<PAGE>
MARTIN CURRIE BUSINESS TRUST
GLOBAL EMERGING MARKETS FUND
ANNUAL REPORT
APRIL 30, 1999
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1999
<TABLE>
<S> <C> <C>
OBJECTIVE Long-term capital appreciation through active
management of a diversified portfolio of
equities in countries with emerging markets and
developing economies.
LAUNCH DATE February 14, 1997
FUND SIZE $131.6m
PERFORMANCE Total return from May 1, 1998 through April 30, 1999
- MCBT - Global Emerging Markets Fund (excluding all transaction fees) -10.3%
- MCBT - Global Emerging Markets Fund (including all transaction fees) -12.0%
- Morgan Stanley Capital International - Emerging Markets Free Index -10.2%
Annualized total return from February 14, 1997 through April 30, 1999
- MCBT - Global Emerging Markets Fund (excluding all transaction fees) -8.3%
- MCBT - Global Emerging Markets Fund (including all transaction fees) -9.2%
The graph below represents the annualized total
return of the portfolio including all transaction
fees through September 30, 1998, versus the Morgan
Stanley Capital International Emerging Markets
Free Index from March 1, 1997 through April 30,
1999.
- MCBT - Global Emerging Markets Fund (excluding all transaction fees) -8.3%
- MCBT - Global Emerging Markets Fund (including all transaction fees) -9.2%
- Morgan Stanley Capital International - Emerging Markets Free Index -12.5%
</TABLE>
[CHART]
<TABLE>
<S> <C> <C>
MCBT Emerging Markets Fund 4/30/99 $8,114
MSCI Emerging Markets Free Index 4/30/99 $7,487
</TABLE>
(a) Performance for the benchmark is not available from February 14, 1997
(commencement of investment operations). For that reason, performance is
shown from March 1, 1997.
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
prior to October 1, 1998, reflects a transaction fee of 100 basis points on
purchase and 100 basis points on redemption. Transaction fees are paid to the
Fund to cover trading costs. Transaction fees were eliminated effective
October 1, 1998. Past performance is not indicative of future performance.
1
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1999
PORTFOLIO Selectivity remains our watchword. Although individual
COMMENTS markets do continue to give us cause for concern, the
overall case for the asset class has improved during the
year.
Our single largest regional opportunity is ASIA. The steps
taken by governments in South Korea and, to a lesser
extent, Thailand to deregulate and open up to foreign
influence are very positive. Predictably, the willingness
of the corporate sector to adapt has been varied. What is
evident is that there is a premium attached to those that
focus on shareholder value. Efficient management and
governance are bringing the doubtful into the fold
gradually.
LATIN AMERICA has been an area of occasional opportunity.
After the Brazilian devaluation, the beginning of 1999 saw
a sharp rally, in similar fashion to the response of Asia
in early 1998. As investors wait to see the first signs of
economic improvement and test the commitment of government
to deliver reforms, the rally has faltered as it did in
Asia.
During the year we have tended to use EMEA to fund
positions we prefer. Against the backdrop of falling
emerging markets globally, the area was very stable.
Economic strains have appeared in CENTRAL EUROPE and the
convergence argument for markets like Greece was becoming
very discounted. Recently we neutralised our position in
South Africa and, after the Israeli elections, have begun
to reinvest in the MIDDLE EAST.
OUTLOOK
Emerging markets have improved markedly over the last six
months. A growing global economy, firmer commodity prices
worldwide, currency stability in most of the developing
world and the evident valuation appeal of many markets are
supportive of the sector. It is apparent that fund flows
have recovered and that investors' appetite for additional
risk has improved. What was a problem for emerging markets
as an asset class is now restricted to individual markets.
We have returned to countries like Indonesia and Thailand,
and consider each market on its merits. These are
determined mainly by the willingness of local governments
and companies to restructure and offer shareholder value.
INVESTMENT All funds are managed on a team basis with a named director
MANAGER PROFILE heading each team.
James Fairweather, Chief Investment Officer, oversees the
management of the MCBT Global Emerging Markets Fund.
James Fairweather spent three years with Montague Loebl
Stanley & Co as an institutional sales and economics
assistant. He 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,
James became head of our continental European team in 1992.
Chairman of the international strategy group, he was
appointed Deputy Chief Investment Officer in 1994 with
overall responsibility for our investments in emerging
markets. James was promoted to Chief Investment Officer in
1997.
