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 811-4229
Churchill Cash Reserves 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: 9/30
Date of reporting period: 9/30/04
FORM N-CSR
ITEM 1. REPORTS TO STOCKHOLDERS.
CHURCHILL CASH RESERVES TRUST
ANNUAL
REPORT
SEPTEMBER 30, 2004
PRIVACY NOTICE (unaudited)
Churchill Cash Reserves Trust
Our Privacy Policy. In providing services to you as an individual who owns or is
considering investing in shares of the Trust we collect certain nonpublic
personal information about you. Our policy is to keep this information strictly
safeguarded and confidential, and to use or disclose it only as necessary to
provide services to you or as otherwise permitted by law. Our privacy policy
applies equally to former shareholders and persons who inquire about a fund.
Information We Collect. "Nonpublic personal information" is personally
identifiable financial information about you as an individual or your family.
The kinds of nonpublic personal information we have about you may include the
information you provide us on your share purchase application or in telephone
calls or correspondence with us, and information about your Trust transactions
and holdings, how you voted your shares and the account where your shares are
held.
Information We Disclose. We disclose nonpublic personal information about you to
companies that provide necessary services to us, such as the Trust's transfer
agent, distributor, investment adviser or sub-adviser, as permitted or required
by law, or as authorized by you. Any other use is strictly prohibited. We do not
sell information about you or any of our fund shareholders to anyone.
How We Safeguard Your Information. We restrict access to nonpublic personal
information about you to only those persons who need it to provide services to
you or who are permitted by law to receive it. We maintain physical, electronic
and procedural safeguards to protect the confidentiality of all nonpublic
personal information we have about you.
If you have any questions regarding our Privacy Policy, please contact us at
1-800-437-1020.
Aquila Distributors, Inc.
Aquila Investment Management LLC
STCM Management Company, Inc.
This Privacy Policy also has been adopted by Aquila Distributors, Inc., Aquila
Investment Management LLC and STCM Management Company, Inc. and applies to all
nonpublic information about you that each of these companies may obtain in
connection with services provided to the Trust or to you as a shareholder of the
Trust.
Report of Independent Registered Public Accounting Firm
The Board of Trustees and Shareholders of
Churchill Cash Reserves Trust:
We have audited the accompanying statement of assets and liabilities of the
Churchill Cash Reserves Trust ("the Trust"), as of September 30, 2004, and 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 the standards of the Public Company
Accounting Oversight Board (United States). 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 and financial highlights. 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
Churchill Cash Reserves Trust as of September 30, 2004, 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 U.S.
generally accepted accounting principles.
KPMG LLP
York, New York
November 17, 2004
CHURCHILL CASH RESERVES TRUST
STATEMENT OF NET ASSETS
SEPTEMBER 30, 2004
Cash and Net Assets -100.0% $1,002
Applicable to 1,002 shares outstanding (unlimited
number of $0.01 par value shares authorized)
Net Asset Value Per Share $1.00
See accompanying notes to financial statements.
CHURCHILL CASH RESERVES TRUST
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED SEPTEMBER 30, 2004
The Trust had no operations during the period.
See accompanying notes to financial statements.
CHURCHILL CASH RESERVES TRUST
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended Year Ended
September 30, September 30,
2004 2003
The Trust had no operations during
the periods shown.
NET ASSETS:
Beginning of period $ 1,002 $ 1,002
End of period $ 1,002 $ 1,002
See accompanying notes to financial statements.
CHURCHILL CASH RESERVES TRUST
NOTES TO FINANCIAL STATEMENTS
Note A - Churchill Cash Reserves Trust (the "Trust"), a diversified, open-end
investment company, was organized on January 4, 1985, as a Massachusetts
business trust and is authorized to issue an unlimited number of shares. The
Trust commenced operations on July 9, 1985. The Trust ceased operations on
January 25, 2001 inasmuch as all shares outstanding, except for 1,002 shares
owned by Aquila Management Corporation (which have been subsequently transferred
to its wholly-owned subsidiary, Aquila Investment Management LLC) had been
redeemed by shareholders. Although the Trust 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. Administrative expenses
incurred in connection herewith, have been assumed by Aquila Investment
Management LLC.
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 profits sufficient to relieve it from all, or substantially all,
Federal income and excise taxes.
Information Available (unaudited)
Much of the information that funds in the Aquila Group of Funds produce is
automatically sent to you and all other shareholders. Specifically, you are
routinely sent the entire list of portfolio of securities of your fund twice a
year in the semi-annual and annual reports you receive. You should know,
however, that we prepare, and have available, portfolio listings at the end of
each quarter.
Whenever you may be interested in seeing a listing of your trust's
portfolio other than in your shareholder reports, please check our website
(www.aquilafunds.com) or call us at 1-800-437-1020.
