<PAGE> 1
[LOGO]
ROULSTON FUNDS
Charting a Course You Can Trust (SM)
ANNUAL REPORT TO SHAREHOLDERS
- - ROULSTON EMERGING GROWTH FUND
- - ROULSTON INTERNATIONAL EQUITY FUND
- - ROULSTON GROWTH FUND
- - ROULSTON GROWTH AND INCOME FUND
- - ROULSTON GOVERNMENT SECURITIES FUND
October 31, 1999
Advised by
Roulston & Company, Inc.
<PAGE> 2
ROULSTON FUNDS ANNUAL REPORT TO SHAREHOLDERS
December 17, 1999
Dear Shareholder:
Enclosed is the Roulston Funds' annual financial report for the fiscal year
ended October 31, 1999. This year, the Roulston Funds introduced some exciting
enhancements to the funds including the addition of two new funds to our fund
family. This Annual Report reflects the addition of these two new funds, the
Roulston Emerging Growth Fund and the Roulston International Equity Fund. These
enhancements and others made over the past months reflect our commitment to
shareholders that the Roulston Funds are positioned to provide you investment
diversity and balance in your investment options, now and well into the future.
From an economic standpoint, the longest economic expansion in U.S. history
continues forward seemingly unabated. Economic growth remains in excess of 3%
and everyone is concerned about the possibility of higher interest rates.
Although the Fed has raised interest rates three times this year, those moves
have been perceived as a reversal of the previous three easings associated with
the 1998 emerging markets crisis rather than reactions to current economic
fundamentals. Economic developments that are cause for concern include:
substantial increases in commodity prices, especially oil, and a decline in the
U.S. dollar, particularly against the Japanese yen. Both developments could be
inflationary and suggest that further interest rate increases could happen next
year.
The economic recoveries that began in Europe and Asia this year have continued
to grow in strength. Japan has been the biggest surprise so far. After almost 10
years of economic stagnation, the Japanese have finally begun to undertake the
structural changes required to foster long-term growth in their economy. If the
Japanese remain on their current economic course into 2000, the accompanying
strength in the yen could repatriate some much needed capital into their equity
markets. Europe appears to be following a similar course. The French now expect
their GDP growth to be 2.9% for 2000, which would be the highest growth rate
that France has experienced since 1990.
The volatility that we have experienced recently in the equity markets can be
expected to continue next year. The transition from the Industrial Age to the
Information Age, or the so-called New Economy, will not always be smooth. Next
year may present more of a challenge for the United States because foreign
competitors have begun to learn how to imitate our success.
Our goal is simple: long-term performance for our shareholders.
/s/ Scott D. Roulston
Scott D. Roulston
President
/s/ Howard W. Harpster
Howard W. Harpster
Chief Investment Officer
<PAGE> 3
ROULSTON FUNDS INVESTMENT ADVISER'S REPORT
ROULSTON EMERGING GROWTH FUND
The graph below compares the increase in value of a $10,000 investment in
Roulston Emerging Growth Fund with the performance of the Russell 2000 Growth
and the Lipper Small Cap Growth Indices.
AGGREGATE TOTAL RETURN*
Since Inception.............93.30%
Fund Inception: 7/1/99
<TABLE>
<CAPTION>
ROULSTON EMERGING GROWTH LIPPER SMALL CAP GROWTH
FUND RUSSELL 2000 GROWTH INDEX INDEX
------------------------ ------------------------- -----------------------
<S> <C> <C> <C>
7/01/99 10000 10000 10000
7/99 12850 9691 10000
8/99 15400 9328.57 10000
9/99 16320 9509 10181
10/99 19330 9752 10745
</TABLE>
*Unlike our fund, the Russell 2000 Growth Index does not reflect fees
and expenses and is an unmanaged indicator of financial performance, as
such, it is not sold as an investment. Past Performance is no guarantee
of future results. The principal value and return of a mutual fund
investment fluctuates with changes in market conditions. Shares, when
redeemed, may be worth more or less than the original cost.
The Roulston Emerging Growth Fund was established to invest in rapidly growing
companies that have recently gone public. In almost all cases, the companies
will have received venture capital financing during the early stages of their
development.
The Fund's primary objective is capital appreciation and returns may be quite
volatile because the companies and the markets they operate in tend to be
growing and evolving at a very rapid pace. In addition, their competitors for
these new markets may be bigger, better known companies that have far larger
financial resources.
Investment decisions are driven by close observation and analysis of the current
developments in the venture capital community. Our research shows that certain
venture capital firms have the ability to develop significant companies that
sometimes generate their greatest shareholder gains after they go public. Our
objective is to identify these companies before they become widely known.
An excellent example of this investment process is Agile Software. The firm
produces Web-based, manufacturing supply chain software and provides the
consulting and training services associated with the implementation of their
products. Their principal customers include Gateway, Lucent, Solectron, and
Texas Instruments. Venture capital financing was provided by Mohr Davidow and
Sequoia Capital. We purchased Agile shares at the initial offering price and
followed up with additional purchases at higher post offering prices.
Another example of our recent purchases is Flycast Communications, the leading
provider of Internet direct response advertising solutions. The company's
flagship offering, the Flycast Network, reaches over 25 million people a month,
or 41 percent of the web. Flycast's advertisers include e-commerce companies,
direct response marketers and interactive agencies who are interested in
generating site traffic and increasing web-based-sales. On September 30, 1999,
CMGI announced that it had signed a definitive agreement to acquire Flycast in a
stock-for-stock merger. Our interest in Flycast was triggered through the
involvement of Charles River Ventures in the development of the company.
The Roulston Emerging Growth Fund has benefited from the strong demand for
initial public offerings from telecommunications and Internet related technology
companies. Based on past history, the recent surge of underwriting activity may
not be sustainable long-term. Nevertheless, the Internet and the profound
changes that it will have on the way business is conducted and the way we lead
our lives is underway. The Emerging Growth Fund is well positioned to capitalize
on this economic trend.
1
<PAGE> 4
ROULSTON FUNDS
ROULSTON INTERNATIONAL EQUITY FUND
The graph below compares the increase in value of a $10,000 investment in
Roulston International Equity Fund with the performance of the MS CI EAFE +
Canada IX and the Lipper International Indices.
AGGREGATE TOTAL RETURN*
Since Inception.............2.30%
Fund Inception: 7/1/99
<TABLE>
<CAPTION>
ROULSTON INTERNATIONAL
FUND RUSSELL 2000 GROWTH INDEX MS CI EAFE + CANADA IX
---------------------- ------------------------- ----------------------
<S> <C> <C> <C>
7/01/99 10000 10000 10000
7/99 9760 10276 10223
8/99 9620 10294 10303
9/99 9730 10393 10337
10/99 10230 10786 10697.5
</TABLE>
*Unlike our fund, the MS CI EAFE + Canada IX Index does not reflect fees
and expenses and is an unmanaged indicator of financial performance, as
such, it is not sold as an investment. Past Performance is no guarantee
of future results. The principal value and return of a mutual fund
investment fluctuates with changes in market conditions. Shares, when
redeemed, may be worth more or less than the original cost.
The Roulston International Equity Fund was established to achieve long-term
capital appreciation by investing in the equity securities of non-U.S.
companies.
The Fund focuses primarily on companies headquartered in the developed markets
such as Western Europe, Japan, Australia, Singapore, and Hong Kong. The Fund
will frequently invest in common stocks that are represented by American
Depositary Receipts or "ADRs". ADRs trade in U.S. dollars on national exchanges
(such as the New York Stock Exchange) and in the over-the-counter markets (such
as the NASDAQ).
Our investment strategy seeks companies that could be considered to be
competitively dominant in their markets. Nokia is good example of this
investment strategy. Nokia, headquartered in Helsinki, Finland, is one of the
largest manufacturers of cellular phones in the world. The company is well
positioned to take advantage of the explosive, global growth taking place in
wireless telephony.
We also invest in the companies of industries that are consolidating.
Rhone-Poulenc and Hoechst are examples of this strategy. Rhone-Poulenc and
Hoechst are merging to form a new company called Aventis. Both companies have
divested their noncore businesses to focus on their strengths in
pharmaceuticals. Aventis should be a major competitor in life sciences and their
combined research and development budget should enable them to fund a stronger
new product pipeline.
Foreign equities have always represented an excellent diversification tool for
long-term investors. The return potential over the next few years also could be
attractive. International equities have underperformed US equities over the past
5 years due to the strong performance of the US economy relative to the rest of
the world. So far in 1999, the trend appears to be reversing as the economic
recoveries in Japan and Europe are having a positive impact on their equity
markets, which are doing as well or better than the United States. Economic
forecasts suggest that this positive investment scenario for international
equities may continue in 2000.
2
<PAGE> 5
INVESTMENT ADVISER'S REPORT
ROULSTON GROWTH FUND
The graph below compares the increase in value of a $10,000 investment in
Roulston Growth Fund with the performance of the Standard & Poor's 500 Stock,
the Russell 1000 Growth, and the Lipper Multi-Cap Growth Indices.
