ANNUAL
REPORT
JUNE 30, 1996
A CASH MANAGEMENT INVESTMENT
CAPITAL CASH
MANAGEMENT TRUST
{Capital Cash Management Trust Logo}
{Aquila Logo}
ONE OF THE
AQUILASM GROUP OF FUNDS
CAPITAL CASH MANAGEMENT TRUST
ANNUAL REPORT
July 17, 1996
Dear Investor:
We are pleased to provide you with the Annual Report for Capital Cash
Management Trust for the fiscal year ended June 30, 1996.
Of most importance, we note that the economic climate and the Federal
Reserve's monetary policy continued to play a vital role in the short-term
debt markets during the Trust's current report period.
As 1995 drew to a close and 1996 began, it appeared that the U.S.
economy was losing momentum. During this period, consumers were hesitant to
spend, heavily laden with personal debt and ever mindful of uncertainty in
the job market as businesses continued to trim payrolls. With inflationary
pressures well subdued, these signs of economic weakness led the Federal
Reserve Board to follow a more accommodative monetary policy. Indeed, in an
effort to keep the economy from falling into a recession, the Fed eased
short-term interest rates during the final quarter of 1995. And, as most
recent as January, the Fed took out a monetary insurance policy in the form
of an additional cut in rates and implied at the time that it was prepared to
do more if needed.
However, the economic climate appears to have changed during recent
months as various parts of the economy have shown signs of renewed vigor. As
such, the financial markets have become roiled, fearful that a stronger
economy will give way to yet higher levels of inflation down the road. As a
result, both short and long-term interest rates have increased to higher
levels at the end of this current report period even though the Fed has, to
date, withheld from initiating any interest rate changes.
While the securities markets remain volatile, Capital Cash Management
Trust continues to provide competitive returns to alternative short-term
investment opportunities without wavering from its conservative investment
approach. At June 30, 1996, the end of the annual report period, the Trust's
seven-day yield was 4.92%.
We should emphasize that this investment approach entails considerable
vigilance exercised by the Trust's Investment Adviser, STCM Management
Company, Inc., in the determination and selection of all obligations held in
the Trust's investment portfolio. You, as a shareholder, can take great
comfort in knowing that investments in the Trust's portfolio are placed in
securities having the highest quality standards and minimal credit risks as
the Adviser strives to achieve maximum safety for your cash reserves.
All associated with Capital Cash Management Trust wish to thank you for
your continued support and confidence.
We look forward to serving your cash management needs during the rest
of 1996 and for many years to come.
Sincerely,
/s/ Lacy B. Herrmann
Lacy B. Herrmann
President and Chairman
of the Board of Trustees
/s/ Charles E. Childs, III
Charles E. Childs, III
Senior Vice President and
Portfolio Manager
<PAGE>
KPMG Peat Marwick LLP
Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
To the Board of Trustees and Shareholders of
Capital Cash Management Trust:
We have audited the accompanying statement of assets and liabilities of
Capital Cash Management Trust, including the statement of investments, as of
June 30, 1996, the related statement of operations for the year then ended,
the statements of changes in net assets for each of the years in the two-year
period then ended, and the financial highlights for each of the years in the
five-year period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 1996, by correspondence with the custodian.
An audit also includes assessing the accounting principles used, and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe 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 Capital Cash Management Trust as of June 30, 1996, the results of
its operations for the year then ended, the changes in its net assets for
each of the years in the two-year period then ended, and the financial
highlights for each of the years in the five-year period then ended, in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
August 9, 1996
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF INVESTMENTS
JUNE 30, 1996
<TABLE>
<CAPTION>
Face Value
Amount
<C> <S> <C>
COMMERCIAL PAPER (37.6%)
Automotive Finance (4.7%)
$83,000 Ford Motor Credit Corp., 5.260%, 07/03/96 $ 82,976
Finance (19.3%)
76,000 American General Finance Corp., 5.390%, 08/26/96 75,363
