PRESIDENT'S MESSAGE
FUND PORTFOLIOS
FINANCIAL INFORMATION
INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
FINANCIAL STATEMENTS
FINANCIAL HIGHLIGHTS
NOTES TO FINANCIAL STATEMENTS
MORE ABOUT THE COMPOSITE GROUP
PRESIDENT'S MESSAGE
[PHOTO, WILLIAM PAPESH, PRESIDENT, COMPOSITE FUNDS]
Money market returns produced positive results for the year just ended,
with both of our portfolios continuing on an upward trend since our semiannual
report this past June.
Although a number of challenges confront the domestic economy - chief among
them the national deficit - all of us are the ultimate beneficiaries of slower
growth and a low, very manageable rate of inflation. And we owe a considerable
debt of gratitude to the Federal Reserve for having taken actions over the past
two years, especially in helping to craft a platform for economic moderation.
As of December 31, 1995, the seven-day simple yield for Class A shares of
the Money Market portfolio was 5.13%, or 5.26% on a compounded annual basis.*
Average maturity of securities in the portfolio was reduced slightly from
mid-year to 54 days at year-end in order to capture higher yields.
The Tax-Exempt portfolio Class A shares produced a seven-day simple yield
of 3.89%, or 3.97% on a compounded annual basis. Average portfolio maturity was
decreased to 59 days.
A portion of both portfolios' expenses were waived or reimbursed by the
Fund's Adviser and its Distributor. Absent waivers and reimbursements, the Class
A share seven-day simple yield at year-end would have been 5.10% for the Money
Market portfolio and 3.77% for the Tax-Exempt portfolio.
In an effort to create greater value for shareholders, during the year the
Adviser reduced its fees by 10%, and the Distributor assumed the expenses
associated with postage, printing and office supplies on all accounts below a
$1,000 balance. Investors whose accounts are still below $1,000 continue to
enjoy the benefits of the Fund for a nominal $3.00 per month charge levied by
the Distributor. This charge does not apply, however, to qualified retirement
plan accounts.
Money market funds occupy a unique and important position in mutual fund
investing which is otherwise long-term in perspective. Because there will always
be times when a portion of an individual's assets are purposely not committed to
a longer-range goal, money market mutual funds such as Composite Cash Management
offer attractive alternative benefits. In addition to high current money market
rates of return, shareholders receive draft-writing privileges and the assurance
of liquidity when they need it.
Along with my sincere appreciation for your business, I send you my best
wishes for a prosperous and peaceful new year.
/s/ William G. Papesh
WILLIAM G. PAPESH
PRESIDENT
- --------------------------------------------------------------------------------
* All yield information represents past performance, which cannot guarantee
future results. Principal is neither insured nor guaranteed by the U.S.
government, and yields will fluctuate depending on market conditions. There is
no assurance that the $1.00 per share net asset value (NAV) will be maintained.
Class B shares are available only by exchanging B shares from other Composite
Group funds. The Class B shares' seven-day simple yield through December 31,
1995, was 4.13% for the Money Market portfolio and 2.83% for the Tax-Exempt
portfolio after expense reimbursements. The alternative minimum tax, as well as
state and local taxes, may apply to income distributed by the Tax-Exempt
portfolio.
<PAGE>
<TABLE>
<CAPTION>
COMPOSITE CASH MANAGEMENT COMPANY
PORTFOLIO OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1995
MONEY MARKET PORTFOLIO
PRINCIPAL MARKET
AMOUNT VALUE
--------------- -----------------
<S> <C> <C>
SHORT-TERM INVESTMENTS
FEDERAL AGENCY OBLIGATION - 2.91%
$ 5,000,000 Federal Home Loan Mortgage Corporation Discount Notes,
5.27%, due 01/19/1996 (cost $4,986,825) .................... $ 4,986,825
BANKERS ACCEPTANCES - 6.91%
BANKING - 6.91%
5,000,000 Bank of Tokyo LA, 5.73%, due 03/15/1996 .................... 4,941,108
2,000,000 Dai Ichi Kangyo, 5.71%, due 03/04/1996 ..................... 1,980,015
5,000,000 Dai Ichi Kangyo NY, 5.67%, due 04/10/1996 .................. 4,921,250
-----------------
TOTAL BANKERS ACCEPTANCES (cost $11,842,373) ............... 11,842,373
-----------------
CERTIFICATES OF DEPOSIT - EURO - 13.38%
BANKING - 8.76%
5,000,000 Industrial Bank of Japan NY, 5.96%, due 02/20/1996 ......... 5,000,068
5,000,000 Sanwa NY, 6.33%, due 01/30/1996 ............................ 5,000,040
5,000,000 Sumitomo NY, 6.23%, due 01/23/1996 ......................... 5,000,060
-----------------
15,000,168
-----------------
COMPUTERS - 4.62%
8,000,000 Hewlett Packard Co., 5.53%, due 03/12/1996 ................. 7,912,749
-----------------
TOTAL CERTIFICATES OF DEPOSIT - EURO (cost $22,912,917) .... 22,912,917
-----------------
COMMERCIAL PAPER - 71.36%
AUTOS - 19.13%
7,000,000 American Honda Finance Corporation, 5.68%, due 03/14/1996 .. 6,919,376
4,000,000 Chrysler Financial Corporation, 5.73%, due 01/31/1996 ...... 3,980,900
4,000,000 Ford Motor Credit Company, 5.72%, due 01/11/1996 ........... 3,993,645
3,000,000 Ford Motor Credit Company, 5.62%, due 02/15/1996 ........... 2,978,925
1,000,000 Ford Motor Credit Company, 5.56%, due 03/20/1996 ........... 987,799
3,000,000 General Motors Acceptance Corporation, 5.68%, due 02/06/1996 2,982,960