AVERAGE ANNUAL TOTAL RETURN*
1 Year.............(9.18)%
5 Years..............8.56%
Since Inception.....10.24%
Fund Inception: 7/1/93
<TABLE>
<CAPTION>
ROULSTON GROWTH RUSSELL 1000 GROWTH LIPPER MULTI-CAP STANDARD & POOR'S
FUND INDEX GROWTH INDEX 500 STOCK INDEX
--------------- ------------------- ---------------- -----------------
<S> <C> <C> <C> <C>
7/31/93 10200 9821 10003 9970
10/93 11090 10430 10855 10480
1/94 11730 10784 11243 10862
4/94 11847 10124 10478 10241
7/94 11796 10314 10298 10482
10/94 12298 10994 10911 10880
1/95 12222 11051 10571 10914
4/95 13327 12110 11588 12019
7/95 14950 13557 13420 13207
10/95 14532 14207 13728 13750
1/96 14514 15341 14354 15127
4/96 16584 16053 15525 15641
7/96 15785 15661 14477 15385
10/96 16897 17339 16056 17054
1/97 18638 19558 17464 19107
4/97 18404 19595 16616 19563
7/97 22065 23782 20424 23395
10/97 22135 22623 20188 22528
1/98 22374 24561 20578 24243
4/98 24286 27842 23648 27592
7/98 22970 28518 23336 27911
10/98 20425 28198 21533 27475
1/99 20965 35021 27141 32113
4/99 19292 35227 27850 33611
7/99 18652 35375 28564 33544
10/99 18550 37855 30099 34527
</TABLE>
*Unlike our fund, the Standard & Poor's Stock and the Russell 1000
Growth Indices do not reflect fees and expenses and are unmanaged
indicators of financial performance, as such, they are not sold as
investments. Past Performance is no guarantee of future results. The
principal value and return of a mutual fund investment fluctuates with
changes in market conditions. Shares, when redeemed, may be worth more
or less than the original cost. The Fund has selected the Russell 1000
Growth Index to replace the Standard & Poor's Stock Index as the fund's
proper benchmark, because the Russell index is considered a widely used
and more appropriate index for the fund.
The Roulston Growth Fund seeks capital appreciation by investing in companies
typically experiencing an improvement in profitability or an acceleration in
earnings growth relative to other companies. We buy the specific stocks if this
improvement is not yet fully reflected in the stock price, which is determined
by examining the P/E ratio compared to the market and the history of that
relationship.
Before July 1, at least 65% of the Fund was invested in companies headquartered
in the Great Lakes area. With the elimination of this restriction, change in the
Fund's name and after an assessment of the market and economic variables, a
number of portfolio changes were effected. For instance, investments in
technology and in healthcare were increased and positions in industrial and
financial companies were reduced or eliminated. Also, since some stocks were
more volatile, the number of holdings was increased in an effort to reduce
specific risk.
Currently, the Fund owns 51 securities. At this time, the average price-earnings
ratio is slightly greater than that of the S&P 500 Index, but growth in earnings
during the past quarter and projected for the next five years is more than twice
that of the S&P. While the stocks of several very large companies were owned,
the majority of the holdings are of mid-sized companies. Thus, any broadening of
interest in the market beyond the 50 largest companies could enhance
performance.
Two examples of recent purchases are Analog Devices and Corning. Analog Devices
is a semi-conductor company which makes linear, mixed signal, and digital
integrated circuits. Business currently has been especially robust because of
the company's orientation towards communications-related products such as
digital signal processors, which are important in wireless and central
office/network access applications.
Corning manufactures a number of products, but is notable as the leading
manufacturer of optical fiber and cable for the telecommunication industry. Key
to the company's stock performance, in addition to the profitability of core
businesses, is its involvement in photonics, which describes components which
enhance the capabilities of optical fiber and, consequently, the speed of data
flow through fiber and cable. Photonics has been unprofitable, but is growing
50% a year and could be as large as the optical fiber business in four or five
years.
3
<PAGE> 6
ROULSTON FUNDS
ROULSTON GROWTH AND INCOME FUND
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, the Russell 1000 Value, and the Lipper Multi-Cap Value Indices.
AVERAGE ANNUAL TOTAL RETURN*
1 Year.............(1.07)%
5 Years.............13.03%
Since Inception.....11.64%
Fund Inception: 7/1/93
<TABLE>
<CAPTION>
ROULSTON GROWTH AND RUSSELL 1000 VALUE LIPPER MULTI-CAP STANDARD & POOR'S
INCOME FUND INDEX VALUE INDEX 500 STOCK INDEX
------------------- ------------------ ---------------- -----------------
<S> <C> <C> <C> <C>
7/01/93 10000
7/93 10030 10112 10066 9970
10/93 10398 10486 10616 10480
1/94 10894 10861 11028 10862
4/94 10682 10293 10527 10241
7/94 10900 10479 10733 10482
10/94 10889 10567 11018 10880
1/95 10940 10573 10859 10914
4/95 11746 11587 11847 12019
7/95 12541 12664 12967 13207
10/95 12780 13175 13230 13750
1/96 14075 14633 14440 15127
4/96 14149 15051 15052 15641
7/96 13749 14676 14577 15385
10/96 15051 16302 15947 17054
1/97 16558 18098 17582 19107
4/97 17167 18447 17713 19563
7/97 20353 21842 20996 23395
10/97 20560 21712 20616 22528
1/98 20900 23004 21463 24243
4/98 23227 26228 24106 27592
7/98 21437 25709 22635 27911
10/98 20312 24931 21610 27475
1/99 21525 27197 22997 32113
4/99 22471 29924 25135 33611
7/99 22822 29562 24931 33544
10/99 20094 29053 23746 34527
</TABLE>
*Unlike our fund, the Standard & Poor's Stock and the Russell 1000 Value
Indices do not reflect fees and expenses and are unmanaged indicators of
financial performance, as such, they are not sold as investments. Past
Performance is no guarantee of future results. The principal value and
return of a mutual fund investment fluctuates with changes in market
conditions. Shares, when redeemed, may be worth more or less than the
original cost. The Fund has selected the Russell 1000 Value Index to
replace the Standard & Poor's Stock Index as the fund's proper
benchmark, because the Russell index is considered a widely used and
more appropriate index for the fund.
Roulston Growth and Income Fund was established to achieve capital appreciation
and current income primarily through the investment in common stocks or
securities convertible into common stocks.
The investment policy is to invest in a diversified portfolio of growing
dividend-paying common stocks which have been researched by our own staff and
offer reasonable valuation based on price to earnings, book value and cash
flows.
Two examples of our investment approach are Marsh and McLennan and Carnival
Cruise Lines. Marsh is the leading insurance broker in the world with global
opportunities. It has nicely growing profit streams from the three core
business: insurance, asset management, and corporate consulting. These should
drive earnings and dividends forward at 13-15% growth rates. The stock was
available at a value price, well below the market P/E multiple.
Carnival is the leader in the leisure cruise industry worldwide. It dominates
three key price segments and has captured one third of the global market.
Favorable demographics and a vast untapped potential market indicate the
possibility of 15% or better earnings and dividend growth. The stock, which we
began to purchase several years ago, has tripled in price and still sells at a
below market P/E as earnings have grown.
The Fund is diversified among 42 investments with a concentration in finance,
consumer discretionary and telecommunications, which should position it to
benefit from a steady and strong economy in the future. The characteristics of
this portfolio are quality companies, displaying an ability to grow, available
at a value price at the time of purchase.
4
<PAGE> 7
INVESTMENT ADVISER'S REPORT
ROULSTON GOVERNMENT SECURITIES FUND
The graph below compares the increase in value of a $10,000 investment in
Roulston Government Securities Fund with performance of the Merrill Lynch
Intermediate Treasury Bond and the Lehman U.S. Government/Corporate Intermediate
Bond Indices.
AVERAGE ANNUAL TOTAL RETURN*
1 Year.............(2.09)%
5 Years............. 6.77%
Since Inception......4.56%
Fund Inception: 7/1/93
<TABLE>
<CAPTION>
ROULSTON GOVERNMENT MERRILL INTERMEDIATE LEHMAN US GOVT/CORP
SECURITIES FUND TREASURY BOND INDEX INTERMEDIATE BOND INDEX
------------------- -------------------- -----------------------
<S> <C> <C> <C>
7/01/93 10000
7/93 10000 10021 10024
10/93 10304 10235 10253
1/94 10346 10328 10356
4/94 9649 9970 9966
7/94 9748 10112 10118
10/94 9558 10064 10055
1/95 9733 10219 10142
4/95 10170 10591 10540
7/95 10628 10973 10932
10/95 10968 11262 11234
1/96 11350 11618 11600
4/96 10989 11396 11366
7/96 11093 11537 11512
10/96 11471 11886 11888
1/97 11545 12012 12014
4/97 11569 12098 12095
7/97 12046 12527 12556
10/97 12246 12757 12779
1/98 12575 13069 13078
4/98 12588 13154 13175
7/98 12810 13387 13403
10/98 13545 14008 13941
1/99 13546 14075 14073
4/99 13384 14003 14013
7/99 13193 13949 13902
10/99 13262 14109 13820
</TABLE>
*Unlike our fund, the Merrill Lynch Intermediate Treasury Bond Index and
the Lehman U.S. Government/Corporate Intermediate Bond Index do not
reflect fees and expenses and are unmanaged indicators of financial
performance, as such, they are not sold as investments. Past Performance
is no guarantee of future results. The principal value and return of a
mutual fund investment fluctuates with changes in market conditions.
Shares, when redeemed, may be worth more or less than the original cost.
The Fund has selected the Lehman U.S. Government/Corporate Intermediate
Bond Index to replace the Merrill Lynch Intermediate Treasury Bond Index
as the fund's proper benchmark, because the Merrill Lynch index is
considered a widely used and more appropriate index for the fund, which
intends to additionally invest in Corporate Bond issues on a limited
basis.
