United States
Securities and Exchange Commission
Washington, D.C. 20549
FORM N-CSR
Certified Shareholder Report of Registered Management investment companies
Investment Company Act file number 811-06680
BHIRUD FUNDS INC.
(Exact Name of Registrant as Specified in Charter)
c/o Bhirud Associates, Inc.
6 Thorndal Circle, Suite 205, Darien, CT 06820
(Address of Principal Executive Offices) (Zip code)
Registrant's Telephone Number, including Area Code: (203) 662 - 6659
SURESH BHIRUD
Bhirud Associates, Inc.
6 Thorndal Circle, Suite 205, Darien, CT 06820
(Name and Address of Agent for Service)
Registrant's telephone number, including area code: (203) 662-6659
Date of fiscal year end: July 31
Date of reporting period: July 31, 2011
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB
has reviewed this collection of information under the clearance requirements of 44 U.S.C. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
The Apex Mid Cap Growth Fund
Annual Report
July 31, 2011
The Apex Mid Cap Growth Fund
C/O Bhirud Funds Inc.
6 Thorndal Circle, Suite 205, Darien, CT 06820
Telephone (203) 662-6659, www.apexfund.net
ANNUAL REPORT Dated July 31st, 2011
September 14, 2011
Management's Discussion of Fund Performance
As the performance table in the attached report shows, the Apex Fund significantly underperformed its benchmark for the 12 months ended July 31, 2011. Over this period, Apex was down -2.01%, versus up 25.77% for the S&P MidCap 400 index and up 19.65% for S&P 500 index. Over 5 years ended July 31, 2011, Apex was up 2.67%, compared to +2.39% for the S&P 500 index, but it underperformed the S&P MidCap 400 index, which was up 6.45%. While we were able to save Apex from underperforming during the market crash of 2008, we were not protected during the market volatility for the first 7 months of 2011, which has continued to rise as we go to press. We cover the topic of volatility and expand on our future outlook for stocks following the discussion of our portfolio.
Portfolio Holdings
Our holdings throughout the fiscal year have been and are highly diversified, as usual. Broadly speaking, we are invested in consumer service companies; alternative energy, including solar energy; technology; and the health care industry.
The significant underperformance of Apex in this past fiscal year is primarily because the stock market has favored larger capitalization stocks during this intense period of volatility. More importantly, while some of our holdings underperformed severely, others did so well that they have become large relative to the total portfolio during the latest fiscal year. In many of these cases, we have not been trading them, as we believe these stocks are likely to be great performers over a long period of time due to their long-term growth prospects. We tend to focus on individual companies that have growth dynamics and, in a few cases, growth aspects of a certain sector.
We highlight below some of our more interesting holdings, which also gives the flavor of our investment approach and overall strategy.
·
Sirius XM Radio Inc.: We have done well in this name since our initial purchase and, depending on market fluctuations, it becomes our largest holding from time to time. The company provides satellite radio services domestically and in Canada. The company is now more or less a monopoly in this aspect of radio broadcasting. Although there are other competing technologies, few can match the quality of music and uninterrupted service provided by the company for car drivers who travel regularly over long distances.
·
TiVo Inc.: This has been a very volatile holding for us. The company provides technology and services for television solutions, including digital video recorders (DVRs), as well as the ability to search for a large number of videos, and shows results through the television, similar to a browser. The long-term value of this company stems from the patents it holds. However, it is taking a long time for the company to win some of the legal cases, although it won one major legal case so far. In the long run, the company offers significant growth potential. Its main product, the DVR box, could become the industry-leading product, replacing the regular interface for receiving cable and satellite signals.
·
Netflix, Inc.: This is also one of our largest holdings. The company provides subscription-based Internet services, primarily for movie streaming, and subscriptions for DVDs by mail order. The company has achieved a lead position in this market segment due to its growing base of subscribers and due to its large collection of movies, which are offered at competitive prices. There is significant long-term potential for this company as it expands globally.
·
Capstone Turbine Corp.: Depending on market volatility, this holding is also sometimes our largest holding. The company primarily offers microturbine units for combined cooling, heating, and power applications. These microturbines work on many different power sources, including natural gas, sour gas, landfill or digester gas, diesel, and biodiesel. Because of this versatility, these microturbines are becoming popular as sources of power where traditional power generators are not cost effective.
·
Clean Energy Fuels Corp.: This company offers natural gas as an alternative fuel for vehicle fleets. The company builds and operates fueling stations supplying compressed and liquefied natural gas. The company also manufactures products for conversion of engines to work on natural gas. This company is a major long-term play on fleets switching to natural gas due to the high cost of diesel and gasoline.
·
Entegris, Inc.: This is a highly unique technology company that manufactures and supplies material used in the processing of semiconductors. The company has a highly diversified base of customers and offers long-term growth potential, as its products are used in a variety of industries, from integrated circuit manufacturers, to chemicals, to aerospace industries.
·
Onyx Pharmaceuticals Inc.: This biotechnology company already has one drug, Nexavar, approved for treatment of liver cancer and kidney cancer. With five late-stage clinical trials testing further uses of Nexavar that are expected to read out by the end of 2012, Nexavar is poised to penetrate existing and new markets. The company also has other products in development.
Market Comments and Outlook
During the first seven months of 2011, volatility in the stock market assumed new heights. So far this year, we saw three major precipitous sell-offs. The first two sell-offs were roughly 7% declines. The 3rd sell-off, which occurred in late July to early August, was about -20%, as measured by the S&P 500 index. Our sense is that average stocks suffered even more volatility compared to the large-capitalization stocks that dominate the weighting in the S&P 500 index and S&P MidCap 400 index.
The first sell-off took place in the aftermath of Japan’s tsunami and nuclear disaster, when fears of supply chain disruptions, as well as a possible slowdown in the Japanese economy, gripped the equity markets globally. The second sell-off, in June, was largely attributed to fears of a double dip and continued fears of sovereign debt worries of smaller European countries. The third and more serious sell-off, in late July, was largely attributed to the confusion surrounding the debt limit debate, which was followed by the decision by one major rating agency to downgrade the Federal debt, a decision that was not supported by other leading rating agencies.