1,000,000 General Motors Acceptance Corporation, 5.58%, due 03/22/1996 987,445
4,000,000 General Motors Acceptance Corporation, 5.54%, due 04/10/1996 3,938,445
6,000,000 Toyota Motor Credit, 5.67%, due 01/08/1996 ................. 5,993,385
-----------------
32,762,880
-----------------
BROKERAGE - 11.03%
6,000,000 CS First Boston, 5.70%, due 01/25/1996 ..................... 5,977,200
6,000,000 Dean Witter, Discover and Co., 5.68%, due 01/16/1996 ...... 5,985,800
7,000,000 Merrill Lynch and Company, 5.66%, due 02/28/1996 ........... 6,936,168
-----------------
18,899,168
-----------------
DIVERSIFIED HOLDING COMPANIES - 2.89%
5,000,000 Hanson Finance (U.K.), 5.65%, due 02/29/1996 ............... 4,953,701
-----------------
DIVERSIFIED MANUFACTURING - 8.31%
7,000,000 General Electric Capital Corporation, 5.64%, due 02/01/1996 6,966,003
7,350,000 Hitachi America LTD., 5.55%, due 03/18/1996 ................ 7,274,081
-----------------
14,240,084
-----------------
FINANCIAL SERVICES - 6.96%
7,000,000 American Express Credit Corporation, 5.59%, due 03/13/1996 . 6,921,740
5,000,000 International Lease, 5.73%, due 01/03/1996 ................. 4,998,408
-----------------
11,920,148
-----------------
INDUSTRIAL - 5.78%
5,000,000 AES Barbers Point, Inc., 5.56%, due 03/08/1996 ............. 4,948,261
5,000,000 Iris Partners L.P., 5.9%, due 02/28/1996 ................... 4,952,472
-----------------
9,900,733
-----------------
MACHINERY-AGRICULTURAL - 2.87%
5,000,000 John Deere Capital Corporation, 5.41,% due 04/23/1996 ...... 4,915,093
-----------------
RETAIL-DEPARTMENT STORES - 2.90%
3,000,000 Sears Roebuck Acceptance Corporation, 5.65%, due 02/08/1996 2,982,108
2,000,000 Sears Roebuck Acceptance Corporation, 5.65%, due 02/22/1996 1,983,678
-----------------
4,965,786
-----------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT - 4.06%
7,000,000 Toshiba America, Inc., 5.59%, due 02/12/1996 ............... 6,954,348
-----------------
UTILITIES -ELECTRIC - 2.81%
4,857,000 National Rural Utilities, 5.64% due 02/26/1996 ............. 4,814,388
-----------------
UTILITIES -TELECOMMUNICATIONS - 4.62%
6,000,000 A T & T Credit Corporation, 5.58%, due 03/11/1996 .......... 5,934,900
2,000,000 A T & T Credit Corporation, 5.52%, due 03/29/1996 .......... 1,973,013
-----------------
7,907,913
-----------------
TOTAL COMMERCIAL PAPER (cost $122,234,242) ................. 122,234,242
-----------------
NOTES AND BONDS - 3.50%
BANKING - .59%
1,000,000 Citicorp Medium Term Notes, 8.08%, due 03/05/1996 .......... 1,003,417
-----------------
BROKERAGE - 2.91%
5,000,000 Shearson Lehman Brothers, Floating Rate Notes, 6.336%,
due 03/18/1996* ............................................ 5,000,385
-----------------
TOTAL NOTES AND BONDS (cost $6,003,802) .................... 6,003,802
-----------------
REPURCHASE AGREEMENT - 2.28%
3,903,000 Repurchase agreement with Goldman Sachs, collateralized by
a U.S. Treasury Note, in a joint trading account at 5.70%,
dated 12/29/1995, due 01/02/1996 with a maturity value of
$3,905,472 (cost $3,903,000) ............................... 3,903,000
-----------------
TOTAL INVESTMENTS (cost $171,883,159) ...................... 171,883,159
Other assets ($2,524,524) less liabilities ($3,107,858) ... (583,334)
-----------------
NET ASSETS ................................................. $171,299,825
=================
<FN>
*Floating Rate Notes. The interest rate, which is subject to change periodically, is
based on an index of market interest rates.
FEDERAL INCOME TAX INFORMATION:
The aggregate cost of investments owned at December 31, 1995, for federal income tax
and financial reporting purposes was $171,883,159.
OTHER INFORMATION:
Purchases and sales (including maturities) of short-term investments, aggregated $2,421,454,821 and
$2,382,970,102, respectively, during the year ended December 31, 1995, including purchases and
sales of US Government obligations of $41,927,500 and $37,277,076, respectively.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TAX EXEMPT PORTFOLIO
PRINCIPAL MARKET
AMOUNT VALUE
------------- --------------
<S> <C> <C>
STATE AND MUNICIPAL SECURITIES - 98.97%
ALABAMA - 5.81%
$ 1,300,000 Alabama Housing Finance Authority, Variable
Rate Demand Obligations, 5.25%*........................ $ 1,300,000
500,000 Athens, Alabama Variable Rate Demand
Obligations, 5.00%* ................................... 500,000
--------------
1,800,000
--------------
ARIZONA - 0.97%
300,000 Arizona Health Facilities, Variable Rate Demand
Obligations, 5.15%* ................................... 300,000
--------------
COLORADO - 2.13%
660,000 University of Colorado Revenue Bonds, 3.90%,
due 06/01/1996 ........................................ 660,000
--------------
DELAWARE - 2.90%
900,000 Delaware Economic Development Variable Rate Demand
Obligations, 5.20%* ................................... 900,000
--------------
FLORIDA - 8.50%
150,000 Dade County General Obligation Bonds, 6.70%,
due 06/01/1996 ........................................ 151,801
975,000 Florida Board of Education General Obligation Bonds,
5.40%, due 06/01/1996 ................................. 982,042
500,000 Florida Housing Finance Authority (Village Place)
Variable Rate Demand Obligations, 5.15% ............... 500,000
Florida Housing Finance Authority (Oak Mill) Variable
Rate Demand Obligations, 5.15%* ....................... 1,000,000
--------------
2,633,843
--------------
HAWAII -3.23%
1,000,000 Hawaii State Housing Finance & Development Corp.
