<PAGE>
MARTIN CURRIE BUSINESS TRUST
GLOBAL EMERGING MARKETS FUND
ANNUAL REPORT
APRIL 30, 2000
<PAGE>
--------------------------------------------------------------------------------
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
PROFILE AT APRIL 30, 2000
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 $166.4m
PERFORMANCE Total return from May 1, 1999 through April 30, 2000
- MCBT - Global Emerging Markets Fund
(excluding all transaction fees) +25.0%
- Morgan Stanley Capital International - Emerging
Markets Free Index +22.1%
Annualized total return from February 14, 1997 through April
30, 2000
- MCBT - Global Emerging Markets Fund (excluding all
transaction fees) +1.0%
- MCBT - Global Emerging Markets Fund (including all
transaction fees) +0.3%
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, 2000.
- MCBT - Global Emerging Markets Fund (excluding all
transaction fees) +1.1%
- MCBT - Global Emerging Markets Fund (including all
transaction fees) +0.4%
- Morgan Stanley Capital International - Emerging
Markets Free Index -2.8%
<TABLE>
<CAPTION>
3/1/97 (a) 4/30/97 4/30/98 4/30/99 4/30/00
---------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
MCBT Emerging Markets Fund $10,000 $9,850 $9,041 $8,114 $10,142
MSCI Emerging Markets Free Index $10,000 $9,750 $8,337 $7,487 $9,142
</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, 2000
PORTFOLIO COMMENTS Over the 12 months to April 30, 2000 our fund rose by
25.0%, compared to a rise of 22.1% from the MSCI Emerging
Markets Free index. But the good absolute performance
disguises significant volatility.
The reporting period started well. As the Japanese
authorities started to target zero interest rates, the
worst fears about the country appeared to dissipate. Brazil
had devalued three months earlier, completing the long list
of casualties from the 1998 Russian-induced crisis. But the
most obvious improvements were to be found in Asia, outside
of Japan, where currencies had stabilised and interest
rates had fallen. The fund played this theme by
overweighting ASEAN countries, particularly Thailand and
Indonesia, early in the period. Stocks such as SIAM CEMENT
and BANK PAN INDONESIA provided significant returns. Later
in the period, we increased the allocation to South Korea
and Taiwan, with particular emphasis on communication
equipment manufacturers and DRAM producers such as SAMSUNG
ELECTRONICS. Gains in these stocks were somewhat mitigated
by the Nasdaq sell off late in the period.
In Latin America, we concentrated mainly in Brazil and
Mexico. Macroeconomic conditions improved in both
countries. TELEFONOS DE MEXICO more than doubled, before
giving back some of its gains in the last six weeks. In
Brazil, telecom stocks as well as PETROBRAS, the Brazilian
oil company, provided the best returns.
Through most of the period we have been slightly
underweight in EMEA. But within the region, we had strong
country bets. These included an underweight position in
Greece and an overweight position in the Middle East,
including Egypt, for most of the period. The fund made good
money in Central Europe, but less so in South Africa.
ORBOTECH, a leading manufacturer of automated optical
inspection systems based in Israel, was one of the top
performers.
OUTLOOK
The medium term outlook for emerging markets remains
positive. Most economies are in a cyclical upward trend.
They are just starting to enjoy the benefits of the
structural adjustment resulting from the recent crises in
from Asia and Russia. Inflation and interest rate cycles
are therefore more positive than for developed markets. But
in all likelihood, the short-term outlook will remain
difficult, with markets being driven by US markets, and
Nasdaq in particular.
Once US markets have settled, we believe that investors
will come back in search of growth. At this time they will
reward emerging markets, where the economic upturn is still
recent and fundamentals are the best we have seen in at
least five years.
INVESTMENT Jean de Bolle joined Martin Currie as head of emerging
MANAGER PROFILE markets in January 2000 from Global Asset Management where
he was senior portfolio manager. He had previously worked
for Goldman Sachs in Hong Kong, Foreign and Colonial
Emerging Markets, where he was deputy chief investment
officer, and National Economic Research Associates. Having
been brought up in Brazil, Jean graduated from the London
School of Economics with a first class BSc in monetary
economics and an MSc in economics. Jean is a member of the
International Strategy Group.
