SAMARNAN INVESTMENT CORP, POS AMI, 2000-04-28

SAMARNAN INVESTMENT CORP
POS AMI, 2000-04-28

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<PAGE> 1
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. 22

SAMARNAN INVESTMENT CORPORATION
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EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER

214 NORTH RIDGEWAY DRIVE, CLEBURNE, TEXAS 76031
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ADDRESS OF PRINCIPAL EXECUTIVE OFFICES (NUMBER, STREET, CITY, STATE, ZIP CODE)

(817) 641-7881
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REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE

GEORGE S. WALLS, JR., 214 NORTH RIDGEWAY DR., CLEBURNE, TEXAS 76031
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NAME AND ADDRESS (NUMBER, STREET, CITY, STATE, ZIP CODE) OF AGENT FOR SERVICE

<PAGE> 2

SAMARNAN INVESTMENT CORPORATION

FORM N-2

CROSS REFERENCE SHEET

<TABLE>
<CAPTION>
ITEM OF FORM N-2 PAGE IN FORM N-2*
- ---------------- -----------------
<S> <C>
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 2-4
Item 9. Management 4-14
Item 10. Capital Stock, Long-Term Debt, and Other Securities 14-15
Item 11. Defaults and Arrears on Senior Securities 15
Item 12. Legal Proceedings 15
Item 13. Table of Contents of the Statement of Additional Information 15

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 16
Item 18. Management 16
Item 19. Control Persons and Principal Holders of Securities 16
Item 20. Investment Advisory and Other Services 16
Item 21. Brokerage Allocation and Other Practices 16
Item 22. Tax Status 16
Item 23. Financial Statements 16
</TABLE>

(i)

<PAGE> 3

<TABLE>
<S> <C>
PART C
Item 24. Financial Statements and Exhibits 17-18
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 18
Item 29. Indemnification 18
Item 30. Business and Other Connections of Investment Adviser 19
Item 31. Location of Accounts and Records 19
Item 32. Management Services Not Applicable
Item 33. Undertakings Not Applicable
Signatures 20
</TABLE>

* Filed in Item-and-Answer Form

(ii)

<PAGE> 4

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-SB-I (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 1999, 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.

(b) Prior to fiscal 1999, the Registrant's portfolio
emphasis had been investing 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.

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<PAGE> 5

At the annual meeting of the Registrant's shareholders
held on April 28, 1998, the shareholders approved a
change in the Registrant's investment objective to
permit the Registrant to invest up to 49% of its
portfolio in taxable equity securities and taxable
debt securities, with the remaining 51% of the
portfolio to continue to be invested in the tax-exempt
debt securities described above in the preceding
paragraph. This change of investment objective is more
fully described under the caption "Change in
Investment Objective" on pages 3, 4, 5, 6, 7, 8 and 9
of the Registrant's Proxy Statement, dated April 9,
1998, filed with the Commission (the "1998 Proxy
Statement") to which reference is made and which
material is hereby incorporated by such reference.

To facilitate the change in investment objectives the
Board of Directors of the Registrant approved a plan
in January, 1999 pursuant to which a portion of the
Registrant's portfolio would consist of equity
securities and be designated the "Equity Portfolio"
and the remainder of the portfolio consisting of debt
securities would be designated the "Debt Portfolio".
This plan and related matters is more fully described
under the captions "Investment Advisory Agreement",
"Proposal 1 the Amendment to the Voyageur Agreement",
and "Proposal 2 The Westwood Agreement" on pages 3, 4,
5, 6, 7, 8 and 9 of the Registrant's Proxy Statement,
dated March 29, 1999, filed with the Commission (the
"1999 Proxy Statement") to which reference is made
and which material is hereby incorporated by such
reference.

In the second fiscal quarter of 1999, the Registrant
began investing in equity securities. As of December
31, 1999, the Registrant's investment portfolio valued
at market was $17,268,412, of which $2,650,999 (15.3%)
was invested in equity securities and the remaining
$14,617,413 (84.7%) was invested in tax-exempt debt
securities.

(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.

The policies of the Registrant with respect to
investments as a result of the change of investment
objective referred to in paragraph (b) above, are
set forth under the caption "Change in Investment
Objective" on pages 3, 4, 5 and 6 of the 1998 Proxy
Statement which material is hereby incorporated by
reference.

(d) Not applicable.

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<PAGE> 6

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.

The risk factors with respect to taxable equity securities
are set forth under the subcaption "Proposed Investment
Objective" on page 4 of the 1998 Proxy Statement and the
risk factors with respect to taxable debt securities are
set forth under the subcaption "Proposed Investment
Objective" on page 5 of the 1998 Proxy Statement which
material is hereby incorporated by reference.

4. Other Policies:

The answer to this Item is found on page 3 of the
Registration Statement in response to Item 4(g), which
material is hereby incorporated by reference, and under
the subcaption "Proposed Investment Objective" on pages
4, 5 and 6 of the 1998 Proxy Statement 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:

(A) During fiscal 1999, the Registrant had two
investment advisors, Voyageur Asset Management LLC
("Voyageur") and Westwood Management Corp.
("Westwood").

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<PAGE> 7

Voyageur's principal business address is 90 South
Seventh Street, Suite 4300, Minneapolis, Minnesota
55402.

Voyageur is a registered investment adviser under
the Investment Advisers Act of 1940, as amended.

Voyageur is a majority owned subsidiary of
Dougherty Financial Group, LLC ("DFG"). Twenty
four percent (24%) of Voyageur is owned in equal
parts by Frank C. Tonnemaker, James C. King and
Louis V. Nanne, senior executives of Voyageur, and
76% by DFG. DFG is owned by Michael E. Dougherty
37%, and 37% is owned in equal parts by James 0.
Pohlad, Robert C. Pohlad and William M. Pohlad.
The remaining 26% of DFG is owned by three of its
employees.

Under the Investment Advisory Agreement, dated as
of April 1, 1991 (the "Voyageur Agreement"),
between the Registrant and Voyageur, which was
approved by the Registrant's shareholders on April
25, 1991, Voyageur 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.

Voyageur has advised the Registrant that in
effecting portfolio transactions on behalf of the
Registrant, Voyageur will seek the most favorable
price consistent with the best execution. Voyageur
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
market and the desire of Voyageur 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
Voyageur. 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 Voyageur.
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 analysis and
reports concerning issues, industries, securities,
economic factors and trends, portfolio strategy
and the

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<PAGE> 8
performance of accounts. The research services may
allow Voyageur to supplement its own investment
research activities and enable Voyageur 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, Voyageur 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.

Voyageur 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 Voyageur, except as noted
below. However, Voyageur 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 Voyageur
with research services which Voyageur 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.
Voyageur may from time to time have agreements with
certain broker dealers who may provide or make
available "soft dollar" credits for the purchase of
research services. These agreements include services
provided by Stockval, a full service data base research
product obtained through Bridge Trading, FactSet, a
research service which provides data and analytics for
fundamental research obtained through Broadcourt and
CMS, also a portfolio analytics tool obtained through
Spear Leads and Kellogg. Specific soft and hard dollar
values for these services are available on request from
Voyageur.

Voyageur will not effect any brokerage transactions in
the Registrant's portfolio securities with any
broker-dealer affiliated directly or indirectly with
Voyageur.

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

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<PAGE> 9

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 Voyageur 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 Voyageur 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 may produce better
executions for each client.

Under the Voyageur Agreement, the Registrant paid
Voyageur an advisory fee of $12,000 per quarter
($48,000 per annum), payable quarterly within five days
after the end of each calendar quarter. The Registrant
has paid Voyageur under the Voyageur Agreement an
advisory fee of $48,000 in each of the three years
ended December 31, 1998. At December 31, 1998, the
Registrant had net assets of $18,683,529 and the annual
fee payable under the Voyageur Agreement represented
approximately .26% of the Registrant's net assets at
that date.

At the annual meeting of the Registrant's shareholders
held on April 16, 1999, the shareholders approved an
amendment, dated as of April 1, 1999 (the "Amendment"),
to the Voyageur Agreement.

The Amendment, which became effective on April 16,
1999, limits Voyageur's investment advisory services
and responsibilities under the Voyageur Agreement to
those of debt securities and the management of the Debt
Portfolio. As a result of the Amendment, Voyageur will
not render any investment advice to the Registrant with
respect to equity securities nor will it be responsible
for the management of the Equity Portfolio.

