<PAGE> 1
- --------------------------------------------------------------------------------
To Our Variable Annuity Contractholders:
- --------------------------------------------------------------------------------
August 22, 1997
We are pleased to send you the attached semi-annual report, detailing separate
account information pertaining to our variable annuity contracts. In addition,
the semi-annual report for the Market Street Fund, Inc. is attached.
As the owner of a variable annuity contract, you allocate your premiums to
various investments of your choosing. If applicable, you'll be receiving under
separate cover additional semi-annual reports pertaining to the Funds you've
selected within your Provident Mutual variable annuity contract.
Your variable annuity is unique in that it allows you to invest in a variety of
subaccounts and receive many of the advantages of mutual funds, but defer taxes
while your money accumulates. Portfolios within the variable annuities are
managed by some of the best Fund Management companies in the country.
A leader in the variable products marketplace, Provident Mutual also offers a
wide variety of annuity contracts and life insurance policies designed to help
you meet your financial planning goals, including retirement planning, college
funding, and estate planning.
By selecting Provident Mutual Life Insurance Company, you have chosen a company
with a reputation for strength, stability, and sound management. Our roots can
be traced back to 1717, giving us the distinction of serving America's life
insurance needs longer than any other company.
We appreciate your business. If you have questions about your contract, or would
like more information about Provident Mutual's products and services, please
contact your local agent or our Service Center at 1-800-688-5177.
Sincerely,
/s/ Robert W. Kloss
- ----------------------
Robert W. Kloss
President
<PAGE> 2
- --------------------------------------------------------------------------------
To Our Variable Annuity Contract Owners:
- --------------------------------------------------------------------------------
August 26, 1996
As an owner of a Provident Mutual variable annuity contract, we are pleased
to send you the Semi-Annual Report for the Separate Account and its subaccounts
for our variable annuity contracts.
Attached to the Separate Account Semi-Annual Report is the Semi-Annual
Report for the Market Street Fund, Inc. Under separate cover, you will be
receiving the Semi-Annual Reports for the other Fund groups underlying the
subaccounts to which you have chosen to allocate your premiums.
Thank you for your confidence in Provident Mutual and your variable annuity
contract. Provident Mutual has continued its role as a leader in the variable
insurance products marketplace. We are very pleased with this result and are
glad that you are a part of our success.
We are happy to be of service to you. If you have a question about your
annuity contract, please contact your local agent or call our Service Center
toll free at 1-800-668-5177.
Sincerely,
/s/ David N. Ingram
--------------------------
David N. Ingram
<PAGE> 3
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in the Market Street
Fund, Inc., at market value:
Growth Portfolio................. $2,999,175
Money Market Portfolio........... $3,627,663
Bond Portfolio................... $475,935
Managed Portfolio................ $1,029,126
Aggressive Growth Portfolio...... $558,615
International Portfolio.......... $ 2,228,467
Dividends receivable............... 12,883
---------- ---------- -------- ---------- -------- ----------
Total Assets....................... 2,999,175 3,640,546 475,935 1,029,126 558,615 2,228,467
---------- ---------- -------- ---------- -------- ----------
LIABILITIES
Payable to Provident Mutual Life
Insurance Company................ 73,090
---------- ---------- -------- ---------- -------- ----------
NET ASSETS......................... $2,999,175 $3,567,456 $475,935 $1,029,126 $558,615 $ 2,228,467
========== ========== ======== ========== ======== ==========
Held for the benefit of
contractholders.................. $2,954,265 $3,559,620 $446,269 $ 991,073 $517,367 $ 2,187,951
Attributable to Provident Mutual
Life Insurance Company........... 44,910 7,836 29,666 38,053 41,248 40,516
---------- ---------- -------- ---------- -------- ----------
$2,999,175 $3,567,456 $475,935 $1,029,126 $558,615 $ 2,228,467
========== ========== ======== ========== ======== ==========
</TABLE>
See accompanying notes to financial statements
2
<PAGE> 4
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500 CONTRAFUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in the Variable
Insurance Products Fund, at
market value:
High Income Portfolio............ $2,182,064
Equity-Income Portfolio.......... $7,797,330
Growth Portfolio................. $5,198,516
Investment in the Variable
Insurance Products Fund II, at
market value:
Asset Manager Portfolio.......... $1,218,390
Index 500 Portfolio.............. $4,064,779
Contrafund Portfolio............. $1,409,224
---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS......................... $2,182,064 $7,797,330 $5,198,516 $1,218,390 $4,064,779 $1,409,224
========== ========== ========== ========== ========== ==========
Held for the benefit of
contractholders.................. $2,145,365 $7,752,709 $5,152,267 $1,182,355 $4,014,230 $1,377,617
Attributable to Provident Mutual
Life Insurance Company........... 36,699 44,621 46,249 36,035 50,549 31,607
---------- ---------- ---------- ---------- ---------- ----------
$2,182,064 $7,797,330 $5,198,516 $1,218,390 $4,064,779 $1,409,224
========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
3
<PAGE> 5
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER
OCC OCC OCC SCUDDER GROWTH AND SCUDDER
EQUITY SMALL CAP MANAGED BOND INCOME INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investment in the OCC Accumulation
Trust, at market value:
Equity Portfolio................. $2,723,303
Small Cap Portfolio.............. $1,977,087
Managed Portfolio................ $5,461,452
Investment in the Scudder Variable
Life Investment Fund, at market
value:
Bond Portfolio................... $515,334
Growth and Income Portfolio...... $1,204,970
International Portfolio.......... $ 558,111
---------- ---------- ---------- -------- ---------- --------
NET ASSETS......................... $2,723,303 $1,977,087 $5,461,452 $515,334 $1,204,970 $ 558,111
========== ========== ========== ======== ========== ========
Held for the benefit of
contractholders.................. $2,675,172 $1,937,775 $5,412,951 $483,758 $1,171,168 $ 527,698
Attributable to Provident Mutual
Life Insurance Company........... 48,131 39,312 48,501 31,576 33,802 30,413
---------- ---------- ---------- -------- ---------- --------
$2,723,303 $1,977,087 $5,461,452 $515,334 $1,204,970 $ 558,111
========== ========== ========== ======== ========== ========
</TABLE>
See accompanying notes to financial statements
4
<PAGE> 6
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Assets and Liabilities, June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERATED
DREYFUS DREYFUS DREYFUS FUND FOR
ZERO GROWTH SOCIALLY U.S. GOVERNMENT FEDERATED
COUPON 2000 AND INCOME RESPONSIBLE SECURITIES II UTILITY FUND II
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment in the Dreyfus Variable
Investment Fund, at market value:
Zero Coupon 2000 Portfolio............ $ 354,053
Growth and Income Portfolio........... $1,189,219
