTRALIA - 1.2%
JOHN FAIRFAX HOLDINGS LIMITED 80,000 $ 176,656
LEND LEASE CORPORATION 10,500 215,026
MAYNE NICKLESS LIMITED 38,000 173,703
NEWS CORPORATION 44,000 195,250
----------
TOTAL AUSTRALIA - (COST $789,070) 760,635
----------
HONG KONG - 1.6%
AMOY PROPERTIES 2,500 2,150
CHEUNG KONG HOLDINGS 15,000 104,281
CHINA LIGHT & POWER 28,000 147,397
CITIC PACIFIC 29,000 138,783
FIRST PACIFIC COMPANY 121,000 76,295
HSBC HOLDINGS 3,454 78,180
HUTCHISON WHAMPOA 22,000 152,235
NEW WORLD DEVELOPMENT LIMITED 44,000 154,795
SWIRE PACIFIC 19,500 104,165
----------
TOTAL HONG KONG - (COST $1,053,119) 958,281
----------
INDONESIA - 0.7%
BANK INTERNATIONAL INDONESIA 370,000 79,542
TELEKOMUNIKASI INDONESIA 352,000 327,101
----------
TOTAL INDONESIA - (COST $794,360) 406,643
----------
PHILIPPINES - 0.2%
BELLE CORPORATION * 1,300,000 117,349
BELLE CORPORATION, WARRANTS * 260,000 32
----------
TOTAL PHILIPPINES - (COST $370,038) 117,381
----------
SINGAPORE - 0.2%
DEVELOPMENT BANK OF SINGAPORE 17,000 158,667
----------
TOTAL SINGAPORE - (COST $164,883) 158,667
----------
TOTAL PACIFIC BASIN - (COST $3,171,470) 2,401,607
----------
TOTAL COMMON AND PREFERRED STOCKS, CONVERTIBLE BONDS,
EXCHANGEABLE NOTES, AND WARRANTS - (COST $48,502,259) + 57,578,609
----------
PRINCIPAL
AMOUNT
---------
SHORT TERM INVESTMENT - 3.1%
STATE STREET BANK AND TRUST REPURCHASE AGREEMENT,
5.15%, 11/03/1997 (c) $1,886,000 1,886,000
----------
TOTAL SHORT TERM INVESTMENT - (COST $1,886,000) 1,886,000
----------
See notes to financial statements.
8
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MCBT GLOBAL GROWTH FUND
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SCHEDULE OF INVESTMENTS
OCTOBER 31, 1997 (Unaudited)
VALUE
----------
TOTAL INVESTMENTS - (COST $50,388,259) - 97.2% $59,464,609
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - 2.8% 1,735,956
-----------
NET ASSETS - 100.0% $61,200,565
-----------
-----------
* Non-income producing security.
Y Reflected at par value and denominated in Japanese yen.
(a) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $220,800 or 0.4% of net
assets.
(b) Reflected at par value and denominated in U.S. dollars.
(c) The repurchase agreement, dated 10/31/97, $1,886,000 par due 11/03/97, is
collateralized by United States Treasury Bonds, 12.75%, due 11/15/10, with
a market value of $1,924,556.
+ Percentages of long term investments are presented in the portfolio by
country. Percentages of long term investments by industry are as follows:
Aerospace 1.4%, Apparel 0.5% Automobiles 2.6%, Banks 9.6%, Chemicals 4.4%,
Commercial Services 0.3%, Conglomerates 1.8%, Construction & Building
Materials 0.5%, Construction & Mining Equipment 0.2%, Diversified 2.1%,
Drugs & Health Care 7.0%, Electric Utilities 7.1%, Electrical Equipment
3.6%, Electronics 4.9%, Engineering 0.6%, Financial Services 2.1%, Food &
Beverages 2.4%, Hotels & Restaurants 0.8%, Household Products 1.8%,
Industrial Machinery 2.9%, Insurance 2.9%, Investment Companies 0.8%,
Leisure Time 2.0%, Manufacturing 0.3%, Mining 2.3%, Miscellaneous 0.8%,
Newspapers 0.3%, Oil & Gas 5.7%, Paper 2.3%, Petroleum Services 2.0%,
Photography 1.7%, Publishing 0.8%, Railroads & Equipment 2.7%, Real Estate
1.1%, Retail Trade 4.7%, Steel 0.8%, Telecommunications 3.5%, Telephone
1.6%, Tobacco 0.5%, Transportation 0.7%.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
See notes to financial statements.