The Amendment changes the fee paid to Voyageur under
the Voyageur Agreement from the fixed amount described
above to a fee based upon the value of the assets in
the Debt Portfolio as of the last day of each fiscal
quarter of the Registrant on which the New York Stock
Exchange (the "NYSE") is open for trading (the
"Appraisal Date"). The fee is 0.27% of the appraised
value of the assets in the Debt Portfolio, which is
payable on a quarterly basis in arrears with a minimum
fee of $3,000 per annum. If Voyageur serves for less
than the whole of any fiscal quarter, the fee is to be
pro-rated for the portion of such quarter that Voyageur
served as investment adviser.

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<PAGE> 10

The Amendment provides that the quarterly fee is to be
paid within ten days after the Registrant's receipt of
Voyageur's appraisal of the Debt Portfolio and its
statement of the fee due thereunder.

The Amendment further provides that in making any
appraisal, securities listed on any national securities
exchange will be valued at the last quoted sales price,
regular way, on the Appraisal Date on the principal
exchange on which the security is listed; securities
listed in the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or traded
in the over-the-counter market will be valued at the
closing price or the highest reported bid price on the
Appraisal Date, whichever is available; and securities
not listed on any exchange or in NASDAQ or not traded
in the over-the-counter market, as well as trades that
have not been settled on the Appraisal Date, shall be
valued as of the Appraisal Date at fair value as
determined in good faith by Voyageur in accordance with
policies approved by the Board of Directors.

Under the Voyageur Agreement, the Registrant paid
Voyageur an advisory fee of $12,000 for the first
fiscal quarter of 1999 and under the Amendment advisory
fees for the second, third and fourth quarters of
fiscal 1999 of $31,743 for total advisory fees of
$43,743 for all of fiscal 1999. At December 31, 1999,
the Registrant had net assets of $17,808,462 and the
total advisory fees paid to Voyageur during 1999
represented approximately .25% of the Registrant's net
assets at that date.

Except as amended and modified by the Amendment, the
Voyageur Agreement remained in full force and effect.

(B) At the annual meeting of the Registrant's shareholders
on April 16, 1999, the shareholders approved an
Investment Advisory Agreement, dated as of April 1,
1999 (the "Westwood Agreement"), between the Registrant
and Westwood providing for Westwood to be the
Registrant's investment advisor with respect to equity
securities and to manage its Equity Portfolio.

Westwood's principal business address is 300 Crescent
Court, Suite 1300, Dallas, Texas 75201.

Westwood is a registered investment adviser under the
Investment Advisers Act of 1940, as amended.

Westwood is a New York corporation which is a wholly
owned subsidiary of Southwest Securities Group, Inc., a
Delaware

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<PAGE> 11

corporation ("Southwest Securities"). Southwest
Securities is a publicly owned holding company with
subsidiaries engaged in providing securities clearing,
securities brokerage, investment banking and investment
advisory services. To the knowledge of Southwest
Securities no person owns 10% or more of its voting
securities. The address of Southwest Securities is 1201
Elm Street, Suite 3500. Dallas, Texas 75270.

The Westwood Agreement provides that Westwood will
render investment advice to the Registrant with respect
to equity securities and will manage the Equity
Portfolio. Westwood will not render any investment
advice with respect to debt securities nor will it be
responsible for the management of the Debt Portfolio.

The Westwood Agreement provides for an advisory fee
based upon the appraised value of the assets in the
Equity Portfolio on the Appraisal Date (which is the
same date provided for in the Amendment to the Voyageur
Agreement discussed above). The fee is 0.75% of the
appraised value of the assets in the Equity Portfolio
which is payable quarterly in arrears. If Westwood
serves for less than the whole of any quarter, the fee
is to be pro rated for the portion of such quarter that
Westwood served as investment adviser.

The quarterly fee is to be paid to Westwood within ten
days after the Registrant's receipt of Westwood's
appraisal of the Equity Portfolio and its statement of
the fee due thereunder.

The criteria for Westwood's appraisal of the assets of
the Equity Portfolio is the same as that for Voyageur's
appraisal of the Debt Portfolio described above.

Under the Westwood Agreement (which became effective
April 16, 1999), Registrant paid advisory fees for the
last three fiscal quarters of 1999 of $11,107 which
represented approximately .06% of the Registrant's net
assets of $17,808,462 at December 31, 1999.

Under the Westwood Agreement, Westwood has agreed to
furnish the Registrant investment advice and
statistical services regarding equity securities,
including placing orders for the purchase and sale of
equity securities for the Registrant's account. The
Registrant will continue to pay all of its expenses,
including legal and accounting fees, fees and expenses
of the Registrant's transfer agent, dividend disbursing
agent and custodian, director fees, and the expenses of
directors and shareholders meetings.

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<PAGE> 12

The Registrant will also pay any brokers' commissions,
transfer taxes or other charges directly relating to
the purchase or sale of equity securities by Westwood
for the Registrant's account.

Westwood will pay all of its own administrative costs
and expenses necessary and incident to its providing
the investment advisory services to the Registrant
under the Westwood Agreement.

The Westwood Agreement became effective on April 16,
1999 and will continue in effect for one year
therefrom, and thereafter for successive one year
periods, provided that each yearly continuation of the
Westwood Agreement is specifically approved, at least
annually by (i) the Board of Directors of the
Registrant or by the vote of a majority of the
outstanding voting securities of the Registrant, and
(ii) by the vote of a majority of the directors who are
not parties to the Westwood Agreement or "interested
persons" (as defined in the Investment Company Act of
1940) of Westwood or of the Registrant cast in person
at a meeting duly called for the purpose of voting on
such approval.

The Westwood Agreement provides that Westwood will not
be liable to the Registrant or third parties for acts
or omissions not caused by Westwood's willful
misfeasance, bad faith or gross negligence or by the
acts or omissions of any bank, trust company, broker,
or other person with whom or into whose possession any
monies or securities and investments may be deposited
under the Westwood Agreement, nor will it be liable for
any action taken or omitted to be taken by Westwood on
the advice of its counsel, provided such counsel is
reasonably acceptable to the Registrant.

The Westwood Agreement further provides that Westwood
will indemnify the Registrant against actions,
litigation or other proceedings of any kind or nature
and against any loss, liability, judgment, cost or
penalty imposed as a result of such actions, litigation
or proceedings arising out of any willful misfeasance,
bad faith or gross negligence on the part of Westwood
in the performance of its duties under the Westwood
Agreement.

Under the Westwood Agreement, Westwood is free to
render services to other clients similar to those it
renders to the Registrant and it may give advice and
take action with respect to those other clients that
may differ from the advice given or the timing it may
recommend to the Registrant. Furthermore, Westwood will
not have any obligation to purchase or sell for the
Registrant's account any security that it or its
principals, affiliates or employees may purchase for
themselves or other clients.

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<PAGE> 13

The Westwood Agreement may be terminated at any time
without penalty by the Board of Directors of the
Registrant or by the vote of a majority of its
outstanding voting securities, or by Westwood, on not
more than 60 days' written notice to the other party.
The Westwood Agreement will automatically terminate in
the event of its "assignment" as that term is defined
in the Investment Company Act of 1940.

Under the Westwood Agreement, Westwood will make
decisions with respect to placing orders for the
purchase and sale of the Registrant's portfolio of
equity securities. The primary consideration in making
these decisions will be obtaining the most favorable
prices for the Registrant and efficiency in executing
orders. Westwood has advised the Registrant that in
effecting transactions on the Registrant's behalf,
Westwood will seek the most favorable price consistent
with best execution.

Westwood receives from brokers in-house research,
certain third party research (generally of economic
data), and certain information providing historic and
current market data. Westwood has informal arrangements
with certain brokers who provide "soft dollar" credits
for the purchase of research services. Commissions paid
to these brokers are competitive. Accounts receiving
benefit from the research share the cost. A budget for
this research is determined annually and reviewed
periodically. Supplemental to selecting a broker on the
best execution basis, this budget may be considered.

Each potential soft dollar arrangement is analyzed by
Westwood to determine whether the use of client
brokerage is appropriate and falls under the "safe
harbor" rules of Section 28(e) of the Securities
Exchange Act of 1934.

Westwood will not effect any brokerage transaction in
the Registrant's portfolio of equity securities with
any broker-dealer affiliated directly or indirectly
with Westwood.

