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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 811-3070
--------
Hilliard-Lyons Government Fund, Inc.
--------------------------------------------------------------
(Exact name of registrant as specified in charter)
P. O. Box 32760 , Louisville, Kentucky 40232-2760
------------------------------------------------------
(Address of principal executive offices) (Zip code)
Joseph C. Curry, Jr. William G. Strench
Hilliard-Lyons Government Fund, Inc. Frost Brown Todd LLC
P. O. Box 32760 400 West Market Street, 32/nd/ Floor
Louisville, Kentucky 40232-2760 Louisville, Kentucky 40202-3363
(Name and address of agents for service)
Registrant's telephone number, including area code: (502) 588-8602
--------------
Date of fiscal year end: August 31
---------
Date of reporting period: February 29, 2004
-----------------
ITEM 1. REPORTS TO STOCKHOLDERS.
The Semi-Annual Report to Stockholders follows.
March 22, 2004
Dear Shareholder:
We are pleased to present this report on the Hilliard-Lyons Government Fund,
Inc. ("HLGF" or the "Fund") for the six months ended February 29, 2004.
Record low interest rates continue to put pressure on money market fund assets.
2003 marked the second consecutive year of asset declines for taxable money
market funds. Prior to 2002, total money market fund assets had experienced
seven straight years of double-digit growth. Banks continue to compete with
money market funds for investor dollars. Money market funds pay dividends
earned from their investments while bank products can pay any rate set by the
bank.
Assets of the Fund declined only modestly during the six months. Net assets
declined $71 million to $1.5 billion at February 29, 2004. This compares to a
decrease of $60 million in the year ended August 31, 2003.
At the most recent meeting of the policymaking Federal Open Market Committee
held March 16, 2004, the Federal Reserve (the "Fed") left interest rates
unchanged which is what most if not all economists had expected. Markets react
to the language used in the Fed's statements as much as to actions taken by the
Fed. The Fed indicated it wouldn't change its policy in the near term. Some
economists had anticipated the Fed would give a more encouraging outlook on job
growth and the economy but the Fed changed its statement only slightly and
reinforced its stance on an accommodative monetary policy. The statement
appeared to offer a slightly more cautious view of the economic recovery. Most
economists now believe a rate increase won't occur any time soon and is highly
unlikely to occur before the presidential election.
Interest rates impact equity markets as well because of the effect on the cost
of corporate borrowing which in turn affects corporate profits. A rate increase
would increase the cost of corporate borrowing which would mean lower corporate
profits. Lower corporate profits generally mean lower equity prices. Higher
rates also make newly issued corporate debt in the form of bonds more
attractive and will cause some investors to switch out of stocks and into
bonds. Despite a seemingly mixed view of the economy overall, the major equity
markets, including the Dow Jones Industrial Average and the NASDAQ, have
attained positive returns so far in 2004.
With short term interest rates at a 45 year low, the Fund's investment adviser,
J.J.B. Hilliard, W.L. Lyons Inc. recognizes that these are difficult times for
shareholders. In light of these historically low rates, the Adviser voluntarily
agreed to waive a portion of its advisory fee beginning April 1, 2003. For the
period covered in this report, the six months from September 1, 2003 through
February 29, 2004, the Adviser waived $1.7 million of fees. The Fund's expense
ratio for the six months ended February 29, 2004 was .56% with the fee waiver
while it would have been .78% without the waiver. The full amount of the fee
waiver is passed on to shareholders in the dividends paid by the Fund. The
Adviser may discontinue or modify this voluntary waiver in the future at its
discretion.
In this time of historically low interest rates and economic uncertainty, the
Fund continues to offer its shareholders both a high degree of credit safety
and and the highest possible current income consistent with the preservation of
capital. The Fund also offers convenient features such as unlimited, free
check-writing. As shown on the Schedule of Investments that follows, at
February 29, 2004 the Fund was fully invested in high quality, short term U.S.
government agency securities. These securities offer a high degree of credit
safety with the added benefit of income that flows through to shareholders as
exempt from state income tax. Information on dividends paid by the Fund for the
calendar year 2003 was included with the Form 1099-Div sent by Hilliard Lyons
to all shareholders in January 2004. The full amount of dividends paid by HLGF
in calendar year 2003 were exempt from state income tax in all states.
