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 811-8849
T.O. RICHARDSON TRUST
TWO BRIDGEWATER ROAD
FARMINGTON, CONNECTICUT 06032-2256
SAMUEL BAILEY, JR.
T.O. RICHARDSON COMPANY, INC.
TWO BRIDGEWATER ROAD
FARMINGTON, CONNECTICUT 06032-2256
1-800-235-1022
Date of fiscal year end: OCTOBER 31, 2003
Date of reporting period: APRIL 30, 2003
ITEM 1. REPORTS TO STOCKHOLDERS.
- --------------------------------
T.O. RICHARDSON TRUST
SECTOR ROTATION FUND
Semi-Annual Report
April 30, 2003
T.O. RICHARDSON COMPANY
T.O. Richardson Trust
June 2, 2003
Dear Fellow Shareholders,
We are happy to report that the stock market has shown evidence during the
past two months of a potential end to the three year slide. In addition, the
gains seen in April have accelerated during the month of May.
The following charts and financial statements reflect performance and
operations of the T.O. Richardson Sector Rotation Fund for its semi-annual year
ending April 30, 2003.
It is important to remember that it is normal, as the market changes to an
upward direction, for the Fund to initially lag the market because our strategy
is trend following and the market itself established the trend. While two
months does not assure us of a change in long term trends, many of the
uncertainties articulated before the beginning of the war in Iraq have resolved
themselves favorably.
Sector investing is driven by technical analysis and recently all major
market indices have broken above their November highs. In addition, almost all
industry sector groups have moved to positive territory whereas, when the market
is weak or falling, few sectors show positive improvement.
We have increasing confidence in our ability to make gains in the current
markets. We thank you for your continued confidence in T.O. Richardson.
Sincerely,
/s/Samuel Bailey, Jr.
Samuel Bailey, Jr.
President
T.O. Richardson Sector Rotation Fund
Date Sector Rotation Fund S&P 500 Stock Index
---- -------------------- -------------------
12/31/98 $10,000 $10,000
1/31/99 $11,210 $10,418
4/30/99 $11,261 $10,905
7/31/99 $11,650 $10,887
10/31/99 $12,130 $11,203
1/31/00 $16,237 $11,495
4/30/00 $17,715 $12,008
7/31/00 $16,537 $11,863
10/31/00 $17,190 $11,884
1/31/01 $13,735 $11,391
4/30/01 $11,879 $10,450
7/31/01 $11,219 $10,163
10/31/01 $10,600 $8,924
1/31/02 $10,361 $9,551
4/30/02 $10,109 $9,130
7/31/02 $9,270 $7,761
10/31/02 $8,934 $7,576
1/31/03 $8,110 $7,352
4/30/03 $8,249 $7,915
This chart assumes an initial investment of $10,000, made on 12/31/98
(inception). Performance reflects fee waivers and does not reflect a non-
recurring early withdrawal fee of 1%. In the absence of fee waivers and the
addition of the non-recurring fee, the total return would be reduced. Returns
shown include the reinvestment of all dividends and other distributions. Past
performance is not predictive of future performance. Investment return and
principal value will fluctuate so that your shares, when redeemed, may be worth
more or less than their original cost. Unlike the S&P 500, the fund is focused
on a few stocks in a small number of sectors and investors are exposed to the
risk that a specific sector will fall rapidly in value. The S&P Stock Index is
an unmanaged stock index with no fees, therefore, there are differences in
performance, risk and expenses between the fund and the index.
