-----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, JRT6EZamtYq9u2R6ulMZDHVzfoK48avTu3rg+BbOgGoSgHjCvPYZ1SM9bIQuXXpi /w1/dgsly2lT8oK+KQ0jZw== 0001035449-03-000108.txt : 20030306 0001035449-03-000108.hdr.sgml : 20030306 20030306165450 ACCESSION NUMBER: 0001035449-03-000108 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030306 EFFECTIVENESS DATE: 20030306 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TIMOTHY PLAN CENTRAL INDEX KEY: 0000916490 IRS NUMBER: 597016828 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08228 FILM NUMBER: 03594984 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-CSR 1 timothyncsr1202.txt TIMOTHY 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 811-08228 Timothy Plan (Exact name of registrant as specified in charter) 1304 W. Fairbanks Ave. Winter Park, FL 32789 (Address of principal executive offices) (Zip code) Arthur Alley , Timothy Plan, 1304 W. Fairbanks Ave. Winter Park, FL 32789 (Name and address of agent for service) Registrant's telephone number, including area code: 407-644-1986 Date of fiscal year end: 12/31 Date of reporting period: 12/31/02 Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. 3507. Item 1. Reports to Stockholders. December 31, 2002 Dear Shareholder: While this may sound like deja vu (all over again as Yogi Berra would say), the sky is not falling - even though it may seem like it at times. We have now endured a nearly historic and almost unprecedented third consecutive year of negative market returns (although, thankfully, some of our equity funds were actually up in two of those three years.) The question at hand is: will we have a fourth such year in 2003? Although we are seeing some encouraging economic recovery signs, the two major negatives over-hanging the market at this writing are the seemingly inevitable war with Iraq and further potential terrorist attacks. While either or both of these could produce some short-term market damage, I firmly believe the underlying strength of our nation's capital markets will digest and overcome either or both of these concerns should they occur. If history means anything, and I believe it does, then the twelve months following the end of a bear market have almost always produced very strong positive returns. In all too many cases, those investors that finally lost heart and capitulated toward the end of bear markets of longer duration have stood on the sidelines and missed the recovery. I have said all that to say this: your Timothy Plan has some of the finest, proven and respected money managers in the industry serving as our sub-advisors and we have every confidence that we will fully participate in the recovery that we expect to follow this extraordinarily long and painful bear market. Once again, my admonition to you is simply this - hang in there, we believe you'll be glad you did. Sincerely, Arthur D. Ally, President Returns for the Year Ended December 31, 2002 - ---------------------------------------- ------------------ ------------- --------------------------- Fund/Index 12 Months 5 Years Average Annual Total Total Return Average Return Annual Since Inception Return - ---------------------------------------- ------------------ ------------- --------------------------- - ---------------------------------------- ------------------ ------------- --------------------------- Timothy Small Cap Value Fund - Class A (a) (With sales charge) -23.47% -1.27% 3.46% - ---------------------------------------- - ---------------------------------------- ------------------ ------------- --------------------------- Russell 2000 Index (a) -20.48% -1.36% 5.67% - ---------------------------------------- ------------------ ------------- --------------------------- - ---------------------------------------- ------------------ ------------- --------------------------- Timothy Small Cap Value Fund - Class B (b) (With CDSC) -23.86% -1.14% 3.41% - ---------------------------------------- ------------------ ------------- --------------------------- - ---------------------------------------- ------------------ ------------- --------------------------- Russell 2000 Index (b) -20.48% -1.36% 4.53% - ---------------------------------------- ------------------ ------------- ---------------------------
(a) For the period March 24, 1994 (commencement of investment in accordance with objective) to December 31, 2002. (b) For the period August 25, 1995 (commencement of investment in accordance with objective) to December 31, 2002. Small A Russell 2000 3/24/94 9,478.67 10,000.00 12/31/94 9,209.13 9,487.46 12/31/95 9,939.16 12,186.72 12/31/96 11,190.36 14,196.82 12/31/97 13,579.37 17,371.71 12/31/98 12,154.15 16,929.47 12/31/99 13,683.18 20,528.10 12/31/00 15,219.92 19,907.94 12/31/01 16,690.72 20,402.82 12/31/02 13,477.61 16,223.66 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund A shares, and the Russell 2000 Index on March 24, 1994 and held through December 31, 2002. The Russell 2000 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Small B Russell 2000 8/25/95 10,000.00 10,000.00 12/31/95 9,954.12 10,439.54 12/31/96 11,147.06 12,161.45 12/31/97 13,431.85 14,881.16 12/31/98 11,930.73 14,502.33 12/31/99 13,246.45 17,585.03 12/31/00 14,686.39 17,053.78 12/31/01 15,973.72 17,477.72 12/31/02 12,802.30 13,897.71 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund B shares, and the Russell 2000 Index on August 25, 1995 and held through December 31, 2002. The Russell 2000 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Returns for the Year Ended December 31, 2002 - -------------------------------------------- ------------------ ----------------------------- Fund/Index 12 Months Average Annual Total Return Total Return Since Inception - -------------------------------------------- ------------------ ----------------------------- - -------------------------------------------- ------------------ ----------------------------- Timothy Large/Mid- Cap Value Fund - Class A (e)(With sales charge) -20.30% -3.81% - -------------------------------------------- - -------------------------------------------- ------------------ ----------------------------- S&P 500 Index (e) -22.10% -11.31% - -------------------------------------------- ------------------ ----------------------------- - -------------------------------------------- ------------------ ----------------------------- Timothy Large/Mid- Cap Value Fund - Class B (f)(With CDSC) -20.65% -3.94% - -------------------------------------------- ------------------ ----------------------------- - -------------------------------------------- ------------------ ----------------------------- S&P 500 Index (f) -22.10% -11.52% - -------------------------------------------- ------------------ -----------------------------
(e) For the period July 14, 1999 (commencement of investment in accordance with objective) to December 31, 2002. (f) For the period July 15, 1999 (commencement of investment in accordance with objective) to December 31, 2002. Large A S&P 500 7/14/99 9,478.67 10,000.00 12/31/99 9,215.34 10,569.26 6/30/00 9,063.02 10,524.15 12/31/00 10,353.07 9,607.24 6/30/01 10,773.70 8,963.94 12/31/01 10,387.07 8,466.29 6/30/02 10,137.70 7,352.53 12/31/02 8,737.41 6,595.64 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund A shares, and the S&P 500 Index on July 14, 1999 and held through December 31, 2002. The S&P 500 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Large B S&P 500 7/15/99 10,000.00 10,000.00 12/31/99 9,401.49 10,483.14 6/30/00 9,401.49 10,438.40 12/31/00 10,692.39 9,528.96 6/30/01 11,085.78 8,890.90 12/31/01 10,627.36 8,397.31 6/30/02 10,333.85 7,292.62 12/31/02 8,876.38 6,541.90 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund B shares, and the S&P 500 Index on July 15, 1999 and held through December 31, 2002. The S&P 500 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Returns for the Year Ended December 31, 2002 - ---------------------------------------------- -------------- ------------------------- Fund/Index 12 Months Average Annual Total Total Return Return Since Inception - ---------------------------------------------- -------------- ------------------------- - ---------------------------------------------- -------------- ------------------------- Timothy Fixed Income Fund - Class A (c) (With sales charge) 5.65% 3.93% - ---------------------------------------------- - ---------------------------------------------- -------------- ------------------------- Dow Jones Bond Index (c) 11.29% 8.91% - ---------------------------------------------- -------------- ------------------------- - ---------------------------------------------- -------------- ------------------------- Timothy Fixed Income Fund - Class B (d) (With CDSC) 4.27% 3.74% - ---------------------------------------------- -------------- ------------------------- - ---------------------------------------------- -------------- ------------------------- Dow Jones Bond Index (d) 11.29% 9.50% - ---------------------------------------------- -------------- -------------------------
(c) For the period July 14, 1999 (commencement of investment in accordance with objective) to December 31, 2002. (d) For the period August 5, 1999 (commencement of investment in accordance with objective) to December 31, 2002. Fixed A DJ Bond 7/14/99 9,578.54 10,000.00 9/30/99 9,616.86 9,969.60 12/31/99 9,519.33 9,973.82 3/31/00 9,400.80 10,132.59 6/30/00 9,361.68 10,237.31 9/30/00 9,559.96 10,592.01 12/31/00 9,739.80 10,912.09 3/31/01 10,073.69 11,360.53 6/30/01 10,128.70 11,444.13 9/30/01 10,291.78 11,917.07 12/31/01 10,360.64 12,083.44 3/31/02 10,233.82 11,855.42 6/30/02 10,551.72 12,121.44 9/30/02 11,182.42 12,584.35 12/31/02 11,430.06 13,447.34 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund A shares, and the Dow Jones Bond Index on July 14, 1999 and held through December 31, 2002. The Dow Jones Bond Index is widely recognized, unmanaged index of bond prices. Performance figures include the change in value of the bonds in the index and the reinvestment of interests. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. .. Fixed B DJ Bond 8/5/99 10,000.00 10,000.00 9/30/99 10,000.00 10,100.97 12/31/99 9,928.83 10,105.25 3/31/00 9,744.34 10,266.11 6/30/00 9,713.60 10,372.21 9/30/00 9,922.40 10,731.58 12/31/00 10,139.62 11,055.87 3/31/01 10,262.91 11,510.23 6/30/01 10,201.35 11,594.93 9/30/01 10,586.58 12,074.10 12/31/01 10,558.88 12,242.66 3/31/02 10,414.82 12,011.64 6/30/02 10,706.48 12,281.17 9/30/02 11,333.18 12,750.18 12/31/02 11,563.72 13,624.54 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund B shares, and the Dow Jones Bond Index on August 5, 1999 and held through December 31, 2002. The Dow Jones Bond Index is widely recognized, unmanaged index of bond prices. Performance figures include the change in value of the bonds in the index and the reinvestment of interests. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Returns for the Year Ended December 31, 2002 - ----------------------------------------------- --------------- ----------------------------- Fund/Index 12 Months Average Annual Total Return Total Return Since Inception - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Timothy Aggressive Growth Fund - Class A (g)(With sales charge) -34.67% -31.22% - ----------------------------------------------- - ----------------------------------------------- --------------- ----------------------------- Russell Mid Cap Growth Index (g) -38.08% -33.17% - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Timothy Aggressive Growth Fund - Class B (h)(With CDSC) -35.12% -31.18% - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Russell Mid Cap Growth Index (h) -38.08% -32.73% - ----------------------------------------------- --------------- -----------------------------
(g) For the period October 5, 2000 (commencement of investment in accordance with objective) to December 31, 2002. (h) For the period October 9, 2000 (commencement of investment in accordance with objective) to December 31, 2002. Aggr A Russell 10/5/00 9,478.67 10,000.00 12/31/00 7,914.69 8,195.28 3/31/01 6,132.70 6,139.50 6/30/01 7,127.96 7,132.99 9/30/01 5,213.27 5,150.13 12/31/01 6,265.40 6,543.89 3/31/02 6,284.36 6,428.26 6/30/02 5,241.71 5,254.44 9/30/02 4,350.71 4,351.85 12/31/02 4,322.27 4,052.06 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund A shares, and the Russell Mid Cap Growth Index on October 5, 2000 and held through December 31, 2002. The Russell Mid Cap Growth Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Aggr B Russell 10/9/00 10,000.00 10,000.00 12/31/00 8,340.00 8,353.55 3/31/01 6,450.00 6,258.07 6/30/01 7,480.00 7,270.74 9/30/01 5,470.00 5,249.59 12/31/01 6,560.00 6,670.26 3/31/02 6,560.00 6,552.40 6/30/02 5,460.00 5,355.91 9/30/02 4,530.00 4,435.90 12/31/02 4,480.00 4,130.31 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund B shares, and the Russell Mid Cap Growth Index on October 9, 2000 and held through December 31, 2002. The Russell Mid Cap Growth Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Returns for the Year Ended December 31, 2002 - ----------------------------------------------- --------------- ----------------------------- Fund/Index 12 Months Average Annual Total Return Total Return Since Inception - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Timothy Large/Mid Cap Growth Fund - Class A (i)(With sales charge) -33.07% -27.44% - ----------------------------------------------- - ----------------------------------------------- --------------- ----------------------------- Russell 1000 Growth Index (i) -38.59% -34.13% - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Timothy Large/Mid Cap Growth Fund - Class B (j)(With CDSC) -33.42% -27.32% - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Russell 1000 Growth Index (j) -38.59% -33.44% - ----------------------------------------------- --------------- -----------------------------
(i) For the period October 5, 2000 (commencement of investment in accordance with objective) to December 31, 2002. (j) For the period October 9, 2000 (commencement of investment in accordance with objective) to December 31, 2002. Growth A Russell 1000 10/5/00 9,478.67 10,000.00 12/31/00 8,929.95 8,028.32 4/30/01 7,612.26 7,153.62 8/31/01 6,436.77 6,164.13 12/31/01 6,901.28 6,388.69 4/30/02 6,010.18 5,715.49 8/31/02 4,995.84 4,797.44 12/31/02 4,872.61 3,923.39 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund A shares, and the Russell 1000 Growth Index on October 5, 2000 and held through December 31, 2002. The Russell 1000 Growth Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Growth B Russell 1000 10/9/00 10,000.00 10,000.00 12/31/00 9,410.60 8,254.42 4/30/01 8,000.51 7,355.09 8/31/01 6,750.43 6,337.73 12/31/01 7,220.46 6,568.61 4/30/02 6,280.40 5,876.46 8/31/02 5,210.33 4,932.55 12/31/02 5,060.32 4,033.89 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund B shares, and the Russell 1000 Growth Index on October 9, 2000 and held through December 31, 2002. The Russell 1000 Growth Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Returns for the Year Ended December 31, 2002 - ----------------------------------------------- --------------- ----------------------------- Fund/Index 12 Months Average Annual Total Return Total Return Since Inception - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Timothy Strategic Growth Fund - Class A (m)(With sales charge) -29.27% -20.33% - ----------------------------------------------- - ----------------------------------------------- --------------- ----------------------------- S&P 500 Index (m) -22.10% -18.47% - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Timothy Strategic Growth Fund - Class B (n)(With CDSC) -29.56% -20.04% - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- S&P 500 Index (n) -22.10% -17.67% - ----------------------------------------------- --------------- -----------------------------
(m) For the period October 5, 2000 (commencement of investment in accordance with objective) to December 31, 2002. (n) For the period October 9, 2000 (commencement of investment in accordance with objective) to December 31, 2002. Strat A S&P 500 10/5/00 9,478.67 10,000.00 12/31/00 9,109.00 9,218.08 3/31/01 7,772.51 8,125.66 6/30/01 8,360.19 8,600.84 9/30/01 6,928.91 7,339.11 12/31/01 8,049.92 8,123.35 3/31/02 8,201.80 8,145.56 6/30/02 7,043.68 7,054.70 9/30/02 5,800.12 5,836.63 12/31/02 6,009.15 6,328.47 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund A shares, and the S&P 500 Index on October 5, 2000 and held through December 31, 2002. The S&P 500 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Strat B S&P 500 10/9/00 10,000.00 10,000.00 12/31/00 9,610.00 9,441.55 3/31/01 9,180.00 8,322.66 6/30/01 8,780.00 8,809.35 9/30/01 7,270.00 7,517.03 12/31/01 8,443.69 8,320.29 3/31/02 8,583.92 8,343.03 6/30/02 7,361.94 7,225.73 9/30/02 6,049.81 5,978.13 12/31/02 6,260.35 6,481.89 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund B shares, and the S&P 500 Index on October 9, 2000 and held through December 31, 2002. The S&P 500 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Returns for the Year Ended December 31, 2002 - ----------------------------------------------- --------------- ----------------------------- Fund/Index 12 Months Average Annual Total Return Total Return Since Inception - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Timothy Conservative Growth Fund - Class A (k)(With sales charge) -17.59% -10.59% - ----------------------------------------------- - ----------------------------------------------- --------------- ----------------------------- S&P 500 Index (k) -22.10% -18.47% - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- Timothy Conservative Growth Fund - Class B (l)(With CDSC) -17.93% -10.41% - ----------------------------------------------- --------------- ----------------------------- - ----------------------------------------------- --------------- ----------------------------- S&P 500 Index (l) -22.10% -17.67% - ----------------------------------------------- --------------- -----------------------------
