<PAGE> 1
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INVESTMENT ADVISER AND MANAGER
Cardinal Management Corp.
155 East Broad Street
Columbus, Ohio 43215
DISTRIBUTOR
The Ohio Company
155 East Broad Street
Columbus, Ohio 43215
TRANSFER AGENT AND DIVIDEND PAYING AGENT
Cardinal Management Corp.
215 East Capital Street
Columbus, Ohio 43215
CUSTODIAN
The Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, Ohio 45263
LEGAL COUNSEL
Baker & Hostetler
65 East State Street
Columbus, Ohio 43215
INDEPENDENT AUDITORS
KPMG Peat Marwick LLP
Two Nationwide Plaza
Columbus, Ohio 43215
------------------------
This report has been prepared for the information of shareholders of Cardinal
Aggressive Growth Fund and is not authorized for distribution to prospective
investors unless preceded or accompanied by an effective Prospectus.
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CARDINAL
AGGRESSIVE
GROWTH
FUND
-------------------------
ANNUAL REPORT
-------------------------
SEPTEMBER 30, 1995
(LOGO)*()
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<PAGE> 2
DEAR CARDINAL SHAREHOLDER:
- --------------------------------------------------------------------------------
Thank you for your confidence and investment in the Cardinal Family of Funds. We
appreciate your support and extend a special welcome to all new shareholders. We
are pleased to provide you with our Annual Report for the fiscal year ended
September 30, 1995.
Over the past decade, the mutual fund industry has experienced an unprecedented
level of growth. Between 1984 and 1995, the number of mutual fund shareholders
has increased from approximately 20 million to over 75 million. At The Ohio
Company, we believe that this phenomenal growth rate is attributable to the
special benefits that mutual funds provide, in particular professional
management. A team of professional managers gives every investor access to
full-time experts who evaluate economic trends, monitor the markets and select
individual securities.
What distinguishes our professional portfolio management team? Talent and
experience. The investment professionals responsible for managing the Cardinal
Family of Funds possess, on average, more than seventeen years of investment
experience. Collectively, our team of portfolio managers have guided assets
through bull markets, bear markets and uncertain markets. While each has a
specialized role, our team works together toward one primary goal: To attain
superior investment results according to each fund's investment objective.
We remain committed to providing you with outstanding investment performance and
top quality shareholder services. We look forward to meeting your investment
needs in the years to come and welcome your comments and suggestions.
Sincerely,
<TABLE>
<S> <C>
H. Keith Allen Frank W. Siegel, CFA
Chairman President
</TABLE>
1
<PAGE> 3
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On behalf of the Cardinal Aggressive Growth Fund Trustees and Officers, we
welcome and extend our appreciation to shareholders for their support during
this past year.
As our fiscal year began in October, 1994, the markets were experiencing the
tail end of rising interest rates accompanied by a lackluster stock market.
Earnings on common stock were coming through as anticipated and in many cases
better than expected.
Once interest rates began to decline in the latter part of the year, the stock
market began its rise to record levels. Many companies were experiencing record
earnings, and their stock prices were being elevated to all-time highs. Earnings
multiples outstripped historic levels, and valuations, particularly on smaller
capitalization companies, were being cast to the wind.
Throughout the entire fiscal year, money continued to flow into the markets.
Even as the rotation of industry groups continued and corrections took place,
investors sought to take advantage of minor price pullbacks to establish or add
to positions. This was a common pattern as the year progressed.
In the Fund, we have continued to pursue many smaller capitalization companies,
which we believe have very favorable prospects for growth and appreciation in
the future. Many of these companies are in the technology sectors of the market,
particularly in the communications, business and medical industry sectors. Some
of the stocks which have had the greatest positive impact, on a per share basis,
include MFS Communications, Metricom, Arch Communications, and Optical Data
Corporation.
We believe that both the near term and long term bodes well for technology, as
one views the global markets and the untapped growth that can be achieved
internationally by many of our domestic companies. Growth rates for many of the
companies in the portfolio are in excess of that of the S&P 500 companies.
Correspondingly the price earnings multiples and beta of the portfolio are also
above that of many more mature companies in the marketplace.
