N-CSR 1 ccrtformncsr.txt 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: 9/30/03 FORM N-CSR ITEM 1. REPORTS TO STOCKHOLDERS. ANNUAL REPORT SEPTEMBER 30, 2003 CHURCHILL CASH RESERVES TRUST PRIVACY NOTICE (unaudited) Our Privacy Policy. In providing services to you as an individual who owns or is considering investing in shares of a fund of the Aquila SM Group of Funds, 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 fund 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 your fund, such as the fund's transfer agent, distributor, investment adviser or sub-adviser and to our affiliates, as permitted or required by law, or as authorized by you. We also may disclose this information to another fund of the Aquilasm Group of Funds or its distributor, or to the broker-dealer that holds your fund shares, under agreements that permit them to use the information only to provide you information about your fund, other funds in the Aquilasm Group of Funds or new services we are offering which may be of interest to 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. Independent Auditors' Report The Board of Trustees and Shareholders of Churchill Cash Reserves Trust: We have audited the accompanying statement of assets and liabilities of Churchill Cash Reserves Trust as of September 30, 2003, 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 are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. 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 Churchill Cash Reserves Trust as of September 30, 2003, the results of its operations for the year then ended, the 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, in conformity with accounting principles generally accepted in the United States of America. /s/ KPMG LLP -------------- New York, New York November 14, 2003 CHURCHILL CASH RESERVES TRUST STATEMENT OF NET ASSETS SEPTEMBER 30, 2003 Cash and Net Assets -100.0% $1,002 Applicable to 1,002 shares outstanding (unlimited number of $.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, 2003 The Trust had no operations during the year. See accompanying notes to financial statements. CHURCHILL CASH RESERVES TRUST STATEMENTS OF CHANGES IN NET ASSETS YEAR ENDED SEPTEMBER 30, 2003 2002 The Trust had no operations during the year. 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, 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 Management Corporation. 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. CHURCHILL CASH RESERVES TRUST FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
YEAR ENDED SEPTEMBER 30, 2003 2002 2001 2000 1999 Net Asset Value, Beginning of Period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 Income from Investment Operations: Net investment income - - 0.0191 0.0561 0.0469 Less Distributions: Dividends from net - - (0.0191) (0.0561) (0.0469) Investment income Net Asset Value, End of Period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 Total Return - - 1.92% 5.75% 4.79% Ratios/Supplemental Data Net Assets, End of Period ($thousands) $1 $1 $1 $69,143 $76,356 Ratio of Expenses to Average Net Assets - - 0.61% 0.60% 0.60% Ratio of Net Investment Income to Average Net Assets - - 5.88% 5.58% 4.70% 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% 0.66% Ratio of Net Investment Income to Average Net Assets - - 5.75% 5.49% 4.65%
Note: Banc One Investment Advisors Corporation served as the Trust's Investment Adviser until June 5, 1998, when, pursuant to new management arrangements, it was appointed as the Trust's Investment Sub-Adviser. On January 28, 2001, Banc One Investment Advisors Corporation resigned as the Trust's Sub-Adviser. 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 indicated otherwise.) Interested Trustees(4) Lacy B. Herrmann President and Founder and Chairman of the 12 Director or trustee, OCC New York, NY Chairman of Board, Aquila Management Accumulation Trust, Oppenheimer (05/12/29) the Board of Corporation, the sponsoring Quest Value Funds Group, Trustees since organization and Manager or Oppenheimer Small Cap Value 1985 Administrator and/or Adviser or Fund, Oppenheimer Midcap Fund, Sub-Adviser to each fund of the and Oppenheimer Rochester Group Aquilasm Group of Funds (5) and of Funds. Founder, Chairman of the Board of Trustees and (currently or until 1998) President of each since its establishment, beginning in 1984; Director of the Distributor since 1981 and formerly Vice President or Secretary, 1981-1998; President and a Director, STCM Management Company, Inc., sponsor and investment adviser to Capital Cash Management Trust since 1973; Trustee Emeritus, Brown University and active in university, school and charitable organizations. Non-interested Trustees Carroll F. Knicely Trustee President, Associated 1 West Kentucky Corporation; Glasgow, KY since 1998 Publications Inc, Glasgow, South Gate Plaza, Inc.; (12/08/28) Kentucky; director and member, Knicely and Knicely, Inc. Executive Board of West Kentucky Corporation and director and Secretary-Treasurer, South Gate Plaza, Inc. (owner and developer of shopping centers and commercial real estate); director, Vice President and Treasurer, Knicely and Knicely, Inc. (owner and developer of rental properties and residential real estate); former trustee, Cambellsville University; formerly Secretary of Commerce and Commissioner of Commerce, Commonwealth of Kentucky. Theodore T. Mason Trustee since Executive Director, East Wind 6 Trustee, OCC Accumulation New York, NY 1985 Power Partners LTD since 1994 Trust. (11/24/35) and Louisiana Power Partners, LLC since 1999; President, Alumni Association of SUNY Maritime College since 2002 (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. Officers Diana P. Herrmann Senior Vice President and Chief Operating 7 None New York, NY President Officer of the Manager since (02/25/58) since 1999 and 1997, a Director since 1984, Vice President Secretary since 1986 and 1988-1999 previously its Executive Vice President, Senior Vice President or Vice President, 1986-1997; President, Senior Vice President or Executive 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; active in mutual fund and trade organizations and in charitable and volunteer organizations. 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 Smith & 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 four Aquila Money-Market Funds since 1990; Vice President of the Manager 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) Each Trustee holds office until the next annual meeting of shareholders or until his or her successor is elected and qualifies. The term of office of each officer is one year. (4) Mr. Herrmann is an interested person of the Trust as that term is defined in the 1940 Act as an officer of the Trust. (5) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S. Government Securities Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Capital Cash Management 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 12 funds are called the "Aquilasm Group of Funds." ITEM 2. CODE OF ETHICS. (a) As of September 30, 2003 (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 Trust has determined that it does not have at least one audit committee financial expert serving on its audit committee. The Trust 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 Trust, 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 Trust 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 just as additional members with similarly focused technical expertise in other areas relevant to the Trust's operations and affairs would also contribute added value. However, the Board believes that the Trust 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 Trust'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. 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. 905: 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 of1940) as of a date within 90 days of the fling of this report, the r 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) 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. CHURCHILL CASH RESERVES TRUST By: /s/ Lacy B. Herrmann --------------------------------- Chairman of the Board December 8, 2003 By: /s/ Diana P. Herrmann --------------------------------- President December 8, 2003 By: /s/ Joseph P. DiMaggio ----------------------------------- Chief Financial Officer December 8, 2003 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 December 8, 2003 By: /s/ Diana P. Herrmann --------------------------------- Diana P. Herrmann President December 8, 2003 By: /s/ Joseph P. DiMaggio ----------------------------------- Joseph P. DiMaggio Chief Financial Officer December 8, 2003 CHURCHILL CASH RESERVES TRUST EXHIBIT INDEX (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) Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940.