There has also been a fear of a so-called double dip ever since the economic recovery started in 2009. This fear is higher or lower, depending on how the monthly and quarterly economic indicators are performing. The softer economic data for June 2011 accentuated the sell-off in July. June may have been soft, but July and August data points do not point to a so-called double dip, but rather to a continuation of slow but steady GDP growth. The real GDP growth has averaged about 1.6% for the last 8 quarters.
This has been a slow-growth economic recovery, primarily as the housing sector is saddled with too much mortgage debt and values of houses are well below the high of the market cycle. Additional factors contributing to slow economic growth are low business and consumer confidence due to the high level of Federal debt, political infighting on Capital Hill, and lack of clear growth policy initiatives by the current Administration.
However, offsetting the slow domestic economic growth, is strong growth globally, led by emerging market economies and BRIC countries. As a result, corporate profit growth so far in this cycle is running at double-digit rates. Various measures of equity valuations indicate that stocks are attractively priced, especially relative to the almost 0% return on short-term Treasuries and very low interest rates on long-term Treasuries. The question that every investor probably is pondering is, can 10-year Treasuries, at a meagerly 2.1% yield, offer any respectable return over the next 10 years relative to the current inflation rate, which is at 3.6% measured by CPI, or even to the 3% annual inflation rate we have experienced from 1926 to 2010? By comparison, the current dividend yield for the S&P 500 index is 2.2%. Dividends for this index have grown at a 5% annual rate from 1926-2010, a period that covers the 1930’s depression, plenty of recessions, and numerous financial panics. The expected annualized total return for SPX based on most conservative estimates is 7.2%, assuming dividend growth in line with its historical pace. Dividends in this cycle so far are rising faster than the long-term historic rate, up 16% y/y and 13% y/y for Q2 2011 and Q1 2011, respectively, as dividend payouts were cut in 2008.
There seems to be serious mispricing in financial markets, especially between the stock market and the Treasury bond market, and it’s increasingly getting more mispriced, based on a litany of fear factors too long to be listed here. But there are times in the long history of financial markets when logic fails or the markets get into extreme pricing based on some mania. Perhaps a good example would be to refresh our memories on the tulip mania during the Dutch golden age. At the peak of the tulip mania in 1637, one single tulip bulb sold for more than 10 times the annual income of a skilled craftsman at the time (per Wikipedia). In our view, stocks currently offer a significantly better value proposition than Treasury bonds.
By several popular measures, stocks look as oversold as at the bottom of the flash crash of May of 2010. Stocks present a buying opportunity within the context of the long cycle driven by historically low interest rates.
Overall, we are more optimistic for the outlook for the stock market for the next several years as the Federal Reserve Board keeps interest rates low. We hope to create good performance by focusing on individual stocks and hope to weather the rising volatility in the stock market.
Sincerely,
Suresh L. Bhirud, CFA
Chairman and President.
Performance: The Bottom Line
The Apex Mid Cap Growth Fund
The line graph below shows how a $10,000 investment in the Fund made 10 years ago, on July 31, 2001, would have become $10,504 (as of July 31, 2011). The line graph shows how this compares to the broad-based Standard & Poor's 500 Index and the Fund's benchmark, the Standard & Poor's MidCap 400 Index, over the same period.
![[apexncsr002.jpg]](https://capedge.com/proxy/N-CSR/0001162044-11-000965/apexncsr002.jpg)
Performance Comparison (Average Annual Total Returns) - For the periods ended July 31, 2011
| 1 Year | 5 Years | 10 Years |
Apex Mid Cap Growth Fund | -2.01% | +2.67% | +1.09% |
S&P 500 (reflects no deduction for fees, expenses, or taxes) | +19.65% | +2.39% | +2.61% |
S&P Mid Cap (reflects no deduction for fees, expenses, or taxes) | +25.77% | +6.45% | +7.71% |
All Fund performance numbers represent past performance numbers, and are no guarantee of future results and the graph and table do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or redemption of Fund Shares.
The following chart gives a visual breakdown of the Fund by the industry sectors the underlying securities represent as a percentage of the portfolio of investments.
![[apexncsr004.jpg]](https://capedge.com/proxy/N-CSR/0001162044-11-000965/apexncsr004.jpg)
See accompanying Notes to Financial Statements
THE APEX MID CAP GROWTH FUND |
Schedule of Investments |
July 31, 2011 |
| | | | |
Shares | | | Value |
| | | | |
COMMON STOCK - 95.79% | |
| | | | | |
Agricultural Chemicals - 1.28% | |
4,000 | | Rentech, Inc. * | $ 3,761 | |
| | | | | |
Biological Products - 3.68% | |
200 | | Onyx Pharmaceuticals, Inc. * | 6,596 | |
200 | | Human Genome Sciences, Inc. * | 4,202 | |