While we remain aware that often times fundamentals are often overlooked by
market activity, and volatility is sometimes greater than anticipated, we
continue to follow our basic philosophies which center on stocks that are driven
by strong earnings growth.
H. Keith Allen
Chairman
As Portfolio Manager for Cardinal Aggressive Growth Fund, John Bevilacqua is
primarily responsible for the day-to-day management of the Fund's Portfolio. Mr.
Bevilacqua has 20 years of investment management experience and began his
portfolio management of Cardinal Aggressive Growth Fund this year.
Frank W. Siegel John Bevilacqua
President Vice President
<PAGE> 4
CARDINAL AGGRESSIVE GROWTH FUND
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RETURN ON A $10,000 INVESTMENT
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The Russell 2000 Index is considered to be a broad based market index for the
purpose of this presentation. The value of the Cardinal Aggressive Growth Fund
investment includes the relevant fund expenses and sales load, whereas, the
value of the investment in the Russell 2000 Index does not. Past performance is
not predictive of future performance.
<TABLE>
<CAPTION>
Cardinal Ag-
Measurement Period gressive
(Fiscal Year Covered) Russell 2000 Growth Fund
<S> <C> <C>
30-June-93 10000 9550
30-Sep-93 10870 9999
30-Sep-94 11163 9525
30-Sep-95 13776 11849
</TABLE>
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN*
FOR THE PERIODS ENDING SEPTEMBER
30, 1995:
----------------------------------
SINCE
ONE YEAR JUNE 24,
RETURN 1993**
----------- -------------
<S> <C> <C>
Cardinal Aggressive Growth Fund..................... 18.80% 7.82%
=========== ==============
</TABLE>
* Return includes all relevant fund expenses and sales load.
** Commencement of operations.
3
<PAGE> 5
CARDINAL AGGRESSIVE GROWTH FUND
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STATEMENT OF INVESTMENTS (MARKET VALUE IN THOUSANDS)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
-------- ----------
<S> <C> <C>
COMMON STOCK 79.22%
ADVANCED MEDICAL DEVICES 2.48%
Biomet, Inc.*....................................................... 15,000 $ 259
----------
BIO TECHNOLOGY 6.43%
Alkermes, Inc.*..................................................... 8,000 52
Cytel Corporation*.................................................. 15,000 105
Magainin Pharmaceuticals*........................................... 12,000 131
Matrix Pharmaceuticals*............................................. 14,000 196
Vertex Pharmaceuticals*............................................. 10,000 187
----------
671
----------
BROADLINE RETAILERS 2.66%
Consolidated Stores Corp.*.......................................... 12,000 278
----------
COMMERCIAL SERVICES 1.61%
Medaphis Corporation*............................................... 6,000 168
----------
COMMUNICATIONS 20.49%
Airtouch Communications*............................................ 10,000 306
Arch Communications Group*.......................................... 10,000 262
BroadBand Technologies*............................................. 5,000 108
DSC Communications Corp.*........................................... 4,000 237
General DataComm Industries*........................................ 12,500 184
MFS Communications Co., Inc.*....................................... 9,000 394
Metricom, Inc.*..................................................... 11,000 248
Motorola, Inc....................................................... 3,000 229
Tellabs, Inc.*...................................................... 4,000 169
----------
2,137
----------
COMPUTERS/INFORMATION 5.47%
Compaq Computer Corp.*.............................................. 9,000 435
E M C Corporation*.................................................. 7,500 136
----------
571
----------
CONSUMER SERVICES 4.99%
Banta Corporation................................................... 6,000 255
Block, H&R, Inc..................................................... 7,000 266
----------
521
----------
DIVERSIFIED FINANCIAL SERVICES 3.25%
