Revere Paul Variable Annuity Contract Accmulation Fund N-CSR Certified annual shareholder report (management investment company)

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: 811-01356

THE PAUL REVERE VARIABLE ANNUITY

CONTRACT ACCUMULATION FUND

(Exact name of Registrant as specified in charter)

18 Chestnut Street

Worcester, MA 10608

(Address of principal executive offices)

CT Corporation System

101 Federal Street

Boston, MA 02110

(Name and address of agent for service)

Registrant’s telephone number, including area code: (508) 792-6358

Date of fiscal year end: December 31

Date of reporting period: December 31, 2003

Item 1. Reports to Stockholders.

Board of Managers

The Accumulation Fund

Donald E. Boggs, Chairman

Gordon T. Miller, Vice Chairman

David G. Fussell

Joan Sadowsky

H. C. Goodwin

THE PAUL REVERE VARIABLE ANNUITY

CONTRACT ACCUMULATION FUND

A Separate Account of The Paul Revere

Variable Annuity Insurance Company

This report and the financial statements attached are submitted for the general information of contract owners and are not authorized for distribution to prospective investors unless preceded or accompanied by an effective prospectus. Nothing herein contained is to be considered an offer of sale of The Paul Revere Variable Annuity Insurance Company contracts. Such offering is made only by prospectus, which includes details as to offering price and other material information.

Annual Report

December 31, 2003

TO OUR CONTRACT OWNERS AND PARTICIPANTS:

THE PAUL REVERE VARIABLE ANNUITY

CONTRACT ACCUMULATION FUND

VARIABLE ANNUITY CONTRACTS

This yearend report of the Fund contains the financial statements and portfolio information of the Fund for the period ended December 31, 2003.

After three years of declines in excess of 20%, the Russell 1000 Growth Index turned sharply positive in 2003. Following a negative first quarter, large cap growth stocks recorded three consecutive quarterly gains as fears concerning the war in Iraq, SARS and deflation began to abate. Long awaited evidence that the fiscal and monetary stimuli were have their intended effect helped lift consumer sentiment, corporate profits and capital markets.

The Fund’s portfolio underperformed its benchmark due primarily to underweight positions in certain technology stocks and overweights in certain retail holdings and a number of advertising sensitive media stocks. The portfolio’s performance was benefited by its holdings in biotechnology, and underweight position in pharmaceuticals and financial services companies focused on capital markets.

We believe in 2004 companies have benefited from years of cost cutting and restructuring. Operating leverage offers the potential for accelerating earnings growth as capital spending increases. Stock selection will be important as valuations have converged and the rally in the stock market has broadened to include many sectors of the market.

Thank you for your continued support.

Sincerely,

/s/ Donald E. Boggs

    Donald E. Boggs

    Chairman, Board of Managers

    The Paul Revere Variable Annuity

    Contract Accumulation Fund

The Paul Revere Variable Annuity Contract Accumulation Fund

Audited Financial Statements

December 31, 2003

Report of Independent Auditors	1
Statements of Assets and Liabilities	2
Statements of Changes in Net Assets	3
Statements of Operations	4
Schedule of Investments	5
Supplementary Information	8
Notes to Financial Statements	10

REPORT OF INDEPENDENT AUDITORS

The Owners of Variable Annuity Contracts of The Paul Revere

Variable Annuity Insurance Company and the Board of

Managers of The Paul Revere Variable Annuity Contract

Accumulation Fund of The Paul Revere Variable Annuity

Insurance Company

We have audited the accompanying statements of assets and liabilities of The Paul Revere Variable Annuity Contract Accumulation Fund (comprising the Qualified and Non-Qualified Portfolios) as of December 31, 2003 and 2002, including the statement of investments as of December 31, 2003, and the related statements of operations and changes in net assets for each of the three years in the period ended December 31, 2003, and the supplementary information for each of the ten years in the period then ended. These financial statements and supplementary information are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and supplementary information based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and supplementary information 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, 2003 and 2002, by correspondence with the custodian and brokers. 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 supplementary information referred to above present fairly, in all material respects, the financial position of The Paul Revere Variable Annuity Contract Accumulation Fund at December 31, 2003 and 2002, the results of its operations and the changes in its net assets for each of the three years in the period ended December 31, 2003, and the supplementary information for each of the ten years in the period then ended, in conformity with accounting principles generally accepted in the United States.