We appreciate your investment in the Hilliard-Lyons Government Fund, Inc. and
we will continue to do our best to manage the Fund for the benefit of our
shareholders.
/s/ Joseph C. Curry, Jr. /s/ Dianna P. Wengler
JOSEPH C. CURRY, JR. DIANNA P. WENGLER
President Vice President and
Treasurer
HILLIARD-LYONS GOVERNMENT FUND, INC.
SCHEDULE OF INVESTMENTS
(UNAUDITED)
February 29, 2004
Principal Purchase Maturity
Amount Yield Date Value
------ -------- -------- --------------
U.S. GOVERNMENT AGENCY OBLIGATIONS*--100.1%
$23,508,000 Federal Home Loan Bank Discount Note 0.923% 03/01/04 $ 23,508,000
25,000,000 Federal Home Loan Bank Discount Note 0.954 03/01/04 25,000,000
25,000,000 Federal Home Loan Bank Discount Note 0.954 03/02/04 24,999,347
29,000,000 Federal Home Loan Bank Discount Note 1.067 03/03/04 28,998,308
19,500,000 Federal Home Loan Bank Discount Note 1.098 03/04/04 19,498,253
35,000,000 Federal Home Loan Bank Discount Note 1.088 03/05/04 34,995,858
33,000,000 Federal Home Loan Bank Discount Note 0.964 03/08/04 32,993,904
30,000,000 Federal Home Loan Bank Discount Note 0.964 03/09/04 29,993,667
23,000,000 Federal Home Loan Bank Discount Note 1.059 03/10/04 22,994,020
15,000,000 Federal Home Loan Bank Discount Note 1.083 03/12/04 14,995,142
15,000,000 Federal Home Loan Bank Discount Note 1.083 03/12/04 14,995,142
25,000,000 Federal Home Loan Bank Discount Note 0.996 03/15/04 24,990,472
30,000,000 Federal Home Loan Bank Discount Note 0.990 03/16/04 29,987,750
34,000,000 Federal Home Loan Bank Discount Note 1.093 03/17/04 33,983,831
35,000,000 Federal Home Loan Bank Discount Note 0.996 03/18/04 34,983,803
17,000,000 Federal Home Loan Bank Discount Note 1.098 03/19/04 11,993,760
12,000,000 Federal Home Loan Bank Discount Note 1.057 03/19/04 16,990,863
28,000,000 Federal Home Loan Bank Discount Note 1.008 03/22/04 27,983,830
37,000,000 Federal Home Loan Bank Discount Note 1.092 03/24/04 36,974,706
10,000,000 Federal Home Loan Bank Discount Note 0.996 03/26/04 9,993,194
20,312,000 Federal Home Loan Bank Discount Note 1.073 03/26/04 20,297,189
27,000,000 Federal Home Loan Bank Discount Note 1.070 03/31/04 26,976,375
22,000,000 Federal Home Loan Bank Discount Note 1.078 03/31/04 21,980,658
40,000,000 Federal Home Loan Bank Discount Note 0.988 04/01/04 39,966,589
4,000,000 Federal Home Loan Bank Discount Note 1.083 04/02/04 3,996,231
32,000,000 Federal Home Loan Bank Discount Note 1.024 04/02/04 31,971,413
20,000,000 Federal Home Loan Bank Discount Note 1.004 04/05/04 19,980,847
40,000,000 Federal Home Loan Bank Discount Note 1.134 04/07/04 39,954,367
25,000,000 Federal Home Loan Bank Discount Note 0.998 04/08/04 24,974,139
40,000,000 Federal Home Loan Bank Discount Note 1.134 04/12/04 39,948,200
30,000,000 Federal Home Loan Bank Discount Note 1.150 04/14/04 29,958,750
22,000,000 Federal Home Loan Bank Discount Note 1.017 04/15/04 21,972,500
19,261,000 Federal Home Loan Bank Discount Note 1.145 04/16/04 19,233,337
30,000,000 Federal Home Loan Bank Discount Note 1.032 04/20/04 29,957,792
5,388,000 Federal Home Loan Bank Discount Note 1.113 04/21/04 5,379,680
19,000,000 Federal Home Loan Bank Discount Note 1.011 04/21/04 18,973,218
8,000,000 Federal Home Loan Bank Discount Note 1.113 04/23/04 7,987,162
34,000,000 Federal Home Loan Bank Discount Note 1.149 04/23/04 33,943,688
25,000,000 Federal Home Loan Bank Discount Note 1.154 04/28/04 24,954,526
30,000,000 Federal Home Loan Bank Discount Note 1.034 04/30/04 29,949,250
38,000,000 Federal Home Loan Bank Discount Note 1.029 05/05/04 37,930,703
36,000,000 Federal Home Loan Bank Discount Note 1.032 05/07/04 35,931,995
44,000,000 Federal Home Loan Bank Discount Note 1.017 05/12/04 43,912,176
20,000,000 Federal Home Loan Bank Discount Note 1.016 05/14/04 19,958,889
2
HILLIARD-LYONS GOVERNMENT FUND, INC.