Socially Responsible Portfolio........ $ 277,893
Investment in the Federated Insurance
Series, at market value:
Fund for U.S. Government Securities II
Portfolio........................... $91,708
Utility Fund II Portfolio............. $ 160,690
-------- ---------- -------- ------- --------
NET ASSETS.............................. $ 354,053 $1,189,219 $ 277,893 $91,708 $ 160,690
======== ========== ======== ======= ========
Held for the benefit of
contractholders....................... $ 323,133 $1,158,999 $ 245,272 $64,577 $ 130,602
Attributable to Provident Mutual Life
Insurance Company..................... 30,920 30,220 32,621 27,131 30,088
-------- ---------- -------- ------- --------
$ 354,053 $1,189,219 $ 277,893 $91,708 $ 160,690
======== ========== ======== ======= ========
</TABLE>
See accompanying notes to financial statements
5
<PAGE> 7
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.......................... $ 27,933 $ 66,298 $ 14,895 $ 15,142 $ 3,811 $ 15,413
EXPENSES
Mortality and expense risks........ 17,781 19,204 3,064 6,171 3,026 13,210
-------- ------- ------ ------- ------- --------
Net investment income.............. 10,152 47,094 11,831 8,971 785 2,203
-------- ------- ------ ------- ------- --------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain distributions
reinvested....................... 271,577 6,605 756 120,669
Net realized gain from redemption
of investment shares............. 7,103 2,168 5,518 3,337 13,497
-------- ------- ------ ------- ------- --------
Net realized gain on investments... 278,680 2,168 12,123 4,093 134,166
-------- ------- ------ ------- ------- --------
Net unrealized appreciation
(depreciation) of investments:
Beginning of period.............. 297,288 12,282 71,129 41,064 126,164
End of period.................... 325,340 6,912 147,530 88,420 243,758
-------- ------- ------ ------- ------- --------
Net unrealized appreciation
(depreciation) during the
period........................... 28,052 (5,370) 76,401 47,356 117,594
-------- ------- ------ ------- ------- --------
Net realized and unrealized gain
(loss) on investments............ 306,732 (3,202) 88,524 51,449 251,760
-------- ------- ------ ------- ------- --------
Net increase in net assets
resulting from operations........ $316,884 $ 47,094 $ 8,629 $ 97,495 $ 52,234 $ 253,963
======== ======= ====== ======= ======= ========
</TABLE>
See accompanying notes to financial statements
6
<PAGE> 8
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500 CONTRAFUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends.......................... $129,191 $ 99,308 $ 27,898 $ 33,141 $ 29,251 $ 7,331
EXPENSES
Mortality and expense risks........ 13,197 45,011 30,836 6,937 20,815 7,237
-------- -------- -------- -------- -------- --------
Net investment income (loss)....... 115,994 54,297 (2,938) 26,204 8,436 94
-------- -------- -------- -------- -------- --------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Realized gain distributions
reinvested....................... 15,967 499,300 124,877 83,133 59,353 19,375
Net realized gain from redemption
of investment shares............. 12,418 30,510 12,199 5,285 14,092 10,312
-------- -------- -------- -------- -------- --------
Net realized gain on investments... 28,385 529,810 137,076 88,418 73,445 29,687
-------- -------- -------- -------- -------- --------
Net unrealized appreciation
(depreciation) of investments:
Beginning of period.............. 116,189 545,542 188,126 80,938 270,807 65,818
End of period.................... 105,353 960,450 629,941 71,242 750,591 159,492
-------- -------- -------- -------- -------- --------
Net unrealized appreciation
(depreciation) during the
period........................... (10,836) 414,908 441,815 (9,696) 479,784 93,674
-------- -------- -------- -------- -------- --------
Net realized and unrealized gain on
investments...................... 17,549 944,718 578,891 78,722 553,229 123,361
-------- -------- -------- -------- -------- --------
Net increase in net assets
resulting from operations........ $133,543 $999,015 $575,953 $104,926 $561,665 $123,455
======== ======== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
7
<PAGE> 9
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER
OCC OCC OCC SCUDDER GROWTH AND SCUDDER
EQUITY SMALL CAP MANAGED BOND INCOME INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends......................... $ 18,486 $ 8,799 $ 45,645 $ 15,893 $ 10,424 $ 4,487
EXPENSES
Mortality and expense risks....... 15,185 11,170 31,191 3,159 5,761 2,370
-------- ----------- ----------- ------- ---------- ----------
Net investment income (loss)...... 3,301 (2,371) 14,454 12,734 4,663 2,117
-------- ----------- ----------- ------- ---------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS
Realized gain distributions
reinvested...................... 65,808 62,049 140,190 1,374 29,363 2,350
Net realized gain (loss) from
redemption of investment
shares.......................... 27,388 7,390 55,335 (4,092) 12,023 1,410
-------- ----------- ----------- ------- ---------- ----------
Net realized gain (loss) on
investments..................... 93,196 69,439 195,525 (2,718) 41,386 3,760
-------- ----------- ----------- ------- ---------- ----------
Net unrealized appreciation of
investments:
Beginning of period............. 247,016 105,576 454,153 1,252 44,149 12,762
End of period................... 439,213 266,239 816,064 3,590 149,322 62,493
-------- ----------- ----------- ------- ---------- ----------
Net unrealized appreciation during
the period...................... 192,197 160,663 361,911 2,338 105,173 49,731
-------- ----------- ----------- ------- ---------- ----------
Net realized and unrealized gain
(loss) on investments........... 285,393 230,102 557,436 (380) 146,559 53,491
-------- ----------- ----------- ------- ---------- ----------
Net increase in net assets
resulting from operations....... $288,694 $227,731 $571,890 $ 12,354 $151,222 $55,608
======== =========== =========== ======= ========== ==========
</TABLE>
See accompanying notes to financial statements
8
<PAGE> 10
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Operations for the Six Months Ended June 30, 1997 (unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERATED
DREYFUS DREYFUS FUND FOR
DREYFUS ZERO GROWTH SOCIALLY U.S. GOVERNMENT FEDERATED
COUPON 2000 AND INCOME RESPONSIBLE SECURITIES II UTILITY FUND II
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Dividends............................... $ 8,255 $ 8,670 $ 2,363 $ 2,617
EXPENSES
Mortality and expense risks............. 2,205 6,094 $ 1,238 398 841
-------- ----------- ----------- ------- ----------
Net investment income (loss)............ 6,050 2,576 (1,238) 1,965 1,776
-------- ----------- ----------- ------- ----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS
Realized gain distributions
reinvested............................ 8,873 3,368
Net realized gain (loss) from redemption
of investment shares.................. (3,431) (5,935) 1,984 2 1,808
-------- ----------- ----------- ------- ----------
Net realized gain (loss) on
investments........................... (3,431) 2,938 1,984 2 5,176
-------- ----------- ----------- ------- ----------
Net unrealized appreciation
(depreciation) of investments:
Beginning of period................... (3,544) (42,177) 1,738 433 6,757
End of period......................... (782) 30,068 28,977 650 12,022
-------- ----------- ----------- ------- ----------
Net unrealized appreciation during the