Pursuant to the conditions set forth in the rules of
the Securities and Exchange Commission, the Registrant
may purchase securities from an underwriting syndicate
of which an affiliated broker-dealer of Westwood 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 quality of the issuer.
The rules further require that such purchases take
place in accordance with the procedures adopted

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<PAGE> 14

and reviewed periodically by the Board of Directors of
the Registrant, particularly those directors who are
not "interested persons" of the Registrant.

Westwood may purchase securities for clients in block
trades. This practice allows the client to participate
in volume transactions which may produce better
executions. The same price is allocated to each client.

The name and title of the person employed by Voyageur
who is primarily responsible for the day-to-day
management of the Registrant's portfolio is Steven P.
Eldredge. Mr. Eldredge is a Senior Fixed Income
Portfolio Manager of Voyageur where he has been
employed since July 1995. Mr. Eldredge has over 20
years experience in portfolio management. Mr. Eldridge
is assisted by Thor G. Raarup who has been with
Voyageur since 1998. Prior to joining Voyageur, Mr.
Raarup was a portfolio manager at Delaware Management
Company and a portfolio manager at Voyageur's
predecessor. He has over 10 years experience in
portfolio management.

Susan M. Byrne, President of Westwood, is the
Registrant's portfolio manager for equity securities.
Ms. Byrne, a founder of Westwood in 1983, has over 17
years experience in equity portfolio management.

(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:
Westwood Trust
300 Crescent Court, Suite 1300
Dallas, Texas 75201

Transfer Agent and Dividend Paying Agent:
Securities Transfer Corporation
16910 Dallas Parkway, Suite 100
Dallas, Texas 75248

(f) Expenses:

The Registrant pays expenses for legal and accounting
fees, the

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<PAGE> 15

fees and expenses of its custodian, transfer agent and
dividend paying agent as well as the costs of its
directors and shareholders meetings. These expenses are
in addition to the advisory fees paid to Voyageur under
the Voyageur Agreement and the Amendment or to Westwood
under the Westwood Agreement.

(g) Affiliated Brokerage:

All portfolio transactions effected by Voyageur in the
Registrant's securities during the year ended December
31, 1999, 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 year, 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. With the exception of a
transaction described below, none of such market makers
was an affiliated person of the Registrant or of
Voyageur or an affiliated person of any such persons.
During fiscal 1999, Voyageur inadvertently effected a
transaction with a market maker that was an affiliate
of Voyageur. The full amount of the "mark-up" made by
such affiliated market maker in that transaction has
been refunded to the Registrant. The Registrant has not
purchased any underwritten issues of tax-exempt debt
securities for its portfolio during the year ended
December 31, 1999.

All portfolio transactions effected by Westwood in the
Registrant's equity securities during the year ended
December 31, 1999, were transacted with primary market
makers acting as principal on a net basis or with
broker/dealers acting in an agency capacity for
securities listed on a national securities exchange.
None of the broker/dealers or market makers were
affiliated persons of the Registrant or of Westwood, or
an affiliated person of any such persons. The
Registrant has not purchased any underwritten issues of
equity securities for its portfolio during the year
ended December 31, 1999, in which an affiliated person
of the Registrant or of Westwood was a member of the
underwriting syndicate.

2. Non-Resident Managers:

Not applicable.

3. Control Persons:

For information relating to control of the Registrant, reference is made to
the caption "Principal Shareholders" on pages 2 and 3, and to the
subcaption "Stock Ownership of Directors and Officers" on pages 4 and 5 of
the Registrant's Proxy Statement, dated March 31, 2000, filed with the
Commission (the "2000 Proxy Statement") to which reference is made and
which material is hereby

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incorporated by reference. The information contained therein is the same as
of April 17, 2000.

Reference is made to the caption "Election of Directors" on pages 3 and 4
of the 2000 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 subcaption "Remuneration"
on page 5 of the 2000 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 17, 2000.

Reference is made to the subcaption "Stock Ownership of Directors and
Officers" on pages 4 and 5 of the 2000 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 17, 2000.

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 1999, Registrant qualified as a "regulated investment
company" under Subchapter M of the Internal Revenue Code. As a "regulated
investment company", the Registrant distributed to its shareholders as
dividends during fiscal 1999 (i) more than 90% of its net taxable income
and (ii) more than 90% of its net tax-exempt income. In addition, more than
50% of the value of the Registrant's total assets at the end of each of its
fiscal quarters in 1999 consisted of tax-exempt obligations described in
Section 103 of the Internal Revenue Code and the amount of tax-exempt
interest from such obligations distributed to Registrant's shareholders as
dividends was designated as such by the Registrant in written notice to
them. Since the Registrant distributed to its shareholders as dividends all
of the net taxable

-14-

<PAGE> 17

income it received in 1999, the Registrant has made no provision for
federal income taxes for fiscal 1999.

During fiscal 1999, the Registrant received $28,718 of net taxable
dividend income, $754,978 of net tax-exempt interest income and realized a
capital loss of $42,204 from security transactions. Of these amounts
$28,718 of net taxable dividend income and $728,271 of net tax-exempt
interest income was distributed to the Registrant's shareholders as
dividends. The distribution of dividends to shareholders took on the same
character to the Registrant's shareholders as that income was received by
the Registrant; to wit: taxable dividend income and tax-exempt interest
income.

Reference is made to the subcaption "Tax Effects of Change in Investment
Objective" on pages 7, 8 and 9 of the 1998 Proxy Statement for a further
discussion of the federal income tax effects resulting from the change in
the Registrant's investment objective, which material is hereby
incorporated by reference.

5. Outstanding Securities:

As of April 17, 2000, the authorized and outstanding shares of the
Registrant's Common Stock was as follows:

<TABLE>
<CAPTION>
Authorized Outstanding
---------- -----------
<S> <C>
2,000,000 shares 1,201,768 shares
</TABLE>

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.

-15-
<PAGE> 18
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.

-16-

<PAGE> 19

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements:

(i) Statement of Assets and Liabilities as of
December 31, 1999.
(ii) Portfolio of Investment Securities as of
December 31, 1999.
(iii) Statement of Operations for the Year ended
December 31, 1999.
(iv) Statement of Changes in Net Assets for the Years
ended December 31, 1999 and 1998.
(v) Notes to Financial Statements.
(vi) Selected Per Share Data and Ratios for Each of the
Years in the Five Year Period ended December 31,1999.

All of the foregoing are in Registrant's Annual Report to
Shareholders for 1999, which material is incorporated by
reference in Part B hereof.

(b) Exhibits:

(1) Amended Articles of Incorporation(1)
(2) By-Laws(4)
(3) None
(4) Specimen Stock Certificate(1)
(5) None
(6) None
(7) Investment Advisory Contracts(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.

-17-

<PAGE> 20

(2) Registrant's Investment Advisory Agreement, dated as of April
1, 1991, with Voyageur Fund Managers was attached as Exhibit A
to the Registrant's Proxy Statement, dated April 8, 1991,
filed in preliminary form with the Commission on or about
March 20, 1991, which Agreement is hereby incorporated by
reference. The Amendment, dated as of April 1, 1999, to such
Investment Advisory Agreement was attached as Exhibit A to the
Registrant's Proxy Statement, dated March 29, 1999, filed in
definitive form with the Commission on or about March 29,
1999, which Amendment is hereby incorporated by reference.

Registrant's Investment Advisory Agreement, dated as of April
1, 1999, with Westwood Management Corp. was attached as
Exhibit B to the Registrant's Proxy Statement, dated March 29,
1999, filed in definitive form with the Commission on or about
March 29, 1999, which Agreement is hereby incorporated by
reference.

(3) Registrant's Custodian Agreement, dated August 14, 1992, with
Trust Company of Texas (the predecessor of Westwood Trust) 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 AF 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 17, 2000, the outstanding shares of the Registrant's Common
Stock were held of record by 143 persons.

ITEM 29. INDEMNIFICATION
The answer to this Item is found In Article VII, Section 7 of the
Registrant's Bylaws filed herewith as Exhibit (2) which material is
hereby incorporated by reference.

-18-

<PAGE> 21

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 Asset Management LLC as filed with the Commission,
which is hereby incorporated by reference.

For information as to the other business or employment of the
Registrant's investment advisor, reference is made to Form ADV, as
amended, of Westwood Management Corp. 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 Investment Company Act of
1940 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 76031.

ITEM 32. MANAGEMENT SERVICES
Not applicable.

