<PAGE> 1
DEAR FELLOW SHAREHOLDERS:
Your Fund has completed two years of successful operation. The Fund declared a
$0.90 dividend in December 1996 and closed on March 31, 1997 at $12.64. This
equates to an annualized return of 9.23%. The Fund's value has risen
significantly in the past few weeks to $13.94.
<TABLE>
<CAPTION>
April 1, 1996 March 31,1997 May 28, 1997
------------- ------------- ------------
<S> <C> <C> <C>
Total Net Assets $9,059,632 $10,939,999 $12,898,016
Net Asset Value $12.38* $12.64** $13.94**
<FN>
* After payment of $0.41 dividend
** After payment of $0.90 dividend
</TABLE>
Although JVF had a successful year, the Fund lagged the S&P 500's performance.
Much of the S&P 500 gains were due to excessive rises in the large cap stocks.
JVF was precluded from investing in these stocks because at inception the
stocks had already moved out of the Optimum Buy Range. In recent weeks, the
small cap stocks are beginning to rise which is evident in the increase in
JVF's Net Asset Value. From April 30 to May 28, 1997 JVF is up 10.6% where as
the S&P 500 is up only 5.9%. As the portfolio matures and more and more stocks
move into the Optimum Sell Range, we expect to participate in upward moves in
all sectors of the market.
Currently, market valuation and volatility are reaching new highs. Under this
environment, it is paramount that the advisor keep in focus the goals of
preservation of capital and long term capital appreciation. The following table
shows the declines in major averages compared with JVF:
<TABLE>
<CAPTION>
Max % Decline From Peak
Date of Peak through May 28, 1997
------------ -----------------------
<S> <C> <C>
Dow Industrials 3/10/97 -11.8%
S&P 500 2/14/97 -10.3%
NASDAQ Composite 1/24/97 -14.6%
JVF 3/15/97 -6.2%
</TABLE>
This favorable divergence is due to our strategy of value investing and risk
management as well as our 33% cash position. When the market declined we
invested in many undervalued securities and reduced our cash position down to
22%.
The portfolio turnover rate for JVF during the first year of operation was 45%
and for the last year rose to 55%. Most of the investment positions have been
established in the last two years and it takes 1-3 years for the stocks to move
from the Optimum Buy Range to the Optimum Sell Range. This low turnover rate
indicates that the overall portfolio is still undervalued.
Thus, prudent cash management, sound risk management, value investing, and
diversification are keys to long term capital appreciation and preservation of
capital.
JVF TOP 10 HOLDINGS
<TABLE>
<CAPTION>
INDIVIDUAL COMPANIES
--------------------
<S> <C> <C>
1. K Mart Corp 4.48%
2. Chiquita Brands International 3.36%
3. Empresas ICA ADR 2.74%
4. Woolworth Corp 2.08%
5. Westinghouse Electric 1.81%
6. Telefonos de Mexicao ADR 1.68%
7. Best Buy Co. Inc 1.35%
8. Bethlehem Steel 1.30%
9. Centerior Energy 1.24%
10 Noram Energy Corp 1.08%
TOTAL 21.12%
INDUSTRIES
----------
1. Retail - Department Stores 4.48%
2. Utilities-Electric 4.18%
3. Computer Software 3.93%
4. Telecommunication Equipment 3.88%
5. Electronic Semiconductor 3.87%
6. Building/Construction 3.53%
7. Food 3.53%
8. Steel 2.83%
9. Computers - Mini/Micro 2.55%
10. Retail - Discount & Variety 2.21%
TOTAL 34.99%
</TABLE>
MARKET OUTLOOK:
In the last annual report we wrote that the market is overvalued and volatile.
