-----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, JPc/uglKpw7hB56oPXEQqWUc/yYvey0pumZXncwJKfaCQvh94BtJCRBYGHsMO1G/ E8an2/XgIxMzlt6tmYe5bw== 0000898531-03-000260.txt : 20030723 0000898531-03-000260.hdr.sgml : 20030723 20030626144531 ACCESSION NUMBER: 0000898531-03-000260 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030430 FILED AS OF DATE: 20030626 EFFECTIVENESS DATE: 20030626 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RICHARDSON T O TRUST CENTRAL INDEX KEY: 0001064663 STATE OF INCORPORATION: MA FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08849 FILM NUMBER: 03758415 BUSINESS ADDRESS: STREET 1: TWO BRIDGEWATER ROAD CITY: FARMINGTON STATE: CT ZIP: 06032-2256 BUSINESS PHONE: 8606778578 MAIL ADDRESS: STREET 1: TWO BRIDGEWATER ROAD CITY: FARMINGTON STATE: CT ZIP: 06032-2256 N-CSR 1 srf-ncsr.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-8849 T.O. RICHARDSON TRUST TWO BRIDGEWATER ROAD FARMINGTON, CONNECTICUT 06032-2256 SAMUEL BAILEY, JR. T.O. RICHARDSON COMPANY, INC. TWO BRIDGEWATER ROAD FARMINGTON, CONNECTICUT 06032-2256 1-800-235-1022 Date of fiscal year end: OCTOBER 31, 2003 Date of reporting period: APRIL 30, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. - -------------------------------- T.O. RICHARDSON TRUST SECTOR ROTATION FUND Semi-Annual Report April 30, 2003 T.O. RICHARDSON COMPANY T.O. Richardson Trust June 2, 2003 Dear Fellow Shareholders, We are happy to report that the stock market has shown evidence during the past two months of a potential end to the three year slide. In addition, the gains seen in April have accelerated during the month of May. The following charts and financial statements reflect performance and operations of the T.O. Richardson Sector Rotation Fund for its semi-annual year ending April 30, 2003. It is important to remember that it is normal, as the market changes to an upward direction, for the Fund to initially lag the market because our strategy is trend following and the market itself established the trend. While two months does not assure us of a change in long term trends, many of the uncertainties articulated before the beginning of the war in Iraq have resolved themselves favorably. Sector investing is driven by technical analysis and recently all major market indices have broken above their November highs. In addition, almost all industry sector groups have moved to positive territory whereas, when the market is weak or falling, few sectors show positive improvement. We have increasing confidence in our ability to make gains in the current markets. We thank you for your continued confidence in T.O. Richardson. Sincerely, /s/Samuel Bailey, Jr. Samuel Bailey, Jr. President T.O. Richardson Sector Rotation Fund Date Sector Rotation Fund S&P 500 Stock Index ---- -------------------- ------------------- 12/31/98 $10,000 $10,000 1/31/99 $11,210 $10,418 4/30/99 $11,261 $10,905 7/31/99 $11,650 $10,887 10/31/99 $12,130 $11,203 1/31/00 $16,237 $11,495 4/30/00 $17,715 $12,008 7/31/00 $16,537 $11,863 10/31/00 $17,190 $11,884 1/31/01 $13,735 $11,391 4/30/01 $11,879 $10,450 7/31/01 $11,219 $10,163 10/31/01 $10,600 $8,924 1/31/02 $10,361 $9,551 4/30/02 $10,109 $9,130 7/31/02 $9,270 $7,761 10/31/02 $8,934 $7,576 1/31/03 $8,110 $7,352 4/30/03 $8,249 $7,915 This chart assumes an initial investment of $10,000, made on 12/31/98 (inception). Performance reflects fee waivers and does not reflect a non- recurring early withdrawal fee of 1%. In the absence of fee waivers and the addition of the non-recurring fee, the total return would be reduced. Returns shown include the reinvestment of all dividends and other distributions. Past performance is not predictive of future performance. Investment return and principal value will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. Unlike the S&P 500, the fund is focused on a few stocks in a small number of sectors and investors are exposed to the risk that a specific sector will fall rapidly in value. The S&P Stock Index is an unmanaged stock index with no fees, therefore, there