FUND PORTFOLIOS..............................2
FINANCIAL INFORMATION
INDEPENDENT PUBLIC ACCOUNTANTS' REPORT....10
FINANCIAL STATEMENTS......................11
FINANCIAL HIGHLIGHTS......................14
NOTES TO FINANCIAL STATEMENTS.............16
COMPOSITE MONEY MARKET PORTFOLIOS CONTINUE TO OFFER A PRUDENT
STRATEGY FOR SHORT-TERM INVESTING
Despite the recent crisis in the Asian markets, consumer confidence in the
U.S. economy remained largely positive through the end of 1997. This was seen as
a result of several factors, including the modest recovery of the stock market,
declining unemployment, low interest rates, and benign inflation.
Our money market portfolios, which are particularly sensitive to inflation-
ary pressures and any corresponding interest rate increases, continue to offer
sound value to shareholders who seek capital preservation and liquidity.
While some concerns persisted about the tightness of the labor markets and
increasing wage growth, the Federal Reserve Board took rate action only once
during the year. On March 25, it increased the target Fed Funds rate from 5.25%
to 5.50%. However, as investors' concerns about inflation eased, the U.S.
Treasury bill yield declined from 5.23% in July to 4.97% in early October. At
year-end, the short end of the Treasury bill yield curve steepened to 5.34%.
[PHOTO - WILLIAM G. PAPESH, COMPOSITE GROUP OF FUNDS PRESIDENT]
PORTFOLIOS' PERFORMANCE*
At December 31, 1997, the seven-day simple yield for Class A shares of the
Money Market Portfolio was 5.18%, or 5.32% on a compounded annual basis.
Securities in the Money Market Portfolio had a weighted average maturity of 49
days.
The seven-day simple yield for Class A shares of the Tax-Exempt Portfolio
was 3.40%, or 3.46% on a compounded annual basis. Securities in the Tax-Exempt
Portfolio had a weighted average maturity of 60 days.
The Funds' adviser waived a portion of the expenses of the Tax-Exempt
Portfolio. Without the waiver, the seven-day simple yield for Class A shares
would have been 3.24%.
WE APPRECIATE YOUR BUSINESS
We hope to continue to earn the trust you have placed in us. Many thanks
for your confidence in Composite Cash Management Company during 1997.
/s/ William G. Papesh
WILLIAM G. PAPESH
PRESIDENT
*All yield information represents past performance, which cannot guarantee
future results. Principal is not guaranteed or insured by the U.S. government,
and yields will fluctuate depending on market conditions. There is no assurance
that the portfolios will maintain the $1.00 per share net asset value (NAV).
Class B shares are available only by exchanging B shares from other Composite
Group funds and are intended as temporary investments. The seven-day simple
yield, after expense reimbursement, for the Class B shares through December 31,
1997, was 4.50% for the Money Market Portfolio and 2.49% for the Tax-Exempt
Portfolio. The alternative minimum tax, as well as state and local taxes, may
apply to income distributed by the Tax-Exempt Portfolio.
<PAGE>
COMPOSITE CASH MANAGEMENT COMPANY
PORTFOLIO OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- MONEY MARKET PORTFOLIO ----------
<S> <C>
SHORT-TERM INVESTMENTS
CERTIFICATES OF DEPOSIT - DOMESTIC - 4.32%
$ 1,300,000 Bank of New York Company, Inc., 5.75%, due 01/08/1998...... $ 1,299,969
5,000,000 Bankers Trust New York Corporation, 5.97%, due 08/28/1998.. 4,999,688
5,000,000 Bankers Trust New York Corporation, 5.94%, due 09/10/1998.. 4,997,995
-----------
TOTAL CERTIFICATES OF DEPOSIT - DOMESTIC (cost $11,297,652) 11,297,652
-----------
CERTIFICATES OF DEPOSIT - FOREIGN - 0.77%
2,000,000 Swiss Bank Corporation, 5.98%, due 03/19/1998
(cost $2,000,461)........................................ 2,000,461
-----------
COMMERCIAL PAPER - DOMESTIC - 48.62%
5,000,000 Bear Stearns Companies, Inc., 5.88%, due 02/02/1998........ 4,974,683
5,000,000 Beneficial Corporation, 5.58%, due 01/23/1998.............. 4,983,725
3,000,000 Caterpillar Financial Services Corporation, 5.57%,
due 01/09/1998........................................... 2,996,751
3,000,000 Caterpillar Financial Services Corporation, 5.90%,
due 01/30/1998........................................... 2,986,233
5,000,000 Chrysler Financial Corporation, 5.72%, due 01/21/1998...... 4,984,906
5,000,000 Columbia University, New York, 5.70%, due 03/05/1998....... 4,950,917
5,000,000 John Deere Capital Corporation, 5.52%, due 01/08/1998...... 4,995,400
3,000,000 John Deere Capital Corporation, 5.70%, due 02/04/1998...... 2,984,325
3,000,000 Ford Motor Credit Company, 5.62%, due 01/06/1998........... 2,998,127
5,000,000 Ford Motor Credit Company, 5.53%, due 01/09/1998........... 4,994,624
5,250,000 General Electric Capital Corporation, 5.55%,
due 01/12/1998........................................... 5,241,906
5,000,000 General Electric Capital Corporation, 5.69%,
due 01/16/1998........................................... 4,988,936
5,000,000 General Motors Acceptance Corporation, 5.74%,
due 01/16/1998........................................... 4,988,839
5,000,000 General Motors Acceptance Corporation, 5.74%,
due 01/20/1998........................................... 4,985,650
4,000,000 Goldman Sachs Group, L.P., 5.80%, due 01/16/1998........... 3,990,978
5,000,000 Household Finance Corporation, 5.80%, due 01/14/1998....... 4,990,333
5,000,000 IBM Credit Corporation, 5.60%, due 01/06/1998.............. 4,996,889
3,000,000 IBM Credit Corporation, 5.70%, due 01/23/1998.............. 2,990,025
5,000,000 IBM Corporation, 5.71%, due 02/13/1998..................... 4,966,692
5,000,000 Merrill Lynch & Co., Inc., 5.72%, due 01/02/1998........... 5,000,000
4,400,000 Morgan Stanley Dean Witter Discover & Co.,
5.60%, due 01/22/1998.................................... 4,386,311
