UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-2481
Capital Cash Management Trust
\ (Exact name of Registrant as specified in charter)
380 Madison Avenue
New York, New York 10017
(Address of principal executive offices) (Zip code)
Joseph P. DiMaggio
380 Madison Avenue
New York, New York 10017
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 697-6666
Date of fiscal year end: 6/30
Date of reporting period: 12/31/03
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
SEMI-ANNUAL
REPORT
DECEMBER 31, 2003
CAPITAL CASH MANAGEMENT TRUST
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2003
(UNAUDITED)
ASSETS:
Cash $ 481
Due from Administrator for reimbursement of expenses 7,149
-----------
Total Assets 7,630
-----------
LIABILITIES:
Dividend payable 746
Accrued expenses 5,883
----------
Total Liabilities 6,629
----------
NET ASSETS (equivalent to $1.00 per share on
1,001 shares outstanding) $ 1,001
=====
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $.01 per share $ 10
Additional paid-in capital 1,725
Overdistributed net investment income (719)
Accumulated net realized loss on investments (15)
--------
$ 1,001
======
SHARES OF BENEFICIAL INTEREST:
Original Shares Class:
Net Assets $ 1,001
=====
Shares outstanding 1
====
Net asset value per share $ 1.00
======
See accompanying notes to financial statements.
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003
(UNAUDITED)
INVESTMENT INCOME:
Interest income $ 9,060
--------
EXPENSES:
Investment Adviser fees (note 3) 1,785
Administrator fees (note 3) 1,339
Legal fees 16,955
Trustees' fees and expenses 10,404
Auditing and tax 2,304
Custodian fees 2,068
Registration fees and dues 1,824
Shareholders' reports 625
Transfer and shareholder servicing agent fees 93
Insurance 71
Miscellaneous 3,498
--------
Total expenses 40,966
Investment Advisory fees waived (note 3) (1,785)
Administration fees waived (note 3) (1,339)
Reimbursement of expenses by Administrator (note 3) (35,525)
Expenses paid indirectly (note 5) (52)
--------
Net expenses 2,265
--------
Net investment income 6,795
--------
Net increase in net assets resulting from operations $6,795
========
See accompanying notes to financial statements.
CAPITAL CASH MANAGEMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended
December 31, 2003 Year Ended
(unaudited) June 30, 2003
------------- -------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment income .............................. $ 6,795 $ 19,894
Net realized loss from securities transactions ..... - -
----------- ----------
Change in net assets resulting from operations ..... 6,795 19,894
----------- ----------
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME:
Original Shares .................................... (6,795) (19,894)
----------- -----------
CAPITAL SHARE TRANSACTIONS
(at $1.00 per share):
Proceeds from shares sold:
Original Shares ................................. 4,109,574 4,112,943
Reinvested dividends and distributions:
Original Shares ................................. 6,214 21,466
Cost of shares redeemed:
Original Shares ................................. (5,878,653) (3,925,694)
----------- -----------
Change in net assets from capital share
transactions .................................... ( 1,762,865) 208,715
----------- -----------
Total change in net assets ............................ (1,762,865 ) 208,715
NET ASSETS:
Beginning of period ................................ 1,763,866 1,555,151
---------- ---------
End of period ...................................... $1,001 $1,763,866
========= ========
See accompanying notes to financial statements.
CAPITAL CASH MANAGEMENT TRUST
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
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. It is
registered under the Investment Company Act of 1940 (the "1940 Act") as an
open-end investment company.
The Trust consists of the following two investment portfolios: Capital Cash
Management Trust (the "Fund", a diversified portfolio which commenced operations
on July 8, 1974), and Capital Cash U.S. Government Securities Trust (a
diversified portfolio which commenced operations on March 16, 2000 and ceased
operations on December 10,2002). The financial statements included herein are
solely those of the Fund. The Trust is authorized to issue for each Fund an
unlimited number of shares of $0.01 par value in two classes of shares: the
Original Shares Class and the Service Shares Class. As of the report date there
were no Service Shares outstanding. The Original Shares Class of the Cash Fund
includes all currently outstanding shares that were issued prior to November 1,
1999, the date on which the Capital structure was changed to include two classes
rather than one. The two classes are substantially identical, except that
Service Shares bear the fees that are payable under the Trust's Distribution
Plan. The Trust ceased operations on December 2, 2003 inasmuch as all shares
outstanding, except for 1,001shares owned by Aquila Management Corporation, or
redeemed by shareholders. Although the Fund is not conducting a public offering
of its shares, it will continue to exist as a Massachusetts Business Trust and
maintain its registration as an investment company.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements. The policies are in
conformity with accounting principles generally accepted in the United States of
America for investment companies.