2
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1999
ASSET ALLOCATION
(% of net assets)
[PIE CHART]
<TABLE>
<S> <C>
Latin America 33%
Pacific Basin 32%
Europe 11%
Africa 9%
Middle East 6%
ST Investment 5%
Other Areas 4%
</TABLE>
<TABLE>
<CAPTION>
LARGEST HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
<S> <C> <C>
LATIN AMERICA
Telefonos de Mexico, ADR (Mexico) 2.9
YPF Sociedad Anonima, ADR (Argentina) 1.8
Petrobras Petroleo Brasileiro, SA, preferred (Brazil) 1.7
PACIFIC BASIN
Bangkok Bank, Foreign (Thailand) 3.0
Pohang Iron & Steel Company (South Korea) 2.8
PT Bank Pan Indonesia TBK (Indonesia) 2.6
EUROPE
Alpha Credit Bank (Greece) 1.6
AFRICA
Sasol Limited (South Africa) 1.7
Billiton, PLC (South Africa) 1.7
MIDDLE EAST
Orbotech Limited (Israel) 1.3
OTHER AREAS
Indian Opportunities Fund (Investment Companies) 3.3
</TABLE>
3
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON AND PREFERRED STOCKS, RIGHTS, WARRANTS,
AND CONVERTIBLE NOTES - 95.3%
AFRICA - 9.2%
KENYA - 0.0%
KENYA COMMERCIAL BANK 1 $ 1
------------
TOTAL KENYA - (COST $1) 1
------------
MAURITIUS - 0.6%
MAURITIUS COMMERCIAL BANK 202,001 769,950
------------
TOTAL MAURITIUS - (COST $899,452) 769,950
------------
SOUTH AFRICA - 8.6%
ANGLO AMERICAN CORPORATION 40,000 2,064,092
BILLITON, PLC 650,000 2,200,493
NEDCOR LIMITED 96,500 2,109,203
SANLAM LIMITED * 1,400,000 1,373,542
SASOL LIMITED 325,000 2,296,631
SOUTH AFRICAN BREWERIES PLC * 160,000 1,341,002
------------
TOTAL SOUTH AFRICA - (COST $9,727,544) 11,384,963
------------
TOTAL AFRICA - (COST $10,626,997) 12,154,914
------------
EUROPE - 10.9%
CROATIA - 1.4%
PLIVA D.D., GDR 112,500 1,779,750
------------
TOTAL CROATIA - (COST $1,694,654) 1,779,750
------------
CZECH REPUBLIC - 1.1%
CESKE RADIOKOMUNIKACE * 38,200 1,403,850
------------
TOTAL CZECH REPUBLIC - (COST $733,927) 1,403,850
------------
GREECE - 3.8%
ALPHA CREDIT BANK 29,300 2,091,499
HELLENIC TELECOMMUNICATION ORGANIZATION SA (OTE) 85,000 1,971,934
NATIONAL BANK OF GREECE SA 13,840 943,249
NATIONAL BANK OF GREECE SA, RIGHTS 5/28/1999 * 21,340 60,239
------------
TOTAL GREECE - (COST $3,592,906) 5,066,921
------------
HUNGARY - 1.1%
MAGYAR OLAJ-ES GAZIPARI RT., GDR 29,500 663,160
MATAV RT., ADR 28,000 787,500
------------
TOTAL HUNGARY - (COST $1,290,043) 1,450,660
------------
LUXEMBOURG - 1.6%
MINORCO SA 50,500 1,268,102
QUILMES INDUSTRIAL SA, PREFERRED, ADR 71,000 776,562
------------
TOTAL LUXEMBOURG - (COST $1,561,655) 2,044,664
------------
</TABLE>
See notes to financial statements.
