<PAGE>





                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

       [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
                              EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 2002

                                       OR

              [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
      For the transition period from               to
                                    ------------- -------------------

                         Commission File Number 0-26459

                      THE FULCRUM FUND LIMITED PARTNERSHIP
             (Exact name of registrant as specified in its charter)

      CONNECTICUT                                     06-1456461
      -----------                                     ----------
(State or other jurisdiction                (I.R.S. Employer Identification No.)
of incorporation or organization)

       TWO AMERICAN LANE, P.O. BOX 5150, GREENWICH, CONNECTICUT 06831-8150
               (Address of principal executive offices) (zip code)

       Registrant's telephone number, including area code: (203) 861-1000

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:

                          LIMITED PARTNERSHIP INTERESTS
                                (Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]  No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

Yes [ ]      No  [X]

The registrant has no outstanding voting or non-voting common equity.

DOCUMENTS INCORPORATED BY REFERENCE

None.


<PAGE>
                      THE FULCRUM FUND LIMITED PARTNERSHIP


                                      INDEX


<TABLE>
<CAPTION>
                                                                                              PAGE
                                                                                              ----
<S>           <C>                                                                             <C>
PART I
Item 1.       Business                                                                          3
Item 2.       Properties                                                                       17
Item 3.       Legal Proceedings                                                                17
Item 4.       Submission of Matters to a Vote of Security Holders                              17

PART II
Item 5.       Market for Registrant's Common Equity and Related Stockholder Matters            17
Item 6.       Selected Financial Data                                                          18
Item 7.       Management's Discussion and Analysis of Financial Condition and                  20
              Results of Operations
Item 7A.      Quantitative and Qualitative Disclosures About Market Risk                       24
Item 8.       Financial Statements and Supplementary Data                                      25
Item 9.       Changes in and Disagreements with Accountants on Accounting and                  25
              Financial Disclosure

PART III
Item 10.      Directors and Executive Officers of the Registrant                               25
Item 11.      Executive Compensation                                                           27
Item 12.      Security Ownership of Certain Beneficial Owners and Management and Related
              Stockholder Matters                                                              27
Item 13.      Certain Relationships and Related Transactions                                   27
Item 14.      Controls and Procedures                                                          27

PART IV
Item 15.      Exhibits, Financial Statement Schedules and Reports on Form 8-K                  28

SIGNATURES
Signatures                                                                                     30

FINANCIAL STATEMENTS AND SCHEDULE                                                             F-1
</TABLE>


                                       2

<PAGE>

PART I

ITEM 1.           BUSINESS.

         The discussion below and elsewhere in this Form 10-K contains "certain
forward-looking statements" (as such term is defined in Section 21E of the
Securities Exchange Act of 1934, as amended (the "1934 Act")) that are based on
the beliefs of the Partnership (as defined below), as well as assumptions made
by, and information currently available to, the Partnership. A number of
important factors could cause the Partnership's actual growth, results,
performance and business prospects and opportunities in 2003 and beyond to
differ materially from those expressed in, or implied by, any such
forward-looking statements. These factors include, without limitation, the
factors described below and elsewhere in this Annual Report on Form 10-K.

OVERVIEW

         The Fulcrum Fund Limited Partnership (formerly known as the Dennis Fund
Limited Partnership and referred to herein as the "Partnership") was formed as a
limited partnership on June 18, 1996 under the Connecticut Uniform Limited
Partnership Act (the "Partnership Act"). The Partnership maintains its principal
office at Two American Lane, P.O. Box 5150, Greenwich, Connecticut 06831-8150,
with a telephone number of (203) 861-1000. The Partnership is engaged in the
business of trading, buying, selling, spreading, swapping or otherwise
acquiring, holding or disposing of commodities, futures contracts, forward
contracts, foreign exchange commitments, exchange for physicals, swap contracts,
spot (cash) commodities and other items, options on the foregoing, and any
rights pertaining to the foregoing contracts, instruments or investments
throughout the world ("Commodities"). The objective of the Partnership's
business is appreciation of its assets through the speculative trading of
Commodities. Although currently the Partnership's activities are intended to be
limited to trading Commodities and investing capital not needed for margin
purposes in securities approved by the Commodity Futures Trading Commission (the
"CFTC") for investment of customer funds, the Limited Partnership Agreement of
the Partnership, dated June 18, 1996 and as amended on December 15, 1997 (the
"Partnership Agreement"), also permits the Partnership to trade (i) any security
as defined in Section 2(1) of the Securities Act of 1933, as amended (the "1933
Act"), (ii) any option, warrant or other right on or pertaining to any of the
foregoing, whether in the United States of America or anywhere else throughout
the world, and (iii) any other investment or transaction that the General
Partner (as defined herein) deems, in its sole discretion, to be consistent with
the objectives of the Partnership (with Commodities, collectively, the
"Investments").

         In June 1996, the Partnership commenced a private placement of units of
limited partnership interest ("Units") in reliance on the exemptions afforded
by, among others, Section 4(2) of the 1933 Act and Rule 506 of Regulation D
promulgated thereunder. Investments made prior to April 30, 1997 are referred to
as "A Units" and investments made on or after April 30, 1997 are referred to as
"B Units". The initial net asset value per B Unit was the net asset value per A
Unit at April 30, 1997. The only difference between A Units and B Units are the
advisor management and incentive fee rates in effect prior to November 1, 2000.
On January 1, 2001, A Units and B Units were converted into a single Unit
utilizing the Net Asset Value per B Unit on December 31, 2000 of $1,145.25. The
amounts reflected in the financial statements assume this conversion into a
single Unit occurred on December 31, 2000. Accordingly, the total number of
outstanding Units at December 31, 2000 was 19,348.2327.

         Units are offered at a price per Unit equal to the then-current Net
Asset Value per Unit (as defined below) plus a selling commission equal to 5%
unless such selling commission is waived in whole or in part by the General
Partner. Since the Partnership began the private placement in 1996, through
December 2002, 46,403 Units had been sold for a total of $70,331,726. The
minimum subscription is


                                        3

<PAGE>

$26,250 for new investors other than Employee Benefit Plans (as defined herein)
or $10,500 for Employee Benefit Plans and existing limited partners of the
Partnership ("Limited Partners"), which amounts include selling commissions of
$1,250 and $500 respectively. "Net Asset Value" of the Partnership in general
means total assets of the Partnership, including, but not limited to, all cash
and cash equivalents, accrued interest, earned discount, and open Commodities
positions, less total liabilities, including, but not limited to, brokerage
commissions that would be payable with respect to the closing of open
Commodities positions, all as determined in accordance with the principles set
forth in the Partnership Agreement or, where no such principles are specified
therein, in accordance with United States generally accepted accounting
principles applied on a consistent basis ("GAAP"). "Net Asset Value per Unit"
means the Net Asset Value of the Partnership divided by the number of Units
outstanding as of the date of determination. The value of all Commodities shall
be the market value thereof. The market value of a Commodity traded on an
exchange shall be based upon the settlement price on the exchange on the date of
determination; provided, however, that if a Commodity could not be liquidated on
the day with respect to which the assets of the Partnership are being
determined, the settlement price on the first subsequent day on which the
contract could be liquidated shall be the basis for determining the liquidating
value thereof. The market value of a forward contract, a swap contract, or any
other off-exchange contract, instrument, or transaction shall mean its market
value as determined by the General Partner on a basis consistently applied.

         Investors receive a Confidential Private Placement Memorandum and
Disclosure Document (the "Disclosure Document") which sets forth the material
terms of the investment. The Disclosure Document is updated every nine (9)
months or upon any material change (whichever is sooner), as required by the
regulations promulgated under the Commodity Exchange Act, as amended (the "CE
Act"), and filed with the CFTC for compliance therewith.

         Since October, 1996, the Partnership has engaged in the speculative
trading of Investments and will continue to do so until its dissolution and
liquidation, which will occur on the earlier of December 31, 2026 or the
occurrence of any of the events set forth in Article VIII, Section 8.1 of the
Partnership Agreement.

         The Partnership's general partner, Kenmar Advisory Corp. (the "General
Partner"), is a Connecticut corporation formed in September 1983 as a New York
corporation and subsequently reorganized as a Connecticut corporation in January
1996. Kenneth A. Shewer is its Chairman, and Marc S. Goodman is its President.
Messrs. Shewer and Goodman are the General Partner's sole directors. All of the
General Partner's stock is owned directly by Kenmar Holdings Inc., which is
ultimately owned, indirectly and equally, by Messrs. Shewer and Goodman. The
General Partner has been registered with the CFTC as a commodity pool operator
("CPO") and has been a member in good standing of the National Futures
Association (the "NFA") in such capacity since February 1984. The registration
of the General Partner with the CFTC and its membership in the NFA must not be
taken as an indication that any such agency or self-regulatory body has
recommended or approved either the General Partner or the Partnership.

         Under the Partnership Agreement, responsibility for managing the
Partnership is vested solely in the General Partner. The Limited Partners will
not participate in the management or operations of the Partnership. Any
participation by a Limited Partner in the management of the Partnership may
jeopardize the limited liability of such Limited Partner. Responsibilities of
the General Partner include, but are not limited to, the following: selecting
and monitoring the commodity broker(s); determining whether the Partnership will
make distributions; administering redemptions of Units; preparing periodic and
annual reports to the Limited Partners; preparing reports, filings,
registrations, and other documents required by applicable regulatory bodies,
exchanges or boards; depositing the Partnership's assets in the form of cash in
an account or accounts at banks or brokers selected by the General Partner;
borrowing money (but only


                                       4

<PAGE>
in connection with making or taking delivery of a Commodity); directing the
investment of the Partnership's assets; executing various documents on behalf of
the Partnership and the Limited Partners pursuant to the power of attorney
described below; and supervising the liquidation of the Partnership if an event
causing termination of the Partnership occurs. To facilitate the execution of
various documents by the General Partner on behalf of the Partnership, each of
the Limited Partners appoints the General Partner, with full power of
substitution, such Limited Partner's attorney-in-fact by executing the Signature
Page of the Partnership Agreement and Power of Attorney and by becoming a
Limited Partner.

         The Partnership itself does not have any employees. Rather, the General
Partner, in its capacity as a CFTC-regulated CPO, employs 35 persons as of
December 31, 2002 and provides the Partnership with the services of certain
personnel to conduct its operational activities.

         Effective November 1, 2000, the commodity trading advisor ("CTA") to
the Partnership is the Meka Program of Beacon Management Corporation ("Beacon"),
a Delaware corporation and registered CTA and CPO (the "Advisor"). Prior to that
time, the Partnership's commodity trading advisor was the Dennis Trading Group.
The Advisor is responsible for making the trading decisions for the Partnership.
In addition, the Partnership, effective November 1, 2000, hired the Volatility
Hedge Program of Stonebrook Structured Products, LLC ("Stonebrook"), an overlay
program designed to hedge the positions of traditional trend-following programs
during periods identified by Stonebrook's systems as "high risk." This overlay
program was eliminated in October 2001. Investors should note that the Advisor
is the sole advisor for the Partnership.

         The Partnership is not an operating company with "traditional" income
or expenses. It is a stand-alone investment vehicle that offers investors the
opportunity to participate in the futures markets under the guidance of a
professional CTA.

         The General Partner has complete discretionary authority regarding the
admission of additional Limited Partners and may admit additional Limited
Partners under terms and conditions comparable to or different from those under
which the existing Limited Partners were solicited.

FEES AND EXPENSES

         All owners of Units pay the same Advisor fees as described below.

FEES TO THE GENERAL PARTNER

         OFFERING FEE. For managing the continuing offering of Units, as of the
end of each month, the Partnership currently pays to the General Partner a fee
(the "Offering Fee") equal to 0.25% (3% annually) of that month's beginning Net
Asset Value of the Partnership except that the Offering Fee for Million Dollar
Investors will equal 0.0833% (1% annually) of each month's beginning Net Asset
Value of the Partnership. A Million Dollar Investor will be charged the reduced
Offering Fee by receiving a rebate equal to two-thirds of the Offering Fee. The
amount of this reduction will be rebated monthly by the General Partner to the
Partnership for the benefit of such Million Dollar Investor in the form of
additional Units. A "Million Dollar Investor" is an investor whose aggregate
investment in the Partnership (net of redemptions and excluding any appreciation
and/or depreciation in Net Asset Value) equals or exceeds $1,000,000. The
General Partner, in its sole and absolute discretion, will determine whether an
investment or series of investments qualifies for treatment as a Million Dollar
Investor. The General Partner, in its sole discretion, is authorized to set its
compensation for managing the continuing offering of Units. For additional
information on the General Partner's authority, see "Conflicts of Interest --
The General Partner" below.


                                       5

<PAGE>

         ADVISORY FEES. As compensation for managing the Partnership, the
General Partner currently receives 22.5% of the management and incentive fee of
the Advisor.

         Out of all compensation paid to the General Partner, the General
Partner may also pay selling agents additional selling compensation and/or
compensation for ongoing services up to 3% annually.

FEES TO THE ADVISOR

         MANAGEMENT FEES. Pursuant to the Advisory Agreement (as defined
herein), the Partnership currently pays to the Advisor a monthly management fee
(the "Management Fee"). The monthly Management Fee is equal to 1/12 of 2% (2%
annually) of the month-end Net Asset Value of the Partnership. The Management
Fees paid for the years ended December 31, 2002, 2001, 2000, 1999 and 1998 are
set forth in a table on page 7 of this Form 10-K.

