<PAGE> 1
THE ROULSTON FAMILY OF FUNDS
ANNUAL REPORT
November 27, 1995
Dear Shareholder,
We are pleased to issue the financial report on The Roulston Family of Funds
for the year ended October 31, 1995.
During this fiscal year, both equity funds, the Roulston Midwest Growth Fund
and the Roulston Growth and Income Fund, as well as the Roulston Government
Securities Fund provided positive returns. The Roulston Midwest Growth Fund
gained 18.17% during the period and the Roulston Growth and Income Fund gained
17.36%. These returns were earned during a period when the market, as measured
by the Standard & Poor's 500 Stock Index, gained by 26.38%. The Roulston
Government Securities Fund gained 14.76% during the period while the Lehman
Brothers Intermediate Treasury Bond Index increased by 11.75%.
In the commentary that follows on each of the Funds, you will note a common
theme that has long been a landmark of our investment management. Research is
the cornerstone of our investment process. Our research efforts for The Roulston
Family of Funds gives us confidence in the future of the economy and the
portfolios we manage on your behalf.
Sincerely,
/s/ Scott D. Roulston /s/ Joseph A. Harrison
-------------------------- ---------------------------
Scott D. Roulston Joseph A. Harrison
President Director of Investments
<PAGE> 2
THE ROULSTON FAMILY OF FUNDS -- INVESTMENT ADVISERS REPORT
- --------------------------------------------------------------------------------
ECONOMIC TRENDS AND OUTLOOK
During the year ended October 31, 1995, economic activity slowed in response
to the monetary restraint imposed by the Federal Reserve during the preceding
year. Most measures of economic activity are posting slower growth rates than
the year before, but are continuing to grow. Capital spending and export growth
remain the driving engines of this expansion.
Continued efforts to reduce costs, bolstered by strong profits, inject this
capital spending cycle with an element of stability and longevity that is
reassuring. Slower growth overseas has put some pressure on our exports, but
growth remains strong reflecting the favorable competitive position of U.S.
manufacturing and service industries. Continued efforts to improve productivity
offer the promise that export growth will remain a driver for the domestic
economy.
Consumer and public sector spending will remain the restraining elements on
the economy. Overall economic growth approaching 3% with inflation under control
should provide a favorable setting for both the bond and stock markets.
ROULSTON MIDWEST GROWTH FUND
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
The graph below compares the increase in value of a $10,000 investment in
Roulston Midwest Growth Fund with the performance of the Standard & Poor's 500
Stock and Lipper Growth Fund Indices.
<TABLE>
ROULSTON MIDWEST GROWTH FUND
(Assuming $10,000 invested at inception)
Past performance is not indicative of future results.
<CAPTION>
Period
7/1/93 7/93 10/93 1/94 4/94 7/94 10/94 1/95 4/95 7/95 10/95
------ ---- ----- ---- ---- ---- ----- ---- ---- ---- -----
VALUE (In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Roulston Midwest Growth Fund $10,000 $10,200 $11,090 $11,730 $11,847 $11,796 $12,298 $12,222 $13,327 $14,950 $14,532
Standard & Poor's 500 Stock Index 10,000 9,970 10,480 10,862 10,241 10,482 10,880 10,914 12,019 13,207 13,750
Lipper Growth Fund Index 10,000 9,988 10,653 11,088 10,479 10,457 10,871 10,587 11,631 13,127 13,478
</TABLE>
<TABLE>
<CAPTION>
Average Annual
Total Return
- ---------------------
Since
One Year Inception
- -------- ---------
<S> <C>
18.17% 17.34%
</TABLE>
2
<PAGE> 3
THE ROULSTON FAMILY OF FUNDS -- INVESTMENT ADVISERS REPORT
- --------------------------------------------------------------------------------
The Fund was established to achieve capital appreciation through the
investment in equity securities of companies that are headquartered in the eight
state area contiguous to the Great Lakes.
Investment decisions are driven by intense and continuous fundamental
research. This research focus attempts to uncover a combination of internal and
external change at a company that presents an unusual appreciation potential.
While the Fund's objective is growth, investments are not limited to growth
stocks. We seek opportunities in a broad spectrum of investments from
traditional growth companies to highly cyclical companies.
Some examples include:
R.G. BARRY
This highly successful consumer marketing company known primarily for its
Dearfoam slippers, is developing a variety of new products such as Pyrex
Portables using its new proprietary heat retention technology.
NATIONAL AUTO CREDIT
The company is undergoing a complete change from an insurance car rental
company (Agency Rent-A-Car) to a used car finance company.
ACME CLEVELAND
The sale of the traditional machine and cutting tool business combined with
an aggressive expansion of the telecommunications and industrial test and
control equipment businesses are drastically changing the nature of this
company.
Divergent demand trends and margin pressures should put even greater
emphasis on a research driven stock selection process in the year ahead. The
Midwest secular trends of increased productivity, global competitiveness and
strong demand, and continuing manufacturing and service diversity should
continue to present investment opportunities.
3
<PAGE> 4
THE ROULSTON FAMILY OF FUNDS -- INVESTMENT ADVISERS REPORT
- --------------------------------------------------------------------------------
ROULSTON GROWTH AND INCOME FUND
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
The graph below compares the increase in value of a $10,000 investment in
Roulston Growth and Income Fund with the performance of the Standard & Poor's
500 Stock and Lipper Growth & Income Fund Indices.
<TABLE>
ROULSTON GROWTH AND INCOME FUND
(Assuming $10,000 invested at inception)
Past performance is not indicative of future results.