4
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
EUROPE - CONTINUED
POLAND - 0.8%
TELEKOMUNIKACJA POLSKA SA * 175,000 $ 1,085,000
------------
TOTAL POLAND - (COST $782,700) 1,085,000
------------
RUSSIA - 1.1%
BRUNSWICK RUSSIAN GROWTH FUND * 2,279 185,581
LUKOIL HOLDING, ADR 33,000 1,246,266
------------
TOTAL RUSSIA - (COST $2,027,891) 1,431,847
------------
TOTAL EUROPE - (COST $11,683,776) 14,262,692
------------
LATIN AMERICA - 33.0%
ARGENTINA - 4.5%
BANCO DE GALICIA Y BUENOS AIRES SA DE CV, ADR 21,500 495,844
BANCO FRANCES SA, ADR 34,000 875,500
PEREZ COMPANC, ADR 58,500 738,563
SIDERAR SAIC 290,000 893,566
TELECOM ARGENTINA SA, ADR 16,500 569,250
YPF SOCIEDAD ANONIMA, ADR 55,500 2,331,000
------------
TOTAL ARGENTINA - (COST $4,795,311) 5,903,723
------------
BRAZIL - 12.5%
ARACRUZ CELULOSE SA 23,000 460,000
CENTRAIS ELETRICA DE SANTA CATARINA SA, PREFERRED, CL B 1,619,329 750,682
COMPANHIA BRASILEIRA DE DISTRIBUICAO, GDR 43,000 749,813
COMPANHIA ENERGETICA DE MINAS GERAIS, PREFERRED, ADR 26,678 653,611
COMPANHIA PARANAENSE DE ENERGIA-COPEL 109,000 892,438
COMPANIA VALE DO RIO DOCE, ADR 69,500 1,329,187
ELECTROBRAS, ADR 80,000 760,000
EMBRATEL PARTICIPACOES SA * 66,540 1,081,275
PETROBRAS PETROLEO BRASILEIRO, SA, PREFERRED 13,915,015 2,237,628
TELE CENTRO SUL PARTICIPACOES SA 26,608 1,413,550
TELE NORTE LESTE PARTICIPACOES SA 82,040 1,389,552
TELE SUDESTE CELULAR PARTICIPACOES SA, ADR 18,000 514,125
TELEBRAS, ADR 28,040 2,191
TELERJ CELULAR S.A. PREFERRED, CL B 47,840,255 1,079,502
TELESP CELULAR PARTICIPACOES SA 18,416 460,400
TELESP PARTICIPACOES SA 63,040 1,576,000
USINAS SIDERURGICAS DE MINAS GERAIS SA, ADR 350,000 1,093,750
------------
TOTAL BRAZIL - (COST $15,218,772) 16,443,704
------------
CHILE - 1.4%
COMPANIA DE TELEFONOS DE CHILE, ADR 41,283 1,091,419
SOCIEDAD QUIMICA Y MINERA, ADR 13,400 494,125
VINA CONCHA Y TORO 9,500 308,156
------------
TOTAL CHILE - (COST $1,790,412) 1,893,700
------------
</TABLE>
See notes to financial statements.
5
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
LATIN AMERICA - CONTINUED
MEXICO - 12.7%
ALFA, SA DE CV, CL A, SERIES A 115,000 $ 457,386
CEMEX SA DE CV 277,000 1,286,071
CIFRA SA DE CV, SERIES V 750,653 1,421,691
CONTROLADORA COMERCIAL MEXICANA SA DE CV 340,000 350,303
CORPORACION GEO, SERIES B * 165,000 694,643
DESC SA DE CV, ADR 30,500 754,875
FOMENTO ECONOMICO MEXICANO SA DE CV 31,000 1,127,625
GRUPO CARSO 166,000 800,357
GRUPO FINANCIERO BANAMEX, CL B * 420,000 1,070,455
GRUPO MODELO SA DE CV, CL C 255,000 671,997
GRUPO SANBORNS, SA, SERIES B * 128,126 253,756
GRUPO TELEVISA, ADR * 37,300 1,529,300
KIMBERLY-CLARK DE MEXICO 270,000 1,051,948
ORGANIZACION SORIANA SA DE CV 310,000 1,395,671
TELEFONOS DE MEXICO, ADR 50,500 3,825,375
------------
TOTAL MEXICO - (COST $13,103,268) 16,691,453
------------
PANAMA - 0.5%
