C/FUNDS GROUP, INC.
C/Fund
C/Growth Stock Fund
Adams Equity Fund
Beebe Fund
C/Government Fund
C/Tax-Free Fund
C/C.A.R. Fund
1997 Annual Report
Table of Contents
Letter to Shareholders 1
Comparative Performance 2
Portfolios of Investments 4
Audited Financial Statements 12
Notes to Financial Statements 16
Report of Independent Certified
Accountants 18
THIS PAGE LEFT BLANK INTENTIONALLY
LETTER TO SHAREHOLDERS
1997 was another stellar year for most investors, particularly those
who emphasized common stocks or equity equivalent securities. While
fixed income investments (bonds) also produced total returns that were
higher percentage-wise than just the interest rate alone, once again such
returns were less than half that reported for stocks generally. Rather
than emphasize this difference in a negative way it would be far better for
investors to stand back a little in order to view this in a broader
perspective. For the past 50 years or more in the United States the
"total returns" (interest or dividends plus price change) from stocks has
always averaged about twice the return on bonds, the exceptions being
during periods when inflation and therefore interest rates were rising
rapidly. The long period from the late 1960's until the early 1980's was
a terrible period during which to have owned common stocks, for example,
because of rising inflation.
Therefore, mindful of this relationship between "declining purchasing
power" (inflation), and returns on investments, we as managers of the now
seven series of portfolios that make up the C/Funds Group, Inc., funds
family, act favorably and aggressively by emphasizing a high percentage of
common stocks most of the time in our equity funds, and tend to remain
more short term minded in our fixed income funds during this period of
low inflation.
A word of caution might be in order here in respect to investing in
fixed-income funds in general. First, such bond fund investments still make
good sense for those needing to emphasize safety against the volatility
in the value of their investment. They are also excellent for those needing
a certainty of annual income at a higher rate than that now being
produced by stocks and stock funds. However, with that said, the caution
we would extend to all investors in bond funds is that during periods of
low inflation and low interest rates-such as the period we are now in-is
that bonds produce very poor returns during years when even a modest
increase in interest rates occurs. Although we do not see that happening
any time in the foreseeable future, we nonetheless have chosen to
"protect" our funds' NAVs (net asset values per share) by keeping
bond portfolio holdings in a fairly short term maturity range. Why is
this? Because we would rather our bond fund investors-whether taxable or
non-taxable-allow their annual interest income to move up and down with
market rates generally than to have the fund income be held high while the
share values fluctuate. For those who are confused by this explanation, we
will only add that in all bond investments, one or the other of these two
alternative risks must, repeat must, be taken by your manager. We
happen to choose stability of price with some change in annual income
over high annual income and price instability. We hope this explanation is
helpful to all bond fund investors.
We also take this opportunity to welcome our newest Fund series
member, the Beebe Fund, to our family. It got under way late in 1997, but
has already attracted over $750,000 in investor dollars to date. This
is a tribute to the reputation and proven skills of its manager, Sam Beebe,
who is perhaps Florida's pre-eminent "analyst" of financial
institutions. This Fund is a "sector" fund in that it invests primarily
in a single industry, which just so happens to be one of the most exciting
areas in the investment world today, the result of enormous changes
underway in that industry. Please feel free to contact Sam or the C/Funds
Group, Inc., for information about this new Fund.
The 1997 performances of all the Fund Series are included in this
Annual Report, which we hope you will read carefully. We would
be remiss, however, if we did not point out another factor that is always
worth repeating, it being that performance alone does not tell the whole
story when selecting a Fund for purchase. "Risk" is a very big word in
the investment business but a very hard one to reduce to numbers.
Suffice to say, CFI managers know this so seek to minimize risk,
always. If we could be judged fairly on this point, we believe CFI Funds
would be found to be very high up on the safety scale by investing in
less risky kinds of securities at every opportunity. Our managers tend to
be long term and quality minded and make every effort to manage all
portfolios with risk in mind. We wanted you, our shareholders, to know
that.
Finally, we again praise and thank our over-worked funds
administrator, Lyn Braswell, who does an outstanding job of keeping us
all on our toes and keeping all records and our shareholders fully
informed on a timely basis. Lyn, along with the other staff, are truly in
our and your debt for the fine and complicated job they do. And, our
thanks as always, to our loyal shareholders, valued directors and
officers for their continued contributions to CFI's on-going success.
Respectfully Submitted:
R. G. "Kelly" Caldwell, Jr.
President
February 25, 1998
C/Fund
Illustration of a $10,000 Investment
(graphic)
C/Growth Stock Fund
Illustration of a $10,000 Investment
(graphic)
Adams Equity Fund
Illustration of a $10,000 Investment
(graphic)
C/Government Fund
Illustration of a $10,000 Investment
(graphic)
C/Tax-Free Fund
Illustration of a $10,000 Investment
(graphic)
C/Community Association Reserve Fund
Illustration of a $10,000 Investment
(graphic)
Performance Summary
As of December 31, 1997
Since
1 Year 5 Year 10 Year Inception
C/Fund 20.95% 14.22% 13.01% 13.04%
C/Growth Stock Fund 25.48% 11.66% na 11.02%
Adams Equity Fund 17.60% na na 18.80%
Beebe Fund na na na (1) 2.00%
C/Government Fund 7.35% 6.32% na 6.08%
C/Tax-Free Fund 5.16% 4.24% na 4.18%
C/C.A.R. Fund 6.08% 5.95% na 5.75%
(1) Actual total return for period 12/02/97 through 12/31/97.
