<PAGE> 1
SCIOTO INVESTMENT COMPANY
C/O 4561 LANES END ST., COLUMBUS, OHIO 43220
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS:
The accompanying Scioto Investment Company unaudited condensed financial
statements for the six month periods ended June 30, 1996, 1995, and 1994, have
been compiled by management in accordance with the instructions for interim
financial reporting of the Securities and Exchange Commission and do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements.
These compilations should be read in conjunction with the Company's annual
audited financial statements and the notes thereto included in the previously
released Annual Reports to shareholders and the Securities and Exchange
Commission for the years ended December 31, 1995, 1994, and 1993.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation of the
financial information have been included herein. A schedule of the portfolio
positions as of June 30, 1996, and a summary of the Annual Meeting of
Shareholders are included herewith. A schedule of investments as of December 31,
1995, was included in the Company's Annual Report for 1995.
Respectfully submitted,
SCIOTO INVESTMENT COMPANY
/s/ Stephen Kellough
--------------------
Stephen Kellough, Chairman and President
<TABLE>
<CAPTION>
UNAUDITED CONDENSED STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30
------------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
ASSETS:
Investments in tax exempt bonds, at quoted market
values (amortized cost: 1996, $6,711,366;
1995, $7,140,106; 1994, $7,294,085) $6,699,363 $7,168,547 $7,319,737
Cash and cash equivalents 1,143,955 446,992 236,103
Securities redemption receivable 0 0 30,000
Accrued interest receivable 37,489 47,424 59,746
Prepaid expenses 283 283 166
---------- ---------- ----------
TOTAL ASSETS 7,881,090 7,663,246 7,645,752
---------- ---------- ----------
LIABILITIES:
Payable for investment purchased 260,343 0 0
Accrued professional and transfer agent fees 19,913 37,430 22,758
---------- ---------- ----------
TOTAL LIABILITIES 280,256 37,430 22,758
---------- ---------- ----------
NET ASSETS (net asset value per common share,
based upon 447,950 common shares outstanding:
1996, $16.97; 1995, $17.02; 1994, $17.02) $7,600,834 $7,625,816 $7,622,994
========== ========== ==========
</TABLE>
<PAGE> 2
SCIOTO INVESTMENT COMPANY
C/O 4561 LANES END ST., COLUMBUS, OHIO 43220
<TABLE>
<CAPTION>
UNAUDITED CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30
--------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
INVESTMENT INCOME - Nontaxable interest income,
net of bond premium amortization and discount
accretion of $10,957 in 1996; $21,999 in 1995; and
$14,198 in 1994 $ 160,057 $ 166,862 $ 175,157
--------- --------- ---------
OPERATING EXPENSES:
Professional services 29,731 31,381 37,066
Directors' fees 4,500 4,000 4,000
Other expenses 6,121 4,953 3,723
--------- --------- ---------
TOTAL OPERATING EXPENSES 40,352 40,334 44,789
--------- --------- ---------
NET INVESTMENT INCOME 119,705 126,528 130,368
NET GAIN (LOSS) ON INVESTMENTS:
Unrealized appreciation (depreciation) of investments (55,165) 52,592 (130,497)
--------- --------- ---------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS $ 64,540 $ 179,120 $ (129)
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
UNAUDITED CONDENSED STATEMENTS OF CRANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30
----------------------------------
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
RESULTING FROM OPERATIONS:
Net investment income $ 119,705 $ 126,528 $ 130,368
Unrealized appreciation (depreciation) of investments (55,165) 52,592 (130,497)
----------- ----------- -----------
TOTAL INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 64,540 179,120 (129)
DIVIDENDS TO SHAREHOLDERS FROM NET
INVESTMENT INCOME (116,467) (134,385) (138,864)
----------- ----------- -----------
NET INCREASE (DECREASE) IN NET ASSETS (51,927) 44,735 (138,993)
NET ASSETS, BEGINNING OF PERIOD 7,652,761 7,581,081 7,761,987
----------- ----------- -----------
NET ASSETS, END OF PERIOD, including undistributed
net investment income of $188,385, $171,543, and
$169,336 respectively $ 7,600,834 $ 7,625,816 $ 7,622,994
=========== =========== ===========
</TABLE>
<PAGE> 3
[THE OHIO COMPANY LOGO] Period Ending
June 28, 1996
------------------------------------------------------
SCIOTO INVESTMENT CO.
C/O 4561 LANES END ST.
