-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UT+CmMjZY5j0sa24nB0VohAQRK9jTZmjaYS1fV3m8YD9+Vy/fLjX+TKq2wn2AGiF A9iUaZmPHGijJSwwxE3YOw== 0000935069-05-000656.txt : 20050318 0000935069-05-000656.hdr.sgml : 20050318 20050318164355 ACCESSION NUMBER: 0000935069-05-000656 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20040831 FILED AS OF DATE: 20050318 DATE AS OF CHANGE: 20050318 EFFECTIVENESS DATE: 20050318 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RBB FUND INC CENTRAL INDEX KEY: 0000831114 IRS NUMBER: 510312196 STATE OF INCORPORATION: MD FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-05518 FILM NUMBER: 05692128 BUSINESS ADDRESS: STREET 1: 400 BELLEVUE PKWY STE 100 CITY: WILMINGTON STATE: DE ZIP: 19809 BUSINESS PHONE: 3027911700 MAIL ADDRESS: STREET 1: 400 BELLEVUE PKWY STREET 2: SUITE 152 CITY: WILMINGTON STATE: DE ZIP: 19809 FORMER COMPANY: FORMER CONFORMED NAME: FUND INC /DE/ DATE OF NAME CHANGE: 19600201 N-CSR 1 g15221numeric_ncsr.txt NUMERIC INVESTORS - SMALL CAP VALUE FUND AR 2004 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-05518 --------- THE RBB FUND, INC. ------------------------------------------------------------------ (Exact name of registrant as specified in charter) 300 East Lombard Street Baltimore, MD 21202 ------------------------------------------------------------------ (Address of principal executive offices) (Zip code) The Corporation Trust Incorporated 300 East Lombard Street Baltimore, MD 21202 ------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: 302-792-2555 ------------ Date of fiscal year end: August 31 --------- Date of reporting period: August 31, 2004 --------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. The Report to Shareholders is attached herewith. (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] (LOGO) n/i NUMERIC INVESTORS [GRAPHIC OMITTED] Small Cap Value Fund Annual Report August 31, 2004 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND ADVISER'S REPORT March 17, 2005 Dear Shareholder: We are pleased to provide you with the 2004 Annual Report on the performance of the n/i NUMERIC INVESTORS Small Cap Value Fund (the "Fund") for the fiscal year ended August 31, 2004. INVESTMENT DISCUSSION The table below compares the returns of the Fund with the returns of its benchmark over several periods of interest.
TOTAL RETURNS ------------- AVERAGE ANNUAL AVERAGE SIX MONTHS SIX MONTHS ONE YEAR FIVE YEARS ANNUAL ENDED ENDED ENDED ENDED RETURN SINCE FEBRUARY 29, 2004 AUGUST 31, 2004 AUGUST 31, 2004 AUGUST 31, 2004 INCEPTION* ----------------- --------------- --------------- --------------- ------------ SMALL CAP VALUE FUND +23.96% (2.02)% +21.46% +21.12% +19.56% Russell 2000 Value Index** +21.31% (1.50)% +19.49% +13.36% +11.84% DIFFERENCE +2.65% (0.52)% +1.97% +7.76% +7.72% - ---------- * Inception November 30, 1998. **The index is unmanaged and is not available for direct investment. Small-sized company stocks are generally more volatile than large company stocks. The performance data quoted represents past performance and does not guarantee future results. Current performance may be lower or higher. Performance data current to the most recent month-end may be obtained at www.numeric.com. The investment return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The Fund experienced negative absolute returns during the six-month period ended August 31, 2004, primarily due to the recent market retreat. Our benchmark-relative return (from our stock-selection process) was slightly negative over this period by about 0.5%. Nonetheless, the absolute returns for the entire fiscal year remained firmly in positive territory in excess of 21.4%. The sizable return for the year was driven by a combination of the upward move in the equity market, as measured by the benchmark, and the alpha generated by our process. Reviewing the benchmark-relative returns for the entire fiscal year, we are very pleased to observe that our investment process added value just shy of 2% in the Fund. Although the Fund had a modest benchmark-relative return during the fiscal year, it had a large absolute return as the small-cap value sector of the market was the best performer. 1 During the six-month period ended August 31, 2004, there were a variety of factors which weighed on the market, with the closely followed S&P 500 Index down almost 3.6%. The period began with the ugly specter of terrorist attacks highlighted by the Madrid train bombings in March. Inflation fears were sparked by a higher than expected GDP price deflator and by comments from the Federal Reserve which potentially indicated that an aggressive tightening in monetary policy was imminent. In fact an aggressive Fed action did not materialize and the market has welcomed the measured Fed response. Although consumer spending has generally remained robust, concern over higher oil prices and lack-luster employment data ultimately prevailed to drive the market lower. Looking at the market's return in greater detail during the six-month period ended August 31, 2004, reveals that value stocks significantly outpaced growth stocks and that large-cap stocks out-performed their small-cap counterparts. The nexus of these results made large-cap value stocks the best performing equity asset class over this period. Specifically, using the Russell style indices, large-cap value stocks (Russell 1000 Value Index) essentially remained unchanged, while small-cap growth stocks (Russell 2000 Growth Index) declined 10.4% during the period. Over the entire fiscal year value trounced growth by over 12% and the market displayed no preference regarding capitalization. As you will recall, we construct our portfolios using a bottom-up stock selection process that is based on our proprietary quantitative stock-selection models. These models allow us to formulate a view on the fair price for a stock, considering its growth and stability, and take into account analysts' estimate revisions, and the quality of a company's earnings. In addition, while always seeking to have strong absolute performance, we are primarily focused on the benchmark-relative return of the Fund. For this reason, we seek to mitigate unnecessary risks by managing the portfolio that is effectively economic-sector neutral with respect to its benchmark. Namely, we seek to maintain sector weights that are only a few percentage points away from the benchmark sector weights. Furthermore, we try to avoid large stock-specific risk by broadly diversifying the portfolio across many stocks and by preventing any one holding from exceeding approximately 2% of a Fund's overall weight. Attribution analysis of the Fund's return over the entire fiscal year finds that all of our proprietary models made positive contributions to performance. Given the market's strong preference for value stocks over growth stocks, it is not surprising to note that our Fair Value model generally accounts for a good portion of the Fund's out-performance. During the year the Quality of Earnings model was also powerful. Lastly, our Estrend model was very modestly additive in the Fund. The following table summarizes which economic sectors made the largest contribution to the Fund's total return during the entire fiscal year. FUND LARGEST CONTRIBUTING SECTORS SECTOR'S RETURN - --------------- ---------------------------- --------------- Small Cap Value Financials 19.5% Consumer Non-Cyclicals 36.9% It is interesting to note that all 9 of the economic sectors posted double digit positive returns for the Fund for the fiscal year. 2 At the individual security level, the largest contributors to the Fund's return included the commercial bank, Fremont General Corp (+55bps; 0% of portfolio on 8/31/04), and the materials testing and simulation company, MTS Systems (+49bps; 0% of portfolio on 8/31/04). The holdings which most negatively impacting the return included PMA Capital Corp (-68bps; 0% of portfolio on 8/31/04), the property and casualty insurance company, and Sonic Automotive (-46bps; 0.1% of portfolio on 8/31/04), the automobile retailer. As the Fund's investment adviser, we are continuously working at improving our investment process. Being a disciplined and quantitatively based asset manager, much of this effort is focused on enhancing our proprietary models. In this vein, we are pleased to inform you of several improvements that have recently been implemented. We have observed for some time that the efficacy of our analysts' estimate revision model, known as Estrend, has been on the decline. We have augmented its power by incorporating an element of price momentum. In addition we have found an additive way to introduce the use of short interest as information flow for the Fund. Short interest has been used in our growth offerings for some time now. Lastly, while our Fair Value model is one of the hallmarks of our success, we have known that it can struggle in certain growth sectors of the market. In an attempt to address this, we have introduced the use of a cash flow based valuation model for certain growth stocks. MANAGEMENT DISCUSSION We have five business matters to share with you. Perhaps the fifth topic is the most important. First, the preceding section of this report was written by Joseph Schirripa, CFA, who has been the co- portfolio manager for our n/i Small Cap Value Fund along with Arup Datta, CFA. In the past this discussion has usually been prepared by me, Langdon Wheeler, CFA, as Chief Investment Officer and President of Numeric. I am delighted to share this responsibility with Joe who is such a thoughtful observer of the markets and has a clear writing style. Second, I have mixed emotions as I report that one of my first and longest-serving colleagues at Numeric, Shannon Vanderhooft, CFA, took early retirement at the end of 2004 to be a full-time Mom for her pre-adolescent children. Shannon has been co-portfolio manager for the n/i Growth and Emerging Growth Funds for many years. She was also a member of our Management and Investment Committees as Head of our Small Cap and Momentum Group. My emotions are mixed because I salute her choice to make her children's well-being her first priority but I will miss working with her. Daniel Taylor, CFA, a talented portfolio manager and quantitative analyst, has been co-managing these (and other) portfolios with Shannon for the past three years and has taken the lead in managing these Funds. Dan has also taken Shannon's seat on the Investment Committee. In addition, at the beginning of 2005, Dan has also assumed portfolio management responsibilities for the Small Cap Value Fund. We have known that there are many benefits associated with grouping the management of small cap offerings and we have taken this opportunity of transition to bring about this change. As a result, Joe has now moved into a co-portfolio management role for our Mid Cap Fund, along with Arup. 3 Third, you were sent a proxy this past fall seeking your approval to retain Numeric as advisor to the n/i Family of Funds, given the change in ownership that occurred at Numeric in June. (Reflecting that transaction, our logo has a new color and our name is now followed by the initials "LLC" (limited liability company) rather than "LP" or limited partnership.) In the transaction, Numeric's original financial partners and some former employees who still owned interests in Numeric were bought out completely by TA Associates, a private equity firm based in Boston. The resulting ownership structure has Numeric management owning roughly half of the firm and TA the other half. TA will take seats on our Board of Directors but we do not anticipate any changes in our investment process or our business strategy of "good not big" and "dollars of excess return." Thank you for responding promptly to this proxy. Fourth, you are aware that we re-opened our previously closed n/i Emerging Growth and Small Cap Value Funds to current shareholders for two weeks in early September. During these two weeks, current shareholders in any of our four funds were permitted to invest in any of our other funds. Thereafter, only current investors in any fund could add to their investment in that fund. You may recall that we also opened the funds in June but delays in printing and mail caused many investors to not know about this opportunity until it had passed. Thus we did a second reopening to provide our loyal shareholders with an opportunity to diversify across our other strategies. This was further complicated by the hard close of our Small Cap Value Fund on January 1st due to the expiration of the Fund's prospectus as described later in this letter. I am happy to report that currently all of our funds are open to further investment by current shareholders in each fund, although we must reserve the right to close any fund again should we determine that the asset growth could impair our ability to add value. Fifth, The RBB Fund, Inc. ("RBB") has been notified by the Securities and Exchange Commission (the "SEC") that the performance fees on the Small Cap Value Fund have not been calculated in accordance with the applicable rules for the last several years and therefore an overpayment has been made to Numeric. Applying similar standards, it appears that Numeric was underpaid by the Midcap and Growth Funds. RBB and we have agreed with the SEC to calculate the fee in accordance with the applicable rules effective September 1, 2004. Small Cap Value Fund shareholders will be reimbursed for any previous overcharge plus interest outside of the Fund, but shareholders of the Midcap and Growth Funds will NOT incur a delayed charge. We are currently evaluating alternative fee structures in an effort to achieve maximum fairness for the shareholders, and may communicate with you further if we conclude that a change in fee structure is warranted. Due to the unusual nature of this performance fee issue and questions concerning the appropriate accounting treatment and disclosure of the overpayment and related reimbursement, there was a delay in the filing of the Fund's Annual Report and the updating of the Fund's prospectus, which expired on December 31, 2004. The expiration of the Fund's prospectus also caused the Fund to institute a "hard close" until these issues could be resolved. We are pleased that these accounting and disclosure issues were resolved and that the Fund is reverting to a "soft close" effective March 24, 2005. 