         INCENTIVE FEES. Pursuant to the Advisory Agreement, the Partnership
currently pays to the Advisor a quarterly incentive fee equal to 20% of the Net
New Trading Profits. During the period November 1, 2000 to March 31, 2001, the
General Partner waived its right to all incentive fees to which it was entitled
from Beacon and Stonebrook. Accordingly, such incentive fees were not ultimately
charged to the Partnership, and the gross amount of advisor incentive fees
reflected in the statements of operations has been reduced after total expenses
by the advisor incentive fees waived which amounted to $123,124, and $134,396
during the years ended December 31, 2001, and 2000, respectively. Subsequent to
this time, the General Partner resumed its collection of incentive fees. As a
result of its termination, effective October 21, 2001, Stonebrook ceased to be
eligible to receive incentive fees. For the year ended 2002, the General Partner
did not collect any incentive fees from the Partnership. The incentive fees paid
for the years ended December 31, 2002, 2001, 2000, 1999, and 1998 are set forth
in a table on page 8 of this Form 10-K.

         "Net New Trading Profits" in general means the net trading profits
(realized and change, if any, in unrealized) earned on the Partnership's net
assets (excluding interest or interest-equivalent income), decreased by
brokerage commissions (paid and change, if any, in accrued) and the Management
Fee, with all such items determined from the first day of the calendar quarter
that immediately follows the last calendar quarter for which an incentive fee
was earned by the Advisor (or, if no incentive fee was earned previously by the
Advisor, from the commencement of trading) to the close of business on the last
day of the calendar quarter with respect to which such incentive fee calculation
was made. Operating expenses of the Partnership do not reduce Net New Trading
Profits when calculating the Advisor's incentive fee.

         Pursuant to arrangements between the Advisor and the General Partner:
(i) the Advisor receives 77.5% and the General Partner 22.5% of the management
and incentive fees payable to the Advisor, (ii) Stonebrook received all of the
management fees payable to Stonebrook, and (iii) the General Partner received
100% of the incentive fees payable to Stonebrook.

OTHER FEES AND EXPENSES

         BROKERAGE COMMISSIONS. The Partnership's current brokerage commission
expense range from $10 to $14 per roundturn transaction plus administrative
"give-up" fees.

         ADMINISTRATIVE AND ONGOING OPERATING FEES AND EXPENSES. The Partnership
will pay all administrative and ongoing operating fees and expenses. Ordinary
administrative expenses include, but are not limited to, accounting, auditing,
record keeping, administration, computer and clerical expenses (including
expenses incurred in preparing reports and tax information to Limited Partners
and regulatory authorities, printing and duplication expenses and mailing
expenses), legal fees and expenses and other expenses incurred by such persons
and by the General Partner and its affiliates in providing services to



                                       6

<PAGE>

the Partnership. Legal fees and expenses include outside counsel's fax and
copying charges and other disbursements (such as filing fees, whether paid by
the General Partner or outside counsel). Such fees and expenses were
approximately 1.4% (annualized) of the Net Asset Value of the Partnership for
2002.

         EXTRAORDINARY EXPENSES. The Partnership is responsible for all
extraordinary expenses (e.g., litigation expenses) incurred on behalf of the
Partnership. As of December 31, 2002, the Partnership has not paid, and does not
anticipate paying, any extraordinary expenses.

OTHER EXPENSES OF THE LIMITED PARTNERS

         Although not an expense of the Partnership, investors may be subject to
a selling commission, payable to independent selling agents, equal to 5% of the
then-current Net Asset Value per Unit unless the payment of all or any portion
of such amount is waived.

         The Partnership furnishes each subscriber with monthly statements and a
certified annual report of financial condition covering certain aspects of the
Partnership's operations.

         The following chart reflects the actual fees and expenses for the
periods presented.


<TABLE>
<CAPTION>
                              2002          2001         2000          1999           1998
                       --------------------------------------------------------   -------------
<S>                    <C>              <C>           <C>           <C>           <C>
Brokerage
   Commissions            $  367,171    $  707,365    $4,349,404    $2,676,283    $1,400,182

Management Fees              240,870       560,105       746,501       877,660       482,628

Incentive Fees (net of
waived fees)                       0       424,094       462,919     2,103,117     3,229,070

General Partner's
    Offering Fees            360,034       598,204     1,208,141     1,461,667       748,537

Operating Expenses           163,596       162,078       348,230       243,034       135,589
</TABLE>

CONFLICTS OF INTEREST

         There are substantial and inherent conflicts of interest in the
structure of the Partnership which are, on their face, inconsistent with the
fiduciary duties of the General Partner. Prospective investors should be aware
that the General Partner presently intends to assert that Limited Partners have,
by investing in the Partnership, consented to the following conflicts of
interest in the event of any proceeding alleging that such conflicts violated
any duty owed by the General Partner and its affiliates to investors.

THE GENERAL PARTNER

         The General Partner, in its sole discretion, is authorized under the
Partnership Agreement to set the compensation it shall receive for its services
as general partner of the Partnership. The General Partner may change its
compensation to such amount and/or in such forms as the General Partner, in its
sole discretion, shall determine without the consent of the Limited Partners;
provided that the General Partner has given the Limited Partners ninety (90)
days' prior written notice of such change. As such, the General Partner has a
conflict of interest between limiting fees paid by the Partnership and
generating fees for itself.


                                       7

<PAGE>

         The General Partner currently manages other commodity pools and managed
accounts, each with a different combination of trading advisors, and intends to
continue to solicit and manage the trading for these other commodity pools and
managed accounts. Thus, the General Partner may be subject to conflicting
demands in respect of allocating management time, services and other functions
between the activities the General Partner has undertaken with respect to the
Partnership and the activities the General Partner has undertaken or will
undertake with respect to other investors, commodity pools, managed accounts
and/or trading advisors. As another consequence, the greater the amount of
assets managed by the General Partner, the more difficult it may be for the
General Partner to maintain the quality of these services.

         The General Partner and the Broker (as defined herein) maintain a
business relationship unrelated to their efforts on behalf of the Partnership.
Thus, the General Partner has a conflict between its responsibility to negotiate
an amount and form of compensation to be paid to the Broker that best serves the
Partnership's interests and the General Partner's desire to maintain its
business relationship with the Broker. In addition, the General Partner receives
a brokerage commission rebate from the Broker.

         The General Partner and the Advisor maintain a business relationship
unrelated to their efforts on behalf of the Partnership. A substantial amount of
the assets under the management of the Advisor are assets of pools and accounts
managed by the General Partner or an affiliate. Thus, the General Partner has a
conflict between its responsibility to negotiate an amount and form of
compensation to be paid to the Advisor that best serves the Partnership's
interests and the General Partner's desire to maintain its business relationship
with the Advisor.

         Neither the General Partner nor any of its affiliates, principals,
directors, officers or employees (the "Related Persons") trade Commodities for
their own accounts, although it is possible that they may do so in the future.
The records of such trading and any written policies related thereto would not
be available to the Limited Partners. If the General Partner or a Related Person
were to trade for their own accounts, they could take positions either similar
or opposite to positions taken by the Partnership, and/or the Partnership and
such Related Persons could from time to time be competing for similar
Commodities. Orders placed by the General Partner or a Related Person to trade
Commodities for their proprietary accounts may reach the market either before or
after similar orders are placed for the Partnership and this difference in
timing may result in the Partnership receiving less favorable (or more
favorable) prices than those received by such proprietary accounts. Neither the
General Partner nor any Related Person places orders for the Advisor and,
therefore, neither the General Partner nor any Related Person has control over
such timing. It is also possible that the positions taken by such proprietary
accounts may not be held for the same period of time as those positions taken by
the Partnership. Thus, it is unlikely that trading results in such proprietary
accounts would be the same as the performance in the Partnership's account.

         The Partnership and the General Partner are affiliated entities and are
represented by the same counsel, Katten Muchin Zavis Rosenman, Chicago,
Illinois. No independent experts or professionals have been retained on behalf
of the Limited Partners. To the extent that Limited Partners would benefit by
further independent representation, that benefit will not be available to
Limited Partners and they are advised to seek independent counsel.

THE ADVISOR

         The Advisory Agreement (as defined herein) allows the Advisor and its
principals to manage other commodity pools and managed accounts as well as trade
for its own proprietary accounts. Since the Advisor trades other accounts, the
Advisor is subject to conflicting demands in respect of allocating management
time, services and other functions between the Partnership and such other
accounts. In particular, the Advisor may have a conflict of interest when
rendering advice to the Partnership because


                                       8

<PAGE>

its compensation for managing some other account may differ from its
compensation for managing the Partnership's account, and therefore may provide
an incentive to favor such other account.

         The Advisor may in the future develop and furnish to, or employ on
behalf of, other investors trading methods or strategies for trading similar to
or different from those employed and traded on behalf of the Partnership's
account and pursuant to which such other investors may take positions similar to
or opposite from positions taken by the Partnership. No assurance may be given
that the trading results in such other accounts will be the same as or similar
to the performance in the Partnership's account.

         The Advisor and its employees trade Commodities for their own accounts.
The records of such trading and any written policies related thereto will not be
available for inspection by Limited Partners. Such trading activity could differ
from the trading activity of the Partnership. For example, the trading positions
taken and the length of time such positions are held by the Partnership could
differ from those taken with respect to such proprietary accounts. In addition,
such proprietary accounts could be charged brokerage commissions in a
significantly different form and amount than those charged the Partnership and,
as a result, the Advisor could be more or less likely to modify, liquidate or
open a position for that account than for the Partnership's account. Orders for
trades for such proprietary accounts could be placed either before or after
similar orders are placed for the Advisor's investor accounts, and this
difference in timing could result in the investor accounts receiving less
favorable (or more favorable) prices than those received by such proprietary
accounts. Thus, no assurance may be given that the trading results in such
proprietary accounts will be similar to the performance in the Partnership's
account.

         The CFTC and certain United States commodity exchanges have established
"speculative position limits" that limit the net long or net short speculative
position any person(s) may hold, own or control in a particular Commodity on any
given day. An Advisor and its principal(s) may, on any given day, trade up to
the position limit established by such regulatory authorities and, therefore,
might be unable to trade those Commodities for the Partnership. The effect of
speculative position limits may be to preclude the Advisor and, consequently,
the Partnership, from taking potentially profitable positions, thereby reducing
the profit potential of the Partnership.

THE BROKER

         The Broker effects transactions for other customers (including public
and private commodity pools) who may compete with the Partnership's
transactions, including with respect to priorities of order entry. In addition,
employees of the Broker may trade for their own accounts. Since the identities
of the purchaser and seller are not disclosed until after the trade, it is
possible that a Broker could effect transactions for the Partnership in which
the other parties to the transactions are that Broker's officers, directors,
employees, customers or affiliates. Such persons might also compete with the
Partnership in making purchases or sales of Commodities without knowing that the
Partnership is also bidding on such Commodities. Since orders are filled in the
order in which they are received by a particular floor broker, transactions for
any of such persons might be executed when similar trades for the Partnership
are not executed or are executed at less favorable prices. However, in entering
orders for the Partnership and such other customer accounts, the Broker will
attempt to achieve an equitable treatment of all accounts, including with
respect to priorities of order entry and allocations of executed trades. In
addition, CFTC regulations prohibit a futures commission merchant ("FCM") from
utilizing its knowledge of one customer's trades for its own or its other
customers' benefit.

RECOURSE BY LIMITED PARTNERS

         In evaluating the foregoing potential and actual conflicts of interest,
an investor should be aware that the General Partner will have a responsibility
to the Limited Partners to exercise good faith and


                                       9

<PAGE>

fairness in all dealings affecting the Partnership. The responsibility of a
general partner to limited partners is a changing area of the law and Limited
Partners who have questions concerning the responsibilities of the General
Partner should consult their legal counsel. In the event that a Limited Partner
believes that the General Partner has violated its responsibilities, the Limited
Partner may seek legal relief for himself and all other similarly situated
Limited Partners or on behalf of the Partnership under applicable laws to
recover damages from, or to require an accounting by, the General Partner.
Furthermore, Limited Partners are afforded certain rights to institute
reparation proceedings under the CE Act for violations of the CE Act or of any
rule, regulation or order of the CFTC by the General Partner or the Broker. A
Limited Partner may also institute legal proceedings in court against the
General Partner, the Broker or the Advisor for certain violations of the CE Act
or rules, regulations or orders of the CFTC. Excessive trading of the
Partnership's account has been held to constitute a violation of the antifraud
provisions of the CE Act. Limited Partners should be aware that it may be
difficult to establish that excessive trading has occurred due to the broad
trading discretion given to the General Partner in the Partnership Agreement and
the Advisor in the Advisory Agreement, exculpatory provisions in the Partnership
Agreement and in the Advisory Agreement, and the lack of definitive standards in
judicial and administrative decisions as to what constitutes excessive trading.

         Under the exculpatory provisions of the Partnership Agreement, the
General Partner shall not be liable to the Partnership or to any of the Partners
except by reason of acts or omissions constituting fraud, willful misconduct,
gross negligence or bad faith. Limited Partners may have a more limited right of
action than they would absent such limitations. The Partnership has agreed to
indemnify the General Partner and its Limited Partners, officers, directors,
employees, and agents against any loss, liability, damage, cost, or expense
resulting from any claim, action, or proceeding relating to the business or
activities undertaken by them on behalf of the Partnership or actions taken or
omitted to be taken by the General Partner in its capacity as such; provided
that the conduct of such person did not constitute willful malfeasance or gross
negligence and was done in good faith and in a manner reasonably believed to be
in, or not opposed to, the best interests of the Partnership.