a) PORTFOLIO VALUATION: The Fund's portfolio securities are valued by the
amortized cost method permitted in accordance with Rule 2a-7 under 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) DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES: The net asset
value per share for each class of the Fund's shares is determined as of
4:00 p.m. New York time on each day that the New York Stock Exchange is
open by dividing the value of the assets of the Fund allocable to that
class less Fund liabilities allocable to the class and any liabilities
charged directly to the class, exclusive of surplus, by the total number of
shares of the class outstanding. Investment income, realized and unrealized
gains and losses, if any, and expenses other than class specific expenses,
are allocated daily to each class of shares based upon the proportion of
net assets of each class.
d) FEDERAL INCOME TAXES: It is the policy of the Fund to qualify as a
regulated investment company by complying with the provisions of the
Internal Revenue Code applicable to certain investment companies. The Fund
intends to make distributions of income and securities profits sufficient
to relieve it from all, or substantially all, Federal income and excise
taxes.
e) REPURCHASE AGREEMENTS: It is the Fund'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 in order to compare the value of the collateral to the amount
of the loan (repurchase agreements being defined as "loans" in the 1940
Act), including the accrued interest earned thereon. If the value of the
collateral is less than 102% of the loan plus the accrued interest thereon,
additional collateral is required from the borrower.
f) USE OF ESTIMATES: The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
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.
3. FEES AND RELATED PARTY TRANSACTIONS
a) MANAGEMENT ARRANGEMENTS:
STCM Management Company, Inc. (the "Adviser") is the Investment Adviser to
the Trust. In this role, under the Advisory Agreement, the Adviser supervises
the Fund's investments and provides various services for which it receives a fee
from the Fund which is payable monthly and computed at the annual rate of 0.20%
of the Fund'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. The Administrator receives a fee from the Fund for such
services which is payable monthly and computed at the annual rate of 0.15% of
the Fund'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.
With respect to the Fund, 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
Fund 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 its average annual net
assets plus 1% of its average annual net assets in excess of $30 million, or
(ii) 25% of its total annual investment income. For the six months ended
December 31, 2003, the Adviser and the Administrator voluntarily waived their
entire fees in the amount of $1,785 and $1,339, respectively. In addition, in
order to comply with the expense limitation above, the Administrator reimbursed
expenses in the amount of $35,525. Of this amount, $28,376 was paid prior to
December 31, 2003 and the balance was paid in early January, 2004.
b) DISTRIBUTION AND SERVICE FEES:
The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the 1940 Act. A part of the Plan authorizes payment of certain
distribution or service fees by the Service Shares Class of the Fund. Such
payments are made to "Designated Payees" - broker-dealers, other financial
institutions and service providers who have entered into appropriate agreements
with the Distributor and which have rendered assistance in the distribution
and/or retention of the Fund's Service Shares or in the servicing of Service
Share accounts. The total payments under this part of a Fund's Plan may not
exceed 0.25 of 1% of its average annual assets represented by Service Shares. No
such payments will be made by the Original Share Class. No such expenses were
incurred for the six months ended December 31, 2003. Specific details about each
Plan, including parts that authorize certain payments not by the Fund, are more
fully defined in the Prospectus and Statement of Additional Information of the
Trust.
Under a Distribution Agreement, Aquila Distributors, Inc. (the
"Distributor") serves as the exclusive distributor of the Fund's shares. No
compensation or fees are paid to the Distributor for such share distribution.
c) OTHER RELATED PARTY TRANSACTIONS:
For the six months ended December 31, 2003, the Fund incurred $16,955 of
legal fees paid to Hollyer Brady Smith & Hines LLP, counsel to the Fund, for
legal services in conjunction with the Fund's ongoing operations. The Secretary
of the Fund is a Partner of Hollyer Brady Smith & Hines LLP.
4. DISTRIBUTIONS
The Fund declares dividends daily from net investment income and makes
payments monthly in additional shares at the net asset value per share, in cash,
or in a combination of both, at the shareholder's option. Due to differences
between financial statement reporting and Federal income tax reporting
requirements, $719 has been charged to accumulated net investment loss and $719
credited to additional paid-in capital, reflecting a permanent adjustment to
undistributed net investment income computed on a tax basis as of June 30, 2003.
At June 30, 2003, the Fund had a capital loss carryover of $20 of which $5
expires in the year ended June 30, 2005 and $15 of which expires in the year
ended June 30, 2011. This carryover is available to offset future net realized
gains on securities transactions to the extent provided for in the Internal
Revenue Code. To the extent that this loss is used to offset future realized
capital gains, it is probable the gains so offset will not be distributed.
