May 21, 1999
Dear Fellow Shareholders:
The performance of the Jhaveri Value Fund in the fiscal year ended March 31,
1999 was a disappointment both as a shareholder and a manager. However, the
good news is that we are back on track of our first three year performance of
19%. Since JVF's fiscal year end on March 31, 1999 the net asset value has
risen from $11.36 to $13.51 as of May 21, 1999. Year to date JVF is up over
22%. During the same time period the S&P 500 is up only 8% and S&P/Barra Value
Index, (The 250 stocks within the S&P 500 with the lowest price/earnings ratio)
which is more value oriented, is up only
11.7%.
Past performance is not predictive of future performance. The
value of shares will fluctuate and will be worth more or less than
their original cost at the time of redemption.
GRAPH
The current market is being led higher by the cyclical and value stocks. This is
the first time in two years the technology stocks and high P/E stocks are
lagging. During the fiscal year ended March 31, 1999, most value oriented
mutual funds were down significantly and some large well known funds were down
as much as 35%. JVF was down 17.7%. This divergence from the S&P 500 was due
to momentum stocks like America Online and Microsoft which drove the market to
new highs; however the majority of stocks lagged behind. Those two stocks
represented 1/3 of the S&P 500's gains in 1998, and 15 stocks were responsible
for 1/2 of the S&P 500's rise. Unfortunately, our strategy of value investing
precluded us from investing in these momentum stocks because they were trading
at extremely high valuations with high downside risk.
<PAGE>
JVF Top Holdings - 3/31/99
Individual Compaines
1. K Mart Corp 5.67%
2. Chiquita Brands Intl 2.34%
3. Hitachi Ltd 2.26%
4. Schlumberger Ltd 1.71%
5. Sctiex Corp Ltd 1.56%
6. Inco Ltd 1.45%
7. Hewlett Packard Co 1.22%
8. Atlantic Richfield Co 1.20%
9. Baker Hughes Inc 1.17%
10. Fila Holdings 1.16%
Total 19.74%
Industries
1.Metal Ores - Gold/Non Ferrous 6.29%
2.Retail - Department Stores 5.67%
3.Electronic Semiconductor 4.76%
4.Oil & Gas - Field Services 4.27%
5.Food 3.95%
6.Computer - Peripheral Equip 3.71%
7.Electronic Products Misc 2.84%
8.Telecommunication Services 2.71%
9.Oil & Gas - Intl Integrated 2.64%
10.Oil & Gas - US Integrated 2.49%
Total 39.33%
Market Outlook:
During the last three years, the market has been driven by liquidity and strong
economic fundamentals. The liquidity is coming from huge flows of funds from
IRAs, pension plans, savings accounts, and foreign investors. The strong
economic fundamentals consist of low inflation, low interest rates, rising
corporate earnings, a strong dollar, rising productivity, full employment, high
consumer confidence, and a strong GDP growth rate. Many of these strong
economic fundamentals are moderating, and the Federal Reserve announced a bias
toward higher interest rates. Cash flows into the market are continuing, albeit
at a slower pace. These factors will keep the market in a trading range between
9,500 and 11,500 until some outside factor changes the current environment.
As I stated in my last letter we have made some enhancements and refinements to
our investment model and strategy. These changes, within the framework of our
model, have allowed us to take advantage of the volatility and momentum trading
in the market. We are confident that with these strategic operational changes to
our stock investment model, we will continue our recent turnaround in
performance.