(k) For the period October 5, 2000 (commencement of investment in accordance with objective) to December 31, 2002. (l) For the period October 9, 2000 (commencement of investment in accordance with objective) to December 31, 2002. Con A S&P 500 10/5/00 9,478.67 10,000.00 12/31/00 9,450.24 9,218.08 3/31/01 8,625.59 8,125.66 6/30/01 8,995.26 8,600.84 9/30/01 8,094.79 7,339.11 12/31/01 8,948.17 8,123.35 3/31/02 9,175.91 8,145.56 6/30/02 8,464.23 7,054.70 9/30/02 7,524.81 5,836.63 12/31/02 7,781.11 6,328.47 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund A shares, and the S&P 500 Index on October 5, 2000 and held through December 31, 2002. The S&P 500 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. Con B S&P 500 10/9/00 10,000.00 10,000.00 12/31/00 9,960.00 9,441.55 3/31/01 9,070.00 8,322.66 6/30/01 9,440.00 8,809.35 9/30/01 8,470.00 7,517.03 12/31/01 9,339.23 8,320.29 3/31/02 9,559.45 8,343.03 6/30/02 8,808.70 7,225.73 9/30/02 7,807.72 5,978.13 12/31/02 8,068.07 6,481.89 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund B shares, and the S&P 500 Index on October 9, 2000 and held through December 31, 2002. The S&P 500 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index return does not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of the fund shares. The Fund's return represents past performance and is not predictive of future results. OFFICERS AND TRUSTEES OF THE TRUST December 31, 2002 (Unaudited) TIMOTHY PLAN FAMILY OF FUNDS The following is a complete listing of all officers and directors of The Timothy Plan. It includes background and biography information for the benefit of the shareholders of the Funds. Date & Positions Held Principal Occupation Name, Address & Age with Fund During Past 5 Years P1 O2 ----------------------------------------------------------------------------------------------------------------------------- Arthur D. Ally Trustee, President of President and controlling shareholder of 10 0 the Trust, Chairman of Covenant Funds, Inc. ("CFI"), (Year of Birth: 1942)* the Board of Trustees a holding company. President and general Since January 1994 partner of Timothy Partners Ltd. ("TPL"), 1304 W. Fairbanks Avenue the investment adviser and principal underwriter to each Fund. CFI is also Winter Park, FL the managing general partner of TPL. ---------------------------------------------------------------------------------------------------------------------------- Joseph E. Boatwright Trustee, Secretary Retired Minister. Currently serves as a 10 0 Since April 1995 consultant to the Greater Orlando Baptist (Year of Birth: 1930)** Association. Served as Senior Pastor to the Aloma Baptist Church from 1970-1996. 1410 Hyde Park Drive Winter Park, FL ---------------------------------------------------------------------------------------------------------------------------- Wesley W. Pennington Trustee, Treasurer Retired Air Force Officer. Past President, 10 0 Since January 1994 Westwind Holdings, Inc., a development (Year of Birth: 1930) company, since 1997. Past President and controlling shareholder, Weston, Inc., 442 Raymond Avenue a fabric treatment company, from 1979-1997. President, Designer Services Group, 1980-1988. Longwood, FL ---------------------------------------------------------------------------------------------------------------------------- Jock M. Sneddon Trustee Physician, Florida Hospital Centra Center. 10 0 (Year of Birth: 1947)** 6001 Vineland Drive Since January 1997 Orlando, FL ---------------------------------------------------------------------------------------------------------------------------- W. Thomas Fyler, Jr. Trustee President, controlling shareholder of W.T. 10 0 Fyler, Jr./Ephesus, Inc., a New York (Year of Birth: 1957) State registered investment advisory firm. Founding member of the National Association 640 Ft Washington Ave Since December 1998 of Christian Financial Consultants. Suite 6C New York, NY 10040 ----------------------------------------------------------------------------------------------------------------------------- Mathew D. Staver Trustee Attorney specializing in free speech, 10 0 appellate practice and religious liberty (Year of Birth: 1956)** constitutional law.Founder of Liberty Counsel, a religious civil liberties 210 East Palmetto Ave. Since June 2000 education and legal defense organization. Host of two radio programs devoted to Longwood, FL 32750 religious freedom issues. Editor of a monthly newsletter devoted to religious liberty topics. Mr. Staver has argued before the United States Supreme Court and has published numerous legal articles. ----------------------------------------------------------------------------------------------------------------------------- Charles E. Nelson Trustee Certified Public Accountant. Director of 10 0 Operations, National Multiple Sclerosis Society Mid Florida Chapter. Formerly Director of Finance, Hospice of the Comforter, Inc., a non-profit organization. (Year of Birth: 1934) Formerly Comptroller, Florida United Methodist Children's Home, Inc. Formerly Credit Specialist 1145 Cross Creek Since June 2000 with the Resolution Trust Corporation and Senior Executive Vice President, Barnett Bank Altamonte Springs, FL of Central Florida, N.A. Formerly managing partner, Arthur Anderson, CPA firm, Florida branch. ----------------------------------------------------------------------------------------------------------------------------- Mark A. Minnella Trustee Principal and co-founder of Intergrity 10 0 Investors, LLC., a registered investment (Year of Birth: 1955) advisory firm. Co-founder, treasurer and 1215 Fern Ridge Parkway Since June 2000 director of the National Association of Christian Christian Financial Consultants.Mr. Minnella Suite 110 is a Registered Investment Principal (NASD Series 24), (NASD Series 24), and a registered Creve Coeur, MO investment adviser (NASD Series 65). ----------------------------------------------------------------------------------------------------------------------------- William Dodson Trustee Vice President - Sales, CPCF, Inc. a 10 0 registered broker-dealer and a subsidiary of the California Baptist Foundation and the (Year of Birth: 1960) California Southern Baptist Convention. Mr. Dodson is a General Securities Principal 7120 N. Whitney Avenue Since November 2001 (series 24) and licensed minister. Mr. Dodson has previous experience as a Fresno, CA 93720 General Securities Representative (Series 7) with two national brokerage firms. -----------------------------------------------------------------------------------------------------------------------------
*Mr. Ally is an "interested" Trustee, as that term is defined in the 1940 Act, because of his positions with and financial interests in CFI and TPL. ** Messrs. Boatwright, Sneddon and Staver are "interested" Trustees, as that term is defined in the 1940 Act, because each has a limited partnership interest in TPL. 1 Number of portfolios in fund complex overseen by Director 2 Other Directorships held by Director SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 77.07% number of shares market value BALL & ROLLER BEARINGS - 3.18% 55,600 Kaydon Corp. $ 1,179,276 ----------------- CANNED, FROZEN & PRESERVED FRUIT, VEGETABLES & FOOD SPECIALTIES - 3.33% 41,000 Corn Products International, Inc. $ 1,235,330 ----------------- CONSUMER CREDIT REPORTING, COLLECTION AGENCIES - 3.82% 88,900 NCO Group, Inc. * $ 1,417,955 ----------------- DENTAL EQUIPMENT & SUPPLIES - 3.42% 61,000 Apogent Technologies, Inc. * $ 1,268,800 ----------------- DRAWING & INSULATING NONFERROUS WIRE - 2.60% 63,500 Belden, Inc. $ 966,470 ----------------- ELECTRIC & OTHER SERVICES COMBINED - 3.64% 59,500 ALLETE, Inc. $ 1,349,460 ----------------- INDUSTRIAL INSTRUMENTS FOR MEASUREMENT, DISPLAY, AND CONTROL - 3.60% 72,500 Cognex Corp. * $ 1,336,175 ----------------- INVESTMENT ADVICE - 2.48% 33,600 Investors Financial Services Corp. $ 920,304 ----------------- MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES - 3.12% 87,000 Rayovac Corp. * $ 1,159,710 ----------------- MISCELLANEOUS PLASTIC PRODUCTS - 3.72% 67,000 Spartech Corp. $ 1,382,210 ----------------- PHARMACEUTICAL PREPARATIONS - 0.13% 2,000 K-V Pharmaceutical Co. - Class A * $ 46,400 ----------------- PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 1.83% 124,800 Concord Camera Corp. * $ 677,664 ----------------- PUBLIC WAREHOUSING & STORAGE - 2.94% 33,000 Iron Mountain, Inc. * $ 1,089,330 ----------------- RAILROADS, LINE-HAUL OPERATING - 2.59% 80,000 Kansas City Southern Industries, Inc. * $ 960,000 ----------------- RETAIL-EATING PLACES - 3.03% 65,000 Ruby Tuesday, Inc. $ 1,123,850 ----------------- RETAIL-FAMILY CLOTHING STORES - 2.93% 51,700 Stage Stores, Inc. * $ 1,087,768 ----------------- SECURITY BROKERS, DEALERS & FLOTATION COMPANIES - 3.65% 60,500 Investment Technology Group, Inc. * $ 1,352,780 -----------------
SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 77.07% (cont.) number of shares market value SERVICES - BUSINESS SERVICES - 12.76% 65,000 Sourcecorp,Inc. * $ 1,208,350 53,000 Startek, Inc. * 1,462,800 71,800 Teletech Holdings, Inc. * 521,268 69,000 Viad Corp. 1,542,150 ----------------- 4,734,568 ----------------- SERVICES - EMPLOYMENT AGENCIES - 1.11% 55,000 Korn/Ferry International * $ 411,400 ----------------- SERVICES - COMPUTER INTEGRATED SYSTEMS DESIGN - 2.84% 87,500 Henry Jack & Associates, Inc. $ 1,053,500 ----------------- SERVICES - MISCELLANEOUS HEALTH & ALLIED SERVICES - 1.82% 110,000 Hooper Holmes, Inc. $ 675,400 ----------------- SPECIAL INDUSTRY MACHINERY - 2.49% 164,500 Axcelis Technologies, Inc. * $ 922,680 ----------------- STATE COMMERCIAL BANKS - 2.91% 32,000 North Fork Bancorp, Inc. $ 1,079,680 ----------------- TELEPHONE & TELEGRAPH APPARATUS - 3.16% 77,500 Plantronics, Inc. * $ 1,172,575 ----------------- Total Common Stocks (cost $30,455,400) 28,603,285 -----------------
SHORT TERM INVESTMENTS - 10.77% number of shares market value 2,000,000 Federated Cash Trust Series II $ 2,000,000 2,000,000 First American Treasury Obligation Fund 2,000,000 ----------------- Total Short Term Investments (cost $4,000,000) 4,000,000 -----------------
REPURCHASE AGREEMENTS - 12.20% principal amount market value $ 4,526,000 U.S. Bank Repurchase Agreement $ 4,526,000 1.05%, dated 12/31/02, due 1/2/03, repurchase price $4,526,260, collateralized by $4,661,780 by FHLMC, 5/1/17 Total Repurchase Agreements (cost $4,526,000) 4,526,000 ----------------- TOTAL INVESTMENTS - 100.04% (identified cost $38,981,400) 33,129,285 LIABILITIES IN EXCESS OF OTHER ASSETS - (0.04)% (16,367) ----------------- NET ASSETS - 100.00% $ 33,112,918 =================
* Non-income producing securities STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 ASSETS amount Investments in Securities at Value (identified cost $38,981,400) [NOTE 1] $ 37,129,285 Cash 981 Receivables: Interest 2,333 Dividends 28,105 Fund Shares Sold 51,994 Prepaid Expense and Other Receivables 12,717 Fund Share Commissions Receivable From Advisor 1,918 ------------------- Total Assets $ 37,227,333 =================== LIABILITIES amount Accrued Advisory Fees $ 27,025 Accrued 12b-1 Fees 14,224 Payable for Fund Shares Redeemed 42,031 Accrued Expenses 31,135 ------------------- Total Liabilities $ 114,415 =================== NET ASSETS amount Class A Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 2,031,518 shares outstanding) $ 22,603,423 Net Asset Value and Redemption Price Per Class A Share $ 11.13 ($22,603,423/2,031,518 shares) Offering Price Per Share ($11.13/0.9475) $ 11.75 Class B Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 1,370,694 shares outstanding) $ 14,509,495 Net Asset Value and Offering Price Per Class B Share ($14,509,495/1,370,694 shares) $ 10.59 Maximum Redemption Price Per Class B Share ($10.59 x 0.95) $ 10.06 Net Assets $ 37,112,918 =================== SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $ 39,025,780 Accumulated Net Realized Loss on Investments $ (60,747) Net Unrealized Depreciation in Value of Investments $ (1,852,115) ------------------- Net Assets $ 37,112,918 ===================
STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 INVESTMENT INCOME amount Interest $ 55,554 Dividends 467,202 ------------------- Total Investment Income 522,756 ------------------- EXPENSES amount Investment Advisory Fees [NOTE 3] $ 338,392 12b-1 Fess (Class A = $57,686, Class B =$125,159) [NOTE 3] 182,845 Auditing Fees 37,675 Service Fees (Class B) [NOTE 3] 41,705 Accounting Fees 24,642 Legal Expense 9,228 Registration Fees 24,310 Transfer Agent Fees (Class A = $60,952, Class B = $40,201) 101,153 Insurance Expense 11,309 Custodian Fees 12,378 Administration Fees 11,726 Pricing Expense 3,017 Printing Expense 9,211 Miscellaneous Expense 4,656 ------------------- Total Net Expenses 812,247 ------------------- Net Investment (Loss) (289,491) ------------------- REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS amount Net Realized Loss on Investments (42,848) Change in Unrealized Appreciation of Investments (8,276,735) ------------------- ------------------- Net Realized and Unrealized (Loss) on Investments (8,319,583) ------------------- Decrease in Net Assets Resulting from Operations $ (8,609,074) ===================
STATEMENT OF CHANGES IN NET ASSETS INCREASE (DECREASE) IN NET ASSETS year ended year ended 12/31/02 12/31/01 Operations: Net Investment (Loss) $ (289,491) $ (437,127) Net Change in Unrealized Appreciation (Depreciation) of Investments (8,276,735) 3,714,604 Net Realized (Loss) on Investments (42,848) 16,332 ------------------ -------------- Increase (Decrease) in Net Assets (resulting from operations) (8,609,074) 3,293,809 ------------------- ----------- Distributions to Shareholders From: Net Capital Gains: Class A (10,661) (44,011) Class B (7,238) (36,840) -------------- ------------- Total Net Distributions (17,899) (80,851) ------------- ------------- Capital Share Transactions: Proceeds from Shares Sold: Class A 9,346,918 7,582,801 Class B 3,251,284 2,395,921 Dividends Reinvested: Class A 7,026 44,109 Class B 6,948 42,968 Cost of Shares Redeemed: Class A (3,430,730) (3,026,812) Class B (2,724,918) (2,816,976) ---------------- ---------------- Increase in Net Assets (resulting from capital share transactions) 6,456,528 4,222,011 ---------------- ------------- Total Increase (Decrease) in Net Assets (2,170,445) 7,434,969 Net Assets: Beginning of Year 39,283,363 31,848,394 ---------------- -------------- End of Year $ 37,112,918 $ 39,283,363 ================ ================ Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold: Class A 728,940 598,374 Class B 257,853 195,221 Shares Reinvested: Class A 632 3,657 Class B 657 3,724 Shares Redeemed: Class A (267,247) (239,337) Class B (223,459) (227,826) ---------------- ---------------- Net Increase in Number of Shares Outstanding 497,376 333,813 ================ ================
FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each year presented. SMALL-CAP VALUE FUND - CLASS A SHARES year year year year year ended ended ended ended ended 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 Per Share Operating Performance: Net Asset Value at Beginning of Year $ 13.79 $ 12.61 $ 12.26 $ 10.89 $ 12.25 ------------ ---------- ---------- ---------- ---------- Income from Investment Operations: Net Investment Income (Loss) (0.05) (0.09) (0.05) (0.02) 0.01 Net Realized and Unrealized Gain (Loss) on Investments (2.60) 1.30 1.43 1.39 (1.30) ------------ ---------- ---------- ---------- ---------- Total from Investment Operations (2.65) 1.21 1.38 1.37 (1.29) ------------ ---------- ---------- ---------- ---------- Less Distributions: Dividends from Realized Gains (0.01) (0.03) (1.03) - (0.07) Dividends from Net Investment Income - - - - - ----------- ---------- ---------- ---------- ---------- Total Distributions (0.01) (0.03) (1.03) - (0.07) ------------ ---------- ---------- ---------- ---------- Net Asset Value at End of Year $ 11.13 $ 13.79 $ 12.61 $ 12.26 $ 10.89 ============ ========== ========== ========== ========== Total Return (A) (19.25)% 9.66% 11.23% 12.58% (10.50)% Ratios/Supplemental Data: Net Assets, End of Year (in 000s) $22,603 $21,632 $15,217 $13,377 $13,287 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 1.75% 1.89% 1.97% 2.22% 2.09% After Reimbursement of Expenses by Advisor 1.75% 1.89% 1.76% 1.60% 1.60% Ratio of Net Investment (Loss) to Average Net Assets: Before Reimbursement of Expenses by Advisor (0.46)% (0.80)% (0.48)% (0.82)% (1.15)% After Reimbursement of Expenses by Advisor (0.46)% (0.80)% (0.27)% (0.20)% (0.66)% Portfolio Turnover 66.95% 61.41% 99.17% 78.79% 69.42%
(A) Total Return Calculation Does Not Reflect Sales Load. FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each year presented. SMALL-CAP VALUE FUND - CLASS B SHARES year year year year year ended ended ended ended ended 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 Per Share Operating Performance: Net Asset Value at Beginning of Year $13.22 $12.19 $11.88 $10.70 $12.13 ------------ ---------- ---------- ---------- ---------- Income from Investment Operations: Net Investment Income (Loss) (0.14) (0.22) (0.10) (0.11) (0.07) Net Realized and Unrealized Gain (Loss) on Investments (2.48) 1.28 1.39 1.29 (1.29) ------------ ---------- ---------- ---------- ---------- Total from Investment Operations (2.62) 1.06 1.29 1.18 (1.36) ------------ ---------- ---------- ---------- ---------- Less Distributions: Dividends from Realized Gains (0.01) (0.03) (0.98) - (0.07) Dividends from Net Investment Income - - - - - ------------ ---------- ---------- ---------- ---------- Total Distributions (0.01) (0.03) (0.98) - (0.07) ------------ ---------- ---------- ---------- ---------- Net Asset Value at End of Year $10.59 $13.22 $12.19 $11.88 $10.70 ============ ========== ========== ========== ========== Total Return (A) (19.85)% 8.77% 10.87% 11.03% (11.18)% Ratios/Supplemental Data: Net Assets, End of Year (in 000s) $14,509 $17,651 $16,631 $14,351 $14,114 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 2.49% 2.72% 2.72% 2.72% 2.84% After Reimbursement of Expenses by Advisor 2.49% 2.72% 2.51% 2.35% 2.35% Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement of Expenses by Advisor (1.12)% (1.78)% (1.23)% (1.34)% (1.90)% After Reimbursement of Expenses by Advisor (1.12)% (1.78)% (1.02)% (0.97)% (1.41)% Portfolio Turnover 66.95% 61.41% 99.17% 78.79% 69.42%
(A) Total Return Calculation Does Not Reflect Redemption Fee. SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 89.95% number of shares market value CHEMICAL & ALLIED PRODUCTS - 1.92% 14,000 Dow Chemical Co. $ 415,800 ----------------- CLEANING PREPARATIONS, PERFUMES, COSMETICS - 2.11% 15,000 Church & Dwight Co., Inc. 456,450 ----------------- CONSTRUCTION, MINING & MATERIALS HANDLING MACHINERY & EQUIP - 2.02% 15,000 Dover Corp. 437,400 ----------------- CRUDE PETROLEUM & NATURAL GAS - 8.15% 12,000 Anadarko Petroleum Corp. 574,800 10,000 Apache Corp. 569,900 14,000 Kerr-McGee Corp. 620,200 ----------------- 1,764,900 ----------------- ELECTRIC LIGHTING & WIRING EQUIPMENT - 2.19% 13,000 Cooper Industries, Inc., Class A 473,850 ----------------- ELECTRIC SERVICES - 5.37% 10,000 American Electric Power Co., Inc. 273,300 25,000 Duke Energy Corp. 488,500 26,000 TECO Energy, Inc. 402,220 ----------------- ----------------- 1,164,020 ----------------- ELECTRONIC INSTRUMENTS - 3.75% 16,000 Emerson Electric Co. 813,600 ----------------- FIRE, MARINE & CASUALTY INSURANCE - 0.79% 22,500 The Phoenix Companies, Inc. * 171,000 ----------------- GENERAL INDUSTRIAL MACHINERY & EQUIPMENT - 2.38% 12,000 Ingersoll-Rand Company Ltd. 516,720 ----------------- INDUSTRIAL INORGANIC CHEMICALS - 1.11% 13,000 ATMI, Inc. * 240,760 ----------------- METAL MINING - 2.20% 6,000 Rio Tinto Plc (a) 477,180 ----------------- METAL WORKING MACHINERY & EQUIPMENT - 2.42% 14,000 SPX Corp. * 524,300 ----------------- MILLWOOD, VENEER, PLYWOOD & STRUCTURAL WOOD MEMBERS - 2.91% 30,000 Masco Corp. 631,500 -----------------
SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 89.95% (Cont.) number of shares market value INDUSTRIAL INORGANIC CHEMICALS - 1.11% 13,000 ATMI, Inc. * $240,760 -------------------- METAL MINING - 2.20% 6,000 Rio Tinto Plc (a) 477,180 -------------------- METAL WORKING MACHINERY & EQUIPMENT - 2.42% 14,000 SPX Corp. * 524,300 -------------------- MILLWOOD, VENEER, PLYWOOD & STRUCTURAL WOOD MEMBERS - 2.91% 30,000 Masco Corp. 631,500 -------------------- MISCELLANEOUS CHEMICAL PRODUCTS - 2.21% 18,000 Cabot Corp. 477,720 -------------------- MISCELLANEOUS FABRICATED METAL PRODUCTS - 1.81% 8,500 Parker Hannifin Corp. 392,105 -------------------- MISCELLANEOUS INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT - 2.80% 10,000 ITT Industries, Inc. 606,900 -------------------- MISCELLANEOUS SHOPPING GOODS STORES - 0.93% 13,700 Office Depot, Inc. * 202,212 -------------------- NATIONAL COMMERCIAL BANKS - 4.68% 10,000 Compass Bancshares, Inc. 312,700 12,000 National City Corp. 327,840 15,000 SouthTrust Corp. 372,750 -------------------- 1,013,290 -------------------- NATURAL GAS TRANSMISSION - 0.96% 30,000 El Paso Energy Corp. 208,800 -------------------- NATURAL GAS TRANSMISSION & DISTRIBUTION - 1.62% 10,000 Equitable Resources, Inc. 350,400 -------------------- PHARMACEUTICAL PREPARATIONS - 5.17% 11,000 Abbott Laboratories 440,000 12,000 Merck & Co., Inc. 679,320 -------------------- 1,119,320 -------------------- PUBLIC BUILDING AND RELATED FURNITURE - 1.84% 12,000 Lear Corp. * 399,360 -------------------- RADIO TELEPHONE COMMUNICATIONS - 3.55% 14,000 Dominion Resources, Inc. 768,600 -------------------- REAL ESTATE INVESTMENT TRUSTS - 2.10% 15,000 Mack-Cali Realty Corp. 454,500 --------------------
SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 89.95% (Cont.) number of shares market value RETAIL - DRUG STORES & PROPRIETARY STORES - 3.46% 30,000 CVS Corp. $749,100 -------------------- RETAIL-EATING PLACES - 3.18% 20,000 Outback Steakhouse, Inc. 688,800 -------------------- RETAIL-GROCERY STORES - 5.69% 42,000 Kroger Co. * 648,900 25,000 Safeway Inc. * 584,000 -------------------- 1,232,900 -------------------- SEMICONDUCTORS & RELATED DEVICES - 1.70% 20,000 International Rectifier Corp. * 369,200 -------------------- SPECIAL INDUSTRY MACHINERY - 0.96% 18,000 Veeco Instruments, Inc. * 208,080 -------------------- STATE COMMERCIAL BANK - 1.11% 10,000 Bank of New York, Inc. 239,600 -------------------- SURETY INSURANCE - 3.04% 15,000 MBIA, Inc. 657,900 -------------------- UNSUPPORTED PLASTICS FILM & SHEET - 3.79% 22,000 Sealed Air Corp. * 820,600 -------------------- WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES - 2.03% 16,300 McKesson Corp. 440,589 -------------------- Total Common Stocks (cost $21,854,048) 19,487,456 --------------------
SCHEDULE OF INVESTMENTS As of December 31, 2002 SHORT-TERM INVESTMENTS - 9.46% number of shares market value 1,025,000 Huntington Money Fund - Investment A 1,025,000 1,025,000 First American Treasury Obligation Fund 1,025,000 -------------------- Total Short-Term Investments (cost $2,050,000) 2,050,000 --------------------
