<PAGE>
MARTIN CURRIE BUSINESS TRUST
GLOBAL GROWTH FUND
ANNUAL REPORT
APRIL 30, 1998
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1998
OBJECTIVE Long-term capital appreciation through active management of
a diversified portfolio of global equities.
LAUNCH DATE June 15, 1994
FUND SIZE $67.5m
PERFORMANCE Total return from May 1, 1997 through April 30, 1998
- MCBT - Global Growth Fund (excluding
all transaction fees) +22.9%
- MCBT - Global Growth Fund (including
all transaction fees) +21.0%
- The Morgan Stanley Capital International
World Index +29.5%
Annualized total return from June 15, 1994 through
April 30, 1998
- MCBT - Global Growth Fund (excluding
all transaction fees) +13.6%
- MCBT - Global Growth Fund (including
all transaction fees) +13.2%
The graph below represents the annualized total return of
the portfolio including all transaction fees versus the
Morgan Stanley Capital International World Index from
July 1, 1994 through April 30, 1998
- MCBT - Global Growth Fund (excluding
all transaction fees) +14.2%
- MCBT - Global Growth Fund (including
all transaction fees) +13.8%
- The Morgan Stanley Capital International
World Index +18.0%
FUND IG01
7/1/94 (a) 4/30/95 4/30/96 4/30/97 4/30/98
MCBT Global Growth Fund $10,000 $10,120 $12,265 $13,357 $16,412
MSCI World Index $10,000 $11,027 $13,192 $14,582 $18,880
(a) Performance for the benchmark is not available from June 15, 1994
(commencement of investment operations). For that reason, performance is
shown from July 1, 1994.
Performance shown is net of all fees after reimbursement from the Manager.
Returns and net asset values of fund investments will fluctuate, so that an
investor's shares, when redeemed, may be worth more or less than their
original cost. The total returns would have been lower had certain expenses
not been waived during the period shown. Each performance figure including
all transaction fees assumes purchase at the beginning and redemption at the
end of the stated period and is calculated using an offering price which
reflects a transaction fee of 75 basis points on purchase and 75 basis points
on redemption. Transaction fees are paid to the Fund to cover trading costs.
Past performance is not indicative of future performance.
1
<PAGE>
MCBT GLOBAL GROWTH FUND
- -------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1998
PORTFOLIO Led by the US, most western markets rose strongly over
COMMENTS the year - despite the fallout from Asia. We have had
an underweighted position in US equities throughout the
period and, combined with a difficult recent six months
of US stock selection, the fund has underperformed the
MSCI World Index, which was up 29.5%.
In the US, the benign environment for equities remains
intact. While corporate earnings have weakened, a
positive outlook for bonds has continued to support the
equity market. Mutual fund cashflows have remained
buoyant, fuelling a market where corporate activity has
increased. Our portfolio suffered over the final
quarter of 1997 and early January as the energy and
commodity related sectors underperformed in the wake of
the Asian turmoil. We also held Medpartners which
collapsed in January in the face of a profits warning.
We remain underweighted because we believe that
valuations elsewhere offer better potential returns.
Compounded by a weak currency, JAPAN has fallen
further. We have reduced our weighting further. Our
portfolio continues to concentrate on the export
orientated manufacturing sector. This approach has
generally been a positive, apart from the first two
months of this year, when domestic stocks rallied on
expectations of economic recovery. We have increased
the convertible content of the portfolio and have
hedged 50% of yen assets in expectation of further
currency weakness.
We have continued to add to our positions in
CONTINENTAL EUROPE. Restructuring and the enhancement
of shareholder value have been persistent themes.
Additions to the financial sector reflect this. We
have been overweighted to the UK, where a strengthening
currency and a stable economic background have helped
stocks. A general theme of converging bond yields and
increasing domestic equity ownership has fuelled the
strong rises in broader European markets.
In ASIA, we have reduced substantially our position and
now concentrate on CHINA, INDIA, AUSTRALIA and TAIWAN.
While some of the hard hit ASEAN markets rallied in
January and February, recent market and currency
weakness support our defensive approach to the region.
We have no holdings in Indonesia.
