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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 811-08058
---------------------------------------------
Noah Investment Group Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
975 Delchester Road, P.O. Box 727, Edgemont, PA 19028
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Citco-Quaker Fund Services, Inc., 1288 Valley Forge Road,
Suite 88, Valley Forge, PA 19482
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 610-651-0460
-----------------------------
Date of fiscal year end: 10/31/03
----------------------------------
Date of reporting period: 4/30/03
----------------------------------
Item 1 - Reports to Stockholders
Item 2 - Code of Ethics
Not applicable.
Item 3 - Audit Committee Financial Expert
Not applicable.
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
Not applicable.
Item 10 - Exhibits
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act (17
CFR 270.30a-2): Attached hereto
Exhibit 99.302 CERT - Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
Exhibit 99.906 CERT - Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
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)
By: /s/ William L. Van Alen, Jr.
---------------------------
William L. Van Alen, Jr.
Date: July 9, 2003
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/ William L. Van Alen, Jr.
----------------------------
William L. Van Alen, Jr.
President
Date: July 9, 2003
By: /s/ William L. Van Alen, Jr.
----------------------------
William L. Van Alen, Jr.
Treasurer
[NOAH FUND LOGO OMITTED]
1-800-794-6624
1-800-794-NOAH
SEMI-ANNUAL REPORT
APRIL 30, 2003
June 17, 2003
Dear Fellow Shareholder:
Once again, I thank you for your confidence and investment in the NOAH FUND. It
is beginning to pay off. According to our sub-investment advisor, Geewax, Terker
& Company, and confirmed in my opinion, by the economic data, this recession has
been a "capital spending" recession. That means industry has decided that
inventories have gotten so high that they will wait until there is an increase
in demand for their products. This allows for a "working off" of their
inventories, thus no more capital spending. Because of this, corporations do not
feel a need to produce capital goods, causing employee layoffs to occur.
Historically, those laid-off consumers curb their spending habits, which then
further widens the recession. However, in our current recession consumer demands
for housing, autos and consumer goods have remained remarkably high.
The good news is that there appears to be no inflation.
As we've noted before, fiscal stimulus appears to be in the works. That will
mean more dollars in the pockets of the consumer. When the consumer/entrepreneur
is taxed less, he will take the risk to start new businesses and hire workers,
reducing unemployment and rescuing the economy from the doldrums. The philosophy
is back to basics, good cash flow, sound balance sheet and the ability to expand
from within.
We are encouraged.
We are fortunate to have John Geewax actively involved with the investment
management of the NOAH FUND. Geewax, Terker & Company generally follows a
philosophy of investing in Large Cap Growth Stocks for the Long Term, while
remaining fully invested. The NOAH FUND is managed with the same philosophy
indeed.
As you are aware, your investment advisor, Polestar Management Company, is
committed to donating ten percent of its one percent management fee as a tithe
to missions, discipleship, and the needs of the poor. Last year, we gave to
Campus Crusade for Christ International, Inc. and the Urban Family Council.
Naturally, this donation comes from the management company and NOT from the
Fund, so it has no effect on the monetary value of your investment.
We are grateful to be able to serve you, and in this way, serve our Lord.
With the market down, this may be the time to get involved, particularly on a
dollar cost averaging basis, one of the most useful tools available to the
individual investor. If you would like more information, please feel free to
call me at 610.651.0460 or call toll free to leave a message for me to return
your call at 800.794.NOAH (6624).
In Jesus' Name,
/s/ William L. Van Alen, Jr.
------------------------------
William L. Van Alen, Jr.