         Notwithstanding the foregoing, in any action brought by a Limited
Partner in the right of the Partnership to which the General Partner or any
other person indemnified pursuant to the foregoing are party defendants, any
such person will be indemnified by the Partnership only to the extent and
subject to the conditions specified in the Partnership Act. Also,
indemnification of the General Partner or its affiliates by the Partnership will
be limited for losses and liabilities resulting from violations of United States
Federal, state or foreign securities law in connection with the offer or sale of
Units. The CFTC has issued a statement of policy relating to indemnification of
officers and directors of an FCM (such as the Broker) and its controlling
persons under which the CFTC has taken the position that whether such an
indemnification is consistent with the policies expressed in the CE Act will be
determined by the CFTC on a case-by-case basis.

COMMODITIES TRADING GENERALLY

TRADING COMMODITIES IS SPECULATIVE AND VOLATILE

         The profitability of the Partnership will depend primarily on the
Advisor's ability to predict fluctuations in Commodity prices. Such prices are
highly volatile and, in general, are influenced by a number of external factors,
including, but not limited to, changing supply and demand relationships;
agricultural, trade, fiscal, monetary and exchange control programs and policies
of governments; national and/or international political and economic events and
policies; and changes in interest rates. Certain additional factors may also
affect individual Commodities or certain groups of Commodities. For example,
currency Commodities are influenced by, among other things, political events
(including restrictions on local exchanges or markets, limitations on
investments in a country or on investment by


                                       10

<PAGE>

residents of a country in other countries, and restrictions on currency flows);
changes in balances of payments and trade; rates of inflation; international
trade restrictions; currency devaluations and revaluations; and governmental
intervention (which is often intended to influence prices directly). Metal
Commodities can be affected by, among other things, production and, particularly
with respect to gold Commodities, governmental regulation. Agricultural
Commodities are influenced by, among other things, unexpected weather, damage by
insects or plant diseases and/or unexpected purchases by countries. The above
list does not include all of the factors that influence the price of various
Commodities or discuss how much influence each of those factors has on such
prices. Volatile price movements may result in unprofitable trading by the
Advisor, thereby resulting in losses to the Partnership.

TRADING COMMODITIES IS HIGHLY LEVERAGED

         To trade futures contracts a trader is not required to deposit funds
equal to the value of the futures contract; rather, the trader need only make a
deposit, called an "initial margin deposit", equal to a small percentage
(typically between 2% and 15%) of the value of the futures contract. As a
result, a relatively small adverse move in the price of a futures contract may
result in immediate and substantial losses to a trader. For example, if at the
time of purchase 10% of the price of a futures contract is deposited as margin,
a 10% decrease in the price of that contract would, if the contract were then
closed out, result in a total loss of the initial margin deposit (brokerage
commissions and other transaction costs also would be incurred). A decrease of
more than 10% would result in a loss of more than the total initial margin
deposit.

         Trading in the currency forward and interbank markets does not require
margin but generally does require the extension of credit by a bank to those
with whom that bank trades. The General Partner does not anticipate that the
banks with which the Broker (or other commodity broker) and the Partnership may
trade will require margin with respect to the trading of currencies. However, to
ensure payment by the Partnership on currency contracts, the Broker (or other
commodity broker) will generally require margin in amounts approximately
equivalent to those required for trading foreign currency futures contracts on
United States exchanges when the Partnership trades the same currencies for
which futures contracts are traded on such exchanges and amounts that may be
higher than such exchange margin requirements when the Partnership trades world
currencies for which no futures contracts are traded on such exchanges. Thus, as
with futures contracts, a relatively small adverse move in the price of a
forward contract may result in a loss of an amount equal to or greater than the
amount deposited. To some extent, options are even more highly leveraged than
either futures or forward contracts. For example, if an in-the-money call (put)
option is sold for its intrinsic value plus a premium representing the time
value of that option, a 10% rise (drop) in the value of the underlying futures
contract or physical commodity (the "Underlying Interest") does not create a
loss equal to just 10% of the value of the option; rather it creates a loss
approximately equal to 10% of the value of the Underlying Interest, less the
time value, which loss may be many times greater than the price for which a
trader sold the option. In addition, a trader who sells options is required only
to deposit a percentage of the value of the option at the time of sale as
margin, thereby leveraging the investment even further.

         Thus, like other leveraged investments, any purchase or sale of certain
Commodities may result in losses in excess of the amount invested. Investors
should note, however, that while the Partnership's assets are subject to losses
in excess of margin deposits, a Limited Partner cannot lose more than his
unredeemed capital contribution, undistributed profits (if any) and, under
certain limited circumstances, capital distributed to him or received by him
upon redemption, with interest thereon.



                                       11

<PAGE>

TRADING COMMODITIES MAY BE ILLIQUID

         While the Partnership normally will trade only Commodities that have
sufficient liquidity to enable the Partnership to enter and close out positions
without causing value price movements, there is no assurance that intervening
events, such as an exchange or the CFTC suspending trading in a particular
futures contract, ordering immediate liquidation or settlement of a particular
futures contract or ordering trading in a particular futures contract be
conducted for liquidation only, will not render a once-liquid Commodity
illiquid.

         In addition, most United States commodity exchanges limit the amount by
which certain Commodities may move during a single day by regulations referred
to as "daily price fluctuation limits", or "daily limits". Pursuant to such
regulations, no trades may be executed on any given day at prices beyond the
daily limits. The price of a futures contract has occasionally moved the daily
limit for several consecutive days with little or no trading, thereby
effectively preventing a party from liquidating his position.

         Similarly, trading options may become illiquid if trading in the
Underlying Interest becomes illiquid. Also, it is possible that major banks may,
from time to time, effectively stop making markets in certain currency forward
contracts or that governments may intervene to stabilize or fix exchange rates
or impose credit controls, thereby restricting or substantially eliminating
trading in the affected currencies.

         While the occurrence of such events may reduce or effectively eliminate
the liquidity of a particular market, they do not limit ultimate losses, and may
in fact substantially increase losses because of this inability to liquidate
unfavorable positions. In addition, if there is little or no trading in a
particular futures or forward contract that the Partnership is trading, whether
such illiquidity is caused by any of the above reasons or otherwise, the
Partnership may be unable to execute trades at favorable prices and/or may be
unable or unwilling to liquidate its position prior to its expiration date,
thereby requiring the Partnership to make or take delivery of the Underlying
Interest.

TRADING FORWARD CONTRACTS

         The Partnership may trade forward contracts in certain items (such as
currencies and metals) with United States and foreign banks and dealers.

         A forward contract is a contractual obligation to purchase or sell a
specified quantity of a Commodity at or before a specified date in the future at
a specified price and, therefore, is similar to a futures contract. Forward
contracts, however, are not traded on exchanges and, as a consequence, investors
in forward contracts are not afforded the regulatory protections of such
exchanges or the CFTC; rather, banks and dealers act as principals in such
markets. Neither the CFTC nor banking authorities regulate trading in forward
contracts on currencies, and non-United States banks may not be regulated by any
United States governmental agency. The principals who deal in the forward
contract markets are not required to continue to make markets in the forward
contracts they trade. There have been periods during which certain participants
in forward markets have refused to quote prices for contracts or have quoted
prices with an unusually wide spread between the price at which they are
prepared to buy and that at which they are prepared to sell.

         The Partnership may trade forward contracts with and through a limited
number of entities. As a result, liquidity problems might be greater in the
Partnership's forward trading than would be the case if trades were to be placed
with and through a larger number of forward market participants. The imposition
of exchange and credit controls or the fixing of currency exchange rates by
governmental authorities (e.g., Latin American countries) might eliminate or
substantially reduce trading in certain


                                       12

<PAGE>

currencies and might limit such forward trading to less than the amount that the
Advisor would otherwise recommend, to the possible detriment of the Partnership.
See "Trading Commodities May be Illiquid" above. The amount of loss that may be
claimed for tax purposes in respect of the Partnership's unprofitable forward
trades may be limited by the loss limitation rules applicable to straddles. See
"Income Tax Aspects".

         Because performance under forward contracts is not guaranteed by any
exchange or clearinghouse, the Partnership will be subject to the risk of the
inability, or refusal by, the counterparty to perform with respect to such
contracts. Any such failure or refusal, whether due to insolvency, bankruptcy or
other causes, could subject the Broker (or other commodity broker) and in turn
the Partnership to substantial losses. The Broker (or other commodity broker)
and the Partnership will not be excused from the performance of any forward
contracts into which they have entered due to the default of third parties in
respect of other forward trades in the Advisor's trading strategies that were to
have substantially offset such contracts.

         In addition, the CFTC has been studying the regulatory propriety of
"exchange of futures for physicals" or "EFP" transactions, whereby traders are
able to exchange positions in the forward markets for ones on regulated
exchanges on a 24-hour basis. If the Partnership's ability to engage in such
transactions were restricted, trading techniques that may be employed by the
Advisor might be impaired to the potential detriment of the Partnership.

TRADING OPTIONS

         Options on futures contracts and physical commodities are traded on
United States and foreign exchanges. A call (put) option grants the purchaser
thereof the right, but not the obligation, to buy (sell) the Underlying Interest
during a certain period of time for a fixed price. An option is purchased for
its intrinsic value, if any, plus a premium, representing the time value of that
option. Unless the price of the Underlying Interest increases (decreases) by at
least the time value of that option, the Partnership may lose the entire amount
of such premium. (The more out-of-the-money an option is, the greater the
increase (decrease) would have to be before the Partnership would recover the
entire amount of such premium.) Conversely, if the Partnership sells an option
(whether a call or a put), it will be credited with the sales price but will
have to deposit margin due to its contingent liability to make or take delivery
of the Underlying Interest in the event the option is exercised. A trader who
sells options may be subject to loss in an amount equal to the entire price
movement that occurs in the Underlying Interest (less any premium received) from
the date he sold the option until the date he liquidates such position. The
ability to trade or exercise options may be restricted in the event that trading
in the Underlying Interest becomes restricted. Options trading on United States
commodity exchanges is subject to regulation by both the CFTC and such
exchanges. Options trading on foreign exchanges is not regulated by the CFTC.

TRADING ON NON-UNITED STATES EXCHANGES

         The Partnership may trade Commodities on exchanges located outside of
the United States, where CFTC regulations and other protections customary on
United States exchanges may not apply. The Advisor has limited experience
trading on non-United States exchanges and markets. The collapse of Baring
Securities Limited ("Barings") in early 1995, which was caused by a Barings
trader making a series of large, unauthorized and unprofitable trades in
Japanese stock index futures and options contracts on the Singapore
International Monetary Exchange and various Japanese exchanges, illustrated some
of the potential risks of trading on foreign contract markets. Although,
ultimately, customer funds were recovered, the Barings collapse, and much of the
initial uncertainty regarding the disposition of customer funds and positions,
may have been avoided had these foreign markets established certain regulatory



                                       13

<PAGE>

practices and financial safeguards that exist in the United States, such as
omnibus account reporting, strict customer funds segregation, position transfer
mechanisms, and risk assessment and audit procedures.

         In contrast to United States exchanges, some non-United States
exchanges are "principals' markets" in which performance with respect to a
contract is the responsibility only of the individual member with whom the
trader has entered into a contract. In the case of its trading on non-United
States exchanges, the Partnership will be subject to the risk of the inability
of, or refusal by, the counterparty to perform with respect to such contracts.
Any such failure could subject the Partnership to substantial losses or
substantial reductions of the profits it might otherwise have realized.

         The Partnership will determine the Partnership's assets in United
States dollars. Unless the Partnership hedges itself against fluctuations in
exchange rates between the United States dollar and the currencies in which
trading is done on such non-United States exchanges, any profits that the
Partnership might realize in such trading could be eliminated as a result of
adverse changes in exchange rates, and the Partnership could even incur losses
as a result of any such changes. The Partnership, in general, does not intend to
hedge itself against such fluctuations.

TRADING FACILITIES AND ELECTRONIC TRADING

         Most open-outcry and electronic trading facilities are supported by
computer-based component systems for the order-routing, execution, matching,
registration and clearing of trades. As with all facilities and systems, they
are vulnerable to disruption or failure. The Partnership's ability to recover
losses may be subject to limits on liability imposed by the system provider, the
market, the clearing house and/or member firms.

         Trading on an electronic system may differ not only from trading in an
open-outcry market but also from trading on other electronic systems. If the
Partnership undertakes transactions on an electronic trading system, the
Partnership will be exposed to risks associated with the system including the
failure of hardware and software. The result of any system failure may be that
the Partnership's order is either not executed according to its instructions or
is not executed at all.

THE ADVISOR

         The Advisor is responsible for making the trading decisions for the
Partnership. In addition, the Partnership, effective November 1, 2000, hired
Stonebrook's Volatility Hedge Program, an overlay program designed to hedge the
positions of traditional trend-following programs during periods identified by
Stonebrook's systems as "high risk." This overlay program was eliminated in
October 2001. Investors should note that the Advisor is the sole advisor for the
Partnership.

         The Advisor has prepared the following description. This description is
a summary and is therefore qualified in its entirety by reference to the
detailed descriptions contained in the Advisor's disclosure documents, copies of
which may be obtained by a prospective investor upon request to the General
Partner. Due to the confidential and/or proprietary nature of most of the
information, such as trading methods and strategies and the performance tables,
the General Partner is relying on the Advisor for the accuracy thereof.

