<PAGE>
===============================================================================
PCS CASH FUND, INC.
- -------------------------------------------------------------------------------
ANNUAL REPORT
JUNE 30, 1995
- -------------------------------------------------------------------------------
PCS MONEY MARKET PORTFOLIO
PCS GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
- -------------------------------------------------------------------------------
===============================================================================
<PAGE>
PCS CASH FUND, INC.
PRESIDENT'S LETTER
Dear Shareholder:
We are pleased to present to you the annual report for the PCS Cash Fund, Inc.
The Fund is currently operating two portfolios: PCS Money Market Portfolio and
PCS Government Obligations Money Market Portfolio. During the fiscal year the
size of PCS Money Market Portfolio remained virtually the same moving from
$176.6 million in June of 1994 to $171.5 million in June of this year, while PCS
Government Obligations Money Market Portfolio decreased from $102.6 million to
$67.5 million.
During the first half of 1995 short-term interest rates demonstrated
considerable volatility as the Federal Reserve shifted monetary policy from a
restrictive stance to an accommodative one. In February of this year we saw the
Fed execute the final step (an increase of 50 basis points to 6%) in a year long
campaign of raising interest in its effort to halt the excessive growth of the
American economy. The economic outlook was much different four months later,
however, and by the end of June market participants, having been convinced that
the rapid increase in the Fed Funds level had gone too far, were anticipating an
imminent easing by the Fed.
The heightened level of market volatility required the implementation of several
different strategies at various times during the year. As the prospects for
further tightening by the Fed dimmed, purchases of floating rate notes were
discontinued. When the market rallied strongly some of the treasury bill
positions were sold and as spreads over treasuries became more attractive
government agency discount note and commercial paper holdings were increased
where such purchases were deemed appropriate, and within portfolio guidelines.
For most of the second quarter both of the portfolios took advantage of the
inversion of the treasury yield curve by capitalizing on the high yields
available in overnight and very short-term investments.
We are pleased to report that the PCS Cash Fund continues to meet its goal of
providing as high a level of interest income as is consistent with maintaining
liquidity and stability of principal, and that the Fund holds only high quality
securities with over 90% invested in securities rated A1+/P1.
In the coming months the Fund will continue to emphasize performance, quality
and service to its shareholders. We value your participation as a shareholder
and if you have any suggestions regarding the Fund, please let us know.
Very truly yours,
[GRAPHIC OMITTED]
/s/Warren J. Olsen
Warren J. Olsen
President
July 31, 1995
<PAGE>
PCS CASH FUND, INC.
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
JUNE 30, 1995
FACE
AMOUNT
(000) VALUE
----------- ------------
<S> <C> <C>
AGENCY OBLIGATIONS (38.0%)
Federal Home Loan Mortgage Corporation Discount Notes
5.87%, 07/05/95 ................................... $ 9,104 $ 9,098,062
5.88%, 07/14/95 ................................... 5,000 4,989,383
5.85%, 07/21/95 ................................... 10,000 9,967,500
5.91%, 07/24/95 ................................... 5,000 4,981,121
Federal National Mortgage Association Discount Notes
5.87%, 07/05/95 ................................... 6,140 6,135,995
5.86%, 07/06/95 ................................... 5,000 4,995,931
5.87%, 07/07/95 ................................... 5,305 5,299,810
5.91%, 08/04/95 ................................... 5,000 4,972,092
5.70%, 09/07/95 ................................... 5,000 4,946,167
5.81%, 09/08/95 ................................... 5,000 4,944,321
5.88%, 11/14/95 ................................... 5,000 4,888,933
-----------
TOTAL AGENCY OBLIGATIONS (COST $65,219,315) ............ 65,219,315
-----------
COMMERCIAL PAPER (8.7%)
FINANCIAL (5.8%)
ABN - AMRO Bank , 5.86%, 10/16/95 ................. 5,000 4,912,914
UBS Financial Inc. , 6.13%, 07/05/95 .............. 5,000 4,996,597
-----------
TOTAL FINANCIAL ................................... 9,909,511
-----------
OIL & GAS (2.9%)
Koch Industries, Inc. , 6.20%, 07/05/95 ........... 5,000 4,996,555
-----------
TOTAL COMMERCIAL PAPER (COST $14,906,066) .............. 14,906,066
-----------
U.S. TREASURY OBLIGATIONS (2.9%)
U.S. TREASURY BILL
6.28%, 10/19/95 ................................... 5,000 4,904,056
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $4,904,056) ...... 4,904,056
-----------
</TABLE>
See accompanying notes to financial statements
2
<PAGE>
PCS CASH FUND, INC.
