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
The Timothy Plan
(Exact name of registrant as specified in charter)
| 1304 West Fairbanks Avenue Winter Park, FL | 32789 | |
| (Address of principal executive offices) | (Zip code) | |
Citco Mutual Fund Services
83 General Warren Blvd., Suite 200
Malvern, PA 19355
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-800-846-7526
Date of fiscal year end: 12/31/2005
Date of reporting period: 6/30/2005
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. The Semi- Annual Report to Shareholders for the period ended June 30, 2005 pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended, (the “1940 Act”) C17 CFR 270.30e-1 is filed herewith.
| Semi-Annual Report | ||||
| June 30, 2005 | ||||
| (Unaudited) | ||||
| Timothy Plan Family of Funds: | ||||
| Small-Cap Variable Series | ||||
LETTER FROM THE PRESIDENT
June 30, 2005 (Unaudited)
ARTHUR D. ALLY
Dear Timothy Plan Shareholder:
As you have probably noticed, the first six months of 2005 have been rather volatile in terms of overall market performance. The first four months were quite negative while performance improved significantly in May and June, not only for the market as a whole but also for our funds in particular. Market behavior thus far this year (and actually thus far this decade) continues to validate the old adage: “It takes time to make money in the stock market.”
Our instructions to each of our sub-advisors, however, have been consistent and are simply this (in order of priority):
| 1) | Comply with our screening research, |
| 2) | Preservation of principal is job #1, and |
| 3) | Out-perform your index, net of operating costs, over full market cycles. |
Although there is no way to guarantee points two and three above, each of our managers has done a pretty good job in their respective asset class categories. While future investment performance can only be prognosticated and certainly not guaranteed, our managers have also expressed confidence that our funds should close the year of 2005 in positive territory.
Regardless of how we close this year, we have complete confidence in each of our managers (all of which have long, established, and respectable investment management histories.) The non-negotiable at Timothy remains the non-negotiable; i.e., we will not invest one dollar of our shareholders’ money in any publicly traded company that has a pattern of funding or otherwise contributing to the moral disintegration of our culture.
Once again, thank you for your conviction that has made you part of the Timothy Plan family.
Sincerely,
Arthur D. Ally,
President
TOP TEN HOLDINGS/INDUSTRIES
June 30, 2005 (unaudited)
TIMOTHY PLAN SMALL CAP VARIABLE SERIES
FUND PROFILE:
Top Ten Holdings
(% of Net Assets)
CommScope, Inc. | 4.17 | % | |
URS Corp. | 3.95 | % | |
infoUSA, Inc. | 3.80 | % | |
Swift Energy Co. | 3.57 | % | |
UNOVA, Inc. | 3.41 | % | |
United Auto Group, Inc. | 3.39 | % | |
Interactive Data Corp. | 3.38 | % | |
Charles River Laboratories, Inc. | 3.29 | % | |
John Wiley & Sons, Inc. | 3.23 | % | |
Lennox International, Inc. | 3.23 | % | |
| 35.42 | % | ||
Industries
(% of Net Assets)
| Industrial | 21.95 | % | |
| Consumer, Cyclical | 16.05 | % | |
| Consumer, Non-cyclical | 12.33 | % | |
| Financial | 11.37 | % | |
| Technology | 9.34 | % | |
| Communications | 8.98 | % | |
| Energy | 8.80 | % | |
| Healthcare | 3.29 | % | |
| Other Assets less Liabilities, Net | 7.89 | % | |
| 100.00 | % | ||
EXPENSE EXAMPLE:
As a shareholder of the Fund, you incur two types of costs: direct costs, such as wire fees and low balance fees; and indirect costs, including management fees, and other Fund operating expenses. This example is intended to help you understand your indirect costs, also referred to as “ongoing costs,” (in dollars) of investing in the Fund, and to compare these costs with the ongoing costs of investing in other mutual funds.
This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire six-month period of January 1, 2005, through June 30, 2005.
