<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
REPORT ON FINANCIAL STATEMENTS
For six months ending June 30, 1996
(Unaudited)
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
REPORT ON FINANCIAL STATEMENTS
For six months ending June 30, 1996
(Unaudited)
CONTENTS
PAGE
Investment Portfolio
as of June 30, 1996 (Unaudited) 3-4
Statement of Assets and Liabilities
as of June 30, 1996 (Unaudited) 5
Statement of Operations
for six months ended June 30, 1996 (Unaudited) 6
Statement of Changes Net Assets
for six months ended June 30, 1996 (Unaudited) 7
Notes to Financial Statements 8-9
2
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
INVESTMENT PORTFOLIO
As of June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
INDUSTRY & COMPANY Shares Value
<S> <C> <C>
EQUITY SECURITIES - COMMON STOCK 85.7%
COMMUNICATIONS 3.6%
Natural Microsystems Corp. 40,000 $1,400,000
CONSUMER 17.4%
CompUSA, Inc. 40,000 $1,365,000
General Nutrition Cos. 120,000 $2,100,000
One Price Clothing Stores 135,625 $745,938
Opta Food Ingredients, Inc. 130,000 $1,316,250
Softkey International, Inc. 62,150 $1,176,966
CONTRACT MANUFACTURING 7.0%
ACT Manufacturing Co. 185,000 $2,705,625
DIVERSIFIED INDUSTRIES 5.1%
Nashua Corp. 155,000 $1,976,250
ELECTRONIC COMPONENTS 13.2%
C.P. Clare Corp. 110,000 $2,832,500
Cerion Technologies, Inc. 101,000 $984,750
PCD, Inc. 100,000 $1,325,000
ENERGY 4.2%
Energy Research Corp. 110,000 $1,622,500
FACTORY AUTOMATION 6.1%
Parametric Technology Corp. 54,600 $2,368,275
FINANCIAL SERVICES 5.3%
State Street Boston Corp. 40,000 $2,040,000
INTERNET 4.2%
CMG Information Services 60,000 $1,620,000
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
INVESTMENT PORTFOLIO
As of June 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
INDUSTRY & COMPANY Shares Value
<S> <C> <C>
MEDICAL 4.5%
IMNET Systems 56,396 $1,720,078
SEMICONDUCTORS 7.5%
Aseco Corp. 139,820 $1,380,723
Asyst Technologies, Inc. 80,000 $1,500,000
SOFTWARE 7.6%
Datawatch Corp. 135,000 $1,164,375
Softdesk, Inc. 87,500 $831,250
Symantec Corp. 75,000 $937,500
TOTAL COMMON STOCK (COST $30,021,355) $33,112,980
PRIVATE HOLDINGS 6.5%
Advanced UroScience, Inc. 125,000 $500,000
Aimtech Corp. 188,887 $566,661
Ascent Pharmaceuticals 153,846 $999,999
Auburn Farms 100,000 $100,000
Sys-Tech Solutions (Conv. Note) 750 $75,000
Sys-Tech Solutions (Pfd. Stock) 2,777 $277,700
TOTAL PRIVATE HOLDINGS (COST $2,491,590) $2,519,360
CASH & EQUIVALENTS 9.5%
Fidelity Daily Money Market Fund $1,781,613
Fidelity US Treasury Income Fund $1,817,154
TOTAL CASH & EQUIVALENTS (COST $3,598,767) $3,598,767
SECURITIES SOLD SHORT -1.7%
Waters Corp. (20,000) ($660,000)
TOTAL SECURITIES SOLD SHORT (COST -$559,631) ($660,000)
TOTAL INVESTMENT PORTFOLIO 100.0% $38,571,107
(Cost $35,552,081)
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 1996
(Unaudited)
6 Months Ending
June 30, 1996
----------------
ASSETS
Investments at value (Cost Basis $36,111,712) $39,231,107
Cash $186
Receivable for investments sold $631,332
-----------
TOTAL ASSETS $39,862,625
-----------
LIABILITIES
Accrued management fees $98,082
Accrued capital withdrawals $3,008,183
Securities sold short at value $660,000
-----------
Proceeds receivable ($559,631.29)
TOTAL LIABILITIES $3,766,265
-----------
NET ASSETS $36,096,360
-----------
-----------
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
STATEMENT OF OPERATIONS
For six months ending June 30, 1996
(Unaudited)
6 Months Ending
June 30, 1996
----------------
INVESTMENT INCOME
Income:
Dividends $80,041
Interest $10,744
------------
Total Income $90,785
Expenses:
Management Fees $193,889
Other expenses $13,485
------------
Total expenses $207,374
NET INVESTMENT LOSS ($116,589)
------------
NET REALIZED & UNREALIZED GAIN
Net realized gains $5,268,433
Net unrealized depreciation ($3,901,319)
NET GAIN ON INVESTMENTS $1,367,114
------------
NET INCREASE IN NET ASSETS $1,250,525
------------
------------
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN NET ASSETS
For six months ending June 30, 1996
(Unaudited)
6 Months Ending
June 30, 1996
----------------
INCREASE IN NET ASSETS
Operations:
Net investment loss ($116,589)
Net realized gain $5,268,433
Net unrealized depreciation ($3,901,319)
------------
Net increase in net assets from operations $1,250,525
Contributions to capital $3,763,131
Withdrawals to capital ($5,476,077)