ERNST & YOUNG LLP

Chattanooga, Tennessee

January 31, 2004

1

Statements of Assets and Liabilities

	December 31,
	2003 Series Q (Qualified)		2002 Series Q (Qualified)		2003 Series N (Non-Qualified)		2002 Series N (Non-Qualified)
ASSETS
Investments in securities at market value (Cost: Series Q 2003-$8,741,721; 2002-$9,079,303) (Cost: Series N 2003-$1,604,679; 2002-$1,653,128) (see Schedule of Investments)	$	9,521,516	$	8,027,687	$	1,732,118	$	1,449,322
Cash		286		943		6,160		22,928
Dividends and interest receivable		7,720		9,165		1,412		1,662
Receivable for investments sold		140,928		610,063		26,959		48,622
Receivable from The Paul Revere Variable Annuity Insurance Company		—		—		9,168		—
Total assets		9,670,450		8,647,858		1,775,817		1,522,534
LIABILITIES
Payable for investments purchased		128,965		599,769		33,804		47,718
Payable to The Paul Revere Variable Annuity Insurance Company		53,242		65,389		6,867		11,260
Total liabilities		182,207		665,158		40,671		58,978
TOTAL NET ASSETS	$	9,488,243	$	7,982,700	$	1,735,146	$	1,463,556
CONTRACT OWNERS’ EQUITY
Deferred contracts terminable by owner	$	7,284,377	$	5,974,116	$	891,819	$	721,796
Currently payable contracts		2,203,866		2,008,584		843,327		741,760
Total net assets	$	9,488,243	$	7,982,700	$	1,735,146	$	1,463,556
ACCUMULATION UNITS OUTSTANDING		825,922		858,770		155,878		162,573
NET ASSET VALUE PER ACCUMULATION UNIT	$	11.488	$	9.295	$	11.131	$	9.002

See accompanying notes to financial statements.

2

Statements of Changes in Net Assets

	For the years ended December 31,
	2003 Series Q (Qualified)			2002 Series Q (Qualified)			2001 Series Q (Qualified)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(66,003	)	$	(71,823	)	$	(143,177	)
Net realized gain (loss) on investments		69,435			(3,392,842	)		(2,319,462	)
Net increase (decrease) in unrealized appreciation of investments		1,831,411			(579,955	)		(2,654,017	)
Increase (decrease) in net assets from operations		1,834,843			(4,044,620	)		(5,116,656	)
Contract receipts:
Gross purchase payments received		6,459			3,217			14,849
Deductions from purchase payments		201			48			108
Net purchase payments received		6,258			3,169			14,741
Payments to contract owners:
Annuity payments to contract owners		250,445			267,259			433,639
Terminations and withdrawals to contract owners		85,113			524,495			3,683,993
Total payments to contract owners		335,558			791,754			4,117,632
Net contract payments to contract owners		(329,300	)		(788,585	)		(4,102,891	)
Total increase (decrease) in net assets		1,505,543			(4,833,205	)		(9,219,547	)
NET ASSETS
Beginning of year		7,982,700			12,815,905			22,035,452
End of year	$	9,488,243		$	7,982,700		$	12,815,905
	For the years ended December 31,
	2003 Series N (Non-qualified)			2002 Series N (Non-qualified)			2001 Series N (Non-qualified)
INCREASE (DECREASE) IN NET ASSETS
Operations:
Net investment loss	$	(17,684	)	$	(19,214	)	$	(37,748	)
Net realized gain (loss) on investments		22,977			(683,478	)		(564,353	)
Net increase (decrease) in unrealized appreciation of investments		331,245			(112,246	)		(646,717	)
Increase (decrease) in net assets from operations		336,538			(814,938	)		(1,248,818	)
Contract receipts:
Gross purchase payments received		—			—			215
Deductions from purchase payments		—			—			13
Net purchase payments received		—			—			202
Payments to contract owners:
Annuity payments to contract owners		64,419			146,533			230,266
Terminations and withdrawals to contract owners		529			67,138			1,031,647
Total payments to contract owners		64,948			213,671			1,261,913
Net contract payments to contract owners		(64,948	)		(213,671	)		(1,261,711	)
Total increase (decrease) in net assets		271,590			(1,028,609	)		(2,510,529	)
NET ASSETS
Beginning of year		1,463,556			2,492,165			5,002,694
End of year	$	1,735,146		$	1,463,556		$	2,492,165

See accompanying notes to financial statements.