4 Thank you once again for being a shareholder in the n/i numeric investors Small Cap Value Fund. We are grateful for your business and for the confidence you have placed in us to manage a portion of your investments. We hope that you are pleased with the results of the past fiscal year, as we are pleased in creating value across all of our Funds. Sincerely, /s/ Langdon B. Wheeler /s/ Joseph Schirripa - ---------------------- ------------------------- Langdon B. Wheeler, CFA Joseph Schirripa, CFA President & Chief Investment Officer Co-Portfolio Manager Numeric Investors LLC(R) n/i Small Cap Value Fund - ---------- Small-cap funds typically carry additional risks, since smaller companies generally have a higher risk of failure than well-established larger companies. Historically, stocks of smaller companies have experienced a greater degree of market volatility than stocks on average. In additional to historical information, this report contains forward-looking statements that may concern, among other things, the domestic market, industry and economic trends and developments and government regulation and their potential impact on the Fund's investment portfolio. These statements are subject to risks and uncertainties and actual trends, developments and regulations in the future and their impact on the Funds could be materially different from those projected, anticipated or implied. The Fund has no obligation to update or revise forward-looking statements. Performance results do not reflect the deduction of taxes that a shareholder would pay on the Fund's distributions. On the accompanying line charts and total return tables found on page 6, the returns of the Fund assumes reinvestment of all dividends and capital gains distributions at net asset value on the ex-dividend date. The Fund is distributed by PFPC Distributors, Inc., 760 Moore Road, King of Prussia, PA 19406. To be preceded or accompanied by a prospectus. 5 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND Comparison of Change in Value of $10,000 Investment in n/i NUMERIC INVESTORS Small Cap Value Fund(1)(2) vs. Russell 2000 Value Index EDGAR REPRESENTATION OF DATA USED IN PRINTED GRAPHIC [GRAPHIC OMITTED] Small Cap Value Fund Russell 2000 Value Index 11/30/98** $10,000 $10,000 02/28/99** $9,383 $9,350 05/31/99** $10,867 $10,430 08/31/99** $10,717 $10,166 11/30/99** $10,044 $9,814 02/28/2000** $9,354 $10,452 05/31/2000** $10,773 $10,401 08/31/2000** $12,210 $11,556 11/30/2000** $12,503 $11,217 02/28/2001** $14,560 $12,747 05/31/2001** $15,976 $13,461 08/31/2001** $16,846 $13,641 11/30/2001** $16,688 $13,347 02/28/2002** $19,145 $14,440 05/31/2002** $21,568 $15,536 08/31/2002** $19,089 $12,877 11/30/2002** $18,160 $13,106 02/28/2003** $17,396 $11,783 05/31/2003** $20,586 $14,371 08/31/2003** $23,004 $15,926 11/30/03 $26,020 $17,681 2/29/04 $28,516 $19,321 5/31/04 $27,351 $18,799 8/31/04 $27,941 $19,030 ----------------------------------------------- Value on August 31, 2004 --------------- Small Cap Value Fund $27,941 Russell 2000 Value Index $19,030 ----------------------------------------------- - ----------------------------------------------------------------------------- Total Returns AVERAGE ANNUAL ------------------------------ ONE YEAR ENDED FIVE YEARS ENDED SINCE AUGUST 31, 2004 AUGUST 31, 2004 INCEPTION(3) --------------- ---------------- ------------ Small Cap Value Fund 21.46% 21.12% 19.56% Russell 2000 Value Index 19.49% 13.36% 11.84% - ----------------------------------------------------------------------------- - ---------- (1) The chart assumes a hypothetical $10,000 initial investment in the Fund and reflects Fund expenses.Investors should note that the Fund is an aggressively managed mutual fund while the index is unmanaged, does not incur expenses and is not available for investment. (2) Numeric Investors LLC(R) waived a portion of its advisory fee and agreed to reimburse a portion of the Fund's operating expenses, as necessary, to maintain the expense limitation as set forth in the notes to the financial statements.Total returns shown include the effect of fee waivers and expense reimbursements, if any; total returns would have been lower had there been no waivers or assumption of fees and expenses. Returns shown include the reinvestment of all dividends and other distributions. (3) For the period November 30, 1998 (commencement of operations) through August 31, 2004. 6 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND FUND EXPENSE EXAMPLE As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees; and other expenses. These examples are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. These examples are based on an investment of $1,000 invested at the beginning of the period and held for the period from March 1, 2004 through August 31, 2004. ACTUAL EXPENSES The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expense that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES The second line of the accompanying tables provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds. Please note that the expenses shown in the accompanying table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as redemption fees. Therefore, the second line of the accompanying tables is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
SMALL CAP VALUE FUND ------------------------------------------------------- BEGINNING ENDING EXPENSES PAID ACCOUNT VALUE ACCOUNT VALUE DURING MARCH 1, 2004 AUGUST 31, 2004 PERIOD* ------------- --------------- ------------- Actual $1,000.00 $ 979.80 $4.18 Hypothetical (5% return before expenses) 1,000.00 1,020.82 4.28
*Expenses are equal to the Fund's annualized expense ratio of 0.84%, which includes waived fees or reimbursed expenses, multiplied by the average account value over the period, multiplied by 184 days/366 days (to reflect the one-half year period). The Fund's ending account value on the first line in the table is based on its actual total return of (2.02)% for the six-month period of March 1, 2004 to August 31, 2004. 7 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND PORTFOLIO HOLDINGS SUMMARY TABLE AUGUST 31, 2004 - -------------------------------------------------------------------------------- SECURITY TYPE/ % OF VALUE INDUSTRY CLASSIFICATION NET ASSETS (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCK Real Estate Investment Trusts ....................... 11.2% $ 22,042,556 Banks ............................................... 6.9% 13,615,577 Utilities ........................................... 6.3% 12,455,534 Manufacturing ....................................... 4.8% 9,555,312 Chemicals - Specialty ............................... 4.7% 9,277,493 Insurance - Property & Casualty ..................... 3.9% 7,646,630 Mortgage ............................................ 3.6% 7,153,329 Automobile Parts & Equipment ........................ 3.4% 6,677,278 Electronic Components & Accessories ..................................... 3.3% 6,466,037 Savings & Loan Associations ......................... 2.9% 5,672,106 Financial Services .................................. 2.8% 5,569,131 Insurance - Health & Life ........................... 2.8% 5,523,464 Transportation ...................................... 2.8% 5,550,590 Medical Instruments & Supplies ...................... 2.5% 5,011,125 Food & Agriculture .................................. 2.4% 4,659,177 Airlines ............................................ 2.3% 4,555,079 Machinery ........................................... 2.3% 4,595,303 Oil & Gas Field Exploration ......................... 2.1% 4,183,903 Oil Refining ........................................ 2.0% 3,921,010 Building & Building Materials ....................... 1.9% 3,777,341 Consumer Products ................................... 1.8% 3,455,657 Retail - Specialty .................................. 1.8% 3,545,474 Telecommunications Equipment & Services ....................................... 1.7% 3,314,831 Oil & Gas Equipment & Services ...................... 1.6% 3,236,420 Hospitals ........................................... 1.2% 2,318,688 Packaging ........................................... 1.2% 2,390,232 Residential Construction ............................ 1.1% 2,262,255 Restaurants ......................................... 1.1% 2,178,180 Commercial Services ................................. 1.0% 1,917,755 Data Processing ..................................... 1.0% 1,925,174 Printing ............................................ 1.0% 1,924,798 Semiconductors ...................................... 1.0% 1,897,027 Multimedia/Publishing ............................... 0.9% 1,686,135 Home Furnishings .................................... 0.8% 1,500,120 Apparel ............................................. 0.6% 1,179,356 Communication Equipment ............................. 0.6% 1,222,875 Health Care ......................................... 0.6% 1,262,826 Insurance ........................................... 0.5% 1,082,025 - -------------------------------------------------------------------------------- SECURITY TYPE/ % OF VALUE INDUSTRY CLASSIFICATION NET ASSETS (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCK--(CONTINUED) Paper & Allied Products ............................. 0.5% $ 964,568 Funeral Services .................................... 0.4% 760,677 Internet Content .................................... 0.4% 886,285 Steel ............................................... 0.4% 888,747 Building Supplies ................................... 0.3% 622,436 Computer Software ................................... 0.3% 521,346 Electrical Equipment ................................ 0.3% 555,561 Metals .............................................. 0.3% 511,614 Automobile .......................................... 0.2% 382,500 Computer Services ................................... 0.2% 410,760 Computer Peripherals ................................ 0.1% 281,915 Engineering ......................................... 0.1% 244,530 Services - Management Consulting ....................................... 0.1% 189,645 Waste Management .................................... 0.1% 219,648 REPURCHASE AGREEMENTS .................................. 3.8% 7,452,828 LIABILITIES IN EXCESS OF OTHER ASSETS ..................................... (1.9)% (3,806,235) NET ASSETS -- 100.% .................................... 100.0% $197,294,628 ===== ============ 8 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS AUGUST 31, 2004 - -------------------------------------------------------------------------------- VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- COMMON STOCKS--98.1% AIRLINES--2.3% 54,500 Alaska Air Group, Inc.* ............................ $ 1,282,930 107,500 ExpressJet Holdings, Inc.* ......................... 1,155,625 143,900 Northwest Airlines Corp.* .......................... 1,355,538 57,217 Republic Airways Holdings, Inc.* ................... 760,986 ------------ 4,555,079 ------------ APPAREL--0.6% 13,600 Deckers Outdoor Corp.* ............................. 399,296 13,100 Kellwood Co. ....................................... 478,150 22,700 Skechers U.S.A., Inc., Class A* .................... 301,910 ------------ 1,179,356 ------------ AUTOMOBILE--0.2% 18,000 Lithia Motors, Inc., Class A ....................... 382,500 ------------ AUTOMOBILE PARTS & EQUIPMENT--3.4% 68,500 American Axle & Manufacturing Holdings, Inc. ............................................. 2,321,465 17,500 Midas, Inc.* ....................................... 277,375 12,400 Sonic Automotive, Inc. ............................. 257,920 121,900 Titan International, Inc. .......................... 1,188,525 282,100 Visteon Corp. ...................................... 2,631,993 ------------ 6,677,278 ------------ BANKS--6.9% 22,000 Capitol Bancorp, Ltd. .............................. 632,940 44,000 Central Pacific Financial Corp. .................... 1,229,800 104,700 Community Bank System, Inc. ........................ 2,675,085 13,100 First Republic Bank ................................ 586,749 44,200 Glacier Bancorp, Inc. .............................. 1,245,556 28,000 Independent Bank Corp.-MA .......................... 838,320 27,100 Independent Bank Corp.-MI .......................... 698,638 9,600 National Penn Bancshares, Inc. ..................... 289,056 71,304 Pacific Capital Bancorp ............................ 2,037,868 2,500 Placer Sierra Bancshares* .......................... 48,875 11,800 SNB Bancshares, Inc.* .............................. 132,042 45,841 Sterling Financial Corp.* .......................... 1,520,088 27,600 Susquehanna Bancshares, Inc. ....................... 662,400 35,600 Vineyard National Bancorp Co. ...................... 1,018,160 ------------ 13,615,577 ------------ BUILDING & BUILDING MATERIALS--1.9% 51,077 Building Materials Holding Corp. ................... 1,155,362 25,700 Eagle Materials, Inc. .............................. 