<PAGE>
MARTIN CURRIE BUSINESS TRUST
OPPORTUNISTIC EAFE FUND
ANNUAL REPORT
APRIL 30, 1999
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1999
OBJECTIVE Long term capital appreciation through active
management of a diversified portfolio of
international equities outside the USA and Canada.
LAUNCH DATE July 1, 1994
FUND SIZE $213.9m
PERFORMANCE Total return from May 1, 1998 through April 30,
SINCE LAUNCH 1999
- MCBT - Opportunistic EAFE (excluding
all transaction fees) +7.9%
- MCBT - Opportunistic EAFE (including
all transaction fees) +6.3%
- The Morgan Stanley Capital
International EAFE Index +9.8%
Annualized total return from July 1, 1994 through
April 30, 1999
- MCBT - Opportunistic EAFE (excluding all
transaction fees) +10.0%
- MCBT - Opportunistic EAFE (including all
transaction fees) +9.6%
- The Morgan Stanley Capital
International EAFE Index +9.1%
[GRAPH]
(a) Commencement of investment operations.
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 OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1999
PORTFOLIO Over the 12 months to April 30 1999, the MSCI EAFE
COMMENTS index rose by 9.8%. Our fund's total return rose
by 7.9% during the same period, leaving it 128/565
in the Lipper rankings. These figures disguise
extreme volatility.
In the face of slow growth, continental European
stock markets fell back. We reduced our exposure
to the region. And, through acquisitions such as
Accor (FRANCE) or BASF (GERMANY), we made the
portfolio less defensive. But our main emphasis
remains on stocks which are benefiting from
corporate restructuring.
Supported by corporate activity, the UK equity
market moved ahead. We bought new holdings in BP
Amoco, SmithKline Beecham and British
Telecommunications. And to participate in the
consumer recovery, we added Scottish &
Newcastle. Smaller companies have rallied and
corporate activity has affected every sector.
In JAPAN, the stock market and currency
strengthened as we increased our weighting. We
added domestic stocks to our list of
predominantly blue-chip exporters. Smaller
companies, to which we have some exposure, have
recovered. New holdings include Fujitsu
(information services) and Mitsui Marine and
Fire. Of the Japanese assets, 25% remain hedged
against the US dollar.
Supported by stronger currencies and falling
interest rates, Asian markets continue to
recover. Initially through the more liquid
markets of SINGAPORE and HONG KONG, we increased
our exposure to the region in late 1998. We
added property companies City Developments in
Singapore, and Cheung Kong and Henderson Land in
Hong Kong.
The recovery in Asia has been felt particularly
by smaller markets. Through BRAZIL and MEXICO,
we added to Latin America again. Buying Orbotech
(manufacturing), we established new positions in
ISRAEL, while we went back into SOUTH AFRICA
with Anglo American (diversified holding
company) and Nedcor (banking). We also made
successful purchases in EMERGING EUROPE, such as
Hellenic Telecom.
OUTLOOK
Economic conditions look more robust than they
did at the turn of the year. The concerted cuts
in interest rates in the fourth quarter are
likely to give western economies a `soft
landing'. Corporate restructuring and foreign
buying has seen Japan off its lows. In an
environment of more stable currencies and
interest rates, smaller markets will prosper.
But the rally in bond yields is probably past
its best. While there is clear value in smaller
companies and some cyclical sectors, the
economic environment is subdued enough to favour
marketable companies with quality earnings.
2
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1999
INVESTMENT All funds are managed on a team basis with a
MANAGER PROFILE named director heading each team.
James Fairweather, Chief Investment Officer,
oversees the management of the MCBT Opportunistic
EAFE 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.