SCHEDULE OF INVESTMENTS
(UNAUDITED)
February 29, 2004
Principal Purchase Maturity
Amount Yield Date Value
------ -------- -------- --------------
$40,000,000 Federal Home Loan Bank Discount Note 1.009% 05/19/04 $ 39,913,100
30,000,000 Federal Home Loan Bank Discount Note 1.009 05/21/04 29,933,175
25,000,000 Federal Home Loan Bank Discount Note 1.009 05/26/04 24,940,875
24,285,000 Federal Home Loan Bank Discount Note 1.035 06/07/04 24,217,899
35,000,000 Federal Home Loan Bank Discount Note 1.049 06/09/04 34,899,861
22,000,000 Federal Home Loan Bank Discount Note 1.047 06/17/04 21,932,284
31,000,000 Federal Home Loan Bank Discount Note 1.062 07/07/04 30,885,369
34,000,000 Federal Home Loan Bank Discount Note 1.067 07/09/04 33,871,697
39,000,000 Federal Home Loan Bank Discount Note 1.028 07/14/04 38,852,288
38,244,000 Federal Home Loan Bank Discount Note 1.041 07/16/04 38,095,550
21,568,000 Federal Home Loan Bank Discount Note 1.041 07/23/04 21,480,003
23,000,000 Federal Home Loan Bank Discount Note 1.052 08/04/04 22,897,343
16,000,000 Federal Home Loan Bank Discount Note 1.052 08/11/04 15,925,382
28,000,000 Federal Home Loan Bank Discount Note 1.070 08/18/04 27,861,167
--------------
TOTAL U. S. GOVERNMENT AGENCY OBLIGATIONS
(at amortized cost--$1,536,649,517) 1,536,649,517
--------------
TOTAL INVESTMENTS (100.1%) (cost--$1,536,649,517**) $1,536,649,517
==============
* Obligations of U.S. Government sponsored entities are not issued nor
guaranteed by the United States Treasury.
** Also represents cost for federal income tax purposes.
The percentage shown for each investment category is the total value of that
category as a percentage of the total net assets of the Fund.
3
HILLIARD-LYONS GOVERNMENT FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
(UNAUDITED)
February 29, 2004
ASSETS
Investments, at value (at amortized cost--$1,536,649,517).. $1,536,649,517
Cash....................................................... 1,175
Prepaid expenses........................................... 116,292
--------------
TOTAL ASSETS.......................................... 1,536,766,984
--------------
LIABILITIES
Dividends payable.......................................... 297,704
Due to affiliates--Note B
Investment advisory fee.................................. 78,467
Shareholder servicing fee................................ 308,903
Administrative fee....................................... 222,410
Accrued directors fees..................................... 12,495
Accrued expenses........................................... 78,981
--------------
TOTAL LIABILITIES..................................... 998,960
--------------
NET ASSETS.................................................. $1,535,768,024
==============
Shares of beneficial interest outstanding.................. 1,535,768,024
==============
Net asset value per share (net assets / shares of
beneficial interest outstanding)......................... $1.00
=====
HILLIARD-LYONS GOVERNMENT FUND, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)
For the six months ended February 29, 2004
INVESTMENT INCOME
Interest income............................................ $ 8,434,537
------------
EXPENSES
Investment advisory fee--Note B............................ 2,295,188
Shareholder servicing fee--Note B.......................... 1,983,825
Administrative fee--Note B................................. 1,428,354
Printing and other expenses................................ 126,186
Insurance expense.......................................... 93,789
Custodian fees............................................. 92,630
Filing fees................................................ 95,000
Legal and audit fees....................................... 47,404
Transfer agent fees........................................ 20,905
Directors fees............................................. 14,230
------------
Total expenses........................................... 6,197,511
Waiver of investment advisory fee--Note B.................. (1,739,530)
Total net expenses....................................... 4,457,981
------------
Net investment income .................................. 3,976,556
------------
Net increase in net assets resulting from operations.... $ 3,976,556
============
See notes to financial statements.
