-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PLOt3af5Ypd3huQLtG1eyxQ9fJoVWlQ0YJS4VZyav5GSl2KZ2IKs3ip72motynZi 2aWUiLk2mmwhPj0eg0ICkQ== 0001170386-09-000028.txt : 20090729 0001170386-09-000028.hdr.sgml : 20090729 20090729131431 ACCESSION NUMBER: 0001170386-09-000028 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090531 FILED AS OF DATE: 20090729 DATE AS OF CHANGE: 20090729 EFFECTIVENESS DATE: 20090729 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLD FUNDS INC /MD/ CENTRAL INDEX KEY: 0001040674 IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-08255 FILM NUMBER: 09969553 BUSINESS ADDRESS: STREET 1: 8730 STONY POINT PARKWAY STREET 2: SUITE 205 CITY: RICHMOND STATE: VA ZIP: 23235 BUSINESS PHONE: 8042677400 MAIL ADDRESS: STREET 1: 8730 STONY POINT PARKWAY STREET 2: SUITE 205 CITY: RICHMOND STATE: VA ZIP: 23235 0001040674 S000008412 CSI Equity Fund C000023088 Class A Shares C000023089 Class C Shares C000023090 Investor Shares CSIIX C000023091 Institutional Shares CSIAX 0001040674 S000008415 Third Millennium Russia Fund C000023097 Class A Shares TMRFX C000023098 Class C Shares TMRCX C000023099 Institutional Shares TMRIX N-Q 1 twf053109nq.txt TWF 053109 NQ QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANIES 811-8255 ------------------------------------------------- Investment Company Act file number THE WORLD FUNDS, INC. -------------------------------------------------- (Exact name of registrant as specified in charter) 8730 STONY POINT PARKWAY, SUITE 205, RICHMOND, VA 23235 -------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Thomas S. Harman Morgan, Lewis, Bockius 1111 Pennsylvania Avenue, Northwest Washington, D.C. 20004 --------------------------------------------------------------------- (Name and address of agent for service) (800) 527-9525 ------------------------------------------------------------------- Registrant's telephone number, including area code: Date of fiscal year end: 08/31 ------------------------------- Date of reporting period: 05/31/2009 ----------------------------------- ITEM 1. SCHEDULE OF INVESTMENTS. The World Funds, Inc. QUARTERLY STATEMENTS OF INVESTMENTS May 31, 2009 (UNAUDITED) - ----------------------------------------------------------------------- CONTENTS: CSI Equity Fund; and Third Millennium Russia Fund CSI EQUITY FUND SCHEDULE OF PORTFOLIO INVESTMENTS May 31, 2009 (Unaudited) Number Market of Shares Description Value -------- --------- ------------- -------- --------- ------------- COMMON STOCKS: 96.62% BEVERAGES: 2.25% 12,000 Pepsico Inc. 624,600 ------------- ------------- COMPUTER AND PERIPHERALS: 2.59% 39,000 Cisco Systems, Inc. 721,500 ------------- ------------- COMPUTER SOFTWARE/SERVICES:5.13% 33,000 Microsoft Corp. 689,370 17,000 SAP ADR 736,950 ------------- ------------- 1,426,320 ------------- ------------- DRUG AND MEDICAL: 12.52% 11,500 Abbott Laboratories 518,190 10,500 Amgen Inc. 524,370 11,000 Johnson & Johnson 606,760 14,700 Novartis AG 588,294 19,500 Roche Holdings LTD ADR 667,680 15,000 Stryker Corp. 576,600 ------------- ------------- 3,481,894 ------------- ------------- ELECTRONICS/EQUIPMENT: 7.08% 38,000 ABB Limited ADR 625,480 19,600 Emerson Electric Co. 628,964 45,500 Intel Corp. 715,260 ------------- ------------- 1,969,704 ------------- ------------- FOOD: 4.90% 25,000 Kraft Foods Inc. 652,750 19,500 Nestle S.A. ADR 711,165 ------------- ------------- . 1,363,915 ------------- ------------- HOUSEHOLD: 4.28% 2,600 Kao Corporation ADR 568,256 12,000 Proctor & Gamble 623,280 ------------- ------------- 1,191,536 ------------- ------------- MANUFACTURING: 12.77% 27,000 Dupont EI 768,690 19,000 Honeywell International, Inc. 630,040 12,700 3M Co. 725,170 30,000 Unilever NV 718,200 13,500 United Technologies 710,235 ------------- ------------- 3,552,335 ------------- ------------- MATERIALS: 3.03% 15,000 BHP Billiton LTD ADR 843,600 ------------- ------------- MULTI-MEDIA: 2.74% 31,500 Walt Disney Co. 762,930 ------------- ------------- OIL: 18.40% 19,700 BASF AG - ADR 833,310 9,000 Chevron Corp. 600,030 13,700 Conocophillips 628,008 14,500 Encana Corp. 803,735 12,500 Royal Dutch Shell PLC 673,875 15,500 Schlumberger Ltd. 887,065 12,000 Total Fina ADR 691,800 ------------- ------------- . 