SEMIANNUAL REPORT JUNE 30, 1999
Adhia Funds, Inc. - Adhia Twenty Fund
Discussion of Fund Performance
Dear Shareholder:
We are pleased to present this semiannual report for Adhia
Twenty Fund, covering the six-month period from January 1, 1999
through June 30, 1999. For this six month period Adhia Twenty
Fund produced a return of 19.71% compared to return of 11.99% on
Standard & Poor's 500.
Semiconductor manufacturer were the leader in our gains for the
first half of 1999. LSI Logic and Atmel Semiconductors both posted over
80% gain over our purchase price. We believe growth in
networking and telecommunication industry helps both of these
leaders of specialty chips manufacturer.
Also, Adhia Twenty Fund posted reasonable gains on its bet on
cyclic Chemical industry stocks. All of our positions in
Chemical industry - Air Products, Cytec Industry, and Dexter were
disposed off during May. We believed additional gains in these
stocks did not justify the risk.
Our loss leaders for the six months were Humana, Inc., CompUSA.
Humana's HMO business has been hurt substantially by increase in
hospital reimbursement rates and out of control pharmaceutical
expenses. We have sold all our position in Humana because it at
this time it did not fit the Fund's overall strategy. CompUSA
got hurt by falling per unit price of Computer System and
competition from the Internet based distributors. We believe at
current price, the stock is undervalued. Also, CompUSA will be
successful in changing its business model to respond to its
current down cycle. Fund still holds its full position in
CompUSA.
Outlook for the Balance of 1999:
We believe that US economy will continue to exhibit a slower
growth. International markets seemed to have regained stability
and in some cases, even strength. These factors should broaden
the US market gains in cyclic sectors. Our Fund has avoided
most of the market favorite Internet stocks.
On the other hand, pharmaceutical sector has shown buying
opportunities. We will continue to strive to target combination
of growth stocks with reasonable market multiples.
We appreciate your confidence over the past six months, and we
look forward to your continued participation in Adhia Twenty
Fund.
Sincerely,
/S/ Hitesh (John) P. Adhia, CPA, President
Monday, August 09, 1999
Adhia Funds, Inc.
Adhia Twenty Fund
Statement of Assets and Liabilities
As of June 30, 1999 (Unaudited)
ASSETS:
Cash at Fidelity Reserve $66,029.78
Investment in Securities 80,371.88
Receivable for investments Sold 1,247.50
Interest/Dividend Receivable 8.47
Total Assets 147,657.63
LIABILITIES
Accrued Expense 392.27
Total Liabilities
NET ASSETS:
Capital Stock, $0.0001 par Value; 124,260.94
500,000,000 Authorized and 12,674.65 issued.
Net Unrealized Appreciation on Investments 16,310.81
Accumulated Net Realized Gains on Investments 6,693.61
Net Assets 147,265.36
Total Liabilities and Net Assets 147,657.63
CALCULATION OF NET ASSETS
Offering and Redemption Price Per Share
($147,265.36 / 12,674.65 Shares Outstanding) $11.62
Attached Notes Are Integral Part of Financial Statements.
Page 2
Adhia Funds, Inc.
Adhia Twenty Fund
Statement of Operations
For the Six Months Ended June 30, 1999 (Unaudited)
INCOME:
Dividend $204.00
Interest 1,319.32
Total Income $1,523.32
EXPENSES:
Director Fees 400.00
Licenses and Permits 345.00
Printing & Reproduction 427.50
Professional Fees 392.00
Management Fees 627.87
Total Operating Expenses before 2,192.37
Less: Subsidized by Investment Advisors (627.87)
Net 1,564.50
NET INVESTMENT INCOME/(LOSS) (41.18)
NET REALIZED GAIN ON INVESTMENT 6,734.79
NET INCREASE IN UNREALIZED APPRECIATION ON INVESTMENT 13,296.49
NET GAIN ON INVESTMENT 20,031.28
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 19,990.10
Attached Notes Are Integral Part of Financial Statements.
Page 3
Adhia Funds, Inc.
Adhia Twenty Fund
Statement of Operations
For the Six Months Ended June 30, 1999 (Unaudited)
OPERATIONS:
Net Investment Income (Loss) ($41.18)
Net Realized Gain (Loss) on Investments 6,734.79
Net Increase (Decrease) in Unrealized 16,310.81
Appreciation on Investments
Net Increase (Decrease) in Net Assets 23,004.42
Resulting from Operations
FUND SHARE ACTIVITIES:
Proceeds from Shares Issued 12,000.00
Net Assets Value of Shares Issued in Distribution 0.00
Costs of Shares Redeemed 0.00
Net Increase in Net Assets Derived from 12,000.00
Fund Share Activities
TOTAL INCREASE 35,004.42
NET ASSETS AT THE BEGINNING OF THE PERIOD 112,260.94
NET ASSETS AT THE END OF THE PERIOD 147,265.36
Attached Notes Are Integral Part of Financial Statements.
Page 4
Adhia Funds, Inc.