3

Statements of Operations

	For the years ended December 31,
	2003 Series Q (Qualified)			2002 Series Q (Qualified)			2001 Series Q (Qualified)
INVESTMENT LOSS
Income:
Dividends	$	73,979		$	69,916		$	87,612
Interest		3,572			18,092			15,297
Total income		77,551			88,008			102,909
Expenses:
Mortality and expense risk fees		87,303			98,154			155,791
Investment management and advisory service fees		43,651			49,077			77,895
Professional services		12,600			12,600			12,400
Total expenses		143,554			159,831			246,086
Net investment loss		(66,003	)		(71,823	)		(143,177	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments sold		69,435			(3,392,842	)		(2,319,462	)
Net increase (decrease) in unrealized appreciation of investments		1,831,411			(579,955	)		(2,654,017	)
Net realized and unrealized gain (loss) on investments		1,900,846			(3,972,797	)		(4,973,479	)
Increase (decrease) in net assets from operations	$	1,834,843		$	(4,044,620	)	$	(5,116,656	)
	For the years ended December 31,
	2003 Series N (Non-Qualified)			2002 Series N (Non-Qualified)			2001 Series N (Non-Qualified)
INVESTMENT LOSS
Income:
Dividends	$	13,731		$	13,265		$	19,081
Interest		75			3,126			2,028
Total income		13,806			16,391			21,109
Expenses:
Mortality and expense risk fees		15,953			18,697			34,278
Investment management and advisory service fees		7,977			9,348			17,139
Professional services		7,560			7,560			7,440
Total expenses		31,490			35,605			58,857
Net investment loss		(17,684	)		(19,214	)		(37,748	)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments sold		22,977			(683,478	)		(564,353	)
Net increase (decrease) in unrealized appreciation of investments		331,245			(112,246	)		(646,717	)
Net realized and unrealized gain (loss) on investments		354,222			(795,724	)		(1,211,070	)
Increase (decrease) in net assets from operations	$	336,538		$	(814,938	)	$	(1,248,818	)

See accompanying notes to financial statements.

4

Schedule of Investments

December 31, 2003

		Series Q (Qualified)							Series N (Non-Qualified)
Securities of Unaffliated Companies	Number of Shares	Cost		Market Value		% of Net Assets		Number of Shares	Cost		Market Value		% of Net Assets
Common Stocks
Airlines
Southwest Airlines Company	5,300	$	84,128	$	85,542	0.90	%	1,000	$	15,883	$	16,140	0.93	%
Beverages
PepsiCo, Inc.	2,690		114,786		125,408	1.32	%	450		19,415		20,979	1.21	%
Broadcasting & Media
Clear Channel Communications, Inc.	3,560		129,266		166,715			700		26,330		32,781
Comcast Corporation Class A *	4,700		145,942		154,489			900		28,186		29,583
Cox Communications, Inc. *	1,500		46,824		51,675			300		9,369		10,335
EchoStar Communications Corporation Class A *	3,100		105,415		105,400			600		20,298		20,400
New York Times Company	1,280		58,392		61,171			190		8,694		9,080
Time Warner, Inc. *	8,100		124,763		145,719			1,440		21,988		25,906
Viacom, Inc. Class B	4,510		193,340		200,154			796		34,173		35,326
Walt Disney Company	900		19,761		20,997			200		4,391		4,666
Westwood One, Inc. *	2,800		93,586		95,788			500		16,800		17,105
			917,289		1,002,108	10.56	%			170,229		185,182	10.67	%
Business Services
Lamar Advertising Company *	1,660		54,300		61,951	0.65	%	280		9,212		10,450	0.61	%
Computer Systems & Services
BEA Systems, Inc. *	3,400		46,133		41,820			600		8,150		7,380
BISYS Group, Inc. *	3,520		63,929		52,378			680		11,712		10,118
Cisco Systems, Inc. *	16,140		449,193		392,041			3,030		91,119		73,599
Dell Computer Corporation *	5,830		171,799		197,987			1,080		32,919		36,677
DST Systems, Inc. *	900		31,066		37,584			200		6,891		8,352
International Business Machines Corporation	2,180		177,812		202,042			390		31,550		36,145
Microsoft Corporation	15,680		414,465		431,827			2,800		74,274		77,112
Mercury Interactive Corporation *	1,900		82,686		92,416			340		14,609		16,538
Network Associates, Inc. *	2,700		40,163		40,608			500		7,470		7,520
Oracle Corporation *	8,140		90,903		107,448			1,450		16,567		19,140
Veritas Software Corporation *	4,565		137,461		169,635			820		25,526		30,471
			1,705,610		1,765,786	18.61	%			320,787		323,052	18.62	%
Consumer Goods & Services
Avon Products, Inc.	1,730		84,888		116,758			270		13,496		18,222
Ebay, Inc.	1,400		74,362		90,426			200		10,793		12,918
InterActiveCorp *	4,100		117,852		139,113			700		19,271		23,751
NIKE, Inc. Class B	1,100		74,089		75,306			200		13,503		13,692
			351,191		421,603	4.45	%			57,063		68,583	3.95	%
Education
Apollo Group, Inc. *	1,200		76,229		81,600			200		12,537		13,600
Career Education Corporation *	1,000		39,770		40,070			200		8,371		8,014
			115,999		121,670	1.28	%			20,908		21,614	1.25	%