Variable Rate Demand Obligations, 5.20%* .............. 1,000,000
--------------
ILLINOIS - 16.37%
1,200,000 Decatur Water Revenue Bonds, 3.75%, due 02/06/1996 ..... 1,200,000
1,100,000 Jackson/Union County Variable Rate Demand
Obligations, 5.25%* .................................... 1,100,000
1,425,000 Illinois Health Facility, Bensenville, Variable Rate
Demand Obligations, 5.20%* ............................. 1,425,000
350,000 Sauget Wastewater General Obligations, 4.00%,
due 05/01/1996 ......................................... 350,000
500,000 St. Charles Variable Rate Demand Obligations, 5.15%* ... 500,000
500,000 Wood Dale Industrial Development Variable Rate
Demand Obligations, 5.30%* ............................. 500,000
--------------
5,075,000
--------------
KENTUCKY - 6.39%
980,000 Clark County J-2 PUTs, 3.70%, due 04/15/1996 ........... 980,000
1,000,000 Pendleton County Variable PUTs, 3.75%, due 07/01/1996 .. 1,000,000
--------------
1,980,000
--------------
MICHIGAN - 12.26%
300,000 Michigan Job Development Authority (East Lansing
Residence) Variable Rate Demand Obligations, 3.95%* .... 300,000
200,000 Michigan Job Development Authority (Kentwood Residence)
Variable Rate Demand Obligations, 3.95%* ............... 200,000
300,000 Michigan Hospital Finance Authority Variable Rate Demand
Obligations, 5.20%* .................................... 300,000
1,400,000 Michigan Municipal Building Authority Bonds, 7.30%, due
05/01/1996 Pre-refunded @ 102 .......................... 1,444,951
1,050,000 Michigan State Building Authority/ University of
Michigan, 5.60%, due 03/01/1996 ........................ 1,053,017
500,000 Michigan State Housing Authority Variable Rate Demand
Obligations, 4.95%* .................................... 500,000
--------------
3,797,968
--------------
MISSOURI - 4.52%
1,400,000 Missouri Health & Education Variable Rate Demand
Obligations, 5.00%* .................................... 1,400,000
--------------
NEW YORK - 0.45%
135,000 New York City Municipal Water Bonds,7.00%,due 06/15/1996,
Pre-refunded @ 102. .................................... 139,447
--------------
OREGON -8.12%
800,000 Oregon State Department of Transportation Revenue Bonds,
4.25%, due 03/01/1996 .................................. 800,568
1,000,000 Oregon State Veteran's Welfare, Variable Rate Demand
Obligations, 5.40%* .................................... 1,000,000
705,000 Tri-County Metropolitan Transportation District Revenue
Bonds, 6.75%, due 08/01/1996 ........................... 717,204
--------------
2,517,772
--------------
PENNSYLVANIA - 3.87%
700,000 Beaver County Industrial Development Authority Variable
Rate Demand Obligations, 4.85%* ........................ 700,000
500,000 Washington County Higher Education Variable Rate Demand
Obligations, 5.35%* .................................... 500,000
--------------
1,200,000
--------------
SOUTH CAROLINA - 4.36%
750,000 York County Pollution Control PUTs, 3.80%,
due 02/15/1996 ........................................ 750,000
600,000 York County Pollution Control PUTs, 3.75%,
due 03/15/1996 ........................................ 600,000
--------------
1,350,000
--------------
TENNESSEE - 5.51%
200,000 Metro Government Nashville/Davidson County Health
Variable Rate Demand Obligations, 5.00%* .............. 200,000
900,000 Metro Government Nashville/Davidson County Housing
Variable Rate Demand Obligations, 4.85%* .............. 900,000
600,000 Tennessee State General Obligation Bonds, 6.375%,
due 06/01/1996 ........................................ 606,692
--------------
1,706,692
--------------
TEXAS - 3.15%
1,000,000 Dallas Independent School District Bonds, Zero coupon,
due 08/15/1996 ........................................ 976,043
--------------
VIRGINIA - 2.69%
345,000 Fairfax County Sewer Revenue Bonds, 4.50%,
due 11/15/1996 ........................................ 346,748
485,000 Virginia Department of Transportation Revenue Bonds,
5.10%, due 04/01/1996 ................................. 486,161
--------------
832,909
--------------
WASHINGTON - 5.16%
1,500,000 Seattle Housing Authority/Bayview Variable Rate Demand
Obligations, 5.30%* ................................... 1,500,000
--------------
100,000 State of Washington General Obligation Bonds, 6.70%,
due 02/01/1996 ........................................ 100,183
--------------
1,600,183
--------------
WISCONSIN - 2.58%
800,000 Wisconsin Health Facilities Authority/ Hospital Sisters
Variable Rate Demand Obligations, 5.00%* .............. 800,000
--------------
TOTAL STATE AND MUNICIPAL SECURITIES (Cost 30,669,857) 30,669,857
Other assets ($537,503) less liabilities ($218,521) ... 318,982
--------------
Net Assets ............................................ $30,988,839
==============
<FN>
*Variable Rate Demand Obligations are payable on demand and are secured by
letters of credit or other credit support. The interest rate, which is subject
to change periodically, is based on an index of market interest rates.
