ITEM 1. BUSINESS
Mills Music Trust (the "Trust") was created, by a Declaration of Trust dated December 3, 1964, for the purpose of acquiring, from Mills Music, Inc. ("Old Mills"), the rights to receive payment of a deferred contingent purchase price obligation payable to Old Mills. The purchase price obligation arose as the result of the sale by Old Mills of its musical copyright catalogue to a newly formed company ("New Mills") pursuant to an Asset Purchase Agreement.
In payment for the aforementioned catalogue, New Mills agreed in the Asset Purchase Agreement to make quarterly payments to Old Mills (the "Contingent Portion") measured by the royalty income generated from the catalogue and, subject to certain limitations and conditions, from any copyrights thereafter acquired by New Mills.
The Contingent Portion payable for each quarterly period to and including the last quarter of 2009 is to be an amount equal to the excess, if any, of (a) the gross royalty income from the exploitation of the purchased copyrights during such period (whether received by New Mills, its affiliated companies or any other party) over (b) the sum of (i) the greater of (x) 25% of such gross royalty income or (y) the lesser of $87,500 (as adjusted for inflation by reflecting changes in average weekly earnings of employees in the printing, publishing and allied industries since 1964) or 30% of such gross royalty income; and (ii) royalties required to be paid to composers, authors and others with respect to the existing copyrights. If the Contingent Portion as so computed is less than $167,500, then the Contingent Portion will be computed on the basis of the gross royalty income and related expense of New Mills, its affiliated companies and their successors and assigns during such period not only from the exploitation of purchased copyrights, but also from any copyrights originated or acquired by New Mills and its affiliated companies subsequent to December 5, 1964 (with the deductions referred to in (i) and (ii) above) except that, when computed in this manner, the Contingent Portion cannot exceed $167,500. In addition, for any quarterly period in which the Contingent Portion as calculated above exceeds $250,000, the percentage specified in (x) above is increased to as high as 35% based upon gross royalties for the quarter.
Commencing with the first quarter of the year 2010, the Contingent Portion payable for each quarterly period is to be an amount equal to 75% of the gross royalty income of New Mills and/or its affiliated
companies and their successors and assigns from the exploitation of the existing copyrights for such period, less the related royalty expense.
The Asset Acquisition Purchase Agreement provides that the obligation to make payments will terminate on the last day of the year in which the last purchased copyright, or a renewal thereof, expires and cannot be renewed. When the existing copyrights begin to expire, the size of each payment through the year 2009 will become increasingly dependent on the success in which New Mills has in acquiring and exploiting new copyrights.
The composition of Old Mills Catalogue is estimated to be in excess of 25,000 titles of which approximately 1,500 are at present producing royalty income. The majority of the royalty income generated by the catalogue in recent years, however, was produced by a relatively small number of well-known songs, many of which have remained popular and have generated substantial royalty income over a long period of time.
The Declaration of Trust prohibits the Trust from engaging in any business; the Trust's sole activity is the receipt of the periodic installments of the purchase price and the distribution thereof (after payment of administrative expenses of the Trust) to the owners of units of beneficial interest in the Trust.
ITEM 2.
ITEM 2. PROPERTIES
The administrative office of the Mills Music Trust is at HSBC Bank, USA, Issuer Services, 452 Fifth Avenue, New York, New York 10018. No expense is being charged or paid for the office space and office equipment that is being utilized by the Trust.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5.
ITEM 5. NOT APPLICABLE
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
The following selected financial data for the years ended December 31, 2003 through 1999 are derived from the Trust's audited financial
statements. The data set forth below should be read in conjunction with financial statements of the Trust and the notes thereto and management discussions and analysis appearing elsewhere herein.
* Based on the 277,712 Trust Units outstanding
(A) On December 31 2001 the Trust received an additional $335,000 of which in January 2002, the Trust paid administrative expenses of $56,156 and the remaining $278,844 was distributed to unit holders after complying with the required NASDAQ distribution notification period. Pro forma distribution per unit of $2.59 in 2002 and $2.93 in 2001 reflects the $278,844 as if it were distributed in 2001.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE TRUST'S RECEIPTS
The Trust's receipts are derived principally from copyrights established prior to 1964 and such receipts fluctuate based upon public interest in the "nostalgia" appeal of older copyrighted songs.