| | | | 10,798 | |
Cable & Other Pay Television Services - 4.81% | |
1,500 | | TiVo, Inc. * | 14,100 | |
| | | | | |
Computer Peripheral Equipment - 0.93% | |
500 | | Brocade Communications Systems, Inc. * | 2,740 | |
| | | | | |
Computer Storage Devices - 2.90% | |
200 | | SanDisk Corp. * | 8,506 | |
| | | | | |
Crude Petroleum & Natural Gas - 0.01% | |
10,000 | | CityView Corp. Ltd. * | 25 | |
| | | | | |
Dental Equipment & Supplies - 0.01% | |
5 | | Biolase Technology, Inc. * | 17 | |
| | | | | |
Electrical Industrial Apparatus - 1.04% | |
1,300 | | Plug Power, Inc. * | 3,042 | |
| | | | | |
Electromedical & Electrotherapeutic Apparatus - 2.76% | |
10,000 | | Trimedyne, Inc. * | 1,600 | |
900 | | Power-One, Inc. * | 6,489 | |
| | | | 8,089 | |
Engines & Turbines - 6.43% | |
13,000 | | Capstone Turbine Corp. * | 18,850 | |
| | | | | |
Gas & Other Services Combined - 5.46% | |
1,000 | | Clean Energy Fuels, Corp. * | 16,010 | |
| | | | | |
Household Appliances - 2.50% | |
100 | | SodaStream International Ltd. * | 7,335 | |
| | | | | |
Medicinal Chemicals & Botanical Products - 0.72% | |
300 | | Savient Pharmaceuticals, Inc. * | 2,100 | |
| | | | | |
Miscellaneous Electrical Machinery, Equipment & Supplies - 3.56% | |
1,000 | | A123 Systems, Inc. * | 5,130 | |
4,000 | | FuelCell Energy, Inc. * | 5,320 | |
| | | | 10,450 | |
Miscellaneous Metal Ores - 1.57% | |
300 | | Stillwater Mining Co. * | 4,590 | |
| | | | | |
Pharmaceutical Preparations - 4.61% | |
100 | | Endo Pharmaceuticals Holdings, Inc. * | 3,725 | |
1,000 | | Sinovac Biotech Ltd. * | 2,830 | |
8 | | Vivus, Inc. * | 66 | |
3,000 | | Zalicus, Inc. * | 6,900 | |
| | | | 13,521 | |
Photographic Equipment & Supplies - 0.82% | |
1,000 | | Eastman Kodak Co. * | 2,400 | |
| | | | | |
Plastics Products, NEC - 3.22% | |
1,100 | | Entegris, Inc. * | 9,427 | |
| | | | | |
Radio & TV Broadcasting & Communications Equipment - 1.26% | |
100 | | Youku.com, Inc. ADR * | 3,691 | |
| | | | | |
Radio Broadcasting Stations - 9.36% | |
13,000 | | Sirius XM Radio, Inc. * | 27,430 | |
| | | | | |
Retail-Retail Stores, NEC - 0.77% | |
200 | | E-Commerce China Dangdang, Inc. ADR * | 2,260 | |
| | | | | |
Rubber & Plastics Footwear - 1.07% | |
100 | | Crocs, Inc. * | 3,133 | |
| | | | | |
Semiconductors & Related Devices - 24.58% | |
2,000 | | China Sunergy Co. Ltd. ADR * | 3,160 | |
200 | | Cirrus Logic, Inc. * | 3,036 | |
3,000 | | Emcore Corp. * | 7,860 | |
1,000 | | Hanwha SolarOne Co. Ltd. * | 5,420 | |
2,000 | | JA Solar Holdings Co. Ltd. ADR * | 9,600 | |
200 | | JDS Uniphase Corp. * | 2,630 | |
100 | | LDK Solar Co. Ltd. ADR * | 674 | |
100 | | MEMC Electronic Materials, Inc. * | 742 | |
400 | | Micron Technology, Inc. * | 2,948 | |
400 | | NVIDIA Corp. * | 5,532 | |
1,300 | | ReneSola Ltd. ADR * | 5,889 | |
500 | | RF Micro Devices, Inc. * | 3,375 | |
200 | | Skyworks Solutions, Inc. * | 5,062 | |
300 | | SunPower Corp. Class A * | 5,889 | |
1,100 | | Suntech Power Holdings Co. Ltd. ADR * | 8,074 | |
300 | | Yingli Green Energy Holding Co Ltd. ADR * | 2,172 | |
| | | | 72,063 | |
Services-Business Services, NEC - 1.12% | |
100 | | eBay, Inc. * | 3,275 | |
| | | | | |
Services-Computer Integrated Systems Design - 1.01% | |
1,000 | | Sonus Networks, Inc. * | 2,960 | |
| | | | | |
Services-Computer Programming Services - 0.23% | |
200 | | RealNetworks, Inc. * | 676 | |
| | | | | |
Services-Personal Services - 1.67% | |
100 | | Coinstar, Inc. * | 4,886 | |
| | | | | |
Services-Video Tape Rental - 6.35% | |
70 | | Netflix, Inc. * | 18,619 | |
| | | | | |
Telephone & Telegraph Apparatus - 1.54% | |
100 | | Ciena Corp. * | 1,546 | |
2,000 | | Nortel Networks Corp. * | 100 | |
500 | | Tellabs, Inc. | 2,070 | |
400 | | Zhone Technologies, Inc. * | 812 | |
| | | | 4,528 | |
Unclassified - 0.00% | |
9,000 | | Diamond Hitts Production, Inc. * | 1 | |
58 | | DIAS Holding, Inc. * | 0 | |
200 | | GSV, Inc. * | 8 | |
27 | | Learning Priority, Inc. * | 0 | |
200 | | TPC Liquidation, Inc. * | 0 | |
170 | | VPGI Corp. * | 1 | |
| | | | 10 | |
Watches, Clocks, Clockwork Operated Devices/Parts - 0.55% | |
100 | | Movado Group, Inc. | 1,618 | |
| | | | | |
TOTAL FOR COMMON STOCK (Cost $454,663) - 95.79% | $ 280,910 |
| | | | | |
TOTAL INVESTMENTS (Cost $454,663) - 95.79% | 280,910 |
| | | | | |
OTHER ASSETS LESS LIABILITIES - 4.21% | 12,341 |
| | | | | |
NET ASSETS - 100.00% | $ 293,251 |
* Non-income producing security during the period. |
ADR - American Depository Receipt |
The accompanying notes are an integral part of these financial statements. |
THE APEX MID CAP GROWTH FUND |
Statement of Assets and Liabilities For the Year Ended July 31, 2011 |
| | | |
Assets: | | |
Cash | $ 11,451 | |
Investment Securities at Value (Identified cost - $454,663) | 280,910 | |
Securities Sold | 12,591 | |
Total Assets | | $ 304,952 |
Liabilities: | | |
Accrued Management Expenses | 323 | |
Accrued Administrative Expenses | 65 | |
Accrued Distribution Expenses | 1,137 | |
Accrued Expenses | 10,176 | |
Total Liabilities | | $ 11,701 |
| | | |
Net Assets (Equivalent to $1.46 per share based on 201,120 shares outstanding) | | $ 293,251 |
| | | |
Composition of Net Assets: | | |
Paid in Capital | $ 3,115,802 | |
Accumulated Net Realized Loss | (2,648,798) | |