See accompanying notes to financial statements.

5

Schedule of Investments (continued)

December 31, 2003

		Series Q (Qualified)					Series N (Non-Qualified)
	Number Of Shares	Cost	Market Value	% of Net Assets		Number Of Shares	Cost	Market Value	% of Net Assets
Financial Institutions
American Express Company	3,500	154,557	168,805			600	26,325	28,938
Bank of New York Company, Inc.	2,200	70,109	72,864			400	12,720	13,248
Citigroup, Inc.	4,224	162,400	205,033			796	31,333	38,638
Fannie Mae	1,300	94,630	97,578			200	14,488	15,012
Goldman Sachs Group, Inc.	1,010	75,411	99,717			180	13,717	17,771
MBNA Corporation	5,500	128,998	136,675			1,000	23,522	24,850
Mellon Financial Corporation	2,290	70,054	73,532			450	13,801	14,450
Merrill Lynch & Co., Inc.	1,780	73,166	104,397			370	15,898	21,700
Northern Trust Corporation	1,300	56,435	60,346			200	8,752	9,284
SLM Corporation	1,340	52,578	50,491			270	10,111	10,174
		938,338	1,069,438	11.27	%		170,667	194,065	11.18	%
Food
Outback Steakhouse, Inc.	900	33,866	39,789	0.42	%	200	7,428	8,842	0.51	%
Insurance
ACE Ltd. ADR	1,590	51,136	65,858			260	8,072	10,769
American International Group, Inc.	3,300	201,612	218,724			600	36,623	39,768
		252,748	284,582	3.00	%		44,695	50,537	2.91	%
Leisure & Tourism
Starwood Hotels & Resorts Worldwide, Inc.	1,750	51,068	62,948	0.66	%	320	10,334	11,510	0.66	%
Manufacturing
3M Company	1,160	64,242	98,635			220	13,610	18,707
Danaher Corporation	700	63,218	64,225			200	18,115	18,350
Emerson Electric Company	1,000	61,251	64,750			200	12,288	12,950
General Electric Company	8,250	246,472	255,585			1,460	44,242	45,231
Illinois Tool Works	900	69,697	75,519			200	15,683	16,782
Thermo Electron Corporation *	2,400	55,366	60,480			400	9,228	10,080
		560,246	619,194	6.53	%		113,166	122,100	7.04	%
Medical & Health Products
Abbott Laboratories	2,400	101,007	111,840			400	17,017	18,640
Amgen, Inc. *	2,280	111,329	140,904			450	22,244	27,810
Caremark Rx, Inc. *	2,200	46,300	55,726			400	8,249	10,132
Gilead Sciences, Inc. *	2,700	149,971	156,978			500	28,079	29,070
Genentech, Inc. *	300	10,549	28,071			70	2,461	6,550
Genzyme Corporation *	2,600	123,354	128,284			500	23,999	24,670
Guidant Corporation	1,100	51,573	66,220			200	9,392	12,040
Johnson & Johnson	4,460	239,227	230,404			850	45,362	43,911
Medtronic, Inc.	2,150	99,440	104,511			380	18,334	18,472
Pfizer, Inc.	9,060	297,109	320,090			1,650	54,428	58,295
Wyeth	2,800	124,713	118,860			500	22,347	21,225
		1,354,572	1,461,888	15.41	%		251,912	270,815	15.61	%

See accompanying notes to financial statements.