In order to meet its objective of current income with preservation of capital,
the Government Securities Fund seeks to complement the equity funds through
investments in a broad range of investment grade or comparable quality fixed
income securities. The Fund will further minimize credit risk by normally having
at least 65% of the assets invested in securities issued or guaranteed by the US
Government or its agencies and instrumentalities. While changes in interest
rates affect the Fund's holdings, the primary focus of the portfolio is to
provide a strategy that reflects the use of quantitative analysis, changing
market environments and infrastructure, and addresses the degree of risk and
yield necessary in preserving liquidity and safety of principal.
The signs of stability that appeared in the European and Asian economies at the
end of the first half of 1999 continued to gain credibility in the second half,
particularly in Japan. Assuming that this will persist into 2000, the
accompanying strength in the yen could pull much needed capital into their
equity markets. The same can be said for Europe where the Euro has recently
accelerated to above trend growth. This will be a powerful catalyst for the Euro
as well as overall European growth.
Domestically the US economy continues to show strength. Productivity, capacity
utilization and a current civilian unemployment rate of 4.1% are all
contributing to nervousness in the fixed income markets. Though the Federal
Reserve Board (FED) has tightened monetary conditions three times this year,
those moves have been perceived as a reversal of the previous years easing
rather than reactions to current fundamental events. Those events would include
substantial rises in commodity prices and a relentless decline in the value of
the dollar, particularly against the Japanese yen. Both these developments are
inflationary and suggest that it is premature to assume the FED is finished for
the current tightening cycle.
There has also been a perception that the ongoing charge to record highs by the
equity markets, especially driven by the technology stocks, is of particular
focus to the FED; in that, if the FED can somehow curtail the bull market in
equities, the impact on investor psychology would filter into consumer
psychology. Likely this is not the case. The current state of economic
fundamentals suggest that as increasingly important as technology is to the
economy, the current expansion is broad based. Allowing for the accompanying
rise in the broad index of commodities, particularly energy, it appears the FED
has several reasons to raise rates further.
Overall, with the global economies exerting their influence on the US dollar,
the strength currently being experienced in foreign currencies is negative for
bonds. An upward pressure on yields, in addition to strong fundamentals, has
increased the degree to which the fixed income markets are oversold. Moving
forward this will only be relieved by higher rates or a slowdown in economic
growth, or both.
The Fund entered the second half of 1999 positioning against this backdrop.
Benchmark thirty year treasuries had established a stable position above 6% and
the overall technical condition of the markets suggested some lengthening in
duration. The Fund also acted on its ability to invest in the current agency and
corporate spread markets. Overall quality spreads narrowed in the third quarter
and continued through the beginning of the fourth quarter, suggesting the trend
has momentum. The narrowing has allowed the Fund to remain slightly long in an
environment of rising yields. The current asset mix of the Fund will also
position it well at the time when the bond enters a sustainable rally in prices.
5
<PAGE> 8
ROULSTON FUNDS
ROULSTON EMERGING GROWTH FUND October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 83.54%
ADVERTISING AGENCY -- 4.60%
Flycast Communications Corp.*................... 3,000 $ 151,125
----------
- ------------------------------------------------------------------------------------------------------------------------------------
BUSINESS SERVICES -- 8.51%
BindView Development Corp.*..................... 1,500 45,000
Flextronics International, Ltd.*................ 1,500 106,500
Sapient Corp.*.................................. 1,000 127,875
----------
279,375
- ------------------------------------------------------------------------------------------------------------------------------------
COMPUTER SYSTEMS, SOFTWARE & SERVICES -- 12.00%
Broadbase Software, Inc.*....................... 2,000 91,000
Intraware, Inc.*................................ 1,000 18,375
NaviSite, Inc.*................................. 500 23,500
Packeteer, Inc.*................................ 3,000 102,000
Predictive Systems, Inc.*....................... 500 21,750
Redback Networks, Inc.*......................... 500 57,750
RSA Security, Inc.*............................. 1,000 35,500
Trintech Group PLC*............................. 2,500 44,062
----------
393,937
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 0.24%
Luminant Worldwide Corp.*....................... 200 7,825
- ------------------------------------------------------------------------------------------------------------------------------------
ELECTRONICS -- 13.55%
Applied Micro Circuits Corp.*................... 1,500 116,719
Broadcom Corp., Class A*........................ 700 89,469
C-Cube Microsytems, Inc.*....................... 3,000 133,500
Chartered Semiconductor Manufacturing*.......... 500 16,594
NVIDIA Corp.*................................... 4,000 88,500
----------
444,782
- ------------------------------------------------------------------------------------------------------------------------------------
ENERGY -- 0.10%
Plug Power, Inc.*............................... 200 3,200
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE -- 6.37%
Chiron Corp.*................................... 2,000 57,125
Gilead Sciences, Inc.*.......................... 1,300 82,144
Gliatech, Inc.*................................. 1,000 8,187
Healtheon Corp.*................................ 1,000 33,000
Vertex Pharmaceuticals, Inc.*................... 1,000 28,625
----------
209,081
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE -- 0.08%
Quotesmith.com, Inc.*........................... 300 2,475
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNET RETAIL -- 2.85%
Ashford.com, Inc.*.............................. 1,500 15,188
Calico Commerce, Inc.*.......................... 1,000 62,250
</TABLE>
6
<PAGE> 9
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (CONT.)
INTERNET RETAIL (CONT.)
garden.com, Inc.*............................... 500 $ 6,313
iGo Corp.*...................................... 700 9,887
----------
93,638
- ------------------------------------------------------------------------------------------------------------------------------------
INTERNET SOFTWARE -- 11.44%
Agile Software Corp.*........................... 1,500 $ 147,000
E-Stamp Corp.*.................................. 250 5,813
eGain Communications Corp.*..................... 1,000 29,125
Internap Network Services Corp.*................ 1,000 92,375
Kana Communications, Inc.*...................... 300 25,238
Keynote Systems, Inc.*.......................... 1,000 45,375
Netcentives, Inc.*.............................. 500 8,375
NetZero, Inc.*.................................. 600 12,337
Yesmail.com, Inc.*.............................. 1,000 10,000
----------
375,638
- ------------------------------------------------------------------------------------------------------------------------------------
NETWORK SOFTWARE -- 8.24%
Concord Communications, Inc.*................... 3,000 155,812
JNI Corp.*...................................... 300 16,031
NetIQ Corp.*.................................... 2,000 91,375
ZapMe! Corp.*................................... 1,000 7,500
----------
270,718
- ------------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 14.46%
Aether Systems, Inc.*........................... 500 34,780
Carrier Access Corp.*........................... 2,000 98,875
CIENA Corp.*.................................... 2,000 70,500
Covad Communications Group, Inc.*............... 1,000 48,000
Critical Path, Inc.*............................ 2,000 91,500
DSL.net, Inc.*.................................. 1,000 9,625
FreeShop.com, Inc.*............................. 6,250 105,860
MCK Communications, Inc.*....................... 700 15,750
----------
474,890
- ------------------------------------------------------------------------------------------------------------------------------------
VENTURE CAPITAL -- 1.10%
Brantley Capital Corp.*......................... 5,000 36,250
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS -- (COST $2,227,585)........ 2,742,934
- ------------------------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS -- 30.28%
UMB Money Market................................ 994,353 994,353
TOTAL INVESTMENTS -- 113.82% -- (COST $3,221,938**)... 3,737,287
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS -- (13.82%)... (453,783)
----------
NET ASSETS -- 100.00%........................... $3,283,504
==========
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
** Also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
7
<PAGE> 10
ROULSTON FUNDS
ROULSTON INTERNATIONAL EQUITY FUND October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 94.17%
AUSTRALIA -- 2.84%
BANKS -- 0.78%
National Australia Bank, Ltd.................... 265 $ 20,786
MANUFACTURING -- 0.40%
Broken Hill Proprietary Co., Ltd................ 500 10,563
MULTI MEDIA -- 1.66%
The News Corp., Ltd............................. 1,500 44,438
----------
75,787
- ------------------------------------------------------------------------------------------------------------------------------------
DENMARK -- 0.32%
BANKS -- 0.32%
Den Danske Bank................................. 75 8,537
- ------------------------------------------------------------------------------------------------------------------------------------
FINLAND -- 4.32%
TECHNOLOGY -- 4.32%
Nokia Oyj....................................... 1,000 115,563
- ------------------------------------------------------------------------------------------------------------------------------------
FRANCE -- 13.83%
ELECTRONICS -- 3.40%
STMicroelectronics N.V.......................... 1,000 90,875
FOOD & BEVERAGES -- 2.02%
Danone.......................................... 460 23,575
LVMH (Louis Vuitton Moet Hennessy).............. 500 30,250
----------
53,825
----------
HEALTHCARE SERVICES -- 3.11%
Rhone-Poulenc S.A............................... 1,500 83,250
INSURANCE -- 2.61%
Axa............................................. 1,000 69,750
OIL/REFINING/MARKETING -- 1.54%
Elf Aquitane SA................................. 285 21,126
Total Fina SA................................... 300 20,006
----------
41,132
----------
TECHNOLOGY -- 1.15%
Alcatel......................................... 1,000 30,688
----------
369,520
- ------------------------------------------------------------------------------------------------------------------------------------
GERMANY -- 6.43%
BANKS -- 2.98%
Deutsche Bank AG................................ 1,120 79,777
CHEMICALS -- 1.52%
BASF AG......................................... 225 10,157
Bayer AG........................................ 185 7,564
Celanese AG*.................................... 50 778
Hoechst AG...................................... 500 22,125
----------
40,624
----------
</TABLE>
8
<PAGE> 11
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (CONT.)
