UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
811-5875
(Investment Company Act File Number)
THE CROWLEY PORTFOLIO GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
3201-B MILLCREEK ROAD, WILMINGTON, DE 19808
(Address of Principal Executive Offices)
(302) 994-4700
(Registrant's Telephone Number)
ROBERT A. CROWLEY, PRESIDENT COPY TO:
THE CROWLEY PORTFOLIO GROUP, INC. BRUCE G. LETO, ESQ.
3201-B MILLCREEK ROAD STRADLEY, RONON, STEVENS & YOUNG, LLP
WILMINGTON, DE 19808 2600 ONE COMMERCE SQUARE
(NAME AND ADDRESS OF AGENT FOR SERVICE) PHILADELPHIA, PA 19103-7098
FISCAL YEAR END: NOVEMBER 30
DATE OF REPORTING PERIOD: NOVEMBER 30, 2004
ITEM 1: REPORT TO STOCKHOLDERS.
ANNUAL REPORT TO SHAREHOLDERS
FOR FISCAL YEAR ENDED NOVEMBER 30, 2004
THE CROWLEY PORTFOLIO GROUP, INC.
The Crowley Income Portfolio
The Crowley Diversified Management Portfolio
CROWLEY & CROWLEY CORP.
3201-B MILLCREEK ROAD
WILMINGTON, DELAWARE 19808
(302) 994-4700
FAX (302) 994-9495
THE CROWLEY PORTFOLIO GROUP, INC.
The Crowley Income Portfolio
The Crowley Diversified Management Portfolio
Dear Shareholder:
We are pleased to present you with the Annual Report for The Crowley Portfolio
Group, Inc. The report contains information regarding both The Crowley Income
Portfolio and The Crowley Diversified Management Portfolio (each, a "Portfolio"
and, collectively, the "Portfolios"). The Portfolios had combined assets of
approximately 16.9 million dollars as of November 30, 2004. There are currently
300 active accounts.
The Crowley Income Portfolio had a net asset value of $10.38 per share as of
November 30, 2004 and had a total return of 3.76% for the period November 30,
2003 through November 30, 2004. As of November 30, 2004, The Crowley Income
Portfolio had investments in 52 individual issues. No individual investment
comprised more than 5% of the Portfolio, while corporate bonds and notes
comprised 91.66% of the overall portfolio. The remaining assets were invested
Government Agency Bonds 2.66% and the balance in cash and cash equivalents
5.68%. The Crowley Income Portfolio continues to be invested to maximize current
income, consistent with prudent risk. Management believes that interest rates
will continue to increase during the first half of 2005. If management is
correct, total returns should remain positive, but at modest levels. Current
income as reflected in the December 31, 2003 year-end distribution was $0.50 per
share.
The Crowley Diversified Management Portfolio had a net asset value of $10.57 per
share as of November 30, 2004 and had a total return of 10.10% for the period
November 30, 2003 through November 30, 2004. The Crowley Diversified Management
Portfolio had approximately 5.6 million dollars in net assets as of November 30,
2004. As of November 30, 2004, approximately 98.1% of The Crowley Diversified
Management Portfolio was invested in a portfolio of 22 mutual funds diversified
over 7 different investment classifications. The largest portion of the
Portfolio's assets was invested in funds included in the Growth category 38.13%,
followed by: Growth/Income 19.00%, Aggressive Growth 11.54%, Foreign Equity
10.52%, Balanced 9.52%, Health Care 6.56% and Global Equity 2.79%. Management
currently intends to invest the Portfolio's assets with a greater allocation to
equities, while continuing to use mutual funds as the Portfolio's primary
investment vehicle. Management continues to believe that equity investing will
outperform other investment alternatives in the year 2005.
The enclosed report has been audited and contains a list of each Portfolio's
investments as of November 30, 2004.
Sincerely,
Robert A. Crowley, CFA
President
January 28, 2005
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
The Crowley Income Portfolio
- ----------------------------
The line graph depicted below for The Crowley Income Portfolio illustrates the
performance of $10,000 in The Crowley Income Portfolio for the past ten fiscal
years as compared to a broad-based index. The calculations depicted in the line
graph assume a reinvestment of all distributions.
[OBJECT OMITTED]
Year Ending The Crowley Lehman Gov./Corp
November Income Portfolio Index
- ----------- ---------------- ----------------
1995 $14,290 $14,783
1996 $14,884 $15,621
1997 $15,976 $16,777
1998 $17,099 $18,266
1999 $17,256 $18,780
2000 $18,174 $20,239
2001 $17,998 $19,062
2002 $16,963 $19,388
2003 $17,806 $18,918
2004 $17,729 $19,807
PAST PERFORMANCE DOES NOT PREDICT FUTURE PERFORMANCE.
AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDING NOVEMBER 30, 2004)
PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS
----------- ------------ -------------
The Crowley Income Portfolio 3.76% 5.92% 5.89%
Lehman Brothers Intermediate 3.23% 6.99% 7.05%
Government/Corporate Index
The line graph illustrates the past performance of The Crowley Income Portfolio
as compared to the Lehman Brothers Intermediate Government/Corporate Index. The
Lehman Brothers Intermediate Government/Corporate index is an unmanaged index of
government and corporate fixed-rate debt issues with maturities between one and
ten years. You should remember that unlike The Crowley Income Portfolio, the
Lehman Brothers Intermediate Government/Corporate Index is unmanaged and does
not reflect the actual costs of operating a mutual fund, such as the costs of
buying, selling and holding securities. The chart illustrates that a $10,000
investment on December 1, 1994 would be worth $17,729 as of November 30, 2004
for The Crowley Income Portfolio. The same investment would be worth $19,807 for
the Lehman Brothers Intermediate Government/Corporate Index through November 30,
2004. The average annual total return table for The Crowley Income Portfolio,
which appears above, illustrates that the average annual total return for The
Crowley Income Portfolio for the one, five, and ten year periods, respectively.
Sources: LEHMAN BROTHERS INC.
The objective of The Crowley Income Portfolio is to maximize current income,
consistent with prudent risk. The Crowley Income Portfolio has the flexibility
to invest in several types of fixed income vehicles but the majority of its
investments must be, by definition, investment grade, which means they must be
in one of the four top ratings of certain nationally recognized statistical
rating organizations. Since inception, The Crowley Income Portfolio has invested
a predominate amount of its assets in high quality corporate bonds, government
and government agency bonds. By investing in such debt securities, The Crowley
Income Portfolio has been able to reduce its exposure to the risk of default by
any one issuer.
A second area of risk management has been through the use of maturity length.
Over the past several years, the investment advisor has taken a short to
intermediate approach to maturities (approximately 1 to 10 years). By selecting
bonds that mature or are callable in several years, the investment advisor
attempts to control the price volatility of investments within The Crowley
Income Portfolio. This should add an element of downside risk protection in the
event that interest rates were to rise.