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 1995
FACE
AMOUNT
(000) VALUE
----------- ------------
<S> <C> <C>
VARIABLE RATE OBLIGATIONS (29.7%)
Federal National Mortgage Association Floating Rate Notes
5.97%, 07/03/95** ..................................... $ 5,000 $ 4,999,708
5.58%, 07/05/95** ..................................... 5,000 5,000,000
5.58%, 07/05/95** ..................................... 6,000 6,000,000
6.02%, 07/07/95** ..................................... 15,000 15,000,000
General Electric Capital Corporation Floating Rate Note
6.35%, 07/03/95** ..................................... 5,000 5,000,000
Student Loan Marketing Association Floating Rate Note
5.86%, 07/05/95** ..................................... 15,000 15,014,549
-----------
TOTAL VARIABLE RATE OBLIGATIONS (COST $51,014,257) ......... 51,014,257
-----------
REPURCHASE AGREEMENT (20.6%)
Goldman Sachs & Co. 6.05%, 07/02/95, (Agreement
dated 06/30/95, to be repurchased at $35,397,837
collateralized by $24,640,000, U.S. Treasury Bonds
10.625%, due 08/15/15. The total market value
and accrued interest of the collateral is $37,100,710)
(cost $35,380,000) .................................... 35,380 35,380,000
------------
TOTAL INVESTMENTS (COST $171,423,694*) .............. 99.9% 171,423,694
OTHER ASSETS ........................................ 0.3% 484,534
LIABILITIES ......................................... (0.2%) (393,661)
----- ------------
NET ASSETS (BASED ON 171,526,234 SHARES, HAVING A PAR
VALUE OF $.001 PER SHARE) ........................ 100.0% $171,514,567
===== ============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE ($171,514,567 / 171,526,234 SHARES
OUTSTANDING) ..................................... $1.00
=====
- ----------------
<FN>
* Also cost for Federal income tax purposes.
** Variable Rate Obligations -- the interest rate shown is the rate as of June
30, 1995 and the maturity date is the shorter of the next interest readjustment
date or the date the principal amount can be recovered through demand.
</FN>
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
PCS CASH FUND, INC.
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS
JUNE 30, 1995
FACE
AMOUNT
(000) VALUE
----------- ------------
<S> <C> <C>
AGENCY OBLIGATIONS (36.8%)
Federal Home Loan Mortgage Corporation Discount Note
5.88%, 07/14/95 ....................................... $ 5,000 $ 4,989,383
Federal National Mortgage Association Discount Notes
5.86%, 07/06/95 ....................................... 10,000 9,991,861
5.70%, 09/07/95 ....................................... 5,000 4,946,167
5.81%, 09/08/95 ....................................... 5,000 4,944,321
-----------
TOTAL AGENCY OBLIGATIONS (COST $24,871,732) ................ 24,871,732
-----------
U.S. TREASURY OBLIGATIONS (21.8%)
U.S. TREASURY BILL
6.28%, 10/19/95 ....................................... 15,000 14,712,167
-----------
TOTAL U.S. TREASURY OBLIGATIONS (COST $14,712,167) ......... 14,712,167
-----------
VARIABLE RATE OBLIGATIONS (23.7%)
Federal National Mortgage Association Floating Rate Notes
5.97%, 07/03/95** ..................................... 5,000 4,999,708
5.58%, 07/05/95** ..................................... 5,000 5,000,000
5.58%, 07/05/95** ..................................... 6,000 6,000,000
-----------
TOTAL VARIABLE RATE OBLIGATIONS (COST $15,999,708) ......... 15,999,708
-----------
REPURCHASE AGREEMENT (17.7%)
Goldman Sachs & Co. 6.05%, 07/02/95, (Agreement dated
06/30/95, to be repurchased at $11,936,015 collateralized
by $8,310,000, U.S. Treasury Bonds 10.625%, due 08/15/15.
The total market value and accrued interest of the
collateral is $12,512,455)
(cost $11,930,000) ....................................... 11,930 11,930,000
-----------
</TABLE>
See accompanying notes to financial statements
4
<PAGE>
PCS CASH FUND, INC.
