The following table includes selected data for a share of capital stock outstanding throughout each year and other performance information derived from the financial statements. The total returns in the table represent the rate that an investor would have earned on an investment in the Fund (assuming reinvestment of all dividends and distributions). All information has been audited by Deloitte & Touche LLP. It should be read in conjuction with the financial statements and notes thereto.
See notes to financial statements.
HILLIARD-LYONS GOVERNMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
AUGUST 31, 2006
NOTE A—SIGNIFICANT ACCOUNTING POLICIES
Hilliard-Lyons Government Fund, Inc. (the “Fund”) is a diversified open-end management investment company registered under the Investment Company Act of 1940 (the “1940 Act”), as amended. The Fund was incorporated in June 1980 under the laws of the state of Maryland. The primary investment objective of the Fund is to provide investors with liquidity and the highest possible level of current income consistent with the preservation of capital.
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Security Valuation: The Fund employs the amortized cost method of security valuation for U.S. Government securities in accordance with Rule 2a-7 of the 1940 Act. Securities are valued at cost when purchased, and thereafter a constant proportionate amortization of any discount or premium, if any, is recorded until maturity of the security. The Board of Directors (the “Board”) monitors deviations between net asset value per share as determined by using available market quotations and the amortized cost method of security valuation. If the deviation in the aggregate is significant, the Board considers what action, if any, should be initiated to provide fair valuation.
Federal Income Taxes: It is the policy of the Fund to continue to qualify under the Internal Revenue Code as a regulated investment company and to distribute all of its taxable income to shareholders, thereby relieving the Fund of federal income tax liability.
Dividends to Shareholders: The net investment income of the Fund is determined on each business day and is declared as a dividend payable to shareholders of record daily and is paid monthly. The tax character of distributions paid during 2006 and 2005 was as follows:
| | | For the year ended August 31, |
| | | 2006 | | 2005 |
| Distributions paid | | | | | | |
| from | | | | | | |
| Ordinary income | | $ | 51,178,421 | | $ | 23,975,071 |
| Total distribution | | $ | 51,178,421 | | $ | 23,975,071 |
Investment Transactions: Investment transactions are accounted for on the date the securities are bought or sold. Income is accrued daily. Interest income and expenses are recorded on the accrual basis. Net realized gains and losses on sales of investments, if any, are determined on the basis of identified cost.
Use of Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make certain estimates and assumptions that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
New Accounting Pronouncements: In July 2006, FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (the “Interpretation”) was issued, and is effective for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. This Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return, and requires certain expanded disclosures. Management has recently begun to evaluate the application of the Interpretation to the Fund, and has not at this time determined the impact, if any, resulting from the adoption of this Interpretation on the Fund’s financial statements.
NOTE B—INVESTMENT ADVISORY FEES & OTHER TRANSACTIONS WITH AFFILIATES
On October 12, 2006, the Fund renewed its investment advisory agreement with J.J.B Hilliard W.L. Lyons, Inc. (the “Adviser”). Under the investment advisory agreement, the Adviser supervises investment operations of the Fund and the composition of its portfolio, and furnishes advice and recommendations with respect to investments and the purchase and sale of securities in accordance with the Fund’s investment objectives, policies and restrictions; subject, however, to the general supervision and control of the Fund’s Board. For the services the Adviser renders, the Fund has agreed to pay the Adviser an
10
HILLIARD-LYONS GOVERNMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS—continued
AUGUST 31, 2006
annual advisory fee of 1/2 of 1% of the first $200 million of average daily net assets, 3/8 of 1% of the next $100 million of average daily net assets, and 1/4 of 1% of the average daily net assets in excess of $300 million. Such fee is accrued daily and paid monthly. The Adviser has agreed to reimburse the Fund if total operating expenses of the Fund, excluding taxes, interest and extraordinary expenses (as defined), exceed on an annual basis 1 1/2% of the first $30 million of average daily net assets and 1% of average daily net assets over $30 million. There was no reimbursement required for the year ended August 31, 2006.
