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.
3 Thorndal Circle, 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.
3 Thorndal Circle, 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: January 31, 2006
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
C/o Bhirud Funds Inc.
3 Thorndal Circle, Darien, CT 06820
Telephone (203) 662-6659, www.apexfund.net
SEMI ANNUAL REPORT dated January 31st , 2006
(UNAUDITED)
March 21,2006
Performance: The Bottom Line
The line graph below shows how a $10,000 investment in the Fund made on December
23,1992 (the date the fund began to invest in assets other than cash or cash
equivalents in accordance with its investment objectives) would have become
$3,095 (as of January 31,2006). The line graph shows how this compares to the
broad-based Standard & Poor's 500 Index and the Fund's bench mark, the Standard
& Poor's MidCap 400 Index, over the same period.
[GRAPH OMITTED]
Performance Comparison (Average Annual Total Returns - For the periods ended
January 31, 2006)
Six 1 Year 5 Years 10 Years
Months
Apex Mid Cap Growth Fund +6.57 % ** -1.35 % -7.45 % -11.78 %
S&P 500 (reflects no deduction +3.72 % ** +8.36 % -1.29 % +7.24 %
for fees, expenses, or taxes)
S&P 400 (reflects no deduction +8.42 % ** +20.91% +8.15% +13.47 %
for fees, expenses, or taxes)
** Not annualized
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.
Top Ten Holdings Sector Allocation
Company Name % NAV Sectors % NAV
CMGI INC. 8.60 SERVICES 36.11
SINA CORPORATION 5.08 TECHNOLOGY 31.90
HOMESTORE.COM 4.95 NONDURABLES 17.77
NETFLIX INC. 4.51 BASIC 5.39
INDUSTRIES
CIENA CORP 4.37 CONSTRUCTION 4.95
NETEASE COM INC. 3.90 CAPITAL GOODS 2.58
ALKERMES, INC. 3.32 TRANSPORTATION 2.14
PALM ONE 3.23 ENERGY 2.07
RED HAT 3.15
AMERICAN MEDICAL 3.09
SYSTEMS
The above tables gives a top ten holdings and breakdown of the Fund by the
Industry Sectors the underlying securities represent as a percentage of net
assets (NAV).
See accompanying Notes to Financial Statements
SHAREHOLDER EXPENSE EXAMPLE (Unaudited)
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 Funds 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 (August 1, 2005 through January 31, 2006).
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 Funds' actual expense
ratios and an assumed rate of return of 5% per year before expenses, which are
not the Funds' 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 Funds 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.
Fund Beginning Ending Expenses Paid
Account Value Account During Period (*)
Value
August 1, 2005 January 31, August 1, 2005 -
2006 January 31, 2006
Actual (6.57 % $ 1,000 $1,065.69 $33.01
return**)
Hypothetical*** $ 1,000 $ 993.24 $31.85
* Expenses are equal to the Funds' annualized expense ratio of 6.34%,
multiplied by the average account value over the period, multiplied by 184/365
to reflect the one-half year period.
** Returns are with expenses and not annualized.
*** Assumes a 5% annual return before expenses.
See accompanying Notes to Financial Statements
Management's Discussion of Fund Performance
Broadly speaking, the primary sectors in which we are currently invested are
computer peripherals, software, entertainment software, drug and biotechs,
specialty retailers, semiconductors, and telecom related names. Rather than
focusing on sector investing, we remain highly focused on company specific
approach with diversification across a spectrum of growth industries that we
believe best contributes to long-term performance.
Our focus remains on investing in some of the most interesting growth companies
of our times. We emphasize investing in companies whose revenues, earnings, and
market share growing at above normal rates due to the superiority of their
respective business models. It should be noted that our largest holding CMG
Inc. (CMGI), was acquired when total net assets of the fund were significantly
higher than the current level. By default it has ended up being the largest
holding. We chose to hold on to our investment, as in our view these shares
offer significant long term potential.
We remain optimistic regarding the outlook for equity market. We are in an
environment of sustained economic growth. Although inflation is slowly rising,
it remains contained due to the pre-emptive tightening policy adopted by the
Federal Reserve Board. This is one of the factors that have kept long term
interest rates from rising in the current cycle. This benign interest rates
environment is accompanied by strong corporate earnings and cash flow, thus
driving up equity values. Additionally stocks continue to benefit from merger
mania that has been in place for some time.
