<PAGE>
EMERALD MONEY MARKETS FOR INSTITUTIONS
PRIME TRUST FUND
TREASURY TRUST FUND
Investment Portfolios Offered
by Emerald Funds
ANNUAL REPORT
NOVEMBER 30, 1995
[LOGO]
E M E R A L D
F U N D S
<PAGE>
EMERALD MONEY MARKETS FOR INSTITUTIONS
PRIME TRUST FUND
TREASURY TRUST FUND
Investment Portfolios Offered
by Emerald Funds
ANNUAL REPORT
NOVEMBER 30, 1995
[LOGO]
E M E R A L D
F U N D S
<PAGE>
This report is not authorized for distribution to prospective investors unless
preceded or accompanied by a current prospectus for one of the Emerald Funds
discussed within.
THE EMERALD FUNDS ARE NOT INSURED OR PROTECTED BY THE FDIC OR ANY OTHER
GOVERNMENT AGENCY, ARE NOT DEPOSITS OR OBLIGATIONS OF BARNETT BANK, ARE NOT
GUARANTEED BY THE BANK AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS
OF PRINCIPAL.
Investments in the Prime Trust and Treasury Trust Funds are neither insured nor
guaranteed by the U.S. Government, and yields will fluctuate. There can be no
assurance that the Funds will be able to maintain a stable net asset value of
$1.00 per share.
Barnett Banks Trust Company, N.A. serves as investment adviser to the Emerald
Funds and is unaffiliated with Emerald Asset Management, Inc., the Funds'
distributor.
The service contractors for the Emerald Funds may from time to time voluntarily
waive fees or reimburse Fund expenses, which temporarily increases the return to
investors. These fee waivers and reimbursements may be discontinued at any time,
which would reduce performance results.
The Emerald Funds prospectuses contain more complete information, including
charges and expenses. Please read the prospectus carefully before investing.
<PAGE>
ECONOMIC REPORT FROM THE INVESTMENT ADVISER
- --------------------------------------------------------------------------------
FED ENGINEERS "SOFT LANDING"
By raising short-term interest rates steadily throughout 1994 and into early
1995, the Federal Reserve Board was able to put the brakes on an economy that
had started to soar. Economic growth has slowed from a rate of 5.1% in the
fourth quarter of 1994 to an expected rate of about 2.5% for all of 1995 -- low
enough to keep inflation in check and just fast enough to keep corporate profits
growing. Despite the fact that this recovery is already longer than average, we
do not expect a recession in 1996. If the economy softens further, however, we
believe that the Fed would act quickly to cut short-term interest rates.
A FOUNDATION FOR CONTINUED GROWTH
While the Fed deserves a great deal of credit for prolonging the economic
expansion into its fifth year, there are other forces at work as well. The first
is the globalization of the economy. With the spread of capitalism comes new
markets. In addition, global competition has kept wages and prices at bay in the
U.S.
The second major force is the aging of the U.S. population. The first "baby
boomers" are about to turn 50, changing their spending patterns away from
consumption and more toward investment. Assets in savings accounts and mutual
funds are at record levels. This trend has been a positive force for the stock
and bond markets. And it has also been a major factor in holding interest rates
down -- as the cost of money responds like any other commodity to the forces of
supply and demand.
THE WORLD'S MOST EFFICIENT ECONOMY
A third factor is the boom in U.S. productivity, making ours the most efficient
economy in the world. Companies continue to restructure in response to foreign
competition. Employers continue to announce layoffs, which puts downward
pressure on wages and prices, particularly at the retail level. Meanwhile,
American innovation and technology are sought throughout the world -- which
helped fuel the surge in technology stocks in 1995. Although relatively slow,
U.S. economic growth still exceeds that of Japan and much of Europe.
As we enter 1996, presidential and congressional politics will also continue to
affect the economy and the financial markets. Although, as of this writing, the
President and Congress continue to battle over the budget, both sides agree at
least that a balanced budget in the near term is important. Investors will be
watching progress in Washington very closely. Generally speaking, meaningful
steps toward greater fiscal responsibility will be viewed favorably by the
financial markets.
PLEASE READ THE PORTFOLIO MANAGER INTERVIEW TO
LEARN MORE ABOUT THE STRATEGIES USED TO MANAGE
EACH EMERALD FUND AND ITS PERFORMANCE DURING
THIS PERIOD. REMEMBER, INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL VARY WITH MARKET
CONDITIONS. PAST PERFORMANCE IS NOT INDICATIVE
OF FUTURE RESULTS. ALTHOUGH THE PRIME TRUST AND
TREASURY TRUST FUNDS SEEK TO MAINTAIN A STABLE
NET ASSET VALUE (NAV) OF $1.00 PER SHARE, THERE
IS NO ASSURANCE THAT THEY WILL BE ABLE TO DO SO.