THE ADVISOR

         Beacon Management Corporation has been selected as the Partnership's
Advisor for its aggressive trading program (Meka), which offers the potential
for high returns, albeit with commensurate risk. The Advisor employs a
computerized system to determine trading signals. This system can be considered
a "longer-term, technical trend-following" system. The nature of such long-term,
trend-


                                       14

<PAGE>

following systems, in general, is that they are most vulnerable, or "at risk",
as trends mature and prices become overextended. During these periods, when
prices move swiftly in a CTA's favor, large unrealized profits accrue while exit
(stop) levels remain far from the current market price. Thus, when these trends
reverse, trend-following systems often suffer large givebacks of unrealized
gains. Thus, performance of technical trend-following systems can be quite
cyclical and, with aggressive strategies such as Meka, volatile.

         In an effort to address the potential for high volatility in the
Advisor's Meka Program, an additional advisor was selected. This advisor,
Stonebrook Structured Products LLC, served as the Partnership's "Overlay
Provider" through use of its Volatility Hedge Program ("VHP"). VHP is an overlay
program designed to pinpoint high-risk periods in market trends and to "hedge"
the high-risk positions of a trend-following program in an effort to mitigate
risk and improve the overall risk return profile relative to that of a
stand-alone, trend-following program. As of October 21, 2001, the Partnership
terminated its relationship with Stonebrook.

Beacon Management Corporation

         Beacon Management Corporation is a Delaware corporation located at 47
Hulfish Street, Princeton, New Jersey 08542, with telephone number 609-924-5395.
The Advisor offers managed trading programs in futures and options. The Advisor
develops and implements computer systems that integrate futures research,
trading, money management, and investment accounting. The principals of the
Advisor are Grant W. Schaumburg Jr., Mark S. Stratton, Thomas J. Nash and Karen
L. Zaramba.

         The Advisor continues the futures trading advisory business formerly
conducted by Beacon Management Corporation N.V., a Netherlands Antilles
corporation formed by Commodities Corporation in September 1982, and by Comtrade
Associates, a partnership founded in 1977. The Advisor began trading client
accounts in July 1980 and currently manages approximately $86 million. The
Advisor is registered as a commodity trading advisor and commodity pool operator
and is a member of the National Futures Association. Comtrade Associates
registered as a commodity trading advisor in June 1978, and the Advisor
registered in September 1982.

Description of Meka Program

         The Meka program aggressively invests in a broad array of globally
diversified assets using proprietary trading systems and portfolio allocation
software. The program's objective is to use diversification and leverage to earn
long-run returns from a variety of markets. Meka is executed in the futures
markets, which provide excellent liquidity, facilitate asset allocation shifts,
and offer flexible leverage. Meka generally maintains investments in the
following markets:

o      global bonds indices, such as U.S. long and intermediate Treasuries, and
       European bonds;

o      currency cross rates, such as the U.S. dollar vs. the Japanese Yen, the
       Euro, the British Pound, the Canadian Dollar, and the Australian dollar;

o      energy markets, such as crude oil, gasoline, and natural gas; metals,
       such as gold, silver, and copper; and

o      world commodity markets, such as grains, meats, coffee, and sugar.

         The implementation of Meka is quantitative and computer-based. Meka
allocates exposure to each market based on the relationships among the different
markets and among the trading systems.







                                       15

<PAGE>
Exposure in many markets can be short or long, depending on various market
conditions: the trading systems are predominantly trend-following in nature.
Several different analytical approaches are employed in the portfolio, including
(but not limited to) approaches based on moving averages, breakouts, option
replication, and volatility. They vary from short-term methods that trade almost
every day to long-term methods that sometimes hold positions for over a year.

THE ADVISORY AGREEMENT

         To utilize the commodity trading advice of the Advisor, the Partnership
has entered into a management agreement (the "Advisory Agreement") with the
Advisor. Set forth below is a brief description of certain points of the
Advisory Agreement.

         INDEMNIFICATION. The Partnership has agreed to indemnify the Advisor
from and against any loss, liability, claim, demand, damage, cost or expense
(including reasonable attorneys' and accountants' fees) arising out of the
Advisor's performance of its services except for certain actions by the Advisor,
including but not limited to (i) a material breach of the Advisory Agreement;
(ii) an act of, or omission to act due to, breach of fiduciary duty, bad faith,
misconduct or negligence by the Advisor or its principals; or (iii) a materially
misleading or untrue statement of material fact contained in the Advisor's
disclosure document or an omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not materially
misleading.

         The Advisor shall be liable to the Partnership for, and shall
indemnify, hold harmless, and defend the Partnership from and against, any loss,
liability, claim, demand, damage, cost and expense (including reasonable
attorneys' and accountants' fees), to which the Partnership may become subject
arising out of or based upon an act, omission, conduct or activity of the
Advisor arising from (i) a material breach of any term of the Advisory
Agreement; (ii) an act of, or omission to act due to, breach of fiduciary duty,
bad faith, misconduct or negligence by the Advisor; or (iii) a materially
misleading or untrue statement of material fact contained in the Advisor's
disclosure document or an omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not materially
misleading.

         STATUS. The Advisor is, and for all purposes shall be deemed to be, an
independent contractor and, unless otherwise expressly provided in the Advisory
Agreement or with the prior written authorization of the Partnership, the
Advisor and its respective principals shall have no authority to act for or
represent the Partnership in any way and shall not otherwise be deemed to be an
agent of the Partnership. The Advisor is neither a sponsor nor a promoter of the
Partnership.

THE BROKER

         The General Partner has responsibility for monitoring the Partnership's
brokers and for negotiation of their brokerage commission rates. The General
Partner has selected Man Financial Inc ("Broker") to be the clearing broker for
the Partnership. The Broker is registered under the CE Act, as amended, as an
FCM and a CPO, and is a member of the NFA in such capacities. In addition, the
Broker is registered with the National Association of Securities Dealers, Inc.
as a broker-dealer. The Broker, which is part of the Man Group of companies, is
a member of major United States futures and securities exchanges. The Broker's
main office is located at 440 S. LaSalle Street, Chicago, Illinois 60605. The
Broker's telephone number at such location is (312) 663-7500.

         At any given time, the Broker is involved in numerous legal actions and
administrative proceedings, which in the aggregate, are not, expected to have a
material effect upon its condition, financial or otherwise or to the services it
will render to the Partnership. There have been no material,



                                       16
<PAGE>

administrative, civil or criminal proceedings pending, on appeal or concluded
against the Broker or its principals within five years preceding the date of
this report.

         The Broker acts only as clearing broker for the Partnership and as such
is paid commissions for executing and clearing trades on behalf of the
Partnership. The Broker has not passed upon the adequacy or accuracy of this
report. The Broker neither will act in any supervisory capacity with respect to
the General Partner nor participate in the management of the General Partner or
the Partnership. Therefore, prospective investors should not rely on the Broker
in deciding whether or not to participate in the Partnership.

CUSTOMER AGREEMENT

         The Partnership and the Broker have entered into a non-exclusive
customer agreement (the "Customer Agreement") that provides that the Broker may
execute some, and clear all, transactions by or on behalf of the Partnership in
accordance with the instructions of the Advisor. The Broker is responsible for
holding and maintaining certain Partnership assets; execution of some and
clearance of all foreign currency Commodity transactions; preparation and
transmittal of daily confirmations of transactions and monthly statements of
account; calculation of equity balances and margin requirements, and similar
transaction-related administrative functions. The Customer Agreement provides
that the Partnership will post margin as required. For a description of the
brokerage commissions payable, see "Item 1. Business -- Fees and Expenses--Other
Fees and Expenses".

ITEM 2. PROPERTIES.

         The Partnership does not own or lease any physical properties. The
Partnership's office is located within the office of the General Partner at Two
American Lane, P.O. Box 5150, Greenwich, Connecticut 06831-8150.

ITEM 3. LEGAL PROCEEDINGS.

         The General Partner is not aware of any material pending legal
proceedings to which the Partnership or the General Partner is a party or to
which any of its or the Partnership's assets is subject.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         No matters were submitted to a vote of security holders during the
fourth quarter of 2002.

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

MARKET INFORMATION

         There is no established public trading market for the Units.

HOLDERS

         There were approximately 246 holders of Units at March 21, 2003.



                                       17
<PAGE>

DIVIDENDS

         Pursuant to the Partnership Agreement, distributions of profits, if
any, will be made at the sole discretion of the General Partner. As of March 21,
2003, the General Partner had not made, and the General Partner does not
currently intend to make, any distributions.

RELATED STOCKHOLDER MATTERS

         In June 1996, the Partnership commenced a private placement of Units in
reliance on the exemptions afforded by, among others, Section 4(2) of the 1933
Act and Rule 506 of Regulation D promulgated thereunder. Similar reliance has
been placed on available exemptions from securities qualification requirements
under applicable state securities laws. Units are offered monthly at a price per
Unit equal to the then-current Net Asset Value per Unit plus a selling
commission equal to 5% unless such selling commission is waived in whole or in
part. The minimum subscription is $26,250 for new investors other than benefit
plan investors (within the meaning of Department of Labor Regulation ss.ss.
2510.3-101(f)(2) ("Employee Benefit Plans"), that meet the minimum investment
requirements that otherwise apply to prospective subscribers for Units, or
$10,500 for Employee Benefit Plans and existing Limited Partners, which amounts
include selling commissions of $1,250 and $500, respectively. A subscriber may
subscribe for Units in excess of the foregoing minimum amount in increments of
$1,000. As of the date hereof, Units are continuing to be offered, and there is
no maximum number of Units that may be purchased or sold.

         During the fourth quarter of 2002, 79.9949 Units were sold for a total
of $74,885.

ITEM 6.           SELECTED FINANCIAL DATA

         The following Selected Financial Data is derived from the audited
financial statements of the Partnership for the years ended December 31, 2002,
2001, 2000, 1999, and 1998. The Partnership commenced trading operations on
October 9, 1996. See "Index to Financial Statements" at page F-1.





                                       18
<PAGE>

<TABLE>
<CAPTION>
                                         2002        2001           2000             1999          1998
<S>                               <C>              <C>         <C>              <C>           <C>
Total Assets                      $   12,097,711   15,170,241  $   23,765,608   $  48,842,564 $  35,864,129
                                      ----------   ----------      ----------      ----------    ----------
Total Partners' Capital               11,722,603   13,805,490      22,158,555      47,732,793    35,559,179
                                      ----------   ----------      ----------      ----------    ----------
Total Income                           1,729,066  (2,273,726)     (7,037,125)     (1,045,642)    12,380,097
                                      ----------   ----------      ----------      ----------    ----------
Total Expenses                         1,131,671    2,451,846       7,115,195       7,361,761     5,996,006
                                      ----------   ----------      ----------      ----------    ----------
Net Income (Loss)                        597,395  (4,725,572)    (14,152,320)     (8,407,403)     6,384,091
                                      ----------   ----------      ----------      ----------    ----------

A Units(1)

     Net Asset Value Per A Unit                                   $  1,199.29      $ 1,609.53    $ 1,829.21
                                                                     --------        --------      --------
Net Income (Loss) Per A Unit
     (Based on weighted
     average number of A Units
     outstanding during the
     period)                                                      $  (499.98)      $ (196.68)    $   555.83
                                                                     --------        --------      --------
     Increase (Decrease) in Net
     Asset Value Per A Unit                                       $  (410.24)      $ (219.68)    $   545.59
                                                                     --------        --------      --------

B Units(1)

     Net Asset Value Per B Units                                  $  1,145.25      $ 1,534.23    $ 1,760.76
                                                                     --------        --------      --------

Net Income (Loss) Per Unit
     (Based on weighted
     average number of B Units
     outstanding during the
     period)                                                      $  (485.55)      $ (370.99)    $   307.36
                                                                     --------        --------      --------

     Increase (Decrease) in Net
     Asset Value Per B Unit                                       $  (388.98)      $ (226.53)    $   506.82
                                                                     --------        --------      --------

Net (Loss) Per Unit (Based on
weighted average number of
Units outstanding during the
period)(1)                             $   43.06      (259.02)
                                          ------     --------
(Decrease) In Net Asset Value
Per Unit(1)                            $   50.21      (267.42)
                                          ------     --------

Net Asset Value Per Unit(1)            $  928.04       877.83
                                          ======     ========
</TABLE>

--------

(1) On January 1, 2001, A Units and B Units were converted into a single Unit
utilizing the Net Asset Value per B Unit on December 31, 2000 of $1,145.25. The
amounts reflected in the financial statements assume this conversion into a
single Unit occurred on December 31, 2000.


                                       19
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

         The discussion below and elsewhere in this Form 10-K contains "forward
looking" information that are based on the beliefs of the Partnership, as well
as assumptions made by, and information currently available to, the Partnership.
A number of important factors could cause the Partnership's actual growth,
results, performance and business prospects and opportunities in 2003 and beyond
to differ materially from those expressed in, or implied by, any such forward
looking information.

         The assets of the Partnership are used to engage, directly or
indirectly, in the speculative trading of Investments. From time to time, a
portion of such proceeds may be used for transactions in the cash markets or for
interbank trading.

         The assets of the Partnership are deposited with the Broker in a
trading account established by the Partnership for the Advisor and are used by
the Partnership as margin to engage in trading. In addition, certain of the
Partnership's assets may also be placed in a custodian account with a cash
manager to maximize the interest earned on assets not committed as margin.

CAPITAL RESOURCES

         The Partnership does not have, nor does it expect to have, any capital
assets. Redemptions and sales of additional Units in the future will affect the
amount of funds available for trading Investments in subsequent periods.

