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
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.
ANNUAL
REPORT
JUNE 30, 1997
A CASH MANAGEMENT INVESTMENT
CAPITAL CASH
MANAGEMENT TRUST
[Logo of CCMT: triangle which contains a wave pattern in the left half and a
grain of wheat in the right half and beneath this triangle are the three
words: stability * liquidity * yield]
[Logo of Aquila Group of Funds: an eagle's head]
ONE OF THE
AQUILASM GROUP OF FUNDS
[Logo of CCMT: triangle which contains a wave pattern in the left half and a
grain of wheat in the right half and beneath this triangle are the three
words: stability * liquidity * yield]
CAPITAL CASH MANAGEMENT TRUST
ANNUAL REPORT
August 8, 1997
Dear Investor:
We are pleased to provide you with the Annual Report for Capital Cash
Management Trust for the fiscal year ended June 30, 1997.
The economic climate and the Federal Reserve's monetary policy once again had
an impact on the short-term debt markets during the Trust's current report
period.
The Federal Reserve voted on March 25th to raise short-term interest rates
for the first time in more than two years. The central bank took one of the
smallest steps it could, raising the more important of the two short-term
rates it controls - the Federal Funds target rate for overnight loans between
banks - by 25 basis points, to 5.50%. The Federal Reserve was concerned that
with a strong economy and low unemployment, inflation would worsen as the
increased stress on labor markets would potentionally put additional upward
pressure on wages and ultimately prices.
However, it appears that the burst in demand during the first quarter
moderated leaving little evidence to justify further Fed interest rate hikes.
Indeed, most recently, the Federal Reserve decided to leave short-term
interest rates unchanged, betting that the economy could continue to enjoy
low unemployment without inflation.
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, 1997, the end of the annual report period, the Trust's seven-day
yield was 4.97%. As of this writing, the seven-day yield has increased to
5.05%.
We should emphasize that safety of the principal value of your investment and
ready liquidity have always been, and continue to be, two of the main goals
in the management of investors' assets in Capital Cash Management Trust.
Yield has always been a consideration in our management of your cash
reserves. However, it has also always been the very strongest belief of the
Trust's Board of Trustees and management that investors' cash reserves is one
area with which one does not take any undue risks in order to seek a
marginally higher rate of return.
Looking forward, we are optimistic that Capital Cash Management Trust will
continue to provide investors attractive yields compared to alternative money
market investments. Through alertness to market opportunities, the Trust can
produce a highly competitive return for its investors without compromising
safety.
All associated with Capital Cash Management Trust wish to thank you for your
continued support and confidence. You can be assured that we will do
everything possible to merit this trust and confidence.
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, 1997, 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, 1997, by correspondence with the custodian.
An audit also includes assessing the accounting principles used, and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe 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, 1997, 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 8, 1997
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF INVESTMENTS
JUNE 30, 1997
<TABLE>
<CAPTION>
FACE
AMOUNT COMMERCIAL PAPER (18.9%) VALUE
<C> <S> <C>
Automotive (3.8%)
$ 54,000 Ford Motor Credit Corp., 5.48%, 07/01/97 $ 54,000
Finance (4.9%)
70,000 American General Finance Corp., 5.45%, 07/28/97 69,714
Insurance (5.5%)
79,000 Prudential Funding Corp., 5.52%, 07/16/97 78,818
Travel & Leisure Services (4.7%)
68,000 American Express Credit Corp., 5.55%, 08/01/97 67,675
Total Commercial Paper 270,207
U.S. GOVERNMENT AGENCY DISCOUNT NOTES (78.7%)
20,000 Federal Farm Credit Bank, 5.42%, 09/15/97 19,771
75,000 Federal Farm Credit Bank, 5.45%, 07/09/97 74,910
75,000 Federal Farm Credit Bank, 5.47%, 07/14/97 74,852
100,000 Federal Home Loan Banks, 5.44%, 07/24/97 99,652
35,000 Federal Home Loan Mortgage Corporation, 5.42%, 09/02/97 34,668
60,000 Federal Home Loan Mortgage Corporation, 5.42%, 08/06/97 59,675
65,000 Federal Home Loan Mortgage Corporation, 5.43%, 09/02/97 64,382
70,000 Federal Home Loan Mortgage Corporation, 5.46%, 07/18/97 69,820
80,000 Federal Home Loan Mortgage Corporation, 5.46%, 07/21/97 79,757
80,000 Federal Home Loan Mortgage Corporation, 5.485%, 07/25/97 79,707
70,000 Federal National Mortgage Association, 5.39%, 08/19/97 69,487
45,000 Federal National Mortgage Association, 5.43%, 08/04/97 44,769
75,000 Federal National Mortgage Association, 5.43%, 07/29/97 74,683
95,000 Federal National Mortgage Association, 5.45%, 07/03/97 94,971
75,000 Federal National Mortgage Association, 5.495%, 07/31/97 74,657
<PAGE>
65,000 Federal National Mortgage Association, 5.50%, 08/12/97 64,583
50,000 Federal National Mortgage Association, 5.43%, 09/03/97 49,517
Total U.S. Government Agency Discount Notes 1,129,861
Total Investments (cost $1,400,068*) 97.6% 1,400,068
