<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. 19
----
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
<TABLE>
<CAPTION>
ITEM OF FORM N-2 PAGE IN FORM N-2*
- ---------------- -----------------
PART A
<S> <C>
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 - 8
Item 10. Capital Stock, Long-Term Debt, and Other Securities 8 & 9
Item 11. Defaults and Arrears on Senior Securities 9
Item 12. Legal Proceedings 9
Item 13. Table of Contents of the Statement of Additional 9
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 10
Item 18. Management 10
Item 19. Control Persons and Principal Holders of Securities 10
Item 20. Investment Advisory and Other Services 10
Item 21. Brokerage Allocation and Other Practices 10
Item 22. Tax Status 10
Item 23. Financial Statements 10
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
PART C
<S> <C>
Item 24. Financial Statements and Exhibits 11 & 12
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 12
Item 28. Number of Holders of Securities 12
Item 29. Indemnification 12
Item 30. Business and Other Connections of Investment Adviser 12
Item 31. Location of Accounts and Records 12
Item 32. Management Services 12
Item 33. Undertakings 12
Signatures 13
</TABLE>
* 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 1996, 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
<PAGE>
(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, Inc. ("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% byMichael 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 themost 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 inmaking 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 andenable 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
<PAGE>
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, 1996, the Registrant had net assets of
$18,168,225 and the annual fee payable under the Agreement
represented approximately .0026% 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, 1996.
On January 15, 1997 Fund Mangers' parent Dougherty Financial
Group, Inc. ("DFG"), executed an Agreement and Plan of
Merger ("Agreement") with Lincoln National Corporation
("LNC") pursuant to which LNC would acquire DFG, including
the mutual fund investment advisory business of DFG
conducted by Fund Managers. However, Fund Managers'
institutional managed account business, which does business
under the name Voyageur Asset Management, is not part of the
merger.
In contemplation of the merger with Lincoln, Fund Managers
has transferred its institutional managed account investment
advisory business to another entity, Voyageur Asset
Management LLC, an entity that was formed for the purpose of
continuing this business under the same management and
control as was the case prior to the transfer. This
transfer included the Registrant's investment advisory
agreement. As a result, the party responsible for the
Registrant's investment advisory agreement will be Voyageur
Asset Management LLC and not Voyageur Fund Managers, Inc. or
Lincoln National Corporation or any Lincoln affiliate.
Other than the technical change regarding the identity of
the entity providing the services, no changes to the
Registrant's investmentadvisory agreement will occur.
Voyageur Asset Management LLC intends to provide the
Registrant with the same portfolio management,
administration and other services as the Registrant has
received in the past with Voyageur Fund Managers, Inc. In
addition, it is anticipated that the ultimate of Voyageur
Asset Management LLC will be virtually the same as current
ownership of Voyageur Fund Managers, Inc. and that the
institutional advisory accounts will continue to be managed
by the same individuals who currently manage those accounts.
(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.
6
<PAGE>
(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, 1996, were
transacted with primary market makers acting as principal on
a net basis. Accordingly, the Registrantdid 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 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 1996.
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 4, 1997, 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 24, 1997.
7
<PAGE>
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 asof April 24, 1997.
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 24, 1997.
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:
------
For fiscal year 1996, 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.
8
<PAGE>
5. OUTSTANDING SECURITIES:
-----------------------
As of April 24, 1997, 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.
9
<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.
10
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) FINANCIAL STATEMENTS:
---------------------
(i) Statement of Assets and Liabilities as of December
31, 1996.
(ii) Portfolio of Investment Securities as of December
31, 1996.
(iii) Statement of Operations for the Year ended
December 31, 1996.
(iv) Statement of Changes in Net Assets for the Years
ended December 31, 1996 and 1995.
(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,
1996.
All of the foregoing are in Registrant's Annual Report to
Shareholders for 1996, which material is incorporated by
reference in Part B hereof.
(b) EXHIBITS:
---------
(1) Amended Articles of Incorporation (1)
(2) By-Laws (1)
(3) None
(4) Specimen Stock Certificate (1)
(5) None
(6) None
(7) Investment Advisory Contract (2)
(8) Not applicable
(9) None
(10) Custodian Agreement (3)
(11) None
(12) Not Applicable
(13) None
(14) Consent of Independent Auditors (4)
(15) None
(16) None
(17) None
(18) Not applicable
(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
11
<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 14, 1997, the outstanding shares of the Registrant's Common
Stock were held of record by 155 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 herebyincorporated
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.
12
<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. Nineteen 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 24th day of
April 1997.
SAMARNAN INVESTMENT CORPORATION
BY: /s/ George S. Walls, Jr.
---------------------------
GEORGE S. WALLS, JR.
PRESIDENT
13
<PAGE>
EXHIBIT 14
CONSENT OF INDEPENDENT AUDITORS
THE BOARD OF DIRECTORS
SAMARNAN INVESTMENT CORPORATION:
WE CONSENT TO THE USE OF OUR REPORT INCLUDED HEREIN.
CHESHIER & FULLER, L.L.P.