GERMANY (CONT.)
CONGLOMERATE -- 0.21%
RWE AG.......................................... 140 $ 5,746
TELECOMMUNICATIONS -- 1.72%
Deutsche Telekom AG............................. 1,000 46,000
----------
172,147
- ------------------------------------------------------------------------------------------------------------------------------------
HONG KONG -- 3.79%
TELECOMMUNICATIONS -- 3.79%
China Telecom (Hong Kong), Ltd.*................ 1,500 101,250
- ------------------------------------------------------------------------------------------------------------------------------------
IRELAND -- 1.45%
HEALTHCARE SERVICES -- 1.45%
Elan Corp. plc*................................. 1,500 38,625
- ------------------------------------------------------------------------------------------------------------------------------------
ITALY -- 1.56%
OIL/REFINING/MARKETING -- 0.13%
ENI............................................. 60 3,525
RETAILING -- 1.03%
Benetton Group SpA.............................. 624 27,417
TELECOMMUNICATIONS -- 0.40%
Telecom Italia SpA.............................. 125 10,813
----------
41,755
- ------------------------------------------------------------------------------------------------------------------------------------
JAPAN -- 22.05%
CHEMICALS -- 0.36%
Fuji Photo Film................................. 300 9,562
ELECTRONICS -- 6.69%
Hitachi, Ltd.................................... 705 76,669
Kyocera Corp.................................... 930 89,047
Nintendo Co., Ltd............................... 660 13,091
----------
178,807
----------
FINANCIAL SERVICES -- 2.69%
Aiful Corp...................................... 250 38,841
The Bank of Tokyo-Mitsubishi, Ltd............... 2,000 33,000
----------
71,841
----------
FOOD & BEVERAGES -- 3.19%
Ito-Yokado Co., Ltd............................. 1,000 79,500
Kirin Brewery Co., Ltd.......................... 50 5,713
----------
85,213
----------
OFFICE/BUSINESS EQUIPMENT -- 0.82%
Canon, Inc...................................... 775 22,039
</TABLE>
9
<PAGE> 12
ROULSTON FUNDS
ROULSTON INTERNATIONAL EQUITY FUND (CONT.) October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (CONT.)
JAPAN (CONT.)
TECHNOLOGY -- 4.54%
Matsushita Electric Industrial Co., Ltd......... 100 $ 21,181
NEC Corp........................................ 200 20,275
Sony Corp....................................... 500 79,875
----------
121,331
----------
TELECOMMUNICATIONS -- 3.76%
Nippon Telegraph & Telephone Corp............... 1,300 100,588
----------
589,381
- ------------------------------------------------------------------------------------------------------------------------------------
NETHERLANDS -- 9.18%
BANKS -- 2.77%
ING Groep N.V................................... 1,250 73,906
CHEMICALS -- 1.95%
Akzo Nobel N.V.................................. 1,210 52,181
ELECTRONICS -- 0.78%
Koninklijke (Royal) Philips Electronics N.V..... 200 20,788
FOOD & BEVERAGES -- 0.35%
Unilever NV..................................... 142 9,470
RETAILING -- 1.16%
Koninklijke Ahold NV............................ 1,000 30,937
TECHNOLOGY -- 2.17%
ASM Lithography Holding N.V.*................... 800 58,100
----------
245,382
- ------------------------------------------------------------------------------------------------------------------------------------
NORWAY -- 0.49%
MANUFACTURING -- 0.49%
Norsk Hydro ASA................................. 330 13,159
- ------------------------------------------------------------------------------------------------------------------------------------
SINGAPORE -- 1.33%
ELECTRONICS -- 1.33%
Flextronics International, Ltd.*................ 500 35,500
- ------------------------------------------------------------------------------------------------------------------------------------
SPAIN -- 5.22%
BANKS -- 2.02%
Banco Bilbao Vizcaya S.A........................ 4,000 54,000
OIL/REFINING/MARKETING -- 0.32%
Repsol-YPF, S.A................................. 420 8,610
TELECOMMUNICATIONS -- 1.87%
Telefonica S.A.*................................ 1,001 49,987
UTILITIES -- 1.01%
Endesa S.A...................................... 1,355 27,015
----------
139,612
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 13
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (CONT.)
SWEDEN -- 0.17%
AUTO & TRUCKS -- 0.17%
Volvo AB........................................ 180 $ 4,658
- ------------------------------------------------------------------------------------------------------------------------------------
SWITZERLAND -- 0.42%
FOOD & BEVERAGES -- 0.42%
Nestle SA....................................... 115 11,094
- ------------------------------------------------------------------------------------------------------------------------------------
UNITED KINGDOM -- 20.77%
BANKS -- 6.71%
Barclays plc.................................... 1,000 119,500
HSBC Holdings plc............................... 970 59,716
----------
179,216
----------
FOOD & BEVERAGES -- 1.25%
Cadbury Schweppes plc........................... 500 13,063
Diageo plc...................................... 500 20,312
----------
33,375
----------
HEALTHCARE SERVICES -- 6.51%
AstraZeneca Group plc........................... 1,258 57,553
Glaxo Wellcome plc.............................. 500 29,938
SmithKline Beecham plc.......................... 1,350 86,400
----------
173,891
----------
OIL/REFINING/MARKETING -- 2.97%
BP Amoco plc.................................... 1,200 69,300
Shell Transport & Trading Co.................... 220 10,092
----------
79,392
----------
TELECOMMUNICATIONS -- 3.33%
British Telecommunications plc.................. 95 17,100
Vodafone AirTouch plc........................... 1,500 71,906
----------
89,006
----------
554,880
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS -- (COST $2,417,524)........ 2,516,850
- ------------------------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS -- 16.39%
Bank of New York Reserves....................... 438,080 438,080
----------
TOTAL INVESTMENTS -- 110.56% -- (COST $2,855,604**)... 2,954,930
----------
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS -- (10.56%)... (282,246)
----------
NET ASSETS -- 100.00%........................... $2,672,684
==========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
** Also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
11
<PAGE> 14
ROULSTON FUNDS
<TABLE>
<CAPTION>
ROULSTON GROWTH FUND October 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 101.20%
CONSUMER DURABLES -- 4.17%
Lowe's Companies, Inc........................... 18,000 $ 990,000
The Home Depot, Inc............................. 7,000 528,500
----------
1,518,500
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER NON-DURABLES -- 9.31%
Abercrombie & Fitch Co., Class A*............... 9,500 258,875
Anheuser-Busch Companies, Inc................... 6,100 438,056
Carnival Corp................................... 12,000 534,000
Claire's Stores, Inc............................ 24,000 423,000
Jones Apparel Group, Inc.*...................... 12,000 379,500
Proctor & Gamble Co............................. 9,000 943,875
The Limited, Inc................................ 10,000 411,250
----------
3,388,556
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCE -- 11.59%
Citigroup, Inc.................................. 20,000 1,082,500
Firstar Corp.................................... 54,080 1,588,600
Freddie Mac..................................... 8,000 432,500
Household International, Inc.................... 5,000 223,125
MBNA Corp....................................... 15,000 414,375
Wells Fargo Co.................................. 10,000 478,750
----------
4,219,850
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE -- 22.60%
Baxter International, Inc....................... 15,000 973,125
Cardinal Health, Inc............................ 25,000 1,078,125
Johnson & Johnson............................... 5,400 565,650
Merck & Co., Inc................................ 15,500 1,233,219
Patterson Dental Co.*........................... 18,000 811,125
Pfizer, Inc..................................... 35,000 1,382,500
Stryker Corp.................................... 35,400 2,185,950
----------
8,229,694
- ------------------------------------------------------------------------------------------------------------------------------------
MATERIALS/SERVICES -- 15.89%
AlliedSignal, Inc............................... 30,000 1,708,125
General Cable Corp.............................. 30,200 222,725
Lexmark International Group, Inc., Class A*..... 12,000 936,750
Paychex, Inc.................................... 33,500 1,319,062
Tyco International, Ltd......................... 40,000 1,597,500
----------
5,784,162
- ------------------------------------------------------------------------------------------------------------------------------------
MEDIA/ENTERTAINMENT -- 1.06%
Gannett Co., Inc................................ 5,000 385,625
- ------------------------------------------------------------------------------------------------------------------------------------
OIL AND GAS EXTRACTION -- 1.90%
Apache Corp..................................... 4,200 $ 163,800
USX-Marathon Group.............................. 12,000 349,500
Vastar Resources, Inc........................... 3,000 177,188
----------
690,488
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
12
<PAGE> 15
ROULSTON FUNDS
<TABLE>
<CAPTION>
ROULSTON GROWTH FUND (CONT.) October 31, 1999
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (CONT.)