3,000,000 National Rural Utilities Coop. Finance Corporation,
5.54%, due 01/08/1998.................................... 2,997,230
1,350,000 National Rural Utilities Coop. Finance Corporation,
5.58%, due 01/12/1998.................................... 1,347,907
3,000,000 National Rural Utilities Coop. Finance Corporation,
5.60%, due 01/27/1998.................................... 2,988,333
3,000,000 National Rural Utilities Coop. Finance Corporation,
5.60%, due 02/06/1998.................................... 2,983,667
2,650,000 National Rural Utilities Coop. Finance Corporation,
5.70%, due 03/13/1998.................................... 2,620,629
3,000,000 Sears Roebuck Acceptance Corporation, 6.12%,
due 01/07/1998........................................... 2,997,450
5,000,000 Sears Roebuck Acceptance Corporation, 5.56%,
due 01/15/1998........................................... 4,989,961
5,000,000 Sears Roebuck Acceptance Corporation, 5.60%,
due 01/28/1998........................................... 4,979,778
2,800,000 Weyerhaeuser Real Estate Company, 5.80%, due 01/05/1998.... 2,798,647
3,000,000 Xerox Credit Corporation, 5.70%, due 02/10/1998............ 2,981,475
2,000,000 Yale University, 5.80%, due 01/13/1998..................... 1,996,456
-----------
TOTAL COMMERCIAL PAPER - DOMESTIC (cost $127,057,783)...... 127,057,783
-----------
COMMERCIAL PAPER - FOREIGN - 13.23%
2,000,000 BHP Finance (USA) Inc., 5.75%, due 02/06/1998.............. 1,988,819
5,000,000 China Merchants (Cayman), Inc., Series B, 5.75%, due
03/02/1998 (Direct-pay letter of credit: Credit Suisse
First Boston)............................................ 4,952,882
5,000,000 Sharp Electronics Corporation, 5.83%, due 02/06/1998....... 4,971,660
1,700,000 Toshiba Capital (Asia) Limited, 6.00%, due 01/20/1998...... 1,694,900
5,000,000 Toshiba Capital (Asia) Limited, 5.60%, due 03/05/1998...... 4,951,778
5,000,000 Toshiba International Finance (UK) PLC, 5.75%,
due 01/28/1998........................................... 4,979,236
1,115,000 Toshiba International Finance (UK) PLC, 5.55%,
due 02/12/1998........................................... 1,107,952
5,000,000 Toyota Motor Credit Corporation, 5.71%, due 02/20/1998..... 4,961,140
5,000,000 Xerox Capital (Europe) PLC, 5.72%, due 02/13/1998.......... 4,966,633
-----------
TOTAL COMMERCIAL PAPER - FOREIGN (cost $34,575,000)........ 34,575,000
-----------
CORPORATE NOTES AND BONDS - 24.30%
10,000,000 American Express Centurion Bank, 5.94%, due 03/03/1998*.... 10,000,092
5,000,000 Bear Stearns Companies, Inc., 5.95%, due 10/15/1998*....... 5,000,000
1,326,000 Beneficial Corporation, 9.125%, due 02/15/1998............. 1,329,996
3,550,000 Dean Witter Discover and Company, 6.00%, due 03/01/1998.... 3,550,963
5,000,000 Dean Witter Discover and Company, 6.00%, due 08/10/1998*... 5,002,358
5,000,000 Ford Motor Credit Company, 6.25%, due 02/26/1998........... 5,002,795
2,100,000 General Electric Capital Corporation, 7.25%,
due 03/03/1998........................................... 2,104,594
2,000,000 General Motors Acceptance Corporation, 6.27%,
due 04/17/1998*.......................................... 2,000,265
1,000,000 General Motors Acceptance Corporation, 6.15%,
due 05/11/1998........................................... 1,000,674
5,000,000 International Lease Finance Corporation, 8.125%,
due 01/15/1998........................................... 5,003,894
5,000,000 International Lease Finance Corporation, 5.92%,
due 02/02/1998........................................... 5,000,461
5,000,000 Merrill Lynch & Co., Inc., 5.92%, due 07/28/1998*.......... 5,000,000
2,000,000 Merrill Lynch & Co., Inc., 5.92%, due 08/03/1998*.......... 2,000,000
1,000,000 Merrill Lynch & Co., Inc., 5.91%, due 10/21/1998........... 1,000,189
5,000,000 PNC Bank, N.A., 6.00%, due 06/05/1998*..................... 5,001,013
2,500,000 Toyota Motor Credit Corporation, 5.625%, due 03/17/1998.... 2,498,584
3,000,000 Toyota Motor Credit Corporation, 7.00%, due 04/27/1998..... 3,010,270
-----------
TOTAL CORPORATE NOTES AND BONDS (cost $63,506,148)......... 63,506,148
-----------
SHORT-TERM INVESTMENTS (continued)
FEDERAL AGENCY OBLIGATIONS - 7.08%
$ 3,000,000 Federal Home Loan Bank, 5.625%, due 02/12/1998*............ $ 3,000,000
4,000,000 Federal Home Loan Bank, 5.67%, due 03/05/1998*............. 4,000,000
3,000,000 Federal Home Loan Bank, 5.645%, due 10/02/1998............. 2,997,195
1,000,000 Federal Home Loan Bank, 5.91%, due 12/18/1998.............. 1,000,000
3,000,000 Federal Home Loan Bank, 6.00%, due 12/30/1998.............. 3,000,000
3,000,000 Federal Home Loan Mortgage Corporation, 5.84%,
due 04/08/1998........................................... 3,000,810
1,500,000 Private Export Funding, 5.75%, due 04/30/1998.............. 1,499,657
-----------
TOTAL FEDERAL AGENCY OBLIGATIONS (cost $18,497,662)........ 18,497,662
-----------
REPURCHASE AGREEMENT - 1.71%
4,460,000 Repurchase agreement with Credit Suisse First Boston
Corporation, collateralized by a U.S. Treasury Note,
in a joint trading account at 6.00%, dated 12/31/1997,
due 01/02/1998 with a maturity value of $4,461,487
(cost $4,460,000).......................................... 4,460,000
-----------
TOTAL INVESTMENTS (cost $261,394,706)...................... 261,394,706
Other assets net of liabilities............................ (46,596)
-----------
NET ASSETS................................................. $261,348,110
===========
</TABLE>
*Variable rate security. The interest rate shown reflects the rate currently in
effect.
FEDERAL INCOME TAX INFORMATION:
The aggregate cost of investments owned at December 31, 1997, for federal income
tax and financial reporting purposes was $261,394,706.