Bear Stearns Companies, Inc......................................... 15,750 339
----------
EDUCATIONAL 1.45%
Westcott Communications, Inc.*...................................... 10,000 151
----------
</TABLE>
*Non-income producing
(continued)
4
<PAGE> 6
CARDINAL AGGRESSIVE GROWTH FUND
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STATEMENT OF INVESTMENTS (CONTINUED)
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SEPTEMBER 30, 1995
COMMON STOCK (CONTINUED)
<TABLE>
<CAPTION>
FACE/ MARKET
SHARES VALUE
-------- ------------
<S> <C> <C>
ELECTRICAL COMPONENTS 0.92%
GenRad, Inc.*...................................................... 10,000 $ 96
------------
HEALTH-CARE PROVIDERS 4.39%
Humana, Inc.*...................................................... 10,000 201
Mariner Health Group, Inc.*........................................ 5,000 71
Maxicare Healthplans, Inc.*........................................ 10,000 186
------------
458
------------
INTEGRATED OILS 2.32%
Triton Energy Corp.*............................................... 5,000 242
------------
PHARMACEUTICALS 2.87%
Mylan Laboratories, Inc............................................ 15,000 300
------------
SEMICONDUCTORS 11.47%
Advanced Micro Devices*............................................ 9,000 262
Analog Devices, Inc.*.............................................. 8,000 277
Intel Corporation.................................................. 4,500 270
National Semiconductor*............................................ 14,000 387
------------
1,196
------------
SOFTWARE/PROCESSING 8.42%
Computer Sciences Corp.*........................................... 4,500 290
Optical Data Systems Corp.*........................................ 6,000 234
Sybase Incorporated*............................................... 10,000 321
Telescan, Inc.*.................................................... 5,000 34
------------
879
------------
TOTAL COMMON STOCK (COST $7,254,464)............................. 8,266
------------
REPURCHASE AGREEMENTS, FULLY COLLATERALIZED BY U.S. GOVERNMENT
OBLIGATIONS 16.29%
Fifth Third Bank, 5.75%, dated 9/28/95, due 10/02/95............... 1,700,000 1,700
------------
TOTAL REPURCHASE AGREEMENTS (COST $1,700,000).................... 1,700
------------
TOTAL INVESTMENTS (COST $8,954,464) 95.51%....................... $ 9,966
==========
</TABLE>
*Non-income producing
Cost also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
5
<PAGE> 7
CARDINAL AGGRESSIVE GROWTH FUND
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STATEMENT OF ASSETS & LIABILITIES (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $8,954)................................ $ 9,966
Cash............................................................................. 375
Receivable for Fund shares sold.................................................. 125
Dividends receivable............................................................. 6
Interest receivable.............................................................. 1
Deferred organizational cost..................................................... 27
Prepaid expenses................................................................. 7
--------
Total assets................................................................ 10,507
--------
LIABILITIES
Payable for investment securities purchased...................................... 45
Accrued investment management, shareholder service, accounting and transfer agent
fees (note 3).................................................................. 11
Other accrued expenses........................................................... 17
--------
Total liabilities........................................................... 73
--------
COMMITMENTS AND CONTINGENCIES (NOTE 4)
NET ASSETS -- applicable to 843,808 outstanding no par value shares of beneficial
interest (unlimited number of shares authorized)............................... $ 10,434
========
NET ASSET VALUE PER SHARE........................................................ $ 12.37
========
</TABLE>
See accompanying notes to financial statements.
