The Apex Mid Cap Growth Fund
C/O Bhirud Funds Inc.
Soundview Plaza, 1266 East Main Street
Stamford, CT 06902
Telephone (877) 593-8637
ANNUAL REPORT
July 31, 2000
September 25, 2000
Enclosed is the Annual Report of the Apex Mid Cap Growth Fund for the year
ending July 31, 2000.
Suresh L. Bhirud
Chairman of the Board
<TABLE>
The Apex Mid Cap Growth Fund
Schedule of Investments report Date July 31st , 2000
<CAPTION>
Ticker CO. NAME Shares % MV Market
Value
<S> <C> <C> <C>
GLAMIS GOLD * 1000 1,750
HECLA MINING * 20000 17,500
TOTAL GOLD/SILVER MINING 1.40 19,250
INFOUSA B * 3000 18,000
TOTAL PUBLISHING 1.31 18,000
CHIRON CORP. * 500 20,938
KERAVISION * 5000 14,219
IMMUNEX * 200 10,138
IMMUNE RESPONSE * 8000 66,250
LCA VISION * 3000 7,781
TOTAL DRUG INDUSTRY 8.65 119,325
DATALINK CORP * 1000 15,250
TOTAL OFFICE EQUIP & SUP 1.11 15,250
PALM * 2000 78,000
METRICOM * 1000 35,188
EMACHINES * 5000 11,250
TOTAL COMPUTER & PERIP. 9.02 124,438
ESPS INC * 2000 5,375
SOFTNET SYSTEMS * 500 4,125
DIGITAL RIVER INC * 1700 11,369
RED HAT * 1000 18,750
BEYCOND.COM CORP * 4000 5,000
CITYVIEW ENERGY * 10000 6,100
TOTAL COMPUTER SOFTW & SVC 3.68 50,719
SUPERCONDUCTOR TECHNOLOGIES * 1000 21,125
TOTAL ELECTRICAL EQUIPT. 1.53 21,125
ADAPTIVE BROADBAND * 1300 46,881
PARADYNE NETWORKS * 1000 28,500
UNIVIEW TECHNOLOGIES * 10000 18,125
TOTAL ELECTRONICS 6.78 93,506
TERAYON COMMUNICATIONS * 500 25,500
ADVANCED MICRO DEVICES INC. * 1000 71,938
CIRRUS LOGIC INC. * 500 9,688
AWARE * 500 19,688
TOTAL SEMICONDUCTOR 9.20 126,813
JNI * 500 21,344
TOTAL SEMICONDUCTOR CAP EQ 1.55 21,344
AUTOBYTEL.COM * 2000 10,625
AUTOWEB.COM * 4000 7,750
TOTAL AUTO & TRUCK 1.33 18,375
TOPPS CO. INC. * 5000 48,047
4 KIDS ENTERTAINMENT * 3000 57,000
TOTAL TOYS 7.62 105,047
HIGH SPEED ACCESS * 1000 5,125
WIRELESS FACILITIES INC. * 200 12,725
PREMIERE TECHNOLOGIES * 4000 16,000
USURF AMERICA INC * 4000 8,000
APPLIED DIGITAL SOLUTIONS * 3000 14,250
KOREA THRUNET CO LTD * 300 3,131
RESEARCH IN MOTION * 1000 54,188
INTERNET GOLD-GOLDEN LINES * 1000 7,250
TOTAL TELECOM. SERVICES 8.75 120,669
CALIFORNIA AMPLIFIER * 1000 33,188
CONDUCTUS * 500 7,000
ACCELERATED NETWORK * 1000 24,000
TELULAR CORPORATION * 4000 55,500
AVANEX * 500 63,469
TOTAL TELECOM. EQUIPMENT 13.28 183,156
CYBERIAN OUTPOST INC * 11000 43,313
TOTAL RETAIL STORE 3.14 43,313
EGGHEAD.COM * 4260 10,384
GARDEN.COM INC * 2000 3,125
PRICELINE.COM * 1000 23,625
GSV INC * 1000 375
TOTAL RETAIL SPECIALTY 2.72 37,509
DATA BROADCASTING * 4000 16,625
MORTGAGE.COM * 4000 5,000
TOTAL FINANCIAL SERVICES 1.57 21,625
TRACK DATA CORPORATION * 4000 4,250
WIT CAPITAL GROUP * 2000 16,813
TOTAL SECURITIES BROKERAGE COMP. 1.53 21,063
RAINMAKER SYSTEMS INC * 1000 1,719
TOTAL INDUSTRIAL SERVICES 0.12 1,719
DRKOOP.COM INC * 2000 2,313
TOTAL HEALTHCARE INFO SYS 0.17 2,313
HITSGALORE.COM INC * 9000 1,683
TOTAL ENTERTAINMENT 0.12 1,683
CAREMATRIX * 5000 2,500
TOTAL MEDICAL SERVICES 0.18 2,500
TRIMEDYNE INC * 15000 28,125
IMATRON INC * 20000 50,000
TOTAL MEDICAL SUPPLIES 5.67 78,125
EDULINK INC * 40000 6,600
TOTAL DIVERSIFIED CO 0.48 6,600
INTERNET CAPITAL GROUP INC * 1500 50,719