are differences in performance, risk and expenses between the fund and the index. RATE OF RETURN(%) FOR THE PERIOD ENDED APRIL 30, 2003 SIX MONTHS ANNUALIZED ENDED SINCE INCEPTION 4/30/03 12/31/98 ---------- --------------- T.O. Richardson Sector Rotation Fund (7.67)% (4.35)% Standard & Poor's 500 Stock Index 4.48% (5.25)% T.O. RICHARDSON SECTOR ROTATION FUND SCHEDULE OF INVESTMENTS APRIL 30, 2003 (UNAUDITED) SHARES VALUE ------ ----- COMMON STOCK - 76.0% APPAREL & FOOTWEAR - 3.4% 2,600 Coach, Inc. * $ 113,126 1,900 NIKE, Inc. - Class B 101,707 2,400 The Timberland Company - Class A * 119,976 ----------- 334,809 ----------- BANKS - 7.1% 2,900 Banco Itau Holding Financeira SA - ADR (1) 96,570 4,500 Banco Santander Chile SA - ADR (1) 98,190 5,000 BancorpSouth, Inc. 100,500 3,200 First BanCorp. 98,784 2,300 First Tennessee National Corporation 100,740 10,800 Fremont General Corporation 101,088 2,200 International Bancshares Corporation 96,382 ----------- 692,254 ----------- BIOMEDICAL - 7.6% 1,700 Amgen Inc. * 104,210 10,500 Diversa Corporation * 108,570 10,100 Exact Sciences Corporation * 96,354 2,800 Genzyme Corporation * 112,784 13,800 ID Biomedical Corporation * (1) 102,258 2,900 IDEC Pharmaceuticals Corporation * 94,975 4,300 Integra LifeSciences Holdings * 114,724 ----------- 733,875 ----------- CHEMICALS - 1.1% 5,700 Bayer AG - ADR (1) 103,740 ----------- DATA PROCESSING - 1.0% 1,900 Fair Isaac Corporation 98,952 ----------- DRUGS - 4.2% 3,800 Celgene Corporation * 101,118 3,000 MedImmune, Inc. * 105,810 5,400 Sepracor Inc. * 103,410 2,100 Teva Pharmaceutical Industries Ltd. - ADR (1) 98,070 ----------- 408,408 ----------- E-COMMERCE / SERVICES- 3.2% 3,800 Amazon.com, Inc. * 109,022 6,300 Digital Insight Corporation * 101,871 1,100 eBay Inc. * 102,212 ----------- 313,105 ----------- EDUCATION - 1.1% 2,500 University of Phoenix Online * 110,350 ----------- FINANCE - 9.1% 2,500 Capital One Financial Corporation 104,675 1,500 Countrywide Financial Corporation 101,400 1,300 Fannie Mae 94,107 1,600 Freddie Mac 92,640 8,800 Friedman, Billings, Ramsey Group, Inc. - Class A 96,624 1,800 Legg Mason, Inc. 97,740 1,500 Lehman Brothers Holdings Inc. 94,455 2,700 New Century Financial Corporation 99,441 13,300 Providian Financial Corporation * 98,021 ----------- 879,103 ----------- MEDICAL PRODUCTS & INSTRUMENTS - 8.9% 18,600 Align Technology, Inc. * 139,500 8,300 ArthroCare Corporation * 126,824 1,600 C. R. Bard, Inc. 101,408 3,800 Datascope Corp. 108,676 11,400 Hologic, Inc. * 102,600 2,100 Medtronic, Inc. 100,254 7,700 Noven Pharmaceuticals, Inc. * 74,151 2,000 St. Jude Medical, Inc. * 104,920 ----------- 858,333 ----------- MEDICAL SERVICES - 2.1% 11,200 Chronimed Inc. * 92,960 14,800 MIM Corporation * 108,336 ----------- 201,296 ----------- REAL ESTATE INVESTMENT TRUSTS - 3.0% 2,500 Chelsea Property Group, Inc. 99,150 1,700 General Growth Properties, Inc. 94,554 2,500 Vornado Realty Trust 95,000 ----------- 288,704 ----------- RESTAURANTS - 2.3% 2,700 P.F. Chang's China Bistro, Inc. * 113,130 3,300 Panera Bread Company - Class A * 112,299 ----------- 225,429 ----------- RETAIL - 4.4% 2,500 Bed Bath & Beyond Inc. * 98,750 5,800 Movie Gallery, Inc. * 108,054 2,700 Tractor Supply Company * 114,345 1,800 Wal-Mart Stores, Inc. 101,376 ----------- 422,525 ----------- SAVINGS AND LOANS - 9.3% 4,200 Dime Community Bancshares 96,852 3,000 FirstFed Financial Corp. * 97,470 3,100 Flagstar Bancorp, Inc. 102,610 1,300 Golden West Financial Corporation 98,046 2,100 GreenPoint Financial Corp. 100,296 3,800 Harbor Florida Bancshares, Inc. 101,194 4,400 Hudson City Bancorp, Inc. 102,212 2,900 New York Community Bancorp, Inc. 100,688 2,500 Washington Mutual, Inc. 98,750 ----------- 898,118 ----------- THERAPEUTICS - 5.8% 13,000 Abgenix, Inc. * 123,500 5,500 Amylin Pharmaceuticals, Inc. * 105,050 11,800 Cell Therapeutics, Inc. * 106,200 10,700 Esperion Therapeutics, Inc. * 121,980 2,400 Gilead Sciences, Inc. * 110,736 ----------- 567,466 ----------- TOYS - 2.4% 4,100 Leapfrog Enterprises, Inc. * 109,470 7,300 