BANCO LATINOAMERICANO DE EXPORTACIONES, SA 21,000 669,375
------------
TOTAL PANAMA - (COST $495,855) 669,375
------------
PERU - 1.4%
CEMENTOS LIMA SA 18,000 277,594
COMPANIA DE MINAS BUENAVENTURA SA, ADR, SERIES B 40,000 645,000
TELEFONICA DEL PERU, ADR, CI B 62,000 933,875
------------
TOTAL PERU - (COST $1,722,347) 1,856,469
------------
TOTAL LATIN AMERICA - (COST $37,125,965) 43,458,424
------------
MIDDLE EAST - 5.9%
EGYPT - 2.6%
EFG HERMES HOLDING SAE, GDR * 110,180 1,164,602
EGYPTIAN COMPANY FOR MOBILE SERVICES * 90,271 1,205,187
TORAH PORTLAND CEMENT 51,650 1,027,599
------------
TOTAL EGYPT - (COST $3,234,143) 3,397,388
------------
ISRAEL - 2.1%
BANK LEUMI LE-ISRAEL, WARRANTS 12/31/1999 * 630,000 153,983
DISCOUNT INVESTMENT CORPORATION 26,800 970,002
ORBOTECH LIMITED * 35,000 1,680,000
------------
TOTAL ISRAEL - (COST $2,107,031) 2,803,985
------------
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
MIDDLE EAST - CONTINUED
TURKEY - 1.2%
DOGAN YAYIN HOLDING * 169,500,000 $ 1,254,402
KOC HOLDING AS 1,922,000 348,242
------------
TOTAL TURKEY - (COST $2,584,202) 1,602,644
------------
TOTAL MIDDLE EAST - (COST $7,925,376) 7,804,017
------------
OTHER AREAS - 4.1%
INVESTMENT COMPANIES - 4.1%
INDIAN OPPORTUNITIES FUND (a)* 455,000 4,345,250
NEAR EAST OPPORTUNITIES FUND (b)* 70,000 1,089,900
------------
TOTAL INVESTMENT COMPANIES - (COST $5,098,375) 5,435,150
------------
TOTAL OTHER AREAS - (COST $5,098,375) 5,435,150
------------
PACIFIC BASIN - 32.2%
INDONESIA - 6.1%
PT BANK PAN INDONESIA TBK 28,580,000 3,451,904
PT HANJAYA MANDALA SAMPOERNA, TBK * 126,000 174,816
PT INDAH KIAT PULP & PAPER CORPORATION * 6,340,000 2,650,666
PT INDOSAT 891,500 1,722,812
------------
TOTAL INDONESIA - (COST $4,900,904) 8,000,198
------------
PHILIPPINES - 2.4%
AYALA LAND INCORPORATED 4,300,000 1,583,169
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY 31,000 1,002,761
PHILIPPINE NATIONAL BANK * 215,610 595,373
------------
TOTAL PHILIPPINES - (COST $2,596,004) 3,181,303
------------
SOUTH KOREA - 10.4%
HOUSING & COMMERCIAL BANK KOREA 83,725 1,972,486
HYUNDAI MOTOR COMPANY LIMITED 75,000 1,252,629
HYUNDAI MOTOR COMPANY LIMITED, RIGHTS 5/18/1999 * 50,530 282,730
KOOKMIN BANK 115,800 1,578,427
KOREA ELECTRIC POWER CORPORATION 89,560 2,577,158
POHANG IRON & STEEL COMPANY 50,130 3,648,502
SAMSUNG ELECTRONICS CORPORATION 30,883 2,375,016
------------
TOTAL SOUTH KOREA - (COST $8,713,589) 13,686,948
------------
TAIWAN - 5.6%
ASUSTEK COMPUTER INCORPORATED 135,000 1,411,926
FAR EASTERN DEPARTMENT STORES LIMITED 1,490,000 1,011,560
TAIWAN SEMICONDUCTOR MANUFACTURING 360,550 1,218,372
UNITED WORLD CHINESE COMMERCIAL BANK * 1,381,000 1,727,306
YUANTA SECURITIES CORPORATION * 1,220,000 2,033,333
------------
TOTAL TAIWAN - (COST $6,371,203) 7,402,497
------------
</TABLE>
See notes to financial statements.