1
<PAGE>
INTERVIEW (as of November 30, 1995)
- --------------------------------------------------------------------------------
EMERALD PRIME TRUST AND TREASURY TRUST FUNDS*
Scott Edmonds
PORTFOLIO MANAGER
Rodney Square Management Corp.,
a subsidiary of Wilmington Trust Company
INVESTMENT SUB-ADVISER
INVESTMENT GOAL
The Emerald Money Market Funds seek to provide a high level of current income
consistent with liquidity, the preservation of capital and a stable net asset
value. Each Fund seeks its objective by investing in:
PRIME TRUST FUND
A broad range of U.S. Government, bank and corporate short-term money-market
obligations.
TREASURY TRUST FUND
Short-term U.S. Treasury securities and other government obligations which are
guaranteed full faith and credit by the U.S. Treasury, and repurchase agreements
collateralized by the same.
WHAT FACTORS AFFECTED THE PERFORMANCE OF THE PRIME TRUST AND TREASURY TRUST
FUNDS?
Two major factors affected performance during the past year: changes in the
direction of interest rates and supply and demand imbalances. In 1994, the
Federal Reserve Board boosted short-term rates six times to slow down a surging
economy, with the last increase in February 1995. Soon afterward, the economy
stabilized and then began to slow. In the spring of this year, economists began
to speculate that the Fed would need to lower short-term interest rates in order
to keep the economy moving at a moderate pace. This expectation drove down
longer-term rates, which are determined by market forces.
Although the Fed pushed short-term rates slightly lower in July and again in
December 1995, recent decreases have not been large enough to offset the
previous increases. As a result, yields on short-term investments are still
higher than they were at the end of November 1994. Indeed, as of November 30,
1995, the Funds were yielding approximately .70 of a percentage point above
their levels a year ago. The performance of the Funds remains above industry
averages as tracked by Lipper Analytical Services. The Prime Trust Fund returned
5.76% and the Treasury Trust Fund returned 5.74% for the 12 months ended
November 30, 1995, compared to average returns of 5.73% and 5.52% for comparable
funds in the respective Lipper categories.**
We feel that our consistent performance is due to our active management style
and our ability to quickly adapt our strategies to changing economic and market
conditions.
- ---------------
*Investments in the Emerald Prime Trust and Treasury Trust Funds are neither
insured nor guaranteed by the U.S. Government, and yields will fluctuate.
Although these Funds seek to maintain a stable net asset value (NAV) of $1.00
per share, there is no assurance that they will be able to do so.
**Returns are based on the total cumulative returns for the 12 months ended
November 30, 1995. The Prime Trust Fund was ranked with 132 other
institutional money market funds and the Treasury Trust Fund with 82 other
institutional U.S. Treasury money market funds. Past performance is not
predictive of future results.
2
<PAGE>
EMERALD PRIME TRUST AND TREASURY TRUST FUNDS (as of November 30, 1995)
- --------------------------------------------------------------------------------
WHAT STRATEGIES WERE EMPLOYED TO MAXIMIZE PERFORMANCE RESULTS?
As interest rates began to decline in the spring of 1995, we began to lengthen
the average maturities of the Funds by purchasing longer-term instruments.
However, the shortage of new issuance in the short-term market -- and the
resulting high prices of these securities -- has made it increasingly difficult
to pursue this strategy. As a result, the average maturities of the Prime Trust
and Treasury Trust Funds will likely remain in their current ranges over the
next few months.
WHAT FACTORS COULD AFFECT THE FUNDS IN THE MONTHS AHEAD?
Since inflation seems to be under control and the economy continues to slowly
struggle forward, we feel that the most significant influence on the securities
markets is the balanced budget package. Will it be passed? In what form, and
when? Economists and investors throughout the world are watching this quite
closely. A long delay or a complete breakdown in negotiations could cause
interest rates to rise as investors lose confidence that a balanced budget might
become a reality. If a budget package is passed and interest rates fall, we feel
that there will be a more significant decline in yields in the short-term sector
than in the intermediate- and longer-term sectors, since the latter have already
fallen rapidly. If the budget package is delayed and interest rates rise, then
we would expect the opposite to occur: Short-term yields would rise very little,
while intermediate- and longer-term rates could rise sharply. Therefore, yields
on money market funds would not be affected as much as the total returns on
intermediate- and long-term bond funds.
<TABLE>
<CAPTION>
7-DAY YIELDS AS OF 11/30/95*
Prime Trust Fund 5.51%
<S> <C>
Treasury Trust Fund 5.52%
</TABLE>
- ---------------
*The service contractors are voluntarily reimbursing a portion of the expenses
for the Prime Trust and Treasury Trust Funds. If the service contractors had
not reimbursed expenses, total returns and yields would have been lower. Had
these reimbursements not been in effect, the 7-day yields would have been 5.48%
for the Prime Trust Fund and 5.47% for the Treasury Trust Fund, respectively.
This voluntary reimbursement of expenses may be modified or terminated at any
time, which would reduce the performance.
For 1995, the Treasury Trust Fund qualified for exemption under the Florida
intangibles tax. Investors may want to consult with their tax adviser.