OUTLOOK
Looking ahead, the impact of the Asian crisis is likely
to leave markets volatile. However, slowing growth in
the Pacific region may well help restrain the US
economy and reduce pressure on higher interest rates in
the maturer markets of the UK and Europe. Broader
Europe, or "Euroland" as it has been named, will
continue to benefit from corporate restructuring and
lower bond yields. The increasing move to equity
ownership by domestic investors is being fuelled by the
search for higher returns and changing pensions
legislation. The UK market continues to benefit from
good liquidity and robust earnings growth. We remain
cautious on the Pacific region. Defensive stock
selection in Japan - and asset allocation in Asia -
is appropriate in an environment of falling growth
forecasts, currency volatility and financial and
social instability. Smaller markets will remain out
of favour, as capital flows seek safety in maturer
markets and strong currencies.
2
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1998
INVESTMENT James Fairweather is Chief Investment Officer. All
MANAGER PROFILE funds 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.
3
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1998
ASSET ALLOCATION
(% of net assets)
GLOBAL GROWTH IG01
-------------- ----
Europe 45%
Japan 10%
Latin America 2%
Middle East 1%
North America 36%
Pacific Basin 3%
Other Areas 1%
Other Net Assets 2%
----
TOTAL: 100%
LARGEST HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
NORTH AMERICA
Commonwealth Energy Systems (United States) 1.7
Marsh & McLennan (United States) 1.6
Walt Disney (United States) 1.6
EUROPE
Cie Generale des Eaux (France) 1.6
Credit Suisse Group (Switzerland) 1.6
AXA (France) 1.5
JAPAN
Sony 0.9
Rohm 0.8
LATIN AMERICA
Petrobras, ADR (Brazil) 0.3
PACIFIC BASIN
Lend Lease Corporation (Australia) 0.4
4
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
------- ------
<S> <C> <C>
COMMON AND PREFERRED STOCKS, WARRANTS AND
EXCHANGEABLE NOTES - 98.1%
EUROPE - 45.4%
AUSTRIA - 0.4%
VA TECHNOLOGIE 2,100 $ 301,865
---------
TOTAL AUSTRIA - (COST $290,145) 301,865
---------
BELGIUM - 1.0%
GENERALE DE BANQUE 1,200 693,281
---------
TOTAL BELGIUM - (COST $475,594) 693,281
---------
DENMARK - 0.5%
UNIDANMARK 4,200 352,908
---------
TOTAL DENMARK - (COST $317,764) 352,908
---------
FINLAND - 1.1%
NOKIA AB OY * 11,000 739,177
---------
TOTAL FINLAND - (COST $579,369) 739,177
---------
FRANCE - 7.9%
AIR LIQUIDE 3,340 616,769
AXA 8,509 999,394
CIE GENERALE DES EAUX 5,717 1,063,318
ELF AQUITAINE 6,100 800,682
PROMODES 1,200 578,340
RHONE-POULENC, CL A 12,700 621,373
SOCIETE GENERALE 3,000 624,854
---------
TOTAL FRANCE - (COST $3,963,444) 5,304,730
---------
GERMANY - 7.3%
ALLIANZ AG (REGISTERED) 3,000 922,794
ALLIANZ AG 73 22,251
BAYERISCHE MOTOREN WERKE 410 452,370
BAYERISCHE VEREINSBANK 8,400 638,935
DEUTSCHE BANK 8,500 654,119
MANNESMANN 1,060 841,125
PREUSSAG AG 1,700 604,385
VEBA 11,856 783,551
---------
TOTAL GERMANY - (COST $3,608,223) 4,919,530
---------
GREECE - 0.4%
ALPHA CREDIT BANK, GDR 2,400 253,107
---------
TOTAL GREECE - (COST $142,091) 253,107
---------
</TABLE>
See notes to financial statements.