As of November 30, 2004, the dollar weighted average maturity was approximately
5.8 years, as compared to 6.20 years as of November 30, 2003. The investment
advisor has eliminated The Crowley Income Portfolio's investment in preferred
stocks. The Crowley Income Portfolio had a total return of 3.76% for the fiscal
year ended November 30, 2004. By comparison, the Lehman Brothers Intermediate
Government/Corporate Index had an investment return of 3.23% for the same
period. This index may be comparable to The Crowley Income Portfolio, depending
on maturity and duration during a given period.
The Crowley Diversified Management Portfolio
- --------------------------------------------
The line graph depicted below for The Crowley Diversified Management Portfolio,
illustrates the performance of $10,000 in The Crowley Diversified Management
Portfolio from its inception on April 3, 1995, as compared to a broad-based
index. The calculations depicted in the line graph assume a reinvestment of all
distributions.
[OBJECT OMITTED]
The Crowley Diversified S&P 500
Period Ending Management Portfolio Index
- ------------- ----------------------- ----------------
Apr. 1995 $10,000 $10,000
Nov. 1995 $10,710 $12,724
Nov. 1996 $12,196 $16,064
Nov. 1997 $13,616 $20,641
Nov. 1998 $14,310 $26,147
Nov. 1999 $16,419 $31,410
Nov. 2000 $15,401 $29,788
Nov. 2001 $12,581 $16,132
Nov. 2002 $10,237 $18,191
Nov. 2003 $12,264 $20,559
Nov. 2004 $13,037 $27,535
PAST PERFORMANCE DOES NOT PREDICT FUTURE PERFORMANCE.
AVERAGE ANNUAL TOTAL RETURN (FOR THE PERIODS ENDING NOVEMBER 30, 2004)
SINCE INCEPTION
PAST 1 YEAR PAST 5 YEARS (APR., 1995)
----------- ------------ ------------
The Crowley Diversified Management Portfolio 10.10% -4.51% 2.78%
S&P 500(R)Index 13.67% -2.07% 11.03%
The line graph illustrates the past performance for The Crowley Diversified
Management Portfolio as compared to the S&P 500(R) Index ("S&P 500(R)"). The S&P
500(R) is an unmanaged capitalization-weighted index of 500 stocks designed to
measure performance of the broad domestic economy through changes in the
aggregate market value of 500 stocks representing all major industries. You
should remember that unlike The Crowley Diversified Management Portfolio, the
S&P 500(R) is unmanaged and does not reflect the actual costs of operating a
mutual fund, such as the costs of buying, selling and holding securities.
The chart illustrates that a $10,000 investment on April 3, 1995 would have been
worth $13,307 for The Crowley Diversified Management Portfolio and $27,535 for
the S&P 500(R)through November 30, 2004. The average annual total return table
for The Crowley Diversified Management Portfolio, which appears above,
illustrates that the average annual total return for The Crowley Diversified
Management Portfolio for the one, five, and ten year periods, respectively.
Sources: STANDARD AND POOR'S CORPORATION
The Crowley Diversified Management Portfolio seeks high total return consistent
with reasonable risk. The Crowley Diversified Management Portfolio invests
primarily in shares of other registered investment companies. Although there is
not a readily available index for similar portfolios, which might be labeled a
"Flexible Portfolio Funds Index," The Crowley Diversified Management Portfolio
is being compared to the S&P 500(R). During the fiscal year ended November 30,
2004, The Crowley Diversified Management Portfolio had a total return of 10.10%.
During the same period, the S&P 500(R) had a total return of 13.67%.
SECTOR ALLOCATION
The SEC adopted a requirement that all funds present their categories of
portfolio holdings in a table, chart, or graph format in their annual and
semiannual reports to shareholders, regardless whether a schedule of investments
is included in the reports. The following table lists the categories of
portfolio holdings as a percent of total net assets and is provided in
compliance with such requirement.
The Crowley Income Portfolio
- ----------------------------
As depicted in the table below, corporate bonds and notes comprised 91.66% of
the overall portfolio for The Crowley Income Portfolio:
SECTOR PERCENTAGE OF NET ASSETS
Corporate Bonds and Notes 91.66%
Auto and Truck 17.00%
Banking 0.94%
Chemical (Basic) 1.41%
Computer Services 4.29%
Consumer Products 0.95%
Cruise Lines 3.59%
Diversified Company 5.21%
Diversified Media Company 1.30%
Electronics Distribution 1.44%
Financial Services 17.10%
Hotel/Gaming Industry 4.82%
Insurance (Diversified) 5.45%
Medical Supplies & Savings 4.84%
Miscellaneous Manufacturer 1.86%
Oil Industry 5.25%
Pharmaceutical Industry 2.48%
Retail Store Industry 7.05%
Telecommunications Service Industry 6.68%
Government Agency Bonds 2.66%
Cash and Cash Equivalents 5.68%
Crowley Diversified Management Portfolio
- ----------------------------------------
As of November 30, 2004, The Crowley Diversified Management Portfolio had
investments in 22 mutual funds in 7 different fund categories or "sectors." The
categories of investment companies in which The Crowley Diversified Management
Portfolio was invested as of that date are listed in the table below.
SECTOR PERCENTAGE OF NET ASSETS
Aggressive Growth 11.54%
Balanced 9.52%
Foreign Equity 10.52%
Global Equity 2.79%
Growth 38.13%
Growth and Income 19.00%
Healthcare 6.56%
Cash and Cash Equivalents 1.94%
DISCLOSURE OF PORTFOLIO (FUND) EXPENSES
It is important for you to understand the impact of costs on your investment.
Like all mutual funds, the Portfolios each have operating expenses. As a
shareholder of a Portfolio, you incur ongoing costs, which include costs for
portfolio management, administrative services and shareholder reports (such as
this Annual Report), among other types of expenses. Operating expenses, which
are deducted from a Portfolio's gross income, directly reduce the investment
return of a Portfolio.
A Portfolio's expenses are expressed as a percentage of its average net assets.
This figure is known as the expense ratio. The following examples are intended
to help you understand the ongoing costs (in dollars) of investing in your fund
and to compare these costs with those of other mutual funds. The examples are
based on an investment of $1,000 made at the beginning of the period shown and
held for the entire period.
The table below illustrates your fund's costs in two ways:
o BASED ON ACTUAL RETURN. This section helps you to estimate the actual
expenses that you paid over the period. The "Ending Account Value"
shown is derived from the Portfolio's actual return, and the third
column shows the dollar amount that would have been paid by an
investor who started with $1,000 in the Portfolio. You may use the
information here, together with the amount you invested, to estimate
the expenses that you paid over the period.
To do so, simply divide you account value by $1,00 (for example, an
$8,600 account value divided by $1,000 = 8.6), then multiply the
result by the number given for your Portfolio under the heading
"Expenses Paid During Period."
o BASED ON HYPOTHETICAL 5% YEARLY RETURN. This section is intended to
help you compare a Portfolio's costs with those of other mutual funds.