The Trust's contingent fee income over the last three years has averaged approximately $978,000 per year. In addition to the above, there are a number of factors which create uncertainties with respect to the ability of the Trust to continue to generate that level of income on a continuing, long-term basis. Those factors include the effect that foreign and domestic copyright laws and any changes therein have or will have on both licensing fees and renewal rights ultimately, copyright expirations under such laws and the effect of electronic copying of materials without permission.
In 1976, the copyright law was changed for works that were within
renewal terms between December 31, 1976 and December 31, 1978 to add an extension of 19 years to the 28-year renewal term. The original copyright term is 28 years. That amendment made the copyright term 75 years. The Copyright Act of 1976 provided for a single term of life plus 70 years after author's death (with some variations in different circumstances) for works created after January 1, 1978. The 1976 act provided that the writer and his heirs could terminate a transfer or license of the renewal copyright that was executed before 1978, so long as the termination was effected in a five-year period following the end of the initial 56-year period.
The copyright laws were modified by the Sonny Bono 1998 Copyright Term Extension Act (the "Act"), which generally provided an additional 20 years of copyright protection. For works created by identified natural persons the term now lasts from creation until 70 years after the author's death. For anonymous works, pseudonymous works, and works made for hire, the term is 95 years from publication or 120 years from creation whichever expires first. For works published before 1978 with existing copyrights as of the effective date of the Act, the Act extends the term to 95 years from publication. In January 2003, the U.S. Supreme Court upheld the constitutionality of the Act in the Eldred v. Ashcroft decision, which affirmed a 2001 decision of the U.S. Court of Appeals for the District of Columbia Circuit.
The copyright laws provide that renewals vest in any person who is entitled under the rules of statutory succession to the renewal and extension of the copyright at the time the application to renew is made. If no renewal is made, renewals vest in any person entitled under the rules of statutory extension as of the last day of the original term of copyright to the renewal and extension of copyright. The writer (and not the publisher to whom the copyright was originally assigned) owns the renewal right. The laws name specified classes of persons (the writer's wife, his children, etc.) who will succeed to the renewal right if the writer dies before the end of the original term. The Act does not distinguish between composers and lyricists. However, if the composer and lyricist are not the same, each owns a portion of the renewal rights. The composer and the lyricist may, assign their respective interests in the renewal rights to a publisher at the time of the assignment of the original copyright term. Such an assignment of the renewal term is effective, however, only if the assignor survives the original term. If he does not, his heirs will succeed to his share of the renewal rights; and, in such event, these heirs are not obligated by the assignment of the rights to the publisher to whom the original assignment was made unless they joined in the assignment. In addition, the 1998 Copyright Extension Act allows writers (or their heirs) to elect, after either a 35 or 40 year period as specified in the statute, to terminate a transfer of license or renewal within five years of the expiration.
A listing of the top 50 money earning songs of the subject copyrighted songs of EMI (the current owner and administrative entity for the copyright materials) with the original copyright dates shown indicates that the copyright dates range from 1922 to 1962. This song listing indicates that no copyrights of the top 50 songs will reach the 95 year expiration within the next five years. The listing does not provide an indication of the percentage of income earned by each copyright to total income.
The Trust cannot determine EMI's ability to secure renewals of the copyrighted material; however, under the trust agreement, EMI must use its best efforts to do so.
During the quarter ended September 30, 2001 the Trust did not receive any payment of the deferred contingent purchase price from EMI. EMI charged the Trust with an adjustment for certain costs relating to copyright renewals incurred over several years and a retroactive adjustment relating to a recent court decision, which negatively affected all holders of U.S. copyrights.
For the quarter ended December 31, 2001, EMI applied the debit balance arising from the adjustment of the previous quarter to amounts owing for that quarter and initially remitted approximately $60,000 to the Trust.