4
HILLIARD-LYONS GOVERNMENT FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
For the Six
Months Ended For the
February 29, Year Ended
2004 August 31,
(UNAUDITED) 2003
-------------- --------------
FROM OPERATIONS
Net investment income....................................... $3,976,556 $ 10,635,655
-------------- --------------
Net increase in net assets resulting from operations...... 3,976,556 10,635,655
DISTRIBUTIONS TO SHAREHOLDERS FROM
Net investment income....................................... (3,976,556) (10,635,655)
-------------- --------------
Total distributions......................................... (3,976,556) (10,635,655)
-------------- --------------
FROM CAPITAL SHARE TRANSACTIONS
Net capital share transactions (at $1.00 per share)--Note C. (71,466,380) (60,010,826)
-------------- --------------
NET ASSETS
Beginning of period......................................... 1,607,234,404 1,667,245,230
-------------- --------------
End of period............................................... $1,535,768,024 $1,607,234,404
============== ==============
FINANCIAL HIGHLIGHTS
The following table includes selected data for a share of capital stock
outstanding throughout each year and other performance information derived from
the financial statements. The total returns in the table represent the rate
that an investor would have earned on an investment in the Fund (assuming
reinvestment of all dividends and distributions). The 2003 and 2002 information
has been audited by Deloitte and Touche LLP. Information for the prior years
was audited by another independent auditor, whose report expressed an
unqualified opinion. It should be read in conjunction with the financial
statements and notes thereto.
For the Six
Months Ended
February 29,
2004 For the year ended August 31,
(UNAUDITED) 2003 2002 2001 2000
------------ ---------- ---------- ---------- ----------
Net asset value, beginning of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
----------- ---------- ---------- ---------- ----------
Net investment income............... -- (a) .01 .01 .05 .05
----------- ---------- ---------- ---------- ----------
Total from investment operations.. -- (a) .01 .01 .05 .05
----------- ---------- ---------- ---------- ----------
Less distributions:
From net investment income........ -- (a) (.01) (.01) (.05) (.05)
----------- ---------- ---------- ---------- ----------
Total distributions................. -- (a) (.01) (.01) (.05) (.05)
----------- ---------- ---------- ---------- ----------
Net asset value, end of period...... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
=========== ========== ========== ========== ==========
Total investment return............. .24% .63% 1.44% 5.14% 5.52%
SUPPLEMENTAL DATA
Net assets, end of period
(000's omitted).................. $1,535,768 $1,607,234 $1,667,245 $1,930,645 $1,366,422
RATIOS TO AVERAGE NET ASSETS
Operating expenses................ .56%(b)(c) .69%(c) .65% .44% .48%
Net investment income............. .50%(b)(c) .65%(c) 1.53% 4.92% 5.41%
(a)Amount less than $.005
(b)Annualized
(c)Net of voluntary investment advisory fee waiver by the Adviser. If the Fund
had paid the full investment advisory fee, the annualized ratios of expenses
and net investment income to average net assets would have been .78% and
.28%, respectively, for the six months ended February 29, 2004 and would
have been .77% and .57%, respectively, for the year ended August 31, 2003.
See notes to financial statements.
5
HILLIARD-LYONS GOVERNMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
February 29, 2004
NOTE A--ACCOUNTING POLICIES
Hilliard-Lyons Government Fund, Inc. (the "Fund") is a diversified open-end
management investment company registered under the Investment Company Act of
1940 (the "1940 Act"), as amended. The Fund was incorporated in June 1980 under
the laws of the state of Maryland. The primary investment objective of the Fund
is to provide investors with liquidity and the highest possible level of
current income consistent with the preservation of capital.
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Security Valuation: The Fund employs the amortized cost method of security
valuation for U.S. Government securities in accordance with Rule 2a-7 of the
1940 Act. The Board of Directors (the "Board") monitors deviations between net
asset value per share as determined by using available market quotations and
the amortized cost method of security valuation. If the deviation in the
aggregate is significant, the Board considers what action, if any, should be
initiated to provide fair valuation.