5
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
SHARES VALUE
------ -----
<S> <C> <C>
EUROPE - CONTINUED
ITALY - 3.8%
ENI 87,619 $ 588,380
IMI BANK 43,500 712,169
ISTITUTO NAZIONALE DELLE ASSICURAZIONI 215,000 642,688
TELECOM ITALIA MOBILE * 110,000 627,205
---------
TOTAL ITALY - (COST $2,029,616) 2,570,442
---------
NETHERLANDS - 1.5%
ELSEVIER 41,000 619,029
GUCCI GROUP N.V. 8,000 372,500
---------
TOTAL NETHERLANDS - (COST $1,189,525) 991,529
---------
SPAIN - 1.9%
BANCO CENTRAL HISPANOAMERICANO 16,000 532,633
BANCO DE SANTANDER 14,000 739,987
---------
TOTAL SPAIN - (COST $698,375) 1,272,620
---------
SWEDEN - 2.4%
ASTRA AB 27,500 564,777
INCENTIVE AB 6,300 610,307
NORDBANKEN HOLDING AB 58,700 432,175
---------
TOTAL SWEDEN - (COST $1,467,721) 1,607,259
---------
SWITZERLAND - 3.0%
CREDIT SUISSE GROUP 4,820 1,060,046
NOVARTIS 585 966,878
---------
TOTAL SWITZERLAND - (COST $1,294,551) 2,026,924
---------
UNITED KINGDOM - 14.2%
CABLE & WIRELESS 55,000 630,189
GENERAL ELECTRIC 55,000 455,392
GKN 17,000 491,372
GLAXO WELLCOME 22,000 621,910
LADBROKE 94,000 516,906
LAND SECURITIES 18,000 321,560
LASMO 89,017 391,231
LLOYDS TSB 40,000 599,161
MARKS & SPENCER 49,000 465,955
MCKECHNIE 22,000 183,261
NATIONAL WESTMINSTER BANCORP 27,000 540,600
NFC 92,000 276,230
RECKITT & COLMAN 29,250 589,564
ROYAL BANK OF SCOTLAND GROUP 41,000 633,000
SAFEWAY 53,496 319,006
SCOTTISH POWER 61,000 560,936
SHELL TRANSPORT & TRADING 78,000 580,594
SMITHS INDUSTRIES 27,314 393,146
UNILEVER 57,000 607,340
WASSALL 35,357 184,522
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES/PAR VALUE
---------- -----
<S> <C> <C>
EUROPE - CONTINUED
UNITED KINGDOM - CONTINUED
ZENECA GROUP 5,000 $ 215,444
----------
TOTAL UNITED KINGDOM - (COST $5,912,413) 9,577,319
----------
TOTAL EUROPE - (COST $21,968,831) 30,610,691
----------
JAPAN - 9.9%
ASAHI CHEMICAL 35,000 122,714
CANON 16,000 378,419
FUJI PHOTO FILM 7,000 249,131
HITACHI 35,000 250,982
HONDA MOTOR 12,000 435,243
ITO - YOKADO 8,000 414,085
KAO CORPORATION 17,000 249,849
MABUCHI MOTOR 3,000 173,644
MARUI 14,000 221,097
MBL INT'L. FINANCE (BERMUDA), 3.000%,
EXCHANGEABLE NOTE, 11/30/2002 (b) $ 307,000 315,258
MITSUI FUDOSAN 16,000 146,048
NITTO DENKO, 2.200%,
EXCHANGEABLE NOTE, 03/31/1999 Y 21,000,000 171,535
PROMISE 3,000 152,335
RISO KAGAKU * 2,000 104,428
ROHM 5,000 564,455
SANWA INTERNATIONAL FINANCE, PREFERRED * 30,000,000 220,750
SECOM COMPANY LIMITED 5,000 294,695
SHIMACHU 6,000 108,131
SHIN - ETSU CHEMICAL 14,850 289,504
SONY 7,200 599,003
SUMITOMO ELECTRIC 5,000 59,581
TAISHO PHARMACEUTICAL 10,000 211,576
TOPPAN PRINTING 31,000 368,468
TOYOTA MOTOR CORPORATION 8,000 208,554
YAMANOUCHI PHARMACEUTICAL 15,000 354,768
----------
TOTAL JAPAN - (COST $6,696,650) 6,664,253
----------
LATIN AMERICA - 2.1%
ARGENTINA - 0.2%
YPF SOCIEDAD ANONIMA, ADR 3,800 132,525
----------
TOTAL ARGENTINA - (COST $122,803) 132,525
----------
BRAZIL - 0.9%
ELETROBRAS, ADR 9,400 196,225
PETROBRAS, ADR 9,300 235,987
TELEBRAS, ADR 1,100 133,994
----------
TOTAL BRAZIL - (COST $426,242) 566,206
----------
</TABLE>
See notes to financial statements.