         There are only three factors that affect the Partnership's capital
resources: (i) the trading profits or loss generated by the Advisor (including
interest income); (ii) the money invested or redeemed by the Limited Partners;
and (iii) capital invested or redeemed by the General Partner. The General
Partner has maintained, and shall maintain, at all times a capital account in
such an amount, up to a total of $500,000, as is necessary for the General
Partner to maintain a one percent (1%) interest in the capital, income and
losses of the Partnership. All capital contributions by the General Partner
necessary to maintain such capital account balance shall be evidenced by Units
of general partnership interest, each of which shall have an initial value equal
to the Net Asset Value per Unit at the time of such contribution. The General
Partner, in its sole discretion, may withdraw any excess above its required
capital contribution without notice to the Limited Partners. The General
Partner, in its sole discretion, may also contribute any greater amount to the
Partnership, for which it shall receive, at its option, additional Units of
general partnership interest at their then-current Net Asset Value.

RESULTS OF OPERATIONS

         The success of the Partnership is dependent upon the ability of the
Advisor to generate trading profits through the speculative trading of
Investments sufficient to produce capital appreciation after payment of all fees
and expenses. Future results will depend in large part upon the Investment
markets in general, the performance of the Advisor, the amount of additions and
redemptions, and changes in interest rates. Due to the highly leveraged nature
of Investment trading, small price movements may result in substantial losses.
Because of the nature of these factors and their interaction, it is impossible
to predict future operating results.

         The Partnership has incurred and will continue to incur substantial
charges from the payment of brokerage commissions to the Broker, management
and/or incentive fees to the Advisor, management fees, offering fees and/or
incentive fees to the General Partner and operating expenses. The Partnership is
required to make substantial trading profits to avoid depletion and exhaustion
of its assets from the above-mentioned fees and expenses.



                                       20
<PAGE>

         Due to the nature of the Partnership's business, the Partnership's
trading results depend on the Advisor and the ability of its individual trading
system to take advantage of price movement or other profit opportunities in the
Investment markets. The following paragraphs present a summary of the
Partnership's operations for the years indicated. It is important to note,
however, that the Advisor trades in various markets at different times and that
prior activity in a particular market does not mean that such markets will be
actively traded by an Advisor or will be profitable in the future. Consequently,
the results of operations of the Partnership can only be discussed in the
context of the overall trading activities of the Partnership, the Advisor's
trading activities on behalf of the Partnership as a whole and how the
Partnership has performed in the past.

         In 1999, Commodity Trading Advisors ("CTAs") and the managed futures
industry as a whole experienced their worst annualized performance since 1994.
Trend-following CTAs, such as Dennis Trading Group ("DTG"), the former trading
advisor for the Partnership, had a particularly difficult time owing to a marked
lack of trends in all but a few markets. In November 2000, DTG resigned as the
Advisor and was replaced by the Meka Program of the Beacon Management
Corporation ("Beacon") and the VHP operated by Stonebrook Structured Products,
L.L.C. That replacement coincided with a shift in the market environment as
trends began to emerge throughout the global marketplace. In fact, for many
commodities trading advisors, the fourth quarter of 2000 proved to be a very
favorable period, as these trends were of sufficient magnitude and duration to
lift many trading advisors into positive territory for the year. For the
industry as a whole it was one of the strongest performance periods in recent
memory.

         In general, CTAs analyze the movement of prices in the commodity and
financial futures markets to identify trends and the opportunities for profit
which accompany them. Because a CTA can take long or short positions in the
futures markets, the direction of a trend is less important than the existence
of a trend itself. The Beacon Management Corporation or another CTA has the
potential to generate profits when prices are identified as trending downward,
by going short or selling ahead of a price decline, and when prices appear to be
trending upward, by going long or buying ahead of the rise in price. When prices
are moving sideways (i.e., with little movement up or down) or are exhibiting
significant short-term volatility (such as rapid intra-day or inter-day price
swings) trends are few and far between, and CTA profits can be flat or negative.

         Some CTAs monitor long-term trends, some intermediate term, a few
short-term. Beacon's trading strategy concentrates largely on long-term trends.
The globally diversified portfolio is usually invested in all markets at all
times, in varying degrees depending on current market volatility and price
trends. DTG, the Partnership's former trading advisor, followed a strategy
similar to Beacon's. During 2000 and 1999, DTG's trading policy was to increase
leverage in its positions at the end of a profitable day and to decrease
leverage at the end of a losing day. During 1999, there were very few
consecutive profitable days. This meant that in most instances where leverage
was increased at the end of a profitable day it was followed by a losing day
thus increasing the loss. Conversely, since there were very few consecutive
profitable days, on most profitable days DTG had committed the lowest leverage
thus decreasing the profit for that day. The Company also believes that this had
an adverse effect on its 1999 results compared to 1998.

         In 2001, results were dominated by a declining interest rate
environment and the terrorist attacks of September 11th. The Board of Governors
of the Federal Reserve Board cut interest rates eleven times during the first
ten months of 2001 and provided one of the few consistent trends for industry
CTAs in an otherwise difficult trading environment. The Meka Program provided
market diversification as most sectors were marginally profitable or
unprofitable, with good gains coming in just the financials area. However, it
became apparent that the long bias in stocks was becoming a burden on the
Partnership, especially after September 11. When it was determined that the
losses in the stock indices offset all gains in the other sectors, trading was
halted in this sector at the end of October 2001. In addition, it was felt that
the VHP Overlay program was not cost efficient and was removed at the same
time. The Partnership, which was down slightly at the end of October 2001
suffered its sharpest decline in November 2001 as bond prices plummeted in less
than one week, undoing a large part of its gains in financials. The Meka
Program never recovered from the losses in the stock indices, although no other
sector reported more than a nominal loss for 2001.

         Set forth below is a summary of the results of operations of the
Partnership for the calendar years 2000 through 2002.

         As of December 31, 2002, the Net Asset Value of the Partnership was
$11,722,603, a decrease of approximately 15.09% from its Net Asset Value of
$13,805,490 at December 31, 2001. The Partnership's 2002 subscriptions and
redemptions totaled $866,405 and $3,546,687, respectively. For the year ended
December 31, 2002, the Partnership had revenues comprised of $424,894 in
realized gains, $1,148,687 in change in unrealized gains and $155,485 in
interest income. For that same year, the




                                       21
<PAGE>

Partnership had expenses consisting of $367,171 in brokerage commissions,
$360,034 in General Partner's offering fees, $240,870 in management fees, $0 in
incentive fees and $163,596 in operating expenses. This resulted in the
Partnership having net gain of $597,395. The Net Asset Value per Unit at
December 31, 2002 increased 5.72% from $877.83 at December 31, 2001 to $928.04
at December 31, 2002. The Partnership's trading gains during 2002 resulted from
currencies, global interest rates, meats and grains.

         On January 1, 2001, A Units and B Units were converted into a single
Unit utilizing the Net Asset Value per B Unit on December 31, 2000 of $1,145.25.
As of December 31, 2001, the Net Asset Value of the Partnership was $13,805,490,
a decrease of approximately 37.70% from its Net Asset Value of $22,158,555 at
December 31, 2000. The Partnership's 2001 subscriptions and redemptions totaled
$726,086 and $4,353,579, respectively. For the year ended December 31, 2001, the
Partnership had revenues comprised of $1,185,581 in realized gains, ($3,935,133)
in change in unrealized losses and $475,826 in interest income. For that same
year, the Partnership had expenses consisting of $707,365 in brokerage
commissions, $598,204 in General Partner's offering fees, $560,105 in management
fees, $424,094 in incentive fees (net of waived fees) and $162,078 in operating
expenses. This resulted in the Partnership having net loss of ($4,725,572). The
Net Asset Value per Unit at December 31, 2001 decreased 23.35% from $1,145.25 at
December 31, 2000 to $877.83 at December 31, 2001. The Partnership's trading
losses during 2001 resulted primarily from losses in global stock indices,
energies, and metals.

         As of December 31, 2000, the Net Asset Value of the Partnership was
$22,158,555, a decrease of approximately 53.58% from its Net Asset Value of
$47,732,793 at December 31, 1999. The Partnership's 2000 subscriptions and
redemptions totaled $8,099,481 and $19,521,399, respectively. For the year ended
December 31, 2000, the Partnership had revenues comprised of ($14,184,423) in
realized losses, $5,159,280 in change in unrealized gains and $1,988,018 in
interest income. For that same year, the Partnership had expenses consisting of
$4,349,404 in brokerage commissions, $746,501 in management fees, $462,919 in
incentive fees (net of waived fees), $1,208,141 in General Partner's offering
fees and $348,230 in operating expenses. This resulted in the Partnership having
a net loss of ($14,152,320). The Net Asset Value per A Unit at December 31, 2000
decreased 25.49% from $1,609.53 at December 31, 1999 to $1,199.29 at December
31, 2000. The Net Asset Value per B Unit at December 31, 2000 decreased 25.35%
from $1,534.23 at December 31, 1999 to $1,145.25 at December 31, 2000.
Approximately 63% of the Partnership's net losses during the year ended December
31, 2000, were attributable to global interest rates, 21% to metals, 14% to
grains and 2% to tropicals.

         For the reasons described in this section, past performance is not
indicative of future results. As a result, any recent increases in net realized
or unrealized trading gains may have no bearing on any results that may be
obtained in the future.

         To enhance the foregoing comparison of results of operations from year
to year, prospective investors can examine the Statements of Financial Condition
and the Statements of Operations for the periods described above.

LIQUIDITY

         Although there is no public market for the Units, a Limited Partner may
redeem his Units in the Partnership as of any month-end upon ten days' written
notice to the General Partner in the form of a request for redemption.

         With respect to the Partnership's trading, in general, the Advisor will
trade only Investments that have sufficient liquidity to enable it to enter and
close out positions without causing major price



                                       22
<PAGE>

movements. Notwithstanding the foregoing, most United States commodity exchanges
limit the amount by which certain commodities may move during a single day by
regulations referred to as "daily price fluctuation limits", or "daily limits".
Pursuant to such regulations, no trades may be executed on any given day at
prices beyond daily limits. The price of a futures contract has occasionally
moved the daily limit for several consecutive days, with little or no trading,
thereby effectively preventing a party from liquidating its position. While the
occurrence of such an event may reduce or effectively eliminate the liquidity of
a particular market, it will not limit ultimate losses and may in fact
substantially increase losses because of this inability to liquidate unfavorable
positions. In addition, if there is little or no trading in a particular futures
or forward contract that the Partnership is trading, whether such illiquidity is
caused by any of the above reasons or otherwise, the Partnership may be unable
to execute trades at favorable prices and/or may be unable or unwilling to
liquidate its position prior to its expiration date, thereby requiring the
Partnership to make or take delivery of the Underlying Interest.

         The Partnership's trading also may be impacted by the various conflicts
of interest between the Partnership and the General Partner, the Advisor, the
Broker, and their affiliates.

RISK FACTORS

CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS

         The following important factors, among others, could cause actual
results to differ materially from those indicated by forward-looking statements
made in this Annual Report and presented elsewhere by management from time to
time.

PAST RESULTS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE

         The Partnership is a speculative commodity pool. The market sensitive
instruments held by it are acquired for speculative trading purposes, and all or
substantially all of the Partnership's assets are subject to the risk of trading
loss. Unlike an operating company, the risk of market sensitive instruments is
integral, not incidental, to the Partnership's main line of business.

         Market movements result in frequent changes in the fair market value of
the Partnership's open positions and, consequently, in its earnings and cash
flow. The Partnership's market risk is influenced by a wide variety of factors,
including the level and volatility of interest rates, exchange rates, equity
price levels, the market value of financial instruments and contracts, the
diversification effects among the Partnership's open positions and the liquidity
of the markets in which it trades.

         The Partnership, under the direction of the Advisor, rapidly acquires
and liquidates both long and short positions in a wide range of different
markets. Consequently, it is not possible to predict how a particular future
market scenario will affect performance, and the Partnership's past performance
is not necessarily indicative of its future results.

PRIMARY TRADING AND NON-TRADING RISK EXPOSURES

         The Partnership's primary market risk exposures as well as the
strategies used and to be used by the General Partner and the Advisor for
managing such exposures are subject to numerous uncertainties, contingencies and
risks, any one of which could cause the actual results of the Partnership's risk
controls to differ materially from the objectives of such strategies. Government
interventions, defaults and expropriations, illiquid markets, the emergence of
dominant fundamental factors, political upheavals, changes in historical price
relationships, an influx of new market participants, increased regulation,
general economic conditions and many other factors could result in material
losses as well as in material changes to the risk exposures and the risk
management strategies of the Partnership. There can be no




                                       23
<PAGE>

assurance that the Partnership's current market exposure and/or risk management
strategies will not change materially or that any such strategies will be
effective in either the short- or long-term. Investors must be prepared to lose
all or substantially all of their investment in the Partnership.

MEANS OF MANAGING RISK EXPOSURE

         The means by which the Partnership and the Advisor attempt to manage
the risk of the Partnership's open positions is essentially the same in all
market categories traded. The Advisor applies its own risk management policies
to its trading. These policies generally limit the total exposure that may be
taken per "risk unit" of assets under management. The Advisor also follows
diversification guidelines (often formulated in terms of the maximum margin
which they will commit to positions in any one contract or group of related
contracts), as well as imposing "stop-loss" points at which open positions must
be closed out. Occasionally, the Advisor will limit the market exposure of its
Partnership account through acquiring put or call options which "collar" the
risk of open positions. However, because of the typically high degree of
liquidity in the markets traded by the Partnership and the expense of acquiring
options, the Advisor mostly relies on stop-loss policies, requiring the
liquidation of positions once losses of a certain magnitude have been incurred.


         The General Partner controls the risk of the Partnership's non-trading
instruments (interest-bearing securities held for cash management purposes) -
the only Partnership investments, as opposed to Advisor selections, directed by
the General Partner-generally limiting the duration of such instruments to no
more than 3 years.