Sincerely,
Ramesh C. Jhaveri Saumil R. Jhaveri
Chief Executive Officer President
<PAGE>
Schedule of Investments
Jhaveri Value Fund
March 31, 1999
Units Description Value
COMMON STOCK - 97.38%
Aerospace/Aircraft/Defense - 0.86%
500 B.F. Goodrich Co. 17,156
2,600 Boeing Co. 88,400
105,556
Auto Parts-Retail/Wholesale - 0.71%
5,700 Pep Boys-Manny, Moe & Jack 86,925
Auto/Truck Replace/Orig Parts - 1.09%
2,000 Cummins Engine Co. 71,125
3,300 Exide Corp 36,713
500 Goodyear Tire & Rubber 24,906
132,744
Automobile-Manufacturing - 0.11%
500 Volvo Aktiebolaget 12,906
Banks-Money Center - 1.06%
7,000 Bank Tokyo - Mitsubishi 98,000
500 Citigroup 31,938
129,938
Beverages-Alcoholic/Soft Drink - 0.33%
400 Coca Cola Co. 24,550
400 Pepsico Inc. 15,675
40,225
Broadcasting-Radio/Tv/Cable - 1.03%
15,400 Cabletron Systems Inc. * 126,087
Building Products-Retail/Whole - 0.12%
1,400 Building Materials * 14,175
Building-Construction/Prod/Mis - 0.31%
1,500 Stanley Works 38,438
Building-Heavy Construction - 1.56%
15,500 Empresas Ica Socie-Dad Sa ADR 81,375
3,100 Fluor Corp. 83,700
16,600 Grupo Tribasa Sa ADR * 25,937
191,012
Chemicals-Diversified - 1.24%
800 Dupont E.I. Denemours & Co. 46,600
9,800 Shanghai Petrochem 105,350
151,950
Commercial Services - 1.52%
7,600 Computer Learning Ctrs * 40,375
4,200 Diebold Inc 100,800
1,125 Prison Realty Trust 19,617
2,700 Sensormatic Electronics Corp. * 25,650
186,442
Computer Graphics - 2.46%
4,300 Diamond Multimedia Systems * 26,337
19,000 Scitex Corp. Ltd. Ord Israel * 191,187
4,100 Silicon Graphics Inc. * 67,906
2,000 STB Systems Inc * 15,625
301,055
<PAGE>
Units Description Value
Computer Integrated Systems - 0.99%
4,000 Oracle Corp. * 105,500
7,000 System Software Assoc. Inc. * 15,750
121,250
Computer Services - 0.67%
7,500 Computer Horizons * 82,031
Computer Software - 2.42%
1,400 Computer Associates Int'L. Inc 49,787
1,800 Informix Corp. * 13,275
1,800 JD Edwards & Co * 21,488
1,000 Novell Inc. * 25,187
4,000 Parametric Technology * 79,000
1,400 PeopleSoft Inc * 20,475
800 PLATINUM technology Inc. * 20,400
2,500 SAP Aktiengesellschaft * 65,781
295,393
Computer-Local Network - 1.01%
3,700 3Com Corp. * 86,256
2,000 FORE Systems * 37,812
124,068
Computer-Mini/Micro - 1.96%
2,200 Compaq Computer Corp. 69,850
500 Dell Computer Corp. * 20,438
2,200 Hewlett-Packard Co. 149,187
239,475
Computer-Peripheral Eqpmt - 3.98%
2,700 Adaptec Inc. * 61,594
1,200 American Power Conv Corp.* 32,400
2,400 C-Cube Microsys * 47,550
5,700 Imation Corp * 94,050
8,500 Iomega Corp * 43,562
11,000 Read-Rite Corp. * 72,531
1,000 Seagate Technology Inc. * 29,563
2,000 Security Dynamics * 37,250
3,200 SMART Modular Tech * 47,800
700 Storage Technology * 19,512
485,812
Consumer Products-Glass/Metal - 0.23%
4,543 Samsonite Corp * 27,826
Container-Metal/Glass - 0.33%
1,400 Crown Cork & Seal Co 39,987
Cosmetics & Personal Care - 0.48%
500 Gillette Co. 29,719
1,500 Rexall Sundown * 28,781
58,500
Diversified Operation - 2.35%
7,000 Ikon Office Solutions 89,688