<CAPTION>
Period
7/1/93 7/93 10/93 1/94 4/94 7/94 10/94 1/95 4/95 7/95 10/95
------ ---- ----- ---- ---- ---- ----- ---- ---- ---- -----
VALUE (In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Roulston Growth & Income Fund $10,000 $10,030 $10,398 $10,894 $10,682 $10,900 $10,889 $10,940 $11,746 $12,541 $12,780
Standard & Poor's 500 Stock Index 10,000 9,970 10,480 10,862 10,241 10,482 10,880 10,914 12,019 13,207 13,750
Lipper Growth & Income Fund Index 10,000 10,054 10,606 11,051 10,478 10,677 10,941 10,778 11,759 12,799 13,125
</TABLE>
<TABLE>
<CAPTION>
Average Annual
Total Return
- -----------------------
Since
One Year Inception
- ------------------------
<S> <C>
17.36% 11.07%
</TABLE>
The Fund was established to achieve capital appreciation and current income
primarily through investment in common stocks or securities convertible into
common stocks.
The investment policy is to invest in a diversified portfolio of dividend
paying common stocks which have been researched by our own staff and offer
reasonable valuation based on the ratio of price to earnings, book value and
cash flow.
Our investment strategy is to seek out companies that meet the demanding
fundamental analysis of our research staff. Visits with management, suppliers,
customers, distributors and unions are among the sources utilized by our
analysts to form judgments about the outlook for each company. The results of
this analysis are joined with rigorous valuation for each investment in the
portfolio.
Two industrial companies that typify our investment approach are TRW and
Johnson Controls. Both companies are reasonably valued by the marketplace,
reflecting their reliance on the automotive industry
4
<PAGE> 5
THE ROULSTON FAMILY OF FUNDS -- INVESTMENT ADVISERS REPORT
- --------------------------------------------------------------------------------
for a substantial portion of their earnings. Yet, each company has established
itself as an innovative low cost producer able to sustain strong earnings in a
difficult automotive environment.
Currently the Fund is diversified among thirty-seven investments
representing most sectors of our economy. Based on our broad based research
effort we continue to be impressed with the favorable outlook for well-managed
companies that have taken the requisite action to improve profitability.
Conversations with a broad cross section of managements point to continued
strong earnings domestically. A strong relative competitive position for U.S.
manufacturers enhance the earnings outlook for many companies. We will continue
to seek out those companies that present a favorable earnings outlook at prices
that offer a good value.
ROULSTON GOVERNMENT SECURITIES FUND
ILLUSTRATION OF AN ASSUMED INVESTMENT OF $10,000
The graph below compares the increase in value of a $10,000 investment in
Roulston Government Securities Fund with the performance of the Lehman Brothers
Intermediate Treasury Bond Index.
<TABLE>
ROULSTON GOVERNMENT SECURITIES FUND
(Assuming $10,000 invested at inception)
Past performance is not indicative of future results.
<CAPTION>
Period
7/1/93 7/93 10/93 1/94 4/94 7/94 10/94 1/95 4/95 7/95 10/95
------ ---- ----- ---- ---- ---- ----- ---- ---- ---- -----
VALUE (In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Roulston Government Securities Fund 10,000 10,000 10,304 10,346 9,649 9,748 9,558 9,733 10,170 10,628 10,968
Lehman Brothers Intermediate Treasury 10,000 10,019 10,236 10,328 9,972 10,118 10,067 10,215 10,588 10,963 11,249
Bond Index
</TABLE>
<TABLE>
<CAPTION>
Average Annual
Total Return
- -----------------------
Since
One Year Inception
- ------------------------
<S> <C>
14.76% 4.03%
</TABLE>
<PAGE> 6
THE ROULSTON FAMILY OF FUNDS -- INVESTMENT ADVISERS REPORT
- --------------------------------------------------------------------------------
In order to meet its objective of current income with preservation of
capital, the Fund seeks to minimize credit risk by investment in securities
issued directly by the U.S. Government. Because changes in interest rates affect
the value of the Fund's holdings, investment in issues maturing in less than ten
years are the primary focus of the portfolio.
During this past year bond prices recovered from the violent reaction of the
preceding year. This return to lower interest rates was occasioned by slower
economic growth and a calming of inflation fears. It has been nearly thirty
years since we have enjoyed four consecutive years with inflation at 3.0% or
less. Our outlook calls for continued moderate growth and low inflation. This
should provide a favorable environment for the bond market.
REORGANIZATION
On April 29, 1995, pursuant to an Agreement and Plan of Reorganization and
Liquidation, the Midwest Growth Fund, the Growth and Income Fund and the
Government Fund of The Roulston Family of Funds (the "Trust") acquired in a tax
free reorganization, all of the assets of each of the Midwest Growth Fund, the
Growth and Income Fund and the Government Fund (collectively, the "Acquired
Funds") of the Advisors' Inner Circle Fund, a Massachusetts business trust,
respectively, in exchange for the assumption of such Acquired Fund's liabilities
and a number of full and fractional shares of the corresponding Fund of the
Trust having an aggregate net asset value equal to such Acquired Fund's net
assets (the "Reorganization"). The Reorganization was approved by the
shareholders of the Acquired Funds in a Special Meeting held on March 24, 1995.