5,117,823 ------------- ------------- RETAIL: 5.42% 14,000 Costco Wholesale 679,280 14,500 Nike, Inc. Class B 827,225 ------------- ------------- 1,506,505 ------------- ------------- TELECOMMUNICATIONS: 7.94% 13,100 China Telecom Ltd Adr 644,651 25,000 Hutchison Whampoa ADR 876,250 45,000 Nokia Corp ADR 688,500 ------------- ------------- 2,209,401 ------------- ------------- TRANSPORTATION: 2.39% ------------- ------------- 12,000 Fedex Corporation 665,160 ------------- ------------- UTILITIES: 5.16% 20,500 EON AG ADR 727,340 12,500 FPL Group 706,625 ------------- ------------- 1,433,965 ------------- ------------- 747,600 Total Securities 96.62% 26,871,188 Cash and Cash Equivalents 3.38% 939,513 ---------- ------------- ---------- ------------- TOTAL INVESTMENTS 100.00% $ 27,810,701 ========== ============= ========== ============= ADR- Security represented is held by the custodian bank in the form of American Depositary Receipts. FAS 157 Footnote Disclosure: The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective January 1, 2008. In accordance with FAS 157, "fair value" is defined as the price that a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. Various inputs are used in determining the value of a Fund's investments. FAS 157 established a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below: Level 1 - quoted prices in active markets for identical securities Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) The following is a summary of the inputs used to value the Fund's investments as of May 31, 2009: Valuation Inputs: Investment in Securities: ----------------- ------------------------- Level 1 - Quoted Prices $ 26,871,188 Level 2 - Other Significant Observable Inputs - Level 3 - Significant Unobservable Inputs - ------------- ------------- Total: $ 26,871,188 ------------- THIRD MILLENNIUM RUSSIA FUND SCHEDULE OF PORTFOLIO INVESTMENTS May 31, 2009 (unaudited) Number of % of Total Market Shares Security Description Investments Value ----------- - ---------- ------------------------------- ----------- - ---------- ------------------------------- ----------- COMMON STOCK: 95.94% AGRICULTURE/CHEMICALS: 11.04% 9,592 Silvinit Preferred 1,918,400 20,000 Stirol Concern ADR 79,100 205,000 Uralkaliy 3,876,550 ----------- ----------- 5,874,050 ----------- ----------- CELLULAR TELECOMMUNICATION: 8.45% 61,000 Mobile Telesystems ADR 2,530,890 150,511 Vimpel Communications ADR 1,965,674 ----------- ----------- 4,496,564 ----------- ----------- CONSTRUCTION: 1.29% 1,000,000 Russian Infrastructure 688,657 ----------- ----------- CONSUMER: 11.62% 2,500,000 Bohdan Automobile Plan 62,662 68,667 Data Art 699,998 71,450 IBS Group Holding GDR 439,015 215,000 Magnit OJSC Spon GDR 1,956,500 138,352 Open Investments GDR 864,700 100,000 Sistema Hals GDR 144A 55,000 120,000 Sollers 960,000 281,481 Ukproduct Group ORD 77,304 66,664 X-5 Retail Group REG S 1,066,624 ----------- ----------- 6,181,803 ----------- ----------- FINANCIAL: 6.98% 420,000 Gaz Capital SA 6.212% 11/22/16 353,850 550,000 Lukoil Intl Fin 6.656% 6/7/22 418,000 474,000 Mobile Tele 8% 1/28/12 457,360 316,800 Russian Fed S/UP 3/31/30 REGS 316,008 1,200,000 Sberbank RF 1,698,000 500,000 TNK BP Finance 7.573% 3/13/13 468,750 ----------- ----------- 3,711,968 ----------- ----------- GAS DISTRIBUTION: 13.52% 115,000 Gazprom OAO Spon ADR 2,662,250 85,000 Novatek OAO Spon GDR 4,471,000 183,554 Teton Energy Corporation 62,408 ----------- ----------- 7,195,658 ----------- ----------- NATURAL RESOURCES: 2.38% 248,000 Ferrexpo 649,044 11,000 Verkhanaya Salda Metal 616,000 ----------- ----------- 1,265,044 ----------- ----------- Number of % of Total Market Shares Security Description Investments Value ----------- - ---------- ------------------------------- ----------- - ---------- ------------------------------- ----------- OIL DISTRIBUTION: 22.47% 50,000 Gazprom Neft Spon ADR 845,000 50,000 Lukoil Oil Co. ADR 2,620,000 605,000 Rosneft Oil GDR 4,059,550 76,666 Tatneft Spon GDR 2,109,082 2,220,570 TNK BP Holdilng ORD 2,320,496 ----------- ----------- 11,954,128 ----------- ----------- STEEL: 4.75% 38,000 Evraz Group GDR 895,660 100,000 Mechel Steel Group 1,101,000 15,000 Novolipetsk Steel GDR 144A 290,250 8,500 Severstal GDR 48,195 25,000 TMK - GDR 192,500 ----------- ----------- 2,527,605 ----------- ----------- UTILITIES: 9.28% 50 Deutsche Bank WTS 