Since a graphic illustration for that period of time
presents an insignificant amount of data, no illustration
is included here.
C/FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
Shares Value
EQUITIES 74.3%
Automotive (2.2%)
Ford Motor Company 2,000 $6,500
General Motors 875 52,882
Sector Total 149,382
Building Supplies (1.3%)
Home Depot 1,500 87,938
Chemicals (13.6%)
American Home Products 2,000 152,875
Bristol Myers Squibb 2,000 187,250
Colgate Palmolive 2,000 147,000
Dow Chemical 1,000 101,500
DuPont 1,500 90,187
Merck 1,000 105,250
Proctor & Gamble 1,500 119,719
Union Carbide Corp. 875 37,680
Sector Total 941,461
Communications (0.9%)
AT&T 1,000 61,375
Computer/Office Equipment (4.7%)
IBM 3,100 324,338
Diversified Manufacturing (2.4%)
Minnesota Mining & 2,000 163,750
Manufacturing
Eating & Drinking Places (0.8%)
McDonald's 875 41,344
Tricon Global 400 11,575
Restaurants
Sector Total 52,919
Electronics (4.7%)
General Electric 1,500 109,781
Hewlett Packard 875 54,359
Lucent Technologies 2,000 159,875
Sector Total 324,015
Financial (2.5%)
American Express 875 77,984
J. P. Morgan 875 98,766
Sector Total 176,750
Food (9.8%)
Archer-Daniels-Midland 7,852 170,290
Coca Cola Co. 1,225 81,462
Lancaster Colony Corp. 1,000 56,500
PepsiCo 4,000 145,750
Philip Morris 5,000 226,875
Sector Total 680,877
Food Stores (2.0%)
Albertsons 3,000 142,125
Health Care (0.8%)
Johnson & Johnson 875 $7,641
C/FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1997
Shares Value
Industrial Machinery (2.7%)
Black & Decker 3,000 $117,000
Caterpillar, Inc. 1,500 72,750
Sector Total 189,750
Instruments (3.4%)
Eastman Kodak 2,000 120,500
Emerson Electric 2,000 112,875
Sector Total 233,375
Insurance (1.0%)
Travelers 1,312 69,782
Leisure/Entertainment (1.2%)
Walt Disney Co. 875 86,680
Metal (0.9%)
ALCOA 875 61,688
Paper (2.0%)
International Paper Co. 875 37,789
Kimberly-Clark 2,000 98,625
Sector Total 136,414
Petroleum & Coal (5.7%)
Amoco 1,000 85,250
Chevron Corp. 875 67,320
Exxon Corp. 4,000 245,000
Sector Total 397,570
Railroad (2.6%)
CSX Corp. 1,000 54,000
Union Pacific 2,000 125,125
Sector Total 179,125
Retail (3.5%)
Sears Roebuck 2,000 90,375
Wal-Mart 4,000 157,250
Sector Total 247,625
Rubber & Plastics (0.8%)
Goodyear Tire & Rubber 875 55,891
Transportation Equipment (2.8%)
Allied Signal 1,500 58,406
Boeing Co. 1,500 73,500
United Technologies 825 60,019
Sector Total 191,925
Transportation Services (2.0%)
GATX Corp. 2,000 145,000
TOTAL EQUITIES (74.3%) 5,157,396
GOVERNMENTS (17.7%)
Treasury 8% 5/15/01 1,150,000 1,228,703
CASH & EQUIVALENTS (8.0%) 555,583
TOTAL INVESTMENTS (100%) $6,941,682
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
Shares Value
EQUITIES (90.9%)
Apparel Stores (2.8%)
Burlington Coat Factory 4,000 $65,250
Automotive (8.0%)
Autozone, Inc. 1,000 28,937
PACCAR, Inc. 1,600 84,000
Teleflex Corp. 2,000 75,500
Sector Total 188,437
Building Supplies (7.4%)
Home Depot 3,000 175,875
Computer/Office Equipment (10.8%)
Ascend Communications 1,500 36,937
Cisco Systems 750 41,953
Compaq Computer 1,250 70,703
International Business 1,000 104,625
Machines
Sector Total 254,218
Construction (1.9%)
Mastec Inc. 2,000 46,000
Eating & Drinking Places (4.7%)
Brinker Intl. Corp. 3,000 48,375
Cracker Barrel 1,000 33,875
Outback Steakhouse 1,000 28,875
Sector Total 111,125
Electronics (8.9%)
American Power Conversion 3,000 70,875
Applied Magnetics Corp. 2,000 22,375
Magnetek, Inc. 6,000 117,375
Sector Total 210,625
Financial (15.9%)
Amsouth Bankcorp 1,000 54,375
Bank United Fin Corp C1-A 8,000 123,250
Capital Bancorp 1,200 69,375
Commercial Bankshares 3,000 72,750
Countrywide Credit 1,300 55,575
Sector Total 375,325
Food Stores (1.8%)
Food Lion 5,000 42,188
Furniture (3.2%)
