<PAGE> 1
JHAVERI VALUE
[JHAVERI VALUE LOGO]
FUND
A NO-LOAD CAPITAL APPRECIATION FUND
1995 ANNUAL REPORT
<PAGE> 2
DEAR FELLOW SHAREHOLDERS:
The first year of operation for the Jhaveri Value Fund was a successful one. We
achieved our goal of growing from the initial $100,000 on May 3, 1995 to over
$10 million in total net assets. We were also successful in positioning the Fund
for long term growth. The performance during the important investment buildup
phase lagged the S&P 500, but once the Fund became fully invested, it began to
outperform the market. The 1996 total return through April 30, 1996 for JVF was
16.6%, as opposed to only 6.9% for the S&P 500. (See 1996 Performance JVF vs S&P
500)
<TABLE>
<CAPTION>
1996 PERFORMANCE - VJF VS S&P 500
12/31/95 1/31/96 2/29/96 3/31/96 4/30/96
<S> <C> <C> <C> <C> <C>
JVF $11,660
S&P 500 $10,687
</TABLE>
* Past performance in not predictive of future performance. The value of your
shares will fluctuate and will be worth more or less than their original cost
at the time of redemption.
The Jhaveri Value Fund's first year of operation can be segmented into three
phases which can better explain the performance (See JVF Cash and Stock
Investments):
ACCOUNT TRANSFER PHASE - During the first five months of operation all of our
individually managed accounts transferred into the Fund. Many of these accounts
had high cash levels as well as stocks that were approaching full valuation or
overvaluation. Many of these securities were sold soon after
2
<PAGE> 3
their transfer. Because the market was making new highs and continued rising
without a meaningful correction, buying opportunities were limited. This
resulted in a high cash level. JVF tracked the S&P 500 for the first four months
of operation. However, by September 20, 1995, cash built up to a level of more
than 34% and the performance began to lag.
<TABLE>
<CAPTION>
JVF CASH AND STOCK INVESTMENTS
5/31/95 6/30/95 7/31/95 8/31/95 9/30/95 10/31/95 11/30/95 12/31/95 1/31/96 2/29/96 3/31/96 4/30/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Cash
Stock
- Account Transfer Phase - Investment Buildup Phase - Full Investment Phase -
</TABLE>
INVESTMENT BUILDUP PHASE - During this period, the market had a minor
correction, but the technology, retail, and utility industries had a major
correction. We purchased many stocks in these undervalued industries; however,
these stocks were either bottoming or in a downtrend. The Fund was close to
fully invested by the end of December 1995, and cash levels continued to decline
to less than 1%. At this point the Jhaveri Value Fund was diversified with
investments in over 180 stocks and more than 40 industry groups.
FULL INVESTMENT PHASE - Once the Fund became fully invested, we began to achieve
our long-term goal of outperforming the S&P 500. For the period 12/29/95 -
5/22/96 the Jhaveri Value Fund has gone up 20.0% and the S&P 500 has gone up
only 10.2%.