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
TAX-EXEMPT PORTFOLIO
PRINCIPAL MARKET
AMOUNT VALUE
- ------------- STATE AND MUNICIPAL SECURITIES - 101.56% ----------
<S> <C>
BONDS - 39.26%
$ 200,000 Albany/Dougherty County Hospital Authority, GA,
Hospital Revenue Anticipation Certificates, Series 1990A,
6.70%, due 09/01/1998.................................... $ 203,608
500,000 Auburn, CA, Union School District, 1997 Tax and Revenue
Anticipation Notes, 4.25%, due 10/13/1998................ 501,604
620,000 Cache County, UT, School District (General Obligation
School Building Bonds), Series 1997, 4.00%,
due 06/15/1998........................................... 620,390
450,000 Clackamas County, OR, Health Facilities Authority Insured
Hospital Revenue Refunding Bonds (Adventist Health System/
West), Series 1992A, 5.35%, due 03/01/1998............... 451,144
145,000 Clark County, WA, Public Utility District No. 1 (Electric
System & Refunding Bonds), Series 1997, 3.90%,
due 01/01/1998........................................... 145,000
150,000 Colorado Board of Agriculture (Colorado State University),
Auxiliary Facilities Enterprise Refunding & Improvement
Revenue Bonds, Series 1997, 3.85%, due 03/01/1998........ 150,000
500,000 Dallas, TX, Limited Tax General Obligation Bonds, Series
1990, 6.875%, due 02/15/1998............................. 501,846
400,000 Illinois Unlimited Tax General Obligation Bonds, Series of
February 1997, 4.375%, due 02/01/1998.................... 400,169
1,000,000 Intermountain Power Agency, Utah Power Supply Revenue Bond,
1985 Series E, 3.70%, Put Date: 02/19/1998............... 1,000,000
500,000 Intermountain Power Agency, Utah Power Supply Revenue Bond,
1985 Series E, 3.75%, Put Date: 03/15/1998............... 500,000
200,000 Maryland Unlimited Tax General Obligation Bonds, (State and
Local Facilities Loan of 1984), First Series, 8.20%,
due 03/01/1998........................................... 201,366
500,000 Massachusetts Bay Transportation Authority Unlimited
Tax Note, 3.70%, due 01/14/1998.......................... 500,000
1,200,000 Mesa, AZ, Municipal Development Corporation (Special Tax
Updates Bonds), Series 1996A, 3.70%, due 02/25/1998...... 1,200,000
450,000 Minneapolis, MN, Special School District No. 1, Certificates
of Participation, Series 1996A, 5.50%, due 02/01/1998.... 450,594
150,000 Mukwonago Area School District, WI, (General Obligation
Refunding Bonds), Series 1992A, 5.25%, due 04/01/1998.... 150,508
250,000 New Jersey Housing and Mortgage Finance Agency, (Multifamily
Housing Revenue Bonds), 1995 Series A, 4.15%,
due 05/01/1998........................................... 250,229
500,000 Oxnard, CA, School District 1997 Tax and Revenue
Anticipation Notes, 4.50%, due 08/13/1998................ 501,912
100,000 Pennsylvania Unlimited General Obligation Bonds,
Second Series A of 1988, 6.80%, due 05/15/1998........... 101,056
420,000 Pflugerville, TX, Independent School District Unlimited
Tax School Building and Refunding Bonds, 4.25%,
due 08/15/1998........................................... 421,042
200,000 Portland, OR, Limited Tax Improvement Bonds,
1995 Series A, 8.00%, due 06/01/1998..................... 203,384
350,000 Portland, OR, Water System Revenue Bonds,
Series 1995, 4.10%, due 08/01/1998....................... $ 350,573
250,000 Providence, RI, Unlimited Tax General Obligation
Refunding Bonds, 6.10%, due 09/01/1998................... 253,607
900,000 Sabine River, TX, Industrial Development Authority Revenue
Bonds (Northeast Texas Electric Cooperative, Inc., Project),
Pooled Series 1984Q, 3.65%, due 02/15/1998............... 899,334
255,000 Soos Creek, WA, Water and Sewer Refunding,
Series D, 7.10%, due 02/01/1998.......................... 255,693
500,000 Tempe, AZ, Unified High School District Unlimited
Tax Note, 14.35%, due 07/01/1998......................... 524,955
505,000 Toledo, OH, Limited Tax General Obligation Bonds, Various
Purpose Improvement Bonds, Series 1997, 3.90%,
due 12/01/1998........................................... 505,347
250,000 Utah State Board of Regents Hospital Revenue Refunding
Bonds (University of Utah), Series 1997, 4.75%,
due 08/01/1998........................................... 251,336
100,000 Virginia Public Building Authority (State Building Revenue
Refunding Bonds), Series 1992B, 5.20%, due 08/01/1998.... 100,731
100,000 State of Washington Unlimited Tax General Obligation
Refunding Bonds, Series R-93B, 4.40%, due 10/01/1998..... 100,387
500,000 Washington Suburban Sanitary District, MD, (Sewage
Disposal Bonds of 1994), 5.75%, due 06/01/1998........... 503,671
200,000 Wisconsin Health and Education Facilities Authority
Revenue Bonds, (Waukesha Memorial Hospital),
Series 1995A, 4.30%, due 08/15/1998...................... 220,457
200,000 Wisconsin Unlimited Tax General Obligation Bonds
of 1986, Series C, 5.25%, due 05/01/1998................. 200,926
-----------
12,620,869
-----------
REFUNDED BONDS - 8.07%
250,000 Howard County, MD, Metropolitan District Bonds, 1989
Series A, 7.40%, due 01/01/1999, Pre-refunded at 101..... 260,826
500,000 Indiana State Office Building Commission Capitol Complex
Revenue Bonds, (Indiana Government Center - State Office
Building I), Series 1988, 7.75%, due 07/01/1998
Pre-refunded at 102...................................... 518,794
1,000,000 Texas State Public Finance Authority Revenue Bonds
(Building Projects), Series 1990A, 6.80%,
due 02/01/1998, Escrowed to Maturity..................... 1,002,416
500,000 Washington County, OR, School District #48J (Beaverton),
Unlimited Tax General Obligation Bonds,
7.40%, due 06/01/1998, Pre-refunded at 100............... 506,294
300,000 State of Washington Unlimited Tax General Obligation
Refunding Bonds, Series R-89A, 7.50%, due 09/01/1998,
Pre-refunded at 100...................................... 307,086
-----------
2,595,416
-----------
VARIABLE RATE DEMAND OBLIGATIONS* - 54.22%
$ 500,000 Alabama State Special Care Facilities Financing Authority
(Montgomery Hospital Depreciable Assets),
Series 1985, due 04/01/2015, 3.70%....................... $ 500,000
300,000 Arizona State Health Facilities Authority Revenue Bonds
(Pooled Loan Program), Series 1985, due 10/01/2015,
3.70%.................................................... 300,000
500,000 Athens, AL, Industrial Development Board Revenue Bonds
(Coilplus, Inc., Project), Series 1984, due 09/01/1999,