President
NOAH FUND
THE NOAH FUND
SCHEDULE OF INVESTMENTS
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMMON STOCKS--98.85%
ADVERTISING--0.57%
ADVO, Inc.* 1,260 $ 49,543
-----------
AEROSPACE & DEFENSE--0.19%
Veridian Corp.* 850 16,141
-----------
BANKS--1.38%
East-West Bancorp, Inc. 250 8,462
First Bancorp Puerto Rico 1,700 52,479
Prosperity Bancshares, Inc. 1,180 20,792
Umpqua Holdings Corp. 1,900 37,335
-----------
119,068
-----------
BIOTECHNOLOGY--0.76%
Charles River Laboratories International, Inc.* 2,400 65,160
-----------
CHEMICALS--2.31%
Airgas, Inc.* 3,580 72,423
Praxair, Inc. 600 34,848
Valspar Corp. 2,120 91,563
-----------
198,834
-----------
COMMERCIAL SERVICES--2.37%
Pharmaceutical Product Development, Inc.* 2,390 62,546
Rent-A-Center, Inc.* 1,160 74,472
Weight Watchers International, Inc.* 1,440 67,651
-----------
204,669
-----------
COMPUTER SOFTWARE & SERVICES--10.66%
First Data Corp. 3,670 143,974
Hyperion Solutions Corp. 310 8,767
Microsoft Corp. 28,710 734,115
Pinnacle Systems, Inc.* 3,400 32,130
-----------
$ 918,986
-----------
The accompanying notes are an integral part of the financial statements.
2
THE NOAH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
COMPUTERS--4.43%
CACI International, Inc.* 1,110 $ 38,772
Dell Computer Corp.* 11,880 343,451
-----------
382,223
-----------
ELECTRICAL COMPONENTS & EQUIPMENT--4.03%
Ametek, Inc. 1,800 67,860
Fisher Scientific International, Inc.* 4,490 129,357
Flir Systems, Inc.* 810 42,185
Mettler-Toledo International, Inc.* 1,800 63,900
Varian, Inc.* 1,390 43,938
-----------
347,240
-----------
FINANCIAL SERVICES--8.67%
Doral Financial Corp. 8,195 327,882
Fannie Mae 3,330 241,059
Freddie Mac 3,085 178,621
-----------
747,562
-----------
FOOD & BEVERAGES--2.23%
General Mills, Inc. 900 40,599
Performance Food Group Co.* 2,260 79,281
Sara Lee Corp. 4,300 72,154
-----------
192,034
-----------
HEALTHCARE--PRODUCTS--5.16%
Cytyc Corp.* 10,000 132,000
Resmed, Inc.* 3,900 143,052
Respironics, Inc.* 4,430 170,201
-----------
445,253
-----------
HEALTHCARE--SERVICES--2.33%
Apria Healthcare Group, Inc.* 5,540 129,913
Inveresk Research Group, Inc.* 1,910 27,466
Lincare Holdings, Inc.* 1,440 43,733
-----------
201,112
-----------
The accompanying notes are an integral part of the financial statements.
3
THE NOAH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
HOUSEHOLD PRODUCTS--3.42%
Avery Dennison Corp. 1,820 $ 96,478
Church & Dwight, Inc. 2,520 79,304
Jarden Corp.* 1,400 41,300
Newell Rubbermaid, Inc. 2,540 77,419
-----------
294,501
-----------
INTERNET SOFTWARE & SERVICES--1.83%
Avocent Corp.* 930 27,547
j2 global Communications, Inc.* 1,700 50,202
Symantec Corp.* 1,100 48,345
USA Interactive* 1,047 31,358
-----------
157,452
-----------
MINING--0.80%
Freeport-McMoRan Copper & Gold, Inc. 3,960 68,548
-----------
MISCELLANEOUS MANUFACTURING--2.34%
Clarcor, Inc. 1,170 43,770
Danaher Corp. 1,940 133,821
Matthews International Corp. 1,040 24,502
-----------
202,093
-----------
MULTI-MEDIA--1.58%
Clear Channel Communications, Inc.* 2,810 109,899
Courier Corp. 540 26,406
-----------
136,305
-----------
OFFICE & BUSINESS EQUIPMENT--1.66%
Pitney Bowes, Inc. 4,070 142,898
-----------
OIL & GAS--7.18%
Cimarex Energy Co.* 1,400 27,580
Enbridge Energy Management LLC* 1,655 67,132
Evergreen Resources, Inc.* 1,030 48,977
Kinder Morgan Management LLC* 1,800 61,722
Patina Oil & Gas Corp. 1,860 64,226
Pogo Producing Co. 3,620 143,352
St Mary Land & Exploration Co. 1,770 45,347
Varco International, Inc.* 4,990 87,774
XTO Energy, Inc. 3,733 72,794
-----------
618,904
-----------
The accompanying notes are an integral part of the financial statements.