REPURCHASE AGREEMENTS - 2.54% principal amount market value $549,000 U.S. Bank Repurchase Agreement 549,000 1.05%, dated 12/31/02, due 1/2/03, repurchase price $549,016, collateralized by $565,470 by FHLMC, 5/1/17 -------------------- Total Repurchase Agreements (cost $549,000) 549,000 -------------------- TOTAL INVESTMENTS - 101.95% (identified cost $24,453,048) 22,086,456 OTHER ASSETS AND LIABILITIES, NET - (1.95)% (421,764) -------------------- NET ASSETS - 100.00% $ 21,664,692 ====================
* Non-income producing securities (a) American Depositary Receipt STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 ASSETS amount Investments in Securities at Value (identified cost $24,453,048) [NOTE 1] $22,086,456 Cash 625 Receivables: Interest 985 Dividends 35,485 Fund Shares Sold 19,338 Prepaid Expenses 4,197 Fund Shares Commission Receivable from Advisor 7,305 ------------------- Total Assets $22,154,391 =================== LIABILITIES amount Accrued Advisory Fees $11,498 Accrued 12b-1 Fees 5,699 Payable for Fund Shares Redeemed 25,926 Payable for Investment Securities Purchased 434,046 Accrued Expenses 12,530 ------------------- Total Liabilities $489,699 =================== NET ASSETS amount Class A Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 1,960,525 shares outstanding) $17,855,915 Net Asset Value and Redemption price Per Class A Share ($17,855,915 /1,960,525 shares) $ 9.11 Offering Price Per Share ($9.11 / 0.9475) $ 9.61 Class B Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 434,542 shares outstanding) $ 3,808,777 Net Asset Value and Offering Price Per Class B Share ($3,808,777 / 434,542 shares) $ 8.77 Redemption Price Per Share ($8.77 x 0.95) $ 8.33 Net Assets $21,664,692 =================== SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $24,409,515 Net Accumulated Realized Loss on Investments (378,231) Net Unrealized Depreciation in Value of Investments (2,366,592) ------------------- Net Assets $21,664,692 ===================
STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 INVESTMENT INCOME amount Interest $ 22,584 Dividends 351,682 ---------------- Total Investment Income 374,266 ---------------- EXPENSES amount Investment Advisory Fees [NOTE 3] 170,897 Transfer Agent Fees (Class A = $39,697, Class B = $9,654) 49,351 Administration Fees 6,530 12b-1 Fees (Class A = $40,761, Class B = $28,232) [NOTE 3] 68,993 Accounting Fees 30,238 Registration Fees 11,751 Custodian Fees 4,651 Auditing Fees 10,745 Servicing Fees (Class B) [NOTE 3] 9,613 Insurance Expense 4,541 Legal fees 4,792 Printing Expense 6,043 Miscellaneous Expense 5,970 ---------------- Total Net Expenses 384,115 ---------------- Net Investment Loss (9,849) ---------------- REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS amount Net Realized Loss on Investments (225,785) Change in Unrealized Depreciation of Investments (3,360,595) ---------------- Net Realized and Unrealized (Loss) on Investments (3,586,380) ---------------- Decrease in Net Assets Resulting from Operations $(3,596,229) ================
STATEMENT OF CHANGES IN NET ASSETS INCREASE (DECREASE) IN NET ASSETS year ended year ended 12/31/02 12/31/01 Operations: Net Investment Loss $(9,849) $(54,225) Net Change in Unrealized Appreciation (Depreciation) of Investments (3,360,595) 155,065 Net Realized (Loss) on Investments (225,785) (68,191) ---------------- ---------------- (Decrease) in Net Assets (resulting from operations) (3,596,229) 32,649 ---------------- ---------------- Distributions to Shareholders From: Net Realized Gains Class A - (43,614) Class B - (12,208) Net Income: Class A - - Class B - - ---------------- ---------------- Total Distribution - (55,822) ---------------- ---------------- Capital Share Transactions: Proceeds from Shares Sold: Class A 9,987,080 10,058,695 Class B 1,423,017 1,402,013 Dividends Reinvested: Class A - 24,145 Class B - 11,176 Cost of Shares Redeemed: Class A (3,102,811) (1,188,436) Class B (579,499) (360,063) ---------------- ---------------- Increase in Net Assets (resulting from capital share transactions) 7,727,787 9,947,530 ---------------- ---------------- Total Increase in Net Assets 4,131,558 9,924,357 Net Assets: Beginning of Year 17,533,134 7,608,777 ---------------- ---------------- End of Year $21,664,692 17,533,134 ================ ================ Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold: Class A 976,004 931,545 Class B 145,864 133,156 Shares Reinvested: Class A - 2,259 Class B - 1,078 Shares Redeemed: Class A (295,672) (110,187) Class B (61,386) (35,658) ---------------- ---------------- Net Increase in Number of Shares Outstanding 764,810 922,193 ================ ================
FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. LARGE/MID-CAP VALUE FUND - CLASS A SHARES year year year period ended ended ended ended 12/31/02 12/31/01 12/31/00 12/31/99 (B) Per Share Operating Performance: Net Asset Value at Beginning of Period $10.83 $10.83 $9.68 $ 10.00 ------------- ----------- ---------- ------------ Income from Investment Operations: Net Investment Income (Loss) 0.01 (0.02) 0.04 0.02 Net Realized and Unrealized Gain (Loss) on Investments (1.73) 0.06 1.16 (0.30) ------------- ----------- ---------- ------------ Total from Investment Operations (1.72) 0.04 1.20 (0.28) ------------- ----------- ---------- ------------ Less Distributions: Dividends from Realized Gains - (0.04) (0.02) (0.02) Dividends from Net Investment Income - - (0.03) (0.02) ------------- ----------- ---------- ------------ Total Distributions - (0.04) (0.05) (0.04) ------------- ----------- ---------- ------------ Net Asset Value at End of Period $9.11 $10.83 $10.83 $9.68 ============= =========== ========== ============ Total Return (A) (D) (15.88)% 0.33% 12.35% (3.28)% Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $17,856 $13,858 $4,493 $846 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 1.76% 1.70% 2.70% 4.69%(C) After Reimbursement of Expenses by Advisor 1.76% 1.70% 1.65% 1.60%(C) Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement of Expenses by Advisor 0.11% (0.20)% (0.30)% (2.34)%(C) After Reimbursement of Expenses by Advisor 0.11% (0.20)% 0.67% 0.75%(C) Portfolio Turnover 36.79% 26.44% 50.98% 8.02%
(A) Total Return Calculation Does Not Reflect Sales Load. (B) For the Period July 14, 1999 (Commencement of Operations) to December 31, 1999. (C) Annualized. (D) For Periods Of Less Than One Full Year, Total Returns Are Not Annualized. FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. LARGE/MID-CAP VALUE FUND - CLASS B SHARES year year year period ended ended ended ended 12/31/02 12/31/01 12/31/00 12/31/99 (B) Per Share Operating Performance: Net Asset Value at Beginning of Period $10.50 $10.60 $9.36 $10.00 -------------- ----------- ----------- ------------ Income from Investment Operations: Net Investment Income (Loss) (0.06) (0.12) 0.01 0.02 Net Realized and Unrealized Gain (Loss) on Investments (1.67) 0.06 1.28 (0.62) -------------- ----------- ----------- ------------ Total from Investment Operations (1.73) (0.06) 1.29 (0.60) -------------- ----------- ----------- ------------ Less Distributions: Dividends from Realized Gains - (0.04) (0.02) (0.02) Dividends from Net Investment Income - - (0.03) (0.02) -------------- ----------- ----------- ------------ Total Distributions - (0.04) (0.05) (0.04) -------------- ----------- ----------- ------------ Net Asset Value at End of Year $8.77 $10.50 $10.60 $9.36 ============== =========== =========== ============ Total Return (A) (D) (16.48)% (0.61)% 13.73% (4.78)% Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $3,809 $3,675 $2,665 $525 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 2.55% 2.66% 3.45% 5.87%(C) After Reimbursement of Expenses by Advisor 2.55% 2.66% 2.40% 2.35%(C) Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement of Expenses by Advisor (0.71)% (1.12)% (1.13)% (2.34)%(C) After Reimbursement of Expenses by Advisor (0.71)% (1.12)% (0.08)% 1.15%(C) Portfolio Turnover 36.79% 26.44% 50.98% 8.02%
(A) Total Return Calculation Does Not Reflect Redemption Fee. (B) For the Period July 15, 1999 (Commencement of Operations) to December 31, 1999. (C) Annualized. (D) For Periods Of Less Than One Full Year, Total Returns Are Not Annualized. SCHEDULE OF INVESTMENTS As of December 31, 2002 Bonds - 93.98% par value market value CONVERTIBLE CORPORATE BONDS - 3.63% $ 250,000 Federal Realty Investment, 5.25%, 10/28/03 $ 240,420 250,000 Omnicare, Inc., 5.00% 12/01/2007 239,688 -------------- 480,108 CORPORATE BONDS - 89.76% 10,000 Allegiance Corp., 7.30% 10/15/2006 11,315 200,000 Archer Daniels Midland Co., 6.625% 05/01/2029 220,234 250,000 Bombardier Capital, Inc., 6.125%, 6/29/06 226,240 150,000 Burlington Northern Santa Fe, 7.00% 12/15/2025 168,249 75,000 Burlington Resources, Inc., 7.375% 03/01/2029 87,466 100,000 Caterpillar, Inc., 6.625%, 07/15/2028 112,142 250,000 Champion International Corp., 7.15% 12/15/2027 266,216 300,000 Cingular Wireless, 5.625%, 12/15/06 315,409 200,000 Cit Group, Inc., 7.375%, 03/15/2003 201,964 400,000 Cit Group, Inc., 6.5%, 02/7/06 421,247 155,000 Coca Cola Enterprise, Inc., 4.375% 09/15/09 159,903 245,000 Coca Cola Enterprise, Inc., 6.95%, 11/15/26 279,576 125,000 Computer Sciences Corp., 6.75% 06/15/2006 135,570 125,000 Cooper Industries, 6.70% 09/22/2005 136,595 150,000 Cooper Tire & Rubber Co., 7.625% 03/15/2027 155,215 170,000 Cooper Tire & Rubber Co., 8.00% 12/15/2019 184,665 300,000 Credit Suisse First Boston, 6.5%, 01/15/12 321,178 55,000 CSX Transportation, 7.33% 06/01/2005 60,924 300,000 Deere & Co., 6.55% 10/01/2028 329,637 265,000 Dell Computer Corp., 7.10% 04/15/2028 285,778 315,000 Donnelley R R&Son, 6.625% 04/15/2029 318,100 250,000 Dow Chemical, 3.6%, 09/15/05 248,130 250,000 Dow Chemical 6.125%, 02/01/2011 258,007 413,000 Duke Energy Corp., 6.75% 08/01/2025 409,069 187,000 Duke Energy Field, 5.75%, 11/15/06 186,130 125,000 E. I. du Pont de Nemours & Co., 6.50% 01/15/2028 140,682 200,000 Georgia Pacific Corp., 7.75% 11/15/2029 164,000 175,000 Georgia Pacific Corp., 8.125% 06/15/2023 142,625 400,000 Household Finance Corp., 6.75% 05/15/2011 427,159 250,000 HSBC USA Capital Trust, 7.53%, 12/04/2026 261,139 142,000 Inco Ltd, 7.75% 03/15/2016 142,355 250,000 International Lease Finance Corp., 5.75%, 02/15/07 261,696 200,000 International Lease Finance Corp., 5.80%, 08/15/2007 211,317 300,000 Jersey Cent Power & Light Co., 6.75% 11/01/2025 284,573 300,000 Kraft Food, Inc., 6.50%, 11/01/2031 330,782 25,000 Lehman Brothers Holdings, Inc., 6.625% 02/05/2006 27,255 250,000 Lehman Brothers Holdings, Inc., 7%, 2/1/08 282,944 250,000 Lowe's Cos., Inc., 6.875% 02/15/2028 279,355 150,000 MCI Communications Corp., 7.75% 03/15/2024 74,250
SCHEDULE OF INVESTMENTS As of December 31, 2002 Bonds - 93.98% (Cont.) par value market value CORPORATE BONDS - 89.76% (cont.) $ 300,000 Mead Corp., 7.125% 08/01/2025 $ 310,906 250,000 Merck & Co. Inc., 5.95%, 12/1/28 264,350 100,000 Merck & Co. Inc., 6.30% 01/01/2026 109,466 100,000 Merck & Co. Inc., 6.40% 03/01/2028 111,223 250,000 National Rural Utilities Finance Corp., 5.75% 08/28/09 267,274 50,000 National Rural Utilities Finance Corp., 6%, 01/15/04 51,898 200,000 Norsk Hydro A.S., 6.7% 01/15/2018 216,669 25,000 Pennsylvania P & L, 6.55% 03/01/2006 27,662 70,000 Pep Boys Manny Moe & Jack, 7.00% 06/01/2005 67,725 100,000 PPG Industries, Inc., 7.40% 08/15/2019 107,830 11,000 Public Service Electric & Gas Co., 6.25% 01/01/2007 12,065 300,000 Public Service Electric & Gas Co., 7.00% 09/01/2024 307,734 250,000 The Sherman-Williams Co., 7.375%, 02/01/2027 275,930 200,000 Transocean Sedco Forex, Inc., 7.50% 04/15/2031 230,153 50,000 Travelers Property & Casualty Corp., 6.75% 11/15/2006 56,329 25,000 Union Electric Co., 6.875% 08/01/2004 26,717 250,000 United Parcel Services, Inc., 1.75%, 09/27/2007 266,250 300,000 Unitrin, Inc., 5.75%, 7/1/07 315,329 50,000 US Leasing International, 5.95% 10/15/2003 49,623 100,000 Virginia Electric & Power Co., 7.50% 06/01/2023 103,488 135,000 Wisconsin Energy Corp., 6.50% 04/01/2011 150,003 -------------- 11,857,715 MUNICIPAL BONDS - 0.59% 50,000 Province of Manitoba, 6.75% 03/01/2003 50,353 25,000 Texas State University, 6.41% 03/15/2009 27,773 -------------- 78,126 Total Bonds (cost $11,857,773) 12,415,949 -------------- SHORT TERM INVESTMENTS - 4.16% numbers of shares market value 549,858 First American Treasury Obligation Fund (cost $549,858) 549,858 ------------------ TOTAL INVESTMENTS - 98.14% (identified cost $12,407,631) 12,965,807 OTHER ASSETS AND LIABILITIES, NET - 1.86% 245,120 ------------------ NET ASSETS - 100.00% $ 13,210,927 ==================
STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 ASSETS amount Investments in Securities at Value (identified cost $12,407,631) [NOTE 1] $12,965,807 Receivables: Interest 192,978 Commission Receivable due from Advisor 6,178 Fund Shares Sold 180,350 ------------------ Total Assets $13,345,313 ================== LIABILITIES amount Payable to Custodian 114,709 Accrued Advisory Fees 7,325 Accrued 12b-1 Fees 3,821 Accrued Expenses 8,531 ----------------- Total Liabilities $134,386 NET ASSETS amount Class A Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 1,012,305 shares outstanding) $ 10,374,229 Net Asset Value and Redemption price Per Class A Share ($10,374,229 / 1,012,305 shares) $ 10.25 Offering Price Per Share ($10.25 / 0.9575 ) $ 10.70 Class B Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 283,231 shares outstanding) $ 2,836,698 Net Asset Value and Offering Price Per Class B Share ($2,836,698 / 283,231 shares) $ 10.02 Redemption Price Per Share ($10.02 X 0.95) $ 9.52 Net Assets $ 13,210,927 SOURCES OF NET ASSETS amount At Decemer 31, 2002, Net Assets Consisted of: Paid-in Capital $12,652,751 Net Unrealized Appreciation in Value of Investments 558,176 -------------- Net Assets $13,210,927
STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 INVESTMENT INCOME amount Interest $ 589,206 Total Investment Income 589,206 EXPENSES amount Investment Advisory Fees [NOTE 3] 56,751 Transfer Agent Fees (Class A = $23,600 Class B = $5,507) 29,107 Administration Fees 7,224 Auditing Fees 3,330 12b-1 Fees (Class A = $19,245, Class B = $13,391 ) [NOTE 3] 32,636 Accounting Fees 31,035 Registration Fees 7,082 Custodian Fees 3,149 Printing Expense 2,105 Insurance Expense 773 Legal Expense 1,403 Service Fees (Class B) [NOTE 3] 4,497 Miscellaneous Expense 1,298 Total Expenses 180,390 Expenses Waived and Reimbursed by Advisor [NOTE 3] (39,234) Total Net Expenses 141,156 Net Investment Income 448,050 REALIZED AND UNREALIZED GAIN ON INVESTMENTS amount Net Realized Gain on Investments 30,257 Change in Unrealized Appreciation of Investments 592,315 Net Realized and Unrealized Gain on Investments 622,572 Increase in Net Assets Resulting from Operations $ 1,070,622
STATEMENT OF CHANGES IN NET ASSETS INCREASE (DECREASE) IN NET ASSETS year ended year ended 12/31/02 12/31/01 Operations: Net Investment Income $448,050 $135,384 Net Change in Unrealized Appreciation (Depreciation) of Investments 592,315 (21,421) Net Realized Gain on Investments 30,257 6,385 ------------ ----------- Increase in Net Assets (resulting from operations) 1,070,622 120,348 Distributions to Shareholders: Net Income Class A (366,715) (105,934) Class B (82,816) (30,858) Net Realized Gain Class A (20,422) - Class B (5,584) - ------------- ----------- Total Net Decrease (475,537) (136,792) Capital Share Transactions: Proceeds from Shares Sold: Class A 6,265,246 4,520,926 Class B 2,123,831 650,127 Dividends Reinvested: Class A 137,979 35,316 Class B 67,373 23,622 Cost of Shares Redeemed: Class A (1,287,658) (442,396) Class B (489,870) (144,253) ------------- ----------- Increase in Net Assets (resulting from capital share transactions) 6,816,901 4,643,342 Total Increase in Net Assets 7,411,986 4,626,898 Net Assets: Beginning of Year 5,798,941 1,172,043 End of Year $13,210,927 $5,798,941 Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold: Class A 640,087 462,470 Class B 219,360 67,241 Shares Reinvested: Class A 13,832 3,626 Class B 6,858 2,469 Shares Redeemed: Class A (132,225) (45,445) Class B (50,448) (15,216) -------------- ------------- Net Increase in Number of Shares Outstanding 697,464 475,145
FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. FIXED INCOME FUND - CLASS A SHARES year year year period ended ended ended ended 12/31/02 12/31/01 12/31/00 12/31/99 (B) Per Share Operating Performance: Net Asset Value, Beginning $9.73 $9.53 $9.81 $10.00 ----------- ------------ ------------ ------------ Income from Investment Operations: Net Investment Income 0.45 0.40 0.49 0.12 Net Realized and Unrealized Gain (Loss) on Investments 0.53 0.20 (0.27) (0.18) ----------- ------------ ------------ ------------ Total from Investment Operations 0.98 0.60 0.22 (0.06) ----------- ------------ ------------ ------------ Less Distributions: Dividends from Net Investment Income (0.44) (0.40) (0.50) (0.13) Dividends from Net Realized Gain (0.02) - - - ----------- ------------------------ ------------ Total Distributions (0.46) (0.40) (0.50) (0.13) ----------- ------------ ------------ ------------ Net Asset Value at End of Period $10.25 $9.73 $9.53 $9.81 =========== ============ ============ ============ Total Return (A) (D) 10.32% 6.37% 2.32% (0.42)% Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $10,374 $4,773 $667 $124 Ratio of Expenses to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor 1.74% 2.44% 8.99% 13.92%(C) After Reimbursement and Waiver of Expenses by Advisor 1.35% 1.35% 1.35% 1.35%(C) Ratio of Net Investment Income to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor 4.49% 3.91% (2.19)% (9.88)%(C) After Reimbursement and Waiver of Expenses by Advisor 4.88% 5.00% 5.45% 2.70%(C) Portfolio Turnover 18.10% 20.28% 35.54% 21.25%
(A) Total Return Calculation Does Not Reflect Sales Load. (B) For the Period July 14, 1999 (Commencement of Operations) to December 31, 1999. (C) Annualized. (D) For Periods Of Less Than One Full Year, Total Return Is Not Annualized. FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. FIXED INCOME FUND - CLASS B SHARES year year year period ended ended ended ended 12/31/02 12/31/01 12/31/00 12/31/99 (B) Per Share Operating Performance: Net Asset Value, Beginning $9.55 $9.54 $9.80 $10.00 Income from Investment Operations: Net Investment Income 0.37 0.40 0.45 0.15 Net Realized and Unrealized Gain (Loss) on Investments 0.52 (0.01) (0.25) (0.22) ----------- ---------- ----------- ---------- Total from Investment Operations 0.89 0.39 0.20 (0.07) Less Distributions: Dividends from Net Investment Income (0.40) (0.38) (0.46) (0.13) Dividends from Net Realized Gain (0.02) - - - ---------- ---------- ---------- ---------- Total Distributions (0.42) (0.38) (0.46) (0.13) Net Asset Value at End of Period $ 10.02 $9.55 $9.54 $9.80 Total Return (A) (D) 9.52% 4.13% 2.12% (0.92)% Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $ 2,837 $ 1,026 $ 506 $ 243 Ratio of Expenses to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor 2.61% 3.46% 9.74% 14.73%(C) After Reimbursement and Waiver of Expenses by Advisor 2.10% 2.10% 2.10% 2.10%(C) Ratio of Net Investment Income to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor 3.57% 2.93% (2.94)% (2.20)%(C) After Reimbursement and Waiver of Expenses by Advisor 4.08% 4.29% 4.70% 10.42%(C) Portfolio Turnover 18.10% 20.28% 35.54% 21.25%
(A) Total Return Calculation Does Not Reflect Redemption Fee. (B) For the Period August 5, 1999 (Commencement of Operations) to December 31, 1999. (C) Annualized. (D) For Periods Of Less Than One Full Year, Total Return Is Not Annualized. SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 89.91% number of shares market value AIR TRANSPORTATION, SCHEDULED - 3.54% 3,200 JetBlue Airways Corp.* $ 86,400 2,680 Ryanair Holdings Plc.* (a) 104,949 ----------------- 191,349 ----------------- BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) - 1.11% 2,200 Medimmune, Inc.* 59,774 ----------------- COMMUNICATIONS EQUIPMENT - 1.01% 2,750 UTStarcom, Inc.* 54,533 ----------------- COMPUTER STORAGE DEVICES - 1.79% 9,650 Network Appliance, Inc.* 96,500 ----------------- DRILLING OIL & GAS WELLS - 1.47% 2,700 Ensco International, Inc. 79,515 ----------------- ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS - 1.14% 1,550 St. Jude Medical, Inc.* 61,566 ----------------- FIRE, MARINE & CASUALTY INSURANCE - 1.36% 1,950 Mercury General Corp. 73,281 ----------------- HOSPITAL & MEDICAL SERVICE PLANS - 0.91% 2,020 First Health Group Corp.* 49,187 ----------------- HOUSEHOLD AUDIO & VIDEO EQUIPMENT - 2.04% 1,850 Harman International Industries, Inc. 110,075 ----------------- INDUSTRIAL INORGANIC CHEMICALS - 1.60% 1,500 Praxair, Inc. 86,655 ----------------- MOTOR VEHICLE PARTS & ACCESSORIES - 2.05% 3,500 Gentex Corp.* 110,740 ----------------- OIL & GAS FIELD MACHINERY & EQUIPMENT - 2.02% 5,000 National-Oilwell, Inc.* 109,200 ----------------- OIL, GAS, FIELD SERVICES - 1.62% 2,700 BJ Services Co.* 87,237 ----------------- ORDNANCE & ACCESSORIES, (NO VEHICLES/GUIDED MISSILES) - 1.64% 1,425 Alliant Techsystem, Inc.* 88,849 ----------------- ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES - 2.33% 4,400 Biomet, Inc. 126,104 ----------------- PERSONAL CREDIT INSTITUTIONS - 1.06% 550 SLM Corp. 57,123 ----------------- PHARMACEUTICAL PREPARATIONS - 3.65% 4,100 Biovail Corp.* 108,281 2,300 TEVA Pharmaceutical Industries, Ltd (a) 88,803 ----------------- 197,084 -----------------
SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 89.91% (cont.) number of shares market value PRINTED CIRCUIT BOARDS - 2.42% 7,285 Jabil Circuit, Inc.* $ 130,547 ----------------- RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT - 1.04% 1,250 L 3 Communications Holdings, Inc.* 56,137 ----------------- RADIO BROADCASTING STATIONS - 1.41% 3,350 Cox Radio, Inc. - Class A* 76,413 ----------------- RETAIL - EATING PLACES - 3.74% 3,800 Brinker International, Inc.* 122,550 2,200 Cheesecake Factory, Inc.* 79,530 ----------------- 202,080 ----------------- RETAIL - HOBBY, TOY & GAME SHOPS - 2.12% 3,650 Michaels Stores, Inc.* 114,245 ----------------- RETAIL - HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 2.91% 4,550 Bed Bath & Beyond, Inc.* 157,112 ----------------- RETAIL - RETAIL STORES - 1.55% 4,900 PETsMART, Inc. 83,937 ----------------- RETAIL - VARIETY STORES - 3.16% 4,529 Dollar Tree Stores, Inc.* 111,278 1,900 Family Dollar Stores, Inc. 59,299 ----------------- 170,577 ----------------- SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS. - 1.06% 1,950 Garmin Ltd.* 57,135 ----------------- SEMICONDUCTORS & RELATED DEVICES - 8.00% 8,350 Altera Corp.* 103,039 5,000 Intersil Holding Corp. - Class A* 69,700 1,850 Maxim Integrated Products, Inc. 61,124 2,375 Microchip Technology, Inc.* 58,069 2,100 Qlogic Corp.* 72,471 3,300 Xilinx, Inc.* 67,980 ----------------- 432,383 ----------------- SERVICES - ADVERTISING AGENCIES - 1.00% 1,600 Lamar Advertising Co. - Class A * 53,840 ----------------- SERVICES - COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH - 2.15% 2,650 Affymetrix, Inc.* 60,658 7,000 Millenium Pharmaceuticals, Inc.* 55,580 ----------------- 116,238 ----------------- SERVICES - COMPUTER INTEGRATED SYSTEMS DESIGN - 1.63% 5,400 Yahoo, Inc. * 88,290 ----------------- SERVICES - COMPUTER PROCESSING & DATA PREPARATION - 2.14% 2,200 Affiliated Computer Services, Inc. - Class A* 115,830 -----------------
SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 89.91% (cont.) number of shares market value SERVICES - EDUCATIONAL SERVICES - 3.01% 1,325 Apollo Group, Inc. - Class A* $ 58,300 2,750 Corinthian Colleges, Inc.* 104,115 ----------------- 162,415 ----------------- SERVICES - EQUIPMENT RENTAL & LEASING - 1.11% 1,200 Rent-A-Center, Inc.* 59,940 ----------------- SERVICES - HELP SUPPLY SERVICES - 2.19% 3,700 Manpower, Inc. 118,030 ----------------- SERVICES - MANAGEMENT CONSULTING SERVICES - 1.29% 2,200 Hewitt Associates LLC* 69,718 ----------------- SERVICES - MISC HEALTH & ALLIED SERVICES - 1.09% 1,675 Accredo Health, Inc.* 59,044 ----------------- SERVICES - PERSONAL SERVICES - 1.06% 1,250 Weight Watchers International, Inc.* 57,463 ----------------- SERVICES - PREPACKAGED SOFTWARE - 4.42% 2,400 Cognos, Inc.* 56,280 2,650 Mercury Interactive Corp.* 78,572 3,200 National Instruments Corp.* 103,968 ----------------- 238,820 ----------------- SERVICES - SPECIALTY OUTPATIENT FACILITIES - 1.77% 5,900 Caremark RX, Inc.* 95,875 ----------------- SPECIAL INDUSTRY MACHINERY - 1.09% 2,100 Novellus Systems, Inc.* 58,968 ----------------- SURETY INSURANCE - 2.88% 1,239 AMBAC Financial Group, Inc. 69,681 2,856 The PMI Group, Inc. 85,794 ----------------- 155,475 ----------------- SURGICAL & MEDICAL INSTRUMENTS & APPARATUS - 3.06% 2,550 Boston Scientific Corp.* 108,426 1,850 Guidant Corp.* 57,072 ----------------- 165,498 ----------------- TELEPHONE COMMUNICATIONS (NO RADIOTELEPHONE) - 0.91% 11,200 Sprint PCS Group* 49,056 ----------------- TELEVISION BROADCASTING STATIONS - 1.36% 3,000 Univision Communications, Inc.* 73,500 ----------------- Total Common Stocks (cost $4,980,456) 4,857,338 ----------------- SHORT TERM INVESTMENTS - 10.17% number of shares market value 264,373 Federated Cash Trust Series II Treasury Fund 264,373 285,119 First American Treasury Obligation Fund, Class S 285,119 ------------------ Total Short Term Investments (cost $549,492) 549,492 TOTAL INVESTMENTS - 100.08% (identified cost $5,529,948) 5,406,830 LIABILITIES IN EXCESS OF OTHER ASSETS - (0.08)% (4,609) ----------------- NET ASSETS - 100.00% $ 5,402,221 ----------------- -----------------
* Non-income producing securities (a) American Depositary Receipt STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 ASSETS amount Investments in Securities at Value (identified cost $5,529,948) [NOTE 1] $5,406,830 Receivables: Interest 199 Dividends 188 Fund Shares Sold 18,550 Prepaid expenses 1,513 Due from Advisor 8,556 --------------- Total Assets $5,435,836 LIABILITIES amount Accrued 12b-1 fees $ 1,385 Payable for Investments Purchased 21,567 Payable for Fund Shares Redeemed 2,073 Accrued Expenses 8,590 ---------------- Total Liabilities $ 33,615 NET ASSETS amount Class A Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 1,070,562 shares outstanding) $ 4,877,616 Net Asset Value and Redemption price Per Class A Share ($4,877,616 / 1,070,562 shares) $ 4.56 Offering Price Per Share ($4.56/ 0.9475) $ 4.81 Class B Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 116,970 shares outstanding) $ 524,605 Net Asset Value and Offering Price Per Class B Share ($524,605 / 116,970 shares) $ 4.48 Maximum Redemption Price Per Class B Share ($4.48 x 0.95) $ 4.26 Net Assets $ 5,402,221 SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $ 7,392,000 Accumulated Net Realized Loss on Investments (1,866,661) Net Unrealized Depreciation in Value of Investments (123,118) -------------- Net Assets $ 5,402,221
STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 INVESTMENT INCOME amount Interest $3,451 Dividends 5,764 ------------- Total Investment Income 9,215 EXPENSES amount Investment Advisory Fees [NOTE 3] 38,873 Custodian Fees 9,168 Transfer Agent Fees (Class A =$20,555, Class B = $2,209) 22,764 Accounting Fees 24,855 Registration Fees 5,286 12b-1 Fees (Class A =$10,498, Class B =$3,389) [NOTE 3] 13,887 Administration Fees 5,633 Auditing Fees 1,854 Service Fees (Class B) [NOTE 3] 1,127 Legal Expense 835 Printing Expense 987 Insurance Expense 543 Miscellaneous Expense 336 ------------ Total Expenses 126,148 Expenses Waived and Reimbursed by Advisor [NOTE 3] (49,212) Total Net Expenses 76,936 Net Investment Loss (67,721) REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS amount Net Realized Loss on Investments (1,224,764) Change in Unrealized Depreciation of Investments (395,808) Net Realized and Unrealized Loss on Investments (1,620,572) --------------- Decrease in Net Assets Resulting from Operations $(1,688,293)
STATEMENT OF CHANGES IN NET ASSETS INCREASE (DECREASE) IN NET ASSETS Year ended year ended 12/31/02 12/31/01 Operations: Net Investment Loss $ (67,721) $(31,803) Net Change in Unrealized Appreciation (Depreciation) of Investments (395,808) 301,255 Net Realized Loss on Investments (1,224,764) (598,152) ------------ ------------ Decrease in Net Assets (resulting from operations) (1,688,293) (328,700) Capital Share Transactions: Proceeds from Shares Sold: Class A 3,330,868 3,299,422 Class B 408,599 299,660 Cost of Shares Redeemed: Class A (440,288) (242,322) Class B (121,158) (81,183) Increase in Net Assets (resulting from capital share ----------- ------------ transactions) 3,178,021 3,275,577 Total Increase in Net Assets 1,489,728 2,946,877 Net Assets: Beginning of Year 3,912,493 965,616 End of Year $ 5,402,221 3,912,493 Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold: Class A 611,101 483,348 Class B 77,504 43,517 Shares Redeemed: Class A (71,715) (38,071) Class B (21,856) (11,971) ------------- ---------- Net Increase in Number of Shares Outstanding 595,034 476,823
FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period. AGGRESSIVE GROWTH FUND - CLASS A SHARES year year period ended ended ended 12/31/02 12/31/01 12/31/00(B) Per Share Operating Performance: Net Asset Value at Beginning of Period $ 6.61 $8.35 $10.00 Income from Investment Operations: Net Investment Loss (0.05) (0.05) - Net Realized and Unrealized Loss on Investments (2.00) (1.69) (1.65) ----------- --------- ----------- Total from Investment Operations (2.05) (1.74) (1.65) Less Distributions: Dividends from Realized Gains - - - Dividends from Net Investment Income - - - ---------- -------- ----------- Total Distributions - - - Net Asset Value at End of Period $ 4.56 $ 6.61 $ 8.35 Total Return (A) (D) (31.01)% (20.84)% (16.50)% Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $ 4,878 $ 3,510 $ 717 Ratio of Expenses to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor 2.64% 3.87% 10.20%(C) After Reimbursement and Waiver of Expenses by Advisor 1.60% 1.60% 1.60%(C) Ratio of Net Investment Loss to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor (2.44)% (3.53)% (8.91)%(C) After Reimbursement and Waiver of Expenses by Advisor (1.40)% (1.26)% (0.31)%(C) Portfolio Turnover 134.34% 113.39% 19.00%
(A) Total Return Calculation Does Not Reflect Sales Load. (B) For The Period October 4, 2000 (commencement of operations) to December 31, 2000. (C) Annualized (D) For Periods of Less Than A Full Year, The Total Return Is Not Annualized. FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period. AGGRESSIVE GROWTH FUND - CLASS B SHARES year year period ended ended ended 12/31/02 12/31/01 12/31/00(B) Per Share Operating Performance: Net Asset Value at Beginning of Period $ 6.56 $ 8.34 $ 10.00 ------------- ------------- ------------- Income from Investment Operations: Net Investment Loss (0.08) (0.11) - Net Realized and Unrealized Loss on Investments (2.00) (1.67) (1.66) ------------- ------------- ------------- Total from Investment Operations (2.08) (1.78) (1.66) ------------- ------------- ------------- Less Distributions: Dividends from Realized Gains - - - Dividends from Net Investment Income - - - ------------- ------------- ------------- Total Distributions - - - ------------- ------------- ------------- Net Asset Value at End of Period $ 4.48 $ 6.56 $ 8.34 ============= ============= ============= Total Return (A) (D) (31.71)% (21.34)% (16.60)% Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $ 525 $ 402 $ 248 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 3.70% 4.63% 10.95%(C) After Reimbursement of Expenses by Advisor 2.35% 2.35% 2.35%(C) Ratio of Net Investment Loss to Average Net Assets: Before Reimbursement of Expenses by Advisor (3.50)% (4.24)% (9.66)%(C) After Reimbursement of Expenses by Advisor (2.15)% (1.96)% (1.06)%(C) Portfolio Turnover 134.34% 113.39% 19.00%
(A) Total Return Calculation Does Not Reflect Redemption Fee. (B) For The Period October 6, 2000 (commencement of operations) to December 31, 2000. (C) Annualized (D) For Periods of Less Than A Full Year, The Total Return Is Not Annualized. SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 93.50% number of shares market value ACCIDENT & HEALTH INSURANCE - 2.52% 12,000 AFLAC, Inc. $ 361,440 ----------------- AIRCRAFT ENGINES & ENGINE PARTS - 1.29% 3,000 United Technologies Corp. 185,820 ----------------- BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) - 7.53% 13,925 Amgen, Inc. * 673,135 15,000 MedImmune, Inc. * 407,550 ----------------- 1,080,685 ----------------- CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) - 3.44% 4,000 3M Co. 493,200 ----------------- ELECTRONIC COMPUTERS - 3.73% 20,000 Dell Computer Corp. * 534,800 ----------------- ELECTRONIC CONNECTORS - 1.28% 8,000 Molex, Inc. 184,320 ----------------- FIRE, MARINE & CASUALTY INSURANCE - 4.70% 11,650 American International Group, Inc. 673,952 ----------------- FUNCTIONS RELATED TO DEPOSITORY BANKING - 2.19% 20,000 Concord EFS, Inc. * 314,800 ----------------- GENERAL INDUSTRIAL MACHINERY & EQUIPMENT - 1.35% 3,000 Illinois Tool Works, Inc. 194,580 ----------------- NATIONAL COMMERCIAL BANKS - 2.68% 20,250 MBNA Corp. 385,155 ----------------- ORTHOPEDIC, PROSTHETIC & SURGICAL APPLIANCES & SUPPLIES - 4.52% 12,500 Biomet, Inc. 358,250 7,000 Zimmer Holdings, Inc. * 290,640 ----------------- 648,890 ----------------- PERFUMES, COSMETICS & OTHER TOILET PREPARATIONS - 2.92% 8,000 Colgate Palmolive Co. 419,440 ----------------- PERSONAL CREDIT INSTITUTIONS - 5.06% 7,000 SLM Corp. 727,020 ----------------- PHARMACEUTICAL PREPARATIONS - 6.76% 8,000 Allergan, Inc. 460,960 9,000 Merck & Co. , Inc. 509,490 ----------------- 970,450 ----------------- RETAIL-DEPARTMENT STORES -1.95% 5,000 Kohl's Corp.* 279,750 ----------------- RETAIL-DRUG STORES & PROPRIETARY STORES - 4.72% 23,200 Walgreen Co. 677,208 ----------------- RETAIL-HOME FURNITURE, FURNISHINGS & EQUIPMENT STORES - 3.61% 15,000 Bed Bath & Beyond, Inc. * 517,950 -----------------
SCHEDULE OF INVESTMENTS As of December 31, 2002 COMMON STOCKS - 93.50% - continued number of shares market value RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS - 5.90% 15,000 Home Depot, Inc. $ 359,400 13,000 Lowes Companies, Inc. 487,500 ----------------- 846,900 ----------------- RETAIL-VARIETY STORES - 2.09% 10,000 Target Corp. 300,000 ----------------- SEMICONDUCTORS & RELATED DEVICES - 2.33% 13,000 Linear Technology Corp. 334,360 ----------------- SERVICES-COMPUTER PROCESSING AND DATA PREPARATION - 3.62% 13,250 Automatic Data Processing, Inc. 520,063 ----------------- SERVICES-PREPACKAGED SOFTWARE - 1.54% 29,675 Siebel Systems, Inc. * 221,969 ----------------- SHIP & BOAT BUILDING & REPAIRING - 3.87% 7,000 General Dynamics Corp. 555,590 ----------------- SURGICAL & MEDICAL INSTRUMENTS & APPARATUS - 4.21% 9,000 Stryker Corp. 604,080 ----------------- TRUCKING & COURIER SERVICES (NO AIR) - 3.08% 7,000 United Parcel Service, Inc., Class B 441,560 ----------------- WHOLESALE-DRUGS PROPRIETARIES & DRUGGISTS' SUNDRIES - 3.91% 9,475 Cardinal Health, Inc. 560,825 ----------------- WHOLESALE-GROCERIES & RELATED PRODUCTS - 2.70% 13,000 Sysco Corp. 387,270 ----------------- Total Common Stocks (cost $14,908,884) 13,422,077 ----------------- SHORT-TERM INVESTMENTS - 4.88% number of shares market value 700,000 First American Treasury Obligation Fund (cost $700,000) 700,000 ----------------- TOTAL INVESTMENTS - 98.38% (identified cost $15,608,884) 14,122,077 OTHER ASSETS IN EXCESS OF LIABILITIES - 1.62% 232,437 ----------------- NET ASSETS - 100.00% $ 14,354,514 =================
*Non-income producing securities STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 ASSETS amount Investments in Securities at Value (identified cost $15,608,884 ) [NOTE 1] $ 14,122,077 Cash 206,458 Receivables: Interest 385 Dividends 11,214 Fund Shares Sold 32,563 Prepaid Expenses 2,439 Fund Shares Commissions Receivable from Advisor 2,680 ------------------- Total Assets $ 14,377,816 =================== LIABILITIES amount Accrued Advisory Fees $ 5,009 Accrued 12b-1 Fees 3,574 Payable for Fund Shares Redeemed 4,219 Accrued Expenses 10,500 ------------------- Total Liabilities $ 23,302 =================== NET ASSETS amount Class A Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 2,537,331 shares outstanding) $ 13,043,636 Net Asset Value and Redemption Price Per Class A Share ($13,043,636/2,537,331 shares) $ 5.14 Offering Price Per Share ($5.14/0.9475) $ 5.42 Class B Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 258,687 shares outstanding) $ 1,310,878 Net Asset Value and Offering Price Per Class B Share ($1,310,878/258,687 shares) $ 5.07 Maximum Redemption Price Per Class B Share ($5.07 x 0.95 ) $ 4.81 Net Assets $ 14,354,514 =================== SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $ 19,148,358 Accumulated Net Realized Loss on Investments (3,307,037) Net Unrealized Depreciation in Value of Investments (1,486,807) ------------------- Net Assets $ 14,354,514 ===================
STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 INVESTMENT INCOME amount Interest $ 4,944 Dividends 68,112 ------------------- Total Investment Income 73,056 ------------------- EXPENSES amount Investment Advisory Fees [NOTE 3] 104,074 Administration Fees 6,783 12b-1 Fees (Class A = $28,156, Class B = 8,042) [NOTE 3] 36,198 Accounting Fees 21,863 Registration Fees 6,623 Transfer Agent Fees (Class A = $30,064, Class B = $2,869) 32,933 Custodian Fees 4,421 Pricing Expense 2,918 Printing Expense 2,693 Auditing Fees 5,348 Insurance Expense 1,337 Legal Expense 2,001 Service Fees (Class B) [NOTE 3] 2,683 Miscellaneous Expense 926 ------------------- Total Expenses 230,801 Expenses Waived and Reimbursed by Advisor [NOTE 3] (26,641) ------------------- Total Net Expenses 204,160 ------------------- Net Investment Loss (131,104) ------------------- REALIZED AND UNREALIZED LOSS ON INVESTMENTS amount Net Realized Loss on Investments (2,799,300) Change in Unrealized Depreciation of Investments (1,277,088) ------------------- ------------------- Net Realized and Unrealized Loss on Investments (4,076,388) ------------------- Decrease in Net Assets Resulting from Operations $ (4,207,492) ===================
STATEMENT OF CHANGES IN NET ASSETS INCREASE (DECREASE) IN NET ASSETS year ended year ended 12/31/02 12/31/01 Operations: Net Investment Loss $ (131,104) $ (57,897) Net Change in Unrealized Depreciation of Investments (2,799,300) (146,495) Net Realized Loss on Investments (1,277,088) (505,974) ------------ ------------ Decrease in Net Assets (resulting from operations) (4,207,492) (710,366) Capital Share Transactions: Proceeds from Shares Sold: Class A 9,248,432 8,195,887 Class B 996,860 735,212 Cost of Shares Redeemed: Class A (1,215,853) (302,549) Class B (239,508) (136,616) Increase in Net Assets (resulting from capital share ------------ ------------- transactions) 8,789,931 8,491,934 Total Increase in Net Assets 4,582,439 7,781,568 Net Assets: Beginning of Year 9,772,075 1,990,507 End of Year $14,354,514 $9,772,075 Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold: Class A 1,523,174 1,091,786 Class B 173,694 98,379 Shares Redeemed: Class A (202,436) (39,278) Class B (42,116) (18,377) ------------ ------------ Net Increase in Number of Shares Outstanding 1,452,316 1,132,510
FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. LARGE/MID CAP GROWTH FUND - CLASS A SHARES year ended year ended period ended 12/31/02 12/31/01 12/31/00 (B) Per Share Operating Performance: Net Asset Value at Beginning of Period $ 7.28 $ 9.43 $ 10.00 Income from Investment Operations: Net Investment Loss (0.04) (0.04) - Net Realized and Unrealized Loss on Investments (2.10) (2.11) (0.57) ------------ ------------ -------------- Total from Investment Operations (2.14) (2.15) (0.57) Net Asset Value at End of Period $ 5.14 $ 7.28 $ 9.43 Total Return (A)(D) (29.40)% (22.80)% (5.69)% Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $ 13,044 $ 8,854 $ 1,547 Ratio of Expenses to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor 1.80% 2.32% 5.55%(C) After Reimbursement and Waiver of Expenses by Advisor 1.60% 1.60% 1.60%(C) Ratio of Net Investment Loss to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor (1.21)% (1.72)% (3.98)%(C) After Reimbursement and Waiver of Expenses by Advisor (1.01)% (1.00)% (0.03)%(C) Portfolio Turnover 52.28% 20.47% 4.46%
(A) Total Return Calculation Does Not Reflect Sales Load. (B) For the period October 5, 2000 (commencement of operations) to December 31, 2000. (C) Annualized (D) For periods of less than a full year, the total return is not annualized. FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. LARGE/MID CAP GROWTH FUND - CLASS B SHARES year ended year ended year ended 12/31/02 12/31/01 12/31/00 (b) Per Share Operating Performance: Net Asset Value at Beginning of Period $ 7.22 $ 9.41 $10.00 Income from Investment Operations: Net Investment Loss (0.07) (0.08) (0.01) Net Realized and Unrealized Loss on Investments (2.08) (2.11) (0.58) ---------- ---------- ------------ Total from Investment Operations (2.15) (2.19) (0.59) Net Asset Value at End of Period $ 5.07 $ 7.22 $ 9.41 Total Return (A)(D) (29.92)% (23.27)% (5.89)% Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $ 1,311 $ 918 $ 444 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 2.72% 3.66% 6.30% (C) After Reimbursement of Expenses by Advisor 2.35% 2.35% 2.35% (C) Ratio of Net Investment Loss to Average Net Assets: Before Reimbursement of Expenses by Advisor (2.12)% (3.11)% (4.73)% (C) After Reimbursement of Expenses by Advisor (1.75)% (1.80)% (0.78)% (C) Portfolio Turnover 52.28% 20.47% 4.46%