4.65%.................................................... 500,000
500,000 Austin County, TX, Industrial Development Corporation
(Justin Industries, Inc., Project), Series 1984,
due 12/01/2014, 3.70%**.................................. 500,000
500,000 Brazos River, TX, Pollution Control Revenue Refunding Bonds
(Monsanto Company Project), Series 1988,
due 11/01/2000, 3.70%**.................................. 500,000
400,000 Brazos River, TX, Pollution Control Revenue Bonds (Monsanto
Company Project), Series 1990, due 09/01/2002, 3.80%**... 400,000
500,000 Chicago O'Hare International Airport General Airport Second
Lien Revenue Bonds, 1984 Series A, due 01/01/2015, 3.70%. 500,000
500,000 Chicago O'Hare International Airport General Airport Second
Lien Revenue Bonds, 1984 Series B, due 01/01/2015, 3.70%. 500,000
500,000 Delaware Valley, PA, Regional Finance Authority (Local
Government Revenue Bonds), Series 1985C,
due 12/01/2020, 3.65%.................................... 500,000
500,000 Delaware Valley, PA, Regional Finance Authority (Local
Government Revenue Bonds), Series 1985D,
due 12/01/2020, 3.65%.................................... 500,000
200,000 Grapevine, TX, Industrial Development Corporation (American
Airlines), 1984 Series A, due 12/01/2024, 5.00%.......... 200,000
200,000 Grapevine, TX, Industrial Development Corporation (American
Airlines), 1984 Series B, due 12/01/2024, 5.00%.......... 200,000
500,000 Hampton Roads, VA, Regional Jail Authority (Jail Facilities
Revenue Bonds), Series 1996B, due 07/01/2016, 3.70%...... 500,000
400,000 Illinois State Health Facilities Authority (Bensenville Home
Society), Series 1989A, due 02/15/2019, 3.70%............ 400,000
400,000 Illinois State Health Facilities Authority (Hospital Sisters
Services), Series 1985E, due 12/01/2014, 3.70%........... 400,000
800,000 Illinois State Health Facilities Authority (Hospital Sisters
Services), Series 1985E, due 12/01/2015, 3.70%........... 800,000
1,400,000 Indiana State Development Authority, Education Facilities
Project Revenue Bonds (Lutheran High School),
due 10/01/2017, 3.85%.................................... 1,400,000
200,000 Kentucky Infrastructure Authority, Governmental Agencies
Program, Revenue Bond Anticipation Notes,
1997 Series A, due 06/30/1998, 3.75%..................... 200,000
200,000 Los Angeles Regional Airport Facilities Sublease Revenue
Bonds (American Airlines/Los Angeles International Airport),
due 12/01/2024, 5.0%**................................... 200,000
300,000 Los Angeles Regional Improvement Corporation Lease Revenue
Bonds (Los Angeles International Airport), LAX Two,
due 12/01/2025, 5.00%.................................... 300,000
1,100,000 Lower Neches Valley, TX, Industrial Development Corporation
Pollution Control Revenue Bonds (Neches River Treatment
Corporation Project), Series 1994A, due 02/01/2004, 3.70%,
(Guaranteed by Mobil Corporation)**...................... 1,100,000
300,000 Metropolitan Nashville Airport Authority, TN,
Special Facilities Revenue Bonds (American Airlines
Project), Series A, due 10/01/2012, 5.00%................ 300,000
500,000 Metro Government Nashville/Davidson County, TN, Industrial
Development Board Multifamily Housing Revenue Bonds
(Chimneytop II - Oxford Associates Limited Partnership),
1984 Series A, due 09/01/2006, 3.80%..................... 500,000
300,000 Michigan State Job Development Authority Industrial
Development Revenue Bonds (East Lansing Residence),
due 12/01/2014, 3.80%.................................... 300,000
200,000 Michigan State Job Development Authority Industrial
Development Revenue Bonds (Kentwood Residence Associates
Project), Series 1984, due 11/01/2014, 3.80%............. 200,000
300,000 Michigan State Hospital Finance Authority (Equipment Loan
Program Bonds), Series A, due 12/01/2023, 3.80%.......... 300,000
300,000 Michigan State Hospital Finance Authority (Equipment Loan
Program Bonds), Series A, due 12/01/2023, 3.80%.......... 300,000
500,000 Missouri Environmental Improvement and Energy Resources
Authority, Pollution Control Revenue Bonds (Monsanto
Company), due 06/01/2023, 3.80%**........................ 500,000
200,000 North Carolina Education Facilities Finance Authority Bonds
(Bowman Gray School of Medicine Project), Series 1990,
due 09/01/2020, 4.05%.................................... 200,000
500,000 Oregon State Veteran's Welfare Unlimited Tax General
Obligation Bonds, Series 73E, due 12/01/2016, 3.70%...... 500,000
200,000 Peninsula Ports Authority, VA, Coal Terminal Revenue Bonds
(Dominion Terminal Associates Project),
Series 1987-C, due 07/01/2016, 5.00%..................... 200,000
1,000,000 Richland, WA, Golf Enterprise Revenue Bonds,
1996, due 12/01/2021, 4.15%.............................. 1,000,000
1,430,000 Seattle, WA, Housing Authority Low Income Housing
Assistance Revenue Bonds (Bayview Manor Project),
1994, due 05/01/2019, 4.15%.............................. 1,430,000
900,000 Wisconsin State Health and Educational Facilities Authority
Facilities Revenue Bonds (SSM Health Care Projects),
Series 1990A, due 06/01/2006, 3.70%...................... 900,000
400,000 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Wheaton Franciscan Services, Inc., System),
Series 1997, due 08/15/2016, 3.70%....................... 400,000
-----------
17,430,000
-----------
TOTAL STATE AND MUNICIPAL SECURITIES (cost $32,646,285).... 32,646,285
-----------
SHARES
--------- OTHER INVESTMENT - 0.38%
121,400 Nuveen Tax Exempt Money Market Fund, 3.66% (cost $121,400). $ 121,400
-----------
TOTAL INVESTMENTS (cost $32,767,685)....................... 32,767,685
Other assets net of liabilities............................ (621,415)
-----------
NET ASSETS................................................. $32,146,270
===========
</TABLE>
*Variable Rate Demand Obligations ("VRDOs") are payable on demand and secured by
letters of credit, liquidity agreements, and other credit support. The
interest rate is subject to change periodically, and is based on an index of
market interest rates.
**Obligations of various corporations which are not supported by other third
party credit agreements.
FEDERAL INCOME TAX INFORMATION:
The aggregate cost of investments owned at December 31, 1997, for federal income
tax and financial reporting purposes was $32,767,685.
See accompanying notes to financial statements.