3
<PAGE> 4
<TABLE>
<CAPTION>
JVF TOP 10 HOLDINGS
Individual Companies (Total 189)
- --------------------------------
<S> <C> <C>
1. K Mart Corp 4.18%
2. Chiquita Brands International Inc 3.70%
3. Empresas ICA S.A. ADR 3.48%
4. Woolworth Corp 3.13%
5. Telefonos de Mexico S.A. ADR 3.06%
6. Westinghouse Electric Corp 2.80%
7. General Motors Corp 1.98%
8. United States Surgical Corp 1.79%
9. Edison International 1.78%
10. Carter Wallace Inc 1.53%
TOTAL 27.43%
Industries (Total 76)
- ---------------------
1. Electronic - Semiconductors 7.82%
2. Retail - Department Stores 5.12%
3. Utility - Electric Power 4.88%
4. Building - Heavy Construction 4.84%
5. Retail - Discount & Variety 4.40%
6. Computers - Peripheral Equipment 4.13%
7. Telecommunication Equipment 4.08%
8. Food - Miscellaneous Preparation 4.05%
9. Utility - Telephone 3.18%
10. Machinery - Electrical Equipment 2.80%
TOTAL 45.30%
</TABLE>
LOOKING AHEAD - For the past one year, equity markets have been trading at
historically high levels. Typically, at the market top, there is increased
volatility and speculation, increased IPOs and secondary offerings, increased
mergers and acquisitions, spin-offs and stock splits, and significant sector
rotation. The current market is characterized by all these activities. The
current market is also overvalued when you compare it with historical market
fundamentals such as price/earnings ratio and dividend payout rates. All these
characteristics warrant greater
4
<PAGE> 5
caution. However, the market may continue to move to a higher trading range
predicated by:
1. Favorable interest rate environment
2. Contained inflation
3. Rising employment without wage pressure
4. Undervaluation of the Dollar
5. Moderate corporate earnings and GDP growth
6. Strong competitive position of US companies - significant cash flow
generation, balance sheet improvement, and share repurchase programs
7. Increasing participation by employees in retirement (401K) and IRA
plans with greater allocation to equity mutual funds
8. Increasing global demand for goods and services due to increasing
purchasing power
The market appears to be in a secular uptrend and this bull market may continue
for a long time. Over the last two decades, the US and Global economies have
become extremely competitive and diversified with no single industry such as
auto or housing dominating the market. Industries such as telecommunication,
technology, health care, pharmaceutical, entertainment, gaming, chemical, and
utilities are all equally dominant industries. Many industries are affected
differently by domestic and global economic and political factors. For this
reason, we have corrections in individual industries relieving overvaluation
without affecting the overall trend of the market. Our Stock Selection/Valuation
Model and Risk Management Strategy is suited to take advantage of this
rotationally correcting market.
We are confident that our disciplined investment strategy will result in a
prosperous year. We thank you for your continued support.
Sincerely,
/s/ Ramesh C. Jhaveri /s/ Saumil R. Jhaveri
- ---------------------- ---------------------
Ramesh C. Jhaveri Saumil R. Jhaveri
Chief Executive Officer President
5
<PAGE> 6
FUND OBJECTIVE
The Jhaveri Value Fund's objective is:
- Long-term capital appreciation
INVESTMENT OPERATING STRATEGY
The Jhaveri Value Fund's operating strategy is designed to achieve it's
objective through disciplined Buy/Sell/Hold decisions based on:
- Stock Selection/Valuation Model comprised of proprietary stock,
industry, and market models (see prospectus for details)
- Risk Management Strategy designed to reduce purchase cost, protect
profit, and preserve capital (see prospectus for details)
The manager believes this strategy will achieve long-term capital appreciation
at lower risk.
STOCK UNIVERSE
The Jhaveri Value Fund's stock universe is comprised of 1500 stocks traded on
NYSE, NASDAQ, and AMEX markets. These 1500 stocks represent:
- More than 125 industries in all sectors of the economy
- More than 80% of the market capitalization in these markets
- More than 70% of the daily trading volume in these markets
6
<PAGE> 7
<TABLE>
<CAPTION>
GROWTH OF $10,000 INVESTMENT IN JVF
5/3/95 5/31/95 6/30/95 7/31/95 8/31/95 9/30/95 10/31/95 11/30/95 12/31/95
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
March 31, 1996
S&P 500 Value = $12,667
JVF Value = $10,681
JVF's total return for the
period 5/3/95 - 3/31/96
was 7.45% (Annualized)
1/31/96 2/29/96 3/31/96 4/30/96
<S> <C> <C> <C> <C>
March 31, 1996
S&P 500 Value = $12,667
JVF Value = $10,681
JVF's total return for the
period 5/3/95 - 3/31/96
was 7.45% (Annualized)
</TABLE>
* Past performance in not predictive of future performance. The value of your
share will fluctuate and will be worth more or less than their original cost at
the time of redemption.