The Fund has entered into a separate Omnibus Account Agreement (the “Omnibus Agreement”) with the Adviser to provide shareholder and administration services to the Fund. Under the Omnibus Agreement, the Adviser provides certain shareholder and administrative functions for the Fund, including but not limited to: (i) preparing and mailing monthly statements to shareholders; (ii) forwarding shareholder communications from the Fund; (iii) responding to inquiries from shareholders concerning their investments in the Fund; (iv) maintaining account information relating to shareholders that invest in the Fund; and (v) processing purchase, exchange and redemption requests from shareholders and placing orders and appropriate documentation with the Fund or its service providers. For its services to the Fund under the Omnibus Agreement, the Adviser receives a monthly fee from the Fund at the annual rate of .25% of the Fund’s average daily net assets for shareholder services and .18% of the Fund’s average daily net assets for administration services.
No compensation is paid by the Fund to officers of the Fund and directors who are affiliated with the Adviser. The Fund pays each unaffiliated director an annual retainer of $10,000, the board of director chair an additional retainer of $3,500, the audit committee chair an additional annual retainer of $3,000, the nominating committee chair an additional retainer of $1,500, a fee of $2,000 for each board or committee meeting attended, and all expenses the directors incur in attending meetings. Total fees paid to directors for the year ended August 31, 2006 were $111,873. Transfer agent fees are paid to State Street Bank & Trust Co.
NOTE C—CAPITAL STOCK
At August 31, 2006, there were 2,500,000,000 shares of $.01 par value Common Stock authorized, and capital paid in aggregated $1,382,127,040. Each transaction in Fund shares was at the net asset value of $1.00 per share. The dollar amount represented is the same as the shares shown below for such transactions.
| | | For the year ended August 31, | |
| | | 2006 | | | 2005 | |
| Shares sold | | 5,713,185,689 | | | 5,543,740,554 | |
| Shares issued to | | | | | | |
| shareholders | | | | | | |
| in reinvestment | | | | | | |
| of dividends | | 48,617,357 | | | 22,176,963 | |
| Less shares | | | | | | |
| repurchased | | (5,744,206,643 | ) | | (5,614,969,078 | ) |
| Net increase | | | | | | |
| (decrease) in | | | | | | |
| capital | | | | | | |
| shares | | 17,596,403 | | | (49,051,561 | ) |
NOTE D—INDEMNIFICATIONS
Under the Fund’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the performance of their duties on behalf of the Fund. In addition, in the normal course of business, the Fund enters into contracts that provide general indemnifications to other parties. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. However, the Fund has not had prior claims or losses pursuant to these contracts and believes the risk of loss to be remote.
11
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors of
Hilliard-Lyons Government Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of the Hilliard-Lyons Government Fund, Inc. (the “Fund”), including the schedule of investments, as of August 31, 2006, 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 five years in the period then ended.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 the standards of the Public Company Accounting Oversight Board (United States). 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. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of August 31, 2006, by correspondence with the custodian. 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 Fund as of August 31, 2006, 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 five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
Philadelphia, Pennsylvania
September 22, 2006
12
HILLIARD-LYONS GOVERNMENT FUND, INC.