FEDERAL INCOME TAX INFORMATION:
The aggregate cost of investments owned at December 31, 1995, for federal income
tax and financial reporting purposes was $30,669,857.
OTHER INFORMATION:
Purchases and sales (including maturities) of short-term investments
aggregated $74,864,141 and $77,278,702, respectively, during the year ended
December 31, 1995.
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
INDEPENDENT PUBLIC ACCOUNTANTS' REPORT
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS OF
COMPOSITE CASH MANAGEMENT COMPANY
We have audited the accompanying statements of assets and liabilities,
including the investment portfolios, of Composite Cash Management
Company(comprising, respectively, the Money Market and Tax-Exempt Portfolios) as
of December 31, 1995, and the related statements of operations for the year then
ended, the statements of changes in net assets for the years ended December 31,
1995 and 1994, and the financial highlights for each of the five years in the
period ended December 31, 1995. These financial statements and financial
highlights are the responsibility of the Funds' management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirming securities owned as of December
31, 1995, by correspondence with the custodian. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights
referred to above present fairly, in all material respects, the financial
position of each of the respective portfolios constituting the Composite Cash
Management Company as of December 31, 1995, and the results of their operations,
the changes in their net assets, and their financial highlights for the
above-stated periods in conformity with generally accepted accounting
principles.
LEMASTER & DANIELS, PLLC
CERTIFIED PUBLIC ACCOUNTANTS
SPOKANE, WASHINGTON
JANUARY 17, 1996
<PAGE>
<TABLE>
<CAPTION>
COMPOSITE CASH MANAGEMENT COMPANY
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
MONEY
MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
------------------ ------------------
<S> <C> <C>
ASSETS
Investments at value (identified cost $171,883,159,
and $30,669,857, respectively) ....................................... $171,883,159 $30,669,857
Cash ................................................................. 5,037 20,231
Prepaid Expenses ..................................................... 25,298 11,844
Receivable for:
Sale of Fund's shares .............................................. 2,293,652 300,927
Interest ........................................................... 200,537 204,501
------------------ ------------------
Total assets ......................................................... 174,407,683 31,207,360
LIABILITIES
Payable for:
Repurchase of Fund's shares ........................................ 3,047,114 209,607
Accrued expenses and other payables ................................ 60,744 8,914
------------------ ------------------
Total liabilities .................................................... 3,107,858 218,521
------------------ ------------------
NET ASSETS ........................................................... $171,299,825 $30,988,839
================== ==================
COMPOSITION OF NET ASSETS
Capital Stock , at par ............................................... $17,130 $3,099
Additional paid-in capital ........................................... 171,282,695 30,985,740
------------------ ------------------
$171,299,825 30,988,839
================== ==================
SHARES OUTSTANDING ................................................... 171,299,825 30,988,839
================== ==================
CLASS A SHARES:
Net asset value, offering price, and redemption price per share
(net assets of $171,225,368 and $30,987,806, respectively,
for 171,225,368 and 30,987,806, shares outstanding,
respectively) .................................................... $1.00 $1.00
================== ==================
CLASS B SHARES:
Net asset value, offering price, and redemption price per share
(net assets of $74,457 and $1,033, respectively,
for 74,457 and 1,033, shares outstanding,
respectively) .................................................... $1.00 $1.00
================== ==================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<TABLE>
<CAPTION>
COMPOSITE CASH MANAGEMENT COMPANY
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995
MONEY
MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
------------------ ------------------
<S> <C> <C>
INVESTMENT INCOME
Interest income ........................................................ $8,825,703 $1,210,919
------------------ ------------------
Expenses:
Management fees ..................................................... 688,617 143,292
Shareholder servicing ............................................... 268,265 32,355
Postage, printing and office expense ................................ 193,307 21,659
Custodial fees ...................................................... 84,247 20,321
Registration and filing fees ........................................ 85,093 12,014
Distribution expenses - Class A ..................................... 18,754 0
Distribution expenses - Class B ..................................... 702 11
Directors' fees ..................................................... 8,387 8,636
Auditing and legal fees ............................................. 10,669 6,025
Insurance ........................................................... 2,929 725
Expense reimbursement ............................................... (22,965) (57,104)
------------------ ------------------
Total expenses ......................................................... 1,338,005 187,934
Fees paid indirectly ................................................... (65,606) (12,215)
------------------ ------------------
Net expenses ........................................................... 1,272,399 175,719
------------------ ------------------
Net investment income .................................................. 7,553,304 1,035,200
------------------ ------------------
NET REALIZED GAIN ON INVESTMENTS ....................................... 9,864 165,507
------------------ ------------------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS ............................................................. $7,563,168 $1,200,707
================== ==================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
MONEY MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
-------------------------------- -----------------------------------
Years Ended December 31, Years Ended December 31,
1995 1994 1995 1994
-------------- --------------- -------------- ----------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income .................................... $7,553,304 $4,312,107 $1,035,200 $795,325
Net realized gain on investments ......................... 9,864 - 165,507 -
-------------- --------------- -------------- ----------------
Net increase in net assets resulting from operations 7,563,168 4,312,107 1,200,707 795,325
DIVIDENDS TO SHAREHOLDERS
From net investment income:
Class A .............................................. (7,550,363) (4,312,013) (1,035,177) (795,317)
Class B .............................................. (2,941) (94) (23) (8)
From net capital gains from investment transactions:
Class A .............................................. (9,858) - (165,501) -
Class B .............................................. (6) - (6) -
NET CAPITAL SHARE TRANSACTIONS
Class A .............................................. 45,574,783 (9,536,816) (2,624,310) (901,264)
Class B .............................................. 63,601 10,856 6 1,027
-------------- ---------------- -------------- ----------------
Total increase (decrease) in net assets .................. 45,638,384 (9,525,960) (2,624,304) (900,237)
NET ASSETS
Beginning of the year .................................... 125,661,441 135,187,401 33,613,143 34,513,380
-------------- ---------------- --------------- ----------------
End of the year .......................................... $171,299,825 $125,661,441 $30,988,839 $33,613,143
============== ================ =============== ================
UNDISTRIBUTED NET INVESTMENT
INCOME AT END OF YEAR .................................... $0 $0 $0 $0
============== ================ =============== ================
<FN>
See accompanying notes to the financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
MONEY MARKET PORTFOLIO: CLASS A
--------------------------------------------------------------------------------
Years ended December 31,
--------------------------------------------------------------------------------
1995 1994 1993 1992 1991
---------------- ---------------- ---------------- --------------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
---------------- ---------------- ---------------- --------------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ........................... 0.0519 0.0341 0.0238 0.0302 0.0526
---------------- ---------------- ---------------- --------------- ---------
Total From Investment Operations ................ 0.0519 0.0341 0.0238 0.0302 0.0526
---------------- ---------------- ---------------- --------------- ---------
LESS DISTRIBUTIONS
Dividends(from net investment income) ........... (0.0519) (0.0341) (0.0238) (0.0302) (0.0526)
---------------- ---------------- ---------------- --------------- ---------
Total Distributions ......................... (0.0519) (0.0341) (0.0238) (0.0302) (0.0526)
---------------- ---------------- ---------------- --------------- ---------
NET ASSET VALUE, END OF PERIOD ................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
================ ================ ================ =============== =========
TOTAL RETURN (1) 5.33% 3.47% 2.41% 3.07% 5.41%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period ($1,000's) ............ $171,225 $125,651 $135,187 $141,193 $178,741
Ratio of Expenses to Average Net Assets (3) ..... 0.92% 0.95% 0.97% 0.88% 0.93%
Ratio of Net Income to Average Net Assets ....... 5.19% 3.39% 2.38% 3.04% 5.33%
<FN>
(1) Returns of less than one year are not annualized.
(2) From the commencement of offering Class B shares.
(3) A portion of the expenses were reimbursed by the distributor for the period September 1, 1995 through December 31, 1995.
Ratios for 1995 are based upon total expenses in accordance with Securities & Exchange Commission Release No. FR 46,
effective September 1, 1995. Ratios for prior periods were calculated based on net expenses and have not been restated.
(4) Annualized.
</FN>
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
MONEY MARKET PORTFOLIO: CLASS B
----------------------------------
Year May 2,
ended 1994 to
December December
31, 1995 31, 1994 (2)
---------------- ----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............. $1.0000 $1.0000
---------------- ----------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ........................... 0.0421 0.0184
---------------- ----------------
Total From Investment Operations ................ 0.0421 0.0184
---------------- ----------------
LESS DISTRIBUTIONS
Dividends(from net investment income ............ (0.0421) (0.0184)
---------------- ----------------
Total Distributions ......................... (0.0421) (0.0184)
---------------- ----------------
NET ASSET VALUE, END OF PERIOD ................... $1.0000 $1.0000
================ ================
TOTAL RETURN (1) 4.30% 1.86%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period ($1,000's) ............ $74 $11
Ratio of Expenses to Average Net Assets (3) ..... 1.94% 1.93% (4)
Ratio of Net Income to Average Net Assets ....... 4.19% 3.29% (4)
<FN>
(1) Returns of less than one year are not annualized.
(2) From the commencement of offering Class B shares.
(3) A portion of the expenses were reimbursed by the distributor for the period September 1, 1995 through December 31, 1995.
Ratios for 1995 are based upon total expenses in accordance with Securities & Exchange Commission Release No. FR 46,
effective September 1, 1995. Ratios for prior periods were calculated based on net expenses and have not been restated.
(4) Annualized.
</FN>
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
TAX-EXEMPT PORTFOLIO CLASS A
--------------------------------------------------------------------------------
Years Ended December 31,
--------------------------------------------------------------------------------
1995 1994 1993 1992 1991
---------------- ---------------- ---------------- --------------- ---------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ........... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
---------------- ---------------- ---------------- --------------- ---------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income ......................... 0.0339 0.0235 0.0203 0.0238 0.0410
Net Realized Gains on Securities .............. 0.0054 0.0000 0.0000 0.0000 0.0000
---------------- ---------------- ---------------- --------------- ---------
Total From Investment Operations .......... 0.0393 0.0235 0.0203 0.0238 0.0410
---------------- ---------------- ---------------- --------------- ---------
LESS DISTRIBUTIONS
Dividends(from net investment income) ......... (0.0339) (0.0235) (0.0203) (0.0238) (0.0410)
Distributions(from capital gains) ............. (0.0054) 0.0000 0.0000 0.0000 0.0000
---------------- ---------------- ---------------- --------------- ---------
Total Distributions ....................... (0.0393) (0.0235) (0.0203) (0.0238) (0.0410)
---------------- ---------------- ---------------- --------------- ---------
NET ASSET VALUE, END OF PERIOD ................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
================ ================ ================ =============== =========
TOTAL RETURN (1) ................................ 4.01% 2.37% 2.06% 2.41% 4.19%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period ($1,000's) .......... $30,988 $33,612 $34,513 $32,425 $40,060
Ratio of Expenses to Average Net Assets (3) ... 0.61% 0.60% 0.50% 0.57% 0.44%
Ratio of Net Income to Average Net Assets ..... 3.39% 2.33% 2.03% 2.36% 4.11%
<FN>
(1) Returns of less than one year are not annualized.
