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OMB APPROVAL
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OMB Number: 3235-0570
Expires: Nov. 30, 2005
Estimated average burden
hours per response: 5.0
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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 811-55408
-------------------------
Ameritor Security Trust
------------------------------------------------------------
(Exact name of registrant as specified in charter)
4400 MacArthur Blvd NW, Suite 301, Washington, DC 20007
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(Address of principal executive offices) (Zip code)
Ameritor Financial Corporation
4400 MacArthur Blvd NW, Suite 301, Washington, DC 20007
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(Name and address of agent for service)
Registrant's telephone number, including area code: 202-625-6000
------------------
Date of fiscal year end: 06/30/2003
----------------------
Date of reporting period: 12/31/2003
----------------------
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. ss. 3507.
March 4, 2004
Dear Shareholder:
The Ameritor Security Trust has experienced a positive performance during the
past six months. This was a reflection of the recent general upward trend of the
stock market. The Trust has thus been able to slightly increase its share value
after expenses and the investments have essentially kept pace with the sizable
advances of the indexes.
Most managers, including Ameritor, are expecting the economy, and the market, to
continue a moderate advance throughout the next six months. Carole S. Kinney,
who has had considerable market experience as a broker and trust manager, has
assumed the portfolio management with Paul Dietrich of Nye, Parnell & Emerson
continuing as a consultant to the advisor. We will make every effort to continue
to increase the value of the portfolio and Trust shares.
Sincerely,
/s/ Jerome Kinney
Jerome Kinney
President
AMERITOR SECURITY TRUST FUND
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 2003 (UNAUDITED)
- ----------------------------------------------------------------------------------------------
VALUE
SHARES (NOTE 1)
------ --------
COMMON STOCK 78.99%
Banks 2.45%
First Bancorp 900 $ 35,595
----------
Consumer Products 4.80%
CSS Industries Inc. 2,247 69,679
----------
Diversified Minerals 2.10%
Northern Dynasty (a) 7,000 30,450
----------
E-Commerce 3.05%
1800 Flowers (a) 4,000 44,240
----------
Electronics 3.11%
Artisan Components (a) 2,200 45,100
----------
Entertainment 2.98%
Take 2 Ineractive (a) 1,500 43,215
----------
Financial Services 11.32%
Advanta Corp. 4,500 57,240
Indymac Bancorp Inc. 1,250 37,238
World Acceptance (a) 3,500 69,685
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TOTAL FINANCIAL SERVICES 164,163
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Human Resources 2.71%
Labor Ready, Inc. (A) 9,000 39,300
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Insurance 7.48%
Zenith National Insurance Corp. 1,700 55,335
Midland Company 2,250 53,145
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TOTAL INSURANCE 108,480
----------
Manufacturing 8.14%
Ashworth, Inc. (a) 5,000 40,350
Lydall, Inc. (a) 3,750 38,213
Russell Corp. 2,250 39,510
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TOTAL MANUFACTURING 118,073
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Medical Services 4.31%
Microtek Medical Holdings (a) 12,500 62,500
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Oil 3.08%
Superior Energy Services (a) 4,750 44,650
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Retail 13.30%
Charlotte Russe (a) 3,225 44,699
Gaylans Trading Co. (a) 3,250 39,130
Shoe Carnival (a) 3,500 62,300
Total Entertainment (a) 3,875 46,810
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TOTAL RETAIL 192,939
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 1
AMERITOR SECURITY TRUST FUND
PORTFOLIO OF INVESTMENTS - (CONTINUED)
DECEMBER 31, 2003 (UNAUDITED)
- ----------------------------------------------------------------------------------------------
VALUE
SHARES (NOTE 1)
------ --------
Telecommunications 6.80%
Symmetricom (a) 6,500 47,320
Audiovox Corp (a) 4,000 51,360
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TOTAL TELECOMMUNICATIONS 98,680
----------
Web Portals 3.36%
Sonic Wall, Inc. Com (a) 6,250 48,750
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TOTAL COMMON STOCK (COST $997,436) 1,145,814
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VALUE
PAR (NOTE 1)
--- --------
INVESTMENT COMPANY 21.01%
Evergreen Money Market Treasury Institutional -
Money Market Fund Institutional Shares (COST $304,826) $304,826 304,826
----------
TOTAL PORTFOLIO OF INVESTMENTS (COST $1,302,262) $1,450,640
==========
(A) NON-INCOME PRODUCING SECURITY.