period................................ 2,762 72,245 27,239 217 5,265
-------- ----------- ----------- ------- ----------
Net realized and unrealized gain (loss)
on investments........................ (669) 75,183 29,223 219 10,441
-------- ----------- ----------- ------- ----------
Net increase in net assets resulting
from operations....................... $ 5,381 $ 77,759 $27,985 $ 2,184 $12,217
======== =========== =========== ======= ==========
</TABLE>
See accompanying notes to financial statements
9
<PAGE> 11
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Six Months Ended June 30, 1997
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income.............. $ 10,152 $ 47,094 $ 11,831 $ 8,971 $ 785 $ 2,203
Net realized gain on investments... 278,680 2,168 12,123 4,093 134,166
Net unrealized appreciation
(depreciation) of investments
during the period................ 28,052 (5,370) 76,401 47,356 117,594
---------- ---------- -------- ---------- -------- ----------
Net increase in net assets from
operations....................... 316,884 47,094 8,629 97,495 52,234 253,963
---------- ---------- -------- ---------- -------- ----------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractholders' net premiums...... 45,726 8,039,218 5,916 1,970 16,085 48,970
Administrative charges............. (730) (576) (142) (314) (238) (682)
Surrenders and forfeitures......... (27,976) (27,137) (5,820) (21,085) (15,554) (25,869)
Net repayments due to policy
loans............................ 683
Transfers between investment
portfolios....................... 322,030 (7,472,140) (776) 118,693 108,206 115,018
---------- ---------- -------- ---------- -------- ----------
Net increase (decrease) in net
assets derived from contract
transactions..................... 339,733 539,365 (822) 99,264 108,499 137,437
---------- ---------- -------- ---------- -------- ----------
Total increase in net assets....... 656,617 586,459 7,807 196,759 160,733 391,400
NET ASSETS
Beginning of period.............. 2,342,558 2,980,997 468,128 832,367 397,882 1,837,067
---------- ---------- -------- ---------- -------- ----------
End of period.................... $2,999,175 $3,567,456 $475,935 $1,029,126 $558,615 $ 2,228,467
========== ========== ======== ========== ======== ==========
</TABLE>
See accompanying notes to financial statements
10
<PAGE> 12
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Six Months Ended June 30, 1997
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500 CONTRAFUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)....... $ 115,994 $ 54,297 $ (2,938) $ 26,204 $ 8,436 $ 94
Net realized gain on investments... 28,385 529,810 137,076 88,418 73,445 29,687
Net unrealized appreciation
(depreciation) of investments
during the period................ (10,836) 414,908 441,815 (9,696) 479,784 93,674
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets from
operations....................... 133,543 999,015 575,953 104,926 561,665 123,455
---------- ---------- ---------- ---------- ---------- ----------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractholders' net premiums...... 49,000 396,497 166,519 30,605 126,368 44,071
Administrative charges............. (530) (1,792) (1,662) (431) (845) (110)
Surrenders and forfeitures......... (29,083) (116,639) (117,690) (33,486) (33,259) (17,768)
Net repayments due to policy
loans............................ 687 1,379 706 684
Transfers between investment
portfolios....................... 298,478 876,947 507,443 264,587 1,018,286 513,806
---------- ---------- ---------- ---------- ---------- ----------
Net increase in net assets derived
from contract transactions....... 317,865 1,155,700 555,989 261,275 1,111,256 540,683
---------- ---------- ---------- ---------- ---------- ----------
Total increase in net assets....... 451,408 2,154,715 1,131,942 366,201 1,672,921 664,138
NET ASSETS
Beginning of period.............. 1,730,656 5,642,615 4,066,574 852,189 2,391,858 745,086
---------- ---------- ---------- ---------- ---------- ----------
End of period.................... $2,182,064 $7,797,330 $5,198,516 $1,218,390 $4,064,779 $ 1,409,224
========== ========== ========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements
11
<PAGE> 13
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Six Months Ended June 30, 1997
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER
OCC OCC OCC SCUDDER GROWTH AND SCUDDER
EQUITY SMALL CAP MANAGED BOND INCOME INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)....... $ 3,301 $ (2,371) $ 14,454 $ 12,734 $ 4,663 $ 2,117
Net realized gain (loss) on
investments...................... 93,196 69,439 195,525 (2,718) 41,386 3,760
Net unrealized appreciation of
investments during the period.... 192,197 160,663 361,911 2,338 105,173 49,731
---------- ---------- ---------- -------- ---------- --------
Net increase in net assets from
operations....................... 288,694 227,731 571,890 12,354 151,222 55,608
---------- ---------- ---------- -------- ---------- --------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractholders' net premiums...... 61,309 24,550 189,655 35,474 63,359 9,213
Administrative charges............. (720) (518) (1,390) (202) (43) (25)
Surrenders and forfeitures......... (34,413) (17,937) (197,197) (29,260) (5,098) (486)
Net repayments due to policy
loans............................ 682 1,026
Withdrawals due to death
benefits......................... (21,980) (8,498)
Transfers between investment
portfolios....................... 499,199 296,811 1,241,522 48,127 487,038 288,620
---------- ---------- ---------- -------- ---------- --------
Net increase in net assets derived
from contract transactions....... 525,375 302,906 1,233,272 54,139 524,302 288,824
---------- ---------- ---------- -------- ---------- --------
Total increase in net assets....... 814,069 530,637 1,805,162 66,493 675,524 344,432
NET ASSETS
Beginning of period.............. 1,909,234 1,446,450 3,656,290 448,841 529,446 213,679
---------- ---------- ---------- -------- ---------- --------
End of period.................... $2,723,303 $1,977,087 $5,461,452 $515,334 $1,204,970 $ 558,111
========== ========== ========== ======== ========== ========
</TABLE>
See accompanying notes to financial statements
12
<PAGE> 14
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Six Months Ended June 30, 1997
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERATED
DREYFUS DREYFUS DREYFUS FUND FOR
ZERO GROWTH SOCIALLY U.S. GOVERNMENT FEDERATED
COUPON 2000 AND INCOME RESPONSIBLE SECURITIES II UTILITY FUND II
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)............ $ 6,050 $ 2,576 $ (1,238) $ 1,965 $ 1,776
Net realized gain (loss) on
investments........................... (3,431) 2,938 1,984 2 5,176
Net unrealized appreciation of
investments during the period......... 2,762 72,245 27,239 217 5,265
-------- ---------- -------- ------- --------
Net increase in net assets from
operations............................ 5,381 77,759 27,985 2,184 12,217
-------- ---------- -------- ------- --------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractholders' net premiums........... 55,787 38,417 14,771 744 26,481
Administrative charges.................. (111) (74) (4) (5) (16)
Surrenders and forfeitures.............. (4,640) (3,350) (214) (58) (120)
Net repayments due to policy loans...... 992
Withdrawals due to death benefits....... (16,868)
Transfers between investment
portfolios............................ (37,432) 354,017 107,654 14,431 37,556