Over the last 2 years, much of the performance in the stock market was
concentrated in commodity, energy and capital spending related cyclicals. As the
economic cycle and thereby the stock market cycle prolongs, growth stocks are
likely to come back in favor. We remain optimistic regarding the prospect of
APEX.
Sincerely,
Suresh L. Bhirud, CFA
Chairman
See accompanying Notes to Financial Statements
The Apex Mid Cap Growth Fund
Schedule of Investments report Date January 31, 2006(UNAUDITED)
CO. NAME Shares % MV Market
Value
JETBLUE AIRWAYS CORPORATION * 600 7,824
TOTAL AIR TRANSPORT 2.14 7,824
TIVO * 2000 11,020
TOTAL BROADCASTING 3.01 11,020
RHODIA ADR * 3500 9,275
TOTAL CHEMICAL-SPECIALTY 2.53 9,275
CAPSTONE TURBINE * 2000 7,580
TOTAL COAL/ALT ENERGY 2.07 7,580
CRAY INC. * 3000 6,750
PALM ONE * 300 11,844
SILICON STORAGE TECH * 1000 4,820
TOTAL COMPUTER & PERIP. 6.39 23,414
CHINA.COM CORP CLASS A * 1000 3,870
CITRIX SYSTEMS INC. * 200 6,168
CITYVIEW CORP * 10000 210
COMPUTER SCIENCES CORP. * 100 5,070
ELECTONICS FOR IMAGING * 100 2,765
FVC . COM * 3000 0
RED HAT * 400 11,548
VA LINUX SYSTEMS * 1000 1,830
TOTAL COMPUTER SOFTW & SVC 8.59 31,461
EDULINK INC * 40000 0
TOTAL DIVERSIFIED CO 0.00 0
ALKERMES, INC. * 500 12,170
BIOGEN IDEC * 100 4,475
GENEREX BIOTECHNOLOGY CORP * 2000 2,580
ICOS CORP. * 300 7,455
NEKTAR THERAPEUTICS * 500 9,885
VIVUS INC * 8 27
TOTAL DRUG INDUSTRY 9.99 36,592
TASER INTERNATIONAL INCORPO * 1000 9,440
TOTAL ELECTRICAL EQUIPT. 2.58 9,440
ADAPTIVE BROADBAND * 1300 0
JDS UNIPHASE CORP. * 2000 6,240
VPGI CORP * 8500 425
TOTAL ELECTRONICS 1.82 6,665
DIAMOND HITTS PRODUCTION IN * 9000 0
NAPSTER INC * 2000 7,820
NETFLIX INC. * 600 16,530
TOTAL ENTERTAINMENT 6.65 24,350
TALKPOINT LIQUIDATION * 200 0
TOTAL ENVIRONMENTAL 0.00 0
COUER D'ALENE MINES CORP * 1000 5,180
HECLA MINING * 1000 5,280
TOTAL GOLD/SILVER MINING 2.86 10,460
ACCLAIM ENTERTAINMENT INC. * 1000 22
TOTAL HOTEL / GAMING 0.01 22
IDENTIX INC. * 1000 7,990
TOTAL INDUSTRIAL SERVICES 2.18 7,990
See accompanying Notes to Financial Statements
CO. NAME Shares % MV Market
Value
TOM ONLINE INC. * 200 4,766
TOTAL INFORMATION PORTALS 1.30 4,766
CMG INFORMATION SERVICES * 21000 31,500
TOTAL INVESTMENT CO. (DOM) COMP. 8.60 31,500
AMERICAN MEDICAL SYSTEMS HO * 500 11,330
TOTAL MEDICAL SUPPLIES 3.09 11,330
JPC CAP PARTNERS INC * 116 0
TOTAL MISCELLANEOUS 0.00 0
STAMPS.COM * 300 8,553
TOTAL OFFICE EQUIP & SUP 2.34 8,553
SINA CORPORATION * 800 18,616
TOTAL ONLINE MEDIA 5.08 18,616
NETEASE COM INC. * 200 14,280
SHANDA INTERACTIVE ENTERTAI * 500 8,375
TOTAL ONLINE SERVICES -GAMING 6.19 22,655
HOMESTORE.COM * 3000 18,120
TOTAL REAL ESTATE INVESTME 4.95 18,120
CARMAX INC. * 300 8,967
EGGHEAD.COM * 4260 0
GSV INC * 200 24
LOUDEYE CORP * 10000 3,920
PRICELINE.COM * 400 8,820
TOTAL RETAIL SPECIALTY 5.93 21,731
MOTOROLA INC. * 200 4,542
POWERWAVE TECHNOLOGIES * 100 1,461
TRANSMETA CORPORATION * 8000 11,200
XILINX INC. * 300 8,448
TOTAL SEMICONDUCTOR 7.00 25,651
CIENA CORP * 4000 16,000
PHAZAR CORP. * 300 5,073
TOTAL TELECOM. EQUIPMENT 5.75 21,073
KOREA THRUNET CO LTD. * 12 0
RESEARCH IN MOTION * 100 6,753
TOTAL TELECOM. SERVICES 1.84 6,753
TOTAL COMMON STOCKS 102.89 376,841
TOTAL INVESTMENTS 102.89 376,841
OTHER ASSETS (LESS LIABILITIES) -2.89 -10,600
NET ASSETS 100.00 366,241
NET ASSETS VALUE PER SHARE 1.46
OFFERING PRICE PER SHARE 1.46
* Non - income producing securities
See accompanying Notes to Financial Statements