<PAGE>
COMPOSITE CASH MANAGEMENT COMPANY
FINANCIAL INFORMATION
DECEMBER 31, 1997
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 of
Composite Cash Management Company (comprising, respectively, the Money Market
and Tax-Exempt Portfolios), including the investment portfolios, as of December
31, 1997, and the related statements of operations for the year then ended and
the statements of changes in net assets for the years ended December 31, 1997
and 1996, and the financial highlights for each of the five years in the period
ended December 31, 1997. 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, 1997, 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 financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective portfolios constituting Composite Cash Management Company as
of December 31, 1997, 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 20, 1998
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
MONEY MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
------------ ----------
<S> <C> <C>
ASSETS
Investments at value (identified cost $261,394,706, and $32,767,685,
respectively).......................................................... $261,394,706 $32,767,685
Cash..................................................................... 312,759 109,137
Prepaid expense.......................................................... 9,074 4,406
Receivable for:
Sale of Fund's shares.................................................. 1,062,008 53,524
Interest............................................................... 1,713,035 299,217
----------- -----------
Total assets............................................................. 264,491,582 33,233,969
----------- -----------
LIABILITIES
Payable for:
Investment securities purchased........................................ - 961,483
Repurchase of Fund's shares............................................ 3,067,073 115,516
Accrued expenses and other payables.................................... 76,399 10,700
----------- -----------
Total liabilities........................................................ 3,143,472 1,087,699
----------- -----------
NET ASSETS............................................................... $261,348,110 $32,146,270
=========== ===========
COMPOSITION OF NET ASSETS
Capital stock, at par.................................................... $ 26,135 $ 3,215
Additional paid-in capital............................................... 261,321,975 32,143,055
----------- -----------
$261,348,110 $32,146,270
SHARES OUTSTANDING....................................................... 261,348,110 32,146,270
=========== ===========
CLASS A SHARES:
Net asset value, offering price, and redemption price per share
(net assets of $260,877,498 and $32,134,470, respectively, for
260,877,498 and 32,134,470 shares outstanding, respectively)......... $1.00 $1.00
CLASS B SHARES: =========== ===========
Net asset value, offering price, and redemption price per share
(net assets of $470,612 and $11,800, respectively, for 470,612
and 11,800 shares outstanding, respectively)......................... $1.00 $1.00
=========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
MONEY MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
------------ ----------
<S> <C> <C>
INVESTMENT INCOME
Interest income........................................................ $14,420,370 $1,186,528
------------ ----------
Expenses:
Management fees........................................................ 1,148,906 143,965
Distribution expenses -
Class A.............................................................. 50,492 -
Class B.............................................................. 2,233 91
Shareholder servicing -
Class A.............................................................. 476,348 26,630
Class B.............................................................. 427 58
Postage, printing and
office expense....................................................... 151,433 10,553
Registration and filing fees........................................... 147,863 18,754
Custodial fees......................................................... 120,711 13,859
Directors' fees........................................................ 8,499 8,499
Auditing and legal fees................................................ 10,537 6,331
Insurance.............................................................. 4,442 1,443
Expense reimbursement.................................................. (198,432) (45,307)
------------ ----------
Total expenses........................................................... 1,923,459 184,876
Fees paid indirectly..................................................... (88,033) (7,751)
------------ ----------
Net expenses............................................................. 1,835,426 177,125
------------ ----------
Net investment income.................................................... 12,584,944 1,009,403
------------ ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... $12,584,944 $1,009,403
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF CHANGES IN NET ASSETS
MONEY MARKET TAX-EXEMPT
PORTFOLIO PORTFOLIO
----------------------- -----------------------
YEARS ENDED DECEMBER 31, YEARS ENDED DECEMBER 31,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income ................................. $ 12,584,944 $ 9,711,582 $ 1,009,403 $ 946,958
------------ ----------- ----------- ----------
Net increase in net assets resulting from operations .. 12,584,944 9,711,582 1,009,403 946,958
DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income:
Class A ............................................. (12,575,604) (9,706,992) (1,009,190) (946,927)
Class B ............................................. (9,340) (4,590) (213) (31)
NET CAPITAL SHARE TRANSACTIONS
Class A.............................................. 31,522,179 58,129,940 160,533 986,131
Class B.............................................. 353,674 42,492 9,595 1,172
----------- ---------- ----------- ----------
Total increase in net assets........................... 31,875,853 58,172,432 170,128 987,303
NET ASSETS
Beginning of the year ................................. 229,472,257 171,299,825 31,976,142 30,988,839
----------- ----------- ----------- -----------
End of the year ....................................... $261,348,110 $229,472,257 $32,146,270 $31,976,142
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
CLASS A YEAR ENDED DECEMBER 31,
-------------------------------------------------------
1997 1996 1995 1994 1993
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ...................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income.................................. 0.0493 0.0476 0.0519 0.0341 0.0238
------- ------- ------- ------- -------
Total from investment operations..................... 0.0493 0.0476 0.0519 0.0341 0.0238
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends (from net investment income)................. (0.0493) (0.0476) (0.0519) (0.0341) (0.0238)
------- ------- ------- ------- -------
Total distributions.................................. (0.0493) (0.0476) (0.0519) (0.0341) (0.0238)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR ............................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
TOTAL RETURN ............................................ 5.04% 4.88% 5.33% 3.47% 2.41%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year ($1,000's)..................... $260,877 $229,355 $171,225 $125,651 $135,187
Ratio of expenses to average net assets(1) ............ 0.75% 0.79% 0.92% 0.95% 0.97%
Ratio of net income to average net assets.............. 4.93% 4.77% 5.19% 3.39% 2.38%
CLASS B YEAR ENDED DECEMBER 31, MAY 2 TO
-------------------------------- DEC. 31,
1997 1996 1995 1994(2)
-------- -------- -------- --------
NET ASSET VALUE, BEGINNING OF PERIOD .................... $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income.................................. 0.0407 0.0384 0.0421 0.0184
------- ------- ------- -------
Total from investment operations..................... 0.0407 0.0384 0.0421 0.0184
------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends (from net investment income)................. (0.0407) (0.0384) (0.0421) (0.0184)
------- ------- ------- -------
Total distributions.................................. (0.0407) (0.0384) (0.0421) (0.0184)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD .......................... $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= =======
TOTAL RETURN ............................................ 4.15% 3.91% 4.30% 2.78%(3)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($1,000's)................... $471 $117 $74 $11
Ratio of expenses to average net assets(1) ............ 1.59% 1.69% 1.94% 1.93%(3)
Ratio of net income to average net assets.............. 4.15% 3.87% 4.19% 3.29%(3)
</TABLE>
(1) Ratio of expenses to average net assets includes expenses paid indirectly
beginning in fiscal 1995. The ratios before voluntary waiver of certain fees
incurred by the portfolio and expense reimbursements for Class A shares were
.83% for 1997, .89% for 1996, 1.04% for 1995, 1.04% for 1994, and 1.03% for
1993; for Class B shares, the ratios were 1.80% for 1997, 1.90% for 1996,
2.10% for 1995 and 2.62% for 1994.
(2) From the commencement of offering Class B Shares.
(3) Annualized.
