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C/Funds Group, Inc.
[C/FUNDS LOGO]
C/Fund
C/Growth Stock Fund
C/Government Fund
C/Community Association Reserve Fund
1999 Annual Report
Table of Contents
Letter to Shareholders 1
Comparative Performance 2
Portfolios of Investments 4
Audited Financial Statements 9
Notes to Financial Statements 12
Report of Independent Certified
Public Accountants 14
LETTER TO SHAREHOLDERS
Once again, the stock markets performed above average for the
calendar year 1999, with the 30 stocks in the Dow Jones Industrial
Average providing investors a total return of 24%. The S&P 500
Index also earned a commendable 18% for the same period, while the
stocks making up the NASDAQ index made up lost ground after many
years of under-performance by turning in an astounding 86% total
return. This was due to a breathtaking initial public offering
craze for small internet startups, which we believe is very
unlikely to continue.
By comparison with these performance indices, the C/Growth
Stock Fund total return was a pleasing 34%+ for 1999, mainly due
to the inclusion in its portfolio of a high percentage of many
smaller, rapidly-growing NASDAQ companies. The objective of this
fund is to be invested substantially all the time in these kinds
of growth stocks. The C/Fund, on the other hand, which has a
lower percentage of its assets invested in stocks and which
emphasizes higher-yielding, more mature company issues, earned a
total return of approximately 11% for the year. This reflected
the inclusion of many higher-yielding stock issues in the
portfolio, which as a market sector generally under-performed most
other sectors last year.
It is a pleasure to report that the C/Government Fund, which
invests in government fixed income securities, was ranked highly
by major rating agencies for its excellent performance during a
year in which bond prices were weak as interest rates continued to
climb. Fund maturities were held fairly short for much of the
year in an attempt to protect the fund's Net Asset Value per
share, while continuing to earn as high an interest rate yield as
possible. The total performance of this fund for the year was
just narrowly positive, which compares favorably with the
generally negative returns reported by most other government bond
funds having similar objectives.
One area of services that we would like to bring to the
attention of all fund series shareholders is CFI's continued
commitment to using as much technology as possible in the
operations of its funds. Your managers believe that these
productivity advances will allow CFI to continue offering smaller
investors a cost effective way to invest and that it will be able
to continue to maintain a no-minimum investment policy, as in the
past. In the last year or so, we have started offering direct
automatic deductions from investor checking or savings accounts
(ACH) for those who wish to avail themselves of this regular
savings and investing kind of discipline. In addition, we
anticipate allowing secure, confidential monitoring of accounts
directly by clients via the Internet. This is expected to be
announced sometime in 2000. With these advances, it will become
even easier for investors to decide when and where they want to
invest and to track directly from their own computers their
investments in C/Fund portfolios 24 hours a day.
During the past year, the Board voted to cease offering and
to close the Adams Equity Fund, due to its inability to reach the
size necessary to make it economical to operate as a separate
series fund. The C/Funds Group now consists of four fund series,
including the C/Community Association Reserve Fund, a specialty
fund of government securities that is managed for and offered
exclusively to Florida community associations.
As always, we wish to thank all staff members, shareholders,
directors and officers for their contribution to the company's
success this past year.
Respectfully Submitted:
