<PAGE>
KENILWORTH FUND, INC.
One First National Plaza
Suite 2594
Chicago, Illinois 60603
(312)236-5388
ANNUAL REPORT
December 31, 1995
Dear Fellow Shareholders:
1995 was a good year for our Fund, as it was generally for
most investors. The Fund's net asset value rose from $9.64
at the beginning of the year, to a high of $12.98 in
November, while finishing the year at $12.34 before dividends
and $11.93 after distributing $.41 of income and capital gain
dividends. The Fund's total return for the year ended
December 31, 1995 was 28.03%.
As you may recall, The Wall Street Journal in a front page
article on small "young" mutual funds singled out our Fund
for its performance and its investment advisor's experience.
Most shareholders responded favorably to the good press,
several increased their holdings in the Fund as a result of
the article. We continue to attract new shareholders and new
assets. Shareholders have increased by 27%, and total
shareholder assets have increased to over $5 million since
the end of 1994. We hope to achieve total assets of $10
million by the end of 1996.
Technology stocks proved to be volatile in 1995, hence the
Fund took short-term profits whenever the opportunity arose.
We expect 1996 will be another good year for the Fund.
We sincerely thank you for your continued support
Ms. Mohini C. Pai, President
Ms. Savitri P. Pai, Secretary/Treasurer
Portfolio Manager: The Fund's portfolio manager, Mr. B.
Padmanabha Pai, founded Institutional Portfolio Services
Ltd. an investment advisory organization. He has been
managing pension funds, personal trusts, university
endowments and funds for wealthy individuals for the last
twenty-six years. Prior to portfolio management he taught
investment theory at the university level.
<PAGE>
Performance: This graph shows the growth of a $10,000
investment in your Fund and compares it to the S&P 500 index.
For the period beginning July 1, 1993 and ending December 31, 1995
your investment in the Fund would be $12,903 as compared to a
theoretical investment in the S&P 500 which would have grown
to $15,327. This performance includes the reinvestment of dividends.
<TABLE>
<CAPTION>
Cumulative Total Returns
Periods ended December 31, 1995 Past 1 Year Life of Fund
<S> <C> <C>
Kenilworth Fund, Inc. 28.03% 24.72%
S&P 500 37.57% 46.35%
</TABLE>
Cumulative total returns reflect the Fund's actual
performance over a set period. The Fund
began operations on July 1, 1993.
<TABLE>
<CAPTION>
Average Annual Returns
Periods ended December 31, 1995 Past 1 Year Life of Fund
<S> <C> <C>
Kenilworth Fund, Inc. 28.03% 9.23%
S&P 500 37.57% 16.45%
</TABLE>
Average annual returns take the Fund's actual (or cumulative)
return and show you what would have happened if the Fund had
performed at a constant rate each year.
Total returns and yields are based on past results and are
not indicative of future
performance.
<PAGE>
KENILWORTH FUND, INC.
STATEMENT OF NET ASSETS
December 31, 1995
<TABLE>
<CAPTION>
Shares or Market
COMMON STOCKS 95.39%a Principal Amt. Cost Value Percent
<S> <C> <C> <C> <C> <C>
Autos 5.16%
Federal Signal 2,500 $48,613 $64,687 1.27
Ford Motor 4,000 124,843 115,500 2.27
Chrysler Corp. 1,500 78,293 82,687 1.62
Construction 0.40%
Empresas ICA Sociedad 2,000 20,140 20,500 0.40
Computer-Semiconductor 18.02%
Intel Corp. 9,000 442,338 510,750 10.02
Applied Materials, Inc.*6,000 230,425 236,250 4.63
Credence Systems Corp.* 1,000 29,320 22,875 0.45
Cypress Semiconductor* 6,000 118,698 75,750 1.48
Electro Scientific Ind.*1,000 27,695 29,250 0.57
Tower Semiconductor* 2,000 52,390 44,250 0.87
Computer Software 8.55%
Adaptec, Inc.* 6,300 200,563 58,300 5.06
Adobe Systems, Inc. 500 25,500 31,000 0.61
Oracle Systems, Inc.*1,500 58,500 63,563 1.25
Silicon Graphics* 3,000 110,430 82,875 1.63
Computer Systems 9.85%
Hewlett-Packard 6,000 339,830 502,500 9.85
Drugs 5.54%
Merck & Co. 3,000 111,585 196,875 3.86
Bristol-Myers Squibb 1,000 55,758 85,875 1.68
Electrical Equipment 4.24%
General Electric 3,000 146,605 216,000 4.24
Finance 13.84%
Federal National Mortgage3,000 260,398 371,625 7.29
Federal Home Loan Mortgage4,000 255,105 334,000 6.55
Home Appliance 1.04%
Whirlpool Corp 1,000 50,445 53,250 1.04
</TABLE>
<PAGE>
KENILWORTH FUND, INC.
