<PAGE>
FILE NO. 811-2842
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
[ ] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X] AMENDMENT NO. 18
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SAMARNAN INVESTMENT CORPORATION
- ----------------------------------------------------------------------
Exact Name of Registrant as Specified in Charter
214 NORTH RIDGEWAY DRIVE, CLEBURNE, TEXAS 76031
- ----------------------------------------------------------------------
Address of Principal Executive Offices (Number, Street, City, State, Zip Code)
(817) 641-7881
- ----------------------------------------------------------------------
Registrant's Telephone Number, including Area Code
GEORGE S. WALLS, JR. 214 NORTH RIDGEWAY DRIVE, CLEBURNE, TEXAS 76031
- ----------------------------------------------------------------------
Name and Address (Number, Street, City, State, Zip Code)
of Agent for Service
<PAGE>
SAMARNAN INVESTMENT CORPORATION
FORM N-2
CROSS REFERENCE SHEET
ITEM OF FORM N-2 PAGE IN FORM N-2*
- ---------------- -----------------
PART A
Item 1. Outside Front Cover Not Applicable
Item 2. Inside Front Cover and Outside Back Cover Page Not Applicable
Item 3. Fee Table and Synopsis Not Applicable
Item 4. Financial Highlights Not Applicable
Item 5. Plan of Distribution Not Applicable
Item 6. Selling Shareholders Not Applicable
Item 7. Use of Proceeds Not Applicable
Item 8. General Description of the Registrant 2 & 3
Item 9. Management 3 - 7
Item 10. Capital Stock, Long-Term Debt, and Other Securities 7 & 8
Item 11. Defaults and Arrears on Senior Securities 8
Item 12. Legal Proceedings 8
Item 13. Table of Contents of the Statement of Additional 8
Information
PART B
Item 14. Cover Page Not Applicable
Item 15. Table of Contents Not Applicable
Item 16. General Information and History Not Applicable
Item 17. Investment Objectives and Policies 9
Item 18. Management 9
Item 19. Control Persons and Principal Holders of Securities 9
Item 20. Investment Advisory and Other Services 9
Item 21. Brokerage Allocation and Other Practices 9
Item 22. Tax Status 9
Item 23. Financial Statements 9
(i)
<PAGE>
PART C
Item 24. Financial Statements and Exhibits 10 & 11
Item 25. Market Arrangements Not Applicable
Item 26. Other Expenses of Issuance and Distribution Not Applicable
Item 27. Persons Controlled by or Under Common Control 11
Item 28. Number of Holders of Securities 11
Item 29. Indemnification 11
Item 30. Business and Other Connections of Investment Adviser 11
Item 31. Location of Accounts and Records 11
Item 32. Management Services 11
Item 33. Undertakings 11
Signatures 12
* Filed in Item-and-Answer Form
(ii)
<PAGE>
PART A
THE PROSPECTUS
ITEM 1. OUTSIDE FRONT COVER
Not Applicable.
ITEM 2. INSIDE FRONT COVER AND OUTSIDE BACK COVER PAGE
Not Applicable.
ITEM 3. FEE TABLE AND SYNOPSIS
Not Applicable.
ITEM 4. FINANCIAL HIGHLIGHTS
Not Applicable.
ITEM 5. PLAN OF DISTRIBUTION
Not Applicable.
ITEM 6. SELLING SHAREHOLDERS
Not Applicable.
ITEM 7. USE OF PROCEEDS
Not Applicable.
ITEM 8. GENERAL DESCRIPTION OF THE REGISTRANT
1. GENERAL:
(a) The answer to this Item is found on Page 2 in the response
to Item 1, of the Registrant's initial registration
statement on Form N-8B-1 (Commission File No. 2-33344)
(hereinafter referred to as the "Registration Statement"),
which material is hereby incorporated by reference.
(b) The answer to this Item is found on Page 2 in response to
Item 3 of the Registrant's Registration Statement, which
material is hereby incorporated by reference.
2. INVESTMENT OBJECTIVES AND POLICIES:
(a) The Registrant's investment objective, which it met in
fiscal 1995, is to maintain its qualification as a
"regulated investment company" under Subchapter M of the
Internal Revenue Code.
This objective may not be changed without the vote of the
holders of a majority of the Registrant's outstanding voting
securities.
