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Previous: PIC SMALL CAP PORTFOLIO, N-30D, 1999-01-11 |
Next: RENAISSANCERE HOLDINGS LTD, 8-K, 1999-01-11 |
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1998
ASSETS:
Investments, at market (identified cost $2,097,097) $ 2,553,243
Receivables:
Dividends and interest 1,283
Fund shares sold 21,056
Reimbursement by manager 38,450
Deferred organization costs 4,480
Other assets 1,509
-----------
Total assets 2,620,021
-----------
LIABILITIES:
Payables:
Investment securities purchased 18,387
Accrued expenses 11,229
-----------
Total liabilities 29,616
-----------
NET ASSETS $ 2,590,405
===========
NET ASSETS CONSIST OF:
Common stock $ 150
Additional capital paid - in 2,082,230
Undistributed net investment income (14,744)
Accumulated realized loss on investments 66,623
Net unrealized gain on investments 456,146
-----------
Total Net Assets $ 2,590,405
===========
Shares outstanding (500,000,000 shares of $0.001
par value authorized) 149,661
Net Asset Value, offering and redemption price per share $ 17.31
===========
See notes to financial statements.
11
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1998 1997
----------- ---------
OPERATIONS:
Net investment income (loss) $ (14,744) $ (1,195)
Net realized gain on investments 68,147 5,357
Change in unrealized appreciation on investments 314,248 126,582
----------- ---------
Net increase in net assets from operations 367,651 130,744
----------- ---------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (1,712)
Net realized gains (6,727) (151)
----------- ---------
Total distributions (6,727) (1,863)
----------- ---------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold 1,662,691 438,766
Proceeds from shares issued to holders
In reinvestment of dividends 6,727 1,662
Cost of shares redeemed (401,653) (73,472)
Net increase in net assets from Fund share
Transactions 1,267,765 366,956
TOTAL INCREASE IN NET ASSETS 1,628,689 495,837
----------- ---------
NET ASSETS:
Beginning of period 961,716 465,879
----------- ---------
End of period $ 2,590,405 $ 961,716
=========== =========
See notes to the financial statements.
12
<PAGE>
FINANCIAL HIGHLIGHTS
May 17, 1996(1)
Year Ended Year Ended through
October 31, October 31, October 31,
1998 1997 1996
-------- -------- --------
NET ASSET VALUE-
BEGINNING OF PERIOD $ 13.23 $ 10.59 $ 10.00
INVESTMENT OPERATIONS:
Net Investment Income (0.10) (0.01)(2) 0.04
Net Realized and
Unrealized Gain on
Investments 4.27 2.69 0.55
-------- -------- --------
Totals from Investment
Operations 4.17 2.68 0.59
-------- -------- --------
DISTRIBUTIONS:
From Net
Investment Income -- (0.04) --
From Net Realized
Capital Gains (0.09) -- --
-------- -------- --------
Total Distributions (0.09) -- --
-------- -------- --------
NET ASSET VALUE-
END OF PERIOD $ 17.31 $ 13.23 $ 10.59
======== ======== ========
TOTAL RETURN 31.52% 25.41% 5.90%(3)
RATIOS/SUPPLEMENTAL DATA
Net Assets, end of period
(in 000's) $ 52,590 $ 961 $ 466
Ratio of Expenses to
Average Net Assets(4,5) 1.75% 1.75% 1.42%
Ratio of Net Investment
Income to Average Net
Assets (0.86)% (0.18)% 0.86%
Portfolio Turnover Rate 66.49% 27.07% 21.61%
(6) Commencement of Operations
(7) Net Investment Loss is calculated using ending balances prior to
consideration of adjustments for permanent book and tax differences.
(8) Not annualized for the period May 17, 1996 through October 31, 1996.
(9) Annualized for the period may 17, 1996 through October 31, 1997.