Hillenbrand Industries 1,500 76,875
Industrial Machinery & Equipment (2.5%)
Nortek, Inc. 2,200 $58,438
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1997
Shares Value
Instruments (8.8%)
Bard (C.R.) 1,000 $31,187
Coherent Inc. 1,600 56,200
Respironics 2,000 45,375
Stryker Corp. 2,000 75,500
Sector Total 208,262
Leisure/Entertainment (2.3%)
Carnival Corp Class 'A' 1,000 55,500
Metal (1.4%)
Metal Management, Inc. 2,000 33,250
Oil & Gas Estraction (2.4%)
Santa Fe Energy Resources 5,000 56,563
Software (5.4%)
Computer Associates 1,500 79,406
Parametric Technology 1,000 47,250
Sector Total 126,656
Stone, Clay, & Glass Products (2.7%)
Southdown Inc. 1,100 64,900
TOTAL EQUITIES (90.9%) 2,149,487
CASH & EQUIVALENTS (9.1%) 215,228
TOTAL INVESTMENTS (100%) $2,364,715
ADAMS EQUITY FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
Shares Value
EQUITIES (96.9%)
Automotive (9.1%)
Chrysler 1,000 $35,187
Kellstrom Industries 3,400 84,150
Sector Total 119,337
Business Services (7.1%)
4 Front Technologies 6,000 46,500
Investors Financial Svc. 1,000 46,000
Sector Total 92,500
Communications (2.3%)
Xpedite Systems 1,000 30,500
Computers & Technology (2.2%)
Trans-Lux 2,000 29,500
Diversified Manufacturing (8.0%)
Lone Star Industries Inc. 1,000 53,125
Owens Corning 1,500 51,281
Sector Total 104,406
Electric, Gas, Sanitary Services (3.5%)
Tucson Electric Power 2,500 45,314
Electronics (2.9%)
Continental Circuits 2,000 27,875
Porta Systems Inc. 3,000 10,125
Sector Total 38,000
Environmental (1.7%)
Cuno Inc. 1,400 22,400
Financial (5.0%)
Green Tree Financial 2,500 65,625
Industrial Machinery (21.1%)
Applied Power 1,000 69,375
DT Industries 1,000 34,000
Gehl Company 4,000 84,000
In Focus Systems 1,000 30,375
Nortek Inc. 2,200 58,437
Sector Total 276,187
Instruments (3.7%)
ADE Corp. 2,800 49,000
Metal (10.2%)
Aluminum Co. of America 500 35,250
Amcast 1,500 34,406
RMI Titanium Co. New 1,000 21,000
USK Corp 6.5% Cum Conv 500 23,000
Pfd
Wyman Gordon 1,000 19,750
Sector Total $133,406
ADAMS EQUITY FUND
PORTFOLIO OF INVESTEMENTS (CONTINUED)
December 31, 1997
Shares Value
Paper (8.0%)
Drypers Corp. 9,000 $51,750
Shorwood Packaging Co. 2,000 53,500
Sector Total 105,250
Rubber & Plastics (3.9%)
Wynn's International Inc. 1,600 50,900
Transportation Equipment (6.7%)
Boeing Co. 1,400 68,600
R&B Inc. 2,000 19,250
Sector Total 87,850
Wholesale Trade - Durable Goods (1.5%)
TBC Corp. 2,000 19,250
TOTAL EQUITIES (96.9%) 1,269,425
CASH & EQUIVALENTS (3.1%) 40,134
TOTAL INVESTMENTS (100%) $1,309,559
BEEBE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
Shares Value
EQUITIES (77.7)
Depepository Institutions (72.2%)
Amsouth Bancorp 240 $13,050
Bank United Financial 900 13,866
Corp
BankAtlantic Bankcorp A 1,000 16,312
Capital City Bank & Trust 385 15,592
Commercial Bankshares 630 15,277
Compass Bankshares 340 15,109
Cornerstone Bank 300 5,813
First Palm Beach Bancorp 500 21,562
Harbor Florida Bancorp 230 15,237
Laurel Capital 470 15,275
Pennwood Bancorp 800 15,800
Regions Financial Corp. 370 15,586
Republic Bancshares, Inc. 590 15,414
Republic Security 1,500 14,719
Financial Corp.
Seacoast Banking FL A 340 13,090
Southtrust Corp. 250 15,766
Summit Bancshares Inc. 700 14,700
WVS Financial Corporation 480 16,920
Sector Total 269,088
Holding & Investment Offices (5.5%)
Mac Cali Realty 500 20,469
TOTAL EQUITIES (77.7%) 289,557
CASH & EQUIVALENTS (22.3%) 83,259
TOTAL INVESTMENTS (100%) $372,816
C/TAX-FREE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
Par Value
Value
MUNICIPAL BONDS (99.1%)
1ST Florida Gov 6.2% due 7/1/03 100,000 $109,256
Fin Com
Alachua Cty FL 5.4% due 12/1/09 100,000 107,042
Shands
Broward Cty FL 5.5% due 1/1/05 100,000 107,377
S.O.
Broward Cty School 5.7% due 2/15/08 100,000 107,406
Dist G.O.