(A) Total Return Calculation Does Not Reflect Sales Load. (B) For the period October 9, 2000 (Commencement of operations) to December 31, 2000. (C) Annualized (D) For periods of less than a full year, the total return is not annualized. SCHEDULE OF INVESTMENTS As of December 31, 2002 MUTUAL FUNDS - 99.70% number of shares market value 755,427 Timothy Aggressive Growth Fund, Class A * $ 3,444,749 1,125,575 Timothy Large/Mid-Cap Growth Fund, Class A * 5,785,453 463,303 Timothy Large/Mid-Cap Value Fund, Class A * 4,220,690 298,543 Timothy Small Cap Value Fund, Class A 3,322,778 ----------------- TOTAL COMMON STOCK (Cost $21,268,116) 16,773,670 TOTAL INVESTMENTS - 99.70% (identified cost $21,268,116) 16,773,670 OTHER ASSETS AND LIABILITIES - 0.30% 50,294 ----------------- NET ASSETS - 100.00% $ 16,823,964 ================
* Non-income producing securities STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 ASSETS amount Investments in Securities at Value (identified cost $21,268,116 ) [NOTE 1] $ 16,773,670 Receivables: Fund Shares Sold 78,288 Interest Receivable 40 Due From Advisor 6,303 ------------------- Total Assets $ 16,858,301 =================== LIABILITIES amount Payable for Fund Shares Redeemed 2,760 Payable to Custodian 7,375 Accrued Advisory Fees 2,937 Accrued 12b-1 Fees 7,508 Accrued Expenses 13,757 ------------------- Total Liabilities $ 34,337 =================== NET ASSETS amount Class A Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 1,173,014 shares outstanding) $ 7,430,334 Net Asset Value and Redemption Price Per Class A Share ($7,430,334/ 1,173,014 shares) $ 6.33 Offering Price Per Share ($6.33/0.9475) $ 6.68 Class B Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 1,504,056 shares outstanding) $ 9,393,630 Net Asset Value and Offering Price Per Class B Share ($9,393,630 / 1,504,056 shares) $ 6.25 Maximum Redemption Price Per Class B Share ($6.25 x 0.95) $ 5.94 Net Assets $16,823,964 SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $ 21,338,655 Net Accumulated Realized Loss on Investments (20,245) Net Unrealized Depreciation in Value of Investments (4,494,446) ---------------- Net Assets $ 16,823,964
STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 INVESTMENT INCOME amount Interest $ 1,080 ------------------- Total Investment Income 1,080 ------------------- EXPENSES amount Investment Advisory Fees [NOTE 3] 22,738 Accounting Fees 25,577 Transfer Agent Fees (Class A = $15,875, Class B = $21,693) 37,568 12b-1 Fees (Class A = $15,932, Class B = $66,371) [NOTE 3] 82,303 Custodian Fees 6,070 Administration Fees 8,908 Auditing Fees 6,963 Service Fees (Class B) [NOTE 3] 60,208 Registrations Expense 9,974 Legal Expense 2,483 Insurance Expense 1,604 Printing Expense 3,393 Miscellaneous Expense 1,455 ------------------- Total Expenses 269,244 Expenses Waived and Reimbursed by Advisor [NOTE 3] (13,709) ------------------- Total Net Expenses 255,535 ------------------- Net Investment Loss (254,455) ------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS amount Net Realized Loss on Investment Securities (21,847) Capital Gain Distributions from other Investment Companies 1,559 Change in Unrealized Depreciation of Investments (4,365,635) ------------------- Net Realized and Unrealized Loss on Investments (4,385,923) ------------------- Decrease in Net Assets Resulting from Operations $ (4,640,378) ===================
STATEMENT OF CHANGES IN NET ASSETS INCREASE IN NET ASSETS year ended year ended 12/31/02 12/31/01 Operations: Net Investment Loss $(254,455) $ (101,757) Net Change in Unrealized Depreciation of Investments (4,365,635) (92,430) Capital Gain Distributions from Other Investment Companies 1,559 13,115 Net Realized Loss on Investments (21,847) (630) -------------- ------------- Decrease in Net Assets (resulting from operations) (4,640,378) (181,702) Distributions to Shareholders: Net Capital Gains: Class A (233) (7,201) Class B (298) (11,483) -------------- ------------- Total Distributions (531) (18,684) Capital Share Transactions: Proceeds from Shares Sold: Class A 5,482,338 4,330,628 Class B 6,156,072 6,707,533 Dividends Reinvested: Class A 226 7,101 Class B 280 10,787 Cost of Shares Redeemed: Class A (772,079) (114,860) Class B (1,118,254) (384,975) Increase in Net Assets (resulting from capital share -------------- --------------- transactions) 9,748,583 10,556,214 -------------- --------------- Total Increase in Net Assets 5,107,674 10,355,828 Net Assets: Beginning of year 11,716,290 1,360,462 End of Year $ 16,823,964 $ 11,716,290 Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold: Class A 728,315 517,676 Class B 827,148 788,513 Cost of Shares Reinvested: Class A 35 848 Class B 44 1,298 Shares Redeemed: Class A (106,990) (14,332) Class B (159,680) (47,397) ------------- ------------- Net Increase in Number of Shares Outstanding 1,288,872 1,246,606
FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. STRATEGIC GROWTH FUND - CLASS A SHARES year year period ended ended ended 12/31/02 12/31/01 12/31/00(D) Per Share Operating Performance: Net Asset Value at Beginning of Period $ 8.47 $ 9.61 $ 10.00 Income from Investment Operations: Net Investment Loss (0.07) (0.05) (0.01) Net Realized and Unrealized Loss on Investments (2.07) (1.08) (0.38) ------------ ---------- ----------- Total from Investment Operations (2.14) (1.13) (0.39) Less Distributions: Dividends from Realized Gains - * (0.01) - Dividends from Net Investment Income - - - ------------ ---------- ---------- Total Distributions - (0.01) - Net Asset Value at End of Period $ 6.33 $ 8.47 $ 9.61 Total Return (A) (B) (25.26)% (11.72)% (3.90)%(B) Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $ 7,430 $ 4,675 $ 456 Ratio of Expenses to Average Net Assets: Before Reimbursement and waiver of Expenses by Advisor 1.34% 1.68% 6.80%(C) After Reimbursement and waiver of Expenses by Advisor 1.25% 1.25% 1.25%(C) Ratio of Net Investment Loss to Average Net Assets: Before Reimbursement and waiver of Expenses by Advisor (1.34)% (1.61)% (6.22)%(C) After Reimbursement and waiver of Expenses by Advisor (1.25)% (1.18)% (0.67)%(C) Portfolio Turnover 0.67% 0.15% 0.30%
(A) Total Return Calculation Does Not Reflect Sales Load. (B) For Periods Of Less Than A Full Year, The Total Return is Not Annualized. (C) Annualized (D) For the Period October 5, 2000 (commencement of operations) to December 31, 2000. * Distribution was less than $0.01 per share FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. STRATEGIC GROWTH FUND - CLASS B SHARES year year period ended ended ended 12/31/02 12/31/01 12/31/00(D) Per Share Operating Performance: Net Asset Value at Beginning of Period $ 8.42 $ 9.61 $ 10.00 Income from Investment Operations: Net Investment Loss (0.12) (0.09) (0.03) Net Realized and Unrealized Loss on Investments (2.05) (1.09) (0.36) ------------ ----------- ----------- Total from Investment Operations (2.17) (1.18) (0.39) Less Distributions: Dividends from Realized Gains - * (0.01) - Dividends from Net Investment Income - - - ------------ ----------- ---------- Total Distributions - (0.01) - Net Asset Value at End of Period $ 6.25 $ 8.42 $ 9.61 Total Return (A) (B) (25.77)% (12.24)% (3.90)%(B) Ratios/Supplemental Data: Net Assets, End of Period (in 000s) $ 9,394 $ 7,042 $ 904 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 2.10% 2.27% 7.55%(C) After Reimbursement of Expenses by Advisor 2.00% 2.00% 2.00%(C) Ratio of Net Investment Loss to Average Net Assets: Before Reimbursement of Expenses by Advisor (2.10)% (2.21)% (6.97)%(C) After Reimbursement of Expenses by Advisor (2.00)% (1.94)% (1.42)%(C) Portfolio Turnover 0.67% 0.15% 0.30%
(A) Total Return Calculation Does Not Reflect Redemption Fee. (B) For Periods Of Less Than A Full Year, The Total Return is Not Annualized (C) Annualized (D) For the Period October 9, 2000 (commencement of operations) to December 31, 2000. * Distribution was less than $0.01 per share SCHEDULE OF INVESTMENTS As of December 31, 2002 Common Stocks - 99.56% number of shares market value 507,037 Timothy Fixed Income Fund, Class A $ 5,197,125 673,530 Timothy Large/Mid-Cap Growth Fund, Class A * 3,461,943 572,421 Timothy Large/Mid-Cap Value Fund, Class A * 5,214,755 311,528 Timothy Small Cap Value Fund, Class A 3,467,307 ----------------- Total Common Stocks (cost $19,328,619) $ 17,341,130 ----------------- Short Term Investments - 0.05% number of shares market value 9,465 First American Treasury Obligation Fund (cost $9,465) $ 9,465 ----------------- TOTAL INVESTMENTS - 99.61% (identified cost $19,338,084) 17,350,595 OTHER ASSETS AND LIABILITIES, NET - 0.39% 67,917 ----------------- NET ASSETS - 100.00% $ 17,418,512 =================
* Non-income producing securities STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 ASSETS amount Investments in Securities at Value (identified cost $19,338,084) [NOTE 1] $ 17,350,595 Cash 101 Receivables: Dividends 52,579 Interest 26 Commission Receivable due from Advisor 6,893 Fund shares sold 87,071 ------------------- Total Assets $ 17,497,265 =================== LIABILITIES amount Accrued 12b-1 fees 7,267 Payable for Fund Shares Redeemed 60,938 Accrued Expenses 10,548 ------------------- Total Liabilities $ 78,753 =================== NET ASSETS amount Class A Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 1,167,424 shares outstanding) $ 9,572,913 Net Asset Value and Redemption price Per Class A Share ($9,572,913 / 1,167,424 shares) $ 8.20 Offering Price Per Share ($8.20 / 0.9475) $ 8.65 Class B Shares: Net Assets (unlimited shares of $0.001 par beneficial interest authorized; 973,787 shares outstanding) $ 7,845,599 Net Asset Value and Offering Price Per Class B Share ($7,845,599 / 973,787 shares) $ 8.06 Maximum Redemption Price Per Share ($8.06 x 0.95) $ 7.66 Net Assets $ 17,418,512 SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $ 19,436,169 Accumulated Net Realized Loss on Investments $ (30,168) Net Unrealized Depreciation in Value of Investments $ (1,987,489) ---------------- Net Assets $ 17,418,512
STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 INVESTMENT INCOME amount Interest $ 951 Dividends 206,061 ------------------- Total Investment Income 207,012 ------------------- EXPENSES amount Investment Advisory Fees [NOTE 3] 21,442 Transfer Agent Fees (Class A =$21,205, Class B =$15,697) 36,902 Administration Fees 8,907 12b-1 Fees (Class A =$20,620, Class B =$46,001) [NOTE 3] 66,621 Accounting Fees 26,014 Custodian Fees 5,703 Auditing Fees 6,859 Servicing Fees (Class B) [NOTE 3] 51,283 Insurance Expense 1,314 Legal Expense 2,377 Registration Expense 11,118 Printing Expense 2,978 Miscellaneous Expense 1,378 ------------------- Total Expenses 242,896 Expenses Waived and Reimbursed by Advisor [NOTE 3] (26,278) ------------------- Total Net Expenses 216,618 ------------------- Net Investment Income (9,606) ------------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS amount Net Realized Loss on Investments - Capital Gain Distributions from other Investment Companies 7,227 Change in Unrealized Depreciation of Investments (2,136,114) ------------------- Net Realized and Unrealized Loss on Investments (2,128,887) ------------------- Increase in Net Assets Resulting from Operations $ (2,138,493) ===================
STATEMENT OF CHANGES IN NET ASSETS INCREASE (DECREASE) IN NET ASSETS Year ended Year ended 12/31/02 12/31/01 Operations: Net Investment Income (Loss) $ (9,606) $ 500 Net Change in Unrealized Appreciation (Depreciation) of Investments (2,136,114) 151,801 Capital Gain Distributions From Other Investment Companies 7,227 12,637 Net Realized (Loss) on Investments - (50,032) ----------- ----------- Increase (Decrease) in Net Assets (resulting from operations) (2,138,493) 114,906 Distributions to shareholders: Net Income Class A (116) (645) Class B (97) (42) Capital Gains Class A - (5,335) Class B - (3,857) Total Distributions (213) (9,879) Capital Share Transactions: Proceeds from Shares Sold: Class A 6,269,947 5,611,527 Class B 5,548,608 3,920,643 Cost of Shares Redeemed: Class A (1,299,346) (198,550) Class B (1,089,694) (98,233) Cost of Shares Reinvested: Class A 109 5,497 Class B 92 3,633 Increase in Net Assets (resulting from capital share transactions) 9,429,716 9,244,517 Total Increase in Net Assets 7,291,010 9,349,544 Net Assets: Beginning of Year 10,127,502 777,958 End of Year $ 17,418,512 $ 10,127,502 Shares of Capital Stock of the Fund Sold: Shares Sold: Class A 708,893 604,976 Class B 634,425 427,286 Cost of Shares Redeemed: Class A (155,281) (21,550) Class B (125,870) (10,746) Cost of Shares Reinvested: Class A 13 590 Class B 11 394 ------------ ---------------- Net Increase in Number of Shares Outstanding 1,062,191 1,000,950
FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. CONSERVATIVE GROWTH FUND - CLASS A SHARES year year period ended ended ended 12/31/02 12/31/01 12/31/00(D) Per Share Operating Performance: Net Asset Value at Beginning of Period $ 9.43 $ 9.98 $ 10.00 Income from Investment Operations: Net Investment Income (Loss) 0.02 (0.01) 0.02 Net Realized and Unrealized Loss on Investments (1.25) (0.53) (0.04) ----------- ---------- ------------- Total from Investment Operations (1.23) (0.54) (0.02) Less Distributions: Dividends from Realized Gains - (0.01) - Dividends from Net Investment Income - * (0.00) * - ---------- ---------- ------------- Total Distributions - (0.01) - Net Asset Value at End of Period $ 8.20 $ 9.43 $ 9.98 Total Return (A) (B) (13.03)% (5.41)% (0.20)% Ratios/Supplimental Data: Net Assets, End of Period (in 000s) $ 9,573 $ 5,787 $ 297 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 1.38% 1.74% 9.91%(C) After Reimbursement of Expenses by Advisor 1.20% 1.20% 1.20%(C) Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement of Expenses by Advisor 0.06% (0.17)% (7.41)%(C) After Reimbursement of Expenses by Advisor 0.24% 0.37% 1.30%(C) Portfolio Turnover 0.00% 4.03% 0.56%
(A) Total Return Calculation Does Not Reflect Sales Load. (B) For Periods Of Less Than A Full Year, The Total Return Is Not Annualized. (C) Annualized (D) For the period October 5, 2000 (Commencement of Operations) to December 31, 2000. * Distribution was less than $0.01 per share. FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. CONSERVATIVE GROWTH FUND - CLASS B SHARES year year period ended ended ended 12/31/02 12/31/01 12/31/00(D) Per Share Operating Performance: Net Asset Value at Beginning of Period $9.33 $ 9.96 $ 10.00 Income from Investment Operations: Net Investment Loss (0.03) (0.02) - Net Realized and Unrealized Loss on Investments (1.24) (0.60) (0.04) ----------- --------- ------------ Total from Investment Operations (1.27) (0.62) (0.04) Less Distributions: Dividends from Realized Gains - (0.01) - Dividends from Net Investment Income -* 0.00 * - ----------- ---------- ------------- Total Distributions - (0.01) - Net Asset Value at End of Period $ 8.06 $ 9.33 $ 9.96 Total Return (A) (B) (13.64)% (6.23)% (0.40)% Ratios/Supplimental Data: Net Assets, End of Period (in 000s) $ 7,846 $ 4,340 $ 481 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 2.13%(C) 2.70% 10.66%(C) After Reimbursement of Expenses by Advisor 1.95%(C) 1.95% 1.95%(C) Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement of Expenses by Advisor (0.67)%(C) (1.19)% (8.16)%(C) After Reimbursement of Expenses by Advisor (0.49)%(C) (0.44)% 0.55%(C) Portfolio Turnover 0.00% 4.03% 0.56%
(A) Total Return Calculation Does Not Reflect Sales Load. (B) For Periods Of Less Than A Full Year, The Total Return Is Not Annualized. (C) Annualized (D) For the period October 5, 2000 (Commencement of Operations) to December 31, 2000. * Distribution was less than $0.01 per share. SCHEDULE OF INVESTMENTS As of December 31, 2002 SHORT TERM INVESTMENTS - 95.67% par value market value Government Agencies - 95.67% 400,000 Federal Home Loan Bank, 1.29%, 01/10/2003 $ 399,857 450,000 Federal Home Loan Bank, 1.52%, 01/24/2003 449,543 300,000 Federal Home Loan Bank, 1.10%, 02/12/2003 299,605 300,000 Federal Home Loan Bank, 1.24%, 02/14/2003 299,535 300,000 Federal Home Loan Bank, 1.49%, 02/19/2003 299,380 300,000 Federal Home Loan Bank, 1.52%, 03/21/2003 298,986 450,000 Federal Home Loan Bank, 1.56%, 04/23/2003 447,794 900,000 Federal Home Loan Bank, 1.19%, 05/21/2003 895,800 ----------------- Total Short Term Investments (cost $3,390,500) 3,390,500 ----------------- Money Market Instruments - 3.85% 136,556 First American Treasury Obligation Fund, 0.70%, (a) ( 136,556 (Cost $136,556) ----------------- TOTAL INVESTMENTS - 99.52% (identified cost $3,527,056) 3,527,056 ----------------- OTHER ASSETS AND LIABILITIES, NET - .48% 16,972 ----------------- NET ASSETS - 100.00% $ 3,544,028 =================
(a) Variable rate security; the rate shown represents the rate at December 31, 2002. STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 ASSETS amount Investments in Securities at Value (identified cost $3,527,056) [NOTE 1] $ 3,527,056 Receivables: Interest 109 Fund Shares Sold 21,872 From Investment Advisor 684 ------------------- Total Assets $ 3,549,721 =================== LIABILITIES amount Payable for Fund Shares Redeemed $ 1,771 Accrued Expenses 3,922 ------------------- Total Liabilities $ 5,693 =================== NET ASSETS amount $ Shares of Capital Stock Outstanding (par value $0.001, unlimited shares authorized) $ 3,543,730 Net Asset Value, Offering and Redemption Price Per Share ($3,544,028 / 3,543,730 shares) $ 1.00 Net Assets $ 3,544,028 SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $ 3,543,804 Undistributed Net Investment Income $ 224 ------------------ Net Assets $ 3,544,028
STATEMENT OF OPERATIONS For the Year Ended December 31, 2002 INVESTMENT INCOME amount Interest $ 54,138 ------------------- Total Investment Income 54,138 ------------------- EXPENSES amount Investment Advisory Fees [NOTE 3] 19,878 Transfer Agent Fees 13,633 Administration Fees 3,363 Accounting Fees 13,625 Auditing Fees 1,118 Insurance Fees 439 Legal Fees 483 Registration Fees 4,692 Custodian Fees 2,126 Pricing Fees 1,265 Printing Fees 771 Miscellaneous Expense 7 ------------------- Total Expenses 61,400 Expenses Waived and Reimbursed by Advisor [NOTE 3] (33,176) ------------------- Total Net Expenses 28,224 ------------------- Net Investment Income 25,914 ------------------- REALIZED AND UNREALIZED GAIN ON INVESTMENTS amount Increase in Net Assets Resulting from Operations $ 25,914
STATEMENT OF CHANGES IN NET ASSETS INCREASE (DECREASE) IN NET ASSETS year ended year ended 12/31/02 12/31/01 Operations: Net Investment Income $ 25,914 $ 61,576 ----------- ----------- Increase in Net Assets (resulting from operations) 25,914 61,576 Distributions to Shareholders: Net Income (25,691) (61,546) Capital Share Transactions: Proceeds from Shares Sold 3,588,622 4,203,813 Dividends Reinvested 25,035 60,191 Cost of Shares Redeemed (2,844,283) (2,892,945) Increase in Net Assets (resulting from capital share ------------- ------------- transactions) 769,374 1,371,059 Total Increase in Net Assets 769,597 1,371,089 Net Assets: Beginning of Year 2,774,431 1,403,342 End of Year (including accumulated net investment income of $224) $3,544,028 $2,774,431 Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold 3,588,547 4,203,813 Shares Reinvested 25,035 60,191 Shares Redeemed (2,844,283) (2,892,945) ------------ ------------- Net Increase in Number of Shares Outstanding 769,299 1,371,059
FINANCIAL HIGHLIGHTS The table below set forth financial data for one share of capital stock outstanding throughout each period presented. MONEY MARKET FUND - CLASS A SHARES year year year period ended ended ended ended 12/31/02 12/31/01 12/31/00 12/31/99 (B) Per Share Operating Performance: Net Asset Value at Beginning of Period $1.00 $ 1.00 $ 1.00 $1.00 Income from Investment Operations: Net Investment Income 0.01 0.03 0.05 0.02 --------- --------- --------- ----------- Total from Investment Operations 0.01 0.03 0.05 0.02 Less Distributions: Dividends from Realized Gains - - - - Dividends from Net Investment Income (0.01) (0.03) (0.05) (0.02) --------- ----------- --------- ---------- Total Distributions (0.01) (0.03) (0.05) (0.02) Net Asset Value at End of Period $ 1.00 $ 1.00 $ 1.00 $ 1.00 Total Return (A) 0.80% 3.34% 5.34% 1.78% Ratios/Supplimental Data: Net Assets, End of Period (in 000s) $3,544 $2,774 $1,403 $ 760 Ratio of Expenses to Average Net Assets: Before Reimbursement of Expenses by Advisor 1.85% 2.33% 4.53% 5.75%(C) After Reimbursement of Expenses by Advisor 0.85% 0.73% 0.85% 0.85%(C) Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement of Expenses by Advisor (.22)% 1.45% 1.58% (0.73)%(C) After Reimbursement of Expenses by Advisor 0.78% 3.05% 5.25% 4.17%(C)
