<PAGE>
PRESIDENT'S REPORT
Dear Shareholder:
As promised in my last letter (sent to all but our most recent shareholders),
we have completed our national search for a new money manager to serve as
investment manager of our Fund. We are pleased to announce that, effective
January 1, 1997, Awad & Associates took over the investment selection
responsibilities for The Timothy Plan--subject to review by Timothy Partners,
Ltd. Mr. Jim Awad, Chairman of Awad & Associates, is one of the most
respected--and successful--money managers on Wall Street.
Please take a minute to review his letter on the following page to get a sense
of his firm's outlook for the year ahead. Our commitment to our shareholders
remains firm to deliver top-tier investment returns without compromising moral
principles. With the assistance of Awad & Associates, we plan to demonstrate
to the investment world that we can do just that!
We believe now is the time for Christians and others to exercise responsible
stewardship in the investment of the assets with which they have been
entrusted. There is a clear connection between our personal moral foundation
and the witness we present to the world through our actions--in this case, the
care we take in making our investment decisions. The Timothy Plan gives every
concerned investor an opportunity to "come out from among them" and invest
with the confidence that the investment assets placed with us will be managed
conservatively, ethically and as profitably as the markets allow.
You are to be commended for your convictions which led you to become part of
our ever-growing family of investors. Thank you and may God richly bless you.
Sincerely,
/s/ Arthur D. Ally
Arthur D. Ally
President
January 1, 1997
<PAGE>
AWAD & ASSOCIATES
INVESTMENT UPDATE
JANUARY 1, 1997
Awad & Associates looks forward with enthusiasm to delivering sound investment
results for the shareholders of The Timothy Plan (the "Fund") in 1997.
The environment for financial assets is favorable: U.S. corporations are in
excellent shape; the economy is growing at a moderate, sustainable rate;
corporate profits are growing nicely; inflation remains low and interest rates
are subdued.
In addition, as the baby boomers begin to save for retirement, the demand for
financial assets should grow considerably for the next several years.
While always cognizant of risk and mindful that returns should be delivered
with a minimum of risk, we at Awad & Associates will attempt to use this
environment to ferret out opportunity for the Fund and its shareholders.
The Fund is invested in companies which show consistent earnings growth as
well as good balance sheets, and where management owns significant amounts of
stock. These issues are still selling at low valuations in the marketplace,
which should prove to be very beneficial for our existing and future
shareholders.
We look forward to serving you, while at the same time remaining true to the
goals of The Timothy Plan.
James D. Awad
Chairman
<PAGE>
SCHEDULE OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----------
<C> <S> <C>
COMMON STOCKS - 73.41%
COMMERCIAL SERVICES - 8.18%
5,700 Deluxe Corp. ............................................. $ 186,675
9,000 Harland (John H.) Co. .................................... 297,000
7,200 McGraw-Hill Companies, Inc. .............................. 332,100
5,600 Pinkerton's, Inc.*........................................ 140,700
-----------
956,475
-----------
CONSUMER DURABLES - 4.10%
700 Bandag, Inc. ............................................. 33,163
3,000 Jostens, Inc. ............................................ 63,375
10,000 Polaris Industries, Inc. ................................. 237,500
5,400 Stanley Works............................................. 145,800
-----------
479,838
-----------
CONSUMER NON-DURABLES - 3.22%
5,000 Oshkosh B'Gosh, Inc., Class A............................. 76,250
30,000 Stride Rite Corp. ........................................ 300,000
-----------
376,250
-----------
ELECTRONIC TECHNOLOGY - 8.95%
3,860 General Dynamics Corp. ................................... 272,130
8,000 General Instrument Corp.*................................. 173,000
5,000 Teradyne, Inc.*........................................... 121,875
4,000 Texas Instruments, Inc. .................................. 255,000
3,400 United Technologies Corp. ................................ 224,400
-----------
1,046,405
-----------
ENERGY MINERALS - 7.02%
1,600 Atlantic Richfield Co. ................................... 212,000
2,000 British Petroleum Co. PLC ADR............................. 282,750
3,200 MAPCO, Inc. .............................................. 108,800
4,900 Phillips Petroleum Co. ................................... 216,825
-----------
820,375
-----------
FINANCE - 15.81%
5,500 AFLAC, Inc. .............................................. 235,125