The international strategy group 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 OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PROFILE AT APRIL 30, 1999
ASSET ALLOCATION
(% of net assets)
[GRAPH]
<TABLE>
<CAPTION>
LARGEST HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
<S> <C> <C>
EUROPE
Mannesmann (Germany) 2.7
Cie Generale des Eaux (France) 2.6
Nokia Oyj (Finland) 2.2
JAPAN
NTT Mobile Communications 1.5
Sony 1.2
PACIFIC BASIN
Brambles Industries Limited (Australia) 0.6
Westpac Banking Corporation Limited (Australia) 0.6
LATIN AMERICA
Grupo Financiero Bancomer, SA de CV (Mexico) 0.5
</TABLE>
4
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
COMMON AND PREFERRED STOCKS, RIGHTS, WARRANTS AND
CONVERTIBLE NOTES - 99.3%
AFRICA - 0.2%
SOUTH AFRICA - 0.2%
ANGLO AMERICAN CORPORATION 4,323 $ 223,077
NEDCOR LIMITED 10,000 218,570
--------------
TOTAL SOUTH AFRICA - (COST $384,366) 441,647
--------------
TOTAL AFRICA - (COST $384,366) 441,647
--------------
EUROPE - 70.2%
FINLAND - 2.1%
NOKIA OYJ 59,694 4,600,282
--------------
TOTAL FINLAND - (COST $2,257,513) 4,600,282
--------------
FRANCE - 11.8%
ACCOR SA 12,101 3,189,483
AXA 29,493 3,807,313
CAP GEMINI SA 8,852 1,353,127
CIE GENERALE DES EAUX 24,029 5,612,455
ELF AQUITAINE * 13,840 2,149,225
PROMODES 911 577,428
PSA PEUGEOT CITROEN 13,598 2,255,294
SOCIETE GENERALE 16,242 2,906,574
TOTAL SA 25,046 3,429,034
--------------
TOTAL FRANCE - (COST $20,651,217) 25,279,933
--------------
GERMANY - 11.7%
ALLIANZ AG 6,222 1,981,736
BASF AG 64,365 2,818,401
BAYERISCHE MOTOREN WERKE 1,780 1,274,906
BAYERISCHE MOTOREN WERKE, PREFERRED 376 264,738
BAYERISCHE VEREINSBANK 36,548 2,382,194
HOECHST AG 70,320 3,331,730
MANNESMANN 44,049 5,798,058
METRO AG 35,757 2,583,721
PREUSSAG AG 30,537 1,606,513
SIEMENS AG 39,118 2,892,698
--------------
TOTAL GERMANY - (COST $20,996,823) 24,934,695
--------------
GREECE - 0.2%
ALPHA CREDIT BANK PLC 4,710 336,210
HELLENIC TELECOMMUNICATION ORGANIZATION SA (OTE) 7,000 162,395
--------------
TOTAL GREECE - (COST $347,918) 498,605
--------------
IRELAND - 0.9%
BANK OF IRELAND 97,495 1,951,731
--------------
TOTAL IRELAND - (COST $2,009,220) 1,951,731
--------------
</TABLE>
See notes to financial statements.