Nothing has changed since then; the market has been making new highs with roller
coaster volatility. I wrote then that this market is driven by positive economic
fundamentals and may continue to move to a higher trading range predicated by:
1. Favorable interest rate environment
<PAGE> 2
2. Contained inflation
3. Rising employment without wage pressure
4. Rising dollar attracting foreign investment in US securities
5. Rising corporate earnings, competitive position of US companies, balance
sheet improvement, and share repurchase programs
6. Increasing investments in equity and index mutual funds
7. Increasing global demand for goods and services due to increasing
purchasing power
8. Free global movement of goods, labor, and capital due to privatization,
liberalization and technological revolution
9. Rising GDP and declining deficit, potential capital gains and estate tax
cut, and entitlement spending cuts
These are powerful economic factors driving this market. The market has been in
a secular uptrend and may continue higher for a long time. However, some of the
positive economic factors listed above are leveling or reversing their current
trend. The Federal Reserve has already begun to tighten monetary policy, the
strong US dollar has weakened in recent weeks, and the rate of cashflow into
equity mutual funds is leveling. The current market is overvalued with respect
to historical fundamentals such as price/earnings, price/book, price/sales, and
market capitalization/GDP. Overvaluation in these ratios, as well as, leveling
or reversing of positive economic trends warrant greater caution and prudent
investment management.
Your Fund is appropriately positioned with respect to cash and stock
diversification to take advantage of any scenario that may emerge. We will
continue to use our disciplined investment strategy of sound stock
selection/valuation and risk management; Buying stock in the Optimum Buy Range
and Selling in the Optimum Sell Range.
We are optimistic that the past uptrend in the performance of your Fund will
continue in the future.
Sincerely,
Ramesh C. Jhaveri Saumil R. Jhaveri
Chief Executive Officer President
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
- More than 200 foreign large capitalization stocks traded as ADRs on
U.S. exchanges
- More than 500 U.S. multinational compaines earning more than 40% of
revenue from export or direct investment in foreign countries
<PAGE> 3
GROWTH OF $10,000 INVESTMENT IN JVF
[GRAPHIC]
3/31/96 3/31/97
------- -------
S&P 500 $12,665 $15,099
JVF $10,680 $11,667
* Past performance is not predictive of future performance. The value of your
shares will fluctuate and will be worth more of less than their original cost at
the time of redemption.
JHAVERI VALUE FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
<TABLE>
<CAPTION>
For the period
For the year 5/1/95 *
ended through
3/31/97 3/31/96
------------ -------------
<S> <C> <C>
Net asset value - beginning of period $12.38 $12.00
Income from investment operations
Net investment income (loss) (.11) .00
Net gain on investments both
realized and unrealized 1.27 .79
--------- ---------
Total from investment operations 1.16 12.79
Less distributions
Dividends from net investment income - .04
Dividends from capital gains .90 .37
--------- ---------
Net asset value - end of period $12.64 $12.38
========= =========
Total Return 9.23% 7.45%**
Ratios/supplemental data
Net assets, end of period (in 000's) 11,014 9,124
Ratio of expenses to average net assets 2.50% 2.50%**
Ratio of net investment income (loss)
to average net assets (.87)% (.02)%**
Portfolio turnover rate 54.48% 45.23%
Average commission rate paid .0363 -
<FN>
* Commencement of Operations
**Annualized
</TABLE>
<PAGE> 4
SCHEDULE OF INVESTMENTS
JHAVERI VALUE FUND, INC.