FORWARD-LOOKING STATEMENTS

         Certain statements in this Annual Report on Form 10-K constitute
"forward-looking statements" within the meaning of the safe harbor from civil
liability provided for such statements by the Private Securities Litigation
Reform Act of 1995 (set forth in Section 27A of the 1933 Act and Section 21E of
the 1934 Act). All quantitative disclosures in this section are deemed to be
forward-looking statements for purposes of the safe harbor, except for
statements of historical fact (such as the terms of particular contracts and the
number of market risk sensitive instruments held during or at the end of the
reporting period).

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

         Derivative instruments involve varying degrees of off-balance sheet
market risk. Changes in the level or volatility of interest rates or foreign
currency exchange rates or the market values of the financial instruments or
commodities underlying such derivative instruments frequently result in changes
in the Partnership's unrealized profit (loss) on such derivative instruments as
reflected in the Statements of Financial Condition included herein. The
Partnership's exposure to market risk is influenced by a number of factors,
including the relationships among derivative instruments held by the
Partnership, as well as the volatility and liquidity of the markets in which the
financial instruments are traded. There has been no material change, during the
three and twelve months ended December 31, 2002, in the sources of the
Partnership's exposure to market risk.

         The General Partner has procedures in place intended to control the
Partnership's exposure to market risk, although there can be no assurance that
it will, in fact, succeed in doing so. These procedures focus primarily on
monitoring the trading of the Advisor selected from time to time for the
Partnership, calculating the Net Asset Value of the Advisor's respective
Partnership accounts as of the close of



                                       24
<PAGE>

business on each day and reviewing outstanding positions for
over-concentrations. While the General Partner will not itself intervene in the
markets to hedge or diversify the Partnership's market exposure, the General
Partner may urge the Advisor to reallocate positions, or itself reallocate
Partnership assets among different Advisors (although typically only as of the
end of a month) in an attempt to avoid over-concentrations. However, such
interventions would be unusual. Except in cases in which it appears that an
Advisor has begun to deviate from past practice or trading policies or to be
trading erratically, the General Partner's basic risk control procedures consist
of the ongoing process of Advisor monitoring and selection, with the market risk
controls being applied by the Advisor itself.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

         The Partnership's financial statements, together with the auditor's
report thereon, are included on pages F-1 through F-10 hereof.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         The General Partner, Kenmar Advisory Corp., is the sole general partner
of the Partnership. The General Partner, is a corporation which was originally
organized as a New York corporation in September 1983 and reorganized as a
Connecticut corporation on January 1, 1996. The General Partner has been
registered with the CFTC as a CPO and a member in good standing of the NFA in
such capacity since February 1984. Its address is Two American Lane, P.O. Box
5150, Greenwich, Connecticut 06831-8150 and its telephone number is (203)
861-1000. It is owned equally and indirectly by Messrs. Shewer and Goodman. The
directors and executive officers of the General Partner currently are as
follows:

         MR. KENNETH A. SHEWER, age 49, has been the Chairman and a director of
the General Partner since September 1983. Mr. Shewer was employed by Pasternak,
Baum and Co., Inc. ("Pasternak, Baum"), an international cash commodity firm,
from June 1976 until September 1983. Mr. Shewer left Pasternak, Baum in
September 1983 to form Kenmar Advisory Corp. with Mr. Goodman. Mr. Shewer
created and managed Pasternak, Baum's Grain Logistics and Administration
Department and created its Domestic Corn and Soybean Trading Department. In
1982, Mr. Shewer became co-manager of Pasternak, Baum's F.O.B. Corn Department.
In 1983, Mr. Shewer was made Vice President and Director of Pasternak, Baum. Mr.
Shewer graduated from Syracuse University with a B.S. degree in 1975.

         MR. MARC S. GOODMAN, age 54, has been the President and a director of
the General Partner since September 1983. Mr. Goodman joined Pasternak, Baum in
September 1974 and was a Vice President and Director from July 1981 until
September 1983. Mr. Goodman left Pasternak, Baum in September 1983 to form
Kenmar Advisory Corp. with Mr. Shewer. While at Pasternak, Baum, Mr. Goodman was
largely responsible for business development outside of the United States, for
investment of its corporate retirement funds and for selecting trading
personnel. Mr. Goodman has conducted extensive business in South America, Europe
and the Far East. Mr. Goodman graduated from the Bernard M. Baruch School of
Business of the City University of New York with a B.B.A. in 1969 and an M.B.A.
in 1971 in Finance and Investments, where he was awarded an Economics and
Finance Department Fellowship from September 1969 through June 1971. Mr. Goodman
is married to Ms. Esther Eckerling Goodman.



                                       25
<PAGE>

         MS. ESTHER ECKERLING GOODMAN, age 50, has been the Senior Executive
Vice President of the General Partner since March 1991 and has also served as
Chief Operating Officer of the General Partner since October 1995. Ms. Goodman
joined Kenmar in July 1986 and has been involved in the futures industry since
1974. From 1974 through 1976, she was employed by Conti-Commodity Services, Inc.
and ACLI Commodity Services, Inc., in the areas of hedging, speculative trading
and tax arbitrage. In 1976, Ms. Goodman joined Loeb Rhoades and Company, Inc.,
where she was responsible for the development and management of a managed
futures program which, in 1979, became the trading system for an independent CTA
of which Ms. Goodman was a founder and principal. From 1983 through mid-1986,
Ms. Goodman was employed as a marketing executive at Commodities Corp. (USA) of
Princeton, New Jersey. Ms. Goodman was a Director of the Managed Futures
Association and its predecessor, the Managed Futures Trade Association, from
1987 through 1995. In addition, she has written several articles and has spoken
before various professional groups and organizations on the subject of managed
futures. Ms. Goodman attended Vassar College from 1970-1972 and graduated from
Stanford University in 1974 with a B.A. degree. Ms. Goodman is married to Mr.
Marc S. Goodman.

         Each director of the General Partner serves until the next annual
meeting of stockholders or until a successor is elected. Executive officers of
the General Partner are appointed annually and serve at the discretion of its
Board of Directors. Messrs. Shewer and Goodman hold directorships in various
affiliates of the General Partner.

SIGNIFICANT EMPLOYEES OF THE GENERAL PARTNER

         MR. GARY J. YANNAZZO, age 49, Senior Vice President and Chief Financial
Officer, joined the General Partner in August 1997. From March 1992 to July
1995, he was Senior Vice President and Controller of Mettallgesellschaft Corp.,
a diversified commodity marketing and trading company, with 30 worldwide
subsidiaries and $5 billion in annual revenues. From January 1990 through
February 1992, Mr. Yannazzo was President, Chief Executive Officer and part
owner of Holland Mortgage Corporation. From December 1982 through November 1989,
Mr. Yannazzo was First Vice President of Security Capital Corporation, a
publicly traded financial services company and affiliate of Smith Barney, Inc.
From June 1975 through November 1982, Mr. Yannazzo was with Arthur Andersen &
Co., serving as an Audit Manager from June 1980. From August 1995 until he
joined the General Partner, Mr. Yannazzo was a private consultant, engaged
primarily in projects and ventures in the commodity and derivative areas. Mr.
Yannazzo received his B.S. in business administration from Seton Hall University
in 1975 and his certified public accountant certification in 1977.

         MS. JOANNE D. ROSENTHAL, age 37, Senior Vice President and Director of
Research, joined the General Partner in October 1999. Prior to joining the
General Partner, Ms. Rosenthal spent 9 years at The Chase Manhattan Bank, in
various positions of increasing responsibility. From July 1991 through April
1994, she managed the Trade Execution Desk and from May 1994 through September
1999, she was a Vice President and Senior Portfolio Manager of Chase Alternative
Asset Management, Inc. Ms. Rosenthal received a Masters of Business
Administration in Finance from Cornell University and a Bachelor of Arts in
Economics from Concordia University in Montreal, Canada.

         MR. MARK M. ROSSOW, age 50, Senior Vice President and General Counsel,
joined the General Partner in August 2000. From October 1998 until July 2000,
Mr. Rossow was a partner in the law firm of Snow Becker Krauss P.C. From May
1994 until September 1998, Mr. Rossow was a partner in the law firm of Amon &
Sabatini. Prior to that, Mr. Rossow was in-house counsel to the international
accounting firm BDO Seidman. Mr. Rossow has served on the staff of the United
States Securities and Exchange Commission. Mr. Rossow earned a B.A. degree from
Syracuse University in 1975 and a J.D. degree from the University of Michigan in
1978. He was admitted to practice law in 1979.



                                       26
<PAGE>

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

         Section 16(a) of the 1934 Act, as amended, requires the General Partner
and the directors of the General Partner to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Such persons
also are required to furnish the Partnership with copies of all Section 16(a)
forms they file. Based solely on its review of copies of such forms received by
it, the General Partner believes that all Section 16(a) filing requirements
applicable to the reporting persons were complied with by such persons during
2002.

ITEM 11. EXECUTIVE COMPENSATION.

         The Partnership has no directors or officers. As a limited partnership,
the business of the Partnership is managed by its General Partner which is
responsible for the administration of the business affairs of the Partnership
and receives the compensation described in "Item 1. Business".

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
         RELATED STOCKHOLDER MATTERS.

         The Partnership has no directors or officers. The Partnership delegates
all management of the Partnership's affairs to the General Partner. As of
December 31, 2002, the General Partner owned 184.7556 Units of general
partnership interest, representing a 1.46% investment in the Partnership. The
General Partner is indirectly and equally owned by Messrs. Kenneth A. Shewer and
Marc S. Goodman. There are no arrangements, known to the Partnership, including
any pledge by any person of securities of the Partnership or of the General
Partner, the operation of which may at a subsequent date result in a change of
control of the Partnership.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

         The General Partner is the sole general partner of the Partnership and
manages and conducts the business of the Partnership. The Partnership Agreement
provides that the General Partner may be compensated in such form(s) and in such
amount as the General Partner, in its sole discretion, shall determine, after
giving due weight to industry standards. As more fully described in Item 1
hereto, to compensate the General Partner for its management and operations of
the Partnership, its management and monitoring of the portfolio of the Advisor,
the General Partner currently receives 22.5% of the Advisor's management and
incentive fee and an offering fee. For the year ended December 31, 2002, the
General Partner received $54,196 in management fees, $0 in incentive fees and
$360,034 in offering fees. See "Item 1. Business - Fees and Expenses - Fees to
the Advisor." In addition, because the General Partner negotiated a brokerage
commission rate for the Partnership which is generally lower than the rate
available to the public, the General Partner may receive from the Broker a
portion of the brokerage commissions paid by the Partnership to the Broker. See
"Item 1. Business--Fees and Expenses--Fees to the General Partner". The
Partnership is prohibited from making any loans.

ITEM 14. CONTROLS AND PROCEDURES.

         The Partnership maintains a system of internal controls and procedures
that are designed to provide reasonable assurance that information required to
be disclosed by the Partnership in the reports that the Partnership files under
the 1934 Act are recorded, processed, summarized and reported within required
time periods. The General Partner's Chief Executive Officer and Chief Financial
Officer have evaluated the effectiveness of the Partnership's disclosure
controls and procedures as of a date within 90 days before the filing of this
annual report and have each concluded that as of the evaluation date, such


                                       27
<PAGE>

controls and procedures were effective, in all material respects, to ensure that
required information will be disclosed on a timely basis in our reports filed
under the 1934 Act.

         Subsequent to the date of the Partnership's evaluation, there have been
no significant changes to the Partnership's internal controls or in other
factors that could significantly affect the Partnership's internal controls.

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)      The following financial statements of the Partnership, with the
         independent auditor's report, are filed as part of this Form 10-K:

<TABLE>
<S>                                                                                                            <C>
         (1)      Independent Auditor's Report                                                                  F-1
                  Statements of Financial Condition as of December 31, 2002 and 2001                            F-2
                  Condensed Schedule of Investments as of December 31, 2002                                     F-3
                  Statements of Operations for the Years Ended December 31, 2002, 2001, and 2000                F-4
                  Statements of Changes in Partners' Capital (Net Asset Value) For the Years Ended              F-5
                  December 31, 2002, 2001, and 2000
                  Notes to Financial Statements                                                                 F-6
</TABLE>


         (2) All Financial Schedules are omitted because such schedules are not
required or the information required has been presented in the aforementioned
financial statements.




                                       28
<PAGE>




         (3) The following exhibits are filed with this report and incorporated
by reference as set forth below:

Exhibit No.                            Description

3.1*                       Amended Certificate of Limited Partnership for The
                           Fulcrum Fund Limited Partnership.

3.2*                       Limited Partnership Agreement of The Fulcrum Fund
                           Limited Partnership, dated June 18, 1996 as amended
                           December 15, 1997 and further amended October 10,
                           2000.

10.1**                     Customer Agreement between the Partnership and E.D. &
                           F. Man International Inc., dated August 27, 1996
                           incorporated herein by reference to the Registrant's
                           Registration Statement on Form 10 dated June 22,
                           1999.

10.2*                      Cover Letter and Model Sub-Advisory Agreement between
                           The Fulcrum Fund Limited Partnership and Beacon
                           Management Corporation dated January 1, 1998.

10.3*                      Cover letter and Model Sub-Advisory Agreement between
                           The Fulcrum Fund Limited Partnership and Beacon
                           Management Corporation dated January 1, 1998.

99.1                       Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002.

99.2                       Certification Pursuant to 18 U.S.C. Section 1350, as
                           Adopted Pursuant to Section 906 of the Sarbanes-Oxley
                           Act of 2002.