It assumes that the Portfolio had a yearly return of 5% before
expenses, but that the expense ratio is unchanged. In this
case--because the return used is not the Portfolio's actual
return--the results do not apply to your investment. Because the
Securities and Exchange Commission requires all mutual funds to
calculate expenses based on a 5% return, the hypothetical 5% return
example is useful in making comparisons between a Portfolio and other
mutual funds.
Expense information as of the six months ended on November 30, 2004:
-------------------------------------------------------------------
- -------------------------------- ------------------ -------------------- ---------------------------
BEGINNING ACCOUNT ENDING ACCOUNT VALUE
THE CROWLEY INCOME PORTFOLIO VALUE MAY 31, 2004 NOV. 30, 2004 EXPENSES PAID DURING PERIOD
- -------------------------------- ------------------ -------------------- ---------------------------
Based on Actual Fund Return $1,000.00 $1,043.80 $7.98
- -------------------------------- ------------------ -------------------- ---------------------------
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,017.15 $7.92
- -------------------------------- ------------------ -------------------- ---------------------------
- ------------------------------- ------------------ -------------------- ---------------------------
THE CROWLEY DIVERSIFIED BEGINNING ACCOUNT ENDING ACCOUNT VALUE
MANAGEMENT PORTFOLIO VALUE MAY 31, 2004 NOV. 30, 2004 EXPENSES PAID DURING PERIOD
- ------------------------------- ------------------ -------------------- ---------------------------
Based on Actual Fund Return $1,000.00 $1,052.70 $11.44
- ------------------------------- ------------------ -------------------- ---------------------------
Based on Hypothetical 5% Yearly
Return $1,000.00 $1,013.85 $11.23
- ------------------------------- ------------------ -------------------- ---------------------------
The calculations are based on expenses incurred in the most recent six-month
period. The Crowley Income Portfolio's annualized six-month expense ratio for
that period is 1.57% and The Crowley Diversified Management Portfolio's
annualized six-month expense ratio for that period is 2.23%. The dollar amounts
shown as "Expenses Paid" are equal to the annualized expense ratio multiplied by
the average account value over the period, multiplied by the number of days in
the most recent six-month period, then divided by the number of days in the most
recent 12-month period. You can assess a Portfolio's costs by comparing this
hypothetical example with the hypothetical examples that appear in shareholder
reports of other mutual funds.
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 2004
- ---------------------------------------------------------------------------------
MARKET
PERCENT OF VALUE
PAR VALUE NET ASSETS (NOTE 1-A)
- --------- ---------- ----------
CORPORATE BONDS & NOTES
-----------------------
AUTO & TRUCK
Daimler Chrysler Corp. Note
$ 250,000 4.75%, 01/15/08 2.26% $ 254,250
250,000 6.85%, 10/15/11 2.39 269,125
Ford Holdings
500,000 7.350%, 11/07/11 4.44 500,600
200,000 7.375%, 10/28/09 1.88 212,000
General Motors Corp.
200,000 7.200%, 01/15/11 1.82 205,560
General Motors Nora Financial
450,000 6.850%, 10/15/08 4.21 473,850
------- ---------
17.00 1,915,385
------- ---------
BANKING
Banque Paribas New York
95,000 6.875%, 03/01/09 .94 105,403
------- ---------
CHEMICAL (BASIC)
Union Carbide Corp. Note
150,000 6.700%, 4/01/09 1.41 158,625
------- ---------
COMPUTER SERVICES
Electronic Data Systems Corp.
450,000 7.125%, 10/15/09 4.29 482,895
------- ---------
CONSUMER PRODUCTS
American Greetings Corp.
100,000 6.10%, 08/01/28 .95 107,250
------- ---------
CRUISE LINES
Carnival Corp. Note
82,000 7.050%, 05/15/05 .74 83,845
Royal Caribbean Cruises
300,000 7.000%, 10/15/07 2.85 321,000
------- ---------
3.59 404,845
------- ---------
DIVERSIFIED COMPANY
American Standard, Inc.
250,000 7.375%, 04/15/05 2.25 253,850
100,000 7.375%, 02/01/08 .97 109,584
Raychem Corp. Note
200,000 8.200%, 10/15/08 1.99 223,690
------- ---------
5.21 587,124
------- ---------
DIVERSIFIED MEDIA COMPANY
150,000 Clear Channel Communication Note
4.400%, 05/15/11 1.30 146,701
------- ---------
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
NOVEMBER 30, 2004
- ---------------------------------------------------------------------------------
MARKET
PERCENT OF VALUE
PAR VALUE NET ASSETS (NOTE 1-A)
- --------- ---------- ----------
CORPORATE BONDS & NOTES
-----------------------
ELECTRONICS DISTRIBUTION
Avnet Inc.
$ 150,000 8.000%, 11/15/06 1.44% $ 162, 225
------- -----------
FINANCIAL SERVICES
CIT Group Inc. Medium Term Note
200,000 4.750%, 12/15/10 1.82 205,814
Duke Capital Corp.
275,000 7.500%, 10/01/09 2.76 311,206
200,000 6.250%, 02/15/13 1.90 213,664
Household Finance Corp.
200,000 6.500%, 11/15/08 1.93 217,982
International Lease Finance Corp.
200,000 5.875%, 05/01/13 1.86 210,080
Lloyds T&B Bank PLC Euro
Medium Term Note
150,000 7.00%, 07/30/2018 1.29 145,125
Morgan Stanley Group
200,000 7.000%, 10/01/13 2.01 226,242
PXRE Capital Trust Note
70,000 8.850%, 02/01/27 .65 72,870
Tiers Principal Protected
300,000 8.850%, 02/15/27 2.88 324,450
------- -----------
17.10 1,927,433
------- -----------
HOTEL/GAMING INDUSTRY
ITT Corp.
200,000 6.750%, 11/15/05 1.84 207,700
Harris Operating Company
150,000 8.000%, 02/01/11 1.55 173,895
Hilton Hotels Corp.
150,000 7.950%, 04/15/07 1.43 161,400
------- -----------
4.82 542,995
------- -----------
INSURANCE (DIVERSIFIED)
American Financial Group
121,000 7.125%, 04/15/09 1.15 129,466
Marsh & McLennan Inc. Note
100,000 6.250%, 03/15/12 .92 103,068
Stancorp Financial Group Note
110,000 6.875%, 10/01/12 1.07 121,031
Unitrin, Inc. Senior Note
250,000 5.750%, 07/01/07 2.31 260,488
------- -----------
5.45 614,053
------- -----------
MEDICAL SUPPLIES & SAVINGS
Bausch & Lomb, Inc.
250,000 6.950%, 11/15/17 2.37 266,925
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
NOVEMBER 30, 2004
- ---------------------------------------------------------------------------------
MARKET
PERCENT OF VALUE
PAR VALUE NET ASSETS (NOTE 1-A)
- --------- ---------- ----------
CORPORATE BONDS & NOTES
-----------------------
Medco Health Solutions, Inc.