2
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(b) Consistent with this objective, the Registrant's portfolio
emphasis is the investment exclusively in tax-exempt
obligations issued by a State of the United States or the
District of Columbia or a political subdivision of a State
or Territory of the United States or any public
instrumentality thereof.
(c) The policies of the Registrant with respect to investments
are set forth on pages 2 and 3 in response to Items 4 and 5
of the Registrant's Registration Statement, which material
is hereby incorporated by reference.
(d) Not applicable.
3. RISK FACTORS:
Investments by the Registrant in tax-exempt government obligations
are primarily subject to the risk that the governmental authority
issuing the obligations may default in the payment of interest
and/or principal payable under its obligations and may seek the
protection of the Federal bankruptcy laws. The Registrant has not
experienced any such default to date.
4. OTHER POLICIES:
The answer to this Item is found on page 3 of the Regulation
Statement in response to Item 4 (g), which material is hereby
incorporated by reference.
5. SHARE PRICE DATA:
The Registrant's securities are not listed on any stock exchange
nor are transactions in its securities reported on NASDAQ.
Consequently, the information requested by this Item is
inapplicable.
6. BUSINESS DEVELOPMENT COMPANIES:
Not applicable.
ITEM 9. MANAGEMENT
1. GENERAL:
(a) BOARD OF DIRECTORS:
The Board of Directors of the Registrant is responsible for
managing the business and affairs of the Registrant.
(b) INVESTMENT ADVISERS:
The Registrant has one investment advisor, Voyageur Fund
Managers ("Fund Managers") whose principal business address
is 90 South Seventh Street, Minneapolis, Minnesota 55402.
Fund Managers is a registered investment adviser under the
Investment Advisers Act of 1940.
3
<PAGE>
Fund Managers is an indirect wholly-owned subsidiary of
Dougherty Financial Group, Inc. (DFG), which is owned
approximately 49% by Michael E. Dougherty, 49% by Pohlad
Companies and 2% by certain benefit plans on behalf of DFG
employees. Mr. Dougherty co-founded the predecessor of DFG
in 1977 and has served as DFG's Chairman of the Board and
Chief Executive Officer since its inception. Pohlad
Companies is a holding company owned in equal parts by each
of James O. Pohlad, Robert C. Pohlad, and William M. Pohlad.
Under the Investment Advisory Agreement, dated as of April
1, 1991 (the "Agreement"), between the Registrant and Fund
Managers, which was approved by the Registrant's
shareholders on April 25, 1991, Fund Managers provides the
Registrant with investment advice and statistical services
regarding its investments, including, subject to
authorization by the President of the Registrant, placing
orders for the purchase and sale of the Registrant's
portfolio securities.
Fund Managers has advised the Registrant that in effecting
portfolio transactions on behalf of the Registrant, Fund
Managers will seek the most favorable price consistent with
the best execution. Fund Managers may, however, select a
dealer to effect a particular transaction without
communicating with all dealers who might be able to effect
such transaction because of the volatility of the money
market and the desire of Fund Managers to accept a
particular price for a security because the price offered by
the dealer meets guidelines for profit, yield, or both.
Decisions with respect to placement of the Registrant's
portfolio transactions are made by Fund Managers. The
primary consideration in making these decisions is
efficiency in executing orders and obtaining the most
favorable prices for the Registrant. When consistent with
these objectives, business may be placed with broker-dealers
who furnish investment research services to Fund Managers.
Such research services would include advice, both directly
and in writing, as to the value of securities, the
advisability of investing in, purchasing, or selling
securities, and the availability of securities or purchasers
or sellers of securities, as well as analyses and reports
concerning issues, industries, securities, economic factors
and trends, portfolio strategy, and the performance of
accounts. The research services may allow Fund Managers to
supplement its own investment research activities and enable
Fund Managers to obtain the view and information of
individuals and research staffs of many different securities
firms prior to making investment decisions for the
Registrant. To the extent portfolio transactions are
effected with broker-dealers who furnish research services,
Fund Managers would receive a benefit, which is not capable
of evaluation in dollar amounts, without providing any
direct monetary benefit to the Registrant from these
transactions.
4
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Fund Managers has not entered into any formal or informal
agreements with any broker-dealers, and does not maintain
any "formula" that will be required to be followed in
connection with the placement of the Registrant's portfolio
transactions in exchange for research services provided to
Fund Managers, except as noted below. However, Fund
Managers does maintain an informal list of broker-dealers
which it will use as a general guide in the placement of the
Registrant's business in order to encourage certain broker-
dealers to provide Fund Managers with research services
which Fund Managers anticipates will be useful to it.