2
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
PROFILE AT APRIL 30, 2000
ASSET ALLOCATION
(% of net assets)
[PIE CHART]
<TABLE>
<CAPTION>
LARGEST HOLDINGS
BY REGION/COUNTRY % OF NET ASSETS
<S> <C> <C> <C>
AFRICA
Softline (South Africa) 1.4
EUROPE
Lukoil, ADR (Russia) 2.7
Vestel (Turkey) 1.4
LATIN AMERICA
Telefonos de Mexico, ADR (Mexico) 5.2
Petrobas (Brazil) 1.6
MIDDLE EAST
Near East Opportunities Fund (Investment Companies) 2.9
OTHER AREAS
Indian Opportunities Fund (Investment Companies) 4.8
PACIFIC BASIN
Samsung Electronics America, Inc. (South Korea) 5.2
Taiwan Semiconductor Manufacturing (Taiwan) 3.3
</TABLE>
3
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
COMMON AND PREFERRED STOCKS AND WARRANTS - 98.9%
AFRICA - 6.1%
KENYA - 0.0%
KENYA COMMERCIAL BANK # 1 $ 0
--------------
TOTAL KENYA - (COST $1) 0
SOUTH AFRICA - 6.1%
COMPAREX HOLDINGS LIMITED 780,000 1,167,613
DE BEERS 52,000 1,065,998
GENBEL SECURITIES LIMITED 170,000 827,373
PRIMEDIA LIMITED 550,000 673,254
SAPPI LIMITED 190,000 1,331,023
SASOL LIMITED 270,000 1,584,839
SOFTLINE * 2,200,000 2,261,485
STANDARD BANK INVESTMENT CORPORATION 350,000 1,290,465
--------------
TOTAL SOUTH AFRICA - (COST $14,332,535) 10,202,050
--------------
TOTAL AFRICA - (COST $14,332,536) 10,202,050
--------------
EUROPE - 18.4%
CZECH REPUBLIC - 1.2%
CESKE RADIOKOMUNIKACE * 44,500 2,016,963
--------------
TOTAL CZECH REPUBLIC - (COST $1,037,632) 2,016,963
--------------
FRANCE - 2.6%
CREDIT AGRICOLE INDOSUEZ, WARRANTS 01/25/01 * 11,000 2,017,749
CREDIT AGRICOLE INDOSUEZ, WARRANTS 01/26/01 * 144,000 760,500
CREDIT AGRICOLE INDOSUEZ, WARRANTS 02/15/01 * 25,000 729,429
CREDIT AGRICOLE INDOSUEZ, WARRANTS 02/21/01 * 12,500 882,100
--------------
TOTAL FRANCE - (COST $5,061,906) 4,389,778
--------------
GREECE - 1.4%
HELLENIC TELECOMMUNICATION ORGANIZATION SA (OTE) 57,600 1,296,674
STET HELLAS TELECOMMUNICATIONS SA, ADR * 43,750 1,000,781
--------------
TOTAL GREECE - (COST $2,305,467) 2,297,455
--------------
HUNGARY - 1.7%
MATAV RT., ADR 30,200 1,051,337
OTP BANK RT., GDR 21,500 956,213
SYNERGON INFORMATION SYSTEMS 70,953 755,987
--------------
TOTAL HUNGARY - (COST $2,654,076) 2,763,537
--------------
POLAND - 1.8%
ELEKTRIM SPOLKA AKCYJNA SA * 112,000 1,403,132
TELEKOMUNIKACJA POLSKA SA 144A, GDR 206,500 1,584,887
--------------
TOTAL POLAND - (COST $2,584,225) 2,988,019
--------------
</TABLE>
See notes to financial statements.