ITEM 33. UNDERTAKINGS
Not applicable.

-19-

<PAGE> 22

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment No. Twenty Two 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 26th day of
April, 2000.

SAMARNAN INVESTMENT CORPORATION

By: /s/ GEORGE S. WALLS, JR.
-----------------------------
GEORGE S. WALLS, JR.
PRESIDENT

-20-

<PAGE> 23

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
2 By-Laws

14 Consent of Independent Auditors

19 Registrants Annual Report to Shareholders
</TABLE>

<PAGE> 1

EXHIBIT 2

<PAGE> 2

BYLAWS

SAMARNAN INVESTMENT CORPORATION

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

(As Adopted April 25, 2000)

ARTICLE I

OFFICES

SECTION 1. Registered Office. The registered office and registered agent of the
Corporation will be at such place and be such person as the Board of Directors
may from time to time designate by resolution.

SECTION 2. Other Offices. The Corporation may also have offices at such other
places, both within and without the State of Texas, as the Board of Directors
may from time to time determine or the business of the Corporation may require.

ARTICLE II

SHAREHOLDERS

SECTION 1. Place of Meetings. All meetings of the shareholders for the election
of Directors will be held at such place, within or without the State of Texas,
as may be fixed from time to time by the Board of Directors. Meetings of
shareholders for any other purpose may be held at such time and place, within or
without the State of Texas, as may be stated in the notice of the meeting or in
a duly executed waiver of notice thereof.

SECTION 2. Annual Meeting. An annual meeting of the shareholders will be held at
such time as may be determined by the Board of Directors, at which meeting the
shareholders will elect a Board of Directors and transact such other business as
may properly be brought before the meeting.

SECTION 3. List of Shareholders. At least ten days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at such
meeting, arranged in alphabetical order, with the address of and the number of
voting shares registered in the name of each, will be prepared by the officer or
agent having charge of the stock transfer books. Such list will be kept on file
at the registered office of the Corporation for a period of ten days prior to
such meeting and will be subject to inspection by any shareholder at

<PAGE> 3

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 2

any time during usual business hours. Such list will be produced and kept open
at the time and place of the meeting during the whole time thereof and will be
subject to the inspection of any shareholder who may be present.

SECTION 4. Special Meetings. Special meetings of the shareholders, for any
purpose or purposes, unless otherwise prescribed by law, the Articles of
Incorporation or these Bylaws, may be called by the President or the Board of
Directors, or will be called by the President or Secretary at the request in
writing of the holders of not less than 10% of all the shares issued,
outstanding and entitled to vote. Such request will state the purpose or
purposes of the proposed meeting. Business transacted at all special meetings
will be confined to the purposes stated in the notice of the meeting unless all
shareholders entitled to vote are present and consent.

SECTION 5. Notice. Written or printed notice stating the place, day and hour of
any meeting of the shareholders and, in case of a special meeting, the purpose
or purposes for which the meeting is called, will be delivered not less than ten
nor more than sixty days before the date of the meeting, either personally or by
mail, by or at the direction of the President, the Secretary, or the officer or
person calling the meeting, to each shareholder of record entitled to vote at
the meeting. If mailed, such notice will be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his address
as it appears on the stock transfer books of the Corporation, with postage
thereon prepaid.

SECTION 6. Quorum. With respect to any matter, the presence in person or by
proxy of the holders of a majority of the shares entitled to vote on that matter
will be necessary and sufficient to constitute a quorum for the transaction of
business except as otherwise provided by law, the Articles of Incorporation or
these Bylaws. II, however, such quorum is not present or represented at any
meeting of the shareholders, the shareholders entitled to vote thereat, present
in person or represented by proxy, will have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum is present or represented. If the adjournment is for more than 30 days,
or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting will be given to each shareholder of
record entitled to vote at the meeting. At such adjourned meeting at which a
quorum is present or represented, any business may be transacted that might have
been transacted at the meeting as originally notified.

SECTION 7. Voting. When a quorum is present at any meeting of the Corporation's
shareholders, the vote of the holders of a majority of the shares entitled to
vote that are actually voted on any question brought before the meeting will be
sufficient to decide such question; provided that if the question is one upon
which, by express provision of law, the Articles of Incorporation or these
Bylaws, a different vote is required, such express provision shall govern and
control the decision of such question.

<PAGE> 4

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 3

SECTION 8. Method of Voting. Each outstanding share of the Corporation's capital
stock, regardless of class or series, will be entitled to one vote on each
matter submitted to a vote at a meeting of shareholders, except to the extent
that the voting rights of the shares of any class or series are limited or
denied by the Articles of Incorporation, as amended from time to time. At any
meeting of the shareholders, every shareholder having the right to vote will be
entitled to vote in person or by proxy executed in writing by such shareholder
and bearing a date not more than 11 months prior to such meeting, unless such
instrument provides for a longer period. A telegram, telex, cablegram or similar
transmission by the shareholder, or a photographic, photostatic, facsimile or
similar reproduction of a writing executed by the shareholder, shall be treated
as an execution in writing for purposes of the preceding sentence. Each proxy
will be revocable unless expressly provided therein to be irrevocable and if,
and only so long as, it is coupled with an interest sufficient in law to support
an irrevocable power. Such proxy will be filed with the Secretary of the
Corporation prior to or at the time of the meeting. Voting for directors will be
in accordance with Article III of these Bylaws. Voting on any question or in any
election may be by voice vote or show of hands unless the presiding officer
orders or any shareholder demands that voting be by written ballot.

SECTION 9. Record Date; Closing Transfer Books. The Board of Directors may fix
in advance a record date for the purpose of determining shareholders entitled to
notice of or to vote at a meeting of shareholders, such record date to be not
less than ten nor more than sixty days prior to such meeting, or the Board of
Directors may close the stock transfer books for such purpose for a period of
not less than ten nor more than sixty days prior to such meeting. In the absence
of any action by the Board of Directors, the date upon which the notice of the
meeting is mailed will be the record date.

ARTICLE III

BOARD OF DIRECTORS

SECTION 1. Management. The business and affairs of the Corporation will be
managed by or under the direction of the Board of Directors, who may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by law, the Articles of Incorporation or these Bylaws directed or required
to be exercised or done by the shareholders.

SECTION 2. Qualification; Election; Term. None of the Directors need be a
shareholder of the Corporation or a resident of the State of Texas. The
Directors will be elected by plurality vote at the annual meeting of the
shareholders, except as hereinafter provided, and each Director elected will
hold office until whichever of the following occurs first: his successor is
elected and qualified, his resignation, his removal from office by the
shareholders, or his death. Any Director attaining age 72 shall not be eligible
for reelection upon completion of the term for which he was elected.

<PAGE> 5

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 4

SECTION 3. Number. The number of Directors of the Corporation will be at least
three (3) and not more than nine (9). The number of Directors authorized will be
fixed as the Board of Directors may from time to time designate. No decrease in
the number of Directors will have the effect of shortening the term of any
incumbent Director.

SECTION 4. Removal. Any Director may be removed either for or without cause at
any special meeting of shareholders by the affirmative vote of at least a
majority in number of shares of the shareholders present in person or
represented by proxy at such meeting and entitled to vote for the election of
such Director; provided, that notice of intention to act upon such matter has
been given in the notice calling such meeting.

SECTION 5. Vacancies. Any vacancy occurring in the Board of Directors by death,
resignation, removal or otherwise may be filled by an affirmative vote of at
least a majority of the remaining Directors though less than a quorum of the
Board of Directors. A Director elected to fill a vacancy will be elected for the
unexpired term of his predecessor in office. A directorship to be filled by
reason of an increase in the number of Directors may be filled by the Board of
Directors for a term of office only until the next election of one or more
Directors by the shareholders.

SECTION 6. Place of Meetings. Meetings of the Board of Directors, regular or
special, may be held at such place within or without the State of Texas as may
be fixed from time to time by the Board of Directors.

SECTION 7. Annual Meeting. The first meeting of each newly elected Board of
Directors will be held without further notice immediately following the annual
meeting of shareholders and at the same place, unless by unanimous consent, the
Directors then elected and serving shall change such time or place.

SECTION 8. Regular Meetings. Regular meetings of the Board of Directors may be
held without notice at such time and place as is from time to time determined by
resolution of the Board of Directors.