PACIFIC INTERNET * 500 6,375
E FAX COM * 3000 1,688
LOOKSMART LTD * 1000 18,250
TOTAL INTERNET INDUSTRY 5.59 77,031
TIVO * 1000 22,125
TOTAL CABLE TV 1.60 22,125
TOTAL COMMON STOCKS 98.09 1,352,620
TOTAL INVESTMENTS 98.09 1,352,620
OTHER ASSETS (LESS 1.91 26,337
LIABILITIES)
NET ASSETS 100.00 1,378,957
NET ASSETS VALUE PER SHARE 4.45
OFFERING PRICE PER SHARE 4.72
* Non - income producing securities
See accompanying notes to Financial Statements PAGE: 3
</TABLE>
THE APEX MID CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES FOR THE YEAR ENDED July 31, 2000 (AUDITED)
ASSETS
Investment Securities at Value $1,352,620
(Identified cost - $3,024,111) (Note 1)
Interest 50
Due from broker - 89,557
Total Assets $1,442,227
LIABILITIES
Payables:
Cash - Overdraft $ 27,913
Accrued expenses 35,357
Total Liabilities ($ 63,270)
NET ASSETS (Equivalent to $4.45 per share $1,378,957
based on 309,768 shares outstanding)
COMPOSITION OF NET ASSETS:
Paid in Capital $3,348,569
Distribution in excess of accumulated Net (298,121)
Realized gain (loss)
Accumulated Net Investment Income --
Net Unrealized Appreciation (Depreciation) (1,671,491)
of Investments
Total Net Assets $1,378,957
STATEMENT OF OPERATIONS (AUDITED) FOR THE YEAR ENDED JULY 31, 2000
INVESTMENT INCOME
Dividends $2,709
Interest 3,803
EXPENSES
Audit $4,000
Fund Accounting 11,631
Transfer Agent (Note 6) 5,129
Legal 8,716
Shareholder Report 502
Directors 12,000
Registration 1,004
Insurance 1,142
Fund Administration (Note 4) 4,162
Custodian 6,683
Investment Advisor (Note 4) 20,812
12b-1 Fees 5,203
Total Expenses (80,984)
Expense Reimbursement/ waived by Advisor 24,974
(Note 4)
Expense net of Reimbursement/ waiver (56,010)
NET INVESTMENT GAIN (LOSS) (49,498)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) on Investments 206,213
Change in Unrealized Appreciation (987,554)
(Depreciation) of Investments
NET REALIZED/UNREALIZED GAIN (LOSS) ON (781,341)
INVESTMENTS
NET INCREASE (DECREASE) IN NET ASSETS (830,839)
RESULTING FROM OPERATION
See accompanying Notes to Financial Statements PAGE: 4
THE APEX MID CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS FOR THE YEAR ENDED July 31, 2000 (AUDITED)
For the Year For the Year
Ended Ended
July 31, 2000 July 31, 1999
INCREASE (DECREASE) IN NET ASSETS
Net Investment Income/ (loss) $ (49,498) $ (12,637)
Net Realized Gain / (loss) on 206,213 583,967
investment Securities Sold
Net unrealized (987,554) (81,105)
appreciation/(depreciation) of
Investments
Net Increase (Decrease) in Net $ (830,839) $ 490,225
Assets Resulting from Operations
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Dividend distributions paid (571,317) (48,682)
Capital Gains 0 (44,136)
Total Distributions (571,317) (92,818)
CAPITAL SHARE TRANSACTIONS
Shares Sold 133,932 566,490
Shares issued in lieu of Cash 569,302 92,489
Distributions
Cost of shares Redeemed (448,918) (232,582)
Increase (Decrease) in Net Assets 254,316 426,397
Due to Capital Share Transactions
TOTAL INCREASE (DECREASE) IN NET (1,147,840) 823,804
ASSETS
NET ASSETS BEGINNING OF PERIOD 2,526,797 1,702,993
NET ASSETS END OF PERIOD $ 1,378,957 2,526,797