Duval Cty FL 6.125% due 8/04-02 100,000 108,858
School Dist
Escambia Cty FL 5.75% due 4/01/2004 100,000 102,488
FL Board of 6.7% due 7/1/2006 20,000 22,055
Regents
FL G.O. 5.90% due 10/1/2004 100,000 101,506
FL St Muni Pwr 6.5% PR 10/1/2002 100,000 111,657
Agency @102
FT Lauderdale FL 6.1% due 9/1/2000 50,000 52,617
W & S
Greater Orlando 5.6% due 10/01/2002 50,000 53,139
Aviation AU
Hillsborough Cty 6% due 7/1/98 100,000 101,130
Cap
Hillsborough, FL 7.20% due 8/15/05 25,000 27,417
SD
Indian River Cty 5.75% 10/07 @102 165,000 182,084
FL Hospital
Jacksonville FL 7.625% due 11/1/03 25,000 29,385
Port Auth
Jacksonville, FL 11.5% due 10/1/12 65,000 110,182
Health
Key West FL Util 6.75% due 10/1/13 100,000 109,665
Rev
Kissimmee FL W & S 5.6% due 10/1/04 100,000 107,273
Manatee Cty FL Pub 6.00% due 10/1/06 100,000 112,013
Util
Marion Cty Hosp 6.60% due 10/1/98 25,000 25,524
Dist
Okaloosa Cty FL 7.6% PR 7/1/99 @102 75,000 79,298
Orange Cty FL 6.00% due 10/1/01 100,000 106,790
Tourist Tax
Orange Cty FL 6.00% due 4/1/06-04 100,000 108,123
Waste Water
Orlando & Orange 5.375% due 7/1/06 100,000 106,370
Cty FL
Orlando FL Util 8.00% due 4/1/02 100,000 115,027
Com
Palm Beach Cty 5.875% 8/1/04-02 100,000 107,605
School Dist
Palm Beach Cty, FL 6.7% due 6/1/98 25,000 25,311
Pasco County FL 5.8% due 10/1/07 100,000 107,519
W & S
Pasco Waste PR 6.95% due 4/1/98 95,000 98,126
@102.5
Pinellas Cty, FL 5.2% due 10/1/04 100,000 105,369
Sewer
Puerto Rico 5.4% due 7/1/2007 100,000 107,738
Comwlth
Sarasota Cty FL 6.15 due 11/1/05 100,000 112,282
Special
St Petersburg Pub 6.55% due 10/1/02 150,000 159,359
Util
Volusia Cty, FL 5.7% due 7/1/01 100,000 105,539
G.O.
TOTAL MUNICIPAL BONDS (99.1%) 3,232,530
CASH & EQUIVALENTS (0.9%) 28,700
TOTAL INVESTMENTS (100%) $3,261,230
C/GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
Par Value
Value
GOVERNMENTS (82.0%)
U.S. Treasury Notes 11.75% 500,000 $586,719
due 2/15/2001
U.S. Treasury Notes 5.875% 500,000 502,031
2/15/2000
U.S. Treasury Notes 5.875% 500,000 504,375
2/15/2004
U.S. Treasury Notes 6.25% 500,000 511,250
2/15/2003
U.S. Treasury Notes 6.5% 500,000 521,250
5/15/2005
U.S. Treasury Notes 6.75% 500,000 507,813
6/1999
U.S. Treasury Notes 7.625% 500,000 530,312
2/15/2007
TOTAL GOVERNMENTS (82.0%) 3,663,750
CASH & EQUIVALENTS (18.0%) 804,010
TOTAL INVESTMENTS (100%) $4,467,760
C/COMMUNITY ASSOCIATION RESERVE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1997
Par Value
Value
GOVERNMENTS (95.8%)
U.S. Treasury Notes 5.875% 150,000 $150,422
due 3/31/99
U.S. Treasury Notes 5.875% 150,000 150,187
due 8/15/98
U.S. Treasury Notes 6.00% 150,000 150,844
due 10/15/99
U.S. Treasury Notes 7.00% 150,000 152,438
due 4/99
U.S. Treasury Notes 6.875% 200,000 204,937
due 3/31/00
TOTAL GOVERNMENTS (95.8%) 808,828
CASH & EQUIVALENTS (4.2%) 35,319
TOTAL INVESTMENTS (100%) $844,147
C/FUNDS GROUP, INC.
STATEMENTS OF ASSETS & LIABILITIES
December 31, 1997
C/Comm-
unity
Assoc-
C/Growth C/Gov- C/Tax iation Adams
Stock ernment Free Reserve Equity Beebe
C/Fund Fund Fund Fund Fund Fund Fund
Securities at Cost
$4,804,183 $1,747,133 $4,414,020 $3,208,193 $840,098 $1,118,596 $367,263
ASSETS
Securities Value
$6,941,682 $2,364,715 $4,467,760 $3,261,230 $844,147 $1,309,559 $372,816
Receivables
Dividends & Interest
20,667 1,703 76,515 58,642 13,419 586 517
Investment Securities Sold
288,045 204,467 0 0 0 0 0
7,250,394 2,570,885 4,544,275 3,319,872 857,566 1,310,145 373,333
LIABILITES
Advisor Fee & Other Payables
4,136 1,467 1,570 1,327 3,732 718 127
Investment Securities Purchased
108,860 28,068 0 0 0 32,785 52,219
112,996 29,535 1,570 1,327 3,732 33,503 52,346
NET ASSETS APPLICABLE TO OUTSTANDING SHARES
$7,137,398 $2,541,350 $4,542,705 $3,318,545 $853,834 $1,276,642 $320,987
CAPITAL SHARES
346,376 186,130 453,930 336,885 85,402 91,852 31,538
NET ASSET VALUE PER SHARE
$20.61 $13.65 $10.01 $9.85 $10.00 $13.90 $10.18
C/FUNDS GROUP, INC.