(2) From the commencement of offering Class B shares.
(3) A portion of the expenses were reimbursed by the investment adviser, transfer agent, and distributor for the period
April 1, 1989 through December 31, 1995. Ratios for 1995 are based upon total expenses in accordance with
Securities & Exchange Commission Release No. FR 46, effective September 1, 1995. Ratios for prior periods were
calculated based on net expenses and have not been restated.
(4) Annualized.
</FN>
</TABLE>
<TABLE>
FINANCIAL HIGHLIGHTS
TAX-EXEMPT PORTFOLIO CLASS B
----------------------------------
Year May 2, 1994
ended to
December 31, December 31,
1995 1994 (2)
---------------- ----------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............ $1.0000 $1.0000
---------------- ----------------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income .......................... 0.0226 0.0097
Net Realized Gains on Securities ............... 0.0054 0.0000
---------------- ----------------
Total From Investment Operations ........... 0.0280 0.0097
---------------- ----------------
LESS DISTRIBUTIONS
Dividends(from net investment income) .......... (0.0226) (0.0097)
Distributions(from capital gains) .............. (0.0054) 0.0000
---------------- ----------------
Total Distributions ........................ (0.0280) (0.0097)
---------------- ----------------
NET ASSET VALUE, END OF PERIOD .................. $1.0000 $1.0000
================ ================
TOTAL RETURN (1) ................................. 2.83% 0.97%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period ($1,000's) ........... $1 $1
Ratio of Expenses to Average Net Assets (3) .... 1.73% 1.66% (4)
Ratio of Net Income to Average Net Assets ...... 2.12% 1.38% (4)
<FN>
(1) Returns of less than one year are not annualized.
(2) From the commencement of offering Class B shares.
(3) A portion of the expenses were reimbursed by the investment adviser, transfer agent, and distributor for the period
April 1, 1989 through December 31, 1995. Ratios for 1995 are based upon total expenses in accordance with
Securities & Exchange Commission Release No. FR 46, effective September 1, 1995. Ratios for prior periods were
calculated based on net expenses and have not been restated.
(4) Annualized.
</FN>
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - ACCOUNTING POLICIES
Composite Cash Management Company (the "Company"), is registered under the
Investment Company Act of 1940, as amended, as a diversified, open-end
management investment company. The Company consists of taxable and tax-exempt
money market portfolios, each designed to meet different investment objectives.
The Company offers both Class A and Class B shares. Class B shares were
first offered May 2, 1994. The two classes of shares differ in their respective
sales charges, shareholder servicing fees, and distribution and service fees.
All shareholders bear common expenses of the Company pro rata, based on value of
settled shares outstanding, without distinction between share class. Dividends
are declared separately for each class. Neither class has preferential dividends
rights; differences in per share dividend rates are generally due to differences
in separate class expenses, including distribution expenses and shareholder
servicing fees.
Following is a summary of significant accounting policies, in conformity
with generally accepted accounting principles, which are consistently followed
by the Company in the preparation of its financial statements.
a. Investment securities are valued at cost as adjusted for amortization of
premiums and discounts where applicable. The Board of Directors regularly
and routinely monitors amortized cost assigned to these securities to
insure that carrying value approximates market valuation.
b. The Company distributes its net interest income daily plus or minus any
realized gains or losses, if applicable. Net interest income equals return
on the investment portfolio less expenses including management fees.
c. Interest income is determined on the basis of interest accrued and
discounts earned and is computed daily.
d. Security transactions are accounted for on the trade date (execution date
of the order to buy or sell). The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
federal income tax purposes.
e. The Company complies with requirements of the Internal Revenue Code
applicable to regulated investment companies and distributes its income and
realized capital gains so that no provision for federal income or excise
tax is required.
f. In accordance with Securities and Exchange Commission Release No. FR. 46
effective September 1, 1995, custodian fees have been increased by $65,606
and $12,215 for the Money Market and Tax-Exempt Portfolios, respectively.
Such amounts relate to "expense offset arrangements." The Company could
have otherwise employed the assets to produce income if it had not entered
into such arrangements. In accordance with the regulations, such amounts
are added to custodian fees actually incurred to arrive at gross custodian
fees and then reflected as a deduction, "fees paid indirectly" to derive
net expenses. There were no "expense offset arrangements" other than
custodian fees.
NOTE 2 - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
The amounts of fees and expenses described below are shown on each
portfolio's statement of operations.
a. Management fees were paid by the Company to Composite Research & Management
Co.(CRMCo), the investment adviser. Effective July 1, 1995, management fees
are equal to an annual rate of .45% of average daily net assets of the
first $1 billion, and .40% on assets in excess of $1 billion. Prior to July
1995, management fees were equal to an annual rate of .50% of average daily
net assets.
