-----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, AEJypbhtTmn0tZlH9BPEqkNQwsLerxQ5Caf2Cy/T6Kg8yojgC9NMZiQFVUfQH7iv YqJF03bFFNQhEA7sC4sDcw== 0000950109-97-000963.txt : 19970222 0000950109-97-000963.hdr.sgml : 19970222 ACCESSION NUMBER: 0000950109-97-000963 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970212 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIMOTHY PLAN CENTRAL INDEX KEY: 0000916490 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 597016828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08228 FILM NUMBER: 97525786 BUSINESS ADDRESS: STREET 1: 1304 W FAIRBANKS AVE CITY: WINTER PARK STATE: FL ZIP: 32789 BUSINESS PHONE: 4076441986 MAIL ADDRESS: STREET 1: 1304 W FAIRBANKS AVE CITY: WINTER PARK STATE: FL ZIP: 32789 N-30D 1 TIMOTHY PLAN ANNUAL 12/31/96 PRESIDENT'S REPORT Dear Shareholder: As promised in my last letter (sent to all but our most recent shareholders), we have completed our national search for a new money manager to serve as investment manager of our Fund. We are pleased to announce that, effective January 1, 1997, Awad & Associates took over the investment selection responsibilities for The Timothy Plan--subject to review by Timothy Partners, Ltd. Mr. Jim Awad, Chairman of Awad & Associates, is one of the most respected--and successful--money managers on Wall Street. Please take a minute to review his letter on the following page to get a sense of his firm's outlook for the year ahead. Our commitment to our shareholders remains firm to deliver top-tier investment returns without compromising moral principles. With the assistance of Awad & Associates, we plan to demonstrate to the investment world that we can do just that! We believe now is the time for Christians and others to exercise responsible stewardship in the investment of the assets with which they have been entrusted. There is a clear connection between our personal moral foundation and the witness we present to the world through our actions--in this case, the care we take in making our investment decisions. The Timothy Plan gives every concerned investor an opportunity to "come out from among them" and invest with the confidence that the investment assets placed with us will be managed conservatively, ethically and as profitably as the markets allow. You are to be commended for your convictions which led you to become part of our ever-growing family of investors. Thank you and may God richly bless you. Sincerely, /s/ Arthur D. Ally Arthur D. Ally President January 1, 1997 AWAD & ASSOCIATES INVESTMENT UPDATE JANUARY 1, 1997 Awad & Associates looks forward with enthusiasm to delivering sound investment results for the shareholders of The Timothy Plan (the "Fund") in 1997. The environment for financial assets is favorable: U.S. corporations are in excellent shape; the economy is growing at a moderate, sustainable rate; corporate profits are growing nicely; inflation remains low and interest rates are subdued. In addition, as the baby boomers begin to save for retirement, the demand for financial assets should grow considerably for the next several years. While always cognizant of risk and mindful that returns should be delivered with a minimum of risk, we at Awad & Associates will attempt to use this environment to ferret out opportunity for the Fund and its shareholders. The Fund is invested in companies which show consistent earnings growth as well as good balance sheets, and where management owns significant amounts of stock. These issues are still selling at low valuations in the marketplace, which should prove to be very beneficial for our existing and future shareholders. We look forward to serving you, while at the same time remaining true to the goals of The Timothy Plan. James D. Awad Chairman SCHEDULE OF INVESTMENTS DECEMBER 31, 1996 - --------------------------------------------------------------------------------
MARKET SHARES VALUE ------ ----------- COMMON STOCKS - 73.41% COMMERCIAL SERVICES - 8.18% 5,700 Deluxe Corp. ............................................. $ 186,675 9,000 Harland (John H.) Co. .................................... 297,000 7,200 McGraw-Hill Companies, Inc. .............................. 332,100 5,600 Pinkerton's, Inc.*........................................ 140,700 ----------- 956,475 ----------- CONSUMER DURABLES - 4.10% 700 Bandag, Inc. ............................................. 33,163 3,000 Jostens, Inc. ............................................ 63,375 10,000 Polaris Industries, Inc. ................................. 237,500 5,400 Stanley Works............................................. 145,800 ----------- 479,838 ----------- CONSUMER NON-DURABLES - 3.22% 5,000 Oshkosh B'Gosh, Inc., Class A............................. 76,250 30,000 Stride Rite Corp. ........................................ 300,000 ----------- 376,250 ----------- ELECTRONIC TECHNOLOGY - 8.95% 3,860 General Dynamics Corp. ................................... 272,130 8,000 General Instrument Corp.*................................. 173,000 5,000 Teradyne, Inc.*........................................... 121,875 4,000 Texas Instruments, Inc. .................................. 255,000 3,400 United Technologies Corp. ................................ 224,400 ----------- 1,046,405 ----------- ENERGY MINERALS - 7.02% 1,600 Atlantic Richfield Co. ................................... 