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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                   FORM 10-K
(MARK ONE)
[X]             ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
                  For The Fiscal Year Ended December 31, 1997
                                       or

[  ]          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                      THE SECURITIES EXCHANGE ACT OF 1934
          For The Transition Period From ____________ to ____________

                         Commission File Number 0-8841

                            The Pioneer Group, Inc.
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                        <C>
                DELAWARE                                  13-5657669
     (State or other jurisdiction of                   (I.R.S. Employer
     incorporation or organization)                   Identification No.)
</TABLE>

                                60 STATE STREET,
                          BOSTON, MASSACHUSETTS 02109
                                 (617) 742-7825
  (Address, including zip code, and telephone number, including area code, of
                          principal executive offices)

     Securities registered pursuant to Section 12(b) of the Act: NONE

     Securities registered pursuant to Section 12(g) of the Act:

                    COMMON STOCK, PAR VALUE $0.10 PER SHARE
                                (Title of Class)

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                             Yes  X        No ____

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [  ].

     Based on the last sale price of the Registrant's Common Stock on the Nasdaq
National Market of $28.875 on March 24, 1998, the aggregate market value of the
shares of voting stock held by non-affiliates of the Registrant on that date was
$621,603,011.

     As of March 24, 1998, 25,391,170 shares of the Registrant's Common Stock,
$0.10 par value, were outstanding.

                      DOCUMENTS INCORPORATED BY REFERENCE

(1) Portions of the 1997 Annual Report to Stockholders are incorporated by
    reference into Parts I, II and IV (as indicated in such parts).

(2) Certain information called for by Part III (as indicated therein) is
    incorporated from the Registrant's definitive proxy materials for use in
    connection with the 1998 Annual Meeting of Stockholders.

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                                     PART I

ITEM 1.  BUSINESS.

                                    OVERVIEW

     WORLDWIDE FINANCIAL SERVICES.  The Pioneer Group, Inc., a corporation
organized under the laws of the State of Delaware in 1956 (the "Company"), and
its wholly owned subsidiaries, are engaged in four lines of financial services
businesses in the United States: (i) investment manager to 33 open-end U.S.
registered investment companies and one closed-end U.S. registered investment
company (collectively, the "mutual funds") and six institutional accounts, (ii)
distributor of shares of open-end mutual funds, (iii) shareholder servicing
agent for open-end mutual funds, and (iv) venture capital investor and manager.
The Company also provides global real estate management and advisory services to
institutions and corporations in the U.S., Russia and Poland.

     The Company's international financial services businesses include
investment operations in: (i) Warsaw, Poland, where the Company manages and
distributes units of four mutual funds available to Polish Citizens, owns 98% of
a brokerage company and 50% of a unitholder servicing agent and manages an
institutional venture capital fund, (ii) Dublin, Ireland, where the Company
distributes shares of, manages and services six offshore investment funds sold
primarily in Western Europe, and (iii) Moscow, Russia, where the Company
provides financial services, including investment advisory, investment banking,
brokerage and transfer agency services, distributes shares of, manages and
services two open-end mutual funds available to Russian citizens and owns 51% of
the First Voucher Fund, the largest Russian voucher investment fund. In
addition, the Company has investment management operations in the Czech Republic
and has invested in investment management operations in India and Taiwan.

     NATURAL RESOURCE DEVELOPMENT.  The Company's indirect wholly owned
subsidiary, Pioneer Goldfields Limited ("Pioneer Goldfields"), conducts mining
and exploration activities in the Republic of Ghana and exploration activities
elsewhere in Africa. Pioneer Goldfields' principal asset is its ownership of 90%
of the outstanding shares of Teberebie Goldfields Limited, which operates a gold
mine in the western region of the Republic of Ghana. The Company also
participates in several natural resource development ventures in Russia. The
Company's subsidiary, Pioneer Forest, Inc. ("Pioneer Forest"), conducts (through
three Russian subsidiaries) timber harvesting and timber development activities
in the Russian Far East. Pioneer Forest's principal asset is its ownership of
95% of the outstanding shares of Closed Joint-Stock Company "Forest-Starma,"
which commenced commercial timber operations in January 1997. The Company also
is conducting a gold exploration project in the same region.

                          WORLDWIDE FINANCIAL SERVICES

DOMESTIC INVESTMENT MANAGEMENT

     The Company's domestic investment management business includes the U.S.
registered mutual funds, the offshore funds registered in Ireland and private
institutional accounts, all of which are advised by the Company's wholly owned
subsidiary, Pioneering Management Corporation ("Pioneering Management"). This
business also includes distribution, shareholder servicing and transfer agency
activities related to these investment products.

     U.S. Mutual Funds.  Pioneering Management serves as investment manager to
33 domestic open-end mutual funds and one domestic closed-end mutual fund,
consisting of eight domestic growth portfolios, seven international growth
portfolios, nine growth and income portfolios, six income portfolios, two
tax-free income portfolios and two money market portfolios. These portfolios
include Pioneer Independence Fund which commenced operations in March 1998. All
of these funds (hereinafter referred to collectively as the "Funds") are
registered under the Investment Company Act of 1940, as amended (the "1940
Act").

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     At March 15, 1998, the Funds had aggregate net assets of approximately
$21.7 billion. In managing such assets, Pioneering Management employed at March
1, 1998, 135 persons on a full-time basis, including 20 fund managers and 46
investment analysts and support staff.

     Pioneering Management manages each Fund pursuant to a management contract
which is renewable annually by vote of either the Fund's Board of Trustees
(including a majority of members who are not "interested persons" as defined
under the 1940 Act) or the Fund's shareholders. All management contracts
terminate if assigned and may be terminated by either party without penalty on
60 days' written notice. The management contracts for the Funds (other than
Funds that were established in 1997 or 1998) were all renewed for an additional
year in 1997. Under these contracts, Pioneering Management is authorized in its
discretion to buy and sell securities for the accounts of the Funds, subject to
certain limitations. In addition, the management contracts between the Funds and
Pioneering Management define the ordinary operating expenses to be assumed by
each.

     As compensation for its management services, Pioneering Management receives
management fees from the Funds that range from 0.40% to 1.25% per year of
average daily net assets depending on the Fund. Three of the Funds (including
the two largest Funds) have a management fee that is adjusted based upon the
Fund's performance relative to the performance of an established index
("performance fees"). The Board of Trustees of three additional funds has
recently approved fee increases, which, if approved by shareholders, will add
performance fees to two of these three funds. For 1997, 1996 and 1995,
Pioneering Management received revenues from management fees from the Funds of
approximately $107 million, $76 million and $54 million, respectively. On an
interim basis, Pioneering Management has agreed not to impose a portion of its
management fees and to make other arrangements, if necessary, to limit operating
expenses of selected Funds. Pursuant to this policy, Pioneering Management
limited management fees or otherwise incurred expenses of approximately $1.8
million, $2.4 million and $3.6 million pursuant to expense limitation agreements
with selected Funds during 1997, 1996 and 1995, respectively. Management fees
from Pioneer II, the Company's largest Fund, were approximately $40 million, $29
million and $22 million in 1997, 1996 and 1995, respectively.

     Irish Offshore Funds.  In 1995, subsidiaries of the Company organized three
offshore funds incorporated under the laws of the Republic of Ireland, Pioneer
Global Equity Fund Plc (the "Global Equity Fund"), Pioneer Global Bond Fund Plc
(the "Global Bond Fund") and Pioneer DM Cashfonds Plc ("Cashfonds"). In 1997,
three additional funds, Pioneer European Equity Fund Plc (the "European Equity
Fund"), Pioneer U.S. Real Estate Fund Plc (the "U.S. Real Estate Fund") and
Pioneer Central & Eastern European Fund Plc (the "C&E Fund"), began operations.
Global Equity Fund, European Equity Fund, U.S. Real Estate Fund, C&E Fund,
Global Bond Fund and Cashfonds are referred to collectively as the "Irish
Funds." Pioneer Management (Ireland) Limited ("Pioneer Ireland"), a wholly owned
subsidiary of the Company, serves as investment adviser, distributor and
shareholder servicing agent of the Irish Funds. Pioneering Management serves as
a subadvisor for the Irish Funds. As compensation for its advisory services,
Pioneer Ireland receives annual management fees from each of Global Equity Fund,
European Equity Fund and U.S. Real Estate Fund of 1.25% of average daily net
assets. Pioneer Ireland receives annual management fees from the C&E Fund,
Global Bond Fund and Cashfonds of 1.50%, 0.85% and 0.60% of average daily net
assets, respectively. Pioneering Management receives a portion (not to exceed
75%) of the management fee paid to Pioneer Ireland. The Irish Funds are
currently sold in Germany and Austria, but the Company anticipates that they
eventually will be sold in other foreign markets. At March 15, 1998, the Irish
Funds had aggregate net assets of approximately $283 million.

     Pioneer Ireland's main office is located in Dublin, Ireland. It also
maintains an office in Hamburg, Germany. At March 1, 1998, Pioneer Ireland had
103 employees, including management and support staff.

     Institutional Accounts.  Pioneering Management acts as an investment
manager to three private institutional accounts and two collective investment
vehicles for institutional investors and acts as a subadvisor to one of a series
of portfolios utilized as funding vehicles for a variable life insurance fund
(hereinafter referred to collectively as the "Institutional Accounts"). The
Institutional Accounts had aggregate assets of

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approximately $ 636 million at March 15, 1998. In 1997, the Company formed
Pioneer Global Institutional Advisors to coordinate the Company's global
institutional investment management initiatives.

  DISTRIBUTION ACTIVITIES

     The Company's indirect wholly owned subsidiary, Pioneer Funds Distributor,
Inc. ("Pioneer Distributor"), acts as principal underwriter and distributor of
the shares of the Funds (except Pioneer Interest Shares, a closed-end fund which
does not continuously offer its shares). In 1997, Pioneer Distributor sold
shares of the Funds with an aggregate offering price of $2.9 billion, including
Class A Shares (as defined below) with an aggregate offering price of $2.0
billion, Class B Shares (as defined below) with an aggregate offering price of
$558 million, Class C Shares (as defined below) with an aggregate offering price
of $141 million and shares of Pioneer Variable Contracts Trust with an aggregate
offering price of $211 million. In connection therewith, Pioneer Distributor
received aggregate commissions of $60.9 million, of which $53.8 million was
reallowed to approximately 1,400 independent broker-dealers throughout the
United States and in several foreign countries. In 1996, Pioneer Distributor
received aggregate commissions of $66.2 million, of which $59.1 million was
reallowed to broker-dealers. In 1995, Pioneer Distributor received aggregate
commissions of $58.7 million, of which $53.1 million was reallowed to
broker-dealers. One broker-dealer was responsible for approximately 10% of sales
in 1997, 9% of sales in 1996 and 7% of sales in 1995.

     Underwriting Contracts.  Pioneer Distributor provides its underwriting and
distribution services pursuant to underwriting contracts, which are
substantially identical, with each of the Funds. These one-year contracts are
renewable annually by vote of the Fund's Board of Trustees (including a majority
of those Trustees who are not "interested persons" as defined under the 1940
Act) or shareholders. Each contract terminates if assigned and may be terminated
by either party on 60 days' written notice without penalty. The underwriting
contracts for each of the Funds (other than Funds that were established in 1997
and 1998) were all renewed for an additional year in 1997.

     Sales Charges.  Generally, purchasers of shares of the Funds pay a sales
charge at the time of purchase which is the difference between the offering
price of the shares and the net asset value of the shares, and which varies
generally as a percentage of the offering price. These are referred to as
front-end load shares ("Class A Shares"). Sales charges on Class A Shares range
from zero to 5.75% depending on the Fund and the amount invested. Most of the
sales charge on Class A Shares is reallowed by Pioneer Distributor to
broker-dealers through whom the shares are sold. This reallowance varies
generally as a percentage of the offering price on sales under $1 million.
Reallowances range from 1.0% to 5.0% depending on the Fund and the amount of the
sale. Broker-dealer reallowances on new funds and during certain short-term
promotions may be increased to 100% or more of the sales charge.

     The Company also offers a multi-class share structure for the Funds (except
Pioneer Interest Shares and Pioneer Variable Contracts Trust) (the "multi-class
funds") pursuant to which the multi-class funds offer both the traditional
front-end load shares, or Class A Shares, as well as two classes of back-end
load shares ("Class B Shares" and "Class C Shares"). On Class B Shares, the
investor does not pay any sales charge unless he or she redeems before the
expiration of the minimum holding period, which ranges from three to six years.
These early redemptions are subject to a contingent deferred sales charge (a
"CDSC"), which ranges from 2.0% to 4.0%. On Class C Shares, the investor does
not pay any sales charge unless he or she redeems within one year of purchase in
which event a CDSC of 1.0% is imposed. The Company began offering Class B Shares
in April 1994 and Class C Shares in January 1996. Class C Shares are not
available on all multi-class funds.