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested at the beginning of the period, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Timothy Plan Top Ten Holdings / Industries [2]
TOP TEN HOLDINGS/INDUSTRIES
June 30, 2005 (unaudited)
TIMOTHY PLAN SMALL CAP VARIABLE SERIES
Hypothetical example for comparison purposes
The second line of the table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any direct costs, such as wire fees or low balance fees. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these direct costs were included, your costs would be higher.
| Beginning Account Value January 1, 2005 | Ending Account Value June 30, 2005 | Expenses Paid June 30, 2005 | |||||||
Actual | $ | 1,000.00 | $ | 933.50 | $ | 5.75 | |||
Hypothetical (5% return before expenses) | 1,000.00 | 1,018.84 | 6.01 | ||||||
| * | Expenses are equal to the Fund’s annualized expense ratio of 1.20%, which is net of any expenses paid indirectly, multiplied by the average account value over the period, multiplied by 181 days/365 days (to reflect the one-half year period). The Fund’s ending account value on the first line in the table is based on its actual total return of (6.65)% for the six-month period of January 1, 2005, to June 30, 2005. |
Timothy Plan Top Ten Holdings / Industries [3]
SMALL CAP VARIABLE SERIES
SCHEDULE OF INVESTMENTS
As of June 30, 2005 (unaudited)
COMMON STOCKS - 92.10%
number of shares | market value | ||||
| AIR DELIVERY & FREIGHT SERVICES - 0.51% | |||||
| 1,000 | Hub Group, Inc.* | $ | 25,050 | ||
| AUCTION HOUSE/ART DEALER - 2.26% | |||||
| 5,100 | Adesa, Inc. | 111,027 | |||
| BUILDING - MOBILE HOME/MANUFACTURED HOUSING - 1.68% | |||||
| 8,300 | Champion Enterprises, Inc.* | 82,502 | |||
| BUILDING PRODUCTS - AIR & HEATING - 3.23% | |||||
| 7,500 | Lennox International, Inc. | 158,775 | |||
| CIRCUIT BOARDS - 1.36% | |||||
| 8,800 | TTM Technologies, Inc.* | 66,968 | |||
| COMMERCIAL SERVICES - FINANCE - 4.87% | |||||
| 8,000 | Interactive Data Corp.* | 166,240 | |||
| 3,400 | NCO Group, Inc.* | 73,542 | |||
| 239,782 | |||||
| DATA PROCESSING/MANAGEMENT - 4.58% | |||||
| 16,000 | InfoUSA, Inc. | 187,200 | |||
| 2,000 | MoneyGram International, Inc. | 38,240 | |||
| 225,440 | |||||
| DISTRIBUTION/WHOLESALE - 6.08% | |||||
| 3,500 | Hughes Supply, Inc. | 98,350 | |||
| 1,100 | Scansource, Inc.* | 47,234 | |||
| 4,200 | Tech Data Corp.* | 153,762 | |||
| 299,346 | |||||
| DIVERSIFIED MANUFACTURING OPERATIONS - 4.68% | |||||
| 5,000 | Federal Signal Corp. | 78,000 | |||
| 14,200 | Jacuzzi Brands, Inc.* | 152,366 | |||
| 230,366 | |||||
| E-COMMERCE/PRODUCTS - 1.57% | |||||
| 11,000 | 1-800-Flowers.Com, Inc.* | 77,440 | |||
| ELECTRIC - INTEGRATED - 0.00% | |||||
| 1 | Allete, Inc. | 50 | |||
| ELECTRONICS COMPONENTS - MISC - 1.85% | |||||
| 3,000 | Benchmark Electronics, Inc. | 91,260 | |||
| ENGINEERING/R&D SERVICES - 3.95% | |||||
| 5,200 | URS Corp.* | 194,220 | |||
| FINANCIAL GUARANTEE INSURANCE - 2.38% | |||||
| 3,000 | PMI Group, Inc. | 116,940 | |||
| INDUSTRIAL AUTOMATION/ROBOTICS - 3.41% | |||||
| 6,300 | Unova, Inc.* | 167,769 | |||
The accompanying notes are an integral part of these financial statements.
Timothy Plan Small Cap Variable Fund [4]
SMALL CAP VARIABLE SERIES
SCHEDULE OF INVESTMENTS
As of June 30, 2005 (unaudited)
COMMON STOCKS - 92.10% (cont.)