TECHNOLOGY -- 28.20%
ADC Telecommunications, Inc.*................... $18,500 $ 882,219
Altera Corp.*................................... 27,700 1,346,912
Analog Devices, Inc.*........................... 14,000 743,750
Computer Sciences Corp.*........................ 12,000 824,250
Compuware Corp.*................................ 16,900 470,031
Corning, Inc.................................... 10,900 857,013
Dallas Semiconductor Corp....................... 3,700 217,837
International Business Machines Corp............ 2,900 285,288
Microchip Technology, Inc.*..................... 6,800 453,050
Microsoft Corp.*................................ 10,000 925,625
Motorola, Inc................................... 2,500 243,594
Nortel Networks Corp............................ 15,200 941,450
Oracle Corp.*................................... 4,200 199,762
Tellabs, Inc.*.................................. 21,000 1,328,250
Xilinx, Inc.*................................... 7,000 550,375
----------
10,269,406
- ------------------------------------------------------------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 6.48%
ALLTEL Corp..................................... 5,800 482,850
Cincinnati Bell, Inc............................ 8,500 176,906
Global Crossing, Ltd.*.......................... 5,000 173,125
MCI WorldCom, Inc.*............................. 15,200 1,304,350
Sprint Corp..................................... 3,000 222,938
----------
2,360,169
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS -- (COST $33,811,218)....... 36,846,450
- ------------------------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS -- 0.31%
UMB Money Market................................ 114,445 114,445
----------
TOTAL INVESTMENTS -- 101.51% -- (COST $33,924,139**)... 36,960,895
----------
</TABLE>
CALL OPTIONS WRITTEN -- (0.07%)
<TABLE>
<CAPTION>
NUMBER OF EXPIRATION STRIKE VALUE
CONTRACTS DATE PRICE (NOTE 1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Microsoft Corp. 100 11/20/99 $95 (24,375)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS -- (1.44%)... (524,973)
-----------
NET ASSETS -- 100.00%................................ $36,411,547
===========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
** Also represents cost for Federal income tax purposes.
See accompanying costs to financial statements.
13
<PAGE> 16
ROULSTON FUNDS
ROULSTON GROWTH AND INCOME FUND October 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS -- 98.47%
AUTO AND TRANSPORTATION -- 2.64%
Cooper Tire & Rubber Co.............................. 47,000 $ 790,188
- ------------------------------------------------------------------------------------------------------------------------------------
PRODUCER DURABLES -- 3.73%
Honeywell, Inc....................................... 5,600 590,450
Ingersoll-Rand Co.................................... 10,000 522,500
-----------
1,112,950
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 13.50%
Carnival Corp........................................ 14,000 623,000
Claire's Stores, Inc................................. 30,000 528,750
Darden Restaurants, Inc.............................. 22,000 419,375
Galileo International, Inc........................... 25,000 751,563
Lowe's Companies, Inc................................ 15,000 825,000
Viad Corp............................................ 36,000 884,250
-----------
4,031,938
- ------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES -- 4.45%
McCormick & Co., Inc................................. 24,000 753,000
SUPERVALU, Inc....................................... 27,434 576,114
-----------
1,329,114
- ------------------------------------------------------------------------------------------------------------------------------------
CONGLOMERATE -- 1.46%
Teleflex, Inc........................................ 12,800 436,000
- ------------------------------------------------------------------------------------------------------------------------------------
ENERGY -- 6.11%
El Paso Energy Corp.................................. 22,000 902,000
The Coastal Corp..................................... 15,000 631,875
USX-Marathon Group................................... 10,000 291,250
-----------
1,825,125
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL DEPOSITORIES -- 17.44%
Charter One Financial, Inc........................... 63,000 1,547,437
Firstar Corp......................................... 30,000 881,250
M & T Bank Corp...................................... 2,100 1,040,550
National City Corp................................... 20,000 590,000
Wells Fargo Co....................................... 24,000 1,149,000
-----------
5,208,237
- ------------------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES -- 16.94%
American International Group, Inc.................... 6,250 $ 643,359
Citigroup, Inc....................................... 20,000 1,082,500
GATX Corp............................................ 8,000 265,500
Marsh & McLennan Companies, Inc...................... 14,000 1,106,875
Merrill Lynch & Co., Inc............................. 9,000 706,500
The Bank of New York Co., Inc........................ 30,000 1,256,250
-----------
5,060,984
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
SCHEDULE OF INVESTMENTS
SHARES VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS (CONT.)
HEALTH CARE -- 6.69%
Baxter International, Inc............................ 15,000 $ 973,125
C. R. Bard, Inc...................................... 19,000 1,024,813
-----------
1,997,938
- ------------------------------------------------------------------------------------------------------------------------------------
MATERIALS & PROCESSING -- 4.38%
Alcoa, Inc........................................... 4,600 279,450
General Cable Corp................................... 96,700 713,162
International Paper Co............................... 6,000 315,750
-----------
1,308,362
- ------------------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY -- 6.10%
Dallas Semiconductor Corp............................ 20,000 1,177,500
Hewlett-Packard Co................................... 1,400 103,688
International Business Machines Corp................. 4,400 432,850
Motorola, Inc........................................ 1,100 107,181
-----------
1,821,219
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES -- 15.03%
Alliant Energy Corp.................................. 20,000 543,750
CenturyTel, Inc...................................... 24,000 970,500
Duke Energy Corp..................................... 15,000 847,500
SBC Communications, Inc.............................. 17,000 865,937
Sprint Corp.*........................................ 17,000 1,263,312
-----------
4,490,999
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS -- (COST $27,551,398)............ $29,413,054
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REPURCHASE AGREEMENT -- 4.63%
UMB Bank, Federal Home Loan Mortgage, $1,412,000 par, 4.93%
coupon, due 11/04/99, dated 10/29/99, to be sold on
11/01/99 at $1,383,568 (Cost $1,383,000).......... 1,383,000 $ 1,383,000
- ------------------------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS -- 0.00%
UMB Money Market...................................... 641 641
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 103.10% -- (COST $28,935,038**)... 30,796,695
LIABILITIES IN EXCESS OF CASH AND OTHER ASSETS -- (3.10%)... (926,521)
-----------
NET ASSETS -- 100.00%................................. $29,870,174
===========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Non-income producing security.
** Also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
15
<PAGE> 18
ROULSTON FUNDS SCHEDULE OF INVESTMENTS
ROULSTON GOVERNMENT SECURITIES FUND October 31, 1999
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL
AMOUNT VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FIXED INCOME SECURITIES -- 96.64%
CORPORATE BONDS -- 7.85%
Media and Entertainment Times Mirror Co. 6.65%, 10/15/01... $1,000,000 $ 1,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 23.51%
Freddie Mac 6.25%, 10/15/02.................... 3,000,000 2,995,080
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS -- 65.28%
U.S. TREASURY BOND -- 0.78%
6.13, 08/15/29................................. 100,000 99,586
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. TREASURY NOTES -- 64.50%
5.88%, 10/31/01................................ 2,500,000 2,503,375
6.00%, 08/15/04................................ 5,700,000 5,712,198
-----------
8,215,573
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT OBLIGATIONS.............. 8,315,159
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL FIXED INCOME SECURITIES -- (COST $12,314,158)... 12,310,239
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 20.53%
UMB Bank, Federal Home Loan Mortgage, $2,670,000 par, 4.93%
coupon, due 11/04/99, dated 10/29/99, to be sold on
11/01/99 at $2,616,074 (Cost $2,615,000)... 2,615,000 2,615,000
- ------------------------------------------------------------------------------------------------------------------------------------
CASH AND EQUIVALENTS -- 0.00%
UMB Money Market............................... 638 638
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 117.17% -- (COST $14,929,796**)... 14,925,877
-----------
LIABILITIES IN EXCESS OF CASH AND OTHER
ASSETS -- (17.17%)........................... (2,187,630)
-----------
NET ASSETS -- 100.00%.......................... $12,738,247
===========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
** Also represents cost for Federal income tax purposes.
See accompanying notes to financial statements.
16
<PAGE> 19
ROULSTON FUNDS STATEMENTS OF ASSETS AND LIABILITIES
October 31, 1999
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
ROULSTON ROULSTON
EMERGING INTERNATIONAL
GROWTH FUND EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Investments in securities at
value (cost $3,221,938,
$2,855,604, $33,924,139,
$28,935,038 and $14,929,796,
respectively)........... $3,737,287 $2,954,930
Receivable for capital stock
sold.................... 13,940 96,500
Receivable for securities
sold.................... 0 205,251
Dividends and interest
receivable.............. 1,745 2,290
Reimbursement due from
advisor................. 1,809 1,629
Deferred organizational costs
(Note A)................ 0 0
Other assets.............. 0 0
---------- ----------
Total assets..... 3,754,781 3,260,600
---------- ----------
LIABILITIES:
Payable for capital stock
redeemed................ 0 0
Payable for securities
purchased............... 461,532 578,372
Accrued expenses.......... 9,745 9,544
Payable to advisor........ 0 0
Distributions payable..... 0 0
Covered call options written,
at value, Premium
Received................ 0 0
---------- ----------
Total liabilities... 471,277 587,916
---------- ----------
NET ASSETS:
Applicable to 169,648,
261,300, 2,855,486,
2,007,932, and 1,308,065
shares outstanding,
respectively............ $3,283,504 $2,672,684
========== ==========
NET ASSETS CONSIST OF:
Capital paid-in........... $2,570,922 $2,555,641
Undistributed net investment
income (loss)........... (3,688) (1,733)
Accumulated net realized gain
(loss) on investments... 200,921 19,450
Net unrealized appreciation
(depreciation) on
investments............. 515,349 99,326
---------- ----------
$3,283,504 $2,672,684
========== ==========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE................... $ 19.35 $ 10.23
========== ==========
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
ROULSTON ROULSTON ROULSTON
GROWTH GROWTH AND GOVERNMENT
FUND INCOME FUND SECURITIES FUND
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS:
Investments in securities at
value (cost $3,221,938,
$2,855,604, $33,924,139,
$28,935,038 and $14,929,796,
respectively)........... $36,960,895 $30,796,695 $14,925,877
Receivable for capital stock
sold.................... 4,747 0 239,679
Receivable for securities
sold.................... 758,651 896,247 0
Dividends and interest
receivable.............. 10,838 37,237 85,999
Reimbursement due from
advisor................. 0 0 14,025
Deferred organizational costs
(Note A)................ 1,550 1,550 1,550
Other assets.............. 2,157 1,444 204
----------- ----------- -----------
Total assets..... 37,738,838 31,733,173 15,267,334
----------- ----------- -----------
LIABILITIES:
Payable for capital stock
redeemed................ 15,674 21,562 13,514
Payable for securities
purchased............... 1,214,362 1,784,655 2,496,975
Accrued expenses.......... 53,226 43,317 16,260
Payable to advisor........ 19,654 13,465 0
Distributions payable..... 0 0 2,338
Covered call options written,
at value, Premium
Received................ 24,375 0 0
----------- ----------- -----------
Total liabilities... 1,327,291 1,862,999 2,529,087
----------- ----------- -----------
NET ASSETS:
Applicable to 169,648,
261,300, 2,855,486,
2,007,932, and 1,308,065
shares outstanding,
respectively............ $36,411,547 $29,870,174 $12,738,247
=========== =========== ===========
NET ASSETS CONSIST OF:
Capital paid-in........... $33,125,947 $23,327,453 $12,879,605
Undistributed net investment
income (loss)........... (323,462) (28,583) (15)
Accumulated net realized gain
(loss) on investments... 572,306 4,709,647 (137,424)
Net unrealized appreciation
(depreciation) on
investments............. 3,036,756 1,861,657 (3,919)
----------- ----------- -----------
$36,411,547 $29,870,174 $12,738,247
=========== =========== ===========
NET ASSET VALUE, OFFERING AND
REDEMPTION PRICE PER
SHARE................... $ 12.75 $ 14.88 $ 9.74
=========== =========== ===========
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to financial statements.