6
<PAGE> 8
CARDINAL AGGRESSIVE GROWTH FUND
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STATEMENT OF OPERATIONS (AMOUNTS IN THOUSANDS)
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YEAR ENDED SEPTEMBER 30, 1995
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends........................................................................ $ 71
Interest......................................................................... 58
--------
Total income......................................................... 129
--------
EXPENSES:
Investment management fees (note 3).............................................. 71
Transfer agent fees and expenses (note 3)........................................ 25
Shareholder service fees (note 3)................................................ 23
Accounting fees (note 3)......................................................... 3
--------
Total affiliated expenses............................................ 122
--------
Custodian fees................................................................... 10
Professional fees................................................................ 23
Reports to shareholders.......................................................... 23
Directors' fees.................................................................. 8
Registration fees................................................................ 14
Other expenses................................................................... 5
Amortization of organizational cost (note 1)..................................... 10
--------
Total non-affiliated expenses........................................ 93
--------
Total expenses....................................................... 215
--------
Net loss from investment activities.................................. (86)
--------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS (NOTE 2):
Net realized gain from security transactions..................................... 999
Increase in unrealized gain on investments....................................... 1,158
--------
Net realized gain and increase in unrealized gain on investments..... 2,157
--------
Net increase in net assets from operations........................... $ 2,071
========
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 9
CARDINAL AGGRESSIVE GROWTH FUND
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STATEMENT OF CHANGES IN NET ASSETS (AMOUNTS IN THOUSANDS)
- --------------------------------------------------------------------------------
YEARS ENDED SEPTEMBER 30, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
-------- -------
<S> <C> <C>
FROM OPERATIONS:
Net loss from investment activities......................................... $ (86) $ (136)
Net realized gain from security transactions................................ 999 118
Increase (decrease) in unrealized gain on investments....................... 1,158 (444)
-------- -------
Net increase (decrease) in net assets from operations..................... 2,071 (462)
-------- -------
FROM DISTRIBUTIONS TO SHAREHOLDERS:
Distribution of net realized gains from security transactions ($0 and $.04
per share, respectively).................................................. 0 (30)
-------- -------
Total distributions to shareholders.................................... 0 (30)
-------- -------
FROM CAPITAL SHARE TRANSACTIONS (NOTE 5):
Proceeds from sale of Fund shares........................................... 1,809 5,108
Net asset value of Fund shares issued in connection with reinvestment of
distributions to shareholders............................................. 0 30
-------- -------
1,809 5,138
Cost of Fund shares redeemed................................................ (2,906) (1,506)
-------- -------
Increase (decrease) in net assets derived from capital share
transactions........................................................... (1,097) 3,632
-------- -------
Net increase in net assets................................................ 974 3,140
NET ASSETS -- beginning of period........................................... 9,460 6,320
-------- -------
NET ASSETS -- end of period (undistributed net investment loss of $113 and
$113, respectively)....................................................... $ 10,434 $ 9,460
======== ======
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 10
CARDINAL AGGRESSIVE GROWTH FUND
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NOTES TO FINANCIAL STATEMENTS
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SEPTEMBER 30, 1995
(1) -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cardinal Aggressive Growth Fund (the "Fund") is one of two portfolios of The
Cardinal Group (the "Group"), a diversified open-end management investment
company established as an Ohio Business Trust on March 23, 1993. The Group
currently consists of Cardinal Aggressive Growth Fund and Cardinal Balanced
Fund. Before June 24, 1993 the Fund had no operations other than those relating
to organizational matters, including the issuance of 5,000 shares of beneficial
interest for cash at $10.00 per share on June 4, 1993 to Cardinal Management
Corp. ("CMC"), the Group's investment adviser. The following is a summary of
significant accounting policies followed by the Fund in preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles for investment companies.
Security Valuation -- Investments listed or traded on a national securities
exchange are valued at the last sale price or, if there has been no recent sale,
at the last bid price. Investments traded in the over-the-counter market are
valued at either the mean between the bid and ask prices or the last sale price.
If no quotations are available, portfolio securities are valued in good faith by
the Board of Trustees to reflect their fair value.
Security Transactions and Investment Income -- Security transactions are
accounted for on the trade date and dividend income is recorded on the
ex-dividend date. Interest income is recorded on the accrual basis and includes,
when applicable, the pro rata amortization of premium or accretion of discount.
In determining the net realized gain or loss on securities sold, the cost of the
securities is determined by the first-in, first-out (FIFO) basis. It is the
Group's policy for its Custodian, or a third-party bank, to take possession of
all securities pledged as collateral for repurchase agreements and monitor the
market value of the collateral to ensure that it remains sufficient to cover the
repurchase agreements.
Deferred Organizational Cost -- Costs incurred with the organization and
registration of the Fund have been deferred and are being amortized on a
straight-line basis over a 60 month period from the commencement of public
offering of its shares. In the event that any of the initial shares of the Fund
are redeemed by the Fund's investment adviser or any subsequent holders thereof
during the 60 month amortization period, the Fund will reduce the redemption
proceeds otherwise payable by any unamortized organizational costs of the Fund
in the same proportion as the number of initial shares of the Fund being
redeemed bears to the number of initial shares of the Fund outstanding at the
time of redemption.