-------- ---------- -------- ------- --------
Net increase in net assets derived from
contract transactions................. 13,604 390,002 122,207 15,112 47,033
-------- ---------- -------- ------- --------
Total increase in net assets............ 18,985 467,761 150,192 17,296 59,250
NET ASSETS
Beginning of period................... 335,068 721,458 127,701 74,412 101,440
-------- ---------- -------- ------- --------
End of period......................... $ 354,053 $1,189,219 $ 277,893 $91,708 $ 160,690
======== ========== ======== ======= ========
</TABLE>
See accompanying notes to financial statements
13
<PAGE> 15
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)..... $ 19,592 $ 88,858 $ 14,571 $ 10,147 $ (1,052) $ (7,775)
Net realized gain on
investments.................... 82,041 2,584 14,055 31,659 65,870
Net unrealized appreciation
(depreciation) of investments
during the year................ 199,081 (6,349) 38,595 24,258 69,204
---------- ------------ -------- -------- -------- ----------
Net increase in net assets from
operations..................... 300,714 88,858 10,806 62,797 54,865 127,299
---------- ------------ -------- -------- -------- ----------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractholders' net premiums.... 129,062 16,804,454 12,235 39,161 14,105 145,209
Administrative charges........... (755) (677) (128) (314) (263) (541)
Surrenders and forfeitures....... (17,602) (89,015) (30,257) (11,678) (3,305) (44,567)
Transfers between investment
portfolios..................... 866,000 (15,761,942) 211,574 454,616 75,631 710,269
---------- ------------ -------- -------- -------- ----------
Net increase in net assets
derived from contract
transactions................... 976,705 952,820 193,424 481,785 86,168 810,370
---------- ------------ -------- -------- -------- ----------
Total increase in net assets..... 1,277,419 1,041,678 204,230 544,582 141,033 937,669
NET ASSETS
Beginning of year.............. 1,065,139 1,939,319 263,898 287,785 256,849 899,398
---------- ------------ -------- -------- -------- ----------
End of year.................... $2,342,558 $ 2,980,997 $468,128 $832,367 $397,882 $ 1,837,067
========== ============ ======== ======== ======== ==========
</TABLE>
See accompanying notes to financial statements
14
<PAGE> 16
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY
HIGH EQUITY- FIDELITY ASSET FIDELITY FIDELITY
INCOME INCOME GROWTH MANAGER INDEX 500 CONTRAFUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)....... $ 49,726 $ (47,115) $ (34,021) $ 6,143 $ (11,174) $ (2,884)
Net realized gain on investments... 40,421 190,000 199,679 19,038 52,964 925
Net unrealized appreciation of
investments during the year...... 58,073 349,452 134,470 49,544 240,034 65,818
-------- ---------- ---------- -------- -------- --------
Net increase in net assets from
operations....................... 148,220 492,337 300,128 74,725 281,824 63,859
-------- ---------- ---------- -------- -------- --------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractholders' net premiums...... 71,047 509,613 377,186 55,203 162,323 37,596
Administrative charges............. (553) (1,182) (1,307) (372) (452) (7)
Surrenders and forfeitures......... (120,197) (80,556) (79,931) (5,689) (35,688) (10,198)
Transfers between investment
portfolios....................... 760,735 2,822,841 2,025,844 378,238 1,348,209 628,836
-------- ---------- ---------- -------- -------- --------
Net increase in net assets derived
from contract transactions....... 711,032 3,250,716 2,321,792 427,380 1,474,392 656,227
-------- ---------- ---------- -------- -------- --------
Capital contribution from Provident
Mutual Life Insurance Company.... 25,000
-------- ---------- ---------- -------- -------- --------
Total increase in net assets....... 859,252 3,743,053 2,621,920 502,105 1,756,216 745,086
NET ASSETS
Beginning of year................ 871,404 1,899,562 1,444,654 350,084 635,642 --
-------- ---------- ---------- -------- -------- --------
End of year...................... $1,730,656 $5,642,615 $4,066,574 $852,189 $2,391,858 $745,086
======== ========== ========== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
15
<PAGE> 17
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
QUEST FOR QUEST FOR SCUDDER
QUEST FOR VALUE VALUE SCUDDER GROWTH AND SCUDDER
VALUE EQUITY SMALL CAP MANAGED BOND INCOME INTERNATIONAL
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income (loss)...... $ (9,808) $ (4,902) $ (15,867) $ 19,255 $ 1,407 $ (637)
Net realized gain on
investments..................... 103,592 111,813 117,411 1,379 668 27
Net unrealized appreciation
(depreciation) of investments
during the year................. 176,948 61,410 359,175 (5,750) 44,149 12,762
---------- ---------- ---------- -------- -------- --------
Net increase in net assets from
operations...................... 270,732 168,321 460,719 14,884 46,224 12,152
---------- ---------- ---------- -------- -------- --------
FROM VARIABLE ANNUITY CONTRACT
TRANSACTIONS
Contractholders' net premiums..... 105,006 122,662 368,883 69,708 58,154 7,467
Administrative charges............ (549) (369) (695) (102)
Surrenders and forfeitures........ (71,953) (11,402) (134,004) (5,560) (2,370) (184)
Transfers between investment
portfolios...................... 869,522 718,444 2,092,212 244,557 402,438 169,244
---------- ---------- ---------- -------- -------- --------
Net increase in net assets derived
from contract transactions...... 902,026 829,335 2,326,396 308,603 458,222 176,527
---------- ---------- ---------- -------- -------- --------
Capital contribution from
Provident Mutual Life Insurance
Company......................... 25,000 25,000
---------- ---------- ---------- -------- -------- --------
Total increase in net assets...... 1,172,758 997,656 2,787,115 323,487 529,446 213,679
NET ASSETS
Beginning of year............... 736,476 448,794 869,175 125,354 -- --
---------- ---------- ---------- -------- -------- --------
End of year..................... $1,909,234 $1,446,450 $3,656,290 $448,841 $529,446 $ 213,679
========== ========== ========== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
16
<PAGE> 18
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Statements of Changes in Net Assets for the Year Ended December 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DREYFUS DREYFUS DREYFUS FEDERATED U.S. FEDERATED
ZERO GROWTH SOCIALLY GOVERNMENT UTILITY
COUPON 2000 AND INCOME RESPONSIBLE BOND FUND FUND
SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT SUBACCOUNT
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FROM OPERATIONS
Net investment income....................... $ 11,830 $ 1,857 $ 70 $ 1,446 $ 1,318
Net realized gain on investments............ 2,135 65,239 4,885 1 14
Net unrealized appreciation (depreciation)
of investments during the year............ (8,002) (42,177) 1,738 433 6,757
-------- -------- -------- -------- --------
Net increase in net assets from
operations................................ 5,963 24,919 6,693 1,880 8,089
-------- -------- -------- -------- --------
FROM VARIABLE ANNUITY CONTRACT TRANSACTIONS
Contractholders' net premiums............... 9,992 60,256 10,114 19,222 15,094
Administrative charges...................... (115) (4)
Surrenders and forfeitures.................. (1,363) (3,432) (289)
Transfers between investment portfolios..... 180,966 614,719 86,183 28,310 53,257
-------- -------- -------- -------- --------
Net increase in net assets derived from
contract transactions..................... 189,480 671,539 96,008 47,532 68,351
