<PAGE> 1
DK INVESTORS, INC.
----------
1995 ANNUAL REPORT
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<PAGE> 2
DK INVESTORS, INC.
333 SEVENTH AVENUE - THIRD FLOOR
NEW YORK, NY 10001
- --------------------------------------------------------------------------------
February 29, 1996
To Our Shareholders:
Once again, I am happy to have the opportunity to write to you
regarding our company. In 1995, the Federal Reserve cut interest rates twice in
an effort to stimulate the economy. That, of course, reflected in lower interest
rates on the tax exempt municipal and state bonds in which DK Investors, Inc.
invests. Many of the higher interest bonds which we bought in years past either
matured or were called. This necessarily resulted in a small drop in our income.
We have been working closely with our investment advisor in order to find bonds
of good quality with reasonable interest rates into which we can put our money.
We are, of course, trying to position ourselves to take advantage of any rise in
rates, always keeping in mind the risk/benefit ratio.
During 1995, DK Investors, Inc. paid federally tax exempt dividends of
.73 cents per share. At the market price of our shares as of year end 1995, this
resulted in a dividend of approximately 8.8%. An examination of the annexed
Financial Statements will reveal that the Company earned net investment income
of $842,557 and that the total assets of DK as at year end 1995 amounted to
$15,697,180 as opposed to $15,232,757 a year earlier.
Our Annual Shareholders Meeting will be held on May 8, 1996, at the
office of the Company, 333 Seventh Avenue, Third Floor, New York, NY. At that
meeting we will be electing a Board of Directors, voting to once again approve
the investment advisory agreement with The Portfolio Group and to appoint
Cummings & Carroll as auditors to the Company for another year. I look forward
to greeting any Shareholders who desire to attend that meetings.
Sincerely,
/s/Gene Nadler
--------------
Gene Nadler
President
<PAGE> 3
DK INVESTORS INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1995
<PAGE> 4
[Cummings & Carroll, P.C. Letterhead]
To the Shareholders and Board of Directors
DK Investors Inc.
We have examined the statements of assets and liabilities of DK Investors Inc.
including the portfolio of investments as of December 31, 1995 and 1994 and the
related statements of operations and changes in net assets for the years then
ended and supplementary information for the five years then ended. Our
examination was made in accordance with generally accepted auditing standards,
and accordingly included such tests of the accounting records and such other
auditing procedures as we considered necessary in the circumstances, including
confirmation of securities owned at December 31, 1995 by correspondence with the
custodian.
In our opinion, the financial statements referred to above present fairly the
net assets of DK Investors Inc. at December 31, 1995 and 1994 and the results of
its operations and the changes in its net assets for the years then ended, in
conformity with generally accepted accounting principles applied on a consistent
basis. Also, in our opinion, the supplementary information for the five years
ended December 31, 1995 is fairly stated in all respects material in relation to
the financial statements taken as a whole.
CUMMINGS & CARROLL, P.C.
/s/CUMMINGS & CARROLL, P.C.
----------------------------
Certified Public Accountants
February 2, 1996
Great Neck, New York
<PAGE> 5
DK INVESTORS INC.
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31,
<TABLE>
<CAPTION>
ASSETS
1995 1994
---- ----
<S> <C> <C>
Investments in securities at market
(identified cost - 1995 $15,915,150
1994 $16,076,214) $16,118,094 $15,583,519
Accrued interest receivable 338,940 380,169
Deferred charge 30,629 29,791
Cash 28,894 42,426
----------- -----------
Total Assets $16,516,557 $16,035,905
=========== ===========
LIABILITIES
Payable for securities purchased $ 593,350 $ 459,286
Accrued expenses 37,912 20,476
Dividends payable
(1995 - January 8, 1996
1994 - January 10, 1995) 188,115 223,386
----------- -----------
Total Liabilities 819,377 703,148
----------- -----------
Net assets
(equivalent to $13.35 and $13.04 per share
respectively, based on 1,175,664 shares
capital stock outstanding) $15,697,180 $15,332,757
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE> 6
DK INVESTORS INC.
INVESTMENT IN SECURITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
% OF
TOTAL
INVESTMENT
COUPON PRINCIPAL COST OR MARKET BASED
SECURITIES RATE MATURITY AMOUNT BASIS VALUE ON M.V.