The results of the vote were as follows:
<TABLE>
<CAPTION>
BROKER
FOR (000) AGAINST (000) ABSTAIN (000) NON-VOTES (000)
--------- ------------- ------------- ---------------
<S> <C> <C> <C> <C>
Midwest Growth Fund........... 1,506 41 42 0
Growth and Income Fund........ 1,279 13 25 0
Government Fund............... 715 4 2 0
</TABLE>
6
<PAGE> 7
THE ROULSTON FAMILY OF FUNDS -- SCHEDULE OF INVESTMENTS October 31, 1995
- --------------------------------------------------------------------------------
ROULSTON MIDWEST GROWTH FUND
<TABLE>
<CAPTION>
SHARES VALUE (000)
-------------- --------------
<S> <C> <C>
COMMON STOCKS - 93.97%
CAPITAL GOODS - 15.09%
Acme-Cleveland Corp. .......................................... 91,300 $ 1,997
AMP, Inc. ..................................................... 36,700 1,440
Nordson Corp. ................................................. 24,700 1,426
Park Ohio Industries, Inc. *................................... 100,509 1,382
Trinova Corp. ................................................. 43,000 1,209
--------------
7,454
--------------
CONSUMER DURABLES - 14.15%
Cooper Tire & Rubber Co. ...................................... 55,000 1,272
Federal-Mogul Corp. ........................................... 67,000 1,198
Masco Corp. ................................................... 42,000 1,181
Owens-Corning Fiberglas Corp.*................................. 29,700 1,259
Royal Appliance Manufacturing Co.*............................. 300,000 937
Varity Corp. New*.............................................. 31,600 1,146
--------------
6,993
--------------
CONSUMER NON-DURABLES - 24.05%
American Greetings Corp. Class A............................... 42,000 1,323
Barry (R.G.) Corp.*............................................ 106,667 2,027
Consolidated Stores Corp.*..................................... 54,700 1,265
Dean Foods Co. ................................................ 44,000 1,227
Fays Drug, Inc. ............................................... 175,400 1,403
Revco D.S., Inc. New*.......................................... 66,600 1,582
Rite Aid Corp. ................................................ 55,000 1,485
Universal Foods Corp. ......................................... 40,500 1,387
Worthington Foods, Inc. ....................................... 11,000 184
--------------
11,883
--------------
ENERGY - 2.85%
Belden & Blake Corp.*.......................................... 97,100 1,409
--------------
FINANCE - 9.35%
National Auto Credit, Inc.*.................................... 120,000 1,950
Norwest Corp. ................................................. 39,800 1,174
Star Banc Corp. ............................................... 27,000 1,495
--------------
4,619
--------------
MATERIALS/SERVICES - 22.10%
Armco, Inc. ................................................... 188,000 1,152
Bearings, Inc. Ohio............................................ 52,500 1,903
Duriron Co., Inc. ............................................. 55,800 1,493
Figgie International, Inc. Class A*............................ 180,000 2,160
Libbey, Inc. .................................................. 48,100 986
OHM Corp.*..................................................... 140,000 1,138
Premier Industrial Corp. ...................................... 37,000 920
Worthington Industries, Inc. .................................. 70,083 1,165
--------------
10,917
--------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE> 8
THE ROULSTON FAMILY OF FUNDS -- SCHEDULE OF INVESTMENTS October 31, 1995
- --------------------------------------------------------------------------------
ROULSTON MIDWEST GROWTH FUND (continued)
<TABLE>
<CAPTION>
SHARES VALUE (000)
-------------- --------------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
TECHNOLOGY - 6.38%
Diebold, Inc. ................................................. 27,000 $ 1,431
Telxon Corp. .................................................. 74,400 1,721
--------------
3,152
--------------
TOTAL COMMON STOCKS - (COST $40,091,616)....................... 46,427
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT - 6.40% AMOUNT
--------------
<S> <C> <C>
United Missouri Bank, U.S. Treasury Note, $3,202,000 par, 7.50%
coupon, due 02/29/96, dated 10/31/95, to be sold on 11/01/95
at $3,166,466................................................ $3,166,000 3,166
--------------
TOTAL INVESTMENTS - 100.37% (COST $43,257,616#)................ 49,593
--------------
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS - (0.37%)....... (185)
--------------
NET ASSETS - 100.00%........................................... $ 49,408
==============
<FN>
- ---------------
* Non-income producing security.
# Also represents cost for Federal income tax purposes.
</TABLE>
See accompanying notes to financial statements.
8
<PAGE> 9
THE ROULSTON FAMILY OF FUNDS -- SCHEDULE OF INVESTMENTS October 31, 1995
- --------------------------------------------------------------------------------
ROULSTON GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
SHARES VALUE (000)
-------------- --------------
<S> <C> <C>
COMMON STOCKS - 97.87%
CAPITAL GOODS - 11.12%
Boeing Co. .................................................... 7,000 $ 459
Emerson Electric Co. .......................................... 10,000 713
General Electric Co. .......................................... 11,000 696
Johnson Controls, Inc. ........................................ 12,000 699
--------------
2,567
--------------
CONSUMER DURABLES - 13.96%
Cooper Tire & Rubber Co. ...................................... 25,000 578
Leggett & Platt, Inc. ......................................... 28,000 672
Masco Corp. ................................................... 24,000 675
Sherwin-Williams Co. .......................................... 17,000 640
TRW, Inc. ..................................................... 10,000 657
--------------
3,222
--------------
CONSUMER NON-DURABLES - 34.97%
American Greetings Corp. Class A............................... 22,000 693
Banta Corp. ................................................... 18,000 779
Baxter International, Inc. .................................... 10,000 386
Beckman Instruments, Inc. ..................................... 20,000 663
Dean Foods Co. ................................................ 20,000 557
Dial Corp. .................................................... 26,000 634
Hanson PLC ADR................................................. 25,000 388
Mallinckrodt Group, Inc. ...................................... 18,000 625
