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<PAGE> PAGE 6
SIGNATURE PAUL E. SPEARS
TITLE PRESIDENT
Signature Page
This report is signed on behalf of registrant in the City of
Hanover and Commonwealth of Pennsylvania on the 14th day of February, 1997.
SHEPMYERS INVESTMENT COMPANY
Witness: /s/ W. Bruce McConnel, III By: /s/ Paul E. Spears
------------------------- --------------------------
W. Bruce McConnel, III Paul E. Spears
Secretary President
<PAGE>
SUB-ITEM 77B For the period ended 12/31/96
File number 811-2798
ERNST & YOUNG LLP Phone:610 320 3600
717 237 2700
Fax: 610 320 3666
Central Pennsylvania Practice
Wyomissing Professional Center
875 Berkshire Boulevard
P.O. Box 7045
Reading, Pennsylvania 19610-6045
Board of Directors
Shepmyers Investment Company
Hanover, Pennsylvania
In planning and performing our audit of the financial statements of Shepmyers
Investment Company for the year ended December 31, 1996, we considered its
internal control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control structure.
The management of Shepmyers Investment Company is responsible for establishing
and maintaining an internal control structure. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and that
transactions are executed in accordance with management's authorization and
recorded properly to permit preparation of financial statements in conformity
with generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any evaluation
of the structure to future periods is subject to the risk that it may become
inadequate because of changes in conditions or that the effectiveness of the
design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
December 31, 1996.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
January 17, 1997
/s/ ERNST & YOUNG LLP
<PAGE>
For period ended 12/31/96
File number 811-2798
SUB-ITEM 77Q2
Section 16(a) Beneficial Ownership Reporting Compliance
Section 30(f) of the Investment Company Act of 1940 and Section 16(a)
of the Securities Exchange Act of 1934 require that the directors and officers
of Shepmyers Investment Company (the "Company"), certain affiliated persons of
Rittenhouse Financial Services, Inc. ("RFS"), and persons who own more than ten
percent of the Company's shares file with the Securities and Exchange Commission
initial reports of ownership and reports of changes in ownership of shares of
the Company. Specific due dates have been established and the Company is
required to disclose any failure to file by the specific due dates. To the
Company's knowledge, all of these filing requirements were satisfied during
1996 except (i) Lawrence S. DeVan, a director of the Company, did not file on a
timely basis one report relating to his appointment as co-trustee with
CoreStates (Hamilton) Bank with respect to 1,460 shares, and (ii) Robert P.
Myers, a director of the Company, did not file on a timely basis two reports,
one relating to two separate acquisitions of 1,085 shares each and one relating
to his right to vote 98,937 shares as the executor of the estate of Henrietta
Myers Miller. In making this disclosure, the Company has relied on copies of
reports that were furnished to it and written representations of its directors,
officers and RFS.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
This schedule contains summary financial
information extracted from the 12/31/96
N-SAR and is qualified in its entirety
by reference to such N-SAR
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 15,134
<INVESTMENTS-AT-VALUE> 15,666
<RECEIVABLES> 244
<ASSETS-OTHER> 1
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 15,911
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<SHARES-COMMON-STOCK> 768
<SHARES-COMMON-PRIOR> 768
<ACCUMULATED-NII-CURRENT> 297
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</TABLE>