7
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
------ ------
<S> <C> <C>
LATIN AMERICA - Continued
CHILE - 0.1%
COMPANIA DE TELEFONOS DE CHILE, ADR 3,000 $ 75,188
---------
TOTAL CHILE - (COST $86,759) 75,188
---------
MEXICO - 0.9%
CIFRA SA DE CV 70,000 119,033
CIFRA SA DE CV, CL B 1 2
GRUPO CARSO 19,000 119,646
GRUPO FINANCIERO BANAMEX, CL B * 58,000 181,250
TELEFONOS DE MEXICO, ADR 3,400 192,525
---------
TOTAL MEXICO - (COST $511,777) 612,456
---------
TOTAL LATIN AMERICA - (COST $1,147,581) 1,386,375
---------
MIDDLE EAST - 0.9%
ISRAEL - 0.9%
ECI TELECOMMUNICATIONS 11,000 335,500
TEVA PHARMACEUTICAL INDUSTRIES LIMITED, ADR 6,500 277,875
---------
TOTAL ISRAEL - (COST $617,251) 613,375
---------
TOTAL MIDDLE EAST - (COST $617,251) 613,375
---------
OTHER AREAS - 1.0%
INDIA - 1.0%
HIMALAYAN FUND 29,031 333,856
MAHANAGAR TELEPHONE NIGAM, GDR * 10,000 160,500
VIDESH SANCHAR NIGAM LIMITED, GDR (a) 16,000 198,080
---------
TOTAL INDIA - (COST $884,443) 692,436
---------
TOTAL OTHER AREAS - (COST $884,443) 692,436
---------
PACIFIC BASIN - 3.2%
AUSTRALIA - 1.2%
LEND LEASE CORPORATION 12,600 289,286
MAYNE NICKLESS LIMITED 52,000 280,900
WOODSIDE PETROLEUM LIMITED 41,000 268,225
---------
TOTAL AUSTRALIA - (COST $812,065) 838,411
---------
HONG KONG - 0.7%
CITIC PACIFIC 29,000 89,104
CLP HOLDINGS LIMITED 28,000 134,469
HUTCHISON WHAMPOA 22,000 136,045
NEW WORLD DEVELOPMENT LIMITED 44,000 125,252
---------
TOTAL HONG KONG - (COST $548,449) 484,870
---------
</TABLE>
See notes to financial statements.
8
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
PACIFIC BASIN - Continued
NEW ZEALAND - 0.4%
TELECOM CORPORATION OF NEW ZEALAND
(INSTALLMENT RECEIPTS) * 24,600 $ 66,003
TELECOM CORPORATION OF NEW ZEALAND * 37,000 175,733
---------
TOTAL NEW ZEALAND - (COST $248,471) 241,736
---------
PHILIPPINES - 0.0%
BELLE CORPORATION * 150,000 6,575
BELLE CORPORATION, WARRANTS 10/06/2000 * 260,000 810
---------
TOTAL PHILIPPINES - (COST $43,292) 7,385
---------
SINGAPORE - 0.2%
DEVELOPMENT BANK OF SINGAPORE * 17,000 112,796
DEVELOPMENT BANK OF SINGAPORE, CL A * 5,100 24,654
---------
TOTAL SINGAPORE - (COST $183,036) 137,450
---------
TAIWAN - 0.5%
TAIWAN AMERICAN FUND (c) * 20,000 343,000
---------
TOTAL TAIWAN - (COST $316,800) 343,000
---------
THAILAND - 0.2%
THAI FARMERS BANK 52,000 119,069
---------
TOTAL THAILAND - (COST $119,580) 119,069
---------
TOTAL PACIFIC BASIN - (COST $2,271,693) 2,171,921
---------
NORTH AMERICA - 35.6%
CANADA - 1.3%
MACMILLAN BLOEDEL LIMITED 63,072 897,595
---------
TOTAL CANADA - (COST $836,039) 897,595
---------
UNITED STATES - 34.3%
ALLIED SIGNAL 11,600 508,225
ARCHER - DANIELS - MIDLAND 44,002 946,043
BRISTOL - MYERS SQUIBB 4,200 444,675
CALENERGY * 28,500 929,813
CBS CORPORATION 27,090 965,081
COLGATE - PALMOLIVE 7,200 645,750
COMMONWEALTH ENERGY SYSTEMS 30,000 1,147,500
DILLARD DEPARTMENT STORES, CL A 13,600 498,100
EASTMAN KODAK 8,300 599,156
ELECTRONIC DATA SYSTEMS CORPORATION 15,000 645,000
EQUIFAX 27,500 1,063,906
FREEPORT MCMORAN COPPER & GOLD, CL A 44,136 786,173
HS RESOURCES * 28,000 453,250
IMC GLOBAL 19,019 684,684
INTEL 8,100 654,581
</TABLE>
See notes to financial statements.