17
<PAGE> 20
ROULSTON FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
ROULSTON ROULSTON
EMERGING INTERNATIONAL
GROWTH FUND EQUITY FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Period Period
Ended Ended
10/31/99* 10/31/99*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Dividends.................. $ 0 $ 2,288
Interest................... 4,562 1,935
-------- --------
Total investment
income.......... 4,562 4,223
-------- --------
EXPENSES:
Investment advisory fees
(Note B)................. 3,173 2,291
Distribution expenses
(Note B)................. 1,058 764
Administration fees........ 1,956 4,278
Transfer agent fees........ 8,198 8,098
Legal fees................. 562 562
Pricing fees............... 6,506 3,698
Registration expenses...... 15,602 15,600
Custodian fees............. 5,169 4,648
Printing fees.............. 4,237 4,237
Auditing fees.............. 1,737 1,737
Insurance fees............. 0 0
Trustees fees.............. 421 421
Amortization of organizational
costs (Note A)........... 0 0
Miscellaneous expenses..... 226 223
-------- --------
Total expenses.... 48,845 46,557
Expenses reimbursed
(Note B)................. (40,595) (40,601)
-------- --------
Net expenses...... 8,250 5,956
-------- --------
NET INVESTMENT INCOME...... (3,688) (1,733)
-------- --------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) on
investments.............. 200,921 19,450
Net change in unrealized
appreciation (depreciation)
on investments........... 515,349 99,326
-------- --------
Net realized and unrealized
gain/(loss) on
investments.............. 716,270 118,776
-------- --------
INCREASE/(DECREASE) IN NET
ASSETS FROM OPERATIONS... $712,582 $117,043
======== ========
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
ROULSTON ROULSTON ROULSTON
GROWTH GROWTH AND GOVERNMENT
FUND INCOME FUND SECURITIES FUND
- ------------------------------------------------------------------------------------------------------------------------------------
Year Year Year
Ended Ended Ended
10/31/99 10/31/99 10/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividends.................. $ 480,678 $ 519,534 $ 0
Interest................... 88,276 70,460 301,688
----------- ----------- ---------
Total investment
income.......... 568,954 589,994 301,688
----------- ----------- ---------
EXPENSES:
Investment advisory fees
(Note B)................. 379,616 292,957 13,251
Distribution expenses
(Note B)................. 126,539 97,652 13,251
Administration fees........ 65,267 53,819 12,151
Transfer agent fees........ 55,502 46,169 30,505
Legal fees................. 19,777 16,411 437
Pricing fees............... 33,310 30,305 21,502
Registration expenses...... 18,591 8,479 8,835
Custodian fees............. 27,160 30,585 16,083
Printing fees.............. 13,497 10,964 598
Auditing fees.............. 11,160 11,781 165
Insurance fees............. 21,576 10,993 1,645
Trustees fees.............. 8,652 8,759 1,229
Amortization of organizational
costs (Note A)........... 3,106 3,106 3,106
Miscellaneous expenses..... 9,282 5,003 769
----------- ----------- ---------
Total expenses.... 793,035 626,983 123,527
Expenses reimbursed
(Note B)................ (94,542) (52,290) (75,824)
----------- ----------- ---------
Net expenses...... 698,493 574,693 47,703
----------- ----------- ---------
NET INVESTMENT INCOME...... (129,539) 15,301 253,985
----------- ----------- ---------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) on
investments.............. 1,202,908 5,434,280 (118,323)
Net change in unrealized
appreciation (depreciation)
on investments........... (5,781,566) (5,371,568) (226,890)
----------- ----------- ---------
Net realized and unrealized
gain/(loss) on
investments.............. (4,578,658) 62,712 (345,213)
----------- ----------- ---------
INCREASE/(DECREASE) IN NET
ASSETS FROM OPERATIONS... $(4,708,197) $ 78,013 $ (91,228)
=========== =========== =========
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period 7/1/99 (the Fund's inception) to 10/31/99.
See accompanying notes to financial statements.
18
<PAGE> 21
ROULSTON FUNDS STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
ROULSTON ROULSTON ROULSTON
EMERGING INTERNATIONAL ROULSTON GROWTH AND
GROWTH FUND EQUITY FUND GROWTH FUND INCOME FUND
- -------------------------------------------------------------------------------------------------------------------------------
Period Period Year Year Year Year
Ended Ended Ended Ended Ended Ended
10/31/99* 10/31/99* 10/31/99 10/31/98 10/31/99 10/31/98
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS:
Net investment income
(loss)................... $ (3,688) $ (1,733) $ (129,539) $ (102,535) $ 15,301 $ 5,722
Net realized gain/(loss)
on investments........... 200,921 19,450 1,202,908 9,390,471 5,434,280 1,978,014
Net change in unrealized
appreciation
(depreciation) on
investments.............. 515,349 99,326 (5,781,566) (14,925,981) (5,371,568) (2,771,879)
---------- ---------- ----------- ----------- ----------- -----------
Increase/Decrease in net
assets................... 712,582 117,043 (4,708,197) (5,638,045) 78,013 (788,143)
---------- ---------- ----------- ----------- ----------- -----------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income................... 0 0 0 0 (22,171) 0
From net realized gains... 0 0 (10,062,251) (4,536,145) (2,716,374) (3,271,584)
---------- ---------- ----------- ----------- ----------- -----------
Total distributions....... 0 0 (10,062,251) (4,536,145) (2,738,545) (3,271,584)
---------- ---------- ----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold..................... 2,627,024 2,575,025 16,187,480 14,584,017 23,543,757 12,962,111
Reinvestment of
dividends................ 0 0 9,955,688 4,489,221 1,813,267 3,167,253
Amount paid for repurchase
of shares................ (56,102) (19,384) (40,348,304) (20,529,323) (25,873,256) (9,863,545)
---------- ---------- ----------- ----------- ----------- -----------
Net increase (decrease)
from capital
transactions............. 2,570,922 2,555,641 (14,205,136) (1,456,085) (516,232) 6,265,819
---------- ---------- ----------- ----------- ----------- -----------
Total increase (decrease)
in net assets............ 3,283,504 2,672,684 (28,975,584) (11,630,275) (3,176,764) 2,206,092
NET ASSETS:
Beginning of period....... 0 0 65,387,131 77,017,406 33,046,938 30,840,846
---------- ---------- ----------- ----------- ----------- -----------
End of period............. $3,283,504 $2,672,684 $36,411,547 $65,387,131 $29,870,174 $33,046,938
========== ========== =========== =========== =========== ===========
Accumulated undistributed
net investment income
(loss) included in net
assets at end of
period................... $ 0 $ 0 $ (323,462) $ (193,923) $ (28,583) $ (21,713)
---------- ---------- ----------- ----------- ----------- -----------
CAPITAL SHARE
TRANSACTIONS:
Shares sold............... 174,830 263,309 1,222,425 784,282 1,445,258 753,991
Shares issued on
reinvestment of
dividends................ 0 0 614,567 241,486 108,971 191,490
Shares repurchased........ (5,182) (2,009) (2,956,848) (1,129,115) (1,626,151) (591,000)
---------- ---------- ----------- ----------- ----------- -----------
Net increase (decrease)
from capital
transactions............. 169,648 261,300 (1,119,856) (103,347) (71,922) 354,481
========== ========== =========== =========== =========== ===========
- -------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
ROULSTON
GOVERNMENT
SECURITIES FUND
- -------------------------------------------------------------------------------------------------------------------------------
Year Year
Ended Ended
10/31/99 10/31/98
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Net investment income
(loss)................... $ 253,985 $ 231,748
Net realized gain/(loss)
on investments........... (118,323) 85,201
Net change in unrealized
appreciation
(depreciation) on
investments.............. (226,890) 162,209
----------- ----------
Increase/Decrease in net
assets................... (91,228) 479,158
----------- ----------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS:
From net investment
income................... (253,966) (231,782)
From net realized gains... 0 0
----------- ----------
Total distributions....... (253,966) (231,782)
----------- ----------
CAPITAL SHARE
TRANSACTIONS:
Proceeds from shares
sold..................... 12,015,925 2,498,395
Reinvestment of
dividends................ 234,777 225,548
Amount paid for repurchase
of shares................ (4,224,017) (2,325,367)
----------- ----------
Net increase (decrease)
from capital
transactions............. 8,026,685 398,576
----------- ----------
Total increase (decrease)
in net assets............ 7,681,491 645,952
NET ASSETS:
Beginning of period....... 5,056,756 4,410,804
----------- ----------
End of period............. $12,738,247 $5,056,756
=========== ==========
Accumulated undistributed
net investment income
(loss) included in net
assets at end of
period................... $ (15) $ (34)
----------- ----------
CAPITAL SHARE
TRANSACTIONS:
Shares sold............... 1,224,142 247,860
Shares issued on
reinvestment of
dividends................ 22,213 22,410
Shares repurchased........ (423,245) (230,820)
----------- ----------
Net increase (decrease)
from capital
transactions............. 823,110 39,450
=========== ==========
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* For the period 7/1/99 (the Fund's inception) to 10/31/99.