4
THE NOAH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
PACKAGING & CONTAINERS--0.47%
Pactiv Corp.* 1,970 $ 40,424
-----------
PHARMACEUTICALS--7.23%
Abbott Laboratories 3,980 161,707
American Pharmaceutical Partners, Inc.* 3,500 81,725
Cardinal Health, Inc. 1,810 100,057
Caremark Rx, Inc.* 5,430 108,111
Endo Pharmaceuticals Holdings, Inc.* 2,620 43,282
NBTY, Inc.* 3,470 53,785
Pharmaceutical Resources, Inc.* 1,190 52,300
Priority Healthcare Corp.* 980 22,344
-----------
623,311
-----------
REAL ESTATE INVESTMENT TRUST--0.21%
Newcastle Investment Corp. 1,060 18,476
-----------
RETAIL--13.97%
Applebees International, Inc. 2,550 69,870
Big 5 Sporting Goods Corp.* 3,640 45,027
Rare Hospitality International, Inc.* 1,400 40,782
Red Robin Gourmet Burgers, Inc.* 2,720 41,589
Regis Corp. 1,360 38,529
Staples, Inc.* 5,770 109,861
Wal-Mart Stores, Inc. 15,240 858,317
-----------
1,203,975
-----------
SEMICONDUCTORS--6.16%
Integrated Circuit Systems, Inc.* 2,360 51,259
Intel Corp.* 26,090 480,056
-----------
531,315
-----------
TELECOMMUNICATIONS--3.89%
Cisco Systems, Inc.* 22,310 335,542
-----------
TOYS & HOBBIES--1.59%
Leapfrog Enterprises, Inc.* 710 18,957
Mattel, Inc. 5,450 118,483
-----------
137,440
-----------
The accompanying notes are an integral part of the financial statements.
5
THE NOAH FUND
SCHEDULE OF INVESTMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
SHARES VALUE
------ -----
TRANSPORTATION SERVICES--0.22%
Old Dominion Freight Line, Inc.* 560 $ 18,569
UTILITIES--0.42%
New Jersey Resources Corp. 1,050 35,962
WASTE MANAGEMENT--0.79%
Allied Waste Industries, Inc.* 2,040 16,932
Waste Connections, Inc.* 1,520 51,133
-----------
68,065
-----------
TOTAL COMMON STOCK (COST $8,253,109) 8,521,605
-----------
SHORT-TERM INVESTMENTS--0.85%
MONEY MARKET FUND
Evergreen Institutional Money Market Fund 73,072 73,072
-----------
TOTAL SHORT-TERM INVESTMENTS (COST $73,072) 73,072
-----------
TOTAL VALUE OF INVESTMENTS (COST $8,326,181)--99.70% 8,594,677
-----------
OTHER ASSETS LESS LIABILITIES, NET--0.30% 26,122
-----------
TOTAL NET ASSETS--100% $ 8,620,799
===========
- ----------
*Non-income producing security.
***Fund owns fractional shares of Riverstone Networks, Inc with no market value.
The accompanying notes are an integral part of the financial statements.