After discussion between EMI and the Trust and the Trust's counsel, EMI remitted an additional amount which brought the total for the each of the quarters ended September 30, 2001 and December 31, 2001 to the $167,500 minimum quarterly distributions. EMI has taken the position that the additional distributions would be considered advances against the future Contingent Portion of earnings and the unrecouped copyright renewals. The Trust has taken the position that such minimum distributions are due regardless of the adjustment based upon the inclusion of the gross royalty income of Related Companies as defined in the relevant agreement. If EMI's position is correct, then future income of the Trust will be impacted by the recognition and amount of such advances.
The Trust's former auditors evaluated the recasting of the adjustment to years to which it pertains and the Trust submitted a letter to EMI, which recasts the amount of future contingent royalty payment reductions from $275,000 claimed by EMI to $155,000. The revision does not include the unresolved contract issue of advance (EMI's position) versus entitlement (the Trust's position). The Trust has yet to receive a response from EMI despite repeated requests.
In the quarter ended September 30, 2002, the amount paid to the
Trust by EMI was net of approximately $244,000 of the balance of the adjustment claimed by EMI. The Trust believes that the deduction should have been reduced by approximately $120,000.
The Trust received additional royalties from EMI on December 31, 2001 relating to the quarters ended September 30, 2001 and December 31, 2001. The Trust made distributions based upon the additional royalties from EMI in January 2002 after complying with the NASDAQ distribution notification requirements. In January 2002, the Trust made the distribution to unit holders of $278,844 ($1.00 per unit), as well as paying Trustee fees, printing and legal and professional fees totaling $56,156, (of which approximately $33,000 relates to the EMI matter previously discussed), resulting in undistributed cash of $44 at the end of January. These transactions are reported in the Trust's 2002 fiscal year. For federal income tax purposes, the January 2002 distribution of cash received in 2001 will be includable in the unit holder's 2001 taxable income.
ITEM 7A.
ITEM 7A. NOT APPLICABLE.
ITEM 8.
ITEM 8. AUDITORS' REPORT AND FINANCIAL STATEMENTS
The Auditors' reports and financial statements begin on page 8 and 9 of this report, respectively.
CORNICK, GARBER & SANDLER, LLP Certified Public Accountants
INDEPENDENT AUDITORS' REPORT
THE TRUSTEES AND UNIT OWNERS MILLS MUSIC TRUST
We have audited the accompanying statement of cash receipts and disbursements of Mills Music Trust for each of the years in the two year period ended December 31, 2003. This financial statement is the responsibility of the Trust's management. Our responsibility is to express an opinion on this financial statement based on our audit.
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 statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. 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.
As described in Note 1, this financial statement was prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the cash receipts and disbursements of Mills Music Trust for each of the years in the two year period ended December 31, 2003, on the basis of accounting described in Note 1.
(CORNICK, GARBER & SANDLER, LLP) ------------------------------ CERTIFIED PUBLIC ACCOUNTANTS
NEW YORK, NEW YORK FEBRUARY 27, 2004
630 Third Avenue New York, NY 10017-6705 212 557-3900 Fax 212 557-3936 50 Charles Lindbergh Boulevard Uniondale, NY 11553-3600 516 542-9030 Fax 516 542-9035
[BERDON LOGO]
INDEPENDENT AUDITORS' REPORT
To the Trustees and Unit Owners of Mills Music Trust
We have audited the accompanying statement of cash receipts and disbursements of Mills Music Trust for the year ended December 31, 2001. This financial statement is the responsibility of the Trust's management. Our responsibility is to express an opinion on this financial statement based on our audit.
We conducted our audit 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 statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. 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 audit provides a reasonable basis for our opinion.
As described in Note 1, this financial statement was prepared on the basis of cash receipts and disbursements, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.
In our opinion, the financial statement referred to above presents fairly, in all material respects, the cash receipts and disbursements of Mills Music Trust for the year ended December 31, 2001, on the basis of accounting described in Note 1.
(BERDON LLP) Certified Public Accountants
March 4, 2002
38424-1
_______________________________________________________________________________
Berdon LLP / Reply to: One Jericho Plaza CPAs and Advisors / 360 Madison Avenue Jericho, NY 11753 / New York, NY 10017 Ph: 516.931.3100 / Ph: 212.832.0400 Fax: 516.931.0034 / Fax: 212.371.1159 www.BERDONLLP.com
IAPA International Association of Practicing Accountants
MILLS MUSIC TRUST STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS YEARS ENDED DECEMBER 31, 2003
(A) See Note 4(c).