     With respect to sales of Class A Shares, Pioneer Distributor may, in its
discretion, pay a commission to broker-dealers that initiate and are responsible
for sales of $1 million but less than $50 million, ranging from 0.10% to 1.0%,
depending on the Fund, and the amount of the sale. Certain purchases not subject
to an initial sales charge may be subject to a CDSC of 1.0% in the event of
certain redemption transactions within one year. With respect to sales of Class
B Shares, Pioneer Distributor will generally pay commissions to broker-dealers
related to sales and service of such shares ranging from 2% to 4% of the sales
transaction amount (including a service fee of 0.25% for the first year). With
respect to sales of Class C Shares, Pioneer

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Distributor will pay commissions to broker-dealers related to sales and service
of such shares of 1% of the sales transaction amount (including a service fee of
0.25% for the first year). During 1997, 1996 and 1995, in connection with sales
of Class B Shares, Pioneer Distributor paid commissions to broker-dealers of
$16.3 million, $23.2 million and $14.9 million, respectively.

     Pioneer Distributor's cash flow may be adversely affected by vigorous sales
of back-end load shares because its recovery of the cost of commissions paid up
front to dealers is spread over a period of years. During this period, the
Company bears the costs of financing and the risk of market decline. Pioneer
Distributor is reimbursed for such commissions from payments by the Funds under
distribution plans (see "Distribution Plans" below) and from CDSCs paid by
redeeming investors before the expiration of the holding periods.

     Distribution Plans.  Each of the Funds (except Pioneer Interest Shares and
Pioneer Variable Contracts Trust) has one or more distribution plans pursuant to
Rule 12b-1 under the 1940 Act which provides for certain payments to be made to
Pioneer Distributor. With respect to Class A Shares, the distribution plans (the
"Class A Plans") provide for payments by such Funds of certain expenses up to
0.25% per annum of average daily net assets (0.15% for Pioneer Cash Reserves
Fund, a money market fund). With respect to Class B and Class C Shares, the
distribution plans (the "Class B Plans" and "Class C Plans," respectively)
provide for payments by such funds of fees relating to (a) distribution services
in an amount not to exceed 0.75% per annum of the average daily net assets of
the Class B or Class C Shares and (b) personal and account maintenance services
in an amount not to exceed 0.25% of the average daily net assets of the Class B
or Class C Shares. The distribution plans are subject to annual renewals which
require the approval of the Funds' Board of Trustees, including a majority of
Trustees who are not "interested persons" of the Funds. In 1997, the Trustees of
the Funds (other than Funds that were established in 1997 and 1998) renewed the
Class A, Class B and Class C Plans. In 1997, 1996 and 1995, Pioneer Distributor
received distribution fees of $13.1 million, $7.7 million and $2.5 million,
respectively.

     Domestic Sales of Shares of the Funds.  Pioneer Distributor is a registered
broker-dealer (see "Regulation" below), employing approximately 120 full-time
personnel, including 22 regional sales representatives who are responsible for
territories comprising most of the United States and Puerto Rico and who work
with broker-dealers to promote sales of Fund shares in their respective
territories. Substantially all of the Funds' shares are sold to the public by
securities sales persons registered with the National Association of Securities
Dealers, Inc. (the "NASD") who act as representatives of broker-dealer firms,
which are members of the NASD and which have signed sales agreements with
Pioneer Distributor. Shares of the Funds may be sold in all states, by
broker-dealers and registered representatives licensed in those states.

     International Sales of Shares of the Funds.  Pioneer Distributor's wholly
owned subsidiary, Pioneer Fonds Marketing GmbH ("Pioneer Fonds Marketing"), a
company registered under the laws of the Republic of Germany, performs marketing
and sales activities with respect to sales of shares of certain of the Funds in
Europe, primarily Germany, Austria and Switzerland. Pioneer Fonds Marketing
currently has 20 full-time employees. In 1997, approximately 16% of the total
sales of the Funds' shares were sold outside of the United States. Pioneer Fonds
Marketing also performs marketing and sales activities with respect to sales of
the Irish Funds in Western Europe.

     In 1998, Pioneer Distributor established Pioneer Global Funds Distributor,
Ltd. ("Global Funds Distributor") to serve as the exclusive worldwide
distributor of the Irish Funds. Global Funds Distributor, a wholly owned
subsidiary of Pioneer Distributor, is registered under the laws of Bermuda and
maintains its registered office in that country. Global Funds Distributor will
enter into an agreement with Pioneer Fonds Marketing with respect to sales of
the Irish Funds in Western Europe.

     Additional Information.  For more information on sales of mutual fund
shares for the five years ended December 31, 1997, see "Sales of Mutual Fund
Shares" in the 1997 Annual Report to Stockholders, which information is
incorporated herein by reference.

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  SHAREHOLDER AND RELATED SERVICES

     Pioneering Services Corporation.  At December 31, 1997, the Funds had
approximately 1,117,000 active shareholder accounts, including approximately
386,000 Individual Retirement Accounts ("IRAs") and other tax-qualified
retirement accounts. Mutual fund shareholders accounts and, in particular,
qualified accounts, require an exceptional amount of shareholder communications
and transfer agency services. The Company's wholly owned subsidiary, Pioneering
Services Corporation ("Pioneering Services"), has been providing transfer agent
and shareholder services to the Funds since in 1985. At March 1, 1998,
Pioneering Services employed 308 full-time personnel, including 53 employees who
are located at its processing facility in Omaha, Nebraska.

     As shareholder servicing agent for the Funds, Pioneering Services has
entered into agreements with each Fund (except Pioneer Interest Shares) pursuant
to which it received in 1997 an annual active account fee of $22.75 for equity
fund accounts, $30.00 for fixed-income fund accounts and $28.00 for money market
fund accounts. Such agreements are subject to annual renewals which require the
approval of the Funds' Boards, including a majority of members who are not
"interested persons," and may be canceled by either party on 60 days' notice.
For 1997, 1996 and 1995, Pioneering Services received revenues from service fees
from the Funds and Pioneer Interest Shares (in 1996 and 1995) of approximately
$27 million, $25 million and $22 million, respectively.

     In February 1997, Pioneer Ireland assumed responsibilities as
sub-shareholder servicing agent for certain of the Funds. In that capacity,
Pioneer Ireland provides, under the direction of Pioneering Services,
shareholder and transfer agency services to Fund shareholders who are citizens
of Germany, Austria and Switzerland. Pioneer Ireland also provides similar
services to the shareholders of the Irish Funds.

     Trustee/Custodian.  The Company acts as the trustee/custodian for accounts
which are IRAs or other qualified retirement accounts and receives an annual fee
of $10 for each such account, payable by shareholders with such accounts, up to
maximum annual fees of $20 for shareholders with multiple accounts of one plan
type. Shareholders also have the option of paying a one-time fee of $100 in lieu
of the annual account fee. During 1997, 1996 and 1995, the Company received fees
in connection with its services as trustee/custodian of $4.4 million, $3.9
million and $3.7 million, respectively.

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     For more information on assets under management and sales of mutual fund
shares for the five years ended December 31, 1997, and other industry segment
information for the three years ended December 31, 1997, see "Assets Under
Management at December 31," "Sales of Mutual Fund Shares" and Note 16-Financial
Information by Business Segment included under Notes to Consolidated Financial
Statements, all of which are included in the 1997 Annual Report to Stockholders
and are incorporated herein by reference.

U.S. AND CENTRAL AND EASTERN EUROPE VENTURE CAPITAL

  U. S. VENTURE CAPITAL OPERATIONS

     In 1981, the Company organized a wholly owned subsidiary, Pioneer Capital
Corporation ("Pioneer Capital"), for the purpose of making venture capital
investments and managing venture capital funds. In 1986, Pioneer Capital
organized a wholly owned subsidiary, Pioneer SBIC Corp. ("PSBIC"), which is the
general partner of Pioneer Ventures Limited Partnership ("PVLP"). PVLP is a
Small Business Investment Company ("SBIC") licensed by the U.S. Small Business
Administration (the "SBA"). PSBIC is the general partner of PVLP and has an
approximate 99% interest in PVLP. The limited partnership interests in PVLP
represent a less than 1% interest in PVLP and are owned by the four officers of
Pioneer Capital (the "Pioneer Capital Principals") who are responsible for the
operations and overall success of PVLP.

     In 1995, Pioneer Capital formed Pioneer Ventures Limited Partnership II
("PVLP II"), a new SBIC. Pioneer Ventures Management L.P. ("PVM") serves as the
general partner of PVLP II. PVM's general partner is Pioneer Management SBIC
Corp., a corporation the shareholders of which are the Pioneer Capital
Principals. PVM's limited partners are the Company and the Pioneer Capital
Principals. The Company holds

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an 11.7% limited partnership interest in PVLP II and a 99% limited partnership
interest in PVM, which owns 2.3% of PVLP II. At March 15, 1998, PVLP II had
$10.7 million of unfunded commitments from investors.

     At December 31, 1997, Pioneer Capital and PVLP held approximately $17.6
million of investments (at cost) in 20 privately held companies and $2.7 million
(at cost) in nine publicly held companies. The aggregate value of these
investments as of December 31, 1997, was $41.0 million. During 1997, Pioneer
Capital and PVLP had net realized and unrealized gains of $13.8 million from
their venture capital investment portfolio. At December 31, 1997, Pioneer
Capital and PVLP had a total of $10.2 million in cash available for additional
investments. Additional capital for investments is available to PVLP through the
sale of SBA guaranteed debentures. Through December 31, 1997, PVLP had availed
itself of a total of $4.95 million of SBA guaranteed debentures that mature at
various times between 1998 and 2003 and bear interest at rates between 6.12% and
9.8%.

     At December 31, 1997, PVLP II held approximately $20.6 million of
investments (at cost) in 13 privately held companies. The aggregate value of
these investments as of December 31, 1997, was $24.3 million. During 1997, PVLP
II had net realized and unrealized gains of $2.4 million from its venture
capital investment portfolio. At December 31, 1997, PVLP II had a total of $3.7
million in cash available for additional investments.

     Pioneer Capital and its affiliates utilize a diversified approach to
venture capital investing. Investments are in early-stage businesses seeking
initial financing as well as more mature businesses in need of capital for
expansion, acquisitions, management buyouts or recapitalizations. In general,
Pioneer Capital, PVLP and PVLP II invest in New England-based companies in a
variety of industries. At March 1, 1998, Pioneer Capital had eight employees.

     Venture capital investment portfolio valuations are reviewed quarterly by
the Company's Board of Directors and the values of such investments are adjusted
when circumstances require. As a general rule, an investment is adjusted up or
down, as the case may be, to conform to the price paid by a sophisticated new
third-party investor in any subsequent round of financing. An investment may
also be written down if the venture company is substantially behind its business
plan and may be written up if there is some other compelling reason for doing
so. For PVLP and PVLP II, securities that are publicly traded are valued on a
valuation date at the average of the last bid price on the valuation date and
the preceding two days in the principal market in which such securities are
traded, with an appropriate discount if such securities are restricted or thinly
traded. For Pioneer Capital, securities that are publicly traded are valued on
the valuation date at the closing price on the principal market on which such
securities are traded, with an appropriate discount if such securities are
restricted or thinly traded.

  POLISH VENTURE CAPITAL OPERATIONS

     In 1995, the Company's wholly owned subsidiary, Pioneer International
Corporation ("Pioneer International"), organized two limited partnerships,
Pioneer Poland U.S. L.P. ("PPUSLP") and Pioneer Poland U.K. L.P. ("PPUKLP"), for
the purpose of raising funds for venture capital investment in Poland. Pioneer
International's wholly owned subsidiaries, Pioneer Poland U.S. (Jersey) Ltd. and
Pioneer Poland U.K. Ltd., are the general partners of PPUSLP and PPUKLP,
respectively. During 1995, PPUSLP and PPUKLP (collectively, the "Pioneer Poland
Fund") raised $60 million in commitments from U.S. and European investors. The
Company has committed approximately $2.5 million to each limited partnership, of
which 75% has been drawn down by the Pioneer Poland Fund. This commitment
provides the Company with a 7% indirect interest in PPUSLP and a 9% indirect
interest in PPUKLP. At December 31, 1997, Pioneer Poland Fund held approximately
$16.4 million of investments (at cost) in eight privately held Polish companies,
had committed contractually to invest an additional $7.1 million in these
companies and had reserved an additional $15.6 million for future financing
rounds of the existing portfolio. The value of these investments as of December
31, 1997, pursuant to the valuation guidelines established by the European
Venture Capital Association, was approximately $15.7 million, exclusive of
further commitments and reserves. The responsibilities for managing the Pioneer
Polish Fund are shared by Pioneering Management (Jersey) Ltd. and Pioneer
Investment Poland Ltd., each of which is a wholly owned subsidiary of Pioneer
International.