SECTION 9. Special Meetings. Special meetings of the Board of Directors may be
called by the President on oral or written notice to each Director, given either
personally, by telephone, by telegram or by mail; special meetings will be
called by the President or the Secretary in like manner and on like notice on
the written request of at least two Directors. Except as may be otherwise
expressly provided by law, the Articles of Incorporation or these Bylaws,
neither the business to be transacted at, nor the purpose of, any special
meeting need be specified in a notice or waiver of notice.

SECTION 10. Quorum. At all meetings of the Board of Directors the presence of a
majority of the number of Directors then in office will be necessary and
sufficient to constitute a quorum for the transaction of business, and the
affirmative vote of at least a majority of the Directors present at any meeting
at which there is a quorum will be the act of the Board of Directors, except as
may be otherwise specifically provided by law, the

<PAGE> 6

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 5

Articles of Incorporation or these Bylaws. If a quorum is not present at any
meeting of the Board of Directors, the Directors present thereat may adjourn the
meeting from time to time without notice other than announcement at the meeting,
until a quorum is present.

SECTION 11. Interested Directors. No contract or transaction between the
Corporation and one or more of its Directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of the Corporation's Directors or officers are
Directors or officers or have a financial interest, will be void or voidable
solely for this reason, solely because the Director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if: (i) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the affirmative vote of a
majority of the disinterested Directors, even though the disinterested Directors
be less than a quorum, (ii) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
shareholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the shareholders or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified by the Board of Directors, a committee thereof
or the shareholders. Common or interested Directors my be counted in determining
the presence of a quorum at a meeting of the Board of Directors or of a
committee that authorizes the contract or transaction.

SECTION 12. Committees. The Board of Directors may, by resolution passed by a
majority of the entire Board, designate committees, each committee to consist of
two or more Directors of the Corporation, which committees will have such power
and authority and will perform such functions as may be provided in such
resolution. Such committee or committees will have such name or names as may be
designated by the Board and will keep regular minutes of their proceedings and
report the same to the Board of Directors when required.

SECTION 13. Action by Consent. Any action required or permitted to be taken at
any meeting of the Board of Directors or any committee of the Board of Directors
may be taken without such a meeting if a consent or consents in writing, setting
forth the action so taken, is signed by all the members of the Board of
Directors or such committee, as the case may be.

SECTION 14. Compensation of Directors. Directors will receive such compensation
for their services and reimbursement for their expenses as the Board of
Directors, by resolution, may establish; provided that nothing herein contained
will be construed to preclude any Director from serving the Corporation in any
other capacity and receiving compensation therefor.

<PAGE> 7

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 6

ARTICLE IV

NOTICE

SECTION 1. Form of Notice. Whenever by law, the Articles of Incorporation or
these Bylaws, notice is to be given to any Director or shareholder, and no
provision is made as to how such notice is to be given, such notice may be
given: (i) in writing, by mail, postage prepaid, addressed to such director or
shareholder at such address as appears on the books of the Corporation or (ii)
in any other method permitted by law. Any notice required or permitted to be
given by mail will be deemed to be given at the time the same is deposited in
the United States mail.

SECTION 2. Waiver. Whenever any notice is required to be given to any
shareholder or Director of the Corporation as required by law, the Articles of
Incorporation or these Bylaws, a waiver thereof in writing signed by the person
or persons entitled to such notice, whether before or after the time stated in
such notice, will be equivalent to the giving of such notice. Attendance of a
shareholder or Director at a meeting will constitute a waiver of notice of such
meeting, except where such shareholder or Director attend for the express
purpose of objecting, at the beginning of the meeting, to the transaction of any
business on the ground that the meeting has not been lawfully called or
convened.

ARTICLE V

OFFICERS AND AGENTS

SECTION 1. In General. The officers of the Corporation will be elected by the
Board of Directors and will be a President and a Secretary. The Board of
Directors may also elect a Chairman of the Board, Vice Chairman of the Board,
Vice Presidents, Assistant Vice Presidents, a Treasurer, and Assistant
Secretaries and Assistant Treasurers. Any two or more offices, except the
offices of President and Secretary, may be held by the same person.

SECTION 2. Election. The Board of Directors, at its first meeting after each
annual meeting of shareholders, will elect the officers, none of whom need be a
member of the Board of Directors.

SECTION 3. Other Officers and Agents. The Board of Directors may also elect and
appoint such other officers and agents as it deems necessary, who will be
elected and appointed for such terms and will exercise such powers and perform
such duties as may be determined from time to time by the Board.

SECTION 4. Compensation. The compensation of all officers and agents of the
Corporation will be fixed by the Board of Directors or any committee of the
Board, if so authorized by the Board.

<PAGE> 8

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 7

SECTION 5. Term of Office and Removal. Each officer of the Corporation will hold
office until his death, his resignation or removal from office, or the election
and qualification of his successor, whichever occurs first. Any officer or agent
elected or appointed by the Board of Directors may be removed at any time, for
or without cause, by the affirmative vote of a majority of the entire Board of
Directors, but such removal will not prejudice the contract rights, if any, of
the person so removed. If the office of any officer becomes vacant for any
reason, the vacancy may be filled by the Board of Directors.

SECTION 6. Employment and Other Contracts. The Board of Directors may authorize
any officer or officers or agent or agents to enter into any contract or execute
and deliver any instrument in the name or on behalf of the Corporation, and such
authority may be general or confined to specific instances. The Board of
Directors may, when it believes the interest of the Corporation will best be
served thereby, authorize executive employment contracts that will have terms no
longer than ten years and contain such other terms and conditions as the Board
of Directors deems appropriate. Nothing herein will limit the authority of the
Board of Directors to authorize employment contracts for shorter terms.

SECTION 7. Chairman of the Board of Directors. If the Board of Directors has
elected a Chairman of the Board, he will preside at all meetings of the
shareholders and the Board of Directors. Except where by law the signature of
the President is required, the Chairman will have the same power as the
President to sign all certificates, contracts and other instruments of the
Corporation. During the absence or disability of the President, the Chairman
will exercise the powers and perform the duties of the President.

SECTION 8. President. The President will be the chief executive officer of the
Corporation and, subject to the control of the Board of Directors, will
supervise and control all of the business and affairs of the Corporation. He
will, in the absence of the Chairman of the Board, preside at all meetings of
the shareholders and the Board of Directors. The President will have all powers
and perform all duties incident to the office of President and will have such
other powers and perform such other duties as the Board of Directors may from
time to time prescribe.

SECTION 9. Vice Presidents. Each Vice President will have the usual and
customary powers and perform the usual and customary duties incident to the
office of Vice President, and will have such other powers and perform such other
duties as the Board of Directors or any committee thereof may from time to time
prescribe or as the President may from time to time delegate to him. In the
absence or disability of the President and the Chairman of the Board, a Vice
President designated by the Board of Directors, or in the absence of such
designation the Vice Presidents in the order of their seniority in office, will
exercise the powers and perform the duties of the President.

SECTION 10. Secretary. The Secretary will attend all meetings of the
shareholders and record all votes and the minutes of all proceedings in a book
to be kept for that purpose. The Secretary will perform like duties for the
Board of Directors and committees thereof when required. The Secretary will
give, or cause to be given, notice of all meetings of the

<PAGE> 9

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 8

shareholders and special meetings of the Board of Directors. The Secretary will
keep in safe custody the seal of the Corporation. The Secretary will be under
the supervision of the President. The Secretary will have such other powers and
perform such other duties as the Board of Directors may from time to time
prescribe or as the President may from time to time delegate to him.

SECTION 11. Assistant Secretaries. The Assistant Secretaries in the order of
their seniority in office, unless otherwise determined by the Board of
Directors, will, in the absence or disability of the Secretary, exercise the
powers and perform the duties of the Secretary. They will have such other powers
and perform such other duties as the Board of Directors may from time to time
prescribe or as the President may from time to time delegate to them.

SECTION 12. Treasurer. The Treasurer will have responsibility for the receipt
and disbursement of all corporate funds and securities, will keep full and
accurate accounts of such receipts and disbursements, and will deposit or cause
to be deposited all moneys and other valuable effects in the name and to the
credit of the Corporation in such depositories as may be designated by the Board
of Directors. The Treasurer will render to the Directors whenever they may
require it an account of the operating results and financial condition of the
Corporation, and will have such other powers and perform such other duties as
the Board of Directors may from time to time prescribe or as the President may
from time to time delegate to him.