7
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
PACIFIC BASIN - CONTINUED
THAILAND - 6.9%
BANGKOK BANK, FOREIGN * 1,340,000 $ 4,012,409
ELECTRICITY GENERATING PUBLIC COMPANY 184,814 411,307
SIAM CEMENT PUBLIC COMPANY LIMITED 97,000 2,867,872
SIAM COMMERCIAL BANK PUBLIC COMPANY LIMITED, PREFERRED 2,500,000 1,770,974
SIAM COMMERCIAL BANK PUBLIC COMPANY LIMITED, WARRANTS 5/31/2002 * 2,500,000 -
------------
TOTAL THAILAND - (COST $6,756,823) 9,062,562
------------
INVESTMENT COMPANIES - 0.8%
THE CHINA HEARTLAND FUND (b)* 184,944 1,013,493
------------
TOTAL INVESTMENT COMPANIES - (COST $1,000,000) 1,013,493
------------
TOTAL PACIFIC BASIN - (COST $30,338,523) 42,347,001
------------
TOTAL COMMON AND PREFERRED STOCKS, RIGHTS, WARRANTS,
AND CONVERTIBLE NOTES - (COST $102,799,012) + 125,462,198
------------
PRINCIPAL
AMOUNT
---------
SHORT TERM INVESTMENT - 4.5%
STATE STREET BANK AND TRUST REPURCHASE AGREEMENT
4.250%, 5/3/1999 (c) $ 5,880,000 5,880,000
------------
TOTAL SHORT TERM INVESTMENT - (COST $5,880,000) 5,880,000
------------
TOTAL INVESTMENTS - (COST $108,679,012) - 99.8% 131,342,198
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - 0.2% 286,362
------------
NET ASSETS - 100.0% $ 131,628,560
------------
------------
</TABLE>
* Non-income producing security.
(a) The Indian Opportunities Fund is managed by Martin Currie Bermuda Ltd.,
an affiliate of Martin Currie Inc. Martin Currie Inc. does not receive
advisory fees on the portion of net assets represented by affiliated
investment companies.
(b) Martin Currie Investment Management Ltd., which is affiliated to Martin
Currie Inc., provides investment management services to the Near East
Opportunities and China Heartland Funds. Martin Currie Inc. does not
receive advisory fees on the portion of net assets represented by
affiliated investment companies.
(c) The repurchase agreement, dated 4/30/1999, $5,880,000 par, due
5/3/1999, is collateralized by United States Treasury Notes, 6.750%, due
8/15/2026, with a market value of $6,001,212.
+ Percentages of long term investments are presented in the portfolio by
country. Percentages of long term investments by industry are as
follows: Automobiles 1.2%, Banks 17.7%, Brewery 2.1%, Broadcasting 2.2%,
Cement 4.2%, Chemicals 0.4%, Computers 1.1%, Diversified 3.5%, Drugs &
Health Care 1.4%, Electric Utilities 4.0%, Electronics 3.1%, Financial
Services 3.2%, Food & Beverages 0.6%, Insurance 1.0%, Investment
Companies 5.0%, Liquor 0.2%, Manufacturing 0.5%, Mining 5.7%,
Miscellaneous 0.6%, Oil & Gas 7.2%, Paper 3.2%, Real Estate 1.2%, Retail
Trade 3.4%, Semi-Conductor Manufacturing Equipment 0.9%, Steel 4.3%,
Telecommunications 16.5%, Telecommunications Services 0.8%, Tobacco 0.1%.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
See notes to financial statements.
8
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
APRIL 30, 1999
<S> <C>
ASSETS
Investments in securities, at value (cost $102,799,012) (Note B) $ 125,462,198
Investments in repurchase agreements, at value (Note B) 5,880,000
-----------------
Total Investments 131,342,198
Cash 248
Foreign currency, at value (cost $2,812,330) (Note B) 2,806,608
Receivable for investments sold 374,367
Receivable for currency sold 1,128,828
Dividend and interest receivable 428,348
Foreign tax reclaims receivable 231
Prepaid insurance 2
Deferred organization expense (Note B) 7,087
-----------------
TOTAL ASSETS 136,087,917
-----------------
LIABILITIES
Payable to custodian bank for foreign currency settlements 313,354
Payable for investments purchased 2,397,135
Payable for currency purchased 1,134,748
Management fee payable (Note C) 192,103
Administration fee payable (Note C) 6,976
Trustees fees payable (Note C) 2,288
Accrued expenses and other liabilities 412,753
-----------------
TOTAL LIABILITIES 4,459,357
-----------------
TOTAL NET ASSETS $ 131,628,560
-----------------
-----------------
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 133,954,832
Undistributed net investment loss (719,369)
Accumulated net realized loss on investment and foreign currency transactions (23,835,889)
Net unrealized appreciation on investment and foreign currency transactions 22,228,986
-----------------
TOTAL NET ASSETS $ 131,628,560
-----------------
-----------------
NET ASSET VALUE PER SHARE $ 8.01
($131,628,560 / 16,433,125 shares of beneficial interest outstanding) -----------------
-----------------
</TABLE>
See notes to financial statements.