4
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
RUSSIA - 4.3%
AO MOSENERGO, ADR 360,000 $ 2,205,000
BRUNSWICK RUSSIAN GROWTH FUND * 2,279 394,225
LUKOIL, ADR 75,000 4,500,000
- --------------
TOTAL RUSSIA - (COST $6,115,101) 7,099,225
--------------
TURKEY - 5.4%
HURRIYET GAZETECILIK VE MATBAACILIK AS 74,834,000 1,897,041
TURKIYE GARANTI BANKASI AS 110,240,000 1,857,046
VESTEL * 6,150,000 2,313,391
YAPI VE KREDI BANKASI AS 48,330,000 1,541,337
YAZICILAR AS * 13,733,000 1,325,146
--------------
TOTAL TURKEY - (COST $6,349,986) 8,933,961
--------------
TOTAL EUROPE - (COST $26,108,393) 30,488,938
--------------
LATIN AMERICA - 25.7%
BRAZIL - 12.3%
ARACRUZ CELULOSE SA 23,000 429,813
BANCO BRADESCO SA, PREFERRED 246,225,815 1,800,156
BANCO ITAU SA, PREFERRED 18,241,318 1,363,931
COMPANHIA BRASILEIRA DE DISTRIBUICAO, GDR 27,800 792,300
COMPANHIA DE SANEAMENTO BASICO DO ESTADO DE SAO PAULO 10,902,418 1,029,555
COMPANHIA PARANAENSE DE ENERGIA-COPEL 210,000 1,548,750
ELECTROBRAS, ADR 127,000 904,875
ELETROPAULO METROPOLITANA - ELECTRICIDADE DE SAO PAULO SA 9,617,886 554,007
EMBRATEL PARTICIPACOES SA 98,500 2,216,250
GERDAU SA, PREFERRED 32,305,121 780,118
PETROBRAS 11,241,073 2,677,810
TELE CENTRO SUL PARTICIPACOES SA 11,908 759,135
TELE NORTE LESTE PARTICIPACOES SA 97,232 1,731,941
TELECOMUNICACOES DO PARANA SA, PREFERRED 3,313,212 1,148,751
TELESP CELULAR PARTICIPACOES SA 14,500 639,813
UNIBANCO - UNIAO DE BANCOS BRASILEIROS SA, GDR 60,000 1,496,250
VOTORANTIM CELULOSE E PAPEL SA, ADR 40,000 590,000
--------------
TOTAL BRAZIL - (COST $19,709,497) 20,463,455
--------------
MEXICO - 13.4%
ALFA SA DE CV, CL A, SERIES A 468,000 1,447,269
CEMEX SA DE CV, ADR, SERIES B * 55,000 1,203,125
CIFRA SA DE CV, SERIES V * 500,653 1,154,534
CONTROLADORA COMERCIAL MEXICANA SA DE CV 860,000 904,782
FOMENTO ECONOMICO MEXICANO SA DE CV 29,500 1,216,875
GRUPO ELEKTRA SA DE CV, GDR 42,000 425,250
GRUPO FINANCIERO BANAMEX, CL B * 545,000 1,969,182
</TABLE>
See notes to financial statements.
5
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
MEXICO - (CONTINUED)
GRUPO IUSACELL SA DE CV, ADR * 32,000 $ 510,000
GRUPO MEXICO SA, SERIES B 199,000 812,072
GRUPO TELEVISA, ADR * 32,500 2,061,719
TELEFONOS DE MEXICO, ADR 147,600 8,680,725
TV AZTECA SA DE CV, ADR 180,000 1,980,000
--------------
TOTAL MEXICO - (COST $18,707,486) 22,365,533
--------------
TOTAL LATIN AMERICA - (COST $38,416,983) 42,828,988
--------------
MIDDLE EAST - 8.0%
EGYPT - 0.4%
EFG HERMES HOLDING SAE 144A, GDR 160,035 636,139
--------------
TOTAL EGYPT - (COST $522,763) 636,139
ISRAEL - 4.7%
BANK LEUMI LE-ISRAEL 905,000 1,966,637
IDB DEVELOPMENT CORPORATION LIMITED 49,585 1,872,776
NICE SYSTEMS LIMITED, ADR * 26,700 1,747,181
ORBOTECH LIMITED * 19,500 1,662,375
SAPIENS INTERNATIONAL CORPORATION NV * 85,000 674,687
--------------
TOTAL ISRAEL - (COST $7,453,394) 7,923,656
INVESTMENT COMPANIES - 2.9%
NEAR EAST OPPORTUNITIES FUND (B) 260,000 4,869,800
--------------
TOTAL INVESTMENT COMPANIES - (COST $4,028,450) 4,869,800
--------------
TOTAL MIDDLE EAST - (COST $12,004,607) 13,429,595
--------------
OTHER AREAS - 4.8%
INVESTMENT COMPANIES -4.8%
INDIAN OPPORTUNITIES FUND (A) * 523,000 7,980,980
--------------
TOTAL INVESTMENT COMPANIES - (COST $4,852,425) 7,980,980
--------------
TOTAL OTHER AREAS - (COST $4,852,425) 7,980,980
--------------
PACIFIC BASIN - 35.9%
HONG KONG - 1.9%
TCL INTERNATIONAL HOLDINGS LIMITED 5,341,000 3,222,757
--------------
TOTAL HONG KONG - (COST $1,693,148) 3,222,757
--------------
INDONESIA - 0.1%
PT BANK PAN INDONESIA, TBK, WARRANTS 7/08/2002 * 5,124,000 81,076
PT TELEKOMUNIKASI INDONESIA, ADR 720 6,210
--------------
TOTAL INDONESIA - (COST $8,668) 87,286
--------------
</TABLE>
See notes to financial statements.