1,668,187 40,100 Perini Corp.* ...................................... 605,510 9,900 Washington Group International, Inc.* .............. 348,282 ------------ 3,777,341 ------------ - -------------------------------------------------------------------------------- VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- BUILDING SUPPLIES--0.3% 15,300 NCI Building Systems, Inc.* ........................ $ 469,404 4,700 York International Corp. ........................... 153,032 ------------ 622,436 ------------ CHEMICALS - SPECIALTY--4.7% 109,100 A. Schulman, Inc. .................................. 2,188,546 18,135 Aceto Corp. ........................................ 278,554 31,900 Georgia Gulf Corp. ................................. 1,210,605 63,900 Lubrizol Corp. (The) ............................... 2,278,035 26,100 Octel Corp. ........................................ 578,376 9,900 OM Group, Inc.* .................................... 337,095 152,200 RPM International, Inc. ............................ 2,406,282 ------------ 9,277,493 ------------ COMMERCIAL SERVICES--1.0% 15,400 Arbitron, Inc.* .................................... 596,904 38,520 McGrath Rentcorp ................................... 1,320,851 ------------ 1,917,755 ------------ COMMUNICATION EQUIPMENT--0.6% 108,700 Digi International, Inc.* .......................... 1,222,875 ------------ COMPUTER PERIPHERALS--0.1% 32,934 InFocus Corp.* ..................................... 281,915 ------------ COMPUTER SERVICES--0.2% 48,900 Tier Technologies, Inc., Class B* .................. 410,760 ------------ COMPUTER SOFTWARE--0.3% 17,500 Progress Software Corp.* ........................... 352,450 10,286 SS&C Technologies, Inc. ............................ 168,896 ------------ 521,346 ------------ CONSUMER PRODUCTS--1.8% 75,400 American Greetings Corp., Class A* ................. 1,814,878 35,400 CSS Industries, Inc. ............................... 1,069,788 9,700 Department 56, Inc.* ............................... 150,641 13,298 RC2 Corp.* ......................................... 420,350 ------------ 3,455,657 ------------ DATA PROCESSING--1.0% 17,600 Dendrite International, Inc.* ...................... 227,040 26,300 infoUSA, Inc.* ..................................... 239,067 57,084 NCO Group, Inc.* ................................... 1,459,067 ------------ 1,925,174 ------------ The accompanying notes are an integral part of the financial statements. 9 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2004 - -------------------------------------------------------------------------------- VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- ELECTRICAL EQUIPMENT--0.3% 15,700 Acuity Brands, Inc. ................................ $ 361,257 9,600 WESCO International, Inc.* ......................... 194,304 ------------ 555,561 ------------ ELECTRONIC COMPONENTS & ACCESSORIES--3.3% 53,100 Bel Fuse, Inc., Class B ............................ 2,010,897 61,000 Electro Scientific Industries, Inc.* ............... 1,262,090 158,570 Helix Technology Corp. ............................. 2,158,138 10,600 Macrovision Corp.* ................................. 250,690 15,371 Rofin-Sinar Technologies, Inc.* .................... 431,925 34,337 SBS Technologies, Inc.* ............................ 352,297 ------------ 6,466,037 ------------ ENGINEERING--0.1% 9,900 URS Corp.* ......................................... 244,530 ------------ FINANCIAL SERVICES--2.8% 48,000 ACE Cash Express, Inc.* ............................ 1,313,280 100,800 Cash America International, Inc. ................... 2,332,512 44,200 CompuCredit Corp.* ................................. 831,402 48,900 World Acceptance Corp.* ............................ 1,091,937 ------------ 5,569,131 ------------ FOOD & AGRICULTURE--2.4% 55,700 Chiquita Brands International, Inc.* ............... 1,049,388 90,305 Nash Finch Co. ..................................... 2,666,707 37,100 Pilgrim's Pride Corp. .............................. 943,082 ------------ 4,659,177 ------------ FUNERAL SERVICES--0.4% 111,700 Stewart Enterprises, Inc., Class A* ................ 760,677 ------------ HEALTH CARE--0.6% 24,800 Sierra Health Services, Inc.* ...................... 1,069,376 10,600 WellCare Health Plans, Inc.* ....................... 193,450 ------------ 1,262,826 ------------ HOME FURNISHINGS--0.8% 27,600 Bassett Furniture Industries, Inc. ................. 518,880 37,000 Hooker Furniture Corp. ............................. 981,240 ------------ 1,500,120 ------------ HOSPITALS--1.2% 174,600 Select Medical Corp. ............................... 2,318,688 ------------ INSURANCE--0.5% 67,500 Assured Guaranty, Ltd. ............................. 1,082,025 ------------ - -------------------------------------------------------------------------------- VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- INSURANCE - HEALTH & LIFE--2.8% 78,100 AmerUs Group Co. ................................... $ 3,113,066 126,700 Phoenix Cos., Inc. (The) ........................... 1,334,151 38,700 UICI ............................................... 1,076,247 ------------ 5,523,464 ------------ INSURANCE - PROPERTY & CASUALTY--3.9% 10,700 American Financial Group, Inc. ..................... 315,115 135,500 Bristol West Holdings, Inc. ........................ 2,239,815 63,123 IPC Holdings, Ltd. ................................. 2,290,734 83,300 Platinum Underwriters Holdings, Ltd. ............... 2,364,054 18,800 PXRE Group, Ltd. ................................... 436,912 ------------ 7,646,630 ------------ INTERNET CONTENT--0.4% 47,100 EarthLink, Inc.* ................................... 471,471 43,300 United Online, Inc.* ............................... 414,814 ------------ 886,285 ------------ MACHINERY--2.3% 34,600 Bucyrus International, Inc., Class A* .............. 914,478 82,000 Cascade Corp. ...................................... 2,115,600 14,700 Flowserve Corp.* ................................... 337,218 52,300 Stewart & Stevenson Services, Inc. ................. 873,933 9,800 Terex Corp.* ....................................... 354,074 ------------ 4,595,303 ------------ MANUFACTURING--4.8% 88,300 Albany International Corp., Class A ................ 2,573,945 100 ESCO Technologies, Inc.* ........................... 6,435 62,977 Matthews International Corp., Class A .............. 2,226,237 10,200 Monaco Coach Corp. ................................. 219,198 9,150 Myers Industries, Inc. ............................. 104,127 19,900 Paxar Corp.* ....................................... 402,776 19,100 Penn Engineering & Manufacturing Corp. ............. 364,810 181,100 Walter Industries, Inc. ............................ 2,687,524 30,900 Winnebago Industries, Inc. ......................... 970,260 ------------ 9,555,312 ------------ MEDICAL INSTRUMENTS & SUPPLIES--2.5% 46,500 Cantel Medical Corp.* .............................. 1,267,125 17,000 Haemonetics Corp.* ................................. 537,540 37,400 Molecular Devices Corp.* ........................... 860,200 50,600 Owens & Minor, Inc. ................................ 1,239,700 20,800 Respironics, Inc.* ................................. 1,106,560 ------------ 5,011,125 ------------ The accompanying notes are an integral part of the financial statements. 10 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONTINUED) AUGUST 31, 2004 - -------------------------------------------------------------------------------- VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- METALS--0.3% 12,600 Century Aluminum Co.* .............................. $ 312,228 5,700 Commercial Metals Co. .............................. 199,386 ------------ 511,614 ------------ MORTGAGE--3.6% 111,700 Flagstar Bancorp, Inc. ............................. 2,411,603 57,100 IndyMac Bancorp, Inc. .............................. 1,969,950 64,400 LandAmerica Financial Group, Inc. .................. 2,771,776 ------------ 7,153,329 ------------ MULTIMEDIA/PUBLISHING--0.9% 36,300 R.H. Donnelley Corp.* .............................. 1,686,135 ------------ OIL & GAS EQUIPMENT & SERVICES--1.6% 60,400 Dril-Quip, Inc.* ................................... 1,198,336 19,200 FMC Technologies, Inc.* ............................ 589,824 41,900 Offshore Logistics, Inc.* .......................... 1,248,620 12,400 Oil States International, Inc.* .................... 199,640 ------------ 3,236,420 ------------ OIL & GAS FIELD EXPLORATION--2.1% 29,200 Clayton Williams Energy, Inc.* ..................... 520,344 30,600 Forest Oil Corp.* .................................. 797,130 12,400 Houston Exploration Co. (The)* ..................... 636,740 47,700 Southwestern Energy Co.* ........................... 1,696,689 32,500 Vintage Petroleum, Inc. ............................ 533,000 ------------ 4,183,903 ------------ OIL REFINING--2.0% 44,300 Giant Industries, Inc.* ............................ 987,890 60,200 Holly Corp. ........................................ 1,232,896 71,800 Tesoro Petroleum Corp.* ............................ 1,700,224 ------------ 3,921,010 ------------ PACKAGING--1.2% 53,413 Silgan Holdings, Inc. .............................. 2,390,232 ------------ PAPER & ALLIED PRODUCTS--0.5% 90,400 Buckeye Technologies, Inc.* ........................ 964,568 ------------ PRINTING--1.0% 26,300 Bowne & Co., Inc. .................................. 352,946 5,600 Consolidated Graphics, Inc.* ....................... 228,760 71,900 Ennis, Inc. ........................................ 1,343,092 ------------ 1,924,798 ------------ REAL ESTATE INVESTMENT TRUSTS--11.2% 149,400 American Financial Realty Trust .................... 2,099,070 188,800 Associated Estates Realty Corp. .................... 1,769,056 - -------------------------------------------------------------------------------- SHARES/ VALUE UNITS (NOTE 1) - -------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS--(CONTINUED) 18,600 Boykin Lodging Co.* ................................ $ 155,682 39,300 CBL & Associates Properties, Inc. .................. 2,400,444 70,300 Colonial Properties Trust .......................... 2,843,635 20,400 Entertainment Properties Trust ..................... 761,940 75,800 HRPT Properties Trust .............................. 817,124 54,800 Inland Real Estate Corp. ........................... 811,040 125,800 LTC Properties, Inc. ............................... 2,254,336 11,000 Mills Corp. (The) .................................. 560,340 265,500 OMEGA Healthcare Investors, Inc. ................... 2,708,100 10,600 Pennsylvania Real Estate Investment Trust ............................................ 405,556 9,000 PS Business Parks, Inc. ............................ 357,750 6,000 SL Green Realty Corp. .............................. 300,000 33,600 Tanger Factory Outlet Centers, Inc. ................ 1,481,760 89,900 Taubman Centers, Inc. .............................. 2,316,723 ------------ 22,042,556 ------------ RESIDENTIAL CONSTRUCTION--1.1% 100,500 Levitt Corp., Class A .............................. 2,262,255 ------------ RESTAURANTS--1.1% 30,000 CEC Entertainment, Inc.* ........................... 1,010,100 74,400 Dave & Buster's, Inc.* ............................. 1,168,080 ------------ 2,178,180 ------------ RETAIL - SPECIALTY--1.8% 24,000 Barnes & Noble, Inc.* .............................. 829,440 24,200 Brown Shoe Co., Inc. ............................... 641,784 12,000 Dress Barn, Inc. (The)* ............................ 198,840 114,172 Hollywood Entertainment Corp.* ..................... 1,151,995 11,000 J. Jill Group, Inc.* ............................... 198,990 27,500 Ruddick Corp. ...................................... 524,425 ------------ 3,545,474 ------------ SAVINGS & LOAN ASSOCIATIONS--2.9% 12,900 American Capital Strategies, Ltd. .................. 402,480 4,100 Dime Bancorp, Inc., Litigation Tracking Warrants* ........................................ 533 12,500 Downey Financial Corp. ............................. 673,375 28,700 FirstFed Financial Corp.* .......................... 1,308,720 49,993 Flushing Financial Corp. ........................... 903,374 11,700 Hudson United Bancorp .............................. 423,657 19,999 MAF Bancorp, Inc. .................................. 836,558 4,400 PFF Bancorp, Inc. .................................. 162,360 45,510 Republic Bancorp, Inc. ............................. 669,452 7,100 Westcorp ........................................... 291,597 ------------ 5,672,106 ------------ The accompanying notes are an integral part of the financial statements. 11 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND PORTFOLIO OF INVESTMENTS (CONCLUDED) AUGUST 31, 2004 - -------------------------------------------------------------------------------- VALUE SHARES (NOTE 1) - -------------------------------------------------------------------------------- SEMICONDUCTORS--1.0% 59,200 ADE Corp.* ......................................... $ 1,137,824 19,900 Axcelis Technologies, Inc.* ........................ 155,220 49,553 FSI International, Inc.* ........................... 240,827 10,600 Siliconix, Inc.* ................................... 363,156 ------------ 1,897,027 ------------ SERVICES - MANAGEMENT CONSULTING--0.1% 14,100 Clark, Inc.* ....................................... 189,645 ------------ STEEL--0.4% 41,800 Oregon Steel Mills, Inc.* .......................... 605,264 19,700 Shiloh Industries, Inc.* ........................... 283,483 ------------ 888,747 ------------ TELECOMMUNICATIONS EQUIPMENT & SERVICES--1.7% 26,000 Brightpoint, Inc.* ................................. 344,500 91,754 CT Communications, Inc. ............................ 