Because this list is merely a general guide, which is to be
used only after the primary criteria for the selection of
broker-dealers (discussed above) has been met, substantial
deviations from the list are permissible and may be expected
to occur.
Fund Managers will not effect any brokerage transactions in
the Registrant's portfolio securities with any broker-dealer
affiliated directly or indirectly with Fund Managers.
Pursuant to conditions set forth in rules of the Securities
and Exchange Commission, the Registrant may purchase
securities from an underwriting syndicate of which an
affiliated broker-dealer is a member (but not directly from
such affiliated broker-dealer itself). Such conditions
relate to the price and amount of the securities purchased,
the commission or spread paid and the quality of the issuer.
The rules further require that such purchases take place in
accordance with procedures adopted and reviewed periodically
by the Board of Directors of the Registrant, particularly
those Directors who are not "interested persons" of the
Registrant.
When two or more clients of Fund Managers are simultaneously
engaged in the purchase or sale of the same security, the
prices and amounts are allocated in accordance with a
formula considered by Fund Managers to be equitable to each
client. In some cases, this system could have a detrimental
effect on the price or volume of the security as far as each
client is concerned. In other cases, however, the ability
of the clients to participate in volume transactions will
produce better executions for each client.
Under the Agreement, the Registrant pays Fund Managers an
advisory fee of $12,000 per quarter, payable quarterly
within five days after the end of each calendar quarter. At
December 31, 1995, the Registrant had net assets of
$18,331,390 and the annual fee payable under the Agreement
represented approximately 0.26% of the Registrant's net
assets at that date.
5
<PAGE>
The Registrant has paid Fund Managers under the Agreement an
advisory fee of $48,000 in each of the three years ended
December 31, 1995.
(c) PORTFOLIO MANAGEMENT:
The name and title of the person employed by Fund Managers
who is primarily responsible for the day-to-day management
of the Registrant's portfolio is Steven P. Eldredge. Mr.
Eldredge has been a Senior Vice President/Senior Tax Exempt
Portfolio Manager of Fund Managers since July 1995, prior to
which he was a Chief Operating Officer and Senior Portfolio
Manager at Palm Beach Capital Management, Inc., in Orlando,
Florida from February 1989 to June 1995. In addition, Jane
M. Wyatt, the Chief Investment Officer of Fund Managers, has
overall supervisory responsibility with respect to all open-
end and closed-end funds managed by Fund Managers.
(d) ADMINISTRATORS:
Not applicable.
(e) CUSTODIANS:
The name and principal business address of the Registrant's
custodian, transfer agent and dividend paying agent are as
follows:
Custodian:
Trust Company of Texas
7001 Preston Road, Suite 300
Dallas, Texas 75205
Transfer Agent and Dividend Paying Agent:
Securities Transfer Corporation
16910 Dallas Parkway, Suite 100
Dallas, Texas 75248
(f) EXPENSES:
The Regstrant pays, in addition to the fees payable to Funds
Managers under the Agreement, expenses for legal and
accounting fees, the fees and expenses of its custodian,
transfer agent and dividend paying agent as well as the
costs of its shareholders meetings.
(g) AFFILIATED BROKERAGE:
All portfolio transactions in the Registrant's securities
during the three years ended December 31, 1995, were
transacted with primary market makers acting as principal on
a net basis. Accordingly, the Registrant did not pay any
brokerage commissions, as such, during such three year
period, however, the market makers were compensated in the
form of a "mark-up" or "mark-down" which may have resulted
in a profit or a loss to them from such transactions. None
of such market makers was
6
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an affiliated person of the Registrant or of Fund Managers,
or an affiliated person of any such person. The Registrant
has not purchase any underwritten issues of securities for
its portfolio during the three year period ended Decemer 31
1995.
2. NON-RESIDENT MANAGERS:
Not applicable.
3. CONTROL PERSONS:
Reference is made to the caption "Principal Shareholders" on pages
2, 3 and 4 of the Registrant's Proxy Statement, dated April 5,
1996, filed with the Commission (the "Proxy Statement") for
information relating to control of the Registrant, which material
is hereby incorporated by reference. The information contained
therein is the same as of April 25, 1996.