5,410 Allstate Corp. ........................................... 313,104
11,200 American Health Properties, Inc. ......................... 267,400
2,500 American International Group, Inc. ....................... 270,625
3,000 Franklin Resources, Inc. ................................. 205,125
2,900 Household International, Inc. ............................ 267,525
4,000 UNUM Corp. ............................................... 289,000
-----------
1,847,904
-----------
HEALTH SERVICES - 0.51%
4,500 Syncor International Corp.*............................... 60,187
-----------
HEALTH TECHNOLOGY - 1.75%
3,500 Bio-Rad Laboratories, Inc., Class A*...................... 105,000
5,000 Datascope Corp.*.......................................... 100,000
-----------
205,000
-----------
NON-ENERGY MINERALS - 0.49%
5,000 J & L Specialty Steel, Inc. .............................. 56,875
-----------
</TABLE>
<PAGE>
SCHEDULE OF INVESTMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET
SHARES VALUE
------ -----------
<C> <S> <C>
COMMON STOCKS - CONTINUED
PROCESS INDUSTRIES - 1.57%
4,000 LeaRonal, Inc. ...................................... $ 92,000
2,450 National Service Industries, Inc. ................... 91,569
-----------
183,569
-----------
PRODUCER MANUFACTURING - 6.43%
6,000 American Standard Companies, Inc.*................... 229,500
3,500 Armstrong World Industries, Inc. .................... 243,250
4,400 Cooper Industries, Inc. ............................. 185,350
2,000 Kaydon Corp. ........................................ 94,250
-----------
752,350
-----------
RETAIL TRADE - 4.54%
10,000 Brookstone, Inc.*.................................... 105,000
3,500 Penney (J.C.) Co. ................................... 170,625
8,520 Toys "R" Us, Inc.*................................... 255,600
-----------
531,225
-----------
TECHNOLOGY SERVICES - 2.02%
7,000 Hyperion Software Corp.*............................. 148,750
2,000 National Data Corp. ................................. 87,000
-----------
235,750
-----------
TRANSPORTATION - 3.80%
9,200 Illinois Central Corp. .............................. 294,400
10,400 Yellow Corp.*........................................ 149,500
-----------
443,900
-----------
UTILITIES - 5.02%
5,000 Aliant Communications, Inc. ......................... 85,000
3,600 Bell Atlantic Corp. ................................. 233,100
7,300 Carolina Power & Light Co. .......................... 266,450
-----------
584,550
-----------
TOTAL COMMON STOCKS (COST $7,660,980)................ 8,580,653
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
SHORT-TERM INVESTMENTS - 26.23%
$3,066,028 The Bank of New York Cash Reserve, 4.40%............. 3,066,028
-----------
TOTAL SHORT TERM INVESTMENTS (COST $3,066,028)....... 3,066,028
-----------
TOTAL INVESTMENTS (COST $10,727,008)** - 99.64%...... 11,646,681
OTHER ASSETS, LESS OTHER LIABILITIES - 0.36%......... 42,511
-----------
NET ASSETS - 100.00%................................. $11,689,192
===========
</TABLE>
* Non-income producing security
** Cost for Federal income tax purposes is $10,727,008 and net unrealized
appreciation consists of:
Gross unrealized appreciation........................ $ 1,052,140
Gross unrealized depreciation........................ (132,467)
-----------
Net unrealized appreciation.......................... $ 919,673
===========
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities at market value (identified cost
$10,727,008) (Note 1)............................................ $11,646,681
Cash.............................................................. 33,262
Receivables:
Dividends and interest........................................... 23,266
Capital stock sold............................................... 905
Deferred organization costs (Note 1).............................. 27,396
Due from Advisor (Note 3)......................................... 2,629
Other assets...................................................... 356
-----------
TOTAL ASSETS.................................................... 11,734,495
-----------
LIABILITIES
Capital stock redeemed............................................ 26,394
Accrued expenses.................................................. 18,909
-----------
TOTAL LIABILITIES............................................... 45,303
-----------
NET ASSETS......................................................... $11,689,192
===========
INSTITUTIONAL SHARES:
Net assets (Unlimited shares of $0.001 par beneficial
interest authorized; 690,247 shares outstanding)................ $ 7,760,309
===========
Net asset value, offering and redemption price per Institutional
Share ($7,760,309/ 690,247 shares).............................. $ 11.24
===========
RETAIL SHARES:
Net assets (Unlimited shares of $0.001 par beneficial