3
<PAGE>
EMERALD PRIME TRUST FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RATINGS
S&P/ PRINCIPAL
MOODY'S MATURITY AMOUNT VALUE
(UNAUDITED) RATE DATE (000) (NOTE 2)
----------------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER -- 41.2%
Akzo Nobel, Inc. ................................. A1/P1 5.68% 1/18/96 $ 4,000 $ 3,969,707
CSR America, Inc. ................................ A1/P1 5.72 12/26/95 3,000 2,988,083
CSR America, Inc. ................................ A1/P1 5.62 2/29/96 3,000 2,957,850
Daewoo International ............................. A1/P1 5.70 2/27/96 5,000 4,930,333
Daimler-Benz, N.A. ............................... A1/P1 5.55 3/15/96 5,000 4,919,063
E.I. Du Pont De Nemours Co. ...................... A1+/P1 5.63 12/21/95 5,000 4,984,361
Goldman Sachs L.P. ............................... A1+/P1 5.55 2/16/96 5,000 4,940,646
International Leasing Finance Corp. .............. A1/P1 5.70 12/15/95 6,000 5,986,700
PGA Tour Investment Finance, Inc. ................ A1/P1 5.80 12/20/95 5,000 4,984,694
Toronto Dominion Holdings U.S.A. ................. A1/P1 5.60 4/25/96 3,500 3,420,511
Vehicle Services of America, Inc. ................ A1/P1 5.72 2/8/96 1,000 989,037
Vehicle Services of America, Inc. ................ A1/P1 5.70 2/15/96 4,000 3,951,867
Zeneca Wilmington, Inc. .......................... A1/P1 5.73 1/19/96 5,000 4,961,004
-------------
TOTAL COMMERCIAL PAPER
(AMORTIZED COST $53,983,856)...................... 53,983,856
-------------
YANKEE CERTIFICATES OF DEPOSIT -- 7.6%
Canadian Imperial Bank of Commerce, N.Y. ......... A1+/P1 5.81 1/29/96 5,000 5,000,000
Societe Generale, N.Y. ........................... A1+/P1 5.74 3/1/96 5,000 5,000,000
-------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT
(AMORTIZED COST $10,000,000)...................... 10,000,000
-------------
BANKERS' ACCEPTANCES -- 9.4%
Correstates Bank ................................. A1/P1 5.70 12/19/95 2,500 2,492,875
Correstates Bank ................................. A1/P1 5.70 12/27/95 2,500 2,489,708
First Alabama Bank ............................... A1/P1 5.60 4/10/96 1,500 1,469,433
First Alabama Bank ............................... A1+/P1 5.54 5/7/96 2,500 2,439,214
Mellon Bank ...................................... A1/P1 5.70 12/19/95 3,500 3,490,025
-------------
TOTAL BANKERS' ACCEPTANCES
(AMORTIZED COST $12,381,255)...................... 12,381,255
-------------
TAXABLE MUNICIPAL OBLIGATIONS -- 7.6%
Genesys Health System, Series 1995A* ............. A1/VMIG1 5.89 12/7/95 5,000 5,000,000
New York City Taxable, Series B** ................ A1+/VMIG1 5.90 12/6/95 5,000 5,000,000
-------------
TOTAL TAXABLE MUNICIPAL OBLIGATIONS
(AMORTIZED COST $10,000,000)...................... 10,000,000
-------------
TOTAL INVESTMENTS IN SECURITIES
(AMORTIZED COST $86,365,111)...................... 86,365,111
-------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
RATE DATE (000) (NOTE 2)
--------- --------- --------- -------------
<S> <C> <C> <C> <C> <C>
REPURCHASE AGREEMENTS -- 34.6%
C.S. First Boston Corp., dated 11/30/95, with a
maturity value of $25,283,971 (Collateralized by
$27,060,000 Federal National Mortgage Assoc.
Discount Notes, 0.00%, 9/30/96, market value --
$25,839,593)................................... 5.94% 12/1/95 $ 25,280 $ 25,279,800
Fuji Securities, Inc., dated 11/30/95, with a
maturity value of $20,003,294 (Collateralized by
$37,876,000 various U.S. Treasury and U.S.
Government Agency securities, 0.00%-11.75%,
3/31/96-11/15/18, market value --
$20,400,264).................................... 5.93 12/1/95 20,000 20,000,000
-------------
TOTAL REPURCHASE AGREEMENTS
(AMORTIZED COST $45,279,800)...................... 45,279,800
-------------
TOTAL INVESTMENTS
(AMORTIZED COST $131,644,911) (A) -- 100.4%....... 131,644,911
LIABILITIES IN EXCESS OF ASSETS -- (0.4%)........... (556,043)
-------------
NET ASSETS -- 100.0%................................ $ 131,088,868
-------------
-------------
</TABLE>
- -------------
* Variable rate security. Maturity date reflects the later of the next interest
rate change date or the next put date.