9
<PAGE>
MCBT GLOBAL GROWTH FUND
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STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
ASSETS
Investments in securities, at value (cost $48,502,259) (Note B) $57,578,609
Investments in repurchase agreements, at value (Note B) 1,886,000
-----------
Total Investments 59,464,609
Cash 973
Foreign currency, at value (cost $499,457) (Note B) 503,517
Receivable for investments sold 2,430,508
Dividend and interest receivable 100,753
Foreign tax reclaims receivable 41,922
Prepaid insurance 2,437
Deferred organization expenses (Note B) 4,124
-----------
TOTAL ASSETS 62,548,843
-----------
LIABILITIES
Payable for investments purchased 1,203,636
Payable for currency purchased 426
Management fee payable (Note C) 110,213
Administration fee payable (Note C) 4,775
Trustees fees payable (Note C) 989
Accrued expenses and other liabilities 28,239
-----------
TOTAL LIABILITIES 1,348,278
-----------
TOTAL NET ASSETS $61,200,565
-----------
-----------
COMPOSITION OF NET ASSETS:
Paid-in-capital $46,827,646
Undistributed net investment income 497,350
Accumulated net realized gain on investment and foreign currency transactions 4,793,062
Net unrealized appreciation on investment and foreign currency transactions 9,082,507
-----------
TOTAL NET ASSETS $61,200,565
-----------
-----------
NET ASSET VALUE PER SHARE $ 13.48
($61,200,565 / 4,540,616 shares of beneficial interest outstanding) -----------
-----------
</TABLE>
See notes to financial statements.
10
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MCBT GLOBAL GROWTH FUND
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STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
<S> <C>
INVESTMENT INCOME
Interest income $ 46,770
Dividend income 673,278
Foreign taxes withheld (61,297)
----------
TOTAL INVESTMENT INCOME 658,751
----------
EXPENSES
Management fee (Note C) 217,958
Custodian fee 54,731
Administration fee (Note C) 27,725
Audit fee 12,602
Legal fees 3,277
Transfer agent fee 3,217
Trustees fees (Note C) 1,000
Amortization of deferred organization expenses 1,284
Miscellaneous expenses 6,004
Fees and expenses waived by the investment manager (Note C) (13,045)
----------
TOTAL EXPENSES 314,753
----------
NET INVESTMENT INCOME 343,998
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments 4,431,987
Net realized loss on foreign currency transactions (32,134)
Net unrealized appreciation (depreciation) on:
Investments (187,870)
Foreign currency transactions 10,119
----------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 4,222,102
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $4,566,100
----------
----------
</TABLE>
See notes to financial statements.
11
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MCBT GLOBAL GROWTH FUND
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STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Six Months
Ended Year
October 31, 1997 Ended
(Unaudited) April 30, 1997
----------- --------------
<S> <C> <C>
NET ASSETS at beginning of period $56,634,465 $52,887,926
----------- -----------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income 343,998 472,075
Net realized gain on investment transactions 4,431,987 1,072,718
Net realized gain (loss) on foreign currency transactions (32,134) 475,540
Net unrealized appreciation (depreciation) on:
Investments (187,870) 2,574,635
Foreign currency transactions 10,119 95,815
----------- -----------
Net increase in net assets from operations 4,566,100 4,690,783
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income 0 (1,000,298)
In excess of net investment income 0 (404,226)
Net realized gains 0 (645,365)
----------- -----------
Total distributions 0 (2,049,889)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Reinvestment of dividends and distributions to shareholders 0 1,355,645
Cost of shares repurchased 0 (251,875)
Paid in capital from subscription and redemption fees 0 1,875
----------- -----------
Total increase in net assets from capital share transactions 0 1,105,645
----------- -----------
NET INCREASE IN NET ASSETS 4,566,100 3,746,539
----------- -----------
NET ASSETS at end of period (includes undistributed net investment $61,200,565 $56,634,465
income of $497,350 and $153,352, respectively) ----------- -----------
----------- -----------
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares issued in reinvestment of distributions to shareholders 0 111,576
Less shares repurchased 0 (20,511)
----------- -----------
Net share transactions 0 91,065
----------- -----------
----------- -----------
</TABLE>
See notes to financial statements.