6

Schedule of Investments (continued)

December 31, 2003

		Series Q (Qualified)									Series N (Non-Qualified)
	Number Of Shares	Cost		Market Value			% of Net Assets			Number Of Shares	Cost		Market Value		% of Net Assets
Semiconductors
Analog Devices, Inc. *	3,570		127,205		162,971					620		22,668		28,303
Intel Corporation	4,780		119,941		153,916					920		22,981		29,624
Linear Technology Corporation	1,810		57,927		76,147					350		11,296		14,724
Maxim Integrated Products, Inc.	1,440		66,505		71,712				��	270		11,764		13,446
Microchip Technology, Inc.	2,500		60,459		83,400					500		11,944		16,680
Novellus Systems, Inc. *	1,750		64,792		73,588					320		11,399		13,456
Texas Instruments, Inc.	4,030		103,836		118,401					790		20,946		23,210
Xilinx, Inc. *	3,300		94,359		127,842					600		17,392		23,244
			695,024		867,977		9.15	%				130,390		162,687	9.38	%
Stores
CVS Corporation	1,000		31,948		36,120					200		6,431		7,224
Home Depot, Inc.	1,770		57,543		62,817					340		10,989		12,067
Kohl’s Corporation *	3,970		218,348		178,412					760		41,034		34,154
Staples, Inc. *	3,000		62,391		81,900					500		10,188		13,650
Target Corporation	5,030		193,116		193,152					900		34,868		34,560
TJX Companies, Inc.	4,700		93,611		103,635					900		17,936		19,845
Walgreen Company	1,700		56,315		61,846					300		9,960		10,914
Wal-Mart Stores, Inc.	3,730		200,200		197,877					700		37,647		37,135
Williams-Sonoma, Inc. *	900		24,482		31,293					200		5,416		6,954
			937,954		947,052		9.98	%				174,469		176,503	10.17	%
Telecommunications
Adtran, Inc.	2,200		71,922		68,200					400		13,062		12,400
AT&T Wireless Services, Inc. *	10,800		81,329		86,292					2,000		15,061		15,980
Corning, Inc. *	4,400		46,238		45,892					800		8,406		8,344
Qualcomm, Inc.	1,000		47,816		53,930					200		9,542		10,786
Sprint Corp. (PCS Group) *	10,000		54,954		56,200					1,800		9,840		10,116
			302,259		310,514		3.27	%				55,911		57,626	3.32	%
Transportation
FedEx Corporation	1,500		113,407		101,250					300		22,871		20,250
United Parcel Service, Inc.	950		56,940		70,822					150		9,339		11,183
			170,347		172,072		1.82	%				32,210		31,433	1.81	%
Total Common Stocks			8,639,725		9,419,520		99.28	%				1,604,679		1,732,118	99.83	%
Short-Term Investment
Federal Home Loan Banks 0.75% due 01/02/04	102,000		101,996		101,996		1.07	%
Total Investments		$	8,741,721		9,521,516		100.35	%			$	1,604,679		1,732,118	99.83	%
Other Assets Less Liabilities					(33,273	)	(0.35	)%						3,028	0.17	%
Total Net Assets				$	9,488,243		100.00	%					$	1,735,146	100.00	%

* Non – income producing security.

See accompanying notes to financial statements.