R. G. "Kelly" Caldwell, Jr.
President
February 23, 2000
C/Fund
Illustration of a $10,000 Investment
[graphic]
C/Growth Stock Fund
Illustration of a $10,000 Investment
[graphic]
C/Government 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, 1998
Since
1 Year 5 Year 10 Year Inception
C/Fund 10.66% 18.95% 13.28% 13.42%
C/Growth Stock Fund 34.25% 24.72% n/a 15.22%
C/Government Fund 0.55% 6.40% n/a 5.56%
C/C.A.R. Fund 3.18% 5.44% n/a 5.40%
C/FUND
PORTFOLIO OF INVESTMENTS
December 31, 1999
EQUITIES (86.2%) Shares Value
Building Materials & Garden Supplies (3.2%) $309,375
Home Depot, Inc. 4,500 309,375
Business Services (6.8%) 665,000
Microsoft Corp. 2,000 233,500
International Business Machines Corp. 4,000 431,500
Chemicals & Allied Products (14.2%) 1,387,063
Dow Chemical Co. 1,000 133,625
Abbott Labs 1,000 36,313
American Home Products Corp. 4,000 157,000
Bristol Myers Squibb Co. 2,000 128,375
Merck & Co., Inc. 2,000 134,375
Johnson & Johnson 2,000 186,500
Colgate Palmolive Co. 4,000 260,000
Proctor & Gamble Co. 2,000 219,125
E.I. Dupont De Nemours & Co. 2,000 131,750
Communication (2.0%) 199,125
AT&T Corp. 2,000 101,625
SBC Communications, Inc. 2,000 97,500
Depository Institutions (2.6%) 253,250
J. P. Morgan & Co, Inc. Com 2,000 253,250
Eating & Drinking Places (0.8%) 80,625
McDonald's Restaurants 2,000 80,625
Electric, Gas, & Sanitary Services (2.2%) 213,625
FPL Group, Inc. 2,000 85,625
American Water Works, Inc. 3,000 63,750
American Electric Power Com 2,000 64,250
Electronic & Other Electric Equipment (7.2%) 699,125
General Electric Co. 2,000 309,500
Lucent 3,000 225,000
Intel Corp. 2,000 164,625
Fabricated Metal Products (2.8%) 277,501
Parker Hannifin Corp. 3,000 153,938
Gillette Co. 3,000 123,563
Food & Kindred Products (4.3%) 423,125
Pepsico, Inc. 4,000 141,000
Coca-Cola Co. 2,000 116,500
Lancaster Colony Corp. 5,000 165,625
Food Stores (1.0%) 96,750
Albertsons, Inc. 3,000 96,750
General Merchandise Stores (4.2%) 414,750
Wal-Mart Stores 6,000 414,750
Holding & Other Investment Offices (0.8%) 79,062
New Plan Excel Realty Trust, Inc. 5,000 $79,062
C/FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
Shares Value
Industrial Machinery & Equipment (4.9%) $478,375
Hewlett Packard Co. 2,000 227,500
Black & Decker Manufacturing 3,000 156,750
Caterpillar 2,000 94,125
Instruments & Related Products (2.6%) 247,250
Emerson Electric Co. 2,000 114,750
Eastman Kodak Co. 2,000 132,500
Motion Pictures (0.8%) 76,780
Walt Disney Co. 2,625 76,780
Nondepository Institutions (4.5%) 443,875
Citigroup, Inc. 2,000 111,375
American Express Co. 2,000 332,500
Paper & Allied Products (4.5%) 439,500
International Paper Co. 2,000 112,875
Kimberly Clark Corp. 2,000 130,875
Minnesota Mining & Manufacturing 2,000 195,750
Petroleum & Coal Products (4.9%) 479,191
Exxon Mobil Corp. 4,000 322,250
BP Amoco PLC ADS 2,646 156,941
Primary Metal Industries (1.7%) 166,000
Alcoa, Inc. 2,000 166,000
Railroad Transportation (1.7%) 162,438
CSX Corp. 1,000 31,375
Union Pacific Corp. 3,000 131,063
Tobacco Products (1.2%) 115,000
Philip Morris Cos. 5,000 115,000
Transportation Equipment (5.9%) 580,250
United Technologies Corp. 2,000 130,000
Boeing Co. 2,000 82,875
General Motors Corp. 2,000 145,375
Honeywell International, Inc. 2,000 115,375
Ford Motor Co. 2,000 106,625
Transportation Services (1.4%) 135,000
GATX Corp. 4,000 135,000
TOTAL EQUITIES (86.2%) 8,422,035
GOVERNMENTS (10.2%) 995,469
U.S. Treasury Notes 5.375% due 07/31/00 500,000 498,750
U.S. Treasury Notes 5.875% due 11/30/01 500,000 496,719
CASH AND EQUIVALENTS (3.6%) 351,488
TOTAL INVESTMENTS (100%) $9,768,992
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS
December 31, 1999
EQUITIES (96.9%) Shares Value
Building Materials & Garden Supplies (6.5%) $237,188
Home Depot, Inc. 3,450 237,188