212,000 2,000 British Petroleum Co. PLC ADR............................. 282,750 3,200 MAPCO, Inc. .............................................. 108,800 4,900 Phillips Petroleum Co. ................................... 216,825 ----------- 820,375 ----------- FINANCE - 15.81% 5,500 AFLAC, Inc. .............................................. 235,125 5,410 Allstate Corp. ........................................... 313,104 11,200 American Health Properties, Inc. ......................... 267,400 2,500 American International Group, Inc. ....................... 270,625 3,000 Franklin Resources, Inc. ................................. 205,125 2,900 Household International, Inc. ............................ 267,525 4,000 UNUM Corp. ............................................... 289,000 ----------- 1,847,904 ----------- HEALTH SERVICES - 0.51% 4,500 Syncor International Corp.*............................... 60,187 ----------- HEALTH TECHNOLOGY - 1.75% 3,500 Bio-Rad Laboratories, Inc., Class A*...................... 105,000 5,000 Datascope Corp.*.......................................... 100,000 ----------- 205,000 ----------- NON-ENERGY MINERALS - 0.49% 5,000 J & L Specialty Steel, Inc. .............................. 56,875 -----------
SCHEDULE OF INVESTMENTS DECEMBER 31, 1996 - --------------------------------------------------------------------------------
MARKET SHARES VALUE ------ ----------- COMMON STOCKS - CONTINUED PROCESS INDUSTRIES - 1.57% 4,000 LeaRonal, Inc. ...................................... $ 92,000 2,450 National Service Industries, Inc. ................... 91,569 ----------- 183,569 ----------- PRODUCER MANUFACTURING - 6.43% 6,000 American Standard Companies, Inc.*................... 229,500 3,500 Armstrong World Industries, Inc. .................... 243,250 4,400 Cooper Industries, Inc. ............................. 185,350 2,000 Kaydon Corp. ........................................ 94,250 ----------- 752,350 ----------- RETAIL TRADE - 4.54% 10,000 Brookstone, Inc.*.................................... 105,000 3,500 Penney (J.C.) Co. ................................... 170,625 8,520 Toys "R" Us, Inc.*................................... 255,600 ----------- 531,225 ----------- TECHNOLOGY SERVICES - 2.02% 7,000 Hyperion Software Corp.*............................. 148,750 2,000 National Data Corp. ................................. 87,000 ----------- 235,750 ----------- TRANSPORTATION - 3.80% 9,200 Illinois Central Corp. .............................. 294,400 10,400 Yellow Corp.*........................................ 149,500 ----------- 443,900 ----------- UTILITIES - 5.02% 5,000 Aliant Communications, Inc. ......................... 85,000 3,600 Bell Atlantic Corp. ................................. 233,100 7,300 Carolina Power & Light Co. .......................... 266,450 ----------- 584,550 ----------- TOTAL COMMON STOCKS (COST $7,660,980)................ 8,580,653 ----------- PRINCIPAL AMOUNT --------- SHORT-TERM INVESTMENTS - 26.23% $3,066,028 The Bank of New York Cash Reserve, 4.40%............. 3,066,028 ----------- TOTAL SHORT TERM INVESTMENTS (COST $3,066,028)....... 3,066,028 ----------- TOTAL INVESTMENTS (COST $10,727,008)** - 99.64%...... 11,646,681 OTHER ASSETS, LESS OTHER LIABILITIES - 0.36%......... 42,511 ----------- NET ASSETS - 100.00%................................. $11,689,192 ===========
* Non-income producing security ** Cost for Federal income tax purposes is $10,727,008 and net unrealized appreciation consists of: Gross unrealized appreciation........................ $ 1,052,140 Gross unrealized depreciation........................ (132,467) ----------- Net unrealized appreciation.......................... $ 919,673 =========== See accompanying notes to financial statements. STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996 - -------------------------------------------------------------------------------- ASSETS Investments in securities at market value (identified cost $10,727,008) (Note 1)............................................ $11,646,681 Cash.............................................................. 33,262 Receivables: Dividends and interest........................................... 23,266 Capital stock sold............................................... 905 Deferred organization costs (Note 1).............................. 27,396 Due from Advisor (Note 3)......................................... 2,629 Other assets...................................................... 356 ----------- TOTAL ASSETS.................................................... 11,734,495 ----------- LIABILITIES Capital stock redeemed............................................ 26,394 Accrued expenses.................................................. 18,909 ----------- TOTAL LIABILITIES............................................... 45,303 ----------- NET ASSETS......................................................... $11,689,192 =========== INSTITUTIONAL SHARES: Net assets (Unlimited shares of $0.001 par beneficial interest authorized; 690,247 shares outstanding)................ $ 7,760,309 =========== Net asset value, offering and redemption price per Institutional Share ($7,760,309/ 690,247 shares).............................. $ 11.24 =========== RETAIL SHARES: Net assets (Unlimited shares of $0.001 par beneficial interest authorized; 350,224 shares outstanding)................ $ 3,928,883 =========== Net asset value and redemption price per Retail Share ($3,928,883 / 350,224 shares)................................... $ 11.22 =========== Offering price per share ($11.22 / 0.9825)....................... $ 11.42 =========== SOURCE OF NET ASSETS At December 31, 1996, net assets consisted of: Paid-in capital.................................................. $10,605,097 Accumulated net realized gain on investments..................... 164,422 Net unrealized appreciation on investments....................... 919,673 ----------- NET ASSETS...................................................... $11,689,192 ===========