MARCH 31, 1997
<TABLE>
<CAPTION>
COMMON STOCKS - 68.79%
Shares Company Market Value
------ ------- ------------
AUTO PARTS-RETAIL/WHOLESALE - 0.41%
<S> <C> <C>
500 Autozone Inc * $ 11,250
2,100 Discount Auto Parts * 33,600
------------
44,850
AUTO/TRUCK-REPLACE/ORIG.PARTS - 0.70%
4,700 Exide Corp 76,963
AUTOMOBILE-MANUFACTURING - 0.32%
400 Chrysler Corp 12,000
720 Ford Motor Company 22,590
------------
34,590
BANKS-REGIONAL - 0.08%
700 Apple South Inc 9,188
BROADCASTING-RADIO/TV/CABLE - 0.19%
800 Cascade Communications * 21,100
BUILDING-HEAVY CONSTRUCTION - 3.53%
19,000 Empresas ICA Sociedad S.A.ADR * 301,625
14,300 Grupo Tribasa S.A. ADR * 87,588
------------
389,213
BUILDING-RESIDENT/COMMERCIAL - 0.27%
2,200 Kaufman & Broad Home Corp 29,150
BUSINESS PRODUCTS-RETAIL/WHLES - 0.29%
500 Black & Decker Corp 16,063
1,400 BMC West Corp * 16,100
------------
32,163
CHEMICALS-DIVERSIFIED - 0.12%
1,000 Rexene Corp 13,375
COMMERCIAL SERVICES-MISC - 1.26%
6,400 First Alert Inc * 18,400
1,700 Franklin Quest Co * 35,913
800 Physicians Res. Corp * 10,600
2,700 Sensormatic Electronics Corp 45,563
1,500 Value Health Inc * 27,750
------------
138,226
</TABLE>
The accompanying notes are an integral part of these financial statements
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
COMPUTER-GRAPHICS - 1.50%
<S> <C> <C>
5,000 Diamond Multimedia Systems * 45,625
12,700 Scitex Ltd. Ord 107,950
600 Silicon Graphics Inc * 11,700
------------
165,275
COMPUTER-INTEGRATED SYSTEMS - 0.34%
6,500 System Software 37,781
COMPUTER-LOCAL NETWORK - 1.98%
1,300 3 Com Corp * 42,575
2,500 Bay Networks, Inc * 44,688
300 Cisco Systems * 14,438
2,200 Fore Systems Inc * 33,000
2,300 Netcom On-Line * 22,138
7,000 Shiva Corp * 61,688
------------
218,527
COMPUTER-MAINFRAMES - 1.07%
1,000 Amdahl Corporation * 9,375
1,500 Sequent Computer Systems * 22,500
13,400 Unisys Corp * 85,425
------------
117,300
COMPUTER-MINI/MICRO - 2.55%
3,800 Apple Computer * 69,350
17,300 AST Research Inc * 82,175
3,600 Digital Equipment Corp * 98,550
2,600 Tandem Computers * 30,875
------------
280,950
COMPUTER-PERIPHERAL EQUIPMENT - 1.12%
11,400 Alliance Semiconductor Corp * 92,625
5,400 Proxima Corp * 30,375
------------
123,000
COMPUTER-SERVICES - 0.39%
12,700 Intelligent Electronics Inc * 42,863
COMPUTER-SOFTWARE - 3.93%
500 Access Health Inc * 7,188
13,200 Acclaim Entertainment * 62,700
300 Adobe Systems Inc 12,038
16,900 Banyan Systems Inc * 34,856
1,000 Filenet * 16,125
4,700 FTP Software Inc * 27,319
1,000 Informix Corporation * 15,125
5,500 Learning Inc * 36,438
5,500 Macromedia Inc * 49,844
900 Microcom Inc * 7,988
9,300 Netmanage Inc * 26,447
4,000 Novell Inc * 38,000
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 5
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
1,700 Sybase Inc * 23,800
900 Symantec Corp * 12,825
3,900 Wall Data Inc * 62,400
------------
433,093
DIVERSIFIED OPERATION - 0.29%
0 Hanson Plc ADR 6
1,400 Jostens Incorporated 31,675
------------
31,681
ELECTRONIC PRODUCTS/MISC. - 0.16%
200 Hitachi Ltd 17,575
ELECTRONIC-EQUIPMENT - 0.22%
1,700 Input/Output * 24,650
ELECTRONIC-SEMICONDUCTORS - 3.87%
1,700 Chips & Technology * 17,638
3,000 Cirrus Logic Inc * 36,375
1,700 Cypress Semiconductor * 21,250
1,200 DSP Communications * 11,550
2,700 Integrated Device Technology * 27,000
6,700 Integrated Silicon Solution * 57,369
3,000 International Rectifier * 35,625
600 LSI Logic Corp * 20,850
1,100 Micron Technology Inc 44,550