STATEMENTS OF OPERATIONS
Period
Ending
Year Ending 12/31/97 12/31/97
C/Comm-
unity
Assoc-
C/Growth C/Gov- C/Tax iation Adams
Stock ernment Free Reserve Equity Beebe
C/Fund Fund Fund Fund Fund Fund Fund
INVESTMENT INCOME
Dividends
$99,797 $20,469 $0 $0 $0 $6,755 $0
Interest
89,576 6,016 299,478 206,421 44,491 4,090 516
189,373 26,485 299,478 206,421 44,491 10,845 516
OPERATING EXPENSES
Investment advisory fee
62,945 23,638 22,352 18,635 722 11,019 142
Professional fees
14,063 5,480 3,586 2,973 494 1,747 0
Registration fees
2,223 906 777 650 307 636 0
Custodian fees
21,477 8,122 15,282 12,676 2,496 3,462 0
Directors fees
6,284 2,315 1,420 1,223 244 1,122 0
Printing
2,025 847 519 465 103 442 0
Miscellaneous
2,947 1,174 719 600 115 595 0
111,964 42,482 44,655 37,222 4,481 19,023 142
Fees and expenses absorbed by investment advisor
0 0 0 0 (3,464) 0 0
111,964 42,482 44,655 37,222 1,017 19,023 142
NET INVESTMENT INCOME (LOSS)
77,409 (15,997) 254,823 169,199 43,474 (8,178) 374
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Unrealized appreciation (depreciation in value of investments for the period
882,869 206,979 60,849 33,450 (288) 156,438 5,553
Net realized gain (loss on investments
190,158 326,059 3 (19,822) 486 (4,536) 0
NET GAIN ON INVESTMENTS
1,073,027 533,038 60,852 13,628 198 151,902 5,553
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS
$1,150,436 $517,041 $315,675 $182,827 $43,672 $143,724 $5,927
C/FUNDS GROUP, INC.
STATEMENTS OF CHANGES IN NET ASSETS
Period
Ending
Year Ending 12/31/97 12/31/97
C/Comm-
unity
Assoc-
C/Growth C/Gov- C/Tax iation Adams
Stock ernment Free Reserve Equity Beebe
C/Fund Fund Fund Fund Fund Fund Fund
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income (loss)
$77,409 ($15,997) $254,823 $169,199 $43,474 ($8,178) $374
Net realized gain (loss) on investments
190,158 326,059 3 (19,822) 486 (4,536) 0
Unrealized appreciation (depreciation)in value of investments for the year
882,869 206,979 60,849 33,450 (288) 156,438 5,553
Net increase in net assets from operations
1,150,436 517,041 315,675 182,827 43,672 143,724 5,927
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - net
(82,342) (25,711) (254,824) (172,265) (43,818) 0 (315)
Net realized gain on investments
(185,102) (284,311) 0 0 0 0 0
(267,444) (310,022) (254,824) (172,265) (43,818) 0 (315)
CAPITAL SHARE TRANSACTIONS
Shares sold
1,360,777 140,465 3,195,844 1,814,679 641,261 972,475 315,060
Reinvested distributions
258,335 295,689 221,437 164,083 43,818 0 315
Shares redeemed
(786,612) (313,644)(3,672,863)(2,456,341)(379,259) (93,349) 0
832,500 122,510 (255,582) (477,579) 305,820 879,126 315,375
Net increase (decrease) in net assets
$1,715,492 $329,529 ($194,731) ($467,017) $305,674 $1,022,850 $320,987
NET ASSETS
Beginning of year
5,421,906 2,211,821 4,737,436 3,785,562 548,160 253,792 0
End of year
$7,137,398 $2,541,350 $4,542,705 $3,318,545 $853,834 $1,276,642 $320,987
UNDISTRIBUTED INVESTMENT (LOSS)
$129 ($9,610) ($84,405) ($38,581) ($605) ($12,358) $59
C/FUNDS GROUP, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ending December 31, 1996
C/Comm-
unity
Assoc-
C/Growth C/Gov- C/Tax iation
Stock ernment Free Reserve Equity
C/Fund Fund Fund Fund Fund Fund
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income (loss
$51,147 ($9,650) $235,309 $155,880 $30,361 $366
Net realized gain (loss) on investments
430,289 192,491 (23,359) 0 (375) 11,930
Unrealized appreciation (depreciation) in value of investments for the year
253,530 213,988 (25,625) (31,570) (4,831) 37,437
Net increase in net assets from operatoins
734,966 396,829 186,325 124,310 25,155 49,733
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - net
(51,147) 0 (235,309) (155,880) (30,361) (37)
Net realized gain on investments
(430,289) (192,491) 0 0 0 (11,930)
Return of capital
(28,347) (1,492) (1,434) (198) 0 0
(509,783) (193,983) (236,743) (156,078) (30,361) (11,967)
CAPITAL SHARE TRANSACTIONS
Shares sold
954,662 185,607 2,939,173 1,927,338 364,162 57,392
Reinvested distributions
509,783 193,983 236,743 156,078 30,361 11,967
Shares redeemed
(619,613) (450,239)(2,359,830)(1,460,759)(270,776) 0
844,832 (70,649) 816,086 622,657 123,747 69,359
Net increase in net assets
$1,070,015 $132,197 $765,668 $590,889 $118,541 $107,125
NET ASSETS
Beginning of year
4,351,891 2,079,624 3,971,768 3,194,673 429,619 146,667
End of year
$5,421,906 $2,211,821 $4,737,436 $3,785,562 $548,160 $253,792
UNDISTRIBUTED INVESTMENT GAIN (LOSS)
$0 ($9,650) ($84,407) ($15,693) ($747) $356
C/FUNDS GROUP, INC.