Net Unrealized Depreciation of Investments | (173,753) | |
Net Assets | $ 293,251 | |
Statement of Operations For the Year Ended July 31, 2011 |
| | | |
Investment Income: | | |
Dividends | | $ 196 |
Expenses: | | |
Investment Advisor (Note 4) | $ 3,307 | |
Custodian | 4,220 | |
Audit | 3,838 | |
Registration | 2,072 | |
Fund Accounting | 777 | |
Legal | 856 | |
Transfer Agent | 4,515 | |
Trustee Fees | 2,128 | |
Miscellaneous | 900 | |
Printing Expense | �� 655 | |
Insurance | 812 | |
Fund Administration (Note 4) | 662 | |
Distribution Fees 12b-1 (Note 5) | 827 | |
Total Expenses | | 25,569 |
Expense Reimbursement/waived by Advisor (Note 4) | | (2,338) |
Net Expenses | | 23,231 |
| | | |
Net Investment Income (Loss) | | (23,035) |
| | | |
Realized and Unrealized Gain on Investments: | | |
Net Realized Gain on Investments | | 35,722 |
Change in Unrealized Depreciation on Investments | | (18,598) |
Net Realized and Unrealized Gain on Investments | | 17,124 |
Net Decrease in Net Assets Resulting from Operations | | $ (5,911) |
| | | |
| | | |
The accompanying notes are an integral part of these financial statements. | | |
THE APEX MID CAP GROWTH FUND |
Statement of Changes in Net Assets For Each Period |
| | | | | | |
| | | For the year | For the year | | |
| | | ended | ended | | |
| | | July 31, 2011 | July 31, 2010 | | |
Increase (Decrease) in Net Assets | | | | | |
Net Investment Loss | | $ (23,035) | $ (15,824) | | |
Net Realized Gain on Investments | | 35,722 | 90,062 | | |
Net Unrealized Depreciation of investments | | (18,598) | (16,875) | | |
Net Increase (Decrease) in Net Assets Resulting from Operations | (5,911) | 57,363 | | |
| | | | | | |
Capital Share Transactions: | | | | | |
Shares Sold | | 2,500 | 14,200 | | |
Cost of Shares Redeemed | | (7,544) | (13,330) | | |
Increase (Decrease) in Net Assets Due to Capital Share Transactions | (5,044) | 870 | | |
| | | | | | |
Net Increase (Decrease) in Net Assets | | (10,955) | 58,233 | | |
Net Assets at Beginning of Period | | 304,206 | 245,973 | | |
Net Assets at End of Period | | $ 293,251 | $ 304,206 | | |
Financial Highlights For a Share Outstanding Throughout Each Period |
| | | | | | |
| | For the year | For the year | For the year | For the year | For the year |
| | ended | ended | ended | ended | ended |
| | July 31, 2011 | July 31, 2010 | July 31, 2009 | July 31, 2008 | July 31, 2007 |
Net Asset Value - | | | | | |
Beginning of Period | $ 1.49 | $ 1.20 | $ 1.33 | $ 1.50 | $ 1.28 |
Net Investment Loss (a) | (0.11) | (0.08) | (0.08) | (0.10) | (0.11) |
Net Gains or Losses on Securities (realized and unrealized) | 0.08 | 0.37 | (0.05) | (0.07) | 0.33 |
Total from Investment Operations | (0.03) | 0.29 | (0.13) | (0.17) | 0.22 |
| | | | | | |
Distributions (From Net Investment Income) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Distributions (From Capital Gains) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Total Distributions | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| | | | | | |
Net Asset Value - | | | | | |
End of Period | $ 1.46 | $ 1.49 | $ 1.20 | $ 1.33 | $ 1.50 |
Total Return (b) | (2.01)% | 24.17% | (9.77)% | (11.33)% | 17.19% |
Ratios/Supplemental Data | | | | | |
Net Assets - End of Period (Thousands) | 293 | 304 | 246 | 283 | 325 |
| | | | | | |
Ratio of Expenses to Average Net Assets | 7.03% | 5.23% | 10.92% | 8.39% | 8.69% |
Ratio of Net Income to Average Net Assets | (6.97)% | (5.10)% | (6.24)% | (8.21)% | (7.25)% |
| | | | | | |
Reimbursements/Waivers on Above - Ratios | 0.71% | 1.20% | 1.24% | 1.20% | 1.20% |
| | | | | | |
Portfolio Turnover Rate | 128.28% | 153.31% | 433.04% | 320.00% | 177.92% |
| | | | | |
(a) Per share net investment income has been determined on the basis of average number of shares outstanding during the period. |
(b) Total Return in the above table represents the rate that the investor would have earned or lost on an investment in the Fund assuming reinvestment of dividends. |
| |
The accompanying notes are an integral part of these financial statements. |
THE APEX MID CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE YEAR ENDED JULY 31, 2011
1.
SIGNIFICANT ACCOUNTING POLICIES
Bhirud Funds Inc. (the "Fund") is a diversified open-end management investment company currently consisting of The Apex Mid Cap Growth Fund portfolio (the "Portfolio"). The Fund was incorporated in Maryland on May 27, 1992. Prior to November 4, 1992 (commencement of operations), the Fund had no operations other than the sale of 10,000 shares of stock on August 4, 1992 at a cost of $100,000 to Thomas James MidCap Partners representing the initial capital.
Codification
The Financial Accounting Standards Board (FASB) has issued FASB ASC 105 (formerly FASB Statement No. 168), The “FASB Accounting Standards Codification™” and the Hierarchy of Generally Accepted Accounting Principles in the United States of America (“GAAP”) (“ASC 105”). ASC 105 established the FASB Accounting Standards Codification™ (“Codification” or “ASC”) as the single source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification supersedes all existing non-SEC accounting and reporting standards. All other non-grandfathered, non-SEC accounting literature not included in the Codification will become nonauthoritative.