| number of shares | market value | ||||
| INVESTMENT COMPANIES - 1.04% | |||||
| 3,000 | MCG Capital Corp. | $ | 51,240 | ||
| MEDICAL - BIOMEDICAL/GENETICS - 4.01% | |||||
| 600 | Bio-Rad Laboratories, Inc.* | 35,526 | |||
| 3,360 | Charles River Laboratories International, Inc.* | 162,120 | |||
| 197,646 | |||||
| MEDICAL - DRUGS - 1.45% | |||||
| 4,250 | K-V Pharmaceutical Co.* | 71,187 | |||
| MEDICAL INFORMATION SYSTEMS - 1.79% | |||||
| 6,400 | Dendrite International, Inc.* | 88,320 | |||
| METAL PROCESSORS & FABRICATION - 2.83% | |||||
| 5,000 | Kaydon Corp. | 139,250 | |||
| OIL COMPANY - EXPLORATION & PRODUCTION - 8.80% | |||||
| 5,000 | Comstock Resources, Inc.* | 126,450 | |||
| 5,000 | Energy Partners Ltd.* | 131,050 | |||
| 4,900 | Swift Energy Corp.* | 175,518 | |||
| 433,018 | |||||
| PUBLISHING - BOOKS - 3.23% | |||||
| 4,000 | John Wiley & Sons, Inc. | 158,920 | |||
| REITS - DIVERSIFIED - 1.14% | |||||
| 3,000 | Crescent Real Estate Equities Trust | 56,250 | |||
| REITS - HOTELS - 2.12% | |||||
| 10,000 | Highland Hospitality Corp. | 104,500 | |||
| REITS - MORTGAGE - 1.97% | |||||
| 10,000 | Aames Investment Corp. | 97,200 | |||
| RETAIL - APPAREL/SHOE - 2.92% | |||||
| 3,300 | Stage Stores, Inc.* | 143,880 | |||
| RETAIL - AUTOMOBILE - 3.39% | |||||
| 5,600 | United Auto Group, Inc. | 166,880 | |||
| RETAIL - RESTAURANTS - 1.97% | |||||
| 2,500 | CBRL Group, Inc. | 97,150 | |||
| SAVINGS & LOAN/THRIFTS - 2.72% | |||||
| 8,000 | Commercial Capital Bancorp, Inc. | 133,680 | |||
| SEMICONDUCTOR EQUIPMENT - 2.96% | |||||
| 15,000 | Axcelis, Inc.* | 102,900 | |||
| 6,000 | Mattson Technology, Inc.* | 42,960 | |||
| 145,860 | |||||
| TELECOMMUNICATIONS EQUIPMENT - 4.17% | |||||
| 11,800 | CommScope, Inc.* | 205,438 | |||
The accompanying notes are an integral part of these financial statements.
Timothy Plan Small Cap Variable Fund [5]
SMALL CAP VARIABLE SERIES
SCHEDULE OF INVESTMENTS
As of June 30, 2005 (unaudited)
COMMON STOCKS - 92.10% (cont.)
| number of shares | market value | ||||
| VITAMINS & NUTRITION PRODUCTS - 2.53% | |||||
| 4,800 | NBTY, Inc.* | $ | 124,512 | ||
| WIRE & CABLE PRODUCTS - 0.65% | |||||
| 1,500 | Belden CDT, Inc. | 31,800 | |||
| Total Common Stocks (cost $3,895,411) | 4,533,666 | ||||
SHORT-TERM INVESTMENTS - 7.39%
| number of shares | market value | ||||
| 165,651 | Federated Cash Trust Series II Treasury | 165,651 | |||
| 197,906 | First American Treasury Obligations Fund, Class A | 197,906 | |||
| Total Short-Term Investments (cost $363,557) | 363,557 | ||||
| TOTAL INVESTMENTS - 99.49% (identified cost $4,258,968) | 4,897,223 | ||||
| OTHER ASSETS AND LIABILITIES, NET - 0.51% | 24,882 | ||||
| NET ASSETS - 100.00% | $ | 4,922,105 | |||
| * | Non-income producing security |
The accompanying notes are an integral part of these financial statements.
Timothy Plan Small Cap Variable Fund [6]
SMALL CAP VARIABLE SERIES
STATEMENT OF ASSETS AND LIABILITIES
As of June 30, 2005 (unaudited)
ASSETS | |||
| amount | |||
Investments in Securities at Value (identified cost $4,258,968) [NOTE 1] | $ | 4,897,223 | |
Receivables: | |||
Interest | 567 | ||
Dividends | 13,290 | ||
Securities Sold | 18,978 | ||
Prepaid Expenses | 235 | ||
Total Assets | $ | 4,930,293 | |
LIABILITIES | |||
| amount | |||
Accrued Advisory Fees | $ | 1,454 | |
Payable for Fund Shares Redeemed | 4,569 | ||
Accrued Expenses | 2,165 | ||
Total Liabilities | $ | 8,188 | |
NET ASSETS | |||
| amount | |||
Net Assets | $ | 4,922,105 | |
SOURCES OF NET ASSETS | |||
| amount | |||
At June 30, 2005, Net Assets Consisted of: | |||
Paid-in Capital | $ | 3,934,853 | |
Undistributed Net Investment Income | 5,005 | ||
Accumulated Net Realized Gain on Investments | 343,992 | ||
Net Unrealized Appreciation in Value of Investments | 638,255 | ||
Net Assets | $ | 4,922,105 | |
Shares of Capital Stock Outstanding (No Par Value, Unlimited Shares Authorized) | 313,308 | ||
Net Asset Value, Offering and Redemption Price Per Share ($4,922,105 / 313,308 Shares) | $ | 15.71 | |
The accompanying notes are an integral part of these financial statements.