PORTFOLIO POSITIONS
Non-Taxable Investments
<TABLE>
<CAPTION>
Symbol Current Est
Quantity Description Or Market Market Yield Annual
Cusip Price Value (%) Income
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Municipal Bonds and Notes
150,000 BELMONT CO OHIO VAR PURP 3.55% 12/01/1997 080257-DL-9 99.323 148,985 3.57 5,325
150,000 BLUE ASH OHIO LTGO-RD IMPT 4.45% 11/01/1997 095239-FR-5 100.828 151,242 4.41 6,675
115,000 CANTON OH WTRWKS SYS IMPT 5.00% 12/01/1998 138429-FA-8 101.251 116,439 4.94 5,750
300,000 COLUMBUS OH CSD RFDG B/E 4.45% 12/01/1998 199507-UJ-1 100.000 300,000 4.45 13,350
300,000 CUYAHOGA CO OHIO LTGO B/E 4.10% 11/15/1998 232237-5C-7 99.458 298,374 4.12 12,300
250,000 DELAWARE CO OHIO LTGO B/E 4.45% 12/01/1997 245869-AG-7 100.451 251,128 4.43 11,125
500,000 DUBLIN OH CSD UT GO 5% 12/01/1996 26371G-AK-6 100.486 502,430 4.98 25,000
500,000 DUBLIN OH CSD UT GO BDS 4.65% 12/01/1997 26371G-BB-5 100.837 504,185 4.61 23,250
145,000 FLAT ROCK MICH. I.D.R. 5 3/8% 09/01/1997 338647-AD-3 100.188 145,273 5.36 7,794
100,000 GRANDVIEW HTS OH CSD BED 7 1/2% 12/01/1997 386694-BM-4 104.645 104,645 7.17 7,500
200,000 HAMILTON CO OH CNTY BLDG 6.10% 12/01/1996 40727E-JD-0 100.899 201,798 6.05 12,200
400,000 HILLIARD OH CSD SER A B/E 3.90% 12/01/1998 431621-EJ-6 98.970 395,880 3.94 15,600
300,000 HILLIARD OH CSD SER A B/E 4.00% 12/01/1999 431621-EK-3 98.175 294,525 4.07 12,000
150,000 LOCKLAND OH CSD SCH IMPT 9.70% 12/01/1996 539838-BC-S 102.493 153,740 9.46 14,550
180,000 LUCAS CO. OH. IMP. REV. BD 5 1/4% 02/01/1998 549307-AA-4 100.127 180,229 5.24 9,450
100,000 MONTGOMERY CO OH WASTE B/E 4.10% 11/01/1998 613551-AC-4 99.223 99,223 4.13 4,100
700,000 OH ST FACS VERN RIFFE - A 4% 10/01/1998 67755A-CV-3 99.461 696,227 4.02 28,000
400,000 OHIO ST HIGHER ED SER II-A 5.30% 12/01/1997 677597-GG-5 101.731 406,924 5.21 21,200
200,000 OH ST UNIV GEN RCPTS-A-2 4.55% 12/01/1996 677653-SA-6 100.244 200,488 4.54 9,100
300,000 SPRINGBORO CMNTY CSD OHIO 3.80% 12/01/1998 85022K-AV-2 98.516 295,548 3.86 11,400
200,000 TOLEDO OHIO WTRWKS REV B/E 4 1/4% 11/15/1998 889396-HD-2 99.347 198,694 4.28 8,500
100,000 UPPER ARLINGTON OH LT GO-A 5.70% 12/01/1996 915489-HB-7 100.889 100,889 5.65 5,700
600,000 UPPER ARLINGTON OH CSD 3.80% 12/01/1998 915506-HQ-5 98.516 591,096 3.86 22,800
100,000 WORTHINGTON OH CSD UT GO 6.10% 12/01/1996 982038-EM-9 101.058 101,058 6.04 6,100
---------- --------
Total $6,439,020 $298,769
Total Mon-Taxable Investments $6,439,020 $298,769
Add nontaxable bond investment - trade date June 27, 1996; settlement
date July 2, 1996:
250,000 SPRINGFIELD OH LSD IMPT UT 6 1/8% 12/01/1998 851188-DH-2 104.137 260,343 15,313
---------- ---------- --------
$6,690,000 $6,699,363 $314,082
========== ========== ========
</TABLE>
The equivalent net asset value at December 31, 1976, the first year
end as a regulated investment company, was $7,496,443, compared to
$7,600,834 at June 30,1996.
<PAGE> 4
SUMMARY OF ANNUAL MEETING OF SHAREHOLDERS
The Company held its 1996 Annual Meeting of Shareholders June 6, 1996. At
the meeting, shareholders represented, in person and by proxy, were as follows:
of the 108,800 Class A common shares outstanding (one vote per share), a total
of 81,193 were represented; and of the 339,150 Class B common shares
outstanding (ten votes per share), a total of 339,150 were represented;
therefore, 420,343 of the common shares representing approximately 99.2% of the
total voting power of the Company were represented at the meeting (3,472,693
votes out of a possible 3,500,300).
A resolution fixing the number of Directors at six passed with 3,472,483
votes FOR the resolution, 100 votes AGAINST, and 110 votes ABSTAINING.
The following persons were elected as members of the Company's Board of
Directors to serve until the annual meeting following their election or until
their successors are duly elected and qualified. Each person received the number
of votes FOR indicated below.
<TABLE>
<CAPTION>
Name Votes For
---- ---------
<S> <C>
Stephen Kellough 3,472,693
Marilyn Brown Kellough 3,472,693
Arthur D. Herrmann 3,472,693
Brooks P. Julian 3,472,693
Donald C. Fanta 3,472,693
Kent K. Rinker 3,472,693
</TABLE>
A resolution to ratify the selection of Deloitte & Touche LLP as
independent accountants for the Company for the 1996 calendar year passed with
3,472,693 votes FOR, no votes AGAINST, and no votes to ABSTAIN.