(10) Without expense waivers of $51,285, $94,353 and $47,931 for the periods
ending October 31, 1998, 1997 and 1996 respectively, the ratio of expenses
to average net assets would have been 4.73$, 16.08% and 49.81% and the
ratio of net investment (loss) to average net assets would have been
(3.85)%, (14.51)% and (47.52)%. See Notes to Financial Statements
THE NOAH FUND
SCHEDULE OF INVESTMENTS OCTOBER 31, 1998
- --------------------------------------------------------------------------------
Value
Shares (Note 2)
------ --------
COMMON STOCK -- 96.89%
ADVERTISING -- 0.45%
Interpublic Group of Companies, Inc. 11,700
200
----------
BANKING --5.59%
CitiGroup, Inc. 65,800
1,400
Comerica, Inc. 6,450
100
Fifth Third Bancorp 26,500
400
First Tennessee National Corp 12,675
400
Mellon Bank Corp 6,013
100
National Commercial Bancorp 10,650
600
Northern Trust Corp 16,594
225
----------
144,682
----------
BUILDING CONSTRUCTION -- 0.31%
Champion Enterprises 7,950
400
----------
BUSINESS SERVICES -- 2.68%
Automatic Data Processing, Inc. 38,906
500
Computer Sciences Corp* 10,550
200
Paychex, Inc. 19,900
400
----------
69,356
----------
CABLE TELEVISION SERVICES -- 1.24%
Comcast Corp 32,094
650
----------
COMPUTER & OFFICE EQUIPMENT -- 11.77%
Cisco Systems, Inc.* 106,628
1,692
Compaq Computer Corp 12,650
400
Dell Computer* 62,344
950
Intel Corp. 84,728
950
Pitney Bowes, Inc. 38,544
700
----------
304,894
----------
CONSUMER PRODUCTS -- 4.33%
Colgate Palmolive Co. 61,863
700
Ecolab, Inc. 11,950
400
The Clorox Company 38,238
350
----------
112,051
----------
FINANCIAL SERVICES -- 9.25%
Associates First Capital Corp
300 21,150
Capital One Financial Corp
250 25,438
Fannie Mae 63,731
900
Federal Home Loan Mortgage Corp 69,000
1,200
Finova Group 9,750
200
MBNA Corp 30,797
1,350
Providian Financial Corp 19,844
250
----------
239,710
----------
FOOD & BEVERAGE -- 3.60%
Coca-Cola Co. 74,388
1,100
Sysco Corp* 18,856
700
----------
93,244
----------
HUMAN RESOURCES -- 0.14%
Romac International, Inc.* 3,500
200
----------
INSURANCE -- 3.39%
General Re Corp 87,875
400
----------
INTERNET SERVICES -- 6.35%
Amazon, Inc.* 25,287
200
America Online, Inc. 78,779
620
Lycos, Inc.* 8,125
200
Yahoo, Inc.* 52,338
400
----------
164,529
----------
MANUFACTURING -- 0.71%
Danaher Corp 11,981
300
Illinois Tool Works
100 6,413
----------
18,394
----------
MEDICAL SERVICES -- 1.81%
Cardinal Health, Inc 35,461
375
HBO & Co. 7,875
300
Health Management Assoc.* 3,563
200
----------
46,899
----------
OFFICE SUPPLIES -- 2.41%
Staples, Inc.* 47,306
1,450
Office Depot, Inc.* 15,000
600
----------
62,306
----------
PHARMACEUTICALS -- 14.21%
Abbott Labs
1,745 81,906
Lilly (Eli) & Co.
500 40,469
Merck & Co.
225 30,431
Pfizer, Inc.
1,240 133,068
Schering Plough Corp.