12
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MCBT GLOBAL GROWTH FUND
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FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
Six Months
Ended Year Year June 15, 1994 *
October 31, 1997 Ended Ended through
(Unaudited) April 30, 1997 April 30, 1996 April 30, 1995
-------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $12.470 $11.890 $ 9.990 $10.000
Net investment income 0.076 0.141 0.279 0.079
Net realized and unrealized gain on investment
and foreign currency transactions 0.934 0.902 1.809 0.033
------- ------- ------- -------
Total from investment operations 1.010 1.043 2.088 0.112
------- ------- ------- -------
Less distributions:
Net investment income 0.000 (0.226) (0.186) (0.040)
In excess of net investment income 0.000 (0.091) (0.017) 0.000
Net realized gains 0.000 (0.146) 0.000 (0.082)
------- ------- ------- -------
Total distributions 0.000 (0.463) (0.203) (0.122)
------- ------- ------- -------
Paid in capital from subscription and
redemption fees (Note B) 0.000 0.000 0.015 0.000
------- ------- ------- -------
Net asset value, end of period $13.480 $12.470 $11.890 $ 9.990
------- ------- ------- -------
------- ------- ------- -------
TOTAL INVESTMENT RETURN (1) (2) 8.10% 8.87% 21.17% 1.18%
------- ------- ------- -------
------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $61,200,565 $56,634,465 $52,887,926 $37,259,376
Operating expenses, net, to average
net assets (Note C) 1.00% (3) 1.00% 1.00% 1.00% (3)
Operating expenses, gross, to average
net assets (Note C) 1.04% (3) 1.10% 1.27% 1.25% (3)
Net investment income to average net assets 1.09% (3) 0.88% 1.40% 0.94% (3)
Portfolio turnover rate 29% 40% 38% 44%
Average commission rate per share (4) $ 0.0173 $ 0.0227 $ 0.0335 N/A
Per share amount of fees waived (Note C) $ 0.003 $ 0.017 $ 0.053 $ 0.022
</TABLE>
- --------------------------------------------------------------------------------
* Commencement of investment operations.
(1) Total return at net asset value assuming all distributions reinvested and
no purchase premiums or redemption fees.
Total return would have been lower had certain expenses not been waived.
(2) Periods less than one year are not annualized.
(3) Annualized.
(4) The average commission rate paid is applicable for Funds that invest
greater than 10% of average net assets in equity transactions on which
commissions are charged. This disclosure is required for fiscal periods
beginning on or after September 1, 1995.
See notes to financial statements.
13
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MCBT GLOBAL GROWTH FUND
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NOTES TO FINANCIAL STATEMENTS
NOTE A - ORGANIZATION
Martin Currie Business Trust ("MCBT") (the "Trust") is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an open-end
management investment company organized as a Massachusetts business trust on May
20, 1994. The Trust offers seven funds which have differing investment
objectives and policies: Global Growth Fund, Opportunistic EAFE Fund, Global
Emerging Markets Fund, Japan Small Companies Fund, Emerging Americas Fund,
Emerging Asia Fund and the EMEA Fund, (the "Funds"). The MCBT Global Growth
Fund (the "Fund") commenced investment operations on June 15, 1994. The Fund's
Declaration of Trust permits the Board of Trustees to issue an unlimited number
of full and fractional shares of beneficial interest, without par value.
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
VALUATION OF INVESTMENTS - The Fund's portfolio securities traded on a
securities exchange are valued at the last quoted sale price, or, if no sale
occurs, at the mean of the most recent quoted bid and asked prices. Unlisted
securities for which market quotations are readily available are valued at the
mean of the most recent quoted bid and asked prices. Prices for securities
which are primarily traded in foreign markets are furnished by quotation
services expressed in the local currency's value and are translated into U.S.
dollars at the current rate of exchange. Short-term securities and debt
securities with a remaining maturity of 60 days or less are valued at their
amortized cost. Options and futures contracts are valued at the last sale price
on the market where such options or futures contract is principally traded.
Options traded over-the-counter are valued based upon prices provided by market
makers in such securities or dealers in such currencies. Securities for which
current market quotations are unavailable or for which quotations are not deemed
by the investment adviser to be representative of market values are valued at
fair value as determined in good faith by the Trustees of the Fund, or by
persons acting pursuant to procedures established by the Trustees.
REPURCHASE AGREEMENTS - In connection with transactions in repurchase
agreements, the Fund's custodian takes possession of the underlying collateral
securities, the value or market price of which is at least equal to the
principal amount, including interest, of the repurchase transaction. To the
extent that any repurchase transaction exceeds one business day, the value of
the collateral is marked-to-market on a daily basis to ensure the adequacy of
the collateral. In the event of default of the obligation to repurchase, the
Fund has the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. Under certain circumstances, in the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral or proceeds may be subject to legal proceedings that
could delay or increase the cost of such realization or retention.