7

Supplementary Information

Selected Per Unit Data and Ratios

	Years Ended December 31,
	2003			2002			2001			2000			1999
PER UNIT DATA (a)
Series Q (Qualified)
Investment income	$	0.093		$	0.099		$	0.094		$	0.117		$	0.094
Expenses		0.172			0.180			0.226			0.374			0.277
Net investment loss		(0.079	)		(0.081	)		(0.132	)		(0.257	)		(0.183	)
Net realized and unrealized gains (losses) on investments		2.272			(4.481	)		(4.577	)		(1.398	)		5.280
Net increase (decrease) in net asset value		2.193			(4.562	)		(4.709	)		(1.655	)		5.097
Accumulation unit net asset value:
Beginning of year		9.295			13.857			18.566			20.221			15.124
End of year	$	11.488		$	9.295		$	13.857		$	18.566		$	20.221
Series N (Non-Qualified)
Investment income	$	0.087		$	0.094		$	0.090		$	0.094		$	0.083
Expenses		0.199			0.204			0.251			0.397			0.296
Net investment loss		(0.112	)		(0.110	)		(0.161	)		(0.303	)		(0.213	)
Net realized and unrealized gains (losses) on investments		2.241			(4.563	)		(5.177	)		(1.498	)		5.894
Net increase (decrease) in net asset value		2.129			(4.673	)		(5.338	)		(1.801	)		5.681
Accumulation unit net asset value:
Beginning of year		9.002			13.675			19.013			20.814			15.133
End of year	$	11.131		$	9.002		$	13.675		$	19.013		$	20.814

(a) The per unit amounts represent the proportionate distribution of actual investment results as related to the change in unit net asset values for the year and do not include any sales loads.

	Years Ended December 31,
	2003		2002		2001		2000		1999
RATIOS
Series Q (Qualified)
Operating expenses to average accumulation fund balance	1.67	%	1.63	%	1.55	%	1.57	%	1.56	%
Net investment loss to average accumulation fund balance	(0.77	)%	(0.73	)%	(0.90	)%	(1.08	)%	(1.03	)%
Portfolio turnover rate	83	%	102	%	79	%	102	%	98	%
Accumulation units outstanding at the end of the year (in thousands)	826		859		925		1,187		1,385
Series N (Non-Qualified)
Operating expenses to average accumulation fund balance	2.00	%	1.91	%	1.70	%	1.64	%	1.62	%
Net investment loss to average accumulation fund balance	(1.12	)%	(1.03	)%	(1.09	)%	(1.25	)%	(1.16	)%
Portfolio turnover rate	83	%	104	%	78	%	101	%	103	%
Accumulation units outstanding at the end of the year (in thousands)	156		163		182		263		342

See accompanying notes to financial statements.

8

Supplementary Information

Selected Per Unit Data and Ratios (continued)

	Years Ended December 31,
	1998			1997			1996		1995		1994
PER UNIT DATA (a)
Series Q (Qualified)
Investment income	$	0.116		$	0.177		$	0.153	$	0.119	$	0.081
Expenses		0.202			0.159			0.133		0.096		0.073
Net investment income (loss)		(0.086	)		0.018			0.020		0.023		0.008
Net realized and unrealized gains (losses) on investments		3.836			2.723			1.551		1.711		(0.020	)
Net increase (decrease) in net asset value		3.750			2.741			1.571		1.734		(0.012	)
Accumulation unit net asset value:
Beginning of year		11.374			8.633			7.062		5.328		5.340
End of year	$	15.124		$	11.374		$	8.633	$	7.062	$	5.328
Series N (Non-Qualified)
Investment income	$	0.096		$	0.135		$	0.137	$	0.117	$	0.099
Expenses		0.212			0.166			0.134		0.109		0.102
Net investment income (loss)		(0.116	)		(0.031	)		0.003		0.008		(0.003	)
Net realized and unrealized gains (losses) on investments		3.891			2.660			1.459		1.769		(0.023	)
Net increase (decrease) in net asset value		3.775			2.629			1.462		1.777		(0.026	)
Accumulation unit net asset value:
Beginning of year		11.358			8.729			7.267		5.490		5.516
End of year	$	15.133		$	11.358		$	8.729	$	7.267	$	5.490

(a) The per unit amounts represent the proportionate distribution of actual investment results as related to the change in unit net asset values for the year and do not include any sales loads.

	Years Ended December 31,
	1998		1997		1996		1995		1994
RATIOS
Series Q (Qualified)
Operating expenses to average accumulation fund balance	1.57	%	1.59	%	1.57	%	1.55	%	1.55	%
Net investment income (loss) to average accumulation fund balance	(0.67	)%	0.18	%	0.24	%	0.38	%	0.17	%
Portfolio turnover rate	143	%	130	%	78	%	64	%	64	%
Accumulation units outstanding at the end of the year (in thousands)	1,715		1,887		2,093		5,491		5,597
Series N (Non-Qualified)
Operating expenses to average accumulation fund balance	1.63	%	1.67	%	1.69	%	1.71	%	1.73	%
Net investment income (loss) to average accumulation fund balance	(0.90	)%	(0.31	)%	0.04	%	0.13	%	(0.05	)%
Portfolio turnover rate	143	%	139	%	94	%	67	%	62	%
Accumulation units outstanding at the end of the year (in thousands)	475		530		566		586		604

See accompanying notes to financial statements.