Marvel Enterprises, Inc. * 122,932 ----------- 232,402 ----------- TOTAL COMMON STOCKS (Cost $7,013,109) 7,368,869 ----------- EXCHANGE TRADED FUNDS - 15.5% 19,800 Consumer Discretionary Select Sector SPDR Fund 500,940 21,400 Financial Select Sector SPDR Fund 500,118 6,300 iShares Russell 2000 Index Fund 500,220 ----------- TOTAL EXCHANGE TRADED FUNDS (Cost $1,494,287) 1,501,278 ----------- PRINCIPAL AMOUNT --------- SHORT-TERM INVESTMENTS - 23.8% U.S. GOVERNMENT AGENCY OBLIGATIONS - 19.2% Federal Home Loan Bank Discount Note $1,864,000 1.00%, 5/01/2003 1,864,000 ----------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 1,864,000 ----------- VARIABLE RATE DEMAND NOTES# - 4.6% 11,197 American Family Financial Services Inc., 0.91% 11,197 373,808 U.S. Bank, 1.07% 373,808 58,533 Wisconsin Corporate Central Credit Union, 0.99% 58,533 ----------- TOTAL VARIABLE RATE DEMAND NOTES 443,538 ----------- TOTAL SHORT-TERM INVESTMENTS (Cost $2,307,538) 2,307,538 ----------- TOTAL INVESTMENTS - 115.3% (Cost $10,814,934) 11,177,685 LIABILITIES, LESS OTHER ASSETS - (15.3)% (1,484,386) ----------- TOTAL NET ASSETS - 100.0% $ 9,693,299 ----------- ----------- (1) Foreign Security. * Non-income producing security. # Variable rate demand notes are considered short-term obligations and are payable on demand. Interest rates change periodically on specified dates. The rates listed are as of April 30, 2003. ADR American Depository Receipt. See notes to the financial statements. T.O. RICHARDSON TRUST STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 2003 (UNAUDITED) T.O. RICHARDSON SECTOR ROTATION FUND --------------- ASSETS: Investments, at value (cost $10,814,934) $11,177,685 Dividends and interest receivable 2,633 Other assets 45,643 ----------- Total Assets 11,225,961 ----------- LIABILITIES: Payable to Advisor 13,867 Payable for investments purchased 1,484,106 Accrued expenses and other liabilities 34,689 ----------- Total Liabilities 1,532,662 ----------- NET ASSETS $ 9,693,299 ----------- ----------- NET ASSETS CONSIST OF: Capital stock $30,012,330 Accumulated undistributed net realized loss on investments sold (20,681,782) Net unrealized appreciation on investments 362,751 ----------- TOTAL NET ASSETS $ 9,693,299 ----------- ----------- Shares Outstanding 1,641,674 (No par value, unlimited shares authorized) NET ASSET VALUE, REDEMPTION PRICE AND OFFERING PRICE PER SHARE $ 5.90 ----------- ----------- See notes to the financial statements. T.O. RICHARDSON TRUST STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED) T.O. RICHARDSON SECTOR ROTATION FUND --------------- INVESTMENT INCOME: Dividend income (net of foreign withholding taxes of $40) $ 18,833 Interest income 27,035 ----------- Total investment income 45,868 ----------- EXPENSES: Investment advisory fee 81,318 Federal and state registration 8,268 Administration fee 19,110 Shareholder servicing and accounting costs 34,420 Professional fees 14,403 Reports to shareholders 2,712 Custody fees 9,729 Trustees' fees and expenses 6,352 Insurance Expense 9,181 ----------- Total operating expenses before expense reductions and reimbursements by Advisor (Note 5) 185,493 Expense reductions (Note 6) (46,899) Expense reimbursement from Advisor (32,880) ----------- Net expenses 105,714 ----------- NET INVESTMENT LOSS (59,846) ----------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments (1,058,594) Change in unrealized appreciation/depreciation on investments 174,465 ----------- Net realized and unrealized loss on investments (884,129) ----------- NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (943,975) ----------- ----------- See notes to the financial statements. T.O. RICHARDSON TRUST STATEMENTS OF CHANGES IN NET ASSETS T.O. RICHARDSON SECTOR ROTATION FUND ------------------------------------ SIX MONTHS ENDED YEAR ENDED APRIL 30, 2003 OCTOBER 31, 2002 ---------------- ---------------- (UNAUDITED) OPERATIONS: Net investment loss $ (59,846) $ (117,202) Net realized loss on: Investments (1,058,594) (2,594,898) Option contracts expired or closed -- (300,017) Change in unrealized appreciation/depreciation on investments 174,465 287,023 ----------- ----------- Net decrease in net assets resulting from operations (943,975) (2,725,094) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income -- (351,025) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Proceeds from shares sold 801,989 1,900,894 Issued as reinvestment of dividends -- 346,793 Cost of shares redeemed (2,461,657) (8,471,603) ----------- ----------- Net decrease in net assets resulting from capital share transactions (1,659,668) (6,223,916) ----------- ----------- TOTAL DECREASE IN NET ASSETS (2,603,643) (9,300,035) NET ASSETS: Beginning of period 12,296,942 21,596,977 ----------- ----------- End of period $ 9,693,299 $12,296,942 ----------- ----------- ----------- -----------
See notes to the financial statements. T.O. RICHARDSON TRUST FINANCIAL HIGHLIGHTS Selected per share data is based on a share of beneficial interest outstanding throughout the period. T.O. RICHARDSON SECTOR ROTATION FUND ------------------------------------------------------------------------------------ SIX MONTHS YEAR ENDED YEAR ENDED YEAR ENDED FOR THE PERIOD ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, DECEMBER 31, 1998(1) APRIL 30, 2003 2002 2001 2000 TO OCTOBER 31, 1999 -------------- ----------- ----------- ----------- ------------------------ (UNAUDITED) PER SHARE DATA: Net asset value, beginning of period $ 6.39 $ 7.71 $16.06 $12.13 $10.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income (loss) (0.04)(2) (0.06)(2) 0.13 0.08 0.02 Net realized and unrealized gain (loss) on investments (0.45) (1.13) (5.41) 4.82 2.11 ------ ------ ------ ------ ------ Total from investment operations (0.49) (1.19) (5.28) 4.90 2.13 ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income -- (0.13) (0.09) (0.02) -- Distributions from net realized gains -- -- (2.98) (0.95) -- ------ ------ ------ ------ ------ Total distributions -- (0.13) (3.07) (0.97) -- ------ ------ ------ ------ ------ Net asset value, end of period $ 5.90 $ 6.39 $ 7.71 $16.06 $12.13 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ Total return (7.67)%(3) (15.71)% (38.33)% 41.72% 21.30%(3) Supplemental data and ratios: Net assets, end of period (000's) $9,693 $12,297 $21,597 $62,820 $33,780 Ratio of net operating expenses to average net assets 1.95%(4)(6)(7) 1.95%(6)(7) 1.55%(6)(7) 1.86%(5)(7) 1.95%(4)(6) Ratio of net investment income (loss) to average net assets (1.10)%(4)(6) (0.70)%(6) 1.04%(6) 0.56%(5) 0.36%(4)(6) Portfolio turnover rate 566.02% 1007.45% 742.97% 863.94% 946.15%
(1) Commencement of operations. (2) Net investment income per share is calculated using ending balances prior to consideration of adjustments for permanent book and tax differences. (3) Not annualized. (4) Annualized. (5) Ratio includes Advisor expense waiver recovery. The Advisor expense waiver recovery ratio for the period ended October 31, 2000 was 0.05%. (6) Operating expense is net of reimbursement and waivers. The ratio excluding reimbursements and waivers for the six months ended April 30, 2003 and the periods ended October 31, 2002, October 31, 2001 and October 31, 1999 would have been 2.56%, 2.09%, 1.55% and 2.51%, respectively. The ratio of net investment income (loss) to average net assets, excluding reimbursements and waivers for the six months ended April 30, 2003 and the periods ended October 31, 2002, October 31, 2001 and October 31, 1999 would have been (1.71%), (0.84%), 1.04% and (0.20)%, respectively. (7) The net operating expense ratio includes expense reductions from directed brokerage credits. The ratio excluding expense reductions from directed brokerage credits for the six months ended April 30, 2003 and the periods ended October 31, 2002, October 31, 2001 and October 31, 2000 was 2.82%, 2.59%, 2.08% and 1.95%, respectively. See notes to the financial statements. T.O. Richardson Trust NOTES TO THE FINANCIAL STATEMENTS APRIL 30, 2003 (UNAUDITED) 1. ORGANIZATION The T.O. Richardson Sector Rotation Fund (the "Fund") is a series of the T.O. Richardson Trust (the "Trust"), a voluntary business association organized on June 2, 1998 in the Commonwealth of Massachusetts, and is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end diversified management investment company. The principal investment objective of the Fund is to seek capital appreciation with some protection against down markets. The Fund commenced operations on December 31, 1998. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States. (a) Investment Valuation Common stocks and other equity-type securities are valued at the last sales price on the securities exchange on which they are usually traded or, if there is no such reported sale, securities are valued at the average of the most recent bid and asked prices. Fixed income securities are valued by pricing services that use electronic data processing techniques to determine values. Any securities or other assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Fund's Trustees. The Board of Trustees may approve the use of pricing services to assist the Fund in determining the Net Asset Value. (b) Federal Income and Excise Taxes The Fund intends to comply with the requirements of the Internal Revenue Code necessary to qualify as a regulated investment company and to make the requisite distributions of net investment income and net realized capital gains to its shareholders sufficient to relieve it from all or substantially all Federal income and excise taxes. (c) Distributions to Shareholders Dividends from net investment income are declared and paid annually. Distributions of net realized capital gains, if any, will be declared and paid at least annually. The Fund may utilize earnings and profits distributed to shareholders on redemption of shares as part of the dividends paid deduction. Accordingly, reclassifications would be made within the net asset accounts for such amounts, as well as amounts related to permanent differences in the character of certain income and expense items for income tax and financial reporting purposes. (d) Security Transactions and Investment Income Investment transactions are recorded on the trade date for financial statement purposes. The Fund determines the gain or loss realized from the investment transactions by comparing the original cost of the security lot sold with the net sale proceeds. Dividend income is recognized on the ex- dividend date and interest income is recognized on an accrual basis. Acquisition and market discount for debt securities are amortized over the life of the security. (e) Purchased Option Accounting Premiums paid for option contracts purchased are included in the Statements of Assets and Liabilities as an asset. Option contracts are valued at the average of the current bid and asked price reported on the day of valuation. When option contracts expire or are closed, realized gains or losses are recognized without regard to any unrealized gains or losses on the underlying securities. (f) Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and use assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. 3. CAPITAL SHARE TRANSACTIONS Transactions in shares of the Fund were as follows: T.O. RICHARDSON SECTOR ROTATION FUND SIX MONTHS ENDED APRIL 30, 2003 ----------------------------- $ SHARES ---------- ---------- Shares sold $ 801,989 136,572 Shares issued to holders in reinvestment of dividends 0 0 Shares redeemed (2,461,657) (418,964) ----------- --------- Net decrease $(1,659,668) (282,392) ----------- ----------- Shares Outstanding: Beginning of period 1,924,066 --------- End of period 1,641,674 --------- --------- YEAR ENDED OCTOBER 31, 2002 ----------------------------- $ SHARES ---------- ---------- Shares sold $ 1,900,894 264,451 Shares issued to holders in reinvestment of dividends 346,793 46,055 Shares redeemed (8,471,603) (1,187,777) ----------- --------- Net decrease $(6,223,916) (877,271) ----------- ----------- Shares Outstanding: Beginning of period 2,801,337 --------- End of period 1,924,066 --------- --------- 4. INVESTMENT TRANSACTIONS The aggregate purchases and sales of securities, excluding short-term investments by the Fund for the period ending April 30, 2003, were as follows: T.O. RICHARDSON SECTOR ROTATION FUND -------------------- Purchases $37,597,736 Sales $36,413,372 There were no purchases or sales of long-term U.S. government securities by the Fund. 5. INVESTMENT ADVISORY AGREEMENT The Trust has an Investment Advisory Agreement (the "Agreement") with T.O. Richardson Company, Inc. (the "Advisor") with whom certain Officers and Trustees of the Trust are affiliated, to furnish investment advisory services to the Fund. Under the terms of the Agreement, the Trust, on behalf of the Fund, compensates the Advisor for its management services at the annual rate of 1.50% of the Fund's average daily net assets. For the period November 1, 2001 through January 13, 2002, the Advisor agreed to waive its investment advisory fee and/or reimburse the Fund (exclusive of brokerage, taxes and extraordinary expenses) to the extent necessary to ensure that the Fund's total operating expenses did not exceed 1.95% of its average daily net assets. For the period January 14, 2002 through April 30, 2003, the Advisor agreed to waive its investment advisory fee and/or reimburse the Fund (exclusive of brokerage, taxes and extraordinary expenses) to the extent necessary to ensure that the Fund's total operating expenses, net of directed brokerage credits, did not exceed 1.95% of its average daily net assets. The Advisor may recover from the Fund the expenses paid in excess of the cap on expenses for the three previous years, as long as the recovery does not cause the Fund to exceed such cap on expenses. For the six months ending April 30, 2003, the Advisor waived investment advisory fees totaling $32,880 for the Fund. Reimbursed/absorbed expenses subject to potential recovery by year of expiration are as follows: YEAR OF SECTOR ROTATION EXPIRATION FUND ---------- --------------- 10/31/2002 $29,560 10/31/2004 $45,846 10/31/2005 $22,536 10/31/2006 $32,880 6. EXPENSE REDUCTIONS The Advisor had directed certain of the Fund's portfolio trades to brokers at best price and execution and has generated directed brokerage credits to reduce certain service provider fees. Shareholders benefit under this arrangement as the net expenses of the Fund do not include such service provider fees. For the period ended April 30, 2003, the total operating expenses of the Fund were reduced by $46,899, by utilizing directed brokerage credits. Directed brokerage credits resulted in an expense ratio being charged to shareholders of 1.95%. In accordance with Securities and Exchange Commission requirements, such amounts are required to be shown as an expense and have been included in each of the service provider fees in the Statements of Operations. 7. INFORMATION FOR FEDERAL INCOME TAX PURPOSES As of April 30, 2003: Cost of Investments $10,814,934 Gross Unrealized Appreciation $ 419,869 Gross Unrealized Depreciation (57,118) ----------- Net Unrealized Appreciation on Investments $ 362,751 ----------- ----------- As of October 31, 2002: Undistributed Ordinary Income $ -- Undistributed Long-Term Gain $ -- The tax components of dividends and long-term capital gain distributions paid during the year ended October 31, 2002 and capital loss carryovers as of October 31, 2002 are as follows: ORDINARY LONG-TERM NET CAPITAL LOSS INCOME CAPITAL GAIN CAPITAL LOSS CARRYOVER DIVIDENDS DISTRIBUTIONS CARRYOVER* EXPIRATION --------- ------------- --------------- ---------- $351,025 $ -- $16,728,273 10/31/2009 $ 2,894,915 10/31/2010 * Capital gain distributions will resume in the future to the extent gains are realized in excess of the available carryforwards. T.O. Richardson Company, Inc. Two Bridgewater Road Farmington, Connecticut 06032-2256 800.235.1022 For more information about the T.O. Richardson Trust Mutual Funds call 800.643.7477 www.torich.com Shares distributed through T.O. Richardson Securities, Inc., affiliate of the advisor, T.O. Richardson Company, Inc. ITEM 2. CODE OF ETHICS. - ----------------------- Not applicable to annual reports filed for periods ending before July 15, 2003. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. - ----------------------------------------- Not applicable to annual reports filed for periods ending before July 15, 2003. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. - ----------------------------------------------- Not required for annual reports filed for periods ending before December 15, 2003. ITEM 5. [RESERVED] - ------------------ ITEM 6. [RESERVED] - ------------------ ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END - -------------------------------------------------------------------------- MANAGEMENT INVESTMENT COMPANIES - ------------------------------- Not applicable to open-end investment companies. ITEM 8. [RESERVED] - ------------------ ITEM 9. CONTROLS AND PROCEDURES. - -------------------------------- (a) Based on their evaluation of the Registrant's Disclosure Controls and Procedures as of a date within 90 days of the Filing Date, the Registrant's President and Treasurer/CFO have determined that the Disclosure Controls and Procedures (as defined in Rule 30a-2(c) under the Act) are designed to ensure that information required to be disclosed by the Registrant is recorded, processed, summarized and reported by the filing Date, and that information required to be disclosed in the report is communicated to the Registrant's management, as appropriate, to allow timely decisions regarding required disclosure. (b) There were no significant changes in the Registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, and there were no corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. - ------------------ (a) Any code of ethics or amendment thereto. Not applicable to annual reports for periods ending before July 15, 2003. (b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. (c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Filed herewith. 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) T.O. Richardson Trust --------------------------------------------------------- By (Signature and Title) /s/Samuel Bailey, Jr. ----------------------------------------------- Samuel Bailey, Jr., President and Treasurer Date 6-18-03 ------------------------------------------------------------------- EX-99.CERT 3 srf-ex99cert.txt Exhibit 10(b) CERTIFICATIONS -------------- I, Samuel Bailey, Jr., certify that: 1. I have reviewed this report on Form N-CSR of the T.O. Richardson Trust; 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 financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) 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 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 report (the "Evaluation Date"); and c) presented in this 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 officers 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 the 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 officers and I have indicated in this 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: 6-18-03 /s/Samuel Bailey, Jr. ------------------- ---------------------------- Samuel Bailey, Jr. President and Treasurer Exhibit 10(c) CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT --------------------------------------------------------------- Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the T.O. Richardson Trust, do hereby certify, to such officer's knowledge, that the report on Form N-CSR of the T.O. Richardson Trust for the six months ended April 30, 2003 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operations of the T.O. Richardson Trust. /s/Samuel Bailey, Jr. Samuel Bailey, Jr. President and Treasurer, T.O. Richardson Trust Dated: 6-18-03 ---------------------------- A signed original of this written statement required by Section 906 has been provided to T.O. Richardson Trust and will be retained by T.O. Richardson Trust and furnished to the SEC or its staff upon request. -----END PRIVACY-ENHANCED MESSAGE-----