MANAGEMENT INFORMATION CHART
(UNAUDITED)
| | | | | | | | | Number of | | Other |
| | | | | | | | | Portfolios in Fund | | Directorships |
| Name and Address | | Position Held | | Term of Office and | | Principal Occupation(s) | | Complex overseen | | Held by |
| Independent Directors | | with the Fund | | Length of Time Served | | During Past Five Years | | by Director | | Director |
| Lindy B. Street | | Director and | | Indefinite; since | | Retired, former Senior Vice | 1 | | None |
| 406 Wynfield Close Court | | Chair of the | | November 2, 1999 | | President of Marketing & Public | | | |
| Louisville, KY 40206 | | Board | | | | Affairs of Columbia/HCA | | | | |
| Age: 60 | | | | | | Healthcare Corporation | | | | |
| |
| J. Robert Shine | | Director | | Indefinite; since | | Chairman and Certified | | 1 | | None |
| 222 East Market Street | | | | October 17,1989 | | Public Accountant, | | | | |
| New Albany, IN 47150 | | | | | | Monroe Shine & Co., Inc. | | | | |
| Age: 82 | | | | | | | | | | |
| |
| William A. Blodgett, Jr. | | Director | | Indefinite; since | | Senior Vice President | | 1 | | None |
| 850 Dixie Highway | | | | December 2, 2005 | | and Deputy General Counsel, | | | |
| Louisville, KY 40210 | | | | | | Brown-Forman Corp. | | | | |
| Age: 59 | | | | | | | | | | |
| |
| Gregory A. Wells | | Director | | Indefinite; since | | Executive Vice-President and | 1 | | None |
| 10172 Linn Station Road | | | | December 2, 2005 | | Chief Financial Officer, | | | | |
| Louisville, KY 40223 | | | | | | NTS Realty Capital, Inc. and | | | |
| Age: 47 | | | | | | Managing General Partner, | | | |
| | | | | | | NTS Realty Holdings LP | | | | |
Additional information about the Fund’s directors is contained in the Statement of Additional Information (“SAI”) constituting Part B of the Fund’s Registration Statement on Form N-1A filed with the SEC. The most recent post-effective amendment to that Registration Statement is available electronically at the SEC’s Internet web site, www.sec.gov and at the Adviser’s web site, www.hilliard.com. The Fund will also furnish a copy of the SAI portion of the Registration Statement, without charge, to any shareholder who requests by calling the Adviser at (888) 878-7845 (toll-free).
| Officers of the Fund | | | | | | | | | | |
| Joseph C. Curry, Jr. | | President | | Annually | | Senior Vice President, | | N/A | | N/A |
| 500 West Jefferson Street | | | | | | J.J.B. Hilliard, W.L. Lyons, Inc. | | | | |
| Louisville, KY 40202 | | | | | | | | | | |
| Age: 61 | | | | | | | | | | |
| |
| Dianna P. Wengler | | Vice President | | Annually | | Vice President, | | N/A | | N/A |
| 500 West Jefferson Street | | and Treasurer | | | | J.J.B. Hilliard, W.L. Lyons, Inc. | | | | |
| Louisville, KY 40202 | | | | | | | | | | |
| Age: 46 | | | | | | | | | | |
| |
| Edward J. Veilleux | | Vice President | | Annually | | President, EJV Financial | | N/A | | N/A |
| 5 Brook Farm Court | | and Chief | | | | Services, LLC | | | | |
| Hunt Valley, MD 21030 | | Compliance | | | | | | | | |
| Age: 63 | | Officer | | | | | | | | |
| |
| Stephanie J. Ferree | | Secretary | | Annually | | Mutual Fund Administrator, | | N/A | | N/A |
| 500 West Jefferson Street | | | | | | J.J.B. Hilliard, W.L. Lyons, Inc. | | | | |
| Louisville, KY 40202 | | | | | | | | | | |
| Age: 28 | | | | | | | | | | |
13
RENEWAL OF INVESTMENT ADVISORY AGREEMENT
(UNAUDITED)
The Board of Directors (the “Board”) of the Hilliard-Lyons Government Fund, Inc. (the “Fund”) considered the renewal of the Fund’s investment advisory agreement (the “Agreement”) with J.J.B. Hilliard, W.L. Lyons, Inc. (the “Adviser”) at meetings of the Board held on June 6, 2006 and October 12, 2006. The Board consists of four members, all of whom are “non-interested” directors as defined in the Investment Company Act of 1940 (the “Independent Directors”). Prior to each meeting, the Board requested and received certain informational materials. The Board also considered the renewal of the Fund’s omnibus account and distribution agreements with the Adviser at these meetings.