7
<PAGE> 8
SCHEDULE OF INVESTMENTS
JHAVERI VALUE FUND
March 31, 1996
<TABLE>
<CAPTION>
COMMON STOCKS - 96.95%
Shares Company Market Value
------ ------- ------------
AUTO/TRUCK-REPLACE/ORIG.PARTS - 0.38%
<S> <C> <C>
1,000 Exide Corp $ 23,375
600 Federal-Mogul Corp 11,175
--------
34,550
AUTOMOBILE-MANUFACTURING - 2.38%
5,600 Consorcio Grupo Dina S.A. ADR 11,200
720 Ford Motor Company 24,750
3,400 General Motors Corp 181,050
--------
217,000
BANKS-MONEY CENTER - 1.24%
1,600 Bankers Trust NY 113,400
BANKS-REGIONAL - 0.47%
1,400 P N C Bank Corp 43,050
BEVERAGES-ALCOHOLIC/SOFT DRINK - 0.81%
3,100 Buenas Aires Embot 51,538
3,500 C O T T Corp (New) 22,313
--------
73,850
BROADCASTING-RADIO/TV/CABLE - 0.27%
1,000 Grupo Televisa S.A. ADR * 24,875
BUILDING-HEAVY CONSTRUCTION - 4.84%
24,400 Empresas ICA Sociedad S.A. ADR * 317,200
16,100 Grupo Tribasa S.A. ADR * 110,688
11,100 Morrison-Knudsen Corp * 13,875
--------
441,763
BUILDING-RESIDENT/COMMERCIAL - 0.35%
2,000 Kaufman & Broad Home Corp 32,000
BUSINESS PRODUCTS-RETAIL/WHLES - 0.37%
2,100 B M C West Corp * 34,125
CHEMICALS-DIVERSIFIED - 0.15%
1,000 Rexene Corp 13,375
CHEMICALS-SPECIALTY - 0.25%
3,400 Methanex Corp * 22,950
</TABLE>
The accompanying notes are an integral part of these financial statements
8
<PAGE> 9
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
COMMERCIAL SERVICES-MISC - 2.11%
<S> <C> <C>
2,900 First Alert Inc * 19,575
2,400 Franklin Quest Co * 64,800
3,700 Sensormatic Electronics Corp 74,925
1,200 Value Health Inc * 33,000
--------
192,300
COMPUTER-GRAPHICS - 1.89%
1,400 Diamond Multimedia Systems * 22,400
1,900 Q M S Inc * 9,025
9,600 Radius Inc * 18,600
7,000 Scitex Ltd. Ord 97,125
1,000 Silicon Graphics Inc * 25,000
--------
172,150
COMPUTER-LOCAL NETWORK - 0.10%
2,200 Tricord Sys Inc * 9,075
COMPUTER-MAINFRAMES - 1.70%
3,700 Amdahl Corporation * 31,450
3,900 Sequent Computer Systems * 45,338
13,000 Unisys Corp * 78,000
--------
154,788
COMPUTER-MINI/MICRO - 1.21%
1,200 Apple Computer * 29,475
8,000 A S T Research Inc * 38,125
1,900 Micron Electronics Inc * 18,763
2,700 Tandem Computers * 23,963
--------
110,325
COMPUTER-PERIPHERAL EQUIPMENT - 4.13%
9,600 Alliance Semiconductor Corp * 92,400
13,300 American Power Conversion * 133,000
800 Quantum Corp * 14,400
500 Read-Rite Corp * 9,375
4,218 Storage Tech Corp * 110,195
3,000 Syquest Technology Inc * 17,813
--------
377,183
COMPUTER-SERVICES - 0.54%
600 Ameridata Technologies Inc * 6,825
7,700 Intelligent Electronics Inc * 42,350
--------
49,175
COMPUTER-SOFTWARE - 2.46%
2,100 Acclaim Entertainment * 22,181
300 Adobe Systems Inc 9,675
7,300 Banyan Systems Inc * 55,663
1,200 F T P Software Inc * 14,700
2,200 Netmanage Inc * 23,925
1,500 Novell Inc. * 20,063
</TABLE>
The accompanying notes are an intergral part of these financial statements
9
<PAGE> 10
<TABLE>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
1,600 Symantec Corp * 20,600
3,700 Wall Data Inc * 57,350
-------
224,156
CONSUMER PRODUCTS-GLASS/METAL - 0.21%
3,340 Vitro S.A. 19,205
DIVERSIFIED OPERATION - 1.94%
1,700 A C X Technologies Inc * 30,813
500 Corning Inc 17,500
5,070 Hanson PLC ADR 76,050
1,400 Jostens Incorporated 31,325
1,700 Triarc Cos Inc.(Del) * 21,250
-------
176,938
ELECTRONIC PRODUCTS/MISC. - 0.17%
300 Texas Instruments 15,263
ELECTRONIC-EQUIPMENT - 0.20%
1,100 Teradyne Inc * 18,425
ELECTRONIC-SEMICONDUCTORS - 7.82%
3,500 Advanced Micro Devices * 60,375
400 Applied Materials Inc * 13,950
2,100 Cirrus Logic Inc * 37,931
400 Credence Systems Inc * 6,700