(A) Not Annualized. (B) For the Period July 9, 1999 (Commencement of Operations) to December 31, 1999. (C) Annualized. NOTES TO FINANCIAL STATEMENTS December 31, 2002 TIMOTHY PLAN FAMILY OF FUNDS Note 1 - Significant Accounting Policies The Timothy Plan (the "Trust") is organized as a series of a Delaware business trust pursuant to a trust agreement dated December 16, 1993. The Trust is registered under the Investment Company Act of 1940, as amended, as an open-end diversified management investment company. The Trust currently consists of eleven series. These financials include the following eight series: The Timothy Plan Aggressive Growth Fund, The Timothy Plan Conservative Growth Fund, The Timothy Plan Fixed Income Fund, The Timothy Plan Small-Cap Value Fund, The Timothy Plan Large/Mid-Cap Growth Fund, The Timothy Plan Large/Mid-Cap Value Fund, The Timothy Plan Money Market Fund, and The Timothy Plan Strategic Growth Fund, ("the Funds"). The Timothy Plan Aggressive Growth Fund's investment objective is long-term growth of capital. The Fund seeks to achieve its investment objective by normally investing at least 65% of the Fund's total assets in US common stocks without regard to market capitalizations and investing in the securities of a limited number of companies which the Fund's Adviser believes show a high probability for superior growth. The Timothy Plan Conservative Growth Fund seeks to generate moderate levels of long-term capital growth with a secondary objective of current income. The Fund seeks to achieve its investment objective by normally investing at least 75% of its net assets in the following Funds: approximately 15%-20% of its net assets in the Timothy Plan Small-Cap Value Fund; approximately 25%-30% of its net assets in the Timothy Plan Large/Mid-Cap Value Fund; approximately 15%-20% of its net assets in the Timothy Plan Large/Mid-Cap Growth Fund; and approximately 25%-30% in the Timothy Plan Fixed Income Fund. The Timothy Plan Fixed Income Fund seeks to generate a high level of current income consistent with prudent investment risk. To achieve its goal, the Fund normally invests in a diversified portfolio of debt securities. These include corporate bonds, U.S. Government and agency securities and preferred securities. The Fund will only purchase high quality securities. The Timothy Plan Small-Cap Value Fund's primary 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 Timothy Plan Large/Mid-Cap Growth Fund's investment objective is long-term growth of capital. Current income is not a significant investment consideration and any such income realized will be considered incidental to the Fund's investment objective. The Fund seeks to achieve its investment objective by normally investing at least 65% of the Fund's total assets in US common stocks with market capitalizations in excess of $1 billion. The Timothy Plan Large/Mid-Cap Value Fund's investment objective is long-term capital growth, with a secondary objective of current income. The Fund seeks to achieve its objectives by primarily investing in common stocks and ADRs. The Fund will invest in the common stock of companies whose total market capitalization generally exceeds $1 billion. The Timothy Plan Money Market Fund seeks to generate a high level of current income consistent with the preservation of capital. To achieve its goal, the Fund normally invests in short-term debt instruments, such as obligations of the U.S. Government and its agencies, certificates of deposit, bankers acceptances, commercial paper and short-term corporate notes. NOTES TO FINANCIAL STATEMENTS December 31, 2002 - continued TIMOTHY PLAN FAMILY OF FUNDS Note 1 - Significant Accounting Policies (cont.) The Timothy Plan Strategic Growth Fund seeks to generate medium to high levels of long-term capital growth. The Fund seeks to achieve its investment objective by normally investing at least 75% of its net assets in the following Funds: approximately 15%-20% of its net assets in the Timothy Plan Small-Cap Value Fund; approximately 20%-25% of its net assets in the Timothy Plan Large/Mid-Cap Value Fund; approximately 30%-35% of its net assets in the Timothy Plan Large/Mid-Cap Growth Fund; and approximately 15%-20% in the Timothy Plan Aggressive Growth Fund. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America 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. The Timothy Plan Large/Mid-Cap Value Fund has made certain investments in real estate investment trusts ("REITs") which pay dividends to their shareholders based upon available funds from operations. It is quite common for these dividends to exceed the REIT's taxable earnings and profits resulting in the excess portion of such dividends being designated as a return of capital. C. Net Asset Value Per Share Net asset value per share of the capital stock of the Funds 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 following Funds, The Timothy Plan Aggressive Growth Fund, The Timothy Plan Conservative Growth Fund, The Timothy Plan Fixed Income Fund, The Timothy Plan Small-Cap Value Fund, The Timothy Plan Large/Mid-Cap Growth Fund, The Timothy Plan Large/Mid-Cap Value Fund, The Timothy Plan Strategic Growth Fund. The asset value of the classes may differ because of different fees and expenses charged to each class. D. Classes Class specific expenses are borne by that class. Income, expenses, and realized and unrealized gains/losses are allocated to the respective classes on the basis of relative daily net assets. E. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, 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. NOTES TO FINANCIAL STATEMENTS December 31, 2002 - continued TIMOTHY PLAN FAMILY OF FUNDS Note 2 - Purchases and Sales of Securities The following is a summary of the cost of purchases and proceeds from the sale of securities, other than short-term investments, for the year ended December 31, 2002: funds purchases sales - -------------------------------------------------------------------------------- Agggressive Growth Fund $ 8,625,766 $ 5,727,079 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Conservative Growth Fund $ 9,515,000 $ - - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Fixed Income Fund $ 8,421,079 $ 1,589,413 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Large/Mid-Cap Growth Fund $ 14,439,918 $ 6,155,982 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Large/Mid-Cap Value Fund $ 13,173,759 $ 6,442,425 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Small-Cap Value Fund $ 27,296,134 $ 22,103,029 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Strategic Growth Fund $ 9,660,000 $ 100,000 - -------------------------------------------------------------------------------- Note 3 - Investment Management Fee and Other Transactions with Affiliates Timothy Partners, LTD., ("TPL") is the investment advisor for the Funds pursuant to an investment advisory agreement (the "Agreement") effective May 1, 1998. Under the terms of the Agreement, TPL receives a fee, accrued daily and paid monthly, at an annual rate of 0.85% of the average daily net assets of The Timothy Plan Aggressive Growth, The Timothy Plan Small-Cap Value, The Timothy Plan Large/Mid-Cap Growth and The Timothy Plan Large/Mid-Cap Value Funds; 0.60% of the average daily net assets of The Timothy Plan Fixed Income and Timothy Plan Money Market Funds; and 0.15% of the average daily net assets of The Timothy Plan Conservative Growth and The Timothy Plan Strategic Growth Funds. TPL has voluntarily agreed to reduce fees payable to it by the Funds and reimburse other expenses to the extent necessary to limit the Funds' aggregate annual operating expenses, excluding brokerage commissions and other portfolio transaction expenses, interest, taxes, capital expenditures and extraordinary expenses to 0.85% for the Timothy Plan Money Market Fund and to the specified percentages listed below for each class of shares: funds Class A Class B - -------------------------------------------------------------------------- Agggressive Growth Fund 1.60% 2.35% - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Conservative Growth Fund 1.20% 1.95% - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Fixed Income Fund 1.35% 2.10% - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Large/Mid-Cap Growth Fund 1.60% 2.35% - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Large/Mid-Cap Value Fund N/A N/A - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Small-Cap Value Fund N/A N/A - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Strategic Growth Fund 1.25% 2.00% - -------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS December 31, 2002 - continued TIMOTHY PLAN FAMILY OF FUNDS Note 3 - Investment Management Fee and Other Transactions with Affiliates (cont.) For the year ended December 31, 2002, TPL waived and reimbursed the Funds as follows: waivers and funds reimbursements - -------------------------------------------------------------------------- Agggressive Growth Fund $ 49,212 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Conservative Growth Fund $ 26,278 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Fixed Income Fund $ 39,234 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Large/Mid-Cap Growth Fund $ 26,641 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Large/Mid-Cap Value Fund $ - - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Money Market Fund $ 33,176 - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Small-Cap Value Fund $ - - -------------------------------------------------------------------------- - -------------------------------------------------------------------------- Strategic Growth Fund $ 13,709 - -------------------------------------------------------------------------- For the Timothy Plan Aggressive Growth Fund, The Timothy Plan Fixed Income Fund, The Timothy Plan Large/Mid-Cap Growth Fund, and the Timothy Plan Money Market Fund have agreed to repay these expenses in the first, second and third years following the fiscal year ending December 31, 2004 to the extent the total expenses of the funds for any such year do not exceed 1.60% for Class A of the Aggressive and Large/Mid-Cap Growth Funds, 1.35% for Class A of the Fixed Income Fund, 2.35% for Class B of the Aggressive and Large/Mid-Cap Growth Funds, 2.10% for Class B of the Fixed Income Fund, and 0.85% for the Money Market Fund or any lower expense limitations to which each Fund's adviser may agree. The Timothy Plan Aggressive Growth, Timothy Plan Conservative Growth, Timothy Plan Fixed Income, Timothy Plan Large/Mid-Cap Growth, Timothy Plan Large/Mid-Cap Value, Timothy Plan Small-Cap Value, and Timothy Plan Strategic Growth Funds have adopted shareholder services plans (the "Plans") pursuant to Rule 12b-1 under the Investment Company Act of 1940, as amended. The Plans provide that the Fund will pay TPL or others for expenses that relate to the promotion or distribution of shares. Under the Class A Plan, the Funds will pay TPL a fee at an annual rate of 0.25%, payable monthly, of the average daily net assets attributable to such class of shares. Under the Class B Plans, the Fund will pay TPL a fee at an annual rate of 1.00%, payable monthly, of which, 0.25% may be a service fee and 0.75% may be payable to outside broker/dealers, of the average daily net assets attributable to such class of shares. For the year ended December 31, 2002, the Funds paid TPL under the terms of the Plan as follows: funds distribution costs service fees - -------------------------------------------------------------------------- Aggressive Growth Fund $ 13,887 $ 1,127 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Conservative Growth Fund $ 66,621 $ 51,283 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Fixed Income Fund $ 32,636 $ 4,497 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Large/Mid-Cap Growth Fund $ 36,198 $ 2,683 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Large/Mid-Cap Value Fund $ 68,993 $ 9,613 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------- Small-Cap Value Fund $ 182,845 $ 41,705 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Strategic Growth Fund $ 82,303 $ 60,208 - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS December 31, 2002 - continued TIMOTHY PLAN FAMILY OF FUNDS Note 4 - Unrealized Appreciation (Depreciation) At December 31, 2002, the cost for federal income tax purposes is and the composition of gross unrealized appreciation (depreciation) of investment securities is as follows: funds cost app dep net app. / dep. - --------------------------------------------------------------------------------------------------- Aggressive Growth Fund $ 5,546,980 $ 208,225 $ (348,375) $ (140,150) - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- Conservative Growth Fund $ 19,357,562 $ 249,669 $ (2,256,636) $ (2,006,967) - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- Fixed Income Fund $ 12,407,631 $ 697,667 $ (139,491) $ 558,176 - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- Large/Mid-Cap Growth Fund $ 15,608,884 $ 441,455 $ (1,928,262) $ (1,486,807) - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- Large/Mid-Cap Value Fund $ 24,556,348 $ 987,756 $ (3,457,648) $ (2,469,892) - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- Money Market Fund $ 3,527,056 N/A N/A N/A - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- Small-Cap Value Fund $ 39,042,377 $ 2,085,244 $ (3,998,336) $ (1,913,092) - --------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------- Strategic Growth Fund $ 21,290,692 $ - $ (4,517,022) $ (4,517,022) - ---------------------------------------------------------------------------------------------------
Note 5 - Distributions to Shareholders The tax character of distributions paid during 2002 and 2001 were as follows: Aggressive Conservative Fixed Income Large/Mid-Cap Growth Fund Growth Fund Fund Growth Fund -------------------------------------------------------------------------- 2002 Ordinary Income $ - $ 213 $ 461,329 $ - Long-term Capital Gains - - 14,208 - -------------------------------------------------------------------------- -------------------------------------------------------------------------- $ - $ 213 $ 475,537 $ - ========================================================================== 2001 Ordinary Income $ - $ 2,422 $ 136,792 $ - Long-term Capital Gains - 7,457 - - -------------------------------------------------------------------------- -------------------------------------------------------------------------- $ - $ 9,879 $ 136,792 $ - ==========================================================================
As of December 31, 2002, the components of distributable earnings on a tax basis were as follows: Undistributed Ordinary Income $ - $ - $ - $ - Undistributed Long-term Captial Gains (1,620,075) (10,690) - (3,241,153) Unrealized Appreciation (Depreciation) (369,704) (2,006,967) 558,176 (1,552,691) -------------------------------------------------------------------------- $(1,989,779) $ (2,017,657) $ 558,176 $ (4,793,844) ==========================================================================
NOTES TO FINANCIAL STATEMENTS December 31, 2002 - continued TIMOTHY PLAN FAMILY OF FUNDS Note 5 - Distributions to Shareholders - continued The tax character of distributions paid during 2002 and 2001 were as follows: Large/Mid-Cap Money Small-Cap Strategic Value Fund Market Fund Value Fund Growth Fund -------------------------------------------------------------- 2002 Ordinary Income $ - $ 25,691 $ - $ - Long-term Capital Gains - - 17,899 531 --------------------------------------------------------------- --------------------------------------------------------------- $ - $ 25,691 $ 17,899 $ 531 =============================================================== 2001 Ordinary Income $ 55,822 $ 61,546 $ 64,519 $ - Long-term Capital Gains - - 16,332 18,684 --------------------------------------------------------------- --------------------------------------------------------------- $ 55,822 $ 61,546 $ 80,851 $ 18,684 ===============================================================
As of December 31, 2002, the components of distributable earnings on a tax basis were as follows: Undistributed Ordinary Income $ - $ 224 $ - $ - Undistributed Long-term Captial Gains (224,362) - 230 1,602 Unrealized Appreciation (Depreciation) 2,520,461) - (1,913,092) (4,516,293) --------------------------------------------------------------- $ (2,744,823) $ 224 $ (1,912,862) $ (4,514,691) ===============================================================
Note 6 - Capital Loss Carryforwards Loss Year Carryforward Expiring Aggressive Growth Fund $ 544,723 2009 1,075,352 2010 Conservative Growth Fund $ 10,690 2010 Large/Mid-Cap Growth Fund $ 278,925 2009 2,962,228 2010 Large/Mid-Cap Value Fund $ 141,935 2009 82,427 2010 To the extent these loss carryforwards are used to offset future capital gains, it is probable that the amount, which is offset, will not be distributed to shareholders. The Aggressive Growth, Large/Mid-Cap Growth and Large/Mid-Cap Value Funds have elected to defer post-October losses of $228,626, $65,884, and $50,569, which will be available to offset gains in 2003. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS December 31, 2002 TIMOTHY PLAN FAMILY OF FUNDS To the Shareholders and Board of Trustees The Timothy Plan Winter Park, Florida We have audited the accompanying statements of assets and liabilities of The Timothy Plan (comprising respectively; The Timothy Aggressive Growth Fund, The Timothy Conservative Growth Fund, The Timothy Fixed Income Fund, The Timothy Small-Cap Value Fund, The Timothy Large/Mid-Cap Growth Fund, The Timothy Large/Mid-Cap Value Fund, The Timothy Money Market Fund and The Timothy Strategic Growth Fund), including the portfolios of investments as of December 31, 2002, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated thereon. These financial statements and financial highlights are the responsibility of the Funds' 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 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 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, 2002, by correspondence with the custodian and brokers or by other appropriate procedures where replies from brokers were not received. 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, 2002, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated thereon, in conformity with accounting principles generally accepted in the United States of America. TAIT, WELLER & BAKER Philadelphia, Pennsylvania February 12, 2003 December 31, 2002 Dear Shareholder: While this may sound like deja vu (all over again as Yogi Berra would say), the sky is not falling - even though it may seem like it at times. We have now endured a nearly historic and almost unprecedented third consecutive year of negative market returns (although, thankfully, some of our equity funds were actually up in two of those three years.) The question at hand is: will we have a fourth such year in 2003? Although we are seeing some encouraging economic recovery signs, the two major negatives over-hanging the market at this writing are the seemingly inevitable war with Iraq and further potential terrorist attacks. While either or both of these could produce some short-term market damage, I firmly believe the underlying strength of our nation's capital markets will digest and overcome either or both of these concerns should they occur. If history means anything, and I believe it does, then the twelve months following the end of a bear market have almost always produced very strong positive returns. In all too many cases, those investors that finally lost heart and capitulated toward the end of bear markets of longer duration have stood on the sidelines and missed the recovery. I have said all that to say this: your Timothy Plan has some of the finest, proven and respected money managers in the industry serving as our sub-advisors and we have every confidence that we will fully participate in the recovery that we expect to follow this extraordinarily long and painful bear market. Once again, my admonition to you is simply this - hang in there, we believe you'll be glad you did. Sincerely, Arthur D. Ally, President Returns for the Year Ended December 31, 2002 - ---------------------------- ------------- ---------------------------------- Fund/Index 6 Month Total Return Since Inception May 1, 2002 - ---------------------------- ------------- ---------------------------------- - ---------------------------- ------------- ---------------------------------- Timothy Conservative -6.35% -10.00% Growth Portfolio Variable Series Fund - ---------------------------- - ---------------------------- S&P 500 Index -10.29% -18.02% - ---------------------------- ------------- ---------------------------------- Cons Annuity S&P 500 5/1/02 10,000.00 10,000.00 5/31/02 9,960.00 9,839.42 6/30/02 9,610.00 9,138.56 7/31/02 9,030.00 8,426.46 8/31/02 9,110.00 8,481.63 9/30/02 8,690.00 7,560.68 10/31/02 8,850.00 8,225.50 11/30/02 9,190.00 8,709.17 12/31/02 8,999.80 8,197.80 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund, and the S&P 500 Index on May 1, 2002 and held through December 31, 2002. The S&P 500 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index returns do not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Fund's return represents past performance and is not predictive of future results. Returns for the Year Ended December 31, 2002 - ---------------------------- ------------- ---------------------------------- Fund/Index 6 Month Total Return Since Inception May 6, 2002 - ---------------------------- ------------- ---------------------------------- - ---------------------------- ------------- ---------------------------------- Timothy Strategic Growth -10.50% -17.50% Portfolio Variable Series Fund - ---------------------------- - ---------------------------- S&P 500 Index -10.29% -15.41% - ---------------------------- ------------- ---------------------------------- Strat Annuity S&P 500 5/6/02 10,000.00 10,000.00 5/31/02 9,870.00 9,839.42 6/30/02 9,240.00 9,138.56 7/31/02 8,460.00 8,426.46 8/31/02 8,500.00 8,481.63 9/30/02 7,940.00 7,560.68 10/31/02 8,240.00 8,225.50 11/30/02 8,600.00 8,709.17 12/31/02 8,270.00 8,197.80 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund, and the S&P 500 Index on May 6, 2002 and held through December 31, 2002. The S&P 500 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index returns do not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Fund's return represents past performance and is not predictive of future results. SCHEDULE OF INVESTMENTS As of December 31, 2002 Timothy Plan Conservative Growth Portfolio Variable Series MUTUAL FUNDS - 99.33% number of shares market value 40,040 Timothy Fixed Income Fund - Class A $ 410,405 58,110 Timothy Large Mid Cap Growth Fund - Class A * 298,687 45,314 Timothy Large Mid Cap Value Fund - Class A * 412,812 148,888 Timothy Plan Money Market Fund 148,888 20,168 Timothy Small Cap Value Fund - Class A 224,473 -------------- Total Mutual Funds (cost $1,603,268) 1,495,265 SHORT TERM INVESTMENTS - 0.36% number of shares market value 5,406 First American Government Money Market Fund 5,406 ----------------- Total Short Term Investments (cost $5,406) 5,406 Total Investments - 99.69% (identified cost $1,608,674) 1,500,671 OTHER ASSETS AND LIABILITIES, NET - 0.31% 4,612 Net Assets - 100.00% $ 1,505,283 ==================