** Commercial Paper.
(a) Cost for federal income tax and financial reporting purposes are the same.
See Notes to Financial Statements.
5
<PAGE>
EMERALD PRIME TRUST FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in securities (amortized cost $86,365,111).................................. $ 86,365,111
Repurchase agreements (amortized cost $45,279,800)...................................... 45,279,800
Interest receivable................................................................... 102,338
Prepaid expenses and cash............................................................. 2,338
---------------
Total assets.............................................................................. 131,749,587
---------------
LIABILITIES:
Dividends payable....................................................................... 574,289
Accrued expenses and other payables:
Sub-Advisory fees..................................................................... 13,626
Administration fees................................................................... 13,626
Custodian and transfer agent fees..................................................... 13,371
Other................................................................................. 45,807
---------------
Total liabilities......................................................................... 660,719
---------------
NET ASSETS................................................................................ $ 131,088,868
---------------
---------------
Shares Outstanding ($0.001 par value, unlimited number of shares authorized): 131,098,672
---------------
---------------
Net Asset Value, Offering Price and Redemption Price per share............................ $ 1.00
---------------
---------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par................................................... $ 131,099
Additional paid-in capital.............................................................. 130,967,573
Accumulated net realized losses on investment transactions.............................. (9,804)
---------------
Net Assets, November 30, 1995............................................................. $ 131,088,868
---------------
---------------
</TABLE>
- -------------
See Notes to Financial Statements.
6
<PAGE>
EMERALD PRIME TRUST FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................................ $ 6,936,648
EXPENSES:
Sub-Advisory fees............................................................. $ 173,413
Administration fees........................................................... 173,413
Transfer agent fees and expenses.............................................. 9,019
Legal fees.................................................................... 17,190
Audit fees.................................................................... 38,727
Reports to shareholders....................................................... 8,580
Custodian fees and expenses................................................... 82,506
Trustees' fees................................................................ 12,253
Insurance expense............................................................. 4,306
Other expenses................................................................ 7,176
------------
526,583
Less: Expense reimbursements.................................................. (64,148) 462,435
------------ -------------
Net Investment Income........................................................... 6,474,213
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 6,474,213
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
7
<PAGE>
EMERALD PRIME TRUST FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------------
NOVEMBER 30, NOVEMBER 30,
1995 1994
--------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income............................................... $ 6,474,213 $ 4,775,245
Net realized losses on securities transactions...................... -- (519,922)
--------------- ----------------
Net increase in net assets resulting from operations................ 6,474,213 4,255,323
--------------- ----------------
Dividends to shareholders from net investment income.................. (6,474,213) (4,775,245)
--------------- ----------------
Fund Share Transactions (at $1.00 per share)
Net proceeds from shares subscribed................................. 303,365,881 335,400,885
Net asset value of shares issued to shareholders in
reinvestment of dividends and distributions....................... 50,237 43,390
Cost of shares redeemed............................................. (304,085,710) (315,445,318)
--------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions...................................................... (669,592) 19,998,957
--------------- ----------------
Increase due to voluntary capital contribution from Sub-Adviser
(Note 3).......................................................... -- 510,825
--------------- ----------------
Total Increase (Decrease)............................................. (669,592) 19,989,860
NET ASSETS:
Beginning of period................................................. 131,758,460 111,768,600
--------------- ----------------
End of period....................................................... $ 131,088,868 $ 131,758,460
--------------- ----------------
--------------- ----------------
</TABLE>
- -------------
See Notes to Financial Statements.
8
<PAGE>
EMERALD TREASURY TRUST FUND
- --------------------------------------------------------------------------------
Portfolio of Investments
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
RATE DATE (000) (NOTE 2)
------------ --------- --------- --------------
<S> <C> <C> <C> <C>
U.S. GOVERNMENT OBLIGATIONS -- 15.1%
U.S. TREASURY BILL -- 7.5%
U.S. Treasury Bill............................................... 5.36%+ 1/11/96 $ 10,000 $ 9,938,842
--------------
U.S. TREASURY NOTE -- 7.6%
U.S. Treasury Note............................................... 7.88 7/31/96 10,000 10,133,799
--------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(AMORTIZED COST $20,072,641)..................................... 20,072,641
--------------
REPURCHASE AGREEMENTS -- 47.9%
C.S. First Boston Corp., dated 11/30/95, with a maturity of
$31,573,674 (Collateralized by $23,994,000 U.S. Treasury
Bonds, 9.13% - 10.75%, 8/15/05 - 5/15/18, market value --
$32,296,644)................................................... 5.90 12/1/95 31,569 31,568,500
Fuji Securities, Inc., dated 11/30/95, with a maturity of
$32,005,244 (Collateralized by $55,030,000 various U.S.