See accompanying notes to financial statements.
19
<PAGE> 22
ROULSTON FUNDS
The tables below set forth financial data for a share of beneficial interest
outstanding throughout each period presented.
<TABLE>
<CAPTION>
ROULSTON
EMERGING ROULSTON
GROWTH INTERNATIONAL
FUND EQUITY FUND ROULSTON GROWTH FUND
Period Period Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended
10/31/99* 10/31/99* 10/31/99 10/31/98 10/31/97 10/31/96 10/31/95
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD.......................... $10.00 $10.00 $ 16.45 $ 18.88 $ 15.50 $ 13.55 $ 12.27
------ ------ ------- ------- ------- ------- -------
Income from Investment Operations:
Net investment income (loss)...... (0.02) (0.01) (0.06) (0.03) (0.01) 0.02 0.04
Net realized and unrealized gain
(loss) on investments........... 9.37 0.24 (1.03) (1.30) 4.55 2.16 2.04
------ ------ ------- ------- ------- ------- -------
Total from investment
operations...................... 9.35 0.23 (1.09) (1.33) 4.54 2.18 2.08
------ ------ ------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
From net investment income........ 0.00 0.00 0.00 0.00 (0.01) (0.03) (0.04)
From realized capital gains....... (0.00) (0.00) (2.61) (1.10) (1.15) (0.20) (0.76)
------ ------ ------- ------- ------- ------- -------
Total distributions........... 0.00 0.00 (2.61) (1.10) (1.16) (0.23) (0.80)
------ ------ ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD.... $19.35 $10.23 $ 12.75 $ 16.45 $ 18.88 $ 15.50 $ 13.55
====== ====== ======= ======= ======= ======= =======
TOTAL RETURN...................... 93.30** 2.30%** (9.18)% (7.73)% 31.00% 16.28% 18.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)... $3,284 $2,673 $36,412 $65,387 $77,017 $57,198 $49,408
Ratio of expenses to average net
assets
before reimbursement of
expenses by Adviser......... 11.54%*** 15.24%*** 1.57% 1.43% 1.58% 1.69% 1.57%
after reimbursement of
expenses by Adviser......... 1.95%*** 1.95%*** 1.38% 1.38% 1.38% 1.38% 1.41%
Ratio of net investment income to
average net assets
before reimbursement of
expenses by Adviser......... (10.46)%*** (13.86)%*** (0.44)% (0.18)% (0.25)% (0.16)% 0.14%
after reimbursement of
expenses by Adviser......... (0.87)%*** (0.57)%*** (0.26)% (0.13)% (0.05)% 0.15% 0.29%
Portfolio turnover................ 79.91** 51.26%** 121.21% 52.23% 41.16% 58.01% 46.51%
</TABLE>
* For the period 7/1/99 (the Fund's inception) to 10/31/99.
** Not annualized
*** Annualized
See accompanying notes to financial statements.
20
<PAGE> 23
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
ROULSTON GROWTH AND INCOME FUND ROULSTON GOVERNMENT SECURITIES FUND
- ----------------------------------------------------------------------------------------------------------------------
Year Year Year Year Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended
10/31/99 10/31/98 10/31/97 10/31/96 10/31/95 10/31/99 10/31/98 10/31/97 10/31/96 10/31/95
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 15.89 $ 17.87 $ 14.22 $ 12.29 $ 10.68 $ 10.43 $ 9.90 $ 9.75 $ 9.84 $ 9.03
------- ------- ------- ------- ------- ------- ------ ------ ------ ------
0.01 0.01 0.05 0.13 0.15 0.47 0.49 0.49 0.49 0.49
(0.08) (0.15) 4.83 2.04 1.68 (0.69) 0.53 0.15 (0.05) 0.81
------- ------- ------- ------- ------- ------- ------ ------ ------ ------
(0.07) (0.14) 4.88 2.17 1.83 (0.22) 1.02 0.64 0.44 1.30
------- ------- ------- ------- ------- ------- ------ ------ ------ ------
(0.01) 0.00 (0.09) (0.14) (0.12) (0.47) (0.49) (0.49) (0.53) (0.49)
(0.93) (1.84) (1.14) (0.10) (0.10) 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- ------- ------- ------ ------ ------ ------
(0.94) (1.84) (1.23) (0.24) (0.22) (0.47) (0.49) (0.49) (0.53) (0.49)
------- ------- ------- ------- ------- ------- ------ ------ ------ ------
$ 14.88 $ 15.89 $ 17.87 $ 14.22 $ 12.29 $ 9.74 $10.43 $ 9.90 $ 9.75 $ 9.84
======= ======= ======= ======= ======= ======= ====== ====== ====== ======
(1.07)% (1.20)% 36.61% 17.77% 17.36% (2.09)% 10.61% 6.76% 4.58% 14.76%
$29,870 $33,047 $30,841 $23,071 $23,082 $12,738 $5,057 $4,411 $5,752 $8,647
1.61% 1.53% 1.76% 1.83% 1.79% 2.34% 2.19% 2.70% 2.05% 2.16%
1.48% 1.49% 1.50% 1.50% 1.50% 0.90% 0.90% 0.90% 0.90% 0.90%
(0.29)% (0.02)% 0.03% 0.58% 0.98% 3.38% 3.60% 3.23% 3.78% 3.89%
0.04% 0.02% 0.29% 0.91% 1.26% 4.81% 4.89% 5.03% 4.93% 5.16%
126.99% 40.43% 42.45% 34.02% 13.36% 837.17% 89.89% 21.01% 21.23% 1.28%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
21
<PAGE> 24
ROULSTON FUNDS
October 31, 1999
NOTE (A) SIGNIFICANT ACCOUNTING POLICIES:
Roulston Funds (the "Trust"), formerly known as Fairport Funds, 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, as amended to date.
On July 1, 1999, the Trust changed its name from Fairport Funds to Roulston
Funds. The Trust currently consists of five Funds (the "Funds"): Roulston Growth
Fund (the "Growth Fund"), Roulston Growth and Income Fund (the "Growth and
Income Fund"), Roulston Government Securities Fund (the "Government Fund"),
Roulston International Equity Fund (the "International Equity Fund") and
Roulston Emerging Growth Fund (the "Emerging Growth 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 Growth Fund, the Growth and Income Fund and the Government Fund
of the Trust (collectively, the "Acquiring Funds") acquired, in a tax free
reorganization, all of the assets of each of the Roulston Midwest Growth Fund,
the Roulston Growth and Income Fund and the Roulston Government Securities 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 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
Acquiring Funds' inception, July 1, 1993.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
The following is a summary of significant accounting policies consistently
followed by the Trust.
(1) SECURITY VALUATION: The portfolio securities of each Fund will be valued at
market value. Each Fund uses one or more pricing services to provide market
quotations for equity, fixed income and variable income securities. If market
quotations are not available, securities will be valued by a method which the
Board of Trustees believes accurately reflects fair value. Equity securities
which are listed or admitted to trading on a national securities exchange or
other market trading system which reports actual transaction prices on a
contemporaneous basis will be valued at the last sales price on the exchange or
other market system on which the security is principally traded. For fixed and
variable income securities, the pricing service may use a matrix system of
valuation which considers factors such as securities prices, yield features,
call features, ratings and developments related to a specific security. 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 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 creditworthy by Roulston & Company, Inc.
("Roulston"), the Funds' investment adviser, subject to the seller's agreement
to repurchase and the Fund's agreement to resell such securities at a mutually
agreed-upon date and price. Securities purchased subject to repurchase
agreements are deposited with the applicable Fund's custodian and, pursuant to
the terms of the repurchase agreement, must have an aggregate market value
greater than 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 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.
22
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS
(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 trade date. Security gains and losses are determined on
the identified cost basis. Discounts and premiums on securities purchased are
amortized over the life of the respective securities.