The tax character of distributions paid by the Fund:
Year Ended June 30,
2003 2002
-------- --------
Ordinary income $ 19,894 $ 38,864
======== ========
As of June 30, 2003, the components of distributable earnings on a tax
basis were as follows:
Accumulated net realized loss $ 20
====
5. EXPENSES
The Fund has negotiated an expense offset arrangement with the custodian
wherein the Fund receives credit toward the reduction of custodian fees and
other expenses whenever there are uninvested cash balances. The Statements of
Operations reflect the total expenses before any offset, the amount of offset,
if any, and the net expenses. It is the general intention of the Fund to invest,
to the extent practicable, some or all of cash balances in income-producing
assets rather than leave cash on deposit.
6. SUBSEQUENT EVENT
Effective January 1, 2004, Aquila Management Corporation, assigned its
Administration Agreement to its wholly-owned subsidiary, Aquila Investment
Management LLC, which will continue the administration of the Fund. The transfer
was made for reasons of corporate and tax planning and will have no effect on
the management of the Fund or the fees being paid.
CAPITAL CASH MANAGEMENT TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS YEAR ENDED JUNE 30,
ENDED
12/31/03
(unaudited) 2003 2002 2001 2000 1999
------ ----- ------ ------ ------ -------
Net asset value, beginning of period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income 0.0032 0.0107 0.0194 0.0540 0.0524 0.0473
------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income (0.0032) (0.0107) (0.0194) (0.0540) (0.0524) (0.0473)
------- ------- ------- ------- ------- -------
Net asset value, end of period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total return 0.32%+ 1.08% 1.96% 5.54% 5.37% 4.84%
Ratios/supplemental data
Net assets, end
of period (in thousands) $1 $1,764 $1,555 $2,076 $1,699 $1,616
Ratio of expenses to
average net assets 0.26%* 0.39% 0.41% 0.40% 0.41% 0.41%
Ratio of net investment income
to average net assets 0.76%* 1.03% 1.97% 5.40% 5.24% 4.72%
The expense and net investment income ratios without the effect of the Adviser's and Administrator's voluntary waiver of fees and
the Administrator's expense reimbursement were:
Ratio of expenses to average
net assets 4.58%* 4.86% 3.47% 3.45% 5.14% 3.51%
Ratio of net investment income
(loss) to average net assets (3.57)%* (3.43)% (1.09)% 2.35% 0.50% 1.62%
The expense ratios after giving effect to the waivers, reimbursements and expense offset for uninvested cash balances were:
Ratio of expenses to average
net assets 0.25%* 0.36% 0.40% 0.40% 0.40% 0.40%
+ Not annualized.
* Annualized.
See accompanying notes to financial statements.
SEMI-ANNUAL
REPORT
December 31, 2003
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2003
(unaudited)
ASSETS:
Cash $2,126
---------
Total Assets 2,126
---------
LIABILITIES:
Accrued expenses 1,114
---------
Total Liabilities 1,114
---------
NET ASSETS (equivalent to $1.00 per share on
1,001 shares outstanding) $1,012
======
NET ASSETS CONSIST OF:
Capital Stock - Authorized an unlimited number of shares,
par value $.01 per share $ 10
Additional paid-in capital 1,752
Accumulated net realized loss on investments (750)
---------
$1,012
======
SHARES OF BENEFICIAL INTEREST:
Service Shares Class:
Net Assets $ 1,012
======
Shares outstanding 1,012
======
Net asset value per share $ 1.00
======
See accompanying notes to financial statements.
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003
(unaudited)
The Trust had no operations during the year.
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Six Months Ended Year Ended
December 31, 2003 June 30, 2003
(unaudited)
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net investment $- $695
income
Net realized loss
from - -
securities
transactions
Change in net assets resulting from
operations - 695
DIVIDENDS TO SHAREHOLDERS
FROM NET INVESTMENT INCOME - (695)
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold:
Service Shares - 221
Reinvested dividends and distributions:
Service Shares
- 596
Cost of shares redeemed:
Service Shares - (116,172)
Change in net assets from
capital share transactions - (115,355)
Total change in net assets - (115,355)
NET ASSETS:
Beginning of period 1,012 116,367
End of period $ 1,012 $ 1,012
See accompanying notes to financial statements.
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited)
Note A - 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. It is
registered under the Investment Company Act of 1940 (the "1940 Act") as an
open-end investment company.
The Trust consists of the following two investment portfolios :Capital Cash
Management Trust (a diversified portfolio which commenced operations on July 8,
1974 and ceased operations on December 2, 2003), and Capital Cash U.S.