Distributions to Shareholders -- Distributions and dividends will be recorded on
the record date. The Fund intends to declare income dividends quarterly and any
capital gain distributions annually.
Federal Income Tax -- The Fund intends to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to make
sufficient distributions of taxable income and capital gains within the required
time to relieve it from all, or substantially all, Federal income taxes.
(continued)
9
<PAGE> 11
CARDINAL AGGRESSIVE GROWTH FUND
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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SEPTEMBER 30, 1995
(2) -- PURCHASES AND SALES OF SECURITIES
The cost of purchases and proceeds from sales of investment securities
(excluding short-term obligations) during the period ended September 30, 1995
aggregated $6,912,244 and $10,041,187, respectively.
During the period ended September 30, 1995 the Fund realized on a FIFO cost
basis a net capital gain of $999,587 for both book and tax purposes.
As of September 30, 1995, for both book and tax purposes, gross unrealized gains
and gross unrealized losses on investment securities were $1,268,610 and
$257,136, respectively; resulting in a net unrealized gain of $1,011,474.
(3) -- TRANSACTIONS WITH AFFILIATES
As investment adviser for the Fund, CMC, an affiliated company, is allowed an
annual fee of 0.75% of the average daily net assets of the Fund. CMC has agreed
that if the aggregate expenses of the Fund, as defined, for any fiscal year
exceed the expense limitation of any state having jurisdiction over the Fund,
CMC will refund to the Fund, or otherwise bear, such excess. This limitation did
not affect the calculation of the management fee during the period ended
September 30, 1995. CMC also serves the Fund as transfer agent and fund
accountant. Under the terms of the Group's Transfer Agency and Fund Accounting
Agreement, the transfer agent is entitled to receive fees based on a monthly
charge per shareholder account plus out-of-pocket expenses and the fund
accountant is entitled to receive fees based on a percentage of the average net
assets of the Fund. For the period ended September 30, 1995 the Fund paid or
accrued $25,079 and $3,255 for transfer agent and fund accounting services,
respectively.
The Ohio Company ("TOC") serves the Group as distributor. TOC receives fees from
the Fund for providing services under the Distribution and Shareholder Service
Plan (the "Plan") pursuant to Rule 12b-1 of the Investment Company Act of 1940.
Under the Plan, the Fund pays TOC a fee not to exceed, on an accrual basis,
0.25% of the average daily net assets of the Fund for payments it makes to
banks, broker/dealers, including TOC, and other institutions for providing
shareholder services. The Fund paid or accrued shareholder service fees of
$22,594 for the period ended September 30, 1995. The Ohio Company reported to
the Fund that it had received commissions after discounts to dealers from the
sale of shares of the Fund of $54,055 for the period ended September 30, 1995.
(4) -- COMMITMENTS AND CONTINGENCIES
The Fund has an available $2,000,000 line of credit with its custodian, Fifth
Third Bank, which was unused at September 30, 1995. When used, borrowings under
this arrangement are secured by portfolio securities and can be used only for
short term needs of the Fund. No compensating balances are required and the
arrangement bears an interest rate of 106% of the custodian's prime lending
rate.
(continued)
10
<PAGE> 12
CARDINAL AGGRESSIVE GROWTH FUND
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NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
SEPTEMBER 30, 1995
(5) -- CAPITAL STOCK
At September 30, 1995, there were an unlimited number of no par value shares of
capital stock and the capital amounts were as follows:
<TABLE>
<S> <C>
Paid in capital.................................................................. $ 8,618,852
Accumulated net realized gain on investments..................................... 916,812
Unrealized gain on investments................................................... 1,011,474
Undistributed net investment loss................................................ (112,926)
---------------
Net assets....................................................................... $10,434,212
===============
</TABLE>
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
YEARS ENDED
SEPTEMBER 30,
------------------------
1995 1994
--------- ---------
<S> <C> <C>
Shares sold............................................................. 160,511 499,598
Shares issued in connection with reinvestment of distributions to
shareholders.......................................................... 0 2,836
--------- ---------
160,511 502,434
Shares repurchased...................................................... (268,141) (154,659)
--------- ---------
Net increase (decrease)................................................. (107,630) 347,775
Shares outstanding:
Beginning of period..................................................... 951,438 603,663
--------- ---------
End of period........................................................... 843,808 951,438
========= =========
</TABLE>
(6) -- SUBSEQUENT EVENT
On November 13, 1995 the Board of Trustees approved an Agreement and Plan of
Reorganization and Liquidation between the Group and The Cardinal Fund Inc.,
Cardinal Government Securities Trust, Cardinal Tax Exempt Money Trust, and
Cardinal Government Obligations Fund (collectively the "Old Funds"). The plan
calls for the transfer of all assets and liabilities of each of the Old Funds to
newly created series of the Group with the same basic investment objectives and
restrictions. The Trustees have determined that this action is in the best
interests of the shareholders of the Old Funds and the Group. Shareholders of
the Old Funds must approve the transaction before any transfer can take place.