interest authorized; 350,224 shares outstanding)................ $ 3,928,883
===========
Net asset value and redemption price per Retail Share
($3,928,883 / 350,224 shares)................................... $ 11.22
===========
Offering price per share ($11.22 / 0.9825)....................... $ 11.42
===========
SOURCE OF NET ASSETS
At December 31, 1996, net assets consisted of:
Paid-in capital.................................................. $10,605,097
Accumulated net realized gain on investments..................... 164,422
Net unrealized appreciation on investments....................... 919,673
-----------
NET ASSETS...................................................... $11,689,192
===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends........................................................... $ 190,723
Interest............................................................ 55,616
----------
TOTAL INCOME....................................................... 246,339
----------
EXPENSES
Investment advisory fees (Note 3)................................... 78,848
Transfer agent fees................................................. 68,158
Administration fees................................................. 62,581
Distribution fees (Note 3).......................................... 36,568
Accounting fees..................................................... 36,104
Registration fees................................................... 33,163
Amortization of organization costs (Note 1)......................... 12,378
Printing expense.................................................... 10,798
Custodian fees...................................................... 9,182
Auditing fees....................................................... 6,500
Insurance expense................................................... 2,484
----------
TOTAL EXPENSES..................................................... 356,764
Expenses waived and reimbursed by Advisor (Note 3)................ (194,967)
----------
NET EXPENSES....................................................... 161,797
----------
NET INVESTMENT INCOME.............................................. 84,542
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain from security transactions........................ 164,422
Net change in unrealized appreciation of investments................ 903,008
----------
Net realized and unrealized gain on investments..................... 1,067,430
----------
Net increase in net assets resulting from operations................ $1,151,972
==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995*
----------------- ------------------
<S> <C> <C>
OPERATIONS
Net investment income.................... $ 84,542 $ 56,397
Net realized gain on investments......... 164,422 157,742
Net change in unrealized appreciation of
investments............................. 903,008 33,350
----------- ----------
Net increase in net assets resulting
from operations........................ 1,151,972 247,489
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income:
Institutional Shares.................... (66,939) (64,056)
Retail Shares........................... (23,283) (5,675)
Distributions from net capital gains:
Institutional Shares.................... 0 (143,982)
Retail Shares........................... 0 (12,195)
----------- ----------
Net decrease in net assets resulting
from distributions..................... (90,222) (225,908)
----------- ----------
CAPITAL SHARE TRANSACTIONS
Shares sold:
Institutional Shares.................... 2,096,319 4,233,412
Retail Shares........................... 3,317,594 626,513
Shares redeemed:
Institutional Shares.................... (1,323,483) (562,782)
Retail Shares........................... (302,910) 0
Shares reinvested:
Institutional Shares.................... 63,849 202,144
Retail Shares........................... 22,639 15,672
----------- ----------
Increase in net assets derived from
capital share transactions (a).......... 3,874,008 4,514,959
----------- ----------
Total increase in net assets............ 4,935,758 4,536,540
----------- ----------
NET ASSETS
Beginning of period...................... 6,753,434 2,216,894
----------- ----------
End of period............................ $11,689,192 $6,753,434
=========== ==========
(a)Transactions in capital stock were:
Shares sold:
Institutional Shares................... 201,664 414,090
Retail Shares.......................... 314,924 59,955
Shares redeemed:
Institutional Shares................... (126,226) (54,594)
Retail Shares.......................... (28,244) 0
Shares reinvested:
Institutional Shares................... 5,687 20,174
Retail Shares.......................... 2,022 1,567
----------- ----------
Increase in shares outstanding.......... 369,827 441,192
=========== ==========
</TABLE>
* The Retail Shares commenced investment operations on August 25, 1995.