5
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
EUROPE - CONTINUED
ITALY - 5.1%
ASSICURAZIONI GENERALI 61,627 $ 2,399,037
INSTITUTO BANCARIO SAN PAOLO DI TORINO 187,177 2,807,820
TELECOM ITALIA SPA 340,660 3,623,924
UNICREDITO ITALIANO SPA 392,569 1,990,608
--------------
TOTAL ITALY - (COST $10,691,788) 10,821,389
--------------
NETHERLANDS - 4.7%
AEGON NV 27,250 2,612,412
ING GROEP NV 20,320 1,251,471
KONINKLIJKE AHOLD NV 74,367 2,761,430
VERENIGD BEZIT VNU NV 50,125 2,028,064
WOLTERS KLUWER NV 31,428 1,367,862
--------------
TOTAL NETHERLANDS - (COST $9,246,458) 10,021,239
--------------
SPAIN - 4.1%
ARGENTARIA SA 83,150 1,955,311
BANCO SANTANDER CENTRAL HISPANO SA * 148,693 3,229,550
TELEFONICA SA 74,094 3,471,404
TELEFONICA SA, RIGHTS 5/20/1999 * 64,857 60,293
--------------
TOTAL SPAIN - (COST $8,143,846) 8,716,558
--------------
SWEDEN - 1.7%
ASTRAZENECA GROUP PLC 44,939 1,752,392
FORENINGSSPARBANKEN AB, SERIES A 86,000 1,885,741
--------------
TOTAL SWEDEN - (COST $3,948,380) 3,638,133
--------------
SWITZERLAND - 4.4%
NOVARTIS 2,800 4,098,053
ROCHE HOLDING AG 230 2,704,464
SWISSCOM AG 7,100 2,606,017
--------------
TOTAL SWITZERLAND - (COST $9,925,071) 9,408,534
--------------
UNITED KINGDOM - 23.5%
ALLIED ZURICH AG 137,000 1,816,029
ASTRAZENECA GROUP PLC 45,550 1,785,010
BP AMOCO PLC 154,000 2,923,329
BRITISH SKY BROADCASTING GROUP PLC 167,000 1,464,158
BRITISH TELECOMMUNICATIONS PLC 87,000 1,452,752
CABLE & WIRELESS 219,050 3,137,995
GENERAL ELECTRIC 146,050 1,545,975
GKN 157,600 2,689,965
GLAXO WELLCOME 115,080 3,410,079
LADBROKE 485,140 2,331,578
LAND SECURITIES 134,580 1,765,548
LASMO 427,014 1,099,100
LLOYDS TSB 156,400 2,521,039
MARKS & SPENCER 134,190 920,152
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
EUROPE - CONTINUED
UNITED KINGDOM - CONTINUED
MCKECHNIE 119,840 $ 861,756
NATIONAL WESTMINSTER BANCORP 85,370 2,053,154
RECKITT & COLMAN 83,018 985,607
ROYAL BANK OF SCOTLAND GROUP 68,710 1,622,636
SCOTTISH & NEWCASTLE PLC 115,000 1,433,754
SCOTTISH POWER 285,910 2,354,910
SHELL TRANSPORT & TRADING 356,180 2,670,118
SMITHKLINE BEECHAM PLC 164,000 2,168,656
SMITHS INDUSTRIES 133,218 2,057,355
UNILEVER 233,546 2,075,772
VODAFONE GROUP PLC 126,000 2,320,871
WASSALL 209,943 847,716
--------------
TOTAL UNITED KINGDOM - (COST $42,101,393) 50,315,014
--------------
TOTAL EUROPE - (COST $130,319,627) 150,186,113
--------------
JAPAN - 19.2%
BRIDGESTONE CORPORATION 50,000 1,339,809
CANON 68,000 1,662,703
FAMILYMART COMPANY 15,000 709,680
FUJI PHOTO FILM 38,000 1,435,103
FUJITSU LIMITED 143,000 2,448,794
HITACHI 275,000 2,008,039
HONDA MOTOR 45,000 1,982,080
ITO - YOKADO 24,000 1,473,120
JAPAN TOBACCO INCORPORATED 77 773,740
KAO CORPORATION 79,000 2,004,438
KUBOTA CORPORATION 313,000 888,520
MABUCHI MOTOR 12,000 931,502
MARUI 79,000 1,310,493
MITSUI MARINE AND FIRE INSURANCE COMPANY LIMITED 160,000 886,954
NTT MOBILE COMMUNICATIONS 55 3,223,916
PROMISE 15,000 854,128
RISO KAGAKU 12,400 591,861
ROHM 21,000 2,532,239
SANWA INTERNATIONAL FINANCE, PREFERRED 123,000,000 1,169,025
SECOM COMPANY LIMITED 24,000 2,343,326
SHIN - ETSU CHEMICAL 67,950 2,162,201
SONY 28,200 2,632,976
TAISHO PHARMACEUTICAL 38,000 1,167,811
TOPPAN PRINTING 161,000 1,935,991
YAMANOUCHI PHARMACEUTICAL 81,000 2,563,892
--------------
TOTAL JAPAN - (COST $32,317,444) 41,032,341
--------------
LATIN AMERICA - 2.3%
ARGENTINA - 0.2%
YPF SOCIEDAD ANONIMA, ADR 9,500 399,000
--------------
TOTAL ARGENTINA - (COST $298,756) 399,000
--------------
</TABLE>
See notes to financial statements.