SECTION 13. Assistant Treasurers. The Assistant Treasurers in the order of their
seniority in office, unless otherwise determined by the Board of Directors,
will, in the absence or disability of the Treasurer, exercise the powers and
perform the duties of the Treasurer. They will have such other powers and
perform such other duties as the Board of Directors may from time to time
prescribe or as the President may from time to time delegate to them.

SECTION 14. Bonding. The Corporation may secure a bond to protect the
Corporation from loss in the event of defalcation by any of the officers, which
bond may be in such form and amount and with such surety as the Board of
Directors may deem appropriate.

ARTICLE VI

CERTIFICATES REPRESENTING SHARES

SECTION 1. Form of Certificates. Certificates, in such form as may be determined
by the Board of Directors, representing shares to which shareholders are
entitled, will be delivered to each shareholder. Such certificates will be
consecutively numbered and entered in the stock book of the Corporation as they
are issued. Each certificate will state on the face thereof the holder's name,
the number, class of shares, and the par value of such shares or a statement
that such shares are without par value. They will be signed

<PAGE> 10

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 9

by the President or a Vice President and the Secretary or an Assistant
Secretary, and may be sealed with the seal of the Corporation or a facsimile
thereof. If any certificate is countersigned by a transfer agent, or an
assistant transfer agent or registered by a registrar, either of which is other
than the Corporation or an employee of the Corporation, the signatures of the
Corporation's officers may be facsimiles. In case any officer or officers who
have signed, or whose facsimile signature or signatures have been used on such
certificate or certificates, ceases to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, before such
certificate or certificates have been delivered by the Corporation or its
agents, such certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the Corporation.

SECTION 2. Lost Certificates. The Board of Directors may direct that a new
certificate be issued in place of any certificate theretofore issued by the
Corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing such issue of a new certificate, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost or destroyed certificate, or his
legal representative, to advertise the same in such manner as it may require
and/or to give the Corporation a bond, in such form, in such sum, and with such
surety or sureties as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost or destroyed. When a certificate has been lost, apparently destroyed
or wrongfully taken, and the holder of record fails to notify the Corporation
within a reasonable time after such holder has notice of it, and the Corporation
registers a transfer of the shares represented by the certificate before
receiving such notification, the holder of record is precluded from making any
claim against the Corporation for the transfer of a new certificate.

SECTION 3. Transfer of Shares. Shares of stock will be transferable only on the
books of the Corporation by the holder thereof in person or by such holder's
duly authorized attorney. Upon surrender to the Corporation or the transfer
agent of the Corporation of a certificate representing shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it will be the duty of the Corporation or the transfer agent of the
Corporation to issue a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.

SECTION 4. Registered Shareholders. The Corporation will be entitled to treat
the holder of record of any share or shares of stock as the holder in fact
thereof and, accordingly, will not be bound to recognize any equitable or other
claim to or interest in such share or shares on the part of any other person,
whether or not it has express or other notice thereof, except as otherwise
provided by law.

<PAGE> 11

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 10

ARTICLE VII

GENERAL PROVISIONS

SECTION 1. Dividends. Dividends upon the outstanding shares of the Corporation,
subject to the provisions of the Articles of Incorporation, if any, may be
declared by the Board of Directors at any regular or special meeting. Dividends
may be declared and paid in cash, in property, or in shares of the Corporation,
subject to the provisions of the Texas Business Corporation Act and the Articles
of Incorporation. The Board of Directors may fix in advance a record date for
the purpose of determining shareholders entitled to receive payment of any
dividend, such record date to be not more than sixty days prior to the payment
date of such dividend, or the Board of Directors may close the stock transfer
books for such purpose for a period of not more than sixty days prior to the
payment date of such dividend. In the absence of any action by the Board of
Directors, the date upon which the Board of Directors adopts the resolution
declaring such dividend will be the record date.

SECTION 2. Reserves. There may be created by resolution of the Board of
Directors out of the surplus of the Corporation such reserve or reserves as the
directors from time to time, in their discretion, deem proper to provide for
contingencies, or to equalize dividends, or to repair or maintain any property
of the Corporation, or for such other purpose as the Directors may deem
beneficial to the Corporation, and the directors may modify or abolish any such
reserve in the manner in which it was created. Surplus of the Corporation to the
extent so reserved will not be available for the payment of dividends or other
distributions by the Corporation.

SECTION 3. Telephone and Similar Meetings. Shareholders, directors and committee
members may participate in and hold meetings by means of conference telephone or
similar communications equipment by which all persons participating in the
meeting can hear each other. Participation in such a meeting will constitute
presence in person at the meeting, except where a person participates in the
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business on the ground that the meeting had not been
lawfully called or convened.

SECTION 4. Books and Records. The Corporation will keep correct and complete
books and records of account and minutes of the proceedings of its shareholders
and Board of Directors, and will keep at its registered office or principal
place of business, or at the office of its transfer agent or registrar, a record
of its shareholders, giving the names and addresses of all shareholders and the
number and class of the shares held by each.

SECTION 5. Fiscal Year. The fiscal year of the Corporation will be fixed by
resolution of the Board of Directors.

<PAGE> 12

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 11

SECTION 6. Seal. The Corporation may have a seal, and such seal may be used by
causing it or a facsimile thereof to be impressed or affixed or reproduced or
otherwise. Any officer of the Corporation will have authority to affix the seal
to any document requiring it.

SECTION 7. Indemnification.

(a) The Corporation will, to the fullest extent permitted by the Texas
Business Corporation Act, as the same exists or may hereafter be amended,
indemnify any and all persons serving as Director or officer of the Corporation,
or who are or were serving at the request of the Corporation as a director,
officer, partner, venturer, proprietor, trustee or employee of another
corporation, partnership, limited liability company, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise, from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by such Act. Such indemnification may be provided pursuant to the
Bylaws, agreement, vote of shareholders or disinterested Directors or otherwise,
both as to action in the capacity of Director or officer and as to action in
another capacity while holding such office, will continue as to a person who has
ceased to be a Director or officer and inure to the benefit of the heirs,
executors and administrators of such a person.

(b) If a claim under paragraph (a) of this Section 7 is not paid in full by
the Corporation within 30 days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant will be entitled to be paid also the expense of
prosecuting such claim. It will be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct that make it permissible under the laws of the
State of Texas for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense will be on the Corporation.
Neither the failure of the Corporation (including its Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is
proper in the circumstances because he has met the applicable standard of
conduct set forth in the laws of the State of Texas nor an actual determination
by the Corporation (including its Board of Directors, independent legal counsel,
or its shareholders) that the claimant has not met such applicable standard of
conduct, will be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.

SECTION 8. Liability of Directors. To the fullest extent permitted by the laws
of the State of Texas as the same exist or may hereafter be amended, a Director
of the Corporation will not be liable to the Corporation or its shareholders for
monetary damages for an act or omission in the Director's capacity as a
Director. Any repeal or modification of this Section 8 will not increase the
personal liability of any Director of the Corporation for any act or

<PAGE> 13

Bylaws of SAMARNAN INVESTMENT CORPORATION Page 12

occurrence taking place before such repeal or modification, or adversely affect
any right or protection of a Director of the Corporation existing at the time of
such repeal or modification. The provisions of this Section 8 shall not be
deemed to limit or preclude indemnification of a Director by the Corporation for
any liability of a Director that has not been eliminated by the provisions of
this Section 8.

SECTION 9. Insurance. The Corporation may at the discretion of the Board of
Directors purchase and maintain insurance on behalf of the Corporation and any
person whom it has the power to indemnify pursuant to law, the Articles of
Incorporation, these Bylaws or otherwise.

SECTION 10. Resignation. Any director, officer or agent may resign by giving
written notice to the President or the Secretary. Such resignation will take
effect at the time specified therein or immediately if no time is specified
therein. Unless otherwise specified therein, the acceptance of such resignation
will not be necessary to make it effective.

SECTION 11. Amendment of Bylaws. These Bylaws may be altered, amended or
repealed at any meeting of the Board of Directors at which a quorum is present,
by the affirmative vote of a majority of the Directors present at such meeting.

SECTION 12. Genders. As used in these Bylaws, words of the masculine gender
shall be construed to include the feminine gender unless the context requires
otherwise.

SECTION 13. Invalid Provisions. If any part of these Bylaws is held invalid or
inoperative for any reason, the remaining parts, so far as possible and
reasonable, will be valid and operative.