RATE OF RETURN(%)
FOR THE PERIOD ENDED APRIL 30, 2003
SIX MONTHS ANNUALIZED
ENDED SINCE INCEPTION
4/30/03 12/31/98
---------- ---------------
T.O. Richardson Sector Rotation Fund (7.67)% (4.35)%
Standard & Poor's 500 Stock Index 4.48% (5.25)%
T.O. RICHARDSON SECTOR ROTATION FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2003 (UNAUDITED)
SHARES VALUE
------ -----
COMMON STOCK - 76.0%
APPAREL & FOOTWEAR - 3.4%
2,600 Coach, Inc. *<F2> $ 113,126
1,900 NIKE, Inc. - Class B 101,707
2,400 The Timberland Company - Class A *<F2> 119,976
-----------
334,809
-----------
BANKS - 7.1%
2,900 Banco Itau Holding Financeira SA - ADR (1)<F1> 96,570
4,500 Banco Santander Chile SA - ADR (1)<F1> 98,190
5,000 BancorpSouth, Inc. 100,500
3,200 First BanCorp. 98,784
2,300 First Tennessee National Corporation 100,740
10,800 Fremont General Corporation 101,088
2,200 International Bancshares Corporation 96,382
-----------
692,254
-----------
BIOMEDICAL - 7.6%
1,700 Amgen Inc. *<F2> 104,210
10,500 Diversa Corporation *<F2> 108,570
10,100 Exact Sciences Corporation *<F2> 96,354
2,800 Genzyme Corporation *<F2> 112,784
13,800 ID Biomedical Corporation *<F2> (1)<F1> 102,258
2,900 IDEC Pharmaceuticals Corporation *<F2> 94,975
4,300 Integra LifeSciences Holdings *<F2> 114,724
-----------
733,875
-----------
CHEMICALS - 1.1%
5,700 Bayer AG - ADR (1)<F1> 103,740
-----------
DATA PROCESSING - 1.0%
1,900 Fair Isaac Corporation 98,952
-----------
DRUGS - 4.2%
3,800 Celgene Corporation *<F2> 101,118
3,000 MedImmune, Inc. *<F2> 105,810
5,400 Sepracor Inc. *<F2> 103,410
2,100 Teva Pharmaceutical Industries Ltd. - ADR (1)<F1> 98,070
-----------
408,408
-----------
E-COMMERCE / SERVICES- 3.2%
3,800 Amazon.com, Inc. *<F2> 109,022
6,300 Digital Insight Corporation *<F2> 101,871
1,100 eBay Inc. *<F2> 102,212
-----------
313,105
-----------
EDUCATION - 1.1%
2,500 University of Phoenix Online *<F2> 110,350
-----------
FINANCE - 9.1%
2,500 Capital One Financial Corporation 104,675
1,500 Countrywide Financial Corporation 101,400
1,300 Fannie Mae 94,107
1,600 Freddie Mac 92,640
8,800 Friedman, Billings, Ramsey Group, Inc. - Class A 96,624
1,800 Legg Mason, Inc. 97,740
1,500 Lehman Brothers Holdings Inc. 94,455
2,700 New Century Financial Corporation 99,441
13,300 Providian Financial Corporation *<F2> 98,021
-----------
879,103
-----------
MEDICAL PRODUCTS & INSTRUMENTS - 8.9%
18,600 Align Technology, Inc. *<F2> 139,500
8,300 ArthroCare Corporation *<F2> 126,824
1,600 C. R. Bard, Inc. 101,408
3,800 Datascope Corp. 108,676
11,400 Hologic, Inc. *<F2> 102,600
2,100 Medtronic, Inc. 100,254
7,700 Noven Pharmaceuticals, Inc. *<F2> 74,151
2,000 St. Jude Medical, Inc. *<F2> 104,920
-----------
858,333
-----------
MEDICAL SERVICES - 2.1%
11,200 Chronimed Inc. *<F2> 92,960
14,800 MIM Corporation *<F2> 108,336
-----------
201,296
-----------
REAL ESTATE INVESTMENT TRUSTS - 3.0%
2,500 Chelsea Property Group, Inc. 99,150
1,700 General Growth Properties, Inc. 94,554
2,500 Vornado Realty Trust 95,000
-----------
288,704
-----------
RESTAURANTS - 2.3%
2,700 P.F. Chang's China Bistro, Inc. *<F2> 113,130
3,300 Panera Bread Company - Class A *<F2> 112,299
-----------
225,429
-----------
RETAIL - 4.4%
2,500 Bed Bath & Beyond Inc. *<F2> 98,750
5,800 Movie Gallery, Inc. *<F2> 108,054
2,700 Tractor Supply Company *<F2> 114,345