1,263,453 30,300 Dycom Industries, Inc.* ............................ 779,316 26,300 InterDigital Communications Corp.* ................. 410,017 26,500 Polycom, Inc.* ..................................... 517,545 ------------ 3,314,831 ------------ TRANSPORTATION--2.8% 13,390 Celadon Group, Inc.* ............................... 226,960 8,800 Genesee & Wyoming, Inc., Class A* .................. 196,944 23,800 Hub Group, Inc., Class A* .......................... 631,176 105,300 Laidlaw International, Inc.* ....................... 1,653,210 66,100 Overseas Shipholding Group, Inc. ................... 2,842,300 ------------ 5,550,590 ------------ UTILITIES--6.3% 131,600 Avista Corp. ....................................... 2,353,008 209,500 CMS Energy Corp.* .................................. 2,011,200 39,600 Energen Corp. ...................................... 1,878,624 49,300 Northeast Utilities ................................ 945,081 12,700 ONEOK, Inc. ........................................ 299,212 58,100 PNM Resources, Inc. ................................ 1,241,597 47,400 Southwest Gas Corp. ................................ 1,118,640 6,700 UGI Corp. .......................................... 228,872 113,300 Westar Energy, Inc. ................................ 2,379,300 ------------ 12,455,534 ------------ WASTE MANAGEMENT--0.1% 13,200 Metal Management, Inc.* ............................ 219,648 ------------ Total Common Stocks (Cost $187,009,002) .............................. 193,648,035 ------------ - -------------------------------------------------------------------------------- PRINCIPAL VALUE AMOUNT (000'S) (NOTE 1) - -------------------------------------------------------------------------------- REPURCHASE AGREEMENTS--3.8% $2,417 Bear, Stearns & Co. Inc. (Agreement dated 08/31/04 to be repurchased at $2,416,751), 0.78%, 09/01/04 (Note 6)** ....................... $ 2,416,698 5,036 Bear, Stearns & Co. Inc. (Agreement dated 08/31/04 to be repurchased at $5,036,347), 1.55%, 09/01/04 (Note 7) ......................... 5,036,130 ------------ Total Repurchase Agreements (Cost $7,452,828) ................................ 7,452,828 ------------ Total Investments -- 101.9% (Cost $194,461,830) ........................................ 201,100,863 ------------ Liabilities in Excess of Other Assets -- (1.9)% ............... (3,806,235) ------------ Net Assets -- 100.0% .......................................... $197,294,628 ============ - --------- * Non-income producing. ** Investment purchased with collateral received for securities on loan. The accompanying notes are an integral part of the financial statements. 12 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] STATEMENT OF ASSETS AND LIABILITIES AUGUST 31, 2004
SMALL CAP VALUE FUND --------------- ASSETS Investments, at value including collateral for securities on loan (Note 6) (Cost -- $194,461,830) .............................................................................. $201,100,863 Receivable for investments sold ........................................................................ 8,996,506 Dividends and interest receivable ...................................................................... 262,712 Receivable for Fund shares sold ........................................................................ 294,713 Prepaid expenses and other assets ...................................................................... 11,378 ------------ Total assets ........................................................................................ 210,666,172 ------------ LIABILITIES Payable for investments purchased ...................................................................... 10,430,179 Payable upon return of securities loaned (Note 6) ...................................................... 2,416,698 Payable for Fund shares redeemed ....................................................................... 303,000 Investment advisory fee payable ........................................................................ 90,395 Accrued expenses and other liabilities ................................................................. 131,272 ------------ Total liabilities ................................................................................... 13,371,544 ------------ NET ASSETS Capital stock, $0.001 par value ........................................................................ 9,916 Additional paid-in capital ............................................................................. 157,607,116 Undistributed net investment income .................................................................... 463,033 Accumulated net realized gain from investments ......................................................... 32,575,530 Net unrealized appreciation on investments ............................................................. 6,639,033 ------------ Net assets applicable to shares outstanding ............................................................ $197,294,628 ============ Shares outstanding ........................................................................................ 9,916,438 ------------ Net asset value, offering and redemption price per share .................................................. $19.90 ======
The accompanying notes are an integral part of the financial statements. 13 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED AUGUST 31, 2004
SMALL CAP VALUE FUND --------------- INVESTMENT INCOME Dividends* ....................................................................................... $ 2,648,473 Interest ......................................................................................... 47,910 Securities lending (Note 6) ...................................................................... 23,660 ------------ Total investment income ....................................................................... 2,720,043 ------------ EXPENSES Investment advisory fees (Note 2) ................................................................ 1,043,318 Co-Administration fees and expenses .............................................................. 374,672 Administrative services fees ..................................................................... 297,903 Transfer agent fees and expenses ................................................................. 89,955 Printing ......................................................................................... 88,198 Audit and legal fees ............................................................................. 69,430 Custodian fees and expenses ...................................................................... 63,581 Shareholder service fees ......................................................................... 37,448 Directors' and officer's fees and expenses ....................................................... 25,182 Federal and state registration fees .............................................................. 19,335 Other ............................................................................................ 12,274 ------------ Total expenses before waivers ................................................................. 2,121,296 Less: waivers ................................................................................. (302,868) ------------ Net expenses after waivers .................................................................... 1,818,428 ------------ Net Investment Income ......................................................................... 901,615 ------------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized gain from investments ............................................................... 47,499,697 Net change in unrealized appreciation on investments ............................................. (11,111,657) ------------ Net realized and unrealized gain on investments .................................................. 36,388,040 ------------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................................ $ 37,289,655 ============ - --------------- * Net of foreign withholding taxes of $3,043.
The accompanying notes are an integral part of the financial statements. 14 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] STATEMENT OF CHANGES IN NET ASSETS
SMALL CAP VALUE FUND ----------------------------------- FOR THE FISCAL YEARS ENDED AUGUST 31, ----------------------------------- 2004 2003 ------------ ------------ INCREASE IN NET ASSETS RESULTING FROM OPERATIONS: Net investment income ............................................................. $ 901,615 $ 440,105 Net realized gain from investments ................................................ 47,499,697 7,190,545 Net change in unrealized appreciation/(depreciation) on investments ............... (11,111,657) 20,141,144 ------------ ------------ Net increase in net assets resulting from operations ..................................................................... 37,289,655 27,771,794 ------------ ------------ DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income ............................................................. (878,687) -- Net realized capital gains ........................................................ (21,277,125) (10,075,786) ------------ ------------ Total dividends and distributions to shareholders ................................. (22,155,812) (10,075,786) ------------ ------------ INCREASE IN NET ASSETS DERIVED FROM CAPITAL SHARE TRANSACTIONS (NOTE 5) .............. 1,664,203 32,420,258 ------------ ------------ Total increase in net assets ...................................................... 16,798,046 50,116,266 NET ASSETS Beginning of year ................................................................. 180,496,582 130,380,316 ------------ ------------ End of year* ...................................................................... $197,294,628 $180,496,582 ============ ============ - ---------- * Includes undistributed net investment income as follows:
FOR THE FISCAL YEARS ENDED AUGUST 31, --------------------------- 2004 2003 -------- -------- Small Cap Value Fund ........................... $463,033 $440,105 The accompanying notes are an integral part of the financial statements. 15 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] FINANCIAL HIGHLIGHTS - -------------------------------------------------------------------------------- Contained below is per share operating performance data for each share outstanding, total investment return, ratios to average net assets and other supplemental data for the respective years. This information has been derived from information provided in the financial statements. - --------------------------------------------------------------------------------
SMALL CAP VALUE FUND ------------------------------------------------------------ FOR THE FISCAL YEARS ENDED AUGUST 31, ------------------------------------------------------------ 2004 2003 2002 2001 2000 -------- -------- -------- ------- ------- PER SHARE OPERATING PERFORMANCE Net asset value, beginning of year ........................ $ 18.46 $ 16.86 $ 17.61 $ 12.91 $ 12.86 -------- -------- -------- ------- ------- Net investment income/(loss) .............................. 0.09 0.05 (0.05) 0.02 0.15 Net realized and unrealized gain on investments and futures transactions, if any (1) ................... 3.67 2.90 1.71 4.79 1.32 -------- -------- -------- ------- ------- Net increase in net assets resulting from operations ............................................. 3.76 2.95 1.66 4.81 1.47 -------- -------- -------- ------- ------- Dividends and distributions to shareholders from: Net investment income ..................................... (0.09) -- (0.02) (0.14) (0.10) Net realized capital gains ................................ (2.24) (1.41) (2.58) -- (1.32) -------- -------- -------- ------- ------- Total dividends and distributions to shareholders ......... (2.33) (1.41) (2.60) (0.14) (1.42) -------- -------- -------- ------- ------- Redemption fees (Note 5) .................................. 0.01 0.06 0.19 0.03 --* -------- -------- -------- ------- ------- Net asset value, end of year .............................. $ 19.90 $ 18.46 $ 16.86 $ 17.61 $ 12.91 ======== ======== ======== ======= ======= Total investment return (2) ............................... 21.46% 20.51% 13.31% 37.97% 13.94% ======== ======== ======== ======= ======= RATIOS/SUPPLEMENTAL DATA Net assets, end of year (000's omitted) ................... $197,295 $180,497 $130,380 $35,564 $13,481 Ratio of expenses to average net assets (3) ............... 0.92% 1.55% 1.73% 1.67% 1.00% Ratio of expenses to average net assets without waivers and expense reimbursements, if any ............. 1.07% 1.70% 1.88% 2.14% 2.34% Ratio of net investment income/(loss) to average net assets (3) ......................................... 0.45% 0.33% (0.35)% 0.17% 1.35% Portfolio turnover rate ................................... 366.70% 268.07% 275.73% 277.28% 256.28% - --------------- * Amount is less than $0.01 per share. (1) The amounts shown for a share outstanding throughout the respective years are not in accord with the changes in the aggregate gains and losses on investments during the respective years because of the timing of the sales and repurchases of fund shares in relation to fluctuating net asset values during the respective years. (2) Total investment return is calculated assuming a purchase of shares on the first day and a sale of shares on the last day of each year reported and includes reinvestment of dividends and distributions, if any. (3) Reflects waivers and expense reimbursements, if any.