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD (AUDITED)
For the For For For For
the the the the
Year Year Year Year Year
Ended Ended Ended Ended Ended
July July July July July
31, 31, 31, 31, 31,
2000 1999 1998 1997 1996
NET ASSET VALUE, BEGINNING OF $9.30 $7.53 $6.93 $7.18 $9.71
PERIOD
Income/(Loss) from Investment
Operations:
Net Investment (0.14) (0.06) (0.36) (0.33) (0.35)
Income/(Loss)
Net Gain/(Loss) on (2.28) 2.23 1.58 0.44 (2.63)
Securities (Both Realized and
Unrealized)
Total from Investment (2.42) 2.17 1.22 0.11 (2.98)
Operations
Distributions:
Dividend Distributions Paid (2.43) (0.21) (0.62) (0.36) 0.45
Distributions from Capital 0.00 (0.19) 0 0 0
Gains
Total Distributions (2.43) (0.40) (0.62) (0.36) 0.45
NET ASSET VALUE, END OF $ 4.45 $ 9.30 $ 7.53 $ 6.93 $ 7.18
PERIOD
Total Return (Not Reflecting (37.21)% 31.36% 8.66% (3.48)% (26.05)%
Sales Load)
Ratios/Supplemental Data:
Net Assets, End of Period $1,379 $2,527 $1,703 $1,693 $1,855
(in thousands)
Ratios to Average Net
Assets:
Expenses 2.68% 2.26% 5.26% 5.25% 2.52%
Net Investment (2.37)% (0.66)% (2.54)% (4.73)% (2.11)%
Income/(Loss)
Effect of 1.19% 1.19% 1.19% 1.21% 1.28%
Reimbursements/Waivers on
Above Ratios
Portfolio Turnover Rate 355.90% 405.39% 205.06% 275.55% 320.89%
* Based on weighted average shares outstanding ** Not annualized
See accompanying Notes to Financial Statements PAGE: 5
1. SIGNIFICANT ACCOUNTING POLICIES
Bhirud Funds, Inc. (the "Fund") is a diversified open-end management
investment company currently consisting of The Apex Mid Cap Growth Fund
portfolio (the "Portfolio"). The Fund was incorporated in Maryland on May
27, 1992. Prior to November 4, 1992 (commencement of operations), the Fund
had no operations other than the sale of 10,000 shares of stock on August
4, 1992 at a cost of $100,000 to Thomas James MidCap Partners representing
the initial capital. The following is a summary of significant accounting
policies followed by the Fund:
SECURITY VALUATION
Readily marketable portfolio securities listed on the New York Stock
Exchange are valued at the last sale price reflected at the close of the
regular trading session of the New York Stock Exchange on the business day
as of which such value is being determined. If there has been no sale on
such day, the securities are valued at the mean of the closing bid and
asked prices on such day. If no bid or asked prices are quoted on such
day, then the security is valued by such method as the Board of Directors
shall determine in good faith to reflect its fair value. Readily
marketable securities not listed on the New York Stock Exchange but listed
on other national securities exchanges or admitted to trading on the
National Association of Securities Dealers Automated Quotations, Inc.
("NASDAQ") National List are valued in like manner. Portfolio securities
traded on more than one national securities exchange are valued at the last
price on the business day as of which such value is being determined as
reflected on the tape at the close of the exchange representing the
principal market for such securities.