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
TAX-EXEMPT PORTFOLIO
CLASS A YEAR ENDED DECEMBER 31,
-----------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF YEAR ...................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
INCOME FROM INVESTMENT OPERATIONS ------- ------- ------- ------- -------
Net investment income.................................. 0.0314 0.0301 0.0339 0.0235 0.0203
Net gains on securities
(both realized and unrealized)........................ - - 0.0054 - -
------- ------- ------- ------- -------
Total from investment operations..................... 0.0314 0.0301 0.0393 0.0235 0.0203
------- ------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends (from net investment income)................. (0.0314) (0.0301) (0.0339) (0.0235) (0.0203)
Distributions (from capital gains)..................... - - (0.0054) - -
------- ------- ------- ------- -------
Total distributions.................................. (0.0314) (0.0301) (0.0393) (0.0235) (0.0203)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR ............................ $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= =======
TOTAL RETURN............................................. 3.18% 3.05% 4.01% 2.37% 2.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year ($1,000's)..................... $32,134 $31,974 $30,988 $33,612 $34,513
Ratio of expenses to average net assets(1) ............ 0.57% 0.57% 0.61% 0.60% 0.50%
Ratio of net income to average net assets.............. 3.14% 3.01% 3.39% 2.33% 2.03%
CLASS B YEAR ENDED DECEMBER 31, MAY 2 TO
--------------------------- DEC. 31,
1997 1996 1995 1994(2)
------- ------- ------- -------
NET ASSET VALUE, BEGINNING OF PERIOD .................... $1.0000 $1.0000 $1.0000 $1.0000
INCOME FROM INVESTMENT OPERATIONS ------- ------- ------- -------
Net investment income.................................. 0.0223 0.0199 0.0226 0.0097
Net gains on securities
(both realized and unrealized)........................ - - 0.0054 -
------- ------- ------- -------
Total from investment operations..................... 0.0223 0.0199 0.0280 0.0097
------- ------- ------- -------
LESS DISTRIBUTIONS
Dividends (from net investment income)................. (0.0223) (0.0199) (0.0226) (0.0097)
Distributions (from capital gains)..................... - - (0.0054) -
------- ------- ------- -------
Total distributions.................................. (0.0223) (0.0199) (0.0280) (0.0097)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD .......................... $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= =======
TOTAL RETURN ............................................ 2.26% 2.01% 2.83% 1.45%(3)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period ($1,000's)................... $12 $2 $1 $1
Ratio of expenses to average net assets(1) ............ 1.50% 1.53% 1.73% 1.66%(3)
Ratio of net income to average net assets.............. 2.32% 1.99% 2.12% 1.38%(3)
</TABLE>
(1) Ratio of expenses to average net assets includes expenses paid indirectly
beginning in fiscal 1995. Portions of the expenses were voluntarily waived and
reimbursed by the Adviser, Transfer Agent and Distributor. The ratios before
such waivers and expense reimbursements for Class A shares were .71% for 1997,
.72% for 1996, .81% for 1995, .76% for 1994, and .77% for 1993; for Class B
shares, the ratios were 2.27% for 1997, 4.22% for 1996, 3.66% for 1995 and
3.61% for 1994.
(2) From the commencement of offering Class B Shares.
(3) Annualized.
<PAGE>
NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997
NOTE 1 - ACCOUNTING POLICIES
Composite Cash Management Company (the "Company"), is registered under the
Investment Company Act of 1940, as amended, as an open-end diversified
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. The two classes of shares
differ in their respective sales charges, shareholder servicing fees, and
distribution and service 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 ensure that
carrying value approximates market valuation.
b. The Company requires the custodian to take possession, to have legally
segregated in the Federal Reserve Book Entry System or to have segregated
within the custodian's vault, all securities held as collateral for
repurchase agreements. The market value of the underlying securities is
required to be at least 102% of the resale price at the time of purchase. If
the seller of the agreement defaults and the value of the collateral
declines, or if the seller enters an insolvency proceeding, realization of
the value of the collateral by the Company may be delayed or limited.
c. Income and expenses (other than expenses attributable to a specific class)
are allocated daily to each class based on the value of settled shares
outstanding. Gains and losses are allocated daily to each class based on
value of shares outstanding. Dividends are declared separately for each
class. Neither class has preferential dividend rights; differences in per
share dividend rates are generally due to differences in separate class
expenses, including distribution and service fees.
d. Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and discounts, and is computed daily.
e. 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.
f. 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.
g. 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. Income dividends are determined in accordance with income tax
regulations which may differ from generally accepted accounting principles.
h. Custodial fees have been increased by $88,033 and $7,751, for the Money
Market and Tax-Exempt Portfolios, respectively, as a result of "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 regulations, such amounts are added to net custodial fees and then
reflected as a deduction, "fees paid indirectly" to derive net expenses.
There were no "expense offset arrangements" other than custodial fees.
i. The preparation of financial statements in conformity with generally accepted
accounting principles 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 reporting period.
Actual results could differ from those estimates.
NOTE 2 - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES
The amounts of fees and expenses described below are shown on each Fund's
statement of operations. Composite Research & Management Co. (the "Adviser")
manages each Fund and Murphey Favre Securities Services, Inc. (the "Transfer
Agent"), is the transfer and shareholder servicing agent. On July 14, 1997,
Composite Funds Distributor, Inc. (the "Distributor"), began operations as the
principal underwriter. Prior to July 14, 1997, Murphey Favre, Inc., was the
principal underwriter. All are affiliates of Washington Mutual Bank and Washing-
ton Mutual fsb and subsidiaries of Washington Mutual, Inc.
Management fees were paid by the Company to the Adviser. Management fees are
equal to an annual rate of .45% of each portfolio's average daily net assets of
the first billion and .40% of average daily net assets in excess of one billion.
Under terms of the management agreement, the Adviser will reimburse the Company
should portfolio 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, 1997.
<PAGE>
NOTE 2 - TRANSACTIONS WITH AFFILIATES AND RELATED PARTIES (continued)
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.
Shareholder servicing fees were paid to the Transfer Agent for services
incidental to issuance and transfer of shares, maintaining shareholder lists,
and issuing and mailing distributions and reports. The authorized monthly
shareholder servicing fees are $1.85 and $1.95 ($1.50 and $1.60 prior to April
1, 1997) per Class A and Class B shareholder accounts, respectively. The
Transfer Agent voluntarily waived the shareholder servicing fee on Class B
shareholder accounts through October 31, 1997. Additionally, for all shareholder
accounts with balances below $1,000, the Transfer Agent has voluntarily waived
shareholder servicing fees. For the year ended December 31, 1997, the total
shareholder servicing fees waived were $141,274 and $1,293 for the Money Market
and Tax-Exempt Portfolios, respectively.
Distribution expenses were paid to the Distributor in accordance with
separate Distribution Plans for Class A and Class B shares. 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 the Distributor 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 the Distributor 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.
For the year ended December 31, 1997, the Distributor and its predecessor,
Murphey Favre, Inc., received contingent deferred sales charges of $5,618 from
the Money Market Portfolio upon redemption of Class B shares as reimbursement
for sales commissions advanced by the Distributor at the time of such sales.
