NOTE 1--ORGANIZATIONAL MATTERS
Harbor Fund (the "Trust") is registered under the Investment Company Act of 1940, as amended, as an open-
end management investment company, consisting of a series of nine diversified investment portfolios (the
"Funds"), each of which is represented by a separate series of shares of beneficial interest and having an unlimited
number of shares authorized. As of April 30, 1997, the Trust consisted of the following funds: Harbor
International Growth Fund, Harbor Growth Fund, Harbor Capital Appreciation Fund, Harbor International Fund
II, Harbor International Fund, Harbor Value Fund, Harbor Bond Fund, Harbor Short Duration Fund and Harbor
Money Market Fund.
NOTE 2--SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the Trust in the preparation of its
financial statements. The preparation of financial statements in accordance with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those estimates. The policies are in
conformity with generally accepted accounting principles for investment companies.
Equity securities are valued at the last sale price on an exchange or the National Association of Securities Dealers
Automated Quotation ("NASDAQ") system or, in the case of unlisted securities or listed securities for which
there were no sales on the valuation day, the mean between the closing bid and asked price. Securities listed or
traded on foreign exchanges are valued at the last sale price on that exchange on the valuation day, or if no sale
occurs, at the official bid price (both the last sale price and official bid price are determined as of the close of the
London Foreign Exchange).
Except for Harbor Money Market Fund, debt securities, other than short-term securities with a remaining
maturity of less than sixty days, are valued at