STATEMENT OF NET ASSETS
December 31, 1995
<TABLE>
<CAPTION>
Shares or Market
COMMON STOCKS Principal Amt. Cost Value Percent
<S> <C> <C> <C> <C> <C>
Home Furnishing 0.90%
Heilig-Meyers 2,500 46,175 45,938 0.90
Insurance 0.62%
Loews Corp. 400 29,314 31,350 0.62
Metals 1.83%
Phelps Dodge 1,500 95,918 93,375 1.83
Media 2.65%
Grupo Televisa 6,000 130,920 135,000 2.65
Retail 0.86%
Casey's General Stores 2,000 47,140 43,750 0.86
Telecommunications 11.95%
Motorola, Inc. 7,000 395,750 399,000 7.82
ADC Telecommunication*3,500 95,875 127,750 2.50
Comp. De Telefones De Chile1,000 77,195 82,875 1.63
Utility-Gas & Electric 4.90%
Baltimore Gas & Electric 4,000 95,030 114,000 2.23
General Public Utilities 4,000 118,155 136,000 2.67
Utilities-Telephone 5.04%
Telefonos De Mexico 4,000 130,905 127,500 2.50
A. T. & T 2,000 125,453 129,500 2.54
Total Investments 4,175,304 4,864,400
CASH AND RECEIVABLES
NET OF LIABILITIES 4.61% 234,969 234,969
TOTAL NET ASSETS 100.00% $4,410,273 $5,099,369
(Equivalent to $11.93 per share based on
427,355 shares of capital stock outstanding)
a Percentages for various classifications relate to total
net assets.
*Non-income producing security.
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
KENILWORTH FUND, INC.
STATEMENT OF OPERATIONS
Year Ended
INVESTMENT INCOME Dec. 31, 1995
INCOME:
Dividends $70,875
Interest 27,119
Total Income 97,994
EXPENSES:
Investment Advisory Fees 43,866
Registration Fees 1,340
Administrative and Management Fees 20,000
Insurance 1,350
Auditing 7,073
Banking Expenses 40
Annual Meeting 500
Printing and Postage 49
Custodian 72
Dues and Subscriptions 832
Accounting Consulting 185
Other Expenses 100
Total Expenses 75,407
Expenses Reimbursed By Advisor (1,130)
Total Expenses Net of Reimbursement 74,277
NET INVESTMENT INCOME: 23,717
NET REALIZED GAIN ON INVESTMENTS 153,265
NET INCREASE IN UNREALIZED APPRECIATION
ON INVESTMENTS 819,952
NET REALIZED GAIN AND UNREALIZED APPRECIATION
ON INVESTMENTS 973,217
NET INCREASE IN NET ASSETS FROM OPERATIONS $996,934
The accompanying notes are an integral part of these financial
statements.
<PAGE>
KENILWORTH FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended Year Ended
OPERATIONS: Dec. 31, 1995 Dec.31,1994
<S> <C> <C>
Net Investment Income $23,717 $20,713
Net Realized Gain (Loss)
on Investments 153,265 (5,595)
Net Increase (Decrease)
in Unrealized Appreciation
on Investments 819,952 (202,637)
Increase (Decrease) in Net Assets
from Operations 996,934 (187,519)
DISTRIBUTIONS to SHAREHOLDERS:
Distributions from
Net Investment Income (23,717) (20,713)
Distributions from Net Realized
Gains on Investments (147,670) 0
Decrease in Net Assets
resulting from Distributions (171,387) (20,713)
CAPITAL SHARE TRANSACTIONS:
Proceeds From Shares Issued
(55,220 and 89,402 shares issued, respectively)
669,415 887,666
Cost of Shares Redeemed
(5,011 and 559 shares redeemed, respectively)
(58,468) (5,480)
Reinvested Dividends
(11,097 and 1,682 shares, respectively)
132,388 16,214
Increase in Net Assets from Capital Share Transactions
743,335 877,687
Total Increase in Net Assets 1,568,882 690,168
NET ASSETS AT BEGINNING OF PERIOD
(366,049 and 275,524 shares outstanding, respectively)
3,530,487 2,840,319
NET ASSETS AT END OF PERIOD
(427,355 and 366,049 shares outstanding, respectively)
$5,099,369 $3,530,487
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
KENILWORTH FUND, INC.