1,300 Minnesota Mining & Manuf. Co. 91,975
1,000 Monsanto Co. 45,938
7,500 Sybase Inc. * 59,531
287,132
<PAGE>
Units Description Value
Electronic Equipment - 0.52%
700 Emerson Electric Co. 37,056
2,000 Thermo Electron Corp. * 27,125
64,181
Electronic Parts-Distributor - 0.48%
400 Avnet 14,650
4,200 HEALTHSOUTH Corp. * 43,575
58,225
Electronic Products/Misc - 2.84%
3,800 Hitachi LTD 276,450
11,200 Input/Output * 70,700
347,150
Electronic-Semiconductors - 4.76%
6,700 Advanced Micro Devices Inc. * 105,106
7,700 Atmel Corp. * 116,944
4,500 Cirrus Logic Inc. * 28,688
11,000 Cypress Semiconductor * 99,000
300 Intel Corp. 35,738
5,100 International Recti-Fier * 35,700
1,500 Motorola Inc. 109,875
5,500 National Semiconductor Corp. * 51,219
582,270
Fertilizers - 0.93%
2,100 IMC Global Inc 42,919
6,000 Phosphate Resources Parners LP 70,500
113,419
Finance-Consumer Loans - 0.18%
4,700 Arcadia Financial LTD * 22,325
Finance-Investment Brokers - 0.16%
1,000 Raymond James Financial Inc. 19,750
Finance-Investment Management - 0.14%
600 Franklin Resources Inc. 16,875
Finance-Mortgage & Rel Svcs - 0.09%
1,000 Assoc Estates Realty 10,437
Financial Services Misc - 0.34%
2,500 Advanta Corp Cl A 27,656
5,500 Medaphis Corp. * 13,406
41,062
Food-Misc Preparation - 3.94%
2,418 Archer Daniels-Midland Co. 35,514
900 Campbell Soup Co. 36,619
28,100 Chiquita Brands Intl Inc. 286,269
1,800 ConAgra Inc 46,125
500 H.J. Heinz Co. 23,688
1,600 Kellogg Co. 54,100
482,315
<PAGE>
Units Description Value
Funeral Services & Related - 0.33%
5,000 Loewen Group 9,063
2,200 Service Corp. Int'L. 31,350
40,413
Hotels & Motels - 0.31%
2,700 Hilton Hotels Corp. 37,969
Household Appliances - 1.51%
16,100 Singer Co. * 61,381
800 Sony Corp ADR 73,050
9,000 Sunbeam Co 50,063
184,494
Housewares - 0.62%
500 Newell Rubbermaid 23,750
2,900 Tupperware Corp 52,200
75,950
Insurance-Life/Property/Casual - 1.41%
400 Aetna Life & Casualty Co. 33,200
4,499 Conseco Inc. 138,904
172,104
Lasers-Systimes/Componenets - 0.03%
200 Cymer, Inc * 3,975
Leisure Products - 1.49%
2,300 Brunswick Corp. 43,844
3,700 Callaway Golf 37,694
2,400 Mattel Inc. 59,850
5,800 Oakley Inc * 40,237
181,625
Leisure Services - 0.59%
500 Disney (Walt) Co. 15,594
1,700 Mirage Resorts, Inc. * 36,125
2,700 Park Place Entertainment* 20,419
72,138
Machinery-Constrct/Mining/Farm - 1.24%
1,800 Case Corp 45,675
2,300 Caterpillar Inc. 105,656
151,331
Machinery-General & Industrial - 0.16%
2,500 Presstek Inc * 19,687
Medical-Biomed/Genetics - 0.09%
500 Chiron Corp. * 10,969
Medical-Drugs - 1.41%
3,000 Carter Wallace Inc. 54,000
3,200 Dura Pharmaceutical * 45,200
500 McKesson Corp. 33,000
600 Warner Lambert Co. 39,750
171,950
Medical-Generic Drugs - 1.22%
8,000 IVAX Corporation * 94,500
2,000 Mylan Laboratories Inc. 54,875
149,375
<PAGE>
Units Description Value
Medical-Health Maint Org - 1.89%
4,200 Columbia/Hca Healthcare Corp. 79,538
8,462 Olsten Corp. 52,359
3,000 Oxford Health Plans * 46,875
1,000 United Healthcare Corp. 52,625