Treasury securities, 0.00% - 13.88%, 7/15/96 - 8/15/20, market
value -- $32,641,303).......................................... 5.90 12/1/95 32,000 32,000,000
--------------
TOTAL REPURCHASE AGREEMENTS
(AMORTIZED COST $63,568,500)....................................... 63,568,500
--------------
TOTAL INVESTMENTS
(AMORTIZED COST $83,641,141) (A) -- 63.0%.......................... 83,641,141
OTHER ASSETS IN EXCESS OF LIABILITIES -- 37.0%..................... 49,209,073
--------------
NET ASSETS -- 100.0%............................................... $ 132,850,214
--------------
--------------
</TABLE>
- ---------------
+ Effective yield at date of issuance.
(a) Cost for federal income tax and financial reporting purposes are the same.
See Notes to Financial Statements.
9
<PAGE>
EMERALD TREASURY TRUST FUND
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities
November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments in U.S. Government Obligations (amortized cost $20,072,641)................. $ 20,072,641
Repurchase agreements (amortized cost $63,568,500)...................................... 63,568,500
Interest receivable..................................................................... 273,631
Receivable from brokers for investments sold............................................ 49,613,792
Prepaid expenses and cash............................................................... 13,847
---------------
Total assets.............................................................................. 133,542,411
---------------
LIABILITIES:
Dividends payable....................................................................... 604,590
Accrued expenses and other payables:
Sub-Advisory fees..................................................................... 14,127
Administration fees................................................................... 14,126
Custodian and transfer agent fees..................................................... 15,363
Other................................................................................. 43,991
---------------
Total liabilities......................................................................... 692,197
---------------
NET ASSETS................................................................................ $ 132,850,214
---------------
---------------
Shares Outstanding ($0.001 par value, unlimited number of shares authorized).............. 132,855,897
---------------
---------------
Net Asset Value, offering price and redemption price per share............................ $ 1.00
---------------
---------------
COMPOSITION OF NET ASSETS:
Shares of beneficial interest, at par................................................... $ 132,856
Additional paid-in capital.............................................................. 132,723,041
Accumulated net realized losses on investment transactions.............................. (5,683)
---------------
Net Assets, November 30, 1995............................................................. $ 132,850,214
---------------
---------------
</TABLE>
- -------------
See Notes to Financial Statements.
10
<PAGE>
EMERALD TREASURY TRUST FUND
- --------------------------------------------------------------------------------
Statement of Operations
For the year ended November 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................................ $ 8,336,155
EXPENSES:
Sub-Advisory fees............................................................. $ 212,078
Administration fees........................................................... 212,078
Transfer agent fees and expenses.............................................. 20,175
Custodian fees and expenses................................................... 84,877
Reports to shareholders....................................................... 14,937
Legal fees.................................................................... 19,793
Audit fees.................................................................... 37,376
Trustees' fees................................................................ 12,267
Insurance expense............................................................. 4,191
Other expenses................................................................ 11,739
------------
629,511
Less: Expense reimbursements.................................................. (64,111) 565,400
------------ -------------
Net Investment Income........................................................... 7,770,755
REALIZED LOSSES ON INVESTMENTS:
Net realized losses on securities transactions................................ (76,579)
-------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $ 7,694,176
-------------
-------------
</TABLE>
- ------------
See Notes to Financial Statements.
11
<PAGE>
EMERALD TREASURY TRUST FUND
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
----------------------------------
NOVEMBER 30, NOVEMBER 30,
1995 1994
--------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations
Net investment income............................................... $ 7,770,755 $ 5,363,768
Net realized gains (losses) on securities transactions.............. (76,579) 203,106
--------------- ----------------
Net increase in net assets resulting from operations................ 7,694,176 5,566,874
--------------- ----------------
Dividends to shareholders from net investment income.................. (7,770,755) (5,363,768)
--------------- ----------------
Distributions to shareholders from net realized gains................. (113,374) --
--------------- ----------------
Fund Share Transactions
(at $1.00 per share)
Net proceeds from shares subscribed................................. 291,358,138 351,339,879
Net asset value of shares issued to shareholders in reinvestment of
dividends......................................................... -- 289
Cost of shares redeemed............................................. (285,089,050) (391,181,977)
--------------- ----------------
Net increase (decrease) in net assets from Fund share
transactions...................................................... 6,269,088 (39,841,809)
--------------- ----------------
Total Increase (Decrease)............................................. 6,079,135 (39,638,703)
NET ASSETS:
Beginning of period................................................. 126,771,079 166,409,782
--------------- ----------------
End of period....................................................... $ 132,850,214 $ 126,771,079
--------------- ----------------
--------------- ----------------
</TABLE>
- -------------
See Notes to Financial Statements.
12
<PAGE>
EMERALD FUNDS
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
NOTE 1 -- GENERAL
Emerald Funds (the "Trust") was organized as a Massachusetts business trust on
March 15, 1988. The Trust is registered under the Investment Company Act of
1940, as amended (the "Act"), as an open-end, management investment company. The
Trust operates as a series company currently comprising thirteen portfolios. The
accompanying financial statements and notes relate only to the Prime Trust Fund
and Treasury Trust Fund (the "Funds").