INVESTMENT TRANSACTIONS - Investment security transactions are recorded on the
date of purchase or sale. Realized gains and losses from security transactions
are determined on the basis of identified cost.
INVESTMENT INCOME - Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
FOREIGN CURRENCY TRANSLATIONS - The records of the Fund are maintained in U.S.
dollars. Foreign currency amounts are translated into U.S. dollars at a current
rate of exchange of such currency to determine the value of investments, other
assets and liabilities on the date of any determination of net asset value of
the Fund. Purchases and sales of securities and income and expenses are
converted at the prevailing rate of exchange on the respective dates of such
transactions.
The Fund may realize currency gains or losses between the trade and settlement
dates on security transactions. To minimize such currency gains or losses, the
Fund may enter into forward foreign currency contracts.
The net U.S. dollar value of foreign currency underlying all contractual
commitments held by the Fund on each day and the resulting net unrealized
appreciation, depreciation and related net receivable or payable amounts are
determined by using forward currency exchange rates supplied by a quotation
service.
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MCBT GLOBAL GROWTH FUND
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NOTES TO FINANCIAL STATEMENTS (continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - Reported net realized gains and
losses on foreign currency transactions represent net gains and losses from
sales and maturities of forward currency contracts, disposition of foreign
currencies, currency gains and losses realized between the trade and settlement
dates on security transactions, and the difference between the amount of net
investment income accrued and the U.S. dollar amount actually received. The
effects of changes in foreign currency exchange rates on investments in
securities are not segregated in the Statement of Operations from the effects of
changes in market prices of those securities, and are included with the net
realized and unrealized gain or loss on investment securities.
FORWARD FOREIGN CURRENCY CONTRACTS - A forward foreign currency contract
("Forward") is an agreement between two parties to buy and sell a currency at a
set price on a future date. The market value of the Forward fluctuates with
changes in currency exchange rates. The Forward is marked-to-market daily and
the change in the market value is recorded by the Fund as an unrealized gain or
loss. When the Forward is closed, the Fund records a realized gain or loss
equal to the difference between the value at the time it was opened and the
value at the time it was closed. The Fund could be exposed to risk if a
counterparty is unable to meet the terms of the contract or if the value of the
currency changes unfavorably. The Fund may enter into Forwards in connection
with planned purchases and sales of securities, to hedge specific receivables or
payables against changes in future exchange rates or to hedge the U.S. dollar
value of portfolio securities denominated in a foreign currency.
EXPENSES - Expenses directly attributable to the Fund are charged to the Fund.
Expenses not directly attributable to a particular Fund are either split evenly
among the affected Funds, allocated on the basis of relative average net assets,
or otherwise allocated among the Funds as the Board of Trustees may direct or
approve. Certain costs incurred in connection with the organization of the
Trust and each Fund have been deferred and are being amortized on a straight
line basis over a five year period starting on each Fund's commencement of
operations.
DISTRIBUTIONS TO SHAREHOLDERS - The Fund declares and distributes dividends from
net investment income, if any, and distributes its net realized capital gains,
if any, at least annually. All distributions will be reinvested in shares of
the Fund at the net asset value unless the shareholder elects in the
subscription agreement either to receive cash in respect of all distributions or
to receive cash with respect to distributions of income and to reinvest in
shares of the Fund with respect to distributions of realized capital gains.
Income and capital gain distributions are determined in accordance with income
tax regulations which may differ from generally accepted accounting principles.
These differences are primarily due to differing treatments for passive foreign
investment companies (PFIC's), foreign currency transactions, losses deferred
due to wash sales, post October 31 losses and excise tax regulations. Permanent
book and tax differences relating to shareholder distributions will result in
reclassifications to paid-in-capital. Distributions are recorded on the
ex-dividend date.
PURCHASES AND REDEMPTIONS OF FUND SHARES - There is a purchase premium for cash
investments into the Fund of 0.75% of the amount invested and a redemption fee
on cash redemptions of 0.75% of the amount redeemed. All purchase premiums and
redemption fees are paid to and retained by the Fund and are recorded as
paid-in-capital by the Fund. These fees are intended to offset brokerage and
transaction costs arising in connection with the purchase and redemption. The
purchase and redemption fees may be waived by the Manager, however, if these
brokerage and transaction costs are minimal or in other circumstances at the
Manager's discretion. For the six months ended October 31, 1997, there were no
purchase premiums or redemption fees collected.