9
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 304,920
Dividend income 2,000,873
Foreign taxes withheld (188,523)
-------------
TOTAL INVESTMENT INCOME 2,117,270
-------------
EXPENSES
Management fee (Note C) 691,612
Custodian fee 203,000
Administration fee (Note C) 80,774
Audit fee 24,999
Legal fees 9,121
Transfer agent fee 6,398
Trustees fees (Note C) 4,940
Amortization of deferred organization expenses (Note B) 2,548
Miscellaneous expenses 16,566
-------------
TOTAL EXPENSES 1,039,958
-------------
NET INVESTMENT INCOME 1,077,312
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
Net realized loss on investments (net of foreign taxes paid of ($35,631)) (17,714,151)
Net realized loss on foreign currency transactions (518,499)
Net unrealized appreciation (depreciation) on:
Investments (net of foreign taxes of ($367,115)) 18,462,789
Foreign currency transactions (425,985)
NET LOSS ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS (195,846)
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 881,466
-------------
-------------
</TABLE>
See notes to financial statements.
10
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Year
Ended Ended
April 30, 1999 April 30, 1998
--------------- ---------------
<S> <C> <C>
NET ASSETS at beginning of year $ 99,831,879 $ 50,095,856
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income 1,077,312 658,555
Net realized loss on investment transactions (17,714,151) (5,347,587)
Net realized loss on foreign currency transactions (518,499) (118,131)
Net unrealized appreciation (depreciation) on:
Investments 18,462,789 4,382,743
Foreign currency transactions (425,985) (4,958)
--------------- ---------------
Net increase (decrease) in net assets from operations 881,466 (429,378)
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (199,259) (934,330)
In excess of net investment income (539,254) (574,501)
Net realized gains 0 (626,872)
--------------- ---------------
Total distributions (738,513) (2,135,703)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 30,915,215 49,870,325
Reinvestment of dividends and distributions to shareholders 738,513 2,135,703
Cost of shares repurchased 0 (210,772)
Paid in capital from subscription and redemption fees 0 505,848
--------------- ---------------
Total increase in net assets from capital share transactions 31,653,728 52,301,104
--------------- ---------------
NET INCREASE IN NET ASSETS 31,796,681 49,736,023
--------------- ---------------
NET ASSETS at end of year (includes undistributed net investment $ 131,628,560 $ 99,831,879
losses of ($719,369) and ($878,053), respectively) --------------- ---------------
--------------- ---------------
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 5,212,543 5,876,028
Shares issued in reinvestment of distributions to shareholders 117,598 250,375
Less shares repurchased 0 (23,419)
--------------- ---------------
Net share transactions 5,330,141 6,102,984
--------------- ---------------
--------------- ---------------
</TABLE>
See notes to financial statements.
11
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
Year Year February 14, 1997*
Ended Ended through
April 30, 1999 April 30, 1998 April 30, 1997
-------------- -------------- --------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 8.990 $ 10.020 $ 10.000
--------------- ------------- ------------
Net investment income 0.081 0.004 0.055
Net realized and unrealized loss on investment
and foreign currency transactions (1.016) (0.883) (0.035)
--------------- ------------- ------------
Total from investment operations (0.935) (0.879) 0.020
--------------- ------------- ------------
Less distributions:
Net investment income (0.012) (0.086) 0.000
In excess of net investment income (0.033) (0.053) 0.000
Net realized gains 0.000 (0.058) 0.000
--------------- ------------- ------------
Total distributions (0.045) (0.197) 0.000
--------------- ------------- ------------
Paid in capital from subscription and
redemption fees 0.000 0.046 0.000
--------------- ------------- ------------
Net asset value, end of period $ 8.010 $ 8.990 $ 10.020
--------------- ------------- ------------
--------------- ------------- ------------
TOTAL INVESTMENT RETURN (1) (2) (10.26)% (8.21)% 0.20%
--------------- ------------- ------------
--------------- ------------- ------------
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period $ 131,628,560 $ 99,831,879 $ 50,095,856
Operating expenses, net, to average net assets (Note C) 1.12% 1.14% 1.33%(3)
Operating expenses, gross, to average net assets (Note C) 1.12% 1.14% 1.33%(3)
Net investment income to average net assets 1.16% 0.98% 2.83%(3)
Portfolio turnover rate 140% 89% 0%
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Commencement of investment operations.