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  RUSSIAN VENTURE CAPITAL OPERATIONS

     The Company is in the process of establishing the Pioneer Russia Direct
Equity Fund, L.P. (the "Direct Equity Fund"), a fund focused on venture capital
investment in Russia. The Direct Equity Fund will make investments in small- to
medium- sized Russian companies that are in a position to respond to the growing
consumer demand for products and services in Russia. The Company's 81.7%-owned
subsidiary, Pioneer First Russia, Inc. ("PFR"), will serve as the Direct Equity
Fund's investment advisor. PFR's Russian subsidiary, Pioneer Investments, will
serve as the Direct Equity Fund's investment manager. The Direct Equity Fund
intends to raise $150 million, primarily from U.S. and European institutional
investors, during 1998. The Company will commit to invest $4.5 million in the
Direct Equity Fund. See "Financial Services -- Russia" below.

FINANCIAL SERVICES -- POLAND

     Polish Mutual Funds.  In 1992, subsidiaries of the Company organized and
began distributing units of Pioneer First Polish Trust Fund (the "First Polish
Fund"), the first mutual fund in Poland, and organized a related joint venture
unitholder services business, Financial Services Limited ("FSL"). In 1995, two
additional funds, Pioneer Aggressive Investment Trust Fund (the "Aggressive
Investment Fund") and Pioneer Interest Bearing Securities Trust (the "Interest
Bearing Fund"), began operations. In 1997, an additional fund, Pioneer
Privatization Trust Fund (the "Privatization Fund"), began operations. Pioneer
First Polish Investment Fund Joint Stock Company ("Pioneer First Polish") serves
as an investment manager and distributor of units of the First Polish Fund,
Aggressive Investment Fund, Interest Bearing Fund and Privatization Fund
(collectively, the "Polish Funds"). As compensation for its management services,
Pioneer First Polish receives management fees of 2.00% per annum of average
daily net assets. At March 1, 1998, Pioneer First Polish employed 109 full-time
persons, including management and support staff. Pioneer First Polish is a
wholly owned subsidiary of Pioneer International. At March 15, 1998, the Polish
Funds had aggregate net assets of approximately $494 million. Sales of units of
the Polish Funds were $203 million, $169 million and $21 million in 1997, 1996
and 1995, respectively.

     Financial Services Limited.  In January 1992, the Company's subsidiary,
Pioneer International, established FSL, which is 50% owned by Pioneer
International and 50% owned by Bank Polska Kasa Opieki, S.A. FSL acts as the
unitholder servicing agent for the Company's Polish mutual funds. Under the
terms of the agreements with the funds, FSL receives annual fees equal to the
Polish zloty ("PLN") equivalent of $21.00 per account. In 1997, such fees
aggregated approximately PLN 15.1 million (approximately $4.5 million). FSL
provides similar unitholder services to an unaffiliated fund group. At December
31, 1997, FSL serviced approximately 222,000 unitholder accounts. FSL employs
116 full-time persons.

     Polish Brokerage Operations.  In March 1996, Pioneer International acquired
approximately 86% of Pioneer Polski Dom Maklerski, S.A., a Polish brokerage
operation ("PPDM"). Pioneer International now holds 98% of PPDM. PPDM provides
brokerage services to Polish and U.S. institutions and Polish citizens. PPDM
also provides investment advice and analysis and portfolio management services.

FINANCIAL SERVICES -- RUSSIA

     In April 1995, the Company acquired approximately 51% of the shares of
First Voucher Fund (the "Voucher Fund"), the largest voucher investment fund
established in Russia in connection with that country's privatization program.
The Voucher Fund has over 2 million shareholders and 125 portfolio investments
as of March 15, 1998. The shares were issued by the Voucher Fund to two newly
formed subsidiaries of Pioneer Omega, Inc. ("Pioneer Omega"), a Delaware
corporation in which the Company owns 90% of the outstanding stock.

     The Company's Russian investment operations, which include Pioneer First
(Company for the Management of Investment Funds), Pioneer Securities, Pioneer
Services, Pioneer Investments and Pioneer Bank, are consolidated under Pioneer
Omega's subsidiary, Pioneer First Russia, Inc. ("PFR"). In October 1996, PFR
executed agreements with the International Finance Corporation ("IFC"), a member
of the World Bank Group, pursuant to which IFC agreed to invest $4 million in
PFR to acquire an 18.3% equity interest. This

                                        7
<PAGE>   9

transaction was completed in January 1997. At March 1, 1998, PFR and its
subsidiaries employed 373 persons.

     Pioneer First serves as investment manager to the Voucher Fund and Pioneer
First Unit Investment Fund, Russia's first open-ended unit investment fund.
Pioneer First Unit Investment Fund, which invests mainly in Russian government
bonds, was launched in November 1996. The Company launched its second open-ended
unit investment fund, Pioneer First Liquid Shares, in November 1997. Pioneer
Securities provides brokerage services, corporate financing and financial
advisory services to Russian and western corporations and institutional
investors. Pioneer Securities is a member of the National Association of
Securities Market Participants (NAUFOR), the self regulatory organization for
Russian brokers. Pioneer Services, a domestic registrar and shareholder services
company, serves as the registrar for the Voucher Fund and the unit investment
funds. Pioneer Investments will serve as investment manager to a direct equity
fund to be sold to western institutional investors. See "U.S. and Central and
Eastern Europe Venture Capital -- Russian Venture Capital Operations" above.
Pioneer Bank, in which the Company has a 57.7% interest, is a medium-sized
Russian bank with a full currency license that provides a variety of payment
services in rubles and hard currency. Pioneer Bank also participates in the
Russian government debt market. In February 1998, subsidiaries of the Company
signed agreements pursuant to which AS Eesti Forekspank ("Forekspank"), a
banking institution based in Tallinn, Estonia, agreed to acquire a 35% ownership
interest in Pioneer Bank. This ownership percentage may increase depending on
the earnings of the bank over the next three years. Forekspank will also
participate significantly in the management of Pioneer Bank.

     In 1997, Russian financial services had revenues and net income of $54.5
million and $5.3 million, respectively. In 1996, this segment had revenues and
net income of $21.1 million and $1.3 million, respectively. In 1995, this
segment had revenues and net income of $5.8 million and $1.4 million,
respectively. In 1997 and 1996, Pioneer Securities had revenues from its
brokerage operations of approximately $34.2 million and $1.6 million,
respectively. In 1997 and 1996, Pioneer Bank had revenues of approximately $12.3
million and $15 million, respectively, from its banking activities.

FINANCIAL SERVICES -- CZECH REPUBLIC

     In 1995, subsidiaries of the Company organized and began distributing
Pioneer Czech Investment Company Trust Fund (the "Pioneer Czech Fund") in the
Czech Republic. Pioneer Czech Investment Company, a.s., a wholly owned
subsidiary of Pioneer International ("Pioneer Czech"), serves as investment
adviser and distributor of participation certificates in the Pioneer Czech Fund.
As compensation for its management services, Pioneer Czech receives management
fees of 2% of average daily net assets. Pioneer Czech employs 26 full-time
persons. As of March 15, 1998, the Pioneer Czech Fund had net assets with a
market value of approximately $50 million.

REAL ESTATE MANAGEMENT AND ADVISORY SERVICES

     In 1996, the Company established Pioneer Real Estate Advisors, Inc.
("Pioneer Real Estate") to provide real estate advisory and management services
to institutional investors and corporations in the U.S. and in Central and
Eastern Europe, primarily Russia and Poland. Pioneer Real Estate is based in
Boston and conducts its operations in Russia through representative offices in
Moscow and St. Petersburg and a 65%-owned Russian subsidiary and in Poland
through a wholly owned subsidiary. Pioneer Real Estate is currently pursuing two
primary objectives. First, it seeks to invest and manage capital in the
commercial real estate markets of Central and Eastern Europe on behalf of pooled
investment vehicles, individual institutional investors and the Company. Second,
it seeks to provide advisory services, including property management, facilities
management, development management and feasibility and valuation analysis, to
the pooled investment vehicles it manages and to third parties.

     In Poland, Pioneer Real Estate is developing a $60 million Polish real
property fund (the "Polish Real Estate Fund") to be sold to Polish and Western
institutional investors. At March 15, 1998, the Polish Real Estate Fund had
received investor commitments in the aggregate amount of $22 million and
significant negotiations are underway for the balance of the equity commitments.
Pioneer Real Estate will commit to invest $2 million in the Polish Real Estate
Fund. Pioneer Real Estate, together with its joint venture partner,

                                        8
<PAGE>   10

Banc One Capital Corporation, has been selected by the Overseas Private
Investment Corporation ("OPIC") to operate and manage a $240 million pooled
investment vehicle (the "Pioneer -- Banc One Real Estate Fund") which will
invest in commercial property projects in Central and Eastern Europe, primarily
Russia and the newly independent states of the former Soviet Union. The Pioneer
-- Banc One Real Estate Fund will be funded with $80 million of equity
investments from Western institutional investors and $160 million of debt
financing guaranteed by OPIC. Pioneer Real Estate will commit to invest $4
million in the Pioneer -- Banc One Real Estate Fund. Pioneer Real Estate expects
that the Pioneer -- Banc One Real Estate Fund will become operational in the
second quarter of 1998 and the balance of 1998 will be devoted to seeking
capital commitments.

     Pioneer Real Estate also manages the real estate activities of the
Company's worldwide subsidiaries. In that connection, Pioneer Real Estate,
through its representative office in Moscow, manages the Meridian Commercial
Towers, an 18 story office tower located in Northern Moscow, which is owned by
the Voucher Fund. Pioneer Real Estate currently has 38 employees.

OTHER INVESTMENT MANAGEMENT INITIATIVES

     India.  Kothari Pioneer AMC Ltd. ("Kothari Pioneer"), an Indian company of
which Pioneering Management owns 45%, Investment Trust of India Limited, an
Indian corporation, owns 49%, and the employees of Kothari Pioneer own 6%,
serves as investment adviser to 10 private sector mutual funds for Indian
citizens. These funds had aggregate net assets of approximately $61 million at
March 15, 1998.

     Taiwan.  The Company is a 10% participant in a joint venture in Taiwan,
which was organized to manage and distribute investments in Taiwanese investment
companies.

COMPETITION

     Management and Distribution Services.  The mutual fund industry is
intensely competitive. Many organizations in this industry are attempting to
sell and service the same clients and customers, not only with mutual fund
investments but also with other financial products. Some of the Company's
competitors have more products and product lines and substantially greater
assets under management and financial resources. The Company believes it is
competitive in terms of price and performance with other firms providing similar
advisory services to investment companies and to pension plans and endowment
funds and with firms engaged in distributing investment company shares.

     The distribution of mutual fund shares has been significantly affected by
(i) the growth in the number of funds available for sale, in particular, no-load
funds, the shares of which are sold primarily through direct sales approaches
without any sales charge, (ii) the evolution of service fees payable to
broker-dealers that provide continuous services to their clients in connection
with their investments in a mutual fund, (iii) the aggressive entry of banks and
investment banking firms into the industry, and (iv) the development and
implementation of complex distribution systems employing multiple classes of
shares and master-feeder fund structures. Typically, the underwriter or
distributor that pays a service fee is reimbursed by the mutual fund under a
plan of distribution pursuant to Rule 12b-1 under the 1940 Act. All of the Funds
distributed by Pioneer Distributor now pay such service fees to broker-dealers.
See "Domestic Investment Management -- Distribution Activities -- Distribution
Plans" above.

     Success in the investment advisory and mutual fund share distribution
businesses is substantially dependent on the Funds' investment performance. Good
performance stimulates sales of the Funds' shares and tends to keep redemptions
low. Sales of Funds' shares generate higher management fees and distribution
revenues (which are based on assets of the Funds). Good performance also
attracts private institutional accounts to Pioneering Management. Conversely,
relatively poor performance results in decreased sales and increased redemptions
of the Funds' shares and the loss of private accounts, with corresponding
decreases in revenues to the Company. In 1997, the performance of the Funds
managed by Pioneering Management was generally competitive with comparable
mutual funds offered by others and with relevant indices and benchmarks approved
by the Funds' Boards.