2,400 Cypress Semiconductor * 28,200
3,900 Integrated Device Technology * 44,363
400 Integrated Process Equiptment * 7,000
5,200 Integrated Silicon Solution * 68,900
200 Intel Corp 11,375
1,000 K L A Instruments * 22,625
1,300 Kulicke & Soffa Ind * 20,475
700 Lam Research Corp * 24,500
1,400 L S I Logic Corp * 37,450
4,100 Micron Technology Inc 128,638
300 Motorola Inc 15,900
2,500 National Semiconductor * 34,688
2,300 Network Peripherals Inc * 33,638
7,300 O P T I Inc * 41,975
500 Silicon Valley Group Inc * 12,188
1,400 Tseng Labs Inc * 14,000
3,800 V L S I Technology Inc * 48,925
-------
713,794
FINANCE-INVESTMENT BROKERS - 0.83%
1,400 Paine Webber Group Inc 30,800
1,200 Salomon Inc 45,000
-------
75,800
FINANCE-SAVINGS & LOAN - 0.29%
1,100 Great Western Financial Corp 26,538
</TABLE>
The accompanying notes are an integral part of these financial statements
10
<PAGE> 11
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
FOOD-MISC.PREPARATION - 4.05%
<S> <C> <C>
1,740 Archer Daniels Midland 31,973
21,800 Chiquita Brands Intl.Inc 337,900
-------
369,873
FUNERAL SVS & REL - 0.13%
400 Loewen Group Inc 11,700
HOUSEWARES - 0.66%
5,500 Shaw Industries Inc 60,500
INSURANCE-LIFE/PROPERTY/CAS. - 0.39%
2,000 John Alden Finl Corp 35,250
LEISURE PRODUCTS - 1.51%
500 Avid Technology Inc * 10,500
1,200 Brunswick Corp 27,600
20,300 C M L Group Inc 63,438
10,900 Kennetech Corp * 11,581
1,900 Score Board Inc. New * 7,006
700 Topps Company Inc * 3,850
2,300 Tyco Toys Inc * 13,800
-------
137,775
LEISURE SERVICES - 0.46%
4,400 Discovery Zone Inc * 3,850
2,500 Intl Game Technology 34,063
2,600 President Casinos Inc * 3,616
-------
41,528
MACHINERY-ELECTRICAL EQUIPMENT - 2.80%
13,250 Westinghouse Electric Corp 255,063
MEDICAL INSTRUMENTS/PRODUCTS - 1.79%
5,000 United States Surgical Corp 163,750
MEDICAL-DRUGS - 1.63%
8,500 Carter Wallace Inc 139,188
700 Perrigo Company * 9,450
-------
148,638
MEDICAL-GENERIC DRUGS - 0.45%
200 Copley Pharmaceutical * 3,350
1,800 Mylan Labs Inc 37,800
-------
41,150
MEDICAL-HOSPITALS/NURSING HOME - 0.68%
800 Beverly Enterprises Inc * 8,800
1,500 Community Psychiatric Centers Inc * 12,563
</TABLE>
The accompanying notes are an integral part of these financial statements
11
<PAGE> 12
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
1,200 Horizon Healthcare * 16,800
1,800 Sun Healthcare Group * 23,850
-------
62,013
MEDICAL-OUTPATIENT/HOME CARE - 2.41%
11,300 Coram Healthcare Corp * 63,563
7,000 Novacare Inc * 49,000
10,200 Quantum Health Resorts Inc * 107,100
-------
219,663
MEDICAL/DENTAL-SUPPLIES - 0.24%
600 Bausch & Lomb Inc 22,200
METAL ORES-GOLD/NON-FERROUS - 0.12%
400 Cyprus Amax Minerals Co 11,300
MISC. - 0.0%
74 Emcor Group Inc * 19
3,300 Knowledgeware Inc Escrow * 0
200 Texas General Res * 0
-------
19
OFFICE AND ART MATERIAL - 0.15%
500 American Greetings 13,813
OIL & GAS-FIELD SERVICES - 0.42%
800 McDermott Intl Inc 15,400
1,900 U S X-Delhi Group 23,038
-------
38,438
OIL & GAS-INTERNATIONAL INTEGR - 0.30%
1,400 U S X-Marathon Group 26,950
OIL & GAS-US EXPLORE & PROD. - 0.15%
1,000 Oryx Energy Co * 13,875
OIL & GAS-US INTEGRATED - 1.38%
400 Occidental Petroleum Corp 10,700
2,900 Pennzoil Company 115,275
-------
125,975
OIL REFINING & MARKETING - 0.32%
1,000 Lubrizol Corp 29,500
PAPER & PAPER PRODUCTS - 0.07%
500 Abitibi Price Inc 6,813
</TABLE>
The accompanying notes are an integral part of these financial statements
12
<PAGE> 13
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
POLLUTION CONTROL-EQUIPMENT/SV - 1.26%
<S> <C> <C>
6,900 Safety Kleen Corp 99,188