Barnett Banks Trust Company, N.A. ("Barnett") serves as the Funds'
investment adviser. Rodney Square Management Corporation (the "Sub-Adviser"), a
subsidiary of Wilmington Trust Company, serves as the Funds' investment
sub-adviser. Concord Holding Corporation ("Concord") serves as the Funds'
administrator and Emerald Asset Management, Inc. (the "Distributor") serves as
the distributor of the Funds' shares. Concord is a wholly owned subsidiary of
The BISYS Group, Inc. and the Distributor is a wholly owned subsidiary of
Concord.
NOTE 2 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements.
A)Security Valuation:
Portfolio securities are valued at amortized cost, which approximates market
value. The amortized cost method involves valuing a security at cost on the date
of purchase and thereafter assuming a constant amortization to maturity of the
difference between the principal amount due at maturity and initial cost. In
addition, the Funds may not (a) purchase any instrument with a remaining
maturity greater than thirteen months unless such instrument is subject to a
demand feature, or (b) maintain a dollar-weighted average maturity which exceeds
90 days.
B)Securities Transactions and Investment Income:
Securities transactions are recorded on the trade date. Realized gains and
losses on the sales of investments are calculated on the identified cost basis.
Interest income, including accretion of discount and amortization of premium on
investments, is accrued daily.
C)Dividends and Distributions to Shareholders:
Dividends from net investment income are declared daily to shareholders and are
paid monthly. Distributions of net realized gains, if any, will be paid at least
annually. However, to the extent that net realized gains of a Fund can be
reduced by any capital loss carryovers of that Fund, such gains will not be
distributed.
The amounts of dividends from net investment income and of distributions
from net realized gains are determined in accordance with federal income tax
regulations which may differ from generally accepted accounting principles.
These "book/tax" differences are either considered temporary or permanent in
nature. To the extent these differences are permanent in nature, such amounts
are reclassified within the composition of net assets based on their federal
tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions to shareholders which exceed net investment income
and net realized capital gains for financial reporting purposes but not for tax
purposes are reported as dividends in excess of net investment income or net
distributions in excess of net realized gains. To the extent they exceed net
investment income and net realized gains for tax purposes, they are reported as
distributions of capital.
D)Repurchase Agreements:
The Funds' custodian and other banks acting in a sub-custodian capacity take
possession of the collateral pledged for investments in repurchase agreements.
The underlying collateral is valued daily on a mark-to-market basis to determine
that the value, including accrued interest, exceeds the repurchase
13
<PAGE>
- --------------------------------------------------------------------------------
price. In the event of the seller's default of the obligation to repurchase, the
Funds have the right to liquidate the collateral and apply the proceeds in
satisfaction of the obligation. Under certain circumstances, in the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
E)Lending Securities:
If the Prime Trust Fund or the Treasury Trust Fund lends its securities, the
Fund receives from the borrower collateral, in the form of cash or U.S.
Government securities or, in the case of the Prime Trust Fund, securities of
U.S. Government agencies or instrumentalities or an irrevocable letter of credit
issued by a bank that meets the credit standards of the Prime Trust Fund, in an
amount at least equal at all times to the market value of the securities loaned.
The Fund continues to receive interest on the securities loaned and may
simultaneously earn interest on the collateral held. The Fund records and values
such collateral at its market value on the date of receipt and marks-to-market
such collateral on a daily basis through maturity date. If the borrower defaults
and the value of the collateral declines or if bankruptcy proceedings are
commenced with respect to the borrower of the security, realization of the
collateral by the Funds may be delayed or limited.
F)Expenses:
The Trust accounts separately for the assets, liabilities and operations of each
Fund. Direct expenses of a Fund are charged to that Fund while general Trust
expenses are allocated among the Trust's respective portfolios.
G)Federal Income Taxes:
For federal income tax purposes, each Fund is treated as a separate entity for
the purpose of determining its qualification as a regulated investment company
under the Internal Revenue Code (the"Code"). It is the policy of each Fund to
meet the requirements of the Code applicable to regulated investment companies,
including the requirement that it distribute substantially all of its taxable
income to shareholders. Therefore, no federal income tax provision is required.
At November 30, 1995, the following Fund had the following capital loss
carryovers:
<TABLE>
<CAPTION>
EXPIRATION
AMOUNT DATE
----------- -----------
<S> <C> <C>
Prime Trust Fund.................... $ 2,346 2001
7,458 2002
-----------
$ 9,804
-----------
-----------
</TABLE>
These capital loss carryovers may be used to offset any future realized
gains on securities transactions to the extent provided in the regulations under
the Code. To the extent utilized, the Prime Trust Fund will reduce amounts
otherwise payable to shareholders from net realized gains. The Treasury Trust
Fund had no capital loss carryovers at November 30, 1995.
NOTE 3 -- AGREEMENTS AND OTHER TRANSACTIONS WITH AFFILIATES
The Trust has entered into an Investment Advisory Agreement with Barnett.
