Adhia Funds, Inc.
Adhia Twenty Fund - Annual Report
Dear Shareholder:
We are pleased to present our first annual report for the Adhia Twenty Fund.
This report covers the twelve month period from January 1, 1999 through
December 31, 1999. For this twelve month period, Adhia Twenty Fund has posted
a gain of 29.82% compared to a 21.04% return on the Standard and Poor's 500.
The gain leaders for Adhia Twenty Fund were Oracle Corp. (ORCL), Intuit,
Inc.(INTU), Amgen, Inc. (AMGN) with returns of 289%, 163%, and 112%
respectively. Oracle is the world's second largest software company. It
provides software products for information management, and also provides
consulting services. Current explosion in E-commerce and internet has brought
a whole new market for the company. Intuit has developed a niche in the
financial and tax software market. The company has successfully developed
software for small businesses and personal use - Quicken, Quickbooks,
Turbo-tax, etc. Intuit's internet strategy and cross-selling of financial
services products makes this company very attractive. Amgen has been a leader
in biotechnology research. With the application of computer for modeling and
finding new drugs, and expedite filing of documents with the FDA, we expect
the speed of new drugs into the market to be faster, and expect Amgen to lead
the way in biotechnology. We consider Amgen to be an attractive long-term
investment.
Our loss leaders were CompUSA, Inc (CPU), Albertsons (ABS), and HealthSouth
Corporation (HRC). CompUSA operates computer superstores in USA. It got hurt
by falling per unit prices, and loss of sales to corporate, education customers
and the government. Its faces stiff competition on the internet, though it
sells on the Internet itself. Albertsons results were hurt by delay in
achieving operation synergy with its current acquisition. HealthSouth provides
outpatient surgery and rehabilitative services. Its future dimmed by a
decrease in Medicare reimbursement rates. The fund is planning to dispose off
all these loss leaders within the next few months during upswing of these
stocks.
Outlook for the next millennium:
We believe that the US economy will continue to exhibit slower growth along
with a little help from the Federal Reserve. International markets seem to
have regained stability, and in some cases, even strength. These factors
favor the multinational companies, and cyclic sectors like Pulp and Paper.
Our fund will be looking to invest in companies that represent these sectors.
Our fund has avoided the high flying internet stocks, most of which have come
down after their initial offering. However, we will keep an eye on solid
Internet companies like Yahoo. The 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 twelve months, and look forward
to your continued participation in Adhia Twenty Fund.
/S/ Hitesh P. Adhia
President
<PAGE>
Adhia Funds, Inc.
Adhia Twenty Fund - Annual Report
Statement of Assets and Liabilities
As of December 31, 1999
ASSETS:
Investment in Securities $ 139,073.10
Cash at Fidelity Reserve 172,237.87
Receivable from Advisors 3,887.31
Prepaid Insurance 541.00
Total Assets $ 315,739.28
LIABILITIES:
Accrued Expense 3,250.33
Total Liabilities 3,250.33
NET ASSETS:
Net Assets (equivalent to $11.61 per share
issued based on 26,909.21 Shares
of Capital Stock outstanding) (Note V) 312,488.95
Total Liabilities and Net Assets $ 315,739.28
CALCULATION OF NET ASSETS
Offering and Redemption Price Per Share
($312,488.95 / 26,909.212 Shares Outstanding) $11.61
Attached Notes Are Integral Part of Financial Statements Page 2
<PAGE>
Adhia Funds, Inc.
Adhia Twenty Fund - Annual Report
Statement of Operations
For the Twelve Months Ended December 31, 1999
INVESTMENT INCOME:
Dividends $ 504.00
Interest 3,441.69
Total Income $3,945.69
EXPENSES:
Director Fees 400.00
Licenses and Permits 445.00
Printing & Reproduction 721.76
Transfer Agent Services 3,750.33
Professional Fees 2,500.00
Other Expenses 128.66
Management Fees 1,652.00
Operating Expenses $9,597.75
Less: Expense Reimbursement (5,539.31)
Total Expenses $4,058.44
INVESTMENT INCOME/(LOSS) - NET (112.75)
NET REALIZED GAIN ON INVESTMENTS 20,108.01
CHANGE IN UNREALIZEDAPPRECIATION
OF INVESTMENTS FOR THE YEAR 28,232.75
NET GAIN ON INVESTMENTS 48,340.76
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $48,228.01
Attached Notes Are Integral Part of Financial Statements Page 3
<PAGE>
Adhia Funds, Inc.
Adhia Twenty Fund - Annual Report
Statement of Changes in Net Assets
For the Years Ended December 31, 1999 and 1998
1999 1998
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS
Investment Income (Loss) - Net ($112.75) $624.04
Net Realized Gain (Loss) on
Investments 20,108.01 (341.32)
Change in Unrealized
Appreciation on Investments 28,232.75 (3,021.78)
Net Increase (Decrease) in Net
Assets Resulting from
Operations 48,228.01 (2,739.06)
PROCEEDS FROM SHARES ISSUED 152,000.00 115,000.00
TOTAL INCREASE 200,228.01 112,260.94
NET ASSETS AT THE BEGINNING OF
THE PERIOD 112,260.94 0.00
NET ASSETS AT THE END OF THE PERIOD $312,488.95 $112,260.94
Attached Notes Are Integral Part of Financial Statements Page 4
<PAGE>
Adhia Funds, Inc.