McGraw-Hill, Inc. ............................................. 3,700 303
Melville Corp. ................................................ 18,000 576
Proctor & Gamble Co. .......................................... 8,000 648
Rite Aid Corp. ................................................ 26,000 702
Sara Lee Corp. ................................................ 24,000 705
Universal Foods Corp. ......................................... 12,000 411
--------------
8,070
--------------
ENERGY - 8.46%
Exxon Corp. ................................................... 8,000 611
Royal Dutch Petroleum Co. ..................................... 4,000 492
Williams Companies, Inc. ...................................... 22,000 850
--------------
1,953
--------------
FINANCE - 7.72%
American International Group, Inc. ............................ 6,750 569
Keycorp........................................................ 15,000 506
Norwest Corp. ................................................. 24,000 708
--------------
1,783
--------------
MATERIALS/SERVICES - 11.58%
Great Lakes Chemical Corp. .................................... 10,000 671
Hanna (M.A.) Co. .............................................. 13,500 346
Ogden Corp. ................................................... 20,000 455
Teleflex, Inc. ................................................ 15,000 636
Worthington Industries, Inc. .................................. 34,000 565
--------------
2,673
--------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE> 10
THE ROULSTON FAMILY OF FUNDS -- SCHEDULE OF INVESTMENTS October 31, 1995
- --------------------------------------------------------------------------------
ROULSTON GROWTH AND INCOME FUND (continued)
<TABLE>
<CAPTION>
SHARES VALUE (000)
-------------- --------------
<S> <C> <C>
COMMON STOCKS - (CONTINUED)
TECHNOLOGY - 3.52%
Harris Corp. .................................................. 14,000 $ 813
--------------
UTILITIES - 6.54%
AT & T Corp. .................................................. 12,000 768
GTE Corp. ..................................................... 18,000 742
--------------
1,510
--------------
TOTAL COMMON STOCKS - (COST $19,389,312)....................... 22,591
--------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
REPURCHASE AGREEMENT - 2.73% AMOUNT
--------------
<S> <C> <C>
United Missouri Bank, U.S. Treasury Note, $636,000 par, 7.50%
coupon, due 02/29/96, dated 10/31/95, to be sold on 11/01/95
at $629,093.................................................. $ 629,000 629
--------------
TOTAL INVESTMENTS - 100.60% (COST $20,018,312#)................ 23,220
--------------
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS - (0.60%)....... (138)
--------------
NET ASSETS - 100.00%........................................... $ 23,082
============
- ---------------
<FN>
# Also represents cost for Federal income tax purposes.
</TABLE>
See accompanying notes to financial statements.
10
<PAGE> 11
THE ROULSTON FAMILY OF FUNDS -- SCHEDULE OF INVESTMENTS October 31, 1995
- --------------------------------------------------------------------------------
ROULSTON GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE (000)
---------- -----------
<S> <C> <C>
U.S. TREASURY NOTES - 98.20%
U.S. TREASURY NOTES
5.500%, 09/30/97............................................ $ 550,000 $ 549
5.125%, 06/30/98............................................ 750,000 740
6.875%, 08/31/99............................................ 1,800,000 1,866
5.500%, 04/15/00............................................ 2,000,000 1,979
6.250%, 02/15/03............................................ 1,450,000 1,475
5.750%, 08/15/03............................................ 700,000 691
5.875%, 02/15/04............................................ 1,200,000 1,191
-----------
TOTAL U.S. TREASURY NOTES - (COST $8,487,061)................... 8,491
-----------
REPURCHASE AGREEMENT - 0.58%
United Missouri Bank, U.S. Treasury Note, $51,000 par, 7.50%
coupon, due 02/29/96, dated 10/31/95, to be sold on 11/01/95
at $50,007.................................................. 50,000 50
-----------
TOTAL INVESTMENTS - 98.78% (COST $8,537,061#)................... 8,541
-----------
CASH AND OTHER ASSETS NET OF LIABILITIES - 1.22%................ 106
-----------
NET ASSETS - 100.00%............................................ $ 8,647
===========
- ---------------
<FN>
# Also represents cost for Federal income tax purposes.
</TABLE>
See accompanying notes to financial statements.
11
<PAGE> 12
THE ROULSTON FAMILY OF FUNDS --
STATEMENTS OF ASSETS AND LIABILITIES October 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ROULSTON ROULSTON ROULSTON
MIDWEST GROWTH AND GOVERNMENT
GROWTH FUND INCOME FUND SECURITIES FUND
(000) (000) (000)
----------- ----------- ---------------
<S> <C> <C> <C>
ASSETS:
Investments in securities at value (cost
$43,257,616, $20,018,312 and $8,537,061
respectively)........................... $49,593 $23,220 $ 8,541
Cash...................................... 1 1 0
Receivable for capital stock sold......... 32 24 6
Dividends and interest receivable......... 8 22 84
Reimbursement due from adviser............ 0 0 14
Deferred organization costs (Note A)...... 14 14 14
Other assets.............................. 5 5 5
----------- ----------- ---------------
Total assets....................... 49,653 23,286 8,664
----------- ----------- ---------------
LIABILITIES:
Payable for capital stock redeemed........ 144 151 1
Accrued expenses.......................... 96 48 11
Payable to adviser........................ 5 5 5
----------- ----------- ---------------
Total liabilities.................. 245 204 17
----------- ----------- ---------------
NET ASSETS:
Applicable to 3,647,473, 1,877,974 and
879,015 shares outstanding,
respectively............................ $49,408 $23,082 $ 8,647
=========== =========== =============
NET ASSETS CONSIST OF:
Capital paid-in........................... $42,554 $19,634 $ 8,617
Undistributed net investment income
(loss).................................. (2) 66 37
Accumulated net realized gain (loss) on
investments............................. 521 180 (11)
Net unrealized appreciation on
investments............................. 6,335 3,202 4
----------- ----------- ---------------
$49,408 $23,082 $ 8,647
=========== =========== =============
NET ASSET VALUE, OFFERING AND REDEMPTION
PRICE PER SHARE........................... $ 13.55 $ 12.29 $ 9.84
=========== =========== =============
</TABLE>
See accompanying notes to financial statements.