90,000 Ciesco L.P., 5.280%, 07/09/96 89,894
85,000 Household Finance Corp., 5.280%, 07/24/96 84,713
92,000 Norwest Financial Inc., 5.310%, 07/26/96 91,661
341,631
Insurance (3.3%)
58,000 Prudential Funding Corp., 5.360%, 08/16/96 57,603
Pharmaceuticals (5.1%)
90,000 Sandoz Corp., 5.280%, 07/02/96 89,987
Travel & Leisure Services (5.2%)
92,000 American Express Credit Corp., 5.310%, 07/31/96 91,593
Total Commercial Paper 663,790
U.S. GOVERNMENT AGENCY DISCOUNT NOTES (61.5%)
35,000 Federal Farm Credit Bank, 5.250%, 07/02/96 34,995
25,000 Federal Farm Credit Bank, 5.170%, 07/11/96 24,964
85,000 Federal Farm Credit Bank, 5.250%, 08/02/96 84,603
65,000 Federal Farm Credit Bank, 5.220%, 08/14/96 64,585
55,000 Federal Home Loan Mortgage Corporation, 5.250%,
07/01/96 55,000
70,000 Federal Home Loan Mortgage Corporation, 5.250%,
07/15/96 69,857
90,000 Federal Home Loan Mortgage Corporation, 5.170%,
07/16/96 89,806
40,000 Federal Home Loan Mortgage Corporation, 5.220%,
07/18/96 39,901
60,000 Federa Home Loan Mortgage Corporation, 5.230%,
07/22/96 59,817
65,000 Federal Home Loan Mortgage Corporation, 5.230%,
07/29/96 64,736
75,000 Federal Home Loan Mortgage Corporation, 5.280%,
08/05/96 74,615
105,000 Federal Home Loan Mortgage Corporation, 5.290%,
08/09/96 104,398
40,000 Federal Home Loan Mortgage Corporation, 5.210%,
08/21/96 39,705
45,000 Federal National Mortgage Association, 5.210%,
07/12/96 44,928
60,000 Federal National Mortgage Association, 5.180%,
07/18/96 59,853
<PAGE>
40,000 Federal National Mortgage Association, 5.180%,
07/19/96 39,896
80,000 Federal National Mortgage Association, 5.320%,
08/23/96 79,374
55,000 Federal National Mortgage Association,
5.340%, 09/24/96 54,307
Total U.S. Government Agency Discount Notes 1,085,340
Total Investments - 99.1% (Cost-$1,749,130 *) 1,749,130
Assets in excess of other liabilities - .9% 15,805
Net Assets -100% $ 1,764,935
<FN>
(*) Cost for Federal income tax purposes is identical.
</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
<TABLE>
<S> <C>
ASSETS
Investments at value (cost - $1,749,130) $ 1,749,130
Cash 1,491
Due from Administrator for reimbursement of expenses 33,267
Other assets 5,314
Total assets 1,789,202
LIABILITIES
Accrued expenses 16,826
Dividends payable 7,441
Total liabilities 24,267
NET ASSETS (equivalent to $1.00 per share on 1,764,935
shares outstanding) $ 1,764,935
Net Assets consist of:
Capital Stock - Authorized an unlimited number of
shares, par value $.0 1 per share $ 17,649
Additional paid-in capital 1,747,286
$ 1,764,935
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest Income $ 102,032
Expenses:
Investment Adviser fees (note B) $ 3,673
Administrator fees (note B) 2,755
Trustees' fees and expenses 25,452
Audit and accounting fees 15,550
Registration fees and dues 12,085
Legal fees 10,717
Shareholders' reports and proxy statements 8,563
Transfer and shareholder servicing agent fees 8,259
Custodian fees (note D) 7,923
Miscellaneous 10,411
105,388
Investment Advisory fees waived (note B) (3,673)
Administration fees waived (note B) (2,755)
Reimbursement of expenses by Administrator
(note B) (91,492)
Expenses paid indirectly (note D) (114)
Net expenses 7,354
Net investment income $ 94,678
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended June 30
1996 1995
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income $ 94,678 $ 98,208
Dividends to shareholders ($0.0518 and $0.0497
per share, respectively) (94,678) (98,208)
Change in net assets derived from investment
activities _ _
<CAPTION>
FROM CAPITAL SHARE TRANSACTIONS:
SHARES
Year Ended June 30
1996 1995
<S> <C> <C> <C> <C>
Proceeds from shares sold 1,793,543 2,223,008 1,793,543 2,223,008
Reinvested dividends 92,994 88,539 92,994 88,539
Cost of shares redeemed (1,781,950) (2,364,585) (1,781,950) (2,364,585)
Change in net assets from
capital share transactions 104,587 (53,038) 104,587 (53,038)
Change in net net assets 104,587 (53,038)
NET ASSETS:
Beginning of period 1,660,348 1,713,386
End of period $ 1,764,935 $ 1,660,348
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
NOTES TO FINANCIAL STATEMENTS
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Capital Cash Management Trust (the "Trust") is a Massachusetts business
trust established on August 20, 1976 as a successor to the money-market fund,
the STCM Corporation, which commenced operations on July 8, 1974.
The following is a summary of significant accounting policies followed by
the Trust in the preparation of its financial statements. The policies are in
conformity with generally accepted accounting principles for investment
companies.