-------- -------- -------- -------- --------
Capital contribution from Provident Mutual
Life Insurance Company.................... 25,000 25,000 25,000 25,000
-------- -------- -------- -------- --------
Total increase in net assets................ 195,443 721,458 127,701 74,412 101,440
NET ASSETS
Beginning of year......................... 139,625 -- -- -- --
-------- -------- -------- -------- --------
End of year............................... $ 335,068 $721,458 $ 127,701 $ 74,412 $101,440
======== ======== ======== ======== ========
</TABLE>
See accompanying notes to financial statements
17
<PAGE> 19
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited)
- --------------------------------------------------------------------------------
1. ORGANIZATION
The Provident Mutual Variable Annuity Separate Account (Separate Account)
was established on October 19, 1992 by Provident Mutual Life Insurance Company
(Provident Mutual) under the provisions of Pennsylvania law. The Separate
Account is an investment account to which net proceeds from individual flexible
premium deferred variable annuity contracts (the Contracts) are allocated until
maturity or termination of the Contracts.
The Contracts are distributed through career agents, brokers and personal
producing general agents.
Provident Mutual has structured the Separate Account as a unit investment
trust registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended. The Separate Account is comprised of
twenty-three Subaccounts: the Growth, Money Market, Bond, Managed, Aggressive
Growth and International Subaccounts invest in the corresponding portfolios of
the Market Street Fund, Inc.; the Fidelity High Income, Fidelity Equity-Income
and Fidelity Growth Subaccounts invest in the corresponding portfolios of the
Variable Insurance Products Fund; the Fidelity Asset Manager, Fidelity Index 500
and Fidelity Contrafund Subaccounts invest in the corresponding portfolios of
the Variable Insurance Products Fund II; the OCC Equity (formerly Quest for
Value Equity), OCC Small Cap (formerly Quest for Value Small Cap) and OCC
Managed (formerly Quest for Value Managed) Subaccounts invest in the
corresponding portfolios of the OCC Accumulation Trust; the Scudder Bond,
Scudder Growth and Income and Scudder International Subaccounts invest in the
corresponding portfolios of the Scudder Variable Life Investment Fund; the
Dreyfus Zero Coupon 2000, Dreyfus Growth and Income and Dreyfus Socially
Responsible Subaccounts invest in the corresponding portfolios of the Dreyfus
Variable Investment Fund; and the Federated Fund for U.S. Government Securities
II (formerly Federated U. S. Government Bond Fund) and Federated Utility Fund II
(formerly Federated Utility Fund) Subaccounts invest in the corresponding
portfolios of the Federated Insurance Series (formerly Insurance Management
Series).
The Growth, Money Market, Bond, Managed, Aggressive Growth and
International Subaccounts are available to owners of a Market Street VIP
contract. All twenty-three Subaccounts are available to owners of a Market
Street VIP/2 contract.
Net premiums from the Contracts are allocated to the Subaccounts in
accordance with contractholder instructions and are recorded as variable annuity
contract transactions in the statements of changes in net assets. Such amounts
are used to provide money to pay contract values under the Contracts (Note 4).
The Separate Account's assets are the property of Provident Mutual.
Transfers between investment portfolios include transfers between the
Subaccounts and the Guaranteed Account (not shown), which is part of Provident
Mutual's General Account.
18
<PAGE> 20
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies followed
by the Separate Account in the financial statements.
Investment Valuation:
Investment shares are valued at the net asset values of the respective
Portfolios. Transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date.
Realized Gains and Losses:
Realized gains and losses on sales of investment shares are determined
using the specific identification basis for financial reporting and income tax
purposes.
Federal Income Taxes:
The operations of the Separate Account are included in the Federal income
tax return of Provident Mutual. Under the provisions of the Contracts, Provident
Mutual has the right to charge the Separate Account for Federal income tax
attributable to the Separate Account. No charge is currently being made against
the Separate Account for such tax.
Estimates:
The preparation of the accompanying financial statements required
management to make estimates and assumptions that affect the reported values of
assets and liabilities and the reported amounts from operations and contract
transactions during the period. Actual results could differ from those
estimates.
19
<PAGE> 21
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS
At June 30, 1997, the investments of the respective Subaccounts are as
follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SHARES COST MARKET VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Market Street Fund, Inc.:
Growth Portfolio....................................... 167,458 $2,673,835 $2,999,175
Money Market Portfolio................................. 3,627,663 $3,627,663 $3,627,663
Bond Portfolio......................................... 44,942 $469,023 $475,935
Managed Portfolio...................................... 64,522 $881,596 $1,029,126
Aggressive Growth Portfolio............................ 27,343 $470,195 $558,615
International Portfolio................................ 157,712 $1,984,709 $2,228,467
Variable Insurance Products Fund:
High Income Portfolio.................................. 175,548 $2,076,711 $ 2,182,064
Equity-Income Portfolio................................ 353,460 $6,836,880 $7,797,330
Growth Portfolio....................................... 152,003 $4,568,575 $5,198,516
Variable Insurance Products Fund II:
Asset Manager Portfolio................................ 73,397 $1,147,148 $1,218,390
Index 500 Portfolio.................................... 39,228 $3,314,188 $4,064,779
Contrafund Portfolio................................... 78,596 $1,249,732 $1,409,224
OCC Accumulation Trust:
Equity Portfolio....................................... 83,078 $2,284,090 $2,723,303
Small Cap Portfolio.................................... 79,947 $1,710,848 $1,977,087
Managed Portfolio...................................... 138,265 $4,645,388 $5,461,452
Scudder Variable Life Investment Fund:
Bond Portfolio......................................... 77,030 $511,744 $515,334
Growth and Income Portfolio............................ 114,215 $1,055,648 $1,204,970
International Portfolio................................ 37,812 $495,618 $558,111
Dreyfus Variable Investment Fund:
Zero Coupon 2000 Portfolio............................. 28,879 $354,835 $354,053
Growth and Income Portfolio............................ 56,765 $1,159,151 $1,189,219
Socially Responsible Growth Portfolio.................. 11,891 $248,916 $277,893
Federated Insurance Series:
Fund for U.S. Government Securities II Portfolio....... 9,080 $91,058 $91,708
Utility Fund II Portfolio.............................. 12,990 $148,668 $160,690
</TABLE>
20
<PAGE> 22
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
During the six months ended June 30, 1997 and the year ended December 31,
1996, transactions in investment shares were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET STREET FUND, INC.