Reference is made to the caption "Election of Directors" on pages
5, 6 and 7 of the Proxy Statement for information as to the name,
address, age, and the principal occupation during the past five
years of each director and officer of the Registrant and also to
those directors who are "interested persons" of the Registrant and
to the sub caption "Election of Directors - Remuneration" on page
7 of the Proxy Statement for the compensation paid to the officers
and directors of the Registrant, which material is hereby
incorporated by reference. The information contained therein is
the same as of April 25, 1996.
Reference is made to the caption "Stock Ownership of Directors and
Officers" on pages 4 and 5 of the Proxy Statement for information
as to the equity securities of the Registrant owned by all of its
officers and directors, which material is hereby incorporated by
reference. The information contained therein is the same as of
April 25, 1996.
ITEM 10. CAPITAL STOCK, LONG-TERM DEBT, AND OTHER SECURITIES
1. CAPITAL STOCK:
The Registrant has only one class of capital stock authorized,
Common Stock, par value $1.00 per share.
A description of the rights of the holders of the Registrant's
Common Stock is found on page 8 of the Registration Statement in
response to Item 26, which material is hereby incorporated by
reference.
2. LONG-TERM DEBT:
The Registrant has no long-term debt.
3. GENERAL:
Not applicable.
4. TAXES:
7
<PAGE>
For fiscal year 1995, Registrant qualified as a "regulated
investment company" under Subchapter M of the Internal Revenue
Code. As a "regulated investment company", income and dividends
are not taxable to Registrant or its shareholders, but capital
gains distributions are taxable. Registrant does not intend to
reinvest dividends and will pay dividends from its net investment
income at such times and in such amounts as the Board of Directors
determines. The Registrant will inform shareholders of the amount
and nature of the income and gains.
5. OUTSTANDING SECURITIES:
As of April 25, 1996, the authorized and outstanding shares of the
Registrant's Common Stock was as follows:
AUTHORIZED OUTSTANDING
2,000,000 shares 1,201,768 shares
6. SECURITIES RATINGS:
Not applicable.
ITEM 11. DEFAULTS AND ARREARS ON SENIOR SECURITIES
Not applicable. The Registrant does not have any Senior Securities.
ITEM 12. LEGAL PROCEEDINGS
None.
ITEM 13. TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
Not applicable.
8
<PAGE>
PART B
INFORMATION REQUIRED IN A STATEMENT OF
ADDITIONAL INFORMATION
ITEM 14. COVER PAGE
Not applicable.
ITEM 15. TABLE OF CONTENTS
Not applicable.
ITEM 16. GENERAL INFORMATION AND HISTORY
Not applicable.
ITEM 17. INVESTMENT OBJECTIVES AND POLICIES
The answer to this item is fully responded to in Item 8 of Part A
hereof.
ITEM 18. MANAGEMENT
The answer to this Item is fully responded to in Item 9 of Part A
hereof.
ITEM 19. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
The answer to this Item is fully responded to in Item 9 of Part A
hereof.
ITEM 20. INVESTMENT ADVISORY AND OTHER SERVICES
The answer to this Item is fully responded to in Item 9 of Part A
hereof.
ITEM 21. BROKERAGE ALLOCATION AND OTHER PRACTICES
The answer to this Item is fully responded to in Item 9 of Part A
hereof.
ITEM 22. TAX STATUS
The answer to this Item is fully responded to in Item 10 of Part A
hereof.
ITEM 23. FINANCIAL STATEMENTS
Reference is made to Item 24 of Part C hereof for the financial
statements filed as exhibits hereto.
9
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS:
(i) Statement of Assets and Liabilities as of December
31, 1995.
(ii) Portfolio of Investment Securities as of December 31,
1995.
(iii) Statement of Operations for the Year ended December
31, 1995.
(iv) Statement of Changes in Net Assets for the Years
ended December 31, 1995 and 1994.
(v) Notes to Financial Statements.
(vi) Selected Per Share Data and Ratios for Each of the
Years in the Five Year Period ended December 31,
1995.
All of the foregoing are in Registrant's Annual Report to
Shareholders for 1995, which material is incorporated by
reference in Part B hereof.