2,000 Network Peripherals Inc * 18,250
7,000 Opti Inc * 40,250
500 Sierra Semiconductor * 8,063
6,200 Tseng Labs Inc * 18,600
1,200 VLSI Technology Inc * 20,775
2,100 Watkins Johnson 48,038
------------
426,183
ENERGY-ALTERNATE SOURCES - 0.24%
821 The Energy Group * 26,383
FINANCE-CONSUMER LOANS - 0.16%
1,900 Olympic Financial Ltd * 17,575
FINANCIAL SERVICES MISC. - 0.56%
900 Advanta Corp 24,188
3,700 Medaphis Corp * 37,925
------------
62,113
FOOD-MISC. PREPARATION - 3.53%
1,057 Archer Daniels Midland 18,894
23,700 Chiquita Brands Intl.Inc 370,313
------------
389,207
</TABLE>
The accompanying notes are an integral part of these financial statements
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
HOTELS & MOTELS - 0.27%
<S> <C> <C>
500 ITT Corp * 29,438
HOUSEHOLD-APPLIANCES - 0.10%
600 Singer Company 10,950
HOUSEWARES - 0.79%
6,800 Shaw Industries Inc 86,700
INSURANCE-LIFE/PROPERTY/CAS. - 0.46%
3,000 John Alden Finl Corp 50,250
LASERS-SYSTEMS/COMPONENTS - 0.32%
5,500 Summit Technology, Inc * 35,750
LEISURE PRODUCTS - 0.87%
4,700 Avid Technology Inc * 61,981
3,800 Oakley Inc * 34,200
------------
96,181
LEISURE SERVICES - 0.29%
1,000 Aztar Corp * 7,125
600 Harrah Entertainment * 10,275
900 Intl Game Technology 4,513
------------
31,913
MACHINERY-ELECTRICAL EQUIPMENT - 1.81%
11,250 Westinghouse Electric Corp 199,688
MEDICAL INSTRUMENTS/PRODUCTS - 0.11%
400 United States Surgical Corp 12,200
MEDICAL-DRUGS - 0.81%
6,000 Carter Wallace Inc 81,750
700 Perrigo Company * 7,613
------------
89,363
MEDICAL-GENERIC DRUGS - 0.92%
2,900 Copley Pharmaceutical * 18,850
4,200 Ivax Corp 41,475
2,800 Mylan Labs Inc 40,950
------------
101,275
MEDICAL-HEALTH MAINT.ORG. - 1.25%
2,000 Healthsource Inc * 41,000
1,000 Humana Inc * 22,000
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 6
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
4,614 Olsten Corporation 74,401
------------
137,401
MEDICAL-HOSPITALS/NURSING HOME - 0.49%
1,000 Horizon Healthcare * 15,500
1,800 Sun Healthcare Group * 25,875
1,500 Transitional Hospitals Corp * 12,938
------------
54,313
MEDICAL-OUTPATIENT/HOME CARE - 0.55%
10,200 Coram Healthcare Corp * 40,800
1,600 Novacare Inc * 19,400
------------
60,200
METAL ORES-GOLD/NON-FERROUS - 0.23%
400 Cyprus Amax Minerals Co 9,500
1,000 Pegasus Gold Inc * 8,125
400 Placer Dome Inc 7,250
------------
24,875
MISC. - 0.27%
1,000 American Oncology Res * 8,750
2,500 Mentor Graphics * 20,938
200 Texas General Resources * 0
------------
29,688
OIL & GAS-FIELD SERVICES - 0.35%
1,800 McDermott Intl Inc 38,475
OIL & GAS-US INTEGRATED - 0.09%
400 Occidental Petroleum Corp 9,850
OIL REFINING & MARKETING - 0.08%
600 Quaker State Corp 9,225
PAPER & PAPER PRODUCTS - 0.07%
500 Abitibi Price Inc 7,250
POLLUTION CONTROL-EQUIPMENT/SV - 0.66%
4,900 Safety Kleen Corp 72,275
PUBLISHING-BOOKS/NEWS/PERIODIC - 0.21%
800 Scholastic Corp 22,600
RETAIL-APPAREL/SHOE - 0.46%
800 Ann Taylor Stores * 16,300
1,600 Designs Inc * 9,000
</TABLE>
The accompanying notes are an integral part of these financial statements
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
1,400 Limited Inc 25,725
------------
51,025
RETAIL-CONSUMER ELECTRIC - 1.35%
14,500 Best Buy Co. Inc * 148,625
RETAIL-DEPARTMENT STORES - 4.48%
40,700 K Mart Corporation * 493,488
RETAIL-DISCOUNT & VARIETY - 2.21%
500 Wal-Mart Stores Inc 13,938
9,800 Woolworth Corp 229,075
------------
243,013
RETAIL-DIVERSIFIED/MISC. - 1.11%