- ---------- ---- -------- ------ ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
Dade Co.FL ED FAC 10.000 1996 $ 10,000 $ 10,037 $ 10,164 0.06%
Montgomery Cty Tex Hosp 7.850 1997 160,000 167,443 168,178 1.04%
Delaware Trans Auth 7.000 1997 500,000 516,430 522,865 3.24%
Georgia G.O 7.000 1997 30,000 31,285 31,712 0.20%
Mt.Clemens M Comm Sch 12.800 1998 110,000 122,734 116,576 0.72%
Anchorage Alaska FGIC 7.400 1999 25,000 26,267 26,041 0.16%
Texas Hsg Agcy 7.250 1999 30,000 30,462 30,819 0.19%
Chicago Metro San 7.650 2000 140,000 144,906 149,460 0.93%
Washington Sub San-MD 7.200 2000 500,000 523,956 527,090 3.27%
Colorado Student Oblig. var/rte 2000 300,000 300,000 300,000 1.86%
NY State Mtg Agency 7.050 2000 10,000 10,102 10,504 0.07%
Chicago Metro San 7.700 2001 300,000 323,681 321,336 1.99%
Ohio Mental Hlth Rev. 7.300 2001 100,000 106,167 109,172 0.68%
Delaware Trans Auth 7.100 2001 150,000 165,414 168,569 1.05%
SC Public Srv Auth 7.400 2001 100,000 102,979 102,029 0.63%
Texas Muni Pwr Agy 8.000 2001 200,000 210,373 209,720 1.30%
Thurston Cty Wash Sch 6.300 2001 100,000 102,371 102,361 0.64%
Montgomery Cty.Tenn GO 6.100 2002 230,000 240,153 241,242 1.50%
NYS Environ.Fac Corp. 7.300 2002 500,000 535,525 562,825 3.49%
Washoe Cnty Nev Wtr 7.200 2004 110,000 112,157 112,200 0.70%
Wash Cnty Nev Sch Dis 7.700 2004 450,000 479,149 484,727 3.01%
FL St Brd Mand SKG 7.500 2005 20,000 21,424 22,287 0.14%
Wash.Cnty NV Wtr/Swr 7.200 2005 120,000 121,570 122,400 0.76%
Ohio Bldg. Auth 7.250 2005 100,000 105,962 107,536 0.67%
NY Dorm Auth 7.800 2005 345,000 373,908 380,583 2.36%
Mtro Fair & Expos IL 8.000 2006 100,000 108,726 103,807 0.64%
Hawaii State 7.000 2006 500,000 524,450 555,340 3.45%
Mt. Lebanon Hosp PA AU 9.125 2006 300,000 339,735 306,129 1.90%
Muni Asst Corp NYC 7.000 2006 250,000 261,275 264,860 1.64%
PA St. Pub Sch. Bldg. 10.375 2006 5,000 5,023 5,357 0.03%
Intermountain Pwr. Agy 7.100 2007 100,000 105,595 105,711 0.66%
Ohio Bldg. Auth 8.000 2007 100,000 108,136 109,828 0.68%
Harris Cnty TX Pub Fac 7.750 2007 425,000 477,221 476,298 2.96%
NY State Mtg Agency 7.850 2008 475,000 499,703 507,086 3.15%
Austin TX Util Sys 7.750 2008 200,000 218,305 220,538 1.37%
WI St. Sr E 6.900 2009 250,000 254,015 268,140 1.66%
Clark Cnty Nev Sch Dist 7.000 2009 350,000 369,487 397,513 2.47%
SE TX Hosp fin Agy 7.500 2009 110,000 116,423 128,883 0.80%
Salt River Project Agr. 7.125 2010 225,000 235,911 229,561 1.42%
University Minn. 7.750 2010 550,000 591,155 562,958 3.49%
</TABLE>
<PAGE> 7
DK INVESTORS INC.
INVESTMENT IN SECURITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
% OF
TOTAL
INVESTMENT
COUPON PRINCIPAL COST OR MARKET BASED
SECURITIES RATE MATURITY AMOUNT BASIS VALUE ON M.V.