(b) EXHIBITS:
(27) Financial Data Schedule
(99.1) Amended Articles of Incorporation (1)
(99.2) By-Laws (1)
(99.3) None
(99.4) Specimen Stock Certificate (1)
(99.5) None
(99.6) None
(99.7) Investment Advisory Contract (2)
(99.8) Not applicable
(99.9) None
(99.10) Custodian Agreement (3)
(99.11) None
(99.12) Not Applicable
(99.13) None
(99.14) Consent of Independent Auditors (4)
(99.15) None
(99.16) None
(99.17) None
(99.18) Not applicable
(99.19) Registrant's Annual Report to Shareholders (4)
- --------------------------
(1) This material filed as an exhibit to Registrant's Registration
Statement pursuant to the corresponding exhibit number therein is
hereby incorporated by reference.
(2) Registrant's Investment Advisory Agreement, dated as of April 1,
1991, with Voyageur Fund Managers, its present investment advisor,
was attached as Exhibit A to the Registrant's Proxy Statement,
dated April 8, 1991, filed in preliminary
10
<PAGE>
form with the Commission on or about March 20, 1991, which
Agreement is hereby incorporated by reference.
(3) Registrant's Custodian Agreement, dated August 14, 1992, with
Trust Company of Texas was filed as Exhibit (9) to the
Registrant's Amendment No. 15 to Registration Statement under the
Investment Company Act of 1940 on Form N-2, dated April 20, 1993,
which Agreement is hereby incorporated by reference.
(4) Filed herewith.
ITEM 25. MARKET ARRANGEMENTS
Not applicable.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Not applicable.
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
Not applicable.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
On March 15, 1996, the outstanding shares of the Registrant's Common
Stock were held of record by 156 persons.
ITEM 29. INDEMNIFICATION
The answer to this Item is found on page 7 of the Registration
Statement, in response to Item 19, which material is hereby
incorporated by reference.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
For information as to the other business or employment of the
Registrant's investment advisor, reference is made to Form ADV, as
amended, of Voyageur Fund Managers, Inc. as filed with the Commission,
which is hereby incorporated by reference.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
The accounts, books and other documents required to be maintained by
Registrant pursuant to Section 31(a) of the 1940 Act and Rules 31a-1
and 31a-3 thereunder are in the possession of Mr. Jerry D. Wheatley,
Secretary and Treasurer of the Registrant, 214 North Ridgeway Drive,
Cleburne, Texas.
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
Not applicable.
11
<PAGE>
S I G N A T U R E S
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment No. Eighteen to its Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cleburne, and State of Texas, on the 25th day of
April 1996.
SAMARNAN INVESTMENT CORPORATION
BY: /S/ GEORGE S. WALLS, JR.
-------------------------
GEORGE S. WALLS, JR.
PRESIDENT
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<INVESTMENTS-AT-COST> 17,425,514
<INVESTMENTS-AT-VALUE> 18,005,382
<RECEIVABLES> 271,433
<ASSETS-OTHER> 68,575
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 18,345,390
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,000
<TOTAL-LIABILITIES> 14,000
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 1,201,768
<SHARES-COMMON-PRIOR> 1,201,768
<ACCUMULATED-NII-CURRENT> 727,712
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 15,784
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 579,817
<NET-ASSETS> 18,331,390
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,041,273
<OTHER-INCOME> 0
<EXPENSES-NET> 89,188
<NET-INVESTMENT-INCOME> 952,085
<REALIZED-GAINS-CURRENT> 15,784
<APPREC-INCREASE-CURRENT> 619,137
<NET-CHANGE-FROM-OPS> 0
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 895,078
<DISTRIBUTIONS-OF-GAINS> 6,248
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 685,680
<ACCUMULATED-NII-PRIOR> 258,141
<ACCUMULATED-GAINS-PRIOR> 6,248
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 48,000
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 89,188
<AVERAGE-NET-ASSETS> 18,140,307
<PER-SHARE-NAV-BEGIN> 14.69
<PER-SHARE-NII> .86
<PER-SHARE-GAIN-APPREC> .52
<PER-SHARE-DIVIDEND> .74
<PER-SHARE-DISTRIBUTIONS> .01
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.25
<EXPENSE-RATIO> .49
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
SAMARNAN INVESTMENT CORPORATION:
WE CONSENT TO THE USE OF OUR REPORT INCLUDED HEREIN.
CHESHER & FULLER, INC.