5,300 Michaels Stores Inc * 97,388
500 Sports Authority Inc * 9,313
2,300 Sunglass Hut * 16,100
------------
122,801
RETAIL-FOOD & RESTAURANT - 1.10%
6,400 Fleming Companies Inc 112,000
1,900 Shoney's Inc * 9,263
------------
121,263
RETAIL-HOME FURNISHINGS - 0.43%
11,600 Bombay Co. Inc * 47,850
RETAIL-MAIL ORDER & DIRECT - 0.55%
2,300 Fingerhut Cos Inc 32,200
2,200 Micro Warehouse Inc * 28,875
------------
61,075
RETAIL/WHOLESALE - OFFICE SUPPLIES - 0.21%
1,000 Corporate Express * 10,250
1,000 Officemax Inc * 13,000
------------
23,250
RETAIL/WHOLESALE COMPUTERS - 0.24%
1,700 Compusa Inc * 26,775
RETAIL/WHOLESALE-JEWELRY - 0.08%
2,500 Service Merchandise Co. Inc * 8,438
RUBBER-TIRES - 0.20%
1,200 Cooper Tire & Rubber 22,200
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 7
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
SHOES & RELATED APPAREL - 0.37%
<S> <C> <C>
1,300 Brown Group Inc 21,613
1,300 Stride Rite Corp 19,500
------------
41,113
STEEL-PRODUCERS - 2.83%
17,300 Bethlehem Steel Corp 142,725
3,200 Birmingham Steel Corp 56,000
2,900 LTV Corp. New 36,613
1,200 USX-Us Steel 31,950
6,500 WHX Corp 43,875
------------
311,163
TELECOMMUNICATION EQUIPMENT - 3.88%
1,200 Adtran Inc * 30,000
8,900 Antec Corp * 70,088
2,000 California Microwave Inc * 28,750
19,900 Compression Labs Inc * 39,800
3,000 General Instruments Corp * 68,625
5,800 Glenayre Tech * 57,275
1,600 Picturetel Corp * 19,000
1,800 Premisys Communications * 14,625
6,500 Scientific Atlantic Inc 99,125
------------
427,288
TELECOMMUNICATION SERVICES - 0.49%
300 AT&T Corp 10,425
500 Frontier Corp 8,938
500 Hongkong Telecom 8,188
1,600 LCI Intl * 26,779
------------
54,330
TEXTILE/APPAREL-MILL PRODUCTS - 0.08%
1,700 Starter Corp 8,288
TRANSPORTATION-EQUIP./LEASING - 0.47%
3,000 Wabash National Corp 52,125
TRANSPORTATION-TRUCK - 0.71%
5,600 American Freightways * 78,050
TRUCKS & PARTS-LONG HAUL - 0.52%
6,100 Navistar Intl Corp * 57,188
UTILITY-ELECTRIC POWER - 4.18%
13,500 Centerior Energy Corp 136,688
500 Consolidated Edison Co. N.Y. Inc 15,000
3,000 Edison Intl 67,500
1,600 Entergy Corp. New 39,200
400 Florida Prog. Corp 12,150
</TABLE>
The accompanying notes are an integral part of these financial statements
<TABLE>
<CAPTION>
Shares Company Market Value
------ ------- ------------
<S> <C> <C>
4,000 Niagara Mohawk Power Corp * 34,000
8,000 Northeast Utility * 63,000
3,500 Pacific Gas & Electric Co 82,250
400 Public Services Enterprises 10,500
------------
460,288
UTILITY-GAS DISTRIBUTION - 1.08%
8,150 Noram Energy Corp 119,194
UTILITY-TELEPHONE - 1.68%
4,800 Telefonos De Mexico S.A.ADR 184,800
Total Common Stocks (Cost $7,721.647) $ 7,576,464
===========
SHORT TERM INVESTMENTS - 31.03%
3,417,297 Star Treasury Fund 3,417,297
Total Short Term Investments (Cost $3,417,297) $ 3,417,297
===========
TOTAL INVESTMENTS - 99.81%
Total Investments (Cost $11,138,944) $ 10,993,761
Other assets less liabilities - 0.19% 20,609
------------
TOTAL NET ASSETS 100.00% $ 11,014,370
===========
<FN>
* Non-Income Producing
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 8
JHAVERI VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1997
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at value (cost $11,138,944) $ 10,993,761
Receivable for securities sold 166,402
Receivable for dividends and interest 17,125
------------
Total assets 11,177,288
------------
LIABILITIES
Payable for investment securities purchased 137,145