Business Services (19.8%) 722,843
Robert Half International, Inc. 1,500 42,844
Interpublic Group Cos. 1,100 63,456
Inktomi 1,000 88,750
International Business Machines Corp. 750 80,906
Healtheon /WebMD Corporation 900 33,750
Doubleclick, Inc. 200 50,612
Check Point Software 550 109,312
Microsoft Corp. 1,200 140,100
America Online 700 53,113
Omnicom Group, Inc. 600 60,000
Chemicals & Allied Products (4.8%) 173,622
Merck & Co., Inc. 550 36,953
Medco Research 1,900 57,119
Biogen 500 42,250
Johnson & Johnson 400 37,300
Communication (7.9%) 288,041
Alltel Corp. 1,150 95,091
U. S. Cellular 550 55,516
AT&T Corp. 1,060 53,861
MCI Worldcom, Inc. 1,575 83,573
Depository Institutions (1.9%) 68,900
Northern Trust Corp. 1,300 68,900
Electric, Gas, & Sanitary Services (1.9%) 70,400
Calpine Corp. 1,100 70,400
Electronic & Other Electric Equipment (9.9%) 360,170
General Electric Co. 450 69,638
Salton, Inc. 1,800 60,187
Lucent 1,600 120,000
Solectron Corp. Com 1,160 110,345
Food & Kindred Products (1.0%) 36,375
Starbucks Corp. 1,500 36,375
Footwear (0.8%) 29,738
Nike 600 29,738
Furniture & Home Furnishings Stores (1.0%) 36,800
Williams Sonoma, Inc. 800 36,800
General Merchandise Stores (4.0%) 147,000
Kohls Corp. 600 43,312
Wal-Mart Stores 1,500 103,688
C/GROWTH STOCK FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1999
Shares Value
Industrial Machinery & Equipment (18.4%) $669,600
Lexmark International 500 45,250
Cisco Systems 2,300 246,388
EMC Corp. 1,800 196,650
Sun Microsystems 1,400 108,412
Cybex Computer Products Corp. 1,800 72,900
Instruments & Related Products (2.0%) 73,125
Guidant Corporation 500 23,500
Sybron International Corp. Wisconsin 1,200 29,625
Colorado Medtech, Inc. 2,500 20,000
Insurance Agents, Brokers, & Service (1.6%) 57,412
Marsh & McLennan Cos., Inc. 600 57,412
Insurance Carriers (3.0%) 110,828
American International Group 1,025 110,828
Lumber & Wood Products (1.4%) 49,481
MASCO Corp. 1,950 49,481
Nondepository Institutions (2.1%) 77,963
Citigroup, Inc. 1,400 77,963
Paper & Allied Products (1.3%) 46,438
Williamette Industries 1,000 46,438
Petroleum & Coal Products (1.2%) 43,250
Imperial Oil LTD 2,000 43,250
Transportation By Air (2.8%) 103,453
Southwest Airlines 3,750 60,469
FDX Corp. 1,050 42,984
Transportation Equipment (2.3%) 84,978
Gentex Corp. 1,100 30,525
Harley Davidson 850 54,453
Water Transportation (1.3%) 47,812
Carnival Cruise CLA 1,000 47,812
TOTAL EQUITIES (96.9%) 3,535,417
CASH & EQUIVALENTS (3.1%) 111,510
TOTAL INVESTMENTS (100%) $3,646,927
C/GOVERNMENT FUND
PORTFOLIO OF INVESTMENTS
December 31, 1999
GOVERNMENTS (95.4%) Par Value Value
U.S. Treasury Notes 5.625% due 05/15/01 1,000,000 $992,500
U.S. Treasury Notes 5.875% due 11/30/01 1,500,000 1,490,156
U.S. Treasury Notes 6.250% due 08/31/02 1,000,000 999,063
U.S. Treasury Notes 5.750% due 11/30/02 1,000,000 985,000
U.S. Treasury Notes 6.250% due 02/15/03 1,000,000 997,188
U.S. Treasury Notes 5.750% due 08/15/03 1,000,000 979,375
U.S. Treasury Notes 5.875% due 02/15/04 1,000,000 983,125
U.S. Treasury Notes 6.000% due 08/15/04 1,000,000 984,375
TOTAL GOVERNMENTS (95.4%) 8,410,782
CASH AND EQUIVALENTS (4.6%) 404,576
TOTAL INVESTMENTS (100%) $8,815,358
C/COMMUNITY ASSOCIATION RESERVE FUND
PORTFOLIO OF INVESTMENTS
December 31, 1999
GOVERNMENTS (86.9%) Par Value Value
U.S. Treasury Notes 6.875% due 03/31/00 200,000 $200,625
U.S. Treasury Notes 5.375% due 07/31/00 100,000 99,750
U.S. Treasury Notes 6.250% due 04/30/01 100,000 100,094
U.S. Treasury Notes 5.625% due 05/15/01 100,000 99,250
U.S. Treasury Notes 5.875% due 11/30/01 100,000 99,344
U.S. Treasury Notes 5.750% due 11/30/02 100,000 98,500
TOTAL GOVERNMENTS (86.9%) 697,563
CASH AND EQUIVALENTS (13.1%) 105,186
TOTAL INVESTMENTS (100%) $802,749
C/FUNDS GROUP, INC.