A PROFESSIONAL CORPORATION
DALLAS, TEXAS
MARCH 14, 1996
<PAGE>
EXHIBIT 99.19
Annual Report to Stockholders
December 31, 1995
S A M A R N A N
I N V E S T M E N T C O R P O R A T I O N
P.O. BOX 651 CLEBURNE, TEXAS 76033
Registered under the Investment Company Act of 1940 as a diversified, closed end
management company. Copies of the Company's Annual Report Form N-1R are
available to registered stockholders upon written request to the Secretary at
the above address.
<PAGE>
S A M A R N A N
INVESTMENT CORPORATION
P.O. BOX 651 CLEBURNE, TEXAS 76033
BOARD OF DIRECTORS LEGAL COUNSEL
George S. Walls, Jr. Richard S. Whitesell, Jr.
Nancy Walls Devaney 2415 S. Westmoreland Road
Martha Walls Murdoch Dallas, TX 75211
O.P. Leonard, Jr.
Joe Monteleone
Steve Sikes
Roland Walden INDEPENDENT AUDITORS
Cheshier & Fuller Inc., P.C.
OFFICERS 14175 Proton Road
Dallas, TX 75244
George S. Walls, Jr., President
Jerry D. Wheatley, Secretary/Treasurer
CUSTODIAN
INVESTMENT ADVISORS Trust Company of Texas
Voyageur Asset Management 7001 Preston Road Suite 300
90 South Seventh St. Dallas, TX 75205
Suite 4400
Minneapolis, MN 55402
REGISTRAR/TRANSFER AGENT
Securities Transfer Corporation
16910 Dallas Pky. Suite 100
Dallas, TX 75248
ANNUAL MEETING
The Annual Meeting of Stockholders of Samarnan
Investment Corporation will be held April 15,
1996, at 10:30 A.M., in the Bellevue Room I of
the Fort Worth Club, 306 W. Seventh, Fort Worth,
Texas.
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Portfolio of Investment Securities
December 31, 1995
<TABLE>
<CAPTION>
Cost (net of
Amortization
Coupon Maturity Principal of Bond Market
Municipal Bonds(100.0%) Rate Date Amount Premium) Value
- ---------------------- ------ --------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
Colorado Springs Utility 5.90 11-15-96 500,000 500,000 508,040
Kaukauna, Wisconsin Electric 8.25 12-15-96 500,000 500,000 509,050
Elgin, Illinois, G.O. 6.10 1-01-97 500,000 498,835 508,520
Snohomish County, Washington 6.10 1-01-97 500,000 500,000 509,275
Carmel Clay School G.O. 6.10 1-15-98 500,000 500,000 518,040
Ohio Higher Ed. SRS B 7.00 8-01-98 500,000 512,367 527,570
Ohio State University Series A 7.45 12-01-98 500,000 527,918 524,705
Tempe, Arizona G.O. 8.00 7-01-99 500,000 523,672 560,765
Illinois Health - Univ of
Chicago Hospital 4.75 8-15-99 825,000 823,020 836,773
Cook County, Illinois
Schaumberg G.O. 6.20 1-01-00 500,000 500,000 524,685
Robbinsdale MN Hospital 4.75 5-15-00 500,000 496,050 506,655
Naperville, Illinois Electric 6.20 11-01-00 500,000 500,000 530,065
Hawaii State G.O. 5.90 3-01-01 500,000 513,914 508,980
Wisconsin Public Power 6.40 7-01-01 500,000 496,350 547,295
Palatine, Illinois CCSD #15 5.90 12-01-01 450,000 443,999 481,864
King County, Washington ISD #408 6.10 12-01-01 300,000 300,000 323,517
Indiana Municipal Power 5.25 1-01-02 500,000 498,215 517,645
Nevada State G.O. Series A 6.00 5-01-02 400,000 397,182 431,652
Maricopa County, Arizona SD #4 6.125 7-01-02 500,000 496,399 522,580
Lake Preston SD-Ottertail Pwr 5.00 12-01-02 555,000 555,000 566,100
Kitsap County Washington SD #401 4.70 12-01-03 500,000 489,765 501,945
Bedford Park, IL - G.O. 5.20 12-01-04 500,000 499,500 513,970
Alaska State Housing Finance Corp. 5.90 12-01-04 600,000 630,198 629,172
North Branch Minn. ISD #138 5.20 2-01-05 500,000 502,346 516,375
Henderson, NY - G.O. 5.25 5-01-05 500,000 501,712 517,250
Box Elder, UT - G.O. 5.15 6-15-05 300,000 299,250 305,973
Indiana St. Ed. 4.80 10-01-05 500,000 415,475 498,850
Chicago, IL Wastewater Rev. 5.40 1-01-06 500,000 495,000 518,725
Bristol County, RI Water 5.00 12-01-06 550,000 550,545 547,690
Clark County Nevada School District 5.50 6-15-07 800,000 790,536 834,138
Memphis, TN - G.O. 6.80 7-01-07 700,000 736,805 756,812
Broward City FL - Airport 10.00 10-01-13 500,000 553,361 521,680
Minneapolis, MN, Hospital 9.125 12-01-14 700,000 776,099 777,903
St. Paul, MN, United Way 4.40 12-01-18 100,000 100,000 100,125