Proxy Voting Record. The Fund does not invest in equity securities. Accordingly,
there were no matters relating to a portfolio security considered at any
shareholder meeting held during the 12 months ended September 30, 2004 with
respect to which the Fund was entitled to vote. Applicable regulations require
us to inform you that the foregoing proxy voting information is available on the
SEC website at http://www.sec.gov.
CHURCHILL CASH RESERVES TRUST
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Year Ended September 30,
2004* 2003* 2002* 2001 2000
Net Asset Value, $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Beginning of Period
Income from Investment
Operations:
Net investment income - - - 0.0191 0.0561
Less Distributions:
Dividends from net - - - (0.0191) (0.0561)
Investment income
Net Asset Value, $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
End of Period
Total Return - - - 1.92% 5.75%
Ratios/Supplemental Data
Net Assets, End of Period
($ thousands) $1.00 $1.00 $1.00 $1.00 $69,143
Ratio of Expenses to Average
Net Assets - - - 0.61% 0.60%
Ratio of Net Investment
Income to Average Net Assets - - - 5.88% 5.58%
The expense and net investment income ratios without the
effect of the Manager's voluntary waiver
of a portion of fees were:
Ratio of Expenses to Average
Net Assets - - - 0.74% 0.69%
Ratio of Net Investment
Income to Average Net Assets - - - 5.75% 5.49%
* The Trust had no operations.
See accompanying notes to financial statements.
Additional Information (unaudited)
Trustees(1)
and Officers
Number of
Positions Held Portfolios Other Directorships
with in Fund Held by Trustee
Trust and Complex (The position held is
Name, Address(2) Length of Principal Occupation(s) Overseen a directorship unless
and Date of Birth Service(3) During Past 5 Years by Trustee(4) indicated otherwise.)
Interested
Trustees(5)
Lacy B. Herrmann Founder, Founder and Chairman of the 7 Director or trustee, Pimco
New York, NY President and Board, Aquila Management Advisors VIT, Oppenheimer Quest
(05/12/29) Chairman of Corporation, the sponsoring Value Funds Group, Oppenheimer
the Board of organization and parent of the Small Cap Value Fund,
Trustees since Manager or Administrator and/or Oppenheimer Midcap Fund, and
1985 Adviser or Sub-Adviser to each Oppenheimer Rochester Group of
fund of the Aquilasm Group of Funds.
Funds,(6) Chairman of the
Manager or Administrator and/or
Adviser or Sub-Adviser to each
since 2004, and Founder,
Chairman of the Board of
Trustees, Trustee and (currently
or until 1998) President of each
since its establishment,
beginning in 1984, except
Chairman of the Board of
Trustees of Hawaiian Tax-Free
Trust, Pacific Capital Cash
Assets Trust, Pacific Capital
Tax-Free Cash Assets Trust and
Pacific Capital U.S. Government
Securities Cash Assets Trust
through 2003, Trustee until 2004
and Chairman of the Board,
Emeritus since 2004; Director of
the Distributor since 1981 and
formerly Vice President or
Secretary, 1981-1998; Trustee
Emeritus, Brown University and
the Hopkins School; active in
university, school and
charitable organizations.
Non-interested
Trustees
Theodore T. Mason Trustee since Executive Director, East Wind 5 Trustee, Pimco Advisors VIT.
New York, NY 1985 Power Partners LTD since 1994
(11/24/35) and Louisiana Power Partners,
1999-2003; Treasurer, Alumni
Association of SUNY Maritime
College since 2004 (President,
2002-2003, First Vice President,
2000-2001, Second Vice
President, 1998-2000) and
director of the same
organization since 1997;
Director, STCM Management
Company, Inc., since 1973; twice
national officer of Naval
Reserve Association, commanding
officer of four naval reserve
units and Captain, USNR (Ret);
director, The Navy League of the
United States New York Council
since 2002; trustee, The
Maritime Industry Museum at Fort
Schuyler and the Maritime
College at Fort Schuyler
Foundation, Inc. since 2000.
Cornelius T. Ryan Trustee since Founder and General Partner, 2 Director of Neuberger &
Westport, CT and 2003 Oxford Ventures Partners, a Berman Equity Funds.
Sun Valley, ID group of investment venture
(11/14/31) capital partnerships, since 1981
and Founder and General Partner,
Oxford Bioscience Partners, a
group of venture capital
partnerships focused on life
sciences, genomics, healthcare
information technology and
medical devices, since 1991.