Barnett, in turn, has entered into a Sub-Advisory Agreement with the Sub-
Advisor. The Trust has entered into Administration Agreements with Concord and a
Distribution Agreement with the Distributor.
Because of state and federal requirements applicable to the fiduciary
accounts whose assets are invested in the Funds, the Investment Advisory
Agreement for the Funds provides that Barnett is not entitled to any
compensation from the Funds for its advisory services. The Trust has agreed to
pay the Sub-Adviser a fee at an annual rate of 0.15% of the average daily net
assets of each of the Funds. Such fees are accrued daily and paid monthly. The
Sub-Adviser is responsible for all purchases and sales of each Fund's portfolio
securities, subject to the general supervision of both the Board of Trustees and
Barnett. As Administrator, Concord assists in supervising the operations of the
Funds. For its services, Concord is entitled to receive a fee at an annual rate
of 0.15% of the average daily net assets of each of the Funds. Such fees are
accrued daily and paid monthly. The Distributor does not receive a fee under the
Distribution Agreement.
14
<PAGE>
- --------------------------------------------------------------------------------
The Sub-Adviser and Concord have voluntarily agreed to reimburse fees
payable to them with respect to each Fund to the extent a Fund's ordinary
operating expenses (including fees payable to the Sub-Adviser and Concord)
exceed 0.40% of such Fund's average daily net assets. As a result of such
expense limitations, both the Sub-Adviser and Concord have reimbursed $32,074 of
their fees from the Prime Trust Fund and $32,055 of their fees from the Treasury
Trust Fund for the year ended November 30, 1995.
On June 23, 1994, the Sub-Adviser purchased a security from the Prime Trust
Fund at an amount $12,325 in excess of its fair market value. The Fund recorded
a realized loss on the sale and a capital contribution of an equal amount from
the Sub-Adviser. Additionally, on July 6, 1994, the Sub-Adviser contributed
capital to the Prime Trust Fund in the amount of $498,500. The Sub-Adviser
received no shares of the Prime Trust Fund or other consideration in exchange
for these contributions. For tax purposes, these capital contributions were
applied against the realized losses for the year ended November 30, 1994.
Accordingly, such amounts were reclassified from additional paid-in capital
against accumulated net realized losses on the statement of assets and
liabilities.
Certain officers of the Trust are "affiliated persons" (as defined in the
Act) of Concord or the Distributor. Each Trustee receives an annual fee of
$14,000 and a meeting fee of $1,500 per meeting for services relating to all of
the portfolios constituting the Trust. Prior to June 1, 1995, each Trustee
received an annual fee of $9,000. For the year ended November 30, 1995, the
Prime Trust Fund and Treasury Trust Fund incurred legal fees of $17,190 and
$19,793, respectively, earned by a law firm, a partner of which serves as
Secretary to the Trust.
NOTE 4 -- CAPITAL SHARE TRANSACTIONS
Because each Fund has maintained a $1.00 net asset value per share from
inception, the number of shares sold, shares issued to shareholders in
reinvestment of dividends and distributions, and shares redeemed are equal to
the dollar amounts shown in the Statements of Changes in Net Assets for the
corresponding capital share transactions.
NOTE 5 -- CONCENTRATION OF CREDIT RISK
The Prime Trust Fund invests substantially all of its assets in a diversified
portfolio of high quality U.S. dollar denominated money market instruments as
disclosed in the Portfolio of Investments by security type. The issuers' ability
to meet their obligations may be affected by domestic and foreign economic,
regional and political developments.