231,397
Medical-Hospitals/Nursing Home - 0.10%
1,000 Health Management Assoc Inc * 12,187
Medical-Outpatient/Home Care - 0.54%
12,554 Coram Healthcare * 24,323
333 Medical Resources Inc * 708
8,600 PhyCor Inc * 40,850
65,881
Metal Ores-Gold/Non Ferrous - 5.75%
2,400 Alcan Aluminium Ltd 61,950
4,000 ASA Limited 66,500
2,800 ASARCO Inc 38,675
9,500 Cyprus Amax Minerals Co. 115,188
5,600 Homestake Mining Co. 48,300
13,300 Inco LTD 177,056
5,000 Newmont Mining Corp. 88,125
400 Phelps Dodge 19,775
1,800 Reynolds Metals Co. 86,963
702,532
Office Equipment & Supplies - 0.32%
28 Momentum Business App* 250
7,700 Danka Business Systems 38,500
38,750
Oil & Gas-Drilling - 1.16%
4,500 ENSCO Intl 59,906
4,400 Santa Fe Intl 82,225
142,131
Oil & Gas-Field Services - 4.27%
5,900 Baker Hughes Inc 143,444
3,000 Halliburton Co. 115,500
3,500 Schlumberger Ltd. 208,687
2,100 Tidewater 54,337
521,968
Oil & Gas-International Integ - 1.79%
600 Chevron Corp. 53,063
800 Mobil Corp. 70,400
1,300 Texaco Inc. 73,775
700 YPF Sociedad 22,094
219,332
Oil & Gas-Us Explore & Prod - 0.29%
437 McMoran Exploration Co* 7,074
2,300 Rowan Companies * 29,181
36,255
Oil & Gas-Us Integrated - 2.49%
2,000 Atlantic Richfield Co. 146,250
2,200 Occidental Petroleum 39,600
9,500 PennzEnergy 99,750
500 Unocal Corp. 18,438
304,038
<PAGE>
Units Description Value
Oil Refining & Marketing - 0.85%
8,414 Pennzoil Quaker State 104,123
Paper & Paper Products - 0.59%
900 International Paper 37,969
3,000 Longview Fibre Co 34,687
72,656
Photo Equipment & Supplies - 0.37%
700 Eastman Kodak Co. 44,713
Pollution Control-Eqpmt/Svcs - 0.72%
5,600 Republic Industries 69,300
600 United States Filter * 18,375
87,675
Retail-Apparel/Shoe - 0.33%
4,500 Gymboree Corp * 40,219
Retail-Department Stores - 5.83%
41,200 K Mart Corporation * 692,675
500 Penney, J.C. Co. Inc. 20,250
712,925
Retail-Discount & Variety - 1.70%
5,200 Toys-R-Us Inc. * 97,825
15,500 Venator Group, Inc. * 109,469
207,294
Retail-Diversified/Misc - 1.27%
4,200 Borders Group* 59,063
4,700 Petsmart Inc * 37,747
8,000 Sports Authority Inc * 58,500
155,310
Retail-Food & Restaurant - 0.83%
11,900 Fleming Companies Inc 101,894
Retail-Mail Order & Direct - 0.72%
5,500 Cendant Corp * 87,656
Retail/Wholesale Computers - 1.19%
5,800 CompUSA Inc * 40,600
7,300 CHS Electronics* 23,269
2,600 Ingram Micro Inc A* 59,313
1,000 Tech Data Corp. * 22,937
146,119
Retail/Wholesale-Office Suppli - 0.56%
9,000 Corp Express * 46,687
2,500 Office Max * 21,563
68,250
<PAGE>
Units Description Value
Rubber-Tires - 0.33%
2,200 Cooper Tire & Rubber Co. 40,425
Shoes & Related Apparel - 1.85%
17,200 Fila Holdings 141,900
500 Nike Inc. Cl B 28,844
3,500 Reebok Int'L LTD. * 55,562
226,306
Steel-Producers - 2.36%
13,800 Bethlehem Steel Corp. * 113,850
10,100 Birmingham Steel 39,769
1,000 Nucor Corp. 44,063
1,000 USX - U.S. Steel Group New 47,000
5,500 WHX Corp. * 43,313
287,995
Telecommunication Equipment - 1.38%
2,200 Alcatel 50,187
4,500 Andrew Corp. * 55,406
9,000 PictureTel Corp * 63,000