7
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
LATIN AMERICA - CONTINUED
BRAZIL - 0.5%
PETROLEO BRASILIEIRO SA, ADR 70,000 $ 1,102,500
--------------
TOTAL BRAZIL - (COST $835,316) 1,102,500
--------------
MEXICO - 1.6%
DESC SA DE CV, ADR 23,000 569,250
GRUPO FINANCIERO BANCOMER, SA DE CV 3,200,000 1,111,689
GRUPO TELEVISA SA, GDR * 27,000 1,107,000
TELEFONOS DE MEXICO SA, ADR 7,000 530,250
--------------
TOTAL MEXICO - (COST $2,539,512) 3,318,189
--------------
TOTAL LATIN AMERICA - (COST $3,673,584) 4,819,689
--------------
MIDDLE EAST - 0.2%
ISRAEL - 0.2%
ORBOTECH LIMITED * 10,500 504,000
--------------
TOTAL ISRAEL - (COST $430,639) 504,000
--------------
TOTAL MIDDLE EAST - (COST $430,639) 504,000
--------------
OTHER AREAS - 1.0%
OTHER AREAS - 0.3%
TB FINANCE (CAYMAN) LIMITED, 2.750%,
CONVERTIBLE 10/1/2004 (Y) 106,000,000 707,924
--------------
TOTAL OTHER AREAS - (COST $724,056) 707,924
--------------
TOTAL OTHER AREAS - (COST $724,056) 707,924
--------------
INVESTMENT COMPANIES - 0.7%
INDIAN OPPORTUNITIES FUND (A)* 98,911 944,600
NEAR EAST OPPORTUNITIES FUND (B)* 35,000 544,950
--------------
TOTAL INVESTMENT COMPANIES - (COST $1,557,391) 1,489,550
--------------
TOTAL OTHER AREAS - (COST $2,281,447) 2,197,474
--------------
PACIFIC BASIN - 6.2%
AUSTRALIA - 2.6%
BRAMBLES INDUSTRIES LIMITED 40,900 1,201,847
FOSTERS BREWING GROUP LIMITED 370,000 1,079,288
NEWS CORPORATION LIMITED 28,000 234,651
TELSTRA CORPORATION LIMITED 220,000 1,193,797
WESTPAC BANKING CORPORATION LIMITED 163,500 1,248,150
WOOLWORTHS LIMITED 191,500 608,280
--------------
TOTAL AUSTRALIA - (COST $5,155,995) 5,566,013
--------------
</TABLE>
See notes to financial statements.