500 WMX Technologies Inc 15,875
-------
115,063
RETAIL-APPAREL/SHOE - 2.05%
4,100 Anntaylor Stores * 73,800
3,000 Burlington Coat Factory Whse.Corp * 35,250
6,700 Charming Shoppes Inc * 34,547
1,600 Designs Inc * 11,200
3,000 Edison Bros Stores Inc * 4,500
700 Limited Inc 13,300
400 Melville Corp * 14,350
-------
186,947
RETAIL-CONSUMER ELECTRIC - 0.95%
5,000 Best Buy Co Inc (Mn) * 86,875
RETAIL-DEPARTMENT STORES - 5.12%
22,200 Caldor Corp * 86,025
40,700 K Mart Corp * 381,563
-------
467,588
RETAIL-DISCOUNT & VARIETY - 4.53%
6,500 Bradlees Inc * 13,000
3,800 Toys R Us Inc * 102,600
500 Wal-Mart Stores Inc 11,563
18,300 Woolworth Corp * 285,938
-------
413,100
RETAIL-DIVERSIFIED/MISC. - 1.49%
2,000 Hollywood Entertainment Corp * 26,500
6,200 Michaels Stores Inc * 86,800
5,200 Musicland Stores Corp * 20,150
300 Sports & Rec Inc * 2,288
-------
135,738
RETAIL-FOOD & RESTAURANT - 0.91%
3,700 Checkers Drive-In Restaurants Inc * 4,741
4,300 Fleming Companies Inc 61,275
1,900 Shoney's Inc * 17,100
-------
83,116
RETAIL-HOME FURNISHINGS - 0.89%
10,000 Bombay Co Inc * 81,250
RETAIL-MAIL ORDER & DIRECT - 0.36%
2,300 Fingerhut Cos Inc 29,613
200 Lands End Inc 3,500
-------
33,113
</TABLE>
The accompanying notes are integral part of these financial statements
13
<PAGE> 14
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C>
RETAIL-SUPERMARKETS - 0.12%
1,900 Food Lion Inc Cl A 11,044
RETAIL/WHOLESALE - OFFICE SUPPLIES - 0.26%
1,200 Office Depot * 23,550
RETAIL/WHOLESALE COMPUTERS - 0.15%
300 Tandy Corp 13,875
RETAIL/WHOLESALE-BLDG.PRODS. - 0.61%
5,400 Eagle Hardware & Garden Inc * 55,350
RETAIL/WHOLESALE-JEWELRY - 0.52%
11,300 Jan Bell Marketing Inc * 34,606
2,500 Service Merchandise Co. Inc * 13,125
-------
47,731
SHOES & RELATED APPAREL - 1.21%
3,000 Brown Group Inc 40,500
400 Reebok Intl Ltd 11,050
6,400 Stride Rite Corp 58,400
-------
109,950
STEEL-PRODUCERS - 1.88%
5,900 Bethlehem Steel Corp * 77,438
4,200 Birmingham Steel Corp 61,950
600 L T V Corp. New * 7,800
2,200 W H X Corp * 24,750
-------
171,938
TELECOMMUNICATION CELLULAR - 0.17%
1,000 Cellstar Corp * 15,250
TELECOMMUNICATION EQUIPMENT - 4.08%
5,000 Antec Corp * 77,500
3,000 California Microwave Inc * 55,500
13,100 Compression Labs Inc * 72,050
2,800 General Instruments Corp * 76,650
5,100 Scientific Atlantic Inc 90,525
-------
372,225
TELECOMMUNICATION SERVICES - 0.09%
400 U.S. Long Distance Corp * 7,950
TEXTILE/APPAREL-MILL PRODUCTS - 1.18%
3,500 Fruit Of The Loom * 90,563
200 Longview Fibre Co 3,375
700 Phillips Van Heusen Corp 8,225
</TABLE>
The accompanying notes are an integral part of these financial statements
14
<PAGE> 15
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
700 Starter Corp * 5,863
-----------
108,025
TOBACCO - 1.34%
4,031 RJR Nabisco Holdings Corp 121,938
TRANSPORTATION-AIRLINE - 0.17%
200 Delta Airlines 15,375
TRANSPORTATION-EQUIP./LEASING - 0.31%
1,500 Wabash National Corp 28,313
TRANSPORTATION-TRUCK - 0.61%
4,300 American Freightways * 55,363
TRUCKS & PARTS-LONG HAUL - 0.58%
5,100 Navistar Intl Corp * 52,913
UTILITY-ELECTRIC POWER - 4.88%
12,000 Centerior Energy Corp 96,000
9,500 Edison Intl 162,688
1,400 Entergy Corp (New) 39,200
7,300 Niagara Mohawk Power Corp * 48,363
1,000 Northeast Utility 19,750
3,000 Pacific Gas & Electric Co 67,875
400 Public Services Enterprises 11,000
-----------
444,875
UTILITY-GAS DISTRIBUTION - 0.83%
8,150 Noram Energy Corp 75,388
UTILITY-TELEPHONE - 3.18%
400 Pacific Telesis Group 11,050
8,500 Telefonos De Mexico S.A.ADR 279,438
-----------