168,593
Telecommunications Services - 2.71%
500 Bell Atlantic Corp. 25,844
4,640 Hongkong Telecom 90,770
1,800 MasTec Inc * 40,950
14,500 PT Telkominkasi 92,437
4,500 Compania Anonima Tele D 81,844
331,845
<PAGE>
Units Description Value
1,500 Fruit Of The Loom Inc. Cl A * 15,844
1,600 Polo Ralph Lauren * 31,800
47,644
Transportation-Airline - 0.19%
400 AMR Corp * 23,425
Transportation-Rail - 0.52%
1,200 Union Pacific Corp. 64,125
Transportation-Truck - 0.31%
2,900 American Freightways * 37,337
Utility-Electric Power - 0.36%
1,300 Edison Intl 44,500
Utility-Telephone - 0.42%
1,700 Telefonica De Argent 51,425
Metal Ores-Gold/Non Ferrous - 0.55%
800 Barrick Gold Corp 13,650
4,700 Placer Dome Inc. 53,169
66,819
Oil & Gas-International Integ - 0.84%
300 BP Amoco PLC ADR 30,300
1,400 Royal Dutch 72,800
103,100
Total Common Stocks
(Cost $12,727,209) $11,905,759
SHORT TERM INVESTMENTS - 2.51%
307,490 Star Treasury Fund 307,490
Total Short Term Investments
(Cost $307,490) 307,490
Other assets less liabilities - 0.11% 13,774
Total Net Assets - 100.00% $12,227,023
* Non Income Producing.
Textile-Apparel/Mill Products - 0.39%
<PAGE>
JHAVERI VALUE FUND
FINANCIAL HIGHLIGHTS
For a share outstanding throughout the period
For the
For the For the For the period
year year year 5/1/95*
ended ended ended through
3/31/99 3/31/98 3/31/97 3/31/96
Net asset value - beginning of period $14.07 $12.64 $12.38 $12.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.17) (.09) (.11) .00
Net gain on investments both
realized and unrealized (2.33) 3.97 1.27 .79
Total from investment operations (2.50) 3.88 1.16 .79
LESS DISTRIBUTIONS
Dividends from net investment income 0.00 0.00 0.00 (.04)
Dividends from capital gains (.21) (2.45) (.90) (.37)
Net asset value - end of period $11.36 $14.07 $12.64 $12.38
Total Return (17.66)% 33.74% 9.23% 7.45%**
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in 000's) 12,227 16,174 11,104 9,124
Ratio of expenses to average net assets 2.50% 2.50% 2.50% 2.50%**
Ratio of net investment income (loss)
to average net assets (1.43)% (.70)% (.87)% (.02)%**
Portfolio turnover rate 83.09% 58.92% 54.48% 45.23%
*Commencement of Operations
**Annualized
<PAGE>
JHAVERI VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1999
ASSETS
Investments in securities at value (cost $13,034,519) $12,213,249
Receivable for securities sold 120,364
Receivable for dividends and interest 9,428
Total assets 12,343,041
LIABILITIES
Payable for investment securities purchased 90,138
Accrued operating expenses & other 25,880
Total Liabilities 116,018
NET ASSETS
Net assets (equivalent to $11.36 per share based on
1,075,894 shares of capital stock outstanding) 12,227,023
Composition of Net Assets:
Paid in capital 13,055,309
Accumulated net realized gain on investments (7,016)
Net unrealized appreciation/(depreciation) on investments (821,270)
NET ASSETS, March 31, 1999 $12,227,023
The accompanying notes are an integral part of the financial statements.