Senior Note
$ 250,000 7.250%, 08/15/13 2.47% $ 278,438
------- -----------
4.84 545,363
------- -----------
MISCELLANEOUS MANUFACTURER
Acuity Brands
200,000 6.000%, 02/01/09 1.86 209,542
------- -----------
OIL INDUSTRY
Enron Oil & Gas Note
155,000 6.500%, 12/01/07 1.49 168,175
National Fuel Gas
100,000 6.000%, 03/01/09 .95 107,111
Seacor Smit Inc. Note
98,000 7.200%, 09/15/09 .95 106,442
Velero Logistics
200,000 6.050%, 03/15/13 1.86 210,138
------- -----------
5.25 591,866
------- -----------
PHARMACEUTICAL INDUSTRY
American Home Products Note
250,000 6.950%, 03/15/11 2.48 278,935
------- -----------
RETAIL STORE INDUSTRY
Sears Roebuck Acceptance Corp. Note
150,000 6.700%, 11/15/06 1.39 156,600
100,000 6.125%, 01/15/06 .90 102,130
60,000 7.300%, 12/15/09 .53 60,000
250,000 6.250%, 05/01/09 2.30 258,800
100,000 7.000%, 02/01/11 .94 105,650
Tricon Global Restaurants
100,000 7.650%, 05/15/08 .99 111,481
------- -----------
7.05 794,661
------- -----------
TELECOMMUNICATIONS SERVICE INDUSTRY
Ametek, Inc.
95,000 7.200%, 07/15/08 .91 102,600
GTE North, Inc.
250,000 6.375%, 02/15/10 2.36 265,650
Motorola, Inc.
150,000 7.625%, 11/15/10 1.54 173,650
New York Telephone Co.
200,000 6.000%, 04/15/08 1.87 210,500
------- -----------
6.68 752,400
------- -----------
TOTAL CORPORATE BONDS & NOTES
(COST $10,097,756) 91.66 10,327,701
------- -----------
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
NOVEMBER 30, 2004
- ---------------------------------------------------------------------------------
MARKET
PERCENT OF VALUE
PAR VALUE NET ASSETS (NOTE 1-A)
- --------- ---------- ----------
CORPORATE BONDS & NOTES
-----------------------
GOVERNMENT AGENCY BONDS
300,000 Federal Home Loan Mortgage Corporation
5.310%, 03/24/14 2.66% $ 300,000
------- -----------
TOTAL GOVERNMENT AGENCY BONDS
(Cost $300,000) 2.66 300,000
------- -----------
TOTAL INVESTMENTS
(COST $10,397,756)(a) 94.32 10,627,701
OTHER ASSETS LESS LIABILITIES 5.68 640,568
------- -----------
NET ASSETS 100.00% $11,268,269
======= ===========
(A) AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS
$10,468,830.
At November 30, 2004, unrealized appreciation (depreciation)
of securities for federal income tax purposes is as follows:
Unrealized appreciation $ 216,044
Unrealized (depreciation) (57,173)
-----------
NET UNREALIZED APPRECIATION $ 158,871
===========
THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 2004
- ---------------------------------------------------------------------------------
MARKET
NUMBER OF PERCENT OF VALUE
SHARES NET ASSETS (NOTE 1-A)
- --------- ---------- ----------
GENERAL EQUITY FUNDS
--------------------
AGGRESSIVE GROWTH
7,962 American Century Ultra 4.03% $ 225,963
9,362 Strong Opportunity 7.51 421,646
------- -----------
11.54 647,609
------- -----------
BALANCED
11,509 Columbia Balanced 4.26 238,930
3,733 Dodge & Cox Balanced 5.26 295,316
------- -----------
9.52 534,246
------- -----------
GROWTH
10,404 Credit Suisse Capital Appreciation 2.96 166,361
8,249 Dreyfus Disciplined 4.61 258,759
10,121 Harbor Capital Appreciation 5.01 281,167
5,633 Invesco Dynamics 1.59 89,065
2,634 Nicholas 2.74 153,498
6,202 Strong Growth 2.06 115,416
9,565 T. Rowe Price Dividend Growth 3.80 213,102
10,721 T. Rowe Price Blue Chip 5.73 321,736
7,510 T. Rowe Price Mid Cap 6.56 368,496
5,257 White Oak Growth 3.07 172,263
------- -----------
38.13 2,139,863
------- -----------
GROWTH/INCOME
8,198 American Century Growth & Income 4.34 243,797
3,787 Dodge & Cox Stock 8.70 488,058
11,130 Vanguard Growth & Income 5.96 334,131
------- -----------
19.00 1,065,986
------- -----------
HEALTHCARE
2,954 Vanguard Healthcare 6.56 368,216
------- -----------
INTERNATIONAL/FOREIGN EQUITY
18,905 American Century International
Equity 2.96 166,173
5,528 Managers International Equity 4.52 254,004
6,440 Scudder Greater Europe 3.04 170,411
------- -----------
10.52 590,588
------- -----------
THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
NOVEMBER 30, 2004
- ---------------------------------------------------------------------------------
MARKET
NUMBER OF PERCENT OF VALUE
SHARES NET ASSETS (NOTE 1-A)
- --------- ---------- ----------
INTERNATIONAL EQUITY FUNDS
--------------------------
GLOBAL EQUITY
9,512 Gabelli Global Telecommunications 2.79% $ 156,759
------- -----------
TOTAL INVESTMENTS (COST $5,846,305)(a) 98.06 5,503,267
OTHER ASSETS LESS LIABILITIES 1.94 108,716
------- -----------
NET ASSETS 100.00% $ 5,611,983
======= ===========
(A) AGGREGATE COST FOR FEDERAL INCOME TAX PURPOSES IS
$5,846,305.
At November 30, 2004, unrealized appreciation (depreciation)
of securities for federal income tax purposes is as follows:
Unrealized appreciation $ 399,526
(Unrealized depreciation) (742,564)
-----------
NET UNREALIZED DEPRECIATION $ (343,038)
===========
THE CROWLEY PORTFOLIO GROUP, INC.
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 2004
- --------------------------------------------------------------------------------
DIVERSIFIED
INCOME MANAGEMENT
PORTFOLIO PORTFOLIO
--------- -----------
ASSETS
Investments at market value
(Identified cost $10,397,756 and $5,846,305
respectively) (NOTE 1) $ 10,627,701 $ 5,503,267
Cash 515,769 114,691
Dividends and interest receivable 132,500 -
------------- ------------
TOTAL ASSETS 11,275,970 5,617,958
------------- ------------
LIABILITIES
Accrued expenses 7,701 5,975
------------- ------------
NET ASSETS
(500 million shares of $.01 par value common stock
authorized; 1,085,439 and 530,942 shares issued
and outstanding, respectively) $ 11,268,269 $ 5,611,983
============= ============
NET ASSET VALUE, OFFERING AND REPURCHASE
PRICE PER SHARE
($11,268,269 / 1,085,439 shares) $10.38
======
($5,611,983 / 530,942 shares) $10.57
======
NET ASSETS
At November 30, 2004 net assets consisted of:
Paid-in capital $ 11,137,394 $ 6,561,259
Undistributed net investment income 436,304 -
Accumulated net realized gain (loss) on
investments (535,374) (606,238)
Net unrealized appreciation (depreciation) 229,945 (343,038)
------------- ------------
$ 11,268,269 $ 5,611,983
============= ============
THE CROWLEY PORTFOLIO GROUP, INC.