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
STATEMENT OF NET ASSETS (CONTINUED)
JUNE 30, 1995
VALUE
------------
<S> <C> <C>
TOTAL INVESTMENTS (COST $67,513,607*) ............... 100.0% $67,513,607
OTHER ASSETS ........................................ 0.3% 202,430
LIABILITIES ......................................... (0.3%) (211,479)
===== ===========
NET ASSETS (BASED ON 67,492,623 SHARES, HAVING A PAR
VALUE OF $.001 PER SHARE) ...................... 100.0% $67,504,558
===== ===========
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER
SHARE ($67,504,558 / 67,492,623 SHARES ......... $1.00
=====
- ---------------
<FN>
* Also cost for Federal income tax purposes.
** Variable Rate Obligations -- the interest rate shown is the rate as of June
30, 1995 and the maturity date is the shorter of the next interest
readjustment date or the date the principal amount can be recovered through
demand.
</FN>
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
PCS CASH FUND, INC.
<TABLE>
<CAPTION>
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1995
GOVERNMENT OBLIGATIONS
MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO
-------------- ----------------
<S> <C> <C>
INVESTMENT INCOME
Interest ......................................................................... $ 8,439,619 $ 11,276,200
----------- ------------
EXPENSES
Distribution fees (Note 2) ....................................................... 776,511 1,013,063
Investment advisory fees (Note 2) ................................................ 698,859 897,867
Administration fees (Note 2) ..................................................... 155,302 191,527
Transfer agent fees (Note 2) ..................................................... 41,708 11,331
Custodian fees (Note 2) .......................................................... 36,275 45,350
Registration fees ................................................................ 34,094 29,291
Directors' fees .................................................................. 27,250 27,250
Insurance expense ................................................................ 20,262 13,509
Audit fees ....................................................................... 19,500 19,500
Legal fees ....................................................................... 13,250 13,250
Printing fees .................................................................... 10,000 10,000
Miscellaneous expense ............................................................ 6,750 4,750
----------- ------------
1,839,761 2,276,688
LESS FEES VOLUNTARILY WAIVED (NOTE 2) ............................................... (317,800) (351,869)
----------- ------------
Total Expenses ................................................................... 1,521,961 1,924,819
----------- ------------
NET INVESTMENT INCOME ............................................................... 6,917,658 9,351,381
NET REALIZED GAIN (LOSS) ON INVESTMENTS ............................................. (11,667) 11,936
----------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................................ $ 6,905,991 $ 9,363,317
=========== ============
</TABLE>
See accompanying notes to financial statements
6
<PAGE>
PCS CASH FUND, INC.
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JUNE 30, 1995 JUNE 30, 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ........................................................ $ 6,917,658 $ 4,332,323
Net realized gain (loss) on investments ...................................... (11,667) 7,945
------------- -------------
Net increase in net assets resulting from operations ......................... 6,905,991 4,340,268
------------- -------------
Dividends to shareholders from:
Net investment income ($.0446 and $.0246 per share, respectively) ............ (6,917,658) (4,332,323)
Net realized gains ($.0001 and $.0000 per share, respectively) ............... (7,700) --
------------- -------------
Total dividends to shareholders ................................................. (6,925,358) (4,332,323)
------------- -------------
Increase (decrease) in net assets derived
from capital share transactions (Note 3) ...................................... (5,064,947) 20,280,942
------------- -------------
Total increase (decrease) in net assets ......................................... (5,084,314) 20,288,887
NET ASSETS:
Beginning of year ............................................................... 176,598,881 156,309,994
------------- -------------
End of year ..................................................................... $ 171,514,567 $ 176,598,881
============= =============
</TABLE>
See accompanying notes to financial statements
7
<PAGE>
PCS CASH FUND, INC.