Officers
Diana P. Herrmann Senior Vice Vice Chair and Chief Executive 10 None
New York, NY President Officer of Aquila Management
(02/25/58) since 1999 and Corporation, Founder of the
Vice President Aquilasm Group of Funds and
1988-1999 parent of Aquila Investment
Management LLC, Manager since
2004, President and Chief
Operating Officer since 1997, a
Director since 1984, Secretary
since 1986 and previously its
Executive Vice President, Senior
Vice President or Vice
President, 1986-1997; Chief
Executive Officer and Vice Chair
since 2004 and President, Chief
Operating Officer and Manager of
the Manager since 2003; Vice
Chair, President, Executive Vice
President or Senior Vice
President of funds in the
Aquilasm Group of Funds since
1986; Director of the
Distributor since 1997; trustee,
Reserve Money-Market Funds,
1999-2000 and Reserve Private
Equity Series, 1998-2000;
Governor, Investment Company
Institute (2004) and head of its
Small Funds Committee since
2004; active in charitable and
volunteer organizations.
Robert W. Anderson Chief Chief Compliance Officer of the N/A N/A
Compliance Trust and the Manager since
New York, NY (08/23/40) Officer since 2004, Compliance Officer of the
2004 Manager or its predecessor and
current parent since 1998 and
Assistant Secretary of the
Aquilasm Group of Funds since
2000; Consultant, The Wadsworth
Group, 1995-1998.
Joseph P. DiMaggio Chief Chief Financial Officer of the N/A N/A
New York, NY Financial Aquilasm Group of Funds since
(11/06/56) Officer since 2003 and Treasurer since 2000;
2003 and Controller, Van Eck Global
Treasurer Funds, 1993-2000.
since 2000
Edward M. W. Hines Secretary Partner, Hollyer Brady Barrett & N/A N/A
New York, NY since 1985 Hines LLP, legal counsel to the
(12/16/39) Trust, since 1989; Secretary of
the Aquilasm Group of Funds.
John M. Herndon Assistant Assistant Secretary of the N/A N/A
New York, NY (12/17/39) Secretary Aquilasm Group of Funds since
since 1995 1995 and Vice President of the
three Aquila Money-Market Funds
since 1990; Vice President of
the Manager or its predecessor
and current parent since 1990.
(1) The Trust's Statement of Additional Information includes additional
information about the Trustees and is available, without charge, upon request by
calling 800-437-1020 (toll free).
(2) The mailing address of each Trustee and officer is c/o Churchill Cash
Reserves Trust, 380 Madison Avenue, New York, NY 10017.
(3) Because the Trust does not hold annual meetings, each Trustee holds office
for an indeterminate term. The term of office of each officer is one year.
(4) Does not include funds that are currently inactive.
(5) Mr. Herrmann is an interested person of the Trust as that term is defined in
the 1940 Act as an officer of the Trust and a director, officer and shareholder
of the Manager's corporate parent.
(6) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S.
Government Securities Cash Assets Trust and Pacific Capital Tax-Free Cash Assets
Trust, each of which is a money-market fund, are called the "Aquila Money-Market
Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona, Tax-Free Trust of
Oregon, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky,
Narragansett Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of
which is a tax-free municipal bond fund, are called the "Aquila Bond Funds";
Aquila Rocky Mountain Equity Fund is an equity fund; considered together, these
11 funds are called the "Aquilasm Group of Funds."
Analysis of Expenses (unaudited)
As a shareholder of the Trust, you may incur ongoing costs, including management
fees; distribution and/or service (12b-1) fees; and other Trust expenses. The
tables below are intended to help you understand your ongoing costs (in dollars)
of investing in the Trust and to compare these costs with the ongoing costs of
investing in other mutual funds.
The tables below are based on an investment of $1,000 invested on April 1, 2004
and held for the six months ended September 30, 2004.
Actual Expenses
This table provides information about actual account values and actual expenses.
You may use the information provided in this table, together with the amount you
invested, to estimate the expenses that you paid over the period. To estimate
the expenses you paid on your account, divide your ending account value by
$1,000 (for example, an $8,600 ending account value divided by $1,000 = 8.6),
then multiply the result by the number under the heading entitled "Expenses Paid
During the Period".
For The Six Months Ended September 30, 2004
Beginning Ending Expenses
Actual Account Account Paid During
Total Return(1) Value Value the Period(2)
CHURCHILL CASH RESERVES TRUST - $1,000.00 $1,000.00 -
(1) The Trust did not have any operations during the period.
(2) The Trust did not incur any expenses during the period.
Analysis of Expenses (unaudited) (continued)
Hypothetical Example for Comparison Purposes
The table below provides information about hypothetical account values and
hypothetical expenses based on the actual expense ratio and an assumed rate of
return of 5.00% per year before expenses, which is not the Trust's actual
return. The hypothetical account values and expenses may not be used to estimate
the actual ending account balance or expenses you paid for the period. You may
use the information provided in this table to compare the ongoing costs of
investing in the Trust and other mutual funds. To do so, compare this 5.00%
hypothetical example relating to the Trust with the 5.00% hypothetical examples
that appear in the shareholder reports of other mutual funds.