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS (1)
For the Periods Ended December 31, 1997, 1996, 1995, 1994, and 1993
Net Dis
Rea tribu
lized tions
Dis and from Net
tribu Unrea Net Dis Asset
tions lized Rea tribu Value Net
Net from Gain lized tions at Asset
Opera Invest Net (loss) Gains from Begin Value
Invest ting ment Invest on on Return Total ning End
ment Expe Income ment Invest Invest of Cap Net of of
Income nses (Loss) Income ments ments ital Change Period Period
C/Fund
1997 .60 (.36) .24 (.26) 3.50 (.58) .00 2.90 $17.71 $20.61
1996 .53 (.34) .19 (.19) 2.56 (1.58) (.10) .88 16.83 17.71
1995 .50 (.29) .21 (.21) 3.42 (.54) .00 2.88 13.95 16.83
1994 .59 (.25) .34 (.36) (.55) (.49) (.06) (1.12) 15.07 13.95
1993 .56 (.28) .28 (.27) 1.34 (.47) .00 .88 14.19 15.07
C/Growth Stock Fund
1997 .16 (.26) (.10) (.15) 3.20 (1.68) .00 1.27 $12.38 $13.65
1996 .18 (.23) (.05) .00 2.24 (1.08) (.01) 1.10 11.28 12.38
1995 .22 (.20) .02 (.02) 2.13 (.19) .00 1.94 9.34 11.28
1994(4) .18 (.19) (.01) (.01) (.90) 0 (.01) (.93) 10.27 9.34
1993(4) .16 (.16) .00 .00 .28 (.15) .00 .13 10.14 10.27
C/Government Fund
1997 .67 (.10) .57 (.57) .14 .00 .00 .14 $9.87 $10.01
1996 .66 (.10) .56 (.56) (.15) .00 .00 (.15) 10.02 9.87
1995 .64 (.10) .54 (.54) .58 .00 .00 .58 9.94 10.02
1994 .53 (.09) .44 (.44) (.47) .00 (.02) (.49) 9.93 9.44
1993 .71 (.09) .62 (.62) .26 (.22) .00 .04 9.89 9.93
C/Tax Free Fund
1997 .55 (.10) .45 (.46) .05 .00 .00 .04 $9.81 $9.85
1996 .55 (.10) .45 (.45) (.10) .00 .00 (.10) 9.91 9.81
1995 .54 (.10) .44 (.44) .52 .00 .00 .52 9.39 9.91
1994 .47 (.09) .38 (.37) (.56) .00 (.02) (.57) 9.96 9.39
1993 .51 (.09) .42 (.43) (.02) .00 .00 (.03) 9.99 9.96
C/Community Association Reserve Fund (5)
1997 .61 (.05) .56 (.60) .04 .00 .00 .00 $10.00 $10.00
1996 .58 .00 .58 (.58) .00 .00 .00 .00 10.00 10.00
1995 .60 .00 .60 (.60) .00 .00 .00 .00 10.00 10.00
1994 .59 .00 .59 (.59) .00 .00 .00 .00 10.00 10.00
1993 .50 .00 .50 (.50) .00 .00 .00 .00 10.00 10.00
Adams Equity Fund
1997 .13 (.23) (.10) .00 2.18 .00 .00 2.08 $11.82 $13.90
1996 .17 (.15) .02 .00 2.62 (.64) .00 2.00 9.82 11.82
1995(2)(3).06 (.03) .03 (.02) (.19) .00 .00 (.18) 10.00 9.82
Beebe Fund (6)
1997 .00 .00 .00 .00 .18 .00 .00 .18 $10.00 $10.18
(1) Selected data for a share of capital stock outstanding throughout the
year.
(2) Inception of fund is October, 1995.
(3) Ratio of operating expenses to average net assets has been annualized.
(4) Adjusted to reflect elimination of expense reimbursement from Advisor.
(5) See Footnote I.
(6) Inception of fund is December, 1997.
C/FUNDS GROUP, INC.
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS (1)
For the Periods Ended December 31, 1997, 1996, 1995, 1994, and 1993
Net
Operating Investment Shares
Expenses Income to Portfolio Outstanding
to Average Average Turnover at End of
Net Assets Net Assets Rate Period
C/Fund
1997 1.79% 1.24% 10.28% 346,376
1996 1.90% 1.05% 11.38% 306,141
1995 1.85% 1.36% 5.46% 258,646
1994 1.83% 2.53% 23.84% 272,891
1993 1.89% 1.88% 52.19% 260,630
C/Growth Stock Fund
1997 1.81% (.68%) 51.11% 186,130
1996 1.90% (.45%) 4.26% 178,680
1995 1.85% .20% 16.46% 184,398
1994 (4) 1.87% (.16%) 37.23% 147,699
1993 (4) 1.70% (.04%) 20.26% 160,548
C/Government Fund
1997 1.01% 5.74% 22.05% 453,930
1996 1.02% 5.60% 59.95% 479,954
1995 .99% 5.54% 124.70% 396,280
1994 1.15% 5.75% 122.48% 554,009
1993 .93% 6.10% 123.98% 604,654
C/Tax Free Fund
1997 1.01% 4.58% 10.78% 336,885
1996 1.03% 4.57% .00% 386,027
1995 1.01% 4.53% 22.91% 322,401
1994 1.15% 4.70% 2.76% 328,872
1993 .88% 4.24% 86.14% 62,444
C/Community Association Reserve Fund (5)
1997 .14% 6.21% 52.64% 85,402
1996 .00% 5.83% 9.61% 54,820
1995 .00% 5.96% 41.35% 42,960
1994 .00% 8.76% .00% 5,875
1993 .00% 4.98% 58.29% 4,470
Adams Equity Fund
1997 1.74% (.75%) 48.17% 91,852
1996 1.36% .18% 65.00% 21,468
1995(2)(3) 1.16% .32% .00% 14,935
Beebe Fund (6)
1997 .09% .23% .00% 31,538
(1) Selected data for a share of capital stock outstanding throughout the
year.