------------------------------------------------------------------------------------------------------------------
MONEY MARKET
GROWTH PORTFOLIO PORTFOLIO BOND PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased............................. 22,299 69,249 11,319,372 9,172,217 3,533 21,420
Shares received from reinvestment of:
Dividends.................................. 1,757 2,541 53,415 122,507 1,823
Capital gain distributions................. 17,059 3,268 701
---------- ---------- ----------- ----------- ---------- ----------
Total shares acquired........................ 41,115 75,058 11,372,787 9,294,724 4,234 23,243
Total shares redeemed........................ (3,080) (10,741) (10,276,103) (8,675,470) (3,165) (3,361)
---------- ---------- ----------- ----------- ---------- ----------
Net increase in shares owned................. 38,035 64,317 1,096,684 619,254 1,069 19,882
Shares owned, beginning of period............ 129,423 65,106 2,530,979 1,911,725 43,873 23,991
---------- ---------- ----------- ----------- ---------- ----------
Shares owned, end of period.................. 167,458 129,423 3,627,663 2,530,979 44,942 43,873
========== ========== =========== =========== ========== ==========
Cost of shares acquired...................... $ 672,241 $ 1,231,085 $ 11,372,787 $ 9,294,724 $ 44,230 $ 244,010
========== ========== =========== =========== ========== ==========
Cost of shares redeemed...................... $ 43,676 $ 152,747 $ 10,276,103 $ 8,675,470 $ 31,053 $ 33,431
========== ========== =========== =========== ========== ==========
</TABLE>
21
<PAGE> 23
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET STREET FUND, INC.
------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH
MANAGED PORTFOLIO PORTFOLIO INTERNATIONAL PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased.................................. 8,023 35,733 6,725 7,983 16,620 81,109
Shares received from reinvestment of:
Dividends....................................... 1,049 1,247 208 181 1,249 878
Capital gain distributions...................... 457 871 41 1,822 9,779 3,560
---------- ---------- ----------- ----------- ---------- ----------
Total shares acquired............................. 9,529 37,851 6,974 9,986 27,648 85,547
Total shares redeemed............................. (1,708) (1,431) (1,115) (3,280) (6,928) (18,493)
---------- ---------- ----------- ----------- ---------- ----------
Net increase in shares owned...................... 7,821 36,420 5,859 6,706 20,720 67,054
Shares owned, beginning of period................. 56,701 20,281 21,484 14,778 136,992 69,938
---------- ---------- ----------- ----------- ---------- ----------
Shares owned, end of period....................... 64,522 56,701 27,343 21,484 157,712 136,992
========== ========== =========== =========== ========== ==========
Cost of shares acquired........................... $ 141,110 $ 523,485 $ 131,187 $ 167,866 $ 350,925 $ 1,086,191
========== ========== =========== =========== ========== ==========
Cost of shares redeemed........................... $ 20,752 $ 17,498 $ 17,810 $ 51,091 $ 77,119 $ 217,726
========== ========== =========== =========== ========== ==========
</TABLE>
22
<PAGE> 24
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND
------------------------------------------------------------------------------------------------------------------
HIGH INCOME PORTFOLIO EQUITY-INCOME PORTFOLIO GROWTH PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased............................. 34,996 77,760 63,902 200,553 23,073 91,860
Shares received from reinvestment of:
Dividends.................................. 10,958 5,960 5,015 173 884 161
Capital gain distributions................. 1,354 1,166 25,217 4,932 3,957 4,065
-------- ---------- ---------- ---------- -------- ----------
Total shares acquired........................ 47,308 84,886 94,134 205,658 27,914 96,086
Total shares redeemed........................ (9,991) (18,971) (8,987) (35,921) (6,501) (14,970)
-------- ---------- ---------- ---------- -------- ----------
Net increase in shares owned................. 37,317 65,915 85,147 169,737 21,413 81,116
Shares owned, beginning of period............ 138,231 72,316 268,313 98,576 130,590 49,474
-------- ---------- ---------- ---------- -------- ----------
Shares owned, end of period.................. 175,548 138,231 353,460 268,313 152,003 130,590
======== ========== ========== ========== ======== ==========
Cost of shares acquired...................... $ 571,023 $ 1,005,014 $ 1,893,367 $ 3,962,136 $ 885,126 $ 2,841,783
======== ========== ========== ========== ======== ==========
Cost of shares redeemed...................... $ 108,779 $ 203,835 $ 153,560 $ 568,535 $ 194,999 $ 354,333
======== ========== ========== ========== ======== ==========
</TABLE>
23
<PAGE> 25
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
VARIABLE INSURANCE PRODUCTS FUND II
------------------------------------------------------------------------------------------------------------------
ASSET MANAGER INDEX 500 CONTRAFUND
PORTFOLIO PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased................................. 17,862 31,189 12,079 20,895 36,849 45,949
Shares received from reinvestment of:
Dividends...................................... 2,148 899 319 108 446
Capital gain distributions..................... 5,388 740 646 279 1,177
-------- ---------- ---------- ---------- -------- ----------
Total shares acquired............................ 25,398 32,828 13,044 21,282 38,472 45,949
Total shares redeemed............................ (2,337) (4,663) (651) (2,843) (4,869) (956)
-------- ---------- ---------- ---------- -------- ----------
Net increase in shares owned..................... 23,061 28,165 12,393 18,439 33,603 44,993
Shares owned, beginning of period................ 50,336 22,171 26,835 8,396 44,993
-------- ---------- ---------- ---------- -------- ----------
Shares owned, end of period...................... 73,397 50,336 39,228 26,835 78,596 44,993
======== ========== ========== ========== ======== ==========
Cost of shares acquired.......................... $ 408,106 $ 516,480 $ 1,240,105 $ 1,707,951 $ 642,120 $ 693,349
======== ========== ========== ========== ======== ==========
Cost of shares redeemed.......................... $ 32,209 $ 63,919 $ 46,968 $ 191,769 $ 71,656 $ 14,081
======== ========== ========== ========== ======== ==========
</TABLE>
24
<PAGE> 26
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
OCC ACCUMULATION TRUST
------------------------------------------------------------------------------------------------------------------
SMALL CAP
EQUITY PORTFOLIO PORTFOLIO MANAGED PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased............................. 20,061 42,807 15,945 65,607 37,193 80,900
Shares received from reinvestment of:
Dividends.................................. 618 319 404 387 1,265 473
Capital gain distributions................. 2,202 638 2,847 993 3,886 302