Timothy Plan Small Cap Variable Fund [7]
SMALL CAP VARIABLE SERIES
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2005 (unaudited)
INVESTMENT INCOME
| amount | ||||
Interest | $ | 4,000 | ||
Dividends | 30,881 | |||
Total Investment Income | 34,881 | |||
EXPENSES
| ||||
| amount | ||||
Investment Advisory Fees [Note 3] | 24,897 | |||
Fund Accounting, Transfer Agency, & Administration Fees | 6,164 | |||
Custodian Fees | 1,893 | |||
Audit Fees | 944 | |||
Participation Fees | 4,979 | |||
Printing Expense | 468 | |||
Legal Expense | 738 | |||
Insurance Expense | 165 | |||
Miscellaneous Expense | 1,335 | |||
Total Expenses | 41,583 | |||
Expenses Waived by Advisor [Note 3] | (11,707 | ) | ||
Total Net Expenses | 29,876 | |||
Net Investment Income | 5,005 | |||
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
| ||||
| amount | ||||
Net Realized Loss on Investments | (29,715 | ) | ||
Net Change in Unrealized Appreciation of Investments | (347,056 | ) | ||
Net Realized and Unrealized Loss on Investments | (376,771 | ) | ||
Decrease in Net Assets Resulting from Operations | $ | (371,766 | ) | |
The accompanying notes are an integral part of these financial statements.
Timothy Plan Small Cap Variable Fund [8]
SMALL CAP VARIABLE SERIES
STATEMENTS OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS
six months ended 06/30/05 (unaudited) | year ended | |||||||
Operations: | ||||||||
Net Investment Gain (Loss) | $ | 5,005 | $ | (4,700 | ) | |||
Net Realized Gain (Loss) on Investments | (29,715 | ) | 793,735 | |||||
Net Change in Unrealized Appreciation of Investments | (347,056 | ) | (210,033 | ) | ||||
Net Increase/(Decrease) in Net Assets (resulting from operations) | (371,766 | ) | 579,002 | |||||
Distributions to Shareholders: | ||||||||
Net Investment Income | — | — | ||||||
Net Realized Gains | — | — | ||||||
Total Distributions to Shareholders | — | — | ||||||
Capital Share Transactions: | ||||||||
Proceeds from Shares Sold | 111,414 | 227,902 | ||||||
Dividends Reinvested | — | — | ||||||
Cost of Shares Redeemed | (380,963 | ) | (543,700 | ) | ||||
Decrease in Net Assets (resulting from capital share transactions) | (269,549 | ) | (315,798 | ) | ||||
Total Increase (Decrease) in Net Assets | (641,315 | ) | 263,204 | |||||
Net Assets: | ||||||||
Beginning of Period | 5,563,420 | 5,300,216 | ||||||
End of Period | $ | 4,922,105 | $ | 5,563,420 | ||||
Accumulated Undistributed Income: | $ | 5,005 | $ | — | ||||
Shares of Capital Stock of the Fund Sold and Redeemed: | ||||||||
Shares Sold | 7,050 | 14,509 | ||||||
Shares Reinvested | — | — | ||||||
Shares Redeemed | (24,403 | ) | (34,941 | ) | ||||
Net Decrease in Number of Shares Outstanding | (17,353 | ) | (20,432 | ) | ||||
The accompanying notes are an integral part of these financial statements.