See accompanying notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
The table below sets forth financial data for one share of capital stock
outstanding throughout each period presented.
<TABLE>
<CAPTION>
INSTITUTIONAL SHARES RETAIL SHARES
----------------------------------------- -----------------------------
FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD
ENDED ENDED ENDED ENDED ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1996 1995 1994 * 1996 1995 **
------------ ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD.... $ 10.07 $ 9.66 $ 10.00 $ 10.08 $ 10.49
------- ------ ------- ------- -------
Income From Investment
Operations:
Net investment
income............... 0.10 0.11 0.06 0.07 0.11
Net gains (losses) on
securities (both
realized and
unrealized).......... 1.17 0.66 (0.34) 1.14 (0.16)
------- ------ ------- ------- -------
Total from investment
operations........... 1.27 0.77 (0.28) 1.21 (0.05)
------- ------ ------- ------- -------
Less Distributions
Distributions from net
investment income:
Institutional Shares.. (0.10) (0.11) (0.06) 0.00 0.00
Retail Shares......... 0.00 0.00 0.00 (0.07) (0.11)
Distributions from net
capital gains:
Institutional Shares.. 0.00 (0.25) 0.00 0.00 0.00
Retail Shares......... 0.00 0.00 0.00 0.00 (0.25)
------- ------ ------- ------- -------
Total distributions... (0.10) (0.36) (0.06) (0.07) (0.36)
------- ------ ------- ------- -------
NET ASSET VALUE, END OF
PERIOD................. $ 11.24 $10.07 $ 9.66 $ 11.22 $ 10.08
======= ====== ======= ======= =======
TOTAL RETURN............ 12.59% 7.93% (2.84%) 11.98% /1/ (0.46%)/1/
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (in 000s)...... $ 7,760 $6,133 $ 2,217 $ 3,929 $ 620
Ratio of expenses to
average net assets:
Before expense
reimbursement........ 3.70% 5.84% 18.62% /2/ 4.30% 6.44% /2/
After expense
reimbursement........ 1.60% 1.60% 1.60% /2/ 2.20% 2.20% /2/
Ratio of net investment
income to average net
assets:
Before expense
reimbursement........ (1.05%) (2.96%) (15.49%)/2/ (1.65%) (3.56%)/2/
After expense
reimbursement........ 1.05% 1.28% 1.53% /2/ 0.45% 0.68% /2/
Portfolio turnover
rate.................. 93.08% 34.12% 8.31% 93.08% 34.12%
Average commission rate
paid.................. $0.0593 N/R /3/ N/R /3/ $0.0593 N/R /3/
</TABLE>
* The Institutional Shares commenced investment operations on March 21, 1994.
** The Retail Shares commenced investment operations on August 25, 1995.
/1/Total return calculation does not reflect sales load.
/2/Annualized.
/3/Not Required.
See accompanying notes to financial statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
- -------------------------------------------------------------------------------
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
The Timothy Plan (the "Fund" ) is organized as a series Delaware business
trust pursuant to a trust agreement dated December 16, 1993. The Fund is
registered under the Investment Company Act of 1940, as amended, as an open-
end diversified management investment company. The Fund's objective is long-
term capital growth, with a secondary objective of current income. The Fund
seeks to achieve its investment objective by investing primarily in common
stocks and ADRs while abiding by ethical standards established for investments
by the Fund. The Fund currently consists of one series comprised of two
separate classes of shares (Institutional Class shares and Retail Class
shares) which vary with respect to sales charges, distribution costs, voting
rights and dividends. Shareholders of Retail Class shares are subject to a
sales charge and each class is subject to different 12b-1 Plan expenses. The
following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
policies are in conformity with generally accepted accounting principles for
investment companies.
A. SECURITY VALUATION. Investments in securities traded on a national
securities exchange are valued at the last reported sales price on the last
business day of the period. Unlisted securities, or listed securities in which
there were no sales, are valued at the mean of the closing bid and ask prices.