------------
DECREASE IN NET ASSETS ($462,421)
Net assets at beginning of period $36,558,781
------------
NET ASSETS AT END OF PERIOD $36,096,360
------------
------------
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
For six months ending June 30, 1996
(Unaudited)
1 - SIGNIFICANT ACCOUNTING POLICIES
The AH&H Partners Fund Limited Partnership (the "Partnership") was
organized June 8, 1990 as a Massachusetts limited partnership and is
registered with the Securities and Exchange Commission as a closed-end,
non-diversified management investment company. The Agreement of Limited
Partnership was amended and restated on September 13, 1990, April 1, 1992
and January 1, 1996. The Partnership operates under the Investment
Company Act of 1940 (the "1940 Act") as an interval fund. The
Partnership's interests are not registered under the Securities Act
of 1933.
Adams, Harkness & Hill, Inc., a Massachusetts Corporation, serves as
Managing General Partner. The Managing General Partner must maintain
a capital account balance equal to the lesser of 1% of the sum of all
the positive capital account balances of all the Partners or the greater
of $500,000 or 0.2% of the sum of the positive capital account balances
of all the Partners.
The policies described below are followed consistently by the Partnership
in preparation of its financial statements in conformity with generally
accepted accounting principles.
SECURITY VALUATION
Portfolio securities which are traded on U.S. stock exchanges are valued
at the most recent sale price reported on the exchange on which the
security is traded most extensively. If no sale occurred, the security
is valued at the mean between the closing bid and asked prices.
Securities for which market quotations are not readily available are
valued at "fair value" as determined in good faith by the general
partner.
SECURITIES SOLD SHORT
The Partnership is engaged in selling securities short, which obligates
the Partnership to replace a security borrowed by purchasing the same
security at current market value. The Partnership would incur a loss
if the price of the security increases between the date of the short
sale and the date on which the Partnership replaces the borrowed
security. The Partnership would realize a gain if the price of the
security declines between those dates.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded on a trade-date basis.
Securities gains or losses are determined on the identified cost
basis. Dividend income is recorded on the ex-dividend date.
Interest income, including original issue discount, where applicable,
is recorded on an accrual basis, except for bonds trading "flat", in
which case interest is recorded when received.
8
<PAGE>
AH&H PARTNERS FUND LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
For six months ending June 30, 1996
(Unaudited)
1 - SIGNIFICANT ACCOUNTING POLICIES (Continued)
FEDERAL AND STATE INCOME TAXES
No federal or state income tax is imposed on the Partnership as an
entity. The Partnership's income, gains, losses, deductions and
credits flow through to the Partners. Each partner must include
his or her share of partnership income in his or her tax returns.
2 - INVESTMENT ADVISORY AGREEMENTS & TRANSACTIONS WITH AFFILIATED PERSONS
The Partnership has an investment advisory agreement with the Managing
General Partner. Certain individuals who are executive officers and
directors of the Managing General Partner are also Limited Partners of
the Partnership.
For the six months ended June 30, 1996, the Managing General Partner
received fees of $193,889 for investment and advisory services under
the agreement. The fee is paid quarterly with an annual fee basis of
1%. In addition, the Partnership Agreement provides for a performance
allocation from the Limited Partners to the General Partner, equal to
15% of the return which exceeds a cumulative 6% annual return. The
performance allocation, if there is one, is determined after the close
of the calendar year.
3 - INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of investment securities (excluding
short term investments) for the six months ended June 30, 1996
aggregated $22,445,529 and $24,885,576, respectively.
4 - SIGNIFICANT SUBSEQUENT EVENT
The Partnership agreement provides for a Partnership termination date
of December 31, 2050.
9