6
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
<TABLE>
<CAPTION>
SHARES VALUE
------ -----
<S> <C> <C>
MALAYSIA - 2.6%
KONSORTIUM LOGISTIK BERHAD 674,000 $ 1,064,210
MALAYAN BANKING BERHAD 486,000 2,020,737
MALAYSIAN AIRLINE SYSTEM BERHAD 1,400,000 1,223,158
--------------
TOTAL MALAYSIA - (COST $4,924,702) 4,308,105
--------------
SOUTH KOREA - 13.0%
HAANSOFT INCORPORATED 50,320 888,734
HOUSING & COMMERCIAL BANK KOREA 6,628 113,478
HYUNDAI ELECTRONICS INDUSTRIES COMPANY * 100,630 1,595,934
KOREA TELECOM CORPORATION, ADR 55,670 1,920,615
LOCUS CORPORATION * 10,790 1,312,593
MIRAE COMPANY 230,000 1,189,637
SAMSUNG ELECTRO-MECHANICS COMPANY 38,301 2,605,745
SAMSUNG ELECTRONICS AMERICA INCORPORATED 32,074 8,670,602
SK TELECOM COMPANY LIMITED 12,420 3,301,554
--------------
TOTAL SOUTH KOREA - (COST $18,432,130) 21,598,892
--------------
TAIWAN - 14.4%
COMPAL ELECTRONICS INCORPORATED 704,366 1,807,247
COMPEQ MANUFACTURING COMPANY LIMITED 255,000 1,408,564
EVERGREEN MARINE CORPORATION 2,431,000 1,906,978
GIGAMEDIA LIMITED * 19,000 456,000
PACIFIC ELECTRICAL WIRE & CABLE COMPANY LIMITED 1,517,196 1,497,608
POWERCHIP SEMICONDUCTOR CORPORATION, GDR * 75,000 1,734,375
SYNNEX TECHNOLOGY INTERNATIONAL CORPORATION 362,000 2,449,224
TAIWAN SEMICONDUCTOR MANUFACTURING 861,738 5,548,697
UNITED WORLD CHINESE COMMERCIAL BANK 2,171,194 2,143,163
VIA TECHNOLOGIES INCORPORATED 180,000 3,000,490
WYSE TECHNOLOGY TAIWAN LIMITED 954,000 2,057,983
--------------
TOTAL TAIWAN - (COST $20,781,228) 24,010,329
--------------
THAILAND - 2.9%
TELECOMASIA CORPORATION PUBLIC COMPANY LIMITED * 2,800,000 3,751,477
THAI PETROCHEMICAL INDUSTRY PUBLIC COMPANY LIMITED * 4,000,000 977,276
--------------
TOTAL THAILAND - (COST $6,149,881) 4,728,753
--------------
INVESTMENT COMPANIES - 1.0%
THE CHINA HEARTLAND FUND (B) * # 184,944 1,703,334
--------------
TOTAL INVESTMENT COMPANIES - (COST $1,000,000) 1,703,334
--------------
TOTAL PACIFIC BASIN - (COST $52,989,757) 59,659,456
--------------
TOTAL COMMON AND PREFERRED STOCKS
AND WARRANTS - (COST $148,704,701) + 164,590,007
--------------
TOTAL INVESTMENTS - (COST $148,704,701) - 98.9% 164,590,007
CASH, RECEIVABLES AND OTHER ASSETS, LESS LIABILITIES - 1.1% 1,798,238
--------------
NET ASSETS - 100.0% $ 166,388,245
=================
</TABLE>
See notes to financial statements.