THE APEX MID CAP GROWTH FUND
STATEMENT OF ASSETS AND LIABILITIES For the six months ended January 31st , 2006
(UNAUDITED)
ASSETS
Investment Securities at Value $ 376,841
(Identified cost - $ 795,581) (Note 1)
Securities Sold 14,105
Prepaid Insurance 271
Total Assets $391,217
LIABILITIES
Cash - Overdraft (1,264)
Securities Purchased (13,534)
Accrued expenses (10,178)
Total Liabilities ($ 24,976)
NET ASSETS (Equivalent to $1.46 per share $ 366,241
based on 250,707 shares outstanding)
COMPOSITION OF NET ASSETS:
Paid in Capital $3,311,613
Distribution in excess of accumulated Net (2,526,632)
Realized gain (loss)
Accumulated Net Investment Income --
Net Unrealized Appreciation (Depreciation) (418,740)
of Investments
Total Net Assets $ 366,241
STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JANUARY 31, 2006
INVESTMENT INCOME
Interest $ 0
Dividends 0
EXPENSES
Audit $ 2,000
Fund Accounting 2,400
Transfer Agent 1,200
Shareholder Report 48
Director 3,000
Registration 50
Insurance 311
Fund Administration (Note 4) 394
Custodian 3,000
Investment Advisor (Note 4) 1,972
12b-1 Fees (Note 6) 493
Total Expenses (14,868)
Expense Reimbursement/ waived by Advisor 2,366
(Note 4)
Expense net of Reimbursement/ waiver (12,502)
NET INVESTMENT GAIN (LOSS) (12,502)
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS
Net Realized Gain (Loss) on Investments (441,653)
Change in Unrealized Appreciation 479,353
(Depreciation) of Investments
NET REALIZED/UNREALIZED GAIN (LOSS) ON INVESTMENTS 37,700
NET INCREASE (DECREASE) IN NET ASSETS 25,198
RESULTING FROM OPERATION
See accompanying Notes to Financial Statements
THE APEX MID CAP GROWTH FUND
STATEMENT OF CHANGES IN NET ASSETS FOR EACH PERIOD (UNAUDITED)
For the Six For the Year
Months Ended Ended
January 31, 2006 July 31, 2005
INCREASE (DECREASE) IN NET ASSETS
Net Investment Income/ (loss) $ (12,502) $ (34,961)
Net Realized Gain / (loss) on (441,653) (668,374)
investment Securities Sold
Net unrealized 479,353 653,468
appreciation/(depreciation) of
Investments
Net Increase (Decrease) in Net $ 25,198 $ (49,867)
Assets Resulting from Operations
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Dividend distributions paid 0 0
Capital Gains 0 0
Total Distributions 0 0
CAPITAL SHARE TRANSACTIONS
Shares Sold 6,100 4,250
Shares issued in lieu of Cash 0 0
Distributions
Cost of shares Redeemed (120,447) (535,288)
Increase (Decrease) in Net Assets (114,347) (531,038)
Due to Capital Share Transactions
TOTAL INCREASE (DECREASE) IN NET
ASSETS (89,149) (580,905)
NET ASSETS BEGINNING OF PERIOD 455,390 1,036,295
NET ASSETS END OF PERIOD $ 366,241 $ 455,390
FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD (UNAUDITED)
For the For the For the For the For the
Six Year Year Year Year
Months Ended Ended Ended Ended
Ended
January July July July July
31, 31, 31, 31, 31,
2006 2005 2004 2003 2002
NET ASSET VALUE, BEGINNING OF $1.37 $1.51 $1.65 $0.79 $1.31
PERIOD
Income/(Loss) from Investment
Operations:
Net Investment (0.05) (0.10) (0.02) (0.09) (0.15)
Income/(Loss)
Net Gain/(Loss) on 0.14 (0.04) (0.12) 0.95 (0.37)
Securities (Both Realized and
Unrealized)
Total from Investment 0.09 (0.14) (0.14) 0.86 (0.52)
Operations
Distributions:
Dividend Distributions Paid 0.00 0.00 0.00 0.00 0.00
Distributions from Capital 0.00 0.00 0.00 0.00 0.00
Gains
Total Distributions 0.00 0.00 0.00 0.00 0.00
NET ASSET VALUE, END OF $ 1.46 $ 1.37 $ 1.51 $ 1.65 $ 0.79
PERIOD