12
<PAGE> 13
THE ROULSTON FAMILY OF FUNDS -- STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ROULSTON ROULSTON ROULSTON
MIDWEST GROWTH AND GOVERNMENT
GROWTH FUND INCOME FUND SECURITIES FUND
(000) (000) (000)
----------- ----------- ---------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends................................. $ 510 $ 522 $ 0
Interest.................................. 173 40 484
----------- ----------- ---------------
Total investment income............ 683 562 484
----------- ----------- ---------------
EXPENSES:
Investment advisory fees (Note B)......... 342 176 30
Transfer agent fees....................... 37 25 21
Administration fees....................... 67 42 32
Distribution expenses (Note B)............ 59 28 10
Pricing fees.............................. 20 15 15
Printing fees............................. 5 4 4
Custodian fees............................ 18 11 8
Insurance fees............................ 14 13 12
Legal fees................................ 14 11 8
Amortization of organization costs (Note
A)...................................... 12 12 12
Registration expenses..................... 9 8 8
Trustees fees............................. 12 10 9
Auditing fees............................. 16 8 3
Miscellaneous expenses.................... 2 1 1
----------- ----------- ---------------
Total expenses..................... 627 364 173
Expenses reimbursed (Note B).............. (61) (59) (101)
----------- ----------- ---------------
Net expenses....................... 566 305 72
----------- ----------- ---------------
NET INVESTMENT INCOME....................... 117 257 412
----------- ----------- ---------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS:
Net realized gain (loss) on investments... 1,330 279 (2)
Net change in unrealized appreciation on
investments............................. 5,113 2,752 699
----------- ----------- ---------------
Net realized and unrealized gain on
investments............................. 6,443 3,031 697
----------- ----------- ---------------
INCREASE IN NET ASSETS FROM OPERATIONS...... $ 6,560 $ 3,288 $ 1,109
=========== =========== =============
</TABLE>
See accompanying notes to financial statements.
13
<PAGE> 14
THE ROULSTON FAMILY OF FUNDS -- STATEMENTS OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ROULSTON MIDWEST ROULSTON GROWTH AND
GROWTH FUND INCOME FUND
--------------------------- ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31, OCTOBER 31,
1995 1994 1995 1994
(000) (000) (000) (000)
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OPERATIONS:
Net investment income................ $ 117 $ 31 $ 257 $ 182
Net realized gain (loss) on
investments........................ 1,330 1,268 279 77
Net change in unrealized appreciation
(depreciation) on investments...... 5,113 525 2,752 220
----------- ----------- ----------- -----------
Increase (decrease) in net assets.... 6,560 1,824 3,288 479
----------- ----------- ----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income........... (130) (19) (207) (170)
From net realized gains.............. (2,077) 0 (167) (29)
----------- ----------- ----------- -----------
Total Distributions.................. (2,207) (19) (374) (199)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold............ 17,023 20,028 5,620 10,447
Reinvestment of dividends............ 2,182 17 309 163
Amount paid for repurchase
of shares.......................... (3,838) (2,032) (3,938) (1,429)
----------- ----------- ----------- -----------
Net increase from capital
transactions....................... 15,367 18,013 1,991 9,181
----------- ----------- ----------- -----------
Total increase in net assets......... 19,720 19,818 4,905 9,461
NET ASSETS:
Beginning of year.................... 29,688 9,870 18,177 8,716
----------- ----------- ----------- -----------
End of year.......................... $49,408 $29,688 $23,082 $18,177
=========== =========== =========== ===========
Accumulated undistributed
(overdistributed) net investment
income included in net assets at
end of year........................ $ (2) $ 11 $ 66 $ 16
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................... 1,340 1,699 503 980
Shares issued on reinvestment of
dividends.......................... 187 2 28 15
Shares repurchased................... (300) (172) (355) (134)
----------- ----------- ----------- -----------
Net increase from capital
transactions....................... 1,227 1,529 176 861
=========== =========== =========== ===========
<CAPTION>
ROULSTON GOVERNMENT
SECURITIES FUND
-------------------------------
YEAR ENDED YEAR ENDED
OCTOBER 31, OCTOBER 31,
1995 1994
(000) (000)
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income................ $ 412 $ 306
Net realized gain (loss) on
investments........................ (2) (11)
Net change in unrealized appreciation
(depreciation) on investments...... 699 (770)
----------- -----------
Increase (decrease) in net assets.... 1,109 (475)
----------- -----------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment income........... (411) (289)
From net realized gains.............. 0 (5)
----------- -----------
Total Distributions.................. (411) (294)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold............ 1,562 5,264
Reinvestment of dividends............ 266 191
Amount paid for repurchase
of shares.......................... (1,493) (2,901)
----------- -----------
Net increase from capital
transactions....................... 335 2,554
----------- -----------
Total increase in net assets......... 1,033 1,785
NET ASSETS:
Beginning of year.................... 7,614 5,829
----------- -----------
End of year.......................... $ 8,647 $ 7,614
=========== ===========
Accumulated undistributed
(overdistributed) net investment
income included in net assets at
end of year........................ $ 37 $ 36
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Shares sold.......................... 167 545
Shares issued on reinvestment of
dividends.......................... 29 20
Shares repurchased................... (160) (293)
----------- -----------
Net increase from capital
transactions....................... 36 272
=========== ===========
</TABLE>
See accompanying notes to financial statements.
14
<PAGE> 15
THE ROULSTON FAMILY OF FUNDS -- FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The tables below set forth financial data for a share of beneficial
interest outstanding throughout the periods presented.