The accompanying notes are an integral part of the financial statements. 16 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES The RBB Fund, Inc. ("RBB") was incorporated under the laws of the State of Maryland on February 29, 1988, and is registered under the Investment Company Act of 1940, as amended, (the "Investment Company Act") as an open-end management investment company. RBB is a "series fund," which is a mutual fund divided into separate portfolios. Each portfolio is treated as a separate entity for certain matters under the Investment Company Act, and for other purposes, and a shareholder of one portfolio is not deemed to be a shareholder of any other portfolio. Currently, RBB has thirteen active investment portfolios, including the n/i NUMERIC INVESTORS FAMILY OF FUNDS ("n/i numeric investors Family") which consists of four diversified portfolios: including the n/i NUMERIC INVESTORS Small Cap Value Fund (the "Fund"). RBB has authorized capital of thirty billion shares of common stock of which 26.327 billion are currently classified into 101 classes of common stock. Each class represents an interest in an active or inactive RBB investment portfolio. The Company currently has 20 active share classes that have begun investment operations. The active classes have been grouped into seven separate "families," six of which have begun investment operations. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. PORTFOLIO VALUATION -- The Fund's net asset value ("NAV") is calculated once daily at the close of regular trading hours on the NYSE (generally 4:00 p.m. Eastern time) on each day the NYSE is open. Securities held by the Fund are valued using the closing price or the last sale price on a national securities exchange or on the National Association of Securities Dealers Automatic Quotation System ("NASDAQ") market system where they are primarily traded. If there were no sales on that day or the securities are traded on other over-the-counter markets, the mean of the last bid and ask price prior to the market close are used. Short-term debt securities having a remaining maturity of 60 days or less are amortized to maturity based on their cost. Debt securities having a remaining maturity of greater than 60 days are valued at the mean between the bid and ask prices. With the approval of the Company's Board of Directors, the Fund may use a pricing service, bank or broker/dealer experience in providing valuations to value the Fund's securities. If market quotations are unavailable or deemed unreliable, securities will be valued by the Fund's Valuation Committee as determined by procedures adopted by the Board of Directors. REPURCHASE AGREEMENTS -- The Fund has agreed to purchase securities from financial institutions subject to the seller's agreement to repurchase them at an agreed-upon time and price ("repurchase agreements"). The financial institutions with whom the Fund enters into repurchase agreements are banks and broker/dealers, which Numeric Investors LLC(R) (the Fund's "Adviser" or "Numeric") considers creditworthy. The seller under a repurchase agreement will be required to maintain the value of the securities as collateral, subject to the agreement at not less than the repurchase price plus accrued interest. Numeric marks to market daily the value of the collateral, and, if necessary, requires the seller to deposit additional collateral by the next business day, so that the value of the collateral is not less than the repurchase price. Default by or bankruptcy of the seller would, however, expose the Fund to possible loss because of adverse market action or delays in connection with the disposition of the underlying securities. 17 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) INVESTMENT TRANSACTIONS, INVESTMENT INCOME AND EXPENSES -- The Fund records security transactions on the trade date. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes in determining realized gains and losses on investments. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Expenses incurred on behalf of the fund are charged directly to the fund or fund family (in proportion to net assets). Expenses incurred for all of the RBB families (such as director or professional fees) are charged to all funds in proportion to their net assets of the RBB Funds, or in such other manner as the Board of Directors deems fair or equitable. Expenses and fees, including investment advisory and administration fees, are accrued daily and taken into account for the purpose of determining the net asset value of the Fund. DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income and from net realized capital gains, if any, will be declared and recorded on the ex-dividend date and paid at least annually to shareholders. Income and capital gain distributions are determined in accordance with U.S. federal income tax regulations, which may differ from accounting principles generally accepted in the United States of America. These differences can include the treatment of non-taxable dividends, expiring capital loss carryforwards, foreign currency gain/loss, and losses deferred due to wash sales and excise tax regulations. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications within the composition of net assets. U.S. TAX STATUS -- No provision is made for U.S. income taxes as it is the Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from all or substantially all U.S. federal income and excise taxes. OTHER -- In the normal course of business, the Fund may enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is dependent on claims that may be made against the Fund in the future, and, therefore, cannot be estimated; however, based on experience, the risk of material loss for such claims is considered remote. 2. TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES Numeric serves as the Fund's investment adviser. Numeric is entitled to a performance-based fee for its advisory services for the Fund calculated at the end of each month using a basic fee of 0.85% of average daily net assets and a performance fee adjustment based on the Fund's performance during the last rolling 12-month period. The Fund's net performance is compared with the performance of its benchmark index during that same rolling 12-month period. When the Fund's performance is at least 5.00% better than its benchmark, it would pay Numeric more than the basic fee. If the Fund did not perform at least 4.00% better than its benchmark, Numeric would be paid less than the basic fee. Each 1.00% of the difference in performance between the Fund and its benchmark plus 4.00% during the performance period would result in a 0.10% adjustment to the basic fee. The maximum annualized performance adjustment rate would be + or - - 0.50% of average daily net assets which would be added to or deducted from the basic fee. For the fiscal year ended August 31, 2004, investment advisory fees were $1,043,318. 18 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) The staff of the Securities and Exchange Commission (the "SEC" or "Staff") notified RBB that the methodology used to calculate the performance-based investment advisory fee for the Small Cap Value Fund did not comply with the rules under the Investment Advisers Act of 1940, as amended, (the "Advisers Act") concerning performance fees. The rules under the Advisers Act require the performance rate to be applied to the average net assets over the performance period (a twelve-month rolling period for this Fund) rather than the average daily net assets in the most recent month, as was done previously. Applying the revised methodology to the Small Cap Value Fund for the period since the inception of the performance fee (January 2001) indicates that Numeric overcharged the Small Cap Value Fund approximately $920,000. In addition, the Staff has indicated that interest of approximately $110,000 is also due on this amount. The following chart shows the pro forma impact to the Small Cap Value Fund had the revised methodology been applied to the computation of the advisory fee since January 2001:
- ------------------------------------------------------------------------------------------------------------------------ NET INCREASE NET INCREASE IN NET ASSETS IN NET ASSETS RESULTING FROM RESULTING FROM OPERATIONS OPERATIONS NET EXPENSE RATIO NET EXPENSE RATIO FISCAL YEAR ENDED (AS REPORTED) (REVISED METHODOLOGY) (AS REPORTED) (REVISED METHODOLOGY) - ------------------------------------------------------------------------------------------------------------------------ 08/31/2004 $37,289,655 $37,398,883 0.92% 0.86% - ------------------------------------------------------------------------------------------------------------------------ 08/31/2003 27,771,794 27,938,492 1.55% 1.43% - ------------------------------------------------------------------------------------------------------------------------ 08/31/2002 4,387,562 4,982,982 1.73% 1.12% - ------------------------------------------------------------------------------------------------------------------------ 08/31/2001 7,232,211 7,280,722 1.67% 1.46% - ------------------------------------------------------------------------------------------------------------------------
Note: The data above does not include interest assessment as determined by the SEC. Commencing in September 2004, RBB began calculating the fee for the Small Cap Value Fund in accordance with the Advisers Act. RBB and Numeric are currently in negotiations with the Staff to determine the method by which the overcharged amounts plus interest will be reimbursed to affected current and former shareholders of the Small Cap Value Fund. While the discussions with the Staff are ongoing, RBB and Numeric expect that an independent distribution agent will be appointed to establish a process under which affected current and former shareholders will be reimbursed directly by Numeric, outside the Fund. Accordingly, RBB and Numeric believe this process will have no impact on the Small Cap Value Fund. The Fund will not pay Numeric at a later time for any amounts it may waive or any amounts which Numeric has assumed. PFPC Inc. ("PFPC"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., and Bear Stearns Funds Management Inc. ("BSFM"), a wholly-owned subsidiary of The Bear Stearns Companies Inc., serve as co-administrators for the Fund. For providing administrative services, PFPC is entitled to receive a monthly fee equal to an annual rate of 0.125% of the Fund's average daily net assets subject to a 19 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) minimum monthly fee of $6,250. BSFM is entitled to receive a monthly fee equal to an annual rate of 0.05% on the first $150 million of the Fund's average daily net assets and 0.02% of the Fund's average daily net assets thereafter. For the fiscal year ended August 31, 2004, PFPC, voluntarily agreed to waive a portion of its co-administration fees. During such period, PFPC's co-administration fees and related waivers were as follows: TOTAL PFPC NET PFPC CO-ADMINISTRATION FEES PFPC CO-ADMINISTRATION FEES AND EXPENSES WAIVERS AND EXPENSES --------------------- --------- ---------------------- $257,119 $(44,686) $212,433 For providing regulatory administrative services to RBB, PFPC is entitled to receive compensation as agreed to by the Fund and PFPC. This fee is allocated to each portfolio of RBB based on each portfolio's average net assets as a percentage of the total RBB related net assets. For the fiscal year ended August 31, 2004, the regulatory administrative services fee was $32,833 for the Fund. In addition, PFPC serves as the Fund's transfer and dividend disbursing agent. For the fiscal year ended August 31, 2004, transfer agency fees and expenses were $89,955 for the Fund. PFPC Distributors, Inc. ("PFPC Distributors"), a wholly-owned subsidiary of PFPC Worldwide, Inc. and an indirect wholly-owned subsidiary of The PNC Financial Services Group, Inc., provides certain administrative services to the Fund. As compensation for such administrative services, PFPC Distributors received a monthly fee equal to an annual rate of 0.15% of the Fund's average daily net assets. For the fiscal year ended August 31, 2004, PFPC Distributors voluntarily agreed to waive a portion of its administrative services fees for the Fund. During such period, administrative services fees were as follows: TOTAL ADMINISTRATIVE NET ADMINISTRATIVE SERVICES FEES WAIVERS SERVICES FEES -------------- ---------- ------------------ $297,903 $(258,182) $39,721 The Fund owed PFPC and its affiliates $34,044 for their services as of August 31, 2004. 