9
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1998
<TABLE>
<CAPTION>
SHARES VALUE
------ ----------
<S> <C> <C>
NORTH AMERICA - CONTINUED
UNITED STATES - CONTINUED
LOUISIANA PACIFIC 41,000 $ 896,875
MARSH & MCLENNAN 12,200 1,111,725
MEDPARTNERS * 71,436 732,219
MOLEX INCORPORATED 18,000 515,250
PHILIP MORRIS 8,450 315,291
REDWOOD TRUST INCORPORATED 31,000 763,375
SARA LEE CORPORATION 13,200 786,225
SCHLUMBERGER 12,000 994,500
SEARS, ROEBUCK 18,500 1,097,281
SOUTHERN COMPANY 29,000 768,500
TEXACO 6,000 369,000
TEXAS INSTRUMENTS INCORPORATED 4,000 256,250
TRANSOCEAN OFFSHORE 16,000 894,000
UNION PACIFIC 12,400 678,900
UNION PACIFIC RESOURCES 37,207 888,317
WALT DISNEY 8,900 1,106,381
----------
TOTAL UNITED STATES - (COST $17,951,005) 23,146,026
----------
TOTAL NORTH AMERICA - (COST $18,787,044) 24,043,621
----------
TOTAL COMMON AND PREFERRED STOCKS, WARRANTS
AND EXCHANGEABLE NOTES - (COST $52,373,493) + 66,182,672
----------
TOTAL INVESTMENTS - (COST $52,373,493) - 98.1% 66,182,672
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - 1.9% 1,310,474
----------
NET ASSETS - 100.0% $ 67,493,146
----------
----------
</TABLE>
* 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 $198,080 or 0.3% of net
assets.
(b) Reflected at par value and denominated in U.S. dollars.
(c) Martin Currie Investment Management Ltd., which is affiliated to Martin
Currie Inc., provides investment management services to the Taiwan
American Fund. Martin Currie Inc. does not receive advisory fees on the
portion of net assets represented by affiliated investment companies.
+ Percentages of long term investments are presented in the portfolio by
country. Percentages of long term investments by industry are as follows:
Aerospace 1.3%, Apparel & Textiles 0.6%, Automobiles 1.6%, Banks 13.4%,
Broadcasting 1.4%, Chemicals 2.5%, Commercial Services 0.4%, Computers
1.0%, Conglomerates 0.3%, Diversified 3.8%, Drugs & Health Care 6.5%,
Electric Utilities 6.7%, Electrical Equipment 1.4%, Electronics 4.4%,
Engineering 0.4%, Fertilizers 1.0%, Financial Services 4.0%, Food &
Beverages 3.4%, Hotels & Restaurants 0.8%, Household Products 2.2%,
Industrial Machinery 2.2%, Insurance 5.5%, Investment Companies 0.5%,
Leisure Time 1.6%, Manufacturing 0.3%, Mining 1.2%, Miscellaneous 0.9%,
Mutual Funds 0.5%, Oil & Gas 7.0%, Paper 2.7%, Petroleum Services 1.5%,
Photography 1.8%, Publishing 0.5%, Railroads & Equipment 2.3%, Real Estate
0.9%, Retail Trade 4.8%, Steel 0.9%, Telecommunications 2.1%,
Telecommunications Equipment 1.6%, Telecommunications Services 1.0%,
Telephone 0.3%, Tobacco 0.5%, Transportation 0.4%.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
See notes to financial statements.