8
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
PACIFIC BASIN - CONTINUED
HONG KONG - 1.9%
CHEUNG KONG (HOLDINGS) LIMITED 77,000 $ 700,361
CHINA TELECOM (HONG KONG) LIMITED 221,000 504,670
CLP HOLDINGS LIMITED 100 537
DAO HENG BANK GROUP LIMITED 131,000 532,383
HENDERSON LAND DEVELOPMENT COMPANY LIMITED 81,000 490,117
HONG KONG TELECOMMUNICATIONS LIMITED 198,800 533,485
HUTCHISON WHAMPOA 76,300 684,150
SWIRE PACIFIC LIMITED 99,000 555,606
--------------
TOTAL HONG KONG - (COST $3,441,355) 4,001,309
--------------
PHILIPPINES - 0.0%
BELLE CORPORATION, WARRANTS 10/6/2000 * 800,000 1,736
--------------
TOTAL PHILIPPINES - (COST $0) 1,736
--------------
SINGAPORE - 1.2%
CITY DEVELOPMENTS LIMITED 88,000 586,217
OVERSEAS CHINESE BANK CORPORATION, FOREIGN 24,000 224,960
OVERSEAS UNION BANK LIMITED, FOREIGN 151,000 774,450
SINGAPORE AIRLINES LIMITED, FOREIGN 98,000 901,256
--------------
TOTAL SINGAPORE - (COST $1,632,307) 2,486,883
--------------
SOUTH KOREA - 0.2%
SHINHAN BANK, GDR 17,810 425,659
--------------
TOTAL SOUTH KOREA - (COST $352,389) 425,659
--------------
TAIWAN - 0.3%
TAIWAN AMERICAN FUND (B)* 48,700 679,852
--------------
TOTAL TAIWAN - (COST $758,360) 679,852
--------------
TOTAL PACIFIC BASIN - (COST $11,340,406) 13,161,452
--------------
TOTAL COMMON AND PREFERRED STOCKS, RIGHTS, WARRANTS AND
CONVERTIBLE NOTES - (COST $180,747,513) o 212,342,716
--------------
PRINCIPAL
AMOUNT
SHORT TERM INVESTMENT - 2.1%
STATE STREET BANK AND TRUST COMPANY REPURCHASE
AGREEMENT, 4.250%, 5/3/1999 (C) $ 4,591,000 4,591,000
--------------
TOTAL SHORT TERM INVESTMENT - (COST $4,591,000) 4,591,000
--------------
TOTAL INVESTMENTS - (COST $185,338,513) - 101.4% 216,933,716
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - (1.4)% (3,068,651)
--------------
NET ASSETS - 100.0% $ 213,865,065
--------------
--------------
</TABLE>
See notes to financial statements.
9
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 1999
* Non-income producing security.
(Y) Reflected at par and denominated in Japanese yen.
(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
Taiwan American and Near East Opportunities 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, $4,591,000 par due
5/3/1999, is collateralized by United States Treasury Notes, 6.250%,
due 2/15/2007 with a market value of $4,687,679.
+ Percentages of long term investments are presented in the
portfolio by country. Percentages of long term investments by
industry are as follows: Aerospace 1.0%, Air Travel 0.4%,
Automobiles 3.3%, Banks 12.6%, Brewery 1.2%, Broadcasting 1.2%,
Chemicals 5.2%, Commercial Services 0.6%, Computer Services 0.6%,
Conglomerates 0.3%, Diversified 5.6%, Drugs & Health Care 9.2%,
Electric Utilities 1.1%, Electrical Equipment 3.2%, Electronics
4.0%, Financial Services 2.2%, Food & Beverages 1.6%, Hotels &
Restaurants 2.6%, Household Products 1.4%, Industrial Machinery
4.4%, Insurance 6.3%, Investment Companies 1.0%, Manufacturing
0.4%, Miscellaneous 1.0%, Oil & Gas 6.4%, Photography 1.4%,
Publishing 2.6%, Real Estate 1.7%, Retail 1.8%, Retail Trade 1.7%,
Telecommunications 11.0%, Telephone 1.9%, Tobacco 0.4%.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
See notes to financial statements.