The Trust does not prepare a balance sheet or a statement of cash flows.
See accompanying Notes to Statement of Cash Receipts and Disbursements.
(B) As of December 31, 2003, HSBC Bank had not paid of itself its fourth quarter trustee fee and expenses of $656. The fee and expenses were paid in January 2004.
MILLS MUSIC TRUST NOTES TO STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS THREE YEARS ENDED DECEMBER 31,2003
NOTE 1. ACCOUNTING POLICIES AND GENERAL INFORMATION
Mills Music Trust (the "Trust") was created in 1964 for the purpose of acquiring the rights to receive payment of a deferred contingent purchase price contract obligation payable by Mills Music, Inc. ("Mills"). The contingent payments are determined quarterly and are based on a formula which takes into account gross royalty income paid to composers, authors and others, and less amounts deducted by Mills in accordance with contract terms.
Payments from Mills to the Trust are due in March, June, September and December and include net royalty income received during the preceding calendar quarter. The payments received are accounted for on a cash basis, as are expenses. The Declaration of Trust requires the distribution of all funds received by the Trust to the unit holders after payment of expenses.
The statements of cash receipts and disbursements reflect only cash transactions and do not include transactions that would be recorded in financial statements presented on the accrual basis of accounting, as contemplated by accounting principles generally accepted in the United States of America.
NOTE 2. FEDERAL INCOME TAXES
No provision for income taxes has been made since the liability therefore is that of the unit holders and not the Trust.
NOTE 3. RELATED PARTY TRANSACTIONS
The Declaration of Trust provides that each trustee shall receive annual compensation of $2,500 per year for services as trustee, provided that such aggregate compensation to the trustees as a group may not exceed 3% of the monies received by the Trust in any year, and reimbursement for expenses reasonably incurred in the performance of their duties. The Declaration of Trust further provides for reimbursement to the corporate trustee for its clerical and administrative services to the Trust. Accordingly, HSBC Bank USA, the corporate trustee, also receives reimbursement for such services (including services performed as Registrar and Transfer Agent of the Certificates representing Units).
The Declaration of Trust also provides, that if in the future any trustee performs unusual or extraordinary services, reasonable
MILLS MUSIC TRUST NOTES TO STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS THREE YEARS ENDED DECEMBER 31,2003
NOTE 3. RELATED PARTY TRANSACTIONS (Continued)
compensation for such services shall be paid, subject to certain limitations and to prior confirmation by a majority in interest of Trust Certificate holders.
Pursuant to these provisions, disbursements were made as follows for the years ended December 31:
As reported in Form 8-K dated October 10,2001, Bernard Fischman, one of the originally named Trustees under the Trust, died on July 11, 2001. As a result, HSBC is currently the sole Trustee.
NOTE 4. ROYALTIES
(a) During the quarter ended September 30, 2001 the Trust did not receive any payment of the deferred contingent purchase price from EMI. EMI charged the Trust with an adjustment for certain costs relating to copyright renewals incurred over several years and a retroactive adjustment relating to a recent court decision, which negatively affected all holders of U.S. copyrights.
For the quarter ended December 31, 2001, EMI applied the debit balance arising from the adjustment of the previous quarter to amounts owing for that quarter and initially remitted approximately $60,000 to the Trust.
After discussion between EMI, the Trust and the Trust's counsel, EMI remitted an additional amount which brought the total for each of the quarters ended September 30, 2001 and December 31, 2001 to the $167,500 minimum quarterly distributions. (See note 4(b)) EMI has taken the position that the additional distributions would be considered advances against the future contingent portion of earnings and the unrecouped copyright renewals. The Trust has taken the position that such minimum distributions are due regardless of the adjustment based upon the inclusion of gross royalty income of Related Companies as defined in
MILLS MUSIC TRUST NOTES TO STATEMENT OF CASH RECEIPTS AND DISBURSEMENTS (CONTINUED) THREE YEARS ENDED DECEMBER 31,2003
NOTE 4. ROYALTIES (Continued)
the relevant agreement. If EMI's position is correct, then future income of the Trust will be impacted by the amount of such advances.