Government Securities Trust (the "Fund", a diversified portfolio which commenced
operations on March 16, 2000). The financial statements included herein are
solely those of the Fund. The Trust is authorized to issue for each Fund an
unlimited number of shares of $0.01 par value in two classes of shares: the
Original Shares Class and the Service Shares Class. The two classes are
substantially identical, except that Service Shares bear the fees that are
payable under the Trust's Distribution Plan. The Fund ceased operations on
December 10, 2002 inasmuch as all shares outstanding, except for 1,012 shares
owned by Aquila Management Corporation, or redeemed by shareholders. Although
the Fund is not conducting a public offering of its shares, it will continue to
exist as a Massachusetts Business Trust and maintain its registration as an
investment company.
Note B - Since inception, the Trust has qualified as a regulated investment
company by complying with the provisions of the Internal Revenue Code applicable
to certain investment companies. The Trust made distributions of income and
security gains sufficient to relieve it from all, or substantially all, Federal
income and excise taxes.
CAPITAL CASH U.S. GOVERNMENT SECURITIES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Period
Six Months Ended Year Ended June 30, Ended(1)
12/31/03** 2003 2002 2001 6/30/00
(unaudited)
Net asset value, beginning of period
$1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from investment
operations:
Net investment income - 0.0062 0.0196 0.0516 0.0161
Less distributions:
Dividends from net
Investment income - (0.0062) (0.0196) (0.0516) (0.0161)
Net asset value,
end of period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Total return - 0.62% 1.98% 5.28% 1.62%+
Ratios/supplemental data
Net assets, end of
period (in thousands) $1 $1 $116 $4,352 $1,688
Ratio of expenses
to average net assets - 0.60% 0.31% 0.59% 0.68%*
Ratio of net investment
income to average
net assets - 1.09% 2.08% 4.70% 5.30%*
The expense and net investment income ratios without the effect of the Adviser's and Administrator's voluntary
waiver of fees and the Administrator's expense reimbursement were:
Ratio of expenses
to average net assets - 40.22% 1.96% 1.86% 1.24%*
Ratio of net investment
income (loss) to
average net assets - (38.53)% 0.44% 3.43% 4.73%*
The expense ratios after giving effect to the waivers, reimbursements and expense offset for uninvested cash
balances were:
Ratio of expenses
to average net assets - 0.26% 0.28% 0.44% 0.65%*
(1)For the period March 16, 2000 (commencement of operations) through June 30,
2000.
+ Not annualized.
* Annualized.
** The Fund had no operations during the period.
See accompanying notes to financial statements.
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 30a-2(c) under the Investment Company Act of
1940) as of a date within 90 days of the fling of this report, the registrant's
chief financial and executive officers have concluded that the disclosure
controls and procedures of the registrant are appropriately designed to ensure
that information required to be disclosed in the registrant's reports that are
filed under the Securities Exchange Act of 1934 are accumulated and communicated
to registrant's management, including its principal executive officer(s) and
principal financial officer(s), to allow timely decisions regarding required
disclosure and is recorded, processed, summarized and reported, within the time
periods specified in the rules and forms adopted by the Securities and Exchange
Commission.
(b) There have been no significant changes in registrant's internal controls or
in other factors that could significantly affect registrant's internal controls
subsequent to the date of the most recent evaluation, including no significant
deficiencies or material weaknesses that required corrective action.
ITEM 10. EXHIBITS.
(a)(1) (a)(1) Aquila Group of Funds Code of Ethics for Principal Executive and
Senior Financial Officers under Section 406 of the Sarbanes-Oxley Act of 2002.
(a)(2) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(a) under the Investment Company Act of
1940.
(b) Certifications of principal executive officer and principal financial
officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.
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.
CAPITAL CASH MANAGEMENT TRUST
By: /s/ Lacy B. Herrmann
- ---------------------------------
Chairman of the Board
March 8, 2004
By: /s/ Diana P. Herrmann
- ---------------------------------
President
March 8, 2004
By: /s/ Joseph P. DiMaggio
- -----------------------------------
Chief Financial Officer
March 8, 2004
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.
By: /s/ Lacy B. Herrmann
- ---------------------------------
Lacy B. Herrmann
Chairman of the Board
March 8, 2004
By: /s/ Diana P. Herrmann
- ---------------------------------
Diana P. Herrmann
President
March 8, 2004
By: /s/ Joseph P. DiMaggio
- -----------------------------------
Joseph P. DiMaggio
Chief Financial Officer
March 8, 2004
CAPITAL CASH MANAGEMENT TRUST
EXHIBIT INDEX
(a) (2) Certifications of principal executive officer and principal
financial officer as required by Rule 30a-2(a) under the Investment
Company Act of 1940.
(b) Certification of chief executive officer and chief financial officer as
required by Rule 30a-2(b) of the Investment Company Act of 1940.