(2) Inception of fund is October, 1995.
(3) Ratio of operating expenses to average net assets has been annualized.
(4) Adjusted to reflect elimination of expense reimbursement from Advisor.
(5) See Footnote I.
(6) Inception of fund is December, 1997.
C/FUNDS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE A - ORGANIZATION
C/FUNDS Group, Inc. (the Company), formerly Caldwell Fund, Inc., is
registered under the Investment Company Act of 1940, as amended, as an open-
end diversified investment company. Effective July 2, 1985, C/FUND Group,
Inc., shares were registered under Section 8(a) of the Securities Act of
1933. The Caldwell Fund was the only fund offered by the Company through
June, 1992. Effective July, 1992, four new funds were made available and
the Caldwell Fund was renamed C/Fund. The Adams Equity Fund was made
available in October, 1995. Effective December, 1997, an additional fund,
the Beebe Fund, was made available. The primary investments of the seven
funds are listed as follows:
FUNDS PRIMARY INVESTMENTS
C/Fund Stocks and Fixed Income Securities
formerly Caldwell Fund
C/Growth Stock Fund Common Stocks or Equivalents
formerly Caldwell Growth Stock Fund
C/Government Fund Obligations of the U.S. Government
formerly Caldwell Government Fund
C/Tax-Free Fund Investment Grade Municipal
formerly Caldwell Tax-Free Fund Securities
C/Community Association Reserve Fund Obligations of the U.S. Government
formerly Caldwell Community
Association Reserve Fund
Adams Equity Fund Stocks
Beebe Fund Equity Securities of Financial
Services Companies
NOTE B - SIGNIFICANT ACCOUNTING POLICIES
The following significant accounting policies are in accordance with
accounting policies generally accepted in the investment company industry.
Security Valuation - Investments in securities traded on a national
exchange are stated at the last reported sales price on the day of
valuation; other securities traded in over-the-counter market and listed
securities for which no sale was reported on that date are stated at the
last quoted bid price. Restricted securities and other securities for which
quotations are not readily available are valued at fair value as determined
by the Board of Directors.
Investment Income - Dividend income is recorded as of the ex-dividend date.
Interest income is recognized on the accrual basis. Realized gains and
losses are determined on the identified cost basis.
Distributions to shareholders - Dividends to shareholders are recorded on
the ex-dividend date.
Income Tax Status - No provision for income taxes is included in the
accompanying financial statements as the Company regularly distributes to
shareholders its taxable investment income and realized gains under
provision of the Internal Revenue Code applicable to regulated investment
companies.
Security Transactions - The Company follows industry practice and records
security transactions on the trade date.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those estimates.
NOTE C - INVESTMENT ADVISORY AGREEMENT
Each fund has a written agreement (the "Agreements") for management and
investment advisory services with Omnivest Research Corporation (the
"Advisor") which is owned 100% by Trust Companies of America, Inc. (TCA),
which is controlled by its President and his family. The Agreements provide
for advisor fees to be computed on the average daily net asset value. Under
terms of the agreements, each Fund's total expenses cannot exceed 2% of the
Fund's average daily net asset value in any one year. Expenses in excess of
2% shall be paid by the Advisor. Annual percentage rates provided by the
Agreements in computing investment advisory fees and the fees incurred in
1997 are as follows:
ANNUAL INVESTMENT
FUND % RATE ADVISORY FEES
C/Fund 1.0 $62,945
C/Growth Stock Fund 1.0 23,638
C/Government Fund .5 22,352
C/Tax-Free Fund .5 18,635
C/Community Association .5 722
Reserve Fund
Adams Equity Fund 1.0 11,019
Beebe Fund 1.0 142
C/FUNDS GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1997
NOTE D - FUND SHARE TANSACTONS AND DISTRIBUTIONS
As of December 31, 1997 and 1996 there were 5,000,000 shares of .01 par
value capital shares authorized. Transactions of the Funds were as
follows:
C/Comm-
unity
Assoc-
C/Growth C/Gov- C/Tax iation Adams
Stock ernment Free Reserve Equity Beebe
C/Fund Fund Fund Fund Fund Fund Fund
Period ended December 31, 1997
Shares sold
67,712 10,049 323,575 185,103 64,126 76,975 31,507
Reinvested distributions
12,551 21,662 22,449 16,785 4,382 0 31
Shares redeemed
(40,028) (24,261) (372,048) (251,030) (37,926) (6,591) 0
Net increase (decrease)
40,235 7,450 (26,024) (49,142) 30,582 70,384 31,538
Year ended December 31, 1996
Shares sold
53,186 15,626 297,528 196,954 35,895 5,520 -
Reinvested distributions
28,753 15,669 23,915 15,939 3,036 1,013 -
Shares redeemed
(34,444) (37,013) (237,769) (149,267) (27,071) 0 -
Net increase (decrease)
47,495 (5,718) 83,674 63,626 11,860 6,533 -
NOTE E - INVESTMENT TRANSACTIONS
Purchases and sales of investment securities and the change in unrealized
gain(loss) of the funds were as follows for 1997.