INCOME TAXES - Each Fund of the Trust is treated as a separate entity for U.S.
federal income tax purposes. Each Fund intends to qualify each year as a
regulated investment company under Subchapter M of the Internal Revenue Code of
1986, as amended. By so qualifying, the Funds will not be subject to federal
income taxes to the extent that they distribute substantially all of their
taxable income, including realized capital gains, if any, for the fiscal year.
In addition, by distributing substantially all of their net investment income,
realized capital gains and certain other amounts, if any, during the calendar
year, the Funds will not be subject to a federal excise tax.
The Fund may be subject to taxes imposed by countries in which it invests. Such
taxes are generally based on income and/or capital gains earned or repatriated.
Taxes are accrued and applied to net investment income, net realized gains and
unrealized appreciation as such income and/or gains are earned.
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MCBT GLOBAL GROWTH FUND
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NOTES TO FINANCIAL STATEMENTS (continued)
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 and
income and expenses at the date of the financial statements. Actual results
could differ from these estimates.
NOTE C - AGREEMENTS AND FEES
The Fund has entered into a Management Contract with Martin Currie Inc. (the
"Investment Manager"), a wholly owned subsidiary of Martin Currie Ltd. Under
the Management Contract, the Fund pays the Investment Manager a quarterly
management fee at the annual rate of 0.70% of the Fund's average net assets.
The Investment Manager has voluntarily undertaken to reduce its fee until
further notice to the extent necessary to limit the Fund's annual expenses
(including the management fee but excluding brokerage commissions, transfer
taxes, and extraordinary expenses) to 1.00% of the Fund's average net assets on
an annualized basis. For the six months ended October 31, 1997, the Investment
Manager has waived $13,045 of its fees.
State Street Bank and Trust Company (the "Administrator") serves as
administrator of the Fund. The Administrator performs certain administrative
services for the Fund. The Fund pays the Administrator a fee at the rate of
0.08% of the Fund's average net assets up to $125 million, 0.06% of the next
$125 million, and 0.04% of those assets in excess of $250 million, subject to
certain minimum requirements, plus certain out of pocket costs. State Street
Bank and Trust Company also receives fees and compensation of expenses for
certain custodian and transfer agent services.
Trustees of the Trust who are not interested persons receive aggregate annual
fees of $20,000 ($10,000 per Trustee).
NOTE D - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments, excluding
short-term securities for the six months ended October 31, 1997 were $17,765,718
and $19,570,218, respectively.
The identified cost of investments in securities and repurchase agreements owned
for federal income tax purposes and their respective gross unrealized
appreciation and depreciation at October 31, 1997 were as follows:
IDENTIFIED GROSS UNREALIZED NET UNREALIZED
COST APPRECIATION (DEPRECIATION) APPRECIATION
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$50,388,259 $12,158,322 $(3,081,972) $9,076,350
NOTE E - PRINCIPAL SHAREHOLDERS
As of October 31, 1997, 100% of the Fund's outstanding shares were held by two
shareholders, each holding in excess of 10% of the Fund's outstanding shares.
NOTE F - CONCENTRATION OF RISK
The Fund will invest extensively in foreign securities (i.e., those which are
not listed on a United States securities exchange). Investing in foreign
securities involves risks not typically found in investing in U.S. markets.
These include risks of adverse change in foreign economic, political, regulatory
and other conditions, and changes in currency exchange rates, exchange control
regulations (including currency blockage), expropriation of assets or
nationalization, imposition of withholding taxes on dividend or interest
payments and capital gains, and possible difficulty in obtaining and enforcing
judgments against foreign entities. Furthermore, issuers of foreign securities
are subject to different, and often less comprehensive, accounting, reporting
and disclosure requirements than domestic issuers. The securities of some
foreign companies and foreign securities markets are less liquid and at times
more volatile than securities of comparable U.S. companies and U.S. securities
markets.
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MARTIN CURRIE BUSINESS TRUST
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TRUSTEES AND OFFICERS
C. James P. Dawnay, TRUSTEE AND PRESIDENT *
Simon D. Eccles, TRUSTEE
Patrick R. Wilmerding, TRUSTEE
Colin Winchester, VICE PRESIDENT AND TREASURER
J. Grant Wilson, VICE PRESIDENT
Julian M.C. Livingston, CLERK
* INTERESTED TRUSTEE
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INVESTMENT MANAGER
Martin Currie, Inc.
Saltire Court
20 Castle Terrace
Edinburgh EH1 2ES
Scotland
011-44-131-229-5252
Regulated by IMRO
Registered Investment Adviser with the SEC
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The information contained in this report is intended for general informational
purposes only. This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current Private Placement
Memorandum which contains important information concerning the Fund and its
current offering of shares.
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