* Non-income producing securities. STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 Timothy Plan Conservative Growth Portfolio Variable Series ASSETS amount Investments in Securities at Value (identified cost $1,608,674) [NOTE 1] $ 1,500,671 Receivables: Fund Shares Sold 2,260 Interest 157 Dividends 4,184 Due From Investment Advisor 3,162 Total Assets 1,510,434 ================== LIABILITIES amount Accrued Expenses 5,151 Total Liabilities 5,151 NET ASSETS amount Net Assets $ 1,505,283 SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $ 1,613,363 Undistributed Net Investment Income 1,422 Accumulated Net Realized Loss (1,499) Net Unrealized Depreciation in Value of Investments (108,003) Net Assets $ 1,505,283 Shares of Capital Stock Outstanding (No Par Value, Unlimited Shares Authorized) 167,811 Net Asset Value, Offering and Redemption Price Per Share ($1,505,283 / 167,811 Shares) $ 8.97
STATEMENT OF OPERATIONS For the period May 1, 2002 (commencement of operations) to December 31, 2002 Timothy Plan Conservative Growth Portfolio Variable Series INVESTMENT INCOME amount Interest $ 749 Dividends 11,766 Total Investment Income 12,515 EXPENSES amount Investment Advisory Fees [Note 3] 768 Auditing Fees 686 Transfer Agent Fees 3,734 Custodian Fees 1,784 Legal Fees 1,181 Pricing Fees 387 Participation Fees 1,921 Printing Fees 686 Fund Accounting Expense 11,450 Miscellaneous Expense 1,005 Total Expenses 23,602 Expenses Waived by Advisor [Note 3] (17,132) Total Net Expenses 6,470 Net Investment Income 6,045 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS amount Net Realized (Loss) on Investments (1,732) Capital gain distributions from other investment companies 553 Change in Unrealized (Depreciation) of Investments (108,003) Net Realized and Unrealized (Loss) on Investments (109,182) (Decrease) in Net Assets Resulting from Operations $ (103,137) ===============
STATEMENT OF CHANGES IN NET ASSETS Timothy Plan Conservative Growth Portfolio Variable Series INCREASE (DECREASE) IN NET ASSETS Period ended 12/31/02 (a) Operations: Net Investment Income $ 6,045 Net Realized (Loss) on Investments (1,732) Capital gain distributions from other investment companies 553 Net Change in Unrealized (Depreciation) of Investments (108,003) ------------ (Decrease) in Net Assets (resulting from operations) (103,137) Distributions to Shareholders: Net Income (4,622) Net Realized Gains (321) ------------ Total Distributions to Shareholders (4,943) Capital Share Transactions: Proceeds from Shares Sold 2,114,970 Dividends Reinvested 4,944 Cost of Shares Redeemed (506,551) ------------ Increase in Net Assets (resulting from capital share transactions) 1,613,363 Total Increase in Net Assets 1,505,283 Net Assets: Beginning of Period - End of Period [Including undistributed net investment income of $1,422] $ 1,505,283 ============== Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold 219,877 Shares Reinvested 551 Shares Redeemed (52,617) ------------ Net Increase in Number of Shares Outstanding 167,811 =============
(a) For the period May 1, 2002 (commencement of operations) to December 31, 2002. FINANCIAL HIGHLIGHTS The table below sets forth financial data for one share of capital stock outstanding throughout each period presented. Timothy Plan Conservative Growth Portfolio Variable Series Period ended (C) 12/31/02 Per Share Operating Performance: Net Asset Value, Beginning of Period $ 10.00 Income from Investment Operations: Net Investment Income 0.07 Net Realized and Unrealized (Loss) on Investments (1.07) ----------- Total from Investment Operations (1.00) Less Distributions: Dividends from Net Investment Income (Loss) (0.03) Dividends from Realized Gains - ----------- Total Distributions (0.03) Net Asset Value at End of Period $ 8.97 Total Return (B) (10.00)% Ratios/Supplimental Data: Net Assets, End of Period (in 000s) $ 1,505 Ratio of Expenses to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor 3.09%(A) After Reimbursement and Waiver of Expenses by Advisor 0.85%(A) Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor (1.45)(A) After Reimbursement and Waiver of Expenses by Advisor 0.79%(A) Portfolio Turnover 6.48% (A) Annualized. (B) For Periods of Less Than One Full Year, Total Returns Are Not Annualized. (C) For the period May 1, 2002 (commencement of operations) to December 31, 2002. SCHEDULE OF INVESTMENTS As of December 31, 2002 Timothy Plan Strategic Growth Portfolio Variable Series MUTUAL FUNDS - 97.97% number of shares market value 49,885 Timothy Aggressive Growth - Class A * $ 227,474 12,803 Timothy Fixed Income - Class A 131,229 82,805 Timothy Large Mid Cap Growth - Class A * 425,617 32,487 Timothy Large Mid Cap Value - Class A * 295,954 20,637 Timothy Small Cap Value - Class A 229,692 ------------- Total Mutual Funds (cost $1,390,000) 1,309,966 SHORT TERM INVESTMENTS - 0.27% number of shares market value 3,595 First American Government Money Market Fund 3,595 ------------ Total Short Term Investments (cost $3,595) 3,595 Total Investments - 98.24% (identified cost $1,393,595) 1,313,561 OTHER ASSETS AND LIABILITIES, NET - 1.76% 23,587 Net Assets - 100.00% $ 1,337,148 ===================
* Non-income producing securities. STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 Timothy Plan Strategic Growth Portfolio Variable Series ASSETS amount Investments in Securities at Value (identified cost $1,393,595) [NOTE 1] $ 1,313,561 Receivables: Fund Shares Sold 24,603 Interest 16 Dividends 1,295 Due from Investment Advisor 4,312 -------------- Total Assets 1,343,787 ============== LIABILITIES amount Payable for Fund Shares Redeemed 79 Accrued Expenses 6,560 ------------ Total Liabilities 6,639 ============ NET ASSETS amount Net Assets $ 1,337,148 SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: Paid-in Capital $ 1,416,940 Accumulated Net Realized Gain on Investments 242 Net Unrealized Depreciation in Value of Investments (80,034) Net Assets $ 1,337,148 Shares of Capital Stock Outstanding (No Par Value, Unlimited Shares Authorized) 162,040 Net Asset Value, Offering and Redemption Price Per Share ($1,337,148/ 162,040 Shares) $ 8.25
STATEMENT OF OPERATIONS For the period May 6, 2002 (commencement of operations) to December 31, 2002 Timothy Plan Strategic Growth Portfolio Variable Series INVESTMENT INCOME amount Interest $ 185 Dividends 2,676 ------------- Total Investment Income 2,861 EXPENSES amount Investment Advisory Fees [Note 3] 460 Auditing Fees 1,044 Transfer Agent Fees 3,796 Accounting Fees 11,637 Legal Fees 1,206 Custodian Fees 1,866 Pricing Fees 392 Participation Fees 1,153 Printing Fees 1,044 Miscellaneous Expense 1,121 -------------- Total Expenses 23,719 Expenses Waived by Advisor [Note 3] (19,820) Total Net Expenses 3,899 Net Investment (Loss) (1,038) REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS amount Capital gain distributions from other investment companies 242 Change in Unrealized (Depreciation) of Investments (80,034) Net Realized and Unrealized (Loss) on Investments (79,792) ------------- (Decrease) in Net Assets Resulting from Operations $ (80,830)
STATEMENT OF CHANGES IN NET ASSETS Timothy Plan Strategic Growth Portfolio Variable Series INCREASE (DECREASE) IN NET ASSETS Period ended 12/31/02 (a) Operations: Net Investment (Loss) $ (1,038) Capital gain distributions from other investment companies $ 242 Net Change in Unrealized (Depreciation) of Investments (80,034) ------------ (Decrease) in Net Assets (resulting from operations) (80,830) Distributions to Shareholders: Net Income - Net Realized Gains - ------------ Total Distributions to Shareholders - Capital Share Transactions: Proceeds from Shares Sold 1,440,046 Dividends Reinvested - Cost of Shares Redeemed (22,068) ------------ Increase in Net Assets (resulting from capital share transactions) 1,417,978 Total Increase in Net Assets 1,337,148 Net Assets: Beginning of Period - End of Period $ 1,337,148 ============ Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold 164,517 Shares Reinvested - Shares Redeemed (2,477) ------------ Net Increase in Number of Shares Outstanding 162,040 ============
(a) For the period May 6, 2002 (commencement of operations) to December 31, 2002. FINANCIAL HIGHLIGHTS The table below sets forth financial data for one share of capital stock outstanding throughout each period presented. Timothy Plan Strategic Growth Portfolio Variable Series Period ended (C) 12/31/02 Per Share Operating Performance: Net Asset Value, Beginning of Period $ 10.00 Income from Investment Operations: Net Investment (Loss) (0.01) Net Realized and Unrealized (Loss) on Investments (1.74) --------- Total from Investment Operations (1.75) Less Distributions: Dividends from Net Investment Income (Loss) - Dividends from Realized Gains - ----------- Total Distributions - Net Asset Value at End of Period $ 8.25 Total Return (B) (17.50)% Ratios/Supplimental Data: Net Assets, End of Period (in 000s) $ 1,337 Ratio of Expenses to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor 5.14%(A) After Reimbursement and Waiver of Expenses by Advisor 0.85%(A) Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement and Waiver of Expenses by Advisor (4.52)%(A) After Reimbursement and Waiver of Expenses by Advisor (0.23)%(A) Portfolio Turnover 0.00% (A) Annualized. (B) For Periods of Less Than One Full Year, Total Returns Are Not Annualized. (C) For the period May 6, 2002 (commencement of operations) to December 31, 2002. NOTES TO FINANCIAL STATEMENTS Timothy Plan Conservative Growth Portfolio Variable Series Timothy Plan Strategic Growth Portfolio Variable Series December 31, 2002 Note 1 - Significant Accounting Policies The Timothy Plan Conservative Growth Portfolio Variable Series and the Timothy Plan Strategic Growth Portfolio Variable Series (individually the "Fund", collectively the "Funds") were organized as a diversified series of The Timothy Plan (the "Trust"). The Trust is an open-ended investment company established under the laws of Delaware by an Agreement and Declaration of Trust dated December 14, 1993 (the "Trust Agreement"). The Conservative Growth Portfolio's primary objective is moderate long-term capital growth, with a secondary objective of current income only to the extent that the Timothy Funds in which the Conservative Growth Portfolio invests seek current income. The Strategic Growth Portfolio's primary investment objective is medium to high levels of long term capital growth, with a secondary objective of current income only to the extent that the Timothy Funds in which the Strategic Growth Portfolio invests seek current income. The Conservative Growth Portfolio seeks to achieve its investment objectives by investing primarily in the following Timothy Funds: Small Cap Value Fund, Large/Mid Cap Value Fund, Large/Mid Cap Growth Fund, Fixed Income Fund and the Money Market Fund. The Strategic Growth Portfolio seeks to achieve its investment objectives by investing primarily in the following Timothy Funds: Small Cap Value Fund, Large/Mid Cap Value Fund, Large/Mid Cap Growth Fund, Aggressive Growth Fund and the Fixed Income Fund. Each Fund is one of one series of funds currently authorized by the Board of Trustees. The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies. The Conservative Growth Portfolio began operations May 1, 2002 and the Strategic Growth Portfolio began operations May 6, 2002. A. Security Valuation. Each Fund purchases Class A Shares of the Timothy Funds at net asset value without any sales charges. With respect to securities owned by the Timothy Funds, securities listed or traded on a securities exchange for which representative market quotations are available will be valued at the last quoted sales price on the security's principal exchange on that day. Listed securities not traded on an exchange that day, and other securities which are traded in the over-the-counter markets, will be valued at the last reported bid price in the market on that day, if any. Securities for which market quotations are not readily available and all other assets will be valued at their respective fair market values as determined by the Adviser in conformity with guidelines adopted by and subject to the review of the Board of Trustees. 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 per share of the capital stock of each 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. D. 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. NOTES TO FINANCIAL STATEMENTS Timothy Plan Conservative Growth Portfolio Variable Series Timothy Plan Strategic Growth Portfolio Variable Series December 31, 2002 E. Use of Estimates. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, 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 The following is a summary of the cost of purchases and proceeds from the sale of securities, other than short-term investments, for the period May 1, 2002 (commencement of operations) for the Conservative Growth Portfolio and May 6, 2002 (commencement of operations) for the Strategic Growth Portfolio to December 31, 2002: funds purchases sales - -------------------------------------------------------------------------------- Conservative Growth Portfolio $ 1,526,407 $ 70,295 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Strategic Growth Portfolio $ 1,390,000 $ - - -------------------------------------------------------------------------------- Note 3 - Investment Management Fee and Other Transactions with Affiliates Timothy Partners, LTD., ("TPL") is the investment Advisor for the Fund pursuant to an Amended and Restated Investment Advisory Agreement (the "Agreement") effective April 27, 2001. Under the terms of the Agreement, TPL receives a fee, accrued daily and paid monthly, at an annual rate of 0.10% of the average daily net assets of each Fund. The Advisor has contractually agreed to reduce fees payable to it by the Funds and reimburse other expenses to the extent necessary to limit each Fund's aggregate annual operating expenses, excluding brokerage commissions and other portfolio transaction expenses, interest, taxes, capital expenditures and extraordinary expenses, to 0.85% of average daily net assets through May 1, 2004. As a result, the Advisor has waived a portion of their fee and reimbursed the Fund for expenses in excess of the limit in the amount of $17,132 for the Conservative Growth Portfolio and $19,820 for the Strategic Growth Portfolio for the period May 1, 2002 (commencement of operations) and May 6, 2002 (commencement of operations) to December 31, 2002, respectively. Note 4 - Unrealized Appreciation (Depreciation) At December 31, 2002, the cost for federal income tax purposes is and the composition of gross unrealized appreciation (depreciation) of investment securities is as follows: funds cost app dep net app. / dep. - -------------------------------------------------------------------------------- Conservative Growth $ 1,610,727 $ 19,442 $ (129,498) $ (110,056) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Strategic Growth $ 1,393,595 $ 4,475 $ (84,509) $ (80,034) - -------------------------------------------------------------------------------- NOTES TO FINANCIAL STATEMENTS Timothy Plan Conservative Growth Portfolio Variable Series Timothy Plan Strategic Growth Portfolio Variable Series December 31, 2002 Note 5 - Distributions to Shareholders The tax character of distributions paid during 2002 were as follows: Conservative Growth Strategic Growth Portfolio Portfolio 2002 Ordinary Income $ 4,943 $ - Long-term Capital Gains - - ---------------------- ------------------ $ 4,943 $ - ====================== =================== As of December 31, 2002, the components of distributable earnings on a tax basis were as follows: Undistributed Ordinary Income $ 1,422 $ - Undistributed Long-term Capital Gains 554 242 Unrealized (Depreciation) (110,056) (80,034) ---------------- -------------- $ (108,080) $ (79,792) ================ ============== REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees The Timothy Plan Conservative Growth Portfolio Variable Series The Timothy Plan Strategic Growth Portfolio Variable Series Winter Park, Florida We have audited the accompanying statement of assets and liabilities of The Timothy Plan Conservative Growth Portfolio Variable Series and The Timothy Plan Strategic Growth Portfolio Variable Series, each a series of shares of The Timothy Plan, including the portfolio of investments, as of December 31, 2002, and the related statements of operations, the statement of changes in net assets and the financial highlights for the periods then ended. These financial statements and financial highlights are the responsibility of the Funds' 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 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 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, 2002, 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 Conservative Growth Portfolio Variable Series and The Timothy Plan Strategic Growth Portfolio Variable Series as of December 31, 2002, the results of its operations, the changes in their net assets, and the financial highlights for the periods then ended, in conformity with accounting principles generally accepted in the United States of America. TAIT, WELLER & BAKER Philadelphia, Pennsylvania February 7, 2003 December 31, 2002 Dear Shareholder: While this may sound like deja vu (all over again as Yogi Berra would say), the sky is not falling - even though it may seem like it at times. We have now endured a nearly historic and almost unprecedented third consecutive year of negative market returns (although, thankfully, our Small Cap Variable account was actually up in two of those three years.) The