Repurchase Agreements: Repurchase agreements are fully collateralized by U.S.
Treasury and U.S. Government Agency obligations. It is the policy of the Fund
to take possession of collateral. U.S. Treasury and U.S. Government Agency
obligations pledged as collateral for repurchase agreements are held by the
Fund's custodian bank until maturity of the repurchase agreements. Provisions
of the agreements provide that the market value of the collateral plus accrued
interest on the collateral is greater than or equal to the repurchase price
plus accrued interest at all times. In the event of default or bankruptcy by
the other party to the agreements, the Fund maintains the right to sell the
underlying securities at market value; however, realization and/or retention of
the collateral may be subject to legal proceedings.
Federal Income Taxes: It is the policy of the Fund to continue to qualify under
the Internal Revenue Code as a regulated investment company and to distribute
all of its taxable income to shareholders, thereby relieving the Fund of
federal income tax liability.
Dividends to Shareholders: The net investment income of the Fund is determined
on each business day and is declared as a dividend payable to shareholders of
record daily and is paid monthly. The tax character of distributions paid
during 2003 and 2002 was as follows:
For the year ended August 31,
2003 2002
----------- -----------
Distributions paid from
ordinary income....... $10,635,655 $28,105,327
----------- -----------
Total Distributions.... $10,635,655 $28,105,327
=========== ===========
Investment Transactions: Investment transactions are accounted for on the date
the securities are bought or sold. Income is accrued daily. Discounts on
securities purchased are amortized over the lives of the respective securities.
Net realized gains and losses on sales of investments, if any, are determined
on the basis of identified cost.
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 reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. Estimates also affect the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
NOTE B--INVESTMENT ADVISORY FEES & OTHER TRANSACTIONS WITH AFFILIATES
On October 8, 2003, the Fund renewed its investment advisory agreement with
J.J.B Hilliard W.L. Lyons, Inc. (the "Adviser"). Under the investment advisory
agreement, the Adviser supervises investment
6
HILLIARD-LYONS GOVERNMENT FUND, INC.
NOTES TO FINANCIAL STATEMENTS (continued)
(UNAUDITED)
February 29, 2004
operations of the Fund and the composition of its portfolio, and furnishes
advice and recommendations with respect to investments and the purchase and
sale of securities in accordance with the Fund's investment objectives,
policies and restrictions; subject, however, to the general supervision and
control of the Fund's Board. For the services the Adviser renders, the Fund has
agreed to pay the Adviser an annual advisory fee of 1/2 of 1% of the first
$200 million of average daily net assets, 3/8 of 1% of the next $100 million
of average daily net assets, and 1/4 of 1% of the average daily net assets in
excess of $300 million. Such fee is accrued daily and paid monthly. The Adviser
has agreed to reimburse the Fund if total operating expenses of the Fund,
excluding taxes, interest and extraordinary expenses (as defined), exceed on an
annual basis 1 1/2% of the first $30 million of average daily net assets and 1%
of average daily net assets over $30 million. There was no reimbursement
required for the six months ended February 29, 2004. The Adviser voluntarily
agreed to waive a portion of its advisory fee beginning April 1, 2003. The
Adviser may discontinue or modify any such voluntary waiver at its discretion.
The Adviser waived $1,739,530 for the six months ended February 29, 2004.
The Fund has entered into a separate shareholder and administration services
agreement (the "Administration Agreement") with the Adviser. Under the
Administration Agreement, the Adviser provides certain shareholder and
administrative functions for the Fund, including but not limited to: (i)
preparing and mailing monthly statements to shareholders; (ii) forwarding
shareholder communications from the Fund; (iii) responding to inquiries from
shareholders concerning their investments in the Fund; (iv) maintaining account
information relating to shareholders that invest in the fund; and (v)
processing purchase, exchange and redemption requests from shareholders and
placing orders and appropriate documentation with the Fund or its service
providers. For its services to the Fund under the Administration Agreement, the
Adviser receives a monthly fee from the Fund at the annual rate of .25% of the
Fund's average daily net assets for shareholder services and .18% of the Fund's
average daily net assets for administration services.
No compensation is paid by the Fund to officers of the Fund and directors who
are affiliated with the Adviser. The Fund pays each unaffiliated director an
annual retainer of $5,000 and the audit committee chairman an annual retainer
of $3,000, a fee of $1,000 for each board or committee meeting attended, and
all expenses the directors incur in attending meetings. Total fees paid to
directors for the six months ended February 29, 2004 were $18,000. Transfer
agent fees are paid to State Street Bank & Trust Co.