10
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 1999
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $180,747,513) (Note B) $ 212,342,716
Investments in repurchase agreements, at value (Note B) 4,591,000
-----------------
Total Investments 216,933,716
Cash 875
Foreign currency, at value (cost $1,911,041) (Note B) 1,909,903
Receivable for investments sold 6,793,943
Receivable for currency sold 129,204
Receivable for forward currency contracts (Note B) 17,650
Dividend and interest receivable 512,076
Foreign tax reclaims receivable 189,998
Prepaid insurance expense 6
Deferred organization expense (Note B) 439
-----------------
TOTAL ASSETS 226,487,810
-----------------
LIABILITIES
Payable to custodian bank for foreign currency settlements 4,986,437
Payable for investments purchased 7,124,265
Payable for currency purchased 129,191
Management fee payable (Note C) 320,085
Administration fee payable (Note C) 8,739
Trustees fees payable (Note C) 3,585
Accrued expenses and other liabilities 50,443
-----------------
TOTAL LIABILITIES 12,622,745
-----------------
TOTAL NET ASSETS $ 213,865,065
-----------------
-----------------
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 174,093,229
Undistributed net investment income 1,146,244
Accumulated net realized gain on investment and foreign currency transactions 7,026,831
Net unrealized appreciation on investment and foreign currency transactions 31,598,761
-----------------
TOTAL NET ASSETS $ 213,865,065
-----------------
-----------------
NET ASSET VALUE PER SHARE $ 13.49
($213,865,065 / 15,852,476 shares of beneficial interest outstanding) -----------------
-----------------
</TABLE>
See notes to financial statements.
11
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED APRIL 30, 1999
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 304,424
Dividend income 3,078,533
Foreign taxes withheld (366,815)
-----------------
TOTAL INVESTMENT INCOME 3,016,142
-----------------
EXPENSES
Management fee (Note C) 1,148,111
Custodian fee 246,655
Administration fee (Note C) 119,757
Audit fee 24,999
Legal fees 18,937
Transfer agent fee 7,318
Trustees fees (Note C) 7,300
Amortization of deferred organization expenses (Note B) 2,548
Miscellaneous expenses 28,732
-----------------
TOTAL EXPENSES 1,604,357
-----------------
NET INVESTMENT INCOME 1,411,785
-----------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments 11,196,185
Net realized gain on foreign currency transactions 903,970
Net unrealized appreciation on:
Investments 1,056,622
Foreign currency transactions 206,000
-----------------
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 13,362,777
-----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 14,774,562
-----------------
-----------------
</TABLE>
See notes to financial statements.
12
<PAGE>
MCBT OPPORTUNISTIC EAFE 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 $ 159,362,284 $ 120,649,807
--------------- ---------------
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income 1,411,785 1,449,358
Net realized gain on investment transactions 11,196,185 11,993,175
Net realized gain (loss) on foreign currency transactions 903,970 (465,273)
Net unrealized appreciation (depreciation) on:
Investments 1,056,622 15,312,088
Foreign currency transactions 206,000 (190,193)
--------------- ---------------
Net increase in net assets from operations 14,774,562 28,099,155
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (1,261,524) (1,634,448)
Net realized gains (8,700,165) (4,504,920)
--------------- ---------------
Total distributions (9,961,689) (6,139,368)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 65,935,613 14,186,364
Reinvestment of dividends and distributions to shareholders 8,591,028 5,801,630
Cost of shares repurchased (25,412,041) (3,331,509)
Paid in capital from subscription and redemption fees 575,308 96,205
--------------- ---------------
Total increase in net assets from capital share transactions 49,689,908 16,752,690
--------------- ---------------
NET INCREASE IN NET ASSETS 54,502,781 38,712,477
--------------- ---------------
NET ASSETS at end of year (includes undistributed net investment $ 213,865,065 $ 159,362,284
income (loss) of $1,146,244 and $(173,999), respectively) --------------- ---------------
--------------- ---------------
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 5,165,192 1,082,176
Shares issued in reinvestment of distributions to shareholders 667,005 492,917
Less shares repurchased (1,952,430) (258,152)
--------------- ---------------
Net share transactions 3,879,767 1,316,941
--------------- ---------------
--------------- ---------------
</TABLE>
See notes to financial statements.