-------- ---------- -------- ---------- ---------- ----------
Total shares acquired........................ 22,881 43,764 19,196 66,987 42,344 81,675
Total shares redeemed........................ (3,296) (9,671) (3,223) (25,554) (5,054) (9,538)
-------- ---------- -------- ---------- ---------- ----------
Net increase in shares owned................. 19,585 34,093 15,973 41,433 37,290 72,137
Shares owned, beginning of period............ 63,493 29,400 63,974 22,541 100,975 28,838
-------- ---------- -------- ---------- ---------- ----------
Shares owned, end of period.................. 83,078 63,493 79,947 63,974 138,265 100,975
======== ========== ======== ========== ========== ==========
Cost of shares acquired...................... $ 695,118 $ 1,187,893 $ 433,372 $ 1,399,244 $ 1,578,427 $ 2,652,701
======== ========== ======== ========== ========== ==========
Cost of shares redeemed...................... $ 73,246 $ 192,083 $ 63,398 $ 462,998 $ 135,176 $ 224,761
======== ========== ======== ========== ========== ==========
</TABLE>
25
<PAGE> 27
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER VARIABLE LIFE INVESTMENT FUND
------------------------------------------------------------------------------------------------------------------
BOND PORTFOLIO GROWTH AND INCOME INTERNATIONAL
PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased.................................... 17,757 58,485 62,071 57,128 21,909 16,200
Shares received from reinvestment of:
Dividends......................................... 1,311 3,517 1,115 397 339
Capital gain distributions........................ 207 3,056 177
-------- ---------- -------- ---------- ---------- ----------
Total shares acquired............................... 19,275 62,002 66,242 57,525 22,425 16,200
Total shares redeemed............................... (8,938) (12,792) (8,531) (1,021) (740) (73)
-------- ---------- -------- ---------- ---------- ----------
Net increase in shares owned........................ 10,337 49,210 57,711 56,504 21,685 16,127
Shares owned, beginning of period................... 66,693 17,483 56,504 16,127
-------- ---------- -------- ---------- ---------- ----------
Shares owned, end of period......................... 77,030 66,693 114,215 56,504 37,812 16,127
======== ========== ======== ========== ========== ==========
Cost of shares acquired............................. $ 127,668 $ 414,413 $ 641,511 $ 493,834 $ 303,938 $ 201,830
======== ========== ======== ========== ========== ==========
Cost of shares redeemed............................. $ 63,513 $ 85,176 $ 71,160 $ 8,537 $ 9,237 $ 913
======== ========== ======== ========== ========== ==========
</TABLE>
26
<PAGE> 28
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DREYFUS VARIABLE INVESTMENT FUND
------------------------------------------------------------------------------------------------------------------
GROWTH AND INCOME
ZERO COUPON PORTFOLIO SOCIALLY RESPONSIBLE
2000 PORTFOLIO PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Shares purchased........................... 8,548 23,636 28,768 34,826 6,503 6,129
Shares received from reinvestment of:
Dividends................................ 679 1,234 433 237 14
Capital gain distributions............... 88 467 3,285 237
-------- -------- -------- -------- -------- --------
Total shares acquired...................... 9,227 24,958 29,668 38,348 6,503 6,380
Total shares redeemed...................... (7,611) (8,689) (9,806) (1,445) (968) (24)
-------- -------- -------- -------- -------- --------
Net increase in shares owned............... 1,616 16,269 19,862 36,903 5,535 6,356
Shares owned, beginning of period.......... 27,263 10,994 36,903 6,356
-------- -------- -------- -------- -------- --------
Shares owned, end of period................ 28,879 27,263 56,765 36,903 11,891 6,356
======== ======== ======== ======== ======== ========
Cost of shares acquired.................... $ 112,825 $ 309,524 $ 593,117 $ 793,353 $141,072 $126,413
======== ======== ======== ======== ======== ========
Cost of shares redeemed.................... $ 96,602 $ 106,079 $ 197,601 $ 29,718 $ 18,119 $ 450
======== ======== ======== ======== ======== ========
</TABLE>
27
<PAGE> 29
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- continued
- --------------------------------------------------------------------------------
3. INVESTMENTS, CONTINUED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FEDERATED INSURANCE SERIES
------------------------------------------------------------------------------------------------------------------
FUND FOR UTILITY FUND II
U.S. GOVERNMENT PORTFOLIO
SECURITIES II PORTFOLIO
------------------------------------------------------------------------------------------------------------------
1997 1996 1997 1996
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares purchased............................................. 1,498 7,227 5,386 8,476
Shares received from reinvestment of:
Dividends.................................................. 235 156 221 148
Capital gain distributions................................. 291
------- ------- ------- -------
Total shares acquired........................................ 1,733 7,383 5,898 8,624
Total shares redeemed........................................ (28) (8) (1,497) (35)
------- ------- ------- -------
Net increase in shares owned................................. 1,705 7,375 4,401 8,589
Shares owned, beginning of period............................ 7,375 8,589
------- ------- ------- -------
Shares owned, end of period.................................. 9,080 7,375 12,990 8,589
======= ======= ======= =======
Cost of shares acquired...................................... $ 17,359 $ 74,062 $ 70,346 $ 95,064
======= ======= ======= =======
Cost of shares redeemed...................................... $ 280 $ 83 $ 16,361 $ 381
======= ======= ======= =======
</TABLE>
28
<PAGE> 30
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Notes to Financial Statements (unaudited) -- (concluded)
- --------------------------------------------------------------------------------
4. RELATED PARTY TRANSACTIONS
Certain deductions are made from the Subaccounts and/or the premiums by
Provident Mutual. The deductions may include (1) surrender charges, (2)
administration fees, (3) transfer processing fees, (4) mortality and expense
risk charges and (5) premium taxes. Premiums adjusted for these deductions are
recorded as net premiums in the statement of changes in net assets. See original
policy documents for specific charges assessed.
There are no sales expenses deducted from premiums at the time the premiums
are paid. If a contract has not been in force for six full years, upon surrender
or for certain withdrawals, a surrender charge is deducted from the proceeds.
However, subject to certain restrictions, up to 10% of the contract account
value as of the beginning of a contract year may be surrendered or withdrawn
free of surrender charges.