DALLAS, TEXAS
MARCH 3, 1997
<PAGE>
Annual Report to Stockholders
December 31, 1996
S A M A R N A N
INVESTMENT CORPORATION
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 are available to
registered stockholders upon written request to the Secretary at the above
address.
<PAGE>
[LETTERHEAD]
INDEPENDENT AUDITORS' REPORT
----------------------------
The Board of Directors and Shareholders
Samarnan Investment Corporation:
We have audited the accompanying statement of assets and liabilities of Samarnan
Investment Corporation, including the portfolio of investment securities, as of
December 31, 1996, 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 five 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.
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
statements. Our procedures included confirmation of securities owned as of
December 31, 1996, 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 financial 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 financial
position of Samarnan Investment Corporation as of December 31, 1996, 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 five years in the period then ended, in conformity with
generally accepted accounting principles.
/s/ CHESHIER & FULLER, L.L.P.
--------------------------------
CHESHIER & FULLER, L.L.P.
Dallas, Texas
March 3, 1997
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Statement of Assets and Liabilities
December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Assets:
Cash $ 678,942
Investments in securities as market (cost, net of amortization
of bond premium. $16,772,664) 17,234,224
Accrued interest receivable 269,379
-------------
Total assets 18,182,545
Liabilities
Payables:
Accounts payable 14,320
-------------
Total liabilities 14,320
-------------
Net assets apllicable to outstanding capital shares, equivalent
to 515.11 per share $18,168,225
-------------
-------------
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 $1,079,429 less accumulated
distribution of $1,154,071 (74,642)
Unrealized appreciation investments 461,561
Undistibuted net investment income 773,229
Retained earnings at April 29, 1978, commencement of operations
as an investment company 15,806,309
-------------
$18,168,225
-------------
-------------
</TABLE>
SAMARNAN INVESTMENT CORPORATION
Statement of Operations
Year Ended December 31, 1996
<TABLE>
<CAPTION>
<S> <C>
Investment income - interest $ 986,594
-------------
Expenses
Investment advisory fee 48,000
Legal and professional fees 20,283
Audit fees 6,800
Directors fess 7,800
Custodian expense 6,000
Administrative fees 1,392
Office and printing supplies 1,313
-------------
Total expenses 91,588
-------------
Net investment income 895,006
-------------
Realized and unrealized gain on investments:
Realized gain from security transactions - excluding short-term securities:
Proceeds from sales 3,880,395
Cost if securities sold, net of amortization of board premiums 3,955,037
-------------
Net realized (loss) (74,642)
-------------
Unrealized appreciation of investments:
Beginning of period 579,817
End of period 461,561
-------------
Decrease in unrealized appreciation on investments (118,256)
-------------
Net realized and unrealized loss on investments (192,898)
-------------
Increase in net assets from invesment activities $ 702,108
-------------
-------------
Total expenses as a percentage of total investment income 9.3%
---
---
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Statement of Changes in Net Assets
Year Ended December 31, 1996 and 1995
<TABLE>
<CAPTION>
1996 1995
----------- ----------
<S> <C>
Investment activities
Net investment income $ 895,006 $ 952,085
Net realized gain (loss) from security transactions (74,642) 15,784
Increase (decrease) in unrealized appreciation
of investments (118,256) 619,137
----------- -----------
Increase in net assets from investment activities 702,108 1,587,006
----------- -----------
Dividends and distibutions to shareholders:
Net investment income (849,489) (895,078)
Capital gains (15,784) (6,248)
----------- -----------
Decrease in net assets from dividends and distributions
to shareholders (865,273) (901,326)
----------- -----------
Increase (decrease) in net assets (163,165) 685,680
Net assets:
Beginning of period 18,331,390 17,645,710
----------- -----------
End of period $18,168,225 $18,331,390
----------- -----------
----------- -----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Notes to Financial Statements
December 31, 1996
(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.
(b) DIVIDENDS AND DISTRIBUTIONS
Dividends and distributions to shareholders are recorded on the ex-
dividend date.
(c) BOND PREMIUM 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 fo make estimates
and assumptions that affect the reported amounts of assests 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 fu0rnished 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 distibute 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 1996, cost of purchases and proceeds from sales or maturities of
securities, other than short-term securities, amounted to $3,336,934 and
$3,880,396, 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, 1996
were $495,512 and $33,951, respectively.
(5) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Cash dividends paid during the years ended December 31, 1996 and 1995
amount to $.72 and $.75 per share, respectively.
Cash dividends of $.22 per share from the balance of undistributed net
investment income were declared by the Company's Board of Directors on
January 28, 1997, payable to shareholders of record, February 2, 1997.