<TABLE>
<CAPTION>
ROULSTON MIDWEST ROULSTON GROWTH AND ROULSTON GOVERNMENT
GROWTH FUND INCOME FUND SECURITIES FUND
----------------------------------- ----------------------------------- -----------------------------------
YEAR YEAR PERIOD YEAR YEAR PERIOD YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED
10/31/95 10/31/94 10/31/93(1) 10/31/95 10/31/94 10/31/93(1) 10/31/95 10/31/94 10/31/93(1)
-------- -------- ----------- -------- -------- ----------- -------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF
PERIOD......... $ 12.27 $ 11.07 $ 10.00 $ 10.68 $ 10.36 $ 10.00 $ 9.03 $10.20 $ 10.00
-------- -------- ----------- -------- -------- ----------- -------- -------- -----------
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
income....... 0.04 0.02 0.01 0.15 0.14 0.04 0.49 0.43 0.15
Net realized
and
unrealized
gain (loss)
on
investments... 2.04 1.19 1.07 1.68 0.35 0.36 0.81 (1.17) 0.16
-------- -------- ----------- -------- -------- ----------- -------- -------- -----------
Total from
investment
operations... 2.08 1.21 1.08 1.83 0.49 0.40 1.30 (0.74) 0.31
-------- -------- ----------- -------- -------- ----------- -------- -------- -----------
LESS
DISTRIBUTIONS:
From net
investment
income....... (0.04) (0.01) (0.01) (0.12) (0.14) (0.04) (0.49) (0.42) (0.11)
From realized
capital
gains........ (0.76) 0.00 0.00 (0.10) (0.03) 0.00 0.00 (0.01) 0.00
-------- -------- ----------- -------- -------- ----------- -------- -------- -----------
Total
distributions... (0.80) (0.01) (0.01) (0.22) (0.17) (0.04) (0.49) (0.43) (0.11)
NET ASSET VALUE,
END OF
PERIOD......... $ 13.55 $ 12.27 $ 11.07 $ 12.29 $ 10.68 $ 10.36 $ 9.84 $ 9.03 $ 10.20
========= ========= ============ ========= ========= ============ ========= ========= ============
TOTAL RETURN.... 18.17% 10.89% 10.90%** 17.36% 4.72% 3.98%** 14.76% (7.24%) 3.04%**
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end
of period
(000)........ $49,408 $29,688 $ 9,870 $23,082 $18,177 $ 8,716 $8,647 $7,614 $ 5,829
Ratio of
expenses to
average net
assets before
reimbursement
of expenses
by Adviser... 1.57% 1.54% 2.89%* 1.79% 1.72% 2.79%* 2.16% 1.80% 2.78%*
after
reimbursement
of expenses
by
Adviser.... 1.41% 1.45% 1.50%* 1.50% 1.50% 1.50%* 0.90% 0.90% 0.90%*
Ratio of net
investment
income to
average net
assets before
reimbursement
of expenses
by Adviser... 0.14% 0.08% (1.11%)* 0.98% 1.20% 0.10%* 3.89% 3.88% 2.29%*
after
reimbursement
of expenses
by
Adviser.... 0.29% 0.17% 0.28%* 1.26% 1.42% 1.39%* 5.16% 4.78% 4.17%*
Portfolio
turnover..... 46.51% 77.57% 0.00% 13.36% 35.16% 4.18% 1.28% 24.14% 24.53%
- ---------------
<FN>
* Annualized
** Not Annualized
(1) The Roulston Midwest Growth Fund, Roulston Growth and Income Fund and the
Roulston Government Securities Fund commenced operations on July 1, 1993.
</TABLE>
See accompanying notes to financial statements.
15
<PAGE> 16
THE ROULSTON FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS October 31, 1995
- --------------------------------------------------------------------------------
NOTE (A) SIGNIFICANT ACCOUNTING POLICIES: The Roulston Family of Funds (the
"Trust") is an open-end management investment company and is organized under
Ohio law as a business trust under a Declaration of Trust dated September 16,
1994. The Trust currently consists of three Funds (the "Funds"): Roulston
Midwest Growth Fund (the "Midwest Growth Fund"), Roulston Growth and Income Fund
(the "Growth and Income Fund") and Roulston Government Securities Fund (the
"Government Fund"). The Trust is registered under the Investment Company Act of
1940, as amended (the "Act"). On April 29, 1995, pursuant to an Agreement and
Plan of Reorganization and Liquidation, the Midwest Growth Fund, the Growth and
Income Fund and the Government Fund of the Trust acquired in a tax free
reorganization, all of the assets of each of the Midwest Growth Fund, the Growth
and Income Fund and the Government Fund (collectively, the "Acquired Funds") of
the Advisors' Inner Circle Fund, a Massachusetts business trust, respectively,
in exchange for the assumption of such Acquired Fund's liabilities and a number
of full and fractional shares of the corresponding Fund of the Trust having an
aggregate net asset value equal to such Acquired Fund's net assets (the
"Reorganization"). The Reorganization was approved by the shareholders of the
Acquired Funds in a Special Meeting held on March 24, 1995. For accounting
purposes, the Reorganization was accounted for in a manner similar to a pooling
of interest and the financial highlights have been presented since the Funds'
inception, July 1, 1993. The following is a summary of significant accounting
policies consistently followed by the Trust.
(1) SECURITY VALUATION: Equity securities which are listed or admitted
to trading on a national securities exchange will be valued at the last
sales price on the exchange on which the security is principally traded.
Equity securities for which there is no sale on that day and equity
securities traded only in the over-the-counter market will be valued at
their closing bid prices obtained from one or more dealers making markets
for such securities or, if market quotations are not readily available, at
their fair values as determined in good faith by the Board of Trustees.
Valuations of fixed and variable income securities ("debt securities")
are supplied by independent pricing services used by Fund/Plan Services,
Inc., as administrator, which have been approved by the Trustees of the
Trust. Valuations are based upon a consideration of yields or prices of
obligations of comparable quality, coupon, maturity and type, indications as
to value from recognized dealers, and general market conditions. Debt
securities for which market quotations are readily available are valued
based upon these quotations. The Trustees may deviate from the valuation
provided by the pricing service whenever, in their judgment, such valuation
is not indicative of the fair value of the debt security. Short-term
investments with a maturity of 60 days or less are valued at amortized cost,
which approximates market value.