7
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
SCHEDULE OF INVESTMENTS
APRIL 30, 2000
# Illiquid security. Some restrictions may apply to the resale of this
security due to limited trading volume.
* Non-income producing security.
144A Securities 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.
(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 China
Heartland and Near East Opportunities Funds. 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:
Air Travel 0.7%, Banks 10.0%, Broadcasting 4.3%, Cement 0.7%, Computers
4.5%, Computers Services 2.8%, Conglomerates 0.6%, Diversified 3.4%,
Electric Utilities 3.1%, Electrical Equipment 1.7%, Electronics 15.5%,
Financial Services 4.7%, Food & Beverages 0.5%, Investment Companies 9.0,
Mining 0.5%, Newspapers 1.1%, Oil & Gas 5.3%, Paper 1.4%, Petroleum
Services 0.6%, Retail Trade 1.5%, Semi-Conductor Manufacturing Equipment
4.4%, Steel 0.5%, Telecommunications 20.4%, Transportation 1.1% Water
Utilities 0.6%.
ADR American Depositary Receipts.
GDR Global Depositary Receipts.
8
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $148,704,701) (Note B) $ 164,590,007
Foreign currency, at value (cost $2,620,221) (Note B) 2,598,597
Receivable for investments sold 1,821,916
Dividend and interest receivable 493,508
Foreign tax reclaims receivable 232
Prepaid Organization expense 4,532
-----------------
TOTAL ASSETS 169,508,792
-----------------
LIABILITIES
Payable to custodian bank 26,181
Payable for investments purchased 2,607,306
Payable for currency purchased 10,007
Management fee payable (Note C) 353,081
Administration fee payable (Note C) 10,433
Trustees fees payable (Note C) 1,193
Deferred Country Taxes Payable 14,376
Accrued expenses and other liabilities 97,970
-----------------
TOTAL LIABILITIES 3,120,547
-----------------
TOTAL NET ASSETS $ 166,388,245
=================
COMPOSITION OF NET ASSETS:
Paid-in-capital $ 137,745,558
Undistributed net investment loss (2,865,983)
Accumulated net realized gain on investment and foreign currency transactions 15,656,297
Net unrealized appreciation on investment and foreign currency transactions 15,852,373
-----------------
TOTAL NET ASSETS $ 166,388,245
=================
NET ASSET VALUE PER SHARE $ 9.88
=================
($166,388,245 / 16,843,280 shares of beneficial interest outstanding)
</TABLE>
See notes to financial statements.
9
<PAGE>
MCBT GLOBAL EMERGING MARKETS FUND
--------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
YEAR ENDED APRIL 30, 2000
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest income $ 151,896
Dividend income 2,267,868
Foreign taxes withheld (257,722)
-----------------
TOTAL INVESTMENT INCOME 2,162,042
-----------------
EXPENSES
Management fee (Note C) 1,162,592
Custodian fee 320,329
Administration fee (Note C) 118,243
Audit fee 25,980
Legal fees 9,856
Transfer agent fee 5,518
Trustees fees (Note C) 2,414
Amortization of deferred organization expenses (Note B) 2,555
Miscellaneous expenses 18,946
-----------------
TOTAL EXPENSES 1,666,433
-----------------
NET INVESTMENT INCOME 495,609
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY
Net realized gain on investments (net of foreign taxes paid of $874,887) 39,280,611
Net realized loss on foreign currency transactions (369,500)
Net unrealized appreciation (depreciation) on:
Investments (6,425,144)
Foreign currency transactions 12,901
NET GAIN ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS 32,498,868
-----------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 32,994,477
=================
</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, 2000 APRIL 30, 1999
--------------- ---------------
<S> <C> <C>
NET ASSETS at beginning of period $ 131,628,560 $ 99,831,879
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income 495,609 1,077,312
Net realized gain (loss) on investment transactions 39,280,611 (17,714,151)
Net realized (loss) on foreign currency transactions (369,500) (518,499)
Net unrealized appreciation (depreciation) on:
Investments (6,425,144) 18,462,789
Foreign currency transactions 12,901 (425,985)
--------------- ---------------
Net increase in net assets from operations 32,994,477 881,466
--------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income 0 (199,259)
In excess of net investment income 0 (539,254)
Net realized gains (2,061,935) 0
---------------- ---------------
Total Distributions (2,061,935) (738,513)
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 1,908,468 30,915,215
Reinvestment of dividends and distributions to shareholders 2,061,935 738,513