Following the Codification, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task Force Abstracts. Instead, it will issue Accounting Standards Updates, which will serve to update the Codification, provide background information about the guidance and provide the basis for conclusions on the changes to the Codification. GAAP is not intended to be changed as a result of the FASB's Codification project, but it will change the way the guidance is organized and presented. As a result, these changes will have a significant impact on how companies reference GAAP in their financial statements and in their accounting policies for financial statements issued for interim and annual periods ending after September 15, 2009. The Fund has implemented the Codification.
The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America.
The Fund adopted FASB Accounting Standards Codification guidance regarding "Disclosures about Derivative Instruments and Hedging Activities" effective January 1, 2009. This guidance requires enhanced disclosures about the Fund’s derivative and hedging activities, including how such activities are accounted for and their effect on the Fund’s financial position, performance and cash flows. The Fund did not have any activity in derivatives for the year ended July 31, 2011.
SECURITY VALUATION
Readily marketable portfolio securities listed on the New York Stock Exchange are valued at the last sale price reflected at the close of the regular trading session of the New York Stock Exchange on the business day as of which such value is being determined. If there has been no sale on such day, the securities are valued at the mean of the closing bid and asked prices on such day. If no bid or asked prices are quoted on such day, then the security is valued by such method as the Board of Directors shall determine in good faith to reflect its fair value. Readily marketable securities not listed on the New York Stock Exchange but listed on other national securities exchanges or admitted to trading on the National Association of Securities Dealers Automated Quotations, Inc. ("NASDAQ") National List are valued in like manner. Portfolio securities traded on more than one national securities exchange are valued at the last price on the business day as of which such value is being determined as reflected on the tape at the close of the exchange representing the principal market for such securities.
Readily marketable securities traded in the over-the-counter market, including listed securities whose primary market is believed by the Advisor to be over-the-counter but excluding securities admitted to trading on the NASDAQ National List, are valued at the mean of the current bid and asked prices as reported by NASDAQ or, in the case of securities not quoted by NASDAQ, the National Quotation Bureau or such other comparable sources as the Board of Directors deem appropriate to reflect their fair value.
United States Government obligations and other debt instruments having sixty days or less remaining until maturity are stated at amortized cost. Debt instruments having a greater remaining maturity will be valued at the highest bid price obtained from a dealer maintaining an active market in that security or on the basis of prices obtained from a pricing service approved as reliable by the Board of Directors.
Securities, including common stocks and exchange traded funds, which are traded on a national securities exchange or on the NASDAQ over-the-counter market, are valued at the last quoted sales price, and generally classified as a Level 1 investment. Investments in mutual funds, including money market funds, are valued at the ending net asset value provided by the funds, and generally classified as a Level 1 investment. If there are no sales reported the Fund’s portfolio securities will be valued using the last reported bid price. Short-term obligations having remaining maturities of 60 days or less are valued at amortized cost, and generally classified as a Level 2 investment. Securities for which market quotations are not readily available are valued at fair value as determined in good faith by and under the direction of the Trust’s Board of Trustees, and generally classified as a Level 3 investment.
In accordance with GAAP, fair value is defined as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP also establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. The three-tier hierarchy of inputs is summarized below.
• | | Level 1 – quoted prices in active markets for identical investments |
• | | Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) |
• | | Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments) |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following table summarizes the valuation of the Fund’s investments by the above fair value hierarchy levels as of July 31, 2011:
Assets (b) | Level 1 | Level 2 | Level 3 | Total |
Common Stocks | $ 293,411 | - | - | $ 293,411 |
Total | $ 293,411 | - | - | $ 293,411 |
(b) Refer to the Fund’s Schedule of Investments for a listing of securities by security type and industry.
The Fund did not hold any Level 3 assets during the year ended July 31, 2011.
SECURITY TRANSACTIONS AND INVESTMENT INCOME
Security transactions are accounted for on the dates the securities are purchased or sold (the trade dates), with realized gain and loss on investments determined by using specific identification as the cost method. Interest income (including amortization of premium and discount, when appropriate) is recorded as earned. Dividend income and dividends and capital gain distributions to shareholders are recorded on the ex-dividend date.
FEDERAL INCOME TAXES
The Fund intends to qualify as a "regulated investment company" under Subchapter M of the Internal Revenue Code and distribute all of its taxable income to its shareholders. Therefore, no federal income tax provision is required.
In addition, GAAP requires management of the Funds to analyze all open tax years, fiscal years 2008-2010, as defined by IRS statute of limitations for all major industries, including federal tax authorities and certain state tax authorities. As of and during the period ended July 31, 2011, Fund did not have a liability for any unrecognized tax benefits. The Fund has no examination in progress and is not aware of any tax positions for which it is reasonably possible that the total tax amounts of unrecognized tax benefits will significantly change in the next twelve months.
CAPITAL LOSS CARRY FORWARDS
The corporation is a regulated investment company (as defined in internal revenue code section 851) and is subject to special rules under IRC section 1212 regarding capital loss carry backs and carryovers. These rules prohibit the corporation from carrying back capital losses to any year in which it was a regulated investment company, while allowing capital loss carryovers to eight taxable years (not the usual three) succeeding the loss year. For taxable years beginning after December 22, 2010, regulated investment companies are permitted unlimited carry forwards of net capital losses. Such losses retain their character as either short- or long-term capital losses.
Net capital losses that occurred before December 23, 2010, continue to be treated as short term, and expire according to their original schedule. Such losses are not available to offset capital gains until all net capital losses occurring after December 22, 2010, have been utilized. As a result, some net capital loss carryovers that originated prior to December 23, 2010 may expire. At July 31, 2011, the company had capital loss carryovers from periods prior to December 23, 2010 of $1,602,905, which will expire as follows: $239,889 (7/31/12), $668,374 (7/31/13), $673,081 (7/31/14), $0 (7/31/15), $10,424 (7/31/16), $11,137 (7/31/17) and $0 (7/31/18). For the fiscal year ending July 31, 2011, the company had $112,094 in capital loss carry forwards that were used as follows: $35,722 were used to offset capital gains; the remaining $76,372 expired.
RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with generally accepted accounting principals, the Fund recorded reclassifications in the capital accounts. The Fund recorded the operating loss of $23,035 (after net investment income) for the year ended July 31, 2011 as a reduction in additional paid-in-capital. These reclassifications have no impact on net asset value of the Fund and are designed generally to present undistributed income (loss) and realized gains (losses) on a tax basis which is considered to be more informative to the shareholder.
SUBSEQUENT EVENTS
Management has evaluated the impact of all subsequent events through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in these financial statements.
2.
CAPITAL STOCK TRANSACTIONS
The Articles of Incorporation, dated May 27, 1992, permit the Fund to issue twenty billion shares (par value $0.001). Transactions in shares of common stock for year ended July 31, 2011 and year ended July 31, 2010 were as follows:
| | For the Year Ended July 31, 2011 | For the Year Ended July 31, 2010 |
| | Shares | Amount | Shares | Amount |
| | | | | |
Shares Sold | 1,543 | $2,500 | 8,961 | $14,200 |
Shares Issued in Reinvestment of Dividends | 0 | 0 | 0 | 0 |
Shares Redeemed | (4,736) | (7,544) | (9,250) | (13,330) |
Net | (3,193) | $ (5,044) | (289) | $ 870 |
3.
INVESTMENTS
Purchases and sales of securities for the year ended July 31, 2011 other than short-term securities, aggregated $412,549 and $457,073, respectively.
Gross Unrealized Appreciation | Gross Unrealized Depreciation | Net Unrealized Depreciation |
$46,406 | $(220,159) | $(173,753) |
4.
INVESTMENT ADVISORY CONTRACT
The Fund employs Bhirud Associates, Incorporated (the "Advisor") to provide a continuous investment program for the Fund's portfolio, provide all facilities and personnel, including Officers required for its administrative management, and to pay the compensation of all Officers and Directors of the Fund who are affiliated with the Advisor. As compensation for the services rendered and related expenses borne by the Advisor, the Fund pays the Advisor a fee, computed and accrued daily and payable monthly, equal to 1.00% of the first $250 million of the average net assets of the Portfolio; 0.75% of the average net assets of the Portfolio between $250 and $500 million; and 0.65% of the average net assets of the Portfolio over $500 million. Advisory fees for the year ended July 31, 2011 were $3,307. The Advisor has voluntarily agreed to reimburse the Fund in the event the Fund's expenses exceed certain prescribed limits. During the year ended July 31, 2011 the Advisor elected to defer the payment of Advisory fees payable in the amount of $2,007. The Advisor has voluntarily agreed to waive these fees, considering the small assets of the Fund. As of February 1, 2011 the Advisor will no longer be waiving fees. The Advisory and Administrative Services Contracts provide that if, in any fiscal year, the aggregate expenses of a Fund, excluding interest, taxes, brokerage and extraordinary expenses, but including the Advisory and Administrative Services fees, exceed the expense limitation of any state in which the Corporation is registered for sale, the Funds may deduct from fees paid to the Advisor and Administrator their proportionate share of such excess expenses to the extent of the fees payable. As a result of the passage of the National Securities Markets Improvement Act of 1996, all state expenses limitations have been eliminated at this time.
The Fund retained Bhirud Associates, Inc. ("BAI") to act as Administrator for the Fund from November 1, 1994. BAI provided administrative services for the Fund. For the year ended July 31, 2011 BAI earned administrative fees of $662. During the year ended July 31, 2011 the Advisor elected to waive the payment of Administrative service fees payable in the amount of $331.
From December 1, 1996, the U.S. Bank N.A. has been providing custodian services and from February 1st, 1998, fund accounting and transfer agency functions are provided by Mutual Shareholders Services LLC.
5.
DISTRIBUTION PLAN
The Fund's Board of Directors has adopted a distribution plan (the "Plan") under Section 12(b) of the Investment Company Act of 1940 and Rule 12b-1 there under. The Plan provides that the Portfolio may bear certain expenses and costs which in the aggregate are subject to a maximum of 0.25% per annum of the Portfolio's average daily net assets. For the year ended July 31, 2011, the Fund has incurred distribution costs of $827 payable to Bhirud Associates, Inc.
6.
TRANSACTIONS WITH AFFILIATES
During the year ended July 31, 2011, the Fund paid $7,280, brokerage commissions to Bhirud Associates, Inc.
7.
CONTROL & OWNERSHIP
The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of a fund creates a presumption of control of the funds under Section 2(a)(9) of the Investment Company Act of 1940. As of July 31, 2011, Suresh Bhirud, in aggregate, owned approximately 64.26% of the shares of the Fund.
8.
NEW ACCOUNTING PRONOUNCEMENT
In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06 “Improving Disclosures about Fair Value Measurements”. ASU No. 2010-06 amends FASB Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, to require additional disclosures regarding fair value measurements. Certain disclosures required by ASU No. 2010-06 are effective for interim and annual periods beginning after December 15, 2009, and other required disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.
VB&T | T:1.212.448.0010 | info@getcpa.com |
Certified Public Accountants, PLLC | F:1.888.99.PCAOB (72262) | www.getcpa.com |
| | 250 W 57th Street | E-mail: |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Trustees
The Apex Mid Cap Growth Fund
We have audited the accompanying statement of assets and liabilities of The Apex Mid Cap Growth Fund (a portfolio of Bhirud Funds, Inc.) including the portfolio of investments, as of July 31, 2011 and the related statements of operations, changes in net assets, and financial highlights for the year then ended. These financial statements 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 audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of The Apex Mid Cap Growth Fund at July 31, 2011, and the results of its operations, changes in net assets, and financial highlights for the year then ended in conformity with U.S. generally accepted accounting principles.