Under terms of the investment management agreement, CRMCo will
reimburse the Company should any portfolio's expenses (excluding taxes,
interest, and portfolio brokerage but including the management fee) exceed
in any fiscal year 1.50% of the average daily net assets up to $30 million,
and 1% of such net assets over $30 million. No such reimbursement was
required during the year ended December 31, 1995.
b. Directors' fees and expenses were paid directly to directors having no
affiliation with the Company other than in their capacity as directors.
Other officers and directors received no compensation from the Company.
c. Shareholder servicing fees were paid to Murphey Favre Securities Services,
Inc.(MFSSI), the transfer and shareholder servicing agent, for services
incident to issuance and transfer of shares, maintaining shareholder lists,
and issuing and mailing distributions and reports. The authorized monthly
shareholder servicing fees are $1.55 and $1.65 per Class A and Class B
share account, respectively.
d. Distribution expenses were paid to Murphey Favre, Inc. (MFI),. the
principal underwriter and distributor, in accordance with separate
Distribution Plans for Class A and Class B. The Company's Board of
Directors adopted the Plans pursuant to Rule 12b-1 of the Investment
Company Act of 1940. The Class A Distribution Plan provides that the
Company will reimburse MFI up to 0.15% of the average daily net assets
attributable to Class A shares annually for a portion of its expenses
incurred in distributing the Company's Class A shares, including payments
to brokers. The Class B Distribution Plan provides that the Company will
pay MFI a distribution fee, equal to 0.75% annually, and a service fee of
0.25% of the Company's average daily net assets attributable to Class B
shares.
Under terms of the distribution contracts, MFI will reimburse the
Company should any portfolio's expenses exceed the most stringent
applicable state blue sky limitation. No such reimbursement was required
during the year ended December 31, 1995.
e. CRMCo, MFSSI, and MFI, have jointly agreed to reimburse the Tax-Exempt
Portfolio for a portion of expenses incurred. Additionally, effective
September 1, 1995, for all the Company shareholder accounts with balances
below $1,000, MFSSI has waived shareholder servicing fees and MFI has
reimbursed the Company for printing and postage costs.
NOTE 3 - CAPITAL STOCK
MONEY MARKET PORTFOLIO
Capital stock authorized ............. 5,000,000,000
Designated as:
Class A ......................... 3,000,000,000
Class B ......................... 2,000,000,000
Par value per share .................. $0.0001
<TABLE>
<CAPTION>
CLASS A CLASS B
-------------------------------------------- -------------------------------------
Year May 2, 1994
ended to
Years ended December 31, December 31, December 31,
SHARES 1995 1994 1995 1994 (1)
---------------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Sold ....................................... 468,926,898 379,040,156 157,286 15,876
Issued for reinvestment of dividends and
capital gains ............................. 7,464,213 4,312,013 2,616 94
---------------------- ----------------- ---------------- ----------------
476,391,111 383,352,169 159,902 15,970
Reacquired ................................. (430,816,328) (392,888,985) (96,301) (5,114)
---------------------- ----------------- ---------------- ----------------
Net increase (decrease) .................... 45,574,783 (9,536,816) 63,601 10,856
====================== ================= ================ ================
TAX EXEMPT PORTFOLIO:
Capital stock authorized ................... 5,000,000,000
Designated as:
Class A ................................ 3,000,000,000
Class B ................................ 2,000,000,000
Par value per share ........................ $0.0001
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------ -------------------------------------
Year May 2, 1994
ended to
Years ended December 31, December 31, December 31,
SHARES 1995 1994 1995 1994 (1)
---------------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Sold ...................................... 53,063,893 66,210,778 0 1,025
Issued for reinvestment of dividends and
capital gains ............................. 1,193,764 795,317 19 8
---------------------- ----------------- ---------------- ----------------
54,257,657 67,006,095 19 1,033
Reacquired ................................ (56,881,967) (67,907,359) (13) (6)
---------------------- ----------------- ---------------- ----------------
Net increase (decrease) ................... (2,624,310) (901,264) 6 1,027
====================== ================= ================ ================
<FN>
(1) From commencement of offering Class B shares.
</FN>
</TABLE>
<TABLE>
<CAPTION>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 4 - SHAREHOLDER MEETING RESULTS
A special meeting of the Company shareholders was held March 21, 1995. Each
matter voted upon at the meeting, as well as the number of votes cast for,
against or withheld, and abstained, are set forth below:
1. The Company shareholders elected the following nine directors:
MONEY MARKET PORTFOLIO TAX-EXEMPT PORTFOLIO
----------------------- --------------------
SHARES SHARES
SHARES WITHHOLDING SHARES WITHHOLDING
VOTED AUTHORITY VOTED AUTHORITY
"FOR" TO VOTE "FOR" TO VOTE
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Wayne L. Attwood, MD ...... 68,393,164 1,352,673 16,987,762 160,273
Kristianne Blake .......... 68,267,946 1,477,891 16,965,777 182,258
Anne V. Farrell ........... 68,217,079 1,528,758 16,960,831 187,204
Edwin J. McWilliams ....... 68,316,575 1,429,262 16,979,361 168,674
Michael K. Murphy ......... 68,446,264 1,299,573 16,955,243 192,792
William G. Papesh ......... 68,449,246 1,296,591 16,987,762 160,273
Jay Rockey ................ 68,452,595 1,293,242 16,965,943 182,092
Leland J. Sahlin .......... 68,160,009 1,585,828 16,986,227 161,808
Richard C. Yancey ......... 68,360,988 1,384,849 16,960,776 187,259
</TABLE>
2. The Company shareholders ratified the selection by a majority of the
independent members of the Company Board of Directors of LeMaster &
Daniels, PLLC, as independent accountants for the Company for the current
year, subject to termination at any time without penalty.
