NOTES TO FINANCIAL STATEMENTS
(Information as of and for the six months ended November 30, 1996 is unaudited)
American Pension Investors Trust (the "Trust") is organized as a Massachusetts business trust and is registered
under the Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified, open-end
management investment company. It is composed of five separate portfolios. The accompanying financial
statements include only the Capital Income Fund (the "Fund").
The Fund's primary investment objective is to seek to achieve high current income. The Fund's secondary
objective is growth of capital and income. The Fund seeks to achieve its objectives by investing in mutual funds,
at least 65% of which seek to achieve an objective of high current income by investing in income-producing
equity securities, long or short-term bonds and other fixed-income securities (such as U.S. government securities,
commercial paper and preferred stock).
2. Significant Accounting Policies:
a. Portfolio Valuation
The investments of the Fund consist primarily of mutual funds that are valued daily at their respective net asset
values in accordance with the 1940 Act.
b. Security Transactions and Investment Income
Security transactions are accounted for on the trade date. Realized gains and losses from security transactions are
reported on an identified-cost basis for both financial statement and federal income tax purposes. Dividend
income and distributions to shareholders are recorded on the ex-dividend date. Interest income and expenses are
recorded on an accrual basis.
c. Federal Income Taxes
The Trust's policy is for the Fund to comply with the requirements of the Internal Revenue Code that are
applicable to regulated investment companies and to distribute all of its investment company taxable income to its
shareholders. Therefore, no federal income tax provision is required.
As of November 30, 1996, the aggregate cost of investments for federal income tax purposes