<PAGE>
JHAVERI VALUE FUND
STATEMENT OF OPERATIONS
For year ending
March 31, 1999
INVESTMENT INCOME
Interest $ 5,481
Dividends 135,863
Total Investment Income 141,344
EXPENSES
Operating Expenses (Note 3) (333,778)
Net investment income/(loss) (192,434)
Net realized gain/(loss) on securities transactions (207,455)
Net change in unrealized appreciation/(depreciation)
on investments (2,485,670)
Net gain/(loss) on investments (2,693,125)
Net increase/(decrease) in net assets resulting
from operations $(2,885,559)
The accompanying notes are an integral part of the financial statements.
<PAGE>
JHAVERI VALUE FUND
STATEMENT OF CHANGES IN NET ASSETS
For the year For the year
ended ended
3/31/99 3/31/98
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investments income (loss) $(192,434) $(95,947)
Net realized gain on securities transactions (207,455) 2,288,317
Net change in unrealized appreciation/(depreciation)
of investments (2,485,670) 1,809,583
Net increase in net assets resulting from operations (2,885,559) 4,001,953
DISTRIBUTION TO SHAREHOLDERS:
From net investment income 0 0
From net realized gain on investments (248,351) (2,234,618)
FUND SHARE TRANSACTIONS:
Net proceeds from shares sold 1,388,967 2,012,817
Dividends reinvested 248,351 2,234,618
Payment for shares redeemed (2,450,208) (855,317)
Net increase in net assets from fund share transactions (812,890) 3,392,118
Net increase in net assets (3,946,800) 5,159,453
NET ASSETS:
Beginning of period 16,173,823 11,014,370
End of period $12,227,023 $16,173,823
The accompanying notes are an integral part of the financial statements.
<PAGE>
JHAVERI VALUE FUND
NOTES TO FINANCIAL STATEMENTS
March 31,1999
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"). The Fund's investment objective is to provide long term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
a broad range of common stocks believed by its Adviser to have above average
prospects for appreciation, based on a proprietary investment model developed by
the Adviser.
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 investment 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.
Estimates-The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
period. Actual results could differ from those estimates.
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. Discounts and premiums on securities purchased are amortized over the
life of the respective securities.
<PAGE>
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 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 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 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, 1999, the Adviser has received a fee of
$333,778 from the Fund.
Note 4. Distributions to Shareholders
On December 15, 1998, a long term capital gain distribution of $0.21135
aggregating $248,351 was declared from net realized gains from investment
transactions during 1998. The dividend was paid December 15, 1998, to
shareholders of record on December 14, 1998.
Note 5. Capital Share Transactions
As of March 31, 1999 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 year ended
March 31, 1999
Shares Amount
Shares sold 113,731 $1,388,967
Shares issued in
reinvestment of dividends 23,254 248,351
Shares redeemed (210,607) (2,450,208)
Net increase (73,622) $(812,890)
Share outstanding/Paid in capital
Beginning of Period1, 149,516 $14,060,633
End of Period 1,075,894 $13,247,743
Note 6. Investments
For the year ended March 31, 1999 purchases and sales of investment securities,
other than short-term investments, aggregated $10,593,828 and $10,933,371
respectively. The gross unrealized appreciation for all securities totaled
$1,507,803 and the gross unrealized depreciation for all securities totaled
$(2,329,073) or a net unrealized depreciation of $(821,270). The aggregate cost
of securities for federal income tax purposes at March 31, 1999 was $13,034,519.
<PAGE>
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 paid-in-capital have been adjusted as of March 31, 1999 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, 1999.
Undistributed Net Investment Loss Paid-in-Capital
192,434 (192,434)
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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,
1999, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the three years 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, 1999, 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.
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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, 1999, the results of its operations for the
year then ended, the changes in its net assets for each of the two years in the
period then ended, and the financial highlights for each of the three years 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.
McCurdy & Associates CPA's, Inc.
Westlake, Ohio
April 13, 1999