<PAGE> 1

EXHIBIT 14
<PAGE> 2
CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Samarnan Investment Corporation:

We consent to the use of our report included herein.

/s/ CHESHIER & FULLER, L.L.P.

CHESHIER & FULLER, L.L.P.

Dallas, Texas
March 10, 2000

<PAGE> 1

EXHIBIT 19

<PAGE> 2

SAMARNAN
INVESTMENT CORPORATION

ANNUAL REPORT TO THE
SHAREHOLDERS FOR THE YEAR ENDED DECEMBER 31, 1999

SAMARNAN INVESTMENT CORPORATION
P.O. Box 651 / Cleburne, Texas 76033-0651

<PAGE> 3

[CHESHIER & FULLER, L.L.P. 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 schedule of investment in securities, as
of December 31, 1999, 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 financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements and financial highlights 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 financial highlights 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, 1999, 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 financial highlights referred to
above present fairly, in all material respects, the financial position of
Samarnan Investment Corporation as of December 31, 1999, the results of its
operations for the year then ended, the changes in net assets for each of the
two years in the period then ended, and the financial highlights 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 10, 2000

<PAGE> 4

SAMARNAN
INVESTMENT CORPORATION
Statement of Assets and Liabilities
December 31, 1999

<TABLE>
<S> <C>
Assets:
Cash $ 361,612
Investments in securities at market (identified cost $17,073,234) 17,268,412
Accrued interest receivable 199,490
------------
Total assets 17,829,514
------------

Liabilities:
Payables:
Accounts payable 21,052
------------
Total liabilities 21,052
------------
Net assets applicable to outstanding capital shares, equivalent
to $14.82 per share $ 17,808,462
============

Source of net assets:
Capital shares - authorized 2,000,000 shares of $1.00 par value; $ 1,201,768
outstanding 1,201,768 shares
Accumulated net realized gains of $1,032,910 less accumulated
distribution of $1,154,071 (121,161)
Unrealized appreciation of investments 195,178
Undistributed net investment income 726,368
Retained earnings at April 29, 1978, commencement of operations
as an investment company 15,806,309
------------
$ 17,808,462
============
</TABLE>

See accompanying notes to financial statements.

<PAGE> 5

SAMARNAN
INVESTMENT CORPORATION
Statement of Operations
Year Ended December 31, 1999

<TABLE>
<S> <C>
Investment income:
Dividends $ 26,733
Interest 883,928
-----------
Total income 910,661
-----------
Expenses:
Investment advisory fee 54,848
Legal and professional fees 29,252
Audit fees 8,500
Directors fees 7,800
Custodian expense 12,000
Administrative fees 11,980
Office and printing supplies 2,585
-----------
Total expenses 126,965
-----------
Net investment income 783,696
-----------

Realized and unrealized gain on investments:
Realized gain from security transactions - excluding short-term securities:
Proceeds from sales 6,489,029
Cost of securities sold, net of amortization of bond premiums 6,531,233
-----------
Net realized (loss) (42,204)
-----------
Unrealized appreciation of investments:
Beginning of period 1,006,552
End of period 195,178
-----------
Decrease in unrealized appreciation on investments (811,374)
-----------
Net realized and unrealized (loss) on investments (853,578)
-----------
Decrease in net assets from operations $ (69,882)
===========
Total expenses as a percentage of total investment income 13.9%
===========
</TABLE>

See accompanying notes to financial statements.

<PAGE> 6

SAMARNAN
INVESTMENT CORPORATION
Statement of Changes in Net Assets
Years Ended December 31, 1999 and 1998

<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Increase (decrease) in net assets from operations:
Net investment income $ 783,696 $ 847,878
Net realized gain (loss) from security transactions (42,204) 33,127
Increase (decrease) in unrealized appreciation
of investments (811,374) 148,277
------------ ------------
Increase (decrease) in net assets from operations (69,882) 1,029,282
------------ ------------

Dividends and distributions to shareholders:
Net investment income (805,185) (853,255)
Capital gains -0- -0-
------------ ------------
Decrease in net assets from dividends and distributions
to shareholders (805,185) (853,255)
------------ ------------
Increase (decrease) in net assets (875,067) 176,027

Net assets:
Beginning of period 18,683,529 18,507,502
------------ ------------

End of period (including undistributed investment
income of $726,368 and $747,856, respectively) $ 17,808,462 $ 18,683,529
============ ============
</TABLE>

See accompanying notes to financial statements.

<PAGE> 7

SAMARNAN
INVESTMENT CORPORATION
Notes to Financial Statements
December 31, 1999

(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 fund seeks tax
free income and preservation of capital through a diversified portfolio of
bonds and equity securities. 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. Dividend income is recognized on the ex-dividend
date, and interest income is recognized on an accrual basis.

Fixed-income securities are valued at prices obtained from a pricing
service, when such prices are available; however, in circumstances
where the investment adviser deems it appropriate to do so, such
securities will be valued at the mean quoted bid and asked prices or
at prices for securities of comparable maturity, quality and type.

Investments in securities traded on a national securities exchange (or
reported on the NASDAQ national market) are stated at the last
reported sales price on the day of valuation; other securities traded
in the over-the-counter market and listed securities for which no sale
was reported on that date are stated at the last quoted bid price.
Restricted securities and other securities for which quotations are
not readily available are valued at fair value as determined by the
board of directors.

(b) Dividends and Distributions

Dividends and distributions to shareholders are recorded on the
ex-dividend date.

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.

<PAGE> 8

SAMARNAN
INVESTMENT CORPORATION
Notes to Financial Statements
December 31, 1999

(1) Summary of Significant Accounting Policies, continued

(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

The Company has 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 debt securities. The fee for these investment advisory
services is based on .27% of the value of the assets in the debt
portfolio and is paid on a quarterly basis in arrears.

Effective April 1, 1999 the Company contracted with Westwood
Management Corp. to provide investment advisory services. Under this
contract, the Company is furnished investment, supervisory and
clerical services regarding its investment in equity securities. The
fee for these investment advisory services is based on 0.75% of the
value of the assets in the equity portfolio and is paid on a quarterly
basis in arrears.

(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 1999, cost of purchases and proceeds from sales or maturities of
securities, other than short-term securities, amounted to $5,946,779
and $6,489,028, respectively.

<PAGE> 9

SAMARNAN
INVESTMENT CORPORATION
Notes to Financial Statements
December 31, 1999

(4) Securities Transactions, continued

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, 1999 were $673,008 and $477,830, respectively.

(5) Dividends and Distributions to Shareholders

Cash dividends paid during the years ended December 31, 1999 and 1998
amount to $.67 and $.71 per share, respectively.

Cash dividends of $.15 per share from the balance of undistributed net
investment income were declared by the Company's Board of Directors on
January 25, 2000, payable to shareholders of record February 7, 2000.

(6) Concentrations of Credit Risk

At December 31, 1999, and at various other times during the year, the
Company had cash balances in excess of federally insured limits of
$100,000.

<PAGE> 10

SAMARNAN
INVESTMENT CORPORATION

Investments in Securities
December 31, 1999

<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
--------- -----
<S> <C> <C>
Common Stocks--15.3%
Basic materials--0.50%
Alcoa 400 $33,200
Monsanto Co. 1,200 42,526
Vulcan Materials Co. 600 23,963
Capital goods--0.30%
Deere & Co. 700 30,363
General Dynamics Corp. 500 26,375
Consumer discretionary--1.90%
AMFM, Inc. 800 62,600
American Eagle Outfitters 600 31,500
Ann Taylor Stores Corp. 700 20,663
Limited, Inc. 1,300 56,307
Ross Stores, Inc. 1,300 23,319
Time Warner, Inc. 800 57,850
The Walt Disney Company 2,300 67,275
Consumer staples--0.90%
Anheuser Busch, Inc. 800 56,700
Brinker International, Inc. 2,200 53,075
Safeway, Inc. 1,500 53,625
Energy--0.80%
Apache Corp. 700 25,857
Burlington Resources, Inc. 800 26,450
</TABLE>

See accompanying notes to financial statements.
<PAGE> 11

SAMARNAN
INVESTMENT CORPORATION

Investments in Securities
December 31, 1999

<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
--------- -------
<S> <C> <C>
Devon Energy Corp. 692 22,749
Texaco, Inc. 400 21,725
Transocean Offshore, Inc. 1,000 33,688
Financial--1.30%
Bear Stearns 1,460 62,415
Citigroup 1,000 55,688
PNC Bank Corp. 900 40,050
Southtrust Corp. 1,300 49,157
Health care--1.20%
King Pharmaceuticals, Inc. 2,550 142,961
Pharmacia & Upjohn, Inc. 800 36,000
Smithkline Beecham PLC 700 44,888
Technology--3.00%
Citrix Systems 700 86,100
Electronic Arts, Inc. 300 25,200
Electronic Data Systems 900 60,244
Hewlett Packard 700 79,625
IBM 600 64,725
Oracle Corp. 1,200 134,476
Rambus, Inc. 400 26,975
Sterling Software 1,200 37,800
Utilities--1.10%
Florida Progress Corp. 1,200 50,776
</TABLE>

See accompanying notes to financial statements.