An annual administrative fee of $30 is deducted from the contract account
value on each contract anniversary date beginning one year from the issue date
of the contract. In addition, to compensate for costs associated with
administration of the Market Street VIP/2 contracts, Provident Mutual deducts a
daily asset-based administration charge from the assets of the Separate Account
equal to an annual rate of .15%. This daily asset-based administration charge is
reported in the mortality and expense risk charges in the statements of
operations.
During any given contract year, the first four transfers by Market Street
VIP contractholders and the first twelve transfers by Market Street VIP/2
contractholders of amounts in the Subaccounts are free of charge. A fee of $25
is assessed for each additional transfer. No transfer fees were incurred during
the six months ended June 30, 1997 or the year ended December 31, 1996.
The Separate Account is charged a daily mortality and expense risk charge
at an annual rate of 1.20% for the Market Street VIP contracts and 1.25% for the
Market Street VIP/2 contracts. Provident Mutual reserves the right to increase
this charge for the Market Street VIP contracts, but in no event will it be
greater than 1.25%.
State premium taxes, when applicable, will be deducted depending upon when
such taxes are paid to the taxing authority. The premium taxes are deducted
either from premiums as they are received or from the proceeds upon withdrawal
from or surrender of the contract or upon application of the proceeds to a
payment option.
29
<PAGE> 31
- --------------------------------------------------------------------------------
The Provident Mutual Variable Annuity Separate Account
of Provident Mutual Life Insurance Company
Supplementary Information (unaudited)
- --------------------------------------------------------------------------------
The table below shows the net rates of return for the Subaccounts. The net
rate of return is applicable to net assets for a variable annuity contract whose
contract year commences with the beginning date of the year shown and is not
based on the average net assets in the Subaccounts during the year.
The performance for each Subaccount is shown as the net rate of return which
reflects the Subaccounts' investment income and capital gains and losses,
realized or unrealized, less charges against the Subaccounts' assets for the
year shown.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MONEY AGGRESSIVE
GROWTH MARKET BOND MANAGED GROWTH
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
MARKET STREET VIP
For the six months ended:
June 30, 1997............... 12.61% 1.96% 1.86% 10.81% 10.93%
For the year ended:
December 31, 1996........... 17.81% 3.62% 1.41% 10.29% 19.14%
December 31, 1995........... 28.84% 4.35% 18.91% 22.87% 12.13%
December 31, 1994........... 0.60% (1) 2.45%(2) (6.85)%(1) (2.06)%(3) (2.18)%(1)
MARKET STREET VIP/2
For the six months ended:
June 30, 1997............... 12.50% 1.86% 1.76% 10.70% 10.82%
For the year ended:
December 31, 1996........... 17.60% 3.42% 1.21% 10.08% 18.93%
December 31, 1995........... 28.58% 4.14% 18.67% 22.62% 11.91%
December 31, 1994........... (1.40)% (12) 0.69%(13) 0.68%(14) (0.09)%(15) 0.99%(16)
</TABLE>
<TABLE>
<CAPTION>
FIDELITY FIDELITY FIDELITY FIDELITY
INTERNA- HIGH EQUITY- FIDELITY ASSET INDEX
TIONAL INCOME INCOME GROWTH MANAGER 500
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
MARKET STREET VIP
For the six months ended:
June 30, 1997............... 13.18% -- -- -- -- --
For the year ended:
December 31, 1996........... 9.25% -- -- -- -- --
December 31, 1995........... 12.95% -- -- -- -- --
December 31, 1994........... (3.77)%(1) -- -- -- -- --
MARKET STREET VIP/2
For the six months ended:
June 30, 1997............... 13.06% 6.96% 15.59% 13.04% 10.44% 19.37%
For the year ended:
December 31, 1996........... 9.04% 12.13% 12.38% 12.80% 12.70% 20.80%
December 31, 1995........... 12.72% 18.93% 33.22% 33.49% 15.33% 35.29%
December 31, 1994........... (3.74)%(12) 0.01% (12) (1.73)% (12) 0.94%(12) (3.06)%(16) 1.00%(17)
</TABLE>
The net rate of return was calculated from the date contractholder funds were
first allocated to the Subaccount referenced above as follows: (1) February 14,
1994, (2) January 28, 1994, (3) March 10, 1994, (4) May 21, 1996, (5) June 10,
1996, (6) May 13, 1996, (7) May 28, 1996, (8) July 26, 1996, (9) August 19,
1996, (10) July 8, 1996, (11) March 1, 1995, (12) October 21, 1994, (13) October
19, 1994, (14) November 22, 1994, (15) November 14, 1994, (16) October 26, 1994,
(17) November 29, 1994 and (18) November 15, 1994.
30
<PAGE> 32
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SCUDDER DREYFUS DREYFUS
FIDELITY OCC OCC OCC SCUDDER GROWTH SCUDDER ZERO GROWTH
CONTRAFUND EQUITY SMALL CAP MANAGED BOND AND INCOME INTERNATIONAL COUPON 2000 AND INCOME
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
-- -- -- -- -- -- -- -- --
10.86% 12.87% 13.85% 13.20% 2.35% 17.74% 13.32% 1.42% 8.47%
9.05%(4) 21.34% 16.76% 20.75% 1.05% 10.76%(5) 6.06%(6) 0.85% 2.45%(7)
-- 36.93% 13.63% 43.54% 16.53% -- -- 11.41%(11) --
-- (2.54)%(18) 2.02%(12) (1.73)%(12) 0.84%(16) -- -- -- --
<CAPTION>
DREYFUS FEDERATED FUND FOR FEDERATED
SOCIALLY U.S. GOVERNMENT UTILITY
RESPONSIBLE SECURITIES II FUND FUND II
- ------------------------------------------------------
<S> <C> <C> <C> <C>
-- -- --
-- -- --
-- -- --
-- -- --
15.52% 2.30% 8.22%
16.85%(8) 2.35%(9) 8.16%(10)
-- -- --
-- -- --
</TABLE>
31
<PAGE> 33
SEMI-ANNUAL REPORT
June 30, 1997
- --------------------------
PROVIDENT MUTUAL LIFE
INSURANCE COMPANY
PROVIDENT MUTUAL VARIABLE
ANNUITY SEPARATE ACCOUNT
MARKET STREET FUND, INC.
- --------------------------
[PROVIDENT MUTUAL LOGO]
Variable Annuity contracts issued by
Provident Mutual are distributed by
1717 Capital Management Company,
Wilmington, DE, a registered broker-dealer.
This Report has been prepared for
contractholders. It is not authorized for other
distribution unless preceded or
accompanied by an effective prospectus.
PM 506 6.97
- ---------------
BULK RATE
U.S. POSTAGE
PAID
WILMINGTON, DE
PERMIT NO. 1387
- ---------------