Timothy Plan Small Cap Variable Fund [9]
SMALL CAP VARIABLE SERIES
FINANCIAL HIGHLIGHTS
The table below sets forth financial data for one share of capital stock outstanding throughout each period presented.
| six months ended 06/30/05(c) | year ended 12/31/04 | year ended 12/31/03 | year ended 12/31/02 | year ended 12/31/01 | year ended 12/31/00 | |||||||||||||||||||
Per Share Operating Performance: | ||||||||||||||||||||||||
Net Asset Value, Beginning of Period | $ | 16.83 | $ | 15.10 | $ | 10.70 | $ | 13.05 | $ | 12.29 | $ | 12.37 | ||||||||||||
Income from Investment Operations: | ||||||||||||||||||||||||
Net Investment Income (Loss) | 0.02 | (0.01 | ) | (0.03 | ) | (0.01 | ) | (0.02 | ) | 0.07 | ||||||||||||||
Net Realized and Unrealized Gain (Loss) on Investments | (1.14 | ) | 1.74 | 4.43 | (2.26 | ) | 1.42 | 0.94 | ||||||||||||||||
Total from Investment Operations | (1.12 | ) | 1.73 | 4.40 | (2.27 | ) | 1.40 | 1.01 | ||||||||||||||||
Less Distributions: | ||||||||||||||||||||||||
Dividends from Net Investment Income | — | — | — | — | — | (0.08 | ) | |||||||||||||||||
Dividends from Realized Gains | — | — | — | — | (0.64 | ) | (1.01 | ) | ||||||||||||||||
Return of Capital | — | — | — | (0.08 | ) | — | — | |||||||||||||||||
Total Distributions | — | — | — | (0.08 | ) | (0.64 | ) | (1.09 | ) | |||||||||||||||
Net Asset Value at End of Period | $ | 15.71 | $ | 16.83 | $ | 15.10 | $ | 10.70 | $ | 13.05 | $ | 12.29 | ||||||||||||
Total Return (a) | (6.65 | )% | 11.46 | % | 41.12 | % | (17.38 | )% | 11.48 | % | 8.16 | % | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||
Net Assets, End of Period (in 000s) | $ | 4,922 | $ | 5,563 | $ | 5,300 | $ | 4,839 | $ | 5,114 | $ | 3,326 | ||||||||||||
Ratio of Expenses to Average Net Assets: | ||||||||||||||||||||||||
Before Reimbursement and Waiver of Expenses by Advisor | 1.67 | %(b) | 1.63 | % | 1.56 | % | 1.82 | % | 2.00 | % | 1.83 | % | ||||||||||||
After Reimbursement and Waiver of Expenses by Advisor | 1.20 | %(b) | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | 1.20 | % | ||||||||||||
Ratio of Net Investment Income (Loss) to Average Net Assets: | ||||||||||||||||||||||||
Before Reimbursement and Waiver of Expenses by Advisor | (0.27 | )%(b) | (0.52 | )% | (0.55 | )% | (0.73 | )% | (0.94 | )% | 0.11 | % | ||||||||||||
After Reimbursement and Waiver of Expenses by Advisor | 0.20 | %(b) | (0.09 | )% | (0.19 | )% | (0.11 | )% | (0.14 | )% | 0.74 | % | ||||||||||||
Portfolio Turnover | 38.66 | % | 63.35 | % | 51.95 | % | 69.14 | % | 67.40 | % | 85.82 | % | ||||||||||||
| (a) | For Periods of Less Than One Full Year, Total Returns Are Not Annualized. |
| (b) | Annualized |
| (c) | Unaudited |
The accompanying notes are an integral part of these financial statements.
Timothy Plan Small Cap Variable Fund [10]
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
SMALL CAP VARIABLE SERIES
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 16, 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 a 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.
A. Security Valuation.
Investments in securities traded on a national securities exchange are valued at the NASDAQ official closing price on the last business day of the period. Securities for which quotations are not available are valued at fair market value as determined in good faith by each Fund’s investment manager, in conformity with guidelines adopted by and subject to the review and supervision of the Board of Trustees. Unlisted securities, or listed securities in which there were no sales, are valued at the closing bid. Short-term obligations with remaining maturities of 60 days or less are valued at cost plus accrued interest, which approximates market value.
B. Investment Income and Securities Transactions.
Security transactions are accounted for on the date the securities are purchased or sold (trade date). Cost is determined and gains and losses are based on the identified cost basis for both financial statement and federal income tax purposes. Dividend income and distributions to shareholders are reported on the ex-dividend date. Interest income and expenses are accrued daily.
C. Net Asset Value Per Share.
Net asset value per share of the capital stock of the Fund is determined daily as of the close of trading on the New York Stock Exchange by dividing the value of its net assets by the number of Fund shares outstanding.
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.
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
Purchases and sales of securities, other than short-term investments, aggregated $1,754,135 and $1,725,676 respectively, for the six months ended June 30, 2005.