Cost of shares repurchased (143,260) --
Total increase in net assets from capital share transactions 3,827,143 31,653,728
--------------- ---------------
NET INCREASE IN NET ASSETS 34,759,685 31,796,681
--------------- ---------------
NET ASSETS at end of period (includes undistributed net investment $ 166,388,245 $ 131,628,560
=============== ===============
losses of ($2,865,983) and ($719,369), respectively)
OTHER INFORMATION:
CAPITAL SHARE TRANSACTIONS:
Shares sold 234,164 5,212,543
Shares issued in reinvestment of distributions to shareholders 192,345 117,598
Less shares repurchased (16,354) 0
--------------- ---------------
Net share transactions 410,155 5,330,141
=============== ===============
</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(4) Year Year February 14, 1997*
Ended Ended Ended Through
APRIL 30, 2000 APRIL 30, 1999 APRIL 30, 1998 APRIL 30, 1997
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning of period $ 8.010 $ 8.990 $ 10.020 $ 10.000
------------- ------------- ------------- --------
Net investment income 0.030 0.081 0.004 0.055
Net realized and unrealized gain (loss) on
investment and foreign currency transactions 1.964 (1.016) (0.883) (0.035)
------------- ------------- ------------- -------------
Total from investment operations 1.994 (0.935) (0.879) 0.020
------------- ------------- ------------- -------------
Less distributions:
Net investment income (0.000) (0.012) (0.086) 0.000
In excess of net investment income (0.000) (0.033) (0.053) 0.000
Net realized gains (0.124) 0.000 (0.058) 0.000
------------- ------------- ------------- -------------
Total distributions (0.124) (0.045) (0.197) 0.000
------------- ------------- ------------- -------------
Paid in capital from subscription and
redemption fees 0.000 0.000 0.046 0.000
------------- ------------- ------------- -------------
Net asset value, end of period $ 9.880 $ 8.010 $ 8.990 $ 10.020
============= ============= ============= =============
TOTAL INVESTMENT RETURN (1) (2) 25.00% (10.26)% (8.21)% 0.20%
----------------------- ============ ============ ============ ============
RATIOS AND SUPPLEMENTAL DATA
----------------------------
Net assets, end of period 166,388,245 $131,628,560 $99,831,879 $50,095,856
Operating expenses, net, to average net assets (Note C) 1.07% 1.12% 1.14% 1.33%(3)
Operating expenses, gross, to average net assets (Note C) 1.07% 1.12% 1.14% 1.33%(3)
Net investment income to average net assets 0.32% 1.16% 0.98% 2.83%(3)
Portfolio turnover rate 146% 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.
(4) The per share amounts were computed using an average number of shares
outstanding during the year.
See notes to financial statements.
12
<PAGE>
MCBT GLOBAL EMERGING MARKETS 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 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, 2000.
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 were deferred and were 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 are 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 are minimal or in other
circumstances at the Manager's discretion. Effective October 1, 1998, the Fund
eliminated all such 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.
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, 2000 were $225,314,586 and
$220,670,065, 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, 2000 were as follows:
<TABLE>
<CAPTION>
IDENTIFIED GROSS UNREALIZED NET UNREALIZED
COST APPRECIATION (DEPRECIATION) APPRECIATION
<S> <C> <C> <C> <C>
$153,704,606 $27,635,925 $(16,750,524) $10,885,401
</TABLE>
NOTE E - PRINCIPAL SHAREHOLDERS
As of April 30, 2000 there was one shareholder 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) 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, 2000, 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 $1,132,609 (which is comprised of $257,722 out of the
$257,722 total taxes withheld and $874,887 of Thailand capital gain taxes paid)
and $1,459,848, 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, 2000, and the results of its operations, the changes
in its net assets and the financial highlights for the periods indicated, in
conformity with accounting principles generally accepted in the United States.
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 auditing standards generally accepted in the United States, 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, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Boston, Massachusetts
June 23, 2000
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.
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