1,800 Wal-Mart Stores, Inc. 101,376
-----------
422,525
-----------
SAVINGS AND LOANS - 9.3%
4,200 Dime Community Bancshares 96,852
3,000 FirstFed Financial Corp. *<F2> 97,470
3,100 Flagstar Bancorp, Inc. 102,610
1,300 Golden West Financial Corporation 98,046
2,100 GreenPoint Financial Corp. 100,296
3,800 Harbor Florida Bancshares, Inc. 101,194
4,400 Hudson City Bancorp, Inc. 102,212
2,900 New York Community Bancorp, Inc. 100,688
2,500 Washington Mutual, Inc. 98,750
-----------
898,118
-----------
THERAPEUTICS - 5.8%
13,000 Abgenix, Inc. *<F2> 123,500
5,500 Amylin Pharmaceuticals, Inc. *<F2> 105,050
11,800 Cell Therapeutics, Inc. *<F2> 106,200
10,700 Esperion Therapeutics, Inc. *<F2> 121,980
2,400 Gilead Sciences, Inc. *<F2> 110,736
-----------
567,466
-----------
TOYS - 2.4%
4,100 Leapfrog Enterprises, Inc. *<F2> 109,470
7,300 Marvel Enterprises, Inc. *<F2> 122,932
-----------
232,402
-----------
TOTAL COMMON STOCKS (Cost $7,013,109) 7,368,869
-----------
EXCHANGE TRADED FUNDS - 15.5%
19,800 Consumer Discretionary Select Sector SPDR Fund 500,940
21,400 Financial Select Sector SPDR Fund 500,118
6,300 iShares Russell 2000 Index Fund 500,220
-----------
TOTAL EXCHANGE TRADED FUNDS (Cost $1,494,287) 1,501,278
-----------
PRINCIPAL
AMOUNT
---------
SHORT-TERM INVESTMENTS - 23.8%
U.S. GOVERNMENT AGENCY OBLIGATIONS - 19.2%
Federal Home Loan Bank Discount Note
$1,864,000 1.00%, 5/01/2003 1,864,000
-----------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 1,864,000
-----------
VARIABLE RATE DEMAND NOTES#<F3> - 4.6%
11,197 American Family Financial Services Inc., 0.91% 11,197
373,808 U.S. Bank, 1.07% 373,808
58,533 Wisconsin Corporate Central Credit Union, 0.99% 58,533
-----------
TOTAL VARIABLE RATE DEMAND NOTES 443,538
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $2,307,538) 2,307,538
-----------
TOTAL INVESTMENTS - 115.3%
(Cost $10,814,934) 11,177,685
LIABILITIES, LESS OTHER ASSETS - (15.3)% (1,484,386)
-----------
TOTAL NET ASSETS - 100.0% $ 9,693,299
-----------
-----------
(1)<F1> Foreign Security.
*<F2> Non-income producing security.
#<F3> Variable rate demand notes are considered short-term obligations and
are payable on demand. Interest rates change periodically on
specified dates. The rates listed are as of April 30, 2003.
ADR American Depository Receipt.
See notes to the financial statements.
T.O. RICHARDSON TRUST
STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2003 (UNAUDITED)
T.O. RICHARDSON
SECTOR ROTATION
FUND
---------------
ASSETS:
Investments, at value (cost $10,814,934) $11,177,685
Dividends and interest receivable 2,633
Other assets 45,643
-----------
Total Assets 11,225,961
-----------
LIABILITIES:
Payable to Advisor 13,867
Payable for investments purchased 1,484,106
Accrued expenses and other liabilities 34,689
-----------
Total Liabilities 1,532,662
-----------
NET ASSETS $ 9,693,299
-----------
-----------
NET ASSETS CONSIST OF:
Capital stock $30,012,330
Accumulated undistributed net realized
loss on investments sold (20,681,782)
Net unrealized appreciation on investments 362,751
-----------
TOTAL NET ASSETS $ 9,693,299
-----------
-----------
Shares Outstanding 1,641,674
(No par value, unlimited shares authorized)
NET ASSET VALUE, REDEMPTION PRICE
AND OFFERING PRICE PER SHARE $ 5.90
-----------
-----------
See notes to the financial statements.