                                        9
<PAGE>   11

     Shareholder Services.  The shareholder services industry is extremely
competitive. Pioneering Services believes that it is providing high quality
shareholder services for the Funds and their shareholders at rates that are
competitive in the industry. The Company believes that effective shareholder
services are vital to success in this industry. While these services have
historically been provided by banks and other institutions with greater
resources than Pioneering Services, the Company believes that Pioneering
Services generally outperforms such competitors because it is dedicated
exclusively to the provision of such services to the Funds and their
shareholders, rather than to a number of different customers.

     Venture Capital.  The venture capital industry both in the United States
and abroad is extremely competitive. In the process of investing and attempting
to raise funds from entities other than the Company, Pioneer Capital and the
Company's foreign venture capital subsidiaries must compete with a large number
of venture capital firms, many of which have substantially larger staffs, more
experience in raising funds, and more capital to invest.

     Real Estate Management and Advisory Business.  The real estate management
and advisory business both in the United States and abroad is extremely
competitive. Pioneer Real Estate must compete with a large number of real estate
firms, many of which have been in existence for many years and have
substantially more resources than those available to Pioneer Real Estate.

REGULATION

     Each of the Funds is registered under the 1940 Act and the Securities Act
of 1933, as amended. As registered investment companies, the Funds are subject
to extensive regulation governing all aspects of their operations. In addition
to being subject to the regulatory authority of the U.S. Securities and Exchange
Commission (the "SEC"), the Funds are also subject to certain limited regulation
by the securities regulators in all 50 states and in the foreign jurisdictions
in which certain of the Funds are registered.

     Pioneer Distributor, as a registered broker-dealer under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), is required, among other
things, to maintain certain records, file reports with the SEC, supervise
employees and deal fairly with customers, all in accordance with the 1934 Act
and the rules and regulations promulgated thereunder. Pioneer Distributor is
also registered as a broker-dealer in all 50 states and, as such, is subject to
regulation by the state securities regulators in all such states. Pioneer
Distributor is a member of the NASD, a securities industry self-regulatory body
which is itself regulated by the SEC under the 1934 Act. As a member of the
NASD, Pioneer Distributor is required to abide by the standards, including
pricing practices, set forth in the Articles of Incorporation, the By-Laws and
the Rules of Fair Practice of the NASD.

     Pioneering Management, as investment manager of the Funds, adviser to the
Institutional Accounts and investment adviser to the Irish Funds, is registered
pursuant to the Investment Advisers Act of 1940, as amended, and as such is
subject to certain recordkeeping, SEC reporting, compensation and supervisory
rules and regulations.

     Each of Pioneering Services and Pioneer Ireland, as transfer agent and
sub-transfer agent, respectively, for the Funds, is registered as a transfer
agent pursuant to the 1934 Act and as such is subject to SEC recordkeeping and
reporting requirements and certain other rules and regulations.

     The SEC has jurisdiction over registered investment companies, registered
investment advisers, broker-dealers and transfer agents and, in the event of a
violation of applicable rules or regulations, may take action which could have a
serious effect on Pioneering Management's, Pioneer Distributor's, Pioneering
Services' or Pioneer Ireland's businesses.

     The Polish Funds were established under, and are regulated by, the Public
Trading in Securities and Trust Funds Act of March 22, 1991, as amended.

     Pioneer Global Bond Fund Plc, Pioneer Global Equity Fund Plc, Pioneer U.S.
Real Estate Fund Plc, Pioneer European Equity Fund Plc and Pioneer Central and
Eastern European Fund Plc are each authorized by The Central Bank of Ireland
under the European Communities (Undertakings for Collective Investment in

                                       10
<PAGE>   12

Transferable Securities) Regulations, 1989 (S.I. No. 78 of 1989) of Ireland.
Pioneer DM Cashfonds Plc is authorized by The Central Bank of Ireland as an
investment company with "designated" status pursuant to Part XIII of the
Companies Act, 1990.

CONTRACTUAL RELATIONSHIPS

     The businesses of the Company, Pioneering Management, Pioneer Distributor,
Pioneering Services, Pioneer First Polish, FSL and Pioneer Ireland are dependent
upon their associations and contractual relationships with the funds they serve.
In the event any of the management contracts, underwriting contracts or service
agreements were canceled or not renewed pursuant to the terms thereof, the
Company may be substantially adversely affected. The Company, Pioneering
Management, Pioneer Distributor, Pioneering Services, Pioneer First Polish, FSL
and Pioneer Ireland consider their respective relationships with such funds to
be good and they have no reason to believe that their respective management,
underwriting and service contracts will not be negotiated on a reasonable basis
in the future; however, there is no assurance that such funds will continue
these relationships.

RELATIONSHIP WITH INSTITUTIONAL ACCOUNTS

     Pioneering Management's advisory agreements with its institutional
investors are generally terminable on short notice. The trustees or corporate
officials who control such accounts are usually free to change investment
advisers without cumbersome legal procedures. In the past, private accounts have
terminated their agreements with Pioneering Management for various reasons such
as performance, business combinations which result in the merging of accounts
advised by Pioneering Management into accounts managed by other investment
advisers, or changes in the structure or funding of pension plans.

                                       11
<PAGE>   13

                          NATURAL RESOURCE DEVELOPMENT

GOLD MINING

     The results of the gold mining business are substantially attributable to
the operations of Teberebie Goldfields Limited ("TGL"), the principal operating
subsidiary of the Company's indirect wholly owned subsidiary, Pioneer
Goldfields, a corporation organized under the laws of Guernsey, Channel Islands,
which conducts mining and exploration activities in the Republic of Ghana and
exploration activities elsewhere in Africa. Pioneer Goldfields' principal asset
is its ownership of 90% of the outstanding shares of Teberebie Goldfields
Limited, a corporation organized under the laws of the Republic of Ghana. TGL is
engaged in the exploration, mining, and processing of gold ore on a mining
concession located in the Western Region of the Republic of Ghana. The Republic
of Ghana holds the remaining 10% ownership interest in TGL. Gold mining results
are also affected by the exploration activities in the Russian Far East of
Closed Joint-Stock Company "Tas-Yurjah Mining Company," a Russian Company in
which the Company has a 52.5% beneficial interest. Exploration costs are charged
to operations as incurred.

     TGL shipped approximately 263,000 ounces of gold in 1997, contributing
$89.5 million to the Company's revenues. In 1996 and 1995, TGL shipped
approximately 203,000 and 236,000 ounces of gold, respectively. A three-year
financial summary for the gold mining business segment is shown below:

<TABLE>
<CAPTION>
                                              1997             1996             1995
                                          (IN MILLIONS)    (IN MILLIONS)    (IN MILLIONS)
                                          -------------    -------------    -------------
<S>                                       <C>              <C>              <C>
Revenues................................     $ 89.5           $ 78.3            $90.2
Net Income..............................     $ (2.8)          $  2.6            $14.0
Total Assets............................     $152.9           $149.6            $82.8
</TABLE>

     The effective tax rate (credit) (U.S., Russia and Ghana combined) for the
gold mining segment in 1997, 1996 and 1995 was (15%), 32% and 35%, respectively.

  TEBEREBIE GOLDFIELDS LIMITED

     Organization and Mining Lease.  In 1986, the Company and a joint venture
partner organized TGL for the purpose of evaluating the feasibility of mining
gold on several tracts of land in the Teberebie concession area ("Teberebie") in
the Republic of Ghana. In February 1988, TGL entered into a mining lease with
the Republic of Ghana (the "Government") pursuant to which TGL received
exclusive gold mining rights for a term of 30 years. Under this lease, the
Government is entitled to annual royalties of between 3.0% and 12.0% of TGL
revenue, which rate will vary based on TGL's operating profit margin and its
level of capital expenditures, and is assured a continuing 10% equity interest
in TGL. In April 1989, the Company purchased the joint venture partner's
interest for $3.7 million, primarily in cash. In 1992, TGL was granted a second
26-year mining lease over two contiguous areas to the north and west of the
original lease area, the terms of which are substantially similar to the
original lease. Since the commencement of commercial production in 1991, TGL has
paid royalties to the Government in the amount of 3.0% of TGL's annual revenue.

     Teberebie Mine Site.  The Teberebie mine site consists of mining
concessions covering an area of approximately 42 square kilometers. It is
located in the Western Region of the Republic of Ghana and is approximately six
kilometers south of the town of Tarkwa. The Teberebie mine is geographically
approximately 200 kilometers west of, and 330 kilometers by road from, Accra,
the capital of the Republic of Ghana. It is approximately 95 kilometers by road
from Takoradi, which is one of Ghana's two major ports and the point of entry
for most of the imported equipment used at the Teberebie mine.

     Geology.  The basement rocks of Ghana are precambrian in age and form part
of a regional structure known as the West African Shield. The rocks that
constitute the West African Shield are both sedimentary and igneous in origin.
These rocks have been subjected to pressure and temperature alteration and
deformation. Some of the altered rocks (metamorphic rocks) have a greenish
coloration, and areas exhibiting these features are known as greenstone belts.
There are a number of greenstone belts around the world. They attract the
attention of commercial geologists because various minerals, particularly gold,
are associated with them. In Ghana, the major gold producers operate along
various prominent gold-bearing belts that extend for

                                       12
<PAGE>   14

a distance of some 300 kilometers in a trend from northeast to southwest. These
gold-bearing belts consist of both greenstone and sedimentary formations. TGL
mines the sedimentary formations.

     Locally, the thick sedimentary sequence is called the Tarkwaian system and
gold is found in the upper, coarser horizons. At Teberebie, gold occurs in a
sedimentary sequence known as the Banket formation. This formation consists of a
series of sedimentary strata with siltstones, mudstones and sandstones
interspersed with some coarser pebble horizons. Where the well-rounded pebbles
are particularly large, the horizon is known as a conglomerate. Gold is found in
the matrix that binds these pebbles together. The Banket formation has broad
similarities to the Witwatersrand reef conglomerate in South Africa. As such, it
is younger than the Birimian greenstone rocks that underlie it. The region has
been subject to folding, faulting and shearing. Structurally, the Banket
formation consists of a gently folded syncline, trending from northeast to
southwest. The western limb of the syncline extends over 6.5 kilometers on the
property, with the eastern limb reaching the surface just beyond the eastern
boundary of the mining concession. The western and eastern limbs outcrop on the
surface about four kilometers apart. At the center of the syncline at Teberebie,
the mineralized horizons are some 400 meters below surface. In the south, the
western limb dips to the east at about 35 degrees. This dip flattens toward the
north where it is approximately only ten degrees.

     The deposit at the Teberebie mine is a paleoplacer where gold occurs in
free-milling state with other heavy minerals in a matrix of a quartz pebble
conglomerate. The gold particles are fine-grained, ranging from two to 280
microns, averaging approximately 100 microns in diameter. The origin of the gold
has not been identified, although it may have been derived from the underlying
Birimian basement rocks.

     Gold Reserves.  The earliest known exploration on the Teberebie property
was conducted in the early 1890's when several adits were driven into the ridge.
Records indicate that approximately 15,000 tonnes of ore was extracted from
adits and drifts prior to World War II. Four of these adits were cleared and
systematically sampled. At the end of 1992, TGL had drilled a total of 18,545
meters in 296 holes on the property. Holes were drilled on 74 cross-sections
perpendicular to the gold bearing ridge along a strike length of 6,050 meters,
with three to five drill holes per section. Sections were 50 to 100 meters
apart, and drill hole spacing on each section was 50 to 100 meters. In 1993, TGL
drilled 16 in-fill ore holes advancing 930 meters on one ridge designed to move
reserves from the possible to proven and probable categories. In 1994, TGL
drilled 5,090 meters in 39 holes on the property. Contiguous with this, 2,551.5
meters of exploratory drilling in 11 holes was completed. In 1995, TGL drilled
3,420 meters in 18 holes on the property. In addition, TGL drilled a total of
2,568 meters in seven exploration drill holes and 765 meters in 12 site
investigations and geotechnical holes. In 1996, TGL drilled a total of 8,648
meters in 53 holes on the property.

     Reserves (proven and probable categories) represent that portion of TGL's
resource which can be reasonably assumed to be economically and legally
extracted based on demonstrated practice or detailed tests and studies. The
contained ounces are the product of the estimated ore tonnes multiplied by the
grade. These reserves have been adjusted for anticipated losses resulting from
mining activities, but do not reflect recovered product.