*                          Incorporated herein by reference to the Partnership's
                           Annual Report on Form 10-K for the fiscal year ended
                           December 31, 2000.

**                         Incorporated herein by reference to the Partnership's
                           Registration Statement on Form 10 dated June 22,
                           1999.

(b)      The Partnership did not file any reports on Form 8-K during the fourth
         quarter of 2002.


                                       29
<PAGE>




                                   SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on the 31st day of
March, 2003.

                       THE FULCRUM FUND LIMITED PARTNERSHIP

                       By:  Kenmar Advisory Corp., general partner

                            By:     /s/ Kenneth Shewer
                                 ----------------------------------
                                 KENNETH A. SHEWER
                                 Chairman (Duly Authorized officer of the
                                 General Partner)

                            By:     /s/ Gary Yanazzo
                                 -----------------------------------
                                 GARY J. YANAZZO
                                 Senior Vice President and Chief Financial
                                 Officer (Duly Authorized Officer of the General
                                 Partner)


         Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated on the 31st day of March, 2003.

                       THE FULCRUM FUND LIMITED PARTNERSHIP

                       By:  Kenmar Advisory Corp., general partner



                            By:    /s/ Kenneth Shewer
                                 -------------------------------------------
                                 KENNETH A. SHEWER
                                 Chairman and Director (Principal Executive
                                 Officer)

                            By:    /s/ Marc Goodman
                                 -----------------------------------
                                 MARC S. GOODMAN
                                 President and Director


                            By:    /s/ Gary Yannazzo
                                 -----------------------------------
                                 GARY J. YANNAZZO
                                 Senior Vice President and Chief Financial
                                 Officer (Principal Financial and Accounting
                                 Officer for the Partnership)




                                       30
<PAGE>

                                 CERTIFICATIONS



I, Kenneth A. Shewer, Chief Executive Officer of Kenmar Advisory Corp., the
General Partner of The Fulcrum Fund Limited Partnership, certify that:

1.       I have reviewed this annual report on Form 10-K of The Fulcrum Fund
         Limited Partnership;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a.       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b.       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c.       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of the registrant's board of directors (or persons
         performing equivalent functions):

         a.       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b.       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officer and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.



         Date: March 31, 2003



        /s/ Kenneth Shewer
------------------------------
Kenneth A. Shewer
Chief Executive Officer


<PAGE>

                                 CERTIFICATIONS



I, Gary J. Yannazzo, Senior Vice President and Chief Financial Officer of Kenmar
Advisory Corp., the General Partner of The Fulcrum Fund Limited Partnership,
certify that:

1.       I have reviewed this annual report on Form 10-K of The Fulcrum Fund
         Limited Partnership;

2.       Based on my knowledge, this annual report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this annual report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this annual report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this annual report;

4.       The registrant's other certifying officer and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         have:

         a.       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this annual report is being prepared;

         b.       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this annual report (the "Evaluation Date");
                  and

         c.       presented in this annual report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officer and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of the registrant's board of directors (or persons
         performing equivalent functions):

         a.       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b.       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officer and I have indicated in this
         annual report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.



         Date: March 31, 2003



         /s/ Gary Yannazzo
-----------------------------------------
Gary J. Yannazzo
Senior Vice President and Chief Financial Officer







<PAGE>



                    ARTHUR F. BELL, JR. & ASSOCIATES, L.L.C.

                          CERTIFIED PUBLIC ACCOUNTANTS

                                 (410) 771-0001

                               FAX (410) 785-9784

Member:

American Institute of Certified
Public Accountants                                                     Suite 200

   SEC Practice Section                                 201 International Circle

Maryland Association of Certified
Public Accountants                                  Hunt Valley, Maryland  21030



                          INDEPENDENT AUDITOR'S REPORT


To the Partners
The Fulcrum Fund Limited Partnership


We have audited the accompanying statements of financial condition of The
Fulcrum Fund Limited Partnership as of December 31, 2002 and 2001, including the
December 31, 2002 condensed schedule of investments, and the related statements
of operations and changes in partners' capital (net asset value) for the years
ended December 31, 2002, 2001 and 2000. These financial statements are the
responsibility of the Partnership's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. 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 audits provide 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 Fulcrum Fund Limited
Partnership as of December 31, 2002 and 2001, and the results of its operations
and the changes in its net asset values for the years ended December 31, 2002,
2001 and 2000, in conformity with accounting principles generally accepted in
the United States of America.




/s/ Arthur F. Bell, Jr. & Associates, L.L.C.

Hunt Valley, Maryland
February 5, 2003




                                      F-1
<PAGE>


                      THE FULCRUM FUND LIMITED PARTNERSHIP
                        STATEMENTS OF FINANCIAL CONDITION
                           December 31, 2002 and 2001




<TABLE>
<CAPTION>

                                                               2002          2001
                                                               ----          ----
<S>                                                       <C>            <C>
ASSETS
    Equity in broker trading accounts
       Cash                                                $ 9,617,528   $12,355,738
       Unrealized gain on open contracts                     2,214,624     1,065,937
                                                           -----------   -----------

              Deposits with broker                          11,832,152    13,421,675

    Cash and cash equivalents                                  257,936     1,748,566
    Subscriptions receivable                                     7,623             0
                                                           -----------   -----------

              Total assets                                 $12,097,711   $15,170,241
                                                           ===========   ===========

LIABILITIES
    Accounts payable                                       $    31,200   $    20,104
    Commissions and other trading fees
       on open contracts                                        19,500        14,980
    General Partner offering fee                                28,656        37,806
    Advisor management fee                                      19,966        25,084
    Redemptions payable                                        275,786     1,266,777
                                                           -----------   -----------

              Total liabilities                                375,108     1,364,751
                                                           -----------   -----------

PARTNERS' CAPITAL (NET ASSET VALUE)
    General Partner - 184.7556 units outstanding
       at December 31, 2002 and 2001                           171,460       162,183
    Limited Partners - 12,446.8808 and 15,542.1339 units
       outstanding at December 31, 2002 and 2001            11,551,143    13,643,307
                                                           -----------   -----------

              Total partners' capital
                  (Net Asset Value)                         11,722,603    13,805,490
                                                           -----------   -----------

                                                           $12,097,711   $15,170,241
                                                           ===========   ===========

</TABLE>



                             See accompanying notes.

                                       F-2


<PAGE>

                      THE FULCRUM FUND LIMITED PARTNERSHIP
                        CONDENSED SCHEDULE OF INVESTMENTS
                                December 31, 2002




LONG FUTURES CONTRACTS
<TABLE>
<CAPTION>

        No. of                                                                    % of Net
       Contracts      Description                                  Value         Asset Value
       ---------      -----------                                  -----         -----------
<S>                  <C>                                       <C>              <C>
          1,296       Agricultural                              $   227,351         1.94 %
            619       Currency                                      663,200         5.66 %
             96       Energy                                        (51,437)       (0.44)%
            694       Interest rate                                 826,990         7.05 %
            420       Metal                                         345,613         2.95 %
                                                                 ----------      ---------

                      TOTAL LONG FUTURES CONTRACTS               $2,011,717        17.16 %
                                                                 ----------      ---------
</TABLE>


SHORT FUTURES CONTRACTS
<TABLE>
<CAPTION>

        No. of                                                                  % of Net
       Contracts      Description                                  Value       Asset Value
       ---------      -----------                                  -----       -----------
<S>                   <C>                                       <C>            <C>
          877         Agricultural                               $  202,907         1.73%
                                                                 ----------      ---------

                      TOTAL FUTURES CONTRACTS                    $2,214,624        18.89%
                                                                 ==========      =========

</TABLE>








                             See accompanying notes.

                                       F-3


<PAGE>

                      THE FULCRUM FUND LIMITED PARTNERSHIP
                            STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 2002, 2001 and 2000



<TABLE>
<CAPTION>
                                                       2002            2001            2000
                                                       ----            ----            ----
<S>                                                <C>             <C>             <C>
INCOME
    Commodity trading gains (losses)
       Realized                                    $    424,894    $  1,032,676    $(14,054,348)
       Change in unrealized                           1,148,687      (3,855,916)      4,921,853
                                                   ------------    ------------    ------------
              Gain (loss) from commodity trading      1,573,581      (2,823,240)     (9,132,495)
                                                   ------------    ------------    ------------
    Fixed income securities gains (losses)
       Realized                                               0         152,905        (130,075)
       Change in unrealized                                   0         (79,217)        237,427
                                                   ------------    ------------    ------------
              Gain from fixed income securities               0          73,688         107,352
                                                   ------------    ------------    ------------
    Interest income                                     155,485         475,826       1,988,018
                                                   ------------    ------------    ------------
              Total income (loss)                     1,729,066      (2,273,726)     (7,037,125)
                                                   ------------    ------------    ------------
EXPENSES
    Brokerage commissions                               367,171         707,365       4,349,404
    General Partner offering fee                        360,034         598,204       1,208,141
    Advisor management fees                             240,870         560,105         746,501
    Advisor incentive fees                                    0         547,218         597,315
    Operating expenses                                  163,596         162,078         348,230
                                                   ------------    ------------    ------------
              Total expenses                          1,131,671       2,574,970       7,249,591
              Advisor incentive fees waived                   0        (123,124)       (134,396)
                                                   ------------    ------------    ------------
              Net expenses                            1,131,671       2,451,846       7,115,195
                                                   ------------    ------------    ------------
              NET INCOME (LOSS)                    $    597,395    $ (4,725,572)   $(14,152,320)
                                                   ============    ============    ============
A UNITS
    NET (LOSS) PER A UNIT
       (based on weighted average number of
       A Units outstanding during the period)                                      $    (499.98)
                                                                                   ============
    (DECREASE) IN NET ASSET
       VALUE PER A UNIT                                                            $    (410.24)
                                                                                   ============
B UNITS
    NET (LOSS) PER B UNIT
       (based on weighted average number of
       B Units outstanding during the period)                                      $    (485.55)
                                                                                   ============
    (DECREASE) IN NET ASSET
       VALUE PER B UNIT                                                            $    (388.98)
                                                                                   ============
NET INCOME (LOSS) PER UNIT
    (based on weighted average number of
    Units outstanding during the period)           $      43.06    $    (259.02)
                                                   ============    ============
INCREASE (DECREASE) IN NET ASSET
    VALUE PER UNIT                                 $      50.21    $    (267.42)
                                                   ============    ============
</TABLE>



                             See accompanying notes.

                                       F-4


<PAGE>



                      THE FULCRUM FUND LIMITED PARTNERSHIP
          STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (NET ASSET VALUE)
              For the Years Ended December 31, 2002, 2001 and 2000



<TABLE>
<CAPTION>


                                                                        Partners' Capital
                              -----------------------------------------------------------------------------------------------------
                                                A Units                                    B Units
                              --------------------------------------------   -------------------------------------
                                                General        Limited                      General       Limited
                                   Units        Partner        Partners          Units      Partner       Partners         Total
                                   -----        -------        --------          -----      -------       --------         -----
<S>                           <C>            <C>            <C>              <C>           <C>         <C>             <C>
Balances at December 31, 1999   6,370.7262    $  172,443    $ 10,081,458      24,428.4628   $334,048   $ 37,144,844    $ 47,732,793
Net (loss) for the year
    ended December 31, 2000                      (57,231)     (2,520,700)                    (97,373)   (11,477,016)    (14,152,320)
Additions                           0.0000             0               0       5,369.2816     75,000      8,024,481       8,099,481
Redemptions                    (3,466.5005)     (115,212)     (4,077,743)    (13,490.7834)   (77,179)   (15,251,265)    (19,521,399)
                              ------------    ----------    ------------     ------------   --------   ------------    ------------
Balances at December 31, 2000
  (before conversion)           2,904.2257    $        0    $  3,483,015      16,306.9610   $234,496   $ 18,441,044    $ 22,158,555
                              ============    ==========    ============     ============   ========   ============    ============
<CAPTION>


                                            Net Asset Value Per Unit
                                            ------------------------
                                                December 31, 2000
                                              A Units       B Units
                                              -------       -------
                                            <S>            <C>
                                             $1,199.29     $1,145.25
                                             =========     =========


<CAPTION>


                                                                          Partners' Capital
                                      -----------------------------------------------------------------------------------------
                                              General                      Limited                             Total
                                      ----------------------     ------------------------------     ---------------------------
                                         Units      Amount          Units            Amount            Units          Amount
                                         -----      ------          -----            ------            -----          ------
<S>                                   <C>         <C>           <C>               <C>               <C>             <C>
Balances at December 31, 2000
  (after conversion)                   204.7556    $234,496      19,143.4771       $21,924,059      19,348.2327     $22,158,555
Net (loss) for the year
   ended December 31, 2001                          (53,022)                        (4,672,550)                      (4,725,572)
Additions                                0.0000           0         641.7955           726,086         641.7955         726,086
Redemptions                            (20.0000)    (19,291)     (4,243.1387)       (4,334,288)     (4,263.1387)     (4,353,579)
                                      ---------   ---------     ------------       -----------      -----------     -----------
Balances at December 31, 2001          184.7556     162,183      15,542.1339        13,643,307      15,726.8895      13,805,490

Net income for the year
   ended December 31, 2002                            9,277                            588,118                          597,395
Additions                                0.0000           0       1,187.6305           866,405       1,187.6305         866,405
Redemptions                              0.0000           0      (4,282.8836)       (3,546,687)     (4,282.8836)     (3,546,687)
                                      ---------   ---------     ------------       -----------      -----------     -----------
Balances at December 31, 2002          184.7556   $ 171,460      12,446.8808       $11,551,143      12,631.6364     $11,722,603
                                      =========   =========     ============       ===========      ===========     ===========

<CAPTION>


                                                Net Asset Value Per Unit
                                            ---------------------------------
                                                      December 31,
                                             2002         2001         2000
                                             ----         ----         ----
                                            <S>         <C>          <C>
                                            $928.04      $877.83     $1,145.25
                                            =======      =======     =========


</TABLE>


                             See accompanying notes.