T.O. RICHARDSON TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED)
T.O. RICHARDSON
SECTOR ROTATION
FUND
---------------
INVESTMENT INCOME:
Dividend income (net of foreign withholding taxes of $40) $ 18,833
Interest income 27,035
-----------
Total investment income 45,868
-----------
EXPENSES:
Investment advisory fee 81,318
Federal and state registration 8,268
Administration fee 19,110
Shareholder servicing and accounting costs 34,420
Professional fees 14,403
Reports to shareholders 2,712
Custody fees 9,729
Trustees' fees and expenses 6,352
Insurance Expense 9,181
-----------
Total operating expenses before expense reductions and
reimbursements by Advisor (Note 5) 185,493
Expense reductions (Note 6) (46,899)
Expense reimbursement from Advisor (32,880)
-----------
Net expenses 105,714
-----------
NET INVESTMENT LOSS (59,846)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (1,058,594)
Change in unrealized appreciation/depreciation on investments 174,465
-----------
Net realized and unrealized loss on investments (884,129)
-----------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (943,975)
-----------
-----------
See notes to the financial statements.
T.O. RICHARDSON TRUST
STATEMENTS OF CHANGES IN NET ASSETS
T.O. RICHARDSON
SECTOR ROTATION FUND
------------------------------------
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2003 OCTOBER 31, 2002
---------------- ----------------
(UNAUDITED)
OPERATIONS:
Net investment loss $ (59,846) $ (117,202)
Net realized loss on:
Investments (1,058,594) (2,594,898)
Option contracts expired or closed -- (300,017)
Change in unrealized appreciation/depreciation
on investments 174,465 287,023
----------- -----------
Net decrease in net assets resulting from operations (943,975) (2,725,094)
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- (351,025)
----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold 801,989 1,900,894
Issued as reinvestment of dividends -- 346,793
Cost of shares redeemed (2,461,657) (8,471,603)
----------- -----------
Net decrease in net assets resulting
from capital share transactions (1,659,668) (6,223,916)
----------- -----------
TOTAL DECREASE IN NET ASSETS (2,603,643) (9,300,035)
NET ASSETS:
Beginning of period 12,296,942 21,596,977
----------- -----------
End of period $ 9,693,299 $12,296,942
----------- -----------
----------- -----------
See notes to the financial statements.
T.O. RICHARDSON TRUST
FINANCIAL HIGHLIGHTS
Selected per share data is based on a share of beneficial interest outstanding
throughout the period.
T.O. RICHARDSON
SECTOR ROTATION FUND
------------------------------------------------------------------------------------
SIX MONTHS YEAR ENDED YEAR ENDED YEAR ENDED FOR THE PERIOD
ENDED OCTOBER 31, OCTOBER 31, OCTOBER 31, DECEMBER 31, 1998(1)<F4>
APRIL 30, 2003 2002 2001 2000 TO OCTOBER 31, 1999
-------------- ----------- ----------- ----------- ------------------------
(UNAUDITED)
PER SHARE DATA:
Net asset value,
beginning of period $ 6.39 $ 7.71 $16.06 $12.13 $10.00
------ ------ ------ ------ ------
Income from
investment operations:
Net investment income (loss) (0.04)(2)<F5> (0.06)(2)<F5> 0.13 0.08 0.02
Net realized and unrealized
gain (loss) on investments (0.45) (1.13) (5.41) 4.82 2.11
------ ------ ------ ------ ------
Total from investment operations (0.49) (1.19) (5.28) 4.90 2.13
------ ------ ------ ------ ------
Less distributions:
Dividends from
net investment income -- (0.13) (0.09) (0.02) --
Distributions from
net realized gains -- -- (2.98) (0.95) --
------ ------ ------ ------ ------
Total distributions -- (0.13) (3.07) (0.97) --
------ ------ ------ ------ ------
Net asset value, end of period $ 5.90 $ 6.39 $ 7.71 $16.06 $12.13
------ ------ ------ ------ ------
------ ------ ------ ------ ------
Total return (7.67)%(3)<F6> (15.71)% (38.33)% 41.72% 21.30%(3)<F6>
Supplemental data and ratios:
Net assets,
end of period (000's) $9,693 $12,297 $21,597 $62,820 $33,780
Ratio of net operating
expenses to average
net assets 1.95%(4)(6)(7) 1.95%(6)(7) 1.55%(6)(7) 1.86%(5)(7) 1.95%(4)(6)
<F7><F9><F10> <F9><F10> <F9><F10> <F8><F10> <F7><F9>
Ratio of net investment income
(loss) to average net assets (1.10)%(4)(6) (0.70)%(6) 1.04%(6) 0.56%(5) 0.36%(4)(6)
<F7><F9> <F9> <F9> <F8> <F7><F9>
Portfolio turnover rate 566.02% 1007.45% 742.97% 863.94% 946.15%
(1)<F4> Commencement of operations.