NOTE C--CAPITAL STOCK
At February 29, 2004, there were 2,500,000,000 shares of $.01 par value Common
Stock authorized. Each transaction in Fund shares was at the net asset value of
$1.00 per share. The dollar amount represented is the same as the shares shown
below for such transactions.
For the Six For the
Months ended Year ended
February 29, August 31,
2004 2003
-------------- --------------
Shares sold..... 2,849,968,024 5,290,394,643
Shares issued to
shareholders in
reinvestment of
dividends...... 3,930,877 10,741,531
Less shares
repurchased.... (2,925,365,280) (5,640,503,196)
-------------- --------------
Net decrease
in capital
shares......... (71,466,379) (60,010,826)
============== ==============
7
HILLIARD-LYONS GOVERNMENT FUND, INC.
Hilliard Lyons Center
Louisville, Kentucky 40202
(502) 588-8400
Investment Adviser, Administrator and Distributor
J.J.B. Hilliard, W.L. Lyons, Inc.
Hilliard Lyons Center
Louisville, Kentucky 40202
(502) 588-8400
Custodian and Transfer Agent
State Street Bank and Trust Company
225 Franklin Street
P.O. Box 1912
Boston, Massachusetts 02105
Legal Counsel
Frost Brown Todd LLC
400 West Market Street, 32nd Floor
Louisville, Kentucky 40202
Independent
Public Accountants
Deloitte & Touche LLP
200 Berkeley Street
Boston, Massachusetts 02116
DIRECTORS AND OFFICERS
BOARD OF DIRECTORS
Samuel G. Miller
J. Robert Shine
Lindy B. Street
OFFICERS
Joseph C. Curry, Jr.--President
Dianna P. Wengler--Vice President and Treasurer
Stephanie J. Ferree--Secretary
Hilliard-Lyons
Government Fund, Inc.
Semi-Annual Report
February 29, 2004
[GRAPHIC]
Bear & Bull
ITEM 2. CODE OF ETHICS.
Not applicable to semi-annual reports.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable to semi-annual reports.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable to semi-annual reports.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to open-end investment companies.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable for periods ending before July 9, 2004.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to open-end investment companies.
ITEM 8 PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASES.
Not applicable to open-end investment companies.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The registrant does not currently have procedures by which
shareholders may recommend nominees to the registrant's board of
directors. The registrant's directors, all of whom are independent,
serve as its nominating committee.
ITEM 10. CONTROLS AND PROCEDURES.
(a) Within the 90-day period prior to the filing of this report,
the registrant's management carried out an evaluation, with
the participation of the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the registrant's
disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940). Based on
their evaluation, the Chief Executive Officer and Chief
Financial Officer believe that the registrant's disclosure
controls and procedures are effectively designed to ensure
that information required to be disclosed by the registrant in
the Report is recorded, processed, summarized and reported by
the filing date, including ensuring that information required
to be disclosed in the Report is accumulated and communicated
to the registrant's management, including the registrant's
Chief Executive Officer and Chief Financial Officer as
appropriate to allow timely decisions regarding required
disclosure.
(b) There have been no changes in the registrant's internal
control over financial reporting (as defined in rule 30a-3(a))
under the Investment Company Act of 1940 or in other factors
that occurred during the registrant's most recent fiscal
half-year that have materially affected, or are reasonably
likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 11. EXHIBITS.
(a)(1) Any code of ethics or amendment thereto. Not applicable.
(b)(2) Certification pursuant to Rule 30a-2(a) under the
Investment Company Act of 1940. Filed herewith.
(b) Certification pursuant to Rule 30a-2(b) under the
Investment Company Act of 1940. Furnished 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) HILLIARD-LYONS GOVERNMENT FUND, INC.
By (Signature and Title) /s/: Joseph C. Curry, Jr.
-------------------------
Joseph C. Curry Jr.
President
Date: April 26, 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/: Dianna P. Wengler
----------------------
Dianna P. Wengler
Vice President and Treasurer
Date: April 26, 2004
By (Signature and Title) /s/: Joseph C. Curry, Jr.
-------------------------
Joseph C. Curry Jr.
President
Date: April 26, 2004