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 2004
- --------------------------------------------------------------------------------
DIVERSIFIED
INCOME MANAGEMENT
PORTFOLIO PORTFOLIO
--------- -----------
INVESTMENT INCOME
Interest income $ 614,661 $ 1,785
Dividends 44,167 41,483
------------- ------------
TOTAL INCOME 658,828 43,268
------------- ------------
EXPENSES
Investment advisory fees (NOTE 3) 68,505 54,526
Transfer agent fees (NOTE 3) 47,308 23,488
Professional fees
Audit fees 11,000 8,000
Legal fees 23,500 16,275
Custody fees 5,474 1,200
Directors' fees 4,000 4,000
Miscellaneous 3,818 3,492
Insurance 1,666 1,000
Registration 1,735 1,675
------------- ------------
TOTAL EXPENSES 167,006 113,656
------------- ------------
NET INVESTMENT INCOME (LOSS) 491,822 (70,388)
------------- ------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from
security transactions (154,664) (235,249)
Capital gain distributions from
regulated investment companies - 6,514
Change in unrealized appreciation
(depreciation) of investments 84,729 802,399
------------- ------------
NET GAIN (LOSS) ON INVESTMENTS (69,935) 573,664
------------- ------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 421,887 $ 503,276
============= ============
THE CROWLEY PORTFOLIO GROUP, INC.
INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
2004 2003
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income $ 491,822 $ 554,138
Net realized gain (loss) on investments (154,664) (191,605)
Net change in unrealized appreciation
(depreciation) of investments 84,729 641,661
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 421,887 1,004,194
DISTRIBUTIONS TO SHAREHOLDERS
Net investment income
($.50 and $.56 per share, respectively) (553,665) (610,198)
CAPITAL SHARE TRANSACTIONS (a)
Increase (decrease) in net assets resulting
from capital share transactions (58,567) (36,746)
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (190,345) 357,250
NET ASSETS
Beginning of Year 11,458,614 11,101,364
------------ ------------
END OF YEAR
(Including undistributed net investment income of
$436,304 and $498,147, respectively) $ 11,268,269 $ 11,458,614
============ ============
(a) Summary of capital share activity follows:
YEAR ENDED YEAR ENDED
NOVEMBER 30, 2004 NOVEMBER 30, 2003
------------------- --------------------
SHARES VALUE SHARES VALUE
------ ----- ------ -----
Shares sold 21,570 $ 226,319 22,041 $ 214,198
Shares issued in reinvestment of distributions 54,699 551,366 62,449 607,624
------ --------- ------ ---------
76,269 777,685 84,490 821,822
Shares redeemed (81,933) (836,252) (84,781) (858,568)
NET DECREASE (5,664) $ (58,567) (291) $ (36,746)
======= ========== ======== ==========
THE CROWLEY PORTFOLIO GROUP, INC.
DIVERSIFIED MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30,
2004 2003
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM
OPERATIONS
Net investment income (loss) $ (70,388) $ (54,174)
Net realized gain (loss) on investments (235,249) (184,463)
Capital gain distributions from regulated investment companies 6,514 15,691
Net change in unrealized appreciation (depreciation)
of investments 802,399 900,448
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 503,276 677,502
CAPITAL SHARE TRANSACTIONS (a)
Increase (decrease) in net assets resulting from capital
share transactions (125,802) (93,519)
------------ ------------
TOTAL INCREASE IN NET ASSETS 377,474 583,983
NET ASSETS
Beginning of year 5,234,509 4,650,526
------------ ------------
END OF YEAR $ 5,611,983 $ 5,234,509
============ ============
(a) Summary of capital share activity follows:
YEAR ENDED YEAR ENDED
NOVEMBER 30, 2004 NOVEMBER 30, 2003
----------------- -------------------
SHARES VALUE SHARES VALUE
------ ----- ------ -----
Shares sold 43,553 $ 438,251 28,740 $ 265,207
Shares redeemed (58,132) (564,053) (43,809) (358,726)
-------- ----------- -------- -----------
NET DECREASE (14,579) $ (125,802) (15,069) $ (93,519)
========= ============ ========= ============
THE CROWLEY PORTFOLIO GROUP, INC.
INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED NOVEMBER 30,
---------------------------------------------
2004 2003 2002 2001 2000
---- ---- ---- ---- ----
NET ASSET VALUE
Beginning of year $10.50 $10.17 $10.68 $10.38 $10.56
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .44 .51 .58 .65 .71
Net gains (losses) on securities
(both realized and unrealized) (.06) .38 (.43) .34 (.19)
-------- -------- -------- -------- --------
TOTAL FROM INVESTMENT OPERATIONS .38 .89 .15 .99 .52
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends (from net investment income) (.50) (.56) (.66) (.69) (.70)
-------- -------- -------- -------- --------
Distributions (from realized
capital gains) - - - - -
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS (.50) (.56) (.66) (.69) (.70)
-------- -------- -------- -------- --------
NET ASSET VALUE
End of year $10.38 $10.50 $10.17 $10.68 $10.38
======== ======== ======== ======== ========
TOTAL RETURN 3.76% 9.19% 1.45% 10.08% 5.32%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000 omitted) $11,268 $11,459 $11,101 $11,242 $10,724
Ratio of expenses to average net assets 1.47% 1.43% 1.41% 1.39% 1.37%
Ratio of net investment income to average
net assets 4.32% 4.85% 5.65%** 6.20% 6.79%
Portfolio turnover rate 34.71% 51.07% 32.28% 30.12% 1.38%
** As required, effective December 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment Companies
and began amortizing discount and premium on debt securities. Had the Fund
not amortized discount and premium on debt securities as adjustments to
interest income, the net investment income per share would have been $.57
and the ratio of net investment income to average net assets would have
been 5.59%. Per share and ratios prior to December 1, 2001 have not been
restated to reflect this change in presentation.
THE CROWLEY PORTFOLIO GROUP, INC.