- ---------- ---- -------- ------ ----- ----- -------
<S> <C> <C> <C> <C> <C> <C>
New Mexico Mtg Fin Auth 6.850 2010 100,000 101,571 105,824 0.66%
NV Hsg Dev 7.550 2010 500,000 513,846 523,020 3.24%
NYS Mtg Ser NN 7.450 2010 250,000 258,245 267,983 1.66%
RI Hsg & Mtg 7.700 2010 500,000 519,225 535,605 3.32%
Austin TX Util Sys 6.750 2012 100,000 105,749 103,522 0.64%
Birmingham ALA UT 6.600 2012 275,000 285,450 302,132 1.87%
Austin TX Util Sys 7.750 2012 100,000 109,416 107,920 0.67%
Virginia St. Trans 6.900 2012 100,000 107,971 108,146 0.67%
New Hampshire Higher Ed 6.750 2013 285,000 300,604 299,700 1.86%
New Jersey Bldg. Auth 7.200 2013 150,000 162,213 162,245 1.01%
TX Wtr Res Fin Au Rev 7.500 2013 700,000 770,079 762,475 4.73%
NYS Dorm Auth Cornell 6.875 2014 175,000 184,074 180,982 1.12%
San Antonio TX E & G 6.000 2014 200,000 201,879 206,138 1.28%
Penn HSG 7.125 2014 325,000 325,602 341,016 2.12%
Illinois St. Sales Tax 7.250 2014 100,000 107,565 111,708 0.69%
Intermntn Pwr Agy UT 7.000 2015 455,000 478,186 482,391 2.99%
PA St. Higher Ed Auth 7.300 2015 425,000 464,641 476,540 2.96%
Butler Cnty OH Hsp Facs 9.300 2015 230,000 270,722 251,866 1.56%
Missouri St Env Auth 7.200 2016 200,000 220,306 229,954 1.43%
Maine St HSG Auth 7.100 2016 265,000 261,847 282,848 1.75%
Wisconsin HSG & ECO 7.350 2017 350,000 351,247 372,649 2.31%
Wisconsin HSG & ECO 6.400 2017 350,000 346,500 360,280 2.24%
MN HGA Hsg 9.500 2017 205,000 218,028 212,185 1.32%
Georgia Mon Elec Auth 7.750 2018 100,000 105,963 105,958 0.66%
Ocean Cnty NJ Util 8.375 2018 40,000 44,606 42,602 0.26%
---------------------------------------------------------
$15,060,000 $15,915,150 $16,118,094 100.00%
=========================================================
</TABLE>
See notes to financial statements.
<PAGE> 8
DK INVESTORS INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Income
Interest - municipal obligations
(Less amortization of premiums
1995 $98,603; 1994 $112,688) $ 1,009,520 $ 1,082,790
----------- -----------
Expenses
Investment advisory fee 61,665 61,818
Shareholder servicing costs, including
transfer agent and dividend disbursing
agent fees and expense 4,532 4,475
Reports to shareholders 7,789 8,679
Legal fees 25,306 25,386
Auditing fees 12,500 12,500
Directors fees 6,600 6,300
Insurance 45,346 44,626
Miscellaneous 3,225 3,954
----------- -----------
166,963 167,738
----------- -----------
Net investment income $ 842,557 $ 915,052
=========== ===========
Realized and Unrealized Gain (loss) on Investments
Realized gain (loss) from sale of securities
(excluding short-term securities)
Proceeds from sales $ 3,640,900 $ 2,423,000
Cost of securities sold 3,956,400 2,618,159
----------- -----------
Realized gain (loss) (315,500) (195,159)
----------- -----------
Unrealized appreciation (depreciation of investments)
Beginning of period (492,695) 133,568
End of period 202,944 (492,695)
----------- -----------
Increase (decrease) in unrealized appreciation 695,639 (626,263)
----------- -----------
Total Realized and Unrealized Gain (loss) on Investments $ 380,139 $ (821,422)
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE> 9
DK INVESTORS INC.
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1995 1994
---- ----
INVESTMENT ACTIVITIES
<S> <C> <C>
Net investment income $ 842,557 $ 915,052
Realized and unrealized gain (loss) on investments 380,139 (821,422)
Distributions to shareholders (858,273) (917,429)
------------ ------------
Increase (decrease) in net assets 364,423 (823,799)
NET ASSETS
Beginning of year 15,332,757 16,156,556
------------ ------------
End of year $ 15,697,180 $ 15,332,757
============ ============
</TABLE>
See notes to financial statements.
<PAGE> 10
DK INVESTORS INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
Note 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 significant
accounting policies followed by the Company are summarized as follows:
a. Security Valuation
Investments in securities were valued at the bid price by Chemical
Bank.
b. Federal Income Taxes
The Company qualifies under Subchapter M of the Internal Revenue Code
as a "regulated investment company" for federal income tax purposes,
investing all of its assets in tax-exempt state and local obligations.