<PAGE>
SAMARNAN INVESTMENT CORPORATION
Portfolio of Investment Securities
December 31, 1996
<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>
Elgin, Illinois, G.O. 6.10 1-01-97 500,000 $ 498,835 $ 500,000
Soobormish County, Washington 6.10 1-01-97 500,000 500,000 500,000
Carmel Clay School G.O. 6.10 1-15-98 500,000 500,000 510,185
Ohio Higer Ed. SRS B 7.00 6-01-98 500,000 507,250 515,400
Tempe, Arizona G.O. 8.00 7-01-99 500,000 516,654 543,545
IL Health - Univ of Chicago Hospital 4.75 8-15-99 825,000 823,020 834,240
Cook County, Illinois Schaumber G.O. 6.20 1-01-00 500,000 500,000 518,185
Robbinsdale MN Hospital 4.75 5-15-00 500,000 496,050 504,605
Naperville, Illinois Electric 6.20 11-01-00 500,000 500,000 521,830
Wisconsin Public Power 6.40 7-01-01 500,000 496,350 537,570
Palatine, Illinois CCSD #15 5.90 12-01-01 450,000 445,999 476,609
King County, Washington ISD #408 6.10 12-01-01 300,000 300,000 319,671
Indiana Municipal Power 5.25 1-01-02 500,000 498,215 513,660
Nevada State G.O. Series A 6.00 5-01-02 400,000 397,182 426,588
Maricopa County, Arizona SD #4 6.125 7-01-01 500,000 496,399 515,645
Lake Preston SD-Ottertail Pwr 5.00 12-01-02 555,000 555,000 560,733
Kitsap County Washington SD #401 4.70 12-01-03 500,000 489,765 501,150
Bedford Park, IL - G.O. 5.20 12-01-04 500,000 499,500 509,785
Alaska State Housing Finance Corp. 5.90 12-01-04 600,000 626,811 620,304
North Branch Minn, ISD #138 5.20 2-01-05 475,000 476,984 487,027
Henderson, NV - G.O. 5.25 5-01-05 500,000 501,535 514,835
Box Elder, UT - G.O. 5.15 6-15-05 300,000 299,250 304,488
Indiana St. Ed. 4.80 10-01-05 500,000 415,475 498,445
Chicago, IL Wastewater Rev. 5.40 1-01-06 500,000 495,000 514,440
North Miami, FL Health Fac Rev Cathol 5.50 8-15-06 200,000 198,468 199,098
Clark County Nevada School District 5.50 6-15-07 800.000 790,536 829,967
Memphis, TN - G.O. 6.80 7-01-07 700,000 733,629 740,054
North Miami, FL Health Fac Rev Cathol 5.50 8-15-07 375,000 371,933 373,181
Alabama Cig & Univ Tuskegee 5.50 9-01-07 500,000 500,000 512,445
Wisconsin Health & Education - Sinai 5.50 8-15-08 600,000 592,248 599,964
Illinois Health Fac Auth 6.00 2-15-11 500,000 497,580 499,020
Montgomery County PA IDA 5.625 11-15-12 500,000 480,920 486,925
Minneapolis, MN, Hospital 9.125 12-01-14 700,000 772,076 744,632
------------- -----------
Total $ 16,772,664 $17,234,224
------------- -----------
------------- -----------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAMARNAN INVESTMENT COPRORATION
Selected per Share Data and Ratios
For Each of the Years in the Five-Year Period Ended
December 31, 1996
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Per Share Data
- --------------
<S> <C> <C> <C> <C> <C>
Investment income - interest $ .82 $ .86 $ .93 $1.00 $1.01
Expenses (.08) (.07) (.07) (.07) (.08)
----- ----- ----- ----- -----
Net investment income .74 .79 .86 .93 .93
Net realized and unrealized gains
(losses on investments (.16) .52 (.97) .14 (.11)
Dividends from net investment income (.71) (.74) (.80) (.93) (.90)
Destributions from net realized
long-term gains on securities (.01) (.01) - (.15) (.01)
----- ----- ----- ----- -----
Net increase (decrease) in
net asset value (.14) .56 (.91) (.01) (.09)
Net asset value:
Beginning of period 15.25 14.69 15.60 15.61 15.70
----- ----- ----- ----- -----
End of period $15.11 $15.25 $14.69 $15.60 $15.61
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Ratios
- ------
Expenses to average net assets .51 .49 .50 .48 .50
Investment income from operations
to average net assets 5.45 5.74 6.27 6.39 6.50
Portfolio turnover 19.05 28.20 13.05 23.25 1.49
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Average shares outstanding 1,201,768 1,201,768 1,201,768 1,201,768 1,201,768
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAMARNAN
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 4211 Arcady
Martha Walls Murdoch Dallas, TX 75205
O.P. Leonard, Jr.
Joe Monteleone
Steve Sikes INDEPENDENT AUDITORS
Roland Walden
Cheshier & Fuller, L.L.P.
14175 Proton Raod
OFFICERS Dallas, TX 75244
George S. Walls, Jr., President
Jerry D. Wheatley, Secretary/Treasurer CUSTODIAN
Trust Company of Texas
INVESTMENT ADVISORS 7001 Preston Road, Suite 300
Voyageur Asset Management Dallas, TX 75205
90 South Seventh St.
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 24, 1997, at 11:00 A.M., in the Bellevue Room I of the Fort Worth
Club, 306 W. Seventh, Fort Worth, Texas.