<PAGE> 12

SAMARNAN
INVESTMENT CORPORATION

Investments in Securities
December 31, 1999

<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
--------- -------
<S> <C> <C>
Hawaiian Electric Industries 1,600 46,200
SBC Communications 1,000 48,750
MCI WorldCom, Inc. 900 47,757
Transportation--0.10%
CNF Transportation 500 17,250
Reits--2.30%
Apartment & Investment Management 1,100 43,794
Boston Properties, Inc. 1,500 46,688
Equity Office Properties Trust 1,800 44,325
Equity Residential Properties Trust 1,000 42,688
Host Marriott Corp. 4,600 37,950
Kimco Realty Corp. 1,200 40,650
Prologis 2,300 44,275
Simon Property Group, Inc. 1,900 43,582
Vornado Realty Trust 1,400 45,500
International--1.90%
WEBS - Australia 5,000 55,315
WEBS - Austria 5,700 47,381
WEBS - Belgium 3,300 53,213
WEBS - Italy 2,500 62,500
WEBS - Singapore 6,200 56,966
WEBS - Spain 2,100 59,325
---------
Total common stocks (cost $2,383,949) 2,650,999
---------
</TABLE>

See accompanying notes to financial statements.

<PAGE> 13

SAMARNAN
INVESTMENT CORPORATION
Investments in Securities
December 31, 1999

<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
--------- --------
<S> <C> <C>
Municipal bonds-84.70%
Naperville, IL-Electric Rev.--6.200% due 11/01/00 500,000 500,550
Wisconsin Public Power Rev.--6.400% due 07/01/01 500,000 515,395
Palatine, IL-Schl Dist #15 G.O.--5.900% due 12/01/01 450,000 462,393
King County, Washington ISD #408--6.100% due 12/01/01 300,000 309,042
Indiana Municipal Power--5.250% due 01/01/02 500,000 506,675
Bedford Park, IL-G.O.--5.200% due 12/01/04 500,000 507,910
Alaska State Housing Finance Corp.--5.900% due 12/01/04 600,000 625,944
Henderson, NV-G.O.--5.250% due 05/01/05 500,000 510,420
Box Elder, UT-G.O.--5.150% due 06/15/05 300,000 303,288
Indiana State Ed. MBIA--4.800% due 10/01/05 500,000 498,725
Chicago, IL-Wastewater Rev.--5.400% due 01/01/06 500,000 508,580
North Miami Health Fac.Rev.Catholic--5.300% due 08/15/06 200,000 205,142
Clark County, NV-School District--5.500% due 06/15/07 800,000 813,728
North Miami Health Fac.Rev.Catholic--5.400% due 08/15/07 375,000 386,213
Alabama CLG & Univ. Tuskegee--5.500% due 09/01/07 500,000 518,600
Wisconsin Health & Education-Sinai--5.500% due 08/15/08 600,000 615,822
Missouri State Health--5.550% due 02/01/09 200,000 199,708
North Dakota Bldg. Auth.--4.875% due 12/01/09 250,000 244,705
Goodhue City, MN EDA Lease--5.600% due 02/01/09 285,000 290,680
Illinois Health Fac. Auth.--6.000% due 02/15/11 500,000 496,535
Harmony, MN MFHR-Zedakah Found.--5.700% due 03/01/11 260,000 261,510
Harmony, MN MFHR-Zedakah Found.--5.700% due 09/01/11 265,000 266,540
</TABLE>

See accompanying notes to financial statements.

<PAGE> 14

SAMARNAN
INVESTMENT CORPORATION
Investments in Securities
December 31, 1999

<TABLE>
<CAPTION>
Principal
Amount
or Shares Value
--------- -----------
<S> <C> <C>
Volusia City Health Fac.--6.000% due 06/01/12 600,000 626,670
Montgomery County PA IDA--5.625% due 11/15/12 500,000 476,235
W. Washington Univ. Housing--5.000% due 10/01/14 300,000 278,001
Louisiana Housing Fin. Agency--6.000% due 09/01/15 670,000 669,129
Illinois Health Fac.--5.120% due 12/01/15 250,000 228,555
Missouri State Health--5.750% due 02/01/17 250,000 230,990
Florida Housing Fin. Corp.--6.000% due 10/01/19 480,000 463,656
Chicago Ref. Emergency Tel.--5.250% due 01/01/20 290,000 260,765
South Dakota Health--5.650% due 04/01/22 560,000 462,605
Detroit Metro Airport--4.875% due 12/01/23 750,000 616,283
St. Paul HRA--5.600% due 10/01/24 500,000 454,750
Golden Valley MN Rev.--5.500% due 12/01/25 350,000 301,669
-----------
Total municipal bonds (cost $14,689,285) 14,617,413
-----------
Total--100% (cost $17,073,234) $17,268,412
===========
</TABLE>

See accompanying notes to financial statements.

<PAGE> 15

SAMARNAN
INVESTMENT CORPORATION
Selected per Share Data and Ratios
For Each of the Years in the Five-Year Period Ended
December 31, 1999

<TABLE>
<CAPTION>
Per share data 1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Investment income - interest $ .75 $ .81 $ .82 $ .82 $ .86
Expenses (.10) (.10) (.08) (.08) (.07)
---------- ---------- ---------- ---------- ----------
Net investment income .65 .71 .74 .74 .79

Net realized and unrealized gains
(losses) on investments (.71) .15 .30 (.16) .52
Dividends from net investment income (.67) (.71) (.75) (.71) (.74)
Distributions from net realized
long-term gains on securities -- -- -- (.01) (.01)
---------- ---------- ---------- ---------- ----------
Net increase (decrease) in
net asset value (.73) .15 .29 (.14) .56
Net asset value:
Beginning of period 15.55 15.40 15.11 15.25 14.69
---------- ---------- ---------- ---------- ----------
End of period $ 14.82 $ 15.55 $ 15.40 $ 15.11 $ 15.25
========== ========== ========== ========== ==========
Ratios

Expenses to average net assets .70 .66 .66 .51 .49
Investment income from operations
to average net assets 5.03 5.22 5.22 5.45 5.74
Portfolio turnover 34.00 29.00 23.72 19.05 28.20
========== ========== ========== ========== ==========
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> 16

[SAMARNAN INVESTMENT CORPORATION LETTERHEAD]

BOARD OF DIRECTORS

Nancy Walls Devaney
Joe Monteleone
Martha Walls Murdoch
Steve Sikes
Roland Walden
Sam Walls, Chairman
Tommy Yater

OFFICERS

Sam Walls, President
Jerry Wheatley, Secretary/Treasurer

CUSTODIAN

Westwood Trust
300 Crescent Court, Suite 1300
Dallas, Texas 75201

LEGAL COUNSEL

Richard S. Whitesell, Jr.
4211 Arcady
Dallas, Texas 75205

INDEPENDENT AUDITORS

Cheshier & Fuller, L.L.P.
14175 Proton Road
Dallas, Texas 75244

INVESTMENT ADVISORS

Voyageur Asset Management LLC
90 South Seventh Street, Suite 4300
Minneapolis, Minnesota 55402

Westwood Management Corp.
300 Crescent Court, Suite 1300
Dallas, Texas 75201

ANNUAL MEETING

The Annual Meeting of Shareholders of Samarnan Investment Corporation will be
held April 25, 2000, at 10:30 AM, in the Bellevue Room I, Twelfth Floor, The
Fort Worth Club Building, 306 West Seventh Street, Fort Worth, Texas.

SAMARNAN INVESTMENT CORPORATION is registered under the Investment Act of 1940
as a diversified, closed end management company.