For The Six Months Ended September 30, 2004
Hypothetical Beginning Ending Expenses
Annualized Account Account Paid During
Total Return Value Value the Period(1)
CHURCHILL CASH RESERVES TRUST 5.00% $1,000.00 $1,025.07 -
(1) The Trust did not incur any expenses during the period
ITEM 2. CODE OF ETHICS.
(a) As of September 30, 2004 (the end of the reporting period) the
Trust has adopted a code of ethics that applies to the Trust's
principal executive officer(s)and principal financial officer(s)
and persons performing similar functions ("Covered Officers") as
defined in the Aquila Group of Funds Code of Ethics for Principal
Executive and Senior Financial Officers under Section 406 of the
Sarbanes-Oxley Act of 2002.;
(f)(1) Pursuant to Item 10(a)(1), a copy of the Trust's Code of
Ethics that applies to the Trust's principal executive officer(s)
and principal financial officer(s) and persons performing similar
functions is included as an exhibit to its annual report on this
Form N-CSR;
(f)(2) The text of the Trust's Code of Ethics that applies to the
Trust's principal executive officer(s) and principal financial
officer(s) and persons performing similar functions has been
posted on its Internet website which can be found at the Trust's
Internet address at aquilafunds.com.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a)(1)(ii) The Board of Trustees of the Fund has determined that
it does not have at least one audit committee financial expert
serving on its audit committee. The Fund does not have such a
person serving on the audit committee because none of the persons
currently serving as Trustees happens to have the technical
accounting and auditing expertise included in the definition of
"audit committee financial expert" recently adopted by the Securities
and Exchange Commission in connection with this Form N-CSR, and the
Board has not heretofore deemed it necessary to seek such a person
for election to the Board.
The primary mission of the Board, which is that of oversight over
the operations and affairs of the Fund, confronts the Trustees with
a wide and expanding range of issues and responsibilities. The
Trustees believe that, accordingly, it is essential that the Board's
membership consist of persons with as extensive experience as possible
in fulfilling the duties and responsibilities of mutual fund directors
and audit committee members and, ideally, with extensive experience
and background relating to the economic and financial sectors and
securities in which the Fund invests, including exposure to the
financial and accounting matters commonly encountered with respect
to those sectors and securities. The Board believes that its current
membership satisfies those criteria. It recognizes that it would
also be helpful to have a member with the relatively focused accounting
and auditing expertise reflected in the applicable definition of
"audit committee financial expert," just as additional members with
similarly focused technical expertise in other areas relevant to
the Fund's operations and affairs would also contribute added value.
However, the Board believes that the Fund is better served, and its
assets better employed, by a policy of hiring experts in various
areas, including the specialized area of technical accounting and
auditing matters, if and as the Board identifies the need, rather
than by seeking to expand its numbers by adding technical experts
in the areas constituting its domain of responsibility. The Fund's
Audit Committee Charter explicitly authorizes the Committee to
retain such experts as it deems necessary in fulfilling its duties
under the Charter
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
a) Audit Fees - The aggregate fees billed for professional
services rendered by the principal accountant for the audit of the
Registrant's annual financial statements were $2,575 in 2004 and $2,500
in 2003.
b) Audit Related Fees - There were no amounts billed for audit-related
fees over the past two years.
c) Tax Fees - The Registrant was billed by the principal accountant
$1,550 and $1,500 in 2004 and 2003, respectively, for return preparation.
d) All Other Fees - There were no additional fees plaid for audit and
non-audit services other than those disclosed in a) thorough c) above.
e)(1) Currently, the audit committee of the Registrant pre-approves audit
services and fees on an engagement-by-engagement basis
e)(2) None of the services described in b) through d) above were approved
by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of
Regulation S-X, all were pre-approved on an engagement-by-engagement basis.
f) No applicable.
g) There were no non-audit services fees billed by the Registrant's accountant
to the Registrant's investment adviser or distributor over the past two years
h) 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.
Not applicable.
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)(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.
CHURCHILL CASH RESERVES TRUST
By: /s/ Lacy B. Herrmann
- ---------------------------------
Chairman of the Board and President
December 6, 2004
By: /s/ Diana P. Herrmann
- ---------------------------------
Senior Vice President
December 6, 2004
By: /s/ Joseph P. DiMaggio
- -----------------------------------
Chief Financial Officer and Treasurer
December 6, 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 and President
December 6, 2004
By: /s/ Diana P. Herrmann
- ---------------------------------
Diana P. Herrmann
Senior Vice President
December 6, 2004
By: /s/ Joseph P. DiMaggio
- -----------------------------------
Joseph P. DiMaggio
Chief Financial Officer and Treasurer
December 6, 2004
CHURCHILL CASH RESERVES 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.