     TGL's proven and probable gold reserves as of December 31, 1997 are set
forth in the table below. The design cut-off grade used to delineate the
reserves is 0.58 grams per tonne (g/t) of ore at a gold price of $340 per ounce.
An independent mining consultant has certified these reserves.

                    PROVEN AND PROBABLE RESERVES ($340/OZ.)

<TABLE>
<CAPTION>
                                                                       CONTAINED GOLD,
                                        TONNES (ORE)    GRADE (G/T)        OUNCES
                                        ------------    -----------    ---------------
<S>                                     <C>             <C>            <C>
Total Reserves........................  159,180,000        1.19           6,090,000
</TABLE>

     TGL's last reported proven and probable reserve estimate was 9.1 million
ounces as of December 31, 1995. Approximately 1.7 million ounces of the decrease
in proven and probable reserves is attributable primarily to the use in the mine
model of a lower gold price ($340 per ounce versus $385 per ounce) and normal
reduction for mine production during 1996 and 1997. The balance of the
difference is attributable to allowances for previously reported slope
instability issues, haul road refinements and physical mine design

                                       13
<PAGE>   15

parameters, and miscellaneous refinements associated with the transition to more
comprehensive mine modeling software. Based on the current mining method (bulk
mining and heap leaching) at TGL, it is estimated that recoverable gold from
these open pit reserves will aggregate approximately 4.9 million ounces.
Reported gold reserves are estimates. As such, no assurance can be given that
the indicated quantities of gold will be produced. In addition, gold price
fluctuations may render ore reserves containing relatively lower grades of gold
mineralization uneconomic to mine. At December 31, 1997 and March 1, 1998, the
market price of gold was $290 per ounce and $297 per ounce, respectively.

     Mining and Processing.  The Teberebie mine is a conventional open pit, heap
leach operation. Mining at Teberebie is a technically simple drill and blast,
load and haul operation, carried out on three contiguous ridges along a strike
length of some 6.5 kilometers. The ridges, running from south to north, are
named Teberebie, Awunaben and Mantraim. The mine is currently an open pit mine
operating from two pits, the Teberebie/Awunaben pit and the Mantraim pit.

     TGL processes its ore using a conventional heap leach operation at three
locations on the Teberebie concession: the East, West, and South Plants. Each
plant was developed during successive phases of project development (see
"Development and Expansion" below). The recently completed Phase III mine
expansion, increased annual crushing capacity to approximately 12 million tonnes
of ore. Ore is crushed in the near-pit gyratory crusher which serves as the
primary crusher for the West Plant and the new South Plant. A jaw crusher, with
a capacity of 3.0 million tonnes per year, continues to be the primary crusher
for the original East Plant. Cement is added to the crushed ore to bind the ore
and to raise its alkalinity to a level conducive to cyanide leaching. The
agglomerate of ore and cement is then placed on a heap leach and is then treated
with a diluted cyanide solution that percolates through the material dissolving
the gold. The diluted cyanide solution containing the dissolved gold drains into
collection ponds. From there, the solution is pumped to an adjacent adsorption
desorption refinery plant (the "ADR Plant") where it passes through a series of
activated carbon adsorption columns. The gold contained in the solution is
adsorbed onto the carbon and the solution is then recirculated to the barren
solution pond where it is refortified with sodium cyanide. Gold is then
chemically stripped from the carbon adsorption columns and recovered from the
stripper solution by electrowinning onto stainless steel cathodes. The cathodes
are removed approximately every two weeks at each ADR Plant, at which time the
gold sludge is washed off and dried. The sludge is then mixed with flux and
smelted to produce dore.

     Gold Production and Sales.  TGL began shipping gold in October 1990. In the
second quarter of 1991, the mine reached then commercially feasible production
levels (about 1,000 ounces per week), and reached full production levels (about
2,000 ounces per week) during the fourth quarter of 1991. Set forth below is a
chart showing TGL's gold shipments for the years ended December 31, 1997, 1996
and 1995:

<TABLE>
<CAPTION>
                                                 1997        1996        1995
                                               (OUNCES)    (OUNCES)    (OUNCES)
                                               --------    --------    --------
<S>                                            <C>         <C>         <C>
TGL Gold Shipments...........................   263,000     203,000     235,000
</TABLE>

     During 1997, gold production increased to 263,000 ounces of gold or 5,100
ounces per week. During the year, TGL implemented its Phase III mine expansion,
including the start-up of the new gyratory crusher and South Plant and
modifications to the West Plant. Also, TGL produced its one-millionth ounce of
gold in January 1997. Gold production in 1998 is estimated to be approximately
340,000 ounces.

     The average realized price of gold sold by TGL during 1997, 1996 and 1995
was $340, $385 and $383 per ounce, respectively. With the exception of 1997, the
average realized price was based on the market spot price of gold at the time of
sale. In 1997, the average realized price of gold includes proceeds from the
sale of floor program options of $15 per ounce. Spot prices of gold fluctuate
widely and are affected by a number of factors including supply and demand,
inflation expectations, the strength of the U.S. dollar and interest rates.

     At present, TGL does not enter into forward gold sales or otherwise engage
in gold price hedging. In the fourth quarter of 1996, TGL entered into a series
of put options which secured a minimum selling price of $340 per ounce to cover
1997 estimated production. When the market price of gold declined below $340 per
ounce between February and December 1997, the Company continued to ship gold to
the refineries and sold

                                       14
<PAGE>   16

the put options, receiving payment for the difference between the market price
of gold and approximately $340 per ounce. In May 1997, TGL purchased additional
options at an exercise price of $320 per ounce to cover estimated production for
the first four months of 1998. The Company may consider additional hedging
strategies if and when it deems circumstances appropriate.

     TGL's cash costs per ounce and total costs per ounce for 1997, 1996 and
1995 are summarized on the following table:

<TABLE>
<CAPTION>
                                                         1997    1996    1995
                                                         ----    ----    ----
<S>                                                      <C>     <C>     <C>
Cash Costs Per Ounce...................................  $230    $266    $198
Total Costs Per Ounce..................................  $337    $361    $277
</TABLE>

     Development and Expansion.  TGL has completed three major capital
expenditure programs at the Teberebie mine to date, designated Phase I, Phase II
and Phase III. Phase I included the development of the mine site and the
construction of the crushing and processing facility known as the East plant.
Phase II, which was completed in 1994, included the construction of a crushing
and processing facility that replicated the East plant and is known as the West
plant. Phase III, which was completed in 1997, included a further heap leach
operation and a near-pit gyratory crushing facility which acts as a primary
crushing facility for both the existing West Plant and the new South Plant. The
Phase III mine expansion increased annual crushing capacity to 12 million tonnes
of ore. The Phase III expansion plan did not require the construction of a third
ADR Plant to support the South Plant. Instead, the existing ADR Plant at the
West Plant was upgraded with a second carbon absorption train and a modified
stripping circuit. The first gold pour associated with the South Plant occurred
in April 1997, but the plant was not fully operational until the fourth quarter.
The cost of the Phase III mine expansion aggregated approximately $56 million,
including 1997, 1996 and 1995 capital expenditures of $5.4 million, $48.1
million and $2.6 million, respectively.

     Customers.  During the year ended December 31, 1997, gold sales aggregated
$89.5 million. During 1997, gold shipments from TGL in Ghana to two unaffiliated
European refiners accounted for $43.9 million and $41 million, respectively, of
total sales, or 95% of such sales. Because of the worldwide demand for gold, the
Company does not believe that the loss of such customers would have a material
adverse effect on the Company or its subsidiaries. The remaining 5% of sales
related to the sales of put options associated with TGL's gold price floor
program and the sale of carbon residue with gold value to a Ghanaian firm.

     Employees.  At March 1, 1998, TGL had 1,469 employees, 1,433 of which are
Ghanaians. The terms of employment and compensation for junior TGL staff, known
as monthly rated employees, are determined pursuant to a collective bargaining
agreement between TGL and the Ghana Mineworkers' Union. The terms of the
collective agreement (other than pay levels) are negotiated every three years.
Pay levels are negotiated annually. The current collective bargaining agreement
expires in January 1999. TGL experienced a two-day work stoppage in each of 1994
and 1996. The 1994 work stoppage was related to the annual pay level
negotiations under the union contract. The 1996 work stoppage was related to two
employee dismissals resulting from a determination by TGL and local union
officials that the employees had violated the disciplinary code. The union did
not organize the 1996 work stoppage. Neither work stoppage had a material effect
on TGL's operations and TGL continues to believe that its relations with its
employees are excellent.

     There is, however, a shortage of available labor with the requisite skills
and experience necessary to operate large-scale mining equipment. TGL has
experienced and continues to experience some difficulty in recruiting employees
with the necessary skills. With the continued development of mines in Ghana, and
in the vicinity of the Teberebie mine, in particular, the shortage will likely
continue and perhaps become more acute.

     Regulation and Taxation.  Mining activities in the Republic of Ghana are
governed by PNDCL 153, the Minerals and Mining Law of 1986 (the "MML").

     The Republic of Ghana is currently developing a system of environmental
regulation that applies to TGL's operations. However, it has always been a
strategic objective of the Company to minimize the effects of its subsidiaries'
mining operations on the environment. TGL has developed an overall environmental
action plan, a reagent spill management plan, a decommissioning plan and has
initiated site rehabilitation and revegetation studies.

                                       15
<PAGE>   17

     In 1994, the Ghana Environmental Protection Agency (the "GEPA") was
established to regulate environmental matters to ensure implementation of
government policies concerning the environment. In May 1994, the Minister of the
Environment, through the Minerals Commission, produced legislative proposals
relating to the environmental regulation of mines and the GEPA produced draft
guidelines relating to air and water quality. The management of TGL regarded
these guidelines as satisfactory and workable. These guidelines were followed by
the publication for consultation of draft regulations that provoked considerable
controversy among the mining community in Ghana and were subsequently withdrawn.
In January 1997, the GEPA published for comment revised draft effluent water
quality water regulations. The comment period has expired, and the draft
effluent water quality regulations are being implemented as guidelines. It is
not possible at this time to determine the effect, if any, the new regulations
may have on TGL's operations.

     In the first quarter of 1994, the Republic of Ghana enacted the Minerals
and Mining (Amendment) Act of 1994 which reduced the income tax rate for mining
companies from 45% to 35%. Pursuant to the terms of the MML, income taxes may be
deferred until recovery of capital investment. Accordingly, deferred taxes at
December 31, 1997, 1996 and 1995, were $7.6 million, $9.6 million and $7.5
million, respectively. Income taxes were deferred during all of 1996 and 1997.
Income tax payments to the Republic of Ghana during 1995 were $14.1 million. Of
such taxes paid in 1995, $5.5 million was attributable to the tax year ended
December 31, 1994.

     Insurance.  The Company maintains $65.5 million of "political risk"
insurance principally from OPIC, covering 90% of its equity and loan guarantees.
This insurance also covers 90% of the Company's proportionate share of TGL's
cumulative retained earnings. The OPIC equity and retained earnings coverage is
presently limited to a ceiling of $63.1 million; however, the Company intends to
apply to increase the ceiling in 1998. There can be no assurance that such OPIC
insurance will become available in 1998. The Company also secured $9 million
foreign exchange exposure insurance from another source to hedge 90% if its
exposure to a limited recourse provision contained in the OPIC Phase III
expansion financing. In addition to other commercial insurance coverage, TGL has
secured business interruption coverage of up to $19.0 million for losses
associated with machinery breakdown and property damage and to defray continuing
infrastructure and interest costs.

     Recent Developments.  TGL estimates 1998 gold production at approximately
340,000 ounces. The estimate has been decreased by 20,000 ounces from TGL's
previously reported target of 360,000 ounces reflecting lower than expected
crushing equipment availability in the first quarter of 1998. TGL's gold
production is dependent upon a number of factors that could cause actual gold
production to differ materially from projections, including obtaining and
maintaining necessary equipment, accessing key supplies, including electrical
power and fuel, and hiring and training supervisory personnel and skilled
workers. Gold production is also affected by the time lag inherent in heap
leaching technology, subject to changing weather conditions and dependent on the
continued political stability in the Republic of Ghana.

     In early 1998, the Republic of Ghana experienced power shortages which
adversely affected TGL's ability to crush and process ore. Presently, certain
processes at the mine are supported by back-up power generation equipment. TGL
is in the process of leasing additional equipment to support all of its power
generation requirements. The use of such equipment will increase the power costs
per tonne processed.