9

Notes to Financial Statements

December 31, 2003

1. Organization

The Paul Revere Variable Annuity Contract Accumulation Fund (“the Fund”) is a separate account of The Paul Revere Variable Annuity Insurance Company (“Paul Revere Variable”), and is registered under the Investment Company Act of 1940 as an open-end diversified investment company. Paul Revere Variable is a wholly-owned subsidiary of The Paul Revere Life Insurance Company (“Paul Revere Life”) which in turn is wholly-owned by The Paul Revere Corporation which is wholly-owned by UnumProvident Corporation, formerly Provident Companies, Inc. (“Provident”). The Fund is the investment vehicle for Paul Revere Variable’s tax-deferred group annuity contracts.

2. Accounting policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in those statements and accompanying notes. Actual results may differ from such estimates.

Common and preferred stocks are stated at market values which are based on the last sales prices at December 31, 2003, as reported on national security exchanges or the closing bid prices for unlisted securities as reported by investment dealers. Short-term notes are stated at amortized cost which approximates market value. Unrealized investment gains and losses are included in contract owners’ equity. Realized gains and losses on investments sold are determined on the basis of specific identification of investments. Security transactions are accounted for on the day after the securities are purchased or sold. Dividend income is recorded on the ex-dividend date. Interest income is accrued on a daily basis.

The Fund does not distribute net investment income and net realized capital gains through dividends to contract owners. The allocation of net investment income and net realized capital gains occurs automatically in the daily determination of unit net asset values. They are, therefore, included in the value of the contracts in force and in payments to contract owners.

Contract owners’ equity is comprised of two components. Deferred contracts terminable by owner represents amounts attributable to contracts which have not yet annuitized. Currently payable contracts include amounts equivalent to the annuity reserves relating to contracts with current annuities. Annuity reserves are computed for currently payable contracts according to the 1900 Progressive Annuity Mortality Table. The assumed interest rate is either 3.5% or 5% according to the option elected by the annuitant at the time of conversion. Paul Revere Variable bears all the mortality risk associated with these contracts.

3. Investment advisor

Paul Revere Variable acts as investment advisor and underwriter to the Fund and provides mortality and expense guarantees to holders of variable annuity contracts. For these services, Paul Revere Variable receives mortality and expense risk fees and investment management and advisory service fees as shown on the statements of operations which, on an annual basis, will not exceed 2% of the average daily net asset value of the Fund.

Certain administrative services of the Fund are provided by The Variable Annuity Life Insurance Company (“VALIC”) under a contract dated May 15, 1998. These services include processing of unit transactions and daily unit value calculations subsequent to December 1, 1998 as well as accounting and other services.

4. Investment sub-advisor

Under an investment sub-advisory agreement with MFS Institutional Advisors, Inc. (“MFSI”), MFSI provides investment management services to Paul Revere Variable for a fee which, on an annual basis, will equal 0.35% of the average daily net assets of each series of the Fund. This fee is borne by Paul Revere Variable only and does not represent an additional charge to the Fund.

10

Notes to Financial Statements (continued)

December 31, 2003

5. Federal income taxes

The Fund’s operations are included with those of Paul Revere Variable, which is taxed as a life insurance company under the Internal Revenue Code and is included in a consolidated federal tax return filed by Paul Revere Life. In the opinion of Paul Revere Variable management, current law provides that investment income and capital gains from assets maintained in the Fund for the exclusive benefit of the contract owners are generally not subject to federal income tax. However, to the extent that Paul Revere Variable incurs federal income taxes based on the income from the Fund’s assets, the Fund will be charged. No charges for federal income taxes have been made since the inception of the Fund.