6
THE NOAH FUND
STATEMENT OF ASSETS & LIABILITIES
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS:
Investments, at value (cost -- $8,326,181) $ 8,594,677
Interest and dividends receivable 4,503
Receivable for portfolio shares sold 41,171
Receivable from investment adviser 4,096
Prepaid expenses and other assets 5,478
-----------
Total assets $ 8,649,925
-----------
LIABILITIES:
Payable for portfolio shares repurchased $ 2,262
Distribution and service fees payable 2,546
Accrued expenses 24,318
-----------
Total liabilities $ 29,126
-----------
NET ASSETS:
Capital stock, $0.001 par value (500,000,000 shares of
beneficial interest authorized) $ 766
Paid-in capital 16,606,176
Accumulated net realized loss from investments (8,193,684)
Undistributed net investment income (60,955)
Net unrealized depreciation on investments 268,496
-----------
Net assets $ 8,620,799
===========
Shares of beneficial interest outstanding 765,639
-----------
Net asset value per share $ 11.26
===========
The accompanying notes are an integral part of the financial statements.
7
THE NOAH FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD ENDED APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 378
Dividends $ 31,792
-----------
32,170
-----------
EXPENSES:
Management fees 42,330
Accounting and transfer agent fees 16,932
Distribution and service fees 10,582
Legal and auditing fees 10,415
Federal and state registration fees 12,397
Reports and notices to shareholders 4,463
Custodian fees and expenses 4,959
Insurance expenses 644
Other 13,649
-----------
Total expenses before waivers and related reimbursements 116,371
Less: waivers and related reimbursements (23,246)
-----------
Total expenses after waivers and related reimbursements 93,125
-----------
Net investment income (loss) (60,955)
-----------
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS:
Net realized gain/(loss) from:
Investments (320,072)
Net change in unrealized appreciation/(depreciation) on:
Investments 616,337
-----------
Net realized and unrealized gain/(loss) on investments 296,265
-----------
NET INCREASE/(DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 235,310
===========
The accompanying notes are an integral part of the financial statements.
8
THE NOAH FUND
STATEMENTS OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------------------------
FOR THE
PERIOD ENDED FOR THE
APRIL 30, 2003 YEAR ENDED
(UNAUDITED) OCTOBER 31, 2002
-------------- ----------------
INCREASE/(DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income (loss) $ (60,955) $ (169,919)
Net realized gain/(loss) from investments (320,072) (1,627,878)
Net change in unrealized appreciation/(depreciation)
on investments 616,337 (6,103)
---------- -----------
Net increase/(decrease) in net assets resulting from operations 235,310 (1,803,900)
---------- -----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income -- --
---------- -----------
Net realized capital gains -- --
---------- -----------
SHARES OF BENEFICIAL INTEREST:
Net proceeds from the sale of shares 553,983 899,461
Cost of shares repurchased (862,573) (1,399,872)
Shares issued in reinvestment of dividends -- --
---------- -----------
Net increase/(decrease) in net assets derived from shares
of beneficial interest transactions (308,590) (500,411)
---------- -----------
Total increase/(decrease) in net assets (73,280) (2,304,311)
NET ASSETS:
Beginning of year 8,694,079 10,998,390
---------- -----------
End of year $8,620,799 $ 8,694,079
========== ===========
The accompanying notes are an integral part of the financial statements.
9
THE NOAH FUND
FINANCIAL HIGHLIGHTS
- -----------------------------------------------------------------------------------------------------------------------
The table below sets forth financial data for a share of capital stock
outstanding throughout each year presented.