DIVERSIFIED MANAGEMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
YEAR ENDED NOVEMBER 30,
---------------------------------------------
2004 2003 2002 2001 2000
---- ---- ---- ---- ----
NET ASSET VALUE
Beginning of year $9.60 $8.30 $10.20 $13.21 $14.40
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.13) (.10) (.09) .12 .06
Net gains (losses) on securities
(both realized and unrealized) 1.10 1.40 (1.81) (2.39) (.91)
-------- -------- -------- -------- --------
Total from investment operations .97 1.30 (1.90) (2.27) (.85)
-------- -------- -------- -------- --------
LESS DISTRIBUTIONS
Dividends (from net investment income) - - - (.15) (.16)
-------- -------- -------- -------- --------
Distributions (from realized capital gains) - - - (.59) (.18)
-------- -------- -------- -------- --------
TOTAL DISTRIBUTIONS - - - (.74) (.34)
-------- -------- -------- -------- --------
NET ASSET VALUE
End of year $10.57 $9.60 $8.30 $10.20 $13.21
======== ======== ======== ======== ========
TOTAL RETURN 10.10% 15.66% (18.63)% (18.31)% (6.20)%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of year (000 omitted) $5,612 $5,235 $4,651 $5,495 $6,573
Ratio of expenses to average net assets 2.10% 2.01% 1.89% 1.81% 1.86%
Ratio of net investment income (loss)
to average net assets (1.30%) (1.19)% (1.06)% .98% .39%
Portfolio turnover rate 11.60% 3.76% 1.75% 6.81% 15.36%
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2004
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Crowley Portfolio Group, Inc. (the "FUND") was organized as a Maryland
corporation on August 15, 1989, and is an open-end diversified investment
company currently offering two series of shares: The Crowley Income
Portfolio, and The Crowley Diversified Management Portfolio (each a
"PORTFOLIO").
The objective of The Crowley Income Portfolio is to maximize current
income, consistent with prudent risk, i.e., reasonable risk to principal.
The objective of The Crowley Diversified Management Portfolio is high total
return consistent with reasonable risk. The Portfolios will use a variety
of investment strategies in an effort to balance portfolio risks and to
hedge market risks. There can be no assurance that the objectives of the
Portfolios will be achieved.
SECURITY VALUATION
Portfolio securities which are fixed income securities, are valued by using
market quotations, prices provided by market-makers or estimates of market
values obtained from yield data relating to instruments or securities with
similar characteristics, in accordance with procedures established in good
faith by the Board of Directors. Securities listed on an exchange or quoted
on a national market system are valued at the last sales price. Investments
in regulated investment companies are valued at the net asset value per
share as quoted by the National Association of Securities Dealers, Inc.
Money market securities with remaining maturities of less than 60 days are
valued on the amortized cost basis as reflecting fair value. All other
securities are valued at their fair value as determined in good faith by
the Board of Directors.
FEDERAL INCOME TAXES
The Portfolios intend to comply with the requirements of the Internal
Revenue Code necessary to qualify as regulated investment companies and as
such will not be subject to federal income taxes on otherwise taxable
income (including net realized capital gains) which is distributed to
shareholders. At November 30, 2004, the Crowley Income Portfolio had a
capital loss carry-forward for Federal income tax purposes of $506,501 of
which $47,021 in 2005, $53,119 in 2006, $24,748 in 2008, $12,666 in 2009,
$51,551 in 2010, $184,731 expires in 2011 and $132,665 expires in 2012. At
November 30, 2004, the Crowley Diversified Management had a capital loss
carry forward for Federal income tax purposes of $606,238 of which $74,524
expires in 2009, $134,207 expires in 2010, $168,772 expires in 2011, and
$228,735 expires in 2012.
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOVEMBER 30, 2004
- --------------------------------------------------------------------------------
SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS TO SHAREHOLDERS
As is common in the industry, investment and shareholder transactions are
recorded on trade date. The Fund determines the gain or loss recorded on
trade date. The Fund determines the gain or loss realized from the
investment transactions by comparing the cost of the security lot sold with
the net sales proceeds. Dividend income is recognized on the ex-dividend
date or as soon as information is available to the Fund. Interest income is
recognized on an accrual basis. Discounts and premiums on securities
purchased are amortized over the life of the respective security.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
In preparing financial statements in conformity with accounting principles
generally accepted in the United States of America, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements, as well as the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
RECLASSIFICATIONS
Accounting principles generally accepted in the United States of America
require certain components of net assets be reclassified between financial
and tax reporting. These reclassifications have no effect on net assets or
net asset value per share. As of November 30, 2004, The Crowley Diversified
Management Portfolio decreased paid in capital by $70,388 and decreased
loss on net investment by $70,388.
RESTRICTIONS REGARDING CASH ASSETS
Other than those restrictions imposed on the Fund pursuant to the
Investment Company Act of 1940, as amended (the "1940 Act"), there are no
restrictions with respect to cash assets held by the Portfolios. Any
investment of such cash assets by a Portfolio is subject to the Portfolio's
investment objective, investment strategies and investment restrictions.
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOVEMBER 30, 2004
- --------------------------------------------------------------------------------
(2) DISTRIBUTION TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL
The tax character of distributions paid during the year ended November 30,
2004 and November 30, 2003 are as follows:
2004 2003
---- ----
Income Portfolio
Distributions from ordinary income $553,665 $610,198
Distributions from long-term capital gains $ - $ -
Diversified Management Portfolio
Distribution from ordinary income $ - $ -
Distribution from long-term capital gains $ - $ -
In order to comply with certain provisions of the Internal Revenue Code of
1986, as amended, and to avoid imposition of the excise tax applicable to
regulated investment companies, the Fund intends to declare as dividends,
in each calendar year, at least 98% of the Fund's net realized capital
gains plus undistributed amounts, if any, from prior years.
As of November 30, 2004, the components of distributable earnings on a tax
basis were as follows:
Income Portfolio
Undistributed ordinary income $ 478,505
Capital loss carryforwards (506,501)
Unrealized appreciation (depreciation) of securities 158,871
----------
$ 130,875
==========
Diversified Portfolio
Undistributed ordinary income $ -
Capital loss carryforwards (606,238)
Unrealized appreciation (depreciation) of securities (343,038)
----------
$ (949,276)
==========
The difference between book basis and tax basis unrealized appreciation is
attributable primarily to amortization of premium/discount on bonds for The
Crowley Income Portfolio.
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
NOVEMBER 30, 2004
- --------------------------------------------------------------------------------
(3) INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Crowley & Crowley Corp. (the "ADVISOR") provides the Fund with management
and administrative services pursuant to a Management Agreement.
As compensation for its services, the Advisor receives a fee, computed
daily and payable monthly, at the annualized rate of .60% of the average
daily net assets of The Crowley Income Portfolio and 1% of the average
daily net assets of The Crowley Diversified Management Portfolio. The
Advisor pays all expenses incurred by it in rendering management services
to the Fund including the costs of accounting, bookkeeping and data
processing services provided in its role as administrator. The Portfolios
bear their costs of operations, which include, but are not limited to:
advisory fees, taxes, brokerage fees, accounting fees, legal fees,
custodian and auditing fees, and printing and other expenses which are not
expressly assumed by the Advisor under the Management Agreement.