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999
C/Comm
unity
Associa
C/Growth C/Govern tion
Stock ment Reserve
C/Fund Fund Fund Fund
Securities at Cost $6,239,031 $2,436,553 $8,926,322 $808,662
ASSETS
Securities value $9,768,992 $3,646,927 $8,815,358 $802,749
Dividends and interest
receivable 24,333 1,869 132,422 8,982
9,793,325 3,648,796 8,947,780 811,731
LIABILITES
Advisor fee and other payables 5,749 2,133 3,785 248
5,749 2,133 3,785 248
NET ASSETS APPLICABLE TO $9,787,576 $3,646,663 $8,943,995 $811,483
OUTSTANDING SHARES
CAPITAL SHARES 397,584 210,914 913,173 82,369
NET ASSET VALUE PER SHARE $24.62 $17.29 $9.79 $9.85
C/FUNDS GROUP, INC.
STATEMENTS OF OPERATIONS
For the Year Ending December 31, 1999
C/Comm
unity
Associa
C/Growth C/Govern tion
Stock ment Reserve
C/Fund Fund Fund Fund
INVESTMENT INCOME
Dividends $127,902 $16,404 $0 $0
Interest 105,441 11,521 640,830 47,875
233,343 27,925 640,830 47,875
OPERATING EXPENSES
Investment advisory fee 92,946 28,836 54,201 3,964
Professional fees 26,193 8,503 9,767 969
Registration fees 388 126 150 11
Custodian fees 31,294 10,149 37,720 2,808
Directors fees 8,943 2,722 3,659 275
Miscellaneous 2,179 554 807 86
161,943 50,890 106,304 8,113
NET INVESTMENT INCOME (LOSS) 71,400 (22,965) 534,526 39,762
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Change in unrealized appreciation
(depreciation) in value of
investments for the year 283,540 177,958 (386,899) (9,608)
Net realized gain (loss) on
investments 600,162 711,038 (61,490) (4,988)
NET GAIN (LOSS) ON INVESTMENTS 883,702 888,996 (448,389) (14,596)
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $955,102 $866,031 $86,137 $25,166
C/FUNDS GROUP, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ending December 31, 1999
C/Comm
unity
Associa
C/Growth C/Govern tion
Stock ment Reserve
C/Fund Fund Fund Fund
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income (loss) $71,400 ($22,965) $534,526 $39,762
Net realized gain (loss) on
investments 600,162 711,038 (61,490) (4,988)
Unrealized appreciation
(depreciation) in value of
investments for the year 283,540 177,958 (386,899) (9,608)
Net increase in net assets from
operations 955,102 866,031 86,137 25,166
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - net (71,400) 0 (534,526) (39,762)
Net realized gain on
investments (566,009) (683,816) 0 0
(637,409) (683,816) (534,526) (39,762)
CAPITAL SHARE TRANSACTIONS
Shares sold 1,515,650 958,890 3,913,054 350,362
Reinvested distributions 607,188 672,321 413,407 39,691
Shares redeemed (1,513,025) (1,248,493) (4,916,632) (288,206)
609,813 382,718 (590,171) 101,847
Net increase (decrease) in net
assets 927,506 564,933 (1,038,560) 87,251
NET ASSETS
Beginning of year 8,860,070 3,081,730 9,982,555 724,232
End of year $9,787,576 $3,646,663 $8,943,995 $811,483
UNDISTRIBUTED INVESTMENT GAIN
(LOSS) $37,616 $4,256 ($225,402) ($4,988)
C/FUNDS GROUP, INC.