Payable for Fund shares redeemed 625
Accrued operating expenses & other 25,148
------------
Total Liabilities 162,918
------------
NET ASSETS
Net assets (equivalent to $12.64 per share based on 871,129
shares of capital stock outstanding) $ 11,014,370
============
Composition of Net Assets:
Paid in capital $ 10,668,515
Accumulated net realized gain on investments 491,038
Net unrealized appreciation/(depreciation) on investments (145,183)
------------
NET ASSETS, MARCH 31, 1997 $ 11,014,370
============
</TABLE>
The accompanying notes are an integral part of these financial statements
JHAVERI VALUE FUND
STATEMENT OF OPERATIONS
For the year ended
March 31, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Interest $ 68,107
Dividends 101,813
-----------
Total Investment Income 169,920
-----------
EXPENSES
Operating Expenses (Note 3) 261,501
-----------
Net investment income/(loss) (91,581)
-----------
Net realized gain on securities transactions 1,118,701
Net change in unrealized appreciation/(depreciation)
on investments (98,063)
-----------
Net gain on investments 1,020,638
-----------
Net increase in net assets resulting from operations $ 929,057
===========
</TABLE>
The accompanying notes are an integral part of these financial statements
<PAGE> 9
JHAVERI VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the period
For the year 5/1/95 *
ended through
3/31/97 3/31/96
------------ --------------
INCREASE IN NET ASSETS FROM OPERATIONS:
<S> <C> <C>
Net investment income/(loss) $ (91,581) $ (1,942)
Net realized gain on securities transactions 1,118,701 493,020
Net change in unrealized
appreciation/(depreciation) of investments (98,063) (47,120)
------------ ------------
Net increase in net assets resulting from operations 929,057 443,958
------------ ------------
DISTRIBUTION TO SHAREHOLDERS:
From net investment income 0 (28,824)
From net realized gain on investments (731,713) (266,622)
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold 1,883,314 9,304,052
Dividends reinvested 730,776 294,450
Payment for shares redeemed (921,415) (722,663)
------------ ------------
Net increase in net assets from fund
share transactions 1,692,675 8,875,839
------------ ------------
NET ASSETS:
Beginning of period 9,124,351 100,000
------------ ------------
End of period $ 11,014,370 $ 9,124,351
============ ============
<FN>
* Commencement of Operations
</TABLE>
The accompanying notes are an integral part of these financial statements
JHAVERI VALUE FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
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 iregulated
investment companyi 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 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 managment 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 Fund's 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. In this regard, it should be
noted that most investment companies pay
<PAGE> 10
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, 1997, the
adviser has received a fee of $261,501 from the Fund.
NOTE 4. DISTRIBUTIONS TO SHAREHOLDERS
On December 13, 1996, a distribution of $0.90 aggregating $731,713 was declared
from net realized gains from investment transactions (including $0.71 applicable
to short-term gains that are taxable to shareholders as ordinary income
dividends) during 1996. The dividend was paid December 14, 1996, to shareholders
of record on December 12, 1996.