VB&T CERTIFIED PUBLIC ACCOUNTANTS, PLLC
New York, NY
September 27, 2011
As a shareholder of the Fund, you incur ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (February 1, 2011 through July 31, 2011).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.60), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratios and an assumed rate of return of 5% per year before expenses, which are not the Fund’s actual returns. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and will not help you determine the relative total costs of owning different funds.
See accompanying Notes to Financial Statements
Fund | Beginning Account Value | Ending Account Value | Expenses Paid During Period (*) |
| | February 1, 2011 | July 31, 2011 | February 1, 2011 to July 31, 2011 |
| | | | |
Actual ((13.61)% return**) | $1,000.00 | $863.91 | $34.34 |
Hypothetical*** | $1,000.00 | $987.95 | $36.62 |
* Expenses are equal to the Fund’s annualized expense ratio of 7.43%, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).
** Returns are with expenses and not annualized.
*** Assumes a 5% annual return before expenses.
THE APEX MID CAP GROWTH FUND
C/o Bhirud Funds, Inc.
6 Thorndal Circle, Suite 205, Darien, CT 06820
Tel: (877) 593-8637
Trustees Information
The Fund's Board of Trustees has responsibility for the overall management and operations of the Portfolios. Each Trustee oversees the Fund and serves until he or she resigns, retires or his or her successor is elected and qualified. Each officer serves until his or her successor is elected and qualified. The following table provides information regarding each Trustee, including those who are not an “interested person” of the Fund, as defined in the Investment Company Act of 1940.
Name, Address and Age | Position(s), Length of Time Served | Principal Occupations During Past 5 Years, Directorship Held |
Officers and Interested Directors | | |
Suresh L. Bhirud, 63 27 Winding Lane. Darien, CT 06820 | Chairman of the Board and Treasurer since August 6,1992 President since July 23, 2002 | Chairman of the Board and Treasurer; President of Bhirud Associates, Inc. |
| | | |
Disinterested Directors | | |
Timothy M. Fenton, 68 1124 Dartmouth Place Davis, CA 95616 | Director since 1994 | Retired. Licensed Realtor with William Raveis (2002-2007). |
M. John Sterba, Jr., 68 41 Madison Avenue, 33rd Floor New York, NY 10010 | Director since August 6, 1992 | Chairman of Investment Management Advisors, Inc. |
Investment Advisor & Distributor
Bhirud Associates, Inc.
Administrator
Bhirud Associates, Inc.
Custodian
U.S. Bank N.A.
Independent Auditors
VB&T CPA, PLLC
THE APEX MID CAP GROWTH FUND
ADDITIONAL INFORMATION
JULY 31, 2011 (UNAUDITED)
Additional Information
The Fund’s Statement of Additional Information ("SAI") includes additional information about the trustees and is available, without charge, upon request. You may call toll-free (877) 593-8637 to request a copy of the SAI or to make shareholder inquiries.
Proxy Voting
A description of the Company's proxy voting policies and procedures relating to the holdings of the Fund is available, without charge and upon request, by calling 1-877-593-8637, on the Mutual Shareholder Services, LLC website at www.mutualss.com and on the SEC's website at www.sec.gov.
Portfolio Holdings
The Fund files a complete schedule of investments with the SEC for the first and third quarter of each fiscal year on Form N-Q. The Fund’s first and third fiscal quarters end on October 31 and April 30. The Fund’s Forms N-Q are available on the SEC’s website at http://sec.gov, or they may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room). You may also obtain copies by calling the Fund at (877) 593-8637.
Approval of Investment Advisory Agreement
General Background. On July 5, 2011, the Board of Directors, including all of the Independent Directors, approved the renewal of the Fund’s Advisory Agreement with Bhirud Associates Inc. (the “Adviser”) for an additional one-year term. During the course of each year, the Directors receive a wide variety of materials relating to the services provided by the Adviser, including reports on the Fund’s investment results, portfolio composition, compliance with applicable regulations, portfolio trading practices, and shareholder services. In determining whether to renew the Advisory Agreement, the Board also reviewed additional information provided by the Adviser.
The information below summarizes the Board’s considerations and conclusions in connection with its approving the renewal of the Advisory Agreement. In considering the continuation of the Agreement, the Directors did not identify any particular information that was all-important or controlling and each Director attributed different weights to various factors.
Quality of Services. In reviewing the services that the Adviser provides to the Fund, the Directors considered Suresh Bhirud’s extensive experience in the securities and investment management industries. They noted that Mr. Bhirud is the largest shareholder of the Fund. The Directors also noted the Adviser’s dedication to providing all its research and energy to managing the Fund.
In reviewing the quality of services provided to the Fund, the Directors reviewed the performance of the Fund compared with the returns of the S&P 500 index and the S&P MidCap 400 index over 1-year, 5-year and 10-year periods.
The Directors observed that the Fund performed admirably during the crash of 2008 and limited the Fund’s losses during the worst stock market performance since the depression of the 1930’s. However, the Directors noted that the Fund has significantly under-performed during the 12 months ended May 31, 2011. They noted that there are several factors that are influencing the performance of the Fund over a shorter time frame. One is that the Fund owns large positions in several key stocks that have potential to be big performers over the long run, but tend to be volatile over a short term. Second, the small size of the Fund has a tendency to magnify the negative returns, as the expense ratio as a percent of assets goes higher in market downturns.
Cost of Services to the Fund – Advisory Fees and Total Expenses. In reviewing the advisory fees borne by the Fund, the Directors reviewed information regarding the advisory fees in absolute dollar terms by each category and also total fees relative to assets of the Fund and noted the reasonableness of fees. They also noted that in absolute dollar terms, the Fund’s expenses are low and have remained steady for the last 5 years. They also noted the small size of the Fund makes normal industry comparisons difficult, but noted that the Adviser is not unduly benefiting by any of its relationships to the Fund.
The Directors observed that, in the interest of limiting the expenses of the Fund, the Adviser had voluntarily waived the advisory and administrative fees for 10 years ending January 31, 2011. The Adviser decided to not waive the fees going forward to simplify filings for regulatory purposes.