  EXPLORATION ACTIVITIES OF PIONEER GOLDFIELDS

     Since the end of 1993, in addition to continuing to develop the Teberebie
mine, Pioneer Goldfields has increased its exploration activities in the
Republic of Ghana and in other African countries. These activities are currently
conducted by TGL in Ghana and by Pioneer Goldfields in Niger. In 1997, Pioneer
Goldfields discontinued exploration activities in Zimbabwe. As a result, Pioneer
Goldfields is in the process of dissolving its Zimbabwe-registered company,
Lobengula Exploration and Mining Company, Ltd. In 1997, Pioneer Goldfields
incurred exploration costs of approximately $1.9 million, approximately $1.7
million of which related to exploration activities outside of Ghana. In 1996,
Pioneer Goldfields incurred exploration costs of approximately $1.3 million,
approximately $1.2 million of which related to exploration activities outside of
Ghana.

                                       16
<PAGE>   18

  EXPLORATION ACTIVITIES OF TAS-YURJAH MINING COMPANY

     In 1994, the Company entered into a joint venture, Closed Joint-Stock
Company "Tas-Yurjah Mining Company" ("Tas-Yurjah"), with a Russian company to
explore potential gold mining properties in the Khabarovsk Territory of the
Russian Far East. The Company currently owns a 50% direct interest and a 2.5%
indirect interest in Tas-Yurjah. In 1995, Tas-Yurjah secured a license to
conduct exploration activities over a 240 square kilometer area (the "licensed
area"). Tas-Yurjah plans to conduct drilling and geochemical and geological
surveys to further examine anomalies located in the licensed area during 1998.
At December 31, 1997, the Company had expended approximately $3.9 million for
exploration work related to Tas-Yurjah, of which $1.7 million had been expended
in 1997. The Company expects to spend approximately $2.1 million for exploratory
work at Tas-Yurjah in 1998.

TIMBER VENTURES

     The Company holds a majority controlling interest in three companies
located in the Khabarovsk Territory of the Russian Far East, Closed Joint-Stock
Company "Forest-Starma" ("Forest-Starma"), Closed Joint-Stock Company
"Amgun-Forest" ("Amgun-Forest") and Closed Joint-Stock Company "Udinskoye"
(Udinskoye"). The Company has consolidated its ownership of these three
companies under its wholly owned subsidiary, Pioneer Forest, Inc. ("Pioneer
Forest"). Of the three companies, Forest-Starma is the only company which is
operational. Forest-Starma, which is located on Siziman Bay in the Vanino
district of the Khabarovsk Territory, has developed a modern logging camp,
including a harbor facility, from which it exports timber to markets in the
Pacific Rim, primarily Japan and South Korea.

     Leasehold and Cutting Rights.  Forest-Starma, Amgun-Forest and Udinskoye
have each entered into long-term lease arrangements that provide significant
leasehold acreage and annual cutting rights. In the aggregate, the three
subsidiaries have leasehold rights in the Russian Far East comprising 926,400
hectares (approximately 2.3 million acres), with annual cutting rights of
approximately 1.0 million cubic meters. Forest-Starma is actively engaged in
negotiations to expand its existing leasehold. The current leasehold rights of
each of the projects are set forth below:

<TABLE>
<CAPTION>
                                     FOREST-STARMA    AMGUN-FOREST    UDINSKOYE
                                     -------------    ------------    ---------
<S>                                  <C>              <C>             <C>
Hectares (acres)...................     240,000*          485,400      201,000
                                       (593,000)*      (1,200,000)    (497,000)
Annual Cutting Rights (m(3)).......     361,000*          350,000      300,000
</TABLE>

---------------

* Forest-Starma is in the process of finalizing lease agreements for additional
  leasehold rights that will give it total cutting rights of approximately
  555,000 cubic meters over a territory of 390,100 hectares (approximately
  964,000 acres).

     Ownership Structure.  Pioneer Forest currently has a 95% direct interest in
Forest-Starma. The Company has signed an agreement to acquire an additional 2%
direct interest in Forest-Starma. The transfer is currently awaiting regulatory
approvals. Pioneer Forest also has an 80.6% direct interest and 7.1% indirect
interest in Amgun-Forest and a 72% direct interest and 4.2% indirect interest in
Udinskoye.

     Timber Operations.  Timber is harvested at Forest-Starma according to
international sustainable development standards using advanced planning and
implementation of the best available management practices as defined in the U.
S. Forest Service stewardship guidelines and the United Nations Conference on
Environment and Development principles. Five production crews consisting, in
aggregate, of four harvesters, eight skidders, and five processors form the
backbone of the logging operation. The harvesters cut the trees which are then
skidded to five processors which delimb and buck the timber into logs. The logs
are hauled on company constructed roads by log trucks approximately 50
kilometers to a lower landing log yard for sorting and scaling prior to
shipment. The lower landing is equipped with log loaders and other equipment
necessary for maintaining the log yard and delivering sorted logs to the harbor
for shipment. Sorted logs are delivered to the harbor based upon a manifest
received from Forest-Starma's marketing agent, Rayonier, Inc. The logs are then
delivered to the dock and placed on ships by crane. Forest-Starma has
constructed and maintains a self-contained camp with living quarters for between
250 and 300 workers, a modern maintenance and parts facility, on site offices
and advanced communications equipment.

                                       17
<PAGE>   19

     Timber Production.  Timber harvesting commenced in the first quarter of
1995 and the first shipments of timber (acquired in the development phase)
totaling approximately 30,000 cubic meters occurred in the third and fourth
quarter of 1995. In 1996, Forest-Starma shipped approximately 133,000 cubic
meters of timber (acquired in the development phase). Since the project was
still in the development phase, the related revenues of $10.1 million were used
to offset capitalized interest and development costs. In January 1997,
Forest-Starma commenced commercial production of timber and amortization of
deferred development costs. During 1997, Forest-Starma produced and shipped
257,000 cubic meters and 194,000 cubic meters of timber, respectively.
Forest-Starma is expected to produce approximately 360,000 cubic meters of
timber in 1998. A three-year financial summary for the timber business segment
is shown below:

<TABLE>
<CAPTION>
                                              1997             1996             1995
                                          (IN MILLIONS)    (IN MILLIONS)    (IN MILLIONS)
                                          -------------    -------------    -------------
<S>                                       <C>              <C>              <C>
Revenues................................      $11.9            $ -0-            $ -0-
Net Income..............................      $(6.7)           $(0.5)           $ -0-
Total Assets............................      $51.0            $43.4            $33.2
</TABLE>

     Customers.  In 1997, Forest-Starma shipped 57% of its timber to six
unaffiliated customers in Japan and 43% of its timber to eight unaffiliated
customers in South Korea.

     Employees.  At March 1, 1998, Forest-Starma had 543 Russian employees. In
addition, 14 expatriate employees and consultants of the Company's employment
company subsidiary are seconded to Forest-Starma. At Amgun-Forest and Udinskoye,
there are 20 and 10 employees, respectively, all of whom are Russians. Such
employees are not unionized nor are they a party to a collective bargaining
agreement. Salaries are determined annually based on the prevailing market
prices for timber industry employees within the region.

     Capital Structure.  Capital required by this venture is now projected at
approximately $59.9 million through the end of 1998. At December 31, 1997,
project financing aggregated $54.3 million, including $38.2 million in
subordinated debt and accrued interest provided by the Company, $8.7 million in
unpaid liabilities to the Company for ongoing operating expenses and $7.4
million in outstanding third party financing. The Company expects to convert
approximately $15 million of subordinated debt to equity in 1998. Forest-Starma
completed a $9.3 million project financing with OPIC in July 1996, of which $7.4
million remained outstanding at December 31, 1997. As a condition to the OPIC
financing, the Company was required to execute a Project Completion Agreement
pursuant to which the Company would advance funds to Forest-Starma, as
necessary, to permit Forest-Starma to fulfill all of its financial obligations,
including cost overruns related to project development, until such time as
Forest-Starma satisfies a production test and certain financial and project
development benchmarks. Scheduled third-party debt service for 1998 is expected
to aggregate $2 million. Direct investment in Forest-Starma by the Company
aggregated $38.3 million at December 31, 1997.

     Insurance.  In connection with its investment in Forest-Starma, the Company
has secured OPIC political risk insurance in an amount of up to $47 million
which would protect 90% of the Company's equity investment and loans and a
proportionate share of cumulative retained earnings. In addition, the Company
has secured OPIC business income loss insurance of up to $5 million for
Forest-Starma.

     Amgun-Forest and Udinskoye.  The Amgun-Forest timber project is located in
the Polina Osipenko District of the Khabarovsk Territory, approximately 150
kilometers northwest of the city of Komsomolsk-on-Amur and further inland than
Forest-Starma. Duharian Larch, Yeddo Spruce and Amur Fir are the principal
commercial tree species in the project area, with larch constituting
approximately 67% of the exportable product and whitewood (Yeddo Spruce and Amur
Fir together) constituting the balance. The Udinskoye timber project is also
located in the Polina Osipenko District of the Khabarovsk Territory, west of the
Amgun-Forest timber project. The project area encompasses the towns of
Kherpuchi, Oglongi and Udinsk. Duharian Larch is the principal commercial tree
species in the project area, with a small component of Yeddo Spruce.

     Pioneer is considering developing Amgun-Forest and Udinskoye, and both
projects are currently undergoing feasibility analysis. Depending upon factors
such as capital availability, management resources, market demand and the
stabilization of larch prices, Pioneer may elect to develop these projects in
the future. Since inception, the Company provided funding and services to
Amgun-Forest and Udinskoye aggregating $3.8 million, including $1 million in
1997.

                                       18
<PAGE>   20

METALS VENTURES

     Since 1991, a subsidiary of the Company, Pioneer Metals and Technology,
Inc., has been involved in a development-stage business in Russia, through its
subsidiary, for the manufacture, production and sale of powdered metals,
permanent magnets and various trading endeavors.

                            FUTURE OPERATING RESULTS

     Certain of the information contained in this Annual Report on Form 10-K,
including information with respect to the Company's plans and strategies for its
worldwide financial services and natural resource development businesses,
consists of forward-looking statements. For this purpose, any statements
contained herein that are not statements of historical fact may be deemed to be
forward-looking statements. Without limiting the foregoing, the words
"believes," "anticipates," "plans," "expects," "projects," "estimates" and
similar expressions are intended to identify forward-looking statements.
Important factors that could cause actual results to differ materially from
those indicated by such forward-looking statements are set forth in the 1997
Annual Report to Stockholders under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" which is hereby
incorporated by reference.

ITEM 2.  DESCRIPTION OF PROPERTY.

     The Company and its subsidiaries conduct their principal operations from
leased premises with approximately 157,000 square feet at 60 State Street,
Boston, Massachusetts, under two leases. The first to expire of these leases
(which covers substantially all of the space) expires in 2002, with two
five-year renewal options. The rent expense for these premises was approximately
$3.5 million in 1997. The Company believes that its facilities are adequate for
its current needs and that additional space will be available as needed.

     Teberebie Goldfields Limited, conducts mining operations in Tarkwa, Ghana.
The Republic of Ghana has granted TGL land concessions of approximately 42
square kilometers. The operating facilities included on the Teberebie mine site
include approximately 48 housing and office buildings, one gyratory crusher, two
three-stage crushing plants, one four-stage crushing plant, heap leaching
facilities and ponds, two processing plants and refineries, a clinic, a
laboratory, a warehouse and an eight-bay maintenance shop for heavy equipment.
TGL believes that its facilities are generally in a state of good repair and
adequate for its current needs and that additional facilities will be
constructed as needed.

     In December 1992, Pioneer First Polish purchased a 38-year capital lease,
convertible to perpetual use, on a two-year-old, 373-square-meter office
building in Warsaw. Pioneer First Polish is currently subleasing the property to
an unaffiliated corporation for a three-year term that commenced on March 1,
1995. Through March 1999, the Company's Polish subsidiaries have leased
approximately 2,000 square meters of office space in Warsaw. FSL also leases
approximately 1,400 square meters of office space and 502 square meters of
storage space in Warsaw. The terms of the leases range from one to five years.