10
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1998
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at value
(cost $52,373,493) (Note B) $ 66,182,672
Cash 139,749
Foreign currency, at value (cost $1,587,490)
(Note B) 1,587,850
Receivable for investments sold 1,221,918
Receivable for currency sold 745,843
Dividend and interest receivable 201,285
Foreign tax reclaims receivable 38,010
Prepaid insurance expense 3,640
Deferred organization expenses (Note B) 2,860
----------
TOTAL ASSETS 70,123,827
----------
LIABILITIES
Payable for investments purchased 1,703,454
Payable for currency purchased 747,094
Payable for forward foreign currency contracts 56,996
Management fee payable (Note C) 97,910
Administration fee payable (Note C) 4,570
Trustees fees payable (Note C) 1,121
Accrued expenses and other liabilities 19,536
----------
TOTAL LIABILITIES 2,630,681
----------
TOTAL NET ASSETS $ 67,493,146
----------
----------
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 50,589,340
Undistributed net investment loss (48,786)
Accumulated net realized gain on investment
and foreign currency transactions 3,207,232
Net unrealized appreciation on investment
and foreign currency transactions 13,745,360
----------
TOTAL NET ASSETS $ 67,493,146
----------
----------
NET ASSET VALUE PER SHARE
($67,493,146 / 4,842,313 shares of beneficial interest outstanding) $ 13.94
----------
----------
</TABLE>
See notes to financial statements.
11
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
APRIL 30, 1998
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 70,658
Dividend income 1,203,277
Foreign taxes withheld (99,821)
----------
TOTAL INVESTMENT INCOME 1,174,114
----------
EXPENSES
Management fee (Note C) 433,593
Custodian fee 110,953
Administration fee (Note C) 55,022
Audit fee 25,805
Legal fees 5,104
Transfer agent fee 6,218
Trustees fees (Note C) 2,172
Amortization of deferred organization expenses 2,548
Miscellaneous expenses 14,977
Fees and expenses waived by the investment manager (Note C) (33,589)
----------
TOTAL EXPENSES 622,803
----------
NET INVESTMENT INCOME 551,311
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY
Net realized gain on investments 7,816,627
Net realized loss on foreign currency transactions (142,046)
Net unrealized appreciation (depreciation) on:
Investments 4,544,959
Foreign currency transactions (59,857)
----------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 12,159,683
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 12,710,994
----------
----------
</TABLE>
See notes to financial statements.
12
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR YEAR
ENDED ENDED
APRIL 30, 1998 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 551,311 472,075
Net realized gain on investment transactions 7,816,627 1,072,718
Net realized gain (loss) on foreign currency transactions (142,046) 475,540
Net unrealized appreciation (depreciation) on:
Investments 4,544,959 2,574,635
Foreign currency transactions (59,857) 95,815
------------- -------------
Net increase in net assets from operations 12,710,994 4,690,783
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (612,874) (1,000,298)
In excess of net investment income 0 (404,226)
Net realized gains (5,000,735) (645,365)
------------- -------------
Total distributions (5,613,609) (2,049,889)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Reinvestment of dividends and distributions to shareholders 3,761,296 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 3,761,296 1,105,645
------------- -------------
NET INCREASE IN NET ASSETS 10,858,681 3,746,539
------------- -------------
NET ASSETS at end of period (includes undistributed net investment
income (loss) of ($48,786) and $153,352, respectively) $ 67,493,146 $ 56,634,465
------------- -------------
------------- -------------
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares issued in reinvestment of distributions to shareholders 301,697 111,576
Less shares repurchased 0 (20,511)
------------- -------------
Net share transactions 301,697 91,065
------------- -------------
------------- -------------
</TABLE>
See notes to financial statements.