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEAR FOR THE YEAR
ENDED ENDED
JUNE 30, 1995 JUNE 30, 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income ................................................................. $ 9,351,381 $ 2,341,763
Net realized gain on investments ...................................................... 11,936 112,478
------------- -------------
Net increase in net assets resulting from operations .................................. 9,363,317 2,454,241
------------- -------------
Dividends to shareholders from:
Net investment income ($.0448 and $.0243 per share, respectively)(9,351,381)(2,341,763)
Net realized gains ($.0000 and $.0011 per share, respectively) ........................ (572) (108,656)
------------- -------------
Total dividends to shareholders .......................................................... (9,351,953) (2,450,419)
------------- -------------
Increase (decrease) in net assets derived
from capital share transactions (Note 3) ............................................... (35,057,979) 811,251
------------- -------------
Total increase (decrease) in net assets .................................................. (35,046,615) 815,073
NET ASSETS:
Beginning of year ........................................................................ 102,551,173 101,736,100
------------- -------------
End of year .............................................................................. $ 67,504,558 $ 102,551,173
============= =============
</TABLE>
See accompanying notes to financial statements
8
<PAGE>
PCS CASH FUND, INC.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGH EACH PERIOD)
MONEY MARKET PORTFOLIO
FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR
ENDED ENDED ENDED ENDED ENDED
JUNE 30, 1995 JUNE 30, 1994 JUNE 30, 1993 JUNE 30, 1992 JUNE 30, 1991
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ................. 0.044 0.0246 0.0243 0.0402 0.0652
Net realized gains on investments ..... 0.0001 -- 0.0001 -- --
Less dividends to shareholders from:
Net investment income ................. (0.044 (0.0246) (0.0243) (0.0402) (0.0652)
Net realized gains .................... (0.0001) -- (0.0001) -- --
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD ........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========== ========== ========== ========== ==========
Total return ............................. 4.55% 2.49% 2.47% 4.11% 6.72%
Ratios of expenses to average net assets . 0.98%(b) 0.98%(b) 0.98%(b) 0.98%(b) 0.98%(b)
Ratios of net investment income to average
net assets ............................ 4.45%(b) 2.45%(b) 2.44%(b) 3.97%(b) 6.40%(b)
Net assets at end of period (000) ........ $ 171,515 $ 176,599 $ 156,310 $ 190,034 $ 140,594
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
FOR THE PERIOD
MARCH 12,1992
FOR THE YEAR FOR THE YEAR FOR THE YEAR (COMMENCEMENT
ENDED ENDED ENDED OF OPERATIONS)
JUNE 30, 1995 JUNE 30, 1994 JUNE 30,1993 TO JUNE 30, 1992
------------- ------------- ------------ -----------------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
---------- ---------- ---------- ----------
Income from investment operations:
Net investment income ........................... 0.0448 0.0243 0.0246 0.0094
Net realized gains on investments ............... -- 0.0011 0.0002 --
Less dividends to shareholders from:
Net investment income ........................... (0.0448) (0.0243) (0.0246) (0.0094)
Net realized gains .............................. -- (0.0011) (0.0002) --
--------- ---------- ---------- ----------
Net asset value, end of period ..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========== ========== ==========
Total return ....................................... 4.58% 2.45% 2.51% 0.94%(c)
Ratio of expenses to average net assets ............ 0.95%(b) 0.95%(b) 0.95%(b) 0.95%(a)(b)
Ratio of net investment income to average net assets 4.61%(b) 2.40%(b) 2.50%(b) 3.07%(a)(b)
Net assets at end of period (000) .................. $ 67,505 $ 102,551 $ 101,736 $ 269,627
- ---------------
<FN>
(a) Annualized.
(b) Without the voluntary waiver of advisory and distribution fees, the ratios
of expenses to average net assets would have been 1.18%, 1.19%, 1.20%, 1.27%
and 1.27% annualized, for the Money Market Portfolio and 1.12%, 1.22%, 1.19%
and 1.29% annualized for the Government Obligations Money Market Portfolio.
The ratios of net investment income to average net assets would have been
4.25%, 2.24%, 2.22%, 3.68% and 6.11% annualized, for the Money Market
Portfolio and 4.44%, 2.13%, 2.26% and 2.73% annualized for the Government
Obligations Money Market Portfolio.
(c) Not annualized. Total return, if on annualized basis, would have been 3.16%
for the Government Obligations Money Market Portfolio.
</FN>
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
PCS CASH FUND, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1995
NOTE 1-- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PCS Cash Fund, Inc. (the "Fund"), an open-end, diversified management
investment company, was incorporated in Maryland on January 5, 1989, and is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940.
The Fund is authorized to issue 10 billion shares, $.001 par value per
share, of which 1 billion are classified in each of the following three
portfolios: PCS Money Market Portfolio, PCS Tax-Free Money Market Portfolio, and
PCS Government Obligations Money Market Portfolio. There are currently no shares
outstanding in the Tax-Free Money Market Portfolio.
A) SECURITY VALUATION--Portfolio securities are valued under the
amortized cost method, which approximates current market value. Under this
method, securities are valued at cost when purchased and, thereafter, a
constant proportionate amortization of any discount or premium is recorded
until maturity of the security. Regular review and monitoring of the
valuation is performed in an attempt to avoid dilution or other unfair
results to shareholders. The Fund seeks to maintain net asset value per
share at $1.00. INVESTMENT IN SHARES OF THE FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE FUND WILL
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
B) SECURITY TRANSACTIONS AND INVESTMENT INCOME--Security transactions
are accounted for on the trade date. The cost of investments sold is
determined by use of the specific identification method for both financial
reporting and income tax purposes. Interest income is recorded on the
accrual basis.