Total Return 6.57** (9.27)% (8.48)% 108.86% (39.69)%
Ratios/Supplemental Data:
Net Assets, End of Period $ 366 $ 455 $ 1,036 $ 817 $ 230
(in thousands)
Ratios to Average Net
Assets:
Expenses 3.76%** 4.68% 3.35% 9.19% 12.42%
**
Net Investment (3.16)%** (4.56)% (3.24)% (8.67)% (12.31)%
Income/(Loss)
Effect of
Reimbursements/Waivers on 0.60%** 1.20% 1.20% 1.20% 1.20%
Above - Ratios
Portfolio Turnover Rate 198.92%** 161.01% 189.97% 128.42% 117.18%
** Not annualized
See accompanying Notes to Financial Statements
THE APEX MID CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTH ENDED JANUARY 31, 2006 (UNAUDITED)
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. The following is a summary of significant accounting
policies followed by the Fund:
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.
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.
CAPITAL LOSS CARRY FORWARDS
The Fund intends to utilize provisions of the federal income tax laws which
allows it to carry a realized capital loss for eight years following the
year of loss and offset such losses against any future realized capital
gains. At July 31, 2005, the Fund had capital loss carry forward for tax
purposes of $ 1,667,143, of which $442,745 expires in 2009, $204,042
expires in 2010, $112,094 expires in 2011, $239,888 expires in 2012, and
$668,374 expires in 2013.
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 the six months ended January 31, 2006 were as follows:
For the six months For the Year Ended
Ended July 31, 2005
January 31,2006
Shares Amount Shares Amount
Beginning Balance 332,384 $ 3,460,921 688,228 $4,029,909
Shares Sold 4,365 6,100 3,120 4,250
Shares Issued in 0 0 0 0
Reinvestment of Dividends
Shares Redeemed (86,042) (120,447) (358,964) (535,288)
Reclassification of 0 (34,961) 0 (37,950)
Capital Account
Net Increase (Decrease) (81,677) (149,308) (355,844) (568,988)
Ending Balance 250,707 $3,311,613 332,384 $3,460,921
THE APEX MID CAP GROWTH FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTH ENDED JANUARY 31, 2006 (UNAUDITED)
3. INVESTMENTS
Purchases and sales of securities for the six months ended January 31, 2006
other than short-term securities, aggregated $835,729 and $1,020,885,
respectively. The cost of securities is substantially the same for Federal
income tax purposes. For Federal income tax purposes:
Aggregate Cost is $795,581
Gross Unrealized Gross Unrealized Net Unrealized
Appreciation Depreciation Depreciation
$25,589 $(444,329) $(418,740)
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. The Advisor has voluntarily agreed to reimburse the Fund
in the event the Fund's expenses exceed certain prescribed limits. During
the six months ended January 31, 2006 the Advisor elected to defer the
payment of Advisory fees payable in the amount of $ 1,972. The Advisor has
voluntarily agreed to waive these fees, considering the small assets of the
Fund. 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. During the six months ended January 31, 2006 the
Administrator elected to defer the payment of Administrative service fees
payable in the amount of $ 394.
From December 1, 1996, the U.S. Bank has been providing custodian services
and from February 1st, 1998, fund accounting and transfer agency functions
are provided by Mutual Shareholders Services LLC.
5. ORGANIZATION EXPENSES
The organizational expense was amortized over the first five years of the
Fund's operations and is now zero going forward.