NOTE 5. CAPITAL SHARE TRANSACTIONS
As of March 31, 1997 there was an unlimited number of no par value shares of
capital stock authorized for the Fund. Transactions in capital stock were as
follows:
<TABLE>
<CAPTION>
For the period May 1,
1995 (Commencement
For the year ended of Operations) through
March 31, 1997 March 31, 1996
---------------------- -----------------------
Shares Amount Shares Amount
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Shares sold 148,339 $1,883,314 762,797 $9,304,052
Shares issued in
reinvestment of dividends 56,737 730,776 25,318 294,450
Shares redeemed (70,700) (921,415) (59,695) (722,663)
------- -------- ------- ---------
Net increase 134,376 $1,692,675 728,420 $8,875,839
======= ========= ======= =========
Total paid in capital $10,668,515 $8,975,839
========== =========
</TABLE>
NOTE 6. INVESTMENTS
For the year ended March 31, 1997 purchases and sales of investment securities,
other than short-term investments, aggregated $4,884,322 and $7,174,652
respectively. The gross unrealized appreciation for all securities totaled
$862,132 and the gross unrealized depreciation for all securities totaled
$1,007,315 or a net unrealized depreciation of $145,183. The aggregate cost of
securities for federal income tax purposes at March 31, 1997 was $11,228,242.
NOTE 7. RECLASSIFICATION OF CAPITAL ACCOUNTS
The Fund has adopted Statement of Position 93-2, Determination, Disclosure and
Financial Statement Presentation of Income, Capital Gain and Return of Capital
Distributions by Investment Companies. As a result of this statement, the Fund
changed the classification of distributions to shareholders to better disclose
the difference between financial statement amounts and distributions determined
in accordance with income tax regulations. Accordingly, undistributed net
investment loss and undistributed capital gains have been adjusted as of May 31,
1997 in the following amounts. These restatements did not affect net investment
income, net realized gain (loss) or net assets for the year ended March 31,
1997.
Undistributed Net Investment Loss Realized Capital Gains
--------------------------------- ----------------------
122,348 (122,348)
[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,
1997, and the related statement of operations for the year then ended, and the
statement of changes in net assets, and financial highlights for the year then
ended and 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, 1997, 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, 1997, the results of its operations for the
year then ended, and the changes in its net assets, and the financial highlights
for the year then ended and 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 22, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> JHAVERI VALUE FUND
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> MAR-31-1997
<INVESTMENTS-AT-COST> 11,138,944
<INVESTMENTS-AT-VALUE> 10,993,761
<RECEIVABLES> 183,527
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 11,177,288
<PAYABLE-FOR-SECURITIES> 137,145
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 25,773
<TOTAL-LIABILITIES> 162,918
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,668,515
<SHARES-COMMON-STOCK> 871,129
<SHARES-COMMON-PRIOR> 736,753
<ACCUMULATED-NII-CURRENT> (122,348)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 491,038
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (145,183)
<NET-ASSETS> 11,014,370
<DIVIDEND-INCOME> 101,813
<INTEREST-INCOME> 68,107
<OTHER-INCOME> 0
<EXPENSES-NET> 261,501
<NET-INVESTMENT-INCOME> (91,581)
<REALIZED-GAINS-CURRENT> 1,118,701
<APPREC-INCREASE-CURRENT> (98,063)
<NET-CHANGE-FROM-OPS> 929,057
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 731,713
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 148,339
<NUMBER-OF-SHARES-REDEEMED> 70,700
<SHARES-REINVESTED> 56,737
<NET-CHANGE-IN-ASSETS> 1,890,019
<ACCUMULATED-NII-PRIOR> (30,766)
<ACCUMULATED-GAINS-PRIOR> 226,398
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 261,501
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 261,501
<AVERAGE-NET-ASSETS> 10,460,040
<PER-SHARE-NAV-BEGIN> 12.38
<PER-SHARE-NII> (.11)
<PER-SHARE-GAIN-APPREC> 1.27
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0.90
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 12.64
<EXPENSE-RATIO> 2.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