The Trust's former auditors evaluated the recasting of the adjustment to years to which it pertains and the Trust submitted a letter to EMI, which recasts the amount of future contingent royalty payment reductions from $275,000 claimed by EMI to $155,000. The revision does not include the unresolved contract issue of advance (EMI's position) versus entitlement (the Trust's position). The Trust has yet to receive a response from EMI.
In the quarter ended September 30, 2002, the amount paid to the Trust by EMI was net of approximately $244,000 of the balance of the adjustment claimed by EMI. The Trust believes that the deduction should have been reduced by approximately $120,000.
(b) The Trust received additional royalties from EMI on December 31, 2001 relating to the quarters ended September 30, 2001 and December 31, 2001. The Trust made distributions based upon its receipt of the additional royalties from EMI in January 2002, after complying with the NASDAQ distribution notification requirements. In January 2002, the Trust made the distribution to unit holders of $278,844 ($1.00 per unit), as well as paying Trustee fees, printing and legal and professional fees totaling $56,156, (of which approximately $33,000 relates to the EMI matter previously discussed), resulting in undistributed cash of $44 at the end of January. The distribution and administrative fees have been reported in the Trust's 2002 fiscal year. For federal income tax purposes, the January 2002 distribution of cash received in 2001 was includable in the unit holder's 2001 taxable income.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
On January 14, 2003, the Trustee received a letter of resignation of Berdon LLP, the Trust's independent auditors.
The reports of Berdon LLP on the Trust's financial statements for the fiscal years ended December 31, 2000 and December 31, 2001 did not contain an adverse opinion, disclaimer of opinion or qualification or modification as to uncertainty, audit scope or accounting principles. During such fiscal years and the subsequent interim periods through January 14, 2003, the Trustee had no disagreements with Berdon LLP on any matters of accounting principles or practices, financial statement disclosure or auditing scope or procedures. In addition, there were no reportable events (as defined in Item 304 (a) (1) (v) of Regulation S-K) during these periods.
The Trustee provided Berdon LLP with a copy of this disclosure regarding their resignation prior to filing the Trust's Interim Report on Form 8-K that reported their resignation. The Trustee requested that Berdon LLP furnish the Trust with a letter addressed to the Securities and Exchange Commission stating whether Berdon LLP agreed with such disclosures and, if not, stating the respects in which it did not agree. Berdon LLP's letter, dated January 22, 2003, confirming its agreement with such statements is attached as Exhibit 16.1 and is incorporated in this Report by reference.
The Trustee engaged Cornick, Garber & Sandler, LLP on January 24, 2003 to act as the Trust's independent auditors as successor to Berdon LLP. During the Trust's 2002 and 2001 fiscal years and the subsequent interim period through January 24, 2003, the Trust did not consult with Cornick, Garber & Sandler, LLP regarding (i) either the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Trust's financial statements, or (ii) any matter that was either the subject of disagreement on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures or a reportable event (as defined in Item 304 (a) (1) (v) of Regulation S-K).
Item 9A
Item 9A CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
As of the end of the fiscal year covered by this Annual Report on Form 10-K, the Trust carried out an evaluation of the effectiveness of the design and operation of the Trust's "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e)
of the Securities and Exchange Act of 1934) under the supervision and with the participation of the Trust's management, including the chief financial individual providing accounting services and the trust officer of the corporate trustee. Based on that evaluation, the chief financial individual providing accounting services and the trust officer of the corporate trustee concluded that the Trust's disclosure controls and procedures are effective.
(b) Changes in Internal Controls
There have not been any changes in the Trust's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the fiscal period covered by this Annual Report on Form 10-K that have materially affected, or are reasonably likely to materially affect, the Trust's control over financial reporting.
PART III
ITEM 10.
ITEM 10. DIRECTORS OF THE REGISTRANT
HSBC Bank USA is the Corporate Trustee of the Registrant. The Trustees serve until their removal, resignation, incapacity, or in the case of individual Trustees, their death. Bernard D. Fischman, the individual Trustee, died July 11, 2001 and has not been replaced.