STATEMENTS OF CHANGES IN NET ASSETS
For the Year Ending December 31, 1998
C/Comm
unity
Associa
C/Growth C/Govern tion
Stock ment Reserve
C/Fund Fund Fund Fund
INCREASE (DECREASE) IN NET ASSETS
From Operations:
Net investment income (loss) $100,713 ($12,228) $417,201 $43,208
Net realized gain on
investments 335,753 132,755 0 437
Unrealized appreciation
(depreciation) in value of
investments for the year 1,108,922 414,834 222,195 (354)
Net increase in net assets
from operations 1,545,388 535,361 639,396 43,291
DISTRIBUTIONS TO SHAREHOLDERS
Investment income - net (99,926) 0 (417,200) (43,207)
Net realized gain on
investments (334,943) (132,387) 0 0
(434,869) (132,387) (417,200) (43,207)
CAPITAL SHARE TRANSACTIONS
Shares sold 1,814,668 328,020 8,532,493 475,625
Reinvested distributions 416,606 127,950 363,296 43,207
Shares redeemed (1,619,121) (318,564) (3,678,135) (648,518)
612,153 137,406 5,217,654 (129,686)
Net increase (decrease) in
net assets 1,722,672 540,380 5,439,850 (129,602)
NET ASSETS
Beginning of year 7,137,398 2,541,350 4,542,705 853,834
End of year $8,860,070 $3,081,730 $9,982,555 $724,232
UNDISTRIBUTED INVESTMENT
GAIN (LOSS) $2,755 $358 ($163,912) $180
C/FUNDS GROUP, INC.
C/FUND, C/GROWTH STOCK FUND, C/GOVERNMENT FUND, AND C/COMMUNITY ASSOCIATION
RESERVE FUND
SUPPLEMENTARY INFORMATION - SELECTED PER SHARE DATA AND RATIOS (1)
For the Years Ended December 31, 1999, 1998, 1997, 1996, and 1995
Net Dis
Rea tribu
lised 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
1999 .62 (.43) .19 (.19) 2.35 (1.52) .00 .83 $23.79 $24.62
1998 .66 (.38) .28 (.72) 4.12 (.50) .00 3.18 20.61 23.79
1997 .60 (.36) .24 (.26) 3.50 (.58) .00 2.90 17.71 20.61
1996 .53 (.34) .19 (.19) 2.56 (1.58) (2)(.10) .88 16.83 17.71
1995 .50 (.29) .21 (.21) 3.42 (.54) .00 2.88 13.95 16.83
C/Growth Stock Fund
1999 .16 (.29) (.13) .00 5.49 (3.91) .00 1.45 $15.84 $17.29
1998 .18 (.24) (.06) .00 2.96 (.71) .00 2.19 13.65 15.84
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) (2)(.01) 1.10 11.28 12.38
1995 .22 (.20) .02 (.02) 2.13 (.19) .00 1.94 9.34 11.28
C/Government Fund
1999 .60 (.10) .50 (.50) (.44) .00 .00 (.44) $10.23 $9.79
1998 .64 (.10) .54 (.54) .22 .00 .00 .22 10.01 10.23
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 9.44 10.02
C/Community Association Reserve Fund
1999 .60 (.10) .50 (.50) (.18) .00 .00 (.18) $10.03 $9.85
1998 .62 (.10) .52 (.52) .03 .00 .00 .03 10.00 10.03
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
Net
Operating Investment Shares
Expenses Income to Portfolio Outstanding
to Average Average Turnover at End of
Net ASsets Net Assets Rate Period
C/Fund
1999 1.75% .77% 39.65% 397,584
1998 1.68% 1.27% 17.58% 372,377
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
C/Growth Stock Fund
1999 1.74% (.78%) 118.73% 210,914
1998 1.68% (.45%) 88.47% 194,538
1997 1.81% (.68%) 51.11% 186,130
1996 1.90% (.45%) 4.26% 178,680
1995 1.85% .20% 16.46% 184,398
C/Government Fund
1999 .99% 5.00% 99.20% 913,173
1998 .96% 5.55% .00% 975,821
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
C/Community Association Reserve Fund
1999 1.02% 4.99% 70.99% 82,369
1998 .96% 5.28% 14.20% 72,179
1997 .14% 6.21% 52.64% 85,402
1996 .00% 5.83% 9.61% 54,820
1995 .00% 5.96% 41.35% 42,960
(1) Selected data for a share of capital stock
outstanding throughout the year.
(2) Fund paid dividend by return of principal.
C/FUNDS GROUP, INC.