(2) REPURCHASE AGREEMENTS: All Funds may enter into repurchase
agreements with financial institutions deemed to be credit worthy by
Roulston & Company, Inc. ("Roulston"), the Funds' investment adviser, under
guidelines approved by the Trust's Board of Trustees, subject to the
seller's agreement to repurchase and the Funds' agreement to resell such
securities at a mutually agreed-upon date and price. Securities purchased
subject to repurchase agreements are deposited with the Funds' custodian
and, pursuant to the terms of the repurchase agreement, must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the seller were to default on its
repurchase obligation or become insolvent, the Fund would suffer a loss to
the extent that the proceeds from a sale of the underlying portfolio
securities were
16
<PAGE> 17
THE ROULSTON FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS (continued) October 31, 1995
- --------------------------------------------------------------------------------
less than the repurchase price under the agreement, or to the extent that
the disposition of such securities by the Fund was delayed pending court
action.
(3) FEDERAL INCOME TAXES: The Funds intend to be treated as "regulated
investment companies" under Sub-chapter M of the Internal Revenue Code and
to distribute substantially all of their net taxable income. Accordingly, no
provisions for Federal income taxes have been made in the accompanying
financial statements.
(4) INVESTMENT INCOME AND SECURITIES TRANSACTIONS: Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily. Security
transactions are accounted for on the date securities are purchased or sold.
Security gains and losses are determined on the identified cost basis.
(5) DIVIDENDS AND DISTRIBUTIONS: Substantially all of the net investment
income (exclusive of capital gains) of the Midwest Growth Fund and the
Growth and Income Fund is distributed in the form of dividends at least
annually, and of the Government Fund is distributed in the form of quarterly
dividends. Shareholders of record of the Government Fund on the next-to-last
business day of each quarter will be entitled to receive the quarterly
dividend distribution. If any capital gain is realized by a Fund,
substantially all of it will be distributed at least annually.
(6) DEFERRED ORGANIZATION COSTS: Organizational costs are being
amortized on a straight-line basis over five years commencing April 29,
1995.
NOTE (B) RELATED PARTY TRANSACTIONS: The Trust and Roulston have entered
into an Investment Advisory Agreement (the "Agreement") dated as of January 20,
1995. Under terms of the Agreement, Roulston makes the investment decisions for
the assets of the Funds and continuously reviews, supervises, and administers
the investment program of the Funds. For its services as investment adviser,
Roulston receives a fee, at an annual rate of 0.75% of the average daily net
assets of each of the Midwest Growth Fund and the Growth and Income Fund up to
$100 million of such assets, and 0.50% of each such Fund's assets of $100
million or more. With respect to the Government Fund, Roulston receives a fee at
an annual rate of 0.25% of the average daily net assets of the Government Fund
up to $100 million of such assets, and 0.125% of such assets of $100 million or
more. Such fees will be calculated daily and paid monthly.
Prior to the effective date of the Reorganization, Roulston served as the
investment adviser to each of the Acquired Funds. For such services, Roulston
received an advisory fee from the Acquired Funds at the following annual rates:
1.00% of the value of each of the Midwest Growth Fund's and the Growth and
Income Fund's average daily net assets up to $100 million, 0.75% of each such
Fund's assets over $100 million; and 0.50% of the value of the Government Fund's
average daily net assets up to $100 million, 0.375% of the average daily net
assets from $100 million to $200 million, and 0.25% of the average daily net
assets of such Fund over $200 million.
Pursuant to Rule 12b-1 under the Act, effective April 29, 1995, the Trust
has adopted a Distribution and Shareholder Service Plan and Agreement (the
"Plan"), under which each Fund is authorized to pay or reimburse Roulston
Research Corp. (the "Distributor"), a wholly owned subsidiary of Roulston, a
periodic amount calculated at an annual rate not to exceed 0.25% of the average
daily net assets value of such Fund. Such an amount may be used by the
Distributor to pay broker-dealers, banks and other
17
<PAGE> 18
THE ROULSTON FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS (continued) October 31, 1995
- --------------------------------------------------------------------------------
institutions (a "Participating Organization") for distribution and/or
shareholder service assistance pursuant to an agreement between the Distributor
and the Participating Organization or for distribution assistance and/or
shareholder service provided by the Distributor. Under the Plan, a Participating
Organization may include the Distributor's affiliates.
In addition, the Board of Trustees of the Trust has adopted certain
procedures in accordance with Section 17(e)(2) and Rule 17e-1 under the Act
pursuant to which the Distributor may execute certain portfolio transactions as
broker on behalf of the Funds. In connection with such brokerage transactions,
Roulston as the investment adviser may determine to use the Distributor if such
use will likely result in commissions, fees or other renumeration and prices for
and execution of securities transactions at least as favorable to such Fund as
those likely to be derived from other qualified brokers.
Roulston and the Distributor have each agreed with the Trust to waive its
investment advisory and 12b-1 fees, respectively, and to reimburse certain other
expenses of the Funds for one year from the effective date of the Reorganization
(April 29, 1995) to the extent necessary to cause total operating expenses as a
percentage of net assets of the Midwest Growth Fund, the Growth and Income Fund
and the Government Fund not to exceed 1.38%, 1.50% and 0.90%, respectively. For
the Midwest Growth Fund, such voluntary fee waivers and reimbursements limited
such Fund's total operating expenses for the year ended October 31, 1995, to
1.41% since for the period from November 1, 1994 to April 29, 1995, such
operating expenses had been limited to 1.50%.