13
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
YEAR YEAR YEAR JUNE 15, 1994*
ENDED ENDED ENDED THROUGH
APRIL 30, 1998 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 0.091 0.141 0.279 0.079
Net realized and unrealized gain on investment
and foreign currency transactions 2.615 0.902 1.809 0.033
------------- ------------- ------------- -------------
Total from investment operations 2.706 1.043 2.088 0.112
------------- ------------- ------------- -------------
Less distributions:
Net investment income (0.135) (0.226) (0.186) (0.040)
In excess of net investment income 0.000 (0.091) (0.017) 0.000
Net realized gains (1.101) (0.146) 0.000 (0.082)
------------- ------------- ------------- -------------
Total distributions (1.236) (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 $ 13.940 $ 12.470 $ 11.890 $ 9.990
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
TOTAL INVESTMENT RETURN (1) 22.88% 8.87% 21.17% 1.18%(2)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 67,493,146 $ 56,634,465 $ 52,887,926 $ 37,259,376
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Operating expenses, net, to average
net assets (Note C) 1.00% 1.00% 1.00% 1.00%(3)
Operating expenses, gross, to average
net assets (Note C) 1.05% 1.10% 1.27% 1.25%(3)
Net investment income to average net assets 0.89% 0.88% 1.40% 0.94%(3)
Portfolio turnover rate 60% 40% 38% 44%
Per share amount of fees waived (Note C) $ 0.007 $ 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.
See notes to financial statement.
14
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
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 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.
15
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
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 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.
Although forward currency contracts limit the risk of loss due to a decline
in the value of hedged currency, they also limit any potential gain that
might result should the value of the currency increase. In addition, the
Funds could be exposed to additional risks if the counterparties to the
contracts are unable to meet the terms of their contracts.
The Fund had the following open forward foreign currency contract at April
30, 1998:
<TABLE>
<CAPTION>
UNREALIZED
DELIVERY DATE LOCAL CURRENCY FACE AMOUNT VALUE (DEPRECIATION)
------------- -------------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Japanese Yen (sell) July 8, 1998 491,131,740 $3,690,500 $3,747,496 $(56,996)
</TABLE>
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 year ended April
30, 1998, there were no purchase premiums or redemption fees collected.
16
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
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. On December 30, 1997, the Fund declared a long term capital gain
distribution of $4,204,801, representing $0.926 per share. As of April 30,
1998, the Fund has elected for Federal income tax purposes to defer a
$186,196 current year post October 31 currency loss as though the loss was
incurred on the first day of the next fiscal year.
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.
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 year ended April 30, 1998, the Investment
Manager has waived $33,589 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 year ended April 30, 1998 were $36,663,865 and
$37,982,270, 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 April 30, 1998 were as follows:
IDENTIFIED GROSS UNREALIZED NET UNREALIZED
COST APPRECIATION (DEPRECIATION) APPRECIATION
---------- ------------ -------------- --------------
$52,483,544 $16,506,138 $(2,807,010) $13,699,128
17
<PAGE>
MCBT GLOBAL GROWTH FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
NOTE E - PRINCIPAL SHAREHOLDERS
As of April 30, 1998 there were two shareholders who owned greater than 10%
of the Fund's outstanding shares, representing 100% of the Fund.
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.
NOTE F - SUBSEQUENT EVENT
On May 6, 1998, the Fund experienced significant redemptions of fund shares
totaling $20,955,000.
- -----------------------------------------------------------------------------
ADDITIONAL FEDERAL TAX INFORMATION - (UNAUDITED)
The Fund intends to make an election under Internal Revenue Code 853 to pass
through foreign taxes paid by the Fund to its shareholders. During the year
ended April 30, 1998, the total amount of foreign taxes that will be passed
through to the shareholders and the foreign source income for information
reporting purposes will be $97,629 (of the total $99,821 taxes withheld) and
$909,981, respectively.
18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of the
Martin Currie Business Trust - Global Growth Fund
In our opinion, the accompanying statement of assets and liabilities,
including the schedule of investments, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of the Global Growth
Fund (the "Fund") at April 30, 1998, and the results of its operations, the
changes in its net assets and the financial highlights for the periods
indicated, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based
on our audits. We conducted our audits of these financial statements in
accordance with generally accepted auditing standards which require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at April 30, 1998 by correspondence with the
custodian and brokers and the application of alternative auditing procedures
where confirmations from brokers were not received, provide a reasonable
basis for the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
June 16, 1998
19
<PAGE>
MARTIN CURRIE BUSINESS TRUST
____________________
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
____________________
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
____________________
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.