(1) PORTFOLIO VALUATION: The Trust's portfolio securities are valued by
the amortized cost method permitted in accordance with Rule 2a-7 under
the Investment Company Act of 1940 (the "1940 Act"), which, after
considering accrued interest thereon, approximates market. Under this
method, a portfolio security is valued at cost adjusted for
amortization of premiums and accretion of discounts. Amortization of
premiums and accretion of discounts are included in interest income.
(2) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities
transactions are recorded on the trade date. Realized gains and losses
from securities transactions are reported on the identified cost basis.
Interest income is recorded daily on the accrual basis and is adjusted
for amortization of premiums and accretion of discounts as discussed
in the preceding paragraph.
(3) FEDERAL INCOME TAXES: It is the policy of the Trust to qualify as a
regulated investment company by complying with the provisions of the
Internal Revenue Code applicable to certain investment companies. The
Trust intends to make distributions of income and securities profits
sufficient to relieve it from all, or substantially all, Federal
income and excise taxes.
(4) REPURCHASE AGREEMENTS: It is the Trust's policy to monitor closely
the creditworthiness of all firms with which it enters into repurchase
agreements, and to take possession of, or otherwise perfect its
security interest in, securities purchased under agreements to resell.
The securities purchased under agreements to resell are marked to
market every business day so that the value of the "collateral" is at
least equal to the value of the "loan" (repurchase agreements being
defined as "loans" in the 1940 Act), including the accrued interest
earned thereon, plus sufficient additional market value as is
considered necessary to provide a margin of safety.
(5) USE OF ESTIMATES: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the
reported amounts of increases and decreases in net assets from
operations during the reporting period. Actual results could differ
from those estimates.
NOTE B - MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES:
STCM Management Company, Inc. (the "Adviser") became Investment Adviser
to the Trust in February, 1992. In this role, under an Investment Advisory
Agreement, the Adviser supervises the Trust's investments and provides
various services for which they receive a fee which is payable monthly and
computed on the net assets of the Trust at the annual rate of 0.20% of the
Trust's average daily net assets. The Trust also has an Administration
Agreement with Aquila Management Corporation (the "Administrator") to provide
all administrative services to the Trust other than those relating to the
investment portfolio and the accounting records. The Administrator receives a
fee for such services which is payable monthly and computed on the net assets
of the Trust at the annual rate of 0.15% of the Trust's average daily net
assets. Details regarding the services provided by the Adviser and the
Administrator are provided in the Trust's Prospectus and Statement of
Additional Information.
<PAGE>
Certain states impose limitations on expenses. In order to comply with
what is believed to be the most restrictive of these limitations, the Adviser
and the Administrator each has agreed that the above fees shall be reduced,
but not below zero, by an amount equal to its proportionate share (determined
on the basis of the respective fees computed as described above) of the
amount, if any, by which the total expenses of the Trust in any fiscal year,
exclusive of taxes, interest, and brokerage fees, shall exceed the lesser of
(i) 1.5% of the first $30 million of average annual net assets of the Trust
plus 1% of its average annual net assets in excess of $30 million, or (ii)
25% of the Trust's total annual investment income. No such reduction in fees
was required during the year ended June 30, 1996 inasmuch as the Adviser and
the Administrator voluntarily waived their entire fees in the amount of
$3,673 and $2,755 respectively. In addition, in order to comply with this
expense limitation, the Administrator reimbursed expenses in the amount of
$73,338. Also, the Administrator has undertaken to waive fees or reimburse
the Trust to the extent that annual expenses exceed 0.60 of 1% of average net
assets in any fiscal year and therefore reimbursed expenses in the additional
amount of $14,519. Further, the Administrator voluntarily reimbursed expenses
of $3,635, bringing the total expense reimbursement for the year ended June
30, 1996 to $91,492.
Under a Distribution Agreement dated February 28, 1992, Aquila
Distributors, Inc. (the "Distributor") serves as the exclusive distributor of
the Trust's shares. No compensation or fees are paid to the Distributor for
such share distribution.
NOTE C - DISTRIBUTIONS:
The Trust declares dividends daily from net investment income and makes
payment monthly in additional shares at the net asset value per share or in
cash, at the shareholder's option.