HSBC Bank USA or its predecessor Marine Midland Bank, has been the corporate trustee since February, 1965 and is a national banking association organized under the laws of the Unites States.
The Trust has not adopted a code of ethics (as defined in Item 406 of Regulation S-K under the Securities Exchange Act of 1934) governing its principal executive officer and principal financial officer as the Trust is managed by the Corporate Trustee and thus relies on the employees of the Corporate Trustee to abide by the codes of ethics established by the Corporate Trustee or its affiliates.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION (See Item 13)
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners
To the best knowledge of the Trustees, the only persons who beneficially own more than 5% of the Trust Units are as follows:
(b) Security Ownership of Management
The present Trustee has no beneficial ownership in the Trust.
(c) Changes in Control
The Trustees know of no contractual arrangements which may result in a change in control of the Trust at a subsequent date.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Remunerations of Directors and Officers
The Declaration of Trust provides that each trustee shall receive annual compensation of $2,500 per year for his services as trustee, provided that such aggregate compensation to the trustees as a group may not exceed 3% of the monies received by the Trust in any year, and reimbursement for expenses reasonably incurred in the performance of his duties. The Declaration of Trust further provides for reimbursement to the corporate trustee for its clerical and administrative services to the Trust. Accordingly, HSBC Bank USA also receives reimbursement for such services (including services performed as Registrar and Transfer Agent of the Certificates representing Units). The Declaration of Trust further provides that if in the future any trustee performs unusual or extraordinary services, reasonable compensation for such services shall be paid, subject to certain limitations and to prior confirmation by a majority in interest of Trust Certificate holders. During 2003, pursuant to these provisions, HSBC Bank USA received $1,875 as their trustee fee; an additional $625 was paid in January 2004.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
Aggregate fees paid to Cornick, Garber & Sandler, LLP for professional services rendered for the audit of the Trust's statement of cash receipts and disbursements for the years ended December 31, 2003 and 2002 included in this Annual Report and the review of interim financial statements included in quarterly reports on Form 10-Q and the review and audit of the application of new accounting pronouncements and SEC releases were $16,400 in total over the past two fiscal years.
Audit-Related Fees
Cornick, Garber & Sandler, LLP did not render any assurance and related services related to the performance of the audit or review of the Trust's statements of cash receipts and disbursements during the past two fiscal years.
Tax Fees
Cornick, Garber & Sandler, LLP did not render any tax compliance, tax advice or tax planning services to the Trust during its past two fiscal years.
All Other Fees
Cornick, Garber & Sandler, LLP has not rendered any other services to the Trust, other than the services described above, during the Trust's past two fiscal years.
The Trust is not a corporate entity and thus does not have a n Audit Committee. The Trustee has established a pre-approval policy with regard to audit, audit-related and certain non-audit engagements by the Trust of its independent auditors. Under this policy, the Trustee annually pre-approves certain limited, specified recurring services which may be provided by the Trust's independent auditors, subject to maximum dollar limitations. All other engagements for services to be performed by the Trust's independent auditors must be separately pre-approved by the Trustee.
PART IV
ITEM 15.
ITEM 15. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES, AND REPORTS ON FORM 8-K
3. EXHIBITS
16.l(1) Letter, dated January 14, 2003 from Berdon LLP to the Securities and Exchange Commission
31.1 Certification of chief financial individual providing accounting services (filed herewith)
31.2 Certification of trust officer for the corporate trustee (filed herewith)
32.1 Certification of chief financial individual providing accounting services pursuant to 18 U.S.C. Section 1350 (furnished herewith)**
32.2 Certification of trust officer for the corporate trustee pursuant to 18 U.S.C. Section 1350 (furnished herewith)**
(1) Incorporated by reference to the Trust's Current Report on Form 8-K dated January 14, 2003, filed with the Commission on January 22, 2003 (File No. 2-22997).
** The information furnished in Exhibits 32.1 and 32.2 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
March 30, 2004 Mills Music Trust ------------------------------ (Registrant)
By: /s/ Marcia Markowksi -------------------------- HSBC Bank USA Corporate Trustee