- --------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 2
AMERITOR SECURITY TRUST FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
ASSETS
Investment at value (Cost $1,302,262) (NOTE 1) $ 1,450,640
Interest receivable 350
-----------
TOTAL ASSETS 1,450,990
-----------
LIABILITIES
Accrued expenses $ 64,452
Investment advisory fees payable (NOTE 2) 986
-----------
TOTAL LIABILITIES 65,438
-----------
NET ASSETS $ 1,385,552
===========
NET ASSETS CONSIST OF:
Paid-in capital $ 4,211,608
Unrealized appreciation of investments 148,378
Accumulated net realized losses from security transactions (2,850,580)
Accumulated net investment loss (123,854)
-----------
$ 1,385,552
===========
NET ASSET VALUE, offering price and redemption price per
share ($1,385,552 divided by 2,964,230 shares of no par
value trust shares) $.47
====
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 3
AMERITOR SECURITY TRUST FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 2003 (UNAUDITED)
- ----------------------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends $ 2,675
Interest 1,646
-------
TOTAL INCOME $ 4,321
---------
EXPENSES
Professional fees 45,291
Fund administrative fees (NOTE 2) 26,422
Shareholder servicing and recordkeeping fee (NOTE 2) 14,774
Investment advisory fee (NOTE 2) 6,882
Accounting service fees 6,996
Insurance 3,759
Custodian fees 2,036
Printing 4,784
Miscellaneous 10,718
Trustees' fees and expenses (NOTE 2) 6,513
-------
TOTAL EXPENSES 128,175
---------
NET INVESTMENT LOSS (123,854)
---------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS (NOTE 1)
Net realized gain from investment transactions 197,210
Change in unrealized depreciation of investments (8,776)
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NET GAIN ON INVESTMENTS 188,434
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 64,580
=========
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 4
AMERITOR SECURITY TRUST FUND
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS ENDED DECEMBER 31, 2003 (UNAUDITED) AND YEAR ENDED JUNE 30, 2003
- ----------------------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
DECEMBER 31, JUNE 30,
2003 2003
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment loss $ (123,854) $ (182,709)
Net realized gain (loss) from investment transactions 197,210 (169,495)
Change in unrealized appreciation (depreciation) of investments (8,776) 201,265
------------ ------------
Net increase (decrease) in net assets resulting from operations 64,580 (150,939)
DECREASE IN NET ASSETS FROM TRUST SHARE TRANSACTIONS (NOTE 3) (19,044) (26,414)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS 45,536 (177,353)
NET ASSETS
Beginning of year 1,340,016 1,517,369
------------ ------------
END OF YEAR $ 1,385,552 $ 1,340,016
============ ============
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 5
AMERITOR SECURITY TRUST FUND
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
- -------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEARS ENDED JUNE 30,
DECEMBER 31, ----------------------------------------------------------------
2003 (UNAUDITED) 2003 2002 2001 2000 1999
--------------- -------- -------- -------- -------- --------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of year $ 0.45 $ 0.49 $ 0.70 $ 1.71 $ 1.35 $ 0.93
-------- -------- -------- -------- -------- --------
Net investment loss (.04) (0.06) (0.07) (0.07) (0.19) (0.22)
Capital gain distributions -- -- -- (0.08) -- --
Net realized and unrealized gain
(loss) on investments 0.06 (0.02) 0.14 (0.86) 0.55 0.64
-------- -------- -------- -------- -------- --------
Total from investment operations 0.02 (0.04) (0.21) (1.01) 0.36 0.42
-------- -------- -------- -------- -------- --------
Net asset value, end of year $ 0.47 $ 0.45 $ 0.49 $ 0.70 $ 1.71 $ 1.35
======== ======== ======== ======== ======== ========
RATIO/SUPPLEMENTAL DATA
Total return 4.44% (8.16)% (30.00)% (56.10)% 26.67% 46.33%
Ratio of expenses to average net assets 18.72%* 14.78% 11.79% 6.08% 6.93% 7.24%
Ratio of net investment loss
to average net assets (18.09)%* (14.14)% (11.14)% (5.63)% (6.61)% (6.76)%
Portfolio turnover 89% 214% 293% 22% 91% 0%
Net assets, end of year (000's) $ 1,386 $ 1,340 $ 1,517 $ 2,426 $ 6,185 $ 5,169
* ANNUALIZED
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 6
AMERITOR SECURITY TRUST FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
(1) ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Ameritor Security Trust Fund, (the "FUND"), is registered under the
Investment Company Act of 1940, as amended, as a non-diversified, open-end
investment company. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements.
A. SECURITY VALUATION - The Fund's investments in securities are carried
at value. Securities listed on an exchange or quoted on a national
market system are valued at the last sales price as of 4:00 p.m. New
York time on the day of valuation. Other securities traded in
over-the-counter market and listed securities for which no sale was
reported on that date are valued at the most recent bid price.