290,488
TOTAL COMMON STOCKS (Cost $8,893,277) $ 8,846,157
SHORT TERM INVESTMENTS - 2.30%
209,494 Star Treasury Fund (Cost $209,494) $ 209,494
TOTAL INVESTMENTS - 99.25%
Total Investments (Cost $9,102,771) 9,055,651
Other assets less liabilities - 0.75% 68,700
-----------
TOTAL NET ASSETS - 100.00% $ 9,124,351
===========
* Non-Income Producing
</TABLE>
The accompanying notes are an integral part of these financial statements
15
<PAGE> 16
JHAVERI VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1996
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at value (cost $9,102,771) $9,055,651
Receivable for securities sold 119,487
Receivable for Fund shares purchased 67,349
Receivable for dividends and interest 9,943
----------
Total assets 9,252,430
----------
LIABILITIES
Payable for investment securities purchased 84,838
Payable for Fund shares redeemed 12,000
Accrued operating expenses 31,241
----------
Total Liabilities 128,079
----------
NET ASSETS
Net assets (equivalent to $12.38 per share based on 736,753
shares of capital stock outstanding) $9,124,351
==========
Composition of Net Assets:
Paid in capital $8,975,839
Accumulated net investment income/(loss) (30,766)
Accumulated net realized gain on investments 226,398
Net unrealized appreciation/(depreciation) on investments (47,120)
NET ASSETS, MARCH 31, 1996 $9,124,351
==========
</TABLE>
The accompanying notes are an integral part of these financial statements
16
<PAGE> 17
JHAVERI VALUE FUND
STATEMENT OF OPERATIONS
for the period from May 1, 1995
(Commencement of operations)
through March 31, 1996
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Interest $ 76,551
Dividends 102,750
--------
Total Investment Income 179,301
--------
EXPENSES
Operating Expenses (Note 3) 181,243
--------
Net investment income/(loss) (1,942)
--------
Net realized gain on securities transactions 493,020
Net change in unrealized appreciation/(depreciation)
on investments (47,120)
--------
Net gain on investments 445,900
--------
Net increase in net assets resulting from operations $443,958
========
</TABLE>
The accompanying notes are an integral part of these financial statements
17
<PAGE> 18
JHAVERI VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
for the period from May 1, 1995
(Commencement of Operations)
through March 31, 1996
<TABLE>
<CAPTION>
INCREASE IN NET ASSETS FROM OPERATIONS:
<S> <C>
Net investment income/(loss) $ (1,942)
Net realized gain on securities transactions 493,020
Net change in unrealized appreciation/(depreciation)
on investments (47,120)
----------
Net increase in net assets resulting from operations 443,958
----------
DISTRIBUTION TO SHAREHOLDERS:
From net investment income (28,824)
From net realized gain on investments (266,622)
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold 9,304,052
Dividends reinvested 294,450
Payment for shares redeemed (722,663)
----------
Net increase in net assets from fund share transactions 8,875,839
----------
NET ASSETS:
Beginning of period 100,000
----------
End of period $9,124,351
==========
</TABLE>
The accompanying notes are an integral part of these financial statements
18
<PAGE> 19
JHAVERI VALUE FUND
NOTES TO FINANCIAL STATEMENTS
March 31, 1996
NOTE 1. ORGANIZATION
The Jhaveri Trust (the "Trust") is registered under the Investment Company Act
of 1940, as amended, as a diversified, open-end management investment company.
The Trust was established under the laws of Ohio by an Agreement and Declaration
of Trust dated January 18, 1995 (the "Trust Agreement"). The Trust Agreement