Note 3 – Investment Management Fee and Other Transactions with Affiliates
Timothy Partners, LTD., (“TPL”) is the investment Advisor for the Fund pursuant to an investment Advisory Agreement (the “Agreement”) effective February 27, 2004. 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. 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, 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 $11,707 for the six months ended June 30, 2005. There is no guarantee that the Advisor will waive fees and/or reimburse expenses in the future.
Timothy Plan Notes to Financial Statements [11]
NOTES TO FINANCIAL STATEMENTS
June 30, 2005 (unaudited)
SMALL CAP VARIABLE SERIES
At June 30, 2005, the cumulative amounts available for reimbursement that has been paid and/or waived by the Advisor on behalf of the Fund are as follows:
funds | |||
Small-Cap Variable Series | $ | 86,710 | |
At June 30, 2005, the Advisor may recapture a portion of the above amounts no later than the dates as stated below:
| December 31, | ||||||||||||
funds | 2005 | 2006 | 2007 | 2008 | ||||||||
Small-Cap Variable Series | $ | 34,673 | $ | 17,225 | $ | 23,105 | $ | 11,707 | ||||
Note 4 – Unrealized Appreciation (Depreciation)
At June 30, 2005, the cost for federal income tax purposes is $4,258,968. At June 30, 2005, 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 Variable Series | $ | 821,444 | $ | (183,189 | ) | $ | 638,255 | |||
Note 5 – Distributions to Shareholders
There were no distributions paid during the years ended December 31, 2004 and 2003.
As of December 31, 2004, the components of distributable earnings on a tax basis were as follows:
| Small-Cap Variable Fund | |||
Undistributed Ordinary Income | $ | — | |
Undistributed Long-term Capital Gains | 373,708 | ||
Unrealized Appreciation | 985,311 | ||
| $ | 1,359,019 | ||
The components of net assets are estimated because final tax characteristics cannot be determined until fiscal year end.
Note 6 – N-Q Disclosure & Proxy Procedures
The SEC has adopted the requirement that all Funds file a complete schedule of investments with the SEC for their first and third fiscal quarters on Form N-Q for fiscal quarters ending after July 9, 2004. For the Timothy Plan Funds this would be for the fiscal quarters ending March 31 and September 30. The Form N-Q filing must be made within 60 days of the end of the quarter. The Timothy Plan Funds’ Forms N-Q will be available on the SEC’s website at http://sec.gov, or they may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (call 1-800-732-0330 for information on the operation of the Public Reference Room).
The Trust has adopted Portfolio Proxy Voting Policies and Procedures under which the Portfolio’s vote proxies related to securities (‘portfolio proxies”) held by the Portfolios. A description of the Trust’s Portfolio Proxy Voting Policies and Procedures is available (i) without charge, upon request, by calling the Company toll-free at 800-846-7526 and (ii) on the SEC’s website at www.sec.gov n addition, the fund will be required to file new Form N-PX, with its complete voting record for the 12 months ended June 30th, no later than August 31st of each year. The first such filing was due August 31, 2004. Once filed, the Trusts’s Form N-PX will be available (i) without charge, upon request, by calling the Company toll-free at 800-846-7526 and (ii) on the SEC’s website at www.sec.gov.
Timothy Plan Notes to Financial Statements [12]
1304 West Fairbanks Avenue
Winter Park, FL 32789
(800) TIM-PLAN
(800) 846-7526
Visit the Timothy Plan web site on the internet at:
www.timothyplan.com
This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective Prospectus which includes details regarding the Fund’s objectives, policies, expenses and other information. Distributed by Timothy Partners, Ltd.
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. SCHEDULE OF INVESTMENTS
Included in the Semi-Annual 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.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANY
Not Applicable
ITEM 9. PURCHASE OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There has been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees.
ITEM 11. CONTROLS AND PROCEDURES
| a. | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment |
| Company Act of 1940, as amended (the “1940 Act”) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended. |
| b. | There were 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 last fiscal half-year (the registrant’s second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
ITEM 12. EXHIBITS.
(a)(1) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
(b) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is attached hereto.
SIGNATURES
[See General Instruction F]
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) The Timothy Plan. | ||
By: | /s/ Arthur D. Ally | |
Arthur D. Ally, PRESIDENT | ||
Date 8/31/2005 | ||
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: | /s/ Arthur D. Ally | |
Arthur D. Ally, PRESIDENT | ||
Date 8/31/2005 | ||
By: | /s/ Arthur D. Ally | |
Arthur D. Ally, TREASURER | ||
Date 8/31/2005 | ||
* Print the name and title of each signing officer under his or her signature.