Securities for which market quotations are not readily available, if
any, are valued by using an independent pricing service or by following
procedures approved by the Board of Trustees. Short-term investments
are valued at cost which approximates value.
B. INCOME TAXES - The Fund is subject to income taxes in years when it
does not qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code. The Fund accounts for income taxes by
using the liability method, whereby deferred tax assets and liabilities
arise from the tax effect of temporary differences between the
financial statement and tax basis of assets and liabilities, measured
using presently enacted tax rates. If it is more likely than not that
some portion or all of a deferred tax asset will not be realized, a
valuation allowance is recognized. At June 30, 2003, for Federal income
tax purposes, the Fund had a capital loss carryforward of $3,047,790 of
which $2,203,964 expires in 2010 and $843,826 expires in 2011 to offset
future realized gains.
C. DISTRIBUTIONS TO SHAREHOLDERS - No distributions were paid in 2003. As
of June 30, 2003, the components of distributable earnings (accumulated
loss) on a tax basis of the Fund were as follows:
Capital loss carryforward $(3,047,790)
Unrealized appreciation 157,154
-----------
$(2,890,636)
===========
D. INVESTMENT TRANSACTIONS - Investment transactions are recorded on the
trade date. Realized gains and losses are determined by using the
specific identification cost method. Interest income is recorded daily
on the accrual basis. Dividend income is recorded on the ex-dividend
date.
E. USE OF ESTIMATES - The preparation of financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions
that affect the amount of assets, liabilities, expenses and revenues
reported in the financial statements. Actual results could differ from
those estimates.
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THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 7
AMERITOR SECURITY TRUST FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
(2) INVESTMENT ADVISORY FEE AND OTHER RELATED PARTY TRANSACTIONS
The investment advisory agreement with Ameritor Financial Corporation
("AFC"), an affiliate, provides for a fee based on 1% of the first
$35,000,000 of the average daily net assets of the Fund, 7/8 of 1% on the
next $35,000,000 and 3/4 of 1% on all sums in excess thereof. In addition
to the investment advisory fee, AFC received fees from the Fund for the
performance of delegated services, (dividend disbursing agent and transfer
agent) as defined in the Trust Indenture, as amended. The fee for such
services was computed on the basis of the number of shareholder accounts
calculated as of the last business day of each month at an annual rate of
$20.00 per account.
The administrative agreement with AFC provides administrative services to
and is generally responsible for the overall management and day-to-day
operations of the Fund. As compensation for these services, AFC receives a
fee at the annual rate of 0.20% of the Fund's average daily net assets.
The contract also provides that the aggregate fees for the aforementioned
administration, accounting and recordkeeping services shall not be less
than $4,500 per month.
Certain officers and trustees of the Fund are "AFFILIATED PERSONS" of the
Investment Adviser, as defined by the Investment Company Act of 1940.
(3) TRUST SHARES
The Trust Indenture does not specify a limit to the number of shares which
may be issued. Transactions in trust shares were as follows:
SIX MONTHS ENDED
DECEMBER 31, 2003 FOR THE YEAR ENDED
(UNAUDITED) JUNE 30, 2002
------------------- --------------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
Shares redeemed (42,470) $(19,044) (62,702) $(26,414)
------- -------- ------- --------
Net decrease (42,470) $(19,044) (62,702) $(26,414)
------- -------- ------- --------
Shares outstanding
Beginning of year 3,006,700 3,069,402
--------- ---------
End of year 2,964,230 3,006,700
--------- ---------
(4) PURCHASE AND SALE OF SECURITIES
During the six months ended December 31, 2003, purchases and proceeds from
sales of investment securities were $993,436 and $1,185,316, respectively.
Cost of securities for income tax purposes was $1,302,262 at December 31,
2003. Net unrealized appreciation of investments aggregated $148,378,
which relates to gross unrealized appreciation and gross unrealized
depreciation of $166,376 and $17,998, respectively.
- --------------------------------------------------------------------------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS. 8
AMERITOR SECURITY TRUST FUND
NOTES TO FINANCIAL STATEMENTS - (CONTINUED)
DECEMBER 31, 2003 (UNAUDITED)
- --------------------------------------------------------------------------------
(5) TRUSTEES AND OFFICERS (UNAUDITED)
The following table sets forth certain information concerning the Trustees
and officers of the Fund.