NOTE D - CUSTODIAN FEES:
The Trust has negotiated an expense offset arrangement with its custodian
wherein it receives credit toward the reduction of custodian fees whenever
there are uninvested cash balances. During the year ended June 30, 1996, the
Trust's custodian fees amounted to $7,923 of which $114 was offset by such
credits. The Trust could have invested its cash balances in an
income-producing asset if it had not agreed to a reduction in fees under the
expense offset arrangement with the custodian.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For a share outstanding throughout each period
Year ended June 30,
1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from Investment
Operations:
Net investment income 0.0518 0.0497 0.0309 0.0310 0.0448
Less Distributions:
Dividends from net
investment income (0.0518) (0.0497) (0.0309) (0.0310) (0.0448)
Net Asset Value, End of
Period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Total Return 5.29% 5.09% 3.14% 3.14% 4.57%
Ratios/Supplemental Data
Net Assets, End of Period
(in thousands) $1,765 $1,660 $1,713 $1,744 $2,088
Ratio of Expenses to
Average Net Assets 0.40% 0.40% 0.28% 0.09% 0.10%
Ratio of Net Investment
Income to Average Net
Assets 5.17% 5.00% 3.08% 3.11% 4.52%
<CAPTION>
Net investment income (loss) per share and the ratios of income and expenses
to average net assets without the Adviser's and Administrator's voluntary
waiver of fees, the Administrator's expense reimbursement and the expense
offset in custodian fees for uninvested cash balances would have been:
<S> <C> <C> <C> <C> <C>
Net Investment Income
(loss) ($0.0018) $0.0038 ($0.0137) ($0.0221) ($0.0104)
Ratio of Expenses to
Average Net Assets 5.75% 5.02% 4.73% 5.41% 5.68%
Ratio of Net Investment
Income (loss) to Average
Net Assets (0.18%) 0.38% (1.37%) (2.21%) (1.05%)
</TABLE>
<PAGE>
REPORT OF THE ANNUAL MEETING OF SHAREHOLDERS (UNAUDITED)
The Annual Meeting of Shareholders of Capital Cash Management Trust
(the "Trust") was held on June 26, 1996.* At the meeting, the following
matters were submitted to a shareholder vote and approved by a vote of a
majority of the Trust's outstanding voting securities:
(i) the election of Lacy B. Herrmann, Theodore T. Mason, Paul Y. Clinton,
Robert L. Krakoff, Anne J. Mills, and Cornelius T. Ryan as Trustees to
hold office until the next annual meeting of the Trust's shareholders
or until his or her successor is duly elected (each Trustee received at
least 995,534 affirmative votes (97.84%); no more than 22,001 votes
were withheld for any Trustee (2.16%)), and
(ii) the ratification of the selection of KPMG Peat Marwick LLP as the
Trust's independent auditors for the fiscal year ending June 30, 1996
(votes for: 1,001,346 (98.41%); votes against: 0.0 (0.00%);
abstentions: 16,189 (1.59%); broker non-votes: 0.0 (0.00%)).
___________
* On the record date for this meeting, 1,813,441 shares of the Trust were
outstanding and entitled to vote. The holders of 1,017,535 shares (56.11%)
entitled to vote were present in person or by proxy at the meeting.
FEDERAL TAX STATUS OF DIVIDENDS (UNAUDITED)
This information is presented in order to comply with a requirement of
the Internal Revenue Code AND NO CURRENT ACTION ON THE PART OF SHAREHOLDERS
IS REQUIRED.
For the fiscal year ended June 30, 1996, the total amount of dividends
paid by Capital Cash Management Trust was ordinary dividend income.
Prior to January 31, 1996, shareholders were mailed IRS Form 1099-DIV
which contained information on the status of distributions paid for the 1995
CALENDAR YEAR.
<PAGE>
INVESTMENT ADVISER
STCM MANAGEMENT COMPANY, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017
ADMINISTRATOR
AQUILA MANAGEMENT CORPORATION
380 Madison Avenue, Suite 2300
New York, New York 10017
DISTRIBUTOR
AQUILA DISTRIBUTORS, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017
TRUSTEES
Lacy B. Herrmann, Chairman
Theodore T. Mason, Vice Chairman
Paul Y. Clinton
Robert L. Krakoff
Anne J. Mills
Cornelius T. Ryan
OFFICERS
Lacy B. Herrmann, President
Charles E. Childs, III, Senior Vice President
John W. Cody, Vice President
Diana P. Herrmann, Vice President
John M. Herndon, Vice President & Assistant Secretary
Rose F. Marotta, Chief Financial Officer
Richard F. West, Treasurer
Edward M.W. Hines, Secretary
Patricia A. Craven, Assistant Secretary
TRANSFER AND SHAREHOLDER SERVICING AGENT
ADMINISTRATIVE DATA
MANAGEMENT CORP.
581 Main Street
Woodbridge, New Jersey 07095-1198
CUSTODIAN
BANK ONE TRUST COMPANY, N.A.
100 East Broad Street
Columbus, Ohio 43271
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
345 Park Avenue
New York, New York 10154
Further information is contained in the Prospectus,
which must precede or accompany this report.