FOR THE
PERIOD ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2003 --------------------------------------------------------
(UNAUDITED) 2002 2001 2000 1999 1998
------------- --------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $10.89 $13.10 $22.49 $23.17 $17.31 $13.23
------ ------ ------ ------ ------ ------
INVESTMENT OPERATIONS:
Net investment income (loss)(a) (0.08) (0.21) (0.24) (0.46) (0.13) (0.10)
Net realized and unrealized
gain/(loss) on investments 0.45 (2.00) (9.15) 1.37 6.43 4.27
------ ------ ------ ------ ------ ------
Total from Investment Operations 0.37 (2.21) (9.39) 0.91 6.30 4.17
------ ------ ------ ------ ------ ------
DISTRIBUTIONS:
From net investment income 0.00 0.00 0.00 0.00 0.00 0.00
From realized capital gains 0.00 0.00 0.00 (1.59) (0.44) (0.09)
------ ------ ------ ------ ------ ------
Total distributions 0.00 0.00 0.00 (1.59) (0.44) (0.09)
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF PERIOD $11.26 $10.89 $13.10 $22.49 $23.17 $17.31
====== ====== ====== ====== ====== ======
TOTAL RETURN 3.40% (16.87%) (41.75%) 3.98% 37.06% 31.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $8,621 $8,694 $10,998 $18,522 $6,472 $2,590
Ratio of expenses to average
net assets:
before reimbursement 2.75%* 2.51% 2.67%(b) 2.20% 2.72% 4.73%
net of reimbursement 2.20%* 2.20% 2.20%(b) 2.20% 2.15% 1.75%
Ratio of net investment income
(loss) to average net assets:
before reimbursement (1.99)%* (1.95)% (1.97)% (1.68)% (2.13)% (3.85)%
net of reimbursement (1.44)%* (1.64)% (1.50)% (1.68)% (1.56)% (0.86)%
Portfolio Turnover Rate 76.16% 186.07% 191.81% 49.76% 81.53% 66.49%
(a) Net investment loss per share is calculated using ending balances prior to
the consideration of adjustments for permanent book and tax differences.
(b) Ratio excludes certain expenses not subject to the expense limitation
pursuant to the voluntary agreement with management. If such expenses had
been included, the ratios would have been 2.79% and 2.32%, respectively.
*Annualized
The accompanying notes are an integral part of the financial statements.
10
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
The NOAH FUND (the "Fund") was organized as a series of The NOAH Investment
Group, Inc. (the "Company") incorporated under the laws of the state of Maryland
on December 16, 1992. The Company is registered as a no-load, open-end
diversified management investment company under the Investment Company Act of
1940 (the "1940 Act"). The primary investment objective of the Fund is to seek
capital appreciation consistent with the preservation of capital, as adjusted
for inflation, and current income. The Fund will not invest in and may not
acquire the securities of businesses that are engaged, directly or through
subsidiaries, in the alcoholic beverage, tobacco, pornographic and gambling
industries or companies in the business of aborting life before birth.
The Fund became effective with the Securities and Exchange Commission (the
"SEC") on May 10, 1996 and commenced operations on May 17, 1996.
The following is a summary of significant accounting policies consistently
followed by the Fund.
a) Investment Valuation--Equity securities listed on a securities exchange are
valued at the last quoted sales price on the day of the valuation. Price
information on listed stocks is taken from the exchange where the security is
primarily traded. Securities that are listed on an exchange but which are not
traded on the valuation date are valued at the most recent bid prices. Unlisted
securities for which market quotations are readily available are valued at the
latest quoted bid price. Other assets and securities for which no quotations are
readily available are valued at fair value as determined in good faith by the
Investment Manager under supervision of the Board of Directors. Short-term
instruments (those with remaining maturities of 60 days or less) are valued at
amortized cost, which approximates market.
b) Federal Income Taxes--No provision for federal income taxes has been made
since the Fund has complied, and will continue to comply, with the provisions of
the Internal Revenue Code applicable to regulated investment companies and
distribute substantially all of its net investment income and net realized
capital gains so as to relieve the Fund from all federal income taxes.
c) Distributions to Shareholders--Dividends from net investment income and
distributions from net realized capital gains, if any, will be declared and paid
at least annually. Income and capital gains distributions are determined in
accordance with income tax regulations that may differ from generally accepted
accounting principles. The Fund's primary financial reporting and tax difference
relates to the differing treatment for the amortization of deferred organization
expenses. Permanent financial reporting and tax differences are reclassified to
additional capital paid-in.
d) Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and 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 revenues and expenses during the
reporting period. Actual results could differ from those estimates.
11
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
e) Other--Investment and shareholder transactions are recorded on trade date.