Short-term obligations with remaining maturities of 60 days or less are valued
at cost plus accrued interest which approximates market value.
B. INVESTMENT INCOME AND SECURITIES TRANSACTIONS. Security transactions are
accounted for on the date the securities are purchased or sold (trade date).
Cost is determined and gains and losses are based on the identified cost basis
for both financial statement and federal income tax purposes. Dividend income
and distributions to shareholders are reported on the ex-dividend date.
Interest income and expenses are accrued daily.
C. NET ASSET VALUE PER SHARE. Net asset value per share of the capital stock
of the Fund is determined daily as of the close of trading on the New York
Stock Exchange by dividing the value of its net assets by the number of Fund
shares outstanding. Net Asset Value is calculated separately for each class of
the Fund based on expenses applicable to a particular class. The net asset
value of the classes may differ because of different fees and expenses charged
to each class.
D. ORGANIZATION COSTS. Organization costs are being amortized on a straight
line basis over five years.
E. FEDERAL INCOME TAXES. It is the policy of the Fund to comply with all
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no federal income tax provision is required.
F. USE OF ESTIMATES. In preparing financial statements in conformity with
generally accepted accounting principles, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements, as well as the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.
NOTE 2 - PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term investments,
aggregated $9,127,059 and $6,937,670 respectively, for the year ended December
31, 1996.
<PAGE>
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1996
- --------------------------------------------------------------------------------
NOTE 3 - INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Timothy Partners, LTD., (the "Advisor") is the investment advisor for the Fund
pursuant to an Investment Advisory Agreement (the "Agreement") effective March
21, 1994, as amended August 28, 1995. Under the terms of the Agreement, the
Advisor receives a fee, accrued daily and paid monthly, at an annual rate of
0.85% of the average daily net assets of the Fund. The Advisor has voluntarily
agreed to waive its fees to the extent total annualized expenses, inclusive of
distribution expenses, exceed 1.60%, with respect to the Institutional Class,
and 2.20%, with respect to the Retail Class, of the Fund's average daily net
assets. For the year ended December 31, 1996, Advisory fees of $78,848 were
waived by the Advisor and the Advisor reimbursed the Fund $194,967. For the
year ended December 31, 1996, Systematic Financial Management, L.P., was paid
by the advisor, a monthly fee at an annual rate of 0.50% of the average daily
net assets of the Fund. Effective January 1, 1997 the Fund and the Advisor
engaged a new investment manager, Awad & Associates, pursuant to a new sub-
investment advisory agreement. The Fund has adopted a Distribution Plan (the
"Plan"), on behalf of each class of shares, pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, which permits the Fund to pay
certain expenses associated with the distribution of its shares. The Plan
provides that the Fund will reimburse FPS Broker Services, Inc. (the
"Distributor"), the Fund's sole underwriter and distributor, for actual
distribution and shareholder servicing expenses incurred by the Distributor not
exceeding, on an annual basis, 0.25%, with respect to the Institutional Class
and 0.85%, with respect to the Retail Class, of the Fund's average daily net
assets. For the year ended December 31, 1996, the Fund reimbursed the
Distributor $36,568 for distribution costs incurred. Certain officers and
trustees of the Fund are affiliated persons of the Advisor.
- --------------------------------------------------------------------------------
ILLUSTRATION OF $10,000 INVESTMENT
TIMOTHY PLAN PERFORMANCE GRAPH
(INSTITUTIONAL CLASS)
[LINE GRAPH APPEARS HERE]
(INSTITUTIONAL CLASS)
- -----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- -----------------------------------------
1 Year: 12.59% Since Inception: 6.16%
- -----------------------------------------
Date S&P 500 TIMOTHY
INDEX PLAN
3/21/94 10,000 10,000
4/94 9,686.42 9,760.
6/94 9,604.07 9,530.
8/94 10,325.76 10,020.
10/94 10,299.42 9,980.