                                       F-5


<PAGE>

                      THE FULCRUM FUND LIMITED PARTNERSHIP
                          NOTES TO FINANCIAL STATEMENTS




Note 1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

           A.     General Description of the Partnership

                  The Fulcrum Fund Limited Partnership (the Partnership) is a
                  Connecticut limited partnership which operates as a commodity
                  pool. The Partnership engages in the speculative trading of
                  futures contracts and options on futures contracts. It is
                  subject to the regulations of the Commodity Futures Trading
                  Commission, an agency of the United States (U.S.) government
                  which regulates most aspects of the commodity futures
                  industry; rules of the National Futures Association, an
                  industry self-regulatory organization; and the requirements of
                  commodity exchanges and Futures Commission Merchants (brokers)
                  through which the Partnership trades.

                  During 1999, the Partnership became subject to the
                  informational requirements of the Securities Exchange Act of
                  1934. Accordingly, the Partnership is subject to the
                  regulations of the Securities and Exchange Commission.

                  Investments made prior to April 30, 1997 are referred to as "A
                  Units" and investments made on or after April 30, 1997 are
                  referred to as "B Units." The initial net asset value per B
                  Unit was the net asset value per A Unit at April 30, 1997. The
                  only difference between A Units and B Units are the advisor
                  management and incentive fee rates in effect prior to November
                  1, 2000, as further described in Note 3.

                  On January 1, 2001, A Units and B Units were converted into a
                  single Unit utilizing the Net Asset Value per B Unit on
                  December 31, 2000 of $1,145.25. The amounts reflected in the
                  financial statements assume this conversion into a single Unit
                  occurred on December 31, 2000. Accordingly, after the
                  conversion of Units, the total number of outstanding Units at
                  December 31, 2000 was 19,348.2327.

                  On October 10, 2000, the name of the Partnership was changed
                  from The Dennis Fund Limited Partnership to The Fulcrum Fund
                  Limited Partnership.

           B.     Method of Reporting

                  The Partnership's financial statements are presented in
                  accordance with accounting principles generally accepted in
                  the United States of America, which require the use of certain
                  estimates made by the Partnership's management.

           C.     Commodities

                  Gains or losses are realized when contracts are liquidated.
                  Net unrealized gain or loss on open contracts (the difference
                  between contract trade price and quoted market price) is
                  reflected in the statement of financial condition in
                  accordance with Financial Accounting Standards Board
                  Interpretation No. 39 - "Offsetting of Amounts Related to
                  Certain Contracts." Any change in net unrealized gain or loss
                  from the preceding period is reported in the statement of
                  operations. Brokerage commissions include exchange and other
                  trading fees and are charged to expense when contracts are
                  opened.



                                       F-6


<PAGE>



                      THE FULCRUM FUND LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




Note 1.    ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
           (CONTINUED)
           D.     Cash and Cash Equivalents

                  Cash and cash equivalents includes cash and short-term time
                  deposits held at financial institutions.

           E.     Fixed Income Securities

                  Fixed income securities transactions are accounted for on the
                  trade date. Any change in net unrealized gain or loss from the
                  preceding period is reported in the statement of operations.
                  Interest income is recorded on the accrual basis.

           F.     Income Taxes

                  The Partnership prepares calendar year U.S. and applicable
                  state information tax returns and reports to the partners
                  their allocable shares of the Partnership's income, expenses
                  and trading gains or losses.

           G.     Foreign Currency Transactions

                  The Partnership's functional currency is the U.S. dollar;
                  however, it transacts business in currencies other than the
                  U.S. dollar. Assets and liabilities denominated in currencies
                  other than the U.S. dollar are translated into U.S. dollars at
                  the rates in effect at the date of the statement of financial
                  condition. Income and expense items denominated in currencies
                  other than the U.S. dollar are translated into U.S. dollars at
                  the rates in effect during the period. Gains and losses
                  resulting from the translation to U.S. dollars are reported in
                  income currently.

Note 2.    GENERAL PARTNER

           The General Partner of the Partnership is Kenmar Advisory Corp.,
           which conducts and manages the business of the Partnership. The
           Limited Partnership Agreement requires the General Partner to
           maintain a capital account of no less than the lesser of 1% of the
           aggregate capital accounts of all partners or $500,000.

           For managing the continuing offering of units, the General Partner
           receives a monthly offering fee equal to 0.25% (3% annually) of that
           month's beginning Net Asset Value (as defined in the Limited
           Partnership Agreement) of the Partnership. The General Partner
           rebates to One Million Dollar Investors (as defined in the
           Confidential Private Placement Memorandum and Disclosure Document)
           who invested in the Partnership prior to August 1, 2000, a monthly
           amount equal to two-thirds of the offering fee applicable to such One
           Million Dollar Investors. All rebates to One Million Dollar Investors
           prior to January 1, 2001, were made by issuing additional B Units.
           Effective January 1, 2001, all rebates to One Million Dollar
           Investors are made by issuing additional Units.

           A portion of the brokerage commissions paid by the Partnership to the
           broker is, in turn, paid by the broker to the General Partner.



                                       F-7


<PAGE>



                      THE FULCRUM FUND LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




Note 3.    COMMODITY TRADING ADVISORS

           Effective November 1, 2000, the Partnership has an advisory agreement
           with Beacon Management Corporation (USA) (Beacon), a commodity
           trading advisor, pursuant to which the Partnership pays a monthly
           management fee of 1/12 of 2% (2% annually) of the month-end Net Asset
           Value of the subaccount (as defined in the advisory agreement) and a
           quarterly incentive fee equal to 20% of Net New Trading Profits (as
           defined). Beacon pays up to 22.5% of its management and incentive
           fees to the General Partner. During the period November 1, 2000 to
           October 18, 2001, the Partnership had an advisory agreement with
           Stonebrook Structured Products, LLC (Stonebrook), also a commodity
           trading advisor, pursuant to which the Partnership paid a monthly
           management fee equal to 1/12 of 1% (1% annually) of the month-end Net
           Asset Value of the subaccount (as defined) and a quarterly incentive
           fee equal to 10% of Net New Trading Profits (as defined). Stonebrook
           paid its entire incentive fee to the General Partner. During the
           period November 1, 2000 to March 31, 2001, the General Partner waived
           its right to all incentive fees to which it was entitled from Beacon
           and Stonebrook. Accordingly, such incentive fees were not ultimately
           charged to the Partnership, and the gross amount of advisor incentive
           fees reflected in the statements of operations has been reduced after
           total expenses by the advisor incentive fees waived which amounted to
           $123,124 and $134,396 during the years ended December 31, 2001 and
           2000, respectively.

           Prior to November 1, 2000, the Partnership had an advisory agreement
           with Dennis Trading Group, Inc. (Dennis), a commodity trading
           advisor, pursuant to which the A Units paid a monthly management fee
           of 1/6 of 1% (2% annually) of the month-end Net Asset Value of the
           subaccount (as defined in the advisory agreement) and a quarterly
           incentive fee equal to 25% of the Net New Trading Profits (as
           defined). The commodity trading advisor and General Partner each
           received one-half of the management and incentive fees applicable to
           A Units. Pursuant to the advisory agreement, the B Units paid a
           monthly management fee of 1/12 of 1.75% (1.75% annually) of the
           month-end Net Asset Value of the subaccount (as defined) and a
           quarterly incentive fee equal to 27.5% of the Net New Trading Profits
           (as defined). Dennis received 3/7 of the management fee and 7/11 of
           the incentive fee applicable to B Units and the General Partner
           received 4/7 of the management fee and 4/11 of the incentive fee
           applicable to B Units.

Note 4.    DEPOSITS WITH BROKER

           The Partnership deposits cash with Man Financial Inc. to act as
           broker, subject to Commodity Futures Trading Commission regulations
           and various exchange and broker requirements. Margin requirements are
           satisfied by the deposit of cash with such broker. The Partnership
           earns interest income on its cash deposited with the broker.

Note 5.    SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS

           Investments in the Partnership are made by subscription agreement,
           subject to acceptance by the General Partner. The subscription price
           is equal to the Net Asset Value of the units purchased plus a 5%
           selling commission, unless such selling commission is waived in whole
           or in part by the General Partner. Additions to partners' capital are
           shown net of such selling commissions which amounted to $0, $7,388
           and $100,493 in 2002, 2001 and 2000, respectively.


                                       F-8


<PAGE>



                      THE FULCRUM FUND LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




Note 5.    SUBSCRIPTIONS, DISTRIBUTIONS AND REDEMPTIONS (CONTINUED)

           The Partnership is not required to make distributions, but may do so
           at the sole discretion of the General Partner. A Limited Partner may
           request and receive redemption of units owned, subject to
           restrictions in the Limited Partnership Agreement.

Note 6.    TRADING ACTIVITIES AND RELATED RISKS

           The Partnership engages in the speculative trading of U.S. and
           foreign futures contracts and options on U.S. and foreign futures
           contracts (collectively, "derivatives"). The Partnership is exposed
           to both market risk, the risk arising from changes in the market
           value of the contracts, and credit risk, the risk of failure by
           another party to perform according to the terms of a contract.

           Purchase and sale of futures and options on futures contracts
           requires margin deposits with the broker. Additional deposits may be
           necessary for any loss on contract value. The Commodity Exchange Act
           requires a broker to segregate all customer transactions and assets
           from such broker's proprietary activities. A customer's cash and
           other property (for example, U.S. Treasury bills) deposited with a
           broker are considered commingled with all other customer funds
           subject to the broker's segregation requirements. In the event of a
           broker's insolvency, recovery may be limited to a pro rata share of
           segregated funds available. It is possible that the recovered amount
           could be less than total cash and other property deposited.

           The Partnership has a substantial portion of its assets on deposit
           with brokers and dealers in securities and other financial
           institutions in connection with its cash management activities. In
           the event of a financial institution's insolvency, recovery of
           Partnership assets on deposit may be limited to account insurance or
           other protection afforded such deposits.

           For derivatives, risks arise from changes in the market value of the
           contracts. Theoretically, the Partnership is exposed to a market risk
           equal to the notional contract value of futures contracts purchased
           and unlimited liability on such contracts sold short. As both a buyer
           and seller of options, the Partnership pays or receives a premium at
           the outset and then bears the risk of unfavorable changes in the
           price of the contract underlying the option. Written options expose
           the Partnership to potentially unlimited liability, and purchased
           options expose the Partnership to a risk of loss limited to the
           premiums paid.

           The General Partner has established procedures to actively monitor
           market risk and minimize credit risk, although there can be no
           assurance that it will, in fact, succeed in doing so. The Limited
           Partners bear the risk of loss only to the extent of the market value
           of their respective investments and, in certain specific
           circumstances, distributions and redemptions received.








                                      F-9


<PAGE>



                      THE FULCRUM FUND LIMITED PARTNERSHIP
                    NOTES TO FINANCIAL STATEMENTS (CONTINUED)




Note 7.    FINANCIAL HIGHLIGHTS

           The following information presents per unit operating performance
           data and other supplemental financial data for the years ended
           December 31, 2002 and 2001. This information has been derived from
           information presented in the financial statements.

<TABLE>
<CAPTION>
                                                                                             2002             2001
                                                                                             ----             ----
           PER UNIT PERFORMANCE
           (for a unit outstanding throughout the entire year)
           ---------------------------------------------------
<S>                                                                                     <C>                <C>
           Net asset value per unit at beginning of year                                $     877.83       $  1,145.25
                                                                                        ------------       -----------
           Income (loss) from operations:
                  Net investment (loss) (1), (3)                                              (43.90)           (69.54)
                  Net realized and change in unrealized
                      gain (loss) from trading (2), (3)                                        94.11           (197.88)
                                                                                        ------------       -----------
                         Total income (loss) from operations                                   50.21           (267.42)
                                                                                        ------------       -----------
           Net asset value per unit at end of year                                      $     928.04       $    877.83
                                                                                        ============       ===========
           TOTAL RETURN                                                                         5.72 %          (23.35)%
                                                                                        ============       ===========
           SUPPLEMENTAL DATA

           Ratios to average net asset value:
                  Expenses prior to advisor incentive fees (4)                                (6.37)%            (6.62)%
                  Advisor incentive fees                                                       0.00 %            (2.13)% (5)
                                                                                           ---------          ---------
                         Total expenses (1)                                                   (6.37)%            (8.75)% (5)
                                                                                           =========          =========
                  Net investment (loss) (4)                                                   (5.07)%            (4.24)%
                                                                                           =========          =========
</TABLE>

           Total returns are calculated based on the change in value of a unit
           during the year. An individual partner's total returns and ratios may
           vary from the above total returns and ratios based on the timing of
           additions and redemptions.


           -------------------------
           (1)    Excludes brokerage commissions and other trading fees.
           (2)    Includes brokerage commissions and other trading fees.
           (3)    The net investment (loss) per unit is calculated by dividing
                  the net investment (loss) by the average number of units
                  outstanding during the year. The net realized and change in
                  unrealized gain (loss) from trading is a balancing amount
                  necessary to reconcile the change in net asset value per unit
                  with the other per unit information.
           (4)    Excludes brokerage commissions, other trading fees and advisor
                  incentive fees.
           (5)    Net of 0.62% effect of advisor incentive fees waived.








                                      F-10