------------ ------------
Total $ 17,425,514 $ 18,005,382
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Statement of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Assets:
Cash $ 68,575
Investments in securities at market
(cost, net of amortization of bond
premium, $17,425,514) 18,005,382
Accrued interest receivable 271,433
--------------
Total assets 18,345,390
Liabilities:
Payables:
Accounts payable 14,000
--------------
Total liabilities 14,000
--------------
Net assets applicable to outstanding
capital shares, equivalent to
$15.25 per share $ 18,331,390
--------------
--------------
Source of net assets:
Capital shares - authorized 2,000,000 shares
of $1.00 par value; outstanding 1,201,768
shares $ 1,201,768
Accumulated net realized gains of $1,154,071
less accumulated distribution of $1,138,287 15,784
Unrealized appreciation of investments 579,817
Undistributed net investment income 727,712
Retained earnings at April 29, 1978,
commencement of operations as an
investment company 15,806,309
--------------
$ 18,331,390
--------------
--------------
SAMARNAN INVESTMENT CORPORATION
Statement of Operations
Year Ended December 31, 1995
Investment income - interest $ 1,041,273
--------------
Expenses:
Investment advisory fee 48,000
Legal and professional fees 17,878
Audit fees 7,000
Directors fees 7,200
Custodian expenses 6,000
Administrative fees 1,755
Office and printing supplies 1,355
--------------
Total expenses 89,188
--------------
Net investment income 952,085
--------------
Realized and unrealized gain on investments:
Realized gain from security transactions -
excluding short-term securities:
Proceeds from sales 5,018,784
Cost of securities sold, net of
amortization of bond premiums 5,003,000
--------------
Net realized gain 15,784
--------------
Unrealized appreciation of investments:
Beginning of period (39,320)
End of period 579,817
--------------
Increase in unrealized appreciation
on investments 619,137
--------------
Net realized and unrealized gain
on investments 634,921
--------------
Increase in net assets from
investment activities $ 1,587,006
--------------
--------------
Total expenses as a percentage of total
investment income 8.6 %
-----
-----
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Statement of Changes in Net Assets
Years Ended December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
----------- ------------
<S> <C> <C>
Investment activities:
Net investment income $ 952,085 $ 1,032,773
Net realized gain (loss) from
security transactions 15,784 6,248
Increase (decrease) in unrealized
appreciation of investments 619,137 (1,175,526)
----------- ------------
Increase in net assets
from investment activities 1,587,006 (136,505)
----------- ------------
Dividends and distributions to shareholders:
Net investment income (895,078) (961,416)
Capital gains (6,248) -0-
----------- ------------
Decrease in net assets from
dividends and distributions
to shareholders (901,326) (961,416)
----------- ------------
Increase (decrease) in net assets 685,680 (1,097,921)
Net assets:
Beginning of period 17,645,710 18,743,631
----------- ------------
End of period $18,301,390 $ 17,645,710
----------- ------------
----------- ------------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Notes to Financial Statements
December 31, 1995
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company is registered under the Investment Company Act of 1940 as a
diversified, closed-end, management investment company. The significant
accounting policies followed by the Company are summarized as follows:
(a) SECURITIES
Investments in securities are carried at market value. Security
transactions are accounted for on the trade date. The cost of
securities sold is based on identifying specific issues delivered
against each sale identifying specific issues delivered against each
sale.
(b) DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-
dividend date.