3. SHAREHOLDER SERVICES PLAN The Board of Directors approved a Shareholder Services Plan which permits the Fund to pay fees to certain Shareholder Organizations of up to 0.25% of the average daily net assets of the Fund for which such Shareholder Organizations provide services for the benefit of customers. 20 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) 4. INVESTMENT IN SECURITIES For the fiscal year ended August 31, 2004, aggregate purchases and sales of investment securities (excluding short-term investments) were as follows: PURCHASES SALES ------------ ------------ $711,667,900 $731,141,588 5. CAPITAL SHARE TRANSACTIONS As of August 31, 2004, the Fund has 50,000,000 shares of $0.001 par value capital stock authorized. Transactions in capital shares for the respective periods were as follows: SMALL CAP VALUE FUND -------------------------------------------------------- FOR THE FOR THE FISCAL YEAR ENDED FISCAL YEAR ENDED AUGUST 31, 2004 AUGUST 31, 2003 -------------------------- -------------------------- SHARES AMOUNT SHARES AMOUNT ---------- ------------ ---------- ------------ Sales ............... 1,217,424 $ 23,769,320 5,928,003 $ 91,225,551 Repurchases ......... (2,173,217) (42,265,254) (4,558,315) (68,285,924) Reinvestments ....... 1,092,619 20,160,137 676,704 9,480,631 ---------- ------------ ---------- ------------ Net increase ........ 136,826 $ 1,664,203 2,046,392 $ 32,420,258 ========== ============ ========== ============ There is a 2.00% redemption fee on shares redeemed which have been held for less than one year in the Fund. For the fiscal year ended August 31, 2004, these fees amounted to $132,053 for the Fund. The redemption fees are collected and retained by the Fund for the benefit of the remaining shareholders and recorded as additional paid-in capital. 6. SECURITIES LENDING Loans of securities are required at all times to be secured by collateral equal to at least 100% of the market value of the securities on loan. However, in the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral may be subject to legal proceedings. In the event that the borrower fails to return securities, and collateral being maintained by the lender is insufficient to cover the value of loaned securities, the borrower is obligated to pay the amount of the shortfall (and interest thereon) to the Fund. However, there can be no assurance the Fund can recover this amount. The value of securities on loan to brokers and the aggregate value of collateral by the Fund and pledged to borrowers at August 31, 2004, was as follows: VALUE OF SECURITIES ON LOAN VALUE OF COLLATERAL ------------------ ------------------- $12,586,182 $12,882,251 21 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) Collateral pledged by borrowers for securities out on loan to broker/dealers is in the form of U.S. Treasury securities. Cash collateral received by the Fund is invested into repurchase agreements with Bear, Stearns & Co. Inc., which in turn are collateralized by various U.S. Treasury securities. The stated interest rate on repurchase agreements is net of rebate paid to the borrower on securities loaned. Collateral for repurchase agreements in connection with securities lending at August 31, 2004 is listed below:
SMALL CAP VALUE FUND ----------------------------------------------------------------------------- PRINCIPAL AMOUNT ACCRUED ISSUER (000'S) INTEREST RATE MATURITY MARKET VALUE INTEREST TOTAL VALUE - ------ --------- ------------- -------- ------------ -------- ----------- Related Collateral: United States Treasury Bond ........................ $2,330 5.500% 08/15/28 $2,485,085 $5,695 $2,490,780
7. COLLATERAL FOR REPURCHASE AGREEMENTS Listed below is the collateral associated with the repurchase agreement with Bear, Stearns & Co. Inc., outstanding at August 31, 2004:
SMALL CAP VALUE FUND ----------------------------------------------------------------------------- PRINCIPAL AMOUNT ACCRUED ISSUER (000'S) INTEREST RATE MATURITY MARKET VALUE INTEREST TOTAL VALUE - ------ --------- ------------- -------- ------------ -------- ----------- United States Treasury Bond ........................ $4,850 5.500% 08/15/28 $5,172,816 $11,855 $5,184,671
8. FEDERAL INCOME TAX INFORMATION At August 31, 2004, Federal tax cost, aggregate gross unrealized appreciation and depreciation of securities held by the Fund was as follows: FEDERAL TAX UNREALIZED UNREALIZED NET UNREALIZED COST APPRECIATION DEPRECIATION APPRECIATION ------------ ------------ ------------ -------------- $196,288,524 $11,019,877 $(6,207,538) $4,812,339 As of August 31, 2004, the components of distributable earnings on a tax basis were as follows: UNDISTRIBUTED UNDISTRIBUTED ORDINARY LONG-TERM INCOME GAINS ------------- ------------- $32,587,634 $2,277,622 At August 31, 2004, the Fund had no capital loss carryforwards available to offset future capital gains. 22 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND NOTES TO FINANCIAL STATEMENTS (CONTINUED) The tax character of dividends and distributions paid during the last two fiscal years was as follows: ORDINARY LONG-TERM YEAR INCOME GAINS TOTAL ---- ----------- ---------- ----------- 2004 $19,379,463 $2,776,349 $22,155,812 2003 8,972,686 1,103,100 10,075,786 23 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF THE RBB FUND, INC.: In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of n/i numeric investors Small Cap Value Fund, a separately managed portfolio of The RBB Fund, Inc. (the "Fund"), at August 31, 2004, the results of its operations for the year then ended, the changes in its net assets for the two years in the period then ended, and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the Standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania March 11, 2005 24 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND SHAREHOLDER TAX INFORMATION -- (UNAUDITED) The Fund is required by Subchapter M of the Internal Revenue Code of 1986, as amended, to advise its shareholders within 60 days of each Fund's fiscal year (August 31, 2004) as to the U.S. federal tax status of distributions received by the Fund's shareholders in respect of such fiscal year. During the fiscal year ended August 31, 2004, the following dividends and distributions per share were paid by the Fund: ORDINARY INCOME --------------------------- NET INVESTMENT SHORT-TERM LONG-TERM FUND INCOME GAINS GAINS - ---- -------------- ---------- --------- Small Cap Value Fund ................ $0.09 $1.95 $0.29 The percentage of total ordinary income dividends from the Small Cap Value Fund's qualifying for the corporate dividend received deduction is 14%. This amount was reported to shareholders as income in 2003. Because the Fund's fiscal year is not the calendar year, another notification will be sent with respect to calendar year 2004. The second notification, which will reflect the amount, if any, to be used by calendar year taxpayers on their U.S. federal income tax returns, will be made in conjunction with Form 1099-DIV and was mailed in January 2005. Foreign shareholders will generally be subject to U.S. withholding tax on the amount of their dividend. They will generally not be entitled to a foreign tax credit or deduction for the withholding taxes paid by the Fund, if any. In general, dividends received by tax-exempt recipients (e.g. IRA's and Keoghs) need not be reported as taxable income for U.S. federal income tax purposes. However, some retirement trusts (e.g. corporate, Keogh and 403(b)(7) plans) may need this information for their annual information reporting. Shareholders are advised to consult their own tax advisers with respect to the tax consequences of their investment in the Fund. 25 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND OTHER INFORMATION -- (UNAUDITED) 1. PROXY VOTING Policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities, as well as information regarding how the Fund voted proxies relating to portfolio securities for the most recent 12-month period ended June 30, are available without charge, upon request, by calling (800) 348-5031 and on the Securities and Exchange Commission's website at http://www.sec.gov. 2. QUARTERLY PORTFOLIO SCHEDULES The Fund will file a complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third fiscal quarters of each fiscal year (quarters ended November 30 and May 31) on Form N-Q. The Fund Form N-Q will be available on the Securities and Exchange Commission's website at http://www.sec.gov and may be reviewed and copied at the Securities and Exchange Commission's Public Reference Room in Washington, D.C. Information on the operation of the Securities and Exchange Commission's Public Reference Room may be obtained by calling 1-800-SEC-0330. 26 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND PRIVACY NOTICE -- (UNAUDITED) The n/i NUMERIC INVESTORS FAMILY OF FUNDS of The RBB Fund, Inc. (the "Fund") is committed to protecting the confidentiality and security of your private investment records and personal information. Our policies and procedures are designed to safeguard your information and to permit only appropriate and authorized access to and use of this information. In order to carry out the functions necessary to service your investment account, our service providers collect certain nonpublic personal information from you from the following sources: o Information we receive from you over the telephone, on applications, e-mails or other forms (e.g., your name, social security number and address); and o Information about your transactions with the Fund. We restrict access to your personal and account information to those service providers and their employees who need to know that information to service your account. The Fund may also share all of the information (as described above) that we collect with companies that perform marketing services on our behalf or with other financial institutions with whom we have joint marketing agreements who may suggest additional Fund services or other investment products which may be of interest to you. We maintain physical, electronic, and procedural safeguards that comply with federal standards to guard your nonpublic personal information. You can be assured that the Fund considers your data to be private and confidential, and we will not disclose any nonpublic personal information about you to any unaffiliated third parties, except as permitted by law. If you decide to close your account(s) or become an inactive customer, we will adhere to the privacy policies and practices as described in this notice. If you have any questions or comments about our privacy practices, please call us at (800) 348-5031. March 2005 27 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND FUND MANAGEMENT (UNAUDITED) The business and affairs of the Company are managed under the direction of the Company's Board of Directors. The Company is organized under and managed pursuant to Maryland law. The Directors and executive officers of the Company, their dates of birth, business addresses and principal occupations during the past five years are set forth below. The statement of Additional Information ("SAI") includes additional information about the Company's Directors and is available without charge, upon request, by calling (800) 348-5031.
- ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF POSITION(S) TERM OF OFFICE PORTFOLIOS IN OTHER NAME, ADDRESS, HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) DURING PAST FUND COMPLEX DIRECTORSHIPS AND DATE OF BIRTH WITH FUND TIME SERVED 1 5 YEARS OVERSEEN BY HELD BY DIRECTOR* DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ DISINTERESTED DIRECTORS - ------------------------------------------------------------------------------------------------------------------------------------ Julian A. Brodsky Director 1988 to present Since 1969, Director and Vice Chairman, 13 Director, Comcast Corporation Comcast Corporation (cable television and Comcast 1500 Market Street, communications); Director, NDS Group PLC Corporation 35th Floor (provider of systems and applications for Philadelphia, PA 19102 digital pay TV). DOB: 7/16/33 - ------------------------------------------------------------------------------------------------------------------------------------ Francis J. McKay Director 1988 to present Since 2000, Vice President, Fox Chase 13 None Fox Chase Cancer Center Cancer Center (biomedical research and 333 Cottman Avenue medical care); prior to 2000, Executive Philadelphia, PA 19111 Vice President, Fox Chase Cancer Center. DOB: 12/06/35 - ------------------------------------------------------------------------------------------------------------------------------------ Arnold M. Reichman Director 1991 to present Since December 2000, Director, Gabelli 13 None 106 Pierrepont Street Partners, L.P. (an investment Brooklyn, NY 11201 partnership); Chief Operating Officer and DOB: 5/21/48 member of the Board of Directors of Outercurve Technologies (wireless enabling services) until April 2001; Chief Operating Officer and member of the Executive Operating Committee of Warburg Pincus Asset Management, Inc.; Executive Officer and Director of Credit Suisse Asset Management Securities, Inc. (formerly Counsellors Securities, Inc.) and Director/Trustee of various investment companies advised by Warburg Pincus Asset Management, Inc. until September 15, 1999; Prior to 1997, Managing Director of Warburg Pincus Asset Management, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ * Each Director oversees thirteen portfolios of the Company that are currently offered for sale. The Company is authorized to offer five additional portfolios that had not commenced operations as of the date of this report.
28 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND FUND MANAGEMENT (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF POSITION(S) TERM OF OFFICE PORTFOLIOS IN OTHER NAME, ADDRESS, HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) DURING PAST FUND COMPLEX DIRECTORSHIPS AND DATE OF BIRTH WITH FUND TIME SERVED 1 5 YEARS OVERSEEN BY HELD BY DIRECTOR* DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ DISINTERESTED DIRECTORS - ------------------------------------------------------------------------------------------------------------------------------------ Marvin E. Sternberg Director 1991 to present Since 1974, Chairman, Director and 13 Director, Moyco Technologies, Inc. President, Moyco Technologies, Inc. Moyco 200 Commerce Drive (manufacturer of precision coated and Technologies, Montgomeryville, PA 18936 industrial abrasives). Since 1999, Inc. DOB: 3/24/34 Director, Pennsylvania Business Bank. - ------------------------------------------------------------------------------------------------------------------------------------ INTERESTED DIRECTORS 2 - ------------------------------------------------------------------------------------------------------------------------------------ Robert Sablowsky Director 1991 to present Since July 2002, Senior Vice President 13 None Oppenheimer & Company, Inc. and prior thereto, Executive Vice 200 Park Avenue President of Oppenheimer & Co., Inc., New York, NY 10166 formerly Fahnestock & Co., Inc. (a DOB: 4/16/38 registered broker-dealer). - ------------------------------------------------------------------------------------------------------------------------------------ J. Richard Carnall Director 2002 to present Director of PFPC Inc. from January 1987 13 None 400 Bellevue Parkway to April 2002, Chairman and Chief Wilmington, DE 19809 Executive Officer of PFPC Inc. until DOB: 9/25/38 April 2002, Executive Vice President of PNC Bank, National Association from October 1981 to April 2002, Director of PFPC International Ltd. (financial services) from August 1993 to April 2002, Director of PFPC International (Cayman) Ltd. (financial services) from September 1996 to April 2002; Governor of the Investment Company Institute (investment company industry trade organization) from July 1996 to January 2002; Director of PNC Asset Management, Inc. (investment advisory) from September 1994 to March 1998; Director of PNC National Bank from October 1995 to November 1997; Director of Haydon Bolts, Inc. (bolt manufacturer) and Parkway Real Estate Company (subsidiary of Haydon Bolts, Inc.) since 1984. - ------------------------------------------------------------------------------------------------------------------------------------
29 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] SMALL CAP VALUE FUND FUND MANAGEMENT (UNAUDITED)
- ------------------------------------------------------------------------------------------------------------------------------------ NUMBER OF POSITION(S) TERM OF OFFICE PORTFOLIOS IN OTHER NAME, ADDRESS, HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) DURING PAST FUND COMPLEX DIRECTORSHIPS AND DATE OF BIRTH WITH FUND TIME SERVED 1 5 YEARS OVERSEEN BY HELD BY DIRECTOR DIRECTOR - ------------------------------------------------------------------------------------------------------------------------------------ OFFICER(S) WHO ARE NOT DIRECTORS - ------------------------------------------------------------------------------------------------------------------------------------ Edward J. Roach President 1991 to present Certified Public Accountant; Vice N/A N/A 400 Bellevue Parkway and and Chairman of the Board, Fox Chase Cancer 4th Floor Treasurer 1988 to present Center; Trustee Emeritus, Pennsylvania Wilmington, DE 19809 School for the Deaf; Trustee Emeritus, DOB: 6/29/24 Immaculata University; President or Vice President and Treasurer of various investment companies advised by subsidiaries of PNC Bank Corp. from 1981 to 1997; Managing General Partner, President since 2002, Treasurer since 1981 and Chief Compliance Officer since September 2004 of Chestnut Street Exchange Fund; and Director of the Bradford Funds, Inc. from 1996 to 2000. - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Payne Secretary Since 2005 Since 2003, Vice President and Associate N/A N/A 301 Bellevue Parkway Counsel, PFPC Inc. (financial services 2nd Floor company); Associate, Stradley, Ronon, Wilmington, DE 19809 Stevens & Young, LLC (law firm) from DOB: 5/19/74 2001-2003. - ------------------------------------------------------------------------------------------------------------------------------------ Salvatore Faia, Esquire, CPA Chief Since 2004 Senior Legal Counsel, PFPC Inc. from 2002 N/A N/A Vigilant Compliance Compliance to 2004; Chief Legal Counsel, Corviant 186 Dundee Drive, Suite 700 Officer Corporation (Investment Adviser, Williamstown, NJ 08094 Broker/Dealer and Service Provider to DOB: 12/25/62 Investment Advisers and Separate Accountant Providers) from 2001 to 2002; Partner, Pepper Hamilton LLP (law firm) from 1997 to 2001. - ------------------------------------------------------------------------------------------------------------------------------------ 1 Each Director serves for an indefinite period of time until his successor is elected and qualified or until his death, resignation or removal. Each officer holds office at the pleasure of the Board of Directors until the next annual meeting of the Company or until his or her successor is duly elected and qualified, or until he or she dies, resigns, is removed or becomes disqualified. 2 Messrs. Carnall and Sablowsky are considered "interested persons" of the Company as that term is defined in the 1940 Act. Mr. Carnall is an "interested Director" of the Company because he owns shares of The PNC Financial Services Group, Inc. The investment adviser to the Company's Money Market Portfolio, BlackRock Institutional Management Corporation and the Company's principal underwriter, PFPC Distributors, Inc. are indirect subsidiaries of The PNC Financial Services Group, Inc. Mr. Sablowsky is considered an "interested Director" of the Company by virtue of his position as an officer of a registered broker-dealer.
30 (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] One Memorial Drive Cambridge, MA 02142 1-800-numeric [686-3742] http://www.numeric.com INVESTMENT ADVISER Numeric Investors LLC(R) One Memorial Drive Cambridge, MA 02142 CO-ADMINISTRATORS Bear Stearns Funds Management Inc. 383 Madison Avenue New York, NY 10179 PFPC Inc. Bellevue Corporate Center 301 Bellevue Parkway Wilmington, DE 19809 DISTRIBUTOR PFPC Distributors,Inc. 760 Moore Road King of Prussia, PA 19406 CUSTODIAN Custodial Trust Company 101 Carnegie Center Princeton, NJ 08540 TRANSFER AGENT PFPC Inc. 301 Bellevue Parkway Wilmington, DE 19809 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square Philadelphia, PA 19103 COUNSEL Drinker Biddle & Reath LLP One Logan Square 18th and Cherry Streets Philadelphia, PA 19103 This report is submitted for the general information of the shareholders of each Fund.Total investment return is based on historical results and is not intended to indicate future performance. The total investment return and principal value of an investment in each Fund will fluctuate, so that an investor's shares, when redeemed, may be worth more or less than original cost. Current performance may be lower or higher than the performance data provided in the report. (LOGO) n/i NUMERIC INVESTORS FAMILY OF FUNDS [GRAPHIC OMITTED] One Memorial Drive Cambridge, MA 02142 1-800-numeric [686-3742] http://www.numeric.com ITEM 2. CODE OF ETHICS. (a) The registrant, as of the end of the period covered by this report, has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. (c) There have been no amendments, during the period covered by this report, to a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, and that relates to any element of the code of ethics description. (d) The registrant has not granted any waivers, including an implicit waiver, from a provision of the code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party, that relates to one or more of the items set forth in paragraph (b) of this item's instructions. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. As of the end of the period covered by the report, the registrant's board of directors has determined that the registrant has at least one audit committee financial expert serving on its audit committee. Julian A. Brodsky, Francis J. McKay, and Marvin E. Sternberg are the registrant's audit committee financial experts and each of them is "independent." ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Audit Fees - ---------- (a) The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant's annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years are $251,000 for 2003 and $260,500 for 2004. Audit-Related Fees - ------------------ (b) The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant's financial statements and are not reported under paragraph (a) of this Item are $17,500 for 2003 and $850 for 2004 - for out-of-pocket expenses related to the audit. Tax Fees - -------- (c) The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning are $8,500 for 2003 and $5,100 for 2004 - for excise tax review. All Other Fees - -------------- (d) The aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item are $0 for 2003 and $0 for 2004. (e)(1) Disclose the audit committee's pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X. PRE-APPROVAL OF AUDIT AND PERMITTED NON-AUDIT SERVICES 1. PRE-APPROVAL REQUIREMENTS OF THE COMPANY. The Committee shall pre-approve all auditing services and permissible non-audit services (e.g., tax services) to be provided to the Company by the Auditor, including the fees associated with those services. 2. PRE-APPROVAL REQUIREMENTS OF AFFILIATES. Additionally, the Committee shall pre-approve any engagement of the Auditor to provide non-audit services to an investment adviser of a Portfolio or to any affiliate of such investment adviser that provides ongoing services to the Company, if the engagement relates directly to the operations and financial reporting of the Company. 3. DELEGATION. The Committee may delegate to the Chairman of the Committee, or if the Chairman is not available, one or more of its members, the authority to grant pre-approvals. The decisions of any member to whom authority is delegated shall be presented to the full Committee at its next scheduled meeting. 4. PROHIBITED SERVICES. The Committee shall confirm with the Auditor that the Auditor is not performing contemporaneously with the Company's audit any prohibited non-audit services for the Company, any investment adviser of a Portfolio, or any affiliates of the Company or such investment advisers. The Auditor is responsible for informing the Committee of whether it believes that a particular service is permissible or prohibited pursuant to applicable regulations and standards. (e)(2) The percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are as follows: (b) 100% (c) 100% (d) N/A (f) The percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full-time, permanent employees was less than fifty percent. (g) The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant was $0 for 2003 and $0 for 2004. (h) The registrant's audit committee of the board of directors HAS considered whether the provision of non-audit services that were rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant's independence. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. SCHEDULE OF INVESTMENTS Not yet applicable. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not yet applicable. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which the shareholders may recommend nominees to the registrant's board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Code of ethics, or any amendment thereto, that is the subject of disclosure required by Item 2 is attached hereto. (a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto. (a)(3) Not applicable. (b) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (registrant) The RBB Fund, Inc. ------------------------------------------------------------------- By (Signature and Title)* /s/ Edward J. Roach ------------------------------------------------------- Edward J. Roach, President & Treasurer (principal executive officer) Date March 16, 2005 ---------------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Edward J. Roach ------------------------------------------------------- Edward J. Roach, President & Treasurer (principal executive & principal financial officer) Date March 16, 2005 ---------------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.P 2 g15221numeric_ethics.txt NUMERIC INVESTORS - CODE OF ETHICS EX-99.CODE ETH THE RBB FUND, INC. CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS The Board of Directors (the "Board") of The RBB Fund, Inc. (the "Company") has adopted this Code of Ethics (the "Code") for certain senior officers of the Company to guide and remind such officers of their responsibilities to the Company, and shareholders of the series of the Company (the "Funds"). Such officers are expected to act in accordance with the guidance and standards set forth in this Code. I. COVERED OFFICERS AND PURPOSE OF THE CODE The Code applies to the Company's President, who is the Company's principal executive officer, and the Treasurer, who is the Company's principal financial officer, and any persons performing similar functions on behalf of the Company, regardless of whether such persons are employed by the Company or a third party (the "Covered Officers") for the purpose of promoting: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Company*; o compliance with applicable laws and governmental rules and regulations; o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer is obligated to use his or her best efforts to promote the factors listed above, should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. ETHICAL HANDLING OF ACTUAL AND APPARENT CONFLICTS OF INTEREST A. CONFLICTS OF INTEREST - GENERAL 1. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his or her service to, the Company and its shareholders, including if a Covered Officer, or a member of his or her - --------------------- * If a Covered Person becomes aware that information filed with the SEC or made available to the public contains any false or misleading information or omits to disclose necessary information, he or she shall promptly report it to the Audit Committee. family, receives improper personal benefits as a result of his or her position with the Company. 2. A conflict of interest generally arises if a Covered Officer, or a member of his or her family, directly or indirectly participates in any investment, interest, association, activity or relationship that may impair or appear to impair the Covered Officer's objectivity. B. SCOPE This Code does not, and is not intended to, repeat or replace the following programs and procedures, and such conflicts that fall outside of the parameters of this Code: 1. Certain conflicts of interest already are subject to conflicts of interest provisions in the Investment Company Act of 1940, as amended (the "1940 Act"), and the Investment Advisers Act of 1940 (the "Advisers Act"). 2. The Company's and each investment adviser's compliance programs and procedures that are designed to prevent, or identify and correct, violations of these provisions. C. TYPES OF CONFLICTS 1. CONTRACTUAL RELATIONSHIPS Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Company, investment advisers, or service providers of which the Covered Officers may also be officers or employees. As a result, this Code recognizes that the Covered Officers may, in the normal course of their duties (whether formally for the Company, for the investment adviser or for the service providers), be involved in establishing policies and implementing decisions that will have different effects on the Company, each adviser and the administrator. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Company and the investment adviser or administrator and is consistent with the performance by the Covered Officers of their duties as officers of the Company. Thus, if performed in conformity with the provisions of the 1940 Act and the Advisers Act, such activities will be deemed to have been handled ethically. 2. OTHER INVESTMENT COMPANIES In addition, it is recognized by the Company's Board that the Covered Officers may also be officers or employees of one or more other investment companies covered by this or other codes. 3. ADDITIONAL CONFLICTS Other conflicts of interest may be covered by the Code, even if such conflicts of interest are not subject to provisions in the 1940 Act and the Advisers Act. D. PERSONAL INTERESTS The major principle of this Code is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Company. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that this list is not exhaustive. Each Covered Officer must: o not use his or her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Company whereby the Covered Officer would benefit personally to the detriment of the Company; o not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit the Company; o not use material non-public knowledge of portfolio transactions made or contemplated for the Company to trade personally or cause others to trade personally in contemplation of the market effect of such transactions; and o report at least annually affiliations or other relationships with the Company, each investment adviser or the distributor, including any related conflict of interest. E. REPORTING OF CONFLICTS 1. Required Disclosures If certain conflict of interest situations are engaged in by Covered Officers or by members of their family, these conflicts of interest must be promptly discussed with the Audit Committee. These conflicts of interest include: o service as a director on the board of any public or private company; o the receipt of any non-nominal gifts in excess of $250.00; o the receipt of any entertainment from any company with which the Company has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety; o any ownership interest in, or any consulting or employment relationship with, any of the Company's service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Company for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership; and o any other interest, relationship or matter that a Covered Person or the Board determines, in his or her reasonable judgement, warrants disclosure. 2. Recommended Disclosures There are potential conflict of interest situations, which may be engaged in by Covered Officers or by members of their family, that should be discussed with the Audit Committee. A Covered Person should use reasonable judgement to determine if a conflict, other than conflicts listed under section E(1), is material and warrants disclosure to the Audit Committee. III. COMPLIANCE AND DISCLOSURE A. COMPLIANCE Each Covered Officer should: 1. familiarize himself or herself with the disclosure requirements generally applicable to the Company; 2. not knowingly misrepresent, or cause others to misrepresent, facts about the Company to others, whether within or outside the Company, including to the Company's directors and auditors, governmental regulators and self-regulatory organizations and any other organization; 3. to the extent appropriate within his or her area of responsibility, consult with other officers and employees of the Company, investment advisers and other service providers with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Company files with, or submits to, the SEC and in other public communications made by the Company; and 4. promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. B. DISCLOSURE Unless otherwise required by law, this Code shall be disclosed as required by the SEC. IV. ACCOUNTABILITY Each Covered Officer must: o upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board on the certification attached hereto as Appendix A that he or she has received, read, and understands the Code; o annually thereafter affirm to the Board that he or she has complied with the requirements of the Code and reported any violations of the Code; o not retaliate against any other Covered Officer or any employee of the Company affiliated persons of the Company or the Company's service providers for reports of potential violations that are made in good faith; and o notify the Chairman of the Audit Committee promptly if he or she knows of any violation of this Code. Failure to do so is itself a violation of this Code. V. REPORTING PROCEDURES 1. RESPONSIBILITY** o The Company's Audit Committee is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. o The Company's Audit Committee may consult Company counsel in order to effectively discharge its responsibilities. - ----------------------- ** The Audit Committee may delegate its responsibilities and investigation procedures to the Chairman of the Audit Committee. 2. INVESTIGATION PROCEDURES** The Company will follow these procedures in investigating and enforcing the Code: o The Audit Committee will take all appropriate action to investigate any potential violations of the Code; o If, after such investigation, the Audit Committee believes that no violation has occurred, the Audit Committee is not required to take any further action; o Any matter that the Audit Committee believes is a violation of this Code will be reported to the Board; and o If the Board concurs that a violation has occurred, it will take action which it considers appropriate. Such action may include a review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of each service provider or its governing body; or a recommendation to dismiss the Covered Officer. 3. WAIVERS Any approvals or waivers(psi), implicit or otherwise, sought by a Covered Person will be considered by the Audit Committee. Such Committee will be responsible for granting waivers, as appropriate; and any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. A waiver is the approval of a material departure from a provision of this Code. An implicit waiver is the Company's failure to take action within a reasonable period of time regarding a material departure from a provision of this Code that has been made known to the Audit Committee of the Company. V. OTHER POLICIES AND PROCEDURES This Code shall be the sole code of ethics adopted by the Company for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Company, each investment adviser, distributor, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Company's and its investment advisers' and distributor's codes of ethics under Rule 17j-1 under the 1940 Act (see Exhibit A for a list of the investment advisers and distributor of the Company) are separate requirements applying to the Covered Officers and others, and are not part of this Code. - ----------------------- ** The Audit Committee may delegate its responsibilities and investigation procedures to the Chairman of the Audit Committee. VI. AMENDMENTS Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Board, including a majority of disinterested directors, as that term is defined by the 1940 Act. VII. CONFIDENTIALITY AND RECORDKEEPING All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Audit Committee. Subject to the confidentiality provisions above, the Company will maintain and preserve for a period of not less than six (6) years from the date of submission or the date action is taken, the first two (2) years in an easily accessible place, a copy of the Covered Officer's annual certifications and any information or materials supplied to the Audit Committee that provided the basis for any amendment or waiver to this Code or relating to any violation of the Code and sanctions imposed for such violation, together with a written record of the approval or action taken by the Board. VIII. INTERNAL USE The Code is intended solely for the internal use by the Company and does not constitute an admission, by or on behalf of any Company, as to any fact, circumstance, or legal conclusion. Adopted: July 23, 2003 EXHIBIT A List of Advisers and Distributor Baker 500 Corporation BlackRock Institutional Management Corporation (no code) Bogle Investment Management LP Boston Partners Asset Management, L.P. Numeric Investors, L.P. Schneider Capital Management WesCorp Investment Services, LLC (no code) PFPC Distributors, Inc. APPENDIX A - ---------- THE RBB FUND, INC. CERTIFICATION AND ACKNOWLEDGMENT OF RECEIPT OF CODE OF ETHICS FOR PRINCIPAL OFFICERS AND SENIOR FINANCIAL OFFICERS I acknowledge and certify that I have received a copy of the Code of Ethics for Principal Officers and Senior Financial Officers of The RBB Fund, Inc. (the "Code"). I understand and agree that it is my responsibility to read and familiarize myself with the policies and procedures contained in the Code and to abide by those policies and procedures. I acknowledge my commitment to comply with the Code. APPLICABLE NEXT YEAR: I acknowledge that I complied with the Code for the fiscal year ended _________. I acknowledge that I reported all violations of this Code of Ethics for the fiscal year ended ___________ of which I am aware. (PLEASE SUBMIT ON A SEPARATE PIECE OF PAPER, EXCEPTIONS TO THESE ACKNOWLEDGEMENTS.) - ------------------------------------ --------------------------------- Officer Name (Please Print) Officer Signature --------------------------------- Date EX-99.CERT302 3 g15221numeric_cert302.txt NUMERIC INVESTORS -CERTIFICATION 302 CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 302 OF THE SARBANES-OXLEY ACT I, Edward J. Roach, certify that: 1. I have reviewed this report on Form N-CSR of The RBB Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) [Omitted] (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 16, 2005 /s/ Edward J. Roach ------------------------- ------------------------------------------ Edward J. Roach, President & Treasurer (principal executive & principal financial officer) EX-99.CERT906 4 g15221numeric_cert906.txt NUMERIC INVESTORS - CERTIFICATION 906 CERTIFICATION PURSUANT TO RULE 30A-2(A) UNDER THE 1940 ACT AND SECTION 906 OF THE SARBANES-OXLEY ACT I, Edward J. Roach, President & Treasurer of The RBB Fund, Inc. (the "Registrant"), certify to the best of my knowledge that: 1. The Registrant's periodic report on Form N-CSR for the period ended August 31, 2004 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant. Date: March 16, 2005 /s/ Edward J. Roach ----------------------- ------------------------------------------ Edward J. Roach, President & Treasurer (principal executive & principal financial officer) This certification is being furnished to the commission pursuant to Rule 30a-2(b) under the Investment Company Act of 1940, as amended, and 18 U.S.C. ss.1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----