The Crowley Financial Group, Inc. ("TCFG") serves as the Portfolio
shareholders' servicing agent. As shareholder servicing agent, TCFG acts as
the Transfer, Dividend Disbursing and Redemption Agent to the Portfolios.
As compensation for its services, TCFG receives a fee computed daily and
payable monthly, at the annualized rate of .40% of the average daily net
assets of each Portfolio. In addition, TCFG receives nominal per account
fees in the amount of $2.50 per account per quarter and $2.00 per
distribution (e.g., capital gain distribution). During the year ended
November 30, 2004, TCFG earned fees of $47,308 and $23,488 from The Crowley
Income Portfolio and Diversified Management Portfolio, respectively.
Crowley Securities serves as distributor of the Fund's shares. Certain
officers and directors of the Fund are also officers of Crowley & Crowley
Corp., Crowley Securities and The Crowley Financial Group, Inc.
(4) PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term investments,
aggregated $3,662,547 and $4,148,716 respectively, in The Crowley Income
Portfolio and $600,000 and $741,829, respectively, in The Crowley
Diversified Management Portfolio.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Directors
The Crowley Portfolio Group, Inc.
Wilmington, Delaware 19808
We have audited the accompanying statements of assets and liabilities of The
Crowley Income Portfolio and The Crowley Diversified Management Portfolio, each
a series of shares of common stock of The Crowley Portfolio Group, Inc.,
including the portfolios of investments as of November 30, 2004, 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 financial
highlights for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Portfolios'
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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits 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 November 30, 2004 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 The
Crowley Income Portfolio and The Crowley Diversified Management Portfolio as of
November 30, 2004, the results of their operations for the year then ended,
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended, in conformity with accounting principles generally accepted in the United
States of America.
Tait, Weller & Baker
Philadelphia, Pennsylvania
December 8, 2004
BOARD OF DIRECTORS
The Board of Directors of the Fund consists of six individuals, four of whom are
not "interested persons" of the Fund as than term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act"). The Directors review the
actions of the officers and decide on general policy. The Directors are
fiduciaries for the Fund's shareholders and are governed by the laws of the
state of Maryland in this regard.
Directors who are deemed to be "interested persons" of the Fund, i.e., those
Directors who are affiliated with the Investment Advisor or the Distributor, do
not receive any compensation from the Fund. The names, addresses and
occupational history of the Directors and principal executive officers are
listed below.
INTERESTED DIRECTORS/1/
- ------------------------- ------------- ------------ ----------------------------------------- ------------
NUMBER OF
TERM OF PORTFOLIOS
OFFICE/2/ IN FUND
POSITION(S) AND LENGTH COMPLEX
NAME, ADDRESS AND (DATE HELD WITH OF TIME PRINCIPAL OCCUPATION DURING PAST OVERSEEN
OF BIRTH) FUND SERVED FIVE YEARS BY DIRECTOR
- ------------------------- ------------- ------------ ----------------------------------------- ------------
Robert A. Crowley/1/ President, Since Vice President, Crowley & Crowley Corp. 2
3201-B Millcreek Road Treasurer, Inception (financial planning and registered
Wilmington, DE 19808 and Director investment advisor) (formerly Crowley
(March 15, 1958) Planning & Management Corp.) from
November, 1986 until present; Vice
President, The Crowley
Financial Group, Inc. (financial
management firm and transfer agent)
from February, 1990 to present; Vice
President, Crowley Real Estate
Services, Inc. from September, 1986
until present; General Partner, Crowley
Securities (registered broker-dealer)
from February, 1985 until present;
Partner, Crowley Insurance, (insurance
brokerage) July, 1986 until present.
- ------------------------- ------------- ------------ ----------------------------------------- ------------
Frederick J. Crowley, Vice Since President, Crowley & Crowley Corp. 2
Jr./1/ President, Inception (financial planning and registered
3201-B Millcreek Road Secretary investment advisor) (formerly Crowley
Wilmington, DE 19808 and Director Planning and Management Corp.) from
(March 30, 1956) November, 1986 until present; President
and Treasurer, The Crowley Financial
Group, Inc. (financial management firm
and transfer agent) from February, 1990
to present; Vice President, Crowley
Real Estate Services, Inc. (real estate
brokerage) from September, 1986 until
present; General Partner, Crowley
Securities (registered broker-dealer)
from February, 1985 until present;
Partner, Crowley Insurance (insurance
brokerage) July, 1985 until present.
- ------------------------- ------------- ------------ ----------------------------------------- ------------
INDEPENDENT DIRECTORS
- ------------------------- ------------- ------------ ----------------------------------------- ------------
NUMBER OF
TERM OF PORTFOLIOS
OFFICE/2/ IN FUND
POSITION(S) AND LENGTH COMPLEX
NAME, ADDRESS AND (DATE HELD WITH OF TIME PRINCIPAL OCCUPATION DURING PAST OVERSEEN
OF BIRTH) FUND SERVED FIVE YEARS BY DIRECTOR
- ------------------------- ------------- ------------ ----------------------------------------- ------------
William O. Cregar Director Since Retired. Formerly Security Director, 2
4556 Simon Road Inception E.I. duPont de Nemours & Co.
Wilmington, DE 19803 (manufacturer of chemicals and related
(May 2, 1925) products), until December, 1990.
- ------------------------- ------------- ------------ ----------------------------------------- ------------
Bruce A. Humphries Director Since Operations Senior Manager, Dade 2
33 Stonewold Way Inception Behring, Inc. (manufacture of clinical
Greenville, DE 19807 diagnostic instruments), 1998 to
(August 28, 1947) Present; Operations Planning Manager
for Virology Business, E.I. duPont de
Nemours & Co. (manufacturer of
chemicals and related products), 1986
to 1997.
- ------------------------- ------------- ------------ ----------------------------------------- ------------
Daniel J. Piscitello Director Since Assistant Vice President of Creative 2
3933 Branches Lane Inception Services, Lenox Collections
Doylestown, PA 18901 (manufacturer of tableware and
(November 5, 1941) collectibles), 1996 to Present.
- ------------------------- ------------- ------------ ----------------------------------------- ------------
Peter Veenema Director Since Senior Research Engineer, E.I. duPont 2
1211 Norbee Drive Inception de Nemours (manufacturer of chemicals
Wilmington, DE 19803 and related products), 1996 to Present.
(May 25, 1949)
- ------------------------- ------------- ------------ ----------------------------------------- ------------
/1/ Robert A. Crowley and Frederick J. Crowley are brothers and each are
considered to be an "interested person" of the Fund under the 1940 Act due to
their positions as officers of Crowley and Crowley Corp., which is the Fund's
investment advisor, and General Partners of Crowley Securities, which is the
Fund's distributor.
/2/ Each Director and officer shall hold office until his or her successor is
elected and qualified.
FOR MORE INFORMATION
This Annual Report is intended for the Fund's shareholders. It may not be
distributed to prospective investors unless it is preceded or accompanied by the
current Fund Prospectus. To receive a free copy of the Prospectus of Statement
of Additional Information, or to request additional information about the Fund,
please contact us at (302) 994-4700.