(c) BOND PREMIUMS AND DISCOUNTS
Bond premiums are amortized to the maturity date of the bond on a
straight-line basis. Bond discounts are not amortized; these are
included as realized gains when the bond is sold or matures. The
amortization for any one year is not material.
(d) ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
(2) INVESTMENT ADVISORY CONTRACT
Effective April 1, 1991, the Company contracted with Voyageur Fund Managers
to provide investment advisory services. Under this contract, the company
is furnished investment, clerical and statistical services regarding its
investments. In addition, all orders for purchasing and selling the
Company's portfolio securities are placed by Voyageur Fund Managers. The
cost of these investment advisory services is $48,000 per annum.
(3) FEDERAL INCOME TAXES
No provision has been made for Federal income taxes since it is the plan of
the Company to distribute substantially all of its investment income,
including the net realized gains on investments, and to qualify as a
"regulated investment company" under the applicable sections of the
Internal Revenue Code.
(4) SECURITIES TRANSACTIONS
In 1995, cost of purchases and proceeds from sales or maturities of
securities, other than short-term securities, amounted to $5,183,928 and
$5,018,784, respectively.
There were no differences between the cost bases of securities for Federal
income tax and financial statement purposes. The aggregate unrealized
appreciation and depreciation for all securities as of December 31, 1995
were $620,721 and $40,904, respectively.
(5) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Cash dividends paid during the years ended December 31, 1995 and 1994
amount to $.75 and $.80 per share, respectively.
Cash dividends of $.21 per share from the balance of undistributed net
investment income were declared by the Company's Board of Directors on
January 25, 1996, payable to shareholders of record February 5, 1996.
<PAGE>
[CHESHIER & FULLER LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Samarnan Investment Corporation:
We have audited the accompanying statement of asssets and liabilities of
Samarnan Investment Corporation, including the portfolio of investment
securities, as of December 31, 1995, and the related statements of operations
for the year then ended and changes in net assets for each of the two years
in the period then ended, and the selected per share data and ratios for each
of the four years in the period then ended. These financial statements and
per share data and ratios are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements
and per share data and ratios based on our audit. The selected per share
data and ratios for the year ended December 31, 1991 were audited by other
auditors whose report dated February 10, 1992, expressed an unqualified
opinion on that statement.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and per share data and ratios
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statments. Our
procedures included confirmation of securities owned as of December 31, 1995, by
correspondence with the custodian. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well
as evaluating the overall finanaical statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and ratios
referred to above present fairly, in all material respects, the finanaical
position of Samarnan Investment Corporation as of December 31, 1995, the results
of its operations for the year ended, the changes in net assets for each of the
two years in the period then ended, and the selected per share data and ratios
for each of the four years in the period then ended, in conformity with
generally accepted accounting principles.
/s/ Cheshier & Fuller, Inc.
---------------------------
CHESHIER & FULLER, INC.
A Professional Coroporation
Dallas, Texas
February 1, 1996
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Selected per Share Data and Ratios
For each of the years in the five-year period ended
December 31, 1995
<TABLE>
<CAPTION>
PER SHARE DATA 1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Investment income-interest .86 .93 1.00 1.01 1.13
Expenses (.07) (.07) (.07) (.08) (.07)
------ ------ ------ ------ ------
Net investment income .79 .86 .93 .93 1.06
Net realized and unrealized gains
{losses} on investments .52 (.97) .14 (.11) .36
Dividends from net investment income (.74) (.80) (.93) (.90) (1.08)
Distributions from net realized
long-term gains on securities (.01) -- (.15) (.01) --
------ ------ ------ ------ ------
Net increase(decrease) in
net asset value .56 (.91) (.01) (.09) .34
Net asset value:
Beginning of period 14.69 15.60 15.61 15.70 15.36
------ ------ ------ ------ ------
------ ------ ------ ------ ------
End of period 15.25 14.69 15.60 15.61 15.70
------ ------ ------ ------ ------
------ ------ ------ ------ ------
RATIOS
Expenses to average net assets .49 .50 .48 .50 .47
Investment income from operations
to average net assets 5.74 6.27 6.39 6.50 7.30
Portfolio turnover 28.20 13.05 23.75 1.49 60.00
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Average shares outstanding $1,201,763 $1,201,768 1,201,768 1,201,768 1,201,768
---------- ---------- --------- --------- ---------
---------- ---------- --------- --------- ---------
</TABLE>
See accompanying notes to financial statements.