Profitability of the Adviser. . The Directors considered information prepared by the Adviser with respect to the profitability of its relationship with the Fund. The Directors discussed in detail the analysis presented regarding the Adviser’s profitability. The Directors determined that the Adviser has been running the Fund at losses born by the Adviser.
The Directors agreed that due to the Fund’s small asset size and the fact that the Adviser only manages one Fund, the Fund has not shown profitability to the Advisor.
Ancillary Benefits and Other Factors. The Directors also considered that the Adviser and its affiliates appear to receive no significant benefits other than investment advisory fees as a result of the Adviser’s relationship with the Fund. The Directors observed that the Adviser has not entered any soft dollar, revenue sharing, or directed brokerage arrangements over the last 5 years.
Economies of Scale. The Trustees received and considered information regarding whether there have been economies of scale with respect to the management of the Fund, whether the Fund has appropriately benefited from any economies of scale, and whether there is potential for realization of any further economies of scale. The Trustees noted that the total operating expenses of the Fund contain break-points and, accordingly, reflect the potential that economies of scale may be realized as the Fund grows.
Conclusions. After reviewing various materials and reports provided, the Directors concluded that (i) the Adviser is sufficiently experienced and qualified to provide investment advisory services for the Fund; (ii) the Adviser is committed to the Fund, as evidenced by the fee structure, which is comparable to industry standards, and the fact that the Fund is the Adviser’s only fund client; (iii) Mr. Bhirud is committed to the Fund, as evidenced by his large ownership in the Fund; (iv) the Fund’s expenses and performance are disclosed in the Fund’s registration statement and/or reports to shareholders, allowing investors to make informed decisions about investment in the Fund. The Directors also noted that the Fund has been in existence for a substantial period of time, which shows the commitment of Mr. Bhirud to create superior performance over a long period of time.
In light of the information presented to them and the other factors described above, the Directors concluded, in the exercise of their business judgment, that the fees paid by the Fund under the Advisory Agreement generally appeared reasonable and voted to approve the continuation of the Agreement for the coming year.
Board of Trustees
Suresh L. Bhirud
Timothy M. Fenton
M. John Sterba Jr.
Investment Adviser
Bhirud Associates, Inc.
Dividend Paying Agent,
Shareholders’ Servicing Agent,
Transfer Agent
Mutual Shareholder Services, LLC
Custodian
U.S. Bank, NA
Independent Registered Public Accounting Firm
VB&T CPA, PLLC
This report and the financial statements contained herein are submitted for the general information of shareholders and are not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Nothing herein contained is to be considered an offer of sale or solicitation of an offer to buy shares of Bhirud Funds Inc. Such offering is made only by prospectus, which includes details as to offering price and other material information.
ITEM 2. CODE OF ETHICS
The registrant has adopted a code of ethics that applies to the registrant's principal executive officer and principal financial officer. The registrant has not made any amendments to its code of ethics during the covered period. The registrant has not granted any waivers from any provisions of the code of ethics during the covered period.
A copy of the registrant's Code of Ethics is filed herewith.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT
The registrant's Board of Trustees has determined that it does not have an audit committee financial expert serving on its audit committee. At this time, the registrant believes that the experience provided by each member of the audit committee together offers the registrant adequate oversight for the registrant's level of financial
complexity.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The registrant has engaged its principal accountant to perform audit services, audit-related services, tax services and other services during the past two fiscal years. "Audit services" refer to performing an audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years. "Audit-related services" refer to the assurance and related services by the principal accountant that are reasonably related to the performance of the audit. "Tax services" refer to professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. The following table details the aggregate fees billed for each of the last two fiscal years for audit fees, audit-related fees, tax fees and other fees by the principal accountant.
| FYE 7/31/2010 | FYE 7/31/2011 | # of Hours spent in FYE 2011 |
Audit Fees | $4,000 | $4,000 | 40 |
Audit-Related Fees | $ 0 | $ 0 | 0 |
Tax Fees | $ 0 | $ 0 | 0 |
All Other Fees | $ 0 | $ 0 | 0 |
The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant. All of the principal accountant's hours spent on auditing the registrant's financial statements were attributed to work performed by full-time permanent employees of the principal accountant.
The following table indicates the non-audit fees billed by the registrant's accountant for services to the registrant and to the registrant's investment adviser (and any other controlling entity, etc. not sub-adviser) for the last two years. The Audit Committee of the Board of Trustees has considered whether the provision of non-audit services that were rendered to the registrant's investment adviser is compatible with maintaining the principal accountant's independence and has concluded that the provision of such non-audit services by the accountant has not compromised the accountant's independence.
Non-Audit Related Fees | FYE 7/31/2010 | FYE 7/31/2011 |
Registrant | $0 | $0 |
Registrant’s Investment Advisor | $0 | $0 |
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
Not applicable to open-end investment companies.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES
Not applicable to open-end investment companies.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASES
Not applicable to open-end investment companies.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable to open-end investment companies.
ITEM 10.CONTROLS AND PROCEDURES
(a) The Registrant's President and Treasurer has concluded that the Registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) are effective as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act.
(b) There were no changes in the Registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the Registrant's last fiscal year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 11.EXHIBITS
(a) ANY CODE OF ETHICS OR AMENDMENT THERETO.
Filed herewith.
(b) CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002.
Filed herewith.
(c) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002.
Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Bhirud Funds Inc.
By: /s/ Suresh L. Bhirud
--------------------
Suresh L. Bhirud
Principal Executive Officer
Date: October 7, 2011
By: /s/ Suresh L. Bhirud
--------------------
Suresh L. Bhirud
Principal Financial Officer
Date: October 7, 2011
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the
dates indicated.
Bhirud Funds Inc.
By: /s/ Suresh L. Bhirud
--------------------
Suresh L. Bhirud
Principal Executive Officer
Date: October 7, 2011
By: /s/ Suresh L. Bhirud
--------------------
Suresh L. Bhirud
Principal Financial Officer
Date: October 7, 2011