The Fund determines the gain or loss realized from the investment transactions
utilizing an identified cost basis. Dividend income is recognized on the
ex-dividend date or as soon as information is available to the Fund, and
interest income is recognized on an accrual basis.
f) Reclassifications - In accordance with SOP 93-2, the Fund has recorded a
reclassification in the capital accounts. As of October 31, 2002, the Fund
recorded permanent book/tax differences of $169,919 from net investment loss to
Paid-in capital. This reclassification has no impact on the net asset value of
the Fund and is designed generally to present undistributed income and net
realized gains on a tax basis, which is considered to be more informative to
shareholders.
2. ADVISORY FEE AND OTHER RELATED TRANSACTIONS
The Fund has entered into a Management Agreement with Polestar Management
Company (the "Manager"). Pursuant to the Management Agreement, the Manager is
responsible for the day-to-day business affairs, including the review and
supervision of the Fund investment program and for administrative services. For
its services to the Fund, the Manager receives an annual fee, payable monthly,
calculated at an annual rate of 1.00% of the Fund's average daily net assets.
The Manager voluntarily agreed to reimburse its management fee and other
expenses to the extent that the total operating expenses of the Fund (exclusive
of interest, taxes, brokerage commissions and other costs incurred in connection
with the purchase or sale of portfolio securities, and extraordinary items)
exceed the annual rate of 2.20% of the average net assets of the Fund. This
voluntary reimbursement may be terminated upon approval of the Board of
Directors. For the period ended April 30, 2003, Polestar Management Company
earned advisory fees of $42,330 and waived $23,246.
The Manager has entered into a Sub-Advisory Agreement with Geewax, Terker &
Company (the "Sub-Advisor"). The Sub-Advisor is responsible for the day-to-day
recommendations regarding the investment and reinvestment of the Fund's net
assets. Under the terms of the Sub-Advisory Agreement, the Manager compensates
the Sub-Advisor a fee of $1.00 per annum until the average net assets of the
Fund exceed $20 million. Upon reaching that level, the Sub-Advisor will receive
a monthly fee at the annual rate of 0.75% of the average daily net assets in
excess of $20 million to $50 million; 0.50% of such assets in excess of $50
million to $100 million; and 0.35% of such assets in excess of $100 million.
Effective December 28, 2001 CITCO-Quaker Fund Services, Inc. (the
"ADMINISTRATOR") (the "TRANSFER AGENT") replaced American Data Services, Inc. as
the Administrator and Transfer Agent for the Fund. The Administrator provides
administrative services to and is generally responsible for the overall
management and day-to-day operations of each Fund pursuant to an accounting and
administrative agreement with the Trust. The Transfer Agent maintains the
records of each shareholder's account, answers shareholder inquiries concerning
accounts, processes purchases and redemptions of Fund shares, acts as dividend
and distribution disbursing agent, and performs other shareholder servicing
functions. As compensation for its services, the Administrator receives a fee at
the annual rate of 0.40% of the aggregate of the FUND'S first $100 million of
average daily net assets, 0.30% of the next $100 million of average daily net
assets, 0.25% of the next $100 million of average daily net assets, 0.20% of the
next $200 million and 0.15% of the net assets in excess of $500 million.
12
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
Effective December 28, 2001, Quaker Securities, Inc. (the "DISTRIBUTOR")
replaced AmeriMutual Funds Distributor, Inc. as distributor for the Fund.
The Fund has adopted a distribution plan (the "Distribution Plan"), pursuant to
which the Fund may incur distribution expenses of up to 0.25% per annum of the
Fund's average daily net assets. The Distribution Plan provides that the Fund
may finance activities which are primarily intended to result in the sale of the
Fund's shares, including but not limited to, advertising, printing of
prospectuses and financial reports for other than existing shareholders,
preparation and distribution of advertising materials and sales literature, and
payments to dealers and shareholder servicing agents. For the period ended April
30, 2003, the Fund incurred $10,582 in distribution fees pursuant to the
Distribution Plan. Certain directors and officers of the Fund are directors and
officers of the Manager.
3. CARRYOVERS
At October 31, 2002, the Fund had net capital loss carryforwards of
approximately $7,774,000 of which $766,000 expires in 2008, $5,437,000 expires
in 2009, and $1,568,160 expires in 2010.