For non-IRA shareholder accounts with balances below $1,000 and IRA
shareholder accounts with balances below $500, the Distributor voluntarily reim-
bursed the Company for printing and postage costs through October 31, 1997. For
the year ended December 31, 1997, the Money Market and Tax-Exempt Portfolios
were reimbursed a total of $57,158 and $584, respectively.
The Adviser, Transfer Agent, and Distributor have jointly agreed to equally
reimburse the Tax-Exempt Portfolio for a portion of expenses incurred. For the
year ended December 31, 1997, the Tax-Exempt Portfolio was reimbursed a total of
$43,430.
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 ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
--------------------------- ---------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
SHARES
Sold.................................................... 631,834,628 600,191,639 916,714 429,250
Issued for reinvestment of dividends and capital gains.. 12,427,917 9,585,807 9,036 4,519
------------ ------------ ------------ ------------
644,262,545 609,777,446 925,750 433,769
Reacquired.............................................. (612,740,366) (551,647,506) (572,076) (391,277)
------------ ------------ ------------ ------------
Net increase............................................ 31,522,179 58,129,940 353,674 42,492
============ ============ ============ ============
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3 - CAPITAL STOCK (continued)
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>
<CAPTION>
CLASS A CLASS B
--------------------------- ---------------------------
YEAR ENDED DECEMBER 31, YEAR ENDED DECEMBER 31,
--------------------------- ---------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
SHARES
Sold.................................................... 55,194,481 54,027,014 12,980 2,901
Issued for reinvestment of dividends and capital gains.. 1,003,218 939,901 188 8
------------ ------------ ------------ ------------
56,197,699 54,966,915 13,168 2,909
Reacquired.............................................. (56,037,166) (53,980,784) (3,573) (1,737)
------------ ------------ ------------ ------------
Net increase ........................................... 160,533 986,131 9,595 1,172
============ ============ ============ ============
</TABLE>
NOTE 4 - SHAREHOLDER MEETING RESULTS
A special meeting of each Portfolios' shareholders was held on December 23,
1997. 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 shareholders of each Portfolio were asked to approve the reorganization
of the Fund as a Massachusetts Business Trust. Sufficient votes were not
received at the time of the meeting so a shareholder meeting has been
rescheduled for February 20, 1998:
SHARES SHARES
VOTED VOTED
"FOR" "AGAINST" ABSTAINED
----------- --------- ---------
Money Market Portfolio.................. 132,367,550 7,622,655 9,582,375
Tax-Exempt Portfolio................... 16,640,238 784,662 2,101,368
2. The shareholders of each Portfolio elected the following thirteen directors:
<TABLE>
<CAPTION>
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>
David E. Anderson............................. 182,968,051 7,178,551 19,092,490 1,363,988
Wayne L. Attwood, MD.......................... 183,118,090 7,028,512 19,138,327 1,318,151
Arthur H. Bernstein........................... 182,968,051 7,178,551 19,092,490 1,363,988
Kristianne Blake.............................. 183,174,242 6,972,360 19,138,327 1,318,151
Edmond R. Davis............................... 182,955,594 7,191,008 19,092,490 1,363,988
John W. English............................... 183,015,833 7,130,769 19,092,490 1,363,988
Anne V. Farrell............................... 183,176,290 6,970,311 19,138,327 1,318,151
Michael K. Murphy............................. 183,164,572 6,982,030 19,138,327 1,318,151
Alfred E. Osborne, Jr. ....................... 183,075,301 7,071,301 19,092,490 1,363,988
William G. Papesh............................. 183,170,823 6,975,779 19,138,327 1,318,151
Daniel Pavelich............................... 183,171,851 6,974,751 19,138,327 1,318,151
Jay Rockey.................................... 183,110,003 7,036,599 19,138,327 1,318,151
Richard C. Yancey............................. 183,118,333 7,028,269 19,138,327 1,318,151
</TABLE>
<PAGE>
NOTE 4 - SHAREHOLDER MEETING RESULTS (continued)
3. The shareholders of each Portfolio approved an amended Investment Manager
Agreement:
SHARES SHARES
VOTED VOTED
"FOR" "AGAINST" ABSTAINED
----------- --------- ----------
Money Market Portfolio............... 170,737,853 7,978,046 11,430,703
Tax-Exempt Portfolio................. 17,190,660 1,047,043 2,218,775
4. The shareholders of each Portfolio were asked to approve an amended
Distribution Plan of the Fund for its Class A shares. Sufficient votes were
not received at the time of the meeting and a shareholder meeting has been
rescheduled for February 20, 1998:
SHARES SHARES
VOTED VOTED
"FOR" "AGAINST" ABSTAINED
----------- --------- ----------
Money Market - Class A............... 169,147,297 8,581,224 12,289,983
Money Market - Class B............... 122,765 - 5,333
Tax-Exempt - Class A................. 17,057,981 947,856 2,439,114
Tax-Exempt - Class B................. 1,030 - 104,964
5. The shareholders of each Portfolio approved certain amendments to its
existing fundamental investment restrictions allowing each Fund to invest in
the following types of securities:
SHARES SHARES
VOTED VOTED
"FOR" "AGAINST" ABSTAINED
MONEY MARKET PORTFOLIO ----------- --------- ----------
Rule 144A Securities................... 128,333,929 8,834,235 12,404,418
Asset-Backed Securities and
Non-Financial Institution Securities. 127,879,566 9,406,531 12,278,480
SHARES SHARES
VOTED VOTED
TAX-EXEMPT PORTFOLIO "FOR" "AGAINST" ABSTAINED
----------- --------- ----------
Rule 144A Securities................... 16,161,187 991,123 2,304,568
NOTE 5 - SUBSEQUENT EVENTS
On September 23, 1997, the Funds' Board of Directors authorized the
reorganization of each of the Funds into a series of a Massachusetts business
trust. The reorganization will not result in the dilution of the interests of
the Funds' share-holders and the shareholders will not bear any portion of the
expense incurred relating to the reorganization. The effective date of the
reorganization is expected to be March 1998.
Also on September 23, 1997, the Board of Directors of Composite Cash
Management Company Money Market Portfolio and Composite Cash Management Company
Tax-Exempt Portfolio approved the acquisition of the net assets of the Sierra
Global Money Fund and the Sierra U.S. Government Money Fund, respectively, each
a series of The Sierra Trust Funds. On October 28, 1997, the Trustees of The
Sierra Funds approved the acquisitions which were contingent upon a vote of
shareholders. Subsequent to December 31, 1997, Sierra Funds shareholders
approved the acquisitions. The transactions are expected to occur in March 1998.
The transactions will not result in the dilution of the interests of either
Composite or Sierra shareholders and they will not bear any portion of the
expense relating to these transactions.
<PAGE>
========================================
----------------------------------------
For further information, please contact:
FUND OFFICES
Composite Group of Funds
601 W. Main Avenue, Suite 300
Spokane, WA 99201-0613
Phone: (509) 353-3550
Toll free: (800) 543-8072
----------------------------------------
========================================
ADVISER
Composite Research & Management Co.