C/Comm-
unity
Assoc-
C/Growth C/Gov- C/Tax iation Adams
Stock ernment Free Reserve Equity Beebe
C/Fund Fund Fund Fund Fund Fund Fund
Common Stocks
Purchases
$253,296 $1,189,565 $0 $0 $0 $1,444,505 $285,071
Sales
636,848 1,569,766 0 0 0 544,324 0
Municipal Bonds
Purchases
0 0 0 395,702 0 0 0
Sales
0 0 0 566,878 0 0 0
U.S. Government Obligations:
Purchases
1,224,166 0 980,373 0 735,977 0 0
Sales
0 0 1,533,600 0 381,219 0 0
Unrealized appreciation (depreciation) of securities
$882,869 $206,979 $60,849 $33,450 ($288) $156,438 $5,553
NOTE F - TRANSACTIONS WITH AFFILIATES
In addition to the investment advisory fees discussed in NOTE C, the Funds
pay fees to other related entities, all of which are 100% owned by TCA,
primarily for custodianship of assets and computer processing and
programming. Total fees paid to TCA for services other than investment
advising aggregated approximately $70,000.
The number of shares held by the President of the Company, employees of the
Advisor, and other affiliated persons at December 31, 1997 are as follows:
SHARES VALUE
C/Fund 37,827 $779,612
C/Growth Stock Fund 7,023 95,863
C/Government Fund 21,932 219,539
C/Tax-Free Fund 15,930 156,910
Adams Equity Fund 18,988 263,935
Beebe Fund 24,024 244,560
NOTE G - MARKET RISK
The Fund is exposed to credit risk on the amount invested in marketable
securities. The maximum amount of loss the Fund would incur is limited to
the amount recorded in the 1997 financial statements. The Fund does not
hold any collateral on the marketable securities. This exposure to risk is
customary for all entities which have invested in financial instruments.
NOTE H - BROKER ALLOCATIONS
The placement of orders for the purchase and sale of portfolio securities
is made under the control of the Advisor, subject to the overall
supervision of the Board of Directors. The Advisor is permitted to and does
select broker-dealer firms, which provide economic, corporate, and
investment research service. Commissions paid to firms supplying such
research include the cost of such services. The value of such services
aggregated $22,140 for the year ended December 31, 1997.
NOTE I - C/COMMUNITY ASSOCIATION RESERVE FUND
Through 1997, the investment advisor absorbed substantially all investment
expenses of the C/C.A.R. Fund, including their advisory fees. In addition,
the advisor guaranteed a $10 per share value. Since inception, an asset
or liability to the investment advisor was accrued by the C/C.A.R. Fund to
the extent necessary to maintain the $10 per share value. At December 31,
1997 the fund reflected a $3,732 liability to the investment advisor.
Effective February 13, 1998 the Fund will begin calculating its NAV at
actual and the Fund's liability to the investment advisor will be forgiven.
Appropriate adjustments will be made to net assets and to shareholder
accounts.
REPORT OF INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS
To the Shareholders and Board of Directors
C/FUNDS Group, Inc.
Venice, Florida
We have audited the statements of assets and liabilities, including the
portfolio of investments, of C/FUNDS Group, Inc. (comprising, respectively,
the C/Fund, C/Growth Stock Fund, C/Government Fund, C/Tax Free Fund,
C/Community Association Reserve Fund, Adams Equity Fund, and Beebe Fund
portfolios) as of December 31, 1997, and the related statements of
operations for the period then ended, the statements of changes in net
assets for each of the two years in the period then ended, and the selected
per share data and ratios for each of the five years in the period then
ended. These financial statements, and per share data and ratios are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements, and per share data and
ratios based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and per
share data and ratios are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1997 by correspondence with the
custodian, and examination of supporting documentation for unsettled
security purchases. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and selected per share data and
ratios referred to above present fairly, in all material respects, the
financial position of each of the respective portfolios constituting
C/FUNDS Group, Inc. as of December 31, 1997, the results of their
operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the selected per share
data and ratios for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
GREGORY, SHARER & STUART
St. Petersburg, Florida
January 30, 1998
Investment Advisor
Omnivest Research Corporation
250 Tampa Avenue West
Venice, FL 34285
(941) 493-4295
Custodian
Caldwell Trust Company
201 Center Road Suite 2
Venice, FL 34292
(941) 493-3600
Auditors
Gregory Sharer & Stuart
Certified Public Accountants
100 Second Avenue South
St. Petersburg, FL 33701-4383
(813) 821-6161
Investment Advisory Board
Arthur B. Laffer, Ph.D., Economist
Jude Wanniski, Journalist
Alan Reynolds, Economist
Alvin Moscow, Author
Ted C. Van Antwerp, Philanthropist
Willet J. Worthy, Jr., Vintner
Manuel Johnson, Ph.D., Economist
This report has been prepared for the information of shareholders of the
Funds and is not authorized for distribution to Investors unless preceded
or accompanied by an effective Prospectus which includes information
regarding the Funds' objectives, policies, management, records, and other
information.