(1) Total return at net asset value assuming all distributions reinvested and
no purchase premiums or redemption fees.
(2) Periods less than one year are not annualized.
(3) Annualized.
See notes to financial statements.
12
<PAGE>
MCBT GLOBAL EMERGING MARKETS 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 five funds which have differing investment
objectives and policies: Opportunistic EAFE Fund, Global Emerging Markets
Fund, Japan Small Companies Fund, Asia Pacific ex Japan Fund (formerly
"Emerging Asia Fund") and EMEA Fund, (the "Funds"). The MCBT Global Emerging
Markets Fund (the "Fund") commenced investment operations on February 14,
1997. 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.
13
<PAGE>
MCBT GLOBAL EMERGING MARKETS 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. There were no open forward foreign currency contracts at April 30,
1999.
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.
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 - Effective through September 30,
1998, there was a purchase premium for cash investments into the Fund of
1.00% of the amount invested and a redemption fee on cash redemptions of
1.00% of the amount redeemed. All purchase premiums and redemption fees were
paid to and retained by the Fund and recorded as paid-in-capital. These fees
were intended to offset brokerage and transaction costs arising in connection
with the purchase and redemption. The purchase and redemption fees could be
waived by the Manager, however, if these brokerage and transaction costs were
minimal or in other circumstances at the Manager's discretion. Effective
October 1, 1998, the Fund eliminated all such fees. For the period ended
September 30, 1998, there were no collections of purchase premiums or
redemption fees.
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.
14
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
INCOME TAXES (CONTINUED) - 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. As of April 30, 1999, the Fund has a realized
capital loss carryforward, for Federal income tax purposes, of $22,528,903
(expires April 30, 2007), available to be used to offset future realized
capital gains. As of April 30, 1999, the Fund has elected for Federal income
tax purposes to defer a $468,859 current year post October 31 capital loss as
though the loss was incurred on the first day of the next fiscal year.
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 0.80% of the Fund's average net assets.
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, 1999 were $154,459,964 and
$120,051,609, 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, 1999, were as follows:
<TABLE>
<CAPTION>
IDENTIFIED GROSS UNREALIZED NET UNREALIZED
COST APPRECIATION (DEPRECIATION) APEPRECIATION
--------------- ------------ -------------- ---------------
<S> <C> <C> <C>
$ 110,511,880 $ 23,965,360 $ (3,135,042) $ 20,830,318
</TABLE>
NOTE E - PRINCIPAL SHAREHOLDERS
As of April 30, 1999, there was one shareholder who owned greater than 10% of
the Fund's outstanding shares, representing 99% 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) in emerging markets.
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.
15
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
CONCENTRATION OF RISK (CONTINUED) - The risks of investing in foreign
securities may be heightened in the case of investments in emerging markets
or countries with limited or developing capital markets. Security prices in
emerging markets can be significantly more volatile than in the more
developed nations of the world, reflecting the greater uncertainties of
investing in less established markets and economies. In particular, countries
with emerging markets may have relatively unstable governments, present the
risk of nationalization, restrictions on foreign ownership, imposition of
withholding taxes on dividend or interest payments and capital gains, or
prohibitions on repatriation of assets, and may have less protection for
property rights than more developed countries. Political change or
instability may adversely affect the economies and securities markets of such
countries. The economies of individual countries may differ favorably or
unfavorably and significantly from the U. S. economy in such respects as
growth of gross domestic product or gross national product, diversification,
rate of inflation, currency depreciation, capital reinvestment, resource
self-sufficiency, dependence on foreign assistance, vulnerability to change
in trade conditions, structural unemployment and balance of payments position.
- -------------------------------------------------------------------------------
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, 1999, 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 $224,154 (which is comprised of $188,523 out of
the $188,523 total taxes withheld and $35,631 of Thailand capital gain taxes
paid) and $1,045,537, respectively.
16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Shareholders of the
Martin Currie Business Trust - Global Emerging Markets 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
Emerging Markets Fund (the "Fund") at April 30, 1999, 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 the 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, 1999 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 24, 1999
17
<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.
- -------------------------------------------------------------------------------