(2)<F5> Net investment income per share is calculated using ending balances
prior to consideration of adjustments for permanent book and tax
differences.
(3)<F6> Not annualized.
(4)<F7> Annualized.
(5)<F8> Ratio includes Advisor expense waiver recovery. The Advisor expense
waiver recovery ratio for the period ended October 31, 2000 was 0.05%.
(6)<F9> Operating expense is net of reimbursement and waivers. The ratio
excluding reimbursements and waivers for the six months ended April
30, 2003 and the periods ended October 31, 2002, October 31, 2001 and
October 31, 1999 would have been 2.56%, 2.09%, 1.55% and 2.51%,
respectively. The ratio of net investment income (loss) to average
net assets, excluding reimbursements and waivers for the six months
ended April 30, 2003 and the periods ended October 31, 2002, October
31, 2001 and October 31, 1999 would have been (1.71%), (0.84%), 1.04%
and (0.20)%, respectively.
(7)<F10> The net operating expense ratio includes expense reductions from
directed brokerage credits. The ratio excluding expense reductions
from directed brokerage credits for the six months ended April 30,
2003 and the periods ended October 31, 2002, October 31, 2001 and
October 31, 2000 was 2.82%, 2.59%, 2.08% and 1.95%, respectively.
See notes to the financial statements.
T.O. Richardson Trust
NOTES TO THE FINANCIAL STATEMENTS
APRIL 30, 2003 (UNAUDITED)
1. ORGANIZATION
The T.O. Richardson Sector Rotation Fund (the "Fund") is a series of the
T.O. Richardson Trust (the "Trust"), a voluntary business association organized
on June 2, 1998 in the Commonwealth of Massachusetts, and is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
diversified management investment company. The principal investment objective
of the Fund is to seek capital appreciation with some protection against down
markets. The Fund commenced operations on December 31, 1998.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with accounting principles generally accepted in the
United States.
(a) Investment Valuation
Common stocks and other equity-type securities are valued at the last
sales price on the securities exchange on which they are usually traded or,
if there is no such reported sale, securities are valued at the average of
the most recent bid and asked prices. Fixed income securities are valued
by pricing services that use electronic data processing techniques to
determine values. Any securities or other assets for which market
quotations are not readily available are valued at fair value as determined
in good faith by the Fund's Trustees. The Board of Trustees may approve
the use of pricing services to assist the Fund in determining the Net Asset
Value.
(b) Federal Income and Excise Taxes
The Fund intends to comply with the requirements of the Internal
Revenue Code necessary to qualify as a regulated investment company and to
make the requisite distributions of net investment income and net realized
capital gains to its shareholders sufficient to relieve it from all or
substantially all Federal income and excise taxes.
(c) Distributions to Shareholders
Dividends from net investment income are declared and paid annually.