permits the Trustees to issue an unlimited number of shares of beneficial
interest of separate series without par value. Shares of one series have been
authorized, which shares constitute the interests in the Jhaveri Value Fund (the
"Fund").
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Security Valuation - Securities which are traded on any exchange or on the
NASDAQ over-the-counter market are valued at the last quoted sale price. Lacking
a last sale price, a security is valued at its last bid price except when, in
the Adviser's opinion, the last bid price does not accurately reflect the
current value of the security. All other securities for which over-the-counter
market quotations are readily available are valued at their last bid price. When
market quotations are not readily available, when the Adviser determines the
last bid price does not accurately reflect the current value or when restricted
securities are being valued, such securities are valued as determined in good
faith by the Adviser, in conformity with guidelines adopted by and subject to
review of the Board of Trustees of the Trust.
Fixed income securities generally are valued by using market quotations, but may
be valued on the basis of prices furnished by a pricing service when the Adviser
believes such prices accurately reflect the fair market value of such
securities. A pricing service utilizes electronic data processing techniques
based on yield spreads relating to securities with similar characteristics to
determine prices for normal institutional-size trading units of debt securities
without regard to sale or bid prices. When prices are not readily available from
a pricing service, or when restricted or illiquid securities are being valued,
securities are valued at fair value as determined in good faith by the Adviser,
subject to review of the Board of Trustees. Short term investments in fixed
income securities with maturities of less than 60 days when acquired, or which
subsequently are within 60 days of maturity, are valued by using the amortized
cost method of valuation, which the Board has determined will represent fair
value.
Federal Income Taxes - The Fund intends to qualify each year as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended. By so
qualifying, the Fund will not be subject to federal income taxes to the extent
that it distributes substantially all of its net invesment income and any
realized capital gains.
Dividends and Distributions - The Fund intends to distribute substantially all
of its net investment income as dividends to its shareholders on an annual
basis. The Fund intends to distribute its net long term capital gains and its
net short term capital gains at least once a year.
Other - The Fund follows industry practice and records security transactions on
the trade date. The specific identification method is used for determining gains
or losses for financial statements and income tax purposes. Dividend income is
recorded on the ex-dividend date and interest income is recorded on an accrued
basis.
NOTE 3. INVESTMENT ADVISORY AGREEMENT
The Trust has an investment advisory agreement with Investments Technology, Inc.
Ramesh
19
<PAGE> 20
C. Jhaveri and Saumil R. Jhaveri may be deemed to be controlling persons and
affiliates of the Adviser due to their ownership of its shares and their
positions as officers and directors of the Adviser. They, because of such
affiliation, may receive benefits from the management fees paid to the Adviser.