     The Company's 95%-owned subsidiary, Forest-Starma, is pursuing the
development of timber production in the Khabarovsk Territory of Russia under two
long term leases comprising 340,000 hectares (approximately 593,000 acres) in
the aggregate with annual cutting rights of 361,000 cubic meters. Forest-Starma
is in the process of finalizing lease agreements for additional leasehold rights
that will give Forest-Starma total cutting rights of approximately 555,000 cubic
meters over a territory of 390,100 hectares (approximately 964,000 acres).
Amgun-Forest and Udinskoye, the Company's other majority-owned Russian timber
ventures, each have a long-term lease (50 years) relating to timber harvesting.
The Amgun-Forest lease covers 485,400 hectares (approximately 1,200,000 acres)
with annual cutting rights of 350,000 cubic meters. The Udinskoye lease covers
201,000 hectares (approximately 497,000 acres) with annual cutting rights of
300,000 cubic meters.

ITEM 3.  LEGAL PROCEEDINGS.

     There are no material legal proceedings to which the Company or its
subsidiaries is a party or of which any of their property is subject, other than
ordinary routine litigation incidental to the Company's business.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

     None.

                                       19
<PAGE>   21

                      EXECUTIVE OFFICERS OF THE REGISTRANT

     Set forth below are the names and ages of the executive officers of the
Company, and a description of the positions and offices each holds with the
Company and its significant subsidiaries.

<TABLE>
<CAPTION>
                NAME                   AGE   POSITIONS WITH THE COMPANY AND ITS SIGNIFICANT SUBSIDIARIES
                ----                   ---   -----------------------------------------------------------
<S>                                    <C>   <C>
John F. Cogan, Jr. ..................  71    President, Chief Executive Officer and Chairman of the
                                             Board of the Company since 1962. Chairman of Pioneering
                                             Management since 1993 and President of Pioneering
                                             Management from 1962 to 1993. Director of Pioneering
                                             Management since 1962. Chairman and Director of Pioneer
                                             Distributor. Chairman, President and Trustee of each of the
                                             registered investment companies in the Pioneer Family of
                                             Mutual Funds. President and Director of Pioneer
                                             International, Pioneer Omega and Pioneer First Russia.
                                             Director of Pioneering Services, Pioneer Capital, Pioneer
                                             Real Estate and Pioneer Forest. Chairman and Director of
                                             Pioneer Goldfields, TGL, Closed Joint Stock Company Company
                                             "Pioneer Metals International", Forest-Starma, Pioneer
                                             Investments ("Pioneer Investments"), Amgun-Forest and
                                             Udinskoye. Chairman of Supervisory Board of Pioneer First
                                             Polish, Pioneer Czech and Pioneer Fonds Marketing. Director
                                             of Pioneer Ireland and each of the Irish Funds. Chairman of
                                             Global Funds Distributor. Senior Partner of the Boston law
                                             firm, Hale and Dorr LLP, counsel to the Company.
Robert L. Butler.....................  57    Executive Vice President of the Company since 1985.
                                             Director of the Company since 1988. President and Director
                                             of Pioneer Distributor since 1989. Director of Pioneering
                                             Management, Pioneering Services, Pioneer International and
                                             Pioneer Real Estate. Member of Supervisory Board of Pioneer
                                             First Polish and Pioneer Czech. Vice Chairman of the
                                             Supervisory Board of Pioneer Fonds Marketing. Director of
                                             Pioneer Ireland and each of the Irish Funds. Deputy
                                             Chairman and Managing Director of Global Funds Distributor.
                                             Previously, Vice President of the NASD.
David D. Tripple.....................  54    Executive Vice President of the Company since 1986.
                                             President of Pioneering Management since 1993 and Chief
                                             Investment officer and Director of Pioneering Management
                                             since 1986. Executive Vice President of Pioneering
                                             Management from 1986 to 1993. Executive Vice President and
                                             trustee of each of the registered investment companies in
                                             the Pioneer Family of Mutual Funds. Director of Pioneer
                                             Distributor, Pioneer Capital, Pioneer International,
                                             Pioneer Investments, Pioneer Real Estate, Pioneer Omega,
                                             Pioneer First Russia, Pioneer Ireland and each of the Irish
                                             Funds. Member of Supervisory Board of Pioneer First Polish
                                             and Pioneer Czech.
William H. Keough....................  60    Senior Vice President and Chief Financial Officer of the
                                             Company since 1986. Treasurer of the Company, Pioneer
                                             Distributor, Pioneering Management, Pioneering Services,
                                             Pioneer Capital, Pioneer International, Pioneer Real
                                             Estate, Pioneer Omega and Pioneer First Russia. Treasurer
                                             of each of the registered investment companies in the
                                             Pioneer Family of Mutual Funds.
Timothy T. Frost.....................  42    Vice President of the Company since 1995. Director and Vice
                                             President of Pioneer Omega and Pioneer First Russia. Senior
                                             Vice President of Pioneer International. Vice President of
                                             Pioneer Real Estate. Previously, Managing Director of
                                             Financial Services Volunteer Corps.
</TABLE>

                                       20
<PAGE>   22

<TABLE>
<CAPTION>
                NAME                   AGE   POSITIONS WITH THE COMPANY AND ITS SIGNIFICANT SUBSIDIARIES
                ----                   ---   -----------------------------------------------------------
<S>                                    <C>   <C>
Lucien Girard, III...................  64    Vice President of the Company. Managing Director and Chief
                                             Executive of Pioneer Goldfields and TGL. Director of
                                             Pioneer Metals and Technology, Inc. ("Pioneer Metals").
Stephen G. Kasnet....................  52    Vice President of the Company since 1995. President of
                                             Pioneer Real Estate since January 1996. Trustee and Vice
                                             President of Pioneer Real Estate Shares and Vice President
                                             of Pioneer Variable Contracts Trust. Previously, Managing
                                             Director, First Winthrop Corporation and Winthrop Financial
                                             Associates. Chairman of the Board of Warren Bancorp and
                                             Warren Five Cents Savings Bank and Director of Bradley Real
                                             Estate, Inc.
John F. Lawlor.......................  64    Vice President of the Company and Pioneering Management.
                                             Director of Pioneer Goldfields, TGL, Forest-Starma, Amgun-
                                             Forest, Udinskoye Closed Joint Stock Company "Pioneer
                                             Metals International", Pioneer Forest, Pioneer Ireland and
                                             each of the Irish Funds. Director and Vice President of
                                             Pioneer Metals.
Alicja K. Malecka....................  51    Vice President of the Company and Pioneer Real Estate.
                                             Senior Vice President of Pioneer International. President
                                             of Pioneer First Polish, the Polish Funds and Pioneer
                                             Investment Poland, Sp.zo.o. Member of the Supervisory Board
                                             of FSL and Pioneer Czech.
Frank M. Polestra....................  72    Vice President of the Company since 1975. President and
                                             Director of Pioneer Capital since 1981. President and
                                             Director of Pioneer SBIC Corp.
William H. Smith, Jr.................  62    Vice President of the Company and President and Director of
                                             Pioneering Services since 1985. Vice President and Director
                                             of Pioneer International. Director of Pioneer Ireland and
                                             each of the Irish Funds. Member of the Supervisory Board of
                                             FSL. Previously, President of Securities Fund Services,
                                             Inc. between 1981 and 1985.
Joseph P. Barri......................  51    Secretary of the Company since 1978. Secretary of each of
                                             the registered investment companies in the Pioneer Family
                                             of Mutual Funds, Pioneering Management, Pioneer Capital,
                                             Pioneer Distributor, Pioneering Services, Pioneer Omega,
                                             Pioneer First Russia and Pioneer International. Senior
                                             Partner of the Boston law firm, Hale and Dorr LLP, counsel
                                             to the Company.
Robert P. Nault......................  34    General Counsel and Assistant Secretary of the Company
                                             since 1995. Assistant Secretary of each of the registered
                                             investment companies in the Pioneer Family of Mutual Funds,
                                             Pioneering Management, Pioneer Capital, Pioneer
                                             Distributor, Pioneering Services, Pioneer International,
                                             Pioneer Omega, Pioneer First Russia and Pioneer Goldfields.
                                             Secretary of Pioneer Real Estate and Pioneer Forest.
                                             Previously, Junior Partner of the Boston law firm, Hale and
                                             Dorr LLP, counsel to the Company.
</TABLE>

                                       21
<PAGE>   23

                                    PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

     Incorporated by reference from the 1997 Annual Report to Stockholders under
the captions "Information Relating to Shares," "Dividends on Common Stock" and
"Price Range of Common Stock."

ITEM 6.  SELECTED FINANCIAL DATA.

     Incorporated by reference from the 1997 Annual Report to Stockholders under
the caption "Five Year Summary of Selected Financial Data."

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS.

     Incorporated by reference from the 1997 Annual Report to Stockholders under
the caption "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

     The quantitative and qualitative disclosures about market risk are not
effective for the Company for this filing. The accounting policy disclosures
have been included in the Notes to the Consolidated Financial Statements which
are included in the 1997 Annual Report to Stockholders and incorporated herein
by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

     Incorporated by reference from the 1997 Annual Report to Stockholders under
the caption "Consolidated Financial Statements and Notes to Consolidated
Financial Statements" and "Report of Independent Public Accountants."

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE.

     Not applicable.

                                    PART III

ITEMS 10-13.

     The information required for Part III in this Annual Report on Form 10-K is
incorporated by reference from the Company's definitive proxy statement for the
Company's 1998 Annual Meeting of Stockholders. Such information will be
contained in the sections of such proxy statement captioned "Security Ownership
of Certain Beneficial Owners, Directors and Executive Officers," "Election of
Directors," "Directors' Meetings and Fees," "Committee Meetings," "Executive
Compensation," "Stock Option Grants and Exercises," "Certain Transactions" and
"Compliance with Section 16 of the Securities Exchange Act of 1934." Information
regarding executive officers of the Company is also furnished in Part I of this
Annual Report on Form 10-K under the heading "Executive Officers of the
Company."

                                       22
<PAGE>   24

                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

     (a) The following documents are included as part of this Annual Report on
Form 10-K.

1.  FINANCIAL STATEMENTS:

<TABLE>
<S>                                                           <C>
Report of Independent Public Accountants....................    33*
Consolidated Statements of Income for the Three years Ended
  December 31, 1997.........................................    34*
Consolidated Balance Sheets as of December 31, 1997 and
  1996......................................................    35*
Consolidated Statements of Changes in Stockholders' Equity
  for the Three Years Ended December 31, 1997...............    36*
Consolidated Statements of Cash Flows for the Three Years
  Ended December 31, 1997...................................    37*
Notes to Consolidated Financial Statements..................    38*
</TABLE>

---------------

* Refers to page number in 1997 Annual Report to Stockholders. Each such
  financial statement or report is hereby incorporated herein by reference to
  the 1997 Annual Report to Stockholders which is filed as an exhibit to this
  report.

2.  FINANCIAL STATEMENT SCHEDULES:

     All financial statement schedules are omitted because they are not
applicable or the required information is shown in the Consolidated Financial
Statements or the Notes thereto.

3.  EXHIBITS:

     The exhibits filed with or incorporated into this Annual Report on Form
10-K are listed on the "Index to Exhibits" below.

     (b) Reports on Form 8-K:

     None.

                                       23
<PAGE>   25

                                   SIGNATURES

     Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized, on March 30, 1998.

                                            THE PIONEER GROUP, INC.

                                            BY: /s/ JOHN F. COGAN, JR.
                                              ----------------------------------
                                                     JOHN F. COGAN, JR.,
                                                          President

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.

<TABLE>
<CAPTION>
                     SIGNATURE                                     TITLE                     DATE
                     ---------                                     -----                     ----
<C>                                                  <S>                                <C>

              /s/ JOHN F. COGAN, JR.                 Principal Executive Officer and    March 30, 1998
---------------------------------------------------  Director
                JOHN F. COGAN, JR.