4. CAPITAL SHARE TRANsACTIONS
Transactions in shares of the Fund were as follows:
PERIOD ENDED YEAR ENDED
APRIL 30, 2003 OCTOBER 31, 2002
-------------- ----------------
Shares sold 51,021 71,640
Shares issued to holders in
reinvestment of dividends -- --
Shares redeemed (83,456) (113,195)
------- --------
Net increase (decrease) (32,435) (41,555)
======= =======
5. INVESTMENT TRANSACTIONS
For the period ended April 30, 2003, purchases and sales of investment
securities, excluding short-term investments, were as follows:
Purchases $6,452,321
Sales $6,818,852
At April 30, 2003, gross unrealized appreciation and depreciation of investments
for tax purposes were as follows:
Appreciation $ 694,586
Depreciation (476,002)
--------
Net Depreciation on investments $ 218,584
=========
At April 30, 2003, the cost of investments for federal income tax purposes was
$8,376,093.
13
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
APRIL 30, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
6. DISTRIBUTIONS TO SHAREHOLDERS
Income and long-term capital gain distributions are determined in accordance
with Federal income tax regulations, which may differ from accounting principles
generally accepted in the United States.
The tax character of distributions paid during the fiscal years 2003 and 2002
was as follows:
DISTRIBUTIONS PAID FROM: 2003 2002
------ ------
ORDINARY INCOME $ -- $ --
LONG-TERM CAPITAL GAIN -- --
------ ------
$ -- $ --
------ ------
AS OF OCTOBER 31, 2002, THE COMPONENTS OF DISTRIBUTABLE EARNINGS ON A TAX BASIS
WERE AS FOLLOWS:
VALUE
------
UNDISTRIBUTED ORDINARY INCOME $ --
UNDISTRIBUTED LONG-TERM CAPITAL GAIN --
UNREALIZED APPRECIATION --
14
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2003 (UNAUDITED)
7. TRUSTEE INFORMATION
- ------------------------------------------------------------------------------------------------------------------------------------
POSITION(S) TERM OF OFFICE NUMBER OF OTHER
NAME, ADDRESS & AGE HELD WITH & LENGTH OF PRINCIPAL OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS
THE FUND TIME SERVED DURING PAST 5 YEARS OVERSEEN HELD
- ------------------------------------------------------------------------------------------------------------------------------------
*William L. Van Alen, Director Each Director Mr. Van Alen is an attorney 6 USA
Esq. President, serves for an engaged in the private practice Technolo-
975 Delchester Road Treasurer indefinite term. of law since 1962. He is also gies, Inc.
Newtown, PA 19382 Mr. Van Alen President, Director and Chairman
Age 70 has served of the Board of Polestar
since 1996 Management Company, the
Fund's Advisor. He is also
President of Cornerstone
Entertainment, Inc., a company
engaged in the film and
entertainment industry.
- ------------------------------------------------------------------------------------------------------------------------------------
DIRECTORS WHO ARE NOT INTERESTED PERSONS OF THE COMPANY
- ------------------------------------------------------------------------------------------------------------------------------------
POSITION(S) TERM OF OFFICE NUMBER OF OTHER
NAME, ADDRESS & AGE HELD WITH & LENGTH OF PRINCIPAL OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS
THE FUND TIME SERVED DURING PAST 5 YEARS OVERSEEN HELD
- ------------------------------------------------------------------------------------------------------------------------------------
Dr. Forest H. Anthony, Director Each Director Dr. Anthony has been Vice 6 None
MD serves for an President of Protarga, Inc.,
1426 Fairview Road indefinite term. a pharmaceutical company,
Villanova, PA 19085 Dr. Anthony from June 1998 to the present;
Age 52 has served was the Director of Science
since 1996. of the University City Science
Center, a technology company,
from September 1997 to June
1998; was President and Chief
Executive Officer of Avid
Corporation, a pharmaceutical
company, from January 1991 to
September 1997; was a member
of the Board of Directors of the
Biotechnology Industry Organiza-
tion, a trade association, from 1993
to 1997; and has been Chairman
of the Board of Trustees of The
American Academy, a nonprofit
organization, which is a school for
grades kindergarten through twelfth
grade.