C) DIVIDENDS TO SHAREHOLDERS--Dividends from net investment income are
declared daily and paid monthly. Any net realized capital gains will be
distributed at least annually.
D) FEDERAL INCOME TAXES--The Fund intends to continue to qualify for
the tax treatment applicable to regulated investment companies under the
Internal Revenue Code and make the requisite distributions to its
shareholders which will be sufficient to relieve it from Federal income and
Federal excise taxes. Therefore, no provision has been recorded for Federal
income or Federal excise taxes.
E) REPURCHASE AGREEMENTS--The Fund may purchase money market
instruments from financial institutions, such as banks and non-bank
dealers, subject to the seller's agreement to repurchase them at an agreed
upon date and price (repurchase agreements). Collateral for repurchase
agreements may have longer maturities than the maximum permissible
remaining maturity of portfolio investments. The seller will be required on
a daily basis to maintain the value of the securities subject to the
agreement at not less than the repurchase price, marked-to-market daily.
The agreements are conditioned upon the collateral being deposited under
the Federal Reserve book-entry system or with the Fund's custodian or a
third party sub-custodian.
10
<PAGE>
PCS CASH FUND, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995 NOTE
2--TRANSACTIONS WITH AFFILIATES AND OTHERS
The Fund has entered into an investment advisory agreement with Morgan
Stanley Asset Management Inc. (the "Advisor"), a wholly owned subsidiary of
Morgan Stanley Group Inc. The Fund has also entered into an Administration and
Accounting Services Agreement with PFPC Inc., a wholly owned subsidiary of PNC
Bank Corp., and a distribution agreement with Morgan Stanley & Co. Inc. PNC Bank
Corp. serves as custodian for each of the Fund's portfolios.PFPC Inc. also
serves as the Fund's transfer agent.
For the advisory services provided and expenses assumed by it, the Advisor
is entitled to receive from each Portfolio a fee, computed daily and payable
monthly, at an annual rate of .45% of the first $250 million of the Portfolio's
daily net assets, .40% of the next $250 million of the Portfolio's daily net
assets and .35% of the Portfolio's daily net assets in excess of $500 million.
The Advisor may, at its discretion from time to time, waive voluntarily all or
any portion of its advisory fee or reimburse the Portfolio for a portion of the
expenses of its operations. For the year ended June 30, 1995, advisory fees,
(net of voluntary fee waivers), for the Money Market Portfolio were $611,754 and
$897,867 for the Government Obligations Money Market Portfolio.
As required by various state regulations in which the Fund is registered to
sell shares, the Advisor will reimburse each Portfolio if and to the extent that
the aggregate operating expenses of the Portfolio exceed applicable state limits
for the fiscal year. Currently, the most restrictive of such applicable limits
is 2.5% of the first $30 million of average annual net assets, 2.0% of the next
$70 million of average annual net assets, and 1.5% of the remaining average
annual net assets. Certain expenses such as brokerage commissions, taxes,
interest, and extraordinary items are excluded from this limitation. No such
reimbursements were required for the year ended June 30, 1995.
For administration services provided, PFPC Inc. is entitled to receive from
each Portfolio a fee, computed daily and payable monthly, at an annual rate of
.10% of the first $200 million daily net assets, .075% of the next $200 million
of daily net assets, .05% of the next $200 million of daily net assets and .03%
of the daily assets in excess of $600 million.
The Fund has adopted a Plan of Distribution and pursuant thereto has
entered into an agreement under which the distributor, Morgan Stanley & Co.
Inc., (the "Distributor") is entitled to receive from each Portfolio
compensation of its distribution costs at an annual rate of up to .50% of daily
net assets. The Distributor may at its discretion from time to time, waive
voluntarily all or any portion of its distribution fee. For the year ended June
30, 1995, distribution fees, net of voluntary fee waivers, were $545,816 for the
Money Market Portfolio and $661,194 for the Government Obligations Money Market
Portfolio.