12/94 10,071.4 9,715.63
2/95 10,735.21 9,816.21
4/95 11,377.93 10,097.82
6/95 12,107.57 10,409.61
8/95 12,540.82 10,540.36
10/95 13,022.99 10,349.26
12/95 13,857.08 10,485.81
2/96 14,461.47 10,756.55
4/96 14,814.92 11,141.82
6/96 15,254.9 11,079.35
8/96 14,888.28 10,735.72
10/96 16,160.55 11,193.89
12/96 17,038.11 11,805.83
Past performance is not indicative of
future results.
(RETAIL CLASS)
[LINE GRAPH APPEARS HERE]
Past performance is not indicative of future results.
Note: The above graph reflects the impact of sales charges which were placed on
purchased.
(RETAIL CLASS)
- -----------------------------------------
AVERAGE ANNUAL TOTAL RETURN
- -----------------------------------------
1 Year: 10.00% Since Inception: 6.83%
- -----------------------------------------
Date S&P 500 TIMOTHY
INDEX PLAN
8/25/95 10,000 9,825
8/95 10,025 9,794.39
9/95 10,448.06 9,869.15
10/95 10,410.44 9,616.82
11/95 10,867.46 9,943.92
12/95 11,077.2 9,758.75
1/96 11,453.83 9,807.16
2/96 11,560.35 10,000.79
3/96 12,670.14 10,097.6
4/96 12,856.39 10,359.
5/96 13,188.09 10,436.45
6/96 13,238.2 10,281.54
7/96 12,653.07 9,710.35
8/96 12,920.05 9,952.38
9/96 13,647.45 10,194.41
10/96 14,024.12 10,368.68
11/96 15,084.35 10,959.23
12/96 14,785.68 10,928.27
Past performance is not indicative of future results.
Note: The above graph reflects the impact of sales charges which were placed on
purchases.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
- -------------------------------------------------------------------------------
BOARD OF TRUSTEES AND SHAREHOLDERS
THE TIMOTHY PLAN
WINTER PARK, FLORIDA
We have audited the accompanying statement of assets and liabilities of The
Timothy Plan, including the schedule of investments, as of December 31, 1996
and the related statement of operations for the year then ended, and the
statement of changes in net assets for each of the two years then ended and
the financial highlights for each of the two years then ended and for the
period March 21, 1994 (commencement of operations) to December 31, 1994. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1996, by correspondence with the custodian. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Timothy Plan as of December 31, 1996, the results of its operations for the
year then ended, the changes in its net assets for each of the two years then
ended and the financial highlights for each of the two years then ended and
for the period March 21, 1994 to December 31, 1994, in conformity with
generally accepted accounting principles.
/s/ Tait, Weller & Baker
PHILADELPHIA, PENNSYLVANIA
JANUARY 17, 1997
<PAGE>
THE TIMOTHY PLAN
1304 West Fairbanks Avenue
Winter Park, FL 32789
BOARD OF TRUSTEES
Arthur D. Ally
Joseph E. Boatwright
Daniel D. Busby
Philip B. Crosby
Wesley W. Pennington
Mark Schweizer
Jock M. Sneddon
OFFICERS
Arthur D. Ally, President
Joseph E. Boatwright, Secretary
Wesley W. Pennington, Treasurer
INVESTMENT ADVISOR
Timothy Partners, LTD.
1304 West Fairbanks Avenue
Winter Park, FL 32789
DISTRIBUTOR
FPS Broker Services, Inc.
3200 Horizon Drive
King of Prussia, PA 19406
TRANSFER AGENT
FPS Services, Inc.
3200 Horizon Drive
King of Prussia, PA 19406
AUDITORS
Tait, Weller & Baker
Two Penn Center Plaza, Suite 700
Philadelphia, PA 19102
LEGAL COUNSEL
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103
FOR ADDITIONAL INFORMATION OR
A PROSPECTUS, PLEASE CALL:
1-800-TIM-PLAN
(1-800-846-7526)
This report is submitted for the general information of the shareholders of
the Fund. It is not authorized for distribution to prospective investors in
the Fund unless preceded or accompanied by an effective Prospectus which
includes details regarding the Fund's objectives, policies, expenses and other
information.
[ARTWORK APPEARS HERE]
ANNUAL
REPORT
December 31, 1996