- ------------------------------------------------------------------------------------------------------------------------------------
15
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2003 (UNAUDITED)
7. TRUSTEE INFORMATION (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
POSITION(S) TERM OF OFFICE NUMBER OF OTHER
NAME, ADDRESS & AGE HELD WITH & LENGTH OF PRINCIPAL OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS
THE FUND TIME SERVED DURING PAST 5 YEARS OVERSEEN HELD
- ------------------------------------------------------------------------------------------------------------------------------------
Mr. Donald D. Director Each Director Mr. Kennedy graduated from 6 None
Kennedy, Jr., Esq. serves for an Princeton in 1953 and Penn
6915 Green Tree Drive indefinite term. LLB in 1960. He retired in
Naples, FL 34108 Mr. Kennedy 1992 as an Attorney and
Age 73 has served former General Counsel and
since 1998. Chairman of the Board of
National Liberty Insurance
Company. Since then, he has
been president and members of
various institutions, both
charitable and non-profit.
He joined the NOAH FUND
board in 1998.
- ------------------------------------------------------------------------------------------------------------------------------------
Mr. Roger J. Knake Director Each Director Mr. Knake has been 6 None
615 Mountain View serves for an President of MCX, Inc.
Road indefinite term. (formerly known as XITEL,
Berwyn, PA 19312 Mr. Knake has Inc.) from June 1983 to the
Age 63 served since present. MCX, Inc. is a
1996. computer software
consultant company.
- ------------------------------------------------------------------------------------------------------------------------------------
Mr. Martin V. Miller, Director Each Director Mr. Miller was engaged in 6 None
Esq. serves for an the practice of securities
344 Venetian Drive, #2 indefinite term. law during the period from
Delray Beach, FL 33483 Mr. Miller has 1959 until 2000. During that
Age 75 served since period of time, he was
2000. employed by the U.S.
Securities and Exchange
Commission until 1968, as
a partner in the law firm
Stradley, Ronon, Stevens
and Young, LLP until 1983
and as a sole practitioner
until his retirement in 2000.
- ------------------------------------------------------------------------------------------------------------------------------------
16
THE NOAH FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 2003 (UNAUDITED)
7. TRUSTEE INFORMATION (CONTINUED)
- ------------------------------------------------------------------------------------------------------------------------------------
POSITION(S) TERM OF OFFICE NUMBER OF OTHER
NAME, ADDRESS & AGE HELD WITH & LENGTH OF PRINCIPAL OCCUPATION(S) PORTFOLIOS DIRECTORSHIPS
THE FUND TIME SERVED DURING PAST 5 YEARS OVERSEEN HELD
- ------------------------------------------------------------------------------------------------------------------------------------
Mr. George R. Director Each Director Chairman, CEO and Director 6 USA
Jensen, Jr. serves for an of USA Technologies, Inc., Technolo-
200 Plant Avenue indefinite term. a technology design and gies Inc.
Wayne, PA 19087 Mr. Jensen manufacturing company,
Age 47 has served since 1992. Executive
since 1996. officer of American Film
Technologies from 1985
until 1992. CEO and
President of International
Film Productions, Inc. from
1979 to 1985. Named
1989 Entrepreneur of the
Year in the high technology
category for Philadelphia
by Ernst & Young and Inc.
Magazine. Mr. Jensen received
his Bachelor of Science Degree
from the University of Tennessee
and is a graduate of the
Advanced Management Program
at the Wharton School of the
University of Pennsylvania.
- ------------------------------------------------------------------------------------------------------------------------------------
*INTERESTED PERSONS
Mr. William L. Van Alen, Jr. is an interested person by virtue of being an
officer and director of The NOAH Investment Group, Inc. and an officer and
director of Polestar Management Company.
17
Investment and Management Services
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