800 82,300
----------
368,174
----------
PRECISION INSTRUMENTS & MEDICAL SUPPLIES -- 1.41%
Guidant Corp 30,600
400
Hillenbrand Industries 5,919
100
----------
36,519
----------
RETAIL STORES - 14.81%
BJ's Wholesale Club, Inc.* 28,750
800
Costco Companies, Inc.* 65,261
1,150
CVS Corp 25,127
550
Dollar Tree Stores, Inc.* 23,137
600
Gap, Inc. 21,043
350
Home Depot, Inc. 60,900
1,400
Kroger Company* 27,750
500
Safeway, Inc.* 33,468
700
Wal Mart Stores, Inc. 98,325
1,425
----------
383,761
----------
SOFTWARE -- 4.08%
Microsoft Corp 105,874
1,000
----------
TELECOMMUNICATIONS --8.35%
Airtouch Communications* 22,400
400
Lucent Technologies 76,178
950
MCI Worldcom, Inc.* 55,250
1,000
SBC Communications 62,522
1,350
----------
216,350
----------
TOTAL COMMON STOCK (COST $2,053,716) 2,509,862
----------
MISCELLANEOUS ASSETS -- 1.67%
CoreFund (Cost $43,381) 43,381
43,381
----------
Total Investments (Cost $2,097,097) -- 98.56% $2,553,243
----------
Other Assets and Liabilities -- 1.44% 37,162
----------
TOTAL NET ASSETS -- 100.00% $2,590,405
==========
<PAGE>
NOTES TO THE FINANCIAL STATEMENTS
OCTOBER 31, 1997
THE NOAH FUND
- --------------------------------------------------------------------------------
NOTES TO THE FINANCIAL STATEMENTS
October 31, 1998
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The Noah Investment Group, Inc. (the "Company") was incorporated under the
laws of the state of Maryland on December 16, 1992, and consists solely of The
Noah Fund (the "Fund"). The Company is registered as a no-load, open-end
diversified management investment company of the series type under the
Investment Company Act of 1940 (the "1940 Act"). The primary investment
objective of the Fund is to seek capital appreciation consistent with the
preservation of capital, as adjusted for inflation, and current income. The Fund
will not invest in and may not acquire the securities of businesses that are
engaged, directly or through subsidiaries, in the alcoholic beverage, tobacco,
pornographic and gambling industries or companies in the business of aborting
life before birth. The Fund became effective with the Securities and Exchange
Commission ("SEC") on May 10, 1996 and commenced operations on May 17, 1996.
The costs incurred in connection with the organization, initial
registration and public offering of shares, aggregating $17,797, have been paid
by the Manager and will be reimbursed by the Fund. These costs are being
amortized over the period of benefit, but not to exceed sixty months from the
Fund's commencement of operations. The proceeds of any redemption of the initial
shares (seed money) by the original stockholder or any transferee will be
reduced by a pro-rata portion of any then unamortized organizational expenses in
the same proportion as the number of initial shares being redeemed bears to the
number of initial shares outstanding at the time of such redemption. On December
12, 1996, one of the original stockholders redeemed his shares which consisted
of 50 percent of the seed money. This stockholder's proceeds were reduced by 50
percent of the unamortized deferred organization asset ($15,756 at that time).
The unamortized deferred organization asset was reduced to $7,878 after the
adjustment. The adjusted balance will be amortized over the remaining
amortization period, not to exceed sixty months from the Fund's commencement of
operations.
<PAGE>
The following is a summary of significant accounting policies consistently
followed by the Fund.
a) Investment Valuation --- Common stocks and other equity-type securities
listed on a securities exchange are valued at the last quoted sales price on the
day of the valuation. Price information on listed stocks is taken from the
exchange where the security is primarily traded. Securities that are listed on
an exchange but which are not traded on the valuation date are valued at the
most recent bid prices. Unlisted securities for which market quotations are
readily available at the latest quoted bid price. Other assets and securities
for which no quotations are readily available are valued at fair value as
determined in good faith by the Investment Manager under the supervision of the
Board of Directors. Short-term instruments (those with remaining maturities of
60 days or less) are valued at amortized cost, which approximates market.