1201 Third Avenue, Suite 1400 Seattle, WA 98101-3015
DISTRIBUTOR
Composite Funds Distributor, Inc.
601 W. Main Avenue, Suite 300 Spokane, WA 99201-0613
CUSTODIAN
Investors Fiduciary Trust Company
801 Pennsylvania Avenue Kansas City, MO 64105
INDEPENDENT PUBLIC ACCOUNTANTS
LeMaster & Daniels PLLC
601 W. Riverside Avenue, Suite 700 Spokane, WA 99201-0614
COUNSEL
Paine, Hamblen, Coffin, Brooke & Miller LLP
717 W. Sprague Avenue, Suite 1200 Spokane, WA 99204-0464
OFFICERS BOARD OF DIRECTORS
President Members
William G. Papesh David E. Anderson
Senior Vice President Wayne L. Attwood, M.D.
Monte D. Calvin Arthur H. Bernstein
Senior Vice President Kristianne Blake
Sandra A. Cavanaugh Edmond R. Davis
Vice President & Secretary John W. English
John T. West Anne V. Farrell
Vice President & Treasurer Michael K. Murphy
Jeffrey L. Lunzer Alfred E. Osborne
Vice President William G. Papesh
Gene G. Branson Daniel L. Pavelich
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.
[RECYCLE LOGO]
CCMAR (2/98) 66K
COMPOSITE
CASH
MANAGEMENT
COMPANY
ANNUAL
REPORT
DECEMBER 31,
1997
[COMPOSITE GROUP OF FUNDS LOGO]
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S SEMIANNUAL REPORT AND FORM N-SAR WHICH ARE ON FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH DOCUMENTS.
</LEGEND>
<CIK> 0000312346
<NAME> Composite Cash Management Company
<SERIES>
<NUMBER> 011
<NAME> Money Market Portfolio Class A
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 261,394,706
<INVESTMENTS-AT-VALUE> 261,394,706
<RECEIVABLES> 2,775,043
<ASSETS-OTHER> 321,833
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 264,491,582
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,143,472
<TOTAL-LIABILITIES> 3,143,472
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 261,348,110
<SHARES-COMMON-STOCK> 260,877,498
<SHARES-COMMON-PRIOR> 229,355,308
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 261,348,110
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,420,370
<OTHER-INCOME> 0
<EXPENSES-NET> (1,835,426)
<NET-INVESTMENT-INCOME> 12,584,944
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 12,584,944
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (12,575,604)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 631,834,628
<NUMBER-OF-SHARES-REDEEMED> (612,740,366)
<SHARES-REINVESTED> 12,427,917
<NET-CHANGE-IN-ASSETS> 31,875,853
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-EXPENSE> 2,033,858
<AVERAGE-NET-ASSETS> 255,305,463
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
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<PER-SHARE-DIVIDEND> (0.05)
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<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.75
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S SEMIANNUAL REPORT AND FORM N-SAR WHICH ARE ON FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH DOCUMENTS.
</LEGEND>
<CIK> 0000312346
<NAME> Composite Cash Management Company
<SERIES>
<NUMBER> 012
<NAME> Money Market Portfolio Class B
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 261,394,706
<INVESTMENTS-AT-VALUE> 261,394,706
<RECEIVABLES> 2,775,043
<ASSETS-OTHER> 321,833
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 264,491,582
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 3,143,472
<TOTAL-LIABILITIES> 3,143,472
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 261,348,110
<SHARES-COMMON-STOCK> 470,612
<SHARES-COMMON-PRIOR> 116,949
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 261,348,110
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 14,420,370
<OTHER-INCOME> 0
<EXPENSES-NET> (1,835,426)
<NET-INVESTMENT-INCOME> 12,584,944
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 12,584,944
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (9,706,992)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 916,714
<NUMBER-OF-SHARES-REDEEMED> (572,076)
<SHARES-REINVESTED> 9,036
<NET-CHANGE-IN-ASSETS> 31,875,853
<ACCUMULATED-NII-PRIOR> 0
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<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,033,858
<AVERAGE-NET-ASSETS> 255,305,463
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.04
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> (0.04)
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<PER-SHARE-NAV-END> 1.00
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S SEMIANNUAL REPORT AND FORM N-SAR WHICH ARE ON FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH DOCUMENTS.
</LEGEND>
<CIK> 0000312346
<NAME> Composite Cash Management Company
<SERIES>
<NUMBER> 021
<NAME> Tax-Exempt Portfolio Class A
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 32,767,685
<INVESTMENTS-AT-VALUE> 32,767,685
<RECEIVABLES> 352,741
<ASSETS-OTHER> 113,543
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 33,233,969
<PAYABLE-FOR-SECURITIES> 961,483
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 126,216
<TOTAL-LIABILITIES> 1,087,699
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,146,270
<SHARES-COMMON-STOCK> 32,134,470
<SHARES-COMMON-PRIOR> 31,973,937
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 32,146,270
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,186,528
<OTHER-INCOME> 0
<EXPENSES-NET> (177,125)
<NET-INVESTMENT-INCOME> 1,009,403
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,009,403
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,009,190)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 55,194,481
<NUMBER-OF-SHARES-REDEEMED> (56,037,166)
<SHARES-REINVESTED> 1,003,218
<NET-CHANGE-IN-ASSETS> 170,128
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 143,965
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 222,432
<AVERAGE-NET-ASSETS> 32,189,455
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.03
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (0.03)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S SEMIANNUAL REPORT AND FORM N-SAR WHICH ARE ON FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH DOCUMENTS.
</LEGEND>
<CIK> 0000312346
<NAME> Composite Cash Management Company
<SERIES>
<NUMBER> 022
<NAME> Tax-Exempt Portfolio Class B
<S> <C>
<PERIOD-TYPE> 12-mos
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 32,767,685
<INVESTMENTS-AT-VALUE> 32,767,685
<RECEIVABLES> 352,741
<ASSETS-OTHER> 113,543
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 33,233,969
<PAYABLE-FOR-SECURITIES> 961,483
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 126,216
<TOTAL-LIABILITIES> 1,087,699
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 32,146,270
<SHARES-COMMON-STOCK> 11,800
<SHARES-COMMON-PRIOR> 2,205
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 32,146,270
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,186,528
<OTHER-INCOME> 0
<EXPENSES-NET> (177,125)
<NET-INVESTMENT-INCOME> 1,009,403
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,009,403
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (946,927)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 12,980
<NUMBER-OF-SHARES-REDEEMED> (3,573)
<SHARES-REINVESTED> 188
<NET-CHANGE-IN-ASSETS> 170,128
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 143,965
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 222,432
<AVERAGE-NET-ASSETS> 32,189,455
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.02
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<PER-SHARE-DIVIDEND> (0.02)
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<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