question at hand is: will the negative market environment continue in 2003? Although we are seeing some encouraging economic recovery signs, the two major negatives over-hanging the market at this writing are the seemingly inevitable war with Iraq and further potential terrorist attacks. While either or both of these could produce some short-term market damage, I firmly believe the underlying strength of our nation's capital markets will digest and overcome either or both of these concerns should they occur. If history means anything, and I believe it does, then the twelve months following the end of a bear market have almost always produced very strong positive returns. In all too many cases, those investors that finally lost heart and capitulated toward the end of bear markets of longer duration have stood on the sidelines and missed the recovery. I have said all that to say this: your Timothy Plan fund has one of the finest, proven and respected money managers in the industry serving as our sub-advisor and we have every confidence that we will fully participate in the recovery that we expect to follow this extraordinarily long and painful bear market. Once again, my admonition to you is simply this - hang in there, we believe you'll be glad you did. Sincerely, Arthur D. Ally, President Returns for the Year Ended December 31, 2002 - ---------------------------- ------------- ---------------------------------- Fund/Index 1 Year Average Annual Total Return Since Inception May 22, 1998 - ---------------------------- ------------- ---------------------------------- - ---------------------------- ------------- ---------------------------------- Timothy Small Cap Variable -17.38% 4.68% Fund - ---------------------------- - ---------------------------- Russell 2000 Index -20.48% 2.74% - ---------------------------- ------------- ---------------------------------- Annuity Russell 2000 5/28/98 10,000.00 10,000.00 12/31/98 10,380.00 9,180.43 6/30/99 11,510.00 10,032.71 12/31/99 12,391.68 11,131.87 6/30/00 13,804.15 11,469.88 12/31/00 13,402.34 10,795.58 6/30/01 14,481.95 11,535.42 12/31/01 14,941.03 11,063.94 6/30/02 14,643.35 10,543.80 12/31/02 12,343.93 8,797.69 The chart shows the value of a hypothetical initial investment of $10,000 in the Fund, and the Russell 2000 Index on May 22, 1998 and held through December 31, 2002. The Russell 2000 Index is widely recognized, unmanaged index of common stock prices. Performance figures include the change in value of the stocks in the index and the reinvestment of dividends. The index returns do not reflect expenses, which have been deducted from the Fund's return. The returns shown do not reflect deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The Fund's return represents past performance and is not predictive of future results. SCHEDULE OF INVESTMENTS As of December 31, 2002 Timothy Plan Small-Cap Variable Series COMMON STOCKS - 73.28% number of shares market value BALL & ROLLER BEARINGS - 2.50% 5,700 Kaydon Corp. $ 120,897 BUSINESS SERVICES - 3.00% 9,100 NCO Group, Inc. * 145,145 CANNED, FROZEN & PRESERVED FRUIT, VEGETABLES & FOOD SPECIALTIES - 2.80% 4,500 Corn Products International, Inc. 135,585 DENTAL EQUIPMENT & SUPPLIES - 4.30% 10,000 Apogent Technologies, Inc. * 208,000 DRAWING & INSULATING NONFERROUS WIRE - 2.04% 6,500 Belden, Inc. 98,930 ELECTRIC & OTHER SERVICES COMBINED - 2.81% 6,000 ALLETE, Inc. 136,080 LIFE INSURANCE - 0.43% 2,100 Presidential Life Corp. 20,853 MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT, & SUPPLIES - 2.70% 9,800 Rayovac Corp. * 130,634 MISCELLANEOUS PLASTIC PRODUCTS - 3.84% 9,000 Spartech Corp. 185,670 PHARMACEUTICAL PREPARATIONS - 0.24% 500 K-V Pharmaceutical Co. - Class A * 11,600 PHOTOGRAPHIC EQUIPMENT & SUPPLIES - 2.81% 25,000 Concord Camera Corp. * 135,750 PUBLIC WAREHOUSING & STORAGE - 2.56% 3,750 Iron Mountain, Inc. * 123,788 RADIO & TV BROADCASTING & COMMUNICATIONS EQUIPMENT - 1.60% 9,800 CommScope, Inc. * 77,420 RAILROADS, LINE-HAUL OPERATING - 1.98% 8,000 Kansas City Southern Industries, Inc. * 96,000 RETAIL - EATING PLACES - 2.50% 7,000 Ruby Tuesday, Inc. 121,030 RETAIL - FAMILY CLOTHING STORES - 3.44% 7,900 Stage Stores, Inc. 166,216 SCIENTIFIC/TECHNICAL INSTRUMENTS - 3.05% 8,000 Cognex Corp. * 147,440 SECURITY BROKERS, DEALERS & FLOTATION COMPANIES - 3.07% 6,650 Investment Technology Group 148,694 SEMICONDUCTOR EQUIPMENT/MATERIALS - 2.72% 23,500 Axcelis Technologies, Inc. * 131,811
SCHEDULE OF INVESTMENTS As of December 31, 2002 Timothy Plan Small-Cap Variable Series COMMON STOCKS - 73.28% - continued number of shares market value SERVICES - BUSINESS SERVICES - 12.59% 8,120 SOURCECORP, Inc. * $ 150,951 8,250 StarTek, Inc. * 227,700 10,200 TeleTech Holdings, Inc. * 74,052 7,000 Viad Corp. 156,450 --------------- 609,153 SERVICES - COMPUTER PROGRAMMING SERVICES - 1.39% 12,000 Hall, Kinion & Associates, Inc. * 67,092 SERVICES - COMPUTER INTEGRATED SYSTEMS DESIGN - 2.31% 9,300 Henry Jack & Associates, Inc. 111,972 SERVICES - EMPLOYMENT AGENCIES - 1.73% 11,200 Korn/Ferry International * 83,776 SERVICES - MISCELLANEOUS HEALTH & ALLIED SERVICES - 2.41% 19,000 Hooper Holmes, Inc. 116,660 STATE COMMERCIAL BANKS - 1.02% 1,900 Capital Crossing Bank * 49,115 TELEPHONE & TELEGRAPH APPARATUS - 3.44% 11,000 Plantronics, Inc. * 166,430 Total Common Stocks (cost $4,418,694) $ 3,545,741 SHORT TERM INVESTMENTS - 27.30% number of shares/principal amount market value $ 721,000 U.S. Bank Repurchase Agreement $ 721,000 1.05%, dated 12/31/02, due 1/2/03, repurchase price $721,042, collateralized by $735,500 by FHLMC, 5/1/17 300,000 Huntington Money Fund - Investment A 300,000 300,000 Star Bank Treasury 300,000 -------------- Total Short Term Investments (cost $1,321,000) 1,321,000 Total Investments - 100.58% (identified cost $5,739,694) $ 4,866,741 LIABILITIES IN EXCESS OF OTHER ASSETS - (0.58)% (27,830) Net Assets - 100.00% $ 4,838,911 ==============
* Non-income producing securities. STATEMENT OF ASSETS AND LIABILITIES As of December 31, 2002 Timothy Plan Small-Cap Variable Series ASSETS amount Investments in Securities at Value (identified cost $5,739,694) [NOTE 1] $ 4,866,741 Cash 630 Receivables: Interest 305 Dividends 3,359 Due from Advisor 1,959 ------------------ Total Assets 4,872,994 ================== LIABILITIES amount Payable for Fund Shares Redeemed 27,833 Accrued Expenses 6,250 ------------------ Total Liabilities 34,083 ================== NET ASSETS amount Net Assets $ 4,838,911 SOURCES OF NET ASSETS amount At December 31, 2002, Net Assets Consisted of: $ Paid-in Capital $ 5,726,722 Accumulated Net Realized Loss (14,858) Net Unrealized Depreciation in Value of Investments (872,953) ---------------- Net Assets $ 4,838,911 Shares of Capital Stock Outstanding (No Par Value, Unlimited Shares Authorized) 452,383 Net Asset Value, Offering and Redemption Price Per Share ($4,838,911 / 452,383 Shares) $ 10.70
STATEMENT OF OPERATIONS For the year ended December 31, 2002 Timothy Plan Small-Cap Variable Series INVESTMENT INCOME amount nterest $ 8,296 Dividends 52,265 ----------------- Total Investment Income 60,561 ----------------- EXPENSES amount Investment Advisory Fees [Note 3] 55,555 Transfer Agent Fees 11,881 Administration Fees 124 Accounting Fees 11,626 Custodian Fees 2,276 Pricing Fees 3,074 Registration Fees 73 Report Printing Fees 666 Auditing Fees 1,329 Insurance Expense 759 Participation Fees 11,114 Legal Expense 1,604 Miscellaneous Expense 1,040 ----------------- Total Expenses 101,121 Expenses Waived by Advisor [Note 3] (34,673) ----------------- Total Net Expenses 66,448 ----------------- Net Investment (Loss) (5,887) ----------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS amount Net Realized Gain on Investments 63,638 Change in Unrealized Appreciation (Depreciation) of Investments (1,186,240) ----------------- Net Realized and Unrealized (Loss) on Investments (1,122,602) ----------------- (Decrease) in Net Assets Resulting from Operations $ (1,128,489) =================
STATEMENT OF CHANGES IN NET ASSETS Timothy Plan Small-Cap Variable Series INCREASE (DECREASE) IN NET ASSETS year ended year ended 12/31/02 12/31/01 Operations: Net Investment (Loss) $ (5,887) $ (5,957) Net Realized Gain on Investments 63,638 167,770 Net Change in Unrealized Appreciation (Depreciation) of Investments (1,186,240) 336,860 -------------- ------------- Increase (Decrease) in Net Assets (resulting from operations) (1,128,489) 498,673 -------------- ------------- Distributions to Shareholders: Return of Capital (35,110) - Net Realized Gains (2,099) (238,059) ------------- ------------- Total Distributions to Shareholders (37,209) (238,059) ------------- ------------- Capital Share Transactions: Proceeds from Shares Sold 2,288,278 1,934,183 Dividends Reinvested 37,209 238,059 Cost of Shares Redeemed (1,435,018) (644,261) ------------ -------------- Increase (Decrease) in Net Assets (resulting from capital share transactions) 890,469 1,527,981 ------------ -------------- Total Increase (Decrease) in Net Assets (275,229) 1,788,595 Net Assets: Beginning of Year 5,114,140 3,325,545 ------------ ------------ End of Year $ 4,838,911 $ 5,114,140 ============ ============= Shares of Capital Stock of the Fund Sold and Redeemed: Shares Sold 178,384 153,573 Shares Reinvested 3,482 18,495 Shares Redeemed (121,453) (50,727) ------------ ------------- Net Increase in Number of Shares Outstanding 60,413 121,341 ============ =============
FINANCIAL HIGHLIGHTS The table below sets forth financial data for one share of capital stock outstanding throughout each period presented. Timothy Plan Small-Cap Variable Series year year year year period ended ended ended ended ended 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98 (a) Per Share Operating Performance: Net Asset Value, Beginning of Period $ 13.05 $ 12.29 $ 12.37 $ 10.38 $ 10.00 Income from Investment Operations: Net Investment Income (Loss) (0.01) (0.02) 0.07 (0.06) 0.08 Net Realized and Unrealized Gain (Loss) on (2.26) 1.42 0.94 2.07 0.30 Investments ------------- ------------- ------------ ---------- ---------- Total from Investment Operations (2.27) 1.40 1.01 2.01 0.38 Less Distributions: Dividends from Net Investment Income - - (0.08) (0.02) - Dividends from Realized Gains - (0.64) (1.01) - - Return of Capital (0.08) - - - - ------------- -------------- ----------- ------------ ----------- Total Distributions (0.08) (0.64) (1.09) (0.02) - Net Asset Value at End of Period $ 10.70 $ 13.05 $ 12.29 $ 12.37 $ 10.38 =========== =========== =========== ============ =========== Total Return (B) (17.38)% 11.48% 8.16% 19.38% 3.80% Ratios/Supplimental Data: Net Assets, End of Period (in 000s) $ 4,839 $ 5,114 $ 3,326 $ 1,137 $ 301 Ratio of Expenses to Average Net Assets: Before Reimbursement and Waiver of 1.82% 2.00% 1.83% 2.60% 2.88% (c) Expenses by Advisor After Reimbursement and Waiver of 1.20% 1.20% 1.20% 1.18% 1.20% (c) Expenses by Advisor Ratio of Net Investment Income (Loss) to Average Net Assets: Before Reimbursement and Waiver of (0.73)% (0.94)% 0.11% (1.47)% 0.98% (c) Expenses by Advisor After Reimbursement and Waiver of (0.11)% (0.14)% 0.74% (0.05)% 2.66% (c) Expenses by Advisor Portfolio Turnover 69.14% 67.40% 85.82% 65.60% 3.00%
(a) For the Period May 22, 1998 (Commencement of Operations) to December 31,1998. (b) For Periods of Less Than One Full Year, Total Returns Are Not Annualized. (c) Annualized. NOTES TO FINANCIAL STATEMENTS Timothy Plan Small-Cap Variable Series December 31, 2002 Note 1 - Significant Accounting Policies The Timothy Plan Small-Cap Variable Series (the "Fund") was organized as a diversified series of The Timothy Plan (the "Trust"). The Trust is an open-ended investment company established under the laws of Delaware by an Agreement and Declaration of Trust dated December 14, 1993 (the "Trust Agreement"). The Fund's primary 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 American Depositary Receipts (ADRs) while abiding by ethical standards established for investments by the Fund. The Fund is one of one series of funds currently authorized by the Board of Trustees. 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 accounting principles generally accepted in the United States of America for investment companies. F. 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. G. 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. H. Net Asset Value Per Share. Net asset 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. I. 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. J. Use of Estimates. In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, 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 $3,333,913 and $2,990,412 respectively, for the year ended December 31, 2002. Note 3 - Investment Management Fee and Other Transactions with Affiliates Timothy Partners, LTD., ("TPL") is the investment Advisor for the Fund pursuant to an Amended and Restated Investment Advisory Agreement (the "Agreement") effective June 11, 2001. Under the terms of the Agreement, TPL receives a fee, accrued daily and paid monthly, at an annual rate of 1.00% of the average daily net assets of the Fund. NOTES TO FINANCIAL STATEMENTS Timothy Plan Small-Cap Variable Series December 31, 2002 Note 3 - Investment Management Fee and Other Transactions with Affiliates - continued The Advisor has voluntarily agreed to reduce fees payable to it by the Fund and reimburse other expenses to the extent necessary to limit the Fund's aggregate annual operating expenses, excluding brokerage commissions and other portfolio transaction expenses, interest, taxes, capital expenditures and extraordinary expenses, to 1.20% of average daily net assets through December 31, 2002. As a result, the Advisor has waived a portion of their fee and reimbursed the Fund for expenses in excess of the limit in the amount of $34,673 for the year ended December 31, 2002. There is no guarantee that the Advisor will waive fees and/or reimburse expenses in the future. Note 4 - Unrealized Appreciation (Depreciation) At December 31, 2002, the cost for federal income tax purposes is $5,739,694. At December 31, 2002 the composition of gross unrealized appreciation (depreciation) of investment securities for tax purposes is as follows: Appreciation Depreciation Net Appreciation The Timothy Plan Small-Cap $131,910 ($1,004,863) ($872,953) Variable Series Note 5 - Distributions to Shareholders The tax character of distributions paid during 2002 and 2001 were as follows: Small-Cap Variable Fund -------------------- 2002 Ordinary Income $ 2,099 Long-term Capital Gains - Return of Capital 35,110 ------------------- ------------------- $ 37,209 =================== 2001 Ordinary Income $ 105,047 Long-term Capital Gains 133,012 ------------------- ------------------- $ 238,059 =================== As of December 31, 2002, the components of distributable earnings on a tax basis were as follows: Undistributed Ordinary Income $ - Undistributed Long-term Captial Gains - Unrealized (Depreciation) (887,811) ------------------- $ (887,811) =================== The difference between book basis and tax basis unrealized depreciation is attributable to the tax deferral of losses on post-October losses. REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS To the Shareholders and Board of Trustees The Timothy Plan Small-Cap Variable Series Winter Park, Florida We have audited the accompanying statement of assets and liabilities of The Timothy Plan Small-Cap Variable Series, a series of shares of The Timothy Plan, including the portfolio of investments, as of December 31, 2002, the related statements of operations for the year then ended, the statement of changes in net assets for each of the two years then ended and the financial highlights for each of the four years in the period then ended and the period May 22, 1998 to December 31, 1998. These financial statements and financial highlights are the responsibility of the Fund'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 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 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, 2002, 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 Small-Cap Variable Series as of December 31, 2002, 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 four years in the period then ended and the period May 22, 1998 to December 31, 1998, in conformity with accounting principles generally accepted in the United States of America. TAIT, WELLER & BAKER Philadelphia, Pennsylvania February 7, 2003 Item 2. Code of Ethics. Not applicable to Annual Reports for the period ended December 31, 2002. Item 3. Audit Committee Financial Expert. Not applicable to Annual Reports for the period ended December 31, 2002. Items 4-8. Reserved Item 9. Controls and Procedures. Not applicable to Annual Reports for the period ended December 31, 2002. Item 10. Exhibits. Certifications required by Item 10(b) of Form N-CSR are 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) .........Timothy Plan By (Signature and Title) * /s/ Arthur Ally [Arthur Ally, President] Date 3/3/03... 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 (Signature and Title) * /s/ Arthur Ally [Arthur Ally, President] Date 3/3/03 ......... By (Signature and Title) * /s/ Arthur Ally [Arthur Ally, Chief Financial Officer] Date 3/3/03 ......... EX-99.CERT 3 timothyex-99cert.txt TIMOTHY Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Aggressive Growth Fund; 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. Date: __2/27/03__ /s/ Arthur D. Ally ----------- Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Aggressive Growth Fund; 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. Date: _2/27/03__ _/s/ Arthur D. Ally__ ---------- ---------------------- Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Small-Cap Variable Series; 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. Date: _2/27/03__ _/s/ Arthur D. Ally___ ---------- ----------------------- Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Small-Cap Variable Series; 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. Date: _2/27/03__ _/s/ Arthur D. Ally___ ---------- ----------------------- Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Conservative Growth Fund; 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. Date: _2/27/03__ __/s/ Arthur D. Ally_ ---------- ---------------------- Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Conservative Growth Fund; 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. Date: __2/27/03__ _/s/ Arthur D. Ally___ ----------- ----------------------- Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Conservative Growth Portfolio Variable Series; 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. Date: _2/27/03__ __/s/ Arthur D. Ally__ ---------- ----------------------- Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Conservative Growth Portfolio Variable Series; 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. Date: _2/27/03__ _/s/ Arthur D. Ally__ ---------- ---------------------- Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Fixed Income Fund; 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. Date: _2/27/03__ _/s/ Arthur D. Ally___ ---------- ----------------------- Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Fixed Income Fund; 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. Date: __2/27/03__ _/s/ Arthur D. Ally___ ----------- ----------------------- Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Large/Mid-Cap Growth Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Large/Mid-Cap Growth Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Large/Mid-Cap Value Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Large/Mid-Cap Value Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Money Market Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Money Market Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Small-Cap Value Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Small-Cap Value Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Strategic Growth Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Strategic Growth Fund; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, Chief Financial Officer Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Strategic Growth Portfolio Series; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, President Exhibit B: FORM N-CSR CERTIFICATION I, Arthur D. Ally, certify that: 1. I have reviewed this report on Form N-CSR of the Timothy Plan Strategic Growth Portfolio Series; 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. Date: 2/27/03 /s/ Arthur D. Ally ------- ------------------ Arthur D. Ally, Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----