The Company intends to distribute all of its net investment income to
its stockholders. The Company will be relieved of federal income taxes
on such income, and dividends so distributed will be tax-free to
shareholders.
c. Income and Expense Recognition
Interest income and related expenses are recognized on the accrual
basis. Amortization of bond premium calculated by the straight-line
method is charged against interest income over the term of the bond.
d. Other
As is common in the industry, security transactions are accounted for
on the date the securities are purchased or sold. Dividend income and
distribution to shareholders are recorded on the ex-dividend date. Each
expense accounting for 5 per cent of total expense is separately
reported.
Note 2 - Purchases and Sales of Securities
During the year ended December 31, 1995, purchases and sales of
securities other than short-term were $3,904,000 and $3,641,000,
respectively. During the year ended December 31, 1994, purchases and
sales of securities other than short-term were $2,917,000 and
$2,423,000, respectively.
Note 3 - Investment Advisory Fee
The Company's agreement with Chemical Bank for investment management
and advisory services calls for an annual fee of 4/10ths of 1% of the
average portfolio value. The fee for 1995 amounted to $61,665.
<PAGE> 11
Note 4 - Distributions
Distributions to shareholders for 1995 were $858,273 or $.73 per share.
Distributions include $840,617 or $.7150 on account of 1995 and $17,656
or $.0150 as a supplemental distribution for 1994. Undistributed
income for 1995 is $1,940 or $.0017 per share.
Note 5 - Contingent Liabilities
In the opinion of management and outside counsel, there are no other
significant legal or other matters pending.
Note 6 - Supplementary Information
Per share income and capital changes (for a share outstanding
throughout the period) ended:
<TABLE>
<CAPTION>
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Investment income $ .86 $ .92 $ .93 $ .98 $ 1.02
Expenses .14 .14 .14 .13 .12
-------- -------- -------- -------- --------
Net investment income .72 .78 .79 .85 .90
Distribution to shareholders (.73) (.78) (.79) (.90) (.93)
Net realized and unrealized gain (loss)
on investments .32 (.70) .11 .06 .36
-------- -------- -------- -------- --------
Net increase (decrease) in asset value $ .31 $ (.70) $ .11 $ .01 $ .33
======== ======== ======== ======== ========
Net asset value per share at end of year $ 13.35 $ 13.04 $ 13.74 $ 13.62 $ 13.61
======== ======== ======== ======== ========
Ratio of expenses to average net assets 1.06% 1.09% 1.01% .95% .93%
Ratio of net investment income to average
net assets 5.3% 5.8% 5.7% 6.3% 6.7%
Portfolio turnover 23.9% 15.9% 9.3% 90.1% 20.3%
</TABLE>
Number of shares outstanding during the entire period was 1,175,664.
<PAGE> 12
DK INVESTORS, INC.
OFFICES: 333 Seventh Avenue -- Third Floor
New York, NY 10001 (212) 239-7979
OFFICERS: Gene Nadler - President
Ann Nadler - Vice President
Thomas B. Schulhof - Secretary
Glenn O. Thornhill, Sr. - Treasurer
DIRECTORS: Murray Nadler - Chairman
Gene Nadler
Ann Nadler*
Harry Nadler
Glenn O. Thornhill, Sr.
Thomas B. Schulhof
Angelo J. Balafas
Joseph Kell
Andrew Brucker, Esq.
LEGAL COUNSEL: POMERANZ, GOTTLIEB & MASON, P.C.
333 Seventh Avenue - Third Floor
New York, NY 10001 (212) 239-7979
AUDITORS: CUMMINGS & CARROLL, P.C.
175 Great Neck Road
Great Neck, NY 11021
INVESTMENT
ADVISORS: The Portfolio Group,
Division of Chemical Bank
600 Fifth Avenue
New York, NY 10021
TRANSFER AGENT
AND REGISTRAR: American Stock Transfer & Trust Co.
40 Wall Street - 46th Floor
New York, NY 10005
CUSTODIAN: Chemical Bank
ANNUAL MEETING:
On May 8, 1996 a regular Annual Meeting of the Shareholders of the company will
be held at 333 Seventh Avenue, New York, NY -- Third Floor.
REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940 AS A DIVERSIFIED,
CLOSED END MANAGEMENT COMPANY. COPIES OF THE COMPANY'S ANNUAL REPORT
FORM N-2 ARE AVAILABLE TO REGISTERED STOCKHOLDERS UPON WRITTEN REQUEST
TO THE SECRETARY AT THE ABOVE ADDRESS.
*Ann Nadler died January 11, 1996. At the Annual Meeting of Shareholders a
replacement will be elected.