Distributions of net realized capital gains, if any, will be declared and
paid at least annually. The Fund may utilize earnings and profits
distributed to shareholders on redemption of shares as part of the
dividends paid deduction. Accordingly, reclassifications would be made
within the net asset accounts for such amounts, as well as amounts related
to permanent differences in the character of certain income and expense
items for income tax and financial reporting purposes.
(d) Security Transactions and Investment Income
Investment transactions are recorded on the trade date for financial
statement purposes. The Fund determines the gain or loss realized from the
investment transactions by comparing the original cost of the security lot
sold with the net sale proceeds. Dividend income is recognized on the ex-
dividend date and interest income is recognized on an accrual basis.
Acquisition and market discount for debt securities are amortized over the
life of the security.
(e) Purchased Option Accounting
Premiums paid for option contracts purchased are included in the
Statements of Assets and Liabilities as an asset. Option contracts are
valued at the average of the current bid and asked price reported on the
day of valuation. When option contracts expire or are closed, realized
gains or losses are recognized without regard to any unrealized gains or
losses on the underlying securities.
(f) Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to
make estimates and use assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Actual results could differ from
those estimates.
3. CAPITAL SHARE TRANSACTIONS
Transactions in shares of the Fund were as follows:
T.O. RICHARDSON SECTOR ROTATION FUND
SIX MONTHS ENDED
APRIL 30, 2003
-----------------------------
$ SHARES
---------- ----------
Shares sold $ 801,989 136,572
Shares issued to
holders in
reinvestment
of dividends 0 0
Shares redeemed (2,461,657) (418,964)
----------- ---------
Net decrease $(1,659,668) (282,392)
-----------
-----------
Shares Outstanding:
Beginning of period 1,924,066
---------
End of period 1,641,674
---------
---------
YEAR ENDED
OCTOBER 31, 2002
-----------------------------
$ SHARES
---------- ----------
Shares sold $ 1,900,894 264,451
Shares issued to
holders in
reinvestment
of dividends 346,793 46,055
Shares redeemed (8,471,603) (1,187,777)
----------- ---------
Net decrease $(6,223,916) (877,271)
-----------
-----------
Shares Outstanding:
Beginning of period 2,801,337
---------
End of period 1,924,066
---------
---------
4. INVESTMENT TRANSACTIONS
The aggregate purchases and sales of securities, excluding short-term
investments by the Fund for the period ending April 30, 2003, were as follows:
T.O. RICHARDSON
SECTOR ROTATION FUND
--------------------
Purchases $37,597,736
Sales $36,413,372
There were no purchases or sales of long-term U.S. government securities by
the Fund.
5. INVESTMENT ADVISORY AGREEMENT
The Trust has an Investment Advisory Agreement (the "Agreement") with T.O.
Richardson Company, Inc. (the "Advisor") with whom certain Officers and Trustees
of the Trust are affiliated, to furnish investment advisory services to the
Fund. Under the terms of the Agreement, the Trust, on behalf of the Fund,
compensates the Advisor for its management services at the annual rate of 1.50%
of the Fund's average daily net assets.
For the period November 1, 2001 through January 13, 2002, the Advisor
agreed to waive its investment advisory fee and/or reimburse the Fund (exclusive
of brokerage, taxes and extraordinary expenses) to the extent necessary to
ensure that the Fund's total operating expenses did not exceed 1.95% of its
average daily net assets. For the period January 14, 2002 through April 30,
2003, the Advisor agreed to waive its investment advisory fee and/or reimburse
the Fund (exclusive of brokerage, taxes and extraordinary expenses) to the
extent necessary to ensure that the Fund's total operating expenses, net of
directed brokerage credits, did not exceed 1.95% of its average daily net
assets. The Advisor may recover from the Fund the expenses paid in excess of
the cap on expenses for the three previous years, as long as the recovery does
not cause the Fund to exceed such cap on expenses. For the six months ending
April 30, 2003, the Advisor waived investment advisory fees totaling $32,880 for
the Fund.