b) Federal Income Taxes --- No provision for federal income taxes has been made
since the Fund has complied to date with the provisions of the Internal Revenue
Code applicable to regulated investment companies and intends to so comply in
the future and to distribute substantially all of its net investment income and
realized capital gains in order to relieve the Fund from all federal income
taxes.
c) Distributions to Shareholders --- Dividends from net investment income and
distributions of net realized capital gains, if any, will be declared and paid
at least annually. Income and capital gain distributions are determined in
accordance with income tax regulations that may differ from generally accepted
accounting principles. The Fund's primary financial reporting and tax difference
relates to the differing treatment for the amortization of deferred organization
expenses. Permanent financial reporting and tax differences are reclassified to
additional capital paid-in.
d) Use of Estimates --- 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.
e) Other --- Investment and shareholder transactions are recorded on trade date.
The Fund determines the gain or loss realized from the investment transactions
utilizing an identified cost basis. Dividend income is recognized on the
ex-dividend date or as soon as information is available to the Fund, and
interest income is recognized on an accrual basis.
<PAGE>
2. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
Year Ended Year Ended
October 31, October 31,
1998 1997
-------- -------
Shares sold 102,577 35,309
Shares issued to holders in
reinvestment of dividends 472 152
Shares redeemed (26,084) (6,765)
-------- -------
Net Increase 76,965 28,696
======== =======
3. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of investments, excluding short-term
investments, by the Fund for the year ended October 31, 1998, were as follows:
Purchases:
U.S. Government $ 0
Other 2,316,502
Sales:
U.S. Government 0
Other 1,100,353
At October 31, 1998, gross unrealized appreciation and depreciation of
investments for tax purposes were as follows:
Appreciation $ 519,687
(Depreciation) (63,541)
Net appreciation on investments $ 456,146
---------
At October 31, 1998, the cost of investments for federal income tax
purposes was $2,098,625.
4. AGREEMENTS
The Fund has entered into a Management Agreement with Polestar Management
Company ("Polestar Management"). Pursuant to its Management Agreement with the
Fund, the Manager is entitled to receive a fee, calculated daily and payable
monthly, at the annual rate of 1.00% as applied to the Fund's daily net assets.
The Manager voluntarily agrees to reimburse its management fee and other
expenses to the extent that total operating expenses (exclusive of interest,
taxes, brokerage commissions and other costs incurred in connection with the
purchase or sale of portfolio securities, and extraordinary items) exceed the
annual rate of 1.75% of the net assets of the Fund, computed on a daily basis.
This voluntary reimbursement may be terminated upon approval of the Board of
Directors.
Polestar Management has obtained Geewax, Terker & Company to serve as the
Fund's sub-investment adviser.
Effective January 1, 1998, Declaration Service Company was engaged as
transfer agent, administrator and accounting services agent for the Fund.
Declaration Distributors, Inc. will act as underwriter/distributor of the Fund.
First Union National Bank, a publicly held bank holding company, serves as
custodian for the Fund.
<PAGE>
5. RELATED PARTY TRANSACTIONS
Martin V. Miller, Esq., an Officer of the Fund, furnishes legal services to
the Fund. For the year ended October 31, 1998, the Fund incurred $12,104 for
such services.
<PAGE>
SANVILLE AND COMPANY
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors of
The Noah Investment Group, Inc.:
We have audited the accompanying statement of assets and liabilities of The Noah
Fund (the "Fund") a portfolio of The Noah Investment Group, Inc., (a Maryland
Corporation), including the schedule of investments, as of October 31, 1998, the
related statement of operations for the year then ended, and the statements of
changes in net assets for the year then ended. These financial statements 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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. 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 audits provide 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
Noah Fund as of October 31, 1998, and the results of its operations, the changes
in its net assets and its financial highlights for the year then ended, in
conformity with generally accepted accounting principles.
/s/ SANVILLE & COM,PANY
CERTIFIED PUBLIC ACCOUNTANTS
Abbington, Pennsylvania
December 13, 1998
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