The Fund's Prospectus sets forth details about charges, expenses, investment
objectives, and operating policies of the Fund. You should read the Prospectus
carefully before you invest. The figures in this Annual Report represent past
results, which are not a guarantee of future results. The return and principal
value of an investment in the Fund will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
You can review and copy information about the Fund at the Public Reference Room
of the U.S. Securities and Exchange Commission ("SEC") in Washington, D.C. To
find out about this public service, call the SEC at (202) 942-8090. Information
about the Fund is also available on the SEC's website, www.sec.gov.
DISCLOSURE OF PORTFOLIO SECURITIES AND PROXY VOTING POLICIES
The Fund files its complete schedule of portfolio holding with the SEC for the
first and third quarters of each fiscal year on Form N-Q. A copy of the Fund's
Form N-Q, as well as a description of the fund's proxy voting policies and
procedures: (i) is available without charge, upon request, by calling (collect)
(302) 994-4700; and (ii) is available on the SEC's website at www.sec.gov. In
addition, you may obtain a free report on how the Fund voted the proxies for
securities it owned during the 12 months ended on June 30 by calling the Fund
(collect) at (302) 994-4700 or by logging on to the SEC's website at
www.sec.gov.
ITEM 2: CODE OF ETHICS. The Crowley Portfolio Group, Inc. (the "Registrant") has
adopted a code of ethics that applies to the Registrant's principal executive
officer and principal financial officer, a copy of which is attached hereto as
Exhibit A. The Registrant has not made any amendments to its code of ethics
during the period covered by this report. The Registrant has not granted any
waivers from any provisions of the code of ethics during the period covered by
this report.
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT. The Registrant's Board of Directors
has determined that the Registrant does not have an audit committee financial
expert serving on its Audit Committee. The Board of Directors based its
determination with respect to not having an audit committee financial expert
serving on its Audit Committee on the following factors:
(a) The Registrant is relatively small in size and has approximately $16.9
million in assets, which reduces the complexity of the financial operations and
conditions of the Registrant. In addition, the Registrant's small size makes it
more prohibitive to incur the added expenses of identifying and electing an
additional Director who would, without question, fully meet the qualifications
of an audit committee financial expert and would be willing to serve, as the
current Directors do, with limited compensation.
(b) The Registrant's Board of Directors also considered several factors,
including the Fund's shareholder base and distribution channels, the
Registrant's portfolio holdings, the Audit Committee's unimpeded access to the
Registrant's auditor and the qualifications of the current members of the
Committee. In addition, the Board of Directors considered the longevity of
service for each member of the Audit Committee, which generally covers the
Registrant's 15-year operating history.
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES.
The Registrant has engaged its principal accountant to perform audit services,
audit-related services, tax services and other services during the past two
fiscal years. "Audit services" refer to performing an audit of the Registrant's
annual financial statements or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for those fiscal years. "Audit-related services" refer to the assurance and
related services by the principal accountant that are reasonably related to the
performance of the audit. "Tax services" refer to professional services rendered
by the principal accountant for tax compliance, tax advice, and tax planning.
The following table details the aggregate fees billed for each of the last two
fiscal years for audit fees, audit-related fees, tax fees and other fees by the
principal accountant.
- ----------------------------- ----------------- ----------------
FYE 11/30/2004 FYE 11/30/2003
- ----------------------------- ----------------- ----------------
Audit Fees $15,000 $15,000
Audit-Related Fees $ 0 $ 0
Tax Fees $ 4,000 $ 4,000
All Other Fees $ 0 $ 0
- ----------------------------- ----------------- ----------------
The Registrant's Audit Committee has adopted an Audit Committee Charter that
provides that the Audit Committee shall approve, prior to appointment, the
engagement of the auditor to provide audit services to the Registrant and
non-audit services to the Registrant, its investment adviser or any entity
controlling, controlled by or under common control with the investment adviser
that provides on-going services to the Registrant, if the engagement relates
directly to the operations and financial reporting of the Registrant. All of the
principal accountant's hours spent on auditing the Registrant's financial
statements were attributed to work performed by full-time permanent employees of
the principal accountant.
The following table indicates that there were no non-audit fees billed by the
Registrant's accountant for services to the Registrant and to the Registrant's
investment adviser for the last two fiscal years.
- ---------------------------------- --------------- ---------------
Non-Audit Related Fees FYE 11/30/2004 FYE 11/30/2003
- ---------------------------------- --------------- ---------------
Registrant $0 $0
Registrant's Investment Adviser $0 $0
- ---------------------------------- --------------- ---------------
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS. Item not applicable to
Registrant, which is an open-end management investment company.
ITEM 6: SCHEDULE OF INVESTMENTS. The Schedule of Investments is included as part
of the report to shareholders filed under Item 1 of this Form.
ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES. Item not applicable to Registrant, which is an
open-end management investment company.
ITEM 8: PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Item
not applicable to Registrant, which is an open-end management investment
company.
ITEM 9: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS. Item not applicable to Registrant, which is
an open-end management investment company.
ITEM 10: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There were no
material changes to the procedures by which shareholders may recommend nominees
to the Registrant's Board of Directors.
ITEM 11: CONTROLS AND PROCEDURES.
(a) The Registrant's President/Chief Executive Officer and Treasurer/Chief
Financial Officer reviewed the Registrant's disclosure controls and procedures
(as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the
"Act")) as of a date within 90 days of the filing of this report. Based on their
review, the Registrant's President/Chief Executive Officer and Treasurer/Chief
Financial Officer determined that the procedures are effectively designed to
ensure that material information relating to the Registrant is made known to
them by others within the Registrant and by the Registrant's service providers.
(b) There were no changes in the Registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the
Registrant's last fiscal half-year that materially affected, or were reasonably
likely to materially affect, the Registrant's internal control over financial
reporting.
ITEM 12: EXHIBITS.
(a) The code of ethics applicable to the Registrant's principal executive
officer and principal financial officer is filed herewith.
(b) The certifications required by Rule 30a-2 under the Investment Company Act
of 1940, as amended, and Sections 302 of the Sarbanes-Oxley Act of 2002 are
filed herewith.
(c) The certifications required by Section 906 of the Sarbanes-Oxley Act of 2002
are furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: The Crowley Portfolio Group, Inc.
By: /s/ Robert A. Crowley
---------------------
Name: Robert A. Crowley
Title: President
Date: January 28, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Registrant: The Crowley Portfolio Group, Inc.
By: /s/ Robert A. Crowley
---------------------
Name: Robert A. Crowley
Title: President (Principal Executive Officer)
Date: January 28, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
Registrant: The Crowley Portfolio Group, Inc.
By: /s/ Robert A. Crowley
---------------------
Name: Robert A. Crowley
Title: Treasurer (Principal Financial Officer)
Date: January 28, 2005
