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<PAGE> PAGE 2
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SIGNATURE EDWARD FACKENTHAL
TITLE ASSISTANT SECRETARY
ADDENDUM TO 77B OF FORM N-SAR
Board of Directors
NRM Investment Company
In planning and performing our audit of the financial statements of NRM
Investment Company for the year ended August 31, 1996, we considered its
internal control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control structure.
The management of NRM Investment Company is responsible for establishing
and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and transactions
are executed in accordance with management's authorization and recorded properly
to permit preparation of financial statements in conformity with generally
accepted accounting principles.
Because of inherent limitations in any internal control structure,
errors or irregularities may occur and may not be detected. Also, projection of
any evaluation of the structure to future periods is subject to the risk that it
may become inadequate because of changes in conditions or that the effectiveness
of the design and operation may deteriorate.
Our consideration of the internal control structure would not
necessarily disclose all matters in the internal control structure that might be
material weaknesses under standards established by the American Institute of
Certified Public Accountants. A material weakness is a condition in which the
design or operation of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or irregularities in
amounts that would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as defined
above as of August 31, 1996.
This report is intended solely for the information and use of management
and the Securities and Exchange Commission.
BEARD & COMPANY, INC.
Reading, Pennsylvania
October 2, 1996
ADDENDUM TO 77K OF N-SAR FOR NRM INVESTMENT COMPANY
Ernst & Young, LLP a firm of independent auditors, with offices at
Wyomissing Professional Center, 875 Berkshire Boulevard, P.O. Box 7045, Reading,
Pennsylvania 19610-6045, had been the Company's independent accounting and
auditing firm for a period in excess of the Company's two most recently
concluded fiscal years. It resigned its position effective as of August 31,
1996, the close of the Company's fiscal year. Effective as of the same date,
Beard & Company, Inc. with offices at One Park Plaza, P.O. Box 311, Reading,
Pennsylvania, 19603 was appointed by the Company's Board of Directors (acting
at its September 19, 1996 regular meeting) to act as independent auditor for
the present fiscal year.
The decision to change auditors related to the cost of providing auditing
services for the current year, and not to a disagreement of any other kind.
Specifically, during the Company's two most recent fiscal years and any
subsequent interim period,
(1) there were no disagreements with Ernst & Young on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedure;
(2) Ernst & Young did not advise the Company that internal controls did
not exist and did not advise that the internal controls should be improved
or altered in any way;
(3) Ernst & Young did not advise the Company that Ernst & Young could no
longer rely on management's representations or that it was unwilling to be
associated with the finanical statements in any respect;
(4) Ernst & Young did not advise the Company of a need to expand the scope
of its audit and it gave the Company no advice that information came to its
attention in any respect which would impact the fairness or reliability of any
financial reports or statements for any period, or cause it to be unwilling
to rely upon management's representations; and,
(5) Ernst & Young gave the Company no information which in any respect
impacted the fairness or reliability of any audit or underlying financial
statement.
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