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
\ For the Years Ended December 31
1995 1994 1993a
<S> <C> <C> <C>
Selected Per-Share Data
Net Asset Value,
beginning of period.........$9.64 $10.31 $10.00
Income from Investment Operations
Net Investment Income.......0.06b 0.06b 0.05
Net Realized and Unrealized
Gain (Loss) on Investments..2.64 (0.67) 0.31
Total . . . . . . 2.70 (0.61) 0.36
Less Distributions
From Net Investment Income...0.06 0.06 0.05
From Net Realized Gains 0.35 0.00 0.00
Total . . . . . . 0.41 0.06 0.05
Net Asset Value,
end of period..............$11.93 $9.64 $10.31
Total Return . . . . . . . . . 28.03% (5.95%) 7.16%c
Ratios and Supplemental Data
Net Assets,
end of period (in thousands)$5,099 $3,530 $2,840
Ratio of Net Expenses
to Average Net Assets.......1.69%b 1.70%b 0.52%
Ratio of Net Investment Income
to Average Net Assets . . . 0.54%b 0.67%b 0.65%
Portfolio Turnover Rate. . . .82.17% 11.78% 0.00%
aJuly 1, 1993 (commencement of operations) to December 31, 1993.
bNet of reimbursement of expenses by Advisor.
cAnnualized.
</TABLE>
The accompanying notes are an integral part of these financial
statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
December 31, 1995
The Kenilworth Fund, Inc., (the "Fund") is registered under the
Investment Company Act of 1940 as a no-load, open-end,
non-diversified management investment company.
1. Summary of Significant Accounting Policies
a. The Fund is registered under the Investment Company Act
of 1940 as a no-load, open-end, non-diversified management
investment company. Its books and records are maintained on the
accrual basis. Securities are valued at their last sale price as
reported on a securities exchange, or at their last bid price as
applicable. Short term instruments are valued at cost which
approximates market value. Cost amounts, as reported on the
statement of net assets, are the same for federal income tax
purposes. For the year ended December 31, 1995, purchases and
sales of investment securities were $4,285,457 and $3,611,133
respectively.
b. Security transactions are accounted for on the trade
date and dividend income is recorded on the ex-dividend date.
Interest income is recorded on the accrual basis. Realized gains
and losses from security transactions are reported on an
identified cost basis.
c. Provision has not been made for federal income tax since
the Fund has elected to be taxed as a "regulated investment
company" and intends to distribute substantially all its income
to its shareholders and otherwise comply with the provisions of
the Internal Revenue Code applicable to regulated investment
companies.
d. As of December 31, 1995 there were 10,000,000 shares of
capital stock authorized.
e. The preparation of financial statements in conformity
with generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those
estimates.
2. Investment Adviser and Investment Advisory Agreement and
Transactions with Related Parties:
The Fund has signed two agreements with Institutional
Portfolio Services, Ltd., ("IPS"), with whom certain officers of
the Fund are affiliated. Under the terms of the first agreement
(the investment advisory agreement) the Fund will pay IPS a
monthly investment advisory fee at the annual rate of 1.0% of
the daily net assets of the Fund. Under the terms of the second
agreement (the administrative and management services agreement)
the Fund will pay IPS a yearly administrative and management
services fee of $20,000 per year payable on a quarterly basis.
The advisory agreement requires the adviser to reimburse the Fund
in the event that the expenses of the Fund in any fiscal year
exceed 1.7%.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1995
3. Fair Value Of Financial Statements
Substantially all of the Fund's assets and liabilities are
considered financial instruments as defined by Statement of
Financial Accounting Standards No. 107 and are either already
reflected at fair value or are short-term or replaceable on
demand. Therefore, their carrying amounts approximate fair
values.
4. Sources of Net Assets:
As of December 31, 1995, the sources of net assets were as
follows:
Fund shares issued and outstanding $4,410,273
Unrealized Appreciation of Investments 689,096
Total $5,099,369
Aggregate Net Unrealized Appreciation as of December 31, 1995
consisted of the following:
Aggregate gross unrealized appreciation: $793,106
Aggregate gross unrealized deprecation: (104,010)
Net unrealized appreciation: $689,096
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors
of the Kenilworth Fund, Inc.
We have audited the accompanying statement of net assets of the
Kenilworth Fund, Inc. as of December 31, 1995, the related
statement of operations for the year then ended, the statements
of changes in net assets for each of the two years in the period
then ended and financial highlights for the years ended December
31, 1995 and December 31, 1994 and the period ended December 31,
1993. 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 the
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 verification by
examination of securities owned as of December 31, 1995. 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 Kenilworth Fund, Inc. as of December
31, 1995, results of its operations for the year then ended,
changes in its net assets for each of the two years then ended,
and the financial highlights for each of the two years in the
period ended December 31, 1995 and the period ended December 31,
1993 in conformity with generally accepted accounting principles.
CHECKERS, SIMON & ROSNER, LLP
Chicago, Illinois
January 15, 1996