Under the terms of the management agreement, (the "Agreement"), the Adviser
manages the Fund's investments subject to approval of the Board of Trustees and
pays all of the expenses of the Fund except brokerage, taxes, interest, expenses
incurred in connection with the organization and initial registration of its
shares and extraordinary expenses. As compensation for its management services
and agreement to pay the Fundis expenses, the Fund is obligated to pay the
Adviser a fee computed and accrued daily and paid monthly at an annual rate of
2.50% of the average daily net assets of the Fund. The rate of the advisory fees
paid by most investment companies to their investment advisers is lower than the
rate of the advisory fees paid by the Fund. In this regard, it should be noted
that most investment companies pay their own operating expenses directly, while
the Fund's expenses, except those specified above, are paid by the Adviser. For
the year ended March 31, 1996, the Adviser has received a fee of $181,243 from
the Fund.
NOTE 4. DISTRIBUTIONS TO SHAREHOLDERS
On December 26, 1995, a distribution of $0.41 aggregating $295,446 was declared
from net investment income and net realized gains from investment transactions
(including $0.37 applicable to short-term gains that are taxable to shareholders
as ordinary income dividends) during 1995. The dividend was paid December 28,
1995, to shareholders of record on December 26, 1995.
NOTE 5. CAPITAL SHARE TRANSACTIONS
As of March 31, 1996 there was an unlimited number of no par value shares of
capital stock authorized for the Fund.
Transactions in capital stock were as follows:
For the period from
May 1, 1995 (Commencement of Operations)
through March 31, 1996
<TABLE>
<CAPTION>
Shares Amount
------ ------
<S> <C> <C>
Shares sold 762,797 $ 9,304,052
Shares issued in reinvestment
of dividends 25,318 294,450
Shares redeemed (59,695) (722,663)
----------- -----------
Net increase 728,420 $ 8,875,839
=========== ===========
Total paid in capital $ 8,975,839
===========
</TABLE>
NOTE 6. INVESTMENTS
For the period from May 1, 1995 (commencement of operations) through March 31,
1996, purchases and sales of investment securities, other than short-term
investments, aggregated $11,158,838 and $2,761,543 respectively. The gross
unrealized appreciation for all securities totaled $859,651 and the gross
unrealized depreciation for all securities totaled $906,771 or a net unrealized
depreciation of $47,120. The aggregate cost of securities for federal income tax
purposes at March 31, 1996 was $9,107,527.
20
<PAGE> 21
JHAVERI VALUE FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
from May 1, 1995 (Commencement of Operations)
through March 31, 1996
<TABLE>
<S> <C>
Net asset value - beginning of period $ 12.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income .00
Net gain on investments both realized and unrealized .79
--------
Total from investment operations 12.79
LESS DISTRIBUTIONS
Dividends from net investment income .04
Dividends from capital gains .37
--------
Net asset value - end of period $ 12.38
========
Total Return** 7.45%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) 9,124
Ratio of expenses to average net assets ** 2.50%
Ratio of net investment income to average net assets** (.02)%
Portfolio turnover rate 45.23%
</TABLE>
**Annualized
21
<PAGE> 22
[McCURDY & ASSOCIATES CPA'S, INC. LOGO]
[McCURDY & ASSOCIATES CPA'S, INC. LETTERHEAD]
INDEPENDENT AUDITOR'S REPORT
-----------------------------
To The Shareholders and
Board of Trustees
Jhaveri Value Fund
We have audited the accompanying statement of assets and liabilities of Jhaveri
Value Fund, including the schedule of portfolio investments, as of March 31,
1996, and the related statement of operations, the statement of changes in net
assets, and financial highlights for the period from May 1, 1995 (commencement
of operations) to March 31, 1996 in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our 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 investments and cash held by
the custodian as of March 31, 1996, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Jhaveri Value Fund as of March 31, 1996, the results of its operations, the
changes in its net assets, and the financial highlights for the period from May
1, 1995 (commencement of operations) to March 31, 1996 in the period then
ended, in conformity with generally accepted accounting principles.
/s/ McCurdy & Associates CPA's, Inc.
- ------------------------------------
McCurdy & Associates CPA's, Inc.
Westlake, Ohio 44145
April 24, 1996
22
<PAGE> 23
JHAVERI VALUE
[JHAVERI VALUE LOGO]
FUND
(216) 356-1565