(5) DIVIDENDS AND DISTRIBUTIONS: Substantially all of the net investment income
(exclusive of capital gains) of the Growth Fund, Growth and Income Fund,
International Equity Fund and the Emerging Growth Fund is distributed in the
form of semi-annual dividends. Net investment income (exclusive of capital
gains) of the Government Fund is declared daily and distributed in the form of
monthly dividends. Substantially all of the capital gains realized by a Fund, if
any, will be distributed annually.
(6) DEFERRED ORGANIZATIONAL COSTS: Organizational costs of the Acquiring Funds
are being amortized on a straight-line basis over five years commencing April
29, 1995. The Roulston International Equity Fund and the Roulston Emerging
Growth Fund did not incur any organizational costs.
(7) FOREIGN CURRENCY TRANSLATION: The books and records of each Fund are
maintained in United States (U.S.) dollars. Foreign currencies, investments and
other assets and liabilities for the International Equity Fund are translated,
as applicable, into U.S. dollars at the exchange rates prevailing at the end of
each business day. Purchases and sales of investment securities, income and
expenses are translated at the exchange rate prevailing on the respective dates
of such transactions. Unrealized gains and losses, which result from changes in
foreign exchange rates and/or changes in market prices of securities, have been
included in net unrealized appreciation/(depreciation) on investments.
NOTE (B) RELATED PARTY TRANSACTIONS:
The Trust and Roulston have entered into an Investment Advisory Agreement (the
"Agreement") dated as of January 20, 1995, as amended as of July 1, 1999. Under
the 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 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 each of the International Equity Fund and the Emerging
Growth Fund, Roulston receives a fee at an annual rate of 0.75% of such Fund's
average daily net assets. With respect to the Government Fund, Roulston receives
a fee at an annual rate of 0.25% of the average daily net assets up to $100
million of such assets, and 0.125% of such assets of $100 million or more. Such
fees are calculated daily and paid monthly.
Pursuant to Rule 12b-1 under the Act, the Trust has adopted a Distribution and
Shareholder Service Plan dated January 20, 1995, as amended as of March 1, 1996
(the "Plan"), under which each Fund is authorized to pay or reimburse Roulston
Research Corp. (the "Distributor"), ultimately a wholly-owned subsidiary of
Roulston, a periodic amount calculated at an annual rate not to exceed 0.25% of
the average daily net asset value of such Fund. Such an amount may be used by
the Distributor to pay broker-dealers, banks and other 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.
Roulston has agreed with the Trust to waive its investment advisory fee and to
reimburse certain other expenses of the Funds until further written notice to
shareholders to the extent necessary to cause total operating expenses as a
percentage of net assets of the Growth Fund, the Growth and Income Fund, the
Government Fund, the International Equity Fund and the Emerging Growth Fund not
to exceed 1.38%, 1.50%, 0.90%, 1.95% and 1.95%, respectively.
23
<PAGE> 26
ROULSTON FUNDS NOTES TO FINANCIAL STATEMENTS
Information regarding these transactions is as follows for the year ended
October 31, 1999:
<TABLE>
<CAPTION>
Emerging International
Growth Equity Growth
Fund Fund Fund
- -------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT ADVISORY FEES:
Fees before fee
waiver................ $ 3,173 $ 2,291 $379,616
Fees waived............. (3,173) (2,291) (94,542)
RULE 12b-1 FEES:
Fees.................... 1,058 764 126,539
Other expenses
reimbursed............ (37,422) (38,310) --
-------- -------- --------
Net fees and expenses to
related parties....... $(36,364) $(37,546) $411,613
======== ======== ========
- -------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Growth and Government
Income Fund Fund
- -------------------------------------------------------
<S> <C> <C>
INVESTMENT ADVISORY FEES:
Fees before fee waiver...... $292,957 $ 13,251
Fees waived................. (52,290) (13,251)
RULE 12b-1 FEES:
Fees........................ 97,652 13,251
Other expenses reimbursed... -- (62,573)
-------- --------
Net fees and expenses to
related parties........... $338,319 $(49,322)
======== ========
- -------------------------------------------------------
</TABLE>
Certain officers and trustees of the Trust are also officers, directors and/or
employees of Roulston and the Distributor. The officers and such interested
trustees serve without direct compensation from the Trust.
NOTE (C) INVESTMENT TRANSACTIONS:
Purchases and sales of investment securities (excluding short-term securities)
for the year ended October 31, 1999 were:
<TABLE>
<CAPTION>
Proceeds
Purchases from Sales
(000) (000)
- ----------------------------------------------------------
<S> <C> <C>
Emerging Growth Fund............. $3,169 $1,142
International Equity Fund........ 2,991 593
Growth Fund...................... 59,995 75,618
Growth and Income Fund........... 47,357 48,985
Government Fund.................. 50,858 42,069
- ----------------------------------------------------------
</TABLE>
NOTE (D) COVERED CALL OPTIONS WRITTEN:
As of October 31, 1999, portfolio securities valued at ($9,256) were held in
escrow by the custodian in connection with the following covered call options
written by the Roulston Growth Fund.
<TABLE>
<CAPTION>
Shares
Common Expiration Exercise Subject to
Stocks Date Price Call Value
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
Microsoft Corp. 11/20/99 $95.00 100 $(24,375)
- --------------------------------------------------------------
</TABLE>
NOTE (E) UNREALIZED APPRECIATION AND
DEPRECIATION:
At October 31, 1999, 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) App/(Dep)
(000) (000) (000)
- ------------------------------------------------------------------
<S> <C> <C> <C>
Emerging Growth........ $ 575 $ (60) $ 515
International Equity
Fund................. 140 (41) 99
Growth Fund............ 4,748 (1,711) 3,037
Growth and Income
Fund................. 3,930 (2,068) 1,862
Government Fund........ 8 (12) (4)
- ------------------------------------------------------------------..
</TABLE>
NOTE (F) RISKS RELATING TO FOREIGN SECURITY INVESTMENTS:
Securities in which the International Equity Fund invests may be denominated or
quoted in currencies other than the U.S. Dollar. Changes in foreign currency
exchange rates affect the value of the Fund's portfolio. Foreign investments
involve special risks not applicable to investments in securities of U.S.
issuers. Such risks include: imposition of exchange controls or currency
devaluations, less extensive regulation of foreign brokers, securities markets
and issuers, political, economic or social instability, less publicly available
information and less liquidity in the market for such securities, different
accounting standards and reporting obligations, foreign economies differ from
the U.S. economy (favorably or unfavorably) in areas such as growth of gross
domestic product, rates of inflation, unemployment, currency depreciation and
balance of payments positions, possibility of expropriation (the taking of
property or amending of property rights by a foreign government) or foreign
ownership limitations, excessive or confiscatory taxation.
24
<PAGE> 27
ROULSTON FUNDS INDEPENDENT AUDITOR'S REPORT
To The Shareholders and
Trustees of Roulston Funds:
We have audited the accompanying statements of assets and liabilities of
Roulston Funds (comprising, respectively, the Roulston Growth Fund, the Roulston
Growth and Income Fund, the Roulston Government Securities Fund, the Roulston
International Equity Fund, and the Roulston Emerging Growth Fund) including the
schedules of portfolio investments, as of October 31, 1999, the related
statements of operations, the statements of changes in net assets and financial
highlights for each of the periods indicated. These financial statements and
financial highlights are the responsibility of the Roulston Funds' management.
Our responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits 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, 1999, by correspondence with the custodian and brokers. An audit
also included 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 each
of the respective portfolios constituting the Roulston Funds as of October 31,
1999, and the results of their operations, the changes in their net assets and
their financial highlights for the periods indicated, in conformity with
generally accepted accounting principles.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
November 30, 1999
25
<PAGE> 28
LOGO
3636 Euclid Ave., Suite 3000
Cleveland, Ohio 44115
1-800-332-6459
Trustees:
Thomas V. Chema
David B. Gale
Scott D. Roulston
Officers:
Scott D. Roulston, President
Kevin M. Crotty, Treasurer
Charles A. Kiraly, Secretary
Adviser:
Roulston & Company, Inc.
3636 Euclid Ave., Suite 3000
Cleveland, Ohio 44115
Distributor:
Roulston Research Corp.
3636 Euclid Ave., Suite 3000
Cleveland, Ohio 44115
Administrator & Transfer Agent:
First Data Investor Services Group, Inc.
3200 Horizon Drive
King of Prussia, Pennsylvania 19406
Legal Counsel:
Baker & Hostetler LLP
65 E. State Street
Columbus, Ohio 43215
Independent Public Accountants:
McCurdy & Associates CPA's, Inc.
27955 Clemens Road
Westlake, Ohio 44145
For information, call 1-800-332-6459
or visit us online at www.roulstonfunds.com
Roulston Funds take their logo from
the historic Fairport Harbor
Lightouse, located on Lake Erie at
the Grand River, just east of the
Funds' headquarters in Cleveland,
Ohio. Originally built in 1825, the
Fairport Harbor Lighthouse guided
ships safely in and out of the
harbor for 100 years. In its early
years the lightouse was considered
the gateway to the Western Reserve
and the vast frontiers of the
Northwest Territories and beyond.
Later the lightouse served as a
becon and supply stop for pioneers
and travelers on their way to
western Great Lakes ports and
beyond. The original brick structure
was rebuilt in 1871 of sandstone
blocks, as it remains today.
This report is submitted for the
general information of the
shareholders of the Funds. It is not
authorized for distribution to
prospective investors in a Fund
unless proceeded or accompanied by
an effective Prospectus which
includes details regarding the
Fund's objectives, policies,
expenses and other information.