Readily marketable securities traded in the over-the-counter market,
including listed securities whose primary market is believed by the Advisor
to be over-the-counter but excluding securities admitted to trading on the
NASDAQ National List, are valued at the mean of the current bid and asked
prices as reported by NASDAQ or, in the case of securities not quoted by
NASDAQ, the National Quotation Bureau or such other comparable sources as
the Board of Directors deem appropriate to reflect their fair value.
United States Government obligations and other debt instruments having
sixty days or less remaining until maturity are stated at amortized cost.
Debt instruments having a greater remaining maturity will be valued at the
highest bid price obtained from a dealer maintaining an active market in
that security or on the basis of prices obtained from a pricing service
approved as reliable by the Board of Directors.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the dates the securities are
purchased or sold (the trade dates), with realized gain and loss on
investments determined by using specific identification as the cost method.
Interest income (including amortization of premium and discount, when
appropriate) is recorded as earned. Dividend income and dividends and
capital gain distributions to shareholders are recorded on the ex-dividend
date.
FEDERAL INCOME TAXES
The Fund intends to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code and distribute all of its taxable
income to its shareholders. Therefore, no federal income tax provision is
required.
2. CAPITAL STOCK TRANSACTIONS
The Articles of Incorporation, dated May 27, 1992, permit the Fund to issue
twenty billion shares (par value $0.001). Transactions in shares of common
stock for the year ended July 31, 2000 were as follows:
Shares Amount
Beginning Balance 271,621 $ 3,106,890
Shares Sold 21,557 133,932
Shares Issued in Reinvestment of 73,269 569,302
Dividends
Shares Redeemed ( 56,679) ( 448,918)
Net Increase (Decrease) 38,147 254,316
Ending Balance 309,768 $3,361,206
3. INVESTMENTS
Purchases and sales of securities for the year ended July 31st, 2000 other
than short-term securities, aggregated $6,113,835 and $6,776,400,
respectively. There were short sale transactions for the year ended July
31, 2000 aggregate to $866,535 of purchases and $816,638 of sales. The cost
of securities is substantially the same for Federal income tax purposes.
For Federal income tax purposes:
Aggregate Cost $3,024,111
Gross Unrealized Appreciation 78,615
Gross Unrealized Depreciation (1,750,106)
Net Unrealized Depreciation ($1,671,491)
Short-Selling: The Fund is engaged in short selling which obligates the
Fund to replace the security borrowed by purchasing the security at current
market value. The Fund would incur a loss if the price of the security
increases between the date of the short sale and the date on which the Fund
replaces the borrowed security. The Fund would realize a gain if the price
of the security declines between those dates. Until the Fund replaces the
borrowed security, the Fund will deposit collateral with the broker-dealer,
usually cash, U.S. government securities, or other highly liquid
securities, sufficient to cover its short position.
4. INVESTMENT ADVISORY CONTRACT
The Fund employs Bhirud Associates, Incorporated (the "Advisor") to provide
a continuous investment program for the Fund's portfolio, provide all
facilities and personnel, including Officers required for its
administrative management, and to pay the compensation of all Officers and
Directors of the Fund who are affiliated with the Advisor. As compensation
for the services rendered and related expenses borne by the Advisor, the
Fund pays the Advisor a fee, computed and accrued daily and payable
monthly, equal to 1.00% of the first $250 million of the average net assets
of the Portfolio; 0.75% of the average net assets of the Portfolio between
$250 and $500 million; and 0.65% of the average net assets of the Portfolio
over $500 million. The Advisor has voluntarily agreed to reimburse the Fund
in the event the Fund's expenses exceed certain prescribed limits. During
the year ended July 31, 2000 the Advisor elected to defer the payment of
Advisory fees payable in the amount of $ 20,812. The Advisor has
voluntarily agreed to waive these fees, considering the small assets of the
Fund. The Advisory and Administrative Services Contracts provide that if,
in any fiscal year, the aggregate expenses of a Fund, excluding interest,
taxes, brokerage and extraordinary expenses, but including the Advisory and
Administrative Services fees, exceed the expense limitation of any state in
which the Trust is registered for sale, the Funds may deduct from fees paid
to the Advisor and Administrator their proportionate share of such excess
expenses to the extent of the fees payable. As a result of the passage of
the National Securities Markets Improvement Act of 1996, all state expenses
limitations have been eliminated at this time.