               /s/ WILLIAM H. KEOUGH                 Principal Financial Officer and    March 30, 1998
---------------------------------------------------  Principal Accounting Officer
                 WILLIAM H. KEOUGH

               /s/ ROBERT L. BUTLER                  Director                           March 30, 1998
---------------------------------------------------
                 ROBERT L. BUTLER

               /s/ MAURICE ENGLEMAN                  Director                           March 30, 1998
---------------------------------------------------
                 MAURICE ENGLEMAN

               /s/ ALAN J. STRASSMAN                 Director                           March 30, 1998
---------------------------------------------------
                 ALAN J. STRASSMAN

               /s/ JASKARAN S. TEJA                  Director                           March 30, 1998
---------------------------------------------------
                 JASKARAN S. TEJA

               /s/ DAVID D. TRIPPLE                  Director                           March 30, 1998
---------------------------------------------------
                 DAVID D. TRIPPLE

               /s/ JOHN H. VALENTINE                 Director                           March 30, 1998
---------------------------------------------------
                 JOHN H. VALENTINE
</TABLE>

                                       24
<PAGE>   26

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
     EXHIBIT NO.                                      EXHIBIT
     -----------                                      -------
  <S>                  <C>  <C>
   3.1(17)             --   Certificate of Incorporation, as amended
   3.2(1)              --   By-Laws, as amended
  10.1(15)             --   Form of Management Contract with Pioneer Mutual Funds
  10.2(15)             --   Form of Investment Company Service Agreement with Pioneer
                            Mutual Funds
  10.3(1)(7)           --   Retirement Benefit Plan and Trust
  10.4(5)(7)           --   1988 Stock Option Plan, as amended
  10.5(5)              --   Lease, dated as of July 3, 1991, between the Trustees of 60
                            State Street and the Company
  10.6(2)(7)           --   Form of Employment Agreements with Regional Vice Presidents
  10.7(15)             --   Revised Form of Underwriting Contract with Pioneer Funds
  10.8(3)(7)           --   1990 Restricted Stock Plan
  10.9(4)              --   Deed of Warranty, dated December 3, 1987, between the
                            Government of Republic of Ghana, Teberebie Goldfields
                            Limited and The Pioneer Group, Inc.
  10.10(4)             --   Lease, dated February 2, 1988, between the Government of the
                            Republic of Ghana and Teberebie Goldfields Limited
  10.11(4)             --   Map of Mining Operations in Tarkwa, Ghana
  10.12(6)             --   Refining Agreement, dated as of August 23, 1993, between
                            Teberebie Goldfields Limited and Metalor
  10.13(6)             --   OPIC Contract of Insurance Against Inconvertibility,
                            Expropriation and Political Violence between OPIC and
                            Pioneer Goldfields Limited, dated August 12, 1993
  10.14(6)             --   Credit Agreement, dated as of June 1, 1993, between
                            Teberebie Goldfields Limited and Skandinaviska Enskilda
                            Banken
  10.15(8)             --   Agreement, dated May 10, 1994, between Teberebie Goldfields
                            Limited and Johnson Matthey PLC
  10.16(8)             --   Contract, dated May 30, 1994, among Timber Harvesting
                            Equipment Sales, Inc., Joint-Stock Company "Forest-Starma"
                            and the Company
  10.17(8)             --   Contract, dated August 4, 1994, among Morbark Northwest,
                            Inc., Joint-Stock Company "Forest-Starma" and the Company
  10.18(8)             --   Contract, dated May 25, 1994, among Caterpillar Overseas
                            S.A., Joint-Stock Company "Forest Starma" and the Company
  10.19(8)             --   OPIC Contract of Insurance Against Business Income Loss
                            between OPIC and the Company, effective September 30, 1992,
                            as amended (No. D581)
  10.20(8)             --   OPIC Contract of Insurance Against Business Income Loss
                            between OPIC and the Company, effective September 30, 1992,
                            as amended (No. D582)
  10.21(8)             --   OPIC Contract of Insurance Against Inconvertibility,
                            Expropriation and Political Violence between OPIC and the
                            Company, effective September 30, 1992 as amended (No. D547)
  10.22(8)             --   OPIC Contract of Insurance Against Inconvertibility,
                            Expropriation and Political Violence between OPIC and the
                            Company, effective September 30, 1992 (No. D545)
  10.23(8)             --   Consulting Agreement, dated as of January 2, 1995, between
                            the Company and Pioneer First Polish Trust Fund Joint Stock
                            Company ("Pioneer Poland")
  10.24(8)             --   Services Contract, dated January 1, 1994, between Pioneering
                            Services Corporation and Financial Services Limited
  10.25(8)             --   Agreement, dated June 25, 1992, between Pioneer Poland and
                            Bank Polska Kasa Opieka S.A. ("Bank Pekao")
  10.26(8)             --   Agreement, dated as of June 25, 1992, between Bank Pekao and
                            Pioneer International Corporation
  10.27(8)             --   Agreement, dated June 25, 1992, between Bank Pekao and
                            Pioneer Poland
  10.28(8)             --   Agreement, dated September 24, 1992, between Pioneer Poland
                            and Financial Services Limited
</TABLE>
<PAGE>   27

<TABLE>
<CAPTION>
     EXHIBIT NO.                                      EXHIBIT
     -----------                                      -------
  <S>                  <C>  <C>
  10.29(9)             --   Master Share Purchase Agreement dated as of April 7, 1995 by
                            and among Pioneer Omega, Inc. and First Voucher Fund
  10.30(9)             --   Agreement dated as of April 7, 1995 by and among Pioneer
                            Omega, Inc. and DOM Investment Company
  10.31(9)             --   Agreement dated as of April 7, 1995 by and among Pioneer
                            Omega, Inc. and Moscow International Business Centre Limited
  10.32(9)             --   Stockholders Agreement dated as of April 11, 1995 by and
                            among the Company and Moscow International Business Centre
                            Limited
  10.33(10)            --   Collective Agreement dated as of July 3, 1995 between
                            Teberebie Goldfields Limited and the Ghana MineworkerI Union
                            of T.U.C.
  10.34(11)            --   Contract of Insurance Against Incontrovertibility,
                            Expropriation and Political Violence dated September 29,
                            1995 between the Overseas Private Investment Corporation and
                            the Company
  10.35(7)(12)         --   1995 Restricted Stock Plan
  10.36(12)            --   Credit Agreement between Teberebie Goldfields Limited and
                            Skandinaviska Enskilda Banken AB dated as of March 11, 1996
  10.37(7)(13)         --   1995 Employee Stock Purchase Plan
  10.38(13)            --   Loan Agreement dated as of April 23, 1996, by and between
                            Teberebie Goldfields Limited and Caterpillar Financial
                            Services Corporation.
  10.39(13)            --   Chattel Mortgage dated as of April 23, 1996, by and between
                            Teberebie Goldfields Limited and Caterpillar Financial
                            Services Corporation.
  10.40(13)            --   Credit Agreement dated as of June 6, 1996, by and among the
                            Company, Certain of its subsidiaries, the Lenders and The
                            First National Bank of Boston, as agent for itself and the
                            other Lenders.
  10.41(13)            --   Loan Agreement dated as of May 16, 1996, by and between
                            Teberebie Goldfields Limited and Caterpillar Financial
                            Corporation.
  10.42(14)            --   Sublease dated as of August 15, 1996, between the Company
                            and Citizens Financial Group, Inc.
  10.43(16)            --   Subscription Agreement dated as of October 16, 1996, between
                            Pioneer First Russia, Inc. and International Finance
                            Corporation.
  10.44(16)            --   Shareholders Agreement dated as of October 16, 1996, among
                            Pioneer Omega, Inc. and Pioneer First Russia, Inc. and
                            International Finance Corporation.
  10.45(16)            --   Put and Call Agreement dated as of October 16, 1996, among
                            Pioneer First Russia, Inc. and Pioneer Omega, Inc. and
                            International Finance Corporation.
  10.46(16)            --   Credit Facility Agreement dated 19th December, 1996, for
                            Pioneer Real Estate Advisors, Inc. provided by Banque
                            Societe Generale Vostok.
  10.47(16)            --   First Amendment to Lease dated as of the 31st day of January
                            1994, by and between the Trustees of 60 State Street Trust
                            and the Company.
  10.48(16)            --   Second Amendment to Lease dated as of September 30, 1996, by
                            and between The Trustees of 60 State Street Trust and the
                            Company.
  10.49(16)            --   Third Amendment to Lease dated as of November 15, 1996, by
                            and between The Trustees of 60 State Street Trust and the
                            Company.
  10.50(16)            --   Finance Agreement dated as of October 25, 1996, between
                            Teberebie Goldfields Limited and the Overseas Private
                            Investment Corporation.
  10.51(16)            --   Project Completion Agreement dated as of October 28, 1996,
                            among Teberebie Goldfields Limited, the Company and Overseas
                            Private Investment Corporation.
  10.52(16)            --   Overseas Private Investment Corporation Contract of
                            Insurance Against Inconvertibility, Expropriation and
                            Political Violence between the Overseas Private Investment
                            Corporation and Pioneer Omega, Inc.
  10.53(17)            --   Finance Agreement between Closed Joint-Stock Company
                            "Forest-Starma" and Overseas Private Investment Corporation
                            dated as of December 21, 1995.
  10.54(17)            --   Project Completion Agreement among Closed Joint-Stock
                            Company "Forest-Starma", the Company, International
                            Joint-Stock Company "Starma Holding" and Overseas Private
                            Investment Corporation dated as of December 21, 1995.
  10.55(17)            --   Closed Joint-Stock Company "Forest-Starma" Promissory Note
                            in the principal amount of $9.3 million dated as of July 1,
                            1996.
</TABLE>
<PAGE>   28

<TABLE>
<CAPTION>
     EXHIBIT NO.                                      EXHIBIT
     -----------                                      -------
  <S>                  <C>  <C>
  10.56(17)            --   Amendment to Finance Agreement dated as of June 24, 1996
                            between Closed Joint-Stock Company "Forest-Starma" and
                            Overseas Private Investment Corporation.
  10.57(17)            --   Amendment No. 1 to Credit Agreement dated as of April 23,
                            1997, among the Company, certain of its subsidiaries, the
                            Lenders and The First National Bank of Boston.
  10.58(18)            --   Amendment No. 2 to Credit Agreement dated as of June 30,
                            1997, by and among the Company, certain of its subsidiaries,
                            the Lenders and BankBoston, N.A. f/k/a/ The First National
                            Bank of Boston.
  10.59(18)(7)         --   1997 Stock Incentive Plan
  10.60(19)            --   Note Agreement dated as of August 14, 1997 by and between
                            the Company and The Travelers Insurance Company.
  10.61*               --   Amendment No. 3 to Credit Agreement dated as of June 30,
                            1997, by and among the Company, certain of its subsidiaries,
                            the Lenders and BankBoston, N.A. f/k/a/ The First National
                            Bank of Boston
  10.62*               --   Investment Agreement dated as of February 11, 1998 by and
                            between AS Eesti Forekspank and ZAO Pioneer Bank.
  10.63*               --   Fourth Amendment to Lease dated as of September 11, 1997, by
                            and between The Trustees of 60 State Street Trust and the
                            Company.
  11*                  --   Computation of Earnings Per Share.
  13*                  --   1997 Annual Report to Stockholders (which is not deemed
                            "filed" except with respect to the portions specifically
                            incorporated herein by reference)
  21(16)               --   Subsidiaries
  23*                  --   Consent of Arthur Andersen LLP
  27.97*               --   Financial Data Schedule (1997)
  27.96*               --   Financial Data Schedule (1996)
  27.95*               --   Financial Data Schedule (1995)
</TABLE>

---------------

   * Filed herewith

 (1) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1986.

 (2) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1988.

 (3) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1989.

 (4) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1990.

 (5) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1991.

 (6) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1993.

 (7) Management contract or compensatory plan or arrangement filed as an exhibit
     to this Form pursuant to Items 14(a) and 14(c) of Form 10-K.

 (8) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1994.

 (9) Incorporated herein by reference to the exhibits to the Company's Quarterly
     Report on Form 10-Q for the quarter ended March 31, 1995.

(10) Incorporated herein by reference to the exhibits to the Company's Quarterly
     Report on Form 10-Q for the quarter ended June 30, 1995.
<PAGE>   29

(11) Incorporated herein by reference to the exhibits to the Company's Quarterly
     Report on Form 10-Q for the quarter ended September 30, 1995.

(12) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1995.

(13) Incorporated herein by reference to the exhibits to the Company's Quarterly
     Report on Form 10-Q for the quarter ended June 30, 1996.

(14) Incorporated herein by reference to the exhibits to the Company's Quarterly
     Report on Form 10-Q for the quarter ended September 30, 1996.

(15) Incorporated herein by reference to the exhibits to the Registration
     Statement on Form N-1A for the Pioneer Micro Cap Fund (File Nos. 333-18639,
     811-07985) filed December 23, 1996.

(16) Incorporated herein by reference to the exhibits to the Company's Annual
     Report on Form 10-K for the year ended December 31, 1996.

(17) Incorporated herein by reference to the exhibits to the Company's Quarterly
     Report on Form 10-Q for the quarter ended March 31, 1997.

(18) Incorporated herein by reference to the exhibits to the Company's Quarterly
     Report on Form 10-Q for the quarter ended June 30, 1997.

(19) Incorporated herein by reference to the exhibits to the Company's Quarterly
     Report on Form 10-Q for the quarter ended September 30, 1997.