Adhia Twenty Fund
Schedule of Investments
As of June 30, 1999 (Unaudited)
Security Shares Cost Basis Market Value
Common Stocks
2.5%Banking
BANKAMERICA CORP 50 3,062.45 3,665.63
8.2%Communication and Equipment
A T & T CORP COM 100 5,283.70 5,581.25
CISCO SYSTEMS INC COM 100 5,189.95 6,450.00
17.1%Computer and Electronics
ATMEL CORP COM 300 3,952.45 7,856.25
COMPAQ COMPUTER CORP 100 2,314.95 2,368.75
LSI Logic 200 4,589.95 9,225.00
ORACLE CORP COM 150 2,576.22 5,568.75
6.2%Health Care
AMGEN INC COM 100 6,114.95 6,087.50
HEALTHSOUTH CORP COM 200 3,202.45 2,975.00
10.6%Retail and Consumer Products
ALBERTSONS INC COM 100 5,014.95 5,156.25
COMP U S A INC COM 300 5,227.45 2,231.25
OFFICEMAX INC COM 400 4,017.40 4,800.00
K MART CORP COM 200 3,364.95 3,300.00
5.2%Industrial and Manufacturing
COOPER TIRE & RUBBER 200 4,377.45 4,725.00
HON INDUSTRIES INC 100 2,089.95 2,918.75
5.1%Transporation and Travel
MANDALAY RESORT GROUP 200 3,559.97 4,237.50
U A L CORP COM 50 3,152.45 3,231.25
54.9% Total Common Stocks 67,081.64 80,378.13
Short Term Investment
45.1% Fidelity Cash Reserve 66,029.78 66,029.78
45.1% Total Short Term Investment 66,029.78 66,029.78
100%Total Assets 133,111.42 146,407.91
Attached Notes Are Integral Part of Financial Statements.
Page 5
Notes to Financial Statements
I Significant Accounting Policies:
The following is a summary of significant accounting polices of
the Adhia Twenty Fund (the "Fund"), a portfolio of the Adhia
Funds, Inc. (the "Company") which is an open-end
non-diversified management investment company registered under
the Investment Company Act of 1940 (the "1940 Act"). The
Company was incorporated under the laws of Maryland on January
27, 1998, and the Registration was effective January 1, 1999.
The Fund's investment objective is to seek capital appreciation
through investment in an average of about twenty different
stocks.
(a) Each security is valued at the last sale price reported by
the principal security exchange on which the issue is traded.
Securities for which quotations are not readily available are
valued at fair value as determined by the investment adviser
under the supervision of the Board of Directors. short-term
investment are valued at amortized costs which approximates
quoted market value. For financial reporting purposes,
investment transactions are recorded on trade date. Costs
amounts, as reported on the schedule of investments, are
substantially the same for Federal income tax purposes.
(b) Net realized gains and looses on common stock are computed
on the identified costs basis.
(c) Provision has not been made for Federal income taxes since
the Fund has elected to be taxed as a "regulated investment
company" as intends to distribute substantially all net
investment company taxable income and net capital gains to its
shareholders and otherwise comply with the provisions of the
Internal Revenue Code applicable to regulated investment company.
(d) Dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis.
Page 6
(f) Generally accepted accounting principles require that
permanent differences between income for financial reporting and
tax purposes be reclassified in the capital accounts.
(g) 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 disclosures 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 these estimates.
II Fund Advisor:
The Fund has an agreement with Adhia Investment Advisors, Inc.
(the "Advisor"), with whom certain officers and directors of
Adhia Funds, Inc. are affiliated, to furnish investment advisory
services to the Fund. Under the terms of this agreement, the
Fund will pay the Advisor a monthly fee based on the Fund's
average daily net assets at the annual rate of 1.00%. Under the
investment advisory agreement, if the aggregate annual operating
expenses (including the investment advisory fee and the
administration fee but excluding interest, taxes, brokerage
commissions and other costs incurred in connection with the
purchase or sale of portfolio securities and extraordinary
items) exceed the lowest limitation imposed by state securities
administrators, the Advisor will reimburse the Fund for the
amount of such excess. For the period ended June 30, 1999,
Advisor waived advisory fees in the amount of $628.
III Organization Costs:
Organizational costs and initial registration expenses are paid
by the sponsor and Advisor Adhia Investment Advisors, Inc.
IV. Investment Transactions:
For the period ended June 30, 1999, purchases and proceeds of
sales of investment securities were $61,517 and $53,638
respectively.
Page 7
[ARTICLE] 6
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] DEC-31-1999
[PERIOD-END] JUN-30-1999
[INVESTMENTS-AT-COST] 133,111
[INVESTMENTS-AT-VALUE] 146,410
[RECEIVABLES] 1,248
[ASSETS-OTHER] 0
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 147,658
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 392
[TOTAL-LIABILITIES] 392
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 124,261
[SHARES-COMMON-STOCK] 0
[SHARES-COMMON-PRIOR] 0
[ACCUMULATED-NII-CURRENT] 0
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 6,694
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 16,310
[NET-ASSETS] 147,265
[DIVIDEND-INCOME] 204
[INTEREST-INCOME] 1,319
[OTHER-INCOME] 0
[EXPENSES-NET] 1,565
[NET-INVESTMENT-INCOME] (41)
[REALIZED-GAINS-CURRENT] 6,735
[APPREC-INCREASE-CURRENT] 13,296
[NET-CHANGE-FROM-OPS] 0
[EQUALIZATION] 0
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] 0
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 1,097
[NUMBER-OF-SHARES-REDEEMED] 0
[SHARES-REINVESTED] 0
[NET-CHANGE-IN-ASSETS] 35,004
[ACCUMULATED-NII-PRIOR] 0
[ACCUMULATED-GAINS-PRIOR] 0
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 628
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 2,192
[AVERAGE-NET-ASSETS] 125,574
[PER-SHARE-NAV-BEGIN] 9.69
[PER-SHARE-NII] 0
[PER-SHARE-GAIN-APPREC] 1.93
[PER-SHARE-DIVIDEND] 0
[PER-SHARE-DISTRIBUTIONS] 0
[RETURNS-OF-CAPITAL] 0
[PER-SHARE-NAV-END] 11.62
[EXPENSE-RATIO] 2.49
</TABLE>