11
<PAGE>
PCS CASH FUND, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
JUNE 30, 1995
NOTE 3 -- CAPITAL STOCK
Transactions in capital stock for each Portfolio were as follows:
<TABLE>
<CAPTION>
MONEY MARKET PORTFOLIO
For the Year For the Year
Ended Ended
June 30, 1995 June 30, 1994
----------------------------------- -----------------------------------
Shares Value Shares Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Shares sold ................................ 1,261,410,987 $ 1,261,410,987 1,735,883,817 $ 1,735,883,817
Shares issued in reinvestment of dividends . 6,579,514 6,579,514 4,016,368 4,016,368
Shares redeemed ............................ (1,273,055,448) (1,273,055,448) (1,719,619,243) (1,719,619,243)
--------------- --------------- --------------- ---------------
Net increase (decrease) .................... (5,064,947) $ (5,064,947) 20,280,942 $ 20,280,942
=============== =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS MONEY MARKET PORTFOLIO
For the Year For the Year
Ended Ended
June 30, 1995 June 30, 1994
---------------------------------- ----------------------------------
Shares Value Shares Value
------ ----- ------ -----
<S> <C> <C> <C> <C>
Shares sold ................................ 2,017,389,099 $ 2,017,389,099 1,209,126,057 $ 1,209,126,057
Shares issued in reinvestment of dividends . 9,053,037 9,053,037 2,244,969 2,244,969
Shares redeemed ............................ (2,061,500,115) (2,061,500,115) (1,210,559,775) (1,210,559,775)
--------------- --------------- --------------- ---------------
Net increase (decrease) .................... (35,057,979) $ (35,057,979) 811,251 $ 811,251
=============== =============== =============== ===============
</TABLE>
NOTE 4 -- NET ASSETS
At June 30, 1995, net assets consisted of the following:
<TABLE>
<CAPTION>
Money Market Government Obligations
Portfolio Money Market Portfolio
------------------ ------------------------
<S> <C> <C>
Capital Paid-in............................................ $171,526,234 $67,492,622
Accumulated Net Realized Gain (Loss) on Investments........ (11,667) 11,936
------------ -----------
$171,514,567 $67,504,558
============ ===========
</TABLE>
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of The PCS Cash Fund, Inc.:
We have audited the accompanying statements of net assets of the PCS Cash Fund,
Inc. (Money Market and Government Obligations Money Market Portfolios), as of
June 30, 1995 and the related statements of operations for the year then ended,
the statements of changes in net assets for each of the periods in the two years
then ended, and the financial highlights for each of the periods presented.
These financial statements and financial highlights are the responsiblity of the
Fund's management. Our responsiblity 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 confirmation of investments held by the
custodian as of June 30, 1995. 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 financial highlights referred to
above present fairly, in all material respects, the financial position of the
PCS Cash Fund, Inc. (Money Market and Government Obligations Money Market
Portfolios) as of June 30, 1995 and the results of their operations for the year
then ended, the changes in their net assets for each of the periods in the two
years then ended and the financial highlights for each of the periods presented,
in conformity with generally accepted accounting principles.
Coopers & Lybrand L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
July 28, 1995
13
<PAGE>
PCS CASH FUND, INC.
To Our Shareholders:
A Special Meeting of Shareholders of the PCS Cash Fund, Inc. (the "Fund") was
held on June 28, 1995 to consider and act upon a proposal to elect a Board of
Directors.
At the meeting, nine Directors were elected to hold office until their
successors are duly elected and qualified. The six new Directors are Barton M.
Biggs, John D. Barrett II, Andrew McNally IV, Samuel T. Reeves, Fergus Reid and
Frederick O. Robertshaw. The three other Directors who are currently members of
the Board of Directors, were elected by shareholders at a Special Meeting held
on April 14, 1992. They are Gerard E. Jones, Warren J. Olsen and Frederick B.
Whittemore.
As of record date May 10, 1995, there were 308,477,864 shares outstanding in the
PCS Cash Fund, Inc. of which 211,678,822 or 68.62% were voted at the June 28,
1995 Special Meeting of shareholders. The results of the vote were the same for
each Director elected. Each Director had 204,045,730 votes for and 7,633,092
votes withheld.
14
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INVESTMENT ADVISOR
Morgan Stanley Asset Management Inc.
New York, New York
DISTRIBUTOR
Morgan Stanley & Co. Incorporated
New York, New York
CUSTODIAN
PNC Bank
Philadelphia, Pennsylvania
ADMINISTRATOR/TRANSFER AGENT
PFPC Inc.
Wilmington, Delaware
COUNSEL
Morgan, Lewis & Bockius
Philadelphia, Pennsylvania
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand L.L.P.
Philadelphia, Pennsylvania
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