In addition to the materials provided to the Board prior to the meetings, the Adviser presented additional information at the meetings themselves. The Adviser also responded to questions from the members of the Board. Among other things, the Board received information concerning: (1) the nature, extent and quality of the services provided by the Adviser; (2) the Fund’s investment performance; (3) the cost of the services provided and the profits realized by the Adviser and its affiliates from their relationship with the Fund; (4) the extent to which economies of scale have been or will be realized as the Fund grows; and (5) the extent to which fee levels reflect the economies of scale, if any, for the benefit of the Fund’s shareholders. The Board’s independent counsel, Godfrey & Kahn, S.C., assisted the Board in its review of the information that the Adviser provided and provided a memorandum to the Board describing its duties and responsibilities in connection with the renewal of the Agreement as well as a memorandum summarizing the terms of the Agreement.The Board also met in executive session with its independent counsel to consider and discuss the information that the Adviser provided.
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED TO THE FUND
The Board evaluated the nature, extent and quality of the services that the Adviser provides on the basis of the functions that the Adviser performs, and the quality and stability of the staff committed to those functions, the Adviser’s Form ADV, the Adviser’s favorable compliance record and financial condition and its background and history in providing services to the Fund.The Board considered the Adviser’s disciplined investment decision-making process used for the Fund.The Board also considered other services that the Adviser rendered to the Fund in its capacity as its investment adviser, such as providing some of its key personnel available to serve as officers of the Fund, ensuring adherence to the Fund’s investment policies and restrictions, providing support services to the Board and overseeing the Fund’s other service providers. The Board further noted that the Adviser, in its capacity as a registered broker-dealer also serves as distributor and principal underwriter of shares of the Fund and spends time and effort marketing the Fund. The Board also considered the fact that the Adviser has not experienced any significant legal, compliance or regulatory difficulties. Based on the information provided and the Board’s prior experience with the Adviser, the Board concluded that the nature and extent of the services that the Adviser provides under the Agreement, as well as the quality of those services, is satisfactory.
COSTS OF SERVICES PROVIDED AND PROFITS REALIZED BY THE ADVISER
The Board examined the fee and expense information for the Fund, including a comparison of such information to other similarly situated mutual funds as determined by Lipper. The Board also examined the total expense ratio of the Fund relative to all other mutual funds in its Lipper category based on information available as of July 31, 2006.
The Board reviewed financial information provided by the Adviser, including information concerning its costs in providing services to the Fund and its profitability. The Board determined the advisory fees paid by the Fund were competitive with, and at or near the median of, those of other funds in its peer group for the twelve month period ended July 31, 2006. Although the Board noted that the Fund’s advisory fee remains at or near the median of funds in its peer group, its current expense ratio is above the median due, in part, to the Fund’s payment of shareholder servicing and administration fees to the Adviser at a rate greater than the rates paid by other funds in its peer group. Nevertheless, the Board determined that the Fund’s expense ratio, and the aggregate of fees paid to the Adviser for all services that it provides to the Fund, fall within a reasonable range. It also determined that the Adviser devoted sufficient financial and other resources to fulfill its responsibilities to the Fund and that the profits realized by the Adviser were reasonable given the costs of providing services to the Fund.
14
RENEWAL OF INVESTMENT ADVISORY AGREEMENT—Continued
(UNAUDITED)
The Board noted that the Adviser does not manage other funds or accounts with investment objectives comparable to that of the Fund. Consequently, there was no basis to compare the Fund’s performance with other funds or accounts that the Adviser manages.
Based on the information provided, the Board concluded that the amount of advisory fees that the Fund pays to the Adviser is reasonable in light of the nature and quality of the services provided.