See accompanying notes to financial statements. STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1996 - -------------------------------------------------------------------------------- INVESTMENT INCOME Dividends........................................................... $ 190,723 Interest............................................................ 55,616 ---------- TOTAL INCOME....................................................... 246,339 ---------- EXPENSES Investment advisory fees (Note 3)................................... 78,848 Transfer agent fees................................................. 68,158 Administration fees................................................. 62,581 Distribution fees (Note 3).......................................... 36,568 Accounting fees..................................................... 36,104 Registration fees................................................... 33,163 Amortization of organization costs (Note 1)......................... 12,378 Printing expense.................................................... 10,798 Custodian fees...................................................... 9,182 Auditing fees....................................................... 6,500 Insurance expense................................................... 2,484 ---------- TOTAL EXPENSES..................................................... 356,764 Expenses waived and reimbursed by Advisor (Note 3)................ (194,967) ---------- NET EXPENSES....................................................... 161,797 ---------- NET INVESTMENT INCOME.............................................. 84,542 ---------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS Net realized gain from security transactions........................ 164,422 Net change in unrealized appreciation of investments................ 903,008 ---------- Net realized and unrealized gain on investments..................... 1,067,430 ---------- Net increase in net assets resulting from operations................ $1,151,972 ==========
See accompanying notes to financial statements. STATEMENT OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED DECEMBER 31, 1996 DECEMBER 31, 1995* ----------------- ------------------ OPERATIONS Net investment income.................... $ 84,542 $ 56,397 Net realized gain on investments......... 164,422 157,742 Net change in unrealized appreciation of investments............................. 903,008 33,350 ----------- ---------- Net increase in net assets resulting from operations........................ 1,151,972 247,489 ----------- ---------- DISTRIBUTIONS TO SHAREHOLDERS Distributions from net investment income: Institutional Shares.................... (66,939) (64,056) Retail Shares........................... (23,283) (5,675) Distributions from net capital gains: Institutional Shares.................... 0 (143,982) Retail Shares........................... 0 (12,195) ----------- ---------- Net decrease in net assets resulting from distributions..................... (90,222) (225,908) ----------- ---------- CAPITAL SHARE TRANSACTIONS Shares sold: Institutional Shares.................... 2,096,319 4,233,412 Retail Shares........................... 3,317,594 626,513 Shares redeemed: Institutional Shares.................... (1,323,483) (562,782) Retail Shares........................... (302,910) 0 Shares reinvested: Institutional Shares.................... 63,849 202,144 Retail Shares........................... 22,639 15,672 ----------- ---------- Increase in net assets derived from capital share transactions (a).......... 3,874,008 4,514,959 ----------- ---------- Total increase in net assets............ 4,935,758 4,536,540 ----------- ---------- NET ASSETS Beginning of period...................... 6,753,434 2,216,894 ----------- ---------- End of period............................ $11,689,192 $6,753,434 =========== ========== (a)Transactions in capital stock were: Shares sold: Institutional Shares................... 201,664 414,090 Retail Shares.......................... 314,924 59,955 Shares redeemed: Institutional Shares................... (126,226) (54,594) Retail Shares.......................... (28,244) 0 Shares reinvested: Institutional Shares................... 5,687 20,174 Retail Shares.......................... 2,022 1,567 ----------- ---------- Increase in shares outstanding.......... 369,827 441,192 =========== ==========
* The Retail Shares commenced investment operations on August 25, 1995. See accompanying notes to financial statements. FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- The table below sets forth financial data for one share of capital stock outstanding throughout each period presented.