- -------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5) (6)
- -------------------------------------------------------------------------------------------------------------
Name Position(s) Term of Principal Number of Other
Address and Held with Office and Occupation(s) Portfolios in Directorships
Age Fund Length of During Past Fund Complex Held by
Time Served 5 Years Overseen by Trustee
Trustee
- -------------------------------------------------------------------------------------------------------------
NON-INTERESTED TRUSTEE
- -------------------------------------------------------------------------------------------------------------
Richard P. Ellison Non-Interested 4 Years President and 2 Potomac Group
1410 Coventry Lane Trustee Served Chief Executive Homes;
Alexandria, VA 22304 Term is Officer of Boat
Age 72 for Life Intervest America
Financial Corp.
- -------------------------------------------------------------------------------------------------------------
James I. Schwartz
1480 Pennfield Circle Non- 1 Year Retired President 2 None
#307 Interested Served Capital City
Silver Spring, MD Trustee Term is Savings & Loan
20906 for Life And
Age 76 Schwartz & Co.
- -------------------------------------------------------------------------------------------------------------
INTERESTED TRUSTEE AND OFFICERS
- -------------------------------------------------------------------------------------------------------------
Carole S. Kinney Trustee, 4 Years Chairman of the 2 None
8020 Thornley Court Secretary, served Board of
Bethesda, MD 20817 and Term is Ameritor
Age 57 Chairman for life Financial
of the Corporation
Fund Since 1998
- -------------------------------------------------------------------------------------------------------------
Jerome Kinney President 4 Years Founder and None
8020 Thornley Court served President,
Bethesda, MD 20817 Term=1 Jerome F. Kinney
Age 73 year Company
(builder);
President and
CEO,
Ameritor
Financial
Corporation
- -------------------------------------------------------------------------------------------------------------
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. [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.
AMERITOR FUNDS
Disclosure Controls and Procedures
Adopted Pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of
1934 and Rule 30a-3 Under the Investment Company Act of 1940
I. Introduction
Ameritor Security Trust and Ameritor Investment Fund (the "Funds"), hereby
establish these disclosure controls and procedures ("Disclosure Procedures")
pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934
("Exchange Act") and Rule 30a-3 under the Investment Company Act of 1940 (the
"1940 Act"). The Disclosure Procedures are designed to ensure that all
information that the Funds are required to disclose in their shareholder reports
(the "Reports") filed with the Securities and Exchange Commission ("SEC")
pursuant to Section 13(a) or Section 15(d) of the Exchange Act is recorded,
processed, summarized and reported within the time period specified in
applicable SEC rules and forms. The Disclosure Procedures also support the
certifications that the Funds' principal officers must sign and submit with each
Report filed with the SEC, and the required disclosures in the Reports about the
Funds' internal controls.
The overriding goals of these Disclosure Procedures are:
o To promote the timely accumulation and communication of information the
Funds are required to disclose in their Reports; and
o To promote reliable and accurate disclosure in the Reports.
II. Roles and Expectations of Fund Service Providers
The Funds rely on their service providers to perform substantially all
tasks related to the Funds' ongoing business operations, including preparing and
filing the Reports and preparing the information included in the Reports. The
Funds' strongest control for promoting timely and accurate disclosures,
therefore, is appropriate and reasonable oversight of their service providers.
Accordingly, the Funds encourage each service provider involved in the process
of preparing or filing a Report or preparing the information included in a
Report ("Service Provider") to adopt its own internal controls and procedures
governing, as applicable, the preparation and filing of Reports and the
recording, processing, generation and translation of information that it
provides to the Funds for inclusion in any Report ("Service Provider
Procedures").
In particular, the Funds expect each Service Provider to:
Provide Procedures - provide to the Funds' President a copy of its Service
Provider Procedures, if any;
Provide Amendments to Procedures - promptly provide to the Funds' President
a copy of any substantive changes or amendments to the Service Provider
Procedures;
Report Violations - promptly report to the Funds' President any material
violations of the Service Provider Procedures (and any corrective actions
taken);
Report Important Matters - promptly report to the Funds' President any
material misstatements or omissions or unfair presentations in any Report; any
suspected fraud relating to a Report; and any complaints about, or suspected or
perceived weaknesses, problems or breakdowns in, the Disclosure Procedures, the
Service Provider Procedures or any other internal controls related to the Funds,
a Report or Fund disclosure matters;
Create Due Diligence Files - create and maintain a due diligence file, and
other appropriate documentation and records for each Report; and
Submit Requested Information - submit on a timely basis information,
certifications or other documents related to a Report or Fund disclosure matters
as the Funds, through their President, may reasonably request.