12/31/2009 258,812 95,455,000 Federal Grid Co. Unified Energy System Spon G849,550 9,770,000 MRSK Holding 532,465 2,500,000 RAO Eastern Energy System 11,000 1,384,864 Rengen SHS 2,042,148 26,075,410 RusHydro 1,063,877 100,001 Fortum 163,002 800 TGC 14 JSC Spon GDR 144A 2,370 1 TGK 10 OAO Spon GDR 2 7,925 TGK 4 OAO Spon GDR 10,868 3,225 TGK 2 SPON GDR 4,128 ----------- ----------- 4,938,222 ----------- ----------- WIRELINE TELECOMMUNICATION: 4.16% ----------- ----------- 450,000 Comstar GDR 2,214,000 ----------- ----------- Total Securities 95.94% 51,047,699 Cash and Cash Equivalents 4.06% 2,162,854 --------- ----------- --------- ----------- TOTAL INVESTMENTS 100.00% $ 53,210,553 ========= =========== ========= =========== * Non-income producing (security considered non-income producing if at least one dividend has not been paid during the last year preceding the date fo the Fund's related balance sheet.) ADR--Security represented is held by the custodian bank in the form of American Depositary Receipts. GDR--Security represented is held by the custodian bank in the form of Global Depositary Receipts. The Fund adopted Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157, Fair Value Measurements ("FAS 157"), effective January 1, 2008. In accordance with FAS 157, "fair value" is defined as the price that a Fund would receive upon selling an investment in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. Various inputs are used in determining the value of a Fund's investments. FAS 157 established a three-tier hierarchy of inputs to establish a classification of fair value measurements for disclosure purposes. The three-tier hierarchy of inputs is summarized in the three broad Levels listed below: Level 1 - quoted prices in active markets for identical securities Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining fair value of investments) The following is a summary of the inputs used to value the Fund's investments as of May 31, 2009: Investment in Valuation Inputs: Securities ----------- ----------- Level 1 - Quoted Prices 44,795,748 Level 2 - Other Significant Observable Input 3,250,993 Level 3 - Significant Unobservable Inputs 3,000,958 ----------- ----------- Total: $ 51,047,699 ----------- For information on the Fund's policy regarding valuation of investments and other significant accounting policies, please refer to the Fund's most recent semi-annual or annual shareholder report. ITEM 2. CONTROLS AND PROCEDURES. (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the U.S. Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective. (b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q. ITEM 3. EXHIBITS. A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act (17 CFR 270.30a-2(a), exactly as set forth below: Attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) The World Funds, Inc. ----------------------------- By: /s/ John Pasco, III ------------------------------------- John Pasco, III Principal Executive Officer Date: July 29, 2009 ------------------------------------ Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. By: /s/ John Pasco, III ------------------------------------- John Pasco, III Principal Executive Officer Date: July 29, 2009 ------------------------------------ By: /s/ Karen Shupe ------------------------------------- Karen Shupe Principal Financial Officer Date: July 29, 2009 ------------------------------------ EX-99.CERT 2 twf053109nq_officerscert.txt TWF 053109 NQ OFFICERS CERT I, John Pasco, III, certify that: 1. I have reviewed this report on Form N-Q of The World Funds; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the schedule of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s)and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 29, 2009 /s/ John Pasco, III - --------------------- John Pasco, III Principal Executive Officer I, Karen Shupe, certify that: 1. I have reviewed this report on Form N-Q of The World Funds; 2. Based on my knowledge, this 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 report; 3. Based on my knowledge, the schedule of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s)and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: July 29, 2009 /s/ Karen Shupe - --------------------- Karen Shupe Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----