13
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING FOR THE PERIOD
<TABLE>
<CAPTION>
Year Year Year Year July 1, 1994*
Ended Ended Ended Ended through
April 30, 1999 April 30, 1998 April 30, 1997 April 30, 1996 April 30, 1995
-------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period $ 13.310 $ 11.320 $ 11.250 $ 9.860 $ 10.000
----------- ----------- ----------- ----------- -----------
Net investment income 0.192 0.095 0.134 0.314 0.055
Net realized and unrealized gain (loss) on investment
and foreign currency transactions 0.786 2.462 0.286 1.239 (0.323)
----------- ----------- ----------- ----------- -----------
Total from investment operations 0.978 2.557 0.420 1.553 (0.268)
----------- ----------- ----------- ----------- -----------
Less distributions:
Net investment income (0.106) (0.153) (0.229) (0.167) 0.000
In excess of net investment income 0.000 0.000 (0.127) (0.023) 0.000
Net realized gains (0.728) (0.422) 0.000 0.000 0.000
----------- ----------- ----------- ----------- -----------
Total distributions (0.834) (0.575) (0.356) (0.190) 0.000
----------- ----------- ----------- ----------- -----------
Paid in capital from subscription and
redemption fees (Note B) 0.036 0.008 0.006 0.027 0.128
----------- ----------- ----------- ----------- -----------
Net asset value, end of period $ 13.490 $ 13.310 $ 11.320 $ 11.250 $ 9.860
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
TOTAL INVESTMENT RETURN (1) (2) 7.92% 23.33% 3.85% 16.17% (1.40)%
- ----------------------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------
Net assets, end of period $213,865,065 $159,362,284 $120,649,807 $108,295,237 $72,660,677
Operating expenses, net, to average
net assets (Note C) 0.96% 0.96% 0.98% 1.00% 1.00%(3)
Operating expenses, gross, to average
net assets (Note C) 0.96% 0.96% 0.98% 1.05% 1.37%(3)
Net investment income to average net assets 0.85% 1.08% 0.90% 1.46% 1.32%(3)
Portfolio turnover rate 82% 63% 49% 37% 39%
Per share amount of fees waived (Note C) $ 0.000 $ 0.000 $ 0.000 $ 0.012 $ 0.015
- -----------------------------------------------------------------------------------------------------------------------------------
</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 statements.
14
<PAGE>
MCBT OPPORTUNISTIC EAFE 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 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 Opportunistic
EAFE Fund (the "Fund") commenced investment operations on July 1, 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.
15
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
FOREIGN CURRENCY TRANSLATIONS (CONTINUED) - 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.
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,
1999:
<TABLE>
<CAPTION>
Unrealized
Delivery Date Local Currency Face Amount Value Appreciation
------------- -------------- ----------- ----- ------------
<S> <C> <C> <C> <C> <C>
Japanese Yen (sell) July 6, 1999 1,160,489,220 $ 9,823,000 $ 9,805,350 $ 17,650
</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, 1999, $391,940 was collected in purchase premiums and $183,368 was
collected in redemption fees.
16
<PAGE>
MCBT OPPORTUNISTIC EAFE 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 28, 1998, the Fund declared a long term capital gain
distribution of $8,550,013, representing $0.716 per share.
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, 1999, it was not
necessary for the Investment Manager to waive any 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, 1999 were $184,467,179
and $132,389,824, 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) APPRECIATION
--------------- ------------ -------------- ---------------
<S> <C> <C> <C>
$ 186,310,561 $ 34,425,626 $ (3,802,471) $ 30,623,155
</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 19% of the Fund.
17
<PAGE>
MCBT OPPORTUNISTIC EAFE FUND
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Continued)
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.
- -------------------------------------------------------------------------------
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 $366,815 (of the total $366,815 taxes withheld)
and $3,036,427, respectively.
18
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
---------------------------------
To the Trustees and Shareholders of the
Martin Currie Business Trust - Opportunistic EAFE 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 Opportunistic
EAFE 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
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.
- -------------------------------------------------------------------------------