Other assets in excess of liabilities 2.4 35,088
Net Assets 100.0% $ 1,435,156
<FN> * Cost for Federal tax purposes is identical.</FN>
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
<TABLE>
<S> <C>
ASSETS
Investments at value (cost - $1,400,068) $ 1,400,068
Cash 699
Due from Administrator for reimbursement of expenses (note 2) 51,387
Other assets 4,017
Total assets 1,456,171
LIABILITIES
Accrued expenses 20,849
Dividends payable 166
Total liabilities 21,015
NET ASSETS (equivalent to $1.00 per share on 1,435,156 shares
outstanding) $ 1,435,156
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares, par
value $.01 per share $ 14,352
Additional paid-in capital 1,420,804
$ 1,435,156
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED JUNE 30, 1997
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest Income $ 90,640
Expenses:
Investment Adviser fees (note 2) $ 3,423
Administrator fees (note 2) 2,568
Trustees' fees and expenses 23,306
Legal fees 17,864
Audit and accounting fees 15,550
Transfer and shareholder servicing agent fees 11,222
Shareholders' reports and proxy statements 10,827
Registration fees and dues 8,591
Custodian fees (note 4) 8,483
Miscellaneous 9,244
111,078
Investment Advisory fees waived (note 2) (3,423)
Administration fees waived (note 2) (2,568)
Reimbursement of expenses by Administrator (note 2) (98,121)
Expenses paid indirectly (note 4) (109)
Net expenses 6,857
Net investment income $ 83,783
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Year Ended June 30,
1997 1996
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income $ 83,783 $ 94,678
Dividends to shareholders ($0.0489
and $0.0518 per share, respectively) (83,783) (94,678)
Change in net assets derived from
investment activities - -
<CAPTION>
FROM CAPITAL SHARE TRANSACTIONS:
SHARES
Year Ended June 30,
1997 1996
<S> <C> <C> <C> <C>
Proceeds from shares sold 1,446,854 1,793,543 1,446,854 1,793,543
Reinvested dividends 83,694 92,994 83,694 92,994
Cost of shares redeemed (1,860,327) (1,781,950) (1,860,327) (1,781,950)
Change in net assets from
capital share transactions (329,779) 104,587 (329,779) 104,587
Change in net net assets (329,779) 104,587
NET ASSETS:
Beginning of period 1,764,935 1,660,348
End of period $ 1,435,156 $ 1,764,935
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
NOTES TO FINANCIAL STATEMENTS
1. 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.
a) 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.
b) 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.
c) 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.
d) 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.
e) 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.
2. 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
<PAGE>
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.
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 year ended June 30, 1997 inasmuch as
the Adviser and the Administrator voluntarily waived their entire fees in the
amount of $3,423 and $2,568, respectively. In addition, in order to comply
with this expense limitation, the Administrator reimbursed expenses in the
amount of $82,435. 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 $12,390. Further, the Administrator voluntarily
reimbursed expenses of $3,296, bringing the total expense reimbursement for
the year to $98,121. Of this amount, $46,734 was paid prior to June 30, 1997
and the balance of $51,387 was paid in July and early August, 1997.
Under a Distribution Agreement, 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.
3. 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.
4. 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, 1997, the
Trust's custodian fees amounted to $8,483 of which $109 was offset by such
credits. It is the general intention of the Trust to invest, to the extent
practicable, some or all of cash balances in income-producing assets rather
than leave cash on deposit with the custodian.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
For a share outstanding throughout each period
YEAR ENDED JUNE 30,
1997 1996 1995 1994 1993
<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 0.0489 0.0518 0.0497 0.0309 0.0310
Less Distributions:
Dividends from net
investment income (0.0489) (0.0518) (0.0497) (0.0309) (0.0310)
Net Asset Value, End of
Period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Total Return 5.00% 5.29% 5.09% 3.14% 3.14%
Ratios/Supplemental Data
Net Assets, End of Period
(in thousands) $1,435 $1,765 $1,660 $1,713 $1,744
Ratio of Expenses to
Average Net Assets 0.40% 0.40% 0.40% 0.28% 0.09%
Ratio of Net Investment
Income to Average Net
Assets 4.89% 5.17% 5.00% 3.08% 3.11%
<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) ($0.0119) ($0.0018) $0.0038 ($0.0137) ($0.0221)
Ratio of Expenses to
Average Net Assets 6.49% 5.75% 5.02% 4.73% 5.41%
Ratio of Net Investment
Income (loss) to
Average Net Assets (1.19%) (0.18%) 0.38% (1.37%) (2.21%)
</TABLE>
See accompanying notes to financial statements.
<PAGE>
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, 1997, the total amount of dividends
paid by Capital Cash Management Trust was ordinary dividend income.
Prior to January 31, 1997, shareholders were mailed IRS Form 1099-DIV
which contained information on the status of distributions paid for the 1996
CALENDAR YEAR.