INVESTMENT PERFORMANCE OF THE FUND
The Board reviewed information prepared by Lipper as of July 31, 2006 concerning the Fund’s investment performance, both absolutely as well as compared to other funds in its peer group. The Board determined that the Fund’s performance compared favorably with other funds in its peer group over an extended period of time, which reflected favorably on the high quality of the Adviser’s staff assigned to the Fund. Specifically, when compared to other government money market funds, the Fund’s yield was at or above the median of other funds. The Board determined that the Adviser had managed the Fund capably in a rising interest rate environment. The Board also considered the Adviser’s quarterly portfolio reviews explaining the Fund’s performance, the Adviser’s consistent and disciplined investment decision process and the investment strategies it employs for the Fund. After considering all of the information, the board concluded that, although past performance is not a guarantee of future results, the Fund and its shareholders were likely to benefit from the Adviser’s continued management.
ECONOMIES OF SCALE AND FEE LEVELS REFLECTING THOSE ECONOMIES
In considering the overall fairness of the Agreement, the Board assessed the degree to which economies of scale will be realized as the Fund grows as well as the extent to which fee levels reflect those economies of scale for the benefit of the Fund’s shareholders. The materials that the Adviser provided to the Board reflected economies that have been achieved as the Fund has grown in that certain costs of providing services to the Fund either remain stable or increase at a lesser rate than the rate of growth of the Fund’s assets. The Board reviewed the pattern of growth in the Fund’s assets and the Fund’s expense ratio as well as the amount of fees voluntarily waived by the Adviser during recent periods when the market yields on the Fund’s portfolio was very low. The Board also noted that the Fund, and its shareholders, have shared in the economies of scale realized as the Fund has grown through reductions in the overall level of advisory fees through the achievement of breakpoints in the Adviser’s fee schedule. The Board determined that the fee schedule, including breakpoints, in the Agreement is reasonable and appropriate and that further breakpoints in the fee schedule are unnecessary based on the current level of the Fund’s assets.
OTHER BENEFITS TO THE ADVISER
Given the nature of the Fund, the Adviser advised the Board that it derives minimal, if any, indirect benefits from its relationship with the Fund. Therefore, the fees that the Adviser earns as the Fund’s investment adviser are the principal benefit accruing to the Adviser as a result of its relationship with the Fund. The Board believes that the Fund generally benefits from its association with the Adviser and the use of the “Hilliard-Lyons” name. Based on all of the information presented to and considered by the Board and the conclusions that it reached, the Board approved the renewal of the Fund’s Agreement on the basis that its terms and conditions are fair to, and in the best interests of, the Fund and its shareholders.
15
HILLIARD-LYONS GOVERNMENT FUND, INC.
500 West Jefferson Street
Louisville, Kentucky 40202
(502) 588-8400
Investment Adviser, Administrator
and Distributor
J.J.B. Hilliard, W.L. Lyons, Inc.
500 West Jefferson Street
Louisville, Kentucky 40202
(502) 588-8400
Custodian and Transfer Agent
State Street Bank and Trust Company
John Adams Building – 2N
1766 Heritage Drive
North Quincy, Massachusetts 02171
Legal Counsel
Godfrey & Kahn, S.C.
780 North Water Street
Milwaukee, Wisconsin 53202
Independent
Registered Public Accounting Firm
Deloitte & Touche LLP
1700 Market Street
Philadelphia, Pennsylvania 19103
DIRECTORS AND OFFICERS
BOARD OF DIRECTORS
Lindy B. Street – Chair
William A. Blodgett, Jr.
J. Robert Shine
Gregory A. Wells
OFFICERS
Joseph C. Curry, Jr. – President
Dianna P. Wengler – Vice President
and Treasurer
Edward J. Veilleux – Vice President
and Chief Compliance Officer
Stephanie J. Ferree – Secretary | Hilliard-Lyons
Government Fund, Inc.