III. Monitoring of Disclosure Controls
Roles and Responsibilities. The President is primarily responsible for the
proper functioning of the Disclosure Procedures and for evaluating the
Disclosure Procedures under Section V below. To discharge these broad
responsibilities, the President will communicate with and generally oversee the
Service Providers regarding Fund disclosure matters and matters relating to the
preparation and filing of Reports.
Oversight of and Coordination with Service Providers. The President will
coordinate with the Service Providers on an ongoing basis regarding the Funds'
disclosure obligations, the Disclosure Procedures and the Service Provider
Procedures.
Review of Service Provider Procedures. The President will ask each Service
Provider to provide a copy of its Service Provider Procedures, and any
substantive changes or amendments to the Procedures as they are adopted. The
President will initially and periodically thereafter review the Service Provider
Procedures and any substantive changes or amendments thereto.
IV. Material Misstatements/Omissions; Unfair Presentations; Fraud
If the President discovers or is informed about a suspected material
misstatement or omission, or an unfair presentation, in a Report, or suspected
fraud in relation to a Report, the President or his delegate will investigate
(or cause an appropriate Service Provider to investigate) the matter, focusing
on the effectiveness of applicable controls and procedures and consulting with
Service Providers or others as appropriate regarding corrective actions.
The President will prepare a report about any such investigations (and the
related findings and conclusions). The President will consider appropriate next
steps, such as investigating further or reporting the matter to the Audit
Committee.
V. Evaluating the Disclosure Procedures
Conducting the Evaluation. The President will evaluate, with the
participation of and input from, as applicable, the Service Providers, the Audit
Committee, and the Funds' independent auditor ("Outside Auditors"), the
effectiveness of the design and operation of these Disclosure Procedures and the
Service Provider Procedures. This evaluation must be completed within 90 days
before any Report is filed with the SEC.
Feedback on Controls. The Funds' President, in performing the functions of
a Chief Financial Officer, will ask the Audit Committee to alert the President
about any weaknesses, problems or complaints regarding financial internal
controls that it receives. The President will ask each Service Provider to give
notification of any weaknesses, problems or complaints regarding financial
internal controls that it receives.
Resolving Any Deficiencies in Controls. The President will promptly
investigate and resolve any suspected or perceived weaknesses, problems or
complaints in the design and operation of the financial internal controls, or
any suspected fraud in relation to a Report on internal controls. Appropriate
records will be created and maintained regarding the investigation and
resolution of any such matters.
The President will consider any deficiencies in the Disclosure Procedures,
and will determine the appropriate actions to take in order to resolve such
deficiencies. In making this determination, the President should consider
discussing these matters further with the Audit Committee, outside legal
counsel, and/or the Outside Auditors. At a minimum, however, the President will
disclose to the Audit Committee and the Outside Auditors:
Significant Deficiencies - any significant deficiencies in the design or
operation of the Disclosure Procedures (or those of Service Providers),
including any financial internal controls that adversely affect the Funds'
ability to record, process, summarize and report financial data, and identify
any material weakness in financial internal controls; and
Fraud - any fraud, whether or not material, that involves management, a
Service Provider or a Service Provider's employees who have a significant role
in the Funds' financial internal controls, as well as any material weakness
identified in the Funds' financial internal controls.
VI. Miscellaneous
Recordkeeping. The President will maintain appropriate records supporting
compliance with these Disclosure Procedures and records generated or received
pursuant to these Disclosure Procedures. Specifically, all substantive
determinations, judgments or actions taken in relation to these Disclosure
Procedures will be documented. All substantive documents created, distributed or
received in relation to these Disclosure Procedures will be maintained by the
President for the Funds' records.
Amendments. The President may amend these Disclosure Procedures from time
to time as appropriate. The President will report to the Board regarding any
substantive amendments to these Disclosure Procedures.
Use of Experts. The President may consult with outside legal counsel or any
other external experts as necessary or appropriate in furtherance of the goals
of the Disclosure Procedures.
Delegation. When these Disclosure Procedures require a particular person to
perform a task (other than actually signing the certification), it is understood
that the person may reasonably delegate that task to another appropriate party.
Adopted: September 2003
ITEM 10. EXHIBITS
(a) Not applicable at this time.
(b) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are
attached hereto as EX-99.CERT. Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 are attached hereto as EX-906CERT.
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) Ameritor Security Trust
- --------------------------------------------------------------------------------
By (Signature and Title)* /s/ Jerome Kinney, President and Treasurer
--------------------------------------------
Date March 1, 2004
----------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Jerome Kinney , President and Treasurer
--------------------------------------------
Date March 1, 2004
----------------------
* Print the name and title of each signing officer under his or her signature.