Adhia Twenty Fund - Annual Report
Schedule of Investments As of December 31, 1999
Security Shares Cost Basis Market Value
Common Stocks
2.4% Banking
BANK AMERICA CORP 150 $8,467.40 $7,528.20
5.1% Communication and Equipment
A T & T CORP COM 100 5,283.70 5,081.30
CISCO SYSTEMS INC COM 100 5,189.95 10,712.50
0.9% Computer and Electronics
COMPAQ COMPUTER CORP COM 100 2,314.95 2,706.30
11.1% Software and Services
INTUIT 300 6,902.45 17,981.40
ORACLE CORP COM 150 2,576.22 16,809.45
13.4% Health Care
AMGEN INC COM 100 6,114.95 12,012.60
BOSTON SCIENTIFIC CORPORATION 400 9,154.90 8,750.00
GENZYME GENERAL CORPORATION 200 7,164.95 9,000.00
HEALTHSOUTH CORP COM 200 3,202.45 1,075.00
MCKESSON CORPORATION 200 5,814.95 4,500.00
PFIZER INC 200 6,714.95 6,487.60
3.9% Retail and Consumer Products
ALBERTSONS INC COM 200 9,179.90 6,450.00
COMP U S A INC COM 300 5,227.45 1,518.90
OFFICEMAX INC COM 400 4,017.40 2,175.20
K MART CORP COM 200 3,364.95 2,012.60
5.2% Chemicals and Industrial
COOPER TIRE & RUBBER CO COM 400 7,892.40 6,300.00
AIR PRODUCTS 300 8,564.95 10,068.90
2.5% Transportation and Travel
MANDALAY RESORT GROUP COM 200 3,559.97 4,025.00
U A L CORP COM 50 3,152.45 3,878.15
44.5% Total Common Stocks $113,861.29 $139,073.10
Total Investment in Securities $113,861.29 $139,073.10
55.1% Total Cash at Fidelity Cash Reserve $172,237.87 $172,237.87
0.4% Other Assets $1,177.98
100% Net Asset $286,099.16 $312,488.95
Attached Notes Are Integral Part of Financial Statements Page 5
<PAGE>
Adhia Funds, Inc.
Adhia Twenty Fund - Annual Report
Schedule of Investments As of December 31, 1999
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. Cost amounts, as reported on the schedule of
investments, are substantially the same for Federal income tax purposes.
(b) Net realized gains and losses on common stock are computed on the
identified cost basis.
(c) Provision has not been made for Federal income taxes since the Fund has
elected to be taxed as a "regulated investment company" and 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 a regulated investment company.
(d) Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis.
(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.
<PAGE>
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 2 1/2% which is the lowest limitation imposed by state
securities administrators, the Advisor will reimburse the Fund for the
amount of such excess. For the period ended December 31, 1999, the Advisor
waived advisory fees in the amount of $ 1,652. Additionally, the Advisor will
be reimbursing the Fund for excess expenses in the amount of $3,887.31 which
makes a total advisor reimbursement of $5,539.31.
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 December 31, 1999, purchases and proceeds of
sales of investment securities were $118,928.65 and $77,644.05 respectively
for common stock.
V. Capital Stock:
Capital Stock, is composed of Common Stock 500,000,000 Shares Authorized and
26,909.21 issued at $.001 par value. Net Assets are composed of Capital
Stocks Investment Plus Accumulated Net Investment Income, Plus Accumulated
Realized Gain on Investments, Plus Change in Unrealized Appreciation of
Investments Net of Distributions to Stockholders.
FINANCIAL HIGHLIGHTS
Per share income and capital changes for a share outstanding throughout
the period as follows:
1999 1998
Net assets value at beginning of the year $9.70 $10.00
Income Loss From Operation:
Net investment Income (Loss) (a) <2.26> <0.01>
Net realized gain (loss) (b) 1.74 <0.03>
Net unrealized gain (loss) (b) 2.43 <0.26>
Net Assets value at end of year (c) $11.61 $9.70
(a) This amount has been adjusted for changed in the average number of
stocks outstanding throughout the period.
(b) Computer using the number of shares outstanding at the beginning
of the period 11,577.58 and 11,500 shares for 1999 and 1998 respectively.
(c) Computed using the number of shares outstanding at the end of the period
26,909.21 and 11,577.58 for 1999 and 1998 respectively.
<PAGE>
Independent Auditor's Report
The Board of Directors and Shareholders
Adhia Funds, Inc.
Adhia Twenty Fund Portfolio
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of The Adhia Funds, Inc. -Adhia Twenty Fund
Portfolio, as of December 31, 1999 and the related statements of operations for
the year then ended, the statements of changes in net assets and the
financial highlights for each of the two years in period then ended. These
financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements and
financial highlights are free from 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 investments
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 audits provide 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
Adhia Funds Inc. - Adhia Twenty Portfolio at December 31, 1999,
the results of its operations for the year then ended,
the changes in their net assets and the financial highlights for
the period then ended in conformity with accounting principles
generally accepted in the United States.
Alan K. Geer, CPA, PA
Tampa, Florida
February 26, 2000
<PAGE>
Adhia Funds, Inc.
Adhia Twenty Fund - Annual Report
Management Office
1311 N. Westshore Blvd., Suite 110
Tampa, FL 33607
Phone: (813) 289-8440
Fax: (813) 289-8849
Board of Directors
Hitesh (John) P. Adhia
Dr. Thomas L. Wheelen
Pravin D. Patel
Anil D. Amlani
Investment Advisors
Adhia Investment Advisors, Inc.
1311 N. Westshore Blvd., Suite 110
Tampa, FL 33607
Phone: (813) 289-8440
Fax: (813)289-8849
Transfer Agent and Dividend Disbursing Agent
Fund Services, Inc.
1500 Forest Avenue, Suite 111
Richmond, VA 23229
Phone: (800) 627 8172
Fax: (804) 628-4077
Independent Auditors
Alan K. Geer, CPA, PA
7401 D Temple Terrace Highway
Temple Terrace, FL 33637