Information regarding these transactions is as follows for the year ended
October 31, 1995:
<TABLE>
<CAPTION>
MIDWEST GROWTH AND GOVERNMENT
GROWTH FUND INCOME FUND FUND
(000) (000) (000)
------------- ------------- -------------
<S> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Fees Before Fee Waiver.................... $ 342 $ 176 $ 30
Fees Waived............................... 61 59 30
RULE 12B-1 FEES1:
Fees Before Fee Waiver.................... 59 28 10
Fees Waived............................... 0 0 4
OTHER EXPENSES REIMBURSED................. 0 0 67
BROKERAGE FEES PAID TO THE DISTRIBUTOR ON
PORTFOLIO TRANSACTIONS.................. 140 12 0
- ---------------
<FN>
1 Effective for the period April 30, 1995 through October 31, 1995.
</TABLE>
All of the officers and certain of the trustees of the Trust are also
officers, directors and/or employees of Roulston and the Distributor. The
officers and such interested trustees served without direct compensation from
the Trust during the year.
18
<PAGE> 19
THE ROULSTON FAMILY OF FUNDS
NOTES TO FINANCIAL STATEMENTS (continued) October 31, 1995
- --------------------------------------------------------------------------------
NOTE (C) INVESTMENT TRANSACTIONS: Purchases and sales of investment
securities (excluding short-term securities) for the year ended October 31,
1995, were:
<TABLE>
<CAPTION>
PROCEEDS FROM
PURCHASES SALES
(000) (000)
---------------- ----------------
<S> <C> <C>
Midwest Growth Fund.................................... $ 29,354 $ 17,198
Growth and Income Fund................................. 5,923 2,608
Government Fund........................................ 549 97
</TABLE>
NOTE (D) UNREALIZED APPRECIATION AND DEPRECIATION: At October 31, 1995, the
gross unrealized appreciation and depreciation of securities for book and
Federal income tax purposes consisted of the following:
<TABLE>
<CAPTION>
GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION DEPRECIATION APPRECIATION
(000) (000) (000)
------------- ------------- -------------
<S> <C> <C> <C>
Midwest Growth Fund....................... $ 7,896 $ 1,561 $ 6,335
Growth and Income Fund.................... 3,494 292 3,202
Government Fund........................... 79 75 4
</TABLE>
19
<PAGE> 20
THE ROULSTON FAMILY OF FUNDS
REPORT OF INDEPENDENT AUDITORS October 31, 1995
- --------------------------------------------------------------------------------
To the Shareholders and Trustees of
Roulston Midwest Growth Fund,
Roulston Growth and Income Fund and
Roulston Government Securities Fund of
The Roulston Family of Funds:
We have audited the accompanying statements of assets and liabilities of
Roulston Midwest Growth Fund, Roulston Growth and Income Fund and Roulston
Government Securities Fund (the three funds constituting the Roulston Family of
Funds), including the schedules of investments, as of October 31, 1995, and the
related statements of operations, changes in net assets and financial highlights
for the year then ended. These financial statements and financial highlights are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audit. The statement of changes in net assets of Roulston Midwest Growth Fund,
Roulston Growth and Income Fund and Roulston Government Securities Fund of the
Roulston Family of Funds for the year ended October 31, 1994 and the financial
highlights for the period from July 1, 1993 (commencement of operations) to
October 31, 1993 and for the year ended October 31, 1994 were audited by other
auditors whose report dated December 14, 1994 expressed an unqualified opinion
on those statements and financial highlights.
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
October 31, 1995, 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 1995 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Roulston Midwest Growth Fund, Roulston Growth and Income Fund and
Roulston Government Securities Fund of the Roulston Family of Funds at October
31, 1995, the results of their operations, the changes in their net assets and
financial highlights for the year then ended in conformity with generally
accepted accounting principles.
/s/ Ernst & Young LLP
November 27, 1995
Cleveland, Ohio
20
<PAGE> 21
[This Page Intentionally Left Blank]
<PAGE> 22
[This Page Intentionally Left Blank]
<PAGE> 23
DIRECTORS:
<TABLE>
<S> <C>
Thomas V. Chema Scott D. Roulston
David H. Gunning Ivan Winfield
</TABLE>
OFFICERS:
Scott D. Roulston, President
Kathryn G. Balazs, Secretary
Martin P. Rizzo, Treasurer
ADVISER:
ROULSTON & COMPANY, INC.
4000 Chester Avenue
Cleveland, Ohio 44103-3693
DISTRIBUTOR:
ROULSTON RESEARCH CORP.
4000 Chester Avenue
Cleveland, Ohio 44103-3693
ADMINISTRATOR & TRANSFER AGENT:
FUND/PLAN SERVICES, INC.
2 West Elm Street
Conshohocken, Pennsylvania 19428-0874
LEGAL COUNSEL:
BAKER & HOSTETLER
65 East State Street
Columbus, Ohio 43215-4260
INDEPENDENT PUBLIC ACCOUNTANTS:
ERNST & YOUNG LLP
1300 Huntington Building
925 Euclid Avenue
Cleveland, Ohio 44115-1405
This report is submitted for the general information of
the shareholders of the Fund. It is not authorized for
distribution to prospective investors in the Fund unless
preceded or accompanied by an effective Prospectus
which includes details regarding the Fund's objectives,
policies, expenses and other information.
------------------------------------------------------
For information call Roulston Research Corp.:
1-800-3-FAMILY (1-800-332-6459)
(LOGO) printed on recycled paper
-------------------------------------------------
THE ROULSTON
FAMILY OF FUNDS
Roulston Midwest
Growth Fund
Roulston Growth and
Income Fund
Roulston Government
Securities Fund
------------------------------------------------------
ANNUAL REPORT TO
SHAREHOLDERS
October 31, 1995
------------------------------------------------------
THE ROULSTON FAMILY OF FUNDS
------------------------------------------------------
Investing Family Style