6. 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
thereunder. 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 six months ended
January 31, 2006, the Fund has incurred distribution costs of $ 444 payable
to Bhirud Associates, Inc.
7. TRANSACTIONS WITH AFFILIATES
During the six months ended January 31, 2006 the Fund paid $10,174,
brokerage commissions to Bhirud Associates, Inc.
8. RECLASSIFICATION OF CAPITAL ACCOUNTS
In accordance with generally accepted accounting principals, the Fund
recorded reclassifications in the capital accounts. The Fund recorded a
permanent book/tax difference of $(34,961) as of July 31, 2005, from
undistributed net investment income to paid in capital. These
reclassifications have no impact on net asset value of the Fund and are
designed generally to present undistributed income and realized gains on a
tax basis which is considered to be more informative to the shareholder.
THE APEX MID CAP GROWTH FUND
C/o Bhirud Funds Inc.
3 Thorndal Circle, 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 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 Principal Occupations
of Time Served During Past 5 Years,
Directorship Held
Officers and
Interested Directors
Suresh L. Bhirud, 57 Chairman of the Board Chairman of the Board
27 Winding Lane. and Treasurer since and Treasures;
Darien, CT 06820 August 6,1992 President of Bhirud
President since July Associates, Inc.
23, 2002
Harish L. Bhirud, 52 Director since April Director and Vice-
71 Strawberry Hill 7, 1997 President of Bhirud
Ave., #607 Vice President since Funds Inc.
Stamford, CT 06902 January 24, 1995 Vice-President-Bhirud
Chief Compliance Associates, Inc.
Officer since
September 22, 2004
Disinterested Directors
Timothy M. Fenton,62 Director since August Licensed Realtor with
6, 1992 William Raveis, Since
6 Jackson Dr. August 2002.
Norwalk, CT 06851 Chairman of Fenton &
Zalenetz Inc., a
direct marketing
consulting firm.
M. John Sterba, Jr., Director since August Chairman of
62 6,1992 Investment Management
Investment Mgmt Advisors, Inc.
Advisors Inc.
41 Madison Avenue,
33rd Floor
New York, NY 10010
Alexander Norman Director since August Independent
Crowder, III, 70 6,1992 Management
159 East Ave. Consultant, Since
New Canaan, CT 06840 1991 and part time
Chairman of EFI
Actuaries, Inc.
Investment Advisor & Distributor Bhirud Associates, Inc.
Administrator Bhirud Associates, Inc.
Custodian US Bank, N.A.
Legal Counsel Sherman & Sterling
Independent Auditors VB&T CPA, PLLC
OTHER ITEMS - 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.
Quarterly Filing of Portfolio Holdings:
The Fund files its complete schedule of portfolio holdings with the SEC for
the first and third quarters of each fiscal year on Form N-Q. The Fund's
Forms N-Q are available on the SEC's Website at http://www.sec.gov.
The Fund's Forms N-Q may also be reviewed and copied at the SEC's
Public Reference Room in Washington, DC. Information on the operation
of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
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.
Not applicable to Semi-Annual Reports for the period
ended January 31, 2006.
Item 3. Audit Committee Financial Expert.
Not applicable to Semi-Annual Reports for the period
ended January 31, 2006.
Item 4. Principal Accountant Fees and Services
Not applicable
Item 5. Audit Committee of Listed Companies. Not applicable.
Item 6. Schedule of Investments.
Not applicable
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.
Not applicable.
Item 8. Purchases of Equity Securities by Closed-End Funds. Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
There were no material changes to the procedure by which shareholders may
recommend nominees to the Fund's Board of Trustees.
Item 10. Controls and Procedures.
(a) Based on an evaluation of the registrant's disclosure controls and
procedures as of 1/31/2006 [within 90 days of filing date of this
Form N-CSR], the disclosure controls and procedures are reasonably designed to
ensure that the information required in filings on Forms N-CSR is recorded,
processed, summarized, and reported on a timely basis.
(b) There were no significant changes in the
registrant's internal control over financial reporting that occurred during the
registrant's last fiscal half-year that have materially affected, or are
reasonably likely to materially affect, the registrant's internal control over
financial reporting.
Item 11. Exhibits
(a) (1) Not applicable.
(a) (2) Certification pursuant to Rule 30a-2(a) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached
hereto as Exhibit 99.CERT.
(a) (3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment
Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and
attached hereto as Exhibit 99.906CERT.
SIGNATURES
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
President and Treasurer
Date March 21, 2006