Reimbursed/absorbed expenses subject to potential recovery by year of
expiration are as follows:
YEAR OF SECTOR ROTATION
EXPIRATION FUND
---------- ---------------
10/31/2002 $29,560
10/31/2004 $45,846
10/31/2005 $22,536
10/31/2006 $32,880
6. EXPENSE REDUCTIONS
The Advisor had directed certain of the Fund's portfolio trades to brokers
at best price and execution and has generated directed brokerage credits to
reduce certain service provider fees. Shareholders benefit under this
arrangement as the net expenses of the Fund do not include such service provider
fees. For the period ended April 30, 2003, the total operating expenses of the
Fund were reduced by $46,899, by utilizing directed brokerage credits. Directed
brokerage credits resulted in an expense ratio being charged to shareholders of
1.95%. In accordance with Securities and Exchange Commission requirements, such
amounts are required to be shown as an expense and have been included in each of
the service provider fees in the Statements of Operations.
7. INFORMATION FOR FEDERAL INCOME TAX PURPOSES
As of April 30, 2003:
Cost of Investments $10,814,934
Gross Unrealized Appreciation $ 419,869
Gross Unrealized Depreciation (57,118)
-----------
Net Unrealized Appreciation
on Investments $ 362,751
-----------
-----------
As of October 31, 2002:
Undistributed Ordinary Income $ --
Undistributed Long-Term Gain $ --
The tax components of dividends and long-term capital gain distributions
paid during the year ended October 31, 2002 and capital loss carryovers as of
October 31, 2002 are as follows:
ORDINARY LONG-TERM NET CAPITAL LOSS
INCOME CAPITAL GAIN CAPITAL LOSS CARRYOVER
DIVIDENDS DISTRIBUTIONS CARRYOVER*<F11> EXPIRATION
--------- ------------- --------------- ----------
$351,025 $ -- $16,728,273 10/31/2009
$ 2,894,915 10/31/2010
*<F11> Capital gain distributions will resume in the future to the extent gains
are realized in excess of the available carryforwards.
T.O. Richardson Company, Inc.
Two Bridgewater Road
Farmington, Connecticut 06032-2256
800.235.1022
For more information about the
T.O. Richardson Trust Mutual Funds
call 800.643.7477
www.torich.com
Shares distributed through
T.O. Richardson Securities, Inc.,
affiliate of the advisor,
T.O. Richardson Company, Inc.
ITEM 2. CODE OF ETHICS.
- -----------------------
Not applicable to annual reports filed for periods ending before July 15, 2003.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
- -----------------------------------------
Not applicable to annual reports filed for periods ending before July 15, 2003.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
- -----------------------------------------------
Not required for annual reports filed for periods ending before December 15,
2003.
ITEM 5. [RESERVED]
- ------------------
ITEM 6. [RESERVED]
- ------------------
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
- --------------------------------------------------------------------------
MANAGEMENT INVESTMENT COMPANIES
- -------------------------------
Not applicable to open-end investment companies.
ITEM 8. [RESERVED]
- ------------------
ITEM 9. CONTROLS AND PROCEDURES.
- --------------------------------
(a) Based on their evaluation of the Registrant's Disclosure Controls and
Procedures as of a date within 90 days of the Filing Date, the Registrant's
President and Treasurer/CFO have determined that the Disclosure Controls
and Procedures (as defined in Rule 30a-2(c) under the Act) are designed to
ensure that information required to be disclosed by the Registrant is
recorded, processed, summarized and reported by the filing Date, and that
information required to be disclosed in the report is communicated to the
Registrant's management, as appropriate, to allow timely decisions
regarding required disclosure.
(b) There were no significant changes in the Registrant's internal controls or
in other factors that could significantly affect these controls subsequent
to the date of their evaluation, and there were no corrective actions with
regard to significant deficiencies and material weaknesses.
ITEM 10. EXHIBITS.
- ------------------
(a) Any code of ethics or amendment thereto. Not applicable to annual reports
for periods ending before July 15, 2003.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
(c) Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) T.O. Richardson Trust
---------------------------------------------------------
By (Signature and Title) /s/Samuel Bailey, Jr.
-----------------------------------------------
Samuel Bailey, Jr., President and Treasurer
Date 6-18-03
-------------------------------------------------------------------