The Fund retained Bhirud Associates, Inc. ("BAI") to act as Administrator
for the Fund from November 1, 1994. BAI provided administrative services
for the Fund. During the year ended July 31, 2000 the Administrator elected
to defer the payment of Administrative service fees payable in the amount
of $4,162.
From December 1, 1996, the FirStar Bank, N.A. has been providing custodian
services and from February 1st, 1998, fund accounting and transfer agency
functions are provided by Mutual Shareholders Services LLC.
5. ORGANIZATION EXPENSES
The organizational expense was amortized over the first five years of the
Fund's operations and is now zero going forward.
6. DISTRIBUTION PLAN
The Fund's Board of Directors has adopted a distribution plan (the "Plan")
under Section 12(b) of the Investment Company Act of 1940 and Rule 12b-1
thereunder. The Plan provides that the Portfolio may bear certain expenses
and costs which in the aggregate are subject to a maximum of 0.25% per
annum of the Portfolio's average daily net assets. For the year ended July
31st, 2000, the Fund has incurred distribution costs of $5,119 payable to
Bhirud Associates, Inc.
7. TRANSACTIONS WITH AFFILIATES
During the year ended July 31st, 2000 the Fund paid $ 20,229 brokerage
commissions to Bhirud Associates, Inc.
8. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with generally accepted accounting principals, the Fund
recorded reclassifications in the capital accounts. The Fund recorded a
permanent book/tax difference of $(49,498) as of July 31, 2000, from
undistributed net investment income to paid in capital. These
reclassifications have no impact on net asset value of the Fund and are
designed generally to present undistributed income and realized gains on a
tax basis which is considered to be more informative to the shareholder.
Van Buren & Hauke, LLC
Certified Public Accounts
63 Wall Street, Suite 2501, New York, NY 10005
Report of Indedependent Certified Public Accountants'
Shareholders and Board of Directors
Bhirud Funds Inc.
We have audited the accompanying statements of assets and liabilities of
the Apex Mid Cap Growth Fund (a portfolio of Bhirud Funds Inc.), including the
portfolio of investments, as of July 31, 2000, and the related statement of
operations, the statement of changes in net assets, and financial highlights for
the year then ended. 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
audit.
We conducted our audit 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 confirmation of securities owned as of July
31, 2000 by correspondence with the custodian. 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 audit provides 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 the
Apex Mid Cap Growth Fund at July 31, 2000, the results of its operations and
changes in net assets and financial highlights for the year then ended in
conformity with generally accepted accounting principles.
September 13, 2000
THE APEX MID CAP GROWTH FUND
c/o Bhirud Funds Inc.
SOUNDVIEW PLAZA
1266 EAST MAIN STREET
STAMFORD, CT 06902
(877) 593-8637
BOARD OF DIRECTORS
Suresh L. Bhirud* Chairman of the Board; President of
Bhirud Associates, Inc.
Alexander N. Crowder, III Management Consultant
Harish L. Bhirud* Bhirud Funds Inc..
M. John Sterba, Jr. Chairman of Investment Management Advisors, Inc.
Tim Fenton Partner, Fenton & Zelenetz, Inc.
* "Interested person" as defined in the Investment Company Act of 1940.
OFFICERS
Suresh L. Bhirud* Chairman of the Board & Treasurer
Harish L. Bhirud* Vice-President
Investment Advisor & DistributorBhirud Associates, Inc.
Administrator Bhirud Associates, Inc.
Custodian FirStar Bank, N.A.
Legal Counsel Sherman & Sterling
Independent Auditors Van Buren & Hauke, LLC
The Apex Mid Cap Growth Fund
The line graph below shows how a $10,000 investment in the Fund made on December
23,1992 (the date the fund began to invest in assets other than cash or cash
equivalents in accordance with its investment objectives) would have become
$6,955 (as of July 31,2000). The line graph shows how this compares to the
broad- based Standard & Poor's 500 Index and the Fund's benchmark, the
Standard & Poor's MidCap 400 Index, over the same period.
[Graph]
The line graph includes the initial sales charge (the maximum sales load of
5.75%) on the Fund (no comparable charge exists
for the Standard & Poor's indices). All Fund performance numbers represent past
performance numbers, and are no guarantee of future results.
Page: 10