11
<PAGE> 13
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of capital stock outstanding throughout each
period:
<TABLE>
<CAPTION>
PERIOD FROM
YEARS ENDED JUNE 24, 1993*
SEPTEMBER 30, THROUGH
---------------------- SEPTEMBER 30,
1995 1994 1993
-------- -------- ---------------
<S> <C> <C> <C>
Net Asset Value, beginning.............................. $ 9.94 $ 10.47 $ 10.00
-------- -------- ---------------
Income from investment operations:
Net investment loss................................... (0.10) (0.13) (0.03)
Net realized and unrealized gain (loss) on
securities......................................... 2.53 (0.36) 0.50
-------- -------- ---------------
Total from investment operations........................ 2.43 (0.49) 0.47
-------- -------- ---------------
Less distributions:
Capital gain distribution............................. 0 (0.04) 0
-------- -------- ---------------
Total distributions..................................... 0 (0.04) 0
-------- -------- ---------------
Net Asset Value, ending................................. $ 12.37 $ 9.94 $ 10.47
======== ======== ===============
Ratios/Supplemental Data:
Total return (aggregate return for period)**............ 24.35% (4.74%) 4.70%
======== ======== ===============
Net assets, ending (000)................................ $ 10,434 $ 9,460 $ 6,320
======== ======== ===============
Ratio of expenses to average net assets**............... 2.24% 2.51% 0.91%
======== ======== ===============
Ratio of net investment loss to average net assets**.... (0.92%) (1.50%) (0.53%)
======== ======== ===============
Portfolio turnover rate................................. 80.35% 95.70% 31.15%
======== ======== ===============
</TABLE>
*Commencement of operations
**Effective September 15, 1995, The Ohio Company began waiving payments under
the Distribution and Shareholder Service Plan. Had the payments been charged,
total return, the ratio of expenses to average net assets, and the ratio of
net investment loss to average net assets would have been 24.34%, 2.25%, and
(0.93%), respectively.
See accompanying notes to financial statements.
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
The Shareholders and Board of Trustees
Cardinal Aggressive Growth Fund:
We have audited the accompanying statement of assets and liabilities of Cardinal
Aggressive Growth Fund (the Fund), including the statement of investments, as of
September 30, 1995, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the years in the
two-year period then ended, and the financial highlights for each of the periods
indicated herein. 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 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 verification of securities owned as of
September 30, 1995, by confirmation with the custodian and other appropriate
audit procedures. 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
Cardinal Aggressive Growth Fund as of September 30, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the years in the two-year period then ended, and the financial highlights for
each of the periods indicated herein, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
Columbus, Ohio
November 17, 1995
12
<PAGE> 14
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE> 15
THE CARDINAL FUND INC.
CARDINAL GOVERNMENT SECURITIES TRUST
CARDINAL TAX EXEMPT MONEY TRUST
CARDINAL GOVERNMENT OBLIGATIONS FUND
CARDINAL BALANCED FUND
CARDINAL AGGRESSIVE GROWTH FUND
155 E. Broad St. Columbus, Ohio 43215
<TABLE>
<S> <C>
New Accounts and Toll-free Lines
General Information: In Ohio 800-282-9446
(614) 464-5511 Outside Ohio 800-848-7734
</TABLE>