Annual Report
August 31, 2006  |
| ITEM 2. | CODE OF ETHICS |
| | |
| | The registrant has adopted a code of ethics that applies to its principal executive officer and principal financial officer. During the period covered by this report, there were no amendments to the provisions of the code, nor were there any implicit or explicit waivers to the provisions of the code. |
| | |
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT. |
| | |
| | The registrant’s Board of Directors has determined that there is a financial expert serving on the audit committee. Mr. J. Robert Shine is the audit committee financial expert and is considered to be independent in accordance with Commission rules. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an “expert” for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as amended, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Directors in the absence of such designation or identification. |
| | |
ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) Audit fees for fiscal years ended August 31, 2006 and August 31, 2005 were $21,525.00 and $20,500.00, respectively. (b) Audit-related fees for fiscal years ended August 31, 2006 and August 31, 2005 were $2,000.00 and $2,825.00, respectively. All fees are for out-of-pocket expenses. (c) Tax fees for fiscal years ended August 31, 2006 and August 31, 2005 were $5,940.00 and $5,650.00, respectively. All fees are for preparation of the U.S. income tax returns Form 1120-RIC and U.S. excise tax Form 8613. (d) There were no other fees for the fiscal year ended August 31, 2006 and August 31, 2005. “Audit fees” are fees billed for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements that are normally provided by the principal accountant in connection with statutory and regulatory filings or engagements. “Audit-related fees” are fees billed for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements. “Tax fees” are fees billed for professional services rendered by the principal accountant for preparation of tax forms, tax compliance, tax advice and tax planning. The audit committee has adopted pre-approval policies and procedures that require the audit committee to pre-approve all audit and non-audit services of the registrant, including services provided to any entity affiliated with the registrant with respect to any engagement that directly relates to the operations and financial reporting of the registrant. In accordance with its pre-approval policies and procedures, the audit committee pre-approved all audit, audit-related and tax services provided by the principal accountant during fiscal years 2006 and 2005. During the last two fiscal years, there were no non-audit services rendered by the principal accountant to registrant’s investment adviser or any entity controlling, controlled by or under common control with the investment adviser that provides ongoing services to the registrant. |
| |
ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable to open-end investment companies. |
| |
ITEM 6. | SCHEDULE OF INVESTMENTS. |
| | Included as part of the report to shareholders filed under item 1 of this form. |
| | |
ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES
FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
| | |
| | Not applicable to open-end investment companies. |
| | |
ITEM 8. | PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. |
| | |
| | Not applicable to open-end investment companies. |
| | |
ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS. |
| | |
| | Not applicable to open-end investment companies. |
| | |
ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. Not applicable. |
| | |
ITEM 11. | CONTROLS AND PROCEDURES. |
| | (a) | The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective, based on an evaluation of those controls and procedures made as of a date within 90 days of the filing date of this report as required by rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under Exchange Act. |
| |
| | (b) | There have been no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s second fiscal quarter of the period that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| | | |
| ITEM 12. | | EXHIBITS. |
| | | |
| | (a)(1) | Code of Ethics Incorporated by reference to the registrant’s Form N-CSR filed October 29, 2004 |
| | | |
| | (a)(2) | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. Filed herewith. |
| | | |
| | (a)(3) | Not applicable. |
| | | |
| | (b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. Furnished 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) | HILLIARD-LYONS GOVERNMENT FUND, INC. |
| | |
| By (Signature and Title) | /s/ Joseph C. Curry, Jr. |
| |
| |
| | Joseph C. Curry, Jr.
President |
| | |
| Date: October 31, 2006 |
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/ Dianna P. Wengler |
| |
| |
| | Dianna P. Wengler
Vice President and Treasurer |
| | |
| Date: October 31, 2006 |
| | |
| By (Signature and Title) | /s/ Joseph C. Curry, Jr. |
| |
| |
| | Joseph C. Curry, Jr.
President |
| | |
| Date: October 31, 2006 |