6. Security transactions

The aggregate cost of securities purchased and proceeds of securities sold, other than securities with maturities of one year or less, were as follows:

	Series Q (Qualified)				Series N (Non-Qualified)
	Purchases		Sales		Purchases		Sales
December 31, 2003	$	6,934,164	$	7,071,940	$	1,276,070	$	1,347,273
December 31, 2002	$	9,615,269	$	10,472,798	$	1,895,372	$	2,107,099

At December 31, 2003, net unrealized appreciation of investments in Series Q, amounting to $779,795, consisted of unrealized gains of $928,074 and unrealized losses of $148,279, net unrealized appreciation of investments in Series N, amounting to $127,439, consisted of unrealized gains of $161,299 and unrealized losses of $33,860.

7. Accumulation units

The change in the number of accumulation units outstanding were as follows:

	Series Q (Qualified)
	2003		2002		2001
Units outstanding at beginning of year	858,770		924,860		1,186,884
Units credited to contracts:
Net purchase payments	729		277		929
Units withdrawn from contracts:
Annuity payments	24,269		24,478		28,522
Terminations and withdrawals	9,308		41,889		234,431
Net units withdrawn	33,577		66,367		262,953
Contract units withdrawn in excess of units credited	(32,848	)	(66,090	)	(262,024	)
Units outstanding at end of year	825,922		858,770		924,860

11

Notes to Financial Statements (continued)

December 31, 2003

7. Accumulation units (continued)

	Series N (Non-Qualified)
	2003		2002		2001
Units outstanding at beginning of year	162,573		182,247		263,120
Units credited to contracts:
Net purchase payments	—		—		12
Units withdrawn from contracts:
Annuity payments	6,634		12,673		15,115
Terminations and withdrawals	61		7,001		65,770
Net units withdrawn	6,695		19,674		80,885
Contract units withdrawn in excess of units credited	(6,695	)	(19,674	)	(80,873	)
Units outstanding at end of year	155,878		162,573		182,247

12

Item 2. Code of Ethics.

(a) The Registrant has adopted a Code of Ethics that applies to its principal executive officer, principal financial officer and principal accounting officer. A copy of the Registrant’s Code of Ethics is filed herewith as Exhibit 10(a)(1).

(b) During the period covered by this report, no amendments were made to the provisions of the Code of Ethics described in 2(a) above.

(c) During the period covered by this report, no implicit or explicit waivers of the provisions of the Code of Ethics described in 2(a) above were granted.

Item 3. Audit Committee Financial Expert.

The Fund has assets of under $10 million. It has no audit committee and no audit committee financial expert. The Board of Managers of the Fund consists of independent directors that control 3/5 of the Board. The Board receives quarterly reports on the transactions in the Fund. Because of the nature of the Fund’s business there are no sensitive accounting estimates used in preparation of the financial statements of the Fund.

Item 4. Principal Accountant Fees and Services.

Not applicable.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. [Reserved]

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. [Reserved]

Item 9. Controls and Procedures.

(a) Within the 90-day period prior to the filing of this report, the Registrant’s management, including the person serving as both the Registrant’s Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of the Registrant’s disclosure controls and procedures as defined in Investment Company Act Rule 30a-3(c). Based on that evaluation, the Chief Executive Officer/Chief Financial Officer concluded that the Registrant’s disclosure controls and procedures were effective as of the date of that evaluation.

(b) No change in the Registrant’s internal control over financial reporting that materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting, occurred during the Registrant’s most recent second fiscal half-year.

Item 10. Exhibits.

The following exhibits are attached to this Form N-CSR:

(a) Code of Ethics that is the subject of the disclosure required by Item 2, attached hereto as Exhibit 10(a)(1).

(b) Certification filed pursuant to Rule 30a-2(a) under the Act (17 C.F.R. 270.30a-2(a)), attached hereto as Exhibit 31.

(c) Certification furnished pursuant to Rule 30a-2(b) under the Act (17 C.F.R. 270.30a-2(b)), attached hereto as Exhibit 32.

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.

The Paul Revere Variable Annuity

Contract Accumulation Fund

By (Signature and Title):	/s/ Donald E. Boggs
	Donald E. Boggs, Chairman, Board of Managers
	Signing in the capacity of Chief Executive Officer  and Chief Financial Officer
Date: March 1, 2004.

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 person on behalf of the Registrant and in the capacities and on the dates indicated.

By (Signature and Title):	/s/ Donald E. Boggs
	Donald E. Boggs, Chairman, Board of Managers
	Signing in the capacity of Chief Executive Officer  and Chief Financial Officer

Date: March 1, 2004.