The Prime Trust Fund had the following concentrations by industry sector at
November 30, 1995 (as a percentage of total investments):
<TABLE>
<S> <C>
Repurchase Agreements................ 34.4%
Banking.............................. 19.6
Chemicals............................ 6.8
Aerospace and Defense................ 4.5
Building and Building Products....... 4.5
Brokerage Services................... 3.8
Finance Companies.................... 3.8
Health Care and Hospital
Management.......................... 3.8
Leasing.............................. 3.8
Pharmaceuticals...................... 3.8
Taxable Municipal Securities......... 3.8
Automobiles and Trucks............... 3.7
International - Other................ 3.7
---------
100.0%
---------
---------
</TABLE>
15
<PAGE>
EMERALD PRIME TRUST FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992* 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................ $ 0.9999 $ 1.0000 $ 1.0017 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income............................. 0.0561 0.0377 0.0304 0.0392 0.0637
Net realized gains (losses) on securities......... 0.0000 (0.0038) 0.0005*** 0.0017 0.0000
------------ ------------ ------------ ------------ ------------
Total income from investment operations........... 0.0561 0.0339 0.0309 0.0409 0.0637
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income.............. (0.0561) (0.0377) (0.0304) (0.0392) (0.0637)
Distributions from net realized gains on
securities...................................... (0.0000) (0.0000) (0.0022) (0.0000) (0.0000)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions................. (0.0561) (0.0377) (0.0326) (0.0392) (0.0637)
------------ ------------ ------------ ------------ ------------
Increase due to voluntary capital contribution
from Sub-Adviser (Note 3)....................... 0.0000 0.0037 0.0000 0.0000 0.0000
------------ ------------ ------------ ------------ ------------
Net change in net asset value....................... 0.0000 (0.0001) (0.0017) 0.0017 0.0000
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD...................... $ 0.9999 $ 0.9999 $ 1.0000 $ 1.0017 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return........................................ 5.76% 3.83% 3.31% 4.00% 6.56%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).................. $ 131,089 $ 131,758 $ 111,769 $ 99,192 $ 89,777
Ratio of expenses to average net assets........... 0.40% 0.40% 0.40% 0.40% 0.40%
Ratio of net investment income to average net
assets.......................................... 5.60% 3.80% 3.03% 3.89% 6.34%
Ratio of expenses to average net assets**......... 0.46% 0.44% 0.44% 0.46% 0.46%
Ratio of net investment income to average net
assets**........................................ 5.54% 3.76% 3.00% 3.83% 6.28%
</TABLE>
- ---------------
* Effective April 22, 1992, Rodney Square Management Corporation, a subsidiary
of Wilmington Trust Company, became the Fund's investment Sub-Adviser.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
*** Net realized gain per share is the direct result of a decrease in
outstanding shares between 11/30/92 and the date of the gain distribution.
See Notes to Financial Statements.
16
<PAGE>
EMERALD TREASURY TRUST FUND
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARS ENDED
--------------------------------------------------------------------
NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30, NOVEMBER 30,
1995 1994 1993 1992* 1991
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD................ $ 1.0015 $ 0.9999 $ 0.9999 $ 1.0000 $ 1.0000
------------ ------------ ------------ ------------ ------------
Income from investment operations:
Net investment income............................. 0.0551 0.0367 0.0292 0.0367 0.0598
Net realized gains (losses) on securities......... (0.0006) 0.0016 0.0000 (0.0001) 0.0000
------------ ------------ ------------ ------------ ------------
Total income from investment operations........... 0.0545 0.0383 0.0292 0.0366 0.0598
------------ ------------ ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income.............. (0.0551) (0.0367) (0.0292) (0.0367) (0.0598)
Distributions from net realized gains on
securities...................................... (0.0009) (0.0000) (0.0000) (0.0000) (0.0000)
------------ ------------ ------------ ------------ ------------
Total dividends and distributions................. (0.0560) (0.0367) (0.0292) (0.0367) (0.0598)
Net change in net asset value....................... (0.0015) 0.0016 0.0000 (0.0001) 0.0000
------------ ------------ ------------ ------------ ------------
NET ASSET VALUE, END OF PERIOD...................... $ 1.0000 $ 1.0015 $ 0.9999 $ 0.9999 $ 1.0000
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Total return........................................ 5.74% 3.73% 2.96% 3.74% 6.15%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s).................. $ 132,850 $ 126,771 $ 166,410 $ 183,072 $ 184,420
Ratio of expenses to average net assets........... 0.40% 0.40% 0.40% 0.40% 0.39%
Ratio of net investment income to average net
assets.......................................... 5.54% 3.61% 2.92% 3.72% 6.00%
Ratio of expenses to average net assets**......... 0.45% 0.44% 0.42% (a) (a)
Ratio of net investment income to average net
assets**........................................ 5.50% 3.57% 2.90% (a) (a)
</TABLE>
- ---------------
* Effective April 22, 1992, Rodney Square Management Corporation, a subsidiary
of Wilmington Trust Company, became the Fund's investment Sub-Adviser.
** During the period, certain fees were voluntarily reduced and/or reimbursed.
If such voluntary fee reductions and/or reimbursements had not occurred, the
ratios would have been as indicated.
(a) There were no waivers or reimbursements during the period.
See Notes to Financial Statements.
17
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees
and Shareholders of
Emerald Funds
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Emerald Prime Trust Fund and
Emerald Treasury Trust Fund (two of the portfolios constituting the Emerald
Funds, hereafter referred to as the "Funds") at November 30, 1995, the results
of each of their operations for the year then ended, the changes in each of
their net assets for each of the two years in the period then ended and the
financial highlights for each of the periods presented, in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Funds' management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at November 30, 1995 by
correspondence with the custodians and brokers and the application of
alternative auditing procedures where confirmations from brokers were not
received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
New York, New York
January 24, 1996
FEDERAL INCOME TAX STATUS OF DIVIDENDS (UNAUDITED)
Emerald Prime Trust Fund and Emerald Treasury Trust Fund have determined
that all dividends and distributions paid during the fiscal year ended November
30, 1995, were paid from net investment income and are subject to Federal income
tax. Emerald Treasury Trust Fund distributed long-term capital gains to
shareholders in the amount of $0.009 per share.
18
<PAGE>
EMPTTRAN95