C/FUND, C/GROWTH STOCK FUND, C/GOVERNMENT FUND,
AND C/COMMUNITY ASSOCIATION RESERVE FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE A - ORGANIZATION
C/Funds Group, Inc. (the Company), is registered as an open-end diversified
investment company under the Investment Company Act of 1940. Effective July
2, 1985, the Company's shares were registered under Section 8(a) of the
Securities Act of 1933. Currently, the Company offers the following four
funds:
FUNDS PRIMARY INVESTMENTS
C/Fund Stocks and Fixed Income Securities
C/Growth Stock Fund Common Stocks or Equivalents
C/Government Fund Obligations of the U.S. Government
C/Community Association Reserve Fund Obligations of the U.S. Government
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 markets and listed
securities for which no sale was reported on that date are stated at the
last quoted bid price.
Investment Income - Dividend income is recorded as of the ex-dividend date.
Interest income is recognized on the accrual basis. Discounts and premiums
on securities purchased are not amortized over the life of the respective
security. 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 the Company's 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 1999 are as follows:
ANNUAL INVESTMENT
FUND % RATE ADVISORY FEES
C/Fund 1.0 $92,946
C/Growth Stock Fund 1.0 28,836
C/Government Fund .5 54,201
C/Community Association Reserve Fund .5 3,964
C/FUNDS GROUP, INC.
C/FUND, C/GROWTH STOCK FUND, C/GOVERNMENT FUND,
AND C/COMMUNITY ASSOCIATION RESERVE FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 1999
NOTE D - FUND SHARE TRANSACTONS AND DISTRIBUTIONS
As of December 31, 1999 and 1998 there were 5,000,000 shares of $.01 par
value capital shares authorized. Transactions of the Funds were as follows:
C/Community
C/Growth Association
Stock C/Government Reserve
C/Fund Fund Fund Fund
Year ended December 31, 1999
Shares sold 60,871 54,178 393,028 35,224
Reinvested distributions 24,606 38,885 41,584 3,998
Shares redeemed (60,271) (76,686) (497,261) (29,032)
Net increase (decrease) 25,206 16,377 (62,649) 10,190
Year ended December 31, 1998
Shares sold 80,660 22,220 849,231 47,089
Reinvested distributions 17,565 8,078 35,803 4,304
Shares redeemed (72,224) (21,890) (363,143) (64,616)
Net increase (decrease) 26,001 8,408 521,891 (13,223)
NOTE E - INVESTMENT TRANSACTIONS
Purchases and sales of investment securities and the accumulated unrealized
gain (loss) of the funds were as follows for 1999:
C/Community
C/Growth Association
Stock C/Government Reserve
C/Fund Fund Fund Fund
Common Stocks
Purchases $2,456,441 $3,199,480 $0 $0
Sales 2,301,181 3,162,450 0 0
U.S. Government Obligations
Purchases 1,001,797 0 8,983,365 600,910
Sales 1,251,744 0 9,229,663 554,017
Unrealized appreciation (depreciation)
of securities $3,529,959 $1,210,365 ($110,965) ($5,913)
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 subsidiaries for services other than
investment advising aggregated approximately $87,800 for 1999.
The number of shares held by the President of the Company, employees of the
Advisor, and other affiliated persons at December 31, 1999 are as follows:
SHARES VALUE
C/Fund 41,211 $1,014,626
C/Growth Stock Fund 78,255 1,353,028
C/Government Fund 87,509 856,710
C/Community Association Reserve Fund 62,863 619,201
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 1999 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. In the fourth quarter of 1999, the
Company discontinued use of investment research services supplied by
brokers whose commissions included the cost of such services. The value of
such services, for the Company, aggregated $30,663 for the year ended
December 31, 1999.
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 the C/Fund, C/Growth
Stock Fund, C/Government Fund, and C/Community Association
Reserve Fund (four of the portfolios constituting the C/FUNDS
Group, Inc.) as of December 31, 1999, and the related statements
of operations for the year 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, 1999, 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 the C/Fund, C/Growth Stock
Fund, C/Government Fund, and C/Community Association Reserve Fund
(portfolios of the C/FUNDS Group, Inc.) as of December 31, 1999,
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 21, 2000
Investment Advisor
Omnivest Research Corporation
250 Tampa Avenue West
Venice, FL 34285
(941) 493-4295
Custodian
Caldwell Trust Company
201 Center Road, Suite Two
Venice, FL 34292
(941) 493-3600
Auditors
Gregory Sharer & Stuart
Certified Public Accountants
100 Second Avenue South, Suite 600
St. Petersburg, FL 33701-4383
(727) 821-6161
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.