<TABLE>
<CAPTION>
SHARES SHARES
VOTED VOTED
"FOR" "AGAINST" ABSTAINED
--------- --------- ---------
<S> <C> <C> <C>
Money Market Portfolio ...................... 66,691,066 779,943 2,274,827
Tax-Exempt Portfolio ........................ 16,899,200 40,184 208,650
</TABLE>
3. The Company shareholders approved an increase in the allowable maturities
of securities to 397 days in both portfolios.
<TABLE>
<CAPTION>
SHARES SHARES
VOTED VOTED
"FOR" "AGAINST" ABSTAINED
--------- --------- ---------
<S> <C> <C> <C>
Money Market Portfolio ...................... 57,471,052 2,169,266 6,440,447
Tax-Exempt Portfolio ........................ 15,859,837 435,286 852,911
</TABLE>
<PAGE>
MORE ABOUT THE COMPOSITE GROUP
A RANGE OF OPPORTUNITY
The Composite Group offers investors six other distinct portfolios whose
securities range from value-oriented common stocks to U.S. government, corporate
and municipal bonds. An investment in one or more of these portfolios allows you
to more closely match your investment objectives with sensible investment
strategies.
COMPOSITE BOND & STOCK FUND
COMPOSITE BOND & STOCK FUND is managed to provide the potential for steady
income from bonds and long-term growth of principal from stocks. Taking a
conservative approach to meeting these objectives, we place as much emphasis on
credit-quality as on yields in choosing bonds, and on fundamental values as on
the potential for appreciation in choosing stocks.
COMPOSITE GROWTH & INCOME FUND
COMPOSITE GROWTH & INCOME FUND has as its objective the long-term growth of
capital, with current income a secondary consideration. In pursuit of this
objective, the Fund invests principally in high-quality common stocks which, in
our opinion, are undervalued.
COMPOSITE NORTHWEST FUND
COMPOSITE NORTHWEST FUND seeks to provide long-term growth of capital from
investment of common stocks of companies located or doing business in the
Pacific Northwest (Washington, Oregon, Idaho, Montana and Alaska).
COMPOSITE U.S. GOVERNMENT SECURITIES, INC.
COMPOSITE U.S. GOVERNMENT SECURITIES is designed and managed to provide a
high level of current income, consistent with safety and liquidity. The Fund
seeks to achieve this objective by investing in a careful selection of
obligations issued or backed by the full faith and credit of the United States
government and in repurchase agreements secured by these types of obligations.
Investors should understand that individual shares of the Fund are not
guaranteed by the U.S. government and share values will fluctuate.
COMPOSITE INCOME FUND
COMPOSITE INCOME FUND seeks to provide an attractive level of current
income primarily from investments in corporate bonds and mortgage-backed
securities. Securities with intermediate-term maturities and carefully selected
credit-quality characteristics provide the foundation for this investment
strategy.
COMPOSITE TAX-EXEMPT BOND FUND
COMPOSITE TAX-EXEMPT BOND FUND seeks to provide current income, free from
federal income tax. The Fund invests in high-quality municipal bonds which have
received one of the four highest ratings from Standard & Poor's Corporation or
Moody's Investor Service, Inc. In certain circumstances the alternative minimum
tax, as well as state and local taxes, may apply.
- --------------------------------------------------------------------------------
FOR MORE INFORMATION ON ANY OF THE COMPOSITE GROUP FUNDS, INCLUDING CHARGES
AND EXPENSES, WRITE OR CALL FOR A FREE PROSPECTUS. PLEASE READ IT CAREFULLY
BEFORE YOU INVEST OR SEND MONEY.
<PAGE>
FOR FURTHER INFORMATION, PLEASE CONTACT:
FUND OFFICES
Composite Group of Funds
601 W. Main Avenue, Suite 801
Spokane, WA 99201-0613
Phone: (509) 353-3550
Toll free: (800) 543-8072
ADVISER
Composite Research & Management Co.
1201 Third Avenue, Suite 1220 Seattle, WA 98101-3015
DISTRIBUTOR
Murphey Favre, Inc.
1201 Third Avenue, Suite 780 Seattle, WA 98101-3015
CUSTODIAN
Investors Fiduciary Trust Company
127 W. 10th Street Kansas City, MO 64105-1716
INDEPENDENT PUBLIC ACCOUNTANTS
LeMaster & Daniels, PLLC
601 W. Riverside, Suite 800 Spokane, WA 99201-0614
COUNSEL
Paine, Hamblen, Coffin, Brooke & Miller
717 W. Sprague Avenue, Suite 1200 Spokane, WA 99204-0464
OFFICERS
PRESIDENT
William G. Papesh
EXECUTIVE VICE PRESIDENT
Kerry K. Killinger
VICE PRESIDENTS
Gene G. Branson
Douglas D. Springer
VICE PRESIDENT & TREASURER
Monte D. Calvin
SECRETARY
John T. West
BOARD OF DIRECTORS
CHAIRMAN
Leland J. Sahlin
MEMBERS
Wayne L. Attwood, M.D.
Kristianne Blake
Anne V. Farrell
Edwin J. McWilliams
Michael K. Murphy
William G. Papesh
Jay Rockey
Richard C. Yancey
This report is submitted for the general information of shareholders of the
Fund. For more detailed information about the Fund, its officers and
directors, fees, expenses and other pertinent information, please see the
prospectus of the Fund. This report is not authorized for distribution to
prospective investors in the Fund unless preceded or accompanied by an
effective prospectus.
COMPOSITE
CASH
MANAGEMENT
COMPANY
ANNUAL
REPORT
December 31, 1995
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