INSTITUTIONAL SHARES RETAIL SHARES ----------------------------------------- ----------------------------- FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 1996 1995 1994 * 1996 1995 ** ------------ ------------ -------------- ------------ -------------- NET ASSET VALUE, BEGINNING OF PERIOD.... $ 10.07 $ 9.66 $ 10.00 $ 10.08 $ 10.49 ------- ------ ------- ------- ------- Income From Investment Operations: Net investment income............... 0.10 0.11 0.06 0.07 0.11 Net gains (losses) on securities (both realized and unrealized).......... 1.17 0.66 (0.34) 1.14 (0.16) ------- ------ ------- ------- ------- Total from investment operations........... 1.27 0.77 (0.28) 1.21 (0.05) ------- ------ ------- ------- ------- Less Distributions Distributions from net investment income: Institutional Shares.. (0.10) (0.11) (0.06) 0.00 0.00 Retail Shares......... 0.00 0.00 0.00 (0.07) (0.11) Distributions from net capital gains: Institutional Shares.. 0.00 (0.25) 0.00 0.00 0.00 Retail Shares......... 0.00 0.00 0.00 0.00 (0.25) ------- ------ ------- ------- ------- Total distributions... (0.10) (0.36) (0.06) (0.07) (0.36) ------- ------ ------- ------- ------- NET ASSET VALUE, END OF PERIOD................. $ 11.24 $10.07 $ 9.66 $ 11.22 $ 10.08 ======= ====== ======= ======= ======= TOTAL RETURN............ 12.59% 7.93% (2.84%) 11.98% /1/ (0.46%)/1/ RATIOS/SUPPLEMENTAL DATA Net assets, end of period (in 000s)...... $ 7,760 $6,133 $ 2,217 $ 3,929 $ 620 Ratio of expenses to average net assets: Before expense reimbursement........ 3.70% 5.84% 18.62% /2/ 4.30% 6.44% /2/ After expense reimbursement........ 1.60% 1.60% 1.60% /2/ 2.20% 2.20% /2/ Ratio of net investment income to average net assets: Before expense reimbursement........ (1.05%) (2.96%) (15.49%)/2/ (1.65%) (3.56%)/2/ After expense reimbursement........ 1.05% 1.28% 1.53% /2/ 0.45% 0.68% /2/ Portfolio turnover rate.................. 93.08% 34.12% 8.31% 93.08% 34.12% Average commission rate paid.................. $0.0593 N/R /3/ N/R /3/ $0.0593 N/R /3/
* The Institutional Shares commenced investment operations on March 21, 1994. ** The Retail Shares commenced investment operations on August 25, 1995. /1/Total return calculation does not reflect sales load. /2/Annualized. /3/Not Required. See accompanying notes to financial statements. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 - ------------------------------------------------------------------------------- NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES The Timothy Plan (the "Fund" ) is organized as a series Delaware business trust pursuant to a trust agreement dated December 16, 1993. The Fund is registered under the Investment Company Act of 1940, as amended, as an open- end diversified management investment company. The Fund's objective is long- term capital growth, with a secondary objective of current income. The Fund seeks to achieve its investment objective by investing primarily in common stocks and ADRs while abiding by ethical standards established for investments by the Fund. The Fund currently consists of one series comprised of two separate classes of shares (Institutional Class shares and Retail Class shares) which vary with respect to sales charges, distribution costs, voting rights and dividends. Shareholders of Retail Class shares are subject to a sales charge and each class is subject to different 12b-1 Plan expenses. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The policies are in conformity with generally accepted accounting principles for investment companies. A. SECURITY VALUATION. Investments in securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the period. Unlisted securities, or listed securities in which there were no sales, are valued at the mean of the closing bid and ask prices. Short-term obligations with remaining maturities of 60 days or less are valued at cost plus accrued interest which approximates market value. B. INVESTMENT INCOME AND SECURITIES TRANSACTIONS. Security transactions are accounted for on the date the securities are purchased or sold (trade date). Cost is determined and gains and losses are based on the identified cost basis for both financial statement and federal income tax purposes. Dividend income and distributions to shareholders are reported on the ex-dividend date. Interest income and expenses are accrued daily. C. NET ASSET VALUE PER SHARE. Net asset value per share of the capital stock of the Fund is determined daily as of the close of trading on the New York Stock Exchange by dividing the value of its net assets by the number of Fund shares outstanding. Net Asset Value is calculated separately for each class of the Fund based on expenses applicable to a particular class. The net asset value of the classes may differ because of different fees and expenses charged to each class. D. ORGANIZATION COSTS. Organization costs are being amortized on a straight line basis over five years. E. FEDERAL INCOME TAXES. It is the policy of the Fund to comply with all requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no federal income tax provision is required. F. USE OF ESTIMATES. In preparing financial statements in conformity with generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. NOTE 2 - PURCHASES AND SALES OF SECURITIES Purchases and sales of securities, other than short-term investments, aggregated $9,127,059 and $6,937,670 respectively, for the year ended December 31, 1996. NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996 - -------------------------------------------------------------------------------- NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Timothy Partners, LTD., (the "Advisor") is the investment advisor for the Fund pursuant to an Investment Advisory Agreement (the "Agreement") effective March 21, 1994, as amended August 28, 1995. Under the terms of the Agreement, the Advisor receives a fee, accrued daily and paid monthly, at an annual rate of 0.85% of the average daily net assets of the Fund. The Advisor has voluntarily agreed to waive its fees to the extent total annualized expenses, inclusive of distribution expenses, exceed 1.60%, with respect to the Institutional Class, and 2.20%, with respect to the Retail Class, of the Fund's average daily net assets. For the year ended December 31, 1996, Advisory fees of $78,848 were waived by the Advisor and the Advisor reimbursed the Fund $194,967. For the year ended December 31, 1996, Systematic Financial Management, L.P., was paid by the advisor, a monthly fee at an annual rate of 0.50% of the average daily net assets of the Fund. Effective January 1, 1997 the Fund and the Advisor engaged a new investment manager, Awad & Associates, pursuant to a new sub- investment advisory agreement. The Fund has adopted a Distribution Plan (the "Plan"), on behalf of each class of shares, pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended, which permits the Fund to pay certain expenses associated with the distribution of its shares. The Plan provides that the Fund will reimburse FPS Broker Services, Inc. (the "Distributor"), the Fund's sole underwriter and distributor, for actual distribution and shareholder servicing expenses incurred by the Distributor not exceeding, on an annual basis, 0.25%, with respect to the Institutional Class and 0.85%, with respect to the Retail Class, of the Fund's average daily net assets. For the year ended December 31, 1996, the Fund reimbursed the Distributor $36,568 for distribution costs incurred. Certain officers and trustees of the Fund are affiliated persons of the Advisor. - -------------------------------------------------------------------------------- ILLUSTRATION OF $10,000 INVESTMENT TIMOTHY PLAN PERFORMANCE GRAPH (INSTITUTIONAL CLASS) [LINE GRAPH APPEARS HERE] (INSTITUTIONAL CLASS) - ----------------------------------------- AVERAGE ANNUAL TOTAL RETURN - ----------------------------------------- 1 Year: 12.59% Since Inception: 6.16% - ----------------------------------------- Date S&P 500 TIMOTHY INDEX PLAN 3/21/94 10,000 10,000 4/94 9,686.42 9,760. 6/94 9,604.07 9,530. 8/94 10,325.76 10,020. 10/94 10,299.42 9,980. 12/94 10,071.4 9,715.63 2/95 10,735.21 9,816.21 4/95 11,377.93 10,097.82 6/95 12,107.57 10,409.61 8/95 12,540.82 10,540.36 10/95 13,022.99 10,349.26 12/95 13,857.08 10,485.81 2/96 14,461.47 10,756.55 4/96 14,814.92 11,141.82 6/96 15,254.9 11,079.35 8/96 14,888.28 10,735.72 10/96 16,160.55 11,193.89 12/96 17,038.11 11,805.83 Past performance is not indicative of future results. (RETAIL CLASS) [LINE GRAPH APPEARS HERE] Past performance is not indicative of future results. Note: The above graph reflects the impact of sales charges which were placed on purchased. (RETAIL CLASS) - ----------------------------------------- AVERAGE ANNUAL TOTAL RETURN - ----------------------------------------- 1 Year: 10.00% Since Inception: 6.83% - ----------------------------------------- Date S&P 500 TIMOTHY INDEX PLAN 8/25/95 10,000 9,825 8/95 10,025 9,794.39 9/95 10,448.06 9,869.15 10/95 10,410.44 9,616.82 11/95 10,867.46 9,943.92 12/95 11,077.2 9,758.75 1/96 11,453.83 9,807.16 2/96 11,560.35 10,000.79 3/96 12,670.14 10,097.6 4/96 12,856.39 10,359. 5/96 13,188.09 10,436.45 6/96 13,238.2 10,281.54 7/96 12,653.07 9,710.35 8/96 12,920.05 9,952.38 9/96 13,647.45 10,194.41 10/96 14,024.12 10,368.68 11/96 15,084.35 10,959.23 12/96 14,785.68 10,928.27 Past performance is not indicative of future results. Note: The above graph reflects the impact of sales charges which were placed on purchases. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS - ------------------------------------------------------------------------------- BOARD OF TRUSTEES AND SHAREHOLDERS THE TIMOTHY PLAN WINTER PARK, FLORIDA We have audited the accompanying statement of assets and liabilities of The Timothy Plan, including the schedule of investments, as of December 31, 1996 and the related statement of operations for the year then ended, and the statement of changes in net assets for each of the two years then ended and the financial highlights for each of the two years then ended and for the period March 21, 1994 (commencement of operations) to December 31, 1994. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1996, by correspondence with the custodian. 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 and financial highlights referred to above present fairly, in all material respects, the financial position of The Timothy Plan as of December 31, 1996, the results of its operations for the year then ended, the changes in its net assets for each of the two years then ended and the financial highlights for each of the two years then ended and for the period March 21, 1994 to December 31, 1994, in conformity with generally accepted accounting principles. /s/ Tait, Weller & Baker PHILADELPHIA, PENNSYLVANIA JANUARY 17, 1997 THE TIMOTHY PLAN 1304 West Fairbanks Avenue Winter Park, FL 32789 BOARD OF TRUSTEES Arthur D. Ally Joseph E. Boatwright Daniel D. Busby Philip B. Crosby Wesley W. Pennington Mark Schweizer Jock M. Sneddon OFFICERS Arthur D. Ally, President Joseph E. Boatwright, Secretary Wesley W. Pennington, Treasurer INVESTMENT ADVISOR Timothy Partners, LTD. 1304 West Fairbanks Avenue Winter Park, FL 32789 DISTRIBUTOR FPS Broker Services, Inc. 3200 Horizon Drive King of Prussia, PA 19406 TRANSFER AGENT FPS Services, Inc. 3200 Horizon Drive King of Prussia, PA 19406 AUDITORS Tait, Weller & Baker Two Penn Center Plaza, Suite 700 Philadelphia, PA 19102 LEGAL COUNSEL Stradley Ronon Stevens & Young, LLP 2600 One Commerce Square Philadelphia, PA 19103 FOR ADDITIONAL INFORMATION OR A PROSPECTUS, PLEASE CALL: 1-800-TIM-PLAN (1-800-846-7526) This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus which includes details regarding the Fund's objectives, policies, expenses and other information. [ARTWORK APPEARS HERE] ANNUAL REPORT